Dixie vs Detroit...It's on!!!

Washington -- Four governors strongly defended Toyota Motor Corp.'s safety record and suggested the Obama administration has a "conflict of interest" because of its majority stake in General Motors Co.

The letter, from Kentucky Gov. Steven Beshear, Indiana Gov. Mitch Daniels, Mississippi Gov. Haley Barbour and Alabama Gov. Bob Riley, was the first public defense of the Japanese automaker from prominent U.S. politicians after a series of recalls of 9 million vehicles worldwide.

Note: This plays right into the sweet spot of Lansing mayor and MI gubernatorial hopeful Virg Bernero. He should get a bump out of this if he plays his cards right. This strengthens my case that the next POTUS will hail from either Dixie or the Rust Belt. Lines have been drawn in the sand.

The rest after the jump.

Haley Barbor's Offensive Against Detroit

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Updated On: 2/11/10 at 03:19 PM

How about getting on Toyota's CEO for not only making his product look bad in the way he acted initially about the brake issue? This is the guy you gave subsidies, among other sacrifices, to come into your state for business?

It's really a strange action they've taken - a combo of Japanese and US culture that doesn't mesh. It sounds as if they feel threatened.

What's the difference between a 'shakedown' and a legitimate grievance?

I would not quite say that the stock price is plummeting.

Its year-year low is 56.79, and the high is 91.97. It currently sits at 76.00. I honestly thought it would correct far more than it has with all of the recall news.

Updated On: 2/11/10 at 05:15 PM

I don't have much sympathy for Toyota - they managed the situation terribly, and from what I have read, there were issues and warnings about the accelerators going as far back as 2003. Apparently, State Farm also notified the feds of the problems, but nothing was done. I have read that this is really a software problem, and they kept trying to couch it as something else - so I think they have been disingenuous. The reputational hit is as big, or bigger than the litigation risk (in my opinion only).

Honda also has a huge recall now because of issues with airbags.

The only "winner" in this mess may be Ford, especially if its new models are recall-free for a bit.

Updated On: 2/11/10 at 05:36 PM

"The only "winner" in this mess may be Ford, especially if its new models are recall-free for a bit."

Despite everything, including all the past years of Toyota hype, GM is still the top seller in the US. They'll be making money hand over fist again in short order.

Oh, the Volt is definitely being released. The pre-production models (i.e. assembly-line test models) are scheduled to come off in March and first unit date is (unofficially) expected to be in November. The engine plant for the Volt's on-board generator is currently being tooled and is slated to start running parts in July. The battery plant opened in January.

Sales weren't and aren't the problem at GM or Ford. The problem was legacy costs and debt load.

The bulk of the losses GM was reporting weren't even from the auto operations but rather from GMAC's involvement in the mortgage market. Even now GMAC is making money on the auto finance side but is losing on the mortgage side.