Automotive News - June 2, 2008 - (Page 53)

JUNE 2, 2008 • 53 GM: 19,000 take buyouts DETROIT — General Motors said last week that about 19,000 of its 74,000 U.S. hourly employees have taken the latest round of buyouts. Most will leave by July 1. GM said that whenever possible, current employees will fill any openings, in compliance with the national contract reached with the UAW last fall. New employees will be hired at the entry-level wages and benefits negotiated with the union. GENESIS Dealer merger plan tricky for Chrysler continued from Page 3 mands to sell additional vehicles.” At press time, negotiations were ongoing to find a way to reopen the store. Said Landry: “We’re pulling for Bob to open his doors for sale and continue to sell Chrysler, Dodge and Jeep for us. He’s a great dealer.” Good deal The flip side of Wilson’s situation is that of two dealers in the Minneapolis-St. Paul area. Denny Hecker and Jerry Golinvaux were among the first to wrap up a Genesis deal. After several months of talks, the two agreed that Golinvaux’s Roseville Chrysler-Jeep dealership would buy Denny Hecker’s Rosedale Dodge, which was across the street in the Twin Cities suburb of Roseville. “I had just invested over $1 million adding to my showroom and updating the whole front end of the dealership, so it made more sense for me to have the whole thing,” Golinvaux says. After starting discussions in January, before Genesis was even announced, the two dealers reached an agreement April 1. Chrysler approved it within seven days. Since combining, Golinvaux’s dealership has increased service hours to handle all the Dodge business. “Sales of service and parts operations,” he says, “have increased over 70 percent.” c Back woes sideline Nardelli DETROIT — Chrysler LLC CEO Bob Nardelli injured his back last week, causing him to cancel travel plans. He had been scheduled to meet with Chrysler sales department staffers in California on Wednesday and deliver the keynote speech at the Mackinac Policy Conference on Mackinac Island, Mich., on Friday. Lori McTavish, head of Chrysler corporate and internal communications, declined to say how Nardelli injured his back or when he might resume a normal travel schedule. His last public appearance was Chrysler CEO Bob Nardelli: A back injury forced him to cancel a staff meeting and a speech last week. May 23 in Norfolk, Va., where he delivered a $100,000 check and a restored World War II Jeep to the General Douglas MacArthur Foundation. The foundation offers training to military officers and supports the MacArthur Memorial in Norfolk. — Bradford Wernle Ford to lay off salaried staff DETROIT — Ford Motor Co. will lay off an undisclosed number of salaried employees and hopes to complete the reductions by Aug. 1, a spokesman told Automotive News last week. The Detroit News reported that Ford will cut 10 to 12 percent of its salaried work force, or more than 2,000 employees. Said Ford spokesman Mark Truby: “As soon as we finalize some of these details, we’re going to tell our employees as quickly as we can.” STEEL Soaring prices hit automakers, suppliers continued from Page 1 Up, up and away The price of hot dipped galvanized steel, the sort used on car body panels, has shot up this year. Here is the dollar price per 100 pounds. $60 50 40 30 20 10 0 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 Source: American Metal Market William Kozyra will become CEO of British supplier TI Automotive. Kozyra leaves Continental DETROIT — William Kozyra quit last week as North American CEO of Continental AG to become CEO of TI Automotive. Samir Salman, head of Continental’s chassis and safety division, will become North American CEO. Jeff Klei, account manager for General Motors, will become North American president. Kozyra, 50, will oversee the British supplier’s nearly $3 billion global business, about 70 percent of which is outside North America. while the average pickup or SUV contained nearly 3,000 pounds. To cover the rising cost of raw materials, some suppliers are demanding price increases from the automakers. ArvinMeritor CEO Chip McClure has announced plans to pass higher steel prices along to his customers as a surcharge starting June 1. Can McClure make his price increase stick? An ArvinMeritor spokeswoman said only, “We are having those discussions.” Asked whether Dana would follow ArvinMeritor’s example and raise prices, Devine said he has no choice. “The size of the steel increase is so unprecedented that we have to go after “pricing relief — and we are.” used on exterior panels, according to the trade publication Steel Business Briefing. And on May 29, Honda Motor Co. CEO Takeo Fukui confirmed that a U.S. steel maker had demanded a substantial price increase. He declined to identify the company but said the auto industry as a whole is in a bind. “We are in a weak position,” he told reporters in Tokyo last week. Add 20%? In North America, steel contract prices are a closely guarded secret. But steel makers appear ready to demand increases of 20 percent or more, says one steel industry insider. Even GM — which traditionally has played steel suppliers against each other — appears vulnerable. GM used to negotiate with nine steel makers. Now it bargains with just four major integrated steel mills. The stakes are especially high for GM because it buys steel for its suppliers, too. The carmaker resells to suppliers much of its annual purchase of 7 million tons. Half of GM’s North American suppliers who use steel participate in the resale program. GM insists that it won’t accept surcharges. “We expect suppliers to honor their contracts,” says GM spokeswoman Deborah Silverman. Ford Motor and Chrysler LLC declined to discuss their steel purchases. What if automakers refuse to pay the surcharge? Steel makers are talking tough. “We will not be in a position to assure continuity of supply,” says one steel industry insider. “Why should I sell to GM at a lower price when I can sell steel to the energy market and other strong markets?” c Hans Greimel contributed to this report Accelerating aluminum The spot market price of aluminum has been rising steadily for several years. Here is the dollar price per metric ton. $3,000 2,500 2,000 1,500 1,000 500 0 05/98 08/99 11/00 03/02 06/03 09/04 11/05 02/07 05/08 Source: AlixPartners, London Metal Exchange, American Metal Market Global inflation Steel is part of a wider trend of rising raw material costs. The price of platinum — used in catalytic converters — is up more than 70 percent. Aluminum prices have jumped to $2,750 a ton, up $500 over the past year or so. “The automakers are between a rock and a hard place,” says Pete Peterson, a steel industry consultant and former director of automotive marketing with U.S. Steel Corp. Steel makers are raising prices because their own raw materials have grown more expensive, Peterson says. Big mining companies around the world have raised spot prices for coal, iron ore, manganese and other key steel-making ingredients. Strong global steel demand is contributing to the price surge. So is a lack Dauch sons move up, out DETROIT — American Axle & Manufacturing Holdings Inc. last week named David Dauch president and COO. Dauch, 44, was on the team that recently negotiated a new UAW contract that included labor concessions. Separately, after a role in a global expansion that included responsibility for 17 factories, Rick Dauch will leave the company after 13 years. Rick Dauch, 47, will lead the private-equity-owned Acument Global Technologies Inc., of suburban Detroit, a supplier of automotive and aerospace fasteners. The two are sons of American Axle CEO Richard E. Dauch. of competition from foreign producers, who are disinclined to export to the United States because of the weak dollar. Overseas carmakers are not immune. Herbert Diess, BMW AG’s pur- chasing chief, is proposing a costsharing approach to ease the burden of higher steel prices. In Japan, Toyota Motor Corp. accepted price increases last month of more than 35 percent for steel sheet HYBRIDS Battery pack failures hurt sales at GM continued from Page 8 Wilhite jumps to Jumpstart SAN FRANCISCO — Steve Wilhite, a marketing executive who has worked at Hyundai, Volkswagen and Nissan, joined the online-advertising company Jumpstart Automotive Media Inc. as its new president. Wilhite, 55, quit as Hyundai Motor America’s COO in September. pipeline,” GM spokesman Tom Wilkinson said. “It’s not an insignificant number, but it’s also part of what happens with a brand-new technology.” Repeated calls and e-mails to Cobasys were unreturned. But a person who answered the phone at the company’s Springboro, Ohio, plant said production had resumed. And the GM source said the automaker is now getting the batteries it ordered. The mild hybrid system sells for a premium of less than $2,000. Unlike a full hybrid, the mild system doesn’t propel the vehicle on electric power alone. Instead, it acts as a stop-start system and provides a boost when the vehicle is accelerating. Saturn suffers Sales of the 2008 Vue Green Line suffered because of the battery shortage, Saturn spokesman Steve Janisse said. Through April, retail sales of the Vue Green Line were just 326 units, compared with 2,683 retail sales during the same period a year ago, he said. Part of the difference is that GM had put incentives on the 2007 hybrids, which were at the end of the previous generation. Now, Saturn’s interim goal while ramping back up is about 250 retail Vue Green Line sales a month, Janisse said. Through May 27, he said, it had sold 222 units retail in May. “We’re feeling we’re closer to where we want to be,” Janisse said. Saturn sold only 69 retail units of the 2008 Aura Green Line through April because of the battery problem, Janisse said. Saturn launched the Aura Green Line in March 2007 and sold 48 units at retail through April 2007. The battery problems also likely hurt sales of the 2008 Malibu Hybrid, Chevrolet spokeswoman Nancy Libby said. In April, GM

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Automotive News - June 2, 2008 Gas prices fuel industry's new era Chrysler faces tricky dealer mergers Honda may crank out more Civics in N.A. Mercedes will move into Chrysler Pacifica studio Ford to offer hatchback version of Fiesta Prestige Automotive sells stores but keeps Black Enterprise top spot Dealership marketers take to text messaging Senate to hear personal pleas on roof crush rule Magazine: Chrysler, Fiat are talking Former Fla. dealer gets jail for bilking bank That guy Alfred had possibilities Ford will make next Mustang look smaller Pontiac subcompact may come to U.S. GM: Battery glitch cuts hybrid sales Porsche exec: CAFE 'will not change our nature' Japanese rivals race for lithium batteries Jatco boosts CVT capacity in Mexico for N.A. vehicles Mercury deserves a better chance Rising gas prices have changed the U.S. market Marketing and sales: Context and content Mexico's Nemak grows beyond North America Buyers didn't quit GM; GM quit on its buyers Brand perceptions change slowly Bloggers are journalists, too Nice HQ, Nissan, but where's Nobe? Chrysler's Chernoby: Growing up gearhead Picture this Mitsubishi hopes new gearbox widens Evo's appeal Openlane gets funds Obituaries Survey: Going green can get your auto ad noticed Inrix: Router can reduce traffic delays Mazda6 gets own platform for U.S. ... sort of Mazda6 set to take on mid-sized sedan heavyweights Troubled or not, the United States still beckons What's next? More transplant models headed this way Exports help as Mitsubishi sorts things out Irma Elder: 'This is one of the toughest times we have had' Fitzgerald: Dealers, consumers need alliance Can Bertone design a comeback? Family-owned business struggles for survival Some design houses fall on tough times Hughes: Not a subscriber? No problem American Axle lines up new non-U.S. business GM think tank works to boost service business Toyota offers gas card as tire incentive VW turns to common software to develop products Continental's Calif. office targets Asian carmakers ZF sees chassis, axle opportunities in N.A. Flex: A new Ford image ... or just over the top? Ford targeted Flex interior quiet, ride Ex-dealership managers say firings were over religion Dealers Genesis in Toledo: It's a long story Back woes sideline Nardelli GM: 19,000 take buyouts Panama to head Nissan Mexicana Wilhite jumps to Jumpstart Dauch sons move up, out Kozyra leaves Continental Ford to lay off salaried staff More small cars to arrive in 2009-10 Even on used market, big trucks go begging Auto advertisers adopt mpg mantra Industry to motorists: We're here to help Diesel prices hit suppliers' Mexico sites Can Camry catch F series? Leno's words of wisdom for automakers Nissan's carbon credits ease global warming guilt Automotive CEOs' pay pales next to peers' Year of the Small Car can't come too soon Foreign suppliers adding capacity in Southeast From cows to kimchi: Making Alabama sweet home for Koreans After light-truck push, cars are king again Mexican suppliers expect sales record in '08

Automotive News - June 2, 2008

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