GMAC may sell bonds again

Tuesday, September 12, 2006
GMAC may sell bonds again
Bloomberg News
General Motors Corp. is planning its bond market comeback.




General Motors Acceptance Corp., the finance subsidiary of the world's biggest carmaker, may sell the first bonds in two years once a group of buyout firms purchases a stake in the unit, said Joanne Krell, a spokeswoman for GMAC in Detroit. The sale may be completed by the end of the year, she said.

A return to the bond market would signal increasing investor confidence after the company's credit ratings were cut to non-investment grade in May 2005. GMAC debt, a benchmark for investors for more than 30 years, has rallied in the past 12 months. The difference between the yield on its $4 billion of 8 percent bonds due in 2031 and Treasuries with similar maturities is the narrowest in five years.

"At the end of the year, GMAC's probably going to be back in investment grade," said Daniel Fuss, who oversees more than $23 billion in fixed income as vice chairman of Loomis Sayles & Co. in Boston. "On that basis, the bonds are cheap."









© Copyright 2006 The Detroit News. All rights reserved.

GM Hopes Hyundai's Turnaround Plan Works a Second Time

GM Hopes Hyundai's Turnaround Plan Works a Second Time
Adopts South Korean Automaker's Warranty Deal to Signal Improved Quality
By Jean Halliday
Published: September 06, 2006





DETROIT (AdAge.com) -- General Motors Corp., battling long-term misperceptions about the quality of its vehicles, is adopting a powertrain warranty similar to the one that helped Hyundai Motor Corp. execute one of the industry's most stunning turnarounds.

Deutsch gets the assignment

Saying "we believe in our cars and our trucks," Rick Wagoner, GM's chairman-CEO, today said the automaker would beef up its powertrain warranty to 100,000 miles or five years on all its 2007 models. The coverage on most of GM's models was 36,000 miles or three years. The auto giant hired Interpublic Group of Cos.' Deutsch, Los Angeles, to handle the integrated campaign to get the word out on the improved warranty.

Speaking at a news conference at GM's headquarters here, Mr. Wagoner said the marketer has expanded its roadside assistance and courtesy transportation programs to 100,000 miles and five years. "The bottom line is GM has the best coverage in the industry," he said.

GM has known for years that prospects are unsure about the quality of its cars and trucks. In summer 2003, it kicked off a short-lived corporate ad campaign, dubbed internally "Road to Redemption" to change consumers' minds.

Signal to consumers

The latest move borrows from Hyundai, which in 1998 introduced its 10-year or 100,000-mile powertrain warranty as a signal to consumers that it had solved its quality problems. The move, coupled with simplified and better product offerings, fueled Hyundai's incredible turnaround.

Unlike Hyundai's warranty, GM's plan will allow owners to transfer the warranties when they sell their vehicles.

Mr. Wagoner said GM has reduced its warranty costs by 40% in the past five years and its initial quality rose by 11% already this year. He also used the occasion to discuss how GM's turnaround continues to take hold, while admitting the automaker still has a ways to go.

The ad campaign is themed "Elevate" and marks the second major GM assignment for Deutsch, which also has Chevrolet's Major League Baseball and its motorsports accounts. The effort breaks with a 60-second spot that will air during tomorrow night's NBC-televised NFL season opener between the world champion Pittsburgh Steelers and the Miami Dolphins and will continue on premium network and cable sports, news and entertainment programming.

The blitz will include a heavy online presence, an experiential out-of-home component in several major markets across the country, newspapers and point-of-sale materials.

Perception gap

Deutsch created several videos playing on YouTube that are not identified as part of GM's warranty push, but play off the TV commercial in which several 2007 GM models elevate and fly above gridlocked traffic in major cities.

"There's a remarkable gap between the perception of GM quality and the reality," said Eric Hirshberg, president-chief creative officer at Deutsch. "We found that the best way to deal with that was simply to ignore it. If you tell people, 'We're better than you think we are,' they don't believe you. Whereas if you come from a place of utter and complete confidence, people feel it and respond. So we shed the baggage and went on offense."







Copyright © 1992-2006 Crain Communications




© Copyright 2006 The Detroit News. All rights reserved.

No Date Set: President Promises Big Three Meeting After Elections

No Date Set: President Promises Big Three Meeting After Elections
Date posted: 09-06-2006




WASHINGTON, D.C. — The White House said on Tuesday that President Bush has rescheduled his meeting with the heads of the domestic automakers to discuss such issues as alternative-fuel technology and trade issues.

The new meeting will be held after the November elections, at an unspecified date.

The failure to reschedule the meeting — originally slated for May and then canceled — has been widely regarded in Detroit as a major snub on the part of the administration.

The new meeting was prompted by complaints that Bush was scheduled to attend a GOP fundraiser in suburban Detroit on Friday without penciling in Bill Ford, Jr. — or Ford's just-named new CEO, Alan Mulally — Rick Wagoner or Tom LaSorda on his calendar.

What this means to you: What's a meeting if you haven't set a firm date? If Bush has time to meet with the American Idol contestants, he'd better make some time for one of the nation's most crucial industries.





© 1995-2006 Edmunds.com, Inc.




© Copyright 2006 The Detroit News. All rights reserved.

The Truth About GM’s New Powertrain Warranty

The Truth About GM’s New Powertrain Warranty
By Robert Farago
September 7th, 2006 3,250 Views




It's clear that GM's new powertrain warranty– 5 years, 100k miles– has set TTAC tongues wagging. To get on top of the story, I phoned Philip Reed, Consumer Advice Editor at Edmunds.com. Reed has written a book called Strategies for Smart Car Buyers, which covers the entire car buying process: selling, leasing, buying, used cars, certified cars, the whole schmeer. Reed knows what's what when it comes to warranties and, equally important, their value to both customer and manufacturer. According to Reed, GM's announcement could well be a great landing at the wrong airport.


Standard Podcast [10:23m]:



© 2004-2006 The Truth About Cars




© Copyright 2006 The Detroit News. All rights reserved.

Ford and G.M. Talk of Quality as They Try to Court Buyers

September 7, 2006
Ford and G.M. Talk of Quality as They Try to Court Buyers
By NICK BUNKLEY




DETROIT, Sept. 6 — After years of trying to court customers with ever-larger discounts, General Motors and the Ford Motor Company are now vying to prove that each is more willing to stand behind the vehicles it builds.

They also hope to persuade consumers who started buying Toyotas and Hondas out of frustration that the quality problems that have plagued American vehicles have been fixed.

G.M. said on Wednesday that it would extend warranty coverage of the engine and transmission on all 2007 vehicles to five years or 100,000 miles, whichever occurs first. Most vehicles previously came with a powertrain warranty of three years or 36,000 miles, which is the industry standard.

The move allows G.M. to boast that it offers “the best coverage of any full-line automaker,” two months after Ford extended warranties on its vehicles and claimed that distinction. Both automakers took a cue from Hyundai, the South Korean automaker whose reputation for poor quality nearly drove it out of the American market before it introduced a 10-year, 100,000-mile warranty in 1998. Hyundai’s annual sales have more than quadrupled since.

“Some people don’t put us on their consideration list because of their perception of some historical problems,” G.M.’s chief executive, Rick Wagoner, said on Wednesday outside the company’s headquarters.

Mr. Wagoner said G.M. had significantly reduced the amount it spent repairing vehicles and decided to lengthen warranties as part of a strategy to enhance the value of its vehicles.

Although Ford and the Chrysler division of DaimlerChrysler indicated that they had no plans to match G.M.’s offering, analysts said that warranties had emerged as the latest way for Detroit’s automakers to try to set themselves apart.

“This is a method of providing an additional benefit to the consumer without using incentives,” said Tom Libby, senior director of industry analysis at J. D. Power and Associates, which surveys consumers on vehicle quality.

But whether car shoppers will respond to longer warranties is unclear. Warranties usually appear low on the list of reasons consumers buy a vehicle, according to J. D. Power data.

At the same, Wall Street often dislikes longer warranties because they expose automakers to more risk.

“It’s a dangerous game to play” unless repair costs are truly under control, said David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “This is an area that you can get into a lot of trouble.”

Ford, which covers powertrain repairs for up to five years or 60,000 miles on most vehicles and six years or 70,000 miles on Lincoln models, said dealers liked the change. The protection, like G.M.’s, can be transferred if the vehicle is sold.

“It’s been a very good closing tool on the showroom floor,” said a Ford spokesman, Jim Cain. “Over time, we expect that it’s going to have a very significant impact on purchase consideration.”

But it could also have the opposite effect on some potential customers.

Some automakers, particularly those who have honed reputations for building high-quality vehicles, view longer warranties as “a sign of weakness,” Mr. Libby said. “The consumer starts to wonder, ‘Is there a reason I need this?’ ”




Copyright 2006 The New York Times Company




© Copyright 2006 The Detroit News. All rights reserved.

Pontiac Firebird, Fiero set to return?

Pontiac Firebird, Fiero set to return?




It's no secret that General Motors is working on a new Pontiac coupe based on the 2009 Chevrolet Camaro. What's less certain is the name of the vehicle. GM Vice Chairman Bob Lutz has referred to project with the GTO moniker, but some recent reports have suggested the Firebird name will be used instead. On October 6th, 2006, General Motors' "Firebird" trademark will be 'published for opposition' — a required step in the trademark process. While the automaker has long held rights to the name, the recent republication seems to suggest the nameplate could be revived. Meanwhile, the automaker also reregistered the Fiero name in late June. We can only imagine the name might be intended for the much-rumored Pontiac Solstice coupe. However, there's little evidence to back this hypothesis. (Firebird illustration by Germany's Chrom und Flammen.)


Filed in "Pontiac",





All contents copyright Leftlane News 2006.



© Copyright 2006 The Detroit News. All rights reserved.

Carmakers seek end to steel tariffs

Friday, September 08, 2006
Carmakers seek end to steel tariffs
Technical improvements, retiree benefits drain mills
Ken Thomas / Associated Press






WASHINGTON -- A coalition of U.S. and Japanese automakers wants to end penalty tariffs on certain types of steel, saying the measures make it difficult to remain competitive in the global marketplace.

Industry officials said it marked the first time the six automakers have joined forces on a trade issue. The group includes General Motors Corp., Ford Motor Co., DaimlerChrysler AG, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

The U.S. International Trade Commission is holding a hearing on Oct. 17 to consider whether it should end current penalty tariffs on "corrosion resistant" carbon flat steel products.

The orders were first put in place in 1993. The ITC will decide whether they should remain for another five years.

Ken Cole, GM's vice president of government relations, wrote in a letter to members of Congress that the six companies collectively buy more than $200 billion a year in "materials, parts and services" for its U.S. operations and all six "buy the overwhelming amount of the steel used in our U.S. operations from U.S. steel mills."

"The strength of our vehicle assembly operations is reliant upon the ability to obtain key materials dependably and at globally competitive prices," Cole said in a letter obtained by the Associated Press.

Steel manufacturers have said the protections are necessary to help them remain financially viable while implementing technical improvements and fund retiree benefits. John Armstrong, a spokesman for U.S. Steel, noted that automakers have appeared previously at ITC hearings against the steel industry. "We do think we have a meritorious case. We do believe it will be decided on those merits and we believe we should prevail," Armstrong said.

Automakers contend the tariffs drive up the cost of steel and lead to limited supplies. They also say the steel industry has largely rebounded in recent years and no longer needs the protections.

Rep. Joe Knollenberg, R-Mich., urged House colleagues in a Sept. 1 letter to support the automakers "in its effort to terminate these unnecessary trade restrictions."

"Our automotive industry must have access to affordable corrosion resistant steel to compete," Knollenberg wrote.








© Copyright 2006 The Detroit News. All rights reserved.

Vehicle stickers get crash ratings

Friday, September 08, 2006
Vehicle stickers get crash ratings
Safety agency's 'Stars on Cars' initiative will be required on all new cars and trucks by Sept. 2007.
David Shepardson / Detroit News Washington Bureau







WASHINGTON -- The ubiquitous window sticker found on the 17 million new cars and trucks sold annually in the United States is getting its first redesign in 21 years.

The stickers on all new vehicles will be required to display crash-test safety ratings by Sept. 1, 2007, under a new rule finalized Thursday by the National Highway Traffic Safety Administration.

The initiative is dubbed "Stars on Cars" because the stickers will include the number of stars a vehicle earns in front and side crash tests, and its rollover rating. A five-star rating is the highest mark in each category.

NHTSA administrator Nicole Nason said the additional safety information will help drivers make better choices.

Consumers will see the stickers "and demand the safest car possible," she said.

Joan Claybrook, head of the safety advocacy group Public Citizen, said the rule will pressure automakers into making safer cars.

"If they have a bad rating, they're going to be worried about it because it's going to be right there in the consumer's face," said Claybrook, a former NHTSA administrator under President Jimmy Carter.

Honda Motor Co. has been one of the most outspoken automakers in support of the rule and already puts the ratings on all of its window stickers.

"This is part of our safety for everyone campaign," said Edward Cohen, vice president for government relations at Honda.

The new rule comes despite sharp criticism of the tests that NHTSA uses to rate vehicles.

The Government Accountability Office said in a 2005 report that NHTSA's rankings offer "little incentive" for the automakers to improve because most vehicles score either four or five stars.

The GAO also noted that Japan, Australia and the European Union perform pedestrian safety tests, something NHTSA doesn't require. NHTSA also has no pedestrian auto safety requirements, unlike its counterparts abroad.

Nason said NHTSA is studying the GAO recommendations.

The Insurance Institute for Highway Safety, a nonprofit research organization funded by insurance companies, gives vehicles without side-impact air bags significantly lower ratings than NHTSA.

No car without side air bags tested by the insurance institute has received a rating better than "poor," said spokesman Russ Rader, adding that most of those same vehicles get four or five stars from NHTSA.

"More information is a good thing but stars and cars doesn't give consumers the full picture," Rader said.

The principal difference between the institute's tests and NHTSA's is that the institute's test includes the equivalent of an SUV or pickup hitting the test car, while NHTSA uses the equivalent of another car.

Side impacts are the second most common type of fatal crashes after front crashes. About 9,700 people were killed in side impacts in 2004.

In newer model crashes, 51 percent of driver deaths now occur in vehicles struck in the side, compared to 44 percent for front crashes, the insurance institute said.

General Motors Corp. already puts crash test data on most of its vehicle stickers, but it's more limited than what the federal law will require next year. GM will begin rolling out the new stickers in February, spokesman Greg Martin said.

NHTSA said it expects nearly all pickup trucks will get the new stickers with crash test ratings, although automakers are not required to put that information on the stickers.

Because of a quirk in the original 1958 sticker law, pickup trucks don't have to have a window sticker -- not to mention one with the safety data -- but nearly all manufacturers are going to comply with the new rule anyway, including GM, Ford Motor Co. and DaimlerChrysler AG.

Fuel economy information will also be presented in a new way on vehicle window stickers. Later this year, the Environmental Protection Agency will unveil a redesigned fuel economy box for window stickers, said spokesman John Millet. The mileage figures are also expected to be lower across the board.

Under new testing methods, the fuel economy estimates for city driving in most vehicles will drop 10 percent to 20 percent from current figures, depending on the vehicle. The highway mileage estimates will drop 5 percent to 15 percent, according to the EPA. The new test methods are designed to reflect real-world driving conditions, such as using air conditioning and idling for a long time in traffic jams.

To get more information on NHTSA's safety ratings, go to safercar.gov. To see the Insurance Institute's ratings, go to IIHS.org.

You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.









© Copyright 2006 The Detroit News. All rights reserved.

GM to hand over three old factories to Anderson

Friday, September 08, 2006
GM to hand over three old factories to Anderson
Associated Press





ANDERSON, Ind. -- Officials hope General Motors Corp.'s gift of three empty factories that once employed thousands will help the city's economic recovery.

The Detroit-based automaker is donating the plants and more than 300 acres of property to the city. The city hopes to market the former industrial sites to new developers.

"(GM's) cooperation gives us the ability to bring new investors, to have control over buildings and land," said Rob Sparks,chairman of the city's Board of Public Works. "This will be a partnership as we try to redevelop, and we're thankful to work with them."

The city about 25 miles northeast of Indianapolis once had some 27,000 GM workers, but only 700 employees at Delphi Corp. -- which spun off from GM in 1999 -- remain.

City officials have been negotiating with GM to take possession of the properties for seven years. GM already donated one former plant to the city, which sold it for $3 million, providing the seed money for a small business incubator.

GM has agreed to continue to clean up environmental contamination and will keep property with the worst environmental problems, city spokeswoman Connie Smith said.

Once GM hands over the buildings to the Redevelopment Commission, the automaker won't have to pay property taxes on them. Those taxes total more than $1 million a year.

Information from: The Herald Bulletin, http://www.theheraldbulletin.com









© Copyright 2006 The Detroit News. All rights reserved.

Cadillac XLR-V roadster puts all other vehicles made in U.S. to shame

September 6, 2006
2007 Cadillac XLR-V roadster
Product Preview
Cadillac XLR-V roadster puts all other vehicles made in U.S. to shame
By Paul Lienert / Special to The Detroit News





ANN ARBOR -- The 2007 Cadillac XLR-V is not only the best Cadillac on the market today, it may be the best car built in America, period.

Priced at a cool $100,000 (including shipping and a $1,700 gas guzzler tax), this sharply chisled two-seater is a formidable competitor to one of the world's best roadsters, the Mercedes-Benz SL55 AMG, which costs about $30,000 more.

From almost every angle, the XLR-V, a high-performance version of XLR, is darn near perfect, with just a few quirks and quibbles.

The XLR-V starts with a special motor -- a supercharged, 4.4-liter version of the highly regarded Northstar DOHC V-8. The engine drives the rear wheels through a new Hydra-matic six-speed automatic transmission with manual-shift capability. The supercharged V-8 not only sounds terrific under full throttle, it delivers an ample 443 horsepower and 414 pounds-feet of torque -- enough to rocket this sled from rest to 60 in about 4.9 seconds.

Which is only a sliver slower than the SL55 AMG, which packs a much larger and more powerful supercharged, 5.4-liter V-8 rated at 510 horsepower. But the Mercedes two-seater also outweighs the XLR-V by about 550 pounds, and it gets only a five-speed automatic. The Cadillac also has a decided edge in fuel economy, if that matters; its EPA city/highway numbers are 15/22 miles per gallon; the Mercedes is rated at 14/19.

The XLR, as many enthusiasts know, shares its basic underbody architecture with the Chevrolet Corvette; in fact, the Cadillac roadster is built on the same assembly line in Bowling Green, Ky. But the XLR-V gets some extra tweaks that lend it an air of greater sophistication, even though the $66,000 Corvette Z06 is considerably lighter, more powerful and more agile in terms of pure performance.

Under the skin, Cadillac has fitted its magnetic ride control, which automatically adjusts the suspension to compensate for issues like pavement conditions and vehicle speed. On the V-series, the settings are a little firmer than on the standard XLR. The V model also gets larger brakes, a rear stabilizer bar, a larger front stabilizer, stiffer bushings and larger wheels and tires, among other modifications.

Naturally, the XLR-V also shares such standard XLR equipment as stability and traction control, and Magnasteer power rack-and-pinion steering. Even with the 19-inch Pirelli run-flat tires, ride quality is generally superb -- partly a function of the generous 105.7-inch wheelbase and wide track -- while handling is crisp, controlled and exceptionally stable at higher speeds. My only complaint with the vehicle dynamics concerns the brakes, which require more pedal pressure than expected and don't inspire confidence in panic stops.

You're probably wondering how else Cadillac justifies the $21,000-plus bump in price over the standard XLR. The graphic differences are subtle, to say the least. There's the signature V-series wire-mesh grille, which looks much classier than the plasticky insert that GMC uses on its "premium" Denali models. The XLR-V also gets unique 10-spoke alloy wheels, four polished stainless-steel exhaust tips and black-finish brake calipers (you'll have to look twice to spot those).

Inside, the XLR-V is trimmed in rich-looking ebony leather with French stitching and matching perforated-suede inserts, as well as aluminum accents on the steering wheel and instrument panel. The materials, in general, are really top drawer -- just about the nicest that GM offers on any of its interiors in North America. One gripe: The exotic, grayish Zingana wood on the shift knob, steering wheel, doors and center console is not nearly as attractive or expensive-looking as the lovely eucalyptus that's offered on the standard XLR.

Another quibble is the trunk space. It turns out this car isn't the ideal vacation vehicle, unless you pack light -- very light.

I really had my heart set on piloting the mouth-watering XLR-V from Ann Arbor to the Mackinac Bridge, then taking a long, leisurely drive back home along the spectacular Lake Michigan shoreline. With the top down, of course.

Then Mrs. Lienert's patented reality check set in.

With the retractable hardtop stowed in the trunk, the XLR-V has a razor-thin 4.4 cubic feet of luggage space, which is about enough room to stash two soft duffle bags -- forget the picnic basket and golf clubs. And there's barely enough room in the two-seat cabin to stow an iPod, let alone a laptop computer.

My other issues involve mostly ergonomics in the cabin, which feels more cramped than the cockpit of the SL. From the driver's seat, the belt line is too high for comfort; with the window down, it's difficult to rest your arm on the sill, even if you're a six-footer. The position of the gas pedal is such that it puts the driver's right foot at an awkward angle. And the wide center console and transmission tunnel further encroach on leg and foot room.

The transmission tunnel also gets extremely hot to the touch over long distances -- uncomfortably so. And even though the handsome seats are heated and cooled, with power adjustable lumbar support, they're also overly firm and tend to get uncomfortable if you drive more than 100 miles in one sitting. The Mercedes seats are definitely superior.

Despite all the grousing, the XLR-V is truly exhilarating to drive. Cadillac lavishes enough high-tech features on the car to rival Germany's best, but without the unnecessarily complicated controls. Standard features include adaptive headlamps, radar cruise control, an ultrasonic reverse sensing system, rain-sensing wipers, a DVD navigation system with touch-screen controls, a head-up display and keyless access with pushbutton start/stop.

One last complaint: The power hardtop -- one of the few that looks really good when it's up -- takes nearly forever to retract or return. I counted almost to 30 and got a blast of rain in the face before the roof and power decklid to closed.

But once I got back on the local highway, goosed the throttle gently and heard the telltale growl from under the hood, pretty much all was forgiven. The XLR-V imparts that sort of magic when you're behind the wheel, rain or shine, top up or down.

So maybe I can talk Mrs. Lienert into leaving the golf clubs, picnic basket, ice chest and cosmetic bag at home on this vacation.









© Copyright 2006 The Detroit News. All rights reserved.

GM extends warranty to 100,000 miles

Thursday, September 07, 2006
GM extends warranty to 100,000 miles
Bill Vlasic / The Detroit News






DETROIT -- General Motors Corp. rolled out a 100,000-mile warranty Wednesday designed to convince skeptical consumers of the improved quality of its 2007-model cars and trucks.

The five-year extended warranty covering engines and transmissions was touted by GM Chairman Rick Wagoner as the latest evidence that the automaker's corporate turnaround is gaining traction.

"We're putting our money where our mouth is," Wagoner said at a press event outside GM's headquarters on the Detroit River.

The warranty, which covers all GM models, reflects the automaker's new emphasis on marketing the value of its vehicles rather than relying on costly incentives to pump up sales.

Wagoner cited independent surveys that rank GM's vehicles higher in quality than many of its competitors. Two GM brands -- Cadillac and Buick -- recently finished among the top five in a vehicle-dependability study conducted by J.D. Power and Associates.

"The bottom line is GM now has the best (warranty) coverage in the industry," Wagoner said. "It's something the customers want and something our employees and dealers want to offer."

Joe Serra, a large GM dealer based in Grand Blanc, said the enhanced warranty speaks volumes about the automaker's confidence in its quality.

"It's a tremendously positive step," Serra said. "GM really stepped up at the right time. Every customer we talked to wants to know what the warranty is. So it can only help."

GM's warranty on parts other than engines and transmissions will stay at 36,000 miles for most vehicles, which is the standard for many automakers. In July, Ford Motor Co. began offering a five-year, 60,000-mile warranty on powertrains for its Ford and Mercury models, and a six-year, 70,000-mile warranty on Lincoln models.

Chrysler discontinued its seven-year, 70,000-mile powertrain warranty last year after offering it for three years. It now offers a three-year, 36,000-mile powertrain warranty.

Japanese automakers Toyota, Honda and Nissan offer five-year, 60,000-mile warranty coverage on engines and transmissions.

Other automakers, notably the Korea-based Hyundai, have seen extended warranties pay off in increased sales. Expanded coverage can subtly alter a brand's image and boost showroom traffic, said one industry expert.

"GM recognizes that it needs to improve the perception of their vehicle ownership experience," said Jeremy Anwyl, president of the auto-research Web site Edmonds.com. "That will take time, but it is an important component in the company's effort to grow market share."

Stabilizing its U.S. market share is a critical component in GM's corporate turnaround effort. The company had a 24 percent share of the U.S. market through the first eight months of this year, compared to 26 percent in the same period in 2005.

Mark LaNeve, GM's North American marketing chief, said the automaker needs to promote its improved quality levels -- if only to erase previous perceptions of poor quality.

"Our quality and durability is world-class," LaNeve said. "We've taken that idea (of bad quality) off the table so customers can now evaluate our products on design and performance."

GM will promote its new warranty with an advertising blitz that kicks off tonight on the NBC broadcast of the National Football League's season opener between the Pittsburgh Steelers and Miami Dolphins.

The theme of the campaign is "Elevate," and features GM cars and trucks floating high above gridlocked traffic. The company also wrapped its Renaissance Center headquarters with a large illustration of cars hovering in the clouds as part of the campaign.

The ads promise consumers they will get a "new level of confidence" when driving a GM vehicle.

That's an important message for GM as it seeks to build confidence in its overall turnaround.

After losing $10.6 billion last year, GM accelerated its cost-cutting efforts by offering buyout or retirement packages to all of its U.S. hourly workers, and slashing costs throughout the company.

More than 34,000 manufacturing workers signed up for the so-called "accelerated attrition" program. By the end of this year, GM expects to cut an estimated $9 billion from its operating costs in North America.

"The (turnaround) story is far from complete, but it has helped build a strong sense of confidence within the GM team," Wagoner said Wednesday.

You can reach Bill Vlasic at (313) 222-2152 or bvlasic@detnews.com.









© Copyright 2006 The Detroit News. All rights reserved.

Delphi investors: GM owes $26B

Thursday, September 07, 2006
Delphi investors: GM owes $26B
Vinnee Tong / Associated Press





NEW YORK -- General Motors Corp. owes $26 billion to Delphi Corp., an investor committee for the auto parts maker said in a bankruptcy court filing.

The committee representing shareholders at Delphi said in papers filed late Monday that its calculation shows the automaker has obligations to its biggest supplier, which was spun off from GM in 1999.

GM, for its part, has filed an unsecured multibillion-dollar claim against Delphi, the Troy, Mich.-based supplier said in papers filed last month. The automaker aided Delphi in funding buyout programs for members of its two biggest unions, though it retained the right to recoup those contributions once Delphi emerges from court protection.

The equity committee made the assertion in a document to oppose a motion brought by Delphi's bondholders that will be considered Sept. 14. Judge Robert Drain of the Southern District of New York is scheduled to consider a request from the creditors committee on whether it can sue GM and certain former Delphi executives.

The creditors committee said, and the equity committee agreed, that GM used the spin-off to pass on certain retirement, health care and labor costs to Delphi, crippling it and eventually pushing it into bankruptcy. But the bondholders also have asked for a more significant role in ongoing negotiations between GM, Delphi and labor unions.

The power of those three contingents, St. John's University Professor Anthony Sabino said, has pushed even the creditors' committee to the margin, while the equity committee retains its place as the last to collect anything. He said shareholders may garner some attention from the judge, but that may not mean much.

"Shareholders are absolutely, positively last in line," Sabino said. "The minute a company enters bankruptcy, assume you have lost every penny. It's only a rare miracle when shareholders get anything."

Meanwhile, Delphi seeks the right to abandon certain supply contracts it has with GM. A hearing on that motion is scheduled to begin Sept. 28.









© Copyright 2006 The Detroit News. All rights reserved.

Chevy Suburban lives up to its big reputation

Saturday, August 26, 2006
Review
Chevy Suburban lives up to its big reputation
2007 model maintains first-class status among sport utility vehicles.
Richard Williamson / Scripps Howard News Service








It's a shame about those high gas prices.

If not for $3-per-gallon gasoline, the redesigned 2007 Chevrolet Suburban might have found a growing line of eager buyers. Given current conditions, however, the beautiful behemoth could be a tough sell. Through July, sales of Suburbans were down nearly 28 percent.

For those who really need a full-size sport utility vehicle that seats nine and can tow 8,200 pounds, the venerable Suburban remains the class act in the category.

Chevrolet even found a way to improve efficiency through an Active Fuel Management system and variable valve timing. Expecting to blanch upon reading the EPA ratings on the review vehicle, I was somewhat surprised to see that the nearly three-ton SUV could travel 15 miles per gallon in the city and 21 on the highway. For now, estimated annual fuel cost is less than $2,000.

Another surprise was the performance and handling of the big brute. Powered by a 320-horsepower Vortec V8, the Suburban responded with alacrity to pressure on the accelerator. Measuring more than 18 feet in length and 6.5 feet in width, the Suburban is not exactly a toe dancer. However, I found maneuvers in a crowded parking garage quite manageable. One tremendously helpful option is the rear camera system that automatically projects on a video screen in the center dash a remarkably sharp color view behind the vehicle. For only $195, the rear camera system is highly recommended.

On city streets, I continually wondered whether I was filling more than my lane of traffic. Fortunately, the huge side mirrors confirmed that I was driving inside the lines.

New safety features include optional head curtain side air bags and standard StabiliTrak stability control system that also reduces the chances of a rollover.

Like the Silverado pickup whose platform it shares, Suburban is offered in a wide array of permutations. LS, LT and LTZ trim can be obtained in rear-drive or 4-wheel-drive formats in 1500 or heavy-duty 2500 series.

Base prices range from $36,290 for the rear-drive 1500 LS to $41,025 for the 2500 LT.

With a 130-inch wheelbase, the Suburban's base is 14 inches longer than that of its sibling Tahoe's. If you are loyal to the GMC brand, you can get a Yukon XL that differs from the Suburban only cosmetically.

The trucks are built at GM plants in Arlington, Texas, Janesville, Wis., and Silao, Mexico.

Suburban 1500 models are powered by the 5.3-liter V8. An all-aluminum 6-liter V8 with Active Fuel Management and variable valve timing will be available later in the production cycle. A 6-liter engine with an iron cylinder block is sold on 2500 models. Several engines run on E85, a renewable fuel made of 85 percent ethyl alcohol and 15 percent gasoline.

While the Suburban 1500 can tow up to 8,200 pounds the 2500 series can tow up to 9,700 pounds.

The Z71 Off Road appearance package features more prominent fog lamps and specific grille texture, platinum chrome grille trim and 18-inch wheels with off-road tires.

While General Motors has recently broken out of its stuffy styling mode in recent years, the designers showed appropriate restraint in redoing the Suburban. Generally speaking, the slightly more rounded corners make the SUV seem less barge-like in appearance.

A large Chevy gold bowtie on a twin-port horizontal grille broadcasts the Suburban's parentage. Fog lamps and headlamps bejewel the front end. Wheel options range from 17-inchers to 20-inchers. The paint palette includes Greystone Metallic, Dark Blue Metallic, Sport Red Metallic, Bermuda Blue Metallic, Black, Summit White, Gold Mist Metallic, Amber Bronze Metallic and Silver Birch Metallic.

Thanks to an attractive side running board, access to the Suburban's passenger compartment is quite agreeable. The large cargo compartment is accessible through a liftgate that can be opened automatically if you add the $350 power option. You can also open only the glass portion of the rear gate.

If you love roomy interiors, the Suburban is definitely the SUV for you. Passenger space has grown, with more shoulder space for rear passengers. Behind the first-row seats, Suburban offers 137.4 cubic feet of cargo room. One knock on the current design is the lack of a fold-flat rear seat.

Ergonomically, the Suburban gets an A-plus. Chevy designers did not play games with the instrumentation but stuck to their successful formula of providing large, visible knobs for sound and ventilation systems, sturdy cup holders and well-placed arm support from the padded center console.

As a vehicle that has been around since 1936, Suburban hauls a huge heritage for Chevrolet. The newest version certainly maintains the image. Given the current dicey economic conditions and falling demand for super-sized vehicles, buyers who really need this kind of capacity should get a heck of a deal from their local dealer.

What's new: Redesigned exterior, improved seating comfort, stronger chassis, Gen IV small-block V-8 engines.

Pluses: Power, capacity, comfort, ergonomics, utility.

Minuses: Fuel economy, maneuverability.

Bottom line: Best of the full-size sport utility vehicles.

Richard Williamson writes about automobiles for Scripps Howard News Service.





2007 Chevrolet Suburban LT

TYPE: Rear-drive, half-ton, nine-passenger, five-door, full-size sport utility vehicle.

PRICE: $36,865 base, ($33,910 invoice) $47,240 as tested.
WHERE BUILT: Silao, Mexico.

KEY COMPETITORS: Ford Expedition, Lincoln Navigator.

POWER: 5.3-liter, 320-horsepower, Vortec V8; four-speed auto transmission with tow/haul mode.

FUEL ECONOMY: 15 city, 21 highway mpg, estimated annual fuel cost $1,940.

CHASSIS: Independent front suspension, coil over shock, optional Autoride real-time damping; five-link rear with coil springs; all-speed traction control; power rack-and-pinion steering; power disc brakes with ABS; 17-inch cast aluminum wheels.

LENGTH X WIDTH X HEIGHT: 222.4 x 79.1 x 76.8 inches.

WHEELBASE X TRACK: 130 x 68.2/67 inches.

GROUND CLEARANCE: 8.9 inches.

CURB WEIGHT: 5,613 pounds.

TOWING CAPACITY: 8,200 pounds.

STANDARD: Front air bags, power accessories, remote keyless entry, driver-lockout prevention, tire pressure monitor, driver information center, six-way power adjustable driver bucket seat, power adjustable front-passenger seat, tilt steering, AM/FM/CD/MP3 stereo with rear-seat audio controls, cruise control, automatic climate control, running boards, underbody-mounted spare tire, luggage rack side rails, fog lamps, auto headlamps.

OPTIONS: LT3 equipment group includes leather upholstery, 12-way power adjustable driver's seat with heat and memory, power adjustable pedals, remote vehicle starter, six-disc CD changer, side head-curtain air bags, Bose premium speaker system, XM Satellite radio, rear parking assist, universal home remote, tri-zone air conditioner ($4,050); rear-seat entertainment system ($1,295); power liftgate with lift glass ($350).






© Copyright 2006 The Detroit News. All rights reserved.

2007 Chevrolet Cobalt SS offers bang for the buck

Saturday, September 02, 2006
Review
2007 Chevrolet Cobalt SS offers bang for the buck
Marketing miscues betray a worthy compact.
Warren Brown / The Washington Post





Note to General Motors Corp.:

Until public perception catches up with the improved quality of your products, there are two things you should do.

-- Avoid releasing any pre-production cars or trucks to the media. Pre-production models, those not certified for retail, are never your best samples. They represent an idea of what the market-ready car or truck will be. If, as often is the case, the pre-production model has a few ill-fitting pieces, the media get the impression that the product is a bad idea.

-- Even if it means offering steep discounts, sell only your best samples to rental-car fleets, which are where much of the public first comes in contact with your new cars and trucks. Yes, this will cost you money.

So what? You're already wasting hundreds of millions of marketing dollars annually giving consumers and dealers rebates -- bribes -- to buy cars and trucks you introduced the wrong way. It makes more sense to spend that money up front creating a good impression of vehicles than it does to spend it on the rear end in a self-defeating enterprise to get people to buy cars and trucks they don't want.

Those are my thoughts after spending a week and hundreds of miles in a 2007 Chevrolet Cobalt SS sedan. I like the little car. It is delightfully competitive with anything in its compact-size segment, or $13,000-to-$21,000 price range.

I drove it all over New York City and then drove it to my home in Virginia. That's a lot of seat time in a car, especially in what essentially is an economy automobile -- enough time to form a lasting impression, which is this:

The Cobalt is a winner that GM introduced as a loser. A year or so ago, when GM brought the Cobalt line to the attention of the media, it rolled out pre-production samples with competent-to-downright-zippy 2-liter, 2.2-liter and 2.4-liter four-cylinder engines. The front-wheel-drive Cobalt's styling was much improved over that of the Chevrolet Cavalier it replaced. But the interior pieces in the pre-production models didn't fit together all that well. And some of those plastic pieces were downright cheap.

GM compounded that error by shipping its most basic Cobalt samples to the rental-car companies, where the public first came in contact with the car. Needless to say, the public was not impressed.

Thus disheartened, GM made another critical mistake. Disappointed by a failed, or less-than-spectacular, product launch, most meaningful advertising support for the Cobalt disappeared and was replaced by product-degrading, get-this-one-cheap spots.

In short, GM and Chevrolet, in the matter of bringing the Cobalt to the public's attention, you goofed and goofed badly.

Luckily for you, the market-ready car, particularly the upgraded SS version I've had so much fun driving, is much, much, much better than your marketing. For that matter, especially if automotive bang-for-the-buck can be translated to the most horsepower, fuel efficiency, safety and amenities for the least money spent, the Chevrolet Cobalt is as good as the current generations of the Honda Civic, Nissan Sentra or Toyota Corolla, if not better.

No, it's not better than the Mazda3. But neither is the Civic and nor is the Corolla. The Mazda3 simply rocks this class.

But the Cobalt is a bona fide, worthy competitor. It would be nice if GM's marketing reflected that much.






Nuts & Bolts: 2007 Chevrolet Cobalt SS

Complaints: If car companies can't find a cost-efficient way to cover the seats in their upgraded models with supple, quality leather, they should use no leather at all. The cheap, stiff leather used in the Cobalt SS -- and in nearly all other upgraded economy cars, foreign and domestic -- is slippery and uncomfortable. It's not worth the money.

Ride, acceleration and handling: Excellent small-car behavior in all three categories. The Cobalt SS was remarkably agile in New York traffic. It accelerated with authority on the New Jersey Turnpike.

Head-turning quotient: Cute in the way that the Mazda3, Honda Civic and Toyota Corolla are cute.

Body style/layout: The Chevrolet Cobalt SS is the top-line version of the Cobalt, a compact, front-engine, front-wheel-drive economy car that replaces the Chevrolet Cavalier. The Cobalt is available either as a coupe or a sedan.

Engines/transmissions: There are three engines--2.0-liter, 2.2-liter and 2.4-liter, all in-line four-cylinder models. There are two available transmissions, a five-speed manual and a four-speed automatic. The tested Cobalt SS came with a 2.4-liter engine that develops 173 horsepower at 6,200 revolutions per minute and 163 foot-pounds of torque at 4,800 rpm. That engine is linked to an optional four-speed automatic transmission.

Capacities: There is seating for five people. But the rear cabin is cramped for three. This is yet another five-seat car that better accommodates four people. Luggage capacity is 13.9 cubic feet. The fuel tank holds 13 gallons of regular unleaded gasoline.

Mileage: I averaged 30 miles per gallon mostly in highway travel carrying 200 pounds of cargo and using the air conditioner full time.

Safety: Four-wheel antilock brakes are standard. Side air bags and stability control are unavailable. Head air bags and traction control are optional.

Price: Base price on the 2007 Chevrolet Cobalt SS sedan is $17,595. Dealer's invoice price on that model is $16,627. Price as tested is $22,279 including $4,069 in options (automatic transmission, heated leather front bucket seats, power sunroof, GM OnStar emergency communications system, head air bags, remote ignition starter, XM Satellite radio, traction control and sport-red paint). Add a $615 destination charge. Dealer's price as tested is $20,824. Prices sourced from Chevrolet and www.edmunds.com.

Purse-strings note: The Chevrolet Cobalt SS competes with any car in the compact economy car category. It's a buy.






© Copyright 2006 The Detroit News. All rights reserved.

Dual-Fuel Vehicles Open Mileage Loophole for Carmakers

Dual-Fuel Vehicles Open Mileage Loophole for Carmakers
By ALEXEI BARRIONUEVO and MICHELINE MAYNARD



As car companies promote E-85 as an alternative to gasoline, they are benefiting at the same time from a loophole that allows them to receive credits toward environmental standards when they sell flexible-fuel vehicles that run on the ethanol-based fuel.

Such vehicles get credit from the government for nearly double the gas mileage that they actually achieve. This generous mileage appraisal has another advantage. It allows manufacturers to sell more full-size sport utilities and pickups while still meeting the federal standards for average fuel economy.

Those credits go to the carmakers whether or not the flexible-fuel cars ever see a drop of ethanol in their tanks.

The rule has been especially helpful to the car companies in reaching the required annual standard for the light truck category, which includes vans, pickup trucks and sport utility vehicles.

While the average fuel economy requirement for domestically produced sedans has remained stable at 27.5 miles per gallon since 1990, the standard for light trucks has been getting tougher.

Next year it will go from 21.6 miles per gallon to 22.2, and then it will climb a half-mile per gallon for the next four years.

The environmental credits that the carmakers can apply for are capped at 1.2 miles per gallon per fleet. Last year’s energy bill, which supported the production of alternative fuels like ethanol, held in place the cap on credits until at least 2010, said Peter Feather, the fuel economy division chief at the National Highway Traffic Safety Administration, which regulates the program.

Of the 18 flexible-fuel vehicles General Motors is offering for the 2006 and 2007 model years, only 2 are sedans: the Chevy Impala and the Monte Carlo. The rest are pickup trucks and sport utility vehicles.

DaimlerChrysler, after offering two sedans and only four light trucks in 2006, has said it will make only one sedan, the Chrysler Sebring, and nine light trucks for 2007. Only Ford has the opposite mix, producing one dual-fuel truck (the F-150 pickup) and three dual-fuel sedans in its 2006 and 2007 models.

As a result, environmentalists contend that the overall efforts by car manufacturers to promote E-85 are somewhat hypocritical.

“Ethanol should be saving us twice as much oil as it is today because we are letting really big, inefficient flex-fuel vehicles on the road,” said Nathanael Greene, senior policy analyst at the Natural Resources Defense Council, a supporter of both ethanol and E-85. “There is still no incentive for the auto industry to actually get consumers to use this fuel.”

“The credits are a motivating factor” in building more trucks in the flexible-fuel category, Mark Kemmer, a General Motors spokesman, said. But he said the carmaker was building the vehicles that were most popular with farmers and others in the Midwest, where most of the E-85 fuel is available.

Converting a vehicle to dual-fuel use costs manufacturers at most a few hundred dollars more per car, former and current G.M. officials say. The conversion entails upgrading components, like fuel tanks, hoses and fuel injectors, to withstand the corrosive nature of ethanol. It also requires upgrading computer capacity and more engineering and validation work by lab technicians.

Susan Cischke, vice president for environmental and energy engineering at Ford, said: “It’s double the work. We have to certify for gasoline and for flexible fuel.”

But it is less work than another alternative. It costs an extra $3,000 to $4,000 to manufacture hybrid vehicles that run on electric motors powered by a mix of batteries and a gasoline engine, Mr. Feather said.




Copyright 2006 The New York Times Company

GM Sequel, Part II

AUGUST 28, 2006
News & Features
Gizmag.com
GM Sequel, Part II
GM to build the Sequel, its hydrogen fuel-cell car, claiming it has increased its range to 300 miles and 0 to 60 mph in under 10 seconds





Way back at the start of 2005, the world's largest automotive manufacturer, General Motors, showed the Sequel advanced hydrogen fuel-cell concept vehicle at the 2005 North American International Auto Show (NAIAS), billing it as the culmination of US$1 billion of intensive research it had conducted into fuel cell technology. Like most show cars, the Sequel was not a working model, but now General Motors Chairman and CEO Rick Wagoner has gone on record as saying "the most technologically advanced car GM has ever built" has actually been built, has an operating range of 300 miles, and will be made available to journalists in the near future. The Sequel is a truly remarkable vehicle, having superseded the AUTOnomy and Hy-wire as GM's primary showcase of future fuel cell vehicles. See the extensive technical diagrams and photographic library we have assembled here, and read on for all the available detail.

In announcing the Sequel, GM claims to have increased the range and halved acceleration times in comparison with its existing AUTOnomy and Hy-wire fuel-cell vehicles. Like these predecessors, the Sequel shares the 11 inch high skateboard chassis containing the hydrogen tanks, fuel cells, drive by-wire electrics , batteries ad infinitum .

The space gained through the use of by-wire technology for the steering and brake control systems is used to good effect by the three high-pressure tanks. The mid-chassis location of these tanks affords good protection and benefits the vehicle's center of gravity. In addition, a large number of detailed technical modifications were made, so that the propulsion system represents state-of-the-art fuel cell technology.

Thanks to the 25 percent power increase from GM's new-generation fuel-cell stack, the Sequel can accelerate from zero to 100 km/h in under 10 seconds – while emitting only steam. The Sequel now has an operating range of 300 miles (480 kilometers), comparable to that of conventional vehicles with combustion engines.

Byron McCormick, Executive Director of Fuel Cell Activities at GM says, "The Sequel is the car industry's first fuel cell vehicle to offer an operating range and performance in line with people's expectations. That takes us a big step closer to the commercial production of fuel cell vehicles."

The fuel cell propulsion module consists of the fuel-cell stack, hydrogen and air processing subsystem, cooling system, and the high-voltage distribution system. This unit delivers 73 kW to the electric traction motors plus power for heating, ventilation, air-conditioning, by-wire electronics and the battery.

In a recent speech, Rick Wagoner began discussing GM "Beyond the Sequel." "We continue to make excellent progress in all aspects of our extensive fuel-cell research and technology-development program, and we look forward to sharing more news about it in the near future. Stay tuned."





Provided by Gizmag.com - ideas, innovation, invention

Copyright © 2006 Gizmag.com. All rights reserved.

GM's Big Bet on Quality

SEPTEMBER 7, 2006
Autos
By David Kiley
GM's Big Bet on Quality
To reverse perceptions about its cars' quality, GM boldly extends its warranty coverage to five years or 100,000 miles



General Motors, battling to regain market share amid a financial battering that saw its U.S. auto business lose $10.6 billion last year, today announced an expanded warranty on all its vehicles intended to alleviate, if not remove, doubts that many consumers have about GM's quality being competitive with that of Japanese automakers.

The new GM warranty covers a vehicle's powertrain with no deductible for 5 years or 100,000 miles. The coverage is fully transferable and applies across GM's seven brands, beginning with 2007 models. The automaker also expanded its roadside assistance and courtesy transportation provided when a car is being repaired during the life of the warranty.

Though Ford (F ) recently upped its warranty to five years, and Chrysler, Hyundai, and Kia offer 10 year or 100,000 mile warranties, GM believes it is offering the best coverage as the warranties offered by the Korean carmakers may not be transferred when the car is sold.

For years, GM stuck to its 3 year/36,000 mile warranty coverage on most vehicles. But it has increasingly been losing market share, as well as mind share, to Japanese brands that have better reputations for quality, as well as to Koreans, which have offered the longest warranties in the industry to make up for the bad quality they foisted on customers in the 1990s.

LONGER LIFE. GM sales and marketing chief Mark LaNeve says that the longer warranty is meant to play a role in enlightening customers about GM's quality ratings and close the perception gap between what people think of the automaker and how good the vehicles really are. "We can afford to do this because the gap between GM and the industry leaders is getting to be almost negligible," says LaNeve.

GM's warranty costs have fallen 40% in the last five years as GM has, among other things, increased the durability specifications on its cars. It used to be, for example, that key parts were designed to last only 80,000 miles. That has increased, say GM executives, to well over 100,000 miles, with many parts specified to last 120,000 miles.

In J.D. Power & Associates' Vehicle Dependability Study, which measures problems reported by customers over three years, GM has just two of its current brands, Buick and Cadillac, above industry average. Lexus leads the study. Toyota (TM ), Honda (HMC ), Acura, Ford, Mercury, and luxury brands such as BMW and Jaguar all rank well ahead of high-volume GM brands such as Chevrolet, Pontiac, and Saturn.

CATCH 22. In Power's Initial Quality Study, which measures complaints over the first three months of ownership, GM's Chevy, GMC, and Cadillac all rank above industry average. But Toyota and Honda still rank ahead, and Hyundai has passed GM in this study and even surpassed Toyota and Honda. J.D. Power is owned by McGraw-Hill (MHP ), which also owns BusinessWeek.com.

Even though GM's brands still lag behind Toyota and Honda, the gap is much less than it used to be. And GM hopes it can remove remaining customer doubts about GM reliability with the extra coverage. But beefing up a warranty can cut both ways. Some consumers interpret a longer warranty as a sign that the company's products are poor and have to be protected longer. GM's product chief Robert Lutz has expressed that opinion in the past when the issue of longer warranties came up.

The no-deductible, fully transferable, limited powertrain warranty covers more than 900 components related to the engine, transmission, transfer case (if applicable), and final drive assemblies on all 2007 model-year Chevrolet, Pontiac, Buick, GMC, Hummer, Saturn, Saab, and Cadillac cars and light-duty trucks sold in the U.S. and Canada.

CONFIDENCE, NOT PROTECTION. For nonpowertrain components, GM's bumper-to-bumper new vehicle limited warranty remains in effect: four years or 50,000 miles for Buicks, Cadillacs, Hummers, and Saabs, and three years or 36,000 miles for Chevrolets, GMCs, Pontiacs, and Saturns.

Eric Hirschberg, chief creative officer of Deutsch/LA, the ad agency creating ads to support GM's expanded warranty, says he has worried about customers taking away the wrong message. "No question that our research showed it could be taken that way." That's why the ad Deutsch created tries to hit notes of confidence in GM products rather than focusing on protection if something goes wrong.

In the lead TV commercial, cars are seen in traffic tie-ups in Los Angeles, Miami, New York, and San Francisco—markets where GM brands do poorly. GM cars such as the Chevy HHR, Corvette, and Silverado, the Cadillac Escalade and Buick Lucerne, levitate out of the traffic to the song "Get What You Need" from the rock group Jet.

VIRAL ADS. "We create a kind of freeway in the sky of GM vehicles…and these GM vehicles rock," says Hirschberg. He says he was trying to create the same sort of community feeling among owners of GM's cars in the ad as he has seen among Harley Davidson owners on the road when they see each other and give a thumbs up.

A viral aspect of the campaign includes films on YouTube.com that show GM vehicles in flight with a linked Web site to a fictional science expert who puts forth the idea that GM has solved the problem of getting cars to fly. "The warranty coverage is real, but it's important to create compelling and interesting content that people will be into," says Hirschberg.

This is not the first time GM has attacked the issue of consumers not giving the company credit for quality. A few years ago the company launched a series of print ads that, among other things, apologized for its quality not being good enough. It used the surprising mea culpa strategy to get people to read about the company's actual quality gains.

"NEW BLOOD." This effort followed disturbing research from J.D. Power that showed consumers believed that Volkswagen, for example, had much higher quality than Chevrolet, despite Power ranking Chevy much higher than the German brand for quality.

GM has in the past turned to Detroit agency McCann-Erickson, which also creates ads for Buick, to handle such corporation-wide efforts. But a few months ago LaNeve gave the assignment to Deutsch/LA. The agency's chairman, Donny Deutsch, has a nightly TV show on CNBC. And the agency previously handled Mitsubishi, and produced provocative campaigns for brands such as Ikea and Old Navy. "I wanted to get some new blood and new thinking into this issue for us," says LaNeve.

Now it remains to be seen if consumers are willing to believe that GM's quality is as good as it say it is.

To see those GM cars that scored well on J.D. Power's IQS and VDS, click here for the slide show.






Kiley is a senior correspondent in BusinessWeek's Detroit bureau




Copyright 2000- 2006 by The McGraw-Hill Companies Inc.
All rights reserved.


© Copyright 2006 The Detroit News. All rights reserved.

Fill Up on Corn if You Can

August 31, 2006
Fill Up on Corn if You Can
By ALEXEI BARRIONUEVO





SPRINGFIELD, Ill. — Standing next to his pickup truck at a service station here, Robert Beck squeezed a yellow nozzle and filled up with the corn-based fuel blend of 85 percent ethanol and 15 percent gasoline that car companies, farmers and politicians alike love to promote as a way out of America’s oil addiction.

Mr. Beck, an agronomist who travels throughout the Midwest, likes the idea of E-85, as the fuel blend is known, because it is made mostly from a domestic crop. But he still finds that buying the fuel is almost more trouble than it is worth.

“Everyone talks about it, but exactly where is it?” he said. “You have to have more fuel out there for consumers to buy.’’

That could take a while.

To assess just how efforts to help E-85 catch on were going, a New York Times reporter, accompanied part of the time by a photographer, drove through the region where its popularity is greatest. They found that despite all the good will toward ethanol, success is far from assured.

The fuel does have plenty of powerful supporters. General Motors used the Super Bowl this year to kick off its “Live Green, Go Yellow” campaign to encourage Americans to buy vehicles that can run on either E-85 or conventional gasoline. Ford Motor and VeraSun Energy, the second-largest ethanol producer after Archer Daniels Midland, christened 300 miles of highway from Chicago to St. Louis the “Midwest Ethanol Corridor” in a marketing campaign that began in June.

But it also has plenty of drawbacks. Most oil companies want nothing to do with E-85, which they see as a money-losing alternative to their own petroleum-based products. Without help from the oil industry or a lot more flexible-fuel cars on the road, gasoline retailers are hesitant to install the expensive pumps, which can cost up to $200,000 with a new underground storage tank.

“There is no way E-85 can survive on its own without massive government subsidies at the state and federal levels,’’ said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation, an energy consultancy in New York.

Many drivers whose vehicles can run on ethanol will not buy E-85 unless it is markedly cheaper than regular gasoline, which has not always been the case. Part of the reason is basic economics: E-85 delivers only three-quarters as much energy per gallon as gasoline, meaning drivers will have to fill up their tanks more often if they choose to use the fuel.

More than 850 service stations now carry E-85, an increase from 350 since the beginning of 2005, but the fuel is still unavailable at most of the 169,000 stations in the United States. Sales are so slim that some retailers count their regular E-85 customers on one hand.

Customers like Mr. Beck, who want the fuel, struggle to find it: in Illinois, 135 stations carry it, but in neighboring Missouri only 54 stations have E-85 pumps. Kansas has 13.

None of this has discouraged E-85’s supporters, who are relentlessly pushing to expand use of the fuel, which already benefits from a tax credit of 51 cents a gallon for producers of all forms of ethanol.

And in states like Illinois, the country’s second-biggest corn producer, after Iowa, politicians are lining up state financing to subsidize the installation of pumps at service stations, while offering rebate incentives to customers who use the fuel.

“E-85 is really I-85 — it’s about energy independence,” said Daniel Yergin, chairman of Cambridge Energy Research Associates, an energy consultancy.

But that dream remains far out of reach. For one thing, E-85 barely exists outside the Corn Belt. You cannot fuel up on it in New York or New England. California has only one station.

And even in Chicago, at the entrance to the ethanol corridor, it was hard to find a flexible-fuel car for the road trip. When Janet Conlon, a travel agent from Garber Travel, contacted four major rental car agencies, none said they had such cars available.

“Nobody had a clue what I was talking about,” Ms. Conlon said. The Times ended up renting a flexible-fuel Chevrolet Impala from a company affiliated with General Motors.

At the first stop, Becker’s Hotrod BP in Dwight, Ill., 75 miles south of Chicago, E-85 was selling for $2.70 a gallon, 50 cents cheaper than the station’s regular unleaded.

Four years ago, the Illinois Corn Growers Association approached Phillip E. Becker, the station’s owner and a longtime gasoline retailer, with an offer to pay to install an E-85 pump, an investment of about $100,000. Because the alcohol in E-85 corrodes traditional gasoline storage tanks, a new underground one was necessary, along with special fuel lines and a special dispenser.

Mr. Becker, wanting to help local farmers, accepted the deal, agreeing to sell the E-85 at no profit for at least five years so he could offer it at a price lower than gasoline.

“I am selling this at cost as a good-will thing,” Mr. Becker said. The E-85, he said, also helps bring passengers into his store for sodas and collectible toy cars, and into an adjoining Burger King, in which he has a business interest. But without the help of the growers’ association, he said, he probably would not have made the investment.

Mr. Becker has enjoyed the local celebrity his E-85 pump has brought him. Officials from the state of Illinois have even shot photos there for postcards that are placed in the vehicles of state employees, urging them to stop at Becker’s.

E-85 sales at his service station, though, have proved erratic. They rose as high as 9,000 gallons a month in September last year when gasoline prices climbed over $3 a gallon, widening the spread with ethanol prices. But in July, Becker’s pumped only 3,010 gallons of E-85, after gasoline prices dropped and ethanol prices rose.

Mr. Becker said he had “four really good customers,” two of them believing so strongly in E-85 that they traded in their vehicles for flexible-fuel ones. “E-85 is all they burn, no matter what the price is,” he said.

The farmers continue to champion their project. In June, they parked a small 1940’s-era corn wagon at a highway ramp near Mr. Becker’s stations to advertise the E-85 price. General Motors included him in a recent regional promotion in which the company gave away $1,000 in free fuel — E-85 or gasoline — to purchasers of flexible-fuel vehicles.

The three-month promotion, however, did not help overall sales at nearby Tyler Chevrolet/Buick, said Byron Moore, the new-car sales manager. At best, it may have caused some buyers already set on certain truck models to choose the flexible-fuel engine to grab the free fuel.

But Mr. Moore said he doubted the buyers would actually fill up on E-85 very often, because “the word is out” that the fuel offered less mileage per gallon than gasoline. Ethanol is made up mostly of alcohol and yields less energy.

Mr. Becker said he saw E-85 sales slip when the price got to within a dime of gasoline. Mr. Beck, the E-85 customer in Springfield, said he had decided that E-85 was worth buying for his Ford truck only if the price was at least 30 cents lower than gasoline.

Volatile ethanol prices in recent months, driven by a regulatory change that has led to its increased use as a 10 percent additive in more states, have stymied the goals of E-85’s supporters. The National Ethanol Vehicle Coalition, a lobby group founded by corn growers, had estimated the number of stations would grow to 2,500 this year. Now, the coalition is willing to settle for 1,200, said Michelle Kautz, a spokeswoman for the group.

Still, the buzz over E-85 is growing — where it is available. Further south along Interstate 55, Theresa Kight, a cashier at a Qik-n-EZ in Normal, Ill., said more customers were asking about the station’s E-85 pumps. “A lot of them that are interested buy it just to support the farmers,” Ms. Kight said.

Outside the station, though, Kevin Hart, a heating and air-conditioning service contractor, was fueling up his van on gasoline. “Using more E-85 won’t solve the problem” of too much oil consumption and too little conservation, he said. “People will just think they are helping the environment, so now ‘I can burn more fuel.’ ’’

But the owners of Qik-n-EZ said they believed in E-85’s potential to diversify the country’s fuel sources — and help the Midwest’s economy. Grady Chronister, the president and founder of the company, said the stations, which get all their ethanol from VeraSun, were selling the E-85 very close to cost.

“This is not a product that warrants the financial investment at this time,” said Mr. Chronister, who added that his family owns farms that grow corn, giving them extra incentive to support E-85. “But we are glad we did it. We are in favor of alternative energy forms, especially those produced here in the United States.”

Along the ethanol corridor very few people were actually buying E-85. At a Qik-n-EZ in Springfield, there was a 45-minute wait before the first customer, Mr. Beck, arrived to refuel his 2006 Ford F-150 truck at the lone E-85 pump set well away from the four rows of gasoline pumps.

After buying his truck in April, Mr. Beck discovered only two months ago that it was dual-fuel. In the past, most drivers did not even know they had flexible-fuel vehicles because the car companies did not bother to tell them and the engines are virtually indistinguishable.

But from now on, “we’re going to do more to let people know what they have,” said Susan Cischke, vice president for environmental and energy engineering at Ford. She said Ford marked its flexible-fuel vehicles on the hood and fuel cap.

American automakers hope to double annual production of flexible-fuel vehicles, to two million, by 2010. There are now about 5 million on the road, out of 238 million total vehicles.

Detroit has much to gain from producing E-85-ready vehicles. In addition to acting as a positive diversion from their broader financial problems, the flexible-fuel vehicles help them meet federal standards for average fuel economy without having to build far more expensive hybrid cars.

But car companies bristle at the notion that they alone can make E-85 a national or even regional success. “This is a bigger problem than one industry can solve,” Frederick Henderson, the chief financial officer at General Motors, said recently.

Major oil companies, which own fewer than 10 percent of the country’s gasoline stations, say they will not stand in the way of retailers who want to put in E-85 pumps. But they will not help, either.

That has placed the burden on the states where E-85 is linked with the success of ethanol. This year, Iowa, the country’s biggest corn producer, began giving its retailers a 25-cent-a-gallon credit for selling E-85 and is providing up to half the cost of installing E-85 pumps. The governor of Illinois, Rod R. Blagojevich, just proposed spending $30 million to add 900 pumps over the next five years, a sevenfold increase.

At the retail level, however, the effort to trumpet E-85 is inconsistent at best. Mr. Beck said he found the Springfield station only after doing some research, because the E-85 Web site run by the National Ethanol Vehicle Coalition lists pumps only by city, with a limited mapping function that fails to show drivers their location in relation to each other.

Unlike the standard gasoline pumps, the E-85 pump at the Qik-n-EZ did not take credit cards, forcing Mr. Beck to stand in line for 15 minutes behind customers buying beer, cigarettes and lottery tickets.

“You would think it would be as easy as buying fuel,’’ he said, “but it is a pain in the fanny.”

And there is no room for error when trying to drive only on E-85. Do not leave Emporia, Kan., for instance, without fueling up a nearly empty tank first. Otherwise, somewhere on the Kansas Turnpike the fuel gauge needle goes below empty.

What then? Turn off the air-conditioning, coast part of the way in neutral and, finally, a service station — the only one for another 30 miles — has gasoline. But no E-85.




Copyright 2006 The New York Times Company

GM Announces Best Warranty of Any Full-Line Automaker

FOR RELEASE: 2006-09-06
CONTACTS
GM Announces Best Warranty of Any Full-Line Automaker






GM to Provide 100,000-Mile/Five-Year Powertrain Warranty, Roadside Assistance and Courtesy Transportation on 2007 Cars and Trucks

Comprehensive Coverage Validates Dramatic Improvements in GM Quality, Durability

DETROIT – General Motors today announced the best warranty of any full-line automaker, with coverage up to 100,000 miles or five years across its entire 2007 car and light-duty truck lineup in the United States and Canada, reflecting its success in dramatically improving the quality and durability of its vehicles.

GM’s new 100,000 Mile Warranty coverage is a fully transferable five-year, 100,000-mile powertrain limited warranty with no deductible. GM also has decided to expand its roadside assistance and courtesy transportation programs to match the powertrain warranty term. Altogether, it’s the best coverage in the auto industry.

“We’ve been telling everyone how strong GM’s cars and trucks are in terms of value, design, quality and durability. Now we’re going to back it up,” Chairman and CEO Rick Wagoner said. “This new warranty, combined with GM’s outstanding quality, competitive pricing, relevant technologies and a strong new lineup of cars and trucks, provides motorists with an unprecedented level of value and peace of mind.

“This latest step in our North America turnaround plan reflects the confidence we have in the quality of our cars and trucks. It’s the result of years of hard work by our employees, suppliers and dealers. It’s something that motorists want and deserve. For those who haven’t driven a GM car or truck in a while, this is our way of saying, ‘Come on back and see what we’ve done.’

“The bottom line is GM now has the best coverage in the industry,” Wagoner said. “It includes the best warranty of any full-line automaker, equally compelling roadside assistance and courtesy transportation programs, unique safety and security technologies like OnStar and StabiliTrak, and the nation’s largest network of outstanding dealers, with well-trained GM Goodwrench technicians who service GM cars and trucks better than anybody else.”

The no-deductible, fully transferable limited powertrain warranty covers more than 900 components related to the engine, transmission, transfer case (if applicable) and final drive assemblies on all 2007 model-year Chevrolet, Pontiac, Buick, GMC, Hummer, Saturn, Saab and Cadillac cars and light-duty trucks sold in the United States and Canada. GM will extend the existing roadside assistance plan to 100,000 miles or five years, and will provide courtesy transportation for a covered warranty repair.

The new warranty will apply retroactively to 2007 GM cars and trucks already sold.

For non-powertrain components, GM’s Bumper-to-Bumper New Vehicle Limited Warranty remains in effect: four years or 50,000 miles for Buicks, Cadillacs, Hummers and Saabs, and three years or 36,000 miles for Chevrolets, GMCs, Pontiacs and Saturns.

The new package is an important part of GM’s sales and marketing strategy, which is focusing consumers on the inherent value of its cars and trucks. Higher quality vehicles, reduced incentives and lower daily rental fleet sales are helping increase the residual value of GM cars and trucks. In addition, GM transaction prices have been rising, well above the industry average.

Wagoner said today’s moves were the result of GM’s successful decade-long effort to dramatically improve the quality of its cars and trucks. “From the men and women who design, engineer and build our vehicles, to our union partners, suppliers and dealers, the GM team’s commitment to quality has enabled us to deliver this consumer confidence package.”

GM tracks vehicle quality several ways, including analyzing warranty visits and the results of 10 million customer surveys each year, and studying the quality surveys of several independent organizations. GM has made significant progress on all fronts:

Warranty repairs at dealers have decreased 40 percent during the past five years.
Two GM brands, Buick and Cadillac, placed in the top five in the J.D. Power and Associates Vehicle Dependability Study released last month.

GM swept the large pickup segment, placed 11 models in the top three of their segments and had two models top their segments in the J.D. Power and Associates Initial Quality Study released earlier this year.

In the Strategic Vision 2006 Total Quality Index Study, five GM models topped their segments – more wins than any other manufacturer for the second consecutive year.

GM dealers also rank among the leaders in the most recent J.D. Power and Associates Consumer Service Index study, which measures customer satisfaction among new vehicle owners with the dealer service department during the first three years of vehicle ownership.
GM’s Buick brand ranked second in the American Customer Satisfaction Index study released last month, administered by the University of Michigan's National Quality Research Center .

GM will begin promoting the new initiative during Thursday night’s NBC-televised NFL season opener between the world champion Pittsburgh Steelers and the Miami Dolphins. In addition, a dedicated web site (www.gm.com/warranty) provides consumers with additional details about the program.

General Motors Corp. (NYSE: GM), the world’s largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit , GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world’s leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.

###

(Note: In this press release and related comments by General Motors management, we use words like "expect," "anticipate," "estimate," "forecast," "objective," "plan," "goal" and similar expressions to identify forward-looking statements, representing our current judgment about possible future events. We believe these judgments are reasonable, but actual results may differ materially due to a variety of important factors. Among other items, such factors might include: the pace of introductions and market acceptance of new products; the effect of competition on our markets and significant changes in the competitive environment; price increases or shortages of fuel; and changes in laws, regulations or tax rates. GM’s most recent annual report on Form 10-K and quarterly report on Form 10-Q provide information about these factors, which may be revised or supplemented in future reports to the SEC on Form 10-Q or 8-K.)


CONTACT(S):
Janine Fruehan
GMNA Quality Communications
586-575-2980 (office)
586-899-0968 (mobile)
janine.1.fruehan@gm.com

John McDonald
GMNA Vehicle Sales, Service and Marketing Communications
313-667-3714 (office)
313-418-2139 (mobile)
john.m.mcdonald@gm.com






© Copyright 2006 The Detroit News. All rights reserved.

IL Insider: GMC To Add Minivan in 2009

IL Insider: GMC To Add Minivan in 2009
Date posted: 08-28-2006






DETROIT — General Motors' GMC brand will roll out its first minivan in model-year 2009, according to sources close to the product.

Based on the automaker's Lambda architecture, the as-yet-unnamed minivan will be a sibling to the next-generation Chevrolet Uplander as well as a companion to the upcoming GMC Acadia crossover vehicle, Detroit-area suppliers familiar with the company's plans told Inside Line.

While the Acadia is aimed at upscale SUV buyers, including empty nesters and affluent younger couples, the GMC minivan will be targeted more at families. To some extent, it will help fill the void left by the discontinued Safari "midi" van.

GM hasn't officially announced the new minivan, but it is expected to begin production in early 2009. By that time, GM plans to discontinue three of its four existing minivans, including the Saturn Relay, the Buick Terraza and the Pontiac Montana.

That will leave the growing GMC-Buick-Pontiac retail channel with only a single minivan come 2009.

What this means to you: Is GMC trying to stretch the brand too far to cover "non-professional-grade" families?





© 1995-2006 Edmunds.com, Inc.

GM to Offer Simplest, Smartest Navigation System in North America

Press Releases
FOR RELEASE: Aug 30, 2006
GM to Offer Simplest, Smartest Navigation System in North America
OnStar Turn-by-Turn Navigation Available on More Than Two Million GM Vehicles in 2007






DETROIT – General Motors announced today that for 2007, the company will fundamentally change drivers’ access to navigation by offering more than two million vehicles in the U.S. and Canada with the first factory-installed, fully-integrated off-board GPS navigation system – OnStar Turn-by-Turn Navigation.

The new service from OnStar by GM will be standard for the first year on a number of GM retail vehicles sold in 2007 including all Buicks and nearly all Cadillacs. OnStar Turn-by-Turn Navigation will also be available on many other GM vehicles through a $100 optional OnStar package upgrade during the initial year of service.

Customer demand for in-vehicle navigation systems is rapidly rising. According to a J.D. Power and Associates1 estimate, 1.2 million 2005 model year vehicles in the U.S. were equipped with factory-installed navigation systems representing a 41 percent increase over the 2004 model year.

“By adding the competitively-priced OnStar Turn-by-Turn Navigation to more than 2 million vehicles for 2007, GM will significantly increase the number of factory-installed navigation systems on North American roads,” said Mark LaNeve, General Motors North America vice president, Vehicle Sales, Service and Marketing. “In addition to the volume increase, GM also will offer the most navigation options across more vehicle segments and price ranges than our competitors.”

“OnStar is truly transforming the overall user experience by offering the simplest and smartest navigation system on the North American market,” said OnStar’s President, Chet Huber. “By leveraging our powerfully simple design, OnStar Turn-by-Turn Navigation demystifies navigation technology for the customers and further differentiates GM vehicles in the marketplace.”

After the first year, customers can continue enjoying OnStar Turn-by-Turn Navigation by renewing their package for just $299 per year, which also includes OnStar’s complete suite of safety, security and communications services. This makes OnStar Turn-by-Turn Navigation a very affordable factory-installed navigation service for the mass market.

The simplicity of OnStar Turn-by-Turn Navigation allows a consumer to talk to a live advisor, who in turn sends complete step-by-step directions to the customer’s vehicle through their OnStar system. Audio directions are then automatically played through the vehicle’s stereo as they are needed, triggered by the OnStar system’s GPS capabilities.

As the simplest and smartest navigation system in North America, OnStar Turn-by-Turn Navigation’s key advantages include:

Ease of Use: Just press the OnStar blue button in the vehicle; OnStar advisors are available 24/7/365.

Hands on the Wheel, Eyes on the Road: The system features convenient voice-guided directions delivered through the radio speakers to guide the driver turn-by-turn to the destination.

Automatic Route Corrections: OnStar Turn-by-Turn Navigation detects when the driver leaves a planned route or makes a wrong turn and automatically offers updated directions to the destination.

Pinpoint Positioning: The enhanced GPS system utilized by Turn-by-Turn is fully integrated with the vehicle’s ABS module to deliver a more precise positioning solution.

Ten Million Points-of-Interest: OnStar currently maintains and continually updates an off-board (centrally-managed) database with about ten million point-of-interest locations in the U.S. and Canada.

For more information on OnStar Turn-by-Turn Navigation vehicle availability and pricing, please visit http://www.onstar.com/.

About GM

General Motors Corp. (NYSE: GM), the world’s largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world’s leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at http://www.gm.com/.

About OnStar by GM

OnStar, a wholly-owned subsidiary of General Motors, is the leading provider of in-vehicle safety, security and communication services. OnStar is available on more than 50 2006 GM models and includes one year of complimentary services, and will become standard on most GM retail vehicles in the United States and Canada by the end of 2007. OnStar provides services to more than 4 million subscribers in the U.S. and Canada. More information about OnStar can be found at http://www.onstar.com/.

# # #

Keith Yaden
313-667-0784
keith.yaden@onstar.com








Trademarks and Copyrights © 2005 OnStar Corp. All rights reserved.

New-era auto jobs still hot

Monday, September 04, 2006
New-era auto jobs still hot
On this Labor Day, thousands glad for work despite lower pay, less job security, fewer benefits.
Louis Aguilar / The Detroit News






SAGINAW -- It almost seemed like the good old days at the United Auto Workers Local 699 meeting hall.

Dozens of the 2,000 new hires at Delphi Corp.'s Saginaw steering plant showed up last week for a hot dog and popcorn social to meet their local elected union officials.

As local reps extolled the benefits of joining the UAW, new Delphi hire Christine Olivares expressed nothing but gratitude, even though she is a temporary worker making $14 an hour with few benefits. That's about half what the UAW workers she replaced were earning, but it's more than Olivares has ever made.

"I really like my job, and I am really, really grateful to get a chance to be in the UAW," said Olivares, 32, a single mother of three. "For me, it's the best shot I have to stop falling behind on my bills and actually be able to save and, you know, provide a future for me and my family."

Olivares' outlook reflects the tenuous position a new wave of Michigan autoworkers finds itself in on Labor Day 2006.

Auto factory jobs once guaranteed a hefty paycheck, rich benefits and a worry-free retirement. They were a ticket to the middle class, maybe even a cottage up north. Now that seems like a sepia-toned image from another time.

Many of the new factory workers are learning firsthand the lessons of a global economy: lower wages, fewer benefits and little job security. The jobs don't promise the American Dream, but they are jobs worth having for Olivares and many others.

The workers at Delphi's Saginaw plant are among thousands of Michiganians rushing to fill the jobs that opened up when scores of autoworkers at General Motors Corp. and Delphi Corp. took early retirements and buyouts.

Delphi and GM won permission from the UAW to hire temporary workers at lower wages to keep their factories running after nearly 55,000 workers accepted buyouts and early retirement packages.

Earlier this summer, Delphi said it had hired more than 2,000 replacement workers, most making $14 an hour. But the number is much higher now. Michigan Works! -- the state's job training agency -- said it helped fill that many jobs in Saginaw alone. The workers were not deterred by Delphi's plans to sell its Saginaw operation as part of its overhaul in bankruptcy.

Thousands more applied for 600 jobs recently filled at the Delphi plant in Flint, according to Michigan Works!

Unemployed and underemployed workers also are lining up for jobs at smaller auto suppliers that don't pay anything close to the wages that prevailed for decades in Michigan.

In Sterling Heights recently, an estimated 4,000 applied in two days for a shot at working for $10 an hour at Faurecia North America, a subsidiary of Faurecia SA.

The jobs used to be done by workers who made $19.50 an hour at Johnson Controls Inc., which recently cut 5,000 workers and closed 16 plants as part of its plan to counter rising costs.

GM, which began hiring temporary workers in the spring to operate through the exodus of UAW workers who took buyouts, has no intention of keeping them, spokesman Dan Flores said. The jobs eventually will be filled by former Delphi workers and GM transfers from plants that may be shuttered. GM won't say how many temporary workers it has hired.

Union benefits in question

Because Olivares and the 2,600 Saginaw and Flint workers took jobs with an auto supplier in bankruptcy, it's uncertain whether they will ever become permanent workers, which means they may never get those UAW benefits.

Yet they are the best jobs available, the job-seekers say.

Just to get a chance at an auto industry job these days in Michigan is a minor miracle. The state has been bleeding auto jobs as the industry undergoes a historic restructuring that has led to massive job cuts.

The number of auto jobs in Michigan has been hovering around 230,000 most of this year, 20,000 fewer than last year. Comerica Inc. chief economist Dana Johnson expects the state to lose another 20,000 by the end of 2007. Many of those will be UAW jobs.

With the loss of high-paying jobs comes the loss of income.

The median household income in Michigan fell to $46,038 in 2005, compared to $46,242 for the nation. It was the first time the state's median income was below that of the nation since the Census Bureau began collecting that information in the 1960s.

Opportunity draws thanks

With a shrinking supply of decent-paying jobs, it's little wonder that people such as William Carlson rushed to apply for a Delphi job in Saginaw.

"This is the best opportunity I've ever had," said Carlson, 32, of Bay City.

"I want nothing more than to keep it."

Like many Delphi replacement workers, he got the job because he was recommended by a family member who worked at Delphi.

In Carlson's case, that was his father. The elder Carlson worked more than 30 years at the plant, earning more than $70,000 annually, including overtime, and provided a solid middle-class life for his family.

With overtime, the younger Carlson could make $30,000, a big improvement from his wages as a clerk at Wal-Mart. At one point, Carlson said, he earned $7 an hour at Wal-Mart, which is non-union. Then, he was transferred to another department, where his pay was reduced to $6.25 and his hours were drastically reduced, he said.

He hopes the higher wages at Delphi will allow him to move out of his family's house.

"When you make what I used to make, you can't really live," Carlson said. "You basically pay for your car insurance. You hope your car doesn't break down, and you can't live on your own.

"I don't mind making less than what other (Delphi workers) make because I know they didn't make the decision to do that. I wish I could make what my father made, but one step at a time," he said.

The next step for him and the other new Delphi hires is to see whether they will become permanent workers. Delphi has delayed that decision until December.

"All we can do is work hard and show that we still want these jobs," Carlson said.

"I know I do."

You can reach Louis Aguilar at (313) 222-2760 or laguilar@detnews.com.



Buyouts open up jobs

Some of the workers who took early retirements or buyouts at Delphi are being replaced with workers making less pay. A look at how many autoworkers have taken early retirement or buyouts at Delphi and GM:

GM: 35,000 UAW workers took early retirement or a buyouts.

Delphi: 12,600 UAW and 6,300 IUE-CWA workers have taken early retirement or buyouts. More will come from a second round of offers to UAW workers, which expire Sept. 15. The first UAW offers were for early retirement; the second round will include cash buyouts for younger, lower-seniority workers. IUE-CWA is the International Union of Electrical Workers-Communication Workers of America.






© Copyright 2006 The Detroit News. All rights reserved.