Scummy Companies of the Week:
TLG Great Fun & Chase Bank

After being a consumer lawyer for the better part of two decades, I'm surprised that I just received my first complaint about TLG Great Fun, because when I looked them up on the web

TLG Great-Fun (complaint! OR scam)

Google returned 961 hits.

When I added chase to the mix, the hit count was 159, but more on that later

What does TLG do that's so bad? TLG has a business model where it imposes monthly charges on consumer's credit cards, and the consumers repeatedly claim, they don't know how they got on there. The charges are for auto clubs, buyers clubs or something, but nobody seems to know what benefits these clubs really provide. This little enterprise has been going on under a variety of names for years. According to Wikipedia.org, until recently, the official name was Trilegiant Corp, but the current name of TLG is Affinion Corporation. Here's a link to the Wikipedia entry.

This is an operation that generates perhaps hundreds of millions of dollars in revenues for its owners, while at the same time delivering minuscule goods or services. So who owns this gold mine? I'm not sure, it was related to the Cendant Group, according to Consumeraffairs.org; but Cendant broke up into numerous pieces last year. Also according to Consumeraffairs.org, this enterprise has used an astonishing number of program names or trade names. Here is consumeraffairs' list:

AOL AutoVantage
AOL Credit Alert
AOL Netmarket
AOL Travelers
Advantage
AutoVantage
Buyers Advantage
Citishopper
Clever
Clubhouse
CompleteHome
Credentials Services
Dental Plus Group Plan
Digital ProtectionPlus
Dinner On Us Club
Family FunSaver Club
Great Fun
Great Options
Health Saver
Homeowners Savings Network
Hot-Line
Identity Secure
Just For Me
Macy's Hot-Line
National Card Registry
Netmarket
OurCompleteHome.com
Pet
Privileges
PrivacyGuard
Sears Discount Travel Club
Shoppers
Advantage
Small
Business Central
Today's Homeowner Values
Travel ER
Travelers
Advantage

Incidently, consumeraffairs.org's coverage of this operation is excellent and appears to be frequently updated. One wonders why consumeraffairs can be this on top of things, but yet our taxpayer-funded consumer protection agencies are way behind.

One perpetual buddy of this TLG slimemold has been the Chase group, including Chase Bank and Chase Home Finance. As I indicated at the beginning of this post, a lot, though not all of the complainers are Chase customers. The involvement with Chase goes way back. In 2006, the Maine attorney general announced a 15 state settlement with TLG and Chase for alleged violations going back to 2001. When confronted by consumers concerning mystery charges on their debit and credit card statements, Chase has a practice of claiming ignorance and telling customers that they have to clear it through TLG (or whatever name they are going by at the time). This is a deceptive practice and a misrepresentation of the law. If it is a credit card, the consumer has dispute rights under the Fair Credit Billing Act, and if it is a debit card, the FTC credit practices rule applies. The consumer can dispute it and trigger the bank's duty to obtain verifiable written authorization from the merchant or the charge must be reversed. If you run into one of these charges and complain about it, I'll give you odds that Chase won't tell you that TLG is one of its marketing partners, and Chase has had an ongoing business relationship of AT LEAST providing customer names and address for solicitation by TLG.

Although some (but not all) state attorneys general have taken action on this, where have the federal authorities been? They've been asleep at the switch. As far as I can tell, their has been no action by either the Federal Trade Commission nor the Office of the Comptroller of the Currency.

If it can be established that Chase (and/or others) has a deal with TLG to sign up customers without their authorization, then this is nothing more than organized crime, and it should be treated as such. People should go to jail. There is obviously big money involved. This is a significant scam that is just one step away from major press coverage. Tune in for more as the story develops.

More Toe Tapping Prosecutions in Minnesota
Hand Jive - Toe Tapping AND Hand Waving

The movie Grease has been banned from showing in Minnesota, as it contains flagrant and vulgar depictions of toe tapping and hand waving. Anyone who participates in such activity in Minnesota is subject to prosecution for disorderly conduct.

Breaking News:
My Three Sons video to lead to indictments in Minnesota

Everyone connected with the television show My Three Sons are officially suspect as members of an alleged "disorderly conduct" gang. Sources say that prosecutorial interest flared after this video of flagrant toe-tapping was made public. Rumors that Senator Larry Craig frequently watched the show could not be confirmed at presstime.

An unnamed prosecutorial attorney had this to say: "That Uncle Charley is suspicious. He was in the navy, knew how to cook, kept a neat house, and jumped at the chance to join a household of men and boys. You figure it out."

Mopar or Less Par?
Chryslerberus might shed two operations

Rumors are circulating that the New Chrysler Corporation might shed its signature Mopar parts operation and its Chrysler Transport division. The transport division hauls parts from facility to facility. If Chrysler sells the Mopar parts operation, it will likely keep the Mopar name and trademark.

All of this is speculation at this point, but if true it contradicts the pre-buyout position of Cerberus that it would not sell the company off piecemeal. Thanks to Steve B. for the tip.

Union Rumblings at Toyota
Georgetown, Kentucky Plant has labor strife


There is talk of a union vote (for the first time) in Toyota's flagship factory in Georgetown, Kentucky. According to an article at Autoblog.com, Toyota management is refusing to meet with worker representatives in the plant. In this case, the worker representatives are part of a group called the Kentucky Workers Right Board. The Autoblog article does not specifically state whether the representatives from the KWRB are Toyota employees. In an editorial at thetruthaboutcars.com, writer Frank Williams asserts the KWRB is a UAW creation. Williams also opines that if the UAW agitates in Georgetown, that Toyota will close its only UAW plant in the US, the NUMMI plant in California.

What's wrong at Georgetown? Workers are complaining about the injury rate and what they deem to be excessive use of low-paid "temporary" workers. It was reported in the news earlier this year that, with bonuses and overtime, workers at Georgetown made more money last year than the average UAW worker. Fringe benefits, however are not comparable. Needless-to-say, Toyota workers don't have full retiree healthcare.

Tata Sticks Out as Jaguar/Land Rover Suiter

Indian giant, Tata is touted as the leading candidate for taking over Ford's Jaguar and Land Rover brands. According to the Times Online, the only other serious candidate is another Indian company, Mahindra & Mahindra, a maker of four-wheel-drive vehicles. Thanks to Steve B. for the link.

Timewasting Site if the Week: Basicichipdigitalgold.com
How to be Hip

"Steve, how did you get to be so hip?" That's what people always ask me. How to you answer a question like that ?Me, I channel the spirit of Greg Brady, but not everybody can do that. Now YOU can be hip too. I'm linking lesson one of "How to Speak Hip" by Del Close and John Brent. This is just one of the lost LP records collected at www.basicichipdigitalgold.com. If you spend a half hour on this site, you'll think William Shatner is a mainstream singer.

NYT: Almost 1/2 of Lemon Buyback Cars get Laundered Title

Today's New York Times contains an excellent article on lemon law buybacks. The NYT commissioned a study of 1000 cars bought back under Florida's lemon law. Of the 1000, 555 were shipped out of state. Of the 555, an amazing 80% lost the "lemon" designation from their title history.

Dayton, Ohio attorney, Ron Burge, a fellow National Association of Consumer Advocates member, and a Lemon Law expert, is quoted prominently in the article. Ron has a great blog linked here.


UAW CONTRACT RUMORS HEATING UP

A few folks have been sending me articles regarding the pending UAW contract talks with the Detroit Automakers. As you know, the fate of UAW-LSP rests in these talks. Delphi has already canned its legal services benefit. The automakers are claiming that they need a 1/3 reduction in labor costs to survive. At least at GM and Ford, health care is liable to take a partial hit as it is shuffled off into Voluntary Employees Benefit Agreements. (I have a post in draft form on VEBAs. I hope to finish it soon.) When the auto workers are facing serious wage and benefit cuts, why should they keep the legal services benefit. Two reasons. First, we're cheap, a fraction of the cost of health insurance. Second: If you took a 20% wage cut, and had to pay hundreds of dollars a month more for health insurance, would you want to lose your right to a free bankruptcy attorney? In short, the deeper the cuts, the more the UAW members will need us.

It looks like this will not be a contract cycle for pattern bargaining. GM, Ford and Chrysler may end up with very different contracts due to the specific needs of each company. Chrysler, after it's buyout by Cerberus, needs cash more than long-term debt relief; therefore Chryslerberus is unlikely to bargain for a VEBA. Source: Bloomberg, misc.

Ford Verve:
Stylish Subcompact Concept Car

Ford will be showing a new concept car, the Verve, at the Frankfort Auto Show in Germany. This is a world-wide Ford group effort, but it looks very Mazda-like. The concept reminds me of the classic Honda CRX. This is a car that Ford should build. Two thumbs up.

From the "Beep beep, beep beep, the car goes beep beep beep" file:
Woz takes Prius to 105 or 104 MPH

Apple cofounder Steve Wozniac, the "other Steve, was recently issued a speeding ticket for going 105 MPH in his Toyota Prius. Wozniac denied going that fast. He thought he was going 104. You just know that the near-billionaire smiled smugly as he accepted his $700 ticket knowing that he'll get his props for breaking the century speed limit in the Prius, a car that critics call underpowered. Next, stay tune as he breaks a speed record on his Segway.

Oh yeah, what's with the title of the post? Here's a hint.

Youtube Video of the Day
Keith Moon and Steve Martin

From 30 years ago this month, Steve Martin and Keith Moon show you a hotel made to be destroyed.

Honda Supersizes the Accord
2008 Redesigned Model is Unveiled Today

This morning Honda officially lifted the press embargo on pictures of the redesigned 2008 Honda Accord. Honda also issued its press release on the new model. The new Accord has grown to the point that it is now a "large" car, with 120 cubic feet of interior room. You can now undo that belt buckle a notch as you get behind the wheel. The new Accord is three inches longer, an inch taller and an inch wider than its predecessor. There are three new engines including two flavors of VTEC 4-cylinders at 180 and 200 horsepower, and a V-6 that matches the Camry's 268 horsepower.

Although Honda is looked upon as being the most environmentally friendly automaker, the new Accord does nothing to move forward the anti-global-warming cause. The best mileage ratings for the new Accord are 22-31 on the 2008 scale, equal to or worse than the outgoing models even when making adjustments to take into consideration the more optimistic 2007 EPA scale.

As far as styling is concerned, It appears that the sedan has gone luxoboat. The most distinctive thing to it is that it is pretty nondistinctive. The coupe is generic also, at least within its own idiom.

In summary, my first impression is that Honda left some room at the table for other makers to come in and attack the Accord from below. There should be opportunities to underprice the Accord and to sell smaller, more economical sedans. Ironically, the next big sedan introduction is set to be Chevrolet's new Malibu. The numbers on the Malibu should be almost identical to its platformmate, the Saturn Aura. In other words, instead of maintaining a niche a half a size smaller than the Accord, the Malibu will become more of a direct competitor, and it will become more of a badge-engineered twin to the Saturn Aura. The Aura's sales have been below GM's estimates. It's hard to see how General Motors will bring anything new to the table without competing fiercely on price.

Was Mejier Store Employee Fired for Appearing in Sicko?

Adrian Campbell says she was fired for appearing in the Michael Moore movie, Sicko. Mejier says she wasn't. Here's the link to the newspaper story from Livingston, Michigan.

Ninja Loans, Neutron Loans, Roach Motel Loans
Borrowers are Playing Chicken with Foreclosure - and Winning - Here's why:

Recently increased press attention to the problem with predatory sub-prime loans has uncovered some terms that insiders have long been using to describe the loans that they sell/sold. Neutron Loans, for example, are loans that kill the homeowner but leave the house standing (for the lender). A Ninja loan is "no income, no job, (no) assets." The Ninja loan overlaps with the "liar's loan" or stated income loan. Finally, there is the "Exploding ARM." An Exploding ARM is an adjustable rate mortgage with an initial teaser rate but with an indexed adjustment that virtually guarantees a high long-term rate. Exploding ARMS lock in the customer with high loan/value ratios based upon inflated appraisals, and they usually have prepayment penalties just to make sure the borrower can't go elsewhere. I have my own term for exploding ARM loans written for 100% or more after an inflated appraisal. I call them "Roach Motel Loans" because you can get in, but you can't get out.

In the case of some of these loans, the borrowers may have the last laugh, because, after months or years of trying to make payments they really can't afford, they just give up and pay nothing. Borrowers are daring the lender to foreclose. Surprisingly, in many cases the borrowers aren't being foreclosed on, at least not for many, many months. There are a number of reasons why. The first is that there appear to be many ways to hide a non-performing loan in a securitized pool. The second reason, is that even after a problem loan is identified in a securitized pool, it can take a long time to get the loan documentation straightened out to identify a proper owner to foreclose. This is especially true now that many states are refusing to allow MERS foreclose on the loan. MERS claims to be the owner of record on many securitized loans, but in most/many cases MERS can't prove it. The third reason is that the foreclosure industry, the foreclosure attorneys, and all of the other service providers to the foreclosure industry, are already swamped, and they can't quickly take on more business. The fourth reason is that some of these loans are so outrageous that the lender is subjected to counterclaims that are nontrivial. Each time one of these loans is foreclosed, there's another embarrassing tale of overreaching that potentially does great harm to the lender's reputation. Many of these loans are simply illegal, even under the junky laws that applied when the loans were written. Subprime lender Ameriquest is facing over a thousand lawsuits.

Ironically, the reason why the financial markets are all in a tizzy is not that the subprime loans are sapping up all of the consumers' money; it's that some of the consumers are starting to "just say no", and are stopping payment entirely. They finally realized that not paying a housepayment they can't afford is more rewarding than having credit that they didn't know how to use responsibly in the first place. In many cases, there's no good reason to keep paying on a house that's worth less than the balance of the loan, and given the perpetual loan balance, always will be.

Last Friday, the Fed cut short-term interest rates half a percent on an emergency basis to quell panic in the financial markets and to build liquidity. You would have expected mortgage rates to fall today. It didn't happen. What I think is that many lenders are stepping back and rethinking whether they really understand the mortgage business. I think they understand mortgages little better now than they did six months ago. There are a lot of lessons left to learn.

Ford Escape Hybrid - from Hip to Hemp

In the '90s, you had the Ford Explorer Eddie Bauer Edition. Now that we are most of the way through the 00's, we have the Ford Escape Woody Harrelson Edition.

Let's be blunt. The whole market for US automakers is going to pot. Although Ford has high hopes, they don't want to get all out of joint about hybrid cars. According to Autoblog Green, the 08 Ford Escape Hybrid will have an interior that replaces most petroleum-based plastics with renewable materials including soy and hemp. Hemp-reinforced plastics weigh up to 30% less than fiberglass. It seems like a great environmental advance, just don't cross the border in your new Escape unless you want to strip your car down to the floorboards.

Ford Taurus vs. Volvo S80
What you pay vs. what you get

I saw my first '08 Ford Taurus on the road in Delaware a little over a month ago. It had an Enterprise sticker on it, so that wasn't a good sign for the car that's supposed to lead Ford's turn around. Still, for those in the market for a large car, the Taurus deserves a look. It has all the right parts. In fact, the Taurus shares much of its underlying platform with the top-of-the-line Volvo S-80, and especially in AWD form, the Ford is a much better deal. The Taurus is as much as a third cheaper than a comparably equipped Volvo. It's got to be a lot easier to find a Ford dealer than a Volvo dealer. I prepared this Apples-to-Apples comparison of the Taurus to the S80 at truedelta.com.

The Taurus is a good deal. It has a good personality. So what if the new three-bar grill combined with its ovoid shape make it look like a 1980's Ford Tempo on human growth hormone. Hey, maybe they can get Barry Bonds to be their new spokesman.

Gadget of the Week:
R2D2 Video Projector

If you're looking for a gadget to precipitate a divorce, this is it. Bring home one of these babies: an R2D2 Video Projector. "Honey, look what I got. It was only $2800.00."

Ameriquest -1349 Lawsuits (and Counting)

Courthouse News Service has named Ameriquest its "Defendant of the Month" due to the 1349 lawsuits that have been filed against it, including 65 class actions. Currently most of the offensive cases against Ameriquest are stuck in Multidistrict Litigation purgatory. The federal Multidistrict litigation rules might reduce litigation costs for the defendants, but they increase litigation costs for the plaintiffs. As an attorney, you have to have deep pockets just to participate in the Multidistrict Litigation. There aren't enough consumer attorneys in the first place, and the subset of consumer attorneys with deep pockets is very small. Here's a link to Ameriquest Watch on the InnerCityPress.org website.

Chinese Crash Tests

I don't know about you, but I can't get enough youtube.com videos of Chinese cars failing crash tests. Here's a google.com search that found 253 Chinese Crash Test videos. Enjoy.

Time-wasting site of the Month:
Wolfgang's Vault - Legal Bootlegs of 70's & 80's Concerts

Thanks to layoffs and attacks of common sense, most of us 3357ers have more than a touch of gray in our hair, if we have any hair left at all. The vast majority of us came of age musically in the 1970s, with a few on either side of that. That means we're in the prime demographic range for Wolfgang's Vault. The "Wolfgang" in question is none other than deceased rock-n-roll promoter extraordinaire Bill Graham, whose given name was Wolfgang. Bill Graham ran the Fillmore West nightclub in San Francisco, and the Fillmore East nightclub in New York City from the 1960s to the 1980s. He collected hundreds of tapes from Fillmore performances. The webmasters at the wolfgangsvault.com website archived this material and also acquired the rights to the King Biscuit Flower Hour (remember the KBFH?) tapes, as well as quite a few radio broadcast concerts, and all of this material is now available in free streaming form at the Wolfgangs Vault website. You can buy copies many of the concerts. Performance royalties are paid even on the streamed concerts, so you can listen guilt-free.

If you don't find your favorite artist now, check back soon. In the past week, concerts were added by artists like Joe Walsh and Bachman Turner Overdrive. Many artists have several concerts available on the Vault, from different eras of their careers. It is interesting to compare early shows to later ones.

There are a few notable lapses in the Vault's collection. Black artists are woefully underrepresented. I'd love to hear a late '70s Commodores concert, for example. Most of the acts are American. If you want concerts from across the pond, for the most part, you'll have to look elsewhere.

I've got to tell you, don't check out this site if you don't have a lot of time to kill. It's addicting. My favorite concert so far is a show by Meatloaf from 11/29/1977, when Bat Out of Hell was still fresh, and Meat's voice is in prime form. I was reminded that I was going to post something about this because of the death of baseball Hall-of-famer, Phil Rizzuto, who voiced the play-by-play on Paradise by the Dashboard Light.

From the "Cars We Can Drive to Work" File:
Sneak Peek - 2009 Pontiac Vibe

Until very recently, there was a lot of speculation that the Pontiac Vibe would die when the current generation ceased production. It is now virtually certain that the Vibe will live. Linked here (from the genvibe.com website) are interior and exterior of what appear to be a final or near-final version of the 2009 Vibe. Overall, the interior and exterior are evolutionary and not dissimilar from the current version. Since the Vibe is a soulmate to the Toyota Matrix, the Vibe is expected to get a new generation of Toyota engines and probably new transmission choices as well. One of the photos has "Dual-VVTi" on the engine cover. This suggests that the powerplant is either Toyota's 136 HP 1.8 liter 2zr-fe or the 158 horsepower 2.0 liter 3zr-fe. These are modern engines with a broad power band, good fuel economy and low emissions.

It's possible that the 2009 Vibe will be an early model introduction, so it may be in the showrooms within 6 months. If you are looking for a small car to drive to work. This could be your ticket. The Vibe and the Matrix are assembled in the UAW-staffed NUMMI plant in California.

From the "You're doin' a hell of a job Mikey" file:
Secretary of Education is Left Behind on Jeopardy

It's back to school time, and my wife and I once again confront the waste and bullshit that are the defining elements of the No Child Left Behind Act. NCLB is touted by some as the greatest success of the Bush administration. I suppose everything is relative.

George W. Bush's Secretary of Education, Margaret Spellings, once defended the No Child Left Behind Act as a break from the "soft bigotry of low expectations." I don't think it's too much to expect therefore, that the same Secretary would uphold the honor of her position and administration by showing a certain level of knowledge and acuity as a contestant on Celebrity Jeopardy. Oops, I forgot that this is the administration of Michael Brown and Alberto Gonzalez. Oops, I also forgot that this is the same person whom Bush picked to be a principal architect of NCLB even though her official biography features no teaching experience, no education degree, and no advanced degree whatsoever.

It was with some satisfaction then, my family watched a repeat of a Celebrity Jeopardy episode that originally aired last November. In this match, Margaret Spellings was opposed by actor Hill Harper of CSI New York and actor Michael McKean. Michael McKean is best known as "Lenny" from Laverne and Shirley and as Spinal Tap member David St. Hubbins. From this competition, one wouldn't think that Madam Secretary was overmatched. After all, we're not talking about Ken Jennings here. That being said, if you did a bit of research, you'd find that Spellings' biography features a B.S. in Political Science from the University of Houston (average SAT score 1054), whereas McKean attended Carnegie Mellon University (average SAT score 1380). Hill Harper's undergraduate degree is from Brown University, and his graduate degree is from Harvard.

From the beginning of the match, it was clear that Spellings walked into a buzzsaw named McKean. When the cutting was done, the only part that wasn't bloody was the soles of the Secretary's feet. Secretary Spellings spent much of the initial Jeopardy round in negative numbers as Michael McKean easily handled the easier than normal Jeopardy answers/questions. In Double Jeopardy, it was clear that McKean was going easy on his fellow contestants and pausing before his responses. Nevertheless, McKean had an insurmountable lead going into Final Jeopardy. The final score was McKean $47,200, Spellings $11,200, and Harper $6,800.

I understand that this year, the Jeopardy producers will feature another cabinet member on this fall's Celebrity Jeopardy tournament, but they will take steps to guard against another rout. Secretary of State Condi Rice will go against Elmo from Sesame Street, and a ripe melon. It should be a nail-biter.

What are Lithium Phosphate Batteries?
Why should you care?

In recent parallel announcements, Toyota announced that it was postponing a planed 2009 introduction of a plug-in hybrid car from 2009 to 2011. At the same time, General Motors announced that it was on track to introduce a plug-in hybrid in 2009, with an advanced model by the end of 2010. The problem is that Toyota needs more time to develop the Lithium-ion batteries that make the car practical. It's possible that Toyota has bet on the wrong horse, scientifically speaking that is.

Toyota's batteries use a lithium-cobalt oxide technology similar to that used in laptop batteries. As you are probably aware, there have been a lot of recalls of laptop batteries due to fire and overheating. What is dangerous in a laptop is stunningly dangerous in a car that can travel 120 mph, and subject to being hit by other cars going 120 mph.

This is one area that General Motors may be one up on Toyota. General Motors, as showcased in its Chevy Volt showcar, is doing its best to sell a plug-in hybrid in the 2009-2010 timeframe. GM uses a different battery chemistry, a chemistry based on a Lithium-Phosphate mix. Lab tests have shown that lithium batteries using phosphate is much less prone to catching fire than batteries using cobalt.

General Motors' battery technology is from a company named A123. I have previously blogged about a similar technology by a company called Valance Technology. Valance seems to be falling a bit behind as far as I can tell, but any company could be just one patent away from a breakthrough.

There is one more variable in the mix: If any lithium technology is so much more expensive than the NiMH technology currently used in hybrid cars that the cost outweighs the marginal benefits, it's possible that no lithium batteries will be successful. Toyota still plans to introduce its next generation Prius hybrid for the 2009 model year, in late 2008 or early 2009.

Chryslerberus
The New Chrysler

After I read the nickname "Chryserberus" in more than one place, I wanted to see how common the new nickname for Chrysler has become. As of today, "Chryslerberus" returns 540 Google hits. Congratulations, the nickname sticks.

Chrysler to White Collar Workers:
Don't Leave Before we Fire You

The Detroit News is reporting that the new Chrysler management is strongly discouraging its white collar workers from interviewing with other Chrysler-related business such as Chrysler Financial and Daimler AG. (Thanks to Ken W.)

L.A. Times Review of Chrysler Sebring Convertible
Detroit News Review of Chrysler Minivans
What's wrong and Right at Chrysler

Pulitzer-prize winning automotive journalist Dan Neil, auto-reviewer for the Los Angeles Times, recently published a review of the new 2008 Chrysler Sebring Convertible. Did he like it? Here's a quote:

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.

If you want to know why Daimler bailed on Chrysler, essentially paying Cerberus to take over, you need to look no further than the
Chrysler Sebring and Dodge Avenger. These vehicles replaced Chrysler's long-in-the-tooth Dodge Stratus and previous generation Sebring, and because they were six years in the making, they should have been good. Instead, they were instantly the worst cars in the midsized segment, not even coming close to matching competiters' cars that were scheduled for near-term replacements. I test-drove a Sebring shortly after it came out last fall, and it induced me to sell my Daimler Chrysler stock immediately. The Sebring was not even close to being as good as the significantly cheaper Hyundai Sonata that shared the same engine and just happened to share the same dealer's lot.

If you look at what Dodge and Chrysler dealers have to sell, things don't look that encouraging. They have a lot of fuel-guzzling SUVs and trucks. Most don't sell anywhere near the volume of their leading competitors. As far as cars are concerned, they have the 300 and the Magnum, these cars have a personality and are competitive with their class. The Sebring and Avenger aren't competitive at all. The PT Cruiser had a niche, but now it's at the end of it's life cycle and won't be directly replaced. The Caliber is considered to be an also-ran in the compact CUV category. True small cars? They don't have any. There are vague stories about importing Chinese small cars. I'm sure that will go over really well in the Dodge heartland.

The minivans? If Chrysler has hope in the near term, those hopes rest on the long wheelbase of the new Dodge Grand Caravan and Chrysler Town and Country minivans that will debut in about a month. The first reviews are out, and they are generally positive. Here is the Detroit News review. The thing to remember is that Chrysler already had a commanding share of the minivan market, so to "turn around" the company, Chrysler will have to both take share away from strong import competitors and expand the market by taking business away from the encroaching 3-row crossover CUVs like the new Buick Enclave and the brand new Toyota Highlander. Here's something to consider when evaluating the potential for the Chrysler minivans to save the company. Only the top end minivans get a new engine and transmission, and that engine and transmission was not enough to ignite sales of the Chrysler Pacifica in 2007. (The Pacifica sales are down more than 20% in the year to date.) All of the models get more weight and length, exacerbating a slight performance deficit when compared to the competition. Only the top-of-the-line models get the new Swivel-N-Go reversible middle seat. The competitors aren't standing still. The new Honda Odyssey is about a year away, and the new Toyota Sienna is about two years away, less than halfway through a typical Chysler design cycle.

That leaves Jeep. You are either a Jeep person or not. I'm not a Jeep person. The Jeep line has been selling well. It's a profitable niche, but it's a finite market. It is what it is. What it isn't is enough to support a major independent automaker. Cerberus can unload Jeep and make a pretty penny. Cerberus can make money on its Chrysler buyout by selling Jeep (and maybe the minivans) and chucking the rest of the company. A lot of Chrysler stakeholders hope they don't.

Would $20/hour in Concessions Save the Detroit 3?

I'll save you the math, but Frank Williams, in an editorial at thetruthaboutcars.com website argues that even $20.00/hr in concessions from the UAW would not be sufficient to bail them out of their current financial mess. Actually, I lied. I'm not going to save you the math, at least not entirely. Williams figures that a $20.00 per hour concession will save GM $3.3 billion per year. He said that would barely pay for a 30-40 billion VEBA for retiree health care over a 10 year period. He also cites GM's current interest expense at $3.2 billion per year, its $80 billion in short term liabilities, and dwindling market share. He wonders where the income will come from to pay these liabilities.

Assuming his numbers are right, there are some factors it doesn't appear that he's considers, or at least he didn't go over. If GM has to borrow all of that money for the VEBA, then Williams could be dead-on or even understating the problem. If GM has already set aside some assets to cover future retiree medical costs (even if only partially), the effect could be mitigated. Regarding GM's other debt: yeah, it's high, but GM posted a nominal profit last quarter even with the high debt. It's true that GM is going to have to sell a bunch of cars to be successful in the long run, but that's true regardless of what numbers you use.

So let's do a little role-playing here. Let's say you're Ron G. and you're negotiating with General Motors. Let's say that you run the numbers, and you figure that even cutting pay and benefits $20.00 per hour, a figure that you're not convinced you can sell to the rank and file anyway, you still can't come up with numbers that make a GM comeback reasonably likely. What do you do? It seems to me that you hold firm for a "living" wage, with only minor cuts. You try to get another good year or two for the members before all hell breaks loose. The alternative is to cut your standard of living and leave that money on the table for the big wigs to gobble up until the end comes just about as quickly anyway.

Where does that leave us? Here's my prediction. If the UAW agrees to a contract with only mild cuts, fellow 3357 members, that's when you should worry; because that means that they're set to go down with the Titanic with the band playing. On the other hand, a contract with deep cuts means the UAW thinks they ship can be saved. They've left the deck, and they've gone below to work the bilge pumps. Of course, salvaging the ship could also mean casting off dead-weight off the top, and that dead weight could mean certain gold plated benefit plans.

Chrysler Has a New Name and New CEO

What was once a division of Daimler Chrysler AG, is now Chrysler LLC. Ex-Home-Depot CEO, Bob Nardelli, has been named the Chief Executive Officer at Chrysler, LLC. Mr. Nardelli is touted for his ability as a turnaround specialist. Some say that the only thing that he turned around was himself as he ran away from Home Depot, one step ahead of the door hitting him in the ass on the way out, after controversy brewed over a pay package that escalated faster than Home Depot's fortunes.

If Mr. Nardelli makes Chrysler anything like Home Depot, you can be sure that when you REALLY need a part at a Chrysler dealership, you'll never be able to find an employee to help you.

Youtube Video Of the Day:
Tacoma Narrows Bridge Collapse

Here's a link to a video that I first saw in high school Physics class almost 30 years ago. It's the Tacoma Narrows bridge collapse that occurred in 1940. Unlike the recent bridge collapse in Minneapolis, no one died or was even injured as the Tacoma Narrows suspension bridge danced for about an hour.