Just Let Me Die at the Country Club


Sholnn Freeman (no relation) over at the Washington Post, recently reported Detroit’s collective decision in the automobile business to just throw in the towel.

Autoindustry
Sholnn Freeman (no relation) over at the Washington Post, recently reported Detroit’s collective decision in the automobile business to just throw in the towel.

Auto
industry leaders and the United Auto Workers yesterday put up a united
front in opposition to congressionally mandated improvements in vehicle
fuel economy…
…executives appearing at a House hearing not only rejected tough
rules sought by Democrats and environmentalists, but also opposed a
Bush administration proposal to improve mileage by 4 percent a year
over the next 10 years. “It’s time to move away from proposals that don’t solve the problem,” said G. Richard Wagoner Jr., chief executive of General Motors.

Gmrichardwagoner
Well gosh, Rich, what’s your plan? To just keep pumpin’ out those SUVs
and pickup trucks until the world comes around to seeing things your
way?
Every other automaker in the world has looked at buying or merging
with GM, Ford and Chrysler and made the decision to let all of you
float on off into bankruptcy, like polar bears, on your own ice-raft.
In a piece of irony much of your own making, the ice is on the melt and
so are your options.
I know the ‘proposal’ you guys have in mind and it has as much
chance as a wet polar bear in Lee Iacocca’s living room—financial
restructuring that offloads your pension obligations to the feds,
essentially to me and my neighbors. There is a penalty, boys, for
decades of picking the wrong horse. It’s called going broke, under,
kaput, folding your tent and stealing away.
Stealing away is the right term, because you and your top henchmen
will have gutted the last financial remains of the flopping fish that
is the automotive industry in this country, before its last twitch.
What’s in the employment contract, Rich? $40 mil to go away?
Getting back to the Post article,

Wagoner
questioned the role of fuel-economy rules in reducing greenhouse gases
or oil consumption since mandates were implemented in the mid-1970s.

Prius
It’s a moot question. It doesn’t damn well matter what the rules were
(or are). The American driving public voted with their wallets. They
bought well made, innovative, fuel efficient, mostly Japanese cars.
They bought them by the tens of thousands to begin with, then the
hundreds of thousands.
Brand loyalty returned, it just wasn’t to American brands.
There was a time when Detroit upheld a proud (and deserved)
tradition of leading the world in automaking technology. Cadillac was
the standard of the world.
Wagoner and his counterpart at Ford and Chrysler brought Detroit to
Congress, sniveling, sucking on its blanket, throwing a tantrum on
behalf of someone, anyone to save its sorry, incompetent ass. It was sad to see.
Fordalanmulally
Wagoner was joined at the House Energy and Commerce subcommittee on
energy and air quality hearing by Alan R. Mulally of Ford, Tom LaSorda
of DaimlerChrysler’s Chrysler Group, James E. Press of Toyota and
Ronald A. Gettelfinger of the United Auto Workers.
Three terrified auto executives, a despondent union guy and Jim
Press of Toyota? What was he doing there, measuring Al Mulally for the
runners-up suit? Bet Jim cruised into town in his Prius, getting around
35 miles per gallon. For 16 years, fuel standards have been stuck Chryslertomlasorda
at 27.5 aggregate fleet miles per gallon. Starting there and realizing
the wished-for 4% annual improvement in mileage, Press’s Prius is already rated successful under those too restrictive terms until approximately 2015.
By then, of course, Toyota will no doubt have cars on the market
that get 50 or 60 mpg, are mostly electric, quiet and fun to drive.
Wagoner will be playing golf at Bloomfield Hills and GM, if it’s
still around, will be looking for some other loophole that allows them
to not face the music of manufacturing reality. The mantra of
executives at the (formerly) Big Three will be
“Oh Lord, just please let me die at the country club, it’s not all that much to ask.”

The
auto industry is prepared to fight over fuel-economy regulation. Its
lobbyists include veterans of past fuel-economy fights. The industry
also has thousands of dealers around the country who can be called upon
to contact members of Congress or visit Capitol Hill. The UAW can
unleash its members to press the industry’s case.

Autodealership
The thousands of dealers are on that same shrinking pack of ice with
the polar bears. Might be that Rick, Al and Tom haven’t told them yet,
but what future is left of U.S. built automobiles will surely be sold
over the Internet, delivered to regional pickup points and serviced by
a whole new structure of Jiffy-Lube type service centers.
No room in that constantly shrinking profit structure for dealers.
Unfortunately, the Asian makers will probably lead that charge and
Detroit will be allowed to pocket precious little profit. Detroit
seldom leads these days.

Gettelfinger said
stringent increases in fuel-economy standards could lead to a
“calamitous result” of factory closings, tens of thousands of layoffs
and the loss of retiree health care, already a primary target of
industry cost-cutters. Improving vehicle gas mileage could cost as much
as $44 billion at GM alone, Wagoner said.

What are these guys smoking?
If trying to catch up to a profitable segment of the industry that is leaving Detroit increasingly behind, leads to calamitous factory closings,
then Wagoner may as well cancel tomorrow’s tee-time and stop praying.
If improving vehicle gas mileage, essentially downsizing cars, costs
$44 billion, then it’s Katy-bar-the-door. Polls show that 75% of Americans favor higher mileage standards.
The obvious message from that poll is that Detroit either produces
those cars, –or 75% of its potential customer base will buy them from someone who does.
Subaruhybridcars
Toyota was there in Washington, standing shoulder to shoulder with Detroit, hoping they win their plea to
get absolution from mileage standards. Toyota, Honda, Kia and Subaru
have done very well riding in the wake of those SUV and pickup land
yachts Detroit has been building.
But they have a different take on their reason for being, one that
Detroit has yet to understand. Toyota, Honda, Kia and Subaru feel it is
their mandate to listen to their buyers instead of pumping the
quarterly money-well for their stockholders.
Amazingly, it works. Astonishingly, there’s a profit in better mousetraps.
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