Automotive News - September 29, 2008 - (Page 31) SEPTEMBER 29, 2008 • 31 Chrysler cuts 250-300 salaried workers DETROIT — Chrysler LLC planned to lay off 250-300 salaried workers on Friday, Sept. 26. The automaker has turned to layoffs to reach the 1,000 salaried job reductions announced in July. Chrysler spokesman Dave Elshoff declined to comment. Chrysler offered retirement and other incentives for salaried workers to leave after the July announcement. The carmaker had 18,500 salaried workers worldwide as of June 30, with about 9,500 in the Detroit area. plummeted 78 percent from the same quarter last year, the company said. The retailer posted $14.0 million in second-quarter net income, down from $65.0 million in the year-ago quarter. CarMax’s fiscal second quarter ended Aug. 31. In a statement, CEO Tom Folliard attributed the earnings decline to the poor economy and tough conditions in the auto market. CASH Cash crisis crimps Detroit 3’s finances continued from Page 1 ArvinMeritor raises forecast DETROIT — Auto supplier ArvinMeritor Inc. increased its profit forecast for its fiscal year, which ends this month, by as much as 10.7 percent, according to a statement released last week. That would mean the company would generate estimated annual earnings from its continuing operations of between $113.0 million and $120.2 million, based on 72.9 million shares outstanding. Through the first nine months of its fiscal year, ArvinMeritor had $74.0 million in income from its continuing operations, up from a loss of $7 million during the same period a year ago. Bill Ford sells some Ford stock DETROIT — Ford Motor Co. Executive Chairman Bill Ford sold about one-sixth of his common stock holdings on Sept. 18, according to a Securities and Exchange Commission document. Bill Ford, 51, sold 1 million shares, making $5.05 million on the sale, according to a Form 4 filing with the SEC. He still owns nearly 5 million shares of common stock outright and almost 400,000 more through a company plan, voting trust or family trusts. Toyota plans CNG concept LOS ANGELES — Toyota Motor Corp. plans to show a compressednatural-gas Toyota Camry Hybrid concept at the Los Angeles auto show in November. The new concept marks a return to the natural-gas competition for Toyota, which sold a CNG-powered fourcylinder Camry to fleet customers in California in 1999. That experiment was discontinued after a year. Ford Motor reported $26.6 billion in cash and equivalents on June 30, down $10.8 billion from the year-ago date. Fitch Ratings said Ford would reach the danger point if its cash on hand fell to $12 billion. Meanwhile, Chrysler had $11.7 billion on June 30, after borrowing $2 billion, according to Standard & Poor’s. That’s up from $10.6 billion a year earlier, Chrysler says. Chrysler co-President Jim Press says the company is meeting its cash-flow targets. Cash flow is the difference between the cash a company takes in and the amount it pays out over a given period. Analysts suggest the Detroit 3 probably can’t expect to add much to their cash cushions this year or in 2009. Automakers and suppliers are likely to get $25 billion in low-interest federal loans to help produce fuel-efficient vehicles. Those loans could help ease the Detroit 3’s cash-flow crisis. But the Bush administration says it may take as long as 18 months for the first batch of loans to become available. And the loans will fund only tightly defined projects to improve fuel economy. In July, GM announced a plan to 16 months. But over the past year, Ford has Detroit 3’s cash on hand and negotiable assets spent some cash on COMPANY JUNE 30, 2008 JUNE 30, 2007 one-time items, which GM $21.0 billion $27.2 billion suggests its overall exFord $26.6 billion $37.4 billion penditures will decline. Chrysler $11.7 billion $10.6 billion The company also Source: Companies, Standard & Poor’s has an untapped credit facility worth $11.5 raise $15 billion through cost cutting, billion, Fitch notes. additional borrowing and asset sales. But that plan could be harder to exe- Long way to 2010 Many analysts predict a 2010 recute in current credit markets. bound in U.S. vehicle sales. MoreGM draws down over, they expect the Detroit 3 to realLast week, GM said it had bor- ize big savings on pensions and rowed the final $3.5 billion of a $4.5 health benefits in two years under billion credit facility. Much of that their new contract with the UAW. amount already is earmarked to reBut some analysts wonder whether pay $750 million of corporate debt the domestic automakers can hang on that comes due next month and to until then without running out of cash. pay Delphi Corp. more than $1.2 bilProjections of 2009 U.S. new-vehicle lion as part of the supplier’s reorga- sales range from 13.7 million to 14.3 nization. million units. As recently as 2005, au“It seemed like a good time to take tomakers sold nearly 17 million new the money in and make sure it was cars and trucks in the United States. available when and where we need Worse, unfriendly capital markets it,” GM Treasurer Walter Borst said are hobbling the Detroit 3’s restruclast week. turing plans, said Robert Schulz, a But the move fueled worries about managing director at Standard & GM’s liquidity. Last week, Fitch down- Poor’s. During an industry confergraded its issuer default rating of GM ence last week in New York, Schulz by a notch to CCC, citing GM’s “lack of predicted domestic automakers will access to capital.” Such a rating im- have to do even more to eliminate plies that default “is a real possibility,” jobs and cut production capacity. Fitch says. Said Schulz: “It’s a long way to go If Ford’s negative cash flow were to between now and 2010.” c continue at the rate of the past year, its cash reserves would reach the Richard Truett contributed danger level of $12 billion in about to this report Nest eggs CarMax net income falls RICHMOND, Va. — Secondquarter profits at CarMax Inc., the nation’s largest used-car retailer, SURVIVAL Detroit 3 embark on plans for future continued from Page 1 stock watch Manufacturers BMW-ADR Daimler AG Fiat S.p.A.-ADR Ford General Motors Honda-ADR Hyundai-ADR Nissan-ADR PSA-ADR Renault-ADR Suzuki-ADR Toyota-ADR Volkswagen-ADR Closing price Sept. 26 Closing price Sept. 19 Weekly percent change 52-week high 52-week low Chrysler Chrysler is negotiating partnerships with other automakers to develop new small cars that will help it meet fuel economy standards. But so far, only its partnership with Nissan has produced results. Nissan will build a small car called the Dodge Hornet, which is scheduled to arrive in 2010. Chrysler’s partnership with Chery Automobile Co. in China was supposed to produce a second small car, but it is still a work in progress. Yet another partnership with BMW, Daimler and General Motors has allowed Chrysler to develop a hybrid powertrain for the Ram pickup. That powertrain — a Two Mode hybrid produced by the Hybrid Development Center in suburban Detroit — also will power two Chrysler SUVs. But Chrysler’s product portfolio still looks thin. Now that the redesigned Ram has debuted, dealers will not get any all-new vehicles until the first quarter of 2010. So Chrysler’s surprise introduction of three electric cars appears calculated to show that it can develop its own technology. Chrysler is under pressure to show it can qualify for a share of the $25 billion federal loan package approved by the U.S. House last week. That money is available only to automakers who develop highly fuelefficient vehicles. Chrysler’s electric-vehicle strategy differs from that of GM, which created $42.30 56.68 25.50 4.81 9.76 32.00 11.00 14.46 42.09 73.30 19.50 90.76 74.70 Closing price Sept. 26 $43.30 57.33 25.50 5.29 13.08 32.55 11.00 14.76 46.49 73.39 17.80 91.35 75.00 Closing price Sept. 19 –2.3% –1.1 – –9.1 –25.4 –1.7 – –2.0 –9.5 –0.1 9.6 –0.6 –0.4 Weekly percent change $67.80 111.65 34.85 9.24 43.20 37.64 20.00 23.75 92.50 165.75 33.25 119.00 87.22 $37.50 52.04 14.15 4.24 8.81 27.01 11.00 13.19 41.16 67.35 17.80 82.08 41.50 Retail Groups Asbury Automotive Group AutoNation Group 1 Automotive CarMax Lithia Motors Penske Auto Group Sonic Automotive the Volt as an all-new vehicle. Chrysler said it doesn’t have the money to design new platforms and new powertrains at the same time. So Chrysler’s electric powertrains will be adapted to existing vehicles over the next five to10 years. Of the three cars shown last week, the Chrysler EV (a Town & Country minivan) and the Jeep EV (a Wrangler) were plug-in hybrids powered by an electric motor and equipped with a gasoline engine to generate power when the lithium ion battery loses charge. The Dodge EV, a Lotus-based sports car, is a pure electric. But Chrysler needs more than a handful of electric cars to survive. It needs more alliances to bring volumes of high-gas-mileage cars, and soon. and Cadillac Escalade. Ford CEO Alan Mulally has a plan, and he is sticking to it. Ford is banking on its European design and technology as it transforms its vehicles. Over the next three years, Ford will introduce at least six small European-bred cars in the United States. Those cars most likely will be the new European Focus compact four-door, five-door and convertible; the new Fiesta subcompact; and the European Focusbased C-Max and Kuga small crossovers. Ford is expected to offer the cars with EcoBoost engines, which combine turbocharging and direct injection. And they will be assembled in North America. Ford also is putting its vehicles on a diet. Derrick Kuzak, Ford’s product development chief, has said Ford vehicles will lose an average of 700 pounds with the use of smaller engines and lightweight materials. Last week, Kuzak said Ford’s lineup of compact, or Cclass, vehicles will form the heart of Ford’s lineup Ford appears behind the competition in the race to introduce plug-in hybrid cars. But Ford’s Europeaninspired lineup offers the company’s best prospects for a turnaround, says John Casesa, an analyst for Casesa Shap
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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