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New Boss Aims to Transform Acura into Luxury Leader

New products, new technologies needed to get "butts in seats."

by on Apr.24, 2014

Mike Accavitti with a prototype Acura TLX.

Considering the cost of bringing a car to market, every new vehicle is important, but few more so than the 2014 Acura TLX making its first public appearance at the New York Auto Show this week.

Acura has scored a pair of solid hits with its two SUV models, the RDX and bigger MDX, but as the third sedan in the Acura line-up, the TLX is meant to fill a critical gap between the Japanese maker’s entry-level ILX and its recently added flagship, the RLX.  It’s no easy challenge, going up against a range of major competitors such as the Mercedes-Benz E-Class, BMW 5-Series and Lexus GS lines.

In the Know!

The TLX is “critically important,” suggests Mike Accavitti, the long-time Chrysler executive who was recently named head of the Acura division. “We have to start somewhere,” he adds.”

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Hammered by Recalls, GM in the Black – Just Barely

Maker suffers 85% drop in January - March earnings.

by on Apr.24, 2014

GM managed to keep itself in the black for the first quarter, after covering hefty recall-related expenses.

After writing down more than $1.3 billion to cover the cost of a burst of embarrassing recalls, General Motors saw its earnings for the first quarter of 2014 fall by more than 85%, it reported today, though it was still able to squeak out a modest profit.

The $125 million net earnings, at 6 cents per share, came in under the 9 cents consensus among top industry analysts. Some were even more bearish, Brian Johnson, of Barclays Plc, forecasting a one cent loss for the January to March quarter. But the crisis that began with the recall of 800,000 vehicles due to a faulty ignition switch in mid-February – and which ultimately saw GM call back nearly 7 million vehicles by the end of March – is likely to take its toll for some time to come.

By the Numbers!

“The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market,” said GM CEO Mary Barra, in a statement aimed at putting a positive spin on the results. “Our focus remains on creating the world’s best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally.”

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Both GM, Ford Expected to See Sharp Drop in Q1 Earnings

GM likely to take major hit as it pays for nearly 7 million recalls.

by on Apr.23, 2014

GM CEO Mary Barra will see a sharp decline in earnings for her first full quarter as CEO.

The numbers aren’t likely to look very good when General Motors and Ford Motor Co. release their first-quarter earnings results this week, both makers expected to post sharp declines from year-ago levels.

Ford had signaled a likely slide late last year as a result of the numerous new product launches it will have in 2014. But GM’s anticipated downturn is likely to be significantly greater than first forecast as a result of its on-going recall problems – an issue expected to continue to haunt new CEO Mary Barra for some time to come.

Breaking News!

A consensus of industry analysts forecasts GM will deliver a meager 9 cents per share in earnings for the first three months of 2014, and Brian Johnson, an automotive analyst with Barclays Plc is even more bearish, predicting the U.S. giant will go a penny into the red. Prior to the announcement of GM’s initial ignition switch recall in mid-February, Johnson was looking at a profit of 20 cents, which would still have been down sharply from the 67 cents per share it earnings during the first quarter of 2013.

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Lincoln Looks East – But Can China Save American Icon?

Luxury maker betting China could become its largest market.

by on Apr.23, 2014

Lincoln is betting it can gain ground in China by focusing on its dealer experience.

It once vied with rival Cadillac for dominance in the huge U.S. luxury car market, but the last two decades have been tough for Lincoln. Sales have steadily slid to the point that some anticipate parent Ford Motor Co. might eventually abandon the once-grand marque.

Lincoln has rolled out several new products over the last two years, and it plans to add at least two more by 2016, but that’s a fraction of what rival Mercedes-Benz has in store – at least one all-new or completely updated product every three months through the end of the decade.

Auto Show News!

While Lincoln officials acknowledge they can’t keep up with that product blitz, they’re far from ready to admit defeat. But while they continue to struggle to find ways to lure more American buyers back to the brand, they’re looking East, towards China, to gain some much needed momentum.

“It’s strategically important for us to go to China,” said Matt Vandyke, Lincoln’s global director, a few days before the Ford luxury brand made its official debut at the 2014 Beijing Auto Show.

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Feds Launch Probe of 2014 Chevy Impala Brakes

Move comes as GM notifies 1.4 million motorists replacement ignition switches are ready.

by on Apr.23, 2014

The 2014 Chevrolet Impala was named Best in Class by Consumer Reports.

Federal investigators have launched a preliminary probe of the 2014 Chevrolet Impala following a report that the big sedan’s emergency braking system might activate without warning or driver input.

The probe comes as General Motors shakes up its internal product development system in a bid to catch potential safety problems as early as possible. GM is facing a number of separate investigations stemming from the handling of a recall now involving 2.6 million vehicles equipped with defective ignition switches linked to at least 13 deaths.

On Top of the News!

On Wednesday, GM said it had notified 1.4 million U.S. motorists they could schedule repairs for vehicles covered by the ignition switch recall.

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GM Shakes Up Engineering in Wake of Recall Scandal

Maker hopes to catch potential safety problems earlier.

by on Apr.23, 2014

GM Product Chief Mark Reuss unveiling the Corvette Z06 during the 2014 Detroit Auto Show.

General Motors continues to shake up its senior management ranks in the wake of the ongoing ignition switch recall scandal, this time ousting its global engineering chief and splitting the job into two new posts with a goal of catching potential safety problems earlier on.

The “retirement” of 55-year-old John Calabrese comes shortly after GM’s directors of Human Resources and Public Relations announced their departures amidst a crisis that could see the automaker face criminal charges levied by the Justice Department for the decade-long delay in ordering a recall of defective ignition switches linked to at least 13 deaths. GM has also been accused of delaying another recall while federal regulators have launched an investigation into braking problems involving the company’s new Chevrolet Impala sedan.

Your Auto News Source!

“We feel that just an organizational change is not going to solve everything,” said Mark Reuss, the GM veteran who took over as global product development director late last year. “We have to have the right people with the organization, with the right leadership and with the right processes in place. … We know we can do it and we are going to do it.”

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VW May Have Big Plans for Little NMC Concept

Show car a Jetta-based version of VW CC model.

by on Apr.22, 2014

Volkswagen calls the NMC a "midsize" concept, but it's based on the same platform as the compact Golf and Jetta models.

As that old baseball adage goes, you can’t tell the players without a scorecard. Well, we’re betting you’d be able to pick out Volkswagen’s New Midsize Coupe Concept in the line-up.

This striking new design might just as readily be called the Baby CC, as it’s a somewhat downsized version of the German maker’s current, coupe-like sedan, and could very well join the VW line-up in the near future. But it’d likely be more of a compact than midsize, the show car sharing the same MQB modular platform as the current Volkswagen Golf and next-gen Jetta models.

What a Concept!

Making its debut at this week’s Beijing Auto Show, the NMC is clearly a size class down from the Volkswagen Passat sedan, at a total length of barely 15 feet.  So, how does it qualify as a midsize?

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EV Buyers Tend to Be Younger, More Affluent Than Hybrid Owners

One in five battery-car owners has income topping $175,000.

by on Apr.22, 2014

The high cost of the Tesla Model S has raised the average income for all EV buyers.

Motorists who purchase battery-electric vehicles tend to be younger and more affluent than drivers who buy more conventional hybrid vehicles, according to a new study.

That’s in line with other studies that have found the Tesla Model S has become one of the most popular products among motorists in the nation’s wealthiest zip codes.

Data Check!

“At first glance, one would imagine that consumers purchasing either a hybrid or electric vehicle would be nearly identical; both are environmentally conscious, are of similar ages and have higher income levels,” said Melinda Zabritski, senior director for Experian Automotive. But the data tracking firm found surprising differences.

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Mulally to Retire, Fields Named New Ford CEO

New Chief Executive to face numerous challenges.

by on Apr.21, 2014

Mark Fields, who reportedly will become Ford CEO at the end of the year, shown delivering the keynote address at the NY Auto Show last week.

Ford Motor Co. CEO Alan Mulally will step down at the end of the year, according to a variety of news reports and company sources, with the maker’s current Chief Operating Officer Mark Fields to step in as his successor.

The move – which Ford declined to comment upon – is no surprise to those familiar with the automaker’s plans which were largely laid out in late 2012 when the 52-year-old Fields was appointed to the COO position, a senior company insider at the time saying the top spot was “Mark’s to lose.”

The Last Word!

“This is no surprise whatsoever,” said George Peterson, a former Ford analyst and now head of the consulting firm, AutoPacific, Inc. “Ford has been pretty straightforward about doing what they said they would do.”

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Subprime Auto Lenders Rein Back

Shift could slow automotive recovery.

by on Apr.21, 2014

Sub-prime lenders aren't expected to leave the market, says Moody's, just pull back slightly. Image courtesy: EZAutoFinance.org.

U.S. auto sales got off to a slow start this year, and though they showed a modest rebound in March, industry analysts are questioning whether 2014 will continue to see the sort of recovery forecast for the American car market this year – especially if lenders begin reining in financing.

And that’s a possibility suggested by a new study by financial tracking firm Moody’s showing that U.S. subprime auto lenders are “exercising more caution,” especially when it comes to higher-risk customers.

Your Automotive Source!

But the study does not seem to indicates a wholesale slowdown, Moody’s concluded. It points to slower growth in non-prime lending by banks and credit unions, as well as so-called “captive finance” firms operated for or by the various automakers.

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