World automakers need to look to their teamwork<\/p>\n
DETROIT, Michigan (AFP): When John Devine joined the world's
\nlargest automaker as chief financial officer in December, he
\ncheerfully predicted that General Motors Corp. would be one of
\nthe few survivors in a consolidating industry.<\/p>\n
"I think we're seeing an enormous change in this automotive
\nbusiness around the world," said Devine, who spent all but one
\nyear of his 33-year career at GM rival Ford Motor Co., before
\njoining GM.<\/p>\n
"There's going to be an enormous separation, a sort-out of the
\nbusiness. At the end of that time, there's going to be a few
\nwinners and lots of losers."<\/p>\n
Over the past decade six super-groups have emerged as the
\ndominant players in the global auto industry, according to
\nMichael Robinet, director of global forecasting at CSM Worldwide
\nin Northville, Michigan.<\/p>\n
The Big Six -- US titans General Motors Corp., and Ford Motor
\nCo., Japan's Toyota Motor Corp, Germany's Volkswagen AG and
\nDaimlerChrysler AG, and France's Renault -- have buttressed their
\nposition by swallowing up smaller competitors and forging
\nstrategic alliances.<\/p>\n
The rest of the industry, Robinet says, can be divided among
\nloners -- such as Japan's Honda, Germany's BMW and Porsche, and
\nFrance's Peugeot-Citroen, which appear strong enough to retain
\ntheir independence -- and problem children, such as Korea's
\nailing Daewoo and Russia's Lada.<\/p>\n
While auto sales hit a 17.4 million-vehicle American record in
\nthe year 2000, sales and profits skidded so sharply toward the
\nend of the year that auto companies started slashing production
\nand have yet to stop.<\/p>\n
Automakers also are hitting the brakes on European production,
\nand analysts say the most lucrative, highest-volume consumer
\nmarkets on both continents and Asia have stopped growing.<\/p>\n
That means that to cut costs and continue growing, the strong
\nauto companies must continue eating the weak, either by gobbling
\nproblem children whole or nipping off the best pieces.<\/p>\n
Just as important as any further consolidation is the way in
\nwhich these operators manage their acquisitions and partnerships,
\nsay industry analysts.<\/p>\n
Ford has successfully maintained and even polished the
\ndistinctive images and products of its acquisitions while sharing
\nchassis, parts, engineering and production methods across
\ncontinents.<\/p>\n
"Ford in particular has done a great job with the automakers
\nthat it's acquired," said Greg Salchow, industry analyst with
\nRoney et Co. brokerage house in Detroit.<\/p>\n
"Being part of a large corporation, with its purchasing power
\nand engineering capabilities is really a good thing for a lot of
\nthese lower-volume, niche manufacturers."<\/p>\n
GM is slowly but surely sucking its Japanese and European
\nlines into its generic corporate blender.<\/p>\n
"GM just kind of lumps them all together," said Scott Upham,
\nanalyst with Providata Automotive in Ann Arbor, Michigan. "As a
\nwhole, GM tends to want to pull everything into its center."<\/p>\n
But DaimlerChrysler, industry analysts say, has kept the
\nChrysler Group entirely separate from Mercedes-Benz, ignoring
\nopportunities to share engineering, best-practice production
\ntechniques or parts the consumer does not see.<\/p>\n
Ford has "bit the bullet, changed some of its production
\nsystems, doing a relatively good job of platform-sharing,"
\nRobinet said. "Ford is going to weather this downturn better than
\nGM and (Daimler)Chrysler."<\/p>",
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