Race Legends - The Blog

Remembering Carroll Shelby

Carroll Shelby was both a long-time client and a good friend. He and I had opportunities to do a variety of events together over the years and each one was a unique experience.

While he was a giant in the automotive business, he was also a warm human being and I was fortunate to be present on numerous occasions when he comforted very sick children and their parents - all without publicity.

He was tough to make a deal with and I'm sure God is going to have his hands full with the 'old chicken farmer.'

Others will pick up the Cobra torch but no one will replace Carroll Shelby the person.

Drive fast, my friend.

Donn Gurney, Race Legends president

End of the Affair

P.J. O'Rourke has a good article at wsj.com on the end of America's affair with the automobile.

"America’s romantic foolishness with cars is finished, however, or nearly so. In the far boondocks a few good old boys haven’t got the memo and still tear up the back roads. Doubtless the Obama administration’s Department of Transportation is even now calculating a way to tap federal stimulus funds for mandatory OnStar installations to locate and subdue these reprobates."

Is a 30 MPG Full-Size SUV Evil?

So what if through the application of cutting-edge technologies someone is able to produce a full-size (read Chevy Tahoe) SUV that gets 30 MPG in EPA tests? Would the SUV still be the evil scourge of the planet?

It's not impossible to produce such a SUV. A few years ago I read a government study that predicted the introduction of 6-8 speed transmission, aerospace derived materials to lighten the overall weight with the same crash worthiness and greater use of diesel engines. While F1 cars aren't mass produced, wouldn't carbon fiber be a logical direction for weight reduction. Airbus and Boeing make extensive use of the materials. Many of those trends seem to be coming true.

Cost? Well, we're headed to much more expensive vehicles anyway. The Obama administration added something like $1,300 to the average cost of vehicles last week with their new mileage standards. I suspect the overall trend is going to be towards longer periods of ownership (leasing being just about dead as a way to get a car or truck), so payment periods might well be extended, too. So I foresee full-size vehicles being on average $50,000 or more.

So if a "fuel-efficient", full-size SUV still a tool of the Devil? I predict "Yes". After 15 years of demonizing both the vehicle and their owners, it will be very hard for the press and environmentalists to change their model. For example, they will be evil simply because of their size and resources needed to make them.

However, there will be a market for SUVs and not just among the elite. People have families and they want to transport them in comfort and safety. And if you live in the large rural parts of this country where winter is a fact of life, for a large number of people the SUV is the first, last and only choice for a vehicle.

Even with Massive Loss, Ford Motor is Smart

Even with Ford Motor's report of a huge 4th quarter loss of $5.9 billion (WSJ Company Profile) and the announcement that they've tapped into their final line of credit amounts, Ford is in a better position for long-term survival than GM and Chrysler for one very important reason: Ford still controls itself.

By taking the so-called "bailout" money from Washington, GM and Chrysler have effectively ceded control to the US government and its elected representatives. Product plans, marketing, labor, all manner of business activities that are properly the province of a private company are now fair game to be influenced and controlled by Congress and the Obama administration. And since those entities are highly influenced, some might say controlled, by special interests and lobbyists, so too are these auto companies.

As evidence to this last point, look no further than the "stimulus" bill passed in the House this week. Only 12% of the money in this $870+ billion bill is considered to be direct stimulus. Ther rest introduces and exapnds social programs that have been on the "must do" list of the Democratic party for over 40 years. Those programs didn't get there by accident. Special interests have been working for decades to ensure they received the support necessary.

So here are some predictions for GM and Chrylser:

• Government mandate to make smaller, fuel efficent cars
• Government mandate to make hybrids
• Government mandate to reduce or stop making SUVs and pickups
• Government mandate to stop making "performance" vehicles (e.g., Corvette, Charger)

By not taking taxpayer money, Ford has the opportunity to sidestep some or all of these mandates and build the products that the World market wants.

Here is another prediction: if things get really crazy in the US, don't be surprised to see Ford transfer a lot of its production, design and administrative functions outside of the Unisted States.

Automakers' Jets: More Political Theater

The manufactured "outrage" over the idea that the three US auto CEOs traveled to Washington on private jets to ask for spot at the public money trough is more political theater. While it was clear that Wagoneer, Nardelli and Mullaly all mis-estimated the public mode and the need for concrete examples of contrition, the private jet issue is a false one.

Two of the three companies are publicly traded and have shareholders. All have international operations. The principle job of a CEO of a public company is to return shareholder value. The most precious resource a CEO has is time. And effective use of time is a key element to effectiveness. The shareholder is ill-served by the notion of the CEO cooling their heels in the airport lounge while an airline flight is delayed or canceled. Ask anyone who travels for a living what is the number one thing they wish for? - being able to set their own travel schedule and get to their destination reliably and on-time. Instead of taking in one or maybe two meetings per day, private jets allow a CEO to take in many more. And remember, all of these companies have international operations.

Members of Congress fly around on private jets all the time. They have to pay for these trips, but they are traveling on jets for the same reason others do - they save time.

So before we go crazy on private jets at the auto makers, we should reflect on what makes the most sense to return shareholder value. Given the burn rate at GM, even is the entire fleet of seven was sold tomorrow, it would probably pay for about 20 minutes of cash burn. 

Nancy Pelosi and Harry Reid are Designing Your Next Muscle Car

This isn't some political rant (not at least about the Democratic party), but rather an observation that the American car industry is about change forever. With GM's announcement last week of massive quarterly losses and the warning that they will likely run out of cash within the year,Detroit has turned to the US government for a "bailout". This is a new bailout, as opposed the the $25 billion in loans that was passed into law last month. So of course, after the $700 billion bank bailout and the failed rounds 1 & 2 of the AIG bailout, Congress is thinking that there needs to be certain conditions attached to any automaker bailout.

So what are some of those conditions? In addition to worker benefits and organized labor protections, the Wall Street Journal is reporting an aide to president-elect Obama as saying one stipulation will be "... to agree to strict rules aimed at building "green and clean" automobiles..." In other words Congress, not the market will determine the product plans for the auto companies.

Forgetting for a moment the massive implications of nationalizing the auto industry (British Leyland, anyone?), think what it will mean to have bureaucrats dictating not just industrial policy, like is already achieved through the CAFE standards, but what happens to all the cars we as enthusiasts enjoy? Is the Shelby GT500 "green and clean"? How about the Corvette Z06? And I suspect that even a Tahoe hybrid SUV is not part of the plan. Once the environmental lobby is involved, can the social responsibility crowd be too far behind? No one needs a car that will go 155 MPH, do they?

The automakers have been in trouble for the last few years and some would argue even last few decades. Cheap gasoline and the market shift to SUVs masked the far more serious structural problems. The run up in fuel prices finally knocked down the house of cards. Although with gas here in Iowa under $2.00 a gallon, some of the economic pain consumers have been feeling for most of 2008 has been mitigated. I'm not sure what the answer is, but I think we're seeing that bailouts crafted over a few all-nighters don't have the momentum to really effect change. What should happen with Detroit is that the plan, if pursued, must be well thought out. And who knows? Maybe it makes more sense to give every American who buys a car or truck and direct cash rebate for $5,000 for the purchase, with more for the so-called "green and clean"? All I know is that we don't need Congress designing consumer products - cars or anything else.

Andrea Pininfarina, Chairmain of Pininfarina, Killed in Traffic Accident

The website of the British newspaper The Daily Mail is reporting the death in a traffic accident of Andrea Pininfarina, chairman of the design studio Pininfarina. Mr. Pininfarina, 51, was struck and killed while riding his Vespa scooter near Turin, Italy. The Pininfarina firm is best known for its long association with Ferrari and as the designer of some of Ferrari's most iconic cars, including the Enzo.

Full details may be found at The Daily Mail website.

Gordon Murray to Design Micro Car

Formula One designer is to create plans for a micro car. See the press release here.

John Fitch in New Battle

Our good friend John Fitch is battling the state of Connecticut to resolve an issue of buried fuel tanks on his property. Seems John discovered the tanks were leaking and proactively engaged the state to determine what the appropriate process was to remediate contaminated soil. The state, apparently more used to dealing with those wanting to cover up such things rather than citizens striving to do the right thing, rewarded him by throwing the code book at him.

Now Fitch is faced with outrageous expenses and a state bureaucracy that has turned its back on him. Learn more about the situation and how you can help (that's right, help) here.

BTW: if you or a family member or friend have ever run off the road and into one of those yellow plastic barrels that line our highways, possibly saving you and yours from injury or even death, you might think about how to pay back the inventor. That's right, John Fitch invented these life-saving devices. Think about it and then write a check to:

“The Friends of Fitch Homestead Fund”
c/o Salisbury Bank and Trust Company
P.O. Box 1868
Lakeville, CT 06039

A New Bullitt Mustang

Ford Motor Company is going to produce a special edition Mustang for 2008 to commemorate the 40th anniversary of the classic Steve McQueen movie. The first "Bullitt" edition Mustang was offered in 2001, but the present body style is much closer to the '68 model driven by McQueen and a clear improvement on the theme. Besides the near-original Dark Highland Green, the car is also available in black, which might work in a stripper sort of way, but it won't have that "Bullitt" cool.

The new car gets 15 more horsepower than the standard GT version, plus suspension and handling upgrades, which probably means it will perform about the same as the Hertz Shelby, which by the way is an absolute gas of a rental car. Like the McQueen version, the '08 "Bullitt" will be mostly devoid of bright trim, including the "pony" emblem from the grill. The rear spoiler is also a delete.

Beyond the tuned 315hp 4.6-litre V8 with cold-air intake, the car will sport a five speed Tremec manual with a custom polished aluminum shift knob, a 3.73:1 rear end, a special interior and h-pipe dual exhaust. Here's a great touch: the exhaust system was tuned to match the sounds of the original car, as recorded on a digitally-mastered DVD.

I'm probably alone in the sentiment that I'd like to see the new car with more faithful reproductions of the American Torq-Thrust wheels used on the original, better yet in a smaller diameter to capture more of the "feel". I know, the handling wouldn't be nearly as good, but damn, McQueen didn't need twenty-inchers to slam around San Fran at grossly illegal speeds, and neither will I when I rent one there next summer.

With all that in mind, here's a clip from my future San Francisco trip "Bullitt":

Groovy.