Monday, April 16, 2012
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Summer gas prices set to rise 6.3 percent over 2011 By Nancy Rivera Brooks Los Angeles Times
LOS ANGELES—Although gas prices have been easing lately, the Energy Department has predicted that U.S. motorists will be shelling out an average of 24 cents a gallon more for gasoline during the peak summer driving season, defined as April through September. Peak prices will average $3.95 for a gallon of regular gasoline, up 6.3 percent, or 24 cents, from last year’s April-Septem-
ber driving season, according to the agency’s monthly Short-Term Energy Outlook. That represents an increase from last month’s peak season prediction of a $3.295 average. The highest monthly average is expected to be $4.01 in May, the agency said, putting the chance of a $4 average in June at 40 percent. Gasoline prices will vary widely by region, with the West Coast leading the way at an average of $4.20 for the peak season.
The highest monthly average is expected to be $4.01 in May, the agency said, putting the chance of a $4 average in June at 40 percent. Gasoline prices have been rising primarily because crude oil prices are up, but refinery closures in the Northeast are contributing, the Energy Department said. All of this pump-price pain is expected to reduce
gasoline consumption by 0.5 percent this summer compared with last summer, according to the forecast. For the year, gasoline is projected to average $3.87 a gallon, implying an average annual household expenditure of $3,410, up $250 from
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my recovers. U.S. retail gasoline prices continue to slide, losing nearly 3 cents in the past week to a national average of $3.91 per gallon, according to AAA, Wright Express and the Oil Price Information Service. While the relentless rise in pump prices has paused, forecasters — including those at the Energy Information Administration — said the average for gasoline could still top the $4 mark over the next several weeks.
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2011, the Energy Department said. Oil prices have been trending upward on fresh signs of a strengthening economy. Analysts point to signs of strength in China, the world’s second-largest economy, where the central bank reported a surprising jump in new loans. U.S. businesses also have sold more goods abroad, pushing exports to an all-time high. And the Fed has said it will keep interest rates low into 2014 as the econo-
Page 2 / Monday, April 16, 2012
Tallahassee Democrat / OnTheMOve
Car design hinders use of child safety seats, report says By Jerry Hirsch Los Angeles Times
Romain BlanquaRt/DetRoit FRee PRess/mCt
The Lincoln MKZ concept is unveiled Jan. 10 at the North American International Auto Show at Cobo Center in Detroit.
Reinvention under way for MKZ By Alisa Priddle Detroit Free Press
DETROIT — The new 2013 Lincoln MKZ will have a variety of engine choices, including at least one hybrid. The car will launch initially with just EcoBoost gasoline engines, said Ford CEO Alan Mulally. But “there will be a hybrid in the family,” said Chief Financial Officer Lewis Booth. With the same pains Ford took to make sure the Lincoln midsize sedan looks different from the new Ford Fusion midsize car, the automaker promises the cars will be different under the hood as well. “The reinvention is under way,” Jim Farley, global head of sales and marketing, said at the recent global debut of a concept that is based on the production model that will go on sale this fall. Because the design of the production model was fin-
ished before the concept was finalized, little imagination is needed to envision what the final product will look like. Door handles must be added, the side mirrors will be larger and the production MKZ will be a five-seater whereas the concept has only four seats. The MKZ could share some 4-cylinder EcoBoost engines with the Fusion but they can be calibrated to change everything from noise control to the suspension system and electronic throttle control, said Scott Tobin, vehicle line director. But the vision is for optional engines with unique displacements. While the Fusion will be sold with a choice of three gasoline engines, a hybrid and a plug-on hybrid, the MKZ will only have gasoline and a single hybrid option. But if there is a demand for a Lincoln plug-in, the auto-
maker could do it, said Scott Tobin, vehicle line director. The MKZ is also expected to have an 8-speed automatic transmission, continuously controlled damping to adjust the suspension to the drive and a host of other new technologies. Farley would not say if Ford will continue the practice of offering a Lincoln hybrid for the same price as the gasoline version but said that current practice is proving very successful. “The MKZ is the flag bearer from a volume and image standpoint,” said Michael Robinet, managing director of IHS Automotive Consulting in Northville, Mich. Cadillac also started its current renaissance with the midsize CTS. “You start at the core of the market and expand out,” Robinet said Lincoln’s resurgence starts with the high-volume MKZ and will end with the MKS
full-size sedan which just received a freshening to tide it over for a couple years. Mulally said the company is planning a full marketing push for Lincoln to promote the MKZ as the volume leader for the brand going forward. “It will pull everyone into the family.” Ford has promised seven new or significantly updated vehicles for Lincoln by 2014. After a series of bland designs for Lincoln, the new MKZ “is so striking it will cause people to aspire to own a Lincoln again,” said Dave Sullivan, product analyst with AutoPacific in Ann Arbor, Mich. “We spent time working on the vehicle to get it right,” said C.J. O’Donnell, head of Lincoln marketing and the first member of the Lincoln team created in 2010. “The first steps for Lincoln have to be exactly right,” he said.
LOS ANGELES — Child safety seats are difficult to properly install in cars, according to an insurance industry research group, because of the design of most passenger seats. Joint research conducted by the Insurance Institute for Highway Safety and the University of Michigan Transportation Research Institute found that just 21 of 98 top-selling 2010 and 2011 model year vehicles have seat designs that are easy to use with child restraints. The low percentage was notable, considering that the auto industry is using a system called Lower Anchors and Tethers for Children, or LATCH, that was intended to make it easier to install the safety seats. The problem, according to the insurance trade group, is that the manufacturers haven’t paid enough attention to how the LATCH system works when designing passenger seats. “Insta lli ng a chi ld restraint isn’t always as simple as a couple of clicks and you’re done,” said Anne McCartt, the insurance institute’s senior vice president for research and one of the report’s authors. “Sometimes parents blame themselves when they struggle with LATCH, but oftentimes the problem lies with the vehicle, not the user.” The vehicles were tested by 36 volunteers, each of whom was asked to install three styles of child restraints in three vehicles. All the participants use child seats in their own vehicles. If they had questions about how to install the seats, they
“Installing a child restraint isn’t always as simple as a couple of clicks and you’re done.” Anne MccArtt senior vice president for research, Insurance Institute for Highway Safety
could consult owners’ manuals but received no other assistance. Only 13 percent of the volunteers installed seats with lower anchors and top tethers to get a tight, secure fit at the right angle, according to the insurance group. The researchers found that the lower anchors used to attach the restraint systems were often set too deep in the seats to be easily accessible. Lower anchors — metal tabs that are used to secure the child seat to the vehicle — were visible in 36 of the 98 study vehicles. Researchers also found that seat belt buckles, bolstering and other upholstery features hindered proper securing of the restraint system. Finally, the designs of the passenger seats sometimes required those installing the restraints to make too big an effort — judged as using more than 40 pounds of force — to properly attach child seat hardware to the lower anchors. “These are things that automakers can do to improve child restraint installations, and most of them aren’t hard,” McCartt said. “Lower anchors can be designed so they are easy to use.”
Monday, April 16, 2012 / Page 3
OnTheMOve / Tallahassee Democrat
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Page 4 / Monday, April 16, 2012
Tallahassee Democrat / OnTheMOve
Nissan to woo more US car buyers By Dee-Ann Durbin The Associated Press
DETROIT — Mention Nissan to most car drivers and they think of the Altima. And not much else. The sedan is America’s second-best selling car and Nissan’s top seller by far. When the new version goes on sale in July, it will likely be a hit. But Nissan’s other models — such as the Sentra small car and the boxy Cube — are struggling to win buyers, even as auto sales surge. They’re old, inefficient, or just plain odd. And their designs are inconsistent, which keeps customers from sticking with the brand when they move up or down a car size. That’s making it hard for Nissan to hang on to customers or woo new ones in the U.S. Nissan is hoping to win over U.S. buyers with some new models in key segments. In addition to the Altima, Nissan will roll out new versions of the Versa hatchback, Sentra, and Pathfinder and Rogue SUVs over the next 15 months. The company promises more emphasis on fuel economy, more luxurious interiors, handsome and consistent styling and updated dashboard technology. The new Pathfinder, for example, will be lighter and nimbler, which will improve fuel economy and make it a smoother ride. The new vehicles should help Nissan step out of the shadow of its Japanese competitors, Toyota and Honda, who have outsold Nissan in the U.S. nearly every year since the late 1980s. Toyota’s Camry, the best-selling car in the U.S., bested the Altima by 40,000 vehicles last year, and Toyota commanded a 14 percent share of the U.S. market in the first three months of this year compared with 9 percent for Nissan. Nissan outsold Honda by 2,000 cars in that time, but to do that it
Kathleen GalliGan/Detroit Free Press/MCt
Nissan displays the Nissan Pathfinder concept at the North American International Auto Show on Jan. 10 at Cobo Center in Detroit, Michigan. resorted to some of its worst habits, including high incentive spending and low-profit sales to rental fleets. Nissan lost U.S. customers in the 1990s, when it was faltering financially and producing bland cars. CEO Carlos Ghosn brought the company back to profitability in the early 2000s, after joining forces with French carmaker Renault S.A. in 1999 and embarking on a multiyear restructuring. Ghosn’s feat is so celebrated in Japan that he is the hero of a comic book series there. The profits have let Nissan invest in innovative products like the Nissan Leaf, which was the first all-electric car sold in the U.S., and the Murano CrossCabriolet, which is the only convertible
SUV on the market.
US part of the plan
But Ghosn wants more. He says Nissan’s improved quality and broad lineup justifies a 10-percent share of the U.S. market. That would require Nissan to sell up to 400,000 more cars and trucks than the 1 million it sold last year. Increasing U.S. sales is part of Ghosn’s plan to command 8 percent of worldwide market share by 2016, up from 6 percent in 2011. The current leader, General Motors Co., holds an 11.9 percent share. More marketing will help. One of the highest-profile efforts will be the opening next month of a seven-story Nissan and Infiniti dealership in San Francisco, which
was designed as a regional hub for people interested in the Leaf and future electric cars. The new products will also help. The Altima is expected to get 38 miles per gallon on the highway, up 20 percent from the old model and the best fuel economy of any gas-powered midsize car. It has a sharper exterior and more luxurious interior. It also features a new handsfree system that connects to the driver’s smartphone and new safety features like blind spot and backup warning systems. At $21,500, it starts at just $1,000 more than the outgoing Altima. The sedan has been Nissan’s best-selling vehicle for at least a dozen years. But Edmunds.com analyst
Jessica Caldwell says the company’s reliance on the Altima, when it has 19 other vehicles in its lineup, is a definite weakness. A ltima sa les tota led 268,981 last year, or nearly one out of every three cars Nissan sold. The company’s next best-seller, the Rogue small SUV, sold 124,543. “A car company’s sales should not ebb and flow based on the success of one model,” Caldwell says.
Beyond boring
To succeed beyond the Altima, Nissan must strike a careful balance. The brand must appeal to more mainstream buyers while continuing to please fans of its quirkier models, such as the Cube, which looks like a melt-
ing Jeep Wrangler, or the Juke, whose threatening top is paired with bulbous, froglike wheels. “I had no interest in buying boringly styled cars,” says Beth Thompson, 45, a corporate trainer from Princeton, Mass., who is thrilled with the Juke’s edgy design and peppy ride. Quirky designs can work on small-volume, niche products like the Cube, which sold just over 2,000 in the first quarter. But IHS Automotive analyst Rebecca Lindland says she thinks Nissan’s aggressive styling has hurt sales on vehicles that attract more conservative buyers. Take the family minivan: Sales of Toyota’s Sienna are five times those of Nissan’s angular, tough-looking Quest. “They push the envelope on products where people really don’t want the envelope pushed,” Lindland says. Another issue, Lindland says, is that Nissan lacks a consistent design, so even fans of the Juke can’t find another Nissan product that resembles it. Other automakers, like Ford or BMW, have a consistent look. The driver of a Ford car, such as a Fusion, will be drawn to the similar grille and look of the Ford Explorer when it’s time to buy a larger vehicle. Scott Shirley, the chief marketing manager for Nissan in North America, says the new products will make Nissan’s lineup work together better in buyers’ eyes. “There will be no weaknesses,” he says. “Historically we haven’t been as consistent or focused.” Nissan has been selling cars in the U.S. since 1958, the same year as Toyota and 12 years before Honda. The company sold small cars under the Datsun brand until the mid-1980s, winning customers with sporty yet economical models like See NISSAN, Page 6
Monday, April 16, 2012 / Page 5
OnTheMOve / Tallahassee Democrat
Nissan From Page 5
the 240Z. Nissan-badged cars like the Maxima were hits in the early 1990s, but as the company floundered financially, so did its products. From 1997 to 2002, Nissan stopped selling its Z sports cars here while it focused on trucks and big SUVs. That hurt its reputation for sportiness, says Jack Nerad, editorial director of Kelley Blue Book. Nissan’s luxury Infiniti division has struggled to get noticed, too, in the hotly contested luxury market. Infiniti sales fell 6 percent in the first quarter. Nissan plans a similar product offensive to boost that brand, starting with the Infiniti JX three-row crossover this spring.
A new confidence
Rick Berry, a Nissan dealer in Holbrook, Ariz., says he can’t wait to acquire the new Altima, which he thinks will win buyers with its improved interior and luxurious styling. Berry says Nissan has a history of relying on deals — and not great cars — to sell its products. But the new cars are changing that, he says, and making the company more confident. At the New York Auto Show on Wednesday, Ghosn said Nissan has consistently gained market U.S. market share for the last six years, despite economic turmoil and last year’s earthquake and tsunami in Japan. “The progress demonstrates that Nissan can sustain significant growth for long periods through many obstacles,” he said. Still, Nissan relies far more heavily on incentives than its Japanese rivals. Nissan’s incentive spending jumped above $2,000 per vehicle in 2006 and has never gone back down, according to auto information site Edmunds.com. Nissan spent an estimated $2,459 per vehicle on incentives in March, or $300 more than the industry average. By comparison, Honda spent $954.
Poll: Auto rescues helped economy By Nathan Bomey Detroit Free Press
DETROIT — The public is far more supportive of the auto industry bailouts than the government’s decision to bail out distressed financial giants in 2009, according to a Harris poll released April 9. About 45 percent of those polled said the federal government’s decision to extend more than $77 billion in emergency loans and bankruptcy financing to General Motors and Chrysler in 2009 “helped” the economy, according to the online poll conducted by market research firm Harris
Interactive between March 12 and 19. Harris surveyed 2,451 adults and found that about 29 percent of Americans say the auto bailouts “hurt” the economy. About 5 percent were unsure. The bailouts have generated fierce debate in the presidential campaign. President Barack Obama has cited the auto industry’s return to profitability and hiring as proof of the bailouts’ success. Republican contenders, led by likely nominee Mitt Romney, have criticized the bailouts. “These findings suggest that the 2008 and 2009 bailouts may provide some useful political ammunition in the
presidential and congressional election campaigns,” Harris said in a statement. Some 23 percent of Americans say the bank bailouts helped the economy, while 48 percent said the bailouts hurt the economy and 6 percent were unsure, according to the poll. About 15 percent of Americans said insurance industry bailouts helped the economy, while 42 percent said they hurt and 9 percent were unsure. Harris cautioned that word choice can affect how voters view the government’s decisions, with “bailout” generating negative opinions and “saving” or “rescuing” pro-
ducing positive thoughts. The Harris Poll referred to the government’s moves as “bailouts” in questions to respondents. About 59 percent of Democrats say the bailouts helped the economy, while 33 percent of Republicans and 48 percent of independents agreed. The poll also found that the public would oppose additional bailout funds for the auto industry by a margin of 70-30. The poll comes as GM and Chrysler have returned to sound financial standing. After shedding debt, reducing labor costs and cutting their manufacturing capac-
Japanese automakers aim to cut costs, develop vehicles faster The Yomiuri Shimbun
TOKYO — Toyota Motor Corp. has announced the introduction of a new vehicle development system that will standardize major auto parts in an effort to cut costs. The system is intended to develop various models—in particular vehicles aimed at emerging countries—faster and more inexpensively. Nissan Motor Co. and Germany’s Volkswagen AG are also taking similar steps. However, such systems can negatively affect auto parts makers and other related companies. Under the Toyota New Global Architecture announced this week, the automaker intends to standardize half its 4,000 to 5,000 major vehicle parts in the next few years. Parts to be standardized include engines and transmissions. “This will be a way to make better cars,” Toyota President Akio Toyoda said during a press conference at the company’s headquarters in Toyota, Aichi Prefecture.
According to Toyota Executive Vice President Takeshi Uchiyamada, the new framework is aimed at “achieving cost cuts and product improvement at the same time.” The automaker will aim to reduce engineering costs by at least 30 percent by standardizing vehicle platforms and conducting research and development of multiple models simultaneously. Meanwhile, Nissan plans to introduce a system in 2013 in which vehicles will be developed in four modules and designed by combining these modules in different ways. Under this system, 80 percent of Nissan’s vehicle parts will be standardized, up from the current 40 percent, the company said. The Volkswagen Group is scheduled to release a compact car developed under such an engineering system this year. Toyota said the new system will standardize half of its major auto parts, enabling the parts to be used in different models regardless of vehicle
size. Auto parts and components are usually developed according to the size of vehicles. The introduction of such new engineering systems is therefore considered a major turning point for the auto industry. Also behind the moves is stricter environmental regulations around the world. “Costs to improve fuel performance and safety measures are expected to more than double in 2015 from 2010. So we’ve been forced to cut development costs,” a Nissan official said. However, if such systems are introduced widely, automakers may no longer procure auto parts from small and midsize companies. Herbert Hemming, president of German auto parts maker Bosch Corp.’s Japanese unit, expressed concern over the possible trend at a press conference Monday, saying some parts makers could be forced out of the competition if the race to cut costs intensifies.
ity, GM and Chrysler have added thousands of jobs and returned to profitability. Counterpart Ford Motor, which avoided a bailout and bankruptcy, is also profitable and has added thousands of jobs. GM reported a profit of $7.6 billion in 2011, while Chrysler posted a $183-million profit. The auto companies have added thousands of jobs over the last two years as sales surged. The U.S. government still owns about 26.5 percent of GM stock. Chrysler, now majority-owned by Italian automaker Fiat, has repaid its loans.
Consumer survey: Top car brands’ lead shrinking By Jerry Hirsch Los Angeles Times
LOS ANGELES — The top car brands seem to be losing their importance in the eyes of consumers as competition across the industry heats up. For years, Toyota, Ford and Honda have been the top names in Consumer Reports’ annual CarBrand Perception Survey. They are still at the top, but they have seen double-digit drops in their scores. That has narrowed the gap between the top names and middle-of-theroad car brands. “Dramatic events in the automotive industry seem to be affecting how consumers view auto brands,” said Jeff Bartlett, Consumer Reports’ deputy editor for autos online. “It is harder for a single brand to stand out among the competitive field.” Consumer Reports’ 2012 Car-Brand Perception Survey measures how consumers perceive each brand in seven categories:
safety, quality, value, performance, environmentally friendly/green, design/ style, and technology/innovation. The magazine combines those factors to calculate a total brandperception score. The scores are a measure of a brand’s image in consumers’ minds but are not meant to reflect issues such as quality, reliability or results from Consumer Reports testing of vehicles. “Brand perception can be influenced by many things, from professional road tests to marketing. Word of mouth from friends and neighbors can be a slower-moving though influential contributor as ownership transitions from the initial honeymoon phase to the seven-year itch,” Bartlett said. As in past years, Toyota was ranked at the top for overall brand perception, although it slipped 17 points to 131 points from last year’s results.
Page 6 / Monday, April 16, 2012
Tallahassee Democrat / OnTheMOve
Hyundai emerges as contender in US By TOM KRISHER The Associated Press
NEW YORK — Americans were laughing at Hyundai’s cars when John Krafcik joined the company eight years ago. The cars were ugly and often broke down. The only reason to buy one was because it was cheap. Jay Leno once joked that you could double a Hyundai’s value by filling it up with gas. No one’s laughing now. The Korean automaker’s quality has improved, and it’s among the leaders in fuel efficiency and styling. Sales are up more than 60 percent since 2008, the year Krafcik became CEO of American operations. Hyundai’s Elantra compacts and Sonata midsize sedans are in such demand that few discounts are offered. And although the company’s U.S. sales are just a fraction of General Motors’ or Ford’s, they’re growing so quickly that Hyundai is feared by every other carmaker. Hyundai had already started to change before Krafcik arrived, offering a 10-year, 100,000 mile warranty with its cars. But the transformation from joke to juggernaut accelerated under his watch. Krafcik, 50, is a Stanfordtrained engineer and manufacturing expert. He began his career as a manufacturing engineer at a General MotorsToyota joint venture factory set up so GM could learn how Toyota made cars. While working for the venture in the early 1980s, he saw the gap in standards between Japanese and American plants. He has focused on quality ever since. Despite Hyundai’s turnaround, Krafcik still worries about quality. “It only takes one small mistake with a critical part in a safety-related system to derail all of the good work that we’ve done,” he says. Krafcik, who often wears open-collar shirts, sport coats and jeans, recently spoke with
The Associated Press in New York. He talked about his management style, cup holders and the success of his company, which has its American headquarters in Costa Mesa, Calif. Here are excerpts, edited for clarity and style: Q: Your company has made a remarkable turnaround since the early 1990s when it sold inexpensive cars that fell apart. How did you make the transformation? A: First you had to build that foundation of quality and consumer trust. By the time we got to the late ‘90s, we knew that our quality was good. We knew our reputation was horrible. And the America’s Best Warranty, that 10-year, 100,000-mile powertrain warranty, ended up being huge. We were able to take ourselves from about 90,000 units (cars and trucks) per year at the absolute pits of our sales — this was in the late 90s — to 300,000 and 400,000 within four or five years. Q: That was a bet-the-company move? A: It was an absolute betthe-company move. If we had gotten that one wrong, then the company would have failed. And rather quickly, too, as the warranty expense and exposure are significant when you’re taking a bath that big. Q: Hyundai has pushed the envelope in its car designs, and other companies are just now catching up with the Elantra and Sonata. How did you pull that off? A: It just takes courage and a willingness to take risks. So with Sonata, the conventional orthodoxy in the industry was midsize cars should be styled conservatively. This is typical market research talking. We know this because we talk to our midsize car buyers all the time. Here’s what they say: ‘Safety. Quality. I want a good value and a fair price.’ And about number seven or eight on the pecking order is design. From that mentality has come the point of view
Andre J. JAckson/detroit Free Press/Mct
Sung Hyun Park, president, Hyundai R&D Division, shakes the hand of John Krafcik, CEO of Hyundai of North America, after the Hyundai Elantra was awarded the Car of the Year award at the North American International Auto Show at Cobo Center in Detroit, on Jan. 9. that midsize cars should look like (Toyota) Camrys and (Honda) Accords and (Chevrolet) Malibus. Q: Why would you take a risk on design when it was conventional wisdom not to? A: Products starting with the ‘05 Tucson and the ‘06 Sonata were designed in a safe and conservative manner. It didn’t move the needle in terms of sales. You go through that and you finally see the pattern. You can’t just accept safe. So now when we do our research, we categorize people before they come (in) as either conservative or progressive in their design thought. And we can then weight the results. It gives more weight to what we call design progressives.
Q: What else happens in your market research? A: We’ll send a couple of product planners and market researchers out with consumers and just literally spend a day or two with them, looking at their cars. Seeing how they live their lives around their cars. When they go to Costco, where do they put those big, huge things of toilet paper? It gives us insights. We’re trying to find what we call unmet needs. Q: What are Americans looking for in cars now? A: Fuel economy is definitely on their mind. It’s huge. As fuel prices go up, interest in the compact car segment goes up. So compact cars now are selling very, very well. Fuelefficient cars are selling very,
very well. We’re seeing more discretionary car purchases now. More car purchases that aren’t driven specifically because my car is old or my car is fuel inefficient. Q: What’s something that has surprised you about how people use their cars? A: The car as personal living space. It’s amazing how much stuff people carry around. Finding room for people’s stuff is one of our priority focal points. Let me give you a great example. Cup holders and bottle holders. This is a great success for Hyundai, and it took some time to convince the engineers that this is what we needed to do (because) cup holders cost money. If you’re going to do them right, they
have little gripper fingers and you have to make more expensive molds and stuff. Engineers never understand why a driver would need two cup holders and the front seat passenger would also need two cup holders. Q: What could derail your sales growth? A: It only takes one small mistake with a critical part in a safety-related system to derail all of the good work that we’re done. So we’re being so careful and cautious, putting in quality operating systems and insuring that everything is working with them. We need to get to this point of tier-one quality in everything we do. But we’re not there yet. See HYUNDAI, Page 7
Monday, April 16, 2012 / Page 7
OnTheMOve / Tallahassee Democrat
Hyundai From Page 6
Q: What in Detroit’s corporate cultures caused them to get into trouble and what did you learn from being there? A: Hyundai’s culture is something refreshing. This idea that bold targets drive great things. (It) just stretches your boundaries, your mind and your team in ways that you wouldn’t otherwise have stretched and achieved. Working at GM, Toyota, and Ford, the approach was more focused on, ‘Let’s set targets that we’re fairly confident of being able to get to.” That’s OK, but the outlook is decidedly less optimistic in a company like that. Q: How would you describe your management style? A: My job is to set some aspirational targets and continually communicate those targets. I believe in repetition of message. Q: Is the auto industry becoming cool to work for again? A: I would say so. There’s no industry cooler, no industry more complicated and more important to industrial economies. It’s always been a sore point for me that the industry has had a bit of a black eye. That people would think of us as not being quick on our feet, and not being responsive to consumer needs. And maybe, honestly, some of that has been true. But what we’ve been through in the last couple of years has gotten rid of a lot of old bad habits. I see the industry now stronger, more vibrant than it’s ever been. I do see us recruiting a lot of really smart people. Q: Who are your mentors? A: Maybe the most influential guy was a fellow named Yoshimitsu Ogihara. He was a Toyota guy. He would teach like this: He would say ‘OK, John-san. I want to send you to Oklahoma City GM plant. You go there. Make one-page, Toyota-style report. And come back.’ And I’d say, ‘OK, Ogihara-san. What do you want me to look for?’ ‘You will see.’ So I go there. It was this
big place. Huge piles of inventory in cardboard boxes. People sleeping in those cardboard boxes. Massive parking lots filled with cars with parts missing. And the windshield wiper in the up position, which I later learned meant this car needed to be repaired. Every car in that huge lot, thousands of them, had their windshield wiper up. I remember writing this one-page report, just kind of detailing what I saw. I said, ‘What do you think?’ He said, ‘OK. Now I need to send you to Toyota City.’ (the Corolla factory) It was amazing. You could see from one end of the plant to the other. Every bit of floor space had a visual indication of what it was for. The workers were working, but not crazy hard. No one was sleeping in cardboard boxes. I came back and wrote this one-page report. This was 1984, and no one really knew at the time that there was this big, huge difference between the way one company built cars and another company built cars. And I was a 23-year-old kid and I suddenly knew. So I worked there another couple years under Ogihara-san. He taught me so much but never through saying it. Q: What was so effective about that approach? A: You owned it. You just discovered it with your own eyes. Q: How do you use that in management today? A: I like to leave a cookie trail to the right answer. I find sometimes you can bring a horse to water but you can’t always get it to drink. But I don’t like to say, ‘Look, this is how we should do it.’ I like to provide some approach that helps the team that’s thinking about the problem get to that answer. And when they get there, I might say something like, ‘That’s terrific. I was hoping you’d end up there. What a great solution.’ It’s hard, though, when the team doesn’t get to where you want it to go. And then you have a difficult decision to make. Do you enforce your will or do you let the team learn from their approach?
Federal regulators propose brake-override systems in all cars By Jim Puzzanghera and Jerry Hirsch Los Angeles Times
WASHINGTON — More than 2 ½ years after the fatal crash of a Lexus in suburban San Diego led to the recall of millions of Toyota vehicles, federal regulators are taking their most significant step to prevent future vehicles from accelerating out of control. The National Highway Traffic Safety Administration formally proposed a requirement Thursday that automakers include a brake-throttle override system in all their passenger cars and light trucks to help drivers regain control when a vehicle accelerates suddenly. The move came after the fiery 2009 Lexus crash and subsequent Los Angeles Times stories triggered a flood of complaints about sudden acceleration in Toyota Motor Corp. vehicles. Lexus is a Toyota brand. The complaints led to highprofile congressional hearings and calls for tougher federal regulations. Since then, Toyota has made a brake-override system standard, and most other automakers offer such a system on many of their vehicles or are adding it. Still, federal officials said they wanted to make sure every car or light truck sold in the U.S. came equipped with a system that allows drivers to stop the vehicle even when a throttle is stuck or jammed. “America’s drivers should feel confident that any time they get behind the wheel they can easily maintain control of their vehicles — especially in the event of an emergency,” Transportation Secretary Ray LaHood said. “By updating our safety standards, we’re helping give drivers peace of mind
that their brakes will work even if the gas pedal is stuck down while the driver is trying to brake.” Automakers would have about two years to comply once the proposal becomes final, which is expected. Some automakers might need to change their systems to comply with the new regulations. But the proposal said there should be minimal cost to the industry to implement the new requirement because almost all 2012 light vehicles sold in the U.S. have a brakeoverride system. “We have long been in favor of brake override,” said Clarence Ditlow, executive director for the Center for Auto Safety. “But the devil is in the details. ... You have to say that everyone has a good brake override that won’t malfunction.” Toyota said it was the first full-line automaker — one that sells cars, trucks and SUVs — to make a brake-override system standard, implementing it in all vehicles the company sold by the end of 2010. The system allows drivers to stop a vehicle if there is physical entrapment of the pedal or jamming of the throttle, Toyota spokesman Mike Michels said. Entrapment was the suspected cause of the deadly Lexus crash. A 60-day public comment will begin soon on the 98-page proposal. The Alliance of Automobile Manufacturers, which represents Toyota, Ford Motor Co., General Motors Co., Chrysler Group and eight other large automakers, said it was reviewing the proposal. The group said it has supported making brake-override systems standard since 2010. Michels noted that brake override is not completely
“We have long been in favor of brake override. But the devil is in the details. ... You have to say that everyone has a good brake override that won’t malfunction.” ClarenCe Ditlow executive director, Center for Auto Safety
fail-safe because there are times when a driver needs to use both the brake and the throttle. “It’s important to note that if the foot is first on the brake and the accelerator is then applied, the engine will accelerate. This is, of course, to permit drivers to hold a car on a steep hill using both feet,” Michels said. But if the accelerator is applied first and the brake is then depressed, the override will kick in. Investigators believe that the Lexus ES 350 crashed after a floor mat was improperly installed and may have trapped the accelerator pedal, causing the vehicle to race down a highway outside San Diego at more than 100 miles per hour. The car crashed and burst into flames, killing off-duty California Highway Patrol Officer Mark Saylor and three members of his family. That crash led to a recall of 3.8 million Toyota and Lexus vehicles to fix the floor mat problem. After a Los Angeles Times series of stories on sudden unintended acceleration, Toyota issued millions more recall notices to fix sticking gas
pedals and other issues. Safety officials believe that brake-override systems, in which the application of the brake pedal by the driver would instantly disengage a stuck throttle, can prevent such crashes. “We learned as part of the comprehensive NASA and NHTSA studies of highspeed unintended acceleration that brake-override systems could help drivers avoid crashes,” NHTSA Administrator David Strickland said. “This proposal is one way the agency is helping keep drivers safe and continuing to work to reduce the risk of injury from sticky pedals or pedal entrapment issues,” he said. The systems act as an electronic fail-safe that automatically releases the throttle when a car’s onboard computer senses that the brake pedal is depressed. Designed for cars with electronic throttle control, which use wires and software rather than mechanical cables to connect the gas pedal to the engine, it has been available for nearly a decade. Some carmakers, including Nissan, Volkswagen, BMW and Chrysler, have been using brake-override systems for years. But even if the systems become universal, there’s still some question as to whether they will reduce driver complaints about unintended acceleration. “This technology is typically raised as a solution to the issue of unintended acceleration. The problem is that the evidence shows this is usually a driver-error issue. In other words, the gas is being applied, not the brakes,” said Jeremy Anwyl, vice chairman of auto information company Edmunds.com.