Automotive News - June 30, 2008 - (Page 3)

JUNE 30, 2008 • 3 82nd year — No. 6314 Chinese automaker cuts ties to Chamco Diana T. Kurylko dkurylko@crain.com J.D. Power: U.S. sales plunged in June DETROIT — J.D. Power and Associates predicts the June seasonally adjusted annual sales rate will plunge to 12.5 million vehicles, down from 16.3 million last June. That’s far below what other analysts have projected for June sales. The Wall Street Journal on Friday cited a leaked report from J.D. Power that says June U.S. sales of light vehicles will plunge 15.4 percent compared with last June. — Andrew Grossman Tired of dealing with the New Jersey company tied up in a tangle of lawsuits, Chinese automaker Hebei Zhongxing Automobile Co. has terminated its contract to supply Chamco Auto with vehicles. Would-be importer Chamco was put into the hands of a legal custodian in April by a New Jersey court. Since then, more than a dozen executives with automotive expertise and experience have resigned, sources familiar with the case said. Among the departed is Steve Saleen, a well-known maker of specialty cars who brought a team to Chamco to homologate Chinese vehicles for sale in the United States. Also gone is Mario Ferla, a former Fiat executive hired to run Chamco. Chamco’s importing arm — ZX Automobile Co. of North America Inc., of California — may be forced into involuntary Chapter 7 bankruptcy. Creditors filed the petition this month in U.S. Bankruptcy Court for the District of California in Santa Ana. ZX Auto North America did not respond to the petition within the required 20 days. In a letter to Chamco executives, Heibei Zhongxing Automobile said it was backing out of the contract to supply an SUV and a pickup because Chamco has been unable to operate normally since a coup d’etat was staged by eight top executives. No one at Chamco headquarters in Parsippany, N.J., could be reached for comment, and Chairman Bill Pollack did not return calls to his cell phone. On March 3, Ferla, Saleen and six other Chamco execs sued E. Michael Daspin — Chamco’s founder, who is alleged in shareholder lawsuits to control the company through his wife, Joan — and others, alleging fraud. The executives then decamped with 43 Chamco employees to another building. But Daspin and employees loyal to him, who claim to control a majority of shares, voted the same day to fire the Ferla team and later filed countersuits. In April, New Jersey Superior Court Judge Catherine Langlois shut down the company, giving temporary control to a court-appointed trustee. The trustee’s report is due Tuesday, July 1. Langlois said she would determine Chamco’s fate on Aug. 8. Zhongxing still has hopes of someday selling in the United States, but no specific plan is being pursued, a company executive said last week in China. But that’s of little consolation to the 37 would-be dealers who paid franchise fees of up to $300,000 to Chamco.c Lan Lan in Beijing contributed to this report GM selects Arkona to replace Reynolds DETROIT — General Motors said Friday that it has chosen Arkona Inc., a DealerTrack Holdings Inc. company, to join its Integrated Dealer Management System program. More than 1,000 dealers use Arkona’s management system to run their daily operations. Arkona, in effect, will replace Reynolds and Reynolds Co. in GM’s dealership program. Reynolds and GM were embroiled in a breach-ofcontract lawsuit when Reynolds bowed out of the Integrated Dealer Management System program in February. — Ralph Kisiel SAIC source: No contact with Ford on Volvo Shanghai Automotive Industry Corp. is not talking with Ford Motor Co. about buying Volvo, an SAIC source said Friday. “As far as I know, our company has never contacted Ford on the purchase of Volvo Cars,” said the source, who declined to be identified. Speculation that Ford plans to sell the Swedish brand — possibly to a Chinese automaker — was triggered by a report last week in Sweden’s Dagens Industri business newspaper. A Volvo spokeswoman declined to comment. — Yang Jian and Arjen Bongard In U.S. tour, Mr. Tata gives Jaguar and Rover dealers a hug PAL PILLAI/AFP PHOTO/NEWSCOM Lindsay Chappell lchappell@crain.com Wanted: A few innovative dealers Have you created a showroom that shoppers can’t resist? Discovered a recipe for loyal salespeople? Found a way to put some fun into F&I? If you are a franchised new-car dealer and have pioneered a winning strategy in any part of your business, tell us about it. We’re gathering ideas for a special Insight section on Innovative Dealers to be published Oct. 13. Send a note to Insight Editor Karen Faust O’Rourke at korourke@crain.com or call her at 313-446-0386. ho was that elegant stranger sipping tea and poking around in the service shop of Allen Aron’s Chicago area Jaguar dealership this month? None other than the man who now owns Jaguar, Indian industrialist and billionaire Ratan Tata. Tata, who just paid $3 billion to acquire Jaguar and Land Rover from Ford Motor Co., wasted no time flying over to the United States to meet some of the brand’s oldest and biggest dealers. It was his first visit to a Jaguar dealership. Anywhere. And also the first time in memory dealers have laid eyes on their top factory decisionmaker. “I’ve been a Jaguar dealer for 40 years,” says Norm Tompkins, owner of San Jose British Motors near San Francisco, whom Tata invited to lunch. “In all the years Ford owned us, I never met a single Ford executive.” Tata’s cross-country dealership pilgrimage, flying with his top execu- W After meeting Tata, former critic admits: ‘I was wrong’ Ratan Tata went out of his way to meet privately with a critic, Florida dealer Ken Gorin. Gorin, head of Jaguar’s national dealer council, made world headlines late last year when he told Automotive News that India was not the appropriate home market for the luxury marque. He characterized India as a nation of bicyclists. Tata flew to Gorin’s Miami Jaguar dealership and spent five hours with him, touring the facility, meeting with the staff and having dinner. “I was wrong,” Gorin now admits, speaking by phone Friday from Jaguar’s design center in Whitley, England. “Any concern I may have had has been completely dispelled. I couldn’t be more impressed. “Ratan Tata is very humble and self-effacing. But he’s also a fully engaged entrepreneur, and Jaguar hasn’t been run by an entrepreneur since the beginning of time.” — Lindsay Chappell “I’m telling you this,” Aron says, growing serious: “He’s going to make something out of Jaguar. We’re in good hands now. My son can see his future here now.” Steaks and ideas Barely two weeks after closing the deal with Ford this month, Tata invited Aron and a few other Chicago area Jaguar and Rover dealers to dinner at Chicago’s Peninsula Hotel. Tata asked the dealers to tell him their ideas and wishes for their brands. Over steaks, the chairman and his secretary took notes on the comments. Dealers asked the new owner for a convertible Jaguar sports car. They alerted Tata that Bentley, owned by Volkswagen AG, has become a fierce new competitor for them and that Jaguar must have a higher-end car to compete with Bentley. Tata nodded and wrote that down. His newly named Jaguar global CEO, David Smith, also took notes and asked questions. The next day, Tata and his group see TATA, Page 37 tives and a male personal secretary aboard the chairman’s private jet, made a clear impression on Jaguar and Rover dealers. With a warm personality and a patient ear, the 70-year-old Tata appears to be winning over quickly the anxious hearts of two orphaned luxury brands. “I was never hugged as much by my own father as I was hugged by him,” Aron admits. Aron, one of the first Jaguar dealers in the United States, invited Tata to his 55-year-old Imperial Motors store in Wilmette, Ill. “He embraces you and touches you, which is a good thing. To me, that’s the sign of a very warmhearted person.

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Automotive News - June 30, 2008

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