Bromleyisms

According to this wikipedia page, Hybrid electric vehicles in the United States, 2011 sales for this category dropped to 2.37% from a 2009 high of 2.79% in 2009 (back to 2008 numbers which dipped below the 2007 ‘s 2.55% , which was the first to break into 2% of total U.S. sales).

You go Hybrids!   Well, hybrid promoters such as hybrid.com will point to Toyota travails as the reason for dragging sales, but even hybrid.com had to face an overall ten percent vehicle sales rise with a decline in hybrid sales: Consumers Favor Trucks Over Hybrids - the reason? well, inventory and exchange rates problems out of Japan… same old, same old… 

Overall vehicle sales this month were tilted towards trucks—including crossovers—with pickups doing very well. This suggests that small business owners and other commercial interests see better times ahead and are buying these trucks to prepare for new business, and to replace their aging vehicles. Unfortunately, these segments have very little hybrid content and thus hybrid sales did not get a boost from the trend. In addition, a drop in gas prices—in large part due to poor economic news—reduced demand for higher mileage cars including electrics, hybrids, and diesels.

Let me translate: hybrids cost too much for what they deliver.  The larger story is that the hybrids offered today offer less value for dollar spent on similar cars or trucks.  Henry Ford’s Model T was a success precisely because of its value – more auto for dollar spent.  What does a hybrid offer? Obviously, only 2% of new vehicle consumers think it’s worth the buy. 

Here’s my top ten best reasons for buying a hybrid, ranked in order of value:

1. HOV exemption
2. City-only use
3. ??
4. ??
5. ??
6. ??
7. ??
8. ??
9. ??
10. Identity

Hybrid sales are driven by that last — there’s no rational reason to purchase one of these cars other than identity.  Urban purchasers, who are the most logical consumers of hybrids, do not buy them because they need them to save fuel. They buy them because they can afford them, and I’ll guarantee that less-well off consumers do not reach deeper into their monthly payment for a hybrid when another, smaller, less costly car will do.  Hybrid sales are IDENTITY based, and little other, especially now that the HOV exemptions and federal tax credits have expired.

As for my top ten reasons NOT to buy a hybrid, I’d offer:

1. HOV exemption halted (oops)
2. price (premium paid for hybrid exceeds fuel savings over comparable auto)
3. highway use (electric engine negated)
4. lame performance
5. identity (“Toyota Pious”)
6. utility
7. long-term expense, especially battery
8. cold weather batter degradation
9. makes no engine noise at idle (I can actually see this as a problem if you have kids running around your house and street)
10. it’s a hybrid

The only possible logical reason to spend the extra money on a hybrid that WON’T BE RETURNED through fuel savings could only be HOV exmptions and personal identity.  Auto sales are and always have been about identity, that an unlimited source of consumer devotion,  which begs the question as to what, exactly, is the worthy of a hybrid to the identity buyer?  Test it Toyota – is the ego worth 25K?  35K?  80K?  Where’s the optimal price point for identity based sales?

Now it looks like the hybrid identity is a liability:

Some rivals are downplaying the “hybrid” label. General Motors Co.’s Buick brand will offer battery-boosted versions of its Regal and Lacrosse sedans rated at 36 mpg on the highway. But after hearing from consumers that “hybrid” suggested unwelcome trade-offs in performance, vice president of Buick marketing Tony DiSalle says the company is calling its system “eAssist.” 

That from A Road Trip for Fudge Costs a Steep Premium (WSJ Oct 5, 2011), which estimates that even with a reduced price that cuts into Toyota’s margins, the $2700 differences between a hydbrid Camry and a gasoline version doesn’t amortize until some 70,000 miles of use (add interest costs to that original difference and you’re extending it past 100k on the odometer).  Whatever, that’s a $25,000 car, and we all know what happens to sticker prices on a real lot.  The larger difference is between a Prius and a comparable gasoline car — say, a Corolla.  Now we’re talking $10,000 difference in sticker price, and no payback, never ever, on the fuel savings. No wonder Buick and Ford are dumping “hybrid” — not worth it to consumers.

Even if economies of scale lead to lower hybrid prices (and they won’t), the technology still can’t outperform gasoline.  All-electric is a farce, and hybrids are but a gimmick with limited legitimacy for urban-only use, so outside government intervention to tax away gas and diesel, hybrids will continue to have but a limited market. 

Meanwhile and ongoing, gasoline remains the ever viable option.

So, GM is a success now that investors have lapped again at the public trough and picked up some $20 billion in federally-secured equity?  Disugusting is as disgusting does: did you know that GM’s owner — you — is allowing the new GM to carry forward the old GM’s operating losses as future tax deductions?  The worst of this is it’s so predictable.

And so are the ongoing lies from Obama.  Yesterday he claimed:

“General Motors relaunched itself as a public company, cutting the government’s stake in the company by nearly half.  What’s more, American taxpayers are now positioned to recover more than my administration invested in GM.”

Uh, no.  Not if you’re advancing GM another $45 billion in tax deductions, and especially not — you weasel — if you include the $13+ billion Bush loaned to GM.  And don’t forget to add the grants, tax benefits, and consumer credits of $7500 per car to push electric cars on Detroit and the American consumer.  All this to protect union jobs & Obama’s political constituency.  Don’t believe me?  Check out my entry on the “American Recovery and Reinvestment Act of 2009: aka Bailing Out Teacher Holidays.”  Multiply two days of paid leave for already employed teachers by GM, Chrysler and the UAW and you have a good idea what’s really going on with the bailouts and “stimulus” money: pure political bribery.

Don’t miss it for a second: on the day of the IPO, Obama praised GM and the auto industry with creating the American middle class:

“… the American auto industry -– an industry that’s been the proud symbol of America’s manufacturing might for a century; an industry that helped to build our middle class…”

Aside from the historical lie that a single industry created  the “middle class,” know what the phrase is code for “UNIONS, and in this case “UAW.”  That’s what it has been for Obama from day one, and onward it goes.

You just wonder, though, at what point does he realize it won’t work?  He bailed out GM in order to save the unions, but by bailing out GM he is killing it.  This kind of “industrial policy,” as the Wall Street Journal calls it, is backwards and self-defeating. With GM now unloading piece-by-piece the remnants of its closed factories, with the Hummer and Saturn brands dead and buried (Pontiac soon to follow), with the legacy labor costs merely re-wrapped as securites like a subprime mortgage and otherwise barely unchanged, with the Government forcing retention of at least one major, money-losing plant, and with CAFE rules looming over profitability, there’s more of the old GM in this IPO than anything new.  The only things missing are the $30 billion in bonds that the government stripped off of legitimate credit holders in the fake banktrupcies of Chrysler and GM.

All opportunity to remake a truly vibrant, truly competitve domestic  automobile manufacturing segment was lost in these bankruptcies, and this IPO seals, once again, a poor future for U.S. competitiveness.   Real jobs, real futures, real economic vibrancy could have been found in the GM distaster.  While the cynics argue that the GM/Chrysler bailout has saved Ford, too, when you look at Ford, it’s hard to make the case.  Ford is stuck with industry-wide labor contracts which are now entirely arbitrated by the Government.  Ford is stuck with a cost structure and a lineup mandated by the Government.   Had GM been allowed to break into legitimate pieces, had the union contracts been properly allowed to dissolve, not only would the phoenixes of Chevy, Saturn, Hummer, Buick, Pontiac — and, yes, Ford, Jeep, Chrysler, and Dodge arise healthy, competitive, and fighting, but labor, suppliers, and the surrounding economies of the Rust Belt could have found a so badly needed renewal. 

Industrial policy, indeed.  Wasteland.

=============
See these WSJ articles:
Meet the New-Old GM
Deals of the Day: A Day After GM’s IPO, Debate About Its Bailout Persists
An IPO for Uncle: The government partnership with GM is a long way from over
GM’s Other Big Sale: What Am I Bid for This Wrench?

From the news file:

The Government Accountability Office, the investigative arm of Congress, found that some of the stimulus money given to North Carolina schools was spent on movie tickets and a water park trip – “a potentially unallowable use of these funds,” the GAO said in a recent report …. The GAO said Winston-Salem/Forsyth County Schools gave $38,400 of Recovery Act (stimulus) funds to the Housing Authority of Winston-Salem in 2009 for a summer enrichment program for students. According to the school superintendent, the school district’s money was to be spent only on teachers’ salaries. But the GAO found that in addition to paying a total of $17,270 in teacher salaries, stimulus … also paid for field-trip-related expenses, including tickets for movies, a water park, fast food, and other entertainment.  “For example,” says the report, “activities for students included a trip to the movie theatre to see movies entitled Ice Age (for K-5 graders) and Terminator (6-12 graders) for a total of $405.50 and a trip to a water park, Wet and Wild Emerald Point, for $961.23 (including food and locker rentals).”

Alright, forget about legitimate purposes of Federal expenditure (to pay for movies? seriously).  Forget about the scale of this money in one little school district.  Please explain how does this $38,400 in any way “stimulate” the economy?  Who benefits? and why?

Last night I had a conversation with a Loudon County, Virginia school teacher who, when asked about Thanksgiving plans, excitedly told of her week-long Thanksgiving break with the normal Monday – Tuesday working days now paid holidays thanks to the Feds.  How nice.  And worse, she thought it was from Stimulus money, while it was really an even worse bribe to the Teachers Unions called the  ”Federal Education Jobs Fund,” which was signed into law in August.  No mistake on the timing.

As have many local governments, Loudon County teachers were given two-day furloughs — unpaid leave, that is — to save money that wasn’t there to pay for the school budget.  It’s neither unusual nor cruel, it’s just two days without pay in the name of public funds.  Now, the Federal Government has given them back their holidays:

Loudoun public schools received nearly $9.5 million this fall as a result of Virginia’s grant application for funding from the Federal Education Jobs Fund. On Tuesday, the county Board of Supervisors voted to turn over the funds to the county School Board, which plans to use $4.5 million to restore pay to Loudoun teachers for two furlough days imposed this year.  (Washington Post)

Really, how dumb can this all get?  Really.  And Loudon’s little $5 million gift is nothing compared to the overall waste across the country, such as this in Georgia, where some of the “ Federal Education Jobs Fund” — aka , buying off the “Teacher Unions for the 2010 Congressional Elections,” was spent on teacher bonuses.  You got that right, bonuses:

A federal program designed to help school districts avoid layoffs triggered by budget cuts didn’t save jobs in many metro Atlanta schools — at least not this year.  But Georgia’s award came after pink slips were handed out and after the school year had begun in most counties. So instead of saving jobs, school districts used the money to cancel furlough days, dole out one-time raises or squirrel away dollars for next year. 

DeKalb County schools. Received $18.3 million. Full-time employees will be repaid for furlough days and will receive a one-time $1,025 bonus before Dec. 17.  Cobb schools. $20.8 million. Staff will not have to take two remaining unpaid days, and eligible educators will get a midyear raise, based on years of experience.

Are you pissed off yet?  You ought to be.

I’m watching the Colts-Eagles game, and through the 2nd half I’m getting nothing but Chevy Tough ads about the latest, greatest, and biggest TRUCK.

Wait a minute: this is my Government’s Motors?  What happened to small?  What happened to fuel efficiency?  Of course football fans are a good place to advertise pickups, but, come on, isn’t this the Government’s GM?  I just don’t understand how our Janus government can push EPA standards on one side of the mouth and spout Chevy truck ads out the other.  Hypocrisy, or just plain stupidity? 

I fear it’s the latter.  Meanwhile, the truth can’t be stopped:

Pickups pick up the pace in sales
Trucks outsold cars by the highest margin in nearly five years in October, a small sign that the economy may be starting to improve. These trucks aren’t the tractor-trailers that haul freight. They were vehicles such as pickups, SUVs, minivans and smaller SUVs, which made up 54 percent of all U.S. vehicle sales according to industry tracker J.D. Power and Associates, while cars made up 46 percent of the market. That’s the biggest margin of difference between the two categories since December 2005, when trucks accounted for 56 percent of sales.

Wall Street Journal readers have lately been treated to an ongoing debate between Ratner “the Car Czar” and his defenders and one or two of the remaining defenders of former GM Chair Rick Wagoner.  No surprise here that Bromleyisms won’t have any of the Ratner /Obama salvation myth.  I won’t go as far as the Journal’s Holman Jenkins in defending Wagoner, although I won’t dismiss it, either.  He credits Wagoner with attempting to deal with inherent problems and with renegotiating Union contracts and lower per vehicle costs well before the ’08/09 collapse.  But I’ll side with the critics with too little, too late. 

But never, ever will I side with the Obama myth. Simply put, GM should have been put to a real, honest, no bullshit bankruptcy.  And then the US Government should get around to real, honest, no bullshit reform of industry regulation, especially the ludicrous CAFE standards that get jump-started everytime oil prices spike.  On this, Mr. Jenkins and I agree:

To be sure, the celebration was short-lived for reasons detailed here in late 2007. Overnight there was a collapse of congressional resistance to more fuel-mileage craziness. The Bush administration and Democrats (including a novice senator from Illinois) were suddenly outbidding each other to capture Detroit’s hard-won labor savings and apply them to uneconomic investments in fuel-economy—one of those pesky external factors that CEOs can’t control.

Ultimately, our plea here isn’t for Mr. Wagoner but for non-stupid journalism, which some pessimist said is the first draft of history.

But I gotta give Jenkins credit for this last one, dead-on right about what really went wrong in ‘o8:

Big incentives are dangled in front of CEOs precisely because the temptation is not to fight for change, because even the best-laid plans often end in defeat. Mr. Wagoner did more than any CEO in decades to tackle GM’s structural challenges, but—isn’t it a kick in the head?—his real nemesis turned out to be a few million exuberant home buyers, who provoked a global financial crisis and sunk GM before his efforts could pay off.

From “How GM failed and Ford survived is not a tale of either Obama genius or CEO incompetence“

Houses or not, among the indemic problems the New GM will never negate is the government mandate that the company build cars that consumers don’t want. Look for US automakers to survive, as ever, on the big car, with or without Congress and the EPA.

Just in, GM has announced that the “Volt” will retail for $41,000:

Chevy Volt will cost $41,000 before tax credits

How awesome is that: rather than having to rebuild your garage to fit another Prius (two Prii?), you can double your conscience with a single Volt!   Oh, wait: the federal government offers buyers $7500 in tax credits for electrics, so you’ll have to settle for 1- 2/3ds Prii, or, worse, if you’re in California, which offers another $5000 tax rebate, you’ll only get a Prius and a half for your money.  Either way, even if you have to share your conscienc with the government it’ll make you feel good. (Do stock up on “energy saving” lightbulbs, cause you’re gonna need some carbon credits to keep that conscience fully charged.) 

I’m not so sure, though, about any lifestyle enhancements from this car, especially per dollar spent on it.  Sure, new technology needs momentum, competition, and volume for prices to fall, and, sure, after years Toyota has finally recovered its investment in the Prius, but 40K for an economy car?  Truly, this is inane. 

The electric car is inherently limited, and it’s limited in a way that gasoline cars never were.  In the early days of the automobile, the only serious complaints about the internal combustion engine regarded complexity, not performance. Even if gasoline cars have become more complex, their ease of use and performance have improved exponentially.  Gasoline delivers.  With electrics, it’s the worst of both worlds: complexities surround design, build, performance, and, worst of all, use.  And with hybrids – it’s the worst of both gasoline and electric.  And with the Volt — designated a “plug-in hybrid”, it’s the worst of all three worlds, gasoline, electric, and both. (Note: the gas motor in the Volt  is used only as a generator, and alothough it is not sophisticated it still requires all the maintance of any gas motor.)

GM has managed to thread the eye of a needle with this “plug-in hybrid,” which the SAE has designated as “Extended-Range Electric Vehicle.”   The supposed purpose here is to differentiate between dual propulsion systems (hybrid) and a single-propulsion electric motor with a gasoline generator.  Whatever.  What is at stake here is public policy and money, not truth in advertising.  By calling it an electric, the Volt qualifies for all the grants and subsidies and other federal rules and requirements.  The question here is if the gasoline motor qualifies it as hybrid or if it can maintain “electric,” as GM claims.  It won’t matter, as GM will get all the designations and benefits of the electric category. And there’s more:  new CAFE standards are going to hurt the domestic builders, so there’s this little problem of what, exactly, is the “miles per gallon” of an electric car?  Somehow, while claiming “electric,” GM is also maintaining that the Volt gets 240 mpg (electric?  no — that’s due to the “generator” that runs on gasoline).  Add 50,000 units to the GM “fleet average” and we’ll be seeing GM back to selling pickupts and SUVs for some real profit again soon enough.  It’s beyond a scam, and I honestly feel bad for the suckers who spend the forty thousand for this fake indulgence.

As a pure electric, GM claims the Volt can make 40 miles on a full charge, and that 8/10 Americans commute less than that a day.  I’ll grant them both, but let’s look at what 4o miles really means.  Let’s see: 10 miles to work each way, then come home and plug it in, but don’t forget, because you need a grocery run, and then the kids need to go to soccer practice and you think you might have enough time for some Tai Chi except that the dogs have eaten you clean of kibble and you’d rather buy that at the Petsmart 10 miles up the road rather than the local Giant but you’re stuck going back to the Giant because you forgot to plug in the car, but, hell, you may as well go to Petsmart because its next to the Costco and you need 18 dozen cans of Cambell Soup and a case of toilet paper — and you have to take the Volt becuase all that won’t fit into the SmartCar…  Before you know it, you’ve gone 60 miles and that tiny 1.4 littler gasoline motor is killing itself to run the engine and recharge the battery to get you back home.  And then you forget to plug it in for the night again…  By morning, you’re too tired for a clean conscience, so you drive the Suburban over to the Exxon and fill it up with 35 gallons of regular unleaded which will be good for a week or two.

Then there’s performance. You really want a rev-limiter?  Really? Hell,  I just put 600 miles on my F150 going up and down the Northeast corridor, and I wasn’t passed by a single Prius — not one.  And, yes, even in the truck, I had to pass many a Prius, including all too many that were hugging the left lane at a blazing 68 mph — sure pushing that little gasoline motor there, my little Prius friend!  Back home, I jumped into the XC70 for a trip to Philly and back, and on a tank of that magic fluid, gasoline, I did what I want where I want and how I want — and as fast as I wanted (the NJ police cooperated that day).  All it took was a 2-minute detour at one of the many hundreds available “re-charging” gas tank stations all along my route.

I’ll grant that the Volt and other hybrids fulfill the needs of basic auto use, but I’ll never ever ever admit of their superiority to a kick-ass gasoline or deisel motor that packs amazing amounts of energy in but a little, easily & cheaply refilled container under the chassis.  Hybrids are by design a compromise, and electrics are inherently limited.  Even the fastest of them (see the BMW high-end hybrid) cannot possible deliver the miles, the performance, the ease of use, and the manufacturing and design efficiencies per dollar of gasoline. Forget Tesla: anyone can make a high-performance electric — and no one can make one that’s fast and doesn’t drain the battery like an iPhone 4 on youtube when you need to stretch you legs. The engines can be strong and fast but not when applied to daily use.  Thinking the Tesla to the everyday is like wanting a Porsche in every garage.  Ever driven a Porsche?  Let’s just say that functional compromises abound when making a car that goes from 0-60 and back in under five seconds.  You can do that in the Tesla, but not for very long.  With but a short spell of serious driving the Porsche will still have half a tank while the Tesla is back in the garage for a full 30-hour recharge.

But I’d sure take that over this abysmmal compromise that is the Volt.  The damned thing weighs 3500 lbs ( here) — which is — you guessed it, an amazingly 199 lbs less than my Volvo XC70, two seconds slower on the 0-60 scale, and, with the limiter at 100mph, some 40 miles per hour slower.  And let’s not even talk trunk space.  Then there’s the Prius, now in 2011 with a slightly larger gasoline engine, that makes 0-60 in 9.8 seconds, which is almost, but not quite as bad as a ’74 Mavarick.  Again, neither of the electrics fare well when pushing those 0-60 numbers.  It’s gets so tough when you’re trying to save the world from gasoline.

Okay, I’ll give to the hybrid idea, but only a little.  Today’s hybrids have it backwards.  Rather than supplementing an inferior drive train (electric) with a small slice of a vastly superior one (gasoline), it ought to be the reverse: supplant the internal combustion with some electrical power — if you must. Sure, an electric motor might keep the A/C working at stop lights while the gasoline engine rests.  Or, for stop-start traffic, run it on the electric.  But at what cost?  A significant one, that is. I’ve already gone over and over the added costs of hybrids, and now Chevy wants us to add to it a wholly electric car that merely doubles down on all the disadvantages of the hybrid platform.  Indeed, gasoline is still king (here for a Washington Post article on gasoline that quotes me, and here for another interesting piece on the superiority of gasoline over electricity by Ralph Kinney Bennett).

There’s so much here, and, of course, it has nothing whatsover to do with a speech by GM’s CEO, Barrack Obama, the other day about the future of electric vehicles:

Obama to promote electric vehicles in MI (July 15, 2010)

Whose interest is really at stake here, anyway?  Your conscience, or your wallet?  The government is taking a monopoly on both. (Hold on tight!)

Thomas Boswell wrote last week that DC fans abandoned the Orioles over Angelos’ fighting a DC team ( Nationals’ progress is making struggling Orioles easy to forget. That’s ridiculous. Of all the boneheaded, asinine, head-up-the-ass, ego-driven idiocies of the man, fighting the DC team was the least egregious — and among the few understandable moves that moron ever made.

I was a DC-area, lifelong O’s fan. I spent three years in Baltimore, and remained loyal even after moving South for six years — and even after Angelos bought the team in ’93. I came back to DC in the late 90′s and did my best to follow the team, but it was getting ugly with the stupid Palmeiro contract, the Angelos strike-busting team in ’95, the Cuban exhibition, and then into the Alomar, Sosa, Tejada, etc. idiocy.

But what did it for me and for most fans was the Davey Johnson firing and the ridiculous positioning on Mussina’s free agency — and letting him go to the Yankees. These two things alone knocked us away. Everything else was but background, supporting evidence. Angelos’ ego never showed more stubbornly than with these two, along with Ripken, the very best of Orioles of the 1990s.

Dissing DC didn’t change a thing for core fans. All it did was to convince any lingering DC area fans that money and time spent in Baltimore was even less appealing than before. Having been a 30+ game a year fan during the 80s and early 90s from both DC and Baltimore, I went to all of two games at Camden Yards in the 2000s, and haven’t been back since the Nat’s opened.

The only consolation I have regarding the O’s is that my dear Redskins have been equally abused, torn, and ruined by dum-as-dirt, ego-driven ownership, and I refuse to spend a penny on either franchise until both owners skip town, shoot themselves, or are publicly hung.

I read the Atlantic Monthly, for it’s perspectives vary, usually without hitting one political extreme or another. I can count on every issue to evoke thought and bring to me something new or learned.

The lead article of the February issue was “How America Can Rise Again,” by James Fallows, a long time correspondent for the magazine. Over the past year or so Fallows has submitted some rather fascinating articles on China, where he lived for a few years.

It wasn’t until this piece of advice to America that I was every truly bothered by Fallow’s latent, condescending leftism. He’s usually a pretty good observer. Do know this about him: he was a speechwriter for Jimmy Carter. This article was just stupid, now.  Not for its content but for the impetuous and constant use of the term “teabaggers” used as an insult upon the members of the “tea party” movement.

But I got to thinking: why would the editors leave the insult in multiple place? Wouldn’t a calm, detached, editorial review remove the demeaning reference? 

Not only not does the Atlantic editorial stance find no offence in Fallow’s blandishment of the tea bag, the reference seems the standing editoral policy. A search of “tea bag,” teabagger,” etc. yields several hundred uses of the derogative, a quite a few in the headline.  What’s up with that?

If you don’t know it, and our dear President knows it and has used it purposefully, the “tea bag” is a reference to dropping testicals into the mouth.  Before Obama used the deliberate detraction, I was not in the know on this one.  The online urban dictionaries define it as between a man and a women, but that’s not it: it’s a gay thing. (doh)

The President, The Atlantic, and all the “teabagger” enthusiasts are doing this purposefully and with clear vindiction and ugly contempt.  I’m just left wondering how a gay slur gets thrown at supposedly bigotted right-wingers?  There’s some serious self-loathing therein, especially coming from Andrew Sullivan (and Obama?). And why doesn’t Gay America and Porn America object?  Where’s the hate of hate? Where’s the outrage?

Teabag?  It’s gross, and ought to be left in the bedroom, and not on the streets of political loathing.  Shame on you, Atlantic Monthly.

=========
Here for National Review’s article on the origin and use of the term

Here in the Blizzard of ’10, I’ve been nothing but happy – snow, snow, my dog, the fireplace — and a kickass F150 4×4 w/ huge wheels.   Nothing has gotten in the way of the truck, not snow banks, not ice, not the Jersey barriers built up by the snow plows:

"Thunk" devouring snow (Dec/09)

My neighbors have all been quiet these days, despite my offer to toss their Subarus, Range Rovers and Jeeps into the back of my truck and give ‘em a lift to the grocery store.  They’re so depressed that they won’t even take me up on offers for beer runs.  Nevertheless, they come around, asking for an extra key for the family of a newborn, asking to trade a six-pack for driving down the snow in front of their driveways, or generally looking at my beast with envy.  I have standing offers for rides to the nearest Ford dealer — only wife intervention has stopped two or three of these from being taken up.

Nothing like taking away peoples’ cars to remind them how much they love ‘em.

Which reminds me of this article from last July, well before Winter fell upon the world like the Lion, the Witch, & the Wardrobe:

 Enjoying the sunset of the automobile era

A “non-driver,” the author claimes not to “hate cars,” but does certainly hate their amazing impact on the world, which comes down to its having “spread everything out far beyond human scale.”   So we get the usual complaints about malls, suburbia, and accidents.  Whateva, and nothing new therein.  What is new is that the fear and hatred that birth the ideal of a car-free world just ain’t happening.  We’re still not running out of fuel; we’re still not not using our automobiles.  And every crisis, from the snow-bound, to geopolitics and $5 gasoline, merely reinforces the dire imperative that is the automobile. 

Cars are a blessing.  Cars have made the world so much the better — not for extending it “far beyond human scale,” but quite the reverse, for extending the human scale across space, time, and climate.  All the fuss out of Washington over “energy independence” means nothing to the simple fact that Americans will always and ever want and need their cars.

I’ve expressed in these pages my doubts over the hysterical wish that leads the thought of salvation through hybrids and electrics and mass transportation.  I have no problem with technological advance; I loathe the self-satisfaction of the gasoline-haters who would deny its imperative despite its enormous utility, who emote solutions over practicing them.  Meanwhile, our truck, a magnificent hunk of steel and glass, at 12 mpg is serving my community, my family, and my basic human needs like nothing else out there.  I’m on call at the hospital, I’m making tracks for my neighbors, and I’m riding safe on treacherous roads.  God bless the internal combustion engine.

only fools were out there unless they had my truck

Last Autumn, a Reuters reporter called to discuss the implications of the government takeover of Chrysler.   The GM debacle was not yet clear, and it seemed to most a simple matter of extending TARP-like billions (“bill-yuns”)  to Chrysler to get it through the hump.  The reporter was interested in the connections therein to the British government takeover of Leyland back in 1975, a story that did not end well.

I wasn’t much helpful, since I had little to add to the history.  He knew that British-Leyland’s story didn’t end well, although some of the brands survived as firesales to other players, such as Jaguar (picked up by Ford), Mini (BMW’s salvage operation), Rover (BWM, then Ford), and a few other divisions that went similar directions.  What I did say was that once the government owned a company, it would do its best to protect its holding.  Since there wasn’t anything to say about that before the Chrysler takeover, it wasn’t quotable.   What went was my comment about the origins of Chrysler as a phoenix born of the ashes of other failed companies (here for the article, Over 80 years, turbulence Chrysler’s one constant )

Meanwhile, there’s been little to show of my prediction that a government-owned company would use the authority and power of its owner to promote it.  Well, that is, outside of the Government takeover through a sham bankruptcy and reorganization giveaway to the UAW — which was wholly political.  Nevertheless, the U.S. Government has remained neutral in the market since its takeover of Chrysler and GM.

Just wait.  Oh yes:

Obama Administration Says It Is ‘Not Finished With Toyota
The Obama administration toughened its stance toward Toyota Motor Corp. on Tuesday, saying it is still reviewing possible safety defects in the company’s vehicles and weighing other actions. “We’re not finished with Toyota and are continuing to review possible defects and monitor the  mplementation of the recalls,” Transportation Secretary Ray LaHood said in a statement. Another DOT official said the agency is considering a civil penalty against the Japanese auto  aker. Mr. LaHood, in his statement, said “while Toyota is taking responsible action now, it  nfortunately took an enormous effort to get to this point.”

It wasn’t a matter of principle — it was a matter of timing, simply.  Here we go.

==============updates

Feb 4, 2010: I guess I’m not the only one seeing this way… Is US bullying Toyota on recall?

Feb 18: Toyota Recall Raises Questions About Conflict of Interest

Feb 19:  must be getting hot over there at DOT:  U.S. says no GM ownership conflicts in Toyota case

March 5: it keeps getting worse.  Here for some Toyota dealers who see through the “crisis: Scranton Toyota dealer blames politics

March 28:  Exorcising Toyota’s Demons

I’m now a certified adobe hater. I hate flash. I hate the reader.  I hate ‘em so much I refuse to capitalize ‘em properly.  Not getting my respect here. 

Here’s some of my hate:
* I hate the way flash has so few options, and the ones it have include letting websites spy on me.
* I hate that flash won’t stay full screen on one monitor while I’m doing something else on the other screen on extended desktop (that, btw, is the biggest PC innovation since Win95!!)
* I hate reader. I hate not being able to cut/paste. I hate its update settings. I hate all the features I’ll never use.
* Mostly, I hate that adobe bought flash.
* I hate adobe’s customer service.
* I hate adobe’s developer websites, which are all you can find.
* I hate the fact that this company makes money off me.

And I’m too lazy to go find something else.  And those somethings are out there, including:

* flash alternatatives: Osalt and Gnash
* reader alternative: Foxit 

Actually, I think I’ll actually try these, especially Foxit. I’ll report back if I ever get around to it. Meanwhile, I’m just gonna generally bitch about adobe.

“I’m from Wrentham, I drive a truck and I’m asking for your vote.“

Up in Boston trying to salvage the sad campaign of Martha Coakley for the open Senate seat,  Obama went after her opponent, Scott Brown, he of the “pick up truck” campaign.  Unknown, lacking party support, and with no cash and a GM pickup, Brown started his campaign the old fashioned way, by driving around to meet the voters — in the truck.  

I count no less than six references in Obama’s speech to Brown’s truck — and all of them lame: “think long and hard about getting in that truck” … “park his truck on Wall Street” … “everybody can buy a truck.”

That last one is the problem, Mr. President.  The speechwriters – gasp, or Obama? — thought they could ridicule Brown’s populist campaign by making fun of the pickup truck as common.  Talk about elitist nonsense. Clearly neither the President nor his staff have noted these numbers:

Last year, the Ford F-Series line of pickups outsold the General Motors Chevrolet Silverado line by 97,081 units, according to Autodata. That made the F-Series the best-selling truck in 2009. In addition, the F-Series has been the best-selling vehicle of any kind in the U.S. for 28 consecutive years (Freep.com)

The pickup truck is America’s people’s car.  It’s the ongoing Model T, the Bug, the Everyman’s Car, the whatever you want to call the most popular vehicle in the U.S.A.   Brown’s got a GM, and he’ s put almost 200,000 miles on it, much of it during the campaign. And he used it for the same reason the pickup outsells all other models by far: utility.  In Brown’s case, he could fit campaign signs in the bed, while comfortably traveling around in a 4-door passenger vehicle.

Once again, this President hasn’t a clue about cars.  Too bad he runs two of our last three car companies…

Compare Brown’s take on the truck to Obama’s.

Earlier in the year I cataloged the rather extraordinary bankruptcy and reorganization schemes of Chrysler and GM that benefited the UAW over just about everyone, including the taxpayers.  Now it gets worse:

GM Sheds Billions In Costs Today
The UAW’s VEBA Trust now has the health care cost burden
Starting today, January 1, 2010, General Motors will be freed of billions in health care liabilities. Last May, as part of GM’s efforts to restructure out of court, they and the United Auto Workers union agreed to an amended version of the 2007 contract. Included in those revisions were for the union to take over nearly all of members’ health care costs.

Prior to today GM was liable for nearly $2 billion per quarter in health care costs related to both active and retired UAW members. Starting today the UAW’s Voluntary Employee Beneficiary Association (VEBA) Trust will take over responsibility for those costs. As part of the contract, yesterday GM transferred a $10 Billion payment to the VEBA Trust from their pension fund. Additional funding for the VEBA Trust will come from the UAW’s equity stake in New GM when the VEBA Board wishes to sell their stake and annual payments to the fund by GM, and eventually Chrysler and Ford. Additionally, next week GM will issue $9 Billion in preferred stock to the VEBA fund with a 7% dividend. …. Today’s health care cost reductions come in addition to just over $30 Billion in non-cash liabilities and nearly $27 Billion in debt that GM was freed of in it’s June 2009 bankruptcy filing

Translation:  the stock transfer to the UAW that was supposed to fulfill the — UNSECURED — obligations of GM to the union health care and retirement funds — has now paid an additional $10 billion dividend — plus another $7 billion in preferred stock… !

This is beyond gross, beyond corrupt.  And it continues as precisely as it commenced, a bailout not of an industry or a company, but of a labor union.  So much for clarity. So much for honesty.  Just gross.

================

And for more gross, see:

Nonunion Delphi Employees Get Shaft in Auto Bailout

asdf

A couple interesting headlines contra-juxtaposed from today:

Autos: Diesels could outrun hybrids in 2010
Plug-in hybrids may generate more eco-buzz when the calendar flips, but diesels could prove more powerful in revving up the automotive economy.

Now measure it against this:

2011 Mustang GT to have even more horses under the hood
Ford Motor Co. announced Monday that it plans to introduce an all-new 5.0-liter, V8 engine for its 2011 Mustang GT in the spring. The V8 engine will deliver 412 horsepower and 390 pound-feet of torque – 87 more horsepower than the outgoing engine.

Diesels, now just over half the European passenger car market (source here), are said to be headed towards 10% of U.S. cars by 2015.  For diesels to make it to 10% of the markets, sales would have to grow exponentially to move up from today’s 2.1% share (here).  By comparison, hybrids currently hold 2.7% of the market (roughly 270,000 cars), and are expected to reach 3.2% next year and 7% by 2015 (here).

For diesel to treble its marketshare in five years, its distribution business would have to grow exponentially as well: as of 2006 only 42% of filling stations sold diesel (here).  As hybrids use gasoline, the technology would seem more congruent with current infrastructure, yet the expected growth is less.   The reason for this is that diesel has existing manufacturing structures, while hybrids require new materials, new technologies, and new designs.  But there’s a larger reason why this growth is self-limited:

Expectations for alternative fuels and engine technology are not market-driven, not-technology-driven, and not consumer-driven.  It’s politics and hysteria.  Fact is, gasoline engines are more useful, more versatile, and more  difused across manufacturing, distribution, service, and consumption than all other technologies.  That doesn’t mean things won’t change, but they won’t change because none of the “solutions” for the gasoline-powered internal combustion engine really solve anything:

*  Hybrids-cost more in the premium paid than the normal ownership lifetime of fuel savings.  Worse, as a compromise technology, hybrids just don’t satisfy the full wants and needs to automobile manufacture and use.  They stink on the highway, leaving the only viable market city-use, which is ridiculous since most driving miles occur on highways. 

* Diesel’s success in Europe is due to tax policy, which won’t fly in this country.  Subsidies, tax breaks, and tax punishment of gasoline led to — oh, only half of cars in Europe going diesel.  I guess gasoline is just too good to completely let go… 

The only way to change is to force change through government mandate, as was done in Europe with diesel (and after WWI and II, with tax policies aimed at limiting engine size).  Thankfully, a remaining salvation for this nation is the direct representation of constituents, which makes it difficult that “for-the-higher-good” government decisions to be imposed, such as a huge tax hike on gasoline.  It won’t happen; too many diverse interests across geography and the economy would halt such a tax scheme.  Perhaps the market and geopolitics will bring us back $4-$5 gasoline, but that’s always and ever a momentary spike.  There’s just too damned much oil out there (see North Dakota’s oil boom), and gasoline is just too damned useful.

* Electrics: whatever. It’s the current salvation for Chevrolet and its parent, GovermentMotors, and that’s about it.

Here’s what’s really happening: with the higher CAFE fuel requirements, U.S. makers will have to offer super-high fuel efficiency small and other cars in order to offset the averages of the cars that consumers really want, especially SUVs and pickups.  Mustangs and horsepower lust won’t just go away, and unlike Europe, where peformance has been taxed into a luxury option,  it’ll be political suicide for Congress or a President to try and pry away the V8 from middle America.  Won’t happen.  Think NASCAR. 

The solution is for the manufacturers to mix in as hyper-efficient cars to run intereference for the cars that sell.  Watch Ford push the Fiesta; watch GM move the Saturn hybrids across other platforms (see here). Watch GM push the EPA to list the Chevy Volt at 200 mpg.  Watch Chrysler go diesel and Fiat-engined small… all the while all of them crank out pickups, SUVs, performance and “mid sized” passenger cars. So get used to more conflicting, confused headline mixes on automobiles, where the hysteria for green doesn’t seem to jibe with ongoing news of horsepower races between Camaros, Challengers and Mustangs.

================
Hybrid sales update Jan 7/2010:

From the less bad news than the other guy department:

Market share rises for hybrid vehicles
Hybrid cars and light trucks gained U.S. market share in 2009 as sales of the fuel-efficient models declined at less than half the rate for all vehicles.Consumers bought 290,415 hybrids, led by Toyota’s Prius, according to data compiled by Bloomberg News. That was an 8.1% drop from the previous year, as U.S. auto sales tumbled 21%. Hybrids accounted for 2.8% of total deliveries, rising from 2.4% in 2008. Fewer people purchased hybrids for a second straight year as the recession curbed U.S. auto demand and the average price for gasoline fell.

Section 4. The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence.

Now that Ben Nelson has traded his conscience for a blank check paying for his state’s additional costs of Medicare, I wonder that the deal also comes at the expense of Nebraska’s “Republican Form of Government”?

As a matter of equity, this deal ought to be  repugnant to all other states not similarly guaranteed the protection; as a matter of public decency, this deal is self-evidently corrupt; as a matter of state soveriegnty this deal removes it, and to my mind removes Nebraskan self-governance and auto-responsibility, which are the essence of the “Republican Form of Government.”

Nelson has traded Nebraskan sovereignty for party politics.  The state is now free of the obligation to control its Medicare expenses, and is, thereby, just another federal dependent.

Not that every other massive, politically-motivated federal wastage isn’t the same*; when is it just one too many?

* and poor logic: the old “everybody does it” game won’t stand it court, won’t stand ethically, and won’t stand in logic, by which it is known as a “false comparison” (or two wrongs don’t make a right)

=============
12/23/09: Looks like this one may have legs:

Conn. considering lawsuit if Nebraska gets money

and it’s getting serious here, from 12/30/09:

13 Republican Attorneys General Threaten Lawsuit Over Health Care
Republican attorneys general in 13 states say congressional leaders must remove Nebraska’s political deal from the federal health care reform bill or face legal action, according to a letter provided to The Associated Press Wednesday

Wards Auto is the latest to prick the Clunkers balloon:

According to data compiled by Wards Auto, the average gas mileage of a new car bought in August this year was 23 miles per gallon.  (my emphasis; from the SD Argus Leader  ‘Clunkers’ keeps guzzlers on road)

And…. (drum roll) .. the national average for new car sales under the Clunkers program was… yep! … 24.9 mpg.

You got it: all those billyuns and billyuns spent saving fuel went to… uh, a… an increase of 1.9 mpg — ON AVERAGE! — over two months. Go Guv’mint! Go climate change!

And the lies still pile on over the leading sales per make and type.  While the Argus Leader reports that 45% of South Dakotan Clunkers sales went to SUVs, pickups and vans, and nationally 41% were for the guzzlers, the Leaders still falls for the b.s. that “Across America, people bought Toyota Corollas and Honda Civics more than any other vehicles during last summer’s popular Cash for Clunkers program.” So what? 

Look, if 41% of sales went to SUVs, pickups, and vans, then, clearly, the Corolla and Civic share of the remaining 59% doesn’t amount to a significant, much less total, sales lead over the SUV/TRUCK/VAN category.  That 41% of sales were for trucks defies the premise of the entire program, and that magnificent 1.9 mpg savings over the mpg of a normal sales period is beyong negligible: it’s stupid.  So, Corollas and Civics took the plurality of 59% of sales, TRUCKS took the overhwhelming plurality of overall sales.  The brand is less important than the type of auto, which is why the government statistics focus so on the brand: to hide the strength of truck sales. 

From the Argus Leader:

Additional Facts
BY THE NUMBERS
A closer look at Cash For Clunker data from the nation and South Dakota:
2,441: Number of new vehicles sold by South Dakota dealers in the program.
$10,278,500: Amount in rebates for which clunkers traded in South Dakota qualified for in rebates.
3: Number of trucks in South Dakota that made the top 10 for new-vehicle purchases under clunkers – the Chevy Silverado, Ford F150 and Dodge Ram. All three have four-wheel drive and get less than 17 mpg. Nationally, no trucks made the top 10.**
45: Percent of South Dakota’s clunker sales that went to Sioux Falls dealers. Rapid City dealers accounted for 328 rebates.
50: Percentage of South Dakotans who traded in a truck, sport utility vehicle or van and bought a car in return under the clunkers program.

** BUT: nationally, TRUCKS sold 4/10 vehicles. I’d make that a clear no. 1 seller.

Moral hazard? Unintended Consequence? Or just plain foolishness?

Not even getting in to the inane cost of the “cash for clunkers” program : a staggering, stupidly useless $24,000 per new customer (see Taxpayers’ real cost of cash for clunkers: $24,000 a car – and don’t bother with the White House attempts to smother & smear this story…), and without getting in to the fanciful consumer and GDP numbers as result of the program, the Cash for Clunkers has done nother more than screw, rescrew, and strip the used-car market of all normalcy.

Real simply, over the summer of Clunkers, the used-car market was deprived of almost 700,000 vechicles. Guess what happens to prices when supply is reduced? Yep, used car prices have jumped tremendously and stupidly.

Worse, since the used-car is the entrance for many consumers, the dirth of quality, under-$5,000 cars has screwed the low-end market. Used cars have always been the great American Model T. Now, thanks to this artificial sales boost, the sole option for so many low-income, off-the-rader Americans has been denied.

Stupid is as stupid does. Will the idiots in DC who voted up this program admit of its mal effects?

=============

Follow up Jan 4, 2010: 

Catch-22 for clunkers: Auto dealers say the CARS program has spurred a ‘horrible’ shortage of used vehicles

Your government is all excited about the “”Wildly Successful” Cash for Clunkers Wraps Up with Nearly 700,000 Car Sales, Increased Fuel Efficiency,” and really, really excited that “Eighty-four percent of consumers traded in trucks and 59% purchased passenger cars” (from http://www.nhtsa.gov/).

(and did you miss that NHTSA ran the “CARS” program?? — why NHTSA? Well, well…)

The Media has already picked up the story that Toyota was the largest seller, and that no GM models made the “Top Ten.”   Really?  I mean, really?

Here’s the problem: as Edmunds.com already discovered, vehicle “models,” as counted by EPA regs separates vehicles by engine size and drive train, so a Ford F150 2wd will count as a separate “model” from a 4wd or another 2wd with a different engine.  See this from CNN:

NHTSA, the agency responsible for running Cash for Clunkers, was not immediately able to respond to a request for official Clunker sales tallies of several vehicles, including all their variations. When presented with Edmund’s analysis, the agency didn’t dispute that the way in which it counted the vehicles would tend to reduce the totals of vehicles with many variations.
(“Trucks win in Cash for Clunkers game” dated Aug 7)

And before the Media freak uncontrollably, do note that while Toyota outsold GM, it did so only by this much:

New Vehicles Manufacturers
Toyota 19.4%
General Motors 17.6%
Ford 14.4%
Honda 13.0%

When those sales are translated into distinct models distinguished by drivetrain, the Toyota strategy of fewer nameplates pays, while GM’s multi-brand of similar models goes punished — statistically only.  Ford’s 14.4% number is probably represents a stronger correlation to the Toyota numbers, and it ain’t bad at that. GM’s number is quite strong, actually.  What we’re not being told is how is that GM took almost 18% of sales in the CARS program, yet didn’t register a single “Top Ten” model.

The larger problem here is that these numbers will be used by the Media and by the Government — oh, which OWNS General Motors and Chrysler — that in order for the U.S. companies to compete they must build small cars. It’s coming, truly.  As I’ve pointed out on earlier posts, Obama has already declared his intent to push GM and Chrysler into the small car, and there’s no way, if that is the goal, the opportunity to push that agenda won’t be missed, including by using these skewed numbers from NHTSA.

Regardless of the reality of consumer demand, if GM/Chrysler/USGov get fully into the building of small cars, the government will want to cover its exposure and use its powers of coercion to mandate the success of those cars.  And, again, these lame, misleading, and, honestly, decieptful statistics will be used to make the bad case.

Before they get all too excited, let’s await for the real numbers, please?

============

Update 9/18/09 from Edmunds:

Edmunds.com Final Tally: Cash for Clunkers Buys, Trades; Ford Focus No. 1 Buy
Edmunds.com has completed its final tally of the most popular vehicle purchases and most frequent trade-ins under the Cash for Clunkers. The Ford Focus held its No. 1 spot as the favorite buy; the Ford Explorer remained the No. 1 trade-in.

Indeed, the top 10 lists in both categories wound up little changed from the early scoring on Edmunds.com’s lists.  And, in fact, many of the top clunker buys are the industry’s bestsellers in non-clunker times. Eight of the 10 vehicles on the top 10 clunker buy list are also in the top 10 for the year so far in total; only the order is changed.

Two vehicles rose significantly in the rankings, however. The Ford Escape jumped to third place from 12th place during the Cash for Clunkers program. The Hyundai Elantra soared to the No. 10 spot for favorite clunker buys from its typical No. 21 position.  Eight of the 10 were small to mid-size cars or small SUV/crossovers. Still, two of the top 10 were the nation’s most popular pickup trucks all of the time, the Ford F-150 and the Chevrolet Silverado. Both Ford and General Motors have improved the fuel economy of its trucks, which made them eligible as clunker buys.

As was evident in the early going of the program in late July, Ford Honda and Toyota dominated the top 10 clunker buys list. Toyota and Honda were expected to benefit from the program. Ford and Hyundai were the more surprising beneficiaries.

Top 10 Clunker Buys

While the courts settle GM’s new US-UAW partnership, and the Government kicks off the next round of Detroit bailouts, this time with the “Cash for Clunkers,” I thought it’d be interesting to see what next from Chrysler and GM. 

I mean, amidst all the turmoil, from the courtroom to the factory floor where UAW desk jobs are being dumped for wrenches (say what??? yes, you heard it right:  the auto task force has demanded elimination of “at least 400″ UAW “desk jobs”  at Chrysler and GM) to the latest Cap ‘n Trade tax-n-kill excitement, we’ve got the President extolling the “new” Chrysler and GM:

Many questioned our efforts to help save GM and Chrysler from collapse earlier this year …. I thought about the hundreds of thousands of Americans whose livelihoods are still connected to the American auto industry, and the impact on an already struggling economy, especially right here in Michigan  ….  Now today, after a painful period of soul-searching and sacrifice, both GM and Chrysler have emerged from bankruptcy.  Remember, folks said there was no way they could do it?  They’ve gotten it done already, in record time — (applause) — far faster than anybody thought possible.  They’ve got a leaner structure, they’ve got new management, and a viable vision of how to compete and win in the 21st century.  Those sacrifices were shared among all the stakeholders:  workers and management; creditors and shareholders; retirees and communities.  And together, they’ve made the rebirth of Chrysler and GM possible.

It was the right thing to do.

 (from speech at Macomb Community College, Warren, Michigan, Jul 14, 2009)

Yes, “they’ve gotten it done, in record time,” sure,  LOL!  … but that jibe at “creditors and shareholders”  is downright offensive. 

Right, Prez, the “creditors and shareholders” helped you, but not themselves.  The “they” was all “you,” so the “they’” now means “us” the taxpayers along with your favored constituency, the UAW. 

Welcome to the “NEW” Chrysler and GM, folks: ”leaner structure” and “new management” (doh!) and all!   So, as GM sells the golf course and Chrysler restarts production this week, don’t you wonder what they’ll be making? Maybe this:

The Chrysler “Change”

The Chevy “Hope” 

Yeah, baby, let’s roll!

(*images from wikipedia) 

George Will put it nicely today, just how strange it is that the U.S. Government has been buying automobile companies:

 Economic policy, which became startling when Washington began buying automobile companies…

It ought to be “startling” and downright strange that the government owns these companies. Yet folks take it in stride, whatever… Think of it, though: its now government taking not just ownership but a definitive position in a business and a stake in a consumer market.  We’ve already seen the government side with the UAW over secured creditors and normal Common Law legal procedures in the Chyrsler/GM bankruptcies. As if that’s not absurd enough, now they’ve got a definitive stake in the outcome of these companies. What if the “investments” sour? Will the government simply accept the failure, or, will it next mandate their success? Imagine a bit, what that can mean:

The argument over nationalization has at its base a disagreement over the use of power.  Private companies can only exercise the powers of persuasion and contract. (Again, see earlier posts on Chrylser and the UAW on how the current regime has diluted the power of contract.)  Governments exercise the power of coercion.  A marketplace based on persuasion opens itself to competition, which foments new ideas and products that are rewarded or punished contractual partners or consumers.  Governments, however, can simply decide what will be.  Self-governance is supposed to regulate governmental demands by requiring the consent of the governed. But, really, how much of what goes on in today’s regulatory state is truly at the consent of the government.  So w have an ugly mixture of both systems, full of perverse incentives built around government and business seeking competitive advantages within, around, and through laws and regulations. Yet, competition, for the most part, survives.

What happens, though, when the government has its an incentive beyond regulating fairness, and instead built upon a direct stake in the marketplace?

A blind investment in auto companies and banks remains benign so long as it plays out according to rules of private enterprise; but once the government decides the outcomes don’t fit the policy, they will change the outcome by fiat: more taxpayer money spent propping up the companies or “persuading” consumers to buy their products over the competitors, punishment of the competition through tariffs, taxes, and other rules (such as forced collective bargaining), or outright dismantlement of the competition.  It has happened before, it is happening now. 

And it can happen here.  Choose carefully, America. Here below are two visions of public policy and automobiles, one from Venezuela, the other from India,  that are heading in opposite directions. Which shall we choose?

Take One:

Automobiles Sales Cut in Half: Uncertainty leads to stagnation of sales in the automobile sector
The Automotive Chamber said sales of vehicles in June 2009 fell to 10,518 units, 50.9% less than during the same month in 2008. During the first quarter, accumulated sales fell 47.5% compared with the same period during the previous year. This stems from the uncertainty surrounding the sector since the beginning of the year. The lack of permits for importing vehicles, persistent and prolonged delays in accessing dollars at the official exchange and labor conflicts at some assembly plants have only led to additions to the long list of buyers, who, despite the crisis, are looking to protect themselves from inflation by buying new cars. The outlook does not look any more promising if the bill regulating the buying and selling of vehicles, now before the National Assembly, passes. In the draft version, between 3% and 10% profit margins are established for dealers. “The idea is not to affect the industry, but rather to protect consumers”, ruling party Member of Parliament Elvis Amoroso said. Inflation in Venezuela reached 30.9% in 2008.   (Jul-06-2009 06:07pm)

Take Two:

The Canadian Press: Indian vehicle sales rise 3.25 per cent in June, thanks to strong demand
MUMBAI, India — India’s vehicle sales rose 3.25 per cent in June from the year before to 176,436 cars and trucks, while exports continued to grow, according to industry figures released Wednesday. Sales of passenger cars rose 8.29 per cent, to 140,243 units, while commercial vehicle sales continued their long slide, falling 12.51 per cent in June, to 36,193 units, the Society of Indian Automobile Manufacturers said …. Since late last year, when the global economic slowdown began to hit India, the government has tried to stimulate demand for vehicles, cutting key interest rates and announcing government bus-buying programs. In the new budget announced Monday, Finance Minister Pranab Mukherjee unveiled a slew of tax cuts and spending measures, mostly targeted at the poor in rural India, to stimulate the nation’s flagging economy. But some felt there wasn’t enough help for the auto sector. 

Venezuela has been an oddity, with its particular curse of easy oil money, but when the country allowed markets free found sucess; the opposite story is from India, a socialist country shedding itself of the deadening of state mandates. Now compare these competing visions to this:

It’s too early to say the full impact of the GM and Chrysler bankruptcies and their “re-organizations” into government and UAW play things (and such a nice toy is Chrylser for Fiat out of it all). But consumers are clear: Ford marks a better buy.

By restricting imports, Venezuela is attempting to regulate away consumer choice. India, on the other hand, is promoting consumer choice by lowering barriers to trade and industry.  We could be headed towards Venezuela on this.  Could.  Meanwhile, look for more of the same upward path for Ford as it goes the way of India, while GM and Chrysler follow Obama’s bud, Chavez, down the pit.

= = = = = = = = afterword:

Here for another fascinating juxtuposition:

1) From the Latin Business Chronicle:

Venezuela Auto Imports Plummet  
 TOP IMPORTS: Venezuela’s new import restrictions affect leading import models like the Chevrolet Optra (top) and the Ford Fusion.  Venezuela’s once-booming auto market is hit by a new auto law that is driving down imports and overall sales.  After record sales last year, Venezuela’s auto market is seeing a strong decline this year thanks to new government measures aimed at restricting imports. “The situation in Venezuela is extremely challenging,” says Eduardo Mayoral, managing director for Chrysler Latina, which oversees the company’s Latin America operations. “The tremendous bureaucracy and new regulations in the automotive industry in Venezuela…have made business very difficult.”

2) And here from “In Defence Marxism”

Venezuela: Auto workers organize to discuss “Plan Venezuela Movil” and the new Labour Law 
 On Saturday, June 21, Alan Woods was invited to attend a meeting of workers in the auto sector. He addressed the meeting of more than 600 autoworkers from all over Venezuela, in Barcelona, Anzoategui ….  comrade Alan Woods was invited to attend a meeting of workers in the auto sector. More than 600 workers from the assembly plants from all over Venezuela were present, with delegations from Mitsubishi, Macusa and Vivex in Anzoategui; Toyota in Cumaná, Sucre state; Ford and Chrysler in Valencia, Carabobo, and representatives of other unions, including those of food monopoly Polar in Anzoategui …  There were two main reasons for this national assembly, on the one hand to report to the workers on the progress of the “rectification, revision and new thrust” of the “Plan Venezuela Movil”; and on the other hand to discuss a campaign demanding the blocking of the reform of the current labour law, so that a new law can be discussed democratically by the rank and file workers … “Plan Venezuela Movil” was an initiative of the government to give companies tax breaks in order to produce low cost cars for the workers and the people. At the same time, through quotas, there was an attempt to restrict imports of cars and parts from other countries, so that more jobs would be created in Venezuela. One of the reasons for this meeting was to condemn the car companies that have flouted the plan. Out of 400,000 vehicles sold in Venezuela last year, only 10% were made in the country, while the rest were imported.

Whose side are we on?

Just ran across this “analysis” piece from MSNBC:  Obama takes swift stand on Honduras: Response to coup aimed at dispelling memories of regional interventions

So long as the response is “swift”  its okay that its incoherent.

The article follows the headline and states that Obama was “swift” and “clear”" in condemnation of the “coup” in Honduras – while at the same time declaring that the U.S. will not impose itself upon the region.  Huh?  Truly, it’s all about words with these people: declare it swiftly and clearly, then hide above it all for the sake of “non-interventionism.”

Bloody hell: which is it?  We’re either for Ahmadinejad or against him; we’re either for Zelaya, or we’re against him. Instead, we’re with Ahmadinejad and we’re with the Iranian people, but not so much as to be not with Ahmadinejad, only not entirely so as not to be with the Iranian people.  As for Zelaya, we’re for him but not for doing anything about it.

With both Iran and Honduras, we’re supposedly “for” democracy (but not going to do anything about it). But we are against a disorderly public protests, while at the same time against fascist stamping them out. And now we’re swiftly and clearly against a “military coup” whose purpose was to uphold democracy. 

No it’s not confusing at all; our president’s policies are.