No, axing is a verb in gerund (tense) form (as in, I ax (a verb) in the time frame to which I refer). Dick runs. Dick was running his mouth. Wagoner was axing the EV1 electric-car program , his admitted biggest mistake as a CEO. The point is that there are two parts in the first sentence to which the “it” in the second sentence could have referred, with completely contradictory results. This is typical for political speech, so that the listener gets to hear what they want and have their pre-conceived notions reinforced.

Either way you want it, Wagoner states that “Axing the EV1 electric-car program and not putting the right resources into hybrids,” when asked to name his greatest mistake as CEO.”

How to resolve this non-speak coming from GM? My advice it to completely ignore everything that GM’s management and PR says and instead get involved with the companies that actually produce, sell to customers and get on the road, those vehicles that we are interested in (in my case, those with massive low end torque and linear acceleration, for great performance).

The word “it” usually refers to a noun or object (the EV-1 electric car program) more than to a verb (axing), but that you think that Mr. Wagoner said the opposite of what he said shows the real problem here. The big 3 automakers could not communicate themselves out of a paper bag, let alone to profits, they have no vision, long term goal, strategy or leadership, which is why they have no on the road consumer purchased results, unlike companies such as Tesla and Vectrix. My 4’5″ tall Philipino dragon lady boss could push out fuel efficient, profitable cars way, way faster than the big 3 have over the last 35 years that we’ve been demanding them.

News flash – short term lies that come true in the long run are what sells and works, and anything that puts more electric drive on the road in any fashion is progress towards increased market share, which is what eventually provides the business power for genuine full scale efficiency gains over the entire product line. Game away, Toyota, game away – you’ve got the end game figured out and its the broad addition of electric drive. Sure, they’re hurting now, like everyone else, but they’ve already got the tooling and relationships in place to get to the next lap for this new century’s success. Same with Nissan, with VW and BMW scrambling in there too. As usual, Honda will lag a tech generation behind and clean up loot like a vacuum cleaner on the second wave. No-one likes being the first – it’s risky and you don’t capture all the benefits – Toyo did it with the Pruis and will mostly grab the v.2 mature (long term) full parallel hybrid spoils (including leasing that tech to other automakers). Honda will get the most out of v.1 weak (always gas assist for moving) hybrid (Insight II and others), with American automakers eating their lunch a little. GM wants to repeat this long term strategy with the v.3 series hybrids (little trains with rubber wheels) and they could be big winners in the transition to v.4 full electrics (they can just drop the generator on some model versions, stuff in more power pack (different amounts based on consumer preference) for price option upgrades). This is the long term end game for autos – no avoiding it, just based on basic vehicle level motive efficiency and real world performance (it’s the first 30 feet from a dead stop at a stop sign or from when the light turns green that’ll really matter to daily drivers). Even hybrid based on hydrogen fuel cells, which currently is a ridiculous non-starter, and natural gas, which is great idea at current prices and hugely expending domestic supply, rely on electric drive.

Otherwise, I agree with your comments and find your discourse to be increasingly rational and credible.

Toyota has probably gotten more free advertising from the Prius than the money they’ve lost on it, but it’s not likely the same reaction would have awaited GM. When Toyota lost money on Priuses to promote their green image, it was heralded as masterful marketing. If GM had done it, it would be criticized as a publicity stunt. It depends on if you like them or not (someone you like is “persistent” – someone you don’t is “pushy”), i.e., prejudice.

When push comes to shove, conservation isn’t achieved by a green image, but by the overall conduct of a society. One Tundra consumes enough extra fuel to undo the fuel savings of five Priuses compared to a typical sedan. So when I see their cross-subsidization of fuel-efficient products by (formerly) profitable gas-guzzlers, I see hypocrisy. To me, their approach is a lie. When I see the journalists and environentalists awaiting Toyota’s next “word from on high,” I see fools.

As far as taking an overall approach to a market, the Japanese are good at that, and are very patient. Remember that GM has to please the NYSE crowd. Ten years ago, they pushed all the domestics to start stock buy-backs with all their “idle cash.” Chrysler tried to save up for bad times with a cash hoard, and the next thing you know, Kerkorian buys a substantial interest and demands a “special dividend” to enhance “shareholder value.” Before that, it would have risked a leveraged buyout. Wall Street has put very little value on being a stable company in the last 20 years, instead demanding growth, even in mature markets. This demand for short-term quarterly result makes long-term planning almost impossible.

From Blooomberg, this week:

“Axing the EV1 electric-car program and not putting the right resources into hybrids,” Wagoner [of GM] told Motor Trend magazine, when asked to name his greatest mistake as CEO. “It didn’t affect profitability, but it did affect image.”

As I said, it just depends which GM lies you want to believe. Just because a PR release ends up recorded in the press doesn’t make it true.

If you make each product purely stand alone, rather than pursue an integrated product mix strategy linked to your marketing to maximize market domination over time and consumer identification, you end up with something like GM in the 1970s and 1980s. Oh, that’s when they started to have their lunch really eaten hard, wasn’t it? Remember the Honda 600, fun and efficient, though insanely underpowered compared to today’s hybrid mid-size sedans?

When the facts change, I change my mind. What do you do?

Well done, getting back on topic and sharing some interesting information on the Toyota Mississippi plant, although coupling with Texas is a weird stretch. I agree that the plant was originally intended for hybrid SUVs (not trucks), then hybrids, then what’s for dinner now, nothing.

I hope the general public is now starting to get the correct idea that it’s expensive and difficult to build cars and that the initial capital barriers for a new material chassis and assembly are daunting and that the market keeps changing, primarily driven by the economy, automakers egos and misunderstandings of consumer preferences and usually no long term profit goals at all.

Hybrids are not just about fuel savings. Electric drive, due to its massive low end torque and linear acceleration, can make one heck of a muscle car off the line, as the Tesla Roadster (and the Tzero and the Wrightspeed, Current Eliminator V, Venturi Fetish, etc.) robustly show. It’s about great fun and beating Porsches at that level, not the range or long term savings over gas. Soooo… as an automaker, you make an electric gas pincher when energy prices are high and an electric romp ‘em-stomp ‘em off the line supercar when gas prices are low, an electric off road vehicle at all times for pure fun and an electric pickup truck for PR. A family would get one of each for maximum flexibility. Then you just continually tweak your simple global architecture product mix to adjust to the wild energy price swings and consumer image (from DVD players for the kids in the car to extreme fashion accessories for the roadster to solar amber cabtop led lights for the pickup truck – duh). The result – extremely loyal cutomers and profits. Ta-da!

Using a broad definition, there is not a single product that makes economic sense without 1) subsidies from the government, or 2) subsidies from the manufacturer. Why should hybrids be any different?

It’s pretty easy to figure out that after the global economy bottoms out and the falling energy prices bottom with it (down to zero at the lower bound), that eventually the economy will recover. As that happens, what direction do you think energy prices will go? The only direction they can from the bottom, up. And we had really strong evidence this past summer what the consumer is going to want then, when energy prices start to go up again. So we already know that hybrids are viable long term for automakers. What we don’t know is how the automakers will survive the recession until then.

Getting wildly back to topic, another fact is that Toyota’s Mississippi plant is half-tooled to make Tundras and Sequoias, which, coupled with their Texas plant, would have given them the capacity 500,000 gas-guzzling, smoke-belching, worst-in-class fuel economy commuter trucks. When gas went to $4/gallon, they decided to switch the plant to Priuses, instead of importing 100% of them. Being half-finished with this new line, their Tundra and Sequoia sales dropped so much that they can’t subsidize their Prius sales and make them appear cheap, so they nixed that. Now this plant is halfway tooled to make two different vehicles, but making neither. Yeah, they are definitely smarter than anyone in this country.

The biggest shame isn’t that they’ve hood-winked the American public, punching their “green card” with the Prius while making their money on the trucks, but that they used the truck profits to make it appear that hybrids are cheap to make. This may have ruined the market for hybrids that are profitable, since customer expectations will be to get the increased technological content (electric motors, battery, cooling system, etc.) for a song.

My point in going off topic before was to point out the side-effects of our stupid energy policy. No one, including Toyota, knows what the American customer will want one year from now, much less after a 4-year product development cycle. Without higher fuel prices, it will be a while before hybrids make economic sense without 1) subsidies from the government, or 2) subsidies from the manufacturer. Both ways are unsustainable.

1. GM recently made a statement that the EV1 did not affect their profitability and GM didn’t properly market them (most people have still never heard of it, despite a recent movie that discusses it) and made it extremely difficult to get their bizarre lease. You are selectively choosing the GM lies that best suits your FUD. That doesn’t make it true.

2. Let’s be truthful here. Truck sales last month were actually hugely DOWN year over year, but were slighly less down than hybrid sales, mostly on massive discounts on trucks, a powertrain related recall on American mild (weak) hybrids and on news that an American manufacturer was pulling and refusing to support two hybrid models . Everything in autos was hugley down last month, year over year (excepting a couple of new models that were ramping up a year ago), on the national and global recession and on banks not lending much these days (credit crisis).

3. The topic of the article is the idled Toyota plant in Mississippi due to collapsed automobile demand, primarily from a global recession and the credit freeze crisis, not gasoline tax proposals. You are wildly off topic. Good luck getting a tax increase passed in America. Time for a new article?

As far as getting people to buy the right vehicle in the first place, the tax would be the best way to do that. You can’t really predict how a vehicles would be used. If someone wants to buy a Ferrari that gets 12 MPG, but they drive it 500 miles/year, that’s fine with me. Why penalize him with a big excise tax for buying it just because of what it “could” do? Likewise for someone who wants a Hummer because they’re going off-road.

Imposing excise taxes and mileage requirements on vehicles based on their size, powertrain, MPG, etc., becomes writing laws that only a lawyer could love, and ends up creating unwanted side-effects (like CAFE creating the SUV). Lord only knows what screwed-up effects the next round of mileage or vehicle requirements will cause.

On the other hand, shifting taxes from income to gasoline creates the right incentives for the combination of vehicle purchase and driving habits, with no other rules really necessary. Also no new bureaucracy and its transparent (they can’t hide or divert the revenue).

Toyota plans to use Mississippi plant to produce whatever is selling hot for the next 5 years:

1) Current plan: Nothing. Vehicle sales of every type, from subcompacts to full size SUVs, have plunged, due to the current worsening global recession and credit freeze.

2) Previous plan: Prius, due to skyrocketing gasoline prices.

3) Before that: Hybrid Highlander SUV, due to great profit margins on SUVs and rising gasoline prices.

So what’s next for the plant?

After credit gets unfrozen and the global recession ends, what do you think will happen to general demand for goods? It’ll increase, which will send energy prices higher. Notice a cycle there (admittedly extreme this time around)?

My current bet’s on a blingtastic, pricey Corolla wagon with maybe a light hybrid set up to haul the extra weight of the useless chrome that Americans demand, starting in 2011. Jetta Sportwagen TDI killer, anyone?

The Prius plant (in Miss. or wherever) will come with the next big run up in gas prices (we’ve had three huge ones in the last 30 years – you think that’s over?) or whenever they figure out how to make a race version of it. High end 2000GT or MR2 or Supra or Celica style, but with massive low end torque and linear acceleration, anyone? Ka-ching!