Wednesday July 30, 2008
Elvis Has Left The Building: Jerry Flint believes that GM may be effectively shutting down its North American operations. He notes that sixty percent of its 9 million vehicle sales are abroad. Profits are robust outside the U.S. Jerry asks, "Can or should the sickly U.S. operations be cut away to save the company?" Flint points out that General Motors "has survived with foreign profits and by selling off pieces: $13 billion for half of lender GMAC and $9 billion for Allison Transmission, Isuzu shares and other assets."
Jerry forsees: "Plants keep closing, white-collar staff is laid off, the Detroit headquarters becomes a ghost town, the famous Tech Center is emptied. No announcement; the American operation just evaporates. Not completely, of course. There will be business, maybe as little as 10% of the market."
"In fact the latter scenario is already taking place, although no one says that out loud. General Motors is quietly moving operations out of the U.S. Back in 1979 GM had 468,000 hourly workers in the U.S.; it now employs 76,000 in the U.S. GM has passed engineering responsibility for small cars to its Korean unit and its family-size cars to GM Europe. Rear-drive platforms are designed in Australia. Hummer is for sale, and Buick is nearly gone, with only three models. The U.S. folks are responsible mainly for big pickups and big sport utilities, and we know what's happening to those sales - and a few Cadillacs. GM calls this process globalization, but it's really a move out."
I can picture this scenario: A Chevy dealer selling Korean-made Aveos, U.S.-made Corvettes and work trucks. A Buick-Olds-Pontiac-Cadillac dealer selling some miscellaneous rebadged cars from far and wide ... and some homemade and not-so-homemade Caddys. Saturn dealers get new Opel signage and sell Nothin-But-Opels.
The General's dealer network will shrivel like George Costanza's jewels at the beach but GM doesn't care - this way, it doesn't have to buy anyone out.
Low Residual Values: That's what these 'classic' cars from Russia have. (hat tip: Ric at Pugs of War)
History Repeats Itself: The proprietor of Sippican Cottage wrote that the government purchased land at Ned's Point in Mattapoisett (MA) for $240 in 1835.
Then, the United States Lighthouse Service (an agency which was made part of the U.S. Coast Guard in 1939) "built a 35 foot tower with a - get this - whale oil lantern on top. Well, it was better than fireflies, I guess. Mattapoistett is right down the street, er, I mean coast, from New Bedford, so the whale oil lamp no doubt kept many whaling ships from running aground here so they could continue to supply the whale oil lighthouse with oil to keep the light burning to keep the whaling ships from running aground when getting the whale oil to supply the lantern that kept the whale ..."
"I see a pattern developing. See: ethanol."
Nice And Not: This heartwarming story about Nocona Athletic Goods is worth a read. These are genuinely good folks; I visited Nacona, Texas in the early 1970s and Nocona Athletic Goods was one of the nicest companies I ever encountered. It's a pleasure to learn that Nacona is still in business despite a devastating factory fire two years ago.
Proving that, sometimes There Is No Justice, the worst company I ever visited is still in business, too. Flambeau Plastics (now Flambeau, Inc.) of Baraboo, Wisconsin is the rudest pack of business bozos I've ever met.
The complete opposite of Nocona.
Being There: During the primaries, several pundits referred to Obama as Chauncey Gardiner, due to the senator's remarkable capacity for making the vacuous sound profound. Heh.
Hope And No Change: Steve Graham keeps thinking "about Obama, bailing out on his own family in Kenya. He was going to help his family's village build a school, and they have been waiting two years, and he hasn't done a thing. Imagine how painful that must be to the people he let down. Imagine the hope he put in their hearts and then allowed to wither.
Here's a question. If this is how he keeps promises to his own relatives and their friends, how well will he keep his promises to us?
Now look at John McCain. A man who adopts other people's children and refuses to make hay of it. Hey, I know the answer. Let's have John McCain adopt Obama's village.
Another possible solution: tax the bejeezus out of the village. That way, they'll have tons of revenue to spend on schools. That's how taxes work, isn't it? In Obamaworld, I mean. Maybe we can get a teacher's union in there while we're at it, to make sure no one is working too hard and that the place doesn't become infected with insane ideas like meritocracy.
Maybe we could auction a pair of Obama's boxers on Ebay. If we can start a bidding war between Chris Matthews and Frank Rich, we'll be able to buy the village a school plus its own aircraft carrier." (hat tip - Kathy Shaidle)
G'Bye Mate: Starbucks is closing three-quarters of its stores in Australia.
The stores in Brisbane, Melbourne and Sydney will remain open - for the time being.
Little Known Facts: In January 1943, the sale of pre-sliced bread was banned to reduce bakeries' demand for metal parts during the war. Later in the year, canned food and shoes were rationed.
Quote Of The Day is from Thomas Sowell: "What enables ex-President Jimmy Carter to be taken seriously is that millions of people are too young to remember what a disaster the Carter administration was. He lost his bid for re-election in a landslide for a reason."
Tuesday July 29, 2008
Bust Out: Frank Williams of TTAC reported that after several weeks of running plants flat out to meet Chrysler's demands, component suppliers have experienced a complete stop in orders.
This sounds suspiciously like a good old-fashioned bust out, where a business' assets and lines of credit are exploited and exhausted to the point of bankruptcy. In this maneuver, a company orders merchandise it never intends to pay for and often ships it to a new, separate subsidiary in another country or resells it for cash at a huge discount.
Sometimes, the merchandise is stockpiled in anticipation of a Chapter 11 filing. Bust outs are symbolic of failing, desperate companies with nothing to lose. Or companies run by crooks. There have been many stories of crime-syndicate bust outs; in fact, an episode of The Sopranos (episode 23 from 2000), in which Tony and Richie Aprile squeeze money out of indebted gambler David Scatino's sporting goods store, ordering bottled water, coolers, airline tickets and sneakers on the store's credit and selling the merchandise on the street.
In my business, I had one customer pull a bust out. He had been buying from us for over five years. He suddenly ordered large amounts of merchandise from all his vendors, claiming he had a "new, very large account." He took delivery at his San Diego location, then (we found out later) shipped across the border to Mexico where he had established a new company. He then sold stuff from Mexico while his U.S. company declared bankruptcy. We caught on fairly early, placing him on credit-hold when he hit the $20,000 mark. (His firm bought $4-7,000 per month from us in normal times.) Other suppliers weren't so lucky. He took one vendor for over $1 million.
I have a very bad feeling about Chrysler.
But Wait, There's More: Chrysler Financial has stopped offering automobile leases. Sales are so bad that Chrysler has introduced new incentives of zero-percent financing for 72 months on the 2008 Dodge Durango, Chrysler Aspen and Jeep Grand Cherokee and Commander. And, the company that "owns the now non-leasing Chrysler Financial Cerberus also owns 51 percent of GM's vehicle financing arm, GMAC." GM owns the other 49%.
Yesterday, GMAC informed their dealers that they will no longer offer vehicle leases as of August 1st. Chase Auto Finance said it would stop financing leases for Chrysler vehicles this week, joining Wells Fargo Auto Finance, which stopped accepting lease applications from all automakers in mid-July. Leases make up 20% of the U.S. market overall. Luxury makes are very dependent on favorable lease deals - over 50% of all luxury cars are leased. When I bought my Jaguar, the salesman told me that 80% of his Jag buyers leased.
These actions will mean a further tightening of credit in the vehicle market and will tend to drive down sales, especially to 'chronic lessees' who are a dependable source of continuing business for auto dealers and manufacturers. For many, if there's no hot lease deal, there's no deal at all. And some people who were leasing Cadillacs and such may now be buying or leasing something much more downscale. Or used.
Maybe that 14 million per year car market everyone's been whining about will turn out to have been optimistic.
And More: Fitch has downgraded Chrysler's credit rating from from B- to CCC, with a negative outlook.
"The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives."
The phrase "circling the bowl" comes to mind.
Cruisin': I've been lax in driving my Plymouth lately because its garage door is often blocked by contractors' trucks. Everyone left early on Monday, so I fired up the '39 and took it for a good ride. The temperature was moderate - low 70s, the sky was blue, so I rolled down the windows and listened to the burble of the exhaust. Sweet.
Thought For Today: The older we get, the fewer things seem worth waiting in line for.
Monday July 28, 2008
Challenger Sighting: Spotted a new one parked at the Gardner Center in Battle Ground Saturday evening. The Oxidized SunnyD paint color seemed darker than early '70s Challengers - but maybe that's just my memory fading.
When I first laid eyes on the revamped Mustang in late '04, I thought, "Man, the photos don't do this car justice." The 'Stang looked so much better in person - full of muscular curves and details not captured by the camera lens. I had the opposite feeling about the Dodge; it looks far more ordinary and dull than photos suggest - like something carved in haste from a soft bar of soap. My wife and daughter reacted thusly: "You mean this is a new car?"
In March, I predicted that Challenger sales would "settle in at the 2-3,000 per month rate. That's not enough to amortize the tooling, start-up and hype costs." After examining the actual vehicle, I'm tempted to revise my figures downward.
PS: I'm far more impressed by this Challenger.
Car Story: USA Today had a nice, car-centric profile on Jay Leno. Excerpt: "I had two jobs as a kid, one at a fast-food restaurant and one at a Ford dealership. And I'd put the money from one job in one pocket and spend it. And the other paycheck I'd save," he says. "I do that now. I have always banked my Tonight Show money and lived off the stand-up. I have one credit card, no mortgage, and I don't lease."
"When I was little, I was never a sports guy. The notion of tossing a ball back and forth seemed ridiculous. What am I, a dog?"
One day while riding his bike, "I saw a man standing next to his 1952 Jaguar convertible. And I was transfixed. The guy asked if I wanted to sit in it. I did. And I never forgot that moment."
"Maybe I'm just trying to get someone as excited about cars as that guy did for me. You know, the first car I bought when I had any money was a '50s Jaguar."
The pause is imperceptible, the grin childlike.
"Wanna see it?"
PS: Jay hosts a video road test of his Czechoslovakian-made 1938 Tatra T87 here.
High Praise: Dan Neil reviewed the fifty-something thousand dollar BMW X6 'sport-activity coupe': "So what's the sole and dubious advantage of the X6? It has an H-point (the height above ground of the driver's hip) of 33 inches, whereas the 5-series H-point is a mere 20 inches. But, Mommy, I want to sit up high!"
Global Warming Hoax Exposed ... Again: Dr. David Evans, a respected scientist, notes that "since 1999 new evidence has seriously weakened the case that carbon emissions are the main cause of global warming, and by 2007 the evidence was pretty conclusive that carbon played only a minor role and was not the main cause of the recent global warming. As Lord Keynes famously said, "When the facts change, I change my mind. What do you do, sir?""
"The satellites that measure the world's temperature all say that the warming trend ended in 2001 and that the temperature has dropped about 0.6C in the past year (to the temperature of 1980)."
"The new ice cores show that in the past six global warmings over the past half a million years, the temperature rises occurred on average 800 years before the accompanying rise in atmospheric carbon. Which says something important about which was cause and which was effect."
"The world has spent $50 billion on global warming since 1990 and we have not found any actual evidence that carbon emissions cause global warming."
Bricks N' Sticks: The housing market is sending mixed signals. Prices are down - by 6.1% over the last 12 months. Days to turn an existing house are still high but unsold inventory fell slightly to 10 months' worth from 10.4 months in May.
New homes sold at an annualized pace of 530,000 (down very slightly from the prior month), exceeding the median forecast of 503,000 in a Bloomberg News survey. On the other hand, Census Bureau data indicate that the home ownership rate in second quarter 2008 has rebounded by the largest increase in four years.
A report from the National Association of Realtors showed existing home sales fell 2.6 percent to a 4.86 million annual rate, the lowest level in a decade. But existing home sales in the hard-hit West (California, Arizona, and Nevada) have increased for four straight months.
On my street, there are a few sale signs but they are difficult to see - obscured by all the contractors' trucks parked on the street. At least six houses are being treated to significant remodeling upgrades, including ours.
For many remodeling contractors around these parts, business is very good. Make no mistake - people are still spending money on housing. They're just not moving to another home to do so.
Speaking Of Financial Turmoil ... here's a great headline: 'Crocs Stock Now Exponentially Uglier Than Its Shoes'.
Excerpt: "If you think (Croc, the shoemaker) is a growth story still masquerading as a value stock, forget about it. The company now anticipates that fiscal 2008 revenues will be down modestly from 2007 with diluted earnings approximately break-even after a charge for shutting down Canadian operations. ... Shares are being cut so hard that the little Crocodile logos should have bandages all over them."
Currency Exchange: Much has been written about whether the dollar is undervalued or overvalued. It is time to examine the meat of the matter.
The true value of any currency is what you can buy with it; this chart shows the price index of a McDonald's Big Mac in various countries. It appears that the British Pound is about 30% overpriced and the Euro is 50% too high. On the other hand, Asian currencies seem underpriced - China by 50% or so.
Airfare not included, of course.
Why I Don't Surf The Web Too Intensely: One blogger found his favorite 5th grade teacher in the Sex Offender Database. Ooops. The guy really did love his pupils. One commenter, seeing the teacher's bizarre mug shot, wrote: "Nice pic. Your 5th grade teacher is having either a heart attack or an orgasm. I'm rooting for heart attack."
Quote Of The Day is from Conan O'Brien on Germany: "The great 20th-century power that said, 'Ditch Einstein, get Hasselhoff'."
Friday July 25, 2008
Coming To America: Yesterday, FoMoCo announced big financial losses - $8.7 billion on $85 bil. total sales for the first six months of 2008. North America accounts for slightly over 50% of Ford's total sales and most of the losses. North America lost $7.6 billlion plus $2.4 bil. for Ford Credit (most of Ford's Financial Services losses came from North America). Volvo lost $303 million during the period; Mazda lost $62 million. Ford Europe scored a $1.3 billion profit; South America contributed $645 million in profits.
The company said that an "unfavorable" product mix and lower unit sales hurt U.S. results. That inappropriate mix refers to now-lost profits on trucks and SUVs, which aren't selling or are moving slowly with deep discounts. Those profits won't be back anytime soon - if ever. And write-downs on truck/SUV lease residuals are pummeling Ford Credit.
Ford has implemented "a significant acceleration of its transformation plan" and "a realignment of its North American manufacturing." Designers and engineers are working feverishly ... (more >>>)
The Unauthorized Obama Bio ... courtesy of The People's Cube. Excerpt: "As a teenager, young Barack's two best friends were named Bugs and Daffy. Daffy was black and Bugs was white. Bugs was always getting the better of Daffy and Barack felt that this was because Daffy was black.
Barack was conflicted, as someone who has changed his named so many times at that age is wont to be; one day, his asked his mother "Mom, why can't we have hope and change instead of despair and sameness?" His mother replied, "Just a minute son! I have to stamp "REJECTED" on this loan application! Boo Ha Ha Ha Ha!"
The incident had a profound affect on young Barack. Not only had he not noticed his mother had a laugh like a cartoon villain but she was handing out loan rejections to people who had not even applied. Furthermore, his grandmother was going into trances and making strange predictions like "Steven, er, Barack - someday you'll throw me under a bus!" Barack just knew that the answer for the world had to be hope and change, regardless of the fact that the answer had nothing to do with the question.
"Sometimes," Barack reasoned, "you have to answer a question you can answer instead of the one you are asked!" This would turn out to be a pivotal insight for him, for then as now he never had the answers to many of the questions he was asked. But with his phenomenal judgement, he knew - he just knew - that hope and change was the answer and that he was the one he was waiting for."
Guitar Man: A Second century Roman bust looks like Elvis. Or maybe it's a Centurion who traveled to Egypt and fought Bubba Ho-Tep.
Political Quip Of The Week is from Greg Gutfeld about Chris Matthews: "Rumor has it Matthews is starting a MySpace group called Straight Men Who Would Marry Obama with David Gregory as a charter member."
Thought For Today: The older you get, the tougher it is to lose weight, because by then your body and your fat have gotten to be really good friends.
Thursday July 24, 2008
Handicap This. Because they can be nearly silent, hybrid cars pose a serious threat of injury and death to blind and visually impaired people, says the American Council of the Blind, which is pushing the auto industry and government officials to develop ways to reduce this danger.
I don't understand this. Other handicapped people have animals to assist them. Why can't blind people use Helper Bats?
Of course, I may be a little biased. I once bought a broom from a blind guy and it was ... like ... a total piece of crap.
How Bad Are Truck Sales? Here is a sampling of inventory numbers from TTAC: Dodge Ram - 160 days, Nissan Xterra - 215 days, Nissan Pathfinder - 247 days and Nissan Titan - 489 (!) days. That would be a 16-month supply of Titans.
America is headed back to using trucks strictly for work - something we did for 100 years or so - as soon as the residential construction industry climbs out of its sinkhole.
Some other vehicles are in the tank, too. There is a 143-day supply of Dodge Nitros and enough Aspens to last 218 days. But wait - there's more: "The Jeep Wranglers they couldn't keep on the lot just a year ago are now piled up 129 days deep. ... Honda dealers are sitting on a 160-day supply of Ridgelines and Mitsubishi dealers are dealing with a 222-day supply of Endeavors."
Washington Hit Piece: Yesterday, 77 year-old syndicated columnist Robert Novak - aka The Prince of Darkness - hit a pedestrian with his black Corvette convertible in downtown Washington, DC.
A bicyclist - who witnessed the accident - chased Novak, stopped him and said, "You hit someone." The bike dude - a lawyer - said that the pedestrian, who was crossing the street on a 'Walk' signal and was in the crosswalk, "was plowed into" by Novak's car.
The guy is sort of "splayed onto the windshield, rolled off the windshield" and then Novak made a right into the service lane of K Street and sped away.
He chased Novak half a block down K St., finally caught up with him and then put his bike in front of the car to block him and called 911.
"I didn't know I hit him," Novak said later, baring his fangs nonchalantly.
Ann Coulter Was Wrong! Not only is pretty-boy presidential-wannabe John Edwards not gay, he has fathered a love child with his West Coast mistress. I gotta wonder if these words were ever uttered in his North Carolina manse: "Hey honey, while y-all gettin' those chemo treatments, I gotta take a quick bidness trip out to LA."
Well, there is a lighter side to all this; Jim Treacher captures it here.
Thought For Today: If the shoe fits, get another one just like it.
Wednesday July 23, 2008
Ruskie Boom: Russia has become Europe's largest automotive market with a sales growth of 41% in the first six months of 2008, according to PriceWaterhouseCoopers. In this period, 1.65 million cars were bought in Russia compared to 1.63 million in Germany, which was previously Europe's largest market.
Foreign brands have been driving the expansion, with a 54 percent increase in imported sales. In contrast, Russian brands only made up a quarter of all the cars sold in Russia. Despite the growing market, Russia still lags behind Western Europe in terms of cars per person. In 2007, Russia's car density stood at 228 per 1,000 adults - a third of the Western European level. It is expected that rising affluence will see Russia catching up in the next five years.
Backing Down: Toyota may cut its 2008 global vehicle sales target by as much as 350,000 units to about 9.5 million because of declining sales in the United States, Japan and Europe. "With slumps in Germany and other countries in Western Europe dragging on, growth in Russia is not enough to maintain our sales growth," a senior Toyota official said.
Toyota is revising its worldwide sales estimate partly because sales in the United States, its largest market, are slipping at a faster rate than anticipated due to high gas prices.
The U.S. market accounts for some 40 percent of Toyota's worldwide profit.
Oversaturation: I visited the remodeled Safeway supermarket yesterday. It now has a Starbucks. As does the Fred Meyer across the road. And the Albertsons up the street. That makes three Starbucks in little (pop. 16,684) Battle Ground.
No wonder Starbucks is in trouble. Reminds me of an old headline from The Onion: 'New Starbucks Opens In Restroom Of Existing Starbucks'.
Headline Of The Week is from Scrappleface: 'McCain Backs Timeline to Get Obama Out of Iraq'.
Definition Of The Day is for 'Wrinkles': Something other people have. You (and I) have character lines.
Tuesday July 22, 2008
Parking Lot Novelty: James Lileks has posted quite a collection of old motel postcards from the 1950s and '60s. They remind me of some of the places I stayed in on business trips early in my career. Usually the photos show period cars parked out front. Most are ordinary machines - Chevy post sedans, mundane Ford business coupes and the like. But the photo of the Lockview Motel has something completely different - a DKW 3=6.
The VW Beetle-sized DKW had a three cylinder two-stroke engine and was front wheel drive. The German import carried the interlocking AutoUnion circles as a front badge on the grille - the same ones used by its grandson, Audi. DKW claimed that the three-cylinder motor was as powerful as a six-cylinder engine, because of it's two stroke nature. Hence the name 3=6.
Tough sell though, because the little 1956 three-banger only made 42 horsepower. DKWs were a rare sight in the U.S. Not many were sold, probably the public didn't like the idea of having to mix oil in with the gasoline at every fill-up - a requirement for two-cycle engines.
In the October 1957 issue of Road & Track magazine, there was a full-page DKW ad posted by Germanic Auto Distributors of New Haven, CT. It invited folks to "Write for name of nearest dealer." No phone number. No dealer listing at the bottom of the ad. Write a letter and put a stamp on it to prove to us that you're interested.
The 3=6 is long gone but the Lockview Motel of Sault Ste. Marie, Michigan is still around.
The Dark Side Of Chapter 11: More than 80 percent of Americans who intend to buy a new car would abandon their plans if the automaker behind the brand filed for bankruptcy, according to a study by auto market research firm CNW Research.
"The blow would be hardest on privately held Chrysler LLC, with about 91 percent of those who intend to buy a new car within six months abandoning the automaker's brands for rivals", CNW said.
Going ... Going ... Gone: For 12 years, I worked for Rohm & Haas Co. in various positions, starting as an laboratory engineer and ending as a product/marketing manager. It was my longest corporate stint and my last one. I left R&H to start my own business. And never worked for anyone else again.
Dow Chemical has announced that they are buying Rohm & Haas. Dow is paying $15.3 billion in cash for the specialty chemicals company. There's a lot more to this story and the whole thing gave me a couple of Simpsons moments ... (more >>>)
You Can't See What's On The Radio: National Public Radio did a segment: 'Poor Ohio Family Forced to Scrimp On Food'. So ... you'd expect them to be skin and bones, right?
Look here for the real story, with a revealing photo. These two ladies weigh more than a Unimog dump truck full of Ethiopian toddlers. (hat tip - Kathy Shaidle)
Grave Marker: Douglas A. McIntyre wrote that the closing of 600 stores by Starbucks "is a tombstone for the 12,000 company employees that Starbucks will push out of work and a monument to the firm's arrogance." He concludes, "No one makes mistakes like a management drunk with on the feelings of their own invincibility."
Doug later added, "Probably the worst thing that ever happened to Starbucks was when McDonald's went into the premium coffee business. Consumer Reports even rated the fast-food chain's java ahead of the sludge that Starbucks is serving.
McDonald's has 14,000 US stores, so it holds a natural advantage for product distribution. ... Starbucks has lost a great deal of its hip sheen. It has become an assembly line retail outlet staffed by employees who may be more worried about losing their jobs than they are whether the next customer wants a muffin with that cup of Joe.
McDonald's will stay in the extra-special coffee business because it knows it can make a buck on it. Bringing in the kind of profit margins that Starbucks does on its products is just too attractive."
How To Make Fun Of Obama: Joel Stein offers several jokes, cracks and quips, including this one: "He's effete. He's well-dressed. He eats arugula - which he buys at Whole Foods. He mocks those who use guns. He is, as we mentioned, quite thin. He may only be half-black, but he's three-quarters gay."
Quote Of The Day is from Rita Rudner: "I rationalize shopping. I think a lot of women do that. Like, I buy a dress because I need change for gum."
Friday July 18, 2008
Attention-Grabbing: When someone sends me an e-mail with a subject line something like this: 'My Dad Designed The Front End Of Your '39 Plymouth', I pay attention. I received such a note last week. It was an enlightening read.
A.G. 'Gil' Spear, a renowned automobile designer died in June at age 93. His daughter mentioned that he "was the designer of the distinctive front end on the 1939 Plymouth, 1939 Chrysler New Yorker and 1940 Chrysler Saratoga."
Gil led an inspired life ... (more >>>)
Generalissimo Francisco Franco Is Still Dead: From the This Is Not News Department, AutoBlog has reported: 'Mercury dying: No updates planned past 2010' Excerpt: "While no official announcements have been made regarding the death of the Mercury brand, the new product silence is deafening enough for many to conclude that there's just not enough money in Ford's pockets to worry about anything past its bread-and-butter Ford brand and the ailing Lincoln luxury marque."
Been there, done that.
Grim Forecast: Standard & Poor's "now expects 2008 sales of 14.4 million vehicles, and a drop in 2009 to 14.1 million." Owwww.
Spy Shot: It's either the new Honda Hybrid or the next-generation Prius. Or the production version of the Chevrolet Volt:
Life Is A Lark: I've been reading 'Willow Grove Park', a bound collection of captioned photographs. It brought back a lot of fond memories of this long-defunct Philadelphia area amusement park and its famous slogan, "Life is a lark at Willow Grove Park."
The book covers the period from the amusement park's 1896 opening until its final days in the mid 1970s. (A large shopping mall is now on the site. Like the U.S. needed another one!)
It was interesting to see how the park and the rides changed over the years ... (more >>>)
Life In The Pre-Cilantro Era: James Lileks writes about ordering coffee in simpler times: "I can't imagine walking into a diner in 1947 and hearing the waitress ask if she could start a joe beverage for me. Nor can I imagine the cook coming around from behind the grill he has a faded anchor tattoo, stubble, a stained white apron - and telling me I can't put ketchup on my hashbrowns because it might get on the bacon, and the bacon is uncured hormone-free bacon hand-rubbed with applewood shavings."
James' mythical tale was inspired by a modern day We-Don't-Serve-Your-Kind-Here encounter involving a condescending coffee joint: "I just ordered my usual summertime pick-me-up: a triple shot of espresso dumped over ice. And the guy at the counter looked me in the eye with a straight face and said “I'm sorry, we can't serve iced espresso here. It's against our policy.”"
It made me think about the Jack Nicholson-diner waitress scene in 'Five Easy Pieces': "Do you see that sign, sir? Yes, you'll all have to leave. I'm not taking any more of your smartness and sarcasm."
Farewell to talented singer Jo Stafford, who died at age 90.
Once a member of the famous '40s vocal group, The Pied Pipers, she had numerous hits as a solo performer.
I'll always remember hearing her voice on the radio, singing the 1951 hit, Shrimp Boats. "Shrimp boats is a-comin' ... Their sails are in sight ... Shrimp boats is a-comin' ... There's dancin' tonight."
William Katz offers a nice tribute here. Rest In Peace, Jo. (permalink)
Smart Transaction: A man walked into a bank in New York City and met with a loan officer. He explained that he was going to Italy on business for two weeks and needed to borrow $5,000, adding that he was not a depositor of the bank.
The bank officer replied that the bank would need some form of security for the loan. The man handed over the keys to a new Ferrari, which was parked in front of the bank. He also produced the title for the car. The loan officer agreed to hold the Ferrari as collateral for the loan and apologized for having to charge 12% interest.
Later, the bank's president and its officers all enjoyed a good laugh at the man for using a $250,000 Ferrari as collateral for a $5,000 loan. An employee of the bank then drove the Ferrari into the bank's underground garage and parked it.
Two weeks later, the man returned, repaid the $5,000 along with loan interest of $23.08. The loan officer said, "Sir, we are very happy to have had your business and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?"
He replied: "Where else in New York City can obtain secure underground parking for a car for two weeks for only $23.08 and expect it to be there when I return?"
Thought For Today: A penny saved is a government oversight.
Wednesday July 16, 2008
Dead Horse Strategies: Detroit is in trouble. Watch as some of the more incompetent car companies employ new managerial tactics to induce a turnaround.
Oh, wait. They've already started ...
Yesterday, General Motors announced sweeping organizational challenges designed to cut organizational costs by $15 billion by the end of 2009. GM plans on reducing organizational costs by $10 billion, and another $5 billion by selling assets and working in the capital markets. The company will cut truck production by 300,000 units by 2009 - a no-brainer, since trucks aren't selling anyway.
More savings will be obtained by reducing raw material, work-in-process and finished goods inventory. What?! You mean The Beancounter Empire doesn't have these under control?! In my little (compared with GM) company, we lived and died by inventory control. In any small business, cash flow is King. If you lose control of your inventory (and/or receivables), you quickly run out of money.
GM also plans to reduce product development budget for 2009 to $7 billion by delaying launches of next generation trucks and SUVs and cutting V8 development. M-kay. No use working on stuff that isn't selling.
Reduction of salaried workforce via attrition and - !! euphemism alert !! - "other separation tools." I wonder if these involve jumper cables applied to nipples? Or testicles?
Cut all salaried retiree health care after age 65. This should cause some fatal strokes amongst the elderly and further reduce GM's retiree "burden".
Speaking of strokes, a lot of stockholding seniors will be shocked to learn that their traditional GM dividend has vaporized. The company is eliminating stock dividend payouts effective immediately to save $800 million dollars.
A better investment may be Nestlé - the parent company of Ralston Purina, the maker of Alpo dog food. This is a product which many GM stockholders and retirees may soon be adding to their diets.
By the way, I wonder if anyone at GM has looked at the development bills for the Volt and gotten a chilling déjà vu moment, feeling like the long-dead 1956 Studebaker-Packard accountant who opened the envelope with Ghia's invoice for the Packard Predictor?
Douglas A. McIntyre has written that "retooling the company's plants and cutting personnel does not get the company into the small and hybrid car business fast enough. Toyota, Honda, and Nissan already hold the high-ground in this segment. Moving in is not a matter of cutting costs and bring out new products. In places like California, these foreign brands have over 50% of the market already. ... GM will do what all troubled companies do - fire people. It this case 20% of remaining salaried staff. It may reach the point where it does not have enough marketing and product management staff to effectively run the company.
The war in GM hopes to prevail, in its own market, may no longer be one it can win. If it does have a chance, it will take more than two or three years and $15 billion."
Reviving The Horse: So ... what would I do if I were running GM? First, patch up existing, somewhat-desirable offerings as quickly possible to boost profitable sales. Specifically ...
• Initiate a crash program to improve the Aveo - better build-quality, more impressive NVH, etc. Offer upmarket, pricier versions, loaded with comfort options - still using the Chevrolet name. Give it some special model badging (Caprice, Monte Carlo, Bel Air, etc.) and offer the Aveo in special eye-catching paint colors.
• Do the same thing for the Chevrolet Cobalt, which is being outsold two to one by both the Toyota Corolla and Honda Civic.
• Start pushing the economy/roominess of the four-cylinder Chevrolet Malibu. The Malibu has gotten generally good buff mag reviews and is not a bad-looking car but sales are disappointing. It is being handily outsold by the older Ford Fusion. And, for every Malibu sold, three Camrys are sold. The Honda Accord also outsells the Malibu by threefold. This is a disgrace. There is a big upside market potential for the 'Bu, if properly promoted.
• Offer every four-cylinder GM model with a special Eco-Package option, featuring light alloy wheels, low resistance tires and lower numerical axle ratios. Primary exterior colors should be metallic silver or white, with leaf green pinstriping, some kind of distinctive IKEA-like, eco-fiber seat inserts and special badges.
These steps are short-term band-aids but will increase sales and build cash flow - both of which are sorely needed. You can't implement long-term stuff unless you stay alive in the short term.
Once upon a time, Lee Iococca saved Chrysler Corp. by offering a bunch of tarted-up, hokey models and special editions. The cargnoscenti laughed. But the public bought those odd little K-car variants and Chrysler got back on its feet financially.
Horse Droppings: Meanwhile, Barack Obama - He Who Knows All Yet Knows Nothing - has chimed in, opining that "GM … would thrive under the right policies." Yessir. And JFK would have thrived under the right bulletproof helmet.
So, what pray tell are you thinking, O Great Taupe One? A British Leyland-like nationalization? Yeah, that worked for a while. Not.
Or, perhaps, something like the Soviet GAZ (Gorky Automobile Plant) which has been producing the much-admired Volga since 1956 or so?
Maybe Chevy Volts made with prison labor? That'll bring the cost down. And the ones that don't pass the QC test can be modified and used as electric chairs.
Or a Saturn Hope. And a Pontiac Change. (The change would, of course, have a manual transmission so you could Change gears yourself.)
Perhaps a Cadillac Audacity.
America waits with bated breath to hear specifics, Mr. O.
God Bless America: There has been so much published about its perceived faults, shortcomings and flaws, that it is sometime hard to remember all that is good in the U.S. Victor Davis Hanson says it very well.
Excerpts: "The United States remains the most free and affluent country in the history of civilization. ... By almost any barometer, the United States remains the most fortunate country in the world. We continue to be the primary destination of immigrants, who risk their lives to have a chance at what we take for granted. Few in contrast are flocking to China, Russia, or India. ...
Americans are the wealthiest people in the history of civilization. Why so? Others have more iron ore, as much farmland, greater populations, and far more oil reserves. But uniquely in America there remains a system of merit, under which we prosper or fail to a greater extent on the basis of talent, not tribal affiliations, petty bribes, or institutionalized insider help. ... In the United States uniquely there is a culture of emulation rather than of resentment, which explains why neither Marxism nor aristocratic pretension ever became fully entrenched in America."
Read the whole article.
Erroneous Ecology: The latest issue of Villanova magazine (Spring 2008, which arrived 10 days after Summer began), carried an article about the university's "commitment to sustainability." Excerpt: "Dining Services has partnered with Aqua Health Waters, which will donate a percentage of its Villanova water sales to the Uganda Rural Fund and Catholic Relief Services."
Ummmm, doesn't Villanova have drinking fountains sprinkled throughout the campus as it did when I was there? And, if one must carry water on one's person, shouldn't such a student be encouraged to buy a bottle once and refill it as needed with tap water? Or use a thermos? Or a canteen? (permalink)
Out Of Africa: In an article titled 'Africa is giving nothing to anyone - apart from AIDS', Kevin Myers presents a compelling argument for making Africa lift itself from its own morass. Excerpts: "Even as we see African states refusing to take action to restore something resembling civilisation in Zimbabwe, the begging bowl for Ethiopia is being passed around to us, yet again. It is nearly 25 years since Ethiopia's (and Bob Geldof's) famous Feed The World campaign and in that time Ethiopia's population has grown from 33.5 million to 78 million today. So why on earth should I do anything to encourage further catastrophic demographic growth in that country? Where is the logic? There is none. To be sure, there are two things saying that logic doesn't count:
One is my conscience, and the other is the picture, yet again, of another wide-eyed child, yet again, gazing, yet again, at the camera, which yet again, captures the tragedy of ...
Sorry. My conscience has toured this territory on foot and financially. Unlike most of you, I have been to Ethiopia; like most of you, I have stumped up the loot to charities to stop starvation there. The wide-eyed boy-child we saved, 20 years or so ago, is now a priapic, Kalashnikov-bearing hearty, siring children whenever the whim takes him.
There is, no doubt a good argument why we should prolong this predatory and dysfunctional economic, social and sexual system; but I do not know what it is."
"Indeed, we now have almost an entire continent of sexually hyperactive indigents, with tens of millions of people who only survive because of help from the outside world." (hat tip - Kathy Shaidle)
Barack Channels Jimmah: Iran is a mess. And this theocratic throwback of a nation will soon have nukes. Whose fault is this? Place the blame squarely on that Unapologetically Sanctimonious Squirt, Jimmah Carter.
"During the 1970s, Shah Mohammad Reza Pahlavi, who had acceded to the monarchist governmental leadership role present throughout Iran's history, implemented economic, educational and social reforms. In 1978, in the midst of democratic reforms, the Shah and the Iranian people celebrated 2,500 years of Persian Monarchy. Thereafter, the Carter Administration, awkwardly wielding a contorted rhetoric of "human rights" thoughtlessly encouraged the overthrow of the Shah and thereby hastened the arrival of an exiled and obscure cleric Ayatollah Khomeini, and with him the Islamic Republic of Iran."
"President Carter's misguided approach to raising human rights (catered to fundamentalists and communists) in the context of US-Iran relations, led to the Shah's fall. Iran then became a theocratic abyss, whose radical fundamentalists tolerated far more abuse and torture of political prisoners than the Shah ever had, and supported a stream of terrorist acts and causes. The individuals who comprise Iran's theocracy are now the worlds, as well as the vast majority of the Iranian people's greatest enemies."
Let us not forget that Barack Obama is being advised by the unpronounceable Zbigniew Brzezinski, who was Carter's National Security Advisor and "a veteran of multiple failures in Iran."
Headline Of The Week is from The Onion: 'Bill Clinton Sadly Folds First Lady Dress Back Into Box'. "Clinton quietly placed the modest Dior frock inside his "first lady hope chest" along with two pearl earrings and wallpaper and fabric swatches."
Bad Pun Of The Day: A hangover is the wrath of grapes.
Monday July 14, 2008
Welcome To My Orphanage: Edmunds is reporting: "With development of the next-generation 2012 Camry well underway, Toyota also is studying whether to cancel the planned replacement for the Camry-based Avalon, which currently is slated to go into production in Kentucky in early 2010.
In its place, Toyota may opt to produce a long-wheelbase Camry for such markets as North America and the Middle East. The redesigned Camry currently is slated to begin production in mid-2011."
Oh great - another orphan in my garage. Lesssee ... my wife bought a new Continental and still owned it when Lincoln discontinued the Connie in 2002.
I still have a Plymouth in my garage - a brand which Chrysler abandoned in 2001.
Kill the Avalon? Jeez. I know that sales are down but Avalon still outsells the Buick LaCrosse and the Mercury Sable, two of its competitors. And, while there is more Ford Taurus metal being moved (June '08: 4,099 units versus 3,165 Avalons), the Taurus is a lower-priced offering than the Avi. And I've seen tons of Taurii in rental car lots. I've yet to spot an Avalon in such places.
Oh well. We now have almost 30,000 miles on my wife's 2005 Avalon and it is a fine, absolutely trouble-free vehicle. It's a keeper.
Exclusive: Meet the team in charge of designing the latest Honda and Acura grilles:
A Life Well Lived: Former White House press secretary Tony Snow has died at age 53, after a long bout with colon cancer.
There have been - in my memory - only a few press secretaries who rose above the job of flackery and molded the position to their own liking. Tony Snow was one of them.
A syndicated columnist, editor, TV anchor, radio show host and musician, Snow worked in nearly every medium in a career that spanned more than 30 years. Tony was the original anchor of 'Fox News Sunday' and hosted 'Weekend Live' and a radio program, 'The Tony Snow Show', before heading to the White House.
Born in Kentucky, Snow was the son of a teacher and nurse. He graduated from Davidson College in 1977 with a bachelor's degree in philosophy and taught briefly in Kenya before embarking on his journalism career.
Because of his love for writing, Tony took a job as an editorial writer for the Greensboro Record in North Carolina and went on to run the editorial pages at the Newport News Daily Press, Detroit News and Washington Times. He became a nationally syndicated columnist and, in 1991, became director of speechwriting for President George H.W. Bush.
Snow played six instruments - saxophone, trombone, flute, piccolo, accordion and guitar - and was in a D.C. cover band called Beats Workin'.
Those who knew him said he was a true gentleman and a delight to work with/for. He was a man who, according to Senate Republican Leader Mitch McConnell - who knew him well, "cherished his family, inspired through example and who sought to lift others."
Tony once remarked, "I don't know why I have cancer, and I don't much care. It is what it is - a plain and indisputable fact. Yet even while staring into a mirror darkly, great and stunning truths begin to take shape. Our maladies define a central feature of our existence: We are fallen. We are imperfect. Our bodies give out.
But despite this - because of it - God offers the possibility of salvation and grace. We don't know how the narrative of our lives will end, but we get to choose how to use the interval between now and the moment we meet our Creator face-to-face."
Requiescat In Pace. (permalink)
English Hedgerow: A town in Britain council has been accused of discrimination against homosexuals over plans to clear undergrowth from a notorious gay cruising spot.
The Bristol City Council wanted to prune bushes and remove cover from an area known as the Downs to improve the landscape and encourage rare wildlife. But a gay rights group has opposed the move, claiming that cutting back the bushes was "discriminating" to homosexual men who used the area for late night outdoor sex.
A row blew up last October when it was revealed that four fire fighters had been disciplined for allegedly disturbing a gay sex session by shining flashlights into the hedges. After complaints that their actions were homophobic, the senior officers from Avon Fire Service were fined £1,000 and transferred to other stations.
Peter Abraham, a Conservative councillor (and, apparently, the only person in Bristol with an ounce of common sense) asked: "How can it be discriminatory to clear land that might stop what is an illegal practice?"
I have two thoughts on the matter:
1. Apparently, the phrase "I'm goin' to the park to admire the greenery" is now gay. I promise to never say it again.
2. The first time I saw them onscreen, demanding that King Arthur bring them a shrubbery ("one that looks nice ... and not too expensive"), I knew that the Knights Who Say 'Ni!' were flaming homos.
Quote Of The Day is from Kathy Shaidle: "A Pope writing about married sexuality is like Stephen Hawking writing about the Tour de France. I'm sure that by some miracle the resulting prose could be moving, poetic and even more or less accurate. Brian Wilson wrote great songs about surfing but couldn't swim and hated 'fun'."
Friday July 11, 2008
Rickie Channels Frankie: In 1958, Frank Sinatra had a hit record titled 'Mr. Success', about a man who wasn't very good in business but considered himself successful anyway: "Never closed me a deal ... all at once I'm a wheel ... put your head on my chest ... and I'm Mr. Success."
Then there's Rick Wagoner, CEO of GM, who "has kept his job while the firm's stock has dropped 83%."
Douglas A. McIntyre points out that "Wagoner would not last a day at Honda."
From The Company That Wants You To Buy American: Peter DeLorenzo - the AutoExtremist - writes: "According to an insider in the printing business, Chrysler is outsourcing its U.S. dealer brochures to China - to be printed on Chinese paper - rather than source them with American printing and paper companies."
Beware Of False Gods: A recent article claims that God drives a 1985 Nissan Maxima. I think not. God is obviously a Plymouth man. The Bible states that he drove Adam and Eve from the Garden of Eden in a Fury.
The View From IKEA: Last week, we shopped at the IKEA store in Portland. Had lunch in the cafeteria, too - always a treat - good food and a great value.
I'm a sucker for IKEA's meatball platter - mashed potatoes with meatballs, cream sauce and lingonberry jam, all for under five bucks. But to get to the restaurant, you have to wander through IKEA's meandering Orwellian maze of furniture displays along with all the other
lemmings ... ummmm ... shoppers.
The IKEA experience is always interesting ... (more >>>)
Attention Gun Guys: Everything is succinctly explained by one of NRO's readers: "Obama's position on the second amendment is crystal clear. He believes in an individual right to bear arms subject to reasonable restrictions, and all restrictions are reasonable."
Mega Dittos: If Rush Limbaugh were President, he says he would do the following:
1. Open the continental shelf to drilling. Ditto the Arctic National Wildlife Refuge.
2. Establish a 17% flat tax.
3. Privatize Social Security.
4. Give parents school vouchers to break the monopoly of public education.
5. Revoke Jimmy Carter's passport while he is out of the country.
6. Abandon all government policies based on the hoax of man-made global warming.
I like it. But I would add:
7. Ban unfunded mandates by federal agencies. Summarily fire any agency head who tries to issue one.
8. Veto any new law submitted by Congress, unless three other laws are abolished. We used to be a Nation of Laws. Now we are a Nation of Too Many Laws. We need to enforce the laws already on the books.
9. Require federal prisons to seek out lower cost alternatives for inmates serving sentences of 10 years or more. Outsourcing to China is just one possibility. Cigarettes, weight machines and cable television will be banned. Temperatures will be maintained at 64 degrees F in the winter and 85 in the summer. A 1,500 calorie daily food intake will be provided. Health care will be palliative only (Level 1: The Iron Bar Standard), unless paid for by friends or relatives. (If you have a chronic disease; don't do the crime.)
10. Terrorists will receive closed-to-the-public-and-media military trials. They are wartime saboteurs and should get the same treatment as those in WW II.
Thought For Today: Birds of a feather flock together ... and crap on your car.
Wednesday July 9, 2008
Lincoln MKS: Lesssee ... $45K for a V6 Taurus-based vehicle and a dash which looks borrowed from a Toyota Avalon Limited? No, wait. It's not as nice as the Avi's.
Oh, Lincoln. You coulda been a contender. If only you had styling that's not a generic sedan hodgepodge.
People In Glass Trucks Shouldn't Throw Stones. Not at gas pumps, at least. As I drive around, I see a lot of glass trucks - pickup trucks with trapezoidal aluminum frame racks, designed to carry glass sheets on both sides of the truck.
The ones I see these days are large pickups, often F-150s or F250s. They are frequently seen at card lock stations, tanking up because they are thirsty beasts.
This is quite a contrast with the 1979-80 period - during the last gasoline crisis. In those days, very small glass shops with only one truck might use a big one with four-wheel drive for transporting large loads to muddy construction sites. Larger glass shops would have a single 4WD big rig, augmented by a bunch of smaller rack-trucks, often Ford Couriers or Chevy Luvs.
I think glaziers will be replacing many of the current gas-guzzling behemoths with smaller pickups. Again. A lot of other contractors and subcontractors will do the same with their work truck fleet. But most won't be thinking about vehicle replacement for a while ... until the housing slump abates.
It's a good thing that Ford has decided not to kill off the Ranger series. There may be a decent uptick in sales, especially if the Ranger is updated.
Plan? What Plan? The Wall Street Journal reported that General Motors plans to cut thousands of white-collar jobs and sell, or cease production of some if its brands. The General has supposedly set 2010 as a target for its return to profitability but the automaker has never announced any details on how it plans to achieve such a goal.
Chevrolet and Cadillac - brands at the core of GM's business - are reportedly safe from the ax. Hummer, Buick, Pontiac, Saab and Saturn could possibly be sold or killed completely.
Most analysts have posited that Saturn hasn't made money in its almost 20 years of existence. Saab is another reported money pit. GM has all but said that Hummer is dead.
A PR spokesman from The General later denied the whole thing and said that the next Buick model would have 22 portholes. Or something. And that the Energizer Bunny would drive a Chevy Volt Pace car in the '09 Indy 500. And that the Volt would appear in the next Transformers movie and would turn into Amelia Earhart.
I have no idea what is going on. I don't think General Motors does either. The phrase "rearranging hydrogen atoms on the Hindenburg" comes to mind.
Bush Lied; Duncan Hines Died: So ... it turns out there was yellowcake after all. Saddam Hussein had 550 tons of the stuff, which - once refined - could make 142 nuclear weapons. But yellowcake wasn't all they found in Iraq. According to the AP, the military also discovered "four devices for controlled radiation exposure ... that could potentially be used in a weapon."
I would like to know when that sanctimonious Joe Wilson and his pouty, secret-agent wife will kneel on the Capital steps and bend over for a very public ass-kicking? And when will George W. get his public apology from the mainstream media? And the Democrats? And the Loud Left?
Guess I won't hold my breath.
Who Says The Rich Don't Pay More Taxes? The U.S. tax system is highly progressive. "The top 1% of income earners, by household, paid more than 39% of all federal income taxes in 2005, the top 10% paid more than 70%, and the top 50% paid almost 97%, whereas the bottom 50% paid a little over 3%. Further, 32% of all tax returns filed in 2005 were from people who paid no federal income tax at all."
Dear Perpetually Outraged ... go f**k yourselves. A postcard featuring a cute puppy sitting in a policeman's hat advertising a Scottish police force's new telephone number "has sparked outrage from Muslims." When will the British regrow their spines and kick these ingrates out of their country before it's totally ruined?
Rachel Lucas feels the same way.
Restaurant Review: Bugatti's Ristorante; West Linn, OR. Simple, trendy decor combined with homemade Italian food and good service made for a good dining experience.
The portions are adequate but the taste is delicious, with some unusual combinations offered. It's a bit pricey but we'd return here again if we're in the area. (permalink)
More Proof People Have Too Much Money: Archie McPhee is selling Bacon-Scented, Bacon-Print Tuxedos. For less than $100 - style on a budget! Excerpt: "With Uncle Oinker's Bacon Scented Bacon Print Tuxedo. You can get married in bacon, get confirmed in bacon or go to the Oscars in bacon! Wait until Joan Rivers gets a whiff of you." Buy one now - just to outrage those angry Brit-Muzzies!
Better yet, maybe Bonnie Prince Charlie could wear one whilst piloting his semi-vintage Aston Martin which has been converted to run on white wine. Mmmmm. Bacon and white wine.
Corn - The Anti-Capitalist Veggie: Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a World Bank report. The damning assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam.
Quote Of The Day is from Philip K. Dick: "Reality is that which, when you stop believing in it, doesn't go away."
Monday July 7, 2008
Separated At Birth: Many auto buffs are remarking that the new 2009 BMW 7-Series looks like the Lexus LS460, especially from the rear.
I dunno. It's hard to judge from photos - the two may appear quite different when viewed in person. The problem is that all cars are starting to look like one another. One explanation is convergence. Another is that dramatic changes in car styling have disappeared as the basic machine has evolved. The third issue is that aerodynamics, safety regs and competitive interior packaging requirements makes it more difficult to be distinctive.
My thoughts: every car manufacturer copies one another to some extent. Meanwhile Hyundai copies everybody.
Expensive Charge: The Wall Street Journal reports that GM is in trouble over development of the electric Chevy Volt, the oft-promised, yet-to-be-sold car that goes only 40 miles on a six-hour charge. "With each hectic advance in the development process, the expected sticker price to consumers has gone up. Reportedly, off-the-shelf electrical fixtures, such as headlights and taillights, won't suffice because they draw too much power. At last leakage, GM is saying now the Volt may need a sticker price of $45,000."
WSJ opines that "GM's leaders are not nuts, and yet to pour hundreds of millions into a race to launch an electric car, the Chevy Volt, guaranteed to lose money on every unit sold, begins to seem a peculiar strategy for a company in dire liquidity straits. With each hectic advance in the development process, the expected sticker price to consumers has gone up. Reportedly, off-the-shelf electrical fixtures, such as headlights and taillights, won't suffice because they draw too much power. At last leakage, GM is saying now the Volt may need a sticker price of $45,000."
"They justify the costs and risks of the Volt as a way of changing GM's image in the minds of consumers and politicians. To commit a pun, the Volt is GM's vehicle for making a bailout of GM politically acceptable. The company has already started signaling it expects Washington to provide a whopping $7,000 tax credit to Volt purchasers. In Europe and the U.S., under whatever fuel economy and emissions regulations prevail, GM also expects special favoritism for the Volt. The goal is to re-enact the flex-fuel hoax, in which GM receives extra credit for making cars that can burn 85% ethanol, even if they never see a drop of such fuel."
William Katz quips, "Remember when a Chevy was a budget car for people starting out? More brilliance from GM."
Put The Blame Where It Belongs: 77 percent of consumers single out the U.S. government's failure to "implement an effective energy policy as a root cause for high gas prices." Yes, and they've had 30+ years to do so, during Republican times and Democratic times.
Jean Valjean, a Lucianne.com poster, quipped: "I'm waiting for the conversion kit that allows my car to run on emissions from congressional gas bags and be lubricated by snake oil from same. That should make it both perpetual motion and maintenance free."
Drive-In Memories: The one drive-in chain I remember from early childhood is Hot Shoppes. My parents used to stop at the one on Hunting Park Avenue, west of Broad Street in North Philadelphia. The burgers were very thick and juicy (a real treat for me) and the car hops wore snappy uniforms.
Hot Shoppes began as A&W Root Beer stands and were owned by Marriott. In 1927, Hot Shoppes was born, adapting a colonial architectural style with a bright orange roof. They looked a lot like Howard Johnson's, except that they offered car hop service. And ... (more >>>)
What Ever Happened To Journalism? Jed Babbin writes that Tim Russert's funeral was "a black day for journalism in NBC: Russert's death released one of the last brakes slowing NBC's descent into political activism and journalistic irrelevance. NBC was once the proud home of real journalists. People such as Chet Huntley and David Brinkley brought its standards to - and above - the level prevalent in most news organizations. But now, it's an asylum for people such as Chris Matthews and Keith Olbermann."
Maybe they should change the name from NBC News to NBC Advocacy. (permalink)
Headline Of The Week (so far) is from Scott Ott at Scrappleface: 'Congress to Halt Closing of Unprofitable Starbucks'. Excerpt: "Democrats in Congress today plan to introduce a bill to halt the recently-announced closing of some 600 Starbucks coffee stores, noting that the displacement of 12,000 Starbucks baristas would overwhelm government aid offices not prepared to handle so many clients for whom English is a second language.
Baristas, those who serve Starbucks beverages, speak a peculiar dialect that combines pseudo-Italian and American slang with inflections borrowed from ancient hemp-smoking cultures."
"These people can't just walk out of Starbucks and get a job at a grocery store or a factory," said House Majority Leader Nancy Pelosi (D-CA). "They would need ESL classes and cultural training to learn how to relate to ordinary Americans and function in society."
Thought For Today: He who laughs last, thinks slowest.
Thursday July 3, 2008
Facel Vega: For every athlete, there's a competitor. For every nation, there's an enemy. For every political candidate, there's an opponent. And if there isn't, the press will invent one. So ... (more >>>)
Doomed Unionists: Be glad you're not a United Auto Worker. Douglas A. McIntyre of 24/7 Wall St. reports, "The UAW's members have become prisoners of the economic war, used now as galley slaves rowing a fleet of doomed ships of into the hellish center of an oil-crazed war between OPEC and the US dollar. All of them will drown shackled to their ships.
It was supposed to be different. The union cut a deal to save some jobs and take control of its own pension and retirement packages. A part of the consideration meant to fund those pools was to come in the form of car company stock.
Now, the industry is falling apart, and the UAW has no chance to get out."
Doug concludes: "The UAW cannot escape responsibility ... they were a sea lamprey attached to the big car companies, living off the success of their hosts. They showed no alarm when Detroit moved almost its entire production cycle to SUVs and pick-ups. The top auto executives will not lose their jobs, but the workers on the assembly line will."
The top guys always wear parachutes. Golden ones.
Summer Sag: Car sales were generally dismal for June. According to Autodata, the overall market fell 18.3 percent. It was the worst June for the industry in 17 years.
Chrysler was the worst - down 36%. The Dodge Durango was off 67 percent, Chrysler Aspen down 49% and Jeep Commander dropped 68%. And Chrysler's cars led the slump, falling 49%, while trucks slid "only" 30%. Poor car sales relative to gas-guzzling SUVs and trucks indicate just how dismal Chrysler's non-truck offerings really are. These data forecast a Chrysler Death Spiral. Chapter 11 may be just around the next turn. Dead man's curve, maybe?
FoMoCo's sales dropped 28.1% overall. Truck sales were down 36%. Big SUVs are dead - the Expedition was off 59.8 percent, the Explorer was down 52.0%. The Taurus dropped 54% - a no-confidence indicator for the dull-as-ditchwater model formerly known as the 500. But Fusion sales were up 18.4%. Ford is hurting because it still has too many trucks and SUVs in its portfolio, representing almost 65% of sales.
On a happier note, Honda sales were up 13.8 percent. The Fit was up 101%, Accord up 55%, and Civic up 23%. Honda had two of the top five selling cars in the US during June, the Civic and Accord. Car sales make up 69% of Honda's offerings; truck and SUV represent only 31% of sales.
Toyota sales were down a surprising 21.5%; big sedans like the Avalon and Lexus LS460 were off over 42%. Even the Camry was down 10.8%. Corolla sales up 15.5% but the Yaris was down 7.5%. Sales of the budget Scion brand were up only 5.6%. Lexus sales were off by 30% - much worse than competitors BMW (down 17%) or Mercedes (no change). Toyota's mix is similar to Honda - car sales 65.6%; truck, van and SUV sales 34.4% - and, therefore, should be a winner. But the June sales numbers indicate otherwise. Toyota claimed it didn't have enough of its fuel-efficient Prius, Corolla or Yaris cars at dealerships to keep up with demand.
GM's sales dropped only 18.2 percent for the month, helped by a big month-end blowout sale. All brands were down but Hummer took the cake with a whopping 59+% drop. Saab was down by 57%; Buick was off by almost 42%. Looking at specific models, Caddy CTS sales were up 16%, Chevy Cobalt sales were up almost 22% (although the little Aveo was down by almost 20%), Malibu sales were up 73+% (mostly at the expense of Impala sales), Pontiac G6 was up 34.2% and the Saturn Aura sedan was up 25.6%. In the SUV world, Cadillac SXR sales were up by 12%, Saturn Vue was up 24.8% and Chevy Equinox sales increased by an inexplicable 45.9%.
Nissan sales declined 17.7 percent overall, with trucks off 37.9%. The gas-hungry Titan pickup and Pathfinder SUV models were down by over 71% each.
All of the above numbers are not adjusted for 'selling days' - an antiquated concept, since so many dealers are now open for business seven days a week and consumers gather decision-making information 24/7 on the net.
Industrial Art: Simple design often yields elegant, minimalist art. A piece - unearthed last week from a forgotten storage box - is a square bin with a hinged lid made from clear Plexiglas. I designed it and my company built it some 20-25 years ago to display colorful candies. Six of these were placed inside a custom-fitted rectangular Plexiglas case, which was sited on a retailer's countertop. When a customer wanted to buy some candy, a clerk removed the appropriate box using the handle and opened the lid, pouring the desired amount into a suitable bag or carton.
The entire design is water-clear transparent acrylic, including the hinge for the top. Such hinges are commonplace today but, at the time this item was manufactured, were brand new. My firm was the first to use them commercially.
Because clear acrylic has no color of its own, it doesn't compete for attention with the product offering. But as an empty vessel, when the light is just right, it becomes something more than a mere container - an eye-catching, light-reflecting industrial sculpture.
Our Long National Nightmare Is Over: Starbucks is closing 600 stores in the U.S.
I Heart Nukes: John McCain is a supporter of nuclear power and wants 45 plants in operation in the U.S., by 2030. Me, too. I can't wait for mini-nuke plants like the working model Martin Prince made for the children's contest in The Simpsons 'Homer's Enemy' episode from 1997: "Behold, the power plant of the future, today!"
I know just where I'll put mine.
Geezer Joke: At a mall food court, an old man was staring intently at a teenager sitting at a nearby table. The teen had spiky hair in a variety of colors, including green, red, orange, and blue.
Finally, the kid sarcastically asked, "What's the matter old man, never done anything wild in your life?"
The geezer replied, "Got drunk once and had sex with a peacock. I was just wondering if you were my son."
Tuesday July 1, 2008
Master Of The Road: The 1949 Buick Roadmaster Estate Wagon weighed 4500 pounds; Buick ads hyped "honest heft that levels the miles with majestic smoothness." You could tell that it was a Roadmaster by the four portholes (officially name: VentiPorts) along the side. Lesser Buick models only got 3 holes. The '49s were the first all-new postwar design from Buick and were the first models to feature ... (more >>>)
The View From The Precipice: "The stock of General Motors has dropped to the lowest point in (over 50 years). GM and Ford may be better able to do business under Chapter 11 protection," short-seller James Chanos of Kynikos Associates Ltd. said on Bloomberg Television. "One of the better things these companies could do is go bankrupt,'' quipped Chanos, whose mostly bearish hedge fund bet against Enron Corp. in 2001 prior to its bankruptcy. "I am not saying liquidate, but go bankrupt and reorganize. Then they would have a fighting chance.''
GM had a working capital deficit of $10.9 billion at the end of the first quarter, while Ford's was $9.04 billion, according to data compiled by Bloomberg. Chanos said the companies' working capital positions are "dire'' and that investors focusing on their cash balances are being misled.
The company now has the smallest market capitalization in the Dow Jones Industrial Average, of which it has been a component since 1925. GM share price closed yesterday at $11.50. Shares have traded as high as $43 over the past year. In April 2000, the stock hit $93.62/share.
Toyota is now worth roughly 25 times as much as GM.
All of the Detroit automakers are in trouble. Sales are dropping precipitously, especially large pickups and SUVs. As I wrote in The Perfect Storm (10/06): "Start with a bad product mix. Or, more accurately, the wrong product mix for the times. You'd think that the Big 2.5 would have learned after the oil crises of 1973 and 1980. But they didn't. Instead of offering a balanced portfolio of vehicles, they continually reacted to the fad-of-the-moment, developing products which were no longer desirable by the time they were introduced."
That said, I think Chrysler is in the worst shape in terms of product desirability. But GM is a close second with too many offerings and a generally unappealing mix - at least in the eyes of consumers. (The Corvette is great; Cadillac's CTS as well as Saturn's new offerings have been praised by the buff mags but have not sold especially well.) Ford has pared its costs and is adjusting its product portfolio; the question is: can it finish the job before it runs out of money.
The 24/7 Wall St. site offers bankruptcy odds on publicly-traded companies. (Chrysler is excluded because it's now private.) Betting on bankruptcies between now and the end of 2008, the odds "favor" airlines, publishing media and financial firms.
The most likely to go Chapter 11 are: AMR (American Airlines) - given a 1 in 2 chance. Followed by UAL (United Air; 1 in 4), Northwest (airline; 1:5), Gatehouse (newspapers; 1:5) and Delta (airline; 1:10). General Motors is down the pack at 1 in 25 odds, behind Lee Enterprises (newspapers; 1:15) and tied with Lehman Bros. (brokerage house), Continental (airline) and Wachovia (bank).
When my wife and I visited the Philadelphia area in 2006, it seemed half of the banks we saw were wearing Wachovia signs. The 6th and Chestnut branch - catty-cornered from historic Independence Hall - had badly rotted wood windowsills on the ground floor. I should have taken that as a sign that there was rot elsewhere at the mega-bank.
Ford is given a 1 in 35 chance of bankruptcy this year. That almost sounds optimistic, compared with these other troubled corporations.
In March of 2006, I reported that I and three of my fellow geezer car buddies were convinced that General Motors would eventually go bankrupt. We still are. All of us are business-oriented, having owned our own firms. One is a ex-employee of a Tier I supplier to Detroit.
Forget sophisticated cash flow analysis, reading the details of 10-K filings, etc. It's our gut feel - based on lack of good product, GM's severe and continuing misreading of the market, the number of GM cars seen in rental lots, the substantial off-price deals being offered on too-many models and the lack of interest by any of our friends - or their children - in owning anything made by The General. Another tip-off is the bankruptcy of several key Tier I suppliers. These and other suppliers will force price increases on GM - a company which can't seem to raise its own prices in the marketplace because of low perceived value by prospective customers. That makes the squeeze tighter. And the cash burn faster.
We blame the once-great auto giant's demise on numerous people: 1) GM's top management (not just Wagoner but everyone from Roger Smith forward), 2) the UAW (and GM's top management for caving into the UAW's ever-escalating demands over the last 25 years) and 3) every senior GM marketing, brand and product manager from 1980 forward.
We bemoan all of the major and costly misfires by General Motors over the past quarter century, including the mid-80s look-alike sedans, the Cimarron, the shrunken Cadillac fiasco of 1986, the Catera, the Allante, the death of Oldsmobile, the demise of the high-profit Rivera/Toronado/Eldorado trio, the marginalization of Pontiac, the irrelevance of Buick, the unfulfilled promises of the Saturn brand, etc. The cumulative effect of these mistakes is the severe erosion of GM's once-loyal customer base.
The only thing which might buy General Motors some time is if Chrysler goes belly up first. It is very possible that this would drain some of Chrysler's customer pool into GM's dry creek. (permalink)
Sunday Feast: I cooked two filets mignon on the grill. My wife prepared Omaha Steaks' baked stuffed potatoes (Father's Day present from my daughter) and we had a bottle of 2004 Cabernet Sauvignon from Walla Walla's Seven Hills Winery. Excellent!
The wine is described as "a medium-bodied red of deep color. By nose and mouth, it shows black and red fruits, sweet spices, vanillin and red plum overtones. The diverse vineyard sites show in a pleasing range of flavors and accessible structure. Polished gentle tannins and a slight brightness make this an inviting mealtime choice."
During our trip to Walla Walla last year, we visited the winery but bought only a single bottle of this fine wine. I wished we had purchased more. But we found some locally last week and purchased several additional bottles.
The 'nose' on this wine was distinctive and exceptional. And the taste was just fine.
"Our wines age in a temperature and humidity controlled, sky-lit barrel room surrounded by massive beams and rafters. Guests may look in from the tasting room as they sample a selection of current releases, or as they dine at the Whitehouse-Crawford Restaurant." The winery is next door to the Whitehouse-Crawford Restaurant. A glass wall permits diners to check out the winemaking activity at the Seven Hills Winery.
The Cab is a blend of 81% Cabernet Sauvignon, 9% Cabernet Franc and 10% Merlot. I recommend it highly. I also recommend the Whitehouse-Crawford if your travels take you to Walla Walla.
Gas Wasn't Always King: According to Robert F. Scott, writing in Automobile Quarterly (Vol. 5, No. 2 - 1966), "In 1900, 38% of the automobiles built in the U.S. were electrically powered, far surpassing the modest 22% figure of gasoline-powered vehicles and edging close to the 40% enjoyed by steam automobiles."
Double Congrats ... to Kathy Shaidle (Five Feet Of Fury) who got married and got a gun permit.
Thought For Today: Nothing is foolproof to a sufficiently talented fool.
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