Automotive News - July 28, 2008 - (Page 6) 6 • JULY 28, 2008 GM alters bonus for dealers who outperform their region Jamie LaReau jlareau@crain.com DETROIT — General Motors is offering dealers a new way to make extra cash in the second half of 2008: a monthly regional bonus program. Under the program, which is part of GM’s Standards for Excellence, if a dealer meets or beats the monthly sales performance of the dealer’s region, the dealer gets a bonus. For example, if a region’s sales are off 5 percent for a month, dealers in the re- gion with sales off 5 percent or less would qualify for a bonus. The program, which was announced last week, could be ended if market conditions improve. “It’s an accommodation to allow dealers to hit a significant portion of their performance bonus despite the lower industry sales,” Mark LaNeve, GM’s vice president of vehicle sales, service and marketing, said in an interview. “We did it in cooperation with the GM’s Mark LaNeve: “Dealer profitability is under stress.” national dealer council, realizing that dealer profitability is under stress.” Bonuses will depend on dealership size, LaNeve said. He added that dealers still will earn more bonus money by making their quarterly goals than by beating the region each month. The foundation of the Standards for Excellence program — the quarterly performance bonus — remains intact. Criteria include meeting customer satisfaction index targets and training requirements. For the first half of the year, GM temporarily changed a requirement that dealers beat their quarterly sales from the year-earlier period, LaNeve said. Instead, dealers were required to reach 90 percent of sales from the year-earlier quarter. Even so, LaNeve said, in the first quarter, 30 percent of GM dealers topped their sales from a year ago. Rather than extend the change into the second half of the year, LaNeve decided to add the monthly bonus. c Ghosn: It’s wrong time for a new partner April Wortham awortham@crain.com GM geniuses turned their auto dreams into realities Chevrolet’s small-block V-8 grew from the dreams of Ed Cole and Harry Barr. Oldsmobile’s high-compression Rocket V-8 evolved from studies by Charles “Boss” Kettering. Chevrolet’s Powerglide, the first automatic transmission for a lowpriced car, traced some of its roots to Buick’s work on the M18 tank destroyer in World War II. In other words, General Motors’ major postwar technological innovations came from an array of sources — business friends kicking around ideas and small groups working on specific projects. Cole and Barr spent hours of their free time talking about their dream engine: a V-8 considerably smaller than the 331-cubic-incher Cole had developed for Cadillac. In 1952 Cole became Chevrolet’s chief engineer, and his smallblock V-8 debuted in the 1955 Chevy. Buick’s knowhow in building M18 tanks is credited with an advancement it later applied to the automatic transmission. The 1948 Buick had the Dynaflow transmission, which used a torque converter. Two years later, Chevy introduced Powerglide, also a torque-converter unit. The 1948 Oldsmobile was viewed as a lackluster car, but the 1949 Rocket V-8 made Olds an innovator and high-performance brand. The high-compression 1949 engines for Oldsmobile and Cadillac were based on studies by GM’s Kettering. At GM, it wasn’t a case of “back to the drawing board” when looking for technological breakthroughs. It seemed as if the corporation’s resident geniuses never left their boards. For the rest of the story, read Automotive News’ GM 100th anniversary edition, How General Motors Changed the World, on Sept. 15. For information about the special edition, go to www.autonews.com/gm100. FRANKLIN, Tenn. — Uncertainties in the North American auto industry will prevent Nissan Motor Co. from seeking a partner here anytime soon, says CEO Carlos Ghosn. In a roundtable discussion with reporters here last week, Ghosn responded to speculation that an agreement to build cars with Chrysler LLC could lead to a deeper alliance between the two automakers. In April, Nissan announced it will source the next-generation Titan from Chrysler’s Saltillo, Mexico, truck plant, beginning in 2011. At the same time, Chrysler will receive a new small car for the United States Ghosn: What’s that will be built by going to last? Nissan in Japan. Ghosn said that “fundamentally, the reasons are here for this industry to consolidate,” but headwinds such as the rising cost of steel and gasoline make it an unfavorable environment for any major moves. “The likelihood of moves now is relatively small because we need to understand in what environment we are competing,” Ghosn said. “What’s going to be lasting? Are we at the beginning of the end, or are we at the end of the beginning?” c U.S. dealers have only a one-day supply of the Mini Cooper. First-half sales rose nearly 34 percent over 2007. Dealers fresh out of Mini Coopers Richard Truett rtruett@crain.com The nation’s 82 Mini franchises are out of cars, and dealers can do little more than take orders and deliver preordered units for the rest of the year. As fuel prices have risen, demand for the Mini Cooper has outstripped supply. “For the last three months, we were selling from inventory,” said Jim McDowell, vice president of BMW’s Mini division. “There’s no way (July) can be as good.” McDowell said that dealers have a one-day supply of cars and that 81 percent of the cars delivered this month have been those that consumers have configured and ordered. In June, Mini sold 5,211 units, up 24.8 percent from the same month last year. That followed sales increases of 52.8 percent in May and 39.4 percent in April. Through the first half of the year, Mini sales are up 33.6 percent to 26,400 units. Dealers who have been asking for more cars won’t get much satisfaction soon. Mini will boost production for the United States, but only by between 2,000 and 3,000 cars this year. The Mini plant in Oxford, England, is running three shifts, seven days a week. It builds about 800 cars a day for 80 markets. McDowell also said Mini plans to expand its dealership network to 95 stores by 2011. He said that in some regions of the country, dealers are too far apart to service customers. c Chrysler, Ford, Honda top NAACP report card Andrew Grossman agrossman@crain.com The NAACP’s Consumer Choice Guide gave Chrysler, Ford and Honda an industry-leading grade of B– for their record on diversity. It gave Volkswagen a D. The auto industry’s overall score improved slightly last year, the report said. Ratings by the National Association for the Advancement of Colored People cover a number of industries. The civil rights group grades automakers on employment of black workers, support for minorityowned dealerships, spending with black advertising agencies and advertising targeted at blacks, supplier diversity and charitable giving. The NAACP gave the auto industry an overall score of 2.27, good enough for just a C grade. That’s the same grade as the lodging and general merchandising industries. Financial services led the pack with a B. Last year, the auto industry got a 2.19. Automakers tended to score well in charitable giving and supplier diversity. Most struggled in employment and marketing/communications. Volkswagen came in last in the study, with D’s in employment, supplier diversity and marketing/communications. Daimler and BMW were not rated. The NAACP graded the companies’ responses to survey questions. c Automakers and blacks The NAACP graded automakers on their giving to charities aimed at helping blacks; the diversity of their suppliers, work force and dealers; and how much of their marketing budget goes to black ad agencies or to advertising targeted at black customers. Here’s how they did. EMPLOYMENT MARKETING SUPPLIERS DEALERSHIPS GIVING OVERALL Chrysler Ford Honda GM Toyota Mitsubishi Nissan Hyundai VW C+ C+ C C+ C C C– C D C C– C C D D F+ F D A– B+ B+ C+ B+ C C– D+ D C B– B B C D B B C– A– A– A B F A A B+ B- B– B– B– C+ C C– C– C– D Study doesn’t include automakers such as BMW that make only high-end vehicles Source: NAACP’s Consumer Choice Guide http://www.autonews.com/GM100
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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