An Ill-Conceived Government Plan Ends as a Failure, Japan Rejoices

Americans Bought the Right Cars, Just Made By the Wrong Country. Oops.
(Image Credits: www.theweeklydriver.com)

What could have been better news to come across my iGoogle after returning from my late Summer holidays than that the US Government has ended the Cash For Clunkers scheme after one month. I wrote a lengthy diatribe in my last entry about what a circus-ugly plan CFC was, and it seems that Uncle Sam and the American auto industry agrees with me. What better way to bolster your homegrown automakers than to scythe out even more market share from underneath them while they restructure to offer the sorts of fuel efficient cars they should have been selling anyway and shuffle more customers over to their competitors' better constructed products? Government intervention was necessary. However, it seems that the government bought into its own hyperbole and false urgency. A sensible plan would have been to get together with the product planners from the Big Three, find out how quickly they can get their four-cylinder cars to market, and then launch CFC at the same time amid a surge of Labor Day 'yay for the USA' feeling. This Economist article highlights how CFC was a 'devil's bargain,' of sorts. CFC was necessary to avoid a Keynesian liquidity trap (when the public saves money when they should be spending). The article also highlights that Americans now are considering the costs of ownership, rather than just the costs of purchase. But by encouraging spending, the Government unwittingly pushed consumers over to foreign competitors. Combined, the 'Big Three' netted only 39% of the money offered under CFC. Meanwhile, the Toyota Corolla came out on top; the nearest American competitor was the American Focus in a dismal fourth. Hence the economy was saved at the expense of the industry the Government was trying to protect. One certainly hopes that any plans the Government has for the health care system will be more well-thought than CFC, but I'm not holding my breath.

A New CFC Problem

Look! It's One of the Smaller, More Fuel-Efficient Vehicles the Government Intended People to Purhcase
(Image Credits: General Motors)

Unintended consequences; history is full of them. One need look no further than chlorofluorocarbons to see how something that was hailed as a brilliant, world-changing discovery with the course of time threatened the very existence of humanity. CFCs were in everything from aerosols to air conditioners. By the late-1980s they were outlawed to try and stave off the growing hole in the ozone layer. Or take plastics, DDT, antibiotics, or any other invention that has had some effect or result that its inventor could not envision. Because science and engineering are practiced by imperfect, temporally-limited human beings, we will never be able to fully predict which successes are worthy of laud today, yet will be questioned mightily by future generations as if it should have been obvious to us.
There is a new CFC problem threatening the United States. This one is called the 'cash-for-clunkers' scheme. And, it too, so it would seem, has just as many problems as the original CFCs.
This AP story details how some people are taking advantage of the CFC rebate scheme to purchase luxury SUVs such as the Cadillac SRX, Lincoln MKX, and BMW X3. As the story details, these car dealers and interested buyers are merely taking advantage of a loophole in the agreement. It is not as if the money is being misappropriated; these vehicles actually qualify for government subsidy. It is a classic case of unforeseen consequences. The spirit of the program is that people will trade down from gas-guzzling SUVs to smaller, more efficient cars. The trouble is that if people wanted smaller, more-efficient cars they would have bought them in the first place. Instead--as is always the case with any law--the involved parties (the government included!) are doing the minimum possible.
The cars available for sale in the US have appallingly low fuel economy, so the MPG bar can only be set so high; otherwise the plan would be a catastrophic flop for the government since no one would take advantage of it. Consumers are not interested in buying smaller, more-efficient cars, otherwise they would have done so in the first place. Car dealers are interested in selling cars with the maximum amount of incentive; hence, they are unlikely to refuse to sell an SUV to someone under the CFC scheme because it 'doesn't fit the intended spirit.' Like any 'successful' government instituted plan, everyone gets to say they win, but realy, no one does.

Transparency Hops in the Back Seat

General Motors tries to Keep the EPA from Stealing Its Lunch
(Image Credits: A&M Flims)

It seems that GM's CEO, Fritz Henderson, had better grow some eyes in the back of his head; he's going to be spending a lot of time backpedaling. After issuing a statement several days ago on the Chevrolet Volt being potentially commercially unviable (after previously making it the centerpiece of GM's comeback from the brink), Mr. Henderson has now had to do a bit more reversing. After claiming (by a mystical, magical, opaque (re: not transparent) formula) that the Volt would be rated at 230 MPG (get it?), the General has had its magic carpet pulled out from under it by the EPA: the EPA has not tested a Volt. This is like that scene in The Breakfast Club (RIP J. Hughes, enjoy the High School in the Sky) where Judd Nelson and Anthony Michael Hall are talking with Molly Ringwald and AMH accidentally, but not accidentally, hints that he and MR are secretly having nocturnal discourses. Did GM seriously think that they could make outlandish fuel economy claims and have everyone just take it? Does their hubris still run so deep that they can actually believe they are one of the most trusted institutions in America? Making bold claims can show boldness. However, making unsubstantiated and bold claims is plainly foolish.

Progress Means Moving Forward

Richard Nixon's Resignation Speech Was Merely His Attempt at Being 'Transparent' About His 'Progress' Since the Watergate Scandal
(Image Credits: www.visitingdc.com)

In a recent update of Autocar Online, GM states that the Chevrolet Volt may not be commercially viable. To any casual follower of the auto industry this should come as little of a surprise. GM has not broken new ground since it came out with badge-engineering in the 1980's; and really that just made it easier for the executives since they could refer to their product as 'car' rather than 'cars.'
I really do feel for Fritz Henderson, however. The guy will have to respond apologetically to every polemical comment levied against GM thanks to Rick Wagoner's arrogant and shameful last stand. I do think that he should have better press people, though. While I admire GM's obvious desire to spin this as a positive by being 'transparent' and trying 'to keep the public informed of our progress,' this is not the sort of thing that one wants to be transparent about. And, frankly, how can this be interpreted as progress? If Mr. Henderson means that GM has made 'progress' in that it is no longer denying that it makes inferior product and that its competitors vastly outstrip its innovative capacity, well then kudos for GM making it past step 1. However, that seems far too existential a realization for GM at this stage.
GM is hoping that something bold, brash, and brilliant like the Volt will bring it back from the brink (apologies for the alliteration). The trouble with that line of thinking is that it is too much like banking on a home run to win the game; chances are, you're going to strike out. Any student of history knows that success in war requires steady, consistent, and unwavering progress, especially in the face of adversity. Let's all hope that GM is 'transparent' about some real 'progress' in the future.

A Car Guy Car Shares

Car Shares: Feel the Love, Y'all

After spending a year in the UK without any motor vehicle access to speak of, my wife and I realized that we had more or less exhausted our ability to travel by train. Not that the UK does not have infinitely more rail accessibility than the US; it's just that to get to the areas of natural beauty (i.e. Devon, the Scottish Highlands) one needs a car.
Back in the US, if you had proposed something such as Zipcar to me, I would have asked you what sort of hippie I appeared to be. As a self-certified 'car guy,' the thought of sharing a car was anathema. My car was kept palatially clean. I knew absolutely everything there was to know about the maintenance history of my car because I did it myself. Why would I want to share my car with anyone less diligent?
Before proceeding, allow me to elaborate on the concept of a car share. A car share is a 'pay-as-you-go' car club. Hence, you can book a car for an hour, several hours, a day, a week, a month, however long you like. The idea is to incorporate as much of the convenience of owning a car without actually owning a car. Why does it differ from a car rental? For starters, there are no ID checks, blood tests, child-sacrifices necessary upon pickup. Booking in advance via phone or Internet ensures that your desired vehicle is available when you want it; however, it is entirely possible to just phone up the company and request an hour, two hours, etc. worth of driving. It is simple, clean, and painless (as I will later describe).
Here in the UK, we joined the car club Streetcar. After a long courtship (investigating costs, raising funds, asking their father for permission) we finally took the plunge in May. Since then, we have used a Streetcar on a day's rental and for a long weekend with no complaints. Both cars have been part of VW's Bluemotion line; substantially nicer and more technically interesting than your run of the mill Vauxhall Corsa. Membership is near as makes no difference to £60 p.a. with insurance roughly £6 p.m. to reduce the insurance deductible to £250. Rentals are as low as £6 per hour ranging up to £60 for a day (fuel not included). Streetcar also has a line of vans for rental for the odd trip to Ikea, antique show, farm market, or Scotland.

So what's it like using a car share? After booking my desired vehicle online, the following was involved (with levels of difficulty):

1) Find the Streetcar (Medium)

Streetcar provides convenient Google maps online and sends a text message 15 minutes before your rental with your car's location. Nevertheless, being on the ground is a different thing altogether from Google's omniscient viewpoint.

2) Unlock the car (Dead Easy)

Welcome to the Future. Your Car is Ready.

Every Streetcar member has a Streetcard. This standard card has an RFID tag inside that, when held up to the magic box behind the windshield, will unlock the car. I admit, this is probably dubious security, but you can just rock up straight off the street and get into a car; that is pretty cool.

All Hail the Wonder that is Magic Box.

3) Inspect the car for Damage (Easy)

Every Streetcar has a vehicle log in which (nice) members are supposed to jot down any damage that the car might have incurred during their sojourn. So, a quick walk-around with a glance in the logbook and, if necessary, a call to Streetcar HQ to notify of any malcontent is all that is necessary to make sure that you aren't responsible for someone else's transgressions. That was one fear allayed.

4) Input PIN (Do you have opposable thumbs?)

A Proliferation of PIN Pads Pervades Our Polis

On joining Streetcar, you are given a four digit PIN. This is necessary to mobilize the car and to get the keys out of their lockbox in the glove compartment. This pad is also the communication device (yellow button at bottom) that links each Streetcar with HQ 24-7 and is also the docking station for the fuel card (more on that later).

5) Grab the keys and go! (Easy, peasy)

The Drive:
-------------

Driving a Streetcar is, well, as easy as driving any other car. While on the go, the keys lock and unlock the car as normal. The radio has iPod connectivity; an absolute must these days. Unlike a rental car, fuel is included in the cost of a Streetcar booking. This can be either good or bad, depending on the duration of a rental. When we took the Streetcar on a daytrip, we were responsible for fuel at a rate of 23p/mile. As we did not have to fill up the car (since it was a Bluemotion) the cost of fuel was low. When we took the Bluemotion Polo on an 800-mile trek across Devon, that cost ramped up substantially. However, all fuel transactions are billed directly to Streetcar via a corporate fuel card. Hence, there is no need to seek reimbursement for personal fuel outlays. Having all of the costs of a trip occur on one bill is, for obsessive budgeters like moi, a substantial advantage over standard car rental. Recently, Streetcar has started a promotion that any booking longer than 24-hours will have fuel included. Thus, there will be no fuel surcharge. This makes taking a Streetcar as attractive (to my mind, more attractive) than a standard rental car.
I personally have enjoyed having the opportunity to drive a couple of examples of VW's much-hyped Bluemotion line. After two trips, I observed 58 MPG in a VW Golf (doing substantial motorway driving at about 80 MPH) and well over 60 MPG in the Polo (with an average of 70 MPG on the motorway) despite doing some Devonian hill climbing. Both of these cars will leave a Prius with nothing but its Eco-hubris when it comes to achievable fuel economy.

I was not much of a fan of the electric power steering in the Golf; it felt artificial and weird. The Polo felt like a much better drive, but the gearbox places Reverse next to 1st with only a push down necessary to engage; particularly frightening if you need to quickly shift into 1st when the person you are following stops short on a 15% grade. Giving the Bluemotion treatment to both Golf and Polo endows both cars with the suspensions from their GTi brethren. However, both cars are let down by their low-rolling resistance tires that give up long before the driver is interested. It is an altogether schizophrenic experience on single-track and narrow two-lanes for the spirited driver, but wonderfully well thought out for the average drive. Despite having low-powered diesel engines, both cars were turbocharged; an absolutely necessity on any drive where the topography is not reminiscent of Illinois.

So to sum up the pros and cons of car sharing, in a bulleted list for the engineers out there:

Pros:
-------

- Substantially better cars than one could afford for such low sums of money
- More convenient than hire cars
- Relatively low cost of fuel
- Superlative fuel economy
- As much car as most people with access to public transport need
- Kinda quirky, cool, and fun

Cons:
-------

- It is not your car
- Mostly diesels or low-powered petrols
- Hidden costs of insurance and gasoline
- Annual membership fee
- Can't necessarily have the car you want when you want without advanced planning

All in all, I have been more than pleased with the car sharing experience and, as long as my income is limited, will absolutely look to it in the future as part of an integrated transport network for getting from Point A to Point B. After all, that's what cars were about in the first place.

Give Car Shares a Chance. Try Their Website!

The Show Will Go On

The summer series of Top Gear has come to a close. If you are lucky enough to live in the UK, it is absolutely a must-see. If you don't, continue finding creative ways to see it before they simulcast it on BBC America (or Australia, or wherever you may be).

Oddly enough, this final episode has created a great deal of controversy in a very good way. The final sequence involves Clarkson driving the new Aston Martin Vantage V12 on some beautiful Highland roads. It is a surreal, dream-like masterpiece of cinematography and automotive engineering. Throughout it Clarkson--quite out of character--says very little. The quick and dirty summary is that the car can speak for itself; it is just that good. The movie is clearly a lament for the 'golden age' of horsepower that we have enjoyed over the past decade. Somehow, though, many (the media especially) interpreted this movie as indicative that Top Gear will be going off the air. It is not.

I did feel compelled to blog in response to Clarkson's statements about the Vantage V12 being a swan song. In a way it may turn it to be so. The likelihood that car companies will be able to continue to churn out gas-guzzling, fire-spewing, panda-killing speed machines with impunity is very low. Climate change is gaining a stronger foothold in the corridors of power as a legitimate issue no longer solely the purview of Greenpeacers or Earth-Firsters. There are serious concerns over energy security, especially because the majority of petroleum comes from countries with whom more respectable countries may have only tenuously friendly relationships.

However, sports cars are evocative machines. As long as humans have been walking upright they have been racing. We have raced boats, ships, horses, chariots, cars, motorcycles, planes and yes, even on our own two feet. Speed conjures just as many primal urges as brute strength. And, that aside, fast cars are fun. So, even if we have only electric cars, we will have fast electric cars, as well. Efficiency is all well and good, but it is not exciting. It's a bit like bragging about having a good mortgage; it's something to be proud of, but not something to bring up with the party crowd.

- W