Automotive News - October 27, 2008 - (Page 35) OCTOBER 27, 2008 • 35 Survey: Ford Motor reliability improves DETROIT — Most Ford Motor Co. vehicles now show average or better reliability, Consumer Reports’ 2008 car reliability survey said, although Japanese carmakers still lead in the study’s rankings. “Ford’s three nameplates — Ford, Lincoln, and Mercury — lead the domestic automakers and continue to pull away from the rest of Detroit,” according to the report issued last week. The survey ranked Scion, Acura, Honda and Toyota highest on its list of brands predicted to produce reliable models in 2009. Kia showed the greatest improvement in the survey, finishing 10th and gaining 12 places on the list of 34 brands compared with last year. Corporate sibling Hyundai moved up seven spots to finish eighth in the rankings. Chrysler, Saturn and Land Rover ranked last on the 2009 predicted reliability list. For more on the survey, go to www.autonews.com. volume will plunge 29 percent to 872,000, Edmunds.com said. GM will suffer most with a 41 percent decline for its domestic brands, Edmunds said. Ford and Chrysler will be down more than 34 percent. Among the biggest Japanese automakers, Nissan’s volume will fall 29 percent, Honda will drop 17 percent, and Toyota will slide 16 percent, Edmunds said. GM puts ACDelco up for sale DETROIT — General Motors has retained Merrill Lynch to explore the sale of ACDelco, GM’s aftermarket parts unit. The move is part of GM’s attempt to raise up to $4 billion by selling assets. The potential sales are among the actions the company is taking to try to bolster its liquidity by $15 billion through the end of 2009. A sale could promote more rapid growth of ACDelco globally, GM said in a statement. The supplier employs about 600 people. CHARLIE GESELL Kathy Fowler and other GM dealers in northern California are organizing to discuss resistance to GMAC’s new policies. Says Fowler: “This is war.” GMAC Dealers scramble for financing continued from Page 1 Dealers vs. GMAC An Automotive News survey last week of more than 500 GM dealers disclosed broad dissatisfaction with GMAC. Q. If you floorplan with GMAC Financial Services, are you looking for a new floorplan provider? Andrettis end new-car sales VERMILION, Ohio — Auto racing legends Mario and Michael Andretti are out of new-vehicle retailing after a 3½-year stint as Chrysler LLC dealers. The Andrettis, father and son, closed Andretti ChryslerDodge-Jeep here at the end of September, dealership General Manager Mike Clapham said. They returned the franchises to Chrysler LLC as part of the company’s Project Genesis retail consolidation program, Clapham said. The dealership now sells only used vehicles, he said. It no longer services vehicles. Forecast: Plunging auto sales LOS ANGELES — General Motors, Ford Motor Co. and Chrysler LLC may drag U.S. auto sales for October to their lowest levels since 1992, a forecasting firm said last week. Overall industry The unscientific Automotive News dealer survey conducted last week showed that GM dealers are shopping around for financing: Nearly half of the dealers who floorplan with GMAC said they are looking for a new inventory lender. About 84 percent of the dealers who use GMAC as their primary source of consumer lending said they are seeking another lender for that role. Almost three-fourths of dealers surveyed said GMAC’s wholesale interest rates are not competitive. Nearly three-fifths of the dealers who have cash management accounts or otherwise keep excess funds on deposit with GMAC said they are withdrawing some or all of that money. No Yes 51% 49% Q. If GMAC is your primary source of consumer lending, are you looking for a new primary source? No stock watch Manufacturers BMW-ADR Daimler AG 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 Oct. 24 Closing price Oct. 17 Weekly percent change 52-week high 52-week low 16% ‘This is war’ This month an internal GMAC memo said the company had “little, if any, access to funding.” Without such access, GMAC has been forced to cut back on leasing, eliminate loans to subprime consumers and raise interest rates on floorplan loans to dealers. But dealers have their own financial worries. Kathy Fowler, a Chevrolet and Pontiac dealer in Lakeport, Calif., says the new GMAC policies are combining with weak vehicle sales to threaten the survival of her store. “I don’t know if I’m going to be here when the dust settles, but I’m going to put up one hell of a fight,” Fowler told Automotive News. “This is war.” Fowler says GMAC demanded that she start paying down the principal on inventory that has been on her lot more than 180 days. The first monthly payment GMAC wants is nearly $40,000, she says. Diverting that sum from her working capital could prevent her from making her payroll and put her out of business, she says. Fowler refuses to pay. She says she has shopped her floorplan account to at least a half-dozen banks. But her dealership has lost $80,000 this year and no lender wants her business. Fowler says she and other GM dealers in northern California are organizing to discuss resistance to GMAC’s new policies. Yes in Orofino, Idaho, says GMAC has cut his floorplan credit line by as much as 25 percent over the past month. Asked whether he would move his floorplan account from GMAC, he responded: “It depends on many other foolish things they do. We haven’t missed a payment in 38 years. That’s another reason that I’m a little disgruntled.” GMAC also has cut back on consumer loans. The company said this month that it no longer will finance car buyers with credit scores below 700, on a scale of 300 to 850. And GMAC virtually has stopped writing retail leases in the United States. A new promotional campaign by General Motors, “Financing that Fits,” seeks to reassure consumers that lenders other than GMAC will finance them. But 86 percent of dealers in the survey say the campaign has not been effective. GM spokesman Peter Ternes says the campaign is “seeing some traction. However, because the industry is down, it’s kind of hard to tell what is driving sales and what is delaying sales.” 84% Tough talk Q. Are GMAC’s wholesale interest rates competitive with those of other lenders you work with? Last week the California dealer association accused GMAC of “abandonment” and “rogue” tactics. “Unless stopped, GMAC’s actions will directly lead to the insolvency of a number of our GM dealer members and will significantly erode GM’s California market share,” said Peter Welch, CEO of the California New Car Dealers Association, in a letter to GMAC CEO Alvaro de Molina. Don Hall, who heads the Virginia Automobile Dealers Association, calls GMAC’s new policies “absurd.” “I’ve never seen my dealers more frightened of what’s going on,” Hall says. “It’s a hell of a way to treat your partner when you have to move inventory.” Hall and Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, say they are referring other lenders to dealers who want to pull floorplan accounts from GMAC. But dealerships in financial trouble often have no alternative. And some dealers say they feel more comfortable sticking with a lender they know. Todd Wenzel, who owns Buick-Pontiac-GMC and Chevrolet dealerships in Grand Rapids, Mich., says he believes both GM and GMAC will survive. “I’m staying committed to GMAC at all costs,” Wenzel says. “The bottom line is always important, but my long-term bottom line and my longterm relationship with GMAC are more important.” Chrissie Thompson contributed to this report $25.10 27.86 25.50 2.01 5.95 20.62 6.68 9.11 23.00 31.95 14.25 66.09 57.49 Closing price Oct. 24 $27.10 35.00 25.50 2.43 6.43 21.87 6.68 9.43 25.70 48.00 14.25 67.10 95.25 Closing price Oct. 17 –7.4% –20.4 – –17.3 –7.5 –5.7 – –3.4 –10.5 –33.4 – –1.5 –39.6 Weekly percent change $67.00 111.65 34.85 8.99 39.45 37.64 18.58 23.75 92.50 165.75 33.25 117.59 108.25 $24.50 26.77 14.15 1.84 4.00 18.94 6.68 8.04 23.00 31.95 14.25 57.01 41.50 Yes 27% No 73% Retail Groups Asbury Automotive Group AutoNation Group 1 Automotive CarMax Lithia Motors Penske Auto Group Sonic Automotive Source: Automotive News survey 52-week high 52-week low $2.10 4.43 5.92 9.37 2.14 5.59 2.55 $3.92 7.34 10.36 9.66 2.50 6.61 3.06 –46.4% –39.7 –42.9 –3.0 –14.4 –15.4 –16.7 $19.69 19.59 32.67 24.10 18.69 23.58 25.75 $1.95 4.43 4.34 8.79 1.76 5.59 2.54 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 Oct. 24 Closing price Oct. 17 Weekly percent change 52-week high 52-week low Winners American Axle Shiloh Industries Losers Timken Co. TRW Automotive Tenneco Inc. Lear Corp. Gentex Corp. $1.96 5.75 $13.06 5.07 2.76 2.43 8.43 $1.78 5.51 $20.99 7.98 4.29 3.70 11.32 10.1% 4.4 –37.8% –36.5 –35.7 –34.3 –25.5 $28.11 12.00 $38.74 31.26 33.46 36.99 21.71 $1.50 4.65 $13.06 5.07 2.41 2.29 8.35 Floorplan tightening Dealers say — and company documents obtained by Automotive News confirm — that GMAC is: Raising wholesale finance rates at least one-half percentage point, and more for some dealerships. Dealers Information obtained as of 4:00 p.m. on Friday, Oct. 24, 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 say the prevailing GMAC rate is now one point higher than the prime rate of 4.5 percent. GMAC says rates vary by dealership. One dealer says his new lender is charging 1.4 percentage points less than GMAC did. Reducing floorplan credit lines. Canceling or freezing credit lines for other business operations. Demanding that dealers start paying down the value of aged inventory, new and used. Dealers say GMAC wants payments ranging from 5 to 10 percent of vehicles’ valu http://www.Edmunds.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - October 27, 2008 Chrysler dealers under GM? States would rule Survey: Worried dealers flee GMAC Va. dealers turn to local credit unions Anxiety over Chrysler: Deal or no deal? Ford, GM execs join panels looking at eco-friendly options Big pickups, SUVs gain share Chrysler will cut 4,300 salaried jobs by year end BMW seeks joint vehicle electronics effort Runkle: Give tiny suppliers a chance VW goal: 80% N.A. content for Tenn. plant April Wortham China's BYD plans U.S. hybrids Lucky Icahn lost Lear Mahindra's U.S. launch to get $60 million ad drive Toyota may renew no-interest loans Hesterberg, Thomson will address congress Desperate industry begs feds for help Hyundai dealers want ads to pitch favorable loans Toyota, GM top global r&d spending After Detroit 3 take back design, supplier sitting pretty Germany's Preh supplies F-150 ventilation part Buehler is Volt supplier Freescale: New infotainment chip Are they too big to fail? A goal for GM: Buy back full control of GMAC Tax credit would move domestic cars GMAC loan bonus is a bad idea Take a good look: Toyota is losing its halo What flexibility is and what it isn't Toshiba joins battery battle Personnel Hyundai slows Ala. output of Sonata, Santa Fe Picture this LaNeve: GM marketing budget faces '09 hit Hyundai counts on luxury, hybrid hopes Keogh: Audi belongs with top luxury brands Dealers Court overturns class-action status in Blue Oval suit 2 major lemon-law lawyers lose right to practice in Md. Auctions offer more online for just-in-time dealers Used-truck prices higher in September Lack of used Minis limits certified program Wood trim maker expects to avoid worst of woes VW: U.S. may get Scirocco after all Ford's new F-150 is built for jobs, not jaunts Think of it as GPS for tools Feds look at China-made valves on Ford tires Shareholder value tumbles in 3rd quarter Shareholder value tumbles in 3rd quarter Ford truck marketing exec: Hybrid pickup 'publicity stunt' Survey: Ford Motor reliability improves Chrysler heir: Get back to basics Farley has bright idea to boost auction action Kerkorian speeds away from autos Names familiar? NADA leadership is a family affair Mitsubishi bucks trend on profits New trade debate in the works? Beware the 'vital' deal Automotive News - October 27, 2008 Automotive News - October 27, 2008 - (Page Intro) Automotive News - October 27, 2008 - (Page Bellyband1) Automotive News - October 27, 2008 - (Page Bellyband2) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 1) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 2) Automotive News - October 27, 2008 - Chrysler will cut 4,300 salaried jobs by year end (Page 3) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 4) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 5) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 6) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 7) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 8) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 9) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 10) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 11) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 12) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 13) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 14) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 15) Automotive News - October 27, 2008 - Hyundai slows Ala. output of Sonata, Santa Fe (Page 16) Automotive News - October 27, 2008 - Picture this (Page 17) Automotive News - October 27, 2008 - Picture this (Page 18) Automotive News - October 27, 2008 - Picture this (Page 19) Automotive News - October 27, 2008 - LaNeve: GM marketing budget faces '09 hit (Page 20) Automotive News - October 27, 2008 - Hyundai counts on luxury, hybrid hopes (Page 21) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 22) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 23) Automotive News - October 27, 2008 - Dealers (Page 24) Automotive News - October 27, 2008 - 2 major lemon-law lawyers lose right to practice in Md. (Page 25) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 26) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 27) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 28) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 29) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 30) Automotive News - October 27, 2008 - VW: U.S. may get Scirocco after all (Page 31) Automotive News - October 27, 2008 - Feds look at China-made valves on Ford tires (Page 32) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 33) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 34) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 35) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 36) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 37) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 38) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 39) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 40)
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.