Alcohol: Not just for drivers any more.

My previous post reminded me of Brazil, and then naturally alternative fuels. Why? Because Brazil is the first country to have adopted alternative fuels on a truly national scale and as a result, declared independence form foreign oil about 3 years ago. "Gasp!" I can here you say. "They must have done it using hinky local branded cars and hand pumps by the side of the road". No, actually, the vehicles were developed by the likes of GM, Ford, Fiat and Volkswagen; and the fuel is sold through gas stations of repute, such as Shell, Texaco and Petrobras.

How could Brazil do this while we, with all the resources at our fingertips, cannot? Well, they used will and power. During the 1970's the (then) military government decided that as a developing nation, Brazil needed oil, which it did not have very much of (although, ironically that is changing very fast). The country could not be held hostage to the whims and fancies of a foreign organization (OPEC) and a market over which they had no control of. Sound familiar? So a program was started to develop alcohol (Proalcool), derived from sugar cane, which Brazil has huge amounts of, as a car fuel. Vehicle manufacturers that had a presence in Brazil were "invited" to participate in the process by developing technology that would allow their vehicles to run exclusively on the alcohol. The next problem to be resolved was the problem of distribution. Distributors balked at having alcohol pumps at every station because they did not think there would be demand for the new fuel. The generals immediately recognized this as a chicken and egg situation: If there was no alcohol to be had, no-one would buy the vehicles. If no vehicles were around that consumed alcohol, there would be no pumps. So, being an authoritarian regime, they came up with a simple solution: If you want to sell gasoline in Brazil, you must sell alcohol as well. Period. The first commercially available vehicle run exclusively on alcohol rolled off a Ford dealer lot in Rio de Janeiro in 1980.

The rest as they say, is history. In the beginning, alcohol run vehicles got tax breaks and the fuel was subsidized. These measures were dropped much later and some years after that the program almost went under, until it was revived again by rising oil costs and the development of vehicles that could run on gasoline AND alcohol, allowing the consumer to pick and choose depending on market costs for each fuel, their own cash availability, etc. there are now vehicles that can run on gasoline, alcohol and propane. In a capitalist system this tends to keep the cost of fuel low, since suppliers know that the consumer can pick and choose the fuel they want to use.

So, how does this compare with the US? Well, there is no will, to begin with. Big oil has little incentive to invest in the distribution of an alternative fuel. The government has protective tariffs on alcohol coming from Brazil and other friendly nations in this hemisphere, which make it impossible for these fuels to compete. We, the scions of Washington have decided, must be supplied by corn farmers in Iowa. The fact that this is less environmentally friendly than sugar cane and there is not enough corn around for it to make a viable case for widespread distribution, dooms the program from day one. Mr. Obama, if I were to make one suggestion, it would be to pass legislation requiring oil companies to use 3% of their profits solely for the development and distribution (in equal parts) of alternative fuels. The market will take care of the rest.

Learning from Abroad

I recently re-established contact with an old friend from my time in Brazil, whose passion for cars actually exceeds my own. He was the previous owner of a red 1968 Karmann Ghia which I purchased, mentioned in a previous post. Exchanging e-mails with him reminded me of how our own industrial myopia and arrogance is a sign of the automotive times. Allow me to elaborate.

Throughout the entire current automotive crisis, I have not heard a single voice of humility. That includes the humility to admit that there are solutions in other countries which we could apply here if we could ever admit that we are wrong and they have a better way. The whole Detroit/Washington mindset seems to be that we got ourselves into this mess without your help and by goodness, we will get out of it too, using the same tools we have used with such brilliant success up until now. Am I the only one who sees this?

Ford's most modern plant in the entire world is in the Northeast of Brazil, and is a modern marvel. Different suppliers actually make the parts on the Ford factory floor and place them in the vehicle as it goes by on a conveyor. Parts transportation and warehousing costs for Ford = Zero. Admittedly this is not a Brazilian solution but Ford did implement it in Brazil. Union rules prohibit such modernity in the US, but instead of showcasing to Congress, this plant as an international solution for current cost woes, as well as what Ford can do with a relatively uneducated workforce, it is carefully hidden away in a corner of the developing world. Why? Is it because there is a hidden agenda that wants to show Congress how hard it is for the poor automakers to make cars here in the current environment, so please....give us money? GM makes some very popular vehicles in Europe. They have brought some them here, put them in their most bland brand, Saturn, marketed them as humdrum family transportation and then used this as proof that European cars don't sell so......give us some money. They brought two cheaply assembled vehicles from Australia and marketed them as sports cars (Australia - that land of thoroughbred automotive excellence, the new Germany) which flopped, and wondered why we did not sell our BMW's and jump into an Australian Pontiac.
Do you see a pattern here? Foreign solutions squashed and hidden so that we....give them the money. This is not a conspiracy theory, but a recital of facts. At best, it shows a gross ineptitude on the part of management to leverage global capabilities on anything approaching a comprehensive scale. At worse, it is an effort to get their hands on our money. Either way, shame on Detroit. I just wish that we had an alternative. If GM and Chrysler go under (I still have faith in Ford), who will pick up the juicy leftovers abroad? Where are the capital investment funds today? Oh, yes, they are in dire straits and currently "unavailable" because we were so adept at leveraging our "expertise" in mortgages on a global scale.

Service With a Sly Smile

I can never take my car to a dealership service area without a vague feeling of mistrust. I feel like the foreigner in an Eastern bazaar: I know what I want, I am fairly savvy, but the "natives" are wily and they have the edge; they are "the experts", ever willing to throw a bucket of doubt on my small flame of knowledge.

In the first place, your vehicle is whisked away to a back operating room where anonymous dirty handed people pull and hammer pieces of your car in an alarming manner, stick computer linkup cables to sockets (I wonder if those things are even hooked up) and soon, a verdict on the condition of the car is passed. You have no idea how. But the verdict always falls into one of two categories:

(1) "There is nothing wrong with your car at all, Mr. Healey". Either the service order says "could not replicate" or "normal", both of which are surprising, since the car won't start without a comical explosion from the engine bay and a cloud of smoke from the tailpipe.

(2) "I am sorry to say that there is a problem with your car, Mr. Healey" (which I know, since I took it in because there was a problem). "Apparently the descombubulator of the master cylinder has burnt out sending a flash to the electronic ignition system resulting in a problem of premature explosive cycle. We located the part at a dealership in Zimbabwe, and the service department can get us the part by say two weeks from Wednesday, cholera epidemic permitting". Cost? "Oooh. Let me see. I have the kids to put through college, the mortgage to pay off , AND the dealership needs to make money. I'd say about $1,500. If we don't find anything else". Warranty? "Oh no (giggles)! Our warranty doesn't cover normal wear and tear. This part is both worn and torn, so the warranty doesn't apply".

And, as John Lennon said, " I am not the only one to feel this way". Dealerships could go a long way in gaining consumer trust with a few simple measures:

(A) Make the back room a mechanical showroom with huge plate glass windows where customers can see what the mechanics are doing. Even operating theatres have these now. Are these guys doing more than microsurgery?

(B) Show us all the paperwork. How much does the replacement part cost as per your catalogue? How many hours does the manufacturer estimate to change this part? (Most manufacturers have such a table for almost every part on the vehicle).

(C) Show us the parts. Ohio law (and there are similar laws in other states) requires that the mechanic offers to give us the used parts, and to hand them over if requested. Very, very few dealers do this (I have only seen it once, at an Audi dealership). At most, a few will ask you to initial a tiny box with tiny print relinquishing this right. Don't do it!

(D) Attitude. We have all been to dealerships where we are treated as rather tiresome dullards, who would not understand what was wrong even if they tried ever so hard to explain, so why bother? Pay and move on, bub.

Some dealerships have tried to allay our mistrust with free coffee, a comfy seat and a good magazine, usually depicting their vehicles in a most favorable light, and highlighting the many awards they have received. I'd rather see what they are doing with my car. I can get a good cup of coffee anywhere, but a good dealership is hard to find.

What's Good For GM........

So it finally time for us to test that old saw, "what is good for GM is good for America". As this scribbler predicted, Ford emerges as the most viable car company while Chrysler and GM are poised to become history (at least in their current guise) as the bailout failed in the Senate yesterday.

Entering bankruptcy will be painful, but not necessarily bad for America in the long run, for a number of reasons. Firstly it will signal that badly run companies must succumb to market forces at some point, no matter their size - the checkbook, if not closed, is at least in need of a refill of fresh checks. Secondly, it will focus the minds of the surviving entities and we will have better vehicles as a result. Thirdly, the suicidal race to the bottom in terms of discounts will hopefully be reduced to a gentle glide toward efficiency: he who is efficient will sell at the most attractive prices. Fourthly, it will extirpate the fat and impossible demands of labor that are crippling our car makers. Finally, it Will reaffirm that we are indeed a capitalist society, not a corporate welfare society.

But where from here? Well, like guys who have their fantasy football teams, here is my fantasy US car maker breakup scenario:

(1) Chrysler sells Jeep to Tata Motors, who urgently need an "in" to the mass US 4X4 market, and something to erase the memories of dismal British quality (if only to replace it with dismal Jeep quality, but better the devil you know). Tata also gets Hummer for free. GM should be happy to get rid of the cash drain.

(2) GM sells Saab to Ford who, with Volvo, would have a credible European premium brand base in the US. Talks of selling Volvo are insane, given the myriad Ford products that are based on Volvo products. Ford needs a reasonable premium European alternative in the US.

(3) Lincoln and Mercury are history. Ford concentrates its premium brands on Volvo/Saab combo, incorporating the best of Mercury (the Mariner. Period) and Lincoln (everything except the Town Car).

(4) Pontiac is gone.

(5) Buick is gone.

(6) Saturn is euthanized after a long agonizing death.

(7) Chrysler gets a much needed boost by absorbing Cadillac and merging its "premium" Chrysler line. This would give Cadillac a wider market (a Cadillac minivan for heavens sake! Soccer moms rejoice! Owning a Cadillac that gets more than 10 miles to the gallon and can seat 8 - it could be cool to drive a minivan again). And Chrysler would gain some street cred.

(8) Chevrolet,GMC and Dodge merge to form a company that sells lower end pickups and sedans for people who like to buy their cars where they buy all things utilitarian (hey, Sears! Why not sell Craftsman products at these dealerships?).

Hey, that would be an ideal world - at least for me. I think however, that if Washington keeps weighing in, we will end up with no synergy and a big bill. Time will tell, but for now, let capitalism ring!

Collecting Cars is not for Joe the Plumber.

My copy of Hemmings Motor News arrived yesterday. If you don't know what that is, it is essentially the car collector's Bible. Now, while I love to read about classic cars, and study them in some depth (my collection of Classic & Sports Car magazine goes back to 1992!) I have never had the guts to take collecting them seriously - although now is beginning to look like a good time to begin (wait six months though).

While I lived in Brazil, we did own a 1968 Karmann Ghia (a mere 20 years old at the time). It was locally made by Karmann with the obligatory Volkswagen mechanicals, and was in absolutely pristine condition. And then I drove it around town. The drum brakes were fine if you drove slowly, but in stop and go traffic it became a battle between my thigh muscle and the need to stop before I hit the car in front. It is little wonder, then, that one of the biggest problems with collecting these cars is finding one whose bulbous front nose is original and unrepaired. It was slow as well. But it did, however have great charm, and the lines are nothing short of timeless.

Here, then, is the first obstacle to car collecting. Most amateurs are looking for something to drive on a regular basis. However, cars built 30 years ago are, in general, less powerful, noisier, handle worse, and have deplorable fuel economy. They make odd noises whose source defies detection. For all the charm and desirability, once you have driven a modern car you like, driving a classic every day becomes a case of your ability to induce voluntary amnesia of driving your new Lexus (or even your old Lexus). And if you did not know about the Karmann Ghia nose business, you may have just bought a car for a lot more than it is worth.

The second obstacle to Joe is choice. You have to begin by asking yourself a few searching questions. Why am I buying this car? Is it an investment? Do I want a car like Dad had when I was six? Do I think it is a thing of beauty? If you are buying a classic as an investment, forget it. Most single-car collectors have no idea if the car is going to appreciate in value. No-one really knows what a car's value will do, although there are ways to make educated guesses. Current rarity, original manufacturers production numbers, popularity at the time, famous design, etc. are all indicators. But remember that with any old vehicle you will have to spend increasing amounts of money to keep it roadworthy over time, especially as parts become rarer.

Do you want to drive Dad's 1967 Country Squire? Your memories of this car will clash with reality: there is no stain on the carpet where dear old Rover threw up, and the gum you stuck under dad's seat won't be there (trust me). However, nostalgia can make a rational person do odd things. In some cases, the vehicles bought under these circumstances are true classics and/or have a prominent place in automotive history. Most of the time, however, these vehicles are the ones that we love most, and that is a good enough reason to fork over your cash.

If you are buying the vehicle because you think it is a thing of beauty, congratulations, you are a true gear head. The problem for Joe here is that if your idea of beauty is a 1978 AMC Gremlin, that's fine, but don't expect everyone to share your enthusiasm - or agree with your asking price if you decide to sell.

So Joe, if you are reading this, or even care about classics, here is my advice: Buy one. Just one. And make it one you really, really want. And keep it. Car collecting (IE more than one) as a hobby or an investment is not for you or me. If you win the lottery, however, let me know. I have some hot tips for your collection.

Automobile of The Year

Several magazines have reported their choices for Automobile of the year, and at least two have named the new Nissan GT-R as their choice.

This vehicle is in the Supercar category, and has performance and features enough to spin the head of any gearhead, and produce drooling upon sight. Personally, I would love one, but Mrs. H is unlikely to agree.

My question is, in these times of unprecedented crisis why is this particular vehicle being chosen? Yes, it is a fantastic car, and will undoubtedly achieve its sales goals despite shallow pockets and long faces. However, it is a timely as a printing run of McCain-Palin election stickers. There are other vehicles out there that are more useful, have enough electronic gizmos to keep any service shop happy for generations to come and are far more relevant. The new 41 MPG Jetta TDI, the new Audi A4 (or 5 for that matter), even the Jaguar XF would all, in this scribbler's mind, be strong and more practical candidates, and there are others.

The automotive press in this country, like the industry itself, needs to tune in to the people who count: the people who buy.