Mustang Parts
   Carrying Saleen wheels and Bullitt wheels.

Tuesday, May 31, 2005

Parking Idiots, Beware!

I have received my shipment of bumper stickers. As advertised, they are not too sticky. I will carry my new weapon in my glovebox.

Monday, May 30, 2005

We Should Remember

On Feb 19th, 1945, 30,000 US Marines landed on Iwo Jima, followed later by 40,000 more.

Iwo Jima is a small speck of volcanic rock, only 8 square miles in area, poking up out of the Pacific Ocean about 700 miles from Japan. The Marines faced a Japanese force of about 21,000 men, well dug in on the volcanic island with a network of bunkers and tunnels.

The Marines threw themselves into the meat grinder, fighting up Mount Suribachi's 550 feet of altitude yard by yard, bunker by bunker. The tenacious Japanese defenders fought to the death, and the Marines had to use flame throwers and grenades to clear the tunnels.

The battle for Iwo Jima lasted a month. In that time, the Marines had 7,000 men killed, and 26,000 wounded.

From Wikipedia

May we be worthy of their sacrifice. Have a good Memorial Day.

Sunday, May 29, 2005

Danica Patrick, Lucky and Good

I missed the Indy, but I do have it on VHS. Reading the reports, Danica Patrick had a very strong run, but she made some big mistakes. She qualified well, starting in 4th. During a pit stop, however, she stalled her engine, and dropped to 16th.

She fought back up to 7th, and then during a yellow flag she lost control of her car, tangling with Tomas Scheckter.

Yahoo Photos

Somehow, she managed not to stall her engine or hit anything else, and her pit crew quickly repaired the front end of her car.

Yahoo Photos

She surged to lead the race after the field went in for fuel, but because she didn't she couldn't run full out, and finished 4th.

A Little "Shop Talk" [Blogging]

A little shop talk about reading and writing blogs.

I found this awesome, free piece of software called Plucker which will grab web pages, compress them, and stuff them into your PalmOS or Windows Mobile (WinCE) PDA. You can load up all of your favorite blogs, news sites, Paris Hilton photos*, etc., and bring them with you for later reading. Like when you are sitting in a project planning meeting which is droning on, and you aren't on the agenda for another 30 minutes.

Also, if you are a blogger, there is a great free web counter at This counter will keep track of page hits, returning visitors, most popular pages, and it is completely free and ad-less unless you get more than 9,000 hits a day. Most of us small-time bloggers only get a few hundred hits a day.

* just kidding! I would never waste PDA memory on Paris Hilton.

Forbes Autos Site

There is a new automotive web site up, Forbes Autos. It looks like one to keep an eye on. Forbes regularly carries Jerry Flint's, er, flinty commentary on the industry.

In case you didn't know, here are a few other key automotive news web sites, from the "pro" side of the business:
  • Kelly Blue Book
  • Edmund's
  • Ward's Auto
  • Automotive News
  • The Car Connection
  • MSN Autos (formerly Carpoint)
  • The NHTSA
  • The IIHS
  • Yahoo Automotive news
  • Detroit News Auto Insider

Carnival of Cars #2

Welcome to the second Carnival of Cars!

(...and welcome to Instapundit readers! Thanks, Glenn!)

A minor change from #1, I have grouped items by topic.

Car Reviews:
  • At AutoExtremist, Dr. Bud squeezes a Pontiac GTO, and likes the juice.
  • AutoProphet has a chance to drive a new 2005 Mustang GT, and posts his impressions.
  • James Lileks buys a Mazda3, "peppy little minx."
  • Rideblog is unimpressed with the updated New Beetle.
  • NextGenAuto doubts that the new Mitsubishi Eclipse will save Mitsubishi. Too expensive, compared to the competition.
  • DublinSaab posts a long string of BOTD reviews (Beer Of The Day), but not a single post about cars since the last carnival.
Automotive Business
  • Autoblog reports that the Cross Lander SUV, which is really a Romanian military 4x4 with a Ford powertrain installed, has run into importation difficulties. AutoProphet argues this is a good form of protection for domestic industry.
  • Autoguy comments about GM's new division strategy, to limit the redundant products in Pontiac and Buick, and force dealers to carry both nameplates. Angry Engineer as well.
  • Bob Lutz at GM FastLane posts about GM's good quality survey performance. However, the readers respond with a flood of comments saying, basically, "stop building boring cars!". As does The Truth About Cars. Trollhattan Saab notices that Saabs were not included in the party, and investigates.
  • Robert Farago at TTAC ponders the reasons for the slide in large SUV sales: fuel prices, environmental guilt, and more car-like "crossover" SUV impostors. Jalopnik contributes a photo of a rare Land Rover Dinosaur.
  • Dave Leggett at JustAuto writes about some bad news for Saab fans: GM will be moving production to Germany, leaving Trollhattan essentially Saab-less.
  • AutoMuse comments on Ohio's lawsuit defeat, regarding its policy of "double dipping" on DUI fees.
  • BigFordFan embarked on a quest to find information about a mysterious rotary (Wankel) powered Mustang prototype. After pleas for help to the blogosphere, BFF found the history of the rotary Mustang. It was built as a demonstration by Curtis Wright (the aircraft company), not by Ford, to generate interest in Curtis' rotary engines. The final summary.
  • Carpundit writes about the etiquette of damaging other people's cars because they parked rudely, discussing the finer points of using rotten fruit or vegetables. Conclusion: turn the other cheek. A comment suggests as a non-destructive method.
  • Grant's AutoRants comments on the prospect of excitement in Formula 1 this season, now that new rules have apparently leveled the field, and slowed down Ferrari.
  • Jalopnik shares the odd tale of an Italian fisher dealer who traded a "nearly new" Mercedes for a 1800lb sea turtle, caught by an Albanian fisherman. He didn't eat the turtle.
  • In "Bland Automobile Design", Joe Sherlock laments the homogenization of automotive style. He presents a neat comparison of wheel designs than (1950's) vs now.

Thursday, May 26, 2005

Land Rover Poseur

Today, driving home in the evening, I saw one of these, a Land Rover with a snorkel:

(just an example)

Was it covered in mud? Did it have river weeds sticking out of every crack? No. It was parked in front of an upscale clothing store in an upscale neighborhood, the paint gleaming, the tires glossy. At least a Ferrari you can drive fast, maybe cruise Woodward. But snorkels and brushguards on a suburban mall hauler? Was the soccer field flooded today, mom?

The thing must sound like a horny moose when you step on the throttle.

Sure, people have a right to do whatever they want to their cars. Vestigial spoilers? Bad tint jobs? Spotlights? Spinners? Neon? Whatever. I think they look stupid.

Just stop laughing at the ground effects on my Volvo, man. The car is pure speed, all 170HP of it.

The Cross Lander: How I Learned to Love Regulations

Autoblog had a news item recently about the travails of Cross Lander. Cross Lander USA is a company that wants to import Romanian built 4x4 military trucks (think Communist Bloc Land Rover Defender) and sell them cheap to off-roaders in the US. Unfortunately, there is the little issue of NHTSA safety regulations--the thing has to have airbags, because it turned out to be lighter than originally intended. From the Washington Post article:
The hitch came when the engines Cross Lander was able to purchase for its U.S.-bound-vehicles turned out to be lighter than expected, dropping the 244X into a weight class that requires air bags. (The Hummer H1, for example, does not have to have air bags because it weighs more than 5,500 pounds unloaded. Two models of smaller Hummers must.) Cross Lander said it didn't have enough cash to pay for the $2 million to $3 million design and installation of air bags. So it asked regulators to let it sell the vehicle in the United States without air bags so it can raise enough money to pay for them.
Now, would you trust your life to a company that can't accurately estimate how much one of its designs will weigh?

On one hand, I do feel a little twitch of sympathy for the off-road types who couldn't wait to get their hands on a real, hardcore military truck for $20,000. On the other hand, as an engineer working for the American auto industry, I would prefer to see the barriers to entering our market as high as possible for newcomers (Bricklin!). There is just too much product out there, and the new kids may just steal my lunch.

Old school protectionism won't fly anymore. Unless you are Pat Buchanan or John Edwards. Both the Democrats and Republicans are on a free trade rampage, starting with Clinton's approval of NAFTA. So it doesn't seem likely that the Federal Government will defend the remaining American automakers from the likes of Chery--they already failed to do so in the case if Daewoo, Kia, and Hyundai.

However, we do have the CAFE rule, the CARB, the EPA, and the NHTSA. Some of my fellow engineer readers may be shocked, but I say this is a very good thing. The regulations and requirements that are imposed by these agencies, such as crash safety requirements, fuel economy, and emissions regulations are not easy to meet without huge investments in engineering.

Yes, the regs do add much cost to vehicles, and complexity. But they do drive high technology. Our cars are dramatically cleaner, more powerful, and safer than cars just 15 years ago. And, thanks to the engineering and cost barriers that these regulations erect, the regs actually protect American jobs.

Wednesday, May 25, 2005

Parking Revenge, The Legal Way

Carpundit posts some musings on Parking Vigilantes--people who strike out against people who mis-park, by keying the offender's car. Using rotten fruit is not recommended, either, as the chemistry may be wrong, and you may commit a property crime by damaging a cars paint.

How about an easy to remove ('low-tac') bumper sticker?

Tuesday, May 24, 2005

The End of Swedish Saabs?

Autoblog is reporting that the Saab 9-5 will move to Germany when it changes over to a new generation, leaving Trollhattan with no volume Saab product. The unnamed source reports that the Swedish plant will be used to build "niche products".

From an older TrollhattanSaab post:

Fast-forward to today, and there's the real possibility that GM may turn Saab
into either a resounding success that echoes Saab's past, or, that they may turn
Saab into a great crass-market producer of vehicles that are pretty much like
all the others.

GM have tossed out a couple of bones this week. The
retention of the Trollhattan plant is a good thing and the fact that Saabs will
continue to be made there for a few years at least is, likewise, a good
thing. These were the sweeteners for the bitter pill to come in today's
announcement: that Saabs will not always be Swedish.

Is this the beginning of the end of Saab? Does it matter to customers if Saabs are a mix of re-badged GM, Subaru, and Opel products, none of which are built or engineered in Sweden?

I have never been much of a Saab fan, though I do think their recent Swedish products are sharp. The Saabaru and re-badged Envoy don't do much for me. As a Volvo owner, I can say that it wasn't the Swedishness that appeals to me, so much as the Volvo-ness, a certain design style, with certain priorities. GM needs to be careful, to keep the Saab-ishness of Saab, or they will kill the brand.

Denver J [Culture]

I heard an interview on the radio this morning (760 WJR) with 6 year old Denver J., a little boy who is fighting Leukemia. Denver recently had a fundraiser in his honor, to raise money to send him to Disney World. However, Denver decided instead to donate the money to the Van Buren volunteer fire department, "because they need new equipment". The firemen are his heroes.

If you would like to help Denver J., and the Van Buren volunteer fire department, you can visit his web site:

It is inscrutable why God allows children to suffer, but one explanation I have heard is that it is to teach us adults important lessons, and to give us an opportunity to do good.

Monday, May 23, 2005

The Oil-change Conspiracy

I recently had this conversation, about oil change intervals, with a relative. She has been indoctrinated to change her oil every 3,000 miles by her auto dealer. I told her she was throwing away money.

Don't let the quickie-lube guy or the dealer fool you. Unless you are doing "hard duty" driving (lots of stop and go, or high temperature, for example), you do not need to change your oil any more frequently than 5,000 miles. If you drive a higher mileage car (like myself), and your car loses some oil, you should keep an eye on it and add some as necessary.

I learned this some years ago from Consumer Reports, which did an oil study on a fleet of NYC taxi cabs, probably one of the harshest use profiles there is. CR found no additional engine wear between 3,000 mile and 6,000 mile schedule taxis. They recommend oil changes on 7,500 mile intervals, for the average driver, unless the manufacturer recommends otherwise.

The bottom line. Modern motor oils needn't be changed as often as oils did years ago. More frequent oil changes won't hurt your car, but you could be spending money unnecessarily and adding to the nation's energy and oil-disposal problems.

Even in the severe driving conditions that a New York City taxi endures, we noted no benefit from changing the oil every 3,000 miles rather than every 6,000. If your driving falls into the "normal" service category, changing the oil every 7,500 miles (or at the automaker's suggested intervals) should certainly provide adequate protection. (We recommend changing the oil filter with each oil change.)

Tom and Ray Magliozzi advise an oil change interval of 5,000 miles.

Consider the savings. Over 5 years, a 3,000 mile oil change schedule will cost you about $500 on oil changes ($25/per x 4/year). A 5,000 mile schedule will cost you about $300, and a 7,500 mile interval will cost you $200.

I learned about another controversial practice from an old-timer. I'm not brave enough to try it, but he swore by it: he changed his oil filter every 3,000 miles religiously, but didn't ever drain out the oil. Just topped it off at every filter change. He swore that he never had an engine go bad with this method. He claimed that the gunk would leave with the filter, and the clean top-off would keep the additives fresh, but I suspect this is pushing it. My understanding is that oils (and additives) do break down, and mixing in 1 quart of fresh oil with 4 or 5 quarts of tired oil is not going to be as effective as all new oil.

Don't send any extra money to the Saudis. Go by what your owner's manual tells you, not what the quickie-lube and dealer say. They want to sell you the service.

Friday, May 20, 2005

Heh. [Politics]

Publishing a picture of Saddam in his underpants was not a great thing to do. However, on the whole, my reaction is similar to these Iraqis' reactions:

(They don't look too angry to me)

Sure, taking Saddam's picture violated the Geneva convention,etc. And Saddam's lawyer is planning to sue. I wonder, will they let the relatives of the thousands of people found in mass graves in Iraq sue Saddam for economic damages?

Enough GM Bashing, Mitsubishi's Eclipse Sunset

There are pundits who are harping on about GM's decline, some as bold as to declare a GM "death watch". And, they may be right, GM may be doomed--but it won't happen quickly, and it won't happen the way people expect. GM could very well come out of a bankruptcy swinging for the fences, or merge with another company.

There are, however, a few automakers who are worthy of being on a death-watch. The best example I have read of lately is Mitsubishi, who just came out with the new Eclipse. The car looks like the next generation of the Ford Cougar, weighs 3500lbs, is front-wheel-drive, and will cost $24,000 for a V6 manual version. That's Mustang V8 territory. The readers of Autoweek have just about voted the Eclipse off of the island. (HT: Autoblog)

I would say that Mitsubishi is in real danger of leaving the U.S. market, if the Eclipse flops the way it sounds like it will. The Eclipse may be Mitusbishi's sunset.

Other, non-GM nameplates that are at risk: Maybach, Smart*, VW, Jaguar, Suzuki.

*Smart may die before even making it to the U.S. market.

"Store Wars" Parody [Politics]

The National Organic Trade Association (not to be confused with NATO) has come up with a hilarious spoof of Star Wars called Store Wars. You can watch it here. The young jedi hero is Cuke, his mentor is Obi Wan Cannoli, and the space buccaneer is Ham Solo... you get the picture. The movie is cute...

I am not a big fan of the "organic" food movement. Their claims about the superiority of "natural" food play on people's fears, and are rarely if ever based on science. For example, the organic preachers are against irradiation of food, but there is no evidence that it would be harmful, only FUD. Irradiation does, however, kill organisms that could cause disease of food is not cooked, cleaned, or stored properly--ironically a more common problem if people eat more fresh produce.

I see it as a way for some farmers to make better profits, and for some consumers to feel superior and in control. It is predominantly a upper class phenomenon in my area, as the organic stores target affluent consumers, selling higher priced food.

Visteon Plants Come Home

According to the Detroit News, in order to keep Visteon from going bankrupt, Ford will take back 15 parts plants and their unionized workforce.

If the agreement is completed, Ford is likely to take back Visteon's Rawsonville Road powertrain component plant in Ypsilanti and its axle plant on Mound Road in Sterling Heights, said the people familiar with the agreement.
The other 11 to 13 factories would be spun off into a separate holding company which Ford would control. Those plants would then be sold to other auto suppliers if possible.

This is bad financial news for Ford, if the deal goes through. Ford will have to satisfy the UAW, and buy out about 5000 workers, according to the article. Then they will likely have to sell the plants at a steep discount, since the are not profitable operations. Going by the state of the auto supplier business at the moment, few if any suppliers will have the cash to buy 13 parts plants. They could even wind up in the hands of a Chinese upstart.

Once again, the Visteon spin-0ff looks like it was a mistake. If Ford wanted to get into the global auto parts business, it could have used a different arrangement, such as having Visteon as a partially owned subsidiary. If Ford was going to have to eat the money losing plants anyway, they could at least have profited from the parts of Visteon that are making money. Or if Visteon was a wholly owned subsidiary, like Hertz, Ford would be able to get its parts "at cost", without having to pay a markup to ensure a Visteon profit.

But hindsight is always clear--at the time of the Visteon spin-off, the road ahead may have looked much smoother, and a profitable Visteon may have been more than just a fantasy.

Wednesday, May 18, 2005

Autoprophet Drinks Coke [Politics]

Recently at a graduation speech, the President of Pepsi, Mrs. Indra Nooyi, compared the United States to the middle finger of one's hand (HT: Joe Sherlock, Powerline)
As I grew up and started to study geography, I remember being told that the five fingers can be thought of as the five major continents: Europe, Asia, Africa, and North and South America.
First, let’s consider our little finger. Think of this finger as Africa.
Our thumb is Asia: strong, powerful, and ready to assert herself as a major player on the world’s economic stage.

Our index, or pointer finger, is Europe. Europe is the cradle of democracy and pointed the way for western civilization and the laws we use in conducting global business.

The ring finger is South America, including Latin America.
This analogy of the five fingers as the five major continents leaves the long, middle finger for North America, and, in particular, The United States. As the longest of the fingers, it really stands out. The middle finger anchors every function that the hand performs and is the key to all of the fingers working together efficiently and effectively. This is a really good thing, and has given the U.S. a leg-up in global business since the end of World War I.

However, if used inappropriately –just like the U.S. itself -- the middle finger can convey a negative message and get us in trouble. You know what I’m talking about. In fact, I suspect you’re hoping that I’ll demonstrate what I mean. And trust me, I’m not looking for volunteers to model.
What is most crucial to my analogy of the five fingers as the five major continents, is that each of us in the U.S. – the long middle finger – must be careful that when we extend our arm in either a business or political sense, we take pains to assure we are giving a hand … not the finger. Sometimes this is very difficult. Because the U.S. – the middle finger – sticks out so much, we can send the wrong message unintentionally.

Unfortunately, I think this is how the rest of the world looks at the U.S. right now. Not as part of the hand – giving strength and purpose to the rest of the fingers – but, instead, scratching our nose and sending a far different signal.
This is possibly the dumbest analogy I have ever heard in any speech, and probably also the most insulting. Consider that her audience was an graduating class of MBAs from Colombia.

I'd like to take this opportunity to raise my middle finger to Mrs. Nooyi, and to PesiCo for hiring such a daft executive.

I'm drinking Coke.

P.S. Nothing gets a company's attention like thousands of angry consumers email. Drop a note to the PepsiCo board,, and let them know how you feel.

Mustang GT500 Movie

Here is a little movie for the Mustang fanatics, courtesy of Blue Oval News. It shows Carol Shelby flogging a GT500 prototype at Ford's Dearborn Proving Grounds. The video resolution is poor, but be sure to listen to the sounds.

You may notice a big red button sticking out of the center console above the radio. That is an emergency button, which will kill the engine. These are sometimes installed in prototype vehicles, in case the "drive-by-wire" electronic throttle fails.

Tuesday, May 17, 2005

My Mustang GT Review (Power Corrupts...)

I had the chance to take a friend's brand new Mustang GT manual on a drive today. A bright red specimen, with retro wheels, and the cheapest trim level available. Here are a few observations.

The car looks great. I'm not a fan of retro styling, especially on interiors, but the outside of the car is great. The car has a huge hood, hinting at the power underneath, and a sharkey maw up front. The wheels are far forward, and the sheet metal is wrapped tight around the sides, the car looks fast standing still. Anyone would look good sitting in this car.

I'm not a fan of spoilers, though, and if I bought one of these I would check off the "spoiler delete" option at the dealership. A well designed car like this doesn't need a spoiler to look quick. All the fake ones do is add wind resistance and cost, and reduce your rearward view.

The interior is functional, and neatly assembled, but not rich looking. Some of the pieces look and feel light weight, rental car cheap, but they are put together tightly. There aren't any large gaps or ugly seams. The steering wheel is shaped like an old school 3-spoke wheel, but it is actually a firm foam rubber like material, with a very nice, grippy texture. Cruise control buttons are on the inside top spokes, but I was disappointed that there were no wheel mounted radio controls. The seats are covered with a pronouncedly textured fabric, which is also quite grippy. The seat back had a nice pattern of galloping mustangs on the fabric. The dashboard trim was simple black textured plastic, with a little shiny chrome-like trim around deep gauge wells and the air outlets. The door panels were hard plastic, but nicely textured, with smooth inserts.

Ergonomics are very good. The previous Mustang was apparently designed for apes ( apes?), in that tall people could not easily reach the steering wheel or the shifter without tilting the seat way back, like a lazy-boy. Only if you had short legs and unnaturally long arms could you sit upright. On this car, I had no problem finding a good seating position. The pedals are arranged so that you can heel-toe shift if you want to.

There was not much of a dead pedal, which is a crime. There should be a nice rubber pad, at least, not a skinny bump in the carpet.

The cup holders need to be offset by about 1" towards the passenger, in the center console, to avoid interfering with the drivers arm if a drink is present.

The rear seats are nearly useless. If a 6' tall adult is driving, I don't see how an adult can sit behind, there is maybe 4" of clearance for legs. Mabye Ford should just do away with the farce, and put an un-cushioned storage area back there.

The stock radio is average--not great sounding, but not awful. Unlike many cars today, it is not integrated into the console, so it can be upgraded easily (Crutchfield!). It has a speed sensitive volume adjustment, which is a nice feature, especially in this car. The other controls are easy to reach, smooth operating, but plasticky.

The driving dynamics are very good, compared to the previous Mustang. The body seems very stiff, with very little vibration and no rattles on potholes and speedbumps. The car seems very composed and solid, although it feels a little heavy to me. The steering is nicely weighted, with a good amount of road feel coming through. There is very little wallow, and the noise points smoothly and quickly when you make sharp adjustments. You can tell that you have a solid rear axle, when you hit bad pavement the rear end skitters sideways a little, but on smooth pavement it doesn't not seem to matter much.

There is lots of noise at highway speeds. Lots of road surface and some wind come through loud and clear, I would get tired of the racket on long highway trips. There is also the engine, which never lets you forget that you have nearly 5L of V8 sitting a few inches in front of your feet. If you turn off the radio, you can hear lots of mechanical music coming from the V8, as well as a little gear whine from the transmission. You also feel the engine loud and clear, through the steering wheel, pedals, and especially the shifter. The overall effect isn't that you are driving a cheap, unrefined car, but that you are connected to a powerful machine through your right hand.

The power band on the Mustang is addictive. Especially for those of us who drive Volvos every day with less than 200HP. Bored? Slide into the clear lane, clutch-in-throttle-blip-downshift, wind it up to 4000RPM, listen to the engine howl in the bass register. You are pushed back into your seat, and before you know it, you are going 80MPH on Woodward Avenue, which is a 45MPH road. That's when you discover the brakes, which are excellent. Linear, nicely weighted like the steering, lots of stopping power.

The Mustang is not a European sports coupe. It drives and idles more like a tightened up old-school muscle car. It is obvious where Ford chose to invest its money in the Mustang, and I think they chose wisely. They spent money on the parts that make car drive well, go fast, turn tight, stop short, and look great on the outside. I don't think I personally would buy one, if I only can have one car, for practicality and comfort reasons, but I would borrow one every chance I got.

Now, if I can just borrow a Corvette for a few hours...

Monday, May 16, 2005

Forbes: Big 2 Underrated

Steve Forbes, in the May 23rd issue of his magazine, writes that Ford and GM are underrated, financially. He argues that better products are coming, and that the balance sheets are not bad.

The woes of the U.S. automotive industry have been well covered by the media. The problems are all too real, but the negativity has been overdone.
Ford Motor Co.'s common stock and its income securities have been way overhammered by the fallout from General Motors' well-publicized woes. If Ford is an example of a large, sick company, may there be more of them. Ford will make money this year. More important, its cash flow is positive. That is something to emphasize: Ford will take in more cash than it spends--this in a year that'll be pretty tough for auto manufacturers. The company already sits atop more than $23 billion in cash--that's more than $12 a share. Debt? The obligations of Ford's financial arm are well covered by the stream of payments from auto buyers. The automotive part of the company has debt of $17 billion, and maturities are prudently stretched out for years to come.

Make no mistake, under Bill Ford's leadership future designs of Ford vehicles will be exciting, cutting-edge, à la the brisk-selling Mustang and the GT sports car.
General Motors? If management does for the rest of GM what it did for once-tired Cadillac, then GM is in for sunnier days.

So far, I am with him. The media, and certain web pundits, hammer on F and GM incessantly, as if they are stuck in a loop. It is nearly obsessive-compulsive, the frequency of criticism from all directions. Enough to make a guy like Bob Lutz lash out at the media.

However, when Forbes gets to the practical advice on how to handle the huge cost disadvantage of the American automakers, he loses his marbles, a little.

What about Detroit's onerous health care and pension obligations? The answer is for unionized workers to switch over to Health Savings Accounts (HSAs). They'd still enjoy catastrophic coverage, and much of their high deductibles would be covered by cash payments to their individual tax-free accounts. Auto manufacturers would save a bundle on healthcare premiums, and most workers would see HSAs as a positive step up from their current plans: If a worker is blessed with good health, he would build up a nice pile of cash that belonged to him. A variation on HSAs could be offered to retired workers.

The United Auto Workers will fiercely resist such a change--initially. There may even be labor strife before the union accedes. But leaders and members know in their gut that the current situation is untenable. With an HSA-type solution they'd get as much of a win/win situation as is possible under the circumstances.

As for pensions, a bit of improvement in the financial markets will provide enormous relief. Longer term--after the introduction of HSAs--the next battle will be to get 401(k)-like plans for new unionized factory workers.
I have a great deal of respect for Steve Forbes, however, I think he must have been drinking Michael Jackson's cool-aid. HSAs? Personal retirement accounts? For the UAW?!?

The UAW will never agree to HSAs. They would have to turn their backs on decades of labor paternalism. The union promise to their people is this: "join our union, keep us in power, pay your dues, and we'll make sure you are taken care of". HSAs would no doubt work, by causing people to consume less healthcare, since some of the cost will come directly out of their accounts. However, in an HSA, the user has to manage the billing himself, even negotiating prices with doctors. I just don't see the UAW going for it--and I don't blame them.

A 401(k) like retirement account for auto workers is a little more likely, but they probably won't offer much choice for the worker. From the UAW web site:

The UAW believes that 401(k) plans can provide a valuable supplement to defined benefit plans. But, as vividly demonstrated by the Enron and WorldCom debacles, these plans provide less retirement security for working families. Workers are not guaranteed any specific benefits under 401(k) plans. Instead, the benefits are subject to the risks of stock market fluctuations and may turn out to be illusory. Significantly, the PBGC does not guarantee benefits under 401(k) plans.

To prevent a recurrence of the Enron and WorldCom abuses, the UAW believes there is a need for reforms... to ensure that there is prudent diversification of plan investments by participants in 401(k) plans.

And even if the UAW agreed to change to individual retirement accounts instead of a traditional pension plan, the companies would still have to keep paying existing retirees. There is no way around the problems of a shrinking company.

Some People Like Retro

James Lileks, for example (HT: Joe Sherlock):
Today we went through many web pages looking at many cars, and it was depressing; most mid-priced sedans were designed by graduates of the International Institute of Boring Your Ass Off, and have the same dull front and the same dull back and the same dull middle. I repeat my earlier contention: bring back a car that would have looked at home in 1957 and they would sell a kajillion units. Something that leaned into the wind, had boobie headlights and forty-nine tons of chrome, two colors, poke-your-eye-out fins and a hood ornament in the shape of a rocket or a nuclear weapon. But no: we get the same old same old, over and over.
Not me. Except for maybe the 2005 Mustang, I don't get much out of retro-styled cars like the Chrysler PT Cruiser or the Chevrolet HHR. I guess I'm too young, and I don't have any nostalgia for the pop culture of the 1950's. Fins on cars look silly, and so does too much chrome.

I think that Cadillac has a much better idea: drag people kicking and screaming into a new design theme, something edgy and different. When you see a Cadillac drive by, now, you know that it is a Cadillac, not some creased jellybean that might be a Lexus, Infiniti, Toyota, Honda, or Hyundai. It may alienate some of the older customers, that is true. But let them put their vinyl roofs on Towncars.

GM Kills V10

According to a post in GMInsidenews (HT: Angry Engineer), GM is stopping work on a pushrod V10 engine that was supposed to be an even higher performance motor than the large V8's they sell.

GMInsidenews has learned that the highly anticipated LS derived V10 slated for production in several upcoming GM vehicles has been terminated. According to GM insiders, the V10 was scrapped due to fears of fuel consumption and the redundancy of its power output compared to the Supercharged 6.0L LS2. Apparently after being tuned, a Supercharged LS2 is capable of up to 608HP. However it is more likely that GM will send out its Supercharged LS2 with a 500HP/500lb.ft torque rating. While the V10 would not have required premium fuel (as does the LS2 SC), it's ratings would be lower than that of the LS2 SC, while retaining the same power numbers.
This probably has a lot in common with Ford's recent decision to kill their 6L V8 project. Why spend money on engineering and tooling for larger displacement engines, when tougher CAFE and emissions standards are coming? Much better to refine the engines that you have, and spend your cash on quality, safety, and comfort.

500HP is not too shabby, even if it is pushing a full sized "sport truck". Anyone who drives such a thing can afford the premium gas. GM will not fall behind the pack with this decision.

Sunday, May 15, 2005

Carnival of Cars #1

(For the first try, these are just the car blog posts that I liked. In the future, maybe people could suggest which posts they thought where their best. Time permitting, I will try to do this again every week or two, unless someone else would like to volunteer to host it.)

Welcome InstaPundit readers! Thanks Glenn!

So, without further delay, step right up ladies and gentlemen, to the Carnival of Cars. And don't mind the carnies, they are tattooed but tame.
  • AutoBlog reports that some roll-out plans for the new Ford 3.5L V6 "Duratec 35" have been leaked. Apparently, in 2007 the Fusion/Milan/Zephyr get it, and in 2008 the 500/Montego/Freestyle.
  • AutoMuse muses on the dangers of "clipping" t ype collision repairs, where whole sections of a vehicles unibody are cut off, and new sections are welded on in their place. As AutoMuse points out, this repair may look right, but it may not be safe.
  • AutoProphet spots a mysterious Mustang prototype, which looks like the next Mach 1. Unfortunately, no camera.
  • BigFordFan ponders whether the automakers get their moneys worth out of Nascar. Apparently an iconoclast, BFF declares that Nascar isn't worth sponsoring, and that carmakers should focus on the autosports that run actual production or near-production vehicles.
  • Carpundit continues his crusade for seat belts on school buses, blogging about a severe school bus crash in Missouri.
  • Bob at Cars! Cars! Cars! predicts GM and Ford will have to merge to survive, in his predicted list of the top 7 carmakers 10 years from now.
  • Dublin Saab delivers a brutal debunking to over their middle-east oil consumption calculator. Apparently, the calculator doesn't take into account the fact that not all our oil is imported from the middle east. Dublin also discusses the non-intuitive economic results if oil prices drop. Reduced consumption, so the high volume producers (Saudi Arabia, etc.) will be in a better position to survive than the smaller producers. Effect: more middle-east oil consumption, relative to other sources.
  • The scrappy Bob Lutz of Fastlane, in a daring move, gives away GM's secret plans for fixing its problems: build better cars, and sell more of them.
  • Gary Wirtzenburg spars with Robert Farago on The Truth About Cars over GM's chances. Farago is in death-watch mode, while Wirtzenburg tells him he needs a fact checker. Ouch.
  • Grant's Autorants scolds scrappy Bob Lutz for blunt public comments which may sound foolish: that well-off people who buy SUVs don't care if gas is expensive.
  • Dave at Just Auto delivers a rumor that Ford is talking to Nissan in Europe about some kind of joint venture.
  • NextGenAuto blogs about the media's too quick assumption that because Toyota apparently offered to sell GM hybrid technology, and because GM's management was going to meet with Toyota management, that they were in fact going to discuss the deal. Which was not the case.
  • The Angry Engineer (aren't we all?) points out how the credit downgrades of GM and Ford is snowballing, doing damage to the ability of suppliers to borrow against accounts receivable from the OEMs.
  • Peter at The Auto Extremist lists his ten hottest automotive stories for 2005: the future of GM; the implosion of Detroit; the dark side of Toyota; Chrysler's shallow success; Hyundai's ascent; Hybrid over-hype; Honda's lagging; Nissan's momentum; BMW's missteps; VW's woes.
  • Joe Sherlock needs to add bookmarks to his posts so I can link to them. On May 10th, Joe posts about the Detroit Free Press columnist who decides to buy a Honda Accord, and gets inundated with hate mail from irate readers. Joe bought an Avalon, so we should all be sending him hate mail as well.

Friday, May 13, 2005

Jumbo Mini Prom-Mobile

"Understated elegance"...

...overstated intelligence.

What next? A Miata limo? Maybe a stretch motorcycle?

Oops, found one. Good for that Sturgis wedding...

Wright Brothers Anaconda

And, of course, few things are as luxurious as a coach made from a 4WD diesel powered military truck.

Maximum Limousine Inc.

Thursday, May 12, 2005

The CAW Posture

I heard an interesting interview of the Canadian Auto Worker's president, Buzz Hargrove, on the Paul W. Smith show on WJR this morning. Hargove was invited to explain his recent comments that the CAW had no intention of conceding benefits to the American automakers. Memorable quotes (approximate, from memory):

We could work for free, it would not save the auto companies.

The issue is market share. Taking money out of the pockets of working people will not save them.

Malcolm Bricklin is over in Shanghai, talking about bringing 200,000 cars into the U.S. He's just over the water from Japan.. why isn't he going to import cars into Japan? Because the Japanese won't let him. Why will the U.S. let him import cars, and destroy such an important industry?

Chrysler is doing well now, but it is not sustainable. They have a few hits, the 300, the Jeeps are doing well, the minivans. But they can't gain market share.

"We could work for free" was a great redirection, and about 1/4th true. The average car takes about 24 man-hours to build. The average unionized worker is paid something on the order of $25/hr. So the labor cost per vehicle is about $625. However, the "legacy cost" per vehicle is on the order of $2100--GM spends $1500 on healthcare and $600 on pensions, averaged over all of their production volume.

By comparison, the Japanese automakers probably do pay a few dollars less per hour, and use less hours to build each car, closer to 19. That would account for a disadvantage of, say, $30/car. The big ticket items are the pension and healthcare costs--Toyota, according to one article I read, only spends about $300/car on healthcare. and about $200/car for pensions, leaving GM with a cost disadvantage of $1600/car.

That $1600/car is the killer, because that is $1600 that was not used to improve quality, safety, fuel economy, or pay for incentives. Consider: the difference in (street) price between an aluminum block DOHC engine and an iron block OHV engine is about $900 (2005 Taurus example, from Edmund's).

So, Buzz is right--they could work for free, in terms of wages, and only save GM or Ford about $600, 1/4th of the competitive disadvantage with the Japanese. The Canadian Auto Workers probably don't have much to offer GM and Ford, compared to their much larger counterpart in the US--they are a much smaller union, with about 50,000 members working for OEMs vs UAW's 300,000. But if the UAW would agree to some concessions, that could really help the Big 2.5 gain competitiveness.

"The issue is market share..." I don't agree with this entirely. It is true that much of the increase in legacy costs per vehicle is simply due to selling fewer vehicles. Just like the Social Security problems--too many retirees compared to productive workers. But blaming market share is not much of an answer, because market share is virtually impossible to regain quickly, especially when the American companies are working with a large cost disadvantage.

"Malcom Bricklin..." is a very good observation. I am not a fan of trade wars, we need people to buy our stuff. But should it be easy for Bricklin to dump his cheap Chinese cars in the US market? Is the danger of massive economic destruction of a major domestic industry worth a few inexpensive cars, to the average consumer? Ronald Reagan's import tariffs on Japanese motorcycles are credited with saving Harley Davidson.

"Chrysler is doing well now..." I have written before, in my opinion, Chrysler is always one hit away from disaster, but somehow, they manage to come up with the right products at the last moment. Hopefully they will be more of an influence on Mercedes than Mercedes on them.

Hargove's bluster is natural--his job is to represent his workers, not sell them out in public. However, conceding some goodies would definetely help the auto companies. It would free up money that could be put back into the product, to try to increase prices and profitability. The CAW and UAW need to be carefull, and balance their members individual needs against the survival of the industry.

Batman Called...

...and he wants his car back.

This is a picture of the Maybach Exelero concept (HT: Autoblog)

I think it looks very... Teutonic. Kind of a cross-breed between a new BMW and a Chrysler Crossfire.

Ramming the Iceberg

From the Detroit News, a report that GM is going to increase production at its full size truck plants, "in anticipation of a surge in late spring and summer sales."

This is quite a gamble. If the sales jump doesn't materialize, GM will be left with even more inventory languishing on storage lots, and will have to put even more cash on the hood to sell it all off. Currently, GM has an 80 day supply of its trucks.

GM apparently continues to embrace the "volume at all costs" strategy, but they really don't have much of a choice at this point. They have spoiled their customers with rebates, and the new trucks are not due for some time yet.

Wednesday, May 11, 2005

New Mach 1?

Today while driving in to work, I saw a bright red M-plate (manufacturers plate) 2005 Mustang GT, with a functional "shaker" type hood scoop, mounted to the engine and protruding through the hood. I wish I had a camera handy, but I didn't. It was not a hack job, but an apparently finished part, so I am guessing it is well along in development. No other major changes were apparent.

So it looks like there is a Mach 1 version of the new Mustang coming soon.

Price Gouging

Some shoppers get upset when a dealer adds a "market adjustment" to the MSRP of a hot new car, such as the Toyota Prius or Ford GT. I don't see a problem with it--it isn't "gouging", it is basic economics. The price of something will go up as long as someone is willing to pay more, until demand recedes and balances against the supply of the product, or the amount of product increases and balances the demand. Early adopters pay handsomely for the chance.

Here is an interesting web page, put up to explain the pricing environment for the Ford GT: Currently, dealers are marking up the sticker price by as much as $45,000. However, the web page believes that the prices will fall at a rate of about $25,000/quarter, based on the first 244 cars sold, and that the prices will decay until they are nearly at MSRP. (I'm bummed that this is, for me, an academic topic!)

For the Prius example, this article states that 7% of Prius buyers paid more than MSRP, and 68% paid no more than MSRP. That tells me that 68% of Prius buyers are firmly committed environmentalists, and 7% of them are greenie wingnuts. But comfortably middle class ones.

Tuesday, May 10, 2005

NHTSA Shoots Down Fire Extinguisher Industry

Autoblog has an item about how NHTSA has denied a request from the Fire Equipment Manufacturers Association (news story here). The FEMA (not to be confused with Federal Emergency Management Administration) petitioned NHTSA to require portable fire extinguishers on vehicles weighing less than 10,000lbs. Vehicles that weight more than 10,000lbs are currently required to carry fire extinguishers on-board.

They also require drivers who have commercial Drivers Licenses, since these large vehicles are busses, tractor trailers, construction machines, etc. Commercial drivers are trained, at least in the basics, of fire safety. The Michigan CDL Manual , for example, has a chapter on how to handle vehicle fires.

NHTSA was right to reject the petition. Without some way to ensure that people get fire training, requiring fire extinguishers would be wasteful at best and dangerous at worst, if people try to fight a fire they should be fleeing. This looks like an attempt to enlarge the market for fire extinguishers. What FEMA should do is to sponsor a nationwide advertising campaign, encouraging drivers to buy fire extinguishers for their cars, and to offer training on how to use them. It could be very effective, if it showed examples, like OnStar, of how a fire extinguisher carried in a vehicle saved lives or property.

I personally do carry fire extinguishers in all of my cars, along with the flares, jumper cables, etc. I have never had to use the fire extinguisher, but is a nice bit of insurance.

They Are Listening

Here is a good reason to blog: the automakers are monitoring the enthusiast forums and blogs, looking for feedback, buzz, and mis-information that needs to be countered.

If enough of us complain about the same things, or request the same things, we may influence what the automakers do. (I suggest postings requesting more manual transmission V6 vehicles.)

So go ahead and post the rant! Maybe it will make an impression.

Monday, May 09, 2005

Putin's Ride

When foreign leaders visit George W. Bush at his ranch in Crawford, TX, he takes them on a ride in his F250.

When foreign leaders visit Vladimir Putin, he takes them for a ride in his... Volga?

Actually, this is oddly appropriate: the GAZ (Gorky Auto Factory) was a joint venture between Ford and the USSR in the 1920's (see Wikipedia)

Polling the Customers

I saw a news item recently that Ford has posted a "build your Fusion" web site (here). What is new about this is that the Fusion is not in production yet--Ford is polling the customers, to see what build combinations are most popular.

My biggest disappointment with the Fusion is that it will not come in a V6 + manual combination. If you want to row your own, you have to buy the 2.3L I-4, which will not be exactly sporty--I would guess 0-60 times in the 9s range. Mazda was caught off guard when many more customers than expected, seeking zoom-zoom, wanted to buy a Mazda6 with a V6 and manual transmission.

Ford has added a "Future Options" screen to the site. They offer a list of possible future equipment, such as AWD, V6 manual, navigation system, stability control, etc.

This is a great idea. All carmakers should set up web sites where potential customers can configure their preferred combination. If they do this well enough in advance, say when a concept is unveiled at an auto show, by the time production comes around, they will have had time to adjust the product.

Sunday, May 08, 2005

Blog Ethics: Employers and Employees [Culture]

Aish HaTorah's "The Jewish Ethicist" has a fascinating article on the ethicss of blogging, specifically, if an employer can fire an employee for what the employee blogged about the company. The conclusion:

So your first step should be to examine if taking action against this employee is really in your best interest. If the person is a good worker and not doing any material damage to your firm, the best thing is probably to just leave him alone and take advantage of any lessons you can learn from his log.

If you conclude that the worker's words create an unfair image of your firm, then by all means take action. Explain your expectations to the worker, and listen carefully to any counterclaims he may make. If you have given fair warning and the activity continues then you should consider disciplinary action.

The article is here.

Thank You, Vietnam Veterans [Politics]

If anyone reading this blog is a Vietnam Veteran, let me take a moment to say:

Thank you for our service to our country, and may God bless you.

The men who fought against the North Vietnamese, Chinese, and Russian military were no less professional, humanitarian, or courageous than the men who fought against the Wehrmacht, or the men who fought against the Iraqi Republican Guard. They were not "baby killers" or "imperialists". The true baby killers were the North Vietnamese, who would slaughter their own people rather than let them be helped by the U.S. The true imperialists were the Chinese, who wanted to spread communism throughout Asia.

There was no strange moral change in the '60's which created an army of monsters, these were young men from the same decent society that produced the armies of the "greatest generation". The anti-war movement of the 60's was sympathetic to communism, and wanted the U.S. to lose, much like todays fringe anti-war activists want the U.S. to lose in the middle-east. The radicals of the '60s have managed to control the language of history for too long.

Jane Fonda deserved what she recently got.

Saturday, May 07, 2005


Bob at Cars!Cars!Cars! predicts that GM and Ford will have to merge to survive. This is an interesting idea, and makes a certain amount of sense, from the outside--the last stand of the All-American Manufacturing Giant. However, to pull it off, they would basically have to go bankrupt first. GMF would need to be lean and mean--the combination of GM and Ford's best products, not the combination of their legacy costs and union contracts.

I see another likely merger between Ford and a foreign competitor, such as Honda. Ford would be a good acquisition for a company that wanted to buy its way into the light truck and commercial vehicle market. Honda-Ford would have a lineup of world class compact cars, light trucks, and commercial vehicles. The problem is, how would Honda handle the UAW?

As a side dish, maybe Delphi and Visteon would merge too--Delpheon. Quick, somebody trademark that.

The Hygasm

There is a new blog in town, pumping out all hybrids all the time. A project of the far left Union of Concerned Scientists, a cabal of college professors with leftist tendencies, the HybridBlog's purpose is to advocate hybrids, and also apparently to attack auto manufacturers for not converting to their religion more quickly.

The greenies over at UCS suffer from the usual progressive disorder: they don't understand (don't respect) basic economics. The automakers need to make a profit, to invest in future products. GM can't drop everything and go pump out hybrids, they would go broke. There needs to be demand, and so far the public is not entirely sold. With good reason--hybrids don't pay for themselves based on fuel savings alone, unless there are large tax incentives.

Rather than hammer on the industry, and advocate more government regulation, what UCS should do is to spend their time and money convincing the car buying public to buy hybrids. Convince the middle class families in the suburbs that they ought to be paying $3000 more for their vehicles, because it will purportedly help stop global warming.

In honor of HybridBlog and UCS, I am now coining the term "hygasm" (TM). A hygasm is the wave of elation that passes over an environmentalist when he discusses how great hybrid vehicles are.

Friday, May 06, 2005

The Supplier Standoff

GM and Ford both buy many key parts from their former parts divisions, which they spun off as Delphi and Visteon.

Delphi and Visteon are in even worse financial condition than their parent companies. They also have their parents over a barrel: if Delphi and Visteon are unable to build certain parts, GM and Ford are unable to build cars.

GM and Ford may be forced to take back the money losing plants of the suppliers, to ensure the supplier's survival, to fulfill UAW contractual obligations, and to continue the flow of parts. Because these plants are unionized, they can not easily be closed, and the parts bought elsewhere.

At that point, the OEMs will have gotten back the chaff, and let the wheat go.

Thursday, May 05, 2005

The Story Behind the Photo [Politics]

Here is the story behind the photo of the U.S. soldier and little girl I posted a link to earlier. HT: LGF.

He Practiced What He Preached

He practiced what he preached, and it came back and bit him.

Automuse relates the story of a college senior, who editorialized against wearing seatbelts, and was killed when he was ejected from a rolling SUV.

His two friends, who were belted in, survived with minor injuries.

Wednesday, May 04, 2005

Explorer Nose Job

AutoBlog points out that the new front end design on the 2006 Ford Explorer is not terribly exciting. I find the bling annoying, it looks out of place. To me and many others, the design looks like it was cribbed from Audi. Couldn't J Mays and co. think of something more original?

2006 Explorer

2006 Audi A3

2006 VW Jetta

In the good news department, the Explorer gets the 4.6L-3V motor, common with the Mustang GT, with a large HP boost from 239 to 292. Torque goes from 282 to 300 ft-lbs. If they didn't add too much weight, that means that fuel economy should go up a little, which would be a welcome improvement on the Explorer.

Update: The new VW nose also has a family resemblance!

The "Insurgency"

Warning: disturbing photo ahead

This photo, of an American soldier cradling a bloody child after a suicide bomb attack in Iraq is probably the single most disturbing photograph I have seen coming out of Iraq.

The people who blow up civilians are not "insurgents", they are terrorists, plain and simple--although Michael Moore thinks they are patriotic minutemen, resisters of American imperialism. They deserve everything that was done in Abu Ghraib, and then some.

May the U.S. Army grind their bones into dust.

Tuesday, May 03, 2005

Hummer H3: DOA?

The Angry Engineer blogs about the disastrous GM Colorado light pickup truck. This will go down as one of the worst business decisions in the business: spend a billion dollars to develop a vehicle for a shrinking market segment (the compact pickup), and screw it up in the process.

Sorry to sound so negative on so many things (such as the Zephyr), but the Hummer H3 sounds like another disaster about to happen.

The Hummer H3 is going to be built on the Colorado platform, much the same way that the H2 is built on GM's large truck platform. So it is going to be a large, 2-ton brick, about the size of a Ford Explorer, with the less than exciting (ask Car and Driver) 220HP I-5 engine. An Explorer, BTW, can be had with a 4.6L V8; a Jeep Grand Cherokee can have a 4.7L V8. GM's answer: "It will have good fuel economy". Oh, and it will cost about $30,000.

People don't buy Hummers for fuel economy, they buy them to make a statement (of poor taste).


Flushing Out The Cell Phones

What is going on with people's manners?

Today at work, a guy got a call on his cell while he was sitting on a toilet in the men's room. I guess he couldn't stand the crescendoing strains of his grandfather clock ring tone, because he answered his call, and started talking. His conversation loudly echoed off the tiled walls.

I flushed.

I have a policy, whenever someone makes or takes a call in the restroom, I flush. Maybe twice. Perhaps, after an embarrassing episode, the guy will think about what he is doing more carefully. (I'm not the first one to think of this, of course, a blogger named Tiffany Brown posted long ago on this topic.)

Do people really need to answer the cell phone, and interrupt other people, the second the damn thing rings? Are there really that many things that can't wait a few minutes for a call back? I'm starting to think that Michael Medved is right, that most of us would be better off without a cell phone.

Social Security Exceptions

Another quick note on Social Security.

Did you know that millions of workers are exempt from Social Security? State and local government employees are not required to participate unless their employer chooses to. Many state employees have state-run pension plans.

Some of these states even invest their employees retirement funds in... the stock market!

So, where is the outcry? Why aren't state employees yelling about how their money has been diverted to a "risky scheme"? Why aren't they forcing all government units to buy into Social Security?

Volvo: Do The Right Thing

If you buy a Volvo, there are several traits that you expect from the car. You expect longevity, and you expect safety. Longevity is a tradition, more than a stated design goal of Volvo, but they do like to advertise about how some owners get 300,000+ miles out of their old Volvos. And Volvo definitely advertises its emphasis on safety.

Now, there is news that Volvo is having problems with its electronic throttle bodies in 1999-2001 models. Since the throttle is computer controlled, if the ETM fails, you are not going to drive any further, as there is no mechanical backup. Customers are stalling, and are having to replace the throttle bodies well before 100,000 miles. Gummed up throttle bodies also, according to CARB, are increasing hydrocarbon emissions.

There are reports of some dealers telling people they have to pay for the repair, and accusing customers of using "bad gas", which somehow gums up the throttle body. This is absolutely ridiculous. What is "bad gas" and where do you get it? Are thousands of Volvo owners driving to Mexico to buy unfiltered gas from some 50 gallon drums?

This is entirely the wrong reaction. Instead of fighting it, Volvo should cheerfully replace very bad ETM when the time comes, free of charge. They should issue a service bulletin, requiring dealers to clean and check the suspect ETMs whenever a car comes in for service. Otherwise, they have violated both their commitment to safety and to pollution control, more importantly, they have damaged their image.

Monday, May 02, 2005

Suze Orman: FUD* in Detroit

I heard Suze Orman, the well known motivational speaker and "personal finance expert", on Paul W. Smith's morning show (760AM WJR) this morning. Paul W. asked Orman what she thought of President Bush's proposal to create private investment accounts as part of his social security reform package. I was a little surprised at what I heard: (quotes are approximate, based on my memory)

Orman: "Why can't the government just take care of us, like it is supposed to?"

Paul W: "Suze! You sound like a socialist."

Orman: "Not a socialist, a realist. Look, we go around the country and ask people, "do you have a will? do you have an irrevocable trust?", and people don't even have those. And now we expect them to invest their social security money? These are the same people who mortgaged their houses to buy technology stocks in the 90's bubble... the stock market still hasn't recovered from that yet, and financial planners, they still don't know what to tell people to do."
This is surprising because of what Orman teaches in her PBS shows and books: that people have to take charge of their retirement. From the Oprah web site:

Maximize retirement accounts. We can't rely on Social Security to meet our
retirement needs
, so it's crucial to save as much as you can now. This pertains
to single, life partner and married retirees: Those who are single won't share
living expenses. If you're married and you're both planning on drawing Social
Security income, when your spouse dies, you'll go from two checks to one.
Maximize your contributions to 401(k) or 403(b) accounts, and if you qualify, take advantage of funding a Roth IRA.

So Orman says that we can't rely on social security, and that we have to plan for our own retirement... but we can't be trusted to make the decisions? Doesn't Orman make a handsome living teaching us ignorant Americans how to structure our finances? I would think that Orman should be heartily supportive of private retirement accounts, more people would buy her books.

Orman also implies that people would be able to invest their social security accounts foolishly, but that is not very likely to be allowed. Details are still scarce, but the likely scenario is a basket of low fee funds that offer asset allocation choices, which an investor can pick from based on their level of risk tolerance. People who are willing to risk more can pick the fund that is stock weighted, while people who are conservative can pick the fund that is invested mostly in government bonds.

What better way is there to educate people about money and investing than to offer them a chance to actually do it? If everyone had a retirement account, and had to make investment decisions, the level of involvement would invariably increase.

*Fear, Uncertainty, Doubt