Automotive News - June 23, 2008 - (Page 38)

38 • JUNE 23, 2008 Glut of ’08 Ford F-150s delays launch of ’09s Amy Wilson awilson@crain.com DETROIT — Dealer John Sinclair wasn’t at all surprised to hear that Ford Motor Co. is delaying the introduction of the 2009 F-150 pickup by two months. Sales of the F-series at Dave Sinclair Ford, his St. Louis dealership, dropped by about one-third during the first five months of 2008. Sinclair has 150 pickups on his lot or on their way. “The guy who picks up our trash knew that was going to happen,” Sinclair said of Ford’s announcement last Friday. “We all love the ’09 truck, but nobody’s nutty enough to put ’09s in until we start crashing through this inventory of ’08s.” As of June 1, Ford had 226,000 F-series pickups in stock at dealerships, a 142-day supply. Company executives say the backlog caused the delay of the 2009 model. The re-engineered and restyled F-150 is now scheduled to go on sale in late fall. Ford also announced Friday that it would eliminate two shifts of F-150 production and idle one of its two F-150 plants for most of the third quarter. The 2009 model now is expected to launch on one shift in Au- Ford likely to build ’11 Focus at 2 plants Amy Wilson awilson@crain.com DETROIT — When Ford Motor Co. introduces a European-developed Ford Focus in late 2010, it is likely to produce the U.S. model in two plants. The 2011 Focus probably will be built in Wayne, Mich., and Louisville, Ky., said industry sources familiar with Ford’s product plans. Ford makes the current Focus only at the Wayne factory. The Louisville plant currently makes the Ford Explorer and Mercury Mountaineer SUVs. But small cars are hot, and Ford is selling all the Focuses it can produce. Last Friday, Ford ramped up capacity for the small car for the third time this year. The automaker is adding a third shift to the plant’s paint and body shops. It is speeding up the assembly line, which runs on two shifts already on overtime. With the changes, Ford expects to be able to produce 280,000 units of Focus annually. The Focus had sales of 173,213 in 2007. Focus sales are up 35.7 percent in 2008. “We view the move to smaller, more fuel-efficient vehicles as permanent, and we are responding to cus- tomer demand,” Ford CEO Alan Mulally said a statement Friday. That demand sets up a good prognosis for the 2011 Focus. Ford confirmed Friday that sedan and five-door hatchback versions of the European-developed Focus will go into production in North America in late 2010. The new model is expected to be assembled alongside other small-car variants such as the C-Max crossover, sources said. Ford already sells the C-Max in Europe and could build it in Wayne beginning in 2011, Ford said. The next Focus will arrive just three years after a reengineered and restyled model went on sale in 2007. That quick replacement wasn’t a reaction to $4-a-gallon gasoline. Ford has been planning it for more than a year as part of Mulally’s strategy to share vehicles globally. That 2011 Focus will be largely common with models sold in Europe, South America and Asia. Ford said last week that the global Focus will have “excellent” fuel economy, achieved through new direct-injection engine technology and a new six-speed transmission. c gust at a plant in suburban Kansas City and on two shifts in late September at a plant in Dearborn, Mich. “As gasoline prices average more than $4 a gallon and consumers wor- ry about the weak U.S. economy, we see June industrywide auto sales slowing further and demand for large trucks and SUVs at one of the lowest levels in decades,” Ford CEO Alan Mulally said in a statement. The company slashed planned third-quarter truck production by 65,000 vehicles. It also lowered its industry U.S. light-vehicle sales forecast to 14.4 million to 14.9 million in 2008, down from the 14.7 million to 15.1 million it had predicted on May 22. With sales worsening, Ford also warned that its automotive unit will lose more in 2008 than the $1.1 billion it lost before taxes in 2007. Ford also said it would burn through more cash than the $14 billion to $16 billion it previously projected for the period from 2007 through the end of 2009. Unless the economy improves, it will be difficult for Ford to break even companywide in 2009, officials said. The past several weeks have been a crushing about-face for Ford. After a surprise $100 million profit in the first quarter and saying its turnaround was on track, rising gasoline prices derailed pickup sales and Ford’s progress. “It keeps getting worse,” Credit Suisse analyst Chris Ceraso said in a research note. Big incentives Ford put on its pickups in June are helping reduce the truck backlog, said Sinclair, the St. Louis dealer. Ford is offering employee pricing on the F-series, plus up to $6,000 in cash for returning Ford owners, he said. Said Sinclair: “This is starting to do the job.” c FLOOD Rising rivers put dealers to the test continued from Page 3 Utilities join automakers for plug-in r&d Craig Trudell ctrudell@crain.com of a handful of Iowa dealerships affected by flooding there. Many were lucky enough to avoid heavy flooding, but rising rivers still caused headaches for some, according to the Iowa Automobile Dealers Association. When the rising Mississippi River forced the closure of the bridge between Burlington, Iowa, and Gulf Port, Ill., much of the staff of the Deery Bros., a multibrand dealership in West Burlington, couldn’t get to work. So owner Brad Deery began looking for ways to help his staff cross the Mississippi without driving two or three hours out of their way. He tried to hire an airplane, but local companies said they didn’t have the proper licenses for transporting passengers. Finally, Deery hired a van to drive staffers to and from work. Since then, business has been slow. “There’s a silver lining in everything,” Deery said. “I just haven’t figured out what it is yet.” Drowning their sorrows But at least Deery still had a dealership. By noon on Friday, the 13th, the staff at McGurk Meyers Chrysler was sitting in a bar, wondering what to do next. Carr said and one of his managers decided that they needed to find a new location. They eventually found an empty building in Iowa City about 10 minutes from the old store. The place had a showroom, parking lot and what could be a service area. The previous occupant had manufactured gravestones there. McGurk Meyers Chrysler had a new store. Carr said he and his staff have spent every day since then putting together a new dealership. A guy from the body shop made a sign. They ordered At McGurk Meyers Chrysler, in Coralville, Iowa, about $750,000 worth of vehicles ended up under water, dealer Jeff Carr said. This photo was taken on Wednesday, June 18, after the waters had begun to subside. lifts for the service department. They recorded TV and radio spots advertising the new location. There were plans to bring a nurse in to give tetanus shots to the staffers who had been wading through dirty water. Staffers took turns watching the old store in case looters came back. Many of the basic tools for running a dealership weren’t available. Jeff Covington, the dealership’s general sales manager, said they finally managed to get a printer running on Thursday. “Every couple hours, something new happens,” Covington said. As of Thursday afternoon, June 19, McGurk Meyers had sold four cars. The dealership was planning to start servicing cars on Friday. Carr expects business to pick up as Iowans file insurance claims to replace flood-damaged vehicles. The 41-year-old dealer, who has owned the store with partners for 1½ years, said he’s not yet sure how much the flood will cost. “I can’t say enough about our entire staff, right down to our detail guys,” Covington said. “We’ve got a couple of people in the lobby talking to some salespeople right now; hopefully we’ll sell a couple more.” c DETROIT — Two electric utilities have joined a Detroit 3 partnership, promising to accelerate automakers’ r&d efforts to commercialize plug-in hybrid technologies. DTE Energy, of Detroit, and Southern California Edison, of Los Angeles, said last week that they are joining the U.S. Council for Automotive Research, the organization for collaborative research involving Chrysler LLC, Ford Motor Co. and General Motors. The U.S. Department of Energy provides as much as half of the consortium’s budget. “This is a cross-fertilization of industries that didn’t exist even 36 months ago,” said Alexander Karsner, assistant secretary of energy efficiency and renewable energy. Karsner said the Energy Department is working on a yearly budget of nearly $100 million to develop plug-in vehicle technology. That’s up from $1.4 million just two years ago. Up to $42 billion in government loans are available to companies commercializing technology that “avoids, sequesters or reduces” greenhouse gases, Karsner said. “We expect the automotive industry to be a major recipient of that,” he said. The consortium made the announcement at the Automotive Hall of Fame in suburban Detroit, where the Detroit automakers showed their upcoming plug-in vehicles. GM said the plug-in version of its Saturn Vue crossover may be produced in 2010. Ford showed its plug-in Edge crossover, and Chrysler displayed the Jeep Renegade concept. c

Table of Contents Feed for the Digital Edition of Automotive News - June 23, 2008

TRW exec: We're in the 'sweet spot' for growth 'Like house of cards,' used trucks fall Detroit 3 a big drag in global supplier race Ford rethinks big-block V-8 plan Looters and broken levees Plastech's Brown stands to get $9.25 million Lawmakers: Redo roof rule Hunt takes job at Gallup Lawmakers urge roof rule rewrite Webinar offers tips on going green Lawmakers: Redo roof rule Webasto sees more demand for retractable hard tops Why small isn't always big To move metal, hire an Ironman Chevy limits ZR1 Corvette to top dealers Lithium ion battery is key to hybrid growth With Russia hot, Ford will boost Europe production BMW exec: We can grow in U.S. The man who put the wind in GM's sales GM's parts ordering comes down to Earth More Fits for U.S. in fall GM: Volt buyers deserve tax credit Mercedes exec seeks more exclusive technology from suppliers Bosch, Mahle execs to lead turbo venture Supplier personnel ZF moves steering operations in Ky. Slowing Volvo, Saab add to Sweden's industry woes Feds: Drivers don't have to hang up phones Magna eyes new growth strategy: Powertrain-driveline modules Alleged sales scam snares Ohio dealers GM center troubleshoots IT in plants around the world Senator: Plants have capacity for plug-ins Lots of talk but little to show Going green pays off The Detroit 3 are smart to cut sales to fleets Drop Mercury? No; Ford needs it Awareness isn't GM's problem Leno was off base in bashing U.S. cars Roofs, rollovers and reckless driving Big-truck sales fall 15.2% in May Serra deal reflects GM channel strategy No. 2 vehicle hauler to go out of business Chinese company's car looks a lot like a Mini Honda taps star power for fuel cell car Dealer wanted media attention — and got it Dealers European sales dip 7.8% in May Merger gives Hughes Telematics a cash boost Mexico sales bounce back in April Suzuki dealers test system to turn Web leads into sales Bosch-Samsung venture to make lithium batteries Hyundai plans Elantra hybrid for Korea in '09 RV sales drop 8.5% in April Japan’s best-kept secret Utilities join automakers for plug-in r&d Ford likely to build '11 Focus at 2 plants Glut of '08 Ford F-150s delays launch of '09s '09 Porsche SUV prices rise Ford calls off Ohio plant sale Ford idles Mich. truck plant CarMax net earnings decline Dodge Journeys recalled 2009 Chrysler hybrid SUVs start at $45,340 GOP: Climate bills would make $4 gas look cheap EVs on eBay: It's all the rage In terms of market value, the General is a buck private Sign of the times: Hummer store to be used-car lot Bob Stempel's legacy is the future Flying 1 series? It's BMW's joke Dealer hurt in sky-dive navigates the road to recovery Opel car recognizes signs; BMW plans similar system JCI, Magna unit buy main parts of Plastech The little engines that could Suppliers to the 2008 Dodge Viper

Automotive News - June 23, 2008

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