>Great US News about Detroit and Foreign Cars

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What the Big Three Did for UsImage by farlane via Flickr
It seems like the Auto industry is on the verge of revolutionary change. US News has been covering the changing well and Rick Newman’s blog had a great post about foreign cars that the Big Three should copy. Instead of reposting, I picked the most interesting choices for me. I would love to have one an Audi A4 Quaternary or VW GTI. But of course reality and fatherhood always seem to change perspective on things. I also must admit, last year I pushed my wife to test drive a Forester. She loves her Forester PZEV and doesn’t drive her old Xterra very much anymore. If someone at Honda and Subaru got together to make a crossover Forester/Pilot 7 seater, I would be one of the first in live since minivans are truly useless.

10 Cars Detroit Should Copy – Rick Newman (usnews.com)

March 27, 2009 10:26 AM ET | Rick Newman |

I’m not a member of President Obama’s automotive task force, which is overseeing the bailout of General Motors and Chrysler. But in a way, we’re all on the task force, since these two automakers are staying afloat thanks to taxpayer funding that could reach $40 billion or more this year.

So I’m going to give Detroit some advice. Not about labor contracts or debt refinancing or global alliances, but just about cars. It’s true that the quality of American-made cars has improved in recent years. But that’s not enough. If the folks running the Detroit Three—including Ford, which hasn’t asked for a bailout but still might—drove the latest offerings from the competition, they’d realize there are lots of innovations they’re missing out on. (See a slideshow.) Here are some of the top cars from which the Detroit automakers can learn:

Volkswagen Tiguan ($24,300): Like the Fit, this stylish crossover reveals something that the Europeans and Japanese know but Detroit doesn’t: Small vehicles can be just as cool as big ones. Cooler, maybe. The Tiguan is everything people are looking for these days: practical, fun, and modestly sized. It’s a lot sportier than a Saturn Vue or Ford Escape. Instead of skimping with cheap parts and a slapdash interior—criticisms that dog Saturn and Ford—Volkswagen gave the Tiguan upscale touches that help justify a price that can easily crest $30,000 with options. That leaves an opening for Detroit to match the flair, for less.

Audi A4 ($32,700): The most common complaint about Audis is that they’re overpriced—precisely the kind of problem an automaker wants to have. The A4 isn’t bodacious like the Cadillac CTS. It lacks the S-curve chops of the BMW 3 series and the regal parentage of the Mercedes C Class. Yet strong engineering, slick interiors, and edgy design cues like the “eyeliner” LED lights that accentuate the headlamps have made the A4 a top-shelf alternative to more commonplace luxury sedans. Domestic lines like Buick and Lincoln, meanwhile, can only lure customers from the German and Japanese luxury makes by offering lower prices.

Volkswagen GTI ($23,230): It’s not just a muscle car, it’s a poor man’s race car, with taut handling, amped-up brakes, and a sizzling 200-horsepower, turbocharged, four-cylinder engine that might provide more thrill per dollar than any other car on the road. Detroit muscle cars tend to be all about the engine, which is unfortunate, since big V-8s are falling out of favor. The Chevy Cobalt SS is a GTI imitator, but it’s based on a middling economy car and isn’t nearly as refined. Keep trying.

Subaru Forester ($19,995): Car reviewers find this crossover a bit frumpy—but they love to recommend it for their parents, because it’s one of the most practical, unpretentious vehicles you can buy. The high, stodgy roofline provides great visibility whether you’re a tall or short driver. There’s lots of cargo space for the price. You could pay more for a Chevrolet Equinox or Jeep Liberty, but you’d probably end up wondering why. GM and Chrysler should ask themselves the same question.

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>BO tells Chrysler they are just screwed…

>For years Chrysler has been the low man of the Detroit three, soon it will just be the Detroit two. I haven’t been a fan of Chrysler, but I must admit that I did enjoy my time in a Dodge Avenger two weeks ago. A friend of mine and I were chosen to present at a teaching conference in Kalamazoo, MI. To my surprise I received an Avenger for my rental and enjoyed all 1000 miles of the weekend. Of course why not drive: $400  per tix plane ride($850total after tax), $250 for rental car and gas. Duh! 

But now that the domestic car market is in a pseudo panic, I wont be buying American for awhile. Think about it this way, all the 2010 that are being sold were made by workers who don’t know if or when they will be laid off. Ask yourself this, Do you do your best work when you think you are goin to be fired?

W.H.: Chrysler small enough to fail – Eamon Javers – POLITICO.com

It turns out that Chrysler might be just small enough to fail.

In the end, the Obama administration decided to back General Motors — at least for 60 days — but to effectively wash its hands of the much-smaller Chrysler after only 30 days. Barring a last-minute rescue by Italian automaker Fiat, U.S. taxpayers won’t put up another penny to back the company.

For all the times President Barack Obama’s been told he must prop up companies that are “too big to fail” — think Citigroup and AIG — he’s finally found one that he’s decided he can let go, if he has to.

White House sources said Chrysler isn’t viable as a stand-alone company, and without Fiat or more tax dollars, might go into some kind of “structured” bankruptcy. But auto industry analysts say a bankrupt car company isn’t much of a company at all — simply because shoppers don’t want to buy cars from a bankrupt company.

It’s not a step Obama would take lightly, for sure. But politically, it seems a step he’s seriously contemplating in the face of “bailout fatigue” in the heartland — but also Chrysler’s own specific situation.

The ailing automaker, home to such storied American brands as Dodge and Jeep, just isn’t “systemically important” enough — in the new vernacular of bailout-era Washington — to warrant extraordinary measures to save, the administration declared. The hard numbers are these: Chrysler, in 2008 employed 58,000 people. But General Motors employed many more: 252,000.

“They are, of course, much smaller,” explained a senior administration official Sunday night.
See also

* Obama to shake-up GM, Chrysler
* Budget, Britney dim Cantor’s star
* Obama gets personal

If Chrysler should fade, Obama also could argue that the company brought it on itself.

White House sources bashed Chrysler’s plan for recovery, saying that it contained overly optimistic and flat-out unrealistic economic assumptions.

Not only that, these sources said in no uncertain terms, its cars aren’t very good either.

In a conference call with reporters, a senior administration official cited several awards recently presented to General Motors cars, but could think of no industry recognition for Chrysler vehicles. “Chrysler has no cars that are recommended by Consumer Reports,” the official said.

Still, such a move could cause massive pain in Detroit and the Rust Belt states where Obama succeeded in 2008 — hitting hard at those blue-collar families he struggled to win over in the first place. He’s worried enough about the economic displacement to appoint a recovery director for that region alone.

And Obama was careful to give General Motors — a far more iconic American company anyway — a clear escape hatch to survivability in his plans announced Sunday night.

In fact, it’s telling that Obama is not even bothering to fire Chrysler CEO Robert Nardelli, who has been at the company since 2007. That could be a sign that no one at the White House thinks Chrysler will be around long enough for it to matter. General Motors CEO Rick Wagoner, by contrast, was asked to step down, and he will be replaced by the company’s president, Frederick Henderson. The administration official said Wagoner’s departure was orchestrated to give General Motors a “start with a clean sheet of paper.” But Chrysler’s not getting the same chance.

One other factor that likely weighed on the Chrysler decision — though no administration officials said so explicitly — is that Chrysler is owned by the secretive private equity firm Cerberus Capital Management. That firm, which is headed by former Bush administration Treasury Secretary John Snow, is presumably sitting on billions of dollars in cash, yet has declined in recent months to provide additional financing to its own portfolio company. That means either that Cerberus is much poorer than most investors assume, or that it has concluded on its own that Chrysler is a lost cause.

If the big money guys in New York weren’t going to put money into Chrysler — when they own the company — it would be an enormously difficult political sale to convince the American taxpayers that Chrysler was a good investment. Obama, it seems, decided that was a fight he didn’t want to take on at all.

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