Automotive News - July 21, 2008 - (Page 38) 38 • JULY 21, 2008 final assembly comment Q2 EARNINGS >> Get the latest second quarter financial reports from automakers, suppliers and dealer groups at www.autonews.com Chattanooga: A good site better I f Volkswagen AG succeeds in competing head-on with Toyota Motor Corp. in the United States, the German automaker will owe a small debt of gratitude to Toyota itself. The Chattanooga, Tenn., plant site where VW will launch its billiondollar return to U.S. manufacturing was greatly improved with Toyota’s help. Toyota considered and rejected building Tundra pickups on the site in 2003. But rather than walk away, Toyota asked a small group of U.S. managers to work with Chattanooga to fix the site’s problems. Dennis Cuneo, now a consultant to Toyota’s affiliated seating supplier, Toyota Boshoku America Inc., at the time was a Toyota senior vice president. He says the problems included EPA infringements, zoning problems with surrounding residential land and inadequate rail service. “We just wanted it to be a good site for somebody — just to be a good corporate citizen,” Cuneo says. Did Toyota get anything out of its efforts? Cuneo confides that Toyota Boshoku itself now intends to make a run at obtaining some business from Volkswagen. Will the big guns pull the trigger? W hen the price of General Motors stock was in free fall, a lot of normally passive investors undoubtedly got nervous and wondered what they could do about it. Some probably even thought about getting organized and revolting against management. Apparently, the stock didn’t sink low enough to start a revolution. For some time, there has been opposition to management from shareholders such as Jim Dollinger, a Buick salesman from Flint, Mich., who has been an EDWARD LAPHAM aggressive critic IS EXECUTIVE of GM EDITOR OF management, AUTOMOTIVE especially CEO NEWS. Rick Wagoner. Dollinger has attended the past couple of GM annual meetings and loudly voiced his discontent. Between annual meetings, he tries to generate support through his Web site, www.generalwatch.com. But without a big shareholder like Kirk Kerkorian to act as champion and lead the charge — and without the support of the institutional investors that influence the board of directors — shareholder movements usually don’t go far. That’s perplexing for smaller investors who have their retirement nest eggs built with auto stocks. Especially hard hit this time are GM employees and retirees who have had their benefits cut and seen the value of their GM stock evaporate. It’s not just a GM problem. One of my neighbors is a Ford retiree who says he invested heavily in Ford because he believed former CEO Jacques Nasser when he said the stock was going to $75 a share. My neighbor wrings his hands and frets about the future of the company. But he’s a loyal Ford man, just like all the other loyal Ford and GM retirees who own stock and have suffered in silence. But at some point, big and small investors may organize and take matters into their own hands. The situation didn’t seem this difficult in the dark days of 1992, when GM’s board replaced CEO Bob Stempel with Jack Smith, whose mission was to stop the losses. I wonder what the trigger point is now. Magazine is raided in Renault espionage case P Midcourse correction in Toyota’s global sales outlook L Hundreds of new Challengers are available, and the numbers are growing. ooking a tad less invincible this year, Toyota will cut its global sales forecast for 2008, according to a Japanese newspaper. Yomiuri Shimbun said Toyota Motor Corp. expects sales of 9.5 million vehicles this year, down from a previous estimate of 9.8 million. The paper quoted unidentified company sources. So will that make the General Motors-Toyota global sales competition a horse race again? Not likely. Worldwide, No. 1 Toyota outsold GM 9,366,000 to 8,902,252 in 2007. Toyota’s revised outlook is mainly because of plunging lighttruck sales in the United States amid soaring fuel prices. But Toyota’s sales are also down in Europe and Japan. A spokesman said the company is reviewing its global target but isn’t ready to provide details. Dodge Challenger: Not quite a sellout W hen Chrysler rolled out the 2008 Dodge Challenger SRT8 muscle car last spring, the company said the limited-production run of about 6,400 cars was virtually sold out. But as it turns out, plenty of Challengers are available, and the numbers are growing. The AutoTrader.com Web site listed 764 Challengers as this issue went to press. That number was up about 100 from a week earlier. Many of them were from dealerships listing them well above the $37,995 sticker price, including shipping. Richard Carpenter, owner of Oroville Motors, a Chrysler-Dodge-Jeep store in Oroville, Calif., says he received a $5,000 deposit from a customer in December on a Challenger SRT8. But the customer changed his mind in April, citing high fuel prices and the bad economy. So Carpenter refunded the deposit. The car is now sitting in Carpenter’s showroom, where it is at least grabbing some attention during a slow summer. But nobody has stepped up to buy the car. ester Renault executives about the company’s newmodel plans, and you get the standard reply: “We don’t talk about future product.” Nor do they want others talking about it or publishing photographs of upcoming models. Indeed, last week French gendarmes questioned a journalist at the enthusiast magazine Auto Plus and confiscated computers and photos as part of an investigation into an industrial espionage complaint filed by Renault. The carmaker filed the complaint in July 2007 after Auto Plus published spy photos of an as-yet unreleased model. Renault won’t say which confidential photos triggered last year’s complaint. The French magazine has published numerous photos and detailed information on the nextgeneration Megane compact, due to be unveiled at the Paris auto show in October. A Renault employee is reportedly under investigation for leaking the confidential photos to the magazine. All employees sign confidentiality agreements prohibiting them from releasing information on new models or discussing them with the press. “When a car is revealed to the press before its launch,” the Renault spokesman said, “it has a real and immediate impact on sales of existing vehicles.” THE FINAL SAY Ya gotta believe: Dealers buy GM stock T he 20 members of General Motors’ national dealer council are putting their money where their mouths are. Last week the dealers purchased more than $1 million worth of GM stock to show their confidence in the embattled automaker. GM’s shares have been in the dumper, plunging from more than $40 last October to less than $10 this month. But the council members say the stock is undervalued. “We wanted to show our confidence in General Motors,” said Duane Paddock, co-chair of the council and owner of Paddock Chevrolet in Kenmore, N.Y. “We firmly believe in GM and that we have the best products to sell. Our fuel economy is the best story in the industry.” Paddock says he called a special dealer conference meeting July 11 to discuss buying the stock. “There wasn’t one person on that call that didn’t agree it was a great idea,” he said. Paddock said it’s also a good investment. He previously had purchased $200,000 in GM stock and added $100,000 last week. Altogether, he said, the group bought about 107,000 shares at a cost of $1,057,000. Indeed, GM’s shares began to rise last week after an upsurge in the overall market. So dealers were already being rewarded for their kind gesture. “ General Motors Vice Chairman Bob Lutz at a July 15 press conference on the company’s plan to weather a tough downturn in the United States ” Lear a year later: Icahn’s offer in hindsight Edward Lapham writes commentaries each week for autonews.com. Read them at autonews.com/edwardlapham. year ago last week, Lear shareholders nixed a buyout bid by billionaire financier Carl Icahn. Big investors said his offer of $37.25 a share undervalued the seating giant. At the time, Richard Pzena, whose investment management firm owned a large stake in Lear, said future earnings made the company worth around $60 a share. Oops. After a year’s bear market, on Tuesday, July 15, Lear’s stock closed at $13.90 — 62 percent below Icahn’s offer and 55 percent below Lear’s close of $34.67 on the day before Icahn made his bid. According to the latest filing, Pzena’s firm today owns 8.3 percent of Lear. At Icahn’s price, that stake would have been worth $237.7 million. Now it’s worth $88.7 million. REBECCA COOK/REUTERS I am getting to be an old veteran at reading about my company being imminently bankrupt. I’ve lived through it twice at Chrysler, and this is my second or third time at General Motors. You’d think at some point the analysts would learn that car companies don’t die that fast. http://www.autonews.com http://www.generalwatch.com http://AutoTrader.com http://autonews.com http://autonews.com/edwardlapham
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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