Buying Domestic...does it matter anymore?

[edluva]

While Toyota and others waste their energy on hybrids, American innovation continues...

GM Hopes $1.99-a-Gallon Gas Offer Moves Its Fuel Guzzlers
By John O'Dell, Times Staff Writer
May 29, 2006

Here's a way to boost fuel economy: Buy one of General Motors Corp.'s gas guzzlers and fuel will cost only $1.99 a gallon for the next year.

On Wednesday the automaker unveiled the promotion for California residents in hopes of moving some of the vehicles off dealers' lots. Four of the 11 eligible models are passenger cars; the rest are big trucks.

With California's gasoline prices the highest of any state except Hawaii, GM is betting the promotion will catch on.

The automaker will issue monthly prepaid debit cards to reimburse eligible customers the difference between $1.99 a gallon and the average price of premium gasoline in California — determined by AAA's monthly survey — even if they use cheaper regular.

The program covers purchases and leases through July 5 and is being offered on top of any other incentives and rebates on the selected vehicles.

There are no limits on mileage or gasoline price, and customers can use the debit cards for anything they want, said Susan Docherty, GM's Western regional manager. "We think we're going to sell some cars with this," she said, citing early reports of increased showroom traffic.

For a Hummer H2 driven 15,000 miles a year, a buyer would receive an estimated refund of $2,270 over the 12 months, according to a GM website, at http://www.fuelprotection.com .

GM offers a similar program in Florida, but only for cars.

Eligible vehicles in California include the 2006 and '07 models of the Chevrolet Tahoe and GMC Yukon and the half-ton-capacity Chevy Suburban and GMC Yukon XL, all rated at 14 mpg and 20 mpg. Also on the list: 2006 models of the Hummer H2 and H3 and the Cadillac SRX crossover wagon.

Before the promotion, it took Hummer dealers an average of 145 days to sell an H2, which has a $53,000 sticker price; the smaller H3 models lasted an average of 136 days and the GMC Yukon XL took 111 days.

The only eligible GM cars are the '06 Chevrolet Monte Carlo coupe and the Chevy Impala, Pontiac Grand Prix and Buick Lucerne sedans. For a V-6 Lucerne, rated at 20 mpg city and 30 mpg highway, GM's website said Sunday that the potential rebate over 12 months would total $1,314.

Buyers have to take vehicles equipped with GM's OnStar communications system and a special remote diagnostic program for computing use.

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From: http://www.nytimes.com/2006/06/03/bu...pagewanted=all
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On Route of Chevrolet Impala, Signposts to Detroit's Decline

By MICHELINE MAYNARD
Published: June 3, 2006
DETROIT, June 2 — To understand why Detroit is having so much trouble competing against Asian car companies, look no further than the Chevrolet Impala.

In the 1960's, the Impala was king of the road. General Motors sold more than a million of them in 1965. Now the Impala is still the best-selling American car, but it is selling less than a third of that total.

The Impala also lags behind four Japanese offerings — the Toyota Camry and Corolla, and the Honda Accord and Civic — in the annual race to be the best-selling car in America.

But Chevrolet, by its own admission, has no plans to try to win back the bragging rights anytime soon.

The reason is that G.M. prefers to stick with its decades-old approach of breadth over depth, buckshot over a silver bullet. So rather than placing an all-or-nothing bet on a single car at one division, it sells family cars through a variety of brands, including Chevrolet, Buick, Pontiac and Saturn.

"We're able to get at more people because we've got locations that sell all these vehicles," said Chevrolet's general manager, Edward J. Peper Jr.

That idea served G.M. well when it sold more than half of all new cars and trucks back in the 1960's. But now G.M. controls less than a quarter of American sales.

And in today's ruthlessly competitive market, that strategy means that no single G.M. car will get the same amount of resources — engineering, design and marketing — as Toyota and Honda devote to their best sellers.

The Impala "comes across as the best that the American companies can do," said Brian Moody, a road test editor at Edmunds. com, a Web site that offers buying advice to consumers. "In a vacuum, it's hard to find anything wrong with it. And then you drive the Camry and the Accord."

The strength of those two cars is a reason Asian auto companies took a record 40 percent of the American market in May, when Detroit's market share fell to its second-lowest level in history, less than 53 percent.

To be sure, G.M. and Ford vastly outsell their Japanese competitors in pickup trucks and sport utility vehicles: the two markets where they have put most of their resources for the last decade and a half.

Moreover, G.M. executives say they are thrilled with the newest version of the Impala, which went on sale last year to good reviews and initially high quality ratings. And while sales at G.M. have dropped 8 percent this year, Impala sales are up 6.4 percent this year over 2005.

Impala can go head to head with Japanese cars in several ways, and price is among them. Like them, Impala sells for about $20,000 to $27,000. The Accord, Camry and Impala are on the list of recommended vehicles of Consumer Reports. And the Impala, like the Camry and Accord, has loyal buyers: some 45 percent of its buyers come back for a second one, according to Chevrolet.

The similarities largely end there, however, and the differences among the cars are marked. The main one is Impala's place in the G.M. lineup. It is part of a flock of family sedans at the automaker. In fact, it is not even the only family car at Chevrolet, which also sells the Malibu.

By contrast, Camry is Toyota's brightest star. Camry is "the center of the target," said James Press, who was recently named president of Toyota Motor North America.

Getting the latest Camry ready for its introduction this April was akin to a space launching for Toyota, which is building Camrys in eight markets around the world, including China, where production began last week.

It corralled engineers from the United States and Japan, and manufacturing experts from all the places it builds Camrys. They worked on ways to improve the car up to the time it started rolling off the assembly line.

The last American company to focus that kind of effort on a family car was Ford, which famously put together a team in the 1980's to develop the Taurus. Even back then, the goal was to beat the Accord and the Camry, and they did so, taking the best-selling title for a number of years until 1997, when Camry captured it. It has ceded the title only once since, to Accord.

Toyota's win coincided with Ford's shift of resources to focus on pickups and S.U.V.'s. Even though Ford now has its own flock of family cars, including the Ford Fusion, it does not plan to build enough of any one model to fight Camry and Accord.

Nor does Chevrolet. In 2006, it expects to make about 275,000 Impalas at a plant in Oshawa, Ontario, the only one where the Impala is built.

That leaves it well shy of Toyota, which sold more than 400,000 Camrys in 2005. For the American market, Toyota builds Camrys in Georgetown, Ky., and it imports more from Japan and soon will be able to build another 100,000 a year when it begins production in 2007 at Subaru's plant in Lafayette, Ind. Toyota holds a stake in Subaru's parent company.

With more than two million Camrys on the road, the name "has become almost a household word," said Tom Libby, an industry analyst with J. D. Power & Associates.

Yet, the Impala was an even bigger household name back when Toyota was barely a blip on the radar. Since 1958, the year after Toyota first sold cars here, Chevrolet has sold more than 14 million Impalas, making it one of the most recognizable cars in automotive history.

But unlike Camry, which has been sold continuously in the United States since 1982, always aimed at the family market, G.M. stopped selling the Impala for two stretches in the 1980's and 1990's. From its roots as a fast, chrome-laden car with six taillights, the Impala grew in size, then shrank and, in the eyes of critics, became generic.

Like many other G.M. models, it is sold to rental car companies, government agencies and corporations, markets where Toyota generally does much less business. The Impala is also a police car, bought by, among others, the New York Police Department. About 20 percent of the Impalas go to so-called fleet sales, down from almost half last year (about 10 percent of Camrys are sold to fleets).

Chevrolet is trying to veer away from the bulk sales and sell more to consumers. One goal with the new Impala, said its marketing manager, Mark A. Clawson, is to put features on the car that Toyota does not offer.

For example, the top-of-the-line SS version can go from 0 to 60 miles per hour in 5.7 seconds, thanks to a zippy V-8 engine with 303 horsepower.

Camry does not offer a V-8, but it has options Impala does not — namely, a manual transmission and four-cylinder engine, both available on its basic and midlevel cars. With gas prices staying high, both those features increasingly are in demand as buyers switch from bigger vehicles, especially S.U.V.'s, to cars.

But buyers who like the roominess of an S.U.V. may be pleased with another Impala feature. Inside the Impala SS, there are fold-flat rear seats, like those in minivans and S.U.V.'s, creating a vast storage space that most sedans cannot match. There are other options, too, like a jack for an MP3 player, a Bose stereo system and satellite radio.

On the outside, Impala looks conservative — a criticism that used to be leveled at Camry before its latest redesign, which created a curvy car with a light, nimble feel.

Unlike Toyota, which was aiming this time out for a more eye-catching car, Chevrolet deliberately tried not to make a style statement with Impala, Mr. Clawson said.

"We weren't looking for a vehicle that would turn heads, but we weren't looking for one that would turn heads away either," Mr. Clawson said. "We were looking for a balance," a car that was "nicely styled but not ostentatious."

That approach, Mr. Moody of Edmunds.com said, seemed reasonable given the relatively bland appearance of the previous Camry and Accord models. But it now seems unwise given what Toyota has done with the latest Camry, which "so far exceeds the previous car that it almost seems like it's not a Camry," he said, but rather a Lexus luxury car. The Accord, already more eye-catching, gets another face-lift this fall.

Chevrolet has put more emphasis this year on marketing its new S.U.V.'s, especially the Chevrolet Tahoe, and its new line of pickup trucks. It is only now beginning to promote cars like the Impala that it maintains get better fuel economy than its Japanese rivals.

"The American companies spent so much time focusing on trucks and S.U.V.'s that they neglected their cars," Mr. Moody said. "Now they're just playing catch-up."

Even so, Chevrolet dealers, for their part, seem happy with the Impala. Sales of the latest version are up 20 percent at Genoa Chevrolet outside Toledo, Ohio, said Mike Pauley, the dealership's executive manager.

In past years, many of Mr. Pauley's customers chose the Impala largely because of G.M.'s deep discounts, or because they wanted an American-made sedan. But the new version, which carries a modest $500 rebate, has attracted buyers more on its own merits, he said.

One recent customer was Gary McKeel, a retired salesman from Perrysburg, Ohio, who switched to the Impala after owning Buicks for the last 17 years. "It's spacious and it rides very nice," Mr. McKeel said.

But down the road, Impala may not be such a great deal. According to Edmunds.com, a typical Impala owner will spend 11.3 percent more, or about $4,300, on the car over five years than the owner of a typical Camry, mainly because the car loses its value faster and has higher repair costs. That figure takes into account the $500 rebate that Chevrolet is offering on Impala versus none on the Camry.

Mr. Libby of J. D. Power said he did not rule out Detroit's taking the car crown again. This Impala will not be the one, however, he said. Impala "has not had the strength, it has not had the equity of the Camry," he said.

Getting the title back will require another companywide effort like Ford made 20 years ago — the kind that Toyota and Honda routinely make when they introduce new versions of their bread-and-butter cars.

"To me, it's a step-by-step process," Mr. Libby said. "There are no shortcuts."

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From: http://www.buffalonews.com/editorial...02/1051415.asp
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U.S. automakers narrow productivity gap with Japanese

GM engine plant, Ford stamping plant here both improve, annual study finds

By SARAH KARUSH
Associated Press
6/2/2006

DETROIT - U.S. automakers continued to narrow the productivity gap between them and Japanese manufacturers last year, with DaimlerChrysler AG's Chrysler Group making the biggest strides, the authors of a closely watched study said Thursday.
The Harbour Report, first published in 1989, measures productivity at assembly, stamping and engine and transmission plants. It calculates the number of hours worked by salaried and hourly employees at a plant and divides that by the number of units produced.

It said that General Motors Corp.'s Town of Tonawanda engine plant improved, averaging 3.42 hours to make an engine in 2005 versus 3.51 hours the year before.

Ford Motor Co.'s Buffalo Stamping Plant in Woodlawn also improved its performance, stamping 685 parts per hour compared to 674 the year before. The figure placed the plant "about the middle of the pack" among stamping plants, according to Greg Gardner of Harbour Consulting, which compiles the annual study.

Overall, the report put Nissan Motor Co. in the lead with average labor of 28.5 hours per vehicle. Ford was last at 35.8 hours.

Nissan's productivity figure compares with 29.4 hours in 2004 and does not include its plants in Mexico, which do not participate in the voluntary data-sharing on which the report depends.

Ron Harbour, president of Harbour Consulting, said Nissan's productivity lead amounts to a cost advantage of $300 to $450 per vehicle over less productive manufacturers.

The domestic Big Three have been steadily catching up to Japanese automakers. The difference between the most productive and the least productive narrowed to 7.3 hours in 2005 from 9.1 hours in 2004 and 16.6 hours in 1998.

Recent improvements in productivity have come largely from improvements in quality, Harbour said at the report's presentation in Detroit.

"We live in a world where we think quality costs more, and that's completely backwards," he said.

Because quality is up, plants are spending far less time repairing vehicles when they come off the line, he said.

Although the three major Japanese manufacturers stayed on top, two of them saw productivity fall.

Toyota Motor Corp., which took first place in 2004 at 27.9 hours, came in second in 2005 at 29.4 hours. Honda Motor Co.'s third-place score of 32.5 hours was half an hour more than last year's.

General Motors Corp. was close behind Honda at 33.2 hours, followed by Chrysler at 33.7 hours.

Chrysler improved 6 percent over its 2004 average of 35.8 hours, the biggest move of the six automakers.

Among assembly plants, the Ford facility in Hapeville, Ga., outside Atlanta, stood out with 15.4 hours per vehicle. The plant, which makes the Taurus, is one of seven Ford announced it is closing by 2008 as part of its restructuring.

"When you evaluate closing or retaining a plant, there's hundreds of criteria," Harbour said. "Productivity is only one of them - certainly an important one, but it's not the only one."

The plant's distance from major supply routes was likely a key factor, he said.

The No. 2 assembly plant for productivity, GM's in Oshawa, Ont., also is scheduled for closure.

Harbour noted that GM and Ford made productivity gains even as they cut their volumes, something that historically is difficult to do.

Despite the narrowing productivity gap, the automakers remain far apart by other measures, the study's authors noted. Capacity utilization ranged from 106 percent at Toyota's assembly plants to 79 percent at Ford's.

Another big difference is profitability. Nissan, Toyota and Honda each earned more than $1,200 before taxes on every vehicle they sold in North America in 2005, according to the study.

In contrast, Chrysler Group earned $223, while Ford lost $590 and GM lost $2,496 on each vehicle. This reflects differences in health care and pension costs, as well as rebates and low-interest financing used to cut inventories, the report said.

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From: http://www.washingtonpost.com/wp-dyn...000454_pf.html
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Global Partners Possible For GM
Kerkorian Urges Alliance With Nissan, Renault
By Sholnn Freeman
Washington Post Staff Writer
Saturday, July 1, 2006; D01

Billionaire investor Kirk Kerkorian yesterday pushed General Motors Corp. to explore a partnership with Nissan Motor Co. and Renault SA, both of which are led by turnaround expert Carlos Ghosn.

In an extraordinary series of events set into motion by Kerkorian, whose investment company owns 9.9 percent of GM's shares, the Detroit automaker's board and management are being pressed to join a global alliance with Nissan and Renault. Under a partnership already in place, Renault holds a 44 percent stake in Nissan, while Nissan owns 15 percent of Renault's shares.

In a letter to GM chairman and chief executive Rick Wagoner, Tracinda Corp., Kerkorian's investment firm, said Nissan and Renault were open to buying significant stakes in GM. In a separate letter, Tracinda notified Ghosn and Renault Chairman Louis Schweitzer that Tracinda has asked GM to form a committee to explore a potential alliance.

Nissan also called on GM's board of directors to study the deal. "At this point, it is necessary that the GM board and top management fully support this project in order to start the study of this opportunity after agreement of Renault and Nissan boards," Nissan said in a statement.

Nissan said Ghosn was approached by Kerkorian and Jerome B. York, a GM board member and Kerkorian adviser, to assess the merits of GM joining the partnership.

GM said it had not received an offer or proposal from Renault or Nissan. But GM said its board will consider Tracinda's request to form a committee to study the proposal.

GM shares rose $2.34, or 8.6 percent, to $29.79, a level they had not reached since October. Financial analysts said Nissan's interest was an affirmation that GM shares were undervalued.

Under the partnership between Renault and Nissan, the two automakers operate as stand-alone companies, but Ghosn is president and chief executive of both. Ghosn is credited with rescuing and rebuilding Nissan after it ran into trouble in the late 1990s. As it has returned to financial health, Nissan has been particularly aggressive in the United States, where its new products have added to pressure that Detroit automakers were already getting from other Asian automakers, particularly Honda Motor Co. and Toyota Motor Corp.

GM is restructuring after years of losing U.S. market share to rivals like Nissan. The loss of market share in its home turf has led to the loss of tens of thousands of high-paying U.S. auto jobs and the closing of assembly plants around the country. GM lost $10.6 billion last year, although results have improved this year.

Analysts said they doubted that either side is planning to rush into a major collaboration. Wagoner was severely criticized for focusing GM on a global alliance strategy of partial investments in auto companies around the world. Those stakes were sold when GM's financial situation collapsed last year. Wagoner has claimed successes in his turnaround plan at GM, but he has acknowledged that the company still has a lot of work to do.

Ghosn also has a full plate. Quality has slipped as Nissan steadily expands production and brings out new models.

Tracinda owns 56 million shares of GM stock, which accounts for 9.9 percent of the company. Kerkorian is GM's largest individual shareholder. He began amassing a stake in the company last year. Since then, his adviser, York, was added to the GM board and has criticized the company for the sluggish pace of its turnaround.

David Healy, auto analyst at Burnham Securities Inc., said Kerkorian might be trying to scare off short-sellers, who are betting that GM's stock will drop, by making moves to shore up GM's share price. He said he doubted that the back and forth between GM and Kerkorian could lead to Ghosn's installation in the top job at GM.

"I think it would have absolutely no management affect," Healy said. "GM and Nissan are bitter enemies. Nissan has been eating GM alive for years. Nissan is one of three reasons that GM's market share and profitability has collapsed in the last three years, the others being Toyota and Honda."

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From: http://www.moneyweb.co.za/shares/int...ews/649701.htm
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GM-Renault-Nissan wouldn't be easy, past auto pacts show
Neal E. Boudette, Norihiko Shirouzu and Stephen Power, Wall Street Journal
Posted: Mon, 03 Jul 2006 08:08

Before General Motors Corp., Renault SA and Nissan Motor Corp. start any discussions about a three-way alliance, they might want to ask DaimlerChrysler AG about the rocky road it has traveled since its own grand automotive merger.

The German-American auto maker once promised to become the world's most profitable car company, but instead has gotten bogged down by infighting, profit breakdowns at its Chrysler and Mercedes divisions and unexpected difficulties realizing synergies. The chief executive who engineered the deal, Jürgen Schrempp, stepped down after he was berated by angry shareholders. Today, DaimlerChrysler's market value is about $42 billion less than in the heady days after its marriage was announced.

"It is pretty tough getting an organization to go in a direction it doesn't want to go in voluntarily," Dieter Zetsche, who succeeded Mr. Schrempp on Jan. 1, said in an interview on Saturday. Seven years after its merger, the company is still trying to deliver "some of the major benefits" of the deal, Mr. Zetsche said.

DaimlerChrysler's experience doesn't bode well if GM decides to pursue the suggestion of its largest shareholder, Kirk Kerkorian, to open discussions about joining the existing Renault-Nissan partnership. The idea was proposed Friday in a letter from Mr. Kerkorian's investment company, Tracinda Corp., to GM Chairman and Chief Executive G. Richard Wagoner Jr. GM's board has said it would consider the idea. Carlos Ghosn, the CEO of both Renault and Nissan, has discussed the matter with Mr. Kerkorian and is willing to talk to GM, according to a statement by Renault and Nissan.

Any three-way alliance could mean the departure of Mr. Wagoner, who has been implementing his own plan to turn around GM, and leave Mr. Ghosn overseeing the three companies. Mr. Ghosn is hailed for pulling back Nissan from the brink of collapse in 1999 and turning it into one of the world's most profitable car makers.

The auto industry, however, is rife with ambitious mergers and alliances that have gone awry. Last year, GM had to pay $2 billion to get out of a 2000 alliance with Italy's Fiat SpA after the Italian auto maker's finances and market share began to collapse. In the 1990s, BMW AG lost billions after buying Britain's Rover. DaimlerChrysler even tried a three-way partnership of its own, bringing in Mitsubishi Motors Corp., but unraveled the tie-up last year.

Mr. Ghosn's initial thinking about a GM-Renault-Nissan partnership is centered on the potential costs reductions, people familiar with the matter said. He suspects the three companies together could reap substantial potential savings if they were to cooperate on engineering; share basic underpinnings, or "platforms," of vehicles; and consolidate their manufacturing operations, these people said.

A Renault spokeswoman said yesterday the company had no additional comment beyond its statement Friday that it is "open" to an alliance with GM. The company declined to make Mr. Ghosn available for an interview.

Born in Brazil to Lebanese parents and educated in France, Mr. Ghosn took the reins at Nissan in 1999 when it was losing money and had net debt of 1.4 trillion yen ($12.2 billion at current exchange rates). Renault paid $5.4 billion for a 37% stake in Nissan and took over management control. Mr. Ghosn slashed costs by shuttering assembly plants and reducing headcounts, by dissolving many of the company's long-standing ties with some 1,400 companies, many of them parts suppliers and dealers in which Nissan held sizable equity stakes, and by asking parts makers to help reduce Nissan's purchasing costs by 20%. Mr. Ghosn used those costs savings and proceeds from the sale of stakes in companies to pare the massive debt Nissan was carrying at the time.

He also invested in new, boldly styled vehicles like the Nissan Murano sport-utility vehicle and Infiniti G35 sports car, which buffed the company's tarnished image. For the fiscal year that ended in March, Nissan earned net income of 518.1 billion yen, although sales have sagged in the critical U.S. market so far in 2006. In February, Mr. Ghosn, by then also chief executive of Renault, outlined a restructuring plan to improve the French auto maker's profitability.

Part of the effort relies on having Renault and Nissan share the cost of developing engines, transmissions and platforms. Extending that effort to include GM would be complicated. The world's largest auto maker by sales has significant excess manufacturing capacity, several poorly performing brands and a product line heavy with trucks while consumer tastes have been moving to more fuel-efficient vehicles. GM is also weighed down by pensions and health care for tens of thousands of union retirees. Mr. Wagoner last week announced a buyout program would enable GM to shed 35,000, or about 30%, of its hourly workers by year end, some two years sooner than it had previously expected.

Any effort to have GM, Renault and Nissan develop components and vehicles together could take years, judging by DaimlerChrysler's track record. "The consultants always tell you there are all kinds of synergies," Mr. Zetsche said. The first years of DaimlerChrysler's merger was marked by deep suspicion on both sides of the Atlantic. Mercedes engineers guarded their technology and saw little to gain by sharing it with Chrysler, which quickly stumbled to massive losses.

Relations only began to thaw when Mr. Zetsche, a veteran Mercedes manager, was sent to fix Chrysler in 2000. Chrysler used Mercedes expertise in rear-wheel-drive vehicles to develop the 300 sedan, which became a hot seller. But broader efforts to share parts and cooperate moved more slowly. DaimlerChrysler is just getting past some of those issues now, Mr. Zetsche said.

One challenge for auto makers is the six-year life cycle of their products. Getting two companies on the same cadence often forces one to make a financial sacrifice. Either one side shortens its cycle and writes off some of its investment, or the other lengthens its cycle and must go a year or two with older models in the market.

For GM, Renault and Nissan, another crucial task of making a partnership work would be ensuring employees and top management are completely committed to the idea.

At Nissan, Mr. Ghosn enforced unity by declaring he and the rest of management would resign if the company failed to return to profitability by the end of the year ended March 2001 -- the first year of Mr. Ghosn's three-year turnaround plan for Nissan.

But uniting two separate organizations is a greater challenge. DaimlerChrysler had difficulties on this point. Mr. Schrempp delegated the task of pushing cooperation to a Mercedes boss who sought to keep it separate from Chrysler.

Mr. Zetsche said he is seen in the company as a "credible broker" since he has worked at both divisions. Since becoming CEO in January, he has sought to accelerate cooperation. Chrysler and Mercedes may develop a family of six-cylinder engine together, he said.

His task has also been made easier because both units have had crises. "That helps," he said. "You can't afford to fight anymore."

In the rush to realize synergies, DaimlerChrysler sometimes "overlooked the feeling of people," Mr. Zetsche said. "Part of it is psychology." Now the company is through the "deep valley of disappointment and misunderstanding."

[fflint]

Toyota's June sales steamroll U.S. rivals

TAVIA GRANT
Associated Press
http://www.theglobeandmail.com/servl.../Business/home

Toyota Motor Corp., the third-largest auto maker in the United States, Monday reported the best first-half U.S. sales in its 49-year history — offering a stark contrast to reports from the U.S. manufacturers.

Toyota's sales leaped 14.4 per cent in June, juiced by record sales of passenger cars such as Corollas. General Motors Corp.'s sales skidded 25.9 per cent in the same month — after discounts sent sales soaring last year — while DaimlerChrysler AG tumbled 13 per cent. Ford Motor Co.'s sales fell 6.9 per cent.

Toyota, meantime, continues to benefit from a consumer switch to more fuel-efficient cars, said Jim Lentz, Toyota's executive vice-president.

“Fuel-efficient products continue to drive the market, even as consumers are likely becoming acclimated to today's fuel prices,” Mr. Lentz said in a release.

“Buyers are turning to hybrids and smaller, more fuel-efficient vehicles as a hedge against future uncertainty.”

Toyota recorded sharp increases for a range of its vehicles. Corolla sales jumped 38.7 per cent while Lexus sales climbed 6.3 per cent, both of which posted record sales for the month.

In the first six months, Toyota sold 1,223,542 vehicles in the U.S.

The Camry, Camry Solara and Camry Hybrid had the best-ever combined June sales while the Prius gas-electric hybrid posted the best-ever June sales.

Not everyone opted for fuel efficiency, though. Toyota's light truck division rose 7.6 per cent, hitting another sales record for the month. Sales of RAV4 compact sport utility vehicles led the gains, where sales more than doubled.

“Toyota has, on a brand basis, all guns blazing,” said Rebecca Lindland, an analyst at Global Insight Inc. in Lexington, Mass. “It's just in an arena of its own.”

On the same day, U.S. auto makers Ford, GM and DaimlerChrysler reported dwindling sales after incentives sparked a unusual buying bonanza this time last year. For GM and Ford, it was the fifth monthly drop in a row.

Higher gasoline prices, heated competition from Japanese auto makers and slower sales of trucks and sport utility vehicles also contributed to the drop. The Detroit-based companies' market share has taken a hit this year as demand dwindles for trucks and SUVs.

For GM, total car sales slipped 2.3 per cent in the month while truck sales shrank 36.8 per cent. Year-over-year comparisons are, however, skewed because GM posted its strongest sales month in 19 years in June, 2005. That's when GM rolled out an employee pricing offer that touched off a summer price war.

“The Employee Discount for Everyone program and the success of that program was probably a once-in-a-decade home run for the industry and certainly for ourselves,” Paul Ballew, GM's executive director of global market and industry analysis, said on a conference call.

He said the June performance was in line with expectations.

Year to date, GM's sales fell about 12 per cent, including a 13-per-cent drop for trucks and an 10.3-per-cent dip for cars.

At Ford, sales of light trucks fell 14.4 per cent. But the company saw a bright spot in car sales, which rose 7.1 per cent, as demand for new midsize sedans — the Ford Fusion, Mercury Milan and Lincoln Zephyr — remained high.

Sales of truck-based sport utility vehicles have been declining across the industry for four years in a row, but until recently, pickups were relatively immune from the phenomenon, Ford said. However, pickup buyers now appear to be delaying purchases because of the pressure of high fuel costs, said Al Giombetti, president of marketing and sales for Ford, Lincoln and Mercury. In the first half of this year, Ford's car sales are up 5.3 per cent while light truck sales are down 9 per cent.

In a statement, Mr. Giombetti said the increase in car sales is “cause for optimism because it shows we can win in the industry's most competitive segment.”

Honda Motor Co. Ltd.'s sales were flat in June while Nissan Motor Co. stumbled 19 per cent.

[dave_boise]

I drive a domestic right now. A 1988 Ford Taurus, made in Chicago. That said, when time comes to replace it, neither nationality nor nameplate matter to me. It matters to few people I know. Heck my dad, a dyed in the wool Ford guy for decades, narrowed his last car search down to two: Chevy Impala and VW Jetta. He got the Impala because he got a better deal on it.

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From: http://seattlepi.nwsource.com/busine...renault04.html
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Tuesday, July 4, 2006
GM alliance would reshape auto industry
Renault, Nissan consider buying into struggling American carmaker

By MIKE HOUSEHOLDER
THE ASSOCIATED PRESS

DETROIT -- With the recent announcement that foreign competitors Renault SA and Nissan Motor Co. are considering buying a significant stake in General Motors Corp., the hunter has become the hunted.

GM, which not too long ago used its power and size to buy into smaller, less developed companies, now is potentially on the receiving end of such a transaction. If the proposed partnership goes forward, it will reshape the global auto industry and may give struggling GM the aid it needs to revive.

Talk of a three-way alliance already is paying short-term dividends for the Detroit carmaker.

Bank of America auto analyst Ron Tadross on Monday upgraded GM from "sell" to "neutral." And GM shares soared nearly 9 percent on Friday, the day billionaire mogul and major GM shareholder Kirk Kerkorian said Renault and Nissan were interested in including GM in their alliance.

GM's sales figures -- released Monday afternoon -- showed it had sold 25.7 percent fewer vehicles than in June 2005. Year-to-date, GM's sales were down 12.2 percent.

Also on Monday, Nissan and Renault said they had approved opening talks with GM over the potential alliance. Renault owns a 44.4 percent stake in Nissan, which in turn owns a 15 percent stake in the French company, and the French automaker's board voted to negotiate with the U.S. company.

A message seeking comment was left Monday for GM. On Friday, GM said in a statement the Kerkorian request would "be taken under advisement" by its board.

Carlos Ghosn, the chief executive of both Renault and Nissan, has discussed the matter with Kerkorian and is willing to talk to GM, according to a separate statement by Nissan and Renault.

Talk of an alliance comes as GM is moving forward on an extensive turnaround plan designed to improve its poorly performing North American division, which is suffering from declining profits, high labor costs and growing competition from Asian automakers, such as Nissan. GM announced plans last year to close 12 plants by 2008 and recently said 35,000 hourly workers had agreed to retire early or accept a buyout offer.



Nissan was on the brink of bankruptcy when Ghosn was sent by Renault to lead Nissan in 1999. Ghosn engineered a cost-cutting and morale-boosting campaign that revived the automaker. GM's wobbly financial footing coupled with Ghosn's track record as a turnaround specialist has some on Wall Street predicting that a Ghosn-led GM would be a step in the right direction.
Morgan Stanley & Co. analyst Jonathan Steinmetz said Ghosn's record of cost-cutting and product development would provide much-needed help for GM in those areas.

"He is the ultimate agent of change," Steinmetz said. "He did stuff in Tokyo that no one thought could be done."

[SSLL]

From: http://www.freep.com/apps/pbcs.dll/a...607070343/1014
_________________________

Renault should be given more thought as big player

French automaker controls alliance with Nissan

July 7, 2006

BY WILLIAM DIEM
FREE PRESS SPECIAL WRITER

PARIS -- It might be easy for Americans to overlook the significance of Renault SA in the proposed alliance of General Motors Corp., Nissan Motor Co. and the French automaker.
Many Americans haven't given the company much thought since they stopped seeing Le Cars on the road and Renault sold AMC to the then-Chrysler Corp. in the late 1980s.
But while Nissan is a resurgent global player, led by superstar CEO Carlos Ghosn, Renault clearly controls its alliance with Nissan with a 44% stake. Nissan has a 15% stake in Renault, which is mostly symbolic of Nissan's independence.
Renault and Nissan work together only when both sides benefit. Adding GM as a full partner would mean looking for win-win-win areas. Ideas like common engine production, platforms or hybrid development would save money in the future, said Nigel Griffiths, an analyst with Global Insight in London, but "GM needs a quicker fix than that."
A 20% investment in GM by Renault-Nissan, with the 9.9% held by investor Kirk Kerkorian's Tracinda Corp., would give those allies effective leadership of the company as the other big stockholders are unlikely to get into a nasty proxy fight.
But there is no guarantee that Renault-Nissan would stop there.
Ghosn may well aim to double the Renault-Nissan stake later on if GM turns around.
"Below 40%, an alliance is unstable," Ghosn reportedly told analysts in March when Nissan sold its 13% stake in Nissan Diesel Motor Co.
In May, at the Renault annual stockholders meeting, Ghosn said that depressed stock prices made it a good time to invest in another company.
He has been talking about widening the alliance since January's North American International Auto Show in Detroit. When the Dow Jones Newswire asked him about expanding the alliance, he answered, "Why not? We could use the same principles with more players."
The principles are those enumerated in Renault's statement last Friday after the Kerkorian surprise.
"Such an expansion would only be considered by the alliance if it were executed in the full spirit of the alliance, which is founded on trust, transparency, performance and the full respect for individual corporate and brand identity."
Renault Chairman Louis Schweitzer is credited with treating Nissan as a partner, not an acquisition.
That was in contrast to the clear takeovers of Dacia in Romania and Samsung Motors in Korea, which have been folded into Renault as subsidiaries.
While Renault's history provides uncertain clues as to its future strategy, it is clear that the company is no passive investor.
Gerald Meyers, a professor of management at the University of Michigan and the former chairman and chief executive at American Motors, said the fear at GM is that this is the beginning of a takeover.
He said Renault starts out with an alliance and before long, it's running the company.
Renault was a French automaker run by its engineer founder until the end of World War II. France accused Louis Renault of collaborating with the Germans and nationalized the company. (The government still owns 15% of the automaker.)
In the 1960s, Renault made its first overseas deal with American Motors, licensing the right to build the AMC Rambler in its Belgium factory for four years.
Then, in 1982, it bought AMC, only to sell it in 1987 to Chrysler.
"There is nothing in common with Renault's acquisition of AMC and Nissan," said Jean-Michel Prillieux, a consultant with Mavel SA in suburban Paris. "Renault bought 100% of AMC because it wanted to implant itself in North America."
With Nissan, Renault "wanted to establish an alliance of two powerful groups in parallel, one strong in Asia and the other strong in Europe."
Ghosn's strategy with GM, said Philippe Houchois, an automotive analyst at JP Morgan in London, is probably more oriented to Europe and China than North America.
In China, said Houchois, GM's partner SAIC has a better future than Dongfeng, Nissan's partner.
In Europe, he said, Renault would like to run Opel, GM's main European brand, because today "Renault has an extreme dependence on one brand. With two brands, it could operate like Peugeot Citroen and smooth out the cycles of the business, introducing the" Renault "Megane and" Opel "Astra several years apart."
An investment could pay off even if GM goes bankrupt in North America because Renault would be in a position to buy up the parts that will help it the most. And if GM recovers, the investment means more dividends for Renault.
"Given the level of risk, Kerkorian and Renault can run the show without the liability if something goes wrong," Houchois said. "And if the risk goes down, Ghosn will increase his investment."

[SSLL]

From: http://au.news.yahoo.com//060707/19/zozr.html
_____________________________

Saturday July 8, 05:34 AM
GM to enter alliance talks with Renault-Nissan

DETROIT, United States (AFP) - General Motors will enter "exploratory discussions" with Renault-Nissan on a potential alliance, the US automaker said following a board meeting.
GM cautioned the discussions were preliminary and non-binding and that implementing its massive restructuring program remained the automaker's "top priority."

French car maker Renault welcomed GM's decision to discuss the possible alliance first proposed last week by the US automaker's largest private shareholder, Kirk Kerkorian's Tracinda Corp.

"Following GM's board decision, we look forward to starting the discussion process soon," Renault said in a statement issued in Paris.

GM chief executive officer Rick Wagoner will lead the discussions and has already arranged to meet with Carlos Ghosn, the chief executive officer of Renault-Nissan, the American automaker said.

"We periodically receive interesting proposals and we owe it to the company and its shareholders to explore how they might work, and to objectively weigh the potential benefits and issues that each might present," Wagoner said in a statement.

"That is exactly what we recommended to the GM board in this specific case, and exactly what it has agreed we should do."

Wagoner said he contacted Ghosn when the alliance was suggested last Friday.

Renault said on Monday that it was ready to hold talks with GM to form a possible alliance between the companies "if General Motors makes the proposal".

But reports have circulated in Detroit that Wagoner and other GM top executives are opposed to the idea of a merger, despite the interest expressed by Renault-Nissan and the warm welcome issued by the stock market.

Some GM executives said privately this week that an alliance with Renault-Nissan may not be the best solution to the problems of either company.

In the past, GM has tried other alliances, notably with Fiat, and they have ended in failure. Even Jerry York, Kerkorian's principle automotive adviser, has been critical of the alliance strategy in the past.

Hints of caution were evident in Wagoner's statement.

"Given the complexity of any potential relationship, it has to be carefully considered on its merits before coming to any conclusion. We are committed to an objective and thorough review of that potential," he said.

"We will enter into discussions with the managements of Renault and Nissan with an open mind -- eager to hear their ideas of how an alliance between our companies might work to our mutual benefit."

While news of the potential alliance has given GM shares a massive boost this week, some analysts said it may not result in long-term gains.

Dennis Virag, head of the Automotive Consulting Group in Ann Arbor, Michigan, said GM's decision to study the proposal was prudent.

"They have a fiduciary duty to look at the proposal," he told AFP. "But in the end I don't see those two getting together. They're both troubled companies in the way. They both have significant internal problems they have to address before they take on outside issues."

General Motors remains focused on implementing a massive restructuring program that involves the shuttering of 12 plants and the elimination of 30,000 jobs.

Wagoner is battling to restructure the US car giant following its loss of 10.6 billion dollars last year.

So far, the plan is ahead of schedule as 35,000 union members have accepted early retirement packages, but GM continues to struggle with weak sales and a declining market share in its home market.

In the first six months of 2006, GM saw its sales fall by 12 percent while rival Toyota saw sales increase 9.8 percent.

Wagoner said the automaker has "made tremendous progress in implementing all the key initiatives."

But he cautioned that there are some "major items" that need to be resolved, including the restructuring of former subsidiary Delphi Corp and the sale of GM's lending arm, GMAC.

"So there's plenty more work to do to return our North American operations to sustained profitability. We remain focused on achieving this as quickly as possible," he said.

Wagoner's plan received strong support from the board.

"The board continues to fully support the company's North American turnaround strategy, and we encourage management to also continue its efforts to conclude a satisfactory resolution of the issues associated with the Delphi bankruptcy and to complete the pending GMAC transaction," said GM Director George Fisher.

[SSLL]

From: http://www.mercurynews.com/mld/mercu...s/14995721.htm
__________________________________

Posted on Sat, Jul. 08, 2006
GM's talk of alliance stirs political concerns
KEN THOMAS
Associated Press
WASHINGTON - General Motors Corp.'s talks over a potential alliance with two foreign automakers have Michigan political leaders talking. But the opening stages have left more questions than answers in a state with a struggling economy.

State and federal officials are cautiously assessing the potential GM alliance with Nissan Motor Co. and Renault SA and what it could mean for Michigan, where tens of thousands of workers are employed by GM.

GM's board on Friday authorized the world's largest automaker to begin assessing the potential benefits of an alliance, an initial step in a process that could take several months. The two foreign automakers have expressed interest in minority stakes that could mutually benefit the companies.

But with the state's economy sputtering and one of the nation's highest unemployment rates, the moves have created some unease in Michigan.

"I don't necessarily always believe that bigger is better and so we have to look at it very carefully. The bottom line is I'm the governor of Michigan, I want Michigan jobs to stay here," Gov. Jennifer Granholm said last week.

"If a partnership occurs with a company in another country, well that company is welcome to come to Michigan but I'm not interested in seeing Michigan jobs going somewhere else," she said.

Rep. John Dingell, D-Dearborn, long a champion of the auto industry in Congress, said too many questions remain to properly assess the potential impact of an alliance.

"Even experts in the industry will tell you you have to wait and see," Dingell said.

Dingell and other lawmakers said it would be difficult to predict how the discussions would be received in Congress, which was in recess last week. Opposition was stiff in Congress last spring against a now-abandoned Dubai ports deal.

During a news conference Friday in Chicago, President Bush was asked about his views of foreign-owned companies buying out U.S. technology companies, including those with military contracts.

Bush said: "On the broader scale, I have no problem with foreign capital buying U.S. companies; nor do I have a problem with U.S. companies buying foreign companies. That's what free trade is all about."

The auto industry is Michigan's largest employer and GM has long led the way, employing nearly 80,000 workers in Michigan through the end of last year. GM, Ford Motor Co., DaimlerChrysler AG's Chrysler Group and Delphi Corp. employed a combined 192,430 hourly and salaried workers in Michigan in December 2005, according to the Michigan Economic Development Corp.

David Cole, president of the Ann Arbor-based Center for Automotive Research, said that while the discussions are in their infancy, he did not see an alliance hurting the state. It could turn out more beneficial for GM than the other automakers.

"GM is at the threshold of a major turnaround and potentially, Renault and Nissan need GM more than vice versa," Cole said. He stressed that whatever makes GM stronger - alliance or no alliance - was the best deal for Michigan.

Detroit-based GM has been trying to reduce its size. The company recently announced that 35,000 hourly workers will retire or take buyouts, a move that will help it shutter a dozen plants by 2008.

The automaker has also negotiated health care concessions from the United Auto Workers union while working to resolve cost problems at Delphi, GM's largest parts supplier that the automaker spun off into a separate company in 1999. Delphi filed for Chapter 11 bankruptcy protection in October.

Rep. Joe Knollenberg, an Oakland County Republican who represents many Delphi workers, said he was concerned by the speed of the talks - investor Kirk Kerkorian first approached GM about the alliance over a week ago - and worried it could hinder a resolution for Delphi.

"A number of things are happening that indicate it might take a little more time before we actually solidify and resolve the Delphi situation," he said.

An unknown factor is what role the potential GM alliance could play in the fall elections. Republicans and gubernatorial candidate Dick DeVos contend Michigan is home to a single-state recession while other Midwest manufacturing states have prospered and have blamed Granholm for the economy.

State Republican party chairman Saul Anuzis said the GM talks fit into the overall dominance that economic issues have had on the race. Polls have shown jobs and the economy as top concenrs on voters' minds.

"It has now touched so many people in so many real ways in Michigan that it has gone beyond a statistic," Anuzis said of the state's high unemployment rates.

Granholm said her administration will be watching the GM talks "very closely. I do applaud the efforts of GM so far to restructure and doing what they need to do. I'll be curious to see what happens."

[SSLL]

From: http://www.latimes.com/business/la-f...lines-business
_____________________

GM's Troubles Driving Down a City
Tens of thousands of job losses since the 1970s at the carmaker have taken a toll on Flint, Mich.
By Brian Charlton, The Associated Press
July 10, 2006

FLINT, Mich. — James Rutherford has lived here his entire life, in good times and in bad.

The former mayor and police chief, now the director of the Flint Downtown Development Authority, says he doubts that the city — once synonymous with automobile manufacturing — can regain its place as a thriving industrial center.

"I don't think anyone else believes that we'll ever have major manufacturing in the city of Flint again," he said recently. "We've just about hit bottom."

General Motors Corp. and Delphi Corp., GM's former parts operation and now a separate company, announced June 26 that 47,600 of their employees — including 35,000 from GM — had agreed to take early retirement or buyout offers.

Among them were more than 3,100 of the 10,400 hourly workers in Genesee County's seven GM plants and an additional 1,500 of the 2,600 active workers at Delphi Flint East, the parts company's lone remaining plant in the Flint area.

The prospect of losing thousands of local good-paying jobs is "very traumatic for the whole area," said Russ Reynolds, president of United Auto Workers Local 651, which represents production workers at Delphi Flint East.

"There's a lot of sadness because this has been a good place to work for many, many years, and most of the people that work here live in this community," Reynolds said. "There's a lot of people here affected, not only at our site but in the community."

GM employed 80,000 workers in the Flint area in the late 1970s, but tens of thousands of the jobs have since been sent overseas, contracted out to other companies or simply eliminated. The city's plight gained notoriety after Michael Moore's 1989 film "Roger & Me," which shows Moore pursuing then-GM boss Roger Smith to confront him about laying off 33,000 auto workers in Flint.

As a result of the business climate, other local factories and retail shops have closed. The unemployment rate in Flint, a city of 120,000 residents, rose to 7.3% in May, the highest of any city in Michigan.

Kirby Blankenship, a carpenter who has worked at the GM Flint Metal Center for 15 years, said he and his co-workers were concerned about their jobs and pensions but realized the importance of the restructuring efforts.

"Everyone is a little nervous," he said, "but I think everyone knows it's a necessary step."

Mike Tessmer said business was down 30% at Timothy's Pub, his bar and restaurant near the Delphi Flint East plant. In the two years he has owned the establishment, Tessmer has had to cut his staff in half, to seven employees, because fewer customers are coming in at lunchtime and after work.

"The mood around here is just very depressing," he said. "They aren't working. They're kind of staying home and moping and saving money."

As Gary Lee waited to meet a friend outside Tom's Coney Island, another eatery near the factory, he said he believed that the area's future would rest with its institutions of higher learning. They include Kettering University, the University of Michigan in Flint and Mott Community College.

"I think the next generation will turn out some pretty talented people, and it won't be long until national businesses and even international businesses realize what we have here," said Lee, a salesman who lives in Holly, about 10 miles south of Flint.

Despite his pessimism about Flint's possible resurgence as a major industrial city, Rutherford, mayor from 1975 to 1983, during the city's industrial heyday, said good things were happening downtown.

Many boarded-up storefronts remain, but economic development officials are working hard to attract new businesses to the city. Abandoned homes have been razed, he said, and larger buildings are being turned into apartments and condominiums.

"The downtown area is going to be booming," Rutherford said.

[SSLL]

From: http://www.nytimes.com/2006/07/13/bu...gewanted=print
____________________

July 13, 2006
Chief of Nissan and Renault Details G.M. Proposal

By MICHELINE MAYNARD
Carlos Ghosn, the chief executive of both Renault and Nissan, said today that he would propose that General Motors join with his two companies in a sweeping three-way alliance that would create a huge global auto company.

In an interview in Manhattan, Mr. Ghosn said he would like to complete discussions on an alliance by the end of the year. But his efforts are not hostile, he said: if G.M. management is not interested in talking about a broad deal, the discussions will immediately end.

Mr. Ghosn is scheduled to meet with G.M.’s chief executive, Rick Wagoner, in Detroit on Friday. The meeting comes two weeks after G.M.’s biggest individual shareholder, the billionaire Kirk Kerkorian, suggested that the three companies hold broad discussions.

The boards of G.M., Renault and Nissan all voted last week to conduct talks.

Initial reports suggested that Nissan and Renault each intended to take a 10 percent stake in G.M., in a deal valued at $3 billion.

But Mr. Ghosn said today that he had no specific stake or figure in mind. That, he said, would be determined in discussions between him, Mr. Wagoner and executives on both sides.

Still, he said, he is not interested in arrangements that merely link the companies in specific ventures aimed at short-term or medium-term gain. He wants to explore long-term arrangements that would take advantage of the strengths of the European, Japanese and American companies to the benefit of all three.

“I would not be here today if I did not think it was big. Big!” Mr. Ghosn said.

He said he was not entering the discussions with the aim of running the alliance himself, although he did not rule that out. Nor did he say whether he expected to receive a seat on the General Motors board, as some reports have speculated.

Mr. Wagoner, speaking to reporters in Washington today after testifying before a Senate committee about retiree health care issues, said G.M. would “move expeditiously” to respond to Renault and Nissan’s proposals.

“Everyone would want to move to a yes or no decision promptly on something like this,” Mr. Wagoner was quoted by Reuters as saying. Though he did not think G.M. needed an alliance with the two companies to prosper, he said, “we’re willing to sit down and talk about the full range of options.”

Earlier in the week, he told a television interviewer that the proposed alliance was “an interesting idea” that he would consider with an open mind.

Many analysts have suggested that Mr. Kerkorian, whose associates have voiced impatience with the pace of G.M.’s turnaround efforts, was bent on ousting Mr. Wagoner and replacing him with Mr. Ghosn.

“I am not expecting anything for the moment,” Mr. Ghosn said about leadership changes. Rather, he said, “I am focused on ‘What is the size of the prize.’ ”

Before G.M.’s board met last Friday, news reports suggested that G.M. management would argue that there was no need for the company to talk with Renault and Nissan. But on Friday, the company issued a statement saying the board had authorized management to consider proposals for an alliance.

The possibility of a link among the three companies was first raised last month, when Mr. Ghosn had dinner in London with Jerome B. York, who has served as a financial advisor to Mr. Kerkorian for more than a decade.

Mr. York, who joined the G.M. board in January, praised Mr. Ghosn’s swift turnaround at Nissan, Japan’s third-biggest carmaker after Toyota and Honda, and called it an example of the clarity and speed that G.M. could embrace.

That meeting led to a dinner in Nashville on June 15 between Mr. Ghosn and Mr. Kerkorian, who made a rare trip from his home in California. Mr. Kerkorian’s involvement has been seen as an effort to raise the price of G.M. stock, which has barely moved since he bought the first of his 56 million shares last year.

Mr. Ghosn said he did not see anything wrong with that. “He’s a big investor,” he said. “You cannot blame shareholders to ask that ‘my shares go up.’ “

[SSLL]

From: http://uk.biz.yahoo.com/16072006/323...gm-report.html
____________________________________

Sunday July 16, 04:45 AM
Toyota eyes alliance with GM: report

CHICAGO (AFP) - Japanese auto giant Toyota Motor (Stuttgart: 853510 - news) is considering proposing an alliance with General Motors (NYSE: GMW - news) to prevent its US rival from forming a three-way tie-up with Renault (Paris: FR0000131906 - news) and Nissan, BusinessWeek magazine has reported.

Citing "people with knowledge of the Japanese auto maker's plans," the magazine said Toyota had "war-gamed" a proposal to assist struggling GM (NYSE: GM - news) , the world's largest auto maker, and head off a deal that would create a monolithic automotive group.
"Toyota has no interest in seeing an alliance like this (linking Renault, Nissan and GM) take place," an executive who asked not to be identified was quoted as saying.

[austin356]

It is really a shame Nissan's factory in Jackson, MS hasnt turned out as good as expected. This brand new plant, which has had reliability problems in its production, is been a major problem for Nissan and a contributor to them wanting to hook up with GM.

What I want to understand is why the plant hasnt been up to par. I know jackson msa doesnt have squat in worker experience for these types of jobs, but neither did the Benz plant in Tuscaloosa, AL back in the early 90's; but that factory has been a huge success.

[Canasian]

I buy a car that is well made and will last. Honda is the best. My current car is made in USA. Nissan Altima. I bought for $700 and still drive today- 203,000miles AND NO PROBLEMS!!!!!!!!!!!!!!!!!!! ( Iv'e had it for three years 1996 Altima GXE)

[James Bond Agent 007]

Originally Posted by austin356

It is really a shame Nissan's factory in Jackson, MS hasnt turned out as good as expected. This brand new plant, which has had reliability problems in its production, is been a major problem for Nissan and a contributor to them wanting to hook up with GM.

What I want to understand is why the plant hasnt been up to par. I know jackson msa doesnt have squat in worker experience for these types of jobs, but neither did the Benz plant in Tuscaloosa, AL back in the early 90's; but that factory has been a huge success.

In the last JD Powers initial quality rankings which came out a couple moths ago or thereabouts, the Jackson plant had finally reached the quality levels of Nissan's Smyrna, TN plant.

[James Bond Agent 007]

^
Here ya go. The plant is actually in Canton, not Jackson.
http://blogs.edmunds.com/Straightline/1114
^

Good news for Nissan
Good news for Nissan as their quality rating with the most recent J.D. Power "Initial Quality Study," has improved. This is especially true of their Canton, Mississippi plant (Titans, Armadas, Quest, QX56) which had been called the worst car factory in the USA in terms of quality. Now that plant is on a par with their Smyrna plant.

[SSLL]

From: http://www.forbes.com/business/manuf...po_0717gm.html
____________________________

Toyota Leaving GM To Nissan
Parmy Olson, 07.17.06, 11:20 AM ET

Toyota Motor today denied published reports that it would seek to break up the budding romance between General Motors and the Nissan- Renault alliance, saying it was not considering a takeover of the leading U.S. automaker.

“We don’t have such plans,” a Toyota (nyse: TM - news - people ) spokeswoman in Brussels, Belgium, said.


Her comments came as the GM (nyse: GM - news - people ) board was reportedly meeting to discuss linking up with Nissan (nasdaq: NSANY - news - people ) and Renault in a global alliance that could help GM return to profitability after an $8.6 billion loss in 2005 that largely reflected weakness in its North American automotive operations.

GM had initially offered a frosty response to the suggestion last month from 10% shareholder Kirk Kerkorian that it consider linking up with Nissan and Renault. In a letter to GM, Kerkorian revealed that he had broached the concept with Carlos Ghosn, chief executive of both Nissan and Renault, and that the automakers were "receptive" to the idea.

GM’s response to Kerkorian’s idea was initially icy: It said that it had not received a proposal from Nissan and Renault and that its board would take the plan “under advisement.” But by July 14, GM Chief Executive G. Richard “Rick” Wagoner Jr. was having dinner with Ghosn in Detroit, and the companies issued a joint statement that said they would conduct a 90-day review of the idea to asses the "potential benefits of such an alliance to each company and the feasibility of achieving them."

Indicating a thaw in GM’s position, Wagoner and Ghosn said in the statement, “We had a good discussion today and are looking forward to having our teams work together to explore our ideas.” The companies cautioned, however, that following the review they would consider whether the proposal warranted further exploration.

In an interview with the French daily Le Monde last week, Ghosn said Nissan and Renault, which have cross-shareholdings in each other, would want to own part of GM as part of any deal. Various reports have suggested the Japanese and French automakers would seek a stake of 20%.

Meanwhile Ford Motor (nyse: F - news - people ), GM’s Motown rival, is getting more environmentally friendly in Europe. The company's European division announced today that it had allotted $1.8 billion to develop greener cars in the U.K.

New technology will be deployed for the Jaguar, Land Rover and Volvo brands and will include more advanced engines, hybrids and biofuels and more lightweight materials. "Environmental motoring has to go mainstream," said the head of Ford of Europe, Lewis Booth, in a statement. It comes as oil prices have hit near record levels.

[SSLL]

From: http://money.cnn.com/2006/07/17/news...nal/gm_toyota/
____________

Report: Toyota denies possible GM alliance
Is the Japanese automaker looking at possibly hooking up with GM, or isn't it?
July 17 2006: 9:15 AM EDT

NEW YORK (CNNMoney.com) -- Toyota is not interested in exploring its own alliance with General Motors as a way to try block a potential GM-Nissan-Renault tie-up, according to a published report.

The Detroit News quoted an unnamed top Toyota executive based in the United States as saying there was no truth to the Business Week report that Toyota is interested in a possible deal of its own with troubled U.S. automaker GM.


More on General Motors
Big risks for GM

"They haven't approached us, and we haven't approached them," the Toyota executive told the News.

Sunday, after Business Week posted its report on its Web site, GM spokeswoman Toni Simonetti told CNNMoney.com the report was "speculative" and said GM has not been approached by anyone from Toyota regarding working together beyond what the companies are already doing.

Business Week magazine, quoting people with knowledge of the Japanese automaker's plans, said the company is mulling its options and considering different plans that could be proposed to General Motors (Charts), the world's largest but financially imperiled automaker.

The Business Week story quoted one Toyota (Charts) source saying that the company has "war-gamed" a way to help GM. Despite its rapid growth, much of that at the expense of General Motors, Toyota is concerned about the political and social backlash if GM falls apart.

But the News report Monday quoted the Toyota executive as saying "We haven't war-gamed how to help GM. We have looked at possible scenarios, what would happen if GM or Ford went into bankruptcy, but we haven't war-gamed how to help GM" in the context of the alliance negotiations.

Toyota has been reluctant to make acquisitions of other automakers or even enter into alliance. Even the Business Week report said that an equity link, where Toyota and GM would buy stakes in each other, was unlikely.

Nissan-Renault own controlling stakes in one another and even share a CEO, Carlos Ghosn. Ghosn told CNNMoney last week he would like any alliance with GM also to include cross ownership.

Toyota and GM already have ties
David Cole, head of the Center for Automotive Research, said Sunday that he wouldn't be surprised if Toyota was interested in more links with GM, as well as in blocking a GM-Nissan-Renault alliance.

"It depends on the nature of the agreement, what the consideration is on both sides," said Cole. "I know the GM people have high regard for Toyota, and that Toyota people also have high regard for GM."

But Cole noted that it wasn't likely Toyota would make any broad move quickly.

"Toyota moves very slowly with any kind of alliances," he said. "For Toyota, the foundation for whatever they do is already having a very deep relationship with the other company. But a closer partnership with GM would not be a difficult thing because they have a pretty good working relationship already."

The two companies have been successful with a joint venture in California, a plant that makes the Pontiac Vibe, the Toyota Corolla and Toyota Tundra pickup.

Last year it made 417,505 vehicles, with about 45 percent going to GM and the rest to Toyota. The plant has 5,400 employees and has made a total of 6.2 million vehicles from its opening in late 1984 to the end of 2005.

In addition Toyota and GM have research and development partnerships, working together on technology not yet ready for use in autos, such as on fuel cells that could someday power cars.

Toyota would consider expanding cooperative projects with GM, if asked, the News quoted the Toyota executive as saying. But he said that would be in the context of the companies' existing relationship.

Nissan-Renault talks move ahead
These reports comes after Ghosn and GM CEO Rick Wagoner met Friday to discuss a possible alliance. Afterwards, the two companies issued a joint statement that they will work over the next 90 days on a confidential review of the potential benefits of an alliance. The statement referred to Friday's meeting as an "exploratory discussion" about a possible alliance.

The Wall Street Journal reported Monday that the GM board is set to meet Monday about the talks on Friday.

The alliance between GM and Nissan-Renault was first suggested by Kirk Kerkorian, GM's largest individual shareholder who owns a 9.9 percent stake.

A number of industry analysts said Friday they think that a GM-Nissan-Renault alliance was unlikely. But they also said there are risks for GM in just holding talks with its potential partners, no matter what direction they go.

GM, the world's largest automaker, is already taking steps to get back on track after it lost $10.6 billion last year. The company is cutting 30,000 hourly workers, closing a dozen plants and facilities and selling a stake in its GMAC finance unit.

But perhaps the biggest challenge facing GM is its need to develop new cars and light trucks that will attract buyers without resorting to big incentives. GM has seen its share of the U.S. market slide in recent years, as overseas automakers like Toyota, Honda and Nissan have gained.

Some kind of broader pact with Toyota could prove attractive to Wagoner, GM's CEO, as a possible foil to Ghosn and his two automakers.

Other analysts are skeptical about GM's enthusiasm for an alliance with Nissan and Renault.

"GM is a company that wants to get past this blind date they were set up on by Uncle Kirk and concentrate on their turnaround plan," Kevin Tynan, auto analyst for Argus Research, told CNNMoney.com Friday.

"There's obviously a myriad of issues there for them to concentrate on, and there's a lot more potential there [in the internal issues] than in an alliance," Tynan said.

Meanwhile, Ghosn said last week he doesn't want the top job at GM even if an alliance is struck between GM and Nissan-Renault.

Ghosn, 52, was executive vice president of Renault for just over two years when he was named chief operating officer of Nissan in June 1999 at the start of the Nissan-Renault alliance. He was named CEO of Nissan two years later and is widely credited with pulling the automaker back from the brink of bankruptcy. He was named Renault CEO in April 2005.