March 11th, 2013 at 12:00pm
Over the last several years, automakers boosted car sales globally thanks to explosive growth in emerging markets, but now some of those markets are starting to cool down. In an effort to boost electric vehicle sales, Nissan is making some management changes. Ford announced the introduction of two all-new Transit models. All that and more, plus John McElroy gives his insight on how a former GM exec ended up on the board of directors at Toyota.
Hello and welcome to a brand new week of Autoline Daily. Now let’s get to the most important news that’s happening in the global automotive industry.
EMERGING MARKETS COOL
Over the last several years, automakers boosted car sales globally thanks to explosive growth in emerging markets, but now some of those markets are starting to cool down. Though the final count is not yet in, car sales in India could fall for the first time in a decade. Through the first 11 months of last year, sales hit 1.7 million units, a decline of 5 percent. And last month in Brazil car sales dropped over 5 percent compared to the year before. However sales are up close to 6 percent overall for the first two months of the year in Brazil.
NISSAN’S MANAGEMENT MOVES
Last week, Toyota made a lot of management changes. And today it’s Nissan’s turn. In an effort to boost electric vehicle sales, the company is putting its Chief Operating Officer, Toshiyuki Shiga, in charge of its EV business. Other notable changes include promoting its head of global marketing communications, Simon Sproule, to Director of communications for the Renault-Nissan Alliance. And Jeff Kuhlman was promoted to Vice President of Nissan’s global communications.
RANGE ANXIETY LOANER
Range anxiety may be the largest hurdle that any electric vehicle has to overcome. The folks at BMW are trying to leap that hurdle by developing a program that would provide a free gasoline-powered loaner car to purchasers of its i3 electric vehicle for trips longer than the EVs 80 to 100 battery only range. A BMW spokesperson also says an optional 2-cylinder gasoline scooter engine is available as a range extender at a cost of about $4,000. The i3 will hit showrooms in the first quarter of 2014.
TRANSIT CHASSIS CAB AND CUTAWAY
Ford announced the introduction of its all-new Transit chassis cab and cutaway models. The chassis cab features an enclosed cabin with a bare frame that is ready to accept an aftermarket body module and the cutaway model has an open rear portion of the cabin that can be paired with shuttle or school bus bodies. Either model can be had in three different wheelbases with gross vehicle weight ratings of 9,000 to about 10,500 pounds. The Transit chassis cab and cutaway will be built at the company’s Kansas City assembly plant. And in other Ford news, a report out of Road and Track confirms that the 4-cylinder EcoBoost Mustang will be coming to the U.S. and it may not even be the base engine.
Say, how did a former executive from General Motors end up on the board of directors at Toyota? That story, and it’s a good one, is coming up next.
Earlier in the show we touched on all the management changes at Toyota last week, including the appointment of former General Motors executive Mark Hogan to Toyota’s board of directors. Hogan is only the second non-Japanese ever appointed to the board, and the first non-Toyota employee. Here’s the backstory to this development.
Mark Hogan was a rising star at GM. After starting at the Electromotive Division, he was awarded a scholarship to get his MBA at the Harvard Business School, and then went on to work at GM’s New York Treasurer’s office. For more than half a century, a Harvard MBA and a stint in the Treasurer’s office was THE definitive career path for all of GM’s chairmen.
Hogan started moving up the ranks at GM and when it formed its joint venture with Toyota, what they called New United Motors Manufacturing, Inc., more commonly known as NUMMI, Hogan was one of the first GM executives assigned to go there. Toyota also sent one of its rising stars, a guy named Akio Toyoda. The two worked closely together and formed a lasting friendship.
Years later Hogan was assigned to GM do Brasil, where he put his knowledge of the Toyota Production System to practice, making GM do Brasil one of the most efficient operations within the company. Hogan also laid the groundwork for a revolutionary approach to vehicle production, involving modular assembly, with the modules made by suppliers. They called it Blue Macaw and it dramatically cut costs.
Based on that success Hogan was called back to the ‘States and assigned the task to figure out how GM could make small cars profitably in America with UAW labor. He borrowed the same ideas from Blue Macaw, only this time named it Project Yellowstone, and announced his intentions to implement it in GM plants in Lordstown, Ohio and Lansing, Michigan.
But then-UAW president Steve Yokich, a combative and in my opinion, a mean-spirited man, went ballistic. He spoke derogatively of Hogan demanded that GM fire him. Sure enough, GM muzzled Hogan and hustled him off to some made-up new venture called e-GM. Supposedly it was a new effort to harness the internet to make GM more competitive, but no one at GM, not even Hogan, could clearly explain what e-GM was all about. He hung around for a while, but then left the company. The e-GM effort was quietly shut down after that.
I always wondered what would have happened if Hogan had been allowed to make Project Yellowstone work. Maybe the company would still have gone bankrupt, but who knows? Maybe it would have not. What we do know for sure, is that Toyota is going to be the beneficiary of Mark Hogan’s knowledge and experience, something that is going to help Akio make the Japanese automaker become an even fiercer competitor.
Anyway, that’s how I see it, and that brings us to the end of today’s show. Thanks for watching, and please join us again tomorrow.