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Silver’s on Top

Mercedes McLaren SLR

Here is some really hot news that you can celebrate over the weekend. Our gurus have learned that silver remains the world’s top choice in car colors—for the ninth year! If that doesn’t make you want to buy a German car right now, you have no racing blood in your veins.

In a variety of hues, silver paint lies on top of one of every four vehicles sold in the U.S. and covers 35 percent of new European cars and 34 percent of Asia-Pacific cars. We have this on good authoritiy from Jane Harrington, manager of color styling and automotive coatings for PPG Industries, as reported in the Detroit News and on MSNBC.

However, Jane didn’t really tell us why silver has remained so popular—other than saying it “looks great on any car, shows off all of the lines and helps people blend into the crowd.” What? Helps people blend into the crowd? Our take is that silver is popular because people want their cars to look like money. Anyhow, here are some great-looking silver cars, courtesy of flickr.

Ferrari F430 Spider

1962 Silver Corvette

BMW Alpina Z8

Buick Skylark

Which do you like best? Why do these cars look good in silver?

—jgoods

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Chrysler’s Two-Year Gap

2009 Chrysler PT Cruiser Special Edition: for Australia only

The most interesting news coming out of Detroit is still from Chrysler. So we’re going to give you another dose. By now, you have probably heard the drill: Any totally-new, Fiat-based product is two years away, and that leaves the company facing some very difficult times. What it has in the pipeline, except for the new Dodge Ram line, is unexciting, to say the least, and just isn’t selling, to say the most.

There’s a big question as to whether Chrysler can survive this drought and much discussion about what it can and should do. Apparently, the brand strategy, as we reported, is to go big-time luxo with the Chrysler marque (yes, I can hear the laughter from the gallery), sporty driver’s-car with Dodge (where the Fiat-based product will fit best), with Jeep remaining, well, Jeep. Minivans may fill a bit of the two-year gap but not much.

So, we learn today, the Sebring and the Avenger will be reborn in 2011. These dorky cars not only deserved to die, but their names should be forever banished from the Chrysler catalogue. Carport Confidential, like many other blogs, pillories the Sebring:

Ranked dead last in Consumer Reports compilation of 39 family sedans, this meager challenger in the critical mid-size segment has sold a whopping 34,700 units to date in 2009. Compare that with the 238,000 Camrys told by Toyota and you begin to see what sloppy engineering and deplorable design begets.
This is a godawful situation, and about as comfortable for Chrysler as Hugo Chavez at a Sarah Palin family picnic.

But the company appears to be stuck with it, and there was news last week that it would continue the facelift process with other cars too.

The Detroit Free Press reported last week that Marchionne wants to face-lift several other models by mid-2011. Those include the Dodge Grand Caravan minivan and Caliber small car, the Jeep Compass and Patriot crossovers and the Chrysler PT Cruiser.

Regarding the latter, if you live in Australia, you’ll be thrilled to know that you can now buy the new PT Cruiser Special Edition, all tricked out, for around $30K. Maybe that should be the strategy: Rebadge and recycle old product for foreign/subsidiary markets, and let the rest of us buy Camrys.

Can Chrysler survive the two-year drought? Give us your thoughts.

—jgoods

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Chrysler Game Plan Leaking Out

Product planning, brand managing, strategic positioning: all good, common buzzwords that are nonetheless significant indicators of how a firm moves its goods. Marketing words like these can say as much about the buyer as they do about the seller.

Chrysler has had a few months to get its marketing act together, and while still having a ways to go, its three brand heads put out some new ideas at Frankfurt yesterday.

They want to make the company’s three brands—Chrysler, Dodge, and Jeep—quite distinct in function and appeal. Chrysler is going upmarket, “a notch above Lincoln, a notch above Cadillac,” says CEO Peter Fong (we link to The Truth About Cars’ story, since Automotive News, the actual source, is subscriber-only). Bringing off this radical move will be a production and marketing effort of major proportions. November should bring us more details.

At the same time, the company wants to reconfigure Dodge from a “brute force” spirit to one of driving dynamics. Said CEO Michael Accavitti,

Dodge will go from a middle linebacker to Lance Armstrong…. We will remain a sporty brand, with a lot of emphasis on the performance area, but also on better fuel economy, benefiting from the great technologies Fiat is bringing to us.

Jeep will remain Jeep, the C-men say, focusing more on fine-tuning than reinventing, keeping its relatively small segment alive.

The minivans, Chrysler’s constant bread-and-butter cars for years, will finally become more differentiated and distinct from one another. Until Fiat takes over, the minivan will have to carry the firm’s sales. In the mid-’90s, minivans had about 8.5 percent of the market, and Chrysler had 40 percent of that. Now the general market is 3 to 4 percent, but the Big C still maintains its share—and that’s what it’s subsisting on, or hopes to subsist on, for the next year and a half.

So they need to push minivan sales hard and maybe, just maybe, the market may be turning in their favor. GM and Ford are getting their offerings ready, crossovers and SUVs are expensive people-movers, and the international market is receptive. Chrysler recently increased minivan production at its Windsor plant, including diesel and right-hand-drive versions.

The company shows some grasp of how it needs to innovate, even in little things. It announced today that, instead of those big bulky owner’s manuals in the glove compartment that nobody reads, it’s putting out DVDs with all that info (plus a quick-start 80-pager for safety, lights, and emergency info). Smart.

Bottom line: Don’t count Chrysler out yet. They know that only innovation and creative marketing will keep them alive.

Is the minivan concept still viable? Give us your thoughts.

—jgoods

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Toyota Prius: King of Green or Earth Killer?

Harmony with Earth... or destroying it?

Anyone who’s considering a Toyota Prius might want to remember this quote from Jack Lifton, an independent commodities consultant and strategic metals expert, who calls the Prius “the biggest user of rare earths of any object in the world.”

That’s a mighty big claim, and if it’s true, it means the Prius, billed as one of the most eco-friendly cars in the world, is actually eating away our planet’s stores of rare metals.

The reason for the Prius’ hunger for rare commodities are its batteries and motor magnets.

According to Leftlane,

each Prius uses about 2.2 lbs. of neodymium and each battery uses 22-33 lbs. of lanthanum, figures that will inevitably double as Toyota seeks to boost the Prius’ fuel efficiency.

Neodymium, terbium, dysprosium, and lanthanum are all considered rare earth metals, and all are being depleted, quickly, by popular hybrids like the Prius, Honda Insight, and Ford Escape Hybrid.

Yes, hybrid vehicles decrease our use of fossil fuels and reduce tailpipe emissions. However, how “green” they actually are is an issue that needs some serious debate.

I’m thinking fuel-efficient four-cylinder gas or diesel engines are actually much healthier for Earth.

Are hybrid cars like the Prius ”green,” even though they deplete Earth’s rare metals? Do you even care?

-tgriffith

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Coming Soon (We Hope) to a Dealer Near You

bugatti_teaser

Quick, name two of the most exciting things in the world.

Okay, I admit that new cars probably didn’t make your list. Still, when a new car is expected to arrive on the scene, people tend to get giddy while discussing what it might look like and how it might perform. While that’s especially true for all-new models hitting U.S. shores, a refresh of a long-loved model is sometimes equally appreciated.

Lucky for us, we’ve got a little of both to share.

First, take a look again at the top of this story. I can’t imagine you missed this on the first look, but that picture is a teaser for an upcoming Bugatti (Autoblog says it could be a sedan) with EIGHT tailpipes. If a million-dollar family hauler with an 8.0-liter, 1,000-horsepower W16 engine that can hit 60 miles per hour in about 3 seconds is in your budget, the Bordeaux could be for you. While there is very little official word on the new Bug, odds are if you’re going to pony up the money, you can get one in the States.

lexus_ct-concept Getting back to Earth, Lexus has released a drawing of a potential new hatchback. In the past I’d have assumed a car like the CT would be designated for the European market only, but with the changing attitude in the U.S. regarding small hatches, there’s a real possibility we’ll see something like this from Lexus in the coming years. More evidence that the new Lexus is U.S. bound comes from Autoweek, which says,

Lexus has patented the names CT 200h, CT 300h and CT 400h in North America.

Looks like it’ll be a hybrid, huh?

As Toyota works to increase Lexus’s product offering, it also needs to supercharge its Scion lineup. That’s where the tiny new 1.3-liter 4-cylinder iQ should come into play. The European version gets 66 mpg. Scion dealers say it’s coming in 2010, but Toyota hasn’t made an official announcement, saying priority is on a redesigned tC, which is also good news for Scion fans. We could see a needed power jump from 161 hp to 200 out of a new 2.7-liter engine.

Finally, Hyundai is prepared to showcase the all-new Tucson at the Frankfurt Auto Show next month. Leftlane says,

Sources are saying to expect only four-cylinder powerplants, including a turbocharged model after the initial launch. This is probably a smart move on Hyundai’s part seeing how sensitive Americans are to MPGs these days. We wouldn’t be surprised to see the next Tucson get close to 30 mpg highway, with an equally impressive 20+ in the city.

Are there any U.S.-bound cars you look forward to seeing, or any you think should appear on these shores?

-tgriffith

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Dreaming and Planning for Electro-Tech

It’s Monday, so let’s get serious. Despite tgriffith’s recent slam at old people (in his Buick post, to be answered in due course), we will put on our left-turn signals, leave them on as a sign of defiance, and look toward the future—which surely does not include Buick Enclaves, God forbid, the most egregious and ugly beast yet produced by GM. On a road trip last weekend, I passed one, towering above me and driven badly by some 30-something female, talking on a cell phone of course.

In the future, we are going to have far fewer Buicks and lots more electrics of all stripes on the road. With the Obama administration recently giving grants of $2 billion to foster and enable electric-car technology, perhaps it’s time to contemplate some of the issues involved in going electric. The open question is when and how the transformation will happen.

The President and four cabinet members went to the Midwest to announce these grants, and in fact it was a big-deal commitment to a technology, such as this country rarely makes. GM was the big winner, but other companies, mostly battery makers, won out, too.

General Motors Co. will receive about $241 million in grants, including $106 million for its planned battery pack assembly factory in Brownstown Township [Michigan]. Ford will get nearly $93 million, while Chrysler Group LLC will get $70 million for plug-in pickups and minivans. Four battery companies, most of them partnered with a Big Three automaker, received almost $862 million to build batteries in the U.S.

Michigan stands to gain “about 6,800 jobs immediately, and the new sector could employ as many as 40,000 by 2020, said Doug Parks, senior vice president with the Michigan Economic Development Corp.” But this is hardly a local story.

McKinsey, the eminent consulting firm, took a broad perspective in the June issue of its Quarterly, examining the outlook for electrics as it affects three industries: battery makers, automakers, and utilities. The report is fascinating reading, though some of you will challenge the assumptions.

No one can predict how may electric vehicles will be on the road at some future date, because there are simply too many variables.

But here’s a number to contemplate: electrified vehicles would enter the mainstream if about 10 percent of all cars on the roads were battery-electric or plug-in vehicles, running solely on electric power. That would mean sales of six million to eight million electrified vehicles a year by 2020, which would change whole sectors dramatically.

How we reach that tipping point is anybody’s guess: Some think that kind of penetration will take decades; others think governments can and should push this along. The interrelationship of the three industries and how it evolves are key. Some of many interesting twists and turns ahead will involve: the price of gasoline and the government’s influence on it; the ability and willingness of “incumbent automakers” to convert; whether batteries are outsourced, insourced, or produced after-market.

I think we’ll get to electrics—the 10-percent tipping point—sooner rather than later. What do you think?

—jgoods

Porsche Powers to Another Win

2010 Porsche Boxster S

Everybody sees something different in the latest J.D. Power survey. The Automotive Performance, Execution, and Layout (APEAL) study is one of the industry’s big ranking exercises and tries to measure “how gratifying a new vehicle is to drive.” APEAL ranks cars and trucks by model-levels and nameplate. Indeed, the results include some surprises this year.

Most car bloggers and writers gave the honors to Porsche for taking the top overall spot for the fifth year in a row. Others, like Autoblog, tooted Hyundai’s horn for beating BMW (the new Genesis demoted the 5 Series, if you can believe it).

Volkswagen AG earned four segment-level (functionality and size categories, like SUV, pickup, and so on) awards for the CC, GTI, Passat, and Tiguan. Honda, Mercedes-Benz, and Nissan each got two. The press release explains the study’s methodology:

The APEAL Study examines how gratifying a new vehicle is to own and drive, based on owner evaluations of more than 90 vehicle attributes. The 2009 APEAL Study is based on responses gathered between February and May 2009 from more than 80,900 purchasers and lessees of new 2009 model-year cars and trucks who were surveyed after the first 90 days of ownership. The APEAL Study complements the recently released J.D. Power and Associates Initial Quality Study (IQS), which focuses on problems experienced by owners during the first 90 days of ownership.

So it really is kind of a big deal. These are the top 10 overall rankings:

2009 APEAL Nameplate Ranking (based on a 1,000-point scale)
Porsche	869
Jaguar	859
Cadillac	852
Audi	846
BMW	844
Mercedes-Benz	841
Lexus	837
Infiniti	828
Land Rover	822
Lincoln	820

Here’s your chance to contradict J.D. Power, folks. Tell us in a comment which of these rankings are totally off the wall and why!

—jgoods

General Motors Exits Bankruptcy

GM_headquarters_flags Well, that didn’t take long!

In fact, it took just six weeks to dismantle “the old GM” and build a new company; the biggest corporate bankruptcy in the history of the world is over!

That also means today marks the launch of a brand-new company, which is being called The New GM. According to their press release:

GM gets back to the business of building great cars and trucks, serving customer needs
New company created from GM’s strongest assets
Four core brands backed by the nation’s largest and strongest dealer network
Streamlined organization on a global basis for faster decisions, sharper focus on the customer
Commitment to open communications

In that same press release, CEO Fritz Henderson said,

Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers. We are deeply appreciative for the support we have received during this historic transformation, and we will work hard to repay this trust by building a successful new General Motors.

We’ll see, won’t we? The company has a lot of work to do, but early signs are good, considering the recent news that Chevy’s Silverado and Camaro beat Ford’s F-150 and Mustang in June sales.

It’ll take a few model years of consistently quality products and innovative technology before I’d consider a GM product, but at least the company now appears to finally be on the right track.

Would you consider buying a vehicle from the new GM?

-tgriffith

Do You Really Want One of These?

A lot of people do, it seems, and Toyota recently increased its production of the 2010 Prius to 500,000 a year, up 25 percent. There is real demand out there.

But, as I’ve said before, it’s not easy for a car enthusiast to like the Prius, even though we can applaud the intent. If we’re going to do the green thing, we want to drive a Tesla.

The Prius is a car for the green do-gooders, for the tech-obsessed, for the socially conscious eco babies. Car and Driver said it was anything but exciting. “The excitement, we suppose, is in wearing your beliefs on your fender.” People who love cars will hate it. The first time I got into and drove one, a friend’s 2006, it seemed like I was in a movie. This is the feeling Jay Shoemaker expressed about the new car, adding:

I was still entombed in the resin chamber that passes for an automobile interior. If Ralph Nader had been an engineer, this is the car he would have designed, a vehicle for people who loathe automobiles.

And the barbs continue, as he knocks everything from ergonomics to handling and the over-reliance on gimmicks to drive up the price. Jalopnik liked the car better, but said it had decent road manners only with the optional 17-inch wheels.

We’re coming down to a media battle between the automotive press, mostly comprised of enthusiasts, against the practical, green, transport-oriented, global-warming crowd, who clearly outnumber the car-lovers. But the greenies should remember that their beloved Priuses and Insights are not really cars yet. They are transportation vehicles or, as Shoemaker called them, “personal vehicular transportation modules.” Which means, for most car lovers, that they’re still bureaucratic people-movers out of some futuristic movie.

Which side are you on: enthusiast or green? How can we bridge the gap?

—jgoods

A Chinese Company Will Buy Hummer (and Maybe Save U.S. Jobs?)

A Hummer modified in China at the 2008 Auto China show in Beijing

Some Americans may not be comfortable with the idea, but China is a force to be reckoned with. And now it might even save about 3,000 American jobs.

General Motors has a tentative agreement with Sichuan Tengzhong Heavy Industrial Machinery Co. of China, which plans to purchase Hummer. If the deal goes through, the new owner of Hummer would contract GM to continue building the Hummer H3 and H3T at their Shreveport, La., plant at least through 2010.

That move, along with saving dealership jobs, would save thousands of manufacturing jobs. It’s hard to find fault in a sale that benefits newly bankrupt GM and saves American jobs.

Even so, it’s hard to look past the irony of an iconic American military-vehicle-turned-civilian-SUV being owned by a Chinese company. We might as well sell the New York Yankees and our patent on apple pie to the Chinese government, too.

What I’m having trouble understanding is how Hummer’s new owner intends to make money. Hummer’s sales dropped nearly 70% in the first four months of this year, and I’m not sure Chinese ownership is a change that will lend itself to sales improvements in this country.

Maybe that’s the point, though. GM has had success with Buick in China, and maybe Sichuan Tengzhong plans to do the same with Hummer. If that’s the case, it’s probably only a matter of time before Hummers will be shipped with the words “Made in China” engraved into the sheet metal.

I guess I should just quit complaining. An Indian company owns Jaguar, and now a Chinese company will likely own Hummer. Maybe it’s time for a U.S. company to buy Kia and complete the circle in this bizzaro new world.

Will Chinese ownership of Hummer be good for the brand?

-tgriffith

The Best Car Commercial on TV Right Now

You’ve probably seen the new “Meet the Volkswagens” ad, in which an old VW Beetle with an awesome German accent talks some smack with his neighbor who just bought a new hybrid.

It seems the old Slug Bug bought a new Jetta TDI and is bragging about its fuel economy, performance, and overall coolness.

Check out the ad:

I laugh every time. NOBODY wants to be the guy who gets shown up by his neighbor, especially when it comes to a just-purchased new car. That’s why this ad is so great; we can all identify with the situation of poor Mr. Hybrid-Owner. He’s stuck with his car that isn’t fun to drive and sounds like a wind tunnel.

“What’s your hybrid sound like?”

“Haaaaaaaaaaaaaa.”

“That’s cool.”

No, it isn’t.

What’s your favorite car commercial right now?

-tgriffith

Finally, a truck that gets 100 mpg!

brightidea-ed021 Okay, that 100-mpg number is partly marketing, but still it’s something to get excited about.

Bright Automotive is a mostly unknown car company based in Indiana. Their CEO is the guy who developed the battery pack for GM’s infamous EV1, the first production electric car that some say was prematurely put down.

So Bright is a company with some credibility behind them, and this week they unveiled their IDEA (Yes, it’s called the Bright IDEA. Stop laughing.) on Capitol Hill in Washington, DC.

Here’s the scoop on the IDEA:

It’s powered by a hybrid electric system and drives for the first 30 miles on pure electricity. After that, an electric/gas engine takes over. For the first 50 miles of driving, the IDEA is said to use half a gallon of gas, the equivalent of 100 mpg.
Bright hopes the IDEA will be available in 2013 to commercial customers. It will not be offered as a consumer vehicle.
Bright says they will create about 5,000 jobs when they begin producing 50,000 vehicles per year by the end of 2012.

I think marketing the IDEA for commercial uses is absolutely brilliant. Imagine all the delivery trucks in America that are getting 9 miles per gallon. Replace them with a van like the IDEA and *boom*, global warming is solved.

Okay, that might be a bit too high an expectation for the IDEA, but it’s a step in the right direction and another example of how the world’s auto industry will evolve in the coming years.

Do you think Bright has a great IDEA, or will it turn out to be nothing more than hype?

-tgriffith

New Cars: Better Deals Than Used?

accord A used car is always a better buy than a new car. Right?

Not so fast.

Weird things are happening in the automotive world right now, and they’re all stemming from the fact that our economy stinks right now.

Fewer people are buying cars, and when they do, many are choosing to buy used. But since people aren’t buying many new cars, fewer used cars are getting traded in. The demand for used cars is increasing while the supply is decreasing, causing the prices for used cars to rise.

And when the makers of new cars end up with much more supply than people are demanding, prices drop.

The Associated Press reports that the average cost of a used, dealer-certified 2008 Honda Accord EX sedan was $21,544 earlier this month. A brand-new 2009 model was reported to cost $80 less.

Throw in the zero- or low-interest financing available on many new cars, compared with 6 or 7% on used cars, and you just might end up saving thousands of dollars by buying new.

Like I said, these are crazy times.

Will your next car purchase be a new or used vehicle? If you plan to buy used, will you want a certified used car?

-tgriffith

Scanning the Auto Blogosphere

Terrafugia's Transition in flight

The auto-blog world offers lots of coverage of a few big stories this week. As we noted in our last post, Congress will consider a “Cash for Clunkers” bill that would offer a voucher of $3,000-5,000 to anyone trading in an older car for a new one assembled in North America that costs less than $35,000 and gets at least 27 mpg on the highway. New-car deals get sweeter and sweeter, eh?

The government also earned a lot of auto-blog coverage today by approving a $5 billion plan to provide help to automotive parts suppliers, which have been hurt badly by the Big Three’s cuts in North American vehicle production. The Detroit News has lots of details.

Another topic that’s gotten lots of coverage today has to do with the latest J.D. Power vehicle dependability study results. Surprisingly enough, Buick and Jaguar both managed to outscore perennial winner Lexus this year, which took third. eGMCarTech has full results and the press release.

Two more stories generated auto-blog buzz this week. A number of folks published stories on the debut flight of Terrafugia’s Transition flying car (above). It’s still got a long way to go before you’ll find one at a local dealer, and the Transition doesn’t look particularly graceful airborne, but the (very short) video looks promising.

MR2 fans are getting into a lather over another story reported this week: Toyota is considering a performance hybrid based on a special version of the Prius’s powertrain that will carry on the name of Toyota’s much-loved roadster. Auto Express’s “artists’s impressions” look pretty hot.

We’ll conclude this week’s article with a couple of quick bits about the Big Three that suggest the times really are a’changing.

First, GM CEO Rick Wagoner said Tuesday that he thought increasing the federal gasoline tax to price gas at $4 per gallon is “worthy of consideration” (you’ll see that quote in almost every article on this topic). While gas taxes are regressive and therefore unfair, Europeans’ generally much higher gas taxes have driven them to select much more fuel efficient and environmentally friendly cars as a group. And that wouldn’t be such a bad thing here, would it?

Finally, as Chrysler happily points out on its own blog, the state of Michigan’s Department of Environmental Quality has awarded a Clean Corporate Citizen award to the Global Engine Manufacturing Alliance (GEMA) plant in Dundee, MI. The GEMA plant is a joint venture of Chrysler, Hyundai, and Mitsubishi, so they can’t take all the credit, but it’s nice to see Chrysler participating in an exceptionally clean, efficient, and low-impact manufacturing process.

Anything you’d like to see get more - or less - coverage here on the CarGurus Blog?
Let me know.

-Steve Halloran

What’s safer: a 1966 Cadillac or a 2009 Civic?

The Insurance Institute for Highway Safety recently announced their 2009 Top Safety Picks, with 72 vehicles earning the honor. (Interestingly, Chrysler is the only major automaker without a single Top Safety Pick.)

That’s twice the number of winners in 2008 and three times as many as in 2007. The IIHS chalks up the huge increases to automakers making strides in how their vehicles perform in front, side and rear crashes. New cars also have improved seat and head restraint design and offer electronic stability control as a means to avoid accidents.

All this new safety technology appears to be paying off, as estimates from the National Highway Traffic Safety Administration show the number of people killed in traffic accidents in the U.S. this year is expected to be the lowest on record (recordkeeping began in 1966).

The question is will those numbers continue to decrease as the size of new vehicles also decreases? It’s logical to assume that the bigger the car, the safer its occupants are. I was once at a Hummer dealership and the salesman told me that to date, no one had ever been killed inside a Hummer as a result of a car accident. While this is great news for a Hummer owner, it’s not so great for someone who gets into an accident with one!

Considering how many different sizes of cars are on the roads, it’s logical to assume that the heavier ones provide more protection than the smaller ones, regardless of what technology is used. Even though a 1966 Cadillac DeVille has no airbags or emergency stability control, I’ll bet a lot of people would choose to be encased in its solid steel body in an accident, even over a 2009 fully loaded Civic with the newest safety gear.

As cars become laden with safety features and traffic deaths are at an all-time low, it’s apparent that something must be working right. My bet is that the newest accident-avoidance features, such as ESC, must be paying off by resulting in avoidance of accidents in the first place.

We want to know: Have the latest safety features protected you in an accident or helped you avoid one? Let us know in the comments section!

-tgriffith

They’ve also used oil money to buy Russian weapons.

The countries of OPEC

You wouldn’t think that global politics would have a place in an auto blog. But today I’m going there and here’s why:

We drive cars. Cars need gas. Gas comes from oil. And oil comes from OPEC.

The political firestorm that is OPEC currently comprises of 12 countries (The U.S. is not one of them). Here’s a brief look into how two of them use oil money:

Venezuela: funds their socialist government and suppresses opposition. They’ve also used oil money to buy Russian weapons.

Iran: they have the second largest oil reserves in the world, so it’s no wonder economic sanctions have little effect. They make their money in oil, and use that money to help spread their influence through Hamas and Hezbollah in Lebanon and Israel.

Many OPEC countries actually build their budgets based on the price of oil. If prices begin to fall below a predetermined level, OPEC can step in and decide to decrease production, thus increasing prices and fuelling economies. Nothing puts the economic squeeze on an OPEC country more than a cheap barrel of oil.

Now that prices are hovering around $70 per barrel, OPEC countries are feeling that pinch. And just yesterday, OPEC announced they would cut production by at least 1 million barrels per day. As a result, prices should increase enough to ease the economic pressure on countries like Venezuela. At least for a while.

I don’t know about you, but I don’t like to be controlled and I feel like OPEC countries are the worldwide equivalent to 6^th grade bullies. The best way to defeat them is to just stop giving them money.

I want to see an end to violence in the Mid East. I want to see terrorist groups dissolved. I want people living in Venezuela to choose how and where to live. I DON’T want to see these countries obliterated, I just want to see their economies crumble, followed by OPEC.

Since OPEC countries are dependent on high oil prices, it’s not war in Iraq that is going to bring peace to the region.

It’s refusing to buy that region’s oil.

And that means using as little gas as possible until we can supply and sustain our own energy needs.

What are your thoughts on OPEC?

-tgriffith

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