John McElroy
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Autoline on Autoblog with John McElroy
Hybrids Stumble While Diesels Surge
The new-car sales figures for June must be a cause for concern for fans of hybrids. But at the same time they're very encouraging for diesel proponents. You don't want to read too much into one month's sales numbers, but the numbers do tell a story.
Ever since gasoline prices tumbled from their highs of last year, sales of hybrids have tumbled along with them. And while most automakers are shunning diesel engines right now, Volkswagen turned in sales numbers in June that should make everybody sit up and pay attention.
So, are we going to see a battle royale between hybrids and diesels? It's too early to tell, but here's what's going on in the market at this snapshot in time.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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The new-car sales figures for June must be a cause for concern for fans of hybrids. But at the same time they're very encouraging for diesel proponents. You don't want to read too much into one month's sales numbers, but the numbers do tell a story.Ever since gasoline prices tumbled from their highs of last year, sales of hybrids have tumbled along with them. And while most automakers are shunning diesel engines right now, Volkswagen turned in sales numbers in June that should make everybody sit up and pay attention.
So, are we going to see a battle royale between hybrids and diesels? It's too early to tell, but here's what's going on in the market at this snapshot in time.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
Ford Transit Connect: Case Study in Overregulation
The Ford Transit Connect is a cool little van unlike anything else on the American market. In fact, I think it has the capability of becoming something of a cult car. But it's also a shining example of why the auto industry faces too much regulation.
Even though the Transit Connect is already sold in 55 countries around the world it had to undergo numerous modifications before it could be sold in the American market. And while it's not at all unusual to modifiy imported vehicles up to our standards, it's hard to see how some of these changes will help the health or safety of American citizens.
Some of these changes are so ridiculous and inconsequential that it's actually funny to see what they are. Funny, that is, until you realize all they're doing is driving up the price of the product.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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The Ford Transit Connect is a cool little van unlike anything else on the American market. In fact, I think it has the capability of becoming something of a cult car. But it's also a shining example of why the auto industry faces too much regulation.Even though the Transit Connect is already sold in 55 countries around the world it had to undergo numerous modifications before it could be sold in the American market. And while it's not at all unusual to modifiy imported vehicles up to our standards, it's hard to see how some of these changes will help the health or safety of American citizens.
Some of these changes are so ridiculous and inconsequential that it's actually funny to see what they are. Funny, that is, until you realize all they're doing is driving up the price of the product.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
Unlocking GM's Inner Value
Even though it's bankrupt and the price of its stock has collapsed, General Motors is worth a lot more money than most people realize. And if the company were to take a radically new approach to how it runs its business the payoff could be enormous.
GM's market capitalization is at ridiculously low levels. The total value of its stock is presently less than half a billion dollars. But the company is really worth a lot more than that. When you add up the value of all the land, buildings, tools, machinery, equipment, patents, research labs, proving grounds and every other asset it has, GM is worth over $140 billion. There's even more value in the know-how, knowledge and experience of its people.
But how do you unlock all that value?
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Even though it's bankrupt and the price of its stock has collapsed, General Motors is worth a lot more money than most people realize. And if the company were to take a radically new approach to how it runs its business the payoff could be enormous.GM's market capitalization is at ridiculously low levels. The total value of its stock is presently less than half a billion dollars. But the company is really worth a lot more than that. When you add up the value of all the land, buildings, tools, machinery, equipment, patents, research labs, proving grounds and every other asset it has, GM is worth over $140 billion. There's even more value in the know-how, knowledge and experience of its people.
But how do you unlock all that value?
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
Three Ways to Save the Big Three
Now that the Big Three are finally brooming out all their old legacy costs, they're going to be in the best fighting shape they've been in for nearly 40 years. But how do we make sure they don't slip back into their bad habits like they have after every other crisis?
A lot of people have a lot of opinions about what's got to be done, but to me it all gets down to how the executives run these companies. Get them to do the right things and everything else will fall into place.
There's that old adage in business that goes, "Tell me how you're going to measure me, and I'll show you how I'm going to perform." And while it's all fine and good to establish specific benchmarks that trigger bonuses, it's got to go deeper than that.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Now that the Big Three are finally brooming out all their old legacy costs, they're going to be in the best fighting shape they've been in for nearly 40 years. But how do we make sure they don't slip back into their bad habits like they have after every other crisis?A lot of people have a lot of opinions about what's got to be done, but to me it all gets down to how the executives run these companies. Get them to do the right things and everything else will fall into place.
There's that old adage in business that goes, "Tell me how you're going to measure me, and I'll show you how I'm going to perform." And while it's all fine and good to establish specific benchmarks that trigger bonuses, it's got to go deeper than that.
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
Does Killing Off Dealers Really Help?
Thousands of GM and Chrysler dealers are getting wiped out as part of each company's bankruptcies. And while the surviving dealers will be much better off, GM and Chrysler are likely to see less revenue, lower market share and fewer service parts sales as a result of this action. Is it worth the trade off?
Actually, debating the pros and cons is now just an academic exercise. It was the Presidential Automotive Task Force which decided that thousands of dealers had to go, then set a quota they wanted met, and told the car companies to go out and do the dirty work. GM and Chrysler didn't have a choice, but in many cases they acted all too eagerly. Shutting down dealerships fit in beautifully with their long term plans, and now the government was telling them that they could do it for free!
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Thousands of GM and Chrysler dealers are getting wiped out as part of each company's bankruptcies. And while the surviving dealers will be much better off, GM and Chrysler are likely to see less revenue, lower market share and fewer service parts sales as a result of this action. Is it worth the trade off?Actually, debating the pros and cons is now just an academic exercise. It was the Presidential Automotive Task Force which decided that thousands of dealers had to go, then set a quota they wanted met, and told the car companies to go out and do the dirty work. GM and Chrysler didn't have a choice, but in many cases they acted all too eagerly. Shutting down dealerships fit in beautifully with their long term plans, and now the government was telling them that they could do it for free!
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
by John McElroy on May 22nd, 2009 at 9:29AM 
BOOM TIMES COMING IN THE USED CAR MARKET
The future looks so bright for the used car market that I'm almost tempted to try and get into that business myself. Even though car dealers are going through tough times trying to sell new vehicles, they are going to more than make up for that on their used car lots.
The reason I'm so bullish on the used car business is that we're facing a looming shortage of good used cars. First off, the new car market has fallen by roughly 7 million units since its peak two years ago. That translates into 7 million fewer trade-ins available in the used car market. And the story gets even more interesting when you start to dig down into those numbers.
Follow the jump to keep reading...
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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The future looks so bright for the used car market that I'm almost tempted to try and get into that business myself. Even though car dealers are going through tough times trying to sell new vehicles, they are going to more than make up for that on their used car lots.The reason I'm so bullish on the used car business is that we're facing a looming shortage of good used cars. First off, the new car market has fallen by roughly 7 million units since its peak two years ago. That translates into 7 million fewer trade-ins available in the used car market. And the story gets even more interesting when you start to dig down into those numbers.
Follow the jump to keep reading...
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
by John McElroy on May 8th, 2009 at 3:59PM
PLENTY OF LIFE LEFT IN THE PISTON ENGINE
There are all kinds of ways to boost the fuel efficiency of a vehicle. Hybrids are becoming more and more popular. Clean diesels seemed poised to make major inroads in the market. And even though they're a ways down the road, hydrogen fuel cells sure look promising.
But the problem with these technologies is that they add considerable cost to a car. Toyota has probably got the cost of its hybrid system down to about $2,500, but that's still a lot of money to add to the cost of the powertrain. At their present level of development, clean diesels probably carry $4,000-$5,000 worth of extra emissions control equipment. And hydrogen fuel cells aren't quite ready for prime time no matter what they cost.
Engine engineers complain to me all the time about these alternative technologies. They say it's unfair to compare what they are doing with gasoline-fueled piston engines to these alternatives. And it all comes down to money. They claim they can achieve comparable performance, emissions, and fuel efficiency at a lot lower cost.
Specifically, they say "Let me add just $1,000 worth of equipment and technology to my engine and let me show you what I can do."
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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There are all kinds of ways to boost the fuel efficiency of a vehicle. Hybrids are becoming more and more popular. Clean diesels seemed poised to make major inroads in the market. And even though they're a ways down the road, hydrogen fuel cells sure look promising.But the problem with these technologies is that they add considerable cost to a car. Toyota has probably got the cost of its hybrid system down to about $2,500, but that's still a lot of money to add to the cost of the powertrain. At their present level of development, clean diesels probably carry $4,000-$5,000 worth of extra emissions control equipment. And hydrogen fuel cells aren't quite ready for prime time no matter what they cost.
Engine engineers complain to me all the time about these alternative technologies. They say it's unfair to compare what they are doing with gasoline-fueled piston engines to these alternatives. And it all comes down to money. They claim they can achieve comparable performance, emissions, and fuel efficiency at a lot lower cost.
Specifically, they say "Let me add just $1,000 worth of equipment and technology to my engine and let me show you what I can do."
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
They're After Your Freedom
You've undoubtedly read the Insurance Institute for Highway Safety's report and seen the videos it released when the organization pitted sub-compacts against mid-size sedans (if not, one is posted below the fold). They really went after the safety of small cars, trying to scare consumers away from buying them.
The IIHS filmed head-on collisions between a Honda Fit and Accord, between a Toyota Camry and a Yaris, and between a Mercedes C-class and a Smart. Each vehicle was traveling at 40 mph, which is the equivalent of smashing into a parked car at 80 mph, and the results were predictable. The videos made the national news, especially the one of the Smart Fortwo bouncing and spinning backwards.
The IIHS has an ulterior motive in conducting these crashes. It's all part of its campaign to limit how much horsepower cars can have, and to lower the national highway speed limit to 55 mph.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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You've undoubtedly read the Insurance Institute for Highway Safety's report and seen the videos it released when the organization pitted sub-compacts against mid-size sedans (if not, one is posted below the fold). They really went after the safety of small cars, trying to scare consumers away from buying them.The IIHS filmed head-on collisions between a Honda Fit and Accord, between a Toyota Camry and a Yaris, and between a Mercedes C-class and a Smart. Each vehicle was traveling at 40 mph, which is the equivalent of smashing into a parked car at 80 mph, and the results were predictable. The videos made the national news, especially the one of the Smart Fortwo bouncing and spinning backwards.
The IIHS has an ulterior motive in conducting these crashes. It's all part of its campaign to limit how much horsepower cars can have, and to lower the national highway speed limit to 55 mph.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
by John McElroy on Apr 10th, 2009 at 3:57PM
IT'S A FUEL PROBLEM, NOT A FUEL ECONOMY PROBLEM
Every single day, the United States ships $600,000,000 out of the country. That's what it costs us to pay for the oil we buy from other countries at $50 a barrel. It is the single biggest cause of our massive trade deficit.
The U.S. uses roughly 20 million barrels of oil every single day, and about 60% of that is imported. About 10 million of those barrels are used in transportation, including the kinds of cars and trucks you and I drive, plus all the planes, trains, heavy trucks and off-road vehicles in the country.
Yet, our entire effort to reduce our dependence on oil is based on Corporate Average Fuel Economy regulations (CAFE). And that only impacts passenger cars and light trucks. In other words, the industry that causes less than 50% of the problem is bearing 100% of the effort to fix it. No other industry is being regulated to reduce our dependence on oil, and that doesn't look like a very effective approach to me.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Every single day, the United States ships $600,000,000 out of the country. That's what it costs us to pay for the oil we buy from other countries at $50 a barrel. It is the single biggest cause of our massive trade deficit.The U.S. uses roughly 20 million barrels of oil every single day, and about 60% of that is imported. About 10 million of those barrels are used in transportation, including the kinds of cars and trucks you and I drive, plus all the planes, trains, heavy trucks and off-road vehicles in the country.
Yet, our entire effort to reduce our dependence on oil is based on Corporate Average Fuel Economy regulations (CAFE). And that only impacts passenger cars and light trucks. In other words, the industry that causes less than 50% of the problem is bearing 100% of the effort to fix it. No other industry is being regulated to reduce our dependence on oil, and that doesn't look like a very effective approach to me.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Autoline on Autoblog with John McElroy
WHY OBAMA AXED WAGONER
Rick Wagoner is no longer CEO of General Motors for two reasons. First, he failed to come up with a plan that satisfied the government that GM would be viable going forward. Two, President Obama needed political cover before he poured more money into the auto industry, a move which is strongly opposed by a majority of Americans.
Obama needed to show he was decisive and in control to maintain support for his efforts to provide taxpayer money to GM and Chrysler. And firing the chairman of General Motors will make it easier for the Administration to demand more concessions from the UAW.
While axing Wagoner caught me by surprise, after reading the Task Force's report, I almost wonder why the President didn't feel compelled to act sooner. The "Determination of Viability Summary" is a harsh critique of GM's plans. In the eyes of the Task Force, Wagoner simply did not move fast enough and did not meet the government's loan requirements: GM did not come up with a competitive labor agreement, did not renegotiate its VEBA payments, and did not come to an agreement with its bond holders. Indeed, under the latest plan GM submitted to the government, its restructuring efforts would not be completed until 2014.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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Rick Wagoner is no longer CEO of General Motors for two reasons. First, he failed to come up with a plan that satisfied the government that GM would be viable going forward. Two, President Obama needed political cover before he poured more money into the auto industry, a move which is strongly opposed by a majority of Americans.Obama needed to show he was decisive and in control to maintain support for his efforts to provide taxpayer money to GM and Chrysler. And firing the chairman of General Motors will make it easier for the Administration to demand more concessions from the UAW.
While axing Wagoner caught me by surprise, after reading the Task Force's report, I almost wonder why the President didn't feel compelled to act sooner. The "Determination of Viability Summary" is a harsh critique of GM's plans. In the eyes of the Task Force, Wagoner simply did not move fast enough and did not meet the government's loan requirements: GM did not come up with a competitive labor agreement, did not renegotiate its VEBA payments, and did not come to an agreement with its bond holders. Indeed, under the latest plan GM submitted to the government, its restructuring efforts would not be completed until 2014.
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John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
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