Automotive News - January 21, 2008 - (Page 54)

54 • JANUARY 21, 2008 final assembly comment WORLD CONGRESS >> Get live coverage of the Automotive News World Congress at www.autonews.com/worldcong. Tata’s achievement: Redefining ‘cheap’ T ata’s introduction of a $2,500 car makes U.S. cost-cutters look like fat guys doing the limbo. They may be working hard, but they’re still a long way from the floor. Nick Reilly, president of General Motors’ Asian operations, says the unveiling of the Tata Nano this month may come to be seen as an event that redefined a low-cost car. “The significance may not be the car itself,” Reilly says. “It has made people say, ‘What is the bottom price of a car?’ Up until now, that has been Rehab for designers: A change can do you good s I walked around the AWhatshowauto industryDetroit auto last week, it struck me: the really needs is a designer protection program. Here’s how it would work: 1. A designer gets in a jam by doing too many funky designs. Time to intervene. 2. Cut the designer’s hair, give him or her a new name and relocate the designer someplace out west — like, say, Gallup, N.M. — EDWARD LAPHAM so a mob of irate IS EXECUTIVE philistines can’t EDITOR OF find him or her. AUTOMOTIVE 3. Find said NEWS. designer a job. It doesn’t have to be a great job. Maybe at the local Shop ‘n’ Save, where he or she can design pointof-purchase displays for soda pop and paper towels and stuff. This will keep the designer humble, while also keeping his or her hand close to the design business. It would make sense for designers who have squandered or depleted their mojo. For example, if the Pontiac Aztek had been a sincere design effort and not a cobbled-together, corporatemandated project, you would definitely have put the designer in the protection program, especially if there were other such disasters in his or her portfolio. But you’ll have to be selective. You don’t need to do it for every designer who pens a bad design. After all, which one hasn’t? Besides, the secret society of auto designers already has a rehab program for members who have misplaced their mojo. It’s a two-step program: Tough love, and move the poor wretch to another brand. It seems to work. Take Gerry McGovern, for example. I never really understood what he was trying to do with the Lincoln brand. Even the Mercury Messenger concept that drew some praise at the 2003 Detroit auto show seemed discordant to my untrained eye. McGovern cut his hair, went to Ford of Europe and then on to Land Rover. This year, McGovern returned to show off his stunning Land Rover LRX concept. It’s obvious that his rehab worked. He’s back in top form. It would have been a mistake to send him to Gallup. But a change of scenery can make all the difference in the world. ■ Edward Lapham writes five commentaries each week for autonews.com. You can read them at autonews.com/edwardlapham. Tata’s tiny $2,500 Nano: A lesson in shaving pounds and pennies about $4,500.” GM can learn from the way Indian companies cut costs, says Reilly. They outsource much of their development cost and urge suppliers to be inventive in shaving pounds and pennies. It helps, of course, if you’re building cars in a country with dirtcheap wages and few impediments from the government and the market about workplace safety, pollution and vehicle performance. “Tata would not be able to produce that same car somewhere else” for the same money, Reilly says. The low price forced compromises in the product that GM would be unwilling to make, Reilly says. Still, he says, Tata’s achievement will spark a reassessment of a realistic rock-bottom price. Says Reilly: “We aren’t interested in trying to produce a car for $2,500 because of the compromises, but we’ve got to think about getting a little bit closer to it.” What’s a more realistic target? He says $3,500 to $4,000 is “a much more interesting prospect.” The Fisker Karma: Green technology in a sexy package Purves confirms it: The end is near S Good Karma: Mean, green, fighting machine W ho says you can’t be sexy, green and a little stealthy at the same time? Henrik Fisker says his Fisker Karma luxury plug-in hybrid is based on a vehicle that his partner — Quantum Fuel Systems Technologies, of suburban Los Angeles — developed for the Army’s mysterious Delta Force. The military vehicle had a “stealth mode” for silent running. In the Karma, stealth means the car can go 50 miles on its lithium ion batteries alone after an overnight charging. The batteries are supplemented by a four-cylinder gasoline engine. Rather than trying to sell his car to the environmentally conscious undercover operative, Fisker is going after people with green in their pockets and on their minds. He’s promoting the $80,000 vehicle as a sexy alternative to “little awkward green cars.” “They can be sexier than any car on the road,” Fisker said last week at the debut of the Karma at the Detroit auto show. Fisker is looking for dealers and hopes to sell the car in the United States next year. FINAL SAY GM considers U.S.-made Astra T he tanking dollar is making the build-’em-where-you-sell-’em philosophy look particularly good for European vehicles sold in the United States. The latest example: General Motors may build the nextgeneration Saturn Astra in the United States. Today’s Astra — a rebadged version of the Opel Astra — is built in Belgium. But Fritz Henderson, GM’s CFO, says that could change. “We generally like to build where we sell,” Henderson said last week at the Detroit auto show. “With the The Saturn Astra: Built in Belgium, and expensive to sell in the U.S. euro being at $1.49, it reminds me of why that is a really good idea.” When might it happen? Well, we reported in October that GM would phase out the current version of the Astra by 2010. ixty may be the new 40 for baby boomers. But if you work for BMW, it’s the end of the line. Tom Purves, president of BMW of North America, confirmed last week at the Detroit auto Tom Purves: show that this Calling it quits will be his last year on the job. He turns 60 — BMW’s mandatory age — on Nov. 25, but says the timing of his departure remains fuzzy and he may wind up staying through the year end. Purves has led BMW’s North American sales subsidiary since 1999. He joined BMW in 1985 as sales director of the British operation. He also ran Land Rover, Mini MG and Rover before his arrival in the United States. BMW subsequently sold Land Rover and Rover. Purves, a stylish New York transplant, favors elegant Savile Row suits and sharp Hermes ties, and loves a day on the golf course. His suave, unflappable demeanor led one automotive journalist to dub him “Never-nervous Purves.” BMW is mum about a successor, but there’s plenty of speculation. The two most likely candidates: Jack Pitney, 45, vice president of marketing. He’s a Purves protege who launched Mini here. Jim McDowell, 55, chief of the Mini brand in the United States. McDowell previously was chief of marketing at BMW. GM bumps buyout total to 46,000 G “ Ford nailed the F-150. I’m confident it will remain the best-selling vehicle in America. Dodge went a different way with the Ram. You’ve got two great new pickup trucks. Unfortunately, it’s not going to make any difference, because nobody’s buying. The economy trumps product. — Mike Jackson, AutoNation CEO, at the Detroit auto show ” eneral Motors has launched another round of job cuts and now is offering buyouts to 46,000 hourly workers. GM is working with the UAW on Phase 2 of its job-cutting program, which starts next month. Phase 1 began this month, targeting workers in the Jobs Bank, Service Parts Operations and other areas. Those who choose to participate in Phase 1 will leave in March. GM detailed the second phase of cuts in a presentation to analysts last week, saying it wants to cut annual U.S. labor costs by an additional $5 billion by 2011. The bulk of that will come from implementing the 2007 GM-UAW contract. A total of 46,000 employees are eligible for retirement, but GM has not stated a target. Those who take the buyout in Phase 2 would leave in April. GM also said it’s looking at more plant cutbacks. It said its goal is 100 percent U.S. plant utilization and said in a statement that “based on current U.S. industry volume levels, additional capacity actions would be required in vehicle assembly, stamping and powertrain facilities.” GM projects U.S. sales this year in the low 16 million range, hurt by high fuel costs and low consumer confidence. GM expects the U.S. auto industry to return to selling about 17.5 million vehicles annually by 2010. GM has made “major strides” toward its global goal of lowering automotive structural costs to 25 percent of revenue by 2010, CEO Rick Wagoner said. Structural costs are below 30 percent now, down from 34 percent in 2005. GM expects structural costs as a percentage of revenue to be cut further after 2010 to a goal of 23 percent by 2012. http://www.autonews.com/worldcong http://autonews.com http://autonews.com/edwardlapham

Table of Contents Feed for the Digital Edition of Automotive News - January 21, 2008

Campi will move fast to buy global Ford rolls out new F series — but will it stay No. 1? GM will push metro megastores BMW: We may need a 'green' brand Competition claims traditions German summit Toyota: We have enough plants for now Chinese pitch innovation, not just price Mercedes in, Cadillac out as sponsor of Masters golf tournament Auto show walkaround: Chasing the YIPS around Detroit New Acura TSX will get a diesel Toyota: We'll crack 35-mpg CAFE before 2020 Audi predicts 1 million global sales in 2008 Toyota crosses over into tricky segment LETTER TO THE EDITOR: Digital edition is a 'quantum leap' KEITH CRAIN: Here they come, ready or not EDITORIAL: Incentives war isn't the answer to sales downturn LETTER TO THE EDITOR: Toyota over Chevy? Don’t be too sure DIGITAL EDITION: You did your homework Chrysler concepts show brand tweaks Chrysler: 'Hemi is not powertrain of the future' Some of what we heard at the Detroit auto show Corvette has a future — but maybe a lighter, greener one Nissan exec: Cube is coming to America Subaru relies on new Forester Farley: Ford must groom the market Ford still funds Jag, Land Rover product development Ford will probably develop its new rwd cars in the U.S. Volvo considers North American production Good design: Solving problems, making a statement Horbury wants a more aerodynamic F-150 Hyundai upgrades next Sonata's interior M-B could build C class in U.S. VW hints at vehicles for new N.A. plant Customer demand for CTS sedans strains production capabilities at Cadillac GM to test ZR1 carbon fiber weight savings Honda Pilot has more room, power Indiana plant will boost Honda's flexibility Zetsche sees 20% diesel mix for Mercedes-Benz GM hopes to have E-Flex test vehicles ready by June GM to increase Enclave output Cadillac aims high with Provoq Pontiac to launch G8 marketing in March Big-truck sales fall 43.5% in Dec. Personnel Buckle up for a rocky '08, economists warn Canada sales up 2.4% in '07 Gioia: Ford hybrids will be profitable by year end American Honda opens workplace diversity office Dealers From CDs to Sync: Auto industry races to adapt in-car IT trends Microsoft exec sees a car as 'another room in the house' China's Geely plans plant in Mexico Chrysler exec: China exporters need time Murtaugh: Nissan deal won't affect Chrysler-Chery venture Strike by writers makes TV iffy for auto marketers Super Bowl auto advertisers get pre-game jitters Final Say GM bumps buyout total to 46,000 GM considers U.S.-made Astra Good Karma: Mean, green, fighting machine Purves confirms it: The end is near Rehab for designers: A change can do you good Tata's achievement: Redefining 'cheap' Fans remember auto commercials with sports themes Which brand is stronger — Scion or Prius? Engine advances bring cleaner emissions a step closer Suppliers to the 2008 Ford Focus Varable compression ratio makes a comeback Change the engine's stroke Integrate components to boost efficiency Reduce the size of the engine Eliminate the cams and count the savings ZF expects surge in new orders American Axle's rising son may be another Dauch Honda taps Web for workers Trelleborg unit adds tech center Kia restricts hiring at Ga. plant to Web applicants Magna pursues Ogihara Supplier personnel Age of intelligent transportation is getting closer Plastic spoiler saves weight Automotive News' cartoonist looks at 2007 8 will enter European Automotive Hall of Fame Pininfarina lifted family business to new heights Merciless cost cutter Calvet rescued PSA Opel boys turned bicycle venture into automaker Giacosa fathered the Fiat 500 JCI to supply batteries to Chinese automakers Automakers will spend more on digital ads Ford snares star role in return of 'Knight Rider' GM Certified markets online to Hispanics Writers' strike could benefit auto marketers

Automotive News - January 21, 2008

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