10 years of GM's mistakes means 5 years of loss

General Motors should have consolidated brands a decade ago to avoid the position they are in. With Rick Wagoner's resignation of GM, or firing by President Obama, depending how you look at it, the reports state that GM hasn't posted a profit in 5 years. FIVE years! That is a lifetime for a company.

I pride myself on automotive product knowledge, but somehow I completely missed that GM has been hemorrhaging money for that long. No matter, it made me consolidate my thoughts about something in the back of my mind. GM missed a key business decision of eliminating brands. Hybrid SUVs were not any better.

My heart goes out to the employees who have lost their jobs at the plants, the suppliers and the dealerships. But competition, the costs of the union labor agreements and legacy costs of the pensions made GM a big medical care and pension company that is in the red. A familiar theme these days. GM should have done something unrelated to that aspect, but perhaps equally significant a long time ago.

Eliminating Oldsmobile was too little, too late. It was the tip of the iceberg. Ten years ago, not only should Oldsmobile have been eliminated, but Chevrolet trucks and the Buick nameplate too. Pontiac should have merged with Chevrolet and Cadillac. Hummer and Saab should never had entered the equation. Consolidate the small cars and sedans into Chevrolet from Pontiac and Buick by simply offering various trim levels. Have the maybe two profitable (and I'm guessing here) nameplates from Cadillac, the CTS and Escalade, sold at the Chevrolet showrooms. Put the SUVs and trucks in the GMC nameplate. Saturn would also be absorbed by Chevrolet.

I doubt GM will ever release how much they lost per brand, but lets look at what was involved. Separate bumpers front and rear, hoods, trunks, emblems interior options and materials, tail lights etc. all essentially the same platforms across the company. Development, marketing and advertising, logistics, inventory, shipping are major cost centers that could have been reduced sharply.

This massive consolidation would have eliminated billions in repetitive costs. It would also allow engineers to concentrate on modern development rather than brand differentiation. How many brands does Toyota have? Three: Toyota, Scion and Lexus with distinctly different models in each one. But they are probably pushing the envelope, having recently posted a loss as well. Nissan has kept it rather simple with two brands but have had their missteps too. I could go on addressing each manufacturer but you get the point.

Finally what about SUV and truck hybrids? A ridiculous notion only because they came BEFORE a small-car hybrid. Toyota scored a home run with the Prius, and its probably profitable for them. I will not get into debate about the carbon footprint of mining and manufacturing the battery but the 2008 Chevrolet Malibu PARTIAL hybrid was way too little, way too late.

I really want GM, Chrysler and Ford to succeed, but unfortunately we are paying for their mistakes. GM still needs to consolidate brands, immediately.

Volvo racing equals mistake repeated

What are they thinking? A championship winning race team built a car based on a product from a conservative company known for safety to compete against the "big boys" in the Speed GT series. They are competing against track stars such as Porsche, Viper, Mustang, Cadillac CTS-V, Pontiac GTO and Aston Martin.

Put it this way: Take the stock, dealership showroom versions of those sports cars and put them on a track racing each other. It would be fun, entertaining and basically 2 groups of close racing action. Adding a 257 horsepower Volvo S60 T5 is like adding a pace car. Disastrous. http://www.volvocars.com/us/models/s60/Pages/BuildYourS60.aspx

K-PAX racing won the driver's championship in the proven, reliable and excellent Porsche 911 GT3s' in 2007 and 2008. In 2008, they also won the manufacturer championship for Porsche. Now they built a race car with a Volvo chassis this year in the same series. Talk about kicking the gift horse in the mouth! http://www.kpaxracing.com/

What is this going to do for Volvo? It isn't going to establish a new market segment. They have virtually no racing presence at all in the states, nor are they trying. This was attempted before as well. In 2006 a Volvo managed one rain-soaked win during an otherwise miserable season. This is another doomed effort this year. http://www.swedespeed.com/news/publish/Motorsport_News/article_915.html

Volvo makes fine cars, but here is an attempt from K-Pax, 3 years after a Volvo race car was uncompetitive against the "big boys" like Viper, Corvette, Porsche and purpose-built domestic monsters like the CTS-V and Mustang Cobra trying to make the 2.5L turbocharged engine competitive. Volvo states they are not involved with this vehicle (comment below). K-Pax states they have support from Volvo. http://www.kpaxracing.com/history.html If I had to guess, this means data and technical support.

It really boggles the mind. Not only must this car be purpose-built, making it totally unrelated to the street car, the engine must be modified way beyond what is even remotely possible on the street and that is without major turbo lag. Turbo lag means a delay in power delivery. Frustrating to say the least. The Viper, Corvette and Porsche race cars are closely related to the street car. And even the previously mentioned CTS-V, a factory-built racer, had a powertrain not too far removed from the street car. The Mustang as some pedigree from Ford racing at least, despite a heavily revised chassis like the 'V' and forgoing the supercharger in the GT500.

I always support more manufacturers in any given race series. It is more entertaining, improves the breed and makes for great conversation and debate. But really this effort should be in Speed Touring. They have bitten off more than they can chew.

Granted, a 12th place finish, up from starting 20th is respectable the first time out, even though the other car had a DNF due to mechanical problems (foreshadowing?). http://www.world-challenge.com/events/raceresults.php?ID=804 . They also have top drivers and K-PAX even states it's still early in development. So even if it works, despite the time and expense to be competitive, the big question remains for Volvo: What will this do for you? Volvo better expand on this effort for the buying public or it will be more egg in their face. Prediction: K-PAX returns with Porsche next year and an opportunity for new market appeal for Volvo fails. I'll explain why in an upcoming article that this may actually be a clever exploratory move on Volvo's part.

EDIT 4/19/2009: If this trend continues, I better get ready to eat a lot of crow: http://www.world-challenge.com/news/story.php?ID=1241 Congrats to all involved on a fine effort and results, although they both loss placings vs. their starting positions...

Million dollar supercars are a good idea

Most react to $1 million dollar supercars negatively. They say and write that these cars are a rip-off, meaningless, silly, gaudy, etc. Recent examples are the Lamborghini Reventon and Aston Martin One-77. They are a good idea for the companies that make them and the owners that buy them.

One big question is who buys these things? Industrialists, billionaires, and those with a net worth most likely well over $100 million dollars buy them. Yacht sales have increased, why not ultra-expensive cars too? And you know what? They are absolutely entitled to it. If you earn your money legally, spend it however you want, period.

Keep in mind there are many, many million-dollar cars shown many times a year at the Concours D'elegances around the country. There are four in Northern California alone. The advantage with these modern cars vs. "other" million dollar cars is they can be driven with enthusiasm and safety on modern roads with high speed limits in great comfort. I doubt many do that in the skinny-tired antiques from the 1920s.

And what about purpose-built race cars? Sure they provide entertainment but they cost millions of dollars plural! They are not street legal, require exquisite care and maintenance and if anything, are infinitely more silly and gaudy. So if they are exempt from scorn, so should the street-legal cars.

The Reventon and One-77 can be driven to the country club, the yacht club, exclusive dinners, parties and charity events and of course those car shows too! Not only can the owners enjoy them, but it's also an opportunity for exclusivity and a little bit of immortality. Which Lamborghini model will be invited to the lawn at Pebble Beach 40 years from now? Probably not the excellent but comparatively pedestrian Gallardo but we can count on the Reventon. I find it a little sad and disenchanting to see so many mass-produced supercars advertised for sale all the time in the DuPont Registry or AutoWeek. But we won't see much of these million dollar babies for sale very often!

The factory has an equal benefit as well. They have possibly new customers that will be loyal, very affluent and very influential among their peers. Skilled engineers and technicians are utilized to for the special project which builds enthusiasm and creativity. These factories don't have multi-million dollar racing efforts, so it is another tool to bring advanced technology to the public with out a phenomenally expensive racing development.

Finally, the profit margin makes a nice business case too. Lamborghini sold 20 Reventons. http://www.autoweek.com/article/20081205/FREE/812059982 I would be willing to guess that is a nice $10 million dollar asterisk in the internal annual profit report! Aston is making 77 units but only 6 for the US. The recurring "seven" theme is related to the James Bond series as well. http://www.autoweek.com/article/20090303/GENEVA/303039998.

I applaud these cars. Whether closely related to the "standard" Murcielago model like the Reventon, an excellent engineering exercise like the One-77, or a speed record setting Bugatti Veyron, I say keep it up!

The Key for more viewers of SpeedTV and Koni Challenge Racing

SpeedTV televised the Koni Challenge Series at Daytona in Florida. The same reoccurring problem with racing coverage was evident for this race. However, it is even MORE essential in this series! Why? Because these cars are the closest to what is sold in the showrooms and driven on the street.

If viewers can't understand how cars can compete against one another, the interest will diminish. If SpeedTV would give a review of each car with some details and Grand-Am provided some information, the viewing audience will grow.

Racing is the most expensive sport in the world. Many can only dream to race, let alone at a professional level. Even a "track day" is about $200 plus thousands of miles taken off the life of brakes and tires. These performance cars being televised are sold based on their abilities. When obvious disparities are reduced and these various cars compete against one another head-to-head, the viewer must be informed how this is done. Not only that, many owners want to make street-legal modifications to their cars to make them closer to what is being raced. Faster is better, right?

The following cars were racing each other: Ford Mustang GT, previous generation BMW M3 with a 333hp 6-cylinder engine, current generation M3 with a 414hp 8-cylinder, a Dodge Challenger SRT-8 with 425hp but a very heavy, large car; Porsche 997 - the quintessential race car. Unmodified, the Porsche and V8 BMW would dominate the rest, hands down. And these are just the "GS" or Grand-Sport class cars:http://grand-am.com/koni/schedule/results.cfm?eid=877

In NASA, these cars are spread over 3 to 4 classes due to how much of a difference they are in performance:
http://www.nasaproracing.com/rules/Performance-Touring-rules.pdf

While the names of the drivers and teams is good information that must be provided, it is equally or more important for the masses to understand what makes this racing possible.

Car & Driver's mysterious Pontiac Solstice GXP cover story results

The April '09 issue of Car & Driver had the cover story of four best-buy sport coupes. The dominant winner in the last two SCCA National Championships came in last place. The Pontiac Solstice GXP was the car to race in the SCCA Runoffs for 2007 and 2008 in the SCCA T2 class. In this story, it was last against the Mazda RX-8, BMW 135i and the new Nissan 370Z.

What is the SCCA? The Sports Car Club of America. Founded in 1944, now with 114 regions in the US, virtually everyone considering competitive racing at a "grassroots" level has looked into or participated in the SCCA. Some new cars have been sold from the factory with 1-year memberships!

In the Runoffs, the Solstice GXP had multiple podium finishes, beating other notables such as the Nissan 350Z, BMW E46 M3 (the 333hp 6cyl model), Mitsubishi Evolution, Subaru STi, Cadillac CTS-V, Pontiac Firebird and GTO and the Chevrolet Camaro. For the most part these cars are significantly faster than the Solstice in a straight line. The popularity of these cars dictates better and more in-depth coverage.

Now granted the new 370Z, the first place pick, is pretty tough competition. Maybe the best sportscar buy for the money. But there was a key element mentioned but not expanded upon. A $650 dealer-installed package that adds 40 horsepower. An absolute bargain! Was this the key to the SCCA domination? Surely this should have been researched. And if two of the four cars in this test make over 300 horsepower, wouldn't be fair to test the Pontiac with this option? And by the way, horsepower upgrades like this from the dealer with the factory blessing, are very, very rare. Especially a 40hp jump which is significant for virtually any car, let alone one weighing 3080lbs.

Another absolutely key element completely missed was publishing the lap times. There was mention of lapping at Willow Springs, but oddly, no results given. This is one of the most elemental pieces of data for a test of cars such as this. A big error of omission without explanation. After all, they evaluated the cars for five days.

Road & Track recently reported the 370Z experiencing high oil temperatures after 4 laps and needing a cool-down. If this is due to a design flaw, not only is it absurd for the best new sports car value, but it should have been reported by Car & Driver if noticed! Edit: Car and Driver notoriously discovered a severely braking cooling problem....

Granted the ranking of the cars was warranted by the disclosed test data. Digging deeper, is the SCCA T2 two-time dominator allowed to have a horsepower upgrade that makes the rest of the field impotent? Should the car be demoted to the slower SCCA T3 class? Investigative journalism was severely lacking when covering sports cars like these.