UPDATE: The Detroit show wrapped up this past weekend. The NAIAS is one of five major auto shows in North America, along with New York, Chicago, Los Angeles and Toronto. Along with the really big shows, there’s a circuit of regional shows in other major markets. While automotive executives are pretty commonplace at the major shows, you’re not as likely to find a CEO at one of the regional events.
The Washington Auto Show starts later this week. As if to underscore the movement of the domestic auto industry’s center of gravity to Washington, Ford CEO Alan Mulally will be keynoting the Washington show’s media preview. At the Detroit show, General Motors announced that Michigan would join California as a launch market for Chevy’s Volt extended range electric vehicle. Today, in advance of the Washington show, GM announced the greater Washington, D.C., area as the third launch market.
“Concentrating Volt sales in these three key initial markets allows us to give our first customers a high-quality experience,” said Jim Campbell, Chevrolet general manager. “In addition to geographical considerations, each market also has progressive local and state government leaders and utility partners who are crucial in bringing electric vehicles to market.”
Key initial market indeed.
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The drama of the domestic automakers continues to make the media preview of the North American International Auto Show (NAIAS) in Detroit a must-attend event for journalists. Reduced circumstances may have forced some manufacturers to forego expensive concept cars, catered press conferences, or even displaying at all in Detroit (in the case of Nissan/Infiniti), but still over 5,000 press credentials were issued to journalists, photographers, broadcasters, and bloggers from around the world.
In the wake of the government bailout of GM and Chrysler, with so many reporters present it’s not surprising that the show organizers would also have to issue a large number of credentials to politicians — eager to get publicity and to show the automakers just who is in charge.
The first day of the media preview started at 7:30 a.m. with a press conference for Transportation Secretary Ray LaHood. It ended at 5:30 p.m with a press conference for House Speaker Nancy Pelosi and the rest of the congressional delegation.
Someone threw an auto show, and a political rally broke out. Local, regional, and state politicians are nothing new at the NAIAS, but this year there were scores of politicians and staff members from Washington as well.
From the Obama administration, there were two cabinet members (LaHood and Labor Secretary Hilda Solis), senior EPA official Marg0 Oge, and the head of the National Highway Traffic Safety Administration, David Strickland. Each of them traveled with an entourage of PR people and agency employees. It’s possible that there were also representatives attending from the Department of Energy as well. From the legislative branch, in addition to Michigan’s Debbie Stabenow, Tom Carper of Delaware (who brought his teenage son along) represented the U.S. Senate. Speaker Nancy Pelosi was accompanied by 15 of her colleagues from the House, including Majority Leader Steny Hoyer. Rep. Fred Upton, of western Michigan, was Pelosi’s “bipartisan” fig leaf — the only Republican in the delegation.
Her remarks, and those of Hoyer, were essentially cheerleading for the Democratic agenda and the Obama administration’s decision to effectively nationalize General Motors and turn control of Chrysler over to Fiat.
The Chrysler decision has been attributed to Steve Rattner, whom President Obama appointed to head the Presidential Task Force on the Auto Industry. Rattner was also at the NAIAS. Interestingly, though Rattner works for the Obama administration and though the administration insists it isn’t closely managing GM and Chrysler, Rattner’s badge read “GM” and he walked the Chrysler exhibit with Sergio Marchione, Fiat’s CEO.
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.
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