Automotive News - March 17, 2008 - (Page 35)

MARCH 17, 2008 • 35 Odell is named COO at Ford of Europe DETROIT — On Friday, March 14, Ford Motor Co. named Stephen Odell COO of Ford of Europe. Odell, 53, will report to John Fleming, Ford of Europe CEO. Odell will assume responsibility for Ford of Europe’s product development, manufacturing, purchasing, plus marketing, sales and service operations. Ingvar Sviggum, 62, will replace Odell as Ford of Europe’s vice president of marketing, sales and service. Sviggum will report to Odell. Both appointments take effect April 1. So who’s running the show at Chamco? Diana T. Kurylko dkurylko@crain.com Boardroom turmoil at Chamco Auto has left two competing groups claiming to control the company. At a March 3 board meeting, a majority of directors voted to oust key management figures, including Chairman Bill Pollack and consultant E. Michael Daspin, from the wouldbe importer of Chinese vehicles. These directors and some executives set up a new office in Bridgewater, N.J. They are suing the ousted execu- tives, alleging fraud, mismanagement and diversion of corporate funds. But Pollack says the original management team remains in charge of the company and is continuing to operate out of offices in Parsippany, N.J. In court filings, the original management team says it controls a majority of company stock and has fired the dissident shareholders. Pollack has put “terminated” designations by nine of the breakaway exec- utives’ names on the original company Web site, www.chamcoauto.com. The site says a “dissident group of officers and directors conspired to defraud Chamco Auto and ZX Auto NA,” an affiliated company. The group operating in Bridgewater is headed by Mario Ferla, who the group says is chairman and CEO. The Bridgewater group has posted copies of both its lawsuit and a second lawsuit against the original company by West Coast distributor Scott Thomason, of San Francisco, on what it calls Chamco’s real Web site: www.chamcoautomotive.com. The Bridgewater group says it is operating Chamco’s research center in California. At the center, former specialty-car manufacturer Steve Saleen, a Chamco investor and board member, continues to homologate a Chinese-made pickup and SUV for sale in the United States. The group promises a realistic business plan for Chamco within 90 days and claims the support of 30 dealers. c CHAMCO Factions fight for control of company continued from Page 1 BMW’s new sales boss MUNICH — Ian Robertson will replace Stefan Krause as BMW AG’s head of sales and marketing, the automaker said on Thursday, March 13. The change takes effect immediately. Krause, 45, will leave BMW to become Deutsche Bank’s CFO. Robertson, 49, will remain CEO of BMW susidiary Rolls-Royce Motor Cars Ltd. until a successor is found. Chrysler sells plant to Fiat DETROIT — Chrysler LLC said it has sold its Brazil engine plant to Fiat Powertrain Technologies. Fiat purchased 314 acres, production lines, equipment and licenses to produce the plant’s current range of 1.4- and 1.6-liter four-cylinder engines. Fiat said the plant will produce a range of mid-sized gasoline and flex-fuel engines, according to Reuters. The deal was valued at about $127.5 million, according to Reuters. was hired by Chamco last year to lead its effort to import trucks to North America in 2009. Ferla soon found himself at odds with Daspin, who, Ferla contends, controlled the company through his wife, a major shareholder. Daspin was convicted of fraud in the 1970s. On March 3, Ferla, Saleen and six other Chamco executives and investors sued Daspin and his allies within Chamco. The lawsuit was filed in the Superior Court of New Jersey, where Chamco is based. The lawsuit, which was first reported on autonews.com, alleges Daspin and his allies siphoned money out of the company. The lawsuit describes a proposed Mexican land deal that would have netted Daspin and his allies nearly $7 million. The lawsuit also alleges Daspin and his associates pocketed 25 percent of each Chamco executive’s first-year salary, plus 10 percent of equity investment in Chamco. Among the defendants are former Chamco Chairman Bill Pollack and Daspin’s nephew Ron Stella, owner of Capital Corp., an investment company that profited from a services contract with Chamco. The lawsuit seeks damages for alleged fraud and seeks to prevent defendants from issuing any more stock or using company funds. Last week Pollack told Automotive News that the defendants will fight the allegations and contended that he and his allies still run the company. Money spigot Ferla’s suit alleges Daspin and his allies employed a number of strategies to siphon money out of Chamco. Among the allegations in his lawsuit: Daspin and Stella were supposed to receive monthly retainers of $80,000 but routinely withdrew $100,000 or more. In February alone, the two defendants withdrew a combined $1.1 million in commissions. Daspin issued Chamco stock without authorization to friends, family and associates. Daspin and Stella received millions through a consulting contract Chamco negotiated with Capital Corp., which Daspin and Stella founded. Capital Corp. received 10 percent of all equity investments in Chamco, plus 25 percent of the first-year salaries of each Chamco executive. Daspin and his associates hoped to enrich themselves through a Mexican land deal. They planned to borrow $500,000 from Chamco to buy land for an assembly plant. They allegedly planned to sell the land to the Mexican government for up to $7 million. Daspin and his allies would repay Chamco’s loan and pocket the rest. Mexico, in turn, would donate the land to Chamco. The lawsuit says Daspin’s group “would make millions of dollars without risking any of their own money.” The deal was never consummated. A hearing on the suit is scheduled for Wednesday, March 19. Ambitious plans Chamco had boasted that it would be the first company to sell Chinesebuilt trucks in the United States. To fund its ambitious plans, the Parsippany, N.J., company raised millions of dollars from 37 dealers. And Chamco required each newly hired executive to invest up to $500,000 in company stock. The company’s Chinese partner — a small manufacturer called Hebei Zhongxing Automobile Co. — origi- nally was supposed to start delivering SUVs and pickups to dealers by the middle of this year. But it’s unclear whether Hebei, which sold only 36,800 vehicles last year, can deliver the goods. Chamco repeatedly has delayed its launch date, and the company has aborted plans to produce trucks in Mexico. Riled by Chamco’s chaotic power struggle, the company’s biggest distributor now wants to bail out. Scott Thomason, a multifranchise dealer based in San Francisco, had agreed to sell Chamco’s trucks in 35 West Coast stores. He had invested $6 million and promised an additional $4 million when the trucks are delivered. On March 3, Thomason filed a lawsuit against Daspin, Pollack and Chamco alleging fraud and deception. He is demanding the return of his money. Ferla appears determined to lead a turnaround. He and fellow plaintiffs made their feelings clear in a March 12 court filing: “It is the Ferla plaintiffs that seek to operate Chamco as a legitimate and successful enterprise going forward, and not the Daspin defendants who have treated Chamco as their personal piggy bank.” c Federal-Mogul reports gains DETROIT — Federal-Mogul Corp. moved into the black in 2007 after a 2006 loss. The suburban Detroit supplier said it posted net income of $1.41 billion in 2007, compared with a loss of $549.6 million in 2006. Revenue rose 9.3 percent to $6.91 billion. FederalMogul’s 2007 earnings report was its first as a reorganized company. On Dec. 27, it emerged from more than six years of Chapter 11 reorganization. FINANCING The allure of leases: They cut payments continued from Page 1 Leapin’ leases New-vehicle leasing for both luxury and mass-market brands continues to grow in popularity among U.S. customers. cent in January and 20 percent in 2007. American Honda Finance Corp. CEO Stephen Smith says his company is promoting leasing of new Honda and Acura vehicles. Honda brand’s lease penetration rate rose from 15.6 percent in 2006 to 18.2 percent last year and 23.1 percent in January and February, Power says. Conant notes that Honda Finance is offering a three-year lease on a 2008 Honda Civic LX for $1,999 down and $199 a month. A buyer with similar credit who sought to finance the same car for the same term with the same down payment would pay $509 a month, Conant says. LEASES AS % OF RETAIL CONTRACTS 60 45 30 15 0 GM seeks Plastech tooling DETROIT — General Motors has asked a U.S. bankruptcy judge for permission to seize tooling from Plastech Engineered Products Inc. GM said it wants access to the tooling in the event that the troubled supplier fails to deliver parts to GM. GM said “the limited amount and duration” of Plastech’s interim financing was a source of uncertainty about Plastech’s continued ability to deliver plastic parts to the automaker, according to U.S. Bankruptcy Court documents filed in Detroit on Wednesday, March 12. GM also said Plastech told the automaker it plans to close four plants that make parts for GM. '03 BMW '04 '05 '07 Mazda All nameplates Source: J.D. Power and Associates grams on loans, leasing suffers,” says Power analyst Tom Libby. “When manufacturers back off these programs, they are better able to put money in leasing.” In recent years, industry analysts say, leasing has become more attractive because of reduced factory sales incentives and the growing incidence of “upside-down” owners who owe more on their vehicles than the cars and trucks are worth. Dealer Conant says leasing may make sense for an upside-down customer. Citing the Honda Civic lease deal as an example, he says a hypothetical customer could roll $150 or $200 a month of negative equity from a previous vehicle loan into the lease and still have an affordable monthly payment. “At the end of 36 months, they http://www.chamcoauto.com http://www.chamcoautomotive.com http://autonews.com

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Leases grow as alternative to long loans Toyota dealers balk at upgrades Up for grabs: China importer Testing Chevy's Camaro Escalade first vehicle to get full LED headlamps Hoops fans take a shot at China Toyota will cut Tundra, Sequoia production F-150's risk-reward strategy: Ramp up before the revamp As UAW, American Axle talk, CEO Dauch in Fla. Ex-GM purchasing executive indicted Court allows higher Plastech credit line Saab sticker prices rise as sales fall; will U.S.-built 9-7X offset losses? VW plant capacity in U.S.: 250,000 units Bad cruise control switch haunts Ford Continental plans to bring r&d in-house Rieter expects to increase its global footprint Stadler: Audi considers U.S. plant Another General charges into electric cars Toyota sees its first checkered flag as sign NASCAR's paying off A pickup may figure in Kia's future Analysts: Lampert no threat to AutoNation More likely to be spent to keep suppliers alive in '08 2 suppliers plan Alabama plants UAW seeks job guarantees to end American Axle strike Revolving door continues to spin at Nissan GM, top marketers to share research Electric power steering is grabbing the wheel Delphi completes sale of interiors unit to Renco Mercedes again is true-luxury king How electric power steering works It's time for dealer-factory collaboration Ford must close stores but remain open to diversity The small print Here's a question for Obama, Clinton Didn't you ever hear of a halo? Hurray for affordable performance cars Politics can age a car overnight Good for planet, good for GM What 'scientific consensus'? Lutz may be right but said it wrong Lutz had the courage to tell the truth Big Apple isn't very green 23 finalists in running for PACE honors Canada sales up 14.5% in Feb. RV shipments drop 7.1% in Jan. Wagoner: No sure thing on state air rules Conquest sales, Asia growth boost ADP Brockman: Reynolds focuses on service OEConnection links to ADP Geneva goings-on Judge: Dealer suit over transfer of GM franchise can proceed Honda will build Ridgeline in Alabama So who's running the show at Chamco? GM seeks Plastech tooling Federal-Mogul reports gains Chrysler sells plant to Fiat BMW's new sales boss Odell is named COO at Ford of Europe Strike dents GM truck output Tony Stewart blows a gasket Illingworth leaving — and staying with — Toyota A note to eager auto execs: Invaders sometimes get icy reception in Russia Hush, hush: Baby Nason on board For rent: Ford's PAG palace on the West Coast Chrysler cuts Calif. studio

Automotive News - March 17, 2008

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