Commentary: No Easy Answer for the Toyota Problem
Edmunds.com CEO Jeremy Anwyl argues in a Washington Post OpEd that the U.S. 
Transportation Department and its National Highway Traffic Safety Administration should lead in coordinating an effort to get to the bottom of the industry problem of sudden acceleration. Here's his argument as published by the paper Monday:
Lately it seems that each day brings another report of a driver's terrifying experience with an out-of-control Toyota. There have been at least four congressional hearings in as many weeks.
Even the most confident consumer has to wonder what is causing all this and, more fundamentally, whether Toyotas are safe to drive.
The second question is easier to answer. Despite the flurry of reports, incidents with speeding vehicles are rare. And vehicles today, including Toyotas, are safer than ever.
(Read more...)
Posted by Michelle Krebs at 4:02 AM under Commentary , Companies , Featured , In the Media , Technology , Toyota | Comments (2) | digg this | del.icio.us
Ford Stock Price Climbs to New Highs; Going Higher?
Financial blogs have been all abuzz this past week as the price of Ford Motor Co. stock 
climbed to new highs.
Ford's stock has been trading at more than $13.40 a share in recent days, approaching its highest point since late 2004 when it was selling for nearly $15 a share. And its current price is a far cry from the couple of bucks it was selling for only a year ago. In fact, in November 2009, it sold at less than $8 a share.
The question now facing shareholders is hold as the prices goes higher or sell and take the money and run? For would-be Ford shareholders, did they miss the boat or is Ford still a buy?
(Read more...)
Posted by Michelle Krebs at 8:41 AM under Commentary , Ford , In the Media | Comments (3) | digg this | del.icio.us
What We're Reading: Women Are Key for Toyota, Emerging Markets
A few articles caught my eye this week. Both pertained to women, appropriately so since March 8 was International Women's Day. They are pertinent to all auto companies as their business is employing women and marketing to women.
One article was written by former Chrysler marketer Julie Roehm on how Toyota must regain the trust of women in order to recoup its sales and image. Another was by economist Sylvia Ann Hewlett discussed women as a major emerging market in emerging markets. A a third was by University of Michigan professor Susan Douglas who contends women's equality is only a perception that doesn't mirror reality.
(Read more...)
Posted by Michelle Krebs at 8:32 AM under Chrysler , Commentary , Ford , Toyota | Comments (0) | digg this | del.icio.us
Risk Professor Isn't Scared of Driving a Toyota
Paul Fischbeck, a professor at Carnegie Mellon University and a "risk expert," noted in a 
release late last month that although Toyota Motor Corp. has captured the attention of the media and the driving public numerous reports linking its vehicles to unintended acceleration, driving while talking on a cell phone or even innocently walking a mile are riskier than piloting a recalled Toyota.
"There hasn't been a discussion about the actual risk of driving one of Toyota's recalled vehicles," said Fischbeck, a professor of social and decision sciences and engineering and public policy, in a statement. " I think it's important for people to realize that when you look at the actual risk of driving one of these cars, it's actually very low."
(Read more...)
Posted by Michelle Krebs at 4:23 AM under Commentary , Personalities , Toyota | Comments (3) | digg this | del.icio.us
Virginia Troopers Become Tax Collectors for a Weekend
The state of Virginia turned to a baldfaced fleecing of motorists this past weekend as a part 
of a solution to chip away at the state's $2.2-billion budget deficit.
The Truthaboutcars.com, via the newspaper.com, reported the shameful results of Virginia's weekend revenue-pumping ticket blitz that flew under cover of a safety campaign: the state's "Operation Air, Land & Speed, dealt out an astonishing 7,016 traffic tickets this past Saturday and Sunday.
(Read more...)
Posted by Michelle Krebs at 4:13 AM under Commentary , In the Media | Comments (2) | digg this | del.icio.us
Powerful Divisional General Managers Are History in New GM Management Restructuring
An executive position at General Motors Co. with a long tradition for power and attracting 
ambitious -- and often quirky -- personalities has been eliminated in the top-to-bottom management restructuring GM unveiled for its four sales divisions last week.
The role of division general manager -- the executive who for decades wielded the almighty last word on everything from marketing to manufacturing -- is gone, the historic position replaced by a structure that assigns sales and marketing functions to separate executives at each of the Chevrolet, Cadillac and Buick/GMC divisions.
"It's become extremely clear to me since taking this role that there is a better way to structure this organization," Mark Reuss, GM North America president, said in detailing the new management configuration. "The premise of the structure is simple -- a clearer marketing focus to sell more vehicles, and freeing our sales and service experts to focus on customers and dealers.
"We've worked with a small group of executives to align this model and appoint the best candidates for each job," he added.
Say goodbye to one of the last vestiges of GM's management-style history: the single and all-powerful division general manager.
(Read more...)
Posted by Michelle Krebs at 6:40 AM under Commentary , Featured , GM , Personalities | Comments (2) | digg this | del.icio.us
Cadillac Execs Reportedly Canned; Signs of a "New" GM?
Doubts abound whether a "new General Motors" truly is emerging from the old GM with its 
old, stodgy and coddling culture, but the reported ouster of a trio of marketing executives associated with struggling Cadillac may be a sign that, in fact, the times are a-changing.
Quoting eight unnamed sources familiar with the situation, trade journal Automotive News reported last week that GM had terminated Steve Shannon, John Howell and Jay Spenchian, all associated with Cadillac.
Being fired by the old GM was almost unheard of. One had to be stealing from the company, sexually harassing co-workers or doing something so outrageously obvious that it couldn't be overlooked. Underperforming or playing a key role at an underperforming operation was rarely grounds for dismissal, it seemed.
(Read more...)
Posted by Michelle Krebs at 7:14 AM under Commentary , GM , Personalities | Comments (1) | digg this | del.icio.us
Toyota Hearings Round 2: The Big Show Starring Akio Toyoda
Tuesday's hearing before the House Committee on Energy and Commerce into Toyota's 
recalls and safety record - as heated as it was - was just the warm-up act for Wednesday's big show starring Toyota Motor Corp. President Akio Toyoda, grandson of the company's founder.
The automaker already has indicated what Toyoda will say before the House Committee on Oversight and Government Reform with Op-Ed pieces published in the Wall Street Journal on Tuesday and distribution of excerpts of his speech.
Toyoda can be expected to deliver messages to Toyota customers and employees about the company's commitment to quality, to outline specific steps the company is doing in that regard and to make it personal with lines like "my name is on every car."
(Read more...)
Posted by Michelle Krebs at 5:20 AM under Commentary , Personalities , Toyota | Comments (0) | digg this | del.icio.us
Why the Toyota Puzzle Doesn't Fit Together - For Anybody
It was frustration, not answers, that came out of the House of Representatives Committee on 
Energy and Commerce investigation into Toyota Motor Corp.'s wide-ranging recalls for vehicles alleged, for different causes, to have unintended acceleration.
There were just two definitive take-aways from Tuesday's exhaustive hearing -- neither of which goes anywhere toward explaining whether mechanical, electrical or software faults could be at the root of thousands of consumer complaints of unintended acceleration and the recall of millions of Toyota vehicles.
Those two absolutes:
1. Toyota knew of an unintended acceleration trend -- evidenced in vehicles worldwide -- and now executives essentially are admitting the company underplayed its potential importance.
2. The National Highway Traffic Safety Administration (NHTSA), the governing body charged with riding herd on automakers to assure action in such matters, wasn't doing its job.
(Read more...)
Posted by Michelle Krebs at 3:32 AM under Commentary , Featured , News , Toyota | Comments (12) | digg this | del.icio.us
A Glimpse of the Feeding Frenzy Toyota Faces
This week, Toyota President Akio Toyoda and other Toyota executives are scheduled 
to testify before two Congressional committees regarding the automaker's recall of millions of vehicles. The committees, which will hear from other industry experts as well, will attempt to answer the question of whether the public is at risk.
Toyota's recalls have generated massive amounts of global media and dozens of lawsuits. Toyota has hired a crisis management team to help with the hearings and the public relations effort that got off to a bungled start.
For a glimpse of what might be going on behind the scenes leading up to the hearings and how the hearings might play out, AutoObserver turned to Ford public relations veteran Jon Harmon, now an author and crisis management consultant. His book, Feeding Frenzy, published last October, tells the riveting behind-the-scenes story of the deadly rollover accidents involving Ford Explorers equipped with Firestone and subsequent recalls. Like Toyota is now, Ford faced intense media scrutiny, aggressive trial lawyers and an angry U.S. Congress.
Here's an excerpt covering Ford's preparation for and experience in Congressional hearings:
(Read more...)
Posted by Michelle Krebs at 7:10 AM under Commentary , Featured , Ford , In the Media , Toyota | Comments (1) | digg this | del.icio.us
COMMENTARY: Witch Hunts and Cost Cuts Affect All Companies, Not Just Toyota
Toyota's dilemma should be thought of as a parable that applies to the entire industry, writes GaveKal, a Hong Kong-based financial services, macro-economic firm.
Why? Two reasons, says GaveKal in an excerpt from the company's recent report posted here with permission: the witch hunt is on and cost-cutting has a downside for all.
(Read more...)
Posted by Michelle Krebs at 10:46 AM under Commentary , Companies , In the Media , Toyota | Comments (1) | digg this | del.icio.us
Crash Course Covers Bailouts and Bankruptcies
The book, "Crash Course," by veteran automotive journalist and Pulitzer Prize-winner 
Paul Ingrassia is the first book about last year's bailouts and bankruptcies of General Motors and Chrysler. While the book, which was published this month by Random House, focuses on the dramatic events of 2009, it covers the history of the American auto industry from the Model T onward. This excerpt from the opening chapter, published courtesy of Random House, begins in the bleak final months of 2008; it summarizes the mounting crisis and how Ford avoided the fate of its Detroit competitors.
It really wasn't intended to be a prophecy. It was just a smart-alecky tee-shirt worn for years by local teen-agers to annoy their parents, and show their perverse pride in the Motor City's tough-town image. It said: DETROIT: WHERE THE WEAK ARE KILLED AND EATEN. But the menacing message seemed all too appropriate in the bleak winter of 2008-2009, when signs of weakness -- indeed, desperation -- erupted everywhere in Detroit.
(Read more...)
Posted by Michelle Krebs at 11:52 AM under Chrysler , Commentary , Companies , Featured , Ford , GM | Comments (2) | digg this | del.icio.us
COMMENTARY: Costs, Congress and Toyota's Fall from Grace
My boss reckons one consequence of Toyota Motor Corp.'s new and extraordinary quality-safety blunders is that the price of new cars is going to go up.
Edmunds.com CEO Jeremy Anwyl suggests in a piece posted Thursday on AutoObserver that consumers should prepare themselves to pay for the increased safety the furor over the Toyota revelations seems to be demanding. And they will likely have to pay for the correspondingly amped-up regulatory oversight that also will be an inevitable outcome once Washington gets involved at the end of the month.
Our vehicles have become astoundingly, statistically safe. The question of the moment is: are we willing to pay whatever's required to move them closer to being absolutely safe?
(Read more...)
Posted by Michelle Krebs at 4:00 AM under Commentary , Featured , Technology , Toyota | Comments (3) | digg this | del.icio.us
"How the Mighty Fall" Explains Why Toyota's Floundering
Stefan Stern's management column in the Financial Times quotes from a book written by 
management guru Jim Collins, How the Mighty Fall, published last year. Collins also wrote the well-known bestseller, Good to Great.
The column and the book are particularly appropo as mighty Toyota flounders.
In the book, as cited by the FT, businesses pass through five key stages of decline or what Collins terms as the "arc of tragedy" -- a process by which "an all-conquering company like Toyota can be brought so low."
Stern simplifies as follows Collins' five stages -- ones other automakers (Ford, Fiat, Volkswagen, come to mind) would do well to note:
(Read more...)
Posted by Michelle Krebs at 11:57 AM under Commentary , Companies , In the Media , Toyota | Comments (3) | digg this | del.icio.us
President Toyoda Details Plan To Restore Toyota Quality, Consumer Trust
In advance of Wednesday's Congressional hearings on the automaker's recent recalls, Toyota Motor Co. President Akio Toyoda detailed in a letter published in the Washington Post his plan to restore product quality and regain customer trust.
In the letter printed in Tuesday's edition, Toyoda, grandson of the company founder, accepted personal responsibility and apologized for the recalls, vowing to Toyota back on track.
Toyoda, who has been largely invisible during the last few weeks of recalls and negative headlines, wrote: "You have my commitment that Toyota will revitalize the simple but powerful principle that has guided us for 50 years: Toyota will build the highest-quality, safest and most reliable automobiles in the world."
(Read more...)
Posted by Michelle Krebs at 5:03 AM under Commentary , Personalities , Toyota | Comments (1) | digg this | del.icio.us
Crisis Management, Japanese Style
Last Friday's press conference held by Toyota's chief executive Akio Toyoda has generated 
plenty of buzz. Much has been made in the Western and Japanese media about whether or not his "apology" -- and even his bow at the start of the conference -- demonstrated true contrition. And there's been various interpretation of his words -- was he sorry for the quality problems or sorry for the concern it caused.
In a recent column in the Wall Street Journal, Jeff Kingston, director of Asian Studies at Temple University Japan, discusses the uniqueness of the Japanese business culture that led to what the headline describes as "A Crisis Made in Japan."
(Read more...)
Posted by Michelle Krebs at 8:53 AM under Commentary , In the Media , Toyota | Comments (1) | digg this | del.icio.us
Commentary: Audi "Green Police" Slays in Super Bowl Ad Wars
Lots of pre-game chatter about which automaker would come out on top with the best of the 
million-dollar-plus Super Bowl television commercials, but once the last of the confetti settled, Audi stood clear from the pack.
Audi's "Green Police" commercial was witty on many levels, but provoked more than laughs because it dared to satirize what typically is a sacrosanct subject: the environmental movement.
(Read more...)
Posted by Michelle Krebs at 4:06 AM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
Are Toyotas Safe To Drive? Transportation Secretary Confuses the Issue More
Transportation Secretary Ray LaHood publicly recommended that owners of recalled Toyotas should stop driving them during Congressional hearings on Wednesday. Then he backtracked on his statement in later in interviews, only adding to the confusion Toyota owners are experiencing.
"This flip-flop is not helping concerned motorists who are being presented with confusing and contradictory information about the Toyota recall at every turn," stated Edmunds.com CEO Jeremy Anwyl.
Posted by Michelle Krebs at 10:19 AM under Commentary , In the Media , Personalities , Toyota | Comments (0) | digg this | del.icio.us
Detroit Auto Show: Eleven Vehicles That Matter - Or Don't
The 2010 North American International Auto Show is one of the most restrained editions of 
the Detroit confab many can remember.
But the show's comparative scarcity of high-impact concept and production vehicles didn't stem the avalanche of opinion on the most notable vehicles.
After scores of media outlets have weighed in, AutoObserver cuts through the clutter to give the real score on the 10 most significant - for better or worse - vehicles of the 2010 Detroit auto show.
(Read more...)
Posted by Bill Visnic at 11:31 PM under Analysis , Business , Commentary , Companies , Ford , GM , Toyota , Volkswagen, Audi | Comments (0) | digg this | del.icio.us
Detroit Auto Show: The Mood, The Stars, The Sales Push
Michelle Krebs, Edmunds.com senior analyst and editor at large, gives her take on the mood at this week's press preview for the Detroit auto show, names the stars of the show and the pressure to move the metal.
Posted by Michelle Krebs at 10:50 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
Fiat Marchionne Faces Tough Sales Job in 2010
At past Detroit auto shows, one could always count on Chrysler to provide the event's glitz and 
glamour with sexy or wild concept cars introduced with theatrical flair, like minivans leaping through the air and Jeeps crashing through glass.
Not so this year. Chrysler held absolutely no press conferences during this week's press preview, and the automaker whipped together a new show stand at the last minute -- one that is simple, clean and noticeably absent of new vehicles.
That void points out the seemingly unwinnable battle Fiat/Chrysler CEO Sergio Marchionne faces in 2010.
(Read more...)
Posted by Michelle Krebs at 6:05 AM under Chrysler , Commentary , Personalities | Comments (1) | digg this | del.icio.us
What We'll See at the Detroit Auto Show - And What We'd Like To See
Thanks to the beat-down 2009 threw on almost every automaker, the 2010 installment of the 
North American International Auto Show in Detroit this week isn't expected to be one of the more ebullient in the storied show's history.
Most makers are laying low. And that's the ones who are even coming. Like last year, many automakers are taking a pass: Nissan and Porsche, for instance.
Many makers let the hometown companies make the biggest splashes, but Chrysler, for one, is displaying vehicles but having no press conference (our hopes remain Chrysler will import some Italian food to feed the media masses).
You can get a rundown of what will be displayed at the Detroit show at Edmunds.com's Inside Line. But we're adding a new twist: in addition to a scorecard of what some automakers are showing at the Detroit auto show, AutoObserver is adding what each automaker ought to be showing.
(Read more...)
Posted by Michelle Krebs at 4:31 AM under Chrysler , Commentary , Companies , Featured , Ford , GM , Toyota | Comments (4) | digg this | del.icio.us
GM's Lutz Details Automaker's 2010 To-Do List
General Motors' Bob Lutz, in an editorial on AutoObserver's sister site, Edmunds' Inside Line,
lays out the automaker's 2010 to-do list.
Top to bottom of the list is a focus on product.
"GM builds cars and trucks and crossovers. That is what we do," writes Lutz. "In 2009, we were given an opportunity to continue doing so, and we must not squander that opportunity.
"Therefore," adds Lutz, "we are resolved, if you will, not to lose sight of the fact that if we don't build the best cars, trucks and crossovers on the planet, that opportunity will go for naught."
(Read more...)
Posted by Michelle Krebs at 5:53 PM under Commentary , GM , Personalities , Technology | Comments (4) | digg this | del.icio.us
Dour HuffPo Blogger Calls Audi Holiday Commercial "Crass"
The Volkswagen Group's upscale Audi division probably thought it simply was lightening the 
holiday mood with a whimsical television commercial highlighting Audi's high-tech image. A "green"-oriented blogger at the Huffington Post didn't see it that way.
Jonathan A. Schein, listed at the Huffington Post as the founder of ScheinMedia and publisher of two environmentally-oriented Web sites and who apparently thinks all ads should be opportunities to impart a green message, called the Audi commercial a "crass approach to marketing during the holiday season."
(Read more...)
Posted by Michelle Krebs at 4:17 AM under Commentary , Companies , In the Media | Comments (3) | digg this | del.icio.us
Edmunds.com Cites 10 Top Automotive Technologies of the Decade
Ten years ago, most people had never heard of many of the technologies that are mainstream today.
"In the '90s, satellite radio and iPods weren't around. Only hard-core computer geeks were tweaking cars to add MP3 capability, and navigation systems were still only available as expensive in-dash systems," remembered Edmunds.com Senior Technology Editor Doug Newcomb. "Bluetooth hands-free phones were still years away and Bose was the best known of only a handful of premium car audio offerings."
As the decade comes to a close, Edmunds.com has identified the following top 10 in-car technologies of the last 10 years.
(Read more...)
Posted by Michelle Krebs at 10:54 AM under Commentary , Companies , Ford , Technology | Comments (3) | digg this | del.icio.us
The Best and Worst Ideas of 2009
Desperate times require desperate measures, as the saying goes, and 2009 was about as 
desperate as it gets in the auto industry.
Companies sometimes do the most interesting things when they're desperate -- and that maxim seems particularly relevant to auto companies. Because their products are so visible, with such potential emotional impact. Because their executives and designers and engineers are in charge of the process that creates those products.
Desperation in 2009 -- as defined by coming up some 6 million sales short of the industry's glory days of just three years ago -- generated products and strategies that ran the gamut from ridiculous to sublime. Some ideas were inspired; some were just tired.
Here are a few of the best and worst ideas from the auto industry in 2009:
(Read more...)
Posted by Michelle Krebs at 9:22 AM under Chrysler , Commentary , Companies , Featured , Ford , GM , Personalities , Technology | Comments (4) | digg this | del.icio.us
The Euro View on the Decade
We know our U.S.-oriented prism is limiting so we turned to Europe's Just-Auto.com for its view on the decade.
With the Just-Auto's blessing, we excerpt here Dave Leggett's take on the Top 10 things - people, events and trends that shaped the automotive decade.
(Read more...)
Posted by Michelle Krebs at 5:38 AM under Commentary , Companies , Ford , GM , Personalities , Technology | Comments (1) | digg this | del.icio.us
Los Angeles Auto Show Vehicles Generate Edmunds.com Buzz
Five new models displayed at the recently wrapped-up Los Angeles auto show are generating tremendous buzz on Edmunds.com. The five most talked-about vehicles are the Buick Regal, Ford Fiesta, Hyundai Sonata, Toyota Sienna and Cadillac CTS coupe.
Here's what readers have to say:
(Read more...)
Posted by Michelle Krebs at 4:43 AM under Analysis , Commentary , Ford , GM , Toyota | Comments (0) | digg this | del.icio.us
What Vehicles at LA Show Will Win in the Market?
With the doors closed last weekend on the 2009 Los Angeles auto show, the vehicles that premiered there will soon be arriving in dealer showrooms. What ones will sell in the marketplace?
To answer that question, AutoObserver watched the behavior of Edmunds.com visitors who came to the car-shopping Web site for vehicle information and turned to Edmunds.com staffers who covered the show.
Edmunds.com visitors appeared most interested in the Buick Regal, Chevrolet Cruze, Ford Fiesta, Hyundai Sonata, Mazda 2 and Toyota Sienna, with those vehicles seeing the biggest rise in shopping consideration.
(Read more...)
Posted by Michelle Krebs at 6:54 AM under Analysis , Commentary , Featured , GM , Hyundai, Kia , Mazda , Toyota | Comments (0) | digg this | del.icio.us
After a Wooly Weekend, Saab Still in Play
Thanksgiving week saw the blow-up of yet another deal for a cast-off General Motors Co. 
brand, but unsurprisingly, nobody's yet declaring Saab Automobile a dead turkey.
A Bloomberg News report from China early Monday had Beijing Automotive Industry Holding Co. (BAIC) president Wang Dazong insinuating his company is considering its own play for Saab after Sweden's Koenigsegg Group unceremoniously dropped its bid for GM's perennially money-losing Swedish auto division. BAIC was part of the consortium led by Koenigsegg that originally planned to take over Saab.
And yes, venture capital - the reddest of flags for flailing auto companies - appears to be involved, too.
(Read more...)
Posted by Michelle Krebs at 4:42 AM under Commentary , Featured , Ford , GM | Comments (3) | digg this | del.icio.us
The Street's Already Abuzz About 2011 Hyundai Sonata
Think of four words you might use to describe a Hyundai Sonata. Got 'em? Did any of the 
following come to mind: "Sharp"? "Distinctive"? "Aggressive"? "Radical"? If not, then perhaps you haven't seen the all-new for 2011 Hyundai Sonata because that's how car shoppers and enthusiasts on Edmunds' CarSpace Forums are talking about Hyundai's latest design.
A formal introduction doesn't come until the Detroit auto show in January -- and the car likely won't hit showrooms for months after that - but Edmunds.com members are already buzzing, calling it "probably the most original of the new Hyundai lineup" and "the first Hyundai design that has attitude" -- high praise considering the award-winning Genesis sedan and coupe that Hyundai already released this year.
(Read more...)
Posted by Michelle Krebs at 4:46 PM under Commentary , Companies , Featured | Comments (6) | digg this | del.icio.us
GM Makes Right Decision to Keep Opel
General Motors' decision to keep Opel has ruffled political feathers and rankled the union 
rank and file in Germany, but it is - and always was - the right business decision for the automaker.
While it is in dire need of restructuring that it clearly is about to get, Opel gives GM a presence in Europe that Chevrolet alone cannot. Even more important, Opel architectures and engineering expertise are the backbone GM's global growth.
(Read more...)
Posted by Michelle Krebs at 6:56 AM under Commentary , GM , Personalities | Comments (1) | digg this | del.icio.us
Some Good Ideas from Chrysler's Turnaround Plan
After a day-long session in which executives from Chrysler Group LLC and its managing 
partner Fiat S.p.A. made public the company's financial and product strategies that will carry it forward for the next five years, the overall impression is of a plan based on optimistic growth assumptions combined with dubious new-product directions.
But not all of Chrysler's five-year outline is unreasonable or illogical. Some aspects, if executed properly and promptly, can help Chrysler distinguish itself from the competition. The three best ideas to come from Chrysler's new business plan: a diesel engine for Jeep; a revamp of Chrysler's mid-size sedans; and a plan to pay back government loans.
(Read more...)
Posted by Michelle Krebs at 3:54 AM under Chrysler , Commentary , Featured , Technology | Comments (2) | digg this | del.icio.us
Edmunds.com Responds to White House Criticism
Today the Department of Transportation and White House chose to respond to an analysis Edmunds.com released Wednesday that looked at auto sales this year and what sales volumes would have been had the popular Cash for Clunkers program never existed.
At issue is one point of the analysis showing the taxpayer cost for every incremental vehicle sold was $24,000. To be clear, Edmunds.com is not disputing the government's statements regarding total voucher applications, vehicles sold or voucher values. The key question is how many of these sales would have occurred anyway.
(Read more...)
Posted by Michelle Krebs at 11:55 AM under Commentary | Comments (8) | digg this | del.icio.us
White House Charges Edmunds.com Got It Wrong on Cash for Clunkers
The White House and Department of Transportation claim Edmunds.com got it wrong in its Cash for Clunkers analysis released Wednesday. That analysis shows each incremental sale from the government's Car Allowance Rebate System (CARS) program -- sales that wouldn't have occurred without the program -- cost taxpayers $24,000.
Here's what the White House blog had to say Thursday in an item entitled: Busy Covering Car Sales from Mars, Edmunds.com Gets it Wrong (Again) on Cash for Clunkers:
(Read more...)
Posted by Michelle Krebs at 11:50 AM under Commentary | Comments (3) | digg this | del.icio.us
COMMENTARY: Good News Turns Bad for Ford
Too much good news is turning out to be a bad thing for Ford Motor Co.
The good news apparently has convinced members of the United Auto Workers union that things are hunky- dory at Ford, and there's no reason for them to give the automaker the same concessions competitors General Motors and Chrysler got from bankruptcy proceedings.
As of day-end Tuesday, union members at half-dozen Ford plants had rejected -- in some cases resoundingly so -- the new contract that puts Ford at parity with union brothers and sisters at GM and Chrysler. Voting continues through Saturday, but the outlook is not good as only two plants with votes tallied so far have voted in favor of a new contract.
(Read more...)
Posted by Michelle Krebs at 12:42 PM under Commentary , Featured , Ford | Comments (3) | digg this | del.icio.us
Word on the Street: The Secret of Subaru's Success
It's no secret that Subaru has been one of the biggest automotive success stories of 2009. 
During one of the worst economies on record, the brand has bucked the industry's downward trend of sales to steadily gain U.S. market share, climbing from just 1.1 percent of all vehicles sold in January 2008 all the way to 2 percent in September.
But what's the secret to Subaru's success? Great products? Savvy marketing? Or perhaps just being in the right place at the right time? Car shoppers and enthusiasts on Edmunds' CarSpace Forums have been debating this topic at length over the last few months, and here's a peek at what they've had to say.
(Read more...)
Posted by Michelle Krebs at 10:54 AM under Commentary , Technology | Comments (4) | digg this | del.icio.us
COMMENTARY: Pay Czar on Board
General Motors Co. and Chrysler Group LLC executives are having their salaries cut - and like the often petulant professional-sports millionaires their typically outsized senses of worth so closely resemble - are at the same time getting some religion about responsibility and selfishness.
By now, anybody interested probably knows the details: direct salary for each company's token top 20 or 25 executives is cut an average of 31 percent at GM and about 18 percent at Chrysler. Salaries exceeding $500,000 are all but verboten. Instead, the big money that Detroit execs used to nail down just for phoning it in now is tied to longer-term company performance.
There's a notion.
(Read more...)
Posted by Michelle Krebs at 6:49 AM under Chrysler , Commentary , GM | Comments (1) | digg this | del.icio.us
Ford to Build European Kuga in Kentucky, Report Says
Ford Motor Co. is moving production of its small Kuga crossover from Europe to the U.S. to 
take advantage of lower labor costs and the weaker dollar, Bloomberg News reports.
Ford will shift Kuga production from Germany to Louisville, where Ford makes trucks, in October 2011, says Bloomberg, quoting three unnamed sources apparently familiar with the plans. As many as 80,000 a year will be exported to Europe.
The automaker is not confirming the report.
(Read more...)
Posted by Michelle Krebs at 10:44 AM under Business , Commentary , Featured , Ford | Comments (1) | digg this | del.icio.us
COMMENTARY Memo to Detroit Auto Bosses: Hold Your Tongue
Put up or shut up, albeit in more polite European terms, is basically financial columnist Antony Currie's advice to Detroit's auto bosses.
The Big Three bosses have returned to one of their favorite past times, writes Currie on the financial blog site, Breakingviews.com: "... each of the Big Three's bosses has been indulging in painting rosy scenarios for their firms. But like pronouncements of the past, they're a tad premature."
(Read more...)
Posted by Michelle Krebs at 9:48 AM under Chrysler , Commentary , Ford , GM , Personalities | Comments (2) | digg this | del.icio.us
Porsche's Eggs in New Four-Door Basket
Seems Porsche Cars North America is always one of the first to get hammered when the 
recession hits. The company's certainly taken its lumps in the past year, with sales starting a slide almost the same day Lehman Brothers tanked in fall 2008 and potential Porsche buyers headed for their bunkers.
Calendar-year 2009 hasn't been much kinder: through September, sales are off 32 percent, a withering number for a niche maker.
But as the year winds down, Porsche is launching a history-making - and controversial - new model to help accelerate it into what is hoped will be a broad industry and economic recovery next year. Porsche is counting on the all-new, 2010 Panamera 5-door sedan to reignite interest in the brand at one of its darkest hours. Almost all of the company's available marketing funds for the rest of the year are earmarked to launch the Panamera.
(Read more...)
Posted by Michelle Krebs at 4:02 AM under Commentary , Companies , Featured | Comments (2) | digg this | del.icio.us
Mega-Dealer AutoNation Supports GM's Axe-Swinging
The boss of the nation's largest auto-dealer chain is saying it now - and General Motors Co.'s Saturn knew it almost 25 years ago: GM has too many dealers.
Automotive News reports that Mike Jackson, CEO of AutoNation Inc., the country's largest auto dealership group, said in a speech this week that GM was right when it made the decision that as many as 40 percent of its dealers need to be closed if the newly restructured GM -- and its dealers -- are to survive in a vastly changed automotive market.
(Read more...)
Posted by Michelle Krebs at 9:12 AM under Commentary , GM , Personalities | Comments (3) | digg this | del.icio.us
2010 Ford Taurus Design Captures Attention, Price Questioned
The 2010 Ford Taurus is rolling onto dealer lots across the country, and, judging by a flurry of 
recent posts in Edmunds' CarSpace Forums, its all-new design appears to have captured the attention of the car-buying public.
But with no lack of tough competitors out there, will it also capture their business? And is it priced right?
(Read more...)
Posted by Michelle Krebs at 8:15 AM under Commentary , Featured , Ford | Comments (5) | digg this | del.icio.us
Strong Yen Could be Next Problem For Japan Automakers
Tough selling to still-wary American consumers might be a problem at the lower end of Japanese automakers' list if currency exchange rates continue their current trend. A soaring yen and a drooping dollar are raising red flags for the bottom line in corporate Japan.
Late last week -- after the yen hit a near high for the year at just more than 88 yen to the dollar -- Honda Motor Co. Ltd. president and CEO Takanobu Ito expressed concern about the yen's ongoing strengthening. Although Honda and many other Japanese automakers, such as chief rival Toyota Motor Corp., produce the preponderance of their vehicles sold in the U.S. inside North America, revenue earned in dollars still must be erodingly converted to yen.
With the global automotive sales environment tenuous and the economies of most large auto-buying nations still sputtering, Takanobu said in an Associated Press report that the currency exchange situation is helping push Honda to a "danger zone" that is hampering fragile recovery efforts.
(Read more...)
Posted by Bill Visnic at 12:25 AM under Business , Commentary , Featured , News | Comments (1) | digg this | del.icio.us
Fiat's Guy To Run Chrysler Powertrain; Hemi Future Cloudy
Chrysler Group LLC 20 percent owner and managing partner Fiat S.p.A. continues to import 
its home-grown management to run Chrysler's U.S. operations, Tuesday naming another Fiat executive to a key Chrysler management position.
The company said a "realignment" of Chrysler's powertrain department brings Paolo E. Ferrero as senior vice president of Chrysler Powertrain. Ferrero apparently replaces Bob Lee, a popular Chrysler executive who has spent his entire career at Chrysler and most recently was head of powertrain engineering. Chrysler told Automotive News late Tuesday that Lee remains employed by Chrysler.
Lee, who holds mechanical engineering and MBA degrees, is widely recognized as the "father" of the new-age Hemi V8, which was launched for the 2003 model year and went on to become an icon for the company and a performance benchmark for the industry.
(Read more...)
Posted by Michelle Krebs at 5:38 AM under Business , Chrysler , Commentary , Companies , Featured , Personalities | Comments (2) | digg this | del.icio.us
Commentary: Does Anybody "Get" Chrysler?
Monday's report from Business Week that Chrysler LLC is tasking account-seeking advertising agencies with positioning Chrysler-brand vehicles as "premium" choices indicates new manager Fiat S.p.A. has no more clue about what Chrysler represents in the U.S. than did the company's most-recent other inept foreign owners -- Daimler AG.
Chrysler has heritage as an upscale brand, but that image died by at least the 1970s, the same time most all memories of Detroit's long hoods and tailfins well and truly were overwhelmed by the leaner, meaner imports from Europe and Japan. Ask rival General Motors Co. what its Detroit lead-sled heritage has done for the company lately.
(Read more...)
Posted by Michelle Krebs at 4:04 AM under Chrysler , Commentary , Featured | Comments (16) | digg this | del.icio.us
Buick Billboards Poke Fun at Lexus; Tweets Poke Fun at Buick Tagline
At least a couple of automakers are headed into the 2010 model year donning boxing gloves.
Feisty billboards popping up across the country have the Buick LaCrosse taking dead aim at Lexus ES 350. One shows the LaCrosse with the line "Another thing for Lexus to relentlessly pursue" in a play on Lexus' ad tagline.
(Read more...)
Posted by Michelle Krebs at 10:16 AM under Commentary , GM , Toyota | Comments (11) | digg this | del.icio.us
Frankfurt Motor Show: Enviro Plays, Luxury the Big Question
Press days for the Frankfurt auto show, one of Europe's most important international auto 
shows, kick off Tuesday, and the lineup of production models and concept cars oriented largely for the European market evidence an auto industry anxious to continue moving the environmental needle - but also grappling with how to keep luxury relevant.
Luxury is where the big profits lie, but many industry analysts say consumers - pounded by the eroded global economy and wracked retirement accounts - are girding for a prolonged downshift in their automotive desires that may leave luxury marques sucking wind.
(Read more...)
Posted by Michelle Krebs at 4:08 AM under Commentary , Companies , Featured , News , Technology | Comments (0) | digg this | del.icio.us
Ongoing Payback of Government Bailouts Will Focus Scrutiny on GM, Chrysler
Since early this summer, a handful of the nation's large banks starting paying back their share of emergency bailout loans taken under the controversial, $700-billion Troubled Asset Relief Program fund created by the Bush Administration last year. T
It was reported recently that eight major banks and investment firms that received TARP loans have repaid - and that the U.S. Department of Treasury's profit was about $4 billion and a tidy 15-percent return on the investment.
Although the money repaid represents only a small portion of the TARP funds extended to scores of banks large and small, some banks' prompt repayment is certain to lead the discussion to General Motors Co. and Chrysler Group LLC, two non-banks - along with their closely-aligned financing operations - that were extended a collective $65 billion in TARP funding.
(Read more...)
Posted by Michelle Krebs at 10:59 AM under Chrysler , Commentary , Companies , GM | Comments (0) | digg this | del.icio.us
Unnecessarily Viral Story of the Week: GM Volt Buyers 'Idiots'
Audi of America President Johan de Nysschen said to a reporter last week something to the 
effect of "people who want to buy Chevrolet's Volt (General Motors Co.'s endlessly hyped extended-range electric vehicle) are idiots."
Strong sentiment, to be sure. But worthy of the Internet firestorm the remark (in whatever form) fueled through the Labor Day weekend? Hardly. Auto industry and media: get a life. Relax. Enjoy a holiday every now and then.
There is something about the Volt - and what it represents as an environmental statement - that some think makes it above reproach. As de Nysschen discovered, criticism of the Volt often is interpreted as a political incorrectness manifesto.
(Read more...)
Posted by Michelle Krebs at 10:51 AM under Commentary , Companies , GM , In the Media , Personalities | Comments (4) | digg this | del.icio.us
COMMENTARY: Two Dozen New Models May Overcrowd GM's Four-Brand Garage
It's not unusual for General Motors Co. and other big car companies to show the media a 
couple year's worth of pending new models. The difference this week was that GM showed the goods - and allowed reporters to tell all about what they saw.
With the U.S. Treasury Department holding some $60 billion of its markers, GM must quickly convince all its stakeholders the company's got stuff people will want to buy. Good stuff - better than the stuff it insisted was good in the past. The kind of stuff that generates revenue that pays back the kind of debt GM's run up.
Notwithstanding the 230-miles-per-gallon Chevrolet Volt coming next year, GM brags it has some two dozen new-model launches scheduled between now and 2011, but this quantity indicates nothing about the more-important factor: whether a significant number of these new models are winners.
What GM wouldn't allow was photography. But we'll describe with a division-by-division analysis of the new products, most of which are coming by 2011:
(Read more...)
Posted by Michelle Krebs at 5:25 AM under Commentary , Featured , GM , Technology | Comments (5) | digg this | del.icio.us
More Money for Cash for Clunkers? Not So Fast
This week it seems the cacophony around Cash for Clunkers (C4C) has risen ever higher
with various parties competing to find superlatives for the program.
As the Senate this week contemplates additional funding that the House already passed Friday for the officially named Car Allowance Rebate System (CARS), it is a good time to step back and apply some logic to the question of the day: Is it wise to find more money to extend the program?
To be sure, Internet shopping activity is up, showroom traffic is up and so are sales. So for an industry that has been starving for customers all year, the answer would seem to be a resounding "yes."
We love a good sales surge as much as anyone, but to us the answer is not so simple, says Edmunds.com CEO Jeremy Anwyl.
(Read more...)
Posted by Michelle Krebs at 7:14 AM under Commentary , Companies | Comments (5) | digg this | del.icio.us
Mini Humor: My Other Car Was Demolished by the Government
Leave it to quirky Mini to come up with a humorous bumper sticker in the midst of the cash for clunker frenzh.
Posted by Michelle Krebs at 8:42 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
COMMENTARY Cart-Before-Horse Alert: Gov Plans Quick Sell of GM, Chrysler Stakes
With a combined $65 billion invested in the turnarounds of General Motors Co. and the
Chrysler Group LLC, the federal government Monday expressed an optimism for those companies' future that would have made their own executives blush: Ron Bloom, new chief of the Presidential Task Force On Autos, said the feds want to recoup the taxpayer dough as soon as possible after GM's planned initial public offering next year.
An IPO? That can generate billions? Next year?
Huh?
(Read more...)
Posted by Michelle Krebs at 5:14 AM under Chrysler , Commentary , Featured , GM | Comments (2) | digg this | del.icio.us
The Inconvenient Truth About "Cash for Clunkers" Is $20K Per Sale In Taxpayer Cash
Much has been written - both pro and con - about the so-called Cash for Clunkers program
that officially launched Monday.
Complexity, limited eligibility and minimal funding are common criticisms, but a chief filing of the program, according to Edmunds.com CEO Jeremy Anwyl is the cost to taxpayers. Even if Cash for Clunkers reaches its budgeted cap of $1 billion, the program will only help drive about 50,000 incremental new car sales, each of which will cost taxpayers a whopping $20,000, according to Edmunds.com's research.
(Read more...)
Posted by Michelle Krebs at 9:16 AM under Analysis , Commentary , Companies | Comments (6) | digg this | del.icio.us
GM's Lutz Already Making 'Em Nuts
By Bill Visnic
The ink wasn't yet dry on Bob Lutz's new contract with the newly constituted General Motors Co. to be vice chairman of, ah, just about everything, and Lutz was back to the business of baiting the media and most likely making his peers and superiors (if he has any) slightly crazy.
Exhibit 1: Lutz - whose job GM loosely and rather unnervingly describes as "vice chairman for all creative elements of products and customer relationships" - had Automobile magazine slurping out of his hand when he tossed out the remark that GM isn't going to let the rear-drive G8 sport sedan slip away with Pontiac when the division shuts down at the end of the year. The G8, Automobile breathlessly reported, will "live on" in the Chevrolet division as a new-age Caprice.
"The last time we looked at (the G8), we decided that we would continue to import it as a Chevrolet," Lutz told Automoblile.
The problem: GM CEO Fritz Henderson was widely quoted last month, including here on AutoObserver, as summarizing his product-development preferences by saying, "I'm no fan of rebadging," squarely implying the G8 would not continue under another nameplate after Pontiac's shutdown.
(Read more...)
Posted by Michelle Krebs at 3:58 AM under Commentary , Featured , GM , In the Media , Personalities , Rumors | Comments (8) | digg this | del.icio.us
New GM Management: Who Goes? Who Stays?
DETROIT -- The new General Motors, unveiled Friday, will be leaner particularly at its top
levels, which is begging the questions who goes and who stays?
The North American management structure is completely eliminated. So what happens to high-level, high-profile executives like Troy Clarke, who had held the post of North American president, and Mark LeNeve, who headed sales and marketing for North America.
CEO Fritz Henderson reiterated 35 percent of the U.S. management, largely at the highest
levels, will be eliminated. Who goes, who stays and what jobs those who stay will hold will be rolled out by the end of the month.
(Read more...)
Posted by Michelle Krebs at 7:19 AM under Commentary , GM , Personalities | Comments (0) | digg this | del.icio.us
GM CEO Henderson "No Fan" of Rebadging, but...
By Bill Visnic
During a recent Webcast with reporters, General Motors Corp. CEO Fritz Henderson said that when the Pontiac division turns out the lights at year-end, its critically acclaimed G8 sedan won't be picked up by any of GM's four remaining brands.
The CEO added: "I'm not a fan of rebadging."
If that's one of the reasons the G8 won't be seen wearing another division's crest, then Henderson has long suffered his distaste for rebadging: almost from its origin, GM's modus operandi has been rebadging, probably the most callous examples coming in the 1980s, when precious little in the way of genuine engineering differentiated one brand's vehicle from another.
And rebadging looks to be at least part of the modus operandi of the "new" GM to emerge from Chapter 11 bankruptcy.
(Read more...)
Posted by Michelle Krebs at 5:59 AM under Commentary , Featured , GM , In the Media | Comments (15) | digg this | del.icio.us
Americans Want Government Out of GM, Chrysler Quickly, Poll Says
Eight of 10 U.S. voters want the federal government to sell its stake in General Motors and Chrysler as soon as possible, according to a telephone survey done by Rasmussen Reports.
The federal government owns 60 percent of GM and 8 percent of Chrysler.
In fact, 64 percent of the 1,000 likely voters surveyed over last weekend said they favor a proposal that would force the government to sell their stake in the auto companies within a year. Only about 11 percent of the 1,000 likely voters surveyed over the weekend said they wanted the government to retain ownership.
(Read more...)
Posted by Michelle Krebs at 8:42 AM under Chrysler , Commentary , GM | Comments (0) | digg this | del.icio.us
Joke's on the Auto Sector - As Usual
The auto industry is an easy target for comics and this week's acquisition of the Chrysler Group by Fiat and the announcement of General Motors Corp.'s new chairman added new fuel to the comedic pyre.
Two of this week's best:
(Read more...)
Posted by Michelle Krebs at 4:02 AM under Chrysler , Commentary , Companies , GM | Comments (2) | digg this | del.icio.us
New MPG Standards Vs. Consumer Preference Incites Reader Debate
An AutoObserver story last week suggesting the federal government's proposed new
Corporate Average Fuel Economy (CAFE) standards may clash with Americans' taste in vehicles sparked a sometimes heated round of comments.
Using data from Edmunds.com comparing currently available models that can meet the 2016 CAFE mandate with the sales "popularity" of those vehicles demonstrated that in today's market, those vehicles have sporadic sales success.
Seeking to end years of conflict between federal fuel-economy and emissions mandates and the initiatives of many states typically led by California, President Obama announced federal CAFE standards of 39 miles per gallon for passenger cars and 30 mpg for light trucks.
(Read more...)
Posted by Michelle Krebs at 7:54 AM under Commentary , Companies | Comments (3) | digg this | del.icio.us
The Only Question: What Day Will GM File for Chapter 11?
By Michelle Krebs
DETROIT -- About the only question regarding a General Motors Chapter 11 bankruptcy filing that remains is what day it'll be filed.
GM announced Wednesday morning that bondholders, who had until midnight, to trade $27.2 billion in debt for a 10 percent stake in the restructured GM, had rejected the automaker's offer. GM confirmed that the number of bondholders who agreed to the deal "was substantially less" than the amount required by the U.S. Department of Treasury.
(Read more...)
Posted by Michelle Krebs at 6:42 AM under Commentary , Featured , GM , News | Comments (0) | digg this | del.icio.us
U.S. Congress: Take Note of U.K.'s Sputtering Scrappage Plan
Listen up, members of the U.S. Congress. As you write Cash for Clunkers legislation, take a
lesson from the Brits and keep it simple.
The car scrappage scheme that took effect in the United Kingdom Monday and championed by Prime Minister Gordon Brown sputtered at the starting line Monday.
Dealership and auto execs as well as consumers were flummoxed about how the new program works, prompting several major automakers to delay their involvement, causing Brown embarrassment and giving his opponents fresh fodder for criticism.
(Read more...)
Posted by Michelle Krebs at 11:43 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
New Fuel Rules: Automakers May Build Them, but Will Customers Buy Them?
By Michelle Krebs
PresidentObama declared the new combined fuel-economy and emissions standards historic.Ina press conference in the White House rose garden, surrounded byenvironmentalists and captains of theglobal auto industry, Obama said the new rules mark thenation's first comprehensive effort to curb vehicle emissions while cutting dependence on imported oil -- aturning point toward a "clean-energy economy."
Still, the new standards fall short on one critical element: What will make consumers buy the new clean vehicles required by the law?
The government can dictate that automakers build highly fuel-efficient vehicles that emit few pollutants, but will customers buy them? Recent history illustrates that customers are not stirred by their conscience but by their wallets, buying smaller, fuel-economy cars only when gas prices rise to the point of hurting them financially.
"Defining what should be built does not create demand," asserted Edmunds.com CEO Jeremy Anwyl. "There are tons of great fuel-efficient cars out there today but most consumers aren't interested, and the new fuel-economy standards don't appeal to deal with the demand side at all."
(Read more...)
Posted by Michelle Krebs at 6:18 AM under Commentary , Companies , Featured , Technology | Comments (7) | digg this | del.icio.us
Commentary: Marchionne's Plan Is Gutsy but Iffy
By Richard Feast
LONDON -- Fiat CEO Sergio Marchionne scores top marks for ambition. His grand plan to sweep the whole of Chrysler plus General Motors' extensive European arm into Fiat's car operations is truly gutsy.
He may yet make the vision a reality. However, his chances of turning the partnership -- or whatever it might be called -- into a long-term success are minimal. The auto industry is littered with the memorials of empire builders who were long on vision and short on delivery.
And yet, despite the most severe economic collapse since the emergence of a globalized auto industry, Super Sergio wants to push through two deals simultaneously. Maybe he believes all those adoring media profiles.
(Read more...)
Posted by Michelle Krebs at 4:16 AM under Chrysler , Commentary , Companies , Featured | Comments (1) | digg this | del.icio.us
Chrysler Dissident Investors Cave; Political, Legal Wounds Linger
By Bill Visnic
Industry analysts. Political commentators. Legal scholars (and those who think they are). Journalists.
Everyone's got an opinion -- plenty of it critical -- about how the Chrysler Chapter 11 bankruptcy has gone down and is proceeding. And about whether Fiat's resulting takeover of Chrysler can really work.
Most criticism of "the deal" focuses on whether the government, acting as the agent of compromise and haste, outstepped legal and ethical boundaries in abrogating the property rights of Chrysler's secured creditors and later "strong arming" those creditors who rejected a government offer of about one-third the value of their holdings.
Whether the bullying was real or perceived no longer matters. The remaining secured-lender holdouts, their numbers dwindling by the day, announced late last week they are withdrawing their objection of the bankruptcy procedure laid out to allow the sale of Chrysler's assets to a new, reconfigured Chrysler run by Fiat.
(Read more...)
Posted by Michelle Krebs at 6:12 AM under Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
Cash for Clunkers: Sales Boom If Quick; Bust If It Stalls
SANTA MONICA, Calif. -- A Cash for Clunkers program edging its way through Congress could create a desperately needed sales boom for automakers and their dealers if Congress moves quickly, according to Edmunds.com's analysis.
However, if legislation lingers in Congress too long, new-car sales could stall as consumers wait for the final program to be passed.
"Congress needs to pull the trigger," says Edmunds.com CEO Jeremy Anwyl. "The more the publicity on Cash for Clunkers, the more likely sales will drop off as people wait."
(Read more...)
Posted by Michelle Krebs at 4:15 AM under Analysis , Commentary , Companies | Comments (8) | digg this | del.icio.us
Chrysler's Politicized Bankruptcy a Warm-Up for GM
By Bill Visnic
Watching and analyzing as the increasingly contentious Chrysler bankruptcy unfolds, a Detroit-area legal expert on bankruptcy and creditors' rights reckons the charged atmosphere surrounding Chrysler's trip to bankruptcy court is a warm-up act for the headline show: the bankruptcy of much-larger General Motors Corp.
Although the Chrysler bankruptcy already has generated something only slightly less than a full-blown political firestorm and is proceeding with questionable ethical and legal departures from established bankruptcy conventions, "We may well face it again in a month," as GM's bankruptcy deadline nears, said Doug Bernstein, a partner in the Bloomfield Hills, Michigan, legal firm Plunkett Clooney and head of the firm's Banking, Bankruptcy and Creditors' Rights practice group.
(Read more...)
Posted by Michelle Krebs at 3:49 AM under Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
Chevrolet Volt: First Media Test Drives Given
The dance of the seven veils continues as General Motors recently began offering early, early test drives of its highly anticipated 2011 Chevrolet Volt.
Edmunds' Inside Line Senior Editor Dan Pund was among the early test drivers of the engineering development car, commonly known in the industry as a "mule."
Pund called his test drive more of a progress report than a final assessment and reports its development is coming along nicely. But much more is yet to be known about the Volt, that is supposed to come out near the end of 2010.
Posted by Michelle Krebs at 1:19 PM under Commentary , GM , Technology | Comments (0) | digg this | del.icio.us
Good and Bad Ideas From Massachusetts
By Bill Visnic
There are all manner of schemes being proposed to address the needs of dwindling state and federal coffers, many of which often focus on hitting the wallets of the driving public.
But rare is the state that has two driving-taxation plans as simultaneously enlightened and enraging as the state of Massachusetts. Both have been promoted by Gov. Deval Patrick.
(Read more...)
Posted by Michelle Krebs at 4:01 PM under Commentary , Featured , News , Personalities | Comments (3) | digg this | del.icio.us
Chrysler-Fiat: "Value" for Fiat Means "Free"
By Bill Visnic
With a May 1 deadline to make a deal with stakeholders -- a prerequisite of subsequently partnering with Fiat S.p.A. -- bearing down on Chrysler LLC lest the Obama administration's Auto Task Force take Chrysler into some form of bankruptcy, the posturing is heating up, particularly from Fiat Chief Executive Office Sergio Marchionne.
First, Marchionne threatened Fiat will deep-six its offer to tie up with Chrysler if the company cannot wrest further wage concessions from its U.S. and Canadian labor unions, concessions presumably to bring wages to parity with non-unionized Japanese transplant automakers in the U.S.
The unsubtle warning failed to immediately produce the desired result from either the United Auto Workers or the Canadian auto workers unions.
(Read more...)
Posted by Michelle Krebs at 4:18 AM under Analysis , Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
U.S. Manufacturing Slashing Cost Gap
A new study brings a glimmer of positive news for the embattled U.S. manufacturing sector,
saying U.S. producers are making headway in reducing structural costs.
The Manufacturing Institute and the Manufacturers Alliance/MAPI says U.S. manufacturers have reduced five primary structural-cost measures compared with foreign manufacturers that make a comparable product, according to a commentary in the Pittsburgh Post-Gazette.
The study, aided by the accounting firm of Deloitte and reported by Deloitte employee Dmitri D. Shiry to the Post-Gazette, says the structural-cost "gap" between U.S. manufacturers and foreign producers making a similar product was cut to 17.6 percent in 2007 versus 31.7 percent in 2006. The 2006 disadvantage of 31.7 percent was a markedly worse figure than 2004's structural-cost gap of 22.4 percent.
(Read more...)
Posted by Michelle Krebs at 4:54 AM under Analysis , Commentary , Companies | Comments (0) | digg this | del.icio.us
BMW Gets Loopy - and It's Not Even Octoberfest Yet
By Bill Visnic
Maybe they're growing the hops just a little too close to the medicinal marijuana over there in Germany. A media report this week says BMW AG is considering abandoning its legendary inline six-cylinder engine design in favor of a V6 layout.
A V6 in place of the magnificent inline six-cylinder engine design on which the very foundation of the company was built? Magnifying the madness, the proposed sacrilege comes from no less than BMW's high-performance Motorsports division.
Yes, the M division is considering ditching the hallowed I-6 when it's time for the next-generation M3 around 2013, Ludwig Willisch, top dog at BMW's M division, was reported as saying at Motor Trend.com.
(Read more...)
Posted by Michelle Krebs at 4:47 AM under Commentary , Companies , Featured , Rumors , Technology | Comments (1) | digg this | del.icio.us
Chevrolet Camaro Wins Edmunds' Inside Line Muscle Car Comparison Test
SANTA MONICA, Calif. -- Inside Line, Edmunds.com's online car magazine and sister site
of AutoObserver.com
, announced Wednesday that the 2010 Chevrolet Camaro SS took first place in its latest comparison test of iconic muscle cars.
The comparison is described in full at the 2010 Chevy Camaro SS vs. 2009 Dodge Challenger R/T vs. 2010 Ford Mustang GT Comparison Test.
"Car enthusiasts can rejoice that all three of these legendary pony cars have made a comeback," says Jay Kavanagh, Edmunds' Inside Line Engineering Editor. "But the 2010 Chevrolet Camaro SS leads the pack with its combination of power, speed and attitude."
(Read more...)
Posted by Michelle Krebs at 9:59 AM under Analysis , Chrysler , Commentary , Companies , Ford , GM | Comments (0) | digg this | del.icio.us
College Hoops and Ailing Automakers
What do college basketball and troubled U.S. automakers have in common?
Plenty this year. The NCAA championship is taking place in Detroitand the "blue-collar" hometown team, Michigan State University, is in the final Monday night, to the surprise of many and the upset ofthose playing the brackets.
Indeed, as Wall Street Journal columnist Austin Kelley noted in Monday's edition, sports fans who wanted to forget General Motors' troubles and divert attention to college basketball were out of luck this weekend. "The specter of the ailing automaker was everywhere," he wrote.
(Read more...)
Posted by Michelle Krebs at 8:56 AM under Commentary , Ford , GM , In the Media , Personalities | Comments (0) | digg this | del.icio.us
President Obama: Auto Industry Cannot Vanish
President Obama sent a message this weekend to auto workers and residents of
auto towns that the U.S. "cannot let our auto industry vanish."
President Obama, in a column under his byline that appeared in select Midwest newspapers, said the reason the U.S. government is supporting General Motors and Chrysler with loans is because the auto industry "is an emblem of America" that helped build and sustain the middle class."
Obama acknowledged auto workers and auto towns had been through much pain and indicated they needed to brace for even more.
(Read more...)
Posted by Michelle Krebs at 6:15 AM under Chrysler , Commentary , Companies , GM , In the Media , Personalities | Comments (0) | digg this | del.icio.us
GM Advisor: Doubts Bankruptcy Is Chosen Route
Roger C. Altman, chairman and CEO of investment firm Evercore Partners and currently an
advisor to General Motors in its restructuring, says he doubts bankruptcy is the way struggling automakers likeGM and Chrysler will go.
Altman was asked in an interview with the Financial Times, if we will see prepackaged bankruptcies for some carmakers. "The administration hasn't entirely made clear its position on that. So I'm not sure, but I would be skeptical that's the route this will go," he responded.
"I think the companies -- and let me focus particularly on General Motors, because that's the one I know best because we represent GM -- have made much more progress than people realized, in improving product quality, improving fuel-efficiency, streamlining themselves, lowering labor cost differentials dramatically relative to the transplant costs, and so forth," he added.
(Read more...)
Posted by Michelle Krebs at 6:32 AM under Commentary , Companies , GM , In the Media , Personalities | Comments (1) | digg this | del.icio.us
Tata Nano Makes a Positive First Impression
By Nick Kurczewski
PIMPRI, India -- Instead of racing to jumpbehind the wheel of the fancy top-of-the-line model as they do at other vehicle introductions, journalists scrambled to grab the lone base version of the Tata Nano -- black plastic bumpers and all -- to take itfor a spin on Tata's test track in Pimpri, two hours outside of Mumbai.
Indeed, it is the price tag -- the equivalent of $2,000 -- that has caused the tiny Tata Nano to capture everyone's attention as it is currently the world's cheapest car.
(Read more...)
Posted by Michelle Krebs at 3:54 PM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
Chevy Camaro: My Muscle Car's More Like a Prius Than Yours
By Bill Visnic
DETROIT --
Back when the car business was fun and nobody knew one hydrocarbon from the next, muscle car talk was big-block V8s, cam-lobe profiles -- and, of course, mine's got more horsepower than yours.
Now, you'd be forgiven for wondering if the new-generation 2010 Camaro -- a nameplate with a storied history built around all of the above -- even offers a V8.
The new Camaro hit showrooms this week. In the information distributed to the press, the overview summarizing the 2010 Camaro carries the headline, "The Chevy Camaro -- A Fun, Efficient Sports Car for the 21st Century." There is lengthy discussion about the new Camaro's design, interior, even safety features, but not a word about the engines that power this reincarnation of the brand's most famous muscle car.
(Read more...)
Posted by Michelle Krebs at 12:16 PM under Commentary , Featured , GM | Comments (3) | digg this | del.icio.us
Obama on Leno: Talking Auto Industry
By Michelle Krebs
President Obama didn't spend much time during his historic appearance on The Tonight Show
talking about the auto industry to car-crazed host Jay Leno. But what he did say made it sound like he understoodthat new-car sales are simply too low for the industry to be successful.
President Obama noted that the U.S. car sales are running at an annual rate of 9 million vehicles, well below even the usual rate of replacement for worn-out vehicles, and that 14 million new cars a year would be more normal.
(Read more...)
Posted by Michelle Krebs at 7:09 AM under Commentary , Companies , GM , In the Media , Personalities , Technology | Comments (0) | digg this | del.icio.us
Newly Born Baby Boomers: What Cars Will They Buy?
By Michelle Krebs
When he was Toyota's top American executive, Jim Press often cited his visits to the hospital nursery to support his prediction that U.S. motor vehicle sales would hit 20 million units a year.
"What I see in each of those baskets is 20 purchase cycles," Press, now president of Chrysler, would say of the rows of babies -- future car buyers -- in cribs.
Press no longer predicts 20 million vehicle sales; instead he sees 14 million at best for the near future. Nevertheless the hospital nurseries are jampacked with a record number of new babies.
(Read more...)
Posted by Michelle Krebs at 7:04 AM under Chrysler , Commentary , News , Personalities , Toyota | Comments (0) | digg this | del.icio.us
GM Takes Issue With Wall Street Journal Coverage
By Michelle Krebs
DETROIT - General Motors has gone public with the fact that it has issues with the Wall Street Journal's
coverage of the automaker's situation and its constant focus on a GMbankruptcy.
In a blog post on GM's Fast Lane, the automaker points out that: "In headline after headline, story after story, the front pages of the paper have promoted bankruptcy as a solution for GM."
The final straw for a frustrated GM was a Journal story this week entitled "GM's Chief Shifts Posture on Surviving Bankruptcy," calling it "yet one more distortion of GM's position on this critical issue."
(Read more...)
Posted by Michelle Krebs at 10:40 AM under Commentary , GM , In the Media | Comments (2) | digg this | del.icio.us
AIG Angst: The Auto Industry and Detroit Protest Bonuses Loudest
By Michelle Krebs
President Obama and others on Capitol Hill expressed their indignation Monday over the revelation that American International Group Inc. (AIG) plans to reward its top executives with $165 million in bonuses despite the fact that the insurance giant is being kept afloat by U.S. taxpayers.
But no one is more outraged about the AIG bonuses than those in the auto industry, especially those in Detroit.
Michigan Congressman Gary Peters introduced a bill Monday night, one he's been promoting on the airwaves of business programs all day Tuesday, that allows the AIG bonuses to be paid -- and then taxes them at 100 percent to recover the cash for taxpayers.
(Read more...)
Posted by Michelle Krebs at 12:20 PM under Chrysler , Commentary , Companies , GM , Personalities | Comments (2) | digg this | del.icio.us
German YouTube Video Shows No Love Lost Between Opel and GM
By Michelle Krebs
DETROIT -- As General Motors and the German government wrangle about how to fund and structure GM's German subsidiary Adam Opel, a video now posted on YouTube
illustrates what many at Opel think of their corporate parent.
Despite being in German, the gist of the video for even those who don't understand German is crystal clear: GM has stripped Opel cars of content, robbed Opel's till of cash and now is strong-arming the German government for money to keep the automaker afloat.
(Read more...)
Posted by Michelle Krebs at 7:13 AM under Commentary , GM , In the Media | Comments (2) | digg this | del.icio.us
Memo to Obama Auto Task Force: It Ain't About Labor
By Bill Visnic
This week, the United Auto Workers union agreed to more cutbacks to help the Detroit Three automakers get back on their feet. The UAW rank and file at Ford ratified concessions. UAW and General Motors negotiators reportedly hammered out similar concessions Tuesday night that will be voted on by GM workers. Next up for give-backs will beChrysler workers.
But once again, the predicament the Big Three are in isn't about labor costs; it's about the product.
(Read more...)
Posted by Michelle Krebs at 4:40 AM under Chrysler , Commentary , Companies , Featured , Ford | Comments (3) | digg this | del.icio.us
Tracinda's Jerry York Says "I Told You So" in More Polite Terms
You just know Jerome York is dying to say it: "I told you so."
The former Chrysler executive who served on General Motors' board of directors representing the interests of billionaire Kirk Kerkorian, had insisted the Detroit automakerditch money-losing Saab and Hummer. ButGM executives refused to entertain the notion. They insisted the automaker's many brands were an asset: not, as York contended, a drain on resources.
Now look where GM is -- staying afloat on government loans as it sets Saab loose and has Hummer on the auction block with a plan to eliminate it if no buyer is found.
(Read more...)
Posted by Michelle Krebs at 7:20 AM under Chrysler , Commentary , Companies , Ford , GM , Personalities | Comments (0) | digg this | del.icio.us
Subaru and Mitsubishi Among Japanese Makers Seeking Government Loans
By Bill Visnic
Fuji Heavy Industries Ltd. Inc.'s Subaru automaking unit is one of the handful of makers seemingly keeping ahead of withering U.S. auto demand. Yet it was reported this week that even Fuji is seeking a government-backed low-interest loan reported to be approximately $102 million as security against a continuing sales slump.
Auto-industry sales in Japan have been tanking in concert with the U.S. market (Japan auto sales were down 32.4 percent last month), yet in the U.S., Subaru managed a 4-percent hike in sales compared with February 2008.
(Read more...)
Posted by Michelle Krebs at 3:24 AM under Business , Commentary , Companies , Featured | Comments (1) | digg this | del.icio.us
President Obama's Auto Advisors Visit Detroit
DETROIT -- Representatives of President Barack Obama's automotive task force are visiting
Detroit Monday. Their trip includes a tour of a Chrysler assembly plant and General Motor's Technical Center and a test-drive of the Chevrolet Volt.
All the while, auto company executives will try to convince them further federal assistance is a worthwhile investment for taxpayers.
Their visit comes as Republicans cranked up the volume on their opposition to support Detroit automakers and yet another survey showed the American public generally is opposed as well.
(Read more...)
Posted by Michelle Krebs at 7:59 AM under Business , Commentary , Companies , Ford , GM , Personalities , Technology , Toyota | Comments (0) | digg this | del.icio.us
Geneva Motor Show: Curtain Call More Than Curtain Raiser
By Nick Kurczewski
GENEVA - This year's Geneva motor showmight well be remembered asthe curtain call for several struggling automotive brands morethan a curtain-raiser for exciting new vehicles.
Nearly every major car company along with the eclectic mix of sports car and design firms that give Geneva its unique appeal are in attendance at the show, which held its press days last week and now is open to the public.
But like the dozens of closed or idled car factories around the world, Geneva seemed eerily quiet for a place that should have been buzzing with activity. Even the most noteworthy new vehicles failed to provide a necessary spark to lift the crowd.
(Read more...)
Posted by Michelle Krebs at 7:52 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
GM Plight: An Example of 'Day of Reckoning'
White House Chief of Staff Rahm Emanuel had some harsh words for General Motors on a Sunday news program, prompting questions about what the Obama administration has in mind for restructuring GM and Chrysler.
Emanuel told CBS' Face the Nation GM's situation is "a wakeup call to America" to increase energy independence and overhaul the nation's health care system. GM's plight is an example of "a day of reckoning," Emanuel said.
(Read more...)
Posted by Michelle Krebs at 7:37 AM under Chrysler , Commentary , Ford , GM | Comments (1) | digg this | del.icio.us
GM's Saturn Spin-Off Could Be Opening for Chinese, Indian Automakers
By Michelle Krebs
DETROIT -- General Motors is moving toward a spin-off of its Saturn brand and is open to
selling vehicles from other automakers through the Saturn dealer network, according to a letter sent to Saturn owners.
Such a move would be a perfect door into the U.S. market for Chinese and Indian automakers.
If an alliance with Chrysler fails to materialize, Fiat -- long chomping at the bit to return to the U.S. with its Alfa Romeo models and launch its popular Fiat 500 here -- would be another possibility.
(Read more...)
Posted by Michelle Krebs at 11:11 AM under Business , Commentary , Featured , GM | Comments (0) | digg this | del.icio.us
Bailout-Bank CEO Flies Company Jet to Super Bowl
By Bill Visnic
Another for Corporate America's bulging "Why Do People Hate Us?" file: The Pittsburgh Post-Gazette
reports that Jim Rohr, CEO of PNC Financial Services group, flew with "clients" in a company-owned private jet to the Super Bowl in Tampa, Florida, earlier this month.
This, of course, after the CEOs of the Detroit Three automakers were berated in November for flying corporate jets to a full-blown business meeting with the government. The congressional outrage and public jack-up over the stunt caused the automakers to pledge to sell the jets and travel less extravagantly -- even for more business-oriented situations than attending the Super Bowl.
.
(Read more...)
Posted by Michelle Krebs at 6:48 AM under Commentary , Companies | Comments (1) | digg this | del.icio.us
Hyundai Boss Blasts Auto Industry, Says It's 'Viewed With Contempt'
By Bill Visnic
CHICAGO -- Telling an assembled crowd of media and auto-industry representatives here for the Chicago auto show that although the global economic meltdown certainly helped to destruct the auto industry in the U.S., John Krafcik, acting president and CEO of Hyundai Motor America, said the industry itself is largely to blame because of its past bad behavior.
And now the day of reckoning with consumers (and legislators) has arrived.
Avowing the auto industry is "viewed with contempt" in the U.S., Krafcik dealt out a staccato string of candid and hard-hitting tough-love messages in a speech to open the media days of the show.
(Read more...)
Posted by Michelle Krebs at 1:24 PM under Commentary , Companies , Featured , News , Personalities | Comments (3) | digg this | del.icio.us
Chrysler Hit by Lawsuits; Is Bankruptcy A Way to Cope?
By Michelle Krebs
Chrysler has been socked by two lawsuits in as many days, prompting at least one expert to wonder if more lawsuits can be expected and force Chrysler into official bankruptcy proceedings.
French-based Faurecia has sued Chrysler, claiming the automaker owes the supplier $110 million for engineering and research costs as well as handing its research over to the Chinese.
Another lawsuit filed in Delaware charges Chrysler is automatically denying workers' compensation claims over a spinal-cord treatment for employees injured on the job. The suit seeks class-action status.
Meantime, a bankruptcy lawyer in Detroit suggests a flurry of lawsuits is often a reason for companies to file for bankruptcy.
(Read more...)
Posted by Michelle Krebs at 1:14 PM under Analysis , Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
COMMENTARY Behind the Headlines: News and Maneuvers Get Weirder
By Bill Visnic
The auto industry seemed to have reached agreement earlier this month to hunker down and allow the geared-down Detroit auto show to flicker on without anything as distracting as news to interfere.
That all changed this week, as it seems everyone's talking, dealing, reporting, conjecturing and speculating. Plenty of this news is explicitly bizarre.
A rundown of some of this week's happenings, along with the between-the-lines summary courtesy of AutoObserver's branded decoder ring:
(Read more...)
Posted by Michelle Krebs at 5:04 PM under Chrysler , Commentary , Companies , Featured , Ford , GM , Personalities | Comments (0) | digg this | del.icio.us
Grounded Citicorp Joins Big Three
Welcome to the club - the corporate jetless club, Citicorp executives. You are in good company.
Despite taking $50 billion in federal funds to stay afloat, Citicorp only canceled delivery of a fancy $50-million corporate jet when the American public found out -- and a U.S. Senator gave bank officials a public tongue lashing.
U.S. Sen. Carl Levin, D-Mich., who advocated federal help to Detroit automakers, has been cheesed about Congress' double standard for the banks and the automakers.
(Read more...)
Posted by Michelle Krebs at 7:12 AM under Chrysler , Commentary , Ford , GM | Comments (0) | digg this | del.icio.us
Car Czar Gives Way to Car Czars
By Michelle Krebs
Timothy Geithner, President Barack Obama's nominee for U.S. Treasury Secretary, testified to Congress Wednesday that the new administration intended to assembly a team of experts to oversee the loans to automakers.
Geithner told the Senate Finance Committee during his confirmation hearings that the team would have "expertise in manufacturing, in restructuring, who understand how these labor contracts work."
Automakers should be thrilled at the news since it was frighteningly evident during last fall's Congressional hearings on aide to U.S. automakers that most government officials and Congressmen are generally ignorant about the extremely complex auto industry. Finding a single individual who understood all of the aspects of the auto industry would be impossible. And if President Obama's picks for other government posts are any indication, the car czars will a bright, talented and pragmatic lot.
(Read more...)
Posted by Michelle Krebs at 8:23 AM under Chrysler , Commentary , Ford , GM , Personalities | Comments (0) | digg this | del.icio.us
COMMENTARY: Fiat-Chrysler Link Is Nice Idea, but Futile Without Money
By Bill Visnic
Fiat S.p.A.'s acquisition of 35 percent of Chrysler has all the good-sounding trappings of an auto-industry alliance that, under normal circumstances, would indicate another industry tie-up that might bear fruit.
But in the supercharged atmosphere currently surrounding the auto sector -- and particularly the at-risk U.S. domestic automakers -- the deal is being considered by some as the salvation of Chrysler.
The prolongation of Chrysler's likely dissolution is the more viable assessment of Tuesday's announced Fiat-Chrysler deal because it includes no cash infusion to Chrysler.
(Read more...)
Posted by Michelle Krebs at 4:31 AM under Analysis , Business , Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
Higher Gas Tax Could Drive Buyers to Fuel-Efficiency, Edmunds.com Says
Jeremy Anwyl, CEO of Edmunds.com
(parent of AutoObserver.com
), appeared as a guest on Fox Business News this week where he advanced the idea of a higher gas tax to encourage consumers to buy fuel-efficient cars. Always controversial, a higher gas tax also was being discussed this week at the Detroit auto show, as detailed by Edmunds' Green Car Advisor
. Anwyl chatted with AutoObserver
, providing a deeper explanation of his position.
You told Neil Cavuto, the host of Fox Business News, that you supported a higher gas tax. Explain what you meant.
I'd be the last person standing to suggest we need higher taxes. An argument could also be made that consumers should be able to buy any vehicle they want. But for the past 30 years we have tried to move people to more fuel-efficient vehicles with government Corporate Average Fuel Economy (CAFE) standards put in place by the federal government. It hasn't worked. If the government is going to mandate that automakers focus on building fuel-efficient vehicles, government must also ensure that there will be a market for them. A higher gas tax will help. I also believe that the higher gas tax should be accompanied by an income tax reduction so that government isn't taking additional money out of the economy, but rather shifts the source of the money it does take.
(Read more...)
Posted by Michelle Krebs at 12:14 PM under Commentary | Comments (7) | digg this | del.icio.us
Edmunds.com Gives Away $10 Million of Ads Urging Americans To Buy Cars
Online car-buying site Edmunds.com, parent of AutoObserver, is giving away $10 million
worth of advertising in an effort to spur Americans to start buying new cars and trucks again and is asking other media companies to follow suit.
"While we all can feel optimistic about a new year, a new presidential administration and other elements of our future, we can't ignore the fact that this is an incredibly difficult economic time," said Edmunds.com CEO Jeremy Anwyl in his letter to media publishers. "In better years, we've all built businesses that rely heavily on the car business. Now, the car business needs our help. Can we publishers do something to recharge the car business, and, in turn, our economy? We think so."
(Read more...)
Posted by Michelle Krebs at 8:09 AM under Business , Commentary | Comments (0) | digg this | del.icio.us
Chrysler's 'Thank You' Ads: Not the Best Idea
By Bill Visnic
Readers of the nation's major newspapers -- those still reading paper, anyway -- by now have seen splashy full-page ads from Chrysler LLC thanking "America" for its bailout-investment in the company.
No harm in being contrite, but just like winging into Washington, D.C., on a trio of exec jets to demonstrate their dire financial straits, the "Thank You, America" ad isn't going to go down as one of Detroit, Inc.'s more wizened PR stunts.
(Read more...)
Posted by Michelle Krebs at 9:34 AM under Chrysler , Commentary , In the Media | Comments (2) | digg this | del.icio.us
America's Banks and Brokers: 'We Don't Need No Stinkin' Accountability'
By Bill Visnic
Much already has been made of the dichotomy between how the nation's President and top lawmakers approached the $700-billion bailout of the blundering financial sector and the hard line they subsequently took with General Motors Corp., Ford Motor Co. and Chrysler.
In short: money couldn't be thrown fast enough or hard enough at Wall Street's stumblebum barons and fractured finance firms. Yet the same players who insisted tossing steamer trunks of money at banks and brokers was the only way to avert a "crisis" in the entire financial sector found fiscal religion mere weeks later when they pilloried the chiefs of Detroit's automakers for needing a fraction of the welfare handed to Wall Street.
But now the situation's become even more ironic - and troubling.
(Read more...)
Posted by Michelle Krebs at 4:26 AM under Commentary , Companies , Featured | Comments (4) | digg this | del.icio.us
It May Not Be Bankruptcy, but Chrysler Deconstruction Inevitable
By Bill Visnic
President George W. Bush finally released the crucial billions needed to keep General Motors Corp. and Chrysler LLC around to see the new year, but with the real work just beginning, the wrenching save-Detroit soap opera seems to be grinding towards just one certainty: Chrysler LLC isn't going to make it.
If the maneuverings of the past several weeks haven't twisted the automotive Rubik's Cube enough for everyone to see the inevitable outcome, the reality is telegraphed loud and clear in the White House's "bailout" numbers: GM will bask in the holiday glow of $4 billion on Dec. 29, another $5.4 billion barely two weeks later and an additional $4 billion in February, for a total of $13.4 billion.
Chrysler gets $4 billion on Dec. 29. That's it.
(Read more...)
Posted by Michelle Krebs at 3:39 AM under Analysis , Chrysler , Commentary , Featured | Comments (3) | digg this | del.icio.us
Remember Katrina, Senators
Detroit Free Press columnist Tom Walsh reminds senators from the Gulf States, many of
whom oppose the loans to Detroit automakers,to recall Hurricane Katrina as they cast their votes on the bailout bill tonight.
"When Hurricane Katrina slammed into Louisiana and Alabama on Aug. 29, 2005, the automobile companies of Detroit did not harrumph that the Gulf Coast should have been better prepared. They didn't sit back and wait for New Orleans to submit a detailed plan for future repair of the ruptured levees," Walsh wrote in Thursday's edition.
(Read more...)
Posted by Michelle Krebs at 4:51 PM under Chrysler , Commentary , Ford , GM , In the Media | Comments (5) | digg this | del.icio.us
NYT Columnist: Detroit Aid Should Hinge on Hybridizing Everything
By Bill Visnic
With a pending vote Congressional vote on a bailout package to extend so-called "bridge loans" to Chrysler LLC, Ford Motor Co. and General Motors Corp. by perhaps as soon as this week, New York Times
columnist Thomas L. Friedman -- often prominent for his provocative views on the auto industry -- is calling for one unique "string" to be attached to federal bailout funds: forcing the domestic automakers to present plans to hybridize their entire model ranges in three years.
Friedman has been a vocal advocate for hybrid-electric technology and has been criticized for a view of the industry that typically is unkind to the Detroit auto-industry establishment. Friedman often argues in favor of the management style and operational practices of Detroit's chief competitors, the Japan-based automakers -- and caused fireworks when he once suggested GM should go out of business and let Toyota assume GM's longstanding role.
(Read more...)
Posted by Michelle Krebs at 1:32 PM under Business , Chrysler , Commentary , Companies , Ford , GM , In the Media , Toyota | Comments (8) | digg this | del.icio.us
7 Myths About Detroit Automakers, Detroit Free Press
The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are seven myths about the companies and their vehicles, and the reality in each case.
This column by Detroit Free Press auto critic Mark Phelan originally was published on November 17 and was updated last Friday to debunk the myths as Congress was about to fashion an automotive rescue package.
(Read more...)
Posted by Michelle Krebs at 5:33 AM under Analysis , Chrysler , Commentary , Ford , GM , Technology , Toyota | Comments (1) | digg this | del.icio.us
Saudi King Suddenly Hopeful For $75 Oil; Us, Too
By Bill Visnic
At a meeting of the Organization of Petroleum Exporting Countries (OPEC) over the weekend, Saudi Arabia's King Abdullah reportedly said the "fair price" for petroleum is $75 per barrel.
The figure is demonstrably more than the sub-$50/barrel price oil plunged to this week as OPEC members squabble about the need for production cuts to bolster the price of petroleum. But King Addullah's newly announced fair price also is almost half the peak of $147 per barrel oil reached this summer - a figure none in the petroleum industry indicated was excessive or unreasonable as giant oil refiners defended $4-per-gallon gasoline and $5 diesel fuel in the U.S.
(Read more...)
Posted by Michelle Krebs at 6:13 PM under Business , Commentary | Comments (1) | digg this | del.icio.us
COMMENTARY: For Bailout Blueprint, GM, Ford Might Finally Burn Rubber on Underperforming Brands
By Bill Visnic
The plans the Detroit Three automakers are developing to submit on December 2 to Congress in justification for their entreated $25-billion federal loan probably are being more closely guarded than the manuscript for Sarah Palin's first book, but we can guess one aspect that seems certain to feature in the bailout blueprint of both Ford Motor Co. and General Motors Corp.: ditching some brands that have long dogged their ever-more-fragile bottom lines.
For at least a decade, critics have shouted down both GM and Ford for refusing to do what it now appears must be done -- stop supporting underperforming divisions.
Rumors howling in Detroit's November winds point to brand-burning as one of the primary ways the companies plan to demonstrate to Congress they will be able to sustain their operations in a U.S. auto market that is expected to be decidedly unkind for all of 2009 and possibly well into 2010.
(Read more...)
Posted by Bill Visnic at 3:15 AM under Analysis , Business , Commentary , Ford , GM | Comments (9) | digg this | del.icio.us
Tracking the Bailout: When the Music Stops, Who's Going Bankrupt?
By Bill Visnic
The CEOs of Ford Motor Co., General Motors Corp. and Chrysler LLC loaded up on their much-maligned corporate jets and winged out of Washington, DC, this week with no bailout money -- but the assurance of a shaky holiday season.
After Democratic deal-makers conceded this week there would not be sufficient bipartisan support to approve a bill to "repurpose" the existing and already approved $25-billion Department of Energy loan (originally intended to promote the development of fuel-efficient technology and retool factories), the initiative was shelved until a possible vote on December 8.
That promises to be a rocky 17 days for GM and Chrysler, whose bosses insinuate the companies may not have the funds to enable them to see the New Year.
(Read more...)
Posted by Michelle Krebs at 4:25 AM under Chrysler , Commentary , Companies , Featured , Ford , GM | Comments (3) | digg this | del.icio.us
Mitt Romney: Let Detroit Go Bankrupt
By Michelle Krebs
Detroit-born Mitt Romney, a candidate for this year's Republican presidential nomination and whose father was Michigan governor and an auto company executive, advocates letting Detroit automakers go bankrupt.
In an OpEd piece carried in Wednesday's edition of The New York Times, Romney, who is expected to make another presidential run in 2012, wrote: "Detroit needs a turnaround not a check." He suggested the turnaround path is through a managed bankruptcy.
What a difference a failed presidential run makes! Romney won the Michigan Republican primary against the eventual presidential candidate John McCain by being a booster for Detroit's auto industry.
(Read more...)
Posted by Michelle Krebs at 9:42 AM under Chrysler , Commentary , Personalities | Comments (2) | digg this | del.icio.us
GM's Wagoner: Industry Collapse Would Represent a "Massive Economic Dislocation"
General Motors Chairman and CEO Rick Wagoner told Congress a collapse of the U.S. auto
industry would have a devastatingimpact across the entire U.S. economy.
Wagoner defended GM's progress in transforming itself and negotiating a favorable agreement with its unions.
Here is Wagoner's opening statement to a U.S. Senate committee on Tuesday and a House Committee on Wednesday holding hearings on the bridge loans:
(Read more...)
Posted by Michelle Krebs at 7:29 AM under Commentary , GM | Comments (0) | digg this | del.icio.us
Ford's Mulally: Needs Cash Available to Complete Transformation
Ford President and CEO Alan Mulally detailed to Congress how the automaker has changed
its business model since he joined the company a couple of years ago from Boeing.Hesaid Ford believes it has enough money to get through 2009 if the economy doesn't worsen. However,he added, the automaker would like the availability of government loans in case the economy sours more soFord can complete its transformation to building more small cars than large vehicles.
Here is Mulally's opening statement to a U.S. Senate committee on Tuesday and a House Committee on Wednesday holding hearings on the bridge loans:
(Read more...)
Posted by Michelle Krebs at 7:27 AM under Commentary , Ford | Comments (0) | digg this | del.icio.us
Chrysler's Nardelli: Running Out of Cash
Chrysler Chairman and CEO Bob Nardelli told Congressmen in the past couple of days
thatthe automaker is rapidly running out of cash due to the economic downturnand has explored all bankruptcy and bankruptcy-like options, deeming them unworkable. As a last resort, Chrysler has joined General Motors and Ford in seeking $25 billion in bridge loans from the U.S. government.
Here is Nardelli's opening statement to a U.S. Senate committee on Tuesday and a House Committee on Wednesday holding hearings on the bridge loans:
(Read more...)
Posted by Michelle Krebs at 7:24 AM under Chrysler , Commentary | Comments (0) | digg this | del.icio.us
Yeah or Nay on Bailout, But Don't Blame Detroit's Problems Only on Labor
By Bill Visnic
DETROIT - Any day now, the country and its decision-makers will decide whether to extend a massive financial lifeline to sustain Detroit's suddenly cash-anemic automakers. Judging from the rhetoric coming from the auto industry and sympathetic voices in Washington, DC, it needs to be any day now, or Detroit won't be around to hear the verdict.
And every day now, there are colliding opinions regarding whether an automaker bailout is wise - or politically and socially proper.
As has been said many times as the domestic auto industry continues its frenetic unraveling, there's plenty of blame to go around, and a portion of it lies with the unions. The United Auto Workers has rarely been out of the conversation of what's ruined Detroit Inc., but arguments centered on the notion that fat, uncompetitive unionized labor is the root cause of Detroit's ills are specious - and little more than an excuse for some good-old-fashioned union-bashing.
(Read more...)
Posted by Michelle Krebs at 5:10 AM under Chrysler , Commentary , Companies , Featured , Ford , GM | Comments (4) | digg this | del.icio.us
Sen. Shelby: How Sweet Is the Auto Business in Alabama? Not Very
By Michelle Krebs
Richard Shelby, the top Republican on the Senate Banking Committee, took to the airwaves over the weekend as the chief opponent of loans to Detroit automakers. His premise: This is a Detroit problem not a national problem and taxpayers shouldn't subsidize these poorly managed dinosaurs.
"I don't believe they've got good management. They don't innovate. They're a dinosaur, in a sense, and I hate to see [them get government loans]," Shelby said on NBC's Meet the Press.
With all due respect Senator Shelby, this is not only a Detroit problem. It's an Alabama problem. It's a national problem. And it's a global problem. Recession is spreading around the globe like a California wildfire. Once-hot auto markets have caught cold. And automakers everywhere -- not just in the U.S. -- are asking their governments for a helping hand.
(Read more...)
Posted by Michelle Krebs at 7:44 AM under Chrysler , Commentary , Companies , Ford , GM , Toyota | Comments (3) | digg this | del.icio.us
Congress: Vote Yes on Automaker Loans
The future of the American auto industry rests in the hands of the U.S. Congress, which this week debates whether the government should make loans to Detroit automakers to get them through the current economic crisis.
We at Edmunds.com urge Congress to vote yes.
Theoretically, we believe the free market is preferable to government intervention. But this isn't theory. This is reality, and an ugly one at that. The pragmatic answer to these unprecedented circumstances demand action.
(Read more...)
Posted by Michelle Krebs at 6:09 AM under Chrysler , Commentary , Featured , Ford , GM | Comments (14) | digg this | del.icio.us
GM-Chrysler Deal To Save $10 Billion -- From Where?
By Bill Visnic
DETROIT -- Late yesterday, a number of media outlets reported General Motors Corp. and Chrysler LLC were "accelerating merger 
discussions" and suddenly have identified a reputed $10 billion in "cost synergies" (one-time? annual?) a merger would generate.
Ten billion is a very round, very large and very convenient number. And a number that is highly dubious. From whence would that plump $10 billion come?
(Read more...)
Posted by Michelle Krebs at 4:34 AM under Business , Chrysler , Commentary , Featured , GM | Comments (5) | digg this | del.icio.us
2008 Paris Auto Show: Similar Shapes of Things To Come
By Bill Visnic
PARIS -- There's a lot of talk these days about how auto styling is converging -- or being ripped off.
At the 2008 Paris Auto Show earlier this month, there wasn't much mistaking the distinctive shapes presented by France's home-market biggies, Citroen and Peugeot; French styling remains unique (and largely uncopied, perhaps for a reason).
But a number of vehicles on display at the show looked strikingly similar to other vehicles on the show floor -- or ones we've seen elsewhere.
(Read more...)
Posted by Michelle Krebs at 7:43 AM under Commentary , Companies , Featured , GM , Technology , Toyota | Comments (0) | digg this | del.icio.us
GM-Chrysler: No Move Is Smart Move
AutoObserver Staff
DETROIT -- It appears cooler heads prevailed at General Motors long before the media frenzy over a possible merger between GM and Chrysler started. Wisely.
The Wall Street Journal is reporting Monday that GM's directors "gave a cool reception" to the idea of acquiring Chrysler's automotive business when it was discussed at last week's board meeting.
The board's reception is the right one, in our view, as there's little in such a deal for either of them, especially for GM.
The Journal confirmed the story broken by The New York Times over the weekend which led to a media feeding frenzy that GM recently held talks with Chrysler's majority owner -- private-equity firm Cerberus Capital Management LP. Cerberus proposed swapping its 81.1 percent stake in Chrysler for GM's 49 percent stake in home and auto lending firm GMAC. Cerberus owns the other 51 percent of GMAC. The paper further reports talks between the two automakers have broken off for now, but could be revived.
(Read more...)
Posted by Michelle Krebs at 9:10 AM under Chrysler , Commentary , Featured , GM | Comments (1) | digg this | del.icio.us
Q&A: Edmunds.com CEO Jeremy Anwyl: A New Phase for Consumers
Edmunds.com data, released last Friday, shows a continued downward spiral in car sales in early October. AutoObserver caught up with Edmunds.com's CEO Jeremy Anwyl for his take on what's going on in the automotive market.
You note that the consumer is barraged with bad economic news. What role does the media play in this?
Something that's not been acknowledged is the fact that this is the first widespread economic downturn in the Internet era. Literally, millions of competing outlets -- fighting for attention -- have found that bad news draws audiences. The volume and breadth of 24/7 inflated negativity is assaulting the consumer from all sides is overwhelming and unprecedented.
(Read more...)
Posted by Michelle Krebs at 12:47 PM under Commentary | Comments (0) | digg this | del.icio.us
2008 Paris Auto Show: The Good, the Bad and the Ugly
By AutoObserver Staff
PARIS -- Everyone loves coming to the Paris auto show. Mostly this is because it is not the
Frankfurt auto show, with which it alternates on the yearly schedule of auto shows.
When you go to the Frankfurt auto show, it is all about the Germans. It is all about BMW and Mercedes, really. They're telling you, "We understand machines and technology, and that's why we own the history of the automobile. You can buy a ticket if you wish and come visit us in our big tents in Frankfurt and worship the spectacle of our technical competence."
Paris is the City of Lights, and the French car manufacturers like to demonstrate that they have the same competence as the Germans, only with romance and flair. The French tell you, "Yes, our cars might look funny, but we understand joie de vivre, the joy of life. Of course our cars might look freaky and whacked out, but you are stupid if you don't understand."
(Read more...)
Posted by Michelle Krebs at 12:01 PM under Commentary , Companies , Technology | Comments (3) | digg this | del.icio.us
2008 Paris Auto Show: Mood in the City of Lights Is Dark
By Bill Visnic
PARIS - This city is supposed to be about celebration, but automakers stuffing their wares into the Paris motor show's vast exhibition halls were hardly in a gay mood last week. As the press crowded in to take the auto industry's temperature, the patients responded like they were suffering from a year-long head cold.
The rows of gleaming product - white seemed to be a favorite color - couldn't brighten the mood of automaker executives now burdened not only with the certainly of aggressive European carbon dioxide-curbing legislation but with an increasingly constricting sales environment and the ominous undertow of the U.S. financial-sector meltdown.
(Read more...)
Posted by Michelle Krebs at 6:38 AM under Commentary , Companies , Technology | Comments (0) | digg this | del.icio.us
European Carmakers Want "Green" Loans - Theirs and Ours
European automakers plan to ask the European Commission for $55 billion in loans to develop environmentally-friendly vehicles, similar to loans approved this week by the U.S. government, to put them on a level playing field. At the same time, however, some European automakers also want a piece of the U.S. funds, the Financial Times reported in Friday's edition.
Fiat CEO Sergio Marchionne said unanimous agreement exists among automakers to ask the European Union's executive body for the loans. "We will approach the European Commission for a similar idea to the U.S. Forty billion Euros ($55 billion) is a good number given the bigger size of the European industry. We need a level playing field," Marchionne told the Financial Times in an interview on Friday.
(Read more...)
Posted by Michelle Krebs at 7:29 AM under Chrysler , Commentary , Companies , Technology | Comments (1) | digg this | del.icio.us
Testosterone Truck Crowd May Turn to Muscle Cars
By Michelle Krebs
DEARBORN, Mich. - The Dodge Challenger and the upcoming Chevrolet Camaro and Ford
Mustang might get a sales lift as truck owners, who bought pickups to show of their machismo, seek more fuel-efficient rides.
Rebecca Lindland, analyst for Global Insight, told the audience at the forecasting firm's economic outlook conference held here last week, that the days of fashion buyers for full-size pickup trucks like the Ford F-150, Dodge Ram and Chevrolet Silverado are over. "The designer buyer is gone," she said.
(Read more...)
Posted by Michelle Krebs at 7:12 AM under Chrysler , Commentary , Companies , Ford , GM | Comments (0) | digg this | del.icio.us
Intrigue, German-Style, in Ongoing Porsche-VW Tussle
By Bill Visnic
Take volatile and imperious-but-brilliant exec Ferdinand
Piech. Add a dash of labor-union maneuvering. Spice comes from high-line maker Porsche. Throw into the pot that is Germany's largest automaker, VW.
The resulting stew is on the boil in another late-summer German industrial power play.
(Read more...)
Posted by Michelle Krebs at 4:57 AM under Business , Commentary , Companies , Featured , Personalities | Comments (0) | digg this | del.icio.us
GM Chooses Its Best-Ever Cars; Money-Making Trucks Noticeably Absent
By Bill Visnic
DETROIT - As part of its GMnext centennial celebration which concluded this week, General Motors Corp. released a list of its "Top 10 Production Vehicles" from the thousands of models it has developed since the company's inception in 1908.
And the "Like a Rock" crowd won't necessarily be pleased - although GM's full-size pickups often were best-sellers and profits from pickups and SUVs filled the corporate coffers for much of the 1990s and early part of this century, there's nary a truck or SUV on the list.
GM says the choices were selected by company archivists and historians and reviewed by "GM senior leaders." None of them must have been truck guys. Or Camaro guys. Or - okay, you get the idea: the list may be skewed by a kind of historian's mindset, and is unlikely to fully please even the most ardent GM supporter.
The company avoided further controversy by refusing to actually pick a No. 1 model. Instead, it lists the 10 most significant models in chronological order:
(Read more...)
Posted by Michelle Krebs at 5:44 AM under Commentary , GM , Technology | Comments (1) | digg this | del.icio.us
Chevy Volt Styling Is A Short-Circuit
By Bill Visnic
DETROIT - If images circulated on the Web
this week are representative of the Chevrolet Volt General Motors Corp. plans to deliver in two years, the General had better hope potential customers appreciate the engineering - because the Volt's design is a corporate brownout.
AutoObserver's all-day cruise around auto-related Web sites noted heavy-traffic comment about the leaked images of the Volt extended-range electric vehicle; some are mildly complimentary, but critics seem to outnumber approvers by at least four to one.
The most common reactions range in a bandwidth from disappointment to derision. The Volt concept car was widely applauded, and although GM subsequently warned certain aggressive aspects of the Volt concept would be sacrificed on the altar of production-car realities, the overwhelming blandness oozing from the images of what is purported to be the production Volt is inescapable.
(Read more...)
Posted by Michelle Krebs at 4:05 AM under Commentary , Featured , GM , Technology | Comments (8) | digg this | del.icio.us
Ford's European Models: We Want Them Today -- Even Better, Yesterday!
Because Ford Motor Co. intends to eventually sell the same small Fords everywhere in the
world - similar to the ones Ford of Europe has been selling for years - the automakerhosted media from North America, South America, South Africa and Australia to test-drive its current European offerings.
At Ford's proving grounds in Lommel, Belgium, journalists test drove the current C-segment Focus and Focus-based models already sold in Europe. When the next-generation Focus is introduced in 2010, it will be the same around the globe. Ford also will sell derivatives of that Focus in world markets.
On the following day, journalists test drove the all-important Fiesta on the winding, mountainous roads of Italy. Ford's even smaller B-segment car now is on sale in Europe, soon goes on sale in China and arrives in North America in early 2010.
Here's the review from Chris Walton, chief road test editor for Inside Line, AutoObserver's sibling within Edmunds.com:
(Read more...)
Posted by Michelle Krebs at 8:23 AM under Commentary , Ford | Comments (4) | digg this | del.icio.us
Whatta Re-Voltin' Development: Chevy Volt Images 'Leaked?'
By Bill Visnic
DETROIT - Media manipulation or "human error?" Only General Motors Corp.'s public-relations office knows for sure.
Either way, images of the production version of the Chevrolet Volt "extended-range" hybrid-electric vehicle - possibly the most heavily hyped, highly anticipated vehicle in GM's history - made it to the Web Monday in what GM reputedly attributed to an accident. Until now, the Volt - which remains under a pressurized development schedule and is not slated to reach showrooms for more than two full years - had not been fully seen in final production form.
(Read more...)
Posted by Michelle Krebs at 4:32 AM under Commentary , Featured , GM , In the Media , Technology | Comments (2) | digg this | del.icio.us
Memo to Chrysler's Ralph Gilles: Speak Plain English and Don't Let 'Em Push You Around
By Bill Visnic
It's the end of an era at Chrysler LLC, as design chief Trevor Creed now is retired, pulling down the curtain on a period in which Chrysler attained a reputation for adventurous and often outrageous design initiatives, particularly for concept vehicles - of which a refreshingly high proportion made the transition to production models.
Taking Creed's place - starting this week - is Ralph Gilles, 38-year-old father of Chrysler's 300 sedan, which launched in 2004 with near-universal admiration.
(Read more...)
Posted by Michelle Krebs at 4:46 AM under Chrysler , Commentary , Personalities | Comments (1) | digg this | del.icio.us
COMMENTARY: Election Year Promises Will Meet Automakers' Harsh Reality, CSM Worldwide Analysis Shows
NORTHVILLE, Mich. -- The domestic auto industry is the subject of
much recent rhetoric by
the presumptive presidential candidates. Both candidates now say they will back domesticautomakers with loan guarantees to help the industry restructure, support 'cap and trade' programs to reduce carbon emissions, develop new energy sources and fund the development of green vehicles.
But their platforms diverge sharply where the rubber meets the road, according to an analysis by CSM Worldwide, a global automotive forecasting firm headquartered in Michigan but with offices spread globally.
"Sen. Obama and Sen. McCain have been focusing on pocketbook issues like $4 gas, global warming and security issues like energy independence. Now the auto industry's financial crisis has their attention," said CSM Senior Economist Charles Chesbrough. "It may seem like the candidates' positions are closely aligned, but they actually have radically different approaches to CAFE, the vehicle technologies they champion and the support they're willing to lend to automakers."
(Read more...)
Posted by Michelle Krebs at 7:24 AM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
Moscow Motor Show: Western Carmakers Are Gaining Ground on Local Producers
By Pal Negyesi
MOSCOW - Tucked away in the very last hall at the Moscow auto show, which held its press day Tuesday, is the stand of Russia's biggest car manufacturer, AvtoVAZ. Its status eroding, AvtoVAZ, maker of Lada cars, still commands a respectable a 20 percent market share in Russia. But it is no longer the ruling force on Russia's roads or at this show.
Years ago, when the Moscow International Motor Show was held at the old Moscow Expocentre, the AvtoVAZ press conference was the show's biggest spectacle. Russian media gathered en masse to hear ambitious projections from AvtoVAZ managers, like Vladimir Kadannikov. Kadannikov is no longer around, the show is held at the shiny new Crocus Center and AvtoVAZ is being steered towards a brighter future by French automaker Renault.
(Read more...)
Posted by Michelle Krebs at 5:47 AM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
GM: Selling Assets to Raise Cash May Prove Tough
By Michelle Krebs
General Motors' plan to sell assets to raise much-needed cash may be easier said than done.
In July, GM outlined a plan for cutting expenses and selling assets in an effort to conserve and raise cash, which it is burning through so quickly that one investment firm said Wednesday the automaker needed $7.3 billion in fresh capital to pay its bills through 2009.
But also on Tuesday, Navistar International backed out of a deal to buy GM's medium-duty truck unit. And, while GM says it has received much interest in Hummer Division, a number of expected suitors have said no thank you in a variety of languages.
(Read more...)
Posted by Michelle Krebs at 7:21 AM under Business , Commentary , GM | Comments (0) | digg this | del.icio.us
Daimler: A Takeover Target?
Speculation in Europe is intensifying over the possibility of a takeover of Daimler AG, parent
of Mercedes-Benz and smart and the former parent of Chrysler.
Daimler CEO Dieter Zetsche has been drilled on the takeover question since the German company sold off Chrysler last year. He has insisted that Daimler is less vulnerable to takeover without. Company spokesman reiterated of late that Daimler is not a takeover candidate nor does the company see indications of an investor building a large stake.
However, sources close to Daimler management told the Financial Times, for a story in Tuesday's edition, that company executives indeed are very concerned about a possible takeover because of a number of converging factors.
(Read more...)
Posted by Michelle Krebs at 8:48 AM under Chrysler , Commentary , Companies | Comments (1) | digg this | del.icio.us
When In Doubt, Quote 'The Man'
By Bill Visnic
TRAVERSE CITY, Michigan - One quantity there's plenty of at any "management" conference is advice, and there was definitely no lack here at the Center for Automotive Research Management Briefing Seminars, the annual auto-industry schmooze where it always seems to be about 90 percent giving advice - and maybe 10 percent taking it.
Some of our favorite advice (meant to be taken) this week came from Mark Fields, Ford Motor Co. executive vice president and president-The Americas. In his presentation, he advised colleagues that the industry's current turmoil will be solved, "Not by looking back. But by bringing out great products and game-changing technologies, with the right cost structure to deliver profitably."
Okay, that actually seems like good advice. The dichotomy was that Fields devoted the early part of his speech to looking in the rearview mirror.
(Read more...)
Posted by Michelle Krebs at 6:40 AM under Commentary | Comments (1) | digg this | del.icio.us
Engine Sharing: Even Desperate Times Don't Call for This
By Bill Visnic
Alert to the American medical community: new evidence proves severe lack of corporate operating capital causes dull and even impaired judgment.
How did I arrive at this breakthrough mental-health discovery? Reading early this week that General Motors Corp. and Ford Motor Co. reputedly are considering co-development of engines.
(Read more...)
Posted by Bill Visnic at 3:00 AM under Analysis , Commentary , Companies , Featured , Ford , GM , In the Media , News , Technology | Comments (3) | digg this | del.icio.us
No Automakers Among Top 10 Global Brands
By Bill Visnic
The 2008 ranking of the 100 most prestigious global brands says no automaker has earned a spot in the list's top ten. In 2007, Toyota Motor Corp. was recognized as the globe's No. 10 brand.
There are several competing "top brand" lists, each using different methodology, but the Brandz Top 100 Most Powerful Brands, this year conducted with Britain's Financial Times newspaper and market research and consulting firm Milward Brown, seems to be the most recognized. This year's list is topped by Google and is dominated by multinational powerhouse corporations, of course, but Toyota has dropped out of the Brandz top ten - falling two places to No. 12 overall.
(Read more...)
Posted by Michelle Krebs at 4:40 AM under Analysis , Commentary , Companies | Comments (1) | digg this | del.icio.us
Out-Of-Touch Alert: McCain Doesn't Know Cost of Gasoline
Just about everyone's already exhausted from the daily political finger-pointing about who's responsible for the cost of gasoline.
But the interplay of politics and gas prices achieves a new and comical aspect today with The Huffington Post's sarcastic replay of a conversation earlier this week between Republican presidential nominee John McCain and a reporter from California's Orange County Register. In that interview, reports Huffington, McCain admitted he had no idea how much a gallon of gas currently costs.
(Read more...)
Posted by Bill Visnic at 2:24 PM under Analysis , Commentary , In the Media , News , Personalities | Comments (3) | digg this | del.icio.us
AutoObserver Readers Have Fun, Get Frothy Over 'DOA'
A storm of response greeted this week's story listing new or coming-soon models that were
conceived and developed long before gasoline topped $4 per gallon and thus "don't stand a chance" in the fuel-cost-frenzied U.S. market. Most readers took issue of some kind with our choices, or the rationale behind which models were selected as instant losers.
To be sure, some of AO's selections already have proven themselves as strong sellers, or surely will become big sellers. But the variety of commentary from readers adds plenty of spice to the already tongue-in-cheek piece - and in many cases, adds more to the dialogue.
(Read more...)
Posted by Michelle Krebs at 4:15 PM under Commentary , Companies | Comments (4) | digg this | del.icio.us
Dead on Arrival: New Models That Don't Have a Chance
By Bill Visnic
One bizarre fallout from the wild-ride shift in consumer tastes is a spate of new or soon-to-be-released models that were designed and developed under assumptions about the U.S. market that now are absolutely invalid.
The result: a slew of white elephants designed when gasoline was $2 per gallon (or less) and Americans were still buying 800,000 F-Series pickups and everything else that looked big, sucked gas and telegraphed that you had arrived at that special entitlement heaven espoused by Rush Limbaugh and everyone else who insisted cheap energy and cheap mortgages are an American birthright.
It might be almost laughable if the U.S. domestic auto industry weren't in such disastrous shape -- and had the luxury of time to once again make amends for decades of single-minded product-development choices.
Here's a short list of our favorite vehicles that, thanks mostly to the new rules governing the auto industry, suddenly look titanically dumb:
(Read more...)
Posted by Michelle Krebs at 6:14 AM under Chrysler , Commentary , Companies , Featured , Ford , GM , Toyota | Comments (15) | digg this | del.icio.us
Honda Civic: Favorite of Edmunds.com's Consumer Test Drivers
The best-selling car in America last month, the Honda Civic has won even more fans.
Edmunds.com,
parent of AutoObserver
,recently hosted a comparison test of three economy sedans
- the Honda Civic, Mazda Mazda3 and Toyota Corolla. Six regular consumers representing a cross section of America evaluated the cars.
Five of the six consumers ranked the Honda Civic No. 1. The Mazda3 was first for the sixth consumer-tester; the Mazda3 had four testers ranking it second behind the Civic and one rated it third. The Corolla was listed third of five of the consumer test drivers; it ranked second with one of them.
(Read more...)
Posted by Michelle Krebs at 11:06 AM under Commentary | Comments (0) | digg this | del.icio.us
Oil Jumps to $129 Barrel; Pickens Predicts $150
Crude oil rose above $129 a barrel in New York for the first time after billionaire hedge-fund
manager T. Boone Pickens predicted on CNBC that oil would reach $150 a barrel this year.
Pickens noted supplies aren't keeping up with demand Earlier this month, Goldman Sachs estimated second-half prices at $141 a barrel. Similarly, on Tuesday, Credit Suisse Group AG and Societe Generale SA raised oil-price forecasts for 2008 and 2009.
Last week Edmunds' Green Car Advisor reported that Pickens warned the Alternative Fuels & Vehicles annual conference in Las Vegas that the planet is using more oil than it produces, the situation isn't improving and nobody's doing much about it. "America is in a hell of a bad spot," he told the conference, warning the U.S. was at risk for becoming "less than the superpower we are now."
(Read more...)
Posted by Michelle Krebs at 10:45 AM under Commentary , News | Comments (0) | digg this | del.icio.us
American Axle Strike: Was It Worth It?
By Michelle Krebs
DETROIT -- The United Auto Workers (UAW) union finally settled its 84-day strike against American Axle and Manufacturing Holdings Inc., a major supplier to General Motors, on Friday.
After holding information meetings Sunday described as "ugly" by one union official, the UAW is holding ratification votes, scheduled to begin Monday and run through the week at various plants. The contract requires a majority approval by the 3,650 striking workers, and there's no guarantee it will pass as many workers are angry about the large pay cuts.
The costs for this long and bitter strike have been high for all involved. For striking workers, it has been 11 weeks of lost wages and benefits. For American Axle, it has meant lost business. For GM, it has resulted in lost vehicle production and financial losses.
Was it worth it?
(Read more...)
Posted by Michelle Krebs at 9:02 AM under Commentary , Companies , GM | Comments (0) | digg this | del.icio.us
Remember the Last "Quick Fix for Gas Addicts"?
Ah, how quickly some of us forget.
It was almost two years ago to the day that General Motors announced a fuel price protection program, much like the one Chrysler launches on Wednesday. GM offered buyers of certain vehicle models, mostly large SUVs, in Florida and California a guarantee of gasoline capped at $1.99 a gallon for a year.
The promotion didn’t move the needle on sales, and it opened the floodgate of criticism of GM, especially in a now-famous column by The New York Times’ Thomas Friedman.
We're betting GM won’t be following Chrysler’s lead -- and we're wondering if Friedman is dusting off his old column to blast Chrysler.
(Read more...)
Posted by Michelle Krebs at 7:54 AM under Chrysler , Commentary , GM | Comments (4) | digg this | del.icio.us
GM Slashes Truck, SUV Production Due to Slow Sales
Continued slow sales prompted General Motors to announce Monday that it will cut
production of large pickup trucks and sport-utility vehicles this year.
In total, GM said it is slashing production by about 10 percent, or about 138,000 vehicles at four plants in the U.S. and Canada. About 3,550 workers will be out of jobs as a result.
The question being asked is will sales of those high-profit vehicles, in light of skyrocketing gasoline prices, ever bounce back?
(Read more...)
Posted by Michelle Krebs at 10:02 AM under Commentary , GM | Comments (1) | digg this | del.icio.us
Ford’s Early Agreement with Canadian Union a Positive Sign
By Michelle Krebs
The news that Ford reached an early agreement with its Canadian union is being overshadowed by Las Vegas billionaire Kirk Kerkorian's purchase of the automaker’s stock, but the Canadian deal is every bit as significant -- maybe even more so.
Talks between Detroit’s three automakers and the Canadian Auto Workers union regarding a new contract to replace the current ones that expire in September appeared as if they could be extremely rancorous. A strike appeared to be a distinct possibility.
But Ford’s announcement Monday that it had reached an agreement with the Canadian union -- especially in an unheard of four months plus ahead of schedule decreases -- lessens the odds.
(Read more...)
Posted by Michelle Krebs at 6:49 AM under Chrysler , Commentary , Companies , Ford , GM | Comments (0) | digg this | del.icio.us
Toyota-Subaru Coziness Could Yield Retro-Corolla, Celica
By Bill Visnic and Peter Nunn
Normally stolid Toyota Motor Corp. hasn’t been shy in doubling of its stake in Fuji Heavy Industries Ltd. and openly admitting the two will jointly develop new vehicles – including an all-new rear-wheel drive sport coupe on a dedicated platform.
Whew. Quite un-Toyotalike. This is the company that rarely “buys†anything or anybody, preferring joint ventures, particularly when it comes to vehicle development and vital components. When it decided to build cars with General Motors, Toyota bought nothing; it established New United Motors Manufacturing Inc. (NUMMI) in California, which jointly makes vehicles for Toyota and GM.
(Read more...)
Posted by Michelle Krebs at 4:22 AM under Commentary , Featured , Technology , Toyota | Comments (3) | digg this | del.icio.us
Cerberus’ Feinberg: “A Recluse Lifts the Veil a Little”
A rare interview with Stephen A. Feinberg, the founder of Cerberus Capital Management, which now owns most of Chrysler and much of General Motors Acceptance Corp., provides the ever-so-slightest glimpse of Feinberg the man, but provides not a morsel of what he’s got in mind for the much anticipated end game of Chrysler.
New York Times’ “Dealbook” columnist Andrew Ross Sorkin spent two hours interviewing the reclusive Feinberg -– “the money man some hope will save Detroit” as he describes him -- at his Manhattan office. It was Feinberg’s first interview in a couple of decades –- and he still refused a photograph. His yearbook picture is the one media outlets are forced to use.
(Read more...)
Posted by Michelle Krebs at 8:01 AM under Chrysler , Commentary , Personalities | Comments (1) | digg this | del.icio.us
Former UAW President Douglas Fraser Remembered
Hundreds of union members, political figures and corporate executives gathered with
family members Saturday for a memorial service honoring former United Auto Workers President Douglas Fraser, who died Feb 23 at age 91.
Fraser led the union through its zenith in the 1970s and through the bleak times of the 1980s. He played a key role in saving Chrysler from bankruptcy. In exchange for workers agreeing to concessions to save Chrysler, Fraser gained a seat on Chrysler’s board, making him the first major union chief on the board of a large corporation.
(Read more...)
Posted by Michelle Krebs at 8:31 AM under Commentary , Personalities | Comments (0) | digg this | del.icio.us
The Jaguar/Land Rover Sale: It’s Best Not To Add Up How Much Ford Wasted
By Richard Feast
So, Ford has finally stitched together the long-trailed sale of Jaguar and Land Rover to Tata. It is the inglorious end of the vainglorious Premier Automotive Group that was supposed to challenge the mighty Mercedes-Benz and BMW.
We can now see the venture was doomed nanoseconds after it was created.
(Read more...)
Posted by Michelle Krebs at 3:53 AM under Business , Commentary , Companies , Ford | Comments (5) | digg this | del.icio.us
Alfa Romeo: A Legend Returns, But Do We Care?
By Richard Feast
Alfa Romeo’s decision to sell cars in the United States once more is wonderful news for the marque’s handful of aging enthusiasts in the country. If Europe’s experience is any guide, though, the overwhelming majority of American car buyers won’t even notice its return.
It is probably best to stop reading now if you are one of those unreformed Alfisti. It is time for a touch of automotive heresy.
(Read more...)
Posted by Michelle Krebs at 4:20 AM under Business , Commentary , Companies | Comments (3) | digg this | del.icio.us
Mazda2 Wins 2008 World Car of the Year; Still Not Coming to America
By Peter Nunn
TOKYO — Mazda grabbed the headlines at the New York Auto Show last week when its new Mazda2 compact drove off with the prestigious 2008 World Car of the Year award.
Call it a surprise result, in more ways than one.
For those just tuning in, the Mazda2 is this smart, new-age compact launched in 2007 that’s doing great business for Mazda in Japan, Europe and many other places around the globe.
Everywhere, that is, but North America.
(Read more...)
Posted by Michelle Krebs at 4:16 AM under Commentary , Companies , Featured | Comments (3) | digg this | del.icio.us
AAA Launches New Web site Dedicated to Older Drivers
By Kate McLeod
NEW YORK — During last week's press days at the New York auto show, AAA
held a conference covering the challenges facing senior drivers and their families. It also marked the launch of AAA's Web site
devoted to the topic and includes a checklist of vehicle features that are useful for senior drivers, the fastest-growing segment of the driving public.
(Read more...)
Posted by Michelle Krebs at 6:14 PM under Commentary , News | Comments (0) | digg this | del.icio.us
New York Auto Show: The Good, Bad and Ugly
By Jane Nakagawa
NEW YORK — The New York International Auto Show opens to the public Friday, and what a difference a year makes.
Toyota is the nation’s second-largest brand not Ford. Jim Press is the vice chairman and president of Chrysler, not Toyota. Cerberus Capital Management, not Daimler, owns Chrysler. The national average price for a gallon of premium gas is $3.60, not $2.80.
And the most interesting cars at the New York auto show are diminutive and original, not colossal and extravagant.
(Read more...)
Posted by Michelle Krebs at 4:19 AM under Chrysler , Commentary , Companies , Featured , Ford , GM , Toyota | Comments (10) | digg this | del.icio.us
AO Readers Sound Off on Volkswagen Foibles
By Bill Visnic
A recent commentary suggesting the Volkswagen Group of America Inc.’s tactics to improve dismal U.S. sales should focus on reconnecting with the brand’s loyalists prompted a spate of thoughtful and vociferous replies — analysis that VW management might do well to heed.
(Read more...)
Posted by Michelle Krebs at 11:10 AM under Commentary , Companies | Comments (1) | digg this | del.icio.us
Volkswagen: Time To Get a U.S. Life
By Bill Visnic
The Volkswagen Group sold a lot of vehicles in 2007, a record number at just less than 6.2 million.
That’s good for fourth in the world. Yet in the U.S., typically viewed as the world’s most important — if not prestigious — market, Volkswagen Group of America Inc. stumbled through another miserable year to ring up 230,572 sales.
(Read more...)
Posted by Michelle Krebs at 4:22 AM under Analysis , Business , Commentary , Companies | Comments (14) | digg this | del.icio.us
Commentary: Detroit Back to Its Old-School Tactics
By Bill Visnic
Despite stock prices and market shares nosediving toward near-historic lows, Detroit scions General Motors Corp. and Ford Motor Co. once again are doling out bonus cash to blue- and white-collar workers alike — but the implied justification that “turnaround†goals are being met is, in the grandest tradition of car-town back-slapping, a bit self-serving.
(Read more...)
Posted by Michelle Krebs at 4:35 AM under Chrysler , Commentary , Featured , Ford , GM | Comments (0) | digg this | del.icio.us
Geneva Motor Show: The Good, The Bad, The Ugly
By Jane Nakagawa
There are three big reasons to love the Geneva International Motor Show, which held its press days this week and now is open to the public.
First, Geneva is the only international auto show besides Detroit that takes place every year, and consistency builds precedence.
Second, Geneva is a great place to see world-class luxury trends as the city serves as the neutral yet high-stakes epicenter for the British, Germans and Italians.
Finally, it’s the best place to see what the famous Italian design studios such as Bertone, Giugiaro and Pininfarina are up to since the Turin auto show has been declining in prestige and attendance over the years.
(Read more...)
Posted by Michelle Krebs at 5:19 AM under Commentary , Companies , Featured | Comments (1) | digg this | del.icio.us
Geneva Auto Show: If These are Eco-Friendly, Sign Us Up
By Bill Visnic
The Geneva auto show turned out as expected: It was a singular stage featuring fuel-efficiency and carbon-dioxide-reducing abilities as essentially the only act. Most automakers showed up in Geneva with actors capable of assuming roles in this new-age play. Those without the talent promoted the understudies’ virtue, that primarily being performance.
But what we liked most about the eco-positive hardware fronted in Geneva is how visually and intellectually appealing some of it turned out to be. In no particular order, our green favorites:
(Read more...)
Posted by Michelle Krebs at 7:09 AM under Commentary , Featured , GM , Technology | Comments (1) | digg this | del.icio.us
The More They Learn, the More Automakers Eye Internet
By Dale Buss
Automakers will always do brand building via traditional advertising media such as TV, radio, outdoor and print. But in an ever-toughening marketplace, they’re more and more intent on obtaining solid sales leads and on buttressing relationships with existing customers — so they’re putting their marketing resources into the channels that best deliver on those goals.
That’s the main reason the Internet will be vacuuming up a much bigger share of vehicle-advertising dollars in the U.S. market in 2008.
(Read more...)
Posted by Michelle Krebs at 8:00 AM under Chrysler , Commentary , Companies , Featured , Ford , GM , Toyota | Comments (0) | digg this | del.icio.us
GM and Ford Should Have Learned Lessons from Lada and Russia's Central Planning
By Richard Feast
LONDON — Ford’s sale of Jaguar and Land Rover, to be finalized within days, and General Motors’ continued stumbling in search of a role for its Saab subsidiary, which shows off new concepts at next week's Geneva Motor Show, remind me of something I saw during a tour of the shabby, sprawling AvtoVAZ factory in the Soviet Union in the early 1980s.
The events are unrelated except for the way in which they highlight the laughable results of central planning. For the Kremlin then, read Dearborn and Detroit today.
(Read more...)
Posted by Michelle Krebs at 4:03 PM under Commentary , Featured , Ford , GM | Comments (2) | digg this | del.icio.us
Formula 1 Opus: Conspicuous Consumption of the Literary Kind
By Bill Visnic
At last, an automotive book truly equal to the tastes — and pocketbooks — of moneyed “car guys†— a heftily proportioned, 850-page tribute detailing the history of Formula 1 racing titled Formula 1 Opus.
The book, more than a foot-and-a-half square and weighing 82 pounds, is priced at £3,000 — about $5,800 at current exchange rates.
(Read more...)
Posted by Michelle Krebs at 4:28 AM under Commentary | Comments (0) | digg this | del.icio.us
Tata Shareholders Not Thrilled with Proposed Jaguar, Land Rover Purchase
A lot of people — investors, specifically — are not thrilled with India’s Tata
buying Jaguar and Land Rover from Ford. They insist the company should focus on the $2,500 Tata Nano microcars, not $100,000 Jaguars.
Bloomberg News reported a number of investors, including A.S. Thiyaga Rajan, who manages a $250 million fund, are dumping their Tata stock.
(Read more...)
Posted by Michelle Krebs at 7:19 AM under Commentary , Companies , Ford , Personalities | Comments (1) | digg this | del.icio.us
Delphi’s Steve Miller Publishes Memoir, Turnaround Lesson Book
The turnaround of Delphi Corp. is far from complete. The latest chapter in that saga came last week when the banks were unable to find funding that would allow the nation’s largest auto-parts supplier to emerge from bankruptcy.
Nevertheless, Delphi executive chairman Robert S. “Steve†Miller, a former Chrysler executive and a veteran of a dozen turnarounds, has written a book, The Turnaround Kid: What I Learned Rescuing America's Most Troubled Companies (Collins, $25.95, 272 pages). It is due out in April.
Fortune magazine’s Editor-at-Large Allan Sloan reviewed the book in an article picked up Tuesday by the Washington Post, entitled “Self-Portrait of a Turnaround Artist.â€
Sloan said he got hooked immediately on the book, not only because the autobiography talks about Miller’s 30 years of corporate troubleshooting but more because it shows him to be a human being, “a business man in full†and “not a calculator with legs.â€
(Read more...)
Posted by Michelle Krebs at 11:55 AM under Chrysler , Commentary , Companies , Personalities | Comments (0) | digg this | del.icio.us
Cerberus Dragged Reluctantly into Spotlight by Chrysler, GMAC Stakes
If Stephen Feinberg, the ultra-secretive founder of Cerberus Capital
Management, which owns 80 percent of Chrysler and 51 percent of GMAC, hates the public spotlight now, he’s seen nothing like what he will if the automaker goes under, according to a column in Tuesday’s New York Times
.
“If Chrysler, which has $18 billion in pension and health care liabilities for at least the next two years, winds up sinking into bankruptcy, it would be a watershed event,” wrote Andrew Ross Sorkin in the paper’s Dealbook column. “Such a failure might take down the entire private-equity industry —
everyone in the business, bystander or not, would be tarred. It would be on the 6 o’clock news. Mr. Feinberg would be hauled in front of Congress. It would be considered a national crime. Remember the outcry when Kohlberg Kravis Roberts bought RJR Nabisco for $25 billion back in the 1980s? That was just a dress rehearsal.”
(Read more...)
Posted by Michelle Krebs at 7:32 AM under Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
What Else Will $2,500 Buy?
India's Tata Motors grabbed headlines when last month it unveiled the Tata
Nano with its $2,500 price tag. Tata Motors' founder, Ratan Tata, sees the cheap Nano as way to get drivers in India off their motor scooters and into cars.
That got AutoObserver wondering: What would $2,500 buy in the U.S. aside from the car?
Jane Nakagawa, AutoObserver's design editor, set to work researching the Top 10 things she'd rather buy for $2,500 than a Tata Nano.
Here's what we came up with:
(Read more...)
Posted by Michelle Krebs at 8:28 AM under Commentary | Comments (1) | digg this | del.icio.us
Chrysler Won't Survive; Sell It, Advises Ex-Chrysler Exec
Chrysler LLC won't survive on its own and its private-equity owners should sell the company to a foreign automaker, Dow Jones reports a former finance chief of the automaker.
"Step A is that Cerberus Capital Management should do everything they can to fix it, and step B is that they should sell it to a foreign automaker that has strong market share in emerging markets," said Jerry York, who was Chrysler's chief financial officer between 1990 and 1993. He now serves as a representative of billionaire investor Kirk Kerkorian.
(Read more...)
Posted by Michelle Krebs at 10:57 AM under Chrysler , Commentary , Personalities | Comments (2) | digg this | del.icio.us
Toyota’s 7-Year Loans Offer Reward, Risk
Toyota has begun offering customers 84-month loans on new cars to help dealers sell cars during the current economic downturn, an initiative that has some upside potential but also some risk for Toyota, said Joe Spina, Edmunds.com’s senior manager of remarketing.
“If Toyota Financial Services indeed offers these loans to customers with high credit scores and doesn’t do many 84-month loans as a percentage of its loan portfolio, then the risk of credit loss is low,” said Spina.
But, he added, “The risk with an 84-month loan is that customers may be purchasing a vehicle they really cannot afford. That could put them upside-down in the loan for longer. Then the loans become a tool that perpetuates negative equity financing.”
(Read more...)
Posted by Michelle Krebs at 1:09 PM under Commentary , Toyota | Comments (0) | digg this | del.icio.us
Chicago Auto Show: Best and Worst of Show
By Jane Nakagawa
It’s hard to outshine the glitz and glamour of Detroit’s North American International Auto Show. But the Chicago auto show has always drawn crowds, and this year is cause for a true celebration because the nation’s biggest and oldest auto show marks its 100th anniversary.
This impressive milestone is well chronicled on the show’s official Web site, where the history of America’s automobile culture can be viewed through myriad photographs gathered from manufacturers’ and private collectors’ archives. Simply click on the decade of your choice and you can practically hear the music.
The Chicago show was closed during World War II and reopened with well-deserved fanfare in 1950. Through the next two decades you can see America’s soaring confidence, initially through fins and chrome, and then through muscle cars. But signs of a breakdown began to show in the late 1960s. First came Ralph Nader and the safety crusade, and then the oil shock of 1973.
(Read more...)
Posted by Michelle Krebs at 4:31 AM under Chrysler , Commentary , Companies , Featured , Ford , GM | Comments (0) | digg this | del.icio.us
Super Bowl Car Ads: Making the Grade, Failing Marks and No Shows
By Dale Buss
The New York Giants certainly achieved their Super Bowl objectives Sunday. Did car companies?
It’s too early to tell. But automakers led the way in a field of Super Bowl ads that largely disappointed on their creative merits and failed to generate the kind of instant excitement that could help them meet their marketplace goals. In some cases, it didn’t seem as if their advertising approach was actually consistent with the strategic challenges faced by the company.
And when you’re paying $2.7 million for 30 seconds of rapt attention by the biggest TV audience of the year, you really should take advantage of the opportunity.
(Read more...)
Posted by Michelle Krebs at 7:03 PM under Chrysler , Commentary , Companies , Featured , Ford , GM , In the Media , Toyota | Comments (1) | digg this | del.icio.us
BMW Chief Hits the Roadshow Circuit
Norbert Reithofer will this week become the first chief executive of BMW to go on an investor roadshow as the German automaker seeks to deflect worries about its profitability and shed its reputation as an industry laggard, the Financial Times reported over the weekend.
Reithofer will visit London on Wednesday as well as New York and Boston on Thursday and Friday to update investors on his efforts to cut costs.
The paper noted these visits mark a cultural break for the German carmaker, which until now only made its chief financial officer or other lower-ranking executives available to its shareholders.
(Read more...)
Posted by Michelle Krebs at 8:29 AM under Commentary , Companies , News , Personalities | Comments (0) | digg this | del.icio.us
Is the Prototype Honda Pilot a Disturbing Sight?
By Dale Buss
If the next-generation Pilot that Honda actually produces looks pretty much like the prototype the company displayed at the recent Detroit auto show, the new version may not do much to address the model’s sinking popularity.
The reason: In a styling-conscious market where sleek crossovers rank as some of the hottest vehicles, the blocky 2009 Pilot might fit like a square peg into a round hole.
(Read more...)
Posted by Michelle Krebs at 9:36 AM under Analysis , Commentary , Companies , Featured | Comments (14) | digg this | del.icio.us
New Delhi Auto Expo Recap: A Look Back at India’s Automotive Future
By Nick Kurczewski
NEW DELHI, India -- “It’s a great time to be in India,†said Dr. Wilfried Aulbur, managing director and CEO of Daimler India, immediately following Mercedes-Benz’s press conference at the New Delhi Auto Expo.
Dr. Aulbur’s optimism is well founded. Thanks to continued double-digit growth in India’s automobile sales - not to mention huge investments being poured into the country’s manufacturing capability - India could soon surpass China as being the biggest and brightest automotive star on the horizon.
But this economic boom has its perils, and at times the New Delhi Auto Expo seemed a microcosm of India itself.
(Read more...)
Posted by Michelle Krebs at 5:51 AM under Commentary , Featured | Comments (0) | digg this | del.icio.us
New Delhi Auto Expo: Hydrogen’s Three-Wheeled Future in India
By Nick Kurczewski
NEW DELHI, India -- Squeezing into the non-existent passenger space of a vehicle built for one turned out to be the easy part. The driver, seated in the center, and directly behind what looked to be a set of motorcycle handlebars, attempted to fire up the engine once again. A sputter, a grumble from the exhaust, one or two feet of forward motion, and then nothing.
The bright blue three-wheeler came to an abrupt stop.
India’s hydrogen-powered future faces similar false starts and the occasional stumble. But the fact that the world’s third largest economy (in purchasing power) has a roadmap for hydrogen in the first place – not to mention a Ministry of New and Renewable Energy – might come as something of a surprise to those who expect the country’s emissions regulations to be woefully outdated.
(Read more...)
Posted by Michelle Krebs at 5:50 AM under Commentary , Technology | Comments (0) | digg this | del.icio.us
Detroit Auto Show: The Best, The Worst of Show
By Jane Nakagawa
The 2008 Detroit Auto Show makes me think of Japan, in that it is the tale of two cultures.
It’s common to hear stories of how easy it is for young foreigners in Japan to fill their apartments with TVs, rice cookers, and a myriad of other consumer electronics that middle-class Japanese have thrown away. This is because the Japanese are eager to own the latest and greatest thing, and even if something doesn’t need replacing, they have no problem getting rid of it.
Conversely, Americans are more practical. There is something buried deep into the psyche of every red-blooded American that makes us believe, “If it ain’t broke, don’t fix it.” The pickup truck has been the number-one selling vehicle for over 10 years, but signs of a breakdown in its appeal are starting to show, and there was evidence of it on the floor of the Detroit auto show.
(Read more...)
Posted by Michelle Krebs at 4:40 AM under Commentary | Comments (15) | digg this | del.icio.us
Detroit Auto Show Hangover: Impressions from Press Days
By AutoObserver Staff
DETROIT – The Detroit auto show party’s over – at least for the media; it only just begins on Saturday for the public. The confetti, which came in the form of cattle droppings this year, is cleaned up. The cars and trucks are locked so the public won’t steal radio knobs.
So what did we come away with? Automaker execs always ask: what did you think of the show? What did you like? What didn't you like? What did you think of this or that?
After another spin around the floor, here are some unvarnished impressions of the show from AutoObserver’s writers:
(Read more...)
Posted by Michelle Krebs at 2:33 PM under Commentary , Companies , Featured , Technology | Comments (3) | digg this | del.icio.us
Unabashedly American Design
By Jane Nakagawa
Now that Toyota has become the second-largest selling carmaker in the U.S., it appears that the Japanese brand is on the way to becoming the world’s largest automobile manufacturer, surpassing General Motors. In every competition, there are winners and losers, and in this case, slow and steady looks set to win the race.
Toyota’s decades-long pursuit of QDR (quality, durability, and reliability), plus consistent brand building has made the company the darling of business schools as well as consumers. Yet the good news for Detroit is that there is another round to this race, and even the best of companies has an Achilles heel.
And with the 2008 Detroit auto show on the horizon this week, it’s a good time to talk about it. Because it all has to do with design.
(Read more...)
Posted by Michelle Krebs at 3:30 AM under Commentary , Companies , Featured , Personalities | Comments (6) | digg this | del.icio.us
Cerberus-Chrysler: “Reality Bites” Says The Economist
Five months after Cerberus Capital Management was handed the company (for
nothing, in effect) by Chrysler's former parent, Daimler, there are growing fears that the acquisitive private-equity group may have bitten off more than it can chew, The Economist
magazine writes in this week’s edition.
The British publication notes three main problems facing Chrysler’s new management team with little or not time to solve them:
(Read more...)
Posted by Michelle Krebs at 5:42 AM under Analysis , Chrysler , Commentary , Rumors | Comments (2) | digg this | del.icio.us
Maruti Suzuki A-Star Shines at New Delhi Show
By Nick Kurczewski
NEW DELHI, India -- Flashing lights, an elaborate stage, thumping dance music,
and not one but three show cars on display; Maruti Suzuki’s press conference at the New Delhi Auto Expo
was a none-too-subtle reminder that this Indo-Japanese company controls over 50% of the Indian passenger car market.
Maruti Suzuki was the first company in India to mass produce passenger cars and is known for having revolutionized the Indian auto market. Models like the 800 and recently discontinued Zen brought cheap motoring to millions of first-time car buyers.
(Read more...)
Posted by Michelle Krebs at 6:05 AM under Commentary , Companies , News | Comments (10) | digg this | del.icio.us
Manufacturers Still Thinking Big in New Delhi
By Nick Kurczewski
NEW DELHI , India -- With all the attention focused on tomorrow’s launch of Tata’s much-anticipated “1-Lakh†($2,500) city car, it’s all too easy to forget all the other industry news and car launches taking place here at the New Delhi Auto Expo.
Several companies choose to think large, and used the first press day to unveil a variety of sport-utility vehicles and crossover vehicles. Chief among them were General Motors with its Chevrolet Captiva and Tata with its Sumo Grande.
(Read more...)
Posted by Michelle Krebs at 11:38 AM under Commentary , Featured , GM | Comments (0) | digg this | del.icio.us
Jaguar, Land Rover Good Fit for Tata? Moody’s Says Possibly Not
Moody’s Investors Service confirms what many observers have thought: India’s Tata, the maker of inexpensive cars, may not a good fit with luxury marques Land Rover and Jaguar being sold by Ford and wanted by Tata.
Moody’s has placed Tata Motors’ current rating on review for a possible downgrade, according to AFX International Focus, a European financial news service. It sees Tata's swallowing up of Jaguar and Land Rover as creating digestive problems.
(Read more...)
Posted by Michelle Krebs at 1:17 PM under Analysis , Commentary , Ford | Comments (0) | digg this | del.icio.us
Toyota vs. Chevy for Brand Leadership: Chevy Wins
Toyota and General Motors are in a you-know-what match about who owns brand leadership for 2007: Toyota or Chevrolet.
We’ll settle the argument: Chevrolet.
Toyota’s argument to count Scion in Toyota Division sales doesn’t wash.
(Read more...)
Posted by Michelle Krebs at 6:02 AM under Commentary , GM , Toyota | Comments (7) | digg this | del.icio.us
Nardelli, Cerberus Defendeth Too Much?
By Bill Visnic
After issuing a statement just before the holidays saying recent media characterizations of the financial situation at Chrysler LLC “painted an inaccurate picture” of the company’s fiscal health, media and analyst tongues are wagging with suspicion that the company’s hedge-fund owner, Cerberus Capital Management L.P., is scrambling to salvage its car-company investment.
Cerberus, which owns 80.1 percent of Chrysler and typically is closed-mouthed in its dealings with the media, hastened to back up Chairman and CEO Bob Nardelli when The Wall Street Journal reported Nardelli recently told some Chrysler employees the company was “operationally” bankrupt.
(Read more...)
Posted by Michelle Krebs at 9:21 AM under Analysis , Business , Chrysler , Commentary , Companies | Comments (1) | digg this | del.icio.us
Buick Design Will Grow Bolder,GM’s Top Design Exec Says
By Dale Buss
Expect future Buick vehicles to rip a big page from the success of the aggressively styled Enclave crossover and move quickly away from design-legacy retreads such as the company's Lucerne and LaCrosse midsize sedans.
Ed Welburn, GM’s vice president of global design, told AutoObserver that Buick is shifting decisively toward “bold†and “dramatic†design statements such as Enclave while still trying to retain some “elegant†and “romantic†elements from its design theme over the previous generation. He said to expect more iterations of the sort of overstated approach used with Enclave, which is distinguished by cues such as big curves in the sheet metal, lots of chrome exterior trim and huge, elongated headlights.
(Read more...)
Posted by Michelle Krebs at 6:46 AM under Commentary , GM , Personalities | Comments (3) | digg this | del.icio.us
Fiat Revival Celebrations Are Premature
By Richard Feast
It’s being hailed as the turnaround story of the year, but put the champagne back in the cellar. Celebrations about a Fiat revival are premature.
I was a judge on one of those auto industry Man of the Year award panels last
year. Sergio Marchionne, the 55-year-old Italian-Canadian who has done so much to stop the rot at the Fiat group, emerged as the clear-cut winner.
My nomination for someone else stood little chance in the face of overwhelming voting for the “saviour†of Fiat. Still, I have reservations about whether Marchionne deserved the award – because we’ve been here before.
Anyone who’s studied Fiat long enough knows it’s a boom-or-bust group. It is Europe’s equivalent of Chrysler, one year a glamorous master of the automotive universe, another a down-and-out bum.
(Read more...)
Posted by Michelle Krebs at 11:08 AM under Analysis , Commentary , Companies , Featured | Comments (1) | digg this | del.icio.us
GM’s Dream of Mid-Engine Corvette Not Off the Table
By Bill Visnic
With General Motors Corp. unveiling the ultra-high performance ZR-1 and its six-figure price, the possibility of the next-generation Chevrolet Corvette moving to a more exotic mid-engine configuration still is being discussed at the highest levels of GM engineering, planning and marketing, sources close to the situation tell AutoObserver.
The iconic Corvette has used a classic front-engine/rear-drive layout since its inception in 1953. But some factions within the company believe the car should migrate to a mid-engine design for a variety of reasons, not all of them engineering-related.
It is a virtual assurance, however, that a mid-engine design would dictate a price point well in excess of $100,000 – a matter many at GM believe jettisons the Corvette’s heritage for quasi-affordability.
(Read more...)
Posted by Michelle Krebs at 4:29 AM under Commentary , Featured , GM , Technology | Comments (9) | digg this | del.icio.us
Edmunds.com Readers Compare Chevy Malibu, Honda Accord and Toyota Camry in Professional Road Tests
SANTA MONICA, Calif. -- Edmunds.com recently selected six applicants from the “Editor for a Dayâ€
submissions to experience and write about a professional comparison test of three midsize family sedans: 2008 Chevrolet Malibu, 2008 Honda Accord and 2007 Toyota Camry.
The winners were flown to Los Angeles, given appropriate accommodations and training, then encouraged to put the comparison test vehicles through a series of driving exercises at Willow Springs International Raceway on November 29. The winners carefully evaluated the vehicles and their commentary was published on Edmunds.com.
“This is the first time we invited real consumers from around the country to work with us on an actual road test,†said Kevin Smith, editorial director for Edmunds.com.
In the end, three of the demographically and geographically diverse group were split: three (including the two women in the group) chose the Malibu as their favorite; three chose the Accord.
Here is a summary of the “Editor for a Day†winner profiles and their comparison test experiences:
(Read more...)
Posted by Michelle Krebs at 11:37 AM under Commentary , GM , Toyota | Comments (5) | digg this | del.icio.us
Nissan GT-R Goes Underground
By Peter Nunn
TOKYO -- Deep underground, the guests and media throng were waiting. Then, suddenly with lights ablaze and engines roaring, two Nissan GT-Rs sped past in the semi-darkness, sending a flurry of excitement through the crowd lined up against the wall.
A film? Some kind of fantasy? Nope, this was the “Tokyo Underground Night Nissan GT-R X Shutoko Yamate Tunnel,†a full-on media whiz-bang staged on the eve of the new Nissan GT-R super coupe that went on sale in Japan this month.
It’s not every day a new car gets to be launched at night in deep mid-winter in a yet-to-be-opened roadway tunnel in Tokyo, but then the new GT-R is no ordinary car.
(Read more...)
Posted by Michelle Krebs at 7:35 AM under Commentary , Companies , Featured , Technology | Comments (2) | digg this | del.icio.us
Forget BMW. Forget Honda. Europe Car of the Year Says Fiat Makes the Finest Cars
By Richard Feast
LONDON -- Orders for the Fiat 500, the cute little city car that was recently named 2008 Car of the Year in Europe, suggest it will be popular with buyers.
That would make a change. All too frequently in the past, the model COTY judges pronounced ‘the best’ in a given year proved anything but when a more important group of judges had their say: the people who buy new cars each year.
There is clearly a significant divide between what critics acclaim and what consumers will part with their money for. It is evident in many spheres. Theatre critics applaud challenging new dramas, but what the public wants are frothy, tried-and-trusted musicals. Their literary peers recommend Don DeLillo and Thomas Pynchon but buyers in their millions prefer Dan Brown and Robert Ludlum.
(Read more...)
Posted by Michelle Krebs at 7:14 AM under Commentary , Companies , Featured | Comments (4) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 6:28 AM under Commentary , Companies , Featured | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 7:11 AM under Commentary , Ford , News | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 6:08 PM under Commentary , GM , News , Personalities | Comments (0) | digg this | del.icio.us
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.
Posted by Michelle Krebs at 7:02 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 8:02 AM under Commentary , Companies | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 12:05 PM under Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 4:13 AM under Commentary , Companies , News | Comments (0) | digg this | del.icio.us
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.
Posted by Michelle Krebs at 11:52 AM under Commentary | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 5:01 AM under Chrysler , Commentary , Personalities | Comments (0) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 10:02 AM under Chrysler , Commentary , Ford , In the Media | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 9:25 AM under Chrysler , Commentary | Comments (0) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 4:57 AM under Commentary , Ford , News | Comments (0) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 7:27 AM under Commentary , News , Personalities , Technology | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 5:56 AM under Commentary , Ford | Comments (1) | digg this | del.icio.us
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.
(Read more...)
Posted by Michelle Krebs at 7:26 AM under Chrysler , Commentary , Featured | Comments (2) | digg this | del.icio.us
Ford Exec: Taking Time Off – For Now
Richard Parry-Jones
, one of Ford’s executives who last week announced his retirement from the company, told AutoObserver at the Tokyo Motor Show that he’s headed for the beach and three straight months of decompression after his departure at year-end.
But the talented engineer, who, at 56, seems too young and energetic to retire completely, appeared open to new possibilities after a vacation. Maybe he’s got something lined up already.
(Read more...)
Posted by Michelle Krebs at 5:52 AM under Chrysler , Commentary , Ford , Personalities | Comments (0) | digg this | del.icio.us
Tokyo Auto Show: A Race Between Green and Performance
TOKYO – Even before Wednesday’s first press day for the Tokyo Motor Show, the themes of the event were obvious -- and opposite: green and performance.
And on day one, performance outpaced green.
Nissan won hands down for most crowded press conference at which it unveiled the long-awaited GT-R. Even an hour before the designated starting time, the Nissan conference was jammed with no spots available remotely close to seeing the stage for the unveiling. Media excluded from seeing the unveiling, clamored for the highly sought after press kit., which Nissan refsed to distribute until after the press conference.
(Read more...)
Posted by Michelle Krebs at 5:41 AM under Commentary , Companies , Featured , Technology | Comments (0) | digg this | del.icio.us
Renault CFO: Nissan-Renault Set for Small, Cheap Car Boom
TOKYO – Renault intends to launch a next-generation Logan that costs even less to build than the
current one while the automaker simultaneously develops a still cheaper car for India, the chief financial officer of the company told a group of reporters in Tokyo.
Thierry Moulonguet, Renault CFO and chairman of the Nissan-Renault management Committee for the Americas, told reporters in Japan for the Tokyo auto show and the world debut of the Nissan GT-R supercar that the automaker is positioning itself for an expected surge in small car sales globally.
Moulonguet said engineers and designers are working on the second-generation Logan due in 2012 that will cut costs by 15 percent of the original Logan, which has a starting price of about $5,000. Separately but simultaneously, Nissan-Renault is working in partnership with Indian electric rickshaw and motorcycle maker Bajaj Auto Ltd. on a completely new small car for India that will start at $3,000. India-based automaker Tata has announced a similar intention.
"We see this as the segment of the future," Moulonguet said. "Our early launch of the Logan puts us in a good position for selling a car at a very low price."
(Read more...)
Posted by Michelle Krebs at 5:40 AM under Commentary , Featured | Comments (2) | digg this | del.icio.us
Chrysler: What’s Chery’s Role?
Chrysler’s top exec in China says the automaker is exploring how to fill holes in its product portfolio in
small-car segments, the largest-volume categories in the country. And the holes won’t be plugged by Chrysler’s current Chinese partner, Chery.
Simon Elliott, president and CEO of Chrysler Group China Sales Ltd., reiterated what AutoObserver reported during the Frankfurt auto show last month, when Chrysler’s top designer Trevor Creed said Chery would not be Chrysler’s partner in building the B-segment Hornet, a concept for an international people mover. Creed said Chery’s platforms were not appropriate for the Dodge Hornet, and the hunt for another partner was ongoing.
The comments by the two Chrysler executives beg the question: So what is Chery’s role with Chrysler?
(Read more...)
Posted by Michelle Krebs at 7:01 AM under Chrysler , Commentary , News , Rumors | Comments (0) | digg this | del.icio.us
Chrysler’s Turn in the Spotlight This Week
It’s often said in the auto industry that everybody gets their turn in the barrel. In recent weeks, it has been General Motors; next week, it’ll be Ford. But this week it is Chrysler in the spotlight.
On Wednesday, Chrysler faces an 11 a.m. strike deadline set by the United Auto Workers union.
At the same time, word is leaking out – or deliberately being leaked out to strengthen the automakers hand – that Cerberus Capital Management, Chrysler’s new owner, is planning even deeper job cuts than announced earlier this year.
And Chrysler’s top executives, including CEO Bob Nardelli, formerly of Home Depot, and vice chairman for sales and marketing Jim Press, formerly of Toyota, face dealers and meet with the media at Chrysler dealers’ national convention in Las Vegas this week.
(Read more...)
Posted by Michelle Krebs at 7:34 AM under Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
Et Tu, Tom Friedman!
In his October 3 column entitled “Et Tu, Toyota?” New York Times columnist Thomas Friedman expresses his shock and utter dismay that his beloved Toyota is siding with Detroit automakers in what he calls a Michigan-style “assisted suicide” –- opposing stringent fuel-economy standards proposed by the Senate.
In previous columns, the Pulitzer Prize-winning Friedman advocated Toyota take over General Motors and rule the automotive universe on the basis of its pioneering leadership in fuel-efficiency as expressed through a single model, the Toyota Prius hybrid.
Now, Friedman is disappointed and stunned: Toyota, along with GM, Ford and Chrysler, is opposing the tough mileage standards in the U.S. Senate’s draft version of the energy bill, and are lobbying for another bill that is more stringent and separates cars and trucks.
Toyota wasted no time in responding to Friedman's column. General Motors has as well. And so have other industry watchers, including columnists from Motor Trend and Fortune magazines
(Read more...)
Posted by Michelle Krebs at 10:13 AM under Chrysler , Commentary , Featured , Ford , GM , Personalities , Technology , Toyota | Comments (5) | digg this | del.icio.us
Exclusive One-on-One: Mitsubishi Motors President Osamu Masuko
By Peter Nunn
The past decade has been a true roller-coaster ride for
Japan's Mitsubishi Motors. Beset by scandals in Japan, a dramatic fall off in North American profitability and having its main partner, DaimlerChrysler, part company, Mitsubishi had been buffeted by one storm after another.
After racking up huge losses on top of those storms, now comes the turnaround. A three-year business plan coupled with a string of hot new models, with the new Outlander and Lancer leading the way, has seen Mitsubishi undergo the classic product-led recovery.
On Monday, Mitsubishi, now Japan's fastest-growing car exporter, saw its stock jump to its highest level in two months on the Tokyo Stock Exchange. That came after Mitsubishi tripled its operating profit forecast last Friday.
Since January 2005, Osamu Masuko, 58, has been Mitsubishi's personable president and chief operating officer and the man at the helm as Mitsubishi trod the harrowing but now successful path back to profitability. Masuko, who has a business background from the Mitsubishi Corp. and is a 35-year Mitsubishi veteran, spoke to AutoObserver’s Peter Nunn in Tokyo.
(Read more...)
Posted by Michelle Krebs at 7:34 AM under Commentary , Featured , Personalities | Comments (3) | digg this | del.icio.us
Chevrolet Volt: Where Will It Be Built?
Now that General Motors has said it is proceeding with production
of the Chevrolet Volt, the question is where will it be built?
That question may have been answered by negotiators for GM and the United Auto Workers union as they hammered out a new four-year contract overnight.
The UAW gave GM the union-managed health-care fund the automaker wanted, in exchange for GM's commitment to build some future models in U.S. plants by UAW workers. Among those future vehicles was believed to be the Volt.
No word yet on which plant won the prize.
Posted by Michelle Krebs at 6:19 AM under Commentary , GM , Technology | Comments (2) | digg this | del.icio.us
Ex-Hyundai Exec Bound for Ford?
Hyundai Motor America has confirmed its chief operating officer, Steve Wilhite, has resigned, effective Monday.
Wilhite is rumored to be a candidate for a newly created post of chief marketing officer at Ford, according to trade journal Advertising Age.
Ford will not confirm if Wilhite will be appointed to the job or is in the running.
(Read more...)
Posted by Michelle Krebs at 11:57 AM under Commentary , Ford , Personalities , Rumors | Comments (0) | digg this | del.icio.us
Chrysler's Jim Press Speaks Publicly for the First Time Since Leaving Toyota
Former Toyota executive Jim Press, now vice chairman and president of Chrysler, told a Detroit radio show host that Chrysler and Detroit automakers in general will regain market share, lost to companies like Toyota.
“I think every 37 or 38 years you ought to try a new career,†Press, who was at Toyota for 37 years, told Paul W. Smith on his WJR-AM radio show in his first interview since joining Chrysler.
"It's great to be back on the home team. It’s great to be on this team," Press said.
(Read more...)
Posted by Michelle Krebs at 1:33 PM under Chrysler , Commentary , In the Media , Toyota | Comments (3) | digg this | del.icio.us
GM-UAW: Still No Deal as Patience Wears Thin
Negotiators for General Motors and the United Auto Workers union head back to the bargaining table Wednesday after a marathon session over the weekend. Talks ended at 9 p.m. Tuesday night.
Meantime, the union is making noise that it is growing increasingly impatient by threatening to set a strike deadline to speed up the progress. Frankly, the strike talk seems more like bluster than substance. A strike would be devastating to the union, which is bleeding jobs and thus paying members, even more than GM, which can shuffle vehicle production offshore.
While contracts of the past have been wrapped up within a couple of days of the expiration, it is not shocking that these talks are lingering on. Both sides are confronted with the most complicated issues in recent times.
(Read more...)
Posted by Michelle Krebs at 7:39 AM under Commentary , GM | Comments (1) | digg this | del.icio.us
UAW-Big Three Talks: The Clock Is Ticking
The United Auto Workers' contracts with General Motors (which the union selected Thursday as its strike target), Ford and Chrysler officially expires at 11:59 p.m. Friday.
What will happen as the clock strikes midnight?
Exactly nothing. At least as far as the outside world is concerned.
Ford and Chrysler have signed temporary extensions. And even with GM as the lead target and UAW’s local preparing strike posters, the talks likely will continue on past the witching hour and possibly days, if not weeks, thereafter.
(Read more...)
Posted by Michelle Krebs at 6:25 AM under Chrysler , Commentary , Featured , Ford , GM , Toyota | Comments (1) | digg this | del.icio.us
Another Shocker: Chrysler Steals Expert on China
As the industry recovers from the shock of Thursday’s announcement that Chrysler had hired Toyota’s top-ranking, Jim Press, the automaker dropped another bombshell: it has hired Phil Murtaugh away from Shanghai Automotive Industry Corp., General Motors’ joint venture partner in China.
In Chinese circles, the news of Murtaugh joining Chrysler in China is nearly as big as the news of Press joining Chrysler in the U.S. as he is credited with building GM’s extraordinarily successful China business.
And the move demonstrates, yet again, Chrysler’s new owner, Cerberus Capital Management, is pulling out all of the stops to buy the world’s best automotive talent to turn Chrysler around.
Murtaugh’s hiring also suggests what AutoObserver has long suspected – that there is a serious China connection involved in Cerberus’ purchase of Chrysler.
(Read more...)
Posted by Michelle Krebs at 4:35 AM under Chrysler , Commentary , Personalities | Comments (1) | digg this | del.icio.us
Volkswagen's Jacoby: HQ Move Tip of the Iceberg
By Bill Visnic
In a conference call with journalists following Thursday’s announcement that Volkswagen of America Inc. will move its headquarters from the suburbs of downtrodden Detroit to tony northern Virginia, new VWoA president and CEO Stefan Jacoby insists the relocation is much more than a change of scenery: this time, VW intends – really intends – to change its thinking.
Jacoby says the move is the beginning of the company’s urgent, there-is-no-tomorrow philosophy to re-connect with customers and offset years worth of brand-management missteps. In addition, macroeconomic forces have built up, demanding a more focused attack in the increasingly challenging U.S. market.
He says the strategy is based on addressing five crucial areas: product, brand positioning, its dealer network and its internal organization. Ah, but that’s only four. The fifth point – the very real possibility of VW building a new U.S. assembly plant – is the most provocative.
The following are some select snippets from Jacoby’s question-and-answer session:
(Read more...)
Posted by Michelle Krebs at 4:17 PM under Commentary , News , Personalities | Comments (14) | digg this | del.icio.us
Volkswagen: Packing Its Bags for Virginia
Volkswagen of America is expected to announce at a press conference today that it is moving its corporate headquarters from the Detroit suburbs to Herndon, Va.
The company said it would bring 400 jobs to Virginia, eliminate 400 positions and leave 600 employees and contractors at its current headquarters in the Detroit suburb of Auburn Hills, Mich. The company said the move would be completed by the end of 2008, adding it would invest more than $100 million to establish its headquarters in a new office building near Washington Dulles International Airport.
Reading between the lines of an interview with VWoA’s new president and CEO, Stefan Jacoby, in charge only since Saturday, Northern Virginia is a better place for VW employees to live than Michigan and a better place for VW to do business.
(Read more...)
Posted by Michelle Krebs at 1:46 PM under Commentary , Companies , Featured , News | Comments (3) | digg this | del.icio.us
On a Lighter Note: Animal Sacrifice or Animal Giveaway?
Maybe automakers are going about this sales thing all wrong.
Maybe what they need is a good old-fashioned animal sacrifice to please the gods into delivering higher sales. Or maybe they need a clever marketing gimmick -– like giving away an animal with every vehicle sale.
(Read more...)
Posted by Michelle Krebs at 6:03 AM under Commentary | Comments (0) | digg this | del.icio.us
John Edwards: Fellow Americans, Sacrifice Your SUVs
Democratic Presidential Candidate John Edwards is calling for Americans to make a sacrifice for the environment by getting out of their SUVs and into more fuel-efficient vehicles.
"I think Americans are actually willing to sacrifice," Edwards told the International Association of Machinists and Aerospace Workers Wednesday. "One of the things they should be asked to do is drive more fuel-efficient vehicles."
It didn’t take long for one automaker to respond.
(Read more...)
Posted by Michelle Krebs at 11:04 AM under Chrysler , Commentary , Personalities , Technology | Comments (6) | digg this | del.icio.us
Indian-Owned Jag, Land Rover?
It is looking increasingly likely that an automaker from India could become the new owner of the now Ford-owned Jaguar and Land Rover.
Two Indian automakers, Tata Motors Ltd., and Mahindra & Mahindra Ltd., are among the bidders for Jaguar and Land Rover, which Ford hopes to sell as a package. And they may well be the front-runners among the bidders.
(Read more...)
Posted by Michelle Krebs at 7:55 AM under Commentary , Ford , Personalities , Rumors | Comments (0) | digg this | del.icio.us
Chrysler: Whole Lotta Shaking Up Going On
Cerberus Capital Management has owned Chrysler barely over three weeks with
CEO Bob Nardelli at the helm during that time. Yet, there’s already a whole lotta shaking up going on at the auto company.
Chrysler made a number of significant moves this week:
* proposed plans to shed a couple of non-core operations –- Chrysler Transport and all or parts of Mopar;
* reshuffled the manufacturing management ranks, with some veterans taking retirement;
*appointed an up-and-comer to specifically be responsible for executing (and possibly accelerating and deepening?) the automaker’s recovery plan;
*held management meetings at which Nardelli shared his vision of Chrysler's future.
And the week's not half over.
These moves are but a precursor tremor to what is likely to take place in the future as Chrysler’s new owners attempt a quick turnaround of the automaker -– and likely sell it within the next few years.
(Read more...)
Posted by Michelle Krebs at 7:40 AM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
Guest Commentary: Why the West Need Not Fear China
By Richard Feast
The People’s Republic of China has set its auto industry the task of destroying the rest of the world’s automakers.
We know this is true because every newspaper, magazine, TV channel, Web site and blog keeps sounding the alarm these days. “Beware! The Chinese auto industry is coming,†is the dire warning.
Zap – there goes General Motors.
Bang – that’s Toyota finished.
Blam – good-bye, Mercedes.
This is PlayStation stuff, only less plausible.
It is time for a more level-headed assessment of the potential of China’s auto industry beyond the country’s borders.
In reality, China will have little impact on the West any time soon -– if at all.
(Read more...)
Posted by Michelle Krebs at 5:58 AM under Commentary , Featured | Comments (6) | digg this | del.icio.us
Chrysler Lifetime Warranty: Short-Lived Buzz?
Chrysler’s recently announced lifetime warranty is quite the buzz in the industry and on the airwaves, but the buzz may be short-lived.
Trade journal Automotive News reports that Chrysler’s lifetime warranty has been met with near universal praise by dealers, who say it is generating showroom and online traffic.
“Our whole dealership is energized by it. Our customers are shocked by it. They don't believe it. You've got to explain it to them," Ralph Mahalak Jr., a Chrysler dealer in Monroe, Michigan, told Automotive News.
Indeed, explanation is required: Lifetime means not the owner’s lifetime but the lifetime of the Chrysler vehicle if that one person owns it. And those buyers are few and far between, according to Edmunds.com.
(Read more...)
Posted by Michelle Krebs at 7:36 AM under Chrysler , Commentary | Comments (0) | digg this | del.icio.us
Honda Lifts the Covers on the Accord
Old timers fondly recall the days when dealerships covered their showroom
windows and tore the coverings away giving the crowds amassed outside their first look at that year’s new model.
The same thing happened this week in the virtual world as Honda lifted the covers, so to speak, on the popular Accord, redesigned for the 2008 model year. Edmunds.com’s forum visitors, in fact, waited up for the midnight lifting of the embargo Monday and provided instant feedback on the new model.
(Read more...)
Posted by Michelle Krebs at 7:20 AM under Commentary , Companies | Comments (2) | digg this | del.icio.us
Chevrolet Volt: 60,000 Copies a Year, Sources Tell Bloomberg
General Motors may build as many as 60,000 of its Volt electric cars for their
inaugural year on the market, four times the sales of Toyota's Prius hybrid on its U.S. debut, people with knowledge of GM's plans told Bloomberg News
.
Production at that level may allow GM to sell the plug-in Volt for less than $30,000 (the Prius starts at $22,175 with 60,000 a year sold in the U.S.), the sources said.
(Read more...)
Posted by Michelle Krebs at 6:36 AM under Commentary , GM , Technology , Toyota | Comments (2) | digg this | del.icio.us
Chevrolet Malibu: “Very Important” to GM and Chevy
Ask anyone at General Motors how important the upcoming 2008 Chevrolet
Malibu is and you’ll likely get a rather reserved response.
Like the one Chevrolet General Manager Ed Peper (PEEP-er) gave AutoObserver in an interview Monday: “It’s a very important vehicle for us.â€
That’s an understatement.
Still somewhat restrained especially for him, GM Vice Chairman Bob Lutz goes a tad further. In his GM FastLane blog, in which he wrote about his recent "weekend with a Bu," he called its introduction “one of the most important passenger car launches in recent General Motors history.†He added: “We’ve put a lot of blood, sweat and tears into this vehicle.â€
GM executives’ caution is understandable and wise, since the automaker has oft been accused of over promising and under delivering. But the launch of the 2008 Chevrolet Malibu is beyond “very important.â€
Let us count the reasons why:
(Read more...)
Posted by Michelle Krebs at 5:11 AM under Analysis , Commentary , Featured , GM | Comments (11) | digg this | del.icio.us
Auto Parts Makers: More Trouble Ahead
A number of North American car parts makers may miss sales forecasts this year as falling demand for cars and trucks force GM and Ford, particularly, to cut production, Bloomberg News reports.
"Hundreds or thousands'' of auto suppliers may go out of business in the next five years, Laurie Harbour-Felax, a Farmington Hills, Michigan, consultant who advises parts makers told Bloomberg. “Some of these suppliers will go into bankruptcy and be bought up in pieces; some will just go away. It will be devastating.''
Obviously, the most vulnerable are those who have hitched their wagons largely to GM, Ford and Chrysler. Conversely, the least vulnerable are those who supply Toyota and other import makes as well as those that have diversified into overseas markets like China.
(Read more...)
Posted by Michelle Krebs at 6:54 AM under Commentary , Companies | Comments (1) | digg this | del.icio.us
China Defends Product Quality Via TV
Chinese state television launched a weeklong series of programs called “Believe in Made in China” to defend the country's reputation as a safe maker of global goods, the Associated Press reported this morning. At the same time, New Zealand is investigating unsafe chemicals used on children’s clothing from China.
Automakers have been mum on the topic, but, hopefully, are quietly focusing more intently on quality controls of increasing number of parts they buy from China. Exports of auto parts from China are predicted to double to $40 billion by the end of 2010, the China Association of Automobile Manufacturers forecasts.
(Read more...)
Posted by Michelle Krebs at 6:34 AM under Commentary , News | Comments (0) | digg this | del.icio.us
Lexus Marketing Exec Headed to Chrysler
Lexus marketing vice president Deborah Wahl Meyer is headed for the top Chrysler marketing post.
Chrysler confirmed today that Meyer is the new vice president and chief marketing officer of Chrysler, effective Aug. 28.
Meyer, 44, is considered a marketing whiz kid; Chrysler needs some marketing magicand some first aid for its damaged dealer relations; new Chrysler owners are bound to sweep some current folks and bring in new troops to achieve its ambitious plan to turn the company around in three years.
(Read more...)
Posted by Michelle Krebs at 8:04 AM under Chrysler , Commentary , News , Personalities , Toyota | Comments (2) | digg this | del.icio.us
Chevrolet Volt Generates Buzz From Gun Owners
Forget about granola-nibbling Californians as the mainstay of electric cars. Gun-toting pickup drivers want ’em, too.
AutoObserver’s entry on General Motors’ Chevrolet Volt electric car generated quite the buzz when it was picked up on a forum of a gun-owners’ Web site, billed as the “Home of the Black Rifle.â€
The general consensus of those on the gun-owners' Web site was in favor of electric vehicles -- as long as they have the performance, range, price, etc. of their current vehicles. They want them not for highfalutin reasons like energy independence and energy security or environmental cleanliness but for gas and money savings.
(Read more...)
Posted by Michelle Krebs at 11:14 AM under Commentary , GM , Technology , Toyota | Comments (6) | digg this | del.icio.us
Taking Heat for “Uncool” Minivans
My comment printed in the Wall Street Journal, and later picked up by other
publications including the Detroit News
, about minivans being considered uncool drew a lot of heat –- mostly from colleagues and friends who love their sliding-doored vehicles.
"Frankly, sliding doors are what give minivans open access, but that's what makes them uncool. Practical, yes, but uncool," I told the Journal reporter, a story on the introduction of Chrysler’s new minivans and the segment entitled “The minivan is dead; long live the minivan?†The 2008 Chrysler Town & Country and the 2008 Dodge Grand Caravan go on sale soon.
(Read more...)
Posted by Michelle Krebs at 10:11 AM under Chrysler , Commentary , In the Media | Comments (1) | digg this | del.icio.us
Chevy Volt: The Machine That Changes the World?
After announcing Thursday that it had signed a contract with a little-known
Massachusetts company to develop lithium-ion batteries, General Motors hosted a dinner to introduce the growing team of engineers working on the electric-powered Chevrolet Volt and the newly signed-on battery makers.
David Cole, Ph.D., chairman for the Center of Automotive Research, which hosted the conference at which GM made its announcement, sat next to me. As the discussions with the engineers and, in particular, the battery developers grew deeper throughout the evening, Cole, a retired professor of mechanical engineering at the University of Michigan, could not stop saying: “Wow.â€
By evening’s end, Cole, who’s privy to lots of inside information at all the auto companies and has served on boards of technical companies, said he was now very optimistic about the future prospects for the Volt and subsequent GM electrified vehicles. “This is the game changer†unlike anything he’d seen in his long automotive career, he said.
Indeed, if GM succeeds with electrified vehicles like the Volt, the automaker may well turn the auto industry and nearly every business model within it on its ear –- from the kinds of cars we drive (electric versus gasoline) to the way consumers buy cars.
Cole sees the biggest risk to GM’s venture as something seemingly simple: cheap gas.
(Read more...)
Posted by Michelle Krebs at 5:01 AM under Analysis , Commentary , Featured , GM , Technology , Toyota | Comments (10) | digg this | del.icio.us
GM's Lutz Blasts Auto "Experts"
General Motors Vice Chairman Bob Lutz blasted so-called automotive experts who refer to Big Three auto executives as "Detroit Dinosaurs" during his speech delivered to the Center for Automotive Research's annual management conference Thursday.
"We have been routinely dismissed as dumb, unprepared, anachronistic, an endangered species...
(Read more...)
Posted by Michelle Krebs at 2:23 PM under Commentary , GM , Personalities | Comments (12) | digg this | del.icio.us
Big 3 Won't Gain Much From Union Givebacks, CAW Says
General Motors, Ford and Chrysler would save only $500 a vehicle in production costs if they "get everything they are asking'' in U.S. labor talks, said Buzz Hargrove, head of the Canadian Auto Workers union, in a speech reported on by Bloomberg News Monday.
"Labor concessions cannot possibly have any meaningful effect on the Big Three's market share in their home market,'' Hargrove said at an analyst presentation in Dearborn, Michigan, according to a union summary of his remarks obtained by Bloomberg. Reporters weren't allowed to attend.
(Read more...)
Posted by Michelle Krebs at 5:09 AM under Chrysler , Commentary , Ford , GM | Comments (0) | digg this | del.icio.us
Chrysler Designer Gives Glimpse into Historic Day
As Ralph Gilles, Chrysler’s famous designer of the Chrysler 300 and now vice president of Jeep, truck and advance interior design, tooled into work Monday morning, he decided he ought to trade his music for AM radio -– something he never does.
But, this was a special day -- the first day of Chrysler’s new ownership and the celebration of that event.
He then heard the news that the press had broken the night before but he hadn’t heard: ex-Home Depot CEO Bob Nardelli was his new boss as Chrysler’s chairman and CEO.
“I about fell off my rocker,†Gilles told the press at a Chrysler gathering in Traverse City, Michigan, where industry leaders are meeting for the University of Michigan's annual management conference and at which Gilles was scheduled to speak Monday on innovation.
(Read more...)
Posted by Michelle Krebs at 3:22 PM under Chrysler , Commentary , Personalities | Comments (4) | digg this | del.icio.us
New Chrysler: The Party Is Over Before It Starts
Even before the party celebrating Chrysler’s divorce from Daimler and its
marriage to private equity firm Cerberus Capital Management Corp. began for employees Monday, the party was over.
The late Sunday night announcement that the controversial former CEO of Home Depot, Bob Nardelli, is Chrysler LLC’s new chairman and CEO is an indication that business as those at Chrysler have known it is over.
Despite all of its claims of patience, being in for the long haul and seeming compassion, Cerberus has sent the clear message that it intends to move quickly -- and likely ruthlessly -- to turn Chrysler around. In fact, Nardelli’s compensation requires it.
No more status quo. No more Mr. Nice Guy.
(Read more...)
Posted by Michelle Krebs at 7:04 AM under Chrysler , Commentary , Featured , Personalities | Comments (7) | digg this | del.icio.us
GM’s Volt: More Stretch Than Toyota’s Plug-In Hybrid, Bloomberg Reports
Kudos to Bloomberg News for reporting what many of us covering the auto
industry noticed but hadn’t written -– and shame on us for not doing so: Toyota's recently announced plug-in hybrid
has far less range than does General Motors’ Chevrolet Volt
concept -– as little as half the range, in fact.
GM intends for the Volt to travel at least 40 miles after being charged; Toyota’s model may go no more than 20 miles on a single charge and possibly as little as 10 miles, Bloomberg reports, quoting sources familiar with the vehicles.
Interestingly, Bloomberg also quotes an unlikely source of praise for GM: Chris Paine, whose 2006 documentary, Who Killed the Electric Car? criticized GM’s decision to drop and destroy the EV-1.
(Read more...)
Posted by Michelle Krebs at 7:41 AM under Commentary , Featured , GM , Personalities , Technology , Toyota | Comments (6) | digg this | del.icio.us
Tower Automotive CEO Steps Down
One of the auto industry’s highest-ranking women, Kathleen Ligocki, has stepped down as CEO of struggling auto supplier Tower Automotive. She will become a consultant for Tower’s new owner, Cerberus Capital Management, which is also buying Chrysler.
Ligocki, 50, has been president and CEO of Detroit area-based Tower since August 2003. She joined Tower from Ford, where she had been personally recruited by then CEO Jac Nasser.
(Read more...)
Posted by Michelle Krebs at 8:58 AM under Commentary , Companies , News , Personalities | Comments (1) | digg this | del.icio.us
Edmunds.com Forecast: July Sales Down
Summer 2007 is turning out to be rather unusual compared to summers of the recent past, and it is showing up in sales.
This summer, no big blowout, model-year-end incentives are being offered -- yet -- to consumers to clean up leftover inventories. In recent years, General Motors has led the parade with big campaigns that have forced others to follow, But throughout this year, GM has tempered its incentives.
As a result, in part, July new vehicle sales, to be announced next week, are expected to be down for the industry, according to Edmunds.com's forecast.
(Read more...)
Posted by Michelle Krebs at 8:04 AM under Analysis , Chrysler , Commentary , Featured , Ford , GM , Toyota | Comments (0) | digg this | del.icio.us
Guest Commentary: Detroit's Big Three on the Road to Oblivion
By Richard Feast
Oh, how my old colleagues in the U.S. liked to tease if the topic of the decline of the U.K. auto industry arose.
The derision was deserved. The U.K. automotive industry was second in scale only to that of the U.S. in the 1950s. It was the world’s leading car exporter, putting bread on hundreds of thousands of tables across the country.
Today, the U.K.’s indigenous manufacturers have either vanished or been taken over by foreign competitors. No other country has so nonchalantly kissed good-bye so much potential wealth-creation in so short a time.
But events in the U.S. auto industry, where the Big Three's share is nearing less than 50 percent, parallel those in the U.K. a couple of decades ago.
Whisper it, but Detroit is now on that same road to oblivion.
(Read more...)
Posted by Michelle Krebs at 3:22 PM under Analysis , Commentary , Featured | Comments (11) | digg this | del.icio.us
Ford Dumps Familiar Names; Invests in Obscure Romanian Firm
Maybe it makes sense, but it seems ironic. Ford has sold Aston Martin, put Jaguar and Land Rover on the auction block and may be selling Volvo.
At the same time it ditches these famous marques, Ford is investing in a Romanian carmaker most of us, even in the auto business, have never heard of. Ford said Monday it plans to invest $930.6 million for a majority stake in Automobile Craiova. That's about $100 million more than Ford received for selling almost all of Aston Martin; Ford has maintained a tiny piece of the British luxury maker.
Ford says it plans to boost employment to between 7,000 and 9,000 people from the current 3,900 and, by year-end, increase vehicle output to 300,000 units from a scant 24,000 last year.
(Read more...)
Posted by Michelle Krebs at 7:56 AM under Commentary , Ford , News | Comments (0) | digg this | del.icio.us
Exclusive One-on-One with GM's Mark LaNeve
In an effort to kick -– or at least taper back –- the incentive habit as
it was launching a host of new vehicles, General Motors announced that for the 2006 model year it was cutting prices on vehicles accounting for about 90 percent of its sales volume -– some by as much as $2,500.
The timing of the price repositioning came as GM headed into 2006 launching 19 new products representing more than 1.5 million sales. GM has introduced even more new models since then.
“This is a big step for us and arguably the biggest price repositioning in our history,†Mark LaNeve, GM vice president, North America Vehicle Sales, Service and Marketing, said in making the announcement at the 2006 Detroit Auto Show. “This move is in line with our customers’ desire for simple, compelling prices.â€
But not enough consumers have found the prices compelling, apparently.
Only a week after reporting unexpectedly dismal June sales that resulted in GM’s lowest monthly market share ever (aside from July 1998 when it was shut down by a strike), LeNeve gave GM’s so-called value pricing a B grade. In an interview with AutoObserver.com, LeNeve says value pricing has done positive things for GM but has not generated the hoped-for sales volume.
(Read more...)
Posted by Michelle Krebs at 10:21 AM under Commentary , Featured , GM , Personalities | Comments (1) | digg this | del.icio.us
Rep. Ed Markey: Stupid Comment of the Week
To you, Rep. Ed Markey, goes the Stupid –- and Insulting –- Comment of the Week for this one:
“Innovations such as the plug-in hybrids should not have been sitting on the shelf for so long,†he said. “After all, this isn’t rocket science; it is auto mechanics.â€
Where to begin?
(Read more...)
Posted by Michelle Krebs at 6:52 AM under Commentary , Personalities , Technology | Comments (4) | digg this | del.icio.us
Mazda: Missed Opportunity with No Mazda 2 for America
By Peter Nunn
Soaring gas prices are heating up U.S. demand for compact, fuel-efficient cars. So Mazda must be kicking itself now for not having its new Mazda 2 mini join the party, right?
The cute, crisp all-new Mazda 2 -- launched to great acclaim in
Europe and now on sale in Japan as the 1.3- to 1.5-liter Demio -- seems on the face of it the perfect head-on rival for the Nissan Versas, Honda Fits and Toyota Yarises of this world.
It looks good, has great dynamics and is deliciously affordable (prices start at just $9,186 in Tokyo). What’s more, official fuel economy numbers go as high as 54 miles per gallon, putting it up with the top of the class.
But at the launch party for the Mazda 2/Demio in Tokyo today, Mazda officials said the car won’t be heading to the U.S. anytime soon.
(Read more...)
Posted by Michelle Krebs at 6:24 AM under Commentary , Companies | Comments (6) | digg this | del.icio.us
Hyundai Exec Considers How Gas Engines Can Deliver More Bang for the Buck
John Krafcik, Hyundai’s vice president of product planning and strategy in the U.S., pondered aloud over dinner last night which option would deliver more bang for the buck: investing in pricey hybrids and diesels to meet inevitably stricter fuel economy and carbon-dioxide standards or pumping smaller bucks into refining current gasoline engines.
“I think there’s more to wring out of gasoline internal combustion engines for a lower investment,†he said of the engines that have been around for well over a century.
(Read more...)
Posted by Michelle Krebs at 7:43 AM under Commentary , Companies , Technology | Comments (1) | digg this | del.icio.us
Elena Ford Shifts Gears
Ford executive Elena Ford has changed jobs. She’s moving from
the car side of the business to financial services.
Effective August 1, Elena Ford will become executive vice president in charge of global brand and marketing at Ford Credit.
She had served as Ford’s director of product marketing, planning and strategy for North America. However, many inside –- and outside –- of the company questioned Elena Ford’s expertise in such a key role during Ford's critical turnaround effort.
(Read more...)
Posted by Michelle Krebs at 7:26 AM under Commentary , Ford , News , Personalities | Comments (0) | digg this | del.icio.us
Chrysler Has Rosy Future, Zetsche Says
Chrysler has a rosy future, says DaimlerChrysler CEO Dieter Zetsche.
"The coming years are going to be good," Zetsche told Germany's daily Der Tagesspiegel in an article published Monday.
Cerberus Capital Management, the private equity firm that bought 80.1 percent of Chrysler, hopes investors see the automaker’s future as rosy as it takes its show on the road seeking investors.
(Read more...)
Posted by Michelle Krebs at 7:14 AM under Chrysler , Commentary | Comments (0) | digg this | del.icio.us
Chrysler Product People: Back to Their Drawing Boards
Top Chrysler executives reportedly are outraged and embarrassed by recent product misses, specifically
the Chrysler Sebring sedan and Dodge Nitro SUV. The two vehicles have been panned by critics and earned poor reviews by Consumer Reports
.
As I wrote in my Inside Story column posted today on Edmunds’ InsideLine.com, Chrysler needs its product and styling mojo back. That should top the to-do list of Chrysler’s new owner, Cerberus Capital Management, when it takes over the auto company sometime next month.
And absolutely, Chrysler’s very top executives should be embarassed by some of what they’ve turned out of late. However, outraged. At whom? At others? No way, guys. The buck stops with you.
(Read more...)
Posted by Michelle Krebs at 10:30 AM under Chrysler , Commentary | Comments (6) | digg this | del.icio.us
Chrysler Group, Land Rover and Jaguar?
What an interesting concept: a car company that sells Chrysler, Dodge and Jeep models as well as Land Rover sport-utes and Jaguar cars.
It is a possibility, according to the Financial Times in London. The newspaper reported over the weekend that Cerberus Capital Management Group, which is set to close on its purchase of Chrysler next month, has expressed interest in bidding on one or both of the luxury brands put up for sale by Ford.
Another familiar name popped up in regard to Land Rover and Jaguar. Jac Nasser, former Ford CEO, reportedly is heading a study of the brands on behalf of buyout firm One Equity Partners.
And Automotive News reports rumors have former Ford exec, David Thursfield, head of Cerberus’ automotive units, leaving the firm. Thursfield had told the trade publication some time ago that he felt it was inappropriate for him to be involved with a Cerberus-owned Chrysler, given his long tenure at Ford. Maybe the addition of Land Rover and Jaguar will lure him to stay.
(Read more...)
Posted by Michelle Krebs at 6:25 AM under Chrysler , Commentary , Ford , Personalities , Rumors | Comments (0) | digg this | del.icio.us
Mulally: Putting His Stamp on Ford
Things seem to be happening at Ford Motor Co. these days, which suggests CEO Alan Mulally is making
some moves and putting his stamp on the place.
Though he’s only been on the job since fall, many of us are saying: “Finally.â€
Among the latest moves at Ford:
Mulally reportedly is boldly pushing for a 30 percent cut in hourly labor costs in this summer’s national contract talks with the United Auto Workers union in hopes of reaching parity with Asian automakers.
Ford confirmed it has put Land Rover and Jaguar on the block; it already sold Aston Martin in March.
(Read more...)
Posted by Michelle Krebs at 7:45 AM under Commentary , Ford | Comments (6) | digg this | del.icio.us
Chinese Vehicles: Slipping Across the Border as Legal Aliens
Ross Perot never envisioned Chinese vehicles slipping across the border legally and duty-free when he championed opposition to the North American Free Trade Agreement because, he insisted, Americans would hear the “giant sucking sound” of American jobs heading south to Mexico.
Now "the giant sucking sound" could be that of the U.S. drawing Chinese vehicles in from Mexico as a Chinese automaker announced Tuesday. Said automaker will begin exporting pickups and SUVs to Mexico this year as a springboard to break into the U.S. market.
Bill Pollack, chairman of New Jersey-based Chamco Auto, the distributor for the Chinese vehicles, told Reuters he had brokered a deal allowing China's Zhongxing Automobile to export 50,000 vehicles duty-free to Mexico and build a plant in the border city Tijuana to assemble models for export to the United States. Assembling the Zhongxing vehicles in Tijuana will make them Mexican under NAFTA, so they can be exported to the U.S. duty-free, Pollack said.
(Read more...)
Posted by Michelle Krebs at 5:43 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
Ikea Goes Hybrid, Trading Skodas for Civics
Swedish retailer Ikea will convert its entire company car fleet in the U.K. to hybrids as a prelude to a
possible company-wide shift to greener vehicles, the Financial Times
in London reports.
Ikea’s move is significant on a number of fronts:
*the switch will make Ikea Britain’s first big private sector company to change its entire company car fleet to greener vehicles;
* the move is a significant one for the growing market for alternative-fuel cars, given the home furnishing group’s size and global reach;
* the effort is a coup for Honda, which has seen rival Toyota achieve global dominance in hybrids. The cars will be billboards for Honda as the back of the cars will read: “This is a Hybrid company car from Ikea. Ikea’s business will have an overall positive impact on the environment";
* other companies are sure to follow suit as Ikea racks up image points and economic savings.
(Read more...)
Posted by Michelle Krebs at 7:19 AM under Commentary , Companies , Technology | Comments (0) | digg this | del.icio.us
Big Three Discuss Union-Run Health-Care Fund, Bloomberg Reports
General Motors, Ford and Chrysler may propose in this year’s labor talks that the United Auto Workers (UAW) manage a health-care fund financed by the automakers, Bloomberg reports sources as saying today.
The U.S. automakers have discussed such a fund as a possible alternative to eliminate most of a combined $114 billion in retiree health-care obligations, sources told Bloomberg. Under the joint fund proposal, the companies would contribute a percentage of their retiree liabilities to the fund, whose assets and investment proceeds would cover retiree medical benefits.
(Read more...)
Posted by Michelle Krebs at 7:46 AM under Business , Chrysler , Commentary , Ford , GM , In the Media , News | Comments (0) | digg this | del.icio.us
Fortune magazine: Cerberus Signs on Ex-Chrysler Design Chief Tom Gale
Former Chrysler Design Chief Tom Gale, reportedly has signed on as one of the many expert advisors by Cerberus Capital Management that is buying Chrysler, according to a profile on Cerberus in the June 18 issue of Fortune magazine.
Adding Gale to the growing roster of automotive experts suggests Cerberus is serious about turning Chrysler around and gets what needs to be done: get Chrysler's styling mojo back!
One of Chrysler’s major problems of late –- which under Gale had been its major strength –- is styling. Chrysler hasn't had a major design hit since the Chrysler 300, now long in the tooth.
(Read more...)
Posted by Michelle Krebs at 5:01 AM under Chrysler , Commentary , Featured , Personalities , Rumors | Comments (4) | digg this | del.icio.us
A BMW Purchase of Volvo? More Questions Than Answers
By Mark Bursa
Reports that Ford might sell Volvo to BMW have certainly raised eyebrows in the auto industry. After all,
it’s only a few months ago that Ford told Renault in no uncertain terms that its Swedish luxury brand was not for sale.
Furthermore, Ford claims Volvo is profitable, and its role within the company’s Premier Auto Group (PAG) has become more sharply focused in the wake of Ford’s ongoing downsizing of Jaguar into a Porsche-sized prestige-and-performance car brand.
This leaves Volvo as Ford’s European luxury brand –- a direct rival to BMW and Audi. Why would Ford suddenly decide to exit this sector and surrender to a rival a brand whose star is on the rise?
(Read more...)
Posted by Michelle Krebs at 6:38 AM under Analysis , Commentary , Companies , Featured , Ford | Comments (2) | digg this | del.icio.us
Marketing to Women: Soccer Moms, Yoga Moms, Twinkie Moms
My son and I were piling into the Volkswagen Rabbit test car in
front of the 7-Eleven, loaded up with our favorite after-school snacks – frozen Cokes, Twinkies and Cheetos – when my teen noticed the woman passing in front of our car with two small children in tow.
“That’s a yoga mom,†he said matter-of-factly. I’d never heard the term before, but it rolled off his tongue as if it were an everyday label. And I knew what he meant.
(Read more...)
Posted by Michelle Krebs at 5:20 PM under Analysis , Chrysler , Commentary , Featured , Ford , GM , Toyota | Comments (1) | digg this | del.icio.us
Mazda: A Classic Turnaround Tale
By Peter Nunn
To win in the auto business, various paths to glory exist. At the Mazda Motor
Corp., they’re doing it the classic, time-honored way: by building sharp-looking vehicles with spirited driving dynamics and a solid image, cars people actually are excited to buy.
Cars like the Mazda 3 and Mazda 6, plus the Mazda 5 minivan and new wave CX-7 and CX-9 crossovers, are increasingly putting Mazda on the map and in American driveways.
Mazda’s lightweight MX-5 Miata two-seater is the world’s best-selling sports car. The radical four-seat, rotary-powered RX-8 remains an innovative and unique contender in the enthusiast sport coupe market.
Mazda’s all-new Mazda 2, its latest entry, had its world premier at the Geneva show in March. The new 2, well packaged and impressively light, already is earning glowing reviews, though it won’t immediately be heading for North America.
Something’s clearly going right for Mazda. What we are seeing is the classic product led recovery.
(Read more...)
Posted by Michelle Krebs at 4:50 AM under Analysis , Commentary , Companies , Featured , Ford | Comments (1) | digg this | del.icio.us
Chrysler Sold: Is There a China Connection?
Relief, exhilaration and even euphoria best describe the mood at Chrysler and in Detroit
last week after DaimlerChrysler announced its sale to private equity firm Cerberus Capital Management. The wait was over, and a decision was made.
Now, reality is setting, and with that is increasing wariness and even suspicion.
What’s the bigger picture for Cerberus, especially in light of a host of other automotive investments it has made? Are its automotive investments purely a money play? Or is there something else? Is there a China connection or some other kind of overseas connection?
No one will know until the story unfolds because Cerberus is private and intensely secretive.
(Read more...)
Posted by Michelle Krebs at 5:21 AM under Chrysler , Commentary , Featured , Rumors | Comments (0) | digg this | del.icio.us
Daimler-Chrysler: Why the Marriage Failed
Marriage metaphors abound in the breakup of Daimler and Chrysler. Indeed, any divorce prompts an analysis of why a marriage failed.
DaimlerChrysler CEO Dieter Zetsche says no one is to blame, including the United Auto Workers union. In various interviews published today, Zetsche claims the UAW’s unwillingness to grant health care concessions to Chrysler as it did to General Motors and Ford was not the reason for the breakup. “This did not affect our relationship and this did not lead to the final decision,” he insisted to the Detroit Free Press.
Instead, he said, the relationship started unraveling a year ago. When he was promoted from Chrysler CEO to DaimlerChrysler CEO, he said he had intended to create more partnerships between Chrysler and Daimler but found limited overlap because of Mercedes’ premium position and Chrysler’s mainstream one.
Chrysler CEO Tom LaSorda said roughly the same thing at his Tuesday press briefing. Top-level management overestimated the synergies between Chrysler and Mercedes.
(Read more...)
Posted by Michelle Krebs at 8:15 AM under Chrysler , Commentary , Personalities | Comments (2) | digg this | del.icio.us
Can Cerberus Still Bail If Unions Don’t Relent?
The timing of union contract negotiations and Cerberus closing on its purchase of Chrysler prompts the question: Can Cerberus bail if contract talks are looking favorable?
National contracts between Chrysler (General Motors and Ford as well) with the United Auto Workers union expires in September. The official kickoff handshake occurs in June, with negotiations in full swing throughout the summer. They will be at round-the-clock fever pitch by early September.
At the same time, DaimlerChrysler said yesterday it plans to close the sale of Chrysler with Cerberus sometime in the July-to-September quarter.
If at the point that Cerberus and DaimlerChrysler are to ink the deal union contract talks are not going smoothly and favorably, can Cerberus bail out of the deal?
(Read more...)
Posted by Michelle Krebs at 5:13 AM under Chrysler , Commentary , Personalities , Rumors | Comments (0) | digg this | del.icio.us
Chrysler-Cerberus: Winners and Losers
“Who are the winners and who are the losers with Cerberus buying Chrysler?” Business Editor Rod Meloni of Detroit’s NBC affiliate, WDIV-TV, asked me.
The biggest losers are Chrysler’s unions. The biggest winner is Daimler.
However, there are flip sides to both.
(Read more...)
Posted by Michelle Krebs at 4:38 AM under Chrysler , Commentary , In the Media | Comments (0) | digg this | del.icio.us
Chrysler Sale to Cerberus: Just What the Doctor Ordered?
The private ownership of Chrysler may be just what the doctor ordered for the American automobile industry since it will force its long overdue restructuring.
For the past couple of decades, experts have predicted a major downsizing of the U.S. auto industry because it has too much plant capacity, too many employees for its shrinking sales and market share and too high costs, notably health care, pensions and union wages.
Automakers have tried to ward off this inevitable transformation by attempting what now can be looked back upon as merely a nip and tuck here and there. But cosmetic surgery is no longer enough as a Cerberus-owned Chrysler will put increased pressure on General Motors and Ford.
(Read more...)
Posted by Michelle Krebs at 8:21 AM under Chrysler , Commentary , Ford , GM | Comments (0) | digg this | del.icio.us
U.S.-Canada Gas Prices – Call It Even
Typically, on my Michigan-to-New York drives through Canada, I top off the tank just before I cross the bridge to Ontario and immediately after hitting the New York State line to avoid the always-high price of petrol in Canada.
But, this time, it was unavoidable. I would have to fill up the gas tank in Canada.
And this week, it didn’t matter much. The skyrocketing price of gas in the U.S. has nearly caught up with that of Canada. On the day I left Michigan, gas had set a new all-time state record, averaging $3.18 a gallon, surpassing the previous all-time high of $3.12 on August 7, 2006.
Nationwide, gasoline is edging near a new record as well. This week, it is averaging $3.03 a gallon, just three cents shy of the all-time record. Experts are saying $4 a gallon is not out of the question.
OK so my arithmetic is a little loose here but so be it. My fill-up in Michigan cost about $45 (U.S.). My fill-up in Canada cost about $50 (Canadian). In another sign of the economic times, the Canadian dollar is only slightly discounted against the U.S. dollar.
So call it even.
Posted by Michelle Krebs at 5:58 AM under Commentary | Comments (0) | digg this | del.icio.us
Joint Hybrid Venture Begins To Bear Fruit
This week, General Motors allowed the first test-drives of its 2008
Chevrolet Tahoe and GMC Yukon two-mode hybrids that go on sale later this year.
That drive was significant beyond the vehicles themselves.
The SUVs are the fruits of an unprecedented venture, also involving DaimlerChrysler and BMW, to take hybrid technology to the next level. And they are only the first fruits. A host of vehicles from GM, DaimlerChrysler and BMW are scheduled to roll out over the coming years.
These kinds of ventures are required to find the technological solutions to reduce or even eliminate environmentally destructive emissions and reduce or even eliminate the world’s dependence on petroleum for fuel. And ultimately save the planet.
It's the global moon shot of our time.
Posted by Michelle Krebs at 6:51 AM under Chrysler , Commentary , Companies , GM , Toyota | Comments (1) | digg this | del.icio.us
Chinese Automakers Sharpen Export Plans at Shanghai Show
By Mark Bursa
Will history judge that the 2007 Shanghai Auto Show was the
tipping point for the Chinese car industry?
Did the vast array of new models on display signal the moment when the Chinese automakers stuck their red flag in the ground and said, "Here we are –- take us seriously"? Or were we just looking at another load of rip-off designs that won’t meet global safety or environmental standards, with silly Chinese names?
The truth is somewhere in the middle. But one thing’s for sure. The Shanghai auto show is now a premier event on the global auto industry calendar. The fact that BMW, General Motors and Audi all chose the event to unveil significant concept cars gives ample evidence that global carmakers are taking the show very seriously indeed.
(Read more...)
Posted by Michelle Krebs at 12:06 PM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
The Price of Fuel-Efficiency
Small and fuel-efficient vehicles are great for the
environment, consuming less gas and emitting fewer pollutants. And they are terrific for consumers’ wallets, socked by increasing gas prices that are threatening to surge to $4 a gallon, according to some reports.
But small, fuel-efficient and usually inexpensive vehicles aren’t so good for the bottom lines of car companies and municipalities.
Today, Honda announced an unexpected 3 percent decline in profit this year, in part, due to the global shift toward small cars that are popular but deliver lower profits.
At the same time, state highway officials, who use gasoline taxes to build and maintain roads, are sounding the alarm that not enough money is coming in for roads due to the shift to smaller, fuel-efficient cars.
(Read more...)
Posted by Michelle Krebs at 11:30 AM under Commentary , Companies , News , Technology | Comments (2) | digg this | del.icio.us
Why Chrysler Needs Its Unions on Board
"Who cares about the union?!” “Screw the union.”
I constantly get those kinds of remarks, particularly of late in regard to the sale of Chrysler -- in emails, in feedback to AutoObserver entries and by folks on the street.
Bottom line: Unions can make automakers miserable. And the proof is in this history lesson:
(Read more...)
Posted by Michelle Krebs at 7:55 AM under Chrysler , Commentary | Comments (4) | digg this | del.icio.us
So, Toyota’s No. 1. What Now GM?
We’re recovering from the shell shock of Toyota dropping
the bomb that it had surpassed GM as No. 1 in global sales in the first quarter –- news the industry had expected. It was a matter of not if but when.
“This was not an unexpected turn of events,†said Edmunds.com Senior Analyst Jesse Toprak, “but it happened a bit earlier than forecasted.â€
And, as I told NBC’s Detroit affiliate Tuesday, it’s also not the end of the world. While certainly not a positive trend -– no one likes being No. 2 when they’ve been No. 1 for more than seven decades -– GM’s dethroning could have a silver lining. The pressure is off to maintain the No. 1 sales spot, while allowing GM to focus on the more important race -– the one for profitability.
As a Detroit marketing professor told a local reporter: “[GM is] no longer the New York Yankees. They can be the pursuer rather than the pursued.â€
At the same time, Toyota will don the bull’s eye of the press and public, while it struggles to ensure quality, control costs and maintain profit margins during its rapid growth.
But what now for General Motors?
(Read more...)
Posted by Michelle Krebs at 6:17 AM under Commentary , Featured , GM , In the Media , Toyota | Comments (5) | digg this | del.icio.us
Halberstam’s "The Reckoning" Still a Must-Read
Writer and reporter David Halberstam, who died in a car crash Monday at the age of 73, is best known for his Vietnam War reporting, for which he won the Pulitzer Prize, and other best-selling books.
But in Detroit and the auto industry, he’s recognized for his groundbreaking work, The Reckoning, a study of the American and Japanese automobile industries, using Ford and Nissan as its study subjects.
Upon news of his death, I recalled running into the amiable Halberstam in the elevator of Ford’s Glass House headquarters as he was researching the book. I also recalled Halberstam being pooh-poohed in some Detroit quarters because, when his book was released in 1986, the fortunes of Ford and Nissan had reversed from their situation in Halberstam’s book. Ford was on a roll, having just introduced the trend-setting Taurus; Nissan was in a slump.
But that reversal of fortunes proved temporary. Today, Ford is in dire straits; Nissan, while stumbling a bit, has experienced a phenomenal turnaround.
(Read more...)
Posted by Michelle Krebs at 6:57 AM under Commentary , Companies , Ford , News , Personalities | Comments (2) | digg this | del.icio.us
Toyota Tops General Motors
Toyota became the world’s No. 1 car company for sales for the first three months of this year. Toyota surpassed General Motors, the world leader for 76 years, for the first time.
While the figures announced today represent only quarterly sales results, they may well foreshadow the inevitable: Toyota will become No. 1 as early as this year.
Toyota has claimed that surpassing GM is not its goal, Toyota president Katsuaki Watanabe told reporters in December. “It will only be a result of what we've been doing,'' he said.
But don’t believe for a second Toyota’s goal -- or Watanabe's goal -- isn’t to surpass GM. Toyota desperately wants to be No. 1. Watanabe -- described as sharp, very aggressive and even a bit arrogant -- wants Toyota to be No. 1. The automaker just worries about what goes along with being No. 1.
And being No. 1 is tough. Just ask GM.
(Read more...)
Posted by Michelle Krebs at 6:06 AM under Commentary , Featured , GM , News , Toyota | Comments (4) | digg this | del.icio.us
What’s Up with Cerberus?
Cerberus Capital Management, a private equity firm bidding for Chrysler, likely will withdraw its bid for bankrupt Delphi Corp. and dropped plans to buy pieces of auto supplier Collins & Aikman leading auto observers to wonder what’s up with Cerberus.
Plans of closed-mouth Cerberus have been intriguing, as it has added to its automotive portfolio and stable of high-horsepower talent. Cerberus bought a chunk of General Motors Acceptance Corp. and agreed to buy bankrupt supplier Tower Automotive for $1 billion. As it contemplated its bid for Chrysler, it added Chrysler/Volkswagen exec Wolfgang Bernhard as an advisor; its automotive unit is run by ex-Ford exec David Thursfield.
However, last Friday, Cerberus appeared to be reversing its course. Delphi said Cerberus likely would withdraw from a group of investors who had bid $3.4 billion for auto supplier because the UAW refused more concessions. Also on Friday, Cerberus canceled its tentative agreement to buy the carpeting and acoustic materials businesses of bankrupt Collins & Aikman.
The latest moves of retreating are as curious as Cerberus massive efforts to enter the auto business. Is Cerberus getting cold feet about the automotive industry? Does it think it is over-exposed in the auto segment? Did Cerberus underestimate the power and resolve (or stubbornness) of the unions? What do these latest moves mean for its Chrysler bid?
(Read more...)
Posted by Michelle Krebs at 1:50 PM under Chrysler , Commentary , News | Comments (0) | digg this | del.icio.us
With Aston Gone, Jaguar Gets Another Shot
By Mark Bursa
The sale of Aston Martin has gone a long way toward
clearing up the brand confusion within Ford’s Premier Auto Group.
About time, too. The muddled mass of British luxury nameplates, created by former Ford CEO Jac Nasser in 1999, has singularly failed to present a serious challenge to BMW, Mercedes-Benz and Audi. And it’s been a drain on Ford, largely because it includes the financial black hole that is Jaguar.
So selling Aston to a wealthy consortium headed by respected British motorsports figure David Richards is both a good deal for Ford, which gains a useful $848 million windfall, and good for Aston, which departs PAG with a stable of modern cars and the technological resources, via Richards’ Prodrive organization, to keep on growing.
And it just might turn out to be the best result for Jaguar, too, giving the brand some clear direction at last.
(Read more...)
Posted by Michelle Krebs at 4:39 AM under Commentary , Featured , Ford | Comments (2) | digg this | del.icio.us
The Meeting We Wished We'd Attended
We're not fans of meetings, but for this one, we would
have loved to have been a fly on the wall!
General Motors Vice Chairman Bob Lutz met with David Friedman, research director of the clean vehicles program for the Union of Concerned Scientists, this week to discuss fuel economy improvements.
The environmental group has been pressuring automakers for improved fuel economy and lower emissions, having recently given awards to the best performers in those categories. Honda won; not GM.
Lutz, meantime, has been arguing that an affordable technical solution for improved fuel economy doesn’t exist.
Both sides agreed to keep details of their meeting private, but it doesn’t appear either side budged an inch from their position.
(Read more...)
Posted by Michelle Krebs at 9:54 AM under Commentary , GM , Personalities , Technology | Comments (0) | digg this | del.icio.us
Toyota: Dump Waltrip
Toyota's entry into the domestically loyal NASCAR circuit has been marred, not only by the poor performance on the track but also by the bad behavior of its driver-partner, Michael Waltrip.
Waltrip's latest shenanigans involve him flipping a Toyota Land Cruiser Saturday morning near his North Carolina home. He faces charges of reckless driving and failing to report an accident when he goes to court May 14.
(Read more...)
Posted by Michelle Krebs at 7:59 AM under Commentary , Toyota | Comments (3) | digg this | del.icio.us
Loose Lips Sink Dow Execs
This one should send a message to the many companies in play or possibly in play: Don’t try to sell your company without the boss’ knowledge.
Dow Chemical Co., long rumored to be the target of buyouts by private equity firms, fired two senior executives for holding secret meetings with investments bankers and prospective investors about selling the company when the company wasn’t for sale.
The two executives, one a board member, told investors the company was in play; the company’s CEO insists it is not. The two were fired for “highly inappropriate” business activity and “unauthorized discussions” with potential buyers.
Newspapers have been reporting since February that Dow is in play. The frenzy peaked last weekend when a British newspaper reported, picked up by AutoObserver, U.S. private equity firms with Middle Eastern investors were preparing a bid of at least $50 billion for the largest U.S. chemical maker. That would make it the largest such deal in private equity history.
Dow’s stock has been on a roller coaster as a result of buyout rumors that have been reported and the company has denied them in this year of record equity buyouts throughout industry, including the auto business.
Posted by Michelle Krebs at 7:18 AM under Commentary , Companies , News | Comments (0) | digg this | del.icio.us
GM Rear-Drive Cars On Hold; Camaro Moves Ahead
General Motors Vice Chairman Bob Lutz says the automaker’s future rear-wheel-drive cars have been
put on hold until the federal government decides on fuel economy and carbon dioxide emissions standards.
"We've pushed the pause button (on future rear-drive cars). It's no longer full speed ahead," Lutz told Chicago Tribune automotive columnist Jim Mateja in an interview in Tuesday’s paper.
But that may not be the whole story behind GM’s alterations of its future product plan.
(Read more...)
Posted by Michelle Krebs at 5:21 AM under Analysis , Business , Commentary , Featured , GM , News , Rumors | Comments (3) | digg this | del.icio.us
Schwarzenegger to Michigan: “Get Off Your Butt”
“Michigan, get off your butt and join us,†California Gov. Arnold Schwarzenegger said Wednesday to a
Georgetown University audience as he made the rounds stumping for his environmental campaign.
His remark came in response to the re-election campaign efforts of Michigan Congressman Joe Knollenberg, a Republican representing Detroit’s wealthy suburbs where most auto executives live. Knollenberg has posted billboards featuring a grim-faced Schwarzenegger that reads: “Arnold to Michigan: Drop Dead!â€
Knollenberg also created a re-election campaign Web site called big3defense that takes aim at Schwarzenegger and high-profile Democrats that he accuses of trying to kill Detroit’s auto industry. The Congressman said that his campaign picked on Schwarzenegger “because he’s a perfect symbol of a bully and because he has become the Republican Al Gore.â€
Ironically, the auto industry, especially General Motors, has used Schwarzenegger to promote its vehicles, including the environmentally friendly E85 and hydrogen-powered concepts. Schwarzenegger also did a gig for GM promoting the Hummer, driving it through New York's Times Square, during a New York auto show.
(Read more...)
Posted by Michelle Krebs at 6:26 AM under Business , Commentary , News , Personalities | Comments (0) | digg this | del.icio.us
CAW Says “No” to Kerkorian’s Chrysler Bid
The $4.5 billion bid for Chrysler from Las Vegas billionaire Kirk Kerkorian and his Tracinda Corp. has been rejected by the head of the all-important Canadian Auto Workers union as well as a German analyst.
CAW President Buzz Hargrove told the press Tuesday that he opposes Kerkorian’s offer, even though it offers Chrysler’s union an equity stake in the automaker. “I am not interested in Kerkorian’s style. His whole history has been to make money by taking advantage of throwing a lot of people out of work. He’s the guy I am totally opposed to.”
Christopher Stuermer, an auto analyst with Global Insight in Frankfurt, Germany, criticized Kerkorian for his low-ball bid; the $4.5 billion bid is half of what Global Insight estimates Chrysler’s valuation of $9 billion. Stuermer added that Kerkorian “is the last person on earth” DaimlerChrysler executives want to deal with “after all the upheaval he has been causing.”
Chrysler’s unions haven’t publicly said so but word is of the offers now on the table, the deal likely to be most favored by Chrysler unions is an offer from Canadian auto supplier Magna International with private equity firm Ripplewood.
(Read more...)
Posted by Michelle Krebs at 7:33 AM under Chrysler , Commentary , News , Personalities | Comments (1) | digg this | del.icio.us
Chrysler Buyer: It’s Up to the Unions
Chrysler’s unions, in one way or another, will be the deciding factor in who ultimately buys the Chrysler Group.
It’ll come down to what deal is most palatable to them, and how well they’ll cooperate with -– or aggressively they’ll protest –- a potential buyer.
Of the offers now on the table, the deal likely to be most favored by Chrysler unions is an offer from Canadian auto supplier Magna International with private equity firm Ripplewood.
In contrast, a bid by Cerberus Capital Management ranks at the bottom with Chrysler’s unions, because the union suspects Cerberus intends to break it into pieces and strip it down to nothing more than a distribution company.
“Cerberus is a Trojan horse for Chinese automakers, and the unions know it,” said a source familiar with some of the bids.
Still, wild cards remain. The wildest card is the recent bid from Las Vegas billionaire Kirk Kerkorian and his Tracinda Corp. The innovative deal offers unions a stake in Chrysler and a future. Kerkorian claims Chrysler can be “a robust and lasting standalone entity,” and his Tracinda is in it for the long haul. Published reports put Kerkorian’s offered stake to the unions at 10 percent, but a source says Kerkorian is rumored to be willing to go as high as 20 percent.
(Read more...)
Posted by Michelle Krebs at 9:41 AM under Analysis , Business , Chrysler , Commentary , Featured , Rumors | Comments (0) | digg this | del.icio.us
Dow: Private Equity With a Middle Eastern Twist
A British newspaper reports U.S. private equity firms with Middle Eastern investors are preparing a bid of at least $50 billion for Dow Chemical Co., the largest U.S. chemical maker.
Rumors of Dow’s purchase have been swirling for the past couple months, and it was speculated its purchase would be the largest in history by private equity. Indeed, the latest rumored deal would be the largest by billions.
London’s Sunday Express, citing unidentified "sources close to the deal," say the offer for Michigan-based Dow, which supplies auto industry and other businesses, is between $52 and $58 a share and will be made by the end of this week. The speculation sent Dow stock soaring.
Kohlberg Kravis Roberts & Co. is among those backing the bid, the newspaper reported. At least half of the funding is coming from investors in Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman, the newspaper said.
(Read more...)
Posted by Michelle Krebs at 7:26 AM under Business , Commentary , News , Rumors | Comments (0) | digg this | del.icio.us
Kerkorian: Low Ball Bid, But Intriguing
The bid for Chrysler by Las Vegas billionaire Kirk Kerkorian and his Tracinda Corp. is a low-ball bid, almost assuring a bidding battle, but the offer has some other intriguing elements.
The $4.5 billion bid by Tracinda is lower than the $4.6 billion to $13 billion reportedly offered by other suitors, though those figures are uncertain since details of the other bids have not been revealed.
The Tracinda deal is for cash and is not reliant on obtaining financing. Further, the Tracinda bid includes a $100 million for exclusive negotiating rights, with $25 million of it non-refundable if Tracinda decides to walk away from the deal after its 60-day review.
The Tracinda bid suggests equity by workers in the company, likely in return for concessions by the United Automobile Workers union. While workers may not be thrilled about concessions, an equity stake and the fact that Tracinda, whose Kerkorian turns 90 in June, says it is in this deal for the long haul should be appealing to them. Tracinda says Chrysler can be “a robust and lasting standalone entity.”
(Read more...)
Posted by Michelle Krebs at 7:26 AM under Chrysler , Commentary , Personalities | Comments (0) | digg this | del.icio.us
Ford’s Mulally Stays the Course
Ford Chairman Alan Mulally capped off a week of whirlwind visits to key media outlets and dealerships,
where he played salesman, with a keynote speech opening press days at the New York auto show.
In the off-the-cuff speech and lengthy question-and-answer session as well as in his visits with the media, Mulally has revealed virtually nothing about what he plans to do to turn around the ailing automaker.
Mulally was asked point blank by Edmunds.com President Jeremy Anwyl about incessant rumors that Mark Fields, president of the Americas and devisor of the Way Forward turnaround plan, and Cisco Codina, group vice president for North American marketing, sales and service, were history.
Seemingly surprised to hear of the rumors, Mulally responded he’s standing by his men and the plan.
Mulally reinforced that message during his speech in New York. He claims no further, deeper cuts are required, as analysts and industry observers insist are needed.
Asked at the New York show about Ford’s prospects for survival, highly respected auto analyst, Joe Phillippi, of AutoTrends, in Short Hills, N.J., responded: “Dicey.â€
(Read more...)
Posted by Michelle Krebs at 5:18 AM under Commentary , Ford , Personalities , Rumors | Comments (0) | digg this | del.icio.us
Kerkorian Bids on Chrysler
We should have seen this coming, and, in fact, it was mentioned early on as a possibility. In fact, the only surprise is that it didn't happen earlier.
Las Vegas Billionaire Kirk Kerkorian, through his Tracinda investment firm, has launched a $4.5-billion bid to buy Chrysler.
"Tracinda intends to build and strengthen Chrysler as an independent entity by partnering with the United Auto Workers and senior management of Chrysler, and will offer the UAW and Chrysler management the opportunity to participate as equity partners in the transaction," Tracinda said in a press release today. "Tracinda believes by taking a long-term approach to solving Chrysler's problems, it can become a robust and lasting, stand-alone entity."
Kerkorian launched the bid via letters to DaimlerChrysler CEO Dieter Zetsche and DaimlerChrysler's board. The deal requires no financing but is subject to Tracinda reaching "an equitable arrangement with DaimlerChrysler regarding sharing of unfunded pension liabilities and healthcare costs."
The deal includes $100 million in cash up front for exclusivity. DaimlerChrysler reportedly has at least three bidders -- private equity firms Blackstone Group and Cereberus Capital Management and Canadian auto supplier Magna International likely with equity firm Ripplewood.
Kerkorian's bid should come as no surprise. He's tried this before and his name had been mentioned as a possible suitor for Chrysler. And only a week or so ago, Tracinda's No. 2 man, Jerome York, who had been Chrysler's CFO in the Lee Iacocca days, had given a speech in Michigan, saying any new owner of Chrysler would require a friendly agreement with the UAW.
(Read more...)
Posted by Michelle Krebs at 12:31 PM under Chrysler , Commentary , News , Personalities | Comments (0) | digg this | del.icio.us
Chrysler Is for Sale. Now What?
Now that it is a foregone conclusion that DaimlerChrysler has put Chrysler
Group up for sale and it quite possibly will be sold to a private equity firm, what’s next?
Everyone –- employees, suppliers and the media –- wants a definitive answer to what will happen to Chrysler once it is sold. How will the deal work? Will Chrysler still exist when all is said and done? If it does, what will it look like?
Despite relentless questioning, no one knows. Not even DaimlerChrysler insiders. The sale of Chrysler is unprecedented. There’s no blueprint for how a sale of an auto company to a private equity firm would work. In an interview with CNBC's Morning Call Wednesday, I suggested we spectators “expect the unexpected.â€
(Read more...)
Posted by Michelle Krebs at 5:05 AM under Analysis , Business , Chrysler , Commentary , Featured , In the Media , Personalities | Comments (0) | digg this | del.icio.us
Zetsche Faces the Shareholders' Music
By Joseph Szczesny
BERLIN -- For Dieter Zetsche, the stakes have never been higher.
When he steps out on to the stage at the ICC meeting hall in Berlin Wednesday, the DaimlerChrysler chief executive will face one of the supreme tests of his career. He will have to report on the company’s overall condition, and it has been hurt badly by the Chrysler Group’s losses, which are now expected to continue through 2007.
Zetsche also could face some serious questioning about the growing strain between his management team and the influential German union, IG Metall. Open labor-management conflict like the American model is frowned upon in Germany. A battle with the union could ultimately put Zetsche’s job in jeopardy under the dual system, which places labor representatives on board of supervisors like that of DaimlerChrysler.
The board of supervisors has the power to hire and fire management. Indeed, DaimlerChrysler’s board has demonstrated a willingness to fire. Revolt on the labor side of the board ultimately led to the firing of Zetsche’s protégé, Wolfgang Bernhard, in 2004.
Still, Zetsche is not expected to talk much about the terms of any potential sale of Chrysler or what it might means for the future of the company now called DaimlerChrysler. Stock markets, particularly in Germany, have already spoken in favor of the sale, boosting DaimlerChrysler shares by 25 percent since Zetsche made his now-famous announcement that all options were on the table in February.
(Read more...)
Posted by Michelle Krebs at 6:38 PM under Chrysler , Commentary , Personalities | Comments (0) | digg this | del.icio.us
Ford, Chrysler Criticize Korean Trade Agreement; GM Mum
Ford and Chrysler issued public statements denouncing a free trade agreement signed by the U.S. and Korea this week. Their objection is that the agreement doesn’t force Korea to open its restricted market.
General Motors has been mum thus far on the topic. GM has important operations in South Korea created from Daewoo that are helping buoy GM’s global sales, while Ford and Chrysler do not have anything similar. The Chevrolet AVeo comes from Korea.
Under the agreement, which must be approved by Congress, the U.S. would immediately drop a 2.5 percent tariff on small cars and auto parts. It will phase tariffs out for trucks, larger engines and tires over the next decade. In return, Korea eliminates engine taxes that penalize U.S. automakers as well as an 8 percent tariff. It agreed to create a "working group to review auto-related regulations being developed," a joint statement said.
(Read more...)
Posted by Michelle Krebs at 1:05 PM under Analysis , Business , Chrysler , Commentary , Ford , GM , News | Comments (0) | digg this | del.icio.us
Automakers Add Non-Cash Spiffs to Spur Sales
Automakers are adding spiffs other than low-interest financing and cash rebates to spur sales.
Ford announced today it will make Sirius Satellite Radio standard in some Lincoln models. Chrysler started promoting a free DVD system with the purchase of a Chrysler Town & Country or Dodge Caravan minivan. Last month, Chrysler pitched free Hemi engines on some models.
These spiffs come as March sales are being reported today and Wednesday. Edmunds.com predicts March sales will be down from year-ago levels. Edmunds.com further reported today that incentive spending edged higher last month.
Automakers are resorting to feature spiffs because financing and cash rebates may be losing their allure. In addition, automakers, especially domestic ones, are trying to boost their resale values and images. Adding content boosts resale value whereas rebates decrease it. Edmunds.com analysts estimate 80 percent of the cash rebate comes off the resale value of a one-year-old car.
Features allow automakers to focus on the vehicle and its content without screaming "distress sale." While, psychologically, the consumer loves getting something seemingly for free.
(Read more...)
Posted by Michelle Krebs at 6:20 AM under Analysis , Business , Chrysler , Commentary , Ford , Technology | Comments (0) | digg this | del.icio.us
Where Have All the Women Gone?
The drain of talent, both male but especially female, is one of the most dangerous signs of weakness
for Big Three automakers and top suppliers, says a former Ford executive and television broadcaster turned industry consultant.
Anne Doyle, president of Anne Doyle Strategies, is a leadership and communications coach appearing on the television program, AutoLine Detroit, which began airing Sunday. Hosted by John McElroy, the show’s segment features Sarah Webster of the Detroit Free Press and me as guest panelists to discuss the massive departure of women from the top ranks of the auto industry.
For few decades, women executives were on the rise. The 1990s, says Doyle, a pioneer in sports broadcasting in Detroit before she went to Ford, were the golden years for women in the auto industry. But in the last few years, an alarming number of top-level female auto executives have left the industry. Scan the list of Automotive News top 100 women in the U.S. industry, published in 2005. A number of the women have left the auto industry for extremely significant jobs in other businesses.
One of the highest profile women to leave the industry of late was Anne Stevens, one of the industry's highest ranking women. She had been Ford executive vice president and chief operating officer of the Americas, working with Ford President of the Americas Mark Fields, heading the automaker's turnaround plan. She left Ford to take a top job with Carpenter Technology Corp. in Pennsylvania late last year. And just this yesterday, Ford announced its treasurer, Ann Marie Petach, was leaving to take a newly created position with BlackRock Inc. as managing director and head of business finance.
Downsizing isn’t the only reason, says Doyle. Many women are abandoning the auto industry for a better life, both professional and personal.
(Read more...)
Posted by Michelle Krebs at 5:21 AM under Business , Commentary , Featured , Ford , In the Media | Comments (5) | digg this | del.icio.us
Toyota Enriches Tundra Incentives
Toyota has added dealer incentives on some versions of its newly launched Tundra full-size pickup truck in an effort to stir slow sales, Edmunds.com’s AutoObserver has learned. 
“Toyota apparently is coming up short on sales numbers and wants to drive volume,” said Alex Rosten, manager of pricing and market analysis for Edmunds.com’s AutoObserver. “This is not a good sign for Toyota.
Tundra incentives are: 3.9 percent to 5.9 percent financing on all models, depending on the loan term; special lease rates on all models; $1,000 trade-in assistance for early termination of leases on the previous-generation Tundra; $2,000 dealer cash incentive on Regular Cab models; $1,000 dealer cash incentive on Double Cab models. The incentives run through the end of April. Some dealers already were offering as much as a $1,500 discount on the basic Tundra work truck, which is selling particularly slowly.
(Read more...)
Posted by Michelle Krebs at 3:02 AM under Analysis , Commentary , Featured , News , Toyota | Comments (3) | digg this | del.icio.us
UAW’s Gettelfinger: A Rock and a Hard Place
Talk about being stuck between a rock and a hard place.
UAW President Ron Gettelfinger opened Tuesday’s convention of 1,500 union delegates in downtown Detroit with a fiery speech about protecting worker interests amidst pressure by Detroit automakers for concession. The convention marks the start of negotiations between the UAW and Detroit automakers for a new contract to replace the one that expires in September.
“Our union does not want to strike,†Gettelfinger told delegates, “but when employers act as if collective bargaining is a one-way street and not a two-way street, we will do what we have to do.
“Collective bargaining is not collective begging,†he added, drawing cheers from delegates. “Where we have demonstrated cooperation, it would be a grave mistake to equate our action to capitulation.â€
Despite the tough talk, Gettelfinger is a smart man. He recognizes General Motors, Ford and Chrysler are in a tough spot, having lost money as well as sales and market share to Asian automakers and are encountering soaring health care costs and unfunded pension liabilities.
(Read more...)
Posted by Michelle Krebs at 4:38 AM under Business , Chrysler , Commentary , Ford , GM , News | Comments (0) | digg this | del.icio.us
Porsche Ups its VW Stake; Piech Firmly in Control
Porsche confirmed today it has exercised an option to take an extra 3.6-percent voting stake in Volkswagen, raising its holding to 30.9 percent. That puts Ferdinand Piech firmly in control, and blocks unwanted suitors, like hedge funds and buyout firms.
German law requires Porsche make a takeover bid to other VW shareholders if it raises its stake past 30 percent. To that end, Porsche said Saturday it expected to offer 100.92 Euros per VW ordinary share plus the legal minimum for VW preference shares. By offering investors the minimum amount required, Porsche gets a great deal. It gets a huge discount on Friday’s closing price of 117.70 Euros and crosses the 30-percent milestone cheap and cannot be forced to launch a bid again.
In a statement issued over the weekend, Porsche said it was “firmly convinced that a closer bond with VW through an increase of the stake to more than 30 percent of the Volkswagen ordinary shares will produce benefits for both partners without diluting or indeed endangering the identity of Porsche." A Porsche spokesman insisted the company does not want to own a majority of VW.
The announcement caps months of speculation that a bid was imminent, driving VW stock up by more than a third this year to record highs. It also cements Ferdinand Piech’s control over VW as well as Porsche, in which he owns a principal stake.
Now the question is what will Piech’s control mean. Can he and the lieutenants, led by former Porsche CEO Wendelin Wiedeking who now heads VW, make VW as profitable as Porsche. Can he turn around the VW brand and make the necessary cuts? Will he make costly mistakes like he did in his previous tenure at VW with such things as the purchase of Lamborghini and Bugatti and the development of the VW Phaeton luxury car.
Posted by Michelle Krebs at 8:53 AM under Commentary , Companies | Comments (0) | digg this | del.icio.us
Heard on My Street: GM Crossover, Super Duty Buzz
My Sunday afternoon nap was interrupted by a neighbor pounding on my door. She was desperate to get
a closer look at the test model GMC Acadia parked in my driveway. It was exactly like the one she had spec'd out on the Internet, right down to its candy-apple red paint.
The Acadia is the second member of a family of new crossovers, featuring three rows of seats, from General Motors. Saturn was first with the Outlook. Buick’s Enclave comes on stream soon.
I’m betting the Acadia, generating some buzz already, will be the sleeper of the trio -– from the sleeper GM division. GMC has been a roaring but completely overlooked success story for the past decade. Last year, GMC and Saturn were the only two domestic brands to show year-over-year sales increases.
(Read more...)
Posted by Michelle Krebs at 6:11 AM under Commentary , Ford , GM | Comments (0) | digg this | del.icio.us
Nissan: Down but a Long Way From Out
By Peter Nunn
Suddenly, the world is jumping on Carlos Ghosn and Nissan, and with reason. The six-year bull-run engineered by the iconoclastic business champion has now hit some unexpected bumps in the road.
Profits are down, sales are down. Nissan's management is reshuffling. And analysts and editors are asking tough questions of a CEO who has known almost nothing but success since he famously brought Nissan back from its near-death experience in 1999, earning huge plaudits from around the world in the process. It's a rare rebuke for "Le Ice Breaker."
How has this Nissan fall-off happened and, more to the point, been allowed to happen? The intensity of global competition, price wars and surging raw material costs aside, you could say a lot of it has to do with product, or the lack of it.
(Read more...)
Posted by Michelle Krebs at 4:37 AM under Commentary , Companies , Featured | Comments (0) | digg this | del.icio.us
GM Trims Lucerne, DTS Production
Buick General Manager Steve Shannon told the Automotive Press Association this week that 2007 was Buick’s breakout year and boasted about the 96,000 Lucernes the General Motors division sold last year.
However, sales of the Lucerne –- along with the Cadillac DTS (formerly known as DeVille) -– have slowed to the point that GM is trimming production. The Detroit Hamtramck plant that produces the two cars will shut down next week in an effort to keep inventories from bloating due to slower sales of the cars.
Insiders worry about the long-term prospects for the Detroit plant, because of the slow sales of the vehicles it produces and no future plan outlined for the plant by GM management.
(Read more...)
Posted by Michelle Krebs at 6:04 AM under Commentary , GM , News | Comments (0) | digg this | del.icio.us
GM's Wagoner: Building a Deeper Bench
Little should be read into Monday’s announcement of
management changes at General Motors. The moves are merely tweaking the new global management structure and taking into account a retirement. We can expect more tweaking and more retirements in the future.
GM announced Monday that Bo Andersson and Jim Queen were promoted to GM group vice presidents, effective April 1. Andersson will continue to lead the Global Purchasing and Supply Chain organization. Queen will remain the leader for Global Engineering. Those moves are part of GM’s efforts to create a global product development structure.
GM also announced Tom Gottschalk, the Law and Public Policy chief and a key adviser to CEO Rick Wagoner, will retire April 1. He is being replaced by a pair of executives who will split the job.
Gottschalk is 64. His retirement was first announced in June, but the company didn't assign a departure date at the time.
By all accounts, it’s hard to say no to Rick Wagoner. He has asked top lieutenants to stay on past retirement age and lured others out of retirement as the former Duke University basketball player builds a deeper management bench.
(Read more...)
Posted by Michelle Krebs at 5:59 AM under Analysis , Commentary , GM , News , Personalities | Comments (0) | digg this | del.icio.us
VW/Porsche: What’s Next as Piech Holds All the Cards?
By Mark Bursa
If there were a king of German automaking, Dr. Ferdinand
Piech has crowned himself as such.
After much legal wrangling, Piech now essentially has control of Volkswagen as well as Porsche. He is also trying to create Europe’s biggest truckmaker by merging MAN and Scania.
At 69, Piech appears to be writing a legacy to rival that of his grandfather, Dr. Ferdinand Porsche, the man who created VW and Porsche in the first place.
But, now that Piech controls both, what’s in store for mass-market VW and highly profitable niche Porsche?
(Read more...)
Posted by Michelle Krebs at 5:03 AM under Analysis , Commentary , Companies , Featured , Personalities | Comments (1) | digg this | del.icio.us
Nissan Shuffle Begins
The Nissan management shuffle, predicted by
AutoObserver, has begun, as the automaker is about to announce its first annual profit decline in seven years due to its struggling domestic and North American markets.
Nissan-Renault Chief Executive Carlos Ghosn, who has declared Nissan in a “performance crisis,†will give up his duties of overseeing Nissan in North and South America April 1. He will focus instead on heading Nissan and Renault, which is also struggling. Ghosn will assume control of the company’s treasury department as well; the company has no chief financial officer.
“The priority for our new management team is to act decisively on the multiple challenges facing Nissan and to boost our overall performance in 2007,†Ghosn said in a statement. Next month, Ghosn is expected to unveil efforts to help Nissan meet its targets under its three-year plan.
But one wonders if the move is really designed to distance Ghosn, credited with saving Nissan from bankruptcy to making it one of the world’s most profitable carmakers in just a few years, from the disaster and putting in place someone else to be accountable.
(Read more...)
Posted by Michelle Krebs at 5:33 AM under Commentary , Featured , News | Comments (0) | digg this | del.icio.us
Is a U.S. Gas Tax Gaining Traction?
Pulitzer Prize-winning columnist Tom Friedman proposed a gasoline tax in a recent New York Times column. A few days later, a panel of economists surveyed by The Wall Street Journal said a gas tax is the best way the government can encourage development of alternative fuels. Now auto executives are hinting at it as well.
While they haven’t been screaming it from the mountain tops, some auto executives have quietly endorsed a higher gas tax, like in Europe, to encourage car buyers to purchase smaller, more fuel-efficient vehicles or alternative-fuel vehicles.
Posted by Michelle Krebs at 6:04 AM under Business , Commentary | Comments (3) | digg this | del.icio.us
Fuel Economy, Emissions: New Approach Needed
“We need a new approach.”
That’s what U.S. Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, told reporters after yesterday’s hearings on stricter fuel economy standards, which included top executives from the Big Three and Toyota as well as UAW leadership.
Amen.
(Read more...)
Posted by Michelle Krebs at 5:46 AM under Chrysler , Commentary , News , Technology | Comments (0) | digg this | del.icio.us
GM: Promises Kept; Promises To Keep
General Motors’ string of encouraging news continued this morning as the automaker reported 2006 financial results that showed significant improvement.
Beating back rumors of imminent bankruptcy only a year ago, GM announced today it earned $950 million for the fourth quarter of 2006, only its second quarterly profit in the past two years. For all of 2006, GM still lost money, but significantly less than last year -- $2 billion compared with $10.4 billion in 2005.
The quarterly profit signals GM’s turnaround plan is beginning to work. Indeed, GM has delivered on its promises and is beginning to see the payoffs.
But there’s more work to be done. GM needs a favorable contract with the UAW. It has to lure still-wary car buyers to its brands. And it absolutely must introduce a production version of a break-through environmental vehicle like the Chevrolet Volt concept.
GM has many more promises to keep and miles to go before it sleeps.
(Read more...)
Posted by Michelle Krebs at 4:28 AM under Analysis , Business , Commentary , Featured , GM | Comments (2) | 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 Michelle Krebs at 5:55 AM under Chrysler , Commentary , Featured , GM , Rumors | Comments (2) | 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 Michelle Krebs 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 Michelle Krebs at 6:04 AM under Commentary , Ford | Comments (1) | 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 Michelle Krebs at 2:26 PM under Analysis , Chrysler , Commentary , GM | Comments (2) | 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 Michelle Krebs at 5:37 AM under Analysis , Commentary , Companies , News , Rumors | Comments (5) | 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 Michelle Krebs at 12:28 PM under Commentary , Companies | Comments (1) | 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 Michelle Krebs at 5:57 AM under Analysis , Commentary | Comments (6) | digg this | del.icio.us
Detroit Auto Show: Carlos Ghosn predicts a grim year ahead
Nissan-Renault chief executive officer Carlos Ghosn predicts a grim year for automakers this year.
Ghosn told a group of reporters at the Detroit auto show that he predicts sales will drop to 16 million vehicles in 2007, from this year's 16.56 million, a number that was lower than Nissan had forecasted.
Worse, Ghosn said all automakers will be in their third year of rising commodity prices, which must be absorbed by automakers and can't be recovered by increasing the price of vehicles. Further, it isn't merely a U.S. phenomenon; Ghosn expects sales to be lower and pressures to heighten in all of the developed markets of the world, which account for about two-thirds of all vehicle sales.
"That's going to have serious consequences for all automakers," Ghosn said. Such pressure will cause company failures and force more consolidation in the auto industry.
Of course, Ghosn projects Nissan will fare better than others.
—Michelle Krebs
Posted by Michelle Krebs at 6:36 AM under Business , Commentary , Companies | Comments (0) | digg this | del.icio.us
