Daily Edition: Mar. 9, 2006

March 8, 2006

Nissan's Connelly Retiring; Bradshaw Taking Company toTenn.

Confirming a report that first appeared on TheCarConnection.com last month, Nissan's top American executive, Jed Connelly, has confirmed he will leave the automaker's U.S. marketing arm before it begins a much-debated move to Nashville this summer. The 60-year-old Connelly, who originally joined Nissan in 1989, insisted the move wasn't the reason for his planned July 1 departure, though it proved a good point to retire. "Sometimes you put the new team in place and get out of the way," explained Connelly, senior vice president of sales and marketing for Nissan North America, during a Wednesday conference call with reporters. "The physical transition provided the perfect timing." That transition will place Brad Bradshaw, now NNA's vice president of sales and marketing, at the helm of the relocated company.

Last year, Carlos Ghosn, CEO of both Nissan Motor Co., and its French partner Renault, ordered the company to pull up stakes from the Los Angeles and move to Nashville, not far from Nissan's Smyrna, Tenn., assembly plant. The decision is expected to yield significant cost savings, though many observers believe it could also result in some disruption for Nissan. During the Wednesday call, company officials reported that 47 of 60 senior executives have agreed to relocate, but only about half of the rest of NNA's 1300-member workforce have accepted transfers. The impact will be especially hard-felt by the financial side of the company, noted Connelly. Even so, he insisted, "I think we've got everything we could think of smoothly in place…(and) that'll ride us through the rough water." The relocation is expected to take until August 1. Meanwhile, Nissan officials reported that so far, they've been unable to line up a buyer for the Southern California headquarters they soon plan to abandon. -TCC Team

Ghosn Puts His Stamp on Renault by Joseph Szczesny (2/20/2006)
New plan includes major move upmarket.

 

 

Dana Bankruptcy Underscores Auto Weakness

The bankruptcy of Dana Corp. is the fourth major failure in the auto industry in the past 13 months, and it has sent more shockwaves through a sector that is in "chronic crisis," according to industry analysis from Euler Hermes ACI, which specializes in insuring credit lines. Dana's bankruptcy follows the bankruptcies of Tower Inc., Collins & Aikman and Delphi Corp. With $9 billion in annual revenue, Dana Corp.'s bankruptcy took a lot of investors by surprise, said Tony Clary, Euler Hermes vice president and automotive Risk Industry Manager.

The Dana insolvency again confirms that the auto industry is one of the most challenged in the U.S. marketplace, he added. "Six months ago Dana was still an investment-grade company, and just two months ago they released information showing $42 million net income, which was considered good in a weak industry. This just goes to show how quickly events can turn within a troubled sector."

Dan North, Euler Hermes chief economist, said the automotive industry continues to be hurt by the sector's weakened pricing power. "A key issue with the automotive industry is that unit labor costs are continuing to rise, but automakers cannot raise prices because of increased competition," said North. "That means profit margins are being squeezed even tighter than in the past, which is hurting everyone down the supply chain." -Joe Szczesny

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


 

Chrysler Invests $1B in Toluca

The Chrysler Group is planning to spend $1 billion on upgrades at its assembly plant in Toluca, Mexico, the home of the PT Cruiser. Part of the money will be spent on making the Toluca plant more flexible so it can build more derivative models on the same assembly line: the improvements will include a new body shop and additional robotics, DaimlerChrysler officials said. The investment also includes the creation of two supplier parks that will be laid out for just-in-time operations and will bring modular assembly systems such as headliners, cockpits, front-end modules, and front and rear suspensions to the assembly site, which reached a major milestone recently when it produced the one millionth PT Cruiser.
Eric Ridenour, Chrysler Group chief operating officer, said "Our Mexican Manufacturing Operations have earned this investment by embracing flexible work force processes," he added. "The Chrysler PT Cruiser set new world standards with its unique styling and interior roominess. The bottom line is that consumers are demanding more of our remarkable products, and our Toluca Assembly Plant employees played a key role in the success of this vehicle," he said. -Joe Szczesny

2005: The Sales Year in Review by Mike Davis (1/11/2006)
Some surprises when you dig behind the brand names.

 

AutoNation Buyback Follows Q4 Dip

The nation's top-volume auto retailer, AutoNation, Inc., announced plans to buy back up to 50 million shares of its stock - an unusually sizable offer that follows a fourth quarter in which its vehicle sales and net income both declined sharply. The Fort Lauderdale, Florida-based megadealer said that it would pay $23 a share and help defray the cost by issuing up to $900 million in new bonds and assuming at least $300 million in new bank debt.

In recent filings with the Securities and Exchange Commission, AutoNation said that its cash flow has weakened due to sluggish new-vehicle sales in the latter part of 2005. Reduced sales at its General Motors and Ford Motor dealerships were singled out by chairman and CEO Mike Jackson, together with the impact on its 65 Florida stores of Hurricane Wilma last fall.

AutoNation's new-vehicle sales declined 10.9 percent in the fourth quarter from a year earlier, to 86,554 units. Revenues fell to nearly $4.5 billion from $4.8 billion, and net income slid from $116 million to $80 million. The Detroit Big Three accounted for 37.9 percent of AutoNation's fourth quarter revenues, compared to 43.8 percent in the same quarter last year. Ford's share of the mix fell to 16.6 percent from 18.0 percent; GM's to 13.2 percent from 17.1 percent; and Chrysler Group's to 8.1 percent from 8.7 percent. Gains in this category were shown by the premium luxury brands, to 22.3 percent from 18.9 percent and imports, to 39.8 percent from 37.3 percent.

Jackson said that the stock buyback will allow the 280-store dealership group to "deliver stockholder value while retaining financial flexibility to take advantage of future opportunities." AutoNation project a spike in future earnings of 8 to 10 cents a share as a result of the buyback. Net income last year for the publicly-owned company rose to $1.85 a share, from $1.59 in 2004.-Mac Gordon




  

TCConfidential: Makeup a Max Factor in Speeding Ticket

Maybe you see it every day on the 405, I-95, or the Perimeter - distracted drivers applying makeup on the way to work, or perhaps on the way to the cabaret show. London's Daily Mail reports that it's happening in the U.K. too, and one woman has been caught by the city's network of speeding cameras. The Welsh woman, 22-year-old Donna Maddock, was caught applying her makeup at 32 mph and was fined a total of 255 pounds (nearly $450) and was given six points on her driver's license for wielding a compact mirror and brush while driving on Welsh highways. A spokesman for the Royal Society for the Prevention of Accidents (how's that for bloated government?), Roger Vincent, told the Daily Mail that "nowadays, there are enough distractions without motorists literally making up their own."

READ the Daily Mail account

More in TCConfidential




 

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Garmin International Inc., a unit of Garmin Ltd. (Nasdaq: GRMN), today announced Garmin Mobile(TM) 20 - an automotive navigation system that delivers Garmin's voice-prompted, turn-by-turn directions using Bluetooth wireless technology on Nokia, Windows Mobile and Treo 650 Smartphones. Garmin Mobile 20 provides both data connectivity as well as hands-free capability and is packaged with the GPS 20SM(TM), a new mobile phone mount with a built-in, highly sensitive GPS receiver and Bluetooth-enabled speaker and microphone. Garmin Mobile 20 will also be the first Garmin product to use the Garmin Online(TM) wireless data services that includes real-time traffic, gas prices, safety cameras, weather information, and other location-relevant content. Garmin Mobile 20 was announced at CeBIT, Europe's premier electronics trade show in Hannover, Germany, from March 9-15, 2006.




  

Name Symbol Last Change
Autobytel, Inc. ABTL 4.04 -0.13 (-3.12%)
Autoliv Inc. ALV 52.76 +0.56 (+1.07%)
AutoNation Inc. AN 21.91 -0.35 (-1.57%)
ArvinMeritor Inc. ARM 14.54 +0.18 (+1.25%)
American Axle & Mfr. Holdings Inc. AXL 15.53 +0.19 (+1.24%)
Ballard Power Systems Inc. BLDP 5.90 -0.26 (-4.22%)
BorgWarner Inc. BWA 54.95 +0.03 (+0.05%)
Cummins Inc. CMI 104.64 -0.76 (-0.72%)
Dana Corporation DCN 0.66 0.00 (0.00%)
DaimlerChrysler AG (ADR) DCX 54.32 -0.08 (-0.15%)
Dura Automotive Systems DRRA 2.03 -0.07 (-3.33%)
Eaton Corporation ETN 69.05 -0.36 (-0.52%)
Ford Motor Company F 7.55 -0.10 (-1.31%)
General Motors Corporation GM 20.42 +0.13 (+0.64%)
Gentex Corporation GNTX 16.36 +0.06 (+0.37%)
Goodyear Tire & Rubber GT 13.07 +0.13 (+1.00%)
Honda Motor Co. Ltd. (ADR) HMC 29.32 +0.14 (+0.48%)
Johnson Controls Inc. JCI 72.00 -0.40 (-0.55%)
Lear Corporation LEA 17.88 -0.23 (-1.27%)
Magna International Inc. MGA 72.51 -0.57 (-0.78%)
Motorola Inc. MOT 21.28 -0.41 (-1.89%)
Nissan Motor Co. Ltd. (ADR) NSANY 22.85 -0.15 (-0.65%)
Sonic Automotive Inc. SAH 26.66 +0.14 (+0.53%)
Siemens AG SI 89.20 -0.09 (-0.10%)
Sirius Satellite Radio SIRI 4.77 -0.15 (-3.05%)
Toyota Motor Corporation (ADR) TM 105.95 +0.74 (+0.70%)
TRW Automotive Holdings TRW 24.03 +0.65 (+2.78%)
Tower Automotive Inc. TWRAQ.PK 0.044 -0.003 (-6.38%)
United Auto Group Inc. UAG 43.27 -0.07 (-0.16%)
Visteon Corporation VC 4.41 -0.15 (-3.29%)
XM Satellite Radio Hold. XMSR 20.61 -0.74 (-3.47%)
2019
The Car Connection
See the winners »
2019
The Car Connection
Commenting is closed for this article
 
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from the site. I can withdraw my consent at any time by unsubscribing.
Thank you! Please check your email for confirmation.