Automotive News - January 7, 2008 - (Page 6)

6 • JANUARY 7, 2008 Some pay raise: To $8.3 million from $1 For top Delphi execs, Chapter 11 has happy ending David Barkholz dbarkholz@crain.com DETROIT — Delphi Corp.’s two top executives, Steve Miller and Rodney O’Neal, stand to earn $13.6 million in combined cash bonuses as part of the supplier’s impending emergence from Chapter 11 protection. Miller, 68, a longtime turnaround expert who is executive chairman, gets $8.3 million, according to a filing in U.S. Bankruptcy Court. He is expected to leave Delphi once the supplier exits Chapter 11. That may be as early as this quarter. CEO O’Neal, 54, is in line to receive a $5.3 million bonus. He is staying to run Delphi under the incoming new owners, led by private equity investor Appaloosa Man- agement LP. The compensation committee of Delphi’s board based its recommendations on industry benchmarking and the two executives’ performance during the Chapter 11 period, which began in October 2005. The board said the two waived a total of $7.3 million in combined compensation during the term in Chapter 11. Miller accepted only $1 annually for his work in 2006 and 2007. The document also said Delphi’s booking of future business once it emerges from bankruptcy is more than the supplier had expected. Delphi is the largest supplier to General Motors. It will exit Chapter 11 having shed its commodity businesses to concentrate on electronics built mainly overseas. Delphi is expected to emerge with annual sales of $20 billion, about $6 billion less than when the ex-GM parts division sought Chapter 11 protection. c O’Neal: In line for $5.3 million Miller: Will get $8.3 million CAFE fines may yield meager grants Harry Stoffer hstoffer@crain.com WASHINGTON — When Congress and President Bush enacted a law last month that raises fuel economy standards 40 percent by 2020, they made what sounded like a big concession to automakers. The law earmarks half of all fuel economy fines paid by automakers that miss the target to fund the retooling of factories to build more fuel efficient vehicles. Since the 1983 model year, car companies have paid about $735 million in fines — about $30 million a year — for failing to meet fuel economy standards, according to a new government report. Half that annual amount would not pay for much retooling. The new standards could lead to more and bigger penalties. But a consistent payer of fines says it has other plans. In October, DaimlerChrysler paid a $30 million fine, the largest by an automaker, mainly because Mercedes-Benz cars missed the target in 2006. Mercedes lobbyist Jake Jones says his company intends “to try to meet whatever the standard is.” c New Chrysler purchasing chief looks to Asia Robert Sherefkin and David Barkholz rsherefkin@crain.com Demand for hybrid parts is growing: Sales of the Toyota Prius climbed 70 percent in 2007. Denso expands hybrid plant Hans Greimel hgreimel@crain.com CAFE tab Automakers paid these fines in 2007 for failing to meet CAFE standards in 2006. DaimlerChrysler BMW Porsche Maserati Volkswagen Ferrari $30.3 million $5.1 million $4.6 million $1.4 million $1.0 million $842,000 Source: National Highway Traffic Safety Administration TOKYO — Denso Corp. plans a 25 percent expansion of a plant that makes hybrid vehicle components and other parts. The Japanese supplier will spend about ¥6 billion ($53.9 million) for an additional 1.2 million square feet of land at a factory complex in Anjo, Denso said in a statement. The expansion comes as Denso profits and sales are surging thanks to brisk business with Toyota Motor Corp., its top customer and shareholder. The trend suggests Denso will surpass Ger- many’s Robert Bosch GmbH as the world’s biggest auto supplier this year. Denso’s Anjo complex has 2,450 employees who produce hybrid vehicle components, starters and alternators. Last month, President Koichi Fukaya said he expects Denso’s sales of hybrid components, such as converters and battery monitoring units, to more than double in the next three years. U.S. sales of the top-selling hybrid, the Toyota Prius, reached 181,221 in the United States in 2007, a 69.4 percent increase from 2006. c DETROIT — John Campi, the architect of Bob Nardelli’s purchasing strategy at Home Depot, will direct Chrysler LLC’s $40 billion annual purchase of parts and services. Campi’s appointment last week as Chrysler’s executive vice president of procurement signals Nardelli’s desire to buy more parts from Asia. Campi replaces Simon Boag, who was named executive vice president for global alliance operations. Both report to Chrysler President Tom LaSorda. Boag’s newest assignment comes just seven months after he was named purchasing chief last May, before Nardelli became CEO. A Chrysler spokesman said Friday, Jan. 4, that Boag will manage alliances but will not negotiate new deals. Instead, Nardelli will rely on two executives — L. John Cataldo, a General Electric veteran hired by Nardelli last year as vice president of mergers and acquisitions, and Phil Murtaugh, CEO of Asian operations — to negotiate deals. Campi’s task is clear: dramatically expand the company’s purchasing from low-cost markets. Nardelli wanted a trusted lieutenant in the purchasing job, and Campi has studied Chrysler’s global purchasing operations. After joining Chrysler as an adviser last year, Campi took Boag to some of the company’s major procurement offices worldwide, Chrysler spokesman Kevin Frazier confirmed. Chrysler has struggled to expand the number of parts it buys from low-cost countries, a source said. Ford Motor Co. and General Motors have had more success buying components overseas. Former Chrysler purchasing chief Peter Rosenfeld launched Chrysler’s efforts to increase purchases from lower-cost countries. c Bradford Wernle contributed to this report Rethinking retail: A hot topic at World Congress Issues affecting dealers in the evolving automotive retail market will be the subject of a panel discussion at the Automotive News World Congress on Tuesday afternoon, Jan. 22. The speakers are: Walter Czarnecki, executive vice president, Penske Corp. Randy Ortiz, general manager, Ford and Lincoln Mercury sales Sheldon Sandler, CEO, Bel Air Partners LLC Dale Willey, chairman, National Automobile Dealers Association David Zuchowski, vice president of national sales, Hyundai Motor America Czarnecki has more than 40 years in the auto industry. He joined Penske in 1978 and held a number of positions before being appointed executive vice president. Czarnecki is involved in nearly all of Czarnecki: Key Penske’s retail, Penske exec motorsports, investment and transportation service activities. Ortiz heads the U.S. sales operations of Ford Motor Co. Before being appointed to his current position in 2007, he was general sales manager of the Ford Customer Service Division. Sandler founded Bel Air in 1998 to Key facts Ortiz: Heads sales Sandler: Handles for Ford in U.S. dealership sales respond to the complex financial needs of automotive retailers. The consulting firm represents dealers selling their automotive assets, such as inventory, real estate and franchises. Willey is the 2007 NADA chairman and has been a General Motors car dealer and NADA member since Willey: 2007 NADA chairman Zuchowski: Chief of Hyundai sales 1970. His dealership is Dale Willey Automotive, which sells Buick, Cadillac, GMC and Pontiac vehicles in Lawrence, Kan. Zuchowski is responsible for Hyundai’s sales, field operations and dealer relations in the United States. He joined Hyundai in his current role in February 2007 after a stint as vice When: Jan. 21-24 Where: Detroit Marriott Renaissance Center Cost: $1,595; daily fee $975 For information: 866-374-6227 (U.S. only) or 734-929-0498, autonews.com/worldcongress Exclusive lead sponsors: IBM and PricewaterhouseCoopers president of sales and field operations for Mazda North American Operations. Zuchowski began his career at Ford in 1980. c http://autonews.com/worldcongress

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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