The Ford Fusion has been around since the 2006 model year, and has always been considered a very good, nice looking car that is fun to drive. For the 2010 model year, introduced last year, the styling was updated to be more aggressive, and also given upgraded engines and a new interior. As mid-cycle freshenings go, this was fairly extensive and well-received. So well, in fact, that it was named the 2010 Motor Trend Car of the Year®.

The Fusion also added a hybrid model, which received the latest generation of Ford’s hybrid system, previously available on the Escape and Mariner SUVs. The new version is smaller, lighter and costs less than its predecessor. The main (maybe only) reason people buy a hybrid is to save fuel. There are different reasons to save fuel (lessen reliance on foreign oil/national security, to save $, curb global warming, other environmental concerns), but everybody is looking to save fuel. So how does the Fusion Hybrid stack up? As you can see in the table, the EPA rates the hybrid at 39 MPG combined, compared to 25 in the regular 4-cylinder Fusion. As the EPA calculates it, that will save you about $575/year (assumes 15,000 miles and $2.66/gallon). Not bad, but at that rate, it would take you 6¼ years to get your money back. This is based on a $3600 MSRP premium for the hybrid system, after adjusting for major equipment differences. As noted above, there are other reasons than simply dollars and cents that go into purchasing a hybrid, but if you are looking at it in only those terms, the investment doesn’t really work well.

When I picked up the Atlantis Green (a beautiful very dark green) Hybrid with 8915 miles on it, the first thing you notice is that it has what Ford calls the “Silent Start” system. As you can figure out on your own, this means that there is no “cranking” of the starter or “turning over” of the engine like in conventional cars. Instead, you twist the key (key? that’s so 20th century, Ford), and you take it on faith that the car has actually started. The only way I really knew it was ready to go is I put it in gear and it went.

The next thing you notice is the video game-like graphics populating the various infotainment screens -

one on either side of the central speedo (Dual LCD SmartGauge™ Cluster with EcoGuide) and the larger navigation screen on the center stack. The screen on the left side of the speedo contains various combinations of information that indicate how the engine and battery are working together. You can choose from 4 levels of information called Inform, Enlighten, Engage or Empower.

Inform is the most basic, and it only shows you the battery charge level. Next up is Enlighten, which adds a tach and an indication of the battery power being used. Engage adds the engine power being used to go with the battery, so you can try to maximize the battery usage vs. the engine. Empower offers the highest level of information. It shows you how much power you are using for the accessories (radio, climate control, lights, etc.) and also shows you how close you are to the gas engine on/off threshold vs. total power demand. This can help you to feather the accelerator to stay in the battery-powered area as long as possible if you are looking to maximize fuel economy. when you are in electric-only mode, you get rewarded with a green section at the bottom of the screen that says “EV”. At all levels except Inform, arrows on the battery charge graph show if the battery is being used or charged at any given time. It also shows green circular arrows when the regenerative brakes are active.

At this point, I should point out that the regenerative brakes are a bit of a problem. All 17,600 units built before 10/17/2009 have a software glitch that can result in a perceived loss of braking power as it shifts unnecessarily from regenerative brakes to regular. There is no actual loss of power, but the driver will have to apply extra force to obtain the necessary braking. No injuries have been reported. I experienced no brake issues of any kind.

The right side of the display shows instant fuel economy and either “efficiency leaves” or the recent efficiency as a bar graph. The leaves grow and produce more leaves as you drive efficiently, and loses them when you don’t. It’s fun to try to grow as many leaves as possible. I think that’s the point. It also shows you a trip summary every time you turn off the car, including trip fuel economy, distance traveled, gallons used and long-term fuel economy.

So how does it drive? For the most part, just like a “regular” Fusion. Which is to say, very well. The combined 191 horsepower is plenty for normal, even spirited, driving. It isn’t going win you any pinks at Thunder Road, though. But if that’s what you want, you can opt for one of the 2 different V6s (3.0L or 3.5L) that are available on the petrol Fusion. It also handles very well in the curves and the brakes, especially with the regenerative system (which uses the braking energy usually lost as heat to recharge the battery) are very good.

The Fusion Hybrid can drive up to 47 MPH in electric-only mode. I was “only” able to achieve 42 MPH. For comparison, a Toyota Prius can go 25 MPH on the battery alone. When I turned off the fan and the radio, the Fusion was so quiet in EV mode that when it came to a stop, you could clearly hear the various fluids sloshing around in their respective receptacles. It’s a bit like drinking a big glass of water and then doing jumping jacks. I never heard that in a car before.

Issues? A few. The EV mode doesn’t seem to be available when you first start driving. This is unfortunate, because emissions and fuel economy are both much worse when the engine is cold. If the battery could be utilized (assuming it is charged enough) to power the car and heat up the engine at start, both fuel economy and emissions would improve. By not having battery power available until the engine is heated completely, you also don’t get much help from the battery on a very short trip. Because my test was done in Michigan in February, the cold weather is at least partially responsible for this. Batteries simply don’t function as well in the cold.

Usually, as the computer shifts between gas, battery power and both, you do not notice it at all. As I found out testing the car, this is because you are normally applying the throttle at the time (when it shifts from battery to gas), or maybe not at all (when it shifts from gas back to battery). However, if you are attempting to maximize your economy by using the accelerator very lightly, the car shutters noticeably when shifting from EV to gas. It isn’t a violent shutter, but it is noticeable.

One other nit. As shown in the table, the hybrid gives up almost 30% of its trunk space, due to the hybrid systems. I guess this is to be expected; the battery has to go someplace, but it comes at a price.

In a variety of driving - stop & go city, highway, very gentle to full throttle, I came away very impressed with the Ford Fusion Hybrid. Overall, this is a solid performer. It gets better fuel economy than the Toyota Camry Hybrid (41/36/39 vs. 33/34/34), and the Fusion overall is more reliable than the Camry, according to Consumer Reports.

Rating: 8½ out of 10. Excellent, but not perfect.

	Fusion Hybrid	Fusion I4 SEL
Base Price (MSRP)	$28,675	$25,380
Engine	2.5L I4 w/HEV	2.5L I4
Horsepower	191	175
Torque	136	172
Transmission	CVT Automatic	6-speed automatic
EPA Fuel Economy (city/hwy/combined)	41/36/39	22/31/25
Curb Weight (lbs.)	3725	3342
Fuel Tank Capacity (gallons)	17	17.5
Range (city/hwy/combined)	697/612/663	385/542/437
Trunk Capacity (cubic feet)	11.8	16.5
Major Equipment Differences:
Reverse Sensing System	Standard	Optional
110-volt Power Point	Standard	NA
Ambient Lighting	Standard	NA
Dual LCD SmartGauge™ Cluster with EcoGuide	Standard	NA
6CD Changer instead of Single CD	Standard	NA
Fold down Split Rear Seat	NA	Standard
Eco-Friendly Cloth Seating	Standard	NA
Leather-trimmed and Heated Seats	Optional	Standard
Dual Exhaust	Standard	NA
Regenerative Braking System	Standard	NA
Driver’s Knee Airbag	Standard	NA

The Slandy Report first told you about the Prius brake issue back in December, before it was known to most of the general public. Back then, they had only recalled 3.8 million vehicles for accelerator issues. That number is now over 8 million. Back then, Toyota was not the subject of congressional investigations for potentially withholding evidence of the safety defect and for stalling before doing anything about it. Now they are. Back then, their stock was trading in the US at almost $85. Now, Toyota’s market capitalization has lost about $18 billion, or more than 15% of its value in those 6 weeks. Apparently, much can happen in 6 weeks. The Lions, however, didn’t win anymore games. They still suck. But I digress.

Toyota acknowledged the Prius issue today with this release:

Toyota is aware that NHTSA has opened a Preliminary Evaluation centered on owner complaints of a braking issue with the 2010 model year Prius. Toyota will cooperate fully with NHTSA’s investigation.

Some customers have complained of inconsistent brake feel during slow and steady application of brakes on rough or slick road surfaces when the anti-lock brake system (ABS) is activated in an effort to maintain tire traction.  The system, in normal operation, engages and disengages rapidly (many times per second) as the control system senses and reacts to tire slippage.  A running production change was introduced last month, improving the ABS system’s response time, as well as the system’s overall sensitivity to tire slippage.

This preliminary evaluation addresses owner complaints specific to the 2010 Prius.  This condition is not related to either the floor mat entrapment recall or the sticky pedal recall currently in action.

Toyota will continue to evaluate the condition as it relates to owner complaints and will keep NHTSA informed of its progress.

At this rate, all of Toyota’s vehicles will be the subject of 1 or more recalls. Which is next, the 1957 Toyopet (the vehicle that launched Toyota’s sales in the US market)? It seems that Toyota can’t buy break (pardon the pun) these days. It seems that they are suffering from the same ailment that has infected the Detroit 3. for a long time, they could do no wrong and their sales were only limited by their ambition. They made the age-old error: they began to believe their own press. They have violated the basic tenants of their own systems that are the source of their great success to this point, believing they could violate them at will with no consequences. They were wrong.

That’s what I think - how about you? Please leave your comments below.

Perhaps you’ve been following the news about Toyota’s “issues”. Perhaps, even, you know a bit about automotive design and engineering and can see through the PR-speak and the smoke screen that they tend to put up in front of the real truth. If so, then you have already come to the same conclusion that I have. Congratulations, but this column is not for you. This column is for the people who are taking all of the news in, and are confident that Toyota is the greenest, most altruistic company that has ever walked (several inches above) the Earth. Toyota makes the best cars and trucks anywhere, and this little glitch only proves that they’re human, even if all previous evidence indicates that their headquarters is not in Japan, but on top of Mount Olympus.

To recap, Toyota is recalling over 8 million vehicles around the world for 2 separate, but similar, problems. In some vehicles, the floor mats can interfere with the gas pedal and cause it to stay depressed even when the driver takes their foot off of it. The other is for gas pedals that, on their own, stay depressed when the driver intends to slow down. Different problems, same effect - the car doesn’t slow down when the driver intends it to slow down.

Toyota maintains that the floor mat issue is simple to fix - the mat just needs to be secured properly. In other words, customer error. Toyota is taking the step of recalling the affected vehicles to fix this.

In the other, Toyota blames the pedal itself, and said a few days ago that it has a fix for cars on the road. A small metal part will be inserted into the accelerator pedal assembly to make sure that the pedal’s springs will work as intended and force the pedal up when the customer takes their foot off.

So far, so good, right? Wrong. Toyota says only the pedals made by CTS, an Indiana supplier, are affected. Pedals made by the other supplier, Denso, are not. Denso, by the way, is partly owned by Toyota. In the world of automotive purchasing, such an arrangement is called “dual-sourcing” (as opposed to “single-sourcing”). Two (or more) companies make the same part for the same vehicle from the same set of specifications from the automaker, and are used interchangeably. Neither Toyota nor the government has indicated that CTS is to blame in any way, but only its pedals need to be fixed, not Denso’s. The pedal design is to blame, according to everybody. If it’s a design issue, then why are Denso’s parts not part of the problem?

Something doesn’t add up.

Next, the issue being “fixed” is being called unintended acceleration, as in “the car keeps going faster than I want it to.” No matter if you’re talking about the floor mat issue or the pedal issue, neither one will make the car or truck go faster. The both would prevent the car from slowing down. Big difference. To be fair, to a panicking driver, these would likely feel very much the same, so maybe this is a case of a badly worded problem. However, if that were the case, wouldn’t Toyota or the US government use the proper wording when describing the problem? If the cars are, in fact, accelerating, Toyota’s “fix” won’t “fix” anything. It will simply pacify the masses while they really try to figure out the problem. If they really are accelerating, then the problem is likely to be in the vehicle’s electronics, in the software code that makes modern cars and trucks (usually) so reliable and fuel-efficient. Toyota itself said during a meeting with a congressional committee that “…sticking accelerator pedals are unlikely to be responsible for the sensational stories of drivers losing control over acceleration as their cars race to 60 miles per hour or higher.” In addition, there have been reports of the acceleration issue in vehicles that are not subject to either recall.

Something doesn’t add up.

Also, less than 2 weeks ago, Toyota said it did not know what the problem was, nor how to fix it. Yet on Monday, February 1, Toyota announced the fix, complete with a diagram, saying, “Toyota’s engineers have developed and rigorously tested a solution…” Toyota went from still investigating to a “rigorously tested” solution is less than 2 weeks. Just how “rigorous” is this solution?

Something doesn’t add up.

If the “solution” is so good for the cars already on the road, why then is the solution for cars and trucks yet to be built different? That’s right, kids, CTS is already making a redesigned accelerator pedal for the factory to use after they are back up and running next week. It is NOT the same pedal with an extra part inserted, as described above for cars on the road. Why?

Something doesn’t add up.

If the various “fixes” that Toyota is implementing do not correct the problem, they will have a PR problem that will make the Pinto look like a schoolyard argument. And something else won’t add up, either. Toyota’s sales and profits.

That’s what I think - how about you? Please leave your comments below.

As was expected, Tesla Motors, Inc. filed its registration statement of its intent to sell stock to the public. It intends to raise as much as $100 million in the offering. No expected date was given for the offering. Stay tuned. If you’ve never read a Form S-1, try it sometime. Because it constitutes a legal document which could form the basis of a shareholder lawsuit someday, companies are brutally honest in the document. This is so they can say in court, “We told you so” if needed to fend off a fraud or other claim down the road. So it can indeed be an interesting read.

Here’s a tidbit from Tesla’s S-1 that anybody who follows the auto industry would find interesting. It is in the “Risk Factors” section of the S-1:

We anticipate that we will experience a decrease in revenues and increase in losses prior to the launch of the Model S.

Prior to the launch of our Model S, we anticipate our automotive sales may decline, potentially significantly as we do not plan to sell our current generation Tesla Roadster after 2011 due to planned tooling changes at a supplier for the Tesla Roadster, and we do not currently plan to begin selling our next generation Tesla Roadster until at least one year after the launch of the Model S, which is not expected to be in production until 2012…As a result, we anticipate that we will generate limited, if any, revenue from selling electric vehicles after 2011 until the launch of our Model S. The launch of our Model S could be delayed for a number of reasons and any such delays may be significant and would extend the period in which we would generate limited, if any, revenues from sales of our electric vehicles. The expected decrease in revenues for the periods prior to the launch of the Model S may be significant and could materially and adversely affect our business, prospects, operating results and financial condition and our ability to fund operating losses could seriously constrain our growth.

So Tesla will be essentially out of business for some period beginning sometime next year for at least a few months, and that assumes the Model S arrives on time. Because the Model S is Tesla’s first vehicle that they are designing from the ground up, it is reasonable to assume that they will have some delays and/or other problems. In fact, it is unreasonable to assume that they will NOT have any delays. The major auto companies, with decades of experience, regularly encounter problems or delays that they can not foresee. In fact, given the nature of the S-1, Tesla has enumerated the potential risks of successfully launching the Model S:

Our production model for the non-powertrain portion of the Model S is unproven, still evolving and is very different from the non-powertrain portion of the production model for the Tesla Roadster.

Our future business depends in large part on our ability to execute on our plans to develop, manufacture, market and sell our planned Model S electric vehicle. To date our revenues have been principally derived from the sales of our Tesla Roadster. The Tesla Roadster has only been produced in low volume quantities and the body is assembled by Lotus Cars Limited in the United Kingdom, with the final assembly by us at our facility in Menlo Park, California for sales destined in the United States. We plan to manufacture the Model S in higher volumes than our present production capabilities in our planned manufacturing facility. As a result, the non-powertrain portion of the production model for the Model S will be substantially different and significantly more complex than the non-powertrain portion of the production model for the Tesla Roadster. In addition, we plan to introduce a number of new manufacturing technologies and techniques, such as a new painting process and aluminum spot welding systems, which have not been widely adopted in the automotive industry. Our Model S production model will require significant investments of cash and management resources and we may experience unexpected delays or difficulties that could postpone our ability to launch or achieve full manufacturing capacity for the Model S, which could have a material adverse effect on our business, prospects, operating results and financial condition.

Our production model for the Model S is based on many key assumptions, which may turn out to be incorrect, including:
• that we will be able to identify and secure an appropriate facility for the manufacturing of our Model S;
• that we will be able to secure the funding necessary to build out and equip the manufacturing facilities in a timely manner, including meeting milestones and other conditions necessary to draw down funds under our loan facility with the DOE;
• that we will able to develop and equip the manufacturing facilities for the Model S without exceeding our projected costs and on our projected timeline;
• that the equipment we select will be able to accurately manufacture the vehicle within specified design tolerances;
• that our computer aided design process can reduce the product development time by accurately predicting the performance of our vehicle for passing relevant safety standards, including standards that can only be met through expensive crash testing;
• that we will be able to obtain the necessary permits and approvals, including those under the California Environmental Quality Act and the National Environmental Policy Act, as well as building and air quality permits, to comply with local zoning, environmental and similar regulations to operate our manufacturing facilities and our business on our projected timeline;
• that we will be able to engage suppliers for the necessary components on terms and conditions acceptable to us and that we will be able to obtain components on a timely basis and in the necessary quantities;
• that we will be able to deliver final component designs to our suppliers in a timely manner;
• that we will be able to attract, recruit, hire and train skilled employees, including employees on the production line, to operate our Model S manufacturing facility;
• that we will be able to maintain high quality controls as we transition to an in-house manufacturing process; and
• that we will not experience any significant delays or disruptions in our supply chain.

If one or more of the foregoing assumptions turns out to be incorrect, our ability to successfully launch the Model S on time and on budget if at all, and our business prospects, operating results and financial condition may be materially and adversely impacted.

We have no experience to date in high volume manufacturing of our electric vehicles. We do not know whether we will be able to develop efficient, automated, low-cost manufacturing capability and processes, and reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to successfully mass market the Model S. Even if we are successful in developing our high volume manufacturing capability and processes and reliable sources of component supply, we do not know whether we will be able to do so in a manner that avoids significant delays and cost overruns, including as a result of factors beyond our control such as problems with suppliers and vendors, or in time to meet our vehicle commercialization schedules or to satisfy the requirements of customers. Any failure to develop such manufacturing processes and capabilities within our projected costs and timelines could have a material adverse effect on our business, prospects, operating results and financial condition.

Given this, and because Tesla has not made any money yet, could a significant delay in the launch of the Model S spell the end of Tesla? Will Elon Musk be willing to continue to fund the operations from his petty cash account? Of course, Tesla was awarded a $465 million loan to develop the Model S by the US government. If they go out of business, will Musk be asked for the taxpayers’ money back? If so, will he use PayPal?

That’s what I think - how about you? Please leave your comments below.

Toyota’s problems seem to multiply everyday. The latest in the saga of Toyota’s quality issues involves other car companies, namely General Motors and Ford. Yesterday, GM added an extra incentive to its existing ones specifically for Toyota and Lexus owners, giving them an extra $1000 which they can apply in three ways: 1. Those who choose to lease a vehicle may waive three payments for up to a total of $1,000. 2. Qualifying customers who are financing a vehicle purchase can receive 0 percent financing for up to 60 months. 3. Cash buyers can receive $1,000 off their purchase. It is noteworthy that GM did not “announce” this new incentive. They didn’t want to appear like they were gloating over Toyota’s situation. Ford followed suit shortly thereafter, but with a twist. Ford’s program targets people who own Honda, Acura, Toyota, Lexus or Scion vehicles that are 1995 models or newer. The owners of eligible vehicles would get $1,000 for trade-in assistance on either a purchase or lease of a new Ford, Lincoln or Mercury vehicle. That money is stackable on any other incentives already on a Ford Motor product.

In straw #2, the suppler of the pedals in question, CTS, (sort of) fired back at Toyota. Toyota, you might remember, was quick to drive a bus over CTS by naming them as the supplier of the faulty pedals, prompting some reporters (me) to question where the buck stops at Toyota. Mitchell Walorski, head of CTS Corp. investor relations, said the Elkhart, Ind., supplier is not part of the problem. CTS has “no knowledge of any accident or injury” stemming from the accelerator assemblies it supplies Toyota, he said. Walorski told Automotive News that CTS engineers are assisting Toyota, “but this is their recall.” CTS was not consulted about Toyota’s decision to issue the recall or to halt certain vehicles’ sales, he said.

In straw #3, the National Auto Auction Association announced that all of its member auctions would be required to make an announcement concerning the affected vehicles at their auctions. This is regular procedure for any auctions that have issues, and NAAA said Toyota is no different. The reason is simply full disclosure so everybody knows what they are getting. The impact is that Toyota’s residual (resale) values just took an immediate and substantial hit, which will affect trade-in values and, further down the road, lease payments. A lower residual value makes the lease payment higher, absent additional incentives. So lower residuals will hurt sales (especially leasing) or make them more costly to Toyota.

Straw #4 is an update to #3. The NAAA changed course and advised its member auctions to halt the selling of the affected Toyota models until the issues are resolved. This takes the ramifications in #3 and magnifies them significantly.

Straw #5 concerns rentals. All of the largest rental companies -  Hertz, Enterprise, Alamo, National, Avis, Budget, Dollar and Thrifty - all said they would stop renting vehicles covered in the recall.

In Straw #6, Toyota yesterday said it would recall an additional 1.1 million autos in the United States to fix floor mats that may jam accelerator pedals and cause unintended acceleration. The action is an extension of last fall’s recall, in which Toyota recalled 4.3 million vehicles in its largest-ever U.S. safety action. Today’s amended recall involves 2008-10 Highlanders and 2009-2010 Corollas, Venzas, and Matrixes, Toyota said in a statement. The action also covers 2009-2010 Pontiac Vibes made in a joint venture with General Motors Co. This brings the total units recalled for the 2 separate problems to over 6 million.

Lucky Straw #7 goes overseas. Toyota announced that it will extend the recall to an estimated 2 million units in Europe and about 75,000 in China. Let’s see, that now makes over 8 million units worldwide, about the same as Toyota sells worldwide in a year.

For Crazy Straw #8, Ratings agency Fitch, placing Toyota on watch negative, said the recalls and production suspension damaged Toyota’s reputation for quality and could hamper its recovery. If they ultimately lower Toyota’s credit rating, this will make borrowing to fund operations more costly. If it is only a short-term hit, then it will be unlikely to affect Toyota very much, as Toyota has more cash on hand the the pharaohs did.

I wonder if the camel’s back is getting weary yet?

As you might expect, all these straws are having an effect on Toyota’s stock. It has fallen over 15% since last week, reducing the camel’s market capitalization by $25 billion. That’s not going to make the shareholders very happy.

That’s what I think - how about you? Please leave your comments below.

On the heels of the latest recall of 2.3 million additional vehicles a few days ago, Toyota announced today that it is suspending sales and production of 8 models whose accelerator pedals are the subject of the latest recall. Toyota does not yet have a fix for the problem, so it is taking this step to prevent any more of the vehicles from getting into customers’ hands (and feet) until the problem is corrected.

“Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company,” said Group Vice President and Toyota Division General Manager Bob Carter. “This action is necessary until a remedy is finalized. We’re making every effort to address this situation for our customers as quickly as possible.”

Toyota’s accelerator pedal recall and suspension of sales is confined to the following Toyota Division vehicles: 2009-2010 RAV4, 2009-2010 Corolla, 2009-2010 Matrix, 2005-2010 Avalon, certain 2007-2010 Camry, 2010 Highlander, 2007-2010 Tundra and 2008-2010 Sequoia.

No Lexus Division or Scion vehicles or other Toyota division models are affected by these actions.

Obviously, if sales are being halted until a resolution is finalized, Toyota wants to stop production of the affected models. Therefore, the following plants in North America are also going to be shut down the week of February 1 to avoid making more units with the problem. Why not halt production right now? Because production schedules are set far in advance and it is very difficult to stop in the middle of a week. In an emergency, they of course could and would stop production. This isn’t an emergency though. The affected plants are Toyota Motor Manufacturing, Canada (Corolla, Matrix, and RAV4), Toyota Motor Manufacturing, Indiana (Sequoia and Highlander), Toyota Motor Manufacturing, Kentucky – Line 1 (Camry and Avalon), Subaru of Indiana Automotive, Inc. (Camry), Toyota Motor Manufacturing, Texas (Tundra). Shutting down this many facilities will force the shut down of many supplier plants. Toyota did not indicate whether their workers would go on temporary layoff, but Toyota typically does not lay off workers. It will likely reassign the workers to maintenance work and/or training during that week. Workers at Toyota’s many supplier companies will not likely be so lucky.

I keep saying it, but it bears repeating. Toyota has built its entire reputation on its quality. With all of the quality lapses recently, it is only a matter of time until sales start to reflect the damaged reputation. The question is not “if” but “when” and “how much” the sales will be hurt.

That’s what I think - how about you? Please leave your comments below.

In what has been an ongoing saga worthy of Charlton Heston epic, GM has finally decided that selling Saab for something is better than spending millions to shut it down. Apparently, the GM Board consulted with its economic advisors, who told them, “Getting money is better than spending it.” According to an insider, the board has formed a blue-ribbon committee to find out if this principle can be applied to other parts of the business.

The Swedish government has reviewed the transaction and the related request for guarantees of a Saab Automobile loan that has been requested from the European Investment Bank, and has apparently approved it.  Assuming quick action, the transaction is expected to close in mid-February, and previously announced wind down activities at Saab will be immediately suspended, pending the close of the transaction.

As part of the agreement, Spyker intends to form a new company, Saab Spyker Automobiles, which will carry the Saab brand forward.  The sale will be subject to customary closing conditions, including receipt of applicable regulatory, governmental and court approvals.  Other terms and conditions specific to the sale will be disclosed in due time.

As part of the deal, GM will get $74 million cash, $326 million of preferred stock, plus some other consideration that GM refused to identify. GM will also continue to provide powertrains, the upcoming 9-4x finished vehicles and engineering services on an ongoing basis. GM will continue to honor warranties until Saab Spyker sets up organizations in markets around the world. No word yet on whether the present plan to close down some of the Saab dealers will proceed under Saab Spyker.

That’s what I think - how about you? Please leave your comments below.

This is getting very repetitive. Yesterday, Toyota announced that it is recalling ANOTHER 2.3 million units to fix a sticky accelerator pedal. Trade journal Automotive News reported that the newly identified problem is caused by a mechanism that controls the accelerator pedal’s return to the idle position after being pressed to the floor. This problem is unrelated to a similar acceleration problem related to the pedal getting stuck under the floor mats.

Yesterday, Toyota spokesman John Hanson said the problem is rare and stems from pedals that “prematurely wear” because of a supplier’s faulty pedal design. Today he said condensation can prevent the pedal from fully springing back into position, but he did not identify fixes Toyota is reviewing. He also said the issue involves only part supplier CTS, one of the two parts makers that build the pedal mechanisms for Toyota. Interesting how Toyota is blaming its supplier for the problem. Where exactly does the buck stop?

This recall covers 2005-10 Avalons, 2007-10 Camrys and Tundras, 2008-10 Sequoias, 2009-10 Corollas, 2009-10 RAV4s, 2009-10 Matrixes, and 2010 Highlanders.

Toyota (literally) built its reputation in the US based on its “bulletproof” quality. Customers have been known to buy Toyota products only because of the actual and perceived quality advantage over other manufacturers’ products. They gave up other attributes such as style and features and excitement to get the quality. With Toyota now at the top of the US recall list (therefore losing the “actual” part of the equation), one wonders whether those customers will now have any reason to shop at the Toyota store at all. Past slogans such as “Who could ask for anything more!” and “Oh what a feeling!” and ”I love what you do for me..Toyota!” take on new meaning with all of Toyota’s recent quality issues.

That’s what I think - how about you? Please leave your comments below.

Out to make all the other cars green with envy, Chevrolet introduced a new special version of the hot-selling Camaro this week. Dubbed the Camaro Synergy Special Edition, the new Camaro is a 1LT (V6) with a fancy paint job. Along with the fancy green paint job come racing stripes and a special interior, with Synergy Green instrument panel and door inserts. Synergy Green stitching also accents the Jet Black cloth seats, steering wheel, shift knob and center console.

The Special Edition also includes the Camaro Convenience and Connectivity Package, with Bluetooth phone connectivity, USB port for MP3 players, and remote vehicle start for models equipped with an automatic transmission.

“The Synergy Special Edition package is designed for customers who want a unique performance car at an attainable price,” says Camaro marketing manager John Fitzpatrick. “For under $27,000, Camaro Synergy Special Edition offers standout styling, modern technologies like Bluetooth, and 304 horsepower under the hood.”

This class of car has always been about more than muscle (although muscle is a vital part); it’s been about fashion as well. That’s why Camaros, Mustangs, Challengers and others are among the most customized vehicles. Everybody wants one that is different from everybody else’s. Manufacturers have gotten in on the act, catering to those who have no interest in doing the customizing themselves, but still want the unique look. This is just the latest example. Ford tried to institutionalize this with their Vehicle Personalization division, which met with mixed success.

Back to this car, which is a great looking addition to the already hot Camaro lineup. Synergy will be produced in limited quantities from February to May only, so get yours today!

That’s what I think - how about you? Please leave your comments below. Just click on “Comments.” It’s so easy, even you can do it. But not a caveman.

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