Automotive News - January 14, 2008 - (Page 4) 4 • JANUARY 14, 2008 For some dealers, Isuzu franchise is a nice addition Kathy Jackson and Ryan Beene kjackson@crain.com LOS ANGELES — Isuzu may be on the way to extinction in the United States, but its surprise effort to recruit dealers has turned up some enthusiastic takers. Probably no brand this decade has fallen as far and as fast as Isuzu. Sales have plunged from more than 100,000 in 1999 to just over 7,000 in 2007. Dealers averaged fewer than three sales per month in 2007. The product lineup is puny, only two rebadged General Motors vehicles, and nothing, apparently, is in the pipeline. Some retailers say Isuzu is deliberately forcing dealers to quit, by starving them of new product, so it can pull out of the U.S. light-duty market. Yet, amazingly, Isuzu Motors America last year said it was on the prowl for new stores. Company executives identified 40 markets where the brand is not represented or is underrepre- sented and said they planned to sign 40 to 50 new dealers. Isuzu has signed 13 new dealers since it began its push to add retailers in late 2006, according to spokesman Chip Letzgus. Still, the total number of U.S. Isuzu dealers is dropping: from 227 in 2006 to 201 in 2007. Letzgus declined to discuss the recruiting effort further though he said Isuzu wants about 225 dealers. see ISUZU, Page 38 Dealer Jim Shorkey spent about $125,000 to acquire an Isuzu franchise and to renovate a dedicated showroom for Isuzu at his Suzuki dealership near Pittsburgh. UAW, CAW chiefs split on views of Cerberus Bradford Wernle bwernle@crain.com ■ Chrysler, Jeep roll out concepts Chrysler LLC will show two alternative-fuel concept vehicles at the Detroit auto show this week. The Chrysler ecoVoyager, above, will be powered by an electric motor generating 268 hp with a range of 40 miles on a charge. A small hydrogen fuel cell augments the electric motor and extends the range to 300 miles. The Jeep Renegade is made for dune surfing and rock crawling. The Renegade has a lithium ion battery pack powering twin electric motors, one attached to each axle. The range is extended by a 1.5 liter, three-cylinder diesel. In May, private equity mogul Stephen Feinberg launched a charm offensive that won skeptical union leaders Ron Gettelfinger and Buzz Hargrove over to the idea that his company offered the brightest future for Chrysler. Feinberg’s Cerberus Capital Management LP won its bid to buy Chrysler. Now the two union leaders have sharply diverged in their trust of Feinberg and his private equity firm. UAW President Gettelfinger still believes in Cerberus. But Canadian Auto Workers President Hargrove, whose union’s contract expires this year, says he is worried about Cerberus’ plans for Chrysler in Canada. Gettelfinger: Chrysler’s Hargrove: Cerberus is owners seem to be “in falling short of its it for the long haul.” commitments. pleaded with Chrysler officials about getting transition help for 1,000 workers who will lose their jobs when Chrysler discontinues the third shift at Brampton, Ontario, in March. Chrysler makes the Chrysler 300, the Dodge Charger and Dodge Magnum in Brampton. When production of the Magnum ceases this quarter, the Challenger muscle car will take its place. Cautiously optimistic Gettelfinger told Automotive News that he is cautiously optimistic that Cerberus, the company he once predicted would “strip and flip” Chrysler, is “in it for the long haul.” Gettelfinger said he spoke with Feinberg before Christmas and communicates regularly with Chrysler co-President Tom LaSorda. Referring to Feinberg, he said: “I believe we have a good relationship. So far, he’s kept his word to me. Every commitment he’s made he’s lived up to, and that’s all you can judge people by. “I believe they’re in it for the long haul. I recognize the economic climate has changed quite a bit since they took over. By the same token, I do not believe they’re interested in just walking in and walking out. I think they’ve got their hands full, and I think they recognize that now more than they did before the purchase.” Gettelfinger said he was not surprised by the layoffs Chrysler announced just after Chrysler workers ratified a four-year contract in October. Hargrove, on the other hand, said he has ‘No to everything’ “We just don’t think they’re living up to their commitments in dealing with fallout with losing the third shift in Brampton. They’ve said no to everything we’ve proposed. That’s never happened before. They’ve always tried to deal with the people issues.” The union suggested many ideas to the company, all of which were rejected, Hargrove said. “We’ve always had open dialogue. Usually when there’s a meeting and they know if we’ve got concerns, the top people will talk. This is a whole different approach to what we had historically in our relationship, and it doesn’t bode well.” The CAW and UAW are on different contract schedules with the carmakers. The CAW will open talks for a new contract this fall. c Industry and its allies dig in against state CO2 rules Harry Stoffer hstoffer@crain.com The fight goes on The auto industry has challenged state greenhouse gas rules in several federal courts. New Mexico: Suit filed recently by a group of dealerships Rhode Island: Challenge kept alive by a judge’s ruling last month Vermont: Industry lost in September; under appeal California: Industry lost in December, no appeal so far month in an effort to overturn the New Mexico rules. “This is a little more conservative area,” Zangara told Automotive News. “We may have a better chance.” Operators of the New Mexico dealerships say the state rules would prevent them from selling the vehicles their customers want. Automakers are not part of the New Mexico lawsuit.c Despite big courtroom losses in their fight against state-by-state greenhouse gas rules, automakers and their allies are staying in the legal game. Car companies and dealers kept alive their lawsuit arguing that Rhode Island’s greenhouse gas rules conflict with federal fuel economy standards. A federal judge in Rhode Island rejected a request by state officials to dismiss the industry suit. Several dealerships have gone to federal court in New Mexico to challenge that state’s rules. In the Rhode Island case, Senior District Judge Ernest Torres ruled Dec. 21 that automakers should have their claims heard. The companies would have to spend “substantial sums of money” to redesign vehicles if the state rules took effect, Torres said. The ruling is not a final outcome. But it creates the possibility that another trial court could reach a different conclusion than federal judges in Vermont and California did last year. Those judges rejected industry claims that federal fuel economy standards supersede state greenhouse gas rules. Different rulings from different courts would help the industry pursue appeals, possibly to the U.S. Supreme Court. The Alliance of Automobile Manufacturers is appealing the Vermont decision to the First U.S. Circuit Court of Appeals in Boston. The alliance represents the Detroit 3, Toyota and six other automakers. It has not decided whether it also will appeal on the California ruling, spokesman Charles Territo said last week. In December, the Bush administration denied California and other states authority under the federal Clean Air Act to enforce state greenhouse gas limits. Industry groups are thinking of joining lawsuits to support the administration’s decision. Administration’s case EPA Administrator Stephen Johnson has said a new federal fuel economy standard of 35 mpg by 2020 will do more to fight climate change than a patchwork of state rules. The main target of the rules is carbon dioxide, a byproduct of burning fuel. But a new EPA chief in a new administration could grant the states the authority they seek. That’s one reason for the industry to keep other lawsuits alive. “There’s a tangle of things going on,” said David Doniger, a lawyer and policy director at the Natural Resources Defense Council’s climate center. The group has helped states defend their greenhouse gas rules. Doniger said he is confident states and environmental groups ultimately will defeat industry challenges. The issue will not return to the U.S. Supreme Court, he predicted. The high court ruled last April that the EPA is obligated to determine whether greenhouse gases pose a threat to human health — and, if so, to regulate them. Dealer argument Ken Zangara, a Dodge dealer in Albuquerque, N.M., owns one of three dealerships that filed suit late last
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