Ford's foresight puts carmaker in pole position
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As Chrysler makes its way through bankruptcy
court and General Motors tries to avoid the same fate, Ford is emerging
as the strongest of the "Big Three" automakers.Ford has taken no federal bailout money, but it's pulling ahead of its rivals because of we ll-timed financial planning and a focused and attractive mix of product. The automaker also is profiting from the troubles at GM and Chrysler.
"[Ford's
Chief Executive Alan] Mulally went out and got credit when it was
available, and he has positioned the automaker with a global strategy
using the Fiesta and the Focus," said George Magliano, director of
automotive industry research at IHS Global Insight. "So they have gone
way up the ladder, and of course they look a lot better because they
didn't ask for a bailout."
Ford is pushing ahead with its plan to build small compact modern cars
for the U.S. market. On Wednesday the automaker said it will invest
$550 million to convert its old Michigan Truck Plant into a facility
that will build its next-generation Focus, which expected to roll off
the line next year. The plant will also make a new battery-electric
version of the Focus for the North American market. That vehicle is
expected to debut in 2011.
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Can Marchionne's magic work at Chrysler?
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Fiat chief executive Sergio Marchionne is not
one to shirk a challenge. He made his name as a corporate whiz in June
2004 wh en he stepped in to take the wheel of Italy's then-dying
automaker, driving through a swift and vigorous turnaround that
returned it to profitability by 2006.Now
Marchionne is about to attempt to do the same for Chrysler, the
smallest of Detroit's "Big Three" and North America's most sickly
automaker.
On
Thursday, President Barack Obama said Chrysler will file for Chapter 11
protection in New York after last-ditch rescue talks between its
creditors and the U.S. government collapsed. The move smoothes the way
for an alliance with Italy's Fiat, as it allows the automaker to
restructure its remaining debt and reduce its bloated auto dealer
network.
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Chief says UAW will sell its Chrysler stock
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STERLING HEIGHTS, Mich. - The United Auto
Workers union has no intention of keeping its 55 percent stake in the
new Chrysler and will sell the shares to fund a trust that will take
over retiree health care costs next year, the union's president said
Monday.Speaking
to reporters at a news conference in suburban Detroit, Ron Gettelfinger
said the trust, called a volu ntary employees beneficiary association
(VEBA), will struggle at first. It is starting with $1.5 billion from
an existing company health care trust, and will get $300 million from
the company next year. The total retiree health care obligation is
$10.9 billion for about 82,000 retirees, as well as current workers who
eventually will retire.
While
he said he is confident in the trust's funding, Gettelfinger warned
that the VEBA may need to make additional cuts. Benefits such as dental
and vision coverage already have been cut.
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GM may seek 1-for-100 reverse stock split
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DETROIT - General Motors Corp. said Tuesday it
is planning a reverse stock split that would give shareholders one
share of new stock for every 100 shares they currently own. The
automaker said in a filing with the Securities and Exchange Commission
that the deal would be part of an agreement with the Treasury
Department in which the government would assume at least half of GM's
debt in exchange for company shares.
The filing said both sides are still negotiating the terms of the debt swap.
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Would you buy a car from Chrysler?
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Now that Chrysler has done what was once
unthinkable for Detroit's Big Three carmakers - filing for Chapter 11
bankruptcy reorganization - everyone from President Barack Obama to the
automaker's own public relations department  has tried to assure car
owners and would-be buyers that the company is going to continue
operating and that its warranties are safe. But the question for consumers is, should I buy a Chrysler now? And how about one of those Fiats I hear are coming to America?
Consumers
can be spooked by the idea of buying from a bankrupt company; many
equate bankruptcy with "closing the doors." Car-buying site Cars.com
says 21 percent of consumers it polled said a bankruptcy would affect
their decision on which company they would buy a car from.
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Thrill is gone - GM's Pontiac bites the dust
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The party is finally over at General Motors' "We Build Excitement" division, Pontiac. The
company said Monday it will discontinue the brand a s part of its
consolidation effort, letting it slim down its payroll and concentrate
resources on its remaining, strategically more important brands:
Chevrolet, Buick, Cadillac and GMC trucks.
"Pontiac
was one of America's greatest car brands with an illustrious history,"
lamented industry commentator Peter DeLorenzo, who runs the
Autoextremist.com b log and once worked for Pontiac's marketing
department.
"It is a shame what happened to it. When they
ran themselves off the rails, they forgot what Pontiac was all about
and decided it would become another rebadged division within the
corporate hierarchy," he said.It is an ignominious end for a brand whose products fired the imagination of enthusiasts of traditional American muscle cars.
The
company started as just another of the myriad of carmakers in Michigan
in 1907, in the form of Oakland Motor Car company. General Motors
founder William Durant acquired Oakland in 1909 to be a part of  the new
automotive giant,
according to Pontiac spokesman Jim Hopson.
By
1926, GM management concluded that the company's vaunted "stepping
stone" business model had a step missing between its entry-level
Chevrolet brand and the more aspirational Oldsmobile brand, so Oakl and
added Pontiac models to fill that gap. Later, the Oakland name was
dropped entirely in favor of Pontiac, the city where the company was
based, which was in turn named after the famous Indian chief.
Through
the '50s, Pontiac remained an unremarkable brand for people who
couldn't afford Oldsmobiles. But in 1959 the company launched the "wide
track" Bonneville, with the claim that its width provided a handling
advantage, and public perception began to shift.
In
the early 1960s, U.S. carmakers decided that they would not compete
against one another in racing, and they further decided to avoid
emphasis on performance. Predictably, this gentlemen's agreement broke
down, both because of decisions at other companies and  because it was
ignored within the company.
Like
today's computer engineers and software coders putting in overtime on
side projects, in the 1960s General Motors engineers spent their
weekends at the company's proving grounds building and testing new
ideas. One outcome was the installation of the company's big 389 cubic
inch V8 from its full-size Bonneville into a lighter intermediate sized
LeMans/Tempest body.
They returned to Detroit with 5,000 orders in hand and went to the
board of directors seeking permission to build what would become the
legendary GTO. When the board observed that such a car was against the
rules, the team asked, "What should we do with these 5,000 orders?"
explained Hopson. With orders in hand, the board relented and Pontiac's
most revered model was born.
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Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome.
Booker T. Washington
Sincerely,
Frank Kimbrough
Franks Automobile Shipping & Transport
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