Tuesday, January 30, 2007

GM delays earnings, expects 4Q profit

Friday, January 26, 2007
GM delays earnings, expects 4Q profit
Automaker will restate results back to 2002 due to tax accounting adjustments.
Sharon Terlep and Christine Tierney / The Detroit News

General Motors Corp. will delay its fourth-quarter and 2006 earnings reports while the automaker restates earnings dating back to 2002, the company announced Thursday.

The world's largest automaker also said it expects to post "significant" improvements in net results from last year, including a profitable fourth quarter with record revenue.

GM, which has restated results in seven of its last eight quarters, said the changes are due primarily to tax accounting adjustments and "could be material."

GM's earnings announcement was originally scheduled for Tuesday; now the automaker plans to give an update the week of Feb. 5 and expects to file an annual report with the Securities and Exchange Commission by the March 1 due date.

While GM's indication of improved results for the fourth quarter is likely to reassure investors that the automaker is on a recovery track, its continuing accounting problems are bound to provoke concern.

Some of the past restatements appear to be technical in nature, though the automaker is the subject of a half-dozen investigations by the SEC.

"We continue to be vigilant in looking at our accounting," said Fritz Henderson, GM's chief financial officer. "On the other hand, the fact that we have discovered errors tells us we have a lot more to go."

Last year, GM reported a $10.6 billion loss for 2005 -- after restating the result it issued previously.

That shortfall was dwarfed Thursday by Ford Motor Co.'s announcement that it lost $12.7 billion in 2006 -- the biggest annual loss in its history.

Of Detroit's automakers, struggling against intense competition from Asian rivals in their home market, GM is furthest along in its recovery program, and investors are watching its progress closely.

Analysts have been expecting strong results from GM for 2006, a year in which the automaker pared its work force, cut production costs and scaled back less profitable businesses, such as sales to rental car companies.

Another factor in the earnings holdup is GMAC. GM's former finance arm was not able to supply information on time that GM needed for its fourth-quarter report. GM sold 51 percent of GMAC on Nov. 30 as part of an effort to raise cash.

GM's accounting woes have been embarrassing to a company that has long prided itself on its impeccable recordkeeping. The company appointed a former AT&T controller and chief accounting officer, Nick Cyprus, as its top accountant on Dec. 1, in an effort to improve its bookkeeping in the face of a number of federal investigations.

The delay is more a "nuisance" than anything else, said David Healy, an analyst with Burnham Investment Research.

"I don't think it's going to have any affect on cash," he said. "I was looking for pretty good earnings for the fourth quarter."

GM expects to be profitable in the 2006 fourth quarter, excluding some special costs, and expects to improve net income significantly over the fourth quarter of 2005, Henderson said. GM has improved its liquidity position, ending the year with around $26.4 billion in cash and equivalents, an increase of about $5.9 billion over year-earlier levels.

GM may sell division

GM has raised billions of dollars in the last two years selling assets. The automaker got $14 billion when it sold GMAC to Cerberus Capital Management LP. It raised $3 billion by selling stakes in Fuji Heavy Industries Ltd., Isuzu Motors Ltd. and Suzuki Motor Corp.

The company confirmed Thursday that it may sell its Allison Transmission division, which makes transmissions for large commercial and military vehicles. The unit employs about 3,400 workers and has seven plants in the Indianapolis area.

Also on Thursday, GM Marketing Chief Mark LaNeve said January sales will likely be down from last year, but only because the automaker dramatically reduced the number of vehicles it sold for use in rental fleets. Retail sales are on pace to meet January 2006 sales, the automaker said.

GM saw its U.S. sales fall 9 percent in 2006. Overall, GM's U.S. market share slipped to a historic low of 24 percent.

GM sold about 650,000 vehicles to rental fleets in 2006, about 75,000 fewer than in 2005. The company plans to cut that number by 100,000 to 120,000 in 2007, LaNeve said.

LaNeve reiterated GM's goal of selling cars at a higher price even at the risk of losing market share.

"We're committed to the strategy," he said. "We believe it's working for us."

You can reach Sharon Terlep at (313)223-4686 or sterlep@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

GM may sell Indianapolis-based Allison Transmission

Thursday, January 25, 2007
GM may sell Indianapolis-based Allison Transmission
Associated Press

DETROIT -- General Motors Corp. said Thursday that it may sell its Allison Transmission division as part of its effort to raise money and focus on its core business.

GM said in a news release that "it is looking at strategic options" for the Indianapolis-based transmission unit "including a potential sale of the business."

The world's leading automaker lost $3.05 billion in the first three quarters of 2006.

Allison Transmission has 3,400 employees and seven plants in Indianapolis. It makes and sells automatic transmissions for commercial and military vehicles.

"This process is another potential step in GM's plan to improve liquidity through the assessment of strategic options for a business that is not central to GM's mission of designing, manufacturing and selling cars and light trucks globally," the company said.

© Copyright 2007 The Detroit News. All rights reserved.

UAW may run health care for retirees

Wednesday, January 24, 2007
UAW may run health care for retirees
Bryce G. Hoffman / The Detroit News

Detroit automakers and the United Auto Workers are looking at a plan that would transfer responsibility for retiree health care from the companies to the union.

While the idea is considered a long shot by many industry observers, it demonstrates just how open both sides are to considering unconventional approaches to such critical issues as they ramp up for what will be one of the most critical contract negotiations in Detroit's history.

The plan is based on a recent deal that settled a strike between Goodyear Tire & Rubber Co. and the United Steelworkers. It works like this: The automakers would fund the creation of a union-run trust that would be responsible for covering health care costs for retired hourly employees.

The companies would have to put up billions of dollars in cash and stocks, but they would then be free of this burdensome liability. It would be up to the UAW to make sure the fund remained solvent, but its members would have the security of knowing these key retirement benefits could not be taken away by a bankruptcy court judge.

Detroit's automakers say health care costs add about $1,500 to the price of each car and truck they produce, putting them at a huge disadvantage against rivals from countries like Japan where the government shoulders most of the responsibility for retiree health care.

The Wall Street Journal first reported the plan Tuesday.

GM, Ford study idea

GM told The Detroit News on Tuesday it is studying the Goodyear deal and looking into whether a similar setup could work for the automaker. Officials say the discussions are preliminary and that any Goodyear-like arrangement likely would play out differently at the automaker, in large part because GM's $50 billion health care liability is so much larger than the tire company's $1.2 billion tab.

"It would be fair to say that we have more than a passing interest in the Goodyear agreement," GM's Chief Financial Officer Fritz Henderson said earlier this month. Chairman and Chief Executive Officer Rick Wagoner also confirmed the automaker is looking at the deal.

GM has been discussing a similar plan with the UAW since 2005, according to the Wall Street Journal report.

Ford confirmed Tuesday it is familiar with the Goodyear agreement and is studying it, but would not comment further.

Only DaimlerChrysler AG's Chrysler Group ruled it out entirely.

"I would not characterize it as something we're looking at," Chrysler spokesman Dave Elshoff said about the Goodyear deal.

The UAW did not respond to requests for comment, but union dissidents said such a proposal likely would face resistance from some rank-and-file members.

"A lot of members would see it as another concession," said Todd Jordan, a founding member of Soldiers of Solidarity, a militant faction within the UAW. "No autoworker that I have talked to feels like they should have to sacrifice more or put more of their benefits at risk. This is a temporary fix for a continuing problem. It won't help the union. It won't help the automakers. Ultimately we have to push for national health care."

Analysts doubt plan will fly

Wall Street analysts were also skeptical.

Brian Johnson of Lehman Brothers said such a deal might be a way of dealing with health insurance for future retirees, but added that retirees are already protected by the contracts they retired under. Moreover, he said the new Democratic Congress and the prospect of a Democratic White House in 2009 put health care reform back on the national agenda. He said both the automakers and the union might be reluctant to commit to such a plan with such a prospect on the horizon.

But even if they did, it would be difficult for Ford or GM to fund a Goodyear-style program.

JPMorgan analyst Himanshu Patel estimates it would cost GM $33 billion and Ford $13 billion to set up the fund -- assuming they could convince the UAW to accept an investment equal to just 60 cents on the dollar.

It's an encouraging sign

Bradley Rubin of BNP Paribas doubts the union would go for that. Even if it did, he said the two automakers can ill afford that kind of cash as they struggle to pay for massive North American restructuring plans.

Ford has already mortgaged all of its U.S. assets to pay for restructuring.

"It would be great to get this off their books," Rubin said. "But it's still a lot of money."

Labor expert Harley Shaiken of the University of California-Berkeley agreed that "the devil really is in the details," but said the fact that Ford, GM and the UAW are even considering such an option is encouraging.

"The union is exploring a lot of options -- some unconventional -- aimed at cutting costs and preserving benefits," he said. "This is kind of like the prototypes that are shown at the auto show. Some of those prototypes are built; others are not. They're trying to gauge reactions. What it does show is that both sides are exploring some fundamentally different alternatives."

Detroit News Staff Writers Louis Aguilar, Sharon Terlep and Josee Valcourt contributed to this report. You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

Sunday, January 28, 2007

UAW builds up $874 million strike fund

Saturday, January 20, 2007
UAW builds up $874 million strike fund
With Big 3 contracts expiring in September, union's war chest has near-record balance.
Bryce G.Hoffman / The Detroit News

The United Auto Workers has amassed a war chest worth nearly $900 million and is keeping a grip on spending as the union and Detroit automakers brace for what promises to be some of the toughest contract talks ever.

The UAW's strike fund had a near-record balance of $874 million at the end of November. Union leaders disclosed the figure Friday during an online question-and-answer session with members.

"We are proud of the fiscal health of the fund and believe employers appreciate the significance of our strike fund reserves," UAW President Ron Gettelfinger and Secretary-Treasurer Elizabeth Bunn said in a joint posting during the chat.

They also said the UAW will not spend any of the $60 million it set aside for organizing during last year's constitutional convention until new contracts have been signed with the automakers.

The UAW master contract with General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group expires Sept. 14.

"In regards to the $60 million (we) are in the process of putting together plans, which will be submitted to the (international executive board) once we have successfully concluded 2007 national auto negotiations," Bunn said.

That suggests the UAW wants to keep that money in the bank in case of a possible strike.

"The size of the strike fund is an important symbol that the union is dealing from a position of strength," said Harley Shaiken, a labor expert at the University of California, Berkeley. The UAW also indicated that it may be trying to organize workers at DaimlerChrysler's financial services unit. Gettelfinger and Bunn did not directly answer a question about when a drive would begin, saying, "We typically do not talk about specifics in the early stages of a campaign." They asked workers interested in organizing to contact the union.

© Copyright 2007 The Detroit News. All rights reserved.

Wagoner calls for U.S. to focus on alternative fuel

Wednesday, January 17, 2007
Wagoner calls for U.S. to focus on alternative fuel
Sharon Terlep and Bryce G. Hoffman / The Detroit News

DEARBORN -- General Motors Corp. Chairman and CEO Rick Wagoner said Washington should not slack off on efforts to develop alternative energy sources now that oil prices have fallen.

Wagoner pressed the issue during a speech Tuesday night at the Automotive News World Congress in Dearborn, where fuel economy and energy policy were hot topics.

"With the price of oil at its lowest level in 19 months, we run the risk of reverting back to our traditional energy policy," Wagoner said. "That is, relying heavily on the lowest-cost energy available on world markets, including imported oil, without providing adequate support for developing alternative sources.

"I hope oil prices stay low, but I also hope that our nation stays committed to energy security through energy diversity."

Wagoner's comments came after the University of Michigan had earlier in the day released a study showing auto executives and other experts believe gasoline prices and government fuel economy standards will increase dramatically in the next decade.

Also Tuesday at the annual industry event, an outspoken auto supplier executive called for imposing a steep tax on gasoline to help fund the transition to alternative energy sources, especially hydrogen.

Focusing on fuel

Wagoner has made alternative fuel a focal point for GM in recent months. At the North American International Auto Show, GM is showing off a concept plug-in hybrid called the Chevrolet Volt that can travel 40 miles on battery power.

The CEOs of Detroit's Big Three automakers have been pushing the Bush administration to help with efforts to develop alternative fuels such as ethanol-based E85 and biodiesel. The automakers also want federal help in developing batteries sufficient to power vehicles.

Wagoner, along with Ford Motor Co. CEO Alan Mulally and Tom LaSorda, CEO of DaimlerChrysler AG's Chrysler Group, met with Bush in November and pushed him on alternative energy, although they came away with no promises.

Last June, the three CEOs said they would double their production of alternative fuel vehicles by 2010.

The Bush administration, meanwhile, has sought authority to raise fuel economy requirements for passenger cars. The Big Three have strongly opposed efforts by some in Congress to mandate a fuel economy requirement.

"One of the things that government has to do to really promote energy diversity is proactively support the development of alternative fuel technology," Wagoner said. "And incentivize consumers through tax credits, fuel subsidies and so on to adopt these exciting new technologies."

While oil prices have been moderating, and gas prices along with them, a new survey released Tuesday by the University of Michigan Transportation Research Institute predicted that fuel prices and fuel economy standards will rise substantially in coming years.

Gas prices will average slightly more than $4 a gallon by 2015 and just over $5 a gallon by 2020, according to the survey of automakers, suppliers and other experts.

The study also found that Corporate Average Fuel Economy standards for cars are expected to increase to 33 mpg in 2015 and 38 mpg in 2020, a 38 percent jump from today's 27.5 mpg standard. For trucks, CAFE standards are expected to rise to 27 mpg in 2015 and 31 mpg in 2020, a 44 percent increase from 21.6 mpg today.

"Our research reveals surprising agreement among all stakeholders in the automobile industry that fuel prices are on a steep upward trajectory," said U-M researcher Bruce Belzowski.

Supplier speaks out

Touching on many of the same topics Tuesday was Tim Leuliette, chairman and CEO of Plymouth-based auto parts supplier Metaldyne Corp. He has been outspoken on the issue of shifting the nation away from its dependence on oil. In a speech at the world congress, he called for a dramatic increase in the federal gasoline tax, saying the move was needed to fund the nation's transition to a hydrogen economy.

He pointed out that drivers in the United States pay 30 percent to 40 percent of what motorists in other industrialized countries pay at the pump. He advocated raising U.S. gas prices to match those in other developed nations, where consumers pay $5 or more a gallon.

"Gasoline is too cheap in America," Leuliette said.

"When fuel prices are low, there is little interest on Wall Street, Main Street or 1600 Pennsylvania Avenue."

A dramatic hike in gas prices would not only put this issue at the forefront of the national agenda, but provide the cash needed to fund the development of hydrogen fuel cell technology and a hydrogen infrastructure.

He said the federal government has only committed $1.2 billion to fund hydrogen fuel research and development for the next five years -- a figure he said was $800,000 less than it spends in one week on the war in Iraq. His proposed tax on gasoline would rise and fall with oil prices to guarantee stability at the pump and allow automakers to better meet consumer needs.

Other auto industry executives reacted coolly to Leuliette's proposal, but agreed that more needs to be done to develop hydrogen and other alternative powertrain technologies.

"If we're ever going to get there, we better start. That much I agree with," said Don Altermatt, senior manager of diesel engineering for DaimlerChrysler AG.

However, Altermatt said clean diesel is a far more promising near-term option.

National policy needed

"Is there a need for a national energy policy? Absolutely," said Nancy Gioia, director of sustainable mobility technologies and hybrid vehicle programs at Ford. "We have not got the kind of collaboration yet that we need."

While Ford favors a broad approach to new propulsion technologies, Gioia told The Detroit News that hydrogen is one of the most promising long-term solutions -- one that she said will require a national commitment comparable to the one required to put a man on the moon.

At the same time, Gioia pointed out that hydrogen is not a panacea. She said it takes a great deal of energy to extract hydrogen -- energy that might be better utilized by other technologies like plug-in hybrids.

Leuliette has called for a gas tax to fund hydrogen research and development in the past, though never one of this magnitude.

But the veteran auto industry executive said America's dependence on petroleum is a threat to national security, the environment and the economy, and one the nation is running out of time to address.

Leuliette also acknowledged that his proposal would be a hard sell in Washington, but he said it will be a lot harder to develop a national energy policy in the midst of an energy crisis.

"If Nigeria falls, if there is an Iranian crisis, if Venezuela goes off the deep end and we stand in line again for fuel, then it will happen in (a) nanosecond," he told The News. "The longer we wait, the harder the transformation will be -- and the more it will cost."

Moreover, he said the switch from gasoline to hydrogen would also jumpstart the domestic auto industry and revive Detroit.

You can reach Sharon Terlep at (313) 223-4686 or sterlep@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

GM sales dip slightly in 2006; Toyota on pace to outsell U.S. automakers in 2007

Wednesday, January 17, 2007
GM sales dip slightly in 2006; Toyota on pace to outsell U.S. automakers in 2007
Associated Press

DETROIT -- General Motors Corp. said Wednesday that it sold 9.09 million cars and trucks worldwide in 2006, down 0.9 percent from 9.17 million one year earlier.

Toyota Motor Corp. has said that it expects final totals to show it sold 9.04 million vehicles in 2006. The Japanese automaker is forecasting 2007 production of 9.42 million vehicles in 2007, which would put it on track to outsell GM worldwide this year.

"Being the largest car company in the world can't be a focus, it has to be a byproduct of giving people in each market the vehicles they really want. GM enjoys that position today," John Middlebrook, GM's vice president for global sales, said in a news release.

GM said a preliminary count of its non-U.S. sales last year totaled 4.97 million vehicles, or 55 percent of the worldwide total. That is up about 7 percent from 2005. G.M. earlier reported U.S. sales of 4.12 million in 2006, down about 9 percent from the previous year.

"GM had some notable sales successes as we continued to expand in key growth markets around the world in 2006," particularly in the Asia-Pacific region and the region that includes Latin America, Africa and the Middle East, Middlebrook said.

© Copyright 2007 The Detroit News. All rights reserved.

GM renames gas-touting site

Thursday, January 18, 2007
The name -- whygas.com -- could appear to be at odds with GM's stated goal of developing alternatives to gasoline.
GM renames gas-touting site
Automaker targets medium-duty customers to go for gasoline engines, not diesel.
David Shepardson / Detroit News Washington Bureau

WASHINGTON -- General Motors Corp. on Wednesday said it will rename a company Web site that touts medium-duty gasoline engines as a good alternative to diesel engines.

The name -- whygas.com -- could appear to be at odds with GM's stated goal of developing alternatives to gasoline.

After The Detroit News inquired about the site earlier this week, GM said the domain name of the site will be changed to whygasengines.com by Friday to better "match the site's purpose," said Greg Martin, GM's Washington-based spokesman, acknowledging "the irony of the name."

GM hasn't backed away from its "well-established commitment to energy diversity" and said there's nothing misleading about the site, Martin said.

GM launched the Web site last week in an effort to pump up sales of its medium-duty gasoline engines, which cost anywhere from $6,000 to $15,000 less than diesel equivalents.

"Our Gas Engine. Powerfully cost-effective," the Web site says, promoting "the advantages of gas Why gas? Learn more."

The site touts gasoline engines that are used in dump trucks, ambulances and some large trucks -- including some U-Haul moving vans. It offers potential customers a free $10 coffee mug if they seek information about gas engines.

Of 60,000 medium-duty engines sold by GM last year, 9,000 were gasoline-powered Vortec 8.1-liter V-8s -- with many of those going to U-Haul, GM spokesman Rob Minton said.

New clean diesel regulations that took effect in the fall make diesel engines more expensive, though they reduce particulate emissions and get as much as 25 percent better gas mileage than gas engines. GM sells a popular Duramax 6.6-liter V-8 diesel in the medium-duty truck segment, among other diesel engines.

The decision to change the name of the Web site comes as the company is battling the perception that it's behind Toyota Motor Corp. and other automakers in developing environmentally friendly vehicles.

GM CEO and Chairman Rick Wagoner said Tuesday the company will "dramatically intensify our efforts to displace petroleum-based fuels by building a lot more vehicles that run on alternatives, such as E85 ethanol," he said.

But with the whygas.com site -- registered by GM on Nov. 20 -- the automaker is trying to capitalize on the difference to sell more gasoline engines over diesel for some commercial trucks.

It argues gas engines are a "good solution for lower-mileage applications" and provides a calculator that suggests how much customers could save buying a gas engine over a diesel.

Some environmentalists noted that GM has embraced E85-fueled vehicles that run on a mixture of 85 percent ethanol and 15 percent gasoline even though E85 is less available than diesel and costs more per mile than gasoline.

"It seems strange that they are pushing gasoline as more available when on the other hand they are touting the advantages of E85 for light duty vehicles, which is significantly less available than diesel," said David Friedman, research director of the clean vehicle program for the Union of Concerned Scientists on Wednesday.

GM defended the site.

"To suggest that there is any message beyond the site's intent as a marketing tool for a very, very specific segment of the market is ridiculous and silly," Martin said. GM will send out 90,000 direct mailings this week to convince medium-duty customers to consider gasoline engines. GM Fleet & Commercial will promote whygasengines.com through print ads, online banner ads, a CD-ROM and search engine marketing, Minton said.

GM has touted alternatives to gasoline through company Web sites like livegreengoyellow.com and said the U.S. needs to move away from dependence on traditional gasoline.

GM also introduced a concept plug-in hybrid, the Chevy Volt, at the North American International Auto Show last week.

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

© Copyright 2007 The Detroit News. All rights reserved.

Sunday, January 21, 2007

GM's Super Bowl ads: Think YouTube, not Madison Ave.

Friday, January 19, 2007
GM's Super Bowl ads: Think YouTube, not Madison Ave.
Sharon Terlep / The Detroit News

What automakers are doing

GM: Chevy will be in the spotlight with a commercial conceived and developed by college students who won a Chevy-sponsored contest.
Ford: F-Series Super Duty pickups will be featured.
Honda: A dancing CR-V SUV will star in one commercial. A second will highlight Honda as the most fuel-efficient car company in America.
Toyota: The redesigned Tundra pickup will be the focus.
Source: Detroit News research

Madison Avenue has dreamed up some classic Super Bowl spots, from the 1984-esque Apple commercial to talking Budweiser frogs. But this year's talker could just as well come from a housewife or a dorm-dwelling college student.

Some big-name companies, including General Motors Corp., are letting regular folks create ads to air during the TV event that has become as much about winning over consumers as winning a game.

It's the latest approach companies are taking to stand out in a world where consumers are getting more control over what they watch and how, from commercial-zapping TiVo to do-it-yourself video on YouTube.

And with a 30-second Super Bowl spot reportedly going for more than $2.6 million, the stakes are high. Especially for Detroit's automakers -- Ford Motor Co. will run ads along with GM -- which are strapped for cash and in a fight to win over American car buyers. More than 90 million people worldwide are expected to tune in Feb. 4.

"It gave us an opportunity to engage," Chevrolet General Manager Ed Peper said of a Chevy Super Bowl ad conceived by a team of college students as part of a contest launched last year.

Peper said the contest drummed up national and local media attention and allowed GM to "get some fresh insight into a younger generation."

"We got to see how they look at some or our products," he said.

800 students compete

To create the Chevy commercial, GM last year launched the Chevrolet Super Bowl College Ad Challenge and enlisted California-based EdVenture Partners to spread the word around the nation's college campuses.

More than 400 teams involving 800 students submitted ad concepts.

The five finalist teams traveled to Detroit to pitch the idea to GM executives. The winning team was allowed to see the concept through to the final product.

Shlomo Goltz, a 22-year-old graphic design major at Washington State University, was among the finalists. A friend pitched the idea of competing and Goltz thought it sounded fun. As one of the coveted young-and-upwardly-mobile set, Goltz knows his opinion matters to companies like GM.

"We don't like being tricked or told to buy something," he said. "Consumers already know what they want. So they can make advertising effectively."

In addition to the college ad challenge, GM plans to run another Chevy spot, one Cadillac spot and an ad touting the company's 10-year, 100,000-mile warranty.

Firms are getting inventive

GM isn't alone in looking outside for marketing inspiration. More companies are riding the craze that took off with YouTube, the popular Internet video site where anyone can post a clip, be it pirated or self-made.

The trend is prevalent enough to have a name: consumer-generated media.

PepsiCo Inc.'s Doritos and the National Football League have each run contests inviting average people to submit ideas -- or in the case of Doritos, the actual ads -- for the game.

It's not a free-for-all. Each advertiser imposed guidelines to ensure the ads weren't vulgar or obscene and were in keeping with the image it wants to convey.

Chevrolet, for instance, told contestants that proposed ads must end with the tagline, "Chevy, An American Revolution." The tone had to be "approachable, not arrogant or offensive."

"You have to get them invested in the product," said Peter van Stolk, president and CEO of the upstart Jones Soda Co., who was in Dearborn this week speaking to the auto industry about marketing. Jones hooks consumers by emblazoning photos that people send into the company onto its soda bottles. "It's the only way to stand out."

Ads still made old-school way

That's not to say traditional advertising is fading.

The vast majority of Super Bowl ads will be created by ad agencies. Even with the proliferation of digital media, the Internet and TiVo, which allows viewers to record shows and skip past commercials, the Super Bowl remains prime marketing ground.

Ford will likely spend more than $7 million for 90 seconds of airtime, all during the pre-kickoff portion of the broadcast.

The Dearborn automaker will use the time to tout its F-Series Super Duty pickups. The game is attractive because, unlike most of TV these days, viewers actually like to watch the commercials, Ford spokesman Jim Cain said.

The automaker saw a major increase in Internet traffic after last year's ads featuring Kermit the Frog and the hybrid Ford Escape, which is how the company knows viewers are paying attention, Cain said. "People remembered that ad and they had a positive reaction." Still, Super Bowl advertising is a big-money gamble. TSN Media Intelligence estimates firms have spent $1.72 billion in ads during the games over the past 20 years. GM has spent the third most -- $66 million -- of any company since 1987.

Honda, Toyota to run ads

Unlike Ford and GM, DaimlerChrysler AG's Chrysler Group won't make a showing on Super Bowl Sunday.

The company doesn't feel like it's worth the money, spokesman James Kenyon said.

Honda Motor Co., however, has decided it is.

The Japanese automaker will make its third Super Bowl showing with spots that will cost more than $5 million. Honda will air a 30-second ad for the CR-V SUV and a 30-second spot boasting that the company produces the most fuel efficient cars sold in the United States. Both have aired previously.

Toyota Motor Co. is expected to run an ad featuring its redesigned full-size Tundra pickup.

You can reach Sharon Terlep at (313) 223-4686 or sterlep@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

Big 3 want feds to aid battery research

Wednesday, January 10, 2007
Big 3 want feds to aid battery research
John Lippert / Bloomberg News

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG have asked the U.S. government for $500 million over five years to subsidize research into advanced batteries for cars and trucks.

The automakers made the request last month after meeting with President Bush in the White House in November, said Stephen Zimmer, an advanced engineering director at DaimlerChrysler's Chrysler Group.

U.S.-based auto companies are in a race with rivals including Japan's Toyota Motor Corp. to develop a lithium-ion battery for use in hybrids and other vehicles.

They need a product that won't overheat and is economical, durable and rechargeable from a variety of sources, including home outlets.

"The progress being made is tremendous, but the batteries are not prime-time ready now," Zimmer said.

© Copyright 2007 The Detroit News. All rights reserved.

GM may bid for stake in Malaysian firm

Thursday, January 11, 2007
GM may bid for stake in Malaysian firm
Associated Press

KUALA LUMPUR, Malaysia -- General Motors Corp. may bid for a stake in Proton, Malaysia's biggest automaker, which is seeking a strategic partner to help reverse its dwindling fortunes, a report said Wednesday.

Since late November, GM officials have met several times with Proton management and shareholders and may make an offer as early as this month, the Business Times quoted an unnamed industry executive as saying.

GM, the world's largest automaker, has proposed to take up a small stake at Proton's holding company as well as acquire a stake in Proton's manufacturing arm, the executive told the daily. GM's proposal includes helping Proton build a car for the U.S. market in five years, he said.

Malaysia is the biggest passenger car market in Southeast Asia. Gaining a stake in Proton will help GM, which has operations in Thailand, South Korea, India and China, consolidate its position as a key player in Asia's booming automotive market, the report added.

GM spokeswoman Renee Rashid-Meren told The Associated Press on Wednesday that the automaker "declined to comment on rumor and speculation."

The Malaysian government investment arm, Khazanah Nasional, which holds 43 percent of Proton, told the newspaper it was "unable to confirm or deny any specifics relating to this matter at this point in time."

Proton, which is losing money and market share amid mounting competition from local and foreign automakers, is expected to name a strategic partner for its manufacturing operations by March to help halt sagging sales and develop new models.

So far, the government has said it was talking only to Germany's Volkswagen AG and French automaker PSA Peugeot Citroen. Local companies Naza Group, Mofaz and DRB-Hicom are also lobbying to buy into Proton.

Analysts have said a foreign alliance, which can provide Proton with technology and access to the international market, was crucial to Proton's survival and restructuring plans.

Proton's losses are expected to widen after the company reported a 250.3 million ringgit ($71.5 million) loss in the three months ended September 2006 because of lower sales and rising costs.

© Copyright 2007 The Detroit News. All rights reserved.

Friday, January 19, 2007

GM studies health plan at Goodyear

Friday, January 19, 2007
GM studies health plan at Goodyear
Changing to tiremaker's model regarding retirees could help the automaker ease its $81B costs.
John Lippert and Jeff Green / Bloomberg News

DETROIT -- General Motors Corp. may copy an accord between Goodyear Tire & Rubber Co. and its largest union in an attempt to shed billions of dollars in retiree health-care obligations.

As part of last month's deal to end a three-month strike, Goodyear transferred its health-care liability for current and future union retirees to an independent trust fund. GM Chief Executive Officer Rick Wagoner says the Detroit automaker is studying Goodyear's contract with the United Steelworkers of America.

"It would be fair to say that we have more than a passing interest in the Goodyear agreement," GM Chief Financial Officer Fritz Henderson told analysts last week. He said the company isn't yet discussing the issue with the United Auto Workers union.

GM had about $81 billion in salaried and hourly retiree health-care obligations in the U.S. at the end of 2005, the last official GM estimate.

Switching to such a plan would help ease the employee health-care costs that Wagoner this week called one of the biggest drains on GM's profits. Over the past seven quarters, GM has posted more than $13 billion in losses. GM had estimated it would spend about $5.1 billion last year on health care for 1.1 million employees, retirees and their dependents.

The UAW's contract with GM expires Sept. 14.

© Copyright 2007 The Detroit News. All rights reserved.

UAW: Expect sacrifice

Tuesday, January 16, 2007
UAW: Expect sacrifice
This year, it's not business as usual as union tells members that concessions may be needed to help Big 3 survive.
Sharon Terlep / The Detroit News

DETROIT -- The message coming down from the United Auto Workers' top ranks as they prepare for this year's contract talks is not the hard-line rhetoric of the past.

Labor leaders are talking to rank-and-file workers about sacrifice and the need to help Detroit automakers become competitive again.

They're warning of difficult negotiations ahead and reminding members of the financial problems and intense pressure facing the companies.

Last month, UAW Vice President Cal Rapson told union leaders from General Motors Corp. plants around the country that "the way we conducted business in the past when General Motors was very profitable, would have to change," according to a recent note to workers in Warren, Ohio. "He made some comments that if we didn't make changes, we wouldn't survive in the future."

The comments signal a major shift in tone for a union that traces its roots to firebrand leaders like Walter Reuther and the famous sit-down strike in Flint.

Negotiations are set to begin in earnest this summer with the goal of securing a new labor agreement when the current four-year pact expires in September.

Ford Motor Co. has started monthly talks with its union chiefs.

And DaimlerChrysler AG's Chrysler Group will enter the 2007 talks from a far weaker position than it was just a year ago.

"If we don't make a profit, we don't have a plant," said James Kaster, president of UAW Local 1714, which represents workers at GM's factory in Lordstown, Ohio.

His plant has a program under way to educate workers on why GM's financial success should matter to them.

"You can't just say, 'Hey we're going to do things the old way.' That's a huge change for us."

During the 2003 negotiations, the UAW was able to gain ground on wages and benefits and held on to key provisions such as the jobs bank, which allows laid-off workers to receive full pay.

However, the union did agree to a lower pay scale for new hires at major suppliers Visteon Corp. and Delphi Corp.

It's a new environment

This year's talks are likely to be far different. While the union can be expected to fight for the best possible deal, it appears to be taking a pragmatic stance.

"We have made a conscious choice to put aside the adversarial approach," UAW Vice President Bob King said last year.

Unprecedented pressures are driving the change in tone. The domestic automakers combined lost nearly $7 billion in the third quarter of 2006. GM and Ford have massive restructuring programs under way. Chrysler is preparing its own restructuring, expected to involve job cuts, plant closings and the elimination of shifts.

The cutbacks have hastened the UAW's membership decline. In 1979, the union boasted 1.5 million members. The number could fall below 500,000 this year.

Moreover, foreign carmakers continue to eat into the Big Three's U.S. market share, with Toyota Motor Co.'s U.S. sales surpassing Ford's in two months of 2006.

"If the U.S. auto industry is going to survive, it's going to have to change, and we're going to have to change with it." said Skip Dziedzic, president of UAW Local 1866 representing a Delphi Corp. plant in Oak Creek, Wis.

Leaders at GM have said they will focus on cutting its annual health care tab of $5 billion. GM's North America President Troy Clarke last week said retiree health care, a linchpin of the UAW's benefit package, was an area of particular concern.

"The UAW understands in a profound way the severity of the crisis," said Harley Shaiken, a labor expert at the University of California-Berkeley.

GM is working to increase that awareness among employees with a finely tuned message that balances appreciation for the union's sacrifices with a clear message that more is needed.

Already, GM and the union have agreed on landmark changes to health benefits designed to cut GM retiree health care liability by $15 billion and cut annual health care costs by $3 billion. GM and Ford also struck deals with the UAW that will lead to the early retirement of more than 72,000 union workers.

"There's been the realization by everyone that these are incredibly challenging times and our fates are linked," GM spokesman Dan Flores said.

Across town, Ford posted the deepest losses of the Big Three in the third quarter, finishing $5.2 billion in the red.

Like at GM, UAW members at Ford are hearing the message that some sacrifice may be necessary.

"It's very delicate this year," said Jim Stoufer, president of UAW Local 249, at Ford's plant outside St. Louis. "Common sense tells you this is going to be rough. We are going to have to play ball with Ford and keep them competitive. But there is going to come a line that we won't cross."

Chrysler stance may change

Chrysler, reeling from a disastrous $1.5 billion loss in the third quarter, will likely follow Ford and GM's lead, said Sean McAlinden, chief economist for the Center of Automotive Research.

After initially dismissing the idea of a mid-contract health care deal with Chrysler similar to the one granted GM and Ford, UAW President Ron Gettelfinger said last month that the union is reconsidering concessions. The turnaround followed an agreement Chrysler struck with China's Chery Automobile Co. to produce small cars to be sold in the United States.

Adding to the pressure on the UAW is the growing number of nonunion auto jobs in the United States as foreign automakers build factories in the South.

Many of those jobs come with good pay and benefits, despite the lack of representation for its workers, a fact that's not going unnoticed by the UAW.

UAW: Not one solution

In public at least, the UAW's top leadership will continue to highlight their belief that better trade policies and a national health care strategy are the real keys to competitiveness for U.S. manufacturers.

"Whenever and wherever the UAW goes to the bargaining table," Gettelfinger wrote in his most recent column in Solidarity Magazine, "we're confronted more and more often with rising health care costs, outsourcing and offshoring, attacks on our secure retirements and the threat of plant closings.

"These are not local, individual issues. They are national issues that cannot be solved at any one bargaining table with any one employer."

You can reach Sharon Terlep at (313) 223-4686 or sterlep@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

Thursday, January 18, 2007

GM may sell more assets

Wednesday, January 10, 2007
GM may sell more assets
The Detroit News

General Motors Corp., which sold $17 billion in assets in the past 15 months, may sell more this year because the company still isn't generating cash from operations, Chief Financial Officer Fritz Henderson said.

"While we're burning cash, we need to be cognizant of what's on our balance sheet and what other assets might be monetized," he said in an interview Tuesday at the North American International Auto Show.

He wouldn't say what GM, the world's largest automaker, might sell.

Any asset sales this year would be "much less," Henderson said, declining to give an estimate.

GM's recent sales include 51 percent of its finance unit to a group led by Cerberus Capital Management LP, raising $14 billion over three years.

The automaker also sold stakes in Suzuki Motor Corp., Isuzu Motors Ltd. and Fuji Heavy Industries Ltd., raising $3 billion.

Those generated cash as GM lost $10.6 billion in 2005 and more than $3 billion through three quarters of last year.

"Selling off non-strategic pieces still makes sense to us," said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee. "There's still some trimming that needs to be done."

© Copyright 2007 The Detroit News. All rights reserved.

Detroit carmakers push to be greener

Saturday, January 06, 2007
CHANGING MINDS: Last in a four-day series
Detroit carmakers push to be greener
Christine Tierney / The Detroit News

Each year, Detroit automakers spend billions to get on the shopping lists of drivers like Alex Beaty. A Wisconsin factory worker, Beaty, 19, is an ardent environmentalist who drives a 1993 Eagle Summit that gets 42 miles to the gallon on the highway.

He knows U.S. automakers sell more fuel-efficient vehicles than in the past, including gas-electric hybrids, but his next car is likely to be Toyota's hybrid Prius or Honda's hybrid Civic.

"I look at GM from time to time, but if I were to go out and buy a new car, I wouldn't consider GM," he said.

And Ford and Chrysler aren't even on his list.Getting people like Beaty to take a fresh look at their vehicles is one of the biggest challenges facing U.S. automakers.

Nearly one in five prospective buyers polled for an exclusive study conducted by J.D. Power and Associates for The Detroit News indicated that they will not consider a domestic brand -- and 40 percent of them named poor fuel economy as a reason.

Over the past two years, that deeply-ingrained perception has hurt General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.

As gas prices spiked above $3 a gallon, consumers began to shun gas-guzzlers such as big SUVs, which were once a big source of profit for Detroit's Big Three. Baha Fakerdine, who was car shopping last month at Superior Nissan in Dearborn, said fuel economy was the main thing on his mind. "Nowadays, you have to really look at that," said Fakerdine, 42, of Dearborn.

Gas prices have receded from their highs, and sales of some big vehicles are starting to rebound. But auto executives say the recent volatility is likely to leave a lasting imprint in the consciousness of American consumers.

"Fuel economy is going to become more and more important to customers," Mark Fields, president of Ford's Americas division, said in an interview Friday. "Gas prices are not going down."

While U.S. automakers are offering more appealing cars and introducing more hybrids, executives feel consumers are slow to recognize their efforts.

"There's definitely a perceptual gap between how our portfolio is perceived, as opposed to reality, in terms of fuel economy," said Mark LaNeve, GM's head of North American sales.

GM sells 23 vehicles that get more than 30 mpg and its overall fuel-economy ratings are improving, he said, while Toyota Motor Corp. is introducing larger vehicles such as the FJ Cruiser and now, its biggest-ever pickup, a new Tundra. "It's really frustrating to me that more doesn't get written about that," LaNeve said.

A bum rap?

The News' study found that just 4 percent of prospective buyers who indicated they would avoid Asian brands cited poor fuel economy as a reason.

Of those who avoid European brands, 14 percent named fuel economy. But another J.D. Power survey -- the 2006 Automotive Performance, Execution and Layout Study -- found that, compared to American and Asian brand owners, European vehicle owners were the happiest with their models' fuel-efficiency.

"They're big V-8s, most of them, but it's all relative," said Todd Wilson, J.D. Power's director of automotive retail research. "Their feeling is, 'I've got this $60,000 car, it's fast as heck, and I'm still getting 20 (mpg) on the highway. I'll take it.' "

Asian automakers that play in large-volume vehicle segments are less immune to the trends.

While Toyota and Honda Motor Co. increased their U.S. sales and market share last year, Nissan Motor Co.'s sales fell 5 percent as demand for its big vehicles slumped. Titan pickup and Armada SUV sales each fell 17 percent.

Nissan is only now offering a hybrid in the U.S. market, a gas-electric Altima sedan, after balking that the technology was too costly, given the limited demand.

For all the hype, hybrids account for 1 percent of vehicle sales -- but automakers are jumping on the bandwagon because they confer an aura of social responsibility to companies that make them.

Ford was the first U.S. automaker to make a hybrid vehicle and the first in the world to produce a hybrid SUV, the Escape.

At the 2007 North American International Auto Show, Ford is expected to show a concept plug-in hybrid that could be recharged at home using an electrical outlet.

Last year, GM rolled out the Saturn Vue Green Line, an SUV with a more basic and affordable hybrid technology than Toyota's, which adds a few thousand dollars to the cost of a vehicle.

At the Los Angeles auto show in November, GM outlined an ambitious plan to develop technologies for cleaner, more fuel efficient vehicles that can be powered by a number of sources of energy, with a focus on electricity, and said it would develop a plug-in version of the Vue Green Line.

Later this year, GM will introduce "two-mode" hybrids, developed with BMW and DaimlerChrysler that have two electric motors, one geared to add power at low speeds and another at higher speeds. "I believe our two-mode hybrid will be the gold standard technology for hybrids in the industry," LaNeve said.

Competing solutions

GM also is developing fuel-cell cars, which can be emission-free when powered by hydrogen. GM has built 100 fuel-cell Equinox SUVs for demonstration projects.

As a short-term solution, the U.S. automaker is championing ethanol, an alcohol-based fuel made from corn or other starch crops, which can power vehicles built to run on gas or ethanol. Because ethanol contains only 10-15 percent gasoline, vehicles using it consume less oil than a Prius hybrid, LaNeve said.

Oil independence -- or reducing U.S. oil imports from regions ravaged by conflicts -- is one of the concerns driving the quest for higher fuel-efficiency.

The News' survey indicated most consumers interested in fuel-efficiency want to save money. But others are willing to spend more to protect the environment.

"Where we live, everybody's driving a humongous vehicle -- SUV, huge pickup, that sort of thing," said Patricia Ashmore, a programmer at a health care organization who lives in the Dallas area. "I think it's a waste."

Ashmore and her husband bought a 2005 Prius because it was fuel-efficient and environmentally friendly. She describes its looks as "OK. On a scale of 1 to 5, it's probably a 2."

Honda, the first company to market a hybrid in the United States, is trying to increase demand for the vehicles, but believes they will remain niche products unless their cost comes down. "We see the key hurdle as affordability," said Ben Knight, vice president of auto engineering at Honda R&D Americas.

Honda's engineers in Japan are trying to develop a low-cost hybrid to sell around the world.

Cleaner diesel

Honda is also working on a diesel engine that meets emission standards of all U.S. states, including California's stringent levels.

Diesel, about a third more fuel-efficient than gasoline, is also a priority for Germany's automakers. DaimlerChrysler's Mercedes-Benz is showing a concept SUV featuring its Bluetec clean diesel technology at the Detroit show, the Vision GL 420 Bluetec. Equipped with a V-8 diesel delivering 290 horsepower, the SUV gets 24 mpg and can ride 600 miles on a tank of gas.

While automakers will dazzle Detroit auto show visitors with futuristic visions of alternative technologies, some of their biggest gains in fuel economy reflect steady improvements in conventional gas-powered cars.

Ford will display a Lincoln MKR coupe with a direct-injection, 3.5 liter gasoline engine that combines the performance of eight cylinders with the fuel economy of six, according to Ford.

GM and Chrysler have developed technologies that can de-activate some engine cylinders to save gas when the vehicle doesn't need all of its power.

"We continue to update and refine that system," said GM spokesman Chris Preuss. When combined with a six-speed transmission that GM and Ford share, the technology can boost efficiency by as much as 10 percent.

"Our new Silverado pickup gets 22 miles per gallon on the highway," LaNeve said. "Probably 20 years ago, that pickup truck was probably 12." GM is trying to explain the improvements to consumers, and "we're having some effect," he said. "But it takes time."

Detroit News Staff Writers Sharon Terlep and Josee Valcourt contributed to this report. You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

GM outlines 2007 financial objectives

Thursday, January 11, 2007
GM outlines 2007 financial objectives
John D. Stoll / Dow Jones

DETROIT -- General Motors Corp. executives today will tout the momentum of their restructuring efforts and provide a glimpse of financial objectives for 2007 during a two-hour presentation to analysts.

GM's top brass, including CEO Rick Wagoner, will focus on the company's drive to continue increasing revenue after a 5 percent gain through three quarters of 2006, its expectations for a rise in its U.S. retail sales, and its ongoing commitment to boost sales in markets outside the United States.

GM quit giving formal earnings guidance and is not expected to provide an extensive 2007 cash-flow forecast on Thursday. The company's cash position, which has been a source of concern because of heavy outflows in recent quarters, might have risen to a healthy $30 billion as of the end of 2006, thanks to proceeds from the November sale of control in the General Motors Acceptance Corp. lending arm.

While formal guidance will be absent, GM Chief Financial Officer Fritz Henderson said the auto maker will be "transparent on what the drivers are for profitability." He said that the company faces too many uncertainties to provide formal guidance. "It's much more about showing consistent, improved performance," he added.

GM will give more clarity on cash flow fundamentals in coming months, Henderson said.

The auto maker posted a net loss of nearly $1 billion over the first nine months of 2006 and will report full-year earnings Jan. 30. The performance in the first three quarters represented a $3.5 billion improvement over the same period in 2005, when GM went on to lose $10.6 billion for the year.

GM expects business fundamentals to improve in 2007, with 40 percent of its retail volume in the United States coming from what are considered new products. Retail sales exclude those to fleet customers, such as rental car firms and government or corporate accounts.

GM is under increased pressure to improve its financial performance, in particular because the company is hitting the sweet spot of its product cycle, many analysts say.

GM has promised to sell at least 3 million vehicles at the retail level in the U.S. this year, representing about 23 percent of the retail market.

© Copyright 2007 The Detroit News. All rights reserved.

Wednesday, January 17, 2007

Tough end to a tough year

Thursday, January 04, 2007
Tough end to a tough year
Big Three U.S. market share dives as Toyota rises in '06
Christine Tierney / The Detroit News

Detroit's automakers finished 2006 with their lowest share of the U.S. auto market in history, as Toyota Motor Corp. breached the top ranks after outselling DaimlerChrysler AG for a full year.

General Motors Corp. and Ford Motor Co. reported sales declines for December and for the year after volatile gas prices and a sluggish economy cut demand for their big SUVs and pickup trucks.

In the jockeying among brands, Ford's blue oval brand recovered its No. 1 ranking in the U.S. market from GM's Chevrolet nameplate, which had overtaken Ford in 2005.

But the most significant milestone was Toyota's rise to third place among manufacturers after GM and Ford in the U.S. market for the first time.

"Everyone expects them to surpass Ford in 2007," said industry analyst Alex Rosten at Edmunds.com, an online auto research site. "We certainly expect Toyota to take the No. 2 spot in North America and hold it indefinitely."

GM led the market last year with sales of 4.1 million cars and trucks, down 8.7 percent from 2005 levels, followed by Ford, whose sales -- including its European luxury brands -- fell 8 percent to 2.9 million, according to Autodata Corp.

Toyota sold 2.5 million cars and trucks, a 12.5 percent rise over year-earlier levels and its 11th consecutive annual sales gain, while DaimlerChrysler's sales, including Mercedes-Benz vehicles, fell 5.5 percent to 2.4 million units.

Overall, the U.S. auto market shrank by 2.6 percent last year to 16.56 million vehicles -- the lowest total since 1998 and well below the industry's expectations. December sales were down 3.6 percent.

Last year's sales decline hit the domestic brands hardest, while Asian and European nameplates showed gains. The traditional American manufacturers -- excluding GM's and Ford's foreign nameplates and DaimlerChrysler's Mercedes -- took 53.7 percent of the market, a drop of 3.2 percentage points.

U.S. auto executives said some of the decline reflected strategic decisions to reduce their least profitable activities, such as sales to rental car companies, as part of their financial recovery efforts.

Ford's market analyst George Pipas said the sales drop was due partly to the discontinuation of the Taurus sedans which had been sold primarily to fleets and the Freestar minivan.

The Dearborn automaker also was hurt by falling demand for large SUVs, which fell out of favor during the gas price hikes, and big pickups. Pickup sales are weakening in tandem with the housing sector.

Detroit's automakers are likely to remain under pressure this year as demand for those large and traditionally lucrative vehicles is not expected to recover quickly.

In addition, competition is increasing in the large pickup segment, with GM now launching a new line of trucks and Toyota scheduled to introduce a full-size pickup in February.

"The full-size truck market is going to look very much like a sumo wrestling match," Pipas said. "There's going to be a lot of pushing and shoving."

Sales of Ford's F-Series pickup fell 21 percent in December, but it remained the best-selling truck in the market.

Ford benefited from buoyant sales of its Ford Fusion, Mercury Milan and Lincoln MKZ cars.

Overall, car sales edged up 1.5 percent, accounting for 47 percent of the market in 2006, while sales of light trucks -- minivans, pickups and SUVs -- declined 5.9 percent.

Of the U.S. automakers, GM posted the biggest annual sales decline despite launching large SUVs early in 2006 and new pickups late in the year.

But Paul Ballew, GM's executive director of market analysis, said the decline masked encouraging trends: higher selling prices, lower sales incentives and lower fleet sales.

"It was tough for us to accept a sales decline, but as we look back on the year, it was the right thing for us to do," Ballew said.

GM and Ford both reported 13 percent sales declines in December, while DaimlerChrysler's Chrysler Group recorded a 0.5 percent gain -- but Chrysler's incentives ballooned last month to $4,416 per vehicle, compared with $3,829 at Ford and $2,393 at GM, according to Edmunds.com.

In a recent interview, GM's North America sales chief Mark LaNeve said Chrysler was spending "astronomical amounts of money" to move the metal -- and that strategy was unfortunately having an impact on GM's sales.

By contrast, Toyota spent $1,363 in incentives per vehicle and Honda Motor Co.'s discounts averaged $472 in December.

"Pricing in the industry has been under pressure for a couple of years," said John Mendel, senior vice president at American Honda. "But we've tended not to play that game as much as the domestics have -- which reflects in our residuals."

Toyota executives said they expect to increase U.S. sales again this year by 6 percent, to 2.68 million cars and trucks.

You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

GM taps two auto suppliers in race to make hybrid battery

Friday, January 05, 2007
GM taps two auto suppliers in race to make hybrid battery
Sharon Terlep / The Detroit News

General Motors Corp. has awarded contracts to two auto parts suppliers with the goal of developing batteries for plug-in hybrid vehicles. The cars would be powered by batteries and recharged through an electric outlet, the company announced Thursday.

Finding an affordable battery with sufficient lasting power is critical to GM's efforts to build an electric vehicle, the company has said. GM is in a race with Asian automakers to develop that battery technology.

The battery contracts, announced in a news release Thursday, go to Johnson Controls-Saft Advanced Power Solutions LLC and Cobasys, a joint venture of a Chevron subsidiary and Energy Conversion Devices Inc.

Both will work to develop a lithium ion battery for a Saturn Vue plug-in sport utility vehicle.

Their challenge will be to create a battery that can recharge quickly, last long stretches of time and not overheat, while being small and cost-effective to sell on the mass market.

GM made its plug-in efforts the centerpiece of its appearance at the Los Angeles Auto Show in November.

© Copyright 2007 The Detroit News. All rights reserved.

GM: No. 1 spot at risk

Friday, January 05, 2007
GM: No. 1 spot at risk
But Wagoner won't concede sales crown to Toyota without a fight
Bill Vlasic / The Detroit News

He's not conceding the race, but Rick Wagoner seems ready to accept that General Motors Corp. may lose its ranking as the world's largest automaker.

With Toyota Motor Corp. expecting to sell 9.3 million vehicles this year, GM is in danger of falling from the No. 1 position for the first time in 75 years.

Wagoner, GM's chairman and chief executive, said Thursday that GM sold 9.1 million vehicles last year, but the automaker will not chase unprofitable sales volumes just to stay in first place.

"If as a result of that we get passed, well, it won't be a happy day for me," Wagoner told reporters at a media briefing in Detroit. "But I've lost basketball games before in my life. You've got to get ready and you learn and you go back to play the next day."

After a tumultuous year that included a further drop in its U.S. market share, Wagoner said GM is more committed to building shareholder value than staying ahead of Toyota, which sold an estimated 8.8 million vehicles in 2006.

"It's not something where we would sit back and let somebody pass us by," he said. "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."

If that means GM falls behind Toyota, Wagoner promised that the competition between the two will remain spirited. "We're going to fight to keep the (No. 1) position. If one day we lose it, we'll fight to get it back."

Last year marked a period of retrenchment for GM as it launched a huge restructuring of its money-losing North American operations.

GM saw its U.S. sales fall 9 percent in 2006 after cutting back on expensive consumer incentives and low-profit sales to rental-car fleets. Overall, GM's U.S. market share slipped to a historic low of 24 percent.

The drop in sales in its home market, however, was offset by a 7 percent increase in sales outside the United States.

Wagoner said the surge in sales in markets such as China and Latin America represents GM's best opportunity for long-term growth.

"In 2006, about 55 percent of our sales were outside the U.S. and that's going to continue to grow," he said. "That's where the growth is in this industry and we're participating pretty well."

He was more circumspect, however, about GM's prospects in the United States. GM has not posted a quarterly profit in North America since 2004, and Wagoner once again declined Thursday to predict when the division will be back in the black.

Even though GM is on pace to cut $9 billion in annual structural costs, industry analysts are skeptical that its North American turnaround issolid .

One analyst, Ronald Tadross of Bank of America, downgraded GM's stock from "neutral" to "sell" Wednesday on concerns that its U.S. market share will decline again this year. "Vehicle overpricing and inventory levels are worse than the first quarter of 2005 when the company last missed earnings expectations," Tadross wrote in a report.

But Wagoner said he thought GM did a "good job" in 2006 of steering its U.S. auto business away from costly rebates and a dependence on fleet sales.

"We started out the year with a very clear vision of what we wanted to do from a sales and marketing perspective," he said. "We went through the year with what I thought was a lot of discipline in executing that plan."

He said GM expects to increase revenues this year with new-model introductions. While he would not rule out more cost-cutting, Wagoner said there won't be any "big bites" from employee rolls.

Wagoner also said that next summer's contract talks with the United Auto Workers will focus on "tough issues" needed to improve the competitiveness of GM and domestic rivals Ford Motor Co. and the Chrysler Group of DaimlerChrysler AG.

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

© Copyright 2007 The Detroit News. All rights reserved.

Monday, January 15, 2007

GM, Ford recalls plummet

Saturday, January 06, 2007
GM, Ford recalls plummet
Toyota also among automakers who saw numbers drop dramatically in 2006; DCX doubles call-backs.
David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Safety recalls declined dramatically among automakers in 2006, with substantial improvement by General Motors Corp., Ford Motor Co. and Toyota Motor North America.

Through November, an estimated 9.2 million vehicles were recalled, nearly half of the 17 million cars and trucks recalled in 2005 and well below the record-breaking 30.8 million recalls in 2004, according to data compiled by the National Highway Traffic Safety Administration.

Ford, which led the industry with 6 million recalls in 2005, saw recalls drop to 1.7 million in 2006. GM saw similar results, recalling 1.6 million cars and trucks, down from 5 million the year before.

Toyota, which has faced nagging questions about its quality after 2.2 million recalls in 2005, saw improvement in 2006, with 766,000 vehicles recalled.

"The automakers have made great strides in quality," said David Cole, chairman of the Center for Automotive Research.

He said the decline was due in part to across-the-board improvement among automakers in quality, as well as efforts to fix problems more quickly. He said early warning systems -- such as GM's OnStar -- were helping cut warranty and recall costs.

DCX bucks Big 3 trend

Bucking the trend among Detroit's Big Three was DaimlerChrysler AG, which saw its recalls more than double to 2.4 million vehicles in 2006.

The German-American automaker had 28 separate recalls in 2006, up from nine in 2005, the company said. Chrysler's largest recall came in August, when it recalled 825,000 2002-06 Jeep Liberty models because of problems with ball joints.

"Things happen. Safety is the priority," said Max Gates, a Chrysler Group spokesman, noting that as common parts are used in more vehicles, they can lead to more recalls.

"We don't know what to expect for 2007."

Among Asian carmakers, Nissan had a number of high-profile recalls and vowed to improve. Nissan recalled more than 780,000 vehicles in 2006.

"We're not satisfied with the number of recalls we had in 2006 and we're working toward reducing that number," spokeswoman Jeannine Ginivan said Friday.

Pleased, but not satisfied

Ford spokesman Dan Jarvis said the automaker was pleased with its dramatic reduction in recalls.

"It's really due to a concerted effort to improve quality across the board," he said. "The fruits of the effort are paying off."

The bulk of Ford's recalls were due to a decision in August to expand one of the largest safety recalls in automotive history to 1.2 million trucks, vans and SUVs that were prone to engine fires.

GM spokesman Alan Adler said the company had 20 recall campaigns in 2006 -- versus 34 in 2005 -- and only two involved more than 100,000 vehicles.

"It's the lowest number of recalls we've had in seven years," Adler said. "While that's good, we can't let up or relax in trying to reduce or eliminate the need for recalls. It's nothing to declare victory over."

To improve quality, Toyota in August said it would delay some new models.

"We are continuously striving to improve," Toyota spokeswoman Allison Takahashi said.

Not all the recalls are significant; Honda recalled 1.2 million vehicles because its owner manuals didn't have the right telephone number to alert the government of safety issues. The NHTSA is expected to release final recall numbers next week.

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

© Copyright 2007 The Detroit News. All rights reserved.

Sunday, January 14, 2007

GM says Toyota has more clout in D.C.

Wednesday, January 10, 2007
GM says Toyota has more clout in D.C.
Sharon Terlep / The Detroit News

DETROIT -- General Motors Corp. says it's getting outgunned by Toyota Motor Corp. in Washington, D.C.

Bob Lutz, GM's vice chairman for product development, said the world's largest automaker has had less political pull than the Japanese company for some time.

"Toyota outspends us. They have more congressmen and senators than we have," Lutz told a group of reporters Tuesday at the North American International Auto Show. "Toyota has more clout in Washington than we do."

Japanese automakers have gained political power as they locate factories in the South. Toyota employs 39,000 workers in six North American plants. GM, meanwhile, has seen its work force fall to about 140,000. Toyota's world market share is on pace to surpass GM's this year.

Political pull matters when it comes to issues such as regulatory mandates and tougher fuel economy standards. Harley Shaiken, a labor expert at the University of California-Berkeley, pinpointed public policy, namely the lack of national health care coverage, as one of the main contributors to the woes of Detroit car companies.

Lutz was less than optimistic about GM's status in Washington.

"I try not to go to Washington too often," he said. "I find it profoundly depressing."

© Copyright 2007 The Detroit News. All rights reserved.

Compliment makes GM flush

Saturday, January 13, 2007
Business Insider
Compliment makes GM flush
The Detroit News

It probably wasn't the kind of nod GM expected.

A recent segment on CNBC featured Roto-Rooter's new "Pimped-out John," a toilet with an array of features enough to outshine even the most macho entertainment system.

Among the trinkets: a Microsoft Xbox 360, laptop computer, high-definition television, refrigerator and bike pedal exerciser.

The gadget-packed john will go to the winner of a contest designed to pump up Roto-Rooter's persona. During last week's news segment, the excitable Roto-Rooter spokesman chirped that the toilet is the plumbing community's version of OnStar -- GM's much advertized in-car communication system.

Thanks Keith I think

In introducing Mayor Kwame Kilpatrick at the Detroit Economic Club Friday, media mogul Keith Crain, chairman of Crain Communications, managed to reference Kilpatrick's controversy over the city-leased Lincoln Navigator, his now-discarded earring, his youth and negative headlines that dogged his first term.

At the same time, he praised Wayne County Executive Robert Ficano for spearheading a deal to expand and renovate Cobo Center and mentioned that Kilpatrick's more ambitious plan from two years ago never came to fruition. When he finally took the lectern, Kilpatrick appeared to be unsure whether to thank Crain or launch a few jabs of his own.

"I want to thank Keith Crain for that introduction I think," Kilpatrick said. "That's what you're supposed to say, right?"

Later during the Q&A portion of the event, Crain saved the toughest question for last -- which vehicle on the Cobo floor was his favorite. Kwame said he like the Ford Mustang, the Chrysler Town & Country and the Cadillac Escalade. "But I hate the Navigator."

From auto nerds to just nerds

The auto show is important for any company connected to the business of putting wheels on the road, but Visteon Corp. has another trade show to hit this week.

The Van Buren Township-based auto parts maker also put in an appearance at the International Consumer Electronics Show, where it showed to the gathering of geeks the wireless charger for mobile devices it's developing.

The gizmo consists of a base station on which a mobile gadget is placed to be rejuiced through a car's lighter socket and sits in a cup holder. Visteon expects to sell the chargers for $60 starting later this year. The technology works because the base station creates a magnetic field that generates a current within the gadget's adapter.

The companies -- as well as cell phone maker Motorola Inc. and Zeeland, Mich-based furniture maker Herman Miller Inc. -- have formed an alliance to create a standard for the wireless power-up technology, called eCoupled.

Cool! But what we really want to ask the Visteon folks is this: Can you get us an iPhone?

Contributors: Sharon Terlep, Mark Truby, Eric Morath, Brian J. O'Connor

© Copyright 2007 The Detroit News. All rights reserved.

At the auto show, many cars, many truths

Saturday, January 13, 2007
At the auto show, many cars, many truths
Warren Brown / The Washington Post

DETROIT -- Automotive exhibits, such as the North American International Auto Show here, represent a collection of truths. The temptation, for reasons of easier public consumption, is to present them as one theme. But that approach speaks more to marketing than it does to accuracy.

It is better to examine truths separately, an exercise facilitated in this instance by the more than 750 vehicles, concepts and production models on display in cavernous Cobo Center.

Each vehicle speaks to a different reality. We'll use this limited space to examine those speaking the loudest this year at the 100th anniversary of the Detroit show.

Truth: The world's car companies are global enterprises with global intelligence. They are run by people who are well aware that oil is a finite resource being depleted by rapidly growing global demand. Most of their cars and trucks run on fossil fuels. The survival of their businesses depends on the development, design, manufacture and sale of publicly acceptable automobiles that use less of the stuff.

General Motors' concept Chevrolet Volt plug-in electric car and Mercedes-Benz's Smart ForTwo city car get the most attention here.

The Volt is an attractive family car with a lithium-ion battery that can be charged at home or office on a standard 110-volt circuit. When fully charged, electric power alone can drive the car 40 miles before a three-cylinder, fossil-fuel engine starts to generate more electricity.

Huge amounts of recyclable materials -- plastic derived from discarded water bottles, for example -- are used in the Volt, thus increasing its environmental friendliness. How? Each Volt car would represent the equivalent of 400 plastic water bottles not going into a landfill somewhere.

Suppliers, such as General Electric, have come up with interesting weight-reducing solutions, such as taking the pounds out of the Volt's transparent canopy by using a polycarbonate plastic (GE's trademarked Lexan) coated with a thin layer of glass. The Lexan canopy weighs 50 percent less than glass. Lower weight means the car's gas-electric power system works less and uses less energy.

Success of the Volt and the development and sale of similar models being considered by Ford, Toyota and visionary entrepreneur Malcolm Bricklin will depend on the development of an affordable, reliable, robust lithium battery.

It may take five to 10 years to bring the Volt to market. But what is important is that GM, still the biggest car company in the world, has committed to spending billions of dollars to develop the Volt and similar electric vehicles. This column sees that as a very good thing.

The Smart ForTwo from Mercedes-Benz, introduced in 1998, is to be available in the United States in the first quarter of 2008. About 770,000 ForTwo cars have been sold in Europe and Asia. The updated European model on display here is much improved over the original in terms of safety, comfort, ease of use, amenities and appearance. The U.S. version will get those changes as well as a consumer-friendly automatic transmission. Mercedes-Benz plans to bring the Smart ForTwo to the United States at a price competitive with the least expensive Korean car, roughly $11,000 to $15,000.

The ForTwo, depending on the model chosen, can get 50 miles per gallon. (I once drove a diesel version that got nearly 60 mpg.) I am so convinced of its safety and reliability that I am planning to drive one coast-to-coast in the United States.

Truth: American families want attractive, affordable, safe economy and mid-size cars. They resent the idea that "family" in past automotive thinking has all too often meant "boring" and that "economy" too frequently has meant "cheap."

GM, at long last, has gotten the message. It is offering a bevy of market-ready cars as proof. They include the 2008 Chevrolet Malibu and Saturn Aura, priced in the $20,000 range, fully capable of going against successful mid-size rivals such as the Toyota Camry and Honda Accord, which also have been given more family appeal.

Ford, somewhat yielding to American demands that it sell the European version of its Focus compact car in the United States, at least is bringing to the nation's economy-car buyers a new Focus that looks and feels as good as the European model, though it continues to use the same old American market platform.

Nissan will ensure that none of its competitors can rest in the arena of compact and mid-size family cars. Nissan's new Altima sedan is a hands-down winner inside and out, and the company is showing something more at the Detroit show -- a concept Altima coupe that is attracting as much attention as the concept Honda Accord Coupe a few aisles away.

Truth: Big trucks are forever, even in an era of rising fuel prices. Just because the truck poseurs -- people who bought them more for image than need -- are leaving the market doesn't mean that big pickup trucks are going away.

Anyone doubting that should look at the big-truck offering from greener-than-thou Toyota -- the Tundra CrewMax. It is designed to go against the 2007 North American truck of the year, the Chevrolet Silverado.

This is the beginning of an ugly fight. The Tundra CrewMax is entering the ring with a 5.7-liter, 382-horsepower V-8 engine. The comparable Silverado has been doing extremely well with its 5.3-liter, 315-horsepower V-8.

Interestingly, Toyota isn't bragging about fuel economy in this brawl. Its new CrewMax gets 16 mpg in the city and 20 on the highway, about the same as the Silverado.

To the extent that there is something that might pass for a single theme at this year's Detroit show, it is represented in the one best characterizing the truck battle: More power, less fuel.

© Copyright 2007 The Detroit News. All rights reserved.

Saturday, January 13, 2007

'07 looking up for GM

Friday, January 12, 2007
'07 looking up for GM
Automaker will pump another $1B into products as cost cutting continues
Sharon Terlep / The Detroit News

The upbeat picture General Motors Corp. executives painted for Wall Street on Thursday is a far cry from a year ago when company leaders were scrambling to explain a disastrous $10.6 billion loss.

If predictions for 2007 prove true, the world's largest automaker will shave losses, bolster spending on new products and grab market share in competitive world markets.

But the heat is far from off GM, which lost $91 million in the third quarter of 2006 and expects to lose money again in 2007. Toyota Motor Co. is poised to take GM's spot as the No. 1 global automaker this year, and many of the problems that dogged the automaker last year -- soaring health care costs, falling market share and increased competition from foreign rivals -- aren't going away.

"2006 needed to be a huge year for us -- and it was," Chairman and CEO Rick Wagoner said at the company's annual meeting with analysts in Dearborn. "No one at GM believes that hitting breakeven in North America or making a couple of billion in corporate net income is winning. There is a lot more work to do, but we stand today in a much more favorable position than we did just 12 months ago."

GM cut $9 billion in operating costs in 2006, more than the $6 billion initially predicted. It reduced structural costs to between 29 percent and 30 percent of global revenue from 34 percent in 2005. The ultimate goal is to get that number down to 25 percent.

For GM, show a success

Meanwhile, GM generated some much-needed hype with a collection of well-received products, from the Saturn Aura sedan to the made-over Chevrolet Silverado pickup and stabilized its share of retail sales.

And GM continues to grow in vital markets outside the United States.

"I've sort of done a 180 on Rick Wagoner," analyst Brad Rubin of BNP Paribas said after the presentation. "He finally stepped up to the plate and decided that GM does have serious problems and finally started the process of making GM a healthy company."

Some of the good cheer that flowed through GM during its showing this week at the North American International Auto Show, where the automaker swept the car- and truck-of-the-year awards, carried over into Thursday's meeting, in which executives were upbeat and even cracked a few jokes.

'We win with new products'

In 2007, GM will bank on a new product assault to drive up sales, while increasing capital spending by up to $1 billion this year. Much of that money will go toward improving powertrains and increasing capacity in emerging foreign markets.

"This is a global business, we've got to play the game globally," said Fritz Henderson, GM's chief financial officer. "And we win with new products."

GM has increased capital spending by about $1.5 billion over the past two years to just under $8 billion. The goal is to spend from $8.5 billion to $9 billion in 2007 and 2008.

The spending increase backs up GM's latest mantra: that cost-cutting won't help unless the company starts turning out more popular and profitable products. The goal is to have newly introduced vehicles account for nearly 40 percent of showroom sales this year as it rolls out products designed to revive its brands and image.

"We're going to continue raising the bar in future product, with a particular focus on outstanding design and technology leadership," GM Chairman and CEO Rick Wagoner said.

It's growing outside U.S.

Growing markets outside the United States, namely China, Brazil, Russia and India, provide opportunities for GM to boost its world market share, Wagoner said, promising to "drive aggressively" into those emerging markets. About 55 percent of the company's sales in 2006 were outside the United States, a trend expected to continue, he said.

Many of the strategies employed throughout 2006 will continue this year, including a concerted effort to scale back incentive spending and sales of less-profitable fleet vehicles.

Despite the gains last year, 2007 promises to be tough.

Vehicle sales industrywide in the United States are expected to remain flat for the year at about 17 million units. Volatile gas prices, a sour housing market and trade imbalances with other countries will continue to weigh on automakers.

Toyota is expected to continue plowing into the market share of Detroit's Big Three, each of which face hurdles in improving their image among U.S. consumers.

Analysts see progress

Much of the early reaction to GM's presentation was positive, though many noted that much of the news was expected and in line with what the company said it would do.

"I think it's realistic," auto analyst David Healy at Burnham Securities said of GM's predictions for 2007. "They've demonstrated they have had a dramatic improvement in their results. Anyone who's spent any time looking at the actual results during the course of the year will be a believer that they will do better."

Adding to the good news, General Motors Corp.'s risk of filing for bankruptcy was at the lowest since March 2005, credit-default swap prices show. Credit-default swaps based on $10 million of GM bonds fell to $371,400 Thursday, according to CMA Datavision in London. That's down from a high of $1.35 million at the end of 2005.

Not all analysts were impressed, however. Citigroup's Jon Rogers, restated his "sell" rating for GM stock on Thursday.

BNP's Rubin said he was dismayed at GM's approach to negotiations this year with the United Auto Workers union. Executives said not to expect deep job cuts, and that savings in the next contract may be less than what GM gained in recent labor talks.

GM's contract with the UAW ends in September, along with contracts between the union and Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.

"They tried to downplay the seriousness of all of it and basically said it is no different that any other year," he said. "I don't agree with that."

GM will post its fourth-quarter results at the end of the month. Analysts polled by Thompson First Call said they're expecting a profit of $1.14 a share on revenue of $42.5 billion. GM shares closed Thursday up 25 cents at $30.86.

You can reach Sharon Terlep at (313) 223-4686 or sterlep@detnews.com.

© Copyright 2007 The Detroit News. All rights reserved.

GM's 2007 goals

Increase capital spending from less than $8 billion to between $8.5 billion and $9 billion.

Further reduce operating costs.

Address health care/retiree costs and reach a new labor agreement with the UAW.

Cut back on incentives and fleet sales and maintain high transaction prices on vehicles.

Cadillac, Chevy, Saturn power GM

Saturday, January 13, 2007
General Motors Corp.
Cadillac, Chevy, Saturn power GM
Paul and Anita Lienart / Special to The Detroit News

Much of the buzz at General Motors Corp. this year will be shared by Cadillac, Chevrolet and Saturn, although Buick hopes some of the luster will rub off on it, too.

GM is resting its hopes on redesigned editions of the Cadillac CTS and Chevrolet Malibu that take both models toward new horizons for model year 2008. Likewise, Saturn continues to broaden its product portfolio as the brand attempts to resurrect its lackluster image.

Hands-down the sexiest GM entry at the show: the Chevrolet Camaro Convertible.


Cadillac's redesigned entry-level sedan is making its world debut at the North American International Auto Show. The compact four-door gets new styling inside and out, with softer exterior lines and a stunning new cockpit, as well as substantial mechanical upgrades. The '08 CTS is scheduled to reach U.S. showrooms in late summer, with worldwide exports to follow in the fall.


Chevrolet's Camaro convertible, painted in a retro Hugger Orange pearl tri-coat with twin gunmetal gray sport stripes, hews closely to last year's Camaro concept. The Camaro convertible shares exterior dimensions with the Camaro concept, although GM noted that the convertible's windshield surround is changed slightly to fit the convertible top. Design cues include a tonneau cover over the folded top, a rear spoiler, racing-inspired fuel-filler door, front-inlet hood scoop and rear fender "gills."


The redesigned 2008 Malibu sedan is longer and wider than its predecessor, with all-new sheet metal and a beautiful new cabin that features an updated version of the GM brand's classic dual cockpit design. For '08, the front-wheel-drive Malibu will get a 6-inch longer wheelbase than the current model. Styling is bolder, with a dual-port grille that GM says represents "the new face of Chevrolet." Four- and six-cylinder models will be available, but the wagon-like Malibu Maxx hatchback has been dropped. The '08 model rolls into dealerships in mid-2007.


GM rolled out its redesigned full-size SUVs nearly a year ago, but the company's biggest gamble rests on the all-new pickups, the 2007 Chevrolet Silverado and GMC Sierra. Like the sport-utes, the big trucks have been extensively overhauled, with new sheet metal, revised cabins, updated suspensions and improved powertrains with better fuel economy. Under the striking new skin are more standard safety features and additional amenities, not to mention more luxurious cabins with higher quality and better materials.


A surprise star of the Detroit show is the Volt, a compact four-door hatchback that boasts sleek styling. But more importantly, it is GM's first plug-in electric vehicle. In addition to the electric motor, the Volt includes a small gasoline engine whose sole purpose is to act as a generator to charge up the car's lithium-ion batteries when the charge drops to 30 percent. You may not see the car hit the streets in exactly this guise, but the plug-in technology could find its way into some future GM production vehicles before the end of the decade.


An all-new entry for Saturn, the Aura sedan took North American Car of the Year honors this week during the North American International Auto Show. Designed to have more European road manners, the Aura comes standard with a 252-horsepower V-6. The styling is clean and uncomplicated and its interior is spacious.


Saturn's redesigned Vue crossover vehicle has been unveiled previously in Europe as the Opel Antara. The Saturn variant will be assembled in Mexico and will go on sale in early summer 2007. Saturn also said it will market Green Line hybrid and Red Line performance editions of the new Vue during the 2008 model year. The base '08 Vue will feature a 164hp 2.4-liter four-cylinder engine equipped with either a five-speed manual or four-speed automatic transmission. Uplevel engine choices include a 215hp 3.5-liter V-6.

© Copyright 2007 The Detroit News. All rights reserved.