Steve Parker Motoring / The Car Nut

WALL STREET FIRM TO BUY CHRYSLER?

The news came as kind of a shock on May 8, 1998 --- That Germany's gigantic and successful Daimler, with a hand in everything concerning transport in Europe and beyond, including aerospace, was purchasing (though at the time they called it a "merger") the venerable Chrysler Corporation.

What many Americans considered "their" Chrysler Corporation, the company started so many decades ago by an engineer who built locomotives and dabbled in cars, Walter P. Chrysler, was turning GERMAN, of all things. The Chrysler Building in New York City is a treasured landmark; when its interior was redone a few years ago, Chrysler's own private dining room was found, along with a private club at the top of the building where Walter P. could meet and greet his contemporaries of the times, the wealthiest men in America, those from downtown who worked on Wall Street. And we had all been up and down with Chrysler, through the Iaccoca years, when the US Congress loaned (or bailed-out, depending on your perspective) about $1 billion to save the company and Iaccoca took a $1 annual salary and convinced friends like Frank Sinatra to make TV commercials for the company --- free of charge. Iaccoca turned down the US Presidency (at the time, he was a shoo-in, but his experience with Congress left him forever embittered to politics and politicians) and today he continues to lead the fight to cure diabetes, the disease which claimed his beloved first wife, Mary.

Here's how the media reported the "merger":

"DETROIT -- May 8, 1998 --- Chrysler Corp is being acquired by Germany's Daimler-Benz for more than $40 billion in stock in a deal that will reshape the carmaking industry and give both companies a bigger stake in the global market.

The deal will rank as the biggest industrial merger ever.

The new company, DaimlerChrysler, combines a German luxury carmaker with the No.3 US carmaker which once used a ''Buy American'' slogan and is now known for jeeps, minivans and light trucks.

At a joint news conference in London, the chairmen of both companies said the deal increases their potential for growth."

And here's some of what AUTOMOTIVE NEWS' Bradford Wernle is saying today, February 25, 2007, which has a naturally business-community-bred enthusiastic feeling for Chrysler, and for saving it:

The Chrysler group may well be the world's cheapest car company.

With unfunded health care liabilities of $16.7 billion hanging over any prospective deal, DaimlerChrysler  might have to pay a buyer several billion dollars just to take the Chrysler group off its hands.

But contrary to what the stock market says, Chrysler might be worth something -- at least for the right buyer.

Even after subtracting health care liabilities, the automotive operations still have a net value of $9 billion, says analyst Adam Jonas of Morgan Stanley Research in London. (Photo - Tom Lasorda, head man at the Chrysler Division of DaimlerChrysler).

At those valuations, Chrysler would be "the cheapest car company in the world," Jonas writes.

Chrysler's most attractive assets would include flexible assembly plants, a lean work force, the iconic Jeep brand, segment-leading minivans, solid pickups and a strong lineup of rear-drive sedans.

Here's how Jonas values Chrysler's automotive assets:

• Dodge: $6.6 billion.
• Jeep: $5.3 billion.
• Chrysler brand: $3.2 billion.
• Global operations, such as Chrysler's stake in Magna Steyr: $1.4 billion.
• Joint ventures, such as Beijing Jeep: $682 million.
• Real estate, including the company headquarters, technical center and proving grounds: $1.4 billion.
• Deferred taxes and overfunded pension assets: $7.1 billion.
  
  The automotive operation doesn't include Chrysler Financial, which would add an additional $7.6 billion to the Chrysler group's total valuation.
  
  Prospective buyers will get a chance to see key elements of Chrysler's financials soon. Last week, Chrysler and its investment bank, JPMorgan Chase & Co., were preparing a prospectus for buyers. That document was expected to be ready for distribution last weekend.
  
  One potential buyer is General Motors, which already has held discussions with Chrysler. A GM-Chrysler combination would be in a strong position to demand cost concessions from the UAW.
  
  Presumably, GM would ask the union to help reduce Chrysler's costly obligation to provide health care to company employees when they retire, as well as current retirees and their spouses. That liability is estimated at $16.7 billion.
  
  On the other hand, GM would be saddled with too many dealerships and redundant products, says John Casesa, managing partner of the Casesa Shapiro Group LLC in New York. "It would be important for a buyer like GM to pay a low price because you will have to spend a lot to undo the overlap in people, plants and dealers," Casesa explains.
  
  GM is not the only potential bidder. The Financial Times reports that four private-equity groups  also are interested. But Volkswagen, Renault-Nissan, Hyundai, PSA/Peugeot-Citroen and Fiat say they are not interested."

So there we have it. The Chrysler Division of DaimlerChrysler appears for sale, and it might also spell the end of various Chrysler Divisions and a total and complete reorganization of the American automotive industry. According to some analysts (this one included), both GM and Ford Motor Company might find themselves in the same position as Chrysler in the not-too-distant future.

MEXICAN TRUCKS GAIN UNFETTERED ACCESS TO ALL HIGHWAYS IN THE USA --- CONCERNED? WE ARE!

It was announced today by officials of both nations, February 24th, at the world's busiest border crossing, between Tijuana, Mexico and San Ysidro, California, that as soon as April of this year a one-year test will begin allowing Mexican trucks and their drivers virtually unfettered access to all roads in the USA. This creates numerous problems, especially for southern California.

Here's how a San Diego newspaper covered it: "After more than a decade of fierce opposition, U.S. and Mexican officials came to the Otay Mesa border crossing yesterday (just south of San Diego) to announce a pilot program that will open highways on both sides of the border to truckers from either country. U.S. Transportation Secretary Mary E. Peters said the yearlong pilot program, which could start as early as April, will initially enroll 100 Mexican and 100 U.S. long-haul freight companies. She gave further details of plans first disclosed Thursday."

OK, this is what I see: The potential problems are all quite obvious. First, safety: Americans really have no idea of the safety and testing standards for these drivers and their trucks. However, anyone who has ever been in Mexico can say honestly that the average big-rig truck on that nation's highways generally seem older, more beat-up, more polluting and on average more unsafe than their American counterparts. And the 'smog' problem is not at all subjective; the Mexican trucks use a much dirtier form of diesel in their trucks then is now allowed to be sold in the USA. The smog/pollution problem is completely objective and on TV news tonight from Los Angeles, an official with the South Coast Air Management District, which monitors and regulates the air quality in the LA, San Diego and Orange County areas, flatly stated that there will definitely be increased cancer deaths in southern California and perhaps the rest of the nation, even from this one year test, which could go into effect in 40 days.

As for safety; as stated, anyone who has driven in Mexico, especially at night, knows that there seem to be no actual 'rules of the road'; the whole system is made-up of what anyone can "get away with", because the police which do patrol the main highways are interested in pulling over (and extorting) vehicles with US license plates --- In cities and towns, the extortion problem is even worse, as citizens from other nations (known by ther license plates or if they are driving a rental car) are regularly pulled over for no reason at all and forced to "pay the fine" or go to jail ... It's that simple. By the way, the operativer term is "mordida", literally, "the bite" ... That's what the bribes are called by everyone. Don't be shy ... Offer to pay it, and fast, and get your butt (and your friends and/or family) out of there! (Photo - San Ysidro border crossing, world's busiest).

It's much more of a wide-open, free-for-all catch-as-catch-can system in Mexico, with big-rig trucks running at high speeds with blown-out headlamps, no taillights, and trucks which appear to be running in extremely overweight condition. Another thing to expect when driving in Mexico is for the pavement to simply end, and you find yourself suddenly, abrubtly, driving on packed dirt. It's ok (and even maybe fun) if you're in a 4x4 of some kind, but generally is more of a potentially dangerous shock than anything else.

As for brakes and other safety systems --- One California Highway Patrol officer was quoted several months ago, when this 'test' was first proposed, that, "We can barely take care of the trucks on the US side of the border. The only Mexican trucks we'll have the manpower to inspect are those which are either already in an accident, already broken down on the side of the road, or so obviously unsafe that an officer has no choice but to pull them over".

The border crossing at San Ysidro, CA/Tijuana, Mexico, is already the busiest cross-nation border in  the entire world. On a typical day, there are waits of over three hours for the average vehicle. It's faster to walk across or take a taxi or the light rail you can pick up in San Diego, but truckers can't do that. They are bringing themselves and their 80 tons or so of 'whatever' with them.

Add several thousand more big-rig trucks to that mix and there is a health and safety disaster in the making. The Mexican trucks, of course, will be able to use other border crossings in California, Arizona, New Mexico and Texas, but like any other vehicle running on a deadline, they will be crossing at the border nearest to their destination, which, much of the time will probably be in southern California.

How about Mexico's driver testing procedures? Clearly, the rules and the testing in the USA is nowhere strict enough for big-rig drivers as it is, but it gets the job done and most civilian drivers can have a reasonable sense of safety when driving near a big-rig. All that is gone, however, with allowing these Mexican trucks and their drivers on thousands of miles of American roadways.

As one who personally is for an open-border system worldwide (trust, but verify, too), the addition of these thousands of big-rigs and their drivers with out USA-level safety, training and inspections makes me shudder in my driving shoes.

California's Highway 86, which runs from the Coachella Valley (where we live) south along the Salton Sea to the international border crossing at Mexicali/Calexico, is already well-known to police across the nation as possibly the single busiest smuggling route for humans, heroin, methamphetamine (both in and out of Mexico from where it's processed and made in the Palm Springs area) and all other kinds of contraband, now adds to the traffic on that route with thousands and thousands of big-rigs. Apart from the all-too-common deadly accidents on this route, usually involving either big-rigs and/or huge vacation motorhomes, the addition of these new, untested trucks and drivers is a frightening proposition.

This "experiment" may go on for only a year, but the Federal income tax was supposed to last for "only a year" as well, and somehow became permanent. This is an issue well worth your time and energy in calling and contacting all your state and federal representatives, at every level of government, because while we in southern California have suffered for decades with these vehicles and their drivers, this is now a USA-wide problem.

Either the drivers and their trucks get tested and certified at the same levels which are demanded in the USA, or they simply should not be allowed on our roadways. And the same goes for Canadian trucks and their drivers, too. (Photo - 2005 photo of San Ysidro border crossing).

'CAR NUT' APPEARANCE TUESDAY, FEBRUARY 27TH IN LOS ANGELES!

After engaging a PR guy from General Motors in debate on radio station KPCC, a National Public Radio outlet in Los Angeles, about the environmental impact and the future of cars and trucks (and that interview can be found below in this BLOG, just do a search for "KPCC"), I was contacted by the folks staging an event for Harvard, Stanford and Wharton MBA graduates on the topic of: Where to invest for the coming revolution in alternative fuels. It's happening this coming Tuesday at the Luxe Hotel in Brentwood, where the I-405 and Sunset Boulevard meet. (Photo - Harvard University).

Apart from the fuels topic, I'll also be talking about the effect Los Angeles and its denizens has traditionally had on the worldwide auto industry, and also about the new Bluetec diesels coming from Germany (and approved for California), all the hoopla about ethanol and if it's really the potential savior some say it is, Ford's ZEV engine, hybrids and the new plug-in hybrids coming soon from Toyota and GM, the effect of the new rules NHTSA will be using to test vehicle mileage ... and lots, lots more! Make your reservation to attend ... today! (Photo - More Harvard stuff).

To find out more about this event, to cover it as media or to make reservations to attend, simply click anywhere on this line.

M. WALTRIP TAKES ONE FOR THE TEAM ... AND THE SPORT

It was bad enough that Michael Waltrip was caught putting something akin to rocket fuel in his Toyota's gas tank and even worse ... got caught doing it ... and while not thrown out of the Daytona 500, because his sponsors told NASCAR they wanted their boy on the track (and in front of the TV cameras), finished in 30th position, two laps down. This week, Waltrip suddenly finds his Camry not catching enough speed at California Speedway and then 'graciously encouraging and allowing' his team mate, Dale Jarrett, to take the "champion's provisional", a typically-Byzantine NASCAR rule which allows former series champs to start a race even if they don't qualify by speed. But what is really going on, and how far will the "anti-Mikey" forces get in their efforts to remove M. Waltrip from the sport altogether?

Last week at Daytona, Michael Waltrip and his NAPA/Toyota team were caught, judged and executed by NASCAR --- Caught putting something in the fuel system (and it was not nitrous oxide, as some have opined), judged by whatever goes on in the "NASCAR trailer" and then executed --- Thrown out of the race. But Mikey's sponsors begged NASCAR to let him at least start the race ... NAPA, Toyota and all the others have spent too many millions to see their $$$ go down the drain. And one thing Mikey has with NASCAR is 'juice' ... and maybe that's what he had in his car, too!

But NASCAR still wanted to punish Mikey, and deservedly so. Our guess? Mikey got "the call", the infamous phone call from "someone" in NASCAR, but this time it was backward. Normally, "the call" tells a team that the inspectors might not be looking very closely at your car at the end of qualifying, end of the race, etc. (Photo - Dale Jarrett).

Like what happened at the Busch race in Mexico City a couple of years ago when an unheard-of Mexican driver, whose bio was not even on the NASCAR website, won the pole, thereby drawing many more thousands of fans to the track for the actual race and giving a tremendous (if false) story about this driver for Mexico's media to eat up. At the race, as we predicted, this guy's engine hand-grenaded after a hundred miles or less. Seems the engine block couldn't take the 700 or so horsepower that it was making ... But for qualifying, it was perfect!

So Mikey gets "the call" which tells him, essentially, to not qualify. Now Waltrip and his driver, Dale Jarrett, couldn't have orchestrated this part of it, but when they found themselves "on the bubble" for qualifying for the last spot on the starting grid for the "Auto Club 500", Jarrett took his "winner's provisional" without a second thought, we'd guess. (Photo - Older shot of DW and his car and l'il ol' fishin' boat, both emblazoned with sponsor decals and paint).

Everyone wins. Waltrip and his sponsors get probably more media notice then they would have otherwise, if Mikey had one of his typical rear-field starts and mid-field finishes (if he even did that well, with a race car which has not run one lap in competition so far this year outside of qualifying), the fans win because Mikey is right up in everyone's face, Toyota and NAPA win because Mikey gets plenty of PR and media attention, but come race time, he's gone, and NASCAR wins because everything has the appearance of a rule book which apparently works against cheaters.

Finally, no one is more of a sponsor whore than Mikey Waltrip --- Except his brother Darrell. A lot of  people are frankly sick of their constant shilling, which makes them both look and sound like the hired hands they are. Someone should tell them that the trick to proper product promotion is to appear as if you are not doing it in the first place. (Photo - Toyota Camry NASCAR race car).

Case in point: During the truck race on Friday night at The Cal, Mikey was in the SPEED booth (and how they can consistently use Mikey as a supposedly credible announcer, albeit a color commentator, when he's in the middle of one of the biggest cheating scandals to ever hit the sport ...) and one of the other guys reads a 'card' during a lull in the race for one of SPEED's popular shows, "Pinks". At its end, Waltrip commits a cardinal sin of broadcasting --- He continues to promote the "Pinks" show, although the other guy's read is over. Not only that, the only reason he used such poor judgment is because NAPA, one of his team's main sponsors, is also a "Pink's" sponsor, and he says so ... on-the-air, in the middle of the race, because, well, he figures he can! No one in the booth says anything contradictory, but everyone announcing suddenly got very quiet, and the next thing that happens is they break from the race for a commercial.

Mikey, we thought we knew ye --- But you and your brother are turning out to be two big pains in the butt!

THE 'C' IN DCX IS FOR SALE ... COULD GM BE AMONG THE BIDDERS?

It was the worst-kept 'secret' in the auto industry, and now we can tell you: Chrysler is for sale. Just a few years after "merging" with Chrysler, Daimler is looking to 'off' Their American Cousin, the company they purchased to learn how to make small, economical cars --- Of course the fact that the certified manufacturing genius who headed Chrysler's small car-making business quit as soon as the Germans took over meant things might change. And change they did. Today, Chrysler car and truck sales are in the dumps, the company insists on throwing a gas-hog Hemi engine into anything that'll stand still for 10 minutes, their "new" small cars are not nearly as appealing as their simple old Neon (and all the hi-po SEMA-type equipment which grew up around it) and Chrysler's retirement and health care obligations are possibly enough to bankrupt Daimler. What to do, what to do?

Though it was called a 'merger' when it happened, there were lawsuits filed quickly after DaimlerChrysler became an entity saying that in reality the move by Daimler was a take-over. When tapes of top Daimler execs saying as much surfaced, things only got worse for the newly-merged companies.

Today, Chrysler has a "For Sale" sign on the lawn at Highland Park, MI, and the Germans are looking to dump this money-loser on whoever can come up with some cash and a good story. (Photo - DCX's Jeep Division's  Wrangler).

Could that 'someone' be General Motors? GM needs help, especially in small-car manufacturing in the USA (it'd be a whole lot cheaper to make a car like the Chevy Aveo in the US than in Korea, by Daewoo, as it is now) and Chrysler could not only bring GM some of the manufacturing expertise and plants they need, but it could also invigorate both companies as GM would remain the world's biggest car-maker, and hold onto that title for many more years, though Toyota is yapping at their heels. With Chrysler on-board, though, GM might keep that title for longer, and that kind of thing is important to Detroit-type execs, no matter what they say publicly.

Also, with Kirk Kerkorian and his GM stock (and his man, Jerry York, was on the GM Board of  Directors and could come back), the MGM Grand multi-zillionaire might finally have the kind of impact on both GM and Chrysler which he has always wanted --- And through Kerkorian and York, their great buddy, Lido A. Iacocca, who sits quietly off on the sidelines, is  biding his time until he might have some "juice" once again not only at his beloved Chrysler, but also at gigantic GM, if the two should merge. 'Heck', Lee might figure, ''if they let an old guy like Bob Lutz' (and these two hated each other at Chrysler) have so much power at GM, virtually able to "green light" entire $1 billion platform projects with the stroke of his pen, maybe there's still room for him in the business, too. And you know what? America could use Lee Iacocca and his marketing genius. He and Lutz might be a formidable pair, even though they can't stand each other. People can get over those things ... If the price (and the power ... and use of the company jet) is right ...

It's also no secret that American car companies (The Former Big Three) have become mostly health care providers which only incidentally make cars and trucks. Health and retirement (H&R) payments have become the main outflows of cash for GM, FoMoCo and Chrysler. Several thousands of dollars on each and every car and truck they sell goes directly to these payments. Dropping those H&R costs could have an immediate effect on the cost of cars and trucks made in the USA.

Remember --- This is NOT the "fault" of the workers and/or their unions. No one held guns to the companies' heads when they signed these agreements with the UAW years ago. All the union contracts should be honored to n-th degree. (Photo - UAW workers on the line). It as the short-sightedness of American executives from the '50s, '60s and '70s which forced the companies into the untenable situations they now find themselves in today.

Looking at health care, there appears to be some hope: It's reported this week that Daimler is going to make a one-time $1 billion payment to the United Auto Workers to cover all present and future Chrysler retirees as far as their health care is concerned, and then the UAW will take-over and handle the details and run the program. This might be one kind of acceptable answer for everyone. Goodyear is looking at doing the same thing (again that $1 billion figure pops up) with the Steelworkers of America, who work in the many Goodyear plants still in the USA.

FOMOCO'S PROBLEMS SEEM DEEPER THAN FIRST REALIZED

Ford has resurrected the names Taurus and Sable for their (formerly named) 500 and Montego cars. And the company has announced, just weeks after its (late) arrival, rebates on the all-new EDGE, supposed savior of the company. Anyone who thinks Ford has even THOUGHT about their cars in the past ten years is going to be disappointed to find out that for the past thirty years or so, apart from Mustang sales to teenagers and Baby Boomers, and Crown Victoria sales to police, Ford has been a TRUCK company. A big truck company, but a truck company nonetheless ...

Just what IS going there at Dearborn, at FoMoCo's iconic headquarters building located at "One The American Road"?

With some new execs at the top (Alan Mulally from Boeing and Mark Fields, Ford's man-in-Japan who saved Mazda, now serving as second banana), Ford had better be in a hurry to design and sell some cars which Americans want to buy! PRODUCT IS KING! (Photo - Ford Edge).

Take a look at Ford's car product in the USA --- While the new Mondeo and the Ka in Europe are setting some sales records and are exciting, fun cars to look at and drive, Ford brings back a dead name from the fleet, leasing and rental industry (Taurus) and shoves it on a bigger, more expensive car than the Taurus was ever intended to be.

That's why they called the new car the 500 in the first place! To separate it in the consumer's mind from the moribund Taurus!

We wrote about this months ago --- That FoMoCo was going to have huge problems placing both the 500 and Fusion in the proper perspective in potential buyer's minds, even if they did put the name into the NASCAR shuffle a year before the car was available to the public. (Photo - Ford 500 ... uh, Taurus! Yeah, that's the ticket! Taurus!).

Now Ford is running TV and print ads detailing how "readers from Car & Driver" (or was it "Road &  Track"?) were "invited" to a magazine-sponsored event where (after eating a free lunch and getting some gifts) they then drove ALL-WHEEL DRIVE Fusions against the FRONT-WHEEL DRIVE competition. And guess what? The drivers thought the Fusion handled BETTER! Geez, what a shocker, huh? Seriously, how this spot ever got past the Federal Trade Commission is beyond me ... It's only a matter of time until one of the competitor companies complains to the FTC and this spot gets pulled, as it should be. (Photo - Ford Mondeo).

500, Fusion, Taurus ... And who the hell even KNOWS what a "Mercury" is these days! Ford is right at the point where they can make great, determined changes for the future, or let the company deteriorate completely in this country into a truck-maker. And you know what? They may be happy to do just that, and use the European, Asian (and China and Australia) markets to sell their cars. (Photo - Ford Ka).

WORLD'S DUMBEST CAR-RELATED PROMOTION

Perhaps dumber even than hard liquor companies sponsoring race   cars in NASCAR and elsewhere, the following promotion by Grey Goose Vodka, which somehow convinced Rolls-Royce (which is still supposed to have some class, even if they are owned by BMW) to participate in what has to be the "Stupidest Promotion of the Year (so far)" in the car business. We really can't say anymore about this quite unbelievable marketing move, an affront to anyone who likes Rolls-Royce cars, except to run the PR release from Grey Goose exactly as it has appeared in AutoSpectator.com. Well, here goes:

GREY GOOSE(R) "The World's Best Tasting Vodka," has teamed up with Rolls-Royce, the undisputed leader in the ultra-luxury sedan segment, to create two customized limited-edition Rolls-Royce Extended Wheelbase Phantoms to serve as a platform to promote their social responsibility message of enjoying a safe night on the town, while delivering a luxury experience that cannot be replicated. The public should look for the 2007 GREY GOOSE Rolls-Royce Extended Wheelbase Phantom at high-profile events and around the town, where trained chauffeurs will educate passengers on GREY GOOSE and the importance to "Sip Responsibly." Additionally, vehicles will be utilized to raise money for local and national charity partners and ultimately auctioned off at the end of the program for charity.

Embodying the best in luxury and exclusivity, the 2007 GREY GOOSE Rolls-Royce Extended Wheelbase Phantoms creates an environment representative of the GREY GOOSE brand. Passengers will be encapsulated within the GREY GOOSE experience through special features including custom blended GREY GOOSE signature blue exterior paint and plush upholstery, GREY GOOSE logo embroidered onto headrests and integrated into the trim of the car, grey chrome door tread plates, GREY GOOSE etched mirrors and sterling silver GREY GOOSE onlay on each of the mahogany-veneered door cappings. The new longer wheelbase Rolls-Royce Phantom is entirely hand-crafted in-house -- designed, engineered and hand-built by Rolls-Royce Motor Cars at Goodwood, England.

OK, Steve back here --- Now, as the release says, be sure to look for those two special Rollers at "high profile events" (God, this just gets worse as it goes on, doesn't it? Can't you just see Paris Hilton getting involved with this sleazy deal?).

FIRST PRIMEDIA FATALITY NAMED --- MOTOR TREND CLASSIC BITES THE DUST

MOTOR TREND CLASSIC, a bi-monthly spin-off of Motor Trend, seems to be the first immediate fatality of Primedia’s recent announcement that they are exploring the sale of the company’s division where all their car magazines, including Motor Trend, Hot Rod, Car Craft, etc, made their home.

Lack of advertisers, lack of readers and subscribers and (we guess, educatedly) not much money for the contributors, such as Matt Stone and Angus Mackenzie, both of whom were already drawing paychecks from Primedia for their Motor Trend work, are among the reasons  cited as culprits which contributed to the mag’s demise.

But let’s face it: This is just the shape of things to come. Primedia will shed all their money-losers in order to “fatten up” the company’s car book division to make it look more attractive to potential buyers.

As one blogger put it elsewhere on the web today, “So when does Motor Trend itself … become ‘a classic’?”

MEMO TO NASCAR --- DROP MICHAEL WALTRIP NOW!

As of today, three full days before the Daytona 500, the first and most important race in NASCAR’s schedule, the credibility of the sport and so many of its teams, owners, cars, crew chiefs and drivers is in serious question. For the first time in its history, NASCAR has docked teams money and points before the season has begun. Some teams got hit hard for making patently illegal aerodynamic changes on their cars; four cars were found guilty of this offense earlier this week. But the biggest news came Wednesday and today, Thursday. Both Jeff Gordon and Michael Waltrip were hit with penalties … and the credibility of the sport continues to drain, drop by drop … And the company hit worst by it all is

Toyota

. Before they have run even one mile in actual racing in Nextel Cup, the giant Japanese company finds itself scrambling to manage this disaster.

Jeff Gordon’s #24 “Rainbow Warrior” Chevy was found to have illegal rear suspension components. The team said it was because they installed some of the suspension parts incorrectly. NASCAR seems to buy some of the team’s excuses, but Gordon will start in last place, relegated to the 43^rd position, for Sunday’s “Great American Race”.

But it was Michael Waltrip, ne’r-do-well younger brother of FOX on-air analyst and former Winston Cup champion Darrell Waltrip, who received the biggest fine ever levied in NASCAR ($100,000 and 100 points against the team and its members), which almost guarantees the team’s cars having no shot whatsoever at the Nextel Cup title at the end of the year. And this before the season has even officially begun, as far as most fans are concerned.

Why was Waltrip assessed so strong a penalty? Because it seems a fuel additive the team had been using in their Toyota Camrys was similar molecularly to a substance resembling --- rocket fuel. That’s right, rocket fuel. Tampering with the fuel itself is considered one of the worst actions anyone on a race team can take. Fuel in all major series are inspected, tested, inspected, tested again … Throughout the entire racing weekend.

What does this mean for Waltrip? His tearful protestations and apologies aside (and what else would you expect?), my guess is that

Toyota

might drop him altogether, for at least a year. My recommendation is that they definitely should do exactly that. How else do they regain their credibility within the sport? With one team out of just three running Camrys now essentially convicted and sentenced, what ‘shoe’ may drop next?

The company has invested many millions of dollars (and whatever that  works out to in Yen) into Waltrip’s all-new team, and even more into his older brother’s Sears Craftsman Truck Series team. The

Toyota

advertising budget alone featuring both Waltrips has to be in the hundreds of millions. (Photo - Darrell Waltrip signs autograph at Tundra plant opening in TX).

With the season opening and all this chicanery revealed very publicly by NASCAR and several teams hit hard by sanctions,

Toyota

seems to have gotten the worst of it as far as public opinion is concerned. Many NASCAR fans are not thrilled with the first ‘foreign’ entry in NASCAR to begin with (though other import cars, including Nissans/Datsuns, have run in many local NASCAR series over the years), and adding this level of rule-breaking is something the world’s second-largest automaker  certainly does not need.

The other teams can straighten up and fly right, as can

Toyota

, but it seems to me that there will be suspicion over the car-maker for at least this entire season, all thanks to Michael Waltrip.

HONDA TO BUILD VLJs IN NORTH CAROLINA

We told you months ago about the efforts of various companies to take advantage of a new class of business jets called "VLJs", or Very Light Jets. Now Honda has made it official that they will build their VLJ in facilities at an airport in North Carolina. The $60 million or so Honda is initially planning to spend will cover only the facilities and some equipment needed for starting construction. The company has so far received confirmed orders for over 100 of their VLJs.

(From the LA TIMES/BLOOMBERG)
Honda Aircraft Co. will begin producing small planes for delivery by 2010 and employ at least 300 people, spokesman Jeffrey Smith told reporters in Greensboro, N.C.

Honda's entry into aircraft manufacturing sets up a competition with Textron Inc.'s Cessna Aircraft unit in Wichita, Kan., the world's biggest maker of business jets.

Tokyo-based Honda last year received more than 100 orders for its $3.65-million HondaJet, which can carry as many as eight people.

The $60 million that Honda plans to spend on its aircraft factory "isn't significant. That's just capital investment," said Bob Zuskin, an analyst at Herndon, Va.-based GRA Aviation Specialists. "The real cost is getting the plane certified for sale. That can run to $1 billion with all the certification and engineering costs." (Photo - HondaJet engine).

Annual production will exceed the company's initial goal of 70 planes a year, said Michimasa Fujino, chief executive of the new unit and HondaJet's designer. Fujino declined to give a new production target for the plane, which has two Honda-designed engines mounted over the wings.

Honda Aircraft will be housed in a 215,000-square-foot facility, including a 68,000-square-foot hangar at Piedmont Triad International Airport. Honda will spend $40 million for the buildings and $20 million in design and production equipment.

"We are expecting additional investment," Fujino said.

The company is readying 20 HondaJets for test flights late next year to receive Federal Aviation Administration certification, Fujino said.

The NBAA (National Business Aviation Association) defines VLJs as single-pilot jets  that weigh 10,000 pounds (4,500 kilograms) or less. They generally have two engines, five or six passenger seats, electronic cockpits and cost half as much as the most inexpensive business jet now in service.

Six other very light jets are in the process of being certified by the FAA.

The FAA officially predicts that 4,500 VLJs will be in service 10 years from now. FAA chief Marion Blakey has called that a conservative estimate. Eclipse alone has orders for nearly 2,500 of the little jets.

And yes, they can be ordered with "heads", or bathrooms

MOTOR TREND, AUTOMOBILE TO BE SOLD TO LOWER WALL STREET DEBT; PUBLISHER BUYS CANADIAN 'PIMP' BOOKS TO REPLACE THEM!?!?

No one knows the entire story, but here's today's big media story which has absolutely nothing to do with Anna Nicole Smith ... It appears that on Thursday of this week, Primedia, a Wall Street/publishing outfit which has among its holdings many of the automotive magazines which used to be part of the Petersen Publishing empire, and which also eventually bought-up many other of the so-called automotive "enthusiast" or "buff books", purchased a Canadian publishing company called VerticalScope Inc., and their Modified Automotive Group (MAG), including Modified Magazine, Modified Luxury & Exotics Magazine, Modified Mustangs Magazine, and their related event partnerships and websites. Then, the next day, Friday, February 9th, Primedia announces their Board of Directors has "authorized the company to explore the sale" of their Enthusiast Media Segment, which includes more than 75 magazines, 100 websites, 70 events, two television programs, 400 branded products, and such well-known brands as Motor Trend, Automobile, Automotive.com, and other enthusiast pubs such as Equine.com, Power & Motoryacht, Hot Rod, Snowboarder, Stereophile, Surfer, and Wavewatch.com. Why? Because these gal-laden, generally poorly-written books "skew toward a younger demographic", says Primedia's press release on the subject. Also, the sale of the Enthusiast Media Group will be used to "pay down debt" by Primedia, which should make all the employees there feel real good about themselves and their company.

It's no secret that Motor Trend and Automobile are "not what they used to be", under Primedia's ownership. Over two decades ago, I spent a year or so as Feature Editor at Petersen's "4Wheel-Off-Road", one of the first and to this day still one of the most popular of the "4x4" and "off-road" magazines. Shortly after I left the outfit to go to work for Mickey Thompson and help him stage the first "Off-Road Championship Grand Prix" at the Los Angeles Coliseum, Bob Petersen sold his company for somewhere around one-half Billion dollars to Primedia. I like to think the additional value I had brought to the company helped him push the price that high. Or maybe it was because I left. Now, if I remember correctly, and every reader is invited to correct me, as always, Primedia sold the company then eventually bought it back and has owned it since. Those "old" Petersen mags have been around the block more times than a 12-year old learning to drive mom's 88.

It's also no secret that Primedia has not had the best of luck in developing magazines aimed at that all-crucial "younger demo". So clearly they have decided to sell-off their automotive properties aimed at "old-timers" and simply buy a company from Canada, in business for only five years, and try to develop those youth-skewing properties into the money-filled pit which Primedia's Enthusiast Media Segment should have been, but through rank mis-management, according to many who work there, never achieved.

Rather than hire younger editors and writers, or even encourage their current crop of "old" editors and writers to seek out such new talent, it's becoming clear that Primedia is simply going to be satisfied selling-off their current properties and literally buying a new generation of automotive journalists and enthusiasts, as skilled or un-skilled as they may be, as experienced or not as they are.

I passed this info along late this afternoon to a top man in the automotive aftermarket, one who's name those "in the know" would instantly recognize --- He had just come to his west coast home from a week at the Chicago Auto Show and had not yet heard this news. His immediate reaction: "What's going to happen to all the people at Motor Trend and their other mags?"

What, indeed.

Jack Roush and Steve Saleen may have replaced Carroll Shelby as the horsepower god for the majority of American enthusiasts, as another website recently opined, but it appears there are a bunch of writers, editors and photogs who are going to be looking for non-existent work ... Whether the "Old Petersen" mags continue to exist in their traditional printed form remains to be seen, whether they go all-digital and all-web is still to be determined. One thing is for certain: While the thought of Angus MacKenzie and Matt Stone running around in fat pants, wife-beaters and Van's with "MT" tats on their abs is a frightening one --- They and their ilk may have to lose 30 years really fast if they intend to continue bringing home journalism paychecks.

Click on this line to read the release about Primedia buying the Canadian company.

Click on this line to read the release about Primedia approving the sale of their Enthusiast Media Segment.

And you know what the ultimate irony of all this is? The more I thought about this whole affair today, the more I understand exactly what Primedia is doing and why. They are capturing a new generation, captuirng the future. It's the end of an era, officially, and one either lowers themselves to what passes for "automotive journalism" these days to keep a check coming in, or cancels their subs to everything but Automotive News ... Primedia is, when all is said and done, right in their decisions.

ALL THE NEWS THAT FITS --- AND COUNTS!

Here's the wrap-up of important auto industry news which you'll find useful and interesting ... So you don't have to spend hours and slog through countless (and often useless) BLOGS, industry sites and all the rest --- We do all that for you! In this report, Smart cars are available for 'reservation' only, GM extends their big new warranty to used buyers and maybe ethanol ain't all it's cracked up to be (and believe it or not, I'll be speaking on that topic to a gathering of MBAs from Harvard, Wharton and Stanford later this month --- Guess I'll wear that tie) ... And there's much, much more! Read and enjoy! (Photo  Above - A JD Power award).

JD POWER NAMES THE SEVEN WORST CAR COMPANIES!

Can there be anything worse in the auto business than a bad reputation?

Market analysts at J.D. Power and Associates have labeled seven of the industry's brands with a "poor reputation."

Jaguar, Jeep, Hyundai, Kia, Land Rover, Saab and Suzuki had the worst  reputations in the business among consumers last year, according to data presented here at the J.D. Power Automotive Roundtable. Power uses attitude surveys of both consumers who own a brand and those who do not to classify perceptions of the brand's reputation. (Photo right --- JD Power corporate logo).

WANNA BE 'SMART'? GOTTA MAKE A RESERVATION!

Smart

USA

will begin taking $99 reservations for its car in about 60 days to gauge interest, President David Schembri says.

Paying the fee -- the maximum permitted without violating state laws -- won't buy a place in line for the ForTwo, expected to go on sale in early 2008, says Schembri. But it will give Smart a better idea of the specification packages and colors that potential buyers want. The $99 can be refunded or applied to the purchase price. (Photo - A covey o'smarts).

The reservations will be turned over to Smart dealers, who will handle the transaction and deliver the car.

"We think on the day we open the doors, we will be able to present dealers with very qualified prospects," says Schembri.

Anthony Pordon, Smart senior vice president, says the reservation can't be a place-holder because of geography. The first round of about 50 to 60 dealers will be appointed in 30 to 35 markets on both coasts and in the South.

But the reservations will give potential buyers a connection with the brand and Smart a way to directly communicate with intenders.

GM'S MUCH-BALLYHOED WARRANTY TO BE MADE AVAILABLE TO  USED CAR AND TRUCKS BUYERS --- AND THAT IS GOOD NEWS!

General Motors will cover vehicles sold under its GM Certified brand with 5-year/100,000-mile powertrain limited warranties starting March 5.

The enhancement will be effective from the time the vehicles were sold as new, Brian McVeigh, general manger of GM Fleet and Commercial Operations, said today. The warranty is transferable and has no deductible.

The new powertrain coverage is in addition to GM Certified's 3-month/3,000-mile bumper-to-bumper warranty and any remaining portion of GM's 3-year/36,000-mile new-car warranty. GM added 5-year/100,000-mile powertrain limited warranty coverage to 2007 models last fall.

The enhancement will cover all 2002-2006 Chevrolet, Buick, GMC, Oldsmobile and

Pontiac

vehicles sold under the GM Certified brand.

Cadillac, Hummer and Saab have separate certified used-vehicle programs. Vehicles sold under those programs are covered by 6-year/100,000-mile bumper-to-bumper warranties effective from the time the vehicles were sold as new.

US SENATORS GRILL CAR-MAKERS ON PRODUCING MORE FUEL-EFFICIENT VEHICLES --- AND WHY THEY HAVEN'T DONE AS MUCH AS THEY SOME THINK THEY CAN

Members of the Senate energy committee want automakers to produce more fuel-efficient vehicles to help the industry weather the impact of higher gas prices and improve their long-term fortunes.

   "Maybe we need to help you help yourself by pushing these standards," Republican Sen. Gordon Smith said during a hearing by the Energy and Natural Resources Committee.

   Representatives of General Motors Corp., Honda Motor Co. and

other automakers said the government could help foster advanced

technologies and improvements in hybrid batteries through a mix of

tax incentives and funding for research.

   Some lawmakers appeared resistant to that approach, saying the

industry had placed too much of a premium on building large sport

utility vehicles that are less fuel-efficient than passenger cars.

   "It seems like we are expected to do so without very much in

return in the form of higher efficiency standards by the industry,

and I think this is a shared responsibility," said Democratic Sen.

Robert Menendez.

   Menendez asked whether General Motors supported tougher

requirements under the government's Corporate Average Fuel Economy

system, or CAFE. GM's Beth Lowery said recent changes to the rules

for pickup trucks and SUVs helped create a fairer system, and the

company was "willing to look at car CAFE reform as well."

   "It is a very complex subject, and it's very difficult to just pick a number," Lowery said. A Honda representative said the company supported fuel economy increases through performance

requirements. (Photo - GM, DCX, BMW-developed electric hybrid transmission system).

MAKIN' ETHANOL --- HIGHER PRICES FOR EVERYTHING ELSE?

    Forget about oil as the inflation bogeyman we should fear the most. The surging price of corn is the latest threat to Americans' wallets, and where it hits them may go beyond the supermarket.

   The issue here really starts with the government's push to increase  the use of alternative fuels like ethanol to reduce a reliance on foreign oil. Since most ethanol produced here is made from corn, that burgeoning boom is straining corn supplies, and boosting prices. (Photo - corn field in action).

   That makes everything from soda (sweetened with high fructose

corn syrup) to the steak from corn-fed beef more expensive. It's also crimping ethanol producers' profitability, which could lead to calls for increased federal subsidies to keep them afloat.

   This is all happening just as consumers are starting to feel some relief from lower energy prices, which are down nearly 30 percent from the highs reached last summer. Inflationary concerns have now shifted to corn, which has doubled in price from a year ago to a 10-year high of around $4 a bushel today.

   Last year's corn harvest was the third-largest in

U.S.

history, but as Merrill Lynch chief North American economist David Rosenberg notes, that large supply is being met by even bigger demand from the fast-growing ethanol market.

    Congress passed an energy bill in 2005 that mandated the doubling of alternative-fuel use by 2012 to 7.5 billion gallons a year. Then President Bush upped the ante in his State of the

Union

speech in January by seeking a boost to 35 billion gallons a year by 2017. (Photo - George W. Bush with the leaders of Ford, GM and Chrysler in the Oval Office).

   That would be a big climb from where we are right now: An estimated 4.9 billion gallons were produced in 2006, according to the Renewable Fuels Association, a trade group representing the ethanol industry. In 2000, 1.6 billion gallons were produced.

   There are currently 112 active ethanol plants, while 77 are under construction and 7 are being expanded, the trade group said. Big companies like Archer Daniels Midland Co. to smaller startups and farmers have jumped in on the ethanol-driven corn rush.

   But making money on ethanol has become increasingly difficult with corn prices surging at the same time that oil prices are falling to 18-month lows. The spread between the sales value of finished fuel ethanol -- which is tied to gasoline prices -- and the price of corn is getting squeezed fast.

(Our own note on this topic: Making ethanol from corn is not the best way, many say, to   create that product for use in vehicles. Many experts say it would be much better to use sugar beets. Corn is an expensive crop; only one crop can be grown annually, it takes a large amount of chemicals and fertilizers to bring in a good crop and after only a few years, the land can grow fallow and unusable for any crops for a long period of time. Some investors are buying up huge tracts of land in Hawaii, now that that state's pineapple production has moved to the Phillipines, and are planning to use that now-empty land to grow sugar beets for conversion to ethanol. Clearly, the best answers to simply producing ethanol, much less using it, have not been made.) (Photo - More corn in action).

WE WERE WRONG AND WE FIX IT --- THANKS TO YOU!

We posted here last week about "Consumer Reports" magazine  and their recent story, which scared the hell out of millions of parents worldwide, stating that just about every child care car seat on the market provided little, if any, protection for children. Just a few days later, CR received criticism from all corners, not only for their test results but also for their tainted methodology. CR, in what seemed to be one of the fastest turn-arounds in journalistic history, pulled their results, posted apologies (and explanations) and, well, basically said: "Our bad". In our post, we wrote about CR's problems in the past with their false and even patently malicious and staged attack on the Suzuki Samurai (a vehicle we would never buy, but that's another story). We also brought up the infamous 1986 CBS "60 Minutes" report by correspondent Ed Bradley on "unintended acceleration" and "poor pedal placement" on the Audi 5000. In that post we said the Audi sued CBS. We were wrong.

We received an e-mail from a long-time automotive industry marketing and training expert, who happened to be working for Audi at the time of the CBS debacle --- What a small world, huh? He said Audi never sued CBS. We followed-up on his e-mail and indeed he was right, we were wrong --- Audi never sued CBS (though the company did sue various other parties in connection with this event and won each and every suit filed).

Here, following, for everyone's info, is a story from an article which appeared on AOL a decade or so ago, which, according to several sources, is a good recollection of the CBS slash-job on Audi. In reality, CBS comes out looking even WORSE than it did in our original posting! Here it is ... Bold-facing is ours ...

"Audi sales were crushed by a 1986 '60 Minutes' show that was off track.  A decade later,  the car maker is finally recovering, but 60 still won’t admit it was wrong.

Buried deep in the 60 minutes archives, squirreled away alongside the
program’s notable triumphs, is an episode the CBS weekly newsmagazine isn’t eager for you to see.

This isn’t some obscure early segment with poor production values that would make the venerable show look laughable today. It’s one of 60 Minutes’s greatest hits, a piece originally broadcast on November 23, 1986, titled "Out of Control."

As presented by veteran correspondent Ed Bradley, the 17-minute  segment showed compelling visual evidence that the Audi 5000, a German luxury sedan, had a dangerous propensity to lurch forward on its own, even when the driver’s foot was on the brake.

This defect, dubbed "sudden acceleration," was allegedly responsible for hundreds of accidents. The piece also included dramatic interviews with six people who claimed that accidents they suffered
in their Audis were caused by the car. Two of the wrecks caused fatalities.

But it turns out that all of the people featured who sued Audi eventually lost their cases. And the woman used in the "teaser" opening—the clips that run just before the ticking clock at the start of each 60 Minutes show—was later fined for filing a frivolous suit.

"It’s not because we’re embarrassed by the story," says 60 Minutes spokesman Kevin Tedesco, explaining his refusal to provide a tape of the show. "It’s the lawyers. They don’t want to open up a can of worms."

The Audi episode was repeated on September 13, 1987. The rebroadcast included additional information on the skein of mishaps—1,200 reported accidents, including five deaths and 400 injuries—claimed to have been caused by the defective Audis. As Bradley stated, "the sheer number of incidents involving the Audi 5000 alone would make it the most frequently occurring serious defect in automotive history."

The show had an enormous impact in the marketplace. Sales of all Audi models in the U.S., which had peaked at 74,061 in 1985, plunged sharply after the 60 Minutes broadcasts. 

"It was a nightmare for the company," says Thomas McDonald, former head of public relations at Audi’s parent, Volkswagen of America, Inc. "We lost billions of dollars in sales and revenues." Audi’s average annual sales of 14,000 cars from 1991 to 1995 were just 19 percent of its pre–60 Minutes peak.

But in early 1989, the National Highway Traffic Safety Administration (NHTSA) issued the findings of an exhaustive two-year study of sudden acceleration. It concluded there was no mechanical problem that directly caused the acceleration of the Audi 5000 or any other cars (including Mercedes-Benz, Nissan, and Toyota models) accused by drivers of having minds of their own.

NHTSA investigators determined that most of the accidents must  have been the result of driver error—especially a driver mistaking the gas pedal for the brake. Government safety agencies in Canada and Japan reached similar conclusions in their own studies.

On March 12, 1989, Bradley presented a short update, reporting on NHTSA’s findings. He said the study "supported the position of Audi and the other manufacturers," and that investigators "could find no mechanical or electrical failures which would cause sudden unintended acceleration." While the study concluded drivers were mistakenly hitting the accelerator, Bradley noted that it also pointed to possible design problems—"the shape, location, and feel of gas and brake pedals"—as a contributing factor.

"Audi of America," concluded Bradley, "which saw its sales drop by more than two-thirds as a result of adverse publicity, said it was delighted with the new report, which it said finally vindicates the Audi."

That was it for the update. What Bradley did not say was that the original 60 Minutes broadcast might have been erroneous or misleading. He termed the NHTSA findings an "opinion." 60 Minutes’s own role in creating "adverse publicity" was left unacknowledged. "They never apologized," says a former Volkswagen executive. "They never said, ‘We were wrong.’" (Bradley declined to answer questions about his piece.)

What’s more, Bradley also failed to mention how 60 Minutes had been able to offer footage of an Audi 5000 lurching forward from a parked position. William Rosenbluth, an automotive consultant retained by plaintiffs in a suit against Audi, says he drilled a hole in an Audi transmission and piped fluid into it. The resulting filmed sequence, in which the accelerator pedal moved down on its own, provided 60 Minutes with the damning visual evidence the program needed to brand the Audi 5000 a dangerous vehicle."

(end of article)

Thanks to you who helped us get to the facts --- More than 20 years later! We make a mistake here, we correct it, and we're happy to do so!