20090914-NEWS--0001-NAT-CCI-AN_-- 9/11/20095:11PMPage1 ofWichitainWichita,Kan., sales asweexit2009andenter2010.” “but thepaceofrecoveryandauto portant isnotSeptember,”hesays, doesn’t muchmatter.“Whatisim- September’s SAARwillbe—andit lyst, saysitistooearlytosaywhat Worldwide. half,” addsMikeJacksonofCSM pressed evencomparedtothefirst thing inthe9millions”forSeptember. Global Insightsays:“I’dsettleforany- tember, Anwylsays. million inthefirstfivedaysofSep- Aug. 25to31beforeedgingup8.9 SAAR careenedto8.3millionfrom month beforetheprogram.But 9.5 millioninJune,thefirstfull wyl, CEOofEdmunds.com,upfrom gust to13.7million,saysJeremyAn- justed annualizedsalesrateforAu- Aug. 24propelledtheseasonallyad- Morgan Stanley’sleadautoanalyst. worst oftheyear,”saysAdamJonas, September’s salesrate“maybethe clunker levels,asmanyhadhoped. says ofhisshowroom. Anniston DodgeinAnniston,Ala., Wade Dinsmore,generalmanagerof Maybe worse. dealers andautomakershadfeared. for clunkerswaseverybitasbad ing public. mid-1990s, beforedealersstartedgo- prices tolevelsnotseensincethe franchise bubble,slashingdealership NEWSPAPER [email protected] Jesse Snyder showrooms paralysis hits Post-clunker [email protected] Donna Harris has killedthemarket but creditcrunch Stores aredirt-cheap, fordealershipdeals Deep freeze SEPTEMBER 14,2009 Tom WhiteJr.,generalmanagerof Some dealersseesignsoflife. George Pipas,Ford’stopsalesana- The restoftheyear“willbede- Analyst GeorgeMaglianoofIHS The federalincentivethatended Sales didn’tjustslipbacktopre- “It wasasstillagraveyard,” The showroommiseryaftercash And pricesmaysinkfurtherbefore The creditcrisishaspoppedthe Dealer marginssoared see CRASH ➤ , Page 30 30 did thebloodbath.Partssuppliers bankruptcies andliquidations. $10 billiontopreventabloodbathof pleaded forafederalbailoutofupto tomakers, theirindustryassociations steep productioncutsbyotherau- of ChryslerandGeneralMotors suppliers bracedforthebankruptcies [email protected] and RobertSherefkin David Barkholz butisthatreallygood news? — So far, nosupplier bloodbath To keepFlexibleProductsCo.alive,ChryslersupplierGlennReidlaidoffnearlyhalfofhisemployeesandcutsalaries. cialize incardealershiptransactions. ing toinvestmentbankerswhospe- of whattheywereayearago,accord- dealerships areworthlessthanhalf even somepremiumimport-brand has beensinkingfortwoyears.Now Francisco. Vogel, adealershipbrokerinSan been turnedonitshead,”saysPhil they begintorecover. The moneynevercame.Butneither —Inthespring,asauto Dealers whowanttosellfaceadou- The valueofDetroit3dealerships “The marketfordealershipshas Entire contents©2009CrainCommunicationsInc.Allrightsreserved. sharply orarenonexistent. teamed withstoreearningstosug- multiplier traditionallyhasbeen ing hurtfarworsethanothers.The plunged, too,withsomebrandsbe- brand andaprimelocation—has good customerrelations,astrong called bluesky—intangiblessuchas Ⅲ Ⅲ remainferocious.Strongersup- dations, theysay,pricecompetition term interestoftheindustry. would havebeeninthebestlong- lost opportunity.Theysayashakeout tives andconsultantsarelamentinga turings ratherthanliquidations. have mostlybeenfinancialrestruc- scale bankruptciesfiledbysuppliers forecast. Therelativelyfewlarge- survived betterthananyonehad have tanked. bers inthedealership-valueequation ble whammybecausebothkeynum- The multiplierthatmeasuresso- Dealership profitsaredown Without theforecastwaveofliqui- Now, though,someindustryexecu- lines tofinanceacquisitions.Dealer- stores, mostdealerslackthecredit and equipment. today, notcountingtherealestate just threetimesnetpretaxearnings ings evenayearagowouldcommand more thansixtimesnetpretaxearn- tan marketsthatwouldhavefetched gest asellingprice. ues asthecreditcrunchdrivessup- sultants say. dustry needs,theexecutivesandcon- sary investmentsinr&dthatthein- will theybeabletomaketheneces- tracts thatallowthemtoturnaprofit healthy supplierscaninsistoncon- low-ball bidsforbusiness.Onlywhen er oneswillingtomakeunrealistic, pliers willbedraggeddownbyweak- Even iftheywereshoppingfor Desirable dealershipsinmetropoli- To besure,thewinnowingcontin- see see SUPPLIERS STORES O WILSSENS JOE , Page , Page 31 30 sell . marketers saytheshowsstill Ⅲ This weekat the Web On at autoshows cause no-shows Tight budgets Call itcrazylikeafox. bustling suburbofPasadena. of retailstorefrontsinthe trafficked stretch a heavily studio amid design advanced putatop-secret Hidden inplainsight a verypublicrole. Chairman EdWhitacreistaking employees, newGeneralMotors commercial ortalkingwith Whether he’sappearinginaTV for GMchairman High profile Whitacre’s way: breaking news. for advancecoverageand See from theFrankfurtautoshow. Tuesday: autonews.com autonews.com/Frankfurt $159/YEAR; $5/COPY | PAGE16 News andphotos autonews.com: automakers. But budget-cutting a trendamong show, continuing Frankfurt auto will skipthe Several brands | PAGE3 | PAGE22 ® anpagead.qxd 5/22/2009 10:11 AM Page 1

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D_17135_9_AutNew_R03.indd 1 5/20/09 9:27:32 AM 20090914-NEWS--0003-NAT-CCI-AN_-- 9/11/2009 5:14 PM Page 1

SEPTEMBER 14, 2009 • 3

84th year — No. 6377 briefs Mulally helps launch a redesigned congress Alan Mulally will be one of the Alan Mulally’s Marriott at the Renaissance Center, Key facts GM will participate keynote speakers at the 34th Auto- “One Ford” vision just a few blocks from Cobo Center, motive News World Congress in De- has led to the which hosts the Detroit auto show. in NADA convention troit. The CEO of Ford Motor Co. will successful The scheduling change and proximi- DETROIT — Co. begin the second day of the congress U.S. launches ty to the show mean it will be easier of the new Ford When: Jan. 12-14 will participate in the 2010 National on Wednesday, Jan. 13. for executives to attend both events. Since coming to the automaker Taurus and World Congress attendees will re- Where: Detroit Marriott at the Automobile Dealers Association from Boeing Co. in 2006, Mulally has Transit Connect. ceive a pass to visit the auto show on Renaissance Center convention in Orlando, Fla. successfully kept Ford out of the Thursday, Jan. 14, before it opens to Cost: $995 early registration fee GM traditionally has been a major same desperate straits that forced such as the new Ford Taurus and the public. by Nov. 20 (save $300) presence at the NADA convention. crosstown rivals General Motors and Ford Transit Connect. In keeping with everything hap- Information: 313-446-0326 or But GM’s restructuring this summer to accept federal bailouts In a change from other years, the pening in the global auto industry, autonews.com/worldcongress and its rift with NADA over the and ultimately reorganize in Chap- Automotive News World Congress the theme of the congress is “Navi- Exclusive lead sponsors: group’s support of legislation to ter 11. opens Tuesday afternoon, Jan. 12, gating the New Automotive Epoch.’’ IBM and PricewaterhouseCoopers restore terminated dealers Mulally’s vision for developing which is also the second and final A new, tighter format includes a day products under the umbrella of “One media preview day at the North and a half of presentations. There will prompted speculation that GM Ford’’ already has led to successful American International Auto Show. be two dinners complete with be- and after-dinner speakers to round might snub the Feb. 13-15 U.S. product launches of vehicles The congress will be at the Detroit fore-dinner networking receptions out each day. c convention. In an e-mail to Automotive News, GM spokeswoman Susan Garontakos said there will be a A hands-on boss gives GM a nudge general GM make meeting at the convention. But she said: “I’m not Whitacre chairs sure how the brands will roll out meetings or utilize the space on the a board that’s exhibit floor.” breaking with past — Edward Lapham Jamie LaReau CFO Young is expected [email protected] to leave GM DETROIT — Ed Whitacre, once un- known in the auto industry, is shak- DETROIT — After 18 months as ing up the boardroom at General Mo- finance chief, CFO Ray Young is tors Co. expected to leave General Motors The new chairman is the company Co. within weeks, a person familiar spokesman in a TV spot that breaks with the situation said. Young, 47, this week, ambling through GM’s de- became CFO in March 2008, taking sign studios as he announces the au- over for Fritz Henderson, who tomaker’s 60-day money-back guar- antee on new vehicles. became president and COO at the But Whitacre’s biggest impact has time and was made CEO a year been within later. news GM, where he is GM spokesman Tom Wilkinson ANALYSIS taking an active declined to comment. Young could role in the com- not be reached. pany’s unstable post-bankruptcy — Jamie LaReau culture. Whitacre leads a new batch of directors who need to learn the au- to industry fast, and that board faces CORRECTIONS a management team used to calling the shots. Ⅲ A story on Page 26 of the Aug. 31 The new board isn’t “even a shad- issue should have said that Ian ow of the former board,” says a One GM insider calls Chairman Ed Whitacre a straight-talking, savvy executive and adds: “He’ll see through the BS.” Beavis is executive vice president of source close to both boards. The new Nielsen IAG’s automotive practice. 13-member board has eight new High profile improve market share quickly sets a MORE ON THE NEW GM Ⅲ In a Page 1 story in the Sept. 7 is- members — Whitacre, six outside di- tough goal for management. The New GM’s numbers don’t add up ➤ 12 New GM Chairman Ed Whitacre sue, the last name of Douglas rectors and Fritz Henderson, who be- source says: “Whitacre is clearly a dri- Opel deal faces hurdles ➤ 29 has Greenhaus, a regulatory executive came a director when he was named ven man. I think he’s the real deal.” Beware instant-expert syndrome ➤ 34 at the National Automobile Deal- CEO in the spring. Ⅲ Visited GM offices to meet with The past board acted too slowly as ers Association, was misspelled. So far, Whitacre has held meetings employees GM slid toward bankruptcy, protect- ducts what some call “diagonal slice” Ⅲ A list on Page 16 of the Sept. 7 with employees throughout the com- Ⅲ Authorized a big ad campaign ing then-CEO Rick Wagoner, the meetings. He talks with everyone — issue gave the wrong name for a pany and given Henderson a quali- and starred in a GM TV spot source says. “They lost a lot of time from midlevel managers to lower Bentley vehicle that will be shown fied vote of confidence. The board Ⅲ With other GM board members, not firing Wagoner sooner. This new managers to salaried employees — at the Frankfurt auto show. It is the broke with tradition by holding up delayed the sale of Opel to board is right to be very aggressive.” and demands action, sources famil- Mulsanne. the sale of a majority stake in Adam renegotiate a deal iar with his visits say. Ⅲ In a story on Page 18 of the Sept. 7 Opel AG, GM’s German subsidiary, to Genial and calculating “He asks them: ‘What do you do? issue, “Study: Loan terms are get- negotiate a better deal with Canadian “If he’s with you, he’s your Most sources describe Whitacre as Explain your job to me,’ ” a source ting smaller,” the last name of supplier Magna International Inc. strongest supporter,” says one per- supportive. Since GM emerged from says. “He’s very specific to people. Melinda Zabritski, Experian Auto- and Russian state lender Sberbank. son who knows Whitacre. “If he’s federal bankruptcy protection July He’s very hands-on.” motive’s director of automotive The board gave approval to a deal against you, you’ve got a serious 10, Whitacre has made several visits Those who have met Whitacre say credit, was misspelled. last week. problem.” to GM’s Detroit headquarters and its he can tackle the toughest issues. He Ⅲ A story on Page 29 of the Sept. 7 Whitacre, 67, is the former CEO of GM declined to make him available Warren, Mich., technical and design is genial and doesn’t say a lot but can issue quoted a Wall Street Journal AT&T Corp. and known for his bull- for this story. offices. be direct yet engaging, some say. report that Cerberus Capital Man- dog style. But he came to GM with no One knowledgeable source says He doesn’t just chat up the top agement investors “are withdraw- auto industry experience. Whitacre’s position that GM must brass, insiders say. Whitacre con- see WHITACRE, Page 29 ing more than $5.5 billion, or nearly 71 percent of the hedge fund as- sets.” Citing a miscalculation, The Journal has corrected the report to PACE application deadline is Sept. 18 say the investors “asked to with- draw $4.77 billion from the firm’s Sept.18 is the deadline for auto sup- jointly by Ernst & Young, Transporta- After an extensive review of all fi- original hedge funds,” or 70 per- pliers to apply for the 2010 Automo- tion Research Center Inc. and Auto- nalists, including site visits, the win- cent “of the assets belonging to out- tive News PACE Awards. motive News. ners will be announced at a black-tie side clients in the funds.” The PACE (for Premier Automotive The 2010 Automotive News PACE ceremony in Detroit on April 12. Ⅲ A story on Page 10 of this issue Suppliers’ Contribution to Excel- Awards will be presented in five cate- For complete information about gives the wrong amount for the gov- lence) Awards are open to suppliers gories: product, product-Europe, in- the Automotive News PACE Awards ernment subsidy that Japanese that contribute products, processes, formation technology and services, and an application, visit autonews. buyers of the i-MiEV materials or services directly to vehi- manufacturing process and capital com/pace or call 313-446-6039. The electric can receive. It is $15,000. cle makers. The awards are presented equipment, and open. application fee is $1,500. c 20090914-NEWS--0004-NAT-CCI-AN_-- 9/11/2009 3:18 PM Page 1

4 • SEPTEMBER 14, 2009 Post-Ch. 11, Chrysler brand awareness slides

Bradford Wernle surements for mid/long term suc- bankruptcy, during which it shipped [email protected] Chrysler’s challenge cess.” The document, presented to no new vehicles to dealers; and its re- DETROIT — Chrysler Group’s three Chrysler Group’s brands scored lower than the and Ford brands dealers Aug. 18 as part of a revamp of tail network has been gutted by the brands are faring poorly against their in awareness, favorable opinion, consideration — and ability to convert dealer advertising associations, com- termination of 789 dealerships. major competitors in the minds of shoppers to buyers, according to Chrysler research. pares Chrysler, and to the According to Advertising Age, a sister consumers, according to the au- CHRYSLER DODGE JEEP FORD TOYOTA Ford and Toyota brands, which scored publication of Automotive News, tomaker’s internal research. Awareness 77 83 77 92 92 higher in the funnel measurements. Chrysler is holding discussions with Under new Fiat-led management, Opinion 10 13 13 23 52 The page showing the numbers up to 10 advertising agencies. But the the company plans to address that carries the headline “We have to do company says that it is not conducting Consideration 10 15 8 21 36 shortcoming by changing the way it business different.” a formal review and that BBDO World- communicates its Chrysler, Dodge Retail market share 2.3 6.2 3.7 12.6 17.0 The document shows Dodge was wide remains its agency of record. and Jeep brands in advertising. Source: Chrysler Group internal document presented to dealers Aug. 18 highest in customer awareness with a Wes Brown, a partner in Iceology, a Chrysler’s research shows that the score of 83, while Chrysler and Jeep Los Angeles consumer research firm, three brands lag the big-selling Toy- Chrysler, Dodge and Jeep brand the purchase-funnel measurement, each scored 77. The Ford and Toyota says the Chrysler scores are “pretty ota and Ford brands in awareness, fa- bosses now have full profit-and-loss which marketers use to gauge the suc- brands each scored 92. (See box.) distressing. The only way they’re going miliarity, consideration and other el- accountability. With that responsibil- cess of a brand in converting con- Chrysler declined to discuss the to pull themselves out is product, and ements that lead customers to make ity, they can choose their own cre- sumer awareness and intentions into methodology used in its research. unfortunately, we’re 18 months away.” purchases. ative ad strategies, although media consideration and purchases. The automaker already faces steep Before Fiat-derived products arrive Chrysler will move away from its buying is likely to remain centralized. An in-house Chrysler document ob- challenges: It has no new product in showrooms, Brown says Chrysler previous strategy that sometimes Chrysler’s research suggests a shake- tained by Automotive News says coming until at least mid-2010; it is must improve consumer opinion and featured all brands in one ad. up is needed. Its brands fared poorly in Chrysler “must improve funnel mea- short of cash after two months in prepare customers for change. c Dealers face tough reinstatement talks with GM, Chrysler Neil Roland [email protected] At issue Dealer groups are likely to clash Terms of the dealer proposal that with General Motors Co. and Chrysler could be sticking points in talks Group about possible reinstatement with GM and Chrysler procedures for eliminated dealer- Ⅲ Arbitration panels would use ships and compensation for closed state franchise laws as one stores, congressional aides say. guide to dealer reinstatement. Talks involving automakers and Ⅲ A terminated dealership would dealer groups have not been sched- be paid $3,000 per vehicle sold uled but are likely to begin in the next in a recent year of the dealer’s few weeks, said two aides involved in choosing. preliminary discussions. The talks, Ⅲ A rejected dealer would get a which would also include legislators new franchise automatically if who support the dealers as well as GM or Chrysler re-enters his or Jim Click Automotive Group avoided a dip in sales by holding a tent sale inside the Tucson Convention Center representatives from the Obama ad- her territory. the week after cash for clunkers. The dealership sold about 700 new and used vehicles at the event. ministration’s automotive task force, are being organized by Sen. Richard U.S. bankruptcy law and would con- Durbin, D-Ill. sider a dealer’s financial viability. Clunkers over? Time for a sale! After months of dispute, the Na- State laws are friendlier to dealers tional Automobile Dealers Associa- than the U.S. Bankruptcy Code, Arlena Sawyers $14 million over six days, Khayat said. year just for the sale, Khayat said. The tion and the Committee to Restore which judges applied this summer to [email protected] Jim Click Automotive is part of Tut- group also purchased about 250 to Dealer Rights, a group of terminated approve GM’s and Chrysler’s termi- Many dealers nursed cash-for- tle-Click Automotive Group, of 300 new vehicles from rejected GM and Chrysler dealers, reached nation recommendations. clunker hangovers in the days that Irvine, Calif. Tuttle-Click ranks No. 51 Chrysler Group dealerships and a agreement Sept. 3 on a proposal to “The state franchise laws are anathe- followed the government’s sales pro- on the Automotive News list of the top closed dealership. submit to the car companies. ma to the car companies,” an aide said. motion. dealership groups in the United Advertising included live TV and ra- The proposal calls for GM and Another sticking point likely will be Not Jim Click Automotive Group in States, with retail sales of an estimat- dio spots, newspaper ads, 500,000 Chrysler to disclose the criteria used the requirement in the dealer propos- Tucson, Ariz. That week the dealer- ed 10,810 new vehicles in 2008. pieces of direct mail and 500,000 to pick dealerships for rejection and to al that terminated dealerships be paid ship sold about 700 new and used ve- Jim Click Automotive sells Ford, e-mails. In a weak advertising market, reinstate any dealership that exceed- $3,000 per vehicle, the aides said. hicles at a tent sale extravaganza in Lincoln, Mercury, Hyundai, Chrysler, “we spent the same amount of money ed the standards. A dealer not restored With dealerships selling an average of the Tucson Convention Center. Dodge, Jeep, , Mazda and Mit- on advertising, but our dollar is buy- could appeal to an arbitration panel. 761 new vehicles in 2006, a typical “To tell you we didn’t have our con- subishi vehicles. This is the group’s ing us more,” Khayat said. “We are The proposal also would require shuttered store might get $2.28 million. cerns going into the sale, I’d be ly- 12th August off-site sale. able to stretch our dollars by a third.” terminated dealerships to be paid If all 789 eliminated Chrysler deal- ing,” said Sam Khayat, the group’s This year’s event worked the same as $3,000 per vehicle for those sold in erships and the 1,350 GM stores des- COO. Jim Click Automotive had sold always except for the timing. The sale Target trucks 2006, 2007 or 2008, with the dealer ignated for termination were to close, almost 500 new cars and trucks was Aug. 24-29, a week later than usu- He said the group targeted current picking the year. they could get a total of $4.9 billion. through cash for clunkers. al, to steer clear of cash for clunkers. owners of big pickups and SUVs, since “But only 10 to 15 percent of the Cash for clunkers officially ended those vehicles typically did not qualify ‘We’ll listen’ Who will foot the bill? people qualified for cash for clunk- Aug. 24. Click halted its clunker sales under cash for clunkers. It aggressive- “We’ll listen and see if we can’t “Where’s that money going to ers, and a lot of people wanted to buy Aug. 22. ly sought used-car buyers, too. reach a nonlegislative solution,” said come from?” said an aide to Rep. Dan used cars,” Khayat said. More than In the past, the group sold as many During the event, Jim Click dealer- GM spokesman Greg Martin. Maffei, D-N.Y. half the sales at the convention cen- as 1,000 units during the sale. Sales ships closed their in-store sales oper- Eight U.S. lawmakers have been The proposal doesn’t specify ter were used vehicles. were down this year because of the ations and moved all operations and trying to get dealer groups to negoti- whether the money would be paid by economy, Khayat said. inventory to the convention center. ate with the automakers as an alter- the companies or the government. Planning The group sold 1,600 new and used Khayat said the dealing typically gets native to legislation that would re- A third point of likely dispute in- After the blockbuster new-vehicle vehicles in August, double the sales so hectic on the last day of the sale verse more than 2,000 terminations. volves the rights of terminated dealers promotion of the year, a sale of that of its best month over the past year. that body shop and parts and service The bill passed the House in July but if GM and Chrysler re-enter the deal- size doesn’t happen without plan- Unlike the many dealerships that managers pitch in. has stalled in the Senate. ers’ former markets, the aides said. ning, marketing and people. found themselves with little invento- “We give them a quick training The aides said GM and Chrysler The proposal calls for an eliminat- Jim Click Automotive spent more ry after cash for clunkers, Jim Click class at 8 a.m. and tell them that at may not agree to arbitration panels ed dealer to get a new franchise auto- than $250,000 luring consumers — Automotive had more than 700 new 11 o’clock we’re going to run out of and are certain to object to the two matically if he or she applies for it many of whom had not qualified for and about 600 used vehicles on hand, salespeople and that’s when you criteria panels would use to decide and qualifies. cash-for-clunker incentives — to the Khayat said. guys take care of customers,” Khayat whether to restore dealerships. Said Rep. Frank Kratovil, D-Md., event. The marketing dollars paid off: The dealership group’s manufac- said. “And that’s exactly what hap- Under the proposal, panels would “We still have a lot of work to do to The 10-dealership group took in about turers send it extra vehicles every pens.” c apply state franchise laws rather than reach any agreement.’’ c SUCCESSANpageAD.qxd 9/8/2009 11:56 AM Page 1

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6 • SEPTEMBER 14, 2009 Chrysler: Under Fiat, EV still on track Richard Truett Lee told a conference of electrical en- said the company’s plans for electric [email protected] gineers and students in suburban and hybrid vehicles have not DETROIT — Fiat’s preference to Detroit last week. “We must have an changed since Fiat’s arrival. use its own powertrain technology in electric vehicle. Before Fiat took over Chrysler in future Chrysler Group products will Robert Lee of “You’ll see an electric vehicle for June, Chrysler showed three electri- not derail Chrysler’s plan to launch Chrysler: “We sure. And then you’ll see something cally driven vehicles under develop- The Taurus: A decent start — but an electric vehicle, said Chrysler’s must have an else. I’m not sure if it is a hybrid or a ment: a battery-powered electric it’s too early to draw conclusions. powertrain chief. electric vehicle.” range-extender.” sports car based on a Lotus Europa Robert Lee, vice president of pow- The term range-extender refers to a and two plug-in hybrids with gasoline ertrain product engineering, said Rhode Island, Vermont and Wash- hybrid that uses a gasoline engine to engines that recharge the batteries. Ford hails Chrysler and other major automak- ington. charge the batteries on a plug-in hy- Chrysler officials said they planned ers must sell electric vehicles in Cali- Starting in 2012, at least 3 percent brid. to build one by late 2010. fornia and the 13 other states that fol- of major automakers’ sales in those “The question is timing,” Lee said. Lee did not disclose the timing for early Taurus low California’s emissions standards. states will have to be of battery-pow- “Right now there is a raging debate the launch of an electric vehicle. Those other states: Arizona, Con- ered electric vehicles or plug-in hy- inside the company about which one Fiat has said it favors diesels and, to sales figures necticut, Maine, Maryland, Massa- brids. will come out of the chute first.” lower costs, wants to use its own chusetts, New Jersey, New Mexico, “We are being driven by the ZEV Fiat is reviewing all Chrysler Group powertrain technology in Chrysler Amy Wilson New York, Oregon, Pennsylvania, [zero-emissions vehicle] mandate,” vehicles. But a Chrysler spokesman vehicles. c [email protected] DETROIT — Sales of the Ford Tau- rus are still a far cry from the days when it was the best-selling name- plate in America. But Ford says the Chrysler may use restyled and re-engineered sedan is off to a better start than company of- ficials had expected in this weak Fiat engine system market. Ford says its other summer launch, the Transit Connect, also is surpass- in some U.S. models ing internal sales forecasts. With 2,300 sold in August, first- Luca Ciferri wasted in traditional systems. month sales for the new Taurus were [email protected] Fiat will offer its first MultiAir en- more than double Ford’s internal BALOCCO, Italy — Chrysler Group gine in Europe this month on the Alfa goal of 1,100, said Ken Czubay, the may incorporate Fiat’s new MultiAir Romeo MiTo small hatchback. company’s vice president of U.S. fuel-saving technology in some gaso- The sources say Chrysler is consid- marketing, sales and service. line engines, Fiat sources say. ering MultiAir technology for these Orders for the high-performance Fiat S.p.A. considers the variable engines: SHO model are 50 percent higher valve timing system a breakthrough. Ⅲ 2.0- and 2.4-liter four-cylinder units than expected, Czubay said. Total The company says MultiAir improves produced by the Global Engine Man- Taurus sales, counting the outgoing power by about 10 percent and re- ufacturing Alliance, which Chrysler model, were 3,398 in August, down duces fuel consumption 10 percent. operates with Hyundai and Mit- MultiAir’s electrohydraulic command of intake valves increases fuel economy. 23.8 percent. The MultiAir system provides direct subishi. The engines are used in the With 2,220 sold in August, sales of control of air and combustion in en- Chrysler Sebring, Dodge Caliber and Ⅲ The Pentastar V-6 engine family will debut next spring on the 2011 the Transit Connect small commer- gines, cylinder by cylinder and stroke Avenger and Jeep Compass and Patri- now under development. The 3.6- Jeep Grand Cherokee. MultiAir cial van were 42 percent higher than by stroke, without using the conven- ot. MultiAir units could arrive in late liter Pentastar family will replace could be added in the second half of internal forecasts. The Transit Con- tional throttle. That saves energy 2011. seven Chrysler engines. The new V-6 2012. c nect is imported from Turkey. “We’ve hit the ground running,” Czubay said. Although it’s too early to judge the Hold the horses: Dodge kills Caliber SRT4 success of either product launch, he said, their positive start in August and Bradford Wernle little muscle-car panache to its smallest car. It was the balance of sales among Ford’s [email protected] The powered by a 285-hp turbocharged version of the cars and trucks “may be a harbinger DETROIT — Dodge is dropping its fastest, most Caliber inline four-cylinder engine built at the Global En- of better business conditions to powerful small car for the 2010 model year. The SRT4: gine Manufacturing Alliance factory in Dundee, come.” Dodge Caliber SRT4 — a turbocharged, muscle- Dodge’s Mich., operated jointly with Hyundai and Mit- Ford is still building dealer stocks of bound version of the Caliber — is being discontin- fastest subishi. The six-speed manual transmission was the 2010 Taurus and Transit Con- ued. car is supplied by Getrag, of Germany. nect. Despite what Ford calls the bet- “The Dodge Caliber SRT4 was planned for a lim- dead. Chrysler’s SRT (Street and Racing Technology) ter-than-expected performance in ited production run in the highly competitive sport group now has five vehicles for 2010: the Chrysler August, the Taurus still has a long compact market segment,” Dodge said in a state- ber of Caliber SRT4s sold since the vehicle was in- 300C SRT8; the Dodge Charger SRT8, Challenger way to go. Taurus sales in 2008 to- ment. troduced in late 2007. SRT8 and Viper SRT10; and the Jeep Grand Chero- taled 52,667 — nothing like the old Dodge did not provide information on the num- The Caliber SRT4 was Dodge’s attempt to add a kee SRT8. c days. c Falling supply will slow ’s hot sales

Diana T. Kurylko Inventories for all carmakers ➤ 24 Demand for the 2010 Legacy [email protected] is one reason Subaru’s Subaru of America’s strong sales Japan, but it will take several months inventory is low. momentum amid a collapsing overall to bring inventory to the optimal 60- market will slow dramatically this to 65-day range, Doll said. month because of the brand’s shrink- “If you count the supply in the ing vehicle stocks. pipeline, cars that are on their way, it September will be flat because July is probably about a 40-day supply,” and August sales dried up Subaru’s he said. “That’s the lowest point already lean inventory, said Tom we’ve had since the late 1980s.” Doll, COO of Subaru of America. Through August, Subaru sales were Subaru had 18,000 vehicles on the up 11.2 percent in a market down ground on Sept. 1, a 16-day supply. 27.9 percent. Last month the au- That was down from 26,600 units tomaker surged 51.5 percent — while Aug. 1, a 32-day supply. industry sales overall rose 1.0 percent On Feb. 1, the brand had 41,700 ve- — because of the federal govern- hicles on hand, an 89-day supply. ment’s cash-for-clunkers incentive. Subaru’s factory in Lafayette, Ind., Subaru benefited not only from the is working an extra Saturday shift to clunker program but also from de- said, Subaru expects this year to top has stayed focused on selling awd awd at the prices we have gives us pump out more vehicles for the mand for its new Legacy sedan and its all-time high of 200,703 sales in cars and crossovers. distinction in the market,” he said. brand’s 603 dealers. Outback wagon. 2006. He said Subaru is doing well “The fact that we are a niche play- “We are not trying to appeal to Extra vehicles are also coming from Despite the lean inventory, Doll here because it has new product and er and no one can touch us with everyone.” c ANpageAD.qxd 9/4/2009 1:01 PM Page 1

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8 • SEPTEMBER 14, 2009

CEO Yann NADA: Don’t need new lending watchdogs Delabriere: Faurecia’s total Neil Roland Commerce, banks, mortgage lenders states, Wood said. racially discriminatory lending prac- work for the [email protected] and auto finance companies to op- At NADA’s Washington conference tices. The complaints alleged that VW plant in WASHINGTON — The National pose the bill. this week, the group will ask its 19,000 lenders let dealers mark up interest Chattanooga, Automobile Dealers Association will NADA contends that dealer-assist- members to urge their members of rates on loans based on subjective Tenn., is “still mobilize members this week to try to ed loans shouldn’t be lumped with Congress to oppose the bill, he said. criteria without telling consumers. fluid.” block creation of a consumer finan- complex products that proved sus- The nonprofit Consumer Federa- Those 11 cases have led to settle- cial-protection agency backed by the ceptible to manipulation and decep- tion of America, which is lobbying for ments valued at more than $100 mil- Faurecia Obama administration. tion and that contributed to the U.S. the bill, disputes NADA’s assertions. lion, says the National Consumer A bill introduced by Rep. Barney financial crisis. “There have been considerable abus- Law Center, co-counsel in the suits. Frank, a Massachusetts Democrat “We don’t need new rules; we don’t es in the auto lending sector that have The settlements, the last of which plans factory who chairs the House Financial Ser- need a new agency,” NADA spokes- harmed consumers, especially minori- was in 2007, covered auto financing vices Committee, would establish a man Bailey Wood said. “We just need ty consumers,” said Travis Plunkett, provided from the early 1960s into to supply federal agency to police home loans, to enforce the rules already working in the federation’s legislative director. the 1990s, said Stuart Rossman, the credit cards and other financial prod- the auto industry.” He cited national class-action law- center’s litigation director. ucts sold to consumers. Car loans already are tightly regu- suits filed on behalf of millions of mi- Said Wood: “It shows we just need VW in Tenn. On the lobbying front, NADA has lated by the Federal Reserve, the Fed- nority customers against auto fi- to enforce laws already on the books, David Barkholz joined forces with the U.S. Chamber of eral Trade Commission and the nance companies and banks for not create a new agency.” c [email protected] French parts giant Faurecia plans to open at least one factory in North America to support new business at a Rising residuals encourage leasing of America Inc. assembly plant being built in Chat- tanooga, Tenn. Used-car shortage Faurecia CEO Yann Delabriere told Residuals rebound Automotive News last week that Fau- helps values recia will supply Chattanooga with The gap between the industrywide parts from each of its four business average predicted residual value recover from ’08 segments: seats, interior trim, exteri- for 3-year-old used vehicles and Arlena Sawyers ors and exhaust systems. [email protected] their actual residual value has been narrowing. The figure More than one plant is possible. This time last year, lessors took represents a percentage of the Michael Heneka, president of Faure- heavy losses when many off-lease ve- vehicle’s sticker price when new. cia North America, said the company hicles brought thousands of dollars does not mix production of seats and less than had been projected. The 50% Residual forecast Hyundai vehicles have retained interiors with exhaust systems. Typi- residual values of the vehicles tum- 42 percent of their sticker price, ahead cally, seat plants are built close to a fi- bled when gasoline prices spiked and 45 of 2009 forecasts. The company now nal-assembly plant. used-car prices tanked. offers leases on only three vehicles, VW will open the $1 billion Chat- including the Genesis coupe, shown. This year is a different story. An in- 40 tanooga plant in 2011. The carmaker dustrywide shortage of used vehicles Actual retention will build a new mid-sized sedan there. is lifting the residual values of cars Delabriere said it is too early to say and trucks coming off lease. That in 35 how much Faurecia will spend for turn is making leasing more attrac- Chattanooga because its total work tive to finance companies. 30 for the VW plant is “still fluid.” Peter Miles, executive vice presi- VW is Faurecia’s largest global cus- dent of operations at BMW of North 0 tomer, accounting for about 22 per- Jan. Mar. July America, said the values of end-of- May cent of 2008 revenues of $17.66 billion. lease BMWs have increased steadily Source: Automotive Lease Guide Delabriere said Faurecia has no this year, although they still aren’t as plans for a technical center in Chat- high as the company would like. tanooga. Most technical support for “We still lose some money on those Tennessee will come from company cars, but it’s more than a 50 percent rowed steadily most of this year. sumers’ monthly payments. But then Hyundai is among the brands with technical operations in Mexico. improvement over last year,” Miles Three years ago, Automotive Lease many finance companies pulled back three-year residual values that are Faurecia has 28 plants in North said. Guide projected that 2006 BMW cars from leasing. running ahead of forecasts, Automo- America, including nine in Mexico. and trucks would bring about 51 per- tive Lease Guide data show. Delabriere said Faurecia has cut About 2.6 million cent of their original sticker prices. Re-entering leasing On average, Hyundai cars and about 2,000 employees in North Amer- BMW is just one of the auto compa- Through the first eight months of GMAC Financial Services stopped trucks have retained 42 percent of ica this year in response to customer nies and financial institutions that 2009, those vehicles have retained an writing leases last year, but it re-en- their sticker price in the first eight production cuts that have hit the en- will have to remarket an industry to- average of 44 percent of their sticker tered leasing in August in 45 states months of this year. Hyundai’s aver- tire industry. It has announced plant tal of about 2.6 million off-lease vehi- prices. with seven models. Among the rea- age projected residual value for 2009 closings in Kentucky and Canada. cles this year, 8.3 percent more than Automotive Lease Guide expresses sons GMAC cited: rising used-car is 41 percent. Delabriere said North American in 2008, according to Manheim. its residual-value projections as a values. Hyundai Motor America CEO John revenue, which totaled $2.65 billion In August, 3-year-old models on av- percentage of a vehicle’s original GMAC spokesman Mike Stoller said Krafcik said company-supported leas- in 2008, will fall about 30 percent this erage sold for 43.0 percent of their sticker price. the days of $99- and $199-a-month ing is now confined to its Elantra Tour- year. It would have been worse if not original sticker price, according to BMW expects about 130,000 vehicles leases are over. He said leasing is now ing and Genesis and Genesis Coupe. for Faurecia’s business with the Automotive Lease Guide. Three years to come off lease in the United States a tool for buyers who want to change Hyundai expects to expand more North American assembly plants of ago, the company had projected that this year — “slightly higher” than last vehicles frequently, do not drive a lot heavily into leasing when its re- VW and BMW Group, Delabriere those vehicles would sell for 44.8 per- year, Miles said. BMW sells about half and are willing to pay to drive a cer- designed 2011 Sonata is released in the said. About one-third of sales in cent of sticker. its new vehicles through leases. tain vehicle. first half of 2010, he said. North America are to European car- In August 2008, actual residuals Until last year, automakers often “Leasing is something we’re mov- Said Krafcik: “As we go forward, makers, he said. were falling 4.9 percentage points subsidized lease deals through their ing forward on and expect to contin- leasing will become a bigger part of Although those makers have suf- short of the forecast. The gap has nar- finance companies to reduce con- ue to do,” Stoller said. our strategy.”c fered in the recession, their vehicle sales have held up better than those of the Detroit 3, Delabriere said. For example, Faurecia supplies full GM picks SCI to supply Web sales leads to all dealers interiors for the X5 and X6 crossovers made at BMW’s Spartanburg, S.C., Leslie J. Allen CEO Chris Cawston says leads are de- this. No one can put a finger on why through SCI. But dealers can hire SCI plant, he said. Spartanburg stepped [email protected] livered to dealers instantly, not held our leads are sometime delayed by or use other vendors to manage those up its exports to offset lower 2008 General Motors Co. has chosen and then released in batches. “If you days. This has always been one of our leads. That can involve such things as sales in North America. Canadian technology firm SCI Ltd. to don’t respond to leads promptly, they complaints.” providing more information about Delabriere said Faurecia should funnel Internet leads to all GM fran- go bad in a hurry,” Cawston says. GM spokesman John McDonald the person making the inquiry or benefit from its designation as a pre- chise dealers. Some GM dealers had not been giv- confirmed that SCI had been chosen sending out product information. ferred, long-term supplier to Ford According to SCI, the deal should en details of the deal. But Asher Pan- “to handle a consolidation move of Cawston says half of GM’s dealers Motor Co. under Ford’s Aligned Busi- save GM at least $10 million annually ian, general manager of Joe Panian internal software systems for us that already use SCI’s lead management ness Framework program. by consolidating work now being done in suburban Detroit, says will make processing customer leads system in their stores. SCI’s software is Globally, Ford was Faurecia’s fifth- by various Internet-lead providers. his store has lost business because of much faster and improve dealer re- accessed online, rather than through a largest customer in 2008, with pur- SCI’s core business is to act as a sin- delays in getting Internet leads. sponsiveness to those inquiries.” He server installed in the dealership.c chases, including those of Volvo, of gle source of a variety of online leads, “To have real-time leads is a better declined to comment further. about $1.68 billion. Delabriere said he whether they are for new- or used-ve- way to do business,” he says. “I’m glad All Cadillac, Chevrolet, Buick and Richard Truett contributed to this expects Ford eventually to become his hicle sales or service and parts. SCI they are finally getting onboard with GMC dealers will get their leads report company’s third-largest customer. c anpagead.qxd 4/8/2009 11:10 AM Page 1

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10 • SEPTEMBER 14, 2009 Despite skid, Preh makes progress in N. America

Chrissie Thompson $35 million of Preh’s $450 million in When the supplier set up its North 80,000-square-foot factory in Mon- not at that time targeting Chrysler,” he [email protected] worldwide sales in 2008, said Nick American headquarters in suburban terrey, Mexico, that employs 250. The said. “That has been a good decision.” DETROIT — German supplier Preh Lontscharitsch, Preh Inc.’s senior Detroit five years ago, the goal was to factory opened in 2006. Since Chrysler emerged from bank- GmbH entered North America in vice president of sales. achieve 10 percent of company sales ruptcy June 10, Preh has submitted 2004 with four employees and a plan According to the market research by 2008 — an estimated $45 million. BMW is top customer quotes for business with the new to start winning Detroit 3 business. firm IHS Global Insight, Preh captured “Without the things that we cannot Preh’s largest global customer when company. So far, so good. 7 percent of the market for heating, control, which is the market decline, it entered the United States was BMW, The success of the Bad Neustadt, Last year the North American unit ventilation and air-conditioning con- we are above our goals,” Lontschar- which made up 30 percent of Preh’s Germany, company in North America accounted for 8 percent of global trol units in North America. itsch said. sales. BMW still ranks No. 1 with 28 has benefited global operations, Lont- sales for the maker of driver controls, Product launches in the past year percent of sales in 2008. scharitsch said. Preh’s operations in sensors and electronic control units. Revenue will rise in 2009 include climate control units for the When Preh came to the United Portugal supply electronic compo- And the supplier expects a big jump Despite the collapse in North Ameri- Ford F-150 pickup, Mustang sports States, it had some contracts with nents to the plant in Mexico. Business in sales in the region in 2009. can vehicle production this year, car, Taurus sedan and Flex and Lin- General Motors, but none with Ford with Ford in North America has en- Preh Inc., the North American divi- Preh’s revenue from the continent will coln MKT crossovers; and center or Chrysler. It still doesn’t supply parts abled Preh to submit quotes to Ford of sion, has components on seven new increase to $45 million in 2009. Next stacks for the Lincoln MKZ sedan and to Chrysler, which is fine with Europe, he said. That resulted in Preh’s vehicles launched in the past year. year, North American revenue should Chevrolet Equinox crossover. Lontscharitsch. “One year ago, we saw first European Ford contract for a The division accounted for about reach $60 million to $65 million. Preh supplies customers from an how Chrysler was doing, and we were product that will debut in late 2010. c

Mitsubishi, which plans to sell about 400 i-MiEVs a month in Japan starting in April, already has orders for 900. Mitsubishi has 900 advance orders for EV Hans Greimel [email protected] TOKYO — In one month, Corp. has taken 900 advance customer deposits for its i-MiEV elec- tric vehicle. The four-passenger car will go on sale next April in Japan. Mitsubishi began taking orders July 31. Mitsubishi says it wants to sell about 6,000 i-MiEVs worldwide, in- cluding 5,000 in Japan, during the first year of sales. That comes to about 400 a month in Japan. On Sept. 4, the car got an additional boost when France’s PSA/Peugeot- Citroen SA announced plans to re- badge the Mitsubishi-made car in Europe starting in fall 2010 and sell 25,000 vehicles a year. That nearly doubles Mitsubishi’s own sales tar- get. The Peugeot version will be called the iOn. Boosting volume of the lithium ion battery-powered car will be crucial to bringing down the car’s high sticker price. In Japan, the i-MiEV will cost ¥4.38 million ($47,480). Buyers can qualify for a green-car subsidy of about $1,500 from the government. Mitsubishi already is selling the i-MiEV to fleet customers in Japan and has filled orders for all of the 1,400 units it plans to deliver by March 2010. Mitsubishi says it ex- pects sales to reach 15,000 units in the second full year of sales. By the fourth year, ending March 31, 2014, it plans to sell 30,000 units, most of them in Japan and Europe. The company officially hasn’t made a decision on selling the car in the United States, but U.S. sources say it is penciled in for 2012. Including the sales to PSA/Peu- geot-Citroen, volume within five years is projected to reach 55,000 a year. c anpagead.qxd 4/8/2009 11:21 AM Page 1

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12 • SEPTEMBER 14, 2009

DAILY AUTO NEWS >> You can get the news you need every day. Go to autonews.com/signup opinionopinion and sign up for our daily e-mail newsletter. Rejected dealers GM: Just add up the numbers General Motors — the new one, doesn’t have a lot of car shouldn’t get not the old one — is shedding and truck sales. Market share and sales Saab, Hummer, Saturn and But news reports say Pontiac. that the new chairman of are going to take a hit. their hopes up Besides getting rid of those four the board, Ed Whitacre, It is useful that the National Automobile Dealers Associa- brands and their dealers, GM is expects to see sales and GM might as well tion, the Committee to Restore Dealer Rights and other deal- shedding about 1,350 other market share increase. It dealerships that still can operate isn’t going to happen. er groups have compromised on a proposal for a nonlegisla- for another year or so but can’t GM is losing dealers get used to it. tive settlement in the rejected dealership case. It means unity order cars from GM and are in the who sold cars, as well as in the dealers’ campaign to be treated fairly when automak- process of winding down. In other brands, that represented ers use Chapter 11 to restructure. words, the cars and trucks hundreds of thousands of individual brands that remain. But the dealers whose stores were rejected by General Mo- normally sold by those dealers sales. It won’t take long The further the brands can distance tors and Chrysler shouldn’t get their hopes up. Getting their already have disappeared from the before sales for the new themselves from GM, the better off they’ll franchises back remains a long sales charts. GM are compared to those be. There is no positive image that “General There is shot at best. We also have a recession, and the of the old GM, revealing a dramatic Motors” brings to the consumer’s buying company has just come out of Chapter 11 decrease. process. It’s all about the four brands. no guarantee A ruling by Judge Arthur Gonza- lez in U.S. Bankruptcy Court in reorganization, with all the baggage that It would be better to calculate what Buick probably has a better image in contains. would be a reasonable share of the market China than it does in the United States. that anyone will New York last month ended any hope that Chrysler dealers had for If GM is able to get 15 to 20 percent of the for the new GM and then set sales targets. Chevrolet and Cadillac are the strongest, U.S. market, it will be nothing short of a That would make it easier to forecast sales and GMC probably doesn’t have much of using state franchise laws to get bargain seriously miracle performed by the remaining and measure results. an image at all. back their franchises. A solution dealers. The General Motors name is still Market share and sales are going to take with the dealers. can come only from Washington. If you add it up — or perhaps, more suffering from its brief trip into bankruptcy, a hit. GM might as well get used to it. Add A bill that would allow dealers to correctly, subtract it — you’ll see GM so it makes sense to concentrate on the up the numbers. regain their rejected franchises — known as the Automobile Dealer Economic Rights Restoration Act — cleared the House of Representatives this summer but is languishing in the Senate. As a result, legislators who support dealers have urged them to seek a nonlegislative solution. Clunkers program Even though the dealers have agreed on a single proposal, there is no guarantee that anyone will bargain seriously with was a disaster them. To the Editor: Before the compromise proposal was reached, GM said it Editor Jason Stein’s Aug. 24 column would negotiate with NADA. Chrysler said it wanted to resolve “Crazy, dynamic — and done” conveyed the matter without legislation. But it would be easier for the the real spirit of the clunker program. car companies to rely on the ruling in Bankruptcy Court to “Maddeningly flawed, disorganized settle the matter, especially since the compromise dealer pro- and chaotic” were words that rang true posal calls for the automakers to disclose the exact criteria with me. they used to terminate more than 2,000 dealerships. I have done this for more than 30 If the automakers agree on the proposal, any dealers wrongly years, and I do not remember ever being designated for termination according to those criteria would involved in a disaster like this one. be reinstated automatically. Dealers not restored could appeal If we do get all the money owed us by to an arbitration panel that would rely on state franchise laws the federal government, I will consider and the dealer’s financial viability, which would negate some that the program was a success for August — sort of like a program of the of what GM and Chrysler achieved by restructuring. month, but this one was sponsored by As it stands, without sufficient political clout to bring the au- the feds rather than the manufacturers. tomakers and the White House to the table, the matter is There is no ongoing stimulus. closed. I thought that when this program was If GM and Chrysler balk, the legislation could be brought up introduced, it was made clear to dealers again. But odds are slim that Congress will pass (and President that accepted claims would be paid by Barack Obama will sign) a bill that repudiates what the admin- the government in 10 days. istration’s own automotive task force caused to happen. In the end, the government was A prolonged political struggle would be counterproductive. absolutely pathetic in its handling of the It’s time for a reasonable, nonlegislative resolution. program. I hope we never have to do it again. And if the government decides to go again, surely it will be better prepared. If this is what we can expect from a THE WEEKLY NEWSPAPER OF THE INDUSTRY All used-vehicle than 50 auctions every week. relatively simple rebate program for Established in 1925, published every Monday by Crain Communications Inc. Every day, we receive tens of automobiles, what are we in for if the Keith E. Crain, guides are not equal Publisher and Editor-in-Chief thousands of vehicle records from health care overhaul becomes law? Peter Brown, Associate Publisher and Editorial Director Jason Stein, Editor To the Editor: auctions, automakers and remarketing Getting a flu shot will seem like cancer Edward Lapham, Executive Editor “Dealers: Prices in used-vehicle guides companies that are processed by our surgery. Heaven help all of us. HOW TO REACH US often outdated” (Aug. 31) lumped all expert editors using sophisticated Web site: autonews.com guidebooks together and said, analysis tools to report changes in the HOWARD SCHNITZ Editorial staff “Used-vehicle prices have soared current market immediately. General Manager [email protected] recently, and the guidebooks have failed Our values are timely, independent Ridenour Auto Group Phone: 313-446-0361 Fax: 313-446-0383 to keep up.” The article went on to detail and accurate and are not based on New Lexington, Ohio Circulation Advertising [email protected] [email protected] specific problems that dealers are having forecasts of where the market will be or Phone: 888-446-1422 Phone: 313-446-6050 with a particular guidebook. simple statistical analysis of where the Fax: 313-446-6777 Fax: 313-446-8030 While I can’t speak to the allegations market has been. Administration Editorial data/research leveled at a competitor, I can speak to Some of the world’s largest and most To locate information that has been published got a bad rap in Automotive News, call 313-446-1662. what we do at Black Book. sophisticated companies depend on our As the article correctly stated, Black values, which are accurate reflections of To the Editor: Customer service To start or renew a subscription or to report an address change Book updates its values on a daily basis where the market is on any given day. There has been a lot of news about the or a problem, e-mail [email protected] in its electronic products. Simply stated, all used-vehicle guides cash-for-clunkers money not getting or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). We have a dedicated team of editors are not created equal. paid and many other complaints, AUTOMOTIVE NEWS (ISSN 0005-1551) is published weekly at 1155 Gratiot Ave., with more than 300 years of combined but I think it’s a bad rap on the Detroit, MI 48207-2997. Periodicals postage is paid at Detroit, MI and at additional mailing offices. Postmaster: Send address changes to AUTOMOTIVE NEWS, automotive experience who are TOM CROSS administration. Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. obsessed with accuracy. We also have a President While the paperwork was somewhat Canadian Post International Publications Mail Product (Canadian Distribution) team of field personnel who attend and Black Book Sales Agreement #40012850, GST#136760444. Canadian return address: 2-7496 Bath Road, Mississauga, ON L4T 1L2 Printed in the U.S.A. collect firsthand information at more Gainesville, Ga. see LETTERS, Page 14 ANpageAD.qxd 9/4/2009 11:27 AM Page 1 20090914-NEWS--0014-NAT-CCI-AN_-- 9/9/2009 2:42 PM Page 1

14 • SEPTEMBER 14, 2009

EDITORIAL STAFF 313-446-0361 Compare and contrast: GM, Nissan revivals E-mail [email protected] Web site autonews.com Keith E. Crain There are similarities, Publisher and Editor-in-Chief but the differences cast Peter Brown doubt on GM’s future comment Associate Publisher and Editorial Director James B. Treece Jason Stein, Editor [email protected] How does General Motors’ revival compare with Nissan’s? DETROIT I was Automotive News’ reporter in 313-446-0361 Fax: 313-446-0383 Tokyo when Carlos Ghosn turned James B. Treece 1155 Gratiot Ave. Detroit, MI 48207-2997 around Nissan Motor Co. Now I’m in is industry editor Detroit, watching GM emerge from of Automotive Edward Lapham Executive Editor Chapter 11. How do the two cases News. [email protected] compare? There are similarities but also Contrast that with Henderson’s Richard Johnson Managing Editor enough differences to leave me still goals for GM: “To design, build and [email protected] skeptical about GM’s future. sell the best vehicles in the world.” Mary Beth Vander Schaaf Henderson also said, “We expect to Deputy Managing Editor Similarities take the company public again as 1. Both GM and Nissan were in terri- GM’s Fritz Henderson: His Nissan’s Carlos Ghosn: He set soon as practical, starting next year.” Charles Child News Editor ble shape. Each had lost market share restructuring plan had to pass muster specific goals for the automaker GM is required to pay off the govern- in its home market for more than 20 with the real agent of change, auto and brought in some outsiders ment loans by 2015, but he said it ex- James B. Treece years. task force chief Steve Rattner. to lead the change. pects to repay them much sooner. Industry Editor Before Ghosn took charge, Nissan SENIOR WRITERS: had lost money for eight of the previ- He was a loyal lieutenant to the failed decade of red ink and two decades of 3. Ghosn immediately brought in Dave Guilford, Jesse Snyder ous nine years. GM lost money for Rick Wagoner. Rattner and the auto- lost market share had sunk in. They some outsiders to lead the company’s Karen Faust O’Rourke four straight years — and then de- motive task force had to tear up GM’s knew things had to change. While change. Insight Editor clared bankruptcy. original restructuring plan before they may have been shocked by the This went beyond the barely two COPY EDITORS: Bob Allen, Sometimes an alcoholic has to hit Henderson went back and crafted changes Ghosn forced through, they dozen executives from Renault, al- Patricia C. Foley, Gregory Skwira bottom before a recovery is possible. one that was sufficiently draconian to also knew that not changing was not though their financial savvy filled a Susan Zavela Bamford/ GM and Nissan had hit bottom. meet Rattner’s standards — that is to an option. gaping hole in Nissan management. Graphics Editor say, that would do the job. At GM, some managers still believe In October 1999, when Ghosn an- Rick Kranz/Product Editor 2. Each benefited from the hard and You can question whether GM that if it weren’t for the current credit nounced plant closings and person- REPORTERS: Leslie J. Allen, sometimes harsh judgment of an out- needed to throw overboard as many crunch, they might not have been nel cuts, he also introduced a new David Barkholz, Jamie LaReau, sider. dealers as it did. But without the out- forced into Chapter 11. In other head of design. Shiro Nakamura was Arlena Sawyers, Robert Sherefkin, Ghosn was once asked whether the sider’s backbone that Rattner provid- words, the external economy, not recruited from Motors Ltd. to Chrissie Thompson, Richard Truett, Bradford Wernle, Amy Wilson turnaround at Nissan had to be led by ed, GM might still be talking about their own performance, made them a inject some zest into Nissan’s lineup a foreigner, unfettered by Japanese maintaining — that is, subsidizing — failure. and to spread the word that the com- Mary Raetz Director, Automotive News Data Center traditions. No, he said, a Japanese Pontiac as a niche brand. Not true. GM was losing money pany had to stop looking inward. could have done it, but the change when U.S. light-vehicle sales were a Except for its board, GM hasn’t Debi Domby, Camille Pippen had to be led by someone from out- 3. They had the money to cover large spectacular 16 million units a year. added any new blood, much less new Research Assistants side the company. Japanese traditions restructuring costs. GM may have hit bottom, but GM viewpoints. Dan Jones were less of a problem than Nissan’s Funding is usually a major stum- executives are not yet ready to admit Some pundits argue that govern- Office Manager own corporate culture. Someone from bling block to a successful restructur- it. mental controls mean GM can’t pay Robertta Reiff inside the organization who had been ing at persistent money losers. Repeat after me: “Hi. My name’s the salaries it needs to recruit top tal- Editorial Assistant raised in the company’s ways and who But Nissan had lots of assets it General, and I’m a failure.” ent. What, they haven’t heard of Corinne M. Price felt even the slightest reluctance to could sell, once the outsider (Ghosn) stock incentives? If GM and the gov- Information Center change the way things were done severed the emotional attachment to 2. Ghosn set specific goals for Nis- ernment really aim for an initial pub- LOS ANGELES couldn’t demand the level of change holding minority stakes in affiliated san’s turnaround. lic offering of new GM stock in 2010, Mark Rechtin/West Coast Editor necessary. companies. He drew a line in the sand, saying surely contracts today can be written 310-739-8009 Nissan had Ghosn. And fortunately GM had Uncle Sam’s wallet. that in a year and a half Nissan would guaranteeing top executives a stake Kathy Jackson/Bureau Chief for GM, it had Steve Rattner. return to the black and within three in the offering. 323-370-2481 Fax: 323-655-8157 Oh, come on. You weren’t really Differences years would cut its debt in half and 6500 Wilshire Blvd. Los Angeles, CA 90048-4947 thinking that Fritz Henderson was 1. Everyone at Nissan knew it wasn’t post an operating-profit margin of at You may e-mail James B. Treece the agent of change at GM, were you? working. The reality of almost a least 4.5 percent. at [email protected] NEW YORK Diana T. Kurylko/Reporter Phone/fax: 908-273-6059, [email protected]

WASHINGTON be properly attributed to dealers who measuring”: The experts are trying for two automotive engineers to Donna Harris/Reporter 540-668-7295 Fax: 540-668-7296 didn’t read the instructions, didn’t too hard to relate mpg to alternative define the details for a new mpd [email protected] understand them or lacked the fuels. Electric cars don’t run on approach. Neil Roland/Reporter ability to process claims, as directed gallons. 202-662-7210 continued from Page 12 by the guidelines, in their initial It is time for a simple, new KERRY O’TOOL 814 National Press Building submissions. approach. Petoskey, Mich. Washington, D.C. 20045-1801 complicated, I feel that should have I congratulate our government Each year have Uncle Sam provide The writer recently retired. He was MID-SOUTH been expected because of the size representatives from both parties for an average cost per unit for each type director of continuous Lindsay Chappell/Bureau Chief and scope of the program and the the job they did putting together a of fuel available (maybe using the improvement at supplier GST 615-371-6654 Fax: 615-371-6655 exposure to fraud. tremendous economic program in a average cost over the most recent AutoLeather. 104 East Park Drive, Suite 315, Brentwood, TN 37027 The people on our management short time. Not only has it benefited five years to reduce the impact of team are computer-literate and were the auto industry and car-buying spikes). That would then become the TOKYO able to create the required PDF files consumers; its long-term impact on new (annually revised) moving Hans Greimel/Asia Editor +81-3-3828-9060 Fax: +81-3-3828-9061 and compile the required the environment and the increase in industry standard for expressing fuel [email protected] documentation to submit claims fuel economy are positive changes economy. autonews.com Yurakucho Denki Bldg., 20th Floor properly. for all of us. The industry could then express 1-7-1 Yurakucho, Did you know that you They put together a small task force all vehicle mileage in miles per Chiyoda-ku, Tokyo 100-0006, Japan can write a letter to the editor that studied the program and JON MONTE BELL dollar or mpd. on our Web site? Here’s how. TURIN developed a process that produced Vice President For example: You could report how Luca Ciferri/Reporter/[email protected] +39-011-969-1970 Fax: +39-011 961 0113 first-time compliant submissions Chezik-Bell Honda-Ford-Lincoln- far a vehicle could go along a Go to autonews.com. based on the administrative Mercury standardized route with $10 worth of Via Perlino, 11 At the top of our home page, guidelines. Iowa City, Iowa any type (or combination) of fuel 10029 Villastellone (TO) Italy put your cursor on the tab By Aug. 19, we had processed used by that vehicle. autonews.com that says “Opinion & almost a million dollars in claims The approach would enable DETROIT Feedback.” and been paid on a regular basis. If mpg doesn’t comparisons among vehicles fueled Dave Versical/Editor Click on the section below that Automotive News Online We had experienced no rejections work, try mpd by gasoline, electricity, hydrogen, [email protected] 313-446-6789 and had not encountered any natural gas and liquefied coal even says “Send us a Letter.” That will bring up a letter form. Philip Nussel horror stories like those related in To the Editor: when used in a hybrid propulsion Managing Editor, Automotive News Online the press. Regarding Keith Crain’s Aug. 17 mode. Follow the directions. Victor Galvan/Web Editor [email protected] 313-446-0345 I think some of the problems could column, “We need a new way of It shouldn’t take more than a week Scott Kennedy/Multimedia Editor ANpageAD.qxd 8/27/2009 12:01 PM Page 1

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14B • SEPTEMBER 14, 2009 DESIGN The new design frontier: Making small cars look stunning For years, style was absent without an excuse from American subcompacts. But the days of slab-sided, no-frills hatchbacks may soon be history.

Richard Truett and Bradford Wernle cars such as the Citroen C3 and Fiat smallest and least expensive vehicles [email protected] 500. in the Chevrolet lineup. As consumers move out of larger “I don’t like boring cars, and I don’t or decades, something was missing in the small cars vehicles, Callum said, they won’t lose think our customers do, either,” said designed, built and sold in the United States. their desire for eye-catching rides. Ed Welburn, GM’s vice president of It was gone for so long that most American “Styling will be one of the most im- global design. “Some people want portant factors,” he said. “As con- more extroverted cars than others. consumers probably didn’t know what it was. sumers downsize their vehicles, they But even the cleanest, simplest, most FBut to Ralph Gilles, Chrysler Group’s chief designer, the will expect the same level of crafts- conservative design should not be manship, features and attention to boring. Small cars can have another missing ingredient was obvious. U.S. subcompacts lacked design detail they find in larger, more image.” emotional appeal. expensive cars.” Yet if any company is guilty of com- Among the Detroit 3, Ford is up first mitting grave crimes against small-car “Small cars of the past were not necessarily done with with a stylish small car — the Europe- styling over the years, it’s GM. Cases in passion,” he said. designed Fiesta hatchback, which ar- point: The Chevrolet Chevette, Vega rives here next spring. and Cavalier, as well as all their sib- Generations of Detroit designers in the United States will increase. With its swept-back windshield; lings that wore other brand badges. All seemed to say: No one buys a small And when a market segment gets large grille; long, thin headlights; and instantly forgettable. car for its styling, so why bother? crowded, automakers must rely on high tail, the Fiesta has been a hit in But a few weeks ago, GM invited the Uninspired, appliancelike econobox- styling to set their vehicles apart from Europe. It will be the first stylish press to visit its Warren, Mich., design es? What else did you expect? the crowd. small car from a U.S. automaker to studios for an unprecedented and American subcompacts had none “It’s not business as usual for small challenge the modern Mini, the car confidential look at many future prod- of the attributes found in the cool, cars here anymore,” said Moray Cal- credited with helping change Ameri- ucts. Among the dozen or so vehicles quirky and even elegant small cars lum, Ford Motor’s design director for cans’ attitudes toward subcompacts. were three small : the created elsewhere in the world, from cars. “We’re using design to distinguish Spark, Cruze and redesigned Aveo. the original BMC Mini to the first Peu- The expanding lineup of new small the Fiesta in the marketplace,” said Unlike previous Chevrolet and GM geot 205 to the modern Citroen C3. cars means styling will get a lot more Callum. small cars sold in North America, the U.S. automakers were forced to creative and appealing, just as it did new small Chevys are expressive, churn out small cars to raise corpo- with mid-sized cars recently. (Think GM’s new look take chances and will shock the sens- rate average fuel economy averages, of the modern Chevrolet Malibu, the General Motors Co. is counting on so they could keep selling big trucks. new Ford Taurus and the current styling to be important for even the see DESIGN, Page 14D Small-car design? An oxymoron. Toyota Camry and Honda Accord.) But consumer preference has shift- Callum said North America is be- [email protected] ed — the result of higher gasoline coming more like Europe and prices, new fuel-efficiency standards Asia, where even the most and concern about climate change. basic entry-level cars “Small cars and vehicles powered have style — email: by four-cylinder engines have been on a steady increase since 2004,” said Ford Motor Co. sales analyst George Pipas. U.S. fleets must average 35.5 mpg by 2016, compared with

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o Ford Fiesta In 1981, the last time Small cars with style Ford sold a Fiesta in the United States, it was a Eight nifty shapes at the lower end of the market (continued on Page 14D) standard slab-sided, no-frills, two-box hatchback, little more Our knowledge is your power Specs & options Videos & 360 Colorized Editorial Services Web than an appliance. The Fiesta returns next spring sporting Ford’s successful kinetic design theme, which features bold lines on the hood and down the sides as well as beefy wheel arches. Ford is counting on style as a selling point. So far sales in Europe and Asia have been robust.

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14D • SEPTEMBER 14, 2009 DESIGN

DESIGN Fiat 500 Adding emotion The original, made from 1957 to 1975, was one of the iconic postwar cars, along with the to econoboxes , Mini Cooper and Ford continued from Page 14B Mustang. The new version retains Small some of the styling cues of the original, such as a shallow es of consumers whose image of hood and rounded roof. It has small Chevrolets is locked in the past. been a hot seller in Europe For instance, the quad headlights, but and could challenge the Mini accent lines on the hood and tall rear Cooper when it arrives at end on the 2011 Aveo give the small Chrysler dealerships in 2011. hatchback a funky European look, like something that could have come stylish from Renault. The smaller three-door Spark, also due in 2011, is a stubby Ford Fiesta- fighter with swept-back headlights iQ that run the length of the hood, from It’s a stubby, Smart-sized city car with a funky grille to windshield. front end that features high-mounted The smoothly styled Cruze, sched- headlights and a sloping fascia. uled to arrive next year, will do battle It probably will appeal to with the Mazda3 and Nissan Versa. younger drivers looking for a highly maneuverable Kia Soul Citroen C3 The Mini factor city car. Overhangs Honda may have invented the The French long have proved small Consumers have proved they will are nonexistent. small, boxy, vanlike utility vehicle cars don’t have to look boring. pay a premium for a small car with vi- It’s the smallest with the Element. Toyota may have Remember the Citroen 2CV and the sual appeal. The Mini’s iconic ’60s- Toyota to come moved it into the mainstream with DS? One of the smoothest of today’s influenced styling has been a major stateside. the Scion xB. But Kia’s new Soul small Euro superminis is the recently factor in its sales success, said Jim has made it cool and sporty. The redesigned C3. It’s a classy-looking McDowell, vice president of BMW’s tall windshield and sloping small car with a steeply raked Mini brand. shoulder line give the boxy windshield that stretches into the roof “Prior to the Mini, small meant in- hatchback its sporty looks. area. Some versions have a full-length expensive and not very pleasant,” he canvas roof that can be peeled back. said. “There’s something very allur- Note to Roger Penske: The C3 is just ing about the styling.” Honda CR-Z the kind of car that would look great in the Saturn showroom of the future. Tom Matano, director of industrial From some side and rear angles, this three-door hatch is design at San Francisco’s Academy of vaguely reminiscent of the CR-X of the late 1980s. Art University, said the Mini has But this is no retro vehicle. The CR-Z’s styling is a raised the bar for all automakers sell- departure for Honda. The flowing, sloping front ing small cars in the United States. end, grille opening and headlights are new “It’s not just an econobox like a styling cues for the brand Civic or Corolla,” he said. “It’s got ca- chet.” Matano, a former Mazda design chief, said he expects styling to vary widely if Americans finally accept small cars. “If the market gets bigger, designs will diversify,” he said. Matano said Daimler’s Smart may have a big influence on small cars. “Right now Smart may be creating a commuter look,” he said. Indeed, Toyota’s iQ and several other microcars all seem to owe a debt to Smart. What will separate a new genera- tion of small cars from those that pre- Gilles said a change has occurred in Gilles said he is impressed with the dominated small cars.” Gilles sees America not as one ho- viously failed to win U.S. buyers? In a the design atmosphere at Chrysler Fiat 500 and Alfa Romeo MiTo. Gilles, 39, has a few words for skep- mogeneous market but as a “frac- word, emotion, said Chrysler’s Gilles. under new CEO Sergio Marchionne, “I noticed the Fiat 500 when it first tics who say Americans won’t buy tured market” with lots of pockets of “I look at the original 1980s Escorts who took over in June after the au- came out and said, ‘Wow, look what small cars. interests. and Omnis,” he said. “They were good tomaker emerged from bankruptcy. they’ve done,’ ” he said. “There’s a wonderful generation of “You’ve got 50-year-olds acting cars but not necessarily provocative.” Gilles expects to draw inspiration “The 500 is extremely well-designed, Americans coming along — the mil- like 20-year-olds and vice versa,” he Chrysler’s mission, under the guid- from the success that Fiat has had in very efficient packagewise but very lennials,” he said. “They don’t have said. “It’s becoming very lifestyle- ance of new owner Fiat S.p.A., is “to recent years in creating attractive emotional. the same paradigms that even my centric. As long as you execute the make them not just fuel-efficient but small packages — an expertise built “I have to give my guys over the generation has. I think the time is product extremely well, they will very compelling,” Gilles said. up over many decades. ocean a lot of credit. They’ve really right for a new design paradigm.” come.” c

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14F • SEPTEMBER 14, 2009 DESIGN

Think City Mitsubishi i-Miev The Norwegian-designed Think arrived here eight years If the sloping front end, dramatically raked windshield and ago when Ford Motor Co. owned the brand. Think wheels pushed to the extreme corners look familiar, it’s because disappeared in 2002 but is coming back with a styling you’ve seen them on Daimler’s Smart car, on which the update and more powerful batteries. The new i-Miev is based. The electric motor is mounted under the rear body has headlights influenced by the Mini seat, which helps give the Cooper, a gently sloped roof and beefy wheel four-door subcompact city arches. Think returns to North America next car a roomy interior. The summer, starting with fleet buyers. design could be a template for electric cars. A late-2010 debut is planned.

Electro-magnetism Toyota iQ The freshman class of electric cars begins arriving in U.S. showrooms in Lots of small electric 2010 with a variety of designs. Styling is influenced by the intended use of vehicles will look like the the vehicle (city driving, for example), mechanical layout and country of Mitsubishi i-Miev, and this tiny Toyota is one of them — origin. Don’t expect electric cars to have radically different shapes until a except it’s a two-door. Like new safety standards are created specifically for them. the i-Miev, the iQ has a spacious interior because its powertrain is behind the rear seat. The iQ has a sleek body to reduce drag.

Tesla Model S The upstart California maker of electric sports cars aims to move into the mainstream in 2011 with this $50,000 mid-sized five- passenger sedan powered by 8,000 small lithium ion batteries. The sleek sedan was designed by Franz von Holzhausen, formerly of General Motors and Mazda, and features a glass roof and retracting door handles. The Model S also has a rear opening hatch and fold-down rear seats. Nissan Leaf With its slightly protruding and curvaceous rear end, Nissan’s first electric easily Fisker Karma could wear a Renault badge. The five-passenger hatchback This swoopy luxury coupe with was designed in Japan on a its expressive grille may be dedicated architecture for the best-looking electric car. electric powertrains. Nissan But that’s what you’d expect says the car’s big inset from a company whose headlights channel airflow founder is former Aston away from the side mirrors to Martin design chief Henrik improve aerodynamics and Fisker. The mid-sized Karma reduce wind noise. The Leaf will use a small gasoline also has a nearly smooth engine to generate electricity underbelly. for the drive motor. Sales start next fall.

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14H • SEPTEMBER 14, 2009 DESIGN Interior designers create perception of space Rick Kranz [email protected] Consumers are happy to have smaller, more efficient vehicles, but they don’t want to give up spacious interiors. So as vehicles get smaller, interior designers must fine-tune their skills as illusionists. “We need to find solutions that give you more space,” says Tom Kearns, chief U.S. designer for Kia Motors America. “But a lot of what we do is on the perception side, creating that perception of a larger space.” To meet new federal regulations next decade for corporate average fu- el economy, the industry is making smaller vehicles. The challenge is “liberating the interior space while making the exterior size more effi- cient,” says Freeman Thomas, direc- tor of strategic design at Ford Motor Co. In the next decade, cars will feature short fronts and rear overhangs. Wheelbases will be stretched so larg- er interiors can be created. It’s a ma- jor shift from the bigger-is-better ap- proach that has long driven vehicle development, resulting in big vehi- cles with large interiors. Designers now must give more seri- ous consideration to how buyers use The Lincoln C Concept, shown here with Ford’s Freeman Thomas at the Detroit auto show, is about as wide as a Lincoln MKZ but only as long as a Ford Focus. interior space. “I think people look at that space as man of the transportation depart- with a connection to the Internet. The race for space ‘What can I do with it? How does it ment at the College for Creative Stud- “It used to be once you got in your As cars get smaller, designers function? What advantage does it ies in Detroit. car, you left your house,” Erickson are looking for ways to preserve give me?’ ” says Larry Erickson, chair- Today people may work in their cars says. “Now people are blending those interior roominess. Techniques two together” in their cars. include Here are some ways designers are Ⅲ Thinner seats working to improve interior packag- ing. Ⅲ Thinner door panels Ⅲ New proportions. Vehicles with un- Ⅲ Higher ceilings usual proportions are expected to Ⅲ Lighter colors to promote provide larger interiors. The Lincoln a feeling of openness C Concept, which debuted in January at the Detroit auto show, is about the same width as Lincoln’s MKZ sedan. til recently, the interior designer had But the overall length is similar to that two main drivers: “how you packaged of the Ford Focus small car. The C things physically and how you made Concept has two bench seats that to- things look.” 877.240.2423 gether seat six. Now there is a third element — in- Ford’s Thomas says the C Concept terfacing with the navigation system, is the blueprint for some of the au- Internet and audio system, along tomaker’s future vehicles. with the knobs, buttons and maybe a Southeast’s Most Advanced... Ⅲ Thinner door panels. Research The Ford Flex’s glass roof panels joystick to make everything work. shows that buyers perceive space allow light into the interior while Johnson Control’s re3 concept shift- horizontally more than vertically, Er- giving passengers more headroom. ed some of those controls to the dri- ickson says. That means they are ver’s seat. Applying more interested in the width of the sign is used in the Lincoln C Concept. “The idea is that all of the controls Tomorrow’s interior than the height — specifical- “If you design to what we call the are within reach, and you have access ly, hip room, shoulder room, head comfort curve, a seat does not have to to all your information.” Technology... distance to the side glass and the dis- be thick,” Thomas says. “If the pres- Ⅲ Glass roof panels. Laminated glass tance between the two occupants. sure points are put into the right roof panels allow light into the interi- One solution: thinner door panels. place, you don’t need thickness.” or. The Ford Flex has multiple roof “It really is a war for millimeters,” Er- At this year’s Detroit auto show, panels. ...Today ickson says. Johnson Controls Inc.’s re3 concept “When you get some of that natural Ⅲ Color. “Color is something that re- showed a similar seat design. The light that floods on the surfaces of the ally messes with your perception,” front seats are about 50mm thinner interior, it feels so much brighter and says Kia’s Kearns. A lighter interior than a traditional seat back. Weight is more open,” Kearns says. looks brighter and more airy; a dark reduced 30 percent. Another advantage of the panels: interior tends to be enclosing and feel Ⅲ Flip-up rear seats. A plug-in hy- Passengers sitting directly under the more intrusive. brid such as the 2011 Chevrolet Volt panels have more headroom because As an example, Kearns cites an in- does not need a 15-gallon gasoline there is no headliner, Ford’s Thomas strument panel. “If you break that up, tank. A six-gallon tank is probably says. The glass is flush with the do the top half dark or light and the sufficient. rooftop. bottom half the opposite, it is going “You don’t have this large tank un- Ⅲ Tall ceiling. The Kia Soul has a to tend to visually reduce that mass derneath the rear seat” that may in- small footprint, but it is a tall, boxy car and give you a more horizontal look, trude into the passenger compart- with a large space on the inside, espe- more of a floating appearance,” he ment, says Michael Warsaw, Johnson cially in terms of headroom. says. “It is not going to look as big and Controls’ vice president of design “It seems like it is an open space,” heavy. It can add to the perception of and marketing for North America. Kearns says. “You don’t feel claustro- more space inside.” Instead, the floor can be flat and phobic.” Ⅲ Thinner seats. Instead of seats with lower. Johnson Controls created Just as in a house, he says, a tall ceil- springs and thick foam, the technolo- 60:40 stadium-style rear seats for its ing “is always a better feeling.” c gy used in auto racing seats may be re3 concept. The bottom cushions flip adapted to production vehicles. A rac- up out of the way, leaving a flat floor. Special section on design www.electra-finish.com ing seat is a thin composite shell with Ⅲ Data interface: Erickson of the Col- continues on Page 21. a thin piece of foam. That type of de- lege for Creative Studies says that un- ▼ ANpageAD.qxd 9/9/2009 9:11 AM Page 1

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As anyone in the remarketing Q&A WITH TOM WEBB business will tell you, running an Q. When do you expect economic conditions to improve? effective, efficient business today is A. In some respects, the recovery has already begun. Real gross domestic product (GDP) declined by more important just 1 percent in the second quarter of 2009 as opposed to a steep 6.4 percent decline in the first than ever. quarter. Expectations are strong for a positive swing in both the third and fourth quarters. There

But what does that likely will still be some ups and downs, but the long-term trend is positive. mean for dealers who are fighting so hard to survive? Q. What impact did Cash for Clunkers have on used vehicle sales? Tom Webb, To answer that question, we reached out Manheim Consulting A. Given that the Car Allowance Rebate System program was a new vehicle incentive, we might have Chief Economist to hundreds of dealers over the past expected it to have a negative impact on used vehicle pricing. But with new vehicle inventories several months to better understand their changing needs and to discuss a extremely low, used vehicle wholesale prices continued to rise. And, used vehicle retail volumes variety of best practices, which are actually rose in July and August, as savvy dealers took full advantage of the increase in floor traffic shared by many of the country’s most created by the CARS program. Used vehicle retail margins also improved. effective businesses, including:

UʈÃÌi˜ˆ˜}Ê>˜`ÊÀi뜘`ˆ˜}Ê̜ÊVÕÃ̜“iÀà UÊ-Ì>ވ˜}Ê> i>`ʜvÊVœ“«ï̜Àà HELPING DEALERS FIND NEW WAYS TO SOURCE VEHICLES IN-LANE AND ONLINE UʈÀˆ˜}ÊÌ iÊLiÃÌÊÌ>i˜Ì Historically, franchised dealers sourced wholesale vehicle inventory in closed-sale auction environments. As the industry and UÊ`>«Ìˆ˜}Ê̜ʘiÜÊÜ>ÞÃʜvÊ`œˆ˜}Ê business, especially online inventory channels continue to evolve, Manheim is working with dealers to educate them on the full range of available UÊ` iÀˆ˜}Ê̜ÊVœÀiÊÛ>ÕiÃÊÃÕV Ê>à choices, whether open or closed. Enrollment in Manheim’s The Wholesale Institute, for example, has mushroomed with more fairness, integrity and the value of than 900 dealers attending sessions this year, seeking to gain a competitive advantage in the online world. Dealers interested personal relationships in learning more about this complimentary workshop should go to www.thewholesaleinstitute.com. With these principles top of mind, our team is committed to working with The creation of The New General Motors Dealer Lane program is another example. This new program provides dealers an dealers, not just to listen to their opportunity to buy vehicles in an open environment (in-lane and on Manheim.com) from GM franchised dealers who have concerns, but to act on them. earned reputations as prime sellers. These sales are especially good places to source inventory because, in order to sell in In response to requests for greater access these lanes, dealers must price their vehicles within 10 percent of Manheim Market Report values and must maintain a high to fresh inventory, we’re helping dealers sales conversion rate. For more information on The New General Motors Dealer Lane program and the Guaranteed 7-Day make the most of the Manheim Monday Buy Back, go to www.manheim.com. "˜ˆ˜iÊ Ûi˜ÌÊ->iÃ]ÊÜ iÀiÊiÛiÀÞÊ œ˜`>ÞÊ Manheim features top sellers of quality vehicles in an online-only sale. The New i˜iÀ>Ê œÌœÀÃÊ i>iÀÊ>˜iʈÃÊ>˜œÌ iÀÊ effective new way for dealers to buy and sell high-quality inventory in-lane or online. Both are especially relevant as many franchised dealers look for new ways to increase used car sales.

Our goal is to do our best to provide MIDYEAR USED CAR MARKET REPORT ILLUSTRATES USED CAR TRENDS dealers with an advantage, from ways to Manheim Consulting recently released its first-ever Midyear Used Car Market Report. The Report, available for purchase source more inventory and attract more online at www.manheim.com/consulting, notes several trends of interest to franchised dealers, including: buyers to delivering more effective and efficient wholesaling options that drive UÊ1Ãi`ÊÛi ˆViÊÃ>iÃÊVœ˜Ìˆ˜ÕiÊ̜ʜÕÌ«iÀvœÀ“ʘiÜÊÛi ˆViÊÃ>ið improved business results. UÊ iÜÊV>ÀÊÃ>iÃÊ`Àœ««i`Ê̜Ê>Ê{ӇÞi>ÀʏœÜʈ˜ÊÌ iÊwÀÃÌÊ >vʜvÊÓää™]ÊÜ ˆiÊÀiÌ>ˆÊÕÃi`ÊV>ÀÊÃ>iÃÊÜiÀiÊÕ«ÊÓ°ÎÊ«iÀVi˜Ì° We trust you will find the information relevant and useful, and we welcome UÊiÜiÀÊÌÀ>`i‡ˆ˜ÃÊ­`ÕiÊ̜ÊviÜiÀʘiÜÊV>ÀÊÃ>iîÊÀi`ÕVi`ÊÜ œiÃ>iÊÃÕ««Þ° . your thoughts and feedback at UÊ,i˜Ì>ÊVœ“«>˜ˆiÃÊiÝÌi˜`i`ÊÛi ˆViÊÃiÀۈViʏˆÛiÃÊÕ«Ê̜ÊÓ{ʓœ˜Ì Ã]ʓi>˜ˆ˜}ʈ˜VÀi>Ãi`ʓˆi>}iʜ˜ÊÌ iÃiÊÛi ˆViÃÊ>ÌÊ>ÕV̈œ˜° [email protected]. UÊ iÜʏi>ÃiʜÀˆ}ˆ˜>̈œ˜ÃÊ>ÀiÊiÝ«iVÌi`Ê̜Êv>Ê̜ʣ°Óʓˆˆœ˜Êˆ˜ÊÓää™]ÊvœÀiÌiˆ˜}ÊÀi`ÕVi`ÊÜ œiÃ>iÊÃÕ««Þʈ˜ÊÌ iÊyears ahead. -ˆ˜ViÀiÞ]

Jeff Bunch 6ˆViÊ*ÀiÈ`i˜ÌÊ‡Ê i>iÀÊ-iÀۈVià 20090914-NEWS--0016-NAT-CCI-AN_-- 9/9/2009 5:01 PM Page 1

16 • SEPTEMBER 14, 2009 ADVERTISING STAFF Circulation 313-446-0450 Advertising 313-446-6050 Thinner carpet, fewer brands Classified Advertising 313-446-6065, 800-388-1800 Web site autonews.com Auto shows shrink public relations at American Honda Motor Co. “They want to walk back as cash-crunched and forth and compare the Camry to ADVERTISING AND SALES the Accord.” DETROIT carmakers slash But, Antonius adds, Honda is trim- 1155 Gratiot Ave., Detroit, MI 48207-2997 313-446-6790 Fax: 313-446-8030 marketing budgets ming costs subtly: “We’ve thinned the carpet a little bit. We’ve changed Rick Greer Dave Guilford the type of lighting.” Director of Sales and Marketing [email protected] [email protected] 313-446-6050 Automotive executives will hob- ‘Self-selected’ audience Kathleen C. Lightbody, nob, parry with reporters and display Keith Dahl, national marketing [email protected], 313-446-6037 glittering new products this week at manager at Toyota Motor Sales the Frankfurt auto show. U.S.A., says auto shows have an ad- Russ Procassini, [email protected] 313-446-0350 But industry leaders who trek vantage over many other forms of through Frankfurt’s sprawling exhi- event marketing: The audience is Karen Rentschler, [email protected] 313-446-6058 bition center will see a scaled-down there to see cars. version of Germany’s premier auto “They’re self-selected and, in many Jerry Salame, [email protected] show. Exhibit space will be down cases, paid to come and visit you,” 313-446-0481 Regional Sales Managers from 2.36 million square feet in 2007 Tight funds have forced carmakers to scrap auto show spectacles such as Dahl says. to 1.99 million. this “cattle drive” unveiling the 2009 Dodge Ram at last year’s Detroit show. Ken Czubay, Ford Motor Co. vice Colleen Robar Director of Marketing Communications Most visibly, several major au- president of U.S. marketing, sales [email protected], 313-446-0331 tomakers will skip the show entirely. automakers to re-evaluate shows. and service, says Ford plans to “ele- No-shows Ellen Dennehy (See box.) Nissan is skipping several, including vate our participation … we will take Director of Relationship Marketing Such shrinkage isn’t unique to Who’s skipping the Frankfurt auto Detroit and Frankfurt. it up a notch.” [email protected], 313-446-6039 Frankfurt. The past year has been a show this week In the past, automakers felt they Ford was at 80 shows last year, with Lance Graves, Promotion Art Director rocky one for auto shows as reces- Ⅲ Honda had to show vehicles at all major total attendance of 25 million, [email protected], 313-446-0469 sion-wracked carmakers hacked Ⅲ Nissan shows, even if the timing didn’t make Czubay says. The company passed Brandi Johnson, Marketing Coordinator their marketing budgets. Elaborate Ⅲ sense, Vazin says. along about 125,000 sales leads to [email protected], 313-446-0326 show stands and lavish product “At times we’ve forced things un- North American dealers. Ⅲ Mitsubishi launches quickly went out of style. naturally, probably showing a car too Auto shows offer an opportunity to Classified Advertising Sales Ⅲ Jim McCarter But despite the downsizing, au- soon or too late,” he says. “The eco- do more than sell cars, Czubay adds. Marketplace Advertising Director tomakers say they remain committed Ⅲ Cadillac nomic crisis made us step back and Ford uses hands-on displays to drive [email protected], 313-446-6065 to auto shows as a marketing venue. Ⅲ Suppliers, including Behr, say, ‘What is the right thing for our home three key marketing points: Melissa McKay Classified Sales Manager Most consumers want to see cars Karmann, Preh and brand?’ ” fuel economy, quality and environ- [email protected], 313-446-1642 firsthand before buying, marketers Seissenschmidt-Group Other automakers, such as Ford, mental responsibility. say, even with the rise of online vehi- Honda, General Motors and Toyota, The hands-on experience is crucial LOS ANGELES Taren Zorn cle launches and car shopping. Detroit show, where several brands say they plan few changes to their for a luxury brand, says Tom [email protected], 343-370-2464 As Mazda public affairs executive stayed home, and continue through show schedules. They say the media Kowaleski, BMW of North America’s Regional Sales Manager Jay Amestoy puts it, “There’s still the Tokyo show next month. Most attention pays off and consumers vice president of corporate commu- 6500 Wilshire Blvd. Los Angeles, CA 90048-4947 nothing like seeing a vehicle in the non-Japanese brands will skip Tokyo; shop for vehicles at the shows. nications. Sitting inside a BMW can sheet metal.” earlier this year organizers consid- “We have our own research and au- turn a shopper into a buyer. NEW YORK Scott Ghedine ered scrubbing the show. to show research that people [attend- “There’s the rational side of the ve- [email protected], 212-210-0126 Year of cutbacks Scott Vazin, director of product ing shows] are pretty far down the hicle — it’s reliable,” Kowaleski says. Henry Woodhouse Even so, the cutbacks have been communications for Nissan North funnel toward a purchase,” says Kurt “There’s also the emotional side: ‘I [email protected], 212-210-0125 Regional Sales Managers continuous. They started with the America, says slumping sales forced Antonius, assistant vice president for just want to see myself behind the 711 Third Ave., New York, NY 10017-4036 wheel. I like the way it makes me Fax: 212-210-0489 feel.’ ” CONFERENCES Libby Irwin, Conference Director Pressure on shows [email protected], 313-446-0420 Despite the hordes of consumers AUTONEWS.COM shows attract, organizers are strain- John Fitzgerald, Director of Business ing to keep pace with industry Planning and Online Commerce [email protected], 313-446-1679 changes. Andy Fuzesi, general manager of DEVELOPMENT J Ferron, Director of Strategic Development the Los Angeles Auto Show, says ex- [email protected], 313-446-0434 hibit space will be down about 10 CIRCULATION percent at this year’s show. But in a [email protected] year when U.S. sales are down 27.9 888-446-1422 (U.S. & Canada) percent through August, that leaves 313-446-1662 (all other locations) Fax: 313-446-6777 show organizers “feeling great,” To subscribe via the Web Fuzesi says. autonews.com/subscribe.htm The recession has spawned some Kathy Henry, Corporate Circulation/ innovations. At this year’s Chicago Audience Development Director Lauren Cialella, Circulation Manager show in February, organizers set up a Jennifer Natone, Assistant Circulation Manager common stage that several automak- Subscriptions ers used to show products, paying U.S. 1 year, $159; 2 years, $279. only for setup costs. Canada $239 (U.S.); other countries, $395. Spokesman Paul Brian says using Single copy sales, $5 per issue plus shipping. the stage was considerably cheaper Reprints than building one on an automaker’s Lori Noffz, The YGS Group, 800-494-9051, Ext. 104 Join TLC and we can be brethren in savings. stand: “There were manufacturers [email protected] who said they would not be able to Microfilm You’d like that wouldn’t you. have a media preview without it.” ProQuest Information and Learning Co. Rod Alberts, executive director of 800-521-0600 the Detroit show, says that brand de- Introducing the United Road Transportation Logistics Club. From the guys the other logistics PRODUCTION fections are only part of the picture. Terry Driscoll, Production Manager companies call to make it happen, comes a program that allows you to team up with other Detroit has attracted new, albeit [email protected], 313-446-6062 Larry Williams, Production Supervisor dealerships in your area when relocating vehicles from auction, to provide you with faster, reliable, smaller, brands such as Chinese au- cost effective shipping. Now you don’t have to bear the load on your own. You can share the load tomakers BYD and Brilliance. The changes make it tricky to do EUROPEAN OFFICE with other TLC members. There’s no fee to join and you could see savings of up to 40%. something as basic as lay out exhibit autonewseurope.com Call 866-470-0036, ext. 274 to enroll and start saving today. Jason Stein, Publisher space, Alberts adds. [email protected]/+49-8153-907522 “We’re all evolving,” he says. “We can’t keep doing the same thing we AUTOMOBILWOCHE did five, 10 years ago or even last automobilwoche.de c Helmut Kluger, Publisher DRIVEN TO DELIVER year. Nothing’s turnkey.” [email protected]/+49-8153-907402 TRANSPORTATION LOGISTICS CLUB Thomas Heringer Pia Krix of Automobilwoche Sales and Marketing Director contributed to this report [email protected]/+49-8153-907404 20090914-NEWS--0017-NAT-CCI-AN_-- 9/9/2009 11:40 AM Page 1

SEPTEMBER 14, 2009 • 17

Citizenship Ⅲ Sunny King Automotive Group (Ford-Hyundai-Toyota-Scion) in Anniston, Ala., sponsored the Sunny King Charity Classic in July. The golf tournament raised $125,000 to help more than 30 local charities. ■ Silver dealer Patty King is the group’s CEO. ■ Silver dealer Brett McFarland, left, of McFarland Doug Marine, left, of Doug Marine Chevrolet-Pontiac-Buick-Cadillac We invite items and top-quality Motors in Washington Court House, in Maysville, Ky., receives a 25-year ■ photos for the dealers section. For Ohio, receives a 25-year award award for Pontiac from Jade 50 with Ford guidelines, e-mail [email protected] for Chrysler and Dodge from Jack Vonasek, General Motors Co.’s or call 313-446-0378. Gardner Britt III, left, and Gardner Britt II of Ted Britt Ford in Fairfax, Va., Or send items to: Dealers Section, Gannon, dealer network development Cincinnati zone manager. McFarland receive a 50-year award for Ford from Lisa O’Connor, Washington regional Automotive News, 1155 Gratiot Ave., manager at Chrysler Group’s Great also received 25-year awards manager of Ford-Lincoln-Mercury sales operations. Detroit, MI 48207-2997 Lakes Business Center. for Chevrolet, Buick and Cadillac.

Aluminum parts makers can’t get credit Robert Sherefkin [email protected] Shortages of aluminum parts could slow down the auto industry’s come- back after a summer shutdown lengthened by bankruptcies. Aluminum inventories are low, but that’s not the problem. Demand also has been low because of industrywide weak sales, says CreditSights Inc., an industry research firm in New York. The issue is credit. Aluminum mid- dlemen, who buy ingots from smelters and sell them to industrial users, are not extending credit even to healthy parts makers, say auto and aluminum industry executives. “The middlemen want cash in ad- vance,” says the CFO of a large alu- minum parts maker. “This is becoming a common in- dustry problem,” says Gerry Fed- chun, president of the Automotive Parts Manufacturers’ Association, which represents 400 Canadian sup- pliers. “We really need to get credit for suppliers to buy the raw materials they need.” Industry executives worry that some disruptions could occur in the build schedules of automakers be- cause of credit and availability issues. Industry experts say a small group of companies that control aluminum supplies are not extending credit be- cause they have been burned by au- tomotive parts makers’ bankruptcies and worry about further failures. Several large makers of aluminum components have gone through bank- ruptcy twice, including J.L. French Au- tomotive Castings Inc., of Sheboygan, Wis., which said this month its bank- ruptcy judge approved its restructur- ing plan. That’s a key step in French’s emergence from Chapter 11. Innovative F&I solutions, flexible products & services, customer centric philosophy, PLUS Citation Corp., of suburban De- the most aggressive pricing & programs in our company’s 27 year history, positions troit, emerged from its second trip through Chapter 11 in early 2007. Warrantech for the future…YOUR FUTURE! Get an edge on your competition and join This March, Citation sold its alu- the Warrantech Team today! minum business. In addition, the ranks of aluminum AGENTS: Limited territories now available call 1-800-723-1154! die casters, a small but critical part of the automotive industry, are rapidly thinning, says Steve Cochran, vice president of Die Cast Machinery LLC in Waukegan, Ill. His company has liquidated 15 aluminum die casting factories in the past 24 months. He says the high cost of energy, un- relenting cost pressure and now de- pressed production volume have “put AUTOMOTIVE CONSUMER PRODUCTS SERVICES HOME DIRECT INTERNATIONAL WWW.WARRANTECH.COM a lot of people on the thin edge.” c