Automotive News - November 3, 2008 - (Page 1)

autonews.com ® NOVEMBER 3, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Ford sticks with small-car plans Mulally banks on strategy despite F-150 marketing blitz Amy Wilson awilson@crain.com Our newcast debuts Automotive News Today, our daily newscast, begins today. Check our Web site, www.autonews.com, after 4 p.m. Eastern time for a report on October auto sales and other news of the day in video form. DETROIT — A funny thing happened on the way to the Ford F-150 pickup launch. Last summer, Ford Motor Co. delayed the debut of the re-engineered ’09 model after gasoline topped $4 a Mulally: Even with cheaper pump prices, Ford won’t veer from its plan to produce smaller, fuel-efficient vehicles. gallon. Next, Ford gave up on National Football League ads. Then gasoline prices dropped, and the sell-down of 2008 models went bet- ter than Ford expected. Industry sales of full-sized pickups were down a whopping 26.7 percent in September. But this past weekend, football watchers saw the first salvo of a barrage of commercials for the 2009 F-150. Lower gasoline prices may create a better launch environment for the F-150, but they present a problem for Ford, too. Ford is betting that a wave of European-designed small cars will lead its turnaround. So will the drop in gasoline prices cause Ford to rethink its small-car onslaught? Not at all, says CEO Alan Mulally. Fuel “prices are going to stay relatively higher, even though they’re see PLAN, Page 37 autonews.com Vehicle technology: See our Web site for Alan Mulally’s video Q&A. Here’s what’s around the corner Higher mileage vehicles are on the way. The first wave will arrive in 2010, packed with fuel-saving technologies. A special Vehicle Technology section starts on | PAGE 20 | Major changes to the Chevrolet Malibu, above, have been delayed a year. The debut of Chevy’s Cruze, right, has been pushed back six months to a year. Cash crunch grows: GM delays vehicles Jamie LaReau jlareau@crain.com FUKUI NARDELLI Talk from the top Honda CEO Takeo Fukui says flexible manufacturing has been a key part of Honda’s strong performance during the U.S. market downturn. Chrysler’s Bob Nardelli says the federal loan program for fuel-efficient vehicles could help the automaker’s electric car program. | PAGES 24, 25 | DETROIT — General Motors executives are running the company “minute by minute” as they slash the product development budget to save as much as $1.5 billion. GM’s decision to delay key vehicles such as the Chevrolet Cruze as long as a year is a sign of desperation, analysts warn. The bottom line: Dealers won’t get a timely delivery of the products that are supposed to ensure GM’s recovery. Last week Automotive News reported that GM is slashing its product development budgets for the next two years, with as much as 80 percent of Tracking the storm GM takeover would eviscerate Chrysler jobs, model lineup. Page 39 Dealers want a federal stimulus to boost sales. Page 8 Ghosn: Meltdown means automakers won’t do deals. Page 42 Mulally: Full ownership of Ford Credit a strategic advantage. Page 4 For up-to-the-minute coverage of the turmoil in the auto industry, go to www.autonews.com. You also can sign up for daily and weekly e-mail newsletters, watch our videos and listen to podcasts. news ANALYSIS @ most “intense financial situations” in GM history, adds a second source. That source insists that GM’s product development cutbacks are not a sign of collapse. But for any automaker, a sharp reduction of product spending is a desperate measure. ‘Last resort’ “It’s a very dangerous thing to delay product programs because it makes it very difficult to avoid sales declines in the future,” says John Casesa, a principal of the Casesa Shapiro see GM, Page 39 the cuts coming in 2009. The Chevrolet Volt and Camaro cars won’t be delayed. Most other models will. “It’s not just capital budget,” says a source familiar with GM’s plan. “It’s also engineering, design — everything that would cause money to flow out in 2009.” The cash-flow crisis is one of the On the Web This week at www.autonews.com: Monday: Automakers report U.S. vehicle sales for October; Chrysler celebrates the 25th anniversary of the minivan in Windsor, Ontario. Tuesday: Suppliers Tenneco and Magna International release third-quarter financial reports. Thursday: Third-quarter reports from Toyota and AutoNation. Friday: Ford’s third-quarter report. Credit? Come and get it, industry groups say Donna Harris dharris@crain.com Following the three best-selling automakers in the United States, industry groups aim to assure wary consumers they can get financed despite the credit crunch. Credit is available, say groups as varied as the used-vehicle retailer CarMax Inc. and trade associations that represent new-vehicle dealers and auto lenders. General Motors, Nissan offers 0% loans ➤ 40 Toyota Motor Sales U.S.A. Inc. and Ford Motor Co. are running similar advertising campaigns. “There’s been negative press regarding the financing situation on new vehicles,” says Chevrolet dealer John Phelan, chairman of the Chicago Automobile Trade Association, which represents more than 500 franchised dealers in metropolitan Chicago. “We had to counteract that.” The dealer group is broadcasting NEWSPAPER TV and radio commercials that tell new-vehicle customers that they can get competitive rates for loans and leases. Phelan says showroom traffic at his dealership in Lyons, Ill., has dropped by half in the past two months. AWARE — short for Americans Well-informed on Automobile Retailing Economics — is conducting a separate promotional effort. The Washington, D.C., group represents dealers, automakers’ captive finance see CREDIT, Page 40 http://www.autonews.com http://www.autonews.com http://www.autonews.com http://www.autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - November 3, 2008

Credit? Come and get it, industry groups say GM's product delays signal dire health Ford sticks with small-car plans Mitsubishi CEO: Let's halt Galant production in U.S. A dealer â and his reputation â on the ballot Help vehicles shed pounds American Axle posts loss UAW hires bailout adviser Ford to spend $200 million to upgrade 2 Ky. plants No off-lease cars? Certified will find others Arlena Sawyers China's stock market plunge has spooked car shoppers Advantage, Ford: Mulally likes owning Ford Credit Supplier execs join innovation panel at congress Quietly, Mini seeks 500 drivers to lease electric car for a year Reynolds bolsters document business Winterkorn: Audi needs to build in U.S. The great revenue drop of 2008 Bidders bet they can rebuild Heard 1 size fits all NADA: Give us tax incentives, dealer loan guarantees Campaigns' climate, energy plans hit economic wall Detroit 3 need and deserve U.S. help now Chrysler needs a buyer, but not GM Dealers pay fair share of taxes Washington hurts, not helps, electrics Compressed natural gas is the best fuel New ads aim to raise Suzuki's low profile Suzuki's new ad strategist: This brand has soul Fuel efficiency is coming â it just takes time Electrics edge closer by 2010 Tougher CAFE standards loom R&d chiefs shift gears for an electric future Japan carmakers lead charge into electrics Buffett backs BYD's sketchy plan for U.S. electric car Q&A: BYD envisions 2010 exports to U.S., Europe Girding the power grid for an electric fleet Hype powers plug-in vehicles Coachbuilders see salvation in electric cars Electric vehicles are charging into Europe Expect stop-start's big start to arrive in 2010 Flexibility will help Honda survive the storm Nardelli: Bailout not perfect â but needed Audi goes high-tech to boost service Acura offers quick service to win business Toyota's fashion fan Picture this Hondaâs N.A. operating profit falls 80.6% in quarter Aug. RV shipments fall 44% VW drops hints about car for new Tenn. plant Mexico sales fall 10.7% in September Honda to boost CR-V, end Civic output in Ohio Ford and GM jockey for steel discounts Dealers Ford Credit seeks to tap $700 billion package GM will end a used-car incentive early Nissan, Mitsubishi, Mazda recast fiscal 2009 forecasts Metaldyne to bondholders: Take 30% or Chap. 11 looms Detroit 3 ties hurt profits of dealer groups GM takeover would eviscerate Chrysler ranks, model lineup Mitsubishi plans electric hauler To match Toyota, Nissan offers 0% loans Sticker, sticker at the mall, what's the cheapest of them all? The Versa Waiting is what it's all about, Alfa Buy Chrysler? GM should sell Buick to SAIC Pickups pumped up by pump price plunge Chrysler hybrids, we hardly new ye Ghosn: Your best partner is a president in your pocket Sonic wins, but Mercedes wants last word

Automotive News - November 3, 2008

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