Automotive News - July 28, 2008 - (Page 35) JULY 28, 2008 • 35 Mercedes to cut Ala. production VANCE, Ala. — Mercedes-Benz will trim production at its Alabama plant next month. “We are adjusting our production schedule for the remainder of the year in response to market demand,” said plant spokeswoman Felyicia Jerald. She provided no specifics. In the 11 years that Mercedes has built vehicles in the United States, this is the first time that production has been reduced because of the market and economic conditions, she said. earned $51.8 million in the second quarter, down from $77.3 million from the same quarter in 2007. Revenue from new-vehicle sales was $2.17 billion in the quarter, down from $2.58 billion in the second quarter of 2007. For the first half of 2008, AutoNation reported revenue of $4.37 billion, off 12.6 percent from the same period in 2007. Net income was $102.5 million, down from $154.9 million during the first half of 2007. PRODUCTION Automakers hit the brakes, slash output plans for 2nd half continued from Page 1 Plunging output in North America North American light-vehicle production, in millions of units for 1992-2007, plus 2008 forecast 20 18 GM names CFO for N.A. DETROIT — General Motors has named Joseph Peter CFO for North America, effective Aug. 1. Peter, 45, will report to Ray Young, GM’s CFO, and Troy Clarke, president for North America. Peter most recently was GM’s Asia Pacific vice president and CFO, a position he has held since 2006. He replaces David Meline, who left GM to accept a job outside the auto industry. Lamborghini profit soars LOS ANGELES — Automobili Lamborghini’s global sales and financial results for the first half of 2008 hit record highs. Revenues increased 9.6 percent to 277.4 million euros ($434.5 million). Pretax profit increased 32.6 percent to $54.8 million. Lamborghini earned $73.7 million for all of 2007. Global unit sales increased to 1,309 vehicles from 1,239 for the first half of last year. pany now expects to assemble 440,000 vehicles in the third quarter, down 35,000 units from its previous guidance. That would be a cut of 197,000 units compared with the third quarter of 2007. Ford plans fourth-quarter output of 500,000 units in North America. That’s a cut of 141,000 units from the fourth quarter of 2007. Mulally said the company would convert three assembly plants from trucks to small cars by 2011 in response to an unprecedented swing in consumer preferences. CSM estimates Chrysler will trim second-half output by 22.8 percent and Ford by 17 percent, including Mazda production in Flat Rock, Mich. The Ford and Chrysler forecasts include scheduled changeovers for redesigned full-sized pickups. General Motors, Nissan and Toyota will slash second-half production by 9.8 to 11.6 percent, CSM says. Units, in millions 16 14 12 0 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 Source: Automotive News, 1992-2007; CSM Worldwide, 2008 forecast “maxed out,” says spokesman Mike Goss. “We’re looking at all kinds of options,” including adding shifts, he says. Honda’s higher second-half output rests on a new plant in Greensburg, Ind., opening in the fourth quarter. Honda is shifting SUV production to boost car capacity. “We invested heavily in flexible manufacturing years ago and The exception: Honda Only Honda — the automaker least exposed to truck sales of the Big 6 and perhaps the most flexible manufacturer in North America — is projected to increase its second-half output, up 9.7 percent, to 757,631 units. “It’s going to get worse before it gets better,” says Haig Stoddard, manager of North American light-vehicle production for Global Insight. He foresees sales bottoming out late this year or early next year with no recovery until the second half of 2009. Carmakers are weaning themselves from heavy consumer incentives and aggressive sales to daily rental fleets, says Jeff Schuster, head of vehicle forecasting for J.D. Power. TI Automotive unit will move DETROIT — TI Automotive’s new CEO, William Kozyra, has changed the leadership of the company’s fluid-carrying division and is moving its suburban Detroit headquarters to Germany. Joachim Burkhardt, formerly managing director of the fluidcarrying division in Europe, is the new global president of the unit. He replaces Rich Kolpasky, who plans to leave for personal reasons, the company said. The unit’s headquarters will move to Heidelberg, Germany. “ It’s going to get worse before it gets better. HAIG STODDARD Global Insight ” AutoNation net income falls FORT LAUDERDALE, Fla. — AutoNation Inc. said its bottom line took a beating after a 15 percent drop in new-vehicle sales caused second-quarter profits to slip by a third. The dealership group said it ‘The bubble popped’ “The incentives drug addiction and big fleet numbers built a bubble,” he says. “The bubble popped.” The situation is even more volatile than the sharp production cutbacks indicate. Automakers are scrambling to boost output of fuel-efficient small cars and slash large pickup and SUV production. GM is dropping shifts at truck plants and adding third shifts at small-car plants. Toyota is consolidating big-truck and SUV production and will delay opening its assembly plant in Blue Springs, Miss., by 18 months, to late 2011, to switch from trucks to its Prius hybrid. Corolla output in Georgetown, Ky., and at its NUMMI joint venture plant with GM in Fremont, Calif., is stock watch Manufacturers BMW-ADR 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 July 25 Closing price July 18 Weekly percent change 52-week high 52-week low $49.95 25.50 5.05 11.90 33.95 11.00 15.33 50.40 78.75 23.95 91.82 63.29 Closing price July 25 $47.80 25.50 5.44 13.18 32.76 11.00 15.66 50.23 78.75 22.10 89.29 59.65 Closing price July 18 4.5% – –7.2 –9.7 3.6 – –2.1 0.3 – 8.4 2.8 6.1 Weekly percent change $67.80 34.85 9.24 43.20 37.64 23.16 23.75 92.50 165.75 33.25 123.35 65.93 $42.60 14.15 4.30 8.81 27.01 11.00 15.03 46.00 78.75 22.00 87.06 32.70 that let us execute very quickly,” says Honda spokesman David Iida. Schuster says automakers, especially the Detroit 3, are adjusting to shifting demand more rapidly than in previous downturns. “The reaction of the Detroit 3 is very quick, very fluid,” he says. “They demonstrate a willingness to make the necessary production cuts, however painful.” The reduced output is tough on suppliers, especially those dependent on the Detroit 3. How bad is it? Comparing the peak year of 2000 to projected 2008 totals, the Detroit 3 have cut 5.5 million units of North American production. That loss almost equals GM’s entire North American output in 2000. “This keeps Detroit 3-based suppliers in a tough spot,” Stoddard says. “They must cut capacity or there is a good chance of more Chapter 11s.” c HUMMER GM works quietly to acquire stores continued from Page 1 Retail Groups Asbury Automotive Group AutoNation Group 1 Automotive CarMax Lithia Motors Penske Automotive Group Sonic Automotive 52-week high 52-week low $12.30 9.75 17.55 13.62 4.09 13.68 9.94 $11.54 8.25 16.45 13.52 4.10 12.87 9.17 6.6% 18.2 6.7 0.7 –0.2 6.3 8.4 $23.52 21.79 40.00 25.55 23.06 23.58 29.50 $9.76 7.30 14.53 10.53 3.51 11.42 7.82 Suppliers Biggest weekly swings from among the Automotive News top 150 suppliers to North America whose stocks are traded in the United States Closing price July 25 Closing price July 18 Weekly percent change 52-week high 52-week low Winners Shiloh Industries Timken Co. Cooper Tire & Rubber ArvinMeritor Goodyear Tire & Rubber Losers Autoliv North America Inc. Navistar International Engine Strattec Security Corp. American Axle Magna International $10.00 33.60 9.61 12.78 19.49 $37.59 60.60 30.63 6.51 57.08 $8.50 28.68 8.96 12.09 18.53 $45.77 65.27 32.81 6.95 60.55 17.7% 17.2 7.3 5.7 5.2 –17.9% –7.2 –6.6 –6.3 –5.7 $12.98 38.78 26.02 21.74 31.36 $65.09 79.05 51.04 28.11 100.30 $7.16 25.82 7.05 9.08 15.56 $37.57 44.50 30.63 5.10 52.34 Information obtained as of 4:00 p.m. on Friday, July 25, 2008. Because of a lag in the reporting of trades the closing prices disclosed above may differ slightly from the eventual closing prices. ADR = American Depository Receipt Compiled by PricewaterhouseCoopers, Intraweek data provided by Comstock. Powered by Stockgroup GM is buying out stores from owners. One owner said he is holding talks with GM about selling his store but had signed a confidentiality agreement. GM came to dealers’ aid after putting Hummer on the chopping block. GM tweaked its Standards for Excellence bonus program, paying Hummer dealers second- and third-quarter bonuses in advance as if they already had achieved them. The bonuses were paid based on dealers’ performance in the second and third quarters of 2007. While the amount paid differs among dealers, the average bonus is at least six figures, dealers said. The bonuses paid under the program “can be substantial,” said Ed Williamson, a Miami dealer. Williamson said GM made the changes to get its dealers through a sales plunge. In June, Hummer’s U.S. sales fell 59.3 percent to 2,072 units. The Hummer H3T, like the brand itself, faces an uncertain future. Williamson’s store, Williamson Cadillac-Hummer, sold 31 Hummers in June, tying for the top-volume dealership in the country for the month. When business was at its best in 2006, Williamson averaged more than 100 new Hummers a month. “There’s no question that there are some people out there that might have considered our truck,” Williamson said of consumer attitude in recent months. “If they’re thinking GM is going to sell it, they might not have come in to look.” Adding to their struggles, dealers said, much of their best sales staff fled their Hummer lots after GM put the brand up for sale. Hummer dealer Mike Daugherty said he cut his sales staff in half since GM started shopping Hummer. Daugherty said $4-a-gallon gasoline took away about half the business at his Hummer store in Sacramento, Ca
Table of Contents Feed for the Digital Edition of Automotive News - July 28, 2008 Automotive News - July 28, 2008 A scared-stiff industry stomps on the brakes No-lease edict stuns Chrysler dealers Hummer: Bonuses, buyouts Amid the gloom, Mercury celebrates Ford banks on Mulally's small-car plan PACE awards open for innovative suppliers GM expands employee discount plan through July American Axle blames strike for big quarterly loss Mercedes expects U.S. sales to fall; B class may come in 2011 Chevy plans new U.S. subcompact by '11 GM or Reynolds? Dealers must decide now Ralph Kisiel Ghosn: It's wrong time for a new partner GM geniuses turned their auto dreams into realities Dealers fresh out of Mini Coopers Chrysler, Ford, Honda top NAACP report card GM alters bonus for dealers who outperform their region Automakers angle for Chrysler's idle engine plant Chrysler revokes franchises in Pa. Sonic-Mercedes case could allow big dealers to add stores Buick's new LaCrosse It's still true: Product is king Still a bad idea NHTSA's Nason is leaving some big jobs undone Don't advertise them until they're on sale Safety matters much more than mpg Chrysler's no 'fuel economy laggard' $4 gas won't turn the U.S. into Europe For Europeans, America still spells opportunity Challenges travel with OnStar to China Personnel Mexico sales rise 1.2% in June Picture this Europe's worst sales result? Toyota Kia spends big to launch Borrego Kia launches Borrego just as SUVs lose favor Detroit 3: Goodbye, bailouts Dealers Eaton: Supercharger sales will grow Fla. appeals panel overturns class status in Kia brake suit Audi certified push pays off Used-car rule goes to the shop for tuneup Big-truck prices take a tumble in June Automaker tax break piggybacks on mortgage bill Honda rides high in 2nd-quarter rankings Ford Credit takes a hit as truck values fall 100 years of the Tin Lizzie Lamborghini profit soars AutoNation net income falls GM names CFO for N.A. TI Automotive unit will move Mercedes to cut Ala. production Fleming was a consummate newspaperman Toyota plans to raise Prius output A dart for Smart Tesla gets good reviews at Bentley 422 hp — and, uh, easy at the pump Ford's 2nd qtr: The reddest ink ever Bill Gates joins the car-dealer club Detroit 3 should put Mini under the microscope What's a Gov. to drive? Automotive News - July 28, 2008 Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 1) Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 2) Automotive News - July 28, 2008 - American Axle blames strike for big quarterly loss (Page 3) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 4) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 5) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 6) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 7) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 8) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 9) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 10) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 11) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 12) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 13) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 14) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 15) Automotive News - July 28, 2008 - Personnel (Page 16) Automotive News - July 28, 2008 - Personnel (Page 17) Automotive News - July 28, 2008 - Picture this (Page 18) Automotive News - July 28, 2008 - Picture this (Page 19) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 20) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 21) Automotive News - July 28, 2008 - Detroit 3: Goodbye, bailouts (Page 22) Automotive News - July 28, 2008 - Dealers (Page 23) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 24) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 25) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 26) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 27) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 28) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 29) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 30) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 31) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 32) Automotive News - July 28, 2008 - Honda rides high in 2nd-quarter rankings (Page 33) Automotive News - July 28, 2008 - 100 years of the Tin Lizzie (Page 34) Automotive News - July 28, 2008 - Mercedes to cut Ala. production (Page 35) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 36) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 37) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 38) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 39) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 40) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 41) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 42)
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