Chrome Sweet Chrome

The automotive front-page story in Saturday’s Wall Street Journal was the threat of a fascist dictator to take over the country’s automakers.  No, it wasn’t Barack Obama (more about that later), but rather his friend, Hugo Chavez and fellow book-of-the-month member.  According to the Journal, the Venezuelan dictator ordered his trade minister, Eduardo Saman, to “inspect” the Toyota operation.  The report reads, “If the inspection shows Toyota isn’t producing what he thinks it should and isn’t transferring technology, the government may consider taking over its plant and have a Chinese company operate it.  Chavez is quoted as saying in an address Wednesday, “We’ll take it, we’ll expropriate it, we’ll pay them what it is worth and immediately call in the Chinese.”

In the article, Chavez not only threatens Toyota, but U.S. automakers GM and Chrysler.  What are the sins of the automakers in Venezuela, a country where fuel prices are so subsidized that gasoline sells for about seven cents a gallon?  Chavez wants more “people’s cars” (Hitler called them volks wagen) so that more people can consume more fuel.  Chavez’s popularity, even among the poor in Venezuela is falling, and like any good fascist, he is appealing to direct action.

Wait a minute, you thought Senor Chavez was a “populist” and a “socialist”, surely he can’t be a right wing fascist as well?  Well, you forget your history.  Fascism is a left wing phenomenon.  All fascists are socialists first, but unlike socialism of the more cerebral kind, fascism is socialism stripped of its tweedy pretensions and upper East Side sophistication.  The key characteristic of fascism is the desire for Action!

I’ve been reading Jonah Goldberg’s book “Liberal Fascism”, and he uses scholarly erudition to trace through the rise of what we call fascism in Europe and progressivism in the United States.  Both are rooted in Hegel, Nietzsche, and John Dewey’s Pragmatism.  In their early days in the opening decades of the twentieth century the two were inseparable.  Going through Mr. Goldberg’s description of Woodrow Wilson’s War Socialism, it is hard to distinguish one from the other, and the author is serious when he describes World War I America as the first fascist state in the world.  Tellingly, Woodrow Wilson imprisoned many more Americans than Mussolini ever imprisoned Italians.

The "Cookie Cutter". We may never see its like again.

“Our efforts are based on our passion for saving an iconic brand that we would be honored to shepherd, and the jobs and livelihoods of thousands of loyal Saab employees, suppliers and dealers around the world."
- Victor Muller, Dutch sports car maker Spyker CEO, quoted in the Automotive News.

Saturday’s Wall Street Journal had an above the fold headline, “GM to Shut Saab Unit, Quirky Icon of the Road”.    Halfway through the front page copy, Vanessa Fuhrmans writes, “In the end, Saab proved to have too small a following to attract large scale auto makers looking for scale in a global recession.”  I submit that Saab has plenty of followers, but that they’ve been chased away by over a decade of mismanagement.

We who follow the industry know what a Saab is.  It is front drive, it has quirks, it is aerodynamic (no matter the styling), and it has surprise punches of technology and safety features.  All this fits the brand’s Scandinavian heritage and its role in the Swedish universe.  Some of you may recall my remarks in “Land of Fire and Ice”, where Saab was the summer side of Sweden’s character.  In summer, the Swedes take July off, they eat tons of succulent crayfish, inhale fingerling potatoes, and drink copious quantities of schnapps.  Saab appeals to Swedes’ summer side.  Volvo, on the other hand, is a different animal all together.  Dour, cold and forbidding, like a Swedish winter.  Practical, taciturn, and reliably sober.  I concluded that both were necessary, in that they were the yin to each other’s yang.

The “image” Saab was the mid-seventies Turbo model.  The first mass-produced turbocharged car, replete with mad wheels and an edgy, fun loving disposition.  The three-door hatchback had narrow appeal, to be sure, but had bags of character in a world of automotive boredom.  But it was towards this boredom that GM assiduously drove Saab to be.  No doubt, today’s Saab’s are as competent as anyone else’s car.  But that’s the problem, isn’t it?

Many in Detroit, all right the five or six who’ve e-mailed me, are rejoicing over Toyota’s recent troubles.  The company has had two huge quality problems recently, one with sudden acceleration with cars equipped with electronic throttle control (and floor mats) and another with sudden stalling with Corollas.  Further, despite having an extensive full line up of cars and trucks, they have not improved their U.S. market share.  And their drive to take over the Number One spot in the worldwide industry has been forestalled by, of all people, VW.

The sudden acceleration problem, as the people at Audi know, can seriously depress sales and faith in your product.  Toyota’s supposition of the problem, throttles hanging up in floor mats, at least avoids the Audi solution of blaming customers for the issue.  In the Audi case, the German firm’s placement of the throttle and brake pedals at a distance more comfortable for European drivers may have led to American newbie Audi drivers mistaking one for the other in panic situations.  As Americans have been driving millions of Toyotas for decades, an ergonomic anomaly seems far-fetched.  

While the Japanese firm suspects floor mats, a Los Angeles Times story blames “drive-by-wire” electronic throttle control systems.   If true, this would mean a more fundamental and expensive problem for Toyota.  First off, it would mean a failure in quality.  Not “quality” simply in terms of repairs per thousand, but a breakdown in the engineering of Toyotas.  That is, inadequate development and testing, and (for those in the know) poor failure mode element analysis (FMEA).

Properly speaking, if an electronic throttle fails, what should it do?  The last thing you would want would be for it to stick open.  I suppose the second worst would be for it to close down entirely, even if that would be preferable than headlong uncontrolled acceleration.  Given that Corollas suffer sudden shut off, one wonders (and this is speculative) if they also have drive-by-wire systems, but the “Mark II” version with improved FMEA.

Tell me I’m crazy, but was last week’s firing of Fritz Henderson really necessary?  Here was Fritz, a standout pitcher from his college years at Michigan, who seemed bright, aggressive and the sort of cheerleader GM needed.  The sort of guy who could bring the heat, yet step up to the plate and deliver when he had to, and with enough crises to qualify for Hamlet’s “sea of troubles”, he might or might not take up arms but at least take up a bat and give the troubles a good swat.

So, instead we have the wreckage in the wake of an executive firing.  The clue, of course, that this was an ad hoc action is the fact that there was not a successor named immediately.  In fact, the search for a replacement is expected to take months, prompting board chairman Ed Whitacre to take over the reins as acting CEO.  I hope, though, this doesn’t mean we’ll get any more vanity ads starring the Mr. Whitacre.  I’m sure we’re all glad he’s proud of what GM has to offer, but his stage presence and communication of energy leaves something to be desired.

Many analysts felt that Mr. Henderson had struck out, having failed to close the deal on Saturn, Saab, and now Opel.  You know, the proverbial “three strikes” theory.  Of course, it’s hardly Fritz’s fault that Roger Penske could not line up a supply of vehicles for Saturn from another OEM, and that buyers are not clamoring for idiosyncratic, mismanaged Swedish brands in the midst of a global recession.  Also, the theory breaks down in that it appears that the GM Board itself wanted to preserve Opel for GM at this time.

Why the Board would feel this way is a mystery.  True, some of GM’s small car expertise comes from Opel and Europe.  On the other hand, GM-Daewoo is a viable source of B and C class cars, and the proposed Magna tie-in would not have stopped the flow of Opel engineering as required.  The truly odd bit of GM retaining Opel was the 3 to 4 billion GM was to contribute to Opel’s revival, meaning that the US taxpayer is now supporting German union workers.  And it doesn’t help that Angela Merkel is playing hardball in that the German government has said that their multi-billion package for Opel is at risk now that Mr. Henderson has been dismissed.