Digging Into "Dealergate", Part II

Doug Ross continues to assert that the Obama administration chose to close Chrysler dealers based on their political donations, but he relies on some one-sided data, hanging a lot on the closing list.

For my second look at the issue, I thought I'd look locally. What I did was tabulate the Chrysler dealers in the greater Metro Detroit area which are on the closing list, and also the ones on the stay-open list and take note of their political donations. Here are the results:

Closing:
Dealer, Donations

FORTINBERRY R

MCDONALD R

MONICATTI R

PENSKE R

RUSSO R

TAMAROFF R

VIVIANO R

Remaining:

Dealer, Donations

DEEBY R

FISCHER R

MCINERNEY R+D

MEADE AFIT PAC

MILOSCH R

MOORE NADA PAC

PENSKE R

RIEHL NADA PAC

ROBBINS R

SCOTT R

SNETHKAMP R

VIVIANO R

Metro Detroit Chrysler dealers who donated did so overwhelmingly to the Republicans.

The only example of a Metro Detroit Chrysler dealer who gave money to Democrats was "Hoot" McInerny, who gave large amounts to both sides. It would also be very bad press for Chrysler to try to axe McInerny's dealership, because he is a well known local personality and a big philanthropist.

I don't think you can argue any political bias in Metro Detroit, based on the data.

No Obvious Political Bias In Chrysler Dealership Closings

Update: Blogger Marla Singer at Zero Hedge did some actual statistcs on the entire dealer open and closing list, and found a small correlation between open dealers and donations to Hillary Clinton's campaign, but not a very significant difference between Democrat and Republican giving overall (0.93 vs 1.05 odds ratio of being closed, D vs R).

The blogger Doug Ross did some digging, and discovered that very few of the Chrysler dealers on the closing list gave political contributions to the Democrats in the last election cycle, and most of the ones that did give gave to Republicans.

In his original post (here), Ross found that out of a collection of 39 dealers he checked, 4 gave half or more of their contributions to Democrats (10%)

As much as I would like to believe it to be true, I don't think it is. There is a major flaw with his analysis: he didn't bother to check the dealers that are staying open to see how their political contributions broke down.

My hypothesis is that Chrysler dealers, being small businessmen, are more likely to donate to Republicans than Democrats, for predictable reasons. Like any small businessmen, car dealers want lower taxes, a lower minimum wage, fewer regulations, etc.

The list of Chrysler dealers that are staying open is here. This is a list of the dealers whose contracts will be assumed by the new Chrysler-Fiat.

What I did was go down the list and copy names into the search box at OpenSecrets.org until I got a clean hit. I did this until I got 25 dealers with donation records for the 2008 election cycle. The results can be considered randomized, since we don't expect a correlation in the alphabetical name of the dealership with their political affiliation (or geographic location).

Result: 23 dealer principals donated to Republicans, 2 donated to Democrats, or about 10%.

If you run these numbers through a binomial distribution, you get a 2-tailed P-value of 1! That means that the hypothesis that the two distributions are identical is correct. Chrysler dealers (and probably all auto dealers) who donated for the 2008 election cycle overwhelmingly supported the Republicans.

Here is my "raw data", if you want to spot check me.

DEEBY	R
AKINS	R
SMITH	R
MELLOY	R
SANZI	R
MCKAY	R
SIX	R
UDD	R
ANCIRA	R
ANDERSON	R
NOKES	R
HOSSLER	R
MAROONE	R
MORELAND	R
HADDAD	R
ALBRO	R
THOMASON	D
WYANT	R
BAUMANN	R
LANPHERE	R
SPITZER	D
BENSON	R
BERGERON	R
BERGSTROM	R
GERBAZ	R

A Prophecy Sadly Comes True

Back in the earlier days of this blog, circa 2005 (when I would get more real comments than spam), I posted that I thought GM should kill Pontiac.  At the time, Bob Lutz admitted that if Pontiac and Buick didn't pull their weight, GM would consider phasing them out.

I wrote:

Pontiac has no real identity--it is the "driving excitement" brand, but the cars are just not that exciting. Until recently, they were just warmed over, plastic clad versions of GM's platforms. Barely disguised Chevys and Buicks. 

This was before the G8 appeared, but also before the G5.  

The press is now reporting that GM will be killing Pontiac.  From Detroit News:

In its restructuring plan rejected by President Obama's autos task force last month, GM proposed shrinking Pontiac into a niche brand with one or two offerings. But the task force wants GM to cut deeper and faster, necessitating the decision to eliminate Pontiac, which leaves the automaker with four core brands: Chevrolet, Cadillac, Buick and GMC.

From a product portfolio, this makes sense.  Even with the life-support of Bob Lutz' heroic efforts to get some real excitement product for Pontiac (Solstice, G8, aborted Sport Truck), it was not enough to revive the brand, which was still being poisoned by its old-school badge engineered products.  Whatever street cred was gained by the Solstice and G8 was drained, zombie style, by the G5 (Cobalt), G3 (Aveo!), and Torrent (Equinox).

The big question now is, what happens to the dealers?  Most Pontiac dealers are multi-brand, using Pontiac as a complement to Buick and/or GMC.  Many smaller dealers will not survive without Pontiac.  How will the franchises be closed--through bankrupcy court?  Dealer lawsuits could swamp GM's emergence from bankrupcy court for years.  Or will Obama have to buy them out?  

Another Sign Of The Carpocalypse

(I hope Jalopnik doesn't go 1-800-Call-Sam on me for using "carpocalypse".)

One of the horseman of the carpocalypse rode through my workplace.  We used to have a cafeteria in our building which was run by a major catering company.  Between the layoffs and people cutting back on spending, they couldn't make money at it.  

Gone are all the made-to-order stations, and the hot entree line.  The cafeteria was changed into a convenience store--prepackaged sandwiches and salads, candy, chips, and bottled drinks.  Prices also went up.

The horseman left with heads hanging on his saddle.  Two managers, a chef, several cooks, and others lots their jobs.  I heard him rapping on the way out as he rode, "I'm rollin' down a hill, snowballin' gettin' bigger..."

Fiat's Multiair System

Fiat has developed an interesting engine system for improving fuel economy. called Multiair. This is another type of variable valve timing and lift device. Fiat's trick is to use a hydraulic path from the cam to the valve, which goes through an electrically actuated valve. By modifying the fluid flow through the valve through the engine cycle, Fiat can implement variable valve timing and variable lift.

Here's a short video on the subject.

Does America Want The Tata Nano?

My answer: no, not in its original form.

As it is, the thing (probably) won't pass the NHTSA crash tests, not to mention the basic FMVSS standards. Once you add the airbags, mass, 5mph bumpers, and so on, the puny 33HP engine won't do at all. NHTSA will require stability control, so ABS will be required.

Americans also won't buy vehicles without radios. They'll want an automatic transmission.
Tata will have to go for a much larger motor, which will reduce the fuel efficiency and raise the price.

By the time the missing features are added, the car will cost $5000. You can buy a nice used Chevrolet Cobalt, Saturn Ion, Ford Focus, etc. for that kind of money. And you'll get a proven product, with wide dealer support.

Video: Early Nano Review

This is another video review of the Tata Nano, apparently done in India for CNBC.



An interesting detail: 0-60 kph takes about 10s, which translates to 37mph. 100kph (62mph) takes 35s!

The reviewer likes the rear spoiler and fake brake vents... I'm wondering why Tata bothered, they should have invested the money in more interior amenities.

Poor Man's Aptera

This. Is. Awesome.



Also see this one.

Aptera: Quirky Toy or Real Car?

Here is a short list of reasons why I think that the Aptera will be a low volume toy for the rich or idealistic, and not a mass market transportation appliance.

• It's a tricycle--less stable handling than a car of similar wheelbase. A blown tire at speed could be very tricky to handle, especially if it is the pusher wheel that blows. (Update: a reader states that the Aptera is now FWD, however the previous design was definitely a pusher not a puller. The sketch shown in the new brochure clearly shows a rear-mounted powertrain.)
  
• Very little clearance between wheel fairings and pavement. How will it handle potholes? Dirt roads?
• No spare tire. You get a inflation kit instead.
  
• No front or rear bumpers, minor scrapes may do severe damage.
• Sectioned windows may not let a Biggie soda and fries into the cabin
• You can have any color as long as it is white.
  
• May not meet tough side and front impact standards, probably won't interface well with conventional cars. High rear end may result in rear impacts flipping the Aptera forward.
• In a crash, deceleration will be vicious becuase the Aptera is so light. Multiple airbags will have to cushion the occupants, similar to how Smart does it.
  

Silly Mazda, No iPod Controls

By now, just about everyone in the U.S. has an Apple iPod, or one of the many competitors. Most automakers have rightly realized that allowing people to use their iPods in the car with a well integrated interface would be a big selling point. The best system I have tried is Ford's Sync, which will talk to an iPod (and most other mp3 players, as well as flash drives). I have also heard good things about Chrysler's MyGIG system. GM is offering it's PAL system on many of its vehicles, and it will eventually become ubiquitous.

I was looking into the new Mazda6 recently, and I was amazed that Mazda does not offer any digital iPod integration on this car. You can get a dealer installed add-on kit (for a hefty price), but all you get out of the box is the analog aux input. This is a real turn-off for me, in fact it is nearly a deal-killer.

Mazda just released a major update to the Mazda6, the should have put iPod integration at the top of the new feature list. Sure, bluetooth audio streaming is nice, but most people don't use it yet, and Apple doesn't support it yet.

Carnival Of Cars: Ides Of March Edition

Mark Tapscott, after doing yoemans work on Carnival Of Cars (which, you may remember, was started here) has been fairly silent lately. So, with a tip of the hat to Mark, I'm going to pick up CoC sporadically for a while.

Sooooo... let's set the choke and jump on the kickstart lever...

GM's Fastlane Blog discusses the concept of "well to wheels" emissions, or Life Cycle Analysis. According to Norm Brinkman, Argonne National Labs found that "E85 using ethanol made from corn reduced CO2 by about 20 percent compared with gasoline while ethanol made from cellulosic energy crops reduced CO2 by about 75 percent."

Surprising conclusion: the Acura TL is ugly.

At TTAC, Ken Elias writes on how to save the U.S. auto industry: "Lead, follow or get out of the way. The feds should force GM to follow Ford’s example. Chrysler should get out of the way. And then, with American talent and determination, our auto industry can once again be the envy of the world."

Edmund's Daily asks, "Who's cleaner with their car--guys or gals?"". Answer may surprise.

Edmund's posts a tasty bit of retro-TV video, a montage of The Fall Guy truck jumps. Oh, and there's some girl in a bikini, too.

Steve Parker bring us an LA Times story which tells how Obama has ended the controversial (especially if you are a Teamster) policy of allowing Mexican trucks to operate inside of 25 miles of the U.S. from Mexico.

Mark Tapscott wonders if Obamanomics means the end of personal mobility, and AutoProphet responds with a hearty "not dead yet!". Hey, I can link to myself if I want to, it's my CoC!

Over at the AUTOEXTREMIST, Peter De Lorenzo lays down several pages of napalm. Don't read the rant unless you are ready to buy a new monitor. An excerpt: "I’m tired of the auto industry being treated like an old broken down piece of meat or something that should be taken out back and shot. Our so-called “leaders” in Washington - particularly certain senators and representatives who should know better - have relegated an entire industry to the dust heap. And why? So a few idiot southern senators can tout their states as the “new” center of the auto industry? Or is it because Detroit and the center of industrial America don’t quite fit into the new “Green” world that Northern Californian politicians want to shove down our collective throats?" Preach it, brother!

Trollhattan Saab has shut down, but is being reborn over at Saabs United. There, rumors are reported that a Sheikh Maktoum may be interested in investing in Saab. Rock the casbah!

At IfItsGotAnEngine, a tale of smashing a piano, followed by learning how to repair pianos, all due to sloppy Tacoma loading.

Joe Sherlock drops lots if interesting right-of-center political commentary, not much new on cars lately.

Autoblog reports that researchers have invented self healing auto paint. Impregnated with chitosan, the paint will re-connect with itself to smooth out the scratch. A note to our Jewish readers, chitosan comes from crustacean shells, so licking your car would not be kosher. Especially if it is a VW.

Jalopnik claims that unemployed UAW guys will be retrained to make fashionable hats. I'd be fact-checking this one.

Never Buy a Salvage Car That Has Been "Clipped"

You need a car, and you don't have much money. You find a guy on Craigslist selling a salvage-titled vehicle which has been "expertly repaired, new front clip".

You don't want it.

A "clip", as the repair guys call it, is when a car is cut through the unibody, and a major portion (like, half of the front end) is welded on. On the outside, it looks fine, but underneath the exterior panels, what you have is non-contiguous steel welded together. It may be done well, but it may not be. Chances are, it isn't as strong as the original design, and in a serious crash, it may offer much less protection than a normal car would.

Automuse has some good posts on this subject.

A better bet: buy a car that needs a new engine, and then find a local mechanic to drop in a donor motor from a junk yard. I've seen decent chassis for sale for $500-$1000, that when combined with a junkyard motor, would be a servicable car.

Fuel-less Jeep?

I saw a Google text ad for Jeep on this blog today, which says:

• Loading...

Jeep hybrid vehicle

Learn More About the New Jeep Fuel-less Vehicles Today.

If you follow the link, you'll see a page about Chrysler's ENVI program, which includes a plug-in hybrid Jeep--which has a gasoline "range extender".

It's not a "fuel-less" Jeep.

It is also important to note that only one ENVI vehicle has been confirmed for production, and the rest are, as far as we know, just demonstration prototypes or concepts.

I don't understand why Chrysler is spending money advertising vaporware.

European Child Seat Testing Video

A fellow from Poland (I think) sent me a link to his YouTube page, which features various videos relating to child seat safety. This one is fascinating, it is a collection of European car seat tests. Note how the tests are done on a sled, using an actual car body (not just a moving platform like the NHTSA test). Midway, one of the seats fails, sending the little dummy spinning heels over head.

Depressing Scenes At The Motor Mall

I drove through the Troy motor mall today. If you are local, you know about it, it is a huge collection of car dealerships clustered together on Maple Road between Coolidge and Crooks. Every major brand has a dealership there, and some minor ones, including Aston Martin, Jaguar, Saab, Lamborghini, Maserati, Bentley.

It was so quiet you would have thought it was Sunday and not Friday afternoon. There were no customers walking any of the lots I could see. Even huge dealerships like Chevrolet and Honda didn't seem to have anything going on. The Saab store looked closed--I couldn't tell if the lights were on. Jaguar also. Even Honda and Toyota were still. Pontiac? Dead.

If people don['t buy cars, everyone will be broke, from top to bottom. The economic impact of the Troy Motor Mall is huge, when you consider the hundreds of salesman, mechanics, accountants, porters, truckers involved. And the restaurants surrounding it.

If you don't need a new car, that's fine. But maybe throw these guys an oil change or something to keep them fed, keep them working. Maybe let the dealer do your next regular service, or take it in for detailing.

But what is our Governor doing? According to Frank Beckman on WJR, she's working on a plan to double car registration fees and gasoline taxes. "In five years you'll be blown away!" she famously said. Now she's working on blowing us away.

Standalone Saturn?

There has much discussion recently in the press about the possible future of Saturn as a stand-alone auto company. One scenario has GM spinning off Saturn to the dealer network, and the independent company would source cars from wherever it could, and sell them as Saturns, much like Sears' Kenmore brand.

There are some major problems with this idea. First, Saturn would have to find suppliers of cars that would be worthy of being sold as Saturns. Speculation centers on Chinese automakers. But the issue here is, none of the Chinese, as far as we know, are ready to enter the U.S. market. Malcolm Bricklin's big plans to bring Chery here with Visionary Vehicles fell apart; so apparently did plans for Dodge to bring a Chery sourced Hornet. I had the chance to examine a Chery car at last year's NAIAS, and I can tell you it was not up to North American standards for fit and finish. Even if Chinese Saturns were within a couple of years of being ready for U.S. customers, they would have to be very good to win over a skeptical public.

The other problem is the issue of market capacity. Without big-brother GM adding its corporate heft to Saturn, it would be yet another small import car company, similar to Subaru, Mitsubishi, Suzuki, Kia, and the former Isuzu. It would be another little brand trying for customers, in a market that is oversaturated with nameplates.

Saturn's problem is that it's brand has ceased to represent anything unique. It was started as a moderately priced seller of small cars and wagons with a no-hassle sales experience. It was morphed into a mid-market to up-market seller of decent but unexceptional cars and crossovers (they even had a Saturn minivan!). The only constant was the no-hassle dealership. In this market, basing a car brand around a sales attitude is not going to cut it.

Unless a foreign carmaker buys the Saturn brand and distribution network, I really doubt that Saturn has a future as an independent company. And if someone does buy Saturn, they are going to have a hard time making money.

A Little Machiavelli?

The situation with the Republicans being ready to trash the domestic auto industry reminded me of something I read when I was in college and a lot smarter than I am now.

From The Prince, Chapter 8 (Project Gutenberg):

Hence it is to be remarked that, in seizing a state, the usurper ought
to examine closely into all those injuries which it is necessary for him
to inflict, and to do them all at one stroke so as not to have to repeat
them daily; and thus by not unsettling men he will be able to reassure
them, and win them to himself by benefits. He who does otherwise, either
from timidity or evil advice, is always compelled to keep the knife
in his hand; neither can he rely on his subjects, nor can they attach
themselves to him, owing to their continued and repeated wrongs. For
injuries ought to be done all at one time, so that, being tasted less,
they offend less; benefits ought to be given little by little, so that
the flavour of them may last longer.

Or, restated somewhat, if you must do something ugly to the people, do it quickly all at once, get it over with, so that you can start rebuilding your reputation over time by doing beneficial things gradually.

So if you are a Republican and you just lost a big election, now is the time to do damage and break things you want broken, because you have a few years before your next chance at power.

Maybe Dead...

Senator Shelby (R-AL) and 4 others have threatened to filibuster the bridge loan bill. There are 49 Republican senators, and 51 Democrat/Independents. But of the 51, 3 are off duty: Biden, Clinton, and Obama. It isn't clear if the Democrats have enough support to get cloture, so there is a good chance that the Southern Republicans will get their wish--Chapter 11 for GM and Chrysler.

Here's the video: CNBC

The Southern Republicans are determined to bust the UAW. Here is the outline of their plan. An excerpt (red text is my emphasis):

What We Should Be Doing: The American Automotive Reorganization and Recovery Plan

Hard Benchmarks:

On December 2, the Big Three presented to Congress their plans for restructuring. While the plans included laudable goals, too few details were provided ...

The Big Three must lock in the restructuring they have promised in a matter of weeks, not months or years. Congress should instead establish firm benchmarks and a tight timeline for restructuring. Such benchmarks will include for example requiring that by March 31, 2009 each company should reach agreement whereby:

•The companies’ creditors agree to a framework to reduce each company’s indebtedness by at least 1/3.

•The UAW holds to concessions already made and further:
o Concedes the elimination of Supplemental Unemployment Benefits;
o Concedes elimination of the Jobs Bank Program;
o Agrees to either reduce company retiree health care obligations or otherwise convert a portion of such obligations into equity; and
o Agrees to reduce wages and benefits to the levels paid by non-Big Three manufacturers.

A Process for Reaching Expedited Agreement, Instead of Nationalizing America’s Auto Companies

Because of the many legal and contractual hurdles to restructuring, the companies are urged to accomplish their restructuring through the use of a pre-packaged bankruptcy or another mechanism to bring all stakeholders to the table for an agreed-upon determination of their future. It is important that these stakeholders reach reasonable compromises amongst themselves. Creating a government bureaucracy or a “car czar” to arbitrarily pass judgment on the thousands of details involved with a restructuring is akin to nationalizing the auto companies.

Interim Financing: Insurance, Rather than a Taxpayer-Funded Bailout

The Big Three may need some form of interim financing as they finalize their restructuring. In normal economic times, if their restructuring plan is considered viable, such financing should be available in the private market. Because of the current credit crisis, limited assistance may be appropriate in the form of insurance, rather than a taxpayer-funded government bailout that replaces private investment. We propose that the government provide insurance, funded by the participants with a modest FDIC-like fee, which would cover up to 50 percent of the losses of new investment in the case of default, helping to unlock immediate private investment (not unlike debtor in possession financing). Such insurance would expire on March 31, 2009. This proposal ensures that taxpayers are protected and provides a powerful incentive for the Big Three to quickly implement their restructuring plans.

So they are basically saying, 1) break the UAW, and 2) soak the creditors, while offering a 50% insurance policy against default to try to attract private investment.

It's the "private investment" part that worries me.

Not. Dead. Yet.

Thousands of people in the metro Detroit area are breathing a cautious sigh of relief this weekend, after news broke that Congress and the Bush Administration are negotiating a compromise measure to give a loan to GM and Chrysler to keep operating until the Obama administration is seated.

The whole mass has been a fascinating, and depressing political show. I listened to a few hours of the hearings over the last few days, and pompous arrogance of some of the members of Congress was infuriating. Even the sympathetic members, such as Chris Dodd (D-CT) offered ridiculous and unhelpful advice, such as suggesting with a straight face that maybe the Detroit 3 could retool their plants to build mass transit products such as busses and rail cars. "The truck and SUV plants you are closing... these have pretty long wheel bases, don't they?" said Dodd, who apparently acquired a manufacturing engineering degree somewhere, secretly.

Then came the spectacle of Maxine Waters (D-CA) complaining that dealers, specifically small dealers, specifically, minority dealers, were being hurt by all the cuts, and inquiring what the Detroit 3 were planning to do to protect the dealers. This at a time when many commentators, and many other members of Congress correctly realize that having too many dealers their hurts profitability, and reduces the efficiency of the service and distribution divisions.

But the most delicious part of the political battle, for me, was the brawl between Bush and the Democrats on where to take the loan money from. Bush said from the beginning that the financial bailout money ($350 Billion now, $350 Billion later, maybe) was for protecting the financial system, and that Congress should rewrite the Advanced Technology Manufacturer Vehicle Assistance Program (aka "section 136") law to allow that money to be used for bridge loans. The Democrats wanted Bush to use money from the financial bailout money, and to save the ATVM loan program for fuel economy retooling.

Bush stuck to his guns (he is very good at it) and forced the Democrats to make a painful choice: do nothing, and throw the UAW under the bus, or cave, and anger the Greenies. From the Detroit Free Press:

A breakthrough on the long-stalled rescue came when House Speaker Nancy Pelosi yielded to President George W. Bush on a key point: allowing the aid to be drawn from a fund set aside for the production of environmentally friendlier cars.

And, at the 11th hour, the Democrats wisely decided it was the Greens who should be thrown under the bus.

May it always be so.

The Mighty Lincoln Towncar!

I was reading Autoblog's nice summary (here) of the November sales results, and I noticed that Lincoln did surprisingly well compared to the other luxury brands. Lincoln's sales declined only 8%. By comparison, Lexus lost 35%. The only brand to have a smaller decline was Subaru.

So I went and looked at Ford's sales number details for Lincoln, on Ford's media web site.

(Click for full size image)

Lincoln did well because of two models: MKS and, of all things, Towncar. MKS came out of the gate strong, becoming Linoln's best selling vehicle, better even than the cheaper MKZ. And somehow, Ford managed to sell 200% more Towncars than a year ago. In fact, if Towncar had sold the same as last year, Lincoln's sales numbers would be down 20% instead of 8%!

Towncar had better year-over-year results than Subaru Forester (+63%) or BMW's Mini (+43%). I didn't take the time to dig through the other car maker's sales numbers, but I am willing to bet that no single model had a better year-over-year result than Towncar.

I wonder what Ford did to sell them like that... BOGO?