Just when you thought political news in our region couldn’t get any weirder, it does. In addition to the daily Blagojevich-Burris-Obama drama, there comes the news of Gary, Ind., Mayor Rudy Clay and the tale of his new Hummer H3.

According to the Northwest Indiana Times, a day after begging the state for a financial lifeline for Gary in the form of relief from new property tax caps, Mayor Clay defended his purchase of a 2009 Hummer H3 that was bought with taxpayer money.

“What do you want me to do, walk around here?” Clay reportedly asked. “I’ve got to have a car.” The purchase price of the car is to be paid in three yearly installments that total $29,970.

As the article states, one member of the panel charged with deciding Gary’s fiscal fate cast doubt that the city has proven its need for state help if it still is buying automobiles. “It’s disappointing to learn this the day after Mayor Clay asked the Distressed Unit board to raise the property tax caps,” said Ryan Kitchell, chairman of the appeals board and director of the Indiana Office of Management and Budget. “We will only consider doing so after the city has cut all that it can. The new Hummer and testimony presented yesterday clearly show that much more spending can be cut.”

More than 30 Gary residents submitted comments to the board opposing the bailout, some of which blasted the city for funding the vehicle purchase.Some Gary residents compared Clay’s actions to the CEOs of the Big Three automakers arriving in Washington, D.C., in their corporate jets to ask Congress for a bailout. But Clay justified the expense by saying, “We’re saving taxpayers money by riding in a Hummer. I could’ve bought a $50,000 Expedition.”

It’s enough to give you a stomach ache, especially because so many of us are conserving our funds in line with the economic times. Not to mention that there certainly are more fuel-efficient vehicles he could have chosen (the H3 receives an estimated 14 mpg in the city and 18 mpg on the highway). Or that Mayor Clay could have scooped up a gently used
vehicle for a song.

It’s a political saga that we here in Illinois can relate to, all too well.

Source: Northwest Indiana Times

If you’re still fuming about the Big 3’s CEOs flying into Washington, D.C., on expensive private jets, you might take some solace in knowing that at least one of those companies’ CEOs is apologizing—sort of.

After correcting the aforementioned gaffe by rolling into D.C. a second time in eco-friendly cars, GM is now letting its automotive industry colleagues and customers know that the company has messed up and that it wants the opportunity to make things right.

Last week, General Motors published an ad acknowledging it has disappointed and sometimes even betrayed American consumers. The print ad is a dramatic about-face from GM’s public stance of several weeks ago when it was trying to justify its bid for a bailout on the grounds that the credit crisis had undermined its business in ways executives could not have foreseen. It also came as CEO Rick Wagoner faces new pressure to resign. “While we’re still the U.S. sales leader, we acknowledge we have disappointed you,” the ad said. “At times we violated your trust by letting our quality fall below industry standards and our designs became lackluster.”

Titled “GM’s Commitment to the American People,” the ad ran in the trade journal Automotive News. In it, GM admits to other mistakes that analysts and critics have said hastened its recent decline. “We have proliferated our brands and dealer network to the point where we lost adequate focus on the core U.S. market,” the ad said. “We also biased our product mix toward pick-up trucks and SUVs.”

But GM also says in the ad that it was hit by forces beyond its control as it tried to complete a restructuring earlier this year. “Despite moving quickly to reduce our planned spending by over $20 billion, GM finds itself precariously and frighteningly close to running out of cash,” the ad said. A failure of GM would deepen the current recession and put “millions of job at risk,” according to the ad, which also highlights the automaker’s pledged restructuring and intention to begin repaying taxpayers in 2011.

GM spokesman Greg Martin said the ad was an attempt by the automaker to present a pledge directly to the public, and that, “We believe we need to deliver this commitment unfiltered since quite a bit of media commentary has not kept pace with our actual progress to transform the company.”

What do you think? Do you appreciate the company’s honesty, or is it too little, too late? We’ll find out this week if the Big 3 will receive any kind of assistance from the federal government, and whether this ad has had any effect on changing public’s or Congressmembers’ opinions about these three companies, which are so publicly grasping for lifelines.

Source: Automotive News

An Oak Lawn Chrysler dealership launched a promotion Saturday that is either a brilliant PR stunt or an act of desperation. For a few days only, consumers who buy a new Chrysler Pacifica SUV (sticker price: $39,000+) at Mancari Chrysler-Jeep can purchase a slightly used PT Cruiser for $1.

While the unheard of deal has earned Mancari free publicity in everything from the local Southtown Star to the International Business Times, I’m afraid it may be a stark foreshadowing if the Big 3 aren’t able to dig themselves out of their financial quagmires.

We don’t take a lot of strong stances on this blog, but this threat affects us all. The Big 3 are ingrained in our pop culture—from Route 66 to the drive-in restaurant to the thriller “Christine.” They gave us America’s love affair with the automobile, and although controversial, the car enabled suburban sprawl. I can’t imagine a domestic economy without General Motors, Ford and Chrysler, and I’m guessing you can’t, either.

But more importantly, if they fail, the economy will bear the destructive blow. Their demise will mean more than a handful of unemployed executives. The ripple effect will be felt from the assembly lines to the auto parts factories to the dealers and independents, and to you, the people who own the cars. Each of these entities employs thousands of people, and I’m not sure we can truly comprehend how much each would be affected by the sudden absence of one or more of our domestic automakers.

For those reasons alone, I’m carefully following their $25 billion bailout pleas to Congress. Otherwise, I’m not very sympathetic to the carmakers’ plight. While new car sales are plummeting because of the credit crisis and faltering economy, how much of the Big 3s’ suffering is due to this vs. their own poor management practices, lower product quality and failure to adapt to a changing marketplace?

For decades, they’ve rested on their laurels, believing they were indestructible. They seemingly learned nothing from the oil crisis of the 70s, when demand came to a halt for their oversized gas-guzzling cars. This gave Honda and Toyota a chance to gain a foothold in the market with their small, fuel-efficient cars.

And what has happened since then? Honda and Toyota slowly gained market share by building better cars, and with that, a loyal customer base. The American carmakers offered smaller models for a few years, but then…Voila! Enter the minivan, the full-size SUV, the el grande SUV and then el grande pick up trucks, one model after another with few distinguishing features. Even as gas prices skyrocketed in the past several years, the Big 3 continued to roll out SUVs.

Meanwhile, Toyota introduced the Prius Hybrid, the Camry hybrid and the subcompact Yaris. Honda gave us the Civic Hybrid and the tiny Fit. BMW brought back the efficient but fun Mini Cooper, and this year, the Smart car debuted.

The Big 3s’ response? Aside from the Chevy Aveo, it was hybrid SUVs. Let’s give an 18-mpg vehicle a boost to 24 mpg. How many of these behemoths did Detroit need before realizing it would eventually be a losing proposition? Surely, the Big 3 were receiving the same economic forecasts as their competitors about a limited oil supply.

General Motors has garnered oodles of press about the Chevy Volt, an electric car set to debut in 2010. Has anyone stopped to ask why it will take so long to release? General Motors had an electric car in 1996, the EV1. If you haven’t seen, “Who Killed the Electric Car?”, then you might not know GM later pulled all of the EV1s off the road and sent them to the crusher. Whether or not you believe all of the allegations against GM (and many other parties) in the fanatical flick, it’s hard to believe there isn’t some thread of truth in there. You also have to wonder why it will have taken GM 14 years to produce another electric car. (To be fair, Honda and Toyota also had electric cars that met similar fates as the EV1.)

Detroit has had 40 years to analyze the competition and learn how to compete on their level in today’s marketplace. Clearly, they haven’t done that. Is it because of arrogance? Or a belief that Americans would rather drop $20,000 on a mediocre car than $25,000 on a high-quality one? Or do they simply not believe the quality differences are there? Maybe they were so focused on churning out SUVs that nothing else mattered.

And if we bail them out, what next? Are we prolonging the inevitable or giving an integral part of our past a deserving chance? What do you think? Share your thoughts!