August 1st, 2012 at 12:01pm
Ford seems to have a lot of former GM executives at its in-house marketing agency, Team Detroit. Very unusual to see all those former execs in the same place. BMW says it’s building more cars than last year but making less money. Sales are up six percent, but profits are off 28 percent at the German automaker. Volkswagen is adding another shift to its Chattanooga, Tenn., plant to meet demand for the Passat. With all the new hiring VW is doing the company says it prefers fast food workers to people with manufacturing experience. All that and more, plus it’s time for You Said It!
Hello and welcome to Autoline Daily for the first day of August. I’m John McElroy and here are some of the latest changes going on in the global automotive industry.
FORD PICKING UP GM CASTOFFS
Ford Motor Company has been quietly collecting several key executives who used to run communications and marketing at General Motors. They all work at Team Detroit, a branch of WPP, the giant global marketing services company. Team Detroit is effectively Ford’s in-house agency. The former GM executives include Tom Kowaleski who is now running public relations for the Lincoln brand. Tom is the former vice president of communications for GM. Chris Preuss is another former VP of communications for GM, now working at Team Detroit. And Mark LaNeve, the former VP of marketing at GM was just hired as the COO of Team Detroit. It is very unusual to see so many former VP’s of General Motors now working at Ford.
BMW SALES UP, PROFIT DOWN
More earnings are coming in from Europe, and not unexpectedly the numbers do not look good, BMW’s earnings were especially disappointing even though the company is solidly profitable. Here’s why. BMW sold 476,000 cars in the second quarter, up more than 6% from a year ago. It’s revenues also went up more than 7% to over $23 billion. And yet, BMW’s net profit dropped 28% to $1.5 billion. Profitability dropped because costs rose faster than revenue, especially marketing costs.
FIAT 2Q EARNINGS
Fiat also reported its earnings, and to get a clearer idea of how the Italian company is performing we’ve stripped out all the Chrysler numbers. Fiat sold 472,000 vehicles worldwide, a drop of 7%. Its revenues also dropped 7% to $11.3 billion. And that sunk the company well below its break-even point. It lost over $300 million on the net bottom line, and all the signals suggest that those numbers are going to get worse as the year goes on.
VW SEES VALUE IN FLIPPING BURGERS
Volkswagen announced that it’s adding a third shift to its plant in Chattanooga, Tennessee that builds the Passat. This brings the total number of employees to over 3,300. By next year, the plant will have the capacity to build 180,000 vehicles which is 30,000 more than its original capacity. Before these new hires start building cars, they must complete 6 weeks of training at the Volkswagen Academy. Interestingly, the Detroit Free Press reports, that VW would rather hire former McDonald’s employees because they understand standardized work processes. They even prefer them over workers with manufacturing experience because they may have developed “bad habits.”
STALKS OF FURY (subscription required)
Genetically modified crops are wreaking havoc on farm equipment tires. According to the Wall Street Journal, the plants have tougher stalks which can easily puncture tires and leave farm equipment stranded in the fields. One of the largest farm tire makers, Titan International, is offering a tire with four layers of Kevlar to help with the problem. But they cost nearly twice as much as regular tires and most equipment manufacturers don’t offer them. However one farmer who has used them says he hasn’t had a flat in over a year. About 3 million farm tires are sold every year in the U.S.
VERANO TURBO MPG
Fuel economy numbers for the Buick Verano Turbo are out and the EPA says the small force fed sedan should deliver 20 mpg city and 31 mpg highway. In the combined cycle the Verano delivered 24 mpg. Interestingly, that puts the Verano 1 mpg behind the Regal GS. Despite the Regal weighing 370 pounds more than the Verano. While the Verano’s weight savings doesn’t pay off in fuel economy compared to the Regal, it is a half second quicker in the 0-60 sprint.
Coming up next, You Said It!
YOU SAID IT
Quite a few of you took issue with me congratulating Cadillac for doing the best underbody aerodynamics. Gregg Denning, “ATS underbody aero panels unique? Original? Give me a huge break! My friends at Porsche have been doing this for 20+ years!
And Chris Chow says, “Really John, HAVEN’T seen what they did on the Nissan GTR?”
I guess what I should have said is that, setting aside low volume, expensive sports cars, Cadillac is the first to bring this level of detail to mass production.
And Lex wonders is, “These Aero Panels under the ATS are similar to the ones that recently caused fires under the Chevy Cruze ECO?” Well, Lex, no. The fires in the Cruze were caused by leaking hydraulic fluid in manual transmissions or from improper oil changes, not by the panels. And besides, all Cruzes were affected, not the ECO.
A lot of you commented on the fact that we had Joel Ewanick on Autoline After Hours two weeks ago only to get fired last weekend. Phil says, How about going back and renaming the episode with Joel Ewanick to “Two weeks notice!” Great suggestion Phil. I’m sure Joel will land a pretty good job and GM still has not done a good job of explaining why they fired him.
That satin paint job we showed you on the Hyundai Veloster turbo sure generated a lot of comments. XA351GT says, “Good luck if you damage that matte paint. It is all but impossible to match. Yeah, and I want to see you hand wash that car in the northern states during the winter.” He makes a great point, you do have to hand wash those cars and I’d hate to do that when it’s freezing cold outside.
David Sprowl says, “That matte paint looks like colored primer to me. When I was a kid, we’d make fun of those primer/putty mobiles. Now people are paying extra for this? Oh the humanity!”
Thanks for all your comments and letters, we sure do like going through the all.
Before we go, have we got a great show coming up on Autoline After Hours this Thursday. The Autoextremist and I will go deep inside the GM Design center, with GM’s head of design Ed Welburn giving us a personal tour. We’ll show you their virtual reality lab, their color and trim room, a look at their mechanical assembly area, and we’ll end up inside what was Bill Mitchell’s personal garage. That’s all coming tomorrow night starting at 6 pm eastern time at Autoline.tv.
And that wraps up today’s report, thanks for watching, we’ll see you tomorrow.