Automotive News - May 5, 2008 - (Page 8)

8 • MAY 5, 2008 advertising OUR DEALERS ARE GROWING Mpg plan fuels states-rights battle Harry Stoffer hstoffer@crain.com AND SO CAN YOU! “With Zimmerman as a partner we have grown to be the # 1 GM Dealer in Albany, NY.“ Kara DePaula DePaula Chevrolet WASHINGTON — Just when it seemed like the political war over state regulation of greenhouse gases from vehicles could not intensify, it did. The Bush administration’s proposed fuel economy rules for the 2011-15 model years include an assertion that the new rules pre-empt state-by-state controls on greenhouse gas emissions. Industry executives say the provision does more than just restate a well-known administration position. “The lawyers tell me that that will have greater gravitas” in legal battles over the issue, said Mike Stanton, president of the Association of International Automobile Manufacturers. The association represents 14 import-brand automakers. The indus- try is united against state-by-state rules, Stanton said. Reactions from officials who favor state rules affirm that the pre-emption provision is not merely window dressing, Stanton told Automotive News. Lawsuit threat Governors of 12 states are threatening to sue the National Highway Traffic Safety Administration if it does not remove the pre-emption language. NHTSA is expected to release the final version of the regulations by year end. Early this year, California and 15 other states sued the EPA after the agency denied them a waiver from the federal Clean Air Act to enforce state rules. California Attorney General Jerry Brown called the new pre-emption effort an attempt to defy the U.S. Supreme Court and subvert the will of Congress. In April 2007, the Supreme Court ruled that the EPA must determine whether carbon dioxide from burning fuel in vehicles is a threat to public health and, if it is, to regulate it. Justices added that state greenhouse gas rules could exist alongside federal fuel economy standards. The EPA says it is developing a response to the court ruling. Last year, Congress approved an energy bill that requires federal fuel economy standards to increase 40 percent industrywide by 2020. Lawmakers rejected state pre-emption in the measure. Standards’ first phase Last month, NHTSA proposed the first phase of higher standards for 2011-15. The agency asserted that allowing states to enforce their own greenhouse gas rules would keep it from following Congress’ direction on the law. In effect, the energy law says the new fuel standards must demand more from smaller vehicles to prevent dangerous downsizing. But state greenhouse gas limits would curtail fuel use without regard for safety considerations, NHTSA said. NHTSA’s proposal would require a fleetwide average of about 31.6 mpg by 2015, about 25 percent higher than today. California-style rules aim for about 36 mpg by 2016. But industry leaders say that each state that adopts the rules would have unique requirements, depending on its sales mix. Dave Zuchowski, vice president of national sales for Hyundai Motor America, said at an industry conference here last week that state rules are “not manageable.” c RESULTS! • KEYES AUTO GROUP • IRA MOTOR GROUP • TOM WOOD AUTOMOTIVE • CHECKERED FLAG • AUTONATION • DIEHL MOTOR COMPANY • CORAL SPRINGS AUTOMALL • RUSTY ECK FORD • AUTOLAND • HENDRICK CARY AUTOMALL • PATRICK AUTO GROUP • HUBLER AUTOMOTIVE • PLEASANTON AUTOMALL • DEPAULA CHEVROLET • WALLACE NISSAN OF KINGSPORT • SUPERIOR CHEVROLET Dealers Prove Our Advertising Gets Kerkorian interest buoys Ford stock Amy Wilson and Jamie LaReau awilson@crain.com Kirk Kerkorian: Once again, roiling the waters DETROIT — Kirk Kerkorian’s investment kept Ford Motor Co. stock trading last week near its highest levels in almost six months. The stock reached $8.68 on Friday morning before closing at $8.27 . That was one day after Kerkorian representative Jerry York told Automotive News that he would unload Volvo and Mercury if he were in Ford CEO Alan Mulally’s shoes. York, a former auto executive, said he thinks the Ford CEO will hold onto the Lincoln brand. York and Mulally met in early April, just a couple of days after Kerkorian’s Tracinda Corp. began buying Ford shares. In that meeting, Mulally didn’t share his plans for the brands, York said. But he likes Mulally’s strategy. “I’m very confident that (Mulally’s plan) is the answer, and I think you’ll see that he’ll put Volvo on the market within the next year and a half,” York said. “There’s no rational reason for keeping Volvo or Mercury.” A Ford spokesman said Friday that Volvo is not for sale and that the company continues to invest in Mercury. On Wednesday, April 30, Tracinda announced that it would make a cash tender offer for up to 20 million shares of Ford stock at $8.50 a share. Tracinda owns 100 “ There’s no rational reason for keeping Volvo or Mercury. Kerkorian adviser JERRY YORK - ” million shares, representing 4.7 percent of Ford’s shares outstanding. Kerkorian has a history of pushing for change and board representation with past investments in Chrysler and General Motors. The Ford family’s 40 percent voting stake in its namesake company will make it difficult for Kerkorian to repeat that pattern. Asked last week whether he’s worried that Kerkorian’s involvement could distract Ford executives, Mark Fields, Ford president of the Americas, said management must concentrate on its own business challenges. “We can’t control what happens externally,” Fields said. “What we can control as a team is how we’re going to focus our efforts.” c GET A COMPLETE MARKETING PROGRAM! Guerrilla TV Marketing Radio Print Hispanic Direct Mail Web Design Henderson: GM will keep tight rein on inventory Jamie LaReau jlareau@crain.com GM’s 1st quarter 2008 2007 Internet Website Optimization In-Store CALL OR E-MAIL THE AGENCY THAT WILL WORK FOR YOU 24/7 (SERIOUSLY) 1-888-878-ZADV zauto@zadv.com or visit www.zadv.com DETROIT — General Motors intends to run a tight ship in North America, its largest market. The automaker is “absolutely committed” to aligning its production with demand and controlling costs, says COO Fritz Henderson. Slow vehicle sales in the United States and special charges contributed to GM’s first-quarter loss of $3.25 billion, reported last week. The automaker lost $42 million in the first quarter of 2007. Not including one-time items, GM lost $350 million, compared with a loss of $10 million a year earlier. “We do believe we need to manage our North American business in a more challenging environment,” Henderson said during a conference call. “We see stimulus arising in the second quarter and second half, but we’re operating the business as if it’ll be a tougher industry in the second quarter.” Revenue Adjusted net profit (loss)* Net profit (loss)** Total automotive profit (loss) North American auto profit (loss)* *Excludes special items **Includes special items Source: GM $42.7 billion ($350 million) ($3.25 billion) $392 million ($611 million) $43.4 billion ($10 million) ($42 million) $231 million ($269 million) “ We’re operating the business as if it’ll be a tougher industry in the second Most of GM’s reported loss came from one-time charges for its 49 percent stake in GMAC Financial Services and the Chapter 11 restructuring at Delphi, its former parts unit. GM also said it lost about $800 million in the quarter because of costs stemming from the UAW’s strike at supplier American Axle & Manufacturing Holdings Inc., which has idled several GM plants. GM will hold down incentive spending and boost production for its hottest cars, Henderson said. “So we want to also manage the mix to where the customer is going,” he added. Dealer inventories were at their lowest level since September 2005 with about 824,000 vehicles in stock, down about 206,000 vehicles from last April and down more than 84,000 vehicles from December 2007. But full-sized SUV and truck inventory is still high. GM has shut down several shifts at truck and SUV plants. That will take 138,000 units out of the production schedule for the rest of the year. GM would resume produc- quarter. GM FRITZ HENDERSON ” tion only if oil prices drop and demand for trucks rises, Henderson said. Overseas, GM continues to make money. The automaker posted a combined $1 billion gain before taxes from operations in Asia, Europe and other regions. c http://www.zadv.com http://www.zadv.com

Table of Contents Feed for the Digital Edition of Automotive News - May 5, 2008

Automotive News - May 5, 2008 Dodge dealers battle to bust Ram logjam Used-car price slump slams luxury makes INDUSTRY IN DISTRESS Tesla opens first dealership in L.A. Los Angeles Top auto execs to talk marketing at seminar Nader and the Corvair: GM edition tells whole story Dealers take Tundra to the people UAW official expects American Axle buyouts Ford plans more UAW buyouts at 2 plants Honda to some dealers: Upgrade or else Hyundai: Powertrains will take us halfway to mpg target Diesel dynamo Daimler cuts Chrysler value, again Ford domestic dealer count dips below 4,000 Seems like old times: More cash on the hood Toyota sister car poses a challenge for Subaru Suzuki to offer standard navigation in $16,000 car Mpg plan fuels states-rights battle Kerkorian interest buoys Ford stock Henderson: GM will keep tight rein on inventory Is it real, or is it just temporary? Ford Motor must stay focused on recovery 'Have you lost your mind?' Dealers are victims of Axle strike Federal oversight? Good heavens, no Geoff Polites: A salute Save a board seat for the UAW A car for everyone or cut, cut, cut, cut? Think of Buick as part of B-P-G Costs up in China, but bargains still abound Mexico sales fall 17% in March Obituary Hyundai reworks Sonata sooner rather than later Nissan's Dominique gets to the big dance Dana seeks new business with Japanese companies ZF will supply Nissan Certified Tool closes a plant German engineering company plans Ala. factory Dealers A Lexus colossus Used-vehicle leasing boosts showroom traffic Certified buyers opt for extended service contracts Repossessed vehicles offer dealers a profit opening Prepaid plans spark service visits beyond oil changes Key to managing floorplan costs: Be realistic Long-term loans: Convenience or bad deal? Dealers hunt upside-down buyers with leases, incentives and long-term loans Where have all the investors gone? Dealer rebounds from contract mess Dealers must choose: Reynolds, GM — or start over AutoTrader.com makes big pitch to bump up new-vehicle sales CAW, Ford reach extensive early labor deal Infiniti asks: Do you smell something? Sure, Nissan GT-R is impractical — but what a rush Faurecia: We'll break even in N.A. Suppliers join carmakers' charge into Russia Chrysler small cars, Jeep crossovers are hot A dreary April in Detroit Penske earnings rise in 1st quarter Lithia posts $1.9 million loss GM makes 2nd ethanol deal Group 1's earnings slip Magna profits down; sales rise AIADA picks dealer of the year Vox(wagen) populi — plus a sales pitch Wagoner's pension shift: More earlier, less overall COMMENT: Bargaining barbs will sting for a long time Bugging the boss: Who's listening to Porsche CEO? New models from the post office Critics have kind words for Pontiac's G8 Ford can't picture kids at design studio

Automotive News - May 5, 2008

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