Automotive News - August 11, 2008 - (Page 1) autonews.com ® AUGUST 11, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Ford mends supplier relations Vendor survey was bad news for most big automakers Robert Sherefkin rsherefkin@crain.com DETROIT — Ford Motor Co. turned the tide in its long-troubled relations with suppliers this year, even as automaker-supplier relations worsened broadly across the industry. In his annual survey of such relations, consultant John Henke Jr. Ford’s purchasing chief Tony Brown: Pleased but “we have a ways to go.” found that Ford overcame industry turmoil to post an 18 percent improvement in its survey score. It was the only one of the six major automakers to post any improvement. In contrast, Toyota, Nissan and Chrysler all showed double-digit declines. General Motors and Honda edged lower. “The results show that Ford has bucked the industry trend — the first year in all of the eight years of the study,” Henke, president of Planning Perspectives Inc. of suburban Detroit, told Automotive News. “All the data suggests that Ford is indeed moving toward more trusting supplier relations, especially with their largest suppliers.” In a telephone interview, Tony Brown, Ford group vice president for global purchasing, said: “We are pleased with our progress, but we recognize that we have a ways to go.” He credited Ford’s Aligned Business Framework for having strengthened its business relationships with its entire supply base. Under that plan, Ford gives more business to selected suppliers, which will be involved in product development earlier. see SUPPLIERS, Page 47 Infiniti plans powerful hybrid Undaunted by rival brands’ slowselling luxury hybrids, Infiniti plans a high-performance hybrid in 2010. | PAGE 4 | Army puts Arizona dealerships off-limits Alysha Webb awebb@crain.com Japan embraces fuel efficiency Japanese automakers are planning a new generation of highly fuel-efficient vehicles. Honda will sell a new hybrid in 2010, while Mitsubishi and Nissan are developing electric cars for low-cost urban driving. A comprehensive review of Japan’s future products starts on PAGE 20. Honda’s hot lineup stays lean and green. PAGE 22 Infiniti adds electronic features. PAGE 28 Expect Toyota to dump the FJ Cruiser. PAGE 30 Also this week: Nissan plans Infiniti hybrid with lithium ion battery. PAGE 4 Nissan wants to leap-frog rivals with electric car in 2010. PAGE 46 Diesels win tax breaks Clean diesels from VW and Mercedes will get great fuel economy — and federal tax credits of $900 to $1,800. | PAGE 6 | SIERRA VISTA, Ariz. — In her decade as spokeswoman for Fort Huachuca, Tanja Linton says, the Army base here has declared some rowdy bars off-limits to soldiers. But this spring, base officers ordered military personnel not to do business with two auto dealerships here and one in nearby Tucson, all owned and run by Rick Johnston and his two sons. Linton says the base felt the need to “protect” its soldiers — as many as 80 percent of whom are sent to Iraq or Afghanistan — from abuse by the dealerships. “We were concerned that our service members are being taken advantage of,” she told Automotive News. Linton and others cite complaints that the dealerships cheated or at least misled soldier customers and threatened them with arrest or a tarnished credit history when they complained. Linton says many soldiers who complained asked not to be identified out of “fear of retribution” by the dealerships. The dealerships — Wildcat Mitsubishi in Tucson and Ideal Automotive, which operates Mitsubishi and Suzuki stores here in Sierra Vista — also are under civilian scrutiny. The state of Arizona is investigating the dealerships’ practices, after the local Better Business Bureau fielded 30 complaints about them over the past three years. In an interview here, dealer Rick see SOLDIERS, Page 46 Dana, Chrysler on the rocks Dana’s John Devine wants a federal judge to release it from unprofitable Chrysler contracts. The request sends a clear message to other automakers. | PAGE 8 | The Lexus LF-Xh concept may hint at the next-generation RX crossover. Cost cuts alone can’t save Chrysler Healthy future relies on product development Bradford Wernle bwernle@crain.com On the Web This week at www.autonews.com: For complete coverage of the 2008 Management Briefing Seminars in Traverse City, Mich., go to www.autonews.com/tcity. The schedule highlights: Monday: Manufacturing executives Frank Ewasyshyn of Chrysler and Steve St. Angelo of Toyota Wednesday: Chrysler’s Tom LaSorda and Ford’s Mark Fields Thursday: Toyota Division General Manager Bob Carter Friday: Top purchasing executives Bo Andersson of GM, Tony Brown of Ford and John Campi of Chrysler news ANALYSIS Mixed signals CHRYSLER’S POSITIVES Jim Press — Chrysler LLC’s copresident and optimist-in-chief — says the company has slashed costs and is meeting its cash flow targets. So why is Wall Street so gloomy? In a report last week, Moody’s Investors Service downgraded Chrysler’s rating three notches to Caa1 — a pes- simistic “junk” rating. The bottom line: Chrysler is slashing jobs, unused production capacity and assets to become smaller and more profitable. But is it spending enough on product development to ensure a healthy future? The Moody’s report suggests the answer may be no. J. Bruce Clark, senior vice president of Moody’s corporate finance group, praised Chrysler for its “relatively aggressive and successful cost-cutting program.” But he adds that Chrysler must establish adequate demand for its minivans and crossovers, given the weakness of its car lineup. And over a three-year period, companies with similar Moody’s credit ratings had a 30 percent chance of default. Cash reserves are steady. Cash flow is positive. Company slashed excess production capacity. CHRYSLER’S NEGATIVES Sales through July are down 23%. Chrysler lacks small cars. Its credit carries a “junk” rating. Given Chrysler LLC’s collapsing sales so far this year — down 22.8 percent, the biggest decline of any major automaker — boosting demand in a tough market could be a Herculean task. So if Wall Street is so gloomy, how can Press claim that the see CHRYSLER, Page 47 NEWSPAPER http://autonews.com http://www.autonews.com http://www.autonews.com/tcity
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