AD #1381 – New Head of GM PR, Indy EV Car-Sharing Program, Conspiracy Theory Debunked

May 20th, 2014 at 11:45am

Runtime: 9:18

- New Head of GM PR
- Ford Head of Digital Communications Abruptly Leaves
- RIP Sir Jack Brabham
- Indy EV Car-Sharing Program
- 2015 Mustang Base Price Announced
- Nissan Crash Tests ZEOD RC
- Channel Stuffing Conspiracy Theory
- You Said It!

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Hello and welcome to Autoline Daily, where we open today with people in the news.

General Motors hired a guy named Tony Cervone to head up its public relations department. Ironically Cervone was being groomed for that very job over 6 years ago. But like so many others he left GM just before the bankruptcy, doing stints at American Airlines and Volkswagen. When GM fired its former head of public relations, Selim Bingol after Mary Barra’s testimony to Congress turned into a PR disaster, that opened the door for Cervone to return to the job he was destined to have.

We also just learned that Scott Monty abruptly left the Ford Motor Company. Scott made something of a name for himself in getting Ford up to speed using social media. No doubt he’ll turn up doing something in that field.

And we’re sad to report that Sir Jack Brabham has passed away. The Aussie was three time Formula One champion and is one of the iconic race drivers of the 1960’s. He was so revered that he’s going to be given an official state funeral in Queensland, Australia. Jack Brabham was 88 years old.

Car-sharing may be the next big thing in transportation and now a French billionaire by the name of Vincent Bollore will set up a car-sharing program for electric vehicles in Indianapolis. The Bollore Group makes battery packs for EVs and this is the company’s way of promoting them. The program uses an EV designed by Pininfarina called Bluecar and can be rented for as little as $10-hour. Things should be up and running in the next 8-months and it needs around 20,000 subscribers annually to break even.

Ford is now taking dealer orders for the all-new Mustang and now we know what it will cost. A fastback equipped with a 3.7L V6 will cost $24,425 when it goes on sale this fall. A 2.3L EcoBoost and a 5.0L V8 are also available but no pricing info on them yet.

The 24 Hours of Le Mans is not too far off and Nissan is giving us a look at how its gearing up for the race by crashing the ZEOD RC racecar. Here’s some slow motion video of the carbon fiber tub and nose being run into a barrier to make sure that it meets FIA regulation. Although we don’t know what speed it’s hitting the barrier at, it’s still pretty amazing that only such a small portion of the nose is destroyed. And as you may remember, Nissan is using the ZEOD RC program as a development platform for its planned LM P1 class debut in 2015.

Usually we ignore crackpot internet stories, but since a number of viewers have asked me about this, here we go. The latest crackpot conspiracy theory involves what they’re calling channel stuffing. In a nutshell, they’re claiming that the world’s automakers cannot sell cars due to the global recession, so they’re piling them up by the millions, parked anywhere the car companies can stuff them. And yet, according to the crackpot conspiracy, automakers keep on building more new cars because they refuse to discount the ones they’ve already built. There’s one hole in the theory. If automakers really stopped selling cars they would run out of cash so fast it would make your head spin and they would not be able to keep on building more. And besides, if cars were not selling, how come there are so many new car loans? How come governments all around the world keep on issuing new titles and license plates? How come car dealers keep on selling tens of millions of cars? There are even more points I could make, but why bother? This is not a new urban legend. Someone, maybe the same person, tried running this up the flagpole several years ago, and it’s just their attempt once again to get any kind of media attention.

Enough said, coming up next it’s time for You Said It!

marshy heard me say how much I liked the idea of heated arm rests. “Heated arm rests, eh? Well, I typically wear a coat when it’s that cold.” Oh c’mon Marshy, haven’t you ever used heated seats? I’ll bet you have. And you probably were wearing a coat when you turned on the seat heater. I even turn on the heated steering wheel when I’m wearing gloves. When the seat and steering wheel are at zero degrees, it sure is nice to heat them up.

Mike heard our report about the new Genesis and says, “It is interesting to hear Hyundai equate quality with low production numbers. In a car tooled for mass production, there should really be no variance that allows ‘craftsmanship’ to affect line production quality. Maybe this would make sense in relation to Rolls Royce, but not any mass production outfit.” Actually there is a quality benefit to running an assembly line slower if it involves the installation of more complicated equipment, or simply more equipment, and luxury cars have more equipment with more wires and more fasteners. I’ve seen some assembly lines in Japan go so fast that workers had to run from one car to the next and did not even have time to stop and sneeze.

Steve Ashley asks a really good question. “John, Why does it cost money for Chrysler to sign a memorandum of understanding with the UAW?” What he’s referring to is a $672 million charge that Chrysler took in the first quarter as part of a Memorandum of Understanding that the company signed with the UAW to get the union to continue supporting what it calls its World Class Manufacturing programs. And the reason I say that’s a really good question is that Chrysler will not say what’s in the Memorandum of Understanding or what that money is going to. Supposedly Chrysler will release those details at a future date, but for now it’s not talking.

johnnyringo201 wants to know, “Hey John, I work in NYC and recently spotted a brand new Chevy Impala as a yellow cab. I thought GM was still making the old Impala for fleet sales. I was really disturbed by the sight of such a nice vehicle as a cab. Why would anyone want to buy such a premium car when it’s being sold as a cab?” Well, don’t forget, it’s up to the individual taxi companies to buy whatever they want in their fleets. So if someone wants a new Impala, that’s their decision. Even when Mayor Bloomberg tried to mandate the Nissan NV200 as the Taxi of Tomorrow for New York City, the courts said no, no, no, you don’t have the authority to mandate them.

Lachlan Citizen says “It’s certainly looking like BMW is shaping up as Tesla’s biggest competitor. Perhaps when Elon decides to sell Tesla, BWM would be a better fit as a buyer than Toyota or GM.” I doubt it. BMW has sunk billions into its EV program, which uses a completely different battery and car construction approach. And it would cost many billions more to buy Tesla. The same goes for Toyota and GM. Ever since Tesla’s stock hit the stratosphere it pretty much priced itself above what anyone could afford to buy. Now, if the stock ever crashed, I would look for an automaker that has not invested very heavily in electric cars to be interested, like Fiat-Chrysler.

Thanks for all your letters and comments. And before we go just a reminder to join us for Autoline After Hours this Thursday night starting at 6PM eastern time. Join me and Gary Vasilash for some of the best insider information in the business.

And that wraps up today’s report. Thanks for watching and please join us again tomorrow.

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13 Comments to “AD #1381 – New Head of GM PR, Indy EV Car-Sharing Program, Conspiracy Theory Debunked”

  1. Fred Battle Says:

    I just bought a new 2014 Hyundai Sonata Limited Hybrid and was TOLD at the parts cointer That Hyundai does not offer any comprehensive Maintenance or Overhaul Manuals. Only a skimpy Glove Box Owners pamphlet. Is this true for all the car manufacturers now?

  2. motorman Says:

    during to 2008 depression i remember seeing new cars parked all over the place and maybe that is where those pictures came from

  3. motorman Says:

    GM uses cabs as test cars here in pittsburgh so maybe GM put the 2014 impala in the taxi fleet as a test car.

  4. Kit Gerhart Says:

    I remember Jack Brabham as the driver of the first rear engine car in the Indy 500, in 1961. It was a Cooper Climax F2, maybe an F2 car. I saw, and heard it at the time trials. As I remember, it was much quieter than the Offys that made up most of the field. I would have been 15 at the time.

  5. Dave Foley Says:

    I think that story about cars getting overproduced and parked is a misheard version of what I believe is a true story about some military equipment.

    Reportedly there are assembly lines that continue to make some sort of armoured personnel carriers that are actually not needed by the military. They have enough. This production is then either being destroyed, or pretty much given to some local and state police agencies, even though those agencies have never asked for them, and have no real need for them.

    Apparently they are doing this just to keep that assembly line and production capability at the ready. You know, for “Just-in-case” (read “when”) the next war comes along. Ahh, the power of the military industrial complex.

  6. Kit Gerhart Says:

    They probably do that because the congressman for the district where they build the stuff will undermine what others want to do, if they shut the plant down.

  7. Mike Says:

    They make a lot of those military vehicles in Oshkosh Wisconsin. Err…right outside my window actually. Sometimes you can see 40 or 50 of them parked around the town waiting for shipment, but certainly no huge numbers. Oshkosh Truck laid off 700 recently to add to the 700 others that were laid off a few months ago. As Afghanistan and Iraq wind down, they have been scaling back on production. I have seen cars fill parking lots in the Detroit area but usually those cases involved a fix that needed doing before they could be shipped.

  8. Kit Gerhart Says:

    7, Do they still make overalls in Oshkosh, or did that manufacturing move to China, Vietnam, or someplace like that?

  9. Dave Moore Says:

    It was Jack Brabham’s early career that made me a fan, back in the fifties….

    Though he went on to capture three Formula One World Championships, win 14 Grands Prix and become a successful race car constructor, I remember as a schoolkid the superhuman effort of this extraordinary Australian at the US Grand Prix in 1959.

    Jack Brabham entered the race with a slim lead in the championship and led the Sebring event up until the final lap when he ran out of fuel. He gamely pushed himself to the point of collapse in the heat and dust, and heaved his Cooper-Climax across the finish line to secure a fourth-place finish – enough to win his first World championship by four points.

    Such stuff was of Boy’s Own Paper proportions and the British press – then as now, much more F1-oriented than ours – emblazoned Brabham’s feat all over their newspapers’ back pages and some even on the front!

    Pushing your car is against the rules now, so Jack’s push to the finish line will never be emulated, just as the man’s character, ingenuity and guts will never be matched in what has become something of a powder-puff event compared to Formula One in those days.

    Let’s remember him at Monaco this weekend…

  10. Rick Says:

    Forget heated seats and steering wheels…here in Oklahoma we need air-conditioned steering wheels during our HOT summers…sometimes you need oven mitts in order to touch anything inside the car!

  11. C-Tech Says:

    The conspiracy theory sounds like the Lynn Townsend Chrysler sales bank of the 1960′s. At that time the Chrysler factories would produce more cars than dealers could sell and store those cars all over, including the Detroit fair grounds. until dealers or fleets could buy the cars (often at a deep discount and damaged).

  12. Dave Foley Says:

    9. Yup C-Tech. The sales bank was a terrible idea.

  13. Kit Gerhart Says:

    Don’t most of the imports use “sales banks” now? With most of them, you can’t factory order cars, but dealers tell you they can get what you want from “inventory,” or something like that. Yeah, it would be a small sales bank, compared to what the domestics were doing at one time.