ON THE TABLE

January 28, 2009

The Emissions Standards Mess. The President reopened the discussion about allowing individual states to set their own emissions standards, and that is not good news by any stretch of the imagination. If the Obama administration allows California and 13 other states the right to impose their own, tougher tailpipe emissions standards, chaos will ensue. A single national standard clearly would be the best course for the long-term survival of the domestic automobile industry, but if the patchwork quilt of standards becomes law you can bet that only one domestic auto company will remain standing when the dust settles, if that. The other Doomsday Scenario is that the "California" standard becomes the standard for the entire nation. If that scenario unfolds, then the government would have to inject massive amounts of funding (over and above what has already been allocated) into the domestic auto industry, so that they can build cars and trucks that meet the new standards. And of course whether or not consumers will actually want any of these vehicles by the time all of this tree-hugging is completed is another question altogether. Meetings are already scheduled to determine if any compromise can be reached, but in the meantime, this adds up to a whole lot of Not Good.

The Chrysler-Fiat "Deal." This just in from the "Smoke and Mirrors" File, the bombast and promises emanating from the Chrysler camp over the "potential" of this Fiat deal border on the fanciful. A rumored seven Fiats for sale over here? Please. Even under an ideal scenario, with the stars aligned perfectly and a miraculous national economic recovery under way - a scenario no one has confidence in whatsoever - Chrysler would be hard pressed to get the first Fiat 500 to market in the U.S. in two-and-one-half years. As far as we're concerned, the Chrysler-Fiat "deal" is pure conjecture at this point because no one gets points in this business for having an idea - it's the execution that counts. In other words, it's automotive swamp gas until further notice.

Toyota. From "The Wheels Are Coming Off" File comes word that Toyota is recalling more than 1.35 million Vitz (Yaris in the U.S.), Belta and Ractis cars globally to fix a defect in the seat belt, the exhaust system or both. 525,898 vehicles built from January 2005 to April 2008 in Japan will be recalled, as well as a combined 830,000 units in Europe, North America and other markets. It's clear now that Toyota's desire to become the No. 1 global automaker became an obsession, and their formerly impeccable quality reputation has been tarnished decisively.

Cadillac CTS Coupe. Fans of last year's NAIAS Best in Show are about to be severely disappointed because the sensational Cadillac Coupe - which was due to arrive late this summer as a 2010 model - has been postponed a year due to economic conditions. That means waiting until the summer of 2010 for the best-looking American production car in years. Not Good, II.

Honda S2000 fans. Publisher's Note: One of our all-time favorite cars is the Honda S2000 sports car. It's light, agile, and its slick gearbox, superb steering feel, high-revving power and overall balance are simply hard to beat. The car just feels right from the moment you drive away. Honda has announced that this is the final year for the seductive S2000, so if you're one of those enthusiasts who "always wanted one" and you have the means to do so, now is the time. - PMD

Cadillac. GM is pulling the plug on the Cadillac XLR roadster after a build-out this spring. Once a tantalizing concept on paper (and a very attractive design too), the XLR suffered right out of the gate from an overly aggressive price point, which GM felt was justified for the car vis-a-vis the competition, but which consumers never really bought into with the kind of numbers required to keep it alive. Even with the high-performance "V" version (we enjoyed test-driving both versions), the XLR was never seeded in the consumer's mind as a desirable "must have" piece. Attractive, yes, but against competition with a burnished reputation and proven resale track record? Not so much.

Fritz Henderson. The GM COO unleashed these words of wisdom last week in a speech at the Automotive News World Congress: "Things will get better, we just don't know when." Really? Well alrighty then! And that's our AE Quote of the Week.

Texas Gov. Rick Perry. Not known much for the "vision" thing, Rick Perry took a shot at the EPA in his state of the state address yesterday with the following: "Unfortunately, our strength in petrochemical production and refining makes us a big target on the radar of an increasingly activist EPA, whose one-size-fits-all approaches could severely harm our energy sector; an agency whose potential to harm our state with punitive actions will only increase in the months and years to come. Rather than wait for more mandates and punishments for environmental non-attainment, let’s continue encouraging innovation. I support giving Texans in the non-attainment areas of our state a $5,000 incentive towards a purchase of Plug-In Hybrid Electric Vehicles, using the funds Texans have already paid to reduce emissions, while providing a unique way to store wind energy." Three phrases stand out here: 1. "one-size-fits-all approaches." 2. "an increasingly activist EPA." And 3. "environmental non-attainment." Right on all counts, Mr. Perry, which is why you get our AE Quote of the Week, Part II.