President Barack Obama delivered an address to the nation this morning at 11AM where he summarized the results of review of General Motors and Chrysler by The Presidential Task Force on the Auto Industry. The conclusion of the report was that neither of the plans presented to the Task Force by GM and Chrysler are viable.

Wagoner Gone - Replaced by Henderson: Immediately, General Motors' Chairman Rick Wagoner was let go to be replaced by Fritz Henderson - a very capable and experienced senior executive. Clearly, the Task Force determined that the GM plan did not go far enough. GM now has another sixty days to rework the plan and come back with a viable approach. If they do not, the government can move the Corp into bankruptcy to get its house in order.

Our question is "What will GM's brand and vehicle line profile look like on June 1?"

Chrysler and Fiat Agree to the Framework of a Tie-Up: Minutes after Obama's speech, Chrysler announced the it had reached developed a framework for a tie-up with Fiat with the blessing of the Treasury Department. Fiat receives a third share of Chrysler for technology sharing allowing Chrysler to launch competitive new products based on Fiat powertrains and platforms. This is needed to keep Chrysler competitive. Chrysler CEO Bob Nardelli keeps his job because he has been at the helm for a relatively short time (since August 2007) compared with Wagoner's eight years at the helm.

Government to Guarantee Warranties (Warrantees): Obama stated that beginning today the warranties offered by GM and Chrysler are stronger than they have ever been because they would be guaranteed by the government. Also, adopting a spelling not seen for decades, the government refers to these plans as "warrantees". This support by the government is to create confidence in purchasing a new General Motors or Chrysler vehicle today.

Other Actions - Tax Credits, Scrappage Plans, Etc: Obama also mentioned the sales tax credit for purchasing a new vehicle that has been approved by Congress. Pending are plans for incentives to scrap older, gross polluters.

Further Question: Ford: Ford Motor Company has not taken part in government loan guarantees having planned financially for tough years back in 2006. While Ford is struggling like GM and Chrysler it does not seem to be hurt as much in the market as they are. Market share is not down as much.

How will Ford be impacted by the statements of the President, The Presidential Task Force on the Auto Industry, and the restructuring forced on GM and Chrysler by the government? Will Ford thrive or continue to struggle?

Another Question: Financial Company CEOs: Rick Wagoner fell on the sword for General Motors performance during his tenure but you can argue that the performance of the financial community has been much worse and much more damaging to the economy. Where can we see the heads of the banks, investment banks, and insurance company CEOs rolling down Main Street?

Posted by George Peterson at 11:01 AM | Permalink | Comments (1)

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It's been a busy weekend. President Obama is preparing his speech to the country about the future needs of automakers. And, before the dawn breaks on Monday, it's already being reported that GM boss Rick Wagoner is done. According to sources within GM and quoted by mainstream media, CEO Rick Wagoner will step down at the request of the Obama administration. Does Wagner leaving improve GM's chances for survival, or was the self-inflicted damage back in November, combined with taking money from the Feds the ultimate undoing of the nation's largest automaker?

Continue reading "Does Bailout Money End Up Killing GM?"

Posted by dbarrett at 4:02 PM | Permalink | Comments (0)

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The Color Nazis at the California Air Resources Board has backed off of a proposed regulation that would have required dark colored vehicles to have reflective paint to keep vehicle interiors cool thereby reducing the load on the air conditioning system. What this may have done would be the elimination of black, dark blue, dark green, dark grey paint colors. All are popular in the State.

The fact of the matter is that interior heat load is determined more by the tint of the glass than of the color of the vehicle. Maybe CARB does now recognize this because they have changed their position. See the following excerpt from their March 27, 2009 Press Release and quotes from the CARB website...

From the website: "In 2006, California adopted the California Global Warming Solutions Act, also known as AB 32. This law created a comprehensive, long term plan for California to reduce greenhouse gas emissions to 1990 levels by 2020. Cool Paints was identified as an Early Action strategy, to be in place no later than January 1, 2010. This strategy is based on measures to reduce the solar heat gain in a vehicle parked in the sun. A cooler interior would make drivers less likely to activate the air conditioner, which increases carbon dioxide emissions.

Potential approaches include reformulation of paint to reflect near-infrared sunlight, parked car ventilation, and solar reflective window glazing. It is expected that cool paints, together with reflective glazing, will reduce the soak temperature of the typical vehicle parked in the sun by 5 to10 degrees celsius.

From the CARB March 27, 2009 Press Release: "Of note, the proposal now specifies solar control requirements only for new vehicles windows (glazing). The original proposed
regulation contained requirements for both vehicle paint and windows to improve their ability to reflect heat from the sun. The intent of the paint requirements was to introduce reflective paint (currently used in architectural paints to keep houses and businesses cool) into the automotive arena. The requirement was never at any point to limit consumer color choices or ban any colors. Based on input from the automotive industry, paint, pigment suppliers, and comments from a public workshop held on March 12th, ARB staff has determined that a clear path to achieve solar reflectivity for the darker colors has not yet been identified. We are planning to address the paint-related portion
of the proposal in a future regulatory action. "

So, for now, it appears that darker colors are safe.

Posted by George Peterson at 9:53 AM | Permalink | Comments (0)

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We got the opportunity to briefly drive the new Ford Fiesta in Port Hueneme in anticipation of Ford's "Fiesta Movement" program where they will place 100 5-door Fiestas with influential Millennium drivers. Millennium means they were born between 1979 and 1985 and influential means that they have over 500 Facebook friends and thousands of followers on Twitter. To get qualified participants - or "agents" as Ford is referring to them - Ford held a contest on their website. There were about 3,300 applicants. Since all 100 of these European Fiestas will have manual transmissions we hope Ford screened for ability to shift and clutch.

The Fiesta has been on sale in Europe since August 2008 and about 117,000 have been sold to date. With the assistance of the EPA, Ford has been able to bring in 145 into the states for testing and evaluation purposes. The 45 not in the Fiesta Movement program will be used for other drive duties. Those have automatic transmissions.

During the short drive we were able to form some conclusions...

• Fast A-Pillars: The styling of the Fiesta is great - using Ford's European "kinetic" design language. But, the styling comes with a price. Getting into the front seats is tough because the A-Pillar is so fast. The Fiesta is another car that you have to think about how to get in without injuring yourself.

• Shin Warmer: The left side of the console gets so hot that it is objectionable. "Shin Burner" may be a better term than "Shin Warmer". This is an issue that needs to be addressed prior to launch in the USA.

• Lacks Peposity: A small high image B-Car... certainly personified by the Fiesta... needs to be "peppy". The 1.6L 4-cylinder engine has 118 horsepower and, frankly, it feels like less. AutoPacific happens to be evaluating a Scion xD now as well. It is a 1.8L 4-cylinder with 128 horsepower with an automatic transmission. The Scion auto feels much better than the Fiesta with a manual. Very surprising.

Ford's powertrain plan includes an EcoBoost version of the Fiesta, but, hopefully, Fiesta's performance can be enhanced prior to its launch in the USA so you won't have to spring for EcoBoost to get sparkling performance.

Posted by George Peterson at 4:49 PM | Permalink | Comments (0)

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The March 23 Los Angeles Times editorial 'You can depend on Detroit" hits the mark; today's auto industry is a tremendously competitive place. Consumers can now choose cars and trucks from domestic (Detroit) automakers that match the quality and reliability of vehicles from Japanese or European makers. So why won't Americans buy American cars?

Buyers have long memories. In the late '70s through the early '90s American manufacturers dropped the ball in product quality, reliability and customer service. While those problems have largely been corrected, the stark reality is that many people were burned during those years and they will forever be biased against the Detroit Big Three. Parents have influenced their children. Friends have influenced neighbors. Worrisome for the domestic makers, many Americans today have never, never owned an American car. They have no point of reference or familiarity with today's domestic offerings.

During the auto industry bailout testimony by the Detroit Big Three, Senator after Congressman castigated the DB3 management for selling vehicles Americans did not want to buy. Based on AutoPacific research, it is the government officials who are out of touch with today's reality, not the U.S. automakers. In fact, in AutoPacific's most recent research with owners of new cars and trucks, and echoed by other automotive researchers, both General Motors and Ford Motor Company products won more than their fair share of awards for satisfying their customers and developing vehicles ideal for their target customers.

Lexus builds outstanding vehicles supported by a great dealership experience. But its position atop durability studies is not unassailable. Today, American consumers have terrific choices - foreign AND domestic.

Posted by George Peterson at 4:12 PM | Permalink | Comments (0)

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Cool. That's what I said aloud when I took a look at the new 2010 Ford Taurus when it was unveiled a few months ago. Awesome! That's what I'm saying today, because Ford is going to offer a Super High Output (SHO) version of the Taurus, and that's good news for everyone.

Ford's being super smart about this too, combining performance with a more economically and ecologically accountable powerplant, production materials, and marketing. A dear friend of mine had a 1989 Taurus SHO and for its time, it was a hot sedan. Quick, tight, fun, and also affordable. I would be surprised if he isn't near the front of the line when the car goes on sale this July.

Continue reading "Let the SHO begin!"

Posted by dbarrett at 6:59 AM | Permalink | Comments (2)

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