Classic Engine Symphony: Nine Classic GT40s Fire Up At Kirkland Concours d’Elegance 2010

Throw out the notion that Concours d’Elegance events are just sedate wine and cheese affairs where the only sounds are crystal glasses clanging and the rubbing of hundred-dollar-bills on each other within thick wallets. At this weekend’s 2010 Kirkland Concours attendees were given unique visual and aural thrills when the class of nine vintage Ford GT-40s all fired-up their engines and revved.

The class included five MK I models, a ’66 MK II and a ’66 MK III, as well as a ’67 427-ci MK IV. And if these weren’t impressive enough, the unique ’65 Prototype Spyder was also there singing.

Watch the video and enjoy.

GM Melts Down Again On Windshield Washer Fluid Heaters And The Resulting Recalls

Today GM issued a second recall for the heated windshield washer fluid system found in Cadillacs and Buicks. In a small number of cases the system was causing fire.

While it is a small feature, it has been one of those little things that made a good luxury car stand above its peers and build model loyalty. Being able to melt away ice is an extremely nice touch…assuming it doesn’t burn your vehicle to the ground.

Yet when it seems that GM is finally pulling its head out of its collective ass, it goes and falls back into old habits. When the system was first recalled for fire dangers two years ago, dealers installed fuses to cut power in the event of a short. Turns out that this was a knee-jerk bandage that nobody had tested fully for efficacy. (This is what I now refer to as a “floor mat fix” for Toyota’s stupid assumption that tossing floor mats into the trunk would solve unintended acceleration problems.)

So now that the fire risk is still there, GM is simply disabling the feature “under warranty” and paying people $100 for the inconvenience. This is so typical of GM and Ford — if something doesn’t work and it might cost time and money to fix, simply take the most immediate and short-term cost-effective path. When Ford recalled Expeditions for faulty cruise controls, the fix was to disable them. After years of listening to thousands of fifth-generation Corvette owners complain about faulty column locks not releasing steering wheels, GM didn’t fix the steering lock, rather they updated the fuel management system to ensure that nobody could actually drive when the column lock jammed. Now many of these Corvette and Expedition owners are former GM and Ford clients.

As for the $100 rebate, one has to wonder if this is less than the price paid by buyers of cars with the feature…and before people start writing in about it being “standard equipment”, the price of all features are simply built into the price — usually with a nice markup.

If GM wants to be treated like a big-boy company again, it needs to stop making childish mistakes. BMW, Audi and Mercedes wouldn’t disable any feature with which it found problems, much less one considered a competitive advantage, so why would GM? Instead of wasting money paying $100 to each owner (although I understand that given the mediocrity of some of the so-equipped models that the number of owners is relatively small), cancel the country club weekend, have the executive assistants hold all calls, and actually FIX THE FREAKING PROBLEM. After that, spend the next week testing it until everyone is dead-ass certain the issue is gone for good.

At the end of the day, if GM is to revolutionize the world with the Volt plug-in hybrid technology (which is slated to eventually power every front-wheel-drive car GM produces,) it needs all the consumer confidence it can get. How can buyers trust a car running on troublesome and fire-prone lithium ion batteries at high voltage if it comes from a company which is either incapable or unwilling to make high school techonolgy-level hot water bottle heater circuits work safely?

The Dangers Of “Connected” Automobiles

Back in November of 2009 I detailed my concerns regarding the safety and security of automobiles as they become more integrated with Web and telephony networks in an article called Forget H1N1 — How Computer Viruses Could Kill Cars And Those In Them In The Near Future. I proposed that good hackers could literally expose and utilize one small hole — be it in a two-way nav, diagnostic or other system to cause dangerous issues with internal engine, braking, handling, or a number of other management systems.

And my story was met with a collective: “yeah, sure.”

Actually, a few of my more tech-based friends found my analysis interesting and very real. It was one of these folks who today pointed me to a study done by University of Washington and University of California San Diego students. Experimental Security Analysis of a Modern Automobile from K. Koscher, A. Czeskis, F. Roesner, S. Patel, T. Kohno, S. Checkoway, D. McCoy, B. Kantor, D. Anderson, H. Shacham, S. Savage was just presented at The IEEE Symposium on Security and Privacy, Oakland, CA, May 16-19, 2010 and goes more in depth and comes to similar conclusions. Indeed they expose just how easy hacking into cars might actually be.

Read the UW/UCSD study for yourself at http://www.autosec.org/pubs/cars-oakland2010.pdf and tell me you still aren’t interested or concerned with the issues of safety and security in modern and future network-connected automobiles.

Geely Agrees To Buy Volvo For $1.8B

Chinese auto manufacturer Geely announced it has reached an agreement to buy Volvo from Ford for $1.8B. Ford has been shopping Volvo around with no takers for so many years now, you’d think they had only been marketing it in the Cars and Trucks For Sale section of Craigslist.

While one might argue that the price paid was way too high for the financially-troubled Swedish brand, but it is certainly a win-win. Ford finally rids itself one of the last of the Jaques Nasser-era money-losing albatrosses, while Geely becomes the first Chinese company to pick up a real internationally-recognized auto brand — and one with a good dealership network capable of selling and providing warranty service for Geely brand cars in the near future. The fact that Volvo is synonymous with safety is also a huge value to Geely — a company based in a country known for constructing buildings without rebar and making food with dangerous chemicals.

The nearly two-billion dollar question, however, is are we looking at another DaimlerChrysler merger where instead of Chrysler quality improving, Mercedes quality (as well as reputation and financial earnings) sunk like an anchor? If the perception of Volvo’s safety or quality (neither of which are as good as actual insurance loss and JD Power reliability surveys indicate) diminishes at all, the value of the merger for Geely goes from moderate to something akin to a Disney Channel teen superstar’s abstinence pledge: nil.

Toyoda Talks to Congress

Mr. Toyoda of Toyota is speaking in a Congressional hearing right now. He did what seemingly no other company head testifying in front of Congress has ever done: accept responsibility and apologize. The Members of the Congressional Committee almost don’t know what to do with themselves, since they’re used to typical corporate legal talk and skirting admissions of guilt.

Most importantly, Toyota committed on record to start sharing problem reporting data collected via dealer networks and consumer telephone lines with the NHTSA, which would make it the first auto company to do so.

Mr. Toyoda read his opening remarks in English, but has used a translator for questions and answers.

Mr. Yoshimi Inaba, COO and head of Toyota NA has been responding to questions in English. He bears a striking physical and vocal similarity to George “Lt. Sulu” Takei.

Both Republicans and Democrats have asked some interesting questions of Toyota representatives, as well as Transportation Secretary Ray LaHood. Dems and GOP can’t agree on much, but they seem to be in agreement that having no real standards for how a car gets recalled isn’t great and gives credence to conspiracy theorists who actually do believe that GM and Ford get off easier than Toyota.

The huge exception is Eleanor Holmes Norton, Representative from D.C., who continues to a) show a complete lack of understanding of cars and the industry, b) keeps hinting that the best course of action is more laws, regluations and requirements (for black boxes, etc…) and c) even demanded to know if her own personal Toyota Camry Hybrid “would EVER be recalled” after complaining that she bought the car reluctantly, because the Americans didn’t produce hybrids. When Mr. Inaba responded that her car is American, being built in America with largely American-sourced parts, EHN responded with “so you’re saying it’s the American’s fault?” She couldn’t understand that Mr. Inaba was simply saying that she bought an American car — more American than many so-called American cars, but EHN couldn’t grasp the concept, instead believing that Mr. Toyoda and Mr. Inaba were skirting blame. Thank god she has no vote!!!

Conspiracy Theorists Unite: Are Toyota’s Problems A Part of The US Government Stimulus Plan?

I’m going to throw a Flintstone wooly mammoth-sized bone to the conspiracy theorists out there. It is possible that Toyota’s recent problems are rooted in a plot by the US government to recoup its investment in GM and spur job growth in other American factories related to domestic auto production?

Simply put, America has a lot riding on the success of GM and Ford. For starters, there’s the bailout cash thrown at GM. (Hey, what’s five or ten billion dollars between friends?) Then there are the hundreds of thousands of jobs directly related to auto production…and millions indirectly linked.

Of course, one cannot discount the ego factor. In a country where American Exceptionalism is a religion (albeit, usually by the most world-average examples of our society), the fact that Toyota was the best selling brand has the flag-waving Camaro-driving masses (who don’t realize the all-American Camaro has long been built in Canada) close to total cardiac arrest.

So one must ask: what is the easiest way to stimulate GM and Ford’s sales, creating more jobs to meet higher demand, and allowing GM to repay its loans from the government? The answer seems to be: take out number one Toyota.

“Attack your competitor’s largest strength” is right from the Karl Rove playbook. In Toyota’s case, its sales are based on a long-standing reputation for quality. Unlike Ford and GM, which can only advertise their own individual wins in quality surveys, good old Uncle Sam can annihilate a reputation with one good press conference. After all, the regulators at the National Highway Traffic Safety Administration can put into doubt everything you’ve believed about a vehicle and the company that produced it by issuing a well publicized recall with some additional words about a possible cover-up.

Over 400 million vehicles have been the subject of automotive recalls since 1966. That’s an average of almost 9.1 million recalled vehicles every single year. There are about four million Toyotas involved in recalls right now, and that number could climb if the Corolla is recalled. Keep in mind, though, that over 14 million Fords were recalled for faulty cruise control units that could literally catch fire with the vehicle inactive in a garage and burn down a house while the owners slept.

While the Ford recall (as well as the Ford Explorer/Firestone tire one) were top news for a while, neither had the government calling into question the automaker’s business practices in a similar way to the current Toyota recall. Indeed, for a fairly limited number of reported issues, the company’s best-selling products have been tainted. Basically, the only Toyotas of mass interest not on the list are the Sienna minivan and the company’s Tundra and Tacoma trucks.

Kill number one, make Ford and GM leaders again and promote American financial interest. Sounds plausible, huh?

Actually, conspiracy theorists and anti-government types — maybe it’s just that Toyota has been producing cut-cornered products for years and it has taken America decades to cut through the marketing to realize that Toyota is really no better than Ford, GM, Chrysler, Honda, Hyundai, or Nissan. Tell people enough times that something is high quality, and even when it isn’t working right, the owners will ignore the issue and maintain the illusion. Perception is exactly how JD Powers surveys for initial and long-term vehicle quality can time-and-time-again find huge differences between nearly identical badge-engineered vehicles from different brands.

At least Toyota can rest peacefully knowing that whether its quality issues are real or a government conspiracy, people have been buying Land Rovers and VWs for over a half-century, and they’ve always been made like crap.

Toyota’s Uphill Battle — With Stuck Throttle And No Brakes

In the last week or so it seems I get more questions about Toyota from readers than I do requests for sweets from my children. Whether it’s about the sticking accelerator recall, the Prius braking issue, the five-speed automatic transmission software maladies, or the effect of all these on Toyota’s long-term health, there is no lack of interest out there in getting good answers.

There are two big factors at play that the evening news and even automotive magazines don’t want to talk about (and, of course, I will). The first has something to do with the demographics and psychographics of Toyota and Lexus buyers — they aren’t, on average, “car people”. Indeed, I’ve long referred to Toyotas and Lexus vehicles as “cars for people who don’t like cars”. Obviously this is a gross generalization, as I’m a die-hard car guy and when I’m not piloting something stupid like a Corvette, Ferrari, Triumph, or old truck, I’m driving my kids to school in an ’06 Avalon. The prime market for Toyota, however, has been people not looking for a vehicle for fun or to fulfill an ego need, but rather as a safe, reliable, ergonomic appliance to get them reliably and economically from point A to point B.

Consequently, Toyota and Lexus owners generally don’t have a good understanding of automotive technology and/or history from which to draw conclusions regarding the current issues. While the Toyota (and especially Lexus) ownership group compares well to competitors’ in terms of academic and professional success, these are not people who are going to research issues within context of the industry. They just want to know a) if there is a problem that affects them, b) if it does when it can be fixed, and c) if the car is safe to drive until said solution can be implemented. If any part of the explanation isn’t clear…which it has not been, then the problem is compounded.

This is just half of Toyota’s dire big picture situation, though.

The other factor is that Toyota and Lexus have reached leadership positions in their respective classes based almost entirely on the image of quality. People haven’t been buying Camrys, Siennnas, ES350s, or Highlanders for their speed, luxury, handling, or sex appeal. Hell, even the Lexus LS series has been developed as a reliable, lower-cost alternative to Mercedes S-Class (with derivative styling, to boot).

So in the absence of this core value proposition, consumers have no reason to buy a Toyota or Lexus.

Talking heads have put blame all over the place — from design failure on the part of the OEM pedal supplier to an internal management structure overwhelmed by far too rapid market growth. Based on my traditional business education and years in management, I’d call these knee-jerk catch-all diagnoses (like “spastic colon” or “irritable bowel”) rather than meaningful analysis of strategic and tactical failures.

There are tremendous challenges for Toyota going forward. First, they have to identify what is actually causing all of the accelerator and braking issues in its cars, then they have to figure out how to actually fix millions of cars quickly.

Next they have to identify the source of the product management issues that led to the failures. In modern times quality is defined as the failure rate engineered into any given component, because while it is possible to make anything fail-safe, the cost to do so is unreasonable from a business case standpoint. That said, an analysis needs to be done for each failure of how the culprit system was engineered and if the malfunction can find a causal or associative relationship with a specific benefit like increased profit, better mpg, use of a preferred business supplier.

Most importantly, Toyota has to fix the self-inflicted damage done to its reputation…and it better start really quickly. Obviously this begins with solving these issues in all of its vehicles, but it also needs to include the shortcomings in its problem-reporting process, which according to Toyota Media Manager Bill Kwong completely and entirely disregards third-party collected information, even if it is a consumer complaint site with thousands of confirmed, actionable reports. Toyota will only consider and act on information reported from dealers via district managers and from the miniscule percentage of owners who use the toll-free Toyota Customer Service hotline.

Finally, what nobody else has brought up (so allow me to do so), is that Toyota must then move beyond marketing one-trick ponies. One can’t sell only on the basis of quality if quality is in doubt. As for the two cars in Toyota’s lineup that aren’t marketed based on quality alone, the Corolla and Prius: I have two words: Chevy Volt. You can’t sell only on gas mileage once these models look like Bugatti Veyrons at wide-open-throttle compared to the Chevy Volt’s 200-mpg.

At the end of the day, the moment the US Secretary of Transportation went on record saying Toyota, with its perceived primary value proposition of quality, not only now suffers severe safety issues across the majority of its product offerings, but also systematically worked to hide the problem from regulators and avoid recalls…well, this is a disaster of Andy Dick at Mardi Gras proportions. Excuses and blocking the truth is something Americans expect from Ford (Pinto and Mustang gas tanks, Explorer rollover issues, fire-starting cruise controls, Crown Vicky stuck accelerators) and GM (side-saddle gas tanks, bad steering and motor mounts in the early 1970s), but not from Toyota.

Actually, it isn’t a disaster for everyone. Ford and GM sales are up. And come to think of it, Audi has to be happy that “unintended acceleration” will no longer be associated only with its brand.

And just like Audi, Toyota can expect to spend millions of dollars and decades of time to repair the damage to its reputation. Might we suggest taking a page from Audi’s book and engineer in performance, design, ergonomics, image, luxury…and also quality. If there’s one thing that Land Rover and Fiat have proven time and time again, people will buy the least reliable vehicles on the market, provided said vehicle offers more to the driver than the perceived or actual quality of its parts.

News Sources: Toyota Only Acted After Pressure From US Regulators To Stop Sales Of Vehicles Affected By Sticking Pedals

We all thought that Toyota coming to America would show the domestic Big Three how to improve quality. Instead, it seems that Toyota has again taken the “when in Rome” approach.

It will take some time for the analysts to crunch the numbers, but Toyota’s announcement yesterday that it has halted sales of eight models due to the sticky accelerator pedal issue will have a mind-boggling economic effect. And if there ever was any question if things could get worse for the auto industry in 2010, this at least answers it for Toyota and independent Toyota dealers.

Here at The Four Wheel Drift (where we own an affected Toyota Avalon) we have written plenty of stories regarding Toyota’s recent quality woes. Specifically, the company had issues with five-speed automatic transmissions in its V6-powered front-wheel-drive Toyota and Lexus brand vehicles. The transmission problem was exacerbated by a trouble reporting process designed to keep complaints from ever being registered by Toyota corporate systems, which in turn angered customers, left dealers hanging and kept engineers from knowing the widespread nature of the issue. Even though there was an inherent risk of people getting killed by the transmission problem wasn’t nearly great enough to get Toyota to do more than a quiet TSB.

Toyota seemed to take the same approach with the sticking throttle. Reports today show that despite the new tremendous perceived danger to life and property the company was again not acting quickly or effectively. Allegedly it took a tremendous amount of pressure by US regulators to get Toyota off their kings-of-quality laurels to immediately start the process of containing and fixing this situation.

The issue that stopped production lines yesterday is indeed as serious as a Cannes Film Festival foreign language drama. “Mechanical” problems are causing accelerator pedals to either stick or return slowly from depressed to idle positions. Whether or not cars have had pedals stick in the wide-open-throttle position is not clear. Given the average Toyota owner demographics, it’s unlikely that many people will have muscle-memory reactions to shift to neutral or use their feet to lift the pedal. What we all do know is that the last thing any company wants is one of its vehicles plowing into people because of an inherent design flaw.

Toyota uses a drive-by-wire system. Instead of a cable connecting the pedal to the actual throttle in the engine bay, there is simply a throttle position sensor connected via wires from the pedal. So unlike days of old when a corroded throttle cable stuck or throttle-return spring broke, Toyota has fewer moving parts to address. At the end of the day one has to accept that Toyota probably already knows the cause…

…But like any huge corporation, Toyota needs to find the lowest cost fix. Let’s just hope the answer is something more than WD40 every 3 months or 3,000 miles. As GM and Ford have found out in the past, the company’s image can take a near permanent hit with one leaked cost-benefit analysis that concludes wrongful-death settlements are better for the company than a comprehensive fix to new and existing vehicles.

An Anti-Union Guy Says: Don’t Blame the UAW

I’ll start by making it crystal clear: I don’t like unions. Most unions, in my humble opinion, penalize the best workers and deliver unjustified compensation to the worst. As a guy who loves to negotiate on my own, I’d only join a union as a last-resort.

That being said, America’s infatuation with demonizing the United Auto Workers is DEAD WRONG. Almost everything you’ve heard or believe about the UAW is not accurate, because the UAW is different from most unions.

Myth number one is the UAW, like all unions, exists only because it makes the leaders rich off of union dues. Guess what? Ron Gettelfinger, the President of the UAW, made $156,000 in 2007 and just under $160,000 in 2008. It might sound like a lot of money, but consider that this most powerful union boss in the world makes less than almost any regional union chief. For instance, the Service Employees International Union (SEIU) Local 32B-32J chapter in New York was paying its president $530,000 each year.

Even better, a person with no experience and no education can get a base of $80,000 if he is lucky enough to get a Longshoreman’s union entry-level job.

In comparison, Rick Wagoner, former President of GM, had a 2008 salary of $2.2 million. Bob Lutz, GM’s former high-profile VP, saw $1.56 million in 2008. Gettelfinger, the demonized head of this so-called greedy union in actuality makes less money than the average GM low-level department director.

Myth number two is that the UAW has no interest in the survivability of the auto companies and has never been interested in anything other than better pay and benefits. This is totally untrue. Indeed, in 1949, UAW President Walter Reuther oversaw the publication of a position paper called “A Small Car Named Desire”, which urged The Big Three to start producing smaller, more fuel efficient cars, because that is exactly what the UAW perceived the American public would want. The Big Three’s top brass told Reuther to stick to negotiating contracts, rather than tell them how to run their businesses.

Throughout the 1960s and 1970s, the UAW was regulated by the Big Three to being concerned only about protecting members’ benefits. By the late 1970s, the UAW started to see the foreign competition as a legitimate threat to the US auto industry, even when Big Three SWAT (strengths, weaknesses, opportunities, and threats) analyses focused solely on one another in each segment.

The UAW urged foreign automakers to build their cars here in the USA. Unfortunately for them, right-to-work states did better jobs of lobbying, so most foreign-owned shops became non-union.

Interestingly, though, the Japanese-owned factories seemed to offer fair compensation for work. So what does that say about the Big Three? To me it says they were…and still are greedy, shortsighted, too inbred, and insulated to see that it was their own damn fault, not the UAW’s, for the domestic auto industry’s collapse.

If They Can’t Sell The Cars, How Do They Expect To Sell The Car Companies?

The Big Three CEOs are back in front of Congress to again ask for money. This time, the boys left their jets at home and drove in cars. They also brought the plans for returning to profitability that Members asked them to supply.

Pluck me bald and call me Telly, but what the executives are shoveling doesn’t seem to be nearly enough fertilizer to make this garden grow again.

Central in plans from each company is the sale of at least one brand. Ford wants to sell Volvo, GM admits Saturn, Saab and Hummer are on the block, and Chrysler is waving Jeep in the wind. Now I’m not an automotive executive…and I didn’t even stay at a Holiday Inn Express last night, but I’d like someone to explain to me how if none of these brands are successfully selling individual cars to consumers, then how do the Big Three execs expect to sell the freaking brands themselves?

Let’s break it down: Volvo is on track to sell roughly 72,000 cars. Ford sold-off Volvo trucks many years ago, so the value of the brand is based only on consumer vehicles. Over at the General’s place, Hummer is on pace for just under 45,000 vehicles, Saab at 90,000 and Saturn at 230,000 cars. Jeep is the largest contributor of any of the brands, looking to deliver in 2008 for Chrysler just under a half-million vehicles.

Nobody in their right mind will buy Hummer. Its place in a 2015 35 mpg CAFE America is non-existent. Some Arab prince might buy it on a whim, but no automaker wants that brand hanging on its CAFE results like an anchor.

Saturn is like Mazda, just not as sporty. It is possible that a BMW or Porsche could buy them for their mpg and stand-alone dealership network. Don’t expect them to pay too much.

Saab and Volvo might as well look to the Korea, Malaysia or India for a buyer. No German, French or Italian company will touch these quirky Swedes.

Jeep is a more interesting play, because it’s a respected niche brand without the horrible CAFE strain of Hummer. Some company will make a play for Jeep.

In the near term, though, selling these companies creates costs for the Big Three. GM, Ford and Chrysler have traditionally spent way too much money in concessions to dealers after selling or closing brands. Also, don’t expect any companies to pay much for these brands when it is well known that a) the brands are for sale and b) nobody else is bidding on them. Despite skipping all those economics lectures in college, I do remember the whole supply and demand concept.

Obviously there is much, much, much more the Big Three’s plans for profitability than just selling these brands. Labor union concessions, plant closings, pay reductions, job cuts, supplier contract renegotiations, and dealer closings (why is it when you ask about dealer quality, Big Three executives always are quick to point out that dealers are independent, and it’s impossible to better control service and sales capabilities, but when dealers are a part of larger plan for money, they are no longer seen as rogue entities?) are all part of the deal.

Maybe the Big Three will offer “Zero Down, Zero Percent Financing”, “Factory-to-Dealer Rebates” and “Employee Pricing” for any company interested in buying Saturn, Saab, Hummer, Jeep, or Volvo?

With now $34 billion in bailout (call it loans, investment, or whatever – it’s a bailout) requested, and now talks about “government managed restructuring” which sounds way too much like British Leyland version 2008, Americans should be screaming to let the companies sink or swim on their own. If it really is as easy to sell brands, lower labor and supplier costs, and most importantly – create new cars that people will actually buy over the competition as the Big Three claim it will be with the funds Congress provides, then certainly these companies should be able to do it without getting involved with inefficient government red tape that will come with any bailout money.