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Episode 894 – UAW Losing Money, GM Skips the Super Bowl, Toyota to Focus on Styling

May 21st, 2012 at 11:50am

Runtime: 8:14

In a surprisingly frank admission, the United Auto Workers Union says it is losing money and has been for years. General Motors will skip advertising during next year’s Super Bowl because it’s too expensive. Toyota says it will make design a central part of its comeback plan to regain sales. All that and more, plus Autoline Daily correspondent Isaac Bouchard takes a look at the new BMW 6 Series Gran Coupe.

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Hello and welcome to a new week of Autoline Daily. I’m John McElroy. Later in the show I’ll announce the winners of our latest book contest, but now, the news.

UAW LOSING MONEY
In a surprisingly frank admission, the United Auto Workers says it is losing money and has been for years. Reuters reports UAW president Bob King wants the union in the black by 2014. He says they can do that by adding members and cutting costs. The union needs to boost membership by 50 percent just to break even, which sounds like an impossible task. Right now the union is spending more money than it is taking in, and is especially spending it on organizing, as well as political and legislative efforts. It may have to stop those efforts if it truly wants to break even. From 2007 to 2011 the union sold $264 million in stocks and bonds to pay for day-to-day operations. Here’s my Autoline Insight. This suggests the union is selling off the stock it got from GM, Ford and Chrysler to fund its VEBA trust, which pays for the health care of its members and retirees. And this kind of deficit spending is a recipe for disaster.

GM SKIPS THE SUPER BOWL
GM’s marketing strategy has been in the news the past few days. Last week the company announced it will stop advertising on Facebook and now the General says it plans to skip next year’s Super Bowl. GM says advertising on the game is too expensive. A 30-second ad is selling for $3.8 million, up from $3.5 million last year. GM says this, along with other efforts to consolidate its advertising, will help it save $2 billion on advertising over the next five years.

TOYOTA TO FOCUS ON STYLING
There are big changes taking place inside Toyota. According to WardsAuto.com, the company is making design a central part of its comeback plan to regain sales and market share lost from quality problems, the unintended acceleration issue and the tsunami in Japan. For decades now the Japanese automaker has focused on things like quality, fuel economy and practicality — essential attributes of a good car, but booooring. Today, even Toyota’s customers are attracted to evocative styling. We’re already starting to see some changes. The new Scion FR-S is a hoot and a half to drive and the upcoming Avalon has a stylish new body. The company’s new-found passion is pouring forth right from the man at the top, CEO Akio Toyoda. His new slogan is “Waku-Doki,” which means “Let’s do something from the heart.”

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TOYOTA PLANS NEW BRAND FOR CHINA
In related news, Toyota plans to establish a new brand in China, one dedicated to new-energy vehicles. The company is looking to develop and manufacture hybrids and EVs in the country with its joint-venture partners FAW and Guangqi. It also plans to bring advanced battery and electric-motor technology to China. Toyota’s first hybrid vehicles built in the country are expected to come out in 2015.

MAY SALES EXPECTED TO SOAR
Forget about all that talk that car sales may be softening in the American market. WardsAuto is forecasting that sales this month could hit 1.41 million units, the highest in any month since August 2007. That translates to a SAAR of 14.56 million units. While the rest of the economy is sluggish, the auto industry is expected to see sales grow throughout the year.

BMW 6-SERIES GRAN COUPE
(The BMW 6 Series Gran Coupe overview is only available in the video version of today’s program.)

Anyway, before I sign off, I’ve got to announce the winners of our latest contest. We’re giving away three copies of “Bridge Builder,” a book just published by Dr. Walther Kiep, the longest-serving member of Volkswagen’s Supervisory Board. To enter, all you had to do was send us your name and address. We’ve picked three entrants at random, and the lucky winners are . . . Vic Maslanka; Philip Jacob; and Michael Myers. Thanks to all of you that entered, we really appreciate your enthusiast.

Also, Dr. Kiep is our guest on the latest episode of Autoline This Week, which you can check out on our website, Autoline.tv.

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

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

28 Comments to “Episode 894 – UAW Losing Money, GM Skips the Super Bowl, Toyota to Focus on Styling”

  1. HtG Says:

    Here’s a story sure to interest His Excellency, Ray La Hood. A lawyer is arguing that someone knowingly texting a driver should be made partially responsible for an injury causing crash. Hey, New Jersey’s got it!

    http://www.nypost.com/p/news/local/texting_driver_spells_VtlfopCrrakk8PjDKVhjWJ

  2. pedro fernandez Says:

    HtG the other day I was riding as a passenger and a parent was on the phone with a daughter who was driving and even thought the daughter told him she was driving in the rain, he kept talking and talking and we almost got into a doozey of an accident, whose fault would that be? the daughter who tried to end the call, the “responsible” parent who kept going, I mean we’re gonna start having trials on who is to blame in such cases?

  3. Jon M. Says:

    Good thinking on Toyota’s part for improving vehicle designs, although it has taken long enough. I just hope this doesn’t come at the sacrifice of quality, practicality, and good ergonomics.

  4. Mike Says:

    So, the UAW is broke. Maybe they don’t know how to cut spending and they are too eager to open their pocket book and spend? Now that would be surprising! The UAW? C’mon!!

  5. Jon M. Says:

    I believe the story about the UAW supports Bob King’s efforts to impose his union on U.S. operations of foreign automakers as being for his and the UAW’s benefit, and not for the “benefit” of workers at those plants who don’t want the UAW’s counterproductive, caste-system union infecting their workplace

  6. C-Tech Says:

    Trouble for the UAW, at least the members can vote out the management.

    GM may “save” money by not advertising during the Superbowl and on Facebook, but remember this puts extra pressure on the conventional and other forms of advertising they do use. Hopefully the money they save won’t be “lost” to incentives placed on vehicles to move them.

    Toyota’s focus on styling combined with their quality, is going to make them hard to beat. Hopefully nobdy from Honda styling sneaks into Toyota :)

  7. Brett Says:

    #5

    Yeah, if we could just obliterate the last remaining pockets of organized labor in this country we could finally have a true Worker’s Paradise…

    I loved watching the incredulity on the interviewer’s faces when after commenting that Opel couldn’t close plants and cut costs because those darned pesky unions wouldn’t let them, and the good Doctor from VW said he thought that GM should invest in good product for Opel and not throw good, skilled, hard-working people out on the street.

    He might as well have said it in Mandarin Chinese for the looks he got. Utter lack of comprehension. “What? Don’t slavishly favor the corporate stockholders and acknowledge the worth of the people who actually produce the product that earns the money for the corporation? Ow! My head! Make him stop saying things like that! Ow!”

  8. HtG Says:

    What would happen if the UAW raised dues or increased co-pays? Brrrr, I don’t even want to think about that.

    _______
    BMW 6 coupay. Much as I hate admitting it, that car ain’t so ugly like the rest of the sisters.

  9. john 878 Says:

    The report given by Autoline on the BMW 6 Series Gran, to me, does not look that positive, for what it is. The author says people will buy it for looks, more then for it’s not so good other attributes. When someone says it’s the best looking car in it’s class, that is someone opinion and cars should not be rated on opinions.

  10. Earl Says:

    Toyota improving vehicle design….anybody know when the RAV4 is going to be updated? Current 4cyl has outdated 4 speed auto trans whereas 4 cyl Camry has a 6 speed for the last two years.
    I hope they don’t let the new Escape and Santa Fe eat their lunch like the CR-V is now.

  11. Tony Gray Says:

    That BMW spokesperson needs to stop ending her sentences with an UP inflection. Sounds like she just got out of high school.

  12. Bob in Atlanta Says:

    The UAW just needs to raise the dues on the top 1% so the 99% can continue to drive the US auto industry into the ditch. (Did I miss any prog cliches?)

  13. XA351GT Says:

    #1 &2 Has anyone ever heard of voice mail or the off button?? My phone is off while I drive. Guess what? No distracted driving,no texts. It’s really not that hard. 10-15 years ago everyone got along just fine without a damn phone bolted to their heads. They should ban all hands held while driving. The fine would be confiscation of the phone at the point of traffic stop. Returned after paying a $300 fine and a visit to the magistrate. Maybe this would get your attention that a call isn’t worth dying for or spending the rest of ones life in a wheel chair.

  14. XA351GT Says:

    Sorry BMW and others ,4 doors, does not a coupe make.

  15. Kit Gerhart Says:

    Hey, at least that 6-series “gran coupe” looks better than its sibling X6.

  16. cwolf Says:

    Careful spending is a must,but don’t for a second under estimate the UAW coffers. Protesting outside of dealerships was stupid,but counter punching the far right’s intent to destroy unions was imperative. I predict in the near future,one of the transplants will adopt the UAW.

  17. pedro fernandez Says:

    #13 Agree, I don’t talk when driving but you really cannot tell a 45 yr old what to do, she should know better.

  18. pedro fernandez Says:

    Still reeling from the $19,700 Yaris MSRP sticker, are people that dumb??

  19. Jim Haines Says:

    Im sure that King Bob is not too worried about money as long as Nero is in charge of the treasury because they both will fiddle as the US just prints more money until a government burns all the cash.

  20. cwolf Says:

    pedro,If you have time and want to see a reaction from the dealership,e-mail them your thoughts of the Yaris being overpriced. But also attach a copy to area organizations,such as AARP,womens and church leagues,ect,ect. After a week passes,go back and check out the price again.

  21. cwolf Says:

    #19 Huh???

  22. Jim Thykeson Says:

    Do any of you guys actually work for a living or do you have nothing to do but sit home on your dead asses and bitch about decent wages! Unions set wage-standards for their respective industries and at the same time made other non-union industries at least try to match these wages for their workers. The ‘righties’ have succeeded in busting most of the private unions (UAW, Teamsters, AFL-CIO, etc.) and now their going after the public sector unions; cops, teachers, firefighters, nurses, etc. The eventual outcome of all of this will be every worker (skilled & non-skilled) working for field-hand wages. Walmart is the new standard, and this is OK, but you won’t be able to buy that gal. of milk and own a new car, much less a home! The ‘righties’ have taken your wages, your health ins., your paid benefits, but most of all they have gotten dumb asses to honor them for kicking their asses and makeing them think it’s good for them!! The UAW is working with a 2-tiered system (like all the unions have had to accept) and their wage & benefits are what they used to be 25 yrs. ago! Damm, am I glad a don’t have to work in this day and age! Lots of luck suckers…your gonna’ need it!!

  23. XA351GT Says:

    Pedro @#17 Actually if their actions put your safety into risk I feel your well with in your rights to ask them to either pull over or end the call.If they can’t understand that then they are being pretty damn selfish.

  24. Jon M. Says:

    @ #13 XA351GT.

    I like you’re idea, but as easy as drunk drivers get off, I’m sure you, like me, know that idea would never fly. Perhaps when drivers are busted texting or making phone calls while driving, their phone numbers should be published as part of a police blotter in their local newspaper. I think that would be a suitable deterrent as well. But like your idea, I don’t think mine would fly either!

  25. pedro fernandez Says:

    20 cwolf, it is a free market and if people are willing to pay for it…. that is why they have websites like Carsdirect.com so you can avoid such dealer shenanigans.

  26. W L Simpson Says:

    Just like the swamp& wall Street , UAW has too many , & over paid, executives.

  27. Kit Gerhart Says:

    #22,
    I was non-union salary most of my time with GM/Delphi, and the union helped me too, with our getting the same holidays and vacation, if nothing else. For a long time, we got the same cost of living adjustment as the union workers, but that went away in around 1986.

    Also, the union workers do better in retirement than salary retirees, because there is a contractural obligation. I was “promised” paid Medicare supplement and life insurance after retirement. The UAW retirees my age get theirs. I do not.

  28. Pieter Says:

    Why does the UAW not join forces with other unions, like a metal workers union?