A sombre show for a stalling industry

No pyrotechnics, no stunts, no flash: Car makers running on fumes reduce their presence at annual New York event

JEREMY CATO

NEW YORK From Thursday's Globe and Mail

If the big auto shows take the measure of how the industry is weathering the economic storm, then the New York International Auto Show showed that some car companies have done a far better job than others at staying afloat by battening down the hatches, reefing the sails and putting the pumps to work to avoid a government bailout.

General Motors, for instance, reduced its presence to, as they say, "carpet and cars."

In past years, GM has used New York to tantalize the public with nifty concepts like the Beat mini-car that will eventually go into production as the Spark. But not this time around.

This time, the full complement of GM vehicles was there, but absolutely no flash. Word is that GM cut its auto show budget in half and it showed.

Bob Lutz, the retiring GM vice-chairman and product czar, loved to come to the New York show. Lutz always had a ready audience to talk up not just motors and sheet metal, but also the economics of the auto industry, global warming or any other topic.

But he was missing, too — just like the thick, raised glass flooring GM usually uses for its Cadillac display.

Thousands of journalists would traditionally descend on this show — all scrambling and sometimes literally climbing over one another to get a quote. But not this year: The media horde had thinned mightily, a victim of the current downsizing. If any business is in more trouble than the car industry, it's newspapers and television. So there were fewer reporters and commentators wandering the vast halls of the Javits centre.

As for Lutz, he won't officially retire until the end of the year, but as of April 1 he had become an "adviser." That means he's back at GM's Detroit headquarters with an office, an assistant and almost nothing to do except fill in his successor, draw his pay and enjoy what's left of the perks being stripped away by President Barack Obama's Treasury Department task force — the one combing through the company's restructuring plan.

Instead of Lutz, holding the GM flag was design chief Ed Welburn, a genial, but unfortunately — at least compared to Lutz — colourless career GM lifer.

And then there was vice-president Susan Docherty, the Canadian who appears to have the thankless job of overseeing the endgame for three possibly doomed GM brands: Pontiac, GMC and Buick.

Docherty, a 23-year GM veteran, said she and other corporate officers have sworn off sleep and are working non-stop to devise an acceptable plan for the government before the Treasury hangman arrives with the deadline six weeks off.

I admired Docherty's spunk, but like so many others I missed the 77-year-old Lutz. I thought about the end of his era — and perhaps an era in the auto game.

He's a bigger-than-life figure in a bigger-than-life industry. He certainly knows more than a thing or two about cars and car companies and what he says is always interesting.

But it is his penchant for wandering off into topics as diverse as global warming and politics that is legendary and utterly unusual for a car company boss.

Just as unusual, but for a different reason, was Chrysler president Jim Press. He's the former Toyota executive who is surely regretting his decision to leave the cozy confines of the world's biggest car company with its $50-billion (U.S.) cash war chest.

Chrysler is literally running on fumes and has been ordered by those Obama Treasury types to seek a union with Italy's Fiat or face extinction. As President Obama himself said curtly, Chrysler is not viable as a standalone company.

It was a little sad to see Press drive onstage in, of all things, not a Chrysler vehicle at all, but instead a tiny blue Fiat 500. Press, ever the gentleman and truly admired in the business, has always had a slightly sad look about him. It's an unfortunate effect at this particular juncture.

With two weeks to go before the Obama deadline of May 1, Press said Chrysler is progressing with its Fiat deal and the two companies are a good fit.

"Imagine the scope of our product line," he said, optimistically — hopefully? — referring to Fiat's line of small cars and Chrysler's truck-heavy portfolio of Rams and minivans. "We're going to go from viable to formidable."

Press said the Fiat deal is the company's "sole focus" right now. That had the unintended effect of undermining Chrysler's big product news at the auto show — the introduction of the 2011 Jeep Grand Cherokee.

That SUV won't hit showrooms for a year yet, but presenting it in New York was meant to convey the impression that Chrysler is still capable of developing new models, despite many, many reports to the contrary. The Fiat focus ensured that the plan did not entirely work.

Ford, meanwhile, did everything it could to convey a sense of confidence and optimism. Its corner of the Javits centre was thick with senior company executives, designers, engineers, marketing types and a small army of public relations officers ready. The latter were willing and able to make them all available to anyone with a notepad, audio recorder or video camera.

For reporters, the Ford stand was, as they say, a "target-rich" environment. That said, Ford has both a product and business story it wants to tell.

Nearly half of what you see in a Ford showroom today will be replaced by a new or significantly upgraded model before this time next year. Moreover, 70 per cent of its lineup is a recommended pick by Consumer Reports magazine and Ford has more Top Safety Picks by the U.S. Insurance Institute for Highway Safety than any other auto maker.

The new Taurus, the new Fusion, the new Transit Connect electric delivery van, the new Fiesta small car and others were all on display. The future at Ford is all tied into the new vehicles coming in the next 12 months and a lot of them were in New York.

Next door to Ford was the Mazda stand. Mazda used New York as a sort of coming-out party for its new president and CEO Takashi Yamanouchi, a 42-year veteran of the company. His speech included a brief rundown of his stints in corporate planning, retailing, marketing and human resources. "I have had an unusually diverse background for a chief executive at a Japanese car company," he said.

On the new product side, he mentioned the facelift being given to the CX-7 and CX-9 crossovers, along with a more fuel-efficient four-cylinder engine for the CX-7.

Mazda, he said, will introduce a refined lineup of gasoline engines that are as fuel-efficient as its diesels today — and the new diesels coming next year will be more fuel-efficient still.

Gas-electric hybrids and electric cars are also likely and possible from Mazda, but the company's first focus will be on squeezing out fuel economy gains from gasoline and diesel engines.

Then to the side, in a private interview, he dropped a bombshell, an exclusive for The Globe and Mail: The Mazda2, a slick little subcompact sold in Europe and Asia, is coming to Canada.

"I've just decided," Yamanouchi said.

He would not confirm a launch date, but it's likely to be within the year, if not sooner. The Mazda2 will likely be priced below $15,000 to start. As a versatile, stylish and fuel-efficient subcompact, it is a perfect fit for Canada.

The car is designed to compete against the Honda Fit, Toyota Yaris, Hyundai Accent and Chevrolet Aveo, among others. The Mazda2 is also the foundation for the Ford Fiesta already on sale in Europe and other markets. The Fiesta is due at a 2011 model.

Yamanouchi said Mazda has wrestled with the decision to add the subcompact to the Mazda Canada's lineup. The fear has been that Mazda3 buyers will opt for the less expensive but smaller Mazda2.

"There has been a lot of discussion about that," he said. "There is concern it would cannibalize Mazda3 sales. We need it to be incremental."

Yamanouchi was upbeat when discussing Mazda's overall health. After a wickedly difficult end to the 2008 fiscal year that wrapped up March 31, inventories have been slashed and operating profits have returned. He said with upbeat confidence that Mazda will be back in New York next year, a strong and profitable company.

Perhaps even more upbeat was Subaru Canada president and CEO Katsuhiro Yokoyama. But he has reason to feel sunny about the present and the future.

Subaru Canada's sales in 2008 defied the industry's downward trend by increasing to a record just short of 20,000 units. While insisting that "we must remain humble," he also suggested that an annual sales target of 25,000 vehicles is not unreasonable.

Leading the charge this year will be the new the 2010 Legacy sedan and Outback wagon. Finally, Subaru has a mid-size car big enough, well enough equipped and stylish enough to tackle rivals such as the Toyota Camry, Honda Accord, Ford Fusion, Nissan Altima and Chevrolet Malibu.

Unlike the current slightly undersized all-wheel-drive Legacy, the new Legacy and Outback have more backseat legroom, added cargo space, a stronger platform and a whack of features, from head-banging audio systems to Bluetooth connectively.

"Now we can compete, but first we must get on the shopping list," he said.

Subaru's Legacy unveiling at the show was, like others, fairly subdued. Bright lights, smoke, bold LED screens and loud music was kept to a minimum, a nod to the sobering times.

And that was the general way of things right through the show. Subaru, like so many others, eschewed ultra-expensive presentations. They all let the vehicles, the designs and the technology do most of the talking.

No one spent a nickel on pyrotechnics and jumped-up stunts — no cars fell from the ceiling, no sport-utilities came crashing through glass doors. Even the Jeep test track normally set up in the basement of the Javits centre — the one with all the dirt, rocks and logs — was nowhere to be found.

So the New York show reflected the times. We can expect more of the same at future international auto shows.

The fall Frankfurt auto show is being scaled back with big companies such as Nissan and Honda declining to participate at all. The Tokyo motor show in October also will be largely devoid of European and North American car companies.

Still, it is fair to ask if the car companies are making the right decision here. Auto show hype creates buzz and the buzz about new models and concept cars stirs a big pot of interest in buyers and potential buyers.

As I left the Javits, I had a sinking feeling that at least some of these car companies have already pulled the plug — that they don't see much of a future, so why waste time, effort and money making promises they can't possibly keep.

We'll see who's back at the New York show next year.

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