GM will wind down Hummer as the sale could not be completed

I guess the good news is that gas prices should go down with Hummer out of the game, it's that whole supply and demand thing.... alright, it's not that funny....
As expected, GM announced today that the deal to sell Hummer to Tengzhong Heavy Industrial Machines Co., Ltd. (Tengzhong) was unable to be completed and as a result the American branf will be wound down.

After Pontiac and Saturn, another one bites the dust! But don’t worry… GM will still continue to honor Hummer warranties and provide service support and spare parts to Hummer owners.

“One year ago, General Motors announced that we were going to divest HUMMER, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward. We have since considered a number of possibilities for HUMMER along the way, and we are disappointed that the deal with Tengzhong could not be completed,” said John Smith GM vice president of corporate planning and alliances. “GM will now work closely with HUMMER employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”

Source;
http://www.4wheelsnews.com/gm-will-wind-down-hummer-as-the-sale-could-not-be-completed/

BusinessWeek: The Battle Raging Inside GM

Henderson's ouster leaves Whitacre and the board of mostly Detroit outsiders calling the shots. And that's making GM's executives jittery

By David Welch
The Dec.1 ouster of Frederick A. "Fritz" Henderson as General Motors' CEO was a surprise, but only in how fast it happened. Since GM emerged from bankruptcy in September, Chairman Edward Whitacre Jr. had become the de facto chief executive, and his board had reversed one of Henderson's biggest decisions. Now, as Whitacre looks for a new CEO (assuming he doesn't take the job himself), he and the directors are in the driver's seat. Whitacre and much of the board are industry outsiders. Now GM veterans are asking: Do they know what they're doing?

Dumping Henderson made tactical sense. He was a GM lifer and restructuring expert running a company that now needs a strategic visionary with expertise in reaching consumers. But firing and replacing him with Whitacre, at least on an interim basis, is risky. He will have to make big calls: how to fix the European business, burnish GM's brands, choose new vehicles, and build a management team. None of it will be easy for a former telecom guy who told employees on Dec.2 that he doesn't even know where his office is. "Now Whitacre is on the hot seat," says James N. Hall, principal of 2953 Analytics, a Detroit-area consulting firm. "He has to listen, trust the leadership team, and filter out GM's autoimmune system." (GM declined to comment.)

Nervous Executives
One of Whitacre's big challenges will be motivating a jittery staff. Right after Henderson's firing, Whitacre held a conference call with GM's top executives. Some asked if he wanted their resignations, too. Whitacre tried to assuage their concerns. "He was clear that we have good people," says an executive who was on the call. "He said: 'I can't do this without you.' "

But Whitacre's soothing words are cold comfort. He told Bloomberg News in mid-November that Henderson had the board's confidence. Two weeks later Henderson was gone. Several GM executives say the uncertainty is hurting morale. "It's almost like experience is a liability these days," one says.

Already, some top executives are getting antsy. Sources close to Vice-Chairman Robert A. Lutz say he is dismayed at Henderson's firing. The 77-year-old executive doesn't like how it was handled and has told people close to him he is not even sure what his role will be. If Lutz were to leave, GM would lose the one guy who has managed to bypass GM's sclerotic culture and build cars people will actually pay decent money for. "Is this the time to blow the whole thing up again?" wonders Joseph Phillippi, a veteran GM watcher and principal of Auto Trends, a New Jersey consulting firm.

While Whitacre looks for Henderson's replacement, GM's new hyper-independent board will be calling the shots. It's far from clear that the directors have made the right decisions so far. Particularly worrisome to GM veterans are the actions of private equity executives Steve Girsky, David Bonderman, and Daniel Akerson. All three were tough on Henderson in board meetings, say executives briefed on the discussions. They pushed Henderson to keep GM's German unit Opel rather than sell it. GM has long needed an independent board, but GM insiders fear that too much second-guessing could prevent the company from sticking to a clear strategy. (The three directors couldn't be reached for comment.)

The Opel Reversal
The decision to keep Opel was divisive. The board thought it too risky to cede control of GM's European engineering works, where the company designs its small and midsize cars. Plus, GM would lose up to 1.5million cars a year in sales. But holding on to the subsidiary is risky, too. Opel hasn't made money in a decade and is in the throes of restructuring. Finishing the job will cost GM some $3billion and divert executive focus from the troubled North American business and expanding operations in Asia and Latin America.

As Whitacre steers GM in the interim, he may learn a few lessons. He wants GM to push market share above 20% next year from 19.7% today. But as GM phases out Hummer, Pontiac, Saab, and Saturn, the carmaker will lose more buyers. What's more, Whitacre wants GM to expand market share with lower discounts. That's a prudent goal, but people don't rush to buy damaged brands for no reason. While GM's November sales fell just 1.5%, the company outspent its rivals on incentives by at least $1,000 a car, blowing $4,300 per vehicle, says Edmunds.com. If Whitacre pulls back too much on the discounts, sales could plummet.

As for Henderson's replacement, Whitacre and the board want a non-GM person or an industry outsider such as Alan Mulally, who left Boeing (BA) and has since managed to bring Ford Motor (F) back from the brink. But potential candidates will have to consider two facts of life: an activist chairman and board and a salary that GM's government minders have capped at $1million. "It's a sick company with a bad ownership structure and pay constraints," says Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. "I don't know who they will get." The only person willing to report to Ed Whitacre may wind up being—that's right—Ed Whitacre.

Welch is BusinessWeek's Detroit bureau chief.

Source;
http://www.businessweek.com/magazine/content/09_50/b4159000314215.htm?chan=autos_autos+--+lifestyle+subindex+page_top+stories

Honda on pace to become fourth largest automaker in U.S.

12/04/2009, 7:57 PM
By Mark Kleis

In a rough year for the ailing American automaker, the latest bad news comes in the form of an imminent bump from the fourth position for automotive sales in the US market. Toyota first bumped Chrysler from being part of the “Big Three” in 2006, but now it is Honda that is on pace to bump Chrysler down a spot.

So far this year Honda has sold 1.044 million vehicles in the US, compared to roughly 800,000 units by Chrysler.

There are no indicators or product changes from either company are likely to provide anything resembling a significant change in the lead in the remainder of this year.

By comparison, by this point last year Chrysler was still maintaining a year-to-date lead of 21,000 units over Honda, and finished strong with a 25,000 unit lead for the year. Analysts then predicted that Chrysler’s restructuring process would likely cost them their spot before the close of 2009.

Kathy Graham, a spokeswoman for Chrysler, said, “We are taking the steps that are necessary to have a good foundation and to build consumer confidence.”

Graham also said that Chrysler anticipates their recent increases in advertising spending will help restore higher sales volumes for the remainder of the year.

When asked about the significance of the change in ranking for the US market, executive vice president John Mendel for American Honda said they had no plans to celebrate or acknowledge the change.

Mendel said, “We only look at our sales and our objective. We may look at Civic and Corolla or Accord and Camry, but not at who ranks where.”

Source;
http://www.leftlanenews.com/honda-on-pace-to-become-fourth-largest-automaker-in-us.html

Inside Line Awesome Comparison Test: 2010 Camaro SS vs. 2009 Challenger SRT8 vs. 2010 Shelby GT500

Now this is a comparison test! Three amazing vehicles going head to head (to head)! I don't think you can go wrong with any of these cars.
Finding Finesse in Muscle
By Jason Kavanagh, Engineering Editor Email
Blog Date posted: 08-09-2009

Action movie sequels always have bigger explosions and a faster-moving plot than the original film. They also have evil-er villains and bigger budgets. Which gave us an idea...

In our recent pony car comparison test, the retro-heavy — and just plain heavy — 2010 Chevrolet Camaro SS walked away with top honors in its debut. The big V8-powered coupe needed a new challenge. It was time to refocus the lens. Shoot from a different angle, so to speak.

So we squared the brooding visage of our SS-badged protagonist up against the cruelest bunch of savages we could find, the range-topping 2009 Dodge Challenger SRT8 and 2010 Ford Shelby GT500.

If one villain is good, two is better. Just ask Michael Bay.

Bigger Budgets, Louder Booms
It's a run-what-you-brung grudge match of the biggest guns Detroit has to offer. Sticker price alone did not rule out any contenders this time around, but value still counts — the baddest in the land still has to be able to pass a basic accounting test. Our one stipulation is that each car must have a manual gearbox. This is a test of drivers' cars, after all.

At its core, the 2010 Chevrolet Camaro SS is a coupe version of GM's platform for its Thunder from Down Under, the Holden Commodore. The Commodore was the first example of this rear-wheel-drive platform with independent rear suspension that also begat the Pontiac G8 (pour a little out). Our Camaro SS tester is equipped with $2,600 in options, including the RS package, a power sunroof and an interior trim package, bringing its final tally to $36,825.

The roots of the 2009 Dodge Challenger SRT8 are just as twisted. Its chassis started life eons ago as a Mercedes E-Class, then it was dusted off by Chrysler during its ill-fated corporate liaison with Mercedes and turned into the numerous Charger and 300C variants, and then finally the platform was chopped slightly smaller for duty as the Challenger. The SRT8 treatment throws more engine cubes and a sport-tuned suspension at the Challenger and brings the base price up to $42,245 with destination and gas-guzzler tax. Its six-speed manual gearbox, navigation system and other options bring our SRT8 tester's grand total to $44,975.

Newly refreshed but looking quite familiar, the 2010 Ford Shelby GT500 draws heavily from the limited-production GT500KR from last year. The GT500's sticker starts at $48,175 including destination and gas-guzzler tax, and once you add the HID headlights and Electronics package of our tester, the total comes to a cool $50,895.

3rd Place: 2009 Dodge Challenger SRT8
Math can't do a burnout or scratch 2nd gear, but it can provide clues regarding the performance to expect from the Challenger SRT8. Each of the SRT8's 425 horsepower is saddled with 9.8 pounds, while the tamer R/T from the last test burdens each pony with 10.8 pounds. The nerds would suggest that the SRT8 should be about 10 percent quicker.

Or not. The SRT8 posts a 5.3-second run to 60 mph (5.0 seconds with 1 foot of rollout like on a drag strip) and trips a 13.6-second quarter-mile at 104 mph. These results best the R/T by a scant few tenths and less than 1 mph, suggesting that the SRT8 crew had aspects of performance beyond acceleration on their minds when crafting this über-est of all Challengers.

Early indications are promising. Braking the Dodge from 60 mph consumes 114 feet, exactly the same as the Chevy and longer than the GT500 by just 3 feet. Fade resistance is good, too, considering we're talking about 4,152 pounds of German-cum-American iron. Then the SRT8 posts a best-in-test 67.6-mph slalom run, suggesting that this Challenger will have no peer once we get away from the drag strip.

However, we found that its result between the cones doesn't translate into a superior experience on real-world roads. Its handling manners are very good, but the SRT8 communicates too little and isolates too much. Though more alert than the R/T, the deliberate, slightly under-damped ride motions still suggest that you're driving the car from a family-room recliner.

Among the biggest offenders are its sudsy brake pedal and overboosted, slow steering. With precious little information transmitted about the state of the front tires, your faith in their mechanical grip will be tested. You twirl in some steering lock expecting the nose to wither instantly into shuddering understeer, yet the SRT8 hangs on. It turns in responsively and corners flatly, clinging to the tarmac with more tenacity than you expect, even with prior knowledge that its ultimate grip on the skid pad is only 0.85g. The SRT8 gets it done, but this is a big, heavy car that drives even bigger and heavier than it is.

From the evocative styling to its easy-rider damping and syrupy driveline lash, the Challenger is best at stirring memories. Anyone who ever rolled a cigarette pack into his T-shirt sleeve will find it sensational even when parked.

None of the painstaking handiwork that crafted the nostalgic sheet metal found its way into the cabin, though. The pistol-grip shifter gleams like Excalibur plunged into a plinth of indifference, as the interior is a dark hole with little inspiration. Functionally, though, it is difficult to fault aside from the clunky multimedia interface.

You also have to roll down the windows to relish the period-perfect pitch of the 6.1-liter pushrod V8 at full whack, since the cocoonlike cabin does a comprehensive job of filtering out noise. Add in niceties like the telescoping wheel, hill-start assist function and automatic climate control, and the SRT8 proves a great cruiser.

So it turns out that even in SRT8 guise the Challenger still hasn't morphed into a racetrack refugee. Even so, the 2009 Dodge Challenger SRT8 is the most faithful re-creation of a 1960s muscle car yet devised in modern times, adding modern polish to the best bits of the past. It's just careful not to stray too far from the original formula.

2nd Place: 2010 Chevrolet Camaro SS
In the time since it topped our previous pony-car comparison test, we've courted the all-new 2010 Chevrolet Camaro SS on familiar roads and cozied it up with our usual testing venue. Call it a second date.

Our first impressions remain unchanged. The Camaro's tremendously stiff chassis allowed GM engineers to dial in the friendliest ride-handling trade-off here. Bumps don't pound it senseless, as the suspension's compliance absorbs even ruinous roads without flintiness or float.

And in the key muscle car measure of ass-hauling, it delivers. With a listless, flat roar from the 6.2-liter V8, 60 mph falls in 5 seconds flat (4.7 seconds with 1 foot of rollout like on a drag strip) and the quarter-mile drops in 13.1 seconds at 109.4 mph, beating out the pricier Challenger by a half-second. This trap speed is actually a hair lower than the last SS we tested and might improve with a few more miles on the clock.

At 3,894 pounds the Camaro SS is no scalpel, but coming from the Challenger, you're relieved at how wieldy and precise it is. The quick steering starts out light and loads up nicely, and its shifter thumps positively from gate to gate. Clutch action is easy and smooth.

The big coupe is deft and user-friendly, and you begin to think the Camaro has this comparison all locked up. As with any second date, though, we also found a few more things to bitch about.
Step up the pace to full kill in an attempt to gun down the fleeter GT500 and the Camaro's reflexes begin to falter. It's relatively nimble for its size and quite well-balanced, but in quick transitions there is an odd yaw delay from the chassis — a half-beat of time between the action at the helm and actual chassis motion. We noticed it in the slalom, too, where the Camaro ceded ground to the others with its 65.8-mph result. The source of the slack is not obvious. Our guesses include squishy powertrain mounts or tire sidewalls.

Throttle response from the LS3 V8 is heavily damped. When you apply the right pedal to make a hasty escape from a bend, your request for a heaping portion of the 426 hp is first carefully considered by a tribunal of lawyerly electrons. The ruling of this conference takes time to meter out, and the resulting pause dulls the Camaro's throttle-induced exuberance.

Those traits emerge only when you're pressing on, though. You'll have to live every day with the horrid visibility imparted by its high beltline and low roof. Ditto the busy gauges and the — optional, thank goodness — goofy orange-plastic cabin treatment. Equipment levels are leaner than either the SRT8 or the GT500, and the puny trunk opening is another unfortunate by-product of the Camaro's ambitious styling.

Points for furthering the cause of intergalactic cultural awareness go to GM for designing a steering wheel and shift knob that the Sleestaks from Land of the Lost will find comfortable to grasp. Humans? Not so much.

There's a lot to love about the 2010 Chevrolet Camaro SS. With the lowest as-tested price here, the Chevy's formidable performance and civilized chassis make it a tremendous value, and it put up a heck of a fight against the much more expensive GT500. Its platform has obvious potential for keener variants in the future. When that happens, the balance could once again tip in the Chevy's favor.

1st Place: 2010 Ford Shelby GT500
To those unfamiliar with the Shelby GT500 of the late '60s, the 2010 Ford Shelby GT500 is a bit much to take in at once. A full complement of stripes, outsized reptile badges, a full-width front splitter — that's not a chip on the GT500's shoulder, it's Chuck Norris.

Slink across the door sill's glowing crimson SVT logo into a stripe-splattered driver seat. You're in a Mustang, no doubt. The dual-cowl dashboard and seats are familiar, yet there's something oddly intriguing here. It's that among all this over-the-top nonsense lurks signs of serious intent. Maybe it's the gauges that are now actually legible, or the synthetic suede bits on the steering wheel and shifter boot.

Twist the key and the initial skepticism wanes as the supercharged 5.4-liter V8 gurgles away confidently. Throttle response is sharp, the clutch positive and the rich off-idle torque makes the Camaro and Challenger feel meek by comparison.

There's no finger-tipping the GT500's striped cueball-style shift knob. Gearchanges are positive and precise, with a high-effort notchiness that requires a manly yank. Although it's a pain in the palm around town, the shifter works brilliantly at speed. And it is at speed that the GT500 finally begins to reveal that it's not all bluster.

Forget that the GT500 sprints to 60 in 4.6 seconds (4.3 seconds with 1 foot of rollout like on a drag strip) and takes down the quarter-mile in 12.6 seconds at 113.5 mph, making it easily the most rapid car here. The accelerative might afforded by its 540 hp is only a peripheral component of the GT500's appeal.

Instead, it's the way Ford has made the slabular 3,901-pound GT500 willing to dance. The midpack 66.6-mph slalom result doesn't tell the whole story, nor does its test-topping 0.91g of grip on our skid pad. For that you need a real road or a track, and not the kind with sticky goo and a rack of lights.

Hustling the Shelby into a slightly off-camber 2nd-gear corner, hard on the brakes, the Shelby's nose dips but doesn't squirm laterally. At turn-in, the front end obeys with an assured confidence, if not quite the blazing reflexes of the Mustang GT with its lighter engine. Still, it has poise. The GT500's body motions are tied down with firmer suspension underpinnings than either the Camaro or the SRT8. The Shelby's well-weighted, responsive steering loads up predictably as you approach the apex and squeeze the throttle for the exit.

With a muted blower whine, the tail steps out progressively. It's easy to catch, and you can stand on the gas out of the corner in absolute confidence that the blue tinge of wheelspin will stay behind you. There are exaggerated ride motions at the rear induced by the live axle, yet the Shelby setup dispenses with much of the bump-sensitive loss of traction. This tail-out technique isn't the fastest way through a corner, but it's the most fun and the GT500 makes it so bloody easy. Besides, the SRT8 and SS are struggling to keep up.

The GT500's trump card is in its linearity. While the Camaro goes wayward beyond seven-tenths and the Challenger's talents are drizzled with apathy, the Shelby remains precise all the way up to — and past — the limit of the tires' adhesion. That it's sized right and you can actually see out of the thing only makes it easier to exploit its abilities. For a car of its mass, the GT500's control feel is astonishing and cements the conclusion that the GT500 is the most engaging car in our test.

Downers? The fuel filler neck dribbles fuel in hard driving and the firmly sprung live axle, while more capable than Messrs. Watts or Panhard ever could have predicted, pogos in a way that its independently suspended competition does not. That, and its near-$51K as-tested price is the highest in our comparison by more than $6 grand.

Modern Muscle in Its Highest FormTaking a markedly different tack than the Ford or Chevy, the Challenger SRT8 finds itself outgunned and overpriced. It is a throwback that is long on style and attitude but missing an important dimension of the driving experience that both the Mustang and the Camaro have in varying degrees. Although capable, it offers little dynamic thrill beyond the ability to turn heads. Modern muscle has moved on without the 2009 Dodge Challenger SRT8.

The amount of performance and ability Chevrolet has stuffed into the Camaro's fire-sale price tag is tremendous. Driven in anger, its handling is so benign that it is almost totally foolproof, yet it feels slightly inert. It is miles more alive than the Challenger, but the Camaro ultimately lacks the honesty — and killer instinct — of the GT500. If you can deal with the functional compromises forced by its styling and can't manage the scratch for the Shelby, you won't be disappointed by the 2010 Chevrolet Camaro SS.

One of the surprises of this test has been the evolution of the GT500 so comprehensively beyond its previous generation. GT500 owners receive exactly what they're paying extra for. More speed, more sound, more precision and best of all more personality. The 2010 Ford Shelby GT500 is a far more purposeful driver's car than either the Chevy or the Dodge, and doesn't ask for much in return. Yes, it's a $50,000 Mustang that is worth the price of admission.

The only question remaining is whether Detroit will facilitate a Part III.

Source (check out a ton of pic's and the video!);
http://www.edmunds.com/insideline/do/Drives/Comparos/articleId=154386?tid=edmunds.il.home.photopanel..1.*#2

Toyota, Honda, Ford the new Big Three?

Canada’s automotive landscape is poised for a historic realignment as Chrysler LLC and General Motors Corp. retrench and make way for three major rivals that will power the industry in the year ahead.

Chrysler is down but not out, facing a wrenching restructuring in bankruptcy court with new partner Fiat SpA that will see the automaker reborn with its most-prized assets if it can avoid liquidation. GM faces its own possible bankruptcy filing and will get radically smaller, employing barely 5,500 people in Canada by 2014 -- fewer workers than property insurer ING Canada or manufacturer Siemens AG.

But it’s the remaining three of the country’s five largest automakers that now face a monumental test as the industry teeters in crisis. Honda, Toyota and Ford all have to make sure they can keep building cars in Canada without a serious interruption that the mayhem at GM and Chrysler might cause. And they have to figure out how to maintain sales amid the economic dislocation in a market that should normally be hitting its stride.

"The buying season over the next four months is your most important part of the entire year. And we’re kind of blowing that off right now with all this bad news," said Bill Pochiluk, president of consultancy AutomotiveCompass in West Chester, Pennsylvania. "We’re not going to get any serious stability to the industry before fall."

The enormity of the challenge is not lost on Jerry Chenkin, executive vice-president of Honda Canada.

"There is no doubt the impact will be huge," Mr. Chenkin said about the events at Chrysler and GM. Honda’s top priority is to ensure the supply of auto parts to its assembly facility in Alliston, Ont. Workers there build Canada’s top-selling car, the Civic.

Roughly 59% of Chrysler’s suppliers also supply Honda and other Asian-based manufacturers and 54% also supply Ford, according to one estimate. For the last several weeks, Honda has been working to protect itself by making sure those parts companies are on solid footing and won’t cease operations if revenue from GM and Chrysler suddenly dries up. It is also making contingency plans. To date, Honda’s talks with suppliers have not included offering them direct financial support, Mr. Chenkin said.

Each car manufacturer can have hundreds of suppliers providing them with everything from crankshafts to clutches. The key is to make sure there is no break in the chain.
Even with the Canadian government’s move to boost protection for auto-supplier shipments by $700-million, a move designed specifically to stabilize the supplier base in the event of a GM and Chrysler bankruptcy, some parts makers could fall through the cracks.

Many suppliers are already staring down bankers unwilling to lend them any more money. With Chrysler shutting down for two months while it reorganizes under bankruptcy protection and GM idling various factories at different times over the next 12 weeks to cut inventory, lost income has pushed some to the edge.

Chrysler supplier Mark IV Industries of Amherst, N.Y. filed for creditor protection just after the automaker did. Other suppliers will follow.
"Production levels are [declining]," said Craig Fitzgerald, a financial consultant who advises car-parts companies at Plante & Moran in Southfield, Mich. "At some point for a supplier, even though you collect your receivables, you simply are bleeding cash. You don’t have enough revenue coming in and you go into liquidation. That is going to happen to a number of companies. The question is who does that happen to and how quickly can supply be reassigned?"

Honda built 58,000 vehicles in Canada in the first quarter this year while Toyota built 55,900 at its Ontario plants in Woodstock and Cambridge, according to Ward’s Automotive Reports. Both automakers outpaced GM, which built only 41,600 units.

It’s the same trend line on jobs. Honda employs 5,400 workers in Canada directly and Toyota employs 5,600. Both companies have added jobs over the years while their Detroit rivals are cutting workers in a bid to regain profitability.

Dennis DesRosiers, president of DesRosiers Automotive Consultants in Richmond Hill, Ont., has noted the perversity of Canadian governments plowing billions into GM and Chryler to help them shrink. "The groups killing jobs in Canada are rewarded and the group preserving and or creating jobs in Canada are punished. Someone has to explain the logic of this to me."

Don Walker, co-chief executive of supplier Magna International Inc. counters that the governments are protecting their future revenue streams by supporting the companies and suppliers, which pay billions in direct taxes the governments would otherwise lose. Jim Stanford, economist with the Canadian Auto Workers union, argues that the Japanese automakers have benefited from generous sectorial aid in their own right from the Japanese government.

Regardless, the sands are shifting in Canada’s automotive hierarchy.

GM has been the country’s top seller and the top builder for years, a dominant industrial force that at its peak in 2000 employed 20,000 people and pumped out nearly 1 million cars. Now that power is fading as new corporate champions emerge.

As it revamps its worldwide operations and balance sheet under the guidance of the U.S. Treasury, GM will retreat to one lone assembly plant in Oshawa, Ont. as well as another nearby that it shares with Suzuki. The company will terminate agreements with 300 of its 700 Canadian dealers and phase out its Pontiac brand. It will be a shadow of its former self.

Analysts say Chrysler, which produced 73,200 cars and trucks in the first three months of the year at its two Ontario assembly plants, will undergo a similar reckoning.

"It’s a major shift in the auto industry the likes of which we have not seen for a long, long time," said Doug Leighton, an auto historian at the University of Western Ontario’s Huron College. "[Honda and Toyota] are the new heavyweights in the auto industry. People will now buy Hondas and Toyotas the way they used to buy GMs and Chryslers and Fords because they’re seen as domestic."

Neither Honda nor Toyota is new to Canada. Both have been making vehicles here since the late 1980s. But analysts argue that a tipping point has taken place in the consumer psyche that may favour them and other international brands in the months ahead.

For the first time, Canadians bought more automobiles from Asian and European-based producers than from the Detroit carmakers last year -- a direct result of the perception that they build better quality vehicles that use less gasoline.

The events of the last week could add another dimension to that picture. The corporate overhauls announced by GM and Chrysler is now hitting home for many people.

Even a few months ago, there was still the expectation among buyers that GM and Chrysler will get through their financial hardship and things will be the same, said Richard Cooper, Canadian vice-president for market research firm J. D. Power & Associates. "But when you have a brand like Pontiac being taken off the table, when you have Chrysler actually filing for bankruptcy, those are the kind of signals that say to consumers "All the stuff that has been going on is very real.'"

Whether that will translate into more sales for Honda or anyone else is unclear. Consumers who have been loyal to North America’s home-grown manufacturers have not tended in the past to consider the cars of so-called import brands.

Still, that gate is creaking open.

Toyota, for one, has been able to maintain aggressive lease offers while the freeze in credit markets forced some rivals to pull out of leasing.

The company is making a deliberate effort to link its Canadian manufacturing footprint to the vehicles it sells here. Earlier this year it began offering zero percent financing for the first time in its history on Ontario-built Corolla, Matrix and RAV4 models.

"Everything that we have done in the marketplace has been geared to trying to encourage Canadians to buy our Canadian-made products," said Stephen Beatty, managing director of Toyota Canada Inc. "If we can drive up sales of those Canadian-made vehicles, then we ensure production levels at the Canadian plants and it feeds back into the supply network here. It’s an economic feedback loop."

The auto company in the trickiest position is Ford.

The maker of Canada’s top-selling truck has been deliberately trying to distance itself from its Detroit-based rivals.

It hasn’t asked for government aid. It insists its $24-billion in liquidity is enough to weather the storm. And in Canada, it has grown its market share for six straight months on the strength of vehicles like the Fusion compact and F-150 pickup.

Ford is now Canada’s second largest automaker by sales behind GM, and the gap on its larger rival is closing. It is rolling out seven new vehicles over the next six months and has snagged key Canadian managers from other firms.

The company has boosted its spring production forecast and said it has slowed its cash burn by cutting debt and labour costs.

On March 24, investors cheered its US$1.4-billion first quarter loss because they were expecting worse. Now the cheer is turning to fear.

According to consultancy IHS Global Insight, Ford may pick up 40% of any sales lost by GM and Chysler in bankruptcy protection. But the company may not avoid the effects of the supplier shakedown.

"We share President Obama’s hope that Chrysler’s bankruptcy will be controlled and quick, while we continue planning for all contingencies as a prudent business measure," Ford said in the aftermath of Chrysler’s creditor protection filing. "Our industry is highly interdependent, and the health of the supply base and dealer network is critical for all automakers."

Source;
http://www.canada.com/Cars/Toyota+Honda+Ford+Three/1561739/story.html