ON THE TABLE

February 18, 2009

GM. Publisher's Note: The sky is falling. GM announced today that it was disbanding its High Performance Vehicle Operations in order to focus on its core products as part of its commitment to the government to transform the company by concentrating on building fuel-efficient vehicles. These people did great work and left a legacy of some outstanding cars (the CTS-V for one). Not just the the end of an era, but the end of the world as we know it. This is a sad day for hard-core enthusiasts everywhere. - PMD

The Obama Administration. Publisher's Note: After fumbling around with the previous administration's notion of a "Car Czar," the Obama administration comes up with an even lamer idea - a committee. "The Presidential Task Force on Autos" will be co-chaired by National Economic Council Director Lawrence Summers and include representatives from 10 Cabinet agencies and White House offices, including the Environmental Protection Agency. But the Lead Dog will be Treasury Secretary Timothy F. Geithner, who will be assisted by Chief Attack Dog, Ron Bloom, a noted ball-busting negotiator. Oh, and then there's Diana Farrell, a deputy National Economic Council director, who is also expected to take a key role on the task force. She's a former McKinsey & Co. director, which means it will be a train wreck for sure. I don't care how well-intentioned this group is - and lord knows this administration is chock full of good intentions, if nothing else - the last thing this industry needs is a collaborative effort fueled by group hugs. The auto industry is in dire straights for a lot of reasons, but until people start buying cars and trucks again in substantial numbers - and are allowed the financing to do so - then none of these swell intentions will matter one bit. This industry is out of time, and unless one person on this vaunted "Presidential Task Force on Autos" emerges to be the yes-no decision maker willing to move at warp speed, then it's all over but the hand-wringing, folks. - PMD

Senator Debbie Stabenow, D-Michigan. She was quoted by The Detroit News as saying, "The announcement (of the Task Force) shows how serious the administration takes the issues facing our auto manufacturers and suppliers, and the need for a team illustrates the complexity of the challenges the industry faces." Really? Appointing a team in the face of an urgent crisis smacks of classic same-old Washington politics to us. Get a grip, Debbie.

GM and Chrysler. Rather than be roped into some sort of embarrassing display in Washington that would be descended upon and dissected by the media, the two car companies are emailing their "plans" to the government at 4:00PM this afternoon (2/17). Good idea. Now, if only the government would email their response back in a week we might actually get somewhere with all of this.

Chrysler LLC. The Auburn Hills-based automaker wants an additional $2 billion in federal funds - which is over and above the $7 billion bailout it requested in December - as part of the viability/sustainability plan submitted to the government on Tuesday afternoon. Chrysler's plan includes a claimed 24 launches in 48 months (!) and the introduction of electric vehicles in 2010 to help meet current federal fuel economy standards. Chrysler is also going to drop the Durango and Aspen SUVs and the PT Cruiser. Chrysler said that its plan would be enhanced by its strategic alliance with Fiat SpA, even though nothing is etched in stone with the Italian automaker at this point. Not exactly a rousing endorsement to keep Chrysler in the game, is it?

The U.S. Government. And why are we not exactly optimistic about Washington's ability to sort through the auto industry crisis? Here's just one classic example: A new federal law aimed at protecting children from lead in toys has also forced a nationwide halt in sales of off-road motorcycles and recreational vehicles built for young riders, killing off a multi-million-dollar industry that was thriving despite the recession overnight. USA Today reports that thousands of powersports dealers were told to halt sales of vehicles designed for children 12 and younger because of new lead restrictions in an act of Congress that took effect Feb. 10. Even vehicle sales are banned by a law passed in response to lead found in toys imported from China. Passed by Congress after a series of reports concerning toys made in China with lead, the law bans sale of products aimed at children if they contain more than 600 parts per million of lead, says Joseph Martyak, chief of staff to the acting chairman of the U.S. Consumer Product Safety Commission. Martyak told USA Today that the wording of the law left the commission no choice but to enforce the ban on youth cycles and ATVs even with no evidence children would ingest or absorb the items. The industry has petitioned the commission for an exemption. The Motorcycle Industry Council estimates nearly 100,000 youth bikes were sold in the USA in 2008, though some were aimed at kids 13 and older and not covered by the ban. Dealernews, an industry trade publication, estimates that the value of inventory at U.S. dealers that can no longer be sold probably exceeds $100 million. Beyond current inventory, Kawasaki spokeswoman Jan Plessner told USA Today that the company has "millions and millions of dollars" worth of parts now in the product pipeline to dealers that cannot be sold. Yup, let's have this same kind of brilliant logic applied to the auto industry. Now, there's an idea.

Zack Bartell. The 12-year-old, who was taking a dirt-bike riding lesson at School for Dirt's track next to Kawasaki Motors' U.S. headquarters in Irvine, CA, was asked by USA Today what he thought about the ban on off-road motorcycles and recreational vehicles built for young riders to protect children from lead in toys. He had this to say: "Are you kidding? This is silly. There's no way I'm going to stick a motorcycle part in my mouth." And that's our AE Quote of the Week.

BMW. Publisher's Note: I've been warning of BMW's slide into abject mediocrity for several years now - especially given it's unwavering obsession to be all things to all people and its blind infatuation with Chris Bangle's design "genius" even though he came up with pure craptastic half of the time - but even I am appalled at the abomination called the "5-series GT." This five-door liftback takes the horrifying profile of the X6 - which we assumed was just an aberration unleashed on the unsuspecting public as some sort of inside joke - and pushes it into the mainstream BMW car portfolio. BMW says this about it: "The BMW Concept 5 Series Gran Turismo is the production-destined rendition of the Progressive Activity Sedan (PAS) development idea. For the first time, this concept car combines the looks and appearance of a sporty BMW Sedan, a modern Sports Activity Vehicle, and a classic Gran Turismo. Perhaps the most outstanding feature of the BMW Concept 5 Series Gran Turismo is its combination of stylish quality, luxurious comfort, and remarkable convenience." Too bad it looks like a 1980 Chevy Citation. And too bad BMW has now officially jumped the shark, nuked the fridge, and bent its famed blue and white propeller, all in one fell swoop. These guys better pull up - and fast - before their entire product portfolio is made up of minivans masquerading as "GT hatchbacks." Pathetic. - PMD

(BMW)

Chris Woodyard, USA Today. Check out his excellent piece in the Money section of today's paper (2/17) entitled "Let's explore what defines the American car" and then check out the reader photos online. It's worth the read.

Ford, Michigan. Ford will receive a $55 million tax incentive from the state of Michigan to continue work on its advanced battery and electric vehicle development programs. The refundable tax credit will come through the Michigan Economic Development Corp. and its new Michigan Advanced Battery Credits initiative, a program that provides refundable tax credits to encourage companies to invest in electric vehicle engineering and advanced automotive battery research in Michigan.