Automotive News - March 10, 2008 - (Page 12)

12 • MARCH 10, 2008 opinion I just filled my gas tank, and the price per gallon was a lot closer to $4 than to $3. It looks like the entire nation might have to pay $4 a gallon for regular gasoline before long. It will make Congress seem a lot smarter for passing its idea of an energy bill. Certainly, one of the reasons for a slowdown in sales is that consumers are well aware of the increasing price of fuel and are waiting to see whether it is temporary. Or they are simply buying smaller vehicles. It makes the Geneva motor show more relevant. Europeans have paid high fuel prices for decades, and, because of that, they want smaller cars and now even smaller SUVs. Ford, General Motors’ Opel and many other manufacturers around the world have been designing and building small, fuel-efficient vehicles for years. It shouldn’t 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. Fresh ideas are GM, Ford should bring Euro cars here U.S. dealers fine, but Chrysler want those vehicles must be wary in their showrooms now. When Cerberus Capital Management LP took over Chrysler last summer, the new private owners touted their ability to move quickly and nimbly as one of their major advantages over their publicly owned competition. The mantra of Chrysler LLC CEO Bob Nardelli is: “A quick yes, a quick no, but never a slow maybe.” Nardelli has been true to his word. Chrysler has assembled a crack team, and it has moved Car companies are swiftly to dump unprofitable complex and delicate models, streamline production and win back the hearts of organisms. A decision dealers. He also is bringing in industo change one facet try outsiders with fresh and constructive ideas. But someof a company’s times that can lead to misbusiness or culture steps. Chrysler’s new procurement can have far-reaching chief, John Campi, formerly a Nardelli associate at Home and sometimes Depot, tried an end run disastrous unintended around troubled supplier Plastech and was outmaneuvered when the supplier filed for consequences. bankruptcy. And while it may make sense to source more components from low-cost countries, some analysts have questioned the wisdom of awarding a seat contract for the 2010 Jeep Wrangler to a supplier from India — dropping Johnson Controls, one of the industry’s most experienced seat makers. Now Nardelli has brought another outsider into Chrysler’s suburban Detroit headquarters: New York advertising and ideas guru Peter Arnell, who is working as an outside consultant. With his office on the 15th floor near Nardelli’s, Arnell will have wide-ranging influence across a number of disciplines, including product planning. There’s nothing wrong with bringing fresh thinking into the company, but Nardelli must manage the relationship carefully so that Arnell’s presence doesn’t create needless friction among Chrysler executives. We can only repeat something we’ve said before: The auto industry is not like other industries. Car companies are complex and delicate organisms. A decision to change one facet of a company’s business or culture can have far-reaching and sometimes disastrous unintended consequences. Nardelli is right in moving quickly to fix an ailing company. But he also should listen carefully to the best advice from industry insiders and outsiders alike. be rocket science to import those vehicles or manufacture them in the United States. At Geneva, there was a huge motor show filled with small, fuel-efficient vehicles that Americans and their pocketbooks would love. The argument about the difficulty of homologation for Europe and the United States is too weak to fly anymore. It’s way past time for Ford and GM in particular to take advantage of their high-mileage portfolios that have been available for years. U.S. dealers want those vehicles in their showrooms now. There has always been an ocean between the U.S. and European markets, but that ocean has narrowed considerably in the past few years. Emissions standards have become almost identical, and with the computer it’s easier to adjust settings for each market. Safety is just as important outside the United States as it is here so the excuses go away. Will Americans continue to love their pickups and SUVs? Of course they will. But an increasing number of them will be looking for fuel-efficient alternatives, and U.S. dealers are going to need those products soon. The world is changing, but the North American market is quickly becoming similar to the rest of the world’s markets. It’s time for American companies to take advantage of their worldwide resources and offer competitive vehicles in North America. enforcement action. Unless everyone ensures that the value of collateral on motor vehicle loans is equivalent to the loan amount, the subprime lending problems and slump in today’s market will pale by comparison. Everyone has a vested interest in fixing this problem. Without corrective action now to ensure that loan-to-value ratios are accurate, I hate to think of what could happen to one of America’s most significant retail industries. EUGENE F. EBERSOLE Senior Assistant Attorney General Consumer Protection, Financial Fraud Section Oregon Department of Justice Salem, Ore. Dealers would suffer if Calif. gets its way To the Editor: California’s proposed greenhouse gas fuel economy standards could prove more problematic for California new-car dealers than for automakers (“Calif. regulators shoot for 40-plus mpg by 2020,” Feb. 25). Automakers are certain to use restricted model/powertrain availability in California as one method of meeting higher fuel economy regulations here. We can expect limitations such as Toyota Camrys offered with fourcylinder gasoline engines or fourcylinder hybrids only. Also no gasoline V-6s; SUVs with diesel or hybrid powerplants, but no gasoline V-8s; and Ford Mustangs, Chevrolet Camaros and Dodge Challengers offered in sixcylinder guise only. Such limits would create problems for California dealers, but not necessarily for automakers or even California car buyers. If, in the future, my local Ford dealer can’t accept an order to replace my current V-8 Mustang GT, I’ll just do my new-car shopping in Nevada. RICHARD LEFEVRE Tarzana, Calif. The writer is an insurance appraiser and a freelance automotive writer. False data imperil all auto financing 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 lschlagheck@crain.com Phone: 888-446-1422 Phone: 313-446-6790 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. To the Editor: We’ve been telling auto dealers for years that if they supply false information about the value of trade-ins, down payments, negative equity and the actual cash value to lenders, the auto industry could face the same debacle the manufactured home industry did when it crashed in 2003. Then 2007 brought autonews.com Did you know that you can write a letter to the editor on our Web site? Here’s how. Go to www.autonews.com. Scroll down on the left side of the home page until you see “Opinion.” Click on “Letters to the Editor.” At the top of the letters screen, a gray bar says “Send us a Letter to the Editor.” Click on that and follow directions. the collapse of the subprime mortgage industry. Your story on motor vehicle subprime market delinquencies is only the tip of the iceberg (“Lenders shun subprime market,” Feb. 18). There is a fine line between delinquency, default and repossession. If dealers and lenders violate the Truth in Lending Act, Regulation Z, Regulation M and state laws, they may create a crisis that dwarfs the motor vehicle subprime lending crisis. We have seen cases in which dealers claimed that lenders wouldn’t finance negative equity, so the dealers rolled it into the purchase price and inflated the trade-in to cover negative equity and show a nonexistent down payment. The result: law violations, finance agreements exceeding 125 percent of the actual cash value and increased defaults. Oregon recently amended its motor vehicle administrative rules, making it clear that if negative equity and credit applications values and actual cash value are falsified, violators will face see LETTERS, Page 14 http://www.autonews.com/signup http://www.autonews.com http://www.autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - March 10, 2008

Cheaper small cars are part of VW's U.S. plan Ford offers to buy back 81 stores As dollar dives, automakers juggle global strategies Jaguar-Land Rover deal will be signed within weeks GM Planworks chief leaves Jacoby cites dealer role in VW makeover Slim fast Nissan: Electric car to get here in 2010 Family honor Suddenly, Arkona's a key software player Chrysler may build vehicles in Russia Congress may ban mandated arbitration Volvo signs dealers willing to exit Breeding a hybrid? Prius could be a brand Honda adds benefits for same-sex partners Top China execs to speak at conference Manual for Challenger waits until '09 Ex-Sonic president: Gulf States raided Sonic GM, American Axle: Ties that bind Boardroom coup ousts Chamco executives False data imperil all auto financing Dealers would suffer if Calif. gets its way GM, Ford should bring Euro cars here Fresh ideas are fine, but Chrysler must be wary We need that 10% of useful inventions Safety options: Let consumers decide Tire monitors are full of problems Germany's labor setup just doesn't work Alabama adding auto jobs more slowly Engineer Banks strives to sip fuel, burn rubber Toyota Financial takes risks to aid dealers Honda captive beefs up dealer training in leasing NADA releases 2 subprime guides ADP develops e-sales brochure Credit unions' share of auto loans declines Upgraded auction ID carries a fee Dealers At hard-charging Hyundai, the plan is simple: More — now Genesis sedan's assignment: Boost image of all Hyundais Allied will supply sensing systems to Magna Haldex opens Mexico plant Behr gets Nano pact How Tupelo talked Toyota into building a plant there Infiniti FX showcases new Nissan technology Ford may consider hatchback for U.S. Audi to launch A4 sedan, wagon together BMW M3 convertible Saab hybrid concept has solar roof panels Toyota could bring tiny 4-seater to U.S. Hummer to push H3 pickup's usefulness New look for the SL Tiny Nano makes big waves GM's Opel unveils small hatchback that could become part of Saturn line Who says Americans don't want hatchbacks? 9-3 will dominate Saab marketing Lutz: Green takes greenbacks Leap year added to Feb. misery 9 U.S. Toyota executives will retire Ford gives employees $1,000 bonus Denso picks new N.A. CEO GM extends buyout offers CAW OKs TRW pact Lampert ups AutoNation stake Sagging Chrysler boosts spiffs Feb. output is up slightly Buick offers the Cadillac of caddies GM's board: The royal robe fits Fritz Be it metal or men, Geneva all about style Raising the roof (price) Italian cops bust Fiero-aris Consumer Reports' verdict on Chrysler products: Eeeee-uuw!

Automotive News - March 10, 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.