ON THE TABLE

February 25, 2009

GM. Publisher's Note: As bad PR moves go, last week's announcement that GM would shutter its High Performance Vehicle Operations to concentrate on other things was right up there. It may have seemed a good idea at the time, but instead it came off as an unmitigated disaster. Rather than projecting a willingness by the company to be responsive to the government's newly enhanced grip on their throats, it just underscored how much the company is grasping at straws to make sure they come off as being "responsible." The very last thing GM needs to do is to stop thinking about how to make their cars more desirable, and that's what the HPVO was all about. But then again, going back throughout its history GM's corporate philosophy has never been about making desirable cars, it has only been about making money. If it weren't for people like Harley Earl, Ed Cole, Zora Duntov, Bill Mitchell, Pete Estes, Bunkie Knudsen, John DeLorean, Mark Reuss, Dave Hill, Tom Wallace, Ed Welburn, Bob Lutz and countless others who passionately believed in building exciting automobiles, some of this industry's most glorious high-performance machines over the years would never have been built. These strong-willed individuals had the enthusiasm and more important the will to succeed over the years despite the corporation's entrenched, recalcitrant bureaucracy that threw up roadblocks every step of the way. Even though the HPVO has been disbanded and its denizens sent to other projects, if GM survives to fight another day these are exactly the kind of people who have to be regrouped and given free rein to lead the charge. Let's hope we see that day. - PMD

Honda. The wildly divergent corporate philosophies of GM and Honda were graphically displayed for all to see this past week. On the one hand here's GM, hand-wringing their way through this mess while beating up suppliers and disbanding its High Performance Vehicle Operations. Juxtapose that philosophy with Honda, who just named Takanobu Ito, 55, to be its chief executive and head of its core automaking operations. Ito is - get this - a research and development expert with U.S. experience. He replaces Takeo Fukui, 64, as chief executive officer and president. Fukui will remain on the board as adviser. Honda is making clear by this move that it is redoubling efforts to get back to its core founding principle, which is to lead by technological innovation. They don't call it the Honda Motor Company for nothin', folks.

Katsuaki Watanabe. By naming Akio Toyoda, a member of the founding family, to replace Katsuaki Watanabe, the reeling Japanese automaker formerly known as The Juggernaut is sending a loud and clear message that Watanabe's policies of expansion at all cost - along with the intense pressures brought about by the global economic implosion - have doomed the company to its first financial losses since its inception. Watanabe basically took Toyota's eye off the ball and moved the company away from its core values, to disastrous effect. And for that we're dubbing him Toyota's Roger Smith.

Ford. Distancing itself from "The Other Two" once again, Ford struck a deal that will allow the company to substitute its stock for as much as half of the $13.6 billion it owes the UAW's retiree health care fund. This deal is expected to shape the outline of similar deals with GM and Chrysler, which are under severe pressure to show their government overseers measurable progress on this critical issue.

GM, InBev. The automaker is now seeking to require that the production companies involved in producing the company's TV spots get paid 50 percent of the production costs 60 days after the first day of shooting - with the balance being paid when the commercial is finished - as opposed to being paid 50-75 percent of the costs when the production starts. For going along with the program these production companies will become "preferred vendors." This goes along with GM's track record of calling its creative teams (ad agencies, production companies, etc.) marketing "partners" when times are good and treating them like "vendors" when times are bad. Nothing ever changes. In keeping with the mood of the times, InBev (Anheuser-Busch) has informed production companies that they will get paid 120 days after an ad runs instead of the typical 30 days. What we have here is the typical corporate mindset at work: They dumb down a highly creative process until it can be categorized and reduced to the lowest common denominator - akin to say buying bolts from a supplier - then they recoil in horror when they get exactly what they pay for. That timeless adage about clients getting the advertising they deserve? Truer words were never spoken.

The Treasury Department. It appoints Steve Rattner - a hedge fund financial guru who hasn't exactly set the world on fire of late - to counsel treasury Secretary Timothy Geithner on the Great Car Crash. Rattner will be the "car czar" without the polarizing title, apparently, which now makes it official: GM and Chrysler's fate are in the hands of a gang of bean counters who will well and truly fly this thing right into the ground while telling everyone their decisions are "for the best." To make matters worse, as The Detroit News first reported, the vaunted "Presidential Task Force on the Auto Industry" is made up of people (all but two) who either have never owned an American car, owned one many years ago but have driven imports for years since, or don't own a car at all. Like we like to say around here, you can't make this shit up.

Mitch McConnell. The Senate's Republican leader is insisting that U.S. automakers seeking government aid still aren't doing what's necessary to save themselves from doom. McConnell says he was against giving the bailout money to GM and Chrysler in December because the companies weren't willing to restructure as needed and he still hasn't seen anything to indicate that they're taking the necessary steps. Really, Mitch? And it has nothing to do with the fact that you have a major assembly facility in your state (Kentucky) owned by Toyota? Right. You remember, don't you, Mitch? The same automaker that you regularly hit up for campaign contributions? Just like you did in 2005 when you came to Detroit hat-in-hand to hit-up the automakers for campaign money because you have two Ford plants and the Corvette plant in Kentucky? You and your stumblebum colleague Sen. Richard "they-don't-call-me-Dick-for-nothin'" Shelby from Alabama are reprehensible, duplicitous carpetbaggers masquerading as noble representatives of "the people." Pathetic doesn't even begin to cover it.

The EPA. As predicted, the brainiacs at the EPA will press for massive carbon dioxide regulation in order to reduce greenhouse gases, a move that threatens to cripple industries by burying them in costly new regulations. Expected to be affected are motor vehicles, coal-fired power plants, refineries, chemical facilities, large manufacturers, and even hospitals, schools and apartment buildings. Just what the economy needs right about now, don't you think?

The Saturn Plan. The idea that Saturn would hang on for a couple of years and then spin-off from GM as an independent distribution company has some definite merit. Imagine a newly reinvigorated Saturn dealer network in 2011 that would be filled with "cherry-picked," best-in-class machines from several different sources around the world, even including GM but no longer dependent on GM. There are a lot of "ifs" involved here, however. "If" the economy improves fast enough, "if" the dealers can hang on long enough and "if" the financing for the enterprise can be secured, yes, Saturn has a real shot at survival. We could certainly envision the Fiat 500 for sale in a Saturn showroom of the future, long after the Chrysler-Fiat deal-that-never-was dies, of course.

Monica Conyers, Detroit City Council, NAIAS, Detroit. Certainly the most offensive so-called "politician" that we - or most anyone else for that matter - have ever seen in action is one Monica Conyers, the current president of the Detroit City Council who inherited the job when Ken Cockrel Jr. was promoted to replace disgraced former mayor Kwame Kilpatrick. Conyers, a belligerent head case with severe anger management issues and one who specializes in disrupting everyone and everything in her path (not to mention being one of the subjects of an ongoing FBI probe into city corruption), has managed to engineer a City Council vote to reject legislation that calls for $288 million to be spent on the expansion of the ancient Cobo Center, claiming it doesn't do "enough" for the city. Tuesday's vote (2/24) was the third time the council was forced to vote on a resolution brought by Conyers to reject the authority. Conyers, who along with the Detroit City Council has a sense of entitlement that knows no bounds, was upset that along with the expansion plan that would increase the 700,000 square feet of convention space at Cobo by 166,000 square feet, the operation of the facility would be removed from the city's control in favor of a five-member board. The board was to be made up of a representative from Detroit and one each from the three surrounding counties, with one member appointed by the governor's office. This authority would have unquestioned power over the facility that brings in an estimated $500 million annually to the region, and it would be able to sell bonds and collect tax revenue from hotels and other sources to fund any future expansion. Conyers' reprehensible maneuver not only blows up the future of the Cobo Center, it probably sets into motion the end of the idea that the North American International Auto Show will remain in the city of Detroit, which would be a fatal blow to any hopes for this region's short-term stabilization, not to mention its long-term survival. This after the city of Detroit - one of the most egregiously mismanaged and corrupt entities in the United States - did nothing but squander every last opportunity (ably abetted by the relentlessly embarrassing and grossly unprofessional behavior of its City Council) over the last 15 years to come up with a plan to turn Cobo Center into a world-class facility. Yup, the hits just keep on comin' here in the Motor City, and the bad juju just keeps on piling up. The only thing Conyers and her minions will be "entitled" to by the time they get through screwing up? Turning off the lights when the whole damn town finally implodes in on itself. Disgusting.

L. Brooks Patterson. The Oakland County Chief Executive described the Council vote to local AM radio powerhouse WWJ as a "disaster" for Detroit and the future of Cobo. "It's the best deal we were going to get," Patterson told the station. "Certainly the best deal Detroit was going to get," Patterson continued. "So, now they've saddled themselves with a deteriorating facility which they now draw somewhere between$15 million and $20 million a year from their general fund to put into this building, just to keep the doors open," he said. "It's now totally the obligation for the City to put it back in working order, to upgrade it, and to maintain the North American International Auto Show. So, in a word, I'm flabbergasted," Patterson concluded. And that is our AE Quote of the Week.

President Obama. Publisher's Note: In his speech to the joint session of Congress Tuesday night the President had this to say: "As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices. But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it." And that's our AE Quote of the Week, Part II. I'd like to point out one very important thing, Mr. President. It's fine to talk about a "re-tooled, re-imagined" auto industry, but this business - and the dealers, suppliers and companies involved in it - don't have that kind of time. If you and your self-appointed auto gurus/bean counters don't get with the program and help get people buying cars and trucks again, then there won't be an auto industry left to "re-imagine." - PMD

Editor's Note: First mentioned by reader Randy Brush from Dallas and seconded by local loyal reader Colleen Egan, the Dilbert cartoon about the automakers and their corporate jets and the Washington hearings is priceless. - WG