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Episode 1016 – Why Toyota is Suing Mexico, BorgWarner Gets New CEO, Mercedes Ener-G

November 16th, 2012 at 11:47am

Runtime: 8:55

An inside source explains the full story on why Toyota and others are suing Mexico over fuel regulations. The turbocharger and dual clutch manufacturer BorgWarner is getting a new CEO. Mercedes-Benz takes the wraps off a futuristic SUV concept for the LA Auto Show. All that and more, plus on Autoline This Week, Csaba Csere and Jim Hall join John McElroy to discuss which EVs are winners and which are destined for the dustbin of history.

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TGIF — Thank God It’s Friday — and that means it’s also TFAAP — Time For Another Autoline Poll! But, hold your horses because that’s coming up later in the show. Plus we’ll have a preview of Autoline This Week with my guests Csaba Csere and Jim Hall. Now, let’s sally forth.

WHY TOYOTA IS SUING MEXICO
Yesterday we reported that Toyota is suing the Mexican government to prevent it from adopting US fuel economy standards. Last night I got a call from a very highly placed industry source to give me the background to this story. Two years ago Mexico hosted a global conference on climate change. Then Mexican president Felipe Calderon, promising to be the greenest president ever to serve Mexico, swore the country would adopt U.S. fuel economy standards. But the U.S. standards contain lots of flexibility, some would say loopholes, that give automakers credits for flex fuel cars, electric cars, and other adjustments. The Mexican standard does not provide any flexibility, it simply demands that automakers achieve 35 miles per gallon by 2016. Automakers are up in arms about it and that’s why Toyota, Chrysler and others are suing the government to prevent that standard from being adopted.

BORGWARNER GETS NEW CEO
BorgWarner, the supplier company that plays such a significant role in the turbocharger and dual clutch transmission business, named a new CEO yesterday. James Verrier will take over for Tim Manganello on January 1st. Anyone who follows the Indianapolis 500 will remember seeing Manganello handing out the BorgWarner trophy to the winner of the race, which the company has been doing since 1936.

CHEAPER IS BETTER
We’ve all heard the anecdotes about people driving out of their way for cheaper gas but now we have the scientific proof. This is one of the early findings from research being done by the University of Michigan and the Department of Transportation. They are tracking 3,000 cars equipped with vehicle-to-vehicle communication in effort to improve traffic flow and reduce traffic fatalities. But researchers say they’ve gathered more data than they expected including the proof that people really do drive out of their way to get cheaper gas.

SOUNDS LIKE AN ENERGY DRINK
Mercedes-Benz just revealed a futuristic design concept called the Ener-G-Force. It was developed for the Los Angeles Design Challenge which was holding a contest for what a police car would look like in 2025. But Mercedes took it a step further and designed a civilian version and even built a full-size scale model. And since it’s for the future, the Ener-G-Force is all about being green. Recycled water is stored in tanks on the roof, which is transferred to something called a “hydro-tech converter,” where it’s converted into hydrogen to operate fuel cells. The electricity from this is kept in storage units that are accessible in the side skirts. And four wheel-hub motors are what make the Ener-G-Force move.

OK, youse guys. Time for our Autoline Poll, and for this we’re going back to a story we reported earlier in the week. On Monday we told you that Volkswagen’s 75-year-old Ferdinand Piech will remain chairman at least until 2016, and he could be sticking around until the ripe age of 82. So, here’s the question: how old is too old to run a car company? Should the lifers be broomed out to make room for new blood, or do you say “if it ain’t broke, don’t fix it”? Tell us what you think by clicking the poll link below today’s show. As usual, we’ll reveal the final tally on Monday’s Autoline Daily. Now get off my lawn, unless you want to hear how I used to walk to school uphill, in the snow, both ways!

Coming up next, we have got a fantastic review of almost all the electric cars out there and what their prospects are for the future.

The topic for Autoline This Week is all about electric cars, just about all of them. I invited Jim Hall from 2953 Analytics, and Csabe Csere, formerly the editor of Car and Driver to tell me about their test drives in those cars, and how they think the EV business is going to go. In the following clip I asked them to give me their impressions of the Tesla Model S, which just won Motor Trend’s Car of the Year award earlier this week.

Csaba and Jim know so much and are so good at explaining their points of view that you’ve got to watch this show. It really is that good. I promise you that you’ll learn a lot.

Anyway, that wraps up another week of following one of the funnest industry’s in the world. Thanks for watching, we’ll see you on Monday.

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42 Comments to “Episode 1016 – Why Toyota is Suing Mexico, BorgWarner Gets New CEO, Mercedes Ener-G”

  1. Kate McLeod Says:

    Not sure why Toyota would be up in arms about 35 MPG fuel economy. They have Scion, Prius, good fuel economy on their cars and no trucks to speak of. I get that there are no loopholes but I don’t understand Toyota being out in front about this. Your thought? Thx,

  2. ColoradoKid Says:

    Mercedes Benz Ener-G-Force

    Take one part Toyota FJ Cruiser
    Add two parts Tonka Toy
    A dash of SciFi
    Remove any semblance of good taste
    Result ? The Ener-G-Force

    Hideous IMO !

    In light of some inside info I’ve been privy to as to Mercedes future direction/focus along with this monstrosity and I’m beginning to think M-B may of lost the plot

    Ferdinand Piech and how old is too old ;

    Considering he’s now being called ‘ Ferdinand the Bionic Piech ‘ in and across the EU after his announcement , I’d say he’s definitely too old . The standard joke over there being ” Ferdinand won’t just be around for the release of the next Golf . He will be the next Golf ” . Think ‘ the Borg ‘ and you’ll comprehend the complete analogy . Or for us older guys ” My Mother the Car ” or ” Christine ” Kind of a frightening thought if you ask me . Gave me more than a nightmare or two . :o (

  3. ColoradoKid Says:

    #1

    If I may . Toyota has in fact a plethora of trucks and SUV’s on sale in Mexico , from full size to compact , including a lot of models we do not get in the US all of which are some of Toyota’s biggest sellers south of the border . So that might be part of the explanation

  4. Jon M Says:

    How old is too old to run a car company you ask? Well, I voted that there is no age limit…generally speaking. I don’t think you can necessarily put a limit on it. G. Richard Wagoner is a good example. He wasn’t so old, but it was long since time for him to go by the time the bankruptcy fiasco began (and to think he’s on the Board of Trustees at Duke University now…yikes). On the other hand, Alan Mulally is Wagoner’s senior and he’s much more capable of running an auto manufacturing firm. He certainly seems of sound enough mind to continue on for some time as well. Sure you can argue that Rick’s age had little to do with his inability to run a car company, but that’s just the point.

  5. pedro fernandez Says:

    How much does it add to the cost of building a car when you’re forced to get higher MPG’s? A bunch more, there is your answer, folks

  6. gmveteran Says:

    John,

    Your keen reporting of the EV market is very interesting and who knows where it will end up. One marketing play no one has tried yet is just to market a mainstream car that is only available as a hybrid or mild hybrid, and not even call attention to it. For example, what if Chevy sold all Malibus equipped with their mild hybrid system and simply called them Malibu? They could still offer the 3-4 trim levels, but only one powertrain with perhaps a performance variant like the turbo four they just launched. I wonder if this “non-marketing” approach would be more effective at putting greater numbers of hybrids on the road? Buick has started down this path but so far has not made any of their models exclusively hybrid in nature.
    GM Veteran

  7. Robert Says:

    Running a company, heck doing any job should be based on ability and capability. Probably the workworld is too quick and too high stress for most people over 65 but that should not hinder that minority of individuals who are ahead of that curve and still fully capbable.

  8. ColoradoKid Says:

    #6

    If I may offer up an opinion .If GM tried that tactic they’d fail even worse than the debacle that has been the Volt and so would any other carmaker . The reasons being combination of the complexity – price – mpg saved vs money spent – excessively high repair costs should things go wrong post warranty etc that keeps the majority of automotive purchasers from going the Hybrid route . That along with all the statements from the likes of BMW – Mercedes Benz – VW Audi etc stating very clearly that the Hybrid has a very limited future at best .

    Add to the above : Many if not most of us Do Not Want a Hybrid ( or an E/V ) of any kind . Period ! No matter what the reason . Any attempt to ‘ Force ‘ one upon us would only result in us looking elsewhere for our automotive purchases .

  9. W L Simpson Says:

    Based on personal experience, i voted for 75

  10. C-Tech Says:

    @ #6 I see where you are coming from with this marketing approach. The major drawback that I see is overcoming the price difference. Hybrid versions are, at this point, higher priced due to the added expense of the system. To try to market a hybrid without mentioning its a hybrid probably will leave the average consumer wondering why your Malibu cost more than a Camry. Telling folks its a hybrid and that is why it cost more justifies the markup.

  11. C-Tech Says:

    Perhaps there should be a licensing test for high automotive executives to keep their positions. You need to renew your driver’s license don’t you?

  12. W L Simpson Says:

    Put 2 weeks in a hybrid. It’s indecisiveness
    was unsettling .
    The KISS principle needs to be applied—lighter, cheaper,more efficient batteries ,4 wheel hub motors. Tesla is slowly leading the way,except for the I-MAX screen. Screen distraction is the next big accident causer.

  13. pedro fernandez Says:

    #11, pray tell, which particular hybrid was this?

  14. Bradley Says:

    Quite frankly, I don’t like “flexibility” in MPG standards. Flexibility is simply loopholes. With that said, what is the current average MPG of a car sold in Mexico? How does it break down per company?

  15. Bradley G Says:

    Age has nothing to do with running a company.
    Who is more capable? Lt. Dan Akerson & Bob Nardelli? Or older guys who get it: Bob Lutz &
    Allen Mulally and don’t forget the Late great Carroll Shelby, proves that you are never too old if you love what you do.

  16. cwolf Says:

    #10 There is a test for auto executives. It’s called the Board of Directors.

  17. ColoradoKid Says:

    # 14

    Not in Herr Piech’s case I’m afraid ;-)

  18. cwolf Says:

    An effective way to deal with Piech is to bestow upon him a luxury E/V named in his honor. Then have him drive it in the low lands during a flood.

  19. ColoradoKid Says:

    #16 :o

  20. Chuck Grenci Says:

    I thought, Bob Lutz (and voted accordingly); if you’ve still ‘got it’, you’ve got it.

  21. HtG Says:

    Vintage(so to speak)

    Another important factor in retirement age is the ability of a firm to attract and retain talent. Ambitious people want to see that the brass ring is up for grabs, and don’t want to see a silver back blocking their way. As ColoradoKid has hinted, Herr Piech is a member of a very select club; though I wonder if a giant like VW doesn’t have suitable enticements around for talent.
    _______
    SPOTTED ON THE ROAD

    I saw a new Focus outside a dealer lot. It was black and beautiful. Wow, does that thing look good in the wild.

  22. HtG Says:

    And by Focus I mean Fusion.

    Time to put HtG on an ice flow, I guess.

  23. ColoradoKid Says:

    Age ; One mans opinion

    Being of a certain age myself I feel I can say this with little or no prejudice intended or implied ;

    To have a well seasoned , competent , grizzly old veteran on the board , in an emeritus position , or as a consultant in any given company is in fact a plus . Experience can be a wonderful asset .

    But ! To allow said grizzled veteran to still be steering the ship in his/her waning years is in fact a major mistake . Look thru out history . The truly great businessmen running the businesses that are still active today knew when to call it quits and hand over the helm to the younger generation ( while still maintaining some semblance of control )

    Whereas the ones who held on to the bitter end usually wound up bringing their companies down with them in a fireball of untold destruction and said companies bitter end as well .

    So if history and wisdom is to tell us anything it is that timing is everything and that allowing the likes of Piech , Lutz etc to maintain control well into their later years is in fact a recipe for destruction . And , if I might add : Should the reality of VW-Audi’s actual financial position finally become public that bit of wisdom will rear up its ugly head in as to Piech’s extended tenures actual effect on the present and future of VW- Audi .

    I would also add haltingly that wisdom and history have already reared their ugly heads in the case of Mr Lutz .

  24. cwolf Says:

    #21 spoken like a true poet; +1

    I saw a new Fusion last week and thought it even more handsome on the road. Nice.. very nice indeed! Though my friend points out the vast majority do not favor the hyb., my next set of wheels will likely be one.
    The service mgr. at my area Linc. dealer checked the record of the handfull of hybs (Merc &Linc.) routinely serviced. Since 2010, no hyb. related problems were reported. This fact is the reason for my temptation.

  25. HtG Says:

    21 I am still a bifocalist and kicking

  26. Kit Gerhart Says:

    While some people don’t like hybrids, they are going to stay around, and probably increase in numbers. Properly done, as by Toyota and Ford, they give 30-50% better mpg in city driving than similar size cars with convential power trains. Diesel hybrids would do better yet. Yes, hybrids are complicated, but the companies have been able to make them reliable.

  27. jesse Says:

    So on another note altogether,anybody notice TOYOTA copying Hyundai commercials where the customer is talking about the car and all that ‘grounded to the ground’stuff …trying to make the Camry sporty…??LOL.I find it hilarious and a dead rip off of the Hyundai commercials.Also,the new Avalon is almost identical to the newly styled Hyundai Azera! My how the times have changed.Imagine,Toyota copying Hyundai!Ass for the Hybrids/EV’s and all that,I think the technology is pretty cool but they will have to pry my 436 HP 6.2L V8 Corvette from my cold dead hands!!!:)

  28. RonE Says:

    @21: I checked “There is no age limit to run a car company,” or anything else.

    I am a “grizzled” old veteran that is probably older than most of the posters on here and I still run things.

    Why just this morning I “steered” the vacuum around the house. No accidents or injuries and the wife is pleased with my performance.

  29. pedro fernandez Says:

    C&D reports that the 1.0 L Ford engine in the EU Focus only gets 27 mpg, 2 mpg’s less than the 4 Cyl and also keeping in mind that the Smart with its Mitsu 3 gets mediocre mileage as well, I have to wonder how much future 3 Cyl engines really have in the future?

  30. cwolf Says:

    There you go believing everything you read! If Fiestas achieved up to 49 mpg with the 1.0L,does it make any sense to fathom a 50% reduction in a car not much bigger,heavier and gearing? Check a few E/U car sites and you’ll conclude they would differ with C&D numbers.

  31. Kit Gerhart Says:

    #28,
    I look at British sites of various car companies to see EU fuel economy ratings. These numbers are very high, being for constant speed consumption, but they are good for comparing power trains.

  32. Brett Says:

    Ability is not age-related. If the organization is a meritocracy, the folks no longer able to maintain their competence will be replaced. That has nothing to do with age.

    I’m dying to see a new Fusion “in the wild” myself. The photos and videos I’ve seen look *very* nice. I think Ford is going to sell the livin’ whee out of that model. Another long-ball home run.

    re: Tesla Model S
    Somebody pinch me!! Did I just hear to bonafide auto insiders find virtually nothing to complain about (save for price) in an EV??

    It’s not about how much it costs. It’s about engineering a vehicle to DO THE JOB and do it well. Costs will come down over time. The fact that they seem to have managed to prove it can be done is HUGE.

    What’s a full-boat Lexus LS460 MSRP run these days? I’ll bet you can see the sticker on a Testla Model S from the driver’s seat of one.

  33. Brett Says:

    Oh, also on the subject of age: My wife turns 70 in December. She’ll be getting her degree in Psychology next year and is looking forward to accreditation and work as a counselor after that.

    (She’s also a redhead and a babe and I probably don’t deserve her. :) )

  34. W L Simpson Says:

    Real babes never grow “old” because they don’t run car companies <g

  35. Chuck Grenci Says:

    There are no absolutes (as regarding decisions and age); probably can use examples for each (maintaining a job or long overdue for replacement). I maintain Lutz (still has it) and Enzo Ferrari did okay (to the end). Don’t know for sure but maybe Henry Ford held on pretty much to the end.

  36. Steve Ashley Says:

    John,
    As long as Mr. Piech makes money for VW, the board agrees with his management goals, and most importantly he remains vertical and hasn’t assumed ROOM TEMPERATURE he’s good to go!
    Steve Ashley

  37. cwolf Says:

    Did’ja read that the EPA refused to curb the ethanol mandate despite pleas from a couple hundred congressmen and many state governors. the EPA says the recent drout should have no effect, thus we should have no beef; And we won’t because cattlemen won’t be able to afford corn feed and many will not be able to absorb the increased cost to put beef on the table! But we’ll have plenty of “cheap” gas….Right?

  38. pedro fernandez Says:

    Well, there is always chicken and tofu, who needs beef anyway? they do just fine in India.

  39. cwolf Says:

    Poultry is a good substitute,but I have one question; How do you milk a chicken? I don’t think they make a three legged stool that low! LOL

  40. Chuck Grenci Says:

    I don’t know all the economies of ethanol production but one byproduct is actually feed for cattle; I don’t think the drought is significant enough to affect the absolute result (pertaining to the ethanol equation (though I could be wrong). I believe there is a corn shortage (reduction in output) but don’t think ethanol is making any difference; are the ethanol producers calling for higher prices for ethanol (I don’t know).

  41. pedro fernandez Says:

    Well, Mr cwolf, we have “milk” made from soy, almond, rice, yucky stuff, oh wait, what about ice cream? forget it, bring back COWS!

  42. Kit Gerhart Says:

    #6,
    Huh? The idea of selling a car only as a hybrid IS being tried. All C-Maxes sold in the U.S. are hybrids.