Handicapping Car And Truck Of The Year Contenders

Story from the Detroit Free Press

The short list of cars and trucks in the running for 2010 North American Car and Truck of the Year just hit my inbox.

Myself and the 49-odd -- and we are pretty odd -- other jurors considered all the new vehicles introduced this year and decided these 25 are worth a closer look as we prepare to vote for the car and truck of the year.

The jurors include automotive writers from leading newspapers, magazines, Web sites, television, radio and freelance journalists.

We consider innovation, design, safety, performance, driver satisfaction, value and a vehicle's significance.

We'll have the opportunity to test the vehicles on the short list again before voting for three finalists for each award. We choose the winners from those three.

The North American Car and Truck of the Year will be announced at the North American International Auto Show at Cobo Center in Detroit on Jan. 11.

At this point, I have no idea what will win, or how I'll vote. However, I can handicap the contenders' strengths and weaknesses.

2010 North American Car of the Year
BMW 335d

Pro: High m.p.g. from a powerful new diesel engine.

Con: A new engine in a carryover car competing with vehicles that are completely new.

Buick LaCrosse

Pro: Style, performance, technology.

Con: May be considered a disappointment if it doesn't change Buick's stodgy image.

Cadillac CTS station wagon

Pro: A more practical version of a car we already love.

Con: A new body style competing with all-new vehicles.

Chevrolet Camaro

Pro: Performance, style, value. An American alternative to German luxury sport coupes.

Con: Specialty models can have a tough time competing with mainstream cars.

Ford Fusion/Fusion Hybrid

Pro: New looks, technology and fuel economy.

Con: Could split votes with the Taurus.

Ford Taurus

Pro: Looks, value and unique features revive the Taurus name.

Con: Could split votes with the Fusion.

Honda Insight

Pro: High mileage, low price.

Con: The Toyota Prius has better fuel economy and more features at a slightly higher price.

Kia Soul

Pro: Looks, value, fun.

Con: A huge leap for Kia, not significant to the industry.

Mazda3/MazdaSpeed3

Pro: Looks, value, performance.

Con: Doesn't break new ground.

Mercedes-Benz E-Class

Pro: Luxury, technology and performance.

Con: An expensive niche vehicle that's not a big seller.

Porsche Panamera

Pro: Looks, technology and performance. A radically new vehicle from a revered brand.

Con: Very expensive niche vehicle.

Subaru Legacy

Pro: Popular and dependable sedan.

Con: Crowded sedan field. Does not break new ground.

Suzuki Kizashi

Pro: A good midsize sedan that's a big step for Suzuki.

Con: Does not break new ground.

Toyota Prius

Pro: High mileage, new features from an established leader.

Con: Fuel economy improvement is relatively small from previous model.

Volkswagen Golf/GTI

Pro: All-new version of one of the world's best-selling cars.

Con: Not likely to break new ground for VW or the industry.

2010 North American Truck of the Year
Acura ZDX

Pro: Unusual looks in Acura's new top-of-the-line model.

Con: Does not break new ground.

Audi Q5

Pro: Handling, comfort and style.

Con: Does not break new ground.

Cadillac SRX

Pro: Handling, comfort, style, value.

Con: Does not break new ground.

Chevrolet Equinox

Pro: Fuel economy, value, looks.

Con: Crowded crossover field.

Ford Transit Connect

Pro: Fuel economy, value and flexibility in a new kind of commercial vehicle.

Con: No commercial vehicle has ever won Truck of the Year.

Honda Crosstour

Pro: Looks and cargo space in a roomy complement to the Accord sedan.

Con: Polarizing styling.

Land Rover LR4

Pro: New looks and interior improve a sturdy off-roader.

Con: An update of a vehicle competing with all-new models.

Lincoln MKT

Pro: Style, technology, performance, fuel economy.

Con: Polarizing looks.

Subaru Outback

Pro: A popular and dependable crossover.

Con: Does not break new ground.

Volvo XC60

Pro: Style, technology and value.

Con: Crowded luxury-crossover field.

GM To Close Saturn

Story from the NY Times

DETROIT — General Motors said Wednesday that it would shut down its Saturn division by next year after Roger Penske abruptly cut off talks to acquire the brand.

The Penske Automotive Group said it could not proceed with the deal because another auto manufacturer, which it did not identify, said it would not build vehicles to be distributed under the Saturn brand name.

The decision by Penske Automotive stunned G.M. and Saturn dealers, who had hailed Mr. Penske, who has built a track record of successful turnarounds, as the savior of the brand that G.M. was forced to sell as part of its government-financed bankruptcy reorganization.

“Today’s disappointing news comes at a time when we’d hoped for a successful launch of the Saturn brand into a new chapter,” G.M.’s chief executive, Fritz Henderson, said in a statement. “We will be working closely with our dealers to ensure Saturn customers are cared for as we transition them to other G.M. dealers in the months ahead.”

There were no indications that the negotiations — first announced in June — were faltering.

But Penske Automotive said that an agreement with a potential manufacturer of future Saturn products had been rejected by that company’s board. Penske Automotive declined to name the company, but people familiar with the transaction said that the Renault-Nissan alliance had been involved in discussions.

G.M. had agreed, under its proposed deal with Penske, to continue supplying Saturn with three vehicles through 2011. Penske Automotive said that it could not acquire Saturn without a deal in place for the supply of future models.

“Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction,” Penske Automotive said in a statement. Thomas Pyden, a G.M. spokesman, said there were no plans by the automaker to seek other buyers for the Saturn division, which was created in 1985 to compete against the tide of small, fuel-efficient Japanese sedans that had become popular with American consumers.

Saturn’s 350 dealerships across the United States will close because of the development. The Saturn stores are known for their no-haggle, low-pressure sales approach and focus on customer service. None of the stores sells vehicles made by another G.M. brand. GM and Saturn derive steady profits from a diverse line of aftermarket parts, sportbike parts, OEM parts, even unique lines such as GSXR 600 parts and GSXR 1000 parts.

Saturn dealers said Wednesday that they were blindsided by the news of Penske Automotive’s reversal.

“We’re all stunned,” said Mary McHugh, an executive with Saturn of Schaumberg near Chicago. “We didn’t get any communication from Saturn. We just heard it on the news.”

Under the proposed deal with Penske Automotive, the dealers were to continue selling three vehicles: the Aura sedan, Outlook crossover vehicle and Vue sport utility vehicle. Two models, the Astra compact car and Sky convertible, were being discontinued. Penske Automotive had already sent the dealerships new two-year franchise agreements to sign.

G.M., with the Penske deal now off the table, said it planned to stop building all Saturn models at the end of the 2009 model year, meaning almost immediately. Sales of the brand were down 58 percent this year, through August.

Penske Automotive, which owns a chain of dealerships and already distributes Daimler’s Smart car brand in the United States, had been in exclusive talks with G.M. for Saturn since June, beating out proposals from several other bidders, including a private equity firm tied to a Saturn dealer in Oklahoma.

Auto analysts had predicted that Penske Automotive could succeed in selling Saturns where G.M. had failed, mostly because of Mr. Penske’s reputation. The 72-year-old former race car driver is considered one of the savviest businessmen in the industry, and a specialist in turning around troubled automotive operations.

But Mr. Penske’s plans for Saturn depended on attracting another manufacturer to supply vehicles after G.M. cut off production.

“I don’t think he could find anybody who could give Saturn a competitive product line within two years,” said Joseph Phillippi, a principal in the firm Auto Trends Consulting. “It’s not surprising that a foreign automaker would not want to be entering the U.S. market now.”

G.M. said it would honor the warranties of all Saturn vehicles through other G.M. dealerships.

Saturn is one of four brands that G.M., which spent about six weeks in Chapter 11 bankruptcy protection this year, plans to eliminate in the United States.

It is shutting down Pontiac by the end of the year, is selling Saab to a company in Sweden and has a deal to sell Hummer to a Chinese manufacturer.

G.M. also has agreed to sell a majority of its European brand, Opel, to a group led by Magna International, a parts maker, and the Russian bank Sberbank.

From Project Manager To Bathroom Attendant

White-collar jobs go trailing after a sliding economy

Story from the Wall Street Journal

ROCHESTER HILLS, Mich. -- Dave Duncanson still isn't used to being on his feet all day.

The head custodian at Stoney Creek High School starts his day at 4 p.m. by logging onto a computer, reading a series of building reports and assigning cleaning tasks to his subordinates. Then he must march through dimly lit hallways to clean his designated area: the principal's offices, the counselor's wing and the media center. For hours each weeknight, he can be found pulling trash from bins, vacuuming carpets, putting desks and chairs back in place.

The job pays $15.05 an hour and comes with a pension and benefits. In that sense, Mr. Duncanson, 49 years old, feels fortunate. But the story of how he got here offers a window into the deteriorating economy of Michigan, once a bastion of middle-class prosperity, and the plight of tens of thousands of white-collar workers who have been displaced by the near-collapse of the domestic auto industry.

Less than a year ago, Mr. Duncanson was working a few miles away in Auburn Hills, at a desk on the fourth floor of Chrysler's tech center. There, he was a product-development manager making $109,000 a year in salary. At his current job, he'll make less than a third of that.

"At first, I just wanted to do something to bring in money," says Mr. Duncanson, who had spent eight and a half years at Chrysler and took a buyout last November as the company slid toward bankruptcy. "I figured things would bounce back."

They haven't. Michigan's unemployment rate has galloped to 15.2% in August from 9.6% in November, running roughly one and a half times the national rate and leading all states for at least 26 of the last 28 months. In metro Detroit -- home to all three big U.S. auto companies -- the jobless rate is 17.7%, the highest of any large urban area in the country, according to the Department of Labor.

"I sweep floors. I mop bathrooms. I clean up puke."

For Mr. Duncanson and former colleagues who left Chrysler in a swirl of white-collar job cuts last fall, the result has been a year of frustration, financial insecurity, swallowed pride and, inevitably, sacrifices.

Mr. Duncanson got his first auto-industry job in 1984, armed with just a teaching degree from Northern Michigan University. He joined Chrysler in 2000, working his way up through a series of managerial jobs in product development.

Though he wasn't an engineer, he oversaw large teams of Chrysler engineers during pivotal powertrain launches for vehicles such as the Dodge Ram pickup and Jeep Liberty SUV. His specialty was streamlining processes, which put him in a layer of management that Chrysler was eager to eliminate when it ran out of cash and slashed its product-development budget late last year. He left with a buyout package of $50,000 in cash, an amount based on his eight-plus years of service.

He had been out of work for three months when he approached his local school district, Rochester Community Schools, which serves this wealthy suburban community north of Detroit. He figured he could land a teaching job, only to find out that his teaching certificate had long expired. Eager to pass the time, he took the one district job that was available to him: substitute janitor, at $10 an hour.

His wife, a part-time teachers' aide in the same district, was supportive. His two teenage daughters were initially horrified at the thought of their friends seeing him pushing a broom or cleaning a bathroom after school. But the older one, 16-year-old Heather, says few students are comfortable talking about their parents' jobs lately.

"Some of my best friends, their parents could be out of a job and I wouldn't know," she says.

By July, unable to find other work, Mr. Duncanson seized an opportunity to take a custodian's job full-time. He was assigned to Stoney Creek, a crosstown rival of the school his daughters attend. With the promotion came a raise, though it was diminished that same week when the custodians' union accepted a 25% pay cut to avert outsourcing.

Mr. Duncanson proudly notes how has been able to transfer his experience in streamlining processes to his current job as head custodian. Still, he says, "How would you like to be the guy who runs into his old co-workers and says, 'Hey, I clean toilets'?"

As Stoney Creek opened last week for Mr. Duncanson's first school year as a custodian, he considered himself one of the lucky ones. A year after the exodus began at Chrysler, many of his former co-workers are still out of work and have no steady income, health-care coverage or retirement benefits. He has all three. Even the mortgage is taken care of: He used his $50,000 buyout package to pay it off. And he's hoping to gain a builders license to supplement his income.

The evenings at the school are long -- the shift ends at midnight, after his wife and daughters have gone to bed -- and the new job is tough on his feet. The family is watching spending carefully; dinners out and big family vacations are no longer an option.

But there are upsides. The heavy-set Mr. Duncanson has lost 25 pounds since giving up his desk job, and his cholesterol is down enough that he's off medication. The former efficiency expert has already gotten a promotion, in part for streamlining the school's daily cleanings.

More importantly, he says, his daughters have learned the value of a hard day's work, no matter what kind. Living in an affluent suburb where classmates routinely get new cars for their 16th birthdays, he says, that hasn't been easy.

"Well, yeah, it hurt," he says, of accepting a lower-paying job. "But every dollar counts."

Michigan Singing White-Collar Blues

Story from the Wall Street Journal

Tony Barr is waiting for his big break -- or any break at all.

Last fall, just as Chrysler Corp. was sliding toward bankruptcy, he and two other colleagues in product development left the company to start their own consulting business, marketing their efficiency expertise to other firms in Michigan.

So far, they have lured just one paying customer. "Even if you tell people you'll work for free," says Mr. Barr, many companies "don't even want to talk to you."

Mr. Barr, 46 years old, was the type of well-educated, white-collar "knowledge" worker that Michigan hoped would help offset a decline in auto-assembly jobs. But Detroit's Big Three car makers have aggressively thinned these ranks in the past two years, perhaps permanently, casting tens of thousands of midcareer, white-collar workers into an extended limbo.

Many displaced veteran workers who once earned high salaries in engineering, information technology, research and design jobs aren't now destitute, thanks to generous severance packages. But they find themselves stuck, unable to find comparable work in Michigan, but also unable or unwilling to uproot their families and try their luck out of state.

For them, the choices come down to taking whatever job they can get, or waiting for something to come along.

From the end of 2006 through June, the Big Three eliminated nearly 30,000 North American white-collar jobs, virtually all in Michigan. Chrysler's white-collar work force is less than half what it was at the end of 2006.

As a result, Michigan's unemployment rate galloped to 15.2% in August from 9.6% in November, when the exodus from Chrysler began, and has led all states for at least 26 of the past 28 months. Metro Detroit's 17.7% jobless rate is the highest of any large urban area in the country.

Michigan also leads the nation in labor underutilization -- a broader measurement of job-market limbo that includes the unemployed, people who quit looking for work, those who have been cut to part-time status and those who are working part-time while they seek full-time employment. Over the four quarters ended June 30, around one in five Michigan workers fell into this category, according to the U.S. Department of Labor.

Labor-market economists say skilled workers in Michigan with years of experience, particularly from the auto sector, must compete against a flood of younger, better-educated candidates for a shrinking pool of jobs. Their specialized expertise, highly valued in their former posts, is a tough sell anywhere else.

"To find a new job they'll probably end up making less, probably substantially less," says Don Grimes, a senior researcher at the University of Michigan's Institute for Research on Labor, Employment and the Economy. "It's going to be painful."

Compounding the problem, Metro Detroit's housing market remains in profound decline, even as other areas stabilize. As of July, home prices in the region are down 45% from their peak in early 2006, as measured by the Case-Schiller home-price index, and are down to 1995 levels, destroying millions of dollars in household wealth and stranding thousands of middle-class families in homes they can't afford to sell.

"We haven't seen the huge out migration, not yet," says Jim Rhein, an economic analyst for the Michigan Department of Energy, Labor and Economic Growth. Part of the reason: "It's not looking rosy anywhere else," he says.

Michigan has scrambled to shift its economy toward other industries that can attract high-wage jobs, such as defense, alternative energy, health care and even movies. Those jobs are only trickling in.

Tom Boileau, 55, has seen how difficult the transition has been. After 35 years in product development at Chrysler, Mr. Boileau was earning roughly $110,000 a year when he took an early-retirement deal last fall that pays him a pension of nearly $4,000 a month. He was later hired by Michigan Works, a state agency that helps displaced workers retrain and find jobs.

Each day, Mr. Boileau says, 90 to 100 unemployed people sat at his desk at a state office in Detroit, where he handled primarily suburban white-collar engineers' cases. "They kept coming back and coming back and coming back, and working on their résumés," says Mr. Boileau. "I didn't see anyone get anything."

Mr. Boileau himself hasn't fared much better. Since his contract with the state expired in April, he has been without a full-time job. He fills his time working as a part-time hockey coach, which pays $500 a week during the season. While he'd like to work full-time, he acknowledges that at age 55 and without a bachelor's degree, he'd be lucky to get a third of what he used to make at Chrysler.

Dave Duncanson considers himself one of the lucky ones. Less than a year ago, he was earning $109,000 a year as a Chrysler product-development manager, overseeing large teams of engineers during pivotal powertrain launches. He left in November with a $50,000 cash buyout.

This summer, he started a full-time job as head custodian at Stoney Creek High School in Rochester Hills, Mich., the upscale suburb where his family lives. For hours each weeknight, he can be found pulling trash from bins, vacuuming carpets and putting desks back in place. The job pays $15.05 an hour, or about $31,000 a year after a recent 25% pay cut, and offers a pension and health benefits.

Mr. Duncanson, 49, says he was baffled at first that he couldn't find work to match his qualifications. But he's come to appreciate the stability of full-time work. "A little upgrade from where I'm at, and I'd be happy with that," he says, "just to avoid the auto industry."

Mr. Duncanson, who spent 26 years in the auto industry, proudly notes how he has been able to transfer his experience in streamlining processes to his new job. Still, he says, "How would you like to be the guy who runs into his old co-workers and says, 'Hey, I clean toilets?'"

Mr. Duncanson can think of just one person in his old department at Chrysler, a younger engineer named Melissa Nemeth, who successfully landed a comparable job. She and her husband, Phil, a General Motors engineer, sold their home in suburban Sterling Heights, Mich., for a $40,000 loss, but managed to cover the mortgage balance. They moved to Oregon. "It couldn't have gone any better, but it was a scary ride," says Ms. Nemeth.

As more-junior workers earning lower salaries, the Nemeths, both 30, were able to pack up and find new jobs out of state, adapting their skills to new industries. But many veteran workers won't or can't. Some remain convinced that given their specialized skills, their best prospects for comparable work are in Michigan. Many can't absorb a pay cut or the loss on their house. Others, like Messrs. Duncanson and Barr, have strong family ties to Michigan.

At home, Mr. Barr is struggling with his new role. When he left Chrysler with a $75,000 cash buyout, his wife, who also worked there as an engineer, bumped up to full-time. Mr. Barr is now the parent who drops his three kids at the movies or picks them up from practice. Here in his hometown, one of Detroit's most affluent suburbs, he has noticed more dads walking their dogs in the middle of weekdays, just like him.

His efficiency business is predictably lean. He and his partners run it out of his home office, occasionally venturing out to local restaurants to pitch prospective clients. "We've taken people out to lunch and it's like, 'I'll get a salad,'" says Mr. Barr.

After one such lunch in June, Mr. Barr recalls, the prospect, from a large local accounting firm, left the bill on the table and said, "When you guys get an office, why don't you call us?"

While he waits for business to catch on, Mr. Barr has found an outlet for his technical skills. For five hours a week he teaches a neighbor how to use her computer. It pays $30 an hour.

Says Mr. Barr: "I didn't want to grow up to do this, you know?"

Auto-Makers Want Europe To Continue 'Clunkers'

Story from the Wall Street Journal

Auto makers are pushing European governments to continue their "cash for clunkers" programs, fearing that the fragile industry may face a major slowdown if the rebate programs end.

The moves come as Germany and Britain are winding down their scrappage programs, which are aimed at getting buyers to turn in less-fuel-efficient vehicles and buy new cars with better mileage. Meanwhile, Ford Motor Co. and others say they are helping Russia get a scrappage program off the ground.

"We would like to continue the scrappage programs or we would like a more general winddown of the programs instead of letting them just come to a quick end," John Fleming, chief executive of Ford's European operations, said in an interview."

How long Europe continues the programs and any lasting effect from them could have implications for the U.S. The wildly successful U.S. "clunkers" program boosted sales to heights not seen in years. But the program's end last month also brought worries about how much U.S. sales would decline after the rebates expired.

"Everyone is bracing themselves for a major slowdown, potentially next year," said Mark Fulthorpe, the director of European vehicle forecasts for CSM Worldwide. Pete Kelly, senior director in Europe for J.D. Power & Associates Automotive Forecasting, predicted that the slowdown would begin this fall and extend into the 2010 first quarter.

Tuesday, data from the European Automobile Manufacturers' Association showed that European new-car registrations, a measure of sales, rose 2.8% from a year earlier in July and increased 3% in August. The growth varied from country to country because of variations in the implementation of the incentives.

Individual European countries have implemented a dozen separate scrappage programs, and a 13th, in Greece, will go on line soon.

Ford estimates that scrappage programs will support the sale of three million vehicles in Europe in 2009 and 2010 and are the key reason total industry sales in the 19 largest European markets will be as high as 15.5 million in 2009, only about 7% to 10% below 2008 levels.

"The market in Europe is still very weak," Ford Chief Financial Officer Lewis Booth said in an interview at the Frankfurt auto show. "We'd rather see the end of scrappage arrive as the economies in Europe begin to recover."

France has indicated that its scrapping program will continue next year, though at reduced rates, to avoid a sharp sales drop. Currently, the French government offers €1,000 ($1,457) for the purchase of a new car if the owner scraps one that is more than 10 years old. "The French government has said it will phase it out progressively," said Philippe Varin, chief executive of PSA Peugeot Citroën SA.

But car makers in Germany doubt the popular car-scrapping program there is likely to be picked up again anytime soon. The government pumped €5 billion into the plan, which ran out at the start of this month. Nearly two million German consumers participated in the program, which largely benefited mass-market auto makers like Volkswagen AG and Ford.

But skeptics say the program simply delayed a slump. Though car orders still being processed will fuel sales for a few more months, some analysts say German car sales next year could drop by one million cars from this year's expected 3.5 million.

"We said from the beginning it is not what we support," said BMW AG's finance chief, Friedrich Eichiner, of the way the short-term incentives were structured. "Others demanded it, and now they got it."

After Clunkers, Ford Sales Still A Bright Spot

Story from Detroit Free Press

Ford Motor Co. — whose 5% sales decline in September outperformed the industry’s 23% plummet — picked up 3 percentage points of market share last month, the 11th straight month Ford captured more showroom customers.

“This was an extremely volatile three-month period,” said Ken Czubay, Ford’s top U.S. sales chief. “It really put Ford to the test. We believe Ford passed.”

Ford was one of the few bright spots during September, as the expected hangover from the federal cash-for-clunkers sales boon, which depleted car and truck inventories nationwide, was far worse than many expected.

Several automakers reported an increase in shopping traffic during the last part of the month that gave them hope that a recovery, however slight, would be more evident in October. But that wasn’t very evident in the bottom line.

While Hyundai Motor Co. managed to post a standout 27% sales gain in September, sales were off for most major automakers last month. General Motors Co. was down 45%, while Chrysler Group LLC fell 42.1%.

September’s performance looked even worse considering that last September — when Lehman Brothers filed for bankruptcy and kicked off a global financial crisis — was the worst sales month in 15 years.

October, automakers said, would be the true bellwether for the state of the industry and the economic recovery.
Sept. sales are 2nd-worst month of 2009

“September was a pretty difficult month from Day One right on through to the end of the month,” said Mark LaNeve, vice president of U.S. sales for GM.

The sales rate in September declined to 9.22 million — the lowest rate since February, according to Autodata Corp. The selling rate is what the sales would total for the year if demand remained constant, adjusted for seasonal factors.

Automakers said sales of new cars and trucks dropped severely in early September after federal funding for the government’s cash-for clunkers program expired.

The buying spree that the program created began in late July and continued through late August. It was so successful that it depleted inventory at dealerships across the country and pulled ahead some buyers who normally would have waited until fall.

That left dealerships with a 29-day supply of cars and trucks at the end of August — the lowest since at least 1975, according to WardsAuto.com.

GM’s pain was spread across the board. Sales of its top-selling Chevrolet Silverado pickup dropped 61.5%. Its key post-bankruptcy brands all disappointed. Sales fell 53% for GMC, 41% for Chevy and 33% for Buick. Only Cadillac beat the industry, with a 9% decline.

GM’s soon-to-be-castoff Saturn brand posted an 84% plummet.

“I’d say September underperformed expectations,” LaNeve said.
Automakers: We still see recovery

While LaNeve characterized the pace of sales throughout September as lousy, both Ford and Toyota Motor Corp. said the pace of sales increased during the month and all three said they expect the sales rate to rise this year.

"We definitely see the economy improving,” said Mike DiGiovanni, GM’s executive director of global market and industry analysis. “It’s going to be a bumpy road, but we are on the way to a recovery.”

Toyota, a major beneficiary of this summer’s cash-for-clunkers program, saw its September sales fall 13%.

“The truth is, we could have sold more cars if we had them” in September, said Don Esmond, senior vice president of Toyota’s U.S. division. “We saw a positive improvement week after week in showroom traffic.”

Chrysler said it struggled with inventory issues in September both because of cash-for-clunkers and because it stopped production entirely from May 1 through June 28 while it went through bankruptcy reorganization.

Bill Golling, who owns a Chrysler-Jeep-Dodge dealership in Bloomfield Hills, said he had a lot of minivans in September, but very few small cars, which hampered sales.

“The inventory situation should be better as October goes along,” Golling said.

GM To Boost Output Of New Models

Story from the Wall Street Journal

General Motors Co. dealers are pushing the car maker to boost availability of some of its hottest-selling models, forcing the company to reconsider production plans for 2009.

GM Vice Chairman Bob Lutz said Tuesday the car maker underestimated demand for a slate of new products that hit the market after its bankruptcy filing in June. The miscalculation was due primarily to the fact GM aimed to be overly cautious as it planned production volumes, and because its conversations with dealers earlier in the year led the company to expect softer demand than GM has seen in recent weeks.

"We need to look at our plans," said Mr. Lutz, interviewed at a GM product launch in Plymouth, Mich.

While stopping short of laying out specific additional production beyond plans GM announced last week, he said the auto maker may need to add a second plant for compact crossover-vehicle production beyond the facility it uses in Canada. GM also is looking to add workers to factories that are short-staffed, including at a crossover plant in Michigan.

The Chevrolet Equinox crossover, Camaro sports car, Buick LaCrosse sedan and Cadillac SRX crossover are among new vehicles Mr. Lutz indicated are outpacing the company's initial forecast.

"We are selling every Cadillac SRX, every Equinox, every Buick LaCrosse and every Camaro within 48 hours of being delivered to us," said John Bergstrom, owner of several Wisconsin GM dealerships. "These products are home runs."

GM has a 33-day supply of vehicles on dealer lots, down 45% from the beginning of August, according to Ward's Automotive Group. In trying to replenish the pipeline, GM executives say they will have to balance the outcry for more cars from dealers with the need to control supply so that it doesn't flood the market.

The promising start for new models is a rare bright spot in what continues to be a dismal environment for both GM and most competitors. After the industry's short-term boost in July and August triggered by the government's "cash for clunkers" incentive program, most dealers and industry analysts, including Mr. Lutz, are projecting a return to historically low U.S. sales for the foreseeable future.

"So far, September is weak and the month is not meeting anybody's expectations," Mr. Lutz said, predicting volumes for the industry will be below levels achieved in September 2008. Nevertheless, he said the market is showing signs of stabilization.

Ford Motor Co. Chief Executive Alan Mulally said Tuesday his company expects the industry to sell 10.5 million to 11 million cars and light trucks in the U.S. this year, after running at an annual rate of less than 10 million in the first half. "Some people think we're being conservative," Mr. Mulally said in an interview. Ford has been gaining market share in recent months and posting sales increases.

That GM's new products are finding a receptive audience underscores the company's strategy for responding to its widely criticized bankruptcy and government bailout.

GM's U.S. market share has fallen by more than two points in 2009, and it is banking on a sweeping advertising campaign touting new, more fuel-efficient products and a 60-day money-back guarantee to stanch the decline.

In Tuesday's interview Mr. Lutz gave specific figures on the company's demand miscalculations. GM, using dealer feedback, initially estimated it would need to build 7,700 Equinox crossovers in October, but dealers now want 29,000. It estimated it would need 3,600 Lacrosse sedans, but dealers have asked for 9,600. And dealers want 11,000 GMC Terrains, compared to the 4,300 GM estimated.

"A lot of great things that were in [GM's] hopper are now coming out," said Karl Brauer, editor of consumer-research Web site Edmunds.com. "They're being consistently well received, which is what GM needs."