Automotive News - November 24, 2008 - (Page 30) 30 • NOVEMBER 24, 2008 final assembly comment BAILOUT >> Get the latest coverage of the auto industry bailout from Washington, D.C., at www.autonews.com. More like Toyota, Honda? Careful what you wish for I SNAPSHOTS OF A CRISIS Romney: Bankruptcy, not bailout S eeking votes and campaign dollars in Michigan’s Republican primary this year, Mitt Romney strafed rival John McCain for saying that some auto jobs “won’t come back to Michigan” and promised, as president, to “bring together industry, labor, congressional and state leaders to develop a plan to rebuild America’s automotive leadership.” Now his plan involves Bankruptcy Court, a big ax and lots of blood. “A managed bankruptcy may be the only path to the fundamental restructuring the industry needs,” Romney wrote last week in The New York Times — a day after the same industry leaders, legislators and car dealers he had courted during the campaign went to Washington to seek loans and argue that an auto bankruptcy would be devastating. companies to shed excess labor, pension and real estate costs.” If the Detroit 3 get the guaranteed federal loans their CEOs asked for, Romney wrote, “You can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.” The reason? A bailout would keep General Motors, Ford and Chrysler from a much-needed restructuring. Labor contracts should be torn up, and retirees should receive less. Management should be replaced by “new faces” from “unrelated industries.” Only then, wrote Romney, should the federal government provide “guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.” t’s time to think outside the box. I hate to admit it, but there’s wisdom hidden among the silly things said by politicos and others who don’t understand the auto industry. No, not all the talk about letting General Motors, Ford and Chrysler use Chapter 11 as a kind of boot camp to whip themselves into shape; that’s just too asinine to consider. I mean the admonishments to be more like Toyota, Nissan EDWARD LAPHAM and Honda. IS EXECUTIVE Think about it. EDITOR OF Now that the AUTOMOTIVE Detroit 3 have NEWS. narrowed the gaps in productivity, quality and labor costs, the transplants have one obvious advantage: Their headquarters, engineering staffs and main product development operations are all overseas. To them, America is a colony. So GM, Ford and Chrysler ought to move. Great! That’s settled. Now: Where should they go? For GM, I’d suggest China. GM sells more Buicks in that growing market than anywhere else in the world. And the Chinese government is kind enough to manipulate currencies, impose trade barriers, etc. They sure know how to coddle an industry there. Ford, on the other hand, could easily relocate to Cologne, Germany, where Ford of Europe is headquartered. Ford would be poised for further action on the eastern front and could cozy up to the German government by adding a supervisory board with union representatives. The choice is even easier for Chrysler: Either slide across the river into Windsor, Ontario, or, better yet, head down Mexico way. Like the transplants, the Detroit 3 could leave a few assembly plants open here and maybe a couple of sales and marketing offices. Heck, even maybe a design studio, a small technology center and a handful of purchasing agents to work with the few suppliers that don’t follow the automakers abroad. All the corporate, design and engineering jobs — not to mention technology and expertise — would be gone. But so what? The Detroit 3 would be more like the transplants, and, apparently, that’s all that counts. So hasta la vista, baby! Maybe he’s Buck-a-year Bob now I n 1979, Lee Iacocca pledged he would take $1 a year in salary if it helped Chrysler get a lifeline from the federal government. When members of the Senate Banking Committee asked the Detroit 3 CEOs last week whether they’d be willing to make a similar sacrifice in 2008, Chrysler CEO Bob Nardelli piped up and said he would indeed accept $1 a year. But that might be just a pay freeze, not a cut. When Nardelli was hired in August 2007, sources at Cerberus Capital Management leaked to various media outlets that Nardelli would be paid just $1 a year, and further compensation would be tied to his success in turning Chrysler around. Neither Cerberus or Chrysler would comment last week. But even at $1 a year, Nardelli wouldn’t have to tighten his belt much. He became one of the poster boys for excessive executive compensation when got a $210 million severance package upon leaving his previous job as chairman of Home Depot. Mitt Romney: Federal loans would doom, not save, the Detroit 3. SHANNON STAPLETON/REUTERS Bankruptcy is vital, Romney wrote, because “it would permit the Mazda deal imperils Ford training ground F ord raised $540 million last week by cutting its stake in Mazda from 33.4 percent to 13 percent. But it may have lost a top-notch international training ground for senior executives. Many young and upcoming managers were schooled at Mazda after Ford took a controlling interest in 1996. The process actually started in 1993, when Ford — then with a 25 percent stake — parachuted Henry Wallace, Gary Hexter and Ross Witschonke into Hiroshima to help its struggling Japanese partner. Among Ford’s Mazda-trained elite: Mark Fields, now president of the Americas; CFO Lewis Booth, who led a turnaround in Europe before moving to North America last month; Volvo CEO Stephen Odell; Robert Shanks, controller for the Americas; and Paul Stokes, the popular former head of European purchasing who now heads production purchasing in the Americas. Former global product development chief Phil Martens and former Ford of Europe President Martin Leach also won their spurs at Mazda. Leach was once asked by an Automotive News reporter what word or phrase he most often overused. He immediately replied: “When I was at Mazda, ” What’s good for — uh, how’d that go again? R ick Wagoner may be the most In 1953, GM President Charles beleaguered General Motors Wilson was getting a going-over executive since Billy Durant got the from the Senate Armed Services bum’s rush in 1920. But Committee after being “Engine Charlie” Wilson nominated for secretary is by far the most misof defense by President quoted — and it hapDwight Eisenhower. pened again last week. Wilson has been At the Senate Banking immortalized for his and Commerce supposed blunt retort: Committee hearing “What’s good for General where Wagoner and the Motors is good for the other Detroit 3 CEOs country.” The line has appeared, Bob been trotted out ever Menendez, D-N.J., since by GM critics as launched into his evidence of Detroit’s © GM CORP. comments by saying: colossal arrogance. Matt Charles Wilson: “You know, Mr. Lauer opened NBC’s Famous for what Chairman, a former “Today” show with the he didn’t say. chairman of General line on Thursday, Motors once quipped Nov. 20. very famously that what is good for Except Wilson didn’t say it. What General Motors is good for he said was: “For years, I thought America.” that what was good for our country It’s a variation of an old chestnut was good for General Motors and used for half a century to illustrate vice versa.” the arrogance of the nation’s largest But when the fur starts flying, automaker. who’s got time for nuance? Sharks vs. Jets, D.C.-styledd one more thorny issue to the pile that the Detroit 3 CEOs face: Take the corporate jet to Washington next time or head for the Greyhound terminal? Much hay was made last week when it was revealed during a hearing of the House Financial Services Committee that Rick Wagoner, Alan Mulally and Bob Nardelli took corporate jets to Washington to seek federal aid. “There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” said Rep. Gary Ackerman, D-N.Y. “Couldn’t you all have downgraded to first class or jet-pooled?” Several committee members piled on, and made headlines. The subtext: There’s a lot of anger in crisis-weary America, and the $700 billion Wall Street bailout is a tough act for the Detroit 3 to follow. Tom Wilkinson, a GM PR guy, said GM was surprised by the whirlwind of publicity surrounding the jets. But he said GM understood the “optics” of the situation. Wilkinson said that GM has put four of its seven corporate jets up for sale, and that GM’s corporate security policy requires top leaders to use the company jets. Would the Detroit 3 CEOs jet-pool back to Washington next time? “We are watching the reaction to this very closely,” Wilkinson said. In case they’re interested: A round-trip Greyhound ticket to Washington is only $118 if you buy it seven days in advance. Edward Lapham writes commentaries each week for autonews.com. Read them at autonews.com/edwardlapham. http://www.autonews.com http://www.autonews.com http://www.autonews.com/edwardlapham
Table of Contents Feed for the Digital Edition of Automotive News - November 24, 2008 Iacocca tip: 'Equality of sacrifice' Ch. 11 would hit dealers hard â fast Detroit 3: Bankruptcy = doom Down the road and a continent away Used-vehicle demand shrivels O'Neill will lead Power GM tweaks production plan Mitsubishi: No to Detroit Ford will cut more output Nardelli: Chrysler is running on fumes GMAC on brink of bankruptcy, S&P warns Off with their heads! (But whose?) In defense (kind of) of Detroit Bailout Motors? Britain went down that road CEOs could have pre-empted the grilling Ford: We still want Mazda expertise Imports clog ports as sales plunge Volvo's N.A. boss will resume leases to boost volume Nissan expects Chrysler pickup deal will survive Toyota: Venza is a trendsetter, not a crossover It's time to put partisanship aside; Detroit needs help What GM needs is GMAC.2 'Buy American' talk won't help industry Readers weigh in on auto industy woes No one bailed out Oldsmobile It's time to move to mass transport We still need manufacturing Bankruptcy is a bet Let's get wages under control Will America be better off? First step: Bring the jobs home America owes it to GM to help The answer is simple: Leasing What about dealerships? Detroit 3 CEOs must offer to quit Oct. truck sales fall 17.4% Honda plant adds parts center They're sold on Camaro Drawn to Ferrari Japan poised to control key batteries Europe's worst month hits all automakers Dealers BMW: Diesel 7 series could come to U.S. Honda's FC Sport mixes green and go Infiniti G37's hard top retracts in 30 seconds Redesign of Lexus RX series hard to see Mini electric: Jolt comes from sticker Ford hybrid sedans aim at Camry After only 3 years, Ford revamps Fusion Hyundai plans new crossover, turbo engine Restyled Mustang: More refinement, horsepower Honda: Don't count on CR-Z gasoline variant '09 Nissan Z delivers more of what fans like Mazda3 gets new look, powertrains Nissan Cube joins the box brigade Infiniti upgrades powertrains Lincoln MKZ gets a makeover Porsche won't stall Panamera 2010 GLK priced below rival Bentley's Azure T gets 500 hp Detroit 3 squeezed by credit, cash â politics Waxman could mean trouble for Detroit GM formulates a 'Plan B' if it doesn't get federal loan Infiniti replaces Igo Sharks vs. Jets, D.C.-style What's good for â uh, how'd that go again? Mazda deal imperils Ford training ground More like Toyota, Honda? Careful what you wish for Maybe he's Buck-a-year Bob now Romney: Bankruptcy, not bailout Automotive News - November 24, 2008 Automotive News - November 24, 2008 - (Page Intro) Automotive News - November 24, 2008 - Detroit 3: Bankruptcy = doom (Page 1) Automotive News - November 24, 2008 - Detroit 3: Bankruptcy = doom (Page 2) Automotive News - November 24, 2008 - Ford will cut more output (Page 3) Automotive News - November 24, 2008 - Off with their heads! (But whose?) (Page 4) Automotive News - November 24, 2008 - Off with their heads! (But whose?) (Page 5) Automotive News - November 24, 2008 - CEOs could have pre-empted the grilling (Page 6) Automotive News - November 24, 2008 - CEOs could have pre-empted the grilling (Page 7) Automotive News - November 24, 2008 - Volvo's N.A. boss will resume leases to boost volume (Page 8) Automotive News - November 24, 2008 - Volvo's N.A. boss will resume leases to boost volume (Page 9) Automotive News - November 24, 2008 - Toyota: Venza is a trendsetter, not a crossover (Page 10) Automotive News - November 24, 2008 - Toyota: Venza is a trendsetter, not a crossover (Page 11) Automotive News - November 24, 2008 - 'Buy American' talk won't help industry (Page 12) Automotive News - November 24, 2008 - 'Buy American' talk won't help industry (Page 13) Automotive News - November 24, 2008 - Detroit 3 CEOs must offer to quit (Page 14) Automotive News - November 24, 2008 - Drawn to Ferrari (Page 15) Automotive News - November 24, 2008 - Japan poised to control key batteries (Page 16) Automotive News - November 24, 2008 - Dealers (Page 17) Automotive News - November 24, 2008 - Dealers (Page 18) Automotive News - November 24, 2008 - Dealers (Page 19) Automotive News - November 24, 2008 - Dealers (Page 20) Automotive News - November 24, 2008 - Dealers (Page 21) Automotive News - November 24, 2008 - Dealers (Page 22) Automotive News - November 24, 2008 - Mini electric: Jolt comes from sticker (Page 23) Automotive News - November 24, 2008 - Restyled Mustang: More refinement, horsepower (Page 24) Automotive News - November 24, 2008 - Bentley's Azure T gets 500 hp (Page 25) Automotive News - November 24, 2008 - Bentley's Azure T gets 500 hp (Page 26) Automotive News - November 24, 2008 - GM formulates a 'Plan B' if it doesn't get federal loan (Page 27) Automotive News - November 24, 2008 - Infiniti replaces Igo (Page 28) Automotive News - November 24, 2008 - Infiniti replaces Igo (Page 29) Automotive News - November 24, 2008 - Romney: Bankruptcy, not bailout (Page 30) Automotive News - November 24, 2008 - Romney: Bankruptcy, not bailout (Page 31) Automotive News - November 24, 2008 - Romney: Bankruptcy, not bailout (Page 32)
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