Automotive News - October 13, 2008 - (Page G10) OCTOBER 13, 2008 • 3 83rd year — No. 6329 Booth, a Ford star in Europe, lands CFO hot seat in U.S. Amy Wilson awilson@crain.com news ANALYSIS Lewis Booth grasps the crucial bond between exciting vehicles and the company’s longterm prosperity. Asia-Pacific and Ford’s South Africa unit. Some might call him the Fritz Henderson of Ford. Henderson, GM’s COO, took a similar path through overseas units before ascending to CFO and then COO. Henderson is heir apparent to GM CEO Rick Wagoner. Capital One stops some auto inventory financing DETROIT — Capital One Financial Corp. will stop financing vehicle inventory for auto dealers in New York and New Jersey, starting next month. Capital One spokeswoman Tatiana Stead said Friday that it was a business decision based on a variety of factors. “It’s only about vehicle inventory financing, and it’s unrelated to other auto loans,” she said. Stead said the suspension affects fewer than 20 dealers, adding that dealers were told in August. She said that dealers in Louisiana and Texas, where Capital One is active, will have access to inventory financing. — Reuters DETROIT — Think of Lewis Booth as another European import that Ford Motor Co. is relying on to revive the Blue Oval. With Booth’s move to CFO, Ford chief Alan Mulally is looking to tap into the management savvy that helped put Ford of Europe on an upswing. In leadership roles in Europe since 2003, Booth, a 59-year-old Englishman, presided over robust growth. During the first half of 2008, Ford of Europe posted profits of $1.32 billion before taxes. That was the unit’s highest first half since 1989. The key to that growth? Product. Booth started in finance but understands that long-term prosperity is based on exciting vehicles that entice customers without large incentives. On Booth’s watch, Ford of Europe developed and introduced successful vehicles such as the European current-generation Ford Focus and its variants, the smaller Ford Fiesta and the mid-sized Ford Mondeo. Several of those vehicles will migrate to North America in coming years. Before moving to Europe, Booth headed Mazda Motor Corp., Ford And Booth could be the CEO-inwaiting at Ford, too. He is one of a handful of executives that former Ford human resources chief Joe Laymon identified to Automotive News in March as possible successors to Mulally, 63. Don Leclair, the 56-year-old retiring CFO, led the finance department as Ford secured a $23.4 million financing package in November 2006. Mulally, the new CEO at that time, has been praised for choosing to borrow such a large amount. With Ford bleeding cash and fighting for survival, it’s now largely up to Booth to spend every cent of that money wisely. c Detroit dilemma: Big prices for small cars Automakers add content, pricing, inventory Jamie LaReau jlareau@crain.com Going up The average transaction prices for most compact cars have risen. VW revives sign-then-drive lease incentive program Volkswagen Group of America is reviving its sign-then-drive promotion to stimulate new-model leasing. Effective Friday, VW began waiving the security deposit and the first monthly payment for customers leasing any of these 2009 models: Rabbit, Jetta 2.5L, Jetta SportWagen 2.5L, GTI, New Beetle, New Beetle convertible, Eos, Passat, Passat wagon, Tiguan, Touareg and Routan, as well as the 2008 R32. Additionally, there is a $500 loyalty offer to owners of 1999 model or newer VWs who buy or lease selected models. — Patricia Scott GM won’t reopen Heard’s Scottsdale, Ariz., store General Motors is “not interested” in keeping Bill Heard Enterprises Inc.’s closed Chevrolet dealership in Scottsdale, Ariz., an attorney representing Heard Enterprises said Friday. GM executives “do not care for it to be a continued point of sale for their products,” Heard Enterprises attorney Robert Rubin told U.S. Bankruptcy Judge Jack Caddell. GM spokeswoman Susan Garontakos confirmed GM will not reopen the Scottsdale dealership, which closed Sept. 12. Heard’s 13 other stores closed Sept. 24, and the company filed for Chapter 11 protection Sept. 28. — April Wortham DETROIT — The Detroit 3 are adding premium equipment to small cars to replace lost profits from big trucks. A small car with big profit margins? It may sound like one of those handis-quicker-than-the-eye magic tricks, but European automakers do it, and now American marketers are learning how. “It comes down to product execution,” says Jim Farley, Ford Motor’s group vice president of marketing and communications. “You can’t just put leather and a sunroof in an EX or an XLE version of your C-D car and expect people to get excited.” Over the next three years, Ford will bring six small vehicles from Europe to the United States. Farley is counting on equipment such as Ford’s EcoBoost powertrains to add value that consumers will pay for. EcoBoost technology combines turbocharging and gasoline direct injection to achieve better fuel economy. General Motors is pursuing a similar strategy for its own small cars. American consumers may choose small vehicles because of high gasoline prices, “but they’re not going to want to drive strippers,” says Jon Lauckner, GM’s vice president of global program management. But pricing will be tricky. The cost of satisfying new safety and fuel economy regulations will translate to higher prices, which will make it harder to add pricey features. In the past, automakers might have compensated for federally mandated costs by taking features out of a vehi- Honda Civic AUG. 2007 $18,476 AUG. 2008 $19,184 Chevrolet Cobalt Ford Focus Aug. 2007: $15,639 Aug. 2008: $16,455 Source: Edmunds.com Nissan Sentra Aug. 2007: $17,650 Aug. 2008: $17,740 Toyota Corolla Aug. 2007: $16,670 Aug. 2008: $18,232 Aug. 2007: $16,675 Aug. 2008: $16,997 cle. But that’s not likely if small vehicles have to appeal to customers moving down from larger models, Lauckner says. “What you don’t see is people saying … ‘Let’s go ahead and take something out,’ ” he notes. Analysts say the Detroit 3 must achieve three goals: 1. Add enough content to their small cars to justify higher sticker prices. 2. Sell enough small cars to compensate for the decline in sales of highprofit SUVs and pickups. 3. Manage inventory to avoid price cutting. Jesse Toprak, executive director of industry analysis for Edmunds.com in Santa Monica, Calif., says that adding premium content and limiting inventory can make small cars aspirational. But, Toprak says, setting prices too high will hurt volume. What works for niche brands like Mini won’t work for see SMALL, Page 57 CORRECTIONS A story about specialty-car maker N2A on Page 22T in some editions of the Sept. 22 issue misspelled the name of two vehicles and gave an incorrect date. The story and a photo caption gave the wrong price for another vehicle. N2A built the Panoz Esperante. N2A’s Anteros sports car will debut at the Los Angeles Auto Show. Gene Langmesser joined parent company Kanter Concepts in December 2003. N2A’s 789 vehicle costs $135,000. Conference panel explores future powertrains Which clean powertrains will emerge as winners? Learn the answers at the first Automotive News Green Car Conference and Exhibition on Nov. 13 in suburban Detroit. Patrick Oliva, Michelin’s corporate vice president in charge of prospective and sustainable development, has analyzed the practicality of alternative powertrains unveiled at Michelin’s annual green-car rally. Oliva will appear on a panel discussing future powertrains. Joining Oliva will be Jaycie Chitwood, Toyota Motor Sales U.S.A.’s senior strategic planner for advanced technologies. Chitwood works on longterm product development for alternative-fuel vehicles and also evaluates the environmental impact of fuels. Other conference sessions will address the business case for going green and ways to reduce a vehicle’s energy consumption outside the powertrain. The conference also will offer a product showcase of green vehicles, parts and technology. And Automotive News will present its first PACE Environmental Awards. c The green scene What: Automotive News Green Car Conference/Exhibition When: Thursday, Nov. 13 Where: Rock Financial Showplace, Novi, Mich. Cost: $795, or special rate of $675 for Automotive News subscribers To register: www.autonews.com/green Questions: green@autonews.com or 313-446-0485 Host sponsor: Ernst & Young
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.