Automotive News - March 24, 2008 - (Page 4)

4 • MARCH 24, 2008 Chrysler’s exec trio: Reports of friction mostly fiction Bradford Wernle bwernle@crain.com news ANALYSIS NEW YORK — Reports of executive-suite incompatibility be damned; Chrysler LLC’s brain trust is getting along just fine, thank you. At least that’s the message CEO Bob Nardelli and co-presidents Tom LaSorda and Jim Press were at pains to deliver during a series of media roundtables at the New York auto show — just a stone’s throw from the Park Avenue headquarters of Cerberus Capital Management LP, Chrysler’s owner. Nardelli acknowledged tensions but said that’s only natural when three talented executives work to- gether. “We will challenge each other, and that’s probably a little uncomfortable,” Nardelli said. “Jim will push. Tom will push. I will push. Press said the three are “trying to solve problems in a constructive way. Disagreement is healthy.” Reports of friction between Nardelli and Press have been most persistent. Nardelli’s ascent to the top Chrysler job last summer shocked the industry. Much initial media coverage centered on the controversy over his $210 million severance package from Home Depot. Meanwhile, Press was widely hailed as a savior when he arrived from Toyota. Some observers wondered aloud: Why isn’t the guy who built Toyota into a North American powerhouse running the show? But Press took the job knowing Nardelli would be his boss. And LaSorda stuck around, even though another guy took the CEO job that was once his. Nobody knows what incentives the three will be paid if Chrysler becomes profitable. But if the executives can’t make their partnership work, there’s much more to be lost than just a few fat paychecks. c Chrysler CEO Bob Nardelli, center, wraps his arms around co-presidents Tom LaSorda, left, and Jim Press at the Detroit auto show in January. Fukui: Nickel battery is best bet for hybrid Honda won’t follow rivals down lithium ion road — for now Hans Greimel hgreimel@crain.com Thriving Honda Honda CEO Takeo Fukui says American Honda will sell more vehicles in the U.S. this year, despite predictions of market meltdown. U.S. advertising will increase. Highly anticipated lithium ion batteries are too unreliable now for mass production. TOKYO — From Detroit to Tokyo, automakers are banking on lithium ion batteries to power the next generation of hybrid and electric vehicles, starting as early as next year. But Honda President Takeo Fukui says the technology is still too unreliable to warrant mass production. What’s more, Honda’s highly anticipated “affordable hybrid” — its answer to the Toyota Prius — will debut next year with standard nickel-metal hydride power packs. “Lithium ion batteries are still not usable from our perspective,” Fukui told Automotive News in an interview at Honda’s Tokyo headquarters on Wednesday, March 19. “In terms of reliability and durability, I must say there still remain some concerns,” he said. “I don’t think they are necessarily best suited for mass-produced vehicles.” Honda’s caution stands in marked contrast to the optimism voiced by rivals such as General Motors, Toyota Motor Corp., Nissan Motor Co. and Mitsubishi Motors Corp. All have announced plans to sell cars equipped with lithium ion batteries. Mitsubishi hopes to have its i MiEV electric vehicle on the road in Japan as early as 2009. Hybrid hopes The lithium ion race is also important because Honda is trying to catch Toyota in hybrid vehicles. Honda is introducing its new dedicated hybrid early next year, with an eye to selling 200,000 units a year. The company wants hybrids to make up 10 percent of sales by 2012. Toyota is planning to use lithium ion batteries in a plug-in hybrid to arrive by 2010. Nickel-metal hydride is the current hybrid standard. But automakers see lithium ion batteries as the next step because they are smaller, lighter and pack more electricity. The problem is lithium ion batteries tend to overheat. see FUKUI, Page 54 Honda President Takeo Fukui’s take on lithium ion batteries: “In terms of reliability and durability, I must say there still remain some concerns. I don’t think they are necessarily best suited for mass-produced vehicles.” NEWSCOM Where others see gloom, Honda chief sees boom in U.S. Hans Greimel hgreimel@crain.com TOKYO — Honda President Takeo Fukui is bullishly forecasting that his company’s U.S. sales will rise this year, despite new fears that the market volume will plunge below 15 million vehicles. “At the end of last year, the market was forecast in the mid-15 million units, and it may be that they have pushed that number downward,” Fukui told Automotive News last week. “But as far as Honda is concerned, we don’t believe there are go- ing to be any major changes.” Earlier this year, Honda said combined U.S. sales of Honda and Acura vehicles should climb 2.6 percent in 2008 to 1.59 million units. Fukui’s outlook came a day after J.D. Power and Associates lowered its 2008 U.S. sales forecast to 14.95 million light vehicles — the lowest projection from a major industry observer. Most people watching the industry expect 15.5 million to 15.7 million U.S. vehicle sales this year, down from 16.2 million in 2007. By the end of February, U.S. sales for Honda and Acura were up 1.5 percent for the year, compared with a 5.3 percent slump in the overall market. Honda is benefiting from increased demand for its fuel-efficient cars as drivers recoil from high gasoline prices. U.S. sales are expected to get a further boost later this year when the company releases its redesigned Fit subcompact, which arrived at Japanese showrooms last year. Fukui conceded Honda had not anticipated the booming demand for the first- generation Fit. It was introduced to the United States in 2006, nearly five years after its world debut. “We are behind in production even for the Fit currently being shipped to the United States,” Fukui said. “It probably would have been good if we launched it a year earlier.” In 2007, Honda sold 56,432 Fits, more than either the Element crossover or Ridgeline pickup. Fukui also said there is no change in the U.S. sales forecast for the Accord. The company is still counting on a small year-over-year increase from last year’s 392,231. Even with sales looking up, Fukui says the overall slowdown will affect U.S. production plans. Honda’s new Indiana assembly plant is scheduled to come online this fall, but there is less pressure to crank up output. “We are going to start operations in Indiana,” Fukui said, “and we believe we don’t have to be too expeditious about the ramp-up.”c To read a Q&A with Honda President Takeo Fukui, visit autonews.com/moreonline. autonews.com http://autonews.com http://autonews.com/moreonline

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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