The big national news for the past two weeks focused on Ford's major plant closing, executive firing and reorganization plans. This week, GM takes the spotlight with its addition of Jerry York, Kirk Kirkorian's personal henchman, to its board. GM also slashed its dividend (it should have been eliminated), and drastically reduced executive salaries, healthcare and other perks. Even The Rick got his salary cut in half. Why does he still have his job?

Chrysler is in trouble too with few "hits" scheduled to be launched. There were some internal reorganization and cost cuttings reported last month, but it didn't make the big headlines.

All that news from inside the Detroit Bubble seems like a world away as you drive around Los Angeles. The big news here is that the 2007 S550, Mercedes-Benz's new flagship sedan, hits the showrooms February 9th. I got my invitation to see the S550 from the Beverly Hills dealer and I plan on going this weekend to take a look. You even get a "special gift" if you got one of the invites. You can probably get the same gift certificate by going to their website.

The new S-Class has to be the new benchmark in the large luxury sedan category. This is "make or break" for Mercedes-Benz. The S-Class has long been a staple of LA culture. Mercedes' customers, weary of poor quality and repeated visits to the dealer for service, really want this new flagship to return Mercedes to the top of the heap in terms of quality, reliability and technology (that works).

An article in the British magazine Autocar caught my attention for its brief "first drive" commentary on the new S-Class. "The new S500, unquestionably the best car in its class, and arguably the most complete road car in history, is the perfect riposte to the bleak news that has hounded DaimlerChrysler in 2005." [Note the US market gets the new 5.5 liter V8] High praise for the new S-Class indeed!

The author continues to wax on about the endless improvements, superb build quality, cabin comfort and silence, drivability, etc. The point is that they believe Mercedes has returned to the bullet-proof build quality and engineering that were hallmarks of past S-Class sedans. For the record, the 2007 S550 is the ninth generation S-Class -- the new car has some heavy lifting to do to earn its place at the top of the heap.

Los Angeles cares about the S-Class sedan and any Mercedes fan will welcome the vast improvements in quality. The new car is a whopping 205 inches long and weighs in at 4,465 pounds of German steel, dead cows and the most sophisticated electronics ever stuffed in a car. This is one car to watch in the LA market.

The Brits also have a very interesting "outside the bubble" take on the American automobile manufacturers. After attending the North American International Auto Show in Detroit, the Editor of Autocar magazine, Rob Aherne, thinks the "Big Three" must try harder.

Mr. Aherne compares the new Lexus LS flagship to the retro Chevrolet Camaro and Dodge Challenger. On one hand, Lexus -- Toyota's ever-expanding luxury division -- takes its best shot at Mercedes-Benz with a new, 4.6 liter V8 with power rivaling the 5.5 liter V8 in the S550. And since Mercedes has a 7-speed automatic transmission, Lexus thumbs its nose with an 8-speed automatic! Electronics are also on the top of the list for Lexus with a digital jukebox and a self-parking system. The seats have a body temperature sensor so that the automatic climate control can tell if you need to be warmed up or cooled down. Lexus is definitely looking to its future as is Mercedes-Benz. No one has the heritage and history of Mercedes; but Lexus and Toyota have the power and money to mount a credible challenge.

Now look at the "big news" from the "Big 3": GM trotted out its stunning new Camaro concept and Chrysler ponied up the beautiful Dodge Challenger. The Autocar editor really liked the two retro concept cars based on iconic 1960s models, and he noted that there was nothing wrong with mining the past for inspiration; however, he points to the "confidence" with which Japan presented its "finest" as the ones setting the pace for the automotive industry. Toyota is looking at the future. GM, Ford and Chrysler (the American half) are looking at the past, hoping for a revival. In fact, the Brit noted what is painfully obvious: The Camaro and Challenger concepts are too faithful to the original designs. Aside from the futuristic interiors that would never make production, the concepts lack the modern interpretation of the classics. At best, if these cars make production, they will be lower-volume niche cars.

By contrast, the most important car to hit the mass market (aside from the S550 in LA) is the new-generation 2007 Toyota Camry. It's coming to market very soon. It's still a boring refrigerator, but as with all new generation Toyotas, the interior has been "Lexized" and the kit level is closer to a luxury car than an economy car. The Camry has been the biggest seller in the US for a few years now. For 2005, Toyota sold 431,703 Camrys. With the new Camry, including a hybrid version, it's likely Toyota can easily top that number in 2006.

The Camry is a big deal -- even in the LA market. The Camry is a huge seller here in LA. The new Camry will become as common as fast and in greater numbers than the highly successful new Honda Civic line. Dan Neil, the extraordinary automotive critic for the LA Times, tested the new Camry Hybrid and found that the car was well-built, comfortable and that the economics of the hybrid actually work with the high gas prices. He did the math and found it would only take three to four years to get a full return on the hybrid investment and that the continued savings are just dividends.

Toyota is looking to the future when it sails past Chrysler and Ford and dethrones GM as the world leader in terms of annual units sold. The past isn't going to help the Americans - you can't change the past. The "Big 3" (according to the Mr. Aherne) need to do serious catch up. His final observation was that "retro concepts won't do the trick, however much we like them."

I agree with him. However, across the pond, on the left coast, Los Angeles is the market to watch. Los Angeles is where the future of the automotive industry is tested and launched daily. There is no need to put a swami hat on to predict the future. From all accounts, the new Mercedes S550 will be a huge hit. There is also no question that Toyota will sell more Camry sedans than ever before. The Camry is too important for Toyota to screw it up and they haven't.

Lexus has been relentless in capturing the luxury market. As good as the BMW 7-series and Mercedes S-Class are, the LS all grown up and ready for battle with the Germans. Lexus is by far the largest selling luxury car brand in the US. It eclipsed both Mercedes and BMW a few years ago and it has a solid lead. The outgoing LS sells far more units than either the S-Class or 7-Series. Mercedes wants to better Lexus with its new S-Class. The target sales for the new car in 2006 are 30,000 units. Last year, Lexus sold 26,043 LS sedans.

The race is on between the Asians and the Europeans. The Americans are so far behind, it's sad. It seems like the rest of the world, outside the Detroit Bubble, see the painfully obvious. GM, Ford and Chrysler can slug it out over who can do the best modern copy of a 1960s muscle car. The Japanese and Germans are going to slug it out over engineering, technology and electronics -- it's all about the future. The Koreans are going to copy the best of what the Japanese bring to market, and waiting in the wings, China is going to copy everything it can for a fraction of the cost. Does this leave any room for GM or Ford? If it does, it's going to be a rough ride.

In the meantime, watch the streets of LA for the new S550 and the new Camry. In a few months, the 2007 Lexus LS 460 will slither into dealers and on to our streets. This year is the first year there will be a Lexus LS with a long wheel base option and near-recliner rear passenger seats. It will be the first time Lexus will challenge Mercedes, BMW and Audi in both size and prestige. I still think the Germans can handle Lexus, but there will be a major slug-fest between the Mercedes S-Class and the Lexus LS for the volume title. Hang on and keep one eye on the road and the other on the rearview mirror. You're going to get an eyeful.