Monday, April 30, 2007

GM opens up to a fresh way of doing things

Friday, April 27, 2007
New ideas wanted
GM opens up to a fresh way of doing things
Sharon Terlep / The Detroit

Texan Ross Perot, during his brief stint on General Motors Corp.'s board of directors, once described the automaker as "isolated and insulated" from the American driving public.

Nearly two decades later, amid a massive overhaul at the world's largest automaker, signs are starting to emerge that GM is shedding that top-down, out-of-touch style of management.

Jolted into action by unprecedented market share declines and billions of dollars in losses, GM is taking a more fluid and open approach to doing business in an industry it once ruled.

Twenty-something hipsters in the company are getting called on to help make critical decisions.

Design teams have new freedom to whip up vehicles with no advance approval from the top.

And, in a first for GM, the public could have final say in picking a new vehicle to be sold around the world.

"The company that I hired into no longer exists -- which is a good thing," said John Manoogian, design director for Cadillac, who started his GM career 30 years ago in the now-defunct Oldsmobile division. "There's a new sense of where we are and what we have to go to. We have senior managers saying, 'You guys show us what you can do.' "

With its supremacy over the world auto industry ending as foreign rivals get stronger and international markets grow in influence, GM's situation may have gotten dire enough to spur some actual change in that way of thinking.

Some of this is evident in the attitude of upper management toward the lower rungs. People are more able to give suggestions and question company strategy.

On a public level, GM is reaching out more for input, even putting a decision on producting a concept vehicle up to a vote.

"This is a team game, and to get the team functioning at its most efficient level, you have to have all the players playing to their strengths," GM Vice Chairman Bob Lutz said this month before unveiling a set of new concepts for mini-cars. At a loss for which vehicle should debut at the New York Auto Show, GM decided to show all three and then let the public vote on which should see production.

"If that means a great idea is born in one spot and develops into reality somewhere else," Lutz said. "So be it."

Shift emerges to public

The change has been gradual. Some say it started nearly a decade ago, when GM adopted a team approach to vehicle development that has people from various departments coming together to make important decisions. That was a shift from when managers would send orders down the ranks.

For several years now, particularly since Lutz took on the role of product czar in 2001, designers at GM have talked about feeling more valued and empowered.

But it's been only recently that the shift in thinking has begun to trickle down into GM's public face -- its products, marketing and ads.

"There's a lot less Detroit tunnel vision than there used to be at GM," said David Healy, a Burnham Securities auto analyst. "You can see it in the new models that are coming out. And that's what's important."

Designers set free

Case in point is a new set of vehicles set to debut next year at the Detroit Auto Show.

The ideas for the vehicles -- which GM won't discuss-- emerged from a small team of designers over at Cadillac.

Historically, designers get directions to make vehicles based on a market need or hole in GM's product lineup. In this case, the team branched out and came up with some clay models of vehicles they thought GM should build.

Soon after the models were done, the designers got word that Lutz and CEO Rick Wagoner were coming down to the Warren design center to see them.

"We brought them out on the patio, and they just said, 'Hey, let's do this,' " Manoogian said. "For me that was the epiphany -- when the light bulb went on that we were doing things differently."

Mike Jackson, vice president of advertizing and marketing, said the new culture has infused energy throughout GM.

"We're particularly proud of our new products," he said. "There's a lot of confidence here."

© Copyright 2007 The Detroit News. All rights reserved.

GM, UAW feud over work rules

Friday, April 27, 2007
GM, UAW feud over work rules
Union halts bargaining; plants may lose future work
Sharon Terlep / The Detroit News

General Motors Corp.'s push to implement money-saving rule changes at its factories has the automaker at loggerheads with the United Auto Workers union, with two plants now at risk of losing future work.

GM has halted preparations under way at plants in Kansas City, Kan., and Lordstown, Ohio, to get the facilities ready for new vehicles. The stoppage came after the UAW ordered its local negotiating teams to stop bargaining with the company on work rules designed to make the factories more competitive.

The conflict is the first time the union and the automaker have openly butted heads over rule changes GM has been pushing for months at its plants as it struggles to cut billions of dollars in costs.

"The management and union leadership at both Lordstown and Fairfax are in discussions about improving the competitiveness of both plants and putting both plants in a better position to secure future products," GM spokesman Dan Flores said.

Flores said the company doesn't comment on future products or labor negotiations.

UAW Spokesman Roger Kerson couldn't be reached for comment Thursday.

Union officials at the Lordstown complex have been working to secure production of the next generation Chevrolet Cobalt small car.

The plant has been under intense pressure to cut costs as GM struggles to eke out a profit on small cars produced in North America.

Meanwhile, GM's Fairfax assembly plant in Kansas City hopes to produce the next vehicle to be built on the architecture of the Chevrolet Malibu sedan. The plant is producing the 2008 made-over Malibu, set to hit showrooms later this year.

Current work on the Cobalt and Malibu isn't affected, Flores said.

Word of the skirmish spread after the UAW Local 1112 at Lordstown posted a flier informing workers that GM has "suspended two new vehicle programs for North America."

"The International Union has contacted your Shop Chairman and requested that he along with the Shop Committee suspend all meetings immediately," according to the flier.

Thinning the gap

In recent months, GM leaders have been visiting plants to push for changes that range from getting workers to take on more jobs to outsourcing work not directly related to building vehicles, such as plant maintenance.

GM's goal is to make its plants fully competitive with those of its Japanese rivals in the United States.

GM loses $1,300 on average for each vehicle it makes in North America, while Toyota Motor Corp. makes about $2,100 on each car and truck it builds here, according to the Center for Automotive Research in Ann Arbor.

While more flexible factory rules won't eliminate that gap, GM says they could save hundreds of dollars per vehicle.

National talks lie ahead

The conflict comes before the UAW and Detroit's automakers are set to begin negotiating in earnest this summer. The goal is to secure a new labor agreement when the current four-year pact expires in September.

"The union wants to see a more competitive GM, and it's made some tough choices," said Harley Shaiken, labor professor at the University of California, Berkeley. "But it's not willing to abandon what it's built up over so many decades."

Shaiken said trouble at the local level doesn't necessarily bode badly for the national talks. If the union and GM are able to work out tough issues early on in local contracts, bargaining could go more smoothly at the national level, he said.

"This will make the national talks less contentious, not more," Shaiken said. "It's not a preview necessarily, but rather a drawing of the line."

You can reach Sharon Terlep at (313) 223-4686 or

© Copyright 2007 The Detroit News. All rights reserved.

GM boss vows fight for sales

Thursday, April 26, 2007
GM boss vows fight for sales
In e-mail to top officials, Wagoner touts long-term strategies, attributes Toyota's gain to reduced fleet sales.
David Shepardson / Detroit News Washington Bureau

General Motors Chairman and CEO Rick Wagoner told senior executives the company hasn't given up the fight despite being outpaced by Toyota in global sales in the first quarter of the year.

"We still have the majority of the year in front of us, and we will fight hard for every sale -- all the while staying focused on our long-term goals as a global, growing company," he told high-level company officials in an e-mail Tuesday shortly after Toyota's sales numbers were released.

Wagoner said GM was surpassed by Toyota largely because of its move to reduce unprofitable sales to fleet customers and the fact that Toyota crushes GM in sales in Japan.

"Like many of you, I woke up to news reports today of Toyota passing GM in global sales in the first quarter this year, for the first time ever," Wagoner said in the e-mail obtained by The Detroit News. "I didn't welcome this morning's news, and I know you didn't either. But what's important is that we stay focused on implementing our business strategies around the globe, because they are working."

Officials within the company are trying to emphasize profitability over sales.

A strategy of reducing fleet sales "cost us about 70,000 units in lower daily rental sales in the U.S. and Canada in the first quarter this year nearly the entire amount of our global sales gap versus Toyota. But it was the right thing to do. Our sales and marketing strategy requires patience, but it's working, and we need to stick with it," Wagoner wrote.

Reached Wednesday, GM Vice Chairman Bob Lutz offered a curt response to Toyota's outpacing GM in the first three months of the year: "My reaction is 'So what?' "

GM has been the worldwide leader in auto sales since 1931, when it surpassed Ford Motor Co.

GM sold 9.1 million vehicles in 2006 worldwide, down from 9.17 million in 2005, reporting a net loss of $2 billion, narrowing its $10.4 billion loss in 2005.

Toyota sold 8.8 million vehicles in 2006, up 8 percent and earned more than $11 billion in its last fiscal year. The company said it expects to sell 9.34 million vehicles this year. GM hasn't disclosed what it expects to sell.

In his e-mail, Wagoner noted that GM outsells Toyota in 12 of the 15 top auto markets worldwide, and still outsold Toyota by 1.5 million units in the United States in 2006.

"One question is where did Toyota pass us in sales? Basically, Toyota beats us badly in their home market of Japan (by 2.4 million units on an annual basis), and we win in most other markets," he wrote.

He also noted that GM is "staying focused on further reducing our still huge health care cost disadvantage versus Toyota and other non-U.S. based manufacturers."

Toyota lobbies D.C. harder

On Wednesday, Toyota stepped up its lobbying efforts in Washington, emphasizing its investment in the U.S. at a time when some company officials fear a backlash.

Some 100 U.S. Toyota employees -- including assistant regional managers, plant executives and financial executives -- fanned out on Capitol Hill to take part in a prescheduled "grassroots lobbying effort," spokeswoman Martha Voss said.

"They are here to touch base and say, 'We're here, we're from your district. Here's what kind of jobs and investments we have,' " Voss said, adding the timing had nothing to do with the sales milestone.

Toyota's lobbying efforts haven't gone unnoticed.

"They outspend us," Lutz said in January. "It is my considered opinion that Toyota has more clout in Washington than we do."

At the same time, an issue domestic automakers have been complaining loudly about is the value of the Japanese yen.

President Bush is set to meet with Japanese Prime Minister Shinzo Abe today and Friday.

Automakers argue Japanese currency "manipulation" unfairly gives Toyota, Honda and Nissan up to a $4,000 per vehicle subsidy, by making American cars more expensive in Japan and Japanese imports less expensive here. Japan and Japanese automakers reject the charge.

Two-thirds of the U.S. $88 billion trade deficit with Japan is auto-related.

Japan subsidy edge touted

Last month, U.S. Sen. Debbie Stabenow, D-Lansing, introduced a bill dubbed the Japanese Currency Manipulation Act, which would force Japan's government "to take action to stop subsidizing millions of auto exports to the U.S. by bringing its currency into proper alignment with the U.S. dollar," said a statement from the Automotive Trade Policy Council, a group representing GM, Ford and DaimlerChrysler AG.

The group says the subsidy provides a windfall that ranges up to "$10,000 per vehicle for higher-end Japanese imported SUVs such as those sold by Toyota under the Lexus brand."

National Security Council spokesman Dave McCormick defended the administration's approach and said Wednesday that "we look to have open markets in all areas, and are focused on continuing to find ways for Japan to open up its markets, particularly for foreign investment in the automotive sector."

© Copyright 2007 The Detroit News. All rights reserved.

Sunday, April 29, 2007

Toyota tops GM in 1Q global sales

Apr 24, 8:49 PM EDT
Toyota tops GM in 1Q global sales
AP Business Writer

TOKYO (AP) -- For the first time ever, Toyota sold more vehicles globally in a quarter than General Motors, preliminary January-March figures show, the clearest sign yet that the Japanese company is on track to overtake its U.S. rival as the world's top automaker.

Toyota Motor Corp.'s success is fueled by robust demand for its reliable, fuel-efficient models, including the Camry, Corolla, Yaris and gas-electric hybrid Prius.

It also comes at a time when General Motors Corp., which lost $2 billion last year, has been forced to scale back production and cut costs in a bid to revive its sliding fortunes, even as it leads in China's booming market.

Final bragging rights as the world's top automaker - a title GM has held for 76 years - won't be decided until global vehicle production numbers get tallied for the full year.

But Tuesday's data show that Toyota is getting closer. The Japanese company sold 2.35 million vehicles worldwide in the first quarter, Toyota said, surpassing the 2.26 million vehicles GM said it sold in the period, according to preliminary figures.

In 2006, Toyota's global output rose 10 percent to 9.018 million vehicles, while GM and its affiliates produced 9.18 million vehicles worldwide - a gap of about 162,000. In the first quarter, Toyota made 2.37 million units while GM had expected to produce 2.34 million during the same period, and has not given a final number.

Analysts say Toyota is building on its lead by investing in ecological technology, opening plants around the world, developing new models and wooing drivers with solid marketing that drives home its brand power.

Those are precisely areas in which GM has fallen behind Toyota, analysts say. GM will be hard pressed to play catch-up, making it more likely that Toyota will outstrip GM for the full year, they say.

"Toyota sales are booming because of its good image around the world about reliability and ecological technology," said Koji Endo, auto analyst with Credit Suisse in Tokyo. "It's just the opposite for GM, and its image is deteriorating."

GM said although Toyota won the first quarter, the fight for global leadership is not over for the year. A company spokesman said it would not chase market share solely to recapture the lead from Toyota, and it has no special plan to retake the lead.

"We also had a record first quarter globally. We set sales records in three out of our four regions," said spokesman John McDonald. "We've got our first quarter underneath our belt. Let's see what the rest of the year holds for us. We're going to fight for every sale," he said.

The cycle of good news keeps getting better for Toyota, however, as it can use its profits to keep growing. With the company doing so well, morale is high at Toyota, keeping the positive cycle going, while GM tends to be dragged down by battles with its union, Endo said.

But Endo also warned that increased size also brings other problems like trying to ensure quality and manage a sprawling network of manufacturing and sales.

"As your volume gets bigger and bigger, in many cases efficiency tends to drop," he said. "There might be a risk of being over-stretched."

Toyota was founded in 1937 by the Toyoda family, whose members continue to play key roles and are a symbol of emotional unity for the company and its employees.

Perhaps more famous than the Toyoda family are the company's innovators, such as Taiichi Ohno, credited with inventing just-in-time production to reduce inventory, and the philosophy of worker-empowerment called "kaizen," allowing workers to keep improving production methods and hold the critical power of shutting down the assembly line at any time.

Companies around the world, including those outside the auto industry, have adopted Toyota's methods. Universities, both in and outside Japan, study the Toyota method.

Toyota is also well-known for nurturing worker loyalty by offering lifetime employment. The last time Toyota resorted to massive job cuts was during hard times in 1950.

Toyota has beaten GM in profitability for the past four years, with 1.4 trillion yen ($11.8 billion) profit for the fiscal year through March 2006.

GM, meanwhile, has been negotiating severance packages with thousands of workers in an effort to turn around its North American operations. In the fourth quarter of 2006, it reported a profit of $950 million, a big turnaround from a loss of $6.6 billion a year ago.

Modesty is also a Toyota trademark, and executives have repeatedly played down the prospects of overtaking GM.

Asked that question last week in Detroit, Toyota President Katsuaki Watanabe emphasized that Toyota must continue to improve its quality from the top down to remain a leader in the auto industry.

"We're still developing in many regions of the world. I don't regard that as a success yet," he said.

GM doesn't give yearly forecasts, but Toyota is shooting for global output of 9.42 million vehicles and sales of 9.34 million units.

While Toyota appears on course to supplant General Motors this year, GM's moves to boost overseas production could keep it in the running. The company's sales in China jumped 32 percent last year to 876,747 units, making it the No. 1 seller there. It is also building a new factory in India, another market with tremendous potential.

But analysts note that Toyota's success required long-term planning and years of hard work.

"Winning didn't happen overnight," said Koichi Shimokawa, business administration professor at Tokai Gakuen University. "Japanese makers built their business, slowly but surely, accumulating technology and developing good cars."

Endo believes the trend of Toyota outdoing GM is very difficult to reverse: "Everybody on the road expects Toyota to overtake GM in 2007."


Associated Press writers Hans Greimel and Kozo Mizoguchi in Tokyo and Tom Krisher in Detroit contributed to this report.

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

Copyright 2007 All rights reserved

Saturday, April 28, 2007

MapQuest, OnStar team up on maps

Wednesday, April 25, 2007
MapQuest, OnStar team up on maps
Jeff Karoub / Associated Press

DETROIT -- General Motors Corp.'s OnStar service is working with MapQuest to let drivers link their desktop with the blacktop.

The automaker and the online mapping service of AOL LLC said the expansion of OnStar's in-vehicle navigation system is designed to let its subscribers plan their driving route at and send information on their destination directly to their cars.

OnStar Web Destination Entry being announced today will be launched in a pilot program this summer with a random sample of 3,000 customers. It's expected to be available by the end of the year on more than 2 million GM vehicles with OnStar's Turn-by-Turn Navigation capability.

The navigation system was introduced last year as part of the decade-old OnStar system, which offers driving directions, roadside assistance and other services through about 2,000 advisers at three North American call centers. The system also alerts emergency rescue officials when an air bag deploys or the vehicle is involved in a crash.

Web Destination Entry will allow customers to log onto MapQuest and create up to five destinations, which are then stored on secure OnStar servers. The driver can send them to and access them through the vehicle's OnStar system, which calculates the route and provides voice-guided, step-by-step directions from the vehicle's location.

Although drivers can already get the directions by calling an OnStar operator, OnStar and MapQuest officials said Web Destination Entry adds convenience.

"If you think about Web destination planning end to end today, you've kind of got a static origin and static destination," said OnStar President Chet Huber. "This literally allows the origin to be serendipitously determined at whatever point you want to start that trip."

Jim Greiner, MapQuest's senior vice president and general manager, said the move is responding to customer demand. "Our mission, our vision in life, is to help people find places, whenever and wherever they need to be. We think this partnership is one step, one giant step toward ... fulfilling our vision."

The companies did not disclose financial details.

By teaming with MapQuest, the GM subsidiary is making a "leadership move" in the North American market, although it won't be alone for long, said Phil Magney, principal analyst with Telematics Research Group.

BMW AG recently announced a tie-up with Google Maps. The German automaker said it is launching the service first in Germany, but plans to spread to all markets that employ its telematic system known as Assist.

Ford Motor Co. also has announced a deal with Microsoft Corp. to develop the wireless Sync system. While Sync differs from OnStar in that it links cars with cell phones and personal music players, Ford has said it someday could include laptop computer links, vehicle diagnostics and other services.

Even with the financial struggles facing the domestic automakers, Magney said they can't afford to ignore developing in-vehicle technology and communications systems. Services such as OnStar provide automakers recurring revenue through subscriptions, enhance the technological value of the car and serve as an important tool for enhancing the relationship with customers, he said.

"(They all) realize that long-term, the automaker has to have a wireless connection to the vehicle," he said.

OnStar is standard on more than two-thirds of 2007 model year GM vehicles and will be included on nearly all 2008 vehicles. As an option, it costs $695, which includes the hardware and first year's subscription fee.

© Copyright 2007 The Detroit News. All rights reserved.

Big 3 will offer training in China

Thursday, April 26, 2007
Big 3 will offer training in China
Automakers want to educate suppliers about labor laws and safe working standards.
Associated Press

SHANGHAI, China -- General Motors, Ford and DaimlerChrysler announced Wednesday they will provide training for their suppliers in China on how to keep their working conditions safe, healthy and legal.

The plan has the backing of the China Association of Automobile Manufacturers, a government-supported industry group, the three automakers said in an announcement.

General Motors Corp. has more than 20,000 employees in China and relies on suppliers employing thousands more. Ford Motor Co. and German-American automaker DaimlerChrysler AG similarly have many suppliers based in China.

Senior executives of the three automakers were in China's commercial capital for the weeklong 2007 Shanghai Auto Show, which ends Saturday.

The automakers will use training designed by the Automotive Industry Action Group aimed at educating suppliers about Chinese labor laws and improving compliance with safe working standards, the statement said.

"The single most important resource at any of our member companies is people," J. Scot Sharland, the action group's executive director, said in the statement.

"Given the tremendous growth of North American investment in the developing Chinese automotive supply chain, it is imperative that these companies are cognizant of local labor laws and fundamentally understand that Ford, GM and DaimlerChrysler expect 100 percent compliance."

The training is due to begin by the middle of 2007, it said.

The statement cited an unnamed official from the Chinese automotive industry group noting the need for companies to abide by domestic labor laws.

Multinational companies operating or sourcing in China are under intensifying scrutiny for labor conditions at their factories and those of their suppliers.

Meanwhile, China has been urging foreign-invested companies to let employees join the government-sanctioned labor federation.

© Copyright 2007 The Detroit News. All rights reserved.

Friday, April 27, 2007

GM's global sales rise, while market share falls

Friday, April 20, 2007
GM's global sales rise, while market share falls
Automaker reports gain of 66,814 sales over year-earlier period; still loses ground worldwide.
Greg Bensinger / Bloomberg News

DETROIT -- General Motors Corp., defending its standing as the world's largest automaker against Toyota Motor Corp., said first-quarter global sales rose 3 percent while its market share fell.

GM sold 2.26 million vehicles in the three months ended March 31, a gain of 66,814 over the year-earlier period, the Detroit-based company said Thursday in a statement. Global market share dropped to 13 percent from 13.1 percent, GM said.

The results indicated that GM's efforts to grow outside North America are succeeding as the company works to stem $12.4 billion in losses over two years. GM added sales in every region except North America, and boosted international sales to about 60 percent of its business, up from 55 percent at the end of 2006.

"This makes apparent the drag the U.S. is having on GM's performance," said Efraim Levy, a Standard & Poor's equity analyst in New York. "For a sustained turnaround, they have to be profitable in the U.S., the most lucrative market."

North American sales fell 6 percent, GM said. Levy said the automaker "probably would have gained market share if they didn't lose it at home."

Industrywide global sales grew 3 percent, to 17.41 million vehicles, and were on a pace to reach nearly 70 million by the end of the year, according to GM estimates.

GM's global sales fell about 0.8 percent to about 9.1 million last year. Toyota City, Japan-based Toyota has forecast 9.34 million sales for 2007. GM hasn't issued its projection.

GM's European sales rose 5.8 percent during the first three months and more than doubled in Russia, the fastest sales growth in the period, the automaker said.

Sales grew 17 percent in GM's Latin America, Africa and Middle East region, and 20 percent in the Asia-Pacific region.

GM has been focusing much of its overseas expansion on China, where it expects to almost double production to 1.7 million vehicles over the next three years. China sales rose 25 percent to 289,915 vehicles, GM said.

Hummer sales, down 23 percent to 15,177 vehicles, suffered the largest decline of any of GM's global divisions. Pontiac sales fell 19 percent and Saab sales dropped 11 percent.

Chevrolet, GM's largest division, gained 3.8 percent to 1.04 million vehicles last quarter, GM said. A 33 percent jump in European sales helped offset a 4.7 percent decline in North America.

Shares of GM fell 33 cents to $31.37 at 4:01 p.m. in New York Stock Exchange composite trading. They have gained 2.1 percent this year.

GM's 8.375 percent note due July 2033 rose 0.19 cent to 90.63 cents on the dollar, yielding 9.34 percent, according to Trace, the NASD's bond-price reporting service.

© Copyright 2007 The Detroit News. All rights reserved.

Toyota overtakes GM

Wednesday, April 25, 2007
New world order
Toyota overtakes GM
No. 2 GM: Profit, not size, is the goal
Sharon Terlep / The Detroit News

DETROIT -- Just three months after Rick Wagoner vowed General Motors Corp. would fight to remain the world's largest automaker, Toyota Motor Co. has toppled it from the No. 1 spot for the first time in 76 years.

The historic reversal is largely symbolic and widely anticipated. But the new reality, as well as the speed at which Toyota closed in, has implications for both companies.

Toyota's new role is bound to have a deep psychological impact on one of the last manufacturing sectors where America still leads.

Gone are GM's bragging rights in an industry dominated by image and marketing might. Also dwindling is the automaker's ability to dominate price wars and smaller players.

At the same time, Toyota will find itself grappling with pressures long familiar to GM -- intense scrutiny from the outside and the threat of complacency within.

"This wasn't news that we wanted to hear," GM spokesman Tom Wilkinson said. "But it won't distract us from the business at hand: designing, building and selling the best cars and trucks for customers around the world."

Industry analysts have maintained that, for GM, finding a competitive business model in which it can shave costs and boost sales is far more crucial than maintaining its role as sales leader.

GM and Toyota do battle in nearly every segment and every region in the world, with Toyota drawing strength from its superior profitability.

On Tuesday, Toyota announced that it sold 2.35 million vehicles worldwide in the January-March quarter, surpassing the 2.26 million vehicles that GM sold in the same period. Toyota's totals include its Hino heavy truck and Daihatsu small-car brands.

Toyota's sales marked an 8 percent increase over the previous year. It expanded in most regions of the world but slipped 5 percent in its weak domestic market.

Toyota's worldwide production rose 2.6 percent to 2.37 million vehicles in the first quarter.

Toyota produced 1.04 million vehicles overseas, and exported nearly 700,000 from Japan. The Japanese automaker is rapidly expanding production facilities abroad, and Toyota President Katsuaki Watanabe attended the groundbreaking last week of Toyota's eighth vehicle assembly plant in North America, in Blue Springs, Miss.

GM aims to close plants

GM, meanwhile, is in the midst of massive downsizing in North America that calls for closing 12 plants by 2012.

But while GM's North American sales were down about 6 percent -- largely because of cutbacks in less profitable fleet sales -- the automaker's worldwide sales rose 3 percent to a record high.

It's still not certain whether Toyota will end 2007 on top of GM, but many analysts expect it will.

Jeff Schuster, an analyst with J.D. Power and Associates, forecasts that Toyota will sell about 280,000 more cars than GM this year and about 850,000 more by 2009. "We don't see this as a one-quarter phenomenon," he said. "They are both going to grow, but Toyota is growing faster."

GM marketing chief Mark LaNeve told Chevrolet dealers Tuesday in Las Vegas that GM wasn't stressed about Toyota passing them and said he was surprised it was making so much news, said one dealer who asked not to be named.

LaNeve told the dealers that the GM-Toyota race isn't over since Toyota is traditionally strong in the first quarter of the year and GM is strong in the second quarter.

Toyota has been gaining on GM for years, buoyed by billions in cash reserves, soaring sales in the United States and an Earth-friendly image at a time when global warming is emerging as one of the biggest issues.

All the while, GM is fighting a host of demons: image problems, soaring health care costs, an oversized staff and too much reliance on gas-guzzling trucks and SUVs.

"There's good big and there's bad big," said auto analyst John Casesa, managing partner of Casesa Shapiro Group. "Good big is when you're efficient and large. Bad big is when you're big but have an uncompetitive cost structure. And that is what GM is moving away from."

Both companies on Tuesday played down the stake they have in being No. 1. But it's clear that the shift is significant.

Wagoner, GM's CEO, predicted in 2005 that GM would stay on top for another 70 years. He backed off that statement, but as recently as January said GM would fight to keep the "world's largest" title -- something GM mentions every time it sends out a news release.

"It's not something where we would sit back and let somebody pass us by," Wagoner said in a January talk with reporters. "But the other side of it is we're going to fight for every sale and do it in a way that's consistently building the value of the enterprise from a shareholder perspective."

In many ways, however, losing the No. 1 spot will bring some relief to GM, which for months now has been dogged by questions about that fateful milestone. GM leaders have long maintained that their focus is on becoming leaner and more profitable, even at the risk of losing market share. In that case, Tuesday's signpost shows they're serious.

Analyst: Toyota has fears

Toyota has fought to grow sales, but at the same time fears what being No. 1 could mean, said Anand Sharma, manufacturing expert and co-founder of TBM Consulting Group.

"They think the moment you are on top is the moment you are sliding down," Sharma said. "In a way they've dreaded it and feared that it may lead to some complacency in their ranks."

And while Toyota has long maintained its focus is on quality and customers rather than size, its climb has been relentless.

"Don't believe for a second Toyota's goal -- or Watanabe's goal -- isn't to surpass GM," said Michelle Krebs, senior editor of Edmunds' "Toyota desperately wants to be No. 1. The automaker just worries about what goes along with being No. 1."

It's a worldwide fight

The battle between GM and Toyota spans the globe, with competition intense in fast-growing markets such as China, where GM last year sold more than 1 million vehicles.

Even with GM's success abroad, Toyota is growing faster in most parts of the world and especially in North America.

Given the momentum, it is unlikely GM will be able to win back the top spot that it won in 1931 when it overtook another automotive giant: Ford Motor Co.

"It's devastating to me -- and it could have been prevented," said dealer John Rogan of John Rogan Buick-Livonia. He said while GM has cut back on unattractive fleet sales, it hasn't done enough to replenish its product lines.

"We eat sleep and breathe the sales of automobiles, and this is just an indication of the larger trend," Rogan said. "But the year is not up, so watch out."

Detroit News Staff Writer Christine Tierney contributed to this report. You can reach Sharon Terlep at (313) 223-4686 or

© Copyright 2007 The Detroit News. All rights reserved.

Tuesday, April 24, 2007

Toyota passes GM for first time in global sales

Tuesday, April 24, 2007
Toyota passes GM for first time in global sales
Hans Greimel / Associated Press

TOKYO -- Toyota Motor Corp. became the world's top auto seller in the first three months of the year, passing rival General Motors Corp. for the first time, the Japanese automaker said Tuesday.

Toyota sold 2.348 million vehicles worldwide in the January-March quarter, company official Satoshi Yamaguchi said, surpassing the 2.260 million vehicles that GM said it sold during the same period.

The results mark the first time Toyota has beat GM in global sales on a quarterly basis, he said.

While the figures represent only quarterly sales results, they foreshadow a tough challenge for GM as it fights to hold onto it title as world's top automaker -- a claim usually staked on annual production figures.

In 2006, Toyota's global production surged 10 percent to 9.018 million vehicles, while GM and its group automakers produced 9.180 million vehicles worldwide -- a gap of about 162,000. In the first quarter, Toyota made 2.367 million vehicles worldwide, while GM had expected to produce 2.335 million.

It's no time to start popping the champagne, however, because overtaking GM is not Toyota's first priority, said Paul Nolasco, a spokesman for the Japanese company.

"Our goal has never been to sell the most cars in the world," Nolasco said. "We simply want to be the best in quality. After that, sales will take care of themselves."

Indeed, it is Toyota's sterling reputation for quality and fuel efficiency that has lifted its global sales, including the popular Camry, Corolla and Prius gas-and-electric hybrid.

GM, meanwhile, cut production last year as high fuel prices drove people away from its trucks and sport utility vehicles. To shore up earnings, it has cut jobs and closed plants.

Toyota has been gaining steadily on GM in recent years, and analysts have been saying it is only a matter of time before it eclipses its Detroit-based rival, which has seen its market share shrink in the United States even as it leads sales in China.

In the vital American market, Toyota's sales rose 12.9 percent last year, catapulting it past DaimlerChrysler AG as the No. 3 seller of autos in the U.S. Toyota's share of the U.S. market climbed to 16 percent in March, behind GM's 22 percent and Ford Motor Co.'s 17 percent.

A copy of Toyota's "global master plan" leaked to the news media late last year calls for grabbing 15 percent of the world car market by 2010 in the company's quest to unseat GM.

GM hasn't released a forecast for this year, but Toyota is shooting for global output of 9.42 million vehicles and sales of 9.34 million units.

While Toyota appears on course to supplant General Motors this year, GM's moves to boost overseas production could keep it in the running. The company's sales in China jumped 32 percent last year to 876,747 units, and it is also building a new factory in India, another market with tremendous potential.

GM launched a major restructuring in November 2005 that called for closing 12 plants by 2008, slashing its work force, reducing capacity and cutting costs.

But as Toyota rolls on, its executives are growing concerned about a possible political backlash in the U.S., even though American consumers continue to flock to Toyota dealerships. U.S. lawmakers from manufacturing states charge that the Japanese government has kept the yen artificially low, giving Japanese automakers an advantage.

"We are certainly concerned," Toyota Senior Adviser Hiroshi Okuda said earlier this year, adding that Toyota needed to "significantly" increase the number of foreigners on its board.

At that time, there were no foreigners in top positions at Toyota. But earlier this month, Toyota promoted American James Press, president of the automaker's North American division, to the inner circle.

Toyota's shares closed down 0.54 percent to 7,370 yen (US$62.46) on the Tokyo Stock Exchange on Tuesday.

© Copyright 2007 The Detroit News. All rights reserved.

UAW member perks cut

Tuesday, April 24, 2007
UAW member perks cut
Tough times force Big Three, union to scale back tuition, other programs
Josee Valcourt / The Detroit News

Steep production cuts and shorter working schedules at Detroit's automakers are forcing the companies and the United Auto Workers union to scrap or pare back worker programs that had offered everything from job training to education.

The programs are funded by the companies and by a fraction of workers' salaries based on straight time and overtime, both of which have fallen due to plant closures, layoffs and production cutbacks.

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler have all revised the courses they partly subsidize, eliminating or freezing many programs that are not directly related to workers' jobs.

Last month, a governing body comprised of five union members and five Ford representatives decided to slash a plethora of skill-enhancement programs used by workers, retirees and spouses.

"The reduction in hours worked, and particularly the decrease in overtime hours worked, has reduced revenue to the point where Joint Programs is in an unsustainable financial condition," the UAW-Ford National Programs Center said in a letter distributed to union officials, plant managers and plant human resource managers last month. "Unless significant program reductions are made immediately, the UAW-Ford National Programs will be in a deficit situation before the end of 2007."

Gone are services such as individual tutoring for college classes, computer software training, math enrichment sessions and English as a second language. General Educational Development classes, which allow students to earn the equivalent of a high-school diploma, also have been cut.

Educational and training programs tailored for retirees and personal finance courses have been temporarily suspended.

Some programs still offered

But automakers say many programs are still available.

"There is still very important job-related training and educational services that are continuing for employees," said Ford spokeswoman Marcey Evans.

For instance, employees will still be reimbursed for the costs incurred in earning certain degrees from accredited colleges.

The carmakers and unions are focusing on maintaining programs on health and safety, job security, quality improvement, sourcing, and plant-operating efficiency, according to company and union officials.

But employees are feeling the cuts.

In addition to the previously announced closure of the child care centers, workers say fitness centers at Ford's Dearborn and Louisville, Ky., truck plants have been shuttered.

At the Rouge plant in Dearborn, self-improvement classes where workers could learn about plumbing or computer programming have been cut.

Moves surprise workers

That is affecting workers who were counting on such courses to help them launch second careers.

"They closed the Rouge Academy completely. They closed all of that," said Ron Turner, who worked in the plant's paint shop for more than 30 years until accepting a buyout several weeks ago.

He had planned to apply for a grant through the UAW-Ford National Programs Center to study broadcasting at the Specs Howard School of Broadcast Arts in Detroit.

"They were supposed to fund up to $4,600 toward my course but when I went to apply, they said that all self-improvement programs have been cut," Turner said. "I'm going to have to come up with some other way to fund my class."

Detroit's automakers have little choice, given pressures to cut costs across the board.

The three domestic automakers are struggling in a cutthroat U.S. market, where their combined market share has slumped, falling 7.7 percent to 55.8 percent over the past year alone.

GM, Ford and Chrysler are restructuring their businesses and, as a result, cutting the hourly work force that contributes to the funding for these programs.

"These are some of the tough decisions that the company has had to make in order to contribute to our turnaround effort," Evans said.

Gym hours cut back

Chrysler workers are also feeling the pinch. Previously, the gym at Warren Stamping was open five days a week until "the wee hours of the morning," said Mike Tremain, a skilled trades worker at the factory. "The hours were cut right in half."

Unions are forced to make tough choices with shrunken budgets. "The locals don't have money to do things they used to," said Chris Sherwood, president of Local 652 in Lansing that represents workers at GM's Cadillac plant.

Sherwood has watched the local membership fall from 14,000 people in 1980 to 3,300 today.

"All that money is lost," he said. "And it's hurting everybody. It's a sad situation."

GM spokesman Dan Flores declined to say which programs have been affected, but he said the company is working with the union to limit the impact. "We are jointly working together with the UAW to look for ways to be as efficient as possible with each and every joint training dollar."

The automaker's U.S. work force has been reduced dramatically, mainly through attrition and large-scale early-retirement programs. GM now has to do "more with less," Flores said.

Along with its unions, GM is "certainly looking for ways to use the joint funds properly," he said.

Detroit News Staff Writer Sharon Terlep contributed to this report. You can reach Josee Valcourt at (313) 222-2300 or

UAW-Ford cuts

Production cuts and shorter working schedules have impacted education and other programs for workers, retirees and families. Here is the status of some of those programs:

Family Service and Learning Centers: Child care centers closing on June 30.

Skills Enhancement Programs: In-plant education centers closed, effective April 16.

Fitness Centers: In-plant programs will be redesigned; membership programs at outlying locations will not be renewed.

Retiree Education and Training Assistance Plan: Moratorium on tuition assistance.

Automotive Industries Studies, Prior Learning Assessment and UAW-Ford University: Discontinued.
Source: UAW-Ford National Programs Center

© Copyright 2007 The Detroit News. All rights reserved.

UAW rethinks rigid job rules

Saturday, April 21, 2007
Outsourcing dilemma
UAW rethinks rigid job rules
Louis Aguilar / The Detroit News

STERLING HEIGHTS -- The huge temporary walls went up in the heart of Ford Motor Co.'s Van Dyke Transmission plant last August. Depending on which side of them you're on, they represent the best way to save Michigan auto factories or stand as a depressing symbol of lost jobs.

Behind the divide made of plywood, plastic sheeting and chain-link fence, 700 contract workers represented by unions other than the United Auto Workers are installing a $320 million transmission line for the next-generation Ford Escape SUV.

"We save jobs," said Rick Koloszi, general manager of Stenco Construction Corp., the Livonia-based general contractor supervising the work. "We do the job on time, we pay our workers good union wages, and then we go away and let the regular employees run the lines. That's how we help save the company money and save union jobs."

But outside the walls, some UAW workers at Van Dyke Transmission are crying heresy.

"I have to look at that wall every day and it gets to me," said Lee Gotts, a veteran skilled trades worker at the plant. "It's demoralizing. That's our job. That's what we used to do in this plant and we never even got a chance to bid on the work."

A decade ago, a non-UAW worker would not have been allowed to change a light bulb in a Ford plant, and the union fought any move to outsource union jobs tooth and nail. But with all three Detroit automakers closing plants and cutting thousands of jobs, the union has been forced to make tough choices to save plants and jobs and secure new work.

"The use of contractors gives (Detroit's) Big Three much needed flexibility," said Greg Gardner, spokesman for Troy-based Harbour Consulting, which tracks auto manufacturing productivity.

Deals are a money-saver

At the recommendation of top union executives, UAW leaders at the Van Dyke plant agreed to adopt work rules last year under what's known as a "competitive operating agreement." The deal allowed Ford to outsource the installation of the assembly line.

Ford is negotiating such operating agreements at other plants as well. Thirty-eight of the 47 plants in the United States and Canada that are run by Ford and Automotive Components Holdings, the Ford holding company that manages former Visteon Corp. operations, have new competitive operating agreements.

The agreements are a key part of Ford's effort to drive down costs and become more competitive with foreign automakers, said Ford spokeswoman Anne Marie Gattari. Workers often OK the deals by large margins, she said.

The deals generally unwind costly work rules, reduce overtime and, crucially, allow the company to outsource certain jobs to lower-paid workers. UAW workers' wages -- which average $26 dollars an hour -- are not affected by the agreements.

General Motors Corp. and DaimlerChrysler AG's Chrysler Group are pushing through similar agreements at their plants.The deals are saving Ford -- which lost $12.7 billion last year -- hundreds of millions of dollars and helping it inch closer to Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. in manufacturing efficiency.

In 2005, the latest figures available, Ford had a $2,177-per-vehicle profit gap compared to Toyota in North America, according to Harbour Consulting. Ford's profit gap compared to Honda was $1,805 and $2,839 for Nissan.

Some workers chafe at deal

Ford plant workers cast their ballots knowing their jobs could be cut or moved to Mexico if they vote against the agreements. Some workers and union officials also said they feel an obligation to help Ford survive and become competitive again.

"It's something we fought for years," said Jim Stoufer, president of UAW Local 249, which represents workers at Ford's Kansas City Assembly Plant, which makes Ford F-150 pickups and Escape SUVs. "But the leaders aren't stupid. We understand it's not business as usual."

Stoufer said about 80 percent of Local 249's workers approved a competitive operating deal.

The outsourcing is made somewhat more palatable to some workers by the fact the most of the contractors are union workers.

"We welcome the chance to keep union talent here in Michigan," said James Tharrett, president of Millwrights Union Local 48091 in Detroit, which represents contract workers at Van Dyke Transmission.

Chuni Gala, owner of Stenco Corp., said he uses only union labor at Ford and Chrysler. "It's no secret the automakers need to cut their costs and we hope to be part of that solution," Gala said. "By far, most of our workers are Michigan-based workers."

The contractors building the new line at Van Dyke transmission are from various unions representing carpenters, iron workers, electricians, and pipe fitters.

But some workers will never accept outsourcing in UAW plants. Al Figlan, a skilled trades worker at Van Dyke Transmission, has filed 47 grievances against Ford, many relating to outsourcing, and has hired an attorney to challenge the automaker.

Figlan comes from a long line of Ford workers -- his grandfather worked for Henry Ford building parts for the Model T.

Before the contractors came in, he and the other skilled trades workers installed every major piece of machinery at the plant. Two weeks ago, Figlan received word from the UAW that Van Dyke workers will get a chance to vote on the competitive operating agreement in place there.

"What we want is that we get to do at least some of the work," said Figlan, who questions how much the outsourcing really saves Ford.

"They never tell us how much these contractors are making," he said. "Every job we've done it's been on time and under budget. We've won awards for our productivity. We know how to do our jobs.

"Why would they not utilize their own people and save the money? We are the ones who buy the Ford products. The majority of the contractors don't even drive Fords."

© Copyright 2007 The Detroit News. All rights reserved.

Latest Chevy Volt will be fueled by hydrogen

Friday, April 20, 2007
The sequel
Latest Chevy Volt will be fueled by hydrogen
Sharon Terlep / The Detroit News

Although General Motors Corp.'s much anticipated plug-in hybrid Chevrolet Volt is still years away, the automaker is already planning a sequel -- a hydrogen-powered version.

At the Shanghai Auto Show today, GM will announce plans to produce a hydrogen-fueled version of the Volt concept vehicle introduced in January at the Detroit auto show. Like the original Volt, it would be a plug-in powered by a lithium ion battery, but the battery would be mated with a hydrogen fuel cell system rather than a small gasoline engine.

The Volt is GM's first application of E-Flex, which matches battery power with several different energy sources.

"The beauty of the strategy is that it allows us to package various propulsion systems into the same space depending on what energy is available locally," said Larry Burns, GM's vice president of Research and Development and Strategic Planning.

Plug-in hybrids are gasoline-electric vehicles that can recharge batteries with an extension cord and a wall outlet. The Volt can be fully recharged by plugging it into a 110-volt outlet for six hours.

The hydrogen variant of the Volt would be GM's fifth hydrogen-powered drivetrain, versions of which exist now in vehicles such as the GM Sequel, a hydrogen fuel-cell powered concept that was introduced in Detroit in 2005.

The plug-in hydrogen Volt would have a 300-mile range with combined battery and hydrogen power. No petroleum products would be consumed and the vehicle would be emissions-free.

That's because the power for fuel-cell vehicles is produced when oxygen in the air combines with hydrogen in a fuel tank. GM has said it ultimately sees hydrogen fuel cells as the likely solution to curbing the nation's reliance on imported oil.

The E-Flex system is GM's way of dealing with the uncertainty surrounding the future of alternative energies in the auto industry.

E-Flex's roots go back several years and are a result of conflicting schools of thought within GM -- those who felt fuel cells were the future and those who wanted to develop the internal combustion engine further, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

"There was an internal discussion over which fueling system would emerge as the dominant system," Cole said. "This system has that flexibility. It makes a great deal of sense."

Before either version of the Volt can be built, significant improvements are required in battery technology. GM has said a mass-market plug-in hybrid requires a battery with a range of at least 40 miles. The range on plug-in cars has typically been no more than 20-30 miles on battery alone.

In an effort to develop the batteries, GM has signed on at least four battery suppliers to help as well as expanding its in-house staff, officials have said.

"There's a tremendous will in the company to do this," GM Vice Chairman Bob Lutz told reporters at the Geneva car show last month when asked about the Volt. Lutz has said he believes there is a 90 percent chance GM will succeed in making the vehicle a reality.

You can reach Sharon Terlep at (313) 223-4686 or

© Copyright 2007 The Detroit News. All rights reserved.

GM challenges the eco-critics

Wednesday, April 18, 2007
2007 SAE World Congress
GM challenges the eco-critics
Environmentalists make case to Bob Lutz; GM says plans not cut and dried as explained.
David Shepardson / Detroit News Washington Bureau

DETROIT -- General Motors Corp. Vice Chairman Bob Lutz met with one of the company's strongest environmental critics on Tuesday, following up on an earlier challenge.

Earlier this month, Lutz called on the Union of Concerned Scientists, a group that has lobbied for higher fuel economy standards, to visit GM, talk to his staff and show them the gasoline-saving technology the group says is readily available but ignored by automakers.

"This is a challenge I want to put out to people who think they have a solution, and are so much smarter than we are," Lutz told the Wall Street Journal. "Let them come and see us. If the technology were readily and easily available, what on earth would our motive be for withholding it?"

Meeting in Lutz's office at GM's headquarters, David Friedman, head of the Clean Vehicle Research program at the Union of Concerned Scientists, and Lutz discussed the group's contention that with off-the-shelf technology, the automaker could build a minivan that would reduce tailpipe emissions by 40 percent -- and cost just $300 per vehicle.

In March, the group's engineers unveiled a minivan design they said showed automakers can build affordable vehicles with existing technology that meet or exceed pollution standards adopted by California and other states.

Following the two-hour meeting Wednesday, Friedman said GM and the group remained at "loggerheads." Both sides agreed to keep details confidential.

But Friedman noted, "I think we will have to build a driveable vehicle" to convince GM the technology works. "We didn't change any minds."

Lutz declined comment. GM spokesman Chris Preuss said, "The challenge with the environmentalists is that there is a complete lack of business and technical experience from which they can draw conclusions.

"The fact is that we must balance dozens of complex regulatory and consumer issues in producing vehicles -- safety, performance, fuel economy and affordability, to name but a few The more we can inform and engage the misconceptions, the more robust the societal discussion will be. For that reason, we think the meeting was very worthwhile."

Lutz has been an ardent critic of fuel economy mandates. With Congress considering proposals to dramatically increase the fuel efficiency of the nation's cars and trucks, automakers face the prospect of spending billions of dollars to adapt their fleets.

"There is no technological bag of tricks that enables much better fuel economy than we have today," he wrote on a company blog in December. "Despite what alarmists may think, we don't have any magic 100-mpg carburetor that we're holding back because we're in bed with the oil companies."

Larry Nitz, executive director of GM's hybrid technology, said Tuesday at the Society of Automotive Engineers 2007 World Congress that incorporating existing technology could boost fuel efficiency by 18-20 percent.

"In the long run, we need to take the automobile out of the environmental debate" by moving to electrically-powered vehicles, Nitz said.

You can reach David Shepardson at (202) 662 - 8735 or

© Copyright 2007 The Detroit News. All rights reserved.

Friday, April 13, 2007

GM puts brakes on new rear-wheel drive vehicles

Thursday, April 12, 2007
GM puts brakes on new rear-wheel drive vehicles
Sharon Terlep / The Detroit News

DETROIT -- General Motors Corp. is holding off on plans for virtually all new rear-wheel drive cars in response to the threat of far stricter fuel economy standards from the federal government.

Concerned that heightened mileage requirements will penalize the automaker for producing new versions of high-performance rear-wheelers, GM is halting all but a few of the vehicles in its future lineup.

Word of GM's change in plans came this week from GM product czar Bob Lutz in an interview with the Chicago Tribune. A GM spokesman confirmed the information on Wednesday.

While GM wouldn't give specifics, the move could mean consumers will never see a rear-wheel replacement for the full-size Buick Lucerne and Chevrolet Impala sedans or a small rear-drive Cadillac compact.

Still in the works, however, are a Chevy Camaro sports coupe due out next year and the Pontiac G8 sedan, which is being developed with GM subsidiary Holden in Australia.

"It says they are making a commitment to maximizing fuel economy and maximizing fuel efficiency, and that makes sense," said Tom Libby, an analyst with J.D. Power and Associates' Power Information Network.

The Bush administration wants to reduce U.S. gasoline usage 20 percent by 2017, in part by raising fuel economy standards an average of 4 percent annually. That would bring cars to an average 34 mpg by 2017, up from 27.5 mpg today. Also, the Supreme Court ruled last week that the Environmental Protection Agency has the authority to regulate cars' carbon dioxide emissions.

Lutz has been a scathing critic of the Bush plan, arguing that such a mandate could add $5,000 to the average cost of vehicles. "It would bring the market to a standstill," he told The Detroit News in an interview last week during the New York Auto Show. "We've pushed the pause button. It's no longer full speed ahead."

Rear-drive uses more gas

Front-wheel drive vehicles became popular alternatives to rear-drive cars during the oil crisis in the 1970s. Rear-drive vehicles typically suck more gas because they are heavier and tend to be tuned for high-performance driving.

GM appears to be the first automaker to shift its product pipeline based on the growing possibility of strict fuel economy mandates, though its crosstown rivals say they're watching fuel economy regulations closely.

Ford Motor Co. spokesman Jim Cain said its plans already are heavy on vehicles that feature fuel-saving technologies. Cain said while the automaker has not announced plans for an all-new rear-drive car, Ford remains interested in the vehicles. Ford will continue producing new versions of its Mustang muscle car.

DaimlerChrysler AG's Chrysler Group, which has spawned several rear-drive vehicles from the Chrysler 300 architecture, on Wednesday said it has no plans to back away from that market. The Auburn Hills automaker has plans to revive the Dodge Challenger muscle car at the end of next year.

"We've had some great success with that architecture," Chrysler Group spokesman Rick Deneau said. Fuel economy regulations aren't "affecting plans for anything we're going forward with."

Instead, he said, Chrysler will focus on improving technology on rear-wheel drives to make them more fuel-efficient. It does, however, plan to ramp up investment in fuel-sipping small vehicles.

"You arrive at a balanced product plan and then you work on the technology to deliver the fuel economy that isn't just what the government requires, but what consumers expect," Chrysler spokeswoman Colleen O'Connor said.

Change of heart seen

GM's decision to put the brakes on rear-wheel drive models is the latest twist in GM's on-again, off-again attraction to the vehicles. Lutz first championed GM's new rear-wheel-drive platform, known as Zeta, in 2003 as the industry was turning its attention toward rear-wheel-drive vehicles. The Chrysler 300C and revamped Ford Mustang were smash hits.

Two years later, though, GM killed plans for a line of rear-wheel drive sedans set to come out in 2008, largely to free up resources to speed up production of new lines of large pickups and sport utility vehicles. But the automaker reversed that decision, laying the groundwork for rear-drive vehicles in several of its brands.

Now, it seems, most of those plans are off. "It's too late to stop Camaro, but anything after that is questionable or on the bubble," Lutz told the Tribune. "We'll decide on our rear-drive cars when the government decides on CO2 levels and CAFE regulations."

While the move is bound to upset some rear-drive loyalists, GM's approach makes sense, said Jesse Toprak, senior analyst with, an automotive resource tailored for consumers.

"They are prioritizing their resources and putting those funds into next-generation trucks and sport utility vehicles," he said. "They're being forced to do it."

Contact Sharon Terlep at (313)223-4686 or

© Copyright 2007 The Detroit News. All rights reserved.

Thursday, April 12, 2007

Automakers battle states' jurisdiction

Wednesday, April 11, 2007
Automakers battle states' jurisdiction
GM exec says state carbon reductions affect fuel economy, which is solely federal territory.
David Gram / Associated Press

BURLINGTON, Vt. -- A General Motors Corp. executive told a federal judge Tuesday that vehicle carbon emission reductions ordered by California and 10 other states would require average fuel economy standards for cars and the lightest category of trucks of 43.7 miles per gallon.

"The standards we've had to make changes to in the past are incremental," said Alan Weverstad, executive director of GM's environment and energy unit. Lowering carbon emissions as much as the states want will involve "fuel economy requirements that are just unbelievably extreme," he said.

The testimony came as a federal trial got under way in which automakers are trying to block states from adopting new standards aimed at lowering emissions of carbon dioxide, a greenhouse gas tied to climate change.

The companies argue that reducing carbon requires improving fuel economy, since carbon emissions are proportional to the amount of gasoline burned. And they say fuel economy, under a 1975 federal law, is solely under the jurisdiction of the U.S. Department of Transportation.

The states argue that they can regulate carbon emissions as a tailpipe pollutant under another federal law, the Clean Air Act.

The Vermont case is first in a series expected to be heard countrywide as the auto industry tries to knock down carbon limits. It is also the first since the Supreme Court ruled last week that carbon emissions can be regulated under the Clean Air Act.

Only the Vermont rules are at issue in the case before U.S. District Judge William Sessions III. But Charles Territo, spokesman for the Alliance of Automobile Manufacturers, said whatever its outcome, the case is seen as a bellwether for others around the country.

The trial is expected to last about three weeks.

Weverstad said under questioning that GM had conducted an engineering study called a "maximum technology scenario," in which it hypothetically said 89 percent of the cars it sells in the next nine years and 81 percent of the trucks would be converted to gas-electric hybrids.

Even with such an approach, GM still could not meet the new carbon standards and would waste $25 billion or more on the effort, he said.

Matthew Pawa, a lawyer for the environmental groups, sought through questioning to point out that the industry predicted technological and economic calamity when the Clean Air Act was passed in 1970, when the law requiring fuel economy standards passed five years later and when other regulations were taking effect.

At a noontime news conference two environmental groups sought to expand on that point.

"This is the same old saw of pessimism that we've heard from the auto industry time and again," said Christopher Kilian, director of the Conservation Law Foundation's Vermont office.

© Copyright 2007 The Detroit News. All rights reserved.

GM pulls ads for Imus

Thursday, April 12, 2007
GM pulls ads for Imus
Show's top '06 sponsor latest to exit over insult
Melissa Preddy / The Detroit News

General Motors Corp. on Wednesday joined the ranks of sponsors pulling ads from the "Imus in the Morning" program following shock jock Don Imus' controversial comments last week about female African-American college athletes.

GM said it will suspend advertising during the Imus show, which originates on WFAN in New York, a CBS Corp. station, and is syndicated nationally. It is also simulcast daily on the MSNBC cable television channel, which announced Wednesday that it will drop its broadcast of the show.

Last year, GM was the top advertising spender at MSNBC overall and during the Imus program, according to TNS Media Intelligence.

"General Motors obviously does not condone the comments Don Imus recently made in reference to the Rutgers University women's basketball team," the automaker said in a statement.

"Mr. Imus has publicly apologized, and admitted his comments were 'completely inappropriate and offensive.' He has also stated his intention to make changes to his show. We acknowledge and welcome these actions. We have decided, however, to suspend our advertising while we continue to monitor the situation."

GM spent an estimated $692,000 buying commercial time during the MSNBC simulcast of the Imus program in 2006, according to TNS. Overall, GM spent $7.95 million with MSNBC. Other top sponsors of Imus include Sprint Nextel Corp., PetMed Express Inc., Verizon Communications Inc. and drug maker GlaxoSmithKline PLC.

Karen Benezra, editor of Brandweek magazine, said GM was tardy in yanking its support of the show.

"Everybody else walked out" Tuesday, she said. "GM stood by an extra day and looks a bit foolish for doing so. As soon as something like this happens most marketers want to fold up their tents."

People speaking for Ford Motor Co. and DaimlerChrysler AG's Chrysler Group said their companies don't advertise during Imus' show, though some of their dealers may independently buy spots in their local markets.

The controversy began April 4, when Imus bantered on the air with producer and sidekick Bernard McGuirk about the Rutgers University women's basketball team, which had lost an NCAA Championship game the night before. McGuirk referred to the women as "hos" and Imus responded by calling the athletes "nappy-headed hos."

The following day, Imus issued a brief apology, but reaction continued throughout the weekend.

On Monday, a visibly shaken Imus offered a longer on-air mea culpa, describing himself as a "good person" who "said a bad thing." That failed to mollify many critics, who pointed to past similarly racist and misogynistic remarks from Imus and his staff.

CBS planned to punish Imus by suspending his program for two weeks starting Monday.

GM said it will continue to support Imus' charitable efforts, which include work with children with cancer or autism. GM spokeswoman Ryndee S. Carney said GM has donated vehicles for use at the Imus Ranch, a nearly 4,000-acre cattle station in New Mexico that offers children a "cowboy experience."

© Copyright 2007 The Detroit News. All rights reserved.

Monday, April 09, 2007

GMC Sierra 1500 is made with rural America in mind

March 3, 2007
2007 GMC Sierra 1500
General Motors
Weekend Drive
GMC Sierra 1500 is made with rural America in mind
By Warren Brown / The Washington Post

LURAY, Va. -- The thermometer showed 24 degrees Fahrenheit. It felt like zero. Cold winds swept down from Hawksbill Mountain, the tallest peak in Shenandoah Valley National Park. With the winds came snow flurries, which seemed to last longer than flurries should.

It was beautiful in the way that nature is beautiful when you accept its power, when you realize that the idea of conquering it is man's folly. We climbed back into the 2007 GMC Sierra 1500 extended-cab pickup. We proceeded cautiously. It mattered not that the Sierra is among the most robust of pickups available, a body-on-frame leviathan equipped with a big V-8 engine and four-wheel drive.

All along Interstate 81 and adjoining roads was plenty of evidence of what happens when drivers of four-wheel-drive and all-wheel-drive vehicles assume that man's technological savvy is capable of trumping ice. The ice wins, canceling traction and throwing vehicles off the road, or tragically tumbling them and their occupants onto their heads and into oblivion.

I have a theory about big pickup trucks and why there are so many of them in places such as Luray and the swamp and bayou towns of my home state, Louisiana. Trucks are practical. They carry and pull lots of stuff, much of it heavy and unglamorous. Terrain and weather in those regions often are challenging. Two-wheel-drive wimpmobiles don't measure up to conditions. And most of the people in those areas are workers, people who turn wrenches, plant fields, lift bales and use hammers and saws as part of their daily regimen. They need vehicles that work as hard as they do.

But, in a way, those rural truck drivers and owners are as much victims of automotive illusion as their paper-pushing, word-processing cousins in the city, where sports cars, luxury sedans, and super-bling sport-utility vehicles reign.

Cars and trucks are more than the sums of their parts. They have a meaning far beyond themselves. The city slicker in the high-end sedan is telling the world that he or she has arrived, if only at an elevated place in his or her own mind. The owner of a pickup truck in small-town America is declaring his or her just-folks status -- a sort of down-to-earth ruggedness, an awareness that getting close to nature also means getting dirty, dented and scratched, a belief that only trucks are worthy of that bruising communion.

That is why there are so many pickup trucks in rural and small-town America.

Luray and similar towns constitute the America that General Motors is wooing with its big-muscled Sierra 1500. It is the America that Ford is going after with its F-Series pickups, and that Nissan is trying to claim with its Titan pickups, and that Toyota is pursuing with its broad-shouldered, giant-braked Tundra CrewMax.

That America is not going away anytime soon. As long as it remains, the War of the Pickups will rage. With its GMC Sierra 1500 and several other models, GM is hoping to win with a combination of power and common sense, finesse and brutality.

The GMC Sierra 1500, for example, uses a GM technology called "active fuel management.' It is a computer-assisted system that shuts off four of the engine's eight cylinders at moderate speeds, or when the truck is carrying nothing except the driver and a passenger or two. At higher speeds and with heavier loads, when more power is needed, all eight cylinders go to work. The upshot is a full-size, four-wheel-drive truck that can complete a 400-mile round-trip journey, including several side-road diversions, with 120 miles worth of regular unleaded gasoline left in its 26-gallon tank.

In the past, GM seemed to care little about the wide seams between panels in its pickup trucks, or about mundane materials and interior layouts of those vehicles. The seams in the new GMC Sierra 1500 are tight. Interior materials are high quality. And although the passenger cabin still bespeaks "work truck,' it is much more attractive and comfortable than the cabins of any of its predecessors.

It is a likable truck, which is why, I suppose, there are so many of them running around rural Virginia. It fits well with the landscape of the Shenandoah Valley.

Luray, Va., and similar towns constitute the America that General Motors is wooing with its big-muscled Sierra 1500.

2007 GMC Sierra 1500

Complaints: This is a high-rider, which is no problem for people long of leg. But ingress and egress can be challenging for short-legged types. Also, the four-speed automatic transmission should be replaced by a more fuel-efficient five-speed or six-speed model.

Ride, acceleration and handling: It is a full-size pickup truck that rides and handles like a pickup truck. People desiring something gentle and sedan-like should shop elsewhere. Acceleration is good, meaning that the GMC Sierra 1500 has no problems entering freeways or changing lanes.

Head-turning quotient: It's a pickup truck. Sexy doesn't get it in this league. Power does. It looks powerful.

Body style/layout: The GMC Sierra 1500 extended cab is a front-engine, body-on-box-frame pickup with two full side doors and two smaller rear access doors. It is available in rear-wheel drive or four-wheel drive, either with a short, intermediate or long cargo bed.

Engine/transmission: The tested model had a 5.3-liter V-8 that develops 315 horsepower at 5,200 revolutions per minute and 338 foot-pounds of torque at 4,400 rpm. The engine employs a computerized cylinder deactivation system to save fuel when running at moderate speeds and pulling light loads. The engine is linked to a four-speed automatic transmission.

Capacities: There is seating for six. Maximum payload is 1,564 pounds. It can be equipped to tow up to 8,600 pounds. Fuel capacity is 26 gallons of recommended regular unleaded gasoline.

Mileage: With driver and one passenger, and carrying no cargo, or pulling no trailer, we averaged 21 miles per gallon traveling at posted speed limits.
Safety: Head air bags are optional. Side air bags, electronic stability control and traction control were not available at this writing.

Price: Base price on the 2007 GMC Sierra 1500 extended cab pickup truck with four-wheel-drive and short bed is $31,795. Dealer's invoice price on that model is $29,092. Price as tested is $34,300, including $1,605 in options (remote vehicle starter system, heated power-adjustable mirrors, heated windshield-wiper fluid system, high-performance suspension) and a $900 destination charge. Dealer's price as tested is $31,324. Prices sourced from General Motors and

Purse-strings note: Compare with Ford F-150, Dodge Ram 1500, Nissan Titan and Toyota Tundra.

© Copyright 2007 The Detroit News. All rights reserved.

Sunday, April 08, 2007

Chevrolet offers 40 styles of Silverado

April 7, 2007
2007 Chevrolet Silverado
Weekend Drive
Chevrolet offers 40 styles of Silverado
By Richard Williamson / Scripps Howard News Service

If you don't like multiple choice questions, don't shop for a truck.

After you've narrowed the field to a brand of full-size pickup, the selection of dimensions, capacity, price and power can seem nearly endless.

Chevrolet offers 40 styles of Silverado in a huge price range of $17,860 to $34,895. Major variables include cab size, box proportions and rear-wheel or 4-wheel-drive. A light hybrid version is even available in some states.

And that's just for the half-ton Silverado 1500. Heavier duty 2500 and 3500 three-quarter ton and one-ton versions have their own permutations.

Options are also multitudinous. A Silverado 1500 Crew Cab LT2 that I drove for a week came with six major option packages and sundry incidentals, lifting the price from a $31,840 base to $37,370 after the $900 destination charge and a $675 discount.

For cargo, check the box you most prefer: the short one at 5-foot-8 inches; the standard 6-foot-6 incher; and the long 8 footer.

Built on a new full-size truck platform that includes the sibling GMC Sierra, the 2007 Silverado features a fully boxed frame, coil-over-shock front suspension and rack-and-pinion steering. The track is about 3 inches wider in front and 1 inch wider in the rear.

Chevrolet claims a top towing capacity of 10,500 pounds and a maximum payload of 2,160 pounds, depending on how the truck is configured.

If you don't feel you've been offered enough choices, Chevy provides five suspension systems for different needs: Z83 for general use;

Z85 for better trailer towing; Z71 for off-road demands; Z60 for best street performance; and NHT for maximum towing capacity.

Oh, yeah, engines. There are seven of them, starting with the 4.3 liter, 195-horsepower V6 and rising to the 6-liter, 367-horsepower V8.

Between them are versions of 4.8-liter and 5.3-liter V8s, some of which run on alternative E85 fuel.

With pump prices wreaking havoc on the full-size truck market, GM is pitching improved fuel economy in the new Silverados. The 5.3-liter V8 in the review truck got 16 miles per gallon in the city and 22 on the highway for an estimated annual fuel cost of $2,210. That's not the kind of fuel economy that will win kudos from Friends of the Earth, but for a 5,061-pound truck, it's not bad.

In terms of performance, the 5.3-liter V8 provided strong responses, operating through a four-speed automatic transmission. On one freeway entrance ramp, the Silverado was able to scoot briskly into the merge lane ahead of a semi that didn't seem to be slowing down.

While the 315 horsepower is healthy, the 338 foot-pounds of torque is where the Silverado earns its credibility as a cargo hauler.

Since trucks no longer serve as work vehicles exclusively, they often must qualify as family transporters and luxury vehicles for a night on the town. Certainly, the new Silverado qualifies, especially with its load of options.

Three interior trim levels, WT, LT and LTZ offer varying levels of luxury.

The instrument panel in the LTZ trim level is 5 inches lower and farther forward than the previous model's. The WT and LT trim feature an instrument panel that is 3.5 inches lower and farther forward.

WT and LT trim features larger controls and door handles that are easier to use with gloves. A large-capacity, double glove box is built into the instrument panel. Cloth seats are standard on WT and LT models, but leather seating is available on LT trim, along with a six-way, power-adjustable driver seat.

A lockable in-seat storage bin is built into a new 40/20/40-split bench and is large enough to store a laptop computer. The bin also comes with a 12-volt power outlet.

LTZ models have a larger center console and other special trim. A heated, 12-way, power-adjustable leather driver seat is standard, along with a six-disc CD/MP3-capable audio system, Bose speaker system and heated windshield washer system.

Crew cab LTZ models add rain-sensing automatic windshield wipers, a rear-seat audio system and large glove box. LTZ interior color schemes include Ebony, Dark Titanium/Light Titanium and Ebony/Light Cashmere combinations.

GM improved the rear seats for crew cab and extended cab models with more supportive cushion material, firmer support and better seat back angles.

Extended cabs offer more legroom.

Crew cabs come with stadium-style rear seats with a 60/40-split design and folding center armrest. The seats can be folded up to add cargo space individually or together.

Designers improved access to the rear seats and cargo area with doors that swing out to 170-degree angles. A power sliding rear window is available on extend cab and crew cab configurations with LT and LTZ trim levels.

While the Silverado and GMC Sierra are essentially fraternal twins, the Sierra is considered slightly more luxurious. So, you might want to take a look at that model.

Or is that one choice too many?

Richard Williamson writes about automobiles for Scripps Howard News Service.

Details: Chevrolet Silverado

What's new: All new platform for 2007 model, wider stance, improved access, improved fuel economy
Pluses: Range of sizes, capacities, power, prices; comfort; capacity
Minuses: Fuel economy, maneuverability
Bottom line: Benchmark for 2007, but Toyota Tundra is close behind

© Copyright 2007 The Detroit News. All rights reserved.

Can Jerry York Save GM?

Friday, April 06, 2007
From the archives: Feb. 12, 2006
Can Jerry York Save GM?
Ace cost-cutter ratchets up pressure for major changes
Bill Vlasic / The Detroit News

DETROIT -- In the 1980s, it was a feisty Texan named Ross Perot who rattled the board of General Motors Corp. by calling his fellow directors "pet rocks" in the pocket of management.

A decade later, retired Procter & Gamble Co. Chairman John Smale led a board-room coup that toppled a GM chairman and set a new standard for corporate governance.

But no outsider ever joined the GM board with the expectations attached to Jerry York.

The appointment to the board last week of York, the ace cost-cutter employed by billionaire investor Kirk Kerkorian, is a pivotal event in one of the most tumultuous periods in GM history.

York is the wild card as GM prepares to undergo a restructuring that will slash tens of thousands of jobs, freeze pensions and benefits and possibly determine the survival of the world's largest automaker.

"One thing about Jerry -- you have got to pay attention to him," said David Cole, director of the Center for Automotive Research in Ann Arbor.

Already, York has influenced GM to slash its dividend in half and cut the salaries of its top executives and board members. But GM insiders know there's more to come from the 67-year-old former finance chief of Chrysler Corp. and IBM Corp.

Wagoner sees positives

The question was posed to Rick Wagoner by one of 200 GM executives attending a high-level internal briefing Thursday: What impact will York have on their company?

Wagoner, GM's embattled chairman, played it low-key, saying York will "add value" because he "knows the business."

But at least one GM exec said York's arrival has clearly ratcheted up the pressure inside GM headquarters. "Inside the company, things are very tense," said the executive, who spoke on condition of anonymity. "There is a contingent that says York is a good thing if he can accelerate change. (But) there is a healthy fear."

With speculation mounting on Wall Street and in the media that GM is headed toward bankruptcy, York comes aboard with a reputation as a hard-as-nails veteran of corporate turnarounds with no ties or loyalties to GM's past.

In a symbolic changing of the guard, he took a board seat vacated by Merrill Lynch Chairman Stanley O'Neal, who worked on a GM assembly line as a teenager, launched his career in GM's treasurer's office and is married to a former GM financial analyst.

"It's as big a shock that O'Neal is out as it is that York is in," said Gerald Meyers, a management consultant and former chairman of American Motors Corp. "Jerry is a change agent in a situation where change is necessary and appropriate."

O'Neal reportedly left because of possible conflicts of interest and a lack of time.

York has defused his own potential conflict by agreeing not to disclose confidential GM information to Kerkorian, GM's fourth-largest shareholder with a 9.9 percent stake in the company.

A call for sacrifice

Moreover, York has wasted no time in making his presence felt on GM's management and its board.

His speech to auto analysts in Detroit on Jan. 10 appealed directly to the United Auto Workers, who are deep in negotiations with GM about health care, downsizing and the fate of workers at bankrupt Delphi Corp.

York predicted little progress could be made with the UAW unless GM showed a spirit of shared sacrifice, namely a dividend cut for investors and lower salaries for Wagoner and his top deputies.

"Historically, GM has been the most tone-deaf of the auto companies when it comes to labor issues," said Harley Shaiken, a labor professor at the University of California-Berkeley. "But York is speaking plainly and directly about critical issues between GM and the UAW."

Pushing GM to cut the dividend and executive pay was important in the context of pivotal contract talks between GM and the UAW in 2007, Shaiken said.

"Doing that doesn't necessarily make the 2007 negotiations easier," he said. "But not doing it would have made them far more difficult."

Plain-spoken, direct, to the point -- that's York. A former West Point cadet, he's a throwback to "bean counters" of the past -- blue blazers and white shirts, wire-rimmed glasses and a tattered briefcase, an unrepentant smoker who drives an aged Jeep bought with his Chrysler employee discount.

His intensity was legendary at Chrysler, where as a young analyst York once passed out in a meeting after working around the clock, fueled by cigarettes and coffee. At IBM, he rigged a snowplow to his Ram pickup during a blizzard to make sure he was at his desk before 8 a.m.

"I've known Jerry a long time, and he isn't a guy who sits back, or tries to 'get along' with everybody," said Meyers. "He's a pleasant enough fellow, but if he's unhappy about something he's going to blurt it out."

Wherever he has been, whether it be Chrysler, IBM or Apple Computer Inc. -- where he has been a director since 1997 -- York has helped deliver shareholder value.

The prescription he laid out for GM's turnaround on Jan. 10 was characteristically blunt.

"Time is of the essence," York said. "A 'sense of purpose' needs to be generated to galvanize the organization."

York has declined interview requests since joining the GM board last week. According to people familiar with his plans, York will spend the next four to six weeks combing through GM's operations for ways to cut costs and improve the business.

York plans deep dive

York will serve on the GM board's Public Policy Committee and Investment Funds Committee and should have wide access to internal company information.

In private comments to one acquaintance, York said he plans to "root around and find out what's not being exposed" in GM's vast North American business units.

People who know York expect him to move fast.

"We're in a time where the clock is moving much more quickly on GM," Cole said. "I think they're fortunate to have Jerry because this thing is going to be played out in the next six months, not the next five years."

York joins a GM board led by former Eastman Kodak Co. Chairman George Fisher as the "lead director" and composed of corporate executives with minimal experience in the automotive industry.

Historically insular and nonconfrontational, the GM board was shaken up in 1984 when Perot became a director after selling his company, Electronic Data Systems, to GM for $2.5 billion in stock.

A classically opinionated entrepreneur, Perot clashed early and often with GM Chairman Roger Smith. His biting assessments of GM's culture were considered heresy at the time. "If you see a snake, kill it," Perot once quipped. "Don't appoint a committee on snakes."

But after two years of verbal warfare, Smith had had enough. He bought out Perot's GM stock, and the diminutive Texan left the board.

In 1992, Smale became the next outsider to put his stamp on the board. Smale was the polar opposite of Perot -- a dyed-in-the-wool corporate executive from tradition-bound Procter & Gamble. But when GM teetered near bankruptcy, Smale marshaled other directors to oust Chairman Robert Stempel and install a new management team.

York brings a bit of both men's qualities to the GM of 2006. He combines the candor and independence of a Perot, with the Fortune 500 credentials and experience of Smale. Unlike them, York spent 30 years in the auto industry, having worked for Chrysler, GM and Ford Motor Co. at various times in his career.

"He's different than Perot and Smale because he does know the business and he's been close to it for a long, long time," Cole said. "Jerry is a disciplined guy. His intent is not to blow the place up."

Nose under the tent

But patience is hardly a quality associated with York.

He first advised Kirk Kerkorian in the mid-1990s when the casino mogul was the largest shareholder in Chrysler. In 1996, York used the threat of a proxy fight to get Chrysler management to approve a stock repurchase plan favored by Kerkorian.

When Kerkorian asked him last March to look into GM, York dug deep and produced a detailed report on the automaker's strengths and weaknesses. Last fall, with GM reeling from huge third-quarter losses, York began pressing for a board seat.

Talks broke down late last year, but York didn't back off. He went public in mid-January with his speech at the Detroit auto show, and waited for GM to respond.

It didn't take long. At their next meeting on Feb. 6, GM's directors voted to appoint York to the board. Now, the question on the minds of everyone at GM is what York does next -- and when he does it.

"York is on the inside now," said Ralph Ward, publisher of the newsletter Boardroom Insider. "Now that the camel has his nose under the tent, it's a whole new ballgame."

You can reach Bill Vlasic at (313) 222-2152 or

© Copyright 2007 The Detroit News. All rights reserved.