With the recent $700M treasury backing of a number of financial institutions here in the USA, there’s obvious pretense now for politicians to spend our money elsewhere in the economy (because the first $700M worked so well). With the obvious worry and underlying lack of confidence of the average American consumer, the two Presidential candidates are looking for last minute “quick fixes” to gain support for their candidacy. In addition, Auto executives praise both Obama and McCain for their call for a faster distribution of the loan. Both McCain and Obama realize that there will be both economic and emotional consequences to a failure or bankruptcy to the likes of GM or Ford. Both companies are currently in a fight for their lives, struggling to find ways to survive the poor sales and terrible credit situation many Americans have put themselves into. On the bright side, Ford still has well over $26B in cash equivalents and GM has over $21B (due to the last 7-10 years of spectacular growth and solid profit surpluses). These reserves, even with the most grim estimates by financial analysts, should be enough to last Ford and GM through the end of 2009. Should there be a more dire situation (and it’s prudent to always assume the worst), both auto makers have access to numerous lines of credit and have been aggressively restructuring and laying off workers to minimize their overhead as much as possible in the tough times. In addition, 2010 will see drastic cost reductions due to the fact that many of their healthcare and pension liabilities to retirees and union workers will be reduced under a new labor deal. GM has made it clear that, ”…bankruptcy is not an option GM is considering.” according to Renee Rashid-Merem, a GM spokeswoman.

Consider the fact that bankruptcy will not only harm the GM brand, but the filing would have adverse effects on the residual value of new and used cars, current GM warranties and selling inventory still on GM lots. This would make consumers gravitate to other, more stable carmakers. Whereas companies like Delta or K-Mart could use bankruptcy as a means for escape of an unmaintainable financial situation, GM and other brands that plan to continue in the foreseeable future need to present a degree of stability to their potential clients.

The LA Times recently reported that just two weeks ago President Bush signed off on a plan to guarantee $25 billion worth of low-cost loans to U.S. automakers and suppliers, a crucial lifeline at a time when borrowing at any price is almost impossible for large companies. Representatives on both sides of the aisle have supported these loans, loans that would otherwise be impossible to secure from any other means. If no one else (no other bank, the best financial minds in the world perhaps) is willing to lend this money Ford and GM, how does the US Federal Government think it can help (considering their complete lack of regard for their own financial book balancing)?

So, that leaves the unimaginable, Ford or GM going bankrupt. GM representatives cannot will themselves out of bankruptcy. If the marketplace for credit for the average American does not change by the time GM and Ford’s credit and current cash runs out, bankruptcy will be the only option. However, as a recent article on Jalopnik pointed out, it’s not a crisis of brand. It’s a countrywide issue affecting all car companies:

“For the first time in the history of the company, the crisis isn’t product. It’s clear GM’s figured out the need to design and build high quality, fuel efficient and attractively-designed vehicles. Not only have they realized the need to do it, they’re actually doing it. Even the most jaded auto enthusiasts, journalists and industry analysts with even the slightest clue have to admit they’ve stepped up their game in the past few years.”

Here is where the bright side comes in. GM has a competitive product. Ford isn’t quite there yet, but they are making strides to bring many vehicles from their European markets that fit right in with cars like Yaris, Aveo, Camry and other standard names that fall into the inexpensive, fuel efficient and reliable category. Just look at the new Focus and Fiesta.

GM and Ford have a long way to go. They have survived terrible times in the past and the government is going to try to do all they can to make things work. The fact is though, GM is making good cars. They are trying like they never have before. Last year when Toyota surpassed them as the #1 automaker in the world, they realized that they had to stop trying to market cars for the sake of marketing and start making real cars that people wanted to buy over the (foreign) competition. Because of that, if GM does make it through this current climate unscathed, they’ll be in a much stronger position than they ever have been before. So where does this leave Senator McCain and Obama? Well, their hearts are in the right place, but time will tell whether their heads are. The free market will decide if GM and Ford are destined for the big junkyard in the sky. I have a feeling though, it’s not the Federal government or the next president that will keep GM from the pain of bankruptcy. It will be a combination of smart managers, an growing product line with solid products and the will of the American people to keep The General’s door open.

The History of Muscle Cars

The year was 1968. The Pony Car revolution was in full swing with the likes of Mustang Mach 1s and Cobra Jets galloping around motor-city with the upstart Dodge Challenger looking for a fight. Coming standard with a 5.2L, 230HP V8, the brand new Challenger was beating up on old 60s Mustangs, with only the HiPo 289 being able to challenge it. The newer Mustangs were gaining speed and engine size with standard 302 cubic inch V8s and 429 performance versions. The larger, mid-sized “muscle cars” like the Plymouth Road Runners lined up at stoplights in search of the smaller pony cars with their 7.0L Mopar engines. However, at the top of the heap was the 1970 Chevelle SS 454. For a now paltry $3,800, its 7.4 L engine was rated at 450 hp, the highest ever for a street car at the time. Gas was cheap. Cars were loud and fast. The soundtrack to your Friday night was the induction of the 4-barrel up front and the fire breathing pipes in the back, surely all your local stoplight drag opponent would hear with all the time you’ve spend tweaking your carbs. Fast cars were simpler back then. The oil embargo hit soon thereafter though. Small foriegn cars took the stage and the lime light in the 1980s, surplanting the beautiful and brawny muscle cars. It would be another 20 years before the American muscle car would take the stage as the most anticipated cars around. Fast forward…

In the last 5 years, the resurgence of American Muscle cars has created an exciting market once again in a segment long dominated by the likes of the BMW M3 and it’s host of European cousins from Audi, Mercedes, Lotus as well as the Japanese Domestic Market (JDM) hot rods like the Toyota Supra and Nissan Z-cars. It can’t be too much of a coincidence that the baby-boomer’s 50th Anniversary (1946-ish) happened a mere 3 years ago. The coming of age of this economically established group has changed the face of American motoring as much, if not more, than the Green movement going on throughout the car industry. With a flury of new cars offered that are throwbacks to the “good old days” of muscle-mania, the Big 3 have redefined the term muscle car with some of the most well known names in motoring, back and better than they ever were, even if slightly watered down.

Ford Mustang - The original Pony car. The Mustang has been in continual production since 1964. Though some of its iterations haven’t quite as hardcore as the original, it has stood the test of time and has recently come back as the original “re-released” as retro American Iron with all new technology and features you’d expect on a modern car, but with the great looks of the original. From the triple, vertical taillights to the large round headlights and groovy fastback look. The new Mustang is a perfect modern representation of the classic car that redeems itself from it’s more recent iterations. A full line-up from the basic V6 to the Hertz GT-H to the full monty Shelby GT500 and beyond (Shelby GT500KR), the new Mustang is everything the old one was and more. A great looking interior and passable build quality has made this car a future classic. With the sheer number of “old” mustangs build, it’s possible to have a new and an old one at a pretty reasonable price too!

Chevrolet Camaro - Though the Corvette was always the “halo” car of Chevrolet, the Camaro was really the main challenger to the Mustang. With it’s more edgy look and agressive stance, the Camaro meant business. Though the Camaro always was slightly more hardcore and heald closer to the same principles through it’s lifespan. As with most muscle cars that made it through the 80s, it got watered down some, but even the later F-body were true muscle cars. Using the same LS1s at the Corvette and Firebirds, the Camaro was never really quite as popular as the Mustang or the Corvette. It’s always had a loyal following with both street racers and those who took their cars to the track. For some reason though, the Camaro has always played second fiddle to many other muscle cars. Perhaps with the release of the 2009 Chevy Camaro, we’ll finally see it get the attention it’s deserved. With looks to kill and a super small-block, the car is sure to be a hit!

Chevrolet Corvette - More supercar now than muscle car, the days of the huge hood and giant fenders is long gone and the Corvette now benefits from a more proportioned look which not only helps add to the beauty but acts more functionally as well. Looking closer to a new Ferrari 550 Maranello than the original Corvette, the common thread these days are round tail-lights, thumping great GM V8s and the attitude you get from driving one of the best handling cars on the road today. From the basic Corvette to the Aluminium/Carbon/Balsa injected chassis of the Z06, the Corvette means business. It acts less these days like a weekend, top-down cruiser and more like a high performance GT car meant to compete with the likes of Ferrari and Aston-Martin, but at 1/2 the price. You won’t get quite the interior quality, but you’ll get a car build as solidly as any, as relibly as dirt and that is actually pretty practical and economical. With a decent sized trunk/hatch and over 26MPG on the highway, the Corvette is one of the few muscle cars that’s changed it’s image into something more mature. That doesn’t mean it’s any less fun though!

Pontiac GTO - Though originally, one of the greats, the revised and revamped GTO has failed to exite people. The real shame is that out of all the retro muscle cars mentioned here, this is probably the best. It’s cheap. It’s reliable. It’s fast as heck. It’s a practical car and is based off a hugely successful car named the Holden Monaro which comes from Australia. The handling is crisp and subtle. The chassis is as good as anything out there. However, due to a pretty plain body and almost no queues taken from the original, the GTO is a GTO in name alone. GM should have moved it to the Chevrolet division and dropped a Monte Carlo body on there. Not only would they have had one of the best Monte Carlos ever created, but it would be at least a little closer to it’s NASCAR cousin that the likes of Jeff Gordon have been running around in for years. It’s a shame this car died so early in it’s revival. However, there were enough made that in a few years we should have another super bargain basement performance sedan that has a Corvette engine in it.

Dodge Challenger and Charger - I’m putting these two together because they are so similar in so many ways, both the original and the revised versions. The original versions both had the same exagerated styling. Huge noses. Similar wheel bases. Even the new cars are based on the same Daimler-Chrysler Mercedes E-class chassis. Though it’s not immediately the

first performance based chassis that comes to mind, Mercedes did a spectacular job tuning this chassis and turning it into something strong enough to hold the heavy E-Class/Challenger/Charger bodies, but tuned well such that the car’s independant suspension (something the originals did not have) have made these cars handle as well as they accellerate. With the Charger re-released as more of a family ‘bahn-burner (a BMW M5 compeditor) and the Challenger more as a sporty mucle-car coupe (a BMW M3 “challenger”). Though the charger is a great car, it’s really quite different than it’s “father”. The Challenger, on the other hand, looks the business because it’s such a great looking, modern version of the original car. It’s the same car with new proportions. Though I have only seen one in the flesh from the outside, the interior is said to be spacious and more up-market than the original. All of the above arguments mean that this car should be a winner.

So, with all that’s been said, I have to conclude that the new Dodge Challenger is going to end up being the muscle car that emerges from all this as the new king of the hill. The Mustang has been around forever. It’s time has come and gone, and though the new Mustang is a great car and a great looking car, and the new Camaro finally gets some of the looks and sexy appeal previous versions have lacked, the new Challenger is where the money will be going. The original car was only around for 4 years. In that time though, it was the star of such movies as Vanishing Point and the villian of Bullit. The car has a certain bad-boy reputation and with looks to back it up and a 6.2L Hemi (though I’m sure Mopar will give it a larger engine or add forced induction) to surplant it as the king of muscle cars. The Corvette may be faster and the Mustang may sell more cars, the Challenger is the baddest mother of them all.