Automotive News - March 31, 2008 - (Page 1)

MARCH 31, 2008 • 1 82nd year — No. 6301 Axle strike leads GM to alter production plan April Wortham awortham@crain.com Still cutting Because of Detroit 3 cuts, North American vehicle production will drop in the 2nd quarter compared with the same period a year earlier. GM FORD CHRYSLER TOYOTA HONDA NISSAN OTHER TOTAL Lear expands in China SHANGHAI — Lear Corp. is expanding its purchasing, engineering and management operations in China to handle its growing business in Asia and to take on some global purchasing duties. But the expansion does not mean that Lear will produce seats in China and ship them overseas. Company spokeswoman Andrea Puchalsky denied reports circulating in Detroit that 200 engineers in the United States had been asked to move to China. Lear ships seats to assembly plants on a just-in-time basis, and, Puchalsky said, “you cannot supply seats to the U.S. from China. It just doesn’t make sense.” — Alysha Webb In the first quarter, a strike at a key supplier slashed General Motors’ North American vehicle production. Now GM may not have to cut as deeply in the second quarter as it did in the first, according to a forecast by consulting firm CSM Worldwide. As expected, Ford Motor Co. and Chrysler LLC will take an ax to their second-quarter output. But the forecast for other major automakers is mixed. For example, Nissan Motor Co. will raise North American output in the second quarter from a year earlier, af- –5.8% –10.7% –15.7% 1.4% 5.5% 8.1% 2.7% –5.1% Source: CSM Worldwide production forecast, csmauto.com quarter reduction. Its output tumbled 17.6 percent from a year earlier to 864,000 units, CSM estimates. In the second quarter, GM’s production is seen falling 5.8 percent from 2007’s second quarter to 1.06 million. But who knows? Walkout fallout ter first-quarter cuts. But weak pickup sales have Nissan and Toyota Motor Corp. dialing back from production plans laid out earlier in the year. And judging by its production schedules, Honda Motor Co. has decided not to join the automotive recession. CSM expects the North American industry’s total second-quarter vehicle output to drop 5.1 percent from the year-earlier period, to about 3.85 million vehicles. That’s after an estimated 8.3 percent fall in the first quarter to 3.51 million. GM accounted for the deepest firstGM’s first-quarter volumes were whacked by the strike that began Feb. 26 at American Axle & Manufacturing Holdings Inc. The walkout has idled or slowed production at more than two dozen GM plants in North Amersee OUTPUT, Page 41 Hummer adds E85 models Hummer’s first production E85 models will be the 2009 H2 pickup and H2 SUT, a Hummer spokesman said Friday. Hummer made the announcement during the grand opening of a Dallas area dealership’s E85 ethanol station. Classic Chevrolet-Hummer is the first dealer-owned E85 station selling to the public. General Motors plans to offer more than 15 flex-fuel models for the 2009 model year. Hummer has committed to offering biofuel capability on all its vehicles by 2010. Classic Chevrolet-Hummer in Grapevine, Texas, spent more than $500,000 to install nine pumps dedicated to E85, E10 and biodiesel, according to GM. The station is called Classic Clean Fuels and is next to the dealership’s Hummer store. Less than 1 percent of filling stations nationwide offer E85. GM wants to make Classic Clean Fuels the catalyst for other dealerships or alternative locations to sell biofuels. — Jamie LaReau © GM CORP. General Motors hopes to have its plug-in hybrid Chevrolet Volt, shown, ready for sale by 2010. Suddenly, a market for plug-ins Calif. action helps companies with big hybrid programs Richard Truett rtruett@crain.com CORRECTIONS A story on Page 1 of the March 24 issue gave the incorrect number of employees offered a buyout by Ford Motor Co. Ford offered the recent buyout to about 54,000 hourly workers. A story on Page 42 of the March 24 issue gave the wrong date for the death of Jiro Yanase. He died March 13. A story on Page 18 of the March 24 issue mischaracterized the function of the small gasoline-powered engine in the Chevrolet Volt plugin hybrid. The engine will recharge the lithium ion batteries in the electric vehicle but not propel it. A photo of the Opel brothers on Page 28U in some editions of the Jan. 21 issue was incorrectly dated. Automotive News cannot provide the actual photo date. With the stroke of a pen, California regulators have created an instant market — and a sizable one — for plug-in hybrids. Last week, the California Air Resources Board ruled that automakers must sell at least 66,000 plug-in hybrid vehicles from 2012 through 2014. The ultimate sales target for plug-ins could grow even larger if 12 other states that have adopted California’s emissions rules follow suit. That’s big news for the six biggest automakers in California, measured by sales volume. General Motors and Toyota are developing plug-in hybrids for sale around 2010. Headache for Nissan But the mandate could pose a major headache for Nissan, Honda and Chrysler, which have not yet announced plans for plug-in vehicles. General Motors and Toyota are locked in a tight race and hope to have their plug-in hybrids ready by 2010. But that may be a stretch, since battery suppliers have not yet perfected a lithium ion battery that has passed durability and heat tests. The air resources board also ordered the six largest automakers to sell at least 7,500 zero-emission vehicles — either electric cars or fuel cell vehicles — in California from 2012 through 2014. The board previously had called for 25,000 units, leading environmentalists to express disappointment. The American Lung Association was “disappointed” that California reduced its sales mandate, said Bonnie Holmes-Gen, the organization’s senior policy director. These vehicles still face technical hurdles. Fuel cell-powered vehicles remain very costly, and elecsee HYBRIDS, Page 41 Industry expert Ferron joins Automotive News Group J Ferron, a well-known expert on automotive issues, has joined Automotive News as director of strategic development, with responsibility for international expansion of the Automotive News Group. Until retiring last summer as a partner with PricewaterhouseCoopers, Ferron worked more than 25 years on issues affecting the auto industry. At PwC, his efforts spanned from suppliers to vehicle assemblers to retailing. From 1985 to 1990, he was a research associate working with the International Motor Vehicle Program at J Ferron will be responsible for international expansion of the Automotive News Group. the Massachusetts Institute of Technology. The MIT program led to the publication of the landmark study on manufacturing, The Machine that Changed the World. Ferron has been a senior partner at J.D. Power and Associates and managing director of its Tokyo joint venture company. Before that, he was vice president of the National Automobile Dealers Association. Ferron, 60, is a graduate of the U.S. Air Force Academy with a bachelor’s degree in international affairs. He is a lawyer, graduating with a juris doctor degree from The National Law Center of George Washington University and has been awarded an honorary doctor of laws from Northwood University. He and his wife, Lynn, live in suburban Detroit. Crain Communications’ Automotive News is the flagship of a group of automotive publications and online products serving automotive professionals around the world. Other publications are Automotive News Europe, a panEuropean, English-language newspaper; the German-language Automobilwoche, which serves the German automobile industry; and Automotive News China, a suite of online products in both English and Chinese. Ferron will be based in Detroit and report to Automotive News Publisher Keith Crain. c http://csmauto.com

Table of Contents Feed for the Digital Edition of Automotive News - March 31, 2008

Axle strike leads GM to alter production plan Industry expert Ferron joins Automotive News Group Hummer adds E85 models Lear expands in China Ford spills the beans on car seats Concern ... confidence ... curiosity — welcome to America, Tata Expect most Ford-bred executives to stay put Tip for Tata: Let British brands be British brands Dana CEO sees need for growth in Asia Chrysler: Any deal for partner would be done by Cerberus Farley retools Flex marketing strategy Malibu attracts import-minded buyers European purchasing execs to suppliers: Costs must fall Reynolds removes dealership modems New Saturn ads will promote Aura, Vue, Outlook This Spring Hill launch is a fraction of the first one GM works on small global car Hal Riney, Saturn campaign creator, dies Dealer sours on China importer Secret computer lets Nissan planner peek into future XM-Sirius merger: Lower prices, more choices? Key Chrysler product developer resigns Ford's new boss in HR plans no major changes Wagener to replace Pfeiffer as Mercedes design chief It's time to break the glass ceiling Autos don't cause all global warming Toyota plumbed the depths of Scion Customer loyalty is serious business Future bright for Tata brands Dauch sends wrong signals as Axle strike drags Yanase opened Japan to Western cars Fewer dealers, sure, but more brands What if Ahn falls short? Want to inspire Lori Queen? Just say no Hanwha to build GM Powertrain assembly line Toyota enters untapped Korea, home of Hyundai James O'Rourke Jr. Picture This -- March 31st, 2008 Lexus pays dealers for innovations Suppliers to the 2009 Dodge Journey Ricardo center has battery focus Howa USA opens interior parts plant in Kentucky N.Y. show suggests a future of smart powertrains, muscle BMW sees new models as sales saviors Ford contract has unique take on core jobs 6 more PACE-setters in auto innovation Buy-here, pay-here may grow Dealers Mercedes SL: A fresh face — with 1 flaw Ex-Chrysler design chief John Herlitz dead at 65 Future could be bright for Jag, Land Rover Land Rover in good shape, but challenges remain Fuel economy fines loom for Tata As segment shrinks, Chrysler minivan output takes a big dip Mercedes names 27 AMG dealers Continental to cut jobs Cobalt SS price: $22,995 Kia opens Ga. training center Nissan idles Mexico plant Plastech legal bill: $1 million for a month Magna will add 3 plants in Mexico El Camino diehards say Pontiac G8 should have been a Chevy No 2nd chance for Nasser, other Ford alums Buick grabs a name from the past After short list, a short stay for Laymon Lori Queen or Ellery Queen? Daimler's mum on BMW Southern supplier strategy Tracing the Camaro's bloodline Alfa searches for a U.S. factory

Automotive News - March 31, 2008

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