Fear and Loathing in Denver
By Greg Martin
Director, Policy and Washington Communications
My apologies for the title. As a Hunter S. Thompson fan, I couldn’t resist the play on words upon my return from the Democratic National Convention. And yes, at times the week took on a level of surrealism that matched one of the gonzo-journalist’s great books. At one point, as the elevator doors to my hotel opened to drop me off at the lobby, I was staring face to face with actor Sean Penn. While I wanted to congratulate him on his adaptaion of Jon Krakauer’s book, “Into the Wild,” the only intelligible thing I could manage was, “Oh, you’re Sean Penn.” And, if there was a cause to be advocated, it was on display in Denver. From Code Pink to PETA to the assorted bandana-masked anarchist, they were there. Regardless of your political leanings, the street and convention scene was an affirming testament to our nation’s exercise of democracy and free speech. Also, the city and its police force deserve high marks. The Denver-based volunteers were helpful, gracious hosts and, despite the level of security, the police demonstrated great patience and restraint…they were always nearby but at a distance to allow whatever protest was occurring to run its course.
I was fortunate enough to attend the Democratic Convention because I’m the GM spokesperson on public policy issues and we were the official vehicle provider for the convention. We’re also the official vehicle provider for the Republican convention in Minneapolis. We’ve been providing vehicles to both conventions since 1980, but this time was especially important as we showcased a line up of hybrid and alternative fueled vehicles. In Denver we had 450 vehicles, of which 300 were hybrids (a mix of the 2-mode hybrid versions of the Chevy Tahoe, GMC Yukon, Cadillac Escalade and the hybrid versions of the Chevy Malibu, Saturn Aura and Saturn Vue) and the remaining 150 were flex-fuel vehicles running on E85 ethanol. In an interesting twist, the E85 was produced from beer waste donated from Molson-Coors.
Much of my time was spent talking about our product strategy and offering consumers more vehicle choices that can take us from Gas Friendly to Gas Free. One reaction that I got was surprise that GM offered so many hybrid models. The other reaction was high praise for the Malibu, Aura and Vue. Many were also impressed with the 2 mode hybrids that were usually filled with seven people and luggage – all the while getting gas mileage comparable to a Toyota Camry. The flex fuel vehicles also got a workout during the week. Most people want to fill their tanks with something other than gasoline and wanted to know why there weren’t more ethanol pumps. A few, once they heard the ethanol was produced from beer waste, were willing to do their part to contribute to sustainable energy (with a designated driver, of course).
The remainder of the week I spent answering a steady stream of media questions about an issue that’s starting to garner considerable attention: direct, federal low-interest loans to the auto industry. As you would expect, many started off with, “Why do you need a bailout?” Let me explain what this program is and isn’t.
This program is not a bailout but an incentive for the auto industry and its suppliers. Its purpose is to get advanced technology vehicles on the road as quickly as possible in order to help the country meet its energy goals–and that’s exactly what we’re going to use it for. The program, officially called the Advanced Technology Vehicles Manufacturing Incentive Program (yikes, that’s the last time I’ll type that out fully) offers direct government loans (which we have to repay) at reasonable rates and was a part of sweeping energy legislation that was passed in December 2007. The reason this program was included in the law is because Congress recognized up front how critical the auto industry and new technology would be toward meeting the nation’s goals toward greater energy security. On that front, GM has a compelling product story to tell. And that’s where our line up of convention vehicles really helped. As I mentioned, people were surprised at the variety of advanced technology vehicles we offer, and there’s a lot more of that where that comes from…from 20 hybrid models in 2012 to the Chevy Volt to hydrogen fuel cells, I wonder if our engineers and technical types ever sleep. In the end, we have the products that will ensure that we’re here to stay. Under ideal circumstances, we know what our challenge is. Unfortunately, factors that are external to the auto industry compound that challenge (in other words, the current economic climate is really ugly out there). That’s why this existing program can really help us to keep moving full speed ahead.
Maybe I’m still infected with a sense of promise having seen how our country peacefully transitions its government. So, on that note I’ll close in the same spirit. This existing incentive program can help all of us in this way: We’ll succeed; consumers will get more efficient and cleaner vehicles sooner; the country will use less imported petroleum; a key component of the nation’s economy is strengthened during an economic downturn; and, we’ll develop new technologies in the U.S. rather than overseas. Now, it’s on to Minneapolis.
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Also read this:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080829/OPINION03/808290354/1148/AUTO01
“This program is not a bailout but an incentive for the auto industry and its suppliers. Its purpose is to get advanced technology vehicles on the road as quickly as possible in order to help the country meet its energy goals”
If you’re serious about helping the US “meet its energy goals,” why aren’t you recommending an immediate $1 or $2 per gallon tax on gas? That will do it, I guarantee it. And we don’t have to wait until 2011 for 10K Volts to hit the street, which will have almost no impact, or 2010 for the Cruze to arrive or later still for the next e-Flex vehicle… A significant gas tax would start to push oil demand down immediately. The benefit to GM is that, when you’re ready, the demand for your highly fuel-efficient e-Flex vehicles and Cruzes will be there. I can guarantee that, too.
Now, let’s step back a second and say that we agree, the way to address America’s energy goals is to get more advanced tech vehicles onto the roads in a hurry. Tell me why the government shouldn’t loan Toyota a few billion dollars to get more Prius plants in operation, double-quick. Toyota’s incrementally improving the Prius, they can add a Li-Ion for a dozen or two miles’ range in EV-mode. With two new plants at 250K vehicles/year, we’ll get an additional half million vehicles on the road every year, starting in 12 months or so. And we know the Prius works… the evidence parked next to me today. We even know people will buy them.
I enjoyed your article Greg. As much as I love the Escalade Hybrid I’m a car guy and will be patiently waiting for a DTS sized rear wheel drive sedan that incorporates GM’s two-mode hybrid system. Such a vehicle would allow those who require ample passenger and luggage space (like these politicians and their entourages) to move out of unpopular SUVs and into much more tasteful sedans. I know that we have quite a wait ahead of us for such a car due to these rough times but with some help from Uncle Sam I’m hoping the General gets this vehicle underway ASAP. I want to see some shots of this car in the SPIED! section of one of my Car & Drivers by 2013. Looking forward to seeing them!
I don’t disagree with the principle of giving the automakers or other companies loans to help with future development. However, there should be a requirement that executive wages be froze for the life of the loan (preferably with no bonuses). That would prevent the execs from taking all the money for themselves like the airline execs did after 9/11. Plus it would give them an added incentive to deliver on their promises and eventually payback the loan.
Sure, 20 hybrid models in 2012… big deal!!!! Unless GM can and will produce a Malibu Hybrid that can can 33 mpg in the city and 34 on the highway, there’s no way you can beat Toyota. These fuel economy figures can be found on (http://www.fueleconomy.gov/feg/findacar.htm). GM also will have real tough competition with the upcoming Ford Fusion Hybrid. And why do you still insist on corn-based ethanol? It’s already pushing food prices up, while GM can make diesel vechicles in Europe that get 99g/100km CO2 emissions. Diesel has economies of scale, and you already have the technology. When will GM ever learn?
“…the remaining 150 were flex-fuel vehicles running on E85 ethanol. “
Making sure the politicians know you are grateful for the E85 loophole they gave you for computing CAFE, I see.
“…Chevy Tahoe, GMC Yukon, Cadillac Escalade”
Those politicians do love their SUV’s don’t they? Didn’t any of them ask for an Aveo or Cobalt?
>Advanced Technology Vehicles Manufacturing Incentive Program
Does this guarantee you spend the money here in the US instead of sending more money
to Opel and build more plants overseas? While the middle class here in the US are struggling
to pay for inflation at every corner have thought what about what Henry Ford did years ago?
Pay a man a good wage and he can buy your product.
Saturn Vue Designs from Germany made in Mexico?
If you keep shipping all your manufacturing and production abroad who will have the cash to buy your cars? It is a catch 22 isnt it.
Its bad enough H1B workers are coming in to under cut salaries and illegals are being excepted
as underpaid workers.. I think you for bringing this up so I can write my Senator (Barack Obama) to see if he can put some strings onto that legislation. Lets just say that a company with over 75% of its manufacturing and design as well as its suppliers and parts manufacturers are here
in the US should get a perk like this.
And if that means none of the BIG THREE get a dime and small companies get support so be it..
Its all about the money and I want my TAX money to stay here in the USA.
Bob
Greg Martin said: “…I’m the GM spokesperson on public policy issues and we were the official vehicle provider for the convention. We’re also the official vehicle provider for the Republican convention in Minneapolis. We’ve been providing vehicles to both conventions since 1980, but this time was especially important as we showcased a line up of hybrid and alternative fueled vehicles.”
Mr Martin,
Please be so kind as to explain how that works. I have several questions:
* “I’m GM spokesperson on public policy issues.” <— Does this make you the primary GM lobbyist?
* Did the two parties ask GM specifically to provide the vehicles?
* Or, do you have to submit a bid in response to an RFP to provide a service?
* If it’s done by bidding, do you compete against Ford and Chrysler?
* Do the parties reimburse you as though they were rentals or leases, or do you provide the service to lawmakers for the goodwill you might gain?
* If they don’t reimburse you, what laws regulate your contribution?
* Do they specify what vehicles you should provide? I see a lot of SUVs in the list of autos you provided. Did the Dems ask for those, or did you think that was what they might like?
* Will the cars at Minneapolis be those you used in Denver?
* Were there any special problems with the alt-fuel vehicles because of the Denver altitude?
* What happens to those cars after the two conventions? Do you make them available as used cars at a discount?
* What is the interesting “twist” about using alcohol from beer waste at the Coors brewing plant in Golden? The fermentation process to make ethanol from corn is the same as the fermentation process for turning barley and the corn and rice adjuncts Coors uses into beer. In fact, fuel ethanol plants call what comes out of their fermentation stages “beer.” It’s not a “twist” — it’s part of the process and should be common knowledge for the politicians who make the laws subsidizing and controlling how we use alternate fuels.
* Are you going to get your Minnesota ethanol from one of the breweries in that area?
V/R
Gary Dikkers
The RNC is in St.Paul, not Minneapolis. Contrary to (apparent) popular belief, they are not one and the same. I live here, believe me, the convention is hard to miss.
A Government incentive is a good thing and it will be a win win situation for both GM and the Government(COUNTRY). People need to realize that this is not a hand out but a helping hand. For those who can remember when Chrysler was in trouble a decade or so ago the government gave them a loan which was paid back ahead of the due date with interest. At the time many people objected and a certain political party objected very strongly. In most other countries like Japan the Government stands ready to help industries when it is needed, it is only the US that seems to have a problem with it. If this country is to progress in this currently globalized world we better change our thinking.
If you don’t like the title “Fear and Loathing in Denver” like I don’t like the title, why don’t you change it? What is to fear and loath about democrats wanting to HELP our domestic auto producers manufacture the next generation of cars here in the US, hmmm? And as an aside what a stupid idea to go about suing over employee discounts givin to maybe a few people who didn’t deserve to get one WHILE you are now offering it to everyone? It’s no wonder GM is in trouble. You haven’t a clue on how to manage and run PR. Which brings me back to my point about the title of this article. Maybe you should think about how you might offend half the buyers of your automobiles who happen to be democrats.
Here’s what I found in News Dictionary(1973):
Fuel shortages affect industry. The energy crisis produced a major economic dislocation in the auto industry during November and December. GM, whose big car sales dropped an estimated 25% because of the gasoline shortage, announced Nov. 23 that 16 of its 24 assembly plants in the US and Canada would be partially or totally closed for one week Dec.17, reducing total output during December by 32% below December 1972 levels. GM announced on Dec. 28 that 86,000 workers would be laid off at 10 of its US plants because of a sales drop in medium-sized cars. The cutbacks, which would start in January and February, would affect 48,000 hourly and salaried workers scheduled for temporary furloughs lasting up to 10 days and 38,000 workers laid off indefinitely because of job elimination.
Well, this happened in 1973, four years before I was born. Back then it was fuel shortages that affected the auto industry. Now it’s chokingly high $4 a galon gas that’s suffocating the industry. History tends to repeat itself, doesn’t it?
I remember in one of his interviews, Bob Lutz mentioned that GM has problem in both coasts where the consumers tend to purchase foreign nameplates. Observing the sea of imported or import name plates in LA and San Francisco area roads, it is hard to argue with this conclusion. The curious thing is that both coasts are Democratic strongholds. For instance, in California, Republicans don’t have a chance in federal level elections. I think the same is true in East Coast. So, my unscientific conclusion is that Democrats mostly buy foreign nameplates! If I am right, then I sense a contradiction between the Democratic Party’s agenda for keeping jobs here and the actual behavior of democrats (i.e. party members) when they make car purchase decisions. BTW, I am not neccessarily a Republican. This is just an independent observation.
so… you want the Governement to subsidise the Volt until you can get it, and other vehicles using the technology built in enough volume that economy of scale takes over and subsidies are no longer needed? It makes sense, don’t get me wrong, but why be so long winded about it?
The title does throw you off. Reading the title, I thought it applied to the Democratic National Convention and the mood out there. But then reading in to the article itself, I understood the meaning of the title and its rationale.
Perhaps we needed to be a little more careful in applyinig this title to such an important event.
The Volt will start out as a niche car because it will not be affordable. So this will be a small part of GM sales until economies of scale kick in.
There is more going on in the marketplace than just gas prices & mileage. There is an affordability crisis in play.
The consumer ATM machine is broken. People will not be refinancing their house and using the spare cash for that out of range vehicle. You can no longer roll-over car loans or lease cars beyond your means. True consumer pricing has arrived.
With every car company targeting the $30,000 + vehicles, it is getting very crowded. So you have more vehicles being brought into this price range while more people are being removed from this price range.
It’s time to make a new Model T to keep people in the fold. Otherwise the masses will be going to another brand for the next low end car and for their next “move-up” when times are better.
We need a car that is very, very simple and easy to repair. Small, light, and modular with a different look. (the next Nano Prius). It should have a drop on body over a space frame. Manual steering, manual brakes, crank windows. The only luxury would be air conditioning. It can have a modular dash so the owner can add all the electronics they want. It must handle good and be corrosion resistant to work!
You can have a continuous cash flow by selling the modular items such as alternative power plants, replacement modules, body changes, customization for years. Kind of like the printer where they make money on the ink, not on the printer.
Hi Greg, been a long time since the Saturn days.
Good article and good luck in Minneapolis/St. Paul
Here’s a grat article from GMInsideNews (http://www.gminsidenews.com/forums/f70/rumblings-rants-saving-money-cutting-brands-what-gm-should-do-survive-68691/). Among the highlights:
“But the fact remains – are these brands strong enough to survive without major capital infusions and millions in advertising? Do all these brands make sense in a market that rewards “simplicity” over complexity in brand development and awareness?
Not to mention that having so many brands leaves a bit of a problem for product “uniqueness”. When the spyshots of the Cruze’s interior hit GMI, more than one person said, “Doesn’t it seem like a lot of GM’s interiors are starting to look the same”. one could also say the same thing when you consider the headlamps on the Invicta/LaCrosse and the Cruze or perhaps even the tail lamps on the G6 and those on the Cobalt.
How many times can you reinvent the wheel? How many times can similar interior pieces, exterior styling cues, etc be shifted from one brand to the next? Can’t we just have a one or two versions instead of 10?
Or perhaps more pointedly – does GM truly need all these brands today to cover the entire market?
Let’s see what GM’s largest competitors are doing and how they manage their brands:
Toyota manages to sell nearly as many vehicles in the market as GM and they essentially have 2 major brands (Toyota and Lexus) and one “specialty” brand in Scion that sells roughly 180,000 units more a year. AND, to add insult to injury, Toyota does this with a significantly smaller dealer network and franchises to support. The Toyota brand has clear cut “brand values” and spends plenty of money communicating it to consumers.
Nissan holds a similar strategy in selling just Nissan and Infiniti – each through their own sales channel – with one being a “sporty, everyday brand” and the other being a luxury brand.
FoMoCo is only a few steps behind GM in total sales and makes use of just the Ford brand and Lincoln-Mercury (which itself is being revitalized). Yes, Ford does own one-third of Mazda and all of Volvo – but all five of these brands combined still don’t present the logistical or overlapping challenges that GM faces.
Honda concentrates on just the Honda and Acura brands – but both are sold in different showrooms.
Even “wounded” Chrysler is consolidating their franchises to sell all three of its brands through a single Chrysler-Dodge-Jeep sales channel. But each brand will be tightly-focused since they will share the same showroom floor. More importantly, Chrysler’s future product plans calls for the eliminations of all overlapping models – thereby reducing overhead and increasing the capital that can be used on engineering, advertising, and other projects (i.e. one minivan, not two; one mid-sized sedan, not two; etc).
But what is more telling is that GM seems to already know this! The General’s strategy in other corners of the globe perhaps mimic what GM should possibly be doing for its North American operations. GM makes money just about everywhere else in the world, but North America. And in those markets there is typically less brands and more focused group of brands and product ranges. This isn’t always the case, but certainly in most of these profitable markets, GM sells only a handful of its brands vs. the EIGHT BRANDS we currently have in North America.
Is there a lesson from GM’s own playbook that can be learned here? “
“Diesel has economies of scale, and you already have the technology. When will GM ever learn?”
You obviously missed the latest facts in Europe. Purchasing a Diesel-car increasingly is losing any sense over here in Germany, as the price-advantage of Diesel vs. Gasoline is negligible in the meanwhile, whereas you are paying vastly higher annual vehicle-taxes (in comparison) for a Diesel-fueled car. I’ll give you a personal example: One of my co-workers is driving a Mercedes C-Class with a 2.2-liters-Diesel-engine and is paying about 360 Euros a year. I am owning an Olds Alero with a 2.4-liters-Gasoline-engine and I am only paying about 160 Euros in annual vehicle-taxes. As I am running my car on LPG, my co-worker’s Mercedes simply can’t compete at all with my car in overall costs. In most cases Diesel’s also face higher insurance- and maintenance-costs, not to forget the higher sticker-price on most Diesel-models. In addition, the perceived advantage in fuel-efficiency of Diesel’s vs. Gasoline-engines is highly overestimated, which I already could observe on my own. It’s common sense of numerous car-experts over here, that the most appropriate way to make car-driving affordable in Germany, is to switch to LPG or CNG.
Jamie Hresko, take note! Here’s why Ford will pass Toyota in quality. (http://www.detnews.com/apps/pbcs.dll/article?AID=/20080902/AUTO01/809020317/1148)
BTW, the recommendations made by GMInsideNews really makes sense. Shutting down Saturn will only cost 305 million. ($700,000 * 437 outlets ) Repositioning GMC as a brand for industrial medium duty trucks instead consumer SUVs and trucks make perfect sense , and doesn’t cost a dime. But i wouldn’t recommend G3, G4, G5 for Pontiac. Pontiac should just stick with RWD vehicles, while Buick concentrates on FWD vehicles. Pontiac is always a “rebel” brand. Make it so.
I strongly Bob Boniface is the next generation of leader. He is young, energetic, looks goof (although not as good as me), the designer of Camaro, and Volt Design Director. He brings alot of experience to the table. So he’s the perfect candidate to succeed Bob Lutz as and when he does retire as GM Product Chief and North American Chief. Being a design person and a product person will benefit GM enormously, especially in North America.
I enjoyed reading the comments and wanted to offer a few quick responses to some of them (in no particular order)…
My apologies to Brock Tice on St. Paul v. Minneapolis. Thank you and I should know better. I hope to spend more time there outside of the fray. To Chris R: I’m not sure we look at this as a subsidy, but I absolutely agree with you on the inherent nature of spokespeople (especially in Washington). We are insufferably long-winded. In regards, to Charlie H’s suggestion that we advocate a gas-tax…our dedicated customer service colleagues hate us when we imply that. The outcry as you would expect melts their phone lines. But you do touch on a great point and that is how consumer behavior changes when they have an economic and vested interest in the price of fuel. Have you seen the Dept. of Transportation figures since gas has been around $4/gallon? Our country drove billions of fewer miles than the same period last year. And, fuel economy is now among the very top reasons for purchase consideration. As far as the government lending Toyota money…the energy bill’s provision actually permits that. If you have operations in the U.S. and apply the loans to advanced technology, you qualify (of course it’s much more complicated than that, but the law does not distinguish between foreign and domestic automakers). Which leads me to Bob Tasa’s comments about keeping tax payers’ money in the U.S. The money stays in the U.S. This provision requires, among many things, that loans be invested in U.S.-based manufacturing and development operations. There’s more interesting parts of this bill where you can read how this really shores up our country’s manufacturing and R & D sectors at http://www.govtrack.us/congress/billtext.xpd?bill=h110-6. Section 136 is near the top of this link, so you don’t have to scroll too far. Finally, just a few thoughts on how the cars were used, how they’re disposed of and Fermentation 101 (And no, I’m not a lobbyist…not that there’s anything wrong with that): Both conventions asked us for a mix of vehicles to move a lot of people and a lot of their stuff. The condition was that they had to be hybrids or run on alt fuels. We had both and plenty of them. The conventions use them as they see fit. Once the conventions are over, the vehicles come back to us and they go into retail channels (auctions,dealers, etc). The cost to us is the value of the vehicle less the mileage depreciation. In that respect, these vehicles are no different than the fleets that are provided to sporting events. As far as the ethanol being derived from beer waste…I trust Mr. Dikkers explanation. I once got a home brewing kit for Christmas and my attempt to make my own beer went horribly awry. Both my marriage and home’s resale value suffered from my trying to play Sam Adams.
Dear GMisCARKING,
You keep stating all of the same negative material that is already known to GM. Your negativity does not provide anything worthy to the table. Yes, GM has had many problems in the past and they are currently dealing with more problems as are all of the manufacturers. Why slag GM? Did they offend you in anyway? Are you old enough to even buy a car? GM is a great American company. The government should support this industry long before they ever give out money to any company in Wall Street.
Alex, Here in the suburbs of St. Paul (represented by Michelle Bachmann, go look her up, for grins), Republican lawn signs and Toyotas in the driveway often go together.
Heck, I’ve even seen Bush-Cheney stickers on Volvos. Not old, square, boxy Volvos… just the newer ones.
Gereon,
Diesel isn’t dead yet. Here’s a new diesel from the UK with fuel mileage claims of 100 mpg or so — and it looks pretty good too: Trident — 200 mph and 100 mpg
Question: Can a company such as GM be as innovative as the folks at Trident?
“It’s time to make a new Model T to keep people in the fold. Otherwise the masses will be going to another brand for the next low end car and for their next “move-up” when times are better. We need a car that is very, very simple and easy to repair. Small, light, and modular with a different look. (the next Nano Prius). It should have a drop on body over a space frame. Manual steering, manual brakes, crank windows.”
Rene,
There already is such a car — the Citroën 2CV. The problem is none of the U.S. Big Three has ever made a car here like the 2CV. (With perhaps the exception of Ford and the Model T.)
The 2CV has all the features you ask for: Light, small, inexpensive, modular, different look, simple, and easy to repair. (Although it doesn’t have manual crank windows you ask for, instead they are hinged on a flap.) In fact, the 2CV has been described as, “…the most intelligent application of minimalism ever to succeed as a car.”
Citroën 2CV</b<
I for one, would love to be able to buy a new U.S. version of the 2CV. GM are you listening?
“If you’re serious about helping the US “meet its energy goals,” why aren’t you recommending an immediate $1 or $2 per gallon tax on gas? That will do it, I guarantee it.”
Lutz has asked for this before but we all know politicians will never accept such a proposal. It’s not GM’s job to legislate, just to make cars.
“Sure, 20 hybrid models in 2012… big deal!!!! Unless GM can and will produce a Malibu Hybrid that can can 33 mpg in the city and 34 on the highway, there’s no way you can beat Toyota.”
Since you visit fueleconomy.com you might note that the 2009 Malibu hybrid is rated at 26/34. That’s impressive for a low cost “mild” hybrid sedan that has more trunk space than the camry hybrid and costs a few thousand less. The fusion hybrid will be a full hybrid and will be priced accordingly.
Sheth, Lutz has never encouraged a gas tax. He has disingenously referred to the fact that we don’t have a gas tax only in an effort to stave off additional CAFE regulations, which GM opposes. Lutz knows few politicians would support a gas tax and it’s perfectly safe to talk about it as though it’s a serious proposal.
@Gereon: I was talking about diesel in America. I don’t care about Germany or Europe.
@JDC: I don’t buy cars, I lease!
Greg Martin is a lobbyist. “20 hybrids models in 2012″ is just a ploy to convince Congress to approve the $50 billion dollar loans for the Big Three. But the loans are for building fuel-efficient cars and have to be approved for each project. It won’t help GM the way it spends its money. And guess what? Most of the 20 models will be SUVs, trucks or large crossovers, not cars.
I’m pretty tired of people badmouthing the us big 3 for asking for the fed to back some loans. They all call it a bail out. It’s not, it’s just a backing of some loans to help get a better interest rate. GM/Chrysler/Ford are all working hard on electric drive (volt) or hydrogen fueled cars, what are the asian automakers doing? A plug in prius doesn’t help us much. These loans will help bring cars that we need to survive the oil prices and hopefully get us off of opecs oil all together.
If the government can back buyouts of huge mutual fund companies, companies that took part in some major shenanigans that are responsible for a lot of our economic woes right now, then they can back some loans that the automakers would use to develop tools for us to bring the economy around.
Euroclydon,
also many car-experts over here seriously doubt about the sense of Diesel-vehicles in the not too distant future. Due to higher demand for Diesel from emerging markets, since Diesel is a major fuel for any economy, prices inevitably will begin to soar. I’d recommend a very interesting column from Csaba Csere, found at the April-issue of “Car and Driver”, which I did read during my vacation in Florida, earlier this year. Caused by the Dieselmania over here, the prices for heating-oil (which practically is the same like Diesel) have been climbing notably, resulting in serious problems for numerous people to afford a warm apartment in Winter.
How much will this 100 mpg-car from Trident cost? Has it the passenger- and cargo-capacity of a, let’s say, Chevy Malibu, as required for a family? I hardly could imagine. Already Volkswagen offered the so-called 3-Liters-Lupo (78.4 mpg) some years ago. They had to phase out again this model after a relatively short time, as VW had to acknowledge that hardly anybody is prepared to pay as much money for this tiny car as for a regular midsize-sedan.
I really enjoyed driving the Hybrid Tahoe as part of the hospitality motor pool at RNC. These SUVs are fast and quiet. Its was a great PR for GM. On Sunday, I noticed that Honda took a full page ad in the Star Tribue touting their Natural Gas Civic. Since Honda does not sell the Natural Gas Civics in Minnesota and we have only 1 NG station the ad could have only been directed at the RNC folks.
I hope GM can also use their influence to build up a NG distribution infrastructure in the US. Thanks for your prior post on NG.
What happens to the motor pool vehicles after the convention are they for sale?
Mr Martin,
Thank you for your response and answers to some of my questions in your post of September 2nd.
Perhaps you’d like to try the others:
* Did the two parties ask GM specifically to provide the vehicles?
* Or, do you have to submit a bid in response to an RFP to provide a service?
* If it’s done by bidding, do you compete against Ford and Chrysler?
* Do the parties reimburse you as though they were rentals or leases, or do you provide the service to lawmakers for the goodwill you might gain?
* If they don’t reimburse you, what laws regulate your contribution?
* Were there any special problems with the alt-fuel vehicles because of the high-altitude in Denver?
And now one other question your post inspired:
You mentioned your effort to support the conventions in Denver and Saint Paul were, “In that respect, these vehicles are no different than the fleets that are provided to sporting events.” In 2004 I had a chance to be at the PGA event at Whistling Straits near Sheboygan, WI and saw all the Cadillacs GM supplied.
* Do groups such as the PGA pay you to provide those vehicles, or do you consider it as an advertising expense?
Hint: For the 2012 DNC convention, try and get Nancy Pelosi into a cute little all-black Aveo with tinted windows, instead of those huge SUVs she usually favors.
V/R
Gary Dikkers
Will you follow this post with a “Fear and Loathing in Saint Paul?”
CharlieH,
YOu are mistaken. Lutz stated that a gas tax is a more effective and fair way to spur reduction in gas usage in the US and he is correct. Changing CAFE standards means that the government is forcing all automakers to alter their product plans before the public has a chance to decide what they want and do not want. It’s a cop out proposal proffered by politicians who think it’s easy to make the auto industry the bad guy in all of this. If Americans want to consume less fuel they need to drive less, period. We already know that past CAFE increases have done nothing to curb oil usage, especially when gas was cheap in the late 80s through early 2000s. We consume far more gas now than we did before CAFE existed because of the decentralization of our metro areas and population growth. We drive more than ever and gas consumption is higher than ever. They drive less and have better public transportation in Europe due to gas costs.
The Big 3 should absolutely receive the loans (loans that is) from the government. Their biggest competitors are auto industries subsidized by their countries. It’s about time the shoe was put on the other foot.
The Big 3 are fighting for their corporate lives and they are not asking for a handout. It is necessary capital at an affordable rate to come out with fuel efficient vehicles of all different sources of energy, It is only right!
“If Americans want to consume less fuel they need to drive less, period.”
Sheth,
Have you ever read “The Tragedy of the Commons?”
Unfortunately, the vast majority of people look out for only their own interests. In short, “The Tragedy of the Commons” describes a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared resource even where it is clear that it is not in anyone’s long term interest for this to happen. In this case, the shared resource is the pool of fossil fuels that it’s taken the last 300 million years to make.
Tragedy of the Commons
If people weren’t fundamentally greedy and everyone thought only of the common good, of course CAFE wouldn’t be needed. But human nature being what it is, it doesn’t work that way.
sheth, Feel free to provide a link to an interview of Bob Lutz where he recommended we adopt a gas tax. Better yet, show me the receipt for the lobbyist bill GM paid to try and get a gas tax implemented.
“I was talking about diesel in America. I don’t care about Germany or Europe.”
Do you seriously think, the downsides of Diesel, which we are experiencing here, will stop in front of the US-border…? Energy and fuels is a GLOBAL issue, not a continental or national. I really wonder about those Americans, who blindly run after this European Diesel-tendency, which increasingly turns out to be a dead-end street.
One thing I want to bring up is what GM and other US car companies will do in regards to who gets elected. Without naming names, Its pretty obvious that one part wants to keep right on using oil for as long as feasibly possible and ignore other options until we’re right back in the boat that we’re in. It would be all too easy to simply keep on making gas engines and dump or shelve the rest. I’m not saying GM would ever do this, but if this certain so-and-so gets elected ( hint- he’s the old guy) then I would expect companies like GM to take up the lead on making sure that even if we drill holes in every single back yard for oil, we will still have reliable, trusted, and proven alternative energy powered vehicles for the masses sooner than later versus waiting for another fuel tragedy to strike again.
charlie H,
I’m not paid to do research for you. I believe he mentioned a gas tax here on this blog when discussing why he doesn’t believe in CAFE standards. I don’t see your point in all of this because in the end GM doesn’t determine federal policy. Whether or not Lutz asked for it is really irrelevant because Congress would NEVER pass such a law.
P. Constant,
I have not read that but it makes sense. Unfortunately you seem to be ignoring the fact that CAFE does nothing to reduce consumption. You dont reduce consumption by making something more affordable. Increased CAFE standards simply make it cheaper to drive which will do nothing to curb miles driven in the US. Higher prices do lower consumption as we have seen this year. It’s common sense but that is probably why politicians chose to ignore this concept.
“…in the end GM doesn’t determine federal policy.”
What!? You mean that GM president Charles “Engine Charlie” Wilson’s famous quote from the 1950’s of “What’s good for General Motors is good for America.” is no longer true?
Sheth,
Are you sure CAFE doesn’t work? In the 30 years since CAFE was first enacted:
1. The number of vehicles has nearly doubled.
2. The number of miles driven has nearly doubled.
3. But gasoline consumed has gone up only 60%.
I’d say it’s likely that without CAFE, gasoline consumption would have also nearly doubled instead of going up only 60%.
If there had been no CAFE standards, and gasoline consumption had followed the same trajectory as vehicles owned and miles driven, we’d be in even worse shape than we are now.
TO: Plank’s Constant
“In the 30 years since CAFE was first enacted…….gasoline consumed has gone up only 60%”
Since the goal of CAFE was to REDUCE gasoline consumption, I’m sure that it didn’t work.
Would the number of miles driven have doubled without CAFE? Since the cost of those miles would have been more, maybe not. See:
http://en.wikipedia.org/wiki/Jevons_paradox
Now, Gereon’s recommendation of a gas tax (first comment) WOULD reduce consumption.
GSP
In response to edvards last posting, we need to become a country that is more pro-active than re-active. We can’t keep allowing ourselves to wait until the problem occurs and then struggle to find a temporary solution. It’s nice to see that GM is taking a step towards that in developing alternative fueled vehicles. It is on the other hand sad to see that the oil industry is getting their hands in the pie as well. They want to make sure they are always going to be the ones bringing in the big bucks off of necessities of the American People. If they think the use of oil is going to grow smaller, they move on to alternative fuel. If they didn’t get so money greedy to begin with we wouldn’t have such a fuel problem. I haven’t seen any legitimate reason to raise our gas prices to what they have been at for the last 2 years. It’s all about the money greedy people on top. The price of oil rises and the price of EVERYTHING rises. It’s insane.
Planck’s Constant,
interesting points about CAFE. I would guess it might be only 45-50% without the SUV and large pickup craze of the past decade. We may even get to see what it might have been like as demand for those vehicles dwindles, and crossovers and perhaps even wagons replace them. People still need the utility, and if putting a tall roof on a wagon gets them to sell, then that’s what will probably happen.
“Since the goal of CAFE was to REDUCE gasoline consumption, I’m sure that it didn’t work.”
GSP,
But it did work. In a pure linear analysis, without CAFE, a doubling of the number of cars and miles driven would have also meant a doubling of fuel consumption.
You must consider rate of increase, not overall consumption:
That fuel consumption didn’t increase at the same rate as the other two coefficients was largely attributable to CAFE. If the CAFE standard had been allowed to increase and we were now at the same fuel mile average as Europe (well over 40 mpg), a doubling of vehicles and miles driven would have meant little increase at all in total fuel consumption.
“That fuel consumption didn’t increase at the same rate as the other two coefficients was largely attributable to CAFE. If the CAFE standard had been allowed to increase and we were now at the same fuel mile average as Europe (well over 40 mpg), a doubling of vehicles and miles driven would have meant little increase at all in total fuel consumption.”
You are simplying a very complicated situation. First of all we have to remember that Asian made vehicles made huge inroads into the US market in the last 30 years and many of those vehicles are small to midsize and powered by 4 cylinders. That alone has helped efficiency in the US and that has nothing to do with CADE. Secondly, some people seem incapable of acknowledging that automakers innovate in order to stay competitive with or without government mandates. To suggest that engine technology would’ve stayed constant without the intervention by CAFE is dubious at beast. Engine technology advanced before CAFE and it has advanced significantly after CAFE due to the power of microprocessors. Computers have done far more to advance the state of the art in engine techonology than any CAFE rules. In case you didn’t notice automakers have been pursuing hp over efficiency in SPITE of CAFE rules. The average V6 family sedan didnt even make 200hp 15 years ago and now the average V6 sedan has well over 250hp. Mileage has remained largely constant but technology has allowed automakers to get far more power out of the same amount of gas. Europe has different automotive tastes and that includes an affinity for diesels. People are quick to reference Europe’s high mpg average but not so quick to mention that much of that is attributable to diesel powered cars. The other factor is that Europeans embrace smaller, slower cars that we have in the US and that helps efficiency. In Europe high gas prices have been around for a while and that dictates what vehicles are offered and what sells in high numbers. If you want a European like fleet you need European gas prices. It’s that simple. People aren’t driving 100hp diesels in Europe because the government is forcing them to, they are doing so because that’s what makes economic sense.
sheth, It’s disingenuous for Lutz to argue against CAFE by saying that we don’t have a gas tax when GM would never support that, either. In fact, we know GM would lobby quite hard against it because a useful-size gas tax would kill GM’s big-vehicle sales. GM has preferred the loopholes of CAFE all along.
Moreover, you can not say, with certainty, that Congress would never pass a sizeable gas tax increase. We did just that here in Minnesota. Of course, the Republican party mullahs then declared jihad against the Republicans that broke ranks to support a fuel tax increase that was long overdue and fully necessary to fund vital roadway improvements and upgrades. During the last Congressional campaign, the Republican candidate argued in favor of increased expenditure on key and expensive highway projects within her future district. She’s more than happy to buy the roads and votes, she’s just against paying for them.
“In fact, we know GM would lobby quite hard against it because a useful-size gas tax would kill GM’s big-vehicle sales.”
And GM’s big-vehicle sales aren’t already being killed? To be fair, such a tax would only kill discretionary big-vehicle sales ~ those that people are buying for vanity or social reasons and not because of need. The market will always be there for the ranchers, contractors, small businesses, etc. that really need big vehicles to do their jobs, and if necessary, the government can adjust fuel taxes for them. (As they do now with diesel fuel for farmers.)
I think GM would like a gas tax ~ at least that would give them stability for long-range planning, and if it’s a government-imposed tax, they can always point their fingers at the politicians.
You started out talking about the DNC and Gonzo Journalism but as I soon as I clicked the “read more” link your post switched over to talking about your low-interest loans. I found it to be a bit of a disconnect. There wasn’t much transition between your ideas.
It’s good to see you blogging. I hope to see more business leaders doings so.
In terms of consumers seeing GM as a hybrid and gas-free car provider, you have a great deal of work cut out for you. You will need to change perceptions and ideas about GM that many consumers have had for decades. I look forward to seeing how you do it. The U.S could use a strong, growing GM that provides leadership in these areas.
- Ryan
Okay, for once I must defend GM. The actual quote from the1950s GM CEO was: “What’s good for General Motors is good for the USA, and vice versa. What’s good for the USA is good for GM.”
Believe me, without the full quote, it’s mean. With the full text, it makes sense in a perverse sort of way.
Mr. Martin,
Still waiting for your report from Saint Paul. You must have run into somebody at the RNC whom you can tell us about as you did with your tale of how you froze up when encountering Sean Penn.
Shame on GM for asking for a buyout when your own management cannot manage themselves.
What’s good for America? Have GM file Chapter 7, then sell all your stock and inventory and start over. Drop all your prices to move your stock. NO BAILOUT for GM.
martin weren’t you the ATC guy that hosed union members in the FAA, some Democrate you say you are. i have to call the BS flag on that.
Another great Greg Martin Article
I didn’t write it but I did find it by searching the internet for your credentials…
If Life Was A Race Greg Martin Would Take The Pole
Not many of you remember the knuckle-dragging weasel that served as Marion Blakey’s sock puppet during contract negotiations with our nation’s air traffic controllers. I do.
Mr. Greg Martin lied, twisted the truth, obfuscated facts and sold any integrity he had for a few pieces of Blakey’s panti….correction, silver. When his odious task was done, Gregory did what any self respecting whore would do: He parachuted into a cushy job polishing somebody else’s knob in Washington DC (and Elvira’s knob was a “hard” act to follow.) He fled to the then-relative safety of GM.
Where has that rascal been? Wellllllll…..here, where he blew smoke up GM’s asses about his all expenses paid trip to the two political conventions to…well…you know. Do a “Lewinsky” minus the cute blue dress and faux beret.
Even worse he was here, where he accepted an award for GM for—you will not believe this—thumping his chest about the righteousness of paying salary and benefits to employees serving in the military operations overseas. From the site, this quote:
“One of the larger companies to win the Freedom Awards is the legendary Detroit automaker, General Motors. GM has twenty salaried or hourly employees serving in Iraq and Afghanistan at present. GM saves the jobs of employees who go to fight in the War, pays the difference in salary, and maintains full benefits for employees and their families.
“We think it’s a pretty simple view that we take, but it’s the right one,” says Greg Martin, GM’s director of communications in Washington. “They should be able to serve without some of the anxiety associated with leaving their job, and leaving their family,” says Martin.”
What a shit-stained little plankton. Martin was chirping the company line too, when Elvira and her flying monkeys refused to help our nation’s heroes, preferring instead that they go on welfare. The FAA proudly stepped up then, and paid our fighting men two very measurable benefits: JACK, and SHIT. And Martin cried like a little girl the whole time.
And finally there is this tasty news bit. It seems GM is a little tired of being called out for being callous, uncaring assholes who jet around the country sipping Crystal and smoking Cohibas, so they have decided to put some of Greg’s former agency on notice: No more tracking GM planes.
Say whaaaa? What if GM’s plane has a shitload of Al’s buddies….you know, Al Qaida, that fellow W’s been tracking for the last seven years? What if Greg’s sphincter-surfers want to lawn-dart that sucker into some tall building in Detroit, officially improving the urban architecture of that Rust-Belch city?
Or what if they get really mad at the fat Congress-curmudgeons like little Joey Knobenburg, who has been spanking GM’s clown for many a year, and decided to give Congress an ultimatum: “Give us the bailout, or get ready to bail out…of your offices in the Capitol Building. Incoming.”
““We availed ourselves of the option as others do to have the aircraft removed” from a Federal Aviation Administration tracking service, a GM spokesman, Greg Martin, said today in an interview. He declined to discuss why GM made the request.
Bully for GM, I say. And get ready to approve Osama Bin Laden, Abu Nidal, the Egyptian Islamic Jihad, Hamas, Hezzbolah, Wendys, The Kurdistan Freedom Falcons, The Cleveland Browns, the PLO, the NYPD, the FUMB, the Shining Path, The eco-friendly Compact Florescent Path, or any other tidbit two bit snot-nosed bunch of punk vomit that makes the same request. Frankly…most of those terrorist organizations haven’t cost our country 700 BILLION dollars.
And take them off the CIA’s spy satellite shots too while you’re at it. It would be awfully embarassing for GM (Greg Martin) if there were satellite shots of the GM brass pissing away part of that 700 billion dollar bailout in Tiajuana chasing the mochachina. GM luv da mochachina…
Fuck GM. And fuck their split-tailed little spokesmodel, too. If you want to track the chicken-shits as they whiz across the country, feel free to do so in the comments section of this blog. And treat them just like you would any other airplane. Don’t delay ‘em or nothin’. Gregory would appreciate it.
Posted at 08:21 PM | Permalink