TPT July 2011

G lobal M arketplace short on prestige. In his view, overcoming that is a top task for both auto makers. (“Ford, GM Lack Prestige in Crucial European Market,” 3 April) Executives of the two American car companies acknowledge their European image problem. Recently, Ford’s sales and profits in the US have improved substantially, thanks to appealing new features and what Mr Phelan termed “startlingly good scores” in quality reports. The next step is to replicate that performance across the Atlantic. Jim Farley, Ford’s global sales and marketing chief, told Mr Phelan, “That’s my main priority now.” Mr Farley, who led Toyota’s European growth strategy in the 1990s, said he looks to new technologies like automatic parking, road-sign recognition, and Sync (enabling cell phones and MP3 players to connect to the car with the touch of a button), to commend Ford models to European buyers. For his part, Alain Visser, sales and marketing chief at Opel, GM’s main European brand, said, “The reality of our products is better than the public perception.” Just how do Opel and Ford go about convincing Europeans to reconsider their classier latter-day offerings? Marc Beckers, a former GM executive and managing partner of Experts 4 U, a Brussels- based consulting firm, indicates that they will be doing battle with ghosts. “In the past, both companies built vehicles that were not up to European par,” Mr Beckers told the Free Press . “That’s no longer true. Today they both have their best lineups ever. They’re clearly competitive. It’s purely a brand issue. Customers have the lingering view that their vehicles are not among the leaders. That means people do not aspire to owning them.” › Mark Phelan pointed out that GM and Ford have built cars in Europe for more than a hundred years. They employ tens of thousands of workers and build more than three million cars a year there. Yet Europe was GM’s only unprofitable global region in 2010, handing the company a $1.8bn operating loss. If the Detroit giant breaks even in Europe this year, as it hopes to do, it will break an 11-year European streak in the red. Ford unexpectedly lost money in Europe in the fourth quarter of last year. It made only a small ($182mn) profit on European operations for all of 2010, when it posted a companywide profit of $6.6bn. According to the Detroit-based Mr Phelan, to the European sensibility Ford is bland and generic; Opel is the gang that can’t shoot straight. He wrote, “Regardless of how good their vehicles, design, and technology are – and some are very good indeed – Ford of Europe and GM’s Opel will struggle to sell cars and make money until they change perceptions.” Elsewhere in automotive . . . › Daimler, the German maker of Mercedes cars and Freightliner trucks, said that its $1.75bn first-quarter profit was nearly double that in the first quarter of 2010 as sales in China continued to show big gains and the market for heavy trucks picked up. Like rivals BMW and the Audi division of Volkswagen, Daimler’s Mercedes car division is profiting from the enthusiasm for luxury cars among

Chinese buyers. Unit sales in China rose 82% to almost 50,000 vehicles in the quarter, the company said. Daimler, based in Stuttgart, is an example of the success of Germany’s export economy, which has driven unemployment to a nearly 20-year low of 7.1%. The company said on 29 April that it had added almost 2,700 employees in Germany since the end of March 2010, bringing the total inside the country to 164,000. › The Italian auto maker Fiat said on 21 April that it would spend $1.3bn to raise its stake in Chrysler Group, of the US, to 46%. The Turin-based company, which earlier in the month had increased its stake to 30%, was exercising its right to acquire the additional 16% once Chrysler paid off the roughly $7bn it owes the American and Canadian governments. As reported in the New York Times , Sergio Marchionne, the chief executive of both companies, said in a conference call with analysts that Fiat expects to obtain an additional 5% of Chrysler this year, raising its total to 51% and giving it “effective legal control.” Fiat gained management control of Chrysler in 2009, when a deal with the Obama administration gave it a 20% stake in the foundering US company in exchange for technology and financial aid. Steel › Reporting from the SteelOrbis/IREPAS 2011 conference in Hong Kong for Platts , the provider of global energy and metals information, Annalisa Jeffries quoted an executive of a Turkish steel maker as saying that local demand for steel billet in Turkey, Russia and Ukraine is limiting its availability for export from the Black Sea region. Relaying information from a billet suppliers’ committee meeting at the conference, Ugur Dalbeler of the steel producer Colakoglu Metalurjl said on 12 April that Ukrainian billet supplies had dropped from 550,000 to 450,000 metric tons per month, with a similar drop recorded in Russia. Yusuf Guven, with Helveco Intertrade, reported from the raw materials committee meeting that Russian scrap supplies had also gone down. › Ford Motor Co has urged the US International Trade Commission to lift antidumping duties on hot-rolled steel from Brazil, Japan and Russia. The agency imposed the tariffs in 1999 and renewed them in 2005. As reported by the Detroit News , Paul Vandevert, international trade counsel for Ford, said the company’s partnership with US steel producers is critical to its future. He told an ITC panel in Washington (7 April), “If we are going to succeed, our suppliers, including our steel suppliers, must provide us with the best in materials and parts.” Other metals . . . › Brazil’s installed aluminium capacity has dropped 10% since 2005 due to the high cost of electric power in the country. As a result, according to the trade group Associação Brasileira do Alumínio, primary aluminium production fell 4.8% to 234,100 tons in January and February compared with the same two-month period of 2010. Companies operating in other energy-intensive sectors are shutting down, according to ABAL’s energy coordinator, Eduardo Spalding.

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