Daily Edition: Feb. 9, 2006

February 9, 2006

Bigger Is Better in Chicago

2007 Lincoln Navigator L

2007 Lincoln Navigator L

If last year's oil shock changed the way Americans are driving, the message was apparently lost on those showing off their wares in the Windy City. The 2006 Chicago Auto Show puts plenty of emphasis on large trucks. Toyota will roll out its next-generation Tundra pickup on Thursday, while General Motors rolled out yet another variant of its all-new big truck platform -- the 2007 Chevrolet Avalanche. Dodge's mid-size Nitro SUV was nearly the smallest truck on display. And at Lincoln, the new Navigator showed up with an even larger L model.

2006 Chicago Auto Show Coverage by TCC Team (2/6/2006)


GM Following Yellow Line; Who's Following?

2007 Chevrolet Avalanche

2007 Chevrolet Avalanche

The billboards plastered all over Chicago's
McCormick Place
generated a bit of confusion when the media hordes descended on the Windy City convention center. "Live Green, Go Yellow," they declare. And it turns out they're the slogan for General Motors big push for ethanol, a campaign teased with a pair of commercials aired during last weekend's Super Bowl. The automaker hopes to see a rapid increase in production and distribution of E85 - a blend of 85 percent ethanol and 15 percent gasoline, said marketing executive Brent Dewar. Since ethanol can be produced from a variety of grains, such as corn - hence the reference to yellow - it is a renewable alternative to imported oil, and said Dewar, part of the process of "ultimately removing the automobile from the environmental debate."

So far, GM reported, it has produced more than 1.6 million flex-fuel cars, trucks and crossovers, vehicles that can run on any blend of gasoline or ethanol. The problem is that few consumers actually use the fuel. At the moment, there are no more than 500 E85 pumps in the United States. But "the intent is to build the infrastructure," asserted Beth Lowery, who heads GM's environmental efforts. The more E85-capable vehicles, she added, the more likely energy companies will provide the fuel. The effort is also getting a push from the President, who spotlighted ethanol during his State of the Union speech. With automakers like GM and Ford partnering with Shell, VersaSun and other ethanol providers, industry prognosticators are hoping there'll be 2000 E85 pumps dotting the U.S. map by the end of 2006.

GM Slashes Exec Pay, Dividend by TCC Team (2/7/2006)
Still more "shared pain" could be in the offing, CEO Wagoner suggests.


Ford Gets E85 Out with Kermit

Kermit and Anne Stevens

Kermit and Anne Stevens

Ford had some E85 announcements of its own to make in Chicago. It rolled out a prototype Escape Hybrid that can run on gasoline or ethanol, with the help of Muppet Kermit the Frog. Like GM, Ford is partnering with various energy suppliers to expand availability. "Consumers aren't willing to drive 50 miles" to find ethanol, said Anne Stevens, Ford's second-in-command in the U.S. But more pumps mean more motorists will actually fill their flex-fuel vehicles up on E85, rather than gasoline, she contended. But not everyone is quite so confident. For one thing, ethanol is currently a good bit more expensive than gasoline and doesn't deliver quite as much mileage-not to mention the fact it competes with food production from the same basic grains. "There are still a lot of questions about what the real benefits (of ethanol) will be," cautioned Jim Press, CEO of Toyota's U.S. operations.

Bush Takes Ethanol Message on Road by Joseph Szczesny (2/6/2006)
Follow-ups to State of the Union press for break from oil "addiction."


Press: Fuel-Economy Numbers "Misleading"

Press's skepticism could also reflect the fact that Toyota has been betting its environmental reputation on its growing lineup of hybrid-electric vehicles - products that have generated some controversy of their own. The EPA is proposing changes in mileage tests, and some observers estimate products like the Toyota Prius could see their own fuel economy ratings dip by 20 to 30 percent. Press said he supported the new rules because, "the advertising (of current mileage estimates) is misleading." Toyota is investing $7 billion a year on the development of higher-mileage and alternative fuel vehicles, Press added. Ultimately, he suggested, there is likely to be a "matrix" of different powertrains - gasoline, ethanol, hybrid, diesel and even hydrogen - filling the varied needs of American motorists.

2007 Toyota Camry by Bengt Halvorson (1/30/2006)
Ready to spoil a new round of frugal family buyers - and keep its best-selling title.


New Tundra Has Michigan Roots

The hubbub over Toyota's new Tundra pickup truck has been building for months, with the Japanese automaker nearly done with a new plant in San Antonio, Texas, where it will produce the truck. It turns out, though, that the first "production" truck ready for public viewing at the Chicago Auto Show was built not in Texas but by a team of technicians in a secretive pilot plant near Ann Arbor, Mich., in a part of the Toyota Technical Center. The new San Antonio-built truck will reach the public in about 11 months and Toyota is targeting sales of 200,000 units in 2007, according to Jim Press, Toyota Motor Sales, chief operating officer. The San Antonio plant simply wasn't ready to produce the pilot version in time for its official introduction in Chicago, Press said.-Joe Szczesny

Spy Shots: '07 Toyota Tundra by Hans Lehmann/Hidden Image (1/30/2006)
The first pictures, ahead of Chicago's launch.


GMT900 Ahead of Schedule

With the bad news piling up, General Motors is basically betting the company on the success of the GMT 900. Gary White, the vehicle line executive responsible for the trucks and sport-utility vehicles in the 900 family, said the program is ahead of plan. "We're ahead of schedule," he said in Chicago when TheCarConnection caught up with him after watching rival Ford roll out the makeover of the 2007 Lincoln Navigator at the Chicago Auto Show.  White said GM's assembly plant in Arlington, Texas, is already building the Chevrolet Tahoe and Yukon and two weeks ago added the 2007 Cadillac Escalade to the mix. GM's assembly plant in Janesville, Wisc., also began building the Tahoe and Yukon last month and GM is soon planning to move ahead with the long-wheelbase versions of the new SUVs and then add the Avalanche to the mix in March, he said. The success of the various GMT900 models is considered critical to GM's hopes of regaining profitability, analysts have said. An accelerated production schedule also enhances GM's cash flow and relieves more of the financial pressures faced by the company.-Joe Szczesny


Ford Keeps Part of "Way Forward" Secret

Ford Motor Co. isn't prepared to offer any more details about its "Way Forward" restructuring plan, said Anne Stevens, Ford executive vice president and one of the chief architects behind the effort to revive Ford's struggling automotive business. Stevens also said the company was still evaluating specifics such as what additional plants it will closes as part of the restructuring. Ford assembly plants in Wixom, Mich., Atlanta and St. Louis are preparing to close as part of the effort to reduce the company's assembly capacity. Ford also is discussing closing two additional assembly plants to further reduce capacity. Stevens, however, noted that Ford also wants to retain some flexibility as it moves ahead with the plan. In 2002, Ford outlined most of the details of the plan right from the start but wound up painting itself into a corner, she said. As circumstances change, Ford found it was difficult to alter the plan because of its earlier public statements. Ford would like to avoid repeating the mistakes of 2002, she said. Other Ford officials also said the company is still wrestling with what to do with the Lincoln Town Car and the platform on which it rides.  So far, Ford hasn't found a home for the Town Car, which will be evicted next year from its long-time home in Wixom. Ford is still looking at various scenarios for moving and/or enhancing the Town Car, Ford officials said in advance of the Chicago Auto Show. The final decision isn't far off but it has not been made yet. Stevens also declined to say whether in the wake of the planned cuts spelled out in the restructuring plan, the company's automotive business will return to profitability in 2006. "We're not saying anything in connection with 2006," she said.-Joe Szczesny


FROM THE SOURCE headlines from the latest press releases


The purchase of an average-priced, new vehicle during the fourth quarter of 2005 took 27.0 weeks of median family income, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank.  The latest reading is up 0.6 weeks from the prior quarter, resulting in the worst reading for affordability in six years. Including finance charges, the total cost of buying an average-priced light vehicle was $29,200 in the fourth quarter, up 11 percent from a year ago.


Name Symbol Last Change
Autobytel, Inc. ABTL 4.98 +0.14 (+2.89%)
Autoliv Inc. ALV 48.37 -0.12 (-0.25%)
AutoNation Inc. AN 22.10 -0.07 (-0.32%)
ArvinMeritor Inc. ARM 16.38 -0.12 (-0.73%)
American Axle & Mfr. Holdings Inc. AXL 16.77 -0.31 (-1.81%)
Ballard Power Systems Inc. BLDP 5.39 +0.23 (+4.46%)
BorgWarner Inc. BWA 54.35 -1.01 (-1.82%)
Cummins Inc. CMI 99.70 +0.24 (+0.24%)
Dana Corporation DCN 4.31 +0.05 (+1.17%)
DaimlerChrysler AG (ADR) DCX 56.77 +0.08 (+0.14%)
Dura Automotive Systems DRRA 2.29 -0.08 (-3.38%)
Eaton Corporation ETN 66.71 +0.22 (+0.33%)
Ford Motor Company F 8.23 +0.14 (+1.73%)
General Motors Corporation GM 21.99 -0.82 (-3.59%)
Gentex Corporation GNTX 17.26 +0.27 (+1.59%)
Goodyear Tire & Rubber GT 14.82 -0.18 (-1.20%)
Honda Motor Co. Ltd. (ADR) HMC 28.86 -0.01 (-0.03%)
Johnson Controls Inc. JCI 67.03 -0.21 (-0.31%)
Lear Corporation LEA 23.10 -0.88 (-3.67%)
Magna International Inc. MGA 72.00 +0.02 (+0.03%)
Motorola Inc. MOT 21.69 +0.69 (+3.29%)
Nissan Motor Co. Ltd. (ADR) NSANY 22.15 +0.05 (+0.23%)
Sonic Automotive Inc. SAH 23.94 +0.11 (+0.46%)
Siemens AG SI 89.54 +0.53 (+0.60%)
Sirius Satellite Radio SIRI 5.98 +0.22 (+3.82%)
Toyota Motor Corporation (ADR) TM 103.90 -0.39 (-0.37%)
TRW Automotive Holdings TRW 25.77 -0.16 (-0.62%)
Tower Automotive Inc. TWRAQ.PK 0.075 0.00 (0.00%)
United Auto Group Inc. UAG 39.00 0.00 (0.00%)
Visteon Corporation VC 4.62 +0.17 (+3.82%)
XM Satellite Radio Hold. XMSR 24.61 +0.93 (+3.93%)
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