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‘Picking on’ Volkswagen: Why Follow Dieselgate?

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[photo: macwagen via Flickr]

[photo: macwagen via Flickr]

One of our commenters described my attention to Dieselgate as ‘picking on’ Volkswagen. It’s not as if there haven’t been scandalous problems with other automotive industry manufacturers, like General Motors’ ignition switches or Takata’s airbag failures, right?

But Volkswagen earns greater attention here at this site because:

1) A critical mass of emptywheel readers are not familiar with the automotive industry, let alone manufacturing; they do not regularly follow automotive news. Quite a number are familiar with enterprise information security, but not car manufacturing or with passenger vehicle security. Many of the readers here are also in policy making, law enforcement, judiciary — persons who may influence outcomes at the very beginning or very end of the product manufacturing life cycle.

2) This is the first identified* multi-year incidence in which an automotive industry manufacturer using computer programming of a street-ready vehicle to defraud consumers and willfully violate multiple U.S. laws. This willfulness wholly separates the nature of this risk from other passenger vehicle vulnerabilities, ex: Fiat Chrysler’s hackable Uconnect dashboard computers or Nissan’s unprotected APIs for keyless remotes. (These latter events arose from inadequate info security awareness though responsiveness of vehicle manufacturers after notification may be in question.)

3) Volkswagen Group is the single largest passenger vehicle manufacturer in Europe. This isn’t a little deal considering half of all passenger vehicles in Europe are diesel-powered. Health and environmental damage in the U.S. from 600,000 passenger diesels has been bad enough; it’s taking lives in the tens of thousands across Europe. 75,000 premature deaths in 2012 alone were attributed to urban NO2 exposures, the source of which is diesel engines. It was testing in the U.S. against U.S. emissions standards which brought VW’s ‘cheating’ to light making it impossible for the EU to ignore any longer. The environmental damage from all Volkswagen passenger diesels combined isn’t localized; these additional non-compliant emissions exacerbate global climate change.

These are the reasons why Dieselgate deserved heightened scrutiny here to date — but the reasons why this scandal merits continued awareness have everything to do with an as-yet unrealized future.

We are on the cusp of a dramatic paradigm shift in transportation, driven in no small part by the need for reduced emissions. Development and implementation of battery-powered powertrains are tightly entwined with artificial intelligence development for self-driving cars. Pittsburgh PA is already a testing ground for a fleet of self-driving Uber vehicles; Michigan’s state senate seeks changes to the state’s vehicle code to permit self-driving cars to operate without a human driver to intervene.

All of this represents a paradigm shift in threats to the public on U.S. highways. Self-driving car makers and their AI partners claim self-driving vehicles will be safer than human-driven cars. We won’t know what the truth is for some time, whether AI will make better decisions than humans.

But new risks arise:

  • An entire line of vehicles can pose a threat if they are programmed to evade laws, ex: VW’s electronic control unit using proprietary code which could be manipulated before installation. (Intentional ‘defect’.)
  • An entire line of vehicles can be compromised if they have inherent vulnerabilities built into them, ex: Fiat Chrysler’s Uconnect dashboard computers. (Unintentional ‘defect’.)

Let’s ‘pick on’ another manufacturer for a moment: imagine every single Fiat Chrysler/Dodge/Jeep vehicle on the road in 5-10 years programmed to evade state and federal laws on emissions and diagnostic tests for road-worthiness. Imagine that same programming exploit used by criminals for other means. We’re no longer looking at a mere hundred thousand vehicles a year but millions, and the number of people at risk even greater.

The fear of robots is all hype, until one realizes some robots are on the road now, and in the very near future all vehicles will be robots. Robots are only as perfect as their makers.

An additional challenge posed by Volkswagen is its corporate culture and the deliberate use of a language barrier to frustrate fact-finding and obscure responsibility. Imagine now foreign transportation manufacturers not only using cultural barriers to hide their deliberate violation of laws, but masking the problems in their programming using the same techniques. Because of GM’s labyrinthine corporate bureaucracy, identifying the problems which contributed to the ignition switch scandal was difficult. Imagine how much more cumbersome it would be to tease out the roots if the entire corporate culture deliberately hid the source using culture, even into the coding language itself? Don’t take my word for how culture is used to this end — listen to a former VW employee who explains how VW’s management prevaricates on its ‘involvement’ in Dieselgate (video at 14:15-19:46).

Should we really wait for another five to 10 years to ‘pick on’ manufacturers of artificially intelligent vehicles — cars with the ability lie to us as much as their makers will? Or should we look very closely now at the nexus of transportation and programming where problems already occur, and create effective policy and enforcement for the road ahead?
_________
* A recent additional study suggests that Volkswagen Group is not the only passenger diesel manufacturer using emissions controls defeats.

Tuesday: En Garde

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Looks like it’s going to be a thing this week, covering women in sports. This is a marvelous example of covering a female competitor, this short film profiling U.S. Women’s Individual Foil fencer Nzingha Prescod — it’s about her and her approach to her sport, period. Does she sound like somebody who doesn’t care about the results of competition, like she’d rather have narrative surrounding it?

Her next match is tomorrow at 8:10 a.m.; I wish I could catch it live online.

[Journalism 101 fail again -- who are these competitors and what country do they play for? Which sport is this?]

[Journalism 101 fail again — who are these competitors and what country do they play for? Which sport is this?]

Another example of crappy coverage comes from BBC — can’t imagine why the UK became so white nationalist, can you? Let’s not note the countries or the individual competitors, let’s point out their attire and hint at religious and political positions at the same time. What garbage.

If you’re not already familiar with ‘male gaze‘, it’s time for a primer on this concept first theorized 41 years ago by Laura Mulvey. I don’t know if I can even call it purely feminist theory any longer though it arose because of feminism’s emergence. The way content is constructed can be political, and the way we view it can also be political; if content can be constructed for the male gaze, it can also be constructed to perform for political ideology. What we see in the BBC’s photo is both a political and sexist statement — the bikini-clad woman preferred over the fully-clothed woman whose attire has been mislabeled (it’s not a burka), the lack of identity in either case. These women are figures to be looked at for visual enjoyment and not in a manner which satisfies women but a male gaze with a particular ideological slant.

The problem with NBC’s constructed Olympic coverage is that the corporation believes it has created a ‘female gaze’ product — but women don’t feel immersed in the sports they are watching, continually disrupted by the inauthenticity of the content they are viewing. It feels forced, like we are supposed to care about the content presented apart from the actual sports on the screen based on a third (and likely straight male) party’s expectations of the female audience, but the mediation and curation process interfere with our autonomy in viewing. We feel a jarring disconnect from a state of attentive viewing into a state of critical viewing — we’re left unsatisfied.

I don’t think men are feeling any better about the content they are seeing because it fails to serve their gaze in a manner which they have always expected from the male-led sports and entertainment industries.

It’s so damned easy to fix, too.

The one entity finding a silver lining in NBC’s coverage of the Olympics? Netflix, which blames flat subscriber growth on the games’ broadcast. Hard to argue with this based on anecdotal evidence; everybody who ordinarily binges on Netflix programming and shares the experience in social media during cooler months is now complaining about NBC’s programming.

Wheels

  • Not one but THREE illegal emissions control software programs in VW’s 3.0L vehicles (Reuters) — U.S. isn’t saying how they found them but the existence of multiple programs hints at the reason for the lack of a “fix” for 3.0L passenger diesels under the terms of the proposed settlement. Volkswagen has admitted to emissions controls defeat in its 2.0L and 3.0L passenger diesel vehicles it marketed as “clean diesel” here in the U.S., but it has not been forthcoming about the emissions cheat methodology. If I had to guess, I’d say every one of the 3.0L vehicles will be bought back — because even after all this time, VW having known the cheats were discovered in 2014, the company still does not have a true fix for the 3.0L engine.
  • GM now testing self-driving Bolt in AZ (The Detroit News) — This is the second city in which GM has tested the Bolt; first tests were in San Francisco, which seems to me more challenging than Scottsdale.
  • Court case against GM starts this week (Bloomberg) — Judge will have their hands full trying to keep the case focused on whether ignition switch at fault or not given the driver’s youth and alleged reckless driving.

Wings

  • Delta’s massive outage yesterday still causing scheduling problems (Bloomberg) — System failure still attributed to power outage though interestingly Georgia Power said it was a Delta problem. No mention anywhere of other possible causes for the outage — so far.
  • Southwest’s July outage revealed enterprise problems (Bloomberg) — The crash of a single router caused massive problems which Southwest is still digging out of weeks later. Why is this airline lacking adequate failover? Why is this airline so focused on stock price now to detriment of instructure, in spite of fuel costs having fallen so much since June 2014?
  • Teen security research awarded one million flyer miles by United Airlines (ZDNet) — Olivier Beg reported 20 undisclosed bugs to the airline. The largest single reward he received was 250K miles, meaning the worst single bug he found was medium in severity. Certainly cheaper to offer Beg the equivalent of 20 roundtrips to the U.S. than pay for the costs related to a major bug-related outage.

Words

One for the road
Looks like the FBI hasn’t found an app for that yet — remote surveillance on smartphones, that is. Isn’t that interesting?

Off to cook dinner before the nightly Olympic debacle begins. Wonder what fresh hell the taped delayed coverage will bring?

Wednesday Morning: Meet Me on the Floor

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I admit it, I’ve betrayed my kind. I’ve been remiss in my responsibilities, haven’t been equitable.

To fix that, you need a dose of estrogen, stat. This morning’s medication is Veruca Salt’s Volcano Girls.

Feel better soon, eh?

Wheels
Mitsubishi’s Tetsuro Aikawa to leave, asks Nissan to name replacement (Bloomberg) — Announcement comes six days after Nissan announced it would buy a controlling interest in Mitsubishi. Nissan’s CEO Carlos Ghosn indicated he does not intend to subsume and phase out the Mitsubishi brand; this may have encouraged Aikawa he was leaving the company in good hands. I wouldn’t bet on some overlap between Nissan/Mitsubishi being eliminated.

Suzuki apologized for using the wrong fuel economy tests (Reuters) — Suzuki says it didn’t need to change its declared mileage data based on correct testing. I sure hope independent testing confirms this, though I suspect the same study which revealed Volkswagen’s cheat would have indicated additional validation needed.

Volkswagen says it will focus on profitability, pronto (Bloomberg) — Investors are restless and complaining about VW’s recalcitrance toward cost cutting in light of 16 billion euros it set aside for fixes and claims due to Dieselgate. Executives’ pay is on the butcher’s block. More than a little overdue as VW execs knew about the emissions controls defeat’s detection two years ago.

Forensic scientist reports to NHTSA Chevrolet’s dangerous cruise control problem (Zdziarski’s blog) — PAY ATTENTION TO THIS IF YOU’RE A LATE MODEL CHEVROLET OWNER. Read the linked post; Chevrolet’s response is deplorable, asking drivers to modify behavior rather than supply/fix product to work as documented and sold.

The (Fossil Fuel) Business
Goldman Sachs downgrades stocks to neutral while going bullish on oil (Bloomberg) — I like the subhead on this article: “Too many things to worry about.” ~LOL~ Excess valuation, lower growth, “a wall of stock market worries” encouraged the bear move. Things not explicitly mentioned: the U.S. and Australian elections and Brexit referendum outcome.

But…bullishness on oil out of whack (MarketWatch) — Another LOL-ish subhead today: “The fine print shows Goldman analysts believe oil will struggle to easily top $50.” So GS is telling its clients to reduce excess oil holdings while conditioning overall market to firm up what’s in their clients’ portfolios? ~smh~ Just as above, not mentioned in this take are any elections/referendums.

Note, too, that neither of these reports mentions Iran.

Anadarko Petroleum downgraded to neutral by Credit Suisse (Trade Calls) — You want another confusing take on fossil fuels? Read this article. Supports MarketWatch’s calling out GS on oil, though Anadarko also includes natural gas.

Total SA’s CEO Pouyanne pooh-poohs France’s ban on shale gas (Bloomberg) — Man, this dude is as arrogant as his predecessor. France could simply outlaw any imports without a certificate of origin, and force the industry to figure it out. Yet another article that doesn’t mention Iran, which sits on one of the largest natural gas reserves in the world. Pouyanne’s predecessor was cozy with Iran, too. So why all the attitude about North American shale gas imports?

Artificial Intelligence
Hedge fund used AI to pick through Fed Reserve’s minutes (Business Insider) — Using AI gleaned from a competition it hosted, Two Sigma fund analyzed the Fed Reserve. The app used Natural Language Processing and found some interesting trends. Wonder if the results would be different using Google’s SyntaxText open sourced this past week?

NSFWhut?
Cynically opportunistic marketing push promotes so-called ‘anti-Zika’ condoms (IBTImes-AU) — Pharmaco Starpharma Holdings and condom-maker Ansell will give Australia’s Olympians “Dual Protect” condoms lubricated with VivaGel for “almost 100-percent anti-viral protection” against Zika. Never let a perfectly good health crisis go to waste, right?

CDC says any condom will work against Zika (MarketWatch) — Yeah. That. I said this already: condoms are recommended for other viral STIs like herpes and HIV, will work fine for Zika, no special anti-Zika condom required. But you have to use the consistently and for at least six months after exposure to Zika since the virus can remain in men’s reproductive system for at least that long after infection.

ONE company will release condoms in 56 different sizes (Glamour) — Holy schnikes. This is a broader range of sizes than men’s off-the-rack suits. No excuses about not wearing condoms, there will be one bound to fit gents. Would be nice if ONE could hit the market with these in Brazil before the Olympics. (And don’t turn your nose up at Glamour. It’s one of the better articles I read today, includes some good links.)

There’s enough material to get you over the hump. Catch you in the morning tomorrow!

Tuesday Morning: Flip Off

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Flip off a few caps; Death came for a few more well-loved artists. Rest well, Glenn Frey, Dale Griffin, Dallas Taylor. Gonna’ be one heck of a band on the other side. [Edit: Mic Gillette, too? Stop already, Grim Reaper, check your targeting.]

Hope the cull is done because obituaries are not my thing. Hard to type and sniffle copiously at the same time.

GM Opel dealers may be altering emissions control software on Zafira diesel cars
Great, just great. Like GM didn’t have enough on its plate with the ignition switch debacle. A Belgian news outlet reports GM Opel dealers have been changing the software on the 2014 Zafira 1.6l diesel engine passenger vehicles in what looks like a soft recall. This comes on the heels of an EU-mandated recall of Zafira B models due to fires caused by bad electronics repairs. Sorry, I don’t speak Dutch, can’t make out everything in this video report. What little I can see and read doesn’t look good. Wouldn’t be surprised if the EU puts the hurt on GM Opel diesel sales until all are fixed to meet EU emissions regulations. Should also note that a different electronics manufacturer may be involved; images online of ECUs for late model Zafiras appear to be made by Siemens — unlike Volkswagen’s passenger diesel ECUs, which are made by Bosch.

Texas manufacturer swindled out of cash by fraudulent email request, sues cyber insurer
AFGlobal, based in Houston, lost $480,000 in May 2014 after staff wired funds based on orders in emails faked by crooks overseas. The manufacturing company had a cyber insurance policy with a subsidiary of the Chubb Group, and filed a claim against it. The claim was denied and AFGlobal filed suit. This isn’t the first such loss nor the first such lawsuit. Companies need to create and publish policies documenting procedures for authorizing any online payments, including two-step authentication of identities, and review overall spending authorization processes with an eye on audit trails.

Ukrainian officials say Kiev’s main airport hacked
Hackers who attacked Ukrainian power companies in late December are believed to be responsible for the malware launched on Kiev’s airport servers. There are very few details — okay, none, zero details — about the attack and its affect on airport operations. A military spokesman only said “the malware had been detected early in the airport’s system and no damage had been done,” and that the malware’s point of origin was in Russia. Among the details missing are the date the attack was discovered and how it was detected as well as the means of removal.

Hold this thought: FBI still looking for info on cable cuts, with eye to Super Bowl link
Remember the post last summer about the 11 communications cable cuts in the greater San Francisco Bay Area near Silicon Valley? This is a hot issue again, given the impending Super Bowl 50 to be held at Levi’s Stadium in Santa Clara. But reports now mention 15 or 16 cuts, not 11 — have there been more since last summer, or were there more not included in the FBI’s request for information? I’ll do some digging and post about this in the near term.

All right, carry on, and don’t drink all the añejo at once.

Wednesday Morning: Wonderful, Just Wonderful

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I debated about posting Jonny Lang’s Lie to Me. Nah, we’re lied to every day, might as well ask for the truth for once, even if it’s ugly. The truth is that nothing’s okay though we wish like hell it were otherwise.

That said, let’s forge on into the fraught and frothing fjords…

‘Nope.’ That’s what California Air Resources Board said
Huh-uh, no way, nada — CARB told Volkswagen in response to VW’s proposed recall plans for emissions standard-cheating 2.0L vehicles sold into California. Because:

  • The proposed plans contain gaps and lack sufficient detail.
  • The descriptions of proposed repairs lack enough information for a technical evaluation; and
  • The proposals do not adequately address overall impacts on vehicle performance, emissions and safety

Wonder if CARB’s response will be different with regard to VW’s 3.0L vehicles? Shall we take bets?

Fugly, in multiples — cybersec edition
Ebay’s got bugs, and not just at auction.

Need more than tape to fix this problem with cheap web cameras.

Popular antivirus may pose a hacking threat, patch has been issued. Same antivirus manufacturer has a nifty relationship with INTERPOL, too, to share information about cyberthreats. Wonder if they phoned INTERPOL and said, “Cyberthreat. It me!”

(BTW, I love it when spell check helpfully says, “‘Cybersec’ is wrong, don’t you mean ‘cybersex’?”…um, no.)

General Motors: We won’t sue white hats doing our work for us!
No lawsuits, but don’t expect any rewards for finding vulnerabilities (unlike competitor Tesla’s bug report program).

Big of you, GM. Way to protect your intellectual property and brand at the same time.

The biggest threat to nation’s power grid is S_______
Beady-eyed and focused, slips beneath our radar, gnaws into our electricity transport with annoying frequency, causing hundreds of hours of power outages. Stuxnet? No. Bloody squirrels.

In short, it’s all wonderful this Wednesday. Just wonderful. Pass the Glenmorangie, please.

GM’s New CEO: This Model Has Titanium Features

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Mary Barra, CEO-General MotorsThe woman in the photo at the right has big titanium ovaries — not malleable brass or rusting iron. Do I know Mary Barra personally to attest to this fact? No. But I have a pretty damned good idea where GM’s new CEO has been, and it takes a pretty tough set of specifications to survive the road she’s traveled.

Like her I grew up in the I-75 corridor in Michigan, where much of the automotive industry’s OEM facilities and Tiers 1 through 3 suppliers could be found. Like her father, my father worked in the automotive business; if her household was like mine, there were copies of Car and Driver, Road & Track, machinist, tool-and-die, and metalforming magazines cluttering coffee tables or in dad’s man-cave. The smell of machine oil and the grit of metal chips are familiar, as are an ever-present collection of safety glasses, hearing protection, and greasy jumpsuits. Picture a garage like that in Clint Eastwood’s movie Gran Torino; I’ll lay good money her dad probably spent a lot of his free time between shifts in a home shop like that, and where she might have been found as well if he needed a hand or she needed a tool to fix something.

It was in her blood, I’m sure; I’ll bet she could taste it. I’m pretty certain this is why she went into engineering, and likely why she went to that particular private engineering school.

After working for a couple years as a high school engineering co-op student I had been accepted at the same school, but I went a different road, preferring business and then-nascent computing technology over engineering. My daughter, though, is at that school now. She could taste it, too; we have pictures of her at age nine, wearing safety glasses, proudly holding her first aluminum machined part. She’s the first person her dad asks for help when working on the cars at home.

I wish now I’d taken pictures of her the time she was so damned mad at her brother and his friend for accidentally breaking the sibling-shared PlayStation 2 console. She ripped it down, diagnosed it using internet research, fixed and reassembled it on her own in an afternoon.

Driven to identify and solve the problem — that’s what it takes to choose engineering as a career, particularly if you are a woman.

Sure, men too must be driven to pursue the same field, but they don’t face the hurdles that women faced then or even now, 30 years after General Motors’ new CEO first started college at the former General Motors Institute. Nobody ever questions a boy’s right to pursue engineering, or a man’s right to practice that discipline. Nobody ever questions the gender of a man with an engineering degree when he makes it to the pinnacle of the corporate ladder. Read more →

Senate Auto Hearing: “Russian Roulette with the Economy”

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The auto execs are before Senate Banking today–go here for the hearing.

Dodd is up, arguing that not helping the Big Two and a Half is like playing Russian Roulette with the American economy. He’s also beating up on Paulson for his irresponsibility with our TARP funds.

In my view of we’re going to insist on reforms from the auto industry, we ought to also require reforms from the finance industry.

Also note, they’ve got representatives from both the suppliers (the head of Johnson Controls) and the dealers (the President of CT’s auto dealers). The House hearing last time had such representatives, and it really made the hearings more valuable for the executives.

Shelby up. Took him 2.6 seconds to talk about labor.

Gene Dadaro, from the GAO, up. He’s talking about what past bailouts have involved. I’m curious whether he was consulted on TARP? He’s also demanding a board with real oversight. Again. Was he consulted on TARP?

Dick Shelby seems to believe he’s an expert on the auto industry. Still pressing for bankruptcy.

Dadaro states clearly that he believes Treasury has the ability to intervene. Shelby’s pushing to get Treasury to do this.

Bob Bennett has an interesting idea: you give TARP money to the auto companies’ creditors, in exchange for equity in the auto companies. That would change the cash shortage of the auto companies, while watering down stock.

Jack Reed, clarifies that we should expect concessions from suppliers and dealers as well as the UAW. Finally! Someone who notices that the Big 2.5 have contracts with more than just the UAW!

Schumer: UAW made concessions yesterday, but where are the dealers? Where are the bondholders? 

Menendez suggests requiring a dollar for dollar concession from stake-holders in any bailout. Also raising the possibility that a bailout includes prohibitions on a foreign maker buyout of Chrysler.

Evan Bayh, as the first auto state Senator up: Isn’t it true that there’s too much uncertainty to allow these companies to go bankrupt right now?

Sherrod Brown, on differences between 1979 and now: UAW already made concessions, the Big 2.5 have already restructured significantly. 

James Fleming: The ripple on effect is a tsunami on the dealers who employ people in your home states. If you do not pass this bill, the effect on your consitutents will be enormous. Consider the human side on what’s going on–go into those dealerships. It’s tough work, they’re writing the paychecks out, they do not have massive staffs. Read more →

GM Financed 50% of Car Purchases Last Year; Can Only Finance 6% Now

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Jeebus. This gives you a sense of why GM’s in such dire straits:

GM‘s financing arm, GMAC, cannot effectively access the secondary markets today. With each passing day, it is less able to finance the sale of GM vehicles, either for dealers or for the public. One year ago, GMAC was able to provide either installment or lease financing for nearly half of GM retail sales. That number has fallen to 6% today. In addition, GMAC is no longer able to buy contracts for customers with a credit score under 700, which excludes roughly half the buying population. All of this has been especially toxic to GM sales in the past two months, with sales running about 40% behind year-ago levels. [my emphasis]

Just by way of comparison, Chrysler says that they give credit to 50% of Chrysler customers (though it doesn’t say whether it has been able to maintain those numbers), and Ford says it gives credit to 4 million consumers last year, though doesn’t say what percentage of sales its credit arm supports.

Imagine, though, that 100 customers walk in your door–and whereas last year, you would have been able to offer 50 of them credit, but can only offer 6 of them credit this year. That’s gonna cut into your business–dramatically.

Incidentally, Ford talks in much more abstract terms about how the credit crunch is affecting its business.

The present credit environment also has severely limited the ability of the automotive finance companies like Ford Motor Credit Company to access the public debt and securitization markets, and is significantly impairing our ability to support dealer and consumer financing needs. Banks and investors are exhibiting an aversion to risk and a willingness to invest in only the highest-quality financing instruments, and preferably in government instruments or government guaranteed debt. This risk aversion has expanded to a level where it is challenging to find financial counterparties to transact even simple interest rate and currency swaps, further contributing to a significant slowing of U.S. economic activity. These issues have further constrained the cash available from Ford’s normally profitable automotive finance company to support our automotive business.

GM’s Beg: The Waiting Is Making It Worse

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I just got done listening to Diane Rehm’s show on the auto begs (it was terrible, frankly); there was a great deal of skepticism whether the auto companies would get any government help this month.

Aside from the fact that GM is asking for $4 billion for operations through the end of the month and an additional $4 billion for January, there’s another reason a bridge loan can’t wait.

According to very recent market research (conducted by CNW Marketing Research), more than 30% of consumers who considered a GM vehicle and purchased a competitive product instead cited the possibility of GM bankruptcy as the top reason for not buying a GM product. This is more than double the percentage of the next highest reason.

To highlight this point, both the Baseline and Downside Scenarios outlined in this submission assume that consumers will consider GM products and services on their merits, and without regard to concerns relating to the company’s viability. If this assumption is not true, and concerns regarding the company’s viability continue to weigh on purchase decisions (as they clearly did in November 2008), the company expects to that first-quarter 2009 cash outflows would be materially worse than even the Downside Scenario. As such, clarity and prompt action adds real value to the company and to consumers.

GM’s sales dropped 41% from last November’s numbers; Chrysler’s sales dropped 47% (the industry as a whole dropped 37%, with Ford having one of the smallest drops). In other words, all this discussion of whether or not to let GM or Chrysler go bankrupt is making it more likely that they’ll go bankrupt, because they’re not even keeping pace with the industry’s severely contracted sales numbers.

That doesn’t mean Congress will get something passed right away. But it does raise the stakes for this week’s hearings.