Retired GM Chairman Roger B. Smith Dies at Age 82

By Michelle Krebs

Roger B. Smith, the General Motors chairman who led the world’s largest automaker in the 1980s through a period of significant change, died in Detroit on Thursday after a brief illness. He was 82.

Smith served for only a decade as GM chairman, retiring on July 31, 1990, but, for better or worse, Smith changed the world’s largest manufacturing corporation more than any chairman since Alfred P. Sloan Jr., who chaired GM from 1937 to 1956 and had defined modern-day GM to that point.

And the change was tumultuous -– forced by external factors and brought about by Smith himself.

Roger Smith's name became a household one with the satirical so-called documentary about the fall of GM and the demise of Flint, Michigan, a GM town, in Michael Moore's first major film, Roger & Me.

Smith is credited -- or blamed -- with: dismantling the corporation and eliminating some of its sacred institutions, like Fisher Body; reconstructing the corporation in a new way; forming a joint manufacturing venture with now arch-rival Toyota to build small cars; introducing GM's first front-wheel-drive cars to compete with the rising Japanese makes; creating the Saturn division; and adding new entities with the purchase of Hughes Aircraft and H. Ross Perot's Electronic Data Systems.

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Porsche Boss Collects Giant Paycheck

By Bill Visnic

It will be a merry Christmas this year –- and for many Christmases future –- for Porsche AG CEO Wendelin Wiedeking, as the Financial Times cites sources within Porsche AG as estimating Wiedeking last year made between €60 million to €70 million -'– a thundering $88.5 million to $103.4 million based on current exchange rates.

The figure is gaudy by almost any measure short of Wall Street compensation, but particularly in the perspective of typical European (and German) executive pay. The FT indicates the most extravagant 2006 pay for a German executive was €13 million (slightly more than $19 million at today’s exchange rates) by the head of Deutsche Bank.

Wiedeking’s bulging pay packet reminds that 2007 is unlikely to be as remunerative for most automaker executives in Detroit, a region with a long-earned reputation for outsized pay. But times are hard in Detroit, and many executives now have either taken symbolic cuts or have large portions of their compensation tied to company performance.

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GM Design Expands to India and Possibly Dubai

General Motors opened a full-fledged design studio in India this week and is considering a design studio  in Dubai.

GM officially opened GM India Design Studio in Bangalore this week, and GM executives have been on recent scouting missions to Dubai for a possibly design studio focused on luxury vehicles there.

GM Design Chief Ed Welburn told AutoObserver he wants GM’s designers in India to become more involved with actually designing vehicles for their home market, one of the world’s fastest-growing car markets. The India studio will help with designs of future products for global markets, mostly small cars.

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Survey Says: Young People Prefer Imports

Whether you prefer a domestic vehicle or an import depends largely on your age, a new study finds. The younger you are, the more likely you are to buy an import and avoid a domestic.

That’s the primary finding of the J.D. Power and Associates 2007 Avoider Study released Thursday. The survey looks at why consumers don’t consider particular models when car shopping.

Other interesting tidbits suggest the domestic automakers have a lot more work to do in the perception of their vehicles.

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Testing the UAW Contract: Ford Looks to Boost Escape, Mariner Production

Ford has few hits these days, but among them are the Ford Escape and Mercury Mariner  and their hybrid versions. Dealers have been screaming for more of them for months, since the redesign for the 2008 model year.

Now Ford  is looking at ways to crank up production at its Kansas City, Mo. Assembly plant.

The situation marks the first test case of the new UAW contract, which tried to address the need of automakers to be flexible to respond to increases and drop-offs in sales demand.

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GM Takes OnStar to China

SHANGHAI -- Anyone who has visited – or worse – driven in China knows how difficult it is to find one’s way around -– even bus drivers and cabbies get lost -- and how dangerous driving there is. China has one of the world’s highest rates of fatalities from car accidents.

So General Motors’ announcement that it will take OnStar to China should be a welcome one.

The OnStar services that will be offered initially in China and likely other Asian markets eventually are similar to those long offered in the U.S. and Canada. They include automatic crash notification, roadside assistance, remote door unlock, hands-free calling, vehicle diagnostics and turn-by-turn navigation. 

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Ford Explorer Settlement: Not a Bad Deal

SACRAMENTO, Calif. -- Ford’s settlement of class-action lawsuits filed in California related to Explorer rollovers doesn’t sound like a bad deal for the automaker at all.

For starters, it marks the last of the outstanding lawsuits against Ford stemming from the Explorer rollovers.

And the settlement – excluding what must be astronomical legal fees – doesn’t sound that costly. It allows vehicle owners to apply for $500 vouchers to buy new Explorers or $300 vouchers to buy other Ford or Lincoln Mercury products. That’s less than some incentives Ford has offered.

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Saab Turbo X Intro: A Precursor to a Big Year

BOSTON –- General Motors used the New England International Auto Show in Boston this week for the North American unveiling of the Saab Turbo X, a limited edition sporty, turbocharged version of the 9-3 and available as a sedan or Combi wagon.

Boston is an appropriate place to introduce any Saab since 40 percent of Saab’s total U.S. sales are in the Northeast, Saab started its U.S. business more than 50 years ago in Boston and Steve Shannon, general manager of Saab Automobile USA, happens to be a native Bostonian.

Bryan Nesbitt, GM vice president of North American design, said the Turbo X was just the beginning and hinted that 2008 will be a significant year for Saab.

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Bose Shops Suspension System to Automakers in '08

BOSTON – After 27 years and $100 million in investment, Bose Corp. is ready to fit its innovative sound-wave suspension system into an upcoming luxury car – if it can find an automaker willing to joint venture with the Boston-based maker of premium audio systems.

Dr. Amar Bose, said in an interview with AutoObserver.com Tuesday at the New England International Auto Show, that the company would be going out to talk with automakers in the coming year about doing a joint venture to put the innovative suspension system into future cars. Bose said likely candidates for the system will be top-of-the-line luxury cars that are being newly developed.

Bose has been personally interested in developing a new kind of suspension system since the 1950s, one that would deliver the passenger comfort of a luxury sedan with the vehicle control of a sports car. His privately held company has been working on such a system for 27 years, investing $100 million.

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November Auto Sales: Compact Sales Climb in Otherwise Slow Market

SANTA MONICA -- This month's new vehicle sales (fleet and retail) are expected to be 1.2 million units, virtually unchanged from November 2006 and 2.5 percent below October 2007, according to Edmunds.com.

"Given the industry trends, we have adjusted our year-end forecast," stated Jesse Toprak, Edmunds’ executive director of Industry Analysis. “We now expect 2007 sales to total 16.13 million units, and predict that no more than 16 million cars and light trucks will be sold in 2008."

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Vector: Super-Car Status Elusive

By Dale Buss

LOS ANGLES -- Judging by where Vector Automotive’s booth was placed at the recently completed Los Angeles Auto Show, Gerald Wiegert has a long and arduous path ahead of him before he achieves the prominence he desires for Vector as a super-car brand.

The long-time automobile entrepreneur and vehicle designer was stuck with his prototype Vector WX-8 Hyper-Tech Performance Vehicle in an alcove outside the Los Angeles Convention Center’s small Concourse Hall, where rich guys’ cars typically are displayed. Inside the hall itself were global ultra-luxury paragons including Ferrari, Lotus, Rolls-Royce, Lamborghini, Aston Martin and Bentley.

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Chrysler’s Wahl-Meyer Makes “50 Women To Watch” List

The Wall Street Journal published its 2007 50 Women To Watch list. Only one can be considered strictly an automotive executive, that being Chrysler’s Deborah Wahl-Meyer.

Ranking No. 39 on the list, Wahl-Meyer left her post as head of marketing post of Toyota’s Lexus last summer to become Chrysler’s chief marketing officer. The newspaper points out that the 44-year-old Detroit native, who worked for Ford before joining Toyota, is among a string of executives to join Chrysler as it struggles to make a comeback.

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Mazda Design Challenge: Cars of the Echo Boomers

By Jane Nakagawa

If you walked up to the Mazda stand at the 2007 Los Angeles Auto Show, you didn’t see a concept car. Instead you saw a big lump of modeling clay with a couple of designers from Mazda R&D busily shaving away everything that doesn't look like a car.

As a promotion for this year's show, Franz von Holzhausen, director of design, Mazda North American Operations, created a design contest on Facebook. Participants were invited to submit a 150-word description of a 2018 Mazda3. Finalists worked with the Mazda design team to develop renderings of the concepts, then the Facebook community chose the winner.

Mallory McMorrow, a 21-year-old design student at the university of Notre Dame, won the contest and her concept was turned into a full-size clay model right on the Mazda stand at the L.A. show.

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Ballard-Ford-Daimler Venture Speeds Fuel Cell Progress

By Kate McLeod

SHANGHAI, CHINA -- Whiz-bang press conferences on fuel cell technology have been part of the auto show circuit for at least a decade.  Journalists have been driving fuel cell cars around parking lots in New York, LA and Chicago for years.  Interesting enough, but where’s the beef?  When is the public going to be offered a car that is powered by hydrogen?

In a pairing of seemingly strange bedfellows, Daimler and Ford have now formed a joint venture to become more involved in the automotive fuel cell business of Vancouver, Canada-based Ballard Power Systems.

The move suggests a fuel cell car just might be getting closer to the showroom.

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Bankers Find No Takers for Chrysler Debt

Bankers for Chrysler failed to sell $4 billion of loans that backed the purchase of the automaker by Cerberus Capital Management LP, investors briefed on the decision told various media outlets. Demand for high-yield, high-risk loans has dried up, they say.

This is the second time Chrysler’s bankers have failed to sell Chrysler debt. They were unable to find investors for $10 billion of loans in August for the original acquisition of Cerberus’ 80.1% purchase of Chrysler from Daimler.

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Cadillac CTS Wins Motor Trend Car of the Year

Motor Trend magazine selected the 2008 Cadillac CTS as its car of the year. Cadillac won the award in the magazine’s inaugural year of 1949 with the DeVille.

The completely redesigned CTS is off to a blistering sales start. CTS sales soared by 75 percent in October over October a year ago for the sedan's best-ever sales month. At the end of October, inventories of the CTS stood at a scant 20-day supply, suggesting it is selling as fast as it arrives at the dealership.

Cadillac needs a boost. Its sales have been in a slump. For the calendar year to date, Cadillac sales are off about 6 percent. For October alone, the CTS pushed total Cadillac sales up nearly 20 percent over the year-ago period.

Cadillac was a highlight, being up nearly 20 percent from a year ago, though the luxury make is down 5.8 percent for the calendar year to date. Cadillac’s strength came from the newly launched CTS, which saw sales rise 74.5 percent for the sedan's best-ever sales month. Paul Ballew, GM’s top analyst, said CTS sales could best be described as "blistering." GM has a scant 20-day supply of the CTS since they sell as fast as they arrive at the dealership

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Oil Milestone Shy of $100 Barrel by Only Pennies

The dreaded milestone of $100 a barrel is within pennies.

Crude oil prices closed at an all-time high of $99.29 a barrel in Asian trading Wednesday, blamed on the weakening U.S. economy, the plummeting U.S. dollar and fears of a further drop in oil inventories.

Meantime, the Federal Reserve predicted Tuesday U.S. economic growth will slow in 2008, possibly leading to the weakest period since the 2001 recession and possibly prompting another interest rate cut.

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General Motors’ “Cowboy” Rides Off into the Sunset

Few true characters have filled the automotive industry’s top ranks, but John Rock, the former General Motors executive who put GMC on a growth path and later tried to resuscitate Oldsmobile, was one of those.

Rock, 71, died Friday after a brief illness at his ranch in South Dakota, where he’d grown up, the son of a Chevrolet dealer.

A hulk of a man, Rock strode into a room like a cowboy, commanding everyone’s attention by his very presence. His talk was as straight as a cowboy’s shot -- and every bit as salty.

Anyone who knew Rock, in fact, immediately recounts the famous John Rock angry cowboy story.

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India’s Mahindra & Mahindra: Seeking a U.S. Engineering Firm

Indian automaker Mahindra & Mahindra Ltd. is eyeing the acquisition of U.S. companies involved in automotive engineering services and aerospace engineering, company official told reporters Monday, according to Dow Jones Newswire.

Company President Hemant Luthra said Mahindra has identified potential target companies and is currently in talks with them. He wouldn’t name them, so the guessing game starts.

Mahindra & Mahindra, like its prime competitor, Tata Motors, in India has ambitious global plans. Both companies are said to be among the frontrunners to purchase Jaguar and Land Rover from Ford. Mahindra & Mahindra has sites set on selling cars in the U.S.

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Ford Verve China Style

Ford unveiled a second version of its Verve concept, based on a B-segment global platform, at China’s last auto show of the year in Guangzhou Monday.

Signaling the importance of Asia in Ford’s future, this Verve is a four-door notchback aimed at the Chinese market.

Ford revealed its intention for a global B-segment platform at the Frankfurt auto show in September when it unveiled the Euro-edition Verve three-door hatchback. Ford will introduce the next installment of Verve at the Detroit auto show when it unveils the U.S. version.

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Mazda2: More Accolades but Still No U.S. Plans

The Mazda Demio, aka, Mazda2, won yet another major accolade: It was the winner of Japan’s Car of the Year.

Despite the accolades and shifting tastes of Americans for fuel sippers, with the sizzling sales of the Mazda3 as evidence, the Mazda2 still isn’t headed for the U.S. anytime soon, the automaker said.

We said it before and we’ll say it again: a missed opportunity.

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Big Three-UAW Contracts Even the Playing Field -- Eventually

By Joseph Szczesny

After nearly four months of earnest talk, surprise strikes at General Motors and Chrysler LLC and some creative wheeling and dealing, American carmakers finally have new labor agreements -- ones that almost wipe out the cost advantage enjoyed by Asian rivals operating in the U.S. without union contracts.

Sean McAlinden, vice president of research at the Center for Automotive Research (CAR) in Ann Arbor, Mich., said it  will take U.S. carmakers two to four years to reap the benefits of all the changes embedded in their new contracts with the United Auto Workers.

But the cost savings are genuine and substantial, he said.

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VW: Backpedaling on U.S. Plant Comment. Déjà Vu.

Volkswagen of America posted a short press release on its media Web site, backpedaling on what a company official reportedly told a reporter at the Los Angeles Auto Show about its plans for the construction of a U.S. assembly plant.

Déjà vu.

The German automaker did similar backpedaling when one of its executives revealed plans to move its headquarters out of Detroit. And guess what? VW is moving out of Detroit.

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2007 Los Angeles Auto Show: Robocar 2057

By Jane Nakagawa

Southern California, long hailed as the epicenter of automotive creativity and consumer trends, is home to the world’s largest concentration of automotive design studios, and there are 15 such operations for the major car manufacturers alone.

The Los Angeles Auto Show, which opens to the public  Nov. 17 and extends to Nov. 25,  takes advantage of this regional talent by playing host to an annual conference of automobile design professionals called "Design Los Angeles."

In its fourth year and gaining popularity, the conference is expected to gather over 500 participants. The centerpiece of the conference is the Design Challenge, in which teams compete to create the most innovative concept within a given theme. This year’s theme, Robocar 2057, attracted entries from Audi, General Motors, Honda, Mazda, Mercedes-Benz, Nissan, Toyota and Volkswagen.

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Ford Resigned to 14-15 Percent Market Share

By Bill Visnic

DETROIT –- In a conference call to summarize key points of its new four-year contract with the United Auto Workers (UAW) union ratified Wednesday, Ford Motor Co. officials say their U.S. market-share target for the foreseeable future is in the 14-15 percent range, reflecting the new realities of a company that is working feverishly to pare itself to a profitable size.

Ford’s U.S. market share as recently as 2002 exceeded 20 percent. Its share in October was 15.8 percent of the U.S. market, trailing the industry leading 25 percent of General Motors Corp., closely tracking that of Toyota Motor Corp.’s 16.1 percent and easily exceeding Detroit rival Chrysler LLC’s 11.8 percent of the market in October, according to Edmunds.com's calculations.

But Ford’s continuing market-share decline and an ongoing slowdown of the U.S. economy are a double hit that it appears Ford’s cost-saving new labor agreement will not immediately overcome.

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China’s Chery and Chrysler: “Conceptualizing” Small Car Options

China’s Chery and Chrysler are in the “conceptualization” phase, considering options for a small car to be built by the Chinese automaker and sold by Chrysler in North America and Europe.

But no timetable is set for the debut of the car, which was originally to go on sale in the first quarter of 2008.

Zhang Lin, general manager of Chery International, said at a China automotive conference sponsored by J.D. Power and Associates in Detroit the “conceptualization” phase could take a couple of years as the companies consider various options.

Zhang, who got his doctorate in engineering from the University of Michigan and worked for Chrysler in manufacturing engineering from 1995 to 2003 before joining Chery, said the two companies would use a current Chery platform for a small car and apply a “top hat” –- or “top hats” for specific markets.

But more than the timetable seems out of kilter.

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VW To Build U.S. Plant; Location Selected in 2008

As anticipated, Volkswagen plans to build an assembly plant in the United States.

Stefan Jacoby, CEO of Volkswagen of America, tells reporters at the Los Angeles auto show that the German automaker will announce where it will build the plant in the first half of 2008. A U.S. assembly plant is part of VW's plant to increase sales and image in the U.S. as well as offset currency fluctuations.

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Detroit: Don’t Worry About Cheap Chinese Cars

China’s ambassador to the U.S. visited Detroit Tuesday to speak to the Detroit Economic Club –- and to calm Detroit automakers’ fears that China is about to flood the market with cheap cars.

In fact, Ambassador Zhou Wenzhong told the media before his speech that there’s little risk of Chinese automakers flooding the U.S. automarket anytime soon because the demand for vehicles in China is expected to continue to grow. Pointing out that less than 1 percent of China’s population owns a vehicle now, Zhou said Chinese automakers won’t have the capacity for “a long time to come” to sell a large volume of cars in the U.S.

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BREAKING NEWS: Ford Workers Approve Contract

The UAW announced Wednesday its members working in Ford plants approved a new four-year labor contract with Ford by a margin of nearly 4-to-1.

The Ford contract is the last of the three to be approved. It was done so without a strike and by the most overwhelming margin.

Little information has been provided about the contract, pending its approval. However, it is known to include a two-tire wage structure and the establishment of a union-run trust fund for retiree health care in exchange for the automaker keeping plants open.

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Ford Forms Advisory Council for Environmental Matters

Ford Motor Co. announced the formation of Transformation Advisory Council that consists of Ford senior executives as well as outside thought leaders to explore solutions to energy independence and global warming.

Initial outsiders selected for the council are big names -- Amory Lovins, Paul Hawken and Peter Senge.

“This is the start of a world-class group of innovative thinkers who will help propel us along the road to sustainability,” said Ford Executive Chairman Bill Ford in making the announcement made Tuesday.

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Chevrolet Volt: It Won’t Look Like the Concept

By Kelly Toepke

Did you like the way the long-slung Chevrolet Volt looks?

Well, forget about it. The production version won’t look like that concept. It's not aerodynamic enough.

"The final version of the Volt won't look like the concept,” General Motors Vice Chairman Bob Lutz told reporters attending the Los Angeles show at a dinner Tuesday night. “In the wind tunnel it was a cruel disappointment. We probably would've gotten better drag coefficient if we put it in the wind tunnel backwards. "

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Lexus Tops J.D. Power Sales Satisfaction Rankings; Industry Achieves Record High

WESTLAKE VILLAGE, Calif. –- With the total auto industry showing record improvement, Lexus took the No. 1 spot in J.D. Power’s annual scorecard on the satisfaction of customers buying a new vehicle.

J.D. Power and Associates said the industry achieved a record high for the second consecutive year in the 2007 Sales Satisfaction Index (SSI) Study released Wednesday morning. For a second consecutive year, the industry achieved a record high overall SSI score, improving by 5 points to 852 from the previous record of 847 set in 2006.

Lexus climbed four spots to rank the highest in satisfying buyers with the new-vehicle sales process, achieving an SSI score of 897 on a 1,000-point scale, and improving by 10 points from 2006.

Following closely behind Lexus in the rankings were, respectively: Hummer; Jaguar, which earned the top spot in the three previous surveys; Lincoln; and Mercedes-Benz.

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Iacocca: Chrysler on "Right Path"

Former Chrysler CEO Lee Iacocca, credited with turning around the near-bankrupt automaker in the 1980s, says the New Chrysler is "on the right path for sure'' with owner Cerberus Capital Management LP and CEO Robert Nardelli in charge.

"They've got real problems yet. It's not solved, but it's looking up,'' Iacocca, 83, told Bloomberg News in an interview Tuesday at his Los Angeles home. Iacocca retired from Chrysler in 1993.

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Peugeot-Citroen: Going Green Prompts EU Probe

Competition authorities from the European Union are investigation a proposed research and development aid package from the French government to French automaker Peugeot-Citroen for the development of a hybrid diesel car.

Neelie Kroes, EU competition commissioner, told London’s Financial Times that the European Commission strongly supported the development of environmentally friendly cars but thought it likely that the carmaker would have undertaken the project anyway. The French government’s package would have covered half of the costs.

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Brembo: Rock Star of Brakes Expands Further

By Bill Visnic

NORTHVILLE, Mich. –- There is probably nothing less sexy than brakes. The gritty components that make up a typical disc-brake system are the antithesis of where most auto-industry suppliers want to be: brakes are low-tech, low-value commodity items. Hardly the stuff around which vaunted brands are built.

However, Brembo S.p.A., is the rock star of the brake business to the point that at one aftermarket trade show in France, we saw what amounted to a mini-riot among kids barely able to drive, when Brembo stopped handing out freebies and attempted to shut down its booth at the end of the day.

The fact the brake business even has a rock star is due entirely to Brembo’s existence. Almost since its inception in 1961, Brembo single-handedly has been responsible for making brakes cool (figuratively and literally).

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Toyota: Growing Sales and Presence in Downtrodden Japan Market

By Peter Nunn

TOKYO -- Last week Toyota posted record half-year earnings, including a blockbuster $7.9 billion in group net income. Japan’s most successful automaker also has a couple of other things to celebrate.

Toyota has long dominated its home market, but even by its standards the sales results for October were pretty remarkable. Last month, Japanese vehicle sales dipped again, down 1.3 percent, according to Japan Automobile Manufacturers Association (JAMA) figures. Yet Toyota beat the market with an aggressive sales surge of 7.9 percent.

What’s more, somewhat freakishly, eight out of the Top 10 bestsellers were Toyotas.

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The Lighter Side of the Auto Beat

It’s been a grueling week for serious automotive business: more financial losses for General Motors and Ford fueling fears of more job cuts; a lousy economic outlook with oil skyrocketing near $100 a barrel and the U.S. dollar at the bottom of the barrel; and a jittery stock market.

So now for something completely different to end the week on a lighter note.

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Cerberus' Snow Hints at More Big Hires

John Snow, the former U.S. Treasury Secretary who now heads Cerberus Capital Management, hinted in an interview that more big hires will be made by Chrysler, and he praised Robert Nardelli, the former Home Depot exec that Cerberus installed to head Chrysler.

Snow, caught by the Financial Times for a quick interview after he delivered a speech in Chicago, said Nardelli has proven himself.

“He's a terrific world-class executive, and now joining him is Jim Press, who is really one of the strongest people in the whole automotive industry on a global basis,” Snow told FT.

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Hot Topics: Chrysler Future Products

AutoObserver’s analysis of Chrysler’s product and plant strategies -– “Chrysler Product Cupboard is Strikingly Bare” –- and an article Chrysler’s SRT performance division escaping the cost-cutting knife prompted a flurry of feedback from readers this week.

Readers readily recognized, indeed, how bare Chrysler’s cupboard is. Chrysler’s new management better be doing the same. No company can save its way to prosperity. Turnarounds only occur on the strength of good, new products.

Readers used words like “scary,” “weak” and “depressing,” to describe Chrysler’s condition.

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Auto Companies Pass on Super Bowl

By Dale Buss

Now that the “regular-season super bowl” is over -- with the New England Patriots’ defeat of the Indianapolis Colts last Sunday -- football advertisers as well as fans are turning more attention to the official Super Bowl XLII on February 3.

And despite the fact that Fox already has sold out more than 90 percent of its commercial spots for the game broadcast, automakers aren’t among the major advertisers clamoring to get in.

In fact, General Motors and its divisions have decided to cut the company’s total number of in-game TV advertisements down to just one, compared with three during the 2007 Super Bowl, AutoObserver has learned. Honda has decided for the first time in four years to bow out of running spots during the Super Bowl telecast itself. And Chrysler seems likely, just as last year, to stay away from the game telecast itself.

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Ford Shortens Bidder List for Jaguar, Land Rover

Ford has shortened its list of bidders for its Jaguar and Land Rover units.

Ford CEO Alan Mulally said in a Thursday morning conference call on third-quarter earnings that the planned sale of Jaguar and Land Rover is  "progressing" with "selective parties." The sale is expected to be completed "no later than early next year," he said.

A source told Dow Jones Newswires Thursday that Indian automakers Tata Motors Ltd. and Mahindra & Mahindra Ltd. along with One Equity Partners, a unit of J.P. Morgan Chase & Co. that involves former Ford CEO Jacques Nasser, have been selected to have more detailed discussions with Ford.

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Ford Has a Plan: Keep Volvo and Buff It Up

Ford said Thursday it has a plan for Volvo -- keep it for now, cut its costs and buff up the image of the Swedish marque as a premium automaker.

But that doesn't necessarily mean Ford will keep it forever.

Ford CEO Alan Mulally said Ford will keep Volvo for now, focus on improving its cost structure -- i.e. cut costs -- and reposition it as a premium brand more than a near-premium one.

But reading between the lines, Ford could be sprucing up Volvo to sell it further down the line.

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Ford: Losses Smaller Than a Year Ago

Ford reported Thursday morning a third-quarter loss of $380 million, a significant improvement from the $5.2 billion loss in the year-ago quarter. Ford credited the smaller loss to cost cutting -- mostly from plant closings and job cuts -- and improvements in its automotive operations.

Excluding one-time cost items, the loss was $24 million, compared with a loss of $850 million a year ago. The results were better than analysts had predicted.

Ford CEO Alan Mulally, in a Thursday morning conference call on third-quarter earnings, said the automaker continues to be on track to be profitable in 2009. Ford CFO Don LeClair said in the call the automaker is "ahead of or equal to plan in all areas" and for the full year of 2007, Ford will report a small loss to break even, excluding any special items.

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Toyota: Near-Record Quarterly Profit

TOKYO -- In contrast to General Motors record loss, Toyota Motor Corp. posted its second-largest quarterly profit ever, prompting the Japanese automaker to increase its full-year profit forecast.

For the quarter ending September 30, Toyota reported a net profit equivalent to $3.96 billion, up 11 percent form the same period a year ago. As a result of the strong quarter, Toyota said it was increasing its full-year profit forecast by 3 percent to 1.7 trillion yen. That would surpass last year’s record and mark the seventh consecutive year of record profits.

Toyota also raised its estimates for the number of vehicles it expects to sell globally –- 8.93 million, up from the earlier forecast of 8.89 million.

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Chevrolet Malibu Again Takes Over Online

By Dale Buss

Today’s the day designated for a second “takeover” of online advertising by the 2008 Chevrolet Malibu –- although this invasion will take a few days, unlike the car’s one-day blitzkrieg on October 17.

Having pronounced its earlier takeover a blazing success, Wednesday Chevrolet also planned to make it nearly impossible for Internet surfers to ignore its new midsize sedan. Chevy bought advertisements that occupy many of the highest-traffic home pages ranging from Yahoo.com to Amazon.com to FoodNetwork.com. Connected to the online effort is a big advertising push for Malibu on and around the Country Music Awards telecast tonight on ABC.

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Trade-Offs Aplenty in Proposed Ford-UAW Deal

By Bill Visnic

DETROIT -– Don’t insist on identifying a definitive winner and loser in the tentative labor contract hammered out this past weekend between Ford Motor Co. and the United Auto Workers (UAW) union. There wasn’t one.

In the agreement awaiting ratification by rank and file workers, the UAW got assurances from Ford there won’t be any additional plant shutterings beyond those already earmarked for closure -– despite the fact Ford’s sales suggest the company needs to shed more capacity. And there is some commitment from Ford regarding new models for several plants.

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General Motors Loss: Write-Down Leads to $39 Billion Loss

General Motors Wednesday reported a third-quarter net loss of $39 billion, its largest in history, after the automaker took a non-cash charge of future tax benefits.

Without those charges, GM still showed a loss for the quarter of $1.6 billion, compared to a profit of $497 million a year ago.

GM's North American automotive operations posted a loss of $247 million, an improvement from an adjusted loss of $660 million in the year-ago quarter. GM reported record high automotive revenue of $43.1 billion for the quarter, up from $29.6 billion a year ago.

While analysts had not predicted the write-down, most said it is largely a paper loss that does not affect GM's long-term prospects.

Fritz Henderson, GM's vice chairman and chief financial officer, said the charge does not imperil the automaker's long-term financial outlook.

"GM continues to believe that its new product introductions, combined with the new GM-UAW labor agreement, once fully implemented, will significantly improve GM's competitive position in the U.S.,"  Henderson said in a statement.

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Cerberus’ Snow: Chrysler Is on the Right Track

John Snow, chairman of Cerberus Capital Management, which owns 80 percent of Chrysler, said he’s optimistic the automaker is on the right track for a turnaround though he wouldn’t say when profitability restored.

Speaking Monday at the Executives Club of Chicago, the former U.S. Treasury Secretary said the company had not set “artificial deadlines” for achieving profitability, according to Dow Jones.

"What's important is 'are you getting this thing turned around?'" Snow said. "If it takes a little longer or a little less, it doesn't really affect the long-term cash flows. And what we're in it for is long-term profitability and long-term cash flows…This is a big engine. If you get it working right, it’ll reward our investors.”

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Hillary Clinton Backs 40 MPG Standard

She wasn’t going to get many votes from the captains of Detroit’s auto industry anyway, but now Democratic presidential candidate Hillary Rodham Clinton has guaranteed they won't vote for her as she upped the ante in the fuel economy debate.

On Monday, Clinton called for a 60 percent increase in fuel economy standards by 2020 for a combined fleet average of 40 miles per gallon and a combined fleet average of 55 miles per gallon by 2030. To soften the blow, she also called for $3 billion in battery research and $20 billion in government-backed “Green Vehicle” bonds to help automakers shift to more efficient vehicles. She also promoted tax breaks for plug-in hybrid and government purchases of plug-in hybrids -– 100,000 by 2015.

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Toyota Promotes Jim Lentz to President

Toyota announced Tuesday that Jim Lentz, currently executive vice president of Toyota Motor Sales, U.S.A, Inc., the marketing arm of the Japanese automaker, has been promoted to president.

"Jim Lentz is especially well qualified to lead TMS into the future as it marks 50 years in America," said TMS Chairman Yuki Funo in a statement. "His experience spans all major operational areas and he has an outstanding sense of what our customers, dealers and associates expect from Toyota."

Lentz, 52, has spent 29 years in the auto industry and joined Toyota in 1982.

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Chrysler's Product Cupboard Is Shockingly Bare

By Bill Visnic

Barely a week after the United Auto Workers ratified a new four-year labor agreement with Chrysler LLC, its top executives let fly with the facts of life under new hedge-fund owner Cerberus Capital Management: assembly-plant shifts will be cut, several lame-selling models will be axed almost immediately -- and as a result, as many as 10,000 more hourly jobs will fall by the wayside in 2008.

This shoe drops after the already deep cuts announced in February's Recovery and Transformation Plan, pre-Cerberus, when Chrysler still was owned by Daimler AG. Chrysler confirms the discontinuance of four models, but there are almost assuredly more to follow, as the new management team and Cerberus begin to understand the product cupboard is shockingly bare.

Where does this leave the new Chrysler's North American manufacturing base, and the products -- current and future -- built by this company that is shedding assembly capacity and products at a pace unprecedented by "old Detroit" standards? Here's our analysis of Chrysler's 14 North American assembly plants and the prognosis for the products they either currently build or might be building in the future:

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UAW Leaders Get Briefed on New Ford Contract

Leaders from UAW locals from around the country are gathering in Detroit Monday to be briefed on the tentative contract reached between its union and Ford.

Contract details have not been officially but the Ford deal reportedly has significant job security assurances, including Ford’s removal of several plants from its pending closure list in exchange for significant, but still unknown, concessions from the union.

It would seem that Ford will be challenged to meet its profitability objectives without the ability to close plants in line with its shrinking sales and market share.

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October Car Sales: The Highs, The Lows

October car sales represented more of the same weakness seen in recent months.

Sales on a seasonally adjusted basis came in at 16.05 million vehicles, down from 16.35 million in October a year ago.

“There was nothing new this month, as we saw General Motors and foreign automakers continue to succeed,” said Jesse Toprak, executive director of Industry Analysis for Edmunds.com. “Ford did better than expected because of its new products, mainly crossovers, and Ford has been able to hold on to its truck buyers, even with an aging product.

“We’re expecting that sales will continue to be sluggish for the rest of the year, and November has typically been a slow month for automakers,” he added.

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Posted by at 4:48 AM under Analysis, Chrysler, Ford, GM, Toyota | Comments (0) | digg this | del.icio.us

Chrysler SRT Spared From the Cost-Cutting Knife

By Bill Visnic

Last week, Chrysler LLC announced cuts in production, people and products, but the automaker’s in-house SRT performance division appears largely unscathed.

Chrysler “lifer,” Michael Accavitti, who is director of the Dodge Brand and SRT marketing communications, is confident about the future of the performance division. He believes Bob Nardelli, Chrysler’s chairman and CEO with no auto industry experience, is a fine choice to lead Chrysler in its new life following its split with former owner Daimler AG.

And SRT got a vote of confidence from Jim Press, the Toyota executive brought to Chrysler to run sales, marketing and product planning. “SRT is giving those customers what they want in emotion, in passion, in driving,” he said recently, though he hinted the SRT label would focus on Dodge products.

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BREAKING NEWS Ford, UAW Reach Agreement

Ford and the United Auto Workers union reached a tentative contract agreement in the early morning hours of Saturday, after round-the-clock bargaining for the past couple of days.

Few details of the agreement were released. It does contain a union-run trust fund to hand retiree health care obligations, commitments from Ford on new product investments and a two-tier wage structure that pays new non-production employees less than current ones.

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Importers Agreeable to 35 mpg Standard

The trade group representing automotive importers has said it will not fight a combined 35 mile per gallon fuel economy standard being considered by the U.S. Congress, but its members want more time to meet the stiffer standard.

The Association of International Automobile Manufacturers wants the deadline for meeting the tougher standards pushed significantly back from the proposed 2020 timeline. The lobbyist group represents more than a dozen import nameplates, including Toyota, which had sided with Detroit automakers in seeking lesser standards that separate car and truck ratings. The only AIAM members that sell large trucks are Toyota and Nissan.

Posted by at 6:49 AM under Companies, News, Toyota | Comments (3) | digg this | del.icio.us

Ford-UAW Deal Close

Detroit media reporting Ford and the United Auto Workers union could announce a contract settlement as early as Friday.

Negotiators from the two sides remained at the bargaining table Friday morning after an all-night session, suggesting they are in the final phases of the talks.

The critical issues is job security: the union appears ready to give Ford more cost cuts in exchange for fewer plant closings and specific future product programs for plants.

Posted by at 6:12 AM under Ford, Rumors | Comments (0) | digg this | del.icio.us

October Incentives Decline as 2007 Inventory Dwindles

The average automotive manufacturer incentive in the U.S. is estimated at $2,195 per vehicle sold in October 2007, down $162, or 6.9 percent, from September 2007, and down $89, or 3.9 percent, from October 2006, according to Edmunds.com’s monthly True Cost of Incentives report.

In October, the industry's aggregate incentive spending is estimated to have totaled approximately $2.71 billion, down 12.0 percent from September.

“Incentive averages declined because the majority of vehicles being sold now are 2008 model year and don’t require overly generous marketing support," stated Jesse Toprakexecutive director of industry analysis for Edmunds.com. "This typically occurs later in the calendar year, but in 2007 we had earlier model introductions as well as dramatic production cuts that reduced available inventory.”

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BREAKING NEWS Chrysler: End of the Line for Some Employees, Models and Production

Chrysler announced Thursday morning that it will slash its salaried ranks further, cut production at a number of plants and eliminate four models from its product portfolio.

The moves come as no surprise as such cost cutting is the MO for private equity firms, like Chrysler’s new owner, Cerberus Capital Management. Since taking over only in early August, the new Chrysler management has taken quick and decisive steps to turn the automaker around as the economy turns even further south than anticipated.

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Chevy Malibu: Same Price, More Profit

General Motors Vice Chairman Bob Lutz says though the new Chevrolet Malibu, going on sale this month, has about the same list price as the old Malibu, GM could make more  – significantly more  – on the midsize sedan.

Lutz told the Detroit News at the Chevy Malibu launch in Memphis this week that GM could make $5,000 more on each new sedan sold compared with the older model. He said the Malibu will command a higher price premium than the previous Malibu, which was dragged down by deep discounts and heavy sales to daily rental fleets. Edmunds.com data shows the 2007 Malibu sells for about $2,800 below the Manufacturers Suggested Retail Price.

"My bet is that we're going from a car people have to be bribed to take, to a car people will actually pay for," Lutz told the newspaper.

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Posted by at 7:09 AM under GM, Personalities | Comments (1) |