Episode 77 – Chrysler Faces Lawsuit, China Eyes Mexico, Ford Anticipates Higher Sales

February 10th, 2009 at 12:00pm

Runtime 6:22

Faurecia is suing Chrysler for $110 million, claiming Chrysler owes it for research and engineering costs. Chinese-designed cars could be built in Mexico and sold in the Americas as early as next year. Ford bucks the trend and starts increasing some F-150 production. All that and more, plus a look at some new vehicle styling trends that have caught John’s eyes.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Chrysler faces a lawsuit from a supplier. Mexico might start making Chinese cars. And Ford bucks the trend and starts increasing some production.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Tuesday, February 10, 2009. And now, the news.

As if Chrysler doesn’t have enough troubles, the Detroit Free Press reports French supplier Faurecia is suing the automaker for $110 million. Faurecia claims Chrysler owes it for research and engineering costs. This could be a sign of big problems between automakers and their suppliers, and as we’ve been reporting here, if the supplier industry gets into trouble, it’s going to bring all the car companies down with it.

Next Tuesday GM and Chrysler have to go before the US Treasury to prove they can be viable and get more government money. Maybe this will help them. The French government will give Renault, Peugeot, Citroen, and French auto suppliers nearly 8 billion Euros in aid, or about $10 and half billion dollars. They get it as long as they promise to keep jobs and factories in France. The loans are being offered with a 6 percent interest rate. The aid package still needs the approval from European competition authorities.

And as long as we’re talking about Europe, Chinese automaker BYD announced it’s choosing Denmark as the place to start selling its electric car in Europe in 2011. According to Gasgoo.com, BYD chose Denmark because it has the best tax policy of all the EU countries regarding electric cars.

And sticking with China for the moment, Gasgoo.com also reports that Chinese-designed cars could be built in Mexico and sold in the Americas as early as next year. Chinese automakers will likely test the waters in South America and Canada before jumping into the U.S. market. If and when they do come to the U.S., their vehicles could wind up being sold at big-box stores like Wal-Mart or Costco. A Mexican company called GS Motors is already constructing a plant to build cars designed by First Auto Works.

As we reported yesterday, Bob Lutz will be retiring from General Motors at the end of the year, and he will be replaced by Tom Stephens, who has been running GM Powertrain. Stephens is an excellent choice to replace Lutz. He’s a hard core product guy with a private collection of dozens of his favorite muscle cars. But more importantly he transformed GM Powertrain into one of the jewels of the company. And the fact that he got the job, along with the title of vice chairman, shows that product development will be given the proper attention even though Bob Lutz is leaving.

Ford seems to be sniffing out a promising springtime. The Detroit Free Press reports the company will be adding a third shift at its plant in Dearborn, Michigan that makes F-150 pick-ups. Normally that would be minor news, but in this business climate, that’s significant. Even though sales for the truck are down, Ford says the all-new F-150 is gaining market share and that its dealers are ordering more of them. And those of you who saw our live webcast last Friday with Ellen Hughes-Cromwick, Ford’s chief economist, know Ford expects industry sales to pick up in the second half.

Coming up next, a look at some new vehicle styling trends I’ve been noticing lately. We’ll be back right after this.

Vehicle styling trends come and go — from tailfins in the 1950s, to boxy bad taste 25 years ago.

At the Detroit Auto Show last month I noticed two styling themes that are really catching on. One is called a “smile graphic,” where the frontend of a car looks like it’s grinning, and the other is the horizontal-bar grill.

Many vehicles today are starting to get “smiling styling.”

Look at the Volkswagen Passat CC, the hydrogen-powered Honda FCX Clarity, the new Mazda3 and the 2010 Kia Optima. They all look like they’re smiling, with expressive, upturned frontends.

The other styling trend I see has to do with grill design. In recent years Ford made the three-bar look its signature design cue, sticking it on everything from cars to crossovers. Now other automakers are starting to do the same. The redesigned Honda Insight has three thin bars plus a smiling face. Lexus’ new hybrid, the HS250h, also has a very similar grill. Back in 2007 Honda even showed off a concept version of the Accord that had a chrome frontend.

Interestingly, just as others are starting to use this design element Ford is moving away from it. The new Taurus has a three-bar grill, but it’s very thin and full of holes.

Surprisingly this trend is actually kind of retro. Starting in 1948 Ford F-Series trucks had grills made of flat horizontal bars.

Anyway, that’s it for today’s top news in the global automotive industry. But before we go I just want to remind you that tomorrow is our “You Said It!” segment. We’ve just implemented a brand new way sending us video or audio comments, so let your voice be heard! Just click on the “You Said It!” link in the sidebar of the Autoline Daily page and that’ll take you to where you can submit your comment. We look forward to hearing from you so check it out, it’s pretty cool.

And that’s it for today’s show, thanks for watching, we’ll see you tomorrow.

15 Comments to “Episode 77 – Chrysler Faces Lawsuit, China Eyes Mexico, Ford Anticipates Higher Sales”

  1. Episode 77 - Chrysler Faces Lawsuit, China Eyes Mexico, Ford b…/b | traveltous.com Says:

    [...] Episode 77 – Chrysler Faces Lawsuit, China Eyes Mexico, Ford b…/b [...]

  2. Mike Dale Says:

    My 25 year old son calls the three bar horizonal grille look the Ford Razor. Yup it does look a lot like the three blades of an Atra razor.

    To me design wise, the key is how similar the Murano is to the Pacifica is to Enclave etc. with a “style” segment, they all look pretty much the same except the grill, headlights and tailights. Truly, the stylists don’t have as much room to play as they once did. Perhaps that is why they are spending so much more of their time on the interior of the vehicle. someone said recently that 40% of the design effort is for the outside, 60% for the inside.

  3. Ron Paris Says:

    John: I guess your comments about the current trend toward “smiley face” front end treatments is kind of an indirect way of answering my question about european pedestrian crash safety regs and their effect on styling/design, eh? Sort of…?

  4. William Barrett Says:

    Didn’t the Dodge Neon start the whole “smiling” trend over 10 years ago?

    Plus, what is the indication of GM actually going into bankruptcy and forcing the union to accept a lesser contract?

  5. pedro Fernandez Says:

    John: The BYD car in the photo looks very much like A Corolla, Why can’t Toyota sue these people? its obviously an exact copy

  6. Dan Clemons Says:

    Who is going to come up with the idea of turning our present cars into a hybrid or is that too difficult to do?

  7. Salvador G. Says:

    John, It seems to me that the French are bailing out their automakers to keep out the Italians and the USA its bailing out Chrysler to give it to the Italians.

    2- Shouldn’t we give GIllette some credit for when the new razor makes it as tne new thing, since the Mach 3 is king of old. :p

  8. Kit Gerhart Says:

    Didn’t the French government own much of Renault once before, and then “re-privatize” it with stock offerings or something? Does anyone know how that worked?

  9. pedro Fernandez Says:

    WOW, a Mexican-built Chinese car? not even Nostradamus would have predicted that mess. It should be called ‘Yugovega” and come with a life insurance policy.

  10. Joe Nagy Says:

    Hi Everyone:

    Hmmm…, Chinese to build autos in Mexico, to be sold to Americans in the USA. Hey, most domestic and foreign auto manufacturers are doing the same thing, and the USA unemployment rate is almost 10%, and about 12 million US home owners have had their home foreclosed upon, with another 10>12 million to go. I don’t know about the rest of you, but I think the last purchase these unemployed and foreclosed upon folks are going to consider is a ‘new car’, especially ones built outside of the good ole’ USA. If you want to sell in the US market, built the units in the US with American workers, period.

    Just one guy’s opinion; [and I did purchase an '08 auto,[Jap name, but built in the USA by Americans], best regards from Florida,

    Joe Nagy.

  11. Bill Murdock Says:

    Sounds like Bob Lutz is getting a worthy replacement. With Tom Wallace and now Lutz retiring, GM ls losing two great car guys who held top jobs in the company, and I was fearing the worst.

  12. Ed Kemmerer Says:

    Seems like Lutz would be the perfect car czar now that he is retiring and needs something to keep him out of his wife’s hair all day. He could even commute to DC in his helicopter or Russian jet that he used to buzz the Milford Proving Ground in. Nothing like a Red Airforce tin can with wings to wake you up from your desk right after lunch as it zips over your building at 50 feet off the hard deck. Those were the days my friend ………

  13. Richard Tait Says:

    Hey Ed Kemmerer, Bob Lutz has two jets, a Czechoslovakian (when it was called that) Aero L-39 Albatros and a Franco-German Dassault-Dornier Alpha Jet. Neither is a Russian jet. He also flies a McDonnell-Douglas MD500 helicopter (while his wife makes her journeys in a Bell 206B JetRanger). What a couple! But I agree with you that he would make the perfect Car Czar, even if he has no Russian connection. LMAO.

  14. jason willis Says:

    i think ford could be adding people at its plants in order to take care of senority obligations of the union. so when the layoff’s hit the low will go. with the jsp leaving.

  15. Kate McLeod Says:

    Why is Tom Stephens such a “great” choice to replace Lutz? Lutz transformed GM product anda to a degree the corporate culture, but GM powertrain lags behind advanced powertrain designs in almost every measure.