Roaring right back

By Jason Kirby - Sunday, March 21, 2010 at 9:00 AM - 13 Comments

Photograph by Andrew Tolson

At the end of 2008, with the global economy crumbling and forecasters trying to out-gloom each other with dire predictions of blood in the streets, Linda Hasenfratz was understandably anxious. As CEO of Linamar Corp., one of Canada’s largest auto-parts suppliers, she watched as GM and Chrysler, two of her biggest customers, careened toward bankruptcy. Meanwhile, analysts were warning investors that Linamar might breach the terms of its loan agreements. Shares of the Guelph, Ont.-based company plunged to $3.50, a depth not seen in nearly two decades. But rather than panic, Hasenfratz did what precious few people seemed capable of at the time. She stepped back and took a deep breath.

The auto sector was in serious trouble, she acknowledged, but car sales had fallen to “drastically, unbelievably unrealistic, totally unsustainable low” levels. And Linamar wasn’t about to go under, even if the Detroit giants went bust. “I knew it wouldn’t kill us,” she says. So in the darkest days of the credit-crunch-cum-financial-crisis-cum-Great Recession, Hasenfratz dipped into her family’s finances and bought a million Linamar shares, a resounding vote of confidence in the business and the economy as a whole.

What Hasenfratz was betting on, and what even the most pessimistic forecasters admitted would one day come, was a recovery. But who could have thought the rebound would be as quick and robust as this. Barely a year after stock markets looked like they were headed for a long-term rout, exchanges in New York and Toronto have leapt roughly 70 per cent. More importantly, most signs point to the recession having ended sometime last fall. In the fourth quarter the Canadian economy grew by five per cent, soundly beating expectations. So while Hasenfratz finds herself still bracing for a tough slog in the auto sector—the crucial American car buyer could take years to fully recover—she’s once again focused on the future and expanding her company into Europe and Asia. As for those Linamar shares she snapped up when the recession looked like it would last forever, “they’re about six times higher now,” she says, “but who’s counting?”

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When it comes to recalls, Toyota's not alone

By Kate Lunau - Thursday, March 11, 2010 at 2:36 PM - 5 Comments

First, it was Toyota issuing recall after recall. Then others, including Honda, Nissan, and General Motors, followed suit. With millions of vehicles from different auto manufacturers affected over the last few months alone, drivers could be forgiven for feeling nervous. But experts say these seemingly massive recall numbers shouldn’t come as a surprise.

Following harrowing reports of runaway vehicles, Toyota issued its largest-ever recalls, covering some 5.6 million vehicles in just the U.S. As executives were hauled before U.S. Congress, other automakers rolled out campaigns of their own (last week, GM recalled 1.3 million North American vehicles over faulty power steering). With Toyota drawing fire over its alleged foot-dragging on safety issues, rival automakers likely “didn’t want to be tarred with the same brush,” says Craig Hoff, a professor of mechanical engineering at Kettering University in Flint, Mich.

But the pile-up of recalls also shows how, in such a highly integrated industry, problems can spread like wildfire. In a growing trend, Toyota is one of several manufacturers using “the same platform—the underpinnings of a vehicle—across a variety of models,” Hoff notes. Some even share designs and parts with competitors, and are reducing the number of suppliers they deal with, creating even more overlap. France’s PSA Peugeot Citroën had to recall nearly 100,000 vehicles made in the Czech Republic, where it shares a factory with Toyota; and the Pontiac Vibe, sold by GM but jointly manufactured with Toyota, was also subject to a recall. This week, Daihatsu Motor, a subsidiary of Toyota, recalled 275,000 vehicles in Japan.

According to Tony Faria, an automotive expert at the University of Windsor, “today’s cars are as safe, or safer, than before.” But as companies move to an ever-smaller number of platforms and suppliers, he says, recall numbers “will keep getting bigger.” M

Surfing the Web on the open road

By Katie Engelhart - Thursday, March 4, 2010 at 10:00 AM - 1 Comment

What do you get when you put a network guy and a race-car driver together? You get Internet in the car. So goes the well-worn joke around the San Francisco-based office of Autonet Mobile, the brainchild of Sterling Pratz, a pro race-car driver, and Doug Moeller, a wireless whiz. In 2005, Pratz and Moeller came together with a shared vision—a world in which any person in any vehicle can have access to the Internet. Five years later and they’re well on their way, holding partnerships with Chrysler, Dodge, Jeep, Volkswagen and GM.

Autonet brings the Web to cars via what it calls its “TRU technology” routers. The routers, which can plug into a cigarette lighter, transform a vehicle into a WiFi hotspot, just like the one you might find at a coffee shop. The company says its system has an advantage over laptop wireless cards because it can automatically shift between broadband towers when signals are weak, so service is never lost. Though only available in the U.S., Autonet hopes to expand into Canada by year’s end.

The market of connection-coveting clients is growing fast. Autonet fields daily calls from busy mothers, school bus manufacturers and ambulance responders. Kids can work on their laptops while riding the bus, and ambulance workers “can transmit things like EKG readouts to cardiologists,” says Christine Williams, a company spokesperson. (Driving and surfing the Web at the same time, however, is most definitely not recommended.)

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Interview: Johann Olav Koss

By Jonathon Gatehouse - Thursday, February 25, 2010 at 8:00 AM - 8 Comments

Photograph by Simon Hayter

Johann Olav Koss is an Olympic speed skating legend: the winner of four golds, including three in front of his home crowd in Lillehammer, Norway, in 1994. But to Canadians he’s perhaps better known as the CEO of Right To Play (or the former husband of Belinda Stronach).

He spoke to Maclean’s about how the charity, which focuses on improving the lives of children through sport, and is usually a fixture in the athletes’ village, is coping with its banishment from the Vancouver 2010 Games.

Q: Right To Play was born out of the Olympics, yet you are not officially allowed to be here. Did you ever get an explanation of why?
A: No. I got a letter saying they didn’t want to renew the contract. All the rest is speculation, but it clearly started with sponsorship confusion. [GM is an official Olympic sponsor; Mitsubishi is one of Right To Play’s backers.]

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Jobs Wanted

By Chris Sorensen - Thursday, February 18, 2010 at 3:00 PM - 8 Comments

The process of rebuilding after the Great Recession has begun in earnest inside a dingy mall in Oshawa, Ont. There, some 200 men and women pass through the doors of an employment “action centre” each week in search of a new job and, in some cases, a complete reset of their lives. Many are former auto workers laid off after General Motors shuttered its Oshawa truck plant and scaled back production at a neighbouring car plant last year. Others worked at parts companies. Few have easily transferable skills and many don’t even have a high school diploma.

Connie Snelgrove is the centre’s coordinator. She briefly worked for a supplier that built car seats, but lost her job in 2008. “I was only there two years, so I knew what the real world was—that everybody else [without skills or an education] is making $8 to $10 an hour,” says Snelgrove. “But these guys have been making good money and have been in the same environment for so long. I knew they were going to be in for a culture shock.”

Once comfortably part of this country’s large middle class—loosely defined as people who are neither rich nor poor and measured by things like a steady job, home ownership and a pension—thousands of Canadians are now turning to people like Snelgrove for help after losing their jobs and suddenly finding themselves on the margins of society. The fact that the employment upheaval, which cost nearly half a million Canadians their jobs over the past year, comes at a time when many households are carrying near record amounts of debt has only served to compound the financial pain, raising the risk of missed mortgage payments and bankruptcies.

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Detroit Auto Show: Electric dreams

By Chris Sorensen - Friday, January 15, 2010 at 9:00 AM - 7 Comments

There was a whiff of optimism, albeit of the cautious variety, mixed with the usual scents of rubber, new car and acres of indoor carpet at the Detroit auto show this year. After a brutal 12 months that saw sales plummet across North America and two of the former “Big Three” Detroit carmakers file for bankruptcy, auto executives were understandably eager to put the past behind them and get back to the business of selling cars, trucks and SUVs amid growing evidence of an economic turnaround.

While the show lacked the glitz and glamour of even just a few years ago—no trucks were dropped from the Cobo Center’s ceiling or cattle-herded through downtown Detroit—the cloud that had hung over last year’s displays lifted to reveal an industry that, if not completely transformed, believes that it’s finally found the right mix of smaller and greener cars to survive in the new and more cutthroat automotive landscape.

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Newsmakers '09: Wheels of fortune

By Colin Campbell - Tuesday, December 8, 2009 at 1:45 PM - 0 Comments

	American muscle Forget the hybrid. This year, the American auto industry went back to doing what it does best: making affordable sports cars with big, throaty engines. The Ford Mustang, Chevrolet Camaro (above) and Dodge Challenger were all surprise hits for the Detroit Three. While overall car sales saw double-digit declines, muscle car sales jumped over seven per cent. Perfect for the driver who wants to get where he’s going fast—and preferably in a straight line.
	Detour ahead A Swedish couple travelling in Italy planned to visit the idyllic Isle of Capri. Instead, they drove 650 km off course to the industrial city of Carpi. They had mistyped the destination into their car’s GPS device. “Capri is an island,” noted a local official in Carpi, in northern Italy. “They did not even wonder why they didn’t cross any bridge or take any boat.”
	Roadside assistance For the auto industry, the month of August stood out like a gleaming new Ferrari in a junkyard. That was when the U.S. government’s US$3-billion cash for clunkers program kicked into high gear and Americans were offered as much as US$4,500 to trade in their old cars for new ones. Car sales spiked and the entire North American economy was given a brief boost.
	Dream machines Toyota, perhaps best known for making reliable, if bland, family sedans, launched a US$375,000 supercar, the 552-hp Lexus LFA. Not to be outdone, Porsche introduced its first four-door sedan, the Panamera, which costs US$133,000 for the turbo version. Audi has a new version of its R8 supercar (above), the V10—a US$146,000 car that auto critic Jeremy Clarkson called “spectacularly good. It’s like Scarlett  Johansson’s lips.”
	Liftoff Car doors have been an overlooked design element. But the doors of the new Mercedes SLS, which swing straight up, are a thing of beauty. This latest take on an old idea gives the car its moniker, the Gullwing. Swedish manufacturer Koenigsegg is also taking door design to a new level with what it calls the dihedral synchro-helix actuation system. The doors on its cars slide forward and away from the car, then pivot up. Somewhere, an engineer earned his keep.
	Got a boost? Chrysler disbanded the group of engineers working on its electric-car program. The world’s most hyped electric car, GM’s Volt (above), is still a prototype. Canada’s Zenn Motor Company said it was getting out of the electric-car-making business to focus on battery technology. The only real electric carmaker in North America is Tesla, with its $100,000 Roadster. Are electric cars the future? We’re still waiting.
	Exit ramp The meltdown that industry watchers have taken to calling the Carpocalypse saw the demise of some much-loved brands. Saturn was dropped by GM, as was the storied Pontiac nameplate, despite its loyal following and a critically acclaimed new model, the G8 GXP. Rick Wagoner, GM’s long-time chief executive officer, also didn’t last (he was forced aside by the Obama administration). Car dealers felt the sting, too—GM is shuttering 42 per cent of its Canadian dealerships.
	Autopilot The new BMW 760 Li (below) is a fortress on wheels. It is big, comes with a V12 engine, and features a host of high-tech features: night-vision technology, radar sensors to detect cars in its blind spot, and cameras on the front fenders to help drivers see what’s coming at intersections. Mercedes has a comparable monster, the S63 AMG. One advantage it has over the Bimmer: front and rear massaging seats. Both sell for about US$135,000 (chauffeurs not included).
	Formula Won It was a tough year for Formula One racing. Toyota announced that it would pull out of the circuit. Renault was found guilty of race-fixing. The good news: Jenson Button. The British driver came out of nowhere to win the world championship while driving for a brand-new team, Brawn GP. Asked to describe in three words what it’s like to be an F1 driver, he told the BBC, “Wow, wow, and wow.”
	Roadside Distraction A driver crashed his $2-million Bugatti Veyron into a saltwater marsh near Galveston, Texas, after he said he became distracted by a low-flying pelican. In Peterborough, England, the driver of a $125,000 Lamborghini Gallardo (above) noticed smoke billowing from his car. He stopped to search for a fire extinguisher, but the vehicle burned to a blackened crisp. Both incidents ended up on YouTube. Lovers of fine sports cars quietly wept.
	Cruise control Ford’s new sonar-based parallel parking system can guide your big SUV into the tightest spots. It automatically steers; you simply work the gas and brake. Not to be outdone, Volvo has a system on its new XC60 in which the vehicle will automatically brake if you’re about to hit the car in front of you. Future young drivers rejoice—with cars like these, driver’s licence tests will be a snap.

Where optimism is eternal

By Jason Kirby - Friday, June 12, 2009 at 9:40 AM - 0 Comments

Moray Keith is the first to admit he’s seen better days for his chain of GM dealerships in Metro Vancouver. A few weeks ago, a white truck pulled up to the door outside the Dueck on Marine Drive showroom. A group of men in black shirts from Starbucks rushed in, and with no warning began tearing apart an in-store coffee outlet—part of that company’s downsizing efforts. Not only that, the air conditioner was on the fritz, and the building’s glass walls were heating up the showroom floor like a giant greenhouse. And then, of course, there was the small matter of that bankruptcy.

Car dealers are an inherently optimistic lot. But the past few months have been enough to test the mettle of even the most exuberant salesman. Car sales have collapsed, and after weeks of speculation, so too has the General, in a spectacular US$172-billion flame-out. Yet, across Canada this week, GM dealers like Keith (whose family owns three GM dealerships with total sales of around $400 million) remained remarkably upbeat about the upheaval going on around them. “I think it’s the best thing that could happen because you have people looking forward now at what GM is going to be like as a new entity,” he say. “In GM’s strong times, this store has always been the big store in Canada. We’d like to get back to that point.”

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Thrift is the new black

By Jason Kirby - Thursday, June 11, 2009 at 9:00 AM - 0 Comments

Meet the Walkers. They’re the latest embodiment of the culture of thrift said to be sweeping America. And their story, after it was reported a few days ago in the Washington Post, lit up the Web as another sign that things truly have changed. You see, the old, conspicuous Walkers used to travel to the Caribbean, shop at Nordstrom, and tell friends all about their consumer exploits. Now, with money tight, Seigrid Walker has found joy in flaunting her frugality. They stay in, eat pizza, and watch Madagascar “over and over again.” Forget about keeping up with the Joneses. It’s all about keeping up, or is it down, with the Walkers.

Since the recession began, thrift has been touted as the new black. It’s more than a matter of trendspotting. Consumers make up 70 per cent of the U.S. economy. Any recovery is wholly reliant on them getting back into the malls. So when analysts tell us Americans are simply unwilling and unable to spend any more, the implications are dire. But there’s a huge gulf between unwilling and unable, and a recovery hinges on which one is truly the case.

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We’ll pay for this bailout for years

By Andrew Coyne - Tuesday, June 9, 2009 at 3:15 PM - 118 Comments

What is the cost of the federal and Ontario governments’ contribution to bailing out General Motors? We know what it is in dollar terms: $10.6 billion, or about one-fifth as much as the United States Treasury has kicked in. But how much is that?

Here’s one way to think about it. In exchange for their investment, the governments of Canada and Ontario will together receive 11.7 per cent of the equity in “New GM,” the slimmed-down company that, it is hoped, will emerge from Chapter 11 bankruptcy protection some months from now. On its last day of trading on the New York Stock Exchange, GM closed at US$0.75 a share, for a total market capitalization of about $494 million in Canadian funds. Subtract from that $10.6-billion price of the overall bailout package the roughly $1.6 billion in loans, and our governments paid $9 billion for an equity stake worth just under $58 million.

But it’s okay: over the next nine years, our governments have pledged to sell off their stake, a little bit at a time. So if the stock, say, quintuples in value in that period, we could get back as much as two cents on the dollar.

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Coyne v. Wells on Raitt-gate and the auto bailout

By macleans.ca - Friday, June 5, 2009 at 4:07 PM - 32 Comments

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Tony Clement and a potted plant

By Aaron Wherry - Friday, June 5, 2009 at 3:34 PM - 8 Comments

The Industry Minister talks about the GM bailout.

'Well, I'm not an expert on the automobile industry'

By Aaron Wherry - Tuesday, June 2, 2009 at 1:05 PM - 3 Comments

CTV’s Ken Shaw challenges the Prime Minister on the GM bailout.

The Sad Reality facing General Motors

By Steve Maich - Friday, December 12, 2008 at 10:16 AM - 38 Comments

The Congressional plan to bail out the Detroit auto industry died a swift death last night, but the White House may yet swoop in with a unilateral bailout of its own. Reports surfaced this morning to suggest that the Treasury Department, on the authority of the President (and presumably the U.S. Fed) would tap the $700 billion fund to bail out Wall Street in order to get enough cash to Detroit to keep the companies afloat until next year.

That, of course, would finally destroy any notion that the U.S. Government is actually operating with a coherent plan. I know, I know…nobody really believed that anymore anyway. But the Trouble Asset Recovery Plan (TARP) was first supposed to buy up bad mortgage assets, then got converted into a giant bank account to buy bank stocks, and now, apparently, it might also branch out into the car business. This, dear friends, is what’s known as making it up as you go along.

Unlike my friend Andrew Coyne, I’m a little more sympathetic to the idea that governments can lend a helping hand to industry in times of trouble. That said, these bailout plans are disasters in the making. The best explanation of why can be found here (a column from a month ago in the Wall Street Journal by Michael Levine.) Continue…

Did GM "betray" America?

By Steve Maich - Monday, December 8, 2008 at 9:52 AM - 21 Comments

This morning marks a watershed moment in the history of GM: It has decided to dispense with spin and throw itself on the mercy of the North American People. Continue…

As axe swings at GM, will Pontiac survive?

By Colin Campbell - Friday, November 28, 2008 at 11:28 AM - 6 Comments

Rumours have been flying this week that GM is planning to drop some of its eight different brands, including Pontiac, Hummer, Saab and Saturn.  When the heads of the Detroit Three head back to Washington to beg for cash next week, they need to prove they’re willing to make steep cuts. For GM, this would be a necessary step in the right direction.  Critics have been arguing for years that eight brands is way too many. Hummer is a write-off in this day and age. Saab is nice, but the upscale European brand doesn’t seem an easy fit in the GM family. And Saturn has always been a bit of a disappointing outcast. Pontiac, however, stands out on the list. The 82-year-old brand has struggled with poor sales in recent years, but seems on the verge  of a big turnaround.  The influential auto blog Jalopnik called the Pontiac G8 the ‘new BMW’. It would be a shame to see it go now.

Rise and fall of the young fogeys

By selley - Monday, November 24, 2008 at 1:32 PM - 10 Comments

Must-reads: Conrad Black on a certain grotesque miscarriage of justice; Jeffrey Simpson on Henry Waxman; Don Macpherson on Mario Dumont; Greg Weston on Bob Rae; George Jonas on “Singapore of the North.”

Brother, can you spare a dime?
From Washington to Lima to the Circuit Gilles-Villeneuve, there’s bad news on the economy. But you already knew that.

The National Post‘s Terence Corcoran asks us if we really want the future of the North American auto industry to be in the hands of politicians intent on aping Jerry Maguire (“Until they show us the plan,” said Sen. Harry Reid, “we cannot show them the money”) or who actually believe “GM would be better off if CEO Rick Wagoner wandered about U.S. airports in search of his luggage.” By all accounts, he observes, a bailout would mean “further suppression of market forces from an industry already burdened by regulations that have driven it into the ground” and the “continued existence of union protections,” among other impediments to future success. Let them go bankrupt, Corcoran implores, in hopes they might someday be able to recover “in a genuine market.”

Playtime’s over, the Ottawa Citizen‘s Randall Denley advises Canadian union members in both the private and public sectors. It may well be unfair that government workers should suffer for the fiscal mismanagement of city councillors or school board trustees, he concedes, but “the same accusation could be made about the management of many corporations that are laying off employees. That doesn’t create any more money for raises.” He suggests the brothers and sisters be happy just to remain employed, and believes “sharing the pain” with their fellow Canadians isn’t too much to ask.

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The car industry crash, by the numbers

By selley - Friday, November 21, 2008 at 5:23 PM - 5 Comments

As a rule, recent years have not been kind to automakers. But amidst the general chaos, the North American car manufacturers—formerly the “Big Three,” now more accurately known as the “Detroit Three”—have sunk well below the rest. As the CEOs of Ford, General Motors and Chrysler plead for mercy from Washington, Macleans.ca presents a statistical snapshot of their nightmare.

Highest stock price of the five largest publicly traded automakers as of the Nov. 20 close on the New York Stock Exchange: $59.79 (Toyota)

Toyota’s stock price on Nov. 20, 2007: $110.07

Best performance of those five stocks over the past year: -43.9% (Honda)

Poorest performance: -89% (GM) Continue…

The decline of the North American car

By Colin Campbell - Thursday, November 20, 2008 at 8:00 AM - 36 Comments

UPDATE (June 1, 2009): General Motors, the once proud icon of U.S. capitalism, filed for bankruptcy Monday. In the following piece, published last November in Maclean’s, Colin Campbell navigates through the rise and fall of the U.S. auto industry. In doing so, he identifies what went wrong at GM and explains whether the car company is even worth saving.

In hall No. 5, tucked far away from the main action at the high-profile Paris Motor Show last month, visitors who looked hard enough would have found the booth belonging to General Motors Corp. Those who went to the trouble—and not many did—were disappointed with what they found.

Paris was the place GM had decided to raise the curtain on a critical piece of its future in a world increasingly focused on efficiency and economy—the Chevy Cruze. The Detroit company is pinning its hopes on the lightweight Cruze to lure car buyers in Asia, Europe and North America away from bestsellers like the Honda Civic. Yet there were none of the usual showbiz trappings at its unveiling: no models leaning against the hood, no rock-concert special effects to usher in the age of the Cruze. Just a plain white stage and the car itself: a conventional, even understated, four-door family sedan. It “had all the pomp and circumstance of a Tuesday,” noted one auto critic. Perhaps it was just as well then that few journalists bothered to show up.

Most automakers look to the Paris show to highlight their next small, fuel-efficient wonders. It’s a science fair disguised as a car show. Mercedes-Benz and BMW were unveiling their first hybrids. Nissan snagged attention with its tiny Nuvu. Hyundai brought along its new mini-car, the i20. But at GM’s second-floor exhibit, visitors were confronted by a collection of massive Hummers and a hulking Cadillac Escalade. “This was emblematic of GM,” says Maryann Keller, an independent auto analyst who has covered the industry since the 1970s. “Here’s this show dedicated to small cars, new technologies, electric vehicles. Why, to Paris, would you bring Hummers, the Escalade and a Camaro? What planet are you on?” Continue…

The real reason a Big Three bailout is a bad idea

By Andrew Coyne - Thursday, November 20, 2008 at 8:00 AM - 103 Comments

Everyone has his own favourite story of Big Auto’s stupidity. Mine is the Great Invisible Japanese Trade Wall of the 1980s. At the time, Detroit was bellowing to the skies that Japan was keeping American cars out of its market, the better to support its case for restricting sales of Japanese cars in the U.S. If it was unclear how the Japanese were supposed to be doing this—Japan’s trade barriers were if anything rather lower than America’s—that only seemed to provoke Detroit to further heights of indignation: those inscrutable Orientals, with their mysterious, subtle ways. Of course you couldn’t see how they did it! That’s why it was so effective!

Until someone pointed out that the cars the Big Three were pressing upon the Japanese consumer were left-hand drive, suitable for driving on the right side of the road. It seems Japan drives on the left. Who knew? Continue…

As Paul says, please try to keep up

By Aaron Wherry - Friday, November 14, 2008 at 5:30 PM - 9 Comments

January 16: Ottawa turns down auto aid
January 17: No bailout for Ford, Flaherty says
February 29: Canada won’t bail out auto industry: minister
April 1: Ford calls on Ottawa for funding
September 3: Tories pledge $80 million for Ford plant
September 26: McGuinty, Prentice at odds on funding
October 28: Prentice says no to auto parts bailout
November 8: Canada cautiously considers assistance to auto industry
November 10: Auto sector of particular concern, Flaherty says
November 10: Harper hints at auto bailout
November 12: Clement examining options for aid to auto sector
November 12: Flaherty, CAW spar over bailout for automakers
November 13: Don’t expect bailout: Flaherty to auto industry
November 13: Canada, U.S. talking about carmaker aid: Flaherty
November 13: Flaherty says any auto industry aid can’t be wasted
November 14: Ottawa ponders Canada-U.S. auto bailout plan

Guess who has a plan to save the auto industry?

By Aaron Wherry - Friday, November 14, 2008 at 1:37 AM - 8 Comments

Neil Young. And yes, it includes a bailout.

Selling to the frugal

By Jason Kirby - Friday, October 24, 2008 at 5:45 PM - 2 Comments

Consumers are clearly developing a taste for frugality, as we discovered while researching our story in this week’s issue of Maclean’s. That much is known. What companies and marketers have yet to figure is how to navigate the new era of thrift.

As the economy continues to sour, marketers are rethinking the best offers and incentives to dangle in front of a newly budget-conscious public. But figuring out what offers will resonate is a tough task, with the media landscape already littered with companies crowing about discounts and good values.

As the WSJ story points out, companies that opt for price-based promotions run the risk of training customers to expect more for less. That’s exactly what happened to General Motors. With Japanese competitors stealing market share a few years ago, the company responded by offering rebates and huge discounts, until customers refused to pay full price for a Pontiac. GM has tried to ween customers off the deals, but it’s been a tough slog, and the looming recession is only making that task harder.

Still, don’t be surprised to see plenty of sales geared to belt-tighteners.

Well, Whadayaknow.

Brian Burke…not so good.

By Steve Maich - Tuesday, August 26, 2008 at 6:08 PM - 0 Comments

Al Strachan has written what will henceforth be known as “The Definitive Hatchet Job on Brian Burke.”

Ol’ Al doesn’t think Ol’ Brian is such a hot general manager and he dredges up a few of Burkie’s less-stellar moment as GM of the Canucks. He also makes the totally legitimate point that Burke gets a lot of credit for an anaheim cup winner that was largely built by his predecessor.

I went back and took a closer look at Burke’s major trades with the Canucks and it’s true, on the big splashy ones, he was only fair-to-middling at best.  Continue…