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Automotive News Table of Contents

For the Week of May 5, 2008




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Dodge dealers battle to bust Ram logjam

Click on the Web sites of several auto dealers in central California and you'll find Dodge Ram pickups offered at $13,000 below sticker. With four months to go before a redesigned 2009 Ram arrives in showrooms, inventories and incentives are sky... [SUB] 12:01 am U.S. ET | May 5

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INDUSTRY IN DISTRESS

After an awful April, nearly every industry forecaster now agrees: U.S. sales will plummet by about 1 million units in 2008 -- the first time sales have tumbled that much in one year since 1991. But it's not just the million units that... [SUB] 12:01 am U.S. ET | May 5

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Used-car price slump slams luxury makes

Used-vehicle prices are slumping in the United States, just as cars and trucks coming off lease are crowding the upscale pre-owned market. That's bad news for several luxury import brands and their captive finance companies, which rely heavily... [SUB] 12:01 am U.S. ET | May 5

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Dealers take Tundra to the people

Drive through Raleigh, N.C., and you're likely to spot a Toyota Tundra on the streets with no doors. It's a true head-turner, the kind of offbeat promotion that lots of Toyota dealers must do to get traction in the collapsing market for... [SUB] 12:01 am U.S. ET | May 5

Ford plans more UAW buyouts at 2 plants

Ford Motor Co. will offer more buyouts to hourly workers at assembly plants in Chicago and Louisville, Ky. Mark Fields, Ford president of the Americas, confirmed in an interview Friday with Automotive News that those two plants will be part... [SUB] 12:01 am U.S. ET | May 5

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Nader and the Corvair: GM edition tells whole story

General Motors would be just as happy if it had never heard the name Ralph Nader. Unless you were on the scene 40 years ago, you wouldn't believe the trouble that that painfully smart young attorney caused the General. 12:01 am U.S. ET | May 5

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Top auto execs to talk marketing at seminar

Top marketing executives at General Motors, Toyota, Ford, Chrysler, Honda and Hyundai will discuss their companies' changing media choices at this year's Automotive News Marketing Seminar, May 28 in Los Angeles. 12:01 am U.S. ET | May 5

UAW official expects American Axle buyouts

The outgoing president of a key UAW local at American Axle & Manufacturing Holdings Inc. said Friday that he expects at least half of the 3,650 striking workers at the axle maker to take a buyout when a contract is completed. Adrian King, president... [SUB] 12:01 am U.S. ET | May 5

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Diesel dynamo

A former Ford Motor Co. engineer is playing a key role in an Indian automaker's bid to sell pickups and SUVs in the United States next year. Arun Jaura, 42, a powertrain specialist, is in charge of getting clean-burning four-cylinder diesel... [SUB] 12:01 am U.S. ET | May 5

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Honda to some dealers: Upgrade or else

Some Honda dealers are fuming over letters they have received from the automaker telling them to upgrade their stores or risk losing their franchises. The letters, sent in late March, tell dealers they have until May 31 to lay out their plans to... [SUB] 12:01 am U.S. ET | May 5

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Hyundai: Powertrains will take us halfway to mpg target

Hyundai's plan to boost U.S. vehicle fuel economy significantly in the next decade is a 50-50 strategy. About 50 percent of the increase will come from changes to vehicle structure and equipment -- efforts such as lighter vehicles and... [SUB] 12:01 am U.S. ET | May 5

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Daimler cuts Chrysler value, again

Daimler AG still owns 19.9 percent of Chrysler LLC, but the German carmaker has slashed the book value of its stake by nearly two-thirds to reflect ongoing losses at its former U.S. unit. [SUB] 12:01 am U.S. ET | May 5

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Ford domestic dealer count dips below 4,000

Ford Motor Co.'s U.S. dealership count has dropped beneath 4,000 stores for the first time in decades. During the first four months of 2008, several dozen of Ford's domestic brand stores closed to put the automaker below that mark, said Mark... [SUB] 12:01 am U.S. ET | May 5

RUNNING THE NUMBERS

Seems like old times: More cash on the hood

Cash rebates rose in April, near the levels of 2005 -- when automakers said they were getting serious about “value pricing” and cutting incentives. [SUB] 12:01 am U.S. ET | May 5

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Suzuki to offer standard navigation in $16,000 car

Suzuki says it will soon offer the least expensive vehicle on the market with a navigation system that comes as standard equipment. Navigation will be standard on the 2009 SX4 sedan and hatchback, which go on sale in late summer at an estimated base... [SUB] 12:01 am U.S. ET | May 5

Toyota sister car poses a challenge for Subaru

A sporty car due in 2011 will challenge Subaru's carefully crafted image as an independent, somewhat contrarian developer of all-wheel-drive vehicles. The car is being co-developed by Subaru and Toyota in Japan. Toyota will market its own... [SUB] 12:01 am U.S. ET | May 5

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Henderson: GM will keep tight rein on inventory

General Motors intends to run a tight ship in North America, its largest market. The automaker is “absolutely committed” to aligning its production with demand and controlling costs, says COO Fritz Henderson. [SUB] 12:01 am U.S. ET | May 5

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Kerkorian interest buoys Ford stock

Kirk Kerkorian's investment kept Ford Motor Co. stock trading last week near its highest levels in almost six months. The stock reached $8.68 on Friday morning before closing at $8.27 . That was one day after Kerkorian representative Jerry York... [SUB] 12:01 am U.S. ET | May 5

Mpg plan fuels states-rights battle

Just when it seemed like the political war over state regulation of greenhouse gases from vehicles could not intensify, it did. The Bush administration's proposed fuel economy rules for the 2011-15 model years include an assertion that the new... [SUB] 12:01 am U.S. ET | May 5

COMMENTARY: LETTER TO THE EDITOR

'Have you lost your mind?'

Have you lost your mind? More federal oversight for the auto industry? Get real! [SUB] 12:01 am U.S. ET | May 5

COMMENTARY: LETTER TO THE EDITOR

Dealers are victims of Axle strike

Just a note to express my total frustration with General Motors and the whole American Axle mess. The managers at the top of GM and American Axle have lost touch with their customers -- who are the dealers, not the public. [SUB] 12:01 am U.S. ET | May 5

COMMENTARY: LETTER TO THE EDITOR

Federal oversight? Good heavens, no

Please say it's not so. Did you really say service contracts need federal oversight ("Service contracts: Federal oversight is needed," Opinion, April 21)? [SUB] 12:01 am U.S. ET | May 5

EDITORIAL

Ford Motor must stay focused on recovery

Even though the turnaround at Ford Motor Co. has a long way to go, it's encouraging that investor Kirk Kerkorian and his Tracinda Corp. see value in the automaker. But as the financial drama unfolds, it is crucial that Ford Motor stay focused... [SUB] 12:01 am U.S. ET | May 5

COMMENTARY: LETTER TO THE EDITOR

Geoff Polites: A salute

The motor industry in Australia owes a big debt to the late Geoff Polites ("Geoff Polites: A passion for cars and for life," April 28). He turned Ford in Australia around, and he was the only person who could have done it. [SUB] 12:01 am U.S. ET | May 5

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COMMENTARY: KEITH CRAIN

Is it real, or is it just temporary?

By Memorial Day, we will probably be paying about $4 for a gallon of regular gasoline. Don't even think about how much we'll be paying for premium. The high cost of crude is going to hit us in a thousand big and small ways Keith Crain is... [SUB] 12:01 am U.S. ET | May 5

EDITORIAL

No gas tax holiday

Talk about a mixed message: Newly proposed rules by the Bush administration call for an aggressive effort to increase the fuel economy of cars and light trucks. But in the political silly season, presidential candidates John McCain and Hillary... [SUB] 12:01 am U.S. ET | May 5

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COMMENTARY: LETTER TO THE EDITOR

A car for everyone or cut, cut, cut, cut?

All those so-called auto analysts call for General Motors to reduce its lineup and consolidate products, and then they lament the loss of models and variety of product. Which is it they want: something for everyone or cut, cut, cut and cut? [SUB] 12:01 am U.S. ET | May 5

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COMMENTARY: EDWARD LAPHAM

Save a board seat for the UAW

Now that annual meeting season is just about here, shareholders, investors and corporate managers ought to consider a game-changing idea: It's time to give the UAW a board seat at publicly traded automakers and suppliers Edward Lapham is the... [SUB] 12:01 am U.S. ET | May 5

COMMENTARY: LETTER TO THE EDITOR

Think of Buick as part of B-P-G

In defense of the General, I think that Buick-Pontiac-GMC can and will become a great franchise in the marketplace. The media must stop looking at Buick as a single entity and, above all, stop associating Buick's numbers with the demise of... [SUB] 12:01 am U.S. ET | May 5

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Costs up in China, but bargains still abound

Costs are rising for parts producers in China. A new labor law boosts employee costs by up to 30 percent. Raw materials are becoming more expensive. The weakening U.S. dollar buys fewer goods. Companies also must spend time and money bringing... [SUB] 12:01 am U.S. ET | May 5

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Hyundai reworks Sonata sooner rather than later

Hyundai aims to take a bigger share of the mid-sized car market with a freshened 2009 Sonata that delivers more power and better fuel economy from improved four- and six-cylinder engines. In addition, the interior of the Sonata has been given a... [SUB] 12:01 am U.S. ET | May 5

Mexico sales fall 17% in March

Sales of new cars and light trucks in Mexico fell to 80,120 in March, down 16.9 percent from March 2007. Through the first quarter, retail sales totaled 263,942, down 5.8 percent from the year-earlier period, according to the Mexican Automotive... [SUB] 12:01 am U.S. ET | May 5

Dana seeks new business with Japanese companies

Armed with a new CEO from Toyota, driveline supplier Dana Holding Corp. aims to expand its business with Japanese carmakers, particularly in emerging markets. [SUB] 12:01 am U.S. ET | May 5

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PERSON TO PERSON

Nissan's Dominique gets to the big dance

Like many native Detroiters, Larry Dominique has the auto business in his blood. His father and grandfather worked in the industry. Dominique joined General Motors as an electrical engineer and later worked for Chrysler Corp. before joining Nissan... [SUB] 12:01 am U.S. ET | May 5

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PICTURE THIS

A Lexus colossus

Craig Zinn Automotive Group recently broke ground on what it says will be the world's largest Lexus dealership. Zinn officials declined to give the projected cost of the North Miami, Fla., store. [SUB] 12:01 am U.S. ET | May 5

Certified Tool closes a plant

Certified Tool and Manufacturing Corp. will close its plant in Elk Grove Village, Ill., and consolidate operations at a factory in Frankfort, Ky. When the move is completed, the Frankfort factory will house stamping presses, multislide machines and... [SUB] 12:01 am U.S. ET | May 5

Dealers

Dealerships in this report: Rizza Chevrolet in Bridgeview, Ill.; Speney Chevrolet in West Newton, Pa.; Pauly Toyota-Scion in Crystal Lake, Ill.; M&S Chevrolet-Pontiac-Buick-Cadillac in Pawling, N.Y.; Kari Toyota in Superior, Wis.; and South... [SUB] 12:01 am U.S. ET | May 5

German engineering company plans Ala. factory

German precision engineering company Selzer Fertigungstechnik & Co. plans to build a $22 million plant in Auburn, Ala., to make components for German transmission supplier and Chrysler LLC partner Getrag AG. [SUB] 12:01 am U.S. ET | May 5

ZF will supply Nissan

ZF Group North American Operations will provide six-speed automatic transmissions to Nissan Motor Co. for the automaker's U.S. light-commercial vehicle line. [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Used-vehicle leasing boosts showroom traffic

As many as one of every five used cars and trucks that dealer John Klein has sold in recent years has been a lease deal. That's unusual on several counts. Leasing tends to flourish at luxury dealerships in metropolitan areas along the East and... [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Certified buyers opt for extended service contracts

Dealers, automakers and vendors are finding a growing market for extended service contracts: buyers of certified used cars and trucks. “Wraparound” service contracts augment factory-backed warranties of certified vehicles. They cover... [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Repossessed vehicles offer dealers a profit opening

Vehicle repossessions are rising, and the trend could present new profit opportunities for dealers. Mike Farley, owner of Keystone Chevrolet in Sand Springs, Okla., sells about 300 used cars a month. He says his biggest profit margins come from cars... [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Prepaid plans spark service visits beyond oil changes

Selling customers prepaid maintenance plans can generate service business, some retailers say. The plans, available from many automakers as well as from insurance providers, generally cover such things as oil changes, tire rotations, items that wear... [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Key to managing floorplan costs: Be realistic

Managing inventory and floorplan expenses in a downturn is a core dealership skill, since now more than ever no one wants to get caught with unsold cars racking up interest charges. “Anybody in the new-car business is going to tell you... [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Dealers hunt upside-down buyers with leases, incentives and long-term loans

With more than a quarter of their customers upside down on loans, auto dealers and manufacturers are turning to leasing, lucrative incentives and longer terms to sell vehicles. [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Long-term loans: Convenience or bad deal?

As lenders and automakers offer longer loan terms to attract buyers with negative equity in their current vehicles, many in the industry say consumers should beware. [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Where have all the investors gone?

Dealers are working harder than ever to get subprime customers financed. Not only do economic hardships make it more difficult for consumers to qualify for financing, but subprime auto lenders find it harder to borrow money to make new loans. [SUB] 12:01 am U.S. ET | May 5

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INSIGHT: FINANCE & INSURANCE

Dealer rebounds from contract mess

When Automotive Professionals Inc. filed for bankruptcy in April 2007, the vendor stopped paying claims on the 250,000 vehicle service contracts it had sold. Customers of Texas dealer Ramsay Gillman owned more than 15,000 of them. Because the... [SUB] 12:01 am U.S. ET | May 5

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AutoTrader.com makes big pitch to bump up new-vehicle sales

A new advertising campaign by AutoTrader.com emphasizes new-vehicle sales at the automotive Web site. AutoTrader is devoting a “significant portion” of its $100 million annual marketing budget to the campaign, said CEO Chip Perry. The... [SUB] 12:01 am U.S. ET | May 5

Dealers must choose: Reynolds, GM -- or start over

Reynolds and Reynolds Co. won't let 400 of its General Motors dealership customers go without a fight. But the incentives that the company is offering them to remain with Reynolds are not as liberal as the terms dealers now have with GM under... [SUB] 12:01 am U.S. ET | May 5

Chrysler hangs onto its profitable GEM

With gasoline prices soaring and no relief in sight, Chrysler's Global Electric Motorcars could come in handy as appetites grow for alternative-power vehicles. GEM, a wholly owned Chrysler subsidiary in Fargo, N.D., makes low-speed neighborhood... [SUB] 12:01 am U.S. ET | May 5

CAW, Ford reach extensive early labor deal

Ford Motor Co. is five months ahead of schedule on a new master labor contract with the Canadian Auto Workers that would preserve Ford's St. Thomas, Ontario, assembly plant until at least 2011. Ford and the union agreed to the basic economic... [SUB] 12:01 am U.S. ET | May 5

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Infiniti asks: Do you smell something?

Is there anything worse than spending $50,000 on a vehicle with that sweet, leathery new-car fragrance, only to have your 8-year-old lose a smelly bag of french fries under a seat for a month? Engineers at Nissan Motor Co.'s luxury Infiniti... [SUB] 12:01 am U.S. ET | May 5

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Sure, Nissan GT-R is impractical -- but what a rush

For almost a decade, Nissan has been playing catch-up to provide American consumers with practical vehicles: big pickups, big family sedans, small cars and compact crossovers. Now put those products on one side of the page and draw a line down the... [SUB] 12:01 am U.S. ET | May 5

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Q&A

Faurecia: We'll break even in N.A.

When he took over as Faurecia CEO in February 2007, Yann Delabriere inherited a company that had just reported a 2006 net loss of 447.9 million euros, or $696.8 million at current exchange rates. Delabriere helped narrow that loss to $369.5 million... [SUB] 12:01 am U.S. ET | May 5

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Suppliers join carmakers' charge into Russia

Automotive suppliers are joining carmakers in a rush to set up factories in Russia. European suppliers are leading the charge, but North American suppliers are looking to Russia for growth, too. [SUB] 12:01 am U.S. ET | May 5

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NEWS ANALYSIS

A dreary April in Detroit

Same old, same old. That was the story of car and light-truck sales in April, which means it was another terrible month for the auto industry. Sales totaled 1,248,549, down 6.8 percent from last year. It was the sixth consecutive year-to-year... [SUB] 12:01 am U.S. ET | May 5

AIADA picks dealer of the year

The American International Automobile Dealers Association named William Bradshaw its 2008 dealer of the year. Bradshaw, owner of Bradshaw Automotive Group in Greer, S.C., was recognized for his contributions to the industry and his community at a... [SUB] 12:01 am U.S. ET | May 5

GM makes 2nd ethanol deal

General Motors is investing in a small company that says it can make ethanol economically from nonfood plant material. The deal with Mascoma Corp., announced here last week, follows a similar investment by GM in Coskata Inc. a few months ago. [SUB] 12:01 am U.S. ET | May 5

Group 1's earnings slip

Group 1 Automotive Inc. said Tuesday, April 29, that first-quarter earnings fell 6.1 percent from the first quarter of last year. But the results beat analysts' expectations, as improvements in parts and service offset a drop in new-vehicle sales. [SUB] 12:01 am U.S. ET | May 5

Magna profits down; sales rise

On Thursday, May 1, Canadian auto supplier Magna International Inc. posted lower net income but higher total sales for the first quarter. Magna had net income of $207 million, down from $218 million for the same quarter a year ago. [SUB] 12:01 am U.S. ET | May 5

Penske earnings rise in 1st quarter

Penske Automotive Group offset a downturn in new-vehicles sales with a boost in its used-car business, the dealership group said Tuesday, April 29. Penske reported net income of $33.9 million on revenue of $3.20 billion for the first quarter,... [SUB] 12:01 am U.S. ET | May 5

FINAL ASSEMBLY

Bugging the boss: Who's listening to Porsche CEO?

The bad news for Porsche: Someone may be spying on CEO Wendelin Wiedeking. But the good news is that they seem to be getting their technology from Babies R Us, not the CIA. [SUB] 12:01 am U.S. ET | May 5

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COMMENTARY: FINAL ASSEMBLY

COMMENT: Bargaining barbs will sting for a long time

It's a shame. Long after the ink has dried on the new contract, there will be hard feelings about this year's bargaining between the UAW and American Axle & Manufacturing Holdings. Each side has suffered wounds that will ache for years... [SUB] 12:01 am U.S. ET | May 5

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FINAL ASSEMBLY

Critics have kind words for Pontiac's G8

With gasoline prices at record highs, this isn't the best time to launch a high-performance muscle car. But Pontiac's Australia-built G8 has won praise from auto writers for its performance, handling and interior. [SUB] 12:01 am U.S. ET | May 5

FINAL ASSEMBLY

Ford can't picture kids at design studio

In a bow to the era of cell phones and YouTube, a nice tradition bit the dust at Ford last month. Citing security concerns, the company prohibited design studio employees from participating in the national “Take Our Daughters and Sons... [SUB] 12:01 am U.S. ET | May 5

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FINAL ASSEMBLY

New models from the post office

The U.S. Postal Service is rolling out some new models this fall, and they're half a century old. [SUB] 12:01 am U.S. ET | May 5

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FINAL ASSEMBLY

Vox(wagen) populi -- plus a sales pitch

Everybody wants to weigh in on the crucial issues of our time, right? A new Volkswagen gimmick indulges that urge and makes a sales pitch at the same time. [SUB] 12:01 am U.S. ET | May 5

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FINAL ASSEMBLY

Wagoner's pension shift: More earlier, less overall

Senior executives at General Motors could retire with full benefits earlier, thanks to changes in the retirement plan. But they'll get less in the long run, with payments over a shorter period. [SUB] 12:01 am U.S. ET | May 5

Obituary

Information on Doug Spedding. [SUB] 12:01 am U.S. ET | May 5