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November 6th, 2009

How Leo DiCaprio started a car company

Posted by: Bernie Woodall

Henrik Fisker, the storied car designer who has shaped Aston Martins, Fords and BMWs, told the Reuters Autos Summit this week that he now wants a starring role in the green revolution.

But he also wants to make the world safe for sports cars for generations to come.

“Being a car enthusiast and loving cars, to be quite honest, I could not imagine a life without a beautiful, fast sports car,” Fisker said. “I needed to do something to make sure that I could drive one of those nice cars, my children could drive one of those beautiful, fast cars.”

So what was Fisker’s inspiration? What was the epiphany when he realized that the world was ready for the upcoming Fisker Karma, a $90,000 plug-in hybrid with 50 miles of all-electric fun?

Leonardo DiCaprio…in a Prius.

“A couple of years ago it started, by people who were maybe a little ahead of their time. You saw some movie starts like Leonardo DiCaprio buying a Prius.

“He could have bought any car in the world, and I remember seeing that on television and thinking to myself, you know, when you’ve got a guy who could buy any Ferrari or Rolls Royce and he’s buying a Prius, you know something is changing dramatically.”

(Henrik Fisker photo by Rebecca Cook of Reuters; Leonardo DiCaprio photo by Mario Anzuoni of Reuters.)

November 3rd, 2009

AUDIO - Mornings with Ron: A Reuters Autos Summit tradition

Posted by: Patrick Fitzgibbons

A few years ago, there was a book out called “Tuesdays with Morrie.” At Reuters, though, we spend our Tuesday mornings during Auto Summits with Ron.

It wouldn’t be a Reuters Autos Summit without our yearly visit from United Auto Workers head Ron Gettelfinger … at the crack of dawn.

Gettelfinger is not one to loaf around and show up at our summit at a leisurely hour of, say, sometime after the sun rises. Oh no. Gettelfinger was scheduled to kick off our Tuesday slate of guests at 7:00 am. But by now we know better.

In fact, when coming into the building this morning sometime after 6:00 am, Gettelfinger was already in the lobby of the Detroit Chamber of Commerce building doing a radio call-in program on his cell phone.

The sun would rise shortly thereafter.

But despite the hour, Gettelfinger is always an interesting person to interview, as he has his eye on all parts of the autos industry. And he didn’t disappoint this year, either.

After a year like this has been, there is a tendency to want to sit back a little and let all of the seismic events sink in. But Gettelfinger sees the real challenges to the autos industry to be down the road.

 (Click here to hear Ron Gettelfinger’s comments)

New technologies, new hiring patterns and new financings will all be the order of the day for the next 10 years. So while this has been a rough-and-tumble year, the fun hasn’t ended yet, he suspects.

The Reuters Autos Summit runs through Thursday in Detroit and Paris and features a global slate of guests from the big manufacturers, dealers and suppliers.

November 3rd, 2009

Upstarts!

Posted by: Scott Malone

The U.S. government has pumped more than $100 billion into Detroit over the past year to keep automakers General Motors and Chrysler alive. But some of the sector’s remaining capitalists are having a hard time stomaching a $25 billion Department of Energy loan program intended to spark new developments in electric cars. 

Start-ups Fisker Automotive and Tesla Motors have won about $1 billion in combined funding, while longtime players Ford and Nissan have received substantially larger loans from Washington to work on vehicle electrification — a technology the White House and many in the industry hope will reduce the United States’ dependence on imported oil and lower emissions of carbon dioxide, a leading greenhouse gas. 

Funneling federal money to new entrants to the automaking world does not sit right with Tim Leuliette, chief executive of parts supplier Dura Automotive. 

“If there’s a real market for electric vehicles, the OEMs will do it,” Leuliette said, using industry jargon for automakers. “We don’t need to have people who have never built a car in their life take $1 billion of our tax money and say ‘I can do it too.’” 

Government funding muddles market signals, Leuliette argued at the Reuters Autos Summit in Detroit.

“When government writes a check, it says the smart money investors are hesitant to fund it,” Leuliette said. “When markets say it’s now wise enough … there’s more than enough money.” 

For his part, the founder of Fisker Automotive — which aims to build plug-in hybrid cars at a former GM plant in Wilmington, Delaware — said government funding is a logical way to kick start a technology that private U.S. companies have been slow to focus on. 

“Do we just sit and wait for the Chinese and the Japanese or Europeans to develop this and then we join later? Or do we actually this time around, try to take the lead?” said Henrik Fisker, whose plug-in hybrids would be able to travel for short distances on just the electricity stored in their batteries, which can be charged off the electric grid. 

“This is a moment in time, we cannot let this pass. We already let the hybrid pass - Toyota in the consumer’s mind, invented the hybrid and owns the hybrid - the average consumer doesn’t know that GM has more hybrids than Toyota,” Fisker said. “If an American company comes first with a plug-in hybrid, and we will be followed closely by the Chevy Volt in another segment, I think that is where America then has a chance in the consumer’s mind to take the lead, and not only in the U.S., but worldwide.”

November 3rd, 2009

AUDIO - Commercial real estate: The auto industry’s next big (bad) thing

Posted by: Patrick Fitzgibbons

The U.S. auto industry has had one heck of a year.

Sales have fallen off, credit has been pretty much nonexistant and two of the major U.S. automakers were bankrupt. Other that all that, things were fine.

But Bill Diehl, chief executive of advisory firm BBK, said at the first day of this year’s Reuters Autos Summit, that one of the main concerns for 2010 (if it’s not THE main concern) is the industry’s overall exposure to commercial real estate.

We have been hearing about the problems with commercial real estate in many other sectors of the U.S. economy and Diehl gave the strongest statement so far about the auto side.

(To hear Diehl\’s comments, please click here)

The Reuters Autos Summit continues through Thursday in Detroit and Paris.

November 3rd, 2009

The secret lives of auto executives

Posted by: Scott Malone

Ed Whitacre sneaks off to breakfast at a Detroit greasy spoon. Sergio Marchionne’s attention to detail extends to the condition of his factories’ bathrooms. And Bill Ford helped save his great-grandfather’s company by hocking the blue oval. 

These are just a few of the glimmers of top Detroit auto executives’ lives that you get when you sit down with Ron Gettelfinger, head of the United Auto Workers union. 

Marchionne, the chief executive of Italian automaker Fiat — which pulled Chrysler out of bankruptcy this year, seems to be “extremely respectful” of his workforce, Gettelfinger told the Reuters Autos Summit in Detroit on Tuesday. 

“I know he’s went out into the facilities and one of the things that he did was walk into the restroom to inspect it. Now you don’t normally see that happen,” Gettelfinger said. “But he truly believes in the power of the people, the value they add to the process.” 

General Motors chairman Whitacre is also a fan of unannounced factory visits, a detail Gettelfinger may have picked up at one of their morning meetings. 

“There’s a little dive up the street that we go up here and have breakfast sometimes,” Gettelfinger said. 

He also recalled a call that came from then-Ford CEO Bill Ford three years ago, when the automaker was preparing a major debt offer — a move that helped it to be the only U.S. automaker to avoid bankruptcy this year. 

“I remember him very well calling me to say, ‘In case you hear anything, we think now is the time to go out into the market and build up some debt.’ And the term he used was ‘hock the blue oval,’” Gettelfinger recalled. 

That move, while painful at the time, was likely a major reason the company did not have to turn to Washington for a bailout as rivals GM and Chrysler did, Gettelfinger said.

“Ford went out and did it the hard way,” Gettelfinger said. “And I think that has resonated with the buying public.”

November 3rd, 2009

Diehl: Ford & UAW need to “work at it” a little more…

Posted by: Ruben Ramirez

William Diehl, chief executive of advisory firm BBK says Ford and the United Auto Workers union need to work a little harder to come to some sort of agreement that puts the automaker on a more level playing field with its rivals. Click here to listen to what he had to say at the 2009 Reuters Autos Summit.

Diehl on Ford-UAW contract talks from Reuters TV on Vimeo.

November 2nd, 2009

AUDIO - The ‘new normal’ for the U.S. auto industry

Posted by: Patrick Fitzgibbons

A few years ago, one of the guests at our annual Reuters Autos Summit — Tom Stallkamp from Ripplewood — pretty much stopped everyone dead in their tracks by predicting that auto sales in the United States was likely to fall to an obscenely low level of 14.5 million.

Those were the days.

Of course, Stallkamp was making that prediction at a time when U.S. car manufacturers were selling in the neighborhood of 16 to 17 million a year. If the number hits 14.5 million in 2010, people will be wild with enthusiasm as most now expect something in a range of 10 to 11 million.

That would be about flat to a little higher than sales this year.

On the first day of Reuters annual sojourn to Detroit for the Reuters Autos Summit, defining what the “new normal” is going to be for everything about the auto industry is much on everyone’s mind. What will happen with the big manufacturers, the dealerships, the suppliers.

It’s a lot to assess all at once.

Bob Carter, head of Toyota’s U.S. operations kicked things off for the summit by talking about what he sees for the coming year.

The Reuters Autos Summit runs through Thursday in Detroit and Paris. For an audio clip of Carter’s comments, please click this link (Toyota’s Bob Carter at the Reuters Autos Summit).

November 2nd, 2009

BMW keeping wary eye on rivals

Posted by: Scott Malone

After a year of unprecedented turmoil in the auto industry, BMW’s U.S. head smells blood in the water.

Changes in ownership at some of its historic European rivals may present the German luxury automaker with a chance to grab market share. 

But even as Jim O’Donnell saw weaknesses to exploit, he raised the worry that one of Detroit’s most storied car brands, Cadillac, could take out of the market of the company that calls its vehicles “the ultimate driving machine.” 

As Cadillac’s parent company, General Motors Corp, went through a bankruptcy that forced it to cut thousands of jobs and shed brands, BMW picked up Cadillac customers and dealers. But a slimmed down GM could present a renewed threat, said the president of BMW’s North American unit. 

“Going forward, I actually see Cadillac as one that could be potentially a serious rival,” O’Donnell told the Reuters Autos Summit in Detroit. “Now that GM is only going to concentrate on four brands, if I was at GM, I would concentrate on Cadillac and really try and reestablish it. But if you look at the last year, and no wonder because of the turmoil in the marketplace, has been losing sales quicker than the market.”

Even as he sees a renewed threat from Detroit, O’Donnell said he thought European rivals could become more vulnerable. BMW sees a chance to snatch customers from Saab — which GM aims to sell to Swedish luxury car maker Koenigsegg — and Volvo — which Ford is negotiation to sell to Chinese automaker Geely. 

“Where are all the Saab customers going to go? And there’s a great deal of uncertainty over Volvo. Where are all the Volvo customers going to go? Even though they’ve done well these last three months, I still think as they come under the ownership of Geely, will they have the same believe in the brand? I don’t know,” O’Donnell said. “But we will try to exploit it.”

November 2nd, 2009

Sticks and Stones

Posted by: Scott Malone

When General Motors rolled out its new “May the Best Car Win” ad campaign this fall, it turned its competitive fire on Toyota Motor Corp, rather than one of its Detroit competitors. 
Toyota, which last year displaced GM as the world’s largest carmarker, takes the ads — which compare the Chevy Malibu with the Toyota Camry — as something of a compliment. 
“When Ford names Toyota and not Chevrolet and when Chevrolet names Toyota and not Ford, that speaks to some consumers about our position in the market,” Toyota group vice president and general manager Bob Carter told the Reuters Autos Summit in Detroit. “So it’s not all bad.” 
But the Japanese automaker has no interest in getting drawn into an advertising tit-for-tat similar to Apple Inc’s “Get a Mac” ads, which compare a young, hip actor representing a Macintosh computer with a dowdy middle aged actor playing a PC run by Microsoft’s Windows operating system. 
“We think the most effective way to approach the market is to talk about our products and our brands,” Carter said.

October 19th, 2009

Washington divided, more trouble ahead for Obama?

Posted by: Ruben Ramirez

Washington insiders say that not since the 1890’s have the people that represent the U.S. been so divided. From Gay rights to Afghanistan lawmakers are at polar opposites on issues that are on the Obama administration’s agenda. What’s next? And, what’s likely to get the green light or the stop sign?