Automotive News - November 17, 2008 - (Page 35) NOVEMBER 17, 2008 • 35 Mercedes cuts 1 shift in Ala. VANCE, Ala. — Mercedes-Benz U.S. International will eliminate a shift on one of the two lines at its SUV and crossover plant here. Beginning in January, the change will reduce output of M-class crossovers and GL-class SUVs. A second line that produces the M- and R-class models will continue as a two-shift operation. A MercedesBenz spokesman declined to say how many fewer vehicles would be built at Vance, which doubled in size in 2005 to a capacity of 180,000 a year. abroad, India’s automakers and suppliers are asking the government for financial relief. The industry wants a lower customs duty on metal imports and extensions of loan repayment schedules for small manufacturers. “The industry needs an immediate package to survive the current economic crisis,” J.S. Chopra, president of an industry trade group, said after a meeting of car and component manufacturers. HECKER Dealer scrambles after cutoff of credit continued from Page 8 Visteon CEO adds title DETROIT — The board of Visteon Corp. has elected CEO Donald Stebbins chairman of the board. Stebbins, 50, joined Visteon in 2005 as COO. He became CEO of the interior and electronics supplier in June. Stebbins replaces the retiring Michael Johnston, 61. longer would finance non-Chrysler vehicles. On Oct. 14, Chrysler demanded more than $20 million in payments from Hecker, the suit says. According to the suit, Hecker proposed an interim bridge that would allow his companies to continue doing business and to make payments to Chrysler. But without warning, the suit says, Chrysler suspended floorplanning on Oct. 15 and notified Hecker’s nonChrysler auto companies that his floorplaning was on hold. Chrysler also told the manufacturers that any amounts owed to Hecker should be paid to Chrysler. Those amounts included warranty repairs and incentives on new-car sales. “Chrysler Financial’s actions essentially advised the auto companies that Hecker’s financial condition could not sustain outstanding obligations,” the suit says. Termination As recently as Oct. 25, Hecker hoped he could salvage his relationship with Chrysler Financial. In an interview with the Star Tri- bune, Barbara Jerich, president of Denny Hecker Automotive, said: “Chrysler Financial and Denny have a relationship far beyond the auto floorplan. We have a rental-car company and a number of entities where Chrysler is a partner of his. And I know they’re working on restructuring debt and restructuring agreements between those two groups.” But on Nov. 7, Chrysler terminated Hecker’s entire credit line, including those for the leasing and rental-car businesses. The suit says income from fleet sales transactions was needed to service monthly debt payments of $500,000 to Chrysler Financial. c GREEN Conference shows electric cars well beyond pipe-dream stage continued from Page 3 GM Daewoo idles 4 plants SEOUL — GM Daewoo Auto & Technology Co. will idle its four South Korean plants for eight working days because of low demand. The company said exports of the Chevrolet Aveo to the United States will not be affected. GM offers dealer spiffs DETROIT — General Motors dealers can earn up to $500 for every used car and truck they sell under a promotion linked to the GM Certified used-vehicle program. GM announced the incentives Tuesday, Nov. 11, in an e-mail message to dealers that Automotive News obtained. Dealers qualify for the certificates when they buy eligible vehicles at auctions sponsored by GM or GMAC Financial Services. Dealers can redeem the certificates when they sell eligible 2004-09 Buick, Chevrolet, Pontiac, GMC and Oldsmobile used vehicles as certified and report the sales to GM, the e-mail said. GM spokeswoman Susan Garontakos declined to comment. Mexico sales plunge MEXICO CITY — Mexico’s dealers sold 83,306 new vehicles in October, down 14.3 percent from October 2007. It was the worst month for domestic sales, in terms of year-over-year decline, since October 1998, when the drop was 14.9 percent. India industry seeks help NEW DELHI — Reeling from tight credit and falling sales at home and stock watch Manufacturers BMW-ADR Daimler AG Fiat S.p.A.-ADR Ford General Motors Honda-ADR Hyundai-ADR Nissan-ADR PSA-ADR Renault-ADR Suzuki-ADR Toyota-ADR Volkswagen-ADR Closing price Nov. 14 Closing price Nov. 7 Weekly percent change 52-week high 52-week low advancing technology, Rhodes said. “We had the right basic landscape” in laying out those plans, he said. “What we underestimated was the rate of change.” Also, now that Chrysler is no longer “the support arm” for DaimlerChrysler’s fuel cell efforts, Chrysler is rethinking the role of fuel cell technology, Rhodes said. “We see it as an enabler on a range extender, not as the primary energy source” for a car. Utilities are ready to meet the demand from electric cars, said Eladio Knipping, senior technical manager for the environment at the Electric Power Research Institute. “Yes, the grid can handle it,” he said. There is plenty of capacity, and more can come on stream as the electric fleet grows. Even if older, coal-fired plants were the only source of electricity for plug-in vehicles, Knipping said, the greenhouse gas emissions from the plants would be 25 percent lower than the emissions generated by an equal number of vehicles running on gasoline. JOE WILSSENS Carlos Tavares: “Buy the car; sign the battery lease.” Contribution to Excellence. For more information on their award-winning innovations, and other speakers at the conference, go to www.autonews.com/greencars. c Leslie J. Allen and Richard Truett contributed to this report PACE green awards $63.60 104.41 34.85 8.79 31.07 36.40 18.58 23.20 83.90 147.00 32.75 117.59 232.30 $21.05 24.00 14.15 1.72 2.75 18.94 6.68 7.62 19.50 23.95 12.50 57.01 41.50 $27.30 29.74 25.50 1.80 3.01 21.65 6.68 7.67 19.50 24.40 14.10 63.68 100.00 $27.30 32.91 25.50 2.02 4.36 23.25 6.68 8.77 23.60 28.00 12.50 68.52 102.25 — –9.6% — –10.9 –31.0 –6.9 — –12.5 –17.4 –12.9 12.8 –7.1 –2.2 Separately, four suppliers were honored with the first Automotive News PACE Environmental Awards. The winners: BorgWarner Turbo and Emissions Systems, Continental, Magneti Marelli and PPG Automotive Coatings. PACE stands for Premier Automotive suppliers’ SERVICE In tough times, back shop pays the bills continued from Page 3 “ He’s better poised to survive the downturn than many other dealers, even though he’s a domestic dealer. Retail Groups Closing price Nov. 14 Closing price Nov. 7 Weekly percent change 52-week high 52-week low Asbury Automotive Group AutoNation Group 1 Automotive CarMax Lithia Motors Penske Auto Group Sonic Automotive $3.72 6.35 7.86 8.36 3.50 7.41 3.37 $3.51 6.55 9.51 9.18 3.65 7.14 4.46 6.0% –3.1 –17.4 –8.9 –4.1 3.8 –24.4 $18.00 19.59 30.37 24.10 18.69 23.58 24.85 $1.75 3.97 4.34 7.64 1.53 5.04 2.01 Suppliers Biggest weekly swings from among the Automotive News top 150 suppliers to North America whose stocks are traded in the United States Closing price Nov. 14 Closing price Nov. 7 Weekly percent change 52-week high 52-week low Losers TRW Automotive Hayes Lemmerz Int. Tenneco Inc. Strattec Security Corp. Cooper Tire & Rubber $2.88 0.60 2.50 17.00 5.16 $5.12 0.94 3.91 25.81 7.79 –43.8% –36.2 –36.1 –34.1 –33.8 $29.56 5.02 31.39 46.32 20.80 $2.75 0.50 1.96 17.00 4.81 Information obtained as of 4:00 p.m. on Friday, Nov. 14, 2008. Because of a lag in the reporting of trades, the closing prices disclosed above may differ slightly from the eventual closing prices. ADR = American Depository Receipt Compiled by PricewaterhouseCoopers, Intraweek data provided by Comstock. Powered by Stockgroup Greenfield Dodge is running an absorption rate of about 110 percent, meaning that service and parts operations cover 110 percent of the store’s overhead. His absorption rate recently has run as high as 125 percent. Sheldon Sandler, CEO of Bel Air Partners, a dealership consulting firm in Princeton, N.J., says car dealers typically aim for a 60 to 70 percent absorption rate, while commercialtruck dealerships run closer to 100 percent. Greenfield’s business is a good mix of both, he says “If your gross profit from parts and service covers all those overhead expenses, that would be 100 percent absorption,” Sandler says. “You would not have to sell any new cars to break even. That is nirvana for a car dealer because his profits would come from new-car sales. “He’s better poised to survive the downturn than many other dealers, even though he’s a domestic dealer.” Greenfield credits his service and parts director, Mark McTamney, 46, SHELDON SANDLER Bel Air Partners ” with developing the ideas that make the service department hum. One idea was to create a separate service marketing department. The marketing director, Diana Velez, has launched efforts such as Ladies’ Night, a Wednesday evening workshop. Greenfield launched the program in response to requests from female customers who wanted to learn about today’s complex vehicles in an atmosphere that isn’t intimidating. Other programs have included a Night Owl special — a special rate for customers who drop by in the middle of the night. That’s popular with fleets, he says. This summer the dealership gave customers a gasoline voucher to cover their expenses getting to the service department. McTamney cooperates with businesses that other dealers might see as competitors. “For years I’ve advertised in their (Jiffy Lube’s) waiting room,” he says. “If customers need an oil change, I don’t have a problem with that. They don’t do brakes, so I do that. Instead of looking at them as bad competition, I try to work with them.” In the current hard times, Greenfield Dodge is also willing to negotiate on service prices. “Some things customers just can’t afford right now,” McTamney says. “We do a lot of negotiating on repair bills because that’s what’s needed right now.” Dick Greenfield himself tries not to focus on the turmoil surrounding Chrysler LLC or whether http://www.autonews.com/greencars
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