Chevrolet (don’t call us Chevy) announced today a new program that will allow buyers of Corvette Z06 and ZR1 models to build the engine for their car! OK, they get to “help” build it, under heavy supervision. But still, how cool is it to have the opportunity to do this? I can tell you exactly how cool it is - $5800 cool. That’s how much Chevrolet charges for the PBC (”Corvette Engine Build Experience”) option on the Z06 and ZR1. PBC stands for Performance Build Center, which is the name of the facility in Wixom, Michigan that hand-builds the engines in those versions of the Corvette, as well as the Grand Sport’s.

Lest you cynically think that this is a way to avoid warranty coverage, GM says, “Like all engines assembled at the PBC, Engine Build Experience engines are covered by Chevy’s (sorry, I’ll try to use the more grown up word next time) five year / 100,000-mile transferable powertrain warranty.”

The cynic in me is shocked that the General would actually allow any moron with the money to enter their plant, let alone build an engine that will still have a warranty - even under the heavy supervision. GM’s legal staff must be pulling out what is left of their hair over this one. Remember, these are the same legal eagles that killed the Corvette ad that showed a kid dreaming about driving a Corvette, because it was irresponsible to have a kid driving. They also tried to kill a Chevy (really…I’m trying) ad that showed Chevrolet (ha! did it!) cars and trucks driving onto a car carrier already driving at highway speed.

Still, this is way cool, and if I had $5800 (on top of the $75,235 MSRP for a Z06 or $109,130 MSRP for a ZR1), I would sure do it. As Jim Campbell, VP of Chevrolet (twice in a row!) said, “Simply put, no other sports car manufacturer can match the level of personal customer involvement that Corvette offers. The Corvette Engine Build Experience takes this personal involvement to an unprecedented level.”

That’s what I (and Jim) think. How about you? Please leave your comments below.

Toyota and Tesla jointly announced a new joint venture to develop and build electric vehicles (EVs). As part of the deal, Toyota will invest $50 million in Tesla, and Tesla buys the New United Motor Manufacturing Incorporated (NUMMI) factory in California. The NUMMI plant was previously a joint venture of Toyota and General Motors. The NUMMI plant, in Freemont, California, began production in 1984 after being a “regular” GM plant from 1962-1982. As a NUMMI plant, it produced vehicles such as the Chevrolet Nova, Pontiac Vibe, Toyota Tacoma and Toyota Corolla. Tesla plans to produce the Model S, which Tesla expects to be the world’s first all-electric sedan, at the plant in 2012. They also said other future Tesla vehicles would be produced there.

The announcement was short on details, with the usual fluffery where Toyota said how great Tesla is and vice versa. The full text of the joint announcement is below.

Bloomberg is reporting today that Ford plans to kill the Mercury brand - again. At least twice in the last decade, Mercury was on the chopping block, only to be given a stay of execution. The Ford family, specifically Elena Ford, has vetoed efforts by management to kill off the brand in the past.

Mercury was created in 1939 by Edsel Ford as a bridge between the mainstream Ford brand and the luxury Lincoln brand. Mercury products have lately been nothing more than Fords with more features and (slightly) fancier styling. Mercury’s present lineup shows this: Milan (Fusion twin), Mariner (Escape), Mountaineer (Explorer) and Grand Marquis (Crown Victoria). The last time Mercury had a unique vehicle (not shared with a Ford) was in 2002, when Mercury last sold the Cougar and the Villager minivan (though the Villager was engineered by, and shared with, Nissan).

1967 Mercury Cougar

In 1999, Ford planned to kill the Mercury brand by phasing out the lineup and eventually “encouraging” Mazda dealers and Lincoln dealers to dual with the other brand. They saw Mercury sales dwindling and Mazda sales going in the opposite direction. The plan was set, and the future product (”cycle”) plan was modified to reflect Mercury’s demise. Then the company got cold feet. A powerful combination of the Ford family and Lincoln Mercury dealers killed the plan before it really got going. The Ford family opposed it due to sentimental reasons (the tragic story of Edsel and Mercury being his creation was a big part), while the dealers didn’t like the idea of selling Japanese cars.

1982 Mercury Capri RS

Many at Ford had already mentally written off the Mercury brand, and the reversal left Mercury without a plan for future products. Instead of taking the opportunity to “reboot” the brand into something other than fancy Fords, the company went back to the old ways and hastily threw some money at Fords with different lights and grilles. It was a self-fulfilling, defeatist attitude that went something like this, “Mercury sales suck, so let’s not spend too much money on Mercury products. That way, we won’t have to sell too many to get a return on the money.” Of course, spending very little on badge-engineering ensured the sales would suck, and the geniuses who made the decision patted themselves on the back for not spending the money (”See, I told you the sales would suck - aren’t you glad we didn’t spend the money?”).

Ford missed an opportunity to have its cake and eat it too. Ford had (and still does have) wonderful products in overseas markets around the world that it could have used to give Mercury unique products without the cost of developing a stand-alone product for Mercury. Ford could have assembled a collection of Ford’s European and Asian products, including some vehicles that Mazda sold in Japan, but not in North America. There would have been costs associated with homologation and importation, but nowhere near the costs of engineering a new product from scratch.

1955 Mercury Montclair

Again in 2005, Ford looked at eliminating Mercury. Detailed analyses of sales volume and profit & loss were presented to senior management, but again, the idea was crushed. There were fears of Lincoln Mercury dealer profits and the heavy hand of the Ford family was in the middle somewhere.

Since Alan Mulally showed up, Mercury has seen its lineup shrink to the present 4 vehicles mentioned above. And now Ford is apparently going through the same exercise again. So what’s different this time? Mulally and the cash situation are the major ones. Mulally isn’t so tied to the past and will make the decision that is best for the company, regardless of sentiment. Also, while Ford is doing better than just about anybody in the industry right now (though that isn’t saying much), they still have a tremendous amount of debt to consider, and cash is tight.

1971 Mercury Cyclone GT

What about the dealers? The Lincoln Mercury dealers have made the argument in the past that they wouldn’t have enough volume to survive if Ford pulled the plug on Mercury. Is that still true? Lincoln has, arguably, its best lineup ever right now, but is it enough to keep the dealer body healthy? They have 6 vehicles for sale (MKZ, MKX, MKS, MKT, Navigator and Town Car), but the Town Car goes away completely after the 2011 model year. That leaves 5 mostly alphabet soup names and a giant SUV. For the dealers’ sake, I hope that the pipeline is full of new Lincolns and freshenings of existing models.

Even assuming that Ford can keep the dealers happy and profitable with just Lincoln, does Mercury really need to go the way of Plymouth, Saturn, Pontiac, et al? I have the same argument against pulling the Mercury plug as I did with Pontiac. Why pull it? Mercury could remain as a niche product, with maybe 2-3 vehicles. If Ford really does have a plan for Lincoln, the dealers wouldn’t be reliant on the Mercury volume, so there would be no need to have a full lineup of Mercurys. Engineering/R&D are only approved for programs that can pay back the investment anyway, so that wouldn’t be an issue. There is already a distribution network, so that’s OK too. Assembly plant capacity could be an issue, but if Ford can utilize existing platforms for Mercury (without relying on badge engineering), it should be able to use existing plant capacity as well. The only other consideration is advertising. In the auto industry, most advertising is for vehicles, not brands. There would only need to be advertising for the vehicles that you are offering, and everybody knows what a Mercury is already, so no cost to “launch” the brand.

1963 Mercury Marauder

I know this isn’t a strong argument for why Ford should keep Mercury, but an argument for why they shouldn’t feel the need to kill it. The Mercury brand has survived 70+ years. It would be a shame to allow it to die now for the wrong reasons.

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

First, Chevrolet took some of the work from Campbell-Ewald, their ad agency for 91 years. Campbell-Ewald was Chevy’s partner for almost their entire existence, and was responsible for memorable ad campaigns such as “See the USA in Your Chevrolet”, “The Heartbeat of America”, “Like a Rock” and “American Revolution”.

Chevy gave the car and crossover work to Publicis late last year. Then, 4 weeks ago, Publicis was given the rest of the Chevy account.

Now, there’s a new sheriff in town, and he likes Goodby, Silverstein and Partners, so they now have the Chevrolet account all to themselves.

Certainly, GM and Chevrolet have the right to change their agency every week if want. But the awarding of multi-million dollar agency contracts shouldn’t be subject to the whim of the executive du jour. It should be based on some criteria that makes business sense. Publicis didn’t have the business long enough to have made any mistakes, and the awarding of the business to Goodby Silverstein and Partners happened too fast after the arrival of Joel Ewanick to have been the result of a true review. In fact, Goodby Silverstein and Partners had the Hyundai business while Ewanick was there. Coincidence? Hardly.

Chevy made the announcement today with the following statement:

All advertising work for the Chevrolet brand in the U.S. has been awarded to Goodby, Silverstein and Partners, moving from Publicis Worldwide and Campbell-Ewald.  This transition will begin immediately.

“Based on my personal experience working with Goodby, Silverstein and Partners, I’m confident they have the creativity and ability to take the iconic Chevrolet brand to the next level – and to do it fast,” said Joel Ewanick, vice president, U.S. Marketing.

“Chevrolet is focused on fuel-efficient cars, crossovers and trucks, as well as innovative advanced-technology products like the Volt.  With the Volt and the all-new Cruze launching later this year, we look forward to working with Goodby, Silverstein and Partners to build on the momentum that Chevrolet already has going in the market,” said Jim Campbell, U.S. vice president, Chevrolet Marketing.

Goodby, Silverstein and Partners will open an office in Detroit to support the Chevrolet account.  The agency worked with GM’s Saturn brand from 2002 until 2007.

2011 Jeep Grand Cherokee

Jeep released images yesterday of the all-new 2011 Jeep Grand Cherokee, which went into production this week atChrysler’s Jefferson North Assembly Plant in Detroit. This is the 4th generation of the Grand Cherokee, originally introduced in 1992. It is completely reengineered and redesigned for 2011 – with a new sculpted body, athletic profile, panoramic dual-pane sun roof and an interior with premium soft-touch materials. The 2011 Jeep Grand Cherokee features Chrysler’s all-new 3.6-liter Pentastar V-6 engine that boasts an 11 percent improvement in fuel economy and delivers up to 23 mpg and more than 500 miles on one tank of gas. Capability highlights include a choice of three 4×4 systems, new Jeep Quadra-Lift™ Air Suspension and Selec-Terrain™ systems and towing capability of 7,400 lbs. On-road dynamics are improved courtesy of new independent front and rear suspension systems and a new body structure that dramatically increases torsional stiffness.

Jeep Grand Cherokee Laredo 4×2 models start at a sticker price of $30,995 - $495 lower than the outgoing model. Grand Cherokee Laredo 4×4 models start at $32,995 - $465 lower than the outgoing model. The Overland model is the top of the line, with a price of $42,995 in 4×4 guise. The Limited model slots in between. The 2011 Grand Cherokee arrives in Jeep showrooms next month.

It is hard to overstate the importance of this product launch to Chrysler. Before Fiat’s present management, Chrysler was run by Daimler, which cost-cut the products into irrelevance, and then Cerberus, which cut the cupboard bare of new product investment. There is very little new product coming in the short-term, so it is very important that the new launches it does have are home runs. Chrysler plans to make improvements to just about every product in the next year, but no major launches outside of the Grand Cherokee and the Chrysler 300/Dodge Charger due later this year until Fiat-based new products start coming next year and the year after. The Grand Cherokee looks like a winner, but SUV sales are down overall, which will limit the sales potential. Ford and GM, though, have abandoned the true, off-road (mid-size) SUV market, leaving the market to Jeep, Nissan (Xterra & Pathfinder) and Toyota (4Runner).

2011 Jeep Grand Cherokee Overland

The Chevy Volt, due out late this year, is being produced in small quantities for testing and evaluation at the company’s Hamtramck Assembly plant in Detroit. Before it was even ready for that step, it was produced at the preproduction facility at GM’s Tech Center in Warren, Michigan. GM gave the National Geographic Channel full access to the preproduction center. NatGeo takes you through the whole process, from creating molds to stamping, welding, painting and final assembly and trim. The videos below make up the whole show. While watching, keep in mind that this is where GM tests its production process. Most of the manual processes you will see do not happen in the “regular” assembly process.

If you’ve never been in a car factory, this show will give you a great idea of the immense complexity of the modern automobile. And as complex as an everyday car is, the Chevy Volt is much more complex. If you have been in a car factory, this will still be very interesting.  Enjoy!

Toyota’s image took another hit today, as Consumer Reports magazine recommended that customers avoid the Lexus GX460 SUV. The model was redesigned for the 2010 model, and that is the only model affected by the magazine’s recommendation. CR believes the problem is in the calibration of the electronic stability control (ESC) system. CR testing revealed that the vehicle could roll over under certain, common driving situations. Specifically, when driven into a curve too fast and the driver lifts off of the gas pedal (not a panic braking or sudden swerve), the ESC will not intervene until the vehicle is almost sideways, according to CR. Under these circumstances, the vehicle could rollover. CR also pointed out that there are no actual reports of such an occurrence, but the risk is there. The Toyota Pathfinder, which is mechanically similar, was not found to have the same issue, lending credibility to the calibration idea. Click on the video to see the actual test.

Some have blamed the government for some of Toyota’s recent quality issues, saying that because the US government owns GM and Chrysler, they have purposely damaged Toyota’s quality reputation in order to improve GM and Chrysler’s sales. I do not subscribe to this idea, and it should be noted that Consumer’s Union, publisher of Consumer Reports, is not part of nor controlled by the US government.

Lexus responded quickly, issuing a stop sale order to its dealers. They plan to evaluate the SUV using CR’s testing methods to see if they agree that there is an issue. Obviously, they will fix whatever they find. Note that the government is not involved at all (yet), and this is not a recall.

Toyota needs to get out of the spotlight, and quickly. I had just thought the other day that it had been a while since any bad news had come out about them. Now this. The longer they stay in the (negative) spotlight, the more damage will be done and the longer it will take them to repair the damage. Americans forget quickly, but we haven’t had the chance to forget. Heck, if we all developed ADHD, we would still have Toyota’s issue top of mind.

Lexus issued the following press releases today:

Here are the major introductions from the 2010 New York Auto Show:

2011 Mercedes-Benz R-Class gets a new front end, which makes it look better, but I still think this is an example of M-B thinking it can make anything and we will buy it.

2011 Mercedes-Benz R-Class

2011 Cadillac CTS-V Sportwagon - 3rd time’s a charm, right? This is the 3rd version of the CTS-V, following the sedan and coupe. I don’t think that they will sell many, especially in the US, but this product is clearly intended for European tastes. Americans don’t like wagons very much, but think of it this way: with 556 HP from the supercharged, 6.2L V8, you won’t have to be in it very long.

2011 Cadillac CTS-V Sport Wagon

2011 Chevrolet Cruze - yeah, yeah, we’ve all seen the Cruze before, but Chevrolet wants us to keep thinking about it leading up to its introduction later this year. Rumors have been around for some time that the Cruze will get 40 MPG; now we find out how. The Cruze Eco will use fascia shutters to close off openings in the front fascia to improve aerodynamics, a special axle ratio and lower rolling resistance tires to eek out every possible bit of fuel economy without resorting to a stripped-down model that lacks features that customers want. Chevrolet is also showing the Cruze RS, which gives the Cruze a sportier appearance, but alas, no performance improvement.

2011 Scion iQ - not to be confused with the Aston Martin Cygnet, this is Toyota’s answer to the Smart car. If it has a high iQ, is it even Smarter? Scion boss Jack Hollis said it is Mini-er and Smart-er than the competition. Oh, those crazy Toyota execs.

2011 Scion iQ

2011 Scion tC - Scion also showed the revised tC coupe with revised styling and a bigger, more powerful engine (2.5L, 180HP/173 torque vs. 2.4L, 161/162)

2011 Scion tC

2011 Acura TSX Sport Wagon - after adding the 3.5L V6 to the TSX sedan, Acura now treats us to a wagon. But the wagon will not have the V6; it will have to make do with the 2.4L I4, which makes no sense at all. The wagon is likely heavier than the sedan, and they went to all the bother of adding the word “Sport” in the name. But no V6? Adding insult to injury, the wagon will not offer the manual tranny from the sedan either. Some “sport” wagon! What they did keep is the guillotine-like grille, which is cutting-edge styling, but not attractive.

2011 Acura TSX Sport Wagon

2011 Hyundai Sonata Hybrid and Turbo - after showing us the base model in Detroit, Hyundai now introduces the bookends of the line. The hybrid will get 37 MPG city, 39 highway, almost equalling the best-in-class Fusion hybrid. It can also travel up to 62 MPH on electric only, which beats the Fusion. The turbo has a direct-injected, 2.0L turbo that delivers 274 HP and 269 lb-ft of torque. Heady numbers from an engine that size. And it does it on regular unleaded.

2011 Lincoln MKZ Hybrid - does to the Z what the hybrid has already done to the Fusion. Same hybrid system, and will get the same 41 City MPG and electric-only top speed of 47. This is the first hybrid for Lincoln, and its first 4 cylinder engine ever.

2011 Nissan Juke - first revealed at the Geneva show, Nissan announced that the Juke will get a 1.6L, direct-injected, turbo engine. I know what the word Juke means, and it seems a nice name for a small crossover like this. However, I don’t think that Nissan really thought this one through completely. It seems obvious what people will call it who aren’t fans. The Nissan Joke? How about the Nissan Puke? Based on its looks, I’ll go (with) Puke.

2011 Nissan Juke

2011 Infiniti QX56 - on sale this summer, the new QX56 is more powerful (up 80HP to 400) and will get 10% better fuel economy. The looks of the QX have always seemed awkward to me, and the new one doesn’t break that trend. It looks like it is trying to be an SUV limo.

2011 Infiniti QX56

2011 Suzuki Kizashi Sport - Suzuki just launched the nice-looking but poorly named Kizashi (gesundheit!), and now they add some pizzazz to the equation with this sport model. There’s no performance upgrades, other than a slight tweak to the suspension, but the sport certainly looks like it will go fast. It has a revised fron fascia, lower ride height, rocker moldings and special 18″ wheels. Looks good - even better than the base model - though the styling more than just reminds me of a Volkswagen.

2011 Suzuki Kizashi Sport

2011 Jeep Grand Cherokee - the new Jeep goes into production in early May, but Chrysler has decided NOT to show the production version at any auto show yet. They showed it in concept form at last year’s NY Auto Show. The standard reason to not show new vehicles is that you wouldn’t want to hurt the current model’s sales. But guys…come on…you’re going to start making it 1 month after the NY Show opens! Wouldn’t you like a little…you know…FREE publicity?

2011 Kia Optima - the Optima has been a nice, if not exciting product…up to now. The 2011 model will change all that, with an all-new design. Kia calls the design language “tiger” and there is a certain feline appearance to it. There will be 3 engine choices, including Kia’s first-ever hybrid. 6-speed manual and automatic transmissions will be available. I’ve said in this space before that most every Korean model’s design is derivative from somebody else’s. The Optima continues that tradition, looking like some kind of Lexus from the back. Nevertheless, this is a really nice-looking car that will surely gain Kia some new fans.

2011 Kia Optima

The runaway Prius that was the subject of so much media attention last week has been examined by both Toyota and the US federal government (NHTSA). NHTSA isn’t talking, at least not yet, but Toyota is. Toyota released a statement (see below for the full text) today that comes just short of accusing the driver of lying about the incident. While not actually saying he lied, it does say that his account is “inconsistent” with the examination of the actual vehicle that Toyota engineers performed over the last several days. Reports have circulated that the driver, James Sikes, has financial troubles, driving speculation that he is attempting to capitalize on the publicity surrounding the reports of Sudden Unintended Acceleration (SUA) in various Toyota models.

Toyota has steadfastly denied that there is any electronic cause for the problems, saying that the sticking pedal and misplaced floor mats are the only causes for the acceleration problems. Toyota has recalled over 8 million vehicles worldwide to address the problem. The statement shows that Toyota doesn’t intend to go down without a fight in the battle over the SUA problem. Anyone over 35 probably remembers the similar issue surrounding the Audi 5000, made famous by the CBS program 60 Minutes in 1986. Audi’s sales tumbled dramatically in the wake of the report, and took many years to recover. Toyota obviously intends a happier outcome for itself, though its handling of the problem hasn’t exactly been perfect. They’ve let this continue to be front-page news for many weeks now, which is the last thing they want. They need to get this off of the news cycle and let it die down. The longer this stays top of mind, the longer lasting and more damaging the problem will be.

Toyota’s Statement:

Toyota Offers Preliminary Findings From Technical Field Examination of Alleged ‘Runaway Prius’ in San Diego

The Wall Street Journal is reporting today that among the documents Toyota has turned in to the Congressional committee investigating acceleration-gate is a potentially damning document that apparently describes as a win their success in lobbying the National Highway Safety Administration (NHTSA) to limit the recall over sudden acceleration to only 55,000 units. The document claims the save to the company was $100 million. The document also claims other wins in eliminating other potential recalls, including the Tacoma pickup.

This is just the kind of “smoking gun” that Congress and safety advocates will say “proves” that Toyota intentionally put the company’s profits above the safety of its customers. Toyota said, ”Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong. Our values have always been to put the customer first and ensure the highest levels of safety and quality. Our recently announced top-to-bottom quality review of all company operations, along with new quality initiatives and a renewed commitment to transparency are all designed to reaffirm these values.”

It is entirely inappropriate to take a page from a presentation out of context and use it like this. Of course Toyota cares about its customers - just about every company does. Just about every company also cares about its profits, and they should. It is likely that the Toyota employees that put the presentation together would regard saving $100 million as a good thing - who wouldn’t? They likely also thought that because they were successful in lobbying NHTSA to limit the scope of the recall, NHTSA agreed that more vehicles didn’t need to be recalled. Given what the letters NHTSA stand for, Toyota logically assumed that NHTSA would push for the recall if it deemed it necessary. It apparently didn’t, at least until the publicity of the San Diego law enforcement officer’s death made this a bigger, more public issue.

Did Toyota act perfectly? It seems not. But to take this piece of paper as proof that they willfully put the lives of their customers in danger is silly, and dangerous.

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