What a life...

Just arrived in London (England, that is) this morning, for the start of a four-way press trip.

First stage, celebrating the 50th anniversary of the Mini.

Next, an AMG driver training program in Belgium.

Then a new Mercedes-Benz S Class in Stuttgart.

Finally, a sneak preview of the BMW X1 in Mallorca.

I barely have enough socks to be away this long.

Interesting though to get a European perspective on the travails of the automobile industry.

The British Financial Times - a copy of which was cello-bagged and waiting for me on the Heathrow Express train to Paddington Station - had several articles on various auto-related topics, with a spin we don't see back home.

Primary among the reports was the three-way battle for the European arm of General Motors. Seems the main contenders are Fiat (which is also looking at acquiring Chrysler's North American interests), the Canadian Magna parts-making group (which also made a play for Chrysler before it was sold to Cerebrus a couple of years ago), and a little-known (on our side of the pond anyway) Belgium-based auto parts conglomerate known as RHJ International.

GM which is expected to file for Chapter 11 (bankruptcy) in the US by June, wants to maintain a large (up to 40 percent) stake in Vauxhall/Opel.

Stay tuned.

Also, Daimler has acquired ten percent of electric car maker Tesla. The press release does not mention how much if any cash was involved; Tesla has been awaiting the injection of some capital to finance the construction of a new factory in Southern California to build their new "S" sedan.

But the intention of this deal seems more likely to cement the joint venture between Tesla and Daimler to build 1000 battery-powered Smart cars.

Pardon me if I retain my massive skepticism that battery-powered cars will ever be anything more than bit players in our transportation network.

The Financial Times also reports on US President Barack Obama's proposal to force car makers to achieve a corporate average of 35.5 miles per US gallon by 2015.

The oh-so-polite Brits can't quite bring themselves to directly express the pointless idiocy of this scheme, but they do include a chart showing the cost of gasoline in various countries. I hardly have to tell you where the US ranks.

And while we Canadians whine about our gasoline prices, we're second from the bottom on that list. Yet we still buy more fuel-efficient cars than our American friends do.

If Mr. Obama wants car makers to make more fuel-efficient cars, all he has to do is create a demand for them by pushing gasoline prices closer to world levels.

Simple.

This would also encourage owners of older gas-guzzlers, which are also big polluters, to trade in their clunkers for new technology. Simply forcing car makers to build those cars does nothing to nudge those owners to upgrade. Not to mention that those vehicles would be about seven hundred dollars pricier.

Still on the pollution front, various Greenies welcomed the proposal. One Frances Beinecke, president of something called the Natural Resources Defense Council, said it would "cut global warming pollution".

Which shows she has as solid a grasp on reality as Mr. Obama. The TOTAL contribution
of CO2 (the 'global warming' gas) attributable to the personal transportation sector (i.e., cars and personal-use trucks) is about 14 percent in the US, and about 12 percent in Canada.

So if we stopped driving altogether, 88 percent (here) and 86 percent (down there) of the global warming issue would remain untouched. The impact of this proposal on CO2 emissions would be on the order of a percentage point or two.

Whoopee.

Now, if former CIBC World Markets Chief Economist Jeff Rubin is correct when he says that oil will soon be $200 a barrel, never to return to the low levels it has been at for most of the past century and a half, all of this will be moot. Gasoline prices will soar due to market demands, and the car industry will react accordingly.

And Mr. Obama's proposal will, again, be pointless.

Can't anyone get a grip down there?

Comments

[hgvlgvtraining]

Thanks for your post. and welcome (belated) to the UK. Looks like GM are keeping the Euro division to themselves. We have see a steady increase in car sales since the government introduced the car scrapage scheme. However these figures and not on comparision with like for like sales.

Things are still gloomy in the UK