October 29, 2008
GM. From the "Land of Not Good" File comes word that GM is basically suspending almost all of its of its spending on product development in 2009 and 2010 in a radical cost-cutting move, according to Automotive News. That means spending on R&D, design and engineering will stop. Products already in the pipeline - like the Camaro, the Volt and the CTS wagon & coupe - will not be interrupted, but everything else is questionable at this point. The one thing GM needs is great new product. This is the quintessential definition of Not Good.
Ron Tonkin. Noted mega auto dealer in the northwest U.S. (of his 18 stores only two are domestic) sent a letter to the CEOs of the Detroit Three urging them to ask President Bush to offer an immediate $2500 tax credit to people who buy a vehicle from the Detroit automakers, according to Automotive News. He also copied the heads of Toyota and Honda. Of course Toyota's Jim Lentz didn't like it - this business of favoring the Detroit Three over the other automakers - calling it "...a path to protectionism and none want to relive those days. Let's stay away from creating additional class warfare in the open market." Huh? To his credit, Tonkin double-barreled him: "If Detroit 'closes down,' then thousands are out of work and no one will buy Toyotas or anything else. " And that's our AE Quote of the Week. Toyota. The Japanese corporate juggernaut's long standing fear is that the U.S. government goes on the muscle and starts demanding some sort of protection for its homegrown auto industry, whether it be in the form of consumer incentives to buy vehicles from the Detroit Three or worse, fees tacked on import manufacturers - by the vehicle - to do business here. Any business. Well, boys, better dust off those old "duck and cover" news reels from the 50s because the winds of change are blowin' and more likely than not it will become more costly for import manufacturers to do business here in the coming years - one way or the other.
Tom Wallace. The chief of all things Corvette since 2006 is retiring on November 1st. Corvette ran flat-out under's Wallace's expert tutelage, and the sensational ZR1 - the finest car ever made by General Motors in its entire 100 year history - will remain a fitting tribute to Wallace's memorable reign. Corvette. From the glory days of Tom Wallace's leadership when an all-hands-on-deck exploration of a mid-engined C7 for 2011 actually went down to the last detail in 2007, to the pushing back of the C7 program to the 2013-2014 time frame at the earliest because of GM's financial situation, Corvette's future is - if not in doubt - definitely in a long holding pattern. Gene Stefanshyn, who is currently the vehicle line executive for all of GM's rear-wheel-drive programs, will assume the leadership of Corvette as part of his other duties. That should tell you all you need to know about Corvette's future right there. Wallace's focus was on Corvette. Now it will be just another car that GM has to figure out what to do with. Not Good.
Consumer confidence. As if anyone needed to be reminded, it's the lowest it has been in 41 years. What, us worry? You betcha. Getting 'bucked up. It's the new term around here being used by white-collar refugees (WCRs) from the auto companies who are stumbling around in a daze after losing their jobs. No, there are no bread lines, but the idea of spending money on lunch has become a luxury best left behind, so instead you can see these WCRs loading up on decadent venti coffee drinks at Starbucks in the early morning, figuring the extra calories will last them through the day.
Chrysler. Well, that was special. Remember those vaunted Chrysler hybrid SUV entries (Chrysler Aspen, Dodge Durango) that were so hyped to the market? Done. After just two months. Chrysler will stop producing them because it's closing its Newark, Del., plant - originally scheduled to close at the end of 2009 - one year early.