Fool us once, shame on you. But twice? Say it aint so.

 

The Globe and Mail today observes that "accounting issues raise big red flag over reborn GM".

How "reborn" can it be if it's carrying over accounting issues from before its collapse? (discussed, for example, here and here).
Sadly, having previously observed other practices that hearken to their shifty ways, there remains enough bad habits to make any investor pause before trusting GM. 

I've got to ask, having seen them burn through over $60 billion dollars en route to one of the biggest failures in corporate history, and now seeing bad habits resurfacing, why should tax payers be putting ourselves in a position to get burned again?

VW's make or brake play

First, I know the title should read "make or break," but this is an auto blog...brake. Yeah, all righty then.

Anyway, a buddy of mine asked me what I thought of Jeremy Cato's article in the Globe and Mail this morning, VW's impending comeuppance.

Almost a year ago (back in January) I wrote Oh no, not another one (I must, however, credit Mr. Cato - I remember wanting to use the word "comeuppance" in one of those posts and opted against it. Shame on me, what a great word...but I digress...).

Having said that, it's not too late for VW to avoid this comeuppance. In our posts since last January, we've talked about emerging paradigms and buggy whips - the landscape which befell GM and Toyota over the last decade is changing.

Stay tuned - there are some fundamental realities that may remain relatively the same, but there are also new realities being created as we speak. We'll make sense of it all here at J and D's Auto Talk with insights that are not infrequently months ahead of the mainstream media.

Gas engines and buggy whips

 

I read this article today, Electric cars give Japan anxiety over fate of gas engines and I'm reminded of the stockholder meeting speech delivered by Danny DeVito's character Larry 'the Liquidator' Garfield in the movie Other People's Money when he said "I'll bet the last buggy whip maker made the best damned buggy whip you ever saw. How'd you like to own stock in that company?"

The point he was trying to make was that times change, and as they change, companies must change with them. Making buggy whips was big business when horses drew carriages. When the internal combustion engine became the heart of the horseless carriage, it was only a matter of time before the last horse-drawn cart would be left behind. The companies who accepted this reality and migrated their core competencies survived; those who held on to a dying paradigm died with it.

Which brings us to the gasoline engine, and the cloud of parts manufacturers surrounding it. Like the horse as a mode of transportation, and the ancillary components surrounding it such as buggy whips, it's all long in the tooth.