Automotive News - July 7, 2008 - (Page 4) 4 • JULY 7, 2008 Reynolds sues dealer over computer upgrade Ralph Kisiel rkisiel@crain.com An arbitration panel awarded a Connecticut Ford dealership nearly $300,000 in damages and costs after concluding that a unit of Reynolds and Reynolds Co. breached its contract with the retailer by requiring it to buy a new computer system to run upgraded software. Now the Reynolds unit has filed a lawsuit in federal court to toss out the award. Reynolds requires its dealership customers to resolve disputes through arbitration. But it chose to go to court after the arbitration panel ruled against the Reynolds subsidiary. “This is a classic example of an arbitration panel exceeding its authority and really disregarding established law,” says Tom Schwartz, a Reynolds spokesman. “That would be the basis for why we are going forward. I’d go so far as to say the panel appeared to ignore the terms of the contract.” The arbitration panel’s ruling was encouraging news to 70 dealerships involved in a class-action lawsuit challenging Reynolds, one of the two largest suppliers of dealership management systems in the United States. These dealers don’t want to buy a new $100,000 computer system from the Reynolds unit to run the latest version of software. Another 70 dealerships are embroiled in arbitration hearings and individual lawsuits over the mandatory upgrade, say attorneys representing the dealerships. see COMPUTER, Page 30 Escalating dispute Dealer Computer Services, a unit of Reynolds and Reynolds, is rejecting an arbitration panel’s ruling in its dispute with a dealership. Here is a timeline. August 2006: Dealer Computer Services tells dealership that it must upgrade to a new $100,000 computer system. November 2006: Dealership says no, seeks arbitration as mandated by contract. January 2008: Arbitration panel holds hearing in Houston. March: Panel rules for dealership, awards nearly $300,000 in damages and costs. June: Dealer Computer Services sues to vacate panel’s ruling. Source: American Arbitration Association ruling and court documents Seat strategy: Lear aims to make more profits by producing more parts David Barkholz dbarkholz@crain.com Spread it out Lear is trying to diversify its product and customer mix. The seat maker relies heavily on these 4 customers for most of its sales. 2007 2006 As vehicle sales plummet for its two largest customers, Lear Corp. is looking to boost revenue by manufacturing more of the components that go into its seats. In the past, the company has produced few seat coverings, which represent about 15 percent of a seat’s cost. Lear also has outsourced the vast majority of seat structures to suppliers. But that’s changing, says Lou Salvatore, senior vice president in charge of seats at Lear. Last month Lear bought a 75 percent stake in the fabric business of New Trend Group Co. Ltd. of China. Lear launched a leather line for seats late last year. And Lear is bringing frame making back in-house in a big way, Salvatore, 52, told Automotive News. Seats account for about 76 percent of all sales at Lear, the world’s ninthlargest parts supplier to automakers. GM Ford BMW Chrysler Source: Lear 28.8% 20.6 9.9 6.0 31.9% 22.6 7.4 8.0 ■ An all-new 7 It looks like the outgoing model, but BMW says the fifth-generation 7 series is all new. The car will make its world premiere at the Paris auto show in October. The 2009 7 series takes styling cues from the CS concept that BMW unveiled in Shanghai last year. More details about the car can be found at www.autoweek.com. Chrysler and dealers to improve Internet marketing strategies A seat for a Mercedes-Benz SLK roadster has leather and fabric produced by Lear units. tomotive fabric business is aimed at China, at least initially, he said. The Shanghai-area company posted sales of about $30 million last year. Bradford Wernle bwernle@crain.com Product quest “We’re chasing growth at the automakers all over the world,” said Salvatore, a former Ford purchasing manager who took command of Lear’s seat unit in February. “A second source of opportunity is components.” Lear is in a race to change both its product offerings and its traditional North American customer base. Ford Motor Co. and General Motors accounted for about 42 percent of Lear’s $16 billion in world sales last year. North America accounted for 45 percent of global sales. Lear makes seats for GM’s pickups and large SUVs, two segments particularly hard hit by rising gasoline prices. With Ford’s U.S. vehicle sales down 14.5 percent through the first half and GM’s off 16.3 percent, Lear is seeking its growth in Europe and Asia. For example, Lear has opened a foam plant in Wuhu, China, and a seat trim facility in Hai Phong, Vietnam. The company also has moved its central purchasing operation to China and has organized its seating and electrical units on a global basis. Salvatore said Lear seeks acquisitions that would add components or open more markets to the company, but nothing is imminent. The acquisition of New Trends’ au- Web strategies Chrysler LLC plans to announce major Internet initiatives in August. The company aims to Improve interaction between Chrysler and dealer Web sites Speed response time to Internet-generated sales leads Tailor messages to individual customers Customer entree It supplies virtually all of the major carmakers in China, Salvatore said. In addition, “We see an opportunity to launch our fabric portfolio with American and European customers,” he said. Lear predicts its seat sales in China will reach $1 billion this year. Owning a leather company and a fabric maker lets Lear design into its seats fancier stitching and designs, said Don Bernhardt, vice president of engineering for Lear’s North American seating unit. Lear launched its Aventino collection of premium automotive leather last autumn in Detroit. Frames also can be a game-changer, Salvatore said. Lear makes an ultralight frame for the seats it supplies on the Mercedes-Benz SLK roadster. The stylish, exposed steel back saves weight, a major selling point to carmakers. c Lan Lan in Beijing contributed to this report DETROIT — Chrysler LLC is changing the way it talks with customers via the Internet. In August, the company will announce major initiatives for the Internet that will be carried out this year. “That’s where all advertising is going to go in the future,” says Deborah Meyer, Chrysler’s chief marketing officer. In the fourth quarter of 2007, Meyer formed a dealer Internet advisory panel. Her goal: Improve interaction between company and dealer Web sites to help Chrysler respond quickly to sales leads, tailor messages to individual customers and manage those relationships. Dodge dealer Wes Lutz, owner of Extreme Dodge-Hyundai in Jackson, Mich., and a member of Meyer’s Internet panel, has served on the national dealer council, the dealer ad association and regional dealer boards. “I’ve got to tell you this panel is moving at light speed, faster than I’ve ever been on at Chrysler,” says Lutz. “Deb Meyer is really moving this thing on.” The enthusiasm is mutual from Chrysler, which often has boasted that it can move more quickly under private ownership. “The Dodge, Chrysler and Jeep dealers are embracing this. I’ve never seen a faster-moving dealer body,” “ The Dodge, Chrysler and Jeep dealers are embracing this. DEBORAH MEYER Chrysler LLC ” Meyer said in an interview in her suburban Detroit office. The object is to put Chrysler at the forefront of the industry in managing Internet-generated sales leads. Meyer hopes she can incorporate the best suggestions from the dealer panel and ideas from outside the company. She also is looking at other industries, including hospitality and financial services. “We’re working on an aggressive lead management program with third parties,” said Meyer, who declined to identify those parties. To make the Internet work, a speedy response is critical, says Michael Gillespie, owner of Gillespie Chrysler-Dodge-Jeep in Midlothian, Ill. Gillespie says that five years ago, he was a computer novice. Now he’s a key player on Meyer’s Internet panel. He says the Net can help Chrysler grab customers from import brands. Gillespie built his business by luring customers to his inner-city store by responding quickly to their online queries. “We answered their inquiries within 10 minutes,” he says. “The first step is to have a site that is functional and generates leads. Second, when they go to search for you, be sure you’re found. Third, when you’re found, be sure you answer it in a timely fashion.” c http://www.autoweek.com
Table of Contents Feed for the Digital Edition of Automotive News - July 7, 2008 Automotive News - July 7, 2008 Turnaround trouble: Mitsubishi back on the skids It's a panic — but don't panic CAUGHT FLAT-FOOTED Japan's new diet plan: Slim down, ounce by ounce Amid sale rumors, Volvo has upmarket plans Reynolds sues dealer over computer upgrade Chrysler and dealers to improve Internet marketing strategies Seat strategy: Lear aims to make more profits by producing more parts Nissan: Despite a truck glut, Titan gets no more incentives American Axle cuts staff; boosts India business, CEO bonus Bosch sees N.A. red ink this year Bill Mitchell's designs blew away the past Hyundai Santa Fe to get a 4-cylinder GM Europe exec: Curbing CO2 is 'around the clock' effort Supplier input varies in Nissan's tech plans Great Wall becomes Chrysler's 2nd Chinese partner Steel prices nudge up Nano's costs Analyst: GM could tap UAW benefits fund Automakers create opportunities for Mexican molders Chrysler pitches gas savings on hybrid SUVs Researchers test capturing CO2 before it leaves the car Some execs win even when their companies lose Tata's personal touch Show me the money Obituaries Study: Dealership service shops extend their hours New Web tool promotes GM service Fiat CEO Marchionne is Industry Leader of Year Jim O'Sullivan Johan de Nysschen Sergio Marchionne Ratan Tata Dick Colliver Fritz Henderson Martin Thall Jim Farley Jack Stavana Roger Penske Walter de' Silva Mike Stanton Tim Manganello David Friedman Jim Hallett Larry Jutte Kim Kosak Ron Gettelfinger Tom Stephens Bob Lutz Tom Shoupe Jay Amestoy June caps a dismal first half Personnel Auto roof rule due by Oct. 1 Mitsubishi dumps 9 ad associations Small-car transaction prices rise in June Turbo taboo may end for BMW M's The mpg fracas: Pick your favorite fairy tale Great news? Analysts shun the Kool-Aid at Chrysler And now, from Wall Street, a short tale of terror VW tells builders: Plan for Southeast plant Dodging a bullet: Half-off deal busts dealer's Ram jam To run the train, should you be an engineer? Automotive News - July 7, 2008 Automotive News - July 7, 2008 - CAUGHT FLAT-FOOTED (Page 1) Automotive News - July 7, 2008 - CAUGHT FLAT-FOOTED (Page 2) Automotive News - July 7, 2008 - Amid sale rumors, Volvo has upmarket plans (Page 3) Automotive News - July 7, 2008 - Seat strategy: Lear aims to make more profits by producing more parts (Page 4) Automotive News - July 7, 2008 - Seat strategy: Lear aims to make more profits by producing more parts (Page 5) Automotive News - July 7, 2008 - Hyundai Santa Fe to get a 4-cylinder (Page 6) Automotive News - July 7, 2008 - Hyundai Santa Fe to get a 4-cylinder (Page 7) Automotive News - July 7, 2008 - Analyst: GM could tap UAW benefits fund (Page 8) Automotive News - July 7, 2008 - Analyst: GM could tap UAW benefits fund (Page 9) Automotive News - July 7, 2008 - Chrysler pitches gas savings on hybrid SUVs (Page 10) Automotive News - July 7, 2008 - Chrysler pitches gas savings on hybrid SUVs (Page 11) Automotive News - July 7, 2008 - Show me the money (Page 12) Automotive News - July 7, 2008 - Show me the money (Page 13) Automotive News - July 7, 2008 - Show me the money (Page 14) Automotive News - July 7, 2008 - Show me the money (Page 15) Automotive News - July 7, 2008 - Obituaries (Page 16) Automotive News - July 7, 2008 - Obituaries (Page 17) Automotive News - July 7, 2008 - Obituaries (Page 18) Automotive News - July 7, 2008 - Obituaries (Page 18A) Automotive News - July 7, 2008 - Obituaries (Page 18B) Automotive News - July 7, 2008 - Obituaries (Page 18C) Automotive News - July 7, 2008 - Obituaries (Page 18D) Automotive News - July 7, 2008 - Obituaries (Page 18E) Automotive News - July 7, 2008 - Obituaries (Page 18F) Automotive News - July 7, 2008 - Obituaries (Page 18G) Automotive News - July 7, 2008 - Obituaries (Page 18H) Automotive News - July 7, 2008 - Obituaries (Page 18I) Automotive News - July 7, 2008 - Obituaries (Page 18J) Automotive News - July 7, 2008 - Obituaries (Page 18K) Automotive News - July 7, 2008 - Obituaries (Page 18L) Automotive News - July 7, 2008 - New Web tool promotes GM service (Page 19) Automotive News - July 7, 2008 - Dick Colliver (Page 20) Automotive News - July 7, 2008 - Walter de' Silva (Page 21) Automotive News - July 7, 2008 - Larry Jutte (Page 22) Automotive News - July 7, 2008 - Jay Amestoy (Page 23) Automotive News - July 7, 2008 - Jay Amestoy (Page 24) Automotive News - July 7, 2008 - Jay Amestoy (Page 25) Automotive News - July 7, 2008 - Jay Amestoy (Page 26) Automotive News - July 7, 2008 - Jay Amestoy (Page 27) Automotive News - July 7, 2008 - Jay Amestoy (Page 28) Automotive News - July 7, 2008 - June caps a dismal first half (Page 29) Automotive News - July 7, 2008 - Personnel (Page 30) Automotive News - July 7, 2008 - Mitsubishi dumps 9 ad associations (Page 31) Automotive News - July 7, 2008 - Small-car transaction prices rise in June (Page 32) Automotive News - July 7, 2008 - Small-car transaction prices rise in June (Page 33) Automotive News - July 7, 2008 - To run the train, should you be an engineer? (Page 34) Automotive News - July 7, 2008 - To run the train, should you be an engineer? (Page 35) Automotive News - July 7, 2008 - To run the train, should you be an engineer? (Page 36)
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