GM Announces U.S. Small Car Plant

It looks like the UAW (and Obama) took GM out behind the shed for a little talk... GM is announcing that the will re-tool on of their U.S. plants (not "North America") to produce a small car (maybe the Spark).

Actually, it was not just coercion, but negotiation. According to news reports, the UAW gave GM further concessions, such as broader job classifications, to allow a small car plant to be profitable.

GM was looking at a public relations mess, with Ford previously announcing that the European Focus would be built in a re-fitted Michigan Truck plant, and the UAW howling that taxpayers should not fund more off-shoring of vehicles. By bringing a b-car line to the U.S., GM leapfrogs Ford, which is going to build its Fiesta in Mexico.

The whole thing makes me wonder, though. Was GM's plan to import Chinese cars a business plan, or was it a bargaining stick?

Digging Into "Dealergate", Part II

Doug Ross continues to assert that the Obama administration chose to close Chrysler dealers based on their political donations, but he relies on some one-sided data, hanging a lot on the closing list.

For my second look at the issue, I thought I'd look locally. What I did was tabulate the Chrysler dealers in the greater Metro Detroit area which are on the closing list, and also the ones on the stay-open list and take note of their political donations. Here are the results:

Closing:
Dealer, Donations

FORTINBERRY R

MCDONALD R

MONICATTI R

PENSKE R

RUSSO R

TAMAROFF R

VIVIANO R

Remaining:

Dealer, Donations

DEEBY R

FISCHER R

MCINERNEY R+D

MEADE AFIT PAC

MILOSCH R

MOORE NADA PAC

PENSKE R

RIEHL NADA PAC

ROBBINS R

SCOTT R

SNETHKAMP R

VIVIANO R

Metro Detroit Chrysler dealers who donated did so overwhelmingly to the Republicans.

The only example of a Metro Detroit Chrysler dealer who gave money to Democrats was "Hoot" McInerny, who gave large amounts to both sides. It would also be very bad press for Chrysler to try to axe McInerny's dealership, because he is a well known local personality and a big philanthropist.

I don't think you can argue any political bias in Metro Detroit, based on the data.

No Obvious Political Bias In Chrysler Dealership Closings

Update: Blogger Marla Singer at Zero Hedge did some actual statistcs on the entire dealer open and closing list, and found a small correlation between open dealers and donations to Hillary Clinton's campaign, but not a very significant difference between Democrat and Republican giving overall (0.93 vs 1.05 odds ratio of being closed, D vs R).

The blogger Doug Ross did some digging, and discovered that very few of the Chrysler dealers on the closing list gave political contributions to the Democrats in the last election cycle, and most of the ones that did give gave to Republicans.

In his original post (here), Ross found that out of a collection of 39 dealers he checked, 4 gave half or more of their contributions to Democrats (10%)

As much as I would like to believe it to be true, I don't think it is. There is a major flaw with his analysis: he didn't bother to check the dealers that are staying open to see how their political contributions broke down.

My hypothesis is that Chrysler dealers, being small businessmen, are more likely to donate to Republicans than Democrats, for predictable reasons. Like any small businessmen, car dealers want lower taxes, a lower minimum wage, fewer regulations, etc.

The list of Chrysler dealers that are staying open is here. This is a list of the dealers whose contracts will be assumed by the new Chrysler-Fiat.

What I did was go down the list and copy names into the search box at OpenSecrets.org until I got a clean hit. I did this until I got 25 dealers with donation records for the 2008 election cycle. The results can be considered randomized, since we don't expect a correlation in the alphabetical name of the dealership with their political affiliation (or geographic location).

Result: 23 dealer principals donated to Republicans, 2 donated to Democrats, or about 10%.

If you run these numbers through a binomial distribution, you get a 2-tailed P-value of 1! That means that the hypothesis that the two distributions are identical is correct. Chrysler dealers (and probably all auto dealers) who donated for the 2008 election cycle overwhelmingly supported the Republicans.

Here is my "raw data", if you want to spot check me.

DEEBY	R
AKINS	R
SMITH	R
MELLOY	R
SANZI	R
MCKAY	R
SIX	R
UDD	R
ANCIRA	R
ANDERSON	R
NOKES	R
HOSSLER	R
MAROONE	R
MORELAND	R
HADDAD	R
ALBRO	R
THOMASON	D
WYANT	R
BAUMANN	R
LANPHERE	R
SPITZER	D
BENSON	R
BERGERON	R
BERGSTROM	R
GERBAZ	R

CAFE vs. EPA

Edmunds is making a big deal about the difference in EPA "window sticker" vs CAFE fuel economy standards. Read about it here. They're reminding us that the window sticker fuel economy is a (downward) adjusted number which takes into account more typical customer usage (like A/C). The CAFE city FE test (FTP75) is run on a chassis dynamometer, at 72F, with a cold engine, with A/C off, and various other standard conditions.

The "two standards" aren't really two standards, the legal standard is CAFE FE (unadjusted). The fuel economy labels for consumers are required by law, but cars are not regulated to that number.

Edmunds does provide a handy list of vehicles that might meet the 2016 standards today, and not surprisingly, they are all sub-compact and compact cars, and hybrids.

This is instructive. In 2016, affordable cars which meet the new CAFE standards will be compact cars. Anything larger will be much more expensive, as carmakers will have play tricks such as reduce weight (aluminum, carbon fiber), add hybrid drives, add gasoline engine technology (turbo direct injection), or perhaps clean diesel.

Today, the average car is a "midsize" vehicle, somewhere between a Toyota Camry and a Honda Civic. In 2016, I suspect the average car will be a compact, about the size of a Civic.

Clarkson's Fiesta Movement

Very entertaining segment from BBC's Top Gear, where Jeremy Clarkson reviews the European Ford Fiesta. He takes his Fiesta movement on a game of tag with a Chevrolet Corvette inside a shopping mall.

Chrysler Dealer Collateral Damage

These photo show the Celtic Pipes and Drums, marching in the Birmingham parade. They are a Scottish style band based in the Troy area.

They are sponsored by Birmingham Chrysler Jeep, which was told by Chrysler that its franchise was being terminated last Thursday. If BCJ goes out of business, the band loses its sponsor.

I Love A Parade

This morning I went down and saw the annual Celebrate Birmingham parade. This is an annual affair with a small-town feel, where two marching bands, the shriners, local politicians, and lots of interesting cars make a slow circuit around downtown Birmingham before retiring to the central park for a day of kiddie fun. Here is a selection of the more interesting vehicles from the parade.

A classic Ford

The Oakland Country DARE Truck (our tax dollars at work...)

Oakland County dive rescue

A cool antique fire engine

A Chrysler wagon


Eastern Bloc army truck?

Ford convertible

Another classif Ford

The Celtic Pipes and Drums


The Shriner's wheelie wagon, based on an old Ford truck I think

Shriners on little scooters

Now come the old-west Shriners


Not very P.C. but he was funny.

Another old car converted for clown duty


This tree service truck looks like a recycled old ladder fire truck.

The Falun Gong were out in force. No one felt threatened. The state was not destabilized.

Interesting taste in women.

Cool spring-stilt walkers


The tail end of the parade was a huge mass of bassett hounds.

Chrysler's Dealer Destruction Hits Home

One of the Chrysler dealers on the dealer closing list that Chrysler filed with the bankruptcy court today is Birmingham Chrysler Jeep, known for its odd jingle, "Birmingham's In Troy!". This dealership is not far from my house. It is a corner store in the sprawling Troy Motor Mall, a huge collection of different car dealerships.

Sunset In Troy

BCJ was, according to this news article, in the top 20 dealerships in the country. It has been owned by the Mealey family since 1966, and employs 90 people. BCJ is known in the area for its fun, corny advertising, such as this spot where the owner snow blows his lot and rides around on a lawn tractor.

I wasn't expecting Birmingham Chrysler Jeep to close. I thought Chrysler/Fiat would want a slot in the Troy Motor Mall, where they could compete directly against the other brands, just yards away. But the massive Golling dealership in nearby Bloomfield Hills, which was chosen to stay open, sells all three Chrysler brands from one huge lot.

I know people who work at this dealership. This morning, when they got the news that they were expected to close, 40 employees were laid off all at once. All around the country, the same scene was repeated today. All around the country, people are tasting the salty, metallic flavor of failure.

GM Plans To Import Chinese Cars

According to the Automotive News, which obtained a copy of a product plan document which GM submitted to Obama's auto task force, GM is planning to ramp up production of cars in China for importation to the U.S.  Starting with about 17,000 cars in 2011, the number would increase to about 51,000 by 2014.  

GM already imports Chinese made engines (the 3.4L pushrod iron block V6 in the Equinox/Torrent), and I won't buy one.

If GM imports Chinese cars, I won't even consider one of those, either.

The UAW and the Democrats are going to tear GM a new one for this.  If you are relying on a UAW-friendly Democrat-controlled congress to save you, maybe plans for Chinese importation aren't smart, when Ford is re-tooling Michigan Truck to use UAW labor to build small cars.  

More here.

Here Piggy

Heh.

(Encyclopedia Dramatica)