TOP 100 RACING SITES
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| Ford's Mulally Is The $13 Million Man Ford Motor Co. CEO Alan Mulally’s total compensation for 2008 dropped by 37% to $13.6 million last year. That's still a hefty sum, considering Ford’s record losses and continued financial fragility. Meanwhile, Mulally -- who, like his counterparts at General Motors (GM) and Chrysler, was excoriated by Congress and the media last November for flying a private jet to Congressional hearings -- no longer flies on Ford-owned jets. But he does fly on chartered private planes. Mulally's pay and perks are detailed in a preliminary proxy filed with the U.S. Securities and Exchange Commission. While his compensation may still seem generous for a company that lost $14.7 billion in 2008, Wall Street analysts and even harsh critics of the Detroit Big Three in Congress have credited Mulally for swiftly transforming Ford (F) into a company that, if the U.S. economy would cooperate even a little, should be ready to compete head to head with Toyota and Honda.Ford so far has not taken loans from the U.S. Treasury’s Troubled Asset Relief Program like GM and Chrysler. Indeed, Mulally has been furiously restructuring the automaker and striking deals with bond holders and the union to avoid taking government loans or having to enter Chapter 11 Bankruptcy.Mulally has agreed to take a 30 percent cut in his $2 million salary this year and next year. Though the company has sold its corporate aircraft, the CEO remains required to fly on private aircraft for personal and business travel due to security concerns, according to the Ford proxy. The automaker valued Mulally's compensation for personal use of company and private aircraft in 2008 at $344,109, less than half the $752,203 the prior year.Executive perks have become a particularly sensitive issue amid U.S. government bailouts aimed at reducing the impact of the recession. Ford said in its filing that Mulally's family will be allowed to accompany him on trips when he flies on private aircraft and the company will pay the cost of coach-class commercial flights for his family when the travel is at his request.Mulally, who became CEO in 2006, has been granted the right to remain in “temporary housing” near Ford's headquarters, which cost the company $110,000 last year.The automaker has said it has enough liquidity to make it through the deepest downturn in U.S. sales in 27 years without seeking emergency U.S. government loans, unless conditions worsen dramatically beyond current levels.In addition to Mulally's salary cut for the next two years, Ford has eliminated performance bonuses for global salaried employees and senior executives for 2009 in a "shared sacrifice" with unionized hourly workers. The UAW has agreed to concessions on overtime, holidays and other areas, changes that Ford has said push its hourly labor costs closer to parity with the U.S. operations of Japanese rivals. rss.businessweek.com |
As hybirds go mainstream, Toyota, Honda rush to produce smaller models In Japan, it's getting difficult to make the case that hybrids are a niche for drivers keen to demonstrate their environmental credentials. In April, Honda's new Insight, which want on sale in February, was the country's best selling car (excluding 660cc minicars). Toyota, meanwhile, received a record 80,000 orders for the third generation Prius, which was launched last week. The previous record, held by a Toyota compact, was 47,000. Those numbers suggest, at least in Japan, hybrids are heading for the mainstream.Just as telling: Honda and Toyota are revving up plans a new generation of smaller gas electric models. According to a local media report today, Honda will bring forward a hybrid version of its Fit compact by 18 months to the fall of 2010. The Nikkei newspaper, without citing its sources, says the Fit hybrid will sell for $15,800, compared to the Insight’s $19,900. Like the Insight, it will use a 1.3 liter engine plus the company’s IMA hybrid system. The reports add that Honda expects Fit hybrid sales of around 50,000 a year in its home market—roughly a third of the number regular Fits it sold in 2008. Toyota is working a Yaris-sized hybrid which could hit the market by 2011 and will likely be sold for a similar price. That both are in the pipeline shows how quickly Toyota and Honda are bringing down the cost of making hybrids. Until recently, the notion that either could sell smaller hybrids without incurring losses seemed fanciful. After all, hybrid systems add cost and weight to any size car. For smaller vehicles, which are lighter and tend to be the least profitable in automaker lineups, the problems are obvious. Yet, if the report is correct, it sounds like Honda is confident of eking out further savings on its system. For the new Insight, it got the "hybrid premium"--the cost of adding the system compared to a similar size car--down to below $2,000. That enables Honda to make as much profit from each Insight sale as it would from selling a regular Fit. Toyota, too, insists it can compete in smaller hybrids. Speaking after the launch of new Prius last week, its chief engineer Akihiko Otsuka told me that critics had been wrong to suggest that its "parallel" hybrid system, which is more complex than Honda's "mild" version is too expensive for smaller cars. Otsuka said that while Toyota's system uses two motors to Honda’s one, its hybrids don’t need a continuously variable transmission. That, he said, means that Toyota, despite needing larger batteries, can make its hybrid system cheaply enough to use even in smaller cars. rss.businessweek.com |
How To Rewrite Cash For Clunkers Legislation Now that the “Cash for Clunkers” bill is ramped up and driving car-buyers into the showroom, let’s start writing the next one, or Phase 2 of the Clunkers bill.Just to review: The Cash for Clunkers bill, technically known as Consumer Assistance to Recycle and Save (CARS), went into effect this week. Congress budgeted $1 billion in Phase 1 to give vehicle-buyers either $3,500 or $4,500 to trade in an old car to buy a new one.As we have been reporting, the bill as written has some serious shortcomings. To qualify, the vehicle has to get less than 18 mpg.If the new passenger car being purchased has a combined fuel economy that is at least 4, but less than 10, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new vehicle has a combined fuel economy value that is at least 10 miles per gallon higher than the traded-in vehicle, the credit is $4,500.When it comes to trucks and SUVs: If the new vehicle has a combined fuel economy value that is at least 2, but less than 5, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new truck has a combined fuel economy value that is at least 5 miles per gallon higher than the traded-in vehicle, the credit is $4,500.Despite the fact that automakers and analysts tell me that the bill is going to juice July and August sales for the automakers, let’s look at what is wrong with the bill. It is tipped way too much in the favor of selling pickups and SUVs and not nearly enough toward making an improvement in the fuel efficiency of the U.S. car park.The bill was funded with just $1 billion. Congress is expected to take up the issue again in the Fall and consider a Phase 2 Clunkers bill that might be funded with an additional $2 billion or $3 billion.Let me offer a suggestion on how the bill for Phase 2 should be written to simplify it for consumers, drive sales and make a better environmental impact.$2,500 if you trade in an old vehicle no more than 20 years old, and buy a new vehicle or used vehicle that gets at least 8 mpg more than the old one.$3,500 if you trade in an old vehicle no more than 20 years old, and buy a new vehicle or used vehicle that gets at least 12 mpg more than the old one.$4,500 if you trade in an old vehicle no ore than 20 years old, and buy a new or used vehicle that gets at least 15 mpg more than the old one.I have included used vehicles here to put the rebates within better reach of lower income consumers. Buying up used cars that qualify not only helps dealers, but also the residual values of higher fuel economy vehicles.The bill does get old, more polluting vehicles off the road as the trade-in value of the cars has to be less than the incentives offered by government and the car companies in order to work for the buyer. Because the vehicles get scrapped, there is no “trade-in” value of the vehicle. So, that rusty 1989 Jeep Cherokee that still runs would have to be worth much less than the $4,500 you'd have coming if you were trading up to a Honda Fit or Ford Fusion Hybrid.This bill, as I wrote it, also rewards everyone for making a substantial step-up in fuel economy, whether the current car is a high-mileage 2000 Ford Crown Victoria or a 1998 Subaru Outback, and the consumer wants to buy, say, a Ford Escape Hybrid or Fusion Hybrid. In these two examples, there is no “clunker benefit” to the consumer for either the Crown Vic or the Subaru despite the fact the trade-in would result in a far greater fuel economy boost for the owner than, say, trading one old rusty, high-mileage pickup truck in for a new pickup truck.Also, if the consumer is going to buy a hybrid or diesel that qualifies for another government credit, the buyer should be able to avail themselves of both credits.The United Auto Workers and Alliance for Automotive Manufacturers needlessly made Phase 1 of the Clunkers bill overly complicated, and also tilted, by way of their influence in Washington, the bill toward boosting sales of pickups and SUVs.My bill is vehicle agnostic, and simply incents people to buy much more fuel efficient vehicles. The entire Phase 2 bill could fit on one page if they followed my idea. rss.businessweek.com |
Full throttle for TeamVodafone Defending Bathurst 1000 champions Craig Lowndes and Jamie Whincup say they are feeling no pressure despite being on the verge of making history this weekend. foxsports.com.au |
Toyota suspends sale of eight models. Toyota’s recall problems just keep getting worse. Toyota said today that it will suspend sales of the eight models that the company stated it would recall on Jan. 21 due to isolated incidents of a sticking accelerator pedal. A recall is one thing, but when a company decides to stop selling the cars, it’s quite another. Bob Carter, Toyota division general manager and a group vice president of Toyota Motor Sales USA, said in a statement that the company wanted to stop sales until a remedy is found. Recall that on Jan. 21, Toyota said it would recall 2.3 million vehicles that could potentially have a problem. They are the 2009 through 2010 RAV4, 2009 through 2010 Corolla, 2009 through 2010 Matrix, 2005 through 2010 Avalon, some 2007 through 2010 Camry models, 2010 Highlander, 2007 through 2010 Tundra and the 2008 through 2010 Sequoia. Toyota is being very cautious, which is the smart thing to do. Some vehicle owners have alleged that the sticking accelerator pedals have caused accidents, some fatal. So Toyota needs to do this to prevent any more accidents from happening. Sooner or later, Toyota will engineer a fix. And Toyota is handling it the right way. But doing damage control for its once bulletproof quality image will be much more difficult. Add in the big recalls that Toyota has had in recent years and its image as a quality leader is on the wane. That list, by the way, contains Toyota's two top sellers in the U.S. in the Camry and Corolla. Toyota sold 650,000 of the two models combined last year. That's a lot of customers who have a reason to question Toyota's cars. rss.businessweek.com |