Autopocalypse Update: Automakers make their video case

If one thing the recent Autopocalypse has proven, opinions are like noses, everybody has one.

So in the ongoing debate of whether the Detroit Three should or should not get tax payer money, both Chrysler and GM have each taken the Spielberg approach, producing a pair of in-house productions to state their side of the story.

Obviously, both paint a grim picture based on the projected number of loss jobs. But do you think this will be the new the reality for the Detroit Three? Or is this just more propaganda from poorly run companies looking for free money?

[Source: YouTube, General Motors]

Autopocalypse Update: Coast-to-coast, it's going to be an interesting week

Well, well. Won’t this be an interesting week of industry watching.

On one hand, there’s the “show must go on aspect” of this year’s Los Angeles auto orgy on the west coast. As Ford is scheduled to unveil its updated Mustang pony car and Fusion Hybrid and Nissan set to debut its new 370Z sports car and subcompact Cube box-on-wheels, we can still see the industry at a crossroads, offering both mean and green products.

Press days start Wednesday. The Crank will be there blogging, if only to let you know if any other automakers have bailed or scheduled debuts canned at the last minute.

Then there’s the ongoing high drama continuing this week back east in Washington, D.C.

If you haven’t heard, the Detroit Three seem to be at the end of their financial ropes. The automakers’ respective CEOs return to the U.S. capital this week to testify why they cannot wait for the $25 billion in emergency aid until President-elect Barack Obama takes office in January. The looming question is: Will the U.S. Congress decide if General Motors, Ford and Chrysler will get the tax payer funds required to stay in business for at least another 12 months?

Apparently within the U.S. Congress, there’s little or no Republican Party support for the proposed loans. While Obama echoed Democratic party leaders in Congress on CBS's 60 Minutes last night by saying the U.S. government must help the Detroit Three get through their cash crisis.

Depending on what side of the “Save Them!/Let ‘em Die!” argument you stand on, or what media you read, at risk is only the entire North American auto industry, including millions of livelihoods on both sides of our shared border.

Keep in mind, if as reported, GM really is burning through $2 billion a month, another week of indecision will see another $500,000 lost on its ledgers.

Last call for ecoAuto rebates

What I called back in March as one of the finest examples of last-minute cocktail-napkin legislation we Canadians are ever likely to see, comes to an end in less than two months.

If you don’t remember, the federal government’s lame duck ecoAuto program provides $1,000 to $2,000 in rebates for new cars purchased with a combined fuel consumption of 6.5 L/100 km or less; new sport-utility vehicles and other light duty vehicles with a combined fuel consumption of 8.3 L/100 km or less; and new flexible-fuel vehicles with a combined E85 fuel consumption rating of 13.0 L/100 km or less.

As a stimulus for fuel efficient car sales, the program was a boon. Small cars have been in short supply on Canadian dealer lots all year long. And now ironically, just as some in the industry are calling for tax incentives to stimulate a sinking new car market, the so-called “freebates” come to an end December 31.

(I still believe a healthy gas tax, where the extra revenue is ploughed directly back into healthcare, education and our transportation infrastructure, is a fairer and more sustainable solution instead of rewarding particular makes and models, but that's for another day...)

The other ecoAuto caveat is that the free fed money only applies to 2008 model year cars. So even if you sign on the dotted line before January 1, if it’s a 2009 model, you’re out of luck.

Some 2008 ecoAuto eligible models, like the Honda Fit or anything with a hybrid badge, are likely to be long gone from dealers’ lots. However, if you can find any, a full list of 2008 models is available here.

So while the Canadian government is debating whether or not to follow the U.S. governments initiative to offer the Detroit Three bailout money, the feds aren’t willing to part with its newfound tax revenues from the “green levy” on gas guzzlers. They’ll definitely carry on after New year’s Eve.

How would you best describe the Canadian government's track record on dealing with the auto industry?

A) Ironic.

B) Hypocritical.

C) Just plain ignorant.

D) All of the above.

Autopocalypse Update: Car shows take big hit

Amid the current maelstrom of plunging sales and hat-in-hand government bailout requests, automakers are looking under every nook and cranny to save a buck. And the next line item on the expenditure spread sheet to take a hit seems to be car shows.

General Motors had already scrapped plans to debut its Buick LaCrosse/Allure and the Cadillac CTS Coupe at next week's Los Angeles Auto Show. Then yesterday, it announced it was canceling its only news conference planned for the event altogether.

GM spokesman Scott Fosgard told the Detroit News that with all the bad financial news and discussions about a bailout, any product news would simply get lost in the shuffle. Instead, GM will still show the Saab 9-X Air concept from the Paris Motor Show along with the production version of the Chevy Volt.

But GM isn’t the only company rethinking its approach to these glitzy auto orgies.

The Los Angeles Times ran a story this week updating the status of the next two big American auto shows—L.A. next week, followed by Detroit in January. Here are some interesting tidbits it found:

• Volkswagen also canceled its L.A. show news conference. The German automaker had planned to debut a roadster concept, but has moved it to Detroit;

• Chrysler said it would make local dealers pay for the company's L.A. show stand and would reveal no new products;

• Suzuki said spending money on the Detroit show no longer makes sense. Suzuki's U.S. sales are down 12 per cent so far this year, and with no new models or concept cars to introduce, the company decided to give up on the Detroit shindig;

• Other no shows for Detroit (so far) are Ferrari, Land Rover, and Rolls-Royce, which is owned by BMW. (BMW will be in Detroit, however.) And don't forget, Porsche bailed on the Motor City extravaganza last year.

And this is probably just the tip of the iceberg. But this trend does beg a couple of questions.

How important is it to you, the car buyer, that automakers are at these shows?

Do you find it an important medium to get info?

Or are car shows going the way of broadcast TV and hand written letters?

[Source: Detroit News, Los Angeles Times]

Baseball, hotdogs, apple pie, and bankruptcy

Like violence in the N.H.L., you know things are bad when you start reading about cars in the mainstream media.

Among them, this past Saturday Star business section's front page had reports from Tony Van Alphen (writing about General Motors reporting another huge quarterly loss, including 500 extra layoffs in Oshawa) and David Olive (suggesting letting the Detroit Three reorganize under bankruptcy protection;  something all three have vehemently been denying as a possibility up until UAW-friendly President Elect Obama went to Washington last week.)

Despite the reams of opinion and analysis, no one really knows how this ongoing drama will end up. There's simply too many stakeholders in the mix—autoworkers, shareholdres, executives, politicians—with different constituancies and agendas to attend to. And for once, the automakers have little or no control over their own destiny.

Will the new Super President save the Detroit Three along with millions of jobs in the process?

Will they end up as the Beijing instead of Detroit Three?

Or will GM, Ford and Chrysler quietly follow the bevy of U.S. airlines into oblivion?

Whatever the next few weeks or months deliver (by the way, won't the two upcoming U.S. auto shows—LA in a couple of weeks and Detroit in January—be infinitely more interesting this year for industry watchers, good or bad?) let me make one thing clear: all three Detroit automakers are not in this mess because of any recent events or outside forces.

No doubt. The collapse of the U.S. new housing construction market, rising fuel prices, public awareness of the environment or this October’s continuing global financial crisis are healthy contributors to new car buyers abandoning the Detroit Three en masse.

Nope. This mess has been in the works for over 45 years. I peg the 1973 Oil Crisis as the apex in the ascent of import brands (regardless of where the cars are made) and the descent of the domestic brands (regardless of where the cars are made).

Since then, really, it's only been a matter of time.

Anyone care to argue with that?

Update: GM & Chrylser: Fugeddaboutit!

While The Crank takes a day off, the AnswerMan steps in to field your questions about the on-again/off again General Motors-Chrysler buyout/merger/collapse deal that’s been making headlines the past few weeks :

Question: If both automakers are rapidly losing market share in the U.S. (in October, GM’s sales were down 45 per cent; Chrysler's 35) why would GM even want to buy Chrysler?

AnswerMan: Cash, baby, cash.

Despite being proactive on reducing the company’s production to better match its dwindling market, GM is apparently burning through about $1 billion dollars a month, and recently had to delay some new product launches and put a freeze on new product development.

Cerberus-owned Chrysler allegedly has about $11 billion in the bank that the General could use to get its hands on to help get it through the current car sales downturn.

If GM buys Chrysler, does that mean I’ll be able to buy a Dodge Caliber at my local Chevy dealer?

Don’t get your hopes up.

One of the problems for both of these automakers is too many brands with too many models and not enough customers.

In the name of cost cutting, expect Jeep to be merged with Hummer (if GM can’t find a buyer for its quasi-militaryesque-off-roading brand), and the Windsor-made minivans to survive. Er, that’s about it…

Will the deal get done?

Maybe. But here’s the kicker: To get at Chrysler’s $11 billion kitty, GM needs to come up with $10 billion it doesn’t have.

Last week the U.S. President Bush administration denied a request from GM for a bailout of the same amount.

But this week, after winning the presidential election, President-elect Obama will be meeting with the  CEOs of the Detroit 3 who will be making a “personal appeal” for some of the $25 billion in low-interest loan money that Congress and the White House approved in September for U.S. automakers and suppliers.

What happens if the government doesn’t cough up?

Who knows?

On Friday, GM and Ford will announce third-quarter financial results. My guess: it ain’t gonna be pretty.

And although no one at GM or Chrysler want to say the B-word, bankruptcy is now being mentioned, if only to create a sense of urgency with U.S. politicians.

According to one industry analyst, if GM, Chrysler and Ford disappear, the U.S. economy would lose three million jobs in the first year alone.

Canada exports about 80 to 85 per cent of its vehicles and about 70 to 75 per cent of its components production to the US. Will this doomsday scenario in the U.S. have negative impact on Canadian factories?

In a newsletter sent out this week, Canadian auto industry analyst, Denis DesRosiers, said he was actually surprised that Canada hasn't been hit harder by the U.S. crisis.

“Canada's share of North American vehicle production is holding steady at just under 17 per cent, so our employment losses have been more because of cyclical issues than structural issues,” wrote DesRosiers.

“[However] no matter how you cut it, when Americans buy 7 million fewer units, there is going to be a lot of blood on the floor.”

Scoreboard: Whew! October wasn't so scary afterall

Despite what some are calling the worst month south of the border since the 1940s (The General was down 45 per cent), Canadian new car sales in October were the best since 2002 when sales were over 130,000 units.

Go figure.

Overall, according to DesRosiers Associates, passenger cars were up 2.4 per cent, tracking up 6.5 per cent for the year to date. And amazingly, all the Bay Street fave Euro brands are doing just fine, thank you very much.

Here's the scoreboard for October's Canadian Winners and Losers followed by pithy comments:           

Automaker    2008/2007/'08 to '07 change

Acura    1,163/1,728/-7.3% - Knights of the Round table grilles aren't helping enough.
Audi    1.075/641/67.7% - New bread-and-butter A4 gets all the credit here.
BMW    2,1902/1,783/22.8% - Don't those stock brokers know we're in a recession?
Chrysler    15,643/15,411/1.5%  - Hanging in there despite news of imminent sell off.
Ford    15,123/16,863/-10.3% - Truck sales down 10.8 per cent; car sales down 8.6 per cent. No, really.
General Motors    28,115/29,884/-5.9% - Looks good compared to The General's U.S. black hole.
Honda 10,293/10,123/1.7% - New Fit just hitting dealers this month
Hyundai    5,885/5,803/1.4% - You can still buy a $9,995 Accent if you have the dough.
Infiniti    770/480/60.4% - As expected, sales were led by the G .
Jaguar    55/40/37.5% - The jag selling these days is the new XF.
Kia    2,925/2,919/0.2% - Kia dealers could use some Soul.
Land Rover    217/199/9.0% -  Lazarus-like jump.
Lexus    1,304/1,126/15.8% - Up 33.5 per cent, RX350 still leading the way.
Mazda    6,109/6,040/1.1% - New Mazda6 finally in stock.
Mercedes-Benz    1,720/1,491/15.4% - Ho hum. Another month, another sales record...
MINI    481/315/52.7% - Mini car. Maxi sales.
Mitsubishi    1,338/1,381/ -3.1% - Trucks down 18.4 per cent, cars up 12.2 percent: sound familiar?
Nissan    6,063/5,851/3.6% - Cute-ute Rogue catching on.
Porsche    114/156/-26.9% - Actually sold almost twice as many refreshed 911s than last month
Saab    105/171/-38.6% - Anybody want a Saab franchise thes days?
smart    270/17/1,488.2% -  Whacked out increase indicates low inventories last October
Subaru    1,784/1,446/23.4% - New Forester being well received.
Suzuki    1,316/1,082/21.6% -  Will need to product soon.
Toyota    14,539/13,358/8.8% - On track for record year
Volkswagen    3,662/2,659/37.7% - Jetta TDIs finally arriving in showrooms.
Volvo    453/685/-33.9% - Wicked cash incentives, if anyone cares...

Total Light Vehicle Sales 122,711/120,926/1.5%

[Source: DesRosiers]

If it quacks like a duck…

You can read the full preview of Toyota’s new Venza here, but in good conscious, I have to give you a head’s up.

Despite the Venza essentially being the spiritual successor to the 2001-2007 Toyota Highlander, (i.e. a Camry-based five-door crossover), in an effort to carve out some kind of room in the overcrowded CUV market, Toyota will spend a lot of time and money over the next year trying to convince you that its new crossover isn’t one.

Toyota likes to call it a “car plus.” Does the company really believe the public will not see the Venza for what it is?

If it quacks like a duck...

Of course, the Japanese automaker isn’t the first to try and convince new car buyers that a spade isn’t a shovel.

Audi likes to call its station wagons “Avants.” Suzuki and Dodge attempt to try and call their respective compact wagons, the SX4 and Caliber, "crossovers."

But BMW seems to be the most egregious abuser in warping automotive genre titles.

Like Audi, they think station wagon is a dirty word. Hence, they use the term “Touring.”
Then, about a decade ago, with the launch of the X5 (a 5 Series sedan-based crossover), BMW tagged it as a Sports Activity (not Utility!) Vehicle.

Whether or not any X5 owners ever bought into the Orwellian doublespeak, I have my doubts. Same as the X3 SAV, or the forthcoming X1 SAV that just debuted at last months' Paris auto show. Most owners, I would assume, would say they own a  “BMW SUV.”

Now, we have the X6, right, recently entered in this year's COTY Prestige over $75k category. Arguably the best handling SUV this writer has ever driven, its a swoopy roofed, four-seat version of the X5 crossover that BMW likes to call a “Sports Activity Coupé.”

“Coupé,” eh?

Let’s see: with four doors and a B-pillar, the X6 is about as much of a coupé as is Mercedes-Benz’s swoopy-roofed E class sedan CLS or VW’s CLS rip-off, the Passat CC.

And apparently, the naming insanity will continue.

Allegedly, BMW is planning on a tall sedan version of the X6 (very similar in nature to what Toyota is doing with the Venza) dubbed a "Progressive Activity Vehicle."

Oy vey.

There’s still some hope. Last time I checked, BMW is still calling its 335i sedan, well, a sedan.

Do you buy into these name changes automakers like to foist on us?

Do you really call your Audi A4 station wagon an "Avant" to your friends?

How (with a straight face) will you explain you just bought a BMW Progessive Activity Vehicle to your water cooler office colleagues?

Toyota PR's Prius predicament

Like me, you probably have a vacuum in the house. Somewhere.

In my abode, allegedly, it’s that thing in the downstairs closet that gets brought once a week and makes a loud sucking noise.

Scientifically, a vacuum is “a volume of space that is essentially empty of matter.” And right now, I’m trying to decide which definition—maker of a loud sucking noise, or empty space—best describes Toyota USA’s PR strategy with the yet-to-be-released  2010 Prius hybrid.

Two weeks ago, full exterior and interior images of the much-anticipated Toyota hybrid flooded the Web, left. Toyota even confirmed the images were the real deal, not some Photochop job as some so-called spy shots end up as.

OK. So now, at least two-dimensionally, we know what the next Prius until the real thing shows up in Detroit in January.

But instead of Toyota recognizing what’s now public knowledge, the U.S. PR types keep on keeping on with their so-called teaser campaign, showing inconsequential details of a car that we’ve already seen as a whole.

  First, as seen above right, we saw the display boot-up screen (ooohh!!), then a random switch, left (aaahh!!) and then, left, what looks like is a replica of the HAL 2000 from 2001: A Space Odyssey, and finally (are you sitting down!) a power seat button, right!!

Note to Toyota PR: Enough with the denial already!

2009 AJAC Testivus Festivus - And the winners aren't...

An error in specification data supplied by the manufacturer has resulted in a new winner in this year's AJAC COTY Prestige category. Actually a tie for the category win.

With the proper numbers entered, the Mercedes CL 550 and the Mercedes SL 63 AMG ended up in a dead heat: tied at 627. The score for the third entry, the BMW X6, was 626.

According to Richard Russell, chairman of Canadian COTY, BMW supplied incorrect cargo capacity numbers with the rear seats down instead of up.

The BMW Web site states the difference is 1,450 litres versus 570, respectively.

That resulted in a change of less than two points out of 627. But the class was so close it moved the X6 from first to third.

"In past years we would probably have caught the error, but with the newly compressed format those extra days were not available," said Russell.

He added the issue has already been addressed for next year's event.

So far, BMW Canada hasn't responded to a request to comment.

You already know what cars I think should have won their respective categories this year.

Based on this is the so-called Prestige category, where vehicles can be priced $75,000 and up, how do you feel about the X6 dropping to third?

Should it have won in the first place?