It was not a happy year for the domestic auto industry.
The first six of 2005's top 10 stories involved events or situations that the Big 3 and their suppliers wish had never happened.
There was no question about the Story of the Year. It was the Delphi bankruptcy, by a wide margin, in the voting by the Automotive News editorial staff.
Delphi Corp., the world's second-largest auto supplier, filed for Chapter 11 on Oct. 8 after failing to secure a financial bailout from General Motors, its former owner. It's a continuing story, so stay tuned. Delphi wants to cut wages in half, trim benefits, close plants and fire workers. The UAW is not amused.
Rick Wagoner, GM's CEO, was the principal player in the No. 2 story -- GM's effort to surface from a sea of red ink. Wagoner took over North American operations and plans to close eight plants and cut 30,000 jobs. He must deal with Kirk Kerkorian, who owns 7.8 percent of GM, and with Ron Gettelfinger, whose UAW has already granted health care and pension concessions and will resist further demands.
The third-place choice was GM's and Ford's pricing maneuvers. Throughout the summer, they sold cars and light trucks at prices below dealer invoice. Then, when the 2006 models arrived, they adopted "value pricing," which involved sticker price reductions -- but not nearly to the level of the summer giveaway. Now GM and Ford are raising prices.
Another bad chapter for the domestic industry: After Hurricane Katrina devastated Louisiana, Big Oil raised the pump price to more than $3 a gallon, and sales of large pickups and SUVs tumbled. They are the Big 3's most profitable models.
Gasoline prices went down to about $2 a gallon, then rose to around $2.20. Will those models come back? One way or the other, it could be one of 2006's major stories.
Bill Ford's effort to revive his company was the fifth-place story. Ford Motor Co, like GM, is stumbling and needs help. Will it come from the Mark and Anne Show? Mark Fields now is in charge of North American operations, and Anne Stevens is the No. 2.
The No. 6 story was record transplant production in the United States and North America. If John Doe buys a transplant, he doesn't buy a Big 3 product. Chalk up another setback for the Big 3.
Next in line in the voting were Dieter Zetsche's promotion to head DaimlerChrysler and Nissan North America's decision to move its headquarters from Southern California to Nashville, Tenn.
Rounding out the top 10 were 2005 sales, which will flirt with an excellent 16.9 million, accompanied by another loss in Big 3 market share; and the rise in hybrid sales, with Toyota's Prius the pacesetter at 100,000-plus deliveries.
1. Delphi forces the issue
Raising the ante on labor costs in the auto industry, giant auto supplier Delphi Corp. filed for Chapter 11 reorganization on Oct. 8. With assets of $16.6 billion and 185,000 employees worldwide, Delphi's bankruptcy protection case dwarfed all others in automotive history.
The case quickly morphed into a crisis for General Motors, which buys about half of Delphi's $28 billion in annual parts production. The mere threat of a strike at Delphi -- and the likely resulting shutdown of GM production -- caused concern on Wall Street about GM's own viability.
GM, which spun off Delphi in 1999, also could face up to $12 billion in various pension and health care liabilities for Delphi retirees.
Led by CEO Steve Miller, Delphi sparked a national debate about wages paid to union workers and the preservation of the American middle class. Saying it no longer can compete with foreign labor or even other nonunion domestic suppliers, Delphi pushed for massive wage and benefit cuts for its 35,000 hourly workers in North America.
The UAW and other unions responded with threats of strikes and bitterly criticized Delphi for paying lucrative management-retention bonuses. Miller, who replaced J.T. Battenberg III at the helm, cut his annual pay to $1 but kept a $3 million signing bonus.
The case promises to remain atop the U.S. automotive agenda for much of 2006.