ON THE TABLE

January 7, 2009

Ford. Publisher's Note: Finally dispensing with J Mays' embarrassing and completely off the mark Passat tribute, the new Taurus finally gets the design and the refined packaging the car has deserved all along. In terms of value, contemporary packaging, features and a list of goodies a mile long, the new Taurus will be a formidable competitor in the market. With every home run product that Ford comes up with, it's clear that momentum is building for the folks in Dearborn. Not encumbered with the scrutiny that comes with the bridge loans that GM and Chrysler have to deal with, Ford is standing on the gas and distancing themselves from the "Old Detroit Two" and things are going to get very interesting from here on out. - PMD

(Photos courtesy of Ford)

Detroit marketeers. Publisher's Note: As I've stated repeatedly, convincing American consumers that Detroit has desirable products might just be one of the toughest marketing challenges in history. To make matters worse, the accrued negativity "out there" in Consumer Land for anything to do with Detroit was exacerbated during the Washington fiasco, so now the challenge is even more difficult. GM, leading off with a new marketing campaign emphasizing some of their more stellar products while talking about mileage and other competitive advantages does a decent job until they finish off their spots with a question - "Surprised?" - which totally blows their case to smithereens. Why beg the question? Memo to Detroit: Lead with your best stuff, and don't ever apologize. Pound the competitive advantages home, and if you have superlatives, like Ford has with its upcoming 41 MPG (city) Fusion Hybrid - the most fuel-efficient mid-size car in America - then shout it from the damn rooftops until everybody gets the message. - PMD

Japan, Inc. At the end of last year we ran an item in this column talking about the Japanese automakers and Japanese companies in general now reeling because of the yen's value vs. the dollar - the highest level in 13 years - and the dramatic fall-off in consumer demand for automobiles, adding to the overall financial doom and gloom in Japan. That Japan, Inc. has relied on yen manipulation for years and years to add to their profits is well documented, but just how much they depended upon that policy is starting to become perfectly clear, and it's shocking to say the least. It turns out that the so-called "visionary" automakers of Japan haven't been nearly as brilliant or good at controlling costs and making profits from selling cars and trucks as their press clippings would have you believe. A staggering portion of those profits - as much as 30 percent - directly resulted from taking advantage of the yen's valuation vs. the dollar. Japan Inc. is more than a little worried, and now the Japanese government finance gurus are openly talking about "officially" revisiting the idea of yen manipulation for the first time in over a decade, even though they've been doing it unofficially for years and years. Not good.

Japan, Inc. Part II. Just how worried is Japan Inc. - and its auto industry leaders - about the state of the U.S. economy, and more important, the precarious position of the yen vs. the dollar? This past Monday, at an annual New Year's party hosted by the Japan Automobile Manufacturers Association, Japan auto executives seemed worried - very, very worried - and their hand-wringing provided us with our very first AE Quotes of the Week for 2009. Quote No. 1 (by Takeo Fukui, president and chief executive of Honda Motor Co., as reported by the Associated Press): "First of all, the U.S. market has to recover," he told reporters. "The yen is at an abnormally high level. The Japanese economy needs its export industries." Quote No. 2 came from Toyota's President Katsuaki Watanabe: "We tried to create a business that can withstand currency fluctuations, but the latest changes have been too much." Maybe what he should have said to be accurate was this: "We tried to create a business that was primarily based on our government's tremendous ability to manipulate the yen, but now, not so much." And our Quote No. 3 comes from Toyota's Honorary Chairman, Shoichiro Toyoda, a member of the company's founding family, who stressed the importance of an American recovery: "We are all in trouble without an American recovery," he told The Associated Press. "The American economy has a big impact on the world." To that we say "amen" and, paraphrasing the immortal words of Rod Tidwell in "Jerry McGuire," add: "You likin' us now, aren't ya?"

The Car Biz. December vehicle sales capped-off the worst sales year in more than 15 years for the U.S. auto industry. The grim numbers for the month? BMW down 35.9 percent, Chrysler down 53.1 percent (ouch, Baby), Ford down 32.3 percent (although the company actually increased market share for the third straight month for the first time since 1997), GM down 31.2 percent, Honda down 34.7 percent, Mercedes-Benz down 24 percent, Nissan down 30.7 percent, Subaru down 7.7 percent (but amazingly enough actually up just under 1 percent for the entire year), Toyota down 36.7 percent and VW down 14 percent. Overall the industry lost almost 3 million in sales in 2008. A giant heaping, steaming bowl of Not Good.

Toyota. More from the "Not Good" File. As first reported by the Associated Press, Toyota will suspend production at all 12 of its Japan plants for 11 days over February and March, a halt of unprecedented scale for the global automaker. A stunning drop in global demand is forcing the move. Toyota last stopped production at all its Japan plants in August 1993, when demand plunged because of a rising yen, but that was only for one day, according to company sources.

Pontiac. Publisher's Note: As I predicted, the Pontiac G8 sport truck that was scheduled to debut next fall will never see the light of day in the U.S. market. Like the G8, the vehicle is built off the rear-wheel-drive Zeta platform at GM's Holden operation in Australia, where the sport pickup configuration is popular. Here however, it's a completely different story. Though the GM sport truck drew a brief stir from latent El Camino fetishists when it was unveiled last spring at the New York Auto Show, the thing was dead in the water the moment GM took the wraps off it. Now, with Pontiac facing an uncertain future as a niche performance brand within the GM solar system (a great concept if they can execute it properly) - with probably no more than three vehicles offered by the 2010 model year - the G8 sport truck has no place in Pontiac's future. A fleeting moment of clarity at GM, thank goodness. - PMD

(Photos courtesy of GM)
The new 2010 Buick LaCrosse, which will be introduced to the media in Detroit on Sunday, is a contemporary entry aimed at adding to GM's product momentum. The LaCrosse features standard FWD, optional AWD and two choices of direct-injected V-6 power: a 3.0-liter with 255 horsepower and a 3.6-liter with 280 horsepower, both with six-speed automatic transmissions. The new LaCrosse will be built at GM's Fairfax Assembly facility in Kansas City, Kansas, and will be available beginning late summer/early fall.

(Courtesy of GM)
The all-new Cadillac SRX makes its formal debut next week in Detroit. Clearly mirroring Cadillac's "art and science" design language inside and out, the SRX crossover is a smaller and sleeker package (it shares architecture with the Saturn Vue), with standard FWD and optional AWD. The big news, however, is the two engine choices. A direct-injected 3-liter V-6 engine delivering 260 horsepower and 221 pound-feet of torque is standard, while an optional 2.8-liter turbocharged V-6 delivers 300 horsepower and 295 pound-feet of torque. Both engines will have six-speed automatics. The new SRX will be available late spring.

(Courtesy of Ford)
The 2010 Ford Shelby GT500 will also be unveiled next week in Detroit. Ford’s Special Vehicle Team (SVT) delivers more power - 540 horsepower with 510 foot-pounds of torque - and new gearbox enhancements to the GT500, plus a standard 3.55:1 rear axle ratio for slightly better highway mileage. New bodywork featuring functional details including a hood air extractor that helps remove engine heat and a “Gurney Flap” spoiler to tune rear downforce gives the new Shelby a much more aggressive look. A dramatically improved interior completes the package. The 2010 Shelby GT500 will be in dealer showrooms in the spring.

(Courtesy of Ford)