AD #1295 – Barra Raises the Bar, Dongfeng Gets Part Of PSA, Preparing For a Crash Test

January 20th, 2014 at 11:47am

Runtime: 10:05

- Barra Raises the Bar
- Unequal Pay
- Dongfeng Gets Part Of PSA
- Rolling, Rolling, Rolling
- Preparing For a Crash Test

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Hello and welcome to a brand new week of Autoline Daily.

BARRA RAISES THE BAR
Well, we’re already seeing an impact on Mary Barra being promoted to CEO of General Motors, and maybe not in a way that anyone expected. Women now have much higher expectations about their role in the auto industry and they want their concerns addressed immediately. On Friday, Ford’s COO Mark Fields spoke at an event held by Inforum, a professional organization that represents women in business. Mark Fields gave a good presentation on what’s going on at Ford, but despite the fact there were over 1,000 women in the audience, he never mentioned anything about the struggle women face in advancing their careers in business, or at Ford in particular. A survey by Inforum shows that only 5% of Ford’s top executives are women, compared to 25% at General Motors. Later, in answering a question from the audience, Fields did address the issue, but a lot of the women in the audience were dissatisfied with his answer and with the fact that he had avoided the issue. I know this because I later got an earful from a couple of those women who were there. Something changed ever since the Barra announcement, and the auto industry better wake up to the fact that women are going to play an increasingly vocal role in demanding what they see as their fair share of the executives suites.

UNEQUAL PAY
And don’t think that GM is off the hook because it just made Mary CEO. She’s going to make less money than than the man she replaces. She will earn $4.4 million in salary and incentives. But her predecessor Dan Akerson made over $11 million. In fact Ackerson, who will now become a senior advisor to the company, will make more money than she does. And while GM probably has good reasons why it worked out this way, it better brace itself for the backlash, because the optics on this are horrible.

DONGFENG GETS PART OF PSA
Now we head over to Europe, where Peugeot has approved a deal to get a cash infusion from Chinese automaker Dongfeng and from the French government. Each of them would kick in half a billion Euros and each would take a 10% share in the company. While the deal is being hailed as a good move by the European analyst community, here’s my Autoline Insight. The French government prevented Peugeot from taking the steps it needed to address the root cause of its problems: too much manufacturing capacity. PSA needs to close plants and lay off workers. But since it couldn’t do that it now has the French government and a Chinese automaker taking partial control of the company. Here’s my prediction. This is not going to end well. Unless or until they fix the overcapacity problem, PSA will never be a competitive car company.

ROLLING, ROLLING, ROLLING
Automakers have been putting low-rolling resistance tires on vehicles for years now to help lower fuel consumption. But do they really help? According to a new study from the University of Michigan, the answer is yes. It tested 63 different types of tires on a light duty vehicle and found that low-rolling resistance tires use about 505 gallons of fuel annually, while high-rolling ones consume around 547 gallons. At that rate, a motorist in the US would save, on average, about $147 in fuel per year, which over the life of a vehicle would be some pretty significant savings. But this does not take into account that low-rolling resistance tires cost more than their higher-rolling counterparts.

Getting a car ready for a crash test takes a lot more work than you might imagine. Coming up next, a peek into how the IIHS prepares for a crash test.

PREPARING FOR A CRASH TEST
I’m sure you all have seen videos of crash tests. But you might be surprised just how much work goes into those tests. For a look at that process the Insurance Institute of Highway Safety put together this behind the scenes video for how it prepares for a crash test.

(The IIHS crash test is only available in the video version of today’s show.)

And that wraps up today’s report. Thanks for watching. Please join us again right here tomorrow.

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15 Comments to “AD #1295 – Barra Raises the Bar, Dongfeng Gets Part Of PSA, Preparing For a Crash Test”

  1. Bradley Says:

    Wow! Executive pay has never made any sense.

    I suppose giving Mary Barra such a low salary at GM, suggests maybe she could put her hat in the ring for Alan Mullaly’s replacement.

  2. cwolf Says:

    Why do the crash dummies have clothes on? Are they equipped with genitalia? And why incur the high cost of them, when there are many who I work with would prolly volunteer for free!

    Having LRR tires may save 8percent on fuel,but I bet this is under ideal conditions. Besides costing more,they usually wear faster and don’t ride as well. They, for sure, are not for me!

  3. Kit Gerhart Says:

    The lower the aero drag of the vehicle, the bigger the advantage from using LRR tires. LRR tires will help the mpg of a Prius substantially. With a Hummer, probably not so much. Also, I’d expect the benefit of LRR tires to be greatest at low speed, where aero drag is not much of a factor.

  4. cwolf Says:

    The US has taken a blind eye towards the inequality of women for generations and no serious attempts to deal with this imbalance continues. This is one area where the problem has to be corrected from the top downward. Barra’s 4mil. Is not small potatoes and is more on par with other CEO’s than the past Ford and GM heads. Now, if only Mary could prove her real worth in the near future,you can bet many will be asked to explain why they are being paid so much.

  5. T. Bejma Says:

    I thought I posted this before, but it now it is gone… Ben??

    I just put LRR Goodyears on my wife’s Equinox and they were only $5 more than the standard Goodyears. For $20, I’ll take the over $100 in fuel savings.

  6. Mike Says:

    Something happened and all the postings were deleted. Probably a conspiracy of some sort.

  7. G.A.Branigan Says:

    @ T.B.: I seen your post too….

    LRR Tires: Those are useless to me for where I will be going/doing/towing.And,I’ll bet they suck in the wintertime….brrrrr.I don’t need big mudders but I do require something with a somewhat aggressive tread pattern and at least 6 ply.

  8. HtG Says:

    As far as Mary Barra’s pay package, she’s going to be helming GM for some time, so I imagine there’s all kinds of terms that will align her interests with shareholders’ over time. This year’s pay is just a snapshot, and comparing it to Akerson’s total package after his multiple years’ service may not be so apples to apples. (besides, Akerson is still going to be around for another year in some kind of advisory position. Some jerk is going to say something about that)

    ________
    LRR tires

    How do you put a value on the fun you can get out of LRR tires? Don’t look at me, I know nuthing. NUTHING ;)

  9. Roger T Says:

    Women on auto world – One bit of information is regarding what ratio of female engineers and professionals would be interested in working in the auto industry. I’m actually surprised by the 25% figure in GM, but even so it sounds they are trying very hard.

  10. Roger T Says:

    One bit of information
    Typed fast.

  11. Kit Gerhart Says:

    LRR tires that I know of are all-season, and they seem to work about the same as other non-performance all season tires under most conditions. They probably have worse traction on warm dry pavement than most tires, but better traction on cold dry pavement than real summer tires.

  12. Kit Gerhart Says:

    It’s looking like I will get about 50K miles out of the Yokohama LRR’s that came on my Prius.

  13. Bradley Says:

    I have LRR tires on my Yaris and they are great.

  14. T. Bejma Says:

    #7

    I will let you know how they are in the winter G.A. Looks like we will still be getting our share of snow the remainder of winter here in Michigan. They have to be better than the bald ones on her car right now ;-)

  15. Kit Gerhart Says:

    13,
    Did you notice an improvement in mpg with the LRR tires?