August 19, 2010

UAW's Bob King Reiterates Ban on International Cars on Union Property
The Detroit News reports that United Auto Workers (UAW) President Bob King this month reiterated the union's longstanding policy to ban nonunion vehicles on UAW property, but did so in a more hands-on and publicly forceful fashion that separates him from his predecessors. "Buying a U.S./UAW vehicle makes a difference," King wrote in a two-page rebuttal to a blog post written in July by a Kansas City Business Journal reporter who was recently ousted from the parking lot of UAW Local 249 for driving a Toyota Camry. The reporter, James Dornbrook, wrote he was forced to move his car by a UAW local member who refused to identify himself. Dornbrook also noted his Camry was assembled at Toyota's Georgetown, Ky., factory and had more American-made parts in it than the Ford F-150 built at the Kansas City plant, "which recently got knocked off the Cars.com American-made Index's top 10 list" by the Camry. Click here for Dornbrook's account of the incident. King decided to use the incident as a "teaching moment" and wrote the long impassioned letter, addressed directly to the reporter, again charging that international automakers deny their U.S. workers the right to organize - an accusation the automakers deny. Click here to read King's response to Dornbrook. For AIADA's take on unionizing issues, click here. To read more about the UAW's ban on international vehicles on its property, click here.

Volvo Will Buff Its Brand
Volvo Cars will have to upgrade its image to more clearly define its brand, said Stefan Jacoby, the new chief executive of the Swedish auto maker, which was recently acquired by China's Zhejiang Geely Holding Group Co. Creating bigger and more luxurious cars is one direction Geely Chairman Li Shufu, who also recently became chairman of Volvo Cars, has suggested as a way to revitalize Volvo. Li projects the brand will turn profitable this year. According to the Wall Street Journal, Jacoby said he "totally agrees with Chairman Li that we have to further upscale the Volvo brand." As part of that effort, Volvo will try to search for "a clear definition of what the brand stands for." An additional way to upgrade Volvo, he said, may be to pump more emotion into the brand, which has centered on safety and wholesomeness, by going retro, as Volkswagen AG and BMW AG have done by creating modern versions of classics such as the Beetle and the Mini Cooper. In interviews, Geely chairman Li has said a key ingredient of Geely's strategy for Volvo now is to turn it into a more full-fledged premium brand by adding bigger and more luxurious cars to the product lineup. Click here for more on Volvo's plans to ramp up its brand image.

Mini is Hoping a Bigger Model Bulks up Sales
Mini, battling waning sales of its distinctive small cars, is taking it to the max. According to MSNBC, the new Countryman crossover SUV is just four inches wider and six inches taller than the British maker's classic Mini Cooper. Yet by adding some extra room for kids and cargo, including 16 inches of length, the carmaker could well revive sales for a nameplate that has faded a bit from its peak years. The new Countryman, expected to go on sale in January, delivers an assortment of firsts: Not only is it the largest vehicle ever delivered by the BMW subsidiary, but it's the first crossover/SUV, the first four-door model, and Mini's first product to offer optional all-wheel-drive. AIADA recently got a first look at the Countryman. Click here to read the initial run-down of the vehicle. The crossover is the first Mini not to be built in Oxford, England. Instead, it is rolling down an assembly line in Graz, Austria, operated by Magna Steyr, a facility that has handled a variety of niche and specialty products over the years. IIHS projects that the new model could yield U.S. sales of up to 17,000 units next year alone. That could help push the brand's volume back into overdrive, to a projected 70,000 vehicles overall. Click here for more on the new Countryman's role in Mini's plans to revive U.S. sales.

GM Files IPO Paperwork with SEC to Sell Stock
General Motors filed documents Wednesday asking the Securities and Exchange Commission to approve an initial public offering of shares (IPO), a move that would let taxpayers begin to recoup money spent rescuing the car company a year ago. According to USA Today, the 547-page filing didn't set a share price. Thus, it didn't forecast how much taxpayers will get back of their $50 billion investment as the government begins to sell down the 60.8 percent U.S. stake in GM - 304 million shares - after the IPO. GM said the market will set the price of shares. Francis Gaskins, veteran IPO analyst, predicts, "Taxpayers will take a 50 percent loss." That's because Gaskins and many other analysts assume investors won't value GM higher than the $42 billion market capitalization of healthier Ford Motor. Ford and GM had about the same first-half revenue, but Ford profit was twice GM's. Valuing GM even with Ford would make GM's 500 million shares worth about $84 each. But Treasury would need to sell its shares for an average of roughly $167 for taxpayers to be fully repaid. In a statement, the U.S. Treasury said it will decide later "whether and at what level to participate in the offering." Click here for more on GM's IPO.

Volkswagen to Bring Back Phaeton to U.S. After Flop
Automotive News reports that Volkswagen AG plans to bring back the $85,000 Phaeton to the U.S., where the flagship sedan flopped and was withdrawn in 2006. Click here for a photo. The Phaeton's U.S. relaunch is part of the German carmaker's aim of tripling its share of the world's second-largest market by 2018. "We have our eyes firmly set on the U.S. market," Juergen Borrmann, director of Volkswagen's plant in Dresden, Germany, where the Phaeton is built, said in an interview. The model for the U.S. will be completely redesigned and retooled, he said. Former VW CEO Bernd Pischetsrieder pulled the Phaeton from the U.S. four years ago after the car failed to meet sales goals and called a 20,000 global target a "pipe dream." "The U.S. is a most lucrative market for high-end sedans and VW has to tackle that potential if it wants to credibly expand its U.S. presence," said Willi Diez, head of the Nuertingen, Germany-based Institute for Automobile Industry, a state-funded think tank. Volkswagen this year is introducing an updated Phaeton, which has new front and rear sections, an interior upgrade, and a wider selection of engines, as part of the model's first overhaul since 2007. The face-lifted Phaeton entered European showrooms in June and goes on sale in China next month. To read more on VW's plans to reintroduce its Phaeton sedan to U.S. showrooms, click here.

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