Toyota dealership employees will take it all off for charity

Employees at an Illinois dealership plan to raise money for charity with an unusual gambit.

The employees at Belleville Toyota in Belleville, Illinois, like to consider themselves one big family. And as a family, they do things in bunches. The dealership's employees have all agreed to do something outrageous in support of four local charities, according to a report in the Belleville Intelligencer.

Sixteen employees - both male and female - will say goodbye to their hair in a ceremony at the dealership. Even the dealership owner said he decided to shave his head after two close relatives died of cancer.

"I was adamant I was going to do it to show my support for people with cancer who lose their hair to chemotherapy. And I was taken aback when everyone here decided to join me," dealer/owner George Farlow said.

The group hopes to raise more than $10,000 for the local cancer society, a hospice, the lung association and the diabetes foundation.

Members of the public will drop into the dealership and make a financial pledge to the charity of their choice before the cut-a-thon.

Isuzu to exit U.S. car market

Isuzu exec: Competition hurt us

Financial problems in the early part of this decade and the intensely competitive U.S. automobile market led to the downfall of Isuzu's passenger vehicle business in North America, according to an Associated Press report.

Isuzu Motors, famous for developing one of the first midsize sport utility vehicles and an ad campaign that featured a salesman telling lies, announced that it will stop selling new pickups and SUVs in North America on Jan. 31, 2009.

The Japanese company had financial problems and restructured to become profitable again earlier this decade, but in doing so had to reduce investments and expenses, said Terry Maloney, president and chief operating officer of Isuzu Motors America Inc.

Isuzu's U.S. sales peaked in 1986 at 123,000 vehicles, mainly on sales of the Trooper SUV, but the company sold only 7,098 pickups and SUVs in 2007.

Isuzu said in a statement that it will back its products and dealers for years to come, honoring all product warranties and roadside assistance programs. Purchase an extended warranty for Isuzu through SmartAutowarranty.com
.

Mr. Maloney said Isuzu will remain in the U.S. with its commercial vehicles and diesel engine technology.

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Rick Case opens first smart dealership

Rick Case, one of South Florida’s most recognized automotive and motorcycle groups and smart USA dealer, opened the first smart car dealership in the United States - Rick Case’s Smart Center Weston – January 19. The smart cars arrived early that morning and the first owner received their car that afternoon.


“I am so excited that Smart Center Weston is the first smart dealership to open in the country,” said Rick Case, smart USA dealer. “Smart vehicles have been around in Europe for many years, and it’s a privilege to be the first to introduce these fuel efficient cars to the United States market.”

James McDonnell was the proud owner of the first ever smart car in the United States. smart vehicles are known not only for their high gas mileage but also for their safety. Smart fortwos also allow ample room within the vehicle – during the opening weekend, a 6’5”, 350 pound customer sat comfortably in the car with a passenger. Forty smart fortwos were delivered to Rick Case’s Smart Center Weston, kicking off what is sure to be the new craze in the automotive industry.

More than 500 people visited Smart Center Weston during its opening weekend, including two individuals who flew in from Long Island, NY specifically to test drive the smart fortwo. Of those 500 curious individuals, 125 people took the unique vehicle for a test drive.

Rick Case was given the exclusive rights to open smart dealerships in Broward County, one of only 68 United States dealers to sell the fuel efficient vehicles. The brand news smart dealership to open in the United States, Smart Center Weston, is located on I-75 next to the Cleveland Clinic and just North of the Rick Case Hyundai dealership in Weston at 3500 Weston Road. Three models of the smart fortwo, a two-seater 8.8 ft long vehicle available in either coupe or convertible, will be available. The entry-level pure coupe starts at $11,590 MSRP. The passion coupe starts at $13,590 MSRP and the passion cabrio starts at $ 16,590 MSRP.

Rita and Rick Case were chosen to open the new dealerships because of their friendly customer handling process and unique customer benefits such as rewards, free car washes, discount gas, in dealership Broward County Clerk of the Court office with wedding chapel, South Florida’s largest collision center and express service center servicing all makes and models.

Smart vehicles, which have been manufactured by Mercedes Benz for over 10 years, are known for their high gas mileage (more than 40 miles per gallon), compactness (two smart cars can fit in one traditional parking spot), performance (top speed is 90 miles-per-hour) and safety (reinforced steel safety cage like those on NASCAR race cars). Characterized as a “fun” and economical car, smart vehicles can be found on the streets of 36 countries including England, France, Italy, Spain and Canada. Smart fortwos are affordable as well as a solution to current driving challenges.

The cars are available in six body panel colors including: deep black, silver metallic, red metallic, light yellow, crystal white and blue metallic with a choice of black or silver tridion cell accents. Additionally, the smart fortwo offers five interior color choices including: black leather, design beige, design black, plain grey and design red.

Chrysler offers buyouts to 13,000 in Detroit area

January 29, 2008

BY TIM HIGGINS

FREE PRESS BUSINESS WRITER

Chrysler LLC offered buyout and early retirement packages Monday to about 13,000 Detroit-area hourly UAW members as the automaker works to cut its overall hourly workforce by as many as 10,000 people.

Monday's effort aims primarily to reduce workers at support facilities that are seeing the domino effect of recent production cuts at the automaker's assembly plants.

Packages offering lump-sum payments as high as $100,000 were offered to UAW workers at the Sterling Heights and Warren stamping plants, the Trenton and Mack Avenue engine plants, Conner Avenue Assembly Plant, Detroit Axle, Mt. Elliott Tool and Die, and the Sterling Heights Vehicle Test Center, Chrysler spokeswoman Michele Tinson said.

In addition, she said, the 1,140-person second shift at Sterling Heights Assembly Plant was offered packages, and 770 hourly workers at Warren Truck Plant, which is idle this week, are expected to be offered buyouts, too.

Also, 110 salaried UAW members at the company's Auburn Hills technology center and elsewhere will be able to take early retirement effective Thursday.

About 500 workers at Jefferson North Assembly Plant already had a chance to show interest in a buyout package this month, Tinson said.

Outside the Detroit area, workers at assembly plants in Belvidere, Ill., St. Louis and Toledo already faced deadlines to express interest in buyout packages that were offered.

Chrysler had said it wants to eliminate about 900 jobs at the Jefferson facility in Detroit, 780 jobs at the Toledo North plant and 1,096 jobs at the Belvidere factory.

"That seems to be on plan," Aaron Bragman, an analyst at Global Insight, said of Monday's announcement. "This is reducing headcount so they can get costs down."

Of the packages offered Monday, an estimated 4,600 are early-retirement eligible. The early-retirement package includes a lump sum of $70,000. The $100,000 buyout package is for eligible employees with at least one year of service. The deadline is Feb. 18.

Chrysler negotiated the packages with the UAW, which did not want to make a comment Monday. Tinson said the job cuts are related to volume reductions.

Monday's offers seemed to focus on facilities that do so-called noncore work. Under the new UAW contracts with Chrysler, non-assembly workers can be replaced by new hires whose pay and benefits cost half as much as those for current assembly workers. But Chrysler has indicated that the current cuts are solely related to cutting capacity to meet falling consumer demand.

Chrysler is not alone in Detroit in its efforts to reduce its workforce. Ford Motor Co. has started rolling out buyout offers. GM has only begun the first phase of its program and aims to offer packages to the rest of its UAW workforce next month.

Some analysts wonder whether Chrysler will have a greater challenge getting workers to take buyouts because its workforce is younger than GM's.

The average age of Chrysler's UAW hourly workers is 46 with 30% of workforce eligible for retirement within five years, according to research by Sean McAlinden, vice president of research at the Center for Automotive Research in Ann Arbor.

Meanwhile, 64% of GM's workforce is within five years of being eligible to retire; the workforce's average age is 49.

"They're young and looking around going, 'There's nothing else in this market. I can't necessarily leave because the housing market is so awful,' " Bragman said of Chrysler workers. "It is still a difficult decision to actually leave the company -- $100,000 notwithstanding."

The UAW told its members in October that Chrysler plans to close the Conner Avenue Assembly Plant in Detroit some time over the next four years. The Detroit Axle plant is slated to close after the new Marysville axle facility comes online; the union has said UAW members will have the right to transfer to the new facility.

In November, Chrysler announced plans to eliminate as many as 10,000 hourly jobs on top of the 11,000 hourly jobs planned for elimination as part of the February 2007 turnaround plan.

G.M. sees improved outlook, but says economy could hurt

GM Details Its Turnaround Progress and Outlines 2008 Priorities

Next phase of special attrition program to be launched in February U.S. labor agreement to yield additional savings of $5 billion by 2011 New automotive structural cost target of 23% of revenue by 2012 GM expects continued growth in emerging markets

DETROIT, Jan. 17 /PRNewswire/ -- General Motors Corp. (NYSE: GM) Chairman and CEO Rick Wagoner and Vice Chairman and CFO Fritz Henderson spoke to automotive analysts at a GM conference today, giving detailed reviews of the company's turnaround progress, outlining the automaker's priorities for the year and providing a preview of improvement opportunities for 2010 and beyond.

"We're delivering on the turnaround plan we established in 2005, and have exceeded expectations on virtually all counts," Wagoner said. "We've set a strong foundation that we can truly build on. We're encouraged by our progress in revitalizing our product portfolio, strengthening our brands, reducing structural cost and growing the business globally. At the same time, it's clear that we'll face some challenging headwinds in 2008.

"To continue driving the company's transformation, we'll remain steadfast in our efforts to introduce great cars and trucks and new advanced propulsion technologies, take full advantage of growth markets around the world, and accelerate our efforts to reduce structural costs to even more competitive levels in North America," Wagoner added.

Turnaround Progress
Since introducing its North America turnaround plan in 2005, GM has delivered significant progress in its massive restructuring, including:

-- Product excellence -- Dramatically improved vehicle design and performance is gaining broad recognition, demonstrated by robust sales of recently launched vehicles and numerous industry awards, including 2008 North America Car of the Year for the Chevrolet Malibu, 2008 Motor Trend Car of the Year for the Cadillac CTS, and 2007 North America Car and Truck of the Year awards for the Saturn Aura and Chevrolet Silverado;

-- Revitalize the sales and marketing strategy -- The company has fundamentally changed its "go to market" approach, resulting in stronger brands, re-alignment of its brand distribution channels, stabilized retail market share, significant reductions in daily rental sales and higher average transaction prices;

-- Intensify the focus on cost and quality -- GM reduced annual structural cost in North America from 2005 to 2007 by $9 billion, driven by the 2005 hourly healthcare agreement, revisions to U.S. salaried healthcare and pension programs, capacity reduction actions, special attrition programs for 34,000 hourly employees, and efficiencies achieved in other activities. Significant improvements also continue to be made in vehicle quality, as measured by both internal and industry metrics;

-- Address healthcare/legacy cost burden -- Reflecting the impact of historical agreements with the United Auto Workers union (UAW) and several other key initiatives, GM anticipates that its spending on U.S. hourly and salaried pension and healthcare will be reduced from an average of $7 billion per year over the last 15 years, to approximately $1 billion per year beginning in 2010.

Despite continued pressures in the German market, GM has also made significant progress in its Europe (GME) operations, driven by strong new products, successful implementation of its multi-brand strategy, especially the rapid growth of the Chevrolet brand, which contributed to record GME unit sales of over 2 million in 2007. Rapid expansion in Russia and Eastern Europe, and further structural cost reductions have also contributed to the improvements.

GM's total automotive results have demonstrated strong progress since 2005, marked by significant improvements in both adjusted net income and adjusted operating cash flow through the first three quarters of 2007. GM continues to have strong liquidity, with 2007 year-end gross liquidity estimated to be more than $27 billion, up from $20.4 billion at year-end 2005.
2008 Outlook
Acknowledging headwinds facing the industry, including weak U.S. auto industry sales volumes, high fuel prices, high commodity and steel prices, and mounting regulatory requirements, Wagoner outlined the following focus areas for 2008 designed to continue the momentum and achieve improved financial results:

-- Continue to execute great products
-- Build strong brands and distribution channels
-- Execute additional cost reduction initiatives
-- Take full advantage of growth in emerging markets
-- Build GM's advanced propulsion leadership position
-- Maximize the benefits of running the business globally

For 2008, GM projects global industry volume to reach a record high of approximately 73 million units, up from about 71 million in 2007, with growth in Asia Pacific, Latin America, Africa and the Middle East and Europe. GM anticipates U.S. industry sales will likely be in the low 16-million range, reflecting continuing high fuel prices and sub-par consumer confidence. Despite industry pressures, GM expects to increase revenues in all of its regions, particularly in emerging markets.

Building on notable product successes including the Cadillac CTS, Chevrolet Malibu, GMC Acadia, Saturn Outlook and Buick Enclave in the U.S. and the Opel Corsa in Europe, GM will continue to introduce a host of new products including the Pontiac G8 and Chevrolet Traverse in the U.S. and Opel Insignia in Europe. Capital spending is projected to be up slightly from 2007 levels to about $8 billion in 2008.

On the sales and marketing front, GM will continue its efforts -- most clearly demonstrated in the recent launch of the Chevy Malibu in the U.S. -- to more effectively integrate product and brand marketing strategies. GM will accelerate the alignment of its seven U.S. brands into four distinct dealer channels: Chevrolet, Saturn, Buick/Pontiac/GMC and Cadillac/Hummer/SAAB. By doing this, the company expects to enhance dealer profitability and over time facilitate more highly differentiated products and brands.

With regard to cost competitiveness, GM has made major strides toward achieving its global target of reducing automotive structural costs to benchmark levels of 25% of revenue by 2010. Structural costs are already below 30 percent, compared to 34% in 2005, despite weaker than expected U.S. industry volumes. In light of the progress already made, the company fully expects structural costs as a percentage of revenue to be further reduced beyond 2010, with a target of 23% by 2012.

In support of those goals, the company plans to reduce annual U.S. labor costs by an additional estimated $5 billion by 2011.
A significant portion of those reductions will be driven by the implementation of the 2007 GM-UAW contract, including the independent healthcare VEBA scheduled to begin in 2010, and in the shorter term by taking full advantage of the workforce restructuring opportunities included in the contract, including a "non-core" wage and benefit structure which will result in the re-classification of a significant number of jobs over time.

To facilitate these changes, GM launched, in cooperation with the UAW, the first phase of a voluntary special attrition program for hourly workers in January 2008. This phase applies to those at select job banks, Service Parts Operations (SPO), and other key sites. Employees participating in this phase will begin to exit in March. GM announced today that Phase 2 of the program, under active discussion with the UAW, will be launched in February in all other plants. Participating employees will begin exiting in April. For both phases of the program, 46,000 existing employees are eligible for retirement.

During the conference, GM also reiterated its strategy to achieve manufacturing capacity utilization of 100 percent, or greater, in countries with higher labor costs. Based on current U.S. industry volume levels, additional capacity actions would be required in vehicle assembly, stamping and powertrain facilities. The company will continue to assess U.S. industry and product mix trends, and what potential actions may be required over the coming months.

GM will continue its aggressive plans to grow in emerging markets such as China, Brazil, Russia and India. To strengthen its position in China, where it was the first automaker to sell 1 million units in a single year, GM intends to continue to build its corporate reputation, expand its product portfolio with fuel-efficient products, drive full implementation of its multi-brand strategy, expand capacity, and develop our local supply base and technology capability.

At GMAC Financial Services, while its mortgage business faces continued challenges relating to weaknesses in the housing and credit markets, its auto financing business remains profitable and its insurance operations continue to perform well. GMAC expects Residential Capital, LLC (ResCap) to meet its year-end 2007 financial covenants, and GM believes GMAC remains adequately capitalized.

In addition, GMAC's liquidity position is at relatively high historical levels and GMAC expects to be profitable in 2008, with substantially reduced losses at ResCap due to risk mitigation actions undertaken by the company.
Looking Ahead to 2010

Looking ahead, GM expects continued cost savings and improved automotive pre-tax earnings by 2010, compared to 2007 levels, driven by a number of factors.

The most significant savings is the estimated $4-5 billion GM expects to gain in 2010 once it realizes the full-impact of the 2007 GM-UAW labor agreement related to the shift of U.S. hourly health care to an independent VEBA, and takes advantage of favorable labor demographics to adjust workforce levels and transition a portion of the workforce to the new non-core wage structure.

In addition, GM will reduce the cost premiums it has historically paid to Delphi for systems, components and parts by approximately $1 billion by 2010. Those savings will be offset by various labor and transitional subsidies of $400-500 million under Delphi's proposed reorganization, resulting in net savings of approximately $500 million.

GM also sees the probability of a stronger U.S. industry in 2009 and beyond, as compared to the relatively low 16.5 million total industry in 2007. All indications are that 16.5 million units are approximately 1 million units below trend. It is estimated that a move of the industry back to trend levels by 2010 would generate additional pre-tax income to GM in the range of approximately $1 billion to $1.5 billion annually.

Beyond these factors, there are a number of additional opportunities to further improve GM earnings and cash flow by 2010, though they are more difficult to predict with specificity. These include: additional material cost reductions due to continued leveraging of global vehicle architectures, improved pricing driven by compelling designs and stronger brands, continued explosive growth in revenue and profitability in emerging markets, and improved performance at GMAC.

At the same time, continued U.S. industry product mix deterioration, regulatory cost increases and the ongoing competitiveness of the marketplace pose potential risks to GM's profitability.

Considering the foregoing, GM management expects to significantly improve operating results, including earnings and cash flow, over the next two to three years.

Source: General Motors Corp via PR Newswire .

Downturn nearing an end, auto report says

Automotive Industry Ramps up Production of Fuel Efficient Cars and Races to Find Alternative Fuel Sources, KPMG Survey Finds

DETROIT, Jan. 8 /PRNewswire/ -- Automotive industry executives have identified finding alternative fuel sources as the number one trend facing the industry and are focused on producing low cost cars and hybrids to meet consumer demand, according to an annual global survey by KPMG LLP, the U.S. audit, tax and advisory firm.

In the KPMG survey, based on interviews with 113 senior executives at vehicle manufacturers and suppliers worldwide, auto execs said quality (86 percent) and fuel efficiency (84 percent) are the two key factors for consumers in making a purchase in the next five years. Other top consumer criteria are safety (70 percent) and affordability (69 percent). The execs also feel that car buyers will want vehicles using alternative fuel sources, which has jumped considerably in importance from KPMG's survey a year ago (65 percent versus 53 percent).

"The industry knows where it is and knows where it needs to be," said Daron Gifford, National Automotive Leader for KPMG LLP. "It needs to produce quality vehicles that are fuel efficient, especially in this economic cycle, and it needs to invest heavily in developing alternative sources of power. We found the execs in our survey more optimistic than past years, and that's largely because the landscape before them is clearer on the direction they need to go."

To meet demand, auto execs in the KPMG survey said that in the next five years, in terms of global market share and units sold, 81 percent expect major increases in low cost/introduction cars and an equal percentage expect increases in hybrids. This was followed by cars, at 67 percent, and crossovers at 58 percent. Categories of vehicles expected to fall are SUVs and large pick-ups, with 47 percent projecting a decrease in SUVs and 50 percent projecting a decrease in large pickups.

Asked to rate the importance of automotive product innovations over the next five years, 79 percent cited hybrid systems and 78 percent fuel cell technology, with safety innovations trailing at 67 percent.

The auto industry projected alternative fuel/hybrid vehicles sales to be in the 500,000 to 600,000 range by the end of 2007. Thirty-two percent of execs in the KPMG survey felt that we will see an equal number sold in 2008, while 25 percent saw a modest increase to 600,000 to 700,000 vehicles. Sixteen percent expect sales in the 700,000 to 800,000 range, with 27 percent expecting sales to top 800,000. The execs surveyed last year under projected sales of alternative/hybrid vehicles for 2007; only 17 percent expected sales to top 500,000.

"The auto execs expect heavy investment in new models/products and new technologies in the next two years as well as building capacity in Asia," said KPMG's Gifford. "Not investing puts manufacturers at risk in terms of market and product differentiation, resulting in market share decline."

Investment in China has been so strong that the number of cars sold in China could equal that of the United States in the next five years, the execs said. In addition, they feel that China will sell a significant number of cars in the U.S. in 6-10 years. What also may result, however, are problems with overcapacity, with 45 percent of the execs saying that overcapacity in China will become an issue in the next five years.

In the KPMG survey, the executives interviewed represented vehicle manufacturers and suppliers in Canada, United States, England, France, Germany, Sweden, India, China, South Korea, Japan and Australia. KPMG has released an annual survey of automotive executives expressing their views on the state of the industry since 1999.