Automotive News - March 9, 2009 - (Page 8) 8 • FEBRUARY 9, 2009 comment Recession delays Ford’s global van plan Amy Wilson awilson@crain.com GMAC steps back from the brink General Motors and GMAC are like two mountain climbers connected by a rope. If one falls off a cliff, the other soon follows. It is unsettling to learn just how close the two companies drifted to the edge of that cliff last October. At the time, GMAC was perilously low on cash. GMAC contacted GM executives and offered a stark choice. GMAC could fund car loans for GM customers, or it could finance floorplans for 80 percent of GM’s dealers. But it couldn’t do both. In a telephone conversation last week, GM sales chief Mark LaNeve described this nasty dilemma. Both companies agreed that the loss of floorplan financing would be a disaster, LaNeve said. Credit unions DAVID SEDGWICK and banks could IS EDITOR OF AUTOMOTIVE replace GMAC NEWS. as primary providers of car loans. But no bank was ready to finance wholesale inventories for thousands of GM dealers. So GMAC’s brain trust informed LaNeve that it would preserve dealers’ floorplanning. The downside? GMAC wrote zero loans for GM car buyers in November and December. The upside? The dealers would live to fight another day. Always an optimist, LaNeve notes that GMAC resumed making loans to GM customers after it received its $6 billion in federal emergency aid. In January, GMAC financed 5 percent of GM’s vehicle sales. If current trends continue, LaNeve said, that share may rise to 15 or 20 percent. That’s not like the old days, when GMAC financed close to half of GM’s consumer loans. But LaNeve says he can live with it. Last week, GMAC President Bill Muir confirmed that his company wants to write more consumer loans for GM dealers. “We have re-entered the retail auto finance business and now offer both competitive prices and a competitive purchase policy,” said Muir in an e-mail Thursday, Feb. 5. “We are encouraging dealers once again to send us all of their applications so we can help them increase sales.” So what are the future prospects for this uneasy alliance? For better or worse, GM and GMAC are stuck with each other. Even though GMAC is no longer GM’s captive lender, the automaker’s dealers depend on it more than ever for their floorplans. Let’s hope that these two partners stay away from cliffs. You may contact David Sedgwick at dsedgwick@crain.com DETROIT — Alan Mulally’s global vehicle plan hit its first big roadblock last week courtesy of the recession. Desperate to conserve cash and avoid taking emergency government loans, Ford Motor Co. is delaying the next-generation Transit van, one of four key vehicle platforms in CEO Mulally’s global plan. Other platforms are the subcompact Fiesta, the compact Focus and the mid-sized Mondeo cars. Ford confirmed the delay last week but wouldn’t provide a new timetable. Executives blamed the economic crisis and falling sales, which will eliminate 850 jobs in the United Kingdom. The next-generation Transit was scheduled to be Ford’s first global full-sized commercial van. A version of the Transit, code-named V363, had been planned for North American production beginning in 2011 for the 2012 model year, according to supplier and industry sources. It was expected to replace the stalwart Econoline, which has consistently accounted for about half of the U.S. commercial van market for years. It’s unclear when the full-sized Transit will arrive in the United States. A Ford source says the product remains in the North American cycle plan. The Transit delay shows the lengths to which Ford will go to survive without government loans — and the operational oversight that goes with them. Aside from its cash hoard, Ford has few options to generate new money. Barring a sales recovery, that leaves cost cutting as Job 1 to avoid the loans. Before the Transit announcement, Ford global marketing chief Jim Farley acknowledged last week that product delays are possible. Ford CEO Alan Mulally envisions four key global vehicle platforms. “That will be a very difficult conversation. We may have to make adjustments here and there,” Farley said on “Autoline Detroit.” “But we are so committed to keeping our product portfolio fresh and world-class, and that is our number one priority.” c John Revill contributed to this report Ford plans to combine the platforms for the U.S. Econoline van, far left, and the European Transit van into one global platform. Colliver takes a break — kind of Honda sales boss steps down, becomes a senior adviser Alysha Webb awebb@crain.com In 1993, Dick Colliver figured he was through with the day-to-day fray in the car business. He was off by 16 years. After two decades at Mazda, he bowed out as group vice president and general manager for the U.S. sales arm in January 1993, and was set to retire. Instead, Colliver was snapped up by American Honda Motor Co., which needed a veteran sales pro to right its ship. Even then, he didn’t figure on staying long. Colliver joined Honda in February 1993 just as a huge sales kickback scandal threatened the company, and he led Honda to consistent sales success for a decade and a half. Last week, American Honda said Colliver, 69, will step aside as executive vice president of sales. He will become senior adviser to the company effective April 1. Replacing Colliver will be John Mendel, a former Ford and Mazda executive who has been executive vice president of auto operations for American Honda since 2007. Takashi Sekiguchi, who has been executive vice president of corporate affairs and product planning, replaces Mendel. The changes come as Honda is suffering the same sales challenges as other automakers. After 14 straight years of growth in America, American Honda’s sales fell 7.9 percent in 2008. Mendel joined American Honda in Supplier association chief Neil De Koker: Suppliers need about $18.5 billion in aid. Supplier group: Need is urgent for federal aid Harry Stoffer and Robert Sherefkin hstoffer@crain.com JOE WILSSENS Dick Colliver, left, chats with incoming National Automobile Dealers Association Chairman John McEleney during this year’s convention. In his new role, Colliver will work closely with dealers and Honda managers. December 2004 and was promoted to executive vice president three years later. Before Honda, he was COO of Mazda North American Operations. He began his career with Ford in 1976. As senior adviser, Colliver will provide strategic counsel, practical guidance and support to American Honda’s dealers, managers and others. “I wish Dick would stay forever,” said Scott DeMasso, owner of Space Coast Honda in Cocoa, Fla., and chairman of the Honda Dealer Advisory Board. “Whatever his position ends up being, having him available to the dealers is great.” c autonews.com After a tumultuous start at Honda, Dick Colliver went on a winning streak. Read Mark Rechtin’s 2003 account at autonews.com/colliver. Honda considers U.S. output of Insight hybrid Hans Greimel hgreimel@crain.com Banks halt floorplan loans ➤ 1 TOKYO — Honda wants to price its Insight hybrid hatchback under $20,000 in the United States and may consider building it there if annual North American sales stabilize at its lofty target of 100,000 units. Both goals will be tough for the Japanese carmaker, which starts selling the five-passenger gasoline-electric car in the United States in April as a challenge to the popular Toyota Prius. The yen’s recent surge against the dollar makes the $20,000 sticker price a stretch, while the global financial crunch and falling gasoline prices will likely undermine demand. Speaking at the Japanese launch of the vehicle Thursday, Feb. 5, Execu- Honda wants its Insight hybrid, shown, to challenge Toyota’s Prius. tive Vice President Koichi Kondo said Honda Motor Co. aims for a stateside price of less than $20,000. Late last year, when Honda unveiled its domestic target price of under ¥2 million, it came to around $19,000. But the yen’s climb has pushed that dollar-denominated price closer to $23,000. Getting the sticker price below that of the Prius is seen as the key to the Insight’s success. The Prius starts at $22,000 in Amer- ica and ¥2.3 million ($25,000) in Japan. In January, Toyota sold 8,121 Priuses in the United States, down 28.6 percent from January 2008. At the Insight’s launch, Honda President Takeo Fukui said he will consider manufacturing the car overseas if volume in North America reaches a consistent 100,000 units a year. c Honda President Takeo Fukui: A U.S.-built Insight hinges on stable North American sales of 100,000 units. The automotive supply base will last only a few weeks unless the federal government provides “a significant amount of money,” says Ann Wilson, the suppliers’ top Washington lobbyist. Suppliers are talking with the U.S. Treasury Department and Congress about the urgent need for aid but have not made a specific, formal request, said Wilson, senior vice president for governmental affairs at the Motor & Equipment Manufacturers Association. Neil De Koker, CEO of the Original Equipment Suppliers Association, calculated the need for aid at about $18.5 billion. He called that a “discussion figure” used when the associations made an 11-page presentation to Treasury last week. Suppliers have suggested three ways for the government to help. One is to provide General Motors and Chrysler LLC extra federal loan money so they can pay suppliers earlier than normal. A second is to guarantee payments due suppliers from the Detroit 3 so the parts makers can use the guarantees to get new bank loans. The third way is to give direct loans to suppliers from the $700 billion originally set aside to rescue financial institutions, a program commonly called TARP. The government could do one of the options, some combination or variation of the options or nothing at all. Wilson said, “We have three weeks” before disruptions in the supply chain could occur. Companies are getting about a quarter of the revenues they normally would because http://www.autonews.com http://www.autonews.com/colliver
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