Daily Edition: Nov. 29, 2005

November 28, 2005
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Delphi Says GM Talks Progressing

Delphi Corp. said on Monday that talks with General Motors on a bailout were making progress, as the bankrupt supplier tries to slash its way out of Chapter 11. One key result to emerge from the talks thus far is a pledge by GM to suspend the price reductions for 2006 that it had previously negotiated with Delphi, which filed for bankruptcy in October. The GM agreement hasn't slowed the war of words between the supplier and its UAW workforce, however; last week's report by Delphi that its labor costs were $76 an hour including benefits were countered by the union, which reiterated its demand that Delphi back away from its offers of $21 an hour, including benefits, for its members employed by Delphi. Delphi also says it will delay a petition to the courts to dissolve its current labor contracts until discussions with GM have concluded.

War of Words Over Delphi Escalates by Joseph Szczesny (11/28/2005)
Union cries foul as Delphi says it pays $76 per hour.

Chrysler Confirms Dodge Nitro for '07

Chrysler has made it official: the new Jeep Liberty-based SUV coming to Dodge dealerships will be built in Toledo - and it will be named Nitro. The company confirmed the news at the Toledo assembly plant in a press conference Monday, noting that the Nitro would be the first non-Jeep product to be built at the Toledo complex in more than a decade. Chrysler Group will invest $600 million in the Nitro project, which includes some new tooling specifically for the longer, more sharply creased Nitro version. Both the Nitro and Liberty will be built at Toledo North; a new South plant in Toledo is under construction and will build the replacement for the Jeep Wrangler and derivative models, beginning in the summer of 2006.

Daily Edition: Oct. 5, 2005 by TCC Team (10/4/2005)
New S-Class, Yukon, Denali and Dodge Nitro.

DC Building Sprinter Plant in SC

DaimlerChrysler will also build a new plant in South Carolina where it will build the Dodge Sprinter van, in a scaled-back version of a plan originally announced for the state of Georgia. Several wire reports indicate that the German company has chosen a site in North Charleston for the new plant, which will open with between 200 and 300 workers and which will eventually employ as many as 1800 workers. In 2003 DC and the state of Georgia had planned to build a plant to build Sprinters outside the port town of Savannah, but the restructuring at Chrysler Group shuttered those plans. An existing facility in North Charleston will be converted for the new production line. Sprinters also are assembled in nearby Gaffney, S.C., on a CKD basis.
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From TCConfidential

Martha's Going to Focus On Her…Buick?

Martha Stewart

Martha Stewart

The worst-laid plans of mice and men seem to roughly coincide with GM's marketing initiatives. You remember last year's brilliant Oprah stunt with the new Pontiac G6 - and the tax problems and the unavailability of the car at GM's dealers, right? Now GM has hitched the Buick Lucerne's fate to Martha Stewart's version of The Apprentice. And while you have to admire Martha's pluck in going directly from jail to hosting her own Trump knockoff (and her own daytime show and Sirius radio channel), you have to feel for GM's uncanny knack for missing the cultural zeitgeist boat. Stewart's shows have been ratings sluggards since her release from jail and home confinement - and GM needs anything but lackluster numbers as it promotes the Lucerne, the big new front-driver that's carrying much of the beleaguered brand's future on its broad shoulders. With the news that Stewart's already been denied a second season interning with the Donald, the Lucerne belatedly becomes Martha's official Apprentice vehicle this week with various promotions leading shoppers to the Buick.com Web site and to a series of "Lucerne VIP Premiere Parties" across the country.

Whether GM needs to spend so much effort planning such huge marketing coups, only to have them overthrown by the unpredictable, is up for debate. This one seems to be headed to the dustbin along with the new Saab campaign we complained about yesterday. But there's one keen takeaway here, at least: grab a copy of the 20-page guide that Buick and Martha Stewart Living are putting out along with the promotion. Because you're never too old to learn how to make a cloth napkin into a swan, right?

Len Hunt Is Loving Kia

Len Hunt is glad to get a crack at running Kia Motors. The new COO of the Korean carmaker's U.S. unit had been tapped to run worldwide marketing for Bentley at Volkswagen. "I looked at my schedule of one posh glad-handing event after another, many of them on the weekends, and I thought…I'm too young for that kind of life," said Hunt during a recent chat in New York.

Hunt was presiding over a frustrating time at Volkswagen. Before being named to run Bentley marketing, a job he never formally took over, he had run the VW brand in the U.S. for about 18 months as sales and profits fell. To be fair, that had more to do with VW's quality woes, lack of correct product, and a weak dollar. Still, Hunt did manage to direct a less than inspiring ad launch of the new Jetta and Passat.

At Kia, Hunt doesn't plan to do too much tinkering with the master plan. "I'm not changing the blueprint, because the strategy is right," says Hunt. His biggest surprise, he says? That the Spectra beat Toyota Corolla and Honda Civic on J.D. Power and Associates Initial Quality Survey.

He does plan to talk to his new Korean bosses about juicing up some versions of Kia's products. A turbocharged, all-wheel-drive Spectra5 is on his wish list. At VW, Hunt got the German automaker to the SEMA show for the first time with R-GT packages for the Jetta and Touareg. He also thinks Kia should have a pickup, and that such a vehicle probably makes more sense for Kia than Hyundai. -Jim Burt

Super Bowl MVP Gets 'Slade

2000 Kia Sportage 2-door

2000 Kia Sportage 2-door

We can almost guarantee that the 4-7 Detroit Lions have nothing to worry about during next year's Super Bowl XL, except possibly how much in tips they'll make parking cars outside Ford Field. However, for the winning team's Most Valuable Player, there's a new bonus in the offing that will make valet space a near-requirement. Cadillac will outfit the Super Bowl MVP with an '07 Escalade, freeing up a lot of signing-bonus money to be spent on wheels, tires, and other bling. In previous years, MVPs like Patriot Tom Brady could choose the Caddy of their liking, but GM's renaissance division is putting all its promo eggs in the brand-new 'Slade's basket - only appropriate for the first Super Bowl to be held in the Detroit area in 25 years. Whether the actual event will go off without a hitch remains to be seen; just where exactly will NFLers stay, eat, and be warm in February in downtown Motown? But at least, in this case, GM has a trophy-winning promotion it can take all the way to Disney World.


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AutoNation Wants Better Customer Relations

AutoNation, Inc., the largest auto dealership collection in the U.S., is seeking to bolster its sales volume and market share even further by improving the customer buying experience at its 281 U.S. dealerships. Already committed to a no-haggle process on its new and used cars, the Ford Lauderdale, Florida-based megadealer has instituted a monthly bonus program for employees who score well on customer-satisfaction surveys. Bonuses go as high as $150 a month for phone operators and five percent of pay for dealership general managers.

AutoNation, whose stock is listed on the New York Stock Exchange and reached a high of $20-$21 a share in late November, enjoys a 2.5-percent return on sales, according to the company's chairman and CEO, Mike Jackson. But revenues have leveled off at the $19 billion mark for the past four years, says Jackson, adding he would like to improve market share in the metro markets where nearly all AutoNation's 349 franchises in 17 states are located.

Among problems hampering AutoNation's growth are failure to attain lower prices for vehicles from automakers than independent franchised dealerships and preference of many foreign-car buyers to purchase at "owner dealerships" rather than those in a large group. State auto-dealer franchise laws forbid producers from selling their vehicles to larger dealers for lower prices than they charge smaller stores, and foreign-brand stores not in groups like AutoNation, or second largest megadealer Sonic Automotive, command greater owner loyalty and repeat sales.

Jackson is launching a customer-relations campaign next year designed to help shoppers obtain a better showroom experience. A former CEO of Mercedes-Benz in the U.S., he wants his salespeople to reduce high-pressure sales tactics and schedule appointments for shoppers. "If you empower the customer," says Jackson, "he or she will beat a path to your door." -Mac Gordon
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FROM THE SOURCE headlines from the latest press releases

PRNewswire

International Auto Components Group ("IAC"), the joint-venture company recently formed by WL Ross & Co. LLC, Franklin Mutual Advisers LLC, and Lear Corporation, announced a definitive agreement to acquire from Collins & Aikman Europe ("C&A") its $600 million operations in Austria, Belgium, Czech Republic, Germany, Netherlands, Slovakia, Spain, Sweden, and the United Kingdom serving Ford, General Motors, DaimlerChrysler, Porsche, Saab, Volkswagen, Volvo, and other original equipment manufacturers. Exchange on the C&A business in Austria is subject to approval of the local insolvency authority and the Austrian Court.
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Name Symbol Last Change
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Autobytel, Inc. ABTL 5.22 -0.28 (-5.09%)
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Autoliv Inc. ALV 44.54
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AutoNation Inc. AN 20.84 +0.19 (+0.92%)
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ArvinMeritor Inc. ARM 13.26 -0.24 (-1.78%)
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American Axle & Mfr. Holdings Inc. AXL 21.30 +0.32 (+1.53%)
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Ballard Power Systems Inc. BLDP 4.65 -0.10 (-2.11%)
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BorgWarner Inc. BWA 60.65 -0.96 (-1.56%)
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Cummins Inc. CMI 88.44 -0.21 (-0.24%)
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Dana Corporation DCN 6.98 -0.15 (-2.10%)
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DaimlerChrysler AG (ADR) DCX 50.33 +0.01 (+0.02%)
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Dura Automotive Systems DRRA 2.54 +0.04 (+1.60%)
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Eaton Corporation ETN 63.23 -0.49 (-0.77%)
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Ford Motor Company F 8.36 +0.04 (+0.48%)
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General Motors Corporation GM 23.22 +0.36 (+1.57%)
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Gentex Corporation GNTX 18.53 +0.23 (+1.26%)
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Goodyear Tire & Rubber GT 17.07 +0.10 (+0.59%)
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Honda Motor Co. Ltd. (ADR) HMC 28.44 +0.53 (+1.90%)
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Johnson Controls Inc. JCI 69.77 -0.22 (-0.31%)
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Lear Corporation LEA 27.93 +0.05 (+0.18%)
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Magna International Inc. MGA 68.70 +0.13 (+0.19%)
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Motorola Inc. MOT 24.08 -0.69 (-2.79%)
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Nissan Motor Co. Ltd. (ADR) NSANY 20.91 -0.05 (-0.24%)
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Sonic Automotive Inc. SAH 20.66 -0.07 (-0.34%)
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Siemens AG SI 76.58 +0.22 (+0.29%)
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Sirius Satellite Radio SIRI 7.00 -0.13 (-1.82%)
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Toyota Motor Corporation (ADR) TM 100.41 +2.13 (+2.17%)
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TRW Automotive Holdings TRW 25.21 -0.38 (-1.48%)
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Tower Automotive Inc. TWRAQ.PK 0.10
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United Auto Group Inc. UAG 35.20 -0.62 (-1.73%)
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Visteon Corporation VC 6.90 -0.17 (-2.40%)
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XM Satellite Radio Hold. XMSR 29.49 -0.86 (-2.83%)
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