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It's All Business at Depressed Auto Show

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It was a different kind of auto show this year in Detroit. Gone were the celebrity presenters, the pyrotechnics, the herd of cattle escorting new pickups to the media pool. Those days are over. The "industry climate," to use bailout-speak, is worse than Detroit's weather -- which is freezing and miserable. And as GM and Chrysler (and perhaps Ford) prepare for another road trip to Washington, they realize it's a bad time to show off, but a good time to show promise. An opportunity to change the subject from cash to cars.

And the press came in droves. Over 5,000 journalists attended the press preview, despite fewer new introductions and big-name absentees. The extensive cut backs in free food, cappuccinos, beer and wine of years past was a non-issue. One thing that attracts press more parties and glitz and glamor is blood.

And boy did it flow! Chrysler, widely considered a lost cause, suffered the worst. After introducing nothing but fanciful concept cars, Vice Chairman Jim Press was surrounded and asked:

Do you really think you're qualified for the seven billion? Why do you think there's a high degree of skepticism about Chrysler's ability? If you have the right product, what's wrong? Who's buying your truck right now?

Although usually quite amiable, Press couldn't help throwing a few jabs in between his parries. He chided "so-called analysts," and said that "the two million people that bought our cars and trucks and love them continue to do business with us."

"Frankly, what the analysts think or don't think I guess is more important to Wall Street Journal readers," he said.

As a follow up, one reporter asked "what's your message to the taxpayers who've given you a lifeline?"

"Thank you!" he answered. The scrum was broken up after ten minutes.

At the GM exhibit, rank and file workers provided a human shield against negative press. The presentation opened with a video montage of employees discussing "a new GM." And 600 workers lined the "main street" stage entrance, where the Chevy Volt and battery-powered Cadillac Converj drove in. They waved signs reading "Here To Stay" and "We're Electrified." Michigan Gov. Jennifer Granholm joined them in solidarity.

It was masterful. Any foreign competitors looking on could have only felt fear and envy. (Of GM!) A partnership was being unveiled.

GM announced plans to build its "Voltic" battery plant in-state. At a large press conference on Monday, they added plans to build a battery laboratory at the University of Michigan -- investing America's money in America. It made great sense. But this being a company in need of a quick buck, it also didn't. Fuel efficiency when gas is under 40 dollars a barrel? From GM? And research and development! Many a reporter at the press conference wore the look of "what gives?" on his or her face. So when the scrum enveloped CEO Rick Wagoner, a Japanese reporter asked, "Are you hoping to pay for this with money from the Obama stimulus package?"

"We have not discussed this, in detail, as part of the stimulus package," he answered. "It does strike me, though, that this is exactly the kind of investment that aligns with several of the priorities of the new Administration: stimulus, green jobs, support of new technologies to reduce our reliance on oil and address environmental issues. In that sense I think it's consistent with it."

And, Bingo.

In an era where nobody's buying cars -- or anything -- the only consumer worth catering to is the President. If the Administration can support them through the recession, GM will be leaner, smarter, more competitive and actually profitable just when gas prices start going back up. Electric cars wouldn't sell right now, but in a year or two they really could be all the vogue.

"We will apply for funding under the Energy Security Act," Wagoner confirmed. "This is the kind of project that we think is ideally suited for that funding, and we hope that can be forthcoming soon."

Lucky for them, in a twisted, Krugmanian depression economics sort of way this really is progress. It's shrewd business and smart PR, too. You just gotta hand it to 'em.

A real expert, Tom Fournier of the auto valuation magazine Price Digests, had similar praises:

"I think they'll be fine," he said. "They've got a lot of smart people. A lot of real dedicated people and they're working very hard to make sure they have a future. I think they'll come out OK."

"American companies are funny," he added. "Until they're under a lot of stress they don't seem to stay focused. They get sloppy when the money's coming in -- they spend it where they shouldn't. But right now they're very focused. They know what they need to do and they're all on the same page."

"Even Chrysler?" I asked.

"I fear for Chrysler," he said reluctantly. "I don't see a lot there. There are a lot of promises, but I think it's going to be very difficult with the credit market being what it is for them to be able to stay on track with new model introductions and to refresh their lines."

Their ambitious new concepts, to Tom, only came off as desperate. "Chrysler's niche really isn't the upscale. They tried that. People don't think of them as an aspirational, upscale brand."

"I just don't know what Chrysler's gonna end up being like in the long run."

Fair enough.