Automotive News - January 7, 2008 - (Page 4)

4 • JANUARY 7, 2008 Visteon: ‘We’re leaner and smaller’ Supplier cuts salaried jobs in restructuring Robert Sherefkin rsherefkin@crain.com A digital Automotive News Starting today, subscribers can read complete issues of Automotive News online, page by page. If you are a subscriber, you will have access to all articles, photos, charts, special sections, data and ads that appear in the print edition. At 12:01 a.m. each Monday, you can read a digital version of the newest weekly issue online at www.autonews.com/digitaledition. You can read the digital edition by turning the pages, or you can find stories on particular topics by using the search function. And you can email copies of articles to colleagues. Past digital editions will be in an DETROIT — Visteon Corp. plans to eliminate 400 more white-collar jobs by mid-2008 and fix, close or sell as many as 10 more plants by year end as it narrows its product line. Employees of the parts supplier were told in October that 500 salaried jobs would be cut. About 100 were eliminated as of Dec. 31, and the rest are to be cut by midyear, the company confirmed. Visteon, like Delphi Corp. and other U.S. suppliers, has closed domestic plants to cut costs. Visteon is focusing on three business segments: electronics, climate control and interiors. It is building its presence in Asia. As part of a three-year restructuring program begun in January 2006, Visteon is fixing, closing or selling 30 plants worldwide. It has handled 18 so far. It also has announced the sale of its plant in Swansea, Wales. A Bedford, Ind., plant that builds fuel modules for Ford Motor Co. is scheduled to close in April. As part of the restructuring, Visteon announced in 2006 that it would cut 900 salaried jobs in higher cost regions. “We’re leaner and smaller,” spokesman Jim Fisher says of the 100 jobs eliminated by December and the 400 to be cut this year. He says the job cuts cross all business functions and virtually all levels. Kimberley Goode, former vice president for communications, left the company at year end. When Visteon was spun off from Ford in 2000, the company employed 82,000. Today, Visteon employs about 43,000, Fisher says. Part of that reduction came from Visteon sending back 23 plants and other operations in North America and 18,000 workers to Ford’s Automotive Components Holdings unit. c David Sedgwick is editor of Automotive News. archive available to subscribers. If you are a subscriber, check out our digital edition. If you would like to become a subscriber, send an e-mail to subs@crain.com. Let me know what you think. DAVID SEDGWICK dsedgwick@crain.com Ford doubles regional promo money Budget shift gives local execs more options in 1st qtr. Amy Wilson awilson@crain.com Ford dumps volume targets for dealer bonuses Amy Wilson awilson@crain.com DETROIT — Ford Motor Co. will double its regional promotions budget for Ford-brand vehicles in the first quarter. Dollar figures aren’t available, but dealers say the budget increase is designed to give Ford’s regional units more flexibility to tailor incentives and promotions to local conditions. Budgets for the remaining quarters of 2008 aren’t yet determined, but dealers expect the increase to be replicated as long as progress is apparent. “We have to, as dealers, show that this works,” says Texas dealer Charlie Gilchrist, chairman of the Ford National Dealer Council. “So we have to respond with increased sales.” The increase doesn’t change Ford’s marketing budget for 2008, said Jim Farley, Ford group vice president of marketing and communications. Instead, Ford is reallocating already-budgeted money to increase the regional incentives budget. It’s one of a number of changes Ford is making in 2008 to decentralize its marketing. Dealer input “A lot of that has come out of meetings with dealers in different parts of the country, who are explaining the unique opportunity for their market,” said Farley, who was hired from Toyota to be Ford’s global marketing chief in October. He wouldn’t provide numbers or guidance on how the overall marketing budget is changed from 2007. “It’s safe to say I’m not concerned with the amount of resources we have to maintain our momentum and the share goals,” Farley said. “It’s important for us to be smarter on how we deploy the money.” While Gilchrist says he doesn’t expect Ford to cut its overall marketing budget for 2008, he doesn’t know whether the automaker plans to spend more than in 2007. Under Jim Farley, Ford is decentralizing marketing so it can tailor incentives and promotions to regional conditions. Dealers expect Ford’s regional staff to consult with local dealer advertising groups on how to use the additional money. It could be used to subsidize special “no charge” options packages on specific vehicles or to fund rebates to keep a nameplate competitive with rivals. man of the marketing and advertising committee of the Ford national dealer council. “A Mustang in Florida may be selling well in the wintertime, but not so well in the North or Minnesota.” One benefit of the increase is a longer life for a Midwest-edition F-150. That pickup package was introduced in late 2007 with several no-charge options paid for by the regional promotions budget, says Smith, dealer principal of Dick Smith Ford in Raytown, Mo. It will be continued throughout 2008 because of the extra money. The additional money will allow Ford’s regional operations to target more nameplates with special incentives than it could before. With new vehicles such as the Fusion sedan and Edge crossover, Ford has wider breadth of vehicles demanding support, Smith says. Farley is a strong proponent of regional marketing, says Smith: “His support has gone a long way to getting this accomplished.” c Regional differences “There are differences in parts of the country as to what vehicles need additional incentives or boosts,” says Mark Smith, chair- DETROIT — Ford Motor Co. is dropping the volume requirement from its dealership bonus program in 2008. The move is among several in the works aimed at boosting dealership profits. The changes to the program are designed to make it easier for stores to qualify for bonuses. Many stores had trouble qualifying for the payments in 2007, dealers said. “I can’t stress enough how important dealer profitability is for us,” said Jim Farley, Ford group vice president of marketing and communications. Ford is discussing more actions to improve dealer profits with the Ford and Lincoln Mercury national dealer councils, said Farley, who left Toyota in October to become Ford’s global marketing chief. Ford dealers should watch for more developments early this year, said Charlie Gilchrist, chairman of the Ford National Dealer Council. “The biggest issue, of course, is margins,” said Gilchrist, dealer principal of Southwest Ford in Weatherford, Texas. “We have to have margins that will allow the dealers and the salespeople to make a profit when they sell a car. We’re working with Ford to come up with some things to allow the dealers to make a reasonable new-car profit.” The revised dealership bonus program, which Ford calls its Sales Drive incentive, is a start. The program previously paid a pervehicle bonus on targeted nameplates that were the same across the country. Under the 2006 program, a bonus was paid for each targeted vehicle sold. In 2007, bonuses were paid only after dealers hit volume goals for the selected vehicles. But for many, the volume goals proved hard to hit, particularly when the focus vehicles didn’t line up with sales patterns in a particular region, Gilchrist said. “In Texas, in the first quarter, everybody hits it,” he said. “In the fourth quarter, nobody hits it.” The F-series pickup was absent from the group of selected vehicles during the fourth quarter, Gilchrist said, making the volume targets tough for dealers in Texas truck country. So in addition to dropping the volume target, Ford also is allowing regional selection of vehicles to provide more flexibility with local buying patterns. “The regions will decide the vehicles they will focus on,” Gilchrist said. “There is no objective, and once you sell the vehicle, you get paid $300.” He expects the overall amount of bonus payouts to remain about the same in 2008. c http://www.autonews.com/digitaledition

Table of Contents Feed for the Digital Edition of Automotive News - January 7, 2008

Caddy V-8 is endangered species An industry turns green -- let's talk JAPAN TRIUMPHANT Ford, Microsoft to offer 911 service in Sync GPS will track fuel price Brose buys Siemens motor unit as step toward N.A. growth Expanding Meridian sees bright future Federal-Mogul CEO to stay Harbour Consulting sold Soft market threatens Tundra sales goal Ford dumps volume targets for dealer bonuses How HCCI engines work Visteon: 'We're leaner and smaller' Ford doubles regional promo money Gasoline-diesel combo moves closer to reality Rethinking retail: A hot topic at World Congress Denso expands hybrid plant CAFE fines may yield meager grants Some pay raise: To $8.3 million from $1 New Chrysler purchasing chief looks to Asia BMW adds jobs to boost S.C. output Continental layoffs follow production cuts at Chrysler Study: Indirect loan delinquencies soar No more peekaboo for Camaro Saturn's Lajdziak: GM is 'where I wanted to be' LETTER TO THE EDITOR Why buy Japanese? Here's an answer CAFE will put new entrees on auto show menu What an exciting way to start 2008 LETTER TO THE EDITOR 84-month financing is nothing new LETTER TO THE EDITOR GM ad policy shift is good for dealers JAMES B. TREECE Detroit show gets back on a global track LETTER TO THE EDITOR Too many dealers: Blame greed LETTER TO THE EDITOR Why not learn from Toyota? LETTER TO THE EDITOR A hot news item? Nah; it's 9 years old Suppliers to the 2008 Saturn Vue Supplier personnel Haldex farms out brake work The theme: Green and mean Dodge Ram gets interior upgrade BMW's 1-series coupe gets a soft-top counterpart Chrysler eye candy includes green jelly bean Chinese automakers increase their presence Concept offers a peek at Explorer's likely successor Ford goes global in styling its B-cars Forum concept is a clubhouse on wheels Dealers Simple safety: Green, amber, red Lexus SUV luxury will grow on you Personnel Gas prices boost Nissan car sales as trucks tank This year's U.S. sales forecast: Gloomy Ford: Tata is lead bidder for 2 brands Ex-Toyota manager goes to Audi Hyundai has new N.A. chief TRW buys Delphi brake assets Who's No. 1? Time for an official review Waning interest Solstice outguns Miata - again Once more into the legal fray? Lifan is the latest Chinese wannabe Things are looking up (and down) for MG Who has 1st Mustang - and what's it worth?

Automotive News - January 7, 2008

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