Ford had 1,683 suppliers last year. By the end of this year, that number will be down to 850. This is what Tony Brown, Ford’s group vice president of global purchasing, told reporters, one of them from Reuters. Ford is worried about disruptions by supplier bankruptcies, which are a daily occurrence. Triage time: Ford wants to shore up the healthier ones and leave the not so healthy by the wayside.
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Ford may “just say ‘no’” to TARP (Troubled Asset Relief Program) money that puts them under the control of the PTFOA (Presidential Task Force on Automobiles), but the other wise acronym-aversive automaker doesn’t mind bellying up to the DoE’s (Department of Energy) bailout buffet. Bloomberg‘s mysterious “people familiar with the plans” say Ford, Nissan and Tesla will all dine upon loans from the “original” bailout package: the $25 billion feast created by the 2007 energy bill. The loans were intended to “help automakers boost fleetwide fuel economy.” In February, the DoE said they’d received 75 applications, totaling $38 billion. According to Bloomies, Ford, Nissan and Tesla are the first to get the handouts loans.
“A new order is emerging where the Detroit companies may no longer be the volume leaders in their home market,” says GT’s Kim Rodriguez in a release [via PRNewswire] which spins the news as an opportunity for US suppliers. The upshot is that even if the Detroit firms return to profitability by 2012 (hello, Vegas?), suppliers will have to diversify because expansion in US production is coming from the transplants. VW and BMW plan on doubling their US production capacity in that timeframe (to 1m units) while Toyota, Honda, Nissan and Hyundai will collectively add another million units. GT expects other firms to add another 200,000 units of production to the US mix by 2012 as well. Meanwhile, Chrysler and GM are shuttering plants and shedding capacity while taxpayers bail them out in the name of the “American automotive industry and manufacturing base.”
TTAC’s not the only one wondering when Toyota will stop acting like GM. Last February, none other than 84-year-old honorary chairman Shoichiro Toyoda (grandson of the company founder) upbraided 400 Toyota executives by asking them the same thing. “A person familiar with the meeting” told Bloomberg that Toyoda started out by asking lame-duck president Katsuaki Watanabe, “How many times have you made a mistake?” Then he went on to accuse the group of chasing sales and profits and letting Toyota emulate GM and Chrysler by becoming “addicted” to big cars and trucks while ignoring “the customers’ need to save money.”
The NY Times has an interactive widget that shows all domestically-produced vehicles, their point of assembly, whether they’re union-assembled, and where their engine and transmission were produced. What, no parts-content-origin-percentages? Oh well, the message is clear: Americans build tons of hugely popular automobiles.
What do you do if you’re an overlarge organization fighting a losing battle for market share in a down market, with high fixed costs and a stultified bureaucracy, facing more nimble competitors? If you’re Time magazine, you interview Chrysler-controlling Fiat CEO Sergio Marchionne. And if you’re Sergio facing a similar situation for Chrysler, you tell the troops that an Apple a day keeps the Sebrings away. “Since he took over as chief executive of Italy’s Fiat in 2004, the chain-smoking Canadian-Italian has used Apple as a model, focusing on the way Steve Jobs transformed it from an also-ran computer company into a global icon of cool. He encourages Fiat managers to take a close look at Apple’s branding prowess and even asks them to benchmark their activities against the company. His biggest success at Fiat is the 500 — a tiny, very cool 21st century version of a 52-year-old Italian icon once driven by movie stars such as Marcello Mastroianni and Sophia Loren — which Marchionne calls ‘our iPod.'”
The GM/Toyota partnership known as NUMMI builds but one vehicle for GM: the Pontiac Vibe. And it will continue to do so. Until the end of August, that is. GM’s announced that’s when they’ll cease production of the Toyota Matrix’ platform mate at the California plant. The press release states “While no replacement for Vibe production has been determined, GM and Toyota remain in active discussions regarding potential future production at NUMMI.” What’s next for NUMMI?
“We need to be able to make decisions faster.” Thus spake GM CEO Fritz Henderson to Automotive News [sub] at the National Business Summit yesterday. In what can only be termed a blinding flash of the almost obvious, he continued, “As part of the General Motors moving forward, you don’t normally think of us as speedy or fast, and that’s what we should be. But when you’re fast you do make mistakes. My view is if you’re slow, you make more mistakes. You just don’t notice it.” Huh? Anyway, what about organizational changes? What’s he waiting for?
If it walks like a lame duck, talks like a lame duck . . . . During an interview with Fritz Henderson, the New York Times asked the GM CEO if the bankrupt automaker needed someone from outside GM to inject a little fresh blood. Fritz didn’t care for the insinuation. “Carlos Ghosn was no outsider [when he turned around Nissan]. Lee Iacocca wasn’t an industry outsider when he took over at Chrysler.” That’s right, Fritz, but neither of them had spent their entire working life sipping the corporate Kool-Aid at the company they saved. You, on the other hand, have never tasted any flavor but GM Grape. As former GM Director and current behind-the-scenes talent spotter Jerry York points out, “Fritz might be 20 percent better than Wagoner, or maybe 50 percent better, but the question is, is that good enough?” Talk about damned by faint praise . . . What’s the bet that the new, government-appointed BOD’s answers “no” after they “evaluate whether Mr. Henderson deserves to hold his job more permanently”? Place your wagers on Henderson’s defenestration date below.
The Monroe (Louisiana) News Star proclaims, “A deal has been signed that will bring about 1,400 jobs” to an abandoned plant in Ouachita Parish. Whatta deal! But wait—just what company is the area’s economic salvation? It’s a “startup company [which] will assemble new autos in the plant.” The official announcement isn’t until tomorrow, but the deal “known as Project Liberty, involves famed Silicon Valley venture capitalists Ray Lane and John Doerr of Kleiner Perkins Caufield & Byers.” The AP cites Monroe City Council member Arthur Gilmore as saying the plant will build “fuel-efficient vehicles.” Nothing more was given about the company except to say it’s “relatively young” and “has a very unique business model and product.” OK . . . here’s where we have to make the obligatory comparison to Tucker and DeLorean. Oh yeah, and let’s toss in a reference to New Mexico and Tesla’s WhiteStar project. More to come following Gov. Bobby Jindal’s announcement about the deal tomorrow.
Years ago, I was in a new Volkswagen factory. Different cars of different brands were rolling down the same assembly line, most of the work done by robots. A huge stamping machine made fifty fenders, dropped the tool into a storage bin, grabbed another tool and made eighty doors. I said to the guy who showed me the factory: “Soon, you can ship the tooling to another factory via e-mail.”
“Sure,” the guy said. “As long as they all have a setup like this.” This is what Ford seems to be doing.
Speaking at the Automotive News [sub] Manufacturing Conference, GM global manufacturing and labor relations honcho Gary Cowger (remember him?) had a “by Jove, we’ve got it!” moment that placed him in instant contention for the “Minimum” prefix recently vacated by Chrysler’s Bob Nardelli. Even the hosting publication couldn’t keep the scorn from dripping off its nut graph. “General Motors thinks it has created a method to build small vehicles profitably in North America and calls it interbuildability. Competitors know the concept as standardization.” Can you feel the love (in the air tonight)?
A faint silver lining in the dark clouds brewing over Chrysler and GM dealers who have received “Dear John” letters: Volkswagen’s sales chief, Christian Klingler, said he will try to turn many into Volkswagen dealers, Automobilwoche [sub] reports. With a market share of 2.1 percent for VeeDub in the US, unbridled growth would be practically assured. Meanwhile at home, Klingler expects 2009 to become “the best new car sales year since 1999.” The cash4clunkers Abwrackprämie is bringing Germany record sales. Klingler and other analysts believe that 2009 will end with more that 3.5 million cars sold. Looking at the fact that nearly 1.6 million applications for Abwrackprämien money have been filed already, and that nearly half of the applicants never had bought a new car before, the number could reach 4 million.
Good afternoon,
I am responding on behalf of my colleague Bob Lesino [PR for the General Services Administration] and at this time we can’t provide any other information than what was in the press release.
Thank you.
MaryAnne
Gee, I wonder if this has anything to do with the country of origin for these vehicles . . . TTAC will now file a Freedom of Information Act request. Press release after the jump.
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