UPDATED "Cash For Clunkers": Check If Your Car Qualifies

Updated: I re-did the table with the new data from Edmunds, after NHTSA updated some of their mileage numbers.

Use my handy applet below to look up your car to see if it might qualify for the CARS "cash for clunkers" voucher from the Uncle Sam. This is a list of cars from Edmunds that gets 18 MPG or less and has an expected fair market value of less than about $4,500. Edmunds was kind enough to post the raw data (here) and I massaged it a little and stuffed it into a Google Docs spreadsheet.

You may need to wait a little while for the data to load.

To use the applet, pick your car's age and make from the drop down list.

Update: Edmund's data only goes back to 1990, that's why that 1984 Saab isn't on there. Only cars younger than 25 years old are eligible, so the oldest model year that would qualify would be a 1984.

Ford and Hyundai Jump on CARS Program, Others Dawdle

Ford has really jumped on the "cash-for-clunkers" news. Before Obama's ink was dry, Ford put up a web site (the impossible to type www.letfordrecycleyourride.com) which lets you input you car to check if it is eligible. Then the page shows you a list of Ford vehicles which would qualify for the voucher. Ford puts a happy green spin on the whole thing by offering to "recycle" your old car, which is much nicer than "scrap". It's very slick.

It surprises me that none of the other major car makers did the same thing. I checked the home pages of Toyota, Honda, Nissan, Chrysler, GM, Kia, BMW, VW, Mercedes, and Subaru. None of them had any CARS information.

The only other major automaker which has a CARS information site is Hyundai, here. Hyundai's site is not as slick as Ford's but it does give a list of Hyundai vehicles which are eligible for the government voucher.

Tesla?!

Tesla?!

Why would the Department of Energy give half a billion dollars to Tesla?

I understand Ford. Ford has many projects, such as GTDI and electrification, that can be filed under CAFE compliance.

Nissan was moneyed to show that there is no favoritism to domestic brands, and to spread some joy down south, to soften the stance of the anti-union and anti-Detroit politicans.

But Tesla is puny, until recently a financial disaster. And what it is building now is a toy for the very rich. The Model S is projected to sell for a price around $57,000, which is certainly cheaper than the Tesla Roadster, but hardly affordable for the average person. Call it a toy for the slightly rich.

What Tesla has accomplished with the Roadster is impressive, but it is not revolutionary. Battery packaging, charging control, DC motors, these have been understood for a long time. What Tesla accomplished was to do a nice job integrating an electric powertrain into an already mature vehicle platform, the Lotus Elise. Chrysler can come along and replicate the achievement fairly quickly with their Dodge Circuit, using A123 battery systems. Magna can do the same with the hoary old NA Ford Focus.

With the Model S, Tesla is trying to step into the world of the big boys, developing a new mid-size vehicle platform. They will be responsible for tooling and assembly process, crash worthiness, NVH, durability, and the thousands of other requirements that go into building a car. It's a huge learning curve. The DOE would be better off giving the money to someone who already knows how to do it.

I suspect the real reason Tesla was given a loan was to throw some Obama love to California, with its rabidly green congress members.

I predict the taxpayers are going to get cleaned out on this particular deal.

The MKS Abomination

I saw this abomination near downtown Birmingham tonight. A new Lincoln MKS with a blue faux roof.

The Bentley At Einstein's

This morning I stopped in at Einstein's for a $1 refill (bring your own mug), and I noticed a Bentley Continental had parked nearby, with Ontario plates.  I guess I didn't realize that there would be Canadians rich enough to flaunt a Bentley, but there isn't any reason to think there aren't.  Inside, it was immediately obvious who the driver was.  A trim, tanned woman, wearing workout shorts and a hoodie stood in line in front of me. She had chunky gold jewelry on her fingers, and a large designer purse.  From her face, you might think she was about 30, but from the less smooth skin on her hands, it was clear she was closer to 40.  The tag on her jacket was poking straight up from the back of her neck.

"You're tag is showing.", I told her.  I admit, I got a little rise out of correcting someone who was so obviously concerned about appearances and social status. 

I don't hate the rich.  Some of the most charitable people I know are rich.  But if you tool around in a Bentley, and flaunt gold and fancy purses, in a place like Metro Detroit where thousands of people are losing their jobs, you can go to hell.  At least have the decency to drive your au pair's Malibu or something.

Autoweek Journalist Survives Bouncing Wheel Of Death In Fiesta

This is an interesting read: http://www.autoweek.com/article/20090610/CARNEWS/906109990

Natalie Neff was test driving a Ford Fiesta when a loose wheel from an old Olds nailed her.  She is impressed how well the car stood up to the pounding, and attributes it to the use of high-strength steel.

Tata Nano In The U.S.?

According to Automotive News, Tata says that it could bring the Nano to the U.S. as soon as 2011 or 2012. However, you can bet your bottom rupee that it won't cost $2000, won't weigh 1300lb, and probably won't get 61mpg.

Before Tata can sell the thing in the U.S., it must be fitted with "2.5mph" bumpers front and rear.
It will need ABS and stability control.
It will need front and side airbags.
It will need front, rear, and side impact crash structures so it will get a decent score on NHTSA's crash tests.
It will need properly formulated catalytic converters to meet tough emissions standards.
It will need an automatic transmission, since we Americans are forgetting how to shift our own gears.

When these and perhaps other features I have not thought about have been added, it will likely cost more than the $6000 or so that the Tata Europe is expected to cost.

Suppose it comes in at an industry leading price of $7,500. That's great for a new car, but in 2012 you could probably get a nice used compact or mid-sized car of the 2007-2009 vintage for that kind of money. Nothing exciting, but a solid reliable ride. With amenities such as power locks and windows, decent radios, an opening trunk, dual wipers, fold down seats, and so on.

Excerpts From GM Live Chat

Fritz Henderson did a live chat on GM's Fastlane Blog. Here are some interesting Q's and A's, excerpted form the whole chat. Red highlights are mine.

Fritz Henderson GM CEO, LIVE Webchat (06/04/2009)

15:07
[Comment From Bing ]
Mr. Henderson, If you were starting a "new" company, wouldn't you want it to be with folks that hadn't failed before?
15:09
Fritz Henderson: If I was starting a new company, which we are in fact, I would start with a blend of people that have been involved in winning businesses and outstanding people that learn from their failures. at least for me personally, I have been involved in both.

15:09
[Comment From Todd Lassa ]
How did a Chinese company with no prior history or experience in personal vehicle production snag the Hummer division? And can you comment on reports that the Opel-Magna deal isn't final?
15:11
Fritz Henderson: with regard to hummer, the potential buyer sichuan tenzhong offered the best overall alternative, and we did not have broad portfolio of other buyers!

15:11
[Comment From GMX206 ]
What do you think is the most important change that needs to be made in GM's corporate culture?
15:14
Fritz Henderson: we need to make some important changes in our culture. at least for me, we must drive home the following concepts and behaviours every day:
1. product and customers should dominate our activities and day to day lives.
2. speed. this is not sense of urgency, it is speed.
3. risk taking: we have great people. we need to allow them to take risks and coach them accordingly.
4. accountability: results count, period. consistent with a culture that encourages smart risk taking, with speed and delegation to act, we must all feel and live with a sense of accountability.

15:18
[Comment From Sumo ]
Mr. Henderson, the Asian carmakers have really taken away a lot of market share from the American carmakers? Will GM be able to challenge them in their home turfs?
15:19
Fritz Henderson: in china, we are rocking. in korea, we have gmdat with at or around 10% share, with good opportunities to grow. in japan, I have precisely ZERO interest.

15:20
[Comment From Michael Petrilla ]
What a great opportunity this is to speak directly with the CEO of a major corporation! I love the styling of the 2010 Buick LaCrosse and 2010 Cadillac SRX, both inside and outside. I was wondering if the Ecotec 4 cylinder/6 speed automatic combination will be made available at a future date for these two vehicles. The fuel mileage would be increased substantially and the performance would still be acceptable. I had a ride in a 2009 Saturn Vue (a dealer courtesy car) with the 4 cylinder/6 speed auto and it had plenty of power. Will the bankruptcy filing delay the introduction of these new vehicles? Also, I own a 2009 Saturn Sky Redline and naturally I am sad to see the Sky and Solstice discontinued. The demographics of Sky buyers seem to match those of the new LaCrosse and Solstice buyers seem to match up with Chevy buyers. A plan to make the Solstice a Chevy and the Sky a Buick made a lot of sense to a lot of people. And to build them at Bowling Green made sense as well. What was the deciding factor against the plan? Thank you.
15:22
Fritz Henderson: for lacrosse, subsequent to sop, we do have plans for a performance version of our 4cyl ecotec engine. srx will only have 6's, with great fuel economy and performance. on sky and solstice, we intend to complete production later this year and phase out as part of our brand actions on pontiac and saturn.

15:25
[Comment From Guest ]
Can you explain your rationale for keeping the GMC brand alive?
15:25
Fritz Henderson: profit. great and clear brand. passionate customers. profit can I be any clearer?

15:25
[Comment From Kathy Tomasik ]
I had a small amount of shares from the old GM. What has happened to them?
15:26
Fritz Henderson: unfortunately, the value of gm shares is expected to be zero.

15:29
[Comment From Jeff ]
I am what you might call a Volt skeptic. Can you say that they will find their hands into average people and not just limited to rich executives and celebrities (ala the Tesla roadster)?
15:31
Fritz Henderson: this will not be an inexpensive vehicle in its first generation, but it will be extremely affordable relative to a tesla. while we have not made final decisions on pricing, you should be thinking about $40k ish, with a $7500 available tax credit.

15:35
[Comment From John ]
Will the Corvette survive as athe V8 engined rear wheel drive icon we all love?
15:36
Fritz Henderson: yes. my wonderful baby is my 2005 corvette coupe. we have more in store for the future and this iconic brand will retain its powerful place within the new gm.

15:49
[Comment From One of the Faithful ]
GM has recently been behing the 8 ball on the release of its product. The Camaro was in concept form for 5 years before the vehicle actually hit the floor. The Mustang was on the ground WAY to long, and even though GM is selling every Camaro it can make right now the Mustang had to hurt Camaro sales. The same is with the HHR compared to the PT Cruiser. What are your plans to keep ahead of your competitors?
15:50
Fritz Henderson: with 34 nameplates to drive across 4 core brands, we have the right sized portfolio to maintain a fresh and exciting portfolio with the right launch cadence.

15:53
[Comment From Robert Tukes ]
Sent we all realize the camaro is a great hit. Will we make a electric Camaro ?
15:53
Fritz Henderson: not likely.

15:54
[Comment From Employee ]
Great news coverage on the G8 GXP today - any chance it will live on as a chevy or maybe an entry level caddy?
15:54
Fritz Henderson: no.

15:57
[Comment From Tony ]
What does it feel like being the CEO of a company with 60% government ownership? While the government won't be heavily involved, that must be an amazing responsibility to all Americans
15:59
Fritz Henderson: we do have this amazing responsibility and we all need to be immensely thankful for the support, which is not popular broadly. this means we have the responsibility to deliver.

by the way, a friend of mine sent me an email indicating that I am the ceo of a company that will have 300 million shareholders. actually, we will have 330 million shareholders, including the taxpayers of the US and Canada.

An Open Letter To GM

Dear GM,

Despite your decision that keeping Pontiac around is not a good business plan, I am asking you to consider saving some of Pontiac's product. Over the last few years, you started to build some Pontiacs that were actually exciting.

(Photos courtesy of Edmunds)

You should try to save the G8. This car is the best large sedan GM has sold in the U.S., outside of the Cadillacs, in a long time. Yes, it is expensive, and is being shipped from Australia. I think it would make an excellent top of the line Chevrolet--like an Impala with soul. It might make an interesting cop car, too, if you could work out the economics. Once people realized it was here to stay, sales would improve.


You should save the Solstice/Sky platform. This is a fun little car, and though it needs some qualty improvements and some refinement, it is one of the few cars you build that people actually fall in love with. I met a guy that got one from his wife as a 50th birthday present, and he acts like it is his mistress. Restyle this as a Buick, or perhaps as another Chevrolet, a "baby Corvette". The Solstice might also be an interesting platform for an all-electric sports car, something to compete with Tesla.


Finally, you should to do something with the Vibe. Not because it is that exciting of a product, but because it is a solid product with good quality numbers. Since Ford killed the 5-door Focus, this is one of the few domestic tall compact hatchbacks. It is much better than the Dodge Caliber. I'm not sure if the Vibe would make a good Chevrolet, as far as styling goes, but I do think it might make a decent Saturn. Maybe build the Vibe as a Saturn for Roger Penske, if you don't see it as a Chevrolet.

As for the G3, G5, G6, and Torrent, no tears shed here.

Sincerely,

--TAP

How do these two brands survive?

In May, Mitsubishi sold 4,352 vehicles. Dying Saturn sold twice as many cars, and dying Pontiac three times as many. And Mitusbishi's sales were down by 58% over last year.

Suzuki sold only 2,585 vehicles in May, down a whopping 75% over last year.

The entire Suzuki line-up was outsold by Mini, which has a few variations of a single model.

How is it that Mitsubishi and Suzuki will survive in the U.S. market? What does Mitsubishi sell that is exciting, other than the Lancer? Does Suzuki sell anything exciting? I suspect they will go the way of Isuzu, fading out of public memory.

Props To Fritz

You have to give credit to GM... they have the fortitude to post difficult, pointed questions on their Fastlane Blog. Sample:

“Mr. Henderson, I have been a loyal GM owner until June 1, 2009. I will no longer purchase a GM car because owners of the 566 million shares of GM stock and the holders of 27B of bonds have been completely written off by you, the CEO and the US Government - e.g. President Obama.

Why would ANYONE invest in the new company? You just zeroed out the existing investors.

Because of this, I will not buy a new Cadillac CTS this year, but I will buy either a Lincoln or luxury transplant car but here in the USA. -JE”

We recognize our actions have a significant impact on many constituents, including stockholders, bondholders, employees, dealers, retirees and others. Bondholders will receive ownership in the new GM. We are committed to turning around the company to the benefit of all stakeholders in General Motors, and we plan to do that as quickly as possible.

Taking it on the chin, in public, is not something big corporations usually do. But GM is showing that they are serious about patching things up with the customers, and the new majority owners, the U.S. taxpayer.

Vista Problem: Filling My Hard Drive

I ran into my first major headache with Windows Vista. After I added a second internal hard drive to my system, it quickly began to fill up, to the point where it is now 99% full. But I am only storing about 40% worth of stuff on it!

At first, i was worried I had a virus or something, but then I remembered about Vista's Shadow Copy feature, which copies old versions of files so that if you make a change and you want to undo it, you can restore a previous version.

I found this article which explains how to dig into the settings for Volume Shadow Copy. It turns out that somehow, Vista decided that the shadow copy settings for my D: should be UNBOUNDED, which means, copy until the drive is full!

I was able to use VSSADMIN to fix it, following the directions of the posting. I simplay ran this command as an administrator:

vssadmin Resize ShadowStorage /On=D: /For=D: /MaxSize=50GB

Note to Microsoft: Volume Shadow Copy should default to a safe value, and not to UNBOUNDED!

Video: Amazing Rally Race Crash

Somehow I missed this when it first came out. Ford rally racers Jan-Matti Latvala and Mikka Antilla went over a railing and rolled down a hill, over and over again. It is a testament to the engineering that goes into these cars that they were not seriously injured. The hard roll cage structure in the cabin of the car remained intact, while outer body panels deformed to absorbe energy.

GM Announces U.S. Small Car Plant

It looks like the UAW (and Obama) took GM out behind the shed for a little talk... GM is announcing that the will re-tool on of their U.S. plants (not "North America") to produce a small car (maybe the Spark).

Actually, it was not just coercion, but negotiation. According to news reports, the UAW gave GM further concessions, such as broader job classifications, to allow a small car plant to be profitable.

GM was looking at a public relations mess, with Ford previously announcing that the European Focus would be built in a re-fitted Michigan Truck plant, and the UAW howling that taxpayers should not fund more off-shoring of vehicles. By bringing a b-car line to the U.S., GM leapfrogs Ford, which is going to build its Fiesta in Mexico.

The whole thing makes me wonder, though. Was GM's plan to import Chinese cars a business plan, or was it a bargaining stick?

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

CAFE vs. EPA

Edmunds is making a big deal about the difference in EPA "window sticker" vs CAFE fuel economy standards. Read about it here. They're reminding us that the window sticker fuel economy is a (downward) adjusted number which takes into account more typical customer usage (like A/C). The CAFE city FE test (FTP75) is run on a chassis dynamometer, at 72F, with a cold engine, with A/C off, and various other standard conditions.

The "two standards" aren't really two standards, the legal standard is CAFE FE (unadjusted). The fuel economy labels for consumers are required by law, but cars are not regulated to that number.

Edmunds does provide a handy list of vehicles that might meet the 2016 standards today, and not surprisingly, they are all sub-compact and compact cars, and hybrids.

This is instructive. In 2016, affordable cars which meet the new CAFE standards will be compact cars. Anything larger will be much more expensive, as carmakers will have play tricks such as reduce weight (aluminum, carbon fiber), add hybrid drives, add gasoline engine technology (turbo direct injection), or perhaps clean diesel.

Today, the average car is a "midsize" vehicle, somewhere between a Toyota Camry and a Honda Civic. In 2016, I suspect the average car will be a compact, about the size of a Civic.

Clarkson's Fiesta Movement

Very entertaining segment from BBC's Top Gear, where Jeremy Clarkson reviews the European Ford Fiesta. He takes his Fiesta movement on a game of tag with a Chevrolet Corvette inside a shopping mall.

Chrysler Dealer Collateral Damage

These photo show the Celtic Pipes and Drums, marching in the Birmingham parade. They are a Scottish style band based in the Troy area.

They are sponsored by Birmingham Chrysler Jeep, which was told by Chrysler that its franchise was being terminated last Thursday. If BCJ goes out of business, the band loses its sponsor.

I Love A Parade

This morning I went down and saw the annual Celebrate Birmingham parade. This is an annual affair with a small-town feel, where two marching bands, the shriners, local politicians, and lots of interesting cars make a slow circuit around downtown Birmingham before retiring to the central park for a day of kiddie fun. Here is a selection of the more interesting vehicles from the parade.

A classic Ford

The Oakland Country DARE Truck (our tax dollars at work...)

Oakland County dive rescue

A cool antique fire engine

A Chrysler wagon


Eastern Bloc army truck?

Ford convertible

Another classif Ford

The Celtic Pipes and Drums


The Shriner's wheelie wagon, based on an old Ford truck I think

Shriners on little scooters

Now come the old-west Shriners


Not very P.C. but he was funny.

Another old car converted for clown duty


This tree service truck looks like a recycled old ladder fire truck.

The Falun Gong were out in force. No one felt threatened. The state was not destabilized.

Interesting taste in women.

Cool spring-stilt walkers


The tail end of the parade was a huge mass of bassett hounds.

Chrysler's Dealer Destruction Hits Home

One of the Chrysler dealers on the dealer closing list that Chrysler filed with the bankruptcy court today is Birmingham Chrysler Jeep, known for its odd jingle, "Birmingham's In Troy!". This dealership is not far from my house. It is a corner store in the sprawling Troy Motor Mall, a huge collection of different car dealerships.

Sunset In Troy

BCJ was, according to this news article, in the top 20 dealerships in the country. It has been owned by the Mealey family since 1966, and employs 90 people. BCJ is known in the area for its fun, corny advertising, such as this spot where the owner snow blows his lot and rides around on a lawn tractor.

I wasn't expecting Birmingham Chrysler Jeep to close. I thought Chrysler/Fiat would want a slot in the Troy Motor Mall, where they could compete directly against the other brands, just yards away. But the massive Golling dealership in nearby Bloomfield Hills, which was chosen to stay open, sells all three Chrysler brands from one huge lot.

I know people who work at this dealership. This morning, when they got the news that they were expected to close, 40 employees were laid off all at once. All around the country, the same scene was repeated today. All around the country, people are tasting the salty, metallic flavor of failure.

GM Plans To Import Chinese Cars

According to the Automotive News, which obtained a copy of a product plan document which GM submitted to Obama's auto task force, GM is planning to ramp up production of cars in China for importation to the U.S.  Starting with about 17,000 cars in 2011, the number would increase to about 51,000 by 2014.  

GM already imports Chinese made engines (the 3.4L pushrod iron block V6 in the Equinox/Torrent), and I won't buy one.

If GM imports Chinese cars, I won't even consider one of those, either.

The UAW and the Democrats are going to tear GM a new one for this.  If you are relying on a UAW-friendly Democrat-controlled congress to save you, maybe plans for Chinese importation aren't smart, when Ford is re-tooling Michigan Truck to use UAW labor to build small cars.  

More here.

Here Piggy

Heh.

(Encyclopedia Dramatica)

Bottomfishing The Best Of The Dying Brands

It isn't quite time for bottom fishing, but it is getting close. Depending on what your needs are, you should soon be able to pick up a decent car from a dying brand at a very good price.

If I was in the market, here are some cars I would consider:

GM:

• Pontiac Vibe -- Decent small hatch, though a rental fleet favorite. Nice, practical package. Weird rear window.
• Pontiac G8 -- Probably the best car Pontiac is selling now. I'm not a fan of the nostrils, but otherwise a very sharp car. Good engines.
• Pontiac G6 -- Decent midsize sedan/coupe. Also a rental fleet favorite.
• Pontiac G5 -- Great if you wanted a Cobalt to begin with, or a functional compact car.
• Pontiac Torrent -- Decent, practical small SUV, saddled with a crummy Chinese built engine.
• Saturn Aura -- Won the 2007 Car Of The Year award. The precurser to the new Malibu. Sharp looking.
• Saturn Astra -- Great small car, if a little underpowered. Tight European style and handling.
• Saturn Vue -- Decent small SUV, if a bit heavy.

Chrysler:

• Chrysler 300C -- Long in the tooth but still a nice design. If you don't mind gun-slit windows and so-so fuel economy, this is a nice rear wheel drive choice.
• Chrysler Town & Country -- Competent. If you need a minivan, you may be willing to trade Honda dynamics and residual values for the discount on one of these.
• Dodge Ram -- Newly refreshed, the Ram is hlghly rated and is winning comparisons against other full sized pickups in the press.
• Dodge Journey -- New crossover SUV from Dodge. Looks like a decent package, reviews are mixed.
• Dodge Challenger -- Chrysler's Mustang fighter.
• Dodge Charger -- Sportier, meaner version of the 300c. Rear wheel drive, aggressive styling.

In my opinion, these vehicles are good enough that someone could buy one without massive compromises, and reap the benefits of the desperate pricing environment. I think it is unlikely that you would be stuck with an unfixable car if something did break, even if GM and Chrysler are broken up in bankrupcy court. Even if the companies collapse, the market for replacement parts and service will ensure that someone will be able to repair them. With the government warranty backing there isn't much warranty cost risk, either.

DOE Cutting Hydrodgen Car Funding

Obama's Department Of Energy Secretray Stephen Chu announced that the DOE is cutting funds for research into hydrogen powered cars.  From the budget rollout presentatio (here)

FY 2010 budget cuts less effective programs so we can invest in our economic future.  For example:

Cutting funding for deep-water and unconventional oil and gas research that industry can and does fund on its own. 

Moving away from funding vehicular hydrogen fuel cells to technologies with more immediate promise

I think, on this one, Chu (and Obama) are correct.  H2 is very far away from being practical, mostly because of the massive task that a hydrogen fuelling infrastructure would be.  There would be much greater short term benefits from research into better batteries.

Republicans and Hybrids

Over at the WSJ, the question is asked, "Where are the Republican hybrid buyers?".

The answer, is that most people (not just Republicans) won't buy a hybrid until the economics work out, and until the cars available will be a minimal sacrifice in handling, room, and performance.

For example, the closest to a no-compromises mid-size hybrid that I have seen to date from a Detroit automaker is a Ford Fusion hybrid. But it costs around $30,000! An I4 Fusion can be bought for much closer to $20,000.

The author makes the argument that some conservatives will be attracted to the national security aspects of hybrids. I agree with this personally, and if hybrids become affordable, I would consider one even at a modest premium to a gasoline vehicle.

Without a clear cost advantage, hybrid sales have to rely primarily on the segment willing to pay more for green -- a segment that has been hard-hit by the financial crisis yet still seems to be growing. But if we really want to expand the number of buyers, we should develop new arguments that appeal to the Republicans who have been holding back. To look at it another way, every hybrid car reduces not just greenhouse gases but reduces our dependence on foreign oil -- especially the new plug-in hybrids under development. And that means that buying a hybrid is not just good for the environment, but good for our energy independence and national security.

Obama is doing his part to promote hybrids in many ways. One way that isn't as frequently mentioned is that his administration is not as friendly to oil drilling as Bush's was. Obama's policy will restrict the supply of new oil, which will drive the price up (and, of course profits to OPEC). This will cause people to consider hybrids, as gas goes back to $3/gal over the long term.

Even Republicans understand $3 gas.

GM Mega-Dilution

GM has filed a paper (here) with the SEC, "PRE 14C" which lays out a plan to dilute its common stock, by issuing new shares to the U.S. Treasury in exchange for debt.

GM will issue enough new shares so that the total number outstanding will be 62 billion.  There are currently about 610 million shares outstanding.  This is a dilution of 100:1.  This will reduce the "par value" of $1.66 to $0.01/share.  They will then do a reverse split of 1:100, reducing the outstanding shares back to 620 million.  

The effect of this is that current common stock holders will be wiped out.  

Example: you own 1000 shares which are currently worth around $1600.  Your 1000 shares will become 10 shares, worth about $16. total. That's a loss of 99%.

Cash For Clunkers Compromise

The House Energy Committee has released a compromise "Cash For Clunkers" plan, which is quite different than the two previous competing bills.

You can read the whole thing here.

One big change is that the plan is only good for one year, not the 3 years of HR1550.

The quick summary:

Passenger cars
$3,500 for a new vehicle of at least 22mpg, if old one was at most 18mpg; 4mpg improvement
$4,500 for a new vehicle of at least a 10mpg improvement

Light Trucks & SUVs
$3,500 for a new vehicle of at least 18mpg, if 2mpg improvement
$4,500 for a new vehicle of at least a 5 mpg improvement

Large Light Duty Truck (6,000-8,500 lbs)
$3,500 for a new vehicle of at least 15mpg, if 1mpg improvement
$4,500 for a new vehicle of at least 2mpg improvement

Work Truck (8,500-10,000lbs)
$3,500 for any new vehicle if old vehicles pre-2002

The one page summary did not mention scrappage details, so I assume the rules will be simlar to HR520 and 1550.

There is no domestic or NAFTA favoritism here--any vehicle make qualifies. The mileage requirements are modest. It will be easy for people to use the credit, which is good. But the duration is short, so many people won't be ready to take advantage of the credit.

I think this will be a good shot in the arm to the automotive industry, with modest fuel economy benefits.

John Kerry Introduces Quiet Car Ban

John Kerry and Arlen Spector have introduced Senate bill S.841, the "Pedestrian Safety Enhancement Act of 2009". This legislation, if signed into law, would require the U.S. Department of Transportation to take up to 90 days to study the dangers that near-silent cars pose to blind pedestrians. Then, 90 days later, the DOT would be required to issue regulations:

(b) Requirements- The standard required under this section shall provide that every motor vehicle be equipped with a method--

(1) to provide blind and other pedestrians with a non-visual alert regarding the location, motion, speed, and direction of travel of a motor vehicle that provides substantially the same protection of such pedestrians as that provided by a motor vehicle with an internal combustion engine; and

(2) that will permit a blind or other pedestrian to determine the location, motion, speed, and direction of travel of a motor vehicle with substantially the same degree of certainty as such pedestrians are able to determine the location, motion, speed, and direction of travel of a motor vehicle with an internal combustion engine.

You can read the whole thing here.

So here's an idea: let's add external speakers to our future electric cars which make them all sound like this:

Lutz Smacks Letterman

In a blog post titled "Stupid Human Tricks", Bob Lutz smacks down David Letterman for being uninformed about the Chevrolet Volt, when hosting Tesla's CEO. Along they way, Lutz sideswiped Drew Barrymore, made fun of Letterman's "pallatial estate", and claimed to have a pet swan that can do tricks. Read the whole thing here.

Now, if he is that uninformed, I must point out that it’s not his fault, it’s ours. We should do a better job of making sure that Dave and everyone else who is in position to comment on national TV about our products has the right information, whether they use that information or not. Perhaps if we’d hired Drew Barrymore to be the spokesperson for the vehicle we’d have commanded more of his attention. Regardless, we’d like to rectify the situation.

I would like to personally invite Dave to come learn more about the Volt, including the hugely important but unmentioned-by-him fact that its range is 40 purely electric miles plus several hundred more miles thanks to its range-extender. Dave may drive more than 40 miles a day on his commute from the palatial Connecticut estate, but about 80 percent of Americans don’t. And those people could conceivably drive the Volt every day and never use a drop of gasoline.

The Chrysler Filing

You can read the actual text of Chrysler's bankruptcy filing on the WSJ web site, here. There's also a long (117p) affidavit here. It's fascinating, in a macabre look-a-dead-body sort of way.

One interesting part is how much Chrysler owes the top unsecured (no collateral) creditors:

#1 Ohio Module Manufacturing Co.: $70.3 million (chassis assembly)
#2 BBDO: $58 million (marketing)
#3 Johnson Controls: $50.3 million (parts)
#4 Continental Automotive: $47 million (parts)
also #29 Continental-Teves: $7.4 million,
Continental Automotive Guadalajara: $5.5 million
#5 Cummins: $44 million (engines)
#6 Germersheim Spare Parts: $36 million (Daimler spare parts?)
#7 Comau: $32 million (robots and automation)
#8 Visteon: $25.6 million (parts)
#9 New Process Gear: $20 million (transfer cases)
#10 Denso: $18.7 million (parts)
#11 Yazaki: $18.3 million (parts)
#13 U.S. Steel: $16 million (steel)
#18 Tata America: $11.3 million (IT outsourcing)
#24 Magna Powertrain: $8 million (parts)
#26 Shell Oil: $7.8 million (petrochemicals)
#41 Wackenhut: $7 million (security)
#40 Borg Warner: $5.5 million (parts)
#47 Robert Bosch: $5.1 million (parts)
#50 TRW Chassis: $5 million (parts)

There are a few companies on here which are a little surprising. You expect parts suppliers and steel companies, but a German spare parts distributor? Wackenhut? Tata?

Top secured creditors:

U.S. Treasure: $4.5 billion
JP Morgan: $1.6 billion
Chase: $1 billion
Morgan Stanley: $980 million
Citibank: $919 million

Chryslers assets: $39.3 billion

Current assets: $11.1 billion (only $1.9 billion in cash)
Property and equipment: $21 billion
Other: $7.2 billion (including $3.5 billion in "intangible")

Liabilities: $55 billion ($30.6 billion current liabilities, $24.5 long term)

Operating loss, previous 12 months: $17 billion (!).

Fiat ecoDrive

Fiat has an interesting gadget called ecoDrive. This is a free software program which analyzes your driving habits and makes suggestions how you can change them to save more fuel. What is cool is how it does it--the car will write vehicle data (likely signals: throttle position, engine speed, vehicle speed) as you drive to a USB stick you plug into the car's USB port. The PC program will then analyze this data.

More here.

Waiting For The Aftershocks...

Now, we wait to see what happens to the supplier base. With GM and Chrysler both shutting down for at least two months, if not longer, analysts are predicting wholesale carnage in the auto supplier business. From CNN Money:

"The aftershocks are going to be huge. We just haven't seen it yet," said Laurie Harbour-Felax, president of the Harbour-Felax Group, an auto research firm. She said she expects a couple of major suppliers with annual sales of over $1 billion to file for bankruptcy within the next week.

There is high risk of collateral damage to the automakers which are still building cars in this country, such as Honda, Toyota, and Ford. These companies may have to prop up failing suppliers with many millions of dollars of extra support to keep parts coming, which will weaken these companies even further. Ford is particularly vulnerable, because it is running on a cushion of borrowed cash, and has no easy way to borrow more, short of going to Obama.

GMAC and Chrysler-Fiat Mashup

One of the more interesting details about today's announcement by Obama about Chrysler's chapter 11 filing was the deal with GMAC to be Chrysler-Fiat's primary lender. Said Obama:

The path we're taking also involves steps to shore up
financing, because we cannot have viable car companies
without strong car financing companies. It's now clear
that Chrysler Financial -- the institution that finances
Chrysler cars and dealers -- would on its own require an
unacceptably large stream of taxpayer money to remain
viable -- and that's something I refuse to provide. And
that is why, as part of this agreement, GMAC, an
independent bank holding company that finances General
Motors, has agreed to finance new Chrysler sales. We will
be providing additional capital to GMAC to help unlock our
frozen credit markets and free up lending so that consumers
can get auto loans and dealers can finance their
inventories;

I wonder if this was in a way punishment to Chrysler Finance for refusing the $750 million TARP infusion because the execs didn't want to abide by the compensation rules? By refusing to prop up Chrysler Finance, Obama is really sticking it to Cerberus. As part of the requirement for GMAC becoming a bank, Cerberus must sell off most of its stake.

Using GMAC helps GM because GM still owns a large minority stake GMAC. And because GMAC is a bank holding company, it is easier for the government to support through the TARP.

It also may be a hint of Obama's future intentions. If Chrysler-Fiat fails, the groundwork for GM absorbing Chrysler may be laid here.

Reminder: Get Out Of Demand Notes

Update: I have attracted some hostile comments. To clarify my position:

No one who has a low tolerance for risk should be in GMAC Demand Notes. If you are using them for long term savings, get out. If you understand that you are chasing returns, and that this is similar to "junk bonds", and you have a diversified portfolio, have at it.

---

A friend of mine has some of his money in GMAC Demand Notes. I recently reminded him that this is crazy--they are basically unsecured loans to GMAC.

That's why they pay 4%, compared with FDIC insured rates of 2.25% at GMAC Bank.

With GM looking at a possible bankrupcy, and GMAC shaky due to mortgage exposure, no one should be in GMAC Demand Notes. The 1.75% extra yield is not worth the risk. If you have money that you don't mind investing in "junk" debt, buy a diversified junk bond fund or ETF,which gives you some protection against a single company default.

The same goes for Ford's Interest Advantage.

Comparing The Cash For Clunkers Bills

There are two competing "cash for clunkers" bills in the House.  One is more left-leaning, HR520, and the other is more populist, HR1550.  Both bills aim to do the same thing: encourage people to scrap older cars to buy new ones.  But they are very different in how they do so. 

In fine high school government class style, I will now contrast the two bills.

Key Differences:

Definition of a "high polluting" or "high consumption" automobile.

HR520: Average (city+highway weighted average) fuel economy of <18mpg.

HR1550: A car built before 2001.

Definition of a "fuel efficient automobile"

HR520: 2003MY or later, <$45,000 price, Tier II Bin 1-5 EPA emissions, 

25% better fuel economy than current or future CAFE standards.

HR1550: 2009-2011MY, <$35,000 price, Tier II Bin 5 emissions.

Voucher Amount:

HR520: New car voucher: $4,500 for 7 year old or newer car, 

$3,000 for 8-10 year old car, $2,500 for 11+ year old car. 

Used car voucher: $3,000, $2,000, $1500.

HR1550: $4,000 for US assembled 27 hwy MPG+, North America 30 hwy MPG+, 

or US light truck 24 hwy MPG+; $5,000 for US assembled 30 hwy MPG+, 

or US assembled work truck (registered commercial); 

$3000 for a NA assembled light truck with 24 hwy MPG+

Both bills require the old vehicle to be destroyed.  Parts other than "engine block and drivetrain" can be recycled, but the titled body, engine block and transmission must be destroyed.

HR520 is obviously geared towards fuel economy.  It doesn't care what kind of car you buy, as long as it is 25% better than the current requirements--which will greatly limit what kind of vehicles would qualify.  It also won't help you unless you are driving something which is relatively thirsty.  A typical case might be a trade-in of an old SUV or pickup truck.  

For example, the current standard is 27.5MPG (combined) for cars and 23.1MPG for trucks, so to qualify for the HR520 voucher now you would have to buy a passenger car that gets at least 34.4MPG or a light truck that gets at least 28.9MPG (combined).  The list of vehicles that would currently qualify is short: small and mid-sized hybrids such as Prius and Fusion, Smart, VW TDI, Toyota Yaris, Mini, Ford Escape Hybrid.  HR520 may give more benefit as time goes on, because more fuel efficient cars will appear, ahead of the tougher CAFE standards.

I think HR520 would have an unintended side effect of boosting the residual values of used large engined vehicles.  Cars that would have been worth $700 (like this one) would be worth much more, because they could be bought and titled just to qualify for the voucher.

 

HR1550 is designed to be more of a short term shot in the arm to the auto industry.  It very broadly defines what a "polluting" and "clean" vehicle is, because it isn't really about being green. It is only in force for several years, and heavily favors U.S. assembled or NAFTA vehicles.  This favoritism could cause trouble at the WTO, although it does include transplants such as Honda who have plants in the U.S.  

I prefer HR1550, because it would be better for the Detroit 3 in the short term.

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..."

Cutting Back

I am, thank God, employed.  

However, I don't have high confidence that I will be employed at the end of the calendar year. Considering the way the economy is going, I guess I have about a 50% chance, assuming that there is no rebound in car sales.  

So, my family has been cutting back to save some more cash for our rainy day fund.

Here are a few examples of ways that I have been saving money:

• We don't have cable or satellite TV anymore, we are using one of those digital TV converter boxes on our 10 year old analog TV to watch free over-the-air TV.  With rabbit ears.  It works, and besides, TV is over-rated.  Everyone could benefit from more reading time.
• I don't subscribe to the local paper, instead I read it for free online (sorry Detroit News and Free Press).  I get a few other magazines such as Consumer Reports for free as hand-me-downs from other family members.  There's some thrifty advice you'll never read in CR: hobo your Consumer Reports!
  
• My family has nearly stopped eating out.  Except for the occasional lunch with my co-workers, or a night where we don't have the will to cook anything.
• I have gotten used to driving no more than a couple of miles over the speed limit.  My mid-sized sedan with its <2.5l>
• I am stretching my oil changes out to 6,000 miles (manufacturer suggests 3,000 miles on my wife's car and 5,000 on mine).
• I have cut back on beer and wine consumption.  I used to take a bottle of beer or a glass of wine every day, now I find myself stretching it out by drinking on weekends.  I do have a weakness for scotch, though...
• I have cut back on how much meat I eat.  I think I eat red meat less than once a week now, and chicken or fish no more than a couple of times a week.  I admit this is also to improve my overall health, but you can save quite a bit of money this way.
• I have cut back on buying gadgets, except for ones that have an actual useful purpose.  For example, my old Dell laptop (Windows XP, P4) works fine, no need for one of the new ones--I just replace broken parts, which are cheap and plentiful, when something breaks.  I did buy a new digital camera, but I sold the old one on eBay so it was not a big investment.
• My wife and I don't give each other expensive gifts for birthdays and holidays, just small items to express the thought.  

If you think about your spending habits more carefully, you might be amazed at how many places you are spending that you could trim back, with a little bit of adjustment.

Of course, I'm one of thousands doing the same thing.  As a result, the economic death spiral accelerates.  Restaurants are closing, food producers are hurting, newspapers are going out of business, magazines are getting skinnier (even Consumer Reports).  

Jerusalem Pizza #1

Jerusalem Pizza, a famous local kosher pizza joint, is doing a very cool thing. They are auctioning off the rights to pie #1, post-Passover, with all proceeds going to a local food bank. As of this writing, the pizza is worth $200, but I would expect it to go a bit higher by close on Tuesday. Auction link.

The Galileoscope

A team of astronomers went to work to come up with a low cost telescope kit, that kids could put together to learn about how telescopes work, and then use to observe the night sky. The result is the very cool looking Galileoscope, which costs only $15 individually, and reportedly has pretty good optics. For example, they used lens designs which reduce chromatic aberration, something that Galileo did not have in his day.

There is a short video about it here:


Here is another

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.

SF Mayor: Closet Engineer

San Francisco's mayor Gavin Newsom is, apparently, a secret engineer. He thinks designing cars that get big fuel efficiency numbers at an affordable price is easy. From the Detroit News:

"With respect to Detroit, it is not good enough to advance by 2012 an ambitious strategy of having 14 different models at GM of hybrids -- when hybrids are yesterday's technology," Newsom said at a conference here sponsored by Newsweek on the future of the auto industry.

He said automakers must move more quickly to plug-in hybrids, noting hybrids like the Toyota Prius have been on the market since 1997.

"We need a very dramatic shift in mentality of Detroit," Newsom said.

Hybrids are "yesterday's technology"?!?

They still aren't entirely affordable, and not every model can make a profit at market prices. The batteries are still very expensive, as well as the power electronics and drivetrain. Hybrids still haven't caught on in volume, with one model (Prius) breaking the 100,000 unit/year sales rate.

If the California legislature had any cojones, they would tax vehicles with poor fuel economy, or institute a high fuel tax. But they won't because then the voters would throw them out of work.

So instead, they shout at Detroit, "Build us a unicorn!", as if Detroit has unicorns stashed away in the basement of ever R&D lab, under digital lock and armed guard.

Things just aren't that simple.

Medtipster: Finding Cheap Drugs

A guy I know (a friend of a friend kind of thing) works for a company that has recently launched a prescription drug search engine. Called Medtipster, the service lets you search for drug prices in your geographical area.

For example, if you need some antibiotic for your strep throat, you can type in your prescribed medicine, the dose, and your ZIP code, and Medtipster will show you a list of pharmacies in your area, with prices.

This is a brilliant idea, because it allows for pharmacies to compete with one another directly on price.