After a calamitous 2009, when light-vehicle sales plunged to a 27-year low and General Motors and Chrysler collapsed into government-sponsored bankruptcy, 2010 turned into a year of recovery.
Well, a partial recovery at least -- and a frustratingly slow one at that. Not until the fourth quarter were sales moving dependably upward.
And there was more distress in 2010, although this time it was not focused so much on the Detroit 3. Rather, the trauma was at Toyota. In late January, the Japanese company was engulfed in scandal after suspending sales of eight models linked to potentially deadly unintended acceleration.
The trouble at Toyota was chosen as the top news story of 2010 in the 58th annual Automotive News staff poll. Here's a recap of the staff's choices for the year's top 10 stories.
1. How the mighty fall: Toyota's nightmare year
Allegations that several popular Toyota models were prone to accelerate dangerously out of control led to a string of recalls -- and a year of misery for the company.
Eight vehicles were temporarily pulled off the market in January, touching off a media frenzy about unintended acceleration. The result? A massive hit to the company's sterling reputation for safety and reliability.
Initially, Toyota was accused of minimizing the problem and delaying effective repairs while people died in car crashes. Top executives, including President Akio Toyoda, testified before Congress.
From October 2009 to January 2010, Toyota recalled about 8 million vehicles in the United States for defects related to unintended acceleration. The vehicles were brought back to fix accelerator pedals that could become stuck with condensation and faulty floor mats that could lodge under the acceleration pedal.
Since then the number of Toyota vehicles recalled worldwide for all types of faults has mushroomed to 15.5 million.
Toyota is now fighting a class-action lawsuit alleging software defects. And the severity of the scandal can be measured in lost sales. Toyota Motor Sales U.S.A. shed 1.6 percentage points in market share from January through November; even worse, it lost the trust of many consumers.
2. GM floats successful IPO, sheds 'Government Motors' tag
Thanks to growing revenues and profits, General Motors Co. had an attractive story line for Wall Street. That created strong demand for shares in GM's initial public offering in November.
The IPO allowed the Obama administration to cast its federal bailout and majority stake in GM in 2009 as a success. More important, the IPO helped GM start shedding the stigma of Government Motors, which kept some customers away from showrooms, according to GM research.
3. Hundreds of rejected GM, Chrysler dealerships win reinstatement
More than a quarter of the 2,789 rejected General Motors and Chrysler dealerships won reinstatement after filing arbitration claims. Those dealerships were either terminated or marked for termination as part of the companies' bankruptcy restructuring in 2009.
About 1,575 dealerships filed claims under a federal law enacted in December 2009. To settle claims, GM offered 702 letters of intent that spelled out conditions for reinstatement. Another 23 GM dealerships triumphed in arbitration rulings, and about 29 Chrysler stores won reinstatement either in arbitration or through settlements.
4. No more push: Detroit stops overproducing
One outgrowth of the industry crisis: The "push" system of building and selling vehicles is fading. Automakers are closely matching production to sales -- a dramatic change for the Detroit 3.
For most of the year, U.S. inventories hovered near record lows.
General Motors Co., which used to run its factories at any cost, trying to create demand with hefty incentives and low-profit fleet sales, underproduced hot models for much of the year. GM wants dealers to operate with much lower inventories and turn their stock faster.
At 17 million units a year, automakers and suppliers lost money. Now, with sales still shy of 12 million, they're profitable. The difference? One word: discipline.
5. Sales bounce off bottom; industry ends year with optimism for 2011
Light-vehicle sales came off the floor in 2010 and appeared headed for about 11.5 million units by year end, a rise of 11 percent over the depths of 2009.
And there is growing optimism about 2011. Most analysts expect about 12.7 million light-vehicles sales. And some say consumer creditworthiness is improving so rapidly that lenders are about to loosen credit dramatically, rocketing the market to 14 million units in 2011.
No one is talking about double-dip recession now.
6.Profits return to Detroit -- at last
Ah, the healing power of profits. There's no substitute.
So after 2009, a year from hell in which two of the Detroit 3 careened into bankruptcy, the profits posted in 2010 were welcome indeed.
Take 2010's third quarter. Ford Motor Co. posted net income of $1.69 billion in the period, its most profitable third quarter in its history. General Motors posted net income of $2.0 billion in the period, which turbocharged demand for its IPO shares in November.
Despite few redesigned vehicles in 2010, Chrysler Group still posted operating profits of $239 million in the third quarter, thanks mainly to rigorous cost cutting.