Delphi, UAW, GM square off
With the retirement of Jim Padilla, Ford Motor Co. president and chief operating officer, set for July 1, the company has announced that he will not immediately be replaced as president and COO. Instead, Bill Ford, the automaker's chairman and chief executive officer, will head a six-person committee that will run the company. The “Ford Six” will be Bill Ford, Mark Fields, Anne Stevens, Lewis Booth, Mark Schulz and Don Leclair. Industry insiders say the move is significant because it puts into place Bill Ford’s hand-selected team for the turnaround. The Ford CEO recently took a 40 percent pay cut, part of his promise to take no salary, bonus or other awards until the automaker's automotive branch returns to profitability.
So while Bill goes hungry and GM sells off business units – last week’s GMAC sale for $14 billion being most notable -- Toyota is preparing to pass them all as the world’s largest automaker. Industry experts say that Toyota could do it in a year. According to the Washington Post, in fact, Toyota should post a record profit this year, after nearly doubling production and opening seven factories over the past five years. The Post claimed that Toyota’s success is due to a combination of efficiency, quality and…the Prius, which was in development for 20 years before it hit US shores on 2000. As a result, Toyota was at the right place at the right time, selling a fuel efficient vehicle when gas prices went up, while GM and Ford were still pouring money into SUV sales.
Fuel prices, Tahoe pot shots
Those two cars should continue to be popular, as the national average for a gallon of unleaded rose past $2.60 late last week. One month ago, the national average was $2.34 per gallon, according to the AAA.
Of course, there’s also ethanol. GM and Ford are well placed to catch the ethanol wave. Looks like they’re getting a hand from the government, too as US Energy Secretary Samuel W. Bodman called on automakers to make more vehicles capable of running on E85. E85 is a blend of 85 percent ethanol and 15 percent gasoline. For the 2006 model year, about 700,000 so-called "flex-fuel" vehicles were produced. Bodman also charged ethanol refiners and oil companies with expanding the availability of E85 and finding cheaper ways to produce it. Currently about 600 gas stations across the country sell E85 fuel.
The 2007 Chevy Tahoe with the 5.3-liter engine is E85 compliant. Which must have been lost on the contributors of Chevy’s recent online “The Apprentice Tahoe Commercial Contest.” Contestants were to create their own glorious Chevy Tahoe clip, and boy – did they ever, many of which were critical of the vehicle as a gas guzzler, posting commercials that lectured viewers on the benefits of walking, and warning about our dependency on foreign oil.
New Durango, CAFÉ critics
Finally, we check on the new café standards, recently imposed by the government and accepted by automakers. It turns out that environmentalists aren’t so crazy about them. One group has even filed a lawsuit over the new light truck fuel economy standards. The Center for Biological Diversity, which filed the lawsuit, claims that the Bush Administration did not properly determine the maximum feasible fuel economy for light trucks as federal law requires, the lawsuit says. The center also claims the federal rules illegally attempt to keep states from imposing their own controls on greenhouse gas emissions. That’s important, because California, along with nine other states, require more stringent clean air laws than the government. According to the National Highway Traffic Safety Administration, they considered comments from outside groups before adopting the rules. NHTSA believes the rules accurately reflect the intent of Congress.
Photos courtesy of the automakers