Automotive News - June 9, 2008 - (Page 6)

6 • JUNE 9, 2008 Harbour Report: Chrysler, Toyota most efficient David Barkholz dbarkholz@crain.com Most productive Here are North America’s most efficient automakers in 2007, based on total hours needed at assembly, stamping, engine and transmission plants. Fewer is better. TOTAL AUTOMAKER HOURS PERCENT CHANGE Top plants The most efficient assembly plants in North America in 2007 *HOURS FACTORY VEHICLES PERCENT PER VEHICLE CHANGE DETROIT — Chrysler LLC ran the most efficient assembly plant in North America last year and tied with Toyota Motor Corp. as the most productive vehicle manufacturer, according to this year’s Harbour Report on factory productivity. Chrysler’s Toledo Supplier Park in Ohio was North America’s most productive assembly plant. The factory needed just 13.57 labor hours per vehicle to build Jeep Wranglers. At the Supplier Park, Kuka Group manages the body shop, Magna Steyr runs the paint shop and Hyundai Mobis does chassis assemblies. General Motors’ Oshawa No. 1 plant 1. Chrysler Toledo Supplier Park Jeep Wrangler 13.57 –38% 2. GM Oshawa No. 1 Chevrolet Impala, 15.18 –7% Monte Carlo 3. GM Oshawa No. 2 Buick LaCrosse, Allure; 16.17 3% Pontiac Grand Prix *A drop in hours per vehicle represents an improvement in productivity. Source: Harbour Report in Oshawa, Ontario, was second. It used 15.18 labor hours to build each Chevrolet Impala or Monte Carlo. Chrysler cut 7.7 percent from its total manufacturing labor hours to finish in a dead heat with Toyota as North America’s most efficient automaker. Each needed 30.37 labor hours per vehicle at its assembly, stamping, engine and transmission operations. Chrysler had four of North America’s 10 most efficient assembly plants. The others: Belvidere, Ill. (Dodge Caliber, Jeep Compass and Patriot); Jefferson Avenue in Detroit (Jeep Grand Cherokee and Commander); and Brampton, Ontario (Chrysler 300, 300C and Dodge Charger). Chrysler’s Global Engine Manufacturing Alliance plant in Dundee, Mich., was the most productive engine plant. Toyota’s Georgetown complex in Kentucky operated the most efficient stamping plant. GM’s Toledo transmission plant was the most productive transmission factory. This is the first year that consulting firm Oliver Wyman has published the Harbour Report. It bought Harbour Consulting, of suburban Detroit, in December. c Chrysler Toyota Honda GM Nissan Ford Hyundai 30.37 30.37 31.34 32.29 33.00 33.88 35.10 –7.7% 2.5% –0.9% –0.2% 10.1% –3.7% N/A* * This was the first year that Hyundai’s Montgomery, Ala., assembly plant participated in the report. Source: Harbour Report GM’s big SUVs may get lighter Tahoe, Yukon will ‘fade away in their present form’ Jamie LaReau jlareau@crain.com DETROIT — General Motors may shift its two big SUVs, the Chevrolet Tahoe and GMC Yukon, to a lighter, more fuel-efficient platform, said a company source. The Tahoe and Yukon — traditionally two of GM’s most profitable vehicles — eventually will “fade away in their present form,” said the source. The future of other big SUVs such as the Chevrolet Suburban and Cadillac Escalade was unclear. It is also possible that the two vehicles will be produced in limited The Chevrolet Tahoe, above, and the GMC Yukon may be built on a more fuel-efficient platform. numbers using alternative powertrains to offset the impact of high gasoline prices, dealers say. GM has a low-volume Two Mode hybrid variant of the Tahoe and Yukon SUVs that it launched this year. Asked whether GM would increase production of the Two Mode, GM COO Fritz Henderson did not outline the company’s plans. “We have a lot of options,” Hen- derson told analysts and reporters during a conference call on Tuesday, June 3. “We will have more hybrids in those technologies and other applications, but at this point we have nothing to announce.” Timing for changes to the Yukon and Tahoe is uncertain. GM launched the current generation of the full-sized SUVs in 2006. Dealers say large families likely will always demand such vehicles. Dealers foresee automakers developing more fuel-efficient powertrains within the next decade. “They’re dictated by demand,” says Chris Hurd, owner of Hurd Auto Mall in suburban Providence, R.I. “There’s definitely a market for (the big SUVs). If gas goes from $3 to $4, it’s not enough to keep people from driving them.” c The ad push is under way for the 2009 Lincoln MKS. Shipments to dealers begin this week. Ford spends big on MKS ad launch Amy Wilson awilson@crain.com WASHINGTON — Ford Motor Co. may spend as much to introduce the Lincoln MKS as it typically does to launch an F-series pickup, a Lincoln marketing executive said. Lincoln began advertising the 2009 MKS last week. The large sedan, available in front- or all-wheel drive, is expected to begin shipping to dealers this week. “We are spending a lot of money,” said Pei-Wen Hsu, marketing manager for the MKS. “This is a critical launch for the Lincoln brand.” Ford spent more than $100 million to introduce the redesigned 2004 F-150 pickup; it plans a similar budget to market the 2009 F-150. The MKS budget may not be quite that high during the next six months, Hsu said, but she declined to share the amount. The dramatic shift in industry sales away from trucks underscores the need to get the word out about Ford Motor’s new cars. “In the past, trucks had all the attention. But nowadays, a sedan launch is critical,” Hsu said. During the first five months of 2008, Ford’s F-series sales fell 18.7 percent. As sales of pickups drop, Ford must replace their profit contribution by maximizing sales of other high-margin vehicles, such as Lincoln sedans. Still, the MKS will have a lot less volume to carry a marketing spend worthy of the F series. Ford sold 690,589 F-series pickups in 2007. Lincoln aims to sell about 19,000 MKS sedans by year end, Hsu said. With a full year of output, Lincoln targets sales of around 36,000 in 2009. c Spring intros can be dicey PHOTOS © GM CORP. Amy Wilson awilson@crain.com GM finance whiz changed the industry Does the name Donaldson Brown ring a bell? If so, you’re probably a bean counter at General Motors. In a fledgling industry that venerated mechanics and supersalesmen, Donaldson Brown was the first great finance executive. Brown was treasurer of E.I. duPont de Nemours & Co. before joining GM in 1920 at the request of Pierre DuPont, who was president and chairman of GM. Brown started as finance vice president, became chairman of the powerful Finance Committee in 1929 and GM vice chairman in 1937. He retired from GM in 1945. His big contribution was the standard-volume production theory, which changed the industry. Simply put, it meant: Set your break-even production/sales point and load all your fixed costs onto those vehicles. If unit sales exceed that magic number, your profit soars. GM’s profit did. For the rest of the story, read Automotive News’ GM 100th anniversary edition, How General Motors Changed the World, on Sept. 15. For information about the special edition, go to www.autonews.com/gm100. WASHINGTON — The 2008 Ford Taurus proved how tricky it can be to introduce a vehicle in the first half of the calendar year, before the model year sell-down. Taurus sales fell last summer when Ford Motor Co. cut advertising in favor of a campaign promoting the model year clearance sale. Ford is walking the same tightrope this year with two new vehicles: the 2009 Ford Flex crossover and the 2009 Lincoln MKS sedan. Both are expected to go on sale this month, just before Ford’s 2008 model clearance begins. The Flex and MKS are crucial launches for Ford Motor. With truck sales falling rapidly, the automaker needs consumers to quickly embrace its new cars and crossovers. Company marketers are trying to establish an identity for the new nameplates before the sell-down. Ads for the MKS sedan began last week and run heavily through June, even though dealer inventory will be limited this month. Lincoln will scale back commercials during July and August, but the brand plans to avoid the problems of the 2008 Taurus. “We don’t want to go dark, that’s for sure,” says Brett Wheatley, general marketing manager of Lincoln Mercury. He said some national ads will continue in July and August, and dealers will continue to advertise the MKS at local and regional levels. c Sales of the 2009 Ford Flex are expected start this month. http://www.autonews.com/gm100

Table of Contents Feed for the Digital Edition of Automotive News - June 9, 2008

Automotive News - June 9, 2008 Hummer Bummer: A death sentence? New F-150, Ram in peril as big pickups collapse Japanese can add small cars faster than Detroit 3 Battery shortage hurts hybrid sales 2 key overseas staffers move to Automotive News in the U.S. Toyota may add Camry to Indiana truck plant Mazda extends warranty on RX-8 rotary engine CAW to consider strike against GM Porsche's new 911 GM plans big ad push for its big hybrid SUVs Chrysler cuts fees to outside service firms 5% Toyota considering 'Made in U.S.A.' Prius Congress, Bush square off over rollover suits GM finance whiz changed the industry GM's big SUVs may get lighter Harbour Report: Chrysler, Toyota most efficient Spring intros can be dicey Ford spends big on MKS ad launch Media buyer for GM cuts 25 jobs Sources: GM poised to buy Cobasys GM dealer program rebounds Mazda updates the RX-8 New Maxima is a tad smaller — but more buff Congress must balance safety, mpg concerns Is the gas crisis real or just temporary? What about poor driving? There's no substitute for safe driving Lack of regulation foils safety laws Sticker law cleaned up a pricing mess Lithia to sell outlets, delay used-car stores Nielsen likes to step off the beaten path GM union local strives to pull parts jobs in-house JCI will open Ga. plant to supply Kia Dealers: Be open about credit problems Finance venture has $1 billion Picture this Personnel Dealers BMW purchasing chief 'looking for waste' Nissan Mexicana gets new chief Ford Flex output begins Hyundai Genesis: $33,000 Ford buys more from minorities Audi's U.S. chief: Brand can handle high gas prices May in Detroit: Scary, not merry Infiniti FX starts at $41,765 Lincoln: 8,600 MKS orders Plastics supplier sees growth Jenkins gets Aston Martin post Smith is CEO of Jaguar, Land Rover Kremlin watching, Chrysler style Toyota breathing down GM's neck on monthly U.S. sales PR chief Steve Harris: At GM through '08 Small-car surge is a replay of 1979 Auto execs would benefit from some store experience Mini's mixed results: Sales soar, quality stumbles Nice car — so what's the ppmpg? Volt's good PR got struck by lightning

Automotive News - June 9, 2008

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