The Best Car Commercial on TV Right Now

You’ve probably seen the new “Meet the Volkswagens” ad, in which an old VW Beetle with an awesome German accent talks some smack with his neighbor who just bought a new hybrid. 

It seems the old Slug Bug bought a new Jetta TDI and is bragging about its fuel economy, performance, and overall coolness.

Check out the ad:

I laugh every time. NOBODY wants to be the guy who gets shown up by his neighbor, especially when it comes to a just-purchased new car. That’s why this ad is so great; we can all identify with the situation of poor Mr. Hybrid-Owner. He’s stuck with his car that isn’t fun to drive and sounds like a wind tunnel.

“What’s your hybrid sound like?”


“That’s cool.”

No, it isn’t. 

What’s your favorite car commercial right now?


No More Cars Allowed at the “Crossroads of the World”

Times Square before the traffic ban

Times Square before the traffic ban

New York City has banned traffic on Broadway in the famous Times Square area.

Broadway though Times Square has always been a notoriously traffic-clogged avenue, making life as a pedestrian in the area downright dangerous. Now, rather than a source of drivers’ rage, Times Square is a pedestrian’s playground.

New York’s Transportation Commissioner Janette Sadik-Khan says,

It’s good for traffic, it’s good for business and we think it’ll be a great deal of fun.

I agree. In fact, in the name of great fun, I think we should consider banning traffic in other areas, such as:

The Las Vegas Strip

It already takes just as long to drive as it takes to walk, so why not divert traffic and allow tourists full reign to bring the party to the street?

Waikiki Beach

Oh sure, tourists in rented Mustang convertibles might not like being banned from cruising Kalakaua Avenue, but making it safer for drunk tourists to stumble from hotel bars across the street to the beach is good for everyone!

Beverly Hills and Hollywood

I just want to see the reaction of SoCal socialites no longer allowed to drive their Range Rovers to Rodeo Drive. Making them take the bus would be great entertainment. I wonder if they’d still bring their Chihuahuas?

Where else should traffic be banned in order to become more pedestrian friendly?


Opel’s “Brazilian Soap Opera” Roars to a Climax

German Chancellery

German Chancellery: scene of long nights and stormy negotiations

You know, I never set out to be a financial news reporter, but this Opel-GM story has all the elements of good TV drama: political intrigue, complex characters, last-minute sleight-of-hand. It is indeed a soap opera, interspersed with commercials for the interested parties.

The waters got muddier yesterday when Sergio Marchionne, the Fiat chief (right), announced that his company would boycott Friday’s talks to preserve Opel. Fiat was still interested, yes, but not if it had to fork over another $415 million, a surprise turn of events, as we reported yesterday. Marchionne stated it was “unreasonable” for Fiat to negotiate for a company whose finances remain murky.

So, unless Sergio was playing high-stakes poker, the presumptive winner looked to be Magna, the Canadian parts company whose ability to bring more cash to the table came courtesy of a Russian bank. But Sergio said he was still interested, and Magna even offered a partnership proposal to Fiat—rather like Hitler did to Stalin at one point in WW II. So the plot continued to thicken.

Hold on, stop the presses. We just learned that Magna is apparently going to take a major stake in GM’s European operations, which include Opel. The company gets a bridge loan to sustain it through GM’s expected bankruptcy proceeding in the U.S. And the German federal and state governments will probably foot the bill.

I wish Marchionne had won. The guy is brilliant, a high-stakes negotiator, and a forthright car czar. In Montreal this morning he compared the German negotiations to “a Brazilian soap opera,” and so it has been. He told Der Spiegel in an interview that his company would be a much better fit for Opel than Magna, and I think he’s right.

The [Opel] plant in Eisenach is not just a highly efficient automobile factory, but also a symbol of German unity. However, Eisenach could operate even more profitably by working together with our Fiat plant in the nearby Polish city of Gliwice, instead of with its sister plant in Zaragoza, Spain. No parts supplier or financial investor can offer Opel such advantages, but an industrial partner from within the same sector can. That’s why a joint venture with us makes so much sense.

As he seemed to recognize, the politics—on both the American and German sides—got to be a bit too much. Whether Magna will preserve all of the 50,000 European jobs at stake remains an open question.

Don’t feel too bad for Sergio, however. He’s due to get Chrysler any day now, and that will be another soap opera.

Do you think Opel will continue as a brand under its new ownership?


Who has the best ideas: Congress or a guy named Norm?

Congress may think it comes up with great ideas, but sometimes it just takes a guy named Norm to really hit one out of the park.

The U.S. Congress’ idea is the “Cash for Clunkers” plan, which would give cash incentives of up to $4,500 to owners of gas guzzlers who want to trade up to more fuel-efficient vehicles.

It’s a solid idea and has worked well in other countries. While the idea is simple, the plan behind it has unfortunately become quite complicated. (I swear, Congress must have a rule that they can’t pass legislation that requires fewer than 500 pages to spell out.) You can read a great Q&A article about the plan here.

Enter Norm Davis, a reader of our blog who sent us this response to the Cash for Clunkers plan:

That’s a good start – it’s the “carrot.” But they left out the stick: Charge the owners of these gas guzzlers every time they re-register their vehicles. I’m thinking along the lines of $20 per mile under the national EPA average 22 MPG, per year. So if you drive a car that gets 16 MPG, you will pay an extra $160 each year. The extra registration fees collected will help pay for the cash-for-clunker program, so it won’t have to be totally funded out of the taxpayers’ pockets. I think that’s fair. What do you think?

Norm, you need to run for Congress. Your idea is brilliant. Not only does it provide funding for the Cash for Clunkers program, it provides a stronger incentive for owners of gas guzzlers to get rid of them.

The only addition I would make is an escape clause for small-business owners who need an 8.1-liter V8 for business purposes. Everyone else, pony up and pay!

What do you think of Norm’s idea to charge extra registration fees to owners of vehicles that get less than 22 miles per gallon?


Ta-Da! GM Bondholders Relent

Small GM Bondholders

At least some of them did, and they’ve agreed to take the 10-percent stake the company offered, plus warrants (permitting them to buy stock at a low price) for up to 15 percent more. Some of the largest bondholders have now come on board, but the Treasury still needs acceptance from more of the unsecured creditors, who could otherwise tie up bankruptcy proceedings for years. These small investors are looking at big losses.

Altogether, GM has some 35 percent of its bondholders now agreeing to the deal. That’s not enough, so the death watch will continue, at least through Monday. Don’t, however, hold your breath, since bankruptcy is still the most likely outcome, which may take at least 60-90 days. However, last night’s deal might speed up the process.

In a not-so-favorable development, GM’s Opel-Vauxhall talks in Berlin hit the fan last night, with no agreement on a crucial bridge loan to keep GM-Europe going during the parent company’s presumed bankruptcy. Apparently, the GM and Treasury representatives may have torpedoed the working agreement by suddenly announcing the company needed $415 million more in short-term financing (beyond the $2.1 billion Berlin had offered).

Shocked, the Germans called this demand “bizarre” and “impertinent.”

Klaus Franz, head of Opel’s works council, echoed the accusations of amateurish strongarming: “The German government is right in not allowing General Motors to blackmail it. It demands from GM to either pay for the additional financing need[ed] or to give a guarantee to cover it. General Motors has to know that Europe is no casino for gamblers. It is solely for General Motors to bear the blame, as they wanted to make us a puppet in the poker game about their bankruptcy.”

The talks did reduce the number of potential partners to two, Fiat and Magna, and another meeting was scheduled for Friday. If that one also goes down the tubes, Opel will be headed for bankruptcy, some 25,000 Germans will lose their jobs, and there will be, you can bet, big political repercussions.

Do you think there’s a way to bring the remaining 65 percent of GM bondholders (or a good portion of them) on board? Should the government sweeten the deal?


Is Ford a Foreign Car Company?

Ford Fusion: domestic or import?

Ford Fusion: domestic or import?

So take a guess: Are drivers who own foreign cars or domestic cars happier with their purchase?

It’s no big surprise to hear that a recent poll found that 77 percent of foreign-car owners are happy with them, versus 69 percent for domestic-car owners. 

Another interesting stat: 

Sixty-one percent of foreign-car owners plan to stick with their brand when it comes time to buy or lease a new car. Only 54 percent of domestic-car owners will stick with their brand. In other words, nearly half the people who own a domestic brand won’t buy that brand again. That’s a pretty dang telling statement. 

What the poll doesn’t give us are breakdowns by brand. I have to wonder if companies in bankruptcy (or entering bankruptcy) have skewed those numbers. Maybe 80 percent of Ford owners would buy another Ford, but only 5 percent of Chrysler owners would buy another Chrysler. 

I also have to wonder if the poll took into account where cars are built. Does the Ford Fusion count as a foreign car since it’s built in Mexico? Is the Toyota Tundra domestic because it’s built in America?

These days, the only thing that makes a company foreign or domestic is the location of its board room. And consumers really don’t care much about that.

Do you care whether your car was built in the U.S. or another country? Why?


Hands-Free and Brain-Free Driving


Back in January we spoke some unkind words about the Ford-Microsoft Sync venture. Namely, that super-connectivity (music, phone, media, driver directions, etc.) could only distract drivers from the most important – and hazardous – task at hand. What a stupid thing to say. Everyone loves it, and 80 percent of new Fords are ordered with Sync. Of course people want to be distracted from driving: It’s just too boring.

Steve Ballmer, Microsoft CEO, recently took personal delivery from Alan Mulally, Ford CEO, of a new Fusion, all Synced out and with media coverage to boot. Steve was so excited that he reportedly exclaimed, “Hehehe! Hahaha! Beautiful, man!” and ran to greet Mulally and the press, assembled for the self-effacing sales pitch you’ll see and hear below.

Don’tcha just love Alan talking about “another node on the big Internet in the sky”? And, as he further said, “We all want to be connected.” Well, pretty soon we will likely have not just the “hands-free functionality” of Sync, but the functionality of hands-free driving—the next step on the road to mass distraction.

Okay, I’m jaundiced, but don’t you think Sync could contribute to driver distraction? Give us your thoughts.


The Death Watch Continues

GM's Cars of Tomorrow

To nobody’s surprise, bondholders said no to GM’s magnanimous final offer of a 10-percent share in the reorganized company. It’s now virtually certain that the courts will take over in the next few days. Said Bloomberg,

The exchange offer was opposed by both institutional and individual investors, who said they’ve been treated worse than a union retiree-medical fund.

My God, worse than a retiree-medical fund run by a union? What could be more demeaning than that? Still, the outcome of the swap offer last night clearly demonstrated that investors felt they were being, shall we say, shortchanged. They were in no position to buck the government—already lending GM $19.4 billion and promising at least $30 billion more. Canada is also in for $9 billion.

As we reported earlier, GM’s bankruptcy route will likely be similar to Chrysler’s, though the issues are a good deal more complex. In Germany, Opel and Vauxhall assets are being pooled and segregated from the parent company to prepare for sale to Fiat or Magna, along with some government loan guarantees.

What the implications are, long- and short-term, of two-government ownership is hard to say. We can say it will be a rocky ride.

With the U.S. government owning about 70 percent of GM, you know who will be calling the shots, though they claim a hands-off approach. Can they call the right ones? Tell us what you think.


Tires on New Cars: Replace After 20,000 Miles?

Expensive car, inferior tires?

I think car manufacturers and tire makers have a deal with each other. Here’s why:

I bought a 2007 Suzuki SX4 two years ago to serve as a commuter car. Today it has 22,000 miles on it, and last week I had to replace all four tires, because the front ones were nearly bald.

I figured I just had a case of bad luck and partly blamed myself, since I failed to rotate the tires on a regular basis. But the guy at the tire shop said he’s noticing a common trend: People are coming in for new tires with about 20,000 miles on the odometer. 

I got home and started searching online, and sure enough I found forums where people complain that their new cars need new tires after only 14,000 to 20,000 miles. A guy here made it 18,000 miles with a 2007 Lexus ES 350. Same thing here on a Mercedes GL450.

What’s the deal? Are car companies cutting costs by putting inferior OEM tires on their vehicles?

While I don’t doubt that could be a possibility, I think the bigger picture is a lack of proper tire maintenance. The guy who sold me the new tires for my Suzuki recommended having them rotated every 5,000 to 6,000 miles; maybe if I had done that in the first place the originals would’ve gone another 10K or so. 

Also, please keep an eye on your tire pressure. As temperatures rise, tires that were properly inflated in cold weather could suddenly be overinflated. Measure your tire pressure “cold.” If possible, park the car in your garage overnight, and check the pressure in the morning.

Even with proper maintenance, tire life is another thing to consider when buying a new car. Check to see if the tires come with a warranty, and if not, use it as a negotiation tool to inch your price down.

When selling a car, consider doing what the guy who traded in the car my wife bought did: He felt bad getting rid of a car with used tires, so he put on brand-new 18″ Yokohamas before getting rid of it. Sweet!

Has anyone else noticed a short life for tires on new cars? How many miles do you typically get out of a set of tires?


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