ON THE TABLE #452

July 2, 2008

The Auto Biz. How bad was it for some auto companies during the month of June? Chrysler sales were down 36 percent (gulp) with Dodge Durango off 67 percent, Chrysler Aspen off 49 percent and Jeep Commander down 68 percent. Ford sales were down 28 percent (F-Series pickups down 40.5 percent, Expedition off 59.8 percent, Explorer down 52.0 percent); GM down 18.5 percent (Hummer down 59.3 percent although Malibu was up 73.4 percent and Cobalt was up 21.6 percent); BMW down 11 percent; Nissan down 17.7 percent, and Porsche down 18.9 percent. Even Toyota was down a stunning 21.4 percent (with light trucks off 31.1 percent, Lexus Division down 21.1 percent). All together now, NOT GOOD.

Honda. Having the right product mix at the right time paid off for Honda, as its June sales were up. Honda sold 10,003 of its Smart car killer, the Fit, for a new record.

NHTSA. The Alliance of Automobile Manufacturers, the trade group representing the Detroit Three, Toyota, Daimler AG, BMW Group, Porsche, Volkswagen AG, Mitsubishi and Mazda, fired back at NHTSA's April 22 proposal that would hike fuel economy requirements to a fleet average of 31.6 mpg - including 35.7 mpg for passenger cars and 28.6 mpg for light trucks beginning in the 2011 model year - with a blistering 77-page filing yesterday morning that termed the move excessive and technologically unfeasible, while throwing the idea of lead time right out the window. The group strongly urged NHTSA to pull back on its proposal that would have fuel economy standards go up 4.5 percent annually through 2015. The automakers insist that NHTSA's proposal would delete up to 82,000 auto jobs and slash auto sales by as many as 856,000 vehicles by 2015. Light trucks would go up $4,000 under NHTSA's proposal, according to the manufacturers, and the net cost to society would be $28.9 billion by 2015. Adversarial head-butting will not help this situation one bit. NHTSA needs to get real, and in a big hurry too.

Peter Morici. The business professor at the University of Maryland and a former chief economist at the U.S. International Trade Commission who has been a constant pain in the ass for the Detroit Three for years offered a new perspective for the first time in assessing Detroit's plunging fortunes. He told the Detroit Free Press yesterday that, "We're in for a long period of slow growth because of our broken energy and trade policies and the sad state of the U.S. auto industry." But for once he didn't put all of the blame at Detroit's feet saying, "Some of that is a lack of supportive policy," Morici said. "China, Japan, Korea, they support their auto industry. We don't. Everybody else is getting subsidized." Amen. And that's our AE Quote of the Week.

VW. Our AE "Duh of the Week" goes to VW after Automotive News uncovered an internal document that suggested that Volkswagen AG had no intention of choosing the state of Michigan for its proposed new U.S. assembly plant, even though the company insisted right up until last week that the state was still in the running. The document obtained by AN clearly shows the German automaker had favored a Southeastern U.S. location all along. As AN reported, in its request for bid proposals to design and construction management companies, VW describes the project as a "greenfield facility with the capability of press, body, painting and assembly operations. For pricing purposes, assume the location is in the Southeast USA," the document says. The document is dated April 23, the day VW released a statement suggesting that it had narrowed its list of states to Michigan, Alabama and Tennessee. D'oh! Is it really any wonder why VW has no credibility in this country - and we mean z-e-r-o - when it comes to their public policy efforts, or just about anything else for that matter? Pathetic.

Andy Grove. The former Intel chairman recently told The Associated Press in an interview that, "The most important thing I would like to do is light that almost half-assumed truth up in neon lights: Electricity in transportation has to be done. It is urgent. It is important that everything else is secondary." Uh, gee, thanks, Andy. We can all rest easy now that you've caught up to last year's discussion.

Tesla, Arnold Schwarzenegger. From the "No Credibility Whatsoever" File comes word that Tesla Motors plans to produce a mass-market $60,000 "Model S" electric sedan in the San Francisco Bay Area by the end of 2010. They even went so far as to have a press conference at Tesla's Silicon Valley headquarters on Monday to announce it. In attendance was Tesla CEO Ze'ev Drori and California's stumblebum Gov. Arnold Schwarzenegger (aka "Gov. Green Jeans"), so that means it must be real, right? "We are not a mere niche player with a car to the rich and famous," Drori whined. "We are building high-volume zero emission vehicle manufacturing in California for a midsize family sedan in California and we are not going to stop there." Seeing as we're literally tripping over Tesla Roadsters every time we go out the door, this has to be entirely plausible, right? Right. And here we thought our own Gov. - Jenny Granholm - re-defined the term "useless politician." As for Drori, his Traveling Electric Medicine Show is growing more tedious by the day. 

GM Muscle Car Fiends. "The Complete Book of Classic GM Muscle" by Mike Mueller will be available from Motorbooks.com beginning July 15th. Judging by our advanced copy, this massive, hardcover coffee table book should be a must read for fans of the fabulous GM muscle cars from the late 50s, 60s and early 70s.