Saturday, May 31, 2014

Akerson, Solso deny knowing of GM ignition switch defect

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'I didn't know about it,' former CEO tells Forbes

THE GM RECALL

'I didn't know about it,' former CEO tells Forbes



Tim Solso on the ignition switch recall, and Barra: "I became non-executive chairman in mid-January and I assure you I did not know anything about it at that point. Right after she knew, she called me."

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General Motors Chairman Tim Solso and former CEO Dan Akerson said neither they nor current CEO Mary Barra knew about GM’s defective ignition switches that have been linked to 13 deaths.

“If I knew about it, she’d have known about it. And I didn’t know about it,” Akerson is quoted today in a blog on the Forbes Web site as saying.

Solso is quoted in the same blog as saying: “I became non-executive chairman in mid-January and I assure you I did not know anything about it at that point. Right after she knew, she called me.”

Solso told Forbes there was nothing “extraordinary” about the initial conversation about the recall. “Clearly we didn’t know the depth and all the circumstances” until later, he told the magazine.

Akerson retired from GM on Jan. 15, about a year ahead of schedule, to care for his wife after she had been diagnosed with cancer. Barra said she and other GM executives learned of the ignition switch issue on Jan. 31. GM has acknowledged that some employees were aware of the problem for more than a decade.

Forbes this week has posted on its Web site a couple of stories from a recent interview with Akerson.

Today’s blog by auto reporter Joann Muller was the first to disclose direct denials by Solso and Akerson.

In the article published Wednesday, Akerson disputed speculation that Barra had been set up to take the fall for the faulty ignition switches.

“Mary has said it: The moment she became aware of the problem, as I would expect, she confronted it,” Akerson said. “She didn’t know about it. I bet my life on it.”

There are multiple federal investigations into the defective GM ignition switches, as well as a three-month internal investigation, which should render results as soon as next week.

You can reach Nora Naughton at nnaughton@crain.com.

http://www.autonews.com/article/20140530/OEM02/140539989/akerson-solso-deny-knowing-of-gm-ignition-switch-defect

Friday, May 30, 2014

British car manufacturing accelerates sharply in April

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An Aston Martin Vanquish being inspected by hand

An Aston Martin Vanquish is inspected: the company plans to invest £20m in extending its headquarters and production plant in Gaydon, Warwickshire. Photograph: Christopher Furlong/Getty Images

British car manufacturing sharply accelerated in April, with the number of cars made in the UK up by a fifth.



A total of 133,437 cars were built in UK factories last month, a 21.3% increase compared with April last year and the biggest monthly rise since July 2012 according to the Society of Motor Manufacturers and Traders.

It followed a 12% rise in March, and Mike Hawes, the SMMT's chief executive, said UK factories were beginning to feel the benefit of new models rolling of the production line as well as recovering demand in Europe.

"The thriving nature of the UK car manufacturing industry was evident in April as output grew at its highest rate for almost two years. New model introductions are fuelling growth, while Europe â€" which currently accounts for around half of exports â€" is now seeing an upturn in demand.

"As investments continue to be realised, we expect further rises in the coming months; good news for the thousands of suppliers and employees across the country that rely on this industry."

The figures were published as Aston Martin, the luxury British sports car manufacturer favoured by James Bond, announced plans to invest £20m to extend its factory and global headquarters in Gaydon, Warwickshire. Around 250 new jobs will be created in engineering, manufacturing and commercial roles over the next few months, the company said. The investment is part of a five-year plan to spend more than £500m on developing new models.

Aston Martin also revealed it has received more than 500 applications for just 12 places on its latest apprenticeship round. It will also hire 14 new graduates in 2014.

Almost 80% of the cars made in Britain last month were built for export, a welcome statistic for George Osborne who is hoping the UK economy will develop a greater reliance on manufacturing and exports and a lesser reliance on debt fueled spending and financial services.

Over the first four months of 2014, British factories built 538,240 cars, a 6.9% increase compared with the same period last year.

http://www.theguardian.com/business/2014/may/29/uk-car-manufacturing-accelerates-april

Thursday, May 29, 2014

How does Google's self-driving car work  and when can we drive one?

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Google unveiled a brand new self-driving car prototype on Tuesday; the first company to build a car with no a steering wheel, accelerator or brake pedal.

The car's arrival marks the next stage in Google’s self-driving car project, which was born from the Darpa Grand Challenges for robotic vehicles in the early 2000s. Google kickstarted its own self-driving car project in 2008, and it has been rumbling on ever since, first with modified Toyota Prius and then with customised Lexus SUVs, which took the car’s existing sensors, such as the cruise-control cameras, and added a spinning laser scanner on the top.

What is it?

Google's self-driving carGoogle's self-driving car taking a spin around a car park Photograph: Google

It is the first truly driverless electric car prototype built by Google to test the next stage of its five-year-old self-driving car project. It looks like a cross between a Smart car and a Nissan Micra, with two seats and room enough for a small amount of luggage.

It is the first real physical incarnation of Google’s vision of what a self-driving car of the near future could be.

Where is it?

It operates in and around California, primarily around the Mountain View area where Google has its headquarters.

What does it do?

It ferries two people from one place to another without any user interaction. The car is summoned by a smartphone for pick up at the user’s location with the destination set. There is no steering wheel or manual control, simply a start button and a big red emergency stop button. In front of the passengers there is a small screen showing the weather, the current speed and a small countdown animation to launch.

Once the journey is done, the small screen displays a message to remind you to take your personal belongings â€" reinforcing that this is not aiming to be a substitute for your personal car at the moment, but more as a replacement for the taxi without the human driver.

What’s it like?

Google's self-driving carThe go button right next to the big red emergency stop button, just in case. Photograph: Google

Very few people outside of Google have been allowed to ride in the new car. Most of the people depicted in Google’s promotional videos for the new car described the experience as “smooth” and “nothing that feels the least bit threatening”.

Kara Swisher and Liz Gannes from technology site Recode were one of the few independent test riders, who described the car as having “ample” room despite being small, likely due to the lack of the normal controls taking up space in the cabin, and "that this felt a lot like a theme park ride".

Who built it?

Google has designed the car from scratch, starting with the sensors and a frame to interconnect them, then adding a cabin that does not block any of the sensors or create blind spots and eventually the body shell. The manufacturing of the 100 or so prototype cars will be done by a firm in the Detroit area, but Google declined to comment on which.

How does it work?

Powered by an electric motor with around a 100 mile range, the car uses a combination of sensors and software to locate itself in the real world combined with highly accurate digital maps. A GPS is used, just like the satellite navigation systems in most cars, to get a rough location of the car, at which point radar, lasers and cameras take over to monitor the world around the car, 360-degrees.

The software can recognise objects, people, cars, road marking, signs and traffic lights, obeying the rules of the road and allowing for multiple unpredictable hazards, including cyclists. It can even detect road works and safely navigate around them.

Google's self-driving carGoogle's self-driving car being built in Detroit. Photograph: Google

The new prototype has more sensors fitted to it that can see further (up to 600 feet in all directions) and in greater detail than the ones available on the previous repurposed Lexus and Toyota vehicles.

How safe is it?



The new car is the next evolution of Google’s self-driving car. While the new frame is untested, the company’s previous versions have clocked up over 700,000 miles of testing on public roads, mainly around California, including over 1,000 miles of driving in the most complex situations and cities like San Francisco’s hills and busy streets.

The car itself is limited to 25 mph, which restricts it to certain roads, but also minimises the kinetic energy it could carry into a crash if one should happen. The front of the car is also made to be as kind to pedestrians as possible with a foam bumper and a flexible windscreen that is designed to absorb energy from an impact with a person’s body.

Seat belts are also provided â€" a safety requirement for vehicles on the road â€" while the car has redundant systems, a “fault-tolerant architecture” as Google calls it, for both steering and braking, should the primary systems fails; plus that emergency stop button that passengers can hit at any time.

Google has also taken the data and behaviours it learned from its previous vehicles to create a defensive, considerate driving style that is meant to protect both the passengers and other road users. For instance, the car will wait a second after the traffic lights turn green before it moves off, although this could incur the anger of drivers stuck behind it.

Google also says that making it drive in a natural and predictable way has been one of the key goals, so that it behaves in a familiar way on the road for other drivers.

Google's self-driving carA laser sensor on the roof constantly scans the surroundings. Photograph: GoogleWhy now?

Google says it has gone as far as it can with the current customised vehicles and that a new platform is needed to take the project and technology to the next step and closer to a product people can actually use.

For instance, the previous generation Lexus vehicle had blind spots right up against the car where the sensors couldn’t see, something that needs to be eliminated in any vehicle open to the public.

The cars will first be used to test the software driving the car and push its capabilities. Google says at some point, when it deems its software safe, it will start putting real people into the cars beyond Google engineers. It will use the cars in a similar manner to the company’s Google Glass explorer programme, analysing how people use them and what works and what doesn’t.

Why do damn cute?

The car’s cute looks and friendly “face” were created intentionally to be “very Googley” according to its designers, to put both other road users and passengers at ease with the new technology. The shell is also designed to give the sensors the best view of the surroundings.

Why does it still look like a car on the inside?

The new car has two traditional car seats, primarily because in this iteration passengers have to be strapped in like they would in any other car to meet safety regulations, which means using standard seat belts. It also provides a more familiar passenger experience, which at this stage is likely important to aid adoption.

Is this something I’m going to be able to buy?

Google’s vision for this kind of self-driving car isn’t an exact replacement for the one parked outside your home. They are designed to be more like shared vehicles, possibly within a family or more likely as a replacement for taxis.

Google's self-driving carThe front of the car is designed to absorb as much of the impact as possible with a pedestrian, if one ever happens. Photograph: Google

These cars are still very much in the early prototype stage still, and Google is still trying to figure out how to make a product out of the technology, how much it is likely to cost and when it will be available.

Apparently it will not have ads according to Google, although whether it’ll eventually have a small screen like some taxis now that plays video adverts, who knows. That will likely be up to the operator rather than Google.

Who will build it for me?

Google is proving the technology, but it is unlikely to make the cars for sale once that technology is ready for the mass market. It has said in the past that it is actively seeking car manufacturing partners, which means we could see a Toyota, Ford or Fiat-made Google car in the future, but that is all very much still up in the air.

When can I get one?

Google says the cars should be road-ready by early next year, but that testing would take more than two years. At that point the technology will be ready for the next stage, which is likely to be greater pilot testing.

Current expectations are that these self-driving cars are at least five years away from being mature enough to create a real, non-prototype product, but it may be far longer until you can buy or hire one for personal use.

What about legislation?

One of the biggest hold-ups to the progression of the technology onto the open road of Britain, the US, Australia and the rest of the world will be legislation.

A law was passed in California over a year ago that made the testing and operation of self-driving vehicles on roads possible, as long as they had manual override controls. The Department of Motor Vehicles in California is expected to issue regulations on the operation of self-driving cars soon, after which self-driving cars may become a bit more common place.

However, there is still much to work out, primarily revolving around what a passenger in a self-driving car and can’t do â€" will they have to be able to take control at any moment, for instance â€" as well as questions around what happens when an accident happens, who is at fault and who pays.

• Google's driverless car: no steering wheel, two seats, 25mph

• Analysis: a long and winding road to success for Google's self-driving car

http://www.theguardian.com/technology/2014/may/28/google-self-driving-car-how-does-it-work

Wednesday, May 28, 2014

End of the road for the Ambassador as India carmaker halts production

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Ambassador car, India

Modelled on Britain’s Morris Oxford, the Ambassador was the first car to be made in India, according to the company. Photograph: Douglas E Curran /AFP/Getty Images

The maker of the Ambassador has halted production of the car, the choice of Indian officialdom, blaming weak demand and a lack of funds, and casting doubt on the future of a vehicle that has looked the same for nearly six decades.

Hindustan Motors said it had suspended work at its Uttarpara plant, outside the eastern city of Kolkata, until further notice.



Modelled on Britain's Morris Oxford, the Ambassador was the first car to be made in India, according to the company, and was once a status symbol.

But it began losing its dominance in the mid-1980s when Maruti Suzuki introduced its cheaper 800 hatchback.

It lost further cachet and market share when global carmakers began setting up shop in India in the mid-1990s, offering models with modern designs and technology.



The Ambassador has remained the recognisable choice of a dwindling share of bureaucrats and politicians, usually painted white with a red beacon on top and a chauffeur behind the wheel. The cars are still used as taxis in some Indian cities.

http://www.theguardian.com/world/2014/may/25/india-ambassador-car-hindustan-motors-production

Tuesday, May 27, 2014

Canada probes fatal crashes amid complaints over faulty GM switches

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May 26, 2014 - 10:11 pm ET

OTTAWA (Reuters) -- Canada is probing two fatal crashes in General Motors vehicles which were subject to a recall to fix faulty switches and has received nine additional complaints from drivers, the country's top transportation official told Reuters on Monday.

Transport Minister Lisa Raitt said she was sure the number of complaints potentially linking accidents to the switches would rise as people became aware of the recall.

"There were two accidents into which we are currently having investigations which may be related to this defect and this recall and I can confirm that," she said in a telephone interview.

An official at Transport Canada -- the federal transportation ministry -- earlier said both accidents involved vehicles which were subject to the recall. The airbags did not deploy in either case.

Complaints about the crashes were filed in June 2013 and April of this year. Raitt said she did not know how long Transport Canada's probes would take to wrap up.

The United States this month fined GM $35 million for not recalling cars with faulty ignition switches as quickly as possible.

At least 13 deaths in the United States have so far been linked to the problem.

Asked whether she felt fatal crashes in Canada could be linked to the faulty switches, Raitt told Reuters: "I think people are going to take a look at the accidents they had and wonder whether or not the faulty switch was at fault and I expect Transport Canada will get more phone calls."

Raitt said Ottawa is trying to determine whether the firm had delayed the recall of some cars, breaking the law in doing so, but she added that there was no evidence that GM Canada had contravened Canadian laws.

"If information comes to light that GM Canada is not being truthful with us, we do have the ability to go back and prosecute," she said.



Raitt said she did not know how Transport Canada would handle the nine complaints. Asked about the complaints, GM Canada said it was working closely with the ministry.

"We will continue to offer our full cooperation with the federal government as we work through these difficult issues," said spokeswoman Adria MacKenzie.

Contact Automotive News

http://www.autonews.com/article/20140526/OEM11/140529894/canada-probes-fatal-crashes-amid-complaints-over-faulty-gm-switches

Monday, May 26, 2014

GM recalls another 2.4m cars in fresh headache over safety issues

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General Motors said on Tuesday it is recalling another 2.42m vehicles in the United States, raising the number of vehicles it has recalled so far this year to more than 15m.

The No1 US automaker also said it is doubling the charge it expects to take in the second quarter to about $400m, mostly for recall-related repairs. GM did not immediately indicate whether vehicles outside the US market were affected.

GM said the latest affected vehicles are covered by four recalls, raising the number of US recalls this year to 29. That includes the high-profile recall of 2.6m vehicles to replace defective ignition switches linked to at least 13 deaths.

In the first quarter, GM took a charge of $1.3bn, mostly related to the ignition switch recall.



The latest actions cover possible faulty seat belts, transmissions, air bags and fire issues.

GM said there have been no fatalities associated with the latest recalls. The actions affect the Buick Enclave, Chevrolet Traverse and GMC Acadia full-size crossover vehicles; older-generation Chevy Malibu and Pontiac G6 mid-sized sedans; and newer versions of the Cadillac Escalade SUV and heavy-duty Chevy Silverado and GMC Sierra full-size pickup trucks.

Last week, GM announced five recalls covering almost 3m vehicles globally and said it would take a second-quarter charge of about $200m. It also fined a record $35m by the US National Highway Traffic Safety Administration for its handling of the defective ignition switch.



GM is under investigation by the US Department of Justice, Congress, the US Securities and Exchange Commission and several states for its handling of the faulty ignition switch, which engineers first discovered in 2001. GM has been criticized for failing to detect the faulty part and for not recalling the vehicles earlier.

The automaker expects to complete an internal probe of its handling of the issue within the next two weeks.

The largest of the four new recalls announced on Tuesday covers almost 1.4m full-size crossovers from model years 2009 through 2014 to replace potential defective seat belts. GM has told dealers to stop selling the newer models until they are repaired.

The other large recall covers almost 1.1m older-generation mid-sized sedans with four-speed automatic transmissions where a shift cable could wear out. GM said it is aware of 18 crashes and one injury related to this issue.

GM also put a stop-sale order on the 2015 Cadillac Escalade and Escalade ESV full-size SUVs, recalling about 1,400 vehicles because the passenger side air bags may not deploy properly in an accident. The company said it has emailed the 224 customers who had taken delivery of the vehicles, telling them not to let passengers sit in the front passenger seat until the repair has been made.

The company also recalled 58 heavy-duty versions of its 2015 full-size Chevy and GMC pickup trucks for potential fire issues. It said no crashes or injuries have been reported associated with this issue.

GM shares were down 1.8 % at $33.63 on Tuesday afternoon on the New York Stock Exchange.

http://www.theguardian.com/business/2014/may/20/gm-recall-cars-safety-issues-autos

Wednesday, May 21, 2014

Portuguese PM promises more reforms; European car sales growth slows - business live

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The BMW factory on March 15, 2010 in Munich, Germany.The BMW factory in Munich, Germany. Photograph: Miguel Villagran/Getty Images

European car sales have risen at their slowest rate in five months, adding to concerns over the durability of the recovery.



Industry body ACEA reports this morning that new car registrations across the EU rose by 4.6%, year-on-year in April to 1,089,226. That's the the third lowest figure for an April since 2003.

European car sales, to April 2014Photograph: ACEA

On the upside, this is the eighth month in a row when sales were higher than a year ago. And the late Easter this year probably won't have helped.

But the concern is that the revival is tailing off, at levels that are still historically weak. Especially after yesterday's disappointing GDP figures.

Car sales actually fell year-on-year in Germany, which doesn't suggest domestic demand in Europe's largest economy is going to drive the euro recovery strongly onwards.

Sales were down 3.6% in Germany, compared to April 2013. The Italian market was little changed, up 1.9%. But they rose 5.8% in France, +8.2% in the UK, and +28.7% in Spain -- where a government scrappage scheme has been driving demand.

Gian Primo Quagliano, head of automotive-research company CSP in Bologna, Italy, says the data shows there's no significant recovery in the industry - which employs hundreds of thousands of Europeans.

Quagliano told Bloomberg.

“We are not seeing a real recovery in the car market in Europe, just a modest rebound,”

“Europe needs economic measures to boost consumption and bring back customers into showrooms.”

So far this year, EU car sales have grown by 7.4% - and again, Germany is lagging behind.

ACEA says:

The increase in passenger car registrations in this period ranged from 2.9% in Germany, 3.7% in France, 5.0% in Italy to 12.5% in the UK and 16.2% in Spain.

EU car sales, to April 2014Photograph: ACEA

http://www.theguardian.com/business/2014/may/16/weak-european-car-sales-markets-eon-fine-live

Portuguese PM promises more reforms; European car sales growth slows - business live

Ready for some more automobile news? We have a good post today that you should actually review. Stay up to date with all car related details and automobile transportation news right here.

The BMW factory on March 15, 2010 in Munich, Germany.The BMW factory in Munich, Germany. Photograph: Miguel Villagran/Getty Images

European car sales have risen at their slowest rate in five months, adding to concerns over the durability of the recovery.



Industry body ACEA reports this morning that new car registrations across the EU rose by 4.6%, year-on-year in April to 1,089,226. That's the the third lowest figure for an April since 2003.

European car sales, to April 2014Photograph: ACEA

On the upside, this is the eighth month in a row when sales were higher than a year ago. And the late Easter this year probably won't have helped.

But the concern is that the revival is tailing off, at levels that are still historically weak. Especially after yesterday's disappointing GDP figures.

Car sales actually fell year-on-year in Germany, which doesn't suggest domestic demand in Europe's largest economy is going to drive the euro recovery strongly onwards.



Sales were down 3.6% in Germany, compared to April 2013. The Italian market was little changed, up 1.9%. But they rose 5.8% in France, +8.2% in the UK, and +28.7% in Spain -- where a government scrappage scheme has been driving demand.

Gian Primo Quagliano, head of automotive-research company CSP in Bologna, Italy, says the data shows there's no significant recovery in the industry - which employs hundreds of thousands of Europeans.

Quagliano told Bloomberg.

“We are not seeing a real recovery in the car market in Europe, just a modest rebound,”

“Europe needs economic measures to boost consumption and bring back customers into showrooms.”

So far this year, EU car sales have grown by 7.4% - and again, Germany is lagging behind.

ACEA says:

The increase in passenger car registrations in this period ranged from 2.9% in Germany, 3.7% in France, 5.0% in Italy to 12.5% in the UK and 16.2% in Spain.

EU car sales, to April 2014Photograph: ACEA

http://www.theguardian.com/business/2014/may/16/weak-european-car-sales-markets-eon-fine-live

GM overhauling legal department to prevent recall delays, report says

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THE GM RECALL

GM General Counsel Michael Millikin is planning to make changes in the legal department.

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May 21, 2014 - 6:58 am ET

DETROIT (Bloomberg) -- General Motors is overhauling its legal department as the automaker tries to break down silos that delayed the recall of millions of cars for a defect linked to 13 deaths, people familiar with the matter told Bloomberg.

General Counsel Michael Millikin has assigned a legal adviser to work with the heads of global safety and vehicle development so information about defects is shared more quickly between departments, one of the people said. Millikin anticipates further changes once an internal investigation is completed in the coming weeks, said the person, who requested anonymity because the matter is private.

Transforming GM’s legal culture won’t be easy because lawyers have spent their careers battling to keep potentially incriminating safety information out of the hands of trial lawyers. In one case, lawyers tried to bury an internal memo that calculated the cost to the automaker of fuel-fed fire deaths, according to internal documents reviewed by Bloomberg News. Employees were discouraged from using words including “decapitation,” “deathtrap,” “eviscerated” and “mutilating” that could be used against GM in court, according to an internal memo released by the U.S. government last week.

“Corporate counsel is a reflection of management,” said James Butler, a Columbus, Ga., lawyer who has fought GM over defects for 25 years and claims a 35-to-0 record against the automaker. “You have to change the whole culture.”

Legal shakeup

Mary Barra, GM’s CEO since January, already has shaken up the carmaker’s communications, public policy, human-resources and engineering teams. In the legal department, North America General Counsel Lucy Clark Dougherty will advise the newly appointed head of global safety, Jeff Boyer, on legal matters, the people said.

In a statement, GM said Millikin, who turns 66 in August, has no “current plans to retire” and will remain in his position “at an important time for the company.”

The U.S. is investigating why GM took more than a decade to recall Chevrolet Cobalt and Saturn Ion cars with defective ignition switches that could be jarred into the “off” or “accessory” position, cutting power to the car and shutting off the air bags. Last week, the U.S. Transportation Department fined GM $35 million, the maximum allowed by law, for its handling of the recall.

On Tuesday, GM recalled another 2.42 million vehicles, raising its recall total for the year to more than 13.6 million vehicles.

Sacred cows

Anton Valukas, chairman of the Jenner & Block LLC law firm, is leading the internal investigation. He has the remit to follow the facts where they lead and there are no sacred cows, one of the people said. Yet some of the lawyers helping Barra find out what went wrong spent their careers at GM.

Millikin, who’s co-leading the investigation, joined the legal staff in 1977 and was named associate general counsel in 2005, the same time many of the ignition-switch problems came to light. King & Spalding LLC, the law firm hired to help Valukas with the internal probe, also has a long history with the company, going back to fuel tank litigation in the 1970s.

In the 1990s, GM lawyer William Kemp, who remains the liaison between the carmaker’s defect investigators and the general counsel’s office, exposed the “Dateline NBC” news program for using incendiary devices to ensure a GM pickup’s fuel tank caught fire in a crash staged for the newscast. The network apologized, handing the automaker a public relations victory even though the government later said GM knew the fuel tanks were defective and failed to fix them or warn the public. GM ultimately wasn’t required to recall the vehicles.

Trial lawyers

Breaking down the silos between departments will be hard because automakers have been keeping potentially damaging information compartmentalized since the early 1970s, when trial lawyers began targeting carmakers, said Steve Hantler, Chrysler’s assistant general counsel from 1990 to 2007.

Sometimes employees offer an opinion about the safety of a part that a plaintiff’s lawyer can use as a “smoking gun,” Hantler said. For example, in 1973 a young GM engineer wrote a memo in which he said it might not make economic sense for the company to pay more than $2.20 per vehicle to save drivers from fuel-fed fires.

GM lawyers tried to keep the memo from becoming public, with one calling it one of the “potentially most harmful and most damaging” internal documents ever produced. Years later, trial lawyers got hold of the memo and used it to suggest that GM had known for years that some of its fuel tanks were unsafe.

Employee lawsuits

In the late 1990s and early 2000s, two employees in quality control filed whistle-blower lawsuits alleging that their efforts to inform superiors about potentially dangerous defects were suppressed. Bill McAleer contended in his lawsuit that a “glass ceiling of information” prevented him from alerting top management about defects including collapsing axles on Chevrolet Corvettes. His successor, Courtland Kelley, filed his own lawsuit alleging that his career was sidetracked after he raised safety concerns.

GM denied wrongdoing, and both cases were dismissed. In a telephone interview, McAleer said his and Kelley’s experience sent a chilly message throughout the organization.

“We were a visible sacrifice that apparently worked extremely well,” he said. “They quieted everybody down.”

Last month, Barra told a Senate panel that preliminary results of the Valukas investigation showed that information known in one part of the company wasn’t “communicated as effectively as it should’ve been to other parts.”

If Barra wants to prevent GM from losing track of defects in silos, she’ll need to be sure she has the right people in the right jobs and the right kind of lawyers to execute her plans for more transparency, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan.

“It could be the case that they were hired because they’re alligators, because the prior CEO said, ‘Fill the swamp with alligators,’ and they did,” Gordon said. “If that’s the case, then you have to get rid of a lot of them because alligators bite.”

Contact Automotive News

http://www.autonews.com/article/20140521/OEM11/140529976/gm-overhauling-legal-department-to-prevent-recall-delays-report-says

Kelley Blue Book rebalances business-consumer focus

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Rowe: "Our strategy is to be focused on the Kelley brand and what it means, not just to consumers..."

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Kelley Blue Book, which has stopped providing vehicle values on two consumer-oriented Internet shopping sites, is reinforcing its brand among business clients, Jared Rowe, Kelley’s president, said.

Those business clients include companies and government agencies that use its values to calculate loans, residual risk and sales taxes.

Rowe said Kelley is not backing off from providing values to consumers. It dropped its relationships with Cars.com and AOL Autos because Kelley’s brand is well-established and does not need exposure on those sites, he said.

Kelley’s new strategy calls for it to rebalance its resources to give as much attention to the financial and insurance companies and government agency side of its business as it spends on providing values to consumers, dealers and auto companies, Rowe said.

'Be focused'

“Our strategy is to be focused on the Kelley brand and what it means, not just to consumers, but what it means to dealers, to OEMs, to finance and insurance companies and to government institutions,” Rowe said. “We’re focused there.”

Black Book, known for its wholesale values, is now the official valuation service for Cars.com, a third-party Internet shopping site for consumers that provides vehicles’ trade-in value, retail sale value and private-party sale value.

Kelley is a unit of the AutoTrader Group, which owns Cars.com competitor AutoTrader.com and auction outfit Manheim. Rowe said those relationships didn’t play into Kelley’s decision to part ways with Cars.com, in April and with AOL Autos “a couple of months ago.”

As proof of Kelley’s brand strength among consumers, Rowe said its kbb.com Web site attracted 19 million unique visitors a month in the first quarter of 2014, a 20 percent increase over the same quarter last year.

'Underinvested'

Rowe said Kelley has had direct and indirect relationships with financial companies, insurance companies and government agencies “forever.” But, he admits, “it’s a part of the business we underinvested in over the last several years.”

He said the company is reallocating internal resources to align with industry customers’ particular needs. For example, financial institutions need help making retail loans and managing assets and risk, Rowe said.

Kelley can help those institutions structure loans when trade-ins are involved and its expertise in forecasting vehicle values also can help lenders manage their portfolios, he said. Kelley’s residual value unit provides residual values to the auto companies and captive finance companies, an area of continued focus, he said.

Rowe said Kelley’s new strategy will help to align buyer and seller expectations better. Buyers and sellers don’t have to have the same price information but both want prices that are reasonable, he said.

Range of prices

That’s why a search for values on kbb.com provides a range of prices rather than a single price. The company introduced range-based pricing for new cars last October and for used vehicles on Tuesday, May 20.

Rowe said Kelley’s research shows that a range of prices reflects how both buyers and sellers want to see price data.

“When you think about car sales,” he said, “when these two ranges overlap is when the magic occurs.”

Rowe said Kelley is re-evaluating the relationships it has with various companies and will determine whether they fit the company’s new strategy.

David Barkholz contributed to this report.

You can reach Arlena Sawyers at asawyers@crain.com.

http://www.autonews.com/article/20140521/RETAIL/140529966/kelley-blue-book-rebalances-business-consumer-focus

GM issues 4 more recalls covering 2.4 million U.S. vehicles

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Sales of 2015 Escalades, 2009-14 crossovers suspended

THE GM RECALL

Sales of 2015 Escalades, 2009-14 crossovers suspended



GM also said it has told dealers not to deliver 2015 Escalades.

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General Motors is recalling 2.42 million U.S. cars, trucks and SUVs in four separate safety recalls, raising its recall total for the year to more than 13.6 million vehicles.



GM said today that it expects to take a second-quarter charge of about $400 million, mostly to cover the cost of recalls announced during the period. That includes a $200 million charge from five recalls that GM announced late last week.

The recalls announced by GM today include:

• 1.3 million Buick Enclave, Chevrolet Traverse and GMC Acadia large crossovers from model years 2009 to 2014, and 2009-10 Saturn Outlooks, because front seat-belt cables can wear out over time and separate, increasing injury risk in a crash. In a stop-sale notice sent to dealers on Monday, GM said an inspection and repair process for the crossovers "is currently being developed. Parts needed to complete this repair are not available at this time."

• 1.1 million Chevy Malibus from 2004-08 and Pontiac G6 sedans from 2005-08 because of a shift cable in the four-speed automatic transmission that can wear out, "resulting in mismatches of the gear position indicated by the shift lever."

It is an expansion of a recall GM announced in late April for 2007-2008 Saturn Aura sedans, which share a platform with the Malibu and G6. GM said the transmission shift cable might fracture, which could prevent the driver from selecting a different gear, putting the car in park or removing the key from the ignition.

GM said it is aware of 18 crashes and one injury in crashes involving the Malibus and G6s. It previously said it knows of 28 crashes and four injuries involving the Aura models.

• 1,402 Cadillac Escalade and Escalade ESV models from 2015, which went on sale last month, because of a problem with the passenger side airbag that could result in partial deployment in a crash. GM said it has told dealers not to deliver 2015 Escalades and has notified 224 customers via overnight letters, calls and e-mails, instructing them to not let anyone ride in the passenger seat until the vehicle has been serviced. GM said it is unaware of related crashes or injuries.

• 58 Chevrolet Silverado HD and GMC Sierra HD full-sized pickups from the 2015 model year for a fire risk. GM said that retention clips attaching the truck's generator fuse block to the vehicle body can become loose and potentially lead to a fire. GM said it is unaware of related crashes or injuries.

The campaigns increase GM's count since Jan. 1 to 29 recalls covering more than 13.6 million U.S. vehicles, although those figures count some vehicles more than once because they are being called back to fix multiple potential safety defects.

Included in the total is 2.6 million Chevy Cobalts, Saturn Ions and other small cars from the mid-2000s that were built with a faulty ignition switch, which GM has linked to 13 deaths. GM is expected to conclude within a few weeks an internal investigation into its handling of the problem.

Last week, GM agreed to pay a maximum fine of $35 million and to change its internal safety processes as part of a consent decree with NHTSA.

GM has said it is implementing a more-rigorous safety approach to catch problems earlier and fix ones that have lingered for years.

You can reach Mike Colias at mcolias@crain.com.

http://www.autonews.com/article/20140520/OEM11/140529990/gm-issues-4-more-recalls-covering-2-4-million-u-s-vehicles

Tuesday, May 20, 2014

Ford takes 2015 Mustang to Europe

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May 20, 2014 - 12:01 am ET

Visible Measures

A slew of new videos made our viral list this week, including Ford Motor Co. announcing the chance for European buyers to pre-order the 2015 Mustang.

Ford will take pre-orders during the Union of European Football Associations Champions League Final, a continent-wide soccer tournament. The spot announcing the opportunity, created by Blue Hive London, comes in at No. 7 on our video chart with 533,352 views.

BMW continues its campaign for the i8 plug-in hybrid sports car with a spot, created by Serviceplan International, comprised of a dramatic monologue extolling the creation of the car. "I am unstoppable," says the narrator. "A rocket, a cannonball, a carbon-fiber body lighter than wind, stronger than storm." The video is ranked sixth by Visible Measures with 609,271 views.

Also new this week is Nissan's "Shocking Value," ranked third with 887,601 views; Toyota's "Toyota Time," ranked fifth with 636,735 views; Toyota's "Toyota Means Business," ranked eighth with 502,889 views; and Lexus's "2014 Lexus Hybrids," ranked ninth with 380,334 views.

4

17%

Final Test Test Drives

7

NEW

2014 UEFA Champions League



8

NEW

Toyota Means Business

Contact Automotive News

http://www.autonews.com/article/20140520/VIRALVIDEO/305209999/ford-takes-2015-mustang-to-europe

Monday, May 19, 2014

Feinberg's dilemma: Who are GM's victims

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Potential exposure surpasses 13 linked deaths

Potential exposure surpasses 13 linked deaths

Kenneth Feinberg must sort out which victims of crashes involving recalled GM vehicles are in line for compensation.

Photo credit: BLOOMBERG

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Any compensation process set up by General Motors for victims of faulty ignition switches is sure to have a scope far beyond the 35 crashes and 13 deaths that the automaker has linked to the defect.

GM's acknowledgment of the defect, which triggered a recall of 2.6 million small cars, has raised questions about whether a flimsy ignition switch could have played a role in any unexplained crash involving those vehicles over the past decade.

That's likely to complicate the work of Kenneth Feinberg, the victim-compensation expert GM has hired, as he sorts out which of the thousands of crashes that occur every year involving Chevrolet Cobalts, Saturn Ions and other cars covered by the ignition switch recall could be connected to the problem, and which victims are in line for compensation.

Through 2012, the most recent data available, 1,752 people died in crashes involving the cars covered by GM's recall, according to a federal database of traffic fatalities. While only a small fraction of those deaths are likely related to the ignition switch, each could present an opportunity for a victim's family to place some blame on GM and seek compensation.

For a reminder of this risk, Feinberg need only look back to his time administering the $20 billion BP oil spill fund, when numerous lawsuits accused him of fraudulently delaying or denying claims, while BP complained that his proposed settlements were too generous.

'Civic and legal obligations'

Texas lawyer Bob Hilliard claims to have linked 53 deaths and 273 injuries to the faulty ignitions. After the recall was announced, the police chief in Lexington, Ala., reopened the investigation into a December 2013 fatal crash that initially had been blamed on driver distraction, and the victim's father, a retired GM employee, filed suit.

Hilliard says 63 of his clients' injuries were "catastrophic," and two lawsuits recently filed by other firms blame GM for severe, permanent injuries that will require expensive care for the rest of the victims' lives. The lawyers in those two cases said they sued because they are not confident that any compensation fund would adequately cover the families' needs.



"These children, these families, these lives ... they are too important to be lumped up into an underfinanced fund," Thomas J. Henry, who represents the parents of a paraplegic 6-year-old in Pennsylvania, said in a statement.

Whether most other crash victims and family members choose to seek compensation through Feinberg or a potentially lengthy lawsuit may depend on the structure and eligibility requirements of any GM plan.

The timing of a crash might also factor in. GM has not indicated that it will claim immunity for accidents that happened before its 2009 emergence from bankruptcy proceedings, which formally shifted liability for those accidents to GM's predecessor company. But lawsuits related to pre-bankruptcy crashes could be more difficult to win.

GM, which announced Feinberg's hiring April 1, has said it expects to decide by early June how to proceed. GM officials haven't confirmed plans to set up a compensation fund, saying only that the company has "civic and legal obligations as it relates to injuries involving recalled vehicles."

A big point of contention will be whether the ignition switch caused crashes by cutting power steering and brake assist or just exacerbated injuries by preventing airbag deployment.

"They want to make this a case about airbag non-deployments and not a loss of control," said Lance Cooper, a Georgia lawyer who sued GM in April on behalf of Haley Van Pelt, who suffered an incapacitating brain injury when her Ion crashed in July 2009. "If it's a loss-of-control issue, there would be many more incidents, so it doesn't want to make loss-of-control cases a part of the problem."

Cooper's lawsuit says the ignition switch in Van Pelt's car slipped out of "run," causing it to lose control and hit a tree and preventing the airbag from deploying. It says medical bills for Van Pelt, who was driving the speed limit and wearing her seat belt, already have surpassed $1 million.

Back-seat passengers

Even in crashes that GM has linked to the defect, it's uncertain whether the company will assume liability for everyone injured or killed.

GM's tally of 13 deaths includes 15-year-old Amy Rademaker, who died in October 2006 when a Cobalt driven by another teen with only a learner's permit crashed in Wisconsin. But it doesn't count 18-year-old Natasha Weigel, another passenger in the car.

That's because Rademaker was riding in the front, where the airbags failed to deploy, while Weigel was in the back, with no airbags. None of the three occupants, including the driver, who suffered a brain injury but survived, was wearing a seat belt.

But a suit filed in March by the teens' families blames GM for both deaths, arguing that the defective ignition switch contributed to the driver losing control. Black-box data downloaded by police show that the ignition switched to "accessory" mode two seconds before a crash was recorded.

"They want to make this a case about airbag non-deployments and not a loss of control."

Lance Cooper

Georgia lawyer

The Cobalt went off the side of a road and vaulted into the air for about 59 feet, then traveled 128 more feet on the ground as it drove over a utility box and ultimately struck two trees at about 38 mph, according to a crash investigator's report released this month by Sen. Ed Markey, D-Mass.

A crash near Knox, Pa., that paralyzed Trenton Buzard in April 2009 involves a similar issue, with the added complication that the driver of another car was at fault.

A drunken driver crossed the center line and slammed into the front of a Cobalt, killing 73-year-old Esther Matthews and her 13-year-old granddaughter, Grace Elliott, neither of whom was belted. Buzard, Matthews' great-grandson, who was buckled in a car seat, suffered a cervical spinal-cord injury and brain hemorrhages.

Black-box data show the Cobalt's ignition cut off one second before the crash, which also killed the other driver. A lawsuit filed against GM this month by Buzard's parents claims his injuries are "a direct and proximate result of the collision and the negligent conduct of defendants."

Previous settlements

GM has reached settlements related to some crashes, including at least two claims that were resolved as part of its 2009 bankruptcy.

It's unclear whether the company or a judge would agree to throw out the deals -- or whether voiding them would be a prerequisite -- if the families wanted to seek a larger payment through Feinberg instead.

The parents of Brooke Melton, who died in a 2010 crash of her 2005 Cobalt in Georgia, asked GM in April to rescind their September 2013 settlement now that they know about the defect, but the company refused. They refiled their suit against GM last week, accusing the company of hiding evidence.

Many of the lawsuits filed before the recall argued that the cars were defective, but the families chose to settle rather than fight GM, which at the time denied any flaws in the airbags or ignition switch.

Six years ago, GM responded to a lawsuit over the November 2004 crash of an Ion in Texas by arguing that the plaintiffs had no evidence of a defect and that the lack of airbag deployment didn't cause the occupants' injuries. The 21-year-old driver, Candace Anderson, was injured, and her 25-year-old boyfriend, Gene Mikale Erickson, died on impact.

GM's lawyers in the case also pointed to the fact that Anderson had pleaded guilty to criminal negligent homicide after testing showed she was driving under the influence of methamphetamine and Xanax.

"The severity of Mr. Erickson's injuries were a direct result of his being unbelted ... and were not a result of non-deployment of the right front passenger's frontal airbag," a GM engineer, Kathryn Anderson, wrote in a March 2008 report filed with the court. She made the same conclusion about the driver's injuries and wrote that the Ion's frontal-restraint system exceeds federal standards.

Candace Anderson and Erickson's family settled with GM a month later, court records show.

You can reach Nick Bunkley at nbunkley@crain.com. -- Follow Nick on Twitter

http://www.autonews.com/article/20140519/OEM11/305199966/feinberg-s-dilemma-who-are-gm-8217-s-victims

Sunday, May 18, 2014

EU car sales growth slows in April

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Car showroom

The new car market has also been a bright spot in the UK over the past year, persistently outperforming the rest of Europe. Photograph: David Cheskin/PA



Europe's car market took its foot off the pedal in April with the slowest growth in new vehicle sales for five months, adding to concerns that the continent's broader economic recovery is losing steam.

Sales of new cars in the EU were 4.6% higher than a year earlier at 1.09m according to the European Automobile Manufacturers' Association (ACEA), but that followed a 10.6% rise in March.

"In absolute figures, the total units registered marked the third lowest result to date for a month of April since ACEA began the series in 2003 with the enlarged EU," the association said.

Europe was dragged down by its powerhouse, Germany, where sales fell 3.6% in April to just over 274,000 vehicles. There was growth in all other major European markets, including Spain, where sales of new cars jumped 28.7% to more than 80,000.

The new car market has also been a bright spot in the UK over the past year, persistently outperforming the rest of Europe. In April sales in the UK rose 8.2% to nearly 177,000.

Sales in the EU over the first four months of year were up 7.4% at 4.3m.

Slowing growth in Europe's car market reflected the trend in the wider economy, with GDP growth across the EU of 0.3% in the first quarter, slowing from 0.4% in the last three months of 2013.

The picture looked weaker still in the eurozone, where the growth rate among the 18 member states halved to 0.2% compared with the previous quarter.

The weakening recovery has raised acute expectations that the European Central Bank (ECB) will take measures to breathe some life back into the region's economy at next month's policy meeting, with a cut in the main interest rate and the rate paid on bank deposits both possible. The ECB's president, Mario Draghi, said after the most recent meeting that he was comfortable with the prospect of the bank acting.



http://www.theguardian.com/business/2014/may/16/eu-car-sales-growth-slows-april

Saturday, May 17, 2014

EU car sales growth slows in April

Ready for some more automobile news? We have an excellent short article today that you need to actually review. Stay up to date with all automobile related info and car transportation information right here.

Car showroom

The new car market has also been a bright spot in the UK over the past year, persistently outperforming the rest of Europe. Photograph: David Cheskin/PA

Europe's car market took its foot off the pedal in April with the slowest growth in new vehicle sales for five months, adding to concerns that the continent's broader economic recovery is losing steam.

Sales of new cars in the EU were 4.6% higher than a year earlier at 1.09m according to the European Automobile Manufacturers' Association (ACEA), but that followed a 10.6% rise in March.

"In absolute figures, the total units registered marked the third lowest result to date for a month of April since ACEA began the series in 2003 with the enlarged EU," the association said.



Europe was dragged down by its powerhouse, Germany, where sales fell 3.6% in April to just over 274,000 vehicles. There was growth in all other major European markets, including Spain, where sales of new cars jumped 28.7% to more than 80,000.

The new car market has also been a bright spot in the UK over the past year, persistently outperforming the rest of Europe. In April sales in the UK rose 8.2% to nearly 177,000.

Sales in the EU over the first four months of year were up 7.4% at 4.3m.

Slowing growth in Europe's car market reflected the trend in the wider economy, with GDP growth across the EU of 0.3% in the first quarter, slowing from 0.4% in the last three months of 2013.

The picture looked weaker still in the eurozone, where the growth rate among the 18 member states halved to 0.2% compared with the previous quarter.

The weakening recovery has raised acute expectations that the European Central Bank (ECB) will take measures to breathe some life back into the region's economy at next month's policy meeting, with a cut in the main interest rate and the rate paid on bank deposits both possible. The ECB's president, Mario Draghi, said after the most recent meeting that he was comfortable with the prospect of the bank acting.

http://www.theguardian.com/business/2014/may/16/eu-car-sales-growth-slows-april

Friday, May 16, 2014

Detroit: the bankrupt city turned corporate luxury brand

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It's Friday night in the heart of Detroit at the Red Bull House of Art, a 14,000-square-foot underground art gallery carved out of the basement of a

19th century brewery. Thousands of the young, the chic and the smart have gathered to celebrate

a new cycle of local artists’ work. DJ Erika is spinning, champagne is flowing. Outside, a line of people

hoping to enter winds around the block.

Christopher Stevens, a good-looking 29-year-old car designer from

California, is the host of the hottest after-party, in his loft above the brewery's back stairs. In the middle of the room casually rest two of his motorbikes, with a piano in one corner. Darko,

the resident pit bull puppy, darts in between guests from one end of the room

to the other.

“I love Detroit,” Stevens says, after declaring how

depressing he finds the idea of suburbs. “Detroit is full of heritage and

history. I came for its grittiness. It’s full of culture â€" old Americana

culture.”

To

Kirk Cheyfitz, CEO of New York-based advertising firm Story Worldwide, and a

former Detroit Free Press award-winning reporter, companies coming to the Motor

City for branding are “wrapping themselves around a mythology that is

outlaw”.

“It is a safe way to be appealing to young people all over

the country who embrace those kinds of feelings â€" of wanting to be outside of

the mainstream while actually defining the mainstream,” Cheyfitz says.

Those wanting to live

on the edge in Detroit might walk just a couple of blocks north-east of the Red Bull House of Art. There, after

a bitterly cold winter, a few squatters have moved back into the tagged,

abandoned buildings surrounding a former industrial railroad. The

crumbling,

urban ruins are just part of the landscape in a city where an estimated

78,000 structures

are no longer formally occupied. Crime is part of that landscape; police chief James

Craig went on record this year telling “good

Detroiters” to arm themselves with guns against criminals and home

intruders. It's a city where the homicide rate continued to take

number one spot ahead of other large American cities in 2013, including

Chicago. The median

household income in Detroit was just $23,600 a year in 2012.

Detroit's once glorious and now decrepit Michigan Theatre has been saved from the wrecking ball by being transformed into a car park.Detroit's once glorious and now decrepit Michigan Theatre has been saved from the wrecking ball by being transformed into a car park. Photograph: Mira Oberman AFP/Getty Images

Yet, to an advertiser's eye,

Detroit is

cool. Gritty. Tough. Resilient. Authentic in its struggle. True in its

American spirit of

hard, honest work, ruins and all.

That's where it gets uncomfortable for Detroit, The Brand. Detroit, the American phoenix rising from the economic ashes, is sitting on a valuable natural resource: street cred. This has not escaped the notice of profit-driven companies see the city's rebirth as a chance to brand

themselves and sell authenticity.

The airwaves and billboards are plastered with ads from Chrysler (a

Detroit native), Redbull (from Austria), new vodka brand from the giant

French Pernod Ricard group, Our/Vodka, and luxury watch and bicycle

company

Shinola. They present a romantic, nostalgic take on grit â€" a highly effective spin, which presents poverty and urban decay as cool. The nostalgia element is all the more evident in that ads by Shinola,

Redbull and Our/Vodka are often filmed in black and white.

Shinola’s spot features bike riders and a beautiful, blonde,

white female model hugging a (presumably local) young, black girl. Redbull’s spot

aired during this year’s Grammy Awards features local artist Tylonn Sawyer

telling a compelling story of beauty and resilience. Our/Vodka’s launching ad

includes Detroit’s beautiful, eerie, abandoned Michigan Central Station, stating

the brand is rooted in “people” and “community”.

These are brands that Detroiters, even the hip newcomers, likely can't afford. It's hard to imagine that many in Detroit could afford a $1,950 bicycle

or a $900 watch, irrespective of whether or not the latter now comes with a

lifetime warranty.

The city's poor would not be able to afford it anyway

Our/Vodka, a new micro-distilled vodka

brand currently being launched by French alcohol giant Pernod Ricard, is

actually seeking to invest in the people of Detroit, its CEO and global brand manager

Åsa Caap, says. Caap, who “fell in

love” with the city when she first visited it, says she has been approached by other foreign companies curious to know

whether investing in Detroit has been a positive experience. She has always said yes.

Our/Vodka’s business model is to be a global brand with

local roots, the name changing according to the city it is being housed out of:

in Detroit, it will be known as “Our/Detroit”. Three local partners who have

been taken on to manage the distillery and bar where the vodka will be made and

produced will retain 20% of profits.

Standing in the building where the Our/Detroit distillery

and bar will open this summer, near the famous abandoned

Michigan train station, Caap says she realized bringing vodka to a city facing

such socioeconomic woes could be seen as a problematic temptation, but she was reassured

that the high prices of the vodka her team was introducing meant that many of

the city’s poor would not be able to afford it anyway.

Fourth of July in Pittsburgh neighborhood with ChryslerNostalgia taken centre stage in Chrysler ads and Detroit's rebranding. Photograph: Nathan Benn/ Nathan Benn/Ottochrome/Corbis

It was Chrysler that kicked off the vogue for Detroit nostalgia. Kicking off the trend in 2011 was Chrysler’s Super Bowl “Born

of Fire” ad featuring Eminem. The unapologetic commercial, featuring sleek new cars, did not seek to cover

up the city’s collapse. Instead, it embraced it.

“What does a town that’s been to hell and back know about

the finer things in life?” The spot’s male voiceover asked. The answer came

back as hopeful as it was tough. “It’s the hottest fires that make the hardest

steel.”

In post-recession America, and with Chrysler itself just

coming back from the dead after a government bailout, the Detroit-centric

narrative was gripping, and proved a huge sales success. Detroit the city has

been at the center of Chrysler publicity ever since.

'Detroit is a brand unto itself'

“In this day and age, it becomes important for brands to

make sure they tell an authentic story,” says Detavio Samuels, Detroit

president of Glabalhue, the advertising firm behind this year’s Chrysler Super

Bowl ad featuring Bob Dylan as well as the city of Detroit at its core. Samuels

says audiences are hungry for transparency after decades of spin.

“People are looking for values that corporations have that

they can connect to,” Samuels says.

For Shinola, a new brand of old-fashioned luxury watches and

bikes, which opened flagship stores in Detroit’s Midtown, as well as New York’s

Tribeca in the summer of 2013, choosing to place headquarters and assembling

activities within the eight-mile confines of the city of Detroit was fundamental to

the company’s makeup and branding strategy.

Steve Bock, Shinola’s CEO, who spends a majority of his time

working out of the Motor City, says Detroit is a globally recognized “brand

unto itself”. And the recognition is not due to its status as America’s largest

city ever to go bankrupt. Far from it.

Globalhue's ad featuring Bob Dylan and Detroit.

“It’s a city that is built on heavy manufacturing and the

automobile industry. There is that face, there is that history and that

heritage.”

Shinola’s three-pronged marketing campaign has focused on (mostly

Detroit-based) American workers, the city as a brand and quality

craftsmanship. Out of 300 or so current employees, Shinola says it currently employs

around 200 in Detroit, with new recruits ongoing.

As it stands, Shinola’s strategy has paid off. According to

its own data, it generated $20m in sales in its first six months of

business, with revenue expected to reach $100m in 2017.

While Bock remains humble about the company’s impact on the

city’s economic affairs, he declares that Shinola sees itself as “a small part

of what we think will be a great future for the city”.

But if the brands are using Detroit and its communities to

brand themselves, how rooted are they really â€" especially if their products are

aimed at projecting an image of saving Detroit's people rather than serving them?

The idea of saving Detroit does not just carry a

socioeconomic connotation to it, it also carries a deeply racial one,



recalling a painful, segregation-burdened past. White populations once

fled the city, but are now coming back where they see opportunity. After

decades of white flight, Detroit today is 82.7% African American, with

many of its surrounding suburbs overwhelmingly white and starkly richer.

Grosse Pointe, which stands just to the east of the city limits, is 93%

white with a median household income of $103,867.

As much as outside investment and an alternative narrative

are needed to get the city back on its feet â€" and raise its desperately low tax

base â€" some argue companies using the city’s brand may be getting more out of

it than they are giving back.

A vacant and blighted home in an east side neighbourhood of DetroitA vacant home in an east side neighbourhood of Detroit. Photograph: Rebecca Cook/Reuters

“The

economic impact of the Detroit brand on the material conditions of the

residents of the city is limited at best,” says Bruce Pietrykowski, a professor

in economics at the University of Michigan, who specializes in labor,

industrial relations and urban political economy.

“What

is important to mention is the way in which profit-making ventures â€" in some

cases the very manufacturing firms that devastated the local economy â€" seek to exploit the image of de-industrialization, rebrand it as grit

and determination, and use it to sell products at a mark-up.”

Indeed,

while Shinola’s marketing explicitly evokes a time when industries produced

their goods at home, when skilled, manufacturing, often unionized jobs

presented solid pathways to the middle class â€" those times, along with

America’s economic structures, have most certainly, and irrevocably changed.

Shinola jobs are non-union, and starting salaries average around “$12 or $13 an

hour” according to Bock, way above the minimum wage, but certainly not in the

same bracket as the middle-class, Ford-type union protected jobs the company is

trying to evoke through marketing.

To

great fanfare this March, Shinola donated four giant $12,000 clocks to

the city, scattering them around select Detroit neighborhoods. It only

took a few hours for reports to emerge that one of them had been tagged.

And while Shinola was swift to send a team out to repaint, the act of

vandalism seemed to briefly speak to strange, and sometimes tense times

in the Motor City.

http://www.theguardian.com/money/2014/may/14/detroit-bankrupt-brand-ad-chrysler-nostalgia

Thursday, May 15, 2014

UK car sales growth matches 1980s record

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Aston Martin car in James Bond film The Living Daylights (1987)

Aston Martin car in James Bond film The Living Daylights (1987). UK car sales growth is harking back to the 1980s. Photograph: Ronald Grant Archive

British appetite for new cars surged ahead in April, as a rosy outlook for the UK economy triggered an upwardly revised sales forecast in 2014.

New car registrations rose 8.2% last month, to 176,820 vehicles, marking the 26th month of rising sales and matching the previous longest period of expansion, in the late 1980s.

It followed a 17.7% increase in March, which is typically a strong period for registrations because it is a plate change month.

Demand and an improved economic backdrop prompted the Society of Motor Manufacturers and Traders (SMMT), the trade body which publishes the data, to revise its forecasts for new car sales in 2014 from 2.3m to more than 2.4m. That would be a 6% increase on 2013.

Mike Hawes, SMMT chief executive, said: "After the bumper plate-change month of March, the UK car market returned to more modest but still positive growth in April. This marks 26 consecutive months of growth as GDP continues to pick up, inflation falls and wage levels improve."

April's registrations took the total in the first four months of the year to 864,942, up 12.5% on the same period in 2013. Sales have been supported in recent months by the wide availability of car finance deals and a rising demand for more fuel efficient vehicles.

The bestseller last month was the Ford Fiesta, followed by the Ford Focus and the VW Golf.

The UK economy grew by 0.8% in the first quarter of the year, following 0.7% growth in the last quarter of 2013. Meanwhile inflation is below the Bank of England's 2% target, unemployment is falling, and wage growth is picking up.



Howard Archer, chief UK economist at IHS Global Insight, said car sales continued to be a driving force in the economy.

He said: "Private car sales are being supported by a combination of much improved consumer confidence, rising employment, attractive offers and packages, and motorists' desire to buy more fuel efficient cars. In addition, consumers' purchasing power is now improving with earnings growth moving above consumer price inflation."

http://www.theguardian.com/business/2014/may/07/uk-car-sales-growth-back-to-1980s

Wednesday, May 14, 2014

Marchionne: Chrysler to embrace hybrids to meet mpg rules

All set for some more automotive news? We have a great short article today that you need to really read. Stay up to date with all vehicle related info and car transport information here.



At full capacity, the Tipton, Ind., plant will be able to ship about 800,000 transmissions annually.

TIPTON, Ind. -- Fiat Chrysler Automobiles CEO Sergio Marchionne said today that Chrysler Group increasingly will have to turn to electrification of its vehicles to meet the government’s rules requiring cars and light trucks to average 54.5 mpg by the 2025 model year.

But Marchionne also said that the company -- ranked last among large automakers in the United States for car fuel economy in 2013 -- is on track, internally, to meet long-term the government’s latest fuel economy requirements.

Marchionne addressed reporters here as Chrysler dedicated a $162 million transmission plant to build a nine-speed automatic transmission that will underpin almost all of its future front-wheel-drive vehicles. With the nine-speed automatic, the redesigned 2015 Chrysler 200 sedan is expected to achieve up to 36 mpg on the highway.

“The house will make it” to the 2025 model year fuel economy targets, Marchionne said. “Hybrids become a very large component of that fleet. You can’t get it without the hybrids. It’s impossible.”

Since 2009, Chrysler Group has sought to reduce its lineup of engines and transmissions from what Marchionne called “a collection of mutts” to a set of standardized powertrains that can be used across its product portfolio. It uses an eight-speed transmission to power most of its rear-wheel-drive light vehicles, and is transitioning to the nine-speed automatic for fwd vehicles.

Chrysler launched the nine-speed transmission -- which is licensed from ZF Friedrichshafen and built here and in Chrysler’s massive transmission complex in nearby Kokomo, Ind. --- in 2013 on the 2014 Jeep Cherokee.

The 2015 Chrysler 200, which the company began shipping to dealers on May 2, is the second Chrysler Group vehicle to use the lightweight, fuel efficient transmission.

Chrysler bought the 782,000-square-foot Tipton plant, about an hour north of Indianapolis, in February 2013 to expand production of the nine-speed transmission. The building was constructed originally to house a joint venture between Chrysler and Getrag, but that project was abandoned in 2008 before Chrysler’s bankruptcy.

The Tipton plant now employs 204, and employment is expected to rise to about 850 by late 2015 as nine-speed transmission production expands.

In other comments, Marchionne said that locating Fiat Chrysler Automobiles’ headquarters in London, as is now planned “is irrelevant” to the way the company will operate. The London offices will host board and group executive council meetings, but little else, he said.

“I can’t run a company through an iCloud,” Marchionne added.

Marchionne refused to answer a question about how the company planned to build 200,000 additional Jeeps in North America by 2018 when two of its four Jeep assembly lines are nearly maxed out now. He said executives continue to study the issue, but would not rule out expanding some Jeep plants to address capacity constraints.

The CEO also said that the decision to fold the fledgling Street and Racing Technology, or SRT, brand back into Dodge was made because “SRT is a natural extension of Dodge,” as Dodge is recast as Chrysler Group’s performance brand. He would not say whether the Viper would return to a Dodge badge.



Marchionne said: “The fangs will stay.”

You can reach Larry P. Vellequette at lvellequette@crain.com.

http://www.autonews.com/article/20140513/OEM01/140519968/marchionne-chrysler-to-embrace-hybrids-to-meet-mpg-rules