May 21st, 2012 at 11:50am
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.
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.”
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.