Automotive News - September 29, 2008 - (Page 1) autonews.com ® SEPTEMBER 29, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY 3 strategies, with the wolf at the door GM, Ford and Chrysler place new-product bets Bradford Wernle bwernle@crain.com Three ways 1 goal, 3 strategies for Detroit 3 Chrysler: Plans to line up partners to develop small cars. Says it will market an electric car in 2010 and spread electrics through existing lineup Ford: Small cars, small cars, small cars. Ford will bring 6 European small cars to U.S. General Motors: Volt plug-in, yes, but also an array of hybrids, plus fuel-efficient diesels and gasoline engines efficient — vehicles such as the compact Chevy Cruze. Like Chrysler, Ford and GM hope their big plays will be game-changers by 2010, when pent-up customer demand could bring customers flocking back. Here’s a look at their survival strategies: see SURVIVAL, Page 31 Credit freeze plunges Detroit 3 in cash crisis Jim Henry autonews@crain.com news ANALYSIS DETROIT — Call it Chrysler’s Hail Mary strategy. Caught in a vise between looming federal fuel economy regulations and its own desperate financial circumstances, Chrysler LLC revealed last week that it will put a line of electric vehicles into production — one of the vehicles in 2010. With its revelation, Chrysler hoped to silence critics who said the company had no new products to brag about. The tactic also buys more time for Chrysler to find partners to help it introduce fuel-efficient cars and trucks. “These are extraordinary times for the auto industry,” said Chrysler LLC CEO Bob Nardelli as his company unveiled three electric vehicle prototypes. Chrysler has no option but to invest in alternative powertrain development, even if it means “gutwrenching” decisions to cut other projects, Nardelli said. Now, the battle lines have been drawn. Each of the Detroit 3 has a distinct, high-stakes survival strategy. Ford Motor Co. is betting on a batch of small cars developed in Europe to attract buyers seeking fuel efficiency. Meanwhile, General Motors is investing in a varied range of smaller vehicles and efficient powertrains. While the Chevrolet Volt plug-in hybrid has generated headlines, GM believes it can generate high-volume sales with the less exotic — but fuel- The Detroit 3 face a cash crisis that threatens their solvency before an anticipated recovery in 2010, analysts suggest. Credit largely has dried up for the Detroit 3 at a time when slumping sales are depriving the companies of critical revenue, analysts say. The near-freeze of credit caused by Wall Street’s meltdown is making it even harder for General Motors, Ford Motor Co. and Chrysler LLC to find new sources of money to borrow. “With credit being tighter, that affects the ability of the companies to raise new capital and the consumer’s ability to finance new purchases,” said Mark Oline, a Fitch Ratings analyst. GM CEO Rick Wagoner concurred. “Anything that can be done to loosen up that logjam in automotive credit is going to help, from the standpoint of production, employment and demand for vehicles,” Wagoner said last week at the site of a new GM engine plant in Flint, Mich. “We’ll see how that turns out,” Wagoner said. “It seems to be changing by the hour.” Dwindling cash On June 30, GM had $21.0 billion on hand, down from $27.2 billion a year earlier. At that rate of decline, by mid-2009 GM would have $15 billion on hand — the minimum amount industry analysts say the company needs to conduct normal operations. see CASH, Page 31 ‘Flash of Genius’ A new Hollywood film depicts the troubled journey of inventor Robert Kearns, who fought Detroit over intermittent windshield wipers. | PAGE 21 | SHANNON SZWARC/LEDGER-ENQUIRER A Bill Heard Enterprises employee locks the gate at the flagship Chevrolet store in Columbus, Ga., one of 13 that closed last Wednesday. Mr. Big Volume reaches the end of the line April Wortham and Chrissie Thompson awortham@crain.com On the Web This week at www.autonews.com: Wednesday: Automakers report U.S. auto sales for September. Wednesday: The CEOs of Audi, Lamborghini and Ferrari are scheduled to speak to the Reuters Autos Summit in Paris. Thursday: First day of Paris auto show coverage Friday: Second day of Paris auto show coverage Online readers comment ➤ 30 Last week, Mr. Big Volume’s empire came tumbling down. On Wednesday, Sept. 24, Bill Heard Enterprises Inc. closed its 13 remain- Bill Heard spent a lifetime building the largest and most successful group of Chevrolet dealerships in the world. ing dealerships, including the flagship store in Columbus, Ga., that his father had founded nearly 90 years ago. Hendrick Automotive Group, the 58-store dealership group owned by NASCAR team owner Rick Hendrick, is in talks to buy some of the closed Bill Heard Enterprises stores. “If there’s a potential opportunity to expand our company, we’re always going to be interested in discussing it,” Hendrick said in a statement. Other major dealers are rumored to be potential buyers, but Updates on the future of Heard’s closed stores. autonews.com NEWSPAPER none have confirmed an interest. The man who called himself “Mr. Big Volume” regularly ranked among the top 10 dealers in the country. With retail sales of 40,781 units last year, Heard’s operation ranked 13th on Automotive News’ list of the top 125 U.S. dealership groups. Heard’s retail sales averaged 2,913 see HEARD, Page 30 $ http://www.autonews.com http://www.autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - September 29, 2008 GM, Ford and Chrysler place new-product bets Credit freeze could mean cash crisis Mr. Big Volume reaches the end of the line Korea's revolving door Mazda quits Ford Credit for Chase Mitsubishi, UAW reach tentative agreement Volt could break feds' 100 mpg ceiling Chase cuts back on auto leasing Target for Traverse: No. 1 in large crossovers BMW's new 7 series: Timing may be all wrong Tucson revisited Can Ford light fire under Fiesta? Lithia puts brakes on used-car stores Revived Mercury will focus on 3 segments VW taps 'zealots' to promote diesels Farley, Leuliette will kick off World Congress The new Soul (and nose) of Kia Hyundai: Drivetrain key to more mpg Taxpayers at risk if firms get fed loans - then fail GM plans high-tech small engines for Volt and Cruze Buick looks upscale Denso says U.S. woes will cut its profits Denso: No plans to make hybrid parts in U.S. Bailouts are a bad idea Chic small cars? Check them out at the Paris show Credit's no problem, but a weak brand is Helping dealers helped GM Ford field rep didn't help at all Who knew? Electric cars are fun to drive Where is the power going to come from? Hyundai shifts its U.S. ad agency Hyundai, Kia mold separate identities Behind on hybrids, Hyundai sets high goals Dealers Flashes of genius, years of turmoil No cop-out; car designed for police use PICTURE THIS: A trip to the bank RV sales drop 31.9% in June Mexico sales off 4.8% in Aug., 1.2% for 8 mos. Suzuki to aim pickup at motorcycle owners Experts: Learn Korean hierarchies Readers' comments on Bill Heard's collapse Bill Ford sells some Ford stock CarMax net income falls ArvinMeritor raises forecast Toyota plans CNG concept Chrysler cuts 250-300 salaried workers Minority supplier drops stamping business Will Cerberus buy up Chrysler to wave bye-bye? Rioters kill supplier exec in India No pickup seen for pickups Piech's ploy was masterstroke in war with Porsche Honda's highway groove music: It sounded better on vinyl St. Louis dealer to paper that outsourced typesetters: 'Deal me out' Automotive News - September 29, 2008 Automotive News - September 29, 2008 - (Page Intro) Automotive News - September 29, 2008 - (Page Bellyband1) Automotive News - September 29, 2008 - (Page Bellyband2) Automotive News - September 29, 2008 - Mr. Big Volume reaches the end of the line (Page 1) Automotive News - September 29, 2008 - Mr. Big Volume reaches the end of the line (Page 2) Automotive News - September 29, 2008 - Volt could break feds' 100 mpg ceiling (Page 3) Automotive News - September 29, 2008 - Tucson revisited (Page 4) Automotive News - September 29, 2008 - Tucson revisited (Page 5) Automotive News - September 29, 2008 - The new Soul (and nose) of Kia (Page 6) Automotive News - September 29, 2008 - The new Soul (and nose) of Kia (Page 7) Automotive News - September 29, 2008 - Buick looks upscale (Page 8) Automotive News - September 29, 2008 - Buick looks upscale (Page G1) Automotive News - September 29, 2008 - Buick looks upscale (Page G2) Automotive News - September 29, 2008 - Buick looks upscale (Page G3) Automotive News - September 29, 2008 - Buick looks upscale (Page G4) Automotive News - September 29, 2008 - Buick looks upscale (Page G5) Automotive News - September 29, 2008 - Buick looks upscale (Page G6) Automotive News - September 29, 2008 - Buick looks upscale (Page G7) Automotive News - September 29, 2008 - Buick looks upscale (Page G8) Automotive News - September 29, 2008 - Buick looks upscale (Page G9) Automotive News - September 29, 2008 - Buick looks upscale (Page G10) Automotive News - September 29, 2008 - Buick looks upscale (Page G11) Automotive News - September 29, 2008 - Buick looks upscale (Page G12) Automotive News - September 29, 2008 - Flashes of genius, years of turmoil (Page 9) Automotive News - September 29, 2008 - Denso says U.S. woes will cut its profits (Page 10) Automotive News - September 29, 2008 - Denso says U.S. woes will cut its profits (Page 11) Automotive News - September 29, 2008 - Ford field rep didn't help at all (Page 12) Automotive News - September 29, 2008 - Ford field rep didn't help at all (Page 13) Automotive News - September 29, 2008 - Where is the power going to come from? (Page 14) Automotive News - September 29, 2008 - Where is the power going to come from? (Page 15) Automotive News - September 29, 2008 - Hyundai, Kia mold separate identities (Page 16) Automotive News - September 29, 2008 - Hyundai, Kia mold separate identities (Page 17) Automotive News - September 29, 2008 - Behind on hybrids, Hyundai sets high goals (Page 18) Automotive News - September 29, 2008 - Behind on hybrids, Hyundai sets high goals (Page 19) Automotive News - September 29, 2008 - Dealers (Page 20) Automotive News - September 29, 2008 - Dealers (Page 21) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 22) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 23) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 24) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 25) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 26) Automotive News - September 29, 2008 - Mexico sales off 4.8% in Aug., 1.2% for 8 mos. (Page 27) Automotive News - September 29, 2008 - Suzuki to aim pickup at motorcycle owners (Page 28) Automotive News - September 29, 2008 - Experts: Learn Korean hierarchies (Page 29) Automotive News - September 29, 2008 - Readers' comments on Bill Heard's collapse (Page 30) Automotive News - September 29, 2008 - Chrysler cuts 250-300 salaried workers (Page 31) Automotive News - September 29, 2008 - Minority supplier drops stamping business (Page 32) Automotive News - September 29, 2008 - Minority supplier drops stamping business (Page 33) Automotive News - September 29, 2008 - St. Louis dealer to paper that outsourced typesetters: 'Deal me out' (Page 34) Automotive News - September 29, 2008 - St. Louis dealer to paper that outsourced typesetters: 'Deal me out' (Page 35) Automotive News - September 29, 2008 - St. Louis dealer to paper that outsourced typesetters: 'Deal me out' (Page 36)
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