Monday, March 29, 2010

The Earth Moves A Little

Over the past weekend Ford and Geely inked the deal that would transfer ownership of the last brand of Ford's famed PAG (Premier Automotive Group) to a new owner. Having divested itself of Jaguar, Land Rover, Aston-Martin, Ford can now complete Alan Mullaly's vision of returning to the company's core brands. A wise move? I have some concerns.

Volvo was indeed a brand in need of some new direction and products. Volvo's were in the past "safe" cars. But all cars now are "safe" cars, so that niche has been eliminated. Volvo, in my opinion, could have been transformed into a very staunch environmental brand with hybrid technologies, efficient manufacturing and products with high recycling content. It would have been a good fit with their traditional customer base and a unique product in the Ford lineup.

The Chinese are coming. They will be here. Not personally, but they will be sending their cars over here. We have all their other products, but why have they not been sending the cars over. Well two reasons. I suspect the first is the patent infringements in their existing products, and second safety.

I've said it before and it's well known that China does not respect intellectual property rights. As soon as they lay one foot on the shore here with a US operation, it's going to be a field day in the courts. Next though, we are different consumer then we were forty years ago. We like seeing our vehicles hitting fixed objects on commercials to see how well they hold up in a crash. Europeans like to watch the same thing too. So far, Chinese cars don't hold up at all during a crash. Search on YouTube for a video of the Brilliance during European crash testing. The European distributor of the Brilliance has folded up shop. They are not quite ready for prime time.

That is about to change. With the acquisition of Volvo, Geely has the missing link to one of the pieces of the puzzle. They also have a foot in the door to solving the second one too. Clearly Volvo will be looking at their current product line up and finding engineering solutions to bring their product line up to current safety standards. Volvo has an highly competent engineering department that will be leveraged to make their vehicles safe to export to other countries. Geely has also licensed Ford technologies as well, therefore some of the pieces they need to build their vehicles will no longer violate intellectual property laws.

Has Ford lowered the drawbridge to let the Chinese enter our kingdom? Most likely yes. But as Toyota has found out recently, this kingdom can be a not so friendly place.

Tuesday, December 01, 2009

Year Three

And so begins year three of my life here in Austin.

I know it's been a LONG time since I've updated here, but blame Facebook, not me.

Trees sure do grow. When I started this blog the trees barely covered the left side of my home, but now thanks to tree spikes, there is not much to see from the left side. So, I threw in a picture of the right side this time. It's satisfying to watch the trees grow and mark the passage of time.

I'm very happy to be here in Austin. A beautiful home, two very silly dogs and wonderful friends make this a place to settle down for the long haul.

I may not post much these days, but you at least know to check back in twelve months.

Saturday, July 25, 2009

No Id

I've been quiet the past week regarding the events in Cambridge, the President probably should have taken my lead. He learned a valuable lesson about "two sides to every story", and I'm a bit surprised he has not learned this a while ago.

When I moved to Texas in December 2006 the Travis County Sheriff paid me a visit one afternoon. It happened to the day I surrendered my California driver's license to Texas so they could issue me one from this state. I had a slip of paper but nothing with my picture on it. Contents from the prior owner of my home had been dumped in a field and the Sheriff and the landowner showed up at my home to find the prior owner. There was a pending charge for illegal dumping.

I was in the garage and we met in the driveway. I had no ID on me at all. A nice wallet full of credit cards but little else to say who I was. No, I was not the person they were looking for but I had to prove it, standing in the driveway of the person who's last known address was now mine.

Needless to say I was a bit freaked out. But no I did not yell and scream, cause a fuss, stomp my feet, etc. I was not indignant. I explained that this was my home now and asked for a moment to go to my office to pick up the closing papers. The officer agreed and I went back into my house. Down I came with the closing papers to show the house recently changed hands and I provided him with the prior owner's new address.

It was over. Just as I was taught it would be. My parents were very clear growing up that when a law enforcement officer stops you, be polite and courteous. Here I was having to prove who I was and I followed that protocol. And it all worked out as I expected it would.

If someone saw me breaking into my own home and the police were called, I don't think I'd be surprised. I would expect they would ask for my ID as some evidence I did actually live there. Law Enforcement is not fun when you're doing 70 mph in a 55 mph zone. However when your car is stolen, who do you call?

If you're asked for ID, don't freak out. It happened to me, it can happen to you.

Thursday, June 04, 2009

Not A Bad Ride

The Mazda is finally in the process of being repaired from the hail storm last March. On Monday I was tossed to keys to a 2009 Nissan Alitma 2.5S. It's a fairly basic four-cylinder model Altima, cloth interior, but all the power options. The transmission is a six-speed automatic with a manual mode. This is my first ride in this generation of Altima and I was pretty impressed.

Push button start is the latest gee-wiz feature on cars these days and it's standard on Altima. When the remote is in the car, you put your foot on the brake and press the start button and the car comes to life. It doesn't take long to get used to, but there was one time I left the engine on when I exited the car. There's a gentile chime from the exterior of the car that reminds you what you've done. You can leave the car with the remote and it will stay running.

Coming from my Mazda6 with the six-cylinder engine I was surprised when I caught myself hitting the gas and not missing the extra horsepower. The Altima held it's own in suburban traffic. I'm not a hypermiler but it was fun to shift up to sixth gear as soon as possible for the best gas mileage. Below the speedometer there is a gauge that can tell you how you are doing. It's a fun bar graph to watch as it fill up the better gas mileage you're getting at the moment.

The mid-size, four-door sedan market is pretty crowded. The Altima remains competitively priced with the standard players. Reliability is not as high as offerings from Toyota, Ford and Honda, but you won't see yourself coming and going as much in the Altima as you would the others.

Push button start and not accidentally getting into someone else's car in the parking lot are not bad virtues.

Tuesday, June 02, 2009

I Am Debbie Downer

Sigh, why the long face. GM went into bankruptcy and could not have asked for a better news day then when an Air France jet disappears in the Atlantic. It was a media miracle for GM, the stuff their PR team dreamed about. A headliner that trumpted GM's bankruptcy story. Obama had a press conference at noon on Monday to put a positive face on the whole thing. Gee, bankruptcy is not that bad after all. We should all do it.

There are a few things that will not work and I want to point them out well ahead of time. I like to take credit. GMC Truck needs to go along with Pontiac, Saturn, Saab and Hummer. Buick has value but needs to be folded with Chevrolet dealers. Buick only has three vehicles in their lineup. Unfortunately GM decided to merge the distribution channel of Buick, GMC and Pontiac years ago to consolidate roof tops. They did not plan on going under then. Chevy/Buick dual stores make since. Their price points do not collide on product. Cadillac will go it alone, but it's going to be tough. Those dealers barely sell more then Lincoln which is dueled with Mercury.

Buick/GMC is targeting an upscale customer. GMC trucks command a price premium, but they are the same vehicle as a Chevrolet. GMC has offered the upscale Denali series on it's truck and Chevrolet does not. But Cadillac sells upscale trucks in the GM stable. Give it up GM, it's time to put the kiss of death on GMC too. Best to do this now then go through another reorganization to kill off a division. By then no one will have any confidence in your company. Now is your chance. You can always sell upscale Chevy trucks, Ford does that with the King Ranch series. And they did not need a separate brand to do so. The day of the uber-luxury SUV/truck is limited with new CAFE regulations.

I warn you about the government taking over your new car warranty. Yes the government has pledged to back it. But warranty items can be gray. Concessions are made to please the customer, something the government is not likely to do. The government does not want your future car business.

It was kinda silly this week that when Ford announced it was upping production 10%, it had to apologize for doing so. The press asked if they were being opportunistic in the wake of the GM/Chrysler bankruptcy filings. Well hell yes they are taking advantage of the situation. They are not getting bailed out by the government and they need to make that up. In our new wave of socialism, we have forgotten this is still a free-market economy. You gain your market share where and when you can. We need to be empathic to distressed industries and companies, but this is not a first grade soccer game where everyone gets a trophy.

A Chinese firm bought Hummer today. They will close the deal in the fourth quarter of this year. The Chinese are coming and they are brutal competitors. We owe them so much money we cannot shut out their product policy wise. We can only not buy it. I'd like to think we have a social conscience in this country but then again we can't stay out of Walmart to save our lives. We ignore the safety issues with Chinese made products, but will we continue that thought process with our cars?

On the bright side, Lincoln sales are up 2% over May of last year. You say Huh? It's the return of the Lincoln Town Car to the line up. Town Car rules!

I'm happy again.

Sunday, May 31, 2009

Change Is A Constant

Last Friday at 4:30 pm,cst. I sat in front of my computer and I felt very sad. Change is a constant I keep telling myself, but as someone who likes traditional things, this event was a bit hard to swallow. May 29th was the last full trading day for General Motors stock. It had fallen to $.75 a share, with a market value of $500 million dollars. Clearly, there was no more General Motors as we know it.

There will be books, documentaries, columns, etc.. for months and years to come about what caused this once barometer of our economy to collapse. It all comes down to management, but what decisions will be a lightning rod for critics is well beyond me. When Alan Mullaly took over the helm at Ford, he told senior management the company had been having a going out of business sale for the last 30 years. Apparently no one told GM that in time.

Rick Wagoner did not bring down General Motors, but he did not do much to save it. GM's terminal illness was too many brands and in China copied GM American's broken model. In China you can buy a Buick, Chevrolet, Vauxhall, Opel, Cadillac and Daihatsu and they are all made by GM. In contrast Toyota will let the Chinese buy a Lexus or a Toyota. Sound familiar?

Will GM be successful post bankruptcy? Any one's guess, but I have my doubts. First, management is not being replaced and that is unusual. In bankruptcy, the first thing to go is present upper management, the people who put you there. Second, the government will be the primary owner of the company. Historically we have not done this in the United States, but Britain tried this back in the 1970's with the disaster that was called British Leyland. They no longer make cars and Britain no longer has any domestically owned manufacturers. We consolidated the railroad under a government organization called Amtrak, and we still are subsidizing that decision.

There are those who are cheering the downfall of GM. And I can't blame them. Former customers who bought poorly designed vehicles and paid for repairs that they should never have had to. GM knew they would still sell cars, so why make customers happy. Despite the enormous engineering talent at GM, they have some legendary engineering failures on their hands. You knew the Pontiac Aztek was a looser when you looked at in the showroom. When your transmission went out or your diesel engine blew up after a few years that was a complete surprise.

Should you buy a GM product? I keep getting that question. In comparison to Chrysler, GM builds a better quality product. So the repair issue is less of a consideration. But since Chrysler went into bankruptcy, their products have been harder to finance as compared to Toyota, Ford, etc.. Several large lenders are now requiring larger down payments and higher interest rates. If you are a cash buyer or can secure good financing, you may be able to get a great deal if you have your heart set on a new vehicle.

But this is America. We live on a free market system. GM went into bankruptcy for a reason. Whey would you buy a product from a company that was so poorly managed? What cost cutting did they do the the product over the last year to save money? There are SO many vehicle options out there, why would you buy from a company that went bankrupt and possibly will not be there in the long term? What overwhelmingly compelling reason do you have to buy a GM product?

If you have to buy an American branded product, Ford makes a wonderful line of vehicles with the highest quality ranking for an American name plate. Some are higher then the imports. Ford outranks Nissan in quality as a company, but you don't hear that much. So go buy a Ford if you need a American branded product.

I do predict we will be without Buick (domestically) and GMC Truck eventually. Ford will outsell GM in 2009 and possibly 2010. If GM does fail in the next few year or so, it will be a HUGE black eye on the Obama administration and damage his presidency. You need revenue to exit bankruptcy, and if consumers shun GM products liquidation will be the next step as the revenue dries up.

You may gamble on a GM product if you like. President Obama has gambled on the entire company. Let's hope we're all winners.

Wednesday, May 06, 2009

Don't Buy It

Failed clock spring from my Grand Cherokee

They say the Irish never forget.

Well it's true. But then there are times I don't need to be reminded of what's left a bad taste in my mouth. It comes back at me screaming. Case-in-point, recent Chrysler products. Regular readers may remember the Grand Cherokee that I sold off last year. I was annoyed with the electrical problems that came from parts that should have NEVER failed on the car.

I won't bother to explain what the clock spring is on a steering column. Unless you own a Chrysler product, you won't need to know what it does. Well mine failed on the Grand Cherokee I owned and I replaced it. Not a fun job but not a hard one. The toughest part of the job is that it should never have needed to be done in the first place. I had hoped that Chrysler learned it's lesson with the part, but sure enough they did not. Automobile Magazine just wrapped up it's long-term test of the 2008 Chrysler Town and Country. At 31,691 miles the clock spring failed. There were a total of four warranty claims for their vehicle in 32,880 miles.

Today Chrysler announced incentives up to $6000.00 so consumers would purchase one of their vehicles during their bankruptcy reorganization. Rightfully consumers are shunning the brand and were doing so over the past several years. Consumer Reports consistently ranks them at the bottom for quality. I do not recommend a single product they produce to anyone and steer buyers to other vehicles that may suit their needs while providing a better product.

Yes I'm taking responsibility for assisting Chrysler into bankruptcy. Somehow they missed the quality bandwagon that everyone has been on for years. They make domestic cars look horrible with their underdeveloped products that are built with lower quality parts.

My beef with all of this is the bailouts that they will never be paid back. Everyone knows the merger/purchase with Fiat is going to be a disaster. The merger of Chrysler and Fiat will be truly a merger of equals as they are both known for abysmal quality vehicles. Chrysler will limp around for a while, it's dealer network (what's left) will be used to sell Fiats until the Italian's retreat again as they did in 1984.

If you're a fan of scratching your head wondering how/why that part of your car managed to fail, head to your Chrysler dealer for a great deal. There's no mystery why their product is so cheap.