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Smart offers 36 low monthly payments–with a whopper ($6,667) due at the end.

By Diana T. Kurylik, Automotive News
Courtesy of AutoWeek.com

Hoping to benefit from the federal cash-for-guzzlers program, Smart USA has set up a $99 monthly payment for buyers who use their $4,500 rebate. 

But there’s a catch–and a hefty balloon payment disclosed only as a note to an asterisk in Smart’s press information announcing the offer. The Smart financing is for $99 a month for 36 months, with a balloon payment of $6,667 due at the end. 

Dave Schembri, president of Smart USA, says the payments are calculated on a $13,335 ForTwo model with air conditioning and includes shipping. Smart has set aside about 1,500 cars for the program, he says. 

Schembri says the ForTwo will have a 50 percent residual value after 36 months. The ForTwo has a combined fuel economy of 36 mpg. 

The rebate legislation, scheduled to go into effect this summer, requires that the car being scrapped have a combined mpg of 18 or less to get the maximum $4,500 incentive if the vehicle being purchased gets at least 10 mpg more than the old one. 

Schembri defends the balloon payment, saying that kind of financing is part of the offerings by Daimler Financial Services–the captive finance arm of Daimler AG, which makes Smart.

CEO Henderson says new focus will be ‘customers, cars and culture’

Article courtesy of MSNBC.

DETROIT – A leaner General Motors emerged from bankruptcy Friday morning, making an unusually quick exit with ambitions of making money and building cars people are eager to buy.

Once the world’s largest and most powerful automaker, new GM is now cleansed of massive debt and burdensome contracts that would have sunk it without federal loans. The U.S. government owns a majority stake although the Obama administration says it has no plans to run the automaker.

The new GM also emerges amid the worst sales slump in a quarter-century.
At a news conference, CEO Fritz Henderson said the new GM will be faster and more responsive to customers than the old one and it will make money and repay government loans faster than required.

Henderson said GM completed its 40-day stay under court supervision far faster than anyone thought it could. He also said it would repay about $50 billion in government loans ahead of a 2015 deadline.

Henderson added that the company now will focus more on customers, including a partnership with eBay to test auctioning vehicles online. He said GM’s new focus will be “customers, cars and culture.”

The new GM will also build more cars and trucks that consumers want and launch them faster than in the past, the CEO said.

“We recognize that we’ve been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done,” he said.

The new company arose Friday as the bulk of General Motors Corp.’s assets were transferred to a company controlled by the U.S. government.

Henderson said the company would reduce its overall U.S. salaried employment by 20 percent by the end of 2009. He said management ranks will be cut by 35 percent, or 450 executives, including the elimination of its North American president position. Henderson said he will take responsibility for North American operations.

He said Bob Lutz, a legendary industry executive, was “unretiring” to become a vice chairman responsible for all creative elements of products, marketing and customer relationships. Lutz had previously planned to retire at the end of the year after more than four decades in the auto business.

The automaker is launching a “Tell Fritz” Web site to allow owners and the public to share their concerns with senior management and he planned to go out on the road every month, Henderson said.

“We need to listen to the questions, ideas and the concerns of the people who matter the most,” Henderson said.

The new company will focus on three top priorities, customers, cars and culture, Henderson said.

“If we don’t get this right, nothing else is going to work,” he said during a morning news conference at GM’s Downtown Detroit headquarters. “Business as usual is over at General Motors.”

New Chairman Edward Whitacre Jr. said the 40-day period had been extremely challenging. “There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs,” he said. Whitacre cited the “strong leadership” of Henderson and the management team, giving the CEO who replaced Rick Wagoner a vote of confidence.

“We all want to win and we are going to win,” Whitacre said.

The company’s logo will remain blue with white underlined GM letters. Henderson said GM has no plans to change the background color to green. “It’s not in my plans actually,” he said.

GM has considered the change to represent its new environmental focus.

Concessions made by the United Auto Workers union just before the company entered bankruptcy protection have brought GM’s labor costs down to where they are fully competitive with Toyota Motor Corp., Henderson said.

Henderson also said the U.S. government has urged them to form a “world-class board” and has vowed that it would not get involved in day-to-day decisions. Steve Rattner, the head of the Obama administration’s auto task force, “wants the company to perform,” Henderson said.

GM ranked as the top global automaker in terms of sales for 77 years before Japan’s Toyota Motor Corp. snatched its crown in 2008. The company sold nearly 8.4 million cars and trucks around the world in 2008, falling short of Toyota’s nearly 9 million.

Once the largest corporation in America, GM held the top spot in the Fortune 500 ranking for 20 years before being pushed out of the top spot in 1973 by Exxon Mobil Corp. It reclaimed No. 1 status in 1985 and held it for another 15 years.

Turning a profit will not be easy. GM has piled up losses and survives only because it expects to receive $50 billion in U.S. government loans. Without the loans, its executives have said the company would have been sold off in pieces.

In addition to the U.S. government’s 61 percent controlling interest, the United Auto Workers union gets a 17.5 percent stake of the company through its retiree health care trust, and the Canadian government will control 11.7 percent. The remaining shares went to bondholders of the old company.

The parts of GM not moving to the new company will become part of “old GM,” a collection of assets and liabilities that will be sold to pay creditors.

You might say they come and go, but some fads actually live on in infamy. Here are our picks for the most horrible auto fads of the last 50 years.

By Sam Foley of MSN Autos
See the article by clicking here.

Fuzzy dice and lambskin seat covers
There is a subtle but important difference between fashion and a fad. Fashion is the inevitable evolution and refreshment of taste and style in everything from clothing to automobiles, which keeps those things from getting tiresome and stale. Fashion drives innovation for the sake of innovation, and it is generally considered a good thing. On the other hand, fads such as fuzzy dice , are as ephemeral and unpredictable as fashion , but in the end are just plain stupid.

With the benefit of hindsight, it’s generally pretty easy to recognize a fad, but for each of the designs, technologies or accessories below, there was a window in time and an enthusiastic audience that aligned perfectly to turn a dumb, pointless concept into an embarrassing reality. Sam Livingston, of Car Design Research, has seen plenty of fads come and go and even feels a bit nostalgic for some of them. “Remember, the ambitions behind most of these things were quite noble, I’m sure,” he says. “All of these things probably seemed like a good idea at the time.”

Any list of the worst of anything is guaranteed to elicit some defensive feedback. So lets pre-empt that right now by saying that if you owned any of the automobiles or accessories on this list, we’re not judging you as a person — we’re judging your car. And whether you knew it or not at the time, people were probably judging your car for all the years you owned it. So a little poke to the soft spot you may have had in your heart for that vehicle might sting a bit, but somebody had to tell you — eventually.

Vinyl/Landau Roof
The vinyl, aka “landau,” top, had all of the problems of a convertible top (tearing, weathering), with none of the pleasures (driving with a top that actually opens, for instance)  Although term “landau top” is often used as a catchall term for the multiple variations of the vinyl top, fake-convertible connoisseurs know that true landau tops have landau bars on the C-pillar. These bars are a reference to the conventions of classic coach building — which probably made more sense back in the 1920s and ’30s, when landau cars were first introduced.

By the 1960s and ’70s, however, when the vinyl-top trend was at its height, it probably struck buyers as a hint of luxury on top of the often-brutish sheet metal of the era. Vinyl tops were offered by all three Detroit automakers at the time, on cars including the Cadillac Eldorado, Pontiac Firebird, even the Ford Pinto. And, as fads go, this one lasted quite a long time; the last factory landaus were offered in the 1990s. Now an enthusiast of the genre must appeal sheepishly to the aftermarket to get a roof that says “convertible” on the outside, fixed roof on the inside and cheesy all over.

Fake Wood Paneling
Wood is not wood unless it comes from a tree. Faux-wood vinyl paneling is just plain cheesy.

Another famous vinyl product meant to simulate the craftsmanship of a bygone era, fake wood paneling began to pop up in the 1960s, draping the sides of luxury station wagons such as the Ford Country Squire. Like the famous woodies of the pre-1950s era (which were, of course, constructed of real wood), these cars showed off their elegantly grained vinyl timbers with pride. That is, until the panels peeled off to reveal the sheet metal beneath. The siding itself didn’t generally last long, but America’s taste for the richness of faux wood endured well into the 1990s.

Talking Cars
While today’s voice recognition and response systems are much more evolved and useful than the one on this Datsun 810 Maxima, digital nannies of yesteryear were novelties that were more annoying than helpful.

Picture yourself back in 1982: You are taking your new high-tech Datsun 810 Maxima for a nighttime drive in the country. A Flock of Seagulls’ “I Ran” is playing on the radio. You are all alone in the cockpit — or so you think. When you come to a stop and turn off the ignition, a sultry female voice emanates from behind the dash: “Lights are on.” And so they are. You turn them off and say, “Thanks, baby.”

With a vocabulary of exactly six phrases, the 810 Maxima was the first true talking car, equipped with a digital nanny feature that would chastise you for forgetful behaviors, including not switching off your headlights or failing to buckle your seat belt. And like any true fad, the recordings that were etched into its phonograph-style cylinder swiftly went from way-cool tech to way annoying. But that didn’t stop the insufferable feature from finding its way into other vehicles such as the 1984 Dodge Daytona and Chrysler Laser.

And despite eventually becoming an ’80s punch line, cars that talk have once again resurfaced in the form of voice-prompt GPS navigation systems and Sync-style voice control systems. It seems that this time, however, they have something relevant to say.

Automatic Seat Belts
It’s hard to be too critical of the automatic seat belt. These mechanized devices meant well. And in the post-Nader era of the early 1980s, the chastened automotive industry was just trying to get drivers to actually use the most significant safety device invented in automotive history. There were two main flavors of the technology. A combination manual lap belt and automated shoulder belt was employed in vehicles such as the Toyota Cressida — the lap belt would clip on normally, and the shoulder belt would ride back along a track in the top of the door frame until it had draped its sash of safety across the driver and/or passenger. Another variant automated both lap and shoulder belts with a complicated arrangement that required occupants to slide under the belts for entry and exit.

Both arrangements had the incredibly annoying habit of knocking off eyeglasses or clotheslining anyone unaware enough to be leaning forward when the car was turned on. In the end, automatic seat belts often produced the opposite behavior from what was intended — people simply unhooked the manual release and went beltless.

Spinning Rims
Many of the fads in this article are long gone, but spinning rims (aka “spinners”) live on. Invented in the 1980s, these aftermarket goodies do exactly what their name implies, that is, the inner portion of the rim continues to spin on roller bearings after the wheels they are attached to have stopped. Equipping one’s car with a full set of spinners can cost thousands of dollars, making them an expensive yet essential element of the pimped ride so popular in the early part of this decade.

But guess what — it’s over fellas. We realize that many of you are still sporting these rotating novelties, but you are riding on four shiny anachronisms that inspire new snickers from passers-by each day. Spinners are the ultimate one-trick pony. All they do is spin, and the forty-fifth time you see them, the joy is totally gone.

Branded Decals
If you have to use a cheesy sticker to announce your presence, stay at home.

Concurrent with the mid-’80s stock market boom was the evolution of a certain species of shallow, self-involved man (think Gordon Gekko from the film “Wall Street”) who enjoyed turning perfectly good sports cars into embarrassing exercises in self-glorification. The typical member of this clan bought himself a 911, then proceeded to desecrate it with a full-length reflective decal that said “Carrera” and a “Porsche” windshield decal, just in case anyone was wondering what that iconic-looking vehicle he was driving was.

A lot of these vehicles ended up wrapped around roadside trees, since the notoriously tricky rear-engine 911 had a nasty penchant for oversteering that often gave overconfident and underskilled drivers a high-speed lesson in physics. These overbadged cars may have died, but in an unfortunate case of trickle-down economics, these decals were eventually available to drivers of everything from Chevy Cavaliers to Ford Mustangs.

Digital Dashboards
Thankfully, automakers have evolved from making primitive, hard-to-read digital displays to digital interfaces that are easier to use and interpret, such as this one in the 2010 Honda Insight.

A close cousin to the talking car, the digital instrument panel of the 1980s is the precursor to modern touch-screen interfaces. But unlike today’s touch-screens, most early digital dashboards offered few functional improvements over their analog contemporaries, and were harder to read at a glance. Nevertheless, automakers that were looking to tap into the excitement of the burgeoning computer age loved these things. Almost no manufacturer was immune from their allure: The Dodge Daytona, Nissan 300Z, Audi Quattro and Chevrolet Corvette all had digital loveliness available as at least an option.

Digital displays never truly went away, but the ’80s enthusiasm for designing screamingly bright, utterly nonstandardized instrument clusters certainly did. Now that driver distraction is a real danger, automakers smartly focus on making their digital interfaces easier to use and less obtrusive.

Huge SUVs
Whether or not the popularity of humongous SUVs can be truly called a fad is debatable. One thing is for certain: Their charm was fleeting.

It’s debatable whether the trend towards humongous SUVs that lasted through the 1990s until last year represents a fad, a market phenomenon or a national character flaw. Whatever it was, it reached its gas-guzzling peak from 2003 to 2005, when buyers had a triple choice of huge trucks — the Ford Excursion, Hummer H2 and Chevrolet Suburban — offering fuel economy between 8 and 14 mpg. Of course, we needed these things. We had eight children to bring to soccer practice, hundreds of pounds of groceries to pick up at Costco and an enormous boat to tow. At some point in 2008, however, lifestyles must have changed, because when gas reached $4 a gallon, people couldn’t get rid of these vehicles fast enough, and the entire U.S. auto industry seems to have collapsed as a result.

As fuel-economy standards get more stringent, it’s possible that these dinosaurs will become truly extinct in the coming years, but their impact on the icecaps may last for centuries.

Fake Air Intakes/Outputs/Hood Scoops
Performance cars need air, and lots of it, so hood scoops, brake vents and other various holes and bulges in the car body are acceptable. If they don’t have a purpose, they just look like a bad toupee on an aging hipster.

Performance cars are heavy breathers. They need air, and lots of it, so sometimes car designers have to cut a hole in the body of the car to either let cool air in or let hot air out. (The Porsche 911 Turbo, for instance, has two huge intakes just behind the driver and passenger-side doors to let air into the engine.) It is just as important for fake performance cars to have the appearance of airflow. Their wheezing, underpowered engines will never impress anyone without hood scoops, brake vents and other various holes and bulges in the car body that generally don’t lead anywhere. These fake air intakes have shown up on brands ranging from Ford to Buick to Mercedes-Benz. The delightful irony of it all is that vents and hood scoops tend to take away from the general aerodynamic efficiency of any vehicle, so if they’re not catching air with the intention of actually using it for performance reasons, they’re just slowing you down.