Monday, December 31, 2007

Plural of Prius?

Thetruthaboutcars.com has an interesting post about the correct plural of the word Prius, using correct Latin grammar of course. Here's a tidbit.

Previously, on "You Need To Get A Life," Trib author Jan Freeman declared that the appropriate term for more than one Toyota Prius was "Prioria." Reader Christopher Casey took exception, kinda. "You were right that Prius is the neuter nominative/accusative singular of the adjective prior, but the plural forms of the word - which means 'earlier, better, more important'- would be Priora, not Prioria." Freeman rang-up Harry Mount, author of "Carpe Diem" (a.k.a. "Latin isn't half as dull as you think it is. More like a quarter"). "Yes, it's Priora," he told Freeman, "because it's neuter plural. But if you cheated a bit and made the car masculine or feminine - and I do think of cars as female - then it would be Priores. And Priores has nice undertones of grandness - Virgil used it to mean 'forefathers' or 'ancestors.'


And people cal Latin a dead language, hah!

I am using this post about Latin Grammar as an excuse to post a clip of Monty Python's Life of Brian which covers a similar topic.

Friday, December 21, 2007


Nardelli Puts Chrysler Engineers on Double Secret Probation

According to Autoblog.com (where I borrowed the picture) via the Wall Street Journal (where I initially read the article)Chrysler CEO Bob Nardelli, aka Dean Vernon Nardelli, has put Chrysler Engineers on double secret probation after repeatedly turning out crappy products that are threatening the continued existence of the company. Apparently, Stephen Feinberg, the mysterious supervillian that heads Cerburus,is leaning on Dean Bob because the company that Cerburus got for free is going to lose over a billion dollars this year.$1.6 billion specifically. Unless Chrysler can come up with new products that don't exist, and/or single-handedly change the business cycle of the United States economy, Chrysler will lose similar amounts of money next year.

How bad is the Chrysler financial picture? Here's a quote from the WSJ article above that allegedly came from a meeting that Mr. Nardelli had with Chrysler employees:

"Someone asked me, 'Are we bankrupt?'" Mr. Nardelli said at the meeting. "Technically, no. Operationally, yes. The only thing that keeps us from going into bankruptcy is the $10 billion investors entrusted us with."


Wait, there's more . . .

Mr. Nardelli arrived to find Chrysler's vehicle sales and cost-savings efforts were falling well short of their targets. Some models had faults such as cheap plastic interiors and noisy rides. He learned that Chrysler badly lags behind on fuel-saving technologies and will have to spend billions to catch up. Worse, the mortgage crisis and slowing economy mean U.S. auto sales are likely to fall next year to their lowest level in 10 years.



And more . . .

He liked the new Jeep Grand Cherokee, but also saw Chrysler's product line had many serious weak spots. Riding the Sebring convertible, "I found the wind noise totally unacceptable and bordering on offensive at speeds of 80 mph," he wrote in a terse email to Chrysler's top designer, Trevor Creed. Griping about the cheap plastic of its interior, he added, "I sure hope that as we go forward, we don't punish the customer by thrifting the interior to meet a cost target."


The article also that there is a "crash program" to replace the Sebring, which has been a failure from day one. A 5 minute test-drive of the Sebring last year caused me to immediately sell my DaimlerChrysler stock, and in my opinion the Sebring may end up being the car that kills Chrysler. I have no doubt that the Sebring had some bearing in Daimler's decision to cut Chrysler loose.

Nardelli says it is important for Chrysler to sell assets to generate cash. The problem is that Chrysler only has what assets Daimler chose to give away to Cerburus in the first place. Nardelli hopes to generate about a billion dollars in asset sales even if those sales result in paper losses.

For those in my reading public with short attention spans, I remind you that Mr. Nardelli said that but for the $10 billion in assets that "investors" invested in Chryslerberus, the company would be bankrupt. In 2007, the losses will be $1.6 billion. In 2008, let's call it a billion. By 2010, according to the recently concluded UAW contract, Chrysler is supposed to contribute $8.8 billion to the retiree VEBA account. Where is that money supposed to come from? Where is Chrysler supposed to get the capital it needs for new product development? Sure, some product development money is budgeted from current revenue; but Chrysler's problem is that it has not been generating new product often enough, and those that have been entering production have not been good enough to stem the tide.

So, that's why Chrysler engineers are on double-secret probation. They've got to pull a proverbial rabbit out of their hat. Either they come up with a killer product in the next year, or Chrysler stops operating as an independent automaker.

Tuesday, December 18, 2007

Next up: More Buyouts for GM Workers

The Detroit News reports that General Motors is trying to implement a new buyout program aimed at reducing the number of high-seniority UAW workers. The General is facing greater pressure to cut costs because sales have been slipping in recently, and the outlook over the near-term does not look good due to overall economic conditions, especially the housing slump.

The buyout would be similar to the one implemented in 2006 when workers received $35,000 to $140,000 in lump sum payments. Many but not all of the bought-out workers would be replaced by new workers in the lower tier of the two-tier contract that GM negotiated with the UAW this fall. According to the Detroit news, implementation of the new buyout plan has been slowed because the two-tier structure has not fully been implemented. The two-tier structure is being set up on a plant-by-plant basis.

Sunday, December 16, 2007

Youtube Video of the Day
Jesse Jackson Reads Green Eggs and Ham

Here's something I've been looking for for a long time. it's a clip of Jesse Jackson reading Dr. Seuss's book, Green Eggs & Ham shortly after Seuss's death in 1991. I suspect that for some time, people had been noticing the similarities in rhythm between Green Eggs & Jackson's speaking style. Rev. Jackson responds by reading a deadpan-rendition of the Seuss classic.

Friday, December 14, 2007

Senate Passes Craptastic Fuel Economy Bill

The United States Senate passed a bill that mandates average fuel economy for each automaker at 35 mpg by 2020. Unfortunately, to get the deal to go through, so many compromises were made that there may be very little effect on US energy consumption. The bill retains separate standards for trucks and cars. This provision in the current law contributed to the rise of SUVs as substitutes for station wagons. It also resulted in cars like the PT Cruiser being classified as "trucks" to subsidize gas guzzlers in the product line. The bill also retained credits for flex-fuel capable vehicles even if those vehicles never run on alternative fuels.

An earlier version of the bill included $25-35 billion in loan guarantees for automakers to use to revamp and retool older factories to manufacture greener cars. This was stripped from the version that passed at the demand of Republican senators.

The energy bill is expected to go to the House and pass in that chamber. President Bush threatened to veto an earlier version, a version that included alternative fuel credits and taxes on windfall oil company profits. Those provisions have been stripped, and the President might just sign this one. For more on the bill, here's a link to the Detroit Free Press article.

Personally, I think there is a place for CAFE type fuel economy mandates, but that such mandates should not be the core of energy policy. If you want to reduce total fuel consumption, the efficient way to do it is to tax fuel or actually ration fuel. Rationing can be economically efficient if rations can be freely traded. CAFE standards that simply increase miles per gallon do not necessarily decrease gasoline usage. A person who switches from a 20-mpg car to a 25-mpg car saves money that he/she might decide to use by driving 25% more. In fact, collectively, the miles we drive per year has been going up far faster than the rate at which our vehicles have been improving their MPG. Unless driving (or heating your house etc.) is made more expensive, the economic incentive for conservation will be watered down.

Tuesday, December 11, 2007

Youtube video of the day
Deposition Civility - Texas-style




Thanks to Jack K. for the link.

Friday, December 07, 2007

Youtube Video of the Day:
Stopping Terrorist Washing Machines


It seems that terrorists have been hiding in washing machines carefully camouflaged in Iraq. Luckily our troops are on top of things, and have developed tactics to take out the evildoers. Witness below:

Thursday, December 06, 2007

Toyota's Violin-Playing Robot

Let's say you're Toyota. You're the biggest automotive company in the world. Your stock is valued at ten times that of General Motors, if not more, and your cars move out the door as soon as they hit the dealer. What do you do with your money? Answer: you build a violin-playing robot.



Unlike Honda, which named its humanoid robot "Aismo", Toyota stuck with the memorable name "Violin-Playing Robot". They should have had the robot make its debut in Carnegie Hall. That way, when a reporter asked how the robot got to Carnegie Hall, the PR hack could say "practice, practice, practice."

In response to Toyota's display of technological wizardry, General Motors announced a "mild robot", a kazoo-playing hairdryer.

This is a great opportunity to recycle some old violin jokes.

What's the difference between a robot violinist and a dog? The dog knows when to quit scratching.

How do you get two robot violinists to play in unison? Shoot one of them.

For more violin jokes, click here.

Here's a youtube video of the Honda robot fighting the Toyota robot. Or so I'm told.



Thanks to Ken W. For the heads-up.

Wednesday, December 05, 2007

From the Cars-we-can't-buy File
Ford Focus 2.0 TDCI Titanium


This fall brought a redo of the 8 year old Ford Focus. The automotive press writers almost uniformly panned the new car, not because it’s bad per se, but because it’s not as good as the European Focus. Ford says that the US market would not pay the additional cost that is built into the European model. Nevertheless, Mazda sells its platform mate of the European Focus, the Mazda3, built in high-wage Hiroshima, Japan for at or around its sticker price, usually a couple grand more than the Ford Focus. Ford’s Volvo brand sells its version, the C-30, built in Sweeden, for $25,000 to $30,000 here in the States.

What’s so great about the European Focus? It handles and rides great. There is a diverse range of engine options, including two diesels, with displacements of 1.8 liter and a 2.0 liter respectively. The modern 2.0 liter turbo diesel in the TDCi Titanium Version, the model tested by Britain’s Car magazine, is rated at 134 bhp and 251 lb./ft torque. It goes from 0-62 mph (0-100 km) in 9.3 seconds while returning 40-50 MPG. This compares to 28 MPG in 2.0 liter US version, a car with similar acceleration when fitted with a manual transmission. The model Car tested was dressed to the nines, with a fancy navigation system, deluxe wheels, yada yada yada. It looks more like an Audi A3 than a VW Golf.

How much for all this European goodness, only £18,345. According to Google’s currency converter, that’s $37,812 US dollars. For 30% more (or a year and a half more payments), you could buy the Mercedes E320 Bluetec, which will cradle you in luxury and give you close to 40 MPG along the way. Maybe Ford was right about the price.

Monday, December 03, 2007

Youtube Video of the Day:
The Accident Clinic


In 1992, before the show Friends, Jennifer Aniston was in a show called The Edge. The Edge came and went before most people realized it was on, but it had a great cast including Wayne Knight from Seinfeld and Julie Brown from "Everybody Run, the Homecoming Queen's Got a Gun". Since we might all be forced to go back to private practice one day, I thought I'd post this clip that describes how to run a personal injury practice.

Friday, November 30, 2007

RIP Evel Knievel
RIP Roger Smith


Motorcycle Daredevil Evel Knievel died today at age 69. Coincidentally, former GM CEO Roger Smith, the Roger of Michael Moore's Roger & Me, also died. Roger was 82.

I don't have much to say about Roger Smith, but I think I'll miss Evel. Evel was certainly one-of-a-kind. Maybe not entirely, check out all the bike ramp videos on youtube.com. At least one of these kids will make it into adulthood.
Wall Street Lawyers Laid Off Due to Mortgage Mess
4 months Severence for 1st Year Associates


According to Legalweek.com, A 350 lawyer Wall Street firm is laying off up to 50 associates due to a slow down in the mortgage security market. The portion of the laid off associates who are 1st year associates will be offered 4-months severence pay.

This is only 4 months more severence pay than laid off UAW Legal Services lawyers make during slowdowns in the auto industry.
It's Here! Zoo Animals On Wheels on Youtube

Here's one of the funniest moments from Chris Elliot's early 90's show Get a Life, a send-up of Cats and all the other Lloyd Webber musicals of the era, Zoo Animals on Wheels. Whatch this before they take it down.

Chrysler to Return to Profitability by 2010?
. . . Yeah, right . . . whatever . . .


Thetruthaboutcars.com is reporting that Chrysler LLC's VP of North American Sales, Steven Landry, stated in an informal conference that Chrysler planned to return to profitability in about two years. As a private company under Cerberus, Chrysler no longer has to report earnings publicly, so this may be the best guidance we get as to Chrysler's health. Even so, folks have a right to be sceptical. Mr. Landry suggested that Chrysler would lose about a billion dollars this year, would break even next year, and would be profitable the year after that.

The only way I can see that happening is if Cerberus-owned rental car companies start buying a whole lot more Chrysler vehicles. I definitely can't imagine the American public doing so. As far as passenger cars go, only two relatively low-volume models are set to be introduced during that time, the Dodge Challenger and Dodge Journey. As far as trucks are concerned, a new Ram pick-up will be introduced within the next year, but it will be going against relatively new trucks by GM and Toyota as well as a redesigned Ford F-Series truck. The F-Series is Ford's do or die model, so Ford isn't just going to roll over and let Chrysler take market share. The Chinese-made compact has apparently not even been fully designed yet, so it's not in the two-year time frame. As far as upgrades to new models are concerned, the Phoenix V-6 engines will at best be available in limited quantities in 2010, and plant to produce efficient dual clutch automatic transmission is still being built.

If I were running Chrysler, I'd try to initiate talks with Hyundai for some sort of combination. Despite greatly improved cars, Hyundai has not had correspondingly increased market share. The problem may lie in a dealership network that is not prepared to satisfy a larger number of customers either at the sales or service level. Hyundai's affilliate, Kia, has the same problem, but to a greater degree. Hyundai's product line complements Chrysler's. Hyundai is competitive in small cars where Chrysler has no presence. Hyundai has a fairly fresh lineup of crossover vehicles. Chrysler doesn't. Even though it uses the same 4-cylinder engine as the Chrysler Sebring, the Hyundai Sonata is a clearly superior car now, and it's set for a well-received facelift early 2008. Chrysler does not have the presence in trucks and off-road vehicles that Chrysler does, and Chrysler has a superior dealer network.

An alternative for Chrysler would be work a deal with Nissan/Renault. Renault would like to sell cars in the United States. Nissan and Renault have competitive small cars. The Atlima platform is very competitive. Although Nissan trucks have their fans, sales have been disappointing, and the same goes for sales of the Nissan Quest minivan. Nissan has top-notch engine technology on the shelf and ready to go, and as such, by combining with Nissan, Chrysler can kill the Phoenix engine project and not miss anything. The downside to a Renault/Nissan deal is that CEO Carlos Ghosn may not be interested. He's interested in a deal with a US automaker, but Ford or GM could make better partners. Both have stronger model line-ups internationally than Chrysler.

To save what's left of Chrysler in its current form, Chryslerberus needs to act quickly. Even more questionable than the notion that the company will be in the black by 2010 is the proposition that it will only lose a billion dollars in 2008. With high fuel prices expected to continue, things don't look good for Chrysler's current gas-guzzling line-up. Cerberus has already been hit hard by the subprime mortgage crisis, and since it doesn't have a lot of capital tied up in Chrysler, I don't see it having the desire to tie up a lot of other capital to cover ongoing operational losses.

Monday, November 26, 2007

Sibling Rivalry - Round 1
2008 Chevrolet Malibu LT vs. 2008 Chevrolet Impala LT 3.9


The Chevrolet Impala is General Motors' best selling passenger car in the United States, with about 270,000 sold this year. That's about double what the outgoing Chevrolet Malibu sold.

The Impala has a lot going for it. It's roomy, comfortable, quiet, has a huge trunk, and it returns better than average fuel economy for its size, especially on the highway. These attributes make it a fleet and company car darling. At the insurance company where my sister works, the field adjusters screamed bloody murder when their Impalas were replaced by Dodge Stratuses (Stratii?), and I can't blame them.

On the other hand, the Impala's little brother, the Malibu, was known as a "get 'r done" mass transportation appliance, at least until this fall. That's when the 2008 redesigned Malibu arrived to great acclaim. The new Malibu actually has a longer wheelbase than the Impala, and comparably equipped, they weigh about the same. When equipped with V-6 engines at the LT level, the Malibu has slightly higher horsepower, but gets slightly lower fuel economy.

Which is the better deal? Take a look at Michael Karesh's excellent comparison site, truedelta.com. I ran a comparison that suggests that the $1500 rebate offered on the Impala gives the old workhorse a slight edge, but the two are close enough that intangibles could, and probably should control any buyer's decision.

Wednesday, November 21, 2007

Lessons in Doing the Impossible

Meet Bouncin' Dan, the Paddleball Man. I'm sure that people told him; "No Dan, you'll never amount to anything, bouncing that paddleball all day."

To which, he replied; "You'll see. I'm going to practice, practice, practice, until I'm the best paddleball bouncer in the world. Thousands of people will watch me and be amazed." Lo, as it turns out, Dan was right. Now he has the power to crush all the little-minded people who held him down.

Meet Valentine's Performing Pigs. People said it was daft to spend years trying to get a pig to jump through a hoop. And yet . . .

What does all this have to do with cars? I've heard a rumor that Chrysler President, Tom Lasorda heard about Valentine's success in getting pigs to move, so he asked for help selling the Chrysler Sebring.

Monday, November 19, 2007

Holy Fat Tom Cruise



It's been this way for several years. Every time I see Tom Cruise, it seems like he's just working that much harder to hold on to his leading man good looks and marketability. Let's face it, Tom, sooner or later, old man time will kick the shit out of you sooner or later, whether you are ready or not. Judging from this picture, Tom's time is up. Actually, if you believe Cinnematical.com, this is just make-up for a cameo in Ben Stiller's next movie, Tropic Thunder. Is it possible that just PART of it is make-up? Don't worry Tom, they'll still be macho roles for you as you age. They still have to make the movie version of Mike Myer's Middle-aged Man. Of course, there's always Captain Underpants. Tom, you probably know about Captain Underpants, if you didn't read the books to your kids, then Katie read them when she was a kid.

Friday, November 16, 2007

From the "Never Piss off A Federal Judge" File:
Will Deutsche Bank's Mistake mean Independence Day for Borrowers?




(Spoiler warning) There's a scene toward the end of the movie Independence Day, that President Bill Pullman and his gang find a way to defeat the massive alien ships that are attacking them. They defeat the ship that is hovering over Area 51, and spread the word so that air units all over the globe can defeat alien ships worldwide. In the past couple weeks, consumer crusaders and courageous judges in Ohio have made some significant headway that could, in the long term result in fewer home foreclosures and a rationalization of the secondary mortgage market.

I always liked Federal Court. Partially it's because I never liked the "good old boy" feeling in state court, and partly it's because federal judges don't tolerate sloppy lawyering. The fact of the matter is, a lot of mortgage foreclosure law firms, work almost exclusively within the "good old boy" state court network, and they get sloppy. Now there are so many foreclosures in some areas that some mortgage firms are starting to file their foreclosures in federal court. That could be their undoing.

On October 31, 2007, Halloween, Ohio Federal District Court Judge Christopher A. Boyko must have worn his scary mask as far as lenders are concerned because he dismissed numerous foreclosure cases filed by Deutsche Bank on the grounds that the bank did not prove that they were proper assignees of the mortgage at the time the suit was filed. It's not so much what Judge Boyko did that was newsworthy, other judges have dismissed mortgages for the same reason in the past, it's the language that the judge used in dismissing the cases. One of the plaintiff's lawyers must have really pissed off the judge, because Honorable Judge Boyko pulled no punches in dressing down the lender's attorneys. Here's the text of the Judge's footnote 3, a footnote which might go down in judicial history as one of the classics of all time. Heck, it even made front page of the New York Times.

3 Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process. Typically, the homeowner who finds himself/herself in financial straits, fails to make the required mortgage payments and faces a foreclosure suit, is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel. Their focus is either, “how do I save my home,” or “if I have to give it up, I’ll simply leave and find somewhere else to live.”

In the meantime, the financial institutions or successors/assignees rush to foreclose, obtain a default judgment and then sit on the deed, avoiding responsibility for maintaining the property while reaping the financial benefits of interest running on a judgment. The financial institutions know the law charges the one with title (still the homeowner) with maintaining the property.

There is no doubt every decision made by a financial institution in the foreclosure process is driven by money. And the legal work which flows from winning the financial institution’s favor is highly lucrative. There is nothing improper or wrong with financial institutions or law firms making a profit — to the contrary , they should be rewarded for sound business and legal practices. However, unchallenged by underfinanced opponents, the institutions worry less about jurisdictional requirements and more about maximizing returns. Unlike the focus of financial institutions, the federal courts must act as gatekeepers, assuring that only those who meet diversity and standing requirements are allowed to pass through.

Counsel for the institutions are not without legal argument to support their position, but their arguments fall woefully short of justifying their premature filings, and utterly fail to satisfy their standing and jurisdictional burdens. The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the Court to stop them at the gate.

The Court will illustrate in simple terms its decision: “Fluidity of the market” — “X” dollars, “contractual arrangements between institutions and counsel” — “X” dollars, “purchasing mortgages in bulk and securitizing” — “X” dollars, “rush to file, slow to record after judgment” — “X” dollars, “the jurisdictional integrity of United States District Court” —“Priceless.”


In re
Foreclosure Cases, No. 1:07CV2282, et al., slip op. (N.D. Ohio Oct. 31, 2007) (Boyko, J.)

In one fell swoop, Judge Boyko didn't just dismiss cases for failure to comply with the rule that you show you are a holder of a note or a real party at interest, he attacked the good old boy network for their acquiescence in allowing such pleadings and condoning sloppy filing by foreclosure attorneys. already there are some signs that other courts are picking up on this and taking this further. Just yesterday, in the Western District of Ohio,Dayton Division, In Re Foreclosure Cases, 3:07-cv-00286, Judge Thomas Rose, citing Judge Boyko's decision, looked at the 27 mortgage foreclosure cases filed in his district, and determined that 26 of them were facially deficient in alleging standing (based upon the plaintiff not owning the obligation upon filing.) Judge Rose gave the plaintiffs 30 days to show proof of standing at the time the case was filed. The judge also broadly threatened sanctions if the attorneys could not prove the oversight was not willful.

If you are a consumer attorney defending a foreclosure case, you should acquaint your self with your state laws regarding assignments of mortgage and demand strict compliance by the lender.

What I've been seeing in the non-foreclosure context that most of my cases are in is that lenders heretofore have been unwilling to do workouts on delinquent mortgages (usually subprime and predatory) because the ownership of the loan and the servicing are split. The servicer has no ability to negotiate the loan. The owner often can't even be determined. The mortgage securitization business may change dramatically hereafter. Hopefully, we'll be able to identify an entity who actually owns the loan and has a willingness to work something out.

For companies that buy home mortgage loans that are already in default and demand payment and bring foreclosure actions without proof of ownership, these companies may be setting themselves up to Fair Debt Collection Practices Act and Abuse of Process lawsuits, often on a class action basis.

DRAFT
Ford Contract Approved by Landslide
The Union was in a Giving Mood


Ford's UAW locals quietly and nearly uniformly approved the recently-negotiated collective bargaining agreement. About 78% of voting members approved the contract.

Surprisingly, the Ford agreement passed much more easily than recent contracts at General Motors and Chrysler even though the Ford workers are giving up significantly more than their comrades who work for the other automakers.

The Detroit News
finally shook loose some of the details on the contract and posted them in Thursday's edition. Like the GM deal, the Ford contract includes a retiree healthcare VEBA (trust). The deal also includes a 2-tier wage scale. The Ford deal apparently includes UAW carrots for job creation and retention and much more flexibility on work rules and job classifications.

The VEBA: Unlike GM, Ford did not pony up a large amount of new cash to fund the plan. Ford will get rid of $23.7 billion in liabilities with a $13.6 billion trust. New money contributions will only be about $3 billion. Six billion will come from notes issued by Ford, in other words, IOUs, and the remainder will consist of assets already pegged to retiree healthcare. If the Detroit News article and my 1 AM math are correct, only $7.6 billion of the VEBA, about a third of the entire actuarial liability will be backed by real cash assets, and because the VEBA won't be fully operational until 2009, the money doesn't have to be contributed now. I think Wimpy said it best: "I will gladly repay you Tuesday for a hamburger today."

The Wage Scale:
Up to 20% of Ford's workforce can be made up of lower-tier workers who start at $14.20 per hour. In addition, Ford can hire "in-sourced" workers at the lower wage without counting toward the 20% cap. UAW Workers other than the lowest 20% will not get a "baseline" wage increase. The article is silent about bonuses.

Job Security:
Ford agreed to keep open 5 facilities that were scheduled to be closed in Ford's "Way Forward" plan. Also Ford agreed not to build a "low cost" North American (read that - Mexican) facility during the contract. Ford agreed to invest in flexible manufacturing for its existing facilities. The UAW is doing its part in that area by agreeing to reduce skilled labor job classifications from 350 to 22.

In summary,
the UAW gave about as much as you could expect it to give. It's now up to Ford management to cure its tendency to mis-spend product development and marketing resources and stop dumping money into black holes like Jaguar.

Thursday, November 15, 2007

2008 Dodge Journey
When the Lights go out in the city . . .

Dodge issued a press-release in August about a new midsized crossovever vehicle that is set to debut early next year. After I read it, I started a blog entry, but didn't have time to finish it. It's ominous that after reading the release, I couldn't remember the name of the vehicle. I few days later, I went back to blog again, and I still couldn't remember the name of the vehicle. I came back to it today, and once again - blank. It's ominous for Chrysler that even after multiple exposures, someone in their target market can't remember the name of their vehicle.

For the first vehicle released after the Cerberus buyout of Chrysler, it's appropriate that the company has picked the name "Journey" for its midsized CUV. I perused the titles of singles by the band Journey, and there are a number that you could apply to the abandonment of Chrysler by Daimler AG.

I'll be alright without you,
Separate Ways,
Still they ride. . .

My favorite: Who's crying now? That would be the Cerberus shareholders, because at first blush, the Dodge Journey seems like an also ran right out of the starting gate.

The Journey is based on a version of the platform of the Dodge Avenger, but stretched about 5 inches to leave room for a "limited use" 3rd row seat. In other words, the Journey is the station wagon version of the Avenger. The Journey apparently is designed for the slot in the Dodge line-up formerly occupied by the short-wheeelbased version of theDodge Caravan minivan. It's a family hauler shorter than and (they hope) more stylish than a minivan. In the market, the Journey directly competes with the Ford Taurus X (formerly the Freestyle) and sandwiches between the Toyota Rav4 and Highlander.


I find it interesting that Dodge did not release the curb weight of the Journey. In my experience, detailed press releases omit curb weight when the vehicle is heavy and bloated compared to its competitors. Since no Dodge vehicles are light weight, it's not a good sign. Ford did a good job keeping the weight down on its Freestyle, but even with a curb weight lower than its two-row Edge, and a performance-maximizing CVT transmission, het three-row Freestyle was criticized for its performance with a 200 horsepower 3.0 liter V-6. The Journey's two lower trim levels get by with engines that deliver less power than that of the outgoing Ford Freestyle, specifically 2.4 liter 4-cylinder and 2.7 liter 6-cylinder powerplants, both coupled to an outdated 4-speed automatic transmission. Only the 3.5 liter V-6 (six-speed auto) appears to be competitive in terms of engine-transmission pairing.


There are some nice interior touches in the Journey. There are kid-friendly middle row seats with optional integrated booster seats, and under-floor storage similar to the "stow" part of the "stow -n- go" minivan seating. The Avenger offers Chrysler's heated & cooled drink holders and Mygig(tm) entertainment system.


The Avenger will apparently be built in Mexico, initially sharing capacity with, and eventually replacing, the PT Cruiser. That means that UAW-LSP employees can't drive it to work because it is a non-uaw built vehicle.


Here's a link to more detailed information on the Chrysler buff site Allpar.com.
2009 Honda FCX Clarity
The First Fuel Cell Production Car?


This week, at the L.A. Auto Show, Honda unveiled the FCX Clarity show car. This car looks very similar to the FCX that was first shown as a concept car in 2005. Last year, Honda showed a drivable version. This year's car is a production-ready prototype, with a finished interior and refined mechanicals. Honda expects to lease several hundred of these cars starting mid-2008. By that time, General Motors may have 100 fuel-cell powered Chevrolet Equinox CUVs on the road, but these are more proof-of-concept vehicles than true production cars.

What makes the FCX unique is that it is powered by a fuel cell coupled to a lithium-ion battery pack. The fuel cell provides for a range of 270 miles on nine pounds of hydrogen. The energy-efficient car is claimed to yield the equivalent of 68 mpg. The hydrogen is packed in carbon fiber storage tanks compressed to 5,000 psi pressure. Note that General Motors' Equinox fuel cell pilot vehicles store their hydrogen at 10,000 psi, so perhaps through technology sharing there is the possibility of doubling the unrefueled range without increasing the space required by the hydrogen.

Where will customers get their hydrogen? Well, the first leases will be in southern California where hydrogen refueling stations are already in place. In the future, the hydrogen could come from your own home. Simultaneously with the FCX Clarity, Honda announced the Experimental Home Energy station IV. The Home Energy Station, a natural gas fueled hydrogen reformer, was designed to provide hydrogen for a vehicle for "daily use" plus a household's daily electricity requirement. Actually, the home energy station is both a natural gas reformer and a 5-kilowatt residential fuel cell with capability to serve as a back-up generator -- or even a cogenerator if it's hooked into the power grid.

Honda plans to lease the FCX Clarity for $600/month including maintenance and collision insurance. I currently lease a $25,000 vehicle for $535 per month not including insurance or maintenance, so Honda's price is quite competitive for a high tech vehicle with serious green street cred. Among the Hollywood elite, once the FCX hits the streets, the Toyota Prius will be (in the words of Hillary Duff) "So Yesterday."

Source (unless otherwise noted): Autoblog Green
Consumer Groups Unite to Try to Defeat Predatory Lending Bill

I don't think it would be an exageration to say that policy wonks at the various prominent consumer groups feel stabbed in the back by H.R 3915, the predatory lending bill which was supposed to go up for vote today in the House. (As far as I can tell at this time, there was no vote; however I can't confirm that.) Anyway, below is a joint press release issued by the consumer groups.



Community Legal Services of Philadelphia * Consumer Action * Consumer Justice Law Center (Wis.) * Cuyahoga County Foreclosure Prevention Program (Ohio) * Empire Justice Center (N.Y.) * Financial Protection Law Center (N.C.) * Gateway Legal Services (Mo.) * Housing Research and Advocacy Center (Ohio) * Jacksonville Area Legal Aid, Inc. (Fla.) * Legal Services (N.J.) * Mountain State Justice (W. Va.) * National Association of Consumer Advocates * National Consumer Bankruptcy Litigation Center * National Consumer Law Center * National People's Action * National Training and Information Center * Neighborhood Economic Development Advocacy Project (N.Y.) * NC Justice Center (N.C.) * Public Citizen * U.S. Public Interest Research Group * Virginia Poverty Law Center





For Immediate Release: Contact: NCLC: Alys Cohen/Margot Saunders (202) 452-6252

Nov. 15, 2007 Public Citizen: Angela Bradbery (202) 588-7741

Consumer Action: Linda Sherry (202) 544-3088

U.S. PIRG: Ed Mierzwinski (202) 546-9707

Legal Services (N.J.): David McMillin (732) 572-9100

Mountain State Justice (W.Va.): Dan Hedges (304) 344-5564

NC Justice Center: Al Ripley (919) 274-8245



Coalition of Consumer and Anti-Poverty Groups Opposes Predatory Mortgage Bill



Weak Remedies and Pre-emption of State Law Would Harm Homeowners Facing Foreclosure



WASHINGTON, D.C. – A bill designed to address abuses in the lending market would leave consumers worse off than if Congress did nothing at all, a group of national and local consumer and poverty law organizations told lawmakers today. The group is urging lawmakers to defeat H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, scheduled for a vote today in the U.S. House of Representatives. In a letter sent to the Hill, the organizations decry the bill’s insulation of Wall Street and the removal of key state protections that borrowers use to protect their homes.



“At a moment when the economy is being rocked by the subprime mortgage crisis and when predatory loans are sending millions of Americans into foreclosure, it is shocking that the House of Representatives is protecting Wall Street, instead of the consumers who are at risk of losing their homes,” said Joan Claybrook, president of Public Citizen.

“This bill represents a net loss to consumers because it replaces strong state protections with a weak, untested federal scheme,” said Alys Cohen, staff attorney with the National Consumer Law Center. “We appreciate the authors’ efforts to combat predatory lending, but compromises made to attract wider support make the bill an empty promise.”



The bill is designed to address serious abuses in the lending market, including the making of loans that homeowners cannot afford to repay; prepayment penalties that lock borrowers into high-cost loans; binding mandatory arbitration clauses that deprive homeowners of access to court; and other protections against high-cost loans.



But because it combines weak federal remedies with pre-emption of existing state-law remedies, H.R. 3915 would actually harm consumers. The measure lacks meaningful remedies that borrowers need to save their homes. Worse still, the bill contains a state-law pre-emption provision, which would entirely undercut the value of the bill’s protections. The bill would eliminate homeowners’ ability to raise state-law claims—claims they may already bring under current law—against the actual owners of their loans. If homeowners cannot sue the owners of the loans, they will have no relief available at all because, in most cases, the original issuers of the mortgage have sold the loan and, in many cases, have gone bankrupt or are otherwise out of the picture.



“We cannot support a bill that eliminates strong state-law remedies for the victims of predatory mortgage abuses,” said Ed Mierzwinski, consumer program director of U.S. PIRG. “Consumers need these protections now more than and ever, and intentionally or not, this federal law creates rights without remedies.”



In the letter sent today to Reps. Barney Frank (D-Mass.) and Spencer Bachus (R-Ala.), chairman and ranking member of the House Financial Services Committee respectively, the groups noted that the bill creates multiple hoops through which the homeowner has to jump to obtain any redress. The remedies in the bill are limited to borrowers already in foreclosure and safe harbors in the bill provide little or no incentive for the market to change.



“While we commend the bill’s sponsors for seeking to address serious abuses in the mortgage industry, it’s clear that lawmakers are not listening to consumers and the groups they trust to represent their interests,” said Linda Sherry, director of national priorities at Consumer Action. “Congress has ignored suggestions for a stronger bill that contains real remedies to protect consumers, while giving in to demands from the industry to weaken the bill.”



Added Ira Rheingold, executive director of the National Association of Consumer Advocates, “We hope that if the bill passes the House, the Senate will be able to retain the bill’s strengths while ensuring that it has real remedies that give life to the protections. Communities are being devastated by lending abuses. The market needs to be changed now.”



“While we appreciate the good effort in Congress devoted to addressing the terrible problem of predatory lending, this bill will pre-empt much stronger state laws, like those in North Carolina,” said Al Ripley, director of the Consumer Action Network at the North Carolina Justice Center. “Unfortunately, homeowners in North Carolina and in the rest of the nation will find themselves with fewer protections from predatory mortgages if the bill in its current form passes.”



Groups signing onto the letter are: Community Legal Services of Philadelphia, Consumer Action, Consumer Justice Law Center (Wis.), Cuyahoga County Foreclosure Prevention Program (Ohio), Empire Justice Center (N.Y.), Financial Protection Law Center (N.C.), Gateway Legal Services (Mo.), Housing Research and Advocacy Center (Ohio), Jacksonville Area Legal Aid, Inc. (Fla.), Legal Services (N.J.), Mountain State Justice (W. Va.), National Association of Consumer Advocates, National Consumer Bankruptcy Litigation Center, National Consumer Law Center, National People’s Action, National Training and Information Center, Neighborhood Economic Development Advocacy Project (N.Y.), NC Justice Center (N.C.), Public Citizen, U.S. Public Interest Research Group, Virginia Poverty Law Center.


For more information, see:

http://www.nclc.org/issues/predatory_mortgage/content/HR_3915_opposition_letter.pdf.
House to Vote On Predatory Lending Bill


Today the U.S. House of Representatives is scheduled to vote on Rep. Barney Frank's predatory lending bill HR-3915. As predatory lending bills go, it's a pretty good one, unfortunately, what we really need is an ANTI-predatory lending bill. It appears that most democratic and some republican representatives are expected to vote for the bill. Most consumer advocate groups and most lending industry groups oppose the bill, but for different reasons.

The consumer groups, such as Public Citizen, PIRG, and the National Association of Consumer Advocates oppose the bill because it creates a ceiling, not a floor, for consumer protection. It increases federal preemption over tough state laws, when preemption should decrease, and it creates a safe haven for assignees of mortgage obligations. If assignees would have paid attention to the crap they were buying, we would have never had this problem to begin with.

Here's a link to a critique by Alan White in the Public Citizen Consumer Protection blog.

Note- this is me talking not 3357 - I strongly urge you to call, write or email your representative, and let your representative know that you want an anti-predatory lending bill, and not a predatory lending bill, and HR-3915 just doesn't cut it.

Monday, November 12, 2007

Opel Zafira Runs the Nürburgring

Here's a video from Youtube of the Opel Zafira running Germany's famed Nürburgring road course. The video says that the Zafira is the world's fastest compact van.

Chevrolet to Get Michigan-made Version of Opel Zafira

Jalopnik, among other sites, is reporting that General Motors is planning on building a version of the European Opel Zafira mini-minivan in Michigan, starting as early as 2009. (I have my doubts whether they'll meet that on-sale date.) Even though Saturn is the new Americanized Opel, Chevrolet is set to get the first version, with Saturn to follow.

If you don't know about the Zafira, it's a 4-cylinder 3-row MPV, similar to the Mazda5 and the Kia Rondo, but with what appears to be more flexible seating and more uplevel content options (at least in Europe). I first blogged about the Zafira in 2005.

I've always been intrieged by the Zafira, especially after seeing this commercial with the Zafira being dropped out of an airplane, with freefall skydivers entering the car in mid-air. It would be interesting to see a small 3-row peoplemover powered by GM's 2.0-liter direct-injection, turbocharged Ecotech engine coupled with a dual-clutch gearbox. They might just pry money out of my hands with one of those.

Wednesday, November 07, 2007

From the Insult to Injury File:
Toyota Reports Record Quarterly income


Toyota announced a record quarterly profit equivalent to $8 billion (US). Toyota set quarterly records in revenue, profit and number of vehicles sold.
From the "Is this anything?" file
GM Takes $39 Billion Noncash Charge


There are lies, damn lies, and General Motors accounting. Yesterday I read that General Motors announced that it would report a $39 billion quarterly loss. That loss is dominated by a $37 billion noncash charge against assets based on a writedown of tax-loss carryforwards held as assets. The company stated that the company's cash position and business prospects weren't affected, and the market yawned, with the stock going down less than two dollars in afterhours training. Even this morning, there has been no Exodus from the stock.

The news stories that came out yesterday were garbage, basically. There was no analysis or scrutiny of the company's statement. It was no coincidence that General Motors released the statement on an election day, a near holiday with many journalists off or covering other things. Cash or no cash, $39 billion is still real money to me, so I'll tell you what I make out of this, whether it is a hat, a broach or a pterodactyl.

So far, the Detroit Free Press has done the best at putting this in perspective. The full GM spokeshole press release is here at jalopnik.com. Cash or no cash, this is the largest quarterly loss in automotive history. As I write this, GM stock is trading for about $34 and some change per share. This quarterly loss alone amounts to $68.90 per share according to freep.com.

It may be true that the paper loss does not affect GM's cash position. (Although the company's cash hord did go down $2.5 billion in the quarter.) It may also be true that GM's business prospects are unaffected. That doesn't mean that this is insignificant, especially if you are a GM shareholder. It's also important if you are a GM employee who now has a vested interest in GM stock thanks to your brand new VEBA.

To explain the significance, you have to understand the asset that GM wrote down. General Motors held on its balance sheet credits for past losses that it could use as credits to reduce future tax liability. According to Generally Accepted Accounting Practices, this type of paper asset must have some reasonable possibility of being converted into a useful cash type asset at some reasonable point of time in the future, otherwise this asset should not be given the same status as a real asset, such as cash. The write-down by General Motors is a tacit admission that they have no reasonable prospects of making profits in the near term that would make this asset useful. In other words, the company is saying that it really doesn't have the foggiest idea when it's going to be profitable again. Why announce the change now? Did the accountants suddenly get religion? Or did they realize that the leg's going to have to be cut off anyway, so they might as well bite the bullet.

I believe that General Motors may be salvagable, but virtually none of the future earnings of the company will go to current shareholders, no matter what. For the company to be successful, it will have to recapitalize at some point, and that will mean issuing new stock. Already there will likely be dilution of ownership based on the VEBA.

Speaking of VEBA, the UAW was sold a deal based upon GM's books during the negotiations. For the company's financial officer to announce suddenly that $39 billion on the books was an imaginary asset is highly suspicious, and it may end up being the subject of litigation. I'm sure the professionals that the UAW hired to look at the books realized that there was $37 billion of bullshit sitting in GM's asset column, but the union members were never explicitly told that their retirement healthcare was going to be financed to a large part based on company stock, and the company stock is supported by imaginary but worthless assets equal to twice the stock price.

In the wake of all this it is almost anticlimactic to mention that $1.6 billion of GM's quarterly losses came from losses at GMAC. It's not a record or anything, but it's half of what it would cost to develop a new car model, and there's no guarantee that things are going to be better next quarter.

If you have any investment in GM stock, what are you doing still reading this? you need to get busy. If you want to read more about this, I'm sure Robert Farago at thetruthaboutcars.com will have a new GM Deathwatch momentarily.

Monday, November 05, 2007

From the Contract Demands file:
Restroom Videogames


You never know what you absolutely gotta have until you see it. Now that I've seen it, I must have it. It's a urinal driving game. The computer monitor is at eye-level above the urinal, and you control your car by aiming your stream. We must have this. It must be written into our next contract. We can make sure that the game is adapted for the ladies. Those who are flow-challenged can start with a handicap. According to Engadget, this game is banned in Belgium, so you know it has to be good.
Tentative Ford Deal

Late Friday, Ford and the UAW came to tentative contract terms. The deal is similar in concept to the Chrysler and GM deals. The contract includes a VEBA and a two-tier wage structure. On balance, the UAW may have given up more concessions to Ford, however, Ford (supposedly) agreed to keep open two plants that were originally slated to close.

There is an interesting difference in the VEBA. Ford is only putting 40% of the funds in cash, compared to 54% in the GM deal and 59% for Chrysler. Ford agreed to invest the remainder of the cash in its factories to make them capable of producing more than one model. Corrected 12/47 AM 11/5/2007
Source: Detroit News

Friday, November 02, 2007

Youtube Video of the Day
Because you Just can't have enough Jimmy Osmond


Here's a clip from the Donny and Marie Show with Donny in Keith Emerson mode, wailing on two stacks of synthesizers, with Jimmy Osmond and Jay Osmond exchanging drum solos with Desi Arnez, Jr. I don't see how I missed this one the first time around.

Friday Mish Mash #1
Edmunds Inside Line - Drives the 2008 Chevrolet Malibu


All positives except for steering. It's heavy though. The V-6 weighed in at 3,649 lbs, about as heavy as an old Pontiac Aztek, and within a cheese sandwich of its bigger brother, the Impala.

Friday Mish Mash #2
Meet Porky the Corolla


Speaking of weight, the 2009 Toyota Corolla is taking some heat over at Autoblog Green for gaining weight and losing fuel economy. To put things in perspective, the Corolla Matrix with the Camry's 2.4 liter engine has a highway EPA rating of 29, just one MPG more than the full-sized Ford Taurus, which has about a hundred horsepower advantage over the Matrix. Automakers are never going to make progress in Corporate Average Fuel Economy if every iteration of a model gains 200 to 400 lbs. (I'm looking at you Honda Accord.)

Friday Mish Mash #3
Businessweek's Cars for bargain hunters


Businessweek compared the actual selling prices to the Mfr list prices of various models and came up with the 20 biggest automotive "bargains"; by bargains, they mean the cars that sell for the highest percentage off sticker price figuring in incentives. By this measure Chrysler LLC comes out the big winner with 8 models in the top 20. The Jeep Commander is selling for 29% off sticker price, and the Dodge Ram 1500 is selling for 28% off sticker price. Though Businessweek is the source of the of the information, the presentation and commentary at thetruthaboutcars.com is better.
Ford within Hours of Tentative Contract

Autonews.com has flashed a story that Ford and the UAW are within hours of a tentative collective bargaining agreement. Earlier speculation was that Ford bargaining would be hurt by tummult at Chrysler over thousands of layoffs the week after their contract with UAW was approved.

According to Autonews, Ford agreed to outsource fewer non-manufacturing jobs than Chrysler or GM, including forklift drivers. Other provisions appear to be similar to the GM and chrysler pacts, including two-tier wage levels, VEBA plan for retiree benefits.

Thursday, November 01, 2007

New Holidays for Our Next Contract?

I'm always thinking ahead regarding our next contract. I just heard from a preacher for the Church of the SubGenius. Not that I'm ready to convert or anything, but I have to admit, they have lots of holidays that it would be great gravy if we could get these days off in our next contract negotiation. Here are the holidays (from the Wikipedia entry):

January 16 - The Night of the Lemur
January 24 - The Feast of St.Klaatu
February 16 - Cremation Wednesday
February 23 - The Feast of St.Monty Python
March 8 - The Feast of Weird Al Yankovic
March 17 - The Feast of the Blessed Leprechaun
March 28 - Palmistry Sunday
April 1 - The Feast of Saint Eris
April 13 - Saint Bill Hicks Day
April 15 - The Feast of Saint Dracula
May 6 - The Feast of Saint Guinness the Stout
May 31 - Desecration Day
June 1 - Yell "Fudge" at North American Cobras Day
June 22 - The Feast of Saint Kali
July 16 - The Display of the Embarrassing Swimsuits
July 17 - The Feast of Saint Caligula
August 1 - Drug Side-Effects Day
August 6 - The Dance of the Insensitive Bastards
September 1 - Start of the Holy Month of "Ramalamadingdong"
September 6 - Caesarean Section Day
September 20 - Yummy Kippers Day
October 9 - The Feast of Saint Attila
October 20 - The Feast of Saint Oliver the humanzee
November 10 - The Feast of Saint Cthulhu
November 19 - Hate for the Sake of Hating Day
December 9 - The Martyrdom of Saint Kenny
December 14 - Whiny Victimization/Co-Dependency Day
December 31 - The Feast of Saint Lucifer
Chryslerberus Announces 6000-7000 Job Cuts

Just a week after the UAW's contract with Chrysler was ratified, Chrysler, LLC announced plans to lay off 4,000 UAW members through shift reductions in Michigan, Illinois and Ohio. Earlier this week, Chrysler announced plans to lay off 1,000 salaried workers and 1,100 contract workers. Total job cuts in this round will amount approximately 6,000 workers (Detroit News) or 7,000 workers (Detroit Free Press). These cuts are part of an overall plan to cut the hourly workforce by 11,000 and the salaried workforce by 2,000. Most analysts think Cerberus's overall plan is to make Chrysler lean enough to make it an attractive aquisition candidate for another firm. In the past there has been speculation that prospective buyers could include Renault, General Motors or Magna International. Personally, I think the odds of General Motors buying Chrysler are about the same as the odds of me growing wings and flying home this afternoon. Renault would buy if the price was right. Magna seems to have a strange affinity to Chrysler, kind of like a moth attracted to a porchlight.


PT CRUISER LIVES - PT Convertible and Crossfire Die

In an addendum to yesterday's story about Chrysler's cancellation of several models. Yesterday I reported that the PT Cruiser was among the casualties. Autoblog reports today that only the PT Cruiser Convertible is being canned. The regular PT Cruiser Survives. The semi-Mercedes Chrysler Crossfire got caught in ints namesake, and it will disappear.
Patriots vs. Colts - Game of the Century?
Not even Cheney can Ruin this one


The Devil went down to Indy, he was looking for some attention to steal . . .

Dick Cheney is here in Indianapolis today, ostensibly to speak before an American Legion gathering, but really, he's here to bask in the attention surrounding the game between the undefeated New England Patriots and undefeated Indianapolis Colts that will be played on Sunday.

Two undefeated teams haven't met this late in the season since 1921. Statistically, the New England Patriots have dominated the teams that they've played by record-setting percentages, and many think the Patriots can go undefeated at 19-0, besting the undefeated 17-0 record of the 1972 Miami Dolphins. To do this, they'll have to get past the Superbowl-champion Colts, the team that rained on the Patriots' parade last year. Add to this a showdown between the two best quarterbacks of the current era, Tom Brady and Peyton Manning, and you have the script for the highest-rated regular season televised game in history.

The USA Today article linked here gives an excellent preview of Sunday's game, starting at 4:00 EST.

Wednesday, October 31, 2007

From the Something's Rotten in Denmark File:
Band Plays MAMA MIA on Beer Bottles


The Youtube video of the day, a band from Denmark plays Abba's Mama Mia on beer bottles. If there's any reason to quit your day job, this must be it. (Listen to the quality of the applause at the end of the song.)

I'm going to try to embed a picture link.

Tuesday, October 30, 2007

More on Cars We Can Drive to Work
Compact Cars and Compact SUVs


I got an e-mail that suggested my last post about cars we could drive to work was ambiguous. In that e-mail I just meant to list the traditional midsized family cars that we could drive to work. There are a few compacts that we can drive. (I'm going from memory here, not the official list. Check the official list before you plunk down your hard-earned dollars.)

Ford Focus - The 2008 Focus was redesigned to mixed reviews. Personally, I'd get a 2-year old used one. Use Yahoo Cars to find a 5-speed stick if you can drive one.

Pontiac Vibe/Toyota Matrix - These cars are twins under the skin. Both are due for a redesign next year. Wait if you can because they'll have the next generation Toyota engine technology. If you can't wait, the existing model is as good a commuter as anything else out there.

Chevrolet Cobalt/Pontiac G5 These cars are twins. I haven't driven them but I sat in them at the auto show. I found the cabin narrow and uncomfortable, but if you fit, they aren't bad cars.

Saturn Sky/Pontiac Solstice - Two seats no waiting. "Honey, I had to buy one to drive to work."

Dodge Caliber/Jeep Compass - Although they're technically compacts, you'll be luck to get 22-23 MPG in the real world or 27-28 on the highway. You'll do as well or better with any of the 4-cylinder midsized cars, with equal or better performance, not to mention better ride and handling.

Ford Escape/Mercury Mariner These compact SUVs are not particularly economical when you get the 6 cylinder engine. In fact, with the 6 and 4wd, you'll get about the same gas mileage as a minivan. Try the 4-cylinder FWD with the 5-speed manual transmission, it performs as well as the 6-cylinder with the automatic but you'll save a bunch on gas. If you really want to save on gas, go all the way and buy the Hybrid.

Chevrolet Equinox/Pontiac Torrent - Not really compact, but light-weight as SUVs go, these vehicles got spruced up for 2008 and deserve a look. They have more backseat legroom than other compact SUVs. The Equinox Sport gets the highpowered 3.6 liter V-6 but matched with the new 6-speed transmission, it should still get better than average MPG. The Equinox is larger than, but 400 lbs lighter than, the redesigned Saturn Vue.

Overall, if I was buying a UAW-Built car to commute to work in, I'd pick either a used 5-speed manual Ford Focus or Pontiac Vibe, or I'd get a two-year-old Chevrolet Malibu or Pontiac G6. If you can wait until early next year, the new Vibe should be a strong contender. The same could be said for the Chevrolet Malibu, Saturn Aura and Pontiac G6 with the 2.4 liter Ecotec engine and 6-speed automatic powertrain, but this combination won't be out until spring 08. Wait a little longer, and there'll be a slick new Mazda6.

For vehicles somewhat larger, check out the Dodge and Chrysler minivans (old or new), the Chevrolet Impala, the Ford Taurus and Taurus X, the Chrysler 300, and the GM Lambda Crossovers (Outlook, Enclave, Acadia). If you have some dough, the Cadillac CTS and the Lincoln MKZ look attractive, but you'll lose money every mile you drive them for work.
Chrysler to Cut Three Products - Maybe More
Are the Craptastic Sebring and Avenger Safe For Now?


According to the Detroit News, the Chrysler, LLC board, in its first meeting under CEO Bob Nardelli, plans to cut at least three slow selling models. On the chopping block are the Chrysler Pacifica, Chrysler PT Cruiser and Dodge Magnum. The Jeep Commander, a mega-SUV, may also be cut. Cutting the Pacifica, Magnum and PT Cruiser won't likely result in shut down of UAW final assembly plants because the Pacifica and Magnum are assembled in Canada, and the PT Cruiser is assembled in Mexico.

It is also expected that the board will spend time on the harsh critical reviews and lackluster public acceptance that greeted the Chrysler Sebring and Dodge Avenger midsized models. How ugly is the Chrysler Sebring? 35,600 Google hits and counting, up from 18,300 in August 2006As to the reviews: Here's what "Pulitzer Prize Winning" auto columnist Dan Neil had to say about the Chrysler Sebring Convertible in the L.A. Times:

Not just bad, but a veritable chalice of wretchedness, a rattling, thumping, lolling tragedy of a car, a summary indictment of Chrysler's recent management and its self-eradicating product planning, all cast in plastic worthy of a Chinese water pistol. The Sebring drop top does something I thought impossible: It makes me long for the exquisite craftsmanship of the Pontiac flipping G6.

Oh, and the Sebring Convertible is homely, too.


The Dodge Avenger has fared a little better, but not much. USA Today's car guy, James Healey found so many flaws in the test Avengers that he was provided, that Dodge was given unprecedented "equal time" to state what they have done to address the problems.

In the short term, it's not clear what can be done to address the Sebring and Avenger. Chrysler can't afford to drop them. They have nothing to replace them, unless they cut a deal with Mitsubishi to private-lable sell the Galant, but the Galant isn't really a class leader itself. What kills me about the Chrysler Sebring is that it's not even a good rental car. It only has a 13.6 cubic foot trunk. The Chrysler Sebring is a near-lock to be the top votegetter in thetruthaboutcars.com's "Ten Worst Automobiles 2008" competition. (The competition used to be the Ten Worst Automobiles Today, but there was big hairy uproar over the acronym, TWAT. Did they intend the controversy? You be the judge.)

IMHO, it was the Chrysler Sebring that convinced Daimler execs that Chrysler had to go at all costs. Daimler did not want to fund new product development at Chrysler, and Chrysler needed a lot of new product. Chrysler has no cars smaller than mid-size. The Dodge Caliber replaced the Neon, but the Caliber is the size and weight of a midsized car, and it needs a trick CVT transmission to get the MPG of a midsized car. For all the talk about selling Chinese Chery small cars as Dodges, there has been no commitment to a final design, and it remains to be seen if a Chinese manufacturer can build a car to American safety and quality standards, and if the cars can be built, whether American consumers will buy enough of them to constitute a profitable business. As far as SUVs and trucks are concerned, Chrysler's once-strong lineup is looking long in the tooth as other carmakers have targeted these areas and now have younger, fresher line-ups.

It's a true shame about the Sebring and Avenger, as UAW-Assembled midsized cars, they are two of a very few models that we can drive to work. The Ford Fusion and Mercury Milan have a reputation of being two reliable, well-performing midsizers, but both are currently assembled in Mexico. For us, that leaves the Saturn Aura, Chevrolet Malibu, Pontiac G6, and (surprisingly) the Mitsubishi Galant and Mazda6. I'm thinking about reviewing "cars we can drive to work" since more and more of us are facing extended commuting time as we are transferred to out-of-the way offices and work from multiple locations, and many of us need to shift to more economical transportation.

Friday, October 26, 2007

Brocktoon! Chrysler Contract comes down to Belvidere

The fate of the UAW/Chrysler contract comes down to the 3800 UAW employees in the Belvidere, Illinois plants. According to the Detroit News, with 56% of the already-cast votes in favor of the contract, it would take a nearly-unanimous "nay" vote at Belvidere for the contract to not be ratified. Are they underestimating the power of Brocktoon?

Thursday, October 25, 2007

Tide Turns in Favor of Chrysler Pact
3 of 4 locals approved contract yesterday


Large UAW locals in Warren Michigan and Sterling Heights, Illinois voted on the Chrysler/UAW contract, and 3 out of 4 of them approved the contract. According to the Baltimore Sun, results of the 4th local were not available at presstime.

The positive votes came just a day after workers in Kokomo, Indiana voted against the contract at about a 3/1 ratio.

If the trend holds, the contract will be approved by this weekend.

Tuesday, October 23, 2007

What's a "Rock Rental"?

No, it's not Scooby Doo answering the question: Who stared in Smokey and the Bandit? A Rock Rental is loaning out your car in exchange for crack cocaine. I don't know about you, but I've had several strange cases cross my desk over the years that involved bad things that happened when a client loaned his/her car to a person he/she hardly knew. This article about rock rentals from the Birmingham News via Autoblog.com goes a long way towards making sense of these incidents.
Ford Update

Ford and UAW are negotiating on their contract. The future of a number of Ford factories are at stake. From the outside looking in, it appears that Ford's future product plans are more firm than Chrysler's, but less firm than General Motors'. Here's a link to the Detroit News article.
Chrysler Update
Contract Might or Might Not Be Approved


This morning, the Detroit News reports that the member vote on the tentative Chrysler, LLC agreement with the UAW could go either way. Right now the approval folks have a narrow lead. More locals will be voting this week.
Interesting Blog of the Day
Masson's Blog


I stumbled upon an excellent blog by Lafayette attorney Doug Mason. Mason's Blog covers Indiana Law, state and local politics and (like most other blogs) whatever else catches his attention. He posts with amazing frequency, averaging more than a post a day. Despite the frequency of his posting, he doesn't just throw out a link (as I've been known to do), he adds his own insight and opinion. Among other things, his blog contains running commentary on the Indiana Law Update 2-day CLE that was held in September.

Monday, October 22, 2007

Back from South Carolina
"Shrinkage" is the Word of the Day


This past weekend was the annual meeting for representatives of AFSCME 3357. I did not take detailed notes of the meeting, and I don't have time now to get into it in depth, suffice it to say that in the past few years, the Plan and local 3357 membership has seen so much shrinkage that it makes George Costanza look like Mr. Ed. The shrinkage in the unionized U.S. auto industry has resulted in a corresponding decrease in the number of UAW Legal Services attorneys.

We're down to 104 attorneys in our local, about half of our peak. There are lots of offices that serve only retirees. Some offices are down to one or 1/2 a staff attorney. Like never before our members need to be jacks of all trades. Soon it may be the norm rather than the exception that each attorney needs to be able to handle every problem code.

While some things that were discussed can't be disclosed as a matter of competitive intelligence, all of the issues that are hot button in my office were raised and discussed. Quite a few attorneys with high seniority are now commuting long distances thanks to being laid off and bumping into new offices. It is becoming apparent (if it wasn't already) that "bumping" is no substitute for severance pay or buyout packages.

I also want to point out that almost all of the area reps at our meeting were high seniority folks. Low seniority attorneys need to get more active in the union for their own self-interest. Under the last contract, we received only a minor raise due to a new retiree healthcare plan. Given that you have to have 15 years seniority and an attained age of 61 or 62 to qualify, it is unlikely that the majority of our members will ever benefit from the retiree healthcare. You will be getting a questionnaire in the mail early next year asking you what issues you think are important going into the negotiations for next year's contract. You should take this questionnaire seriously. Take time and fill it out.

Wednesday, October 17, 2007

Renting a Car?
Where's the Gas Cap?


Autoblog has a discussion on how to tell where the gas cap is on an unfamiliar car. Here are some tips. First, look for an arrow next to the gas pump icon under the car's fuel gauge. If there isn't one, look at the direction the gas pump nozzle is pointing on the gas pump icon. If you follow these two rules you'll be right 90% of the time.
Consumer Reports Drops Camry from "Recommended" List
Ford's Quality improvement is "real and sustained"


Detnews.com (check out the snazzy new graphics) has posted a story stating that Consumer Reports magazine is dropping the V-6 version of the Toyota Camry from its "Recommended" list after owner reports suggested below average reliability for its redesigned 2007 model. Transmission problems were to blame for the Camry's fall. The 4wd version of the Tundra pick-up and AWD Lexus GS sedan also skidded to below-average. More critically to Toyota, at this point Consumer Reports will not give redesigned Toyota's a recommended rating based upon a presumption of reliability, a presumption that has long been touted as unfair by critics.

Whereas Toyota fell in Consumer Reports' rankings, Ford came out smelling like a rose. Ford's reliability ratings went up to a level where it is actually more competetive with Toyota and Honda than with GM and Chrysler. The Ford Fusion and Mercury Milan were touted by CR "most reliable" from their inception. The latest report confirms that this was no fluke, these models continue to be very reliable, and Fords as a group are doing well.

Monday, October 15, 2007

Breaking News
Chrysler Union Leaders Approve Contract


15 minutes ago, as I write this, just at the tail end of my lunch break, Chysler UAW leaders approved the tentative contract by a voice vote over the objections of a few dissenters. Most of the union reps did not see the contract until this morning. It is likely that few had the opportunity to read the whole thing. The contract must still be voted upon by the rank and file union members.
Weather in Myrtle Beach


The weather in Myrtle Beach, South Carolina is expected to be in the low 80's through this weekend. Have no fear non-attendees, your union representatives will be toiling in a windowless conference room for your benefit.
Ford Contract Proposal:
More Buyouts - Less VEBA


According to the Detroit News, the ongoing Ford-UAW contract will likely depart markedly from the "pattern" set by the GM deal. GM's VEBA doesn't kick in for two years. Ford doesn't have that kind of time, so Ford is expected to offer less and demand a faster phase-in for the VEBA. In exchange, Ford has put on the table a bonus structure that rewards union members for future performance in a manner that more closely mimics the incentives for management. Another round of buyouts is expected to allow the company to integrate 7,500 ex-Vistion employees.
GM Gets Praise for New Products, Especially Hybrids
Hybrid SUVs and Flex platform are Big Deals

Time magazine this week joined a chorus of praise for GM's recent and upcoming new products. Later this year, General Motors is expected to introduce a "two-mode" hybrid version of the GMC Yukon full-size SUV. The all-new hybrid system is reported to deliver (2008 scale) EPA ratings of 20 city and 22 highway, about a 40% increase in fuel economy. At the same time, the truck still has V-8 performance and can tow 6,000 lbs. The new Yukon comes hot on the heels of a redesigned Cadillac CTS that has received rave reviews and last year's hits, the Enclave/Outlook/Acadia 3-row crossover SUVs. Next on deck is a redesigned Chevrolet Malibu (and a freshened Pontiac G6) and a redesigned Pontiac Vibe.

The big hype will come in 2009 when the Chevrolet Volt is scheduled to appear. The Volt is a plug-in hybrid that uses lithium batteries. Even more radical is that the Volt will be the first car built on a new architecture, the Flex or E-Flex platform that can accommodate almost any power source, from batteries, to hybrid, to hydrogen fuel cell. Opel, GM's European division, even came up with a concept car called the Flextreme that craps Segways.

Judging from future product plans, GM is taking a "it ain't over till the fat lady sings" approach. Chrysler and Ford seem to be auditioning big women wearing viking helmets.
Union Politics may KO Chrysler Contract

The Chief of the UAW bargaining committee that negotiated the tentative contract with Chrysler, LLC. that was announced last week now says the contract isn't good enough, and he's lobbying union leaders to vote against it.

According to Bloomberg.com, the union official Bill Parker, from Sterling Heights, Michigan is in somewhat of a power struggle with union head Ron Gettelfinger, and he's urging union leaders to vote against the deal in a vote scheduled for today. His chief objection is that the contract does not have any of the future work guarantees that the GM contract includes. Also, there's no guarantee that temporary workers will be offered permanent status.

If I were a UAW member, both of these items would be a big deal to me. While I don't expect that Chrysler will cave on guaranteeing future cars for any given plant, it seems to me that they should give in on the point about the temporary workers.

As an outsider looking in, it seems to me that the UAW-GM negotiating team did an excellent job at not only striking the best deal available, but also working through the political problems to sell the contract to the rank and file. (Although I didn't post on the subject, the GM deal was approved last week by a comfortable margin, though locals at a few component plants (without future work guarantees) rejected the deal.) In comparison, the Chrysler deal seemed rushed. The five hour "strike" was a joke. Whereas strategic leaks prepared the way for a positive spin campaign for ratification, there was no such preparation in the Chrysler deal. Even now, I haven't seen a copy of the proposed "white paper" contract posted on the web, and if I were a Chrysler UAW member, I'd be suspicious that somebody is trying to put one over on me.

Tune in for more information.

Friday, October 12, 2007

UAW/Chrysler Have a Deal - A Secret One

If you blinked you missed the strike, which lasted all of about 5 hours on Wednesday. Now there's a tentative deal, but two days later, there's not much info available on what the deal includes. Here's a link to what the Detroit News has published, but don't feel like you have to click on it, because it doesn't say much. Yeah, there's a VEBA, but at 55-60% funding as opposed to the GM deal which funds at 70% if everything goes right. Yeah, there's a two-tier wage scale, but nobody is saying what those wages are. Yeah there are job guarantees, but not for any particular plant. For my UAW-LSP readers - what about legal services? No information.

I'm guessing the UAW has put a clamp on disclosure of the terms while they spin up the hype machine in anticipation of a ratification fight. There's no question the union had to give up substantial ground, and they were working from a weak bargaining position. The rank and file is not likely to be pleased. It looks to me though, that this fight may have been lost when Chrysler was spun off from Daimler Chrysler. The resulting entity was undercapitalized, with an aging product line and very few replacements in the product pipeline. Chryslerberus was not in a position to guarantee replacements for given plants when the replacements have not been designed or projected.

The Chrysler of 2007 looks a lot like the American Motors of the late 1970s. AMC was reduced to rebadging the Gremlin as the "Spirit" and putting 4WD on the Hornet and calling it the "Concord". In the end, they weren't fooling anybody. In 1979 AMC was purchased by Renault, which saw value in Jeep and wanted to enter the American market. Things didn't work out, and in 1987, Renault's interest in AMC was bought out by a resurgent Chrysler. Renault has been doing well in Europe in recent years and is looking to re-enter the U.S. market. It would be ironic if Cerebus sells Chrysler to Renault.

Wednesday, October 10, 2007

Could GM's VEBA be DOA?
Objections at the SEC to $4.4 Billion IOU


Workers and a retiree have filed objections at the Securities and Exchange Commission to the issuance of a $4.4 Billion "convertible note" that is a core part of the Voluntary Employees Benefit Agreement or VEBA that was negotiated with the UAW as a means to fund retiree health care. The objections cite failure to disclose the risks inherent in GM's financial condition, and the risk the note would be wortheless if GM files bankruptcy. According to the Detroit News, despite the objection the VEBA is likely to be approved by the US District Court in Detroit.
Chrysler Strike Deadline 11:00 AM Today

Collective bargaining between the UAW and Chrysler, LLC., is expected to continue right until the deadline for strike, 11:00 AM today. What's going to happen then is anybody's guess. Unlike the GM-UAW contract, there have not been leaks suggesting the parties are very close to a deal.

Chrysler dealers are awash in inventory for everything except the 2008 minivans. Chrysler has already scheduled temporary shutdowns for six plants. Just yesterday, Chrysler announced layoffs of thousands of white collar workers and contractors.

There is a very real possibility of a worst-case scenario for the UAW here. The UAW strikes. Cerebus then uses costs of a strike as a justification for shutting the company down and selling it off piecemeal, a strategy that many people have said has always been Cerebus's plan for the company. The retirees get whatever has been set aside already, nothing more. It seems to me that it would be better to just continue working under the current contract until the company threatened a lock-outm then negotiate on give-backs. What do I know, I'm just a lawyer.

Monday, October 08, 2007

Chrysler in the Crosshairs
UAW says contract or Strike by Wednesday


An interesting battle is shaping up between the UAW and Chrysler, LLC. The UAW set a deadline of Wednesday to either come up with a tentative contract or strike Chrysler. This will be the first contract under Cerberus management. Even though General Motors was fiscally overdrawn at the time of its contractual negotiations, GM could look forward to a fairly broad lineup of competitive new products in the pipeline. Chrysler is somewhat more solvent in today's dollars, but it's future product pipeline is really an empty cupboard. The prospect of a strike probably doesn't scare Cerberus too much. Even though we are only a month into the new model year, six plants are temporarily idled for lack of business. With Cerberus, the UAW will be dealing with private management who are very capable of, and possibly predisposed to, breaking up the company.

What can we expect from the new Chryslerberus contract? Expect lots of pressure on healthcare benefits for both active and retired workers. If there is a VEBA, you can expect that it will not be funded at the same level as the GM plan.

Friday, October 05, 2007

Restrictions on Medical and Dental Care in
GM/UAW Agreement


Even though the Union hosted 30 minute presentations and published a 22 page summary of its new tentative agreement with General Motors, apparently there wasn't sufficient time/space to fess up to significant (but not earthshaking) reductions in health and dental coverage. According to the Detroit Free Press at freep.com, PPO and HMO plans will be sharply limited. Under the new default plan, union members and their family will now have a $25.00 co-pay per doctor appointment, with five appointments per year per family. The article mensions that dental HMOs will be eliminated, but it does not state that dental coverage in general is eliminated.

Thursday, October 04, 2007

September Sales Grades:

Honda: A
GM: B-
Chrysler: C-
Ford: DDD


Auto sales in September were a mixed bag, but Honda scored its best month ever, with sales up 13.8% from last year. That's what a new Accord and blow-out deals on 07s will do for you. General Motors eked out a respectable 3.7% increase without undue incentive spending. Chrysler sales were down 1.5%, not too bad considering the new minivans hadn't hit the showrooms yet. Some troubling signs for the Chryslerberus folks, sophomore year sales of the Dodge Caliber and Jeep Compass were both down over 20%. Chrysler has scheduled two-weeks downtime for the Illinois plant that makes the Compass and Caliber.

The biggest loser was Ford with sales down 21%, a DOUBLE DIGIT DECLINE - DDD. Keep in mind, this is a decrease from 2006, a year when Ford lost over $12 billion. Ford would like to attribute the decrease in sales to a reduction in planned fleet sales. (The car division was down 45%.) Still, retail car sales were down more than 15%. The brand new Taurus (unlike the old Taurus which was selling briskly to fleets last year) seems to be glued to the dealer lots. Ford just upped the incentive from $500 to $1000 because sales are below the Five Hundred's anemic levels.

The bottom line is that Ford is just now starting to feel the full effects of years on skimping on new product design. With almost all cars on the market being at least "good", Ford loses out whenever a competitor introduces "better". Ford is at least a year away from the introduction of its new F150 pickup line. The only thing new between now and then is the new Focus, a car that has been criticized for being a mere facelift of the old one. As will be discussed in an upcoming post, Ford is the next company up for UAW contract talks. It's going to be a rough year for the blue oval.

Sources

http://www.nytimes.com/2007/10/03/business/03auto.html

http://www.autoblog.com/2007/10/02/by-the-numbers-september-2007/

http://www.detnews.com/apps/pbcs.dll/article?AID=/20071003/AUTO01/710030372/1148