Friday, December 22, 2006

Things you can do with $100 Billion
Just $2.5 Billion provides wind power for a million homes

As Congress prepares to debate a supplemental $100 billion expenditure for the war in Iraq, there is news coming out of Southern California concerning a $4 Billion project to create a 50 square mile windfarm that will generate power for a million homes. The initial phase of the project will provide about 1.5 megawatts. The ultimate potential is 4.5 megawatts, or enough to replace two nuclear power plants.

Wednesday, December 20, 2006

IRAQ: Revolt of the Generals

For about a year, more and more senior military leaders have been increasing open criticism of the Bush administration's Iraq strategy. This is now turning into an open rebellion. While President Bush seems to be on the verge of asking for more troops in Iraq, his generals might not go along with the idea. According to a new article on

But the Chiefs finally "have found their manhood," in the words of one military officer. They are beginning to challenge, in private for the most part, the political leadership to a degree unprecedented in this Administration. According to Pentagon sources, the senior officers are demanding that the White House finally come up with a definable and achieveable military strategy for Iraq. "We would not surge without a purpose," Army Chief Gen. Pete Schoomaker said bluntly to reporters last week. "And that purpose should be measurable."

I did a Google search on "revolt of the generals" and came up with about 30,000 hits. Surprisingly, I added "Iraq" to this search, and still came up with 28,000 plus. Open criticism of civilian leadership by senior military officers is not the norm. Historically, it is notable by the exceptions, with the most noteworthy being the Revolt of the Admirals in 1949.

In 1949, senior naval policy-makers objected to a shift in focus and funding away from the Navy and towards the (then-new) Air Force. Specifically, the Navy objected to the cancellation of the supercarrier U.S.S. United States in favor of funding for intercontinental bombers such as the B-36 and the nuclear weapons that they would carry. Ironically, within a year of the revolt of the admirals, the U.S. would be enmeshed in a war in Korea. In that war, the B-36 and much of the Navy's top hardware would not be used.

Tuesday, December 19, 2006

Smart Scientists:
Rove vs. Rover - the Sniff Test is a Dead Heat

A group of scientists lead by Noam Sobel at the University of California, Berkley have been conducting experiments to see if humans can smell as well as dogs. Note: I said WELL and not GOOD, "well" being the adverb, and "good" being the adjective. Dr. Sobel believes that the human sense of smell is under-rated, and with a little training people can top their canine companions. Here's a description of the experiment as described at

As a part of the study the boffins first laid down a 10-metre-long trail of chocolate essential oil in a grass field.

They then blindfolded 32 Berkeley undergraduates, blocked their ears and set them loose in the field to try to track the scent. Each student got three chances to track the scent in ten minutes.

Because it's posted at, the story has to be true. I don't know what excites me more, the fact that I might be able to read the daily fireplug news with my beagle, or the thought that Berkley students (who will soon be making double my salary)had to get down on all fours and sniff the ground blindfolded to pass Psychology class.

Tuesday, December 12, 2006

The Saturn Plant that Time Forgot - GM didn't
What in Spring Hill is this?

General Motors announced that it is planning on investing $255 million in its idle Saturn Plant in Spring Hill Tennessee even though it has no (announced) products to build there. The Ion recently ceased production, and the minivan that was going to be built there was cancelled. General Motors doesn't have the cash to just throw it around willy-nilly, so what could be going on behind the scenes? Here are some possibilities.

1. An unannounced, super-secret, black-budget kind of project, perhaps a stealthy mach-4 spy car called "Aurora".

2. GM wants to spruce up the plant prior to selling it to another car-maker, Nissan Perhaps?

3. GM wants cash up front from the state of Tennessee. When time comes to pony up the GM investment - that's where a certain chap named Eleven comes in and lowers the hammer.

Animal of the Week:
61 Flavors of Opossum

Most people are told that the opossum is the only marsupial that is native to the Western Hemisphere. Okay, but did you know that there are about 61 species of opossum? Only one is native to the United States, the Virginia Opossum. Purists hate it when we call them "possums". Possums live in Australia they say. Whatever you call them, they sure are good eatin'.

Thursday, December 07, 2006

Lexus LS460: Park your car Like Toonces

The Lexus LS460 will park itself, just not very well. Check out this video from

Wednesday, December 06, 2006

FDCPA Cheatsheet

What was that section number again?

Here's a quick reference page from
Livonia, Michigan vs. Georgetown, Kentucky
Old vs. New in the Auto Industry

The New York Times has published a great compare/contrast piece between Livonia, Michigan, which has been hit hard by the decline of the traditional auto industry, and Georgetown, Kentucky, the center of U.S. auto production for Toyota.

You need a free registration to view the article linked here.

Friday, December 01, 2006

The Electric Car's Not Dead
It's Just Restin'

Read all about the Tesla.,0,7930203.story?coll=la-home-headlines
GMAC Completes Sale of 51% of GMAC
$10 Billion Cash Infusion

General Motors completed the sale of a 51% interest in GMAC to private Equity Fund Cerebus Group. As part of the deal, General motors will get up to $10.5 billion in cash this year. Four billion more will be paid to GM over the next three years.
More info is available at this Detroit News link.
Kerkorian Sells his GM Shares

Billionaire Kirk Kerkorian quietly sold all of his General Motors stock in a series of transactions over the past week. By selling the shares privately, the market wasn't substantially upset. It appears that Mr. Kerkorian made a profit on the sale, but he didn't make a killing. He also did not bring the institutional changes that he sought.

Wednesday, November 29, 2006

2008 Buick Enclave Premieres in L.A.

The 2008 Buick Enclave, Buick's new 3-row crossover, has officially premiered at the Los Angeles Auto Show. This link shows the Buick to have a very impressive interior, with rich-looking materials and impressive versatility. Although I haven't seen the Buick in person, it appears to have Lexus-like interior accommodations. The Enclave features a 270 horsepower 3.6 liter V-6, but at 4900+ lbs., it's not going to be a hotrod. Despite the power and weight, Buick promises minivan-like fuel economy numbers around 17/24 city/highway. That's quite good for a vehicle this size, about the same as the outgoing Buick Rendezvous, which is up to 1000 lbs. lighter, almost a foot-and-a-half shorter, and five inches narrower.

Speaking of size, the exterior dimensions of the Enclave may be its Achilles heel. Spec sheets say the Buick is 202.3 inches long, that's 2 inches longer than my Dodge Grand Caravan minivan. When I close my garage door, if I position my van just right, I have two inches clearance for the garage door to come down. At 79" wide, it's an inch wider than my minivan. If I park perfectly, we can just barely open the car doors enough to get in the car next to the van. An extra inch might be an inch too far. There might be a lot of new Buick Enclave owners who have to break it to their spouses that one of them is going to have to park outside.
More than Half of Ford Workers Accepted Buyouts
35,000 Workers to Voluntarily Leave

Wonder why Ford was looking for $18 billion in cash? It looks like a couple billion of it will go to pay off workers who accepted the company's buyout offer. According to the Detroit News, more than half of Ford's blue collar workforce accepted the buyout, thus opening the door for thousands of lower-paid "temporary" workers. It also opens the door to transfer Visteon workers to Ford, thereby enabling the planned closing of Visteon plants.

I believe that Ford's cash management in this crisis period has been better than General Motors'. By selling off valuable assets piecemeal, the General is giving up the assets that may open the door to eventual profitability. On the other hand, Ford borrowed against its assets. Ford is using proceeds to cut structural costs, but it is retaining the assets necessary to be profitable down the line.
More than Half of Ford Workers Accepted Buyouts
35,000 Workers to Voluntarily Leave

Wonder why Ford was looking for $18 billion in cash? It looks like a couple billion of it will go to pay off workers who accepted the company's buyout offer. According to the Detroit News, more than half of Ford's blue collar workforce accepted the buyout, thus opening the door for thousands of lower-paid "temporary" workers. It also opens the door to transfer Visteon workers to Ford, thereby enabling the planned closing of Visteon plants.

I believe that Ford's cash management in this crisis period has been better than General Motors'. By selling off valuable assets piecemeal, the General is giving up the assets that may open the door to eventual profitability. On the other hand, Ford borrowed against its assets. Ford is using proceeds to cut structural costs, but it is retaining the assets necessary to be profitable down the line.

Monday, November 27, 2006

Forbes:"Ford Bets the Farm"

Ford Motor Co. has taken out a $18 billion secured line of credit. Put the emphasis on the word "secured". Ford has pledged most of its North American assets to get $18 billion with which to implement it's way forward. According to, not only are the plants and machinery securing the loans, but Ford Motor Credit as well. Does this foreclose any selling of a minority interest in the finance company? It would appear so.

It seems to me that tying the substantial assets of Ford up with a single secured lender will make the company much easier to sell in bankruptcy compared to a situation with many creditors and a power vaccum. The secured creditor simply sells its interest to the suitor. The suitor makes a pitch to the bankruptcy court to buy out the claims of the small dollar creditors, and Ford becomes "New Ford". The suiter could be Renault/Nissan, the Ford family or whomever.

So how will we know if Ford's gamble works? You'll know it didn't work when you see a villainous character with a black top hat, black cape and handlebar mustache lurking around looking for people to tie to the railroad tracks.
An Inconvenient Truth now on DVD

Al Gore's documentary on global warming, An Inconvenient Truth, has been quietly released on DVD. It seems like Al was everywhere when the movie was released to theaters. Now with the DVD release, Al Gore is nowhere to be seen.

Tuesday, November 21, 2006

Site News 11/21/06

IF you wonder why it has been quiet lately, I have been in a time crunch. I have at least a half dozen postings at a draft stage that I haven't had time to fully complete. With any luck, I'll get a couple hours over Thanksgiving break to get things updated.

General Motors Update 11/21/06

Robert Farago just published installment 100 of his General Motors Death Watch series. Farago asserts that the General is just about out of cash and mechanisms to generate cash. Buried in shareholder disclosure documents is a warning about a negative (book value) net worth. Here's a quote and a link.

For those who’re listening, the klaxons are sounding loud and clear. Check this excerpt from a GM press release regarding an upcoming $1.5b seven year secured loan (tied to machinery and equipment and special tools at US production plants).

"GM's ability under some of its existing bond indentures to pledge U.S. property, plant and equipment is likely to be affected in the future by new rules applicable to pension and OPEB accounting, which could cause GM's shareholders' equity in its year-end 2006 financial statements to be negative.”

In other words, the well has run dry. With 51% of its GMAC finance unit (a.k.a. cash cow) set for sale, GM can no longer borrow from this once dependable internal source. As of next year, GM still won’t be able to take out unsecured loans, while the terms of its bond indentures rule out secured loans. With a negative cash flow from its North American operations and no ability to borrow, with debt payments due AND the need to fund Wagoner’s turnaround plan (new products, severance pay, depreciation, etc.), GM’s cash crunch is going critical. The only money available: $8.5b (plus another $4b over three years) from the GMAC sale.

Late last year, GM was reporting about $20 billion in cash available, but financial analysts suggested that less than 1/2 of that would actually be available for operations. So if in the last year, GM's operations, including buyouts and Delphi infusions, used up $10 billion, zero-hour may be at hand

Friday, November 10, 2006

Low-cost Carbon Fiber

Honda and GM have recently made great strides in their fuel cell car programs. To be more efficient in the long run, cars must be lighter. It's a challenge to reduce weight without sacrificing strength, safety, durability while still managing initial costs and repair costs. Probably the most promising material for weight reduction is carbon fiber. Carbon fiber is still way too expensive for mass-market cars. Although carbon fiber has been used for 40 years or more in aerospace, cost reductions through experience curve effects have been slow in coming. Recently, a government-funded project has uncovered a new "precurser" material for carbon fiber that could reduce the cost significantly. The material is lignin, sometimes called kraft-lignin. Lignin is a byproduct of papermaking that usually goes to waste. Info on turning lignin to carbon fiber is here. An article from 2003 on the same topic is here.

Wednesday, November 08, 2006

Toyota's Profit up 34%
$13 Billion in Profit for the Quarter
GM's Quarterly Loss under $100 million

There's no question that Toyota is becoming the black hole for profit in the auto business. Toyota reported quarterly profits of $13 billion. If replicated over an entire year, toyota's yearly profit would be enough to buy up all the stock of Ford and General Motors, and more than account for the net worth of both companies. Toyota has such a gravitational pull that all the profit in the industry is getting sucked into its giant maw. Actually, that's an overstatement, because Nissan's profit was up 31%; however, with a sales increase of over 17%, Toyota is king of the hill.

Toyota's news overshadowed GM's news that its quarterly loss (as adjusted) fell below $100 million. I wonder though how much of Delphi's ongoing loss must, in the long run make it's way to GM's books. I understand that GM has made accounting adjustments to take into consideration losses atributable to Delphi, but still . . .

Monday, November 06, 2006

Attack of the Killer Minivans

Here's a site dedicated to turbocharged Chrysler minivans. Drag racing in a minivan? It seems like a win-win proposition. If you win it's "Ha ha, you got beat by a minivan!" If you lose, it's "what did you expect, it's a minivan."

Friday, November 03, 2006

Useful Link:
Edmund's Guide to Maintenance Schedules, Recalls & Technical Service Bulletins

Just enter your make, model & year at this link and get all the relevant info for your model of vehicle.

Thursday, November 02, 2006

Latest at Sema: $2000 Polycarbonate Wheels

Query: If it's clear, is it still "bling"? The latest thing at the SEMA aftermarket equipment show is clear polycarbonate wheels. Polycarbonate is the material that is used for bulletproof glass, shatterproof eyeglasses and iBook chassis. Now (or soon) you an buy 20" to 24" wheels made out of the stuff. Per, if you want a set of four, it'll cost you $8,000.

Wednesday, November 01, 2006

Animal Site of the Week:

I stumbled upon this neat site when I Googled Gustave, the Killer Croc, from a PBS Special. This site collects news stories about shark attacks, crocodile attacks and more killer sea creature stories, but it also collects news items regarding ocean exploration and ecology in general.

Underwater times

Tuesday, October 31, 2006

Auto Industry News 10/31/06

The Month of October is going out with a bang. I'm too busy to provide links but here are some headlines of the day. You can Google them if you are interested. Do you see a pattern here?

Ex-Delphi CEO Charged with Civil Fraud
Workers Threaten Strike - Goodyear Closes Plant
Dura files Chapter 11
Visteon Posts $177 Million Quarterly Loss
First Mississippi-built Altima Rolls off the Line
Ford Cuts Production 8-12% for first half of 2007.
Reprts Grow of DCX Split
Halloween Craft of the Day:
Make a "Rat Throwie"

Jeopardy style lead in:

Answer: You stuff a dead rat and replace the eyes with glowing red LEDs.

Question: How do you make a rat throwie?

Monday, October 30, 2006

Peyton Manning

Excuse the brief detour to hometown boosterism. I watched the last quarter of yesterday's Colts/Broncos game, and what I saw was one of the best quarterbacking jobs I've ever witnessed. The Denver Broncos have one of the best defenses in the NFL. IN the first six weeks of this season, they only allowed two touchdowns. Peyton Manning hit 32 of 39 passes for 345 years and 3 touchdowns, everyone of them needed, to move the Colts to a 34-31 victory. This game both teams treated like a playoff game. It would not be surprising to find at the end of the season that the outcome of this game determined home field advantage for the playoffs.

The most impressive thing was the control and the poise that Manning demonstrated. It was clear that he would not let himself lose this game. It didn't matter that the Colts defense couldn't have stopped the runs if it had a case of Ex-Lax, Peyton was not going to lose. If anyone else is going to be MVP of the NFL this year, he's going to have a lot of work to do better than Peyton Manning.

Wednesday, October 25, 2006

GM 3rd Quarter Results in - Better than Expected
North American Operations Profitable before "special charges"

General Motors posted a net loss for the third quarter of $115 million. While that may seem bad, this time last year, GM posted a third quarter loss over a billion dollars. GM sold fewere cars, but lost less money, a sign that sales of unprofitable (e.g. fleet) cars have been reduced.

Overall, things are going in the right direction for GM.

Monday, October 23, 2006

Ford's 3rd Quarter Loss $5.8 Billion . . . and Counting

Ford just released its 3rd quarter financial results. Ford reported a $5.8 billion dollar loss. Ford's North American operations lost $2.0 billion, up from $1.2 billion last year. Results in the rest of the company were mixed, and it looks like about half of the $5.8 billion dollar loss was attributable to restructuring costs including the recently-announced employee buyout.

The "and counting" portion of the headline to this entry refers to Ford's announcement that Ford Motor Credit plans to restate results going back to 2001. Apparently, there were some accounting issues that rendered previously announced statements inaccurate. Let the lawsuits begin.

Thursday, October 19, 2006

Bush Press Secretary Disses Ford

Maybe George W. isn't the biggest idiot in the White House after all. Press Secretary Tony Snow went on an incredibly ignorant rant about Ford pensions during a press conference according to a story at Here's what he said:

"One of the things that's really hit Michigan hard, for instance, at Ford, are defined benefit plans that were bankrupting the company...I mean, I know this personally because people very close to me are now having to make the decision that the pensions that have been promised to them are not going to be available and they're going to have to take a cash payout."

Where do you begin in explaining the errors in such a statement? Ford isn't bankrupt. Even if it goes bankrupt, the pension won't necessarily be insolvent. Even if Ford goes bankrupt, the pension is unlikely to be the cause. After all, Ford has been salting away money into the pension fund for decades, and pension obligations should hardly be considered to be a surprise. For workers taking buyouts, it's rarely a pension-driven decision, since in the plans I've seen vested employees keep their accumulated pension rights.

Snow should go back to work at Fox News, where getting the facts wrong isn't just expected, it's part of the job description.
Wall Street Journal: It takes a Doctorate to Beat Inflation

According to David Wessel's October 16, 2006 "Capital" column in the Wall Street Journal (paid subscription required), the only group of Americans whose wage gains exceeded inflation in 2000 to 2005 were those with Doctorate degrees. We (our education group anyway) beat inflation by 10.6%. If you didn't finish high school, your wages went down 4.6% after inflation.

Wessel also cites statistics gathered by a researcher at University of California, Berkley showing that wincome inequality in the US is getting worse. In 1984, the top 1% of income earners earned 9% of all income. In 2004, it was 16% of all income.

Wednesday, October 18, 2006

2006 Pontiac Grand Prix - Base Model
Rental Car Review

My car is in the shop this week, and Enterprise Rent-a-Car, kindly lent me their 2006 Pontiac Grand Prix. This gave me a chance to explore General Motor's current offerings in the low-middle of the market. Bottom line - it's not bad. It's better than the last rental car that I had, a 2006 Buick LaCrosse, and it's way better than the one before that, a 2005 Dodge Stratus.

I'll be frank. I didn't want the Grand Prix. I was looking for either an Impala (the Grand Prix's more-popular platform mate) or a somewhat smaller Chevrolet Malibu or Pontiac G6. As keys disappeared from the rack at Enterprise, I decided to go ahead and take the Grand Prix.

I'll overlook the fact that the car had that distinctive rental car smell of smoke covered by Febreze, and I'll go to the substance. The test car is quite attractive, well-integrated swoopy lines make the car look smaller than it really is. The car has a well-done grey paint job and attractive alloy wheels. The interior is almost entirely black. It has dark-grey to black cloth upholstery and is finished mostly in black plastics for the doors and dash. GM often takes hits for their "hard plastics". On this car, the plastic is soft where you would touch it. Where it is hard, it really doesn't make a difference. The dash is curved to create a cockpit feel. The gauges are clear and are instrumented with typical Pontiac red-orange lighting. Some people like the color, other people don't. It's a matter of taste. The trunk is large, and there's a fold-down rear seat. There are four very functional cupholders.

In terms of performance, Pontiac got the important things right. Even though this car has the base 3.8-liter V-6 engine, it has plenty of power. The transmission may only have four gears but it shifted seamlessly. The 3.8-liter V-6 performed much better in the Grand Prix than in the Buick LaCrosse that I rented a couple months ago. The Grand Prix rode comfortably but is well-connected to the road. The steering response was very good. Overall, the driving dynamics are such that you will probably find yourself going quite a bit faster than you think you are. My car didn't have a fuel-economy read-out (more on that later), and because it wasn't full when I got it, I haven't been able to check the fuel mileage. It appears to be reasonable based upon the movement of the gas gauge.

Given the size of the car, the back seat could be larger, but it's not bad overall. I think the Grand Prix isn't really marketed at families. It's more company-car/commuter-oriented.

As far as I could tell, this rental is the base model with just one option: a $150 upgrade to the stereo. If you get the car, get the upgraded stereo. The CD player (single disc) plays MP3 files. The tuner performance is exceptional. It pulls in stations that I didn't know existed. This is the first car radio that I've seen that the RDS really works as it's supposed to.

There are a few nagging omissions from the equipment list in the base model without options. There is no trip computer in the information display. Since the engine computer automatically complies the information necessary to calculate MPG, the only reason to leave it off the display is to sucker people into buying an option package. The base car has a power-adjustable driver's seat, but the driver's seat has no lumbar support. Also, there are no steering wheel radio buttons. Fortunately, all of these omissions can be rectified by ordering the "Preferred Option" package which lists for $965 and has an invoice price of $801. The preferred option package includes a front passenger flat-folding seat (handy); a driver' side 2-way power lumbar adjuster (needed); remote vehicle start; cargo net; leather-wrapped steering wheel with audio controls and shift knob, visors with illuminated vanity mirrors; reading lights front & rear; an overhead console; a trip computer; and some upgraded trim. I would highly recommend getting this package as it promises to cure virtually all of the Grand Prix's weaknesses as tested.

The only weakness that I saw that would not be cured by the preferred package was the tendency of rain to collect on the back window. The car is swoopy, and the back glass is large. It is not angled enough for rain (and snow) to fall off immediately, and there is no wiper. If you get this car, I strongly suggest that you try a water beading compound like RainX.

Finally I get to crunch time - price. The Grand Prix is well-priced, and it appears that GM's "value pricing" model works. GM only has a fairly modest end-of-model-year rebate of $1500 on the Grand Prix. Per Edmunds, equipped as the rental, the Grand Prix would have a list of $22140, an invoice of $20,942, an Edmunds TMV(TM) of $21,195. Subtract the $1500 rebate and you get a net TMV of $19,695. That's under 20k for a "full-size" V-6 powered car. With the GM Employee discount, you could likely get the base car with the Preferred Package for under $20,000 before tax; and for that money, you'd be getting a good value.
Social Security Checks to Go Up 3.3% in 2007

The AP newswire is reporting that Social Security recipients will receive a 3.3% cost of living raise next year. It's ironic that most wage earners will be lucky to see an increase of half that percentage. Twenty bucks who will complain more, the wage-earners or the social security recipients.

Tuesday, October 17, 2006

Walmart Employees Revolt at Florida Store

Walmart Employees Revolt at Florida Store

According to, on October 16th almost the entire morning shift of a Walmart store in Hialeah Gardens Florida walked off the job in a mass demonstration against changed work policies. According to the Businessweek article:

SCHEDULE CHANGES. The protest wasn't led by any union group. Rather, it was instigated by two department managers, Guillermo Vasquez and Rosie Larosa. The department managers were not affected directly by the changes, but they felt that the company had gone too far with certain new policies. Among them were moves to cut the hours of full-time employees from 40 hours a week to 32 hours, along with a corresponding cut in wages, and to compel workers to be available for shifts around the clock.

In addition, the shifts would be decided not by managers, but by a computer at company headquarters. Employees could find themselves working 7 a.m. to 4 p.m. one week and noon to 9 p.m. the next. "So workers cannot pick up their children after school everyday, and part-timers cannot keep another job because they can be called to work anytime," says Vasquez.

I have nothing else to say.

Thursday, October 12, 2006

Inside Toyota's Hybrid Factory

Here is a facinating article from
Get a Human

Tired of being in Voice-mail hell? is a list of phone numbers and instructions on how you can talk to a real person, unless, of course, the machine can pass the Turing Test. If the machine can pass the Turing Test, do you really care if it is a machine anyway?
How Your Senator Voted on Torture

President G.L. Bush (G.L. stands for "Generational Loss) never ceases to amaze me when it comes to bad ideas. What amazes me even more is the spineless way that Congress rubber-stamps the worst of the worst. I finally tracked down the roll call vote on Senate Bill 3930, the Torture Bill. This bill makes torture legal by not calling it torture. It specifically would allow tactics such as waterboarding, and would immunize interrogators from liability even when they cross the line. Not only that, but generally, information obtained by torture would be admissible in what passes for a trial of "enemy combatants".

For a while, during the debate, it looked like McCain and a few other Republicans would stop this mess. In the end, however, McCain did what he has done consistently since before the 2000 election, complain about Bush, then roll over and let Bush have his way. I wonder what kind of dirt that Bush has on McCain to turn feisty McCain into a lapdog.

So anyway, look at the vote. To make things easy, I will tell you that the only Republican senator to vote against the bill was Chaffee of Rhode Island. Good for you, Senator Chaffee! The Democrats who listened to the wind and headed the way of agonized screams were

Carper - DE
Menendez - NJ
Lieberman - CT
Lautenberg NJ
Landriew - LA
Johnson - SD
Nelson - FL
Nelson - NE
Rockefeller - WV
Salazar - C0
Stabenow - Mi

If you live in a state with a senator who voted for this travesty, I urge you to send your senator a picture of a waterboard, and ask the senator how they would like it if their son/daughter was tied to a waterboard in North Korea.

Tuesday, October 10, 2006

Detroit Teachers Get Contract 0% First Year Raise BUT New Legal Services Benefit
Large Number of Teacher Contracts Up for Grabs in Indiana

After a 15 day strike, the Detroit Federation of Teachers resolved its labor dispute. The teachers drew a line in the sand when the administration went into negotiations demanding a 5% pay CUT and other accommodations from the teachers. The net result of the negotiations is a contract that results in a 0% increase the first year, a 1% increase the 2nd year, and a 2.5% increase the third year. The teachers made some work-rule concessions but gained a legal services benefit. The teachers apparently successfully fended off demands that they pay substantially more toward their healthcare costs. It should be noted that Detroit teachers were significantly better paid than average, with an average salary in 2005 of $57,702, substantially higher than the average pay of UAW-LSP lawyers.

This last point should be of interest to members of AFSCME 3357. We are facing an inevitable shrinking of our union and continual pressure on our jobs and our salaries unless we somehow loosen the tie between our jobs and the domestic unionized auto industry. The most fundamental UAW Legal Services Plans and establishing a marketing presence.

Teachers Unions may be a prime target market. According to an Indianapolis Star article published this morning, the number of teachers working with unsettled contracts is at a historic high. One hundred and twenty-one out of two hundred and ninety-three districts are working without a contract. Judging from anecdotal reports of recent negotiations in Indiana, the teachers' contracts that are settling are delivering 2% pay raises for the teachers. The addition of a low-cost legal services benefit may be just the thing to sweeten a package enough to get it approved. Matching new business to capacity within the current UAW-LSP structure could be a challenge. According to Wikipedia, Detroit has approximately 7,000 teachers. That's enough to keep two UAW-LSP offices busy.

Wednesday, October 04, 2006


Eleven days before the scheduled end of the management review process, executives from General Motors and Renault/Nissan are expected to make a joint announcement that talks for the merger have been called off. While it's not official at this point, reports from multiple sources suggest that the chances of the merger happening are about the same as the chance that Bobby Brown will be named Father of the Year. Face it, it's about as dead as Generalissimo Francisco Franco. It's as dead as an ex-parrot. It's snuffed it.

You'll read a lot of speculation about what killed the deal. There are many reasons. You'll hear talk that the parties couldn't agree on how to distribute the savings from combined parts distribution. You'll hear talk that Renault didn't want to pony up cash. You'll hear talk that GM's entrenched management didn't want to give up control. All of these are probably true to a point, but I think the compelling reason is that Renault didn't have enough reason to buy now when it can pick up the best parts later for a fraction of the price. Carlos Ghosn got what he wanted the most, a chance to look under the hood and see what was down there. Ghosn knows what the parts are worth now, and you can bet that He will be first in line to pick out the juicy bits when GM files Chapter 11.

Was all this merger speculation a waste of time, probably yes for GM, almost certainly no for Renault. Carlos Ghosn knew from the get go that the chance to look was worth the cost of looking.

Tuesday, October 03, 2006

Ford "Cuts and Runs" Again
The Focus Wagon Gets the Axe

Ford continues to reinforce its image as the "Sir Robin" of the auto Industry. Ford just announced that it will be discontinuing the Focus station wagon in December, not even waiting until the end of the model year. Although the Focus wagon only accounted for about 9% of Focus sales, the buyers of the wagon may not have considered any competitors, becaus the Focus wagon is in a segment of the market where most of the competitors have left. Rember the Saturn SLW? The Corolla Wagon? The Jetta Wagon? All of the rest of the "current" crop of small wagons are seriously hampered by their wannabe suv pretentions. Even with its outdated engineering, the current Focus wagon delivers better room, performance, drivability and fuel economy than the Dodge Caliber for significantly less money. I put together a chart on comparing several small wagons. None have the cargo room & utility of the Focus. None match the Focus's 27/37 fuel economy ratings.

Getting back to the topic of Ford's "cut & run" mentality. Here are vehicles that Ford cut out rather than redesigning:

Ranger (soon)
Focus Wagon

Instead of cutting the Focus Wagon, Ford should engage in a target marketing campaign aimed at current owners of the Focus (and Escort) wagons. Let these people know that this could be their last chance to get a Focus Wagon, and many will dig deep to come up with some dough for a replacement. Ford probably has the computer power to also screen DMV registrations and target owners of competing small wagons as well. The entire project would cost less than one Taylor Hicks commercial.

You can't be on the "Way Forward" and retreat at the same time.

Tuesday, September 26, 2006

Ed Murrow Lives!

Keith Olbermann from MSNBC has posted the best political essay that I've seen/heard in a long time. The topic: Bill Clinton's ass-whooping of Chris Wallace, the designated spitter for Fox News. Bill may be forever known as the president with the penis, but Bill also showed that he had the nads to go with it, as he exposed Fox in all of its Harper Valley hypocracy. To tell you the truth, Olbermann's essay, in print here and video here, is only nominally about Clinton. It's really about how Clinton re-energized resistance to right-wing reality distortion tactics. Specifically, he says why Bush's "free pass" should be revoked. He also tells us what he thinks of George W. Bush, and why.
China in Auto News 1
Daimler Chrysler to bring in Chinese-made car?

Daimler is hinting that it may find a Chinese partner for an upcoming small car. Well, that's got to go over well in middle America.

Chrysler in Auto News 2
China to Tax Large Engines - Support Turbos

In the international press, China is all about "free trade", but at home, China requires foreign car makers to enter into (50-50) partnerships with local companies. It seems inevitable that one way or another, once the local company has built up capital and knowhow, the foreigner is going to be told to hit the bricks.

There is one area where China is equal to, and maybe ahead of the West, and that is (surprisingly) emissions and fuel economy policy. China imposes high taxes on automobiles, and on large-displacement engines in particular. As a substitute, China has been progressive about turbochargers. See the Automotive News article on China and Turbochargers.

Friday, September 22, 2006

It's the Dependency Ratio, Stupid

Robert Farago has a very good article at thetruthaboutcars today titled GM: Kicking the Habit. It's about dependency ratios. In 2005, General Motors had 143,000 employees to take care of 453,000 retirees, a ration of 3.2/1. Actually, when you look at total dependents, it's worse than that. The active workers usually have spouses and kids. The retirees generally have at least a spouse. Moreover, the ratio probably was made half-again as large due to the employee buyouts this year. The buyouts created more retirees and fewer active workers. At some point, you just can't be productive enough to take care of the burden. Farago makes an excellent illustration:

Economists use dependency ratios as an analytical tool to examine national economies. ItÂ?s a pretty simple concept. Imagine a single man bringing down $100k a year. Mr. ManÂ?s got sufficient liquidity to buy a brand new Corvette. Now imagine the same guy making the same money married with 2.3 kids. He can only read about the joys of Corvette ownership (probably here, for free).

The single guy's supporting one person with one income, creating a one-to-one dependency ratio. Assuming his wife doesn't work, the married manÂ?s living not-so-large at three-point-three-to-one. The more dependents a productive worker/economy must support, the less profitable and thus, financial viable, he/it is.

If this suggests to you that there is an inherent limit in the doctrine of "shrink to survive", that's the whole point. The only way to improve the dependency ratio is to survive until retirees die off (Since some of these retirees are only 50 years old, it'll be awhile), or shed the pensions through Chapter 11 bankruptcy.
Could One Transmission Sink Both GM and Ford?

This fall marks the debut of a new 6-speed automatic transmission that was co-developed by General Motors and Ford. Working from a common design, the automakers are producing their transmissions in separate plants with minor variations as their products require.

If everything works well, the 6-speed will at least match the competition, and in some cases the transmission will be a competitive advantage. Nevertheless, new transmissions have historically been the cause for some massive recalls and bad public relations. Most recently, Toyota has run into problems with its 6-speed automatic, a transmission that is featured in the V-6 versions of the redesigned 2007 Camry.

In the late 1980s Chrysler Corporation had a problem with its then revolutionary computer-controlled 4-speed automatic transmission called the Ultradrive. From 1989 to 1999, the Center for Auto Safety reports at least 50 technical service bulletins on various models of the Ultradrive transmission. Descendants of the Ultradrive power most of Chrysler's U.S. products to this day, but reports of failures have apparently decreased to unremarkable levels. Chrysler's 6-speed transmission debuts with this fall's 2007 Chrysler Sebring. Chrysler's 6-speed carries over much of its design from the 4-speed Ultradrive and is built in the same plant in Kokomo, Indiana.

If the new GM/Ford transmission proves to be smooth, reliable and economical, it could contribute to the revitalization of both companies. That being said, neither company is in a position to take a hit like the Ultradrive levied on Chrysler. The competition is too fierce, so the margin for error is small.

Thursday, September 21, 2006

Rate Your Judges

Ah,, this is one that I've been waiting for. Time to get even. Judge Snider has had it in for me ever since I almost ran over his dog. Well, replace the word "dog" with "child", and replace the word "almost" with "repeatedly". (Stolen from Lionel Hutz. God rest your soul, Phil Hartman.)
Rate Your Judges

Ah,, this is one that I've been waiting for. Time to get even. Judge Snider has had it in for me ever since I almost ran over his dog. Well, replace the word "dog" with "child", and replace the word "almost" with "repeatedly". (Stolen from Lionel Hutz. God rest your soul, Phil Hartman.)

Friday, September 15, 2006

Details Announced on Ford Restructuring Plan
a/k/a "Have you driven by an unemployed Ford worker lately?"

I posted yesterday about Ford's way forward. Today more details were announced. In addition to laying off 1/3 of the salaried workforce, Ford has targeted for buyouts approximately the same percentage of the hourly workforce. Buyouts will likely be similar in magnitude to those offered by GM, with cash payouts up to $140k per worker. Ford's stock went down $.51 per share yesterday, but I don't see why. It's not like this was a surprise. If investors lose their shirts on Ford and GM it's because they were asleep at the switch. Management has all but said that they are going to give large portions of the paper equity of the company to the hourly employers in exchange for buying out their contracts. In both cases, the cost of labor peace may be more than half the book value of the companies. In some ways, this may be labor's last hurrah. At least it's a hurrah.

No Luck for Norfolk, Its Trucks are Shucked

In addition to the layoffs disclosed earlier, Ford will be cutting two additional plants, one in Ontario and one in Ohio. It will be closing the Norfolk Virginian F-150 plant in 2007 instead of 2008. Ford is reducing capacity at the Ranger plant in St. Paul, Minnesota. According to Minnesota Public Radio, perhaps the only reason that Ford has kept the St. Paul plant open this long is that it relies on hydroelectric power from the Mississippi river, and since Ford owns the dam, it can essentially power its factory for free and sell the excess power on the grid. The Ranger pick-up is older than the hills, but since competitors have mostly deserted the market for small no-frills trucks, the Ranger lives on as a relic long after it should have been redesigned. St. Paul may be the assembly site for the Ranger's successor in 2009, but it appears that the plant will be idled for a significant period of time regardless of new product plans.

All of the Former Visteon Plants may be living on Borrowed Time
Plants are to be sold or close by the end of 2008

Ford has had the "For Sale" sign out on its former Visteon plants for a year or so now, but it's a buyer's market. At least it would be if there were any buyers. Ford reiterated that it plans to either close or sell all of it's Visteon plants by 2008. Personally, I'm skeptical of that date. Collectively those plants sell too many of Ford's parts for Ford to line up contingent suppliers in time to make to do production planning for 2008. Nevertheless, over the long term, it would behoove the local union leaders to be working with state business incubators on plans for local ownership. Otherwise, the workers at these plants can bid their jobs bye bye.

Where does this put AFSCME 3357? It looks like between the Ford cuts and the GM cuts, we're looking at the active worker base going down 1/3 or more during the next contract period, but the number of retirees may go down by only half that number. Caseloads for our attorneys may swing from high to low and back again as offices shrink and are consolidated.

Wednesday, September 13, 2006

Ford's Way Forward Part Deux
"This time we really mean it"

Ford is about to unveil it's 2nd "Way Forward" plan. The first plan fizzled faster than Mentos dropped in Diet Coke. The new plan is said to include an early retirement/buyout plan for hourly workers similar to that offered by General Motors and a not-so-generous boot out the door for about 30% of the white-collar work force. The dealer network and the product lines will be pruned as well.

Note that this plan comes just days after the appointment of a new CEO, Ford's (nee Boeing's) 35 millon dollar man, Alan Mulally. (For the life of me, I can't seem to remember that guy's name. Every time I want to use it, I have to look it up.) Since the guy just got there, it's hard to believe much of the $35 million invested will result in any improvements to the turn-around plan.

Ford still plans on shrinking itself to prosperity like um, well, um . . . . Well, there has to be someplace where it worked. Oh yes, Boeing. Of course a manufactured war, bumbles by its main competitor, and a multi-billion dollar investment in new products helped Boeing just a little bit.
Et tu Chrysler?
Dodge & Chrysler go Subprime with 0% 72 Month Financing

DaimlerChrysler has joined Ford & GM in relaxing the standards for its 0% 72 month financing. The dealers like it because it allows them to sell cars to customers they would otherwise walk. The accountants should hate it because it will be hard not to book a high bad debt reserve. Although Chrysler brass may look at the program as an alternative to further discounts. In reality subsidized subprime loans are a ticking timebomb waiting to explode.

The Detroit News profiles the new customer that Chrysler is looking to hook up:

"How could it not work?" asked John Berry, a sales manager at the Hollywood, Fla., dealership. "Just today we had a customer that we would have missed if the new rules weren't in place."

A single mother of five with subpar credit drove off Tuesday in a new Town & Country minivan because she qualified for the financing deal, Berry said.

What do you think the odds are that nothing bad will happen over the next six years to that "single mother of five" that will keep her from making $600/month car payments? A lot of these cars will be coming back as repos. They could trash the resale values for years down the road. Don't believe me? When was the last time you heard of someone buying a Mitsubishi Galant retail? Easy credit policies put Mitsubishi's US operations on life support, and the patient will be in the hospital for the foreseeable future.

Friday, September 08, 2006

Why So Quiet

I'm back from the land of the living dead, so I can catch up on the potential blog entries that have accumulated over the alst two weeks. Issue #1 New Ford CEO . . .

Alan Mulally to Make at least $10 Million/year

While I was incapacitated, Bill Ford took it upon himself to take advantage of the low scrutiny and step down as CEO, appointing former Boeing executive Alan Mulally as CEO. Say what you will about Bill Ford, he worked cheap(ly). Ford declined to take a salary. Not so for Mr. Mulally, he's expected to make at least $10 million per year. When you pay your executives 8 figure salaries, it makes it hard to justify concessions to people who work on the production line.

Monday, August 21, 2006

2008 Honda Accord - Spy Photos has posted these photos said to be pictures of the 2008 Honda Accord. They could be mere Photoshop trickery, but, who knows?

Compare and contrast the low-slung Honda Accord with the Dodge Avenger (the platform-mate to the Chysler Sebring. It's hard to see how DaimlerChrysler can compete with Honda on fuel economy as long as DC maintains a "F*** the Wind" attitude towards aerodynamics.

The Return of the Googleteer

Speaking of the Chrysler Sebring, the Googleteer flew in the window and did this search:

"chrysler sebring" ugly

With the result 18,300 hits, and most people haven't even seen the car yet. It looks like the Sebring will win 2007's "Ugly Car of the Year" award, joining such past winners as the Pontiac Aztek and the Subaru Tribeca. If you haven't seen the Sebring, it's mother was a Chrysler Crossfire, and its father was a Saturn Ion that jumped the fence.

Friday, August 18, 2006

GM Shows off Latest Wares at the Indiana State Fair
Saturn Aura and Chevrolet Aveo 4-door look to be hits.

General Motors is showcasing its latest and greatest products at the Indiana State Fair. I only had about 15 minutes to look at the various tents that were displaying the new cars and trucks, so I didn't get to look at the vehicles in detail, but it was obvious that GM was making an effort to put its best stuff in front of the public.

The car that got the most attention was the 2008 Chevrolet Camaro prototype. I don't have much to say about it except that you couldn't really see inside it well, and the outside looked like the pictures that have circulated on the internet and in car magazines.

The star of the show in my mind was the Saturn Aura. The Aura is Saturn's new midsized car model. It is derived from the Opel Astra, and it is very European in character. The car on display, an XR, looked wellbuilt and finished inside and out. More than anything, it reminded me of a current model Volkswagen Passat. It also reminded me of the Cadillac CTS. The display model was black with black leather interior. As a high-line XR model, it had the "high feature" 3.6-liter 252 horsepower engine with the new sequential shift 6-speed automatic transmission. It also had a panoramic sunroof. I believe the price was around $27,000. I also saw a base model XE sedan but did not get to go inside it. For $22,000 or so, it appeared to be a good value.

Even more than the new Silverado/Sierra pickups, General Motors needs the Aura to be a hit. From what I saw, I think the Aura will be quite successful. The initial reviews are good. I'm linking a review from The base cars currently feature a 224 horsepower version of GM's 3.5 liter "high value" engine. Although this is a pushrod engine, variable valve timing gives it power in the same league as the Ford 3.0 liter 24-valve Duratec engine. Thus, the base Aura competes directly with the higher trim line Ford Fusion and Mercury Milan. I would take the base model Aura over the Hyundai Sonata in a heartbeat. I'm going to try to testdrive an Aura soon, and I'll report on what I find.

As a side note, I want to point out that the 2007 Pontiac G6 gets most of the key hardware featured on the Saturn Aura. The G6 GTP gets the 3.6 liter engine and the 6-speed automatic transmission. The 224 horsepower 3.5 liter engine replaces the 200 HP version from last year. Although the G6 initially sold poorly despite hype from the Oprah giveaway, sales have steadily improved. It helps that Pontiac filled out the model line with a 2.4 liter 4-cylinder model, a 2-door coupe and a convertible. There have also been improvements to what was initially a hit and miss interior.

Another interesting car at the fair was the Saturn Vue Greenline. The Greenline is a mild hybrid. This is the first passenger car application of the Belt Alternator Starter (BAS) system, a mild hybrid system that is geared to deliver more bang for the buck compared to other systems out there even if it doesn't deliver Prius-like gas mileage. At 32 mpg , the Vue Greenline beats the Ford Escape hybrid in highway mileage. Its $22k sticker beats every hybrid that I've seen. The Vue Greenline on display was nothing to write home about on the inside. It looked like a Vue with one extra read-out on the instrument panel. Personally, if I get a hybrid, I want a fancy television display like the Prius.

The other brand new GM model that I checked out was the compact Chevrolet Aveo sedan. This is based on the Daewoo Kalos and is built in Korea. At 37 mpg highway, the Aveo gives Chevy dealers something to fight new cars like the Nissan Versa and the Honda Fit. Chevrolet-badged Daewoos are taking Europe and most of the world by storm. GM's firesale purchase of cash-strapped Daewoo has turned out to bee the smartest financial move of the Wagoner era.

Overall, the General put on a good show at the fair. It's clear that GM is making improvements. Ultimately time will tell whether the improvements will come in time to save the company.
Delphi Day of Destiny Delayed
Deadline to Reject Union Contracts is Sept. 18

For about the thousandth time,the bankruptcy court has granted Delphi Corp. an extension to the deadline to accept or reject its union contracts. Now the deadline is September 18th.

The extended deadline comes soon after Delphi's report that it lost $2.6 billion in the first half of this year. Of that amount, $1.9 billion was attributed to the cost of a buyout of senior unionized workers. More than 85% of those eligible to take the buyouts decided to cut bait & jump ship. Delphi estimates that its unionized workforce will be cut in half by the end of the year due to the buyouts. What's surprising to me is that Delphi's sales were strong, with a slight over-all improvement over last year.

Is General Motors the Next Mitsubishi?
Will 4 week promotion lead to $4 billion loss?

If there's one global automaker in worse trouble than General Motors, it's probably Mitsubishi. The banking system in Japan makes it harder for a company to fail, and Mitsubishi can that its good graces that that's true, because if it were a U.S. corporation, Mitsubishi would no longer be a going concern. Mitsubishi's biggest problems concerned sales that were artificially inflated by easy credit practices at Mitsubishi dealerships. By lending money to customers with poor track records, Mitsubishi set itself up for an extraordinary percentage of defaulted loans, repossessed cars and tumbling resale values.

Recent allegations point to a lessoning of credit standards for GMAC loans. I've seen reports on this from Robert Farago's, and in a Businessweek editorial by a former dealership credit manager named Ed Wallace. According to Wallace, in this summer's 0% interest promotion, GM offered buyers with A-E credit scores 0% interest for 72 months. According to Farago, the expected defaults from these loans were obscured by creative bookkeeping, but by taking on these bad risks, General Motors could end up taking a $4 billion hit to GM's bottom line.

Wednesday, August 16, 2006

The Blogification of Billy Jack

Happy belated 75th birthday to Tom Laughlin, the actor-writer-producer behind the movie Billy Jack and its sequels. Tom was born August 10, 2006. What has he been doing lately? He's been blogging against the Bush administration at, and he's been trying to raise funds to produce the third Billy Jack sequel, tentatively titled Billy Jack's Crusade to End the Iraq War and Restore America to Its Moral Purpose. Um, Tell us where you really stand, Tom.

Friday, August 11, 2006

Credit Counseling Industry Shocked by New Law
Not-For-Profit Credit Counselors a Doomed Species?

For years there has been broad discontent among legislators and administrators over the fraud and kickbacks between "not-for-profit" credit counseling companies and their very profitable affiliates.

Last week the Senate adopted H.R. 4, now called the Pension Protection Act of 2006. It's now going to President Bush, who has already indicated that he will sign it. Most of the public press over this law concerned impact on pension plans, but deep within the bill, there are provisions that will make it radically more difficult for debt management and credit counseling companies to maintain non-profit status. I'm linking an industry press release on the subject here.

Here is a summary of the relevant provisions of the new act according to the AADMO, the American Association of Debt Management Organizations:

The legislation would prohibit 501(c)(3) and 501(c)(4) tax-exempt status for a credit counseling agency unless it:

Â? provides credit counseling tailored to the specific needs of individuals

Â? does not make loans or negotiate making loans

Â? does not provide or charge for credit repair

Â? does not refuse service for the inability to pay or enroll in a DMP

Further, the credit counseling agency:

Â? must charge only "reasonable" fees

Â? must waive fees if the consumer is unable to pay

Â? except as permitted by state law, not charge a fee based on a percentage of the debt or payment

Â? except as permitted by state law, not charge a fee based on a percentage of the amount of the payment savings (actual or projected)

Â? must not have a board without broad community representation and who are not employed nor may benefit from the agencyÂ?s activities (based on certain criteria)

Â? must not own more than 35 percent of Â?back-endÂ? services

Â? must not pay for referrals or be paid for referrals

The language does include specific requirements solely for 501(c)(3) agencies. This includes:

Â? The organization cannot not solicit contributions from consumers during the initial counseling process or while the consumer is receiving services from the organization.

Â? The aggregate revenues of the organization which are from payments of creditors of consumers of the organization and which are attributable to debt management plan services do not exceed the applicable percentage of the total revenues of the organization. The amount is 50 percent.

There is a Â?ramp-downÂ? mechanism for the aggregate revenue threshold of creditor contributions that goes into effect one year after the enactment of the law. That first year of the law when it is actually in effect provides that the threshold is 80 percent, 70 percent the next year, 60 percent the year after, then into the 50 percent level in perpetuity.

The legislation also declares Â?Debt Management Plan ServicesÂ? to be unrelated business income. The term Â?debt management plan servicesÂ? means services related to the repayment, consolidation, or restructuring of a consumerÂ?s debt, and includes the negotiation with creditors of lower interest rates, the waiver or reduction of fees, and the marketing and processing of debt management plans.

There are two consequences of this law that immediately come to my mind as a consumer attorney. If the credit counselors shift their structures to that of for-profit entities, they will be fair game under the Fair Debt Collection Practices Act, at least to the extent that they receive any funding from creditors. Secondly, and hopefully, many of these companies will just go out of business. I do hope that the few that provide statutorily required pre-bankruptcy counseling stay in business, but most of them won't be missed.

Thursday, August 10, 2006

Snakes on a Plane - the Novel

August 18, 2006 will become a date that will go down in history. It's the premiere of the movie Snakes on a Plane. For those of you who can't wait for the film, the novelization of the script is available on if you order today, you should even get the book before the movie comes out, and you can smile in smug satisfaction with a level of inside knowledge that others can just dream about.
Want to See Some Dirty Pictures?
"Wash Me" Art

An artist named Scott Wade specializes in artworks drawn into the dust on automobile rear windows. Big Fish - Little Pond. Link to coverage

Wednesday, August 09, 2006

Buyouts Improve GM's Balance Sheet $23 Billion

As reported by the Detroit News, GM got a jolt of financial good news for a change. Thanks to better-than-expected impact of buyouts and other restructuring on GM's future obligations for pension and healthcare costs, GM is looking at liabilities decreased by $23 billion.

Who knows whether this will be enough to raise the general's credit rating. Also, there's not much impact on current cash flow, but every little bit helps.

Monday, August 07, 2006

From the Looky What I can Do Lurlene! File:
Merry Go Round Plus Motorcycle

Say, you're not strong enough to spin a playground merry go round fast enough to fling your child to certain death? Do what this character did on, hook the merry go round up to a motorcycle and people will be flinging everywhere.

It reminds me of when I was a kid, the toy soldiers would be strapped to the platter of the player. The good interrogator questioned them on 16 rpm. The bad guy used 45 rpm. How about 78 rpm? That was for when questioning was over.

The other game was to put all the characters on the turntable. The last one to remain was the winner. Apparently the guy in this video found a way to do this in real life.

BP to Shut Down Alaska Pipeline

BP to Shut Down Alaska Oil Field - Cutting US Oil Supply 8%
Is it time to think about Gas Rationing?

Thanks to corrosion in the oil pipelines, BP is going to cut off supplies from its Prudhoe Bay field in Alaska while it conducts further inspections and repairs. The duration of the disruption has not been announced. Prudhoe Bay supplies about 8% of the oil supply to the United States. Prices hit $76.00 per barrel on the announcement and may go higher. There are signs of further supply disruptions and uncertainty in Nigeria and Iran. Also, output from Mexico may not match expectations. More bad news from Alaska might be forthcoming.

Since oil companies are already making record profits, and there are signs of supply shortfalls with more supply cutbacks pending, should we start considering gas rationing? No one likes rationing, but at least if gas was rationed, the profits gained through "black market" or even authorized trading of rationed shares would be spread broader throughout the US economy rather than going into the hands of oil companies or unfriendly states.

Friday, August 04, 2006

Cristiano K-O'ed by Kamikaze Critter

It wasn't just the elk heart that caused a problem at Elkhart Lake race track, it was the whole freaking elk, or deer or whatever.

Race Driver Cristiano da Matta suffered severe head injuries when his car struck a deer while practicing for the Champcar race in Elkhart Lake Wisconsin. As of mid-day today, he was still in the hospital. s a racing fan my thoughts and prayers go with him.

It seems like every race you hear a driver complaining about bad luck. In my book having a deer run out in front of you on the race track is the epitome of bad luck. Video of the Week
Knights of the Round Table - in Legos(tm)

The Knights of the Round Table song from Monty Python and the Holy Grail performed by Lego(tm) characters. On second thought, let's not go there, it is a silly place.
Ford: Bad News all over the Place

Ford managed most of the year to keep itself out of the news while GM took all the bad headlines. Now bad news is piling in from all angles. First, Ford not only issued a quarterly loss report, it then revised the statement and doubled the loss. Secondly, Ford recalled over a million vehicles for cruise control problems. Next, Toyota took the #2 sales slot away from Ford. Finally, General Motors announced its redesigned full-sized pickup trucks. Ford's F-150 pickup is its #1 seller (actually the industry's #1 seller), but sales of pickups are down about 36% industry-wide this year. If Ford loses market share to GM and to Toyota (redesigned Tacoma due early 2007), Ford could be in a world of hurt. today came out with a Ford Deathwatch article to go along with the long-running GM Deathwatch series.

There is a bit of good news, Toyota reported higher profits for the quarter, $4.3 billion in operating income. Toyota now has a market value of three times the combined value of GM, Ford, and DaimlerChrysler. I said it was good news, I didn't say for whom.

I want to add a personal note to all this. Yesterday, I was at the Indianapolis Ford (make that Visteon, no make that Automotive Components Holdings, LLC) plant for their annual "Health Fair". The snacks were delicious. They included corndogs, mini-corndogs, White Castle hamburgers, big cookies, and movie-theater popcorn. These healthful treats no doubt lowered Ford's medical expenses enough to ensure profits this year, next year and beyond.

Somebody sent me the URL of a blog called This blog deals with credit, debt collection and bankruptcy. At first blush, it's quite good.

Wednesday, July 26, 2006

What size are them wheels

"What Size are Them Wheels?"
How Pick-up Truck Owners Pick Their Trucks

Gas is over $3.00 per gallon, and probably will stay that way for the foreseeable future, but pick-up drivers see a sliver of the world in front of them. "What size are them wheels?" is the question posed by a patron who saw a preview of the new Chevrolet Silverado.

While switching channels last night I ran into a country music concert sponsored by Chevrolet. Chevrolet's marketing seems to be geared to the LCD, the Lowest Caucasian Denominator.

The Fall that Never Was

Traditionally August is the time that we see previews of the next model-year cars, with the model year beginning in September. That's not how it's shaping up this year. Most of the important 2007 models have already been introduced. Many, if not most, of the carryover models are already shipping as 2007s. The changes in carry-overmodels seem to be fewer than usual. In short, the fall new-car season will begin and end with a wimper. Those few 2007 models that have not already been introduced will straggle in, mostly during the 4th quarter.

Note from the Blogmaster:

It's going to be quiet for about the next week or so while I get caught up on some other stuff. There's not too much going on in the car world right now anyway, GM might announce that they made money in the past two months, but don't be mislead, after reporting a huge charge down like they did in the last period, it's not hard to follow it up with a short term profit, it's all a matter of when you take the charges. If there's anything earth-shattering, I'll put a post together, but otherwise, just enjoy a week of summer.

Friday, July 21, 2006

Dodge Caliber vs. Hyundai Azera

Dodge Caliber vs. Hyundai Azera

In a review of the Dodge Caliber R/T, DC enthusiast site,, draws an interesting comparison between the Dodge Caliber and the Hyundai Azera.

Standard, the R/T comes with a host of options, including side curtain front and rear airbags, four wheel antilock disc brakes, power windows, rear defroster, keyless remote, power mirrors, rear window wiper/washer, automatic power locks, cruise, air, CD with wheel-mounted controls, tilt-wheel, fog lamps, and 18" aluminum wheels (no, they really don't have to be that big, but people like the look of big wheels.) That, with all wheel drive, comes to $19,985 including destination - or about the same price as the first Neon SRT-4. Our test car had the $910 leather package with heated front seats and lumbar adjustment, the $400 convenience group with tire pressure monitor (showing each tire separately), compass and thermometer, auto-dimming rear view mirror, and garage door opener; the $400 MusicGate; $750 sunroof; and $700 for the chrome finish on the wheels. The total was $23,145, or about $1,000 less than the Hyundai Azera we tested last week, the one that accelerated like a bat out of, well, you know, and felt like a Lexus, with lots of room for everyone and not much of a gas mileage punishment compared with the Caliber R/T AWD. Admittedly, the Azera didn't look like an SUV, and it didn't have all wheel drive.

The Dodge Caliber is flying off the dealer lots as fast as they come in. DaimlerChrysler is making over 15,000 calibers per month and selling every one it can make. It only goes to show that image is everything. The Caliber is small-ish, but it is not small; and it certainly isn't light. Its fuel economy is good for an SUV, but no better than many full-size cars. Thanks to the lack of discounts due to demand, the Caliber isn't particularly cheap. I drove a mid-range Caliber SXT a few months ago, and I found it to be decent. On the other hand, I much preferred the Mercury Milan that I drove soon afterwards. The Milan cost about the same as the Caliber (and now with incentives would likely be priced lower), but the Milan looked better, rode better, was quicker, more comfortable, better equipped and got better gas mileage. The Milan doesn't look like an SUV, though.

2007 Chrysler Pacifica

Also at is a detailed write-up on the 2007 Chrysler Pacifica. This is the first major refreshening of the Pacifica and comes about 3 1/2 years after the model was originally introduced. The big news is the introduction of a new 6 speed automatic transmission. This transmission should soon make its way through the product line, though it appears that the minivans, the models that need it the most, will be among the last to receive it. The transmission is due to be installed on the completely redesigned 2008 minivans. The 2007 Pacifica also is the first vehicle to receive a new 4.0 liter V-6. At 255 horsepower, the 4.0 liter isn't much more powerful than the 10 year old 3.5 liter design that it replaces. Chrysler says the 4.0 liter has a broader torque curve.

The Pacifica fills a similar niche to the new-for-2007 GM crossover SUVs. The Pacifica, though no light-weight, is 200-300 lbs lighter and may be cheaper when comparably equipped.

Monday, July 17, 2006

Funny Video of the Week: The History of Dance
Flying Cars in History:
The Moller Disco Jet

I've posted regarding the Moller SkyCar several times. No news to report on that front, by the way. I was sent a link to information about a previous Paul Moller flying car project, the Discojet, circa 1974. Fullscale production of the Discojet was to have begun December 1976. That's funny, with 30 years of production, you'd think we'd see more of them.
Holden Statesman & Caprice

The 2007 Model year is shaping up to be underwhelming for the U.S. arm of General Motors (more on that in later posts), but it is a big year for Holden, GM's Australian arm. Holden is introducing a brand new version of its flagship sedan, the Holden Statesman AND a longer wheelbased version called the Holden Caprice. These are large, rear-wheel-drive sedans. The Statesman may end up being the basis for a RWD Chevrolet Impala, and the Caprice may end up being a Chevrolet Caprice. The new Holdens go on sale in September. Here's the link.

Saturday, July 15, 2006

90 Day Review For GM Merger

90 Day Review Period for GM Merger

Rick Wagoner and Carlos Ghosen have agreed on a 90 day confidential review period to examine a potential merger or other combination between the firms. The review period will probably not result in a concrete merger proposal, but could result in a no-go decision. When I imagine reviewing GM's financial condition, I immediately think of Heisenberg's uncertainty principle, which, paraphrased, states that you can't know the location of an object and its speed at the same time. A snapshot of GM's finances means nothing if you can't tell how the business is changing.

Monday, July 10, 2006

Juan Pablo Montoya to become a good old boy?

JPM is moving to NASCAR, it's official.
Caddyshack in 30 Seconds

Has it really been 26 years since Caddyshack came out? To honor that cinema classic, it is critically important to take 30 seconds out of your busy schedule to see the movie acted out in 30 seconds by bunnies. Here it is.

Friday, July 07, 2006

Conspiracy Theory Rock - The Video

Last year, I posted about that the Robert Smigel video that NBC didn't want you to see. Conspiracy Theory Rock, a parody of ABC's Schoolhouse Rock series. At that time I did not know anyplace that you could find the actual video. Since then, posting of old videos on the web has exploded, and the video is available at right here. If this link is dead when you click it, just search around a bit.

Whatever Happened to Ken Jennings.

Here's his blog. In the blog you can find out about his favorite sheep farming movie of all time. (Back in my days at dear old Purdue, we had a joke: Did you hear that the Animal Science people at Purdue discovered a new use for sheep? Yeah, wool.) The Jennings blog also includes his thoughts on how the ubiquity of Google searches is affecting the viability of trivia matches. He also plugs his book Brainiac, which comes out in September. Most importantly, he's selling his big, giant head.
Rent a BMW 325 for $12.75
Zipcar breaks the rules of the Auto Rental Business

Yep. Do it here. The catch? That's $12.75 per hour. But still, I'd pay $12.75 for an hour in a Bimmer. How about $10.75 for a Mini? Sounds like fun. Zipcar rents cars by the hour in several major cities including Washington D.C. and Boston. You register for a "Zipcard" online, then you pick up a car on the street in the assigned place drive it for a while, then return it. No check in or check out. Zipcar touts this as a way to avoid owning an unnecessary car in an urban area.

You can even rent a Toyota Prius as the carpundit did. He hated it. Even though it's hard to buy a Prius at any price, you can rent it at Zipcar for $8.75 per hour.

Thursday, July 06, 2006

3.5 Reasons Why GM is in Trouble
Toyotas Leading Engine is Best and Cheapest to Make posted an article about how Toyota has used innovative manufacturing techniques to half the manufacturing costs of their advanced 3.5 liter V-6 engine. The cost of this MADE-IN-THE-USA 3.5 liter engine is $1000 per engine according to the article, half of the previous costs. Although the engine is cheap to build, it provides excellent power and fuel economy. In the full-sized Avalon, the engine provides 280 horsepower, yet the car gets 31 mpg highway. The 268 horsepower version in the Rav4 moves the SUV to 0-60 in 6.8 seconds, better than some muscle cars, yet produced tested overall fuel economy of 22 mpg in a Consumer Reports test, only 1 mpg less than the four-cylinder version, and comparable to many mainstream passenger cars.

Toyota then produces this engine in quantity and the engine provides a competitive advantage for the Avalon. Camry and Rav4. I suspect that the engine will find its way into the Highlander, Solara and Sienna soon.

Several years ago GM split its V-6 engines into two lines. Value engines and feature engines. The value engines are descendants of GM's old V-6 engines and are based on a overhead valve or "cam in block" design. The feature engines are dual overhead cam (like the Toyota engine) and are generally modern, but available only on higher priced models. Still, the "feature" GM 3.6-liter V-6 makes less power than the mass-market version of the Toyota 3.5.

GM moved production of much of its value V-6 line to China because of high manufacturing costs in the United States. It is ironic that Toyota is building better engines for less cost in the United States. Trevor Hofmann, the author of the article elaborates on GM's failure to compete in the V-6 technology arena:

Putting this into context, Toyota has not only managed to halve the cost of its most popular six-cylinder engine, but the very fact this same engine is used in so many vehicles will, through economies of scale, increase Toyotas profitability overall. Compare this to rival General Motors, the worlds largest automaker and one that looks as if it will soon be passed by the Japanese giant for overall global sales, which makes so many engines V6 engines that its difficult to keep track of them all. A lesson could be learned, with the General producing a variety of antiquated overhead-valve engines with only 3-valves per cylinder, measuring 3.4-, 3.5-, 3.8- and 3.9-liters in displacement, plus a supercharged 3.8-liter version in its Pontiac Grand Prix. Only Cadillacs 3.6-liter V6 boasts four-valve per cylinder and dual overhead cam technology, an engine also found in Buicks top-line LaCrosse. To complicate things even further, it could be argued that GMs most sophisticated V6 is the 3.5-liter mill found in the top-line Saturn VUE, but the fact that its nothing less than Hondas superb Accord V6 is no doubt embarrassing to the Detroit-based automakers execs.

The question that General Motors should be asking itself is, why make a total of six V6 engines and borrow another from Honda, adding complexity and resultant cost to the automakers bottom line, when the only truly competitive GM V6 to Toyotas 3.5, or for that matter Hondas 3.5-, Nissans 3.5-, Hyundais 3.3- and 3.8-, or Fords all-new 3.5-liter V6, is the 3.6-liter unit only available in the Cadillac CTS, SRX and STS, plus the LaCrosse? Wouldn't it be simpler, more efficient and therefore potentially cheaper to make one extremely good V6 engine, rather than five that dont really measure up to the competition?

Wednesday, July 05, 2006

June Sales Mixed
Car Sales up - Trucks Down

The traditional domestic automakers were hampered by a continued decline of the truck market. Car and crossover sales were generally good across brands, but trucks and truck-based SUV trucks were down.

For General Motors, the news was mixed. GM spinmeisters were happy to say that GM had the best month of the year in number of units sold. The press still reported that GM sales were down almost 26% from the same period last year. You remember last year don't you? That's the year GM lost $10 billion.

There were clear winners and losers. Suzuki was the big winner, with sales up 38% thanks to a redesigned Grand Vitara. (Too bad GM just divested itself of Suzuki stock.) Saab was the big loser with sales down 50%. Saab only sold 3,295 cars in the U.S. last month. That's about a fourth of DaimlerChrysler's Dodge Caliber sales alone. GM is keeping Saab. On the other hand, Pontiac sales were up 12% thanks to an expansion of the G6 line. Buick sales were down almost 37% What's up with that? The Lacrosse is just two years old, and the Lucerne is just finishing its first year.

The biggest winner was Toyota which continues to steamroll over the industry with a 16% sales increase. Contrary to the industry pattern. Toyota's truck and car sales were both up, although I have a hunch that truck sales were boosted by the Rav4 crossover, which might as well be a car.

Here's the scorecard from

Monday, July 03, 2006


I only have a few minutes to update today. Let's see how much I can get done in 10 minutes

Gettelfinger to Join DC Board

UAW President Ron Gettelfinger is set to join the supervisory board of DaimlerChrysler. In Germany, trade union officers are often on the board of the companies their unions serve. Perhaps that accounts for the 28 hour/week workweek.

Honda CRX Spy Photos & More from The Hollywood Extra

Vince Burlapp at always seems to have some spy photos & information on upcoming cars that nobody else has -- especially when it comes to Hondas. Click here for the latest. Check out the busy text display in the Dodge Challenger instrument panel concept.

How to do everything Better

In retrospect, it wasn't a good idea to make the space shuttle out of styrofoam.

Robert Farago on GM-Renault-Nissan

You might expect that Robert Farago would have something to say about the proposed GM-Renault-Nissan get together. Yep. Here is his latest General Motors Deathwatch post. He suggests that the timing and nature of the proposal could be a ploy by Kirk Kerkorian to get GM's stock price up. Of course, it only makes a difference if Kerkorian sells, and there's no indication that he's selling.

From a factual standpoint, Farago mentions that GMAC has loosened its underwriting for new car buyers, offering new buyers 0% financing even with 580 credit scores. He doesn't say where he came by this information. It's good news if you have a 580 credit score. It's bad news if you (Cerebus) are buying GM's paper. I guess TPTB at GM believe that, with Dan Quayle in charge, Cerebus will go for anything.

Out of time. Have a happy 4th.

Friday, June 30, 2006

Renault-Nissan to Buy Stake In GM?

Kirk Kerkorian's Tracienda company, a large minority investor in General Motors, has sent a letter to General Motors conveying an indication of interest by Renault-Nissan to buy a "significant minority interest" in General Motors. So is this a sign of a turn-around for General Motors, or a sign that the vultures have started circling the carcass to pick off the juicy bits? Perhaps it's a little of both.

What would the combination look like? Though the letter speaks of synergies between the two companies, both companies are so diversified now that I doubt the synergies would justify a full fledged merger. Moreover, Would Renault-Nissan risk sinking from GM's liabilities? Of course not. Nissan-Renault would not risk anything it couldn't afford to lose. Instead, the likely short term agreements would involve R-N purchasing a single digit percentage of GM's stock, probably a new class of stock created just for this purpose. The stock sale would be accompanied by distribution agreements, cooperation on component parts and technology sharing. These agreements would put Renault-Nissan in a position to buy off choice technology in the event of a General Motors bankruptcy. In a best case scenario (best for R-N anyway), GM would go bankrupt and Renault-Nissan would submit a Chapter 11 plan to give a significant amount of money to otherwise-stiffed creditors in exchange for wiping out all unfavorable contracts and operations, not to mention wiping out all existing shareholder equity in the process. Still, the rank and file workers would probably come out better in this scenario than other post-bankruptcy scenarios because only with a single company picking up most of the pieces is there any chance of revival of any entity that even bears a passing resemblance to the old General Motors.

Assuming GM did not go bankrupt, what would Renault-Nissan get out of the deal? As big as the combined Renault-Nissan enterprise is, General Motors is larger, with a broader product line and broader distribution. Renault has been looking for North American distribution for some time now, and a GM agreement could be the ticket. Nissan and Renault have no presence in heavy trucks over much of the world, whereas GM is a leader. In the recent past, GM has scored a home run with its purchase of Daewoo. Renault could piggy-back on Daewoo. GM's distribution network in 2nd tier markets such as Canada, Australia and most of Latin America is stronger than Renault/Nissan's.

What would GM get out of the deal? Mainly money, money and time. Renault and Nissan have some technology that would be useful. Nissan has a 3.5 liter engine that is more powerful and cheaper to produce than the comparable GM 3.6. Nissan affiliate, Jatco, is the largest maker of CVT transmissions. GM would also get access to Carlos Ghosn, the turnaround specialist who took a basket-case Nissan and turned it into the most profitable automaker in the world.

Where does the UAW figure in this? Good question. I don't know. In theory, the UAW could try to use the deal to get into one or more of the domestic Nissan facilities. I don't see Nissan agreeing to that. More likely, the UAW could negotiate to have Renault models "domesticated" in an otherwise idle GM plant. When it comes down to it, any plan that increases the odds of survival of General Motors is beneficial to the UAW and the retirees who rely on General Motors for their healthcare and other benefits.

Overall, I think there is room for a win-win agreement here, and I wouldn't be surprised if they get a deal done. Will a deal be enough to save General Motors? We'll see.

Thursday, June 29, 2006

Ford Backs Out of Hybrid Promise

Bill Ford Retracts Hybrid Promise

Bill Ford has publicly retracted his promise that Ford Mo.Co. will produce 250,000 hybrid vehicles by 2010. He attributes this change to other technologies that promise similar energy savings. This follows his earlier retracted promise in 2000 that Ford's SUV fleet would be 25% more efficient in 2005. I've decided the surest way to get rich isto have Bill Ford publicly promise NOT to give me $10,000,000. I figure that if I can get him to say it, my odds of winding up with the dough look pretty good.

Wednesday, June 28, 2006

Smart ForTwo Coming in 2008
Penske Dealerships to have exclusive

DaimlerChrysler has made it official. They plan to start selling the Smart ForTwo, the two-seat Smart car, in the United States in 2007 or 2008. United Automotive Group, Inc., the dealership chain headed by car legend Roger Penske, will have the exclusive rights to sell the cars in the US.

Two questions remain. Will Rick Mears be the developmental driver? Will they come with the Marlboro paintjob?

Here is the page from the Smart website with video of crash tests. Despite its small size, the Smart ForTwo is a safe car.

Before you Make the Loan

A Simple Way to Avoid Most Mortgage Fraud Cases

The Consumer Law Committee of The Bar Association of Metropolitan St. Louis has come up with a form that it distributes to consumers who are contemplating taking out a mortgage loan. The form is called "Before You Make the Loan" Checklist, and it is available online here.

You know how mortgage brokers just present unwitting borrowers with reams of documents to sign? The concept of this checklist is to have the consumers ask the mortgage brokers a series of questions, and have the BROKER sign the form with the answers, kind of "turn about is fair play". I can imagine a broker being aghast that a lowly consumer would actually make a broker sign off on the representations made to close the loan.

I suggest that you bookmark this form, and if you have a client come to you with questions about a mortgage loan, download this form and give it to the borrowers.