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.