Mississippi officials, who late last year scored a major coup in landing investment fromMotor Co. Ltd. in the form of a new truck assembly plant, say they may not be done yet.
Development authority insiders tell Ward's they have been approached by another company — through a third party — about a possible sizable investment in their state. Officials don't know any details or the name of the company, but they say that the scope of the investment being talked about points to a vehicle assembly plant.
Regardless of whether Mississippi lands that project, considerable additional automotive investment is on tap for the state. Development authorities say they've already been contacted by some 22 parts suppliers — including about a dozen Tier 1s — looking to set up operations to service the newplant. Three or four of the Tier 1 suppliers will be located adjacent to the assembly plant.
Nissan's assembly plant in Smyrna, TN, has drawn some 132 suppliers to the state since 1981, and Mississippi officials ultimately expect a similar scenario in their state.
The Nissan plant is expected to employ 4,000 workers, and studies suggest the spin-off could lead to the creation of six to seven times that number of jobs at related suppliers.
Mississippi, which kicked in an incentive package worth $295 million to land the Nissan plant, is confident the investment will pay off. Conservative estimates suggest the plant will generate $640 million in tax revenues and $260 million in special funds over the next 20 years, says a state official.
GM Plans to Drop Yukon
In an effort to strengthen GMC's brand image and differentiate it from Chevrolet trucks,Corp. brand management has decided to cease production of two versions of fullsize sport/utility vehicles (SUVs) for GMC by dropping the Yukon brand and relying solely on the Yukon Denali marque, sources tell Ward's.
Yukon's demise could come as early as next year and probably no later than 2004, sources say.
Yukon Denali was introduced in early 1998 as an upscale version of the Yukon when GMC was annointed GM's luxury truck brand. When Cadillac introduced the Escalade SUV, GMC assumed a “professional grade” status for customers who want premium products. Offering anything less than the opulent Yukon Denali doesn't maintain that image. An identical fate likely awaits Yukon XL (formerly Suburban), because the automaker introduced Yukon XL Denali in 2000, though sources can't confirm that scenario.
A Pontiac-GMC spokesman refused to verify Yukon's demise. “We'll let the marketplace tell us,” says the spokesman, noting that the all-new Yukon Denali has been on sale for less than a year. “Basically, stay tuned. At this point, it's just too early.”
Yukon was introduced in 1992 as a replacement for the fullsize V-Jimmy and received a complete overhaul in 1999 when it was moved onto the GMT800 platform. Yukon/Yukon Denali combined sales totaled 56,297 in 2000, up 5.7% from 1999's 53,280.
Employees Don't Know Jac
Just when you think you know a guy, he throws you a curve ball. John Cougar did it. Prince did it. And Cassius Clay did it. When you reach the top of your game, apparently it's a good thing to change your name. Likewise,Motor Co. President and Chief Executive Officer Jacques A. Nasser has reached the point in his career where he can demand a degree of decorum.
Mr. Nasser isn't changing his name, but he prefers that the abbreviated “Jac” be ditched in favor of the more formal “Jacques” in internal company memos, according to The Detroit News. Press releases will refer to Mr. Nasser as “Jacques” instead of “Jac.”
The Lebanese-born Australian told a crowd in Chicago that he began using the shortened “Jac” as a young man because his formal name often was mispronounced, the News reports. It's hard to imagine anyone in the Glass House stumbling over the CEO's name.
In contrast, G. Richard Wagoner ofCorp. is fine with “Rick” on company memos and press releases, and former Ford Chairman Alexander J. Trotman insisted on being called “Alex.”
It appears the “Jacques” edict applies more to written communication than verbal. In other words, Ford employees aren't enrolling in French language classes so they can correctly pronounce his first name with the proper sexy, European flair.
Perhaps employees, if they have the occasion to actually meet the big boss face to face, will opt for the safest and most respectful greeting: “Hello, Mr. Nasser.”
To which, the witty and affable Mr. Nasser would respond, “Oh, please, just call me Jacques.” And then he'll shake your hand, and you'll start talking about the weather and then end up at the corner pub sharing a brew.
It could happen.
MG Testing Waters in U.S.
Will MG, the famous British roadster, make a comeback in the U.S. market after a 20-year hiatus? Well, that depends on who's talking. Chapman-Arup design/engineering group of Soloihull, England, developed the MGF sports car, and an official hints that MG is eyeing a return to America. They circulated a questionnaire at the Society of Automotive Engineers World Congress, where an MGF was displayed, to test the waters. The price range would probably be $25,000, somewhere in the vicinity of's popular Miata, an unabashed British roadster pretender with which the MGF shares a resemblance. Mazda sold more than 18,000 Miatas last year.
Still, in a formal statement MG Rover says its five-year business plan “assumes no planned sales in the U.S. market.” Industry analysts say MG needs to be stronger in Europe before it can think about the U.S.
MG Rover, the British-owned survivor ofAG's retreat from the U.K., sold 205,000 cars in 2000, including 25,000 with an MG marque. It plans an average 200,000 sales between now and 2006. The company builds four Rover models and five MG models.
Powered by a 195-hp 4-cyl. engine, the MGF weighs just 1,450 lbs. (631.6 kg), helped in part by a lightweight aluminum frame. Some 350 were built during a limited production run.
SAE Spearheads ‘Driver Distraction’ Research
Nobody questions whether a plethora of new-age electronic features is going to be available to drivers. No, the billion-dollar (actually, $8 billion by 2005) question surrounding the coming wave of so-called “telematics” devices has migrated to: “how much” of them is too much?
At SAE 2001 a panel addressing “Driver Focus” discussed how the industry will deal with the wide range of coming electronic features that will be available to drivers.
Speakers includedAutomotive Systems' Andrew Brown Jr., director of engineering, who admits there is broad industry concern about how to ensure that the suppliers developing these features do not get so carried away in a features “arms race” that the effect on drivers' ability to pilot the vehicle is ignored.
The industry is studying how these devices impact the act of attentive driving, and engineers and suppliers are studying how to design telematics features to mitigate their influence on the task of driving.
A high priority is to create better interfaces between the driver and the devices, and suppliers are working to create head-up displays (HUDs), voice-recognition systems and text-to-speech software that will first and foremost, says Mr. Brown, allow drivers to “keep their eyes on the road and their hands on the wheel.”
Delta Delay Alters LGR Sourcing
A temporary delay in construction of the Delta Township, MI, assembly and stamping complex will force General Motors Corp.'s Lansing, MI, Grand River (LGR) plant to source stampings for the Cadillac CTS (Catera replacement) from another location when the sedan is launched in late 2001, sources say.
A GM official says this will not affect the production schedule.
A stamping plant located at the Delta Township site originally was scheduled to supply LGR from the get-go. But construction of the Delta facility has been halted for up to four months because the automaker reportedly has decided not to make Epsilon platform-based vehicles there, as was widely speculated. Instead, GM wants Delta to build products off of its Lambda architecture, reports say.
GM is keeping a tight lid on Lambda. Sources indicate the platform will be a front-wheel-drive/all-wheel-drive configuration. Possible Lambda products are the next-generation minivans and Pontiac Aztek/Buick Rendezvous, currently made in Doraville, GA, and Ramos Arizpe, Mexico, respectively. Delta Township could be assigned other Lambda products, which sources say includes crossovers/small vans. Interestingly, a chief engineer for fullsize vans at GM moved to the Lambda program in the second half of 2000. The Delta plant is expected to be completed sometime in 2002.
Undervalued for a Reason
Intangibles denote value on Wall Street and the automotive sector — and suppliers in particular — are paying the price for not focusing on them.
“You are what you measure,” says Russell Hensley of Arthur Andersen, which surveyed 34 suppliers to determine their relative ability to create value. The survey found the auto industry manages physical and financial assets well, but more than half of the companies leverage customer assets poorly, and more than 40% leverage organizational assets poorly. More alarming is that 60% fail to leverage employee and supplier assets adequately, which Mr. Hensley describes as “scary” given they are the engines behind a company's future.
The auto industry focuses on units sold instead of customer relationships, chairs as opposed to the skills of the people in them. Suppliers are slow to adopt information technology or use the customer and warranty information it gathers so well. The industry also is quick to drop relationships in a shortsighted bid to bolster the bottom line.
The survey suggests it is less risky to invest in intangibles today. Winning companies will focus on their core competencies and spin off the rest, while driving brand awareness and leveraging their own intellectual property, says Mr. Hensley.
GM's Saturn Gives Up in Japan
General Motors Corp. created Saturn to compete against Japanese models here in the U.S., but was unable to fight them on their home turf. After three years of poor sales, GM is pulling the plug on the brand, announcing it will stop selling Saturn coupes and sedans in Japan after this year and push Chevrolet models.
Despite making large investments in the market, GM only sold 4,300 Saturns since they first went on sale there in April 1997, compared to 2.2 million North American sales since 1990. Of the 22 Japanese Saturn dealers, 11 have joined GM's AutoWorld dealerships, begun last October in Japan.
There are 21 AutoWorld dealerships in Japan that sell Chevrolet,and vehicles. A GM official says Saturn will now focus on the U.S. market.