Friday, June 1, 2007

DaimlerChrysler Canada Reports 10 Months of Sales Growth

DaimlerChrysler Canada Reports 10 Months of Sales Growth

    <<    -   May sales up 4.8 per cent    -   Double-digit sales growth in retail, double-digit sales decrease in        fleet    -   New, fuel-efficient compact models drive growth    -   Jeep(R) brand up 65 per cent on Compass, Patriot, Wrangler sales    >>

WINDSOR, ON, June 1 /CNW/ - DaimlerChrysler Canada today announced its
10th consecutive month of sales increases, a streak that began in August of
2006. Sales for May 2007 were 25,605 units, including 7,009 cars and 18,596
trucks. Compared with the same month last year when 24,430 units were sold,
May sales were up 4.8 per cent.
"Ten months of sales growth demonstrates the impact of the new
fuel-efficient products we have recently brought to the market," said Dave
Buckingham, Vice President - Sales, DaimlerChrysler Canada. "These new
products combined with our leadership position in minivans and trucks are
driving showroom traffic and incremental sales."
The percentage of retail sales growth is in the doulble digits, as is the
percentage of sales decline in fleet, continuing a year-to-date trend of solid
retail sales growth.

Other Highlights

Sales of Chrysler Group's highly fuel-efficient compact vehicles, Dodge
Caliber, Jeep Compass and Jeep Patriot, reached 4,241 for the month,
significant growth over last year when only Caliber was available in the
segment. The success of Patriot, Compass and also the all-new Jeep Wrangler
drove a 65 per cent increase in Jeep brand sales versus May 2006 at
4,284 total units.
The all-new Dodge Nitro combined with Jeep Liberty to sell 1,502 units,
up 55.6 per cent from last year, as our mid-size SUV entries continue to show
strength based upon their combination of practicality, value and fuel
efficiency. Dodge Dakota also showed tremendous strength, up 58.4 per cent to
993 units.
Sales of Dodge Charger reached 1,316 units to hit an all-time monthly
high, while the all-new 2008 Dodge Avenger sales continue to climb since it
was launched earlier this year and hit 927 units.
In trucks, Dodge Ram pickup set a new May sales record with 4,044 units
sold and was up 10.6 per cent over last May, including up 28.8 per cent on the
Ram Heavy Duty available with the new 6.7L Cummins Turbo Diesel, which is the
only Diesel to meet 2010 Emissions Standards.
The successful May 'Dodge Caravan National Sales Event' program continues
into June, which boosted Dodge Caravan sales up 8 per cent at retail and sold
a total of 7,034 units. This program offers consumers the ability to 'Drive
Free for 3' with three months of Free Payments, three months of Free Gas and
three months of Free Scheduled Maintenance, in addition to offering the best
combination of flexibility, spaciousness, safety and value, including the
industry standard Stow 'n Go(R) seating system.
Total DaimlerChrysler Canada year-to-date sales through May 2007 are up
4.4 per cent to 101,208 units.

Ford U.S. sales fall; Chrysler higher

Jun 01, 2007 12:42 PM

Associated Press

DETROIT – Ford Motor Co. said Friday its U.S. vehicle sales fell 6.9 per cent last month as the auto maker continued to cut low-profit sales to rental companies, while DaimlerChrysler AG's sales rose 3.9 per ent with help from a 20 per cent jump in its Jeep brand.

But Ford said its sales to retail customers, which were 3 per cent lower than a year ago, still marked its best retail month of the year as the Ford Edge and Lincoln MKX crossovers continued to make gains.

"These new crossovers are the right products at the right time," Mark Fields, Ford's president of the Americas, said in a statement. "Consumer demand for the Ford Edge and Lincoln MKX has exceeded our original expectations.''

Ford said it now expects Edge sales to reach 120,000 this year – 20 per cent higher than its original forecast.

Sales of Ford, Lincoln and Mercury brands, including fleet sales, totalled 258,391 last month, including 169,265 light trucks and 89,126 cars. Truck sales were essentially flat from a year ago, but car sales dropped 17.7 per cent.

Chrysler's passenger vehicle sales, which include the Chrysler, Jeep and Dodge brands, rose 4.3 per cent to 199,393, while Mercedes sales rose 0.7 per cent to 21,771. Dodge sales were up about 3 per cent.

Detailed breakdowns from DaimlerChrysler, which sold a total 221,164 vehicles in the U.S. last month, were expected later in the day.

With retail gas prices well above $3 per gallon across the nation, some analysts were expecting lower U.S. sales from May 2006. But rebates and other incentives, which the auto website reported Friday were on the rise last month, may offset uncertainty about future fuel prices.

Industrywide, Toyota Motor Corp. has been gaining market share in the U.S., banking on a reputation for reliable and fuel-efficient cars. But General Motors Corp. and Ford have been working to cut fleet sales.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days, which last month was 26 and in May 2006 was 25.

Chrysler to invest $570 mln in Mexico engine plant

MEXICO CITY, June 1 (Reuters) - Auto maker Chrysler Group, which is being sold by parent DaimlerChrysler AG (DCXGn.DE: Quote, Profile, Research, plans to invest $570 million in a new engine plant in the northern Mexican city of Saltillo, the company said on Friday.

Production will begin in 2009 on a new family of Chrysler V-6 engines known as Phoenix engines.

This is the second V-6 plant to be announced by the company and once operating will employ 485 workers. The other engine plant will be located in Trenton, Michigan.

Chrysler's Saltillo plant is part of a wider $3 billion recovery and transformation plan, the company said.



- Chrysler Group Maintains Greatest Productivity Improvement Over Five Years, According to Harbour Report

- Media Advisory: Chrysler Group's Sterling Heights Assembly Plant Celebrates Production of All-new 2008 Chrysler Sebring Convertible and Flexible Manufacturing Enhancements Monday, June 4

- Media Advisory: Chrysler Group Conference Call to Announce May 2007 Sales

- Native American Business Alliance (NABA) Recognizes Chrysler Group Diversity Efforts (with photo)

Powertrain regains top spot in transmission plant ranking; Toledo Jeep shows slip in productivity

Tired of consecutive second-place finishes, workers at General Motors Corp.’s Toledo Powertrain factory have reclaimed their previous title of being the best transmission plant in North America.

The Harbour Report, a closely watched industry barometer that was released yesterday, placed Toledo Powertrain atop all transmission facilities in productivity, a spot it held for five straight years before being surpassed the last two years by DaimlerChrysler AG’s Kokomo, Ind., plant.

It was frosting on the cake for the Alexis Road plant in which the company is investing $872 million to produce more fuel-efficient transmissions.

Regaining the banner is not only “a pride thing,” but a job-security issue, said Ray Wood, president of United Auto Workers Local 14 at the plant.

“We don’t like to come in second to anyone,” he told The Blade.

The report also showed that Chrysler’s Toledo Jeep Assembly complex slipped in productivity. It was not among the top 10 assembly plants in the country.

But Harbour officials said that was expected because the plant not only launched two products in 2006 but implemented unusual on-site operations run by three suppliers.
Both the Ford Motor Co. Lima, Ohio, plant and Global Engine Manufacturing Alliance in Dundee had decent performances compared with their peers, according to the annual report by Harbour Consulting of Troy, Mich.

Overall, the study found, Toyota led the six largest competitors in total productivity, using 29.93 labor hours to make a vehicle, or 5 percent better than last year.

But plants at General Motors, which has embarked on a plan to cut its work force by 30,000, was hot on Toyota’s heels. Its labor hours were 32.36, a gain of 2.5 percent. Honda Motor Co. took 31.63 hours to build components and assemble a vehicle, Chrysler 32.9 hours, and Ford 35.1 hours. Nissan Motor Co., with no data supplied, was estimated at 29.97 hours.

“General Motors essentially caught Toyota in vehicle assembly productivity,” said Ron Harbour, president of the consulting firm.

“Considering that they will be building vehicles in 2007 with dramatically fewer hourly employees in the U.S., GM, Ford, and Chrysler likely will reduce their hours per vehicle significantly.”

In the new report, GM plants took the best plant awards for vehicle assembly, engines, and transmissions. Honda’s Marysville, Ohio, stamping plant took the fourth top award.

“GM has made amazing strides just in the consistency in their manufacturing,” said Greg Gardner, a Harbour analyst. “It’s very standardized, much, much more so than five years ago.”

Toledo Powertrain was to receive its best plant award this morning.

“We’re proud of our membership and everything we’ve been able to accomplish under great difficulty,” said Mr. Wood of Local 14.

The plant lost about 1,300 workers who recently took buyouts or early retirement incentive packages as part of GM’s corporatewide efforts to cut jobs. The factory’s employees, Mr. Wood said, are not resting on their laurels, despite the GM investments.

The Toledo plant was able to build a rear-wheel-drive transmission every 2.54 hours, better than 2.8 hours a year ago and than 2.8 hours of the second-place finisher this year, a Chrysler plant in Indiana.

“Improved productivity means we can run the company more efficiently, but it also means you’re building a higher-quality product,” GM spokesman Dan Flores said.

Toledo Jeep did not fare well in the Harbour study. Its factory that makes Jeep Liberty and the new Dodge Nitro used 22.13 hours to make a vehicle, 12 percent worse than last year. Its Nitro production alone took 20.11 hours, and finished second among plants making midsized sport-utility vehicles. Its factory that makes the Jeep Wrangler needed 22.05 hours per vehicle, worse than 20.84 a year ago.

But Harbour officials said that, with the Nitro being new and with Wrangler launching a four-door version last year, productivity typically drops initially. The start of three on-site supplier operations helping to make the Wranglers and a new four-door Wrangler also was novel for an automaker in the United States and likely curbed productivity at the outset.

“I guess I would cut them a little slack because that was quite an undertaking,” Mr. Gardner of Harbour said.

UAW Local 12 officials at Toledo Jeep were not available for comment.

North America’s top assembly plant was GM’s Oshawa, Ontario, plant, making a vehicle every 15.68 hours.

Among engine plants, Ford’s Lima engine factory took 3.01 hours to produce a V-6 engine, 10 percent better than last year and enough to keep it first in the V-6 category. It finished sixth overall among engine plants, however. GM’s Spring Hill, Tenn., plant was tops, at 2.27 hours.

Making a “respectable” third-place showing, Mr. Gardner said, was a joint-venture engine plant operated in Dundee by Chrysler. It was ranked for the first time this year, at 2.68 hours per engine. But it took 2.54 hours to build a 4-cylinder engine.

Dave Elshoff, a Chrysler spokesman, said the automaker wasn’t pleased by the Dundee factory’s performance. “It’s a tremendous showing for an all-new product and an all-new plant,” he said, but the plant will improve as it gears up production.

Performances in the study affected profits per vehicle before taxes. According to the study, Ford lost $5,234 per vehicle, GM $1,436, and Chrysler $1,072. In contrast, Toyota made $1,266 per vehicle, Honda $1,368, and Nissan $1,575.

Reducing labor costs and particularly fringe-benefits costs will be key for GM, Ford, and Chrysler, whose UAW contracts expire in September, Harbour officials said.

Chrysler's Team Canada

Canadians in driver's seat as carmaker attempts turnaround under new owners

Nicolas Van Praet, Financial Post

Published: Friday, June 01, 2007

U.S. automaker Chrysler has a little-known secret that has its Canadian staff beaming -- it's run by a bunch of Canucks. And they're determined to restore the company's automotive glory.

Four of the eight managers on Chrysler's executive committee, essentially the top managerial team at the carmaker, are now Canadians. They include Tom LaSorda, Chrysler's Windsor-born chief executive since 2005, who is sometimes called "the dean of lean" for his talents cutting costs, and Simon Boag, the Georgetown, Ont. native promoted last week to head of procurement and supply.

The Canucks are by no means the first Canadians to rise to the top rung of the U.S. corporate ladder. But their dominance in Chrysler's executive suites is unusual, analysts say, especially given the automaker's prominent place in the American psyche.

Critics have blasted Chrysler in recent years for boosting sales by building more cars and trucks than the market demanded and forcing them on reluctant dealers. The company has also bet on risky designs -- with sales duds offsetting smash hits such as the 300 sedan. Chrysler could use a little Canadian modesty and judiciousness now as it executes its turnaround under controlling ownership of Cerberus Capital Management, said Dennis DesRosiers, a leading auto consultant based in Richmond Hill, Ont.

"Americans win big and lose big, it's more of a trait," Mr. DesRosiers said. "What Chrysler needs right now is a conservative stick-your-nose-to-the-grindstone-and-get-the-job-done approach ? Chrysler doesn't have the ability to make bets right now. They need competency more than anything."

Frank Ewasyshyn, the Windsor native who heads Chrysler's manufacturing, is also among the Canadians on the executive committee. Halifax-born Steven Landry, sales chief for Chrysler in North America and head of the company's global marketing, service and parts divisions, is the other.

Mr. LaSorda, who comes from a family of union activists in Windsor, is the highest-ranking Canadian ever in the history of Detroit's traditional Big Three. The company he now leads once battled his maternal grandfather in court after he was arrested for conspiring to stop non-union workers from entering a Chrysler plant during a strike in 1946. Mr. LaSorda and Mr. Boag both worked at General Motors Corp.'s CAMI Automotive joint venture plant with Suzuki in Ingersoll, Ont. Both men are described as having a knack for identifying waste and getting operations lean, something they learned from the Japanese in Ingersoll.

One explanation of why so many executives cutting their teeth in Canada rise to the top ranks of companies is that with our smaller market, they get a broader managerial experience at an earlier stage in their careers than their U.S. peers, said Chris Piper, a specialist in operations management at the University of Western Ontario. He suggested that now that the roles of Canadians have been amplified at Chrysler after the break from Daimler in Germany, they may be "less likely to be sucked into Detroit-think."

Mr. Landry said last week he felt privileged to be pulling the levers of Chrysler's sales efforts in North America as it goes private under Cerberus. "It kind of snuck up on me fairly quickly," he said of his new appointment. "I?m a kid from Nova Scotia and I'll be 25 years with the company in September so I'm really proud of that."

He said the move by Cerberus to take Chrysler private and away from the rigours of quarterly reporting allows the executive team to be "leanminded," fast, and focused. "We're really convinced that we can be successful."

Many U.S. buyers have shunned Chrysler's truck-heavy lineup over the past year as US$3-a-gallon gasoline loomed, and the company's attempts to gain traction with several new fuel-efficient vehicles like the Jeep Compass are still in the early stages. Sales for the first four months in Canada are up 4.3% over last year, but U.S. sales are down 2.9%.

"In the consumer's mind, Chrysler has a gap in cars," said George Magliano, director of automotive research at consultancy Global Insight. "They still have an issue."

Annual sales of Chrysler Group's Dodge, Jeep and Chrysler brand vehicles in the United States fell 4.4% between 2001 and 2006, to 2.14 million last year, according to DesRosiers Automotive Consultants. In Canada, the group's deliveries dropped 10.1% over the same time, to 220,553.

UAW chief urges more cooperation

"We have no interest in tearing down employers. Just the opposite — we want employers to succeed." - Ron Gettelfinger, President of the United Auto Workers union See full image

Gettelfinger applauds moves like Cerberus deal, calls for 'taking the high road' in contract talks.

David Shepardson / Detroit News Washington Bureau

MACKINAC ISLAND -- United Auto Workers President Ron Gettelfinger struck a conciliatory tone Thursday, telling business leaders they have much in common and praising the management moves of the Big Three.

"You don't have to be anti-employer to be pro-union. We have no interest in tearing down employers. Just the opposite -- we want employers to succeed so that workers have a chance to share in that success," he said.

Gettelfinger, speaking at the Detroit Regional Chamber's Mackinac Policy Conference, said labor and management have "more in common that you might think." He compared joining a union to a business joining the Chamber of Commerce.

He called several times for "taking the high road" in contract negotiations and other dealings. He praised the new ownership of Chrysler Group, Cerberus Capital Management LP.

Gettelfinger conceded the UAW had concerns about "the strip and flip reputation that exists in many of these (equity) firms." But Cerberus, he said, has shown a sincere commitment to invest in Chrysler and its pension for UAW members.

"We're going to do everything we can to make the most of it," he said.

He praised the Big Three for spending billions of dollars on developing new advanced technologies.

"Labor and management should be talking about the positives that are taking place in our industry," Gettelfinger said.

U.S. Rep. John Dingell, D-Dearborn, said Gettelfinger had struck the right note in urging cooperation.

"Union and management need to work together. They have a lot of issues in common," Dingell said.

Yet Gettelfinger offered harsh criticism of Delphi Corp. for its decision to file bankruptcy in 2005 and paying lavish bonuses to executives.

The union has been negotiating with the auto parts supplier to reach an agreement on labor costs and other issues to help the company emerge from bankruptcy.

"We are continuing to try to work through the problems," Gettelfinger said, saying he had no timeline for completing the talks.

He declined to say whether the two sides had come any closer since the UAW offered a counterproposal on wages and benefits on May 15.

The UAW has turned down at least two offers from Delphi that would have meant deep pay cuts for its members.

An agreement is crucial to the success of Delphi's plans for private equity investors to buy up to 70 percent of the supplier and bring it out of bankruptcy as a newly capitalized company.

Delphi has declined to comment on the talks or criticism from Gettelfinger in recent months. The company has reiterated it is committed to reaching an agreement and continues to talk with the UAW.

In January, a judge approved a plan by private equity investors to invest $3.4 billion in a court-approved agreement to own up to 72 percent of Delphi and control a majority of seats on the board. One of the investors was Cerberus, which is withdrawing. The remaining investors are Appaloosa Management LP, Harbinger Capital Partners, Merrill Lynch & Co., UBS Securities LLC and Goldman Sachs.

As part of its restructuring, Delphi wants to close 21 of 29 U.S. plants and must reach agreement with its former parent, General Motors Corp. The automaker has said it expects its costs connected to resolving its issues with Delphi to be about $7 billion.

About 20,000 Delphi hourly workers already have agreed to accept buyouts or early retirements and thousands of salaried workers have left the company.

Top exec Thursfield may leave Cerberu

Ford / Ford Europe/Wieck

David Thursfield joined Cerberus in 2004 after retiring from Ford. See full image

The Detroit News

David Thursfield, the head of Cerberus Capital Management LP's auto group, may be leaving the private equity giant, just weeks after the company agreed to purchase the Chrysler Group from DaimlerChrysler AG, three people familiar with the situation told The Detroit News.

Thursfield, the cigar-chomping, no-nonsense former head of Ford Europe and the automaker's global purchasing division, joined Cerberus in May 2004 after retiring from the Dearborn automaker.

Reached at his home in London late Thursday, Thursfield would neither confirm nor deny that he was leaving Cerberus. Cerberus spokeswoman J.J. Rissi also declined to comment on Thursfield's status.

Cerberus agreed last month to purchase 80.1 percent of Chrysler in a $7.4 billion transaction expected to close in the third quarter of this year.

Thursfield, 61, was not involved in that deal, in part because his severance agreement with Ford, which governs his pension, doesn't allow him to work for another auto manufacturer, people familiar with the situation told The News.

But Thursfield was a key player in Cerberus' unsuccessful bid to purchase a major stake in bankrupt Troy-based supplier Delphi Corp. Thursfield was involved in complex talks with Delphi, its former parent General Motors Corp. and the United Auto Workers in an effort to work out a labor agreement. Ultimately, Cerberus dropped out of the deal over disagreements about the supplier's value.

Thursfield also is executive chairman and interim CEO of one of Cerberus' auto suppliers, Farmington Hills-based GDX Automotive, a position he has held since August 2005.

In April, The Detroit News reported that GDX was in financial turmoil and telling its major customers that the company may be broken up or sold.

Chrysler workers will protest pending sale

Josee Valcourt / The Detroit News

Mauder See full image

Protest plans

  • Who: Toledo workers
  • Where: Auburn Hills headquarters, 1000 Chrysler Drive
  • When: 9 a.m. to 12:30 p.m., Monday through Thursday
  • A group of Chrysler workers from Toledo who wanted to buy the company through an employee stock plan will launch a four-day protest against Chrysler's pending sale to Cerberus Capital Management LP at the automaker's Auburn Hills headquarters, beginning Monday morning.

    The mainly blue-collar group of about 25 autoworkers who call themselves the Chrysler Employee Buyout Committee is also considering filing a lawsuit against DaimlerChrysler AG and its investment bank, JP Morgan Chase, because they say they were shut out of the bidding process.

    The workers, led by Michele Mauder, a production worker at the Toledo Jeep Wrangler plant, believe DaimlerChrysler didn't take seriously their proposal that called for an employee stock ownership plan.

    Dan Mangru, a recently appointed spokesman for the Toledo group, said the workers' bid was higher than Cerberus' offer, but he could not provide a dollar amount.

    On May 14, Daimler announced that it reached a deal to sell an 80 percent stake for $7.4 billion to private equity firm Cerberus.

    The protest that begins Monday and continues through Thursday is expected to draw about 1,000 workers "from all across the country," said Dan Mangru, a recently appointed spokesman for the Toledo's group. "They're looking to tell Chrysler that they have a powerful message. They want everybody to join in. The more powerful this movement gets, the more Chrysler has to listen."

    Chrysler spokesman Jason Vines dismisses the group's complaints about the bidding process for the automaker.

    "We had an orderly process for this and if you followed the orderly process, you were involved," Vines said. "And if you couldn't follow, you weren't involved."

    He said Chrysler's pending sale is a big deal for all employees, including senior managers. The group's reason for protesting appears "misguided,' he said, particularly since the Toledo plant is building a slew of new products.

    "This is a tough business right now and I'd rather have them build great (Dodge) Nitros, Wranglers and (Jeep) Liberties instead of drawing a really clever sign."

    Not all Chrysler workers are supporting the protest or the workers' cause.

    Rob Charette, who also works at the Toledo plant, said he doesn't think an ESOP would work for a company the size of Chrysler, which employs 80,000 blue- and white-collar workers.

    He also isn't suspicious of Cerberus' business intention in spite of naysayers, who fear the private equity firm will eventually break up the automaker and sell it in parts for a quick return.

    "They'll be lucky to get 100 people there," Charette said. "I don't see that having any steam whatsoever."

    New Dodge Crossover Snagged in Michigan

    By Ed Hellwig, Senior Editor | EDMUNDS - - Don't worry. This new crossover from Dodge won't get saddled with a name like NCC when it goes into production next year. It stands for New Concept Crossover and it's merely an internal designation tossed out by a Chrysler executive during the course of an interview some months back. We've heard "Crew" mentioned as one possible name and JC49 is apparently the program code, but these sound lame, too, so we'll just stick with NCC for now.

    Built on the same platform that underpins the current Dodge Avenger sedan, the NCC is Dodge's answer to crossovers like the Hyundai Santa Fe, Mazda CX-9 and Toyota Highlander. A step up in size from the Dodge Caliber, the NCC features a less aggressive shape compared to the macho-man Dodge Nitro SUV. The signature crosshair grille is there, but the Nitro-esque headlights have been tamed down and the overall shape is closer to that of its Japanese competitors.

    Expect to see the NCC utilize the same range of four- and six-cylinder engines as the Avenger. This means base models will get a 2.4-liter four-cylinder with roughly 172 horsepower, while higher trim levels will get a 3.5-liter V6 with 235 hp. An automatic transmission will be the only available gearbox; four-cylinders get four speeds, six-cylinders get six. And like the Avenger, both front-wheel- and all-wheel-drive models will be offered.

    With no clear shots of the interior, we're left to speculate on the cabin design. Given that the rest of the vehicle is basically a rehashed Avenger, however, we don't even have to go out on a limb to suggest the NCC will look pretty much the same inside. There will be more room in the second row of seats plus, no doubt, the addition of a third row of seats, but the dash layout and feature content should mimic the Avenger option for option.

    Production is expected to start early next year so the official debut of this new Dodge crossover could happen at any time. Assume the L.A. auto show in November at the latest, with a Frankfurt debut in September the most likely venue.

    out on a limb to suggest the NCC will look pretty much the same inside. There will be more room in the second row of seats plus, no doubt, the addition of a third row of seats, but the dash layout and feature content should mimic the Avenger option for option.

    Production is expected to start early next year so the official debut of this new Dodge crossover could happen at any time. Assume the L.A. auto show in November at the latest, with a Frankfurt debut in September the most likely venue.

    2009 Dodge NCC - Rear

    (Enlarge photo)
    With its single tailpipe and relatively tall tires, this NCC prototype is most likely one of the base four-cylinder models. (Photo by KGP Photography)

    2009 Dodge NCC - Side View

    (Enlarge photo)
    Judging by its considerable length, the NCC will have a slightly longer wheelbase than the Avenger sedan it's based upon. This should help to accommodate the third row of seats necessary to compete in the midsize crossover class. (Photo by KGP Photography)

    This Day in Auto History: 01 JUNE

    Automobile Quarterly
    Automobile Quarterly
    This Day in Auto History:

    Automotive engineer William T. Murphy is born in Providence, RI
    Sizaire Freres et Naudin is organized in Puteaux, France by brothers Maurice and George Sizaire along with Louis Naudin
    Thomas W. Palmer, a United States Senator 1883-1889 (R-MI) who was an original partner in the Detroit Automobile Company, dies in Detroit, MI at age 83
    Edward T. Strong is named General Sales Manager of the Buick Motor Company
    Duesenberg, Inc. officially opens its new factory in Indianapolis, IN

    Source: Automobile History Day By Day, by Douglas A. Wick

    Jeep Cherokee SRT8 runs 13.077 @ 103.850 MPH in the 1/4 mile

    A 2007 Jeep Cherokee SRT8 driven by Steve was added to the drag racing database running a 13.077 @ 103.850 MPH. - Recent 1/4 Mile...

    Chrysler Group Maintains Greatest Productivity Improvement Over Six Years, According to Harbour Report

    Posted : Thu, 31 May 2007 18:38:00 GMT
    Author : Chrysler Group

    AUBURN HILLS, Mich., May 31 /PRNewswire-FirstCall/ -- The Chrysler Group has improved its overall manufacturing productivity by an industry-leading 25 percent over the last six years, according to the Harbour Report North America 2007. The company has improved its overall hours per vehicle (HPV) time by 2.4 percent to 32.90 for the 2006 calendar year.

    The annual Harbour Report is a broadly accepted measure of productivity in the automotive industry. Nearly all major manufacturers participate in the survey. According to Ron Harbour, President - Harbour Consulting, Chrysler Group's manufacturing productivity is supported by numerous improvements throughout the company.

    "Improving productivity in the face of lower production is a huge accomplishment, but none of the domestic manufacturers can afford to let up," said Ron Harbour , president of Harbour Consulting. "Chrysler's 19 percent reduction in total manufacturing hours per vehicle over the last five years is the biggest improvement of the six largest North American automakers over that period. The challenge now is to take that progress to the next level."

    Among the highlights for the Chrysler Group, eight assembly plants ranked within the top five of their segment for productivity improvements. Windsor Assembly was North America's most productive minivan plant and St. Louis South, second. For the midsize SUV segment, Jefferson North Assembly took both first place for the Jeep(R) Grand Cherokee and fifth for the Jeep Commander; Toledo North, home of the Dodge Nitro ranked second place and third for Jeep Liberty; Newark Assembly ranked second for the Dodge Durango and Chrysler Aspen in the large utility segments; Brampton Assembly ranked fifth for the Chrysler 300, Dodge Charger and Dodge Magnum in the large - non-premium conventional segment; Warren Truck ranked fifth for the Mitsubishi Raider in the midsize - non-premium pick-up segment and Toledo Supplier Park ranked second for Wrangler in the compact non-premium SUV segment.

    "The Company continues to be on task to reach its goal of world-class productivity by end of 2007," said Frank Ewasyshyn, Executive Vice President Manufacturing, Chrysler Group. "We are pleased to have made productivity gains during a 10-vehicle launch year, the most significant new-vehicle introduction in Chrysler Group history."


    The company's transmission plants continue to be the industry leader with a 4.2 percent improvement - to 3.39 hours per transmission. Eight Chrysler Group Powertrain plants scored at the top of their segment.

    GEMA, Dundee - 1.8L, 2.0L and 2.4L four cylinder (Ranked third among all engine plants) 2.68 HPE

    Mack Ave I - 4.7L OHC V-8. Mack Ave II - 3.7L OHC V-6 (Ranked tenth among all engine plants) Saltillo Engine Plant - 5.7L and 6.1L OHV V-8 HEMI(R) Kenosha Engine Plant - 3.5L and 4.0L OHV V-6 Trenton Engine Plant - 3.3L and 3.8L OHV V-6

    Kokomo Transmission Plant - W5A580 rear-wheel drive automatic transmission (Ranked second among all transmission plants)

    Kokomo Transmission Plant - front-wheel drive automatic transmission (Ranked highest among all FWD transmission plants) 3.52 HPT


    Chrysler Group also demonstrated expertise in stamping operations with a five percent improvement year-over-year in hours per vehicle based upon parts- per labor hour. Additionally, Toluca (Mexico) Assembly plant, home of the Chrysler PT Cruiser and PT Cruiser convertible and Belividere (Ill.), home of the Dodge Caliber, Jeep Compass and Jeep Patriot, were among the top-10 stamping plants - the highest for a domestic manufacturer.

    The company is deploying a number of initiatives intended to continue improving manufacturing excellence in the future. Among them are increased support of assembly employees, continued employee training and new workplace practices that are designed to foster greater creativity and innovation among employees on the plant floor. The company has also redesigned material handling operations and employee work stations to improve productivity and maintain high quality levels.

    The Harbour Report is one of several measures the Chrysler Group uses to evaluate its manufacturing operations. Other areas that are tracked by the company include safety, quality, delivery, cost and morale, all of which contribute to manufacturing performance. Chrysler Group

    Thursday, May 31, 2007


    Magnitude 5.5
  • Wednesday, May 30, 2007 at 19:35:21 (UTC)
    = Coordinated Universal Time
  • Wednesday, May 30, 2007 at 5:35:21 PM
    = local time at epicenter
  • Location 59.959°S, 26.476°W
    Depth 35 km (21.7 miles) set by location program
  • 107 km (66 miles) S (179°) from Bristol Island, South Sandwich Islands
  • 363 km (226 miles) S (173°) from Visokoi Island, South Sandwich Islands
  • 2137 km (1328 miles) SE (128°) from STANLEY, Falkland Islands
  • 2768 km (1720 miles) SE (124°) from Punta Arenas, Chile
  • Location Uncertainty horizontal +/- 10.1 km (6.3 miles); depth fixed by location program
    Parameters Nst= 45, Nph= 45, Dmin=>999 km, Rmss=0.93 sec, Gp= 61°,
    M-type=moment magnitude (Mw), Version=6
    • U.S. Geological Survey, National Earthquake Information Center
      World Data Center for Seismology, Denver
    Event ID us2007czcb

    Toyota is tops in new Harbour manufacturing report

    Automotive News
    May 31, 2007 - 10:16 am Toyota was the top-ranked automaker in the 2007 Harbour Report on manufacturing in North America, with a combined 29.93 labor hours per vehicle. That score covers stamping, engine production, transmission production and vehicle assembly.

    General Motors plants were ranked at the top of three of those four categories.GM's Oshawa, Ontario, No. 2 plant was top-ranked in vehicle assembly; the Spring Hill, Tenn., plant was top-ranked in engine production; and the Toledo, Ohio, plant was top-ranked in transmission production.

    Honda's Marysville, Ohio, plant was top-ranked in stamping.

    The gap in productivity among the six major North American automakers continued to narrow as quality advances and more-flexible labor agreements drove improvements, according to the report.

    Honda Motor Co. Ltd. showed the biggest improvement this year of 2.7 percent in the combined assembly, stamping and powertrain operations, the report said.

    In overall productivity, GM, Honda, the Chrysler group and Ford Motor Co. showed improvement in 2006.

    "General Motors essentially caught Toyota in vehicle assembly productivity," Ron Harbour, president of Harbour Consulting, said in a statement. "Considering that they will be building vehicles in 2007 with dramatically fewer hourly employees in the U.S., GM, Ford and Chrysler likely will reduce their hours per vehicle significantly."

    Harbour Consulting measures productivity at North American plants, calculating the labor hours needed to make vehicles.

    Productivity improved for each of the Detroit-based automakers over 2005, but they still trailed Toyota and Honda.

    GM trimmed total production hours per vehicle by 2.5 percent in 2006 to 32.36 hours. Chrysler improved 2.4 percent in 2006 to 32.90 hours across its assembly, stamping and powertrain plants. Ford productivity improved 1.9 percent, but trailed all of the surveyed automakers at 35.10 hours.

    Nissan Motor Co. Ltd., which has long been among the top-ranked companies in the report, did not participate in this year's report, but Harbour estimates it took 29.97 hours to build a vehicle last year.

    All three Detroit automakers are in the midst of shutting plants and cutting jobs in North America as they restructure operations. On a combined basis, they are closing more than two dozen plants and cutting over 80,000 jobs in North America.

    By closing plants in the next two years, all three should improve capacity utilization, the report said.

    While production times narrowed among the automakers, big gaps remained in profitability, however.

    Toyota and Honda each earned an average pre-tax margin of more than $1,200 on vehicles sold in North America. In contrast, Chrysler lost $1,072 per vehicle, while GM lost $1,436 and Ford lost $5,234 per vehicle in 2006.

    The losses reflected a variety of factors, including the large difference in health care and pension costs, as well as rebates and low-interest-rate financing, the report said.

    Reuters contributed to this report.

    Used Dodge Viper SRT Ram Truck Signed By Wolfgang Bernhard

    One of the rarest and most collectible Used Dodge Viper SRT Ram Trucks has just surfaced and is being sold on EBay the selling dealer is BJ Motors. This SRT has been signed by Wolfgang Bernhard who is one of the principals that is part of the purchase of Diamler Chrslyer. The Viper Trucks are no longer produced and this one is special. There were only 50 of these trucks produced and offered to Viper Club of America members as a raffle. If you were one of the lucky ones to be chosen you then purchased this truck and had to take delivery at the Daytona 500 in Indianoplis is 2004. This truck with only 94 miles is a very desirable item for a collector. Check it out on EBay or on BJ Motors web site.

    BJ Motors is one of the area's largest performance and exotic sports car wholesalers, and specializes in the Dodge Viper. We buy and sell the best of the best automobiles. Each and every car is hand picked for extremely high quality and low mileage. Our cars are as important to us as they are to you. Every vehicle is rigorously inspected to ensure the highest quality. We take extra care to research the history and service of each of our cars, as well as conduct a complete and thorough detail process. We offer a variety of financing options, and extended warranties through our business partners, enclosed nationwide shipping, and friendly knowledgeable expertise. Give us a call or schedule an appointment to come and see our line of fine vehicles just waiting for you! We would like to be your source for Dodge Vipers or any exotic vehicles in the market place today.

    Check out our inventory as it changes daily. If there is something you are looking for specifically and you do not see it here, please send us an e-mail and we will try and help you locate your vehicle. Thanks for visiting and check back often.

    Chrysler Group's Sterling Heights Assembly Plant Celebrates Production of All-New 2008

    Chrysler Sebring Convertible and Flexible Manufacturing Enhancements

    Chrysler Group's Sterling Heights Assembly Plant Celebrates Production of All-New 2008 Chrysler Sebring Convertible and Flexible Manufacturing Enhancements

    Plant tour and media briefing scheduled for Monday, June 4

    More than $800 million investment into Chrysler Group Sterling Heights

    Chrysler Group Executive Vice President - Manufacturing Frank Ewasyshyn,

    Sterling Heights Assembly Plant Manager Bob Bowers, Local UAW President Bill

    Parker, and others to host event

    Chrysler Group continues operational momentum with flexible manufacturing

    What: Announcement of the start of production of the all-new 2008
    Chrysler Sebring Convertible at Chrysler Group's Sterling
    Heights Assembly Plant (SHAP) in Sterling Heights, Mich.

    Who: The following will be available for interviews:
    Frank Ewasyshyn, Executive Vice President Manufacturing
    Bob Bowers, Plant Manager SHAP
    Bill Parker, Local UAW 1700 President

    When: Monday, June 4, 1:00 p.m. - 3:00 p.m.
    Press Conference 1:15 p.m.
    Media Tour 1:45 p.m.

    Where: Sterling Heights Assembly Plant
    3811 Van Dyke Avenue
    Sterling Heights, Mich.
    (Enter from Van Dyke Avenue -- proceed to Visitor's lot adjacent
    to entrance)
    Directional signs will be posted.

    Details: Photo Opportunities:
    Executives with the all-new 2008 Chrysler Sebring Convertible
    Trim, Chassis, Body and Assembly operations
    Photography and video will be permitted inside the facility for
    this one-time special occasion

    No open-toe shoes, high heels or skirts are allowed in the
    assembly facilities.

    Michele Tinson
    (248) 512-0366 (office)
    (248) 705-2456 (cell)

    Roger Benvenuti
    (248) 512-4634 (office)
    (248) 841-3684 (cell)

    Chrysler drives forward in car market

    China Daily - China
    Beijing Benz-DaimlerChrysler will maintain the momentum and is going to bring in another Chrysler model called the Sebring soon. ...

    Costly convertibles aren‘t always safest

    Staff and agencies
    31 May, 2007

    By KEN THOMAS, Associated Press Writer Thu May 31, 12:35 AM ET

    WASHINGTON - When it comes to buying a new convertible, a hefty price tag doesn‘t always buy safety. Test scores being released Thursday by the Insurance Institute for Highway Safety found several affordable convertibles that offer better crash protection than their more expensive competitors.

    "The performances of the 9-3 and C70 are impressive," said Adrian Lund, the Institute‘s president. "These cars combine what convertible buyers should look for if they‘re shopping with safety in mind."

    While many owners can afford to use their roadster on weekends during the summer, the tests suggest that safety doesn‘t have to be a simple function of cost. Three convertibles — the 2007 Mitsubishi Eclipse Spyder, 2007 Volkswagen Eos and 2008 Chrysler Sebring — received the highest marks in front and side-impact crash testing. All start under $30,000.

    During its side test of the 3 Series, for example, the Institute recorded injury measures on the driver dummy that could indicate rib fractures and injuries to internal organs in a similar crash.

    "We‘re confident that in real world situations that BMW vehicles are among the safest in side-impact," he said.

    The 2007 Pontiac G6, which starts at $29,400, received scores of marginal in side-impact crash tests and the second-highest score of acceptable in frontal tests.

    General Motors Corp. spokesman Alan Adler said that while there was some movement of the front seat, "the seat remained in place and provided good protection to the crash test dummy in the driver‘s seat." On the side-impact test, he said the automaker is moving to equip all passenger cars with head protection by 2009.

    Lund said consumers should look for roll bars, which help reduce the risk if the convertible rolls over. Pop-up roll bars, which deploy automatically if the sensors detect a potential rollover, are standard equipment on the 9-3, C70, Eos, 3 Series and A4, but unavailable on the other vehicles tested.

    On the Net:

    Insurance Institute for Highway Safety:

    A Familiar Face Back at Chrysler

    How Cerberus Will Employ Bernhard's Strong Hand in Chrysler Turnaround

    WALL STREET JOURNAL - - Early this month, as speculation about who would buy DaimlerChrysler AG's Chrysler Group intensified, some Chrysler employees spotted a familiar figure striding through the main lobby at the Auburn Hills, Mich., headquarters. Wolfgang Bernhard was back.

    [Wolfgang Bernhard]

    In the days since the announcement that Cerberus Capital Management LLP would take an 80.1% stake in Chrysler, Mr. Bernhard, the former No. 2 executive at Chrysler and now a Cerberus adviser, has taken an increasingly visible role at his old employer.

    The day after DaimlerChrysler announced its plan to sell a majority stake in Chrysler to Cerberus, Mr. Bernhard was at a meeting with Chrysler Chief Executive Tom LaSorda. The same day, Mr. Bernhard, who was Chrysler's chief operating officer during its turnaround effort earlier in the decade, attended crucial meetings with Chrysler's union leaders, along with Mr. LaSorda and Cerberus founder Stephen Feinberg.

    Mr. Bernhard, 46 years old, is making the rounds at Chrysler's design studios, pointing out in detail what he likes and what he doesn't like and doling out assignments to employees the way he used to when he was No. 2 at Chrysler to Dieter Zetsche, now Daimler's chief executive, people familiar with the matter said.

    Company officials have stressed that Mr. LaSorda will remain chief executive. Mr. Bernhard, however, is poised to have a prominent role, as well. A person familiar with the matter says he will answer to Mr. Feinberg, not Mr. LaSorda, on Chrysler's performance. Mr. Bernhard already has an office on the executive floor at Chrysler's headquarters.

    Familiar Face: Chrysler alumnus Wolfgang Bernhard, now a Cerberus adviser, has a key role at Chrysler.

    At the Top: Officials stress that Tom LaSorda will remain CEO, but he will work closely with Mr. Bernhard.

    Getting Along: Observers say two executives in lead roles could be a challenge, but their skills may also complement each other.

    Mr. Bernhard isn't a "background kind of guy," says Canadian Auto Workers union President Buzz Hargrove, who praises Mr. Bernhard as straightforward, bright and tough. "He was always good to deal with because you could always hold him to his word and if he said a problem would be solved, it would get solved," Mr. Hargrove said.

    Many at Chrysler, including Mr. LaSorda, who worked under Mr. Bernhard in the past, say they welcome his return. Whether the smooth sailing will last remains to be seen, especially if Mr. LaSorda's restructuring plan fails to deliver better financial results fast enough. Chrysler had a $1.48 billion operating loss last year as it grappled with a consumer shift to more-fuel-efficient cars and high costs in North America, and it projects it will return 2.5% profit on sales by 2009, which Mr. LaSorda has acknowledged is a modest goal.

    Messrs. Bernhard and LaSorda weren't available for comment for this article.

    Cerberus and Chrysler have made it a point to emphasize that Mr. LaSorda is in charge at Chrysler, trying to quash speculation that Mr. Bernhard could take over his job. Mr. Bernhard won't be a part of Chrysler's executive team, the company says.

    Cerberus is known for expecting fast turnarounds, and a person familiar with the matter said Mr. Bernhard will help keep the pressure on Mr. LaSorda and other Chrysler executives to bring Chrysler back in the black.

    Catherine Madden, a senior auto analyst with research company Global Insight, said Messrs. LaSorda and Bernhard may establish a nontraditional relationship at Chrysler, which could work to their advantage. She noted that at General Motors Corp., Vice Chairman Bob Lutz is in the media spotlight as often as Chairman and CEO Rick Wagoner. But the roles of Mr. Lutz and Mr. Wagoner are clear, with one being a product guru and the other a finance man.

    Messrs. LaSorda and Bernhard also have complementary attributes, with Mr. LaSorda having a strong manufacturing background and Mr. Bernhard having a knack for products.

    Ms. Madden said if it appears the two men share leadership roles, it would present a challenge, as employees need to know who is in charge and have confidence in that person. The situation must not deteriorate "into a challenge between the two people. Only time will tell if this can last."

    Mr. LaSorda said this month that he and Mr. Bernhard are close friends and it would be "crazy not to tap him," given his experience and talents when it comes to product development, cost cutting and operations. Mr. LaSorda also said he doesn't have an ego when it comes to asking for help when it is needed, and he will look to Mr. Bernhard when he wants his assistance.

    "I've got a great bench at my disposal," Mr. LaSorda said.

    Mr. Bernhard was hired by Cerberus this year following a turbulent three-year period during which he sought to lead wrenching overhauls at two storied auto makers, Mercedes-Benz and Volkswagen, only to be forced out after clashes with his superiors.

    In 2004, DaimlerChrysler named Mr. Bernhard head of Mercedes. The company rescinded the appointment three months later, after Mr. Bernhard clashed with then-CEO J├╝rgen Schrempp over corporate strategy. Mr. Bernhard left the company later that year.

    [New Starts]

    Mr. Bernhard then went to Volkswagen AG to eventually become head of the core Volkswagen brand. At Volkswagen, Mr. Bernhard persuaded the company's powerful German union to accept a 20% wage cut for some workers by threatening to shift production of a planned sport-utility vehicle outside Germany. VW Chief Executive Bernd Pischetsrieder, who had backed Mr. Bernhard, was pushed out late last year, and Mr. Bernhard followed in January.

    Now, Mr. Bernhard could get an opportunity to prove himself again, albeit in a different role. When Mr. Bernhard was at Chrysler the first time, he and Mr. Zetsche helped lead a turnaround that for a time appeared to prove that a big Detroit auto maker could overcome the handicaps of high-cost labor and weak brands with a combination of aggressive cost cutting and smart, stylish vehicles. The Chrysler 300 sedan, brought out on Mr. Zetsche's and Mr. Bernhard's watch, was a runaway hit.

    The success proved fleeting, and the company was back in the red in 2003 and again in 2006.

    This month, Mr. LaSorda acknowledged that the pressure is on to produce a durable, sustainable recovery at Chrysler, a challenge that has eluded leaders of the company since Lee Iacocca. Mr. LaSorda says he and Cerberus have faith in his restructuring plan that calls for 13,000 job cuts and a $3 billion investment in engine systems. Mr. LaSorda has also said he knows his job could be in danger if he doesn't produce results, but he said that would be the case no matter who owned Chrysler.

    "They [Cerberus] have deep pockets, but we've got to deliver," Mr. LaSorda said at a news conference.

    Write to Gina Chon at

    This Day in Auto History: 31 MAY

    Automobile Quarterly
    Automobile Quarterly
    This Day in Auto History:

    Daniel James Moran of the Continental Oil Company is born in Cygnet, OH
    The first motorized taxicab service in the United States is started in New York City
    The Sterling-Knight Motors Company announces the purchase of the Supreme Motor Company of Warren, OH and its intent to begin production of a 6-cylinder car designed by Pete Sterling
    The Socony-Vacuum Corporation changes its name to the Socony-Vacuum Oil Company
    Thomas S. Derr, a Stanley steam car mechanic who sporadically built the American Steam Car 1926-1942 using rebuilt Stanley engines and Hudson chassis, dies in Waban, MA at age 51

    Source: Automobile History Day By Day, by Douglas A. Wick

    Chrysler At The Gates Of Hell

    Jamie Lincoln Kitman| BIO


    Your tweedier auto writers used to like to sit around bemoaning the idiocy of Wall Street and its single-minded focus on short-term results, to hell with the publicly-held car companies' long-term prospects -- as expressed, for instance, in quaint matters like a firm's commitment to engineering and manufacturing excellence or, heaven forfend, the well-being of its workforce. Now with the pending sale of Chrysler to the private-equity firm cum hedge fund Cerberus Capital Management, we same industry scribes may soon find ourselves longing for the transparency, accountability and kindly benevolence of publicly held companies.

    If there were ever an example of all that's wrong -- and all that's going to be wronger -- with American industry, it's to be found in the Chrysler saga.

    Many will know Chrysler, then America's number three domestic auto maker, was swallowed in 1998 by Daimler-Benz at the behest of its swashbuckling former chairman, Juergen Schrempp, an erstwhile diesel mechanic (and, by all accounts, world-class megalomaniac,) for $36 billion. Fewer will recall that this so-called "merger of equals" immediately cost tens of thousands of workers their jobs and the Chrysler executives who remained most every scintilla of their authority. Soon afterwards, Chrysler's scrappy Plymouth division was given an ill-advised trapdoor, its sales volume lost forever. But such was the cost, the unsentimental Germans explained, of realizing the "synergies" of the two companies.

    Ah, synergy. Nine years later, Cerberus has had to scare up just $6 billion to buy Chrysler, the market evidently concluding that Daimler's magic touch, in nine short, synergistic years, had caused Chrysler to shed an embarrassing 80% of its value. Capital is fickle, Apple iPhones are sexier, but, still, you gotta say, Nice work, herren!

    Addressing his firm's $30 billion miscue, Daimler's current chairman and former Schrempp golden boy, Dieter Zetsche, shared a belated realization. "The American volume customer is not willing and is probably not able to pay premium prices for premium technologies."

    "Well, excuse us!" perhaps we ought to have said. But, instead, the statement caused many who'd driven Chrysler's current model line to fall about laughing, as, aside from the firm's rather successful Chrysler 300 model, which shared some of its better pieces with Mercedes' E-Class, not a single Chrysler product boasts anything remotely approaching premium technology (nor, it should also be noted, are its prices "premium;" people don't buy the cars in spite of their low prices - they're that unimpressive.) Indeed, if anything, Daimler expanded and fortified Chrysler's already robust reputation for building crap automobiles, while the merger can also be credited for helping the German firm concomitantly crater its own 100-year-old name for unassailable quality.

    Back in Michigan, the sad fact is the sainted memory of Walter P. Chrysler, who prided himself on his firm's engineering excellence, (hydraulic brakes, anyone?) has been being besmirched hardcore since the 1970s. That was the first time the good ship Chrysler began to list on account of its executives' belligerent refusal to acknowledge rising gasoline prices and aggressively develop smaller cars. In the 1970s, Chrysler circled its enormous sedans, Conestoga-wagon style, while the energy crises raged; post-9/11, after Daimler took over, the new German-inflected Chrysler sent forth a bewildering array of thirsty SUVS and new and unnecessary Jeeps (a Chrysler division since 1987) to miss the mark.

    To be fair, there were some clear benefits to the 1998 merger. For instance, Chrysler chairman Bob Eaton was persuaded to step away from the boardroom table with a sum not unadjacent to $61 million, his trusted deputy, Robert Lutz, today the understandably spry 75-year-old major domo of General Motors product development, availed himself of a $25 million golden parachute, while 30 other top Chrysler executives split another $300 million, making for some very soft landings indeed. Perhaps their haste to scarper indicated they knew something the market and Daimler didn't, like the fact that a company whose profitability was solely dependent on sales of retrograde SUVs and pickups was worrisomely vulnerable to upturns in gasoline prices, a widely anticipated wave of new Asian competition, and the inevitably shifting pendulum of automotive fashion.

    By all accounts, the purchase price Cerberus paid will be dwarfed by $18 billion in estimated pension and healthcare obligations owed by Chrysler to its retirees and UAW workforce, a sum large and scary enough that it was widely deemed worthwhile for Daimler to walk away from the whole shebang just to be rid of it. And here is where Chrysler's new private equity ownership is likely to come in handy.

    Its hasty promises to union leaders to the contrary, there is every reason to believe that Job No. 1 will be shirking those obligations to workers. And while lawyers, investment bankers and the Cerberus brains trust are working around the clock in aid of this and the likely Job No.2 (outsourcing production to China,) Cerberus management has one key leg up on those who also proposed to buy it, especially the unions who reported they couldn't even get Daimler or its bankers on the phone to discuss an employee buyout option or its possible terms.

    Cerberus (named, ominously, after the three-headed dog of Greek mythology, who guarded the gates of fiery Hades,) is thick with Republican Party faithful. Biographical info on Cerberus founder, Stephen Feinberg, is notoriously hard to come by, but this titan of industry is known to have cut his teeth (and presumably learned an elevated sense of ethical conduct) alongside Michael Milken at Drexel Burnham Lambert during the go-go 80s. And Feinberg hasn't been too reclusive to be a major Republican Party donor. While he continues to keep his own profile low, Feinberg has also brought in some high-profile Republican talent to help run the show at Chrysler. There is, for instance, the company's new chairman, John Snow, who was there to announce the sale in Germany. A non-entity with little experience in the automobile business, Snow's ties to the Republican establishment and to the Bush administration, as one of its former treasury secretaries, point to his prospective utility where rewriting the rules of labor relations and pension accounting are concerned. Former defense secretary Donald Rumsfeld also counts himself among the elite crew whose wealth has been dunked into the smokestack industry pool by the Cerberus' management team.

    Where and why do they find these bozos? Next thing you'll know they'll be hiring GOP stalwart and former Vice President Dan Quayle. Oh wait, they already did. The man who forgot how to spell potato is chairman of Cerberus' global investments unit. Can you imagine corporate officers accountable to shareholders choosing him for an important job?

    Fans of oligarchy will appreciate, too, that Cerberus' first investment in the automobile business was the purchase last year of General Motors Acceptance Corp., GM's captive finance arm, which underwrites hundreds of thousands of car loans and leases every year. With the keys now to Chrysler Financial, the huge finance arm of Chrysler, included in the sale of America's once-again third largest car manufacturer, the opportunities for synergy (and predatory loan practices) will once again abound. Hades, here we come.

    Cerberus/Chrysler Deal a Snow Job?

    TCC - - In “Chrysler at the Gates of Hell,” on the Huffington Post blog, Automobile Magazine’s Jamie Kitman ventures to say that after Cerberus Capital LLC, the owners of the newly named Chrysler Holdings LLC, is through with Chrysler and the UAW, publicly traded companies — often maligned for having short-term returns in sight with long-term strategies left to suffer — will look benevolent in comparison. He also speculates that more predatory loan practices are just around the corner as Cerberus, which bought GMAC last year, now also has access to Chrysler Financial.

    But more importantly, one tidbit that Kitman mentions, which has been a sin of omission for many news outlets in recent weeks, is that three ex-politicos, each fallen from grace in the political realm, are involved with Cerberus, with formerly much-ridiculed Vice President Dan Quayle helping steer the well-stocked ship. Quayle is Chairman of Cerberus’ Advisory Board, and has been heavily involved with the investment firm since 2000. Additionally, former Treasury Secretary John Snow and former Defense Secretary Donald Rumsfeld are also involved in Cerberus.

    In recent years the once much-ridiculed VP has served as the door-opener for Cerberus, helping to get the group into new markets that would be otherwise difficult and buying them direct access to high-ranking execs. In fact, Quayle helped the private firm establish an office in Germany in 2003 (in of all places Frankfurt), according to information in the former VP’s official bio.

    Kitman remarks, “The man who forgot how to spell potato is chairman of Cerberus’ global investments unit. Can you imagine corporate officers accountable to shareholders choosing him for an important job?”

    UAW president Ron Gettelfinger has been widely criticized in recent weeks for accepting (and endorsing) the purchase of Chrysler by Cerberus before even meeting with the group. Cerberus had provided a written statement saying that there were no plans for additional job cuts directly connected to the sale, but in recent weeks there has been widespread speculation that the group is contemplating how to streamline, or possibly outsource, a significant portion of Chrysler’s production.—Bengt Halvorson

    Wednesday, May 30, 2007

    Mazda’s Rotary Turns 40

    What is it about anniversaries that always draw our attention, well, mine, anyway? Considering all the news releases that cross’s threshold each day, I might have ignored one from Mazda had it not noted that today marks the 40th anniversary of the Japanese automaker’s first production rotary vehicle. In the decades since, the automaker has continued rolling out the unusual, high-power alternative to the piston engine – nearly 2 million and counting – which is currently offered in the sporty RX-8 model, here in the U.S.

    Now, to be more precise, one could date the so-called Wankel engine all the way back to 1919, when the then-17-year-old Felix Wankel first dreamed up the idea. And we mean dream. The idea came to him in the middle of the night, and the next day, he vaguely recalled telling friends in slumberland that, “my car has a new type of engine: a half-turbine half-reciprocated engine. I invented it!” Actually, it took the young engineer another 38 years to make his midnight vision a functional reality.

    Unlike a conventional, internal combustion engine, the rotary has no reciprocating pistons. Inside the engine block, shaped a bit like a figure eight, is a triangular rotor. It operates much like a regular four-stroke engine, with the standard intake, compression, combustion, and exhaust functions – all while rotating, motion turned into amazingly smooth driving force.

    When Wankel and the German company, NSU, produced the first effective prototype – in 1957, exactly a half-century ago, since we’re tracking anniversaries – almost 100 different companies lined up for licenses. That included manufacturers as diverse as the American automakers, General Motors and American Motors – which originally designed the bizarre Pacer to house a rotary. Unfortunately, the upcoming energy shocks effectively killed off those efforts, but we’re getting ahead of ourselves.

    Mazda was even more committed to the rotary concept, debuting the R16A, a mid-engine sports car concept, in 1965, and then launching production of the Cosmo Sport, with a 110-horsepower twin-rotor, on May 30, 1967. Within a short time, the maverick manufacturer was hoping, the Wankel would become its primary powerplant.

    My own experience with rotary power dates back to 1973, when I convinced my family to cough up the down payment on a brand-new Mazda RX-2. It was distinctive looking and fast as I could hope for, a real alternative to the muscle cars most of my friends owned down the Jersey Shore. Only a college professor’s BMW 2002tii could give me a real run for the money.

    Mazda might have made it big but for several issues. There was the first energy crisis which revealed that while phenomenally powerful, rotaries offered mediocre mileage, at best. Worse, my own RX-2 spent more time in the shop than it did running. Bad dealers didn’t help, but it turned out the early seals at the tips, or rotor corners, usually failed catastrophically. Intriguingly and inadvertently, that provided a platform for one of the great names in quality and customer satisfaction. The first to uncover the unexpected technical problem was the then-young J. David Power. He parlayed that research into the California-based research empire that still bears his name.

    My own situation ended far less fortuitously. After repeated failures, I finally scrapped my RX-2 as a total loss. But I remained fascinated by the technology. After nearly going broke, a chastised Mazda discovered new and far more reliable seals, the ones used in the RX-8 today. Current rotary designs also make more power and deliver better mileage. And Mazda is even developing a version that could run on clean-burning hydrogen.

    So, party on, rotary engine, and Happy Anniversary.

    More than one million new V8 diesels planned for 2010

    By John Mortimer
    29 May, 2007
    Source: Automotive World
    By the end of the decade it is possible that manufacturers in North America will have the capacity to produce more than one million V8 diesels per year. John Mortimer reports

    This Day in Auto History: 30 MAY

    Automobile Quarterly
    Automobile Quarterly
    This Day in Auto History:

    The Erie & Sturgis gasoline carriage designed and built by James Philip Erie & Samuel D. Sturgis is given its first test drive in Los Angeles, CA
    Reo makes its racing debut as Daniel Wurges wins two of three races driving the Reo Bird at the Empire City track in Yonkers, NY
    William C. Durant and Louis Chevrolet announce plans to build a new automobile, the Chevrolet
    Tommy Milton wins the Indianapolis 500 in the Frontenac Special
    Co-drivers Lora “L. L. “ Corum and Joe Boyer win the Indianapolis 500 in a Duesenberg, the marque’s first victory of this race

    Source: Automobile History Day By Day, by Douglas A. Wick

    Chrysler dealers eager for fresh start in U.S.

    Justin Sullivan / Getty Images, a research Web site for car buyers, predicts Chrysler sales will increase 6.9 percent in May while most rivals will see declines.

    Bringing back the pride

    Josee Valcourt / The Detroit News

    John Schenden, president of Pro Chrysler-Jeep in Denver, put his expansion plans on hold earlier this year with the future of Chrysler in limbo.

    "Do I go ahead with this plan? Do I wait and see?" he said. "I was sort of dragging my feet a little bit."

    But when DaimlerChrysler AG announced last week that it was selling the majority of Auburn Hills-based Chrysler to New York-based private equity firm Cerberus Capital Management, the decision became much easier.

    "I had a lot of concerns … but now I'm going full force to get this done," Schenden said. "We're an American company again."

    Many Chrysler, Jeep and Dodge dealers nationwide appear eager to start fresh with Cerberus and put the contentious and difficult past year behind them.

    Chrysler CEO Tom LaSorda recently told employees that dealer orders were headed back up and inventories were down significantly from last year's bloated levels. And it appears customers sitting on the sidelines while Chrysler was being auctioned are coming back to showrooms., a research Web site for car buyers, predicts Chrysler sales will increase 6.9 percent in May while most rivals will see declines.

    This is welcome news to dealers who nearly revolted last year as Chrysler pushed them to order excess vehicles they couldn't sell. The tensions led to the ouster late last year of Chrysler's top sales and marketing executive, Joe Eberhardt, an ex-Mercedes officer.

    Several dealers said they were pleased that Chrysler will be an American company again after nearly a decade of German control.

    Chuck Fortinberry of Clarkston Chrysler Jeep was so moved that he commissioned a painting of a fluttering American flag emblazoned with the words "Bringing Back the Pride" to hang in his dealership.

    "There's a lot of pride that we're an American owned company again," Fortinberry said.

    After the sale was announced May 14, LaSorda sent a two-page letter to dealers explaining the transaction and reassuring them that Cerberus was committed to fixing Chrysler and not chopping it up.

    The next day, LaSorda, Steven Landry, Chrysler top North American sales executive, and Cerberus executive Leonard Tessler spoke to dealers via a Web cast.

    In the next month, dealers will gather in Detroit to talk about future products and other issues.

    "Chrysler and Jeep brands are not going to go away," Fortinberry said. "That's where the value is. That's what Cerberus bought. That's the value in the company."

    Dealers such as Gordon Farhat of Westborn Chrysler Jeep are wondering if the sale could mean that Chrysler's lending arm -- Chrysler Financial -- would be consolidated with GMAC, which is majority-owned by Cerberus.

    And although Chrysler could ramp up its push to further reduce its 3,750 sales outlets, Farhat thinks strong dealers have nothing to worry about.

    "Twenty-two of the top dealerships in the country are in Michigan," Farhat said. "Dealerships like us aren't going to go away."

    To Knoxville, Tenn.-based Chrysler dealer Jim Quinlin, the deal was close to perfect. DaimlerChrysler holding onto a 19.9 percent stake in Chrysler "means we still reap synergies with Mercedes," but "Cerberus will be able to take Chrysler private and do what they need to do get this thing fixed."

    With the automaker's future more defined, Schenden is among several Chrysler, Dodge and Jeep dealers investing in their operations.

    At Pro Chrysler-Jeep in Denver, an expansion project includes an addition acre of land as well as a renovation of the exterior and 28,000-square-foot showroom.

    Ken Zangara of Zangara Dodge in Albuquerque, N.M., plunked down some $500,000 to renovate his dealership even before the deal was announced.

    "I wouldn't have done it if I didn't think we'd be in good shape for the future," Zangara said. "We're getting a fresh opportunity. "We need to make sure that we don't foul it up again."

    Feds push back roof regulation

    NHTSA spokesman Rae Tyson said last week

    the agency was conducting additional research

    and to make sure it came up with a workable regulation.

    "We want to get it right," Tyson said.

    NHTSA now hopes to issue rule on strength requirements by late Sept., finalize in July '08.

    David Shepardson / Detroit News Washington Bureau

    In a notice posted on the Department of Transportation Web site, the National Highway Traffic Safety Administration said it would not be able to issue a final rule by Aug. 31 on toughening roof crush resistance standards as it initially promised.

    Instead, NHTSA hopes to issue a revised preliminary proposal by late September and finalize it by July 2008, as required by Congress.

    NHTSA spokesman Rae Tyson said last week the agency was conducting additional research and to make sure it came up with a workable regulation. "We want to get it right," Tyson said.

    NHTSA has not changed the federal roof standard for more than 30 years, despite updating most other major auto regulations.

    Rollovers account for 3 percent of the nation's vehicle crashes, but about one-third of fatalities. In 2005, rollover deaths increased 2.8 percent to 10,816.

    "This crash mode constitutes a disproportionate and growing segment of the nation's highway safety problem," NHTSA wrote in explaining the delay.

    In August 2005, NHTSA issued its long-awaited proposed upgrade, requiring that a vehicle roof withstand a force equal to 2.5 times the vehicle weight -- up from the current 1.5 times standard -- while maintaining sufficient head room for an average adult male.

    NHTSA estimates the new standard would save up to 44 lives a year and prevent up to 793 injuries. That strikes safety advocates as woefully inadequate. It's a "do-nothing" mandate that "will not address the pressing need to save thousands of lives from rollover crashes," said Gerald Donaldson, research director at Washington-based Highway and Auto Safety.

    Some applaud decision

    Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, praised NHTSA's decision to take more time to issue a final roof standard.

    The auto industry has generally questioned the wisdom of making roofs heavier and stronger, noting tradeoffs in fuel economy and vehicle stability. "We applaud the NHTSA for taking the time to research the issue," he said.

    NHTSA has acknowledged its initial assessment that 68 percent of vehicles could meet the proposed standard was inaccurate, in part because the government didn't test the heaviest vehicles.

    The auto alliance told NHTSA recently that at least 64 percent of vehicles on the roads wouldn't meet the standard, which means the costs of complying will be much higher than the government estimated.

    The alliance also said the new rule would add between 38 to 68 pounds to pickups and 60 to 67 pounds to larger SUVs. Going to an higher standard could add up to 270 pounds for light trucks.

    NHTSA said its new timetable is to resubmit its rule to the Office of Management and Budget by mid-June and publish its revised proposal by late September. NHTSA plans to give the public two months to comment.

    Vehicle costs would go up

    NHTSA has rejected a tougher standard requiring a vehicle roof withstand a force equal to three times the vehicle weight, in part because it would cost automakers too much -- $88 per vehicle, or $1.3 billion. That standard would have saved up to 135 lives a year and prevented 2,500 injuries, NHTSA estimated.

    The two-and-a-half-times standard would raise vehicle costs by about $17 each, including higher fuel costs, or about $285 million, NHTSA estimates.

    Automakers have asked NHTSA to loosen the proposed rules, exempt some vehicles and change testing procedures. They argue strengthening roofs is not an effective way to prevent deaths in rollover accidents, arguing that proper seat belt use and advanced restraint and stability control systems offer the best protection.

    Advocates push tougher tests

    Safety advocates disagree, and are pushing for tougher roof strength tests.

    NHTSA met with safety advocates recently to discuss alternative test procedures. On Feb. 23, NHTSA officials, including senior associate administrator Ron Medford, met in Goleta, Calif., with advocates touting a new rollover "dynamic" or moving test, as opposed to current tests, where the vehicle doesn't move.

    Congress told NHTSA in 2005 it could consider requiring a dynamic test as it upgraded its roof crush test.

    Joan Claybrook, a former NHTSA administrator who now heads Public Citizen, said a new test would do a better job of assessing the strength. "We don't like to see the delays, but we hope to get a test that lives up to what Congress required," Claybrook said last week.

    Claybrook and Robert Lange, a top safety official at General Motors Corp., said NHTSA is considering whether to require "double-sided" roof crush resistance tests. The current test only measures one side of the roof.

    This is the latest chapter in a 35-year-old controversy over roof strength regulation known as Federal Motor Vehicle Safety Standard 216.

    GM and Ford essentially drafted the regulation as it stands. In 1971, the automakers led an industrywide effort to convince federal officials to adopt a minimum standard for roof strength -- but only after their vehicle fleets failed the government's first proposed test, according to internal documents examined by The Detroit News for a series of stories in 2004.