STICK TO CARS, NO. 427.

Editor's Note: This week, Peter discusses an industry that is on a tightrope walk between survival and utter devastation. And he also has a few searing comments about the insanity that continues in Washington, D.C. In On The Table, we look at the latest "It Won't Be Long Now!" Hydrogen effort from Hyundai, plus changes to the 2027 Chevrolet Equinox. Our video this week features the late Jim Pace in a Shadow DN4 at Road America. Our AE Song of the Week is "9 To 5" by the iconic Dolly Parton. In Fumes, Peter begins a new series, "Famous Front Rows." And finally, in The Line, we have MotoGP from the Michelin GP of Aragon and INDYCAR results from The Milwaukee Mile. Remember, you can read past issues by scrolling down and clicking on "Next 1 Entries." We're on it! -WG

By Peter M. DeLorenzo

 

Detroit. This column was supposed to be about the churning and burning going on in the global auto industry right now. Wandering through the latest auto news over the last week, it’s clear to me that some parts of the global industry are on the precipice of disaster.

 

The overcapacity in China will require a shakeout to that home auto industry of gargantuan proportions, with companies simply ceasing to exist left and right. Even then, it probably won’t be enough. Our friend and regular economics correspondent, Tom Bartkiewicz, passed along an article in Nikkei Asia that revealed some shocking details about current conditions in the Chinese market.

To wit: “China’s automotive industry is reaching extreme levels of saturation: at least eight automakers unveiled new models on a single day in July, hoping to keep up sales by flooding the market in an increasingly relentless showdown. BYD Executive Vice President He Zhiqi told Nikkei Asia that 542 new models were released between January and May alone, an average of 3.6 per day, and called the pace of competition ‘brutal’.”

3.6 per day? That’s unfathomable, and not in the future Ford pickup kind of way.

And more: “The sheer competitiveness of China’s automotive market is without parallel and can seem irrational, but there are basic structural factors underpinning it. One of the biggest is domestic manufacturing capacity and its underutilization: national capacity sits at around 55 million units per year against local demand of just 23 million. Assembly lines, broadly speaking, are running at less than half capacity; this leaves automakers trying to maximize utilization by either releasing a flurry of new models or leaning on global exports.”

So far, government officials are taking a “hands off’ approach in order to let the shakeout happen at its own pace. In the meantime, Chinese automakers will continue to flood global markets with their products.

And then there’s the situation in the German auto industry, where the implosion going on is historic. The VW Group alone is talking about eliminating 140,000 jobs, related to a 500,000-unit cut in the company's European capacity. The impact of this will launch tentacles throughout the German economy, with more than a million jobs possibly at stake. Product consolidation will accelerate, with Audi and Porsche sharing underpinnings on some models, and BMW and Mercedes-Benz will be facing economic devastation as well. This is truly unprecedented and an example of the turmoil roiling these traditionally solid automakers. In other words, a giant Wiener schnitzel of Not Good.

So, that’s the current situation those in the auto industry find themselves today. It’s a tightrope walk between survival and utter devastation. What about here in the U.S.? The U.S.-based automakers, as I’ve said previously, are rolling along, pushing 84-month financing while churning out pickups and SUVs (plus muscle cars and trucks in Stellantis’ case) with kind of a “What, Us Worry?” and “It Won’t Be Long Now!” warped mantra. As in “Why fret about today when tomorrow is going to be fan-frickin-tastic!” or something like that.

We all know that’s not how it’s going to play out. Mistakes will be made and missteps will occur. (We can’t wait for the production delays to emerge with Ford’s greatest-thing-since-sliced-bread, un-Fathom-able pickup. -WG) And the tides will soon change in the political spectrum as well, which means chaos and uncertainty will continue unabated.

 

But compounding all of this chaos facing the U.S.-based automakers, of course, is the absurd tariff situation between the U.S. and Canada brought on by the Clown-in-Chief (aka The Global eEmbarrassment) in Washington. (And please note: if you’re still a supporter of the Asshole-in-Chief you need to move along now, and by the way, BooFuckingHoo.)

 

Arbitrary, capricious, dumb and stupid, the alleged trade “war” with Canada is flat-out ridiculous. There’s no legitimate rhyme or reason for any of it, and it’s simply absurd that one deluded idiot in Washington is causing so much havoc in the auto industry and in this region.

 

And that’s right, this region. We Michiganders have zero animosity for our northern neighbors. In fact, we relish the fact that Canadians are our friends and neighbors. The cringeworthy clown in the oval office has embarrassed Americans and Canadians alike with this needlessly antagonistic trade “war,” and we don’t want anything to do with it.

 

And by the way, the CEOs of Ford and GM should be embarrassed about how they so blatently sucked-up to the Orange Dictator. What has that play gotten them, exactly? Nothing but grief, aggravation and devastating hits to their bottom lines. But I have no sympathy for either one of them, especially when Jim “I’m a genius just ask me” Farley preened for the cameras in the Oval Office like he was the asshole’s best friend. As far as I’m concerned, you both got what you deserved. You play with a snake, you’re bound to get bit. Welcome to the political cesspool that is Washington, D.C., you both came off looking like rubes wandering around in the big city.

 

As I mentioned in the first sentence of my column, I was planning to stick with comments on the industry today, but when the Dumbledick in the Oval Office announced that he was renaming Lake Ontario – by executive order, no less – “Lake America” that was a level of stupidity too far.

 

This just in: It will remain Lake Ontario long after this walking, talking embarrassment waddles back to Mar-a-Lago, but of course huge amounts of money will have to be expended to amend all of the changes this ridiculous order will cause. I apologize to our Canadian neighbors for being subjected to this unmitigated bullshit.

 

Oh, and by the way, in anticipation of the hate mail sure to come our way? “Stick to cars?” Well, BooFuckingWho, Part II. Because being forced to live under the reign of the Flatulant King has become simply intolerable and untenable. I will be speaking out and speaking out often from now on. This is beyond fucking ridiculous.

 

And that’s the High-Octane Truth for this week.

Editor's Note: Click on "Next 1 Entries" at the bottom of this page to see previous issues. - WG