Automotive News - September 8, 2008 - (Page 1) autonews.com ® SEPTEMBER 8, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Detroit’s best bets for cash: Feds, UAW Jesse Snyder jsnyder@crain.com Despite high-profile efforts to shop brands like Hummer or nameplates like Viper, the Detroit 3 are running out of ways to raise cash. In recent years they have sold their best noncore assets and borrowed against primary assets. What’s left is unlikely to bring much hard cash. And in some cases, the assets that might attract buyers — such as Chrysler’s Jeep brand — cannot be Can Chrysler peddle the Viper? separated easily from the parent company (see box, Page 48). GM says several companies have shown interest in its Hummer brand. Chrysler says it was approached by a company it wouldn’t identify about the Dodge Viper. But beyond those potential deals, analysts see few Detroit 3 assets that would be worth much in today’s market. That’s why lobbyists for the Detroit 3 are working overtime to coax Congress to OK up to $50 billion in loans (see story, Page 8). The Detroit 3 already have raised tens of billions of dollars by selling financial subsidiaries, luxury brands and technology divisions or have used assets as collateral. In 2006, for example, Ford Motor Co. mortgaged most of its buildings, plants, equipment, patents and trademarks. But an economic downturn and high fuel prices raise questions on Wall Street about whether the automakers’ cash reserves will last through 2010, when a wave of more fuel-efficient products will debut. “They have to hope they get see CASH, Page 48 The GOP convention NADA Chairwoman Annette Sykora says she identifies with the GOP’s Sarah Palin, another woman who is juggling career and family. | PAGE 8 | Auto lobbyists urged GOP lawmakers at the convention to oppose a Senate bill to require automakers to build more flex-fuel vehicles. | PAGE 4 | August bounce Last month, the full-sized pickup truck segment reached its highest level of the year. 200,000 175,000 U.S. unit sales* Back in business? Large pickups stage a comeback in August. But is it the real deal? Amy Wilson awilson@crain.com Chrysler: Consultant failed to save $$$ Chrysler is suing Accenture for failing to help it find low-cost parts suppliers in China and South America. Chrysler claims the savings never materialized. | PAGE 4 | More sales coverage ➤ 45-47 beware. It ain’t over till it’s over. Small-car sales were constrained last month by low inventory levels, and don’t forget that gasoline — while cheaper than it was — still costs more than $3.50 a gallon. And although full-sized pickups posted their highest sales and industry share month of the year in August, manufacturers had to shell out. The average full-sized pickup incentive was $5,723 per vehicle last month, Edmunds.com reported. That’s the highest monthly pickup 150,000 125,000 100,000 75,000 0 Mar. Apr. May June July Aug. * Combined sales of the Chevy Silverado, Ford F series, Dodge Ram, GMC Sierra, Toyota Tundra and Nissan Titan. Source: Automotive News Data Center DETROIT — Sure enough, consumers drove more full-sized pickups off dealership lots in August than in any previous month in 2008. And, indeed, small-car share drifted back down from the stratosphere. But has the mix been fixed? Are the truck behemoths really back? And has the slim-profit small-car craze peaked? Bean counters, incentive since Edmunds began tracking the data in January 2002. TV commercials in the Detroit area promoted as much as $9,000 off Ford F-series pickups. Nissan ran deep truck discounts in its 41 biggest retail markets, and 74 percent of Titan pickup sales came from those markets. A Nashvillearea dealer advertised up to $12,000 off some Titans. “Trucks got dirt-cheap,” said analyst Jim Hall of 2953 Analytics in suburban Detroit. “Nine thousand dollars buys a hell of a lot of gasoline.” Still, manufacturers see the August mix as encouraging. Fullsized pickup sales rebounded to see SALES, Page 48 FLETCHER JONES JR. VINCE SHEEHY The dealer speaks Speaking on the West Coast, Dealer Fletcher Jones Jr. says that in a soft market, luxurybrand stores can ease the pain. Meanwhile, in the Washington area, dealer Vince Sheehy says, “It will take five years to rightsize this market.” | PAGES 22, 24 | The Chevrolet Silverado: America’s top-selling light vehicle in August. Are Chinese parts losing cost edge? Rising costs and a weak U.S. dollar are making China less attractive as a low-cost source of parts. | PAGE 20 | Chrysler Financial hikes dealer floorplan fees Bradford Wernle bwernle@crain.com DETROIT — A month after its sudden withdrawal from the leasing business, Chrysler Financial has told dealers that it will jack up their floorplan interest rates and force them to pay off older, unsold vehicles. In an Aug. 27 letter to dealers, Chrysler Financial CEO Thomas Gilman called the moves “unprecedented actions for unprecedented times.” Gilman told dealers that the new charges are a result of “a signifi- cant increase in cost” that Chrysler Financial incurred when it renewed its package of loans on Wall Street on Aug. 1. Under their previous floorplan agreement with Chrysler Financial, dealers paid interest on unsold vehicles. But the lender did not charge fees for aged inventory. While Chrysler Financial wanted dealers to pay off inventory more than a year old, the policy was not enforced. Now it will be. Dealers aren’t happy about the charges. Chrysler Financial will meet with dealers individually to outline its rate increases. The latest moves heighten tensions between dealers and Chrysler’s captive finance arm at a time when the carmaker’s sales have been shaky. In August, Chrysler LLC’s sales fell 34.5 percent, the steepest decline of any major manufacturer. On the Web This week at www.autonews.com: Wall Street’s crackdown Chrysler Financial was forced to raise floorplan fees after it asked banks and investors to renew its $30 billion line of credit on Aug. 1. Some see FLOORPLAN, Page 48 Today: The Automotive News Data Center posts August and year-to-date U.S. vehicle sales tables. Wednesday: Chrysler LLC coPresident Jim Press speaks to the Automotive Press Association in Detroit. NEWSPAPER http://autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - September 8, 2008 Chrysler Financial hikes dealer floorplan fees Back in business? Detroit's best bets for cash: Feds, UAW Document fee suits swamp Missouri dealers Honda's family squabble Used truck prices rebound Ford mulls Lincoln compact Toyota delays RAV4 plan Proposed flex-fuel mandate roils industry Chrysler sues consultant over sourcing Cobalt transaction prices are up $775 since April Nissan looks to Mexico for engineering aid To retain truck buyers, Nissan offers more stuff Press: Chrysler is pushing forward on electric cars Leasing falls to 4-year low GM: Currency shift stalled Astra Dealers say they can sell the Republican ticket Industry loans clash with GOP climate Grand Cherokee will get axles from new plant Makers must resist urge to backslide as gas price dips Times are tough outside the U.S., too Chevrolet does tout its small cars Let natural gas power the fuel cell A crash course in collaboration Dodge wouldn't rush the RamBox Plastics are losing cost advantage Suppliers expect to benefit from tougher CO2 rules 'People just want Ford to go' For now, Honda will skip electric vehicles Toyota, Subaru enter race to market electric vehicles China exports squeezed Study: 15% of wrecked autos got washed titles Mercedes megadealer is bullish on luxury Sheehy: 'We are not in business for nostalgia' Automakers use driving schools as marketing tools Dodge smoothes Ram's rough edges â a little Honda touts leasing while others fall back Alysha Webb Study: Nonprime car loans get longer Dealer CPA group picks leader BMW, Edmunds team up on loan site for consumers Va. Honda dealership loses protest bid Judge throws out deceptive-ads lawsuit against Toyota in Arkansas Mo. dealership's protest gets go-ahead Pa. court throws out suit against Ford, dealership Dealers Ross' interiors company pushes into China, India More than a game Nissan's Tavares: Green conference keynoter Quality group seeks to set consulting standards Personnel Dana to shift HQ by Sept. '09 Tenneco to supply Volvo XC60 BMW gets Siemens conveyors IAC to cut 280 jobs in Sweden Polytec to acquire Peguform Metaldyne to sell Italy operation Federal-Mogul to build India plant Beck, Delphi make pact TRW to supply Chinese sedan Auto profits rise in Russia Black Book expands data Hayes Lemmerz cuts losses Ford: Buyouts are a tough sell GM's party plans include production Volt An ice-cold August for auto sales Big drop in Aug. output Lights, camera . . . Volt? In case the roads get too quiet . . . The Insight rides again Lagonda brand will be back Milwaukee road trip: No old pals, but 1 new lesson Choice of Odell seen as Ford vote of confidence in Volvo Dana sort of wins an award Automotive News - September 8, 2008 Automotive News - September 8, 2008 - (Page Introducti) Automotive News - September 8, 2008 - Detroit's best bets for cash: Feds, UAW (Page 1) Automotive News - September 8, 2008 - Detroit's best bets for cash: Feds, UAW (Page 2) Automotive News - September 8, 2008 - Toyota delays RAV4 plan (Page 3) Automotive News - September 8, 2008 - Cobalt transaction prices are up $775 since April (Page 4) Automotive News - September 8, 2008 - Cobalt transaction prices are up $775 since April (Page 5) Automotive News - September 8, 2008 - GM: Currency shift stalled Astra (Page 6) Automotive News - September 8, 2008 - GM: Currency shift stalled Astra (Page 7) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 8) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 9) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 10) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 11) Automotive News - September 8, 2008 - Let natural gas power the fuel cell (Page 12) Automotive News - September 8, 2008 - Let natural gas power the fuel cell (Page 13) Automotive News - September 8, 2008 - Plastics are losing cost advantage (Page 14) Automotive News - September 8, 2008 - Plastics are losing cost advantage (Page 15) Automotive News - September 8, 2008 - Suppliers expect to benefit from tougher CO2 rules (Page 16) Automotive News - September 8, 2008 - 'People just want Ford to go' (Page 16A) Automotive News - September 8, 2008 - Toyota, Subaru enter race to market electric vehicles (Page 16B) Automotive News - September 8, 2008 - Toyota, Subaru enter race to market electric vehicles (Page 16C) Automotive News - September 8, 2008 - Toyota, Subaru enter race to market electric vehicles (Page 16D) Automotive News - September 8, 2008 - For now, Honda will skip electric vehicles (Page 17) Automotive News - September 8, 2008 - For now, Honda will skip electric vehicles (Page 18) Automotive News - September 8, 2008 - For now, Honda will skip electric vehicles (Page 19) Automotive News - September 8, 2008 - Study: 15% of wrecked autos got washed titles (Page 20) Automotive News - September 8, 2008 - Study: 15% of wrecked autos got washed titles (Page 21) Automotive News - September 8, 2008 - Mercedes megadealer is bullish on luxury (Page 22) Automotive News - September 8, 2008 - Mercedes megadealer is bullish on luxury (Page 23) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 24) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 25) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 26) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 27) Automotive News - September 8, 2008 - Automakers use driving schools as marketing tools (Page 28) Automotive News - September 8, 2008 - Dodge smoothes Ram's rough edges â a little (Page 29) Automotive News - September 8, 2008 - BMW, Edmunds team up on loan site for consumers (Page 30) Automotive News - September 8, 2008 - BMW, Edmunds team up on loan site for consumers (Page 31) Automotive News - September 8, 2008 - Judge throws out deceptive-ads lawsuit against Toyota in Arkansas (Page 32) Automotive News - September 8, 2008 - Pa. court throws out suit against Ford, dealership (Page 33) Automotive News - September 8, 2008 - Dealers (Page 34) Automotive News - September 8, 2008 - More than a game (Page 35) Automotive News - September 8, 2008 - Personnel (Page 36) Automotive News - September 8, 2008 - TRW to supply Chinese sedan (Page 37) Automotive News - September 8, 2008 - TRW to supply Chinese sedan (Page 38) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 39) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 40) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 41) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 42) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 43) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 44) Automotive News - September 8, 2008 - GM's party plans include production Volt (Page 45) Automotive News - September 8, 2008 - GM's party plans include production Volt (Page 46) Automotive News - September 8, 2008 - An ice-cold August for auto sales (Page 47) Automotive News - September 8, 2008 - An ice-cold August for auto sales (Page 48) Automotive News - September 8, 2008 - Big drop in Aug. output (Page 49) Automotive News - September 8, 2008 - Dana sort of wins an award (Page 50) Automotive News - September 8, 2008 - Dana sort of wins an award (Page 51) Automotive News - September 8, 2008 - Dana sort of wins an award (Page 52)
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