Daily Edition: Mar. 6, 2006

March 6, 2006

Wagoner Rumors Start to Swirl

For General Motors' Rick Wagoner, March ought to be a good if not a great month. His beloved Duke Blue Devils are an odds-on favorite to sweep through the NCAA Tournament, and GM's retail sales are showing signs of moving in a positive direction after two years of enormous difficulty.

However, while no one is predicting that GM's board of directors has asked Wagoner to prepare a resignation letter, the gossip aroundDetroit is that he could be reaching the end of his tenure as GM's chairman and chief executive officer.

Until recently, Wagoner had been viewed as GM's one indispensable executive. He was the one guy who could keep everyone inside the company focused on the key objectives of turning around the struggling giant and fend off the challenge from Toyota, which is threatening to take away GM's crown as the world's top automaker.

Wagoner Rumors Start to Swirl (3/6/2006)
Will GM lose its CEO to financial churn?

Ford Adds Details to "Way Forward"

Ford Motor Co. has offered few details about the recovery plan that the company put in place in January - and the new 10K report the company filed with the Securities Exchange Commission (SEC) offered only a few additional insights.

The most significant disclosure was that the company doesn't expect its automotive business to make a profit in 2006 as it continues to struggle with declining U.S. market share and rising costs. Ford conceded in the cautiously written filing that it still hasn't stabilized its market share, which continues to decline. Ford's automotive operations lost $3.9 billion in 2005, but overall the company earned $2 billion thanks to profits from Ford Credit.

Ford also conceded that Ford Credit is under significant pressure and the report also noted that more than 28 percent of all Ford's sales are now wrapped up in one product line, the F-Series pickup truck.

Ford Adds Details to "Way Forward" (3/6/2006)
Tiny piece by piece, company outlines recovery strategy.

Dana Plunges Into Bankruptcy

Following a path worn by big suppliers such as Delphi, Tower, Meridian, Federal-Mogul, and Collins & Aikman, Dana Corp. has filed for protection under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.

Dana, which had total sales of $9 billion in 2004, cited a combination of factors from production cuts by General Motors Corp., Ford Motor Co., and the Chrysler Group to the rise in commodity and energy prices, which have outpaced cost savings efforts, the company said. 

The general financial condition of the industry, together with an inability to renew or expand its credit facilities, also has undercut the company's liquidity, Dana said in a statement.

John Murphy, an analyst with Merrill Lynch, said in research note earlier this week Dana's troubles in its heavy truck business have exacerbated the pressure it is already feeling in its light-vehicle segment.

Dana Plunges Into Bankruptcy (3/6/2006)
Quick filing for major supplier adds to Detroit's worries.

Gas Prices Heading Up

The drop in gasoline prices over the past few weeks appears to have come to an end, as the price of oil continued to trade at more than $63 per barrel on New York Mercantile Exchange.

There seems to be relatively little optimism that gasoline prices will decline in any significant way any time soon. Political unrest in Nigeria and the international community's continuing standoff with Iran over the development of nuclear power, coupled with the continuing guerilla activity against pipelines in Iraq has left crude prices slightly above the what global demand would justify, experts suggest.

The historically high prices for crude also continue to show up at the neighborhood fuel stations. The national average for regular self-serve gasoline is $2.255 a gallon, an increase of one penny from last week. -Joe Szczesny

Vanzura Takes Reins at Cadillac

It took barely a month for Liz Vanzura to put her mark on the Cadillac brand. On Friday, GM announced what had been rumored; that some or all of the Cadillac advertising work would move from Leo Burnett. Vanzura moved half the business to HUMMER's agency, Boston-based Modernista. Vanzura had been running HUMMER marketing before she took over at Cadillac.

Modernista will handle ad work for the CTS sedan, SRX crossover, performance V-Series models, and other unnamed cross-brand projects. Leo Burnett will keep the ad work for Escalade, DTS, STS, and the XLR. If Modernista does well with the assignment, though, Burnett could easily lose it all inside of a year. Burnett also handles Pontiac ads. And GM executives are known to be considering handing that brand off to Deutsch Advertising in New York. Cadillac spends about $225 million on national ads last year.

Vanzura, say sources, had been sent to Cadillac by GM sales and marketing chief Mark LaNeve to fix what has been a sliding advertising effort at his former brand. When Vanzura arrived in mid-January, she was disgusted with the ad that had been created for Cadillac in the Super Bowl, a mock fashion show for the Escalade. It was a dud on all the Super Bowl ad meters measuring how much the audience liked the ads in the big game. Meantime, Modernista had created a Super Bowl ad for the HUMMER H3 that was very well received by the audience and the critics.

Vanzura worked at Volkswagen as head of advertising in the late 1990s when the automaker was producing ads that helped set the brand on fire, and were the talk of the ad world. Remember "Da Da Da"?  Her agency then was Arnold Worldwide, and the most talented creative on the account was Lance Jensen, who went on to found Modernista. -Jim Burt


FROM THE SOURCE headlines from the latest press releases


BMW Manufacturing Co., has manufactured its one millionth car, 12 years after the first car rolled off the production line. The millionth vehicle, which came off the line on February 28, 2006, is a Z4 M Roadster in Interlagos Blue with a Champagne Leather individual interior, custom Ash-Walnut wood trim, 18-inch alloy wheels, and an engine that takes the vehicle from 0-60 mph in 4.9 seconds. Due to its historical significance to BMW and the South Carolina factory, the roadster will remain at the factory in the Zentrum museum as part of the BMW Mobile Tradition Collection.

Name Symbol Last Change
Autobytel, Inc. ABTL 4.48 +0.05 (+1.13%)
Autoliv Inc. ALV 53.24 -0.01 (-0.02%)
AutoNation Inc. AN 21.13 +0.22 (+1.05%)
ArvinMeritor Inc. ARM 14.51 -0.14 (-0.96%)
American Axle & Mfr. Holdings Inc. AXL 15.50 +0.08 (+0.52%)
Ballard Power Systems Inc. BLDP 6.56 +0.10 (+1.55%)
BorgWarner Inc. BWA 54.98 -0.38 (-0.69%)
Cummins Inc. CMI 108.58 +0.48 (+0.44%)
Dana Corporation DCN 0.76 -0.38 (-36.54%)
DaimlerChrysler AG (ADR) DCX 54.40 -1.26 (-2.26%)
Dura Automotive Systems DRRA 2.13 -0.01 (-0.47%)
Eaton Corporation ETN 70.32 -0.13 (-0.18%)
Ford Motor Company F 7.57 -0.09 (-1.17%)
General Motors Corporation GM 19.21 -0.20 (-1.03%)
Gentex Corporation GNTX 16.41 -0.08 (-0.49%)
Goodyear Tire & Rubber GT 13.42 -0.66 (-4.69%)
Honda Motor Co. Ltd. (ADR) HMC 28.96 -0.51 (-1.73%)
Johnson Controls Inc. JCI 70.80 +0.13 (+0.18%)
Lear Corporation LEA 18.86 +0.25 (+1.34%)
Magna International Inc. MGA 73.99 +0.12 (+0.16%)
Motorola Inc. MOT 21.98 -0.21 (-0.95%)
Nissan Motor Co. Ltd. (ADR) NSANY 23.13 +0.04 (+0.17%)
Sonic Automotive Inc. SAH 26.65 +0.05 (+0.19%)
Siemens AG SI 91.00 -0.90 (-0.98%)
Sirius Satellite Radio SIRI 5.01 -0.07 (-1.38%)
Toyota Motor Corporation (ADR) TM 105.72 -1.11 (-1.04%)
TRW Automotive Holdings TRW 24.78 -0.32 (-1.27%)
Tower Automotive Inc. TWRAQ.PK 0.06 0.00 (0.00%)
United Auto Group Inc. UAG 43.64 -0.21 (-0.48%)
Visteon Corporation VC 4.32 +0.04 (+0.93%)
XM Satellite Radio Hold. XMSR 21.53 -0.37 (-1.69%)
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