Automotive News - April 14, 2008 - (Page 1)

autonews.com ® APRIL 14, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Dealership jobs hit 8-year low Donna Harris dharris@crain.com Unemployed Dealership office jobs are rising despite an overall employment decline. 2007 2003 Dealers slash costs ➤ 3 ship technicians also has declined but would increase if dealers could fill vacancies. “There is opportunity for expansion in service and parts,” he told Automotive News. Dealerships have increased office and general-labor employment because of growing customer service demands, Taylor said. Many dealerships now handle vehicle tags and titles on site. Showrooms are larger and more ornate, requiring greater upkeep. And dealerships provide more amenities to customers. Said Taylor: “Somebody has to make sure that the coffee is fresh.” c Employment at new-vehicle dealerships sank this year to the lowest level since 2000, the U.S. Labor Department reports. In February, the most recent month for which data are available, franchised dealerships employed 1,096,100 U.S. workers — virtually the same as in February 2000. Dealership employment peaked at 1,151,000 in September 2005, the department says. Paul Taylor, chief economist of the National Automobile Dealers Association, said shrinking numbers of dealerships, lower new-vehicle sales and improved dealership technology are Sales Service technicians Supervisors, office employees, other Source: NADA 229,100 257,200 284,100 254,800 264,200 282,100 GM hybrid SUVs off to a slow start GM sold only 655 of its new Chevrolet Tahoe and GMC Yukon hybrids in the first quarter. But the company says the slow start is nothing to worry about. | PAGE 8 | among the causes. Dealerships have less need for salespeople as sales drop and reliance on the Internet and information technology grows, Taylor said. At the same time, he said, the Detroit 3 are contracting and consolidating their retail networks. Since 2003, according to an Auto- motive News census, the number of U.S. dealerships has fallen by more than 800, to about 21,522. Two of the nation’s largest dealership groups, AutoNation Inc. and Asbury Automotive Group, say that in some markets, they are not replacing salespeople who leave. Taylor said the number of dealer- Small suppliers suffer ➤ 43 GM is the wild card in axle war David Barkholz dbarkholz@crain.com Toyota, Subaru plan sports car in 2011 Toyota’s long-anticipated sports car will arrive in 2011 as a moderately priced rear-drive model developed jointly with Subaru and built in Japan. | PAGE 6 | DETROIT — American Axle is sticking with its demand to cut the wages of its striking UAW workers in half — and why shouldn’t it? Standing reluctantly in the news wings is GenerA N A L Y S I S al Motors. The former owner of American Axle’s operations may have little choice but to broker a deal. Within a week, GM will run out of American Axle-made parts for its hotselling Chevrolet Malibu and Pontiac G6 sedans. Then GM will begin to feel real pain from a 2-month-old strike at American Axle that has done little to date except trim some of GM’s fat inventories of pickups and SUVs. “GM has to be concerned about getting a settlement fairly quickly,” says auto consultant Craig Fitzgerald, of Plante & Moran PLLC in suburban Detroit. “GM is producing Malibus full-out already. If they lose any production, they probably won’t be able to recoup those sales.” That pain might persuade GM to help “buy down” American Axle workers with one-time bonuses in exchange for permanent wage cuts. Or the carmaker might allow many of the 3,650 striking workers to transfer to GM and keep their automaker wages. American Axle was created in 1994 from plants jettisoned by GM. see STRIKE, Page 43 Honda may restore dealer ad funding After a successful test run in California, Honda may resume funding dealership advertising groups nationwide. | PAGE 4 | ERNIE BLOCK Missouri dealer Paul Broome says high-pressure providers of service contracts have victimized his customers. Service contracts: Hard-sell tactics plague dealers, customers Donna Harris dharris@crain.com On the Web This week at www.autonews.com: Monday: Winners of the 2008 Automotive News PACE Awards will be announced in Detroit. Thursday: Chrysler LLC CEO Bob Nardelli keynotes the SAE World Congress annual banquet. All week: Live coverage of the SAE World Congress in Detroit. All week: Full access to the premium news and data resources of www.autonews.com to anyone who logs in April 14-20. Paul Broome, a Cadillac dealer in Independence, Mo., hears from about 10 customers a month who complain about his dealership’s high-pressure sales of service contracts. But Broome has nothing to do with the disputed contracts or their marketing. Instead, some peddlers of thirdparty contracts tap vehicle registration data to reach customers of dealerships such as Broome’s by telephone, e-mail and direct mail. Their sales pitch includes the claim — often false — that the customers’ factory warranties have expired or are about to do so. They assert or imply — also false- NEWSPAPER ly — that they represent a dealership or automaker. And in some cases, vendors allegedly charged consumers’ credit cards for thousands of dollars without authorization. The boiler-room promotions are “giving the industry a black eye,” says Broome, who chairs the Missouri Automobile Dealers Association. State regulators are stepping in. Missouri Attorney General Jay Nixon is suing six independent service consee WARRANTY, Page 42 http://www.autonews.com http://www.autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - April 14, 2008

Dealership jobs hit 8-year low GM is the wild card in axle war Service contracts: Hard-sell tactics plague dealers, customers TV auto ads shift to online, mobile venues At seminar, marketing execs to discuss new ways to reach customers Better get to know the Nano — it's set to change the world Veteran Detroit 3 dealer: 'The future is quite bleak' Poll: Dealers scrounge for cuts Locals closer to GM strike Scion xB price rises $100 Valeo CEO: No breakup Tata Nano changes low-cost development Hyundai tailors TV, Web ads for Hispanics Study: Ads focused on vehicle qualities won on Oscar night Post-Celine, Chrysler ad guru seeks right note Chrysler's quest for quality lured Nissan exec Betts Search starts for in-vehicle alcohol detectors After S. Calif. success, Honda may fund ad groups Computer images gain ground in TV ads Web TV offers automakers new ad, sales options BMW: X6 will bring brand new buyers Diana T. Kurylko Chrysler fields 'dream' ads Nissan seeks dealerships for trucks Honda will export Alabama-built Pilots to Russia Toyota, Subaru work on 'affordable' sports car Cadillac's ad agency savors the sweet life Some stores may not sell Chrysler hybrids GM hybrids get off to a slow start in first quarter Lexus adds a personal touch to pamper owners, prospects What they're buying — and what they're not The age of fuel innovation is here Approaches to r&d vary Nano brings credibility to Indian engineering Honda must revisit online dealer sales of service pacts Chrysler got it right Mandates, markets and buyer demand For Detroit, some things never change Buick: As Chicago goes, so goes the nation Auto industry has lost a good man Accentuate the positive Ex-Porsche CEO: Cayenne spiced up sales Green programs shape battle for engineering grads Tata rewards suppliers with ties to India Bill aims to set minimum sound levels for vehicles Industry lobbyists step up emissions fight Seeking wider market, Nissan equips sports car for snow New chief of SAE has D.C. skills China and GM's answer to Nano — sort of $2,500 car is Ratan Tata's personal quest NADA offers training in risky credit Donna Harris Deal's goal: Widen appeal of dent-repair coverage Title committee created Vehicle loan delinquencies rise from 2007 Suppliers to the 2009 Tata Nano Odd China combo: Fuel sippers, SUVs Pontiac Vibe: A sporty hauler with Toyota touches Dealers J.D. Power III named tracking company partner Toyota will buy back rusted Tacomas 100,000 Flex sales a year? Farley: 'Absolutely' Ford wants word-of-mouth campaign Small suppliers feel the pain of axle strike Plastech tries to sell 2 units TRW plant will build Ford gears Toyota plans 2nd India plant Dodge launch goes digital Toyota, GM recall 660,000 vehicles for window flaws Lear announces white-collar layoffs March output drops 23.6% New Ford ads tout quality improvements Tata dealers must be handy with a wrench Can the Greens slow down the autobahn? Racy scandal for race exec Echoes from the grave: Olds still has cachet The Final Say

Automotive News - April 14, 2008

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