It seems all the news of these past couple of weeks has revolved around the “newly re-coined” Cash for Clunkers program that was implemented last Monday. Now on this blog, we have followed the progress of this program from its inception in congress, but have really been unable to speak of its potential effectiveness. On one side, this program is going to cost taxpayers quite a bit of money, but our government has been insisting that this incentive will aid the weak auto industry during this tough economic time. It’s about stimulating the market, it’s about getting consumers to finally have a reason to go buy a new car, it’s about the environment… what’s absolutely clear is there are a number of reasons this program could have been beneficial. As the bill was passed into law and we began to approach the day of implementation, those who opposed this measure began to grow louder stating their belief that this would do nothing to get the American public buying American cars again. Then the Friday before D-day, the government sent out the blueprints of this program to auto dealers. They were complicated, and auto dealers everywhere grew vocal in their disapproval of the red tape, insisting that there was no way that this program would take off.

It has been a week now, and.. July sales have already shown a substantial growth (even though the program has only been out for a week). It has been so successful at getting Americans to buy new cars, in fact, that the prediction early last week of the funding running out soon came true before the end of its first week! The House of Representatives passed an emergency measure to inject 2 billion more into the program, which has yet to be passed by the senate. The Obama administration came forward today to show their support of the program, saying that the White House will fund the program until the Senate is on board. So now there is no denying that this program did what it was designed to do, so what are the opposing sides saying now? (I have to point out they have a point) They are saying that this spike in sales while measurable will only effect us further down the road: they are saying that sales will be much slower in the coming months because, anybody who was going to buy a new car are doing it now instead of later. I have to point out before I finish, this program might be dead before the end of the week. Should the Senate not approve the 2 billion dollar injection, cash for clunkers could be suspended.

OK, so I promised I wouldn’t continue to write about the cash for guzzlers plan… (sigh) So I’ll sum up new developments quickly: the program is having all kinds of trouble because it’s not equipped to handle such a large market. Basically the website and the help hotline have been jammed with traffic (no pun intended) and have not been helping dealers wanting to register for the program. As with anything, opinions on whether or not this program is working are varying. Some dealers see it working so well they believe that the money set aside to fund the program will run out by late August. And moving on.

Now for some potentially GREAT news for the auto shipping industry! Earlier this month, as part of their efforts to revitalize business, GM began to suggest opening up a partnership between themselves and eBay. Now it’s no news that regular people use eBay to sell their old or rebuilt cars to people all over the country (and a huge part of where an auto shipping business comes into play), but apparently; this isn’t that big of a leap for the auto manufacturing industry. Apparently dealers all over the country have been listing GM certified pre-owned vehicles on the website eBay Motors (eBay’s online auto marketplace). This would be a huge step in regards to new vehicles, something GM’s CEO Fritz Henderson characterized as “an exciting day.” Now who will wind up shipping these cars to the consumers? It is unclear at this point if the automaker will have set in place pre-existing contracts or if this will be left up to the consumer. All I know is this would be a very welcome breath of fresh air in this cruel economic time.

Today marks the day that the long discussed Cash for Guzzlers program finally goes into effect at many dealerships across the nation. Now I’ve been discussing this incentive for months now, but I find it a little interesting that the details of this plan have not been expounded upon until this last Friday. What you’re about to read may (or quite honestly, may not) shock you.

This Cash for Guzzlers plan may be a good idea; I’m not here to pass judgment on the issue. Honestly I personally like this administration, but I don’t feel that this program is one of their best. It doesn’t surprise me to find a government incentive with an accompanying mile long list of regulations. I just don’t understand why any dealers would want to put themselves through this (maybe I’m misinformed, but the regulations make it sound like the dealers will actually LOSE money over this program). In the end, this is the program that’s being offered to them so we will all see how it goes. The following a vague description of the list of things the dealers must do to use this program.

First and foremost, the dealer must be on a list given to the government from the automaker in order to even be eligible. This list will be updated weekly, so if people are not initially on it they have a shot of making it. Say you’ve met this qualification, you are on your way to having this government incentive, but first you must sign up with the government for EACH brand that you sell (this must be done separately, believe me this becomes a headache in a minute). After this, the dealer has made it through the initial stage and their name should appear on the cars.gov website (within, oh I don’t know, say, 4 days).

Now remember we are talking about a government program here so there will be plenty of regulations for the dealer to learn before they implement this program. They can find out what these regulations entail by reading the aforementioned 136-page document spelling these out.

Once they have done all of this, they have to go through about 15 more walls of red tape between themselves and the disposal unit (a government approved scrapping unit, which they can find on the handy cars.gov website as well), wait a little bit longer, and finally get the wrecker’s approval (that they even accept the vehicle). So now they can send it off and put this nightmare behind them, right? Not by a long shot.

After getting the approval of the wrecking company they then must send the necessary paperwork to the Department of Transportation at disposal@cars.gov within 7 days of approval of the scrapping company. After all of this turmoil the dealer must be thinking when am I going to get paid for the money I just put up for all of this? In order to get reimbursed (remember this doesn’t mean that dealers are making any money directly off of this program, it’s supposed to be merely an incentive for people to buy cars) the dealer must then submit each reimbursement application in the form of e-copies. Included in this must be an e-copy of either the purchase contract or lease agreement made at the dealership. If they did EVERYTHING absolutely right, they will be sent an electronic reimbursement from the government.

This is pretty interesting. Do you remember my very first post where I talked about the development of the OnStar safety net system? This was at a point where the company was just beginning to use a more advanced mapping system that could pin point cars that were in trouble with alarming accuracy. Well if you made the assumption that this step forward was only the beginning of an overhaul for their system you were correct. OnStar announced today a new service they are to begin offering soon that grows out of the development of their technology. This new service: Remote Ignition Block. This is actually pretty incredible; it’s a new way for law enforcement to prevent car theft. When OnStar receives a report of a stolen vehicle they now have the ability to remotely disable the car from restarting, ensuring that the car thief doesn’t get too far. This new development builds on another recent security feature offered by the company, which is stolen vehicle slow down. This is the same idea as the remote disable feature only this feature will not allow a stolen vehicle to reach speeds high enough for an attempt to outrun the cops to be feasible.

I have one more piece of technology that should prove to be quite amazing from some people. This development, made by Dallas based ATX Group, would allow for the driver of a vehicle to text message while driving hands free. Voice recognition is what makes this possible. To me this only really begs the question, why is this necessary for text messages? I mean, if you’re going to be talking into your phone, why can’t people just make a call? Of course, I don’t understand why people send text messages like 60% of the time (I guess I’m old fashion by enjoying the fact that I can hear somebody that I’m talking to). Nevertheless, this new development should be a nice safety net to keep people from texting while driving (nobody is good at this no matter HOW good you THINK you are). Please people, don’t text and drive.

One more update on the Cash for Guzzlers program. Chrysler is maximizing this opportunity (while scratching and clawing to stay alive) by piggy backing on this program. Their new program: an additional $4500 off of any Chrysler vehicle purchase, regardless of you eligibility for the government program. This means that if you qualify for the Cash for Guzzlers program, you now have the potential of saving up to $9,000 on a new Chrysler. Who do you think this will help more, the failing program, or the failing company?

How about this! The day after my update on Thursday about the congressional initiative to support failing dealerships: the House of Representatives passed the bill. This means of course that it now needs to make it through the senate (which is always near impossible) and pass through the president’s approval. Might I reiterate that just because it made it through the house does not necessarily mean that it will be signed into law. As I discussed on Thursday, this bill faces a Senate that is not nearly as supportive as the House, and presidential opposition. Still, many changes can and probably will be made to the bill which means it could be a law before (oh let’s just say) the end of August.

I know we have heard plenty of complaining from both sides of the aisle that this congress is a bit too loose in the purse strings, and believe me: this bill only furthers their point. This dealership bill is part of 24 billion dollar spending bill, which could be a key indicator of why Obama opposes it. As this latest bit of trouble for GM during their bankruptcy court trudges on, I’ll keep you posted.

So dealerships are closing in multiple places. Living anywhere in the country, chances are you have seen a dealership close to you shut its doors. In some extreme cases, what do you do if there is now nowhere close by to buy a new vehicle? I’m speaking only hypothetically of course, but the hypothetical may be a reality in certain instances. What about people who live in very rural areas that definitely do not have car dealerships? It is possible that before, they could have driven to a small town nearby (within an hour of course) to purchase a vehicle. And is it also possible that now, that dealership is no longer. Now I’m not saying that I hope this actually happens, but I do intend to point out that having a reliable auto shipper may be the answer to these people’s problem. With Terminal-to-Terminal shipping, extra cost could be incurred for these people who don’t live anywhere near these terminals. This is something that makes Door-to-Door delivery such a valued thing, and finding the right transport means finding the shipper that will cater to your needs.  Leave that to M3 Auto Shipper! (haven’t plugged them in a while, plus I don’t feel like I’ve ever taken the time to explain what it is that they do).

GM and Chrysler are in talks with lawmakers to reach an agreement regarding the proposed closing of thousands of dealerships. This is obviously in an effort to avoid the proposed legislation that would put their plans on hot water. In case I didn’t go into this on Monday (which I don’t remember doing so) this legislation would take these close to 2,000 dealerships, and restore them to the status they had before GM or Chrysler filed for bankruptcy. Yesterday the Obama administration made it clear that they would be opposed to such legislation, even though the bill was sure to pass in the House.

The National Automobile Dealers Association has been showing up in full force to support this legislation. Their efforts seem to be working as their congressional support has been growing quickly all week. It is still unclear whether or not the measure will pass through the senate as it has only half of the votes needed to pass. We’ll see how this unfolds.

Curious about how the Cash for Guzzlers program (the one that I discussed on a couple of occasions) was panning out? According to a growing consensus, not well. The argument states that it is far to early in our economic recovery to count on a plan like this to work. The problem stated: people may own a gas guzzler that happens to be paid off, the incentive would not in any way be worth the accrued debt of buying a new car. Sounds like a pretty reasonable argument to me, but will this ever reverse the decision to implement this program? Only time will tell.

It’s Monday, July 13^th, and here is your automotive news for today.

It seems that GM’s bankruptcy isn’t going as smoothly as they may have initially wish it. During their bankruptcy hearings they announced their plans to close thousands of dealerships, ultimately saving the company billions of dollars (which makes even wonder if they considered other areas that they could cut back, perhaps we all need to read a little more deeply into this).

There has now been action on Capitol Hill. Some members of congress are fighting this possible incline in the unemployment rate and it’s a non-bipartisan issue. One congressman described this as strong-arming dealerships into signing a deal by giving them fear of their own closure. Charles Grassley, a Republican senator from Iowa, has already introduced legislation in the House Appropriations Committee that directly address this. Reportedly, out of the two bills in question, one has already passed committee, and is working it’s way up the legislature.

This legislation would restore terminated franchises to their status before GM and Chrysler file for Bankruptcy. Additionally, this would force any further hearings of the closing of these dealerships to be heard in State courts, rather than national bankruptcy courts which will probably make it much easier for the dealerships to have a fighting chance.

GM issued an opposing statement on July 6^th, 2009 through their National Dealer Council condemning the legislation. Which was quickly condemned by the Automotive Trade Association Executives Committee, who blast this letter claiming that this is just another example of GM’s heavy-handed tactics to get their way. However the spokesman for the company may not be lying when he says that if such legislation is passed, the company could be risking any progress they have made or would have made. I know the company doesn’t want to fire people, but this legislation would make it much harder to do so (maybe that’s a good thing) :/

Hello and thank you for visiting on this wonderful July, 9 2009. First big news of the day: GM is set to exit bankruptcy court. Apparently (and frankly, as expected) the company is now largely owned by the U.S. government. As this is a developing topic, I will have much better details next week so please check back. This is bound to get/remain ugly.

In other news, the Wall Street Journal recently released a report speculating the passage of a new Department of Transportation bill in congress. This was as of July 2^nd. This transportation bill, which was being introduced by House Democrats, is reportedly just in its beginning stages so there is bound to be plenty of development in this story. This bill would cost 450 billion dollar over the next 6 years (yes, yes, I know) if passed. What would this bill do you ask?

Included in the bill would be several initiatives to reduce oil consumption in the U.S.  This is reportedly in an effort to stimulate economic growth (and not for the purpose of conservation, that is way down the list of important things in this country at the moment it would appear).  Additionally, this bill would consolidate the number of Transportation Department programs used to disperse federal tax money to state programs (to under 6). This would be a positive thing as it would allow local agencies to give more specific attention to where the money is going exactly (which could wind up saving us tax money in the end). For some this is just another example of our big spending habits, which they believe will get us further and further into this mess we’ve created. To an extent, I agree.

That’s all for this week. Next week is sure to bring some excitement.

Happy July 4th.. err.. two days late. I hope you enjoyed your holiday as much as I know I did. It is the month of July, which can only mean one thing: a progress report of the first half of the year is in order. June offered the auto industry something special (according to analysts anyway). Last month was the month that those in know expected for the auto industry to break through the 10,000,000 dollar barrier and prove to the nation that we are finally seeing a long overdue recovery in auto sells.. Well, um.. to put it lightly that didn’t happen. In fact, overall auto sells fell from 9.9 million in May to 9.5 million in June. While this is not necessarily good news we can at least take solace in the fact that doom and gloom political pundits making predictions at the beginning of the year of our impending GREAT DEPRESSION BY JUNE were wrong. (something I always love to see)

So the entire industry fell a little lower but there has to be a silver lining! There is, and it is measured by the rate of failure. Ford had something to celebrate (sort of). While the entire industry was losing profit margins in the American market, they only fell 11%! The good news for them? Everybody else fell more, giving them a 3 point increase in overall market share: they now control 18% of the market. That means that Ford (a company that by many opinions should have failed like many of their models do years ago) has outsold Toyota in the first 6 months of this year to become the 2nd place automaker only to be outsold by GM! Toyota is not the only company losing ground in the American market though… Nissan has fallen out of the big 6! Who took their place: Hyundai. This marks the first time (EVER) that the 6 best selling automakers in the U.S. have not been based in the U.S. and Japan alone. One more shift that I find to be interesting and then I’ll leave you to your exciting life.. in the luxury category. Lexus has been outsold in the U.S. market by none other than the German automaker B.M.W. This must be exciting news for them, many (myself included) really didn’t think that luxury brands would survive in this GREAT DEPRESSION we are now going through.. And we thought they had it rough in the 1930’s…

Well hey there. As we enter the last week of June/ first week of July more changes to the auto industry are coming down the wire. As of yesterday, 6 of the biggest automakers have announced plans to cease production of all diesel-running vehicles in the US by 2010. What does this mean for the future of diesel; anybody’s guess at this point. This may be a hot button issue in regards to saving money on gas because diesel engines can get up to 30% higher gas mileage than a standard fuel vehicle. The issue that the auto companies are facing is the price of Diesel engines. On average many components of a diesel engine can drive the retail price of the vehicle up as much as $8,000, something auto companies aren’t willing to place any bets on (and who can blame them in this market). So far GM, Ford, and Chrysler as well as Japan’s Honda, Toyota, and Nissan are the companies I am talking about here. This is of course excluding German automakers such as BMW, Audi, Mercedes, and Volkswagen, all of whom are still producing diesel fueled engines in the US market. What we have yet to see is if they will follow in the example of these other 6 companies. Something I wonder, does this move away from diesel pave the way for the massive onset of the electric car? I guess we’ll be able to tell by next year.

In other news, the Italian automaker Fiat (which bought out Chrysler earlier this year) has announced plans to begin reintroducing themselves into the American market by 2011. Specific plans are at this point nothing more than speculation; I wager that we will hear much more on this in the coming months.

Finally I’d like to end today’s article on a positive note (something I so rarely get to do). Do you remember the American Recovery and Reinvestment Act (ARRA)? This was one of the first moves of the Obama administration in an effort to combat unemployment and stimulate the economy when it was signed into law on February 17. This agency has released a progress report regarding the release of funds into the economy. You can check out the specifics here www.recovery.gov . As far as the Department of Transportation: the agency is claiming that the massive infrastructure overhaul that was promised in campaign season last year, is being delivered upon with up to 50 percent of the highway reconstruction funds having been allocated within the first 150 days. This is very good news for the economy as it will definitely combat unemployment in a big way. You can read more about this on the DOT blog at http://fastlane.dot.gov .