Monday

Dirt Cheap Cars Coming? Not to US


WardsAuto.com's John McElroy recently posted an editorial about the coming rush of manufacturers to build dirt cheap cars for the third world countries and it was fascinating. McElroy is no slouch. He knows the industry and his words are worth a read.

Some folks don't recall (or didn't hear about it) when Indian car maker Tata rolled out its Nano car with the new car price of only $2,500. You can bet Detroit did. Tata is the company that bought Jaguar out of the Ford stable, so they are no one to be ignored.

McElroy wisely points out that when Detroit tries to cut the price on a new model they do it by removing the bells and whistles that so many consumers have come to expect. But Tata took a different approach. Since they were used to building motorbikes and scooters, to them building a car just meant adding features and equipment and a couple of wheels too.

The Nano didn't have airbags or antilock brakes, but for consumers in India it was a huge step up from the bicycles and mopeds they had been overloading and living with.

Detroit took notice. Now Detroit suppliers are aiming their target lower too and designing subassemblies that are targeted for cars that are less in the first place. In the process, their units got smaller and cheaper and lighter too. All of which is great if you are trying to get to a lower price car in the process.

While third world consumers will benefit, there may be a trickle down effect to US consumers in the future. Honda is working on a low cost car and Nissan and others also want their own $2,500 "or less" new car too. Chinese automaker Geely claims it is working on a plug in hybrid electric car that will price out at only $1,500.

As McElroy says, "The companies that can figure out ho to provide those customers with the vehicles they want, at a price they can afford, are going to be the winners."

Soungs like something Henry Ford may have said nearly a hundred years ago. Too bad Detroit had to lose huge chunks of market share to come full circle to Henry's reality.

Detroit car makers may never get to a $2,500 car for America, but just maybe they have realized that they can still build a good cheap car that can sell well if they just build it right in the first place, and price it cheaply too.

Burdge Law Office
Helping consumers protect themselves, since 1978.

Wednesday

Odd Name, Odd Looks, The Future Car?


Remember when George Jetson would hop in his flying car in The Jetson's? The television cartoon series prompted dreams of having a flying car for millions of children. Well, reality has arrived.

Although it isn't a space ship, it is a flying car. Well, okay, the company calls it a roadable aircraft and not a flying car but a rose is still a rose and what makes this airplane unique is that it is also a car that can drive down the highway too.
A bunch of MIT engineer types have quietly been working on the flying car concept for years and have not only built and tested their design, but now the US federal aviation agency has approved its design and designated it to be a "Light Sport Aircraft." That's important because it means the operator only needs an easy to get (20 hours training) pilot license to be able to fly, or drive, on into the sky by himself, or herself.

Terrafugia is the name of the company and the Transition is the car-plane's model. It gets 30 mpg on the highway (not flying) and sips 5 gallons of fuel (the same that you get at your local gas station right now) to get 115 miles of airflight behind it. It can carry two passengers and it isn't for everyone but if you have ever thought you'd like to avoid highway traffic jams, this may be the way to do it.

And if you can afford the nearly $200,000 price tag, you can park one in your garage very soon. Then you can drive it to a small airfield near you, press a button, the wings automatically fold out and lock and then off you go into the wild blue yonder.

From a design point of view, it proves that if you put enough engineers in a room, you can come up with anything and that it will work. The Terrafugia Transition will fly. It works. And it does, indeed, have a market but that market is limited.

For the price tag though, you can buy a used Cessna and a new Corvette and still have $100,000 left over. Ah, that's the rub. If the price comes down, though, we could all end up flying the Terrafugia. Just like George Jetson. Who knows? It looks like it would be fun.

Burdge Law Office
Helping consumers protect themselves, everyday.

Tuesday

Forest Rive and Heartland RV go at each other, again.

You hear a lot about frivolous lawsuits filed by people trying to make a quick buck and tying up the courts and making attorney fees and legal costs outrageously expensive for businesses. Well, there’s more to that story than meets the eye.

Most lawsuits are filed by one business against another, and not by ordinary people at all. The vast majority of attorney fees paid to attorneys are actually collected by the lawyers who are filing those lawsuits where they represent one business suing another company. Here’s a good example.

Forest River manufactures recreational motor homes out of Indiana. One of its many competitors is Heartland Recreational Vehicles, a company that also builds Rv’s. Heartland claims to be “the fastest growing RV company in the world” which probably rubs Forest River the wrong way. On top of that, the two companies are only 11 minutes and just over 6 miles apart. Turns out that those few miles are making lots of money for their lawyers.
Awhile back Heartland ran a comparative ad that showed photos of Rv’s built by “The Competition” which included the first few being pictures of the Forest River “Puma” line of Rv’s, followed by coaches built by other Rv builders. Well, that didn’t sit well with the powers that be down the road at Forest River so the company filed a lawsuit claiming the ad was misleading and violated a federal law called the Lanham Act, which prohibits false advertising.

Forest River and Heartland have been at it before in the courts. If you want to know the particulars, you can find one summary on the internet here: http://dockets.justia.com/docket/indiana/inndce/3:2008cv00490/56146/. So this isn’t their first time to the courthouse against each other.

In fact, Eric Goldman's blog article (here: http://blog.ericgoldman.org/archives/2009/02/ambush_marketin.htm) describes some of the guerrilla fighting antics these two have been playing with for apparently years, and it makes a fascinating read to see what the lengths that one Rv company will go to in order to infiltrate and undermine the business efforts of another.

According to the more recent June 29, 2010 decision of Judge Van Bokkelen in the case in Northern District federal court in Indiana (found on Westlaw.com at 2010 WL 2674540), Forest River apparently claims that the Heartland ad “has the natural effect of misleading readers into thinking that features of other brands of trailers shown in the pictures are found in its Puma trailers, which is not true.”

The argument has been going on (this time) since last year and just keeps on going. In the end, this fight will add to the cost of the consumer products that both of them sell and it has nothing to do with spilled coffee at McDonald’s or anything else one could call “frivolous litigation.”

The plain and simple truth is that a lot of legal costs that go into consumer products is not the result of consumers suing manufacturers at all, but of one manufacturer suing another manufacturer. They just don’t paint the picture that way.

Think this is just one example? Well, Forest River sued Bird Bus Sales over that same federal law, the Lanham Act (Case No. 1:2010cv01578, filed Apr. 8, 2010), Heartland Rv (Case No. 3:2010cv00011, filed Jan. 7, 2010, copyright infringement claim), and Bechtel National (Case No. 2:2009cv06504, filed Sept. 28, 2009, product liability claim), to name just a couple.

So the next time you hear something about so-called frivolous lawsuits, just remember this example and realize that it’s only one of thousands that exist all across the country and in a courthouse near you. In fact, in a recent study, the number of federal court lawsuits fell by 79% and the number of cases that actually went to trial dropped by a whopping 78% too. At the same time, insurance company profits having been going nowhere but up, contrary to their claim about lawsuits driving up insurance rates (in one 3 year period, profits were up 62.5%, 2004-2007).

Consumers file lawsuits to find justice when they can’t find it any other way.

With big business though, could it be that it’s really just all about one company trying to make more money than another one does? True or not, that can easily be the impression the average person might get. Don't blame it on the little guy, though.

Monday

Your Cell Phone Says Something About Your Car


There's an interesting article over at TechRepublic, written by Jason Hiner, on what your type of cell phone says about you and the kind of car you probably drive. And, judging from people we know, there's more than a little truth to Hiner's thoughts.

The premise of the article is that the kind of smartphone you have says just as much about you as does the car you drive. For example, BlackBerry phones are used chiefly by corporate professionals. So it makes sense to guess that those are the types likely to drive a Cadillac CTS (the BlackBerry Bold phone model) or a Toyota Corolla (for the Curve phone) or an Audi (for the Storm model phone).

And the Nokia E71, with its great battery life, is a predictable match for a Toyota Prius owner.

The Apple iPhone 4? That probably matches up with Jaguar alright, but there aren't millions of Jaguars on the roads to match the million plus iPhone 4's that have hit the street. But the iPhone 3GS and BMW owners? Well, from personal experience we can say he hit that one on the button.

Check the list out and see if your smartphone matches up to the car you drive --- or the car that maybe you should drive --- here: "Comparing smartphones to cars". Or you can check out the photo gallery which matches up the pictures of each phone next to Hiner's idea of the car that fits its owner, here: "Photos: Comparing smartphones to cars".