Automotive News - August 25, 2008 - (Page 8) 8 • AUGUST 25, 2008 advertising Fed loans to auto industry are ‘top priority’ Harry Stoffer hstoffer@crain.com Loan some Terms of a federal loan program for factory retooling if Congress funds it Who is eligible: Automakers, suppliers What they must do: Re-equip, expand or build a plant for advanced technology vehicles or components; or engineer such plants, vehicles and parts Which vehicles qualify: Those that get at least 25% better fuel economy than the average of similar vehicles and also meet emissions standards How much is available: As much as 30% of a project’s cost Other conditions: Subject to rules the U.S. Energy Department is writing Source: Energy Independence and Security Act of 2007 WASHINGTON — When Congress voted last December to offer government loans to automakers and suppliers to retool their factories, the plan seemed an afterthought with an uncertain future. The uproar over a 40 percent increase in vehicle fuel economy standards — part of a new energy law — drowned out debate over the measure’s loan provision. But today, the industry calls the loan program a potential lifeline as it struggles with high energy prices, sinking sales and tight credit. “It’s our top priority” in Washington, says Ziad Ojakli, Ford Motor Co.’s group vice president of government and community relations. Major savings on interest Ford and other auto companies must borrow huge sums to overhaul plants so they can build more fuel-efficient vehicles. If the automakers can borrow at low government interest rates, they will have more money to retool faster, Ojakli says. Some companies with downgraded credit ratings must pay double-digit interest rates on borrowing, says an industry source who asked not to be identified. The government rate would be 5 percent or less. At that rate, the interest saved on a $1 billion loan could be $100 million or more a year. The new program authorizes as much as $25 billion in loans. Although the program is on the books, Congress and the White House must agree to fund it. A Senate proposal would provide $900 million to under- write about $6 billion in government loans in the first year. The UAW, which lobbied for the loan program, calls it a “necessary response to high gas prices and to pushing the objective of energy security,” says Alan Reuther, the legislative director. All makers should benefit Ann Wilson, a top supplier lobbyist, says even small loans would be a big boost for some companies. Wilson is senior vice president of government affairs for the Motor & Equipment Manufacturers Association. The group has 700 members, about half of them suppliers to the automakers. Among automakers, the Detroit 3 would especially benefit from the loan program. But Ed Cohen, vice president of government and industry relations for Honda North America Inc., said his company does not oppose the program as long as it does not discriminate among automakers and also helps suppliers. “We all share the same suppliers,” Cohen told Automotive News. He declined to speculate on whether Honda’s U.S. operations would seek a loan. Congress could add funding for the loan program to a spending bill needed to keep the government running beyond Sept. 30, when the fiscal year ends. Otherwise, the task will fall to the next Congress and administration. Barack Obama, the Democratic presidential candidate, supports the loan program. Ford’s Ojakli, a former Bush administration official, disputed reports that Republican candidate John McCain opposes it. c Genesis aims at low-priced luxury Hyundai will spend $80 million to address consumer skepticism Mary Connelly mconnelly@crain.com ANN ARBOR, Mich. — The weak U.S. economy is helping to boost early sales of the new Hyundai Genesis premium sedan, company executives say. The top-of-the-line V-8 version of the Genesis has a base price of about $38,000. Hyundai initially identified the target buyer of the Genesis as an owner of a mid-sized or large massmarket car who wants to move upscale. But John Krafcik, Hyundai Motor America’s vice president of product development and strategic planning, said at a press event here last week that the Genesis also is appealing to budget-minded owners of costlier luxury cars. “That group, in these economic times, seems to be bigger than we expected,” Krafcik told Automotive News. “We are seeing a lot of people who say, ‘I didn’t really get good val- Hyundai’s John Krafcik: “We are seeing a lot of people who say, ‘I didn’t really get good value from the premium brand.’ ” ue from the premium brand and the $3,000, $6,000, $10,000 or $15,000 extra I had to pay.’ ” Book of Genesis Sales target: 50,000 The Genesis sedan went on sale in late June. Production of a coupe is scheduled to begin in December. Next year, Krafcik said, Hyundai expects to sell as many as 50,000 of the cars to U.S. buyers. Hyundai identifies the primary competitors of the Genesis as the Chrysler 300C, Lexus ES 350, Pontiac G8 and Cadillac CTS. “Image” competitors include the Lexus GS series, Infiniti M series, BMW 5 series and Mercedes E class. To address consumer skepticism about Hyundai’s move into the presee HYUNDAI, Page 43 As alarm clocks ring, a Hyundai commercial compares the quiet of the Genesis cabin to the quiet of Mercedes-Benz and BMW vehicles. Elements of Hyundai’s $80 million marketing campaign to launch the Genesis premium car Nine 30-second TV spots that mostly compare Genesis engineering to luxury competitors’ Dedicated Web site: www.hyundaigenesis.com 12 long-form online videos Print and out-of-home ads Chrysler redesigns new design boss’ spot in exec ranks Bradford Wernle bwernle@crain.com SANTA BARBARA, Calif. — When Chrysler named a new design chief last week, it also changed the reporting line for the top styling executive. Ralph Gilles, Chrysler LLC’s new vice president of design, will not report directly to CEO Bob Nardelli — unlike Gilles’ predecessor, Trevor Creed. Instead, Gilles will report to Frank Klegon, executive vice president of product development. So did design get a demotion at Chrysler? No, said Gilles (pronounced Zheel). Instead, he said, the change will mean better integration of product styling with product development. “Frank’s objective was to get design As Chrysler’s design chief, Ralph Gilles will report to product development boss Frank Klegon and not CEO Bob Nardelli. Creed’s Chrysler creations ➤ 46 interiors after working with Ford Motor Co. in Europe for nearly 20 years. Gilles, lead designer on the 2009 Ram pickup and the Chrysler 300 sedan, said he wants to bring a new design vision that features more organic shapes, such those seen on the Chrysler ecoVoyager and Dodge Zeo electric concept vehicles shown this year at the Detroit auto show. Another Gilles goal: “getting our cars to be sexy again.” Gilles has spearheaded Chrysler’s advanced interiors studio, which was responsible for the interior of the new Ram. He said he admires consumer electronics powerhouse Apple Com- under the product development umbrella,” Gilles said here in an interview during the media launch of the 2009 Dodge Ram 1500 pickup. The 38-year-old Gilles, who grew up in Montreal after his parents emigrated from Haiti, will take over on Sept. 1. Creed, 62, is retiring. Creed joined Chrysler in 1985 as director of puter Inc. “Apple doesn’t make much; they integrate” what others make, he said. Apple has created a “virtual entity” that could serve as a model for privately owned Chrysler, Gilles said. One of Gilles’ design missions is to make Chrysler’s interiors flexible enough to incorporate the latest electronic devices, “so the car never becomes obsolete.” Gilles will have an ally there. The same day Gilles was promoted, Chrysler announced the promotion of Andreas Schell, 39, to vice president of electrical and electronics engineering. Schell, who came from DaimlerBenz, most recently was director of Chrysler’s Recovery and Transformation Plan and Strategy.c http://www.zadv.com http://www.hyundaigenesis.com http://www.zadv.com
Table of Contents Feed for the Digital Edition of Automotive News - August 25, 2008 Automotive News - August 25, 2008 Looming cuts worry L-M dealers Bad blood Study: Toyota top U.S. lender How the kid got in the picture Hyundai affiliate to build transmission plant White House names acting NHTSA chief S&P lowers outlook on Sonic, Group 1 Now you can talk back: Join our online community Dodge dealers: We're in a box Company gets a fix-it list for pickups, SUVs from J.D. Power Mahindra delays U.S. launch Dealer Beyer now selling a 2009 Obama Nissan to leap into U.S. commercial-truck fray in 2010 China's Brilliance to show cars in Detroit Lawsuit alleges insider trades by CarMax execs Honda: Dealerships will have Fits more than a month early Infiniti's stylish stretch Cadillac will offer 4-cylinder sedan in '10 Chrysler redesigns new design boss' spot in exec ranks Genesis aims at low-priced luxury Letter to the Editor It's show and tell for auto industry in Washington Price cuts both ways The love affair continues Advance ads cost a lot, but help little Dealer-customer mandatory arbitration works Lithia sheds 2 of its Detroit 3 stores Japan sales slide; output, exports keep expanding L.A. dealers split on taking thumbprints of buyers Picture This With redesigned TL, Acura adds power, awd Personnel Chevrolet adjusts plans for coming decade GM revamps its vehicle lineup to succeed in a changed world Caddy relies on model updates over product development Buick buzzes about China Dismal sales make future of Hummer uncertain Budgets may crimp the lineup at Saturn Dreams aside, Pontiac will rely on small fwd cars Will GMC overhaul truck offerings? GM downsizes product lineup GM's powertrain plan: Less weight, better technology Hummer hopes pickup brings new buyers Dealers 'Ambush' boosts GM Certified DealerTrack adds market price checks Wholesale used-vehicle prices inch up in July Mexico sales up 2.6% in July; '08 near pace of '07 Collectors revive GM classics Honda's new Fit subcompact: Bigger, sportier Survey: Suppliers reconsider business with Chrysler Web site offers vehicle listings from Detroit 3 Nissan trains inspectors to improve quality A bumpy ride for dealer/lawmaker Buchanan Detroit dealers duel over bulk mailing Story links Nissan suicides, work pressure Times change, but supplier talk doesn't Garbage in, good stuff out Creed's creations Automotive News - August 25, 2008 Automotive News - August 25, 2008 - (Page Intro) Automotive News - August 25, 2008 - (Page BRC1) Automotive News - August 25, 2008 - (Page BRC2) Automotive News - August 25, 2008 - Study: Toyota top U.S. lender (Page 1) Automotive News - August 25, 2008 - Study: Toyota top U.S. lender (Page 2) Automotive News - August 25, 2008 - Dodge dealers: We're in a box (Page 3) Automotive News - August 25, 2008 - Nissan to leap into U.S. commercial-truck fray in 2010 (Page 4) Automotive News - August 25, 2008 - Nissan to leap into U.S. commercial-truck fray in 2010 (Page 5) Automotive News - August 25, 2008 - Cadillac will offer 4-cylinder sedan in '10 (Page 6) Automotive News - August 25, 2008 - Cadillac will offer 4-cylinder sedan in '10 (Page 7) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 8) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 9) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 10) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 11) Automotive News - August 25, 2008 - The love affair continues (Page 12) Automotive News - August 25, 2008 - The love affair continues (Page 13) Automotive News - August 25, 2008 - Dealer-customer mandatory arbitration works (Page 14) Automotive News - August 25, 2008 - Dealer-customer mandatory arbitration works (Page 15) Automotive News - August 25, 2008 - Lithia sheds 2 of its Detroit 3 stores (Page 16) Automotive News - August 25, 2008 - Lithia sheds 2 of its Detroit 3 stores (Page 16a) Automotive News - August 25, 2008 - Lithia sheds 2 of its Detroit 3 stores (Page 16b) Automotive News - August 25, 2008 - Japan sales slide; output, exports keep expanding (Page 17) Automotive News - August 25, 2008 - Japan sales slide; output, exports keep expanding (Page 18) Automotive News - August 25, 2008 - Japan sales slide; output, exports keep expanding (Page 19) Automotive News - August 25, 2008 - Picture This (Page 20) Automotive News - August 25, 2008 - Picture This (Page 21) Automotive News - August 25, 2008 - Picture This (Page 22) Automotive News - August 25, 2008 - With redesigned TL, Acura adds power, awd (Page 23) Automotive News - August 25, 2008 - Personnel (Page 24) Automotive News - August 25, 2008 - Personnel (Page 24a) Automotive News - August 25, 2008 - Personnel (Page 24b) Automotive News - August 25, 2008 - Personnel (Page 24c) Automotive News - August 25, 2008 - Personnel (Page 24d) Automotive News - August 25, 2008 - Personnel (Page 25) Automotive News - August 25, 2008 - GM revamps its vehicle lineup to succeed in a changed world (Page 26) Automotive News - August 25, 2008 - Caddy relies on model updates over product development (Page 27) Automotive News - August 25, 2008 - Budgets may crimp the lineup at Saturn (Page 28) Automotive News - August 25, 2008 - Budgets may crimp the lineup at Saturn (Page 29) Automotive News - August 25, 2008 - Dreams aside, Pontiac will rely on small fwd cars (Page 30) Automotive News - August 25, 2008 - GM downsizes product lineup (Page 31) Automotive News - August 25, 2008 - GM's powertrain plan: Less weight, better technology (Page 32) Automotive News - August 25, 2008 - Dealers (Page 33) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 34) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 35) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 36) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 37) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 38) Automotive News - August 25, 2008 - Mexico sales up 2.6% in July; '08 near pace of '07 (Page 39) Automotive News - August 25, 2008 - Collectors revive GM classics (Page 40) Automotive News - August 25, 2008 - Honda's new Fit subcompact: Bigger, sportier (Page 41) Automotive News - August 25, 2008 - Survey: Suppliers reconsider business with Chrysler (Page 42) Automotive News - August 25, 2008 - Survey: Suppliers reconsider business with Chrysler (Page 43) Automotive News - August 25, 2008 - Nissan trains inspectors to improve quality (Page 44) Automotive News - August 25, 2008 - Nissan trains inspectors to improve quality (Page 45) Automotive News - August 25, 2008 - Creed's creations (Page 46) Automotive News - August 25, 2008 - Creed's creations (Page 47) Automotive News - August 25, 2008 - Creed's creations (Page 48)
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