Automotive News - May 26, 2008 - (Page 12)

12 • MAY 26, 2008 opinion 25% is high, but Chrysler is wise to revisit SCORE Chrysler should be applauded for its apparent decision to emulate SCORE, the enlightened supplier cost-reduction program that was a key element of the company’s revival in the 1990s. But Chrysler’s demand for a 25 percent cut in component costs over three years is too ambitious. SCORE, for Supplier Cost Reduction Effort, was a high point in U.S. automaker-supplier relations in the 1990s. By rewarding suppliers for cost-reSCORE, for duction ideas, it symbolized an era of cooperation and mutual Supplier Cost benefit between Chrysler and its Reduction Effort, parts makers. The system helped Chrysler mine new techwas a high point nology and build a strong relationship with suppliers. in U.S. automaker- Now the idea has been revived. Chrysler says it will split supplier relations. the savings with suppliers as it pushes them to meet the prices available from low-cost countries such as China and India. To help reach the 25 percent target, Chrysler says it will make key changes in its operations. Giving suppliers a 30day notice of production schedules rather than the typical one-week notice will eliminate unpredictable production spikes and the extra cost that suppliers incur. Chrysler also intends to reduce late engineering changes and share more parts among nameplates. But in a climate of rising material costs and huge pressure on suppliers’ bottom lines, 25 percent is over the top. It apparently will come in addition to cuts already written into existing parts contracts. Chrysler purchasing director John Campi says he aims to lower costs without reducing supplier profits. But 25 percent won’t be absorbed easily, even with SCORE-like collaboration. SCORE was launched by Tom Stallkamp, then Chrysler’s purchasing boss, in the 1990s, then dismantled by Wolfgang Bernhard as COO after Daimler had dispatched Bernhard to Auburn Hills in 2000. Campi has shown that he understands the need for less contentious and more cooperative relations between suppliers and the Detroit 3. Indeed, he is meeting with Stallkamp this month. Campi told an industry group this month that he wants to “work in fierce collaboration” with suppliers. That’s an admirable goal. In fact, it may be the only way for an independent Chrysler to make its way in the world. Last week, Automotive News published a wonderful remembrance of the 50th anniversary of Nissan in the United States. It has been an interesting ride to say the least. How long will it be before most folks have forgotten that there was a Datsun in the United States? Most of us remember the Datsun 510s raced by Pete Brock; he helped put the company on the map. I was pleased that we profiled Mr. K, otherwise known as Yutaka Katayama, a rebel within the organization who turned out to be a hero in America. Katayama was not considered a star when the automaker shipped him here, and the United States was certainly no plum job. It had been a disaster up to then, and most folks in Japan thought it was a great way to get rid of a challenging executive. But the man was creative, and he, along with so many others, made Datsun into a DAILY AUTO NEWS >> You can get the news you need every day. Go to www.autonews.com/signup and sign up for our daily e-mail newsletter. An overnight success in 50 years real success story. That’s why the issue was such an enjoyable read. And Mr. K brought the 240Z to America with the right name. Today, you realize the success that Nissan CEO Carlos Ghosn has had, but it obviously hasn’t been smooth sailing. As with Mr. K, no one really believed Ghosn would succeed either. It seems to be a bad idea to bet against Nissan. Some time ago, the company decided to use the name Nissan everywhere in the world. Datsun is gone forever, everywhere. And today you pronounce “Nissan” with a bit of a French accent. Perhaps tomorrow it will have some American accent as well. People in the auto industry don’t usually dwell on history. They probably should spend more time with it. It’s important for the future. In September, Automotive News will No one really believed Mr. K or Carlos Ghosn would succeed. It seems to be a bad idea to bet against Nissan. publish a huge edition celebrating the 100th anniversary of General Motors, a company with a thousand stories, all interesting to history buffs around the world. Anniversaries are often taken for granted. Last week, we were pleased to remind everyone that Nissan had been in the United States for half a century. Next comes GM, with a legacy a mile long. It’s always an exciting time in the auto industry. But it’s nice every now and again to stop and reflect on the history of our business. It’s worth savoring. ability to use it. Apparently, the only acceptable incentive is one that benefits only Japanese companies. Whenever the U.S. government and industry have banded together to address serious national challenges, they have succeeded. The new urgencies caused by surging fuel prices, supply shortages and climate concerns again compel such an effort. Knollenberg’s proposal is one attempt to put American manufacturers at least on an equal footing with the companies that enjoy Japanese government support. STEPHEN J. COLLINS President Automotive Trade Policy Council Washington The Automotive Trade Policy Council is a nonprofit association that represents the Detroit 3 on trade issues. Obama’s comments were out of line Japan does it; why shouldn’t we? To the Editor: It’s said that imitation is the highest form of flattery. It is ironic that Rep. Joe Knollenberg’s proposal to offer tax credits to American auto manufacturers for increased research in fuel-saving technologies is criticized by an executive To the Editor: I am writing in reference to Sen. Barack Obama’s remarks about his grandfather’s Ford Granada in which the senator learned to drive (Final Assembly, May 12). The remarks were made on Indianapolis radio station WFBQ-FM. Obama said, “It may be the worst car that Detroit ever built.” For someone aspiring to be president of this great country Obama seems quick to look for reasons to criticize American workers and their products. We do not live in a perfect world. It is easier for some people to look for faults than to see success. America has been very good to Obama. It is time that he finds some good in this country and its people. LOUIS MATT Owner Matt Ford Sales Inc. Buckner, Mo. THE WEEKLY NEWSPAPER OF THE INDUSTRY Established in 1925, published every Monday by Crain Communications Inc. Keith E. Crain, Publisher and Editor-in-Chief Peter Brown, Associate Publisher and Editorial Director David Sedgwick, Editor Edward Lapham, Executive Editor HOW TO REACH US Web site: www.autonews.com Editorial staff autonews@crain.com Phone: 313-446-0361 Fax: 313-446-0383 Circulation Advertising subs@crain.com rgreer@crain.com Phone: 888-446-1422 Phone: 313-446-6050 Fax: 313-446-6777 Fax: 313-446-8030 Editorial data/research To locate information that has been published in Automotive News, call 313-446-1662. Customer service To start or renew a subscription or to report an address change or a delivery problem, e-mail subs@crain.com or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). AUTOMOTIVE NEWS (ISSN 0005-1551) is published weekly at 1155 Gratiot Ave., Detroit, MI 48207-2997. Periodicals postage is paid at Detroit, MI and at additional mailing offices. Postmaster: Send address changes to AUTOMOTIVE NEWS, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. Canadian Post International Publications Mail Product (Canadian Distribution) Sales Agreement #40012850, GST#136760444. Canadian return address: 2-7496 Bath Road, Mississauga, ON L4T 1L2 Printed in the U.S.A. We invite letters from our readers. Please limit your letter to 250 words and tell us whether we may print it. We reserve the right to edit it. Include your name and title, the name of your company, your city and your state. Also include your telephone number or your e-mail address. E-mail letters to: autonews@crain.com Or send them to: Letters Automotive News 1155 Gratiot Ave. Detroit, MI 48207-2997 of an auto company headquartered in Japan (“Honda exec red-flags Detroit 3 aid,” May 12). Honda and other Japanese automakers have long benefited from Japan’s closed automotive market and its use of more than $500 billion in government funds to subsidize exports by keeping its currency artificially low and pursuing industrial planning programs to promote and support preferred industries, such as autos. The government of Japan has also channeled an immense amount of direct and indirect funding to finance r&d into alternative-fuel technologies for years. Interestingly, Japanese auto companies, too, could benefit from the r&d incentives of Knollenberg’s bill if their research was done in the United States. The motive to deny the provision to U.S. automakers, and ultimately to American consumers, seems more important than the Japanese companies’ see LETTERS, Page 14 http://www.autonews.com/signup http://www.autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - May 26, 2008

Automotive News - May 26, 2008 Bad times? Not for CEO paychecks GM seeks Volt tax break to avoid $40k sticker Ford's big cuts aim for a Honda-sized lineup Automotive News gets new marketing communications director Toyota pushes N.A. suppliers to match offshore prices VW predicts 5% U.S. sales gain Toyota plans 3 plants for hybrid batteries GM's American Axle strike tab: $2.82 billion Lawsuit in Florida targets congressman's dealership Orbiting the blogosphere Kia to build small cars in U.S. plant VW Mexico exec will run North American purchasing Fiat mulls 500 minicar for U.S. GM scraps big rwd sedans for Chevrolet and Buick Hyundai spends like never before to launch Genesis luxury sedan Surprise: Suzuki slides as fuel prices rise GM paid Walter Chrysler a whopping $600,000 a year Chrysler sends mystery shoppers to dealerships Toyota owes royalties on some hybrids GM, American Axle to resume output Ford predicts bigger demand for smaller engines in Escape This is Volvo? Ads sell chic, not just safety An overnight success in 50 years Obama's comments were out of line Japan does it; why shouldn't we? 25% is high, but Chrysler is wise to revisit SCORE Safety efforts must focus on the driver Blame the dealer for poor service Don't judge Ford quality by just one car Ford quality is best in many years Mitsubishi considers piggybacking with Caterpillar suppliers to cut costs Nissan to make lithium ion batteries 'Boss Ket,' Connery inspire Tim Jackson Germany leads rise in Europe sales Court: Buyers must act in good faith to win lemon law damages Nissan wants suppliers to reduce utility bills Bajaj: From scooters to autos The next $2,500 car? Infiniti will look different, add engine power in Europe Lamborghini boss wants to keep the big engines Lamborghini ups ante in 'entry' supercars Continental exec: We're done selling VDO assets Honda plans Fit hybrid Outgoing Visteon CEO to receive $2.5 million Audi production chief: Cooperation with Porsche will grow Picture this RV shipments fall in March M-B will buy Chrysler studio Supplier personnel VW expects to reap big share of U.S. diesel market Valeo CEO Morin: Pass rising costs to consumers Suppliers to the 2008 Nissan Altima Dealers Auction workshops demystify Web buying April used-vehicle prices: Light trucks fall and cars rise Volvo certified plan offers free satellite radio Mulally: Full speed toward smaller Toyota plans credit card Sanfilippo switches agencies International idles plant Honda Pilot starts at $28,230 Plastech plans assets auction What counts GM's 2-pronged strategy for Calif. rules: If you can't beat 'em . . . meet 'em New wheels for the cop shop The cost of luxury? For Hyundai, it would have been $2.5 billion New tools allow early design input from consumers Lexus in the sky with carbon: How ex-Beatle's PR effort tanked Buy an '08 . . . get a .44 $4 gasoline gives new cachet to aging econo-beaters Time tips its hat to Tata Car marketers: Magazines must widen ad reach Automakers seek 'one-to-one' approach to magazine ads Auto ads go to the movies Here's the next big thing: Ads tailored to you GMC courts women with Acadia

Automotive News - May 26, 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.