Automotive News - May 26, 2008 - (Page 55)

MAY 26, 2008 • 55 VW SALES ‘Sexy’ Tiguan gets big marketing push continued from Page 3 year, but the Touareg isn’t due for a revamp until 2010. “Touareg has found its niche — it will be part of the brand in the future,” says Bennett. “We expect it to gain traction with the diesel.” Over the past two years, VW has sought to improve sales by gradually lowering its pricing premium from 10 percent to about 1 percent — a level management wants to maintain in the United States. began selling the Touareg at the height of the brand’s attempts to become a premium competitor. With a base price of $39,990, including shipping, it’s the only VW nameplate that hasn’t been repositioned. The highpriced Phaeton luxury sedan was phased out at the end of the 2006 model year. VW sold 2,835 Touaregs through April — down 11.4 percent — and 8,812 in 2007. Bennett defends the Touareg, saying that it’s a victim of a declining segment under pressure because of rising fuel prices. VW will let this generation sell as a niche vehicle, he says. A 3.0-liter clean diesel version debuts next Tiguan is key Tim Ellis, vice president of marketing, says the Tiguan “is one of the most significant launches” that VW has this year because “it’s sexy and we will put spin and commercials behind it.” An integrated campaign with print ads and cable and network TV commercials began May 19, Ellis says. The Tiguan debuted this month as one of the pricier vehicles in its segment. Bennett says the price should not be a problem. “There is a fair amount of content on the Tiguan,” Bennett says. “Our customers have always given us a certain premium for our vehicles.” ‘We have made strides’ VW still must improve its perception. The brand was fifth from the bottom in last year’s J.D. Power and Associates initial quality survey. Results for 2008 haven’t been revealed. “We have made strides in all the metrics we use, and they’ve indicated we are moving in the right direction,” Ellis says. VW executives aren’t predicting when sales will return to 300,000 units. VW last hit that mark in 2003. VW is aiming for annual U.S. sales of 800,000 units within 10 years, which includes vehicles to be produced at a U.S. factory. The location of that plant will be revealed this summer. c Volkswagen executives say they will promote the new vehicles but will not emphasize the Touareg SUV, shown. VW’s Toscan Bennett says the Touareg is a victim of a declining segment under pressure because of rising fuel prices. PAY Median package for CEOs up from ’06 continued from Page 1 and 4 in 2007 total compensation also saw big stock-related increases: John Plant at TRW Automotive Holdings Corp., Robert Keegan at Goodyear Tire & Rubber Co. and Christopher Kearney at SPX Corp. But the stock market gives, and it takes away. John Barth of Johnson Controls Inc., No. 9, saw a drop of almost $17 million in total compensation. In 2006, he was the one celebrating a big stock-related gain. In 2007, he recorded none. Roger Penske, No. 33, of Penske Automotive Group Inc. also took a hit. His compensation dropped from nearly $16 million in 2006 to $1.1 million last year. His stock award and option gains totaled more than $15 million in 2006 but just over $349,000 last year. The median compensation for CEOs in the survey was $4.1 million, slightly higher than the $4.0 million median 2006 compensation. In 2007, nine automotive industry CEOs received at least $10 million. That’s up from eight in 2006. All but one of the nine worked for suppliers. The lone automaker CEO to make the list was Ford Motor Co.’s Alan Mulally. Mulally also topped all CEOs in the “other” compensation category, at $1.4 million. That figure included $109,543 in relocation costs and temporary housing and $752,203 for personal use of company aircraft. Ford allows the executive, along with family and guests, to use aircraft “in order to ease the burden of Mr. Mulally moving to Southeast Michigan and away from his family in Seattle,” according to Ford’s proxy statement. He joined Ford in September 2006. The king of the “other” pay category isn’t Mulally, however. He’s not even a CEO. It’s Magna International Chairman Frank Stronach. Most of his $65.7 million in compensation came from affiliate companies, and that amount is listed as “other.” Magna’s co-CEO, Siegfried Wolf, received the lowest base salary in the survey, just $100,000. But additional forms of compensation made Wolf No. 6 on the CEO list, with total compensation of $12.7 million. Magna’s other co-CEO, Don Walker, made $10,500 more in base salary than Wolf. Walker’s total compensation was $11.3 million, enough to put him at No. 8. Magna traditionally has offered low salaries and big incentives to top executives. The $10 Million Men What counts The compensation list is based on data compiled for Automotive News by Equilar Inc., an executive compensation research firm in San Mateo, Calif. Equilar analyzed proxy statements and other filings of public companies. Automotive News defines total compensation as the amount an executive received in 2007. It consists of base salary, bonuses, incentive plan compensation, exercised stock options, vested stock awards and other compensation. That last category covers perks ranging from club memberships to use of corporate aircraft. The accompanying table also lists accumulated pension benefits and money squirreled away in deferred-compensation retirement plans, but Automotive News does not add those amounts to total compensation. Nor does it estimate the value of unexercised stock options or stock awards that have been promised but not yet paid out. c 1. Alexander Cutler Eaton 2. John Plant TRW 3. Robert Keegan Goodyear 4. Christopher Kearney SPX 5. Theodore Solso Cummins 6. Siegfried Wolf Magna Dealership groups lag Among the executives with more modest pay were the heads of the publicly traded automotive retailers. Their stocks have been battered. AutoNation Inc.’s Mike Jackson, No. 20, saw his pay drop because of a dramatically lower bonus payout and lower stock gains. Lithia Motors’ Sid DeBoer, No. 34, was one of just two CEOs on the list whose total compensation was below $1 million in 2007, It’s good to be Alan In terms of a simple paycheck, Mulally, No. 7, was the big winner in 2007. He was the only CEO in the survey to take home $2.0 million in base salary last year. Mulally’s total compensation was $12.0 million, more than half of which came from bonuses and incentive pay. 7. Alan Mulally Ford 8. Don Walker Magna 9. John Barth Johnson Controls thanks to his board’s decision to cut bonuses. The other CEO below $1 million was Theodore Zampetis, No. 35, of tiny Shiloh Industries Inc. The Ohio maker of blanks, stampings and as- semblies is the smallest public company on the list, with 2007 revenues of $590 million. The total compensation of Richard E. Dauch, No. 10, at $9.2 million can hardly be considered small. But the CEO of American Axle & Manufacturing Holdings Inc. may get more. A week after American Axle workers went on strike to protest the company’s demands for big wage cuts, American Axle’s board postponed acting on proposed executive bonuses and other incentives for Dauch and other executives for 2007. c VOLT Sticker will depend on govt. incentives continued from Page 1 mid-sized 2009 Toyota Camry hybrid has a base price of $26,310, including shipping. And the 2008 Toyota Prius starts at $22,160, including shipping. ‘Work in progress’ “The whole story on pricing is still a work in progress,” says the source. “The final price to the customer will heavily depend on whether the next administration in Washington is willing to establish incentives for customers and producers. Absent some sort of tax incentive, a $30,000 price is not likely.” Congressional Democrats appear willing to help GM. Last week, the Democrat-controlled House of Representatives approved a $55 billion assortment of tax breaks that included a subsidy for plug-in hybrids. GM unveiled the mid-sized Volt concept at the 2007 Detroit auto show. At the time, product chief Bob Lutz said GM planned to sell the sedan at a price similar to competing vehicles. There are no vehicles on the market with a Volt-type powertrain. But the Backers may ‘reload’ The measure has received little attention because its prospects are uncertain in the Senate and the White House is threatening a veto. Nevertheless, one industry lobbyist said he expects GM’s congressional supporters will have an opportunity “to reload.” In a meeting with bloggers in March during the New York auto show, Lutz implied that GM would be willing to sell the Volt at a loss initially. The Volt would help GM develop technology and improve the company’s image, he noted. “We’re now talking to the board about a lot of programs where it could be years before we make a dime on it,” Lutz said in a video of the meeting posted in April on GM’s FastLane blog. “The board said, ‘Hey, don’t even talk to us about profitability. General Motors needs this car.’ ” c Chevy Volt update Sources expect November 2010 launch GM wants government incentives to cut price; if not Sticker near $40,000 is likely GM expects 10,000-30,000 sales the first year, high volume eventually

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

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