In a signal not only that jobs in the current economy are precious but that auto manufacturing jobs apparently still carry weight, in the first week after announcing it was accepting applications for hourly workers at its restarted assembly plant in Blue Springs, Toyota Motor Manufacturing Mississippi Inc. has been inundated with about 9,500 applications for the approximately 1,350 hourly jobs at the site.
Construction of the Blue Springs plant, started in 2007 but suspended in 2008 when the economy soured, recently was restarted in order to build the Corolla compact car starting next year.
The plant originally was earmarked to be the first-ever U.S. source for Toyota's Prius hybrid-electric vehicle, but after shaky Prius sales during the recession and Toyota's decision to shutter the plant in Fremont, CA, that recently built the Corolla and Matrix, the company announced in June a plan to finish the TMMM plant and build the Corolla there.
The Jackson Clarion-Ledger reports starting pay will be in the $15- to $20-per-hour range, with applications in the first week coming from 33 states, including Michigan and California. About 8,000 of the total applications came from Mississippi and there will be about 150 salaried jobs at the Blue Springs plant.
The 2011 Chevrolet Cruze, which goes on sale next week, will feature a Smartphone application through General Motors' OnStar that allows the owner to check the fuel gauge, lock and unlock the car, set off the horn and lights alarm and perform onboard diagnostics, such as checking tire pressure, by remote.
The Chevy Connect feature will be available at the end of September, company executives told reporters during a test drive of their new compact car in Birmingham, Mich., today.
Company executives also reported that they had received word from the U.S. Environmental Protection Agency within the past 24 hours that the Chevrolet Cruze Eco version, equipped with an automatic transmission, would achieve highway mileage of the targeted 36 mpg. The Cruze Eco with a manual transmission has not been certified yet by the EPA but is targeted to achieve 40 mpg.
The Cruze Eco models go into production in December and goes on sale after the first of the year.
Kia Motors America today announced it will begin production of the Hyundai Santa Fe crossover at the Kia Motors Manufacturing Georgia assembly plant in West Point, Georgia, beginning in late September.
It had long been speculated the Kia plant might initiate production of Hyundai vehicles; Hyundai Motor Co. owns 36 percent of Kia and the two closely affiliated companies share many components, parts and associated suppliers.
The new Kia plant, which produces the Sorento crossover, will start full production of the Hyundai Santa Fe on October 1, according to a company release, adding a second shift to the plant that has capacity of 300,000 units. The KMMG site - Kia Motors Corp.'s first in North America - came on stream with Sorento production last November, and through July the company sold 59,024 Sorentos in the U.S.
The U.S. Environmental Protection Agency and the U.S. Department of Transportation today jointly announced the agencies will adopt a new window sticker for all new vehicles that more effectively conveys information about fuel-efficiency and emissions.
The EPA added a new twist by saying it is actively soliciting public comment about two proposed new window-sticker designs shown at the Web site.
Assistant administrator Gina McCarthy told reporters today that although the final design may not be precisely like the two presented today, the EPA is trying to gauge public reaction to the broad differences between the two proposed new fuel-economy stickers that will be seen on new vehicles starting with the 2012 model year.
he future for the species known as the midsize pickup is getting darker with the news this week that the Volkswagen Group isn't interesting in entering the market and Ford Motor Co. seemingly is unmoved by recent overtures asking the company to reconsider the scheduled closure of its Ranger assembly plant in Minnesota.
Edmunds.com's Inside Line reported yesterday that VW officials closed the door on longstanding speculation the company was eying the U.S. market for introduction of the Amorak, a midsize pickup that essentially could be seen as VW's interpretation of the Ford Explorer Sport Trac. In Brazil, one of the prime markets for the Amorak, media relations manager Gilberto dos Santos told Inside Line, "Volkswagen is not planning currently to market the Amarok in the U.S.
"It is destined for South America, Europe, Russia, Australia, South Africa and New Zealand," The VW public-relations official continued. "Capacity of the General Pacheco manufacturing plant in Argentina is 100,000 units yearly, and the planned demand will be fully met. Other markets such as the U.S. and Asia are not in the company's plans."
Proving true to its word of being more responsive to consumer concerns while at the same time likely still smarting from the biggest recall-related fine ever paid by an automaker, Toyota Motor Corp. today announced it will recall more than 1 million Corolla and Matrix models to replace a potentially faulty electronic circuit board.
Toyota's move comes after the National Highway Traffic Safety Administration said it was broadening its own scrutiny of consumer complaints about the cars' proclivity to stall or run rough and fail to start. In all, about 1.13 million Corolla and Matrix vehicles from the 2005 to 2008 model years will be recalled to replace engine control modules that might develop cracks at solder points or varistor, which protects against voltage surges.
The recall also encompasses about 161,000 Pontiac Vibes, which use the same engine and other mechanicals. The Pontiac brand was discontinued by General Motors Co. last year.
Toyota Motor Corp. is looking to boost 2015 global fleetwide fuel efficiency by 25 percent from 2005 levels by broadening sales of hybrid-electric vehicles and introducing battery-electric vehicle (BEV) and plug-in hybrid-electric vehicles (PHEV), as the world's largest automaker outlined its fifth so-called "Environmental Action Plan" earlier today.
Toyota will debut its first PHEV by 2012, with a first-year sales goal of more than 10,000 units, while introducing a BEV specifically for city use that same year, the company said. Toyota, whose Prius is the world's best-selling HEV, looks to boost annual hybrid sales to 1 million units while reaching cumulative sales of 5 million units sometime in the early part of this decade.
The automaker outlined this and more as part of its Environmental Action Plan for the five years starting in 2011. Toyota said earlier this month that it's cumulatively sold more than 1 million hybrid vehicles in Japan and about 2.7 million globally. Toyota sold 80,141 Priuses in the U.S. during the first seven months of the year, up 7 percent from the same period in 2009.
The revelation in today's reporting from USA Today isn't that fraud is being investigated in last summer's controversial Cash-For-Clunkers stimulus program. The real surprise is that there might be so little of it.
The paper reports that as much as $94 million in Cash-For-Clunkers claims submitted by auto dealers may be invalid due to improper documentation. But that's a miniscule portion of the $3 billion the Car Allowance Rebate System paid some 678,000 people to purchase a new vehicle during July and August last year.
The National Highway Traffic Safety Administration said there is no evidence of systemic fraud now that the government has reached the enforcement phase of the CARS program, but nine dealers have paid a total of $71,000 in fines for various misdeeds.
Vice President Joe Biden this week visited the Chrysler Group LLC assembly plant in Toledo, OH, that builds Jeeps.
While at Toledo North, Biden unsurprisingly touted the impact of government bailouts in saving jobs in America and stated one impressive figure, even if it almost certainly comes with caveats: Biden said the domestic content of vehicles sold in the U.S. is up from 60 percent in 2009 to 78 percent so far this year.
In a dual-pronged initiative, the Vice President's chief economic advisor, Jared Bernstein, took to the Huffington Post to lay out some numbers about the impact of the recession - and the still-emerging recovery - on the auto industry.
Bernstein wrote that in the year before President Barack Obama and Vice President Biden took office, the U.S. auto industry lost 431,300 jobs. He added that in the 13 months since Chrysler and General Motors Co. emerged from bankruptcy, the industry has added about 76,300 jobs. And of that number, more than half, 40,000, he attributed to suppliers.
And perhaps unwittingly summarizing the long malaise of the auto industry, Bernstein says the 40,000 jobs added in the auto-supplier sector was the best year-over-year jobs increase suppliers have recorded in a decade.
Bill Visnic is senior editor for Edmunds.com's AutoObserver
Photo of Vice President Joe Biden at Middle Class Task Force meeting in Philadelphia courtesy of the White House.
General Motors Co.'s Chevrolet Volt extended-range electric vehicle and Nissan Motor Co. Ltd.'s Leaf battery-electric car both are scheduled to launch in December and there's been plenty of debate about whether the two will compete for buyers.
Many analysts don't believe so, largely because the two cars essentially are different animals: the Leaf has a maximum driving range of about 100 miles, after which its lithium-ion battery pack must be recharged. The Volt's all-electric driving range is approximately 40 miles - but after that, an onboard gasoline engine kicks in to generate electricity for the batteries and extend driving range to 300 miles or more.
Chevrolet has said the Volt's layout is the more appealing and makes the Volt a more viable "only car" because it does not have the limitation of battery-only range. And a new study by the Consumer Electronics Association may give foundation to GM's side of the argument.
Although U.S. auto sales started August at a robust pace, a diving U.S. stock market, a big drop in home sales, continuing discussion of deflation afflicting the U.S. and a surging value of the Japanese yen all are contributing to broad economic discomfort that could begin to impact the auto industry's wobbly recovery.
The exchange rate between Japan's yen and the dollar fell through a 15-year low on Tuesday, with the yen at 84.13 to the dollar, as Japan's leadership searches for options short of outright currency manipulation. Japanese automakers already are feeling the pinch and a sustained period with the yen at this strength level surely will begin to affect strategies for exporting of vehicles to the U.S. market, likely tightening supplies and reducing inventories.
The president of the Tokyo Stock Exchange told reporters on Tuesday Japan's government needs to intercede to address worries about the growing strength of the yen.
Bending under the sustained pressure of a years-long deflationary economic environment, the current situation in Japan may be a cautionary one for those not convinced the potential onset of deflation should be a concern for the United States.
The New York Times reports today that anxiety is mounting in Japan for action after recent economic measures showed the nation's economy, long the world's second-largest, has been surpassed by China. Meanwhile, for this export-dependent nation, the burgeoning value of the yen (now at around 85 to the dollar) has combined with a new dip in the Nikkei stock index - to its lowest this year - to hike concern that Japan's economy can't break free of its deflationary downspin.
Economists and policy experts in the U.S. aren't in a panic about deflation, but some now are wondering if Japan's near decade of deflation-fighting doesn't now warrant closer examination for lessons American policy-makers might take to heart.
"Japan's experience shows that deflation can creep up on an economy -- and can be extremely difficult to shake," the NYT article said.
General Motors Co., seemingly anxious to nurture its rebound in the U.S. market and in the eyes of still-cautious consumers, announced today it has hired Chris Perry to be vice-president of marketing for the Chevrolet brand.
Perry, was vice president of marketing for Hyundai Motor America and will report to U.S. vice president of marketing Joel Ewanick, who before joining GM earlier this year also was a fixture of surging Hyundai's marketing operations, serving in the same role Perry now vacates to join GM.
On the way out after a brief stint as Chevrolet's head marketer is Jim Campbell, who will become vice-president of marketing for GM's Performance Vehicles and Motorsports unit.
General Motors has filed the documents for its highly anticipated Initial Public Offering of stock that would reduce the U.S. government's stake in the automaker.
The filing of more than 700 pages with the Securities and Exchange Commision (SEC) on Wednesday reveals few details about the offering itself. It does not say when the shares will go on sale, though it is believed it will be November or December. It does not provide a price range for the common and preferred shares, the number of shares in the offering nor the dollar value of the proceeds from the sale. GM said those will be determined by market conditions at the time of the sale, which also was not revealed.
It is believed the offering could be the nation's second-largest IPO in history. It is speculated it could raise as much as $16 billion; only Visa's IPO of $19.7 billion was larger.
The U.S. Treasury will sell some of its shares, the filing said. The amount the government will sell was not stated, but it is believed the government's stake would fall to under 50 percent of all GM stock. The U.S. government gained its majority stake in GM by providing $50 billion in taxpayer money to get the automaker out of bankruptcy last summer.
Despite the lowered stake, the government would still effectively control GM as any shareholed with that large of a position would.
In another step in the consolidation of the Chinese auto industry, Beijing Automotive Industry Holding Co. (BAIC) will take over smaller rival Guangzhou Baolong and invest $736 million to expand its current southern China plant and add a new one.
BAIC, one of China's largest automakers, is a company on the move. BAIC had made a bid to invest in Swedish auto company Saab, when General Motors put it on the market. That attempt failed. However, in December, BAIC did acquire the intellectual property rights and tooling for Saab's 9-3 and previous generation 9-5 to build them in China; production is set for 2011.
Part of the business plan of some small American electric-vehicle makers involves selling zero-emissions-vehicle credits to larger manufacturers.
These credits stem from a vote by California's Air Resources Board (CARB) in 2008 requiring Honda, Toyota, General Motors Co., Ford Motor Co. and Nissan Motor Co. to sell a total of more than 60,000 plug-in hybrid and battery-only models in the state over a three-year period, with fines and possible restrictions accruing for those that don't comply.
Tuesday, Coda Automotive agreed to sell ZEV credits to an unidentified automaker, as the Santa Monica, Calif.-based maker of all-electric cars looks to raise cash while preparing to start selling its first vehicle later this year.
Gasoline prices are staying low and consumers aren't exactly flocking to hybrids and other fuel-saving small cars.
That might be part of the reason sales for Ford Motor Co.'s much-anticipated Fiesta subcompact haven't exactly gone orbital; for July, the Fiesta's first full month on the market, sales were 3,349.
Ford knew the Fiesta will have to overcome Americans' historic aversion to small cars. It's been tried by many makers many times before. But the job is all the more difficult when Ford's own much-larger and still reasonably economical Fusion midsizer - a car two classes above the Fiesta - in on sale in the same showroom for similar, or even less money.
A recent dealer ad showed a well-equipped Fiesta selling for $200 more than a Fusion after stacking up all the possible incentives on the larger car. Even if a buyer didn't qualify for all the Fusion come-ons, the quandary still is obvious.
With General Motors Co. expected to announce at any moment it has filed the paperwork for an initial public offering of stock and the company's return to public ownership, a well-detailed picture is emerging of how Wall Street's banks and financiers scrambled for a piece of the action.
Most tellingly, coverage by Reuters this week shows it wasn't about the handsome fees banks typically earn to underwrite an IPO - instead, the jostling to be a part of the GM deal is the promise of lucrative future business from the resurgent automaker. Not to mention the possibility of creating a more-cozy relationship with government sources involved with other large-scale financial dealings.
In fact, as was reported earlier this year, the two financial institutions chosen to lead the underwriting of the IPO, Morgan Stanley and JPMorgan, were willing to accept a fee of far less than the industry norm. The lead underwriters will make a 0.75-percent underwriting fee instead of the 2 percent or more that is common. There will be other lead underwriters, Reuters reports, but even with the IPO filing imminent, it seems the final list of lead underwriters was not final.
General Motors Co. chairman and CEO Ed Whitacre announced today he will give up his title of CEO on Sept. 1 and will leave the company at the end of the year.
Taking over to lead GM is Daniel F. Akerson, currently a member of the GM board of directors and managing director and head of global buyout at the Carlyle Group. Akerson has been a member of the GM board since July, 2009, when asked to take the position by the Obama administration's Automotive Task Force that helped to oversee GM's restructuring and bankruptcy proceedings.
Akerson, 61 years old, is a trained engineer, earning a B.S. in engineering from the U.S. Naval Academy, but has spent the bulk of his professional career in the communications and financial sectors. Prior to joining the Carlyle Group, Akerson served in various executive leadership positions at MCI Communications Corp.
General Motors, which emerged from Chapter 11 bankrupty a year ago, earned $1.3 billion in the second quarter as it prepares to launch its initial public offering, documents for which could be filed with regulators within the next few days, if not today.
"I am pleased with our progress on achieving our business objectives," said Chris Liddell, vice chairman and chief financial officer in the company's statement, which said nothing about the timing of the IPO that would result in a return to public from largely government ownership.
"We have delivered strong product, maintained cost discipline, progressed strategic initiatives such as restructuring Europe and acquiring AmeriCredit, and delivered two consecutive quarters of profitability and positive cash flow," he added.
In another development that partially exonerates Toyota Motor Corp. in reported incidents of unintended acceleration, the results of an early study of data from onboard data recorders shows that in the majority of cases, the driver was not applying the brakes while the vehicle purportedly was accelerating of its own accord.
The findings, reached in the initial phase of a study conducted by the National Highway Traffic Safety Administration, showed that in 58 accidents attributed to unintended acceleration, in more than half, 35, the brakes were not applied.
The finding lends more credence to the widely believed explanation that many drivers were mistakenly pressing the accelerator pedal when they were convinced their vehicle was accelerating of its own accord.
The safety agency researchers said in reporting the findings that they had discovered no evidence of electrical malfunctions, including in the electronically controlled throttle, that could be possible causes for unintended acceleration.
At the peak of the recent furor surrounding Toyota and a rash of complaints regarding unintended acceleration, a Toyota recall of millions of accelerator-pedal assemblies that had the potential for the pedal to stick in a full-open or partially-open position led some to believe the pedal and/or electronic throttle system could be causing the problem.
General Motors moved a step closer to its highly-anticipated initial public stock offering today by filing with federal regulators its rules covering board and shareholder meetings.
The filing comes on the eve of GM reporting second-quarter earnings, expected by Wall Street analysts to be its best results in six years.
GM, which refuses any comment on the filings, is rumored to be filing a preliminary prospectus with the Securities and Exchange Commission as early as Friday, according to CNBC. SEC approval is required before GM can make its pitch to potential investors.
GM CEO Ed Whitacre, in a speech given last week at an auto industry event, that the automaker was in a hurry to get the government out of its business. "We don't like this label of 'Government Motors," he said.
Former Ford Vice Chairman Allan Gilmour has been named interim president of Wayne State University in Detroit.
Gilmour did two stints in leadership positions at Ford. He retired as vice chairman after 35 years in 1995. In 2002, he was asked to return to the company as vice chairman, retiring again in 2005.
A graduate of Harvard University and the University of Michigan, Gilmour will serve as interim president of the university of 32,000 students until a permanent president is chosen from a national search.
Jerry Flint, a journalist who covered Detroit and its auto industry for 52 years for Forbes, The New York Times, the Wall Street Journal and trade journal Ward's, died Aug. 7 of a stroke at the age of 79.
Flint bluntly called it like he saw it. The way he saw it usually was right but often wasn't what automakers wanted to hear. Still, they generally couldn't argue with him because he could reel numbers off the top of his head to prove his point in a way they could not.
With a long-discussed initial public offering looming, General Motors Co. chairman and CEO Ed Whitacre reiterated several times in an appearance at an industry conference today that GM is aching to shed the derisive "Government Motors" moniker, while at the same time saying the company is thriving.
"We don't like this label of 'Government Motors," Whitacre groused as a wrapup to the Center for Automotive Research's Management Briefing Seminars in Traverse City, Mich., today.
"It turns off customers," Whitacre said. "It turns us off. People at GM are embarrassed by that."
General Motors Co. is studying several possible additions to its vehicle lineup, including a new midsize pickup, a stretched version of its European minivan, a Cadillac flagship and a diesel engine for cars, Bloomberg News reports. A new Chevrolet Corvette is already in the works.
GM CEO Ed Whitacre has told his staff to explore adding new models to its future portfolio, according to unnamed sources cited by Bloomberg. Among vehicles he wants them to consider are: small, youth-oriented cars for Chevrolet, a large prestige sedan for Cadillac, a minivan and a midsize pickup.
Not all of the vehicles under consideration are guaranteed for production. GM did not confirm the report.
However, Whitacre did confirm a new Chevrolet Corvette is under development.
Hyundai's rolling like the proverbial snowball down the slope - it set an all-time U.S. sales record last month - and nobody's talking about slowing down.
At an industry conference this week, Hyundai Motor America president and CEO John Krafcik laid out the next two years worth of product rollouts for the hottest car company on the planet and it looks like somebody should start designing Hyundai-badged wheelbarrows to haul all the cash to the bank
.On the table for this year, Hyundai's already launched the markedly superior second-generation Tucson. Then we're getting the 2.0 Turbo and Hybrid versions of the 2011 Sonata midsize sedan, a car Krafcik said Hyundai cannot make fast enough at Hyundai's new-ish plant in Montgomery, Ala.
There are 40 million Toyota-made vehicles on the road using electronically controlled throttles and despite the efforts of a horde of independent testers and a virtual army of the company's own engineers, nobody's been able to find anything wrong with the technology typically pointed to as the "likely" cause for unintended acceleration, said Steve St. Angelo, the American executive leading Toyota's new North American Quality Task Force.
Speaking at the Center for Automotive Research's Management Briefing Seminars today in Traverse City, MI, St. Angelo, vice president of Toyota Engineering and Manufacturing North America Inc. and chief quality officer for the Quality Task Force, said everyone from a newly constituted Quality Advisory Panel seeded by high-profile names to individual assembly-line workers is engaged in the company's effort to assure a higher level of quality - and reassure Toyota's customers, who after Toyota's highly publicized quality and safety-related recalls apparently have been availing themselves of other options.
BMW's 2011 X3 crossover is being built in America for the first time, and that's a distinct news advantage for customers here.
First, BMW is encouraging interested buyers to special-order their X3 to get it exactly the way they want. That's the way it works in Europe, but Americans historically have not liked to wait for a special-order car. Now that X3s are being built in BMW's newly-expanded Spartanburg, SC, assembly plant, the company says the special-order delivery times can be drastically cut - to a point that can satisfy even impatient Americans.
Admitting "we don't specifically know how to get there," Hyundai Motor America president and CEO John Krafcik announced today that Hyundai plans to achieve a fleet-wide Corporate Average Fuel Economy of "at least" 50 miles per gallon by 2025.
Krafcik says it's not just a technical goal or to satisfy regulatory demands - he said Hyundai views fuel-economy leadership as a competitive advantage in the current and future marketplace.
At an important auto-industry conference today, Ford Motor Co. is saying what the nation's leaders seemingly can't bring themselves to utter, much less do something about: the U.S. needs to get back to manufacturing things.
Ford President of the Americas Mark Fields not only said it, he also pledged Ford is going to do something about it, announcing at the Center for Automotive Research Management Briefing Seminars that Ford is going to bring even more jobs in house than it had previously promised in a 2007 bargaining agreement with the United Auto Workers union.
"No economy anywhere in the world - since the industrial revolution - has been strong without a strong manufacturing base," said Fields, who also invoked a familiar quote from Ford founder Henry Ford: "A business that makes nothing but money is a poor business."
"He was right," said Fields. "And we'd better listen."
The refrain is growing: the new age of electrified vehicles is a good thing, but the chicken-or-egg investment in charging infrastructure everyone assumed would be necessary before people would buy them? Not necessary after all.
At the Center for Automotive Research Management Briefing Seminars in Traverse City, Mich., today, several panelists in a session titled "Full-scale Deployment: Making the Business Case," reiterated what is becoming the new conventional thinking about infrastructure: don't really need it.
"Very little charging is needed in the public sector," said American Honda's Robert Bienenfeld.
At an auto-industry conference Tuesday, Toyota's engineer in charge of the company's plug-in hybrid program said plug-in versions of the Prius hybrid-electric vehicle should deliver significant fuel economy gains - even for those who travel further every day than the 13 miles of all-electric driving available from the car's lithium-ion batteries.
At the Center for Automotive Research Management Briefing Seminars in Michigan, Justin Ward, Toyota Motor Engineering and Manufacturing North America Inc.'s advanced powertrain program manager said Toyota's first plug-in hybrid - just now starting with a 150-vehicle test fleet in the U.S. - will deliver significant fuel economy gains over the 51 miles per gallon rating of today's non-plug-in Prius.
Ward said that official U.S. fuel-economy figures haven't been finalized, but testing in Europe has proven the plug-in car to be about 42 percent better than the Prius.
Edmunds.com CEO Jeremy Anwyl and Edmunds.com analysts Karl Brauer, Jessica Caldwell and Michelle Krebs discuss July car sales, which were not as robust as predicted, considering the attractive deals available. Disappointing July sales foreshadow a continued rocky ride ahead for car sales in the remaining months of 2010.
The BMW Group reported its largest quarterly profit in 2 1/2 years due to rigorous demand for its new 5 Series and increased overall sales in the United States and China.
The automaker had second-quarter net income of $1.1 billion, an increase almost seven times higher than a year ago. Revenue rose almost 18 percent.
BMW sold 25,000 of the new 5 Series since the sedan went on sale in Europe in March. The automaker reported today that in the U.S., where the car just went on sale, it sold 2,724, a 10-percent increase from a year ago. The new 5 Series earned a top safety rating in government testing, the first BMW to do so since the new standards went into effect. AutoObserver's sister site Inside Line features a video showing the crash test.
General Motors, Ford and Volkswagen reported higher sales in July as both manufacturers said they are seeing consumers cautiously coming back into dealer showrooms.
GM sales were just shy of 200,000 vehicles -- 199,692 to be exact -- for a 5-percent increase from a year ago. GM noted, however, combined sales for the four brands that the automaker will move into the future with -- Buick, Cadillac, Chevrolet and GMC -- were up 25 percent over a year ago. Buick and Cadillac brands each sold more than twice as many vehicles in July compared with a year ago, GM said.
Ford sales rose 5 percent as well to 166,092 Ford, Lincoln, Mercury and Volvo vehicles sold.
Volkswagen sales rose 16 percent in July from a year ago -- its best month since December 2005, excluding last summer's Cash for Clunkers period.
Edmunds.com forecasts that when industry sales are tallied at the end of today the Seasonally Adjusted Annualized Rate will hit 11.8 million vehicles, the highest level since last summer.
General Motors Co.'s Chevrolet Volt may be able to travel 40 miles on its battery charge, but early adopters might be in for a bigger jolt when they try to avail themselves of the highly attractive lease GM touted when releasing the Volt's $41,000 base price this week - it appears at least one of the 600 Chevrolet dealers due to take part in the initial rollout in December isn't planning on letting any Volts pass through his doors until buyers pony up a rather substantial extra "charge."
Forgetting the electricity-related wordplay, it's what people in the auto business know better as a "gouge." A giant one.
A couple of Edmunds.com researchers thought GM's announced $350 per month (with $2,500 down) lease payment sounded "too good to pass up." One emailed a California dealer to lease a Volt. You know, sign on the dotted line right now.
After a deep drop in June, the Conference Board, which tracks consumer confidence trends, said July will follow with another decline in consumer confidence.
The trendline is beginning to worry economy watchers, but the automotive sector seems to be staying free of the fallout - at least for now. The Conference Board reported that although the number of consumers with plans to buy a home dropped from 2 percent in June to 1.9 percent in July, those with plans to buy a new vehicle improved to 4.5 percent from June's 4.1 percent.
General Motors finally announced the exact price of its upcoming 2011 Chevrolet Volt extended range plug-in hybrid: prices start at $41,000 and climb to $44,600 before tax incentives.
The price is higher than many industry observers anticipated; many thought it would come in below $40,000 -- about $35,000 with tax incentives. It also is priced higher than the all-electric Nissan Leaf that starts at $32,780, with the upgraded model adding about $1,000.
Even before the gas-price shock of summer 2008 and the recession that started a few months later, the world already was passing by Ford Motor Co.'s Explorer, the SUV that in the mid-'90s defined what SUVs were all about.
But the Explorer name has an incredible 96-percent recognition rate with North American consumers, said Ford president of the Americas Mark Fields and Ford aims to leverage that with a "redefined" '11 Explorer that's tuned in to a more-sensible national esthetic.
At a media event last week to unveil the all-new Explorer -- it makes its public debut Monday -- Ford confirmed what has been an open secret about the two fundamental and somewhat risky changes that will redefine the Explorer formula: the vehicle now is based on a unibody structure and will offer - advocate, actually - 4-cylinder power.
It's not like you'll have to mark your calendar or anything, because you'll probably be visiting one anyway, but you may want to be extra certain to avail yourself of some kind of drive-thru service this Saturday, July 24: it's National Drive-Thru Day.
We hope you share our cautionary twinge about paying homage to what has to be a key pathogen in America's obesity epidemic, but the restaurant industry (at least that's who we think came up with the idea) figures it can't hurt and Hallmark probably is hot on the trail, too.
We'd be better human beings without them, but the drive-thru has exponentially surpassed its equally Americana-ish but less prolific cousin, the drive-in theater, with a staying power that makes it as much a part of daily life as television or the Internet.
This story has all the makings of a Robert Ludlum spy novel.
On Thursday, the U.S. government arrested a Troy, Mich., couple on charges of conspiring to steal General Motors' hybrid technology secrets and attempting to sell them to Chinese automaker Chery, a GM competitor in China. Chery has told wire services it had no knowledge of the case.
Ford reported a second-quarter profit of $2.6 billion -- its best performance since the first quarter of 2004. Ford said the quarter, with results higher than analysts had estimated, sets the stage for an even better 2011 as each business unit, including North American automotive operations, showied a significant improvement.
"We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions," said Ford President and CEO Alan Mulally in a statement issued Friday morning.
"We remain on track to deliver solid profits and positive automotive operating-related cash flow for 2010, and we expect even better financial results in 2011," he added. Ford said by the end of 2011, it expects to have more cash than debt. Ford's huge debtload has been seen as its major challenge for the future.
Unleaded gasoline: $2.67 per gallon. Extra cost to cut fuel consumption with hybrid technology: priceless.
For Ford Motor Co.'s Lincoln upscale division, however, the definition of "priceless" means "no cost." Lincoln announced today that the price of its 2011 MKZ Hybrid is the same as a standard MKZ with a conventional V6: $35,180.
Pricing the hybrid MKZ identically to the standard version is a significant and potentially game-changing ploy that may put Lincoln on the map with hybrid enthusiasts and surely will cause competing automakers' marketers to watch customer response. And Lincoln's gambit also will test - for good and bad - the limits of hybrid-technology upcharge.
General Motors Co.'s plan to purchase Fort Worth, TX-based auto-financing company AmeriCredit Corp. is firing speculation about GM's judgment in purchasing a finance operation that focuses on lending to those with less-than-perfect credit, but the numbers show GM's decision to hold little actual risk.
Although AmeriCredit's focus is on financing auto buyers with below-prime credit, financing buyers in that segment - and those with even lower credit scores - does not necessarily bring outsized risk. According to data from credit-information company Experian Automotive, the industry repossession rate was well less than 1 percent in the first quarter this year. And in the month of April, just 1.9 percent of all auto loans were in default.
General Motors announced Thursday morning that it has signed an agreement to acquire AmeriCredit, one of the nation's leading independent auto finance companies, for $3.5 billion. The purchase will help GM obtain automotive financing for its vehicles, particularly for subprime and lease customers.
Easier customer access to financing will help drive GM vehicle sales, said GM Vice President Steve Girsky in a conference call with media and analysts Thursday morning. AmeriCredit becomes GM's captive financing arm, a function had been filled by GMAC before GM sold its controlling interest in the finance company in 2006. Girsky said Ally Financial, the new name for GMAC, still will provide financing for prime customers, the bulk of GM's business.
However, Girsky added that GM "has no intention of getting back to a full-blown captive finance arm."
Microsoft founder and chairman Bill Gates and Sun Microsystems' co-founder Vinod Khosla have invested $23.5 million in Michigan-based EcoMotors International for further development of its OPOC engine.
The two-year-old start-up, headquartered in the Detroit suburb of Troy, Mich., is working on the OPOC (Opposed Piston Opposed Cylinder) engine that runs on unleaded gasoline and diesel fuel and boasts up to 50 percent more efficiency than a conventional combustion engine.
General Motors Co. has been anxious to sell off its widespread but cumbersome Nexteer steering-systems business ever since it emerged from bankruptcy and reacquired the operations from Delphi Inc. when that formerly colossal supplier itself exited bankruptcy late last year.
General Motors announced today it has a buyer for Nexteer in the form of Pacific Century Motors, a company formed by China's Tempo Group. Tempo is described as "an affiliate of the Beijing Municipal Government," a financing and investing unit for that entity. Neither GM or the Tempo Group detailed terms for Nexteer, which has 22 manufacturing operations and six engineering facilities around the globe.
Delphi, formed in 1999 when GM spun off many of its parts-making operations, had difficulty operating the steering-components businesses profitably under United Auto Worker wage structures and after reacquiring the operations when Delphi exited bankruptcy, GM also quickly began maneuvering for wage concessions even as it sought a buyer for the supplier that develops and manufactures electric and hydraulic power steering systems, steering columns and axles.
China's Zhejiang Geely Holding Group, whose deal to purchase Volvo Cars from Ford Motor Co. was approved by European Union regulators this week, also took another big step toward becoming a major player on the world stage - by stealing away a high-level executive from the Volkswagen Group.
Stefan Jacoby's abrupt, unexplained departure as head of VW's U.S. operations is all the more remarkable due to the fact that he accomplished a makeover for VW in relatively short order.
With the talented Jacoby now gone to run Volvo, VW must quickly find a replacement who can hold U.S. operations on course toward its goal of becoming a mainstream, rather than a niche, seller of cars.
Ford reported sales in June were up 13 percent from a year ago as its much ballyhooed Ford Fiesta went on sale.
Ford sold 175,895 Ford, Lincoln, Mercury and Volvo brand vehicles in June. Ford recently announced it will discontinue Mercury by year-end. It is in the process of selling Volvo to China's Geely.
Ford sold just over 1,000 Ford Fiestas, which went on sale in June backed by a hefty advertising campaign.
Chrysler reported sales were up 35 percent from last June, when the automaker had just emerged from Chapter 11 bankruptcy.
The automaker, which many thought would not be around at this point, pointed out it was its third consecutive year-over-year sales increase.
June marked the launch of Chrysler's first major new product since its bankruptcy -- the 2011 Jeep Grand Cherokee. Grand Cherokee sales in June were down 20 percent from a year ago ast the new model is just ramping up and national advertising only recently broke.
General Motors reported Thursday that its June sales were 11 percent higher than a year ago, and sales of its four core brands were up 36 percent.
Edmunds.com forecasts June will be up from the year-ago June but, more importantly, weaker than May. June's Seasonally Adjusted Annualized Rate (SAAR) of sales is expected to come in at about 11.2 million vehicles, down from 11.6 million in May. June sales likely will total about 992,500 vehicles, a nearly 17-percent increase from June 2009 but a 9.5 percent decrease from May, Edmunds.com predicts.
GM, the first automaker to report June sales on Thursday, said it sold 195,380 vehicles, up 10.7 percent from the 176,571 it sold last June when the automaker was in Chapter 11 bankruptcy. GM also forecasts an 11.2-million SAAR for June.
One of the few definitive results of the unintended acceleration crisis earlier this year that had Toyota Motor Corp.'s top executives testifying in the nation's capital was a mandate from Congress for the National Highway Traffic Safety Administration to form an independent scientific panel to study the unintended acceleration phenomenon.
In Washington Wednesday, that panel - the National Academy of Sciences' Committee on Electronic Vehicle Controls and Unintended Acceleration - is having its first meeting to tell the public how that's going.
In a lengthy conference designed to update the investment community about its present and near-term business performance, General Motors Co. executives in charge of each of the company's major global regions Tuesday presented an optimistic tone about the "new" GM's operations - as well as its potential to flourish once again as a publicly-held company.
GM held the conference largely to impress upon the investment community the potential for the company to hold a successful initial public offering. It is widely believed GM would like it to happen before the end of this year. An IPO would return GM to public ownership and begin to unwind the company from its current government and autoworker-union ownership that has earned it the derogatory nickname "Government Motors."
Chairman and CEO Ed Whitacre told financial analysts assembled at the company's technical center in Warren, Mich., that the new GM is nothing like the former company that declared bankruptcy last year, saying the old GM was "constrained in attitude as much as action," and became a company too focused on its internal operations and that would "overthink even the smallest decisions."
Tesla Motors Founder and CEO Elon Musk, surrounded by Tesla colleagues, friends and family, presided over ceremonial opening bell as the stock of the California-based electric car company began trading on the NASDAQ exchange Tuesday.
The news of Tesla's listing flashed across the screen at New York City's Times Square, where the company showed off its electric-powered Tesla Roadster and Roadster Model S.
Tesla stock opened at $17 a share, more than the $14 to $16 a share range that had been expected, in a stock market that nosedived on concerns about consumer confidence in the U.S. and global economic issues.
Trading under the ticker symbol TSLA, Tesla is the first automotive company to go public in more than 50 years. The last public offering of a car company's stock was Ford's in 1956.
When he retired May 1 from General Motors Corp. as vice chairman and product-development Svengali, Bob Lutz was fairly vague about future plans.
Yes, it was barely a fortnight before Lutz joined the board of Transonic Combustion Inc., a startup developing supercritical fluid technology to improve the fuel efficiency of combustion engines while also potentially enabling the wider adoption of biofuels. That sort of board-joining stuff is expected of retiring auto execs (even though Lutz told some reporters, "No boards," after he retired).
But reports from Detroit this week have Lutz charting a new course: political kingpin. Sort of.
The Detroit News reports Lutz has joined the gubernatorial campaign of Mike Bouchard, currently the sheriff of the region's Oakland County. The Bouchard camp confirmed Lutz has agreed to be an honorary campaign co-chairman.
For sheriff Bouchard's run in the widely contested Michigan governor's race, Lutz may have to call on a heaping helping of his legendary turnaround prowess: the paper reports early polls showing Bouchard trailing at least two other candidates. The front-runner, U.S. Rep. Pete Hoekstra, is leading other Republican hopefuls with 21 percent of the likely vote, while Bouchard is polling around 10 percent. - Bill Visnic, senior editor
In a telling reversal of longstanding trends and perceptions, domestic automakers' brands, as a whole, have pulled ahead in overall quality as measured by J.D. Power and Associates' benchmark Initial Quality Study, now in its 24th year. It's the first time domestic brands have, in the aggregate, surpassed imports in initial quality, Power said today. The domestics brands' watershed performance in the 2010 U.S. Initial Quality Study was driven by quality improvements by new models from the surging Ford Motor Co. and the industry's trend in improving the general quality of newly launched vehicles.
True, the domestic triumph was not overwhelming: domestic brands experienced 108 problems per 100 vehicles compared with the 109 problems per 100 vehicles for imports. But the symbolic impact remains - domestics, overall, have better quality than imports.
"Domestic automakers have made impressive strides in steadily improving vehicle quality, particularly since 2007," said David Sargent, vice president of global vehicle research, in a release. "This year may mark a key turning point for U.S. brands as they continue to fight the battle against lingering negative perceptions of their quality."
In Detroit today, the embattled and whittled-down United Auto Workers union elected Bob King as the union's new president. King's election was expected but didn't come without a fight.
King is 63 years old and trained both as an electrician and a lawyer. He's carried a UAW membership card for 40 years and was the union's vice president for two terms, but his election nonetheless was opposed by dissident candidate Gary Walkowicz from the UAW's Ford Dearborn, MI, local, who, along with many of his union, took issue with King's position last year that the UAW needed to make deeper concessions in a reconstituted contract with Ford, including a no-strike clause.
King's restructuring of the Ford contract - proposed to bring the Ford-UAW labor agreement more in line with concessions extended to the bankrupt General Motors Co. and Chrysler Group LLC - was soundly rejected.
The "old" pre-bankruptcy Chrysler Corp., now known as Old Carco LLC, got $45.5 million to sell one of its soon to be permanently shuttered factories in Ohio to a company that hoped to resell the plant to a new user or multiple users, but the Associated Press reports the effort was unable to attract any new operations for the plant.
Old Carco sold the metal-stamping plant in Twinsburg, Ohio, to Maynards Industries Ltd. of Vancouver, BC, Canada, but the AP said the liquidation company has been unable to attract new businesses to the site and that it will auction the plant's equipment and other assets after it closes, as scheduled, at the end of the month.
The Twinsburg stamping plant has gone from employment of about 1,000 to less than 300, and all will be laid off except for 77 workers who will stay until the end of July. Like the "old" General Motors Co., which also stayed behind after GM went through a quick bankruptcy last summer, the former Chrysler has sold or is attempting to sell many former assembly plants or other smaller manufacturing operations the new, pared-down Chrysler no longer needs. The proceeds are to be allocated to creditors of the former Chrysler.
Edmunds.com, parent of AutoObserver, today named vehicles in 21 distinct segments the leaders in its proprietary True Cost to Own (TCO) metric that establishes total vehicle ownership costs.
Vehicles by Japanese automakers dominate the 2010 TCO list, placing 14 of the 21 winners. Domestic automakers placed four models and European makers had three winners.
Six of the winners are made by Honda Motor Co. Ltd., the most by any manufacturer.
Edmunds.com's TCO pricing system estimates total vehicle ownership costs over a five-year period. The calculation incorporates projected average depreciation, financing, taxes, fees, insurance premiums, fuel costs, regional variances, maintenance and repairs for each model.
General Motors Co. may be owned mostly by the government, but that isn't stopping the company from acting like venture capitalists: GM announced today it is creating a new subsidiary to "help the company identify and develop innovative technologies in the automotive/transportation sector."
General Motors Ventures LLC will be headed by former GM global vice president of product planning Jon J. Lauckner, who will report to vice chairman of corporate strategy and new business development, Stephen J. Girsky.
The company said the new subsidiary has been funded with a cool $100 million to get started and "is currently exploring equity investments in a number of auto-related technologies and business models."
Peter Arnell is joining De Tomaso Automobili SpA as a board member and chief innovation and design officer, AutoObserver.com has learned.
Former chief innovation officer for Chrysler under the previous regime, the New York-based branding and design guru now is responsible for the development, definition and oversight worldwide of all De Tomaso design, products, brand, marketing, communication and merchandising.
"With this new appointment De Tomaso continues to grow and strengthen its organization," the company said. De Tomaso "will count on [Arnell's] many years' experience as one of the most famous international design, brand and marketing gurus."
Ford Motor Co. confirmed today it will eliminate its Mercury sales division. The decision came after an extensive business and product review Ford conducts every spring and was approved by Ford's board of directors at its regularly scheduled June meeting today.
The decision comes as the Ford brand has strengthened and the automaker instead looks to accelerate the Lincoln brand. Ford will take Mercury personnel and resources and focus them entirely on Lincoln, which will get new products -- seven all new or significantly freshened vehicles in the next four years.
The shutdown of Mercury apparently will happen quickly, as Ford officials say the last Mercury vehicles will be produced in the fourth quarter this year.
General Motors, the first automaker to report May sales Wednesday, posted a nearly 17-percent increase in sales from a year ago as Edmunds.com predicts the industry's selling rate will come in at 11.4 million vehicles.
In total, GM sold 223,822 vehicles, up 16.6 percent from year-ago May sales. All but about 1,500 of those sales came from the GM's remaining four brands -- Chevrolet, Buick, GMC and Cadillac.
Those four brands combined had a sales rise of 32 percent from last May.
After 71 years of history, Ford Motor Co. may finally be cutting loose its dimming Mercury sales division, reports Bloomberg today.
Citing sources familiar with an executive proposal to be presented to Ford's board of directors in July, Bloomberg said the plan outlines the shutdown of Mercury, whose showrooms soon will be down to two models - yet recently was publicly supported by Ford CEO Alan Mulally while Ford also discussed future-product options for the brand created by founder Henry Ford's son Edsel in 1939.
At the Washington auto show in January, Mulally seemingly supported the ongoing future of Mercury, saying Ford planners and marketers were working to better position Mercury in the Ford-Lincoln-Mercury triumvirate by using the division to emphasize smaller, fuel-efficient models. Some reports speculated a cornerstone of the strategy would be a Mercury-badged variant of the widely anticipated 2012 Focus compact car coming early next year.
After a report from Japanese publication Best Car said Toyota Motor Corp. is delaying the launch of its FT-86 sport coupe by two years, to 2013, the internet was alive with speculation about Toyota's ultimate dedication to the coupe jointly developed with Fuji Heavy Industries Ltd.'s Subaru.
First reports of the project emerged in 2008 and at last October's Tokyo motor show, Toyota let loose with a concept car to confirm the program indeed was underway.
But all along the way, there have been reports of various delays, conflicting development goals and other hiccups, including speculation about Toyota's acceptance of the Subaru-derived drivetrain - and even whether the car would be rear-wheel drive, one of the most attractive promised attributes.
General Motors announced Monday that Susan Docherty has been appointed GM vice president, International Operational Sales, Marketing and Aftersales, effective June 1.
Docherty had been left with no job at GM after the automaker announced a couple weeks ago that Joel Ewanick, formerly of Hyundai and Nissan, would head marketing for GM North America.
"Growth in China and other emerging markets is important to the company's future," said GM Chairman and CEO, Ed Whitacre. "We are counting on Susan to make a significant contribution and I am glad to have her running this critical part of our business
It's not just Toyota Motor Corp. falling under the newly-watchful eye of the National Highway Traffic Safety Administration and its vehicle-recall powers: Ford Motor Co. and General Motors Co. each have a vehicle under the NHTSA microscope this week.
The NHTSA opened a formal investigation into 900,000 1999-2003 Ford Windstar minivans for the potential for the rear axle beam to corrode and potentially break. The administration's Office of Defects Investigation launched a formal inquiry this week after noting on its website that it had received 234 complaints about the condition and had begun a preliminary evaluation "to assess the scope, frequency and safety consequences of the alleged defect in the subject vehicles."
At GM, the vaunted Chevrolet Corvette is also the subject of a NHTSA investigation after 30 consumer complaints about fuel or fuel vapor leaking from the car's gas tank. The investigation covers about 33,000 2004-model vehicles.
The average new-vehicle incentive is down about $200 so far this month, according to data from Edmunds.com, and perhaps resultantly, industry sales - so far - are down from April's pace. But evidence suggests buyers may be hanging back and waiting for Memorial Day deals.
May's Seasonally Adjusted Annual Rate so far is tracking below that of April's 11.2-million SAAR, but sales over the Memorial Day holiday weekend could close the gap.
"Given the bargain-hunting behavior we've witnessed throughout the recession, I'm guessing that demand is building for anticipated Memorial Day sales events," said Edmunds.com CEO Jeremy Anwyl.
Striving to return to a solid financial footing after emerging from Chapter 11 bankruptcy last summer, General Motors Co. reported today its first quarterly profit in three years - and what may be the start of a sustainable turnaround for the former No. 1 automaker that spent years of serially racking up debt.
GM made $853 million in the first quarter this year, a substantial reversal compared with the nearly $6-billion loss for the same period in 2009 when the former GM struggled to stay afloat prior to declaring bankruptcy in June. For the quarter, GM's net revenue was $31.5 billion, a bulging 40-percent gain over the first quarter of 2009.
The company's first-quarter operating income was $1.2 billion, compared with a $5.9-billion loss in the January-to-March period last year. GM also said it produced nearly $1 billion in free cash flow during the quarter.
GM and the investment community believe it is crucial to demonstrate a pattern of profitability and healthy operating parameters if the company is to issue a public share offering and unshackle itself from its current government ownership.
It's a proposal that's been around almost since the U.S. brand of automotive mass-retailing was formed sometime after World War II: ordering a new vehicle built to specification rather than searching for it somewhere in the makers' vast inventory of already-built new cars.
The demand four years of war bottled up then uncorked led to Americans' immense need to have a new car and have it right now. No ordering the vehicle the way you want it, but waiting for weeks or even months for delivery, a system Europeans accepted after the war.
Build-to-order efforts have never gone far in the U.S., but BMW of North America LLC is going to give it a new whirl starting in the spring when the new, second-generation X3 crossover is launched.
For the first time, the X3 will be built in BMW's assembly plant in Spartanburg, SC - and a sweeping $750-million investment in highly flexible tooling and assembly processes has BMW thinking a two-week wait for an X3 built exactly to a customer's specification is a compelling proposal that could begin to shift American buyers' legendary aversion to waiting.
A survey conducted for NBC News and the Wall Street Journal appears to indicate attitudes about General Motors Co. are improving.
The survey asked 1,000 adults their position on politicians and a range of political topics such as health care and immigration, as well as the general direction of the country, with one question being their attitude about GM.
When asked to rate their attitude about GM on a 5-response scale ranging from "very positive" to "very negative," survey respondents indicate a better feeling about GM in the nearly one year that has elapsed since GM's federal bailout and emergence from Chapter 11 bankruptcy.
In June of last year, 23 percent of respondents said they were "very negative" about GM. The number dipped to just 10 percent when the question was posed to one-half of the respondents this month.
The number of respondents who said they were "very positive" about GM climbed from 6 percent in June, 2009, to 11 percent this May. And GM even converted some to at least become neutral: In December, 2008, 23 percent of respondents indicated a "neutral" attitude about GM. The number rose to 30 percent in June, 2009 and stood at 31 percent this month.
Grappling with the lingering effects of the global economic downturn, Italian exotic-car maker Ferrari S.p.A., part of the Fiat Group, said it will have to curtail engine production for Fiat's Maserati brand and is seeking job reductions that have raised the ire of the company's labor union.
Fiat makes V8s for the Maserati Quattroporte and GranTurismo models at a plant in Maranello, Italy, but says reduced sales are forcing it to idle the plant for a week and lay off some 600 workers, Bloomberg reports. And workers yesterday walked off their jobs in protest for a scheme Ferrari proposes to cut 150 factory workers and another 150 office jobs in return for the last payment on bonuses agreed to for 2009.
In all, Ferrari employs approximately 3,000.
Ferrari made about 4,500 engines for Maserati in 2009 - but that number was half of the engines supplied to Maserati in 2008, when the global financial crisis hit in the late part of the year.
Toyota intends to ease off the gas on incentives by fall or at least by the end of the year, a top company executive said Tuesday.
Takahiko Ijichi, Toyota Motor Corp. senior managing director, acknowledged Toyota's unprecedented incentives were instituted in the automaker's effort to boost sales in the U.S., where sales had been hurt by recalls, stop-sales orders on popular models and ensuing negative publicity.
"We so not expect to continue this level of incentives," he told analysts and media during a conference call on Toyota earnings Monday. "By fall or the end of this year, we're planning to get incentive levels to historical levels."
U.S. Transportation Secretary Ray LaHood said Monday that Toyota could face more fines in the States over its handling of vehicle recalls for potential sudden acceleration.
LaHood briefed reporters in Japan Monday after spending several hours with Toyota President Akio Toyoda at the company headquarters and touring its facilities. He said the U.S. government has several pending investigation into Toyota recalls and is reviewing 500,000 pages of documents. The investigations could result in more fines in the coming months. Toyota also faces hundreds of lawsuits.
Toyoda told reports that the automaker is cooperating fully with NHTSA "in working toward a common goal of creating a safe automobile society."
General Motors swept aside marketing chief Susan Docherty to make way for the arrival of Joel Ewanick, the marketing whiz who helped Hyundai soar to new heights.
It had been speculated that Docherty was not long for GM's important top marketing job at this crucial stage when GM absolutely must move the metal in order to make money and get the government out of its business. Docherty had been in charge of both sales and marketing, but the sales job was dropped from her duties in a recent reorganization.
Ewanick's appointment, however, is a stunner. Nissan had just stolen Ewanick away from Hyundai in March, but obviously his feet had barely touched ground on Nissan soil -- if at all -- when GM made its move.
General Motors, the first automaker to report April sales on Monday, said its April sales were 6 percent higher in April from April 2009, but that is well below the increase expected for the industry in total.
Edmunds.com forecasts the industry will post roughly a 20-percent increase in April from a year ago.
GM noted retail sales of its four remaining core brands - Buick, Cadillac, Chevrolet and GMC - were up 20 percent form a year ago.
The well-watched unfolding of Lexus' safety recall of the 2010 GX 460 SUV comes to something of a close with parent Toyota Motor Sales USA announcing Thursday dealers have in hand a software reprogramming package for the GX 460's stability control system.
Toyota also recalled about 50,000 2003-model Sequoia SUVs for a stability-control reprogramming because the system may cut in too early and unnecessarily curtail acceleration.
The issue of the 2010 GX 460's extreme-maneuver handling was called into question when Consumer's Union, parent of Consumer Reports, issued a derogatory "do not buy" recommendation after GX 460s it tested slewed sideways in an extreme-handling test, a situation that a properly functioning tability-control system should have mitigated.
It couldn't have been a much better first-quarter result for Ford Motor Co.: earnings of $2.1 billion that doubled the consensus forecast. A healthy profit on automaking operations and a healthy profit in North America. A rather remarkable rebound of more than a quarter-million more sales compared with first-quarter 2009.
The company's reward for all this solid work: a smackdown from Wall Street.
Ford stock was down nearly 10 percent today at its lowest point and hovered around a still-hefty 5-percent decline into the afternoon, finishing down a full 6 percent. This, admittedly, in a broad market that saw the Dow Jones Industrial Average finish almost 2 percent down and all other indices slide markedly.
Joe Phillippi, principal of AutoTrends consulting in Short Hills, New Jersey, attributed the market's reaction to Ford's exceptional first quarter to two factors: investor mentality and worries about Ford's ability to continue the pace of its rebound.
Ford Motor Co. reported a $2.1-billion net profit for the first quarter of 2010, the best quarter for the automaker in six years. Its results were roughly double what analysts had forecasted and represented a $3.5-billion improvement from 2009's first-quarter loss.
As a result, Ford said based on the quarter's performance, it expects to deliver "solid profits" for the full year of 2010, a year ahead of schedule.
"The Ford team around the world achieved another very solid quarter, and we are delivering profitable growth," Ford President and CEO Alan Mulally said in a statement issued Tuesday morning. Mulally holds a conference call with media and analysts later in the day.
"Our plan is working," he added, "and the basic engine that drives our business results -- products, market share, revenue and cost structure -- is performing stronger each quarter, even as the economy and vehicle demand remain relatively soft."
General Motors confirmed Wednesday it has paid back in full the $8.4 billion in loans from the U.S. and Canadian governments..
GM Chairman and CEO Ed Whitacre also announced the automaker will invest $257 million in the next-generation Chevrolet Malibu.
Whitacre made both announcements at GM's plant in Fairfax, Kansas, which will be the primary source of future Malibu models. The plant will receive $136 million of the total Malibu investment to prepare for the next-generation Malibu. The plant already builds the Malibu as well as the Buick LaCrosse.
Toyota Motor Corp.'s reputation may have taken a whack in recent months, but those troubles apparently are nothing a good deal couldn't make buyers forget.
According to data released today by Edmunds.com, parent of AutoObserver, a remarkable 71 percent of all Toyotas sold last month were financed through a 0-percent loans. Battling the tide of negative publicity surrounding a string of recalls related to unintended acceleration, Toyota in March took the uncommon step of offering 0-percent loans for as much as 60 months on even its most popular models - including, at least in some markets, the Prius hybrid-electric vehicle.
As Toyota's unintended-acceleration controversy abated, the company ratcheted back on its heaviest incentives, but its March blow-out led the entire industry to its biggest 0-percent financing penetration rate since Edmunds.com began compiling the data six years ago.
Reports late Sunday from Washington, D.C. and written by the Los Angeles Times said Toyota Motor Corp. agreed to pay a record $16.4-million fine dealt the company by the National Highway Traffic Safety Administration for delaying a recall of potentially sticking throttle pedals in 2.3 million vehicles in the U.S.
It is the largest fine ever levied against an automaker for a recall-related matter and brings a certain closure - although probably far from a finish - to an uncharacteristically flawed chapter in Toyota's corporate history.
Returning to its roots as a conference for auto engineers to exchange ideas and present technical papers to interested colleagues (and competitors), the 2010 Society of Automotive Engineers World Congress in Detroit this week is noticeably downsized.
The SAE is actively moving the conference away from being dominated by both the flashy displays of deep-pocket suppliers and other exhibitors and by vendor sales booths hawking all manner of down-and-dirty components.
Tech-hungry customers in India reportedly are paying almost as much for the new Apple iPad as it costs to buy a brand-new Nano car produced in that country, said a report from Bloomberg this week.
The iPad has emerged as the industry's must-have consumer-electronic device and although official sales have yet to begin in India, iPads imported through gray-market channels are fetching 100,000 rupees, the equivalent of about $2,250.
Tata Motors' Nano went on sale in India in July last year starting at $2,500 -- or just $250 more than Indian buyers are paying for those gray-market iPads. In the U.S., the least-expensive iPad starts at $499.
Don't look now, but the U.S. auto market is changing - sort of just like we'd been told it would.
Call it environmental awareness, call it regulatory pressure, call it old-fashioned economics. But by and large, call it inevitable: that most American of inventions - the V8 - is quickly being supplanted by smaller, more peppery engines as the auto industry marches to the latest beat of "downsizing."
Ford announced today that it will produce three new engines using its Ecoboost concept of combining direct fuel injection with turbocharging and variable camshaft timing to boost the specific output of smaller-displacement engines. Ecoboost engines will be deployed for two vehicles that long represented the heart of the V8 market: the F-150 pickup and the 2011 Explorer.
Ford may be among the companies to drive the first back-to-back quarterly profit gains among U.S. companies since 2007, reports Bloomberg News.
Earnings for Standard & Poor's 500 Index, which includes Ford, probably rose 30 percent in the three months through March after more than doubling in last year's final quarter, according to analysts' estimates compiled by Bloomberg.
Analysts' estimates put Ford's first-quarter profit at 30 cents per share after a year-earlier loss of about 75 cents a share. Ford, which has not given a date for announcing first-quarter results, said in January that market-share gains and better pricing for its cars will help the bottom line and should help produce a full- year profit.
In a conference call with analysts and reporters today, Toyota Motor Corp. President Akio Toyoda spoke of the company's new and ongoing initiatives to repair its battered image and improve vehicle quality, but did not speak of the $16.4-million fine the National Highway Traffic Safety Administration handed the company last week for being slow to report knowledge of sticky accelerator pedals in many Toyota vehicles.
The call was billed as one to deal largely with financial matters, but Toyota's boss and other executives also didn't mention a report from Japan on Tuesday saying the company plans to cut its dividend for the 2009 fiscal year that ended March 31. A later story said Toyota had not decided on the matter.
Fiscal year 2008 was the first time in company history the dividend was reduced, a humbling event for Toyota after losing nearly $5 billion.
General Motors, in issuing its first financial report since emerging from Chapter 11 bankruptcy last summer, revealed that it lost $4.3 billion in late 2009.
GM came out of bankruptcy on July 10, 2009. Between then and December 31, 2009, GM lost $4.3 billion, had revenues of $57.5 billion and generated $1 billion in cash on operating activities.
"Despite these results, GM has a chance of achieving profitability this year, at least on an operating basis," said Chris Liddell, GM's new vice chairman and CFO in a conference call with analysts and media Wednesday morning. Liddell recently joined GM from Microsoft.
The ailing Smart brand will be one of the biggest and earliest beneficiaries of the sweeping alliance announced Wednesday between its parent Daimler and Renault-Nissan.
Under the arrangement, Renault and Daimler will jointly develop the next generation of Smart Fortwo models and the Renault Twingo. The two model lines will share architecture and parts and begin launching in 2013.
The Smart product range will be expanded beyond the current two-seater ForTwo to include four-seaters and electric versions.
Daimler, Nissan and Renault confirmed Wednesday a wide-ranging partnership that includes equity stakes in each other, joint development of vehicles -- from small cars to light commercial vehicles and possibly luxury cars -- and technology sharing on batteries, electric cars and powertrains for small to luxury autos.
The partnership is the latest step in the consolidation of global automakers forced by the roller-coaster economy and waning corporate profits at a time when automakers must invest substantially in low-margin small cars and expensive technologies to meet more stringent emission and fuel economy standards.
In the past year, Fiat acquired a stake in Chrysler and Volkswagen in Suzuki to achieve similar economies of scale, particularly for small cars - and as a way to take on global volume leader Toyota.
Daimler CEO Dieter Zetsche and Nissan-Renault CEO Carlos Ghosn made the announcement jointly in Brussels Wednesday, after which they held a conference call with American media.
"The name of the game is to be present everywhere so we are going to move for more and more consolidation," Ghon told reporters.
Ford Motor Co. received the first annual Edmunds.com Marketing Breakthrough Award, which was presented at the New York International Auto Show.
"Ford's image has improved by leaps and bounds in the past year because the company has supported good new products with deft marketing," said Edmunds.com CEO Jeremy Anwyl.
U.S. Transportation Secretary Ray LaHood Tuesday announced two major investigations to answer questions surrounding the issue of unintended vehicle acceleration.
The prestigious National Academy of Sciences - an independent body using top scientific experts - will examine the broad subject of unintended acceleration and electronic vehicle controls across the entire automotive industry.
Separately, the National Highway Traffic Safety Administration, part of the the Department of Transportation, has enlisted NASA scientists with expertise in areas such as computer controlled electronic systems, electromagnetic interference and software integrity to help tackle the issue of unintended vehicle acceleration in Toyotas.
"We are determined to get to the bottom of unintended acceleration," said LaHood. "For the safety of the American driving public, we must do everything possible to understand what is happening. And that is why we are tapping the best minds around."
Ford CEO Alan Mulally was among the new names added to Barron'slist of the 30 most respected chief executive officers worldwide for 2009.
The editors of the business publication said of the list featured in the March 29 issue that they selected CEOs who went on the offensive and scored big while competitors hunkered down during the recession.
"We sought to identify executives who kept their companies out of trouble and took advantage of the downturn to expand, make shrewd acquisitions, feast on the problems of competitors or otherwise distance themselves from rivals," the editors of the business publication said about the list featured in the March 29 issue.
Late Sunday, China's Zhejiang Geely Holding Group Company Limited completed an agreement with Ford Motor Co. to buy Ford's Volvo Car Corp. unit and its related assets.
The deal, under negotiation for more than a year, was said to be on the verge of collapse in recent weeks. But Ford confirmed the agreement on Sunday, saying the deal for Geely to buy Volvo will close sometime in the third quarter.
Geely paid $1.8 billion for the storied Swedish automaker that made safety innovations a brand watchword. Ford said $200 million will be paid in the form of a note and the remainder in cash.
Hefty incentives, spurred by Toyota with others following, are forecasted to send the Seasonally Adjusted Annual Rate of vehicle sales to 12.4 million this month from February's 10.3 million, according to Edmunds.com.
Toyota will get a big bang for its incentives bucks with sales up 80 percent from February, Edmunds.com forecasts. And Ford is expected to outsell GM again in March as it did in February.
"Although this SAAR sounds promising, it's too early to wave the flag and say that the economy has turned the corner," Edmunds.com CEO Jeremy Anwyl said. "Incentives drove sales this month, but those incentives were defensive moves by Toyota and its competitors, and are unlikely to last because inventories are simply not high enough to justify them."
Saying it heralds "a new era for the Swedish premium car maker as an independent company," Saab Automobile restarted production this week at its retooled assembly plant in Trollhattan, Sweden, making the first-ever Saab cars under the company's new owner, Spyker Cars NV.
The company said the first car off the lines after a seven-week idling as Saab transferred ownership from General Motors Co. to Spyker was the new-generation 9-5 sedan. Saab said the line also is producing the 9-3 convertible and by the time the SportCombi wagon body style of the 9-5 comes next year, the Trollhatten plant will be assembling five distinct models.
High-flying Hyundai Motor America took one on the chin this week as Nissan North America Inc. pirated Hyundai Marketing Vice President Joel Ewanick -- father of the company's cogent Hyundai Assurance buy-back program -- to become the new vice president of marketing for the Nissan division.
Word is that Hyundai is not amused to lose Ewanick, whose work netted him a handful of awards last year, including Chief Marketer of the Year from Forbes, Grand Marketer of the Year from Brandweek and Advertising Age's Marketer of the Year.
Ewanick, who had been with Hyundai since 2007, held positions outside the auto industry and also worked for Porsche Cars North America Inc.
Industry consultant IHS Global Insight announced this week it is acquiring auto-supplier data and forecasting firm CSM Worldwide for $27 million.
Global Insight delivers financial and economic analysis for a broad range of industries and entities, but its automotive-sector consultancy is one of its better-known businesses. The acquisition of CSM Worldwide will give Global Insight direct access to CSM's supplier-focused data and market information.
"CSM's strengths in the supplier market, production and powertrain analysis, and North American and Asian customer markets are highly complementary to services provided by IHS," the company said in a statement.
"Becoming a part of IHS creates tremendous opportunity and allows us to leverage the experience and expertise of both organizations to better serve our customers around the world," said CSM Worldwide founder, president and CEO Craig Cather, who will direct the combined automotive forecasting and analysis operations of CSM and IHS. "Our combined automotive forecasting business will offer clients unparalleled intelligence related to the global automotive market."
Former auto executive Jerome York is dead at the age of 71 after suffering a brain aneurysm on Tuesday.
In the 1970s, York held high executive posts at Ford Motor Co. and Chrysler Corp. and was a central player in Chrysler's early 1980s turnaround, yet always was a vocal and strident critic of Detroit automakers for what he characterized as a myopic management culture.
York's seemingly perpetual prediction that Detroit would fall if it did not change essentially came to fruition with last summer's bankruptcies at General Motors Corp. and Chrysler.
York had a colorful career for someone who often was characterized as relentlessly methodical and calculating - a perception that may have cost him the CEO chair at Chrysler when legendarily emotional Lee Iacocca retired in 1992.
Overall vehicle dependability has improved 7 percent and for the first time in more than a decade, a domestic vehicle is the industry's dependability leader, says the latest Vehicle Dependability Study from J.D. Power and Associates.
Power's latest version of its widely-watched dependability study was based on 52,000 responses from owners about their experience over the last year with their 3-year-old, 2007-model vehicles.
General Motors Co.'s Cadillac DTS was the study's leader, beating all individual models with 76 problems per 100 vehicles; the industry average was 155 problems per 100 vehicles, a 7-percent improvement over the average 165 PP100 reported by owners last year.
Porsche was the overall nameplate leader at an average of 110 problems per 100 vehicles and Ford Motor Co.'s Lincoln brand climbed six rungs since last year to finish in second place with a 114 PP100 rating. Overall, 25 of 36 brands improved their rating from last year and 14 brands performed better than the industry average.
The Volkswagen Group and its recently acquired Porsche Automobil Holding SE, owner of Porsche Cars, said this week a delegation that included the German State of Lower Saxony traveled to the Emirate of Qatar to "intensify cooperation" with the Emirate in the areas of research, development and education.
Last year, the complex financial and investment arrangement that led to VW's takeover of Porsche (after an improbable attempt at the opposite was aborted) led to Qatar becoming VW's third-largest shareholder - after the Piech family and Lower Saxony - with about 17 percent of VW. Through the deal, Qatar also holds about 10 percent of Porsche Automobil Holding SE.
Volkswagen said in a statement, "Topics discussed included possible research cooperation into new materials, energy production and storage, fuel economy optimization in engines, and the medium-term openings for establishing a vehicle materials test laboratory."
If you're seeing a lot of particularly dirty Jeep Grand Cherokees these days, there might be a good reason.
Doug Newman, owner of conveyer-belt style carwash chain in Milford, Connecticut, told Bloomberg news last week the Chrysler Group LLC sport-utility is an unintended acceleration beast, accounting for all four of the unintended-acceleration incidents that have occurred at his operations since 2000.
Little more than a month ago, a worker piloting a 2006 Grand Cherokee at the Octopus carwash in Albuquerque, New Mexico, killed another worker after the driver said the Jeep accelerated uncontrollably, smashing the worker against a wall.
And a member at Edmunds.com's CarSpace social-media forum identified as Octo30yrs said the Grand Cherokee's unintended-acceleration reputation with the carwash community is such that some operations now are either pushing through Grand Cherokees or rejecting them altogether.
James Sikes said last week the accelerator on his 2008 Toyota Prius hybrid-electric vehicle stuck open and the car took him prisoner on a 20-minute high-speed run on a San Diego freeway.
After examining and testing Sikes' Prius for two days, Toyota Motor Corp. engineers effectively are saying, "No sell."
Sikes' account of the event, in which he said his Prius accelerated of its own accord to speeds as high as 94 mph, has come under increasing skepticism in the week since it was reported, initially by Sikes himself calling 911. Now Toyota's investigation results -- although some will brand them as anything but unbiased -- add more doubt regarding Sikes' credibility.
"While a final report is not yet complete, there are strong indications that the driver's account of the event is inconsistent with the findings of the preliminary analysis," Toyota said in a press conference Monday.
Well underway with the colossal job of attending to more than six million vehicles recalled to address either potentially sticking accelerator pedals or wayward floormats, a Toyota spokesman yesterday admitted some of the repairs may not be properly conducted.
The spokesman, in attendance of a media event where engineers demonstrated how unintended acceleration simulated by one researcher using a Toyota electronically controlled throttle system is virtually impossible to happen in real-world conditions, said the company is aware of multiple reports of continuing incidents of unintended acceleration in vehicles that had undergone the stipulated warranty repairs.
He added that only a few of the claims had been verified, but seemed to admit not all repairs are being properly carried out, saying that for some of the vehicles reported to still be accelerating of their own accord, "it had to do with the repair not being done properly."
Toyota Motor Corp. battled back yesterday against a hurricane of negative publicity and Congressional calls for action related to unintended acceleration in its Toyota- and Lexus-brand vehicles.
The controversy takes a new twist as Toyota and Exponent Inc., the high-profile engineering consultancy and troubleshooter the company has hired, demonstrated the unintended acceleration-causing conditions produced in a highly publicized test for Safety Research and Strategies Inc. conducted by Dr. David Gilbert, an associate professor of automotive technology at Southern Illinois University at Carbondale, are highly unlikely to occur under real-world conditions.
The Exponent team also showed that the design of Toyota's wiring for its electronically controlled throttle - the component suspected to be at the root of unintended acceleration - is engineered to prevent the potential for the kind of failure Gilbert's testing generated.
The composting-saves-the-world neighbors won't be able to sneer (as much) at the gas-sucking muscle car in the driveway after Ford Motor Co. crowed today that a Mustang sporting the nameplate's new 3.7-liter dual-cam V6 churns out 305 horsepower - yet was just certified by the Environmental Protection Agency as earning a highway fuel-economy rating of 31 miles per gallon.
Ford says the car is history's first example of a production model that exceeds 300 hp yet also tops 30 mpg.
The number actually beat Ford's earlier expectations for 30 mpg from the V6 Mustang, the number the company was proudly promoting in January at the Detroit auto show.
The story that Ford Motor Co. outsold General Motors Co. (by 471 units) for the first month since August, 1998, has made the rounds.
But February's sales charts served up some other noteworthy numbers. Here is a selection:
Ford and GM's totals were No.1 and No. 2 in the market, and figures for the "Big 7" automakers were rounded out, in descending order, by Toyota Motor Sales USA at 100,027; Chrysler Group LLC at 84,449; Honda Motor America at 80,671; Nissan Motor Co. Ltd. at 70,189 and the Hyundai Group (Hyundai and Kia brands combined) at 58,056.
General Motors Co. vice chairman Bob Lutz, the company's energetic and often combative product guru - and long the embodiment of the auto industry's quintessential "car guy" executive - will retire May 1.
The company announced Lutz's retirement today.
The 78-year-old Lutz has had a larger-than-life automotive career that begin in 1963 and included stopovers with significant executive roles at each of the Big Three automakers and BMW AG prior to rejoining GM in 2001.
February marked the first month since August, 1998, that Ford Motor Co.'s monthly sales topped those of chief rival General Motors Co., providing an unexpected jolt in a month when the broad industry was handicapped by severe winter weather in the northeast regions of the country - and by the spillover from Toyota's safety-recall debacle.
Total U.S. auto sales for the month were 779,743 units, an increase of about 13.5 percent from year-earlier sales of 687,182, when the American automotive market was at the very bottom of one of its biggest slumps ever. And the February pace represented a seasonally adjusted annual sales rate of 10.4 million units, a number at the upper middle of most SAAR projections.
"The good underlying news is that the industry hasn't gone into reverse in terms of its recovery," said Jessica Caldwell, senior industry analyst for Edmunds.com.
Several media sources reported late Monday General Motors Co. is dropping plans for a Cadillac-badged version of the high-tech Chevrolet Volt extended-range electric vehicle so Cadillac can focus on less-expensive plug-in hybrid-electric vehicles.
Apparently a Cadillac version of the Volt would be too weighed down by the expected luxury and comfort features to replicate the Volt's 40-mile electric-only driving range without extensive extra cost, a Bloomberg report said. Sources suggested achieving even a 20-mile driving range solely on battery power might require $30,000 of added cost, the report added.
The loss of the proposed Cadillac variant of the Volt casts more doubt on the near-term applicability of the Volt's battery-intensive, series-hybrid design.
Some GM executives had argued a Cadillac version of the Volt would help reduce costs -- mostly centered around the expensive lithium-ion batteries -- and speed wider adoption of the Volt's technology.
General Motors Corp., prodded by impatient chairman and newly named CEO Ed Whitacre to start hiking sales and market share, reportedly is planning a new management restructuring that will place more power with GM North America president Mark Reuss.
Automotive News reports Reuss will take over responsibility for sales from vice president of sales and marketing Susan Docherty, who will continue to head GM's marketing functions.
Each of GM's four remaining sales divisions -- Buick, Cadillac, Chevrolet and GMC -- will have newly appointed chiefs for both sales and marketing, with divisional sales bosses reporting to Reuss and divisional marketing heads reporting to Docherty.
Currently, division heads are in charge of both functions.
There aren't that many true concept vehicles slated for the Geneva motor show this week. The few that are unveiled are bookended by a heavy presence in two sectors: small cars and luxury models.
Most of the attention in Geneva is concentrated on the small-car sector, thanks to continuing environmental pressure on both sides of the Atlantic. Europe continues to press with carbon-dioxide reduction measures, while financially battered U.S. customers evidence a downsizing mindset and the nation glides inexorably closer to a 2016 deadline for all automaker fleets to average 35 miles per gallon.
So while the Geneva show is mostly about what makes sense for an auto sector evolving toward less dependence on fossil fuels, the makers of luxury performance cars continue to respond with their own individual visions of how that future will be addressed. In many senses, it's becoming evident the makers of premium vehicles may in fact have more of an opportunity to capitalize -- as customers able to spend but unwilling to compromise may represent the best market to accept pricey new fuel-saving innovations.
The possibilities for synergy between the environmental movement and the luxury auto market may be almost limitless: even Ferrari, after all, is showing a hybrid-electric concept at this week's Geneva show.
Other than apologizing to a raft of House of Representatives lawmakers for accidents involving their constituents and pledging to improve the company's quality, communications and transparency, Akio Toyoda, president and CEO of embattled Toyota Motor Corp., didn't give Congress much to chew on after a day of exhaustive testimony in Washington, DC.
Testifying for the House Committee on Oversight and Government Reform along with Yoshimi Inaba, president and COO of Toyota Motor North America, Toyoda was hampered by the need to mostly speak through an interpreter and by delivering precious little in the way of definitive answers for House members desperate to produce public satisfaction.
As part of the obvious fallout of Toyota's problems with vehicle recalls and humiliating Congressional hearings, Hyundai Motor Co. announced in Korea Wednesday that it would temporarily stop selling its much ballyhooed 2011 Hyundai Sonata to fix a faulty door latch.
Hyundai said the problem affects 1,300 cars that have been bought by customers and 4,000 cars on dealership lots in the U.S.; it affects 47,000 vehicles globally as the Sonata is one of Hyundai's bestsellers, the other being the Elantra.
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.
Optimistic that its upcoming Chevrolet Cruze small car will be a hit, General Motors announced Tuesday that it is cranking up production at its Lordstown, Ohio, plant by adding a third shift and hiring 1,200 workers.
The 2011 Chevrolet Cruze goes on sale in the third quarter. The Cruze is the first of a new family of Chevrolet small cars.
"Cruze is a perfect example of how GM's turnaround is focused on the right products at the right time," said GM North America President Mark Reuss at a plant press conference. "This is a global car already kicking goals in 60 international markets. Based on that reaction, we expect the plant will be busy building a hot seller for North America."
Toyota's top U.S. sales executive will tell Congressmen Tuesday that the automaker was too slow to act on safety issues, was poor at communicating but will do better in the future.
"It has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good faith efforts," Jim Lentz, Toyota Motor Sales president and COO will tell the House Committee on Energy and Commerce. His statement, to be read to the committee, was released by Toyota Tuesday morning.
Lentz said the automaker's slow reaction has been "compounded by poor communications both within our company and with regulators and consumers."
Even in a wobbly U.S. auto market, Hyundai Motor America is pretty confident about the prospects for its all-new 2011 Sonata sedan. But not so confident the company doesn't think its best-selling model couldn't use some support, so it's rolling out its biggest budget ever to launch the new version of its best-selling model.
That would be about $160 million, said CEO John Krafcik during a media event today for the 2011 Sonata, which he said is just now reaching dealers.
"In Hyundai terms, this is really big money," Krafcik said. He compares the figure to the $80 million Hyundai recently spent to launch the Genesis premium sedan and $120 million to roll out the previous-generation Sonata in 2006.
After initially saying he would let executives from the company's U.S. operations handle appearances at two separate hearings in the U.S. Congress next week, Toyota Motor Corp. president and CEO Akio Toyoda abruptly changed course and announced he will put in a personal appearance.
Two House of Representatives committees will stage hearings on Tuesday and Wednesday next week regarding Toyota's high-profile -- and some say alarming -- recalls for sticking accelerator pedals and floor mats that have the potential to cause "unintended acceleration" in millions of Toyota vehicles.
Earlier in the week, the House Committee on Oversight and Government Reform -- whose hearing is on Wednesday at 10 a.m. Eastern time -- invited Toyoda to appear at its hearing. Toyoda declined, as he also had for a Senate hearing scheduled for March 2.
But now Toyoda -- the grandson of the company's founder who became president and CEO in January, 2009 -- confirms he will appear at the House Oversight Committee's hearing next week.
The National Highway Traffic Safety Administration is launching a formal investigation into consumer complaints regarding steering on 2009-2010 Toyota Corolla models, an investigation that may lead to a recall of the bestseller.
The agency said it had received 150 complaints. Toyota Executive Vice President Shinichi Sasaki told reporters in Japan this week that NHTSA had received more than 80 online complaints. NHTSA's inquiry will cover 500,000 vehicles.
The Washington Post cited one complaint on a 2010 Corolla read: "When driving on the highway (60+ mph), the vehicle will all of a sudden start to wander back and forth in the lane, for a few hundred yards. Then as quickly as it started, it stops. The wandering has almost created four collisions so far."
Toyota's president of U.S. sales, Jim Lentz, will testify at the first U.S. House hearing on Toyota's recalls next week, rather than the originally planned appearance of the company's North American president Yoshimi Inaba.
Toyota has been called to testify at two congressional hearings next week. The House Energy and Commerce Committee moved up its hearing by two days to Tuesday, February 23. Toyota said the date change would require Inaba to alter his travel plans. He will testify at a February 24 hearing before the House Oversight and Government Reform Committee, she said.
Toyota President Akio Toyoda said he does not plan to testify at any of the Congressional hearings.
With the first of a series of Congressional hearings only a week away, posturing by Toyota and the federal safety agency in charge of watching Toyota and other automakers has begun.
Both will be on hot seats during the hearings, and both are attempting to put themselves in the best light possible between now and then.
On Tuesday, the National Highway Traffic Safety Administration (NHTSA) said it was using its statutory authority to force Toyota to provide paperwork showing when and how the automaker learned of the defects that led to the recall of million of vehicles in the U.S. The government safety agency wants to determine of the recall were conducted "in a timely manner."
At the same time, Toyota Motor Co. President Akio Toyoda is preparing to brief the media Wednesday evening in Japan. He is expected to provide detail the global task force he is leading to revamp Toyota's quality control system.
At the Chicago auto show this week, Chrysler Group LLC president and CEO of the Dodge brand and senior vice president of product design Ralph Gilles reminded that the lowly esteemed and poorly selling Dodge Avenger and its Chrysler Sebring counterpart will get substantial overhauls for the 2011 model year.
The makeovers might include new names, Gilles told Bloomberg News.
The situation with the Avenger and Sebring leaves Chrysler in a conundrum that will test one of the more lasting adages of the auto business: establishing a nameplate is a costly investment, making it a good idea not to change. Likewise, establishing a new name for an existing or revised model can confuse consumers, threaten sales and squander the investment in the previous name.
Honda, unlike General Motors, Ford and Hyundai, has steered clear of incentives aimed at specifically and blatantly at luring would-be Toyota buyers to their folds as Toyota struggles with quality and image problems.
Honda is, however, offering an attractive sub $200-a-month lease deal on the Honda Insight, obviously to go up against the Toyota Prius, which has been recalled for brake problems. The deal is so good Edmunds.com has named the promotion its lease deal of the week.
As Toyota faces plummeting sales and market share in February, its Central Atlantic Region has launched a President's Day promotion of no-interest financing for up to 60 months on a half-dozen models, including some that are covered under Toyota's recent recalls.
It's not clear if other distributors will follow suit.
Recalls, stop-sales orders and the accompanying bad press have put downward pressure on prices of new and used Toyota vehicles, but the hit is not as huge as might be expected, according to an analysis by Edmunds.com.
New vehicles specifically covered by Toyota recalls are selling for an average of 0.5 percent - or $150 per vehicle - less than earlier this year, according to the most recent adjustments made to Edmunds.com's True Market Value pricing.
Used Toyota vehicles covered by recalls are selling for about 3 percent less than earlier this year, according to Edmunds.com. However, dealers --- either being cautious or opportunistic -- are paying about 6 percent less for Toyota trade-ins than they did before the recalls were announced.
In conjunction with the 2010 Chicago Auto Show, the Economic Club of Chicago was geared up for a Thursday speech from Fiat Auto Group and Chrysler Group LLC chief executive Sergio Marchionne.
Instead, Marchionne traded one snowy city for a place probably a lot snowier, bowing out of the Chicago engagement in order to attend the signing of a new Fiat venture in Russia.
Marchionne plans to be on hand tomorrow for the signing of a joint venture with Russian automaker OAO Sollers to produce Fiat cars at an existing Sollers assembly plant in Naberezhniye Chelny, located in west central Russia. Russia Prime Minister Vladimir Putin reportedly also plans to visit the plant tomorrow.
State Farm insurance warned U.S. regulators repeatedly of a rise in vehicle-accident claims involving Toyota vehicles and uninntended acceleration as far back as 2007, according to various media reports coming out of Washington Tuesday, a day before Toyota's top U.S. executive is scheduled to testify before the House oversight committee.
The nation's largest auto insurer saw an increase in reports of unwanted acceleration in Toyotas from its database of 40 million customers and told the National Highway Traffic Safety Administration (NTHSA) in 2007, the company confirmed.
Interestingly, State Farm also was first to sound the alarm on the deadly rollovers of Ford Explorers with Firestone tires in 2000.
Toyota Motor Co., as expected, announced Tuesday the global recall of 437,000 hybrid models, including the Toyota Prius and Lexus HS 250h, to fix faulty braking systems.
The latest recall covers four models and brings the total number of recalled vehicles for various problems to about 8 million worldwide.
Toyota Motor Co. President Akio Toyoda announced the hybrid recall at a press conference in Japan Tuesday. As he did at a press conference last Friday, Toyoda, grandson of the company founder, apologized for causing customers to worry about Toyota's quality and safety and vowed to "redouble our commitment to quality."
Despite recalls, stop-sales orders on some of its best-selling models and other mounting quality concerns, Toyota announced Thursday it had earned money in the previous quarter and raised its earnings forecast for the year, saying it will return to profitability this year.
Toyota's profit forecast comes as the automaker's quality issues are increasing. Toyota's latest quality problem involves its high-profile Prius -- the world's best-selling hybrid car -- that company executives admitted Thursday has brake issues.
U.S. Transportation Secretary Ray LaHood said owners of Toyota vehicles recalled for accelerator-pedal defects should "stop driving" them and bring them to a Toyota dealer for repair.
"We need to fix the problem so people don't have to worry about disengaging the engine or slamming the brakes on or put it in neutral," LaHood told a House Appropriations panel hearing in response to questions from a lawmaker.
"If anybody owns of these vehicles, stop driving it and take it to a Toyota dealer," he added.
Akio Toyoda, grandson of the founder of Toyota who was named president and CEO of the company last year, made his first public comment about the massive recall that led to a stop-selling order of eight popular models in the U.S. this week.
"I am deeply sorry," Toyoda said in a brief interview with the Japanese network NHK as reported by ABC News. Toyoda was attending the famous economic conference in Davos, Switzerland.
He apologized to customers for causing them worry. He said he could not answer questions because the company "was still investigating," but he hoped to provide customers with an explanation soon. "I would like for people to trust us," he said.
A top Toyota executive, in a briefing with Edmunds.com staffers, clarified some points of the automaker's recent actions regarding the recall and subsequent sales and production suspension of eight best-selling Toyota-brand models. He described symptoms that suggest unintended acceleration in these vehicles could occur and provided an update on a remedy for the problem.
Meantime, Toyota expanded its stop-sale to Europe and Asia as well as to the U.S. Toyota Corolla/Matrix-based Pontiac Vibe, a model from a brand that General Motors has discontinued. The Vibe had been built at the New United Motor Manufacturing GM-Toyota joint venture plant in Fremont, California, that is being closed by Toyota. Toyota also added about 1 million vehicles to the floormat recall initiated last fall.
General Motors and Spyker Cars confirmed Tuesday that GM has agreed to sell Swedish automaker Saab to the Dutch sports car maker.
"Today's announcement is great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM," said John Smith, GM vice president for corporate planning and alliances, who will hold a press conference later in the day.
Spyker told Bloomberg News it has agreed to pay $74 million in cash and $326 million in preferred shares in the new company that would emerge from the deal, to be called Saab Spyker Automobiles, which will carry the Saab brand forward. The sale is subject to Sweden agreeing to guarantee a 400 million-euro ($563 million) European Investment Bank loan for Saab.
The sale is expected to close in February and Saab will exit an orderly wind-down process in line with the timetable, the Dutch company said.
General Motors Co. announced Tuesday it will enhance its ability to develop and build future electric vehicles by designing and producing its own electric traction motors, effectively the "engines" that propel fully electric vehicles.
GM says the decision to design and manufacture its own traction motors makes it the first domestic automaker to make the commitment to in-house development. The company says it is investing $246 million in electric motor and electric drive facilities in the U.S.
Tom Stephens, GM vice chairman, global product operations, said in a media event with reporters the company believes committing to developing its own traction motors will save money, improve performance and allow better optimization of the entire electric drivetrain.
The Ford Fusion Hybrid earned 26 percent of the votes, closely followed by the Toyota Prius with 23 percent.
"Ford's midsize hybrid sedan, which helped boost Ford's overall sales performance in an otherwise dismal 2009, has been praised for its smooth operation, fuel economy, looks and interactive information system that helps drivers modify their behind-the-wheel behavior to increase fuel economy," according to Edmunds' GreenCarAdvisor.com Senior Editor John O'Dell.
Toyota issued another major safety recall late Thursday -- this one for 2.3 million Toyota- brand vehicles to correct sticking accelerator pedals.
The newest recall is in addition to an ongoing recall of 4.2 million Toyota and Lexus vehicles for sticking gas pedals due to the wrong floormat being in the car or an improperly placed floormat. About 1.7 million vehicles are covered by both recalls.
Toyota vehicles listed in the latest recall represent the biggest sellers for the automaker once known for bulletproof quality. In fact, the models covered under the recall account for more than two-thirds of Toyota brand's sales.
They are the: 2009-'10 RAV4, Corolla and Matrix; 2005-'10 Avalon; 2007-'10 Camry; 2010 Highlander, 2007-'10 Tundra and 2008-'10 Sequoia.
General Motors' restructuring of its Opel operations in Europe have begun with Thursday's announcement that the automaker - as expected - will close an assembly plant in Antwerp, Belgium, mid-2010, eliminating 2,600 jobs.
The Belgian plant builds the Opel Astra, which had been sold in the U.S. as the Saturn Astra before the Saturn brand was eliminated. The plant was selected because Astra and other models it assembles are made elsewhere so capacity shifts can be easily accomplished, Opel CEO Nick Reilly said in a news conference in Brussels.
"The decision to announce this today, was not taken lightly; instead, it is the unfortunate result of the current business reality," Reilly said. "We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations."
If it works for General Motors, why not Japan Airlines?
U.S. bankruptcy experts insisted last summer that new laws were being written during government-backed "quick rinse" Chapter 11 proceedings of GM and Chrysler. Now international companies were looking to those bankruptcies as the way to get the job done.
Japan Airlines Corp. (JAL) filed for bankruptcy - Japan's sixth-largest bankruptcy ever - this week. Analysts are looking at GM's bankruptcy to determine how much JAL's investors will be re-paid. Based on the GM scenario, they expect JAL investors to recover 20 to 25 percent of their investment.
Even as it talks of the need to ramp up production at several U.S. assembly plants, General Motors Corp. is sending another message to the handful of former Delphi Inc. plants it "reacquired" as part of Delphi's departure from bankruptcy: costs have to be reduced.
The Detroit News reports today GM is seeking wage concessions from the United Auto Workers union workers who staff the components plants. The gambit likely was inevitable: GM spent billions to purchase the plants when Delphi exited its protracted bankruptcy late last year in order to assure the orderly delivery of vital parts - but GM reportedly is seeking to sell many, if not all of the facilities. The company already announced earlier this month it is selling the Nexsteer steering-components plant in Saginaw, MI.
The report that GM wants to reduce labor costs hardly is a surprise, then, as it brings these plants - and the thinking that originally created Delphi - full circle.
The Ford Fusion Hybrid and the Ford Transit Connect won the 2010 North American Car and Truck of the Year awards, it was announced Monday morning at the Detroit auto show.
The Fusion Hybrid won over two other finalists for the prestigious award -- the Buick LaCrosse and Volkswagen Golf. The Transit Connect beat out the Chevrolet Equinox and Subaru Outback.
"Winning both of these prestigious awards is confirmation that the One Ford plan is working, delivering industry-leading product for our customers," said Mark Fields, Ford president of The Americas.
General Motors Chairman and Interim CEO Ed Whitacre said the automaker has a shot at earning a profit in 2010, but he sees little hope to a rescue of Saab.
In a wide-ranging conversation with media in Detroit on Wednesday, Whitacre said GM's top priority to is earn a profit so that it can pay back its government loans and become a public company again. Going public wouldn't happen earlier than late this year, however.
U.S. auto sales in December accelerated to their best pace of the year outside last summer's Cash for Clunkers bonanza, providing a hopeful punctuation mark to the industry's worst year in decades.
Sales in December totaled 1,010,003, up 1.9 percent from December 2008, when automakers and American consumers were newly stunned by the economic debacle unfolding on several levels around them.
Subaru of America was first to announce December and full-year 2009 sales. And not surprisingly. The Japanese automaker is proud that it not only bucked the downward trend of the industry in 2009 -- one of the worst years in three decades; it shattered its own records.
Subaru sold 216,652 vehicles, an increase of 15 percent from 2008, surpassing the previous 2006 record of 200,703 vehicles. .
Automotive publishing veteran Bill Visnic joins Edmunds.com as full-time senior editor for Edmunds' AutoObserver.com.
Having been a regular freelance contributor to the automotive industry blog since 2007, Visnic will expand his role, providing expert analysis of business and technology developments.
Visnic brings to the position 16 years of experience as an automotive journalist. As Senior Technical Editor at Ward'sAutomotive Group, he implemented the highly regarded Ward's 10 Best Engines program. Prior to Ward's, Visnic worked as Associate Editor at Car and Driver.
General Motors Co., in an effort to clear the decks for the new year, is offering hefty incentives to dealers to sell thousands of vehicles from its discontinued Saturn and Pontiac brands.
In a December 23 letter to dealers, obtained by the Wall Street Journal, GM said it would pay dealers $7,000 for every new Saturn or Pontiac that it moves to a rental-car or service-vehicle fleet operated by the dealer and then sells as a used vehicle to a customer. The offer expires January 4.
There's no guarantee the $7,000 will go from the dealer to the customer. However, a dealer can use some or all of the cash to make the deal more attractive to the customer. In the case of Pontiac's cheapest vehicle, the G3, that would mean almost half off if the dealer passed along all of the incentive.
Ford Motor Co. confirmed Wednesday details of its sale of Volvo to China's Zheijang Geely Holding Group Company Ltd. have been settled, and the deal likely will close in the second quarter of next year.
Saying more information would be revealed when the final documents are signed in the first quarter of 2010, Ford provided no details about the terms of the sale, including the price. Experts estimate the price $1.8 billion, making it the largest overseas acquisition by a Chinese automaker.
General Motors announced Monday it has hired as its new CFO Chris Liddell, most recently CFO for Microsoft Corp.
"Chris brings a depth and experience to this job that were unmatched in our search for a new financial leader," Ed Whitacre, GM chairman and CEO, said in a statement.
"Chris will lead our financial and accounting operations on a global basis and will report directly to me," Whitacre added. We're also looking to his experience and insights in corporate strategy as a member of the senior leadership team in helping our restructuring efforts."
General Motors announced Friday its planned sale of Saab has failed, and the Saab brand will be eliminated, resulting in the loss of 3,400 jobs and 1,100 dealers globally.
After Swedish sports car maker Koenigsegg Group AB last month withdrew from negotiations for Saab, GM took up discussions with Dutch sports car maker Spyker Cars. The deal, which failed Friday morning, was considered a long-shot due to the short timeframe to close the deal -- GM set a Dec. 31 deadline. In addition, Spyker is a small and unprofitable company, plus financing in any deal is challenging in these times.
"Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution," said GM Europe President Nick Reilly.
The former AT&T CEO held his first media roundtable since adding the CEO title two weeks after the ouster of Fritz Henderson.
At the press briefing, Whitacre said GM's priorities are paying back $6.7 billion in government loans by June and selling more cars and generating more revenue. He also called GM's sale of Saab to Dutch sports car maker Spyker is "possible" by year-end, but, if not, Saab would be eliminated.
The Ford Fusion Hybrid, Buick LaCrosse and Volkswagen Golf are finalists for the 2010 North American Car of the Year awards. Finalists for the 2010 North American Truck of the year are the Subaru Outback, Chevrolet Equinox and Ford Transit Connect.
The half-dozen finalists for the prestigious awards were announced Wednesday at an Automotive Press Association luncheon sponsored by organizers of the Detroit auto show, where the winners will be announced in January.
The Chapter 11 bankruptcy reorganization plan filed Tuesday by the company comprised of the remnants of the former Chrysler, Old Carco LLC, effectively leaves the U.S. taxpayer on the hook for about $4 billion loaned to the company through the U.S. Department of Treasury's infamous Troubled Assets Relief Program, Reuters reported.
The plan accounts for no payback of the $4 billion "bridge" loan to Chrysler made through TARP in January, prior to its summer bankruptcy, although secured creditors accounting for a mere $20.6 million of the billions in debt the company left behind will be paid in full.
In his first media roundtable since adding CEO to his title only 14 days ago, General Motors Chairman Ed Whitacre said: the automaker would pay back $6.7 billion in government loans by June; selling more cars and generating revenue are GM's top priorities; and a sale of Sweden's Saab to Dutch sportsmaker Spyker is "possible."
Whitacre, the retired CEO of AT&T who became GM chairman at the request of President Obama's automotive task force following GM's emergence from Chapter 11 bankruptcy July 10, said GM will make a $1.2 billion payment on the loan it received from the Treasury Department's Troubled Asset Relief Program (TARP) this month.
GM then intends to make quarterly payments until June 2010 when it will pay in full the $6.7 billion in TARP funds it owes. At the same time, GM will make payments on its loans from the Ontario and Canadian governments.
In webchat with a "consumer" audience that seemingly was populated by plenty of industry-savvy questioners, new General Motors Co. North America president Mark Reuss said Friday one of his first initiatives since assuming his new role early this month will be to streamline some of the corporate structure.
Reuss said his planned new system comprises just five direct reports that are "laser focused" on sales, marketing, manufacturing, Canada/Mexico and GM's OnStar telematics-service unit. He said recently-resigned CEO Fritz Henderson "had a lot more to do," inferring that the reporting to Reuss can be simplified because of the different duties of CEO and North American president positions.
Reuss also insinuated he will be working to solidify the ties between GM's North American engineering activities and its Adam Opel AG European Operations. After a lengthy period in which GM made preparations to sell off Opel, the company's board decided to retain the division. Now, Reuss said, he plans to leverage the engineering and product-development experience at Opel to the benefit of all GM vehicles.
General Motors Co.'s crucial Chevrolet division has a new general manager as yet another long-serving executive is leaving GM.
The company announced late Wednesday that Brent Dewar, 31-year GM veteran and vice president, global Chevrolet, will retire effective April 1, 2010. Taking over immediately as Chevrolet general manager is 45-year-old James M. Campbell, who had been in charge of GM's Fleet and Commercial Operations.
Since GM emerged from bankruptcy in mid-July, chairman Ed Whitacre has emphasized GM is striving for younger faces and fresher thinking -- not to mention fresh blood from outside -- to reinvigorate GM's hidebound executive culture.
Chevrolet's new general manager is appropriately young, perhaps, but is no newbie at GM, having been with the company since 1988.
General Motors announced Monday that it will invest $336 million in the Detroit-Hamtramck assembly plant to begin production of the Chevrolet Volt electric car in 2010.
GM said that brings its total Volt-related investments in Michigan to $700 million, covering eight facilities.
"We expect the Detroit-Hamtramck plant will be the first facility in the U.S. owned by a major automaker to produce an electric car, Jon Lauckner, GM vice president of global product planning, told the company and government officials gathered at the plant Monday.
Maybe tiny Suzuki Motor Corp. no longer has to be concerned that sales for its American Suzuki Motor Corp. unit have been evaporating towards near-nonexistence: information from Europe says the burgeoning Volkswagen Group has plans to take over Suzuki by the end of the year.
A report in Britain's Car magazine, authored by Georg Kacher -- a writer with historically reliable and highly-placed sources -- says VW has been negotiating for months to acquire Suzuki and that the company had planned to announce the consummation of the deal at the Tokyo motor show in October, but last-minute contractual negotiations delayed the timeline.
Now, Kacher says in Car, VW should announce by the end of the year it's completed a deal to own Suzuki, making the Japanese minicar specialist VW's 11th brand.
General Motors made official a number of key leadership changes, including the elevation of Mark Reuss, a 46-year-old engineer and "car guy," to president of GM North America, Nick Reilly to president of GM Europe and Vice Chairman Bob Lutz becomes an advisor on design and product development.
"I want to give people more responsibility and authority deeper in the organization and then hold them accountable," said GM chairman and interim CEO Ed Whitacre, in a statement. "We've realigned our leadership duties and responsibilities to help us meet our mission to design, build and sell the world's best vehicles."
Reuss served ever so briefly as vice president of global engineering after being brought back early as head of Holden in Australia.
First it was one-off exotic-car builder Koenigsegg Group. With that deal part of history, a new one-off exotic-car maker, Netherlands-based Spyker Cars NV, formally confirmed yesterday it is talking to General Motors Co. about acquiring GM's twisting-in-the-wind Saab Automobiles.
Spyker is backed by its majority owner, Russia's Conversbank Financial Group, which owns 29.9 percent of Spyker, currently best known for its gullwing C8 Aileron sports car. Spyker reportedly has 132 employees and has sold less than 25 cars through the first half of this year. Saab currently employs about 4,500 and sold 93,000 vehicles last year.
Chrysler Group LLC is taking part in an interesting politically-oriented promotion with a TV film - opening on the Chrysler brand's Website Thursday - supporting a movement advocating the release of Aung San Suu Kyi, pro-democracy leader in Burma and 1991 Nobel Peace Prize Laureate. Kyi has been under sporadic house arrest for more than two decades.
Chrysler partnered with Lancia Automobiles for the 30-second film originally created for Lancia's sponsorship of the 10th World Summit of Nobel Peace Laureates in Berlin last month.
The theme of the summit was "knocking down new walls and building bridges for a world without violence," to coincide with the 20th anniversary of the demolition of the Berlin Wall.
The U.S. Supreme Court denied a last-ditch effort from Ford Motor Co. Monday to reverse an $82.6 million decision in a product-liability case involving the Ford Explorer, according to the Wall Street Journal.
California resident Benetta Buell-Wilson and her husband sued Ford in 2002, the year the Ford Explorer Buell-Wilson was driving overturned on a highway. Buell-Wilson swerved to avoid a piece of metal, causing the Explorer to roll over and its roof to collapsed, crushing Buell-Wilson and rendering her a paraplegic.
Just as General Motors was about to seal the deal to sell Saturn to the Penske Automotive Group on Sept. 30, French automaker Renault, which had pledged to supply small vehicles to the venture, backed out, an executive involved in the negotiations told a Detroit newspaper.
Tom LaSorda, retired Chrysler president who was helping Penske negotiate the Saturn-Renault deal, laid to rest any notion that it was Penske who wanted to back out of the deal. "Somebody got cold feet" at Renault, LaSorda told Detroit Free Press columnist Tom Walsh, whose article ran in Wednesday's edition.
"We were shocked," LaSorda told paper in his first public comments on the aborted Saturn sale. In fact, little has been said by anyone involved since the deal went sour.
Toyota Motor Corp. said Wednesday it will repair and replace accelerator pedals on 3.8 million recalled Toyota and Lexus vehicles in the United States to address the issue of pedals being jammed by the floor mat, potentially causing unintended acceleration.
As an interim step, Toyota said it will have dealers shorten the length of the accelerator pedals beginning in January while the company develops replacement pedals, to be available in April. Some vehicles will have an engine management system-based brake override installed as well.
Based on Edmunds.com's re-enactment of the floor mat-pedal situation, these fixes should alleviate the problem.
General Motors confirmed Tuesday that its planned sale of Swedish automaker Saab to Koenigsegg Group AB has collapsed with Koenigsegg terminating the sale.
What's next for Saab has yet to be determined.
"We're obviously very disappointed with the decision to pull out of the Saab purchase," GM President and CEO Fritz Henderson said in a statement issued by GM. "Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB.
"Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week," Henderson added.
A rigorous new roof-strength standard means a lot fewer new models earned the Insurance Institute for Highway Safety's "Top Safety Pick" award for 2010.
This year, just 27 individual models were named Top Safety Pick by the IIHS, compared with last year's record 94 models that earned the award. Most of the reason so many new vehicles couldn't grab the brass ring comes down to a newly instituted roof-safety test presumed to indicate superior protection in rollovers, which are involved in about one-third of all fatal accidents.
"With the addition of our new roof strength evaluation, our crash test results now cover all 4 of the most common kinds of crashes," said IIHS president Adrian Lund in a release. "Consumers can use this list to zero in on the vehicles that are on the top rung for safety."
In a recent meeting with automotive media, Nissan-Renault chairman and CEO Carlos Ghosn said Nissan intends to stick with fullsize pickups in the U.S. and also said there is a future for other trucks and SUVs in Nissan's model range, including the Quest minivan.
The fullsize pickup market has been battered by the U.S. economic upheaval and the auto industry's resulting plunge, and import-brand fullsizers have had the worst of it. Sales for Nissan's Titan were down a striking 50.2 percent through October, to a meager 15,393 sold.
After a deal in which Nissan arranged to have the next-generation Titan based on the Dodge Ram pickup and manufactured by Chrysler Group LLC evaporated earlier this year, questions began to circulate about whether Nissan would remain in the domestic-nameplate-dominated segment that has proven difficult for import brands to invade.
But Ghosn said despite the setback from losing the Chrysler connection, Nissan is hanging in the fullsize-pickup game.
Engineers at General Motors Co. working on the 2011 Chevrolet Volt extended-range electric vehicle yesterday told the media development remains on track and that the start of production for GM's game-changing, fuel-saving 4-seater now is less than a year away.
When GM unveiled the Volt at the Detroit auto show in January, 2007, the promise of production seemed tantalizingly far-flung - and improbable, given the myriad technical problems GM admitted had to be solved. But chief engineer Andrew Farah says the accelerated development program is on schedule and GM will begin producing the Volt in less than a year's time.
And despite the recent drama involving the proposed sale of GM's Adam Opel AG European operations and the company's eleventh-hour decision to keep the division, Farah says Opel's version of the Volt, the Ampera, remains on target to hit showrooms about a year after the Volt.
The Mazda2 is coming to North America, making its debut at the 2009 Los Angeles Auto Show in early December.
Named last year's World Car of the Year and sold in Japan as the Demio, the Mazda2 goes on sale in late 2010 in the U.S. and Canada as a 2011 model.
The Ford Fiesta, which shares the Mazda2's architecture, beats the Mazda2 to showrooms with a spring arrival. The Euro-designed Fiesta will be built in Mexico.
The Fiesta also will have its North American debut at the Los Angeles show.
Michael Carpenter, a board member turned new chief of GMAC Financial Services, vowed to make the company into "a premier auto finance company," something it has not been of late.
Troubled GMAC provides loans to General Motors customers and dealers and eventually will do the same for Chrysler but itself has been living on government loans to survive.
"The top priority is to turn GMAC into a premier auto finance company and pay back the government in a reasonable time frame," Carpenter said. "I am confident we can achieve that."
Ford Motor Co. stock closed Monday at its highest price in more than two years after billionaire investor George Soros upped his stake in the automaker.
Ford shares rose 30 cents, or 3.6 percent, to close at $8.71 a share on Monday. That's the highest price since the shares closed at $8.95 per share on Nov. 2, 2007, according to Bloomberg. Ford shares have risen 25 percent since Oct. and more than tripled this year.
General Motors said Monday, in releasing its first financial statement since emerging from Chapter 11 bankruptcy on July 10, it would make its first loan repayments to U.S. and Canadian taxpayers next month. At that time, it will pay back a total of $1.2 billion.
Still, the new GM reported a loss of $1.15 billion in its first 83 days of operation. However, that was an improvement from last year.
"We have significantly more work to do, but today's results provide evidence of the solid foundation we're building for the new GM," said GM President and CEO Fritz Henderson in a company statement. "With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance. We'll achieve that by winning customers over, one at a time, with vehicles that deliver performance and value."
Edmunds.com, parent of AutoObserver, late last week submitted a recommendation to the U.S. Environmental Protection Agency and Department of Transportation to make fuel-economy information on new-vehicle window stickers more useful by shifting to a cost-of-energy figure rather than today's emphasized miles-per-gallon numbers.
Edmunds.com believes beginning to focus on annual or monthly energy-cost figures will better prepare consumers and the industry for the increasing number of alternative-propulsion vehicles coming into production. Fully electric, extended-range electric and plug-in hybrid models all will rely less (or not at all) on burning liquid fuel - and translating their energy usage to MPG equivalents so far has proven to generate unrepresentative numbers that make for difficult comparisons between different types of vehicles.
"Consumers have used the existing MPG ratings primarily to get a sense of the relative cost of operating a vehicle on a day-to-day basis," said Edmunds.com CEO Jeremy Anwyl. "However, using energy equivalents can easily cause consumers to draw erroneous conclusions."
Dieter Zetsche, Daimler AG chairman and head of the German automaker's Mercedes-Benz passenger-car division, said yesterday in a media conference in New York that it "remains to be seen" if the U.S. economy really is improving, adding that "there is some (economic) data causing concern."
He said Daimler instead is banking on growth in China and some Latin America markets.
"I do believe the U.S. market will come back to former volumes," Zetsche said, adding, however, the company does not think it will happen until 2012 or 2013.
"There is one country where we haven't seen any retraction," he said. "This country is China." Zetsche said China soon will be the third-largest market for Mercedes-Benz - and already is the world's largest market for the company's S-Class flagship.
Top executives at General Motors Co. and Chrysler LLC have both gone out of their way in the past week to say their once-bankrupt companies are positioning themselves to pay back the tens of billions of dollars loaned to them by the federal government.
The man charged with overseeing the U.S. Dept. of Treasury program through which the money was loaned doesn't share their confidence.
Neil Barofsky, the special investigator assigned by Congress as the watchdog for the $700-billion Troubled Asset Relief Program, said at a conference in Washington D.C. that while GM and Chrysler may pay back some of the approximately $65 billion extended to them, the U.S. probably won't ever see full payback.
"Tens of billions of dollars are likely to be lost on the automotive bailout," Barofsky said flatly.
General Motors Co.'s Buick division today released images and information for the 2011 Buick Regal and is openly billing the new-age Buick as a sport sedan.
Given the new Regal's origins with GM's second-generation global midsize chassis that was engineered by Adam Opel AG - the Germany-based European division GM just retrieved from the clutches of mega-supplier Magna and Russia's Sberbank - there might be reasonable credibility for the sport-sedan claim.
In addition to being based on the German-engineered Epsilon II architecture also used by the well-regarded new Opel Insignia (not to mention Buick's new LaCrosse sedan), the 2011 Regal also will be built in Germany at Opel's Russelsheim assembly plant.
The Regal's lines may be some of the crispest ever to be seen in a Buick showroom and GM is calling out the Acura TSX, Volkswagen Passat, Mazda6 and even the Volvo S60 as competitors. The Regal goes on sale in the second quarter next year - and in a significant sign of the times, only 4-cylinder power will be on offer.
The distractions for much of the year surrounding the Volkswagen Group's ownership tussle with Porsche AG didn't stop VW from achieving a significant global milestone: VW this month surpassed Toyota Motor Corp. as the world's largest vehicle manufacturer.
The United Kingdom's Guardian newspaper reports IHS Global Insight figures as indicating Volkswagen (now with Porsche included) production hit 4.4 million units for the year, easily shouldering by Toyota and its production of about 4 million units year-to-date.
Analysts have noted this event was not unpredictable; in the face of a global dropoff in demand, Toyota had made the decision to drastically curtail production in the early part of the year, a move that removed as much as 1 million units or more from Toyota production schedules.
Volkswagen, meanwhile, has been the beneficiary of large-scale stimulus efforts in China and many European countries trying to prop up flagging new-vehicle sales.
With luxury automakers taking a beating from the global recession and the geared-down "new" economy left in its wake, some are writing the epitaph for premium cars.
But in a meeting with the media this week, BMW North America LLC officials said that although the economic meltdown indeed has caused shifts in consumer thinking and "America has been changed by this recession," premium brands will continue to be a force in the U.S. market.
BMWNA president Jim O'Donnell said yesterday at the company's headquarters that "premium automakers will help shape the future of mobility" because high-end brands historically have been the first to develop and introduce new innovations.
And given the pressure for new solutions to the automobile's environmental impact, O'Donnell said, "It is our belief that the premium market - and the BMW Group as the leader of this segment - will continue to fill an important and necessary role of bringing innovation and technology to market to meet customer, social and regulatory needs and providing direction for the entire industry."
At Chrysler Group LLC's unveiling of its 5-year business plan at its headquarters in Auburn Hills, MI, today, CEO Sergio Marchionne laid to rest a few rumors about the new joining of Chrysler and Fiat S.p.A. One of them was the long-rumored ambition for Fiat to use the alliance to distribute its Alfa Romeo brand in Chrysler's U.S. dealerships.
There is no current plan to sell Alfas in Chrysler dealerships, said Marchionne. In wearing his Chrysler hat (he also is Fiat's CEO) Marchionne insisted that Alfa Romeo would have to "make a convincing case" about which Alfa Romeo models could be profitably exported to the U.S. and sold in Chrysler showrooms.
At a giant confab Wednesday to unveil its 5-year business plan, Chrysler Group LLC ended months of speculation by detailing how the Fiat 500 subcompact will be initially sold in the U.S.
The 500 - a runaway hit in Europe for Fiat S.p.A., Chrysler's new managing partner and 20-percent owner - will be sold, as a Fiat, in Chrysler dealerships starting late next year. Fiat will sell a North American version of the Fiat 500 Cabrio beginning in 2011 and the Fiat 500 Abarth in 2012.
But perhaps not all Chrysler dealerships. Sales of the 2-door 500 will be sold "mainly" at dealers in metro markets and who carry all Chrysler brands, said Peter Grady, Chrysler's vice president, network development and fleet.
The original Jeep -- the Jeep Wrangler -- will serve as the anchor of the brand, the brand's keeper Mike Manley told the 400 media, dealers and analysts attending the meeting at which Fiat is rolling out Chrysler's five-year plan.
Special models and new derivatives of the Wrangler, including a diesel version, will be offered. But the Wrangler, which continues with body on frame and solid front and rear axles. "The Wrangler is the ultimate expression of the brand," Manley said.
Jeep plans to revamp its current models and add new ones. By 2014, 80 percent of Jeeps will be new or significantly redone.
Fiat CEO Sergio Marchionne, in kicking off a six-hour business meeting outlining Chrysler's five-year plan, said Chrysler is in better financial shape than the media and outsiders suggest.
He said Chrysler has boosted its cash reserves by $1.7 billion from the $5.7 billion it had on June 10 when it emerged from Chapter 11 bankruptcy. He said at the end of September the automaker was profitable on an operating basis.
Massive cost reductions have been underestimated, he said, adding the company is downright "cheap" in its spending.
Chrysler Group LLC is underway right now with what is one of the year's most crucial auto-industry events: the company's plan moving forward for the next five years under management by Italy's Fiat S.p.A.
Chrysler is revealing new models it's working on, how it plans to fix and improve its existing products and improve its quality and business practices.
AutoObserver is in attendance and editors will be Twittering with highlights throughout the day-long overview.
Ralph Gilles, Chrysler's head of design and CEO of the Dodge division, laid out the division's future product plan at the marathon meeting outlining Chrysler's five-year plan under Fiat.
The biggest news is that Dodge finally will introduce a new B-segment hatch in the vein of the highly acclaimed Dodge Hornet concept shown some time ago, and Dodge will debut a completely new seven-passenger crossover based on Fiat technology.
General Motor board of directors, meeting in Detroit Tuesday, has voted that the automaker keep its European subsidiary Adam Opel AG in light of the improving environment for GM and the importance of Opel and Vauxhall, its British entity, to its global strategy, the automaker said in a statement issued late Tuesday.
GM, however, will initiate a restructuring of its European operations "in earnest," it said.
GM has a tentative agreement to sell Opel to Canadian-Austrian parts supplier Magna International, with the financial backing of Russia's Sberbank.
In exchange for becoming the operating partner and 20-percent owner of Chrysler Group LLC, Fiat S.p.A. said it would work to incorporate its new efficiency-enhancing powertrain technologies into Chrysler-badged vehicles and other models the two companies may introduce into the U.S. market.
Fiat recently launched one such technology, showing the media the first car powered by an engine using the company's innovative "Multiair" variable-valve timing system.
The technology seems genuinely impressive - it cuts fuel consumption by a solid 10 percent while increasing power and torque by a similar amount - but the car in which the first Multiair 4-cylinder engines are launched, the Alfa Romeo Mito ("me-too") subcompact, are markedly more expensive than most Americans would consider reasonable for such a small car.
The mid-level Mito, with a 133-horsepower Multiair 4-cylinder that most closely matches the power U.S. buyers expect from the 4-cylinder engine in a compact car, costs about £14,645 in the United Kingdom, auto-enthusiast magazine Car reports. In straight exchange-rate conversion, that amounts to about $24,000.
Less than 1 percent of the vehicles bought under General Motors' 60-day moneyback guarantee program have been returned.
Susan Docherty, GM's vice president of U.S. sales, said 142,000 vehicles have been sold under the program with 449 customers opting for the guarantee instead of the $500 cash rebate. Of those, four have returned their vehicles and gotten their money back on a Chevrolet Equinox, Chevrolet Tahoe, Chevrolet Malibu and Chevrolet Silverado. In total, 49 customers, including the four that already have returned their vehicles, are in the process of a return or exchange, she said.
Ford Motor Co. set a new record in Popular Mechanics Automotive Excellence Awards by winning more categories in a single year than any other automaker in the history of the awards.
Ford vehicles winning 2010 awards, which recognize the best in design, execution and technology, were the: 2010 Ford Mustang Shelby GT500, Best Performance; 2010 Ford Transit Connect; Best Workhorse; and the 2010 Ford F-150 SVT Raptor, Best Off-Road Ability.
"Ford's sweep of three categories in this year's awards speaks to the onslaught of great products coming from Dearborn," said Ben Stewart, automotive editor, Popular Mechanics.
Ford Motor Co. secured its position as the only Detroit automaker with world-class reliability, according to Consumer Reports magazine's 2009 Annual Car Reliability Survey.
Of 51 Ford, Mercury, and Lincoln models, 46 had average or better reliability, the magazine said in an announcement made Tuesday at the Automotive Press Association in Detroit.
"Ford's sustained production of vehicles that are as dependable -- or better than -- some of the industry's best dispels the notion that only Japanese manufacturers make reliable cars," the magazine said.
Fisker Automotive, the new-age startup company aiming to sell an expensive and high-tech extended-range electric vehicle next year, confirmed it has purchased an assembly plant in Wilmington, DE, from Motors Liquidation Co., the entity holding the assets of the former General Motors Co.
Fisker said in a media release the company paid $18 million for the plant, which most recently build the Pontiac Solstice and Saturn Sky 2-seat sportscars.
That's a great price to acquire what is essentially a fully functional auto assembly plant with a relatively new paint shop, one of the costliest areas of investment in any auto-assembly operation.
Fisker said it will invest another $175 million to retool the plant to produce a still-under-development plug-in hybrid sedan targeted to sell for considerably less than the $87,000 Karma extended-range electric sport sedan Fisker plans to begin selling next year.
The new compensation plan for General Motors Co. CEO Fritz Henderson made the headlines last week after particulars of the ruling from Kenneth Feinberg, the Obama administration's "pay czar" became known. But there were many other interesting details in that report - including the fact that of the 20 highest-paid GM executives whose pay packages had to be approved by Feinberg, only five work on the operational side of GM.
Fifteen of the 20 executives whose compensation packages came under review have nothing to do with GM's automaking business - they are employees of Promark Global Advisors, GM's asset-management company that until this past March was known as General Motors Asset Management.
Ford could run short of Ford Edge and Ford Flex models due to a labor dispute at a supplier plant in India that has forced the automaker to close its Oakville, Ontario, assembly plant.
Ford closed the Canadian plant, which makes the Edge and Flex as well as the Lincoln MKX and newly-launched Flex-based MKT, due to a shortage of transmissions, the result of a labor dispute a supplier plant, Rico Auto Industries, in India. The strike turned violent Sunday night after a plant employee died during a protest.
The "old" General Motors Corp. - now known by the name Motors Liquidation Co. - could be on the verge of completing a deal that would bring in some revenue to pay back some of the former GM's creditors, according to a report over the weekend from the Wall Street Journal.
Motors Liquidation reportedly is ready to sell its assembly plant in Wilmington, Del., to Irvine, Calif., new-tech automaker Fisker Automotive Inc. The company, whose CEO is Henrik Fisker, a former designer for BMW AG, has made headlines in recent years with his Fisker Karma extended-range electric vehicle, a slinky, nearly-$90,000 sport sedan set to go on sale next year. The Karma will be produced in Finland under contract with known low-volume vehicle assembler Valmet Automotive.
Anyone - or is it everyone at this point - hoping for an October finish for the saga of General Motors Co.'s sale of its Adam Opel AG European operations will have to wait at least a while longer.
In a blog at GM's website, John Smith, GM's group vice president of business development and the company's lead negotiator, said GM's deal to sell Opel to a consortium headed by Canada's Magna International Inc. and Russia's Sberbank will be on hold until at least early November.
The deal has won approval from the Opel Trust Board, but the European Union expressed concern about several details and their potential transnational effect on labor in various nations in which Opel operates.
The EU also "has been reviewing the Opel investor process and the circumstances surrounding the selection of Magna/Sberbank," Smith said in the blog. Some EU member nations have expressed skepticism that GM's decision to sell to the Magna/Sberbank group was based solely on business metrics.
Three Tata Nanos reportedly have caught fire due to a short circuit in a steering column switch, the Times of India reports.
As a result, India's Tata Motors, which bills the Nano as the world's cheapest car, has called two of them back for repairs and has ordered a pre-delivery audi of the Nanos' electrical circuits before customer delivery.
The Nano went on sale earlier this year with customer deliveries beginning in late spring.
The refrain from General Motors Co.'s Buick division is that it wants to entice younger buyers to forget about Buick's car-for-the-Medicare-crowd reputation. But Buick announced today it's nonetheless resurrecting an old name for its next midsize car: the model will be called the Regal.
"The Regal name has played a very important role in Buick's history for many years and continues to be one of the top Buick nameplates recalled by consumers, even though it's been out of the market for the past six years," Buick said today in a release.
In August, GM showed the media a midsize-sedan concept car but did not indicate the car's name, although it was speculated the Regal nameplate - still used in China - could be revived for the U.S. market.
Despair surely reigns in the electronics divisions of several major automotive suppliers with this week's unveiling of an Apple iPhone-based aftermarket system to remotely start your vehicle as well as perform all the functions of a traditional keyless remote.
After all, the electronics boffins have themselves already nonsensically eliminated the need for actual keys, so now Apple and the aftermarket are taking the exercise one step further, eliminating the need for OEM remote key fobs.
Directed Electronics said this week it has an iPhone app that will allow a vehicle properly wired with its Viper SmartStart hardware to be started remotely. The app also enables conventional door and trunk lock/unlock features and "panic" alarm operation.
And unlike current OEM and aftermarket remote starters, the company says the Viper SmartStart system allows the vehicle to be remotely started from almost any distance, provided both iPhone and vehicle have access to cellular signal.
A faulty switch to disengage cruise control will cost Ford Motor Co. yet again in what has been a wide-ranging safety problem.
In the latest recall that encompasses some 4.5 million vehicles - mostly trucks - Ford will repair the switch that can overheat and cause underhood fires. This round brings the number of vehicles recalled to fix the switch to 16 million. It is the largest recall ever in the U.S.
The vehicle lines affected by the latest recall - the Detroit Free Press said it now is the eighth recall for the switch - are:
1992-2003 Ford Ranger 1992-2003 Econoline vans 1995-2003 Ford Windstar 2000-2003 Ford Excursion 1993, 1997 and 1999-2003 F-Series Super Duty with diesel engines 1994 F53 motorhomes
The National Highway Transportation Safety Admin. opened an investigation for the latest recall in June 2008 after reports of engine fires in Windstar minivans.
China is on track to surpass the U.S. in vehicle sales this year. Automakers reported selling more than 1 million vehicles in September - a first - according to the China Association of Automobile Manufacturers.
China's total vehicle sales are expected to close the year at 12 million, as much as 2 million above what analysts project for the U.S.
Ford reportedly has reached a tentative agreement with the United Auto Workers union similar to one negotiated with General Motors earlier this year.
The proposed agreement would freeze entry-level wages, implement a no-strike clause and pay a bonus to workers for agreeing to new concessions, sources have told the Wall Street Journal.
The agreement now goes to the union's national council delegates, who will decide if it should go to members for a vote.
General Motors, as expected, announced Friday it had signed an agreement with China's Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. Friday to sell Hummer.
The deal is subject to approvals by U.S. regulatory agencies and Chinese authorities. Tengzhong acquires ownership of the Hummer brand, trademark and trade names, as well as specific intellectual property license rights necessary to manufacturer vehicles. Tengzhong also assumes the existing dealer agreements.
General Motors wasted no time in naming a new sales chief.
Susan Docherty, who was heading Buick-Pontiac-GMC, will become GM's vice president of U.S. sales, replacing Mark LaNeve, whose departure from the automaker was announced Wednesday morning.
"Susan will bring a wealth of experience from previous marketing and sales assignments," GM CEO Fritz Henderson said in a statement. "I have confidence that she will bring a new perspective to the position as she guides a new, lean and customer-focused dealer network."
Although Ford Motor Co. has been trying to offload its money-losing Volvo Cars unit for some time, it appeared there had been only one entity serious about buying Volvo: China's Geely Automotive Holdings.
But the Financial Times reports today that a consortium headed by former Ford executive Michael Dingman and that also includes Shamel Rushwin, another executive for both Ford and Chrysler, has emerged as a bidder for Volvo.
There are few reported details about a proposal from Dingman's Crown consortium to acquire Volvo, but the deal likely may vary significantly from that proposed by Geely, which, among other facets, is said to include a provision that Ford retain responsibility for certain pension liabilities and that Ford retain a share of Volvo.
Chrysler Group LLC is losing two more high-level executives after a board meeting last week conducted by 20-percent owner and managing partner Fiat S.p.A. The company is casting the moves as part of its ongoing efforts to reorganize Chrysler management in an orientation more focused on the company's individual Chrysler, Dodge and Jeep brands.
Leaving the company are Gary Fong, president and CEO of the Chrysler brand who also was Chrysler's chief sales executive, and Michael Accavitti, a longtime product-oriented Chrysler executive who most recently had been appointed by Fiat as president and CEO of the Dodge brand.
In a statement, Chrysler also said it is reorganizing the Dodge brand, creating separate groups for Dodge cars and trucks.
The move is just the latest in a series of executive shuffles that has left many long-serving Chrysler executives on the outside looking in, as Fiat often harvests its own ranks for replacements.
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.
Detroit media reports that General Motors will announce Wednesday or Thursday it has completed the sale of its Saturn division to Penske Automotive Group, though no one from either GM or Penske will confirm the report.
GM and the Penske group have been negotiating the deal since June. In an exclusive interview with Edmunds' AutoObserver.comthen, Roger Penske laid out his vision for Saturn as a different kind of global motors -- one that sells GM-made models but also sells vehicles made in other parts of the world by offshore manufacturers.
The United Kingdom is the latest European nation to expand and extend its Cash for Clunkers program, which in the U.S. has expired with no plans to revive.
The U.K. government announced an extension and additional funding for as many as another 100,000 cars for its so-called "Cash for Bangers" program.
Automakers in Europe fear, with Cash for Clunkers programs ended or winding down, car sales will return to double-digit declines. Some countries are considering bringing the programs back or extending current ones, as the U.K. has done.
Microsoft Corp. said Ford is among a handful of companies that will upgrade to the new Windows 7 operating system and help the company promote the new system that goes on sale next month.
Sounds like "you scratch my back and I'll scratch yours" deal.
Ford uses Microsoft's Sync communications and music system in many of its vehicles, and Microsoft, including its famous founder Bill Gates personally, has helped Ford promote it.
Toyota's luxury division Lexus is among initial marketers to advertise on CNN's iPhone and iPod Touch application, making its debut Tuesday.
CNN followed the Wall Street Journal in charging for news on such mobile devices. The one-time fee is $1.99 for the news feeds that can be personalized by location or topic and shared by email, Twitter and Facebook, CNN said. Content includes articles, videos, photos and user-generated material. CNN said it has taken almost six months to develop the app. The Wall Street Journal begins charging $2 a week for its mobile app beginning in October.
With General Motors Co.'s India subsidiary this week inking an electric-vehicle development deal with an Indian EV specialist and once hybrid- and electric-averse European automakers unfurling serious EV plays, accelerating OEM and battery-making initiatives seem to demonstrate EVs are going to be more than a fad.
So much so that next year's Detroit auto show - in the home of the industry responsible for bringing internal-combustion personal transport to the masses - will prominently feature a first-ever, multi-maker display promoting electric cars.
Addressing its glaring problem of an empty product pipeline, Chrysler will do a speedy makeover of at least five models by mid-2011, along with introducing the 2011 Jeep Grand Cherokee and redesigned Chrysler 300 that year, as part of a five-year plan reportedly being submitted to the automaker's board by Fiat CEO Sergio Marchionne on Friday.
The Detroit Free Press reports Marchionne wants makeovers accomplished within a quick 18 months on the Chrysler Town & Country and Dodge Caravan minivans; the Dodge Caliber, Jeep Compass and Jeep Patriot compact crossovers; and the Chrysler PT Cruiser, which Fiat revived from the to-be-killed list.
The Fiat 500 minicar will be built at the Toluca, Mexico, plant that also assembles the PT Cruiser, for a mid-2011 U.S. introduction, the newspaper reported.
General Motors' Buick division launches a major advertising campaign with the first ads starring the new LaCrosse and premiering the new tagline -- "The New Class of World Class."
The Buick ad, airing for the first time in prime time Monday, is one of the promised brand- and model-specific follow-ups to come on the heels of a GM corporate marketing program that was heavily promoted last week.
A bill to invest $2.9 billion for auto-industry research into technologies to improve fuel efficiency was passed in the U.S. House of Representatives this week in a move that could further help bolster the staggered U.S. auto industry, particularly the Detroit-based automakers.
The money is to be spent over five years, starting with $550 million next year, an increase of more than $100 million over funding that already was approved by the Obama Administration to hasten the pace of fuel-saving technologies and alternative fuels such as hydrogen and electricity.
The U.S. Department of Transportation and the Environmental Protection Agency Tuesday announced they are jointly proposing new nationwide standards for both fuel economy and carbon-dioxide emissions targeted for a timeframe between 2012 and 2016.
The interagency effort set a fleet-average target of 35 miles per gallon for light vehicles, increasing five percent each year to achieve the 35-mpg total by 2016. They also propose a "greenhouse gas" (carbon-dioxide) limit of 250 grams per mile by 2016.
Average folks, at least those paying attention at all, are likely to ask, "Didn't that happen already?"
President Obama is visiting General Motors' assembly plant in Lordstown, Ohio, Tuesday, giving a speech on jobs, the economy and, of course, the mention of health care to a packed house of auto executives, local dignitaries and United Auto Worker union employees.
GM CEO Fritz Henderson will host the president at the more than four-decades-old plant that now builds the Chevrolet Cobalt and will soon convert to building GM's all-important Chevrolet Cruze.
The trip marks the president's first one to an auto plant since the federal government's bailout of GM and Chrysler from bankruptcy. He visited several auto manufacturing facilities during his campaign.
AutoObserver's senior contributing editor Bill Visnic will be chronicling the president's visit to the plant on Twitter @autoobserver.
Riding high on a sales wave in North America, Hyundai could open an assembly plant in Canada in the next few years.
Steve Kelleher, president and chief executive officer of Hyundai Auto Canada, told the Toronto Star in an interview that Hyundai will need to take "a hard look" at opening an assembly plant in Canada if it continues hitting ambitious sales targets during the next few years.
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.
"Don't worry about the profit margin -- you'll make it up on volume."
Anyone familiar with any kind of retailing has heard that platitude, but General Motors Co. dealers will be the latest to find out if it works.
GM reportedly plans to chop a half-percent from dealer margins as the company -- goaded by new chairman Ed Whitacre -- scrambles to regain slipping share and revenue.
General Motors will launch a marketing campaign it calls "May the Best Car Win" that offers buyers of Buick, Cadillac, Chevrolet and GMC vehicles a 60-day money-back guarantee.
The promotion will kick off with an advertising blitz on Sunday during morning news shows and NFL football games. The ads will feature GM's chairman Edward Whitacre.
Though GM has not provided advanced viewing of the advertisements, there's a hint of deja vu from Chrysler's first emergence from bankruptcy when then-Chairman Lee Iacocca challenged American consumers to buy Chrysler cars with the tag line: "If you find a better car, buy it."
An independent panel overseeing the government's loans to General Motors and Chrysler has revealed that U.S. taxpayers probably won't be entirely paid back by the two just-out-of-bankruptcy automakers.
The Congressional Oversight Panel (COP), in its latest report issued Tuesday, said it is highly unlikely that the government will recover all of the $81 billion in loans to the auto industry. The panel did not say exactly how much in total it expected to recover.
The report did say Chrysler is "highly unlikely" to repay $5.4 billion of its $15 billion in government loans, and GM probably will pay back little of the initial $19.4 billion of its total $50 billion in government loans. In a statement, GM insisted it intended to pay back the loans.
Get a good look at the Porsche Cayenne SUV. In the wake of the bizarre German corporate soap opera whose end will soon see the absorption of Porsche AG into the mighty Volkswagen Group, the controversial Cayenne -- and even more astoundingly, the just-released Panamera four-door sport sedan -- has no future after VW takes over.
Such is the report from Britain's Car magazine, which says a "massive U-turn in Porsche's product plan" resulting from the bitter VW boardroom triumph means Porsche will be forced to discontinue the Cayenne and Panamera after their product cycles are complete around seven years from now.
It's leaving the General Motors Co. empire by the end of this year, but GM nonetheless issued the press material detailing Saab's next-generation 9-5 flagship, a car that goes on sale next year after Saab effectively is no longer under GM management. The car will be unveiled at the Frankfurt motor show next month.
Although there are well-executed Saab-esque design details, including a feint at the Saab-signature wraparound windshield and an angular sideglass/C-pillar junction reminiscent of the 900 Series, the bodysides betray a hint of Buickness that shouldn't surprise: the all-new 9-5 is built around the GM global midsize architecture on which rides the new Buick LaCrosse, not to mention Europe's well-received Opel/Vauxhall Insignia.
Leveraging the global midsize underpinnings means the new 9-5 is markedly larger than the current flagship, some five inches longer in wheelbase and nearly seven inches longer overall.
Toyota Motor Corp. announced late Thursday it will end its production contract at the New United Motor Manufacturing Inc. assembly plant in Fremont, CA, next March, shifting assembly of NUMMI-manufactured Tacoma midsize pickups to Toyota's recently built plant in San Antonio, TX.
The NUMMI facility was a joint-venture operation between Toyota and the General Motors Co., but in June, just prior to its Chapter 11 bankruptcy reorganization, GM said it was vacating the NUMMI operation and leaving its ownership in the venture with the "old" GM.
GM did not see a future for NUMMI and shortly thereafter Toyota also began to send signals it, too, might abandon the venture that began in 1984. GM ended production of the Pontiac Vibe (a badged variant of the Toyota Matrix) on Aug. 17.
Watch out for a world of sales pain now that the federal Cash for Clunkers rebate program is over, as data from Edmunds.com projects a serious decline in industry sales for the coming weeks.
Edmunds.com's proprietary tracking of purchase intent from visitors to its Web site -- which has proven to be a reliable leading indicator of actual near-term industry sales -- has plunged some 50 percent from its peak during the Cash for Clunkers program.
It is an effect analysts had warned was likely.
"Cash for Clunkers distorted the market in a way that benefited the industry for four weeks -- now the payback begins," said Edmunds.com CEO Jeremy Anwyl.
Just days after the General Motors Co. board of directors countered the company's management and ordered a reexamination of the favored bid to take majority ownership of GM's Adam Opel AG and most of the company's associated European operations, reports from Europe say GM may announce within a matter of days -- or even hours -- the course it will take with Opel.
GM's abrupt reversal in the months-long process that seemed to be proceeding toward selling Opel to a consortium led by Canadian auto supplier Magna International Inc. riled sensitive German politicians and the country's powerful labor unions, all of whom had made it clear they preferred the Magna bid -- which seeks to minimize German job losses -- to the rival offer from Belgium's RHJ International.
GM's about-face last week, in which it announced the board effectively told company leaders to reconsider GM's options, seemingly signaled to the German interests that GM now might be trying to hedge in light of improving auto-industry and economic conditions on both sides of the Atlantic.
With the news-dominating Cash for Clunkers program now officially finished, the auto industry can get back to normal: battling U.S. and global recessions and trying to figure out who's going to own half of the former divisions of General Motors Co.
The last month's news was devoted almost exclusively to Cash for Clunkers, so anybody could be forgiven for not being caught up on what's been happening with the sales of GM's Hummer, Saturn, Saab Automobiles and Adam Opel AG divisions. Here's the updated scorecard:
Opel
Suddenly, Opel is GM's problem child.
The company's board last week slapped down the bid from a consortium led by Canadian mega-supplier Magna International Inc., a deal that was favored by GM's management and had the vital blessing of the German government, which was to provide billions in assistance in exchange for Magna's vow to minimize job losses.
No, they can't sell any more new vehicles under the month-long Cash for Clunkers federal rebate program, but dealers swamped by last-minute customers -- and stymied by government computer systems unable to keep up with the deluge -- now have until noon on Tuesday morning to submit their claims for reimbursement.
It is an extension that was widely expected after a weekend of frenzied Clunkers-driven new vehicle sales -- at least for dealers and dealer groups that still were participating.
Many dealers had shut down Cash for Clunkers deals for fear the overloaded government application pipeline would make it impossible to determine if there was funding still available, leaving dealers on the hook for possibly paying the consumer rebates out of their own pockets.
The newly reconstituted board of directors for General Motors Co. might turn out to be a little more "activist" than originally presumed.
The Wall Street Journal reported late last week the new GM board has rejected the bid of management's favored suitor for the company's Adam Opel AG automaking unit.
A consortium headed by Canadian auto supplier Magna International Inc. has been vying with RHJ International, a Belgian investment firm, for control of Opel, but GM leaders and much of the German government have long been reported to favor Magna, which for one thing resolved to minimize job losses in Germany, the main base of operations for Opel and the other portions of GM's European operations up for sale.
Over the weekend, Reuters reported German Chancellor Angela Merkel as expressing a need for urgency in the situation.
The Wall Street Journal reported Friday afternoon that Chrysler Group LLC Deputy Chief Executive Jim Press will leave the company sometime before the end of the year.
It had been widely speculated that the ever-optimistic Press -- who served as Chrysler president under majority ownership of Cerberus Capital Management LLC and prior to the company's Chapter 11 bankruptcy -- would leave not long after the company's post-Chapter 11 restructuring and resulting management control by Italy's Fiat S.p.A.
Press has been serving as special advisor to Fiat and Chrysler CEO Sergio Marchionne.
Marchionne already has been at work reorganizing Chrysler's executive ranks in a structure based on better supporting the company's Chrysler, Dodge and Jeep brands.
Neither Chrysler or Press would confirm the news. Press, prior to his Chrysler stint a longtime, high-ranking executive at Toyota Motor Corp., told the WSJ, "I don't think anything has been released about management changes."
The fun, sometimes frivolous but often helpful mobile-device applications just keep proliferating and BMW AG's Mini USA -- often an innovator in clever methods to bond with its customers -- is introducing an "app" for roadside assistance, an idea that is likely to be copied by other automakers and third-party road-service providers.
Available to Mini owners with iPhone or Blackberry devices, the Mini Road Assist app enables a one-button connect with roadside-assistance services and, most importantly, uses the devices' built-in location identification software to relay the exact position of the disabled vehicle.
Although many onboard services such as General Motors Corp.'s well-known OnStar offer the same capabilities, they often aren't much use if locked out of the vehicle or the battery is dead.
The much-examined Cash for Clunkers new-vehicle rebate program ends August 24 and the armchair quarterbacking has already started. Most evaluations of the program will focus on the government's inability to quickly process applications and reimburse dealers for the $3,500 or $4,500 rebates given to buyers.
The backlog of payments certainly affected dealer cashflow, particularly for smaller operations.
But according to new data from Edmunds.com, dealers (and automakers, ultimately) did enjoy more than a few offsetting perks: Besides hiking sales volumes, the Cash for Clunkers program, along with the resulting accelerated reduction of new-vehicle inventories, was responsible for immediately jacking up average transaction prices, margins -- and dealer profit.
The story of the summer in the auto industry has been the federal government's Cash for Clunkers rebate program. And it's set to close next Monday.
Even two automaker bankruptcies to start the summer seem to have taken a back seat to the furiously popular and always controversial Car Allowance Rebate System (CARS), the official name of the Cash for Clunker program devised by the Obama administration to simultaneously stimulate the auto industry and its dealers and better the environment by removing gas-guzzling and emissions-belching old vehicles (as old as 1984, anyway) from the road.
The program has proven immensely popular with consumers and dealers at first were enraptured, too. But the Cash for Clunkers story quickly evolved into one of bureaucratic snafus and dealer acrimony as the Department of Transportation, administrator of the CARS program, proved unable to quickly and efficiently process the tidal wave of applications in order to promptly reimburse dealers for the $3,500 or $4,500 rebates extended to new-vehicle-buying consumers.
No auto dealer is complaining about the extra customer traffic the Cash for Clunkers program has generated in the past weeks. But although the federal program has been a solid lifeline in what surely would have been a dead summer for sales, the Car Allowance Rebate System (CARS) is amounting to the ultimate in profitless prosperity for too many dealers.
Complicating the situation, data from Edmunds.com indicates that with the program nearing its conclusion - just announced to be Monday, Aug. 24 - Cash for Clunkers transactions are slowing markedly from highs of 40 percent or more of all new-vehicle sales to less than one in five new-car deals.
Despite the CARS program's undeniable invigoration of previously tomblike showrooms, angry and dispirited dealers across the nation said they had no choice but to give up on Cash for Clunkers participation. The government was so slow in repaying the $3,500 or $4,500 rebates they literally couldn't afford to keep selling new vehicles.
The government foot-dragging was so endangering the final days of the CARS program that General Motors Co., Toyota Motor Corp., Honda Motor Co. Ltd. and others stepped in today to say they will provide cash advances on Cash for Clunkers transactions so dealers don't have to wait for the feds to pay up.
Barely a week after showing it and many other pending new models and concept vehicles to the media and a select group of the public, General Motors Co. is pulling the plug on a Buick variant of the Chevrolet Equinox/GMC Terrain compact crossover the company only first confirmed weeks ago it would build.
The company announced the new Buick crossover just last month during a high-profile industry conference at which the recently-emerged-from-bankruptcy GM seemingly sought to generate some positive news. So the company said Buick -- the brand's minders still flush with the comparative success of the Enclave full-size crossover -- would try again to catch lightning in a bottle with its own model based on GM's global compact crossover architecture.
Better still, Buick would launch a plug-in hybrid variant in 2011, allowing GM to get some green mileage from the investment it made in the plug-in technology originally intended for the Saturn Vue version of this crossover family.
All that was before the media and GM's hand-picked "civilian" viewers got a look at the still-unnamed Buick, though.
General Motors Co. confirmed it is boosting production of several models to restock depleted inventories of vehicles popular in the ongoing Cash for Clunkers rebate program and to address "consumer reaction" to new 2010 models such as the Chevrolet Camaro, Cadillac SRX and CTS Sport Wagon and the Buick LaCrosse.
GM says it will add production shifts at the Lordstown, Ohio, plant that produces the Chevrolet Cobalt, a popular choice for buyers replacing a "clunker," and at its CAMI facility in Ingersoll, Ontario, Canada, that assembles the new 2010 versions of the Chevrolet Equinox and GMC Terrain compact crossovers. The company also will add overtime and reinstate previously scheduled downtime at other plants.
In all, GM said it expects to add about 60,000 units of increased production -- the bulk coming in the fourth quarter, when many of the new models will be well along in their launch cycles.
The buying furor instigated by the federal Cash for Clunkers program has peaked and is slipping quickly, according to a new analysis from Edmunds.com, whose data researchers also say it could be mere weeks before auto-industry sales are back to pre-Clunkers levels.
Studying new-vehicle purchase intent, Edmunds.com analysts say figures are down 31 percent from the peak roughly one week after the Car Allowance Rebate System (CARS), the official name of Cash for Clunkers, began on July 24. Edmunds analysts have determined purchase intent is a reliable indicator of actual sales that can be expected to come in the following 90 days.
It appears that like many other wide-scope auto-industry incentive programs of the past, the steam may be running out of Cash for Clunkers after several weeks of furious buying by consumers initially unsure of whether the federal funding would run dry.
General Motors Co. and Honda Motor Co. Ltd. are the latest automakers to spool up U.S. vehicle production to answer inventories depleted by the ongoing "Cash for Clunkers" new-vehicle rebate program.
GM will add one day shift at the Orion Township, Michigan, plant that assembles the Chevrolet Malibu midsize sedan; the plant currently is on a four-day work week. Also ramping up with the addition of a two-shift day will be the automaker's plant in Lordstown, Ohio, that produces the Chevrolet Cobalt compact cars, Dow Jones reported.
GM is expected to announce more production increases as it adjusts a third-quarter output that had been drastically reduced from year-ago levels. In extending the Car Allowance Rebate System, the official name of Cash for Clunkers, from the original $1 billion in funding to a total of $3 billion, the program has put unanticipated pressure on the stock of many of the most popular vehicles purchased by those trading clunkers.
WARREN, MI - Bryan Nesbitt has been on the job as Cadillac's new general manager less than a month, and at a recent media event here, the former vice president of General Motors Co.'s North American design isn't afraid to admit he's still getting up to speed on direct product issues for the company's premium-vehicle division.
One, he told AutoObserver, is diesel engines.
GM product-development higher-ups are adamant that diesels are too costly for the U.S. market. They require complex and expensive exhaust aftertreatment ("onboard chemical factories" is one term repeatedly employed) to comply with the world's toughest diesel-emissions standards - and U.S. diesel fuel is not taxed advantageously, as it is in Europe, where diesels have captured more than half of the region's light-vehicle market.
That includes an outsized presence in Europe's premium sector, where diesel has made distinct inroads because of its combination of efficiency and primary technical advantage: huge torque output, the perfect attribute for engines used in heavy and large luxury models.
The final leg in the convoluted journey Volkswagen AG and Porsche AG have undertaken in the past several years is nearing as VW, once the takeover target of miniscule Porsche, prepares to instead take a controlling interest in Porsche and merge the two companies.
VW reportedly plans to drum up nearly $6 billion to obtain a 42-percent portion of Porsche AG and all of the company's holding company, Porsche Automobil Holding SE. Meanwhile, there's an estimated $1 billion coming from Qatar Holding LLC that will give it 10 percent of Porsche and most of the options Porsche holds in VW stock. The deal is expected to be complete by the end of the year.
The complex arrangement would make the Qatar Emirate the third-largest VW shareholder, behind the Porsche and Piech families probable eventual stake of a reported 35 to 39 percent and the German state of Lower Saxony's approximate 21 percent. The companies had not elaborated, however, on exactly what Qatar Holding's VW stake might be.
A controversial U.S. investor and part owner of Koenigsegg Automotive AB - the exotic sportscar maker planning to buy Saab Automobile from the "old" General Motors Corp - is out of the picture as the Koenigsegg Group progresses with its plan to acquire Saab.
Swedish business media report that Mark Bishop, who made a name and a fortune as an investor in securitizing sub-prime mortgages, sold his holding in Koenigsegg to another investor. Tiny Koenigsegg is hoping to acquire Saab by the end of this quarter.
Trying to insure it doesn't run dry of two of the best-selling new vehicles in the still-humming Cash for Clunkers rebate program, Ford Motor Co. confirmed today a modest production increase for the third quarter, from 485,000 units to 495,000 units.
Ford's 2 percent production hike over its previous plan will come from extra shifts and more overtime at the Kansas City, MO, plant that produces the Escape compact crossover and the Wayne, MI, factory that assembles the Focus compact.
Data from Edmunds.com indicates the Focus and the Escape ranked as the No.1 and No.2 new vehicles bought to replace "clunkers" in the government-funded Car Allowance Rebate System (CARS) incentive program that runs through the end of this month.
Hyundai made it official at the Pebble Beach Concours d'Elegance Thursday that it, indeed, will bring its most premium luxury sedan, badged as the Equus in Korea, to the U.S. next year.
Edmunds' Inside Line, AutoObserver's sibling Web site, earlier reported its arrival and posted the first test ride of the vehicle.
The Equus would be the automaker's next step to move the brand more upscale after this year's launch of the Genesis. The Equus is intended to compete with BMW, Mercedes-Benz and Lexus.
General Motors CEO Fritz Henderson said Tuesday morning that he sees "positive effect" of the Cash for Clunkers program continuing through August and September and, as a result, GM may ramp up production.
Henderson said at a press conference and Web cast that the automaker's new executive committee meeting Tuesday will decide if production should be increased as the government's Car Allowance Rebate System (CARS) has depleted inventories of many of GM's models.
Edmunds.com forecasts Cash for Clunkers is running out of steam, though the slight overall improvement in the economy may boost vehicle sales in the second half.
General Motors CEO Fritz Henderson announced Tuesday morning that the upcoming
Chevrolet Volt will achieve the equivalent of 230 miles per gallon in city driving, based on new Environmental Protection Agency (EPA) mileage ratings.
Though he didn't give an exact number, Henderson said the combined city-highway mileage will be in the triple digits. The Volt, which has an onboard gasoline engine that recharges the battery -- also rechargeable via a household electrical outlet -- is designed to travel 40 miles on pure electric power. That's the distance most Americans commute in a day.
GM had hinted about the mileage rating through an anonymous ad campaign featuring a 230 mpg with a smiley-faced electrical outlet in place of the 0.
Beginning Tuesday, General Motors dealers in California can begin listing their inventories of
some Buick, Chevrolet, GMC or Pontiac vehicles on online shopping site, eBay.com, in an effort to draw more consumer eyeballs to the automaker's cars and generate sales leads for dealers. GM and eBay executives detailed their partnershipMonday morning, after GM CEO Fritz Henderson hinted about it amonth ago when the automaker emerged from Chapter 11 bankruptcy. Henderson used it as an example of new ways the new GM would go to market.
The eBay venture is hardly groundbreaking. Already, about 30,000 dealers nationwide list their vehicles -- mostly used but some new -- on the site. In fact, GM was the first to coordinate with eBay to list dealer inventories of Certified Pre-owned Vehicles on eBay.
The newest GM-eBay venture is the first "virtual showroom online" by eBay with an auto manufacturer, said eBay Motors Vice President Rob Chesney in a conference call with media Monday. While exclusive to GM now, similar ventures with other automakers are possible, he suggested.
Cash for Clunkers, the federal stimulus program that's put money in car buyers' pockets and
depleted automakers' once-bloated inventories may end up responsible for producing at least one regrettable "loser": charities that depend on donated used vehicles for funding or direct transfer to the needy.
Some charitable organizations that accept vehicle donations and either sell them for cash or turn over the vehicles directly to new low-income owners are seeing vehicles that normally would come their way instead being used for the $3,500 or $4,500 vouchers Cash for Clunkers provides toward new-vehicle purchases.
Magna International Inc. is embroiled in a bidding war with Belgium's RHJ International SA to take over General Motors Co.'s European operations, but Aurora, Ontario, Canada's Magna has another hassle in the form of its balance sheet: the company lost $205 million in the second quarter.
Magna's sales for the quarter slumped to $3.71 billion, a 45 percent drop, the company said.
With Cash for Clunkers phase I scorching through its $1-billion funding in what is projected to be two weeks or less, U.S. Senate Majority Leader Harry Reid said Wednesday evening a moderately controversial continuation of the Car Allowance Rebate System (CARS) will be approved by the Senate. The vote will inject an additional $2 billion that should see the program through to its Labor Day termination.
Barely noticed in the clamor over the Cash for Clunkers effect was that General Motors Co.
announced this week it is reviving its leasing business with a pilot program rolling out for vehicles in each of its four marketing divisions.
The revived leasing program is earmarked to last for just a month.
GM said that just a year ago, leasing accounted for about 17 percent of sales; the ratio has plummeted to around 1 percent thanks to a variety of industry and credit-market travails.
Toyota reported Tuesday it lost 77.8 billion yen -- the equivalent of $819 million (U.S.) in the
most recent quarter. The loss was smallerthan analysts had forecasted, suggesting the worst is over and that Toyota's full-year losses will be less than previously expected.
Toyota said it now expects to lose 450 billion yen ($4.7 billion) for the fiscal year that ends March 31, 2010. Previously, Toyota expected to lose 550 billion yen ($5.8 billion) for the year.
In a conference call with media and analysts Wednesday morning, Toyota Managing Officer Takuo Sasaki noted a dramatic drop in vehicle sales volume. "However, the introduction of demand stimulating measures by various governments, including Japan, has begun to trigger a revival in some regions," he said.
Subaru said it will report its July sales soared 30 percent in July compared with a year ago,
setting an all-time monthly sales record.
On Monday, automakers report their July sales figures, which are expected to be stronger than forecasted at the start of the month due to the Cash for Clunkers program.
Subaru, however, has been weathering the downturn the best of any automaker.
The nation's new and too-popular Cash for Clunkers program has been a boon for the nation's newest car buyers -- but the Car Allowance Rebate System's execution has not been one of the federal government's shining moments.
The big problems centered on the inadequacy of the CARS hotline to help consumers and dealers, and of course the program's major issue: a dramatic and almost comedic underestimation of initial consumer response that drained the $1-billion CARS piggy bank in what is projected to be little more than a week.
Now come reports of another CARS foible: a lack of oversight to ensure the engines of the traded-in clunkers are destroyed, as the program requires.
Chrysler Group LLC said Friday it will continue production of the PT Cruiser compact wagon, although the company announced more than 18 months ago the car would be discontinued.
Chrysler restarted production in mid-June at the Toluca, Mexico, assembly plant that builds the PT Cruiser and the Dodge Journey crossover. It was one of seven Chrysler plants to resume production after an extended temporary shutdown as Chrysler dealt with ongoing inventory difficulties and its eventual bankruptcy and change in ownership.
Ford Motor Co. will announce Monday a year-over-year sales increase for July, thanks to the
government's cash for clunkers program. It will be Ford's first year-to-year sales increase since November 2007.
The Car Allowance Rebate System (CARS) is expected cash for clunkers pushed the Seasonally Adjusted Sales Rate (SAAR) to well above 11 million vehicles sold to as high as 13 million, the highest level this year by a long shot.
July's SAAR will be 11 million to 12 million "for sure," Ford's sales chief George Pipas told AutoObserver.com in a phone interview Sunday. "The increase is a nice proof point of the progress Ford has made but being the first of the Big Six automakers to post an increase may be a sign that the consumer is a little more optimistic."
The U.S. House of Representatives voted Friday afternoon for a Cash for Clunkers extension funded by an additional $2 billion through Sept. 30.
The measure, which passed on a 316-109 bipartisan vote, will be funded from a renewable energy loan guarantee included in the economic stimulus package.
The measure goes to the Senate next week where it faces more challenges than the fast-track bill did in the House. Some senators already have said they'll oppose it; others said they will insist it contain more stringent fuel-economy standards for the vehicles bought under the Cash for Clunker plan.
A gas gauge showing how much money remains in the Cash for Clunkers program has
disappeared from the Car Allowance Rebate System's (CARS) Web Site
.
Clearly, the gauge has not kept up with real-time tracking of the flurry of transactions.
As of Thursday, the gauge showed $779 million remaining for clunker trades. In reality, the program is quickly running through its $1-billion allocation.
As of Friday morning, the U.S. government still had not publicly announced the suspension
of the Cash for Clunkers program due to it running out of its $1-billion allocation, but lobbying already has begun for additional funding.
The White House reportedly is working with Congress behind the scenes to try to extend funding for the Car Allowance Rebate System (CARS) at the same time that lawmakers are preparing to recess forthe month of August, Reuters
reported.
In the meantime, dealers are in limbo. They will be left holding the bag if the program runs out of money and they aren't reimbursed for clunker trades. Some have chosen to suspend Cash for Clunker trades.
Ad agencies are scurrying to pull back clunker ads. And automakers, many of which are running low on the popular vehicles bought through the program, are pondering how to plan factory production schedules.
The Department of Transportation (DOT) reportedly is suspending the Cash for Clunkers program, as it is running out of its $1 billion allocation.
The DOT, which administers the program, hadn't confirmed publicly the move but the agency had informed Congressmen and dealer groups of the action. What's not clear is if it will end completely because it is, indeed, out of money, as dealers and dealer organizations suspect, or will be suspended as the agency calculates how close the program is to the $1-billion mark.
From the start, the program called for a November 1 expiration or the depletion of the $1 billion in funding. It became clear the program would run out long before November 1, but no one expected it to run out of money in the first week.
The price of crude oil dropped six percent Wednesday to around $66.50 per barrel, oil's biggest
slide in almost three months -- a decline that flies in the face of historic trends that typically see oil prices jump in the summer travel months.
But drivers clearly are curtailing travel as the economies in most developed nations continue to drag, and their reduced gasoline and diesel use is driving down the price of oil and ballooning crude oil inventories.
The U.S. Energy Information Agency said the nation's crude-oil stock is 18 percent higher than at the same time last year, a summer that will be long remembered for volatile spikes in gasoline and diesel-fuel prices. Even inventories of gasoline are bloated, despite uncharacteristically low prices.
Using the often-played bargaining chip of federal highway funding, the U.S. Senate is pushing
a bill for a nationwide ban on text messaging while driving.
Thirteen states and the District of Columbia already have such laws, but the bill proposes a two-year time frame for the remaining states to adopt similar laws and formulate a penalty structure.
Virginia Tech's Transportation Institute this week released the "duh" results of a study showing commercial truck drivers were 23 times more likely to crash or experience a near-miss accident if texting.
The U.S. Transportation Department will decide by the end of today how to handle a glitch that caused
vehicles oncequalified as clunkersunder theCar Allowance Rebate System (CARS) program but then deemed ineligible whenfuel economy ratings were udpated on the eve of the program's launch.
Edmunds.com brought the glitch to the government's and public's attention after visitors to the car-shopping Web site raised it. Some consumers reported to Edmunds that their vehicles qualified as a clunker on Thursday, but when they double-checked or were at the dealership, they discovered they no longer were eligible.
Canadian auto-parts supplier Magna International reportedly has increased the amount of
upfront capital it will inject into its offer for General Motors' Opel. No word on whether its competitor RHJ International has countered.
Unnamed government sources have told various news outlets that Magna is now offering 350 million euros ($700 million U.S.) of its own capital immediately and 150 million euros in a convertible bond.
Toyota Motor Corp. held onto the No. 1 position for global auto sales in the first six months
of this year despite being outpaced by General Motors in the second quarter. GM lost its more than seven-decade world reign to Toyota in 2008.
Toyota reported Tuesday it sold 3.56 million vehicles worldwide in the first half that ended June 30; GM sold 3.55 million. In the April-June quarter, GM sold 1.94 million vehicles, due to strong sales in China, compared with Toyota's 1.80 million.
The qualifications for the Cash for Clunkers program, officially known as the Car Allowance
Rebate System (CARS
) that launched Monday, apparently are a moving target, Edmunds.com
has learned.
The U.S. Environmental Protection Agency (EPA) confirmed that last Friday -- the day the rules for Cash for Clunkers were released and dealer sign-up opened -- the agency "refreshed" its combined mileage ratings. It is the combined mileage ratings of the vehicle being traded in as a clunker and of the new vehicle being purchased that determine if the deal qualifies under the program that gives a $3,500 or $4,500 voucher toward the purchase of a new vehicle.
In some cases, the "refreshed" ratings show the potential trade-ins with a higher mileage rating than previously indicated by the EPA, and make them ineligible for the Cash for Clunkers program.
Italian automaker Fiat, the new owner of Chrysler, reported Wednesdsay that it lost the equivalent
of $238 million in the second quarter, due to dramatic decline in vehicle sales, especially for trucks and commercial vehicles, from a year ago, when it turned a profit.
"The global economic crisis continued to have a significantly negative impact on demand levels for all the group's business, but with signs of improvement in certain markets compared with Q1 levels," Fiat said in a statement.
Still, Fiat said results improved from the first quarter, with losses narrowing from quarter to quarter. And company executives said they expect improvement through the remainder of the year.
DETROIT --
There were plenty of offsetting numbers in General Motors Corp.'s second-quarter report on global sales, reflecting the heavy transitions GM -- and the broad industry -- is absorbing.
But GM executives say the overall trends appear positive, despite the company's brief bankruptcy and the quarter's 1.94 million sales representing a drop of 15.4 percent from the second quarter last year.
AUBURN HILLS, Michigan -- Chrysler Group LLC will offer incentives up to $4,500 -- the
maximum amount of vouchers issued to qualified buyers under the government's Cash for Clunkers
program -- to all consumers.
Beginning Thursday and ending August 31, Chrysler will offer $4,500 cash rebates or zero-percent financing for 72 months through GMAC Financial Services on most 2009 models.
Customers who take advantage of the government Cash for Clunkers program, officially known as Car Allowance Rebate Systems (CARS), also qualify for the rebates and financing in addition to receiving credit for the vouchers, which range from $3,500 to $4,500. That means the Cash for Clunkers customer could chop $9,000 off his or her new car purchase.
Former Ford CEO Jacques "Jac" Nasser has reemerged, this time as a top contender to head the
world's largest mining company, BHP Billiton. The job is described by Australia's Business Day
as "one of corporate Australia's most prized positions."
Born in Lebanon and raised and educated in Australia, Nasser currently is a non-executive director of BHP. The Australian business press reports he and one other candidate are being interviewed this week to replace BHP CEO Don Argus, who retires in November.
A decision on how to settle the contentious Volkswagen-Porsche ownership battle may not
occur on Thursday, as many had anticipated, and instead be delayed until the end of the month.
The supervisory boards of the two German automakers were set to meet separately in Thursday, presumably to work out terms of a possible merger. But German media reports suggest a decision may not be forthcoming after all.
The new General Motors Co. said it has received three final offers for its Opel division in
Germany, without naming the bidders. GM had set aJuly 20 deadline for final bids.
And then comes the tricky part. GM will examine the bids, present them to the various European government entities who are being asked to help finance the deal and, with their counsel, accept one of the bids.
As the Financial Times notes, however, the best deal businesswise for GM may be at odds with the offer that is in the best interest of the governments, mainly the German government.
DETROIT - The "new" General Motors, which emerged from bankruptcy just last Friday, had a busy first week
The automaker announced a series of executive retirements, departures and re-assignments, likely the first of many as it sheds about a third of its executive ranks. The top three executives, it was revealed in government filings, will retain their previous pay. Unretired executive Bob Lutz had his first misstep in the communications role he now heads. And the automaker got back to the business of building, promoting and selling vehicles
The U.S. House of Representatives approved a plan to restore franchise agreements with dealerships canceled by General Motors and Chrysler during their bankruptcy proceedings.
The automakers as well as President Obama and his task force opposed the provision in a spending bill that is part of the 1020 fiscal year budget beginning Oct. 1 and was passed 219 to 208 Thursday.
One of the bright spots in a bleak inventory of sales numbers for the new General Motors Co. has been the 2010 Camaro. GM executives in recent weeks have pointed to the new-age Camaro as the example of how GM can connect expressive cars with customers willing to pay full price.
Luckily for GM, the car has a receptive audience -- after just three months on the market, the Camaro made a major statement by outselling the Ford Mustang in June -- because the Camaro's launch has been anything but smooth, largely due to quality-control issues.
Canadian auto supplier Magna International and Belgian financial investor RHJ International
SA are have the inside track for the purchase of General Motors' Opel division as the automaker reviews all final bids in Germany early next week.
GM Executive Nick Reilly said in a Bloomberg Television interview from his Shanghai headquarters Friday that that a decision may come next week and Magna and RHJ are "probably the front runners" for Opel.
French auto workers make North American ones look like wimps.
The Associated Press reports workers laid off from a company that makes auto parts from French automakers Renault and PSA Peugeot-Citroen were huddling around gas canisters tied to an electrical cable Thursday, threatening to blow up a factory in protest of cost-cutting during the economic downturn.
Daimler AG appears to be pulling along its largest single investor for a ride with the company's recent investment into industry-disruptive electric-car maker Tesla Motors Inc. Daimler reportedly is selling a portion of its 10-percent holding in Tesla to Abu Dhabi's Aabar Investments PJSC.
The deal will give Aabar about 4 percent of Tesla, Bloomberg
reports.
Daimler said it will use Tesla-developed lithium-ion battery packs in a trial fleet of 1,000 of Daimler's smart cars converted to run entirely on electricity.
DETROIT -- The new General Motors will be closer to the customer and will employ high-tech as well as low-tech ways to do so.
Next week, the new GM will launch a "Tell Fritz" Web site that allows consumers and others to send ideas, questions and concerns directly to GM CEO Fritz Henderson.
"I will personally review and respond to some of these every day and will encourage other executives to participate as well," Henderson said at a Friday news conference.
Assembly plants for the new General Motors Co. will start to fire up again next week after the newly reconstituted GM left Chapter 11 bankruptcy today and the company completes its traditional two-week shutdown, said president and CEO Fritz Henderson.
The new GM, after leaving many of its plants and other operations with the cast-off assets of the "old" company, should begin to "run our plants on a stable basis going into the second half of the year," Henderson said in a press conference today to announce GM's emergence from bankruptcy and to detail other organizational changes for the new company.
How the company will be organized is important, but the immediate concern is to sell new vehicles in a U.S. auto market that stubbornly refuses to break a Seasonally Adjusted Annual Rate of sales in excess of 10 million units -- the industry sales volume GM continues to say it needs to at least break even selling vehicles in the U.S.
DETROIT -- General Motors' Bob Lutz will stay on with the new version of the automaker as head of not only product development but also GM's brands, marketing, advertising and communications.
Earlier, Lutz, 77, had announced plans to be an advisor through the end of the year when he would retire entirely. He turned over his day-to-day duties as head of global product development to Tom Stephens on April 1.
In his new role, Lutz will report directly to GM CEO Fritz Henderson and will be part of the executive committee. Lutz will work directly with Stephens and Ed Welburn, vice president of design.
DETROIT -- The world was introduced to the "new" General Motors company Friday, one thatis largely owned by U.S. taxpayers and will be focused oncustomers, cars and culture.
"Going forward, the new General Motors is fully committed to listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions," GM CEO Fritz Henderson said at a Friday morning press conference.
"Our goal is to build more of the cars, trucks and crossovers that customers want, and to get them to market faster than ever before," Henderson said.
NEW YORK -- A U.S. bankruptcy judge has cleared the way for General Motors to leave Chapter 11 by approving the sale of some of the automaker's assets, including the Buick, Cadillac, Chevrolet and GMC divisions, to a new, largely government-owned company.
Judge Robert Gerber of the U.S. bankruptcy court in New York ordered the approval of asset sale, despite the filing of 11th-hour appeals. GM will close the sale Friday morning and hold a press conference immediately after to provide details.
Judge Robert Gerber wrote in his ruling that allowing the sale was in the public's best interest, by saving jobs and health-care coverage for hundreds of thousands of employees and retirees globally as well as the tax base of communities. "If GM were to have to liquidate, the injury to the public would be staggering," he said.
DETROIT -- Auto supplier Lear Corp., as expected, filed for Chapter 11 bankruptcy protection
Tuesday.
Burdened by debt and a sharp decline in car sales, Lear, the world's second-largest maker of seats and seat components, already has laid out a proposed deal with creditors to restructure its $3.6 billion debt. Lear intends to emerge from bankruptcy within a couple months.
General Motors is seriously considering an offer for its Opel unit in Europe from Chinese
automaker Beijing Automotive as talks with Canadian auto supplier Magna International and the German government continue.
BAIC made a non-binding offer for Opel this week that requires less government help, cuts fewer jobs and provides for expansion of Opel in China more than an offer by Canadian auto supplier Magna International.
DETROIT -- A U.S. bankruptcy judgehas approved General Motors' plan to sell its "good" assets to a new company andleave "bad" assets with the old one, paving the way for the automaker to emerge from bankruptcy proceedings.
Late Sunday night, Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of substantially all of GM's to a new company to be called General Motors Company and to be funded by the U.S. Department of the Treasury.
In his ruling, Gerber wrote the sale is needed to avoid "immediate and irreparable harm" to GM.
Chrysler Group LLC announced it has finished naming the last of its nine-member board of directors, with the new (and still private, despite billions of dollars in government loans) company's first board meeting scheduled for July 29.
It may not come exactly on the Fourth of July, but the Obama administration is directly threatening some of its own fireworks -- the financial kind -- if the ever-quickening pace of General Motors Corp.'s bankruptcy procedure isn't concluded by July 10.
That's barely six weeks since the automaker filed for Chapter 11 bankruptcy protection on June 1.
Automakers expressed more optimism about the U.S. car market despite the fact that overall sales in June fell by 28 percent compared with a year ago, to 859,420 vehicles. That represents only a slight improvement in year-ago comparisons over results for the first five months of this year.
Jesse Toprak, executive director of Industry Analysis for Edmunds.com, characterized the month cautiously. "It means, if nothing else, that things are not getting any worse, although things are not getting that much better, either. There was a lot of volatility, but there were signs of life."
Toprak added that June was "probably the best retail-demand month of the year."
General Motors announceda 72-hour sale offering zero-interest financing for72 months on some 2009 and 2010 modelsto get the second half off to a quick start.
In addition, GM is promoting its 74 models eligible for the Cash for Clunkers program to kick in later this month.
Portugal said today it is preparing to install some 1,300 electric-vehicle recharging stations in the next two years as the country moves aggressively to gain energy independence.
The initiative's first phase encompasses installation of charging stations in 21 of the country's major cities and most densely populated and trafficked rural areas, reported the Associated Press. The stations will be located in parking areas, shopping malls and gas stations.
Portugal has almost no significant internal energy sources such as coal or petroleum, yet it says it now has renewable-energy sources to supply 43 percent of its electrical demand.
With the charging stations, the country is attempting to prod demand for affordable, mass-market electric vehicles projected to go on sale next year. By 2020, officials claim Portugal could have 180,000 EVs in use and 25,000 public charging sites.
Although it has for some time enjoyed a preferred-bidder status to buy Adam Opel AG and the European operations of General Motors Corp., the grip of Canada's Magna International may be slipping.
The Financial Times
reports GM is weighing a restructured offer from Belgian holding company RHJ International after detailed negotiations with Magna and its consortium partners became snarled by new conditions.
The Magna-led consortium includes Russia's second-largest automaker, GAZ, and the FT reports the group's offer to GM includes conditions that allow access to certain GM technologies, some of which GAZ seemingly intends to wield for Opel-based vehicles built in Russia.
First, tiny sports-carmaker Porsche SE ran a gambit to gain control of the world's second-largest automaker, Volkswagen Group.
Various industry and political pressures and the global economic crisis got in the way, though, and VW now is turning the tables as Porsche bows under the towering debt it ran up during nearly four years of acquiring VW stock.
Reuters reported from Europe today that Porsche rejected VW's latest offer to buy the sports-carmaker and continues to resist pressure from Germany's state of Lower Saxony -- formerly VW's largest stakeholder -- for the two companies to combine.
Hoping to mitigate legal speed bumps that might slow its sprint through Chapter 11 bankruptcy, the "new" General Motors Corp. will take responsibility for product-liability claims, even for vehicles produced and sold by the company prior to bankruptcy.
The Washington Post
reported the new GM will assume responsibility for all future product-liability claims, a point that raised the ire of some consumer groups and state Attorney's General when it became known part of the company's restructuring blueprint included a plan to shield the new company from any exposure to any liability claims on vehicles the company produced up to the point of its bankruptcy. The objectors said the legal maneuver to shield the restructured GM from such liens was improper.
DETROIT -- General Motors North America President Troy Clarke said the automaker has yet to find a model that is suitable to build at the GM-Toyota joint venture plant in California, New United Motor Manufacturing Inc.
GM will stop making the Pontiac Vibe at NUMMI in August as it winds down the entire Pontiac brand. The Vibe is based on the Toyota Corolla and Toyota Matrix.
"We've just not found a product that suitable for NUMMI," Clarke told reporters Friday in a conference call on GM's small car plans. "They've been great partners...and the dialogue continues."
DETROIT -- General Motors will announce later Friday that its future small car, likely the Chevrolet Spark, will be built at a Michigan plant and not plants in Spring Hill, Tennessee, or Janesville, Wisconsin.
GM President North America Troy Clarke will host a media conference call Friday afternoon to make the official announcement, although word already had leaked out by Thursday's evening news.
The Orion Township, Michigan, plant, located in the Detroit suburbs, assembles the Pontiac G6 sedan, which will be discontinued when the entire Pontiac division is eliminated at year-end. The plant then added production of the popular Chevrolet Malibu, which is also made at a Kansas plant.
WASHINGTON -- It's official. President Obama has signed the Cash for Clunkers legislature that provides a financial incentive to consumers who ditch their old gas guzzler for a new fuel-efficient model.
The author of the legislation, Ohio Democratic Rep. Betty Sutton, was quoted by the Cleveland Plain Dealer as saying the measure would "improve our environment and help shore up the jobs of millions of Americans who depend upon our auto and related industries for their livelihood."
Legendary Mazda Miata designer Tom Matano, who last week was revealed to be the design director for a start-up company that will assemble cars in Louisiana, provided only cryptic clues about the kind of vehicle to be produced and the more important, innovative business model to be employed.
Without giving away any secrets, Matano said in a phone interview with AutoObserver that the business model is more revolutionary than the car itself. But he promised a kinship between the buyer and the car, not identical but similar in spirit to that between the Miata and its owner.
WASHINGTON -- The U.S. government launched a Web site Monday to provide consumers
with information on the so-called Cash for Clunkers legislation passed last week.
Thesite, www.cars.gov
, explains how the Car Allowance Rebate System (CARS) program works, providesa list of frequently asked questions and the verbage of the law, links to the government's fuel economy ratings on vehicles
andallows consumers to sign up for updates.
The rules for the program have yet to be written, a process likely to take 30 days.
In news from Europe, German coachbuilder Karmann built its last convertible Monday -- a Mercedes-Benz CLK convertible -- Russia's AvtoVAZ is going for a government loan and troubled vanmaker LDV may end U.K. production depending on who buys it.
DETROIT -- The financial turbulence of the global auto industry has not hurt vehicle quality. Quite the opposite, according to new data released Monday by J.D. Power and Associates.
"Vehicle quality is better than it has ever been," Dave Sargent, J.D. Power's vice president of automotive research, told the Automotive Press Association here as he announced the results of the 2009 Initial Quality Study. The study measures defects reported by buyers in the first 90 days of ownership.
"There's a positive disconnect. There's no correlation between the financial side of the business and the production side," said Sargent. "Despite the turbulence on the business side and concern for the future of their own jobs, the people who design and build vehicles are getting on with their jobs and keeping their eye on the ball. That's remarkable."
Finally agreeing on legislation hoped to spur the nation's beaten-down auto sales and get some gas-guzzlers off the road, the Senate last night passed a version of the long-debated Cash for Clunkers bill that only needs President Obama's signature -- which he said will happen -- to become law.
Too long in coming and too limited in reach, the final bill, part of larger war-spending legislation, earmarks a $1 billion fund for owners of older, less-efficient models to trade in for new vehicles that use less fuel and emit less pollution. The program's official name is Consumer Assistance to Recycle and Save (CARS).
Owners of 1984 or newer vehicles with a combined fuel-economy rating of 18 mpg or less will get a voucher for $3,500 if the car they trade for gets at least 4 miles per gallon better than their clunker. The payday improves to $4,500 if the purchased vehicle delivers a combined rating of 10 mpg better than the traded vehicle.
Jeremy Anwyl, CEO of Edmunds.com, parent of AutoObserver, reckons the measure, expected to take about 30 days to implement and set to expire in November, might generate only about 250,000 new sales for struggling automakers and dealers -- a fraction of what originally was hoped and with a stimulus impact much less than seen in other nations that have adopted similar programs.
MONROE, La. -- Mystery solved. Or at least the players behind it.
Mazda Miata designer Tom Matano and Texas billionaire investor T. Boone Pickens are key figures behind acar plant being established in Louisiana to build environmentally friendly vehicles by a start-up company that has never beforebuilt cars.
V-Vehicle Co., of San Diego, is a start-up company being financed by California venture capitalists. Its CEO is Frank Varasano, a former executive vice president of Oracle Corp. who is described as the project's visionary.
Company chairman is Ray Lane of the California venture capital firm Kleiner, Perkins, Caufield & Byers, which has been extensively involved in environmentally friendly projects and companies, including Fisker Automotive. John Doerr, a managing partner with the California venture capital company, is a V-Vehicle board member. Former Vice President Al Gore recently joined the firm. Matano will direct design.
DETROIT -- Chrysler announced Wednesday it will resume vehicle production at seven of its
North American assembly plants starting theweek of June 29.
Chrysler closed all of its plants when it filed for Chapter 11 bankruptcy. Since then, it has re-started only one plant; the Detroit Conner Avenue plant that makes the Dodge Viper cranked up production on Monday.
WASHINGTON -- Cash for Clunkers legislation passed in the House on Tuesday by a narrower margin than many had expected and now goes to the Senate Wednesday where it faces opposition by some Republicans.
The House passed the Cash for Clunkers measure as part of a $106 billion wartime spending bill by a vote of 222 to 206.
Senate Republicans see Cash for Clunkers as more handouts for the auto industry.
After months of shopping it and years of unsuccessfully operating it, General Motors Corp. is selling its Saab Automobiles AB division to a tiny maker of exotic cars that will return Saab to its homeland of Sweden.
GM announced Tuesday it has a memorandum of understanding with Koenigsegg Group AB for the company to purchase Saab with the boost of a $600-million funding commitment from the European Investment Bank that is guaranteed by the Swedish government.
In a statement, GM also said it and Koenigsegg will provide "additional support" to fund Saab operations and program investments.
The so-called Cash for Clunkers legislation is up for a vote in the U.S. House of Representatives Tuesday with a Senate vote to follow shortly. If passed, the measure should be in effect sometime between July and September.
The legislation, which allows consumers to receive vouchers worth up to $4,500 on their trade-ins of clunkers for more fuel-efficient vehicles, may generate added sales of about 500,000 new vehicles this year, said Jesse Toprak, executive director of Industry Analysis for Edmunds.com, parent of AutoObserver.com.
Bo Andersson, who resigned last week as General Motors Corp.'s group vice president-global purchasing and supply chain, is taking a position with Russia's second-largest automaker, GAZ.
The company said Andersson, who served as GM's top procurement executive since 2001, will be the chief consultant to the Russain automaker's board of directors. GAZ is one partner in a group led by Canada's Magna International Inc. to take over GM's Adam Opel AG and most of the company's European operations, including the United Kingdom's Vauxhall.
The announcement of Andersson's departure came abruptly last week and it was speculated he could be leaving GM to be part of a new management team for GM's Saab unit, which GM also is in the process of selling and currently is under bankruptcy protection in Sweden. Andersson began his GM career as a Saab executive.
The Detroit News reported GAZ as saying there is the likelihood Andersson also will be elected to the GAZ board of directors when the company meets to elect a new board on June 29.
The political and financial jockeying has started among three General Motors Corp. assembly plants in competition to win the job of building a new generation of compact cars sometime around 2011.
And there is criticism GM -- currently in bankruptcy and earmarked to be more than 60 percent owned by the U.S. government -- is using the promise of the new work to coerce additional tax dollars from the three states hoping to prevail.
The company reportedly has been offered $44 million in long-term tax abatements from the township of Orion, Michigan, site of one of the three competing plants. Countering that are reports GM suggested to Tennessee governor Phil Bredesen the company might choose to build the small cars in the GM plant in Spring Hill -- if the state coughs up $200 million.
The Chrysler Group's bankruptcy is over, General Motors Corp.'s is accelerating like a Corvette and both companies are moving and losing significant personnel in sync.
None of this is unexpected, particularly as Chrysler is sure to be entertaining a certain amount of Fiat S.p.A executive injections now that Fiat is Chrysler's operational owner. And most insiders and industry analysts say GM still has plenty of management dead wood to burn and will see more voluntary separations, too.
GM still dealt a serious surprise when announcing Friday that purchasing chief Bo Andersson is leaving the company. Andersson was generally well-regarded in the supplier community, despite its usually tumultuous relationship with Detroit automakers for the past decade or more. Andersson had a reputation for being demanding and calculating but eminently fair in one of the toughest jobs in Detroit, if not the entire auto industry.
A GM spokesman told the paper the automaker has a "sufficient stock of 2009s" and starting up production in the near future is "possible, but not likely."
SEOUL - Kia plans to sell 20,000 units of its new Forte Koup vehicle this year and 35,000 in
2010 globally, the company revealed in regulatory documents.
The automaker also said it is considering building a midsize sedan at its soon-to-open U.S. plant in Georgia. The vehicle under consideration for the plant is codenamed VG, currently sold as the Kia Amanti.
TUSCALOOSA, Ala. - Daimler's Mercedes-Benz unit was sued by U.S. workers at its
Vance, Ala., plant,claiming they are owed overtime wages because the company made them cover breaks for managers, Bloomberg News
reports.
The plant builds Mercedes' SUVs, including the M-Class, R-Class and GL-Class, none of which have been fast sellers in this recessionary economy and with the waning popularity of sport utes.
WASHINGTON -- The Supreme Court cleared the way for the transfer of select Chrysler assets to Italy's Fiat.
The nation's highest court rejected a request from Indiana pension funds to delay the transfer until their objections were heard.
The court's ruling suggests the path will be cleared for General Motors, also in bankruptcy, to move fast on its sale of good assets to a new GM company, allowing it to emerge from bankruptcy quickly.
The Chrysler-Fiat alliance had been put temporarily on hold by Supreme Court Justice Ruth Bader Ginsburg Monday. But, as predicted by legal experts, that hold was lifted quickly as the court refused to hear the case brought by the pension funds.
DETROIT -- General Motors, which last week filed for Chapter 11 bankruptcy, is extending summer shutdowns at seven plants.
The automaker is adding up to four weeks to temporary shutdowns at plants in: Detroit, Lansing and Orion Township, Mich.; Spring Hill, Tenn.; Shreveport, La.; and Oshawa, Ontario, Canada.
GM said the extended closures are to lower inventories of unsold vehicles.
WASHINGTON - The U.S. House has approved the "cash for clunkers" bill, aimed at boosting slumping car sales and replace old vehicles on the roads with more cleaner, more fuel-efficient ones.
The House bill, approved with a vote of 298 to 119, allows consumers to turn in their vehicles for vouchers worth up to $4,500 voucher toward more fuel-efficient ones.
Nevertheless, as the House bill is constructed trying to address the environment as well as sales, it's impact will be less than it could be, according to an analysis by Edmunds.com.
"A program intended to stimulate car sales should target people in the market for a car, but this program does not," said Edmunds.com CEO Jeremy Anwyl. "The only people who qualify are those willing to take no more than $4,500 for their current car and immediately buy a new one - quite a narrow profile."
NEW YORK - U.S. Judge Arthur Gonzalez, who is overseeing the Chrysler bankruptcy proceedings, ruled Chrysler can, indeed, terminate the franchises of 789 dealers.
Gonzalez issued the order late Tuesday afternoon that the Chrysler, Dodge and Jeep dealerships designated by Chrysler to be terminated at midnight can no longer act as authorized dealers, effective immediately.
The ruling comes as now surprise as bankruptcy law superscedes state franchise laws. The rejected dealers had made a last-ditch effort to plead their case.
DETROIT -- Edward E. Whitacre, Jr., former chairman and CEO of AT&T Inc., will become chairman of the new General Motors that emerges from bankruptcy later this summer, the automaker announced Tuesday morning.
GM's interim chairman Kent Kresa will continue in his post until the launch of the new GM.
WASHINGTON -- The U.S. Supreme Court has put on hold Chrysler's proposed deal to be
taken over by Italy's Fiat. The move pushes forward Chrysler'semergence from Chapter 11 bankruptcy and puts the Fiat deal, which expires June 15, at risk.
It also calls into question if General Motors, which followed Chrysler into bankruptcy, might face similar roadblocks.
Associate Justice Ruth Bader Ginsburg of the nation's highest court ruled Chrysler cannot yet transfer most of its assets to Fiat until more information is gathered and a hearing held on the subject.
Monday marked another historic day in the General Motors saga.
The automaker, which last Monday filed for Chapter 11 bankruptcy, has been removed from the Dow Jones Industrial Average after more than 80 years as an index component.
GM will be replaced by technology firm Cisco Systems. Banking giant Citigroup also is being dropped, replaced by Insurer Travelers.
DETROIT -- General Motors announced Monday it will stop making the medium-duty
Chevrolet Kodiak and GMC TopKick trucks July 31 as it has found no buyer for the operations.
The trucks are built at a GM plant in Flint, Michigan, which also builds the Chevrolet Silverado and GMC Sierra pickups.
The factory employs about 2,100 people, with most of its production in pickups. Last year it made more than 22,000 medium-duty trucks for GM and Isuzu.
Tension mounted over the weekend as investors in Chrysler LLC asked the U.S. Supreme
Court to consider their appeal of the sale of Chrysler's assets for Fiat S.p.A.
Given past history, it was unlikely the Supreme Court would further delay the decision of a New York appeals court that approved the sale. But the three objecting constituencies -- investment funds located in Indiana, including ones for state police and teachers -- submitted an emergency request that Supreme Court Justice Ruth Bader Ginsberg will consider, the Associated Press reported.
It was expected Justice Ginsberg would decide on the merits of the emergency appeal Monday.
DETROIT -- Roger Penske's dealership group doesn't hold a single Saturn franchise, but now he's offered to buy from General Motors the whole kit and caboodle.
Penske's vision, as he laid it out in an exclusive interview with Edmunds' AutoObserver.com Friday shortly after GM and the Penske Group announced they had made a deal for Saturn, is twofold: to sell GM-made models in Saturn showrooms while shopping the globe for other vehicles to sell, eventually convincing the offshore manufacturers of those vehicles to make them in the United States.
WASHINGTON -- General Motors CEO Fritz Henderson and Chrysler President Jim Press found themselves on the hot seat yet again in Congress Wednesday as they testified that it is essential to cut thousands of dealers in order to survive.
And once again, much as Detroit Three executives were at last fall's hearings for federal loans, the executives were grilled and skewered by members of Congress. Dealers being put out of business and dealer association executives chimed in as well.
Barely 48 hours into its new era as a bankrupt company, General Motorsexecutives hustled to backtrack on a provocative statement from its chief financial officer that also was tinged with an arrogance that could damage the company's need to appear contrite before customers and politicians.
GM CFO Ray Young told the media that thanks to its now-bankrupt status, GM technically is a private company -- and as such is not obligated to make available the same depth of corporate financial information as are public corporations.
General Motors Corp. confirmed yesterday it has a memorandum of understanding to sell its Hummer brand and assets to China's Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd a privately held company that makes heavy-duty industrial equipment.
In a statement, GM said Tengzhong intends to retain Hummer's current production capabilities (a GM assembly plant in Shreveport, Louisiana, that also builds GM's midsize pickup trucks -- the Chevrolet Colorado and GMC Canyon) and management team. GM said the deal could save 3,000 U.S. jobs.
With its once-ballooned inventories shrinking to more bearable levles - and projected to get uncomfortably low for at least a couple of models - Chrysler will restart at least some of the assembly plants in its currently-idled manufacturing system by the end of the month.
As an aside while speaking with reporters about Chrysler's May sales results, Steve Landry, Chrysler's executive vice president - North American sales, service and parts, said the company will soon decide which operations to restart, and of those facilities, "the majority of the plants will come up by the last week of June."
Following nearly four years of wallowing in Chapter 11 bankruptcy protection, automotive super-supplier Delphi Corp. now has a substantive plan to emerge - curiously enough, just as its "inventor" and largest and closest customer, General Motors Corp., begins its own bankruptcy proceedings.
Delphi says it will sell most of its assets to private-equity firm Platinum Equity LLC, with a GM "affiliate" purchasing some of Delphi's parts-making operations, according to a report in the Wall Street Journal.
DETROIT - It's far too premature to break out the champagne and even too early to finally call the absolute bottom of one of the worst auto sales slumps in decades. But May sales reports from auto manufacturers in the U.S. hinted the worst just may be over.
"We saw glimmers of hope in May sales reports," said Jesse Toprak, executive director of Industry Analysis for Edmunds.com, parent of AutoObserver.com.
General Motorsmay stop building cars at a factory it owns with Toyota in California, known as NUMMI, following
the Detroit-based carmaker's bankruptcy filing Monday, Bloomberg News
reports.
The only GM product the plant builds is the Toyota Corolla/Matrix-based Pontiac Vibe, which will be eliminated as the automaker closes down the Pontiac brand.
The plant also builds the Toyota Corolla and Toyota Tacoma.
DETROIT -- General Motors announced it has signed an agreement to sell Hummer, though it hasn't yet revealed who the buyer is or how much GM will receive for the SUV company.
GM said it expects to close the deal by the end of September, pending various approvals. The sale of Hummer will save 3,000 U.S. jobs in manufacturing, engineering and at Hummer dealerships, GM said.
The arrangement includes the new buyer contracting vehicle manufacturing and business services during the transition. GM's Shreveport, Louisiana, plant continues to contract assemble the H3 and H3T through at least 2010.
DETROIT -- President Obama, in a White House press conference Monday, said General Motors' filing for Chapter 11 bankruptcy "marks the end of an old GM and the beginning of a new GM."
The president, recalling the famous quote of former GM CEO and U.S. Defense Secretary Charlie Wilson in the 1950s, that "we'll be able to say again what's good for General Motors is good for America."
And in a statement less than an hour later, GM president and CEO Fritz Henderson called the action a "defining moment in the history of GM."
GM, which only last year celebrated its centennial, made history Monday by filing Chapter 11 bankruptcy protection from its creditors in the Southern District of New York in Manhattan. Henderson said the company expects the bankruptcy to be complete in 60 to 90 days.
DETROIT -- General Motors will close or idle 14 manufacturing plants and three service and parts operations as part of its bankruptcy filing.
That brings GM's U.S. assembly, powertrain and stamping facilities from 47 in 2008 to 34 by year-end 2010 and 33 by 2012. GM will reopen an unnamed, now-idled, now-closed plant to build future small cars.
NEW YORK -- A judge in the same New York City bankruptcy court where General Motors
will file for Chapter 11 Monday has approved the sale of Chrysler assets to a group led by Italy's Fiat.
Judge Arthur Gonzalez approved the asset transfer saying, in his written opinion, it was the only alternative to "immediate liquidation" of Chrysler.
DETROIT -- Once the largest and one of the mightiest corporations on the planet, General Motors, which only last year celebrated its centennial,makes history Monday, June 1, as it files for bankruptcy.
The automaker is asking the Southern District of New York court to grant it protection from creditors under Chapter 11 of the U.S. bankruptcy court early, to approve the transfer of most of its global assets to a new GM entity and to allow GM's operations to continue operating uninterrupted during the process.
"Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused, and more cost-competitive company that, above all, can quickly generate winning bottom line results," GM President and CEO Fritz Henderson, who will hold a press briefing later Monday, said in a statement.
The timing of the announcement is curious, but General Motors Corp. said Friday it will build unnamed, next-generation small cars in the U.S. using a currently idled assembly plant and stamping facility and United Auto Workers union labor.
The small car GM plans to build on U.S. soil likely will be based on the Chevrolet Beat concept introduced at the 2007 New York Auto Show and paraded around other shows as well as Washington, D.C., events as GM's small, fuel-efficient car of the future.
Various press reports on Friday indicate Canada's Magna International had reached a tentative agreement for ownership of General Motors Corp.'s Adam Opel AG automaking unit and most of GM's European operations, including Britain's Vauxhall.
The move would fulfill a long-held ambition forMagna, known mostly as an auto-industry supplier, to evolve into an automaker, although the company's European unit, Magna Steyr, has a strong background of low-volume and niche-volume vehicle production for a variety of automakers, including Mercedes-Benz, BMW and Chrysler.
DETROIT -- A committee of General Motors' bondholders, after soundly rejecting an earlier debt-for-equity swap by the automaker, has accepted a sweetened deal backed by the U.S. government that paves the way for a quick pre-packaged bankruptcy a la Chrysler's, CNBC reported.
GM, in a statement issued Thursday morning, said the U.S. Treasury had proposed incentives for GM's unsecured bondholders that would allow GM to pursue a pre-packaged bankruptcy under section 363 of the U.S. bankruptcy code.
"Implementation of this proposal would result in a new GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success," the automaker said.
DETROIT -- Auto parts supplier Visteon Corp., as longanticipated it would,filed for Chapter 11 bankruptcy protection Thursday.
Visteon, one of the world's largest auto-parts suppliers, was created from Ford Motor Co. parts operations and employs 31,000 people in 27 countries.
Visteon follows in the footsteps of Delphi Corp., formed from General Motors' parts operations. Delphi has been in Chapter 11 bankruptcy for three and a half years.
Like all automotive suppliers, Visteon has struggled with the dramatic fall-off in vehicle sales, which have prompted its automaker customers to slash production.
BERLIN -- The German government is pressing the bidders for Opel to add last-minute
sweeteners to their offers before officials select the preferred partner for General Motors' German subsidiary.
German Chancellor Angela Merkel's administration has been considering offers from Italy's Fiat, Canadian auto parts supplier Magna International and Belgium-based industrial holding RHJ International.
Chrysler is close to emerging from bankruptcy, well ahead of the 30 to 60 days the U.S.
government had promised when it entered April 30.
Chrysler was widely seen as the trial run for the even bigger and more complex Chapter 11 bankruptcy filing by General Motors, likely to come within days, if not hours.
A major step forward toward the end of Chrysler's bankruptcy comes Wednesday when federal bankruptcy Judge Arthur Gonzalez in New York considers a motion to sell most of Chrysler's assets to a new Chrysler under the control of Italy's Fiat.
The judge's expected approval would result in one of the biggest and fastest bankruptcy proceedings of its kind. Of course, Chrysler's bankruptcy -- as would be GM's -- would be unprecedented because of the intense involvement of the U.S. government, which has been criticized by business and some bankruptcy experts.
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.
General Motors has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever U.S. industrial bankruptcy by the end of this month, Reuters reports.
GM failed to gain anywhere near the 90 percent of bondholder support needed, sources told the newswire Tuesday. Bondholders have until midnight to make their final decision on the tender. As of midday Tuesday, the company had only "low-single-digit" interest from bondholders, one source said.
Reuters' sources said GM will likely file for bankruptcy some time after midnight Tuesday, but before June 1.
GM's bondholders are balking at the automaker's offer to reduce its $27 billion debt in exchange for a 10-percent stake in the restructured company, a stake smaller than that being given to the United Auto Workers union.
Indeed, the UAW told its representatives gathering in Detroit Tuesday that the union, through its retired employee health-care fund, would own 17.5 percent of GM. The union would receive the company stake in lieu of the full $20 billion GM owes the fund, though GM would still make some cash payments.
The U.S. Supreme Court rejected an appeal from DaimlerChrysler AG to overturn a $13.4
million punitive damages verdict for a family whose child died in a 2001 car accident in Tennessee.
The family sued DaimlerChrysler, which at the time owned Chrysler, alleging the automaker installed a faulty seat design in their Dodge Caravan, leading to the death of their son when the minivan was rear-ended by another vehicle.
General Motors could file for bankruptcy as early as this week even while it faces significant decisions by its unions, its bondholders and the German government involving its restructuring.
GM has until June 1 to reach concessions with its stakeholders and rid itself of some assets, under its agreement with the U.S. Treasury Department as part of its loan package.
Evidently seeking to up the ante in its gambit to take over General Motors Corp.'s Adam Opel AG, Fiat S.p.A. Chief Executive Sergio Marchionne said over the weekend that job losses from the takeover would be far fewer than press accounts have speculated, reported the Associated Press.
Marchionne told the AP that Fiat's plan for restructuring Opel and integrating it and most of GM's European operations into a mega-automaker consisting of Fiat, Opel and Chrysler (the assets of which Fiat expects to acquire through Chrysler's Chapter 11 bankruptcy) would mean less than 10,000 job losses in Europe - not the 18,000 some reports have suggested.
The United Auto Workers Union (UAW), under pressure to make concessions to General Motors Corp. as the company approaches a June 1 restructuring deadline, said today it will propose to its rank-and-file members key givebacks to help GM's long-term future, according to a report in the Wall Street Journal.
The union reportedly has agreed to allow GM to fund its remaining $20 billion obligation to a retiree health care plan with about $10 billion in cash and a 39 percent stake in the company -- whatever "company" may mean after June 1, when many industry experts and financial-community analysts expect GM still will declare Chapter 11 bankruptcy, despite the proposed concessions from the UAW.
Volkswagen broke off merger talks with Porsche. Volkswagen said it did not see Porsche, the smaller of the two with a heavy debt load but still VW's major shareholder, as ready for a merger.
The two companies had planned to meet Monday to develop merger plans after the financial crisis scrapped Porsche's plan to raise its stake in VW to
75 percent.
"We recognized at the end of the week that Porsche is lacking several fundamental conditions for the discussions," a VW spokesman told Reuters on Sunday. Porsche does not have a strategy for a possible integration of the two companies and has to sort out internally where it is headed, VW said.
LONDON -- As Cash for Clunkers legislation slowlyworks its way through the U.S. Congress, a similar scheme known as "Bangers for Cash" went into effect in the United Kingdom Monday, and already mediareports indicateincreased activity in dealer showrooms.
Intended to stimulate new car sales that are off 25 percent from last year, the British deal offers cash incentives to buyers of new cars who scrap their old model, known as bangers. The government and car manufacturers are sharing the cost of giving a discount of 2,000 pounds ($3,000) to qualified motorists.
The names are many and varied on the list of 789 dealers with whom Chrysler announced yesterday it will seek to terminate franchise agreements in its bankruptcy proceedings and prospective restructuring.
Dealerships large and small across the nation are earmarked for closure, but one of the more historically significant is Corwin Jeep Sales and Service Inc. in Hickory, Pennsylvania. Corwin long has laid claim to being the nation's oldest Jeep dealer.
Announcing this week a 2008 fiscal-year net loss of $2.32 billion, Nissan Motor Co. Ltd. President and CEO Carlos Ghosn said the company expects to lose about three-quarters that much again in fiscal 2009 -- so don't look for the Nissan-Renault alliance to get involved in the global auto industry's realignment of players and power.
"You will not see the (Nissan-Renault) alliance on the offensive," said Ghosn at a press conference in Japan to report Nissan's 2008 financial performance. He said Nissan's emphasis will be to return to positive cashflow, not pursue new partnerships with other automakers.
Fiat S.p.A. made it clear it wouldn't go through with its no-investment alliance with now-bankrupt Chrysler unless the American automaker was guaranteed to be the recipient of $6 billion (and probably more) in federal loan guarantees.
Now that Fiat is all but assured of favored-bidder status in the Chapter 11 bankruptcy auctioning of Chrysler's assets and the subsequent Fiat-Chrysler alliance is on track -- as are the federal billions earmarked for the "new" Chrysler -- Fiat's revealed some intriguing new financial sleight-of-hand: an end-run around executive-compensation limits imposed on companies that accept government handouts.
The U.S.'s "cash for clunkers" legislation earmarked to both prop up the auto industry and improve the environment is sputtering along without resolution, hampered by compromises forced by trying to attain two worthy but dissimilar goals.
The proposed used-vehicle scrappage legislation, it is hoped, will incentivize Americans to trade in older, less-efficient (and higher-polluting) models for a new vehicle, both stimulating the auto industry and the economy and also helping air quality. But muddy details, dual policy goals and squabbling constituencies have turned what seems like a good idea into a political quagmire.
"Because this program aims to achieve both environmental and industry goals, it falls short in both directions," said Jeremy Anwyl, CEO of Edmunds.com, parent of AutoObserver.
In a move signaling Ford Motor Co. is seeking new liquidity -- and further positioning itself apart from its Detroit competitors -- the company announced late Monday a new public offering of 300 million shares of common stock.
Ford made a point to say it will use some of the proceeds to pay cash into the United Auto Workers union retiree health-benefits fund, rather than the stock General Motors Corp. and Chrysler hope to use as the lion's share of their payments to the fund.
"Net proceeds to Ford from the offering are expected to be used for general corporate purposes, including to fund with cash, instead of stock, a portion of the payments the company is required to make to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust with the United Auto Workers," Ford said in a statement.
DETROIT -- With a June 1 government-imposed deadline for a new viability plan looming, General Motors CEO Fritz Henderson said, as he has before, that bankruptcy is more probable than it was.
"Given the objectives set out, it's more probable that we would need to accomplish this in bankruptcy," Henderson said in a conference call to update media on GM's restructuring progress. "The task we have in front of us is large. But there's still an opportunity to do this outside of court."
Tata Motors already wins the auto-sector's buzz-of-the-year award for the $2,000 Nano basicar. But the company's onto another good idea: variable delivery charges for its every-penny-counts personal-mobility revolution.
Automotive Business Review says Tata will charge a variable delivery charge based on where the vehicle is ordered in relation to the Nano's assembly plant in the northern-India town of Pantnagar. The report says a Nano delivered to Mumbai has a delivery charge 11 percent higher than a Nano delivered to New Delhi.
Toyota, still the world's largest automaker and once the world's most profitable one, posted a quarterly loss heftier than what analysts had forecasted and even bigger than the one beleaguered General Motors reported Thursday. The fourth-quarterred inkpulledToyota's full-year results into negative territory.
For the fourth quarter ended March 31, Toyota lost the equivalent of about $7 billion, one of the biggest quarterly losses recorded by a Japanese manufacturer and more than the $6 billion GM lost in the same quarter.
The fourth quarter pushed Toyota's full-year results to a loss of about $8.6 billion, its first loss in about six decades.
And Toyota, scrambling to cut costs and boost revenue, revealed Friday it expects an even larger loss in the current fiscal year because of another 1 million drop in sales for the year. Toyota's anticipated loss is bigger than analysts predicted.
DETROIT -- With a June 1 deadline for a finalized restructuring plan or bankruptcy filing looming, General Motors posted a $6-billion loss in the first quarter of 2009, about double what it lost in the same quarter a year ago but smaller than what analysts had forecasted.
Revenues this year were about half of last year's, reflecting the global economic downturn. GM spent $10.2 billion more than it earned.
"Our first-quarter results underscore the importance of executing GM's revised viability plan, which goes further and faster to lower our breakeven point," GM CEO and President Fritz Henderson said in the company's press statement issued Thursday morning.
Who knows if Chrysler really can emerge from Chapter 11 bankruptcyin the 30 to 60 days it hopes for, but the activity around the court proceedings have ratcheted upto warp speed.
On Friday, a day after Chrysler officially filed for Chapter 11 reorganization, photographers, like paparazzi snapping celebrities, shot pictures of lawyers and their assistants carrying document-loaded boxes through Manhattan streets to New York's Southern District court.
There, Judge Arthur Gonzalez, who oversaw the giant Enron and WorldCom bankruptcies, apparently cleared his docket for Chrysler's bankruptcy, the nation's fifth-largest ever bankruptcy.
MUMBAI -- Get ready to wait if you want to buy a Tata Nano, the Indian-built $2,000 four-door billed as "the world's cheapest car."
The Nano might be bargain-basement priced, but the waiting list to buy one is worthy of top-notch luxury nameplates like Ferrari, Aston Martin and Lamborghini. Expect delivery no sooner than early 2011 if you haven't already put your name down to buy one.
According to figures released by Tata Motors, up to 203,000 people have placed orders for a Nano. Deliveries begin in July, with the first allotment of 100,000 customers due to receive their car no later than the last quarter of 2010.
AUBURN HILLS, Mich. -- Former Chrysler CEO Tom LaSorda, most recently vice chairman and president, said Thursday in a conference call that he will retire. He gave no effective date for his retirement but said he will not stick around through Chrysler's Chapter 11 bankruptcy.
Current Chrysler CEO Robert Nardelli said he, too, would be leaving Chrysler after it emerges from bankruptcy to return as an advisor to private equity firm Cerberus Capital Management, which owned Chrysler before Thursday's deal with Italy's Fiat was announced.
Chrysler President and Vice Chairman Jim Press said he has had no discussions regarding his employment status.
Less than an hour after confirming it filed a petition for Chapter 11 bankruptcy, Chrysler LLC issued a press release with initial details of its proposed alliance with Italy's Fiat S.p.A.
Most intriguing is a statement (near the bottom of the release) saying most Chrysler manufacturing operations will shut down starting Monday -- and, although the language is vague, presumably not restart until the restructured company emerges from bankruptcy.
Also, Chief Executive Office Robert Nardelli will leave the company "following the emergence of the new [Chrysler] company from Chapter 11 and the completion of the alliance with Fiat."
DETROIT -- President Obama announced Thursday that Chrysler will combine with Italy's Fiat butis filing for Chapter 11 reorganization to get the job done.
In a White House press conference Thursday, President Obama chastised the banks and hedge funds that refused a government-sweetened deal to reduce Chrysler's debt owed to them.
Obama called them "speculators" who refused to make sacrifices when the workers, plant communities, major lenders and dealers did. As a result of debtholders holding out, the president said, Chrysler is filing for bankruptcy to "clear away remaining obligations so the company can get back on its feet onto a path of success."
DETROIT -- Chrysler has cleared another hurdle for getting a deal done with Italy's Fiat with the U.S. Treasury Department's announcement that an agreement had been reached with Chrysler's main creditors and Daimler AG had cut loose its stake in the automaker.
However, the creditors' agreement along with the necessary union contracts, also settled in recent days, does not mean Chrysler will avoid Chapter 11 bankruptcy.
DETROIT -- General Motors will eliminate or dispose of the Saturn, Saab and Hummer brands by the end of 2009 and Pontiac by no later than the end of 2010, under the automaker's most recent viability plan unveiled on Monday.
Eliminating the Pontiac division was a tough decision and "an intensely personal one" for many at the auto company because of its heritage, GM CEO Fritz Henderson said in a press conference Monday. "But it is one that needed to be taken."
Under the original plan, GM was to make Pontiac a niche brand as the marque is generally sold alongside Buick and GMC vehicles. "We concluded that we didn't have a strategy that would allow us to win with the Pontiac brand," said Henderson. "We didn't have the resources in the form of product or marketing muscle behind the brand."
He said GM will discontinue production of Pontiac vehicles "no later than 2010."
DETROIT -- General Motors CEO Fritz Henderson, calling this a "defining moment" for the automaker, laid out his "go faster, go deeper" restructuring plan that includes more cuts in jobs, plants, dealers and products, including elimination of the Pontiac brand.
The revised viability plan also includes a debt-for-equity swap for bondholders, the union retiree health-care fund and the U.S. taxpayer.
"We have an opportunity to restructure GM, and we're going to do it once," Henderson said in a press conference Monday morning.
Henderson said GM still prefers to restructure out of court but will do it in bankruptcy court if necessary -- a strong signal to unions, dealers and bondholders that they'd better get on board with the new plan. Henderson said the chances of filing bankruptcy are higher today than they were earlier largely because of the bondholder exchange.
DETROIT -- The United Auto Workers (UAW) said Sunday night that the union had reached an agreement with Chrysler, Italy's Fiat and the U.S. government on concessions to its 2007 contract and health care trust, Reuters reported.
Also on Sunday night, members of the Canadian Auto Workers union ratified a concessionary contract they reached with Chrysler over the weekend.
DETROIT -- General Motors CEO Fritz Henderson will host a media briefing at 9 a.m. Monday
to provide an update on the automaker's revised viability plan, the company said Sunday night.
Though GM is not providing detail about what he will say, Henderson is expected to announce more cuts, including the elimination of the Pontiac brand. Other moves could include permanent plant closings and job cuts. Initiatives to reduce the number of dealers and obtain a debt-for-equity swap from bondholders likely will be addressed. And the shakiness of parts supplier Delphi Corp. may be on the agenda as well.
Pressured on all fronts to right-size its business in order to stave off a bankruptcy that's likely to happen anyway, General Motors Corp. next week is likely to announce the latest casualty in its crash-dive restructuring: its lost-in-yesteryear Pontiac division.
Edmunds.com's Inside Line
, like AutoObserver
a part of the Edmunds.com organization, reported yesterday that a source at GM indicated the company is likely to announce on Monday that it will fold Pontiac, a name that has been part of the GM empire since 1926.
Citing unnamed sources, Bloomberg today also reported GM will shelve Pontiac, which achieved its true prominence in the 1960s when it introduced the GTO in 1964, a car widely credited with beginning one of Detroit's most beloved marketing and engineering phases -- its muscle-car era.
DETROIT -- The U.S. Treasury Department is preparing a Chapter 11 bankruptcy filing for
Chrysler that could come as soon as next week, The New York Times
is reporting.
The paper, quoting unnamed sources, says the Treasury has an agreement in principle with the United Automobile Workers union, whose members' pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing.
The Times further says Italy's Fiat would complete its alliance with Chrysler while the company is under bankruptcy protection.
DETROIT - General Motors announced late Thursday it is scheduling multiple weeks of down time at 13 assembly plants in North America to reduce dealer inventories of unsold new vehicles, eliminating 190,000 vehicles from the production schedule for the second and early third quarters.
"We are pursuing an aggressive inventory strategy so we can get our dealers and ourselves ready for a clean and quick start to 2010 model year and capitalize on upturn when it occurs," Troy Clarke, GM's North America President, told reporters in a conference call Thursday afternoon.
Clarke said another reason for the production cuts was possible parts shortages caused by "the complicated and difficult negotiations" with auto supplier Delphi Corp., which has been in bankruptcy since October 2005, and "its debtor in possession lenders." He would not elaborate.
SANTA MONICA, Calif. -- On Earth Day, drive into a Santa Monica automotive business and get your tire pressure checked. The city is seeking the Guinness World Record for number of tires checked and properly filled in a day, and attempting to educate local residents about the importance of this simple task.
"Our studies show that a driver wastes $800 per year on fuel when driving on a severely under-inflated tire," reported Edmunds.com Senior Editor and "Green Team" committee member Joanne Helperin. "With approximately 250 million vehicles on the road in the United States, and a government estimate that the average vehicle tire is under-inflated by 26 percent, there is remarkable potential for saving billions of dollars and tons of fuel."
At least for today, Chrysler will be able to hold its new keepers in the Obama administration at bay. Because on Earth Day in New York City, Chrysler's Peapod unit has begun taking orders for the company's new Peapod Neighborhood Electric Vehicle
.
There's nothing more "green" -- especially for a company that has notably lacked in environmental orientation -- than an all-electric vehicle that operates at low speeds with no emissions. Peapod is designed to jump-start interest in an NEV segment that always has been the dowdy province of true Earth Firsters; residents of planned communities such as Celebration, Florida; and older folks who live around golf courses.
TORRANCE, California -- Toyota announced pricing on its 2010 Toyota Prius that puts it
higher than the 2010 Honda Insight.
The 2010 Toyota Prius will start at $22,750, including a $750 destination charge, when it goes on sale in late May, putting it higher than the 2010 Honda Insight, which starts at $20,470 and went on sale March 24.
However, Toyota's pricing strategy includes the rollout later this year of the 2010 Toyota Prius I, a stripped-down base model that will start at $21,750 -- still more expensive than the cheapest Insight.
The Obama administration, as promised, is providing more funds for Chrysler and General
Motors as working capital to keep them afloat as they try to meet the government-imposed deadlines.
Chrysler received about $500 million to get it through the end of April. The Obama administration has set an April 30 deadline for Chrysler to negotiate a final deal with Italy's Fiat in order to be granted $6 billion more in government funds or face bankruptcy. And the government will end its support of Chrysler if it goes into
bankruptcy.
GM is receiving $5 billion through May to help it meet its June 1 deadline to return to the Obama administration with a viable restructuring plan or it faces bankruptcy, during which the government will provide funding.
Hustling to clean up its balance sheet and deal with some atrophied tentacles of its overseas operations prior to a June 1 deadline from the Obama administration, General Motors Corp. could be preparing a deal to offload -- for a paltry sum -- its cash-poor Adam Opel AG European operations, the Financial Times reported today.
The paper says GM wants an investor to pay the equivalent of about $650 million for Opel/Vauxhall. But GM would then invest the money in the new company formed by its European operations, becoming one of, if not the largest, of the new company's shareholders.
Moreover, given the complexity of GM's current financial situation and the compressed time frame for GM to right its ship lest the Obama administration's Automotive Task Force decree GM should be taken through bankruptcy, GM wants this Opel proposal to proceed in a matter of weeks, the Financial Times story said.
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.
DETROIT -- General Motors CEO Fritz Henderson, in a Friday morning conference call, brought the media up to date on the progress of the automaker's latest "go deeper, go faster"plan required by the U.S. government and tried to dispel some reports that have been circulating.
Henderson reiterated bankruptcy still is not GM's preference, but it remains a possibility and is more probable as time marches on. He said GM is planning two tracks -- one for restructuring out of court and another within the bankruptcy court. Should bankruptcy be required, Henderson said, the plan in the works is to do it quickly, something many experts doubt can happen.
On other topics, he said: potential buyers and investors are lined up for a look at Saab, Saturn and Opel; more job cuts are coming; and no other brands, namely Pontiac and GMC, have been targeted for elimination as of now.
DETROIT -- An investor group that includes a number of Saturn dealers said it has
approachedGeneral Motorsto acquire and operate the principal assets of Saturn, the Wall Street Journal
reports.
The investors say Saturn would benefit as an independent entity. If successful, the new company would outsource Saturn production, initially to GM, and eventually sell "smaller, fuel-efficient vehicles" from a range of companies.
GM said in its February 17 viability plan submitted to the federal government that it would phase out Saturn by 2011, when most of its models reach the end of their life cycle, unless a new arrangement could be made.
TORONTO -- Fiat CEO Sergio Marchionne told aToronto newspaper thata Fiat-Chrysler
partnership had only a 50-50 chance of success because of lack of progress in talks with union leaders, especially those in Canada. He said that the Italian automaker is prepared to walk away from the proposed alliance with Chrysler, which must be completed in two weeks, if the union doesn't cut costs. That likely would leave Chrysler headed to bankruptcy court.
"Absolutely we are prepared to walk. There is no doubt in my mind," Marchionne said in an interview with Toronto's Globe and Mail newspaper. Instead, he said, Fiat would find another international partner.
Nomura analyst Michael Tyndall told Reuters Marchionne was probably not bluffing in talking tough with the unions. "He's playing hardball," he told the newswire, adding that the unions' position would make the deal too costly for Fiat. "We want them [Fiat] to walk away...I don't see any benefits in this deal."
WASHINGTON -- Turns out, auto engineers have been right all along: size matters and you
can't defy physics in crashes.
The latest report from the Insurance Institute for Highway Safety (IIHS) shows that even the best small cars do poorly in head-on collisions even with only somewhat bigger midsize sedans from the same manufacturer.
"Minicars as a group do a comparatively poor job of protecting people in crashes, simply because they're smaller and lighter," Adrian Lund, president of the insurance industry-funded group, said in a statement. "In collisions with bigger vehicles, the forces acting on the smaller ones are higher."
The IIHS notes that frontal crashes are the most dangerous traffic accidents, causing about 15,000 out of roughly 40,000 U.S. traffic deaths annually.
Just what General Motors needs right now -- a massive recall -- as it struggles to convince wary American consumers that it builds quality vehicles and it will survive its current financial crisis.
But that's what GM has. The automaker is recalling 1.5 million vehicles because of potential engine fires.
In global news, the auto industry criticized Prime Minister Gordon Brown's subsidy for electric cars, Nissan and Renault announced plans to supply China with electric cars by 2011; U.S.-based Tesla is expanding to Europe; and vehicle sales in Australia tumbled in the first quarter.
A black-owned construction company has filed a federal civil lawsuit against Toyota,
MississippiGov. Haley Barbour andthe Mississippi Development Authorityclaiming racial discrimination in the construction of Toyota's new plant innortheast Mississippi.
The owners of Fish & Fisher, Jacqueline Williams and Renna Fisher, say Barbour, MDA and the car company acted in concert to bar them from participating in what they claim was a whites-only bid process for site preparation.
Two new studies released by pubic-interest organizations are putting up the orange cones on the growing trend toward privatization of public roadways.
The Pittsburgh Post-Gazette reports this week that the wide-ranging U.S. Public Interest Research Group warns of "big potential downsides for the public" in road privatization schemes.
The Post-Gazette also quoted the PIRG-developed "Private Roads, Public Costs" report as saying, "Road privatization offers a hard-to-resist 'quick fix' for state budget and transportation challenges. But there are hidden costs to privatization."
In the first quarter this year, 271 auto dealers in the U.S. went out of business, according to
the National Automobile Dealers Association.
NADA reports at the end of the first quarter, the U.S. had 19,738 auto dealers, down from 20,009 year-end 2008.
The trade group predicts about 1,200 dealers, mostly representing General Motors, Chrysler and Ford brands, to go out of business this year, about 20 percent more than last year.
Following the lead of European countries, Japan is including a scrappage program -- known in
the U.S. as a cash for clunker plan -- in its massive just-announced economic stimulus package.
Car buyers in Japan would be paid up to 250,000 Yen (roughly $2,500) to trade in vehicles 13 years old or more for new, more modern ones. The government has budgeted $3.7 billion for the program. On April 1, the Japanese government announced a tax break on gasoline-electric hybrids and other ultra-low emission vehicles.
The U.S. Treasury Department will start releasing $5 billion in government funds to auto suppliers next week. The Supplier Support Program will funnel the money through General Motors and Chrysler, which have loans from the government, to their shakiest and most vital suppliers.
Chrysler plans to use $1.5 billion; GM expects to use $2 billion. The remaining $1.5 billion would be available at the request of GM or Chrysler.
Ford has declined to participate as it has with government loans for itself. Instead, Ford is lending money to its suppliers.
Three managers of Italy's Fiat are being held against their will by employees in the company's Brussels commercial headquarters, an official told Bloomberg News. The managers were discussing job cuts for the facility that employs about 90 people.
Holding executives hostage is becoming increasingly more commonplace in Europe as the stress of the economy and job losses loom.
In Global News, China's upcoming auto show in Shanghai has more no-shows as a result of the ailing global economy, Canada's government is backing General Motors and Chrysler warranties as the U.S. is, and South Korea's troubled SsangYong axed more than a third of its workforce.
NEW YORK - The Volkswagen Golf was named the 2009 World Car of the Year Thursday
morning at the New York auto show. A jury of 59 international automotive journalists from 25 countries made the selection.
"It is a tremendous honor for Volkswagen to have its global best selling model, the Golf, named the 2009 World Car of the Year," said Stefan Jacoby, President/CEO, Volkswagen of America, Inc. "This is a great way to kick-off the new Golf here in America. We're excited for the arrival of the sixth generation Golf, which will be in Volkswagen showrooms later this year. Simply put, we believe this is the best Golf ever."
Fiat CEO Sergio Marchionne reportedly is back in the U.S. to continue hammering out an
alliancewith Chrysler.
Marchionne and Alfredo Altavilla, Fiat's head of business development and chief executive of its powertrains division, reportedly are dividing their time between negotiations in Detroit with Chrysler and the UAW and meetings in Washington with U.S. Treasury officials.
President Obama has given Chrysler until the end of this month to
finalize a definitive agreement with Fiat. And that's "ample time," said Chrysler President Jim Press Wednesday at the New York auto show, where he was driven onto the stage in a Fiat 500.
A team from the U.S. Treasury Department is in Detroit this week and next helping General
Motor devise a plan to save the company froma potential June 1 bankruptcy.
The Treasury Department's Harry J. Wilson, a former partner in Silver Point Capital LP, and about 14 other people including advisers from Boston Consulting Group and Rothschild Group are part of the group, Josh Earnest, a White House deputy press secretary, told Bloomberg News. Earnest added that the team will work to speed existing cuts and identify new savings.
Three bidders with offers from $100 million to $200 million are interested in General Motors' Hummer brand, media outlets are reporting.
None are automakers, one is from the U.S. and two are from overseas, Reuters reported Thursday.
In addition to paying GM cash, the buyer would assume GM's liabilities for its 125 Hummer dealers in the U.S. and commit further investment to engineering, marketing and sales, Reuters reported.
Legendary coachbuilder Wilhelm Karmann GmbH, which makes convertibles for
Audi and Daimler, has filed for bankruptcy protection from creditors in Germany. The company said "crashing" car markets and contract cancellations haveleft it unable to pay its bills and its workers.
Karmann said on its Web site that it plans to continue production and maintain as many jobs as possible, while keeping creditors at bay through the courts.
NEW YORK -- U.S. car and truck sales may come in at under 10 million units this year and may not rebound until next year, said the head of Volkswagen's North American operations.
"We may not see a recovery until the end of this year, or even into next year," Stefan Jacoby, president of Volkswagen of America, said in a speech Wednesday at the New York auto show.
In Global News Monday, French automaker Citroen launched a scrappage program of its own in the U.K., General Motors' financing unit GMAC added payment protection to its loans, Japan's import sales plummeted as the government announced a massive economic stimulus plan, and Maruti Suzuki's Alto reigns supreme in India.
With barely three weeks to concoct a workable alliance with Fiat S.p.A lest the Feds roll out the bankruptcy carpet, Chrysler LLC had enough extra time on its hands this week to announce its latest team-up: a strategic alliance with Massachusetts-based battery developer A123Systems.
Chrysler said in a press release that the deal "reinforces both companies'" commitment to expand battery manufacturing technology in the United States, reducing dependency on foreign sources of energy and greenhouse gas emissions."
Swedish automaker Saab told a court in its homeland Monday that it has 20 "active" suitors
and expects to be sold by the end of June. The automaker hasn't named those potential buyers. However, some indications are that Chinese and Swedish suitors are among them.
A Swedish court granted Saab an extension of the period it is protected from creditors to give it more time to restructure and find a buyer. Guy Lofalk, the lawyer in charge of Saab's restructuring, said the sale of Saab is a "crucial prerequisite for a successful reconstruction."
In Global News Monday, Brazil's auto sales set a new record for March, Moody's rating service in the U.S. downgraded Germany's BMW and its North American financing unit and South Korea's Samsung will build a new sedan for its French parent Renault to be sold as a Renault in Europe.
In both interviews, Henderson insisted the automaker still prefers to avoid bankruptcy court to accomplish its restructuring, "but if it's required, that's what we'll do."
Henderson reiterated on Meet the Press what he'd told the media in his first press conference last Tuesday that GM needs to "go deeper and we need to go faster" in its restructuring. "We either accomplish this job outside of bankruptcy in the short term, or alternatively, if it's necessary, we'll go into bankruptcy in order to get this job done," he said."
In Global News this week, vehicle sales in Canada fell to 1997 lows, Ford shortened its work week at its plant in Russia and South Korean automaker SsangYong sued its Chinese parent SAIC.
BREA, California -- Suzuki announced this week that it is cutting its sales staff by another 15 percent after sales continued to plunge in the first quarter, which ended Tuesday. Suzuki cut 10 percent of its staff last fall when sales softened. The cuts and Suzuki's low level of sales lead experts to wonder how long the automaker will remain in the U.S. market.
In contrast, Suzuki's operations in India, Maruti Suzuki, remains on a roll, with sales soaring 22 percent in March, giving the Japanese automaker a 56 percent market share there.
TOKYO -- Honda announced Tuesday that it has canceled plans to participate in this fall's
Frankfurt auto show due to the "unprecedented market turndown."
"As seen in the withdrawal from Formula One, Honda is trying to reduce every possible cost in various areas including manufacturing, sales and marketing activities to strengthen its business constitution to overcome the tough climate of today," according to the company's press release. Honda earlier closed its assembly plant in the U.K. for a lengthy four months to reduce inventories due to slow sales.
DETROIT -- General Motors' newly appointed CEO Fritz Henderson said a decision on the future of Hummer is close.
Henderson said as his first press conference as CEO Tuesday that he had originally set a March 31 deadline to decide whether to sell or eliminate the Hummer brand. However, he said GM remains in talks with "several interested parties -- not just one" on the possible purchase of Hummer.
"We don't have a decision today but within weeks or days -- not months -- we'll be making a judgment on a sale or not," Henderson said.
DETROIT -- Frederick "Fritz" Henderson, the newly appointed CEO of General Motors, said in his first press conference Tuesday that the automaker understands what the U.S. government wants from GM and promises to get the job done.
"We will get the job done," Henderson told reporters emphatically with confidence and calm. "We'll do it in court or we'll do it outside of court. But we will get the job done."
DETROIT -- General Motors Tuesday announced a comprehensive package of customer
incentives andprotectionit callsGM Total Confidence.
The elements of GM Total Confidence, which are in addition to zero- or low-interest financing incentives, cash rebates and customer loyalty promotions, include:
- car payment protection for the first 24 months of ownership so that if the buyer loses income, GM makes nine payments of up to $500 per month;
- a protection plan that ensures the value of a buyer's trade-in;
- OnStar's safety and security plan for a year as standard fare;
- fully backed, 5-year/100,000-mile limited powertrain warranty with roadside assistance and courtesy transportation.
DEARBORN, Mich. -- Ford Motor announced Tuesday a comprehensive package of
incentives it is calling the Ford Advantage Planthat includes a payment protection plan like Hyundai's as well as zero-percent financing andacharitable donation element.
"Consumers remain anxious about the economy and their own outlook for the future," said Ken Czubay, Ford's vice president of sales and marketing in a statement Tuesday morning. "We at Ford want to do our part to rebuild faith in the marketplace by offering payment protection on every new Ford, Lincoln or Mercury vehicle for up to a year if our customers lose their jobs."
WASHINGTON, D.C. -- President Barack Obama has appointed Edward Montgomery, a top
labor economist and former deputy secretary of the U.S. Labor Department as director of Recovery for Auto Workers and Communities.
In making the announcement of his appointment early this morning, the Obama administration said Dr. Montgomery "will work to leverage all resources of government to support the workers, communities and regions that rely on the American auto industry."
Montgomery received his Ph.D. in economics from Harvard University. Montgomery has served as dean of the College of Behavioral and Social Sciences at the University of Maryland and been a professor at Michigan State University and Carnegie Mellon University. He also has held various economic posts and advisory roles with the government, including the U.S. Department of Labor and Federal Reserve.
His research has focused on the effects of economic and social policy on labor market behavior.
General MotorsCEO Rick Wagoner has been asked to resign as a condition of extending addition federal aid to the auto company he's run for nine years.
"On Friday I was in Washington for a meeting with [Obama] administration officials. In the course of that meeting, they requested that I 'step aside' as CEO of GM, and so I have," Wagoner said in a statement early this morning.
The prospect of Wagner's leaving or being forced to resign first emerged last fall when the Detroit Three automakers initially reported to Congress about their deteriorating businesses and GM and Chrysler LLC proceeded to accept federal "bailout" loans from the U.S. Department of Treasury's now-infamous Troubled Assets Relief Program (TARP).
MILWAUKEE -- Johnson Controls Inc., which makes mostly seats and interior components for the auto industry, said Friday it will close 10 plants, though it did not specify which plants nor how many jobs would be cut.
The company said it will take a second-quarter charge to cover the cost of these actions of $215 million, which will put it in the loss column. However, the supplier said it expects to be profitable in the third and fourth quarters despite its forecast for lower vehicle production. Johnson Controls is forecasting North American vehicle production at 8.8 million units this year and Europe at 14.3 million units, down from its December forecast.
CYPRESS, Calif. -- Mitsubishi Motors North America has eliminated 140 employees in its
sales division and credit company, most of them in the headquarters offices here, as part of its restructuring to address the deepening recession and global downturn in new-car sales.
With these layoffs, Mitsubishi now has shrunk to 400 employees across the U.S. The Japanese automaker said in a statement it protected most of the sales jobs in the field, with the majority occurring at the headquarters.
The layoffs did not involve Mitsubishi's assembly plant in Normal, Illinois.
In Global News Thursday, Germany extended its vehicle scrappage incentives while South Korea implemented a similar scheme, and Tata Nano launched with no competition, but some looms in the future.
In Global News Wednesday, Ford Motor Co. is negotiating with three bidders for Volvo, General Motors and Saab agree to share technology for five years, and Porsche obtained $13.5 billion in financing.
In Global News Tuesday, Swedish truckmaker AB Volvo's sales nosedived in February, Chrysler is focusing on imports to China and the French government is outraged over a golden parachute paid to the departing CEO of supplier Valeo.
In Global News Tuesday, Japan's automakers are lobbying for government aid, Ford is raising prices in the United Kingdom to contend with the weakening pound, and Europe and South Korea struck a tentative deal to encourage free-flowing trade.
In news from around the world Monday, auto magnates in Japan and Russia have seen their fortunes crippled, the outlook for Germany's economy has worsened, German automakers may pull out of the shortened Tokyo auto show and French supplier Valeo's chief executive has stepped down over a strategy disagreement.
In global news, General Motors' distributor in Europe has filed for the equivalent of bankruptcy protection from creditors, U.K. auto production is plummeting, and Germany's largest steelmaker is cutting thousands of jobs.
Turns out Doug Poling, the son of former Ford Motor Co. Chairman Harold "Red" Poling topped the list for biggest bonuses paid to executives of American International Group Inc., an honor that earned him a personal visit by protesters over the weekend.
News reports say 48-year-old Poling, an executive vice president in charge of energy and infrastructure investments, received -- and says he will return -- the $6.4-million payment he received in bonus.
In Europe, Japanese automaker Mitsubishi announced plans to restructure that including moving its corporate headquarters and eliminating jobs while in China, Chery launched two new brands as Dongfeng announced capital spending cuts.
In news from around the world Thursday, Ford of Europe offered support for General Motors Europe's request for government aid, the 2010 British International Motor Show was canceled, Brazil car sales this month are rising and union workers for Volkswagen's Seat subsidiary approved a two-year pay freeze to prevent layoffs.
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.
Taking a cue from Hyundai's highly successful Hyundai Assurance program, AutoNation, the nation's largest dealership chain, will be offering its customers a guarantee to cover payments on the new or used vehicle they purchase for six months if they become unemployed.
Programs like Hyundai's and AutoNation's are an attempt to tackle the No. 1 reason consumers aren't buying cars: lack of confidence.
General Motors Corp. said today the company won't be needing $2 billion in loans it previously requested for March.
GM said in a statement issued primarily to announce new labor-agreement modifications with the Canadian Auto Workers union that the company "advised the Presidential Task Force on the Auto Industry that the $2 billion of funding previously requested for March would not be needed at this time.
"This development reflects the acceleration of GM's company-wide cost reduction efforts as well as proactive deferrals of spending previously anticipated in January and February," GM added.
Fleetwood Enterprises, the California maker of recreational vehicles and pre-fabricated homes, filed for Chapter 11 bankruptcy protection Tuesday.
The company, hit by the steep drop in RV sales that started with last year's sharp spike in gasoline prices and worsened with the credit crunch and deteriorating economy, said it was putting its motor-home and manufactured housing units up for sale but was closing its travel trailer division, eliminating 675 jobs.
The company plans to continue operating as it seeks funding for its restructuring.
Rank-and-file members of the United Auto Workers union yesterday gave the union the authority to make amendments to the union's 1997 contract with Ford in order to help the automaker further ease its labor costs and debt burden.
The positive vote was not overwhelming: The Detroit News reports only about 58 percent of the UAW's production and skilled-trade members who work for Ford agreed to the contract changes. But the majority of UAW workers went for the deal, meaning Ford has won another important battle in the war to improve its balance sheet.
DETROIT -- General Motors Corp., as expected,saidits auditors had raised "substantial doubt" about the automaker's ability to survive if it fails to end losses andits cash burn, according to the company's annual report filed with the federal government's Securities and Exchange Commission Thursday morning.
"Our future is dependent on our ability to execute our viability plan," GM said in its annual report. "If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. bankruptcy code."
Despite the fact that the auditor's "going concern" warning was anticipated, the already suffering stock market didn't take the news well. In early trading, the slumping market was down yet again, and GM's stock price had slid 15 percent to $1.86 a share.
In its recent restructuring plan submitted to the U.S. Department of Treasury, Chrysler LLC promised to eliminate a shift of production at a North American assembly plant this year, and now it's known where the cut will come: the company announced it will eliminate the third shift at its minivan assembly plant in Windsor, Ontario, Canada.
The move is not unexpected - although minivans still account for a significant portion of Chrysler's total sales, minivan sales have long been trending downward. Sales for Chrysler's Dodge Caravan are off 36 percent so far this year, with Chrysler Town & Country sales slumping 41 percent.
Toyota Motor Corp. has rehired Yoshimi Inaba to revive the automaker's operations in North
America where U.S. vehicle sales have plunged to their lowest level in nearly three decades.
The 62-year-old Inaba left Toyota in 2007 to run Central Japan International Airport Co. in Nagoya. He first joined Toyota in 1968 and later was president of North American sales. A Toyota spokesperson said he will oversee some North American projects.
DETROIT -- Saab Automobile AB will file for
reconstruction -- the U.S. equivalent of Chapter 11 reorganization -- at a board meeting at 11 a.m. local time in Sweden, a newspaper there is reporting.
Spokesmen from General Motors, Saab's parent, and Saab declined to comment to AutoObserver Thursday morning, saying they had nothing more to say about Saab than what was in GM's viability plan submitted to the U.S. government on Tuesday.
Saab's plan to file for reconstruction as well as end payments to suppliers was first reported by the highly respected Dagens Industri, Sweden's equivalent of the Wall Street Journal. The paper, citing unnamed sources, said GM's request for a capital injection into Saab by the Swedish government was unsuccessful.
AUBURN HILLS, Mich. -- Chrysler's viability plan submitted late Tuesday to the U.S. Treasury
Department asks for another $2 billion in federal loans, bringing its total request to $9 billion.
The additional $2 billion request means Chrysler is seeking $5 billion by March 31 -- rather than $3 billion -- that it says is required to continue operations.
Chrysler's preliminary "viability plan" said it will eliminate more jobs -- another 3,000. It also will rid itself of three more models -- Dodge Durango and Chrysler Aspen and PT Cruiser -- and another production shift. In addition, Chrysler said it has a framework for an agreement of cost-saving concessions from the United Auto Workers (UAW) union, its dealers, its suppliers and second-lien lenders.
DETROIT -- Chrysler and Nissan have put on hold their proposed arrangement to build vehicles for each other as they each evaluate their deteriorating financial situations in a worsening global economy and historically dismal car market.
The two companies had announced last spring that Chrysler would build a Dodge Ram-based replacement for the Nissan Titan
while Nissan would provide Chrysler withNissan-based small cars, one of which would be sold as the Dodge Hornet.
The on-hold project raises questions about Chrysler's ability to move forward with a partner and Nissan's product plans for North America.
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.
DETROIT -- General Motors will eliminate 10,000 jobs from its global salaried ranks, with more than a third of thosebeing in the United States. Remaining salaried workers in the States will see their pay cut temporarily, beginning May 1.
"These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability," GM said in its statement issued Tuesday morning.
France's biggest carmakers, PSA Peugeot Citroen and Renault, will be given $7.8 billion in
loans from the French government after the companies vowed not to close plants or lay off workers in the country during the duration of the loans.
Peugeot and Renault will each receive 3 billion euros in loans at an interest rate as high as 6 percent. Renault Trucks, owned by Sweden's Volvo AB, will receive 500 million euros.
The loans to automakers are part of President Nicolas Sarkozy's larger stimulus package. France entered its first recession in 16 years in the first quarter. Vehicle sales fell 11 percent last month. Renault sales dropped 23 percent, Peugeot's 13 percent and Citroen 11 percent.
The Conference Board's latest measurement of job losses shows a further fall in January, indicating a rapid pace of job losses and persistence in those job losses for several more months.
"The Employment Trends Index has recently been declining faster than at any time since the 1974 recession," said Gad Levanon, senior economist at The Conference Board, in a statement.
Nissan will cut 20,000 jobs globally, as the Japanese automaker announced Monday its first loss in nine years.
Nissan said it expects a net loss of $2.9 billion for its fiscal year, which ends March 31. Nissan said in October it estimated its annual earnings would be $1.8 billion.
"Our worst assumptions on the state of the global economy have been met or exceeded," Nissan-Renault CEO Carlos Ghosn said Monday. Declining consumer confidence and lack of access to credit are "the most damaging factors," he added.
Magna International recently joined Ford Motor Co. in a high-profile announcement that it will build fully electric cars designed by Ford. But for now, Magna is giving up a core manufacturing component from the old-school business model: the company reportedly is shuttering a plant in New York state that makes transfer cases for SUVs and pickups.
Negotiations with the United Auto Workers union representing workers at the Magna site in Syracuse, NY, reportedly broke down, and the Canadian mega-supplier said it would close the plant because workers would not agree to a contract that would keep the plant competitive.
The Motor & Equipment Manufacturers Association (MEMA) this week submitted a request to the U.S. Dept. of Treasury for $25.5 billion in federal aid to help its auto-industry supplier members weather the deepening financial crisis that has gripped the domestic auto industry.
The Wall Street Journal
reports MEMA's request came to light this week as U.S. House members met with representatives from the state of Michigan to discuss the auto industry's troubles. MEMA represents some 400 auto-industry suppliers, a significant portion of which are believed to be mirroring the financial distress of their primary customers, the Detroit Three automakers, and, to a lesser extent, transplant manufacturers who also are battling a prolonged downturn in U.S. auto sales.
Joining the list of auto companies denying they are interested in purchases of or alliances with other auto companies is China's Geely Automobile Holdings Ltd. -- one of the more prominent of the nation's numerous automakers -- which is denying talks with Ford Motor Co. about acquiring its Volvo Cars operation.
The Wall Street Journal
reported this week that Geely president Li Shufu said, "there are no such talks," and Ford, which has said it is shopping Volvo, would not comment.
WASHINGTON, D.C. -- Perfectly timed after auto makers reported dismal U.S. sales in January, legislation introduced by U.S. Senator Barbara A. Mikulski's (D-Md.) to allow buyers to deduct from their income taxes the interest payments on auto loans - as well as state sales and excise taxes -- was passed in the Senate late yesterday.
The Auto Assistance Ownership Amendment is an amendment to the American Recovery and Reinvestment Act, which is awaiting Congressional approval.
Many analysts and auto-industry executives have called for auto-loan interest tax writeoffs to be a part of the broad federal stimulus being considered in Washington as an effective way to help reignite auto sales this year.
Two huge drags on the U.S. auto market - an utter lack of consumer confidence, and a paucity of credit -- persisted in January and were joined by a new one: at least a temporary evaporation of the fleet market.
Industry-wide sales in January cratered from a year earlier, falling by 36.9 percent, to about 677,000 units from 1.06 million vehicles sold in January 2008. The seasonally adjusted annual sales rate fell to fewer than 10 million units for the first time in more than 26 years. And the American auto business sold fewer cars than for any month since the depths of a recession in December 1981.
DETROIT -- The Michigan Department of Transportation and Michigan International
Speedway (MIS) announced Monday a partnership for research and development of connected vehicle technologies.
The Brooklyn, Michigan, track, which hosts various racing events including NASCAR, will be offered to automakers, supplier and aftermarket companies and government agencies that manufacturer, develop and test technologies that allow cars to communicate with one another to prevent collisions and improve mobility and fuel efficiency. The track will allow testing in a closed and safe environment before the technologies go onto public roads.
NEW ORLEANS, La. -- AutoTrader.com and Edmunds.com, the two most prominent independent automotive Web sites announced Sunday at the National Automobile Dealers Association convention here that they are collaborating to connect more new car buyers to dealers through a nationwide partnership that will put new car listings from AutoTrader.com dealers in front of the millions of new car shoppers on Edmunds.com.
AutoTrader.com is powering new car inventory listings on Edmunds.com so that the millions of car buyers who visit the Edmunds site can choose a new path to research and compare franchise auto dealers' new car inventory as they make their new car purchase decisions.
India's Tata reportedly has set the much anticipated introduction of its Nano small car for mid-September. India media reports both the "base" and "fully loaded deluxe" model will be in showrooms mid- to late February.
The car was introduced at this time last year to great attention at the New Delhi auto show. It was to be the world's cheapest car at $2,500 and had been scheduled to arrive in showrooms in October.
However, plant construction had been disrupted by protests by the local community over land compensation. Tata ultimately was forced to relocate its plant.
Auburn Hills, Mich. -- Chrysler confirmed early Tuesday morning that it, along with its majority owner Cerberus Capital Management, had signed a deal with Italy's Fiat to establish what it called a global strategic alliance.
Chrysler said the alliance is a key element of its viability plan that must be submitted to Congress by the end of this quarter. The automaker said in a statement posted on its Web site that the alliance would allow Fiat and Chrysler to take advantage of each other's distribution networks and "optimize fully their respective manufacturing footprint and global supplier base."
DETROIT -- Within hours of its credit arm obtaining $1.5 billion in federal loans, Chrysler LLC announced incentives of zero-percent financing for up to 60 months on select 2008 and 2009 model year Chrysler, Jeep and Dodge vehicles through Chrysler Financial, effectively immediately.
In addition to the incentives, Chrysler Financial will loosen its previously tightened credit requirement to now include customers with scores in the 620 range.
The Japan Automobile Manufacturers' Association reportedly plans to meet later this month
about whether or not to hold the 2009 Tokyo Motor Show. A decision likely will be announced shortly thereafter.
An official of the organization was quoted as saying the show, held every other year, may be canceled due to the global economic crisis.
The Tokyo show has struggled in recent years to maintain its status as an international show because of Japan's largely closed market. Automakers have opted instead to shift their auto show dollars to China.
DETROIT -- In announcing a plan to assemble in Michigan the lithium-ion battery packs for the Chevrolet Volt extended-range electric vehicle, General Motors Corp. also is forming an education cooperative that aims to train a new breed of engineer that can commingle electrical and automotive knowledge.
Part of GM's multi-faceted approach to build a foundation for the domestic development and supply of advanced batteries for the auto
industry is a $5-million, five-year program that establishes at the University of Michigan in Ann Arbor the GM/U-M Advanced Battery Coalition for Drivetrains (ABCD).
The Genesis was the first Korean car in the 16-year history of the award to win. It was selected from three finalists that also included the Ford Flex and Volkswagen Jetta TDI.
The F-150 was selected from three finalists that also included the Dodge Ram and Mercedes-Benz ML320 BlueTEC.
Perhaps now, at age 91, Las Vegas billionaire Kirk Kerkorian has finally given up on the auto industry that has not been particularly good to him.
On Tuesday -- just in time to take year-end losses -- Kerkorian sold the last of his investment in Ford. The move came just six months after Kerkorian's Tracinda Corp. bought a 6.49 stake in Ford and carries with it deep losses. Kerkorian's purchase was seen as a vote of confidence in Ford's turnaround strategy and its management led by former Boeing exec Alan Mulally.
As investor Kirk Kerkorian was selling off the last of his shares in the U.S. auto industry, another elder American investor was easing into the business.
Warren Buffett's Berkshire Hathaway, Inc. reported to government regulators Monday that it had purchased $40 million in recreational vehicle maker, Coachmen Industries Inc., which assembles Viking travel trailers in Middlebury, Ind.
GMAC LLC, the finance arm of General Motors Corp. that also lends money for home mortgages and lines of credit, on Decemcber 24 was granted status as a bank holding company by the U.S. Federal Reserve.
The move was vital for GMAC in order for it to qualify for relief loans from the storied Troubled Assets Relief Program (TARP), passed in October to provide emergency loans to distressed banks and other financial institutions.
DETROIT -- General Motors will provide an update on the future of Hummer sometime in the first quarter, a company executive said Friday.
"We've been in discussions [regarding Hummer] with interested parties. Those talks are moving along quickly and we'll have something to say about Hummer in the first quarter of next year," said GM President Fritz Henderson in a conference call with media regarding the government's rescue package for GM and Chrysler.
Henderson said that announcement would be either "a deal to be had or a different path" that Hummer would take.
Two of the highest profile hires made by Chrysler following its purchase by private equity firm Cerberus Capital Management are leaving the company.
Philip F. Murtaugh, who headed Chrysler's Asia-Pacific operations, and Deborah Meyer, Chrysler's chief marketing officer, are gone, Chrysler announced just moments after President George W. Bush said Chrysler and General Motors would receive $17.4 billion in government loans.
The hiring of Murtaugh and Meyer, along with Vice Chairman Jim Press, were hailed as coups by Chrysler when they occurred just 18 months ago.
The Bush administration announced Friday morning that it will provide $13.4 billion in short-term loans to General Motors and Chrysler; the automakers will receive another $4 billion in February.
President George Bush admitted reluctance about providing government loans to the Detroit automakers but noted the beleagured U.S. economy would suffer a harsh blow if one or more of Detroit's automakers collapsed into a "disorderly bankruptcy" at this time.
"These are not ordinary circumstances," Bush said. "In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action."
Chrysler will close all 30 of its plants for at least a month beginning at the end of the work
day Friday, in an effort to keep inventories ofunsoldvehicles from buildingdue to slumping sales and to conserve cash. The automaker said workers will be called backJanuary 19 at the earliest.
The company said it is closing plants for an extended holiday to keep inventories from building due to poor sales. "The continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales" forced the action, Chrysler said in a statement.
How bad is it? General Motors Corp., currently hoping for "bridge" funding extended by the Bush administration to keep the company from imminent bankruptcy, isn't buying into any optimism about the potential for an economic turnaround -- the company announced today it is slashing a quarter-million units from its first-quarter 2009 production schedules.
It's an outsized reaction that projects a downbeat outlook for the U.S. auto market's prospects in early 2009.
The U.S. House of Representatives approved emergency loans to General Motors and Chrysler Wednesday night. Now the focus shifts to the Senate where Republican opposition threatens to stall or kill the bill altogether.
Senate Republicans, who will vote on the bill together, say it doesn't have the votes to pass.
The House approved the $14 billion in loans in a vote of 237-170. The loans would go to General Motors and Chrysler to stay afloat through March; Ford has said it doesn't need the funds immediately but would like access to a line of credit in case the economy worsens beyond its projections.
The House of Representatives could vote as early as today on the $15-billion loan package for U.S. automakers after the Congressional Democrats and the White House reached an agreement in principle on Tuesday night.
If the legislation now being crafted is passed, the low-interest loans could make their way to General Motors and Chrysler by next week. The automakers have said they could run out of money before the year ends. The $15 billion in loans is intended to keep them afloat through March. Ford has said it doesn't need loans now but would like access to a line of credit if the economy worsens more than the automaker expects.
The most dramatic and convincing moment of five-and-a-half hours of Congressional testimony on Detroit automakers' request for financial help came when Texas Democrat Al Green asked the panel of esteemed financial and industry experts simple, straightforward questions. Requesting them to raise their hands like third-graders if their answer was yes, he asked:
Was bailing out AIG in the national interest?
All six hands went up.
Is it in the national interest to bailout the Detroit automakers? All hands shot up.
Would it be damaging to the national interest not to take action to help Detroit's automakers? All hands went up.
"Then we must act. It is in our national interest," Green concluded.
Chrysler LLC has hired the prominent law firm Jones Day as bankruptcy counsel, several unnamed people apparently familiar with the matter told the Wall Street Journal. The firm was hired several weeks ago to help the ailing auto maker prepare for a possible Chapter 11 bankruptcy filing.
Neither Jones Day nor Chrysler commented to the Journal about the report.
In keeping with its status as a private company, Chrysler submitted its viability planthat didn't provide nearly the detail that General Motors and Forddid in their hefty reports.
However, Chrysler's simple message came through loud and clear: the automaker is nearly broke and needs a government loan -- and needs it now. The automaker wants a $7-billion government loan by December 31. Otherwise, its liquidity could fall below the necessary levels to run the company through the first quarter.
General Motors Corp. Tuesday released the plan submitted to Congress in application for federal bridge loans to carry the company through 2009, when it expects a host of structural improvements and general downsizing to create "a new General Motors, one that is lean, profitable, self-sustaining and fully competitive."
What GM wants: up to $18 billion -- up to $12 billion in direct federal term loans and another $6 billion committed line of credit to guarantee the company can weather an auto-sales environment even worse than GM's projected 12-million-unit sales rate for 2009.
General Motors announced Tuesday it is ceasing its operations at Detroit Metro Airport in an effort to cut costs.
The elimination of General Motors Air Transportation Services, known by GM insiders as G-MATS and that operated from its own terminal at Detroit's airport, comes on the heels of Congress criticizing Detroit auto executives for flying their individual corporate jets to hearings at which they were asking for $25 billion in government assistance.
Maybe dreams do come true, after all. Americans who have long yearned for Honda to develop a production-car V8 engine may finally be getting their wish -- if recent comments made by Honda president Takeo Fukui are any guide.
In a recent media interview, Fukui was quoted as saying that Honda was now planning to strengthen the Acura brand with a production V8.
Why? Because the 3.7-liter V6 currently installed in the newly face-lifted RL, the range-topper for Honda's upscale Acura sales channel -- wasn't "sufficient" to compete with other premium brands, he said.
Just don't take it to mean a Honda V8 is around the corner.
DETROIT -- The North American International Auto Show -- whose reputation as one of the world's front-line annual international shows already has been bruised by several automakers' choice to forego a presence this year -- absorbed a more-damaging body blow on Monday when Nissan Motor Co. Ltd. announced it, too, will be a no-show at the 2009 Detroit show in January.
Nissan is by far the biggest name to join the ranks of Detroit-show defectors, adding that the company also will be taking a pass on the hugely attended Chicago auto show in February. Nissan -- along with General Motors Corp., Ford Motor Co., Chrysler LLC, Toyota Motor Corp. and Honda Motor Co. Ltd. -- helps comprise what often is referred to as the "Big Six" automakers doing business in the U.S.
DETROIT -- General Motors said Friday it lost $4.2 billion in the third quarter and was burning through cash ($6.9 billion in the third quarter alone) to the point that the automaker will be operating at minimal liquidity levels by the end of this year -- levelsthat will fall even further in next year's first half.
As a result its dire situation, GM announced it would cut more jobs and slash additional costs.
Acting aggressively to move into American consumers' increasingly frugal sweet spots and shore up its sagging sales, Nissan North America has announced an unprecedented zero-percent financing program on its five most popular models and introduced a new version of its Versa compact that retails for a suggested price of $9,990.
The zero-APR option is available on Altima, Murano, Rogue, Sentra and Versa. The Nissan Delivers program is aimed at luring the many consumers who are worried that they can't get the credit necessary to buy a new vehicle, a major drag on the U.S. car market overall these days. A national advertising campaign is scheduled to begin Wednesday.
General Motors and Cerberus Capital Management continue to talk about a GM-Chrysler merger with some significant issues remaining on the table, sources tell Edmunds' AutoObserver. Among them are issues relate to United Auto Workers union, which is being asked to make some concessions but has not yet agreed to them.
Meantime, Reuters news service, quoting unnamed sources, is reporting the two sides, in fact, have resolved the major issues in a proposed merger, though the final deal is dependent on financing and government support.
Reuters also picked up a story out of Japan that claims GM is expected to ask for Toyota's help in turning around its business, Kyodo News reported on Wednesday, citing sources familiar with the plan. An AutoObserver source suggested the report is overreaching.
Just a week after Chrysler LLC gets final Environmental Protection Agency confirmation of mileage for its first-ever production hybrid-electric vehicles, the 2009 Dodge Durango Hybrid and 2009 Chrysler Aspen Hybrid, the company has announced it is accelerating the closure of the Newark, Del., assembly plant that builds them.
Edmunds.com blogsite Edmunds Green Car Advisorreports the models have been in production for only a couple of months, adding that a Chrysler spokesman says the company is hastening the closure of the Newark plant because of freefalling sales of fullsize SUVs. Production at Newark ceases Dec. 31, almost a full year ahead of Chrysler's previously announced schedule.
Auto industry stocks have taken a beating in the past month, but there's some consolation: so have gasoline prices.
The Energy Information Agency said this week the price of gasoline plummeted more than 30 cents, to an average of $3.15. Less than a month ago, the national average price for regular unleaded was $3.85.
This week's average is nearly a dollar less than mid-summer highs of $4-plus per gallon. In many areas of the country, the price for regular unleaded gasoline dipped to less than $3 per gallon.
DETROIT -- A cornerstone of a heavily hyped Chrysler LLC initiative to develop a host of fuel-efficient technologies is on the skids, as Chrysler acknowledges it now is taking legal action against the partner enlisted to help it manufacture advanced, dual-clutch automated manual transmissions.
Chrysler announced last week it is suing Getrag Transmission Manufacturing LLC and its German parent company for misrepresenting Getrag's ability to secure financing for a $455-million joint venture between Getrag and Chrysler to build the fuel-saving dual-clutch transmissions at a new plant in Tipton, Indiana.
Asked if the lawsuit means the venture is dead, a Chrysler spokesman told AutoObserver, "'Dead' might be a little harsh. The matter is in litigation. Hopefully it will be resolved there."
General Motors has been trying to peddle a suddenly outmoded Hummer brand for several months now, so far with no takers. But ask Mark LaNeve, GM's North American sales vice president, if the company would like to put any of its other ailing brands on the auction block, and get a bristling response.
"Why should one of mine go away?" he asked. "There are lots of brands that we outsell. Why doesn't one of them
go away?"
And while LaNeve's remark came before the recent buzz about GM-Chrysler merger talks, it's even more apropos in light of the possibility that two of the old Detroit Big Three could merge their brands as well as their operations. GM's brands would be largely likely to survive any such combination, while most of Chrysler's would likely disappear.
Toyota is offering incentives on 11 models during October after its sales plunged in September, its worst decline since the 1980s. Toyota will offer free financing across its line for between 36 and 60 months depending on the vehicle. Included are the volume-leading Corolla and Camry.
India's Tata Motors Ltd. Confirmed Friday it will shift a planned factory to build the Nano, billed as the world's cheapest car, from the eastern state of West Bengal because of violent political opposition to the project from a political party and farmers.
PARIS - Honda Motor Co. Ltd. is taking the hybrid fight directly to chief rival Toyota Motor Corp. when it launches its all-new Insight hybrid-electric car in April: the Insight will be "substantially" less expensive than any other hybrid currently sold in the U.S. - including Toyota's market-dominating Prius and Honda's own Civic Hybrid.
Calling the original Insight - a quirkily styled, limited-purpose two-seater - a pioneer that introduced hybrid-electric technology to the U.S., Honda CEO Takeo Fukui said at the introduction of the near-production Insight concept at the Paris auto show that the new Insight "will also be our pioneer to take hybrid technology into a new era of affordability." The best development and sales path for hybrids, he added, is to make them affordable enough that hybrids are attainable by "mainstream customers."
AUBURN HILLS, Mich. -- Determined to put some plus signs on its monthly sales reports by year-end, Chrysler rolled out to its dealers last week an "aggressive" incentives and marketing plan for the rest of the year.
Now out of the leasing business with Chrysler Financial, Chrysler will focus its incentives on cash rebates and discounted interest financing to fit the consumer's monthly payment need and to drive down the automaker's inventory of 2008 models, Steve Landry, Chrysler's executive vice president of sales told the media in a conference call Wednesday.
General Motors is replacing its employee pricing program with zero-interest financing for up to six years on many 2008 models. The offer begins Oct. 1 and runs through Nov. 3.
GM is offering the longest loans large SUVs, including the GMC Yukon and Chevrolet Suburban as well as the Pontiac Grand Prix sedan. GM also is offering up to $7,000 in cash rebates on some models.
FLINT, Michigan - A symbol of the times: General Motors Corp. recently shuttered its historic engine plant here that produced a once-cornerstone of the company's engine lineup, a V-6 of 3.8 liters.
Replacing that in a $370-million investment that brought rousing cheers from a large crowd here is a fuel-stingy four-cylinder engine that at 1.4 liters is almost one-third the size. And one of the models the new engine will help power: the high-profile Chevrolet Volt extended-range electric vehicle - a model which itself has emerged as a symbol of GM's promise to be at the vanguard of alternative-energy transportation.
AUBURN HILLS, Mich. -- Chrysler unveiled a trio of all-electric and extended-range electric cars Tuesday and announced it would eventually offer some type of electric version of every model in its line.
Chrysler said the trio of electrified vehicles displayed Tuesday at its corporate headquarters and provided them for media test drives. Chrysler executives said one of the models shown would go into production and on sale to consumers in 2010 in the U.S. followed by sale in Europe. The automaker would not identify which one would be first. Chrysler further said it would offer an all-electric or range-extended electric version of every model in its product portfolio in the next several years, though they gave no specific timeframe.
The nation's largest used-car dealer, CarMax Inc., reported this morning a 78-percent drop in its profits. The Richmond, Virginia-company blamed the slow economy, which has hurt car sales, and reduced lending by third parties for the fall.
DETROIT - By lunchtime on the day General Motors Corp. chose to celebrate its 100th anniversary with a massive celebration here and an ambitious interactive program on the Web, it was apparent the world's largest automaker had the tech requirements figured out. There were no major glitches and GM deftly executed a global multimedia presentation - drawing from four additional regions around the globe - that would have done Microsoft proud.
The culmination, however, was the official unveiling of the vehicle that has emerged as the symbol - and rallying point - of GM's drive to remain as pertinent in the next 100 years of personal transportation: the Chevrolet Volt "extended-range" electric vehicle.
KTALEGAON, INDIA - The next wave of small cars to come from General Motors could wear a "Made in India" label. GM India is rapidly expanding production capacity to build a new generation of small cars to meet consumer demand both at home and abroad. These Indian-built vehicles could arrive in U.S. showrooms as early as next year.
Located in the town of Talegaon, 110 miles southeast of Mumbai, the new factory will have an initial annual production capacity of 140,000 units. GM confirmed annual production at the $300 million dollar facility could be increased in the future. Combined with the 85,000-unit capacity at GM's other factory, in Halol, in the western state of Gujarat, GM India's annual output swells to 225,000 vehicles.
The factory in Halol currently builds no less than four (very different) Chevrolets: the Tavera SUV, Optra sedan, Aveo sedan and hatchback, plus the Spark city car. For now, the new Talegaon plant is scheduled to produce only the Chevy Spark. However, a GM India spokesperson told AutoObserver
the new-for-2009 Chevrolet Cruze compact sedan (debuting in October at the Paris auto show) is being considered for production in Talegaon. The Cruze goes on sale in the US next year, as a replacement for the aging Cobalt.
Honda Motor Co. Ltd.'s made it official, showing today an image of the all-new Insight, a hybrid-electric vehicle that, while carrying the same name as the company's first-ever production hybrid (1999), is an entirely different vehicle.
The new Insight is not a 2-door commuter car; instead, it is a 5-door hatchback that Honda says will use a less-costly version of the company's Integrated Motor Assist system to help markedly undercut the price of the market-dominating Toyota Prius. Honda says the new-generation Insight will debut at the Paris International Auto Show on Oct. 2 - and be on sale in the U.S. next spring.
The car will be built at Honda's Suzuka, Japan, assembly plant, and Honda projects sales of 200,000 units annually, half of which are earmarked for North America. The new Insight reputedly will be positioned lower than the existing Civic Hybrid, and will be part of a multi-vehicle hybrid strategy Honda proposes to combat rival Toyota, whose name is becoming synonymous with hybrid technology.
Think General Motors Corp.'s Chevrolet Volt concept car has lost some of its power as a supercharged hype-machine?
Hardly.
GM director of advanced design Bob Boniface this morning displayed mere images of the production-representativefront and rear of the advanced "extended-range" electric vehicle at the annual Center for Automotive Research Management Briefing Seminars, a longstanding elbow-rubbing confab of industry big wheels.
Result: by 1:00 p.m., GM's stock price soared by as much as 15 percent, ending the day hiked by a still-healthy 10 percent.
The last time buying a vehicle was more affordable than it is today, Ronald Reagan had just assumed the Presidency, ABC's Nightline was a brand-new program and the Empire struck back.
Dallas-based Comerica Bank, now famous for its quarterly Vehicle Affordability Index, said in the second quarter it required 23.1 weeks of median family income to purchase an average-priced new vehicle - the lowest figure since 1980 and a reduction of almost two weeks worth of income compared with a year ago.
Dana Johnson, Comerica's chief economist, says consumers' continuing move to downsize into less-opulent but more fuel-efficient vehicles has driven down the average amount spent on a new vehicle to $23,900, a $700 drop from the first quarter and the lowest figure in three years.
"Consumers also are holding down their monthly payments by extending the average maturity of their car loans to 63.5 months, an increase of about 2 months over the past four quarters," Johnson said.
The U.S. market is headed away from large pickups and SUVs, turning a trend towards largeness that lasted well more than a decade. The new course is taking consumers straight into the arms of the so-called "second tier" Asian automakers selling in the U.S. - Japan's Subaru and Suzuki and South Korea's Hyundai and Kia.
The now well-documented - and still ongoing - shift in U.S. consumer taste is beginning to show tangible benefits for these automakers, whose product ranges remain dominated by compact cars and crossovers now in strong demand.
In June, Subaru, Suzuki, Hyundai and Kia all achieved record U.S. market share, according to data from Edmunds.com. In most cases, the bulk of each company's rapid market-share gains have come in the last year, in lockstep with record hikes in gasoline prices:
As expected, Toyota Motor Corp. reported a sharp reduction in profit for its first quarter, absorbing a 28.1-percent plunge in net income, the company reported today.
Toyota said appreciation of the yen vs. the U.S. dollar accounted for most of the decrease of ¥262.9 billion in operating income, but added that price increases for raw materials also contributed.
The losses come despite the fact Toyota sold 2.19 million vehicles in first-quarter 2008, a slight increase of 24,000 vehicles compared with last year.
Toyota's North American sales were down by 33,000 units in the first quarter, but said it nonetheless recorded a record-high 17.4-percent market share. The highest-ever market share figure did not translate to higher profits, however.
"Decrease in sales volume, the shift of product mix to compact cars, increase in sales expenses such as incentives and increase in reserves for bad debts, resulted in declining profits," the company said in a release, adding, "Toyota will take swift actions in accordance with market changes by increasing the supply of models in high demand and launching new models."
In the U.S., the company also said it is bracing for a sharp decline in the residual value of pickups and SUVs being returned by lease customers.
With deals already inked to produce compact cars and fullsize pickups for one another, the Wall Street Journals reports Nissan Motor Co. Ltd. may produce midsize sedans for Chrysler LLC.
Such an arrangement presumably would give Chrysler a more-competitive play in the heart of the U.S. car market than it currently enjoys with its Sebring and Dodge Avenger, entries launched in 2007 that were immediately criticized for cheap interiors, overwrought styling and underachieving engineering.
DEARBORN, MI - At a press event here to showcase its '09 models, Ford Motor Co.'s top engine-development honcho says the company's gambling its development dollars on gasoline engines, not diesel, as the best path to improved fuel economy and improving the company's sustainability "profile."
Dan Kapp, director-powertrain research and advanced engineering, said Ford essentially is betting the farm on its upcoming "Ecoboost" suite of gasoline-engine enhancements to improve fuel economy, reduce emissions, and, by definition, jack up the company's Corporate Average Fuel Economy numbers towards the eventual federally mandated goal of a 35-mpg fleet average by 2020.
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.
There may be a nationwide credit crunch, but it apparently doesn't apply to distressed Detroit automakers. General Motors Corp. is circling the banks, Ford Motor Co. is chewing away at the $18 billion it got in late 2006 for mortgaging just about everything the company owns, and this week privately owned Chrysler LLC said it's hitting up the lenders for a hefty $24 billion on its credit lines.
Detroit'srush to credit comes despiteGM's insistence it has $24 billion in cash and Chrysler's admonition the company made $1.1 billion in the first half of this year.
Ford Motor Co. said Friday the Michigan Truck Plant in Dearborn, Michigan, that makes the F-Series will effectively be idled for the entire third quarter. The Kansas City, Missouri, plant that also assembles the F-Series will be dormant for most of the same period, although it will begin single-shift production late in the third quarter of the redesigned '09 F-150.
The tactic is part of Ford's strategy to drastically reduce stocks of the current F-150 prior to the start of production for the substantially revised '09 model late this year -- and to avoid further bloating of inventories of the current model in light of seriously flagging light-truck demand in the U.S.
TOKYO -- Nissan Motor Co., Ltd., reported a nearly 43 percent decline in profits for quarter that ended June 30. Nissan blamed the decline on the negative impact of foreign exchange rates and losses on leased vehicles in the U.S. and Canada.
"In the face of the severe operating environment, Nissan remains resilient but cautious on the outlook for our industry," said Nissan President and CEO Carlos Ghosn in a statement. "We have identified the major risks and taken actions to address them, particularly in the U.S. market."
General Motors reported Friday a second-quarter loss of $15.5 billion, which included a
number of charges related to its latest restructuring moves. Excluding those charges, GM's loss was $6.3 billion.
GM shares initially tumbled 6 percent in reaction to the automaker's announcement of the deeper-than-expected loss, the third-largest quarterly loss in its history. The loss sent GM's stock back into the single digits.
"As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting radpily to the challenges facing the U.S. economy and auto market , and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and CEO Rick Wagoner said in the company's statement issued early Friday morning.
LONDON -- Two years ago, General Motors launched its then-new Opel Corsa at the inaugural British International Motor Show. The car became a runaway success. Now GM hopes for a similar performance from its new flagship, the Opel Insignia, unveiled in spectacular fashion prior to this year's London show.
Indeed, the Insignia, by far, was the star of the show, in part, for the way it was introduced. GM literally lowered an Insignia from London's famous Tower Bridge.
And GM is looking for towering things from its new flagship.
On the same day that Daimler AG reported a 25-percent drop in earnings, the German automaker said it will cut production of Mercedes-Benz SUVs andcrossover/wagons made at its Alabama plant through the rest of the year.
The automaker said the plant, which runs on two shifts, will reduce daily production of the GL- and M-Class SUVs and the R-Class crossover/wagon. The automaker didn't say how much production would be cut at the plant, which built 174,000 vehicles last year.
Daimler AG cut its earnings forecast for 2008 after a 25-percent decline in its second-quarter
profits. The luxury automaker also said it would "adjust" production of its Mercedes-Benz E-Class model.
The stock market wasn't pleased; Daimler shares suffered their largest decline since November 1998. They were down $6 each at noon Thursday after the automaker's earnings announcement.
Chrysler told employees Wednesday that it will eliminate another 1,000 salaried jobs worldwide by Sept. 30. This is the third time in 18 months Chrysler has cut jobs. More than 27,000 jobs have been eliminated since February 2007.
DEARBORN, Mich. - Ford Motor Co.reported Thursday morning a whopping second quarter
net loss of $8.7 billion, the largest quarterly loss in its history.
Ford's loss includes an $8-billion write-down to essentially restructure the company by massively realigning its North American product portfolio to put more emphasis on fuel-efficient small vehicles and reconfiguring its manufacturing operations.
"We continue to take decisive action in response to the rapidly changing business environment and remain absolutely committed to the four elements of our business transformation plan," said Ford President and CEO Alan Mulally in a statement. "Our European and South American operations are robust and profitable. We have momentum in Asia. And we are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America."
The London paper said the prospect of the Merseyside plant being used for the venture was raised on Tuesday by GM Europe President Carl-Peter Forster after meeting with British Prime Minister Gordon Brown at the British motor show, which opened this week.
The U.S. market's crash-dive to downsize appears to have hit even Honda Motor Co. Ltd., one of the few automakers that so far has managed relative immunity from the weakening sales climate largely because of the preponderance of small and fuel-efficient models in its lineup: wire services reported the company plans to reduce production of two of its largest models, the Pilot crossover and Odyssey.
BIRMINGHAM, Mich. -- Even the developments in the U.S. auto market this summer -- disastrous as they have been for the Big Three and even Toyota - have a flipside. It's called Mini.
The BMW AG-owned, British-built lineup has been taking advantage of its unique positioning as the American market's only all-small, all-premium car brand to post a 34-percent sales increase over a year ago.
Given the anticipated intensification of these market trends, and the quickening pace of the company's product introductions, executives of Mini USA believe that they can build quickly and significantly on the success they've already enjoyed.
WARREN, Michigan - Nobody, and we mean nobody, is arguing the all-new 2010 Chevrolet Camaro, unveiled in production form for the first time here - isn't a great-looking modern interpretation of the brand's iconic pony car.
But everybody knows the shelf-life for even the best-looking coupes is slightly less enduring than a Hannah Montana tune. Sure the Camaro looks magnificent now, half a year before it even begins production. But it'll be languishing on dealer lots by the time the calendar catches up with the car's model-year designation, as is the case with all coupes.
Think again, said Ed Peper, Chevrolet general manager. He's so ecstatic about how well the production car's sheetmetal has translated from the universally acclaimed concept car that he is insistent the new-age Camaro's visual appeal will far exceed the 18 to 24 months coupes historically remain popular with their nefariously trendy clientele.
Entrepreneur Malcolm Bricklin, famous for successfully establishing Subaru of America and infamous for bringing the failed and quality-deprived Yugo to the States, announced Monday he has sued Chinese automaker Chery Automobile Co. along with some of its affiliates and officials for corruption, stealing his ideas and reneging on a contract to make him the exclusive North American distributor of the China-built Chery cars.
DETROIT - Here we go again, as General Motors Corp. once again unveils a host of coming models to reassure a jittery Wall Street, a speculating media and fleeing investor base that the company not only is on solid financial footing but that it has some decent stuff in the product pipeline.
Detailed
imagesof pending new product were shown in this week's presentation to media, analysts and the financial community to accompany GM's announcement that it is trimming its white-collar ranks, cutting more pickup production,scaling back investment in next-generation fullsize pickups and SUVs - and will seek capital infusion if reasonable credit terms present themselves.
Ending speculation that began last year when Volkswagen Group officials confirmed the company was planning an all-new assembly plant in the U.S., the Volkswagen Group of America announced this week the plant will be built in Chattanooga, TN.
VWoA says in a release the new plant, adjacent to the vital I-75 north-south transportation corridor, will have capacity for 150,000 units and one of the products will be "a new midsize sedan designed specifically for the North American market."
General Motors CEO Rick Wagoner, outlining to employees, the media and the investor
community how the automaker will generate $15 billion in cash throughyear-end 2009, announced Tuesday the automaker will cut more truck and SUV production, suspend the dividend,eliminatesalaried costs by20 percent and eliminate health care coverage to salaried retirees when they reach age 65.
Wagoner said the strategic review of the Hummer brand is continuing and the focus on GM's other brands is on profit improvement.
"Today's actions, combined with those of the past several years, position us not only to survive this tough period in the U.S., but to come out of it as a lean, strong and successful company," Wagoner said.
General Motors announced that Chairman and CEO Rick Wagoner will hold a news conference and a conference call with analysts Tuesday morning to discuss actions the company is taking "to align the business to current market conditions."
No details were provided ahead of the announcement. However, Reuters reports the announcement will include white-collar job cuts, including some in engineering. Those job cuts will reflect a shift in emphasis away from developing and marketing trucks and SUVs, a person familiar with the matter told Reuters.
GM already announced plans to close four truck plants in North America that employ 100,000 workers.
DETROIT - Following the lead of rival General Motors Corp., Chrysler LLC weighs in with its own zero-percent/72-month financing incentive - but specifically to help clear the decks of '08-model Ram pickups prior to the pending launch of an all-new Ram for '09.
Chrysler announced Thursday the special financing deal on 2008 light-duty versions of the Ram Quad Cab and Mega Cab - for "fans of the current model." The company says the zero-percent incentive (plus a an extra $1,000 bounty for financing with Chrysler) will run only through the end of July, but as has been the case with recent incentives - not to mention the heavy stocks of unsold pickups - there's every reason to believe the deal may be extended past July 31.
Following the lead of its Detroit-based rivals, Toyota Motor Corp. is resigning itself to the fact high-priced gasoline has driven a stake into the heart of pickup-truck sales, announcing yesterday it is suspending production of its Tundra fullsize pickup and essentially removing an entire plant's worth of Tundra production from its future manufacturing mix.
What's replacing Tundra? Manufacturing - for the first time on American soil - of the high-efficiency Prius hybrid-electric vehicle.
A Toyota spokesman says capacity for Prius at the company's under-construction plant in Blue Springs, MS, will be around 120,000, "but that number has not yet been finalized. Toyota is studying the matter further."
Russia sped by Germany as Europe's biggest car market in the first half of this year, with Chevrolet being the best-selling brand there, the accounting firm of PricewaterhouseCoopers LLP reports.
First-half sales in Russia rose 41 percent to 1.65 million cars. The accounting firm said spending on vehicle increased 64 percent to a record $33.8 billion, buoyed by $27 billion in sales of Chevrolet and Hyundai models. Almost half of Russia's car sales are imports, with Chevrolet being the No. 1 seller for the first half. Hyundai ranks second and Ford is third.
The business world enjoys some leftover fireworks to start the week following a Wall Street
Journal report that General Motors Corp. likely will cut into its white-collar ranks and may be ready to take a tougher stance on the always controversial subject of paring its brand portfolio.
Discussion about GM's strategies and financial health has intensified recently, coming to a head last week with a downgrade from a major financial institution and revival of talk that GM could be facing conditions leading to bankruptcy. The Wall Street Journal
last week also ran a story questioning the effectiveness of leader Rick Wagoner's 8-year tenure as CEO and the industry has begun to buzz about whether Wagoner can or should remain at his post in light of GM's seemingly degenerating financial and competitive situation.
Led by a startling drop in the stock price of General Motors Corp. to a low not seen in 50-plus years, several major auto suppliers also are along for the wild and not-so-enjoyable ride.
GM's stock price, which had stumbled into single digits earlier this week, recovered slightly just before the market's long pause for the Fourth of July holiday weekend, closing at $10.18.
And as GM goes, so go the suppliers, apparently -- some of whom had marched to reasonable recoveries earlier in the year. But as analysts downgrade GM and other major automakers such as Ford Motor Co., the fortunes of their major suppliers are slipping as well, some also into concerning territory.
Mega-supplier Visteon Corp., for one, this week slid to its lowest price since the company was spun off from Ford in mid-2000. Visteon closed Thursday at $2.18, off nearly 75 percent from this time just a year ago.
ArvinMeritor Inc., which supplies numerous components for both the auto industry and similarly hard-hit trucking sector, also approached a low not seen since its inception in 2000. The company also appeared to be rebounding after tumbling late last year, but now at $10.75 stands with a stock price that has receded nearly two-thirds from its 2002 high point.
Even BorgWarner Inc., supplier of in-demand turbochargers and all-wheel-drive systems and widely considered one of the healthiest of major automotive suppliers, has endured a dip in its stock price of nearly 30 percent just since mid-May.
Zero-percent financing deals aren't anything new to the industry, but General Motors Corp.'s latest riff on that old tune appears so far to have generated some success, even in these most desperate of times for auto sales.
According to exclusive data from Edmunds.com, sales of select GM vehicles -- mostly trucks -- may have enjoyed a shot in the arm from the zero-percent-for-up-to-72-months spiff, which originally was supposed to run only for the final week of June, but GM not unexpectedly extended through the July 4 holiday weekend.
Chrysler announced it will extend its $2.99 gas-price guarantee program through July 31. But that's the end.
The Let's Refuel America, launched this spring and set to expire July 7, will go out with a bang as Chrysler adds cash incentives to the three-year gas-price guarantee on more models. Chrysler also will promote the $2.99 gas guarantee even more heavily than before, including with YouTube testimonials.
"This is for last chancers," said Michael Keegan, Chrysler vice president of volume planning and sales operations, in a conference call with the media late Tuesday.
NEW DELHI - India's Tata Motors confirmed Tuesday it expects to start manufacturing the
$2,500 Nano at a new factory in the fourth quarter of this year, has expansion room to produce the Nano for foreign markets and has more Nano variants under development.
Tata Motors Chairman Ratan Tata told shareholders in the company's annual report, as reported by Dow Jones, that the acquisition of Jaguar and Land Rover from Ford, a $2.3-billion deal completed earlier this month, will add "global scale, profits and visibility to Tata Motors, enabling it to take its place in the global auto industry as a credible international automobile company."
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 HuffingtonPost'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.
Ford's Volvo Car Corp. announced plans to cut 2,000 jobs as parts of its efforit to slash costs by about $700 million.
The move triggered speculation from a number of European media outlets that Ford was once again considering possible sale of Volvo. Such reports included Ford negotiating with General Motors' Chinese partner Shanghai Automotive Industries Corp. (SAIC) and unnamed Russian investors.
After showing immense restraint in its use of massive incentives by trying to keep production in line with demand for its vehicles, the Detroit automaker Monday announced a fire sale: zero-percent financing for 72 months on most of its models through the end of June.
"This is an absolute screamin' deal," said Mark LaNeve, GM vice president in charge of North American sales, in a conference call with the media.
DEARBORN, Mich. -- Ford announced Friday morning that it will delay theintroduction of its redesigned 2009 Ford F-150,the automaker's bread-and-butter vehicle,because of weakening vehicle sales that have taken a tremendous toll on large pickup truck sales.
In addition, Ford said it would cut production through year-end by 90,000 vehicles, mostly trucks and SUVs. It will boost production of small cars, crossovers and fuel-efficient powertrains. Ford also announced future plans to bring small cars in from Europe.
The bottomline is that Ford's financial performance for 2008 will be worse than the automaker had forecasted.
LAURENS, South Carolina -- It hasn't yet made any major moves, but German Tier 1 supplier ZF Friedrichshafen AG has its eye on the fluid currency exchange-rate environment, conceding the eroded dollar means the U.S. now can be viably considered as a potential low-cost manufacturing region.
ZF, primarily known for its transmission development and manufacturing, also is a prime maker of all manner of chassis, driveline and steering components, and already has more than 20 facilities in North America, said Paul Olexa, vice president of driveline sales, ZF Group North American Operations, at a recent media event here.
But Olexa said ZF is carefully watching the currency situation -- and the moves of several German automakers that long have been the company's chief customers. ZF has considerable content in Daimler AG's Mercedes-Benz and BMW AG vehicles built in the U.S. respectively at Vance, Alabama, and Spartanburg, South Carolina -- and both companies have jacked up plans for U.S. production in response to the weak dollar.
On the eve of reporting May sales, Toyota is considering downgrading its 2008 U.S. sales forecast even further to account for deteriorating sales of pickup trucks and other large vehicles.
Toyota President Katsuaki Watanabe to London's Financial Times, in an interview published in Monday's edition, that while the automaker hoped to make up for the lost sales of its full-size Tundra pickup and sport utilities like its Toyota Sequoia by selling more smaller cars such as its Yaris, Corolla and Prius, he was "not sure" this would be enough to offset the drop in large vehicle sales.
"As of now we haven't changed our original annual plan yet, but we may have to scale back," Watanabe told the Financial Times. He said Toyota would revisit its U.S. forecast at a mid-year business review later this month.
TOKYO -- Take a Honda Fit, move it up a class with new sheet metal, addtwo or three rows of seats and you're starting to get an idea of the Freed, Honda's innovative new mini minivan that's just launched in Tokyo.
Smaller than a Civic but with room to squeeze in up to eight people thanks to some highly astute packaging, the 1.5-liter, slant-nosed Freed is not headed for the United States anytime soon but might conceivably open up a new niche segment if it did, especially in light of skyrocketing gas prices and the American consumer's growing preference for smaller, fuel sippers.
The Department of Transportation (DOT) reported figures from March showing the steepest decrease in driving ever recorded.
Americans drove an estimated 4.3 percent less in March compared with a year ago. That's 11 billion fewer miles. The DOT's Federal Highway Administration called it "the sharpest yearly drop for any month" in the history of the administration, which has been keeping records since 1942.
Ford said Thursday it likely will not hit its target to be profitable in 2009, but will just break
even, due to the deteriorating economy, soaring gas, steel andother commodity prices and a dramatically shifting consumer preference toward fuel-efficient cars and crossovers from more lucrative trucks and SUVs.
Ford, which lowered its forecast for 2008 industry sales, announced a major revision to its 2008 vehicle production schedule. The automaker will reduce the total number of vehicles it will produce for the rest of the year. It will increase production of, especially fuel-sippers like the Ford Focus, and decrease its production volume of trucks and SUVs.
Despite its mixed results with hybrids in the past, Honda sees the future being hybrids, and ultimately fuel-cell vehicles.
To that end, Honda plans to introduce four new hybrid models by 2015 to meet its eventual goal of selling 500,000 hybrid vehicles a year, a nearly tenfold increase from its current hybrid volume.
Speaking in Tokyo at the company's mid-term business meeting, Honda President Takeo Fukui confirmed what has long been known -- that Honda is working on its own take on the Toyota Prius, an affordable hybrid-only car, which Fukui said will be launched in the U.S., Japan and Europe in early 2009. He also announced Honda will introduce a hybrid version of the sporty CR-Z (pictured) and add a hybrid version of the tiny, already fuel-stingy Fit.
"It is important to move hybrid vehicles, from the current image-oriented stage to the new stage toward full-scale penetration," Fukui said in his speech.
General Motors has reached a tentative local agreement with striking UAW workers at its
Fairfax, Kansas, plant, which builds the Chevrolet Malibu and the Saturn Aura. Both models have bucked the industry's downward trend so far this year.
Workers are voting on the contract Wednesday and could be back on the job, with the hot-selling Malibu back in full production, by Thursday. The strike and sheer popularity of the new Malibu have left GM short of supply. Edmunds.com's analysis shows the Malibu with an extremely low 26 days-to-turn rate, meaning it takes only 26 days for the Malibu to be delivered to the dealership and driven away by a new owner.
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."
Chrysler is extending its $2.99-a-gallon gas-price guarantee program through July 7 due to
its overwhelming success in driving traffic to showrooms and increasing sales, the automaker said.
"We are pleased that Let's Refuel America seems to resonate with many Americans during this time of gas price volatility," Chrysler President and Vice Chairman Jim Press said in a company statement.
WARREN, Michigan -- General Motors inched closer to making the Chevrolet Volt a reality in November 2010 as thevehicle's innovative gas-electric powertrain is being test-driven for the first time on public roads and is hitting its target of 40 miles on pure electric power.
"Today is a big day," GM Vice Chairman Bob Lutz told Edmunds' AutoObserver in an exclusive interview Tuesday. "Today is the first day it is running on the street on battery power."
Lutz said the Volt's powertrain, comprised of an advanced lithium-ion battery and a small gasoline engine, was installed into a mule vehicle and is being driven on public roads around the automaker's proving grounds in Milford, Michigan. More important, Lutz said, the battery is hitting GM's goal of 40 miles on pure electric power.
Daimler AG, after a 20-year absence, plans to open an office in Baghdad by year-end, a display of confidence that Iraq is stabilizing.
A Daimler spokesperson told various media outlets Tuesday that the office is intended to establish the German auto and truck maker’s corporate presence in Iraq more than generate immediate sales.
General Motors plans to announce Thursday a second partnership with a cellulosic ethanol maker. The automaker is providing no further details until GM President Fritz Henderson makes the announcement in Washington, D.C.
GM already has announced a partnership with an Illinois-based cellulosic ethanol maker, Coskata Inc., and last week said Coskata was establishing a pilot plant in Pennsylvania to demonstrate its innovative process of converting a variety of materials, from garbage to agricultural waste, into ethanol.
GM's partnerships for developing cellulosic ethanol come against a backdrop of increasing outcry for the industry to quit using corn-based ethanol, as food prices rise.
Previously more optimistic than other automakers, General Motors Wednesday announced it had downgraded its U.S. vehicle sales forecast for 2008. GM now expects industry sales to come at in the mid to high 15 million units range, instead of the low 16 million. GM had predicted some upturn in the second half.
GM President Fritz Henderson, in a conference call with analysts and media on first-quarter earnings Wednesday, said April sales, which will be reported Thursday, look like the weak sales throughout the first quarter.
Oil prices set yet-another record Monday of $120 a barrel. The record price was spurred on by a weekend refinery strike that closed a pipeline delivering a third of Britain's North Sea oil to refineries in the United Kingdom and supply outages in Nigeria.
For Volkswagen Group of America executives, life is about as good as it can be right now -- given that U.S. car sales are at their lowest level in a decade, their dealers are starved for product, and the parent company still hasn’t figured out how to offset the growing currency-exchange disadvantage of producing in euros the vehicles that they sell in the United States.
Their good cheer results from the fact that VW has bucked the trend and posted a first-quarter increase in U.S. sales, including a 13% gain in March, and that a record five new and re-launched models will be streaming into dealerships as the year unfolds.
And one more thing: “Max†is now on the prowl. The personification of a black 1964 Beetle is the “mascot†of an ambitious new advertising and marketing campaign for Volkswagen called Das Auto, German for “the car.†The campaign “will build on Volkswagen’s unique place in pop culture through its message of ‘It’s What the People Want,’†Volkswagen Group said in a statement.
It’s beginning to sound like a broken record playing over and over again: oil struck a new high Wednesday – above $114 a barrel -- $114.41 to be exact. The price is more than three times the average price of 2002, when oil’s rally began, Reuters reported.
Another oft-repeated refrain: the U.S. dollar was headed toward a record low against the euro Wednesday on news of disappointing quarterly earnings announcements by major U.S. corporations.
Oil set new record highs above $113 a barrel Tuesday. Oil is up 18 percent from the start of the year when it was averaging about $100 a barrel.
Meantime, the dollar was at near record lows against the euro Tuesday. The weak dollar tends to cause the price of commodities like oil to rise as investors look for a hedge against inflation.
John Herlitz, the Chrysler designer who penned the legendary 1970 Plymouth Barracuda as
well as the 1971 Plymouth Road Runner, numerous concept cars and important recent production cars, died last month at the age of 65. A memorial service was held Saturday.
Upon graduation from Pratt Institute, Herlitz began his career at Chrysler in 1965 as a manager of the Plymouth Intermediate Car Studio. He retired in 2000 as senior vice president of design.
Herlitz made his mark with the classic American muscle car, the 1970 Plymouth Barracuda. His Barracudas, especially those with powerful Hemi engines, currently fetch millions of dollars at auction from collectors.
The strike by United Auto Workers union employees against Detroit parts supplier
American Axle & Manufacturing Inc. is headed its seventh week with no end in sight, and it is threatening to close General Motors' assembly plants that produce some of the automakers most popular vehicles, including the 2008 Chevrolet Malibu.
In the latest development, the UAW rejected the company’s request to bring in a federal mediator to settle the strike.
Ford CEO Alan Mulally showed dealers the next-generation Ford Taurus behind closed doors at a Las Vegas gathering. The Taurus is believed to be scheduled as a 2010 model and could be unveiled at the Detroit auto show in January.
Ford has given no official details about the new Taurus to the media yet. However, last week, the Taurus Car Club of America Web site posted a hazy photo showing a far more chiseled shape and European appearance than the current model, as reported by Edmunds' InsideLine.com.
Jim Farley, Ford's group vice president for marketing and communications, told the Detroit Free Press that dealers gave the Taurus a standing ovation.
Is the U.S. headed for a recession or already in one?
The man on the street likely would say we're in one, but experts are debating it.
Former Federal Reserve Chairman Alan Greenspan said Tuesday the U.S. was in recession. On Wednesday, the International Monetary Fund's issued its latest World Economic Outlook that said the U.S. will slip into a recession that will spread globally.
Ford may own American Idol but Chrysler managed to uses the popular program to debut
its new ads for the Dodge Journey crossover.
Chrysler aired a 30-second spot it had unveiled to the media on Monday. Entitled Water Slide, the Journey crossover pulls up on a crowded city street on a sweltering day. From its flexible interior space and numerous storage spaces emerge various pieces that are used to build a 700-foot water slide, which Chrysler alleged is “the world’s largest.†Professional types quit their offices and come out to see what all the commotion is about.
The Journey’s theme line is “if you can dream it, do it.†The ad is intended to demonstrate the Journey "is a car that lets you do anything.â€
BIRMINGHAM, Mich. -- In the all-new 2009 Dodge Journey, Chrysler’s product-development pipeline has delivered what seems to be the right vehicle at the right time. Now, it’s up to the company’s marketing and sales chiefs, and its dealers nationwide, to get American consumers interested in Chrysler’s first true crossover product since the ill-fated Chrysler Pacifica.
Top Chrysler marketing executives unveiled their plans here Monday, combining confidence in Journey’s capabilities with positive reports about early sales and consumer reactions. They believe that the reasonably priced, relatively high-mileage new entry is perfectly aimed with a “value†proposition at Americans who are being made palpably anxious by belt-tightening at home and sky-high prices at the gas pump.
“If you can dream it, do it†will be the Journey’s theme line when the campaign breaks on Tuesday, spotlighting the vehicle’s combination of innovative features, versatility and flexibility.
BIRMINGHAM, Mich. -- Faced with a public that remains skeptical about the nature of Chrysler’s rebirth, the company will break a new corporate positioning campaign on April 14 that is intended to help win over American consumers.
“We want to increase consideration, re-engage with customers, and target community influencers and current owners,†said Deborah Meyer, Chrysler’s chief marketing officer, in explaining the campaign to automotive press here on Monday. It will begin with both TV and print advertisements.
Mazda plans to keep incentives in the U.S. unchanged even though sales fell more than the
overall market last month and some competitors are upping the incentive ante, Bloomberg News
reported Monday.
“We will continue to try and manage it as best as we can, not to increase it just to chase volume,'' Daniel Morris, the company's head of marketing, told Bloomberg in an interview last Friday.
A campaign now under way for the BMW 1-Series makes extensive use of nontraditional
media and is trying to promote the tiny compact coupe and convertible as a "pure BMW," The New York Times
reports.
Patrick McKenna, manager for marketing communications at BMW of North America in Woodcliff Lake, N.J., told The New York Times that the 1-Series introduction represents “the highest concentration of nontraditional media of any BMW launch.â€
Next week, Ford’s long-awaited marketing plan will be unveiled by Jim Farley, Ford’s
group vice president for marketing and communications who was lured away from Toyota last fall.
The marketing plan includes an experiential aspect taking place this weekend in conjunction with the ABC TV show "Oprah's Big Give"; a multimillion-dollar ad campaign, with the tagline "Drive One," rolls out Tuesday.
The number of consumers who fell behind on payments for their car, credit cards and home-equity loans rose to their highest level in 15 years during the fourth quarter, according to an American Bankers Association survey, which tracks payments at least 30 days past due across eight loan categories.
The overall increase was driven by late payments for car loans, which make up two-thirds of all closed-end consumer installment loans, the Washington, D.C., trade group reported. Auto-loan delinquencies rose to 1.9 percent from 1.81 percent.•
WASHINGTON, D.C. — Sure, Volkswagen Group of America is concerned about the debilitating dollar-euro exchange rate, which almost daily shrinks its profit margin on vehicles built in Europe and sold for U.S. dollars.
But new Chief Operating Officer J. Mark Barnes’ biggest concern is having enough metal to move. Barnes said dealers are practically rioting for more product. Anything will do.
Toyota announced Tuesday it is establishing a North American research institute at its Detroit-area facility and plans to spend $100 million during the next four years on advanced research.
The Toyota Research Institute of North America initially will employ 35 researchers and staff in Ann Arbor, Michigan, where Toyota already has a technical center, and plans to add 10 researchers this year and 20 more by 2010. Toyota hinted the institute will be used for its environmental efforts.
SAIC-GM-Wuling, General Motors’ mini-vehicle joint venture in China, began mini-vehicle
production Monday at its second assembly plant in the coastal city of Qingdao.
Its initial product is a new mini-commercial vehicle powered by a 1.2-liter double overhead cam gasoline engine. The facility has an annual production capacity of 300,000 vehicles and can manufacture multiple vehicles on the same line.
The United Auto Workers union reported its membership dropped below a half-million people for the first time since World War II.
In U.S. Labor Department filings, the UAW said it closed 2007 with 464,910 members, a decline of 14.7 percent or 73,500 members from the previous year and more than two-thirds below its peak of 1.5 million members in 1979. It marks the union's low-water mark of membership since 1941.
SANTA MONICA, Calif. — Edmunds.com has enhanced its Web site to make it easier for consumers to write and submit their own ratings and reviews of vehicles at Edmunds.com/carreviews.html. The changes affect pages viewed by millions of consumers on monthly
In an event that provides ammunition for global-warming doomsayers, a 160-square-mile portion of a massive Antarctic ice shelf “collapsed†earlier this week, according to an Associated Press report.
The gargantuan chunk of disintegrating ice was about seven times the size of Manhattan island, but was just a 4 percent portion of the Wilkins ice shelf in western Antarctica from which it finally broke off after scientists noted the beginning of its “runaway disintegration†Feb. 28, the AP story said.
This news ought to go over well on the picket line: Supplier American Axle & Manufacturing Holdings Inc., the Detroit automotive supplier embroiled in a strike now entering its fifth week, boosted the total compensation for CEO Richard E. Dauch by 9 percent after he restored the company to profitability last year.
Dauch's pay package, including salary, stock and option awards, and change in pension value, rose to $10.2 million from $9.3 million, the company said in its annual proxy statement filed Monday and cited by Dow Jones. Four other top officers also got raises.
Meantime, the company has told workers — 3,650 of them United Auto Workers union members who have been walking the picket line since Feb. 26 — they must reduce wages and benefits by more than half to compete against lower-cost rivals.
General Motors and UzAvtoSanoat have established a joint venture to manufacturer and distribute vehicles in Uzbekistan. GM said the joint-venture company will play a defining role both in the automotive industry of Uzbekistan and in the continued, rapid global growth of GM’s largest brand, Chevrolet.
GM said the new joint-venture company, called General Motors Uzbekistan, has the potential in the mid-term to build as many as 250,000 Chevrolet models in the country and distribute a variety of Chevrolet cars and SUVS through a network of more than 60 dealers.
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.
NEW YORK — Chrysler President and CEO Robert Nardelli reassured his audience of automotive reporters, often skeptical of late about the automaker's future, that a private-equity firm such as Cerberus Capital Management can build a car company like Chrysler back to greatness.
Nardelli was the keynote speaker Wednesday at the International Motor Press Association's breakfast kicking off press days at the New York International Auto Show.
NEW YORK — When the call went out that New York City wanted to reinvent
the venerable taxicab to bring it into the 21st Century, Ford — already the leading provider of cabs nationwide — responded using an upcoming model as its basis.
Ford unveils its concept of the futuristic taxicab based on the Ford Transit Connect at the New York auto show Wednesday.
DUBAI, United Arab Emirates — British luxury car maker Aston Martin Lagonda Ltd. UK is being sued for
$50 million by its distributor in Dubai, Middle East Aston Martin, for breach of contract.
The lawsuit contends the strained relationship between Middle East Aston Martin (MEAM), the exclusive distributor of Aston Martin cars in the region, and the parent company to which Ford sold the bulk of the company a year ago is due “to the entrenched interests of its majority shareholder, the Kuwaiti investment group DAR, and their intention to refinance its stake in the company which had been purchased in March 2007, allegedly for an overprized rate.â€
Trouble has been brewing for months, but now it looks as though Volkswagen’s two largest shareholders are headed for a showdown at the automaker’s annual general meeting next month. Last week the two sides clashed — again — over who should have the say at Europe’s largest carmaker, the Financial Times reports.
NEW DELHI, India — General Motors said Monday it plans to build a second minicar in India, only a year after it launched its first one — the Chevrolet Spark — there, Dow Jones Newswires
reported.
Dow Jones quoted GM’s president of Asia Pacific operations, Nick Reilly, saying: “We believe there is space for us to have another entry in the minicar segment in India.â€
Reilly said the new minicar, which he did not identify, could be introduced within two years, could be exported from India and will be built at GM’s second plant in India. The new plant is just now gearing up for full production by the fourth quarter of this year. GM has invested $300 million in the plan to build 140,000 vehicles a year.
Ford beefed up its global management team with the elevation of five executives to group vice president reporting directly to Ford CEO Alan Mulally and naming a chief operating officer in Europe.
Since his arrival more than 18 months ago, Mulally, a former Boeing executive, has said repeated like a mantra that he wants Ford to be a truly global car company a la Toyota, not a global carmaker made up of a disparate regional units.
Toyota Motor Corp. has confirmed it is planning to cut production at truck-assembly plants in Texas and Indiana because of the economic and vehicle-sales slowdown.
Toyota is trimming production at its San Antonio plant that builds the full-size Tundra pickup truck, introduced a year ago, and at its Princeton, Ind., plant, which builds a mix of trucks and full-size sport-utility vehicles, including the newly redesigned Sequoia.
Toyota will not say how much it is cutting production at those plants.
Edmunds.com’s new Car Stock Exchange already is exhibiting some “natural resonance†with online automotive enthusiasts, which “suggests that it may catch on†for the long term, said CEO Jeremy Anwyl.
Less than two weeks after its official launch, the Car Stock Exchange — where consumers invest virtually in the sales performance of their favorite vehicles — “is running ahead of what we thought,†said Anwyl.
“There’s already a lot of buzz building that we didn’t necessarily anticipate right away. There are some small but rabidly loyal audiences (of car enthusiasts) that are already chattering about this thing quite a bit.â€
General Motors Corp. appears to have set the stage for shuttering its SUV assembly plant in Moraine, Ohio, by offering buyout packages to the 2,346 union-represented workers there.
The plant builds GM’s aging midsize SUVs, the Chevrolet TrailBlazer, GMC Envoy, Saab 9-7X and Isuzu Ascender — and it has long been thought GM plans to close the Moraine plant, near Dayton, as it moves to a new generation of more refined crossover vehicles built elsewhere.
More than 30,000 General Motors employees from 19 different plants could be idle by Monday as the fallout from the United Auto Workers strike at American Axle & Manufacturing Inc., now in its second week, spreads, GM officials reported Thursday.
General Motors said it would close another assembly plant, and still another is at risk for closing due to a strike by workers against Detroit-based supplier, American Axle & Manufacturing Inc.
At the same time, bargaining teams for the company and the United Auto Workers union, which represents the hourly employees at American Axle, were scheduled to resume negotiations Thursday, for the first time since the strike began Februrary 25, largely over wages.
WINDSOR, Canada — Chrysler has resumed production of its 2008 Chrysler Town & Country and 2008 Dodge Grand Caravan now that one of its key suppliers of minivan parts has settled a strike by its workers.
The Canadian Auto Workers and supplier TRW Automotive have settled a contract dispute that had halted production of minivans at Chrysler’s Windsor, Ontario, assembly plant since last week. Workers received higher pay from the deal.
Ford is promoting its new 2009 Flex as a “white-space vehicle†that will be delightfully difficult to categorize. For the privilege of purchasing the flat-topped, three-row vehicle, consumers will have to pay a suggested starting price of $28,995, including shipping charges — a beginning price point that will put Flex atop the automaker’s growing lineup of crossovers.
When it is introduced this summer, the Flex will be offered in three trim series, and in front-wheel-drive and all-wheel-drive versions. Flex SE is the base model, a front-wheel-drive version. Prices for the all-wheel-drive Flex Limited will start at $37,255, including shipping, but options could make the top price much higher.
The politicians in Washington aren’t on the same page on every issue with the U.S. auto industry. But it’s increasingly clear the most important of them see eye to eye with some major automakers when it comes to cellulosic ethanol.
Remaining presidential candidates have made a point of touting cellulosic ethanol — which can be made from a number of sources other than corn — as an important alternative fuel. On Thursday morning President Bush added to the chorus of support at his White House news conference. He emphasized cellulosic ethanol as a crucial part of the short-term answer to problems of fuel pricing and availability, as well as a long-term solution.
A new report by the European Union (EU) estimates 16 million hydrogen-powered vehicles will be traveling European roads by 2030, dramatically reducing oil consumption but requiring lengthy and expensive infrastructure changes.
The use of hydrogen fuel is a realistic alternative to fossil fuels and could cut oil consumption by 40 percent by 2050, but infrastructure investments could cost the equivalent of nearly $90 billion (based on today’s exchange rates), says the EU’s research, reported on by Dow Jones Newswires on Tuesday.
More than 3,650 members of the United Auto Workers (UAW) began a strike early Tuesday against American Axle & Manufacturing Holding Inc., a key supplier to both General Motors Corp. and Chrysler LLC, which could quickly feel the impact of the walkout.
The strike began shortly after midnight when the company and union negotiators reached an impasse over wage cuts for employees at American Axle plants in Michigan and New York.
News from the U.S. financial media cites a report from Japan as saying Toyota Motor Corp. plans to fund several new advanced-research groups in the U.S.
Media in Japan are reporting Toyota will establish new U.S.-based research teams for alternative energy, safety and advanced materials. The company typically has engaged such long-term research only in Japan.
Nissan Motor Co. said Monday it aims to sell 500,000 passenger and light commercial vehicles in China this year as it launches three new models, including the Qashqai in March, Dow Jones reported.
The Japanese automaker will launch three new models under the Nissan brand in China this year, Nissan said in a statement. The first new model will be the Qashqai, or Xiaoke, a crossover between a hatchback and a sport-utility vehicle that goes on sale in March. The other models weren’t mentioned.
The world’s cheapest car finally has an on-sale date.
When it appeared January 10 at the New Delhi Auto Expo, the Tata Nano amazed everyone with its rock-bottom starting price of $2,500. Tata Motors executives explained how and why the company chose to build such a low-cost car, but no one would go on the record to say when the Nano would go into commercial production.
Maserati North America Inc., announced Thursday that James Selwa, president and CEO, has left Maserati, effective Friday.
The Italian automaker said Maserati CEO Roberto Ronchi will continue to directly oversee the market in coordination with the Maserati North America team.
Launched at the New Delhi Auto Expo to a frenzy of worldwide interest, the Tata Nano city-car is coming to Europe within four years, according to Reuters.
The Nano was the unequivocal star of the New Delhi Auto Expo in early January, where it was announced the car’s Indian-market price will begin at only “1-lakh,” the equivalent of $2,500. About the only thing louder than the waves of applause during the Nano’s debut was the sound of other automotive executives’ jaws hitting the floor.
The U.S. distributor for Indian automaker Mahindra & Mahindra Ltd. told dealers Monday it plans to assemble tens of thousands of light pickup trucks annually in Ohio starting in 2009, and to start selling a range of hybrid vehicles in the U.S. by 2010, the Wall Street Journal reported Monday afternoon.
Mahindra, which was defeated in a bidding contest by rival Tata for Jaguar and Land Rover, has partnered with Atlanta-based Global Vehicles USA, which will distribute the vehicles, establish marketing plans and manage a network of hundreds of dealers that have signed up to sell Mahindras throughout the U.S., the newspaper reported.
Chrysler has launched what it calls Project Genesis, a plan to reduce the
number of models it sells and consolidate Chrysler-Dodge-Jeep franchises under a single dealership roof.
Chrysler’s announcement comes on the eve of the National Automobile Dealers Association convention, wich kicks off this weekend in San Francisco. In the company’s statement released in the wee hours of Friday morning on its Firehouse Web site, Chrysler Vice Chairman and President Jim Press said he and his team will discuss the plan with dealers at the convention.
United Auto Workers President Ron Gettelfinger said Sunday the union will work hard to elect a Democrat to the White House, but said the union would not endorse either Senator Hillary Rodham Clinton, D-N.Y., or Senator Barack Obama, D-Ill., for the Democratic nomination.
“The stakes in this election could not be any higher. Our jobs are on the line,” Gettelfinger told an assembly of about 1,000 union activists gathered in Washington for a conference. More than 3 million manufacturing jobs in the U.S. have been lost since January 2001, he noted.
Gettelfinger said the union will support the Democratic presidential candidates with money and sweat equity.
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.
Chrysler is trying to leverage the positive aspects of its ownership change in a new marketing campaign that breaks Super Bowl Sunday, while attempting to move consumers past the muddle created by the automaker’s acquisition by Cerberus Capital Management last summer.
Under the theme “New Day,†Chrysler’s ads will emphasize the company’s responsiveness to customer and dealer feedback by promoting the fact that it approved 260 “line-item†improvements to its products within the two months after Cerberus took Chrysler private, and that its new promotional packages offer many “extras†at no additional charge.
Porsche sold 2,595 cars in the U.S. in January. Although its sales fell 13 percent, January 2008 still came in as the German sports car maker’s third-best January ever.
Porsche sold 174 Boxster models, up 26 percent form a year ago. Cayman sales rose 11 percent to 539 vehicles.
Porsche said Cayenne sales dropped 28 percent to 1,008 vehicles due to low inventories of the SUV.
The 911 had sales of 829 units, down 10 percent from last year’s January record.
Volkswagen had January sales of 14,411 units, a 13.2 percent decrease from a year ago.
Sales of Volkswagen's core products were off by double digits. Jetta sales were off nearly 15.7 percent; Passat sales nosedived 24.5 percent. Touareg sales plummeted 47.4 percent.
Ford is forecasting a fifth consecutive year of European profit as new models
such as the Focus, Kuga and Verve boost sales in the region.
"We should have a solid year of profit,'' John Fleming, Ford of Europe chief, said in a telephone interview with Bloomberg News Friday from his office in Cologne, Germany. "I certainly intend for sales to be better in 2008 than in 2007.''
Chrysler and the United Auto Workers appear to be headed for a showdown that might be the first test of the groundbreaking labor contract negotiated last fall.
Leaders of UAW Local 412 in Warren, Mich., which represents, among others, about 100 salaried designers being laid off indefinitely by Chrysler, say the automaker is violating the new contract.
“It looks like we are at war with the company. They're doing everything wrong here,” Jeff Hagler, Local 412 president, told the Detroit Free Press.
Isuzu Motors Ltd. will get out of the U.S. consumer-vehicle market next year. Its exit comes as no surprise as the automaker has seen a steady sales decline for years, causing many to wonder how -- and why -- Isuzu and its roughly 200 dealers were hanging on.
Isuzu said in a statement it will end sales of the Ascender SUV and its pickup trucks, both supplied by General Motors, in January 2009.
Isuzu's vehicle sales have fallen 93 percent in eight years. The Japanese automaker will post a loss of about $37 million related to its exit from the U.S. over the next two fiscal years.
GMC will air its first in-game Super Bowl ad Sunday when the General Motors division shows off its new Yukon hybrid in a 60-second commercial during the second quarter of Fox’s broadcast of the game.
GMC Marketing Director Steve Rosenblum told AutoObserver the division has “had plenty of ads during the pregame shows†on previous Super Bowl Sundays “but we haven’t had one in-game as far as I can remember.â€
GM’s announcement that GMC would occupy its single in-game slot Super Bowl Sunday ended an internal derby of sorts for what brand or products would land the spot.
Volkswagen has said it will build an assembly plant in the United States, a decision that could come this year. Now the German automaker appears to be looking at powertrain production in North America as well.
The German magazine Automobilwoche reported over the weekend Volkswagen plans production of engines and transmission in North America to reduce its exposure to the U.S. dollar exchange rate.
MALAGA, Spain -- Never one to run with the crowd, Subaru has just released the world’s first 2.0-liter Boxer Diesel engine in European versions of the Legacy and Outback.
A Boxer Diesel?
Think of it as a brand-new, clean sheet, four-cylinder horizontally opposed turbodiesel engine, developed completely in-house by Subaru and conceived exclusively for European markets.
The Associated Press reports this week a special panel is recommending a significant increase in federal gasoline tax that would more than double today’s rate. If fully phased-in, the new tax rate could add 40 cents to the price of a gallon of fuel.
In addition to the continually escalating price of gasoline and a burgeoning environmental consciousness in all consumer-goods sectors, the proposed gas-tax increase could be another factor that accelerates automakers’ need to “remix” their U.S. product lineups toward more fuel-efficient offerings.
Sen. Debbie Stabenow, D-Mich., told AutoObserver Wednesday that one of her top priorities, now that the new energy bill is passed, is to procure federal funding to help automakers meet the recently passed more stringent fuel economy standards.
"I'm laser-focused" on the issue, Stabenow said. In particular, she said she wants to see funding for development of lithium-ion batteries, currently produced by overseas companies yet a critical element to make future hybrid and range-extending vehicles like the Chevrolet Volt, viable. Having U.S. battery makers is a national security issue, she said.
WARRENVILLE, Ill. –- Here in a cluster of tiny laboratories, in a nondescript one-story office building, in a cookie-cutter industrial park in suburban Chicago, scientists and engineers –- as of Sunday, officially partnered with General Motors –- may be coming up with one of the most feasible solutions yet to the wrenching problem of global dependence on oil for gasoline.
It’s called cellulosic ethanol. It’s created by proprietary strains of bacteria that convert farm waste, wood chips, old tires, landfill plastic and a whole bunch of other organic materials into ethanol. The process was licensed and is being commercialized by a startup called Coskata Inc.
Specifically, the promise is that Coskata plans to produce enough cellulosic ethanol here by later this year to begin fueling the GM test fleet at the Milford (Michigan) Proving Grounds. And if that works, Coskata projects that it could be running its first commercial-scale plant, producing 50 million to 100 million gallons of ethanol annually, by 2011 –- including the two years it will take to build the plant.
“This can revolutionize the transportation-fuel business,” said Bill Rowe, a three-decade veteran of the water-treatment and process-chemical industry who now serves as Coskata’s CEO. “Just as important, it’s a speed-to-market play.”
The winners were announced Sunday at a news conference at the North American International Auto Show
in Detroit’s Cobo Center. However, the auto show does not give the awards.
It looked like General Motors could have a second-year sweep of the awards since it had four of the six finalists, but the Mazda soundly defeated the Buick Enclave and the Chevrolet Tahoe Hybrid. On the car side, however, GM took the most votes for the Malibu and the Cadillac CTS, with the Honda Accord coming in a distant 3rd.
A new chapter in the truck wars begin Sunday when, at the Detroit auto show, Ford officially unveils its redesigned 2009 Ford F-150 pickup truck, the best-selling truck for three decades, and Chrysler reveals the revamped 2009 Dodge
Ram pickup.
Chrysler, known for dramatic vehicle introductions like man-made blizzards and Jeeps crashing through glass, likely wins for most dramatic entrance. Word is the Dodge Ram will be introduced on the streets of Detroit amidst a Red River-style cattle drive.
DETROIT – Daimler AG’s Mercedes-Benz unit, which despite a beaten-down market managed its 14th consecutive record sales year in the U.S. and gutted out a 2 percent worldwide sales hike, wants to improve its return on sales to an ambitious 10 percent by 2010 “at the latest,†says Dieter Zetsche, chairman of Daimler’s board of management and Mercedes Chief Executive.
“Thanks to the hard work of the previous few years, we’re starting out this year from an excellent position – in terms of efficiency, quality, service and unit sales,†Zetsche says at a reception here prior to the opening of the Detroit auto show.
He says for ’08, the company will get behind two all-new products: the GLK compact crossover and the CLC coupe, a 2-door hardtop based on the mechanicals of the recently launched, all-new C-Class.
Chrysler LLC and Nissan Motor Co., Ltd. announced Friday they have signed an
agreement for Nissan to supply Chrysler with a new car -- one based on the Nissan Versa sedan -- for limited distribution in South America beginning 2009.
The two companies have also agreed "to maintain an open dialogue to explore further product-sharing opportunities," the automakers said in a statement.
"This kind of tactical partnership allows us to maximize product offerings yet minimize costly investments, such as new plant infrastructure, tooling and R&D," Chrysler LLC President and Vice Chairman Tom LaSorda in a statement. "This partnership will give Chrysler nearly immediate access to vehicle segments in which we do not currently compete."
Luckily not every new small car wearing a Tata badge sparked a media feeding frenzy here at the New Delhi Auto Expo. While the star of the Tata Motors stand is undoubtedly the $2,500 Nano, the revised Indica hatchback is just as vital to the Indian company’s long-term financial health.
As Tata’s best-selling passenger car – and one of the most popular cars in India – any revision to the supermini-sized Indica hatchback has to be taken seriously. The changes to the current version have been minimal, though they should provide noticeable improvements in terms of refinement and power.
Leaders from strategic auto industry sectors will discuss future sustainability trends in the auto industry at a breakfast meeting hosted by professional women’s network, Inforum, in conjunction with the Detroit auto Show on Wednesday, Jan. 16.
Michelle Krebs, editor of Edmunds’ AutoObserver.com, will moderate the “Beyond Green: Unraveling the Sustainability Mystique” panel discussion. Panelists will be: Charlene Wall, leader of Strategic Business Development for BASF Corporation; Sue Cischke, senior vice president -- Sustainability, Environment and Safety Engineering, Ford Motor Company; and Catherine Greener, vice president -- Consulting, ACT NOW.
NEW DELHI, India -- A dismal grey paint job didn’t help this concept car’s
chances. Neither did the fact that the Tata Nano, unveiled less than 48 hours later and priced $500 cheaper, ended up looking much more serious and production-ready.
On Tuesday, Bajaj Auto pulled the covers off of what is informally known as the “1.2-Lakh†concept car here at the New Delhi Auto Expo. Best known as India’s second largest manufacturer of scooters – and the maker of those ubiquitous three-wheeled tuk-tuks that roam New Delhi’s roads – Bajaj Auto, possibly partnering with France's Renault, is looking to expand from the two-wheel market and into the realm of small city-cars.
NEW DELHI, India -- On Thursday morning, Jan. 10, Tata Motors rocked the automotive world with the unveiling of its hugely anticipated “1-Lakh†car at the New Delhi Auto Expo.
Huge crowds had gathered around the Tata Motors show stand more than three hours before the car’s official launch at 11:30 a.m. (New Delhi time).
And then the car that has been called "The People's Car" was revealed. The $2,500 Nano hatchback goes on sale in India later this year, and exports are planned within three years time.
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.
NEW DELHI, India -- Like three playground bullies fighting over control of the sandbox, German luxury makes Mercedes-Benz, BMW and Audi are going head to head in the Indian market.
The strange thing is, even with double-digit percentage growth in luxury vehicles, annual luxury car sales for the entire Indian market will barely surpass 4,000 units for 2008.
Why battle over such a small market?
Based on interviews with the executives who run the German luxury marques' operations in India here at the New Delhi Auto Expo, the answer has a lot more to do with strategy than it does stubborn pride – though don’t discount the latter completely.
Ford’s sale of Jaguar and Land Rover to India’s Tata Motors should be wrapped up by the end of March, a rear-drive Lincoln is in the works and the automaker’s future growth will come from outside of the U.S.
Those are just a few of the news tidbits that came out Tuesday during one of the dinner/press briefings Ford CEO Alan Mulally and his management team occasionally host.
LAS VEGAS – At the enormous and ever-growing Consumer Electronics Show here this week, General Motors Corp. Chief Executive Rick Wagoner leaves a telling indicator about his view on the hierarchy of the automotive and electronics industries, saying autos essentially have become electronic devices.
“If the automobile were invented today, I’m pretty sure it would debut at CES,†Wagoner says. “Because more and more, that’s exactly what today’s cars and trucks are – highly sophisticated consumer electronics.â€
Wagoner’s keynote address is the first by an auto executive in the 41-year history of CES, a trade show whose hype is exceeded only by its audacious size. And if anyone thought Wagoner was clinging to any old-school notions that the electronics industry is subservient to the auto sector, Wagoner went on to describe his view of a world in which consumers will begin to see automobiles in the same light as a cell phone or an MP3 player.
The Nissan Altima ranked first in Consumer Reports’ ratings of mid-priced
sedans. With a one-point difference in scores, the Altima eked ahead of the newly redesigned Honda Accord, which had long held the top spot. Toyota Camry and Volkswagen Passat followed, respectively.
It was the Altima that helped Nissan North America close 2007 with sales nearly 5% ahead of 2006, bucking the industry's trend for lower sales, according to Edmunds.com's analysis.
NEW DELHI, India -- If you can’t attend the party, then there’s nothing like sending along a half-billion dollar RSVP to ease your host’s disappointment.
Despite being a notable no-show at this year’s New Delhi Auto Expo, Ford announced Tuesday plans to expand its manufacturing capabilities in Chennai, India, to the tune of a $500-million investment. Ford will double its car production to 200,000 cars a year, including a new small car, and construct a new engine factory, capable of producing 250,000 motors a year; Ford now builds 50,000 engines in India.
Ford isn’t saying specifically what car will be built in India, but it likely the next-generation Fiesta, hinted at in the three-door Verve hatchback concept unveiled at the Frankfurt auto show last September.
Auto production and sales in China are both likely to hit a record 10 million units this year, according to an industry forecast released Tuesday.
Dong Yang, vice chairman of the China Association of Automobile Manufacturers (CAAM), told the Xinhua news agency it was a "foregone conclusion" that both China's auto output and sales would surpass 8.7 million units in 2007. "They will continue to expand at double-digit rates in 2008," he added.
Strong demand for low-cost cars in developing countries helped France’s
Renault return to sales growth in 2007, the Financial Times
reports.
Renault’s no-frills Logan car, which retails for the equivalent of $8,566 to $11,225, was the company’s most popular model. Renault sold more than 360,000 Logans; about 15% of all vehicles sold by the Renault group are Logans.
Poor spy photographers. A car generating some of the biggest buzz – the
Chevrolet Camaro – is already uncovered.
General Motors Vice Chairman Bob Lutz ordered the camouflage removed from pre-production Camaros, supposedly so further evaluations can be done for aerodynamics and cooling efficiency, according to Chevrolet General Manager Ed Peper, writing on GM’s FastLane blog Thursday.
However, it appears there’s a little marketing thrown in.
When General Motors Chairman and CEO Rick Wagoner began an online chat today at 10:07 a.m. with members of the worldwide automotive news media, he formally kicked off a corporate centennial celebration that will culminate with a huge Sept. 16 observation of exactly one official century of existence for GM.
But in his chat, Wagoner didn’t focus on The General’s glorious history as the globe’s largest and most accomplished automaker. Rather, he talked up the company’s future, from its plans to boost Daewoo, its Korean affiliate, to the possibilities for producing the Volt, GM’s plug-in hybrid vehicle that so far exists only in prototype.
Wagoner’s thrust was purposeful, because the future will be the focus of the entire centennial celebration that the company is calling GMNext. About 85% of GMNext activities and resources will be devoted to projecting GM’s second century and only about 15% to reveling in its first hundred years.
Proving once again that Corporate Average Fuel Economy rules are a failure in boosting fuel economy, the federal government Wednesday released the list of fines automakers will pay for not meeting fuel-efficiency standards in 2007. And new records were set.
DaimlerChrysler, which became Daimler AG and Chrysler LLC in the second half of 2007, now holds the record for most fines for a single year as well as most cumulative fines over the years.
Ford confirmed what has been widely speculated in recent weeks -- that it has selected India's Tata Motors Ltd. as the top bidder for its Jaguar and Land Rover units.
A statement by Ford said it had entered into "focused negotiations at a more detailed level" with Tata.
"There is still a considerable amount of work to do, and while no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks with a view to securing an agreement that is in the best interests of all parties concerned," Lewis Booth, executive vice president of Ford's European units, said in a statement.
MUMBAI, India — Just in time for Christmas, it appears Tata Motors will win the right to purchase what might be the ultimate bargain of the automotive world: The Mumbai-based auto manufacturer has completed the purchase of Jaguar and Land Rover from the beleaguered Ford Motor Company.
Ford originally bought these icons of the British motoring industry for well more than $5 billion, but the reported price Tata paid is estimated to be less than half that, somewhere in the region of $2 billion.
Nissan says it has never advertised its vehicles on TV during the Super Bowl, but that may be changing in Super Bowl XLII on February 3 and the introduction of the restyled 2009 Murano.
The company isn’t denying reports that it may seek a significant in-game ad presence by making a large spot buy that would allow it to run many local advertisements on Fox TV stations and affiliates during the game.
Ford Motor Co. seems to be nudging its Mercury brand closer to oblivion with its
latest decision: to remove it from national television ads and some other spending on traditional media, instead shifting more resources online and into dealership advertising efforts.
The decision to reallocate marketing resources for Mercury comes as the brand continues to struggle in the marketplace (sales are down about 7 percent for the year) and as Ford reportedly plans no new products for Mercury after the introduction of an overhauled Milan midsize sedan in the 2009 model year.
The United Auto Workers (UAW) union has hatched a pre-Christmas advertising campaign in selected regional markets that combines a new series of television spots with a strong interactive element.
The ads debuted this week in five metro media markets in the Midwest and South, featuring UAW members discussing various aspects and causes of the Detroit-based union. The ads invite viewers to proceed to a Web site, IAmtheUAW.org, which invites union members and supporters to submit their own stories, photos, podcasts and videos.
The timing of the campaign is interesting because it comes within weeks after the union -– whose long-dwindling rolls now are down to about 640,000 active members -– ratified new labor contracts with each of the Detroit Three automakers. If there’s any time over the last several years when the UAW could expect outsiders to admire the institution’s principles and leadership, it is now.
WARREN, Michigan –- General Motors Corp. designers and engineers say they will have to figure out ways to seriously cheat physics if a production version of the company’s Chevrolet Volt plug-in hybrid-electric concept car is to deliver on the promised driving range of 40 miles propelled solely on battery power.
GM designers revealed at a media event here they have embarked on an all-out battle to minimize efficiency-reducing aerodynamic drag. And the company recently commissioned a new studio and a 45-strong staff dedicated to developing hybrid and full electric vehicles using its E-Flex “modular†propulsion system. Right now, that means the full staff is working on just one vehicle: the Volt.
TOKYO -- Like many Car of the Year contests, Japan’s COTY can throw up the occasional unexpected
result.
But not this year.
Going into this year’s showdown, many wise souls predicted that the new Honda Fit would win at a canter. And that in the end is exactly what happened.
At 5 p.m. EST today (Monday, Dec. 3), journalist-jurors must have their votes cast for the 2008 North American Car and Truck of the Year award.
It’ll be a couple weeks before the six finalists – three cars and three trucks -- are announced; that will be done at on at the Detroit Economic Club luncheon on Wednesday, Dec. 12. At that time, jurors will vote again, ranking the three picks in each category.
Winners will be announced on the first press day of the North American International Auto Show in Detroit on Sunday, Jan. 13.
Roger B. Smith, the General Motors chairman who led the world’s largest automaker in the 1980s through a period of significant change, died in Detroit on Thursday after a brief illness. He was 82.
Smith served for only a decade as GM chairman, retiring on July 31, 1990, but, for better or worse, Smith changed the world’s largest manufacturing corporation more than any chairman since Alfred P. Sloan Jr., who chaired GM from 1937 to 1956 and had defined modern-day GM to that point.
And the change was tumultuous -– forced by external factors and brought about by Smith himself.
Roger Smith's name became a household one with the satirical so-called documentary about the fall of GM and the demise of Flint, Michigan, a GM town, in Michael Moore's first major film, Roger & Me.
Smith is credited -- or blamed -- with: dismantling the corporation and eliminating some of its sacred institutions, like Fisher Body; reconstructing the corporation in a new way; forming a joint manufacturing venture with now arch-rival Toyota to build small cars; introducing GM's first front-wheel-drive cars to compete with the rising Japanese makes; creating the Saturn division; and adding new entities with the purchase of Hughes Aircraft and H. Ross Perot's Electronic Data Systems.
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.
BOSTON –- General Motors used the New England International Auto Show in Boston this week for the North American unveiling of the Saab Turbo X, a limited edition sporty, turbocharged version of the 9-3 and available as a sedan or Combi wagon.
Boston is an appropriate place to introduce any Saab since 40 percent of Saab’s total U.S. sales are in the Northeast, Saab started its U.S. business more than 50 years ago in Boston and Steve Shannon, general manager of Saab Automobile USA, happens to be a native Bostonian.
Bryan Nesbitt, GM vice president of North American design, said the Turbo X was just the beginning and hinted that 2008 will be a significant year for Saab.
Bankers for Chrysler failed to sell $4 billion of loans that backed the purchase of the automaker by Cerberus Capital Management LP, investors briefed on the decision told various media outlets. Demand for high-yield, high-risk loans has dried up, they say.
This is the second time Chrysler’s bankers have failed to sell Chrysler debt. They were unable to find investors for $10 billion of loans in August for the original acquisition of Cerberus’ 80.1% purchase of Chrysler from Daimler.
Motor Trend magazine selected the 2008 Cadillac CTS as its car of the year. Cadillac won the award in the magazine’s inaugural year of 1949 with the DeVille.
The completely redesigned CTS is off to a blistering sales start. CTS sales soared by 75 percent in October over October a year ago for the sedan's best-ever sales month. At the end of October, inventories of the CTS stood at a scant 20-day supply, suggesting it is selling as fast as it arrives at the dealership.
Cadillac needs a boost. Its sales have been in a slump. For the calendar year to date, Cadillac sales are off about 6 percent. For October alone, the CTS pushed total Cadillac sales up nearly 20 percent over the year-ago period.
Cadillac was a highlight, being up nearly 20 percent from a year ago, though the luxury make is down 5.8 percent for the calendar year to date. Cadillac’s strength came from the newly launched CTS, which saw sales rise 74.5 percent for the sedan's best-ever sales month. Paul Ballew, GM’s top analyst, said CTS sales could best be described as "blistering." GM has a scant 20-day supply of the CTS since they sell as fast as they arrive at the dealership
The dreaded milestone of $100 a barrel is within pennies.
Crude oil prices closed at an all-time high of $99.29 a barrel in Asian trading Wednesday, blamed on the weakening U.S. economy, the plummeting U.S. dollar and fears of a further drop in oil inventories.
Meantime, the Federal Reserve predicted Tuesday U.S. economic growth will slow in 2008, possibly leading to the weakest period since the 2001 recession and possibly prompting another interest rate cut.
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.
DETROIT –- In a conference call to summarize key points of its new four-year contract with the United Auto Workers (UAW) union ratified Wednesday, Ford Motor Co. officials say their U.S. market-share target for the foreseeable future is in the 14-15 percent range, reflecting the new realities of a company that is working feverishly to pare itself to a profitable size.
Ford’s U.S. market share as recently as 2002 exceeded 20 percent. Its share in October was 15.8 percent of the U.S. market, trailing the industry leading 25 percent of General Motors Corp., closely tracking that of Toyota Motor Corp.’s 16.1 percent and easily exceeding Detroit rival Chrysler LLC’s 11.8 percent of the market in October, according to Edmunds.com's calculations.
But Ford’s continuing market-share decline and an ongoing slowdown of the U.S. economy are a double hit that it appears Ford’s cost-saving new labor agreement will not immediately overcome.
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.
The UAW announced Wednesday its members working in Ford plants approved a new four-year labor contract with Ford by a margin of nearly 4-to-1.
The Ford contract is the last of the three to be approved. It was done so without a strike and by the most overwhelming margin.
Little information has been provided about the contract, pending its approval. However, it is known to include a two-tire wage structure and the establishment of a union-run trust fund for retiree health care in exchange for the automaker keeping plants open.
Ford Motor Co. announced the formation of Transformation Advisory Council that consists of Ford
senior executives as well as outside thought leaders to explore solutions to energy independence and global warming.
Initial outsiders selected for the council are big names -- Amory Lovins, Paul Hawken and Peter Senge.
“This is the start of a world-class group of innovative thinkers who will help propel us along the road to sustainability,†said Ford Executive Chairman Bill Ford in making the announcement made Tuesday.
Competition authorities from the European Union are investigation a proposed research and development aid package from the French government to French automaker Peugeot-Citroen for the development of a hybrid diesel car.
Neelie Kroes, EU competition commissioner, told London’s Financial Times that the European Commission strongly supported the development of environmentally friendly cars but thought it likely that the carmaker would have undertaken the project anyway. The French government’s package would have covered half of the costs.
NORTHVILLE, Mich. –- There is probably nothing less sexy than brakes. The gritty components that make up a typical disc-brake system are the antithesis of where most auto-industry suppliers want to be: brakes are low-tech, low-value commodity items. Hardly the stuff around which vaunted brands are built.
However, Brembo S.p.A., is the rock star of the brake business to the point that at one aftermarket trade show in France, we saw what amounted to a mini-riot among kids barely able to drive, when Brembo stopped handing out freebies and attempted to shut down its booth at the end of the day.
The fact the brake business even has a rock star is due entirely to Brembo’s existence. Almost since its inception in 1961, Brembo single-handedly has been responsible for making brakes cool (figuratively and literally).
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.
Ford reported Thursday morning a third-quarter loss of $380 million, a significant improvement from
the $5.2 billion loss in the year-ago quarter. Ford credited the smaller loss to cost cutting -- mostly from plant closings and job cuts -- and improvements in its automotive operations.
Excluding one-time cost items, the loss was $24 million, compared with a loss of $850 million a year ago. The results were better than analysts had predicted.
Ford CEO Alan Mulally, in a Thursday morning conference call on third-quarter earnings, said the automaker continues to be on track to be profitable in 2009. Ford CFO Don LeClair said in the call the automaker is "ahead of or equal to plan in all areas" and for the full year of 2007, Ford will report a small loss to break even, excluding any special items.
TOKYO -- In contrast to General Motors record loss, Toyota Motor Corp. posted its second-largest
quarterly profit ever, prompting the Japanese automaker to increase its full-year profit forecast.
For the quarter ending September 30, Toyota reported a net profit equivalent to $3.96 billion, up 11 percent form the same period a year ago. As a result of the strong quarter, Toyota said it was increasing its full-year profit forecast by 3 percent to 1.7 trillion yen. That would surpass last year’s record and mark the seventh consecutive year of record profits.
Toyota also raised its estimates for the number of vehicles it expects to sell globally –- 8.93 million, up from the earlier forecast of 8.89 million.
Today’s the day designated for a second “takeover†of online advertising by the 2008 Chevrolet Malibu –- although this invasion will take a few days, unlike the car’s one-day blitzkrieg on October 17.
Having pronounced its earlier takeover a blazing success, Wednesday Chevrolet also planned to make it nearly impossible for Internet surfers to ignore its new midsize sedan. Chevy bought advertisements that occupy many of the highest-traffic home pages ranging from Yahoo.com to Amazon.com to FoodNetwork.com. Connected to the online effort is a big advertising push for Malibu on and around the Country Music Awards telecast tonight on ABC.
General Motors Wednesday reported a third-quarter net loss of $39 billion, its largest in history, after the automaker took a non-cash charge of future tax benefits.
Without those charges, GM still showed a loss for the quarter of $1.6 billion, compared to a profit of $497 million a year ago.
GM's North American automotive operations posted a loss of $247 million, an improvement from an adjusted loss of $660 million in the year-ago quarter. GM reported record high automotive revenue of $43.1 billion for the quarter, up from $29.6 billion a year ago.
While analysts had not predicted the write-down, most said it is largely a paper loss that does not affect GM's long-term prospects.
Fritz Henderson, GM's vice chairman and chief financial officer, said the charge does not imperil the automaker's long-term financial outlook.
"GM continues to believe that its new product introductions, combined with the new GM-UAW labor agreement, once fully implemented, will significantly improve GM's competitive position in the U.S.," Henderson said in a statement.
John Snow, chairman of Cerberus Capital Management, which owns 80 percent of Chrysler, said he’s optimistic the automaker is on the right track for a turnaround though he wouldn’t say when profitability restored.
Speaking Monday at the Executives Club of Chicago, the former U.S. Treasury Secretary said the company had not set “artificial deadlines†for achieving profitability, according to Dow Jones.
"What's important is 'are you getting this thing turned around?'" Snow said. "If it takes a little longer or a little less, it doesn't really affect the long-term cash flows. And what we're in it for is long-term profitability and long-term cash flows…This is a big engine. If you get it working right, it’ll reward our investors.â€
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.
Toyota announced Tuesday that Jim Lentz, currently executive vice president of Toyota Motor Sales, U.S.A, Inc., the marketing arm of the Japanese automaker, has been promoted to president.
"Jim Lentz is especially well qualified to lead TMS into the future as it marks 50 years in America," said TMS Chairman Yuki Funo in a statement. "His experience spans all major operational areas and he has an outstanding sense of what our customers, dealers and associates expect from Toyota."
Lentz, 52, has spent 29 years in the auto industry and joined Toyota in 1982.
Ford and the United Auto Workers union reached a tentative contract agreement in the early morning hours of Saturday, after round-the-clock bargaining for the past couple of days.
Few details of the agreement were released. It does contain a union-run trust fund to hand retiree health care obligations, commitments from Ford on new product investments and a two-tier wage structure that pays new non-production employees less than current ones.
The trade group representing automotive importers has said it will not fight a combined 35 mile per gallon fuel economy standard being considered by the U.S. Congress, but its members want more time to meet the stiffer standard.
The Association of International Automobile Manufacturers wants the deadline for meeting the tougher standards pushed significantly back from the proposed 2020 timeline. The lobbyist group represents more than a dozen import nameplates, including Toyota, which had sided with Detroit automakers in seeking lesser standards that separate car and truck ratings. The only AIAM members that sell large trucks are Toyota and Nissan.
Negotiators for Ford and the UAW adjourned their marathon bargaining session in the wee hours of Thursday morning, but the buzz is the two sides are close to a deal. Talks resume later Thursday morning.
It is speculated that Ford may agree to close fewer U.S. plants than it had previously announced in exchange for increased cost savings from the union.
The Chevrolet Volt moved yet-another step closer to reality Tuesday when, as scheduled, General
Motors took delivery on the first advance lithium-ion batteries to go into E-Flex operating system that powers the Volt.
The battery delivery buoyed the confidence of GM Vice Chairman Bob Lutz, who told the Detroit Free Press in an interview that he hoped GM would build as many as 100,000 Chevrolet Volts in the first year of production, set for around year-end 2010.
Lutz told the newspaper that the first-generation production version of the E-Flex will appear in a vehicle that will be called the Chevrolet Volt and will look similar to the concept car unveiled at the Detroit auto show earlier this year.
Navistar International Corp. has disclosed it is “in discussions†with General Motors Corp. regarding a deal to buy GM’s medium-duty commercial truck operations.
A GM spokesman would not comment on Navistar’s release in financial filings, saying “We said before that we’re looking at options for the medium-duty [commercial truck] business.†He adds that GM is studying its strategic options but, “we’re not ready to announce anything yet.â€
Navistar is the widely known holding company for such brands as International trucks and MaxxForce diesel engines for commercial trucks. Earlier this year, Navistar also was at the center of a contentious supplier relationship with Ford Motor Co., for whom it currently builds the PowerStroke V8 diesel for Ford’s Super Duty pickup trucks.
It was close, but members of the United Auto Workers union approved a new four-year contract with Chrysler over the weekend.
Some union locals rejected the deal, saying it didn’t contain product assignments for specific plants and job guarantees comparable to those negotiated in the General Motors contract. The agreement, reached after a nearly seven-hour strike, includes a union-run independent retiree health care trust and, Chrysler said, improves the automaker’s competitiveness.
Now that the United Auto Workers union has settled contracts with the Chrysler and General Motors, it turns its attention this week to Ford.
The union is well aware of Ford’s financial situation -– the most precarious of the Big Three –- and is likely to give Ford more cost concessions than it did Chrysler and GM. But, in return, it wants more job guarantees.
TOKYO -- Toyota's vaunted quality is slipping, its once-unassailable environmental credentials are being criticized, and several key members of its U.S. management have been wooed away in recent weeks by restructuring rivals. Sales are slipping in its home base as the Japanese population ages, and the U.S. market -- its biggest -- has stalled.
But Toyota Motor Corp.'s top executive says that plans already in place are sufficient to stop the erosion and bolster its position as the globe's leading automaker. The company doesn't see a need to revamp its business structure, President Katsuaki Watanabe said in an interview in Tokyo last week.
Instead, it needs to move ahead with a set of initiatives aimed at restoring top quality and making Toyota a leader on issues of energy, environment and safety, he said.
Key among them are continuation of the automaker's $1-million-an hour research and development effort; expansion of its hybrid car technology; and development of a low-cost, low-emissions "world car" that could sell in developing nations for as little as $4,000.
Against the backdrop of the Tokyo Motor Show, Detroit automakers and some of their suppliers are sounding the alarm over the value of the Japanese yen. They charge that Japan is manipulating its currency and are encouraging global economic powers to pressure Japan to boost the value of the yen. They argue that Japan’s weak currency versus the U.S. dollar is dangerous to worldwide financial markets.
GM, Ford and Chrysler complain the value gives Japanese competitors an advantage in the U.S. of $4,000 to $10,000 per vehicle.
"The yen's behavior defies economic explanations," G. Mustafa Mohatarem, GM's chief economist, said at a briefing Tuesday reported on by the Detroit Free Press. "To me, there is absolutely no doubt that Japan has been managing its currency."
He said of the $90-billion trade deficit with Japan expected for all of this year, about 62 percent is expected to come from autos and auto parts.
General Motors regained its title as world’s largest automaker when Toyota reported Monday it had sold fewer vehicles than GM in the July-September quarter.
The score with three quarters of the year over stands at Toyota selling 7.05 million vehicles and GM at 7.06 million sales. The race is tight, however. Toyota sold 2.34 million vehicles in the July-September quarter; GM sold 2.38 million.
At the half-year point, Toyota looked like it would take the No. 1 title GM has owned for 76 years. Analysts expect it to happen eventually. Toyota has an aggressive target to sell 10.4 million vehicles for 2009; GM’s best year was in 1978 when it sold 9.55 million vehicles. Where Toyota still has a firm hold on a No. 1 spot is in profitability.
Another close race is brewing as Chrysler’s union workers vote on a new contract.
United Auto Workers union members at six Chrysler plants representing 11,000 workers rejected a tentative contract reached with the automaker. Plants rejecting the deal include those at Chrysler’s giant Jefferson North Jeep plant in Detroit. Those workers want firm commitments for future models at its plants, similar to what General Motors workers got in their contract. Chrysler is unable to give such assurances, as its new owners and new management team are revamping the future product plan.
Ford reported that engineer extraordinaire Richard Parry-Jones is retiring at year's end. General Motors announced that its oft-quoted top analyst Paul Ballew was moving on to a new job in the insurance business.
On the 20th anniversary of Black Monday, oil prices have set an all-time record at $90 a barrel. That’ll make fuel-sipping concepts being unveiled at next week’s Tokyo Motor Show even more relevant.
The U.S. dollar hit another record low against the Euro and other currencies on fears of an economic slowdown in the U.S.
Today, on the Internet, Chevrolet begins to find out whether its hugely ambitious strategy for the new Malibu sedan is getting some traction. General Motors’ top sales division planned what it not so modestly is calling a “takeover†of online advertising in what really may be the most ambitious such effort yet by any major marketer.
“This will be the largest home-page takeover ever,†crowed Bill Ludwig, vice chairman and chief creative officer of Campbell-Ewald, Chevy’s longtime advertising agency.
The idea is to make the completely new vehicle unavoidable online and lend some early credibility to Chevy’s marketing theme for the 2008 Malibu: “The Car You Can’t Ignore.â€
DETROIT -- After years of sterling reliability, Toyota is showing cracks in its armor, according to data
from Consumer Reports’
2007 Annual Car Reliability Survey revealed Tuesday before the Automotive Press Association in Detroit.
By contrast, Ford’s domestic brands have made considerable improvements. Consumer Reports said 93 percent of Ford, Lincoln, Mercury models in the survey scored average or better.
“Ford continues to improve,†said David Champion, senior director of Consumer Reports’ Auto Test Center. “The reliability of their cars has steadily improved over the years, and is showing consistency.â€
He added, “We believe Toyota is aware of its issues and is trying to fix problems quickly.â€
Despite the problems, Toyota (including Lexus and Scion) still ranks 3rd in reliability among all automakers, behind only Honda and Subaru.
Some Chrysler workers are not thrilled with the tentative contract agreed upon last week by the automaker and the United Auto Workers (UAW) union because it lacks product and plant commitments that the General Motors’ contract includes.
"Virtually no Chrysler plant received commitments beyond the scope of their current product," a leaflet produced by a dissident union local said, according to Bloomberg News. "As a result, the plant-by-plant threats we've experienced...will continue."
Indeed, Chrysler, in dire need of a product makeover, clearly is keeping its options open. But that's not sitting well with some workers; others figure the commitments and contract they've got are the best they can do.
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 AutoObserverreported 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?
Now that United Auto Workers (UAW) unions at General Motors have ratified their new contract and Chrysler workers are voting on their new agreement, it is Ford’s turn to negotiate a new deal with the union. And its deal is likely to be similar to those at GM and Chrysler.
Ford Chairman Bill Ford, through a company spokesperson, told Dow Jones the framework of the deal between GM and the UAW was "certainly something we can work with."
Similarly, Ford CEO Alan Mulally told The Associated Press a deal with the major elements of those hammered out at GM and Chrysler will help Ford be more competitive. "The basic framework, the elements of it are very transformational," Mulally said. "It'll increase our competitiveness tremendously."
United Auto Workers (UAW) President Ron Gettelfinger said Monday that a council of union local heads and other union leaders meeting in Detroit gave an overwhelming recommendation in favor of the contract with Chrysler.
The agreement now goes to the UAW’s rank and file for ratification votes that will take place over the next few weeks. Gettelfinger said he hopes to get two-thirds of the workers to approve the contract.
GM executives for the first time provided details of its new contract with the United Auto Workers (UAW) union. The automaker said the pact reduces its health-care obligations by $47 billion and cuts new worker pay in half.
GM’s U.S. hourly labor costs will drop to $10.1 billion in 2007 from $12.6 billion last year, declining “significantly” from 2008 to 2011.
GM’s stock closed last week at a three-year high, after UAW union members ratified its new contract with the automaker. GM’s stock closed at $42.64 on Friday, up nearly 12 percent from the beginning of the week. GM shares have gained nearly 50 percent since early September in anticipation of a favorable contract.
GM detailed how and how much it will contribute to the newly established union-run health-care fund in its Securities and Exchange Commission filings, submitted Monday.
Thousands of Chrysler’s hourly workers walked off the job Wednesday as the automaker and the United Auto Workers Union failed to reach an agreement on a new four-year contract before the 11 a.m. strike deadline. But the strike was short-lived when the union announced by late afternoon that a tentative contract had been reached.
The strike comes as no surprise. The odds of a strike increased significantly when the union gave the automaker a 72-hour notice of a strike deadline over the weekend. Further, the UAW, setting a precedent for these talks, struck General Motors in September for two days before reaching an agreement that it has now been ratified by the rank and file.
Details of the tentative pact have not been released, except that Chrysler confirmed the deal does include a union-run, health-care fund.
The United Auto Workers (UAW) union has set Tuesday as a strike deadline for Chrysler, people familiar with
the negotiations told Bloomberg News.
The union gave Chrysler, now owned by Cerberus Capital Management, 72-hour notice that it is terminating further contract extensions. After 11 a.m. Wednesday, a strike is possible. The contract had been extended after the September 14 deadline so that the UAW could concentrate on negotiations with General Motors.
BERLIN -- In the end, circumstances beyond management control forced DaimlerChrysler’s German management to sell Chrysler to private equity firm, Cerberus Capital Management, and the new Daimler AG will be stronger without Chrysler and its dependency on North America, Daimler Chairman Dieter Zetsche told shareholders.
Zetsche, chairman of the Daimler AG's board of management, was persistently challenged by some of the 6,000 shareholders at Thursday’s special shareholders meeting to officially change the company’s legal name to explain the shift in strategy.
BMW CEO Norbert Reithofer held a highly anticipated press
conference in Munich Thursday to outline the German luxury maker’s strategic plan for the future. That plan includes global sales increases, substantial spending cuts, aggressive financial targets, U.S. production increases, more alliances, and the possible establishment of a fourth brand.
Nissan’s Jan Thompson, one of the auto industry’s top female marketing executives, has resigned, under pressure. Ex-Ford marketer Ben Poore will replace her.
Thompson, well known in the automotive marketing community having worked at Nissan, Mazda and ad agencies handling other major automotive accounts, had been head of both Nissan and Infiniti advertising and marketing.
Her resignation comes as no surprise. Nor is Poore's departure from Ford a shocker.
Following an all-night session, the United Auto Workers and General Motors remain in contract negotiations as the UAW's strike deadline of 11 a.m. Monday looms.
Despite the deadline, a strike isn’t necessarily a foregone conclusion. At 11 a.m., the union could, indeed, order a strike. Or it could set up picket lines without a full-blown strike or it could extend the deadline. The UAW has not struck GM since 1998.
While GM is completely mum and the UAW has only hinted about the hang-ups in the talks, which are into their tenth day following the official contract expiration, what is obvious is the intensity of both sides to achieve their goals: GM’s goal is to cut costs, especially health-care costs; the union’s mission is to protect jobs, pay and benefits to workers and retirees.
Francisco Codina, Ford’s top sales and marketing executive, will retire on November 1, the automaker announced Thursday.
The retirement of Codina, better known as Cisco, comes as no surprise. Ford CEO Alan Mulally told a roundtable of reporters in August that marketing is one of his top priorities as he enters his second year as head of Ford.
The automaker, on and off, has searched inside and outside of Ford for a chief marketing officer. But none has ever been hired.
They will become increasingly familiar as China’s powerhouse auto company expands globally.
And now those initials are the official name of the Chinese auto company formerly known as Shanghai Automotive Company. The new name of the company, which is the partner of major automakers including General Motors and Volkswagen, is SAIC Motor Corp.
Toyota Motor Corp. President Katsuaki Watanabe confirmed Tuesday what had
been reported -– the automaker is considering building a new automobile plant in Japan, its first domestic plant in 17 years.
Watanabe didn't provide details on location or investment. However, last week the Nikkan Kogyo Shimbun said Toyota would invest about Y100 billion to build a plant in northern Japan to start operations as early as 2009.
Saturn will sell General Motors’ first plug-in hybrid –- a Vue compact SUV that can run up to 10 miles solely
on electricity and switch to an engine for longer trips -– “very quickly,” Brand General Manager Jill Lajdziak told the Detroit Free Press
in Frankfurt Wednesday.
“In 2009-ish,†Lajdziak said of the plug-in's introduction. The Vue plug-in will become the third hybrid version of the SUV. It will combine lithium-ion batteries and GM’s two-mode hybrid system, which can be recharged from a 110-volt household current.
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:
The New Chrysler announced this morning that Toyota’s Jim Press is joining
Chrysler as vice chairman and president.
Press, a 37-veteran of Toyota, was the first and only non-Japanese to be elected to Toyota's board of directors in Japan. He also was the first American to be named president and chief operating officer of Toyota Motors in North America, making him Toyota's highest-ranking exec in North America.
At Chrysler, Press will be responsible for North American Sales, International Sales, Global Marketing, Product Strategy, and Service and Parts. Marketing is an area of serious weakness for the Detroit automaker.
The stunning news demonstrates that the traditional automotive playbook is out the window when a private equity firm buys an automaker, as Cerberus Capital Management did with Chrysler, a deal consummated only in early August.
It also demonstrates how fast-moving -- and anxious -- private equity firms are in turning around ailing properties in order to earn a return on their investment. Chrysler CEO Bob Nardelli, formerly Home Depot CEO, is leading the charge -- moving quickly and decisively and bringing in fresh blood from outside -- at whatever the cost.
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.
A California-based auto parts seller is recalling as many as 295,000 Chinese-made fuse sets that could be linked to electrical fires.
Harbor Freight Tools told the National Highway Traffic Safety Administration in an August 10 letter obtained by the Detroit News that the company was quickly recalling 295,000 aftermarket auto fuse sets -- which involve as many as 35 million individual fuses -- sold over a two-year period.
Southern California exotic sports carmaker, Fisker Coachbuild LLC, has shifted its business strategy from producing purely exotic high-end sports cars to ones that are environmentally friendly.
“We want people to drive beautiful fast cars that make environmental sense –- cars that are eco-chic and will have less of an impact on global warming,” said Henrik Fisker, CEO of the newly formed Fisker Automotive, Inc. Fisker is a former BMW and Aston Martin designer.
Saying a planned new compact car coming in a few years is a “terrific opportunity for us,†Saab Automobile USA executives also claim owner General Motors is beginning to understand how to manage the niche brand -– just as the future of small-volume, premium brands such as Saab appears to be reaching a crucial juncture.
At a media event for the redesigned 2008 9-3, Knut Simonsson, executive director, Saab Global Sales and Marketing, tells AutoObserver that because of the increasing “globalization†of virtually everything –- common talk now is dominated by terms such as “global business†and even “global warming†–- consumers will increasingly gravitate toward brands that evoke strong images of heritage or national origin as a way to satisfy their desire for more “context†for their purchases.
General Motors, in an effort to stop its sales slide and give model year-end sales a boost, is giving dealers of some of its brands cash awards according to an internal GM memo obtained by Bloomberg News.
GM will pay dealers $250 for each vehicle sale made from August 23 through the end of the month, according to the memo from Jim Bunnell, general manager of GM's Buick, Pontiac and GMC divisions.
Summer sales, so far, have been lackluster industrywide, and August will show no recovery, according to Edmunds.com, which releases its forecast for August sales on Thursday.
"After some of the worst June and July sales in the recent history, it does not look like we will see much of a recovery in August for new vehicle sales," said Jesse Toprak, Edmunds.com analyst. "Despite the production cuts, domestic automakers are starting to experience inventory build-up issues on slow-selling models.
"Although not ideal," Tropak added, "high incentives spending becomes the only way to get rid of this excess inventory as we go into fall clearance time. We expect incentives to increase incrementally for the rest of the year for the current model-year vehicles."
A group of Kentucky community activists, including labor and church leaders, are gathering outside Toyota's biggest U.S. assembly plant today to deliver recommendations to management, including limits on the use of lower-paid temporary workers, to improve working conditions at the factory, according to the Detroit News.
The appearance by the group, Kentucky Workers’ Rights Board, will be followed by a news conference. The United Auto Workers union is trying to organize foreign-owned plants in the United States to offset the drop in its membership rolls at Big Three plants. Toyota is its prime target, the newspaper reports. However, the UAW has not succeeded in past efforts to organize Japanese-owned plants.
General Motors’ Saturn division announced its European styled and built Astra
small car will start just shy of $16,000.
The 2008 Saturn Astra five-door XE, which is equipped with a five-speed manual transmission, starts at $15,995; the uplevel Astra five-door XR starts at $17,545; and the sporty Astra three-door XR starts at $18,495. All prices include delivery fees.
Ford’s sale of Jaguar and Land Rover will occur late this year or early next, while the decision to keep or sell Volvo will be made within the next two to three months, a Ford official said.
Lewis Booth, Ford’s executive vice president in charge of Europe, told reporters at a briefing Wednesday night that Jaguar and Land Rover would not be sold by the end of September, as many publications have been reporting. Instead, it may take until the end of the year or into 2008 to finish the deal.
At the same time, a strategic review of Volvo and its fate should be completed within three months, he said.
To build buzz for the upcoming launch of its Saturn Astra, based on the German-
built Opel Astra
, Saturn
teamed with Edmunds.com
for a contest. The grand prize is a trip to Frankfurt, Germany, in September to attend the auto show, test-drive the Astra and blog for Edmunds.com.
Contestants visited a specially designated page on Edmunds.com and submitted an essay of less than 500 words explaining why he or she should be chosen.
The winner, to be announced Friday, will fly to Frankfurt on September 9, returning September 13. The winner will receive media credentials, access to General Motors’ Premier Night and an invitation to Astra launch activities. While in Germany, the winner will write for Edmunds’ Straightline blog.
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.
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.
The big news kicking off this week is that Martin Eberhard, the co-founder and CEO of Tesla Motors, has been replaced as chief executive and will become the company’s president of technology, according to a statement on Monday on Tesla's Web site.
Eberhard will remain with the company as president of technology. Michael Marks, the former CEO of electronics assembler Flextronics and an early investor in Tesla Motors, will take the reins as interim CEO.
Question is, does the management change suggest the company is struggling, experiencing growing pains or simply growing up?
Edmunds.com has revised its True Cost of Incentives (TCI) for the Toyota and specifically the Toyota Tundra.
The Tundra’s TCI was reported to be $6,861 per vehicle sold in July. The correct number is $4,625. The original data suggested that the Tundra had the highest TCI of the large truck segment during July 2007; the corrected data puts the Tundra third in TCI.
Nearly 40 percent of consumers report having satellite radio capability in their new vehicle’s audio system -- marking a considerable increase from 26 percent the previous year, according to the J.D. Power and Associates 2007 Multimedia Quality and Satisfaction Study released Thursday.
On the day that the Wall Street Journal ran a story on Toyota delaying its
advanced hybrids due to potential safety problems with its lithium-ion batteries, General Motors announced it will co-develop lithium-ion batteries with A123Systems Inc., of Watertown, Mass.
The agreement is expected to help speed up GM's electric plug-in vehicles and fuel-cell vehicles using GM's E-Flex architecture, introduced in January on the Chevrolet Volt, possibly ahead of Toyota.
GM Vice Chairman Bob Lutz, speaking at the Center for Automotive Research's annual management conference in Traverse City., Michigan, Thursday, said A123Systems uses nanophosphate battery chemistry that is not only powerful but also safe.
Lutz said the various batteries being developed through contracts GM has signed with suppliers would be ready for testing in October, installed in mule vehicles by year-end and be in demonstration vehicles by next spring. The next phase -- the most challenging phase -- will be to have them in showrooms by the end of 2010.
Ford's impending sale of Jaguar and Land Rover is shifting into high gear, with participants who made it through the first round of bidding now receiving detailed financial information on the two British luxury brands, the Detroit News reports.
Ford reportedly wants a deal wrapped up by September 30.
Buick and Lexus tied as the highest-ranking nameplates in vehicle dependability, according to the J.D. Power and Associates 2007 Vehicle Dependability Study released Thursday.
It marked the first time in 12 years that another brand tied with Lexus for the highest-rank position.
The study measures problems experienced by original owners of 3-year-old (2004 model year) vehicles. Buick and Lexus both had a score of 145 problems per 100 vehicles. They were followed in the top five rankings by Cadillac, Mercury and Honda, respectively.
Hyundai Motor America Vice President of Product Development and Strategic
Planning John Krafcik, speaking at the Center of Automotive Research Management Briefing Seminars, announced Hyundai’s new five-door compact will be named “Elantra Touring.”
Elantra Touring, to be unveiled in November at the Los Angeles auto show, will reach dealers in the spring of 2008 as a 2009 model-year vehicle. It is Hyundai's first European-derived model, based on the i30, sold in the U.S.
And based on its success in South Korea, it could be hard to come by when it goes on sale.
Jim Lentz, executive vice president of Toyota Motor Sales, predicted a promising long-term future for the U.S. auto industry, with sales reaching 18 million vehicles a year. But along the way, he sees formidable challenges.
Speaking at the Center for Automotive Research’s annual
management seminars in Traverse City, Mich., Lentz said sales this year likely will be 16.3 million vehicles, down about 2 percent from 2006. However, he forecasted a rebound in 2008 with steady growth into the next decade.
The major challenges facing the industry in the meantime, he categorized as politics and powertrains, pleasing new youth buyers and improving the industry’s retail reputation.
China and, to a lesser degree, India have been the hot new players in the auto industry in the past few years. Now it is Russia.
Reuters picked up a story from Russian newspaper Vedomosti today that Russian billionaire Oleg Deripaska, owner of automaker GAZ, has bought about a 5 percent stake in General Motors. He's also been rumored to be making a bid for Ford's Jaguar and Land Rover, though he denies it.
And look for Chrysler to make a deal in Russia soon.
General Motors said it would not renew its $1 billion sponsorship of the U.S. Olympic Committee when its contract ends after 2008.
The automaker said its decision is a result of changes in its marketing strategy and came after GM evaluated the return on its advertising investment. The automaker said it has other avenues -– less expensive ones -– to reach the same audience.
The move is part of a bigger strategy of GM’s scrutinizing advertising spending and results of that spending. The examination covers digital, print, television and radio advertising, GM said.
Delphi Corp. announced Monday it had reached tentative deals with four of its U.S. unions as the auto supplier, removing more stumbling blocks from its road to emerging from bankruptcy.
Delphi already cut a deal with its largest union, the UAW. Delphi’s second-largest union, the IUE-CWA, had threatened to strike if an agreement was not reached. Details of the contract were not disclosed.
Next up is a contract with the United Steelworkers.
Before the party even starts today, Cerberus Capital Management Corp. has initiated a changing of the guard at Chrysler. The new chairman and CEO of Chrysler LLC is none other than the controversial former Home Depot CEO Bob Nardelli.
The appointment of Nardelli is a clear sign that Cerberus means business about turning Chrysler around -- and turning it around quickly.
CEO Tom LaSorda will remain as vice chairman and president. Wolfgang Bernhard declined a top job with the automaker and will leave Cerberus. Chrysler COO Eric Ridenour has left the company.
DaimlerChrysler and private equity firm Cerberus Capital Management signed the contracts giving Cerberus 80.1 percent of Chrysler in a historic $7.4-billion deal.
The New Chrysler will throw a party to celebrate its divorce from Daimler and its marriage to Cerberus with ceremonies on Monday at its corporate headquarters outside of Detroit and in its facilities worldwide. On Thursday, Chrysler workers were testing the unfurling of a giant banner saying “Get Ready” that will hang on the side of Chrysler’s 15-story office tower.
Chrysler insiders told the Detroit News the company will hold New Chrysler celebrations for customers at U.S. dealerships on August 15.
Delphi Corp. moved another step closer to emerging from bankruptcy Thursday when a bankruptcy court judge agreed to allow private equity firm Appaloosa Management LP and other investors invest up to $2.55 billion in the Detroit-area auto supplier.
"This was a huge milestone,’’ said Robert S. "Steve" Miller, executive chairman of Delphi, which filed for bankruptcy protection nearly two years ago.
What was Paul Ballew, General Motors' executive vice president of Global & Market Analysis, suggesting when he said Wednesday that the automaker will "accelerate (current) restructuring efforts where appropriate" ?
Does it mean more layoffs? Are more plant closings in the offing?
Ballew made the comment during a conference call with media and analysts regarding July vehicle sales, which, for GM, dropped by 18.5 percent, according to Edmunds.com's statistics.
General Motors this morning posted a better-than-forecasted second-quarter profit of $891 million, compared with a $3.4 billion loss in the same quarter a year ago.
GM's improved financial performance suggests the automaker's turnaround plan is progressing.
Investors liked the news as GM shares were on the rise in early electronic trading, Reuters reported.
Now, the question is can GM be profitable for a full year after two years of losses?
General Motors began offering zero percent financing for up to 60 months on its
full-size Chevrolet Silverado and GMC Sierra pickup trucks over the weekend and will continue through September 4.
The incentives are in response to similarly aggressive ones being offered by Ford, Chrysler and Toyota on their trucks.
GM reports second-quarter earnings Tuesday and is expected to announce disappointing sales again for July. Edmunds.com is forecasting a nearly 19 percent fall in year-over-year sales for GM, which reports sales on Wednesday.
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.
After seven quarters of losses despite cost-cutting, Ford reported a surprise second-quarter profit.
Ford posted a net profit of $750 million, compared with a loss of $317 million a year earlier. Revenue increased to $44.2 billion from $41.9 billion a year earlier.
"Overall our plan is working and is showing clear signs of progress. We have a long way to go," Ford CEO Alan Mulally said Thursday in a statement. Ford is closing 16 plants, cutting up to 45,000 jobs and trying to sell Jaguar and Land Rover.
Ford said it was doing a strategic review of Volvo, which has been rumored to be up for sale. That review will conclude by year-end.
Chrysler was expected to announce this morning that it will offer a lifetime powertrain warranty on vehicles sold beginning today.
Believed to be the first of its kind in the industry, the warranty applies to the original owner of the vehicle and is not transferable.
The warranty covers virtually all new Chrysler, Dodge and Jeep models, with a few exceptions, sold beginning today. It does not cover rental cars and special fleet vehicles, like for police and fire departments.
A no-charge inspection is required every five years, within 60 days of the vehicle's every five-year anniversary.
Toyota announced in Japan today that it has developed a plug-in hybrid that it will test on public roads in Japan, Europe and the U.S.
Like other Toyota hybrids, the Toyota Plug-in HV uses a gasoline internal combustion engine, an electric motor and a nickel-metal hydride battery –- not the advanced lithium-ion batteries currently under development.
The five-passenger Toyota Plug-in HV, like the Chevrolet Volt concept unveiled by General Motors at this year’s Detroit auto show, uses increased battery capacity to allow longer electric-motor-only cruising mode and a battery-charging device that replenishes the batteries using household electricity. That enables the car to run more often in gasoline-free, electric-only mode, such as on short trips in city driving.
Who knew there were still 2006 models on the lot collecting dust?
On the eve of the 2008 model year, General Motors is offering no-interest loans for up to five years on all 2006 models. The incentives started July 21 and run through the end of this month.
It was too long ago that Fiat had been given up for nearly dead.
But today, the Italian automaker reported its second-quarter profit more than doubled (sales were higher for the 18th consecutive month), increased its share of the European car market and surpassed Volkswagen's operating margins.
Chief Executive Officer Sergio Marchionne earns the credit. He led Fiat to its first profit in five years in 2005. He changed management and products -– new compelling ones like the Grand Punto that share more components underneath.
They’re all smiles now, but we likely won’t see many grins come September.
United Auto Workers President Ron Gettelfinger performed the ceremonial handshake with GM Chairman Rick Wagoner and Ford Chairman Alan Mulally today as the union kicked off talks with both companies. A similar ceremony at Chrysler was held Friday.
While all parties are amiable now, this round of contract talks is predicted to be the most contentious and high stakes of any undertaken in recent memory. The viability of the domestic manufacturers –- particularly Ford –- hangs in the balance in these talks, which could continue on after the mid-September deadline.
Japan’s major car companies have halted vehicle production because of earthquake damage to a key supplier’s plant.
Honda, Mitsubishi, Nissan and Toyota stopped production due to damage to Riken, a piston ring and seal manufacturer. The automakers use just-in-time delivery so assembly plants maintain very few parts in stock.
Experts say the temporary production halt will have little impact overall for the year since the automakers can make up the production in the usually slow month of August.
Turns out, suitors -– as many as a half-dozen –- are interested in Jaguar and Land Rover.
The Financial Times in London reports today that Ford expects up to six bids for the two British marques, which could kick off a surprisingly competitive auction.
Among the suitors are –- not surprisingly –- private equity firms Cerberus Capital Management (the upcoming owner of Chrysler), Ripplewood Holdings and One Equity Partners. Another is India’s Tata Motors.
Anticipated higher fuel economy standards have claimed yet another victim: the Chrysler Imperial.
The large luxury sedan, unveiled as a concept car at the Detroit auto show in 2006 and to go into production at Chrysler’s Brampton, Ontario, plant as a 2009 model, has been scrapped, the Detroit Free Press reported today.
A Chrysler spokesman confirmed CAW President Buzz Hargrove’s comments to the newspaper that he was informed the intended Chrysler flagship was scrapped because of pending legislation in the U.S. Congress to increase fuel-efficiency standards.
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.
General Motors announced Monday it had reached a joint venture agreement with Penske Corp. to purchase 50 percent equity of VM Motori S.p.A, a designer and manufacturer of diesel engines based in Cento, Italy.
This investment builds on GM’s existing relationship with VM Motori. At the Geneva Motor Show in March, GM announced it will jointly develop a new 2.9-liter V6 turbodiesel engine with VM Motori to launch in the 2009 Cadillac CTS in Europe.
That engine could make its way across the Atlantic in the next-generation Cadillac CTS and the Saturn Aura. Last week, GM Vice Chairman Bob Lutz said in his FastLane blog that GM would introduce diesels in a Cadillac sedan and a Saturn with rollout to crossovers and other models to follow.
Shareholders of automotive supplier Lear Corp. rejected a $2.9 billion buyout offer led by billionaire investor Carl Icahn.
Icahn's American Real Estate Partners LP had slightly sweetened the offer, to $37.25 a share, or $2.9 billion, up from $36 a share, or $2.8 billion.
Still, critics, including some major shareholders who had advised shareholders to join them in voting against the sale, charge the offer remains too low. They contend company executives have put their own financial interests before those of shareholders.
Ford said the 2008 Mustang will be outfitted with soybean-based foam cushions,
as part of an effort to cut the use of petroleum in its auto manufacturing. Other models may get the foam as well.
Developed by Ford researchers with seat supplier Lear Corp., the foam is 40 percent soy and 60 percent oil-based. Most manufacturers use an average of 30 pounds of petroleum-based foam per vehicle, with 9 billion pounds of foam sold a year to the auto industry.
Ford said the environmental advantages are reduced carbon dioxide emissions in manufacturing, lower energy use to produce the soy foam and reduced dependence on foreign oil. Currently, the soy-foam costs about the same as conventional foam that is fully oil-based but Ford, which is applying for patents on the technology, hopes with increased volume the cost will drop.
Chrysler Group one-upped competitors today in announcing it has lowered prices an average of $2,000
and added standard features to its fifth-generation 2008 minivans that go on sale in September.
"The new starting price of $22,470 puts Chrysler at a significant advantage over its competitors as it is the second lowest starting price of any minivan,†said Alex Rosten, Edmunds.com’s manager of pricing and industry analysis. “That low price will certainly appeal to young families and bargain hunters. Plus the standard equipment list is pretty substantial.â€
Steven Landry, Chrysler’s executive vice president of sales, said this morning the lower pricing is an effort to more closely align the Manufacturer’s Suggested Retail Price to transaction prices. Chrysler hopes to offer little or no incentives on the minivans, which Landry called this year’s most important product launch for the automaker.
Ford announced a partnership with Southern California Edison to test and develop plug-in hybrid electric vehicles.
The utility will get one plug-in hybrid to evaluate and test this year, with as many as 20 vehicles by 2009. Ford hopes to work with the utility to help develop the infrastructure side of the electric car network. The utility will study the vehicles and will place them in the hands of real-world consumers so that Ford can get information on their durability and usage in true life situations.
"By partnering with these two industries... we're hoping that it does accelerate the commercialization and certainly drive some of the cost issues down," said Ford Vice President for Sustainability Susan Cischke.
Smart USA President Dave Schembri told the Automotive Press
Association in Detroit today that before the microcar company considers selling new models beyond the already planned Fortwo, it would consider selling alternate powertrains in the Fortwo.
No models beyond the 1.0-liter three-cylinder gasoline engine-powered Fortwo are planned. The Fortwo is expected to achieve at least 40 miles per gallon when the federal government certifies it, Schembri said. However, Schembri added, Smart would consider electric, micro hybrid and diesel versions in the future before it added more models.
Starting today, Mazda is offering a personal shopping service via the Internet that provides shoppers with an actual price quote through a dealer of their choice – and even haggling of that price via the Web. Mazda claims this is an industry first.
Through links on its Web site (www.MazdaUSA.com), the Mazda Shopping Assistant (MSA) program connects consumers with Mazda personal shoppers who can answer specific product questions and provide personalized shopping experiences through live Web-chat sessions.
Volkswagen is considering building a new North American factory if the dollar stays weak, CEO Martin Winterkorn said in an interview with German magazine Focus, picked up by Reuters.
Winterkorn admitted in the interview that VW had performed poorly in the U.S. and that Volkswagen’s “planned new offices” moving “away from Detroit” would bring VW closer to U.S. consumers, according to the Reuters report. A clarification later by Volkswagen said the automaker is planning to set up a second administrative hub near Detroit.
Next year, Chrysler will introduce in North America a small car built by China’s Chery Automobile Co. It likely will be the first Chinese-made car to be sold in America and may well be the cheapest.
Chery’s A1 hatchback will be sold by Chrysler beginning in the first quarter of 2008, Chery president Yin Tongyao said in Beijing as the two companies officially inked the deal that had been announced last December.
General Motors has scratched the Cadillac Sixteen and Buick Velite
concepts from any plans for future production.
GM Vice Chairman Bob Lutz, on the automaker’s Fast Lane blog, said environmentally friendly, high fuel-efficiency vehicles take priority over the Sixteen and Velite, which GM had hoped to produce.
Lutz said introducing the 16-cylinder, 1,000-horsepower Sixteen would “not be an extremely prudent thing to do†in terms of GM’s public image and would be “a display of a lack of sensitivity to environmental concerns.â€
In fact, instead of offering a bigger Cadillac, Lutz said Cadillac needs to look at a vehicle smaller than the current CTS.
Demand for corn-based ethanol for vehicles has led to American farmers planting more corn than since the waning days of World War II, according to a U.S. Department of Agriculture report cited by an Associated Press story.
Farmers are expected to harvest 93 million acres of corn this year, up 19 percent from 2006 and well above the March estimate of 90.5 million acres.
The increased demand for corn to be converted to ethanol has led to high demand -- thus higher prices -- for corn. Economists surveyed by the Wall Street Journal this month increasingly are worried about inflation, caused by higher energy and food prices (especially milk and corn-fed beef) stymieing economic growth.
GM announced today it will introduce a dramatic Opel concept at September’s Frankfurt show featuring its E-Flex propulsion system, first shown on the Chevrolet Volt at the Detroit auto show in January.
E-Flex is an electric-drive system that extends the vehicle’s range by using a secondary supplemental fuel system. In the case of the Opel concept to be unveiled this fall, it will be a diesel engine. The Volt had a small gas engine. GM unveiled at the Shanghai show this spring an E-Flex system supplemented by hydrogen-powered fuel cells.
GM’s announcement came as part of a larger presentation of General Motors Europe’s environmental strategy, that the automaker says focuses short-term on reducing CO2 emissions and long-term on introducing new propulsion technologies.
Don’t expect the automakers to fight for a product placement in this film!
The story of Robert W. Kearns, inventor of the intermittent windshield wiper systems used on most vehicles for decades, will hit the silver screen. Detroit’s Big Three automakers will play a starring role –- as the bad guys –- who lost after long court battles that ultimately reached the Supreme Court.
Actor Greg Kinnear, most recently appearing in the Oscar-winning Little MissSunshine, plays Kearns in Flash of Genius.
General Motors, as has been speculated, has agreed to sell its Allison Transmission unit for $5.6 billion to private-equity firms to raise funds for its auto operations.
GM’s has a preliminary agreement with Carlyle Group LP and Onex Corp. to buy Allison, which builds transmissions for GM vehicles, including its large trucks. Canada’s Onex Corp. had been helping Canadian auto supplier Magna Corp. in its failed bid to buy Chrysler Group.
General Motors want to convince the world it is green.
To that end, the automaker has produced four videos for its “GM Going Green” channel.
The nearly 3-minute videos cover the topics of green buildings, the reemergence of solar power, GM large fleet of hybrid buses and the Challenge X competition in which engineering students competed to come up with the most innovative way to positively alter the automotive world.
Japanese buyers love American muscle cars, Levis, Starbucks and Coke. But
what about Dodge?
This month marks the start of a major new Chrysler product offensive to woo Japanese buyers and to introduce them to the Dodge brand, which, in the U.S., bills itself as bold, all-American and for people who grab life by the horns.
The product offensive comes at a time when Chrysler is being sold and the Japanese market in contracting. Japan has long viewed American cars as unsuitable for the country’s market conditions.
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.
Goldman Sachs raised General Motors’ share recommendation to “buy” from “neutral” because the brokerage firm sees the United Auto Workers union offering larger concessions than previously expected to the automaker.
"The stock is pricing in a level of concessions we think is highly probable,'' a Goldman analyst wrote in an e-mail. "That implies little to no downside and potentially large upside from the real possibility concessions end up even larger than what is priced in.''
Nissan will buy more components from China and India to cut costs.
The automaker will raise global parts purchases from low-cost countries to as much as 24 percent of the total, from as much as 14 percent now, said Carlos Ghosn, Nissan's chief executive officer, in an interview with Bloomberg News in Singapore over the weekend.
Buying parts made in countries where wages are 5 percent of those of Japan would help Nissan's profit margins, which lag behind Toyota and Honda, Bloomberg noted.
Plus, Nissan wants to build a $3,000 car for India. Cheaper parts will be essential to bring that vision to fruition.
Ford reportedly has hired accounting firm KPMG to examine the books of its Premier Automotive Group brands Jaguar and Land Rover so that they can be properly valued when suitors come knocking.
KPMG was brought on to give a “clear picture of Jaguar and Land Rover’s performance as businesses separate from the influence of Ford,” according to the Sunday Times in London.
Perfunctory yet historic, Toyota Motor Corp. appointed American Jim Press, the first non-Japanese person, to its board of directors.
Toyota had announced the appointment months ago but shareholders made it official yesterday at the company’s annual meeting in Japan.
The appointment comes as Toyota overtakes General Motors in global sales, its Toyota Division surpasses Ford as the No. 2-selling nameplate in the U.S. last month, and sales and market share are growing at the expense of U.S. makers.
Still haunted by last year’s bloated inventory of unsold vehicles, Chrysler is allowing its dealers to call leftover 2006 cars and trucks “loaners” and then sell them a day later, instead of the usual three months, at deep discounts.
The intent of the unusual sales tactic, which went into effect at the end of May as current incentives were about to expire and was revealed by the Detroit News this week, is two-fold:
· boost sales in soft months. The move may well have helped Chrysler achieve its unexpected sales increase of 4.3 percent in May;
· ditch leftover inventory from last year as Chrysler nears the time to unload the 2007 leftovers to make way for 2008 models.
The Canadian province of Ontario announced Tuesday the creation of a $650 million (Canadian) automotive industry-specific fund to help spur investments in environmentally friendly cars and car parts.
Ontario’s efforts are significant for a number of reasons: · the global race is on to become the Motor City of the future in terms of green autos; · Ontario has as much or more auto manufacturing as the neighboring state of Michigan, headquarters to the Big Three, and recognizes ensuring its future, which clearly is green, is paramount to keeping its auto industry and its jobs; · the Canadian government’s approach is in stark contrast to that of the U.S., using the carrot vs. the stick approach to prod automakers to go green; · the approach has the buy-in of the powerful Canadian Auto Workers union.
Ford missed its cost-cutting and retail sales targets in May, according to its monthly report card for North America obtained by Dow Jones Newswires.
Ford fell behind its material cost-cutting target through May by 5 percent. Its retail market share, excluding fleet sales to rental car companies, was 10 percent, down 0.7 point from forecast due mainly to weakness in truck sales.
Internet search company Google is pushing hybrids.
On Monday, Google with Pacific Gas & Electric unveiled their vision of a future in which cars and trucks are partly powered by the company’s electric grid and ones that feed electricity back to the grid.
Google also announced it has pledged about $11 million for people and companies who come up with practical ways to speed the development of plug-in hybrid vehicles.
United Auto Workers President Ron Gettelfinger told a Detroit radio station Monday that the union must find a way to give Chrysler health-care concessions, similar to those it gave Ford and General Motors two years ago.
"We've been talking to Chrysler quite frequently -- we do need to find a way to fix the problem there now that Chrysler is in a downward mode," Gettelfinger told WJR-AM in Detroit.
Still trying to gain some traction with its new pickup truck, Toyota is offering customers nationwide a
cash rebate of up to $3,000 or zero-interest financing for 60 months on the 2007 Tundra
.
Buyers of the regular cab model receive a $3,000 rebate; buyers of the CrewMax and Double Cab get $2,000. The zero interest financing is available on all models. The incentives expire July 9. In the Los Angeles, where Tundra sales lag those of northern California, the cash rebates are $3,000 for all models through July 31. Special lease rates are also available. A bonus to salespeople in L.A. on Tundras is also in effect through July 2.
Introduced in February, the Tundra has had a tougher go of it than some, including perhaps Toyota, anticipated. The loyalty rates among domestic truck buyers have remained strong, and the full-size pickup truck, in general, has been soft and is expected to continue to be cold throughout the summer, according to Edmunds.com's analysis of consumer purchase intent.
Toyota said Friday it is in talks with Japanese partner truckmaker Isuzu on developing diesel engines, Japan’s business daily Nikkei reports.
Toyota would outsource diesel engine production to Isuzu, famous for its diesel technology. The 200,000-a-year diesel engines would go into Toyota small cars in Europe, the newspaper says.
Toyota owns 5.9 percent of Isuzu. Isuzu formed a capital alliance with Toyota in November after dissolving its tie-up with General Motors in April 2006. Isuzu still supplies diesel engines to GM for its large trucks.
The Toyota-Isuzu deal is yet another indication of increasing interest by Japanese automakers in diesels. Earlier this week, Nikkei reported Honda plans to sell diesel vehicles in the U.S. and Japan by 2009.
I was at a Ford dealership Thursday when the first 2008 Ford Taurus arrived at
the showroom. The dealership positioned the pearlescent white car right at the door so it could not be missed.
The big question is how will the Five Hundred renamed the Taurus play? Will Taurus be recalled as the blockbuster innovator it was in the 1980s? Or will it be seen as the dying-on-the-vine rental car it became at the end of its life?
The sales staff inside the dealership wonder the same. They are about evenly divided on what the Taurus name stands for. Now they’ll see what customers think.
Advertising for the new Taurus, which tries to reestablish the nameplate and promote the Taurus as the safest full-size car in America, launches Monday.
French automaker Renault reportedly is considering creating a cheaper version of its no-frills Logan sedan that would reportedly cost $3,000. Ford, meantime, has selected Brazil to build its next-generation Fiesta subcompact, which would be sold in North America as well as its traditional markets.
Both moves illustrate accelerating trends: the emphasis on small, inexpensive vehicles for emerging markets as well as mature ones like North America; and the increased use of low-cost production sources for vehicles.
General Motors and bankrupt auto parts maker Delphi Corp. reportedly are near a deal with the United Auto Workers (UAW) union that would provide a cash payout to Delphi workers in exchange for lower hourly wages, according to news reports this morning.
The Detroit News reports the Delphi deal involves offering 4,000 UAW workers a cash payment in return for accepting lower wages that could range from $14 to $18 per hour. Workers could also take the lump sum and accept early retirement or return to GM. GM would fund the program, which could be a done deal in the next week or so, allowing Delphi to emerge from bankruptcy. Delphi filed for bankruptcy in October 2005.
The Delphi dilemma has been a dark cloud of uncertainty hanging over GM’s head -– and the heads of suppliers and customers of Delphi. A deal would provide everyone associated with Delphi relief.
It also sets the stage for this summer’s UAW negotiations with Chrysler, Ford and GM. The Big Three are seeking deep and unprecedented concessions from union workers in pension, health care and labor costs to make them competitive. The Big Three claim they are at a $30-an-hour labor-cost disadvantage against Toyota and Honda.
Honda plans to sell diesel vehicles in Japan by 2009, the Nikkei business daily reports today. Honda earlier said it could introduce a diesel in the U.S. the same year.
Last year, Honda said it had developed a new and simple diesel as clean as gasoline cars. The engine could be on a car in the U.S. by 2009, Honda said at the time. Nikkei reports the new diesels, development of which Honda has been speeding up, would first go on the compact CR-V sport-utility and Accord sedan.
Honda’s potential sale of diesels in Japan and the U.S. suggests a shift in strategy by some Japanese automakers.
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.
Beginning today, General Motors' Saturn division will have in its showrooms a Toyota Camry and Honda Accord to test-
drive against the Saturn Aura
.
"This is a statement of confidence,†Scott McLaren, Saturn’s field and sales advertising manager, said in an interview with AutoObserver. “The Aura stands tall as the 2007 North American Car of the Year. We think this is the best light for it to be shown to the consumer.â€
The side-by-side-by-side test-drive officially runs through July 31, though Saturn dealers, who are responsible for obtaining the Camry and Honda for their showrooms, can continue it, said McLaren.
Chevrolet is considering a similar program for the fall when it launches the redesigned Malibu. Chevy is contemplating having a Camry, the nation’s best-selling car and the Malibu’s prime competitor, in its showrooms for test-drives against the Malibu.
Small cars are hot and getting hotter this summer. Big trucks as well as large, midsize and luxury SUVs are not. And the Buick Enclave looks like another winner for General Motors, according to Edmunds.com's analysis of consumer intent.
Consumer intent is determined by what vehicles consumers are shopping for right now on Edmunds.com and what they likely will buy in the next 30 to 90 days. That demand -– or lack thereof -– has a direct correlation to prices and incentives.
For consumers in the market for small cars, buy now because the prices won’t be better and might even go higher. For large truck and SUV shoppers, hold off; bigger incentives are on the way, says Edmunds.com CEO Jeremy Anwyl yesterday in a presentation to the Society of Automotive Analysts.
Here’s a rundown by category and individual models of what’s hot and unlikely to see higher incentives or increased discounting so now is as good time to buy as any. Also following is a listing of what categories and individuals aren't so hot, indicating buyers should hold off their purchases for richer incentives and deeper discounting:
The question car shoppers ask after "What should I buy?" and "How much should I pay?" is "When do I buy?"
Edmunds.com already helps with what to buy and what to pay. Now, Edmunds.com is adding a feature to help consumers time their vehicle purchases to take advantage of the best pricing and richest incentives.
In a presentation to the Society of Automotive Analysts in Detroit this week, Edmunds CEO Jeremy Anwyl told the gathering that Edmunds.com analysts study consumer intent, which indicates the demand or lack of demand for a vehicle, to predict a month or so in advance whether an auto manufacturer will add incentives or if dealers will be discounting.
Conversely, Edmunds.com can predict what vehicle is hot, based on consumer intent, and subsequently won’t require incentives or discounting in the near future, making now a better time to buy than later.
The Edmunds.com will add the buy/wait designation later this year, Anwyl told the SAA.
Ford Motor Co. managed something of an upset Wednesday as J.D. Power & Associates released the results of its closely watched Initial Quality Study (IQS) of 2007 models. Neal Oddes, J.D. Power’s director of product research and analysis, said the results of the quality survey contained very good news for Ford.
“Fourteen Ford Motor Company models placed in the top three of their respective segments — an achievement unmatched by any other corporation this year — which is a testament to the improvement in quality for Ford Motor Company vehicle models and plants. In addition, their Lincoln nameplate, which receives two segment awards, improves considerably to rank 3rd in 2007, from 12th in 2006,” Oddes said.
DaimlerChrysler AG's distributor for the Smart minicar has almost 20,000 paid U.S. "reservations" for the two-seaters, Smart USA President Dave Schembri said.
The Smart Fortwos go on sale in January, will sell for less than $12,000 for the base model to about $17,000 for a convertible.
Smart USA, owned by United Auto Group Inc., began accepting the $99 fees in March.
General Motors CEO Rick Wagoner told shareholders at Tuesday’s annual meeting that the automaker is making progress in its turnaround effort.
Wagoner said GM, which lost more than $12 billion in the past two years, has made "major progress" in its restructuring. GM has cut more than 34,000 jobs and closed 12 plants. Wagoner said those changes have slashed GM’s structural costs by $6.8 billion in 2006. GM is on track to reach its target of cutting those costs by an additional $2.2 billion this year, he said.
Wagoner said this year's goals include closing a deal for Delphi Corp. to emerge from bankruptcy and cutting GM’s health-care costs, "a staggering $4.8 billion" in 2006, he said. He added that GM would be looking to the upcoming UAW negotiations to increase its cost-competitiveness.
General Motors has just awarded two development contracts for the lithium ion battery in the E-flex propulsion system to be used in its Chevrolet Volt plug-in hybrid.
A reliable battery, the biggest challenge in developing electric vehicles, could mean the Volt would be production-ready by 2010, GM has said.
The battery proposals were awarded to one small company and a giant, both offering completely different solutions, GM said.
No one can ever accuse former DaimlerChrysler CEO Juergen Schrempp of not knowing how to make a buck. The mastermind of the Daimler and Chrysler "merger" made a bundle on the marriage and apparently will make another killing on the divorce.
According to a report today in the German newspaper Handelsblatt, Schrempp could earn the equivalent of $134 million from the sale of Chrysler Group to Cerberus Capital Management, a deal expected to close in July.
The North American auto industry received its first important grade on its
2006 report card today when Harbour Consulting revealed the outcome of its annual manufacturing productivity study.
Top scorers among the six major automakers evaluated (General Motors, Ford, Chrysler, Toyota, Nissan, Honda) are:
Toyota - first in total manufacturing productivity, which includes final car assembly as well as also stamping, engine and transmission production.
Honda - first in vehicle assembly productivity.
General Motors – first to win three of the four plant awards. No. 1 were GM Oshawa #2 for vehicle assembly; GM Spring Hill, engine assembly; GM Toledo, transmission production. Honda Marysville stamping took the fourth plant award.
“Toyota was the overall leader but with a slim and marginal lead,†said Ron Harbour, president of the Michigan-based Harbour Consulting.
The productivity gap among the six manufacturers was the closest in the nearly two-decade history of the study. That gap is so close, Harbour said, “There’s no telling who will be on top next year.â€
The Chinese government reported auto industry profits in the country soared 70 percent in the first three months of this year compared with last year.
The country's major automakers had a combined profit equivalent to $1.7 billion (U.S.) in the first quarter, jumping by 69.9 percent from a year before, the country’s Ministry of Commerce announced in Beijing Tuesday.
Interestingly, while Chinese automakers -- and there are many of them -- cumulatively made $1.7 billion in the quarter, the three U.S. automakers combined lost about $1.9 billion.
Nissan-Renault chief Carlos Ghosn said this week Nissan should achieve its 2007-2008 fiscal year profit targets after missing them by more than 10 percent in the 2006-2007 fiscal year that ended March 31.
"We are pretty confident, but it's only two months into the fiscal year so we'll have to see," Ghosn told reporters after delivering a speech in Detroit to the Society of Automotive Engineers Foundation.
Ghosn apparently is looking for Nissan’s cost-cutting –- not sales growth -– to help it meet its targets. Despite launching new models this year after several months without anything new, Nissan sales are not stellar. Edmunds.com predicts Nissan sales will be down for May, when they are reported next Friday, though market share will hold steady. Nissan also is looking to Europe and emerging markets for higher sales to offset the depressed sales in the U.S. and Japan.
Automakers apparently hope to end what looks to be a flat-to-down month of sales in May on a high note by announcing Memorial Day sales that actually run through the end of the month.
General Motors’ "Memorial Day Sale" campaign, announced Thursday, runs through May 31. GM is offering zero percent financing deals for 36 months and a $1,000 bonus on several Buick, Chevrolet, GMC and Pontiac vehicles in its lineup, including large pickup trucks and SUVs from the 2006 and 2007 model years. GM is also offering zero percent financing for 60 months on three Saturn models -- the Vue SUV, Ion small car and Relay minivan. Separate sales incentives on GM's luxury Cadillac, Hummer and Saab brands will also be available.
On Wednesday, Ford began offering a $1,000 rebate on certain Ford F-Series Super Duty pickup trucks, specifically regular and super cabs, through the end of the month. Ford just launched the redesigned Super Duty truck as a 2008 model-year product.
The rebates, of which more are likely to be announced, come on the heels of dismal April sales and, as Edmunds.com predicts, a flat-to-down May during this normally brisk sales time.
India is predicted to be the fastest-growing auto manufacturing nation in the next few years, according to a forecast by New York-based PricewaterhouseCoopers. The firm predicts between 2006 and 2011, India –- not China -– will be the fastest-growing auto manufacturer among the world’s top 20 carmaking countries.
"Everyone is looking at India after what happened in China,'' Ashvin Chotai, who works in London as director of Asian automotive research for Global Insight, told Bloomberg News. "There's no other place that even comes close.''
In the year ending March 31, India’s passenger car sales increased 21 percent to 1.38 million. By 2015, they're expected to more than double, according to the Society of Indian Automobile Manufacturers.
The U.S. auto market will pick up in 2008, but Detroit’s three automakers won’t be beneficiaries, according to a new forecast from the London-based market research firm Global Insight.
Light-vehicle sales will rebound next year after dipping to 16.2 million in 2007, said George Magliano, Global Insight’s director of North America, at a conference in Tokyo and reported by Automotive News. Magliano said sales would rise gradually, but they won't regain the 17 million level -- last seen in 2001-- until 2010. By 2012, sales will climb to 17.7 million. Between now and then, General Motors, Ford and Chrysler combined will lose seven points of market share.
New York City Mayor Michael Bloomberg announced on NBC’s Today
show Tuesday that the city’s cab fleet will go entirely hybrid within five years, and all of its vehicles for hire must meet new emissions and mileage standards by next year.
New York now has just 375 hybrids among its 13,000 taxis. That number will increase to 1,000 by October 2008 and will grow by about 20 percent each year until 2012, when every cab is a hybrid, the Associated Press reported. The shift to hybrids is part of Bloomberg’s sustainability plan for the city that includes a 30 percent reduction in carbon emissions by 2030.
Ford has a lot at stake in the New York cab business with the large, fuel-guzzling Ford Crown Victoria being the cabbie’s favorite ride, and having the most hybrids in New York's taxi fleet.
Ford was quick to jump on Bloomberg’s announcement, sending out a press release on the virtues of its Ford Escape Hybrid, including its average 36 miles per gallon compared with the 14 miles per gallon of the Crown Vic.
Tesla Energy Group, a newly formed division of electric carmaker, Tesla Motors, announced today that it signed an agreement to develop and supply Think, a Norwegian electric carmaker, with lithium-ion battery packs.
The agreement covers the development and delivery of battery packs starting in December and continuing through 2008. The deal represents up to $43 million in revenues.
A German newspaper reports that, in light of Chrysler’s sale to Cerberus Capital Management, China’s Chery Automobile Co. wants to reexamine the deal it struck with DaimlerChrysler to build small cars for Chrysler in China for export to North America and Europe.
Handelsblatt quotes Chery General Manager Zhang Li as saying the company wants to renegotiate with Chrysler because of the sale and that Chery has not talked with the new owners yet.
Chrysler and Chery have a framework agreement, but negotiations around specifics, including the small car discuss, have not been hammered out. Only last week, Chrysler CEO Tom LaSorda, in his first press conference after the sale to Cerberus, said he expected the deal with Chery to proceed, but that Chrysler was interested in expanding the deal with Chery beyond the original framework.
A negotiating session between Chrysler and Chery, previously scheduled, is set for next week.
General Electric announced Monday it plans to sell its plastics division, a large supplier to the automotive industry, for $11.6 billion to Saudi Basic Industries Corp., the largest public company in Saudi Arabia.
Heightened competition and increasing price pressures prompted GE to put the plastics division, in its portfolio since 1930, up for sale. Sabic was an obvious buyer with its vast supplies of low-cost Saudi Arabia petroleum at its disposal for making plastics.
GE Plastics, with operations in Detroit, has made news in recent months for its lightweight materials that could change the way car body parts are made in the future.
With Cerberus Capital Management winning the bid for Chrysler, the other suitors didn’t go off with their tails between their legs. Instead, they are doing other deals that are garnering them headlines.
Private equity firm Blackstone Group captured global headlines Monday with the announcement that it plans to raise as much as $7.75 billion going public with its stock, with $3 billion of those funds coming from the Chinese government.
Las Vegas billionaire Kirk Kerkorian and his Tracinda Corp., which bid on Chrysler for the second time, shifted gears away from cars again and back to casinos. Tracinda filed notice Monday that it had entered into negotiations with MGM Mirage, which owns the luxurious Bellagio and the under-construction CityCenter, believed to be one of the most expensive privately financed projects in U.S. history. As usual, no one is sure what Kerkorian and Tracinda are up to with the deal.
Canadian auto supplier Magna International, which received an influx of $1.54 billion from Russian tycoon Oleg Deripaska that was thought to boost Magna’s Chrysler bid, announced that it is forming a carmaking venture with Russia’s Avtovaz.
India's Tata AutoComp Systems and France's Valeo are in discussions to buy a stake in Visteon Corp., the Business Standard in India reported today, citing unnamed sources in the article picked up by Reuters news service.
It was not clear whether the two firms would jointly or independently bid on the ailing parts-making unit that was spun off from Ford.
The newspaper said a deal could be valued between $1.5 billion to $2 billion.
Detroit-based auto supplier American Axle & Manufacturing said it will make rear-drive modules for a 2009 model year Chinese crossover from Chery Automobile Co.
No details were provided but it is the first piece of business with Chery by American Axle, which held the grand opening of a facility in China this week.
Chery is partnering with Chrysler to build a small car for export to North America and Europe. Chrysler CEO Tom LaSorda said this week that Chrysler would like to expand its relationship with Chery beyond the one small car.
General Motors reportedly is considering selling its medium-duty truck business to Navistar International Corp. GM apparently is looking to shed businesses its deems non-core and generate cash for its automotive operations. GM sells about 40,000 medium-duty trucks a year, sold as the Chevrolet Kodiak and GMC TopKick, built in Flint, Michigan, Navistar builds trucks that compete directly with GM’s models.
More than a fifth of the world's auto suppliers are in danger of becoming "significantly distressed financially" over the next 12 months and a third of North American suppliers already are financially distressed, according to a survey released this week by consulting firm BBK.
BBK, a global business advisory firm best known for its turnaround projects with auto suppliers, studied 80 of the top 150 global auto suppliers and assigned a grade of A to F depending on a company's potential for problems over the next year. A grade below a B indicates some level of distress.
If you are watching television during these grand finale sweep weeks of May, you can’t miss Saturn’s
new advertisements –- unless you have TiVo.
As if you're not a TV watcher, you'll see the ads on the Internet, in magazines and newspapers and on billboards.
The ads are from Saturn’s recently appointed ad agency, and they are everywhere. They ask consumers to rethink all sorts of things -- status, beauty, strength, power and ultimately their idea of an American car.
Saturn's showroom of new models and now its new ad campaign mark nothing short of a relaunch of General Motor's youngest brand.
Chrysler CEO Tom LaSorda said the automaker is shopping for partners, particularly to build smaller cars, especially for foreign markets.
LaSorda said Chrysler would like to expand its proposed relationship with China's Chery beyond what is already negotiated. But it will shop for other partners as well. LaSorda reiterated what Chrysler executives have said for years: It cannot profitably -– therefore, will not -– develop small cars and their powertrains alone. It must have a partner.
LaSorda said Chrysler needs partners to expand in Southeast Asia, India and Russia.
In the U.S., Chrysler replaced the small and inexpensive Neon sedan with the larger, more expensive Dodge Caliber crossover as its entry-level model. Chrysler needs something to compete with cars like the Honda Fit and Nissan Versa.
DaimlerChrysler announced this morning that it had sold its Chrysler Group to the private equity firm, Cerberus Capital Management, for $7.4 billion.
The $7.4 billion buys Cerberus 80.1 percent equity interest in the new Chrysler. DaimlerChrysler retains 19.9 percent equity interest in the new company.
The new Chrysler includes all of the Chrysler Group, with its Chrysler, Dodge and Jeep divisions, in addition to Chrysler Financial Services.
The new Chrysler will be responsible for all pension and health care costs of the Chrysler company.
Existing projects with Mercedes-Benz continue, including the development of conventional and alternative powertrains, purchasing and sales and financial services outside the NAFTA region.
Beyond the nuts and bolts of the deal, questions are numerous; some will only be answered in time.
California electric carmaker Tesla Motors Inc. said it arranged $45 million in new private capital to set up retail sales and service facilities in five cities where real estate is pricey.
Whether the company has enough to fund development of a second car is unclear. Bloomberg reports the $45 million in new capital will also be used to finance the second model -- a four-door sedan. However, trade journal Automotive News, quoting a top Tesla executive, said the company will have to go public to produce the second car.
The second model, the four-door WhiteStar, is due in 2010. Tesla plans a $35 million factory in Albuquerque, New Mexico, to assemble as many as 10,000 of the sport sedans a year, with engineering work being done at a Detroit-area facility. Those cars will sell for $50,000 to $65,000.
Magna International, believed to be the leading contender to buy Chrysler, said Russian billionaire Oleg Deripaska is buying a $1.54-billion stake in the Canadian auto supplier to help it expand in Eastern Europe. The investment also may help Magna buy Chrysler.
Magna held its annual meeting in Toronto this morning. On the eve that meeting, Magna chairman Frank Stronach told Canada's Globe and Mail newspaper that he expects drastic measures at the Chrysler Group if Magna International succeeds in buying the automaker. "Sometimes when you're sick, you've got to take some drastic measures and that's unfortunate," he said in the interview.
Magna has a bid for Chrysler with Canadian conglomerate Onex Corp. The two announced earlier this week that they have financing lined up for the deal. The offer has DaimlerChrysler retaining a stake in the new entity.
The purchase of an average-priced new vehicle took 24.7 weeks of median family income in the first quarter, down 1.5 weeks from the fourth quarter of 2006 and down half a week compared to a year ago, according to the Auto Affordability Index compiled by Detroit’s Comerica Bank.
Including finance charges, the total cost of buying an average-priced light vehicle was $28,200 in the first quarter, up 1.6 percent from a year ago. Median family income increased an estimated 3.7 percent from a year ago.
“Consumers reacted to the sluggish economy, the rebound in gasoline prices, and the softness in home prices by spending about $550 less per car than they did in the fourth quarter,” said Dana Johnson, chief economist. “That along with the availability of more attractive financing rates reversed somewhat more than half of the last quarter’s deterioration in affordability.
"With demand soft and the new car companies fighting for market share, buyers were able to find pretty attractive deals on new cars in the first quarter,” Johnson added.
After dismal vehicle sales in April, consumer incentives have been proliferating, according to Edmunds AutoObserver.com’s analysis.
Democratic presidential candidate Barack Obama visited Detroit on Monday and delivered a speech no one here wanted to hear. He demanded the Big Three automaker increase fuel-efficiency by 4 percent a year –- about a mile per gallon a year.
Speaking to a sold-out crowd of 2,000 business leaders at the Detroit Economic Club, Obama said if automakers improved fuel mileage, as president, he would provide up to $7 billion through 2017 to help them defray retiree health care costs, or award them $3 billion over 10 years to help them retool their plants to make more fuel-efficient vehicles.
That's a laughable amount -- not even a drop in the bucket of what it is expected to cost not only automakers but ultimately consumers. The National Highway Traffic Safety Administration (NHTSA) estimates the fuel standards Obama supports would require an investment of $114 billion. NHTSA estimates the Big Three would bear 80 percent of the cost, amounting to about $3,000 to $5,000 more for the price of each vehicle.
Another Detroit-area automotive supplier -- ASC Inc. -- has filed for Chapter 11 bankruptcy protection.
Formerly known as American Sunroof Co., ASC, headquarter in the suburbs south of Detroit, supplies roof systems, body systems and other specialty-vehicle systems to global automakers. The company filed bankruptcy, owing millions of dollars to hundreds of creditors even though it sold off much of its equipment to try to pay its bills.
Most recently, the company was known for building the Chevrolet SSR.
ASC had been trying to position itself as a specialty car manufacturer –- the Ferrari of North America –- with former Ford and Chrysler executive Chris Theodore as its vice chairman.
Toyota has plastered billboards all over the German landscape in what a publication
there reports is the largest billboard campaign in the country’s history -- by a long shot.
To introduce the Auris compact wagon in Europe, Toyota has purchased every available billboard in 82 of the largest cities in Germany for 10 days straight. That’s 202,000 billboards -– about half of the country’s 400,000 available billboards, the German advertising association (ZAW) estimates.
A ZAW official said no such campaign had ever been done on this scale before. An industry expert estimated Toyota’s cost at up to 30 million Euro, though the Japanese automaker likely received substantial rebates for such a high-volume ad buy.
The last big billboard campaign in Germany was a Volkswagen product launch that used 90,000 billboards at a cost of 12 million Euro.
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.
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.
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.
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?
Parties interested in buying Chrysler are expected to submit a second round of bids, described as more detailed, refined ones, this week and beyond. After that, the bids are likely to be narrowed to only a couple and then a leading candidate.
All of the proposals currently in the hands of DaimlerChrysler reportedly include giving the UAW a stake in Chrysler in exchange for cuts in health care costs.
A page 1 story in the Detroit Free Press hailed Santa Monica, California, as leading the way in shifting the transportation paradigm away from petroleum to other fuels.
The article, entitled “California city leads in taking foot off the gas,” discusses efforts by Santa Monica, home of Edmunds.com, to convert its gasoline-powered vehicles to alternative fuels a move that started in 1994.
About 81 percent of the city’s fleet runs on something other than petroleum today. Santa Monica uses an array of vehicles and fuels, from street sweepers running on natural gas to 24 fully electric Toyotas. The city is installing electric chargers in public parks and parking garages to encourage more electric vehicles. The city's goal is to make its entire fleet petroleum-free and be the first in the nation to draw all its electricity from the sun or wind in the next 20 years.
"Santa Monica is leading the way. It's changing the transportation paradigm on what can be done, what is possible," Chelsea Sexton, an electric car and alternative-fuel advocate and former General Motors employee who worked on GM's first electric car program, told the newspaper.
Trade journal Advertising Age contains an intriguing article in the April 16 edition on how companies and their advertisers are developing sounds for brands.
“What does your brand sound like?” the article opens. Those interviewed for the story have various terms to describe branding through sound, including “sonic branding” and “permanent resonance.” Said one advertising exec in the story: Music “tattoos a permanent resonance in your brain,” like learning the alphabet through music or remembering advertising jingles from childhood.
Audi in France took it to another level, creating an album specifically for the female demographic it was targeting for the TT roadster. Ad agency DDB Entertainment Paris paired up with sound designer Beatrice Ardisson, famous in Europe for designing ambient music for Paris hotels, for instance. She already owned a TT and fit the target demographic: a woman of means and “a certain age.”
The result was an album by Ardisson, entitled Take Me for a Ride, intended to depict the feel of what it’s like to drive the TT in the universal language of music.
Sound branding gives new meaning to "music to my ears."
If you watched American Idol this week, you might have
seen two new ads for the Ford Edge
. The commercials were directed by Pulitzer Prize winning writer/director David Mamet.
Using Mamet’s signature for dark imagery and fast-paced dialogue, the spots feature two men sitting, each in a Ford Edge. Talking out their windows, they boast the Edge is quieter than a Lexus RX 350 and quicker than a BMW X5.
The ads -- Mamet's first -- are Ford’s latest attempt to draw attention to its vehicles and convince consumers to put Ford vehicles on their shopping lists.
An analysis of March shopping consideration trends by Edmunds.com’s AutoObserver shows Ford has much room for improvement in that regard.
Ford's newest models, including the Edge and Fusion, run midpack among vehicles considered by shoppers within their segments. Ford’s Mustang and F-150 pickup top their segments for shopper consideration. But Lincoln and Mercury vehicles barely generate a blip on shopper radar screens.
Ford Chairman Bill Ford and Ford CEO Mulally do not rule out an eventual sale or partnership for the company, according to interviews in a new magazine.
"We felt the best thing we could do was get our house in order. That doesn't preclude anything down the road. Because even if ultimately a partnership made sense, we'd be a much stronger partner if we were a strong stand-alone company," Bill Ford told Portfolio, a new Conde Nast business magazine released today.
The lengthy article headlined "Driven to the Brink," written by Betsy Morris, appears in the debut issue of Portfolio. The article reveals Ford family members, who own a controlling interest in the auto company, were pressuring Bill Ford to find an outsider to run the company.
Tyson Foods and ConocoPhillips announced Monday they had formed an alliance to produce and market diesel fuel made from pork, poultry and beef fat.
Tyson will provide the feedstock from its rendering plants. ConocoPhillips will refine it and distribute it through its existing pipelines. The fuel, said to burn cleaner than conventional diesel, will be available by year-end. The venture will produce 175 million gallons a year by 2009.
The deal points to two emerging trends: the shift of agribusiness to transportation fuel and the surge in biodiesel, expected to grow to 1.2 billion gallons in a decade from today’s 250 million gallons.
Cerberus Capital Management, a private equity firm leading a $3.4 billion bid to buy bankrupt auto supplier, Delphi Corp., may be stalled because the United Auto Workers union refuses to cut future wages and benefits for new hires. Cerberus’ offer is contingent on favorable negotiations with the union.
Cerberus also is a bidder for Chrysler. Industry observers speculate Cerberus’ inability to get a deal from the union may sour its plan to also buy Chrysler since it surely will want concessions from Chrysler’s unions as well.
Meantime, General Motors, which created Delphi by spinning off its parts-making operations, may be forced to further subsidize Delphi to keep it afloat.
Nissan Motor Co. confirmed it may miss its goal of selling 4.2 million vehicles in the year ending March 2009, as put forward in its three-year business plan revealed in April 2005.
Failure to make its target is blamed on a lack of new models in North America and a sales slump in its home market.
Nissan reports 2006 financial results next week. It is expected to report its first annual drop in net profit -– forecasted to be 11 percent -- in seven years for the year. More may be revealed about Nissan’s goals at that time.
Away for spring break? No worries, you didn’t miss all that much in the “DaimlerChrysler Sells Chrysler” saga. We’ll bring you up to speed on the latest chapters.
Here’s the condensed Reader’s Digest version of last week’s happenings:
The conference's official theme is "Engineering for Global Sustainable Mobility -- It's Up to Us.” The buzz surely will focus on engines and transmissions, specifically reducing emissions and boosting fuel economy, as well as advancing alternative propulsion systems and alternative fuels.
Who says there’s no jobs in the auto industry, especially in Detroit?
General Motors plans to hire 400 engineers and will hold a career fair May 5.
But forget plastics. The future is in technologies. The 400 engineers GM seeks must be highly specialized in powertrain, product development or fuel cell, OnStar and information technologies.
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.
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.
As expected, Toyota announced today that American Jim Press will become the first non-Japanese to serve on Toyota Motor Corp.’s board of directors. He is expected to be based in Japan.
Press will be promoted to senior managing director at the parent company in June. He now is a managing officer of the Japanese company and president of Toyota Motor North America Inc. in New York.
Former Chrysler Chairman Lee Iacocca has written a new book, Where Have All the Leaders Gone?,
scheduled for release by Simon & Schuster Tuesday, and, in it, he doesn’t mince words.
In the book that reviewers describe as a combination of memoir, business advice and political harangue, Iacocca rips President Bush, the proposed Chrysler sales and his Chrysler successor Bob Eaton, who engineered Chrysler’s sale to DaimlerChrysler.
Page 1 of the book, coauthored with Catherine Whitney, sets the tone: “We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car…. I hardly recognize this country anymore.â€
“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.
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.
Isuzu has purchased land in Birmingham, Ala., for a vehicle assembly plant, a company spokesman confirmed Monday. Isuzu paid $7.8 million for the land previously was occupied by a warehouse of Del Monte Foods.
The company spokesman said Isuzu is preparing a full-fledged return to production in the U.S.
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.
Chrysler is undoubtedly in play and its sale likely is a foregone conclusion. But DaimlerChrysler
executives want potential buyers to know this is no fire sale, especially since not everyone at the German automaker is sold on a Chrysler sale.
“The company [in Stuttgart] is divided right down the middle. Half want a split and half don’t,†said one official who has worked for the company in Europe and North America. The source, however, said the company likely is past a point of no return and will be forced to sell Chrysler.
But DaimlerChrysler has certain requirements that must be met before it sells Chrysler. DaimlerChrysler CEO Dieter Zetsche set out four criteria for the sale of the Chrysler Group at this week’s annual meeting in Berlin.
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.
Ford CEO Alan Mulally received $28.18 million compensation in 2006; it included an $18.5 million bonus, according to the company’s annual proxy released today. The former Boeing executive replaced Bill Ford as CEO in September.
Mulally received a $7.5 million hiring bonus and $11 million to offset the compensation he gave up for leaving Boeing. He also received 4 million Ford stock options last year; at least 3 million of those are not available until the company is turned around. The expense for Mulally’s options and other stock-based awards totaled $8.6 million. It includes cost recognized in 2006 for a $5 million stock option grant that he received in March as part of his 2007 option grant, Ford said.
Mulally also received other compensation totaling $334,433, which included $172,974 for required use of the corporate aircraft, and $55,469 for relocation costs and temporary housing.
The Union of Concerned Scientists released its latest report on the environmental performance of the world’s eight largest automakers this week based in 2005 model-year vehicles.
The group assigned each automaker a global warming and a smog score for its performance in limiting emissions of greenhouse gases -- blamed for global warming -- and smog-producing pollutants.
Honda took 1st place for the fourth consecutive report, followed closely by Toyota. Volkswagen was 3rd in its global warming score but near the bottom for smog production. Hyundai-Kia ranked 4th in both categories. Nissan was 3rd in the smog score.
Detroit’s Big Three ranked last. Ford’s smog rating was better than Volkswagen’s. DaimlerChrysler was the worst in both categories.
Toyota announced to its dealers Tuesday significantly lower prices for select equipment on Prius hybrid
models, Edmunds.com's AutoObserver has learned. The price reductions, which went into effect immediately, range from $600 to $2,000, in equipment packages, some of which have been slashed by half.
The price reductions come on the heels of the Prius posting its all-time, best-ever monthly sales record in March, breaking the previous record set in February. Prius sales in March totaled 19,156, an increase of 133.2 percent over March 2006.
Toyota had some incentives on Prius models in March this year for the first time. Earlier, buyers were put on waiting lists for months before they received theirs. The new price reductions apparently are to replace the incentives but, instead of incentives, which have an expiration date, are permanent.
In addition, the federal tax rebate on the Prius of $1,575 dropped to $788 on April 1.
Even before the latest price reductions, the price consumers were paying for the Prius was dropping. Edmunds.com’s analysis calculated the Prius’ True Market Value at $21,296 in March, down from $3,284 in December.
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.
Ford announced today the 2008 Ford Taurus will have a base manufacturer’s suggested retail price
(MSRP) of $23,995, including destination and delivery. The automaker claims the Taurus, previously known as the Five Hundred, will be priced thousands of dollars less than comparably equipped sedans like the Toyota Avalon and the Chrysler 300.
The price appears competitive depending on how you look at it – or who is looking at it.
“Considering the size, powertrain and features the new Taurus offers, it undercuts its closest competitors on price by several thousands dollars, which is good,†noted Alex Rosten, manager of Pricing and Market Analysis for Edmunds.com’s AutoObserver.
“However, old Taurus buyers looking to check out the new Taurus are in for some significant sticker shock,†he noted. “The 2006 Taurus started at $21,000, and, after discounts and rebates, could be purchased for $16,000 to $17,000. Granted, the new Taurus is a much better car, but it’s not the most affordable to Taurus loyalists.â€
March car sales are just beginning to roll in today, but one trend immediately noticeable is that some compact cars are hot, hot, hot -- and with little incentives required to prod customers.
Sales of the Mazda 3, only mildly freshened this year, soared a whopping 93 percent. Hot since it was introduced nearly four years ago, Mazda 3 sales shot up to 15,606 in March from 8,087 from a year ago. While the car had some lease programs and special financing on it, the increased demand for the Mazda 3 is due mainly to rising gas prices, according to Edmunds.com’s AutoObserver analysis.
Mitsubishi’s turnaround appears to be taking hold, led by the new Lancer. The redesigned compact car hit showrooms in March, prompting sales to soar 40 percent over March 2006 levels.
Edmunds.com's monthly True Cost of Incentives (TCI) show the industry average incentive on compact cars was $1,170 up 12.5 percent from $1,040 in February. By comparison, the average automotive manufacturer incentive on all cars was $2,512 per vehicle sold in March 2007, up $220, or 9.6 percent, from February 2007, and down $9, or 0.4 percent, from March 2006.
Japan's vehicle sales fell for a 21st straight month, led by Nissan and Toyota. Japanese automakers selling in their home market have been experiencing their business year since 1977.
What does this mean for the U.S.? The pressure will be on Japanese automakers to maintain and boost sales in the U.S. to offset slow sales in their home market.
Sales of cars, trucks and buses, excluding minicars, fell 12.6 percent to 487,738 vehicles in March from a year earlier, the Japan Automobile Dealers Association reported Monday. Nissan's sales fell 16 percent; Toyota's dropped 12 percent. Car sales have dropped despite increased household spending. The only bright spot in Japan’s auto sales is minicars.
The value of the Ford family's stake in the ailing automaker has dropped by half since 2001, prompting worried heirs to discuss their options with investment banks, Fortune magazine reports.
The family's class-B Ford stock was valued at $1.14 billion when Bill Ford took over as CEO in 2001. Since then, it has dropped by $581 million in market value, the magazine notes. The shares' dividend payouts -- $28 million in 2005 -- will be zero this year.
Presumably Ford CEO Alan Mulally understood when he took the job that he’d not only have to turn the automaker around but hand-hold the Ford family.
The United Auto Workers (UAW) lost nearly 19,000 members in 2006, dropping the union's ranks to a new post-World War II low, according to a story in the Detroit News, citing a union report filed with the U.S. Department of Labor.
The lower number of members decreases the union’s clout as it enters negotiations for new national contracts for Ford, Chrysler and General Motors. With the current contract expiring in September, these negotiations are critically important for the union, which is trying to protect the jobs, pay and benefits of its remaining members, and the automakers, which need concessions in health care and retiree costs to compete with foreign automakers that don’t have the same legacy costs.
While the implications are more macroeconomic than automotive, Europe has eclipsed the U.S. in stock market value for the first time since World War I, the Financial Times reports, noting it is “another sign of the slipping of the global dominance of American capital markets.”
Ian Harnett of Absolute Strategy Research, who identified the move for the paper, said this marked a “seismic shift” in markets.
DaimlerChrysler, once it ditches the Chrysler Group, could change its name back to Daimler-Benz AG.
The Detroit News reports Ekkehard Wenger, a longtime German shareholder activist and business professor, is proposing at Wednesday’s annual meeting that the company’s name be changed back to Daimler-Benz AG. "With this, we want to put more pressure on the management to resolve the Chrysler problem," Wenger told the Detroit News.
The name change could take place after the sale of Chrysler but no later than next March.
On Tuesday, automakers report March sales figures. On Wednesday, DaimlerChrysler AG holds its annual meeting in Germany. Also on Wednesday, the New York auto show opens its first of two press days with the public opening set for Friday.
Will they or won’t they reveal the buyer for the Chrysler Group? Or will they give any hints at all as to what’s going on with the possible Chrysler sale?
Those are the questions on everyone’s mind about Wednesday’s DaimlerChrysler annual meeting being held in Berlin.
German newspapers report DaimlerChrysler has received offers for Chrysler, ranging from $6 billion to $9 billion. Daimler-Benz AG paid about $40 billion for Chrysler in 1998.
The 2007 New York Auto Show is all about next year's new production models, with Edmund’s Inside Line
providing a complete rundown and nearly minute-by-minute coverage of the show’s activities.
This year's New York show will host debuts from every corner of the world in all shapes and sizes. Introductions will include big SUVs from both Detroit and Japan along with a couple midsize crossovers. Luxury cars will be prominent as well, with new models expected from both Infiniti and Mercedes-Benz.
There will be a couple of concepts, too, but even those design studies are expected to make production in the not-too-distant future. General Motors, specifically, will unveil three design studies for mini-cars. Show-goers will be able to vote for their favorite.
This is the kind of story that might normally come out of Korea or some far away place, but it happened over the weekend in neighboring Ontario, Canada.
Workers occupied an auto supplier plant in Toronto owned by bankrupt Detroit-based Collins & Aikman throughout the weekend. Workers at another Collins & Aikman plant in Guelph, Ontario, did the same on Saturday, forcing one of its customers, a Chrysler plant in Brampton, Ontario, to stop production. At another plant in Ingersoll, Ontario, workers threatened to stop work Sunday.
The Union Auto Workers (UAW) will host a meeting of Toyota factory workers Saturday in Lexington, Ky., as a step in trying to unionize Toyota’s oldest and biggest U.S. plant.
The union says the meeting will be a town hall forum to air their grievances and to provide “an opportunity for Toyota workers to share with the community the human cost of Toyota's success," said a union official.
The UAW is desperate to maintain its shrinking ranks, but has been unsuccessful in organizing Asian-owned factories.
General Motors told employees at its Spring Hill, Tenn., plant that the factory will get a new product to replace two Saturn models, which end production today.
It sounds like the Tennessee plant will get the new Chevrolet crossover vehicle, based on the same architecture as the recently introduced Saturn Outlook and GMC Acadia and the upcoming Buick Enclave. Edmunds.com’s Inside Line reported this week that the Chevy crossover in the works for the 2009 model year may be called "Nomad," reviving a storied nameplate that dates back to the 1950s and a 2004 concept vehicle.
Chrysler Group and Sirius Satellite Radio announced today that Chrysler will be the first and only auto manufacturer to offer Sirius Backseat TV in its vehicle lineup in the 2008 model year.
The feature debuts on 2008 Chrysler Town & Country and Dodge Grand Caravan minivans. It will also be available on the 2008 Chrysler 300, Dodge Charger, Dodge Magnum, Jeep Commander and Jeep Grand Cherokee. Chrysler sees innovative technology as a way to stand out from the crowd, generally, and in minivans, specifically.
Three channels of family TV programming -- from Cartoon Network, Disney Channel and Nickelodeon -- will be delivered directly to the vehicle. Rear-seat passengers will be able to watch shows such as Nickelodeon’s SpongeBob SquarePants, Disney Channel’s Hannah Montana and Cartoon Network’s Foster’s Home for Imaginary Friends.
If you work in the auto industry, Cerberus Capital Management may well be your next employer.
The private equity firm is becoming a household name in the auto industry, especially in Detroit, as it expands its automotive base and shows interest in even more holdings.
On Wednesday, after the stock market closed, it was announced that Cerberus had agreed to buy bankrupt auto supplier Tower Automotive Inc., in a deal valued at about $1 billion.
Cerberus is said to be a front-runner to purchase Chrysler. It is part of a group planning an investment of up to $3.4 billion for bankrupt Delphi Corp. Cerberus led a consortium of investors to buy 51 percent of General Motors Acceptance Corp., a deal worth $14 billion in cash over three years to General Motors. And Cerberus purchased the flooring and acoustics business of Collins & Aikman, another bankrupt automotive supplier being dissolved.
Not only is Cerberus adding to its holding, its adding high-powered automotive talent to its roster. Cerberus just signed Wolfgang Bernhard, formerly of Chrysler and Volkswagen, on as an advisor, likely to provide guidance in a potential Chrysler purchase. Cerberus also signed on former Ford executive Robert Rewey. They join former Ford executive David Thursfield, who heads Cerberus’ automotive unit.
General Motors’ Chevrolet division will unveil a trio of minicars at the New York auto show next
Wednesday. The automaker has released a photo of one of the three, one called the Chevrolet Trax.
By unveiling the minicars in New York and allowing visitors to vote for their favorite of the three on www.vote4chevrolet.com, GM certainly is exploring the minicar segment in North America, where it has no such offering at the moment. However, the minicars are more important for world markets, where Chevrolet is vastly increasing its presence and sales.
The minicar unveilings are also intended to further emphasize the message GM has been trying to get across; that is, it is a global company with global design and manufacturing capabilities, resources it is leveraging across the world.
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.
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.
Ford CEO Alan Mulally said Ford will expand its collaboration with other automakers, particularly in such areas as powertrain engineering and manufacturing.
In an interview with trade journal Automotive News, Mulally said he has made it a priority to meet leaders of other auto companies during his first six months on the job. He now says he's "just about talked to all of them" and that new business relationships are likely to result.
"We have a really good set of partners and alliances on both technology and the vehicles themselves," Mulally said in the interview. "As we go forward, we'll see more of it. Even more collaboration will be a big part of our plan."
So far, the vote is overwhelming: 440,000 to 2,200.
As of this week, General Motors’ “Vote for Volt†Web site has 440,000 visitors voting in favor of GM building the Chevrolet Volt plug-in hybrid concept versus 2,200 voting nay.
At the same time, GM Vice Chairman Bob Lutz in his Fastlane blog this week blasts naysayers, who claim the Volt is nothing more than a publicity stunt. Lutz’s comments came in response to a Detroit News article that said GM was “unplugging†the Volt, trying to tone down the publicity and expectations around the concept.
The good news is: March may be one of the best months of 2007.
The bad news: March sales will be lower than last year and still be one of the best months this year, suggesting little for the industry to look forward to for the rest of the year.
This month's new vehicle sales (including fleet sales) are expected to be 1.48 million units, a 3.0-percent decrease from March 2006, according to Edmunds.com. Though sales are lower this March than last, Jesse Toprak, executive director of Industry Analysis for Edmunds.com, notes more cars were sold in March last year than any other month of last year. He predicts that this March may be one of the best months of 2007.
"This month, the industry faced debilitating winter storms, less compelling marketing messages and reduced fleet sales, so it is no surprise that year-over-year comparisons reflect a relative downturn," said Toprak. “Nevertheless, I believe we are still on track for annual sales volumes of approximately 16.5 million vehicles, along the lines of what we saw in 2006."
Typically, the summer has been the strongest period for new-car sales. This may be shifting because new-model introductions come earlier in the year than they used to, possibly sparking traffic to showrooms during historically quieter months.
Detroit’s NBC affiliate, WDIV, aired a story on its Auto Insight report on Saturn’s growing success. The
report stemmed from and included me citing an Edmunds.com’s AutoObserver report on Saturn’s surprising 60-percent increase in sales in February and heavy cross-shopping of Saturn’s new models by prospective Toyota, Honda and Nissan buyers.
An interesting tidbit uncovered by WDIV anchor Guy Gordon was the fact that the Saturn of Troy dealership, the Troy, Mich.,-based showroom where the segment was filmed, has engaged for years in a friendly competition with the neighboring Toyota dealership. Both owned by the same dealer, the two have run neck-and-neck in sales. But the Saturn dealership began pulling ahead last fall, and this month is likely to be 100 cars in front of the Toyota dealership.
Ford has puts its pedal to the metal in developing the next-generation diesel engine for its F-Series Super Duty pickup truck after an ugly contract dispute and quality issues with its current diesel engine supplier, Navistar International Corp.
Sources say Ford is hustling to quickly develop its own diesel engine, which accounts for 40 percent of its F-Series pickup sales, so it doesn’t have to rely on Navistar.
Some important auto-related meetings are on the docket this week and worth watching.
First up, President George Bush meets again with General Motors Chairman and Chief Executive Officer Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Tom LaSorda.
On Tuesday, 1,500 UAW delegates meet in downtown Detroit to discuss issues for upcoming negotiations. The UAW’s contract with GM, Ford and Chrysler expires in September.
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.
While it isn’t specifically auto related, a lawsuit between U.S.-based Oracle Corp. and German-based SAP AG is worth some attention.
Oracle yesterday sued SAP for "corporate theft on a grand scale." Oracle claims its business software rival used customers' online access codes to steal copyrighted software.
Oracle, which is battling with SAP in the market for software that helps companies automate business functions, accused the German company of gaining repeated and unauthorized access to its password-protected customer support Web site.
In its lawsuit, Oracle said a "storehouse of stolen Oracle intellectual property" allowed SAP to offer cut-rate support services to Oracle customers and lure them to their own products.
U.S. and other Western companies, including automakers, have listed intellectual property theft as one of their top concerns in doing business with Chinese companies, some of which are their own partners. Now it appears intellectual property worries need to be extended to friends in Western countries as well. The outcome should be interesting to watch.
First a legal dispute stalled Ford’s Super Duty sales; now a quality issue halts sales.
Ford ordered dealers Wednesday to stop selling its Super Duty pickup with the 6.4-liter diesel engine Wednesday and recalled the 8,400 trucks already sold. The automaker has received three reports about flames shooting out of the tailpipes.
The Super Duty, on the market for two months, is a critical vehicle for sales and profits –- it is one of Ford’s most lucrative models and the diesel version represents 40 percent of Ford’s F-Series sales. In addition, Ford is positioning the Super Duty as a halo over its full-size pickup line as Toyota launches its Tundra pickup.
The sale of Chrysler could occur soon, as early as the end of this month or next.
Chrysler CEO Tom LaSorda told a group of dealers he gathered in Florida Wednesday that a decision about a possible Chrysler sale would be made relatively soon. He didn’t give a specific date, but said the ordeal would not go another six months, dealer sources told various newspapers.
Further, The Wall Street Journal, citing unnamed sources, reports today that DaimlerChrysler expects to have preliminary offers to buy Chrysler by the end of this month from at least three bidders: private equity firm Cerberus Capital Management LLC; the private-equity tandem of Blackstone Group and Centerbridge Partners LP; and Canadian auto parts maker Magna International Inc.
An update on Chrysler’s future is expected at the DaimlerChrysler annual meeting, set for April 4 in Germany.
Few politicians scare Detroit automakers more than Al Gore, but today he handed them an olive branch -– sort of.
Fresh from winning an Oscar for his global warming film, An Inconvenient Truth, Gore testified before the Democratic-controlled House today that he supports higher fuel economy standards but automakers alone shouldn't be expected to solve global warming.
“Don't single out cars and trucks," Gore said. They represent "only a slice of the problem" and not the biggest slice.
Still, the auto industry is unlikely to break out singing “What a friend we have in Al Gore” any time soon.
Federal prosecutors are preparing criminal charges against former budget director David A. Stockman for incomplete disclosures and improper accounting practices he allegedly endorsed while at the helm of Michigan automotive supplier, Collins & Aikman Corp., according to today's Washington Post.
Citing unnamed government sources, the paper reports indictments could come as early as Monday, and the Security and Exchange Commission is also investigating.
Stockman, now 60, was CEO of the auto interiors supplier from 2002 until it filed Chapter 11 bankruptcy protection in 2005. Hundreds of millions of dollars have been spent to try to keep Collins & Aikman afloat since it supplies parts to nearly every automaker. The company now is being sold in pieces in bankruptcy court. Meantime, the company, its board and former executives are being sued by bondholders and shareholders.
Executives of Detroit auto companies have complained –-
appropriately so –- that they have not received the attention of the White House that they deserve.
Indeed, President Bush has made time to meet with the winners of the American Idol television show and award-winning athletes but has held only one brief meeting with auto company executives.
But yesterday Bush paid a personal visit to General Motors and Ford plants in the Midwest. His message to executives and plant workers: ethanol, hybrids and fuel cell vehicles will aid national security by reducing the nation’s dependence on foreign oil.
Auto companies and medial emergency services have long envisioned a day when every motor vehicle would be equipped with devices that could immediately and automatically alert medical services of an accident so that injured victims could receive quick responses and appropriate care.
To that end, the Centers for Disease Control and Prevention (CDC) and the CDC Foundation with General Motors announced a partnership today whereby crash data from GM vehicles equipped with GM's OnStar communications system will be studied. From those studies, procedures to help emergency medical responders better and more quickly determine if a motorist needs care at a trauma center after a vehicle crash will be developed.
The Chevrolet Cobalt has the healthiest interior air space of any mainstream vehicle offered in the U.S., according to the Ecology Center
, an Ann Arbor, Mich., environmental group that tested the interiors of more than 200 new vehicles for toxic chemicals.
But, the center, which ranks the automobiles on a scale from 0 to 5, from lowest to highest, warns the industry’s commitment to reducing toxic chemicals inside cars is inconsistent.
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.
The Wal-Mart situation involving former Chrysler marketing executive Julie Roehm, dismissed from the giant retailer, gets more sordid by the minute. It makes the controversy surrounding her at Chrysler look tame by comparison.
In court documents filed Monday, Wal-Mart accused Roehm and another top marketing executive (who was fired from the retailer) with having an affair while they were selecting new advertising agencies and seeking jobs from the agency they ultimately recommended to represent Wal-Mart, according to The New York Times.
We thought of former Chrysler President Jim Holden last fall as Chrysler struggled with many of the same problems he encountered and for which he ultimately got the boot. We wondered where and when he would reemerge, and now he has.
Holden was named non-executive chairman of Meridian Automotive Systems, Inc., the Michigan-based auto supplier announced Monday.
Holden was ousted as Chrysler CEO in November 2000 after barely a year on the job. He was blamed, amidst the turmoil of merging Daimler-Benz and Chrysler, for Chrysler’s slow sales and bloated inventories. Dieter Zetsche, now DaimlerChrysler CEO, replaced Holden.
Slow sales and bulging inventories recurred last fall, prompting speculation that current Chrysler CEO Tom LaSorda would be fired as well. Instead, Chrysler’s woes prompted DaimlerChrysler to put Chrysler on the auction block.
The National Highway Traffic Safety Administration (NHTSA) has released its frontal-impact crash test ratings for the 2007 Toyota Tundra and 2007 Chevrolet Silverado full-size pickup trucks.
The score is Chevrolet Silverado -- five stars; Toyota Tundra -- four stars.
NHTSA tested the Regular and Double Cab versions of the Tundra; both achieved four stars.
NHTSA tested Regular and Extended Cab versions of the Silverado. It scored five out of five stars. (It can be assumed that the virtually identical GMC Sierra also rates five stars.)
The Silverado matches the same five-star scores previously earned by the current Ford F-150 and Dodge Ram 1500 pickups for driver and front-passenger safety in a frontal impact.
Toyota has boasted the Tundra goes head-to-head with Big Three pickups on payload and towing capacities as well as safety. It had expected five-star scores.
Four out of five stars represents an 11% to 20% chance of serious injury. A five-star rating indicates serious injury is reduced to 10% or less in a frontal crash.
General Motors’ Saturn division announced today that, with the tax rebate, its midsize hybrid sedan is the lowest-priced hybrid on the market.
Saturn announced today that the Saturn Aura Green Line has a $1,300 tax rebate. Its Manufacturer’s Suggested Retail Price, including delivery fees, is $22,695, which makes it $195 less than the Toyota Prius. The Toyota Prius lists at $22,795. The current tax rebate is $1,575, which drops to a projected $788 in April.
The Honda Civic hybrid has a list price of $23,195; it has a $2,200 tax rebate, expected to remain the same after this month.
GM began shipping Saturn Aura Green Line models last week for arrival in dealerships in the coming days. The Saturn Aura won the 2007 North American Car of the Year award.
Edmunds.com's analysis shows there's never been a better time to buy a hybrid because of lower prices and incentives.
The full-size pickup truck war ratcheted up yet another
notch this week with General Motors putting incentives on its newly introduced Chevrolet Silverado and GMC Sierra.
The GM truck incentives come on the heels of Toyota dealers putting spiffs on the Tundra, Ford launching a new ad campaign for the F-150 starring Dirty Jobs Mike Rowe, and Dodge increasing its advertising on the Dodge Ram.
GM is offering $1,000 cash bonus and zero-interest financing up to 36 months on all of its trucks. Previously, GM was offering $1,000 in trade assistance and financing of 4.9 to 7.9 percent depending on the term length.
General Motors, long known as being run by reliable bean counters, has confessed the processes and people it relies upon to report financial performance are inadequate.
In the automakers annual filing with the Securities and Exchange Commission, the company said its internal controls for financial reporting are ineffective; the automaker disclosed it was the subject of SEC accounting probes. GM had to postpone announcing its 2006 financials because it was reviewing and ultimately restating the last six years of results.
Not surprising, GM’s SEC filing said the automaker needs further concessions from the UAW. The UAW’s national contract with GM, Ford and Chrysler expires in September.
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.
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.
Wolfgang Bernhard, who helped turn around Chrysler five years ago, has signed an advisory contract with private equity firm, Cerberus Capital Management, in a possible Chrysler purchase, the Financial Times is reporting.
It appears as if private equity firms Blackstone Group, Centerbridge Partners LP and Cerberus have the edge in the purchase of the Chrysler Group. Financial Times speculates the addition of Bernhard to the team strengthens its hand.
Bernhard was chief operating officer at Chrysler when DaimlerChrysler CEO Dieter Zetsche was Chrysler CEO. Bernhard went to Volkswagen, from which he recently resigned.
On the eve of Congressional testimony on higher fuel-economy standards tomorrow, automakers kicked off National Alternative Fuel Autos Week by announcing that 10.5 million alternative fuel autos are on the nation’s roads, according to 2006 sales data from R.L. Polk and Co.
The Polk sales figures show an unprecedented 1.5 million alternative fuel autos were sold in 2006, surpassing automakers’ sales expectations by 50 percent. Currently manufacturers offer 60 models of alternative fuel automobiles for sale. They include hybrid electric, ethanol-capable E-85, and clean diesel, up from just 12 models for sale in 2000.
Top auto executives from General Motors, Ford, DaimlerChrysler and Toyota go to Washington, D.C. tomorrow to testify on proposed higher fuel-economy standards.
GM CEO Rick Wagoner, Ford CEO Alan Mulally, Chrysler CEO Tom LaSorda and Toyota Motor Sales President Jim Press are scheduled to appear before the House Energy and Commerce subcommittee on energy and air quality.
A number of proposals to address global warming through increased fuel-economy standards and stricter emissions regulations are on the table. Predictably, the automakers will argue tomorrow that any of them will cost their industry billions of dollars.
DaimlerChrysler CEO Dieter Zetsche provided a glimpse of what went on
behind the scenes leading up to the Feb. 14 announcement that the German automaker is “exploring all options” in regard to Chrysler Group, including its possible sale.
Zetsche told a small group of reporters at a briefing at the Geneva Motor Show that he could not and would not comment on specific speculation and rumors regarding the possible sale of Chrysler and potential suitors, but he did confirm the following:
DaimlerChrysler and General Motors had explored how they could collaborate about nine months ago -– at GM’s instigation;
The United Auto Workers (UAW) union’s refusal to provide Chrysler with the same concessions in health care that it gave to GM and Ford played a key role in DaimlerChrysler deciding to “exploring all options,†including Chrysler’s sale;
DaimlerChrysler has spent the past 14 months considering the best option for the automaker as a whole and its individual components. Not only was the sale of Chrysler Group on the table, so was consideration of the sale of other divisions, specifically the truck group.
GENEVA, Switzerland -- Picture General Motors’ Opel GTC concept car with a Saturn badge, and you’ll see a future Saturn midsize car.
On the eve of the first press day of the Geneva Motor Show, General Motors’ European subsidiary, Opel, unveiled its GTC concept car that strongly hints at the next-generation Vectra and, according to GM’s European head of design, Bryan Nesbitt, speaks a new design language for Opel in the future.
Ditto for Saturn since Saturn and Opel are closely aligned.
Former Attorney General John Ashcroft approached XM Satellite Radio Holdings Inc., offering his consulting services. When XM declined his offer, Ashcroft was hired by the National Association of Broadcasters to fiercely oppose an XM merger with competitor Sirius Satellite Radio Inc., according to The Wall Street Journal Sunday.
The paper reported Ashcroft approached XM in the days after the merger to offer his consulting services. XM declined. He was then hired by the broadcasters association. Last week, Ashcroft sent a letter to his successor, Attorney General Alberto Gonzales, blasting the proposed merger, citing negative impact on competition.
Mary Ann Wright, who headed the team that launched the Ford Escape Hybrid, has joined auto supplier Johnson Controls as CEO of Johnson Controls-Saft Advanced Power Solutions LLC, a joint venture between Johnson Controls and French battery maker Saft Groupe SA.
Luring Wright to Johnson Controls, headquartered in Milwaukee but with major operations in Detroit, is a coup. She’s the real deal, according to everyone who worked with her inside Ford.
In her new job, Wright will be responsible for accelerating the growth and executing the launch of hybrid, plug-in hybrid and electric vehicle battery programs with emphasis on state-of-the-art technology, manufacturing and electronics integration, her new employer said in a statement. In addition to leading the joint venture, Wright will also have the role of vice president and general manager, Johnson Control's hybrid systems.
Edmunds.com estimates show the average automotive manufacturer incentive in the U.S. was $2,253 per vehicle sold in February 2007, down $33, or 1 percent, from January 2007, and down $95, or 4 percent, from February 2006.
"The industry’s incentives spend is relatively flat this month," stated Jesse Toprak, executive director of industry analysis for Edmunds.com. “Most automakers are following a strategy of steadily decreasing their overall incentives spending, but others are increasing their offers to get the competitive edge at the point of sale."
Navistar International Corp. will stop supplying diesel engines to Ford for its all-important F-Series Super Duty pickup trucks, just now hitting showrooms; and the automaker confirms its February sales will show a double-digit drop when reported later this week.
As expected, DaimlerChrysler’s supervisory board gave the green light to its Chrysler Group, allowing it to move forward with a plan to develop and build small vehicles with China’s Chery Motor. That means Chrysler could become the first automaker to distribute Chinese-built vehicles in the United States.
Under the approved framework of an agreement –- one that excludes an equity partnership -- Chrysler brands would be able to distribute Chery-built vehicles primarily in North America and Western Europe.
Chrysler said the partnership with Chery would allow it to develop much needed small vehicles more quickly and with less money.
The Wall Street Journal and The Nikkei, a Japanese business newspaper, report today that Toyota, hungry for additional North American
manufacturing capacity, picked Tupelo, Miss., as the site for its eighth assembly plant. Mississippi’s governor is expected to make the announcement today.
The Wall Street Journal further reported Toyota’s top management has adjusted its plans for the plant, which has been in the works for some time, because of growing concern about the health of the U.S. auto market. The plant has been scaled back in terms of capacity to 150,000 units a year, down from 200,000, and start of production is pushed back from 2009 to 2010. It is expected to produce the next-generation Toyota Highlander crossover, the latest version of which was unveiled at the recent Chicago auto show (pictured).
Toyota also is trying to better balance its imports versus domestically produced vehicles. Two-thirds of Toyota’s sales had been North American built but imports rose to 54 percent last year. Toyota and the Japanese government constantly fret about political repercussions from too many imports and Toyota’s continued success at the expense of U.S. automakers.
Mississippi -- and the birthplace of rock 'n roller Elvis Presley -- apparently beat sites in Tennessee and Arkansas.
Everyone knows China’s automobile industry is booming. The China Association of Automobile Manufacturers confirmed that in today’s report that showed China’s auto industry made a profit equivalent to $10 billion (U.S.) in 2006, up 46 percent from the previous year.
In contrast, Ford Motor Co. alone lost more than that; it lost $12.7 billion last year, Chrysler lost $1.4 billion and GM has yet to report earnings but lost $10.6 billion in 2005.
China car sales totaled 7.22 million vehicles in 2006, up 25 percent. Higher sales resulted in China overtaking Japan as the world’s second largest auto market. Sales should surpass 8 million this year, and analysts predict it will be the world’s largest market in another decade.
But buried in the CAAM’s glowing report China’s auto industry is the fact that the good fortunes don’t trickle down to car dealers, with 40 percent losing money. China has 1,800 franchised auto dealers, of which 700 are unprofitable and of those 300 have been merged or edged out of the market. Another 20 percent are on the brink of red ink. The reason: fierce competition.
Not only is vehicle distribution ripe for consolidation, so too are auto companies. China has 1,500 registered auto producers. Of which fewer than 100 sold more than 10,000 vehicles. Many small, manufacturers sold only 300 to 500 cars, not enough to make a valid business case in any country.
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.
Chrysler today unveiled a plan to return it to profitability by 2008 while it also explores "further strategic options with partners."
The plan cuts 13,000 jobs through 2009 -- more than had been speculated and representing 16 percent of its workforce.
The plan also reduces Chrysler's production capacity by about 400,000 units -- the equivalent of two assembly plants but those reductions will be spread across a number of plants, only one of which will be completely closed.
As expected, the Newark, Del., assembly plant, which makes the full-size Dodge Durango SUV, will see production reduced this year and closed by 2009. Production will be cut this year at the Warren, Michigan, truck plant. Production will also be cut at the St., Louis, Missouri, assembly plant, which also makes trucks, in 2008.
Chrysler will invest $3 billion in new engines, transmissions and axles to support the introduction of more than 20 compeltely new models and 13 freshened vehicles between this year and 2009.
At the same time, Chrysler will shop for other partnerships beyond what it has announced. Already revealed is a partnership with Volkswagen to build a minivan in North America for VW here; its small-car development project with China's Chery; engine projects with Hyundai and Mitsubishi; and hybrid development with with General Motors and BMW in the U.S.
Acknowledging Chrysler will lose money again in 2007 as it did in 2006 (a reported $1.9 billion operating loss), Chrysler hopes the plan will return it to profitability by 2008 and result in $4.5 billion in financial improvements for a return on sales of 2.5 percent by 2009.
DaimlerChrysler is open to anything, including "far-reaching strategic partnerships." The German automaker, under increasing pressure mostly in Germany to sell Chrysler Group, didn't seem to rule out the possibility.
After reporting a significant operating loss for its Chrysler Group, DaimlerChrysler says all options are on the table, including "far-reaching strategic partnerships." Rumored have been an alliance with Nissan-Renault or a Chinese automaker.
The German automaker's official stand is: "No option is being excluded in the interest of arriving at the best possible solution for the Chrysler Group and DaimlerChrysler as a whole."
It was somewhat worse than expected: Chrysler Group reported an operating loss the equivalent of $1.4 billion (U.S.) in 2006, compared with an operating profit in 2005. DaimlerChrysler blamed Chrysler's loss on having the wrong product at the wrong time, intense price competition and cutbacks in production.
Despite Chrysler's loss, the parent company earned higher operating profits from the previous year, thanks to higher sales and profits form all of its other divisions including Mercedes-Benz, the truck group and financial services.
Apparently consumers have not forgotten last year’s skyrocketing gasoline prices.
Fuel economy ranked No. 1 among Michigan consumers in a survey conducted in late January by the Detroit Free Press and Local 4, the NBC affiliate.
Forty-three percent of respondents – male, female and in all age categories – ranked fuel economy as No. 1 on their shopping list. They expressed concerns ranging from the environment to U.S. dependency on foreign oil.
General Motors has delayed the release of financial statements for the full year and fourth quarter of 2006 -- again. GM was supposed to release results on Jan. 30, but it announced on Jan. 25 a delay, because it was restating results for four years due to an accounting error dating back to the end of 2001. In a statement on its Web site today, GM says work is continuing on its financial statements. No date was given for when 2006 results would be released.
The Detroit media has dubbed Feb. 14 as the St. Valentine’s Day Massacre at Chrysler Group.
Word is Chrysler will announce its restructuring plan on that day. The plan may cut as many as 10,000 jobs and close three plants. The announcement comes at DaimlerChrysler’s annual press briefing, typically held in its corporate home of Stuttgart, Germany, but hosted by Chrysler headquarters in Detroit this year.
DaimlerChrysler has been working on a restructuring plan for the Chrysler since October when Chrysler announced an operating loss of $1.5 billion.
No word on if Chrysler Chairman and CEO Tom LaSorda, who publicly admitted he moved too slowly in cutting production in line with slower sales, will be out of a job. Now is it clear if DaimlerChrysler, as rumored, is seriously considering a sell-off of its American arm.
Water cooler banter today likely will be as much about Super Bowl advertisements as the game itself – what worked and what didn’t. The results will be unscientific, but researchers are now trying to apply brain science to definitively determine what ads are most likely to generate sales.
At UCLA, researchers put special glasses on subjects to view Sunday’s Super Bowl ads and slid them into Magnetic Resonance Imaging (MRI) machines. The researchers charted their subjects’ brain waves and showed what areas of the brain, if any, lit up during the ads.
The computer-generated Coke ads ranked highest, according to results revealed on NBC’s Today Show. The consumer-generated ad for Fritos, developed for free by a bunch of twenty-somethings, scored well also. (No specific mention of the student-generated Chevrolet ad featuring the bare-chested guys going ga-ga over the car.) The Snickers’ commercial showing two male mechanics sharing a candy bar, concluding in kiss, made subjects anxious. Honda’s ad rated dead last, producing a graph that looked as if the patient flatlined.
Trade journal Automotive News recently ran an article on neurological marketing done by Sands Research of El Paso, Texas. The firm’s founder, Steve Sands, is a brain researcher who developed ways to measure brain-wave responses to TV spots. He has worked for Coors and Burger King and pursuing automotive business.
Subjects don what looks like a swim cap with holes through which electrodes were attached to the skull to monitor brain-wave responses to a variety of automobile ads. Sands found the controversial Volkswagen crash commercials stimulate senses but perhaps not in a good way. Chrysler’s Dr. Z ads, dumped due to their ineffectiveness, flatlined like the Honda Super Bowl ads.
With billions of dollars at stake, automotive advertisers, who readily admit half of their advertising doesn’t work but they don’t know which half, may well try anything to get the most from their dollar. However, the water cooler talk is likely to show the same results as the elaborate medical research – and it’s free.
High pay and rich benefits have long been a bargaining chip for the United Auto Workers to lure new members. But non-unionized assembly plants owned by foreign automakers are chipping away at that chip.
The Detroit Free Press reports that the UAW is losing its edge in pay. For the first time, according to the Center for Automotive Research in Ann Arbor, Mich., and the newspaper’s numbers, a non-union, foreign-owned plant – Toyota’s largest U.S. plant in Georgetown, Ky. – paid bonuses that pushed the average hourly pay above that of the average hourly UAW workers. Workers at the Toyota plant received bonuses of $6,000 to $8,000, putting the average hourly pay to $30 an hour. The average for UAW workers is $27 an hour. Most did not receive profit-sharing checks last year, and most saw cutbacks in overtime as automakers scalped back production in line with lower sales.
While the automakers won’t confirm pay rates, it is believed wages at Toyota’s other plants as well as at Honda and Nissan plants in the U.S. are comparable to those at Toyota’s Kentucky plant. Less clear are the value and costs of benefits such as pensions and health care as part of the total compensation package.
Still, Detroit automakers have been negotiating with the UAW – successfully in some cases – to change benefits as well. And so-called legacy costs – health care and pensions – will be the center piece of this year’s UAW contract talks between GM, Ford and Chrysler. The current national contract expires in September.
The nation's lowest gas prices can be found in Detroit, which is typically in the middle of the pack. In Detroit, the average price of regular unleaded gasoline was $1.897; it was $1.95 statewide Sunday, according to AAA Michigan, as reported in the Detroit News.
AAA Michigan reports statewide regular gas is $1.90 a gallon, midgrade $2.01, premium $2.09 and diesel $2.46.
Nationwide, retail gas prices for regular unleaded dropped nearly 14 cents over the past two weeks to $2.18 a gallon. An unseasonably warm winter combined with no supply interruptions has left crude oil prices hovering around $51 a barrel, a drop of more than $25 since August, according to AAA.
Industry experts said the prices should remain low for weeks, barring supply disruptions, but a rise is likely by summer.
Question is how long are consumers' memories? Will consumers believe cheap gas will last and shift their buying habits back toward vehicles with lower fuel economy, like SUVS? And will automakers, especially those in Detroit, believe cheap gas is here to stay and slack off in boosting fuel economy and future powertrain technologies? Let's hope not.
GM's Rick Wagoner insisted in a speech to the Automotive News World Congress here that Washington not to slack off in developing alternative energy sources.
“With the price of oil at its lowest level in 19 months, we run the risk of reverting back to our traditional energy policy," Wagoner said, referring to U.S. dependence on cheap foreign oil. "I hope oil prices stay low, but I also hope that our nation stays committed to energy security through energy diversity."
Construction of the Blue Springs plant, started in 2007 but suspended in 2008 when the economy soured, recently was restarted in order to build the Corolla compact car starting next year. 
Taking over to lead GM is Daniel F. Akerson, currently a member of the GM board of directors and managing director and head of global buyout at the Carlyle Group. Akerson has been a member of the GM board since July, 2009, when asked to take the position by the Obama administration's Automotive Task Force that helped to oversee GM's restructuring and bankruptcy proceedings.
The findings, reached in the initial phase of a study conducted by the National Highway Traffic Safety Administration, showed that in 58 accidents attributed to unintended acceleration, in more than half, 35, the brakes were not applied. 
Jerry Flint, a journalist who covered Detroit and its auto industry for 52 years for 
By Bill Visnic
At the Center for Automotive Research Management Briefing Seminars in Traverse City, Mich., today, several panelists in a session titled "Full-scale Deployment: Making the Business Case," reiterated what is becoming the new conventional thinking about infrastructure: don't really need it.
At the Center for Automotive Research Management Briefing Seminars in Michigan, Justin Ward, Toyota Motor Engineering and Manufacturing North America Inc.'s advanced powertrain program manager said Toyota's first plug-in hybrid - just now starting with a 150-vehicle test fleet in the U.S. - will deliver significant fuel economy gains over the 51 miles per gallon rating of today's non-plug-in Prius. 
According to data released today by Edmunds.com, parent of AutoObserver, a remarkable 71 percent of all Toyotas sold last month were financed through a 0-percent loans. Battling the tide of negative publicity surrounding a string of recalls related to unintended acceleration, Toyota in March took the uncommon step of offering 0-percent loans for as much as 60 months on even its most popular models - including, at least in some markets, the Prius hybrid-electric vehicle.
Anyone familiar with any kind of retailing has heard that platitude, but General Motors Co. dealers will be the latest to find out if it works. 
The company 
The United Auto Workers Union (UAW), under pressure to make concessions to General Motors Corp. as the company approaches a June 1 restructuring deadline, said today it will propose to its rank-and-file members key givebacks to help GM's long-term future, according to a report in the 
DETROIT -- General Motors CEO Fritz Henderson, calling this a "defining moment" for the automaker, laid out his "go faster, go deeper" restructuring plan that includes more cuts in jobs, plants, dealers and products, including elimination of the Pontiac brand. 
General Motors and Cerberus Capital Management continue to talk about a GM-Chrysler merger with some significant issues remaining on the table, sources tell 
AUBURN HILLS, Mich. -- Chrysler unveiled a trio of all-electric and extended-range electric cars Tuesday and announced it would eventually offer some type of electric version of every model in its line.
Detailed 
