Pelosi, Hoyer, LaHood Beclown North American Auto Show (Updated)
I spoke with Rep. Gary Peters, whose district is in Oakland County, just outside of Detroit. I questioned the value to taxpayers of spending so much money bringing Speaker Pelosi and Peters’ other colleagues in for what amounted to a dog-and-pony show.
Peters agreed that one of the problems that people in Michigan and the auto industry faced was that his colleagues were “completely clueless” about the auto industry, and he hoped that the trip might educate them. How broad an education you can get on such a brief trip is open to question, but the fact that many of his colleagues in Congress and in the Obama administration are clueless was plain to see from the LaHood and congressional press conferences.
LaHood told the assembled automotive journalists about the bright future the domestic automakers face now that they’ve been assisted by the Obama administration. Nobody disputes that GM and Chrysler would most likely not have any future at all without the bailout. The transportation secretary based his remarks, he said, on a visit he made to Detroit last fall when he spent “half a day” at each of the domestic automakers’ headquarters. The “half a day” remark brought smiles to many in the room who have spent years following the auto industry. The smiles broadened when he referred to “new products” from Chrysler. Even people outside the auto industry know that Chrysler’s quiver is empty.
That was just too much for one reporter, who challenged the cabinet member:
In your opening remarks you mentioned new products by Chrysler, could you expand upon that?
LaHood’s first instinct was to punt, but instead he reversed course and doubled down. Punting would have been the wiser choice.
Well, you know what? I’ll let Chrysler do that and I think as you all get around this massive showroom you’ll see what I mean, but they’re on the cutting edge of developing the kind of products that I think people in this country and also in other countries are really gonna feel very favorable towards.
Walk around Chrysler’s display on the show floor upstairs in Cobo Hall, and you will see exactly zero new products.
There was a Lancia rebadged as a Chrysler concept (dubbed “Guido” by the auto blogosphere), and a couple of cute little Fiat 500s to show that Chrysler was now under Fiat’s wing, but nothing at the Chrysler stand could be described as “new.” Chrysler did display a number of new trim and feature packages on its now aging stable of cars.
Maybe the die-cut decals are what LaHood meant by “cutting edge.”
During the “merger of equals,” Daimler hollowed out Chrysler and then sold out to Cerberus, which invested almost nothing in new product development. With the compact Caliber, midsize Sebring, and midsize Avenger generally considered worst-in-class, Chrysler has nothing in the pipeline to compete in those vital market segments. Everyone knows that — except the U.S. secretary of transportation.
LaHood continued:
Chrysler particularly, the kind of designs that they’re doing, the kind of innovative approaches that they’re taking is gonna really put them in the marketplace like they’ve never been before … as innovative, creative as I’ve ever seen in the industry.
True, Fiat is bringing in new blood and new designs, but nothing LaHood would have seen while breezing through Auburn Hills last October is going to make a difference to consumers or to Chrysler’s bottom line any time soon. It takes a minimum of two years to design and build a completely new car, and that’s after some time has already been taken to design, evaluate, and approve concepts.
In his remarks, Secretary LaHood referred to “the kind of green car that Americans are looking for.” Speaker Pelosi and Majority Leader Hoyer also stressed how government financial aid is helping the domestic automakers move to hybrids and electric vehicles, vehicles Pelosi and Hoyer claimed that consumers want.
The problem is that while hybrid sales in the U.S. indeed went up in 2009 as the overall market was flat or declining, they still represent less than 3% of light vehicles leased and sold in the U.S. Between LaHood’s praise for Chryslers “new” products and Pelosi’s fantasy that 3% of the market represents what consumers want, it appears that the people running our government know nothing about a major industry that employs, ultimately, one in twelve Americans.
Either that, or they are incredibly cynical and will say whatever they think they can get away with.
Americans may be looking for green cars, but they may not want to pay a premium. Hybrids and EVs are not cheap and will not repay their price premium at current gasoline prices. The politicians may say that consumers want green cars, but they know that without substantial government subsidies, the new technologies are too expensive for immediate mass acceptance. When Chevy’s extended range EV car, the Volt, goes on sale, it will carry a $7,000 federal tax credit. Just before Speaker Pelosi’s press conference, Billy Ford announced that Ford would be investing $450 million to assemble lithium-ion battery packs, a gas-electric hybrid vehicle, and a plug-in hybrid vehicle in Michigan. With $188 million of that coming from tax credits, it’s not surprising that Michigan Gov. Jennifer Granholm joined with the Ford chairman in making the announcement.
You expect to see certain things at a car show: shiny new cars, exciting concepts, and pretty models. I think we can add politicians to that list for the foreseeable future.
If there remains any knowledgeable executives in America’s dying auto industry, I’m certain they were quite embarrassed to be sharing the stage with the certifiable idiots from congress and the Obummer administration. That said, I plan to never again purchase new vehicles from GM or Chrysler, unless the government and UAW relinquish control over those companies.
For the rest of my life, it’s Ford cars only.
The Feds and the UAW will give up control only after the life has been sucked out of GM and chrysler. They will blame management for the death.
At it’s core, the Federal State is a corporation with a monopoly that runs in the red, has idiotic management, and extracts its income by force.
It needs to go in 2010.
“as innovative, creative as I’ve ever seen in the industry”
I’ll bet this guy knows as much about the car industry as Obama knows about bowling.
Only a partisan hack would think rebranded merchandise will fool the rubes into thinking it’s “new.” Color me not surprised that LaHood is such a partisan hack…
I used to only buy Fords for years. About ten years ago I went looking for a car, the Hyundai was $3000 less and with a better warranty. Now I buy American made cars, just with a foreign sounding name plate on them.
Thank the UAW for that.
It’s all “make-believe” with thes asshat politicians. When are they going to admit they have no business in the auto business or any business.
They are clueless, empty-suits doing a very poor imitation of being knowledgable about the auto industry or any industry. CLEAN HOUSE in 2010 and 2012.
Chrysler is DEAD already, and GM is treading water with infustions of taxpayer subsidies for the United Auto Workers. there is no way GM can possibly become profitable on its own with the current structure. Bye, bye American pie!
Let’s dump these egregiously stupid politicos and get on with the business of America – Business!
Maybe companies that are too big to fail should not exist at all.
Hmm… did all these politicians drive to Detroit or take their fancy private planes?
As a person who has only owned two American cars in 60 yrs (Taurus SHO and Dodge Dakota), I guess I am not the best person to back up US cars. Nonetheless, Chrysler has had some dynamite concepts plagued by really bad execution – especially quality – who are the guys on the line who make these mistakes (although it could be shoddy fundamental engineering and design). The real tragedy is GM – it has a world class brand in Cadillac, perhaps the best sportscar (based on price/value) in the world in the Corvette and I believe the best selling pickup in the US – the Silverado. How can a corporation that actually can produce really good cars, and good cars for the value, be in this state? Although never a GM guy (or US guy for that matter) it really saddens me that all those real car guys who have and could make really good car be on the ropes because of the external factors (unions – job bank?) and now political virtual idiots wrecking something that can do a really good job building good cars.
“How broad an education you can get on such a brief trip is open to question,…”
What is there in the car game to learn if you’re from the government? You see a car company you like, you take it.
Before the $50 billion bailout GM was losing $1 billion per month.
GM was actually GMAC selling mortgages as the prime business and selling cars on the side. When Barney Frank’s mortgage scam fell in, it was all over.
That $50 billion bailout buys GM 50 months unless GM now needs seriously less to operate on per month. GM has to make $1 billion over cost in cars per month just to reach even, and that’s not making a market-pleasing profit, so it’s stock cannot rise.
GM is toast. Without systemic changes in the outlandish union pensions and wages, it simply cannot be a genuine American business. It will be more like the Post Office or any other Federal program–less and less service running deficits forever.
How many months until the Chrysler liquidation? I could see Fiat raising cash by selling off Ram, Jeep, and the minivans and euthanizing the rest of Chrysler’s worst in class models. If the markets were allowed to work, the inevitable liquidation would have occurred earlier and without taxpayer money.
Harder to see GM’s future. They have some good products and people trapped in a dysfunctional organization. Can’t see how government “help” improves things.
Apropos the drubbing that the auto execs received for flying to DC last year in private jets, it strikes me that a), Pelosi, LaHood et al very likely also flew to Detroit in private, taxpayer-funded jets; and b) their profligate spending for favored constituents has busted the US budget just as the automaker’s failure to correct course when they had the chance (many years ago). Is even the automotive press too cowed to call out this disgusting combination of hypocrisy and incompetence on the part of those doing the bailouts?
Bet you haven’t heard this one before.
Atlas Shrugged is 1200 pages long, and yet right there you see two more pages she could have put in there.
Look close, and you’re sure to see some car show credentials captioned “Twentieth Century” and “Hammond.”
I disagree regarding the future of the automakers ex-government bailout. If both GM and Chrysler had filed, they would have been able to restructure or eliminate their enormous long-term liabilities for post-retirement and health care. This is exactly what happened with United Airlines and some of the steel companies. While neither company has an exceptionally bright future, they could both survive and compete as their unit costs come into line with the Japanese. The government bailout, ironically, will prevent this from happening and only delay the reckoning.
Well done, Zero! Solid B+!
All these comments are well taken but you can see the pathetic but persistent “logic” that will allow this insanity to continue forever, i.e.
” We must become energy independent and conventional cars use too much gas/oil that we buy from dictators and the auto market won’t make enough electrical cars unless we make them do so and therefore we (the government) need to drive this industry. You know, to save the planet and for the children, and for global peace, and all that stuff.”
I’ll bet that over 50% of the people in the US would agree with that statement even though it can be shown to be wrong and dangerous. It’s going to be a tough fight but we have to get aggressively incompetent people like Pelosi out of government and make them stop trying to manage things that they don’t understand. They would do less harm if we just sent them all into the factories and let them start pulling levers and turning dials.
Let’s remember the extent of the GM bailout.
The week before GM died, its stock was trading at under $2 a share. Just three years ago it was almost $40 a share. Two decades ago it was over $55 a share, so GM had lost 95% of its value. Its market-cap that week was about $5 billion dollars. That’s what the investor community thought GM was worth. They weren’t wrong.
We the taxpayers have now ‘loaned’ GM over $65 billion dollars. For a $5 billion pre-bankrupt company.
Anyone think we’re going to see that $65 billion ever again?
What exactly did we get for that money? New vehicles? A streamlined company? A company with a future? Anyone? Bueller?
Now the pols have their hooks into GM good and hard. UAW is both labor and management. A government administration that can’t handle the basics of governance is going to run an auto company as well. Who thinks this is going to turn out well?
GM has written off multiple divisions, closed factories, stiffed bondholders, wiped out shareholders, hammered suppliers, and will in the very near future dump all its retirement costs onto the government (watch and see).
Yet Pelosi and LaHood are prattling about the auto show sounding as if they actually know something. What fools.
A solid B+ indeed.
I’ve owned three GM cars. Never again. Never again.
Rattner is among the biggest crooks on the planet. How much did that guy make in the “reorganizations” that wiped out bondholders and made current assets (that he knew he was going to be turning around) great buys for his mafia clan of venture vultures.
“During the “merger of equals,” Daimler hollowed out Chrysler and then sold out to Cerberus.” You can’t be serious Chrysler was hollow when they bought it. Chrysler’s only new idea in the last 30 years was the minivan.
As 100s of UAW autoworkers are shifted from production lines to full time work for the union and it’s political activities, does any one question how the resultant production line vacancies are being filled?
First, no white guys unless they are relatives of family members (if you know what I mean). Next, a local congressman (or her son), the former city council member related to another congressman or any other other area criminal has to have recommended the applicant. The auto industry in Detroit is now the new spoils system for local crooked politicians. Wait ’til congressional democrats start suggesting that it would be appropriate for GM and Chrysler to provide them, their senior staff and family members with demonstration vehicles!
This isn’t new?
http://jalopnik.com/5160650/2010-dodge-charger-chrysler-300c-profiled
Don’t worry … I see a BIG IPO sale coming down the road when sensible people are returned to DC.
Ray Lahood is a hood. He’s as corrupt as they come and whatever he says or does is designed to enrich himself and his family.
The man has been and still is a disgrace to honest public service.
“…it appears that the people running our government know nothing about a major industry that employs, ultimately, one in twelve Americans. Either that, or they are incredibly cynical and will say whatever they think they can get away with.”
Forget the “Either..”, I’m afraid that both are true Mr. Shreiber.
22. clazy:
This isn’t new?
http://jalopnik.com/5160650/2010-dodge-charger-chrysler-300c-profiled
That was thought to be the 2010 Chrysler 300, and the pic comes from Chrysler’s reorganization plan. The 2010 model year has come, some 2011s have already been announced and are on sale, and Chrysler hasn’t updated the 300.
It’s interesting, Mr. Schreiber, that you said that Steve Rattner works for Obama, since he left the Presidental Task Force On Automobiles back on July 13. I have no idea what he’s been doing since then, but it looks like maybe he’s working for GM. (Of course, he may still be working for Obama in a different capacity, but I can’t find any info confirming that.) If Rattner is indeed working for GM it would be just as interesting as if he was there for the Obama administration, though for different reasons. Regardless, this whole political grandstanding on the remains of the U.S. auto industry has got to stop. Only the most gullible would be taken in by it, and I don’t think the politicians’ intended messages are making it through the justifiably skeptical automotive press. The automotive press may be Detroit cheerleaders, but they’re no fan of Pelosi & Co.
(By the way, Mr. Schreiber, you really should have caught that change in employment by Rattner since you’re a regular TTAC commenter and sometime contributor.)
Mr. Birdman,
You’re correct, Stever Rattner did announce that he was stepping down from heading the PTFOA back in July. He didn’t say that he was leaving the PTFOA entirely.
Frankly the PTFOA is a bit of a mystery. While Geithner announced in July that Rattner would be “transitioning” to private life and that Ron Bloom would be replacing him at the the head of the PTFOA, there’s almost no information about the PTFOA since, though Bloom did take a conference call with reporters today after Ed Whitacre announced he was staying on as GM CEO.
Bloom wasn’t at the show as far as I can tell. None of the 5,000 or so journalists reported on his presence nor is there anything on the web that says that he was at the 2010 NAIAS. I assumed that Rattner was at the show representing the Obama administration in some capacity, official or unofficial. He certainly wasn’t there as a private individual – and obviously GM had some role in his presence. I asked him about the credentials and he laughed, saying that’s what the show gave him.
After a whole lot of research and development here is the car that our wonders in Washington have come up with. I am sure you will agree that after all the new taxes and loss of jobs that this car really will be catching on right soon.
http://www.youtube.com/watch?v=dJfSS0ZXYdo
This is probably one of those green jobs or a least a vehicle that will be taking you to one.
Timstigator
Sorry, but Ford is a bad rap as well. I decided several years ago to never buy another Ford due to the fact that they are aggressive supporters of homosexual rights. I cannot find it within myself to fund their efforts to diminish the nuclear family. Ford’s efforts are detrimental to our saving this nation! So, I guess it’s a draw -
CitizenAuthority,
Corporations are usually not political but rather they are politically correct. All the banks and other companies lining up for some kind of handout shows that plenty of businesses are not interested in free markets. In fact, they’ll lobby the gov’t to maintain their own monopolies and keep barriers to competitors high.
If companies are politically correct, their HR departments are positively politically orthodox. In most big companies HR is a redoubt of feminsts, affirmative actionists, gay activists and fellow travelers.
It sometimes affects advertising buys as it relates to ethnic and special interest group advertising.
Also, gays are viewed as an affluent market segment with disposable income – sort of uber DINKs. So it’s understandable that companies would try to attract their business.
While Billy Ford may enjoy the liberal political milieu of Ann Arbor, where he’s lived and raised his family, I doubt that the Ford BOD voted to help diminish the nuclear family.
FoMoCo may have particularly entrenched gay activists at the company. It’s possible because Allan Gilmour was a high executive at Ford. Gilmour didn’t hide his orientation at Ford, is now openly and very publicly gay (he managed to alienate his liberal wealthy neighbors in Birmingham by building an overly ostentatious home for his young trophy boyfriend and cutting down some mature trees to do so) and sits on the boards of five major corporations. Corporate gay activists like Gilmour have most likely pushed their agenda within their companies.
When the VP of the company is gay, who is going to speak out against advertising in gay publications or sponsoring gay community events?
But mostly it’s about money. From the company’s standpoint, advertising in gay publications is no different than sponsoring a United Negro College Fund scholarship, or buying an ad in Haddassah magazine. The company’s not trying to promote a political or social agenda (though individuals inside the company may have that motive). The company’s trying to sell cars. They believe they need to at least look socially conscious.
Billy Ford and his family are in a tight spot. They know that their great grandfather was a notorious Jew hater. They’ve worked hard at overcoming the image of the company as endorsing bigotry. It’s possible that the FoMoCo’s apparent support for gay publications and its gay friendly employment policies are also influenced by the Ford family and the company’s desires to live down Henry Ford’s unsavory opinions.
i wonder if during the eventual autopsy if a survey will be made to determine how many customers quit buying gm ,chrysler, or ford to make the govt. intervention fail.omiting UAW cars and getting better deal and registering a political protest in the bargain.
What ?? Why is everyone biting the hand ?? Aren’t any of you worried about the future, jobs, pulling together to make America work? When you buy a Hyundai you help Korea a lot. And they really employ very few “Americans” and the jobs are not high skilled Engineering jobs. If you were to buy a Ford you would support 4-5 times as many “Americans” including critical R&D and Engineering jobs.
The Korean government actively discourages non-Korean vehicle sales. Foreign car sales are squeezed to only about 5% of the market. So why is everyone so dead set against us Americans doing small things (by comparison) to help ourselves.
Every country (except us it seems) wants a storng Auto Industry because it drives innovation and Engineering skills. They all love to dump their cars in the US and we’re all about helping them.
Worried – The U.S. has the strongest auto industry in the world.
Hyundai, Toyota, Honda, Mercedes, BMW, Nissan, Volkswagan, and Mitsubishi all have at least one U.S. production plant. They all either have no union or very favorable UAW contracts and agressive management. Many of them also do some or all the design work here in the U.S.
In other words, don’t be worried. Chrysler and GM just happen to be very poorly managed companies with outdated designs and bad union contacts. They are going where all such companies go – out of business. Innovative, energetic companies will replace them when they are gone. The only thing that worries me is how much of my tax money will they take with them.
Old Soldier,
While books will be written on GM’s poor management, the two areas of the company that almost everyone agrees are first rate are design and engineering. The GM Tech Center in Warren, MI is a treasure – they have more Cray supercomputers at the Tech Center than many countries have. Ed Welborn’s team at GM styling has had a string of well designed cars, Cadillac particularly. The CTS is a masterpiece, the Coupe version even more so. There are things going on with the CTS, the three character lines that define the body profile, the A pillar actually extending into the front fender, that grab the eye while retaining some subtlety – like the arrow in the FedEx logo. The XTS concept shown at the NAIAS, which will be Cadillac’s flagship sedan, replacing both the DTS and STS, is very elegant. Many reporters at the show thought it’s the best looking large luxury sedan out there, even nicer than the new Audi A8. With Audi being everyone’s fair haired boy these days, that’s high praise.
GM’s engineering staff is also first rate.
Remember, the managers impact the creative staff in both directions. Creative works on what management directs them to do and then management makes decisions about that work.
Most of the so-called engineering problems in Detroit cars have been management problems. Ever read Dilbert?