Automotive News - March 24, 2008 - (Page 1)

autonews.com ® MARCH 24, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Industry straps in for rough ride As bad news mounts, carmakers scramble to slash costs, output Leslie J. Allen lallen@crain.com Whether this is a recession or not, automakers and dealers are girding for a continued pounding. February sales declined for four of the Big 6 automakers, and executives say it may be months before the market stabilizes. How bad will it get? Estimates vary. J.D. Power and Associates predicts U.S. light-vehicle sales will tumble this year to just 14.9 million. Meanwhile, the National Automobile Dealers Association projects sales of 15.7 million units, down from 16.2 million in 2007. To stay afloat, automakers are cutting production, laying off workers and asking suppliers to take price cuts. Here’s what major automakers STORM CLOUDS Used-vehicle prices tumble ➤ Japanese wary of strong yen ➤ 46 53 are doing to cut costs: Ford is offering buyouts to 8,000 hourly employees. Nissan is putting two U.S. assembly plants on a four-day work week to cut vehicle inventories. Chrysler cut five production shifts and announced up to 10,000 job cuts. Toyota is trimming production of its Tundra pickup and Sequoia SUV. General Motors has delayed some capital expenditures until later this year. It, too, is offering worker buyouts. To be sure, there are glimmers of hope. The Federal Reserve’s rate cuts have reduced dealerships’ floorplan costs. And dealers, such as Robert Allen, president of Robert Allen Auto Group Inc., say the credit crunch has see SALES, Page 53 Suzuki introduced the Kizashi 3 concept at the New York show. Big Apple roundup News from the New York show: Dodge’s pitch for the Challenger: A halo you can afford | PAGE 8 | Chrysler plans image ads | PAGE 8 | Ford lists 6 to succeed Mulally Amy Wilson and Richard Truett awilson@crain.com TOP 125 DEALERS This week, Automotive News publishes its annual ranking of the 125 largest U.S. dealership groups. AutoNation, headed by Mike Jackson, right, is still on top. But No. 2 Penske Automotive Group, led by Roger Penske, left, is gaining fast. See story on Page 16. The list is inserted on Page 17. Dollar’s dive sinks Audi Q7 in U.S. market | PAGE 40 | Nissan Maxima takes aim at luxury Euro brands | PAGE 40 | Pontiac adds sporty variants | PAGE 40 | DETROIT — New Ford Motor Co. marketing chief Jim Farley is on a short list to replace CEO Alan Mulally. Farley’s management skills and his potential to be CEO made him the No. 1 pick for Ford’s top marketing job last year, says Ford personnel chief Joe Laymon. The list Farley joins Ford executives Internal CEO Mark Fields, Joe candidates: Hinrichs, Stephen Lewis Booth Odell, Don Leclair Jim Farley and Lewis Booth Mark Fields on the company’s Joe Hinrichs list of internal Don Leclair CEO candidates, Stephen Odell said Laymon, who identified the candidates in an interview last week with Automotive News. Laymon, Ford’s group vice president of corporate human resources and labor affairs, says the list is reviewed annually. Executives can be dropped or added as Ford’s board of directors gets closer to determining the next CEO. “There is no promise,” Laymon said, but “we do believe that from that group of folks could come the next Alan Mulally.” Hyundai Genesis: Little dough, lots of go | PAGE 40 | New angles on axles No longer is the axle a humdrum commodity part. Low-friction axles can improve fuel economy — a top priority for automakers. | PAGE 38 | Bucking the trend on hybrid batteries GM pushes luxury superstores Jamie LaReau jlareau@crain.com No compromises Laymon, who calls himself the “owner” of Ford’s succession-planning process, said the board of directors reserves the right to consider outside candidates. That’s what Ford did in 2006 when it hired Mulally see THE BIG 6, Page 55 Upscale outlets GM U.S. premium brand franchises Cadillac 1,400 Saab 238 Hummer 170 Source: GM Ford still seeks outside execs ➤ 55 General Motors is helping dealers who want to consolidate its Cadillac, Saab and Hummer luxury franchises into superstores, and the company says it could offer financing to some dealers on a case-by-case basis. In a strategy reminiscent of its Buick-Pontiac-GMC consolidation, GM appears to be creating multibrand luxury dealerships that could Pontiac-GMC store and a HummerSaab store. “Out of necessity, you’ll see more and more of these combined stores,” Hurd predicts. In the hybrid derby, everybody’s backing lithium ion batteries — except Honda President Takeo Fukui. He says they’re far from ready. | PAGE 4 | Slow consolidation GM has not set a firm goal for the number of stores that will house Hummer, Saab and Cadillac. In part, that’s because Cadillac has 1,400 franchises, while Hummer has only 170 franchises and Saab 238. You could team all the Hummer and Saab stores with Cadillac dealerships and still have lots of Cadillac stores left over. GM will not force any consolidations, but it will help dealers create see PREMIUM, Page 55 compete more effectively with rivals such as Lexus. GM has offered few details about its strategy, but it’s possible to see the company’s vision at Hurd Auto Mall in suburban Providence, R.I. Last week, GM confirmed that it had provided financial support to dealer Chris Hurd when he purchased a Saab dealership in January. Hurd’s auto mall now encompasses a Chevrolet store, a Buick- PACE setters Twenty-three finalists are competing in this year’s PACE competition, which honors innovation by suppliers. See profiles of 6 of this year’s big ideas. | PAGE 24 | NEWSPAPER BRENDA PRIDDY http://autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - March 24, 2008

Ford lists 6 to succeed Mulally GM pushes luxury superstores Industry straps in for rough ride Bob Irvin is a worthy addition to Hall of Fame Debate at Scion: How to grow Ford moves executives in Asia to new jobs CEO of lanelogic: We're still here Kia's N.Y. duo Chrysler's exec trio: Reports of friction mostly fiction Where others see gloom, Honda chief sees boom in U.S. Fukui: Nickel battery is best bet for hybrid Beijing conference explores key issues in China market Planworks keeps its role as buyer for GM ads Lincoln: MKS will make up for brand's slow start in '08 Deal's no big deal: Styling top reason to buy GM Penske's Smart start: He'd like 15,000 more Dodge's pitch for Challenger: A halo that you can afford Chrysler plans 'We listen' ads You go, Bob With zest, activist Ditlow remains on lemon patrol Autos did the job after 9/11; don't bet on that now Chinese cars? Dealer beware Solar power is the only answer Where will we get power for the Volt? Want higher CAFE? First, do this In N. California, hybrids are hot Detroit 3 can learn from the Marlboro Man The Prius is a phenomenon Wait 3 years, then judge Ford How many Jeeps will India buy? Lithia looks into improper sales reports at dealerships AutoNation's lead shrinks as largest U.S. dealer group Honda ad agency creates unit to build Acura brand Study: Consistent theme in auto ads builds viewer recall Big-truck sales continue slide in Feb. -- off 27.1% MazdaSpeed revs up racing accessory sales Calif. company eyes electric charging stations for Volt, Vue Indictment: Bribe scheme cost GM $83.3 million The greening of Toyota dealerships 6 more finalists in race for PACE recognition Tenneco expands Japanese work, seeks more Bosch buys diagnostic equipment firm in China JV will design vehicle platforms Citation moves headquarters NxtGen tests emissions system VW stake may help Porsche on fuel economy rules Chrysler's Project Genesis wins over Ore. dealer Germany, new EU members send up European sales Saturn will choose store system soon VW thinks modular for flexibility at auto plants Automakers eager as axles turn high-tech Talking drivetrains with American Axle Dollar halts U.S. retail sales of Audi Q7 hybrid Hyundai: Genesis Coupe offers more go for dough Maxima's target: Luxury Euro makes Pontiac adds 3 sporty variants Outsider Elmer Johnson shook up GM Importer Yanase was Hall of Fame member Obituaries Redesigned TSX has many Acura firsts Dealers Certified sales up 7.5% in Feb.; Audi leads the way eBay's new Web site has new look, more features Big pickups and SUVs lead plunge in used-vehicle prices Ex-Reynolds CEO O'Neill joins J.D. Power Auto Hall of Fame will induct 8 Liberatore looks beyond Daimler Molina gets the top job at GMAC F&I pioneer Pat Ryan to retire from Aon Study: Hydrogen research worth the cost Gulf States trial halted As yuan rises, so do prices of Chinese parts Personnel exec Laymon: Ford still seeking outside talent GE gives supplier credit Dana CEO wants Asian growth Tesla launches production Todt steps down as Ferrari CEO Union pursues Toyota effort Chrysler offers spiffs for military Land Rover ads focus on heritage Mark Rechtin Fresh heir: To turn green, must BMW create brand? GM ponders mini-muscle Camaro New Ford ads coming in April With a spiffier image, Lincoln would rock abroad Rival says Nardelli's OK Ford hails its cab, but mpg is an issue

Automotive News - March 24, 2008

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