By Steve Parker Tornante
AS THIS IS WRITTEN, NO DECISION HAD been reached, at least publicly, about the Detroit Three’s request for a $50 billion loan or loan guarantee from, well, from us. Sen. Carl Levin (D-MI) was at both recent political conventions, as were the heads of the Detroit Three, aggressively pushing this plan.
Remember Sen. Everett Dirksen’s line about cash? “A billion here and a billion there, and pretty soon you’re talking about some real money.” Yes, this is real money.
As just one example: Detroit has to get very busy, very quickly, in developing their own versions of the new “clean diesels.” Volkswagen, Mercedes-Benz, Audi and other European car makers are bringing them to the U.S.; their emissions so clean they’ve been approved by the California Air Resources Board, with the toughest standards in the country. Audi and VW will use the “TDI” designation for their new clean diesels; Mercedes calls their versions “BlueTec.”
Asian manufacturers are hopping on the bandwagon; the 2009 Nissan Maxima is available with a diesel engine option.
But clean diesels are just one example of where Detroit must play catch-up.
GM’s Chevrolet and Saturn have gas/electric hybrids in their showrooms, and more are planned. GM’s crossover Equinox hydrogen-fueled fuel cell electric vehicle is being tested across the country, as is Honda’s similarly-powered FCX Clarity sedan.
If the money allows GM to bring their plug-in hybrid Volt concept car to market late in 2010, that could draw many import-only buyers back to The General. Volt has a small on-board gasoline engine (which GM craftily calls a “generator”) which charges Volt’s batteries so its wheels, turned by electric motors, stay turning. GM says Volt’s batteries can be recharged overnight via any standard 110-volt outlet.
Compared to Ford and Chrysler, though, GM might as well be “Buck Rogers in the 25th Century.” In the 2008 Ford line-up, there is one gas/electric hybrid, found in their Escape SUV. Their all-new Flex crossover is a wonderful styling exercise, but stuck with a big V6 engine, it’s no mileage champ. Ford says they’ll bring the Euro version of their Focus to the states. It sports features like Volvo’s five-cylinder 225-horsepower engine and a six-speed double-clutch transmission to rival VW’s Direct Shift Gearbox (DSG), which can improve mileage and performance.
Robert Nardelli, fired by his own board of directors at Home Depot this past January, now runs privately-owned Chrysler (yes, I, too, don’t quite understand). Guesting on the Charlie Rose program on PBS last week, Nardelli discouraged me. After discussing their oxymoronic “Hemi Hybrids,” Rose asked Nardelli if Chrysler will have anything like the Chevrolet Volt. Nardelli smiled knowingly and said, to paraphrase, “Oh, yeah, just wait’ll next year!”
That’s what we’ve heard from Detroit executives for 30 years, since the first oil embargos and gasoline shortages in the early 1970s. Detroit should have started planning for now … then. Other car companies did, didn’t they?
All three are in big trouble in America, still their most-important market.
If our government loans money directly to the car-makers, they’ll pay it back at the lowest possible interest rates. If the monies are loan guarantees, then banks loan the money, and the government guarantees pay-back if any Detroit car-maker defaults.
Some have suggested that, as one of many conditions of these loans, the top management of all three firms must be replaced, and with no “golden parachutes” allowed.
GM, Ford and Chrysler are now run by three men with little or no experience in developing, creating, styling, engineering, building or marketing cars and trucks. GM’s Rick Wagoner has been a “bean-counter” there for decades; Ford’s Alan Mulally most-recently headed Boeing, and Chrysler’s Nardelli was an executive at General Electric and Home Depot.
As a good friend once opined, about a similar situation, “These guys wouldn’t know a good car if they got run over by one.”
Will this money save the Detroit Three from self-imposed implosion? “Who knows?” is the only honest answer. All I do know is that the millions of American men and women who would join the ranks of the unemployed if any of the Detroit Three utterly fail should never be punished for the shortsightedness and, arguably, the stupidity of the few people who run them.
STEVE PARKER has covered the world’s auto industry for over 35 years. He’s a two-time Emmy Award-winner who reported on cars for almost a decade at both KTLA/TV5 and KCBS/TV2. He is a consultant to the NBC-TV show Whipnotic and the show’s companion website, www.Whipnotic.com. He created, writes and moderates the only all-automotive blog on The Huffington Post at www.huffingtonpost.com/steve-parker. Contact Steve through his own automotive issues Web site at www.SteveParker.com.
Originally published in the Santa Monica Daily Press print edition on September 16, 2008. Read the original PDF.