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December 29, 2004
Are Car Manufacturers' Manueverings Really Headline News?
I realize I am outside the norm for anyone commenting on the automotive industry, but I just can't get excited about the General Motors - Fiat issue or the DaimlerChrysler - Mitsubishi debacle. Forbes.com: GM's Big Misadventures??? I was equally as disinterested in the Billionare v. DCC lawsuit that constantly appeared in the headlines of Detroit-industry watchers and press last year.
I keep asking myself, is the shuffling back and forth and dopey decision making by auto manufacturers really news? It must be for someone, or else Forbes and Automotive News are just trying to keep their reporters and columnists employed.
So far, I haven't seen anyone report on the final rule issued by the National Highway Traffic Safety Administration concerning a new part added to the Corporate Average Fuel Economy regulations. NHTSA has codified its prior interpretations that successors and predecessors of manufacturers (and entities with "controlling interests" in manufacturers during any given model year) may take advantage of CAFE credits of the other to offset liabilities (read big fines). Wow, wasn't that exciting? If I hadn't scooped that so quickly, it probably would have been headline news in some mainstream publication.
Now, we can all go back to wondering how long it will take Sirius radio to turn a profit.
Posted by E L Eversman at 09:54 AM | Comments (0) | TrackBack
December 28, 2004
McCarran-Ferguson Under the Microscope?
The Immunities and Exemptions Working Group of the Antitrust Modernization Commission recommended that the AMC review the propriety of exemption from the federal antitrust laws. One of the exemptions specifically outlined for recommended review includes the insurance industry's McCarran-Ferguson Act exemption for matters the states regulate as the "business of insurance".
Given the way that insurers have moved into many different industries, defining just what the "business of insurance" is can be complicated. It is predicated on each state's law and is governed by the state's interpretation of a given activity.
Immunities and Exemptions Issues Recommended for Commision Study, December 21, 2004
Posted by E L Eversman at 12:03 PM | Comments (0) | TrackBack
December 27, 2004
Taking the Bus May Let You Die of Old Age
I can rest easy now that I know my chances of dying due to accidental suffocation and strangulation in bed over an entire lifetime are only 1 in 8,099. Taking into consideration that the likelihood that I will die due to contact with hot tap water is 1 in 64,788 or that my chances of succumbing due to ingition or melting of nightwear is only 1 in 738,585, I think I will stay home for the rest of the winter.
Contrast those statistics with your chances of dying in a motor vehicle-related accident. According to the National Safety Council occupants of cars have a 1 in 247 chance of dying in a car accident, a 1 in 1,214 as a motorcycle rider, and 1 in 608 as a pedestrian. Given those odds, you might want to take the bus. Bus occupants only have a 1 in 99,809 chance of being killed.
Now there is a slogan to encourage the use of public transport.
Posted by E L Eversman at 12:13 PM | Comments (0)
December 23, 2004
Currently Driving: 2003 Jaguar X-Type 3.0
It started snowing late Tuesday (the 21st) and it hasn't stopped yet. There is snow everywhere, and the drive to work this morning was like walking through a battlefield with cars and trucks littering the berms, shoulders, and even blocking the highways. But I was tucked snuggly and safely inside a 2003 X-Type Jaguar -- all wheel drive -- and uneventfully landed at work.
I have always liked driving the X-Type and, even if it does look like a Buick, at least the ride is all Jaguar. Today, however, I got the opportunity to find out just how great the X-Type is in monster snow. Let me just say that I haven't driven a car as roadworthy as this one since my 1998 Audi A4 Quattro -- and considering how much I loved that car, the X-Type is in very good company.
The last time I got caught in an absolute blizzard I was driving a Mercedes-Benz SLK, affectionately termed the "sled car". I battled that car for 30 miles while my sister sat white-knuckled in the passenger seat feeling the car slip and skid the whole way.
Needless to say, the Jaguar X-Type brought me safely to work with nary a thought. As I said, I have always liked driving this car. Now I love it.
Posted by E L Eversman at 02:50 PM | Comments (0)
December 22, 2004
Fla. Road Rangers Get the State Farm Look
State Farm Insurance has pledged $850,000 and guaranteed two years of support to Florida's "Road Rangers", trucks and drivers outfitted to help stranded motorists. Renamed the "State Farm Safety Patrol", the group now consists of 14 red and white trucks prowling Florida's turnpike in search of disable vehicles and their motorists.
State Farm maintains that it makes good business sense to sponsor these rescue vehicles, because directing traffic away from disable cars and getting stranded motorists back on the road reduces secondary accidents. That means fewer claims for the insurer.
State Farm's sponsorship, however, is limited to the turnpike's Road Rangers. The interstate highways will continue to be monitored by rescuers, but they will not be part of the State Farm Safety Patrol.
State Farm's Safety Patrol Aids Stranded, Disabled Motorists on Fla. Turnpike
Posted by E L Eversman at 04:04 PM | Comments (1)
December 20, 2004
2005 Chrysler 300 C Car of the Year
I think I just heard Hell freeze over. I almost never agree with the mainstream automotive media's buzz about particular cars, so I can't believe I actually agree with Motor Trend's choice of the Chrysler 300 as the 2005 Car of the Year.
But, now I can get back to disagreeing with the auto media. First, I only put the 300 C in the category of best car. Second, Motor Trend describes the 300 as an example of "bold, expressive and confidently America styling." Actually, there is almost nothing American about the 300 C's styling. In fact, its design is so distinctly European that it practically has Mercedes fingerprints all over it -- sporting that same stubby look of the last decade of Mercedes sedans.
The Chrysler 300 C is a solid, yet easy handling, vehicle that feels like butter when you slip in to the driver's seat. Gone is the overly gadgetized dash panel American cars are fond of sporting. Replacing that button-happy look is a retro-designed dash that incorporates European sparseness with the real amenities a luxury vehicle has to offer.
Its snub-nosed front end is saved from being pug-faced by a grill reminiscent of Jeep and well set headlights that compliment its appearance. The rear is the least impressive part of the vehicle reminding me too much of the back of the 300 M. The rear is anti-climactic and the tailgate is bland without the elegance of eye-drawing lines.
Inside, the passenger compartment is roomy and comfortable, with storage holders in all of the right places. The 300 C handles beautifully with a ride that manages to be both smooth and sporty, and it slips easily into parking spaces. This is the car I would select if I intended to drive cross-country. Not only is it fabulously comfortable, but the powerful 5.7 L HEMI V8 engine practically sips gas. The 300 C is rear wheel drive, but for those who live in snowy country, you'll be happy to know that Chrysler also makes it in all wheel drive.
Best of all, it has a base window sticker of $32,870 for the rear wheel drive and $34,195 for the all wheel drive model. But don't think that you will get your hands on one any time soon for that kind of money. These cars are so hot that dealers are paying $5,000 over window sticker, wholesale, just to get some on their lots. So if you plan on buying a 300 C today, get out your checkbook and expect to pay well over window sticker for the chance to own one.
Motor Trend Names Chrysler 300 2005 Car of the Year
Posted by E L Eversman at 11:33 AM | Comments (0)
December 16, 2004
200 Miles Per Gallon
That's what Vapor Systems Technology President, David Steckling, says is within your grasp. No more panic at the gas pump. No more diverting college fund savings to pay for the outrageous price of fuel. And guess what? According to Steckling, this technology has existed since before the 1930s.
So, why hasn't it been incorporated into modern cars and trucks? Money, that's why, and lots of it. Based on Steckling's calculations, the U.S., state, and local governments receive over $6 in taxes every time you fill up your tank. Then there are the obvious economic interests of the gas companies that want to sell us as much of their product as possible -- to say nothing of the automobile manufacturers that benefit from the wear and tear less efficient fuel systems cause. If our vehicles operated more cleanly and efficiently, they would not deteriorate quickly or need frequent repairs.
After decades of his own experience and research, Steckling's company has produced a CD with hundreds of expired patents -- many of which were originated or owned by car makers, automotive suppliers, oil companies, and the U.S. government -- detailing vapor systems that can dramatically increase fuel efficiency. How dramatically? Steckling says that, with the right technology, he intends to publicly demonstrate what vapor technology can do by driving a 1997 Toyota Camry, "From San Diego to New York City on a single tank of gas."
The beauty of many patents available on the Vapor Systems Technology CD is that they are expired which means that anyone can build and use the technology. Plus, the CD contains patents for a variety of different fuel systems, including fuel injected and carbureted systems, to name a few. This is not just ancient technology, however. Many patents identified on the CD are recent and portions of it reference patent applications that are currently pending.
Environmental advocates will be thrilled with the release of the CD, as it presents a viable tool for urging the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) to significantly increase the corporate average fuel efficiency (CAFE) standards. As I commented in the New Technology: Progress and New Problems post, during its 2003 fiscal reporting period, NHTSA fined BMW a whopping $42 million for the company's failure to meet CAFE standards on its 2001 and 2002 model year vehicles. If CAFE limits were significantly increased, BMW and the other auto makers, who now view the penalties for failing to comply with CAFE requirements as a cost of doing business, would probably scramble to design vehicles using vapor fuel systems. Besides simply increasing fuel efficiency, these vapor fuel systems have the added bonus of reducing harmful emissions at the same time. Using fewer fossil fuels, reducing emissions, eradicating the need to drill in protected areas -- what's not to love about mandating the incorporation of vapor fuel technology into vehicle design?
So, is there a conspiracy to keep the need for gasoline and gas prices artificially inflated, or are we just stupid for developing great technology and then failing to use it? I, for one, would like to know the answer to that question.
Posted by E L Eversman at 10:38 AM | Comments (0) | TrackBack
December 15, 2004
Ohio Ins. Dept. Amends Total Loss Rule
The Ohio Department of Insurance has amended its Unfair Property/Casualty Claims Settlement Practices rule to allow insurers to utilize national guide books and databases rather than requiring total loss valuations to be determined strictly based on the local market. This change in the regulation enables insurers and consumers to consult guide books like N.A.D.A. Guides and consider values from the broader national market. The changes to Ohio Administrative Code 3901-1-54 became effective November 12, 2004.
Ohio Dept of Insurance - Rules
Posted by E L Eversman at 12:19 PM | Comments (0) | TrackBack
December 14, 2004
Federal Antitrust Modernization Commission to Host Public Meeting
The U.S. Antitrust Modernization Commission will hold a public meeting on January 13, 2005 in Washington, D.C. to determine issues for further Commission study. The meeting will take place at the Federal Trade Commission, 601 New Jersey Ave., N.W., Washington, D.C., in conference rooms A & B. The public meeting begins at 10:00 a.m. and interested members of the public are invited. No advance registration is required.
For more information, you can visit the Antitrust Modernization Committee website or telephone the committee at (202) 233-0701. Andrew J. Heimert is the Executive Director & General Counsel of the AMC. The Federal Register announcement of the meeting is accessible here.
Posted by E L Eversman at 10:55 AM | Comments (0) | TrackBack
December 11, 2004
When is a Warranty Not a Warranty? When it's an "Extended Warranty"
The phrase "Extended Warranty" is one of the most misleading phrases in American commerce. People buy these things believing they are extending their bumper-to-bumper manufacturer's warranty, when, in reality, they are getting no such thing. In fact, the extended warranty is nothing more than an insurance policy or a service contract for repair.
The majority of these offerings are insurance policies and they come with all of the downsides of any type of insurance: Deductibles and arguments over whether what you need to have fixed is "covered" in the terms of the agreement you signed. Many people buy these offerings only to discover that when their $25 part keeps breaking, they still have to pay for the cost of the repair because it is less than their per incident deductible.
How the Attorney General of each state has permitted these items to be sold as "warranties" is beyond me. Whether something is a warranty is tightly defined by the Federal Trade Commission. To be called a warranty under federal law, the assurance or performance/repair must be offered at the time of purchase by the manufacturer or seller at no extra charge to the consumer. If you have to pay for it, it simply is not a "warranty". (The Magnuson-Moss Warranty - Federal Trade Commission Improvement Act, 15 U.S.C. §2301(6), and regulations issued by the Federal Trade Commission (FTC), 16 C.F.R. §701.1(c) govern definitions of warranties.) If these products do not meet the definition of a warranty, then wouldn't the sale of them under the name extended warranty be false advertising? Or a misrepresentation of the nature of the product offered at a minimum?
Because they are insurance policies, however, there is one huge plus side to them. Unused premiums are refundable. That's right, refundable. And you can cancel the EW at any time. So, if you bought a $600 EW two years ago, you can cancel it and get the remaining portion of your premium back.
Warranties, Extended Warranties, And Service Contracts:
Do You Really Know What You Are Getting?
Posted by E L Eversman at 03:36 PM | Comments (0) | TrackBack
Currently Driving: 2003 Cadillac Escalade EXT
This is one big vehicle. It just barely fits in my garage and I have to think strategically about where I can park it at strip malls and public garages. As with most sport utilities built on a truck chassis, it drives like a truck. The Hummer H2 has a significantly better ride and handling capabilities than the Escalade EXT. I find it to be top-heavy and I feel like I will be taking out a whole series of mail boxes before I can get to a major highway.
I also wonder just what the charm of the EXT version of the Escalade is. After all, I have never seen anyone hauling furniture or firewood in the back of one. In fact, I have never seen anyone hauling anything in the open bed portion of one. Unlike the Ford Explorer Sport Trac or the Suburu Baja, the Escalade EXT is not a working vehicle. Let's face it; it's a glamour vehicle -- and how many glamorous people haul their own stuff in pick-up trucks?
Attributes:
Automatic
White out
Grey leather in
Moonroof
XM Radio
Navigation
Heated seats (my favorite)
Posted by E L Eversman at 09:34 AM | Comments (0) | TrackBack
December 10, 2004
GEICO Sues Google
Google is defending itself against Washington, D.C. based insurer, GEICO's, claim of trademark infringement in a trial starting Monday in federal court in Virginia. GEICO claims that Google is infringing upon and diluting the value of its trademark by allowing other companies to use the word "geico" as a keyword in pay-per-click advertising.
I wonder if GEICO is being represented by any of those plaintiffs' lawyers insurers are so fond of bashing. Apparently, if you are a company seeking to guard profits, lawsuits are just fine. If you have your legs ripped off in a car accident, you should be limited in your recovery.
Certainly puts an interesting spin on one's Constitutional right to have access to the courts -- and all that right entails.
Posted by E L Eversman at 04:30 PM | Comments (2) | TrackBack
December 09, 2004
2005 Scion XB
I'm currently driving a 2005 Scion XB. When it first showed up, I took one look, and said, "What is that?" One of my co-workers calls it The Toaster, because, well frankly, it looks like a toaster on wheels.
It's very spare inside, which I never mind. The Scion XB has great visibility as a result of its square glass surround. It's quite comfortable and easy to maneuver. I'm still trying to adjust to the fact that the speedometer et al. is located at the bottom center of the windshield, rather than in direct line with the steering wheel, and it is an odd feeling to see darkness if you look down at the steering wheel when driving at night. Also, because of its boxy design, this is not a great car in high winds.
Attributes:
Automatic
Silver out
Black cloth in
Moonroof
Posted by E L Eversman at 07:32 AM | Comments (1) | TrackBack
December 08, 2004
Where Are the Automotive Blogs?
I find it almost incomprehensible that car manufacturers don't have corporate blogs on their products. Just think, they could extoll the virtues of this model or that one, take us along on a virtual tour of the assembly facilities, and give us glimpses of concept cars to name a few things. These companies could have us running to their sites to weigh in on whether a "sport wagon" (think Dodge Magnum) has any viability in modern America or whether hot pink could be the next must-have color. Instead of wasting money on advertising and market research, why don't they just bring us, the consumers, into the loop and get our reactions to ideas ahead of time?
When I started looking in to blogging, I was extremely surprised to find that the ratio of lawyer blawgs to auto blogs is about 1,000:1. (This is a made up ratio, so don't waste my time telling me that it's wrong. However, if any of you very technical types with far too much time on your hands feels the need to tell me what the exact ratio is, be my guest.) Traditionally, lawyers are so far behind in technological savvy that I still know ones who use Word Perfect for DOS -- if they use computers at all. Car companies are usually so far out in front of the legal world on tech issues that they are speaking a whole new language.
I remember being soundly chastised my first semester of law school for using the word "proactive". My contracts professor made a point of telling the entire class that "proactive" is not a word in the English language and that "active" encompasses the entire concept without needing the redundant "pro". Heck, I knew that, but General Motors and the other car companies were busy realigning the language to fit with manufacturing ideas and they just didn't care. And, look who's laughing now. I'll bet even he says proactive. Oh, and they made us spell employee with one "e" on the end because some company accountant determined it would save GM about a billion dollars a year in printing costs. So, with TQM, ISO, and Six Sigma under their belts, why are they lagging behind on blogging?
Most blog directories don't even have a car category, even though autos is a standard category on the major search homepages. That should tell you how few of us are out there on this subject. Blog Rankings is one of the few that does, and at the moment, mine is the only one in it. Blog Catalog has an automotive blogs catagory, but most of the blogs in it are posted by enthusiasts, with Autoblog as a notable exception. Most adults in America outside of NYC own or drive cars.
So I ask again: Where are the automotive blogs?
Posted by E L Eversman at 12:46 PM | Comments (0) | TrackBack
December 06, 2004
Importer Seeks Approval to Import Non-Conforming Mercedes-Benz MPVs
NHTSA posted a notice for comment on J.K. Motors', a Baltimore, Maryland importer, petition to import Mercedes-Benz vehicles which are not in strict compliance with NHTSA's motor vehicle safety standards. J.K. Motors asserts that the multi-passenger vehicles (MPV) manufactured for a non-American market are "substantially similar" to vehicles made for the American market and certified as complaint by the manufacturer and which can be made to conform to mandatory U.S. motor vehicle safety standards.
49 U.S.C. 30141(a)(1)(A) provides a mechanism enabling vehicles not originally manufactured to conform to all applicable Federal vehicle safety standards to be imported -- even when there are no other substantially similar vehicles manufactured for the U.S. market -- if the safety features comply with, or are capable of being retro-fitted to comply with those standards. NHTSA uses destructive testing (crash tests) and "other evidence" it deems adequate for determining if the vehicles meet or can be made to meet the U.S. motor vehicle safety standards.
For specific information on this petition, see Docket No. NHTSA-2004-19737
Posted by E L Eversman at 10:18 AM | Comments (0) | TrackBack
December 03, 2004
Yes, WSJ, Toyotas and Hondas Are Still the Best
The Wall Street Journal called me earlier this week to ask if a statement quoted in "Buyers Take the Driver's Seat When Shopping 'Pre-Owned'", appearing in Terri Cullen's, May 15, 2003, Fiscally Fit column was still valid. When columnist Terri Cullen called me last year to ask which cars best retain their value, my kneejerk response was, "Two words: Toyota and Honda." And that's exactly how it ended up in her article.
The good news for Toyota and Honda is that I gave the same response at the end of November 2004. Actually, this time I think I got it down to one word, "Absolutely".
Toyota and Honda products are still the leading vehicles when it comes to maintaining value. Because they are so dependable, even high mileage does little to decrease their worth over time. Ask around and you will find that there are people in your immediate circle driving 1992 Camrys, 1995 Honda Civics -- many of them with 200,000 miles or more. One friend of mine said goodbye last year to his beloved 1991 Civic with 250,000 miles on it, and, if the body had been able to keep up with the never failing, heart-of-gold engine, he would have it still.
So, yes, WSJ, Toyotas and Hondas are still the best value holders you can find.
Posted by E L Eversman at 02:48 PM | Comments (3) | TrackBack
December 02, 2004
Progressive Admits Diminished Value Exists for Fla. Third Party Claimants
Insurers in many states continue to claim that diminished value is not recoverable by a third party claimant. Privately, insurance industry attorneys and representatives will concede that a third party claimant -- the vehicle owner not at-fault for the accident -- is entitled to be compensated for any decrease in value of the damaged vehicle. On the record, however, they staunchly claim that until a state legally recognizes the claimant's right to recover diminished value, the insurer has no obligation to pay it.
Florida third party claimants, however, have an additional card to play when asserting recovery for diminished value -- Progressive admitted a third party's right to recover DV in its brief to the Florida Supreme Court in the case of Siegle v. Progressive Consumers Ins. Co., 819 So. 2d 732 (Fla., 2002) Progressive argued that contract law governed the ability of a first party claimant to recover diminished value, while tort law controlled a third party's right to recover. An interesting quote from the brief reads:
Although an insurer is not obligated to pay for the “diminished value” of a properly repaired vehicle in response to a first party claim, the owner of a vehicle may seek damages in tort for lost value from a tortfeasor who has caused damage to the vehicle. See McHale v. Farm Bureau Mut. Ins. Co., 409 So. 2d 238, 239 (Fla. 3d DCA 1982)(“In such cases, the cost of the repairs made plus the diminution in value will ordinarily be the proper measure of damages...”). In all likelihood, the latter concept forms the basis for the 1984 Insurance Bulletin upon which Siegle relies (I.B. 9-10), given that the author of the Bulletin uses the term “damages,” rather than “loss,” in referring to an insurer’s indemnity obligation. To the extent that the 1984 Bulletin refers to third party claims, it accurately reflects the well-settled tort¬based rule that “the cost of repairs plus the diminution in value will ordinarily be the proper measure of damages.” Id. at 43 9; Travelers Indem. Co. v. Skyway Marine, Inc., 251 So. 2d 327 (Fla. 3d DCA 1971).
ANSWER BRIEF OF RESPONDENT PROGRESSIVE CONSUMERS INSURANCE COMPANY, p. 6, 7. Download file
Having admitted that third parties are entitled to seek recovery on their claims for diminished value, third party claimants should never be told, at least by Progressive, that Florida doesn't recognize their diminished value claims. I have to wonder if that is not an unfair claims practice that should be reported to Tom Gallagher, Florida's Chief Financial Officer and the person charged with overseeing insurance practices in the state.
Posted by E L Eversman at 08:45 AM | Comments (1) | TrackBack
December 01, 2004
Conn. Insurance Dept. Biased Auto Body Association of Conn. Pres. Says
Tom Bivona, Sr., President of the Auto Body Association of Connecticut, told The Hartford Courant that he feels the Connecticut Department of Insurance is biased in favor of the insurance industry. The Auto Body Association of Connecticut has battled with state insurance officials over the insurance industry's encroachment into the body shop business by steering, interfering in the repair process, and dictating how repair facilities are compensated.
The Insurance Journal even picked up Bivona's comments in an article covering the Connecticut Insurance Commissioner's belief that there is no corruption or "bid rigging" occuring in her state. Susan Cogswell, the Insurance Commissioner, said that she has not received any complaints about broker commisions or fraud and is not searching out any wrongdoers.
According to Bivona, the Connecticut body shop industry continues to suffer from a lack of genuine oversight of insurers' practices. Bivona's group has even suggested that Governor M. Jodi Rell replace Cogswell as insurance commissioner. Some relief may also be coming, as Bivona's body shop association has found a listening ear in the state's Attorney General -- who just might end up as Connecticut's next governor.
Conn. Chief Hears No Complaints of Rigged Bids; Defends Role in Balancing Industry, Consumer Needs
Posted by E L Eversman at 03:43 PM | Comments (0) | TrackBack
Insurance Issues Will Be Topic of Fla. Legislation
Insurance Journal reported today that, while celebrating the end of hurricane season, Governor Jeb Bush announced that insurance issues will be a subject of focus for the next session's Florida Legislature.
Gov. Bush Urges Fla. Legislators to Discuss Multiple Deductibles, Repair Work
Posted by E L Eversman at 02:01 PM | Comments (0) | TrackBack