Ferrari, Lamborghini Supercars


Bloomberg’s Ryan Chilcote reports on Ferrari SpA’s new four-seat FF model, priced at 260,000 euros ($359,000), and Lamborghini SpA’s Aventador supercar, unveiled at the Geneva auto show. Maryam Nemazee also speaks on Bloomberg Television’s “The Pulse.”

Source: Bloomberg


The power behind the throne at General Motors

GM vice chairman Steve Girsky (right) with GM CEO Dan Akerson (left)

Unnoticed and reported in last month’s management changes at General Motors were two important direct reports that were assigned to vice chairman Steve Girsky. The new responsibility makes Girsky GM’s second most powerful executive and solidifies his unique position in the corporate hierarchy.

In January, CEO Dan Akerson named Girsky, 48, to oversee global purchasing and product planning. The appointments were announced internally, but GM (GM) failed to include them in its official news release and they have not been previously reported.

Girsky had plenty on his plate before he got the new responsibility. His official title was vice chairman, corporate strategy and business development. In that capacity, he is the only GM employee besides Akerson who sits on the board of directors.

Girsky also served as senior advisor to former CEO Ed Whitacre, and informally performs the same function for Akerson. By all accounts, they value his advice. Neither man had any auto industry experience before becoming CEO, whereas Girsky has been around the car business for 25 years as a securities analyst and investor.

Girsky is known for possessing one of the largest Rolodexes in the business and enjoys an unusually strong relationship with the United Auto Workers union; he was first appointed to the GM board as the representative of the union’s VEBA trust. He will be the company’s key strategist when contract talks begin later this year.

Besides all that, Girsky was a key driver behind GM’s IPO last fall and used his Wall Street contacts to lay the groundwork for the successful stock offering.

To round out his portfolio, Girsky is also in charge of GM’s OnStar business, where he changed top executives last month.

The responsibilities for purchasing and product planning came Girsky’s way when Tom Stephens was moved out of his global engineering job and replaced by Mary Barra, head of human resources.

Since Barra, 49, came up through manufacturing and had little experience with vehicle engineering, the purchasing and product planning pieces of Stephens’ job were assigned to Girsky.

From having 15 people serving under him a year ago, Girsky now oversees 6,700 employees in the giant purchasing operation, with its $80 billion budget and another couple of hundred in product planning.

Girsky has a mathematics degree from UCLA and a Harvard MBA. Scary smart and lightening quick, he vibrates with energy. He can be acerbic and blunt, but he possesses a disarming sense of humor and an infectious laugh. A longtime New Yorker, he recently donned a green Jets football jersey to make a point at a meeting of some 300 GM executives.

Girsksy was a candidate for CEO before Akerson took the job last September and could be again when Akerson steps down. But his family has remained in the New York suburbs while he commutes weekly to Detroit by commercial aircraft, and he has expressed reluctance to uproot his high-school age children and relocate them to Michigan.

By: Alex Taylor III (Fortune)

How Ford Survived the Economy

Why is Ford doing so well? Just yesterday, the New York Times reported that the car maker would pay bonuses of $5,000 and more to its hourly workers, “perhaps the largest in a decade,” according to the paper. Wasn’t the American car industry doomed just a year ago?

For Ford, the answer to the question of its success rests not just in its lineup of snazzy new cars. After all, the models we’re seeing today, from the Focus, now the brand’s dedicated electric platform, to the reinvented Taurus, were germinated around and during the dire days of the financial crisis and its aftermath in 2008.

And its success is not just because Ford Motor Co. (F, Fortune 500), alone among Detroit’s Big 3, didn’t take TARP money from the U.S. Government, or declare bankruptcy. Its success is not just because company made a daring move to mortgage all of its assets in 2006, including the blue oval, presciently giving itself a cash cushion at a time when cash would soon be in short supply.

No, it’s really the prelude to these last 4 years that positioned Ford correctly for its current run, stemming from the decision of a Ford family scion to give up the CEO job and let an automotive outsider run the show. In the course of interviews with employees up and down the ladder at Ford, the picture of success that emerges is one of dedicated employees making thoughtful decisions, allowing the company to finds its footing without relying on anything but its own people and principles to get there.

The chairman and the CEO

William “Bill” Clay Ford, Executive Chairman of the Board for Ford Motor Corporation, and former CEO, acknowledged that there may have been some gain from taking TARP money, “but nothing is forever, and people have short memories. So it is really up to [Ford] everyday to earn our respect. GM (GM) is a great competitor, and we know that. I like where we are positioned and I like that we have positioned ourselves to earn that respect.”

Ford executives say they are doing so well because of detail to product. But “detail to product” is, without context, just a management speak cliché. What the executives are trying to say is that they take ownership, individually and jointly, of the products their company makes, and that ownership sensibility starts with the chairman of the board, Bill Ford.

Bill Ford didn’t just hand over the reigns of the company to Alan Mulally, who he recruited from Boeing (BA, Fortune 500) after several competing auto industry executives turned down the CEO spot. As Executive Chairman, Ford is at work everyday, collaborating with Mulally on the direction of the company. “I talk to Alan many times a day, everyday. The way we like to work, our styles are very similar, we don’t have formal meetings, we bounce back and forth between each others’ offices. We don’t like to have any kind of scheduled meetings. We communicate on every big decision, and a lot of little ones too.”

Ford took a minute to be introspective about his relationship with Mulally, “It’s been a great relationship both personally and professionally. When you enter into something like this you certainly enter into it with a professional viewpoint, but anything that may develop after that is an unknown. One of the pleasant things that has happened to me is how much I’ve enjoyed being around him as a person.”

“The other thing is that it gives each of us someone to talk to. You may have heard the trite phrase, it’s lonely at the top, but it’s true. When you’re CEO you can’t let your hair down around almost anyone. You can’t admit to fears, or moments of weakness, or indecision, but he and I can have those discussions.”

Bill Ford is on the Board of eBay (EBAY, Fortune 500). Mulally is a member of Ford’s Board of Directors, but only Ford’s board. I asked Ford if it was mandated that Mulally was not allowed to be on any other Board. Ford said there was no such rule, and it was Mulally’s decision not to be on any other board.

Mulally told me he just was too busy, claiming, “you can come here on a Saturday or a Sunday. I’m working.”

Women at Ford

Mulally’s employees, like Michelle, can attest to that. On a recent weekend Michelle, a former Lockheed (LMT, Fortune 500) employee, was working at a Ford sponsored Race for the Cure for cancer event, and Mulally stopped by and talked to her. They talked about the race, about her working for Lockheed while he worked for Boeing. “It was great that he came out, and we both agreed we were happy to be at Ford.”

Michelle is an engineer for Ford. While reading some old SAE manuals, she figured out how to construct the new Ford Explorer windshield to decrease the noise it generated, “by half a zone.” (Engineering speak for, “its quieter.”)

Barb J. Samardzich, Vice President of Powertrain Engineering told me that 18% of engineers that graduate today are women. Things have changed for women in engineering: When Barb graduated only 5% of engineering degrees were awarded to women. Barb is now the highest ranked woman engineer at Ford, and Ford’s VP of Human Resources told me that 18% of Ford engineers, mirroring the graduation rate, are women, too.

Ford’s engineering prowess — and inventiveness

Female engineers quite literally bring a new perspective to the cars Ford makes. For example, Dawn Piechocki, Engineering Supervisor, wanted a way to get in the pickup bed of the F-series trucks she was helping to design. The convenient integrated tailgate step with assist bar was her answer, and it’s fast become a near-iconic symbol of Ford’s attention to detail among truck buyers.

The engineering going on at Ford isn’t just about conveniences though. Safety and innovation are paramount. A first on the Ford Explorer is curve control, a technology that slows a vehicle by ten miles per hour in one second if it detects the driver going around a curve recklessly. Todd Brown was the managing engineer for Ford’s Brake Stability Control group who invented it. One night while at a restaurant by himself, Brown started playing with physics equations to try to make Ford’s programming even better, leveraging the technology onboard the vehicle. On the back of a menu, Brown created curve control.

Dan Eisele then took over for Brown. Unlike software engineers whose work never leaves the computer screen, Eisele had to upload the software to a car and then drive it around Ford’s test track to see if it worked. Eighteen months later, curve control was added to the Explorer.

The Chief engineer for the 2011 Ford Explorer, Jim Holland, showed me the package of little tweaks that gave the refreshed SUV twelve percent better fuel economy than the 2005 model. Holland says that it couldn’t have been done without a collaborative effort between designers and engineers.

Financial independence allowed Ford to not lose ground during the economic crisis. A change in leadership allowed the company to make tough decisions, like selling off boutique brands like Jaguar and Volvo, in order to focus on improving its core products and getting the mass market to pay attention to Ford cars again.

But “detail to product” — the company-wide attention to detail that most helped Ford earn its strong market position today — says less about the products Ford makes, and more about the level of care among the people who make them. Ultimately then, the answer is that it’s people, employees at all levels of the company, that made Ford’s turnaround a reality.

Mercedes-Benz’s New SLK Roadster Has a Magic Roof

Here are photos of the third-generation Mercedes-Benz SLK Class. The newest thing about it? An optional “Magic  Sky Control” glass roof that switches from light to dark at the press of a button.

The Sky Control has two modes: In light mode the roof is transparent for maximum scenery viewing; when it’s darkened, the roof offers shade and protection from solar heat. (The standard version of the car comes with a roof painted in the vehicle color; a panorama roof with dark-tinted glass is also available.)

You can buy the 2012 Mercedes-Benz SLK with either a 4- or a 6-cylinder engine. The V6 has 302 horsepower and can go from 0-60 in 5.4 seconds (top speed 155 mph); the four-cylinder is slower (201 hp and 0-60 mph in 6.5 seconds) but more efficient (27 mpg combined versus the V6’s 23 mpg). A 6-speed manual transmission comes standard.

Pricing has not been announced for the vehicle, but expect it to cost near the $54,175 price-tag of the 2011 SLK350. The 2012 SLK-Class goes on sale in the U.S. this summer.


Toyota Plans Higher Output as VW Targets Top Spot

Toyota Motor Corp. plans to produce more vehicles without increasing capital investments as Volkswagen AG attempts to surpass it as the world’s largest carmaker by 2018.

“We are challenging ourselves to produce more even as we restrain capital spending,” President Akio Toyoda said yesterday at the North American International Auto Show in Detroit.

The carmaker plans to keep annual capital spending at about 700 billion yen ($8.46 billion) for at least the next five years, Executive Vice President Atsushi Niimi said Dec. 24. With more efficient processes, the Toyota City, Japan-based carmaker seeks to be as productive as when it spent more than twice that three years ago, he said.

“There have been companies that have gone belly-up for carrying excess capacity, but no company has gone bankrupt for not being able to produce,” Niimi said. “We now realize humbly that we shouldn’t make cars until we’re absolutely certain they will sell.”

Toyota is spending less on expanding capacity after the global financial crisis caused its first loss in almost six decades and problems tied to unintended acceleration prompted a year of record recalls. The company plans to invest 3.5 percent of revenue in new plant facilities this year ending in March, compared with 5.6 percent in the year ended March 2008.


From around 2003, Toyota’s pace of production growth was excessive as the company invested in new plants and facilities, Niimi said. “We’ve been admonished to never let this happen again,” he said.

Now, the company will shift focus to implementing leaner manufacturing methods, such as paint lines that are 25 percent shorter and engine production that is no costlier when output is half of earlier levels, Niimi said.

Shares in the automaker rose 0.1 percent to 3,460 yen as of the 11 a.m. trading break in Tokyo. The stock fell 17 percent in 2010.

Toyota said Dec. 21 it plans to increase global production 1 percent to 7.7 million units in 2011.

By limiting expansion, Toyota’s improved factory operating levels and lower depreciation costs will lead to higher earnings, said Edwin Merner, president of Tokyo-based Atlantis Investment Research Corp.

“Toyota is a very well-managed company,” he said. “You should see a very good improvement in profit margins.”

Volkswagen Spending

Volkswagen plans to spend 41.3 billion euros ($53.5 billion) in new property, plant and equipment in the next five years, $10 billion more than its Japanese rival. Wolfsburg, Germany-based Volkswagen’s capital spending will equal about 6 percent of sales during the period, according to the company.

“We want to make Volkswagen the world’s most future-proof automotive group,” Chief Executive Officer Martin Winterkorn said in November.

Volkswagen has a goal of surpassing Toyota in sales and profitability by 2018.

“Whether a certain company has the No. 1 volume position is not for us to decide,” Toyoda, the company’s president, said yesterday. “It’s up to the customer.”

Research Spending

Toyota isn’t restraining spending on research and development and will allocate 760 billion yen toward new models and technology for the fiscal year ending in March, Toyoda said.

That’s 4.7 percent higher than the 725.35 billion yen Toyota spent on research and development through March 2010, according to Bloomberg. The carmaker’s research and development spending budget peaked at 958.88 billion in the fiscal year ended March 2008.

While Toyota’s sales will recover in the U.S., the company will and should focus its expansion in emerging markets, Merner said.

Toyota will start building Corolla compacts at a new plant in Changchun, China, in the first half of 2012. The factory will build 100,000 Corollas a year.

In September, Toyota said it is spending $600 million on a third plant in Brazil. Production of 70,000 units a year of a new compact model will begin there in the second half of 2012.

The company also is investing $1.3 billion on a new plant in the U.S. to increase production of Corolla compacts. Toyota will begin installing assembly equipment at the facility in Blue Springs, Mississippi, with a goal of starting output by late 2011, the company said in June.

The Mississippi plant eventually may be used to produce the Prius, Toyoda said yesterday, without elaborating.

By Makiko Kitamura (Bloomberg)

Rolls-Royce and The Woman Who Was (Maybe) The Spirit of Ecstasy

On Feb. 6, the ultimate emblem of British automotive pride–Rolls-Royce’s Spirit of Ecstasy–will celebrate 100 years of existence.

Legend has it that sculptor Charles Sykes modeled the icon on Eleanor Thornton, a British beauty and secretary to Lord Montagu of Beaulieu, founder and editor of The Car Illustrated magazine. But no one knows for sure who the woman in the wings is–and Rolls’ stance on the matter is that “it is an interesting story and if it makes you happy, let the myth prevail.”

Here are the facts: Montague was an avid fan of motoring–he introduced King Edward to the sport, pressed for higher speed limits and was a close friend of Charles Rolls and Claude Johnson (they along with Henry Royce founded the company). He often featured Rolls-Royce cars in his publication, so it was no stretch for him to ask staff illustrator Sykes to commemorate the premier car for England’s automotive elite.

The Rolls-Royce board of directors at the time had publicly voiced its displeasure of the gauche hood ornaments (fat policemen, for instance) that currently sat atop its vehicles. So Montague told Sykes to fashion something that would embody “speed with silence, absence of vibration, the mysterious harnessing of great energy and a beautiful living organism of superb grace.” Sykes created the gilded woman he presented in 1911 (he had done several works in bronze beforehand); it became Rolls’ standard bonnet adornment in the 1920s.

The speculation in the story starts with Thornton. She was a minor actress and artists’ model when she was hired as Montagu’s secretary in 1902, but she had also been instrumental in the famous 1,000-mile car trial for the Motor Club of Great Britain in 1900. Many people believe Thornton and the older, married, higher-caste Montagu were lovers and that he told Sykes specifically or implicitly to use Thornton as his muse. Indeed, she worked closely with him for more than a decade, traveling extensively with him and bearing a daughter that she gave up for adoption during that time. Thornton was the inspiration for many of Sykes’s earlier drawings, paintings and bronzes–they were co-workers at Montagu’s magazine, after all–appearing on several covers and as Alice in a serialized spoof called “Alice in Motorland.”

A bronze statue that Sykes created for Montagu in 1911 is thought to symbolize the secret love and was used as the mascot for the baron’s personal car. Called “The Whisperer,” it showed a woman (widely agreed to be Thornton) in a thin flowing dress with one leg in the air and holding her finger to her lips. The similarities between The Whisperer and the Spirit of Ecstasy are unmistakable. (You can buy an enlarged version of the original here for $12,500.)

The tragic twist to the story is that Thornton died at sea in 1915 on a return trip from India–she and Montagu had traveled there together during WWI, and her ship, the SS Persia, was struck by a torpedo. Montagu survived.

Where does that leave us? To mark what Rolls calls its “year of celebration,” every Ghost and Phantom produced in Goodwood will bear a Spirit of Ecstasy inscribed with the words “Spirit of Ecstasy Centenary–2011″ at its base. On Feb. 6 the company will host a drive through central London consisting of 100 modern and historic Rolls-Royce cars. Other celebratory events are scheduled throughout the year.

As for Sykes, who died in 1950, he never spoke publicly about Thornton. And it’s quite possible that marketing-guru Johnson stoked the star-crossed-lover myth to bolster the allure of his brand.

But Johnson got at least one thing right–it makes a great story.


The Hottest Trucks Of 2011

The Ford F-150 SVT Raptor is one cool customer. The 4×4 pickup has a 6.2-liter V8 engine with 35-inch all-terrain tires and a screaming rear paint job that looks like it’s been shredded by talons.

But the Hennessey VelociRaptor 500 is way cooler. Made by Hennessey Performance in Sealy, Texas, the 810-horsepower twin-turbo rig gets double the power output of the standard-issue Raptor. It comes with aluminum pistons, steel conrods, dual intercoolers, an electronic boost controller, a high-end engine management system, stainless-steel exhaust pipes and a transmission rated for speed and off-road fun. (All of which make for a distinctively aggressive, attention-getting engine roar.) The VelociRaptor goes 0 to 60 in 5.6 seconds. Price: $72,000.

The Cadillac Escalade EXT and Toyota Tundra Sportsman Edition are two of the few trucks that can claim to be even near the same level as Hennessey’s creation. And they’re all on our list of the hottest trucks of 2011.

To compile the list, we spoke with analysts like Mike Caudill, president of Driven Media, and Jesse Toprak, vice president of industry trends and insights at, to get insight into what to expect from the truck segment next year. We also spoke with reps from several major automakers about their most exciting trucks.

On the sales front, trucks were strong last year, and they’re going to be stronger this year. Last month every major automaker besides Mazda reported a year-over-year increase in sales of light trucks (pickups, SUVs and minivans). The F-Series LINK alone is up nearly 30% for the year to date; Chevrolet’s Silverado is up more than 15%. Dodge Ram and GMC Sierra are up of 7% and 13.3% year to date, respectively.

“The truck industry hasn’t been in the tank at any point over the last few years,” Caudill says. “Trucks are strong. And that’s really going to continue.”

All told, trucks comprise 54% of the auto market. They are among the highest volume and highest-profit-per vehicle segments of any automotive category–and they are outselling cars by the highest margin in nearly five years, according to J.D. Power and Associates.

Big Rigs
One version of the bestselling GMC Sierra (the fourth-highest seller in the nation last month) makes our list this year. The GMC Sierra All Terrain HD, a concept vehicle that will debut at the North American International Auto Show this January in Detroit, has a diesel-powered V8 engine and gets 397 horsepower with 765 lb-ft. of torque. While GM maintains that it’s a concept-only vehicle, it’s easy to see how the Sierra variant could be an answer to the success of Ford’s Raptor and Dodge’s “Power Wagon” Rams, which dominate on the off-road market.

This particular Sierra has a wider, 73-inch track for greater stability, three additional inches of ground clearance, specially constructed Fox off-road shocks with remote fluid reservoirs, and 35-inch-tall BFGoodrich KM2 “mud terrain” tires mounted on 20-inch aluminum wheels. If a production version does come out in 2012, it’ll certainly grab some truck-fan buzz.

Another off-road winner is the Jeep Wrangler Black Ops Edition. This Jeep–built on a truck-chassis–is made as a special offering for fans of “Call of Duty: Black Ops,” the much-anticipated Activision videogame. (The game has already made more than $1 billion in worldwide sales since its launch Nov. 9, according to estimates released yesterday by Activision.) The Wrangler features heavily in the video game–the real-life version comes with a Rubicon trim and alloy wheels, 32-inch tires, Black Ops logos and a murdered-out exterior. It costs $30,625 for the two-door Wrangler or $33,500 for the four-door.

Efficiency Under the Hood
The real innovation in trucks these days isn’t as obvious as an all-black videogame Jeep. It comes in the form of creature comforts and efficiency. TrueCar’s Toprak says the super-efficient V6 engines in some of the Ford F-Series trucks are the prime examples of this–and the changes inside the truck, despite being less flashy than a total redesign, are paying off in sales.

“If you use a gas-efficient engine on a full-size truck, Ford can get those people who might be postponing a decision because the gas prices are too high and they can’t justify a purchase,” Toprak says. “If you tell them, ‘Hey this truck can actually save you money on gas,’ that might get them.”

Ford has also done well to improve the interior fit and finish of its trucks and to make standard many items previously considered luxury upgrades. Bluetooth capability, navigation systems, XM radio, heated seats, and remote-start, among other amenities, are turning vehicles like the Ford F-Series Platinum into luxury vehicles in their own right. They’re even being cross-shopped with SUVs.

Those efficiency and interior upgrades will be even more apparent in 2011 and 2012, Caudill says: “Trucks have come a long way. They’re only going to continue to get better. ”

By: Hannah Elliott

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