Automotive News - March 10, 2008 - (Page 43)

MARCH 10, 2008 • 43 Ford gives employees $1,000 bonus DETROIT — Ford Motor Co. is paying every U.S. and Canadian employee a $1,000 bonus even though the automaker lost $2.7 billion last year. In an e-mail to employees last week, CEO Alan Mulally said that although Ford fell short of its sales goals for 2007, the automaker “met or exceeded” objectives in every other category. The bonus also will be paid to managers outside the United States and Canada. Mulally said the payments are based on improvements in cost performance, quality, automotive cash flow and financial results. CURRENCY As dollar dives, automakers scurry continued from Page 1 Collapsing dollar As the dollar loses value, import brands are Building U.S. assembly plants Exporting more vehicles from the U.S. Importing fewer vehicles to the U.S. “ It is no secret that we lose Denso picks new N.A. CEO DETROIT — Denso Corp. named Haruya Maruyama to head its North American unit, Denso International America Inc. Maruyama, 53, takes over as CEO of the unit on April 1. He joined Denso in 1978 and has held many positions, most recently overseeing Denso’s European sales. Maruyama replaces Mitsuo Matsushita, who retired Dec. 31. sembly plant in the southeastern United States with a production capacity of 200,000 units. The factory could build vehicles for Audi, too. Mitsubishi Motors Corp. is exporting vehicles built in its Normal, Ill., assembly plant to the Middle East, South America and Russia. It also plans to export vehicles to China. Mitsubishi started exporting vehicles two years ago in an attempt to boost production in an underused factory. Even with exports, the Normal plant produced only 78,732 vehicles in 2007. CEO Osamu Masuko said the weak dollar will allow Mitsubishi to boost exports. Mitsubishi is shipping the Galant to Ukraine, and will start exporting the Eclipse to China in October, Masuko said in an interview at the Geneva auto show. He expects 1,000 Eclipses to be shipped to China during the 2008 fiscal year. And that’s just a start. “If China’s economy continues as well as today, then our volume will continue to rise as well,” Masuko said. “The export number is small now, but we intend to increase the number.” For the fiscal year ending March 31, Mitsubishi expects to export 15,000 to 20,000 units assembled in Illinois, money in the U.S. selling cars. In the up from 12,000 for the previous fiscal year. And Masuko expects exports to rise again in fiscal 2009. Mitsubishi’s strategy — boost exports if your factory is in a market with a weak currency — is another example of Econ 101. So is Volkswagen’s move to start building vehicles in the United States. Vehicles built in Europe for the mass market simply cannot be sold at a competitive price in the United States, said Jochem Heizmann, Volkswagen’s board member for production. “It is no secret that we lose money in the U.S. selling cars,” Heizmann said in an interview last week in Geneva. “In the States, the only solution is local sourcing and local content.” Heizmann said Volkswagen is considering two offers for its new factory in the United States from two states. A decision will be made by early summer. Unlike Volkswagen, Mercedes and BMW are somewhat cushioned against currency fluctuations because they already export vehicles States, the only solution is local sourcing and local content. JOCHEM HEIZMANN Volkswagen ” built in America. But they are not immune to the dollar’s nosedive. BMW AG admits its recent decision to slash 8,100 jobs is partially a reaction to worries about exchange rates. In the old days when the European luxury brands dominated the United States, they could just raise prices when the dollar declined in value. Those days are over, says Stefan Krause, BMW’s board member for sales and marketing. BMW can’t raise prices significantly because the U.S. market is so competitive, he says. “That’s why we (launched) the company cost reduction — over the challenge of the dollar.” BMW is still profitable in the United States, says Krause, and he doesn’t consider the dollar’s collapse to be a crisis — not yet, anyway. If the euro were to remain valued at $1.50 or more for years, that would be a crisis, Krause says. But that is unlikely because currencies rise and fall in cycles. Like BMW, Mercedes remains profitable in the United States. But Daimler AG chief Dieter Zetsche says he won’t bring the next-generation Bclass small car to the United States unless the dollar strengthens. Zetsche says he won’t sacrifice Daimler’s profits to prop up U.S. sales volume with big incentives. “We have been very restrictive with incentives,” he says. Traditionally, the Detroit 3 have favored a weak dollar — primarily to discourage imports from Japan. But a weak dollar has forced them to make some adjustments, too. For example, Australia’s relatively strong currency forced GM to kill plans to sell an Australian-built Pontiac G8 wagon. Likewise, GM’s Saab brand is losing money in the United States because the Swedish automaker has been forced to raise prices — and lose sales. For the moment, the Detroit 3 still favor a weak dollar. But life grows more complicated as the automakers globalize. “Saab is totally underwater,” said one source familiar with GM’s thinking about currency fluctuations. “It’s a huge problem.” c Jamie LaReau and Rick Kranz contributed to this report GM extends buyout offers DETROIT — General Motors has agreed to offer a UAW-like buyout program to hourly employees represented by the International Union of Electrical Workers. The 2,346 workers at GM’s Moraine, Ohio, truck assembly plant get the same incentives to leave as those being offered to all 74,000 GM workers represented by the UAW. GM spokesman Dan Flores said that packages include $45,000 to retire and buyouts of $140,000 for workers with 10 years of service to leave without rights to health care coverage and $70,000 for workers with less than 10 years. VW Cheaper small cars will seek ‘sweet spot’ continued from Page 1 Smaller and cheaper What VW is considering for the United States A car the size of VW’s European Polo (think Honda Fit) A family of small vehicles based on VW’s space up! concepts A body-on-frame pickup A U.S.-built Passat replacement with a new name and priced lower than the current model A cheaper Jetta better suited to U.S. tastes A Phaeton successor smaller than the existing version and powered by a diesel The main growth would come from adding SUVs such as the Tiguan, which goes on sale in the United States this year. Also in the pipeline are the Audi Q5 and Q3 — two SUVs smaller than the Audi Q7. The Q5 goes on sale next year and the Q3 in 2010. CAW OKs TRW pact DETROIT — Members of the Canadian Auto Workers returned to work Wednesday, March 5, at TRW Automotive Inc. after approving a contract agreement in Windsor, Ontario, Tuesday with 96 percent of the workers voting in favor of the pact. The end of the six-day strike at the suspension framing plant allowed Chrysler LLC to resume production at its nearby minivan plant. It was the first union contract at the TRW plant. The workers struck Feb. 28. pand its factory in Puebla, Mexico, which is nearing its capacity of 500,000 units annually. The new plant likely would build a Passat replacement designed for the United States. The car would get a new name and cost about $20,000. The base model for the current Passat is priced at $24,680, including shipping. Eventually, a smaller car and even Audi vehicles could be built at the plant, Winterkorn said. The successor to the U.S.-built Passat probably would not be exported to other markets. VW’s Martin Winterkorn wants “cars that fit the American customer. The Jetta and Passat are too expensive. We need models that hit the sweet spot.” One possibility for Volkswagen is a new family of small vehicles based on the space up! concept. Cars must suit U.S. buyers “We need to produce cars that fit the American customer,” Winterkorn said. “The Jetta and Passat are too expensive. We need models that hit the sweet spot.” VW also is considering a car the size of its European Polo for the United States. Winterkorn said U.S. dealers tell him they are eager to get the Polo, which is about the size of a Honda Fit. He said East Coast dealers want a notchback, and dealers on the West Coast want a hatchback. Another possibility is to bring over a new family of small vehicles based on the space up! concepts, which VW rolled out at the Frankfurt, Tokyo and Detroit auto shows. Winterkorn said the vehicles have been approved for sale in Europe but not in the United States. “We are discussing the new small family and the Polo for America and whether it is feasible from a cost and Better Touareg, new pickup? price point,” he said. “To make the Polo in Europe and bring it to America would not work.” Winterkorn said VW is also developing a replacement for the Jetta that would cost about $15,000 and would be more suited to U.S. tastes than the existing car. Currently, the least-expensive Jetta is priced at $17,030, including shipping. The Jetta successor likely would be produced in Puebla, where today’s Jetta is made. ed States was powered by a V-12. The new one might not be as large as the first Phaeton, which was withdrawn from the United States in 2005 after poor sales. But it would be bigger than the Passat-based, coupelike CC luxury sedan that goes on sale this year. The CC is about a half-inch longer than the standard Passat sedan. “We are looking at the figures to see if this is possible,” said Winterkorn. “I believe we should do a Phaeton successor. The Volkswagen brand needs a car like the Phaeton.” Winterkorn said VW wants to increase group sales — encompassing the VW, Audi, Skoda, Seat and Bentley brands — to 8 million units by 2011, up from 6,192,000 last year. Winterkorn also wants to do better with the next-generation Touareg SUV. The current version fell short of sales expectations because of quality problems at launch

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

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