Automotive News - March 3, 2008 - (Page 51)

MARCH 3, 2008 • 51 Acura to replace faulty hoses WASHINGTON — American Honda Motor Co. is recalling hundreds of thousands of Acuras to make two safety-related repairs. The number of recall notices exceeds 400,000, but there is overlap in the affected vehicles. Some owners are eligible for both fixes, according to documents filed with the National Highway Traffic Safety Administration. Dealers are to install heatresistant power-steering hoses in about 273,000 Acura TLs built for the 2004-08 model years. The company determined that original hoses deteriorate prematurely and may leak, creating a fire hazard. Separately, nearly 130,000 TLs built for the 2004-05 model years are to be returned for a repair to windshield wiper motors. CHRYSLER Nardelli hire Campi makes his own rules continued from Page 8 name, is untested on this continent. Of course, the Indian company could buy a tried-and-true plant near Toledo — say, in Indiana — and assemble parts from India there. But there’s no indication of that yet. Campi, a trusted longtime lieutenant of Chrysler CEO Bob Nardelli, is convinced Chrysler can save money and possibly improve quality if it can find more suppliers outside North America. Today, the vast majority of Chrysler’s $40 billion procurement budget goes to North American vendors. It trails rivals General Motors and Ford Motor Co. in buying parts from China. Responding to e-mail questions, Campi said Chrysler is operating in a global marketplace with an unbalanced “sourcing portfolio” relying on North America. “Sourcing parts from around the world presents unique logistical challenges, but they can be overcome,” he said. “In fact, I would like to see more partnerships with our existing suppliers because that’s the easiest road to success.” To find new suppliers, Chrysler is expanding its purchasing staff outside North America, Campi said. Chrysler also is increasing engineering activities in China, India, eastern Europe and Mexico. Financial urgency drives the 63year-old Campi. Chrysler posted a net loss of $2.92 billion between the time that private equity firm Cerberus Capital Management LP bought Chrysler last Aug. 4 and the end of the third quarter, according to a recent financial disclosure by former parent Daimler AG. Cerberus disputes that figure, but there’s no question that falling sales are squeezing Chrysler’s finances. Breaking taboos Facing red ink, Campi has not hesitated to break Detroit purchasing taboos in pursuit of a lower-cost Chrysler. Witness the recent show- down with plastic parts supplier Plastech Engineered Products Inc. When Plastech sought another bailout from the Detroit 3 last month, Chrysler broke ranks with GM and Ford. Chrysler not only refused to pump money into troubled Plastech but also tried to transfer the automaker’s molds and machines to competing suppliers. Typically in the past, the automakers stayed together to share the pain to avoid costly parts interruptions. Chrysler’s tactic backfired. Plastech — a large, minority-owned company in suburban Detroit — rushed into U.S. Bankruptcy Court and won a ruling that prevents Chrysler from removing the tools. But Campi has not given up. At a special meeting with suppliers last month, Chrysler purchasing managers told vendors to stay ready because the Chrysler molds and business would be coming their way, said two supplier executives who were there. Chrysler gave no explanation of how the carmaker would get around the Bankruptcy Court’s ruling. Campi declined to comment on the Plastech situation. The urgency of Campi’s global sourcing quest is understandable, says John Casesa, a longtime industry analyst now with his own auto consulting firm, Casesa Shapiro. But going too fast creates risks, especially when Chrysler challenges time-tested ways of dealing with distressed suppliers or sourcing delicate parts such a seats from abroad, Casesa said. In the early 1990s, former GM purchasing chief J. Ignacio Lopez proved that point. When he bid out proprietary part designs to garner the lowest prices, Lopez launched a brutal price war that created lasting animosity between GM and its suppliers. The industry is still struggling to heal the wounds. Campi has called for an end to the divisiveness, but some suppliers think his recent actions don’t match his words. “Radical changes in the sourcing process create risks,” says Casesa. “Chrysler certainly can’t afford a Lopez experience.” c Magna net income drops AURORA, Ontario — Canadian auto parts maker Magna International Inc. says fourthquarter net income fell to $28 million, from $29 million a year ago. But its full-year sales climbed 8 percent. Quarterly sales rose 7 percent to $6.8 billion, from $6.4 billion. For the year, sales rose to $26.1 billion, from $24.2 billion. Magna posted full-year profits of $663 million, up from $528 million. ARNELL Consultant has power, boss’ ear continued from Page 1 Who is Peter Arnell? Arnell Group, of New York, is owned by Omnicom Group, which also owns Chrysler ad agency BBDO Worldwide Worked with Bob Nardelli to develop Orange Works at The Home Depot, still works with Home Depot Brokered Chrysler’s Celine Dion campaign for the Pacifica crossover, regarded by dealers as a disaster Was instrumental in developing new look for Chrysler’s so-called Alpha dealerships, which sell Chrysler, Jeep and Dodge vehicles under one roof Title is acting chief innovation officer, developing branding, merchandising and marketing strategies Won’t be involved in ad strategy, Chrysler says Navistar refiles Ford suit WARRENVILLE, Ill. — After attempts at mediation failed, Navistar International Corp. refiled a breach of contract lawsuit against Ford Motor Co. over diesel engines. The suit, first filed in June 2007 in state court in Illinois, alleges Ford is breaking a contract in which the automaker said Navistar would be its primary supplier of diesel engines for pickups sold in North America. According to a Navistar statement, Ford intends to introduce a 4.4-liter diesel engine for North American production in 2009 or 2010. Navistar says Ford cannot produce this engine without breaking the agreement. ecutive conflicts. Among the people and the areas to watch: Trevor Creed is Chrysler’s chief designer; Deborah Meyer is chief marketing officer; Frank Klegon heads product development. A history with Nardelli Arnell is the latest high-profile consultant Nardelli has brought in as he tries to revive the ailing automaker. Another Nardelli associate, John Campi, came on board as a consultant and is now global procurement chief. (See story, Page 8.) Arnell has a history with both Chrysler and Nardelli. When Nardelli was chairman of The Home Depot home improvement chain, he used Arnell in a similar consulting role. And here’s where the Chrysler deja vu comes in: Arnell played a key role in Chrysler’s disastrous 2003 Chrysler Pacifica launch campaign featuring French-Canadian pop singer Celine Dion. The campaign, said to cost Chrysler $14 million, was pulled one year into a three-year contract after dealers revolted, complaining that the ads were more about the singer than the vehicle. Jim Schroer, then Chrysler’s marketing chief, wanted Dion to represent Chrysler, going against the advice of BBDO Worldwide, Chrysler’s lead ad agency. Arnell, with his celebrity contacts, was able to deliver Dion to the carmaker. Arnell’s agency, the Arnell Group, produced and directed the Dion ads. Both the Arnell Group and BBDO are owned by Omnicom Group. Rooney retires from Chrysler DETROIT — David Rooney, 52, has retired as director of Chrysler brand marketing and global communications. Rooney has been replaced by John Plecha, 43, who will take the top Chrysler brand job and keep his title as global sales and marketing director for Jeep. Rooney joined Chrysler in 1982 and had been director of media operations and cross-brand marketing. Plecha joined Chrysler in 1987. Gibson leaves DealerTrack board LAKE SUCCESS, N.Y. — Tom Gibson, former chairman of Asbury Automotive Group, resigned from the DealerTrack Holdings Inc. board last week. According to a DealerTrack statement, Gibson’s role as a senior adviser to Cerberus Capital Management interfered with his responsibilities at DealerTrack. Wide authority Five years after the Arnell Group parted company with Chrysler, Arnell is back — although Chrysler says he won’t be involved in advertising strategy. Nardelli has instead given Arnell wide-ranging influence in other areas. In addition to occupying the 15th floor along with Nardelli and copresidents Tom LaSorda and Jim Press, Arnell has a seat on Chrysler’s product planning council. He will work with Chrysler’s ENVI think tank to develop product innovations and technology. He will also help develop in-car infotainment systems. Arnell will advise Chrysler on: Vehicle designs and materials that consumers see and touch in vehicle interiors and exteriors. The consumer experience at auto shows and dealerships. Strategy for developing the Chrysler, Dodge and Jeep brands. Development of new products and accessories for the Mopar Group. Arnell already is involved in the launch of the Dodge Challenger muscle car, which is scheduled to arrive at dealerships this spring. He produced a Challenger video that was shown last month at the Chicago Auto Show. Flamboyant figure Arnell is a well-known personality on the New York ad scene. According to Advertising Age, the Arnell Group had revenues of $23.1 million in 2006. Associates call Arnell a genius and an idea generator. His agency has had a star-studded list of clients, including Samsung, Reebok, Unilever, Donna Karan, DKNY and Electrolux. His address book is full of A-List celebrities, and he counts luminaries such as noted architect Frank Gehry as friends. Working with Nardelli at Home Depot, he launched Orange Works, an in-house innovation think tank. The best-known product of that partnership was a stylish and ergonomic fire extinguisher, the Home H

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

Bob Nardeli's new big-idea guy New Kia boss reaches out to restless dealers Scion hits a wall Lithia losses raise caution flag Detroit 3 shun talk of NAFTA do-over Lincoln names new marketing manager Mercedes to launch hybrid sedan in '09 Mazda has new top marketing exec M-B will hit the road with 50-state diesels Pontiac puts big ad bucks into traditional media for G8 Reynolds, ADP diverge on growth strategies Ford plans to cut fleet sales 10% in 2008 Mazda: New models, styling will boost its loyalty rate Run-up to axle strike adds to supplier woes Webasto's fast heater will debut by 2010 Russian plant wants to be world's biggest A Lancer is hatched Chrysler throws out purchasing rulebook Honda sets lofty hybrid goal, with Civic's help Honda: Use of ethanol limited, must be biomass Honda CEO Fukui: No recession in U.S., despite soft sales in spots 550 hp? 620 hp? Is GM crazy? Doug Fraser was a great leader How ironic: Lyons learns caution Well done, Doug Don't let Calif. impose fuel rules on the nation Blame the dealer, not the brand Cutting weight doesn't cut safety When Lutz dumps on global warming ... JM exec Czubay: A taste for hogs, pierogi Doug Fraser: A good man to have known Fraser led UAW with 'combination of substance, politics and charm' Autonet finds success at NADA with wi-fi for cars GM to sell medium-truck business, keep dealer network Web classified ad firms renew marketing to dealers, buyers Chery designs venture's vehicles China venture eyes 20,000 Fiesta hatchback sales Toyota plans crossovers in China Dongfeng, YuAn plan minicars BMW shakes up global marketing, sales ranks Delphi divestiture boosts forging supplier Is Blackhawk purchase bucking a trend? Repair company grows as Detroit 3 struggle BorgWarner unit expands German automakers seek more parts sourced in North America Hyundai picks ArvinMeritor Japan parts firm to build Miss. plant Nissan to increase spending on IT Purchase keeps Tenn. plant open Automakers hit with apartheid claims Mexico sales flat in January Ford prices '09 Flex atop crossover line Hamp rejoins Visteon board RV deliveries decline 3.4% in December Subaru lowers Forester price Personnel Bright future for LED headlight suppliers? Valeo's Morin to Pardus: Learn before you leap German automakers aren't worried about U.S. recession Porsche's Wiedeking: We must retool VW Europe's loud debate over quieter tires Noise level depends on the tires, the road Auto industry robotics spending jumps 43% in 2007 Electronic brakes struggle to get traction Big Texas dealer returns to some domestic brands AutoNation chief sees tough '08, better '09 In downturn, Sonic looks beyond new cars GM promotes service, parts leads for dealerships 10 cool dealership technologies found at NADA Dealers Kia will build transmissions at Georgia plant Gibson leaves DealerTrack board Akebono closing Kentucky plant Feds issue Ford fire warning Magna net income drops VW to use Siemens' software A tale of 2 exhaust systems EU wants CO2 in ads; battle looms Maize malaise stalls ethanol Tata to siesta during Ford's Fiesta Honda moves its American bike offshore Honda will recycle cycle plant Tom LaSorda's multimillion-dollar smile

Automotive News - March 3, 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.