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My work has appeared in a number of major publications either as writer, photographer, or source. I enjoy talking about all things automotive. Recent Posts
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CarSpace Hudson's BlogAll around the car world there are stories and these are just a few of them. A new blog is posted every Monday. Sometimes more often. Jun 4, 2009 - Bankruptcies and Government LoansWe all know that the automotive industry is in trouble. Bankruptcies at GM and Chrysler were the expected outcome. These two companies used the “excuse” of economic upheaval to radically reorganize themselves in ways that labor unions, stockholders, and franchise laws wouldn’t allow otherwise. But their current problems are not wholly the fault of the UAW or the dealers. There’s plenty of blame for the Big3 themeselves. GM (and Chrysler and Ford) have not helped themselves by concentrating on trucks. It has been very short-sighted to focus up to 60% of their product mix on trucks when the marketplace is only, at best, 50% trucks. And when fuel prices spike (which we all expected at some point), trucks are the first segments to be hit. Sure, the other manufacturers have been hurt but the Big3, and their concentration on the US market, has hurt them more than others. GM and Chrysler are not in the same place that Chrysler was in 1979. When Chrysler asked for loan guarantees thirty years ago, they had radical new products ready to hit the market. Chrysler’s newest products, the Dodge Omni and Plymouth Horizon, had already set the groundwork for the K-Cars which would, in turn, lead to replacing all of Chrysler’s antiquated products…it was a seismic shift at the time. GM (and definitely Chrysler) don’t have that product ready to rock the industry. The K-Car in 1980 was revolutionary…a $6,000 6-passenger car that got 25 mpg city. Today, GM has some very good products. Vehicles like the Chevrolet Malibu and Cadillac CTS are very competitive, but they aren’t class-leading. It’s not that GM can’t build class-leading products; it’s just that they have the whole market to cover with “good” products while other companies can concentrate on one segment. It’s a very competitive marketplace with very strong competitors. GM is spread very thin. Having good gas mileage or winning an award or two does not mean the vehicle is “class leading.” While there is absolutely a need in the marketplace for vehicles like the Silverado, recent economic shifts have proven that you can’t rely on sales of full-sized trucks to carry the rest of the company. Manufacturers need to be ready with cars when more than half of the marketplace buys cars and yet more than half of the sales from GM (and Ford and Chrysler) come from trucks. It’s a global marketplace and no company is rooted in any one country. GM, like Toyota and Honda, harnesses their global reach to design and build their vehicles as best as it can. Whether it’s Australians working on the Zeta platform (for the Chevrolet Camaro and Pontiac G8) or Germans working on the Epsilon platform (for the Chevrolet Malibu, Saturn Aura, Pontiac G6) or Koreans working on the Theta platform (for the Saturn Vue and the new Chevrolet Equinox), the money and technology flows around the world. But now GM is selling divisions and brands and reducing it’s ability to compete globally, which had been a key strength of General Motors. If GM were to close its doors (which I can’t see happening), the supplier base would be hurt. But most of GM’s suppliers have spread their eggs across many baskets, including many of the transplants. It would take some time, but the suppliers would shift their focus from GM to one or more of the transplants (and/or remaining Big3). And the production volume lost if GM were to disappear would eventually be made up by other companies. Production volume would remain in the US as it is more economical to build many vehicles in North America than to import them. Suppliers would grow to support this change in the industry. Auto workers would remain, supplier workers would remain…possibly at lower volumes but still making the same number of vehicles and the industry would continue. The transplant companies are not so dumb that they don’t realize a vibrant US economy is necessary for the sales of their products. Whether or not the car companies are physically based in the US, the American economy will survive and grow and thrive. And when it comes to the US market, the Big3 have put themselves in a bad position. While the reliability and durability of Big3 cars is on-par with the top brands from other countries, perceived quality and dynamic thinking is not quite there. Why did Toyota and Honda have to come out with hybrids nearly a decade before any of the Big3? Why aren’t there any diesel cars from the Big3? GM was ahead of the curve with the EV1…so where has that technology led? GM was toying with fuel cell and steam(!) powered vehicles in the 1960s and rotary and Sterling engines in the 1970s…what have they done lately? The US can and does compete on a manufacturing level…or else Toyota and Honda and Nissan and Mercedes-Benz and BMW and the rest wouldn’t be making vehicles on US soil. Why do US manufacturers need to put $3,500 of incentives on every car and truck for every $2,000 that the other brands use to sell their products? Why are 5-year old GM products worth a fraction of the competitive models from Honda and Toyota? GM touts the strength of its Chevrolet Malibu, but why does the Camry (as well as the Accord and Altima) outsell the Malibu with fewer dealers and a higher price tag? Loaning money to failing companies without a concrete turnaround plan was a losing proposition and bankruptcy was the only possible outcome. Without filing for bankruptcy, GM had the impossible task of turning itself around. With a bankruptcy filing, they have the nearly impossible task of convincing the buying public to make a long-term investment, with the purchase of a vehicle, in a company that just walked away from many of its American creditors…including contracts with American workers. History has shown that businesses do not learn much from the past experiences of their industry, so little can be expected from GM and Chrysler following this recent set of events. Loaning money to these companies should be treated as if a parent were loaning money to their child: it’s as good as gone. Even with large holdings in GM and Chrysler, getting any return on the government’s investment is a long shot. With some luck, the American workers will take this opportunity to find more stable employment in preparation for the next market shake up.
Feb 25, 2008 - The Shaky World of Automotive InvestingUntil around 1950, there was a Wild West-like attitude in the American automotive industry. It was a frontier to be conquered. Throughout automotive history, there have been something like 5,000 individual makers of cars and trucks in the world with about 3,500 of them being situated in the United States. Companies like General Motors, Ford, and Chrysler have survived, in one form or another, for over a century. General Motors turns 100 this year but its oldest parts (Cadillac, Buick, and the late Oldsmobile) are well over the century mark. Ford was founded in 1903. And while Chrysler was created in 1924 from the remains of Maxwell, parts of the company can be traced back to Rambler which dates back to 1903 as an automobile manufacturer. There are a few minor vehicle manufacturers in the US. The most prominent of them is Panoz which is slowly approaching its 20th anniversary. Outside of these tiny footnotes, there hasn't been a major successful American manufacturer founded since World War II. And even new import brands on US soil have been a rare find in the past 30 years. Rare successes like Hyundai and Kia are at odds with struggling Mitsubishi and soon-to-be-gone Isuzu. So you might have to forgive my apprehension everytime someone announces a new venture. When Bob Lutz announced the revival of Cunningham about eight years ago, I was excited. This was the first time in half a century that a new manufacturer would be coming to the US where I trusted the founder. Bob Lutz is the consumate car guy with REAL automotive experience working with the likes of BMW, General Motors, and Chrysler. Lutz even had novel, and as I saw it workable, approaches to manufacturing (which he laid out in two issues of Automotive Industries). But when Lutz was hired by General Motors, it was obvious that all bets on the Cunningham were off. So if Lutz prefered to take the corporate route instead of laying the foundation for real history, I knew new car production was truly a tough nut to crack. When people with questionable backgrounds talk about their automotive ventures, I automatically write them off in my head. People like Malcolm Bricklin, Gerald Weigert, and many others show great enthusiasm, some even know aspects of the automotive business, but most of them are just in business to make a quick buck. So ventures trying to tap the Chinese automakers for the next big thing find their way to my "skeptical" list. I understand that these people are trying to do what the Germans did in the late 1940s, the Japanese did in the 1960s, and the Koreans in the 1980s...catch the next big wave at its beginning. People like Max Hoffman and Kjell Qvale did just that, but the market was vastly different than it is today. The members of my list have included many different types of ventures. Importers of the ARO from Romania, the Proton from Malaysia, the TVR from the UK, the Citroen from France, the Alfa Romeo from Italy, and the Chery from China, among many others, have all announced their intentions in the past 20 years. Many times, these announcements have been followed by many different setbacks, some even could be just called frauds or scams. So it was of no surprise that Automotive News revealed that the head of one of these latest ventures was hiding a shady past. CHAMCO is a New Jersey-based importer who has announced that they plan on selling Chinese trucks in the next few years. The head spokesperson for CHAMCO has stated that he's simply a consultant for the company, but it seems that his wife is actually the chief stockholder of the company. And his past, according to the newspaper, shows that "he did time for fraud" in an earlier trucking venture that he controlled. I'm a huge car fan. I would love to see new and exciting choices in cars and trucks in the US. But each time a Build-To-Order or CHAMCO or ARO America is announced, I need to take a step back and see what's actually going on. The odds of any of these ventures getting off the ground, let alone becoming successful, are becoming smaller an
Jan 7, 2008 - CAFE and Your Car ChoiceIn a previous life, people relied on me to keep them abreast of the goings-on in the automotive world. My current life makes knowing the restoration market a little more important than the global production of cars and trucks, but that doesn't mean I've stopped paying attention. All the buzz in the American automotive industry today, aside from "when is the market coming back," is about CAFE. CAFE stands for Corporate Average Fuel Economy. It's the basis for improving the fuel economy of vehicles sold in the US and has been for well over 30 years. The fuel economy of each manufacturers fleet of vehicles sold in the United States is averaged together, weighted by the number of vehicles sold, to generate a CAFE number. Currently, up to three CAFE numbers are generated per manufacturer: domestic car, imported car, and light-truck. The idea is that each manufacturer would be required to sell more fuel efficient vehicles to keep their CAFE number above a set level or else face a stiff penalty. The CAFE levels peaked in the late 1980s and early 1990s with the car number set at 27.5 and the light-truck number set around 23.5. (Please understand that the CAFE number is not the number, city or highway, found on the EPA sticker on every new car. Rather it's the "combined" number formulated way back when before the gas mileage rating system was revised...twice.) In reality, CAFE has done very little to help improve the economy of the American fleet. Since the mid 1970s, the advent of fuel injection and other technologies have made engines smaller, more powerful, and more fuel efficient so the manufacturers have been able to keep up with the rising CAFE (which was slowed because manufacturers petitioned the government in the mid-1980s). By 1990, the average fleet fuel economy in the US was TWICE what it was only 15 years earlier. But fuel prices didn't rise as expected in the 1980s and early 1990s. Demand for larger, more fuel hungry vehicles rose but since CAFE didn't allow for the supply of large cars to meet the demand, manufacturers turned to trucks. And the SUV market bloomed! From just a couple hundred thousand vehicles in the early 1980s, the SUV market in the US peaked at about 2 million vehicles a year in the early part of this decade. Car production made up less than half of all vehicles built in North America just a few years ago, mostly due to CAFE regulations. Another "benefit" of CAFE was to be the added domestic production of small cars. General Motors tied up with Toyota to produce some small models in California. But Ford, on the other hand, moved production of the large Ford Crown Victoria and Mercury Grand Marquis to Canada (later NAFTA would make Canadian vehicles "domestic" in CAFE formulas). The whole concept was to get more fuel efficient vehicles on American roads. Bob Lutz, former Vice Chairman of Chrysler and current Vice Chairman of GM (and a real "car guy"), described CAFE as being akin to getting everyone to lose weight by requiring clothing manufacturers to produce smaller clothes. And now CAFE is potentially on the rise again. How will vehicles change with the rise of CAFE from 27.5 to 35? How will truck sales change with an increase there? Whatever will capitalistic Americans do without gas guzzlers? We'll be just fine. Cars today are much smaller on the outside than they were before CAFE, but have much the same interior space. Cars today have more power, far better fuel economy, are much more reliable and dependable, pollute far less and are safer. All of this, and cars are just as affordable as ever. I expect the same in the next 15 years. And I don't expect gasoline to fall from its perch as the number one fuel for personal transportation. I, personally, am looking for a commuter car that doesn't tie me to oil companies. When oil companies get government assistance and generate record profits, I can't imagine why gas prices jump every few days. Are they at risk of losing money because a barrel of oil went up a few cents? Why should I continue to fuel (pun intended) their record profits? And why should ANYONE worry about CAFE do any harm to the car as we know it? The first 30 years of CAFE didn't hurt the car...or the oil companies. I'll keep my gas-consuming cars for fun, but I'm in the market for a good, used Standard-Vanguard Citicar electric for my daily commute. If you've got one sitting around, I'd sure like to talk to you, but it seems like many people have the same idea as me. Have you seen the price of a Citicar on eBay? As Economics professors taught me....supply and demand!
Dec 3, 2007 - My First LoveAs I write that title, my thoughts go back to the Diana Ross/Lionel Richie classic "Endless Love." And that connects well with the idea of the first car I ever fell in love with. I must have been about 14 or 15. My father and I would drive up to Altoona on Saturday mornings to play raquetball. On old Route 220, before the bypass was built, we would pass this old gas station. While the gas pumps no longer worked, there were cars parked out front for sale. It wasn't like a used car lot you typically find today where a number of late model cars and trucks are lined up detailed to the hilt. These cars were definitely "fixer uppers" of many vintages. But one particular car caught my eye. It was a 1961 Imperial. The faded red paint on this huge four-door sedan only made me want it more. And the condition of the paint made the stainless steel inserts on the roof shine even brighter. Next to the tire bulge on the trunk was a rust spot about the size of a quarter, but other than that, the car was clean on the outside. It was in very good shape for its age. On the inside, the entire interior needed put back together. While all of the parts seemed to be there, many of the interior panels were detatched from the doors. I wanted this car! Since I was only a teenager and not of driving age, I had virtually no money. I asked my father to check into the price of this car, but it really didn't matter. The $1,600 price tag was way outside of my reach. And even if I could scrape together that kind of dough, where would I get the money to fill it with gas so that I could pilot this land yacht around? This beast, and I say that with love and affection toward it, just had a wonderful stance and look. Long and wide, the car carried Chrysler's "forward look" into its waning years. For those who don't know this wonderfully ostentatious car, let me describe it. Four free-standing headlights flank a chrome grille that measures almost as far across as many current subcompact cars. Above the grille, the bodywork flares out over the headlights creating a winglike look. The smooth hood sweeps back meeting the vast windshield and large greenhouse. Just above the door openings and creating an aircraft-style look to the doors, strips of stainless steel wrap over the roof just a few inches but enough for that distinctive look that only the Imperial had. Two huge doors with flush mounted handles stretch across an enourmous 129-inch long wheelbase. The bodywork swings up into the tailfins starting with the trailing edge of the rear doors. Mounted just below the peak of these fins are gunsight taillights. Lying on the long sloping trunklid is the outline of a sparetire; less imposing than the typical continental kit sparetire, but just as distinctive looking. Under the hood was a big engine. All 413 cubic inches of Mopar "Wedge" V8 power. And that 3-speed automatic Torque Flite transmission with its unique push-button controls. Seated and ready to drive, you notice how the steering wheel isn't round but almost rectuangular with rounded corners. The opening in the top spreads wide enough to see the wide instrument panel. Pods on either side of the instruement cluster hold buttons controlling the transmission (left) and ventilation system (right). Power operated everything restates this level of 1960s luxury. When you're young and naiive, you fall in love with such things. This beast was lovely to my teenage eyes and, oddly enough, remains beautiful in my adult eyes. Perhaps its the same feeling that is connected to the first person you kiss or your hometown or any of those other early experiences. Your first is always your best and seems to get better as the distance increases. I wish my father had fronted that money for me way back when. I'm kinda glad he didn't, though. I'm sure the memory I have now of that car is far better than the memory of actual ownership would have been. All these years later, I can still see that red Imperial sitting by the roadside. Ah....the memories of my first love.
Aug 6, 2007 - Should They Stay or Should They Go?On one automotive forum that I frequent, there is a discussion of which car brands should be the next to leave the US market. Poster after poster lists their choices and the reasons why they believe each should no longer sell their wares in the US. Most of the opinions are based on biases formed from personal experiences with these brands…some of which are quite out-dated. But it’s an interesting discussion. My opinion, as a car fanatic, is that more is better than less. I’m an American and proud of it. I wish American manufacturers were not losing market share to the imports, but it’s not, in my opinion, completely undeserved. But I would not want any brands to go away to simply save a domestic brand name (domestic jobs, however, are another topic for another time). With the Chinese brands knocking at the door, this discussion takes on added fervor. Many of the people involved in this discussion believe that the Chinese are the next wave of automotive competition to beat up the American companies, and I have to agree. Where the Japanese were laughed at just 40 years ago, today they’re among the most admired automotive manufacturers in the world. The Korean brands were in the same boat just 25 years ago and today Hyundai and Kia are respectable names in many parts of the world. Along with a few Indian companies, Chinese companies are looking to the US for market expansion. Many people have heard of Chery since they have been in the news for the past few years while they prepare to enter the US market. Today, Chrysler is working with Chery to produce an entry-level Dodge product for the US market. And Chery will take what they learn from Chrysler to become a global brand on their own. There’s also Nanjing and Shanghai and Great Wall and Geely and a dozen others that are looking across the Pacific. Nanjing owns the MG brand and will, most likely, use that name in its global expansion. Shanghai has been working with Volkswagen and General Motors for a number of years to increase their hold on the Chinese market, but exports aren’t too far away especially since they bought out the Rover side of the former MG Rover company, but need to establish their own brand name (they’re currently using Roewe, almost pronounced “wrong way”) since the Rover name did not come with the package. Great Wall has light trucks and Geely has economy cars and both have eyes on the US market. Brilliance and Wuling and Landwind could be in the next wave as well. But, from what I’ve seen, none of these companies are ready for the US market quite yet. The Japanese entered the US market with cars too small for American tastes but quickly tailored their products with US buyers in mind…and raised their quality to class-leading levels. The Koreans learned from the mistakes made by the Japanese and brought true entry-level product to the US. Although they made their own mistakes along the way, they were competitive players in just over 25 years from producing their first car (the Japanese took about 40 years. The Chinese seem like they’re on the 20 year plan, which would bring them to a competitive nature in just a few more years. Once in a while, one of my cars impresses someone. It doesn’t happen very often, but it’s a nice feeling that someone likes your choice of car. The only person who really matters about my choice of car is me. And that’s how it should be with everyone’s choice. The fact that I don’t care for a single guy buying a Ford SuperDuty just to commute to his office doesn’t matter as long as the owner of that big pickup likes his choice. This laissez faire attitude should extend to brand names as well. If Isuzu finds enough buyers for their products, more power to them…it’s a capitalist marketplace. Not too many would be sad to see Isuzu (or Mitsubishi or Suzuki or Buick or Mercury or…) go, but the reduction in choice would be a sad thing. So here’s hoping that we see a return of Alfa Romeo (discussed for a year or two from now), Citroen and Peugeot (oft-rumored), Fiat, and MG. Perhaps then the Americans can bring back Duesenberg and Packard and Stutz and AMC and Edsel and… Okay, maybe I've gone a bit too far.
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