Automotive News - July 21, 2008 - (Page 12) 12 • JULY 21, 2008 opinion GM may survive; to thrive, it needs hot products General Motors’ plan to maintain liquidity through 2009 by cutting costs, selling assets and borrowing more money may help the company survive until 2010. But it will not transform GM into a lean, strong, successful automaker. To become competitive, GM has to overhaul its product portfolio so it can be profitable with You don’t create a much smaller slice of a much different market. hot products Last week’s announcement was a dreadfully all-too-common experiby cutting ence. CEO Rick Wagoner gave GM employees and then the media the spending. bad news about cuts in production, benefits, employment and capital spending. Since 1992, when the GM board ousted engineer Bob Stempel in favor of financial guy Jack Smith to get a CEO who could stanch the flood of red ink, the company has faced successive crises by trying to cost-cut its way back to profitability. But like the medieval practice of trying to bleed a patient back to health, the cost-cutting approach has failed. For GM, excessive costs are part of a larger problem: lost market share and lost revenue caused by a product portfolio that often has been woefully out of sync with the market. GM needs to change its portfolio. That will require not just eliminating work on big truck platforms but also injecting megadoses of talent and cash into new programs for fuelefficient cars. The actions Wagoner outlined last week barely address that challenge. Truck spending is down, but car spending remains at status-quo levels. The GM product development team, headed by Vice Chairman Bob Lutz, has created some vehicles, such as the Chevrolet Malibu and Cadillac CTS, that are as good as anything else in their respective classes. And glimpses of a few products that are in the pipeline, such as the Chevrolet Cruze and Buick Invicta, are encouraging. But they won’t be enough or come soon enough. Consumers demand more. The U.S. auto market is moving toward the hypercompetitive European experience, in which a handful of companies have similar market shares and success is determined by which company has the hottest new products. And you don’t create hot products by cutting spending. GM must develop a winning culture based on a radically transformed product portfolio that builds revenue. If it does not, there will be more announcements like last week’s. Last week, General Motors announced severe measures to generate an additional $15 billion of working capital. The measures will be tough and very painful for a lot of people. And, once again, the company plans to sell some of its assets to generate cash. Whenever a company starts to sell off assets, you understand how serious the situation is. The day of the announcement, GM’s stock price slipped to less than $9 a share before recovering slightly. Last year at this time, GM stock traded in the mid-$30s. What a dramatic loss of investor confidence in such a short time. When Ford Motor sold Jaguar and Land Rover and considered selling Volvo, it was a powerful indicator that Ford needed additional cash. When you sell assets and mortgage the company, the situation has become DAILY AUTO NEWS >> You can get the news you need every day. Go to www.autonews.com/signup and sign up for our daily e-mail newsletter. GM just bought some time serious. And you hope the existing product program will be so powerful that it increases revenue. But the problem is that whatever your product program was just a few months ago, it has become outdated in today’s new economic environment. The rapid rise of energy costs — especially the price of gasoline and diesel fuel — has made all future product plans obsolete overnight. For GM, that may mean scrapping a lot of additional investment that already had been spent on pickups, SUVs and some large cars. GM will have to come up with a lot more money to turn its product plans upside down overnight, which is how quickly American consumers changed their automotive preferences. The challenge is that there are no It will take a nimble product plan to swing back and forth as consumers shift from large to small and maybe back again. guarantees American consumers won’t change their buying habits once again. If fuel prices stabilize, we could see swings as some consumers go back to pickups, SUVs and large cars. It will take a nimble product plan to swing back and forth as consumers shift from large to small and maybe back again. The challenges the Detroit 3 face are daunting. GM has bought some time through the end of next year. That’s not much in the auto business. Let’s hope things improve by then. percent and eliminate visible smoke. Diesel hybrids have many advantages, but clean diesel technology also offers many advantages. DAVID F. MERRION Brighton, Mich. The writer is retired. He was executive vice president of engineering at Detroit Diesel Corp. Green can be cool; it’s up to the maker To the Editor: Green cars can be cool (“Green cars: So sensible and so uncool,” Comment, June 16). All the producers have to do is create SG (Super Green), rather than SS models. Hood scoops and fancy stripes don’t add any weight, but they add a lot of pizzazz to a vehicle. For years, manufacturers have offered their economy engines only in strippeddown models. Adding a leather interior and some color doesn’t hurt weight. Let’s get some good-looking, lightweight wheels. Let’s start advertising mileage in a big way, just like a new SS model. Manufacturers should start thinking about ride quality in a 2,800-pound car. We don’t need tires that help us turn into our driveways at 30 mph. We need tires that roll easily. We need tire companies to design tires that look good (wide and low profile) that roll with ease. We need to forget all the auto reporters who, I swear, are in their second childhood. They think like teenagers when it comes to vehicle performance. Many of them profess that a car without a manual transmission is no good, yet I would bet a lot of money that 90 percent of their personal vehicles have automatic transmissions. In his column, Jesse Snyder mentions Volvo as a green car. A safe car, yes, but green? I don’t know why a BMW or Audi is any cooler than a new Caddy or a Chrysler. It’s just a lot of hype. Goes fast and turns great — that is not see LETTERS, Page 14 THE WEEKLY NEWSPAPER OF THE INDUSTRY Established in 1925, published every Monday by Crain Communications Inc. Why don’t we drive diesels in the U.S.? To the Editor: Having recently returned from a trip to Italy, I feel compelled to bring up diesel technology. My rental vehicle was a Peugeot 2.0liter TDi minivan. While it was inferior to our American-made vans in terms of legroom and cupholders, the gas mileage was unbelievable. We traveled 80 to 100 mph and got almost 40 mpg. The vehicle was quiet and didn’t smoke a bit. Is the U.S. market missing the boat? It seemed that about one of every three vehicles on the highway there was a diesel of some sort. North America has very few diesels on the road because of tough emissions rules. Well, that might be a little shortsighted. By the way, for all those consumers complaining about gas at $4 a gallon, we paid about $9 a gallon for diesel fuel. No one over there complains about fuel costs, but they do drive smaller vehicles and embrace diesel technology. Why don’t we? PETE ZORNIGER Chairman & CEO Frank Z Chevrolet Dayton, Ohio Keith E. Crain, Publisher and Editor-in-Chief Peter Brown, Associate Publisher and Editorial Director David Sedgwick, Editor Edward Lapham, Executive Editor HOW TO REACH US Web site: www.autonews.com Editorial staff autonews@crain.com Phone: 313-446-0361 Fax: 313-446-0383 Circulation Advertising subs@crain.com rgreer@crain.com Phone: 888-446-1422 Phone: 313-446-6050 Fax: 313-446-6777 Fax: 313-446-8030 Editorial data/research To locate information that has been published in Automotive News, call 313-446-1662. Customer service To start or renew a subscription or to report an address change or a delivery problem, e-mail subs@crain.com or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). AUTOMOTIVE NEWS (ISSN 0005-1551) is published weekly at 1155 Gratiot Ave., Detroit, MI 48207-2997. Periodicals postage is paid at Detroit, MI and at additional mailing offices. Postmaster: Send address changes to AUTOMOTIVE NEWS, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. Canadian Post International Publications Mail Product (Canadian Distribution) Sales Agreement #40012850, GST#136760444. Canadian return address: 2-7496 Bath Road, Mississauga, ON L4T 1L2 Printed in the U.S.A. No black smoke from today’s diesels To the Editor: The article “GM’s Two Mode hybrid system scores with transit agencies” was informative and pointed out the advantages of a diesel hybrid vehicle (in some editions, June 16). Why did you need to mention the elimination of “the black poof of sooty diesel smoke” to help sell the advantages of the hybrid? Diesels don’t smoke anymore. Since January 2007, all diesels use filters that reduce particulates by more than 90 http://www.autonews.com/signup http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - July 21, 2008 Automotive News - July 21, 2008 Gray sky, not blue; store values wilt Sour Chery: Bricklin suit claims corruption Germans in U.S. eye VW work S.C. warranty insurer faces shutdown LaNeve: Make do with less marketing money Tesla CAFE: 244 mpg Lincoln's big crossover Schaeffler goes shopping: Can supplier land Continental? Dealers cut, shift their ad spending Truck for the times? Oklahoma pickup gets 37 mpg For Chrysler sensations, glory days are gone Kuzak: Redone Fords must have best fuel economy The Fisher brothers: Quite a body of work Kazamai concept: Mazda's design heard round the world 3 years later, Mitsubishi, UAW resume contract talks Big-pickup production will plunge Nason's NHTSA: More rules, fewer penalties A vote for the Volt Hyundai: Genesis gives brand a new beginning in luxury GM may survive; to thrive, it needs hot products GM just bought some time Green can be cool; it's up to the maker Why don't we drive diesels in the U.S.? Hooray! Joint effort stops airbag deaths All-Stars: Look beyond top brass Leno was right about U.S. cars Toyota recalls Siennas, disputes safety issue This time, the industry embraces connectivity Telematics connects with consumers Telematics gets no respect — the word, that is Tapping mapping for an extra eye on the road Drivers can check CO2 'tire print' Pay As You Drive insurance tracks cars to trim costs Subscribers, sponsors may fund telematics services Big-truck sales fall 14% in June Continental plant to make brakes Lear to shut Mo. seating plant Modine shifts production to Ky. Linamar buys Visteon plant Picture this Lexus revamps 'Taste' marketing extravaganzas Suzuki hires new auto ad agency Fisker turns to Finnish firm to make first hybrids American Suzuki gets new president Canada sales slip 5.6% in June Dealers A big fuel saver: Easy-rolling tires (but watch braking) MPG now! Automakers race to boost efficiency Products — not entire brands — likely to be ditched Pared ad budget is back on the chopping block GM goal: Big small-car profits Congress mulls arbitration bill 2009 Mazda6 price: $19,220 Copart files antitrust suit Denton's out, Leuliette's in as Dura CEO June output falls 13.8% Dodge Challenger: Not quite a sellout Magazine is raided in Renault espionage case Ya gotta believe: Dealers buy GM stock States of the auto industry Will the big guns pull the trigger? Lear a year later: Icahn's offer in hindsight Midcourse correction in Toyota's global sales outlook Chattanooga: A good site better Automotive News - July 21, 2008 Automotive News - July 21, 2008 - (Page Intro) Automotive News - July 21, 2008 - Gray sky, not blue; store values wilt (Page 1) Automotive News - July 21, 2008 - Gray sky, not blue; store values wilt (Page 2) Automotive News - July 21, 2008 - Lincoln's big crossover (Page 3) Automotive News - July 21, 2008 - Truck for the times? Oklahoma pickup gets 37 mpg (Page 4) Automotive News - July 21, 2008 - Truck for the times? Oklahoma pickup gets 37 mpg (Page 5) Automotive News - July 21, 2008 - 3 years later, Mitsubishi, UAW resume contract talks (Page 6) Automotive News - July 21, 2008 - 3 years later, Mitsubishi, UAW resume contract talks (Page 7) Automotive News - July 21, 2008 - A vote for the Volt (Page 8) Automotive News - July 21, 2008 - A vote for the Volt (Page 9) Automotive News - July 21, 2008 - Hyundai: Genesis gives brand a new beginning in luxury (Page 10) Automotive News - July 21, 2008 - Hyundai: Genesis gives brand a new beginning in luxury (Page 11) Automotive News - July 21, 2008 - Why don't we drive diesels in the U.S.? (Page 12) Automotive News - July 21, 2008 - Why don't we drive diesels in the U.S.? (Page 13) Automotive News - July 21, 2008 - Leno was right about U.S. cars (Page 14) Automotive News - July 21, 2008 - Leno was right about U.S. cars (Page 15) Automotive News - July 21, 2008 - Toyota recalls Siennas, disputes safety issue (Page 16) Automotive News - July 21, 2008 - Toyota recalls Siennas, disputes safety issue (Page GM1) Automotive News - July 21, 2008 - Toyota recalls Siennas, disputes safety issue (Page GM2) Automotive News - July 21, 2008 - Telematics connects with consumers (Page 17) Automotive News - July 21, 2008 - Telematics connects with consumers (Page 18) Automotive News - July 21, 2008 - Telematics gets no respect — the word, that is (Page 19) Automotive News - July 21, 2008 - Tapping mapping for an extra eye on the road (Page 20) Automotive News - July 21, 2008 - Pay As You Drive insurance tracks cars to trim costs (Page 20A) Automotive News - July 21, 2008 - Pay As You Drive insurance tracks cars to trim costs (Page 20B) Automotive News - July 21, 2008 - Pay As You Drive insurance tracks cars to trim costs (Page 20C) Automotive News - July 21, 2008 - Subscribers, sponsors may fund telematics services (Page 20D) Automotive News - July 21, 2008 - Subscribers, sponsors may fund telematics services (Page 21) Automotive News - July 21, 2008 - Linamar buys Visteon plant (Page 22) Automotive News - July 21, 2008 - Picture this (Page 23) Automotive News - July 21, 2008 - Fisker turns to Finnish firm to make first hybrids (Page 24) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 25) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 26) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 27) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 28) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 29) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 30) Automotive News - July 21, 2008 - Canada sales slip 5.6% in June (Page 31) Automotive News - July 21, 2008 - Dealers (Page 32) Automotive News - July 21, 2008 - MPG now! Automakers race to boost efficiency (Page 33) Automotive News - July 21, 2008 - GM goal: Big small-car profits (Page 34) Automotive News - July 21, 2008 - Denton's out, Leuliette's in as Dura CEO (Page 35) Automotive News - July 21, 2008 - Denton's out, Leuliette's in as Dura CEO (Page 36) Automotive News - July 21, 2008 - June output falls 13.8% (Page 37) Automotive News - July 21, 2008 - Chattanooga: A good site better (Page 38) Automotive News - July 21, 2008 - Chattanooga: A good site better (Page 39) Automotive News - July 21, 2008 - Chattanooga: A good site better (Page 40)
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