Chrysler Learns Delphi's Number Games ?

Yesterday we talked about the numbers games that got bankrupt Delphi in hot water (and litigation) with the SEC. Today, we see that Chrysler is also up to some number games of its own.

WardsAuto.com is reporting that unlike other manufacturers, Chrysler has been building cars its dealers don't need and can't sell, and piling up a 100,000 vehicle backlog of unsold vehicles (parked out back?) that it just forgot to count as unsold inventory.

Of course, doing that made their public numbers look a lot better than they really were. Some say that little-used accounting practice disguised Chrysler's overall market picture at a time when it was really bleaker than the industry thought.

Now, we learn that at the end of September Chrysler's reported inventory neared 529,000 vehicles. With that glut, which some dealers don't like having to live with, now may be a good time to bargain yourself into a good deal ... or not.

In its defense, Chrysler says it's a common practice but Ford's George Pipas reportedly scoffed at the notion, saying "Absolutely false." The American Honda and Nissan officials also are reported to have said the same thing. Meanwhile, Chrysler says its practice keeps the factories "humming" at a time when the third quarter loss was reported at a staggering $1.5 billion. At that rate the corporate giant could end up humming its way into a one man band in an empty auditorium and falling flat on its face to boot.

Now, rumor has it that Mercedes has shipped in executives under a program called "Project ReFocus" and whose aim is to cut costs and improve efficiency. As they said once before on the streets in Detroit, here come the Germans again!

It doesn't take a German rocket scientist to figure out that it's stupid to build 529,000 cars that aren't being sold. Apparently someone keeps replaying that line from the movie Field of Dreams... "if you build it they will come."

Fruit, like new cars, can't sit on the shelf too long or things can begin to go wrong. After all, fresh lemons can turn sour and rancid with too much age. Thank goodness we have a Lemon Law that's ready for the day when Chrysler ships all those cars out of its back "Field of Dreams."


Delphi Gets Away With Cooking the Books

After a 2 year probe of Delphi's accounting procedures, the SEC sued the bankrupt auto parts maker and 13 persons for fraud and other accounting violations on Oct. 30.

At the same time, Delphi Corp. and some of the individuals settled with the SEC, under which Delphi won't pay any fines or admit any wrongdoing. Last year Delphi restated 3 years of earnings to correct its accounting problems and only months later it filed for bankruptcy protection. Now Delphi successfully avoids getting fined by basically crying poverty.

Former CEO JT Battenberg III and 8 former Delphi executives were accused of fraud or aiding in accounting violations. 3 of the nine, including former Finance Chief Alan Dawes, agreed to pay fines.

The SEC justified its agreement with Delphi by saying that "Despite engaging in widespread fraudulent conduct, Delphi took significant remedial steps and cooperated extensively" said the SEC's Washington office.

Okay, so big business gets away with it again. Delphi cooks the books and, when they get caught, Delphi files bankruptcy and avoids having to pay any fines and doesn't even have to admit they did anything wrong. Sure, some of the players in the game got fined for helping Delphi use accounting tricks to inflate net income numbers by $202 million while hiding a $237 million claim, along with improper inventory accounting methods that bosted income numbers by $80 million. But most galling is the fact that high level executives and business people were in on the scam that inflated Delphi's numbers by hundreds of millions of dollars in nonexistent profit.

Not mentioned in any press release was how much money the "Delphi gang" was paid by Delphi to cook the books. Cooking the books is serious because investors rely on standard accounting practices and basic honesty in the decision to invest in a corporation's stock. Apparently some people at (or with) Delphi took a page from Enron's "playbook for accountants" and learned a trick or two.

So corporate shenanigans cost investors and consumers millions again while big government watches the back of big business, each one helping out the other at the expense of the rest of us. Something isn't just rotten in Denmark --- it's rotten in Detroit and Washington DC too. Maybe it's just all part of the GM Death Watch...

Delphi was spun off by GM several years ago and one can only hope that Delphi's accountants didn't learn their job from GM's accounting bosses, because if they did then this may be a good time to sell your GM stock!

If you've got a lemon GM car or truck, now may be the best time to do something about it (before someone counts the bean counters).


Voting Can Be Easier Than You Think

How would you like a cup of coffee with that ballot? How would you like to vote in your morning robe ... or out of it? How would you like to cast your ballot after your eggs and before your bacon? And how about a refill on that orange juice while you cast your vote?

What, they don't serve breakfast with the ballots at your polling place? Then you should use an absentee ballot.

We just voted. We did it at the kitchen counter over a cup of coffee. We discussed each candidate and ballot issue. We read the local newspaper's Election Guide by the League of Women Voters, which outlined each candidate and each issue. We even had our laptop there, to do any last minute googling. I was expecting to be out of town and requested an absentee ballot, (never did that before).

Every vote was thoughtful and we didn't forget which way we wanted to vote on Issues 4 and 5 either. Those are Ohio's confusing and competing non-smoking measures. Issue 4 is actually supported by the tobacco industry while Issue 5 is not but both are worded to make it sound like they are a vote against the tobacco industry. Thank goodness we had time to read about them and figure out what was really going on --- something we couldn't do if we were standing in private little voting booths while someone else was waiting to get in right behind us.

Anyone is allowed to vote with an absentee ballot. You don't even need a reason. Lots of people use it to avoid long poll lines. Some people use it because they just don't trust electronic voting machines. After all, if Robin Williams can get elected President, there is some reason for doubt (and a lot of reason for humor). A quick google for "don't trust voting machines" shows that there is no shortage of news articles and web sites that have pointed out why easy it is to rig the computers and the results. The machines have even been banned in some places. A little caution can be a healthy thing.

But for me, what was the best part about how we voted this year? I had my slippers and robe on. Now, that's easy voting. If you didn't use an absentee ballot this election, remember to request one next time. But don't wait until it's too late. Do it early. Check out some Election Tips on how to vote so you can be sure you do it "legal" too because voting is the most important legal right you have.

Who you vote for is your own choice. Who did I vote for? Well, obviously Marc Dann for Ohio Attorney General. Why? Partly because I remember very well what his opponant did, and more importantly did not, do for Ohio consumers when she was Ohio's AG before, and I don't want to see that happen again. And, others have also recalled how The AG's office has been used, some say misused, in order to protect and even promote big business interests at the expense of Ohio's consumers.

Mostly, though, I voted for Marc Dann because I think it's time we got rid of the professional politicians who have been running Ohio (into the ground) for the last eight years. It's time we had an Attorney General who cared about children and consumers again.

We have a Lemon Law and other Consumer Protection Laws. What we need now is an Attorney General who wants to enforce them. That's Marc Dann.


Toledo Newspaper Endorses Marc Dann for Ohio Attorney General

We strongly support government officials who protect consumers, and we ask you to do the same. The Ohio Attorney General's office is in charge of protecting Ohio consumers and that is why this year's election is critically important to consumers everywhere.

That's also why the following Editorial article, published in the Toledo Blade newspaper on October 15, 2006, is presented here in its entirety as a public service announcement in favor of better government and better government officials.

Dann for Attorney General

Ohio needs a watchdog, not a partisan lapdog, as attorney general, which is why we emphatically endorse state Sen. Marc Dann for the post in the Nov. 7 election.

After The Blade exposed corruption in the Bureau of Workers’ Compensation in 2005, a scandal that spread to Gov. Bob Taft’s office, Senator Dann, a Democrat from the Youngstown area, was among few legislators in the Republican-controlled General Assembly to speak out forcefully to further uncover what would become known as “Coingate.”

We believe that Senator Dann would serve a similarly vigilant role as attorney general. Based on his performance in helping to peel back the layers of official deceit that initially shrouded Coingate, we have no reason to doubt his claim that he would be as tough on Democrats who might be elected to state office as he would be on Republicans and their culture of corruption.

Senator Dann’s Republican opponent, Betty Montgomery, wants her old job as attorney general back, but she doesn’t deserve it. As the incumbent state auditor, and before that as attorney general, it was her job to blow the whistle on Tom Noe’s rare-coin investment deal as soon as she learned of it, but she did not.

Instead, Ms. Montgomery cruised along as an integral part of the see no evil, hear no evil, speak no evil cadre of GOP officeholders who have been running Ohio for the past 16 years. They looked the other way as workers’ compensation officials quietly handed Noe the breathtaking sum of $50 million, some of which, the state alleges, he converted to his personal use.

That Noe is now on trial on theft and racketeering charges stemming from Coingate does not diminish the culpability of those GOP officials, who turned a blind eye to this egregious waste of taxpayer dollars that were supposed to be used to help injured workers.

Incredibly, Ms. Montgomery has admitted that she knew about Noe’s seven-year investment deal for at least a year before the story broke. But there were no public pronouncements. Even after the scam was revealed, she kept her official head down and essentially took no action for 43 days until the public furor forced her hand.

Tom Noe was Ms. Montgomery’s friend and one of her generous political patrons. While that relationship might explain why she took no real action against him, it is certainly no excuse.

Bolstered by a fat campaign fund to pay for endless TV spots, Ms. Montgomery has been making much of a public reprimand handed Senator Dann by the Ohio Supreme Court for filing the wrong pleading as a private attorney in a divorce case.This was a far less serious matter than Ms. Montgomery would have voters believe. She undoubtedly doesn’t want anyone to recall that, as attorney general in 1996, the state Supreme Court threw out her own appeal of an open-records case after she failed to file a brief on time. At the time, she blamed this nonfeasance on a broken office copy machine.

With a law degree from Case-Western Reserve University School of Law, Senator Dann is a better-trained and far more energetic and articulate lawyer than Ms. Montgomery, and we believe he would better serve Ohioans in cleaning up the current Statehouse mess.

State officials who, like Betty Montgomery, wear partisan blinders and fail to do their job don’t deserve another chance, especially when there’s a better alternative. In our view, the better candidate for attorney general is clearly Marc Dann.

The Toledo newspaper has it right. There are lots of reasons to vote this year, including the chance to change government for the better. Marc Dann would be one of those better changes, where an elected official cares about consumer rights again.


23 Years and Nothing's Changed: 1982 mpg = 2005 mpg

What is going on? Motor vehicles are built better, more luxuries, a/c is everywhere, computers are stuck in practically every corner of a new car or truck and the miles per gallon? It's the same now as it was 23 years ago. What is going on?

The EPA documented the "no change" numbers in a report called "Light Duty Automotive Technology and Fuel Economy Trends 1975 through 2006." The result? Practically everything about motor vehicles has been improved by technology except for one thing --- miles per gallon.

Mileage was dramatically improved from 1975 to 1980 (recall the Arab oil embargo?), slowed down in the 1980's, actually decreased in the 1990's, and has been pretty much the same ever since. In 1982 it was 21 mpg. Same thing in 2005. What's going on?

The high point on the scale was back in 1987, according to an article in the Washington Post.

Engine technology has improved dramatically, but it apparently had no effect on miles per gallon. The reason? Some say it's the increased weight of motor vehicles. After all, when mpg was going up between 1975 and 1980, average vehicle weight was going down. Others say the engine advances were aimed at juicing up speed so that the "0 to 60" accelleration time would dramatically drop (which it has).

Okay, so the thrill of that big engine roar is directly related to lousy gas mileage. Shock, shock. The simple fact is that if you want better gas mileage, the first step is don't buy a big vehicle with a huge engine. We buy cars that give poor mpg because that's what Detroit (and the imports) build and sell us. If they built a good looking car that got good looking mileage numbers, most people would probably buy it.

Still you have to wonder if there isn't some correlation between the CAFE mileage standards mandated by Congress and the oil companies political donations (nearly half a billion dollars in 6 years, with 73% going to Republican coffers while nearly 900 US fuel subsidiaries are located in foreign-based tax havens with Congress' blessings).

Robin Williams was right ... "politicians are like diapers ... they need to be changed regularly, and for the same reason."


Politicians are like Diapers

Politicians are like diapers. They both need changing regularly and for the same reason. ~ Author Unknown

Just got back from watching Robin Williams' new movie, Man of the Year. Great flick. While some "critics" have been critical, others have liked the movie. We're in that last category...by far.

Granted I'm a huge fan of Robin Williams anyway ever since I saw a skit years ago with him and Billy Crystal doing stand up at some improv. They bounced lines off each other with a remarkable, and sometimes biting, snappy wit. Both are incredible comedians that rank with the very best.

The film, however, is full of some great lines of humor and no small dose of truth in more places than one. See the trailer here.

The best line of the film comes at the end when Williams says the quote above, politicians are like diapers. The both need changing regularly and for the same reason.

As the November election nears, that's a line worth remembering when you step into the voting booth this year. Ohio needs a new direction on practically every level of government, and particularly in the Attorney General's office, where the doors have been open to big business interests all too long, while consumer's needs have been all but ignored.

And now, a conservative who had the job once before (and did little with it) until time ran out and she had to change government jobs, and when time ran out there she thought she'd run for governor until her own party members wouldn't vote for her as governor, and then she thought she might as well go back to the soft cushion seat she put in her chair at the AG's office. Consumers don't need someone who just wants "another government job."

Consumers need Marc Dann for Ohio Attorney General, a family man who cares about the law and protecting consumers. After all, this is the government office that enforces the Ohio Lemon Law...or doesn't. This is the government office that enforces Ohio's Consumer Protection laws...or doesn't.

It's about time we elected an Attorney General who cares about consumers again. It's about time we elected Marc Dann.


The Employee - Friends Discount that Costs You Money

We're seeing it more and more often. Consumers who end up with a lemon and then find out that there may not be much they can do about it because they were tricked by the dealer into giving up their court rights without realizing it...in exchange for a couple of bucks being saved.

The dealer wants to sell you that new car. If they don't sell, they don't make money. Pure and simple. The hang up? They just can't get you to buy at their normal price. So what to do...

"Well how about we throw in an employee discount?"

"But I'm not an employee," you say. No problem. The dealer says they can give you a discount based on one of their own employees. Sounds too good to pass up? Remember what your mother told you: there's no such thing as a free lunch.

To get you a lower price on that new car, and get you to buy it, what's really happening can be a royal ripoff.

We've heard of one salesman who was "harvesting data" from dealer employee records so he could write up deals based on other employees' discount numbers and sell more cars, make more money, and never tell the co workers he was using their discounts.

We've heard of another finance man at a Chrysler dealership who opened a desk drawer and said "here's a guy who retired, we'll use his discount number."

Why should you care? Suppose that new car turns out to be a lemon.

What they aren't telling you is that by taking the employee discount you may get stuck with the employee discount rules. Those rules contain a "railroad" clause that says that if you have any dispute about that new car, you can't go to court. You can't sue them. You can't make them pay your attorney costs either.

In short, you get railroaded. You lose your rights. Kaput. Stuck. Ripped off. Shafted.

You got a beef? The only thing you can do is go ask their secret arbitrator what they might do for you. Oh yeah, did I mention who pays for the secret arbitration? Well, it isn't you. Why does that matter? Well if the secret arbitrator gets paid by the manufacturer, who do you think they are going to favor? Well, it isn't you.

So there you go. That employee discount can save you a hundred bucks or more, sure, but it can end up costing you thousands and thousands of dollars. Chrysler wins. You lose. Oh, but they aren't done with you!

Now when you go to trade it in, what do you think the dealer's going to say? "Negative equity" Now that lemon car is going to cost you thousands of more dollars to get rid of since you gave up all your legal rights just to save a few bucks. They get you going and coming if you don't watch out.

The moral of the story? If you aren't entitled to an employee discount in the first place, don't fall for the scam when the dealer says they can set you up with one, because that's exactly what they are doing, setting you up.

If the dealer offers to give you a "friend" discount of an employee, don't fall for that either. We've seen some of these "friends and family" discounts that are only $150 or so. Believe us, that discount isn't worth it. For a puny $150 or so, you can get stuck big time.

But it isn't completely hopeless. You can still sue the dealer for stealing your Lemon Law rights! If you've been ripped off, contact us. We sue car dealers for sales fraud, too. We do it every day.

Recalls, Safety Warnings, & Research Links

The job of a lemon lawyer is to hold manufacturers responsible when they build a defective product. The links below provide information about motor vehicle recalls, safety warnings and research and tips to help keep you and your family safe. Find the facts out for yourself.

Recalls: what they are and how they work
Recalls on motor vehicles
Repair Bulletin warnings from vehicle manufacturers
Current Federal investigations of vehicle defects
Owner's complaints about vehicle defects
Ohio's Vehicle Repair Law
Safest cars ranked by insurance companies
Government vehicle rollover ratings
Lemon Laws in 50 states
Motorcycle Lemon Laws in 50 states
Rv and motorhome Lemon Laws in 50 states
Assistive Device Lemon Laws in 50 states
Car Talk's Guide to Auto Safety
Get the Ohio ownership history of any used motor vehicle from Ohio state records
Get the national ownership history of any used motor vehicle from Carfax
A car dealer's dictionary of car dealer terminology and slang
Manufacturer's phone and fax numbers
Car Dealer Ratings by consumers
Lemon vehicle Complaint Letter Generator program
How car dealer arbitration clauses can rip you off