This Corvette will save Detroit

By Rosemary Westwood - Sunday, January 20, 2013 at 5:00 AM - 0 Comments

Jessica Darmanin

If the American auto industry were to write its own Hollywood-style comeback story—from the depths of its 2008 crash to its improbable return to the top of the world—the ending might look a lot like the 2013 Detroit auto show. And cast in the starring role would be General Motors’ 2014 Corvette Stingray.

The company unveiled its cherry-red sports car to eager journalists on the eve of the world’s most important auto show this week, almost 60 years to the day after it first introduced the revered American nameplate. By the next morning the brightly lit and packed Cobo Center was buzzing about one car above all others, as cameramen and their tripods crowded around the ’Vette to get a closer look at its race-car-influenced aluminum body and luxe interior. GM’s marketers gushed that it is faster than a Ferrari, more nimble than a Porsche and $30,000 cheaper than either. America had, for the first time in memory, unveiled the kind of car that kids might hang a poster of on their wall. High-tech, even fuel-efficient, it left no question: America is back. A “technological tour de force,” said GM’s North American president Mark Reuss.

Related links: 

• Jessica Darmanin’s Instagram diary 
• The best, worst and weirdest at the Detroit auto show 
• Return of the trucks
• Will the Furia help the Toyota Carolla become cool?
• Cancel the obituaries

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GM Canada to move new Camaro production to Michigan plant

By The Canadian Press - Wednesday, December 19, 2012 at 2:06 PM - 0 Comments

OSHAWA, Ont. – General Motors is moving production of the next version of its Camaro sports car from its Oshawa operation in Ontario to a plant in Michigan.

In a statement, General Motors Canada said Wednesday that “lower capital investment and improved production efficiencies were key factors” in the move.

The current version of the Camaro is made at GM’s Oshawa flex plant, which employs some 2,000 people and also produces the Buick Regal and Cadillac XTS.

The Canadian Auto Workers’ most recent contract with GM, which was ratified in September, guaranteed production of the Camaro in Oshawa only until the end of the current generation.

GM said the Camaro is the only rear-wheel drive vehicle assembled at Oshawa.

Production of the new Camaro will be consolidated with the production of Cadillac CTS and ATS, also rear-wheel drive vehicles, in Michigan in a bid to improve efficiency.

The Canadian Auto Workers union, which represents workers at the plant, said the decision will cut production in Oshawa by as much as one third starting in late 2015 or early 2016, and called on the company to replace the production to protect the jobs at the plant.

“General Motors has once again shown a complete and utter disregard for its workers and also Canadians in general, whose tax dollars kept the company out of bankruptcy,” said CAW president Ken Lewenza.

“This decision will cause yet another devastating shock to the Durham Region and the country’s auto industry.”

The union said the number of jobs that may be lost was not yet known, but added the move could also affect parts companies in the region.

The move follows a decision by GM to invest $185 million in connection with the launch of new versions of the Cadillac XTS and Chevrolet Impala, that will be built in Oshawa.

The U.S. automaker also said it will add a third shift in connection with the new Impala.

The consolidated line in Oshawa will continue to produce the current generation Chevrolet Impala and Equinox until June 2014.

GM said it will continue to meet production targets agreed to with the federal and Ontario governments in 2009.

Ottawa and Ontario contributed $13.7 billion to help bail out North American automakers GM and Chrysler more than three years ago and combined own about nine per cent of GM’s common shares.

In its most recent deal with GM, the CAW agreed to a plan that would see new employees take longer to reach the top of the pay scale as well as receive a hybrid pension plan.

The deal will also GM commit to creating, maintaining or extending 1,750 jobs.

That included 900 jobs through the addition of a third shift at the flex plant in Oshawa, Ont., 750 jobs in connection with the extension of the life of the consolidated plant in Oshawa and about 100 new positions created or maintained at a plant in St. Catharines, Ont.

The agreement also reversed concessions that allowed GM to use temporary workers indefinitely, and limits the use of those workers during the launch of a new vehicle.

Chevrolet Sonic ad angers Montreal artists

By Jacob Roberts - Monday, November 5, 2012 at 12:04 PM - 0 Comments

John F. Martin/AP

The advertising campaign for the Chevrolet Sonic, a compact car aimed at young, urbanites, fittingly featured it in a gritty cityscape — downtown Montreal — in front of a large graffiti mural.

It was a hit with car buyers. But not so impressed were the 26 artists who made the mural for an annual street art festival, Under Pressure. The artists were outraged their work was being used to sell a car and that they had not been compensated. For the past year, they have been engaged in an aggressive social media campaign against General Motors and the ad firm MacLarren McCann and Cossette.

According to General Motors, the use of the graffiti was inadvertent. (The commercial was eventually pulled and the ad campaign adjusted). “It was never our intention to use this artwork without the permission of the artists,” says Faye Roberts, a spokesperson for General Motors Canada, who adds the company is now “eager to resolve the matter.”

Sterling Downey, co-founder of the Under Pressure festival and spokesperson for the artists involved, says the use of the work was no accident. He says the ad went so far as to use Photoshop to alter some of the graffiti to make it more commercial friendly, removing a reference to Lady Gaga. “They’ve diffused the artwork of an extremely well known artist,” he says. “The only reason they did that was because they knew that it was illegal to use the name Lady Gaga and associate it with their product. But it was OK to associate the artwork?”

The actual legalities of using street art is a legal grey zone. Graffiti, after all, is intended for public consumption (and is itself often illegal). Alan Conter is a media law and ethics professor at Concordia University. He says that in this case, however, G.M. should have sought permission. “Murals that have been commissioned for the outside of buildings are the intellectual property of the artists.”

The artist responsible for the Lady Gaga piece, who goes by the name Zilon, has received a “substantial enough settlement,” says Downey. As for the other artists, their year-long campaign appears to be paying off. They
recently started “legal discussions” with G.M.

Europe’s own carmageddon

By Toban Dyck - Wednesday, October 10, 2012 at 3:20 PM - 0 Comments

(Benoit Tessier/Reuters)

Auto sales are plummeting to levels not seen since 1990, analysts are talking of an industry in need of divine intervention and factories risk closure. Sounds like Detroit in 2008. But this is the picture of Europe’s auto industry today as it heads into its sixth year of falling sales.

The Paris Motor Show is normally a showcase of manufacturing pride and consumer excitement. This year, observes IHS Global Insight auto analyst Carlos da Silva, “I don’t want to say [it was ] ‘lame,’ but it was on the sad side. Confidence levels are so low here in Europe that we need a miracle; we need the Pope to do something.”

Europe’s auto market is projected to shrink 8.8 per cent this year. The European Automobile Manufacturers’ Association said not since its reports began in 1990 have new-car registration numbers been so low; they were down 8.9 per cent last month—at roughly 700,000 cars across the EU—compared to the same period last year.

Carmakers are struggling to keep factories running; poor demand has many functioning below the capacity needed to cover costs. Consumers in Greece, Italy and Spain continue to put off big-ticket purchases, just as Americans did in 2008 and 2009. Ford suffered a 29 per cent decline in sales compared to a year ago, while Fiat, Renault, BMW and Peugeot Citroën weren’t far behind. According to Da Silva, the already dire conditions in Europe are projected to get worse. Even Germany, the eurozone’s one economic stalwart, is facing a shrinking auto market.

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Automakers must double down saving gas

By macleans.ca - Tuesday, September 11, 2012 at 12:14 PM - 0 Comments

Expect to see a lot more electric and hybrid cars on the road in the coming years. Washington recently announced new rules that cars must have almost double the current fuel economy standard of 29 miles per gallon by 2025. Ottawa quickly said it will follow suit with common standards. (The Canadian equivalent would mean moving from 6.6 to 4.4 litres per 100 km). What’s good for the environment, however, is creating something of a dilemma for automakers. They need to continue making big investments in green technology to meet the new requirements, but as yet haven’t found much of a market for green cars. Consumers remain fiercely loyal to the old-fashioned internal combustion engine. In Canada, just 0.03 per cent are buying electric cars. General Motors expects to sell 2,500 plug-in hybrid Chevy Volts in August—its highest monthly rate since the model was introduced in 2010. With sales falling short of projections, GM is shutting down production for four weeks. Sales of Nissan’s electric Leaf, meanwhile, are down 26 per cent from last year. Carmakers will continue making electrics and hybrids—last month Ford said it is hiring dozens more engineers for that purpose—but for now, it won’t do much for the bottom line.

Das auto giant

By Chris Sorensen - Tuesday, July 17, 2012 at 1:45 PM - 0 Comments

Sean Gallup/Getty Images

It took a decade for Germany to emerge as Europe’s most important economy—one on which the very future of the monetary union depends—so it’s only fitting that it’s now also home to the world’s most ambitious car company: Volkswagen AG.

The maker of such iconic rides as the Beetle is on track to become the world’s biggest carmaker by volume, helped by Toyota’s recent struggles and General Motors’ new focus on profitability over market share. Last week, it took another step toward cementing its status as an industry titan by buying the half of fellow German carmaker Porsche that it doesn’t already own for US$5.59 billion. The addition of Porsche gives VW an impressive roster of high-end vehicles—ranging from Audi and Bentley to Bugatti and Lamborghini—to sell alongside more mainstream VW models. It’s no longer just the “people’s car.”

Chrysler: Detroit’s comeback kid

By Gustavo Vieira - Tuesday, February 14, 2012 at 10:30 AM - 0 Comments

When the U.S. auto industry collapsed, it seemed likely that the Detroit Big Three (Ford, General Motors and Chrysler) would become the Big Two—and even more likely that the automaker that wouldn’t survive the so-called “Carmageddon” would be Chrysler. But it is Chrysler that has staged the most miraculous comeback of all. Since emerging from bankruptcy and repaying its government loans in 2009, the smaller of the Detroit Three is now leading the pack. In January, Chrysler was the top-selling car brand in Canada, with sales up 22 per cent. In the U.S., sales jumped 44 per cent, the biggest rise among major automakers. Chrysler’s controlling company, Italy’s Fiat, recently reported it more than doubled its net income in 2011—all thanks to Chrysler’s performance. Chrysler achieved all of this without rolling out any revolutionary new vehicles, like the GM Volt. To the contrary, its sales went up thanks to its Jeep brand models, Ram trucks and its existing sedans, like the Chrysler 300 (assembled in Brampton, Ont.). Next up for Chrysler: an even better 2012, forecasts Fiat CEO Sergio Marchionne, who is preparing the company for an initial public offering and the launch of an anticipated new line of vehicles based on Fiat models.

GM’s betting big on Chevy

By Chris Sorensen - Monday, November 7, 2011 at 9:40 AM - 3 Comments

GM; Car Culture/Getty Images; Photo illustration by Lauren Cattermole

Late-autumn baseball is a nostalgia-filled time for Americans. So it makes sense that General Motors would wait until Game 1 of this year’s World Series to roll out a patriotic TV ad celebrating the 100th birthday of its flagship Chevrolet brand. The 60-second spot shows people holding up historic photographs of Chevrolet vehicles and their owners in front of the same stirring American backdrops—windswept plains, craggy mountain peaks, idyllic suburban homes and gritty roadside gas bars—as they appear today. And, just in case a few heartstrings were left untugged, Ray Charles sings America the Beautiful in the background.

It’s well-worn marketing territory for Chevrolet, but it represents only part of GM’s aspirations for its bestselling nameplate. Though the bow tie has historically been synonymous with burly pickup trucks and throaty muscle cars, these days a “Chevy” is just as likely to refer to a Sonic subcompact or its sleek Cruze small car—vehicles that are designed to be sold all over the world, including fast-growing markets like China and Russia.

Through Chevrolet, GM is rebuilding its global footprint after going through a painful restructuring under bankruptcy protection two years ago. “Ford has been much more of the global player of the American carmakers in recent years,” says Alan Middleton, a marketing professor at York University’s Schulich School of Business. “I think GM is not only looking for cost savings, but is shifting its positioning to become more of a global brand.” So far, it appears to be paying off—in its third quarter, Chevrolet reported sales of 1.2 million vehicles globally, a best-ever performance for the brand. It was also the only major automaker to grow its global market share this year, with 60 per cent of sales now coming from outside the U.S.

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Are we ready for driverless cars?

By Charlie Gillis - Thursday, November 3, 2011 at 1:30 PM - 6 Comments

Cole Garside/Maclean's

The implication, of course, is that they don’t trust us. Why build a car that commandeers the brakes and wheel if not to eliminate that pesky statistical variable known as “human error”—which is to say, the fallibility that makes us all kin? The sooner we accept this truth the better: in Canada alone, 2,100 people die in traffic accidents each year. Fully 90 per cent of accidents are attributed to driver error.

But there’s something about piloting an automobile that stirs the inner irrationalist, which might explain the glee YouTube viewers have taken in video captured during a recent car safety demonstration in Gothenburg, Sweden. The exhibition was supposed to show off the vaunted “city safety” feature on Volvo’s S60 sedan, which applies brakes automatically in the event of an imminent crash.

Instead, a dais full of journalists was treated to the spectacle of the shiny, orange sedan plowing headlong into the back of a strategically placed transport trailer, then bouncing back after impact with its windshield wipers flapping ridiculously. Erik Coelingh, technical leader of Volvo’s so-called “active safety” program, recently told Maclean’s that the braking system had failed due to lack of power from an improperly charged battery. But there was no avoiding the tsunami of ridicule this sort of footage tends to elicit. “What’s the problem here?” snickered one Web commenter. “It came to a complete stop, no?”

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Old brand, new carmaker

By Patricia Treble - Wednesday, September 7, 2011 at 11:05 AM - 1 Comment

Mark Elias/Bloomberg/Getty Images; TD Economics

General Motors may be able to trace its roots back to 1908, but in court it is trying hard to forget its past. The automaker, which went through bankruptcy in 2009, is being sued in U.S. District Court over alleged suspension problems for more than 400,000 Chevy Impalas from 2007 and 2008. Plaintiff Donna Trusky contends the rear spindle rods are faulty, resulting in premature rear tire wear.

However, GM’s lawyer, Benjamin Jeffers, wants the case rejected for a simple reason: she’s suing the wrong firm. “There are no specific factual allegations that New GM—as opposed to Old GM—did anything at all in relation to her vehicle,” he wrote in a recent filing, referring to the new firm that emerged from bankruptcy. “Plaintiff here is trying to saddle New GM with the alleged liability and conduct of Old GM.” He goes on to say, “New GM did not assume responsibility for Old GM’s design choices, conduct or alleged breaches of liability under the warranty.” In essence, the firm says the suit should be directed at Old GM because it’s their design flaw, not a warranty issue that New GM would cover. Experts believe GM could prevail. In January, a judge ruled for the firm in a case involving a pre-2009 OnStar system.

This week: Good news, bad news

By macleans.ca - Wednesday, February 2, 2011 at 1:00 PM - 0 Comments

Good news

Dens Villeneuve earned a best foreign film Oscar nod for Incendies (Jim Urquhart/Reuters)

Hope, for a change
Barack Obama used to have some powerful political magic, getting millions of Americans to buy into his vision of change. But a deep recession gave rise to Tea Party-style fury among voters and dealt the Democrats serious setbacks in the November elections. Now, just two months later, there are suddenly signs of hope. The economy is slowly improving and Obama’s poll numbers are on the rise. In this week’s state of the union address, he promised to keep the focus on jobs. We’ll see if Americans are ready to believe again.

Glad to go
South Sudan’s overwhelming vote for independence might displease Khartoum, but it’s a key step to ending one of Africa’s bloodiest, most intractable conflicts. Two million people have lost their lives in the war between the country’s mostly Arab rulers and rebels in the south, and there was no sign that the two sides could peacefully coexist. Enormous issues remain outstanding, not least the two sides’ long-standing dispute over oil rights. But this clear expression of democratic will brings U.S.-led efforts to find a permanent resolution one step closer to reality.

Heartbeat of Hunan
Last year, for the first time, General Motors sold more cars in China than in the U.S., and enjoyed large sales spikes in Russia and Brazil, too. An increase of 29 per cent—2.35 million cars and trucks—in China helped the U.S. automaker close the gap on world No. 1 Toyota, and GM recalled 750 laid-off workers to its Flint, Mich., truck plant. At a time when the effect of Chinese exports is front of mind, it’s good to see a North American company holding its own in such a key sector of manufacturing.

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Motor City magic

By Chris Sorensen - Friday, January 14, 2011 at 12:01 PM - 1 Comment

Jeff Kowalsky/Bloomberg/Getty Images

They may no longer be the “Big Three,” but General Motors Co., Ford Motor Co. and Chrysler Group LLC were eager to use this year’s Detroit auto show to show the world there’s a Motor City comeback in the making. Amid the usual pulsing lights, puffs of dry ice and pounding music, Olivier Francois, president of the Chrysler brand, stood before a throng of automotive journalists and made references to 8 Mile, the 2002 movie starring Eminem as a white rapper who earns the respect of his peers in a hardscrabble Detroit neighbourhood, as he attempted to whip up enthusiasm for a redesigned Chrysler 300 sedan. “Today you will see what happens when we are backed into a corner,” he said, invoking the image of a prizefighter, before the 300 drove onto the stage and the ear-splitting decibels increased even further. “You will see that we come out swinging.”

Buoyed by recovering sales and corporate restructurings that are finally gaining traction, similar gestures of confidence were also on display by GM, which along with new small cars proudly displayed its silver and yellow Cadillac CTS-V race car (to mark the brand’s return to auto racing), and Ford, the only one of the three Detroit-based automakers that didn’t file for bankruptcy protection or take a government bailout. Ford’s blue-themed display rivalled the size of GM’s and Toyota’s, despite it being a smaller automaker. Ford also introduced a racy-looking Vertrek concept that could one day replace the Escape crossover. “Motown has got its mojo back, obviously” said Dennis DesRosiers, a Canadian automotive analyst.

And, interestingly, for every ounce of hometown swagger—something that had all but disappeared from the North American International Auto Show since the recession hit—there appeared to be a corresponding retreat from the big-name Japanese automakers who’d spent the last few decades eating the Detroit Three’s lunch. Toyota Motor Corp. executives spent much of their time at the Cobo Center, on the banks of the ice-filled Detroit River, answering questions about last year’s recalls of millions of vehicles, as opposed to talking about new models.

But what happens at the Detroit show, with its vast expanses of carpet, soaring displays and dazzlingly lit vehicles, is not always a reliable indicator of what’s likely to take place inside dealers’ showrooms. While the turnaround story at GM, Ford and Chrysler is real, there is still much work to be done. And it’s not like rivals have been standing still for the past couple of years waiting for Detroit to get its act together. Competition will be fierce.

Like other automakers, GM, Ford and Chrysler benefited immensely from last year’s rebounding auto sales in the United States, which grew 11 per cent to 11.6 million after hitting a low of 10.4 million a year earlier. While that’s still a far cry from the 16 million or so vehicles that were being sold prior to the recession, Ford and GM are nevertheless expected to report billions in 2010 profit (Chrysler, still the weakest of the three, is also closing in on the break-even mark after posting losses for the past few years). “The big thing that’s probably shocked everybody is that these car companies can now make money at vastly reduced volumes,” says Jeremy Anwyl, the chief executive of automotive website of Edmunds.com. “They are talking about break-evens now at sales levels of about 11 million a year. To put that in perspective, just a few years ago sales of 14 million would have been perceived as a disaster.”

GM underwent a particularly dramatic overhaul during its 2009 bankruptcy to emerge as a leaner and more focused company. It dumped debt, slashed half of its brands and took steps to wean itself off a destructive habit of relying on steep incentives—zero per cent financing and cash-back deals—to juice sales. “We have to keep our foot on the accelerator here,” said Mark Reuss, the president of GM’s North American division, moments before Chevrolet introduced a sleek new subcompact car called Sonic, which will be sold alongside Chevy’s compact-sized Cruze. “But I think we’re running North America with the right philosophy.”

And, to top it off, the company took a major step toward shedding its “Government Motors” stigma through a successful IPO in November that raised US$23 billion, helping to pay down roughly US$50 billion worth of loans from Washington and Ottawa.

Chrysler also filed for Chapter 11 in 2009 and, in exchange for bailout cash, agreed to a marriage with Italian carmaker Fiat. Despite a lack of new models to sell last year, it too managed to post an impressive 16.5 per cent increase in U.S. sales to 1.1 million vehicles, hitting the target set by CEO Sergio Marchionne. He is now predicting sales increases of 25 per cent in 2011 as Chrysler sends its new 300 sedan to showrooms alongside a vastly overhauled Sebring sedan, now called the 200. Chrysler will also be selling the tiny Fiat 500 in North America, although analysts say it will be the incorporation of Fiat’s small car technology in future models that will truly determine Chrysler’s future.

Ford has taken a different road, having had a head start on its restructuring. With several popular new models and quality rankings that now rival Japanese automakers, Ford’s U.S. sales soared 19 per cent in 2010, and the company managed to increase its market share there for the second time in two years. It also ousted GM as Canada’s sales leader for the first time in more than half a century.

There’s more to come. In Detroit, Ford introduced a new seven-passenger C-Max minivan, marking a return to a segment it abandoned in 2006. It also showed off two five-seat C-Max variants powered by regular hybrid and plug-in hybrid engines (regular hybrids alternate between gas and electric power, while plug-in hybrids run solely on electric power until the charge is depleted and a gas engine takes over), and an electric version of its Focus small car. “The fuel-efficiency story is going to be a major one,” said David Mondragon, the CEO of Ford Canada. He added, however, that Ford has a “very balanced approach to the marketplace,” ranging from the tiny but well-equipped Fiesta subcompact to Ford’s bestselling F-150 pickup trucks. “And with flexible manufacturing, we can build whatever consumers want.”

Having the right mix will be critical as analysts forecast a continued recovery in the all-important U.S. market. Jeff Schuster, director of automotive forecasting for JD Power and Associates, predicts sales of 12.8 million vehicles in the U.S. this year followed by 15 million units in 2012 and a return to nearly 16 million a year later. (Canadian sales increases will be less dramatic, rising to 1.6 million next year compared to 1.5 million in 2010, but only because the market didn’t collapse as badly.) That suggests big profits down the road for Ford, Chrysler and GM, providing they can hang on to their current combined 45 per cent market share, up one percentage point from last year.

America's company

By Jason Kirby - Thursday, December 2, 2010 at 11:20 AM - 5 Comments

GM CEO Dan Akerson sits in a 2011 Chevy Camaro outside the New York Stock Exchange last week; GM’s collapse last year fit squarely with the narrative of America in decline | Rebecca Cook/Reuters; Mark Lennihan/AP

When Robert Mulcahy, a financial adviser in the Detroit suburb of Wyandotte, first learned General Motors planned to take itself public again, he was sure it would end badly. Many of his clients had once worked for GM or owned shares in the company before its spectacular bankruptcy and bailout last year, and even if they didn’t, their fortunes were inextricably linked to the automaker since it dominated every aspect of the region’s shattered economy. GM’s collapse, and its subsequent incarnation as “Government Motors,” spawned bitterness and resentment, leaving Mulcahy convinced local investors would never go near GM again.

Then, as GM’s stock market revival approached, all that changed. “It was absolutely the opposite of what I expected,” he says. “Most of my clients may not have bought on the IPO but they’re all sniffing it out, ready to get back in. There’s a sense of pride and excitement here that has not existed for quite a while.”

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GM back on the stock market

By macleans.ca - Thursday, November 18, 2010 at 12:38 PM - 6 Comments

Shares of General Motors hit the open market on Thursday and were available to investors for US$33 a piece. The automaker, which filed for bankruptcy last June, had become known as “Government Motors” in recent years thanks to bailouts worth billions of dollars from the Canadian and U.S. government. Now, those same governments are hoping to make at least some of that money back by selling their stake in the company. The U.S. government plans to sell 400 million of its shares in GM, reducing its ownership from 61 per cent to 31 per cent. Canada, on the other hand, is planning a more modest sell-off of just twenty per cent of its shares. For Canada to break even on its $9.5 billion bailout of the automaker, share prices would need to reach $43. In their first hour of trading on Wednesday, the stock was priced at just over $35 on both the New York and Toronto stock exchanges.

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GM steers for Wall Street

By Jason Kirby - Thursday, August 26, 2010 at 2:20 PM - 0 Comments

Getty Images

General Motors may make cars and trucks, but these days the most important order of business is to extract itself from state ownership. That single-minded goal appears to be behind a flurry of announcements coming out of the company’s Detroit headquarters.

Just moments after it announced strong second-quarter results—US$1.3 billion in earnings compared to a loss last year of US$13 billion—GM said its CEO, Ed Whitacre, would leave the company on Sept. 1. His replacement, the company’s fourth CEO since March 2009, will be Daniel Akerson, a managing director at private-equity firm the Carlyle Group. At the same time, GM said it was going ahead with its plan for an initial public offering, even though markets have been in free fall over fears of a return to recession.

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Toyota's latest repairs

By Chris Sorensen - Thursday, July 29, 2010 at 10:00 AM - 0 Comments

Eugene Hoshiko/AP

First it was plastic zip ties. Now it’s a hacksaw and bubble wrap. The fixes for Toyota’s ongoing problem with sticky accelerator pedals, and the floor mats that can trap them, increasingly sound like something from an episode of MacGyver. A recent bulletin issued by General Motors to dealerships regarding the Pontiac Vibe—a mechanical twin of the Toyota Matrix—calls for mechanics to use a hacksaw to remove part of the pedal assembly as part of an operation to ensure that it doesn’t become stuck in a depressed position. According to the instructions, posted on automotive blog Jalopnik, the bubble wrap is apparently used to protect the pedal’s electronic sensors during the procedure.

Other fixes issued by Toyota, which has been forced to recall 8.5 million cars since 2009 amid driver reports of instances of “sudden unintended acceleration,” included using zip ties to secure floor mats to the floor and inserting a Chiclet-sized piece of steel into the accelerator pedal to prevent it from getting stuck in a partially depressed position.

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An iPhone can save a child?

By Chris Sorensen - Thursday, July 22, 2010 at 12:00 PM - 0 Comments

Getty Images

So-called “CrackBerry” addicts and their iPhone-crazed equivalents often seem to care more about their devices than the people around them. But as part of a new public safety campaign, General Motors thinks it has found a way to turn that boorish behaviour into a 21st-century life-saving tool.

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Why big trucks mean big sales

By Kate Lunau - Thursday, June 10, 2010 at 1:20 PM - 1 Comment

Getty Images

In a recent commercial, the Dodge Ram Heavy Duty pickup truck is shown splashing through mud, pulling massive loads, and charging across the desert, with a gravelly voice-over from actor Sam Elliott—the quintessential cowboy—in the background. Macho truck ads are nothing new, but lately it seems like the Detroit Three automakers are engaged in a spitting contest over whose truck is biggest, toughest, and manliest of all. Earlier this year, GM even challenged Ford to a truck tug-of-war between their 2011 heavy duty pickups (Ford declined).

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Fast race, slow machines: Correction

By Jonathon Gatehouse - Monday, February 15, 2010 at 8:45 PM - 3 Comments

[Correction: The Olympia machines, which seem to be working fine today, are built by Resurfice Corp. of Elmira, Ont. Their standard machine are built on a GM truck platform. These are electric ones.]

The men’s 500m is usually the drag race of speed skating.

Tonight, however it’s been more like watching paint dry.

For the second straight day, a problem with the ice resurfacing machine has delayed competition. Yesterday, one of the Olympia’s (made by worldwide Olympic sponsor GM) broke down during the women’s 5000m. That resulted in a 15 minute delay.

But this evening’s meltdown (literally) delayed proceedings for more than an hour, just before Canadians Kyle Parrot and Jeremy Wotherspoon were to begin their first of two races, with millions watching in North American prime time.

You can’t buy advertising like that.

Detroit’s dirty secret: SUVs rule

By Jason Kirby - Thursday, January 28, 2010 at 12:40 PM - 2 Comments

At the height of the U.S. economic crisis, one of the most potent symbols of American excess was the gas-guzzling sport utility vehicle. When oil prices spiked and millions of Americans lost their jobs, sales of big trucks collapsed, taking General Motors, Chrysler and nearly Ford with them. Only small cars would have a future in this more frugal, sensible economy, we were told. Well, so much for that.

The SUV is back, and American drivers can’t get enough of them. According to Ford, sales of the Expedition jumped 45 per cent in December, while the Lincoln Navigator was up 60 per cent. GM, meanwhile, has announced plans to spend US$1 billion revitalizing its lineup of full-size pickups. The companies are still heavily focused on smaller, fuel-efficient vehicles, and the next generation of SUVs will undoubtedly do better on gas. But any notion that the SUV would go the way of the Model T is gone.

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Newsmakers '09: Road warrior

By Chris Sorens - Tuesday, December 8, 2009 at 6:40 PM - 2 Comments

To the relief of just about everyone around him, auto parts czar Frank Stronach appears prepared to finally forgo his dream of becoming a full-fledged manufacturer of cars and trucks.

The wily Austrian-born businessman’s latest effort to get into the higher-profile vehicle-manufacturing game careened off the road in November when General Motors, no longer at death’s door, decided to hang on to its European Opel division instead of selling a majority stake to Stronach’s Magna International and a Russian partner.

Stronach’s disappointment at the unexpected turn of events was etched on his craggy face, but the official line from the company was one of understanding (GM is Magna’s biggest customer) and a pledge to get back to basics. Suffice to say, Magna’s investors couldn’t have been happier. Shares of the Aurora, Ont.-based company soared 25 per cent by the end of the week of the announcement. Analysts, too, seemed thrilled the deal fell apart. For one thing, building cars and trucks has just as often been a road to ruin as it has to riches. Just ask Ford, GM and Chrysler, the latter of which Stronach also tried unsuccessfully to buy before the wheels fell off the entire North American industry.

The Opel deal also threatened to take Magna’s eye off the ball just as opportunities to acquire troubled auto parts companies are mounting. And then there was the not insignificant issue of alienating Magna’s current car-making customers, several of whom didn’t fancy the idea of buying their vehicle parts from a direct competitor.

But while sticking to auto parts might be the most sensible (and profitable) course of action, Stronach has rarely paid much attention, if any, to what other people think of his ideas. Take his troubled foray into the horse-racing business, for example. A fan of thoroughbred horses and racing, Stronach spent huge sums of money through Magna Entertainment to scoop up racetracks across the continent in the hopes of creating an entertainment colossus, often to the chagrin of Magna International shareholders. Creaking with debt, the now spun-off company is attempting to restructure under bankruptcy protection, although Stronach has apparently not given up on the concept.

Stronach has also been criticized for taking hefty pay packages, considering he is the company’s chairman, not its CEO. Although his compensation plummeted to a paltry (by Stronach’s standards) $10.7 million excluding stock options last year, as part of a temporary effort to reflect the industry downturn, he had previously pulled in closer to $40 million or $50 million—a level that is bound to return once the industry is again firing on all cylinders.

Why should we believe his car-building fantasies will be put down more easily?

King James and King Cash

By Colby Cosh - Monday, November 30, 2009 at 4:57 AM - 17 Comments

Chris Ballard’s Sports Illustrated column suggesting that LeBron James should sign for the NBA minimum in 2010, wherever he signs, amazed me for two reasons.

One is that I found myself reading, in the pages of SI, a totally new, non-ridiculous idea I had never considered before. SI remains a great magazine: full of great photography, great profiles of interesting athletes, great tear-jerking stories, and sometimes even great moral force. It’s never been so strong on the ideas. That’s not really what it’s for (though maybe it should be), and we’ve got the internet for that.

But, and this is reason two, “LeBron for a buck” seems like such a terrific idea that I started to go a little crazy for a couple of minutes after reading Ballard’s piece. “This argument is so convincing,” I thought to myself, “that LeBron’s actually going to do this. Not ‘should do it’; ‘will do it’. He has to. The value of being the guy who took the bare minimum to win some championships, who chose a franchise totally without regard to salary and gave up his own money to get the best teammates, is too big to pass up. It puts Jordan and everybody else, everybody in any sport, in the shadows instantly—even if it doesn’t work.” The ploy isn’t even vulnerable to the “Why should a rich guy be expected to give money back to some even richer guy?” line of attack, if the team agrees, in an enforceable way, to spend close to the salary cap on top players.

But in short order I came to my senses, as you probably already have. Here’s the problem with Ballard’s idea.

“I think it’s very smart,” says one Western Conference general manager. “LeBron’s personal brand is worth way, way more than any salary he could draw from a team. It’s myopic to think otherwise.”

This unnamed GM (I’m guessing his name rhymes with Daryl Morey) is obviously right. Considered as a revenue stream, LeBron’s future salary from playing basketball is small in comparison with the value he can potentially earn as an endorser, speaker, businessman, totem… the off-court value of the LeBron brand. And championships inflate that brand value. Sure, fans in 29 cities might look slightly askance at a move that could injure the competitive balance of the league for a while, but ultimately, championships are the sources of the best stories, and the stories are what makes athletes attractive. Stacked superteams aren’t bad for sports leagues, they’re good. (If they weren’t, the Premiership would have gone under ages ago.) When those teams win, we talk about “Are they the best ever?”; when they lose, you’ve got David and Goliath. Everybody loves to hate the Yankees.

The problem is that brand value is more fragile than the value of a playing contract. The personal-branding stream may be bigger, unless something bad happens to harm the personal brand—like, say, your supermodel wife chasing you down the street at 2 a.m. trying to kill you with the tools of your trade.

Think about Tiger Woods: he might not have done anything worse than let his attention wander to his iPod when he should have been watching the road, but the hard financial cost of what happened to him on Friday has to be in the high eight figures, no? How does he shape up as an automobile endorser for the immediate future? You think the ads where he’s giving away Buicks still work?—is GM the kind of firm that can afford to shrug off a little ridicule right now, play around with its image? Every firm that employs Tiger as an icon needs to recalibrate now. He has always been portrayed as sort of half-human, half-automaton, a mischievous magician you can cheer for in spite of his gifts from God. He has appealed equally to both sexes; I’m pretty sure that won’t be true anymore.

That’s just a subtle, perhaps even overstated example of how quickly a brand can be damaged by the actions of others, of course. Forget Tiger; think Kobe. Brand value is ephemeral, and not entirely within the control of the athlete. Good character and smart decisions can help maximize it, but they can’t guarantee it. Whereas an NBA salary—that’s money no crazed spouse or tabloid journalist can take away from you. It’s money they have to pay you even if your leg falls off (as Greg Oden’s probably about six months away from proving empirically). It’s the low-risk segment of the portfolio. And as an athlete, you’re made constantly, nightmarishly aware that any contract might be your last. LeBron’s not signing for (the equivalent of) a buck. But it would still be pretty cool if he did.

This Week: Good news/Bad news

By macleans.ca - Friday, November 20, 2009 at 9:00 AM - 1 Comment

A week in the life of Aerosmith
Rock stars can be an indecisive bunch. Last week, rumours swirled that lead singer Steven Tyler had quit his band, Aerosmith, after more than 30 years together and countless hits, and Joe Perry, the band’s guitarist, said he and the rest of the group would be looking for a singer to replace Tyler. Happily, the boys managed to overcome their differences—Tyler and Perry appeared onstage together in New York City and Aerosmith is reportedly back together.

Good News

Best foot forward
The Canadian ski team revealed this week it has been using a top-secret high-tech gadget called “Stealth” in training for the Vancouver Games. The device allows the latest edition of the Crazy Canucks to track their every move down the slopes—and then evaluate where to find more speed on course. Stealth was developed at the University of Calgary three years ago, but our skiers were sworn to secrecy so that other teams wouldn’t get their hands on it. Hey, all’s fair when it comes to the Olympics (except, ahem, certain illegal things). Too bad women ski jumpers won’t be finding their way downslope as well­—the B.C. Court of Appeal rejected female jumpers’ claim of discrimination last week.

GM gives back
When the Canadian and Ontario governments handed General Motors Canada a $10.6-billion loan in June, many cynically suggested we’d never see the money again. They were wrong: on Monday, GM announced it would begin to pay back the loans earlier than expected—an initial $200 million will be returned to Canada in December, and the company expects to repay the rest ahead of the July 2015 maturity date. GM is also considering an IPO in 2010—which could actually make money for Canada and Ontario.

Befriending China
China isn’t so bad after all—that’s the message Barack Obama is trying to impress on his first visit to China as U.S. President. Obama and Chinese President Hu Jintao met in Beijing on Tuesday to discuss climate change and economic policy; the two later released a joint statement to the press, the first time the leaders of the U.S. and China have done so in more than a decade. Obama also held a town hall-style meeting with Chinese university students (though some reports suggested Chinese authorities meticulously chose participants from the ranks of the Communist Youth League). The next step is engaging Beijing on its less-than-stellar human rights record, something Obama has thus far proven reluctant to do.

Ready to e-read
The Kindle is finally coming to Canada. After years of waiting patiently, Canadians will be able to get their hands on Amazon.com’s e-book reader, which has been a big hit in the United States. There is a catch—you’ll have to buy the device through the U.S. online Kindle store (for US$259) and pay extra for shipping and duties. But the good news is that the Kindle will be here in time for Christmas. Now, if only we could get the online TV service Hulu.com and the Google Voice phone service, we’d be a truly high-tech nation.

Bad News

We’re giving less
After giving a record $8.6 billion to charities in 2007, Canadians scaled back their generosity in 2008. Job losses and a global recession contributed to a five per cent drop in charitable donations—to $8.2 billion—according to figures released this week by Statistics Canada. Despite the tough times, however, relative generosity hasn’t changed much across the country. As was the case in 2007, Prince Edward Island and Alberta are still the most big-hearted provinces, with median annual donations of $370 and $360 respectively. And Quebec is still the stingiest, with a median annual donation of $130.

Parizeau speaks
He’s back! In a new book, La souveraineté du Québec hier, aujourd’hui et demain (Quebec Sovereignty Yesterday, Today and Tomorrow), former Quebec premier and separatist movement champion Jacques Parizeau argues that Quebecers would be better able to fight the global recession on their own—that is, without the rest of Canada—and suggests that a third referendum will occur in the not-too-distant future. With separatism at an all-time low in Quebec, we wish Parizeau would fade away. He brought us to the brink once before—and that’s once too often.

Don’t trust Iran
“Boring”—that’s how an Iranian official described the International Atomic Energy Agency’s new report, which chastised Iran for being uncommunicative about its nuclear ambitions. After Barack Obama revealed in September knowledge of a second hidden nuclear plant, the Iranians went into defence mode, claiming the site was simply a “backup” if the larger, previously acknowledged, site were to go down. Call us crazy, but we don’t trust the Iranians when it comes to their nuclear ambitions—why all of the secrecy and posturing if this is really about providing power to the country?

Corruption champs
For the second year in a row, Afghanistan and Iraq are at the top of Transparency International’s annual survey of the world’s most corrupt countries (Somalia rounds out the top three). This is sobering news for those who support the West’s efforts to end the rule of terrorists and tyrants. There is no doubt of the widespread corruption in both Afghanistan and Iraq—the former’s recent election embarrassment was a major failure on the road to democracy. Still, we cannot lose our resolve to fight the Taliban and al-Qaeda, who want to install sharia law, strip women of all rights and wage a holy war against our freedoms. This survey should only strengthen our commitment.

FACE OF THE WEEK

AWARD EATING: Christine Ghawi, who played Céline Dion in a CBC biopic, poses with her Gemini award for Best Actress

Racing to rebuild GM

By Chris Sorenson - Thursday, November 19, 2009 at 11:20 AM - 4 Comments

The idea was for Bob Lutz, the vice-chairman of General Motors, to challenge doubters of the beleaguered automaker to race him on Utah’s Bonneville Salt Flats. He would drive Cadillac’s muscular, 556-horsepower CTS-V luxury sedan while challengers would have their choice of rival production models. And, with any luck, Lutz would win and a brilliant marketing campaign would be launched.

But the ad agency’s concept apparently wasn’t bold enough for the former Marine, who, incidentally, flies fighter jets in his spare time. He pushed for having the throwdown on an actual racetrack, where the chance of damage to GM’s battered brand would rise with each twist and turn. “I said, ‘Hey, that’s an interesting idea, but let’s not use the salt flats, because going fast in a straight line isn’t proving anything to anybody,’ ” Lutz said in an interview with Maclean’s. “The world has always known that Americans can build cars that go fast in a straight line.” Continue…