Journalist Paul Eisenstein

DATE January 10, 2002 ACCOUNT NUMBER N/A
TIME 12:00 Noon-1:00 PM AUDIENCE N/A
NETWORK NPR
PROGRAM Fresh Air

Interview: Paul Eisenstein discusses the auto industry and some of
the biggest changes in new cars
TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

The automotive industry is unveiling its new cars in Detroit at the North
American International Auto Show, perhaps the most important auto show in the
world. My guest, Paul Eisenstein, says that he's seeing more changes in
design and technology than he's ever seen in the 23 years he's covered the
industry. Eisenstein is the publisher and editorial director of the
carconnection.com. He used to report from Detroit for NPR and is now a
commentator on NPR's "Morning Edition." He's past president of the Automotive
Press Association. Eisenstein has been to this year's Detroit and Los Angeles
car shows. I asked him to describe some of the biggest changes in the new
cars.

PAUL EISENSTEIN (The Carconnection.com; NPR Commentator): For one thing,
we're seeing an emphasis on product again. For the last six or seven years,
this has been a business that tried to go back to smoke and mirrors. They
talked about brand, but what that was was largely about marketing. You know,
you told people this car was better, but you didn't necessarily make a better
car. Well, suddenly people are saying `product' and they mean it. And what
you're seeing are all sorts of vehicles tailored to specific niches, really
fine tuning products to what specific groups of customers want and giving them
all sorts of innovations. What's even more interesting is there's a push to
drop the price on those cars. Prices have been going down every year for the
last five years, something unheard of in the auto industry. It's more like
consumer electronics.

GROSS: Let's look at some of the new cars. What's happening with the SUV?
The SUV has fallen into disfavor because it's a gas guzzler and also because
of safety problems. So what's happening with the SUV and what are the new
alternatives?

EISENSTEIN: Well, I'm going to take exception with you about it falling into
disfavor. It's fallen into a little bit of disrespect in certain groups. It
is definitely the vehicle you love to hate if you're into environmentalism or
safety because it is a gas guzzler and it does have, in total, a bit of a
safety problem. You know, you have these big Excursions and Expeditions--some
of them weigh four tons or more and when they ram a small car you do have a
problem. On the other side, people who are in the big SUV really like it
because they feel safe and they feel like they can get through anything. I
live in Detroit. You get a lot of snow here and people love the fact that
they have--they sit high, they can look over the big snow piles in the worst
of the winter and that they can get through just about anything. But on the
other hand, what may kill the SUV, if it ever does die, is the fact that
everybody's driving them. It has become the hottest thing on the road.

Interestingly enough, this last year for the first time in US history light
trucks, which include vans, minivans, sport utility vehicles and pickups,
outsold all passenger cars combined.

GROSS: Wow.

EISENSTEIN: That's a major transformation in the industry.

GROSS: You've written about the new station wagons that are being marketed
now and how they're a compromise for people who don't want a minivan or an
SUV.

EISENSTEIN: Yeah. I probably didn't--I didn't answer your previous question
fully, so I'm glad you followed up on that because there is a transformation.
The SUV that originally hit the market was really not meant for the average
driver. It was a rough and rugged vehicle you took into the back roads, you
took to a work site. Over the last decade we've seen the evolution of the
carlike SUV. You know, they ride a little bit better. They're easier to
drive. They have all sorts of luxury features inside. I mean, some of these
look like you're inside of a Mercedes or Cadillac. But they still--the
traditional SUVs still are not as easy to drive as that luxury sedan.

There's a new generation of what you call cross-over vehicles coming. These
are vehicles that may have passenger car frames and SUV bodies so that they're
more fun to drive. They get better gas mileage. And what's interesting is
the next wave of evolution is starting to return to something that the SUV
helped kill off, which is the old station wagon, the "Leave it to Beaver"
mobile. It was everywhere 40 years ago. I owned one. One of my first cars.
My family always had station wagons. They vanished. They were as dead as
dinosaurs. And yet, if you go to LA or to the Detroit Auto Show and most of
the shows you're going to have around the country in the coming months, you're
going to see vehicles that most people are going to look at and say, `That's a
station wagon.' The only difference is they won't call them station wagons.
Actually, the other difference is they're going to be a lot more functional
and fun to drive than the ones that we remember from the days when "Leave it
to Beaver" was a hit show.

GROSS: Describe what's most interesting about the new station wagon.

EISENSTEIN: Well, for one thing they don't have wood cladding. They're
usually not as big as some of the old ones, you know, those big bombers that
just about filled a lane. They usually have higher seating positions. People
like that. That's one thing about SUVs that's become very popular. They call
it command seating and it gives you the chance to look out over the road.
Many of them are equipped with all-wheel drive which has been borrowed
directly from the SUV. They're just more fun to drive. They're better built.
They have more modern suspension systems. They probably have more power than
some of the old ones did. They're loaded with creature comforts. Some of
them are, you know, just amazing blends of SUV, minivan and old wagon. DVD
systems for the backseat. You have seats that can fold flat into the floor so
you can store tremendous amounts of cargo and yet fold them back up and have
room for seven or eight.

GROSS: But it sounds like marketing is expected to be a problem because
people don't like the idea of the old-fashioned station wagons. So are the
auto companies coming up with new names so that they can disassociate
themselves from the old image?

EISENSTEIN: They're desperate to call them just about anything they can
except station wagons. You have cross-overs. You have urban vehicles, urban
assault vehicles. Some people call...

GROSS: Urban assault vehicles?

EISENSTEIN: We've heard that term used to describe some of them. Wagon is
the word that people try to avoid, most people. I've gotta tell you, the head
of product development at Volvo told me the other day--I asked him--I said,
`Wait a second. You actually have something here that you're calling a
wagon.' He said, `Well, we spent five years trying to find something else to
call our vehicles'--'cause they're big on wagons--and he said, `We couldn't
find a better name so we're just going to call it that. We're going to call
it what it is.'

GROSS: How do you think the war on terrorism is affecting sales of SUVs right
now? Because, you know, this war is being fought in an area very rich in oil
and it might affect oil prices, it might affect the availability of oil. And
let's face it, the SUVs are gas guzzlers.

EISENSTEIN: Yeah. You know, I've gotta tell you something. I'm really
surprised that this, what is really a Mideast war, has not had more of an
effect directly on the auto industry related to fuel economy. A year ago,
fuel economy was a big issue. It looked like we were going to have an
increase in mileage standards, and it just went away. I thought when the
assault on the World Trade Center and Pentagon happened, ah, people are going
to look at this and say, `We could have a supply cut off. We'd better start
thinking about fuel economy.' They didn't. In fact, when I spoke with a
couple of our Michigan senators about it, they said, `No, we're worried about
doing anything that might hurt the domestic auto industry and the auto
industry as a whole.' So, in fact, an increase in fuel economy, as something
the government might do, seems to be off the table. And the American public
has been looking at prices rather than politics.

GROSS: Well, in fact...

EISENSTEIN: And so far, they don't seem to care.

GROSS: In fact, the Bush administration just announced it's ending its
government funding for a project to develop high mileage gasoline-fueled
vehicles and instead it's going to support a plan to develop hydrogen-based
fuel cells to power cars.

EISENSTEIN: Well, that's probably one of the most realistic things it could
do. It had previously been a partner with the Big Three in a program called
the Partnership for a New Generation of Vehicles, PNGV, and that was designed
to come up with passenger cars that would get something like 80 miles a
gallon, about triple the average of the mid-sized sedan that had once
dominated American roads. Well, for one thing, those cars don't dominate
anymore. The SUVs do, so it was a little bit misdirected there. The
automakers came up with some great technology, but by and large, it wasn't
affordable so it really wasn't going to get on the road. It was an exercise
often in futility because it really wasn't going to produce sellable vehicles,
but some technology. So this new partnership may be the best thing it can do
because that's where it appears the auto industry is about to go. And the
interesting thing is there is technology on the horizon that could transform
the auto industry as dramatically as anything since Benz drove his first
gasoline vehicle in the 1880s.

GROSS: Let's talk about some of the technology, after we take a break. My
guess is Paul Eisenstein. He's the publisher and editorial director of the
carconnection.com, an online magazine devoted to analyzing vehicles and the
auto industry. We'll be back after a break. This is FRESH AIR.

(Announcements)

GROSS: My guest is Paul Eisenstein. He's the publisher and editorial
director of the carconnection.com, an online magazine about automobiles and
the auto industry. He just attended the two big car shows in Los Angeles and
in Detroit.

Let's talk about some of the new technology in powering cars. There's a
couple of directions that the auto industry has headed in here. One is the
Electric Vehicle, the EV, where it's all electric powered. And the other is
the Hybrid, where it's a combination of gasoline and battery power. Where's
the industry heading now? Which direction is it favoring?

EISENSTEIN: Well, it's definitely not favoring the electric vehicle.
Batteries are a technology nowhere near prime time and nobody believes that
they will be anytime soon. Vehicles like General Motors' EV1, Honda's EV Plus
and the like were fun experiments but they didn't work. They're too
expensive. They don't have enough range. They take a long time to charge.
They'll be specialty vehicles probably limited to very special applications.
And, in fact, out in California, they've created a new rule which will
effectively require manufacturers to sell tens of thousands of what are little
more than fancy golf carts like the THINK city and THINK neighbor, which come
as divisions of Ford Motor Company. Chrysler has one that it's doing as well.
But battery cars, forget it. Most people are not going to put up with it.
What will probably catch on is the Hybrid.

GROSS: And what is the Hybrid? Explain how it works.

EISENSTEIN: OK, Hybrids, very basically, combine two different sources of
power under the hood; and what they do is they use primarily a gasoline
engine, pretty much the same as any automobile. But they also have the
ability to recapture energy that is lost during breaking or coasting. You
know, whenever you apply the brakes, you're getting rid of energy, you're
wasting it. So you capture that. You generate electricity back and you pump
it into a battery. Then when it's time to start up again or maybe when you
need a little boost of power, you take the energy out of the battery, put it
into some motors and that means you can go a little faster, maybe you can get
away with a smaller engine in your car which is the strategy that Honda has
been using with its Insight. And that allows you to get significantly
better mileage and in some cases, better performance as well. Honda has one
out, this teardrop, two-seater called the Insight. Toyota has one out called
the Prius. It's a very sophisticated machine, very expensive. They're
selling for far less than they can actually make it for.

Honda is getting very aggressive. They are going to introduce an EVI should
say an HEV, Hybrid Electric Vehicle version of their best-selling Civic in
just a couple months. And they expect that within a matter of a year, 10
percent of the sedans sold in the United States by Honda will be Hybrid
Electrics.

GROSS: Now are these cars mostly small cars intended for use around town as
opposed to for big trips?

EISENSTEIN: They'll actually get the biggest fuel economy savings around town
because when you're applying the brakes and then starting up again, that's
where you have normally the most loss of energy. You can save the most by
recapturing it. But the hybrid is going to spread into a lot of other areas
as well. You're going to see a General Motors hybrid off of its big pickup
platform in a couple of years. The problem is the technology doesn't always
work in every application. Ford just abandoned the idea of using it on its
Explorer SUV, but it is about a year away from introducing a hybrid version of
its smaller Escape, which should be able to get 40 miles a gallon out of
the sport utility vehicle.

GROSS: Now what's the AUTOnomy?

EISENSTEIN: Ah, that is the game changer, potentially. It's a General
Motors--How do I say it?--a motorized skateboard? It sure looks like it. I
mean, it's the type of skateboard you would expect on "King Kong." I think a
lot of people were surprised when they saw it roll out at the auto show the
other day. It is a self-contained platform. You know, if you were looking at
it from the top down, it has about the rough shape of an automobile, of a
mid-size automobile. If you look at it from the side, it looks like just a
platform. There are the wheels and there's this chassis made out of high-tech
composite materials. And it's only about six inches thick. Obviously, it's
not a full vehicle. But in that composite platform, hidden away, you find a
fuel cell, hydrogen storage, four electric motors and the control technology
to actually make that platform move.

The next step is you mount on the platform a body. It could be a sport U
body; it could be a sedan, a sports car, a pickup; it doesn't really matter.
There's no mechanical connection between the controls and the vehicle. A kid
who's good at video games could conceivably hook it up with that type of
control system. You could have multiple bodies in your garage. You need a
pickup today, you would put the chassis underneath and mate it to that body.
You want a sports car? You mate it to the sports car body.

But the important thing is that it has been designed. This is the ultimate
example of form and function because it has been designed not around the big,
bulky internal combustion engine, but around a totally game-breaking concept
called the fuel cell.

GROSS: Is this on the market yet?

EISENSTEIN: No, no, no. The fuel cell is still a technology that's a bit
beyond, well, current use. It's got a few years of development. Out in
California they are test driving a whole fleet of fuel cell vehicles. Ford,
DaimlerChrysler, Honda and a couple of other makers promised to put limited
numbers of them on sale in 2004, but it will probably be 2010 before fuel
cells hit the street in high numbers. And there's an awful lot of ifs before
that can happen. So that is an optimistic forecast.

GROSS: Well, what is a fuel cell? How does it work?

EISENSTEIN: You know, this is an interesting technology. It's a technology
of the future that's been sitting on the shelf for 150 years. When they went
to the moon, that was the first serious application of something that was a
curiosity invented in Britain in something like the 1850s. It's surprisingly
simple. In basic form, a fuel cell is a device that brings hydrogen and
oxygen together. And even those who had the most basic high school chemistry
know that makes water. It also creates a little current of electricity which
you can use to charge a battery, run headlights and power an electric motor,
motors that can drive the wheels of a car.

The problem is it's still very expensive, but the prices are dropping rapidly.
It's still unreliable, but it's getting better. Fuel cells are big, but
they're coming down in size. Everybody's watching this technology develop at
an incredible rate.

The bigger problems are what happens once they get to the point where they may
be commercially viable? Remember I said they run on hydrogen. And I don't
know about you, but I can't gas up on that at my local gas station. I don't
live close enough to NASA, so I can't go down to the place where they fuel up
on hydrogen for the space shuttle. There's no infrastructure. So the next
problem, they have to create an infrastructure. That means you've got to
convince the energy companies to do it. Let's say you get the infrastructure.
Then you've got to find a way to store it on your vehicle, and that's not
easy. So there's a whole series of problems that they have to solve, yet
there is a general belief in the auto industry, and I do not believe it's
smoke and mirrors, that this technology will be able to be put to market by
the end of the decade.

GROSS: And once it is, then we'll start to see the development of that
skateboard on wheels that you were describing and other new car designs to
suit a new form of energy.

EISENSTEIN: You know, if you have this technology where you don't need to
make a car look the way it does now, you don't have a big engine you have to
put in front of the passenger department...

GROSS: Mm-hmm.

EISENSTEIN: ...why build cars the way you do now? You transform things. It
could make it easier for other companies to get into the business. GM may
build something like the AUTOnomy, the skateboard, or somebody else comes up
with an equally interesting concept. And maybe somebody else starts marketing
bodies that you can put on your GM platform. Right now, it's nowhere near
ready for market, but what it shows is there's a dramatic search for new
technologies and new ideas in the auto industry. This is an exciting period
where people are just--you know, it's a hackneyed phrase, but they're really
stepping out of the box and looking for ways to do things that they have never
done in the auto industry.

GROSS: That's something interesting to think about. In the meantime, the new
hybrid cars, what's your impression? Do you think that they're perfected
enough to invest in, to buy now, or do you think people should be a little
cautious and wait a couple more years until they're improved and tested?

EISENSTEIN: Well, if you're really into trying to get the best mileage
possible, then hybrids are nice to get, but there aren't many of them out
there. Today you can only get two: Toyota's Prius and Honda's Insight. That
little two-seater isn't going to be the car that--the Insight--that most
people would want, so they'd probably want to wait. The same thing with the
Prius. It's a nice vehicle, but it's very special out there. It's small. It
isn't particularly fancy, for anybody who wants something a little more up
market. Hybrids are going to start showing up in lots more numbers over the
next couple of years. The Civic, the Escape, and then moving up. There won't
be many choices, at least not for the next few years. And the reality is the
technology is expensive. You're adding a lot of complexity to the vehicle.
Nobody knows if there's going to be tax credits passed by the government.
That would change the equation. But the next few years you are probably going
to see hybrids costing anywhere from two to four, maybe $5,000 more than a
standard vehicle. And the question that you have to ask yourself is whether
your driving patterns justify making that up through better mileage.

GROSS: Paul Eisenstein is the publisher and editorial director of the
carconnection.com. He'll be back in the second half of the show. I'm Terry
Gross, and this is FRESH AIR.

(Announcements)

GROSS: This is FRESH AIR. I'm Terry Gross, back with Paul Eisenstein,
publisher and editorial director of thecarconnection.com. We're talking
about the latest changes in automotive design and technology. He's been to
this year's auto shows in Detroit and LA, where the industry unveils its new
models. Eisenstein has covered the auto industry for 23 years.

We've been talking a little bit about new ways of powering cars--fuel cells,
battery power. Let's look a little bit about the exteriors of cars as they
are now. One of the trends we've seen in car bodies is the retro look,
particularly like the VW, the new take on the old VW Beetle.

EISENSTEIN: The Beetle?

GROSS: And it looks like a little toy. Has that been successful, and are
other car companies going in that retro direction?

EISENSTEIN: It's funny, a lot of the makers hate the word `retro.' Designers
don't like it. They like to call it `heritage.' You know, we're mining our
past history. They like to talk about DNA. This is another buzzword these
days, `We're going for the DNA of our brand.' Ford just created a studio
called the Living Legends studio, and they showed at Detroit a concept
vehicle, which I know they'd like to build, called the GT40. It's based on
the race car that swept the Le Mans and European circuits during the late
1960s. I mean, you look at that from a distance, and you swear it's just one
of the old cars brought back again. Audi's TT is a reminder of the old
Carmengia. The new Thunderbird, one of the hot cars of the year, has been
awarded car of the year by several magazines. That's clearly a retro car.
And, in fact, the guy who leads Ford's design studio designed the retro
Beetle.

So there is clearly a search for old ideas, and some companies are building
them unabashedly retro. Others are using little cues that they borrow to take
new designs but make them feel like they have heritage. You know, you can see
the connection between new cars and the old.

GROSS: What about things like paint and the durability of the body? Are we
making improvements in that?

EISENSTEIN: That's interesting you say that. The paint is one of those
things people never really give much thought to. Remember the old days, Henry
Ford said you could get it in any color but black. Well, these days, it's
amazing, you can get it in any color of the rainbow. And the paint is more
durable. I mean, some of these colors, some of these paints jobs are so
beautiful you feel like you can go swimming in them, they're so rich and deep.
But there's been dramatic changes in all sorts of little things that the
customer doesn't really think about. Virtually every car now goes through all
sorts of heavy corrosion protection. You're in Philadelphia, so you get some
pretty hard winters. And think about it, how often do you see cars now that
have serious rust on them?

GROSS: I know that's really improved. My cars used to rust out like crazy,
particularly when I lived in Buffalo, New York...

EISENSTEIN: Oh, boy.

GROSS: ...which gets a lot of snow. I've surely noticed the improvement in
paints on the cars.

EISENSTEIN: Well, you know, it's across the board, all these little things
that have changed dramatically in the last 20 years. I'll tell you something
which has been among the most dramatic changes we have seen in the auto
industry, nobody will ever think about. Think of it as the Rodney Dangerfield
of the automobile, the tire. It never gets any respect, but the fact is new
tires have contributed more to safety, fuel economy and performance than just
about anything that has been done since the 1970s.

GROSS: What has changed in tires?

EISENSTEIN: Well, a couple of things. They're smarter about how to design
treads. You have tires that can wick away rain so that even on slick roads
they handle almost as well as if it was dry pavement. You have these designs
that can grab ice almost like suction cups. You have better compounds. The
rubber is better. They've gone to radial tires over the last 30 years that
last forever. You know, you used to have to change your tires, you used to
have to replace them all the time. Now some people have tires that will last
almost the life of the vehicle.

GROSS: Let's talk a little bit about the interiors of the new cars. What are
some of the new gizmos or new dashboards that you find particularly
interesting?

EISENSTEIN: Well, there's been a move towards electronics for quite a while
now, but the technology seems to be really taking hold. And it's taking hold
in a lot of different ways. For one thing, they're loading all sorts of
gizmos that will put you in communication with the world in your car;
something called Telematics. You know, on board navigation, satellite
radio just launched for the first time. You'll actually be able to drive
coast to coast and listen to the same radio station if you subscribe to one of
these services and buy the special system. Video; DVD is becoming very
popular. Lots of folks love this. I mean, if you're driving cross-country,
even, you know, just four hours to Grandma's house, having a DVD for the kids
in the back seat is a great way to stop them from saying `Are we there yet?'

And they're even talking about putting Internet access into the car. I'm not
sure about that, and there are some issues about safety that you have to raise
as we start putting all of this technology on board.

GROSS: Yeah, the safety issue, I think, is important, because just as some
people are saying, `Well, we shouldn't be allowed to talk on a cell phone in
the car,' now we're putting in DVDs and trying to get in the Internet. Sure,
it's swell for the people in the back seat, but I can't help but think some of
the drivers are going to be taking their eyes off the road.

EISENSTEIN: There was a study in Toronto about a year or so ago that
suggested that those using cell phones while driving have an accident rate
equivalent to somebody who is just short of legally drunk. I hope not; I do
use my cell phone when I drive occasionally. But definitely it is a
distraction. New York state recently passed a law which requires that you use
ear pieces or hands-free phones where, you know, you don't have to take your
eyes off the road, you don't have to hold something to your ear. And more
states are likely to follow. Holding a phone in your hand while driving is
all but barred in most of Europe now. Now imagine people trying to deal with
Internet access. You know, you're checking your e-mail.

Of course, the move is to voice-activated systems, so you wouldn't actually be
sitting there reading it. You'd have a system that could actually go in,
check your e-mail, read it to you in a humanlike voice and then even, when you
wanted to respond, translate speech to text and then send it.

GROSS: I think we have a couple of years until we have that in the car.

EISENSTEIN: Oh, no. No, no, no. We're starting to see the first of them out
there right now.

GROSS: Really?

EISENSTEIN: As a matter of fact, Cadillac was supposed to introduce it this
year, but they had a little problem with some of the technology. But there
are a couple of systems out there in after market. You can go and buy them at
some of the big electronic stores.

GROSS: You mentioned satellite radio, and this is a new service in which you
have to subscribe. There's many different stations on the subscription
service. You can get them no matter where you're driving in the United
States, but you have to pay a subscription fee in order to get it. And you
have to have a special new radio in the car that receives this satellite
service. So some of the car companies have invested in this, and they're
coming out with new cars that have this radio capability. How invested is the
car industry in this new satellite radio?

EISENSTEIN: Well, General Motors actually has a piece of XM Satellite
Radio, so they're very invested, and they're going to be rolling it out in
large numbers--at least they think they will--over the next year. I think
they'll be watching to see how the consumer really takes hold of this
technology, whether they're willing to make the investment and also spend the
monthly fee. That's a big question. There's a lot of this technology out
there that you're going to have to, in some cases, pay for the hardware. In
some cases, manufacturers are simply putting it in the car. General Motors is
a good example. They're putting, in many cars, the OnStar System for free,
because where they think they're going to make the money is in the subscription
rates. And that's another big change in the auto industry; the manufacturers
are looking for ways to stay in touch with and continue to make money from the
consumer after the car is driven off the dealer lot.

GROSS: What is the OnStar System?

EISENSTEIN: OnStar is very interesting technology. It's the biggest of what
they call telematics services. Telematics means basically a blend of on board
computing and communications. At its most basic form, it is a safety and
security system. You get locked out of the vehicle, you call the OnStar
center, if your car is so equipped, and they can actually unlock the doors
remotely by a radio signal. If you can't find your car, you can call them up
and say, `Hey, flash the lights and blow the horn,' and they'll do that. You
can find it in a crowded parking lot. If your car is involved in an accident
that sets the air bags off, it will automatically call 911 and not only alert
the police that the accident has happened, but because there's an on board
satellite navigation system in there, it can lead them right to the location
where the accident occurred, even if you're incapacitated.

GROSS: And this is a subscription service?

EISENSTEIN: Mm-hmm. Yeah. GM is offering it in many models for free--the
hardware for free, and a year of service for free. But then you can pay quite
a bit, depending on what level of service you get. I found out the other day
that General Motors is the largest reseller of cellular phone minutes, air
time, in the country, and that's because of their OnStar System. They've
got--What?--two million subscribers right now, I think, or they're approaching
two million subscribers, and because they're putting it in so many cars,
they expect to be adding a couple million people to that roll every year.

GROSS: Wow. If you're just joining us, my guest is Paul Eisenstein. He's
the publisher and editorial director of thecarconnection.com. It's an online
magazine on vehicles and the auto industry. Paul, let's take a short break
here and then we'll talk some more. This is FRESH AIR.

(Soundbite of music)

GROSS: We're talking about the new cars. My guest, Paul Eisenstein, is the
publisher and editorial director of thecarconnection.com. It's an online
magazine that reports on vehicles and the auto industry. He just attended the
big car shows in Los Angeles and Detroit.

Let's look at the auto business for a second, the auto industry. Ford and
General Motors are expected to be laying off thousands of workers. Why is
that necessary? Why do they think it's necessary?

EISENSTEIN: Well, GM probably won't lay them off. They'll continue a buyout
program that they announced last year, basically encourage a lot of their
redundant salaried employees to bail out. Ford has been doing the same thing.
Actually, many of the manufacturers--all of the domestics--have been trying to
do that this year, including DaimlerChyrsler group. But the big problem will
be at Ford, which we can get to.

But the industry has realized that it's facing serious problems. Costs--this
is the most amazing thing of all. Costs have been going down an average of 1
percent a year for the last five years, even though manufacturers have been
forced to add more and more content to their vehicles, sort of like the
computer industry, you get a lot more for your buck these days. And the
problem is how do you do that? What's the equation to pull that off? Well,
you have to get a lot leaner than ever. You have to do more with your people.
You have to find ways to make your assembly lines more efficient, not just in
terms of fewer workers, but just doing things smarter. And that basically
means that the industry's going to be employing a lot fewer people.

GROSS: Ford is expected to be making a lot of changes at the end of this
week. What kind of trouble has Ford been in?

EISENSTEIN: What type of trouble hasn't Ford been in? This is a company
that, two years ago, earned $8 billion. This year, about a week after they
announced their turnaround plan, will announce their first annual loss
in--What is it?--decades, decade and a half, something like that. Quality
went down. Productivity went down. Launches got delayed, and when they did,
vehicles had all sorts of problems. The Escape sport utility vehicle, when it
came out a little over a year ago, had five recalls inside of three months. A
honed image of having the best quality of all the domestic makers has all but
vanished. They had to force out their CEO a few months ago.

There were two things that tripped Ford up to the point where they are now in
the disastrous situation that they're in right now. One of them was the
Firestone fiasco, the recall of all those millions of tires for apparent
safety defects, defects that have been linked to hundreds of deaths. And
then, of course, the September 11th disaster, which threw the entire industry
into turmoil. Ford, like the rest of the makers, had to pump out some super
discount incentives--0 interest financing--and it just broke the bottom line.

GROSS: So is Ford hoping that when it announces its new strategy and its new
revisions that it will get back on track?

EISENSTEIN: It's going to be a long process. Even the most optimistic Ford
executive, Nick Scheele, the guy putting the turnaround plan together, admits
it's probably going to take two years, at least, to bring Ford back on track.
And we've seen turnaround plans take a long time. DaimlerChrysler thought
that by the end of last year it would pretty much be back in shape. It has to
revise its turnaround plan. So it won't be easy. Part of the problem is that
the automakers are restricted from doing some of the most radical steps that
they would have taken in the past. They have a contract with the United Auto
Workers union which essentially bars, in the United States, any full plant
closures. They can do temporary shutdowns, they can reduce the number of
shifts, but they cannot shut a plant down entirely. And that limits their
options significantly. So Mr. Scheele has said that this is going to be just
phase one of their turnaround plan.

GROSS: After September 11th, the auto industry was so worried that sales
would plummet that it introduced a lot of incentives to buyers, particularly
like 0 percent financing. Can we expect those things, those discounts and
financing plans to stay in place for 2002?

EISENSTEIN: Well, we have seen that the 0 interest loan programs are
essentially at their end. General Motors wrapped up its program, which they
called Keep America Rolling, about a week ago. Ford will shortly end its
program, as has DaimlerChrysler. But GM replaced it with a program that
essentially gives you $2,002 back on 2001 and 2002 models. That's a big, big
discount. And that type of program is likely to continue for a while. The
industry's facing a problem, because the incentives work too well. They sold
so many cars that they drew a lot of buyers that might have been in the market
in 2002 into the last months of 2001. So now they've got to find a way to
bring people back in the market. It's one of these self-fulfilling negative
prophecies. You know, you spend money, you do well and you hurt yourself for
the future. And people are worried that this could be a disastrous year for
car sales. But then again, for the consumers who can afford it, it could be a
great year for the buyer.

GROSS: Leave us with some consumer advice. Do you think this is a good time
to buy a new car? And is there anything that you recommend that we think
about if we are looking for one as we enter this new kind of car market? New
in terms of the product and in terms of the financing and the deals.

EISENSTEIN: It is a great time to buy. According to the affordability index,
Auto Affordability Index that Comerica bank does, cars are now at their
lowest price, adjusted for inflation, since anytime since 1980. So that's one
good sign. Incentives will be good. And here's the most important thing.
The consumer has access to more knowledge than ever before. In self-interest,
you know, I am a publisher of a Web site, there's a lot of them out there, and
there's tons of information on the Internet and in print. So consumers go in
armed for bear. They know more about the product than the typical
salesperson. They know about the pricing. They know what the dealer is
paying to get it from the factory. It changes the equation in who has power
doing the deal. So that's one good sign why it's a good year. But people
need to be well prepared, do their homework, go out there, find out the type
of vehicles that are available, find out what you're going to pay for it. Get
a sense of what the competition is. And if you do, you're going to be in
control of the bargaining process when you go to the dealership.

GROSS: Paul Eisenstein, thank you so much for talking with us.

EISENSTEIN: My pleasure to be with you.

GROSS: Paul Eisenstein is the publisher and editorial director of
thecarconnection.com.

Coming up, rock historian Ed Ward on the band Dan Hicks & His Hot Licks. This
is FRESH AIR.

(Soundbite of music)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Review: New CD "The Most of Dan Hicks & His Hot Licks"
(Soundbite of music)

TERRY GROSS, host:

You're listening to a previously unreleased demo from 1970 which is included
on the new CD "The Most of Dan Hicks & His Hot Licks." It collects demos
along with the tracks from the band's first album. At a time when music was
getting louder, this band was getting softer. At a time when young people
were expanding the number of drugs they experimented with, this band was
listed in the Marin County Yellow Pages under `bar fixtures.' They were so
far behind the times they were ahead of them. Rock historian Ed Ward tells us
about Dan Hicks & His Hot Licks.

ED WARD reporting:

By 1969, Dan Hicks was already a San Francisco scene veteran. He'd been the
drummer, and later a guitarist, with the first of the psychedelic bands there,
the Charlatans, who specialized in Wild West attire and electric folk rock,
but got passed over when the recording gold rush came to town. But Hicks had
another vision, one that was to put him completely at odds with what America
expected from the city of the Jefferson Airplane and The Grateful Dead.

(Soundbite of song)

Mr. DAN HICKS: (Singing) I've talked to your mother and I've talked to your
dad. They say they've tried but it's all in vain. I've begged and I've
pleaded, I've even got mad. Now we must face it, you give me a pain. How can
I miss you when you won't go away? Keep telling you day after day, but you
won't listen, you always stay and stay. How can I miss you when you won't go
away? You're never...

WARD: Quitting the Charlatans, he cast around the city for acoustic
musicians. Instead of a lead guitar, he wanted a violin, and recruited David
LaFlamme for that job, but lost him when Laflame started his own band, It's
A Beautiful Day. Hicks wanted call and response with a couple of girl
singers and found Tina Gancher and Sherry Snow. The band was delayed
while their bassist, Jaime Leopold, did a few months for selling pot, but
when he came back, he brought along his guitar-playing roommate, Jon Weber,
and the Hot Licks were almost there.

With a recording deadline looming, Hicks took his mother to a cocktail lounge
for her birthday and heard Sid Page playing violin. That was it.

(Soundbite of song)

Mr. HICKS: Baby, you sure are looking good tonight.

Unidentified Woman: Thanks, handsome.

Mr. HICKS: I sure do like your style, all the while.

DAN HICKS AND HIS HOT LICKS: She's a bit of timing, but that's all right with
me. She wears a dress of velvet that hangs below her knees, her knees.
She's...

WARD: While his peers were delving deeper into electric blues and hard rock,
Dan Hicks & the Hot Licks were exploring swing, and their first album,
"Original Recordings," baffled nearly everyone who heard it. Nonetheless,
Epic Records ...(technical difficulties) finished or released. (Technical
difficulties) ...label called Blue Thumb signed the latest edition of the
Hot Licks to the label and set them up in the Troubadour, an LA nightclub,
for five days and recorded them live.

(Soundbite of recording)

Mr. HICKS: This is a little exercise in control, this next tune. You
probably think it's easy being up here singing and everything, and playing.
It's not. It's not easy. Thank you.

(Soundbite of laughter)

Mr. HICKS: OK, nice and mellow now. One, two, one, two, three.

(Soundbite of guitar music)

DAN HICKS AND HIS HOT LICKS: (Singing) Go back ...(unintelligible).

WARD: It was the right decision. In the couple of years since their debut,
the Hot Licks, and fiddler Sid Page in particular, had gotten higher. Naomi
Ruth Eisenberg and Maryann Price were far more accomplished vocalists
than the previous girl singers had been, and Jon Weber was gone.

(Soundbite of recording)

Mr. HICKS: This expresses our feelings, ladies and gentlemen. It's called "I
Feel Like Singing."

One, two, one, two, three, four.

(Soundbite of "I Feel Like Singing")

DAN HICKS AND HIS HOT LICKS: There are people who live for the moment, the
moment, the moment, the moment, and others who don't seem to get much
enjoyment, enjoyment, enjoyment, enjoyment. Some always laugh, others always
sad, but lately, lately, it seems that I've been somewhere in between. It's a
funny feeling, love is what I mean. Yes, I'm so in love, can't come down from
up above, down, down, down from up above. I feel like singing. Re, da, do,
da. Re, da, do, da. Re, da, do, da. Re, da, do, da. I feel like singing.
Re, da, do, da. Re, da, do, da. Re, da, do da. Re, da, do, da. Re, da, do,
da. Re, da, do, da.

WARD: The resulting album, "Where's The Money", flopped, rising only as
high as 195 on the Hot 200. Undeterred, LiPuma put the band in the studio
and tried again, this time with a hot lead acoustic guitarist for Page to
interact with, John Girton.

(Soundbite of song)

DAN HICKS AND HIS HOT LICKS: Some folks think it's cool to have some kind of
lover. He don't believe it's true 'cause he's just found another. And when
they see him they might see him on the street. He walks with rhythm, so he's
got some kind of beat.

He clicks his heels a bit, his suit's a perfect fit. He's got the smile.
Though he looks alone, somebody, somebody wants him on the phone. Shout. He
won't shout. He's the walking one and only and they're calling him by name.
He won't be leaving town until he can come to fame.

WARD: "Striking it Rich," the second album, was a masterpiece. Maryann
Price's sardonic reading of Johnny Mercer's "I'm An Old Cowhand" became a
number so identified with her that she still performs it today. And they
re-recorded a couple of numbers from the early days, "Canned Music" and "I
Scare Myself," and brought them to perfection, particularly the latter tune,
where Sid Page spent two minutes and 47 seconds fiddling himself into history.

(Soundbite of music)

WARD: The second Blue Thumb album did no better than the first, but the band
toured and they went in for a third try. This time it showed signs of life,
rising to number 67 on the charts. As always, there was life in the grooves,
too.

(Soundbite of song)

DAN HICKS AND HIS HOT LICKS: I'm standing on a corner with my feet in my
shoes, wracking my brain, I've paid my dues ...(unintelligible). Along comes
a piper and I blow my blues. ...(Unintelligible). It's never too late to be
up to date. You can get it now, but you have to wait. Along come a chick, a
(unintelligible) little dolly, she's out walking her big fat collie.
(Technical difficulties) ...(Unintelligible).

WARD: Maybe it was a joke calling it "Last Train to Hicksville: The Home of
Happy Feet," but that's what it turned out to be. One day in 1973, Dan
just broke up the band, and that was that. One of America's best bands
disappeared before most people had had a chance to hear them. Sid Page moved
to LA, where he's a strong presence on the film scoring scene, and John Girton
got a job with Maria Muldaur. Maryann and Naomi continue to have solo
careers. And as for Dan, he finally got another album out in 2000 with guest
appearances by Rickie Lee Jones, Bette Midler, Elvis Costello and Tom Waits,
among others, and Sid back on the violin.

GROSS: Ed Ward lives in Berlin. The recent collection, "The Most of Dan
Hicks & His Hot Licks," is on Epic Legacy. Dan Hicks is currently on tour
and appears in New York at the Bottom Line on Saturday. I'm Terry Gross.
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