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Posts Tagged ‘Chrysler’

Steve Parker: Our Top Ten auto industry stories, 2009

December 24th, 2009 admin No comments

1- GM – The bankruptcy (which is ended) and the ongoing revolving door for top executives at GM haven’t give the public a lot of confidence in the company. It’ll take two to three years of stability for GM to have a chance of staging a big comeback. The corporation closed Saturn after a failed sale involving Roger Penske, sold Hummer to a Chinese company, cancelled the sale of Opel to the German government and unions, is closing Saab and shuttered Pontiac and now consists of Chevrolet, Buick, Cadillac and GMC. The irony? GM is making the best cars and trucks they’ve ever produced.

2- The entire family of Ford Fusion cars won the 2010 Motor Trend Car of the Year award. I think that’s the only award people pay attention to because it’s the oldest and the advertising for cars and trucks which win it runs all year mentioning the award. Ford didn’t need a federal bailout and is headed in the right direction, showing a profit the past two quarters. One of the most anticipated cars coming from Ford is their new 2011 Fiesta, based on the Euro version of the car, one of the most popular over there. Ford also responded quickly to the V6 300-horsepower Camaro, coming out with their own Mustang V6 matching the Camaro in horses. Rumor is a new V8 will be introduced at the upcoming Detroit Auto Show to challenge Camaro’s 400-hp unit. Ford has also just sold Volvo to China’s Geely.
2009-12-24-FordFocusCCC.jpg Ford Focus in rally racing trim

3- Chrysler has only one new model for 2010, but the new 2010 Ram truck won Motor Trend’s Truck of the Year prize. Chrysler cold use a boost and Motor Trend gave them a big one. The company, now controlled by Fiat, will concentrate on building mid- and large-size cars to be marketed by Fiat worldwide. Fiat will build small cars for Chrysler to market. Just announced, Chrysler will display an electric Fiat 500 at the Detroit Auto Show. The 500, or Cinquecento, is essentially the Italian version of the Mini. Jeeps will now be built on the all-wheel drive Fiat Panda platform, so you hard-core off-roaders should get your hands on a Rubicon edition and fast — it’s the last “real” Jeep.

4- Toyota has gone through a year from PR hell. As GM found out, being the world’s biggest carmaker can lead to slips in quality. Toyota’s now the world’s biggest, and they might be having that same problem. They announced the biggest recall in US history (almost 4 millions cars and trucks for acceleration problems), another for rust problems with their Tundra pickup and more. What the company said was a problem with the driver’s side floor mat catching the gas pedal and holding it open, the company looked bad when the government said the problem stemmed from the throttle-by-wire system. The company’s sales continue strong, and their announcement of a plug-in Prius hybrid coming next year caught everyone’s attention.

5- Nissan is spending the next few months displaying a close-to-production version of their Leaf electric car throughout the US. Leaf is on-track to become the first mass-produced EV which does everything a “regular” five-door hatchback can do. Company chief Carlos Ghosn made a decision years ago to skip developing their own hybrid and jump right into EV R&D and production. Late next year, sales will begin, with the car initially being made in Japan, the UK and Tennessee.
2009-12-24-130.JPG Nissan’s Leaf EV at its first coming-out party in the US, in Santa Monica, CA

6- GM’s Volt will go on-sale late next year. Volt is an “extended range hybrid”; a small gasoline engine keeps the batteries charged in this five-door hatch. There is no connection between the battery system and the Volt’s (front) drive wheels; that’s all done EV-style with an electric motor. GM says Volt allay “range anxiety” (my favorite new auto term of the year), which people worry about in EVs but GM says Volt will get over 340 miles per thankful of gas. I’ve driven Volt and it could be a huge winner for GM and help get the company back on track as an innovator. We hope that happens.

7- Korean car-makers are thriving in a down market. Hyundai was the only car-seller in the US to see a rise in their sales this year. What’s the secret over at Hyundai/Kia? It took a few years, but those cars and trucks have risen in quality to that of Japanese vehicles. Also, and perhaps most important, prices are kept low versus comparable cars made in other countries. One more thing: their new cars and trucks are damn good-looking. “Hyundai” is no longer the butt of jokes across America.

8- Chinese EVs are going on-sale in the US, probably next year. BYD is one of the best-known EV makers and has grown into a gigantic auto and electronics conglomerate in less then ten years. The company sells their cars for much less than competitors. BYD’s secret to keeping their costs lower than other EVs? The company is making the batteries and other components by hand, not on assembly lines with robots as most other makers do. The employees are happy to have jobs and the Chinese minimum wage is just that – minimum.
2009-12-24-_mg_0652.jpg Chevy’s Volt, Nissan’s Leaf and Toyota’s Prius plug-in hybrid all go on sale in 2010

9- Smart car sales have dropped 38% in the US this year. The tiny, quirky cars are distributed in the US by Roger Penske. Sold in the “smile belt” from Southern California to Florida, the drop in sales indicates most people feel gas prices have stabilized. Pickup truck sales are traditionally used to gauge the economy; dropping sales of small, very high-mileage cars shows gasoline is steady for the time being. I still wouldn’t want to be on the I-10 with a big rig trying to pass me in one of these.

10- There’s not much doubt that North American-built cars and trucks are at least as high-quality as imports. It’s taken 35 years, but Ford and GM have plenty of vehicles high on the quality surveys. At Consumer Reports, some 90% of Dodge Challenger owners surveyed said they’d buy another – possibly the highest number in CR’s history.
2009-12-24-2010cadillacsrx.jpg Cadillac’s all-new 2010 SRX

What did we leave out? What should not be on the list? And happy, safe holidays.

Jodie Allen: Not on the Job

July 19th, 2009 admin No comments

The consensus of economic wisdom now informs us that we are facing a jobless recovery. That might not be so bad if it hadn’t been preceded by a long period of poorly paid prosperity.

Minutes of the Fed’s June policy meeting released last week show that officials now expect the jobless rate to rise above 10% in coming months even as the economy recovers faster than they had previously projected. And while traditional economics deems unemployment a “lagging indicator,” this time the Fed thinks the lag will be really long with joblessness in the neighborhood of 9% for at least the next couple of years.

President Obama’s chief economic adviser, Lawrence Summers, acknowledges that job losses have been significantly higher than were forecast only a few months ago. In a “progress report” delivered at the Peterson Institute last Friday, Summers also noted that this downturn has been unusual in another way: In a typical recession, productivity–output per worker–tumbles as employers are reluctant to lay off workers and anxious to reclaim them at the first signs of recovery.

This time around the reverse has been the case, with productivity actually rising as companies rush to cut costs. A prime case in point was IBM’s announcement of a 12%-boost in second-quarter profits even as its sales continued to decline. One factor behind IBM’s surging profits, as the Washington Post noted, is that “IBM has been relentless in cutting costs by automating tasks and shifting labor to cheaper locales, while protecting prices.”

IBM is not the only major firm reporting a resurgence of profitability despite continued economic weakness. The big recoupments reported by the bailed out Wall Street giants — Goldman, J.P. Morgan, Citicorp, BoA — have been popping the most eyes. But firms that actually make things — like Biogen and Baxter and even Electrolux — have been reporting unexpected gains as a result of price increases or cost-cutting or both.

That’s all very well, says former IBM senior vice president Ralph Gomory, but what about jobs? The problem, Gormory argued in a trenchant presentation at the New America Foundation last week (as well as in an earlier series of HuffPostings is that, starting in the 1980s, America no longer asked anything of its corporations except that they make money for themselves.

True, over most of these decades, measured unemployment has stayed relatively low, even as millions of manufacturing jobs moved overseas, the U.S. trade deficit ballooned and the amount owed to foreign creditors mounted into the trillions. A burgeoning service economy and, more recently, a soaring housing market — both sustained in substantial part by an explosion of borrowing — plus longer working hours and added workers per family kept most Americans able to hit the shopping malls.

Still, as has been amply documented, while measured productivity rose healthily over much the period, little if any of that trickled into the pockets of the average American. Indeed, except for a brief period in the 1990s, inflation-adjusted wages have been stagnant for the last three decades. Nor, contrary to popular mythology, have “knowledge workers” been big beneficiaries of the country’s economic growth: economists Ian Dew-Becker and Robert J. Gordon calculate that while the incomes of CEOs doubled and tripled, workers in jobs involving math or computers enjoyed only miniscule real gains and the average engineer took a pay cut!

Worse yet, as Princeton economist and former Fed vice chairman Alan Blinder has warned, service jobs too have been moving to China, India and elsewhere overseas and, thanks to continuing advances in telecomm technology, the pace is likely to accelerate. Yet it does seem that while attention — and tax dollars — have been showered upon Wall Street and, to a lesser degree, the dying U.S. auto industry, not much attention has been paid to the specific question of how this country intends to keep its workforce gainfully employed.

True, the president talks about “green jobs” and improving education, but Gomory points out, while new sources of energy are surely needed, there are only so many jobs likely to be created in the design and production of windmills and solar panels. And, he adds, while education is a valuable personal good, when America ruled the productive world, it wasn’t because our workers had advanced degrees. It was because they had the right training, organization and equipment to work with. After all, on-the-job training, not an advanced degree, is the requirement for most of the new jobs that the Bureau of Labor Statistics forecasts will be created in coming decades.

As for the notion that America can rely on its brain power and ingenuity to stay rich and strong, Gomory and others who have actually been involved in the production process scoff at the notion that R&D can flourish independently of production. One of Chrysler’s Lee Iacocca favorite mantras held that innovation is the product of the assembly line. If you don’t see something being made, Iacocca (for whom I had the pleasure of working briefly during his mid-1980s heyday) would say, you’re not likely to be inspired by ways to make it better.

Gomory, or even Iacocca, were not the only, or even the first, to attack the conventional economic wisdom that has prevented the U.S. from making needed accommodations to a changed world. Others, such as Clyde Prestowitz and Arnold Packer have long issued similar warnings to a largely unreceptive audience of policymakers and academics. But in recent months, other experienced voices have lent support. Testifying before a Senate Subcommittee last week, Leo Hindery, former CEO of AT&T Broadband argued that America needs to develop a “its own manufacturing and industrial policy” that will go so far as even to(gasp) “pick winners”.

Of course, in recent history, the mere words “industrial policy” have been enough to give mainstream economists and policymakers the vapors. Perhaps they still are. Still, that old adage about how “idle hands are the devil’s workshop” is worth keeping in mind. Chronic unemployment can get mighty pricey. Even higher than the cumulative bill of decades of poorly paying prosperity.


Steve Parker: Tell Bob Lutz what GM must do now

July 16th, 2009 admin No comments

With the Core Four divisions of Cadillac, Chevrolet, Buick and GMC, and with Bob Lutz back on-board, General Motors is now very much on its own.

They don’t have the kind of partnership and help which Chrysler will be getting from Fiat and Washington is on-hand only to protect the public’s huge investment in the company.

The new smaller, leaner GM corporation, with much less debt than before, now 60%-owned by the American people and newly-emerged from bankruptcy while cutting-back on white collar employees by the scores, begs the question: What now?
2009-07-16-boblutzreporters.jpg Bob Lutz as he most likes to be … the center of attention

Industry newspaper Automotive News ran a multiple-choice poll in Wednesday’s edition, asking readers: How can Bob Lutz best help GM improve its marketing?

The answers supplied included these four:

- He should mimic Lee Iacocca and pitch GM cars in ads (16% answered yes to this choice as of 6pm Eastern time Wednesday);

- He should make sure that GM’s marketing of its vehicles is consistent with their design (40%);

- He should be the public face of GM at auto shows (5%);

- He should carry out his new role in the background and yield the spotlight to younger executives (39%).

Lutz is no stranger to automotive marketing. In his many years in the industry, during executive stints at Ford, BMW, Chrysler and GM, he’s often had a hand in marketing, promotion, advertising and sales.

He was there and had a voice when Ford’s Explorer SUV and Merkur imports were first suggested, when the successful Chrysler “cab-forward” LH cars, Dodge Viper and Plymouth Prowler were put in-production and at GM he brought the “new” Pontiac GTO and Pontiac G8 from Australia to the US market, for better or worse, along with the Buick Lacrosse crossover and the sporty Saturn Sky and Pontiac Solstice coupes and Chevy Malibu sedan.
2009-07-16-1993PlymouthProwlerConcepttakeout.jpg 1993 Plymouth Prowler concept

While at BMW, where he worked on the original 3-Series, he dealt with the ad agency which developed the fabulous slogan, “The ultimate driving machine,” a winner which Bimmer uses worldwide to this day.

After last week’s Detroit press conference where he “unretired” and was named in-charge of GM marketing and advertising, Lutz told reporters that he has, to paraphrase, “(O)ften been a critic of our (GM) advertising, and maybe that’s why I got this job. They figure if I don’t like it, let’s see if I can come up with something better.”

Can he come up with something better than the “sale of the week” ads which many local dealer groups run, amidst a hodge-podge of regional and national TV, radio, Web and print ads which seem to have no cohesive message?

Lutz has been talking-up focusing on GM’s styling and design, and the company has a strong history in that arena.

GM was the first car company in the world with a dedicated styling department, and the first car-maker to produce a “concept car,” the 1938 Buick “Y-job,” overseen and built (and then driven almost daily) by the industry’s first legendary designer, Harley Earl.
2009-07-16-buickyjobharleyearl1938.jpg Regarded as the world’s first “concept car,” the 1938 Buick Y-job

There have also been many slogans throughout the years, from the memorable corporation-wide “GM – Mark of Excellence” to Cadillac’s “Standard of the World.” Should these be resurrected?

GM advertising has used both photography and artwork through the years, like the fantastical, exaggerated automotive renderings of Art Fitzpatrick and Van Kaufman, particularly of Pontiac’s “Wide-Track” models of the ’60s and ’70s (later mocked by artist Bruce McCall).

But with still so many different kinds of cars and trucks, can GM find one theme which runs through their entire line-up, something which will wake-up the public?

Also, while Lutz says styling must be part of GM’s new ad theme, are average buyers so concerned with their vehicle’s appearance?
2009-07-16-fitzandvan1967pontiacbonneville.jpeg Artwork of a 1967 Pontiac Bonneville by GM’s Fitz and Van from a GM print advertisement

Maybe style is a major factor for luxury car-buyers, but for most of us, aren’t reliability and quality factors at least as important as looks? Don’t bottom-line price and the overall “buying and service experience” trump snappy style? JD Power and Associates doesn’t query consumers about “style,” but about quality, dependability and value.

Certainly the somewhat bland, appliance-like styling of so many under-$30,000 cars tells us that a product’s perceived worth is often more important than design.

So we put it to you: If you were Bob Lutz, how would you begin promoting, advertising and marketing (three quite separate disciplines) the new General Motors to the American public?

More on Cars


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Steve Parker: Tell Bob Lutz what GM must do now

July 16th, 2009 admin No comments

With the Core Four divisions of Cadillac, Chevrolet, Buick and GMC, and with Bob Lutz back on-board, General Motors is now very much on its own.

They don’t have the kind of partnership and help which Chrysler will be getting from Fiat and Washington is on-hand only to protect the public’s huge investment in the company.

The new smaller, leaner GM corporation, with much less debt than before, now 60%-owned by the American people and newly-emerged from bankruptcy while cutting-back on white collar employees by the scores, begs the question: What now?
2009-07-16-boblutzreporters.jpg Bob Lutz as he most likes to be … the center of attention

Industry newspaper Automotive News ran a multiple-choice poll in Wednesday’s edition, asking readers: How can Bob Lutz best help GM improve its marketing?

The answers supplied included these four:

- He should mimic Lee Iacocca and pitch GM cars in ads (16% answered yes to this choice as of 6pm Eastern time Wednesday);

- He should make sure that GM’s marketing of its vehicles is consistent with their design (40%);

- He should be the public face of GM at auto shows (5%);

- He should carry out his new role in the background and yield the spotlight to younger executives (39%).

Lutz is no stranger to automotive marketing. In his many years in the industry, during executive stints at Ford, BMW, Chrysler and GM, he’s often had a hand in marketing, promotion, advertising and sales.

He was there and had a voice when Ford’s Explorer SUV and Merkur imports were first suggested, when the successful Chrysler “cab-forward” LH cars, Dodge Viper and Plymouth Prowler were put in-production and at GM he brought the “new” Pontiac GTO and Pontiac G8 from Australia to the US market, for better or worse, along with the Buick Lacrosse crossover and the sporty Saturn Sky and Pontiac Solstice coupes and Chevy Malibu sedan.
2009-07-16-1993PlymouthProwlerConcepttakeout.jpg 1993 Plymouth Prowler concept

While at BMW, where he worked on the original 3-Series, he dealt with the ad agency which developed the fabulous slogan, “The ultimate driving machine,” a winner which Bimmer uses worldwide to this day.

After last week’s Detroit press conference where he “unretired” and was named in-charge of GM marketing and advertising, Lutz told reporters that he has, to paraphrase, “(O)ften been a critic of our (GM) advertising, and maybe that’s why I got this job. They figure if I don’t like it, let’s see if I can come up with something better.”

Can he come up with something better than the “sale of the week” ads which many local dealer groups run, amidst a hodge-podge of regional and national TV, radio, Web and print ads which seem to have no cohesive message?

Lutz has been talking-up focusing on GM’s styling and design, and the company has a strong history in that arena.

GM was the first car company in the world with a dedicated styling department, and the first car-maker to produce a “concept car,” the 1938 Buick “Y-job,” overseen and built (and then driven almost daily) by the industry’s first legendary designer, Harley Earl.
2009-07-16-buickyjobharleyearl1938.jpg Regarded as the world’s first “concept car,” the 1938 Buick Y-job

There have also been many slogans throughout the years, from the memorable corporation-wide “GM – Mark of Excellence” to Cadillac’s “Standard of the World.” Should these be resurrected?

GM advertising has used both photography and artwork through the years, like the fantastical, exaggerated automotive renderings of Art Fitzpatrick and Van Kaufman, particularly of Pontiac’s “Wide-Track” models of the ’60s and ’70s (later mocked by artist Bruce McCall).

But with still so many different kinds of cars and trucks, can GM find one theme which runs through their entire line-up, something which will wake-up the public?

Also, while Lutz says styling must be part of GM’s new ad theme, are average buyers so concerned with their vehicle’s appearance?
2009-07-16-fitzandvan1967pontiacbonneville.jpeg Artwork of a 1967 Pontiac Bonneville by GM’s Fitz and Van from a GM print advertisement

Maybe style is a major factor for luxury car-buyers, but for most of us, aren’t reliability and quality factors at least as important as looks? Don’t bottom-line price and the overall “buying and service experience” trump snappy style? JD Power and Associates doesn’t query consumers about “style,” but about quality, dependability and value.

Certainly the somewhat bland, appliance-like styling of so many under-$30,000 cars tells us that a product’s perceived worth is often more important than design.

So we put it to you: If you were Bob Lutz, how would you begin promoting, advertising and marketing (three quite separate disciplines) the new General Motors to the American public?

More on Cars


Categories: World Tags: , , , , , , , , ,

AP source: NY AG may press for Rattner settlement

July 15th, 2009 admin No comments

NEW YORK — The state attorney general may press for a legal settlement with Steven Rattner, until recently a key Obama administration adviser on the auto industry, over possible civil charges in a pay-to-play investigation, The Associated Press has learned.

Rattner announced Monday that he was resigning his position on the White House’s auto industry task force, which led the restructure of General Motors Co. and Chrysler Group LLC. It remained unclear Tuesday whether that departure had anything to do with the ongoing public corruption probe that has nibbled at his heels in New York.

Attorney General Andrew Cuomo and the Securities and Exchange Commission have charged a state official and a political consultant with extracting millions of dollars in kickbacks from investment firms trying to raise money from the state’s big public pension fund.

The private equity firm Rattner led before joining President Barack Obama’s administration, the Quadrangle Group, paid more than $1 million to one of the people indicted in the case, New York political consultant Hank Morris.

A person familiar with the investigation said that criminal charges were unlikely but that Rattner or Quadrangle could reach civil settlements like those Cuomo has reached recently with other companies that made similar payments. The person wasn’t authorized to publicly discuss the pending investigation and spoke to the AP on condition of anonymity.

A spokesman for Quadrangle and Rattner declined to comment Tuesday about the resignation or any settlement talks. A spokesman for Cuomo’s office also declined to comment.

Rattner also has been scrutinized over a business deal that appeared to have been designed to curry favor with pension fund officials.

In early 2005, a film company owned by Quadrangle agreed to distribute a low-budget movie called “Chooch,” produced by the brother of the pension fund’s chief investment officer. Shortly after the film deal was inked, the pension fund agreed to invest $150 million with Quadrangle.

Two weeks ago, the Pacific Corporate Group agreed to pay $2 million to resolve its role in the probe. Riverstone Holdings said it would pay $30 million. The Carlyle Group, one of the nation’s largest private equity funds, agreed to pay $20 million in May.

Each of those companies also agreed to implement reforms aimed at reducing the potential for influence peddling, including adopting rules banning campaign contributions to elected officials with roles in deciding how public pension funds invest their money.

Morris was indicted in March. He denied any wrongdoing and pleaded not guilty.


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Chrysler Financial repays $1.5 bln US gov’t loans

July 15th, 2009 admin No comments

DETROIT, July 14 (Reuters) – Chrysler Financial said on Tuesday it has paid off $1.5 billion in loans it had received from the U.S. Department of Treasury in January to fund vehicle loans and incentive programs for Chrysler consumers.

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Steve Parker: What!?! Bob Lutz back at GM!

July 11th, 2009 admin No comments

General Motors has come out of bankruptcy after a somewhat-biblical 40 days and nights of massive reorganization, as a new, smaller company more than 60% owned by the US government (that’s US, as in “us”).

Yet GM is stubbornly holding onto Buick and GMC, when the other two of the General’s remaining “Core Four,” Chevrolet and Cadillac, are all they really need and all that make sense.

It appears, though, that the vestiges of cars and trucks past aren’t the only things GM is clinging to: Bob Lutz, 77, has “unretired” and will continue as GM’s vice-chairman.

He will head the company’s marketing, advertising and communications and have significant input on product design. In February, Lutz had said he would retire by year-end after eight years as GM’s product development chief.

In an interview heard on All Things Considered on NPR Friday, Lutz told host Robert Siegel that, “We took our eyes off the ball in the ’70s, ’80s and early ’90s,” when it came to product quality.
2009-07-11-BOBLUTZCIGAR.jpg GM Vice-Chairman Bob Lutz

Siegel naturally asked Lutz how the company might overcome more than 20 years of admittedly poor product and with a reputation and market share dropping almost by the minute, and all Lutz could offer was, “Well, none of us were here when that happened.”

During the interview, he also managed to work in the usual litany of thinly-veiled anti-union rhetoric; “legacy costs” and the like.

The always-quotable and sometimes-acerbic Swiss-born Lutz, a favorite of reporters, has also been at Ford, BMW and Chrysler — where he served as one of the top two executives along with Bob Eaton — is an ex-Marine fighter pilot who collects cars … and fighter jets.

He may be possibly the last remaining still-active genetic throwback to the revered and storied “GM General Manager,” the men who ran the separate GM divisions as their own private car companies, battling the company’s board of directors for every last penny for their pet projects — and constantly fighting each other to be first with the best and the most. The top general manager usually became president of the company (except Chevrolet General Manager John Z. DeLorean, but that’s another story).
2009-07-11-boblutzchevyvolt.jpg Lutz introduces the Chevy Volt concept

But is Lutz right for this job, at this time?

With CEO Fritz Henderson fast-tracking right out of GM’s bean-counting financial world, and the new chairman of the board, Edward Whiteacre, the former AT&T chief who admits, “I don’t know much about cars … but I can learn,” who will stand-up for creating and producing world-class products?

I’d say Lutz … if this were 1967 and gas was 30 cents a gallon.

In our current decade, Lutz shepherded to market the “new” Pontiac GTO and the Pontiac G8, both sales disasters because of their gas-guzzling engines. One could argue that, “Well, they were great cars but the price of oil just went crazy.”

But that’s the same excuse each of the Big Three have used far too often and for far too long. The GTO and G8 (and to some extent the Ford Flex with its big V6 and of course the Dodge Challenger and too many other Chrysler products) are only the latest examples of the short-sightedness and arrogance of Detroit executives.

Lutz is getting much of the credit for the Chevy Volt, an extended-range gas/electric hybrid which may hit the roads by early 2011. But its predicted near-$40,000 price tag and limited availability already has some analysts shaking their heads, especially when Honda is selling their Insight, a small hybrid sedan, for under $24,000, fully-equipped. And Ford’s Fusion hybrid isn’t much more.
2009-07-11-2008_dodge_viper_srt10.jpg Lutz green-lighted the Dodge Viper for production while at Chrysler

Perhaps the White House and GM should have taken note of story which came out of Louisiana just a few weeks ago. At a former GM plant there, T. Boone Pickens is among the investors in an automotive venture called VVC. When the fledgling company announced their top staff members, their design chief was revealed to be Tom Matano, formerly Mazda’s chief designer and the stylist who created the Mazda MX-5 Miata, the world’s most-popular sports car. Matano understands small cars, small engines and knowing what the public-at-large wants.

Why doesn’t GM shock the industry and wake-up the public by finding their own Tom Matano? Or does Detroit’s “Not Invented Here” philosophy still rule the day for what used to be known as Generous Motors?

Is it possible for a 77-year old gentleman to essentially do a complete 180-degree turn from his life experience and philosophy? After all, among Lutz’s major claims to fame are green-lighting the Dodge Viper and the Plymouth Prowler faux hot rod.

Can Bob Lutz get the religion necessary for the 21st century automotive world?

Maybe GM’s new owners should step in at this point for some major and meaningful executive changes.

More on NPR


Steve Parker: What!?! Bob Lutz back at GM!

July 11th, 2009 admin No comments

General Motors has come out of bankruptcy after a somewhat-biblical 40 days and nights of massive reorganization, as a new, smaller company more than 60% owned by the US government (that’s US, as in “us”).

Yet GM is stubbornly holding onto Buick and GMC, when the other two of the General’s remaining “Core Four,” Chevrolet and Cadillac, are all they really need and all that make sense.

It appears, though, that the vestiges of cars and trucks past aren’t the only things GM is clinging to: Bob Lutz, 77, has “unretired” and will continue as GM’s vice-chairman.

He will head the company’s marketing, advertising and communications and have significant input on product design. In February, Lutz had said he would retire by year-end after eight years as GM’s product development chief.

In an interview heard on All Things Considered on NPR Friday, Lutz told host Robert Siegel that, “We took our eyes off the ball in the ’70s, ’80s and early ’90s,” when it came to product quality.
2009-07-11-BOBLUTZCIGAR.jpg GM Vice-Chairman Bob Lutz

Siegel naturally asked Lutz how the company might overcome more than 20 years of admittedly poor product and with a reputation and market share dropping almost by the minute, and all Lutz could offer was, “Well, none of us were here when that happened.”

During the interview, he also managed to work in the usual litany of thinly-veiled anti-union rhetoric; “legacy costs” and the like.

The always-quotable and sometimes-acerbic Swiss-born Lutz, a favorite of reporters, has also been at Ford, BMW and Chrysler — where he served as one of the top two executives along with Bob Eaton — is an ex-Marine fighter pilot who collects cars … and fighter jets.

He may be possibly the last remaining still-active genetic throwback to the revered and storied “GM General Manager,” the men who ran the separate GM divisions as their own private car companies, battling the company’s board of directors for every last penny for their pet projects — and constantly fighting each other to be first with the best and the most. The top general manager usually became president of the company (except Chevrolet General Manager John Z. DeLorean, but that’s another story).
2009-07-11-boblutzchevyvolt.jpg Lutz introduces the Chevy Volt concept

But is Lutz right for this job, at this time?

With CEO Fritz Henderson fast-tracking right out of GM’s bean-counting financial world, and the new chairman of the board, Edward Whiteacre, the former AT&T chief who admits, “I don’t know much about cars … but I can learn,” who will stand-up for creating and producing world-class products?

I’d say Lutz … if this were 1967 and gas was 30 cents a gallon.

In our current decade, Lutz shepherded to market the “new” Pontiac GTO and the Pontiac G8, both sales disasters because of their gas-guzzling engines. One could argue that, “Well, they were great cars but the price of oil just went crazy.”

But that’s the same excuse each of the Big Three have used far too often and for far too long. The GTO and G8 (and to some extent the Ford Flex with its big V6 and of course the Dodge Challenger and too many other Chrysler products) are only the latest examples of the short-sightedness and arrogance of Detroit executives.

Lutz is getting much of the credit for the Chevy Volt, an extended-range gas/electric hybrid which may hit the roads by early 2011. But its predicted near-$40,000 price tag and limited availability already has some analysts shaking their heads, especially when Honda is selling their Insight, a small hybrid sedan, for under $24,000, fully-equipped. And Ford’s Fusion hybrid isn’t much more.
2009-07-11-2008_dodge_viper_srt10.jpg Lutz green-lighted the Dodge Viper for production while at Chrysler

Perhaps the White House and GM should have taken note of story which came out of Louisiana just a few weeks ago. At a former GM plant there, T. Boone Pickens is among the investors in an automotive venture called VVC. When the fledgling company announced their top staff members, their design chief was revealed to be Tom Matano, formerly Mazda’s chief designer and the stylist who created the Mazda MX-5 Miata, the world’s most-popular sports car. Matano understands small cars, small engines and knowing what the public-at-large wants.

Why doesn’t GM shock the industry and wake-up the public by finding their own Tom Matano? Or does Detroit’s “Not Invented Here” philosophy still rule the day for what used to be known as Generous Motors?

Is it possible for a 77-year old gentleman to essentially do a complete 180-degree turn from his life experience and philosophy? After all, among Lutz’s major claims to fame are green-lighting the Dodge Viper and the Plymouth Prowler faux hot rod.

Can Bob Lutz get the religion necessary for the 21st century automotive world?

Maybe GM’s new owners should step in at this point for some major and meaningful executive changes.

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GM Expected To Exit Chapter 11

July 10th, 2009 admin No comments

DETROIT — After a night spent signing mounds of paperwork authorizing the transfer of cash, real estate, technology and other property, GM attorneys are expected to officially usher the new General Motors out of bankruptcy protection on Friday and onto a path toward a hopefully profitable future.

Once the world’s largest and most powerful automaker, the troubled company is expected to emerge cleansed of massive debt and burdensome contracts that would have sunk it without federal loans. Spurred on by the Obama administration’s support, the process took just 40 days, even slightly quicker than crosstown rival Chrysler Group LLC’s 42-day timeframe.

On Thursday, a bankruptcy court order allowing GM to sell most of its assets to a new company went into effect. The new GM, 61 percent owned by the U.S. government, will face a brutally competitive global automotive market in the middle of the worst sales slump in a quarter-century.

At a 9 a.m. press conference Friday, CEO Fritz Henderson will announce that GM will cut another 4,000 white-collar jobs, including 450 top executives. The company still employs 88,000 people in the U.S. and 235,000 worldwide.

Henderson also is expected to describe how GM will streamline its bureaucratic management structure to become profitable again. GM has said it will be able to make money even if the U.S. auto market stays at a depressed level of 10 million to 10.5 million vehicles sold.

Yet despite massive cost reductions, experts say GM must produce vehicles that people want to buy, and change its image to one on the cutting edge of efficiency and quality.

“It is the smaller, leaner, tougher, better cost-focused GM,” said George Magliano, an automotive analyst with the consulting firm IHS Global Insight. “But they still have to deal with the problems that they faced longer-term.”

Rep. Gary Peters, whose Michigan district is home to three GM factories, said the company’s emergence signals a new era for the domestic auto industry and the thousands of people it employs.

“With bankruptcy in the rearview mirror, U.S. auto companies will even more aggressively pursue new technologies, become more globally competitive,” he said. “Decades from now, our nation will be glad we did not let a global credit crisis put an end to the American automobile.”

“I’m very much looking forward to a point where we’re operating in clear air, and the name of the company not being associated with bankruptcy and loans and these things,” said Mark LaNeve, GM’s North American marketing chief.

GM ranked as the top global automaker in terms of sales for 77 years before Japan’s Toyota Motor Corp. snatched its crown in 2008. The company sold nearly 8.4 million cars and trucks around the world in 2008, falling short of Toyota’s nearly 9 million.

Once the largest corporation in America, GM held the top spot in the Fortune 500 ranking for 20 years before being pushed out of the top spot in 1973 by Exxon Mobil Corp. It reclaimed No. 1 status in 1985 and held it for another 15 years.

Experts say GM’s future success will depend largely on its ability to persuade consumers that it’s a different company, one that builds cars that will equal or outlast Japanese models. To illustrate the change, GM is considering a new name.

Turning a profit will not be easy. GM lost more than $80 billion in the last four years and survives only because it expects to receive $50 billion in U.S. government loans. Without the loans, its executives have said the company would have been sold off in pieces.

The Obama administration has said it does not plan to interfere with day-to-day operations, though it ousted ex-CEO Rick Wagoner and has been involved in picking the new company’s board.

Most of GM’s model lineup is expected to stay unchanged for now. But the company on Friday will probably show off its newer, more efficient models, as well as plans for a U.S.-made subcompact and rechargeable electric vehicles.

Also on Friday, Henderson is expected to announce that Bob Lutz, GM’s product guru, will remain as a special adviser. Lutz, 77, announced in February that he would retire at year’s end.

In addition to the U.S. government’s controlling interest, the United Auto Workers union gets a 17.5 percent stake of the company through its retiree health care trust, and the Canadian government will control 11.7 percent. The remaining shares went to bondholders of the old company.

The parts of GM not moving to the new company will become part of “old GM,” a collection of assets and liabilities that will be sold to pay creditors.

Almost immediately, GM will try to show how it’s a different company, perhaps by changing its familiar square logo from blue to green, to reflect its environmental focus.

“I think that as a corporate identity the color change could well be a smart move,” said Tony Spaeth, president of Tony Spaeth/Identity, a Rye, N.Y., firm that helps companies craft identities. “It lends a little bit more reality and sincerity of intention to ‘We want to change the way we do things.’”

Today’s consumers are sophisticated and will seek out environmental information to help make shopping choices, said Allen Adamson, managing director at branding firm Landor Associates.

“They have to do this just to stay in the game and to win on that dimension. To win on green, this is a very big challenge,” he said.

Toyota, for instance, is known for its breakthrough hybrid gas-electric technology, and GM could accomplish the same thing with its Chevrolet Volt rechargeable electric car due in showrooms by late 2010.

___

Fredrix reported from Milwaukee. Associated Press writers Bree Fowler in New York and Stephen Manning and Ken Thomas in Washington, D.C., contributed to this report.

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565K New Jobless Claims, Lowest Level Since Jan.

July 9th, 2009 admin No comments

WASHINGTON — The number of newly laid-off workers filing initial claims for jobless benefits last week fell to lowest level since early January, largely due to changes in the timing of auto industry layoffs.

Continuing claims, meanwhile, unexpectedly jumped to a record-high. While layoffs are slowing, unemployed workers are having a difficult time finding new jobs. The unemployment rate rose to 9.5 percent last month and is expected to top 10 percent by the end of this year.

New claims for unemployment insurance plummeted by 52,000 to 565,000, the Labor Department said Thursday. That’s significantly below analysts’ expectations of 605,000, according to Thomson Reuters. The last time new claims were below 600,000 was week of Jan. 24.

The drop resulted partly from technical factors, a department analyst said. Auto layoffs that normally take place in early July, as factories are retooled to build the next year’s models, occurred in the spring instead as General Motors Corp. and Chrysler LLC implemented sweeping restructuring plans.

The department’s seasonal adjustment process expected a large increase in claims from auto workers and other manufacturing workers, the analyst said. Since that didn’t occur, seasonally-adjusted claims fell.

The non-seasonally adjusted figure increased by about 17,000 to 577,506 initial claims.

Still, continuing claims jumped 159,000 to 6.88 million, the highest on records dating from 1967. Analysts had expected 6.71 million continuing claims.

Continuing claims had fallen in two of the previous three weeks. The data lag initial claims by a week.

Economists are closely watching the level of first-time claims for signs the economy will recover in the second half of this year, as many predict. But the change in the timing of auto layoffs will likely muddy the picture next week as well, the Labor Department analyst said.

The four-week average of initial claims, which smooths out fluctuations, fell to 606,000, down more than 50,000 from its peak in early April.

Still, claims remain elevated: they were at 367,000 a year ago.

Consumers and businesses have cut back on spending in response to the bursting of the housing bubble and the financial crisis, sending the economy into the longest recession since World War II.

The Labor Department said last week that employers cut 467,000 jobs in June and the unemployment rate rose to 9.5 percent, the highest in 25 years.

The payroll cuts last month were greater than analysts expected, renewing concern that jobs will remain scarce even if the economy does eke out growth later this year.

Some employers are still shedding jobs. Gannett Co. Inc., which publishes USA Today and 85 other daily newspapers, said last week that it will eliminate about 1,400 jobs, or 3 percent of its work force.

Among the states, New Jersey reported the largest increase in initial claims, with 7,876, which it attributed to seasonal layoffs related to school closings and manufacturing job cuts. The next largest increases were reported by Massachusetts, Kansas, Kentucky and New York. The state data lags initial claims by one week.

Florida reported the largest decrease, with 12,493, which it attributed to fewer layoffs in the construction, manufacturing and agriculture industries. Illinois, Pennsylvania, California and Tennessee reported the next largest drops.


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