Friday, June 29, 2007

Let's see...what else isn't bolted down?

Yesterday, GM announced that it had agreed to sell its Allison Transmission unit to private equity firms Carlyle Group and Onex Corp. for about $5.6 billion. Wall Street cheered the announcement, sending GM shares up to $38.19, nearly $20 per share higher than the shares were at their low point in 2005 during the worst of GM's bankruptcy fears. It seems that GM has managed to get a better price for Allison than Wall Street was expecting.

Allison Transmission, which makes transmissions for commercial trucks, buses, and military vehicles, as well as dual-mode hybrid transmissions for the upcoming light duty hybrid pickups and SUVs and for the popular Duramax/Allison combination in 2500 and 3500-series trucks, is headquartered in Indianapolis, Indiana. The sale announced yesterday excludes a plant in Baltimore that makes conventional and dual-mode hybrid transmissions used in GM's light duty trucks.


The Allison money will help offset the expected $7 billion cost that GM will incur to fund the UAW-Delphi bankruptcy settlement, which (if approved by union membership) will pay union workers upfront payments as well as ongoing supplemental wages for a period of time, in return for a reduced hourly rate in the future. There is also speculation that GM might use the Allison money to help fund a potential union-managed trust fund to pay for workers' health care coverage, similar to the agreement that Goodyear came to with its union membership last year.

Unfortunately for GM, the Allison unit was "highly profitable," and now it has killed another cash cow. The sale of 51% of its GMAC financing arm to Cerberus (the same company that bought Chrysler) marked the sale of another major contributor to GM's black ink in North America.

Other than these two, more "non-core" assets that GM has sold off in the past two years include stakes in Fuji Heavy Industries Ltd. (Subaru), Isuzu Motors Ltd. and Suzuki Motor Corp.

It's a shame that GM has to continue selling assets, but this is a necessary move for them to add to their cash balance and ensure that they can still meet their operating cash needs and keep the company running. But this is not the end of GM selling everything but the proverbial kitchen sink. They're also in talks to sell the (also profitable) medium-duty truck business. No announcement has been made, but the word is that Navistar is the front runner to acquire that business. Medium duty trucks are sold as the Chevrolet Kodiak/GMC Top Kick conventional cab trucks, and the T- and W-series cab over engine trucks, which are rebadged Isuzus, and are generally labeled as 4500-8500 series trucks (versus 1500-3500 series for the light duty ones).

Shedding assets of non-core businesses as GM and Ford have been doing is OK from the standpoint of allowing management to concentrate on core operations, and monetizing an asset, but it also eliminates a layer of safety net should core operations falter. There have been several quarters over the past few years that GMAC results helped to prop up GM's regular results. Now, they'll only be able to help 49% as much as they had before. After this year, there will be no return from Allison, and likely no return from the medium duty unit if it's sold off.


Read more!

Thursday, June 28, 2007

Death Wish? Buy a Brilliance BS6

Last week, photos and video started circulating online of the horrific crash test results of the Chinese Brilliance BS6 sedan. The car was tested using the well-recognized Euro-NCAP (New Car Assessment Program) offset frontal crash test at 40 miles per hour by ADAC, a German auto club.

In cars that ace these tests, the passenger compartment stays almost completely intact with no intrusion of the floor into the driver's footwell or the instrument panel into the driver's face. The best cars often still have functioning driver's doors, yet sacrifice so much of their front end absorbing the crash energy that the occupants get out of the car relatively unscathed.

Instead, the poorly-named Brilliance BS6 saw the pedals intrude into the driver's space by 18 inches, and the dashboard by 7 inches. The driver's door wouldn't open without the technicians using a huge crowbar, and the rocker panel bent almost 90 degrees, stopped only when it hit the floor. The base of the windshield moved to the same vertical plane as the top of the windshield was before the crash, and the driver was left sharing space with steering wheels, windshields, and the front end of the car. He or she would have almost certainly been killed instantly.

ADAC also tested another BS6 for side impact protection (this is also in the video linked above). In this test, the side impact cart intruded past the width of the door into the passenger compartment (over 12 inches) and whipped the driver's head so severely that he would have almost certainly been killed.

Naturally, the car earned the minimum rating, one star, on a five-star scale.

If you're keeping score at home, Chinese vehicles undergoing western crash tests have both failed miserably (the earlier being the Landwind SUV, which fared so poorly it was withdrawn from the European market).

So far, the Luxembourg-based distributor for the BS6, HSO Motors, has sold 350 of the €19,000 cars, and has said that dealers should offer to repurchase the cars from owners who are concerned about its crashworthiness. However, one dealer quoted in Automotive News said, "For price-conscious customers who are careful drivers, this safety issue does not have priority." He also said that he would continue selling the car.

Great - so if you're sure you won't be in an accident, you're OK in a Brilliance. But I always thought that most accidents sort of happened, you know, accidentally. I've been in two of them in 16 years of driving, and I didn't plan them ahead of time. I really didn't expect them to happen, frankly. Sometimes, they're unavoidable.

For its part, the manufacturer doesn't believe that the poor crash test results will hurt sales. The company also accused the German media of "viciously playing up" the ADAC test results. Brilliance also said that they agreed to cooperate with ADAC on the BS6's safety, and expect the car to earn three stars within a year. Brilliance also would like to find a partner to help it crack the US market, and said in April that it would like to sell cars in the US, including the BS6, no later than early 2008.

Personally, I don't plan to set foot in a Chinese car that will be moving (I'd feel reasonably safe in one in a static display at an auto show) until I'm convinced that the safety of these vehicles has improved to modern standards. I'd take a good used car - or a new Renault/Dacia Logan/Nissan Aprio - any day over a Chinese car with questionable occupant protection capabilities. But, if you have a death wish, you can always buy one of these and drive into an offset barrier at 40 miles per hour. You won't be around to tell us about it.

Read more!

Monday, June 25, 2007

Is the smart Too Smart for the US?

The smart [the all-lowercase name is almost as irritating as Saturn's all-uppercase names, and will not be repeated throughout the rest of this post], a diminutive "city car" produced by Daimler, is going to make its official US sales debut in the first quarter of 2008, to be sold by United Auto Group, a large dealership chain owned by Roger Penske. There has been a lot of hype surrounding the US availability of this car; the official website at http://www.smartusa.com/ even is so kind as to provide a way for interested owners to "reserve" a 2008 Smart for just $99.

Although the reservation fee is refundable at any time, and the company claims that the fee and reservation system are there to "gauge interest" in the car, it sounds to me that it's arrogant at best, and a scam at worst. How does committing $99 - in what is not even really a commitment, because you can get your money back, and they don't have to sell you a car if they don't have enough - really gauging interest? Plus, the "deposit" is less than 1% of the $12,000 base price of a Smart. So basically, Smart expects buyers to pay $99 for the privilege of being contacted if a Smart car is available for purchase.

As of early June, UAG announced that they had over 20,000 Smart "Insiders" who paid $99 to be on the sort of wait list...so Smart is now holding almost $2 million for basically doing nothing. I'd like someone to give me $2 million for a little while. I won't even touch the principal, and if I invested it in a mutual fund that earned 10% per year, I'd be making six figures without lifting a finger. Sweet.

Smart expects to produce about 16,000 ForTwos for sale in the US for the 2008 model year, and I can see them meeting or even exceeding that goal, but is this really a car that's going to succeed beyond core urban centers like New York, San Francisco, Chicago, or Miami? Everything I've read about them has said that they're surprisingly roomy inside for two passengers, but lack luggage space, and give off a vibe of feeling a little too close to the road and surrounding traffic, without much sheet metal between you and them.

For a quick run to the grocery store, or for simple urban parking, they seem like a neat idea, if perhaps just a novelty. They'll get pretty good gas mileage (over 40 miles per gallon, even without the benefit of hybrids or diesels) and crash tests have been successful in them because of their innovative engineering. But how many Americans, who pretty consistently are in love with 1) large vehicles, and 2) fuel economy, as long as it requires no sacrifices in vehicle size, comfort, or engine power will be willing to pay $12,000 for an 8.8 foot long, 1600-pound "city car," when most Americans live in large suburbs and do not have to worry about urban parking or maneuverability? I think the Smart requires too many sacrifices - namely, interior space, engine power, and perceived occupant protection - to be a huge success in the US.

Read more!

Saturday, June 23, 2007

Beware of the Fleet Queens

Yesterday, I came across some interesting data on fleet sales as a percentage of total sales for each car and truck sold in the US for the first half of the 2007 model year. There were some surprises and some non-surprises in reviewing the list.

Before pointing out some of the more notable items, let's talk about fleet sales. What is a "fleet sale" anyway? Well, auto sales are broken into two main categories: retail sales and fleet sales. Every manufacturer wants high retail sales, because they're not giving volume discounts on the vehicles, retail units are generally better equipped than the ones sold to fleets, and retail sales don't end up at auctions or used car lots for half of their original MSRP with 10,000 miles after only a year. Heavy fleet sales (and thus a large volume of fleet vehicles on the used car market) depress residual values of every one of that model, including ones sold to retail customers , making unhappy retail customers and likely further reducing retail sales.

Fleet sales can also be broken down into a few subcategories: commercial, government, and rental. The daily rental fleet sales are the worst kind, because the cars are driven by hundreds of different people during their time owned by Hertz or Avis, and not necessarily babied by their drivers. They are also quickly sold back to the manufacturer, as opposed to a car sold to a company for use by a sales representative, where he or she would keep the car for three years before turning it in. Also, having a substandard car in your lineup that is a "rental car favorite" is not a good way to turn renters into future buyers, because you're not putting your best foot forward as a manufacturer. For example, imagine if the general public thought that all GM sedans were on par with the Grand Prix, when the reality is that many are better.

The source of my data is http://www.fleet-central.com. Fleet Central is a website for automotive fleet managers and appears to be pretty comprehensive. Fleet percentages given are as a percent of the model's total sales midway through 2007 unless otherwise noted, and include commercial, government, and daily rental sales.

The Non-Surprises

Ford Taurus

Think about the cars you have rented over the past few years. Most likely, they were models such as Chevy Malibu (58.8%) or Impala (53.9%), Ford Taurus (96.5%), Pontiac Grand Prix (77.6%), etc. For this reason, these models are all leaders on this list. Some others on the list are not surprises; the Ford Crown Victoria, a government favorite (thanks to police departments) sold 91.3% of its overall sales to fleets, mostly governmental agencies. The Ford Econoline, a favorite of plumbers and contractors, was 69.2% fleet sales because not many retail buyers need or want the capability and size of a full-size van.

The Surprises
Dodge Avenger

This part is more fun, but it's not necessarily good news. There are some 2008 model vehicles, just introduced in the past few months that are already selling more than half of their production to fleets (and mostly daily rental fleets). Offenders include the Chrysler Sebring (63.5%) and Dodge Avenger (79.4%!!). No wonder Chrysler management is so concerned about those two vehicles and has implemented an immediate improvement program to make them more attractive to people who want to buy the cars, not just catering to people who rent them and don't get to choose.

Other relatively new models with somewhat high fleet percentages include the Kia Optima (52.8%), Dodge Caliber (45.1%), Ford Edge (32.0%), and Chrysler Aspen (31.2%).

The Fleet "Hall of Shame"
Pontiac Grand Prix

The following vehicles sold more than half of their overall sales to fleets; if you would like to buy one of these cars for yourself, you can probably get a great deal on a slightly used one, but you're likely to take a huge depreciation hit if you decide to be in the minority and buy one of these new from the dealer.
  • Chevrolet Express (58.4%)
  • Chevrolet Impala (53.9%)
  • Chevrolet Malibu (58.8%)
  • Chevrolet Uplander (70.9%)
  • Chrysler Sebring (63.5%)
  • Dodge Avenger (79.4%)
  • Dodge Caravan (54.8%)
  • Dodge Charger (56.2%)
  • Chrysler Crossfire (70.6%)
  • Chrysler PT Cruiser (61.8%)
  • Dodge Magnum (60.9%)
  • Ford Econoline (69.2%)
  • Ford Taurus (old version) (96.5%)
  • GMC Savana (50.9%)
  • Kia Optima (52.8%)
  • Mercury Grand Marquis (50.0%)
Study the list above carefully; odds are, next time you visit the rental car counter, they'll hand you the keys to one of the models above.

The full lists are available here:

Cars: http://www.fleet-central.com/af/stats2007/cars_web.pdf
Trucks: http://www.fleet-central.com/af/stats2007/trucks_web.pdf

Read more!

Wednesday, June 20, 2007

Chrysler Finally Figures Out How To Rid Itself of 2006 Models

I don't live anywhere near Detroit (about 550 miles away), but even I've heard the stories over the past year or two of Chrysler overproducing vehicles to keep the factories running, even in the face of falling demand for their products (particularly the larger, more fuel-thirsty ones). Since they were unable to convince dealers to take many of them, and still had a huge inventory problem, many of them were being parked in overflow parking lots at the airport in Detroit. There were acres upon acres of new 2007 Jeep Commanders, Dodge Durangos, and more.


Chrysler finally wised up a few months ago and discontinued this practice, after having at one time or another over 100,000 unsold, unordered new vehicles in the "sales bank." Chrysler watchers (or Iacocca autobiography readers) may recall that this very thing - the sales bank - nearly bankrupted the company in the late 70s/early 80s. This time, all it did was cause a multi-billion dollar loss, the head sales & marketing guy (Joe Eberhardt) to lose his job, and lead to much of the pressure that lead Daimler to unload the Chrysler part of its name.

Meanwhile, most of the damage was done. The sales bank vehicles were already built, and there were billions of dollars in finished goods inventory that nobody wanted, sitting in the Detroit weather, with birds crapping on them and the sun, rain, wind, and snow depreciating them. Last I heard, most of them had been accepted by dealers. But at this point, with many 2008 models hitting dealers, who wants to buy a "new" 2006 that was built almost two years ago, when 2007s are becoming heavily discounted?

Chrysler's solution to this was to basically allow dealers to buy the leftovers themselves. You see, dealers who held 2006s and used them as loaners or test drivers for as little as one day could be considered used cars, transferred to the used car lot, and counted as a new car sale. So, aside from helping to clear out excess [old] new car inventory, this policy change also bumped up Chrysler's May 2007 sales results. Previously, the rule was that a vehicle had to be a loaner for 90 days before it could be considered a used car. What's not clear is who is eating the loss in value - Chrysler or the dealers - when a vehicle priced at $30,000 suddenly becomes a $22,000 vehicle overnight. But if you're in the market for a new Chrysler vehicle, particularly one where there might be new 2006 models still out there, it might be a good time to go shopping. According to the company, there were 9,800 2006 Chrysler Group vehicles in dealer inventory as of May 31, 2007.


Read more!

Toyota Changes Course

The Wall Street Journal reported this morning that Toyota is putting the brakes on its factory building activities in the US, once the new plant for Highlander crossovers in Tupelo, Mississippi is finished in 2010. Toyota has already scaled back its plans for the Tupelo plant, reducing initial production capacity from 200,000 to 150,000 vehicles and delaying its opening date from 2009 to 2010.

It seems that the company is concerned about several factors - increased US labor and material costs, a geographically diverse North American manufacturing base, and the quality problems that have uncharacteristically confronted Toyota for the past few years. Also, the company is in the unfamiliar position of having excess production capacity at its North American plants (it can build about 100,000 more Tundras per year than it's on pace to this year).

Over the years, Toyota has built factories in the US for two main reasons: to build political support in as many communities/states as possible, and to provide a sort of "insurance policy" against protectionist policies and currency fluctuations that would make putting all of its factory "eggs" into one basket potentially disastrous. However, with the Japanese yen being inexpensive relative to the dollar, it's more profitable for Toyota to import cars from Japan.

According to the article, the policy shift was driven by two of the company's former presidents: Shoichiro Toyoda (1981-1992) and Hiroshi Okuda (1995-1999) who are still members of the company's board. These men were concerned that Toyota has built too many plants in the US too quickly, and hadn't fully considered the economics of the decisions.

The supply chain complexities that come from a geographically diverse manufacturing base (Toyota has plants for engines, parts, or vehicles in eight states). Toyota's four most recent assembly plant projects have only one production line each (the most efficient plants Toyota operates have two or more lines).

In contrast, most of Toyota's factories in Japan are concentrated in Toyota City, which makes the supply chain much easier and less expensive to manage, and most of the company's plants in Japan can build up to six different models each, instead of one or two built in the company's North American plants.

My take: It appears that Toyota has allowed themselves to become a little complacent over the years...almost making very expensive factory construction decisions on auto pilot, when there may have been a better alternative. I congratulate them on identifying the problem before it's too late, like most of their domestic competition did for the past two decades. If Toyota's record profits of the past year or two are coming on the back of some fundamentally unsound decisions like these, imagine what they can accomplish if they sharpen their focus and concentrate more on profitability and cost reductions than on political goodwill and making the "automatic" choice.

Read more!

Tuesday, June 19, 2007

2008 Corvette Pricing Announced

Well, another Corvette article this week...

Rick "Corvette" Conti, a Corvette specialist at EVS Chevrolet in Random Lake, WI, posted the 2008 Corvette pricing on his website today. To me, as a Corvette enthusiast (and wannabe owner), the most pressing questions about 2008 Corvette pricing were:

  1. How much will the base price increase, with the new LS3 6.2 liter engine?
  2. How much will the 4LT/3LZ trim package cost (leather wrapped dash/trim)?
  3. How much will the performance Z06-style exhaust cost?
Well, the news was actually pretty good. GM was prudent to keep the price increase relatively modest, in light of falling Corvette sales for 2007 versus 2006.

The base price (including destination) increased from $45,075 to $45,995, which is an increase of $920, or 2.0%. Included in the base price is a 7.5% horsepower increase (400 to 430) and standard XM and OnStar.

The 4LT/3LZ trim package, which includes everything the 3LT/2LZ packages (last year's top trim levels) get, plus the leather wrapped dash and door panel trim) adds $3,500 to the price of a 3LT/2LZ. Motor Trend predicted that it would cost $4,000 to $5,000, and said that those prices were worth it, so I guess $3,500 is reasonable. I don't plan on considering it if I get a new one, though...the budget would already be stretched pretty thin.

The NPP performance Z06-style exhaust, which adds 6 horspower for a total of 436, costs $1,195, which is about what I was expecting it to cost. No matter how good it sounds at wide open throttle, I don't think $1,195 for 6 horsepower is worth it to me.

The nice thing about XM and OnStar being standard in the base 1LT Corvette for 2008 is that, since they were previously standard in the 3LT, the price of a 3LT with no other options goes up only $480, from $50,020 to $50,500. That's only an 0.9% increase.

Kudos to GM for continuing to build a [relatively] affordable sports car! Now, fix the attitude of your Chevy dealers who don't let people test drive them.


Read more!

Thursday, June 14, 2007

GM-Delphi-UAW Deal Near

The Detroit News reported today that a deal may be near in the long-running GM-Delphi-UAW love triangle. Delphi is currently in Chapter 11 bankruptcy protection and has said that it needs to significantly lower its labor costs to remain a viable entity. The UAW has said that if Delphi gets a court order to void the current labor contracts, it will strike Delphi, and without Delphi parts, GM would not be able to continue production (Delphi was spun off from GM in the 1990s and is still GM’s largest parts supplier). Given GM’s precarious financial position, a Delphi strike would be disastrous, which is why GM is willing to help pay any settlement to the UAW to allow Delphi to turn the page and exit bankruptcy protection.

If the “people familiar with the talks” are correct, the general proposal likely to be agreed upon is for GM to provide a cash payment to remaining Delphi workers (20,000 or so already took voluntary packages in the past several months to leave the company). In exchange for this lump sum, the union would agree to lower hourly wages, which Delphi could presumably afford to pay going forward. The hourly rate after reduction would be somewhere between $14-18 per hour (on par with what temporary auto/parts workers earn), and workers would also be given the choice of accepting a buyout, or returning to the GM as employees.

The amount of the lump sum payments to individual employees is not clear, but GM has already reserved $7 billion for a Delphi bailout, so it will likely be a pretty significant sum per employee. Yahoo Finance shows Delphi having 171,400, but the company’s US headcount is not clear (their most recent 10K filing shows 21,300 unionized hourly workers).

Read more!

Wednesday, June 13, 2007

The 10 Best Chrysler Vehicles of the Past 25 Years

The second in a series; click here for the 10 Worst Chryslers of the past 25 Years. These are in no particular order.


Chrysler 300/Dodge Charger/Dodge Magnum (2005-present)
The LX cars are probably the best cars that Chrysler has ever built. They're big, stylish, bold, and are available with optional 6.1 liter 425-horsepower Hemi V8s. Plus, they have high-tech features like independent rear suspension (on a chassis derived from the Mercedes-Benz parts bin), five speed automatics, available all wheel drive, and more. The cars are also very popular with tuners; one of my favorite upgrades is the Bentley-style grille, but another common one is Lamborghini-style scissor doors. The platform is apparently very flexible, because a modified version of it will underpin the Dodge Challenger coming out in year or two. Further evidence of its success is the fact that GM and Ford are either producing, or considering producing, large RWD competitors to the Chrysler LX cars (Pontiac G8, Chevy Impala, and Ford Interceptor, for example). The only chink in their armor is an interior that doesn't match the promise of their powertrains, chassis, or exterior style, but Chrysler is aware of the problem and is working on it.

Dodge Caravan/Plymouth Voyager/Chrysler Town & Country (1996-present)
While Chrysler invented the modern minivan in 1984 and spawned an entire segment of copycats, and I give them credit for that, I cannot in good conscience rank the 1984-1995 original minivans among Chrysler's best efforts (severely underpowered, underdeveloped transmissions, sub-par fit and finish). However, the 1996 models ushered in the vans' first complete redesign, which meant a new platform, new shape, and new interior. Even though the 1996 vans look similar to 2007s, there was a pretty major mid cycle enhancement in 2001, and the vans were continually improved each year. These vans have deservedly proven to be a cash cow for Chrysler. The minivans also pass the "imitation is the sincerest form of flattery" test; Honda's and Toyota's vans weren't successful until they finally decided to copy Chrysler's formula.

Chrysler PT Cruiser (2001-present)
Though the PT Cruiser is getting a little long in the tooth, when it was introduced, it looked like nothing else on the road. It drew waiting lists and dealer markups on what was basically a taller version of the Neon chassis. The interior managed to strike an upscale, art deco tone with body-colored accents and nicely-grained plastics. The car's 2006 refresh cheapened the interior to knock it down to the level of other Chryslers, but the car is an icon and has likely exceeded all of its original sales goals. My mom wanted one when they first came out, but my parents never ended up getting one; they wound up with a 2004 SSR eventually instead.

Dodge Intrepid/Eagle Vision/Chrysler Concorde/LHS/New Yorker (1993-2004)
These cars made their debut under much hype at a time that Chrysler was in yet another financial crisis. They received much adoration and praise from customers and the automotive media. They were the first Chrysler vehicles to feature a "cab forward" design, which pushed the wheels to the corners of the car and the base of the windshield forward, partially over the engine. The result was a more aerodynamic, more modern look and increased passenger space. Having the wheels at the corners also improved handling, and the cars had extremely competitive engine offerings for their day. A close friend owned a 1995 Intrepid ES that he bought as a used demo model, and he put nearly a quarter million miles on it. Sure, by the end of its life with him, plenty of things stopped working, but it took a whack into a raised concrete median to finally bend the suspension and motivate him to sell the car. Last I heard, it's still on the road with its new owner.

Dodge Stealth (1991-1996)
The Dodge Stealth wasn't really a Dodge, but rather a rebadged Mitsubishi 3000GT sport coupe. On paper, the car was pretty awesome, especially in the top-level R/T guise: 300 horsepower, twin turbo, 5-speed manual, all wheel drive, four wheel steering, active aerodynamics, and tunable suspension. The Stealth carried Dodge's performance flagship banner admirably until Viper production began. The only downside with the car, other than high insurance premiums for the twin turbo models, was the extreme weight that all of the techno-goodies added to the car. Still, they were really neat cars, if perhaps a little boy racerish in a 1990s Pontiac sort of way.

Dodge Viper (1992-present)
What can be said about the Viper that hasn't already? For a while, it was the most powerful production car sold in the US. It made its debut with 400 horsepower, no air conditioning, no glass side windows, no ABS, and functional side exhaust at a time when the Corvette was just reaching the 300 horsepower mark. The 2008 version, once it finally goes on sale, will produce 600 horsepower! Visually, I prefer the first version, which had a much more aggressive shape than did the toned-down second generation models (which debuted in 2003). Carroll Shelby, though I think he's a huckster in many ways, had a hand in the development of the first Viper, and he truly did make it a spiritual successor to the Cobras of the 1960s.

Jeep Cherokee (1984-1991)
Jeep misses the XJ Cherokee so much that it's now tried three times (unsuccessfully) to replace it. First, the Liberty was supposed to be its replacement; it turned out to be more of a chick car than a credible Cherokee successor. Next, the Commander became a caricature of the Cherokee's styling, except it lacked the short overhangs and clean proportions of the original. Finally, the Patriot has a lot of the Cherokee's boxiness, and looks better than the Commander, but is based on a front-wheel drive car chassis. The XJ Cherokee had a huge following and was the vehicle that started the four door compact SUV craze. Sales grew every year, and the model survived long past its original cancellation date. In fact, they're still built in China.

Chrysler Crossfire (2004-present)
The Chrysler Crossfire was more or less a rebodied version of the R170 (1997-2004) first generation Mercedes-Benz SLK roadster. The interior (including instrument panel) is almost identical between the two cars, but the Crossfire has more silver-appearing parts while the Mercedes went for a wood look. The Crossfire SRT-6 even had a 330 horsepower AMG built engine. The looks weren't bad - certainly better than the Sebring that appears to be inspired by it - and it is a great way to get a Mercedes (more or less) for bargain prices. Unfortunately, they are very slow sellers and this model's days are numbered.


Plymouth/Chrysler Prowler (1997-2002)
The Prowler was a concept car come to life. It kept nearly all of the concept's good looks, except some compromises had to be made for the Prowler to be street legal and meet current safety standards. Although the front bumpers were a little awkward, many owners simply removed them. The car also had many aluminum components in the chassis. The only real problem with the Prowler was its V6 powertrain, which didn't quite line up with the promises its fantastic appearance made. This was addressed somewhat in later years with an upgraded engine, but imagine how awesome this car would have been with a Hemi. Only 11,702 were produced during a five year run.

Dodge Stratus/Chrysler Cirrus/Plymouth Breeze (1995-2006)
The so-called "cloud cars" were Chrysler's midsize sedan offerings, and were the third installment of the cab forward push at Chrysler Corporation (following the larger LH cars and the smaller Neon). Other than meteorological names, the cars also had pleasing designs inside and out - the wheels went to the edge of the fenders, even in lower trim levels, the dashboard had pleasant shapes, and they looked unlike any other car on the road in 1995 (well, the prominent grille did remind me of a 1992 Pontiac Grand Am). The cloud cars' styling later manifested itself in the 1996 minivans, and looked pretty good on those as well.

Coming up in the next installment: one of us will make fun of a different manufacturer, and then a few days later talk about some of the good cars it's made.


Read more!

The 10 Worst Chrysler Vehicles of the Past 25 Years

The second in a series. These are in no particular order. Click here to view the 10 Best Chrysler vehicles of the past 25 years.

Eagle Premier (1998-1992)/Dodge Monaco (1990-1992)
The Eagle Premier and its rebadged cousin the Dodge Monaco were developed by AMC and Renault prior to AMC's purchase by Chrysler Corporation. It was a full size, FWD sedan styled by Giorgetto Giugiaro. The cars were unusual in that they had a longitudinal engine layout, which was later carried over to their successors, the Chrysler LH cars. The Premier was developed by AMC and Renault, was renamed "Eagle" following the merger, and launched shortly afterward. From all accounts, the cars were well-engineered and somewhat ahead of their time (more so than other contemporary Chrysler products), but they were prone to electrical problems and transmission issues. More importantly, they were sales duds - after selling over 40,000 units in the first two years, sales dropped off precipitously to a third of that, necessitating the rebadge called the Dodge Monaco. Combined, these two models topped out at 24,000 units in their best year together, and they were dropped in 1992. I can't STAND their styling, either; they look like overgrown Renault Alliances. Like they were styled by a T-square only. These AMC relics did, however, eventually lead to the well-received cab-forward Chrysler LH cars of the early 1990s.

Dodge Shadow/Plymouth Sundance (1987-1994)
These were Chrysler's compact cars immediately prior to the Neon. Like so many 1980s Chrysler products, they were a derivative of the K-car platform. They were cheap transportation (though more expensive than the Omni/Horizon that they ostensibly replaced). Chrysler kept churning these things out for years even though they lost money on them, just to help their CAFE numbers (sound familiar?) Toward the end of their life cycle, they were infused with a 3.0 liter Mitsubishi-sourced V6, but the cars were not mourned when the new "cab-forward" Neon hit the streets...

Dodge/Plymouth Neon (1995-1999)
Who can forget the cute "Hi" advertising campaign that introduced the world to the Neon? The car promised more space inside than its competitors thanks to its cab forward architecture. It also had a more powerful engine lineup than nearly all of its contemporaries did, and had a successful early career in SCCA Solo Autocross. Unfortunately, cost cutting led to issues such as frequent head gasket failures (remedied in later first-gen models) and peeling paint in certain colored cars (who hasn't seen a purple Neon with bare metal spots on the hood?) My dad (a used car dealer) has bought a handful of Neons over the years, and probably more than half of them have broken down on their way to the auction to sell. There were also very odd design compromises, such as rear windows that were hand-cranked even if the front windows were power, and frameless windows. The 2000 model introduced the second generation and improved refinement of the model, and is not as worthy of pointing at and laughing.

Plymouth Acclaim/Dodge Spirit/Chrysler LeBaron (1989-1995)
This trio of boxes on wheels was Chrysler Corp's midsize sedan offering of the early 1990s. While the rest of the world was moving to an aero look thanks to the Ford Taurus and Asian competition, Chrysler decided to go with a neo-Volvo look. The cars weren't ugly, but they weren't design leaders, either. Nor were they the engineering benchmarks of their day, as they rode on yet another K-car derivative platform (a full eight years after the first K-cars hit the streets). While the exterior theme was one of tasteful, if bland, rounded boxiness, the instrument panel's theme was just boxiness. My aunt used to work for Chrysler Corporation in the early 1990s, and she once visited us in a rental Dodge Spirit. When we checked out her car, she said that the buzz around the company was that they were intended as an E-class Mercedes competitor. Mmm hmm. At least the cars that replaced them were better. The only car in this group that gets a pass is the Spirit R/T, which had a 224-horsepower, turbocharged/intercooled four banger that kicked ass and took names.

Jeep Commander (2006-present)
The Jeep Commander is a half-assed attempt at a larger Jeep to compete with the (then) successful Hummer H2. Jeep was concerned that many of its competitors offered larger vehicles and would-be Jeep buyers would end up buying a competitive product instead. History is littered with management who tried to run with the cheapest way around a problem, and DCX management decided to rebody a Grand Cherokee, keeping the same wheelbase and optional powertrains, but with a larger, boxier body. The marketing message that buyers were supposed to get was that the Commander captured the style of the much-loved 1984-2001 Jeep Cherokee; the message that they got instead was that it looked like a caricature of that vehicle. Others called it the box that the Grand Cherokee came in. The result was an overstyled joke that was too big to handle itself as nimbly as a Grand Cherokee, and too small inside (particularly in the third row) to be a credible competitor to vehicles like the Pathfinder SE Off Road, Hummer H2, Chevy Tahoe, Ford Expedition, etc. It also suffers from the unimaginative Chrysler interiors of the mid-2000s with plenty of right angles and not enough quality materials. The Commander isn't going to see a second generation.

Dodge Aries/Plymouth Reliant (1981-1989)
Ahh yes, the venerable K-cars. These suckers may have saved Chrysler from bankruptcy in the early 1980s (thanks to their small exteriors, six-passenger interiors, and fuel efficient engines). Their platform eventually spawned nearly every front wheel drive Chrysler, Dodge, and Plymouth developed during the 1980s, including the minivans. That would be fine if it was a well-engineered starting point, but the K platform wasn't state of the art and was the victim of cost cutting. It was also engineered to be lightweight for fuel economy reasons, and in a cheap car, lightweight does not mean exotic materials, it means thinner materials and de-contenting. Like the later Neon, these cars had head gasket problems with the ubiquitous 2.2 liter fours, and Chrysler's attempt at marketing a Japanese engine in them (supplied by Mitsubishi as a 2.6 liter) backfired because those engines blew themselves up. They did sell more than a million units of these cars in a single (long) generation, but it's a safe bet there weren't a million happy owners. Oh, these cream puffs were the Motor Trend Car of the Year in 1981. These cars are also immortalized in song by the Barenaked Ladies in "If I Had a Million Dollars" with the line, "...I'd buy you a K-car, a nice Reliant automobile..." Funny, but repulsive.

Dodge Omni/Plymouth Horizon (1978-1990)
Yes - another MT COTY winner (1978!) These small cars were the first front wheel drive offerings by Chrysler Corporation designed to compete with the successful Volkswagen Rabbit. Imitation is the sincerest form of flattery, right? Because they look eerily similar to a Wabbit, and in fact early models even had VW-sourced engines under their hoods. The cars initially were poor handlers, so much so that Consumer Reports (yeah, I know...) rated it "not acceptable" because of the difficulty in handling the car in an emergency scenario. Toward the end of the car's life, when it was about to be replaced by the larger and more expensive Shadow/Sundance, Chrysler standardized some optional equipment and called them "Omni USA" and "Horizon USA," sales perked up to the extent that they were allowed to soldier on for a few more years. Whether this was a wise long-term decision is questionable. I remember riding in a friend's Horizon in high school. The only thing I liked about it was that I didn't have to ride the bus to go home.

Dodge Aspen/Plymouth Volaré (1976-1980)
These cars were considered compacts at their launch, but times changed so much during their lifespan that they were considered midsize at the end. The lineup consisted of a coupe, sedan, and wagon. My favorite part about these cars is that Lee Iacocca admitted in his self-named autobiography that the cars were rushed to market, and first year customers were basically the last round of quality control. I'll let you see it in his own words (page 169):

But the Aspen and Volaré simply weren't well made. The engines would stall when you stepped on the gas. The brakes would fail. The hoods would fly open. Customers complained, and more than three and a half million cars were brought back to the dealers for free repairs--free to the customer, that is. Chrysler had to foot the bill.

But then even cars that were mechanically sound started rusting. The Volaré's rusted fender program cost us $109 million--in 1980, when we could ill afford it. The fenders had rusted through because somebody wasn't paying enough attention to the process of rustproofing them. We weren't asked to recall them, but we had an obligation to our customers to fix them. Even though we stood behind them, the resale value of these cars plummeted, which hurt Chrysler's image badly.
The results were predictably disastrous; as Iacocca alluded to above, Chrysler was teetering on the brink of bankruptcy, with its only hope for survival resting on loan guarantees from the federal government and keeping their fingers crossed for the K-car's success. (Also, as a side note, two pages after his Volaré description, Iacocca talks about the sales banks of the late 1970s and early 1980s that sound strangely similar to the ones they had last year.)

My roommate in college had well-to-do parents, but for some reason, he drove a 1978 Volaré wagon, cream colored, with vinyl seats, slant six, automatic, and AM radio with a separate FM converter. I remember one night during an ice storm, I was all cozy in my dorm room watching TV, and he called me from a pay phone outside a grocery story 15 miles away and wanted me to pick him up because his Volaré stopped running. I had to borrow another friend's car in an ice storm just because his 17 year old Volaré was a POS. I drove it twice that I can remember, and the only thing I remember, aside from a serious lack of horsepower, was that the rear brakes were extremely prone to premature lockup.

Chrysler Sebring (2007-present)
This car is not a bad car - for 1999 - but considering what the competition continues to roll out (Hyundai, Honda, Toyota, FoMoCo, GM, Kia, etc.) - it's an unacceptable effort. Chrysler managers have admitted as much, as evidenced by a leaked memo expressing disappointment in the recent Sebring and Dodge Nitro projects (they might as well include the Jeep Compass in that list as well). The Sebring is a car that sounds pretty good on paper - powerful optional V6, six speed automatic, innovative interior features like heating/cooling cupholders, hard disk music storage, Bluetooth, etc. - all at a reasonable price. But the problem is, those features need to be integrated into an attractive package, which is where the Sebring falls flat on its face. Similar to the Jeep Commander in that it's a caricature of all recent Chrysler division styling cues, it combines the Crossfire's hood, the 300's gun slit windows, and a too-stubby trunk. The result is a chrome plated turd. Even worse, reviewers have called the interior materials "cheap." Perhaps one problem is that Chrysler admitted benchmarking only domestic models (apparently previous generation ones like the Taurus, Impala, and Malibu) that already were not the head of the class. The car's handling has also been described as "geriatric." Time to raise the bar, Chrysler.

Dodge Daytona (1984-1993)
This car is what happens when you try to turn the K-car platform into a sporty car. It had the looks (especially for 1984), but had no balls; the base engine was 93 horsepower and the optional engine in the first year was a more respectable 142 horsepower. The Daytona was restyled twice during its front wheel drive lifespan; its original style was a "tribute" to the 1983 Chevy Camaro. The first restyle added hidden headlamps, and if you really squinted hard, looked almost kind of like its namesake 1969 Dodge Charger Daytona (the one that chewed up its NASCAR competition, looks like a Plymouth Super Bee, but is more rare). The last restyle softened some of the hard angles and eliminated the popup headlamps. There is one exception to my panning of this car - the rare 1992 and 1993 Daytona R/Ts with the Spirit R/T's 224 horsepower turbo/intercooled four. This engine's heads were developed by Lotus, and it's the highest horsepower per liter of any engine Chrysler has ever sold to the public. It was the heart of a lion in a body and chassis straight out of the early 80s.

There were a few honorable mentions, but I'm getting lazy, so they only get listed:
  • Dodge Mirada (1980-1982): Batmobile wannabes
  • Chrysler Cordoba (1975-1983): Chevy Monte Carlo clone, but with "rich Corinthian leather"
  • Chrysler Aspen (2007-present): who exactly asked for these, other than Chrysler dealers?
Did I miss any? Did I wrongly throw any good cars under the bus? Any closet Volaré fans? (Doug, if you're out there, sorry I made fun of your wagon. I know it will be in your museum someday.)

Coming next: The 10 Best Chrysler Vehicles of the Past 25 Years. Stay tuned.

Read more!

Monday, June 11, 2007

New Stuff...New Gig

Is Saturn Really a Success Story?

Time to Build Unreliable Cars?

I've joined the team at The Mags Report. Mags has quadrupled my blogging income, so it really seems to be worth it. :-)

$0 x 4 = $0

Enjoy...oh, and I still write for Autosavant.net also.

http://themagsreport.blogspot.com
http://www.autosavant.net

Read more!

Friday, June 08, 2007

The E85 Road Test

What happens when you actually are able to find a gas station that sells E85 and decide to try a tank in your vehicle? My friend did this last week, and here's his story.

The E85 Road Test

We do the sorta scientific test.

By Chris Haak

06.07.2007


A friend of mine bought a 2007 Chevy Avalanche LTZ a few weeks ago. He really likes his new truck, and doesn’t even complain about its gas mileage. According to him, it’s very comfortable (it has leather, XM radio, plenty of room inside, and enough room for everything that his family needs when they travel) and fits his needs perfectly.

He’s owned his truck for a few weeks, and after hearing all of the hype about E85 in the media (thanks to GM and Congress, mostly, plus the President’s push for alternative fuels to reduce our dependence on imported oil), he decided to try to fill up his flex fuel-capable Avalanche with a tank of E85, which is 85% ethanol and 15% gasoline. (Normal “gasoline” is up to 10% ethanol for air pollution reduction purposes, or E10).

In case you’ve been asleep for the past few years, allow me to introduce you to ethanol. Ethanol sold in the US is distilled primarily from corn, which is something the US is able to grow a lot of. There are a few problems with using ethanol as a motor vehicle fuel: diverting corn crops to be used in fuel production instead of food production causes corn prices to rise; there is also controversy about the amount of energy required to create ethanol from corn, and a lack of availability of gas stations selling E85.


Read more!

75% of Americans Favor 40 mpg by 2010? Really?

Reading the press release linked below about a completely flawed survey just lit a fuse inside me. The spirit moved me to write:

75% of Americans Favor 40 mpg by 2010? Really?

By Chris Haak

06.08.2007


On Wednesday, an organization called the Civil Society institute, which advocates a 40 miles per gallon CAFE standard for US vehicles by 2010, issued a press release that has been picked up by a few news outlets. Here is a link to the press release.

They claim that an overwhelming majority of Americans favor a more radical increase in the CAFE fuel economy standards than even Congress is pushing for; based on a “scientific survey” that they sponsored. I was dubious of these claims, so I dug a little further. Before I even get into the flaws in their specific survey, let’s think about a few things.

The formal report has confidence intervals and all sorts of fancy statistical justifications, but the fact is, the questions are terrible. You can have the best sample of respondents in the world, but if your questions have an inherent bias or flaw, then your survey is flawed. They also don’t say whether the survey companies identified themselves as representing an organization that advocates 40 mpg fuel economy standards by 2010, but the tone of the questions makes it clear to the respondent thinks the question wants them to have.


Read more!