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Backseat Driver: As went the British auto industry, so goes Detroit?

Does the demise of the British car industry set an example for Detroit?

The names of the great British marques live on, giving class and credibility to the vehicles that carry them, but the companies have long been shells for foreign carmakers.

In particular, the two biggest companies, Austin and Morris, went out of business as independent companies decades ago.

Rolls-Royce is owned by BMW as is Mini. Bentley is owned by Volkswagen. Jaguar and Landrover are owned by Ford is currently trying to sell. Ford sold Aston Martin for about $1 million to an investment consortium in March.

Indeed, the most viable British carmakers are Ford, which is owned by Ford, and Vauxhall, which is owned by GM with only remaining wholly owned British marques tiny specialty outfits like Morgan and Noble.

Meanwhile, France has Peugeot-Citroen and Renault, Italy has Fiat and Germany, of course, has three premier global marques - BMW, Mercedes-Benz and Volkswagen.

What happened to the British car industry?

It might be easy to blame its demise on the damage caused by WWII. But France, Germany and Italy were all heavily damaged by the war.

No, a more likely culprit can be found in the dreadful labor relations that followed WWII, with rotten management often at loggerheads with intransigent unions.

And herein the lesson for Detroit. The current strike against GM by the United Auto Workers union is merely the latest incident in a long history of ebbing market share to Asian and European manufacturers.

For decades Detroit has been a byword for second-rate design and execution, forced to play catchup with innovations in both design and technology pouring out of Asia.

As for glamor, long gone are Detroit's glory days of the 1950s and 1960s. German and German-owned British marques and high-end Italian marques are the cars people currently drool over.

And now the union contracts that have had Detroit against the financial ropes for years in terms of health and retiree benefit costs are front page news with the first nationwide strike against GM since 1970.

I hope Detroit is not following the dismal post-war history of Britain's auto industry, but the signs are not encouraging.

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 4:48 PM to commentary | Permalink | Comments 0

Trapdoor Opens on Hybrid Credit

Get these tax credits while they last.

In August, Honda sold its 60,000th hybrid vehicle. That means the clock has started ticking on the phase-out, and eventual end, of credits for people who buy a Honda hybrid, according to the New York Times. Hybrid tax credits were part of the Energy Policy Act of 2005.

The 2007 Accord Hybrid qualifies for a $1,300 credit and the Civic Hybrid for $2,100. (Some earlier models still qualify technically for the credit, but it’s only for the vehicle’s original owner; credits are not available for pre-owned cars.)

However, the Energy Policy Act sets a limit on the number of hybrids eligible. Once an automaker sells its 60,000th hybrid (all hybrid models combined), the tax credit begins to fade.

Posted by Peter C. T. Elsworth  at 4:39 PM to Alternative fuels , Honda | Permalink | Comments 0

Trapdoor Opens on Hybrid Credit

Get these tax credits while they last.

In August, Honda sold its 60,000th hybrid vehicle. That means the clock has started ticking on the phase-out, and eventual end, of credits for people who buy a Honda hybrid, according to the New York Times. Hybrid tax credits were part of the Energy Policy Act of 2005.

The 2007 Accord Hybrid qualifies for a $1,300 credit and the Civic Hybrid for $2,100. (Some earlier models still qualify technically for the credit, but it’s only for the vehicle’s original owner; credits are not available for pre-owned cars.)

However, the Energy Policy Act sets a limit on the number of hybrids eligible. Once an automaker sells its 60,000th hybrid (all hybrid models combined), the tax credit begins to fade.

Posted by Peter C. T. Elsworth  at 4:39 PM to Alternative fuels , Honda | Permalink | Comments 0

UPDATE: UAW Pickets go up at GM's plants

In the first national UAW strike since the 1970s, General Motors Corp. workers across the nation walked off the job this morning after negotiations over a new labor contract reached an impasse, according to an update by the Detroit Free Press.

Thousands of UAW members who work for GM walked off the job at 11 a.m. today — 9 days after a 4-year contract was set to expire. The contract had been extended hour by hour, until late last night when the UAW issued the strike deadline.

UAW Ron Gettelfinger said during a noontime press conference that the union will continue to negotiate with GM while workers picket.

Posted by Peter C. T. Elsworth  at 4:32 PM to Auto industry , GM , Unions | Permalink | Comments 0

UAW strike has terrible implications for GM, the UAW, Michigan

The UAW striking General Motors, especially if the walkout lasts more than a few hours, is a dangerous move with all sorts of awful implications for the company and the future of the UAW to say nothing of Michigan's economy, according to the Detroit Free Press' Tom Walsh.

General Motors, while making good progress on its turnaround the past two years, is still losing money in North America and could still suffer enormous damage from a walkout of any length.

And what of the UAW itself, which has been touting its efforts to organize the nonunion U.S. plants of Toyota Motor Corp., other Asian automakers and growing suppliers such as Denso. By striking GM, the union provides fodder to the anti-union campaigns at all those companies, which play upon workers' fears that strike-happy U.S. labor unions will scare companies into closing U.S. plants and cutting jobs en masse.

Meanwhile, Michigan's economy labors under the dual burden of its reliance on the Detroit Three auto companies and their declining market share, exacerbated by the longstanding reputation of Detroit and Michigan as a stronghold of truculent, overpaid and inflexible labor unions.

Forget about all gains in productivity and recent cooperative deals between labor and management to cut health care costs and simplify work rules. The old anti-business, pro-labor image is a hard one to shake. Any nationwide automotive strike, no matter how brief, sends the wrong message to growing companies looking for the best place to invest.

Posted by Peter C. T. Elsworth  at 4:28 PM to Auto industry , Unions | Permalink | Comments 1

Bugatti Resigned to Exclusivity

Sorry, all you wanna-be Bugatti buyers. If you can't come up with the $1.4 million it'd take to park a Veyron in your garage, you'll have to just settle for something more mundane - perhaps a Ferrari F430 or Mercedes-Benz SLR, according to thecarconnection.com

The reborn French marque, the top-line subsidiary of Volkswagen AG, has been struggling to lay out plans for its post-Veyron future, and according to senior managers, one likely move would be to introduce a second model at a slightly more reasonable price.

Make that former managers. With sales of the $1.4-million supercar running at an even more modest pace than the one per week originally forecast, VW ordered a shake-up earlier this year. And now, the new managers have nixed the idea of letting the Bugatti name appear on something that might come in at just a million dollars even.

Posted by Peter C. T. Elsworth  at 4:23 PM to Supercars , VW | Permalink | Comments 0

G.M. Workers Begin Walkout Over Contract Impasse

DETROIT — Members of the United Automobile Workers union walked off the job today at General Motors plants across the country after union leaders and company officials failed to reach an agreement in contentious talks on a new contract, according to the New York Times.

It is the first national strike by the union since 1970. That strike, also against G.M., lasted for two months. The U.A.W. last struck G.M. at two plants in Flint, Mich., in 1998, in a strike that went on for seven weeks.

The union’s president, Ron Gettelfinger, said the union would go back to the bargaining table today. “This is nothing we wanted,” he said. “Nobody wins in a strike.”

Posted by Peter C. T. Elsworth  at 1:20 PM to Auto industry , Unions | Permalink | Comments 0

Bentley Goes on a Diet

Bigger is better, or so goes the old mantra that defines carmakers and Costco shoppers alike. But at least one automaker is thinking twice about its future and betting that big sales growth - and big, heavy, high-powered cars - may not necessarily be the answer, according to thecarconnection.com

Bentley certainly has done its share of growing, in recent years. Not all that long ago, as the poor-relation sibling to Rolls-Royce, it was a nearly forgotten brand that came a hair's breadth away from being abandoned entirely.

Now a subsidiary of the German giant, Volkswagen AG, Bentley is one of the world's most successful luxury marques, with products like the Continental GTC racking up sales of 10,000 a year.

Posted by Peter C. T. Elsworth  at 11:41 AM to Design | Permalink | Comments 0

Playing the Options for Best Returns

HOMEOWNERS have learned that some home improvements pay off handsomely, returning every dollar spent when the time comes to sell.

Similarly, car buyers are finding that optional safety features — stability control systems and side curtain air bags, for instance — can do more than just keep the family safe, according to the New York Times.

Along with options like CD changers and leather upholstery, the extra-cost safety equipment can help owners get a higher price when it is time to sell or trade in the car, according to companies that track resale values.

Posted by Peter C. T. Elsworth  at 11:39 AM to Safety | Permalink | Comments 0

They’re Electric, but Can They Be Fantastic?

Electric cars are the future.

That, at least, is the message automakers are sending to consumers as they trumpet big plans for cars that can bypass the gas pump.

Of course, backers of electric vehicles, or E.V.’s, floated those assurances in the 1970s, ‘80s, and ‘90s, when General Motors released its star-crossed EV1. Today, almost no one drives an electric car.

But with a gallon of premium gas topping $3 on average, and as carmakers and entrepreneurs pour money into the latest generation of electric cars, the prospects appear brighter, according to the New York Times.

Posted by Peter C. T. Elsworth  at 11:36 AM to Environment | Permalink | Comments 1

UAW STRIKES GM: Pickets go up at automakers' plants

UAW members started picketing at Hamtramck, Lansing and Orion and other locations when the union’s 11 a.m. deadline for a new labor agreement with General Motors passed, according to the Detroit Free Press.

At 1:40 a.m. this morning, the UAW officially announced that it had set an 11 a.m. strike deadline, which coincides with scheduled lunch breaks at some plants. The two sides continued to negotiate this morning.

Posted by Peter C. T. Elsworth  at 11:27 AM to GM , Unions | Permalink | Comments 0