Will the Stock Market Cause Consumer Confidence To Nosedive?

Americans were more confident in the U.S. economy in February than at any time since August 2001, the New York-based Conference Board reported yesterday.

The Index of Consumer Confidence index, a key indicator watched by the auto industry, showed a rise in February from January, indicating the consumer’s view of current conditions increased strongly and their expectations for the future edged up slightly. The board said the trend suggests the economy is robust and might even be gaining some momentum.

Tell that to Wall Street. The Consumer Confidence report was released just before the stock market tumbled, with the Dow Jones Industrial Average falling 416 points, its largest one-day drop since 9/11. Investors apparently see the world’s economic future as shaky.

Wonder what the Consumer Confidence Index will show next month?

Posted by at 6:56 AM under Business | Comments (0) | digg this | del.icio.us

$100,000 for Workers; $1-Million Bonus for LaSorda

Chrysler announced yesterday that it will offer eligible U.S. hourly employees up to $100,000 to leave as part of the company’s plan to scale back its workforce and turn profitable by next year.

At the same time, Chrysler’s annual report revealed Chrysler President and CEO Tom LaSorda received compensation of $3.175 million, including a $1.1-million bonus. The report, which for the first time since the 1998 merger with DaimlerBenz detailed executive compensation for Chrysler execs, showed LaSorda was the second-highest paid employee after DaimlerChrysler CEO Dieter Zetsche, who had total compensation of $6.7 million, including a bonus of more than $3 million.

At DaimlerChrysler’s annual press briefing on 2006 financial results a couple weeks ago, company executives explained its compensation and award system. In essence, a Chrysler executive like LaSorda is compensated not only based on Chrysler’s performance, which was dismal in 2006 with a $1.4-billion loss, but also on the performance of other parts of the company, including Mercedes-Benz, all of which had good profits in 2006. Similarly, compensation of execs within DaimlerChrysler is tied not only to their group but also to the others, like Chrysler Group, and the company as a whole.

As for hourly employees, workers who agree to leave the company would receive a lump-sum payment of $100,000 plus six months of medical and vision coverage. The early retirement package includes a $70,000 lump-sum payment plus health care, in accordance with the UAW contract.

Posted by at 6:54 AM under | Comments (0) | digg this | del.icio.us

Saturn: GM's Best Defense Against Toyota

Saturn is conquering one of GM's most formidable challenges: it's getting on the shopping lists of potential buyers and converting lookers into buyers like never before, according to an analysis by Edmunds.com.

Surpassing Edmunds.com forecast for a 52-percent sales increase in February, Saturn reported a 60-percent increase in sales, helping GM boost its total U.S. sales by 3.5 percent in a flat market and while Ford and Chrysler posted declines.

Just as important, sales are coming from largely Asian brands, especially Japan's Big Three -- Honda, Nissan and Toyota.

And while GM is often criticized for having too many brands and those brands cannibalizing each other, not a single GM model ranks among the top 10 vehicles cross-shopped by potential Saturn buyers across its line in Edmunds.com's analysis.

(Read more...)

Posted by at 5:56 AM under Analysis, Featured, GM | Comments (4) | digg this | del.icio.us

Ford: Contract Dispute, Lower Sales

It’s one problem after another for Ford.

Navistar International Corp. will stop supplying diesel engines to Ford for its all-important F-Series Super Duty pickup trucks, just now hitting showrooms; and the automaker confirms its February sales will show a double-digit drop when reported later this week.

(Read more...)

Posted by at 6:47 AM under Ford, News | Comments (0) | digg this | del.icio.us

Chrysler Could Be First With a Chinese-Built Car

As expected, DaimlerChrysler’s supervisory board gave the green light to its Chrysler Group, allowing it to move forward with a plan to develop and build small vehicles with China’s Chery Motor. That means Chrysler could become the first automaker to distribute Chinese-built vehicles in the United States.

Under the approved framework of an agreement –- one that excludes an equity partnership -- Chrysler brands would be able to distribute Chery-built vehicles primarily in North America and Western Europe.

Chrysler said the partnership with Chery would allow it to develop much needed small vehicles more quickly and with less money.

(Read more...)

Posted by at 5:50 AM under Analysis, Chrysler, News | Comments (0) | digg this | del.icio.us

Toyota Picks Mississippi

The Wall Street Journal and The Nikkei, a Japanese business newspaper, report today that Toyota, hungry for additional North American manufacturing capacity, picked Tupelo, Miss., as the site for its eighth assembly plant. Mississippi’s governor is expected to make the announcement today.

The Wall Street Journal further reported Toyota’s top management has adjusted its plans for the plant, which has been in the works for some time, because of growing concern about the health of the U.S. auto market. The plant has been scaled back in terms of capacity to 150,000 units a year, down from 200,000, and start of production is pushed back from 2009 to 2010. It is expected to produce the next-generation Toyota Highlander crossover, the latest version of which was unveiled at the recent Chicago auto show (pictured).

Toyota also is trying to better balance its imports versus domestically produced vehicles. Two-thirds of Toyota’s sales had been North American built but imports rose to 54 percent last year. Toyota and the Japanese government constantly fret about political repercussions from too many imports and Toyota’s continued success at the expense of U.S. automakers.

Mississippi -- and the birthplace of rock 'n roller Elvis Presley -- apparently beat sites in Tennessee and Arkansas.

Posted by at 5:17 AM under News, Toyota | Comments (1) | digg this | del.icio.us

Recession: Greenspan Says It’s Possible This Year

As if the U.S. auto industry wasn’t struggling enough, now former U.S. Federal Reserve Chairman Alan Greenspan warns that the American economy might slip into recession by year’s end.

Greenspan said in a satellite link to a business conference in Hong Kong signs suggest the current economic expansion, which started in 2001, is coming to an end. Those worrisome signs include stabilizing corporate profit margins and a still large federal budget deficit, though Greenspan sees little impact on the economy from the current housing slowdown.

Other economists note the economy has slowed to its lowest level since 2002 but put the earliest possibility of a recession into next year.

Posted by at 5:12 AM under | Comments (0) | digg this | del.icio.us

Ford’s Mark Fields: “I’m human”

Ford’s President of the Americas Mark Fields reached out to the Detroit Free Press, which ran a Page 1 profile of him in Sunday’s edition, in an apparent attempt to soften his image, get the troops on his side and show he’s got what it takes to turn around the automaker.

Fields, author of the automaker’s Way Forward recovery plan, has been under intense fire, most recently for missing various targets for sales. That has led to increasingly harsh criticism and speculation that he might be fired.

“I’m human,” he told the paper. “I would have liked to have gone faster.”

(Read more...)

Posted by at 7:07 AM under Ford, Personalities | Comments (0) | digg this | del.icio.us

Ford’s Mulally: New Book Gives Him Negative Reviews

A new book entitled Boeing vs. Airbus, by veteran journalist John Newhouse paints anything but a glowing picture of Ford’s new CEO Alan Mulally, who was plucked from the aircraft manufacturer last summer to turn around the automaker.

Reviewed on Sunday by the suburban Detroit newspaper, The Oakland Press, the book chronicles the contest between Boeing and its European rival Airbus. It specifically blames Mulally for being slow to address some of the aircraft makers’ problems that finally led Airbus to overtake Boeing in sales.

It quotes former Boeing CEO Harry Stonecipher as saying he came close to firing Mulally, when he was president of Boeing’s commercial airplane business between 1998 and 2006. It notes the 777 program was more than $6 billion over budget. However, it concludes, the 777 program and Mulally’s career were saved by the boom in sales of new aircraft of the deregulated airlines in the early 1990s.

(Read more...)

Posted by at 7:00 AM under Ford, Personalities | Comments (0) | digg this | del.icio.us

Chrysler: As the Rumor Mill Churns

GM? India? Magna? Private equity?

Analysis, speculation and flat-out rumors continue as DaimlerChrysler “explores all options” regarding the future of its Chrysler Group. A potential Chrysler-General Motors link has generated the most interest.

The Financial Times in London reported on Sunday that DaimlerChrysler is considering taking a minority stake in GM as payment for Chrysler if a deal between the two carmakers goes ahead.

Buying part or all of Chrysler’s industrial assets for shares placed with DaimlerChrysler would relieve GM of the need to raise new cash, which GM would find onerous given the current “junk” status of its debt, the paper noted. As a minority shareholder of GM, DaimlerChrysler could benefit from billions of dollars’ worth of synergies and cost savings expected from merging the two companies.

The London newspaper quoted a source identified as a leading shareholder as saying: “They are interested in who takes Chrysler over, and they would be happy to take equity in GM in return.” The paper said such an equity arrangement has the support of at least two of DaimlerChrysler’s institutional shareholders.

Such a plan may be sheer wishful thinking on the part of the quoted shareholder and other European shareholders eager to dump Chrysler. But it represents a shift in GM strategy, which has been moving away from equity arrangements.

(Read more...)

Posted by at 5:55 AM under Chrysler, Commentary, Featured, GM, Rumors | Comments (2) | digg this | del.icio.us

Equity Firms Explore Chrysler Buy

Private equity firms appear far more interested in buying Chrysler than do other automakers.

At least four private equity firms have been in preliminary talks with DaimlerChrysler about buying the Chrysler Group, the Financial Times  in London reports today on its Web site. Private equity firms -- or a consortium of such firms -- had been expected to take a look at Chrysler. They are: Apollo Management LP, the Blackstone Group, the Carlyle Group, and Cerberus Capital Management LP.

The FT also reported several European firms were contacted about their potential interest in buying the firm.

Meantime, the list of automakers as possible suitors shortens as more take themselves out of the running. Among those who claim they are not interested are Nissan-Renault, Volkswagen, Hyundai, Mitsubishi and Fiat.

General Motors still is not commenting. However, the FT is reporting that Fritz Henderson, GM'’s chief financial officer, has assembled a working group to study a possible purchase, alliance or other tie-up with Chrysler. Henderson led a similar group last year that examined, then rejected, a possible alliance with Renault and Nissan.

(Read more...)

Posted by at 7:54 AM under | Comments (1) | digg this | del.icio.us

Chrysler’s LaSorda Delivers Pep Talk

Chrysler Group CEO Tom LaSorda sent an email to all Chrysler employees today in an attempt to boost morale, undoubtedly deflated by a variety of rumors, from a sale of the company to divestiture.

“I want you to keep in mind that (DaimlerChrysler CEO) Dieter Zetsche and the Board of Management strongly endorsed the Chrysler Group’s new Recovery and Transformation Plan,” LaSorda said in the email, posted on Chrysler’s media Web site. “Dieter added that the company will look into ‘further strategic options with partners beyond that business cooperation’ that I outlined in the Recovery and Transformation Plan, which set off the frenzy of rumors.”

(Read more...)

Posted by at 8:26 AM under Chrysler | Comments (0) | digg this | del.icio.us

Weighing in on Chrysler Sale

UAW President Ron Gettelfinger had little to say about a speculated buyout of Chrysler by General Motors. “I have absolutely no opinion on that at all," said Gettelfinger, when he was interviewed on Detroit radio station WJR Wednesday.

Gettelfinger will have his say at some point. He’s one of 20 people on the DaimlerChrysler supervisory board; he’ll ultimately have to vote on the future of Chrysler.

Meantime, others are less reticent about commenting on Chrysler.

(Read more...)

Posted by at 6:08 AM under Chrysler, Commentary | Comments (0) | digg this | del.icio.us

UAW’s Gettelfinger: Ford’s in “Great Shape”

UAW President Ron Gettelfinger did have something to say about Ford. It’s not as bad off as everyone is making it.

His comment to Detroit radio station WJR came a day after one of the nation’s top auto economist expressed its extreme worry that Ford was running through cash quickly, which, in turn, would force major concessions by UAW workers to Ford. Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich., said Ford could ask the union to cut wages and benefits by 20 percent for a $1.4 billion savings in this year’s negotiations. The union’s contract with Detroit automakers expires in September.

Gettelfinger said: "They just went through this huge financing. They've got a ton of cash. They've got great leadership at the top of that company. They've made some tough decisions, but so have we. That company is in great shape."

Posted by at 6:04 AM under Commentary, Ford | Comments (1) | digg this | del.icio.us

February Sales: The Same Refrain

GM, Ford, Chrysler drop; Toyota, Nissan, Honda rise

Detroit’s three automakers saw sales fall again this month compared with a year ago, pushing total industry sales lower, according to a forecast from Edmunds.com. Meantime, Japan’s top three automakers increased sales.

The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated by Edmunds.com to be 53.0 percent in February 2007, down from 57.9 percent in February 2006 and up from 51.8 percent in January 2007.

Some of the drop for the Detroit makers was not only expected but planned. “Domestic sales continue to suffer from pre-planned production cuts and reduction of fleet sales. Year-over-year comparisons will reflect this reality for some time,” said Jesse Toprak, executive director of industry analysis for Edmunds.com.

(Read more...)

Posted by at 5:25 AM under | Comments (1) | digg this | del.icio.us

Chrysler Parts Sale: Who Will Buy?

What if Chrysler were sold for its parts, not in its entirety? Who might the buyers be then?

Writer Paul Ingrassia makes a couple suggestions in a column in today’s Wall Street Journal in how Chrysler’s parts could be divvied up, a necessity if it were bought by a private equity firm. Jeep could go to Honda, which doesn’t have rugged, off-road SUVs. Dodge could go to Nissan, which makes sport-utilities and trucks, though it hasn’t been terribly successful with its large trucks. The Chrysler brand, with its vast dealership network across the U.S. and Canada, could go to a Chinese car company looking to quickly establish a beachhead in North America.

(Read more...)

Posted by at 7:39 AM under Chrysler | Comments (2) | digg this | del.icio.us

Nissan-Renault Out as Chrysler Suitor; Nissan Cuts Workers

Scratch Nissan-Renault off the list of potential suitors for Chrysler. The company says it isn’t interested; it has too much on its plate already.

Renault’s top financial officer told investors Tuesday in London that it isn’t interested in Chrysler in any way, shape or form. A company spokesman reinforced the message that to the Associated Press. “As Mr. Ghosn has said, the company right now is as it is today because it has its own problems inside and we're not going outside to look for the solutions," said Madoka Soma said. "We're not in a rush for a partner."

(Read more...)

Posted by at 6:44 AM under Chrysler, Companies | Comments (0) | digg this | del.icio.us

UAW Talks Could Mean Big Concessions

What Detroit automakers gain or don’t gain from upcoming contract talks with the United Auto Workers union will determine where domestic auto producers build future vehicles, one of the nation’s top auto economists told reporters this week.

Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich., predicts hourly workers will have to give up more than ever before in order to protect U.S. assembly jobs. The UAW’s national contract with General Motors, Ford and Chrysler expires in September.

(Read more...)

Posted by at 6:15 AM under Business, Chrysler, Companies, Ford, GM | Comments (0) | digg this | del.icio.us

GM: Chrysler's White Knight Against Foreign Invaders?

Last week's rumors that General Motors was in discussions to buy the Chrysler Group were immediately dismissed from Wall Street to Main Street as nonsense to sheer lunacy.

But maybe the idea isn't so crazy after all for GM. Maybe GM is playing defense, not offense.

If a foreign automaker – particularly one from China or Korea – were to make a bid for Chrysler, GM could sweep in like a knight in shining armor and save the damsel in distress – not Chrysler, but itself.

GM faces significant risk if a Chinese or Korean automaker buys Chrysler and gains instant access to its coast-to-coast dealership network to widely distribute vehicles that can be priced below the competition because they come from low-cost production sources.

Ford would be hurt as well, but it's broke, so it can't put up a solid defense. GM, however, is in reasonably good health to put the brakes on such a foreign invasion.

(Read more...)

Posted by at 2:26 PM under Analysis, Chrysler, Commentary, GM | Comments (2) | digg this | del.icio.us

That’s Sir Carlos Ghosn to You

Nissan-Renault CEO Carlos Ghosn was knighted Monday by Britain’s Queen Elizabeth II for improving Anglo-Japanese relations.

Nissan has invested $4.5 billion since 1984 to build Britain’s biggest car factory in northeast England. The facility builds 60 percent of Nissan vehicles sold in Europe and accounts for 20 percent of total British car production. Nissan employees 5,600 people in England.

"The queen acknowledges Ghosn efforts in improving the relationship between Japan and the U.K.," said Graham Fry, Britain's ambassador to Japan in a ceremony at the embassy in Tokyo.

Ghosn, a Brazilian-born French national, heads Renault SA, which owns 44.3 percent of Nissan.

Posted by at 6:55 AM under | Comments (0) | digg this | del.icio.us

China By the Numbers

Everyone knows China’s automobile industry is booming. The China Association of Automobile Manufacturers confirmed that in today’s report that showed China’s auto industry made a profit equivalent to $10 billion (U.S.) in 2006, up 46 percent from the previous year.

In contrast, Ford Motor Co. alone lost more than that; it lost $12.7 billion last year, Chrysler lost $1.4 billion and GM has yet to report earnings but lost $10.6 billion in 2005.

China car sales totaled 7.22 million vehicles in 2006, up 25 percent. Higher sales resulted in China overtaking Japan as the world’s second largest auto market. Sales should surpass 8 million this year, and analysts predict it will be the world’s largest market in another decade.

But buried in the CAAM’s glowing report China’s auto industry is the fact that the good fortunes don’t trickle down to car dealers, with 40 percent losing money.  China has 1,800 franchised auto dealers, of which 700 are unprofitable and of those 300 have been merged or edged out of the market. Another 20 percent are on the brink of red ink. The reason: fierce competition.

Not only is vehicle distribution ripe for consolidation, so too are auto companies. China has 1,500 registered auto producers. Of which fewer than 100 sold more than 10,000 vehicles. Many small, manufacturers sold only 300 to 500 cars, not enough to make a valid business case in any country.

Posted by at 5:47 AM under Analysis, Business, News | Comments (1) | digg this | del.icio.us

Hyundai Is Monday's Chrysler Suitor

If it's Monday, it must be Hyundai.

Friday the frenzied buzz was that General Motors was in talks to buy Chrysler. By Monday, South Korea’s Hyundai was rumored to be interested.

And by the end of the week, even more names are likely to emerge as suitors. One could be from China – maybe Chery or Shanghai Automotive Industries Corp. (SAIC) –  or some private equity firms from virtually anywhere.

Of the two automakers rumored to be interested in Chrysler so far, Hyundai makes more sense. Hyundai lacks much of what Chrysler has; GM already has too much of what Chrysler's got.

(Read more...)

Posted by at 5:37 AM under Analysis, Commentary, Companies, News, Rumors | Comments (3) | digg this | del.icio.us

Ford: Misses the Mark

Ford is not meeting the goals of its Way Forward turnaround plan and employees are losing confidence, according to an internal report released to employees and obtained by the Detroit News. (It’s a subject I’ll discuss live on CNBC this morning at 11 a.m. EST)

Ford missed its retail sales goal in January and expects to miss goals again for February and March. The company did hit its material cost reduction target for January, but will miss targets for February and March by a wide margin, the Detroit News reported Friday.

Ford did not say if it can still meet its goal to be profitable in its North American Automotive Operations in 2009.

(Read more...)

Posted by at 7:09 AM under Ford | Comments (1) | digg this | del.icio.us

GM-Chrysler: The Plot Thickens

General Motors and Chrysler Group apparently have been in discussions for months about GM supplying a large SUV to Chrysler and developing small cars together.

The news came to light only this week from anonymous sources cited by the Wall Street Journal and The New York Times, after Chrysler announced a restructuring plan that would eliminate 13,000 jobs, close a plant and reduce production capacity after its $1.4 billion operating loss in 2006.

Any deal on either front appears far from complete but would be simple, project-by-project collaborations, patterned after Chrysler’s arrangement to supply Volkswagen with a minivan to sell in North American with a VW badge. A wholesale purchase of Chrysler by GM is unlikely as is any equity swap.

(Read more...)

Posted by at 6:01 AM under Analysis, Chrysler, Companies, GM | Comments (0) | digg this | del.icio.us

Bumped from CNBC: I would have said …

That’s show biz! I was bumped from CNBC’s Money Talks segment today -- too much news happening to squeeze me in.

So here’s what I would have said if had I appeared and if I had been asked these made-up questions.

Interviewer: In which Big Three automaker would you invest now?

Krebs: I’d put my personal money on General Motors right now. I’m not alone. In a vote of confidence this week, Goldman Sachs raised its stake in GM, and Merrill Lynch raised GM’s rating to a “buy” from a “sell,” on the heels of some other firms boosting GM's rating as well.

(Read more...)

Posted by at 7:36 AM under Companies | Comments (2) | digg this | del.icio.us

Rumors of GM Buying Chrysler Are Just That

Rumors are running rampant since a German Web site reported General Motors is in talks to buy Chrysler, now that DaimlerChrysler has indicated its American arm is for sale.

But they are just that - rumors.

(Read more...)

Posted by at 5:39 AM under Companies, Rumors | Comments (0) | digg this | del.icio.us

Toyota: Tell Waltrip to Knock It Off

Toyota’s debut in the all-American racing series NASCAR has been marred by controversy, and Toyota needs to step in and demand a clean up.

In this week leading up to the start of Sunday’s Daytona 500 and Toyota’s premier in the series, NASCAR handed down some of the harshest penalties in history to the No. 55 Toyota Camry race team, owned and driven by Michael Waltrip.

Lab results came back on a foreign substance NASCAR officials found in the Camry race car during the tech inspection last weekend. Tests suggests it was an illegal additive.

Toyota needs to put the hammer down and tell the Waltrip organization to knock it off.

(Read more...)

Posted by at 5:14 AM under Companies | Comments (1) | digg this | del.icio.us

Teed Off: Mulally Golfs as Ford Burns

Five days before Ford announced its record $12.7 billion loss for 2006, Ford’s new CEO Alan Mulally was golfing in the pro-am of the PGA Tour’s Bob Hope Chrysler Classic near Palm Springs, Calif. Two weeks after the announcement, photographers snapped a shot of him golfing in the AT&T Pebble Beach National Pro-Am.

“That means Mulally has played in more PGA Tour events this year than Tiger Woods,” notes the Detroit Free Press, which ran the photos and a story.

(Read more...)

Posted by at 4:50 AM under Companies | Comments (3) | digg this | del.icio.us

CNBC: Betting on the Big Three

Catch me on CNBC's Money Talks at 10:45 a.m. live on Thursday, Feb. 15 talking. I'll be talking about the outlook for General Motors, Ford and Chrysler. And check back here for the follow-up.

Posted by at 3:04 PM under | Comments (0) | digg this | del.icio.us

Chrysler Dressed Up for Sale

DaimlerChrysler is applying lipstick to the sow, prettying her up to bring a good price at market.

Chrysler isn't a pig; it's absolutely a valuable property to someone – but apparently that someone isn't necessarily DaimlerChrysler.

DaimlerChrysler executives won't flat-out say Chrysler is for sale. No matter how they were asked the question at Wednesday's annual earnings briefing, they stuck to the script: "We do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler."

DaimlerChrysler CEO Dieter Zetsche refused to confirm – or deny – reports that DaimlerChrysler had hired an investment-banking firm to shop Chrysler.

That screams "for sale," and the recovery plan, which included the expected job cuts, plant closings and streamlining, is a way to dress up Chrysler to bring the best price on the open market.

(Read more...)

Posted by at 12:28 PM under Commentary, Companies | Comments (1) | digg this | del.icio.us

Chrysler Cuts Deeper than Forecasted

Chrysler today unveiled a plan to return it to profitability by 2008 while it also explores "further strategic options with partners."

The plan cuts 13,000 jobs through 2009 -- more than had been speculated and representing 16 percent of its workforce.

The plan also reduces Chrysler's production capacity by about 400,000 units -- the equivalent of two assembly plants but those reductions will be spread across a number of plants, only one of which will be completely closed.

As expected, the Newark, Del., assembly plant, which makes the full-size Dodge Durango SUV, will see production reduced this year and closed by 2009. Production will be cut this year at the Warren, Michigan, truck plant. Production will also be cut at the St., Louis, Missouri, assembly plant, which also makes trucks, in 2008.

Chrysler will invest $3 billion in new engines, transmissions and axles to support the introduction of more than 20 compeltely new models and 13 freshened vehicles between this year and 2009.

At the same time, Chrysler will shop for other partnerships beyond what it has announced. Already revealed is a partnership with Volkswagen to build a minivan in North America for VW here; its small-car development project with China's Chery; engine projects with Hyundai and Mitsubishi; and hybrid development with with General Motors and BMW in the U.S.

Acknowledging Chrysler will lose money again in 2007 as it did in 2006 (a reported $1.9 billion operating loss), Chrysler hopes the plan will return it to profitability by 2008 and result in $4.5 billion in financial improvements for a return on sales of 2.5 percent by 2009.

Posted by at 5:54 AM under Business, Companies, News | Comments (0) | digg this | del.icio.us

Chrysler: Open to All Options

DaimlerChrysler is open to anything, including "far-reaching strategic partnerships." The German automaker, under increasing pressure mostly in Germany to sell Chrysler Group, didn't seem to rule out the possibility.

After reporting a significant operating loss for its Chrysler Group, DaimlerChrysler says all options are on the table, including "far-reaching strategic partnerships." Rumored have been an alliance with Nissan-Renault or a Chinese automaker.

The German automaker's official stand is: "No option is being excluded in the interest of arriving at the best possible solution for the Chrysler Group and DaimlerChrysler as a whole."

Posted by at 5:26 AM under Analysis, Business, Companies, News | Comments (0) | digg this | del.icio.us

Chrysler Loses $1.4 billion

It was somewhat worse than expected: Chrysler Group reported an operating loss the equivalent of $1.4 billion (U.S.) in 2006, compared with an operating profit in 2005. DaimlerChrysler blamed Chrysler's loss on having the wrong product at the wrong time, intense price competition and cutbacks in production.

Despite Chrysler's loss, the parent company earned higher operating profits from the previous year, thanks to higher sales and profits form all of its other divisions including Mercedes-Benz, the truck group and financial services.

Posted by at 5:14 AM under Business, Companies, News | Comments (0) | digg this | del.icio.us

Survey Says: Fuel Economy No. 1

Apparently consumers have not forgotten last year’s skyrocketing gasoline prices.

Fuel economy ranked No. 1 among Michigan consumers in a survey conducted in late January by the Detroit Free Press and Local 4, the NBC affiliate.

Forty-three percent of respondents – male, female and in all age categories  – ranked fuel economy as No. 1 on their shopping list. They expressed concerns ranging from the environment to U.S. dependency on foreign oil.

(Read more...)

Posted by at 6:25 AM under Business, News | Comments (3) | digg this | del.icio.us

Cars Cost More

It comes as no shock to shoppers looking for a new car, but their hunch is now quantified: cars cost more than they have in some time.

The purchase of an average-priced new vehicle took 26.2 weeks of median family income in the fourth quarter of 2006, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. That 2.2 rise in the number of weeks of work required to purchase a new vehicle was the biggest one-quarter deterioration in affordability ever recorded by the index. The sharp drop in affordability in the fourth quarter reversed most of the improvements in affordability recorded over the prior three quarters.

Including finance charges, the total cost of buying an average-priced light vehicle was $29,400 in the fourth quarter, up three percent from a year ago. Median family income rose about four percent over those same four quarters.

(Read more...)

Posted by at 5:25 AM under Analysis | Comments (0) | digg this | del.icio.us

Chrysler's Not-So-Rosy Valentine

Wednesday morning, DaimlerChrysler announces its 2006 earnings — or lack thereof in the case of its Chrysler Group — and what it plans to do about the red ink.

DaimlerChrysler Dieter Zetsche and his supervisory board hold the company’s annual briefing in Auburn Hills, Michigan, instead of in Germany. They are expected to report a Chrysler loss of $1 billion or more for the year. The parent company is expected to report a profit, thanks to earnings from Mercedes-Benz.

As many as 11,000 Chrysler jobs likely are gone, plants will close and others will cut back production. The plan could also include a tighter link between Chrysler and Mercedes-Benz in codeveloping vehicles, increased parts sharing and joint production.

(Read more...)

Posted by at 4:36 AM under Companies, News | Comments (6) | digg this | del.icio.us

Toyota Extends Olive Branch to Detroit? Get Real!

The press positioned a speech delivered by Toyota Motor North America President Jim Press in Chicago last week as extending an olive branch to struggling Detroit automakers.

Oh stop it!

In his speech to the Economic Club of Chicago in conjunction with the Chicago Auto Show, Press called for greater cooperation and technology-sharing partnerships among automakers.

(Read more...)

Posted by at 7:25 AM under Analysis, Companies | Comments (1) | digg this | del.icio.us

Toyota: Another PR Black Eye?

A week before it is to make its debut at Daytona 500 this coming Sunday, Toyota found itself embroiled in controversy yesterday even before it hit the track for pole qualifying.

During tech inspection NASCAR officials found what they said appeared to be a foreign substance – an oily mix -- in the intake manifold of Michael Waltrip’s. No. 55 NAPA Auto Parts Toyota Camry. Race officials have sent it off to the lab for further analysis; results are expected Thursday.

(Read more...)

Posted by at 6:58 AM under Companies | Comments (0) | digg this | del.icio.us

Primedia Puts Buff Books On Sale

It came as no surprise when on Friday Primedia Inc. announced it wants to sell its auto enthusiast properties, including monthly magazines Motor Trend, Automobile, Hot Rod as well as Automotive.com, TV shows, special events and such.

Primedia overpaid and went deep into debt for the properties, which it says generate $500 million in sales a year. Buff books are in a slump, due to overall cutbacks and re-allocation of advertising especially by the automakers, aging demographics and competition from the Internet.

(Read more...)

Posted by at 6:33 AM under Analysis | Comments (0) | digg this | del.icio.us

GM Revamps Robot Ad

General Motors, succumbing to pressure from critics, says it will revamp its ad starring a depressed, suicidal robot that first aired on the Super Bowl. 

GM pulled the commercial off its Web site and its YouTube channel. The ad has yet to be shown on TV except for the Super Bowl. It had been scheduled for Sunday’s Grammy Awards but was pulled and replaced.

(Read more...)

Posted by at 6:06 AM under Companies | Comments (0) | digg this | del.icio.us

GM: Release of Financial Reports Delayed – Again

General Motors has delayed the release of financial statements for the full year and fourth quarter of 2006 -- again. GM was supposed to release results on Jan. 30, but it announced on Jan. 25 a delay, because it was restating results for four years due to an accounting error dating back to the end of 2001. In a statement on its Web site today, GM says work is continuing on its financial statements. No date was given for when 2006 results would be released.

Posted by at 5:22 AM under Companies, News | Comments (0) | digg this | del.icio.us

Toyota: Worried about Quality, Wages

Toyota is worried – about its quality and employee pay.

The skyrocketing number of recalls and customer service campaigns are a risk for Toyota, said Seeichi Sudo, in charge of Toyota’ North American engineering and manufacturing, in a behind-the-scenes presentation made at the Chicago Auto Show and obtained by the Detroit Free Press. Noting warranty claims are declining, Sudo reportedly blamed the product problems on design issues and heavy project workload.

Publicly at the Chicago show, Jim Press, president of Toyota Motor North America, said no other automakers comes close to Toyota in quality, despite its falters in 2005 with recalls. "It woke us up and scared us to the point of re-energizing our efforts on quality," he said.

The secret internal report further indicates Toyota intends to slow pay growth of factory workers by 2011. Rising U.S. wages and benefits are growing faster than the company’s profit margin. Toyota’s goal is to cut a projected $900-million increase in compensation by a third.

The report says Toyota should strive to align its hourly wages more closely with prevailing manufacturing pay in the states where plants reside and less with Detroit automaker wages. Toyota’s newest plants are in lower-paying southern states.

It’s a sure bet Toyota’s next plant, to be built soon, will be in the South.

And a message to Toyota’s competitors: don’t get complacent. Never underestimate Toyota. Count on Toyota to marshal all of its resources to fix its problems.
 

Posted by at 6:07 AM under Companies | Comments (2) | digg this | del.icio.us

Hybrids: Incentives, Voids and Recalls

Toyota announced this week incentives and an advertising campaign for its once-popular Prius hybrid. Sales flattened as Toyota geared up more production for the hybrid that had previously had potential buyers waiting in long lines. Toyota is offering no-interest financing and lease deals as low as $219 a month in some areas. Toyota also begins advertising Prius in local regions and going national with the campaign by April.

In contrast, Saturn Vue Green Line was just gaining momentum, and now General Motors is pulling the plug – temporarily. The 2007 version went on sale last fall as the least expensive hybrid on the market, costing only about $2,000 more than the gasoline model. Sales have been a steady 700 a month with little promotion and no incentives. The 2007 model goes out of production in March to make way for the redesigned 2008 model that starts assembly in September.

Meantime, Honda plans to recall 45,335 Civic Hybrid sedans worldwide to repair a voltage converter defect that could stop the car's engine, the company announced today. It plans to recall 7,219 of the vehicles sold in Japan and another 38,116 sold overseas, mostly in the U.S.

Despite the seeming turmoil in the hybrid segment at the moment, they are here to stay. When gas prices surely to rise again, interest in hybrids will be rekindled.

Posted by at 6:00 AM under Companies, Technology | Comments (1) | digg this | del.icio.us

GM: Depression, Suicide Unsuitable for Ads

General Motors is being criticized for its Super Bowl advertisement featuring a depressed robot that jumps off a bridge after an on-the-job mistake.

“It was inappropriate to use depression and suicide as a way to sell cars,” says Robert Gebbia, executive director of the American Foundation for Suicide Prevention.

Some feedback from Edmunds’ AutoObserver and CarSpace called the ad disturbing, but most said GM robot ad was their favorite Super Bowl car commercial.

Criticism over GM’s ad and Snickers’ now-pulled advertisement, featuring two men sharing a candy bar ending in a kiss, demonstrate how ultra-sensitive advertisers must be so as not to offend. That’s a Herculean task and could result in boring ads, a la Honda’s Super Bowl commercials, that viewers remote over or Tivo out. Maybe any kind of publicity – even the negative kind – is good publicity.

Posted by at 5:29 AM under Companies | Comments (0) | digg this | del.icio.us

Ford: Bolder Moves Required

Let’s hope Ford’s new CEO Alan Mulally has bolder moves up his sleeve than just the renaming of a few cars.

Ford announced this week at the Chicago Auto Show that it would re-name the Ford Five Hundred and Freestyle and the Mercury Montego. Their names change to the Taurus, Taurus X and Sable, respectively, with the introduction of the 2008 versions. Reviews were mixed on the move (see yesterday’s post).

Ford’s President of the Americas, in his keynote speech to open the show, vowed Ford’s “Bold Moves” advertising tagline is more than a tagline. It's the company's guiding light.

Prove it. Bring it on. Let’s see some bold, smart moves – something more than changing the names on some cars.

Posted by at 5:57 AM under Analysis, Commentary | Comments (6) | digg this | del.icio.us

Auto Suppliers: Do You See What I See?

A wise friend has seen a lot in his 75 years. When people ask his perspective on the transformation of the U.S. auto industry or changes he’s witnessed in his hometown of Detroit, he simply tells them: “Things change.” Plain and simple, things change. No judgment.

Indeed, the only certainties in life are death, taxes – and change. Change, while traumatic for some, is an opportunity for others.

That’s apparently what some brave, optimistic investors outside the auto industry see in the downtrodden auto parts business that many inside the industry don’t see.

Namely, they see undervalued businesses with upside potential – and their chance to make a buck.

Billionaire investor Carl Icahn just this week bid $2.75 billion ($36/share) for the Detroit-based Lear Corp., an auto interiors and seat supplier.

His bid comes as a number of auto suppliers, most notably Delphi Corp., are in Chapter 11, with more bankruptcies predicted. Suppliers have been socked by lower sales and parts needs from Ford, General Motors and Chrysler as well as by competition from low-cost countries. But Icahan sees opportunity. He's also invested in Dana Corp., now in bankruptcy, and Federal-Mogul Corp., about to emerge from a long and costly bankruptcy proceeding.

Already the largest investor in Lear, Icahn is thought to be either bidding to own the entire automotive supplier or to spur competing offers. Icahn told the Wall Street Journal the beaten-down share prices of auto suppliers like Lear have made them attractive values. "What's exciting is when you buy them when no one wants them," Icahn told the paper.

Lear’s stock rose following Icahn’s bid, but its third-largest shareholder, fund manager Pzena Investment Management LLC, called for company directors to oppose the bid, saying it was too low in view of the company’s long-term value.

Other private-equity firms and hedge funds as well as financier Wilbur Ross have been buying into auto supply companies over the past two years. Some existing suppliers are looking to merge or buy up failing companies. Richard Dauch, CEO of American Axle & Manufacturing Holdings Inc., told trade journal Automotive News he’s “prepared to lead as a consolidator” of weak and distressed competitors.

Dana Johnson, chief economist for Michigan’s Comerica Bank, reinforced what these investors see. Johnson predicts a bottoming out of the auto and auto-supplier downslide by late this year. 

It takes a lot of guts to make these bold moves, but the auto supplier business is here to stay – it’ll just change.

Posted by at 5:33 AM under Companies | Comments (1) | digg this | del.icio.us

Ford Taurus AND Mercury Sable Make a Comeback

Ford made it official: it is bringing back the Ford Taurus and the Mercury Sable names.

Ford announced at the Chicago Auto Show today that the Ford Five Hundred, revamped for the 2008 model year, becomes the Taurus; the revised Mercury Montego will be renamed the Sable. The Ford Freestyle crossover, also freshened for 2008, will be called the Ford Taurus X.

Ford's President of the America's admits Ford made a mistake ditching the Taurus and Sable names, which have such tremendous equity.

Fields says only four in 10 people recognize the Five Hundred name; only two in 10 know what a Montego is.

In contrast, Taurus is recognized by 80 percent of consumers. Ford sold 7 million Tauruses in 20 years, with more than 3.5 million still on the roads today. "It's the third strongest nameplate in the Ford lineup, behind the F-Series and Mustang," said Fields.

Fields said it would take millions of dollars and years to build the Five Hundred and Montego names to the level of the Taurus and Sable, with no guaranteed success.

Still, there's no guaranteed success in changing names either.

"A nameplate can be an important and valuable marketing tool, especially considering the brand equity that a particular name can evoke," says Edmunds.com analyst George Kang. "On the other hand, a manufacturer must also consider the baggage that a nameplate can bring. The Taurus nameplate has more awareness for today’s consumer than the Five Hundred nameplate, but Ford also has to recognize that while the Taurus was once the leader in the midsize sedan and a leader in styling in its earlier life cycle, its later life cycle was associated with it being the most common vehicle in the rental car fleet.  Therefore, the Taurus may evoke mixed feelings more than positive ones.”

Indeed, the question is will consumers associate the new Taurus with the original trend-setting Taurus of the 1980s -- or will they remember the more recent Taurus, in which Ford invested virtually nothing and allowed to become nothing more than a rental car?

"The Taurus was one of the great triumphs of the Ford Motor Co," said William Jeanes, co-author of a book on automotive brands called "Branding Iron. "But the Taurus brand was severely devalued in its later years. If Ford can associate the new Taurus with the original, changing the name may work -- with the emphasis on may."

And will Taurus owners who shop the new Taurus be socked with sticker shock? Edmunds.com analyst Alex Rosten notes that the previous Taurus sold for well under $20,0000, at the bottom of the midsize segment whereas the Five Hundred, a full-size sedan, starts much higher at $23,500. Fields said pricing will be announced later.

Ford also apparently has ditched its naming system whereby cars (except for Mustang) start with an F and sport utilities with an E.

Fields said lessons were learned and pledged the automaker going forward will invest in product development and establishing individual nameplates, not letting them languish on the vine as it did the Taurus and Sable.

Posted by at 8:17 AM under Companies | Comments (0) | digg this | del.icio.us

Edmunds: GM Incentives Could Come Back

General Motors' admission that it may have overcorrected in cutting discounts in January could result in the automaker bringing back incentives on select models, Edmunds.com's analysis suggests.

"GM will probably re-examine its incentive programs going forward, especially in the competitive segments where it doesn't have new products," says Edmunds.com analyst Jesse Toprak. "We do not expect to see incentives on GM's new full-size pickup trucks, but GM might raise incentives on midsize and large SUVS and certain car segments despite its value-pricing strategy."

GM reduced incentives to their lowest point since April 2002, according to Edmunds.com figures. GM spent 17% less in January per vehicle sold than it did in January 2006, in part, due to GM's value-pricing strategy but also because GM had more new models this January than last. Newer models naturally have less, if any, incentives.

"GM probably suffered because its prices were not competitive," says Toprak. "Chrysler, Ford and Toyota all increased incentive spending in January, which caused their products to fare better in price comparisons."

Still, Toyota had higher sales while Chrysler, Ford and GM had lower sales in January.

Though GM North America chief Troy Clarke told reporters over the weekend that GM may have "overcorrected" discounts in January, he emphasized GM intends to stay the course on cutting fleet sales, part of the reason January sales were lower. GM plans to cut fleet sales by at least 100,000 vehicles this year and another 100,000 vehicles next year. By 2008, GM's fleet sales should be at 270,000 vehicles annually from 2005 levels of 700,000.

Posted by at 6:54 PM under Companies | Comments (0) | digg this | del.icio.us

Name Game: Ford Taurus Returns

Ford CEO Alan Mulally has hinted for weeks that the Taurus name was too significant to discard. Now, it apparently is semi-official: the Ford Taurus will return -- at least in name.

Though Ford won't confirm it, Dow Jones Newswires reports this morning that Ford will announce at the Chicago Auto Show tomorrow that the full-size Five Hundred sedan will become the new Taurus.

Time will tell if that's a wise move. Indeed, the first Taurus represented trend-setting design and proved a smashing success. Its re-make, however, was disappointing in design and sales. In its old age, the Taurus withered on the vine as Ford failed to invest money to keep it fresh. Ford ultimately banished the Taurus to rental fleets before finally putting it out of its misery last year.

Ford is counting heavily on the sedan previously known as Five Hundred as well as its virtual twin, the Mercury Montego, and the car-based Freestyle crossover (which Ford almost ditched a couple years after its introduction), to boost sales and fill the void left by the fallen Taurus.

All three are freshened mildly inside and out with upgraded engines and safety features added for the 2008 model year. The restyled Taurus, a.k.a. Five Hundred, was revealed at the Detroit show in January; the Montego and Freestyle are unveiled this week in Chicago. The 2008 Taurus/Five Hundred and Montego go on sale in June; the Freestyle follows shortly after.

The three cars have failed to live up to early expectations, which were set at 250,000 vehicles combined a year in 2004, which Ford dubbed "The Year of the Car." Last year, Ford sold about 165,000 of the three.

It's hard to see that a name change will make the difference based on history.

Ford is notorious for midstream name changing. The Ford Windstar minivan became the Freestar, though not much more than its name changed. The name change did nothing for sales, and Ford now has decided to abandon the minivan business completely.

At Lincoln, the difference is less likely the name than the vehicle itself. The Zephyr name lasted a year before it was replaced by MKZ, which added a more powerful engine that transformed the sedan. Lincoln initially insisted it be pronounced Mark Z but now has settled on M-K-Z. And in keeping with the letter-naming scheme, the Lincoln Aviator became the MKX, also off to a more promising start than the Aviator though that has more to do with the product itself than name.

Posted by at 6:37 AM under Companies | Comments (0) | digg this | del.icio.us

Dodge Ram: Not To Be Left Out ...

Dodge gets the final word -- hopefully -- on the Super Bowl.

If you stayed tuned in after the game Sunday night, you may have caught Chrysler's new 30-second spot for the 2007 Dodge Ram 1500 pickup. The ad shows the Blue Bomber, a Rock'em Sock'em robot, boxing the side of the truck. Dodge has been using the robots in its commercials since fall. The new spot focuses on the Ram's product features, like its Hemi engine, steel frame an dload capacity.

Indeed, Super Bowl turned out to be a battle of the trucks as Toyota kicked off its Tundra campaign, Ford its Super Duty commercials, and General Motors sprinkled in its Chevrolet Silverado spots.

Focus on product capability seems to be the trend. Toyota's ads boasted Tundra's acceleration, braking, towing and load-carrying capacity. Ford's Super Duty commercial showed every bit and piece of the truck floating in mid-air, finally coming together as a fully-assembled truck. Then Dodge demonstrated its ruggedness with its robot boxing match. Chevrolet, for now, appears to be sticking with its emotional Americana message.

Posted by at 6:17 AM under Companies | Comments (0) | digg this | del.icio.us

GM Warranty Could Help Perception, Sales

General Motors' new extended warranty on used vehicles similar to the one offered on its new models could boost GM sales, improve its resale values and increase consumer confidence in GM vehicles, say analysts for Edmunds.com.

The expanded warranty covers GM Certified Used Vehicles from the 2002 model year on. The fully transferable, limited warranty covers the powertrain for five years/100,000 miles with no deductible. This fall, GM announced a similar warranty on its new 2007 models. The extended warranty is intended to impress upon consumers that GM's quality has improved and provide them with peace of mind to buy GM vehicles.

While GM boasts the limited powertrain warranty covers more than 900 components, Alex Rosten, Edmunds.com's manager of pricing and market analysis, notes the actual cost of the warranty to GM is negligible. "The extended warranty applies primarily to the drivetrain, traditionally the most reliable components on GM vehicles," he says. "In essence, they are backing up parts that they know are most likely not to fail within the five-year/100,000-mile period."

Still, Rosten notes, the new warranty makes GM much more competitive and should help increase sales as well as provide a slight boost to GM's resale values.

Edmunds.com analyst Jesse Toprak adds GM's actual product quality has been coming very close to that of many of the highly regarded imports in recent years. "But," he says, "the company's perceived quality is nowhere near reality for most consumers. That is a significant issue for GM. This extended warranty will help close the gap between perception and reality, and create confidence for consumers considering GM purchases."

Posted by at 11:05 AM under Companies | Comments (2) | digg this | del.icio.us

Edmunds' Audience Picks Favorite Super Bowl Ads

Never mind brain-wave analysis. Edmunds' CarSpace audience rated, ranted about and praised the automobile advertisements aired on Sunday's Super Bowl.

In a nutshell, here's what they thought of them:

Hands-down favorite: General Motors ad boasting the automaker's improved quality and five-year/100,000-mile warranty. The ad starred a robot sent packing from the factory after a mishap that caused the assembly line to stop. To the tune "All By Myself," the sad robot jumps off a bridge in despair -- though it wakes to find it is a dream.

Funny: The Chevrolet HHR ad created by student Katelyn Cravv, University of Wisconsin at Milwaukee. She won the Chevy Super Bowl College Ad Challenge. Her ad showed men of all shapes, sizes and ages ripping off their shirts in their excitement over the HHR. (One viewer joked she wouldn't buy an HHR if it was going to attract some of the unattractive characters shown in the ad!)

Mixed signals: The Chevrolet ad featuring songs about Chevrolet vehicles. Viewers liked the music but didn't recognize some of the celebrities and thought the ad's message was unclear.

Awe-struck: The Toyota ads featuring the Tundra driving on a giant seesaw and screeching to a halt at the mountain's edge. Viewers said they'd trade their lounge chairs for the driver's seat to do those stunts.

Clever: The Ford Super Duty truck ads featuring the nuts and bolts coming together to build the pickup.

Lackluster and empty: The Honda ads, especially one for the CR-V. "Nothing makes me want to check out the CR-V," said one writer.

Posted by at 10:50 AM under Analysis, GM, Toyota | Comments (1) | digg this | del.icio.us

St. Valentine's Day Massacre at Chrysler

The Detroit media has dubbed Feb. 14 as the St. Valentine’s Day Massacre at Chrysler Group.

Word is Chrysler will announce its restructuring plan on that day. The plan may cut as many as 10,000 jobs and close three plants. The announcement comes at DaimlerChrysler’s annual press briefing, typically held in its corporate home of Stuttgart, Germany, but hosted by Chrysler headquarters in Detroit this year.

DaimlerChrysler has been working on a restructuring plan for the Chrysler since October when Chrysler announced an operating loss of $1.5 billion.

No word on if Chrysler Chairman and CEO Tom LaSorda, who publicly admitted he moved too slowly in cutting production in line with slower sales, will be out of a job. Now is it clear if DaimlerChrysler, as rumored, is seriously considering a sell-off of its American arm.

Posted by at 6:11 AM under Companies, News | Comments (0) | digg this | del.icio.us

Your Brain on Super Bowl Ads

Water cooler banter today likely will be as much about Super Bowl advertisements as the game itself – what worked and what didn’t. The results will be unscientific, but researchers are now trying to apply brain science to definitively determine what ads are most likely to generate sales.

At UCLA, researchers put special glasses on subjects to view Sunday’s Super Bowl ads and slid them into Magnetic Resonance Imaging (MRI) machines. The researchers charted their subjects’ brain waves and showed what areas of the brain, if any, lit up during the ads.

The computer-generated Coke ads ranked highest, according to results revealed on NBC’s Today Show. The consumer-generated ad for Fritos, developed for free by a bunch of twenty-somethings, scored well also. (No specific mention of the student-generated Chevrolet ad featuring the bare-chested guys going ga-ga over the car.) The Snickers’ commercial showing two male mechanics sharing a candy bar, concluding in kiss, made subjects anxious. Honda’s ad rated dead last, producing a graph that looked as if the patient flatlined.

Trade journal Automotive News recently ran an article on neurological marketing done by Sands Research of El Paso, Texas. The firm’s founder, Steve Sands, is a brain researcher who developed ways to measure brain-wave responses to TV spots. He has worked for Coors and Burger King and pursuing automotive business.

Subjects don what looks like a swim cap with holes through which electrodes were attached to the skull to monitor brain-wave responses to a variety of automobile ads. Sands found the controversial Volkswagen crash commercials stimulate senses but perhaps not in a good way. Chrysler’s Dr. Z ads, dumped due to their ineffectiveness, flatlined like the Honda Super Bowl ads.

With billions of dollars at stake, automotive advertisers, who readily admit half of their advertising doesn’t work but they don’t know which half, may well try anything to get the most from their dollar. However, the water cooler talk is likely to show the same results as the elaborate medical research – and it’s free.

Posted by at 5:37 AM under News | Comments (0) | digg this | del.icio.us

Truck Wars: Toyota Challenges Detroit Loyalty

Just how loyal are American truck buyers really?

Toyota finds out this week when its 2007 Texas-assembled Tundra, the first credible challenger to Detroit-produced full-size pickup trucks, begins arriving in dealerships nationwide.

(Read more...)

Posted by at 10:32 AM under Featured | Comments (7) | digg this | del.icio.us

UAW Loses Pay Edge

High pay and rich benefits have long been a bargaining chip for the United Auto Workers to lure new members. But non-unionized assembly plants owned by foreign automakers are chipping away at that chip.

The Detroit Free Press reports that the UAW is losing its edge in pay. For the first time, according to the Center for Automotive Research in Ann Arbor, Mich., and the newspaper’s numbers, a non-union, foreign-owned plant – Toyota’s largest U.S. plant in Georgetown, Ky. – paid bonuses that pushed the average hourly pay above that of the average hourly UAW workers. Workers at the Toyota plant received bonuses of $6,000 to $8,000, putting the average hourly pay to $30 an hour. The average for UAW workers is $27 an hour. Most did not receive profit-sharing checks last year, and most saw cutbacks in overtime as automakers scalped back production in line with lower sales.

While the automakers won’t confirm pay rates, it is believed wages at Toyota’s other plants as well as at Honda and Nissan plants in the U.S. are comparable to those at Toyota’s Kentucky plant. Less clear are the value and costs of benefits such as pensions and health care as part of the total compensation package.

Still, Detroit automakers have been negotiating with the UAW – successfully in some cases – to change benefits as well. And so-called legacy costs – health care and pensions – will be the center piece of this year’s UAW contract talks between GM, Ford and Chrysler. The current national contract expires in September.

Posted by at 6:21 AM under News | Comments (0) | digg this | del.icio.us

Ford Forget Toyota!

Forget Toyota! New Ford CEO Alan Mulally recently visited Japan to try to learn Toyota’s secrets. He doesn’t need to leave his office for help saving the ailing automaker. He needs to look no further than Edmunds.com for advice – and it’s free!

Readers responded – some in excruciating detail – to a column entitled “Ford’s Alan Mulally: The Man to Watch in 2007,” first posted on Edmunds’ InsideLine.com.

The responses demonstrate that goodwill for Ford abounds. “It breaks my heart to see a once-great American icon slide into the doldrums of mediocrity,” starts one response.

Rage is similarly plentiful -- rate over management seemingly frittering away business.

Pitiful marketing, even of Ford’s best cars and trucks, most rankles readers. Ford cars and trucks themselves are dull and out-of-step with the times, other said.

One, a former Ford manager and self-described “passionate car guy,” shared his “Top 7 Thing Alan Mulally Should Do” – a list he said he g