What's Holding Back VW's Move Up-Market

Their dealerships.

As some of you know I recently purchased a new Infiniti G37x. The second runner-up: the Volkswagen CC. I looked at about a dozen other cars in making my decision and by far in the entry-level luxury sedan class, IMHO these are the cream of the crop. In another post, I'll probably give you my view on all the cars I looked at.

But back to the VW. Between the CC and the G37 both cars had their strengths and weaknesses. And it's easy to make a case for either car. But part of the car buying process is also the environment that you enter: the dealership. In this area there is a huge gap between the two companies. Infiniti is emblematic of the experience you expect from a luxury car dealership, although I'd say that it still lags behind the standards set at Lexus. But VW, is just a car dealership. The vast majority of their buyers and cars that they sell are not targeted to luxury buyers. As such the facilities and staff don't support the luxury experience you're buying when you spend somewhere in the neighborhood of $40K for a car.

Now I'm not just talking about leather sitting areas and offers of bottled water. It's deeper than that. I went into 2 VW dealerships as I made my evaluations. One was a relatively nice, clean dealership, the other kind of small, dark with a epithet-ridden, chain-smoking sales person. Nice guy, but extremely rough around the edges. The sales person at the 'nicer' dealership still had a distinct "car salesman" feel to him. But what's worse is that at neither dealership did anyone in the place no how to get my iPod to work in the car that called out iPod integration as a key feature. Now for me iPod integration was a key decision criteria because I spend so much time in the car and listen to my iPod all the time. What was even stranger about this is that the CC seemingly shared the same MMI interface that the Audi A4 had, which worked flawlessly and easily. But I digress a little.

So at the end of the day you have no different of a buying experience than you'd get at a Chevy dealership, very limited knowledge of the cars by the sales people, no niceties like free loaner cars when you bring yours in for service -- yet you're being asked to plunk down (at least for me) a lot of dough for a car that genuinely competes with cars by Infiniti (and in my mind superior to) Acura, Audi, BMW and Cadillac If the CTS drove the way it looked it would be in my driveway).

This also takes me back to Volkswagen's first attempt at hitting the luxury market, the 2004 $100K luxury sedan with a W12 engine that competed head on with the BMW 7-Series, Mercedes S-class and the Audi A8 on which it was based. At that time, and even today, who would buy a $100K VW? What's crazier is that it looks like they're bringing the Phaeton back in 2010 of 2011.

But this brings me back to my original question. Does VW really think that their existing dealers can support the full brand experience that people are looking for when they are going to spend up to $100K for a car? It just sounds crazy to me, but they seem to be doing it. And let me reiterate, this has nothing to do with the quality of the cars themselves. The CC is a beautiful, well performing car (although stupidly has a sunroof that only tilts up).

Why VW doesn't learn from Honda, Toyota and Nissan and create a luxury brand (Acura, Lexus and Infiniti respectively), with a separate dealer structure to support the move upmarket? Oh wait, they have. It's called Audi. I don't get it.

2 Views, 1 Magazine -- on the Bailout

I was catching up on some magazines tonight and was really surprised to see 2 diametrically opposed views on the banks and the bailout. Fittingly, one story ran in the front of the book and the other at the end.

The first article is an opinion piece by Allen Sloan who -- I think rightly so -- points out that "...before you accept the Street's version of events, recall that you didn't hear complaints about "socialism" when the government bailed out creditors of Bear Stearns and AIG, and let Goldman Sachs and Morgan Stanley become bank companies so that they could borrow hugely -- and cheaply -- from the Fed." Sloan does add that perhaps there's more to the banks desire to pay back the TARP funds may not be just to get out of the political spotlight, but also to buy back the warrants that the Treasury got for lending the funds before they become worth too much. Basically they took the money when they needed it and want to give it back before the value of the warrants rise too high and the American people get their fair return. Nice work guys.

But there is another side of the story that starts 64 pages later that tells the Banks' side of the story. Basically it's the banks crying about how they were vilified by the press and the public as they were taken through the bailout process and the feeling that they were mistreated by the government -- both in terms of changing of the deal as the process continued and politicians demonizing the banks in public sessions to score political points.

Through all the complaining there was a really good paragraph towards the end:

So has TARP done its job? "It was one of the largest government appropriations in history," says Thomas Chen, CEO of the investment bank Piper Jaffray. "And a mere seven months later we're letting capital be returned on the basis that the problem is fixed. So you have to ask: (1) Has it all been fixed?, or (2) Was it necessary in the first place?" Chen believes the program had a short-term calming effect on the economy -- more than a financial effect. Says Thomas Nides, Morgan Stanley's chief administrative officer: "The original concept was to accomplish one thing: to stop us from going off the cliff, to send a clear message that the government was not going to let the system collapse. For that I give them an A+."

I think Chen and Nides have this about right. For all the flaws of TARP, I think it did what it needed to do -- it averted an all out crisis.

One final thought on the 2 articles. Which view is more right? Are the banks having a bout of selective memory? I think so. Mostly because of the adage "Follow the money". Paulson, Geithner and Obama aren't going to get rich off TARP. But the bankers have not only kept their jobs, but it seems as if they may prosper greatly as the government takes on all the responsibility for their mistakes in the form of toxic assets, and through access of cheap money, leaving the bankers to make boatloads of money. I think the bankers doth protest too much.

Steve Forbes Would Like Us to Drive Tanks & Raise the Gas Tax

In Steve Forbes' Fact & Comment article, "Car-Wreck Regs" in the current issue of the eponymous magazine, Forbes unfortunately twists historical statistics regarding highway safety and fuel consumption to seemingly support the continued development and production of gas guzzling cars that people have stopped buying.

Let's walk through a little of his tortured logic:

• CAFE Rules Will Kill People: Forbes reaches back to an old study that found that about 2,000 additional people per year are killed in car accidents because CAFE standards drove manufacturers to build smaller, lighter cars. Now I'm sure that there is data that supports this and Forbes does a nice job of invoking an old trick -- if you reference a study you boost the credibility of your argument, regardless of the quality and bias of the study. Many "industry studies" are designed specifically to support a pre-determined point of view. So you have to determine whether or not the assertions pass your own personal smell test. Let's consider a few things then . The study compares cars build in the mid-nineties to cars built in the early '70s. But this doesn't take into consideration that in the intervening 30+ years that we have developed lightweight, yet stronger composite materials that are not only used in cars but airplanes. And it presumes that there has been no advances in car frame design or other safety systems like air bags or ABS braking systesm to make cars even safer. Not to mention that cars today meet much higher safety standards than cars of the past did. All in all it feels like Forbes' article is bunk.


• New SUV's are cleaner than old, poorly tuned compacts. This is another truly stupid argument. Yes, it is very likely that a new car will have better emissions than a 15 year old car. So yes, it's better to have newer cars on the road than older ones. But smaller, more fuel efficient cars will be cleaner than large SUVs. So why not make more of the newer cars, smaller cars? Again, Forbes loses.


• Rising CAFE Standards Increase Oil Consumption. Forbes uses some impressive statistics -- improperly -- to make his case. He points out that Fuel consumption has grown dramatically over the past 30 years -- a whopping 60%. But what he doesn't point out is that the number of cars on the road grew by 74% and with suburban sprawl, the number people who drove to work and the number of miles that they drove grew dramatically as well. These are the real reasons why consumption increased, not Americans' wild desire to drive more because mileage is better.

So what is Forbes' great idea instead of improving CAFE standards? Raise taxes. Yes, Steve Forbes who typically thinks that any idea to reduce taxes is a good one is suggesting that we raise the gasoline tax. His model for this strategy -- Europe. Another amazing flip-flop for Mr. Forbes. It's hard to think of any other article that Forbes has written that holds up Europe as a model for America to follow. He holds that high taxes is why Europeans are buying smaller, fuel efficient cars. But what happened to the problem with smaller cars being less safe? Either he doesn't care if Europeans crash to their deaths or he forgot what he wrote a few short paragraphs before.

Tom asks where the Republican Outrage is

My old college friend Tom has written a post that notes that outside of Republican talk radio (Rush + everyone on FoxNews), there has been little outrage and anger from everyday Republicans. The implication is that Republicans are more respectful than Democrats. I'm not sure I buy into the argument.

As I commented on Tom's blog, I think the reaction hasn't been the same because of the 61% disapproval rate of the guy who left and the great amount of optimism that Obama has inspired in the US and around the world.

But let's not assume that Republicans are just nicer or more polite than Dems. I think a lot of it has to do with the extreme amount of grace that John McCain has shown and others have followed. But the elbows on John Boehner, Mitch McConnell and others are as sharp as anyone's on the Hill.

I do hope that Obama can use the honeymoon period to try to create a wave of bi-partisanship, but we'll see. At least he seems to be governing to the middle (as evidenced by many of his Cabinet selections and other appointments). And I do believe that the level of tranparency he's trying to bring to government can be sustained and works to regain the trust of the American people.

Where do disaffected Republicans move to?

You always hear the liberals talk about moving to Canada or any other country if some right-wing guy wins an election. But where would Republicans go? They can't go to Canada or most any European country because they are all far more socialist than even the most distorted vision of an Obama presidency would be. Russia, no. The Middle East, no. South America -- well maybe some of the Neo-Nazi types would feel comfortable in Argentina.

But seriously, they won't go anywhere, just like the liberals who threatened to go to Canada didn't leave and were never serious about it. Why? Because there's no better place to be and if you really want to help make the country better, you can't do it from thousands of miles away. You have to be here, working shoulder to shoulder.

As both McCain and Obama stated last night (even Karl Rove said it on Fox News), today ESPECIALLY after a bruising election season, we are all Americans who love this country and we must all come together to fulfill the promise of America and restore our standing in the world. For all our warts, as Ronald Reagan's words still ring true: "America is a shining city upon a hill whose beacon light guides freedom-loving people everywhere."

Pakistanis Decry US Air Strikes

In CentCom Chief David Petraeus' visit to Pakistan, several officials complained that the Predator attacks were resulting in a "loss of precious lives and property" and engendering "anti-American" sentiments.

All I can say is FU and who cares. The Al Qaeda operatives who are being targeted, as well as the people in area that have been harboring them, didn't like Americans in the first place, so nothing lost there. Besides, towns in South Waziristan don't have any real infrastructure to worry about being blown up anyway.

If the damn Pakistanis didn't cave (pun intended) into the tribal leaders who supported Al Qaeda in the first place and let them set up shop again after they were chased out of Afghanistan we wouldn't be having this discussion at all.

Go Vote!

The opportunity to vote is both a right and a privilege. Don't pass it up. But if you do, I don't want to hear any complaining for the next 4 years.

Tyson Chandler Gets It

This has nothing to do with hoops. As many of you know, Tyson Chandler is the 7-foot starting center for the New Orleans Hornets. But he also seems to be one of the many young black Americans that the Obama campaign has gotten engaged in politics.

In his recent blog post, Chandler talks about attending an Obama rally with a few teammates where he got to meet Obama. A few of his comments towards the end shows that he understands the social responsibilities that he has now that he's become a multi-millionaire by playing in the NBA.

It's funny, because when Obama was giving his speech, he said he was gonna give a tax cut to 95 percent of the people. He says, "If you make under $250,000 a year, raise your hand." And everybody there raised their hand, except for this one small section of guys. That was our section. And everybody around us was laughing.

But you know what, it's a bigger cause. And the way I look at it is that I can afford to pay more in taxes. But my parents, my grandparents, my cousins ... with what they make, they can't afford to cut back in their household with what they're trying to survive with. I can afford to make cuts and still survive. They can't take that knock.

I think that's what's going on now and the reason why the middle class is struggling so much. The upper class, we can take that hit. Obviously, nobody wants to take it, but we still can. And we can afford to live nice lives.

I've lived in both situations. And not only that, I'm obviously the only one in my family that can say that I'm a millionaire. I've seen my entire family struggle. So, would I rather see my whole family struggle while I get a break, or have me not get a break while the rest of my family gets one? I'll take my entire family getting a break.

Israeli Generals Weigh in on Obama

In this short film, many of the most respected military and intelligence experts in Israel discuss the impact of the Bush/McCain foreign policy on Israel, the need for the United States to engage directly with Iran, and their personal feelings about Sen. Barack Obama.


Retired Generals of the Israeli Defense Forces and high-ranking Mossad officials on Barack Obama... from www.JCER.info on Vimeo.

Jayson Stark on the Mets Pitching

As the season winds down and I chew through my fingernails, I thought I'd share a couple of great articles by ESPN's Jayson Stark detailing Johan Santana's greatness and just how bad the Mets' bullpen has been and how the NL East race has been decided by relief pitching.

Merrill Hoge Calls VY a "Baby"

I thought that the writers at the Tennessean have been tough on Vince Young, but take a listen to Merrill Hoge's critique of Vince's future as an NFL quarterback.

Palin & McCain Blocking 'Troopergate' Investigation

So this is how the 'reform-minded' Palin operates? Palin who initially welcomed the investigation, saying "hold me accountable," is now trying to delay the investigation until after the election is over. The McCain campaign said on Monday that Palin, who was not subpoenaed, was unlikely to cooperate.

For someone who proclaims she has nothing to hide, she's acting as if there's an awful lot to hide. Yeah, she's just the person to clean up Washington.

The best line on the whole situation was from Democratic state Sen. Kim Elton who is chairperson of the Legislative Council that is overseeing the investigation. Contending the deal had been broken, Elton said, "Bluntly, I feel like Charlie Brown after Lucie moved the football."

Perhaps the McCain campaign should change their slogan "Election first, truth second".

Read more on Yahoo News

A few more fibs from Palin Convention Speech

OK, I'm sure many of you have seen these, but just in case you didn't:

• "I sold it [private jet] on eBay". Well not exactly. Give her credit, she had it listed on eBay for $2.7M. But when the Alaskan government didn't get a bid that met the minimum they were looking for, they went to a private broker who sold the plane for $2.1M. Now forgetting about how whether or not she lost money on the transaction, does she not know the difference between listing an item for sale and actually selling it? It made a great sound bite and made her look hip to technology, but it just flat isn't true.
• 
  
• Fiscal Disciplinarian. She wants you to think that she hews to fiscally conservative Republican principles, but she doesn't really score that well there either. As Governor she was able to deliver a surplus due to higher oil revenues resulting from record oil prices and levying her own version of 'windfall profits' taxes on the oil companies operating in Alaska. This is the same kind of 'windfall taxes' that she and the other Republicans consider anathema when proposed by Obama.

There's a good article on Palin's performance as Governor in the Boston Globe called "A forceful, but narrow agenda". Take a read.

VY Close to Losing Locker Room

It's been well chronicled over his first 2+ seasons that Vince Young has had issues with letting go of bad plays and accepting responsibility for his level of play. Most of these concerns have been aired by the media and fans. But Week 1 seemed to take these concerns to a different level. Now he may be losing confidence in the locker room, which is the death-knell of a starting QB in the NFL.

Mid-way through the 4th quarter, after throwing his second interception, it appeared that VY had opted out of the game. The official word was that VY experienced tightness in his hamstrings. Fisher all but ordered Vince out there and 4 plays later, he had to leave the game after taking a hit on his knee. But take a look at these quotes from teammates:

"I am under the assumption something happened and to him and he was hurt. I don't know what the situation is so I am not going to comment on it." -- Kevin Mawae, Center and President of NFLPA

"No one is going to quit on this side of the ball." -- Keith Bulluck, All-Pro OLB

“You can’t lose confidence as a quarterback. You have to have a short-term memory and handle adversity when it does come…You have to find a way to persevere no matter what the situation is." -- David Thornton, OLB

“Vince is an emotional guy. You never know what’s going through his head,’’ Hall said. “I’ve been with Vince a long time. I love him like a brother. I don’t know what he’s going through, all I can do is try to motivate him and get him going." -- Ahmad Hall, FB and former University of Texas teammate of Young

The Titans front office has been consistent, perhaps to a fault, it it's public support of Young during his evolution as a quarterback. But if Young doesn't get his head together soon, the front office won't be able to gloss over Young's deficiencies or risk fracturing the locker room or worse losing it alltogether.

Politicians Never Learn: The Truth is Out There

No, this has nothing to do with aliens (why in God's name are they making an X-Files movie now anyway?).

I'm continuously amazed that politicians say things publically that aren't true. It's as if they think that nothing they ever say or do has been recorded or documented in someway. And have they not heard of Google? That's how reporters do their research today.

Anyway, one of Sarah Palin's best lines Wednesday night had to do with the boondoggle called the Gravina Island Bridge -- more famously is known as the "Bridge to Nowhere", reviled as the worst example of pork-barrel politics. Let's not forget that this was pushed through Congress by Alaska's Republican delegation, led by Sen. Ted Stevens (R-AK) who threatened to quit if the funding was pulled.

In her speech Palin boasted that one of her great achievements as a reformer and fiscal leader was to kill of the ill-conceived project, proclaiming that she "...championed reform to end the abuses of earmark spending by Congress...I told Congress, 'thanks, but no thanks,' on that bridge-to-nowhere." Oh really.

First of all, when running for Governor she was an advocate for the Bridge. And only when the funding was cut off by Congress did she abandon the project. According to a press release from her own office she stated:

“Ketchikan desires a better way to reach the airport, but the $398 million bridge is not the answer,” said Governor Palin. “Despite the work of our congressional delegation, we are about $329 million short of full funding for the bridge project, and it’s clear that Congress has little interest in spending any more money on a bridge between Ketchikan and Gravina Island,” Governor Palin added.
-- State of Alaska, Governor's Office, Press Archive
September 21, 2007

And what's worse, according to CBS News, Palin kept all $233M in federal funds that had already been appropriated for the project and had it allocated to other transportation projects in the state.

So is this really the kind of change she's going to bring to Washington? For all those that think her to be naive, she seems to know all the ropes already.

GOP Wants it Both Ways on Preggo Palin Teen

Hands off Bristol Palin. Too bad that no one told that to Levi Johnston 5 months ago.

Well that's at least what the GOP wants from the media, unless it suits their purposes.

While Republicans continue to show outrage at teen pregnancies in the inner cities or in Hollywood, somehow little Bristol Palin gets a pass. Is it because he family is rich (or at least now famous) enough for her to not have to worry about ruining her life? Or is it just that it's a better story to talk about the courageous choice she is making in keeping the baby and getting married before her 18th birthday. Any other 17 year old girl, in almost any other family and she's trailer-trash and the poster child for irresponsibility. Now she's the poster child for the "Right-to-lifer's" and the un(sex)-educated. How's that position on teaching abstinence working for you now?

Here's a link to a great article about the GOP's double-standard regarding the Palin familty situation by the Associated Press (that despicable tool of the liberal elite media) as it appeared in the NY Daily News.

Was that Sarah Palin or Rob Schneider?

Just catching up on a few thoughts.

I love how even when trying to show how inclusive and progressive the GOP is by making the bold move of putting a woman on the ticket, they still can't shake their misogynistic roots. There were a number of signs saying "Coldest State, Hottest Governor" and a great shot caught by CNN showing an old guy wearing a button that read "Hoosiers for the Hot Chick".

I mean I've heard of pandering to the base, but perhaps it was Palin's good looks, not her ultra-conservative values that were the biggest present to the GOP base.

But I can envision a great SNL skit featuring Rob Schneider, reprising his role as "The Hot Chick", impersonating Palin.

Live Blogging from the McCain Acceptance Speech

Here are my reactions as they came while watching McCain's speech:

Does McCain realize that the big spending, do nothing people in Washington have been the Republicans over the last 8 years? Federal spending have risen to the highest levels in history under the Bush administration -- and for the first 6 years did so under a Republican controlled Senate and House.

Gotta give props for his position on the surge. Good tactical decision that improved the situation. But the fact that he still thinks that in hindsight that attacking Iraq -- not pour resources to finish the job in Afghanistan, not Iraq, not Syria who both provide more support to terrorist organizations like Hamas and Hezbollah -- is just bad judgment.

Again, why is this both parties. The lost trust ALL happened under a Republican controlled White House and Congress. Can the "Straight Talk" guy keep it straight?

Red Meat Time: One thing that always bothers me about the "legislating from the bench" argument is that it presumes that conservatives don't do the same. It's really just that they just mean it's OK to "legislate" as long as it comports with conservative principles.

Education: Interesting comment on education. Does that mean that we can choose to send our kids to school that teach creationism over science? abstinence over sex education? Oh, wait, I guess by the video of Palin's pregnant 17 year old daughter that doesn't work very well ;)

I do like the message about reaching across party lines. I wish that more politicians thought this way. He's a good man. Probably in any other election, he'd have my vote. Certainly would have voted for him over Hillary.

He's got a really compelling story. If you haven't read his first book "Faith of my Fathers", pick it up. I really enjoyed it when I read it when it first came out.

Big finish: Great, great finish. Terrific cadence, terrific message. I feel like the real McCain finally came out.

Sarah Palin: A Bridge to Nowhere

John McCain has really lost the right to proclaim himself a "maverick". I know he's saying that he didn't choose the safe pick when he announced Sarah Palin as his VP on the ticket ahead of Romney, Pawlenty and Ridge. He even went as far to say that this pick was made on his gut, not on the polls. But I've got to call "Bullshit" on this one. The political calculus here is so obvious.

I'm sure that there are many good attributes in Mrs. Palin's favor, but this is the most obvious case of pandering to a number of constituencies, not least of all the disaffected Hillary voters who feel that the Hill-dog got mis-treated in the Democratic primaries. Palin is supposed to be the:

Bridge to Women Voters: The ultimate pander. In the wake of Obama's victory over Hillary, McCain did everything he could to court the 18 million people who voted for Hillary. Now he took the 'daring' step to bring a woman onto his ticket as VP. But once these female democratic voters start to see some of Palin's positions -- e.g. hard-core Pro-Life and lifetime NRA member -- I don't think the average 'soccer mom' will connect with this particular 'average hockey mom'.

Bridge to the Future: Yeah, McCain is the old guy. He doesn't come across as hip or knowledgeable about any technology invented after 1982. So while people like Bobby Jindal (R-GOV LA) and Tim Pawlenty (R-GOV MN) were in the mix, they had that extra Y chromasome that knocked them out of the running. But Palin's youth and inexperience (2 years as governor of the least populated state and 2 terms of Mayor of a town of 9,000 people; I realize I'm glossing over her run as sports reporter) will blunt McCain's position that Obama is too inexperienced to be President -- especially since at 72, being "one heartbeat away from the presidency" never felt so close

Bridge to Conservative Voters: This one he got right. I do not doubt that in the coming weeks you will hear a lot about the truly heart-wrenching story (no sarcasm intended) of her choice to continue with the pregnancy of her son Trig even though she knew he would be born with Down's Syndrome. It was no shocker that Dr. James Dobson was one of the first to praise her selection. And her other positions on gun control (or lack thereof) and offshore drilling will certainly thrill the conservative base.

But in the end, she will be a Bridge to Nowhere, much like Senator Ted Stevens' (R-AK) misguided project to build a $350M bridge to connect 4 seals to 3 polar bears.

Now the upside from the selection for me is that I think the late night talk show hosts should have a lot of good material to work with. There is no doubt that Jon Stewart will comment on Palin's relative hot-ness in the political world. I mean this is the guy that made a joke about spying a Merkel camel toe in a picture at a G-8 meeting. A few other potential jokes I expect to hear (all of which are terrible. read at your own risk. please play mental rim shot in your head at the end):

Yes, Sarah Palin is immensely popular in Alaska. She has the caribou vote all wrapped up

Sarah Palin will be very comfortable in the White House. After all she grew up in one herself...but it was called an igloo.

Buster Olney on Mets Bullpen Woes

In today's chat, Buster Olney of ESPN said what every Met fan has been trying not to admit.

Let's face it: The Mets' bullpen will be as good, in the next six weeks, as Aaron Heilman is.

It's painful, but it's true. Unless Wagner gets back soon, we're doomed.