Traffic deaths rose slightly last year, to the highest levels in 11 years, according to the Department of Transportation and the National Highway Traffic Safety Administration. In nearly 3 trillion miles traveled, some 42,116 Americans died as a result of car crashes, slightly more than 2000’s 41,945 deaths. About 60 percent of those killed were not wearing seat belts. The numbers were the highest since 1990; however, traffic injuries were down by nearly 5 percent.
FORD, BALLARD SHOW OFF FUEL-CELL GENERATOR
Ford and Ballard Power Systems on Wednesday showed a combustion-powered hydrogen generator that could make fuel cells reality at the end of the decade. The generator, powered by a Ford 6.8-liter V-10 engine, will go into production later this year. Power utilities and other like companies will be able to use the powerplant to generate electricity during peak periods. Ford is a part owner in Ballard, along with DaimlerChrysler.
Detroit Showing Green Bruises by Joseph Szczesny (8/5/2002)
VW ENDS CABRIO IN U.S.
Volkswagen AG said it will stop selling its Cabrio model in the U.S., replacing it with the 2003 New Beetle convertible to be introduced at the North American International Auto Show in January. The current Cabrio is built off the Golf III, not the Golf IV that is sold today, which accounts for why the Cabrio has been VW's worst-quality vehicle. The Cabrio, which retails for between $19,600 and $22,300, was introduced in 1979 as the Volkswagen Rabbit Convertible. The company said more than 223,000 Cabrios have been sold in the U.S. The Cabrio will still be available in Europe, the spokesman said. –Jim Burt
Spy Shots: ’03 VW Beetle Conv. by Brenda Priddy (7/15/2002)
SPECIAL REPORT: TRAVERSE CITY by the TCC Team
In the film industry, they’d call it a “bankable cast,” a selection of superstars guaranteed to pack ‘em in at the box office. That was certainly the case at the Management Briefing Seminars on Wednesday when the morning session brought together Ford Chairman Bill Ford, General Motors Vice Chairman Robert A. Lutz, Chrysler Group CEO Dieter Zetsche and Honda Motor Co. President Hiroyuki Yoshino. The assemblage took on a wide range of topics, both during the joint session and in a series of luncheons and interviews later in the day. Here’s what they offered up:
2002 Volkswagen Cabrio
WHO IS WRITING THE MUSIC?
“Fun” is part of the theme for this year’s Management Briefing Seminar. But while it may be cool to build cars, do Americans enjoy them the way they used to? It may be possible that “the love affair people have had with the automobile has grown stale,” said Ford Chairman Bill Ford, “and some say it is even dying.” But in his opening comments, Ford raised an even more serious concern: “In California, they used to write songs about the car. Now they write regulations.” —TCC Team
HONDA THINKS LOCAL, ACTS GLOBAL
It’s been 20 years since Honda opened up its first U.S. assembly plant in Marysville, Ohio, and since then, the carmaker has created a global network of design, engineering and manufacturing facilities, with a total of 110 plants in 30 countries. Some of the newest are going into Asia, which Honda Chairman Yoshino believes will account for half of his company’s new customers over the next three years. Honda’s approach has been to give regional managers a high degree of autonomy, said Yoshino, noting, “We do not have strong centralized control of our localized operations.” Perhaps not, but the various regions are being integrated, increasingly, into a global network meant to enhance Honda’s already flexible manufacturing system. The strategy is aimed at “creating a pipeline in which anything can be exchanged, even people.” A new transmission plant in the Philippines will eventually ship 30 percent of its production to Europe. Meanwhile, Honda’s British operations produce the new Civic Si sport coupe recently launched in the U.S. Because of the unique nature of many of the products Honda sells in the U.S., its plants generally produce vehicles specifically for North America, but that could change, Yoshino suggested. In an interview with TheCarConnection, he said he expects there will be more models selling in lower volumes. And that will reduce the unusually hefty economies of scale Honda enjoys at its U.S. plants. As a result, it may become necessary to expand on the limited number of exports from facilities such as the one in Marysville, creating a truly two-way flow of vehicles to and from the United States. —TCC Team
2003 Honda Accord EX by John Pearley Huffman (8/5/2002)
HONDA HITTING DIESEL MARKET
It prefers to promote itself as an engine manufacturer—engines it uses in motorcycles, generators and, of course, automobiles. And Honda is getting ready to add a new type of powertrain to its lineup. Chairman Yoshino told TheCarConnection Wednesday that his company is in the final stages of developing its first-ever diesel engine line. The plan, he revealed, is to “introduce it in 2004 in Europe.” Yoshino acknowledged he’s not sure just how big a demand Honda will tap into, but currently, diesels are being delivered in nearly half the vehicles sold on the continent. Whether Honda will offer the high-mileage powertrains in other markets also remains unclear due to local emissions standards and regional preferences. Like other engine makers, Yoshino said the challenge will be to come up with the technology that can make Honda’s new diesels attractive -- and legal. —TCC Team
2002 Volkswagen Cabrio
PRODUCT PROLIFERATION TOO COSTLY?
Look for a sharp increase in the number of models on the drawing boards at Honda, which will translate into small volumes for individual model lines, Honda Motor Co. President Hiroyuki Yoshino told TCC Wednesday. That echoes a report earlier in the week in TheCarConnection. But not everyone is certain product proliferation will continue unchecked in the U.S., much as it has in Europe and Japan. “Been there, done that,” asserted GM Vice Chairman Bob Lutz. It is “natural,” he said, that some of the larger imports, like Honda and Toyota, will continue expanding into more of the product segments they’ve so far missed. But it’s also a reality of the market that no carmaker, even GM, can dismiss the high cost of marketing. Add too many products, even with a bank account like Toyota’s and you will simply have to orphan some of your products. And without solid advertising support, such products will quickly disappear from the market, Lutz cautioned. —TCC Team
THE NEXT BIG THING IS THE SAME OLD THING
Forget “the next big thing,” at least when it comes to automotive retailing, contended GM Vice Chairman Bob Lutz. Despite plenty of hype over the last two decades, traditional dealers continue to dominate and are largely doing business the same way as always. “The automobile dealer is chameleon-like in his ability to adapt,” Lutz said during a Traverse City luncheon. The latest false start was the Internet, which many proponents promised would prove the most cost-effective way to sell cars. Instead of being a paradigm shift, it was “just another enabling tool.” Insisting the current retail system is here to stay, Lutz said it might “change when we can transmit physical matter over the airwaves.” Beam me down a car, Scotty? —TCC Team
2002 Volkswagen Cabrio
LUTZ: NO PLANS TO LEAVE
He’s not only back, but it looks like Bob Lutz isn’t going anywhere anytime soon. General Motors’ Vice Chairman and “product czar” is just wrapping up his first year on the job, and there’s no question he’s had a dynamic impact on the long-troubled automaker. Even skeptics admit GM is moving faster and more creatively these days, a fact underscored by last month’s 24-percent sales increase. Lutz says his job will be shifting a bit as he starts to focus more of his attention on GM’s European operations in the months to come. But the question most are asking is how long Lutz will be around. When he joined GM last year, he signed a three-year contract. But “it was never to be three and out,” the surprisingly youthful 70-year- old revealed over lunch in Traverse City. The former Marine says he’d be willing to stick around for “an indefinite period” -- that is, if GM CEO Rick Wagoner wants him. And why not? Lutz has not only changed the way GM designs and builds cars and trucks, but he’s having a radical and very positive impact on the way the world views the company...including consumers. Oh, and if you’re wondering how many more good years he has in him, Lutz’s father set a good example. A Swiss banker, Lutz senior kept working until he was well into his 90s. —TCC Team
GM Re-Develops Once More by Gary Witzenburg (7/1/2002)
GM SAYS DEVELOPMENT WILL BOOST SHARE
General Motors expects its share of the retail new car market to reach 29 percent this year or nearly a full point higher than it was a year ago, GM Vice Chairman Robert Lutz told reporters after a speech at the annual management briefing seminars in Traverse City. "You no longer hear the continuous drumbeat," describing GM as cumbersome and bureaucratic, Lutz noted.
"Our manufacturing system is very nearly world class," he added, but "Quality is very clearly a problem.” Warranty costs are still too high and the company could still do more to drive down administrative costs, Lutz said. "We've never claimed to be as good as we want to get," Lutz added.
The company's product development effort is now drawing out the innate creativity and talent of GM's designers and engineers, said Lutz. The favorable developments are also having an impact on the public's perception of the automaker.
Other companies, notably Volkswagen and Chrysler, have succeeded in turning around their image in a relatively short time and GM can do the same thing, he said.
Lutz also said the steady appreciation of the U.S. dollar during the late 1990s made the Japanese and European automakers look exceptionally strong. The value of the dollar is starting to drop and the shift will boost GM's chances both to price aggressively against foreign competition and to export image vehicles such as the Cadillac CTS.
"The days are long past where GM was so arrogant that we thought we knew everything, invented everything and were better at everything than everybody else in the world. We're ready to learn," said Lutz.
"In my current organization, we're knee- deep in talent and creativity and it's being unleashed and encouraged. Not just by me but by all of our senior management," Lutz added. —Joe Szczesny
2002 Volkswagen Cabrio
LUTZ DISMISSES LONG WARRANTIES
Lutz also said Wednesday that GM analyzed whether it should follow Chrysler’s 7-year/70,000-mile powertrain warranty and decided it had more downside for the automaker than upside. “We analyzed it and people actually associate a long warranty with problems they perceive you have,” said Lutz. GM surveyed consumers about how they would react if Toyota put a long warranty on its vehicles, and the results showed consumers believed it was a sign of quality problems at Toyota. Suzuki, a GM affiliate, launched an even longer, more comprehensive warranty than Chrysler last week. “It’s right for Suzuki, because they are competing directly with the Koreans who offer a long warranty,” said Lutz. “It might make a difference for those sitting right on the fence between a full-size Ram pickup and a Silverado or H2, but the cost of doing it far outweighs the benefit that you might get from that relatively small number of buyers,” said Lutz who said GM’s warranty costs were still much higher than the company would like to see. —Jim Burt
SUBARU VALUABLE, BUT NOT EASY TO INTEGRATE
Lutz said GM has not yet found a vehicle it could co-develop with its Fuji Heavy Industries affiliate because the parent company of Subaru is committed to its horizontally opposed engine architecture, which GM can’t adapt. “They feel the horizontally opposed engine is very important to Subaru’s brand equity, and they don’t want to deviate from it,” said Lutz. And GM doesn’t want to get into the situation of simply taking a horizontally opposed engine and calling it a Chevrolet or Pontiac “because we’d be accused of just rebadging a Subaru.” GM owns 25 percent of Fuji. Fuji Heavy Industries has taken an Opel Zafira microvan built in Thailand and sells it as a Subaru in Asia, but that is the extent of the material cooperation so far. —Jim Burt
2002 Volkswagen Cabrio
LUTZ ON FIAT
"It would be a complete waste of time for me to talk about Fiat," said Lutz. "We just don't know. I don't think Fiat knows what they will do...we are in the area of nobody knows." GM owns 20 percent of Fiat's struggling automotive unit, and the Italian automaker can exercise an option to force GM to buy the remainder of the company. After GM inked the deal in 2000, the company talked of selling Alfa Romeos in the U.S. through Saab or Cadillac dealers. "They have their hands full just turning the thing around," said Lutz.
CHRYSLER CONTRIBUTING TO KNOWLEDGE BASE
The Chrysler Group isn't just borrowing technology from the other parts of DaimlerChrysler. "Our Chrysler Group engineers and scientists are making additional technological contributions that will find application throughout DaimlerChrysler. In fact, Chrysler is already the center of competence in cost-efficient emissions controls, occupancy sensors, computer-aided engineering and other new technologies that will soon flow to the product lines of our overseas partners," CEO Dieter Zetsche said in an appearance at the auto industry's annual management briefing in Traverse City. Zetsche also said the Chrysler Group is aware of its weakness on the car side of the business. In recent years, thanks in part to the steady sales of Jeeps and minivans, nearly 70 percent of the Chrysler Group's sales have been in pickups, SUVS and vans. Two-thirds of Chrysler's new products in the next three years will be car-based, added Zetsche, who said the shift is simply good business. "Just as our company created and popularized the segment-busting minivan for one generation, we are now creating new segment-busting vehicles for another," said Zetsche. The product offensive, highlighted by the new Pacifica and Crossfire, plays to the Chrysler Group's strengths in design and product creation, added Zetsche, who said his own sons are pushing hard for him to give the final go- ahead on the M80 project, while his daughter wants to drive the Razor concept vehicle Chrysler showed off at the North American International Auto Show early this year.—Joe Szczesny
On Chrysler's Daimler Gambit by Jim Burt (7/29/2002)
2002 Volkswagen Cabrio
FORD PUSHING DIESELS AGAIN
Ford Motor CEO Bill Ford said Wednesday he would like to make diesel engines, historically unpopular in the U.S., part of his quest to improve the fuel economy of his company’s vehicles, especially trucks and sport-utes. Already Ford has announced it is developing a Focus diesel for the U.S. Ford insiders also say a V-6 diesel for the F-Series light-duty pickup, which could also be used in SUVs, is in the works for 2005.
“Diesels should be part of the solution of improving fuel economy,” said Ford, who said he is not planning to join a lawsuit against the State of California which recently passed a law requiring carmakers to lower carbon dioxide emissions beginning in 2009, thereby potentially trumping Federal regulations.
“We want to lower the temperature a little bit and lower the rhetoric in California and work toward trying to get a reasonable solution," he told reporters at an auto-industry conference here. Mr. Ford said he would like to see automakers, regulators and environmentalists work together as they did in Europe to construct a voluntary plan by which carmakers are committed to reducing global-warming emissions.
“Here you have people lobbing bombs at each other and there isn’t the collaborative process we saw in Europe,” said Ford.
Mr. Ford has been intentionally vague about meeting the 25-percent improvement in its SUV fuel economy set forth by Jacques Nasser in 2000. “I don’t want to get into the details of the 25 percent,” said Ford.
Advancing clean diesels, even in light trucks if not SUVs by 2005, could give Ford public relations cover if the target can’t be reached. Ford launches a hybrid Escape in 2004, but has cancelled a hybrid program for the Explorer. Cancelling the Ford Excursion after the 2003 model year will help as well.
2002 Volkswagen Cabrio
On other issues, Mr. Ford said:
-The Ford board of directors will decide at their September meeting if it will follow General Motors in accounting for stock options granted to executives as an expense.
-Ford is not disappointed with the modest sales gain it posted in July after nearly matching GM’s zero-percent financing offers. “We didn’t match GM dollar for dollar, and we feel we got good return for what we did. But stay tuned for something new on the marketing front,” said Ford.
-“We wouldn’t oppose a rational gasoline tax [as an incentive for consumers to buy more fuel-efficient vehicles], but the political reality is the chances of that are zero.” —Jim Burt
FROM THE SOURCE
Mercedes-Benz USA (MBUSA) is joining forces with Saks Fifth Avenue to raise awareness and funds for the Council of Fashion Designers Association's (CFDA) Fashion Targets Breast Cancer (FTBC) charitable initiative, Sept. 18-21. This year, Mercedes-Benz USA is underwriting the FTBC events held at all 61 Saks Fifth Avenue stores in the U.S., including, New York City; Atlanta; Boston; Houston; Bal Harbor, FL; Chicago; Beverly Hills; Dallas; Short Hills, N.J.; and San Francisco during the four-day shopping weekend. MBUSA's sponsorship also includes a unique offering of 61 special-edition versions of the all-new 2003 Mercedes-Benz CLK500 Coupes that are being built for Saks Fifth Avenue for the FTBC program. The CLK500 Coupes will be integrated into the four-day shopping event. MBUSA will make a donation to FTBC for every special-edition CLK500 Coupe sold.
|AMER AXLE & MANU||AXL||25.39||+0.64|
|BALLARD PWR SYS||BLDP||12.24||-0.44|
|FORD MOTOR CO||F||12.28||+0.12|
|HONDA MOTOR CO||HMC||20.77||+0.62|
|UNIT AUTO GRP||UAG||14.59||+0.14|