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The Latest Auto Extremist Rants

PMD UNPLUGGED, PART II.
by Editor
12 Dec 2017 at 11:44am

By Peter M. DeLorenzo

Detroit. Editor’s Note: Part II of my “unplugged” interview with Peter occurred this morning (12/12, 9:30 a.m.). Though Peter is notorious for his early mornings, I got him to hold off until a more decent hour (a minor victory). We weren’t going to do a Part II, but because questions poured in from some of our readers, we decided to go ahead with it. We’re also including the previous questions/answers from Part I below Part II. So, here we go... –WG

What are your thoughts about Mary Barra, in terms of her performance so far? –RC, Nashville, Tennessee. 

I give her mixed marks. On the one hand she’s proven to be quite capable as a CEO, but on the other, I find some of her decisions to be on the ragged edge of being questionable. Walking away from markets is never a good thing, despite the long list of reasons given for GM’s decision to do so. I also think GM’s bet on The Future of the business has too much fantasy connected to it. It hinges on all sorts of things coming into play that really have no basis in reality. And that’s a recipe for disaster. Her performance yesterday at the Automotive Press Association event in Detroit was typical for Mary Barra - walking in the middle of the road, filled with platitudes, while carefully not saying much. Yes, I get it, much of an auto CEO’s life is about not really having a point of view and not saying anything that could be misconstrued, but at this point, I expect much more from her. And one last thing, the fact that she and Dan “I Am” Ammann have steadfastly refused to appoint a chief marketing officer for the company is a glaring mistake. The decision to have the divisions wander around in the marketing desert on their own has been an abject failure, especially given the insipid advertising they keep generating. I don’t know if she and Ammann are reluctant to add another million-dollar body to the executive suite because they’re deathly afraid of giving someone with serious marketing experience and a point of view the autonomy to make decisions, or what, but it’s an egregiously bad call and a giant, steaming bowl of Not Good.

What’s the deal, you haven’t said much about Elon and Sergio lately, are you going soft? –Hank J., Sausalito, California

I think I’ve pretty much covered those two, and I really don’t have much to add. Marchionne is positioning FCA to be sold and that’s the task given to him by his Fiat heirs/handlers, because they’re deathly afraid of running through – and out of – their money. And being the carpetbagging mercenary that he is he will do exactly that, most likely with Hyundai. As for Musk, for all of his brilliance and vision, the fact that he can’t build the Model 3 in quantity and with quality is an indictment of his entire automotive adventure. And his calculated distractions – an all-electric semi-truck! and I’m gonna launch my sports car to Mars! – are just that. And I love the fact that these companies are already lining up to order his trucks, when he has demonstrated repeatedly that he can’t build his vision with any semblance of consistency or quality. Do they live under a rock, or what? I do have a new name for him though: Teslon. Because he has become the Teflon Tech Guru in that criticism bolstered with facts just rolls off of him. If I didn’t hear about either one of them ever again I’d be thrilled, but of course that’s not going to happen.

What do you really think is going to become of Cadillac? –J.H., Fort Lauderdale, Florida

Cadillac chief Johan de Nysschen has made it clear that he is not only remaking Cadillac in Audi’s likeness, but his favorite buzzword of late is “global” in that every decision made about the brand revolves around that premise. What does that mean, exactly? What that means is that Cadillac is well on its way to becoming a Chinese brand. “Global” is just another code word for China in de Nysschen’s lexicon, and to think otherwise is just delusional. Any hoary notions of Cadillac being one of the most iconic and authentic American brands is just that, they’re irrelevant to de Nysschen’s train of thought. Will the brand survive in America? Yes, because Cadillac is going to crank out enough crossovers to satisfy the insatiable demand for them by American consumers. As for the legacy and heritage of the brand, forget about it. De Nysschen doesn’t care, and apparently Barra and Ammann don’t care either. 

What do you think of the car companies and their obsession to turn cars into mobile shopping platforms to rival the cell phone? –WG

I think it’s total, unmitigated bullshit. This just in: Cars will never replace the cell phone. They won’t even come remotely close to doing that, in fact. And this harebrained notion that by turning your automobile into a mobile shopping platform it will somehow draw new – and younger – owners into the auto orbit is the dumbest thing I’ve heard of oh, in the last three decades. The auto companies need to get over themselves, because they will never rival the Tech Gods in Silicon Valley. It just will not happen. But the auto companies do one important thing that Silicon Valley doesn’t do, and that’s build complex transportation machines that actually serve their customers extremely well. They need to stick to that, and leave mobile shopping and game playing to cell phones.

 

PMD UNPLUGGED, PART I.

Uwe Ellinghaus announced he is leaving his chief marketing position at Cadillac at the end of the year due to “personal reasons.” What do you think about that?

Multiple research surveys have been conducted over the last decade that indicate that the average tenure of a Chief Marketing Officer, no matter what the industry, lasts anywhere from 24 to 30 months, and then they get fired, resign, get another gig, or simply wander off into the dusk and don’t come back. This is not surprising. The burnout factor is extremely high and depending on the internal battles involved, the job can take a tremendous toll. The chief marketing job at Cadillac involves constant travel to Shanghai, so, even though I haven’t spoken to Uwe since the announcement, I would bet that had something to do with it. Uwe is genuine, and a very bright guy. That Johan de Nysschen decided to transform Cadillac into the spitting image of Audi is a strategic direction that I flat-out disagree with, but I do wish Uwe the best.

What are your thoughts about the headlong rush to autonomous vehicles and the insistence by these auto companies – especially GM – and suppliers that they’re poised to make boatloads of cash in The New Mobility Economy?

I am beyond skeptical. First of all, the efficacy of the technology is suspect, because it’s fraught with fundamental issues and recurring problems. Anyone who thinks that a magic switch will be flipped and that we’ll all be suddenly awash in autonomous cars careening around faithfully doing what they’re supposed to do is simply wishful thinking. As for the companies lining up to be a part of The New Mobility Economy by cranking out cars for the masses to be squired around town in, on paper it all sounds good. The reality will be much less than that.

GM is insistent that they will be in the thick of The New Mobility Economy and that they will win. What do you make of this?

GM has been insistent about a lot of things over the years that haven’t panned out. What’s different about this time? They’re talking a good game, with Mary Barra and Dan "I Am" Ammann getting all puffed up about GM’s bullish future but it all remains to be seen. They are making a calculated shift to this “New Mobility Economy” but what they’re really doing is turning GM into a commodity company. And that may not end well for them.

So, what about the future?

Anyone who thinks that the idea – and the freedom – of personal mobility will give way to a blissful national stupor dominated by robo cars is missing the mark. As I’ve said repeatedly, robo cars will have limited use and applications in urban centers, but beyond that this country is going to be moved by personal vehicles that people acquire of their own volition for decades to come.  

And then what?

I do see a “transportation dichotomy” looming. Some manufacturers will completely throw over to building mass-use autonomous cars, while other manufacturers will retain brands – especially luxury brands – for people who want them, because they will remain profitable. I think in the future people will have a “gray” car, meaning an appliance for when they absolutely need one for mundane duty, but they will also continue to seek out real cars that they actually desire to own. The car companies that squander the legacy of their brands will simply disappear into the fog. Take GM for instance. I can see GM management’s judgment being clouded on the bet that obscene profits will come their way through the promised ride-sharing explosion. But that is a recipe for disaster. The smarter automobile companies will identify brands that they absolutely will not relinquish, and then they will continue to nourish them well into the future. I have zero confidence that Barra and Ammann understand that.

And what about electric vehicles?

They’re coming hard and fast. And once the big players start cranking them out we’re going to see 25-30 percent market penetration in no time. But the fact that this country doesn’t have a cohesive plan for a national charging network is a travesty and simply inexcusable. I do think that hydrogen fuel cell-powered electric vehicles will be the ultimate winning technology.

What do you think of these new monthly vehicle subscriptions?

I think it's an interesting way of retaining brand loyalty, except that the prices as they're being quoted now are simply ridiculous. I will be interested in seeing what Lincoln does, as Lincoln executives have promised that their plan will be much more reasonable. A giant "we'll see."

You’ve been relentless in “Fumes” with a series of columns about The Future of Racing. Where do you think it’s going, ultimately?

Racing is in deep trouble. With the manufacturers chasing their tails on myriad mobility options, racing will continue to be pushed down the list of priorities. As I said a few weeks ago, all racing will become “vintage” racing, as the disconnect between what’s going on in our street vehicles and cars used in competition grows by the day. The only hope in all of this is that certain manufacturers will understand that there will be money to be made with high-performance cars and parts for decades to come, and the manufacturers who continue to play in the personal vehicle market will want to be there. 

What about the two very disparate racing series, Formula E and NASCAR?

Formula E is the flavor of the moment but the series is completely devoid of excitement. This just in: The consistent allure of racing since Day One has been the visceral appeal of the sound and the fury. The woefully benign sound signature of a Formula E machine has all the audio appeal of a slot car, as in Not Good. Next year, when Formula E will run their entire races on one full charge (the competitors change cars half-way through the races now), it may become more interesting, but now? No.

As for NASCAR I have nothing good to say about it. It’s a nostalgia racing play and its appeal is fading faster than the Lions’ hopes of making the playoffs. The declining spiral of NASCAR’s popularity is actually accelerating, yet the powers that be in Daytona Beach steadfastly refuse to do anything about it, and NASCAR’s chief enablers – the participating manufacturers – continue to be dupes of Brian France and his inept posse. NASCAR management’s relentless intransigence combined with the litany of repeated mistakes is killing that form of motorsport. It’s up to the participating manufacturers to extract meaningful changes from NASCAR, and that means – at the very minimum – a 25 percent reduction in that death march of a schedule. I’m not holding my breath. 

What do you really think of the Lamborghini Urus, the car we’re featuring in this week’s “On The Table”?

First of all, Lamborghini is my favorite supercar brand. The fact that the VW Group gets it and has actually nourished this brand to new heights is commendable. The SUV/crossover explosion in the market is a wave that shows no signs of abating, so wishing for a return to sanity is a waste of time. And I will say that the design of the Urus is compelling. But does anyone actually need an SUV with 650HP? No, but the Urus definitely is a Lamborghini, and for those out there who don’t want to take their Huracán out on bad days, it’s dead solid perfect.

And finally, you took a series of furious broadsides from a Motor Trend editor - which you agreed not to publish - over last week’s column. Do you have any further thoughts about that?

Not really. As I have said repeatedly, I loathe, detest and abhor any and all automotive “awards.” I think it’s all a load of unmitigated bullshit full of sound and fury signifying nothing. And anyone who actually believes that there isn’t a revenue component to these car awards is simply living in a dreamland. I don’t care how much the editors scrupulously put together their evaluations and vehemently insist that their integrity is unsullied and untainted by the commercialism of it all; the reality is that the marketing and promotion of those awards adds a substantive revenue dimension for the publication. As I said in “On The Table” last week, at the very least the M/T editors are guilty of woefully piss-poor judgment in canonizing a car that doesn't deserve any of the accolades it has been given. And if any of these self-righteous M/T editors bothered to check out even a sample of the comments out in the Internet, they'd realize that M/T's credibility when it comes to the COTY is at the very least highly suspect, if not out and out dismissed as a perennial revenue grab.

On a final note, the winds of change blowing through this industry are ominous and cold. Seasoned, intelligent executives have convinced themselves that they’re on the cusp of a glittering, limitless future that will bury the traditional auto company model within the decade. Some of these executives are going to find out the hard way that their exuberant prognostications are not going to pan out. And because of that, some of the big-name auto companies that have become part of the American fabric will simply disappear. 

As Bob succinctly said, A Hard Rain’s A-Gonna Fall. 

And that’s the High-Octane Truth for this week.


PMD UNPLUGGED.
by Editor
5 Dec 2017 at 9:53am

By Peter M. DeLorenzo

Detroit. Editor’s Note: Peter churns out column after column, week after week, and produces a body of work every year that is simply staggering when you really think about it. But every once in a while I feel it’s a good idea to find out what’s really on Peter’s mind. Not in column form, but through a series of rapid-fire, real-time questions. So I conducted an email interview for a frenzied hour on Tuesday morning (12/6, 7:30 a.m.) and ready or not, here he is, PMD, in his unpluggedness. –WG

Uwe Ellinghaus announced he is leaving his chief marketing position at Cadillac at the end of the year due to “personal reasons.” What do you think about that?

Multiple research surveys have been conducted over the last decade that indicate that the average tenure of a Chief Marketing Officer, no matter what the industry, lasts anywhere from 24 to 30 months, and then they get fired, resign, get another gig, or simply wander off into the dusk and don’t come back. This is not surprising. The burnout factor is extremely high and depending on the internal battles involved, the job can take a tremendous toll. The chief marketing job at Cadillac involves constant travel to Shanghai, so, even though I haven’t spoken to Uwe since the announcement, I would bet that had something to do with it. Uwe is genuine, and a very bright guy. That Johan de Nysschen decided to transform Cadillac into the spitting image of Audi is a strategic direction that I flat-out disagree with, but I do wish Uwe the best.

What are your thoughts about the headlong rush to autonomous vehicles and the insistence by these auto companies – especially GM – and suppliers that they’re poised to make boatloads of cash in The New Mobility Economy?

I am beyond skeptical. First of all, the efficacy of the technology is suspect, because it’s fraught with fundamental issues and recurring problems. Anyone who thinks that a magic switch will be flipped and that we’ll all be suddenly awash in autonomous cars careening around faithfully doing what they’re supposed to do is simply wishful thinking. As for the companies lining up to be a part of The New Mobility Economy by cranking out cars for the masses to be squired around town in, on paper it all sounds good. The reality will be much less than that.

GM is insistent that they will be in the thick of The New Mobility Economy and that they will win. What do you make of this?

GM has been insistent about a lot of things over the years that haven’t panned out. What’s different about this time? They’re talking a good game, with Mary Barra and Dan "I Am" Ammann getting all puffed up about GM’s bullish future but it all remains to be seen. They are making a calculated shift to this “New Mobility Economy” but what they’re really doing is turning GM into a commodity company. And that may not end well for them.

So, what about the future?

Anyone who thinks that the idea – and the freedom – of personal mobility will give way to a blissful national stupor dominated by robo cars is missing the mark. As I’ve said repeatedly, robo cars will have limited use and applications in urban centers, but beyond that this country is going to be moved by personal vehicles that people acquire of their own volition for decades to come.  

And then what?

I do see a “transportation dichotomy” looming. Some manufacturers will completely throw over to building mass-use autonomous cars, while other manufacturers will retain brands – especially luxury brands – for people who want them, because they will remain profitable. I think in the future people will have a “gray” car, meaning an appliance for when they absolutely need one for mundane duty, but they will also continue to seek out real cars that they actually desire to own. The car companies that squander the legacy of their brands will simply disappear into the fog. Take GM for instance. I can see GM management’s judgment being clouded on the bet that obscene profits will come their way through the promised ride-sharing explosion. But that is a recipe for disaster. The smarter automobile companies will identify brands that they absolutely will not relinquish, and then they will continue to nourish them well into the future. I have zero confidence that Barra and Ammann understand that.

And what about electric vehicles?

They’re coming hard and fast. And once the big players start cranking them out we’re going to see 25-30 percent market penetration in no time. But the fact that this country doesn’t have a cohesive plan for a national charging network is a travesty and simply inexcusable. I do think that hydrogen fuel cell-powered electric vehicles will be the ultimate winning technology.

What do you think of these new monthly vehicle subscriptions?

I think it's an interesting way of retaining brand loyalty, except that the prices as they're being quoted now are simply ridiculous. I will be interested in seeing what Lincoln does, as Lincoln executives have promised that their plan will be much more reasonable. A giant "we'll see."

You’ve been relentless in “Fumes” with a series of columns about The Future of Racing. Where do you think it’s going, ultimately?

Racing is in deep trouble. With the manufacturers chasing their tails on myriad mobility options, racing will continue to be pushed down the list of priorities. As I said a few weeks ago, all racing will become “vintage” racing, as the disconnect between what’s going on in our street vehicles and cars used in competition grows by the day. The only hope in all of this is that certain manufacturers will understand that there will be money to be made with high-performance cars and parts for decades to come, and the manufacturers who continue to play in the personal vehicle market will want to be there. 

What about the two very disparate racing series, Formula E and NASCAR?

Formula E is the flavor of the moment but the series is completely devoid of excitement. This just in: The consistent allure of racing since Day One has been the visceral appeal of the sound and the fury. The woefully benign sound signature of a Formula E machine has all the audio appeal of a slot car, as in Not Good. Next year, when Formula E will run their entire races on one full charge (the competitors change cars half-way through the races now), it may become more interesting, but now? No.

As for NASCAR I have nothing good to say about it. It’s a nostalgia racing play and its appeal is fading faster than the Lions’ hopes of making the playoffs. The declining spiral of NASCAR’s popularity is actually accelerating, yet the powers that be in Daytona Beach steadfastly refuse to do anything about it, and NASCAR’s chief enablers – the participating manufacturers – continue to be dupes of Brian France and his inept posse. NASCAR management’s relentless intransigence combined with the litany of repeated mistakes is killing that form of motorsport. It’s up to the participating manufacturers to extract meaningful changes from NASCAR, and that means – at the very minimum – a 25 percent reduction in that death march of a schedule. I’m not holding my breath. 

What do you really think of the Lamborghini Urus, the car we’re featuring in this week’s “On The Table”?

First of all, Lamborghini is my favorite supercar brand. The fact that the VW Group gets it and has actually nourished this brand to new heights is commendable. The SUV/crossover explosion in the market is a wave that shows no signs of abating, so wishing for a return to sanity is a waste of time. And I will say that the design of the Urus is compelling. But does anyone actually need an SUV with 650HP? No, but the Urus definitely is a Lamborghini, and for those out there who don’t want to take their Huracán out on bad days, it’s dead solid perfect.

And finally, you took a series of furious broadsides from a Motor Trend editor - which you agreed not to publish - over last week’s column. Do you have any further thoughts about that?

Not really. As I have said repeatedly, I loathe, detest and abhor any and all automotive “awards.” I think it’s all a load of unmitigated bullshit full of sound and fury signifying nothing. And anyone who actually believes that there isn’t a revenue component to these car awards is simply living in a dreamland. I don’t care how much the editors scrupulously put together their evaluations and vehemently insist that their integrity is unsullied and untainted by the commercialism of it all; the reality is that the marketing and promotion of those awards adds a substantive revenue dimension for the publication. As I said in “On The Table” last week, at the very least the M/T editors are guilty of woefully piss-poor judgment in canonizing a car that doesn't deserve any of the accolades it has been given. And if any of these self-righteous M/T editors bothered to check out even a sample of the comments out in the Internet, they'd realize that M/T's credibility when it comes to the COTY is at the very least highly suspect, if not out and out dismissed as a perennial revenue grab.

On a final note, the winds of change blowing through this industry are ominous and cold. Seasoned, intelligent executives have convinced themselves that they’re on the cusp of a glittering, limitless future that will bury the traditional auto company model within the decade. Some of these executives are going to find out the hard way that their exuberant prognostications are not going to pan out. And because of that, some of the big-name auto companies that have become part of the American fabric will simply disappear. 

As Bob succinctly said, A Hard Rain’s A-Gonna Fall. 

And that’s the High-Octane Truth for this week.


HUCKSTER?S PARADISE.
by Editor
28 Nov 2017 at 2:11pm

By Peter M. DeLorenzo

Detroit. As I was sitting at my desk contemplating what I was going to write about this week, I had several options. There was the meeting in Washington, D.C., which had Mary Barra, Joe Hinrichs, and His Smugness (aka The Great Sergio) discussing keeping NAFTA intact with America’s First Empty Suit, Mike Pence. I imagine that it went down like a deleted scene from the classic Peter Sellers’ movie Being There, where the Vice President consults the drapes to see which way the wind was blowing before uttering a sound.

Then there are the rumors, which are growing uglier by the minute, about the chaos at the Tesla factory as they wrestle with producing the Model 3. (According to a report in Bloomberg, Tesla is burning through $1 billion per quarter, and it will need another $2 billion by mid-2018, or it will be completely out of money by August.) To say it is not going well is turning out to be the understatement of the year, but then I covered that in last week’s column

Or, there’s the fact that Akio Toyoda is shaking up Toyota management because, as he sees it, it is a matter of “surviving or dying” as the future of the automobile business is completely transformed into what, well, no one actually knows. So, as he put it, it is “now or never” for Toyota to transform itself into something that is going to be around for the foreseeable future. I applaud the “all hands on deck” urgency from Akio, but if no one actually knows where the ship is sailing to, this just in: It might not end well.

So that seemed like a nice range of topics to consider, but then the stories came across the Internet touting Motor Trend’s Car Of The Year awards, and well, everything changed. But before I get into that, a little background is in order.

As most readers know, I despise and detest every frickin’ award perpetrated by the automotive media. It’s a veritable Huckster’s Paradise simply devoid of credibility on even the most basic of levels, and, as most enthusiasts who actually read the “buff” books know, they’re blatant revenue-generating scams masquerading as achievements worthy of gravitas.

It’s a dance that has deep roots in this business, and it all started decades ago at Motor Trend. In my previous life in advertising, I distinctly remember having to muster my creative troops to “pitch” Motor Trend executives on the notion that the 1986 Dodge Lancer (yeah, I know, what a joke) should be considered for their COTY. We spent a full week mounting a creative presentation to show them how Dodge would advertise the award on TV and in print, with all the proper M/T “caliper” award logos properly positioned. This was combined with a media presentation delineating how much Dodge would be spending should the award be bestowed on the Lancer. Thankfully, the car didn’t “win” but I will never forget what an absolute joke it was, a blatantly fraudulent pursuit to line Petersen Publishing’s pockets.

Why did they get away with it? Because the auto companies were so eager for validation, no matter where it originated, that they were perfectly willing to hand over fistfuls of cash so that they could tout their Belchfire 8 as the COTY. The whole thing made you want to take a shower to wash the slime off. Since those halcyon days of blatant quid pro quo, the number of “awards” handed out by the media has exploded exponentially to an almost comical degree, except none of it is the least bit funny as obscure publications and websites come up with more and more dumb-ass awards full of sound and fury signifying absolutely nothing.

Fast forward to today, right this very minute. Now, let me make it very clear that the powers that be at Motor Trend have taken great pains over the years to distance the publication from its bad old days, touting its rigorous standards and due diligence in evaluating vehicles with ruthless objectivity. And I actually thought that maybe, just maybe, the dark days of Motor Trend’s “bought-and-paid-for” past had been relegated to the dustbin of history.

Until now. 

When the news came out that the Motor Trend editors named the Alfa Romeo Giulia the COTY I did a spit take of coffee all over my keyboard. This was followed by a flurry of emails from readers, saying, basically, WTF? And to say that all hell has broken loose since the announcement is an understatement. 

Do you want to know why the overwhelming feeling out there in the autoverse is WTF? It’s because after the auto journalists were flown to a bucolic location to test-drive the Giulia and wined and dined endlessly, the reports began filtering back that the Giulia was the greatest thing since, well, sliced bread. 

But then, a funny thing happened. When the journalists actually got to drive the Giulia back on home soil virtually every road test of the car reported myriad problems, everything from annoying electrical malfunctions to actual pieces falling off the cars. True to form and as is their wont, too many journalists simply glossed over those piddling little details and praised the Italianate BMW to high heaven.  

Yes, we have all seen this sort of syrupy bootlicking by auto journo-types countless times before, and everyone goes away feeling full and happy. The journalists because they get an endless supply of free cars to drive and the manufacturers who are just craving the kind of jump-start boost that a strong review might give them.

So here we are. This is what Motor Trend’s Mark Rechtin said after the announcement: “The Giulia was the only vehicle whose essence enraptured the jury with its charm and unbridled zeal for driving. 

Sure. And the next part of that quote should read, “We completely ignored the fact that the combination of the shockingly piss-poor FCA quality ratings and the historically dismal, etched-in-stone, subpar quality demonstrated over decades by Alfa Romeo might be a negative; not to mention the notoriously woeful resale performance of anything with FCA’s name attached to it. But even so, and after all other factors were considered, the Alfa Romeo Giulia is the Motor Trend Car Of The Year!”

But that’s not even the most amazing part in this debacle. The other cars that were up for M/T’s COTY? The new Honda Accord, which is a completely legit choice and, wait for it, the Tesla Model 3, a car that only a handful of people have even seen let alone driven, and a car that will probably not see the light of day in even the most minuscule of quantities until the second quarter of 2018. (Apparently Motor Trend editors are favorites of Tesla operatives and they’ve put a lot of miles on Model 3 prototypes, so they were actually considering it. But even they must have a shred of self-respect left to know in their guts that if they named the Model 3 as COTY they would be laughed out of the building.)

Then again, that cacophonous sound you hear is the autoverse cracking up at the thought that Motor Trend editors threw rational thinking to the wind, swallowed hard, and actually named the Giulia the COTY with straight faces. And in one fell swoop they managed to set the Way Back Machine to the bad old days of “you scratch my itch and I’ll scratch yours.”

For FCA, this charade is nothing new. Led by its shameless carpetbagging mercenary leader, this kind of blatant bullshit has been its standard operating procedure for so long now that no one even raises an eyebrow anymore. They collectively retired the Scumbags Of The Year (SOTY) trophy years ago. 

As for the powers that be at Motor Trend, this marks a new low, a monument to unmitigated automotive journalistic hack-dom that won’t soon be forgotten.

Congratulations to one and all involved.

And that’s the High-Octane Truth for this week.


AMERICA?S MASTER OF DECEPTION.
by Editor
20 Nov 2017 at 1:13pm

By Peter M. DeLorenzo

Detroit. The script has become predictable. In what is now a staged “love-in” ritual more aligned with old-time tent preachers than anything else, the Supreme Leader of All that is Righteous and Holy in Silicon Valley descends from the mountaintop and bestows his wisdom and visionary brilliance to a frenzied crowd filled with his salivating disciples and adoring acolytes. 

Spewing his usual thought balloons filled with promises and boasts unburdened by reality, St. Elon Musk is The Master, orchestrating The Show to End All Shows, a wondrously self-indulgent and unbridled display of hubris and obfuscation designed to distract all in attendance from the High-Octane Truth about what’s really going on at the automotive cult known as “Tesla.”

Except it was apparent to everyone who still had the ability for rational thought – or at least those who hadn’t had the custom-designed - and fantastic!- Muskian chip embedded in their brains – that Musk was attempting the oldest trick in the con man’s handbook, which is to distract, deny and deter from the real issue at hand. But this was far more egregious than that “pay no attention to that man behind the curtain” scene at the end of The Wizard of Oz; this was out-and-out calculated fraud on the grandest of scales. 

The Bright New Automotive Future as promised by Musk and embodied in the Tesla automobile is a canard that has been a failed enterprise from the very beginning. Ruthlessly unprofitable and racking up debt at a prodigious rate, Elon Musk has conned Wall Street and the holier-than-thous in the greener-than-thou enclaves of The New Enlightened to believe that he – through his Magic Pony, aka Tesla – is the solution to all societal ills and if only the rest of the automotive universe would simply cease and desist the world would be a decidedly much better place, free and unfettered by the dismal dullards who make up the defunct remnants of the failed U.S. automotive industry.

Needless to say, if any current automaker, or automotive supplier, or any corporate entity in America for that matter had conducted itself like Tesla, Wall Street would have moved decisively to bury the offending company while branding it as a criminal affront to the tenets of free enterprise. 

Instead, we have the enablers on Wall Street completely flummoxed by Musk, jacking up the stock while relentlessly praising his “vision,” conveniently ignoring the fact that Tesla builds $100,000 vehicles fraught with consistent, serious quality problems, and that the much-ballyhooed Model 3 – St. Elon’s promise of a mainstream, “affordable” Tesla that would doom Detroit with a resounding thud of certainty – has been an abject failure that is apparently unbuildable at anything approaching the promised $35,000 “loss leader” pricing or the fanciful boast of 500,000 per-year volumes. (Actually, that number is sheer lunacy. The real number will be lucky to reach 20 percent of that total, in three years.)

So, with his company about to go down, and the promise of the Model 3 finally making Tesla a respected automaker lying in pieces on the ground, what does St. Elon, this country’s resident con man, do? He holds a séance for the Muskian Faithful to introduce a Class 8 all-electric semi-truck – without an existing national infrastructure to support it (although Musk insists he will take care of that with a network of “megachargers”) – that will “transform the industry!” because, well, you know, everything Musk touches is transformative, didn’t you get the memo? 

And if that wasn’t enough, Musk plans on introducing a super sports car in 2020, which will be, in Musk’s words, “… the fastest production car ever made - period.” And, Musk being Musk, he just had to add, “The point of doing this is to give a hard-core smackdown to gasoline cars.” I’m not even going to bother regurgitating the details of this car because they’re completely irrelevant.

The net-net of this charade? The truck is a pipe dream, and frankly, other vehicle manufacturers will probably beat Musk to market with electrified trucks of their own. As for the sports car? Few people believe it will ever see the light of day, qualifying as even more of a pipe dream than the truck. At least the truck has a believable premise. The sports car is just more unmitigated bullshit and unbridled swingin’ dick-ism from America’s Master of Deception.

Despite Elon’s latest show, the facts are these: Tesla is a failed enterprise by every conceivable measure. And building a few high-priced machines for The Enlightened Elite does not constitute anything more than a boutique car company with nowhere to go but down. The Model 3 was supposed to fix all of that, but that is just not gonna happen, by any stretch of the imagination. Not even close, in fact.

As I said last week, I predict that Musk, after being horribly embarrassed by the total failure of the Model 3, will finally grow tired of the whole auto thing and wind down Tesla, selling off its technology to whoever will give him the most cash money for it, so he can then focus on his real love – firing off rockets and colonizing Mars.  

Then we’ll all finally have something to be thankful for.

And that’s the High-Octane Truth for this week.


A BRAVE NEW BRAND WORLD.
by Editor
13 Nov 2017 at 5:02pm

By Peter M. DeLorenzo

Detroit. As the articles about the brave new transportation world just around the corner multiply, carefully nuanced discussion about the realities of what’s coming has given way to borderline hysteria. And now, as the snowball of commentaries turns into an avalanche, we’re being inundated with perspectives that cover the gamut from legitimate futurists to self-promoting hacks yearning for validity. As I said last week, I think it’s time to step back and take a deep breath.

But at the same time, to suggest that everything will be the same is to wallow in a level of delusion that is simply hard to fathom, because the changes - though slower than the aggressive, “Ding-dong the automobile is dead!” zealots would like everyone to believe - are coming and they will indeed be dramatic, altering everyday life as we know it. 

And when the automotive world is inexorably altered, the brands that we’ve come to know and believe in with varying degrees of certainty will be severely altered, too, if not disappear outright. And to be honest, at this point, would you miss some of them?

So, let’s take a trip on the road to The Future, and see how your favorite brand – and brands that aren’t even a force yet – fare. 

Acura. Once upon a time this brand allegedly represented Honda’s best thinking, although it rarely lived up to that lofty goal. It turns out that the current NSX would be the last highpoint for the brand, as once Honda merges with General Motors in 2022, Acura will cease to exist. The only thing that will survive from Acura is the “calipers” emblem, which will now grace the front of Honda’s fuel cell and autonomous vehicles.

Apple. Arrogance intact – no big surprise – Apple enters the autonomous ride sharing market with its “Air” automotive brand. The big selling point, according to Apple, is the ghostly, almost translucent bodywork on its vehicles, which allows people to see how hip the owners are.

Alfa Romeo. Before the St. Valentine’s massacre in 2019, when the Hyundai conglomerate buys FCA, lock, stock and espresso machines, Marchionne & Co. will spin off Alfa Romeo in the hopes that it will become a gold mine. Instead, it returns to being even more of a niche of a niche Italian brand than it is now, eventually fading from the American landscape by 2025.

Aston Martin. The British automaker continues to wave its luxury flag high, offering ICE-powered cars for the foreseeable future, while slowly but surely getting its electric/autonomous game face on. After expanding into all forms of luxury, from boats to private jets, Aston will be a survivor.

Audi. Steadfastly clinging to its “four rings” moniker, Audi will remain the mainstream luxury spear-carrier for the VW Group, adjusting its portfolio to 20 percent ICE entries – mainly for driving enthusiasts – while churning out a dizzying array of electric vehicles with autonomous capability when desired. Against all odds, Audi retains its icy German persona, even after being electrified.

Bentley. Abandoning all vestiges of its past, Bentley goes fully electric with autonomous capability for all of its vehicle offerings. Then, when its German overlords realize that no one really cares about electric Bentleys, they do an about-face and start churning out throwback ICE luxury-performance cars in 2026, to much industry-wide acclaim.

BMW. With “The Ultimate Driving Machine” advertising theme long since jettisoned to the dustbin of history, the automobile company once named BMW renames itself Happy Life. Churning out electric and autonomous vehicles to cover every possible market niche, as well as a few ICE-powered cars for the enthusiasts who still remember, Happy Life is acquired by Jaguar Land Rover in 2025, and is put to sleep in 2028 for being inconsequential and superfluous. 

Buick. The division of General Motors remains content to ride the ICE-powered slant on the automobile business, and finds its niche there. Targeting American consumers comfortable with “the way things used to be,” Buick plugs along selling nostalgia to American and Chinese consumers alike, right up until the point when China bans all ICE-powered transportation devices.

Cadillac. After chasing every possible German-esque (aka Audi) automotive quality it could mimic over the years and squandering one of the most hallowed automotive legacies of all time, once Cadillac goes all-in for electric and autonomous cars it finally runs out of people who care about the brand. A hard-core group of True Believers left at GM attempts to resurrect the brand at the end of the next decade, but by then it’s too late. Cadillac dies a miserable, lonely death here in the U.S. – except for the Escalade (see below) – and it will be sold only in China, renamed “Shining Light.”

Chevrolet. The once-proud GM brand is split into two. One half is relegated to building faceless, colorless transportation devices for the masses, with the iconic bowtie emblem jettisoned in favor of a stylized “thumbs-up” logo, signifying its new moniker - “UP.” The other half makes profitable Silverado pickups and SUVS, where you can still find the prominently placed bowtie on the front and back.

Chrysler. The brand dies in the St. Valentine’s Day Massacre of 2019. Hyundai utilizes its minivan architecture for a while, but any knowledge of the brand will soon only be found in automotive history books.

Corvette. The hotbed of GM True Believers young and old, Corvette becomes the performance brand for the corporation. Churning out predominantly ICE-powered machines – from two-seat sports cars to sedans and coupes (Camaro) and medium and large SUVs (including the Escalade) - with hybrid assist, the Corvette brand becomes one of the last bastions for enthusiasts and cool stuff around the world. 

Dodge. After the St. Valentine’s Massacre of 2019 goes down, a group of True Believers remaining in Auburn Hills arranges for financing to buy the Dodge brand from the Hyundai Group and continues to build muscle machines and police cars. Once the police car business dries up due to the fact that police agencies all over the country go fully electric, American Muscle Motors continues to build about 1,000 cars a year until 2030.

Fiat. The failed Italian brand withdraws from the U.S. market all together, existing only for wistful nostalgia-istas back in the old country. 

Ferrari. Thankfully existing as a full-blown ICE-powered high-performance brand with hybrid assist, Ferrari makes a comeback of sorts after Sergio Marchionne’s grand plan to turn Ferrari into an “all things for all people” brand is met with stiff resistance. After the company is removed from Marchionne’s control in 2023, Ferrari blossoms again, even though the least expensive Ferrari will cost $750,000 by then.

Ford. After pursuing every possible way to become a cell phone-like technology player, Ford does a “180” and goes back to building real cars, trucks and SUVs for real people. Driven by its historic ad theme “Opening the Highways to All Mankind,” Ford survives by being the honest American brand.

Genesis. Just about the time that Hyundai actually instills its luxury brand with real mojo, the all-electric movement coupled with the autonomous imperative stops the brand in its tracks. Hyundai rebrands all of its SUVs as “Genesis” and leaves the rest of its offerings branded as Hyundais.

GMC. The other nostalgia brand in the GM portfolio, GMC soldiers on alongside Buick, although the “We Are Professional Grade” and “Like a Pro” marketing chatter is discarded in favor of the simple ad theme, “Faithfully.”

Honda. Once the powers that be at Honda acquiesced to the notion that they just couldn’t survive any longer by going it alone, its shocking merger with GM in 2022 turns out to be a very fruitful partnership indeed. Able to do a deep dive into shared technology, Honda comes up with a glittering array of advanced transportation vehicles that actually bristle with innovation, creative thinking and compelling design. Who knew?

Hyundai. After swallowing FCA whole for $20 billion, Hyundai lets Sergio & Co. keep the “F” and deletes the “C,” while retaining the Jeep and Ram Truck brands. While pouring more billions into both brands, Hyundai discovers that there’s an undeniable softening in the Ram Truck franchise, which is alarming, except that they can’t make enough all-electric Wranglers to keep up with demand, so the net-net of it is all good.

Infiniti. After power hungry Carlos Ghosn insists on making the Nissan-Renault-Mitsubishi alliance the King of the Automotive World, the Infiniti brand becomes a casualty of the Fog of War and falls by the wayside. Consumers stopped caring after Ghosn started badge-engineering Leafs and calling them Infinitis, reminding automotive historians of the dark days of the Cadillac Cimarron.

Jaguar. Flush from making money hand-over-fist for years, the conversion to 80 percent fully electric and 20 percent ICE-powered Jaguars goes smoothly. Because of this seamless transition to its product portfolio and the fact that their products are just so damn good, plus its decision not to cater to the ride-sharing fleets, Jaguar’s viability in the market grows.

Jeep. (see above)

Kia. The Korean brand partner to Hyundai undergoes a tumultuous upheaval as its “all hands on deck” foray into becoming the Korean BMW falls flatter than a skinny pancake. Forced to reassess itself yet again, Kia decides to build transportation for the masses, but since it’s doing what any number of manufacturers are already doing, it gets lost in translation, ceasing to exist by 2028.

Lamborghini. The German-financed Italian supercar company finally eclipses Ferrari as the most desirable exotic automotive brand in the world. Committed to fully-hybrid performance, Lamborghini not only stays true to itself, it undercuts Ferrari at every turn with better design, higher performance and an ultra-cool factor that Ferrari took for granted and walked away from years ago.

Land Rover. After a disastrous foray into trying to become the most luxurious all-electric SUV lineup by 2025, Land Rover operatives shove the pendulum back and decide to go back to offering primarily ICE-powered machines with electric assist. Land Rover enthusiasts are ecstatic.

Lexus. Toyota management decrees that not only will Lexus be fully electric, but Lexus models will be exclusively hydrogen electric fuel cell-powered. To no one’s surprise they pull it off and Lexus not only survives, but thrives.

Lincoln. After chasing their tails while trying to become fully electric, Lincoln operatives go back to hybrid-electric drivetrains and build SUV variations in small, medium and large. Except for the upcoming giant, old school Continental, which will utilize the Navigator architecture to create the most imposing luxury sedan on earth.

Lotus. With an infusion of endless Chinese money, Lotus finally becomes the high-performance sports car player it has always wanted to be, much to Porsche’s chagrin. With slick ICE/hybrid assist drivetrains, Lotus matches Porsche segment by segment with competitive, compelling machines.

Lyft. The Lyft product portfolio revolves around a tall, phone booth-like appliance that it hopes will become the obligatory autonomous ride-sharing device the world over. Except that it’s so ugly that people refuse to be caught dead in them. 

Maserati. Before Marchionne & Co. cash out of FCA, they spin off Maserati, too, thinking that it will become another Ferrari. It doesn’t happen. By 2025 about 3,000 Maserati cars and SUVs will be built per year, but will only be available in Europe.

Mazda. Fully embracing its SKYACTIV moniker, Mazda wrings every last drop of viability and fuel efficiency out of its ICEs, becoming the only automaker in the world to offer a full lineup of them. It remains a cult brand, but even smaller.

McLaren. The British supercar manufacturer that marches to the beat of its own drumming will continue to build exotic hybrid supercars that revel in their non-Italian provenance. Its fans remain committed and enthusiastic. 

Mercedes-Benz. Flailing around chasing every niche that Mercedes operatives can dream up – both real and imagined – the company is finally split in two. The “Vision” brand will cover the gamut of ride-sharing and autonomous appliances the company offers, while “AMG-Mercedes” continues building machines that people actually desire and want to drive.

Microsoft. Running an open-sourced design competition, Microsoft comes up with an autonomous/ride sharing/flying car that resembles George Jetsons' ride. But it doesn’t fly and its default setting leaves operators stranded with a blank screen by the side of the road, waiting to reboot.

Mini. BMW finally runs out of variations on the Mini theme, with the brand going away in 2023.

Mitsubishi. The “Mitsubishi Miracle” never materializes because consumers ultimately couldn’t be bothered to give a shit, even with The Ghosnster calling the shots. End of the road by 2024.

Nissan. Shaking the leaves from the trees, Carlos Ghosn goes all-in for all electric, giving Nissan every piece of new technology that he can get his hands on. Except that all Nissan buyers want to know is how much that Altima is a month.

Porsche. The proud franchise of the VW Group leads with advanced technology, compelling designs, riveting high-performance and a desirability factor that remains sky high. It’s just going to cost a lot more to enjoy it.

Ram Trucks. For some reason the Ram Truck franchise gets lost in translation once the Hyundai Group gets its hands on it. The reason? In typical Hyundai fashion company operatives believe they know better and think they can do it better than it has ever been done before. Because of that the Ram Truck brand will be on the ropes by 2025.

Rolls Royce. Somehow the brand for people who continuously ask, “What’s the point of having fuck you money if you never say fuck you?” soldiers on with advanced technology only when it’s appropriate because after all, people who buy a Rolls Royce aren’t into being constrained by range limitations, or other such tedium.

Subaru. The brand grudgingly transitions to hybrid technology but only on its terms, and only if it can keep its rabid enthusiast base happy.

Tesla. The Grand Poobah his own self, Elon Musk, finally grows tired of the whole auto thing and winds down Tesla, selling off its technology to whoever will give him the most cash money for it. The beginning of the end was the disastrous Model 3 rollout, which craters the company once and for all. Tesla will continue to exist in other areas (batteries, home systems, etc.) but it will be out of the auto business all together by 2023.

Toyota. Akio Toyoda so desperately wants Toyota to not be left at the gate – any gate – that Toyota throws billions upon billions at any technology that even has a wisp of validity. Not exactly a focused strategy, but Toyota has enough cash to chase windmills, and in the end it will be there, one way or the other.

Uber. It will be taken over by Lyft. And nobody cares.

Volvo/Geely. This emerging automotive juggernaut will be equal to the competition in every transportation challenge that it puts its mind to. Behold the next great automotive empire, one that will grow in significance in the New Mobility economy.

VW. The world’s dominant automotive conglomerate – much to ol’ Carlos’s chagrin - VW will continue to dominate in all phases of the transportation/mobility game.

WAYMO. They think they can, they think they can, but will they? Or will they just keep demonstrating their gee-wiz autonomous technology on perfect, sun-baked roads in Arizona?

As you can see, some prominent brands will remain strong and thrive, while others will fade from the scene. Some of those will be dearly lamented, while others will hover somewhere near good riddance.

This Brave New Brand World will hold many surprises yet to come. In the meantime, just consider this fair warning.

And that’s the High-Octane Truth for this week.


THE LINGERING INTERREGNUM.
by Editor
7 Nov 2017 at 10:03am

By Peter M. DeLorenzo

Detroit. Now that Bob Lutz has dropped his dire predictions for the future of the automotive world in Automotive News - a Lutzian Nightmare that projects the total annihilation of the automotive world as we know it, while painting a grim landscape dominated by faceless autonomous transportation modules that come in small, medium and large, a dystopian scenario that will send traditional car companies and luxury brands to the scrap heap of history - maybe it’s time to step back and take a deep breath.

“Maximum Bob” is entitled to express his opinion when it comes to all things automotive - he’s certainly earned that right - but if that’s our final destination at the dawn of this autonomous era, then to paraphrase Samuel Goldwyn’s famous quote, “Ladies and gentlemen, you may include me out.”

I’m frankly tired of the subject at this point in time, because despite the prognostications, we’re talking far into the future. And though some of our readers have expressed irrational exuberance for all things autonomous, salivating at the thought of a Jetson-esque future of effortless transportation unburdened by driver involvement, I decline to get excited about it, because for most of the country, it’s simply not going to happen in our lifetime. 

Think about this: If we maximized the mass transportation systems already in place in this country, and added to them judiciously, the whole autonomy thing would be a sideshow, but because there are massive dollars on the table, and corporate entities both real and imagined are clamoring for their piece of the action, autonomous vehicles are going to be sold as the panacea that society is waiting for and shoved down our collective throats. 

But until that happens, there are a few pressing issues facing this business right now, issues that seem to crop up about every seven or eight years or so. 

Let’s start with subprime financing. This has been a plague in the auto business on and off for years, and in recent times FCA has egregiously and maliciously jump-started the practice to the extent that it has become that company’s standard operating procedure. It is simply unconscionable, but then again, when you consider the carpetbagging mercenaries running the place, it makes perfect sense. It’s just sad that the other manufacturers are being sucked into the swirling maelstrom, trying to keep sales momentum going in a flat market by relaxing their own loan standards. 

And that’s just one aspect of how this business can be its own worst enemy. Why do you think you’re starting to see 72-month financing rearing its ugly head again in countless advertisements? Because it’s good for the consumer? Hardly. Because in about three years it unleashes legions of unhappy consumers into the market hopelessly upside down in their loans. Yet the manufacturers willingly participate in this when their backs are against the wall. I’m not sure if these companies actually think they’re doing consumers a favor by offering these death-march-length loans, or they just simply don’t give a shit. I vote for the latter. 

It’s the manufacturers taking the path of least resistance by taking advantage of consumers, all for the sake of sales momentum. Anyone who believes this industry no longer lives by 30-day sales reports is delusional. Make no mistake, it’s still an essential part of the daily reality of this business, and it still sucks.

But that’s just one aspect of this business that’s annoying. The other grating thing about this business for me right now is that irrational thinking seems to have taken hold when it comes to the relentless proliferation of SUVs and crossovers. Yes, I get it, “that’s what sells,” as I am reminded by top execs in this business almost daily, but still, there seems to be no rhyme or reason associated with it. More is better and no niche will be left unsullied, it seems. The German manufacturers are most guilty of it, but the rest of the world’s manufacturers aren’t far behind.

It all started to go wrong for me when Audi proclaimed that SUVs were “the new sports car.” And it snowballed from there. Auto writers began to get sucked in to this canard too. Now, maybe it’s because most of the vehicles media-types get to drive these days are SUVs, given the production numbers, but still, SUVs and crossovers are in no way, shape or form, “sports cars” – no matter how you squint when you’re looking at them, or how far you go out of your way to suspend reality while driving them. (And yes, that goes for Porsche too.) They’re heavy and have a higher center of gravity; it’s simple physics that cannot be denied. And every time I see a manufacturer claiming its SUV/crossover is the fastest, especially at the Nürburgring Nordschleife, I cringe, because it’s just silly and stupid.

I much prefer a manufacturer touting its SUV/crossover du jour as being good at something that has nothing to do with performance and everything to do with the overall integrity and capability of the vehicle in question. Is that too much to ask? Apparently it is. I applaud Honda with its Accord and Toyota with its Camry for still caring about building quality cars, because when the pendulum swings back – and it will, because it always does – they can sit back and smile.

So, as we wait for the death of the automobile and the industry as we know it, and suffer through this lingering interregnum, I have a message for the True Believers at all of the car companies: Don’t ever forget that you’re in the business of designing, engineering and building the best cars and trucks that you can possibly muster right now and in the foreseeable future. As long as you relentlessly execute to that goal, this industry will continue to not only be relevant and survive, but maybe even thrive. 

Because this just in: the Jetsons, at least until further notice, was just a cartoon.

And that’s the High-Octane Truth for this week.


THE END OF THE BEGINNING.
by Editor
30 Oct 2017 at 2:54pm

By Peter M. DeLorenzo

Detroit. That this business is headed for The Abyss is no secret. The headlong rush into autonomous vehicles, connected vehicles, electrification and the blank check-writing going on in pursuit of all things AI will be the final frontier for this business. 

Let me stress that word “final.” Because it’s clear that we’ve reached the end of the road as to the role the automobile and the auto industry have played and what they have meant to this country in particular for over a century. And the speculation as to where this business is headed covers the broad spectrum between absolute conviction of a promised brave new world of autonomy and electrification that’s allegedly almost upon us, and a massive hedging of bets revolving around the fact that for at least 80 percent of the country “the future” of transportation will pretty much stay the same for years and years to come. 

And as with everything in our world these days, the factions are polarized, and this spectrum is demarcated by a canyon-like divide. This is particularly true for the future transportation zealots, who wholeheartedly believe in the promised brave new world brought upon by the radical transformation of our transportation system of the future. The kumbaya aspects of this for these zealots cannot be overestimated, either. To them it represents freedom from the “tyranny” of the automobile and automobile ownership. No longer chained to monthly payments and insurance costs, the future will be a trip fantastic unburdened by the hoary conceit of what the automobile and its role in our society has been, and it can’t come soon enough. Is there a large measure of irrational exuberance in all of this? Absolutely.

Yes, as I’ve stated before, I will concede that for the most densely populated major urban centers here and around the world and other idyllic enclaves - aka Silicon Valley - the notion of advanced mobility technology for advanced mobility technology’s sake is a major motivator, and a way to demonstrate advanced intelligence, artificial or otherwise. And I can see that the onslaught of these new technologies will have some very specific and valid uses and applications, whether people are ready for them, or not. 

But remember, we’re talking select urban centers here. As for the rest of the country, much of the day-to-day realities of transportation life will largely remain the same, meaning the Internal Combustion Engine will prevail, with the attendant gasoline infrastructure intact. Because the fact of the matter is that the transition to full-on electrification in rural areas will be s-l-o-w, as in decades, and the notion of fully autonomous vehicles outside of the few major urban centers where they will dwell will pretty much be nonexistent. I will admit that this is not what the so-called transportation visionaries want you to hear, but this notion that a switch will get “flipped” and that we’ll all be chauffeured around in shiny happy autonomous cars overnight is a complete fallacy. That hasn't stopped the transportation futurists from doubling down on this notion, and squawking incessantly about it, however.

And that has made the growing dichotomy in this business more real, with the divide between the vision of what could be and the reality of what actually is getting more pronounced by the minute. Just last week the Ford Motor Company announced massive profits from the staggering sales of its industry juggernaut F150 pickup. That means real people buying real trucks are not going away overnight. In fact ICE vehicles are going to be the mainstay of this business for decades to come.

Yet Ford, while churning out the most popular vehicle on the planet is also, along with other car companies, planning for a day when car ownership as we know it becomes obsolete. How does all of this possibly get sorted out, and isn’t there a danger of it all going wrong for some of these industry players? Oh yes, very much so. Frankly, the ugly reality surrounding the ride sharing and autonomous vehicles “big idea” is that it is going to have a much smaller footprint than the future technology zealots would have us believe. 

But in the meantime, this dance of duality is going to take its toll. 

Now that these advanced technologies - electrification, autonomy, connected vehicles, ride sharing, etc. - have been brought forward and put on the table, they’re being dissected, researched, developed, invested in and promoted as the second coming of our transportation future. But devoting billions to what will prove to be a narrow part of the transportation equation is a dangerous game, one fraught with considerable peril. And to see auto companies spending huge amounts of money trying to straddle both sides of the equation is painful to watch, because some of them won’t make it. Mistakes and miscalculations are inevitable, and it will prove to be far easier to succumb to the vagaries of the market because of the wrong bets or the wrong roads taken than it will be to guess right and come out ahead. The car companies that will be most vulnerable going forward will be those that ignore the considerable cash that can be made over the next couple of decades selling traditional cars and trucks, because that’s where the real money will be made. 

Some argue that we are on the precipice of a transformative mobility, one that will free us from the stifling binds of a moribund industry rooted in its past. And that’s all well and good, but this whole impetus is just getting started, and there is a long, long way to go.

In fact, all it really means is that we’ve only reached the end of the beginning, and the next dimension of this business will play out in decades, not years.

And that’s the High-Octane Truth for this week.


GOING NOWHERE GOOD.
by Editor
25 Oct 2017 at 7:46am

By Peter M. DeLorenzo 

Detroit. I love the fact that Wall Street has decided that “Detroit” is worth paying attention to now. It seems that Wall Street now deems that making noise about electric vehicles in the planning stages – which Detroit automakers have done in recent weeks – is tantamount to the Big Bold Idea, something that has been decidedly lacking, according to these self-proclaimed “investors in America.” 

Why is this happening now? Maybe it has something to do with the bloom coming off the Tesla rose, and the realization that St. Elon’s prodigious pronouncements about the Model 3 can’t be transitioned into deliverable cars. After all, the parasitic trolls on Wall Street breathlessly touted Tesla as the "magic bullet" that would transform and revolutionize the "moribund" domestic auto industry, which caused a run-up in the stock that was simply indefensible. And now that regular Jack and Jill investors have participated in the Tesla stock run-up with both feet, Wall Street is saying “never mind” – well, except for a few diehards still insisting that Elon walks on water – and moving on to something else, which is why the notoriously undervalued domestic auto stocks are suddenly hot.

This is ironic for a couple of reasons. First of all, the denizens of Wall Street have dismissed the industrial fabric of this nation - aka the auto industry - because it just wasn't sexy enough or profitable enough for their tastes. As if providing efficient mass transportation for the country was some sort of sin. And this has been a common refrain for decades.

Consistent with that attitude, the huckster-speculators on Wall Street have gone out of their way to ignore the fact that GM developed the Chevrolet Bolt, the all-electric machine that delivers more real world range – and value – right now, long before the Model 3 even becomes available in any notable quantities. But remember, anything to do with Detroit just isn’t sexy enough for Wall Street, because it doesn’t have the glittering facade of Silicon Valley attached to it.

Now? GM stock is up dramatically. What’s different? Have the clouds parted so much that the Wall Street-types can see the light? Not really. Sure, GM promised over 20 new, all-electric vehicles globally by 2023 or thereabouts, but is that all it took for Wall Street to flip the proverbial switch? No, it’s because Wall Street is participating in its specialty, which is betting on the come. (Oh, and the fact that Tesla isn’t delivering much except bad headlines connected with production delays for the Model 3 while still burning cash like a homecoming bonfire.)

This new light shining on Detroit from Wall Street is a double-edged sword, however. On the one hand it’s good to be recognized as one of this country’s technological centers of expertise when it comes to electrification and autonomy. In fact Silicon Valley did it long before anybody on Wall Street even thought about it. And it’s good to see Wall Street investors finally attaching real value to what Detroit does and can do, again. But I’m afraid this newfound attention has its liabilities too. And the news that GM is actively looking to acquire autonomous-based companies is a warning sign. 

One thing that hasn’t changed about Detroit is that if there’s even a shred of good news or prosperity auto executives’ brains get scrambled. The thinking goes like this: If a little bit is good, then a lot more must be exponentially better, even though that’s not necessarily the case. And because of this attitude they run things into the ground with impunity. It’s just the way they roll.

Right now Detroit is all-in with autonomous technologies, ride sharing and The Future. I’ve seen it and I’ve heard it. Some Detroit auto executives – let me stress some – have gone completely off the rails. These people believe that the corporate entities they work for will be tech companies, autonomous companies and digital communication companies; in fact anything but car companies. And in the process they’re forgetting that individual modes of transportation – as in cars and trucks – are going to be the primary component of their business for years and years to come.

This headlong rush into autonomous technologies has other warning signs attached to it too. Detroit car companies’ propensity to throw money around like drunken sailors is well documented. Add to this the fact that Detroit car executives achingly want to be thought of as being hip and on the bleeding edge of things, with the looming shadow of Silicon Valley constantly hovering over them, and it’s a recipe for disaster. As you read this there are legions of undiscovered autonomous geeks working in their mothers’ basements just chomping at the bit to be discovered by some earnest explorers from Detroit loaded with cash and looking for the Next Big Thing. 

And the potential for Detroit auto executives to go nowhere good – and nowhere fast – is high.

And that’s the High-Octane Truth for this week.


BOOM TIMES FOR SELLING AIR.
by Editor
15 Oct 2017 at 3:40pm

By Peter M. DeLorenzo

Detroit. As I wrote last week in “Tesla Burns, Wall Street Fiddles,” this industry is living in a fog of delusional thinking made up of one part hubris and two parts arrogance, with a large dollop of the ever-present unmitigated bullshit thrown in for good measure.

A charlatan like Elon Musk, who has been deified as America’s most notorious blue-sky visionary, but who has also been enabled and empowered by Wall Street to fleece investors by repeatedly "selling air" when it comes to Tesla, is now dancing on the vapors of empty promises made about the Model 3, which is shaping up to be the Silicon Valley resident genius’s Waterloo when it comes to the business of making cars. When the ugly reality of the Model 3 hits home, with prototypes being slapped together by hand and promised volumes turning into a grandiose pipe dream, Tesla stock is going to crater faster than the latest product put on the field by this city’s hapless baseball team.

But even though Musk may be America’s Air Salesman-in-Chief, he is not the only one engaging in misguided hyperbole and fanciful notions about the future direction of this industry, because right here in the Motor City allegedly smart executives are bathing in the promised glow of a connected future for the automobile, which, by their reasoned analysis, will lead to a future of untold riches the likes of which this industry has never experienced before.

And it may be the most egregious case of delusional thinking that this business has ever seen.

These serious-minded executives are operating under the assumption that having the automobile of the future be a center of connectivity will lead to a world of endless possibilities and open up a vast, limitless future of unbridled profitability. Which is all well and good and even noble to a degree, but it also exposes a fundamental naïveté about the world that is excruciatingly painful to observe. And it certainly wouldn’t be the first time.

The auto companies plan on mining reams of data collected so that they can “know” you down to the very last detail and proclivity, and then they plan on using that data so that your car can tell you where the nearest Starbucks is, or where the shoes you’re lusting after are, or where the best local French fries are, or even where your favorite movies are playing in town. And they think they’re going to monetize these and countless other scenarios of desirability until the cows come home, gleaning profits from consumers and businesses alike.

Right now certain manufacturers are feverishly building data collection “farms” and corralling the power of that data so that they can be an integral part of a connected movement that will propel them to what’s certain to be (in their minds) a new, utopian reality. Except that the movement has long been established, and we already have and use our smart devices for all of this so tell me, what is the driving difference that the auto companies will provide, again? No matter how hard the car companies try to usurp the power of our omnipresent smart devices and convince people that their cars are not only the new centers of connectivity but that they’re actually better at it than smart phones, it’s just never going to happen. Ever.

Do you think I’m exaggerating the gravity of this development? Well, you would be wrong. Auto executives are pissing away billions upon billions of dollars on the quixotic notion that if they turn the automobile – autonomous or otherwise – into a rolling hotbed of connectivity, that everything will be right with the world again and that they’ll be serious players to be reckoned with in The Game. In fact they are absolutely convinced of it.

The ugly reality? There is not a chance in hell that it’s going to happen. The automobile industry – domestic or otherwise – has never gotten over the fact that there has been a seismic shift to Silicon Valley when it comes to societal cool. Smart, handheld devices have transformed everything about the culture here and around the world, and even though the automobile companies are still an inexorable part of America’s industrial fabric and a center of technology and manufacturing expertise, the once ever-present automojo that dominated our culture isn’t there anymore. And it’s not coming back either.

So what to do? The automobile companies actually do know how to do some things better than The New Masters of the Universe in Silicon Valley. For instance the auto companies know how to mass produce a wide variety of precision, complicated machines for a bewildering kaleidoscope of applications that transfer people safely, efficiently and in comfort to their destinations. In fact, most in Silicon Valley – except for St. Elon, of course – have acknowledged that fact both publicly and behind the scenes, so what’s wrong with the auto companies concentrating on that? What’s wrong with the auto companies continuing their pursuit of building the best machines possible while exploring new avenues of propulsion and efficiency? Sure, future automobiles should be ready to be connected – at the discretion of consumers – but connectivity in and of itself should never be the raison d’etre of these machines.

Not surprisingly, rational thinking and logic are in short supply in the auto biz of late, and “selling air” has progressed from being a perennial cottage industry in marketing to an all-hands-on-deck pursuit at the highest levels of these companies. And the Siren Song of Connectivity has lured normally smart auto executives into a zombie state, which has caused them to lose all touch with reality. These auto execs actually believe that they can be Masters of the Universe again, when in fact that chapter of the storied history of the automobile was closed over 50 years ago.

The idea that connectivity is the pot of gold at the end of the rainbow for the auto industry is preposterous. It may be boom times for “selling air” – but beyond that there is simply no there there.

And that’s the High-Octane Truth for this week.


TESLA BURNS. WALL STREET FIDDLES.
by Editor
9 Oct 2017 at 6:14pm

By Peter M. DeLorenzo

Detroit. Once in a while the swirling maelstrom starts to swallow this industry whole. It’s always a slow, almost imperceptible buildup, but as it gains speed, things – and people – start to lose their focus, and when that happens, watch out.

The Drill goes something like this: As counteracting forces push and pull, this business starts to reel from a cacophony made up of a particularly virulent strain of self-generated white noise, competing interests and entrenched fiefdoms, hidden agendas, a fog of delusional thinking made up of one part hubris and two parts arrogance, and a large dollop of the ever-present unmitigated bullshit thrown in for good measure.

And it’s a lethal cocktail. Why? Because every day unrealistic expectations are set, promises are made that can’t even remotely be kept and the business twists and turns on the latest pronouncements, rumors and conjecture. What is real gets lost in the shuffle, of course, and reacting instead of acting becomes a cottage industry. And it all contributes to the overall industry din as if it’s part and parcel of standard industry procedure because, well, this just in: It is.

I don’t have to go far to expose the usual suspects who are the hard-core contributors to the din. Let’s take Elon Musk, for instance. Please. Yes, he has cemented his role as this country’s resident blue-sky visionary, but shooting off rockets and talking about tunnels that will never be built is one thing; actually being able to build cars profitably is quite another.

When Musk started beating the drum for the Model 3, I said loudly that everything about the car – including the ridiculous production numbers that Musk promised – would not happen. In fact, it would be a complete disaster. Why? Because the company has demonstrated repeatedly that it a.) can’t make money building and selling cars and b.) can’t build automobiles with even a modicum of consistent quality.

And this week, we found out that the Model 3 was a pipe dream. And a handbuilt pipe dream, to make things worse. The hand-wringing in the media about Tesla missing the production targets for the Model 3 by a mile has been humorous to say the least, as if everyone has been living under a rock for a couple of years and is simply shocked. Not only is Tesla unable to produce the Model 3 with any appreciable volume, the cars being built are being assembled by hand because they’re still trying to figure out prototype parts. Remember when Musk stated emphatically that Tesla would sell 500,000 Model 3s by the end of 2018?

There wasn't even a remote possibility that Musk would reach the super-inflated – and overhyped – production targets for the Model 3. And this just in, he never will. That didn’t stop him from shouting it from the rooftops and pounding it into his adoring acolytes in the media and on Wall Street. It was a portrait of sheer fantasy fueled by Musk’s unbridled delusions of grandeur. 

Charley Grant, in The Wall Street Journal, wrote last week: "Still, Tesla’s persistent inability to forecast its results should raise concerns. Tesla issued the forecast of 1,500 cars just two months ago and missed it by over 80%. Monday’s announcement marked the third time since January that Tesla has cited production issues as a reason for a missed forecast, yet Tesla is no startup—the company has been in business since 2003." 

Raise concerns? That’s one way of putting it. And what about those cheerleaders on Wall Street? You know, the relentless hacks who were single-handedly responsible for the egregious overrun on Tesla stock? They’re now backpedaling faster than an all-pro defensive back, preparing to hide under their desks as the valuation of Tesla – which was criminally unrealistic from the get-go – makes like a giant hubris-filled balloon about to deflate at a furious rate.

But then Wall Street has been wrong about Tesla from the beginning, so I can’t generate any sympathy for those greed merchants now. The run-up in Tesla stock was partially based on Wall Street’s fundamental and unflagging hatred for anything to do with Detroit and this country’s domestic auto industry. These so-called analysts bought everything Elon Musk was spewing hook, line and sinker, figuring Silicon Valley would transform the auto industry and Detroit would finally get its much-deserved comeuppance for oh, I don’t know, building machines that were actually efficient and affordable for a wide spectrum of buyers?

The unrelenting fact about Tesla is that the company has never made dollar one designing, building and selling luxury cars. It’s simply not possible. Tesla lives on energy credits sold to other companies, and it has taken what was once one of the most efficient and high-quality automobile plants in the world (the NUMMI plant formerly owned by Toyota) and turned it into a cesspool of gross inefficiency and poor quality. And there is no way in hell that Tesla can sell a mainstream automobile at the volumes or the price point promised. Tesla will be lucky to build 100,000 Model 3s total by the end of 2019, and trust me, even that will be a stretch. But I can assure you of one thing – the company will not be able to do it profitably. Not even remotely close, in fact.

There is no doubt whatsoever that Musk has contributed to the relentless din in this business. He may be a visionary, but his short attention span doesn’t count for much in an industry based on precision mass production and efficient, disciplined processes. That kind of detailed discipline may bore Musk to death, but by not embracing the task it will mean the death knell for Tesla. Real live automobile companies that know all about mass-producing complicated machines profitably are about to hand Musk’s ass to him. Musk will move on to other pipe dreams, of course, but not before blaming the “recalcitrant” U.S. auto manufacturers, the U.S. government and the “rigged” system for his predicament. When in reality, he’ll only need to take a good long look in his special shape-shifting, ego-enhancing mirror.

As I said last week, Tesla's day in the sun is coming to an end, but it wasn't fun while it lasted.

And what about the complicit denizens of Wall Street? There is simply no excuse for their reprehensible conduct in blowing up the valuation of Tesla beyond all reasonable expectations. And a lot of people are going to get burned because of it, big time. But then again that’s the way the wolves of Wall Street roll. It’s not about the efficacy of the investments or the financial needs of small investors, it’s about their own private little Idaho and don’t you ever forget it.

But guess what? It seems that the home of America’s greed merchants is just getting warmed up. This week, after GM announced that it would offer two new all-electric vehicles based off “learnings” from the Chevrolet Bolt EV in the next eighteen months, and that those vehicles would be the first of at least 20 new all-electric vehicles to be launched by 2023, Wall Street ran up GM’s stock as if it was turning on a “buy now!” light switch.

Wait a minute, that's all it took?  A purposely-vague pronouncement that amounted to a giant “we’re working on it”? And all of a sudden it was okay to like GM now that it was talking about a partial fleet of electric cars that was at least six years away? Maybe GM and Ford should announce flying cars by 2030 if they really want to see their respective stocks skyrocket.
 
It’s clear that Wall Street was completely brainwashed about America’s electric future by Elon Musk, and it’s also clear that they haven’t learned one damn thing on their own about the automobile or the future of transportation. Because if they had, they’d know that all-electric fleets from automakers are a good 20 years away (in fact we may never reach “all-electric” for every conceivable application), and in the meantime they would also understand that the internal combustion engine has a long, long way to go.

A glimpse through the industry kaleidoscope can be flat-out frightening, because what is perceived as real is usually anything but.

But then again, it's not called the swirling maelstrom for nothing.

And that’s the High-Octane Truth for this week.



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