No refueling for Formula One

Sounds like no fun for the viewers and fans.

I loved watching F1 in the late 90's and early into 2000 when active suspension, traction control and all of the lovely technology was on display. Now we are limited to 19000(!) rpms, no refueling and strategies that aren't really understandable for the average fan. All of these policies and rules are designed to make F1 more budget conscious. Have you seen the budgets for an F1 team? Come on!!!

I long for those days gone past when the manufacturers had free reign on what they can bring to the table; when you won because you let the engineers do what they do best. I realize these rule changes are to give everyone a chance to win, place or show but they have made the last race boring to watch even for a die hard Ferrari fan.

Let the engineers design something that allows the drivers to go as fast as they can. Let's say we de-restrict the rpm limit and allow some of the technology that exists on the most common of vehicles, traction control, abs, etc... At some point in time the laws of physics will take over and friction with the tires, aerodynamics and reaction times will not allow any further developement. Then we can count on seeing the best racers race the best cars from the most talented engineers. Now that would be fun again. Remember it will take a team to win eventually and everyone will have to bring their absolute best to the table.

GM’s plan to sell Hummer brand delayed

GM is selling and/or closing some of its brands to focus on the core brands, Chevrolet, Cadillac, GMC and Buick. They are currently negotiating with Sichuan Tengzhong to sell its Hummer brand.

In any purchase used for making money, the money is made on the buy rather than on the sell. Pretty much a non-fallible way of approaching business.

Looking at the way this Hummer deal has been stalled/slowed or what have you, the Chinese company is looking to make a windfall if this deal goes down at the end of February. When GM entered into bankruptcy, they estimated the value of the Hummer brand at $500M. Now the negotiations revolve around an estimated value of $150M. Sounds like a little equity built in on the part of the buyer. What will happen then if the Chinese company can re-structure the company to make money? If they do so, they will have little debt in relation to the estimated values of only last summer. We the taxpayers are paying for this. If the bailout money used by GM helps to make them accountable to the taxpayers for performance, I cannot see how taking 30% of its value makes sense.

As I have said before, GM is looking to reduce its expenses at the expense of the taxpayers. What happens if this deal does not happen at the end of the month? Will the value of the Hummer brand continue to fall? If so, then what will the final negotiated value be? If it is less than $150M, and GM takes a bigger loss on the deal, what happened to the tax dollars we invested?

GM needs to pull a Ford and restructure without us paying. Ford posted a $4.8B ($4,800,000,000) dollar profit for 2009 after looking at what they can and need to do to make cars for the customers. They have even better product in the pipeline. Case in point, the new 5.0L engine for the Mustang. They created what seems to be a great engine with minimal development time. How did they do that? They were forced to make tough decisions because the customer demanded it to be done RIGHT NOW.

I guess we’ll see if this Hummer deal is finished at the end of February. If it is not, I guess I’ll make another post about GM.

Bear this in mind; I am not an American Car Company hater. I love a lot of the cars GM makes. They have shown they can do it. Let’s just let them know we are watching.

Ferrari F40: The fastest car I’ve ever driven

Or should this read “the fastest I’ve driven a car”? As far as the fastest car I’ve ever driven…that is definitely a Ferrari F40. While selling luxury cars in Las Vegas, our owner bought some $2M dollars (back in 1998) of cars from a very wealthy client. We needed to transport the cars, among them, the F40, a Diablo, Hummer H1, Ferrari 328 GTBi, and other not so exotic luxury cars. I had the privilege of driving the F40 for a few precious moments. The twin turbo V-8 suffered from turbo lag but when they spooled up, it was like taking off in a jet plane…unbelievable.

Now for the car I’ve driven the fastest. In my first role as a General Manager for another dealership in Vegas, my used car manager came across a 2001 BMW M5 and I bought it. Back then, it was THE ultimate 4 door sedan and coming from someone whose owned 10 BMW’s over the past 15 years it lived up to it’s billing. Case in point. As being the leader of the dealership, I loved to give the usual daily Sales Meeting but on Saturdays the meetings had a different tone because of my drive in. I lived some 15 miles away from the dealership, would leave for work at 6am or 6:30am and was lucky enough to find this most amazing route. It was the frontage road merging to with the 215 Freeway. After crossing Decatur Boulevard, there was an opportunity to take that car to its 155mph limiter for a couple of miles and I did so almost each and every Saturday morning…what a rush. The sensation was unbelievable but as I would take the McCarran Airport exit, I would have to brake hard to exit. I would then bear right and turn left under the 215, I would go under the airports runways, sunroof open at this point just to hear the roar of the 5.0 liter V-8 revving to 7000 rpms. Then another heavy braking zone to get on Sunset Road for an opportunity to test my “heel and toe” technique…I knew then as I know now, in these days of cars being faster, more advanced and just a little more sterile, that was the greatest car, on the right road and at the right time.

I just wonder what that F40 would have been like.

Ferrari

Fernando Alonso is driving for Ferrari’s Formula One team in 2010. Did everyone see this coming? Towards the end of the 2009 season, Santander Bank of Spain finished its 3-year advertising contract with McLaren-Mercedes, announced its commitment to Ferrari’s Formula One team. Rumors around the mill had Alonso going to the Scuderia. Now with that announcement from Santander for the 2010 season, his signing was imminent.

Who says advertising in racing has run its course? This advertising contract, I’m sure, is worth hundreds of millions of dollars. ING, last year, was expected to SAVE $66M to $132M because of cost cutting in advertising for Formula One’s Renault team. Remember, Alonso raced for Renault. Can you imagine the total dollars Santander is spending to promote the most recognized Formula One team with Spain’s most famous racing driver? Those rabid fans are crazy over Fernando Alonso, and with 2 Formula One Drivers Championships, why not? Sounds like a sound investment in promoting the most advanced racing series with one of the most recognizable names in the sport.

Fernando Alonso will be remembered in history as one of the best, his aggressive driving style, his come from behind victories, and his fierce competitiveness. Now he is with the most famous of all teams. I cannot wait to wake up at 7:30 am on the East Coast on Sundays to watch (I would wake up, as many others do, at 4:30 on the West Coast if I still lived in LA.) I have been a longtime Ferrari fan and am excited to see how the next season pans out for Ferrari. It is going to be fun.

Renault

In the Los Angeles Times Dan Neil wrote about kicking Renault in the shin. Regarding the Renault ad that went with his column, let's just say that I am not an electric car fan.

There is something about having a car that communicates with you via the sound of an engine, the way it shifts gears and the way you feel when you get to your destination. If our climate dictates there need only be zero emissions vehicles then so be it. Other technologies exist that makes cars so much cleaner than before. Even today, the cars that use fossil fuels do not impact the environment as we are led to believe.

If you look at the number of cars on your commute that make you close your windows, click recirculate on your a/c or make you get ahead of them, those are the culprits. Rather than legislate some un-Godly CAFE average (which you and I will pay for anyway), let's educate the average person on maintaining their cars to be smog legal, for one thing. This way we can keep buying cars without fear of being harassed because you bought something that gives you pleasure to drive. Leave the politics to the politicians; don't buy something to make a statement. Buy it because you worked hard enough to get what you want and want to enjoy your purchase.

http://www.latimes.com/business/la-fi-ct-neil12-2010jan12,0,4474706.column

Peugeot and Mitsubishi Discuss Deeper Ties

In the New York Times, Matthew Saltmarsh wrote, "PSA Peugeot Citroën on Thursday joined the ranks of global automobile giants gambling that a deeper alliance — in this case with Mitsubishi Motors of Japan — will offer it shelter from the uncertainties surrounding the industry."

With an anticipated merger of two relatively, by world standards, weak companies and the prospect of pooling money, manufacturing and platforms for vehicles, I can see the common benefit. One thing though, if these "weaker" companies combine, who can take the reigns and focus back on what the customer wants?

The article states how Peugeot does not enjoy the "pricing power of the German brands". Mitsubishi is also looked on as having a lower ranking in comparison to Japan's other makes. How do two underperformers merge to become better? How will these economies of scale translate into products the world auto buying market wants?

If you look at the perennial performers in the world markets, the infusion of money into their respective companies via governments has done what? Are they better off now or are the same people who made the decisions to produce vehicles without seeing the financial crisis on the horizon still running their course?

If this merger makes sense for the long term, which is how every business needs to proceed, the makers need to focus on one very important question: "Am I building what I think the consumer wants or what they truly want?"