Automotive thoughts on a Monday morning

By Jim Meachen
MotorwayAmerica Editor

(August 2009) In our current state of automotive angst there's just no predicting what kind of automotive news you might wake up to on the tube, on the internet or in your morning paper — for those of you who still actually have to wash newsprint off your hands.


Some examples as we start a new week:

• The Automotive News reported that the federal government may tax the government rebates that dealers hand out in the Cash for Clunkers program. The rebates may be treated as federal and state taxable income for dealerships. Huh? We thought this program was to HELP the dealers sell more cars and trucks. The government giveth and the government taketh away.

• The new Chrysler board of directors meets for the first time and some members of the new board, reportedly, aren't even aware of the products currently being produced. Is this surprising in an operation whose actions are dictated by the government?

• If that wasn't enough head-scratching news from Chrysler, we also learned today that Fiat, who came to save the day for Chrysler, posted a net second-quarter loss of $254 million. Is this a case of the have-nots leading the have-nots in front of a government whip?

• The run-flat tire, all the rage a few years ago with the prospect of no flats or no blowouts, has generally been ignored by the American consumer. And today we discover that Honda is discontinuing use of the run-flats. They had been available in a handful of Honda vehicles including the Honda Odyssey Touring and the Acura RL. Honda says they are expensive and tend to be less fuel efficient than regular tires.

Not to mention that the owners of 94,000 2005 to 2007 Odyssey Touring and some 2006 and 2007 Acura RL models joined a class action suit in U.S. District Court in Maryland against Michelin and Honda. The owners alleged unreasonable tread wear, high replacement costs and difficulties finding a repair shop.

And Consumer Reports chimes in — After being punctured, run-flats typically can travel only 50 miles before they shred, says Jennifer Stockburger, a program manager at Consumer Reports magazine.

Depending on its size and the vehicle, a replacement run-flat costs about $200 to more than $500, compared with about $100 for a typical high-quality tire. Also, not all tire stores repair or stock the tire, and some owners in the Honda suit said the tires wore out at around 15,000 miles.

• Gary Topolewski, creator of the "Photo Shoot" Buick television ad that shows a trendy West-Coast type director at a fashion model pool party, has fired back from a blaze of criticism over the ad, led by new General Motors marketing head Bob Lutz. Topolewski defended the work, which he said was aimed at "breaking the stranglehold" on the perception of Buick as old and stuffy, but is willing to do whatever GM wants. "If it doesn't quite meet what expectations are, we'll adjust accordingly," he said. "The idea was to gain attention for Buick, which I think it surely did."

• And despite protests from the Obama White House, lawmakers continue to turn up the heat on General Motors and Chrysler calling for a Treasury Department review of decisions to cut more than 2,000 dealers. "There is substantial confusion, even among dealers themselves, as to how GM and Chrysler selected dealerships to terminate and what benefits, if any, they might gain by doing so," Sen. Jay Rockefeller (D-WVa.) wrote in a letter to Neil Barofsky, special inspector general of the Troubled Asset Relief Program (TARP). What might be uncovered, we firmly believe, is more than just a little politics as to who was cut and who was not cut.

We don't like dull, but perhaps a few dull days in the automotive sector would be welcomed. Just build cars and sell cars. Not likely anytime soon. The next onslaught of craziness is just a good night's sleep away.