State of the Union December 13, 2013

December 13, 2013 online at www.uawlocal2250.com

From Chairman Mike Bullock: There is no truth to the rumor that we will be working more than 10 hour shifts today or more than 8 hours Saturday. I have not and would not agree to do this.

Reminder: UAW Legal Services will end Dec. 31 so this is your last opportunity to avail yourself of their assistance free of charge. Services include creating wills and trusts or executors of estates. There are 3 area offices: Lake St. Louis (636-561-2057); St. Ann (314-291-6868); Sunset Hills (800-582-6494). You can also go online for more information at www.uawlsp.com.

From the Detroit Free Press: General Motors has chosen to go bumper-to-bumper with Toyota for what’s left of a compact pickup market Ford and Chrysler have abandoned for the fatter profits of more massive trucks. Ford no longer makes its Ranger for North America and Chrysler’s Ram brand has shelved plans for a successor to the Dakota. “I can’t believe it. It’s wild. I’m loving it,” said Mark Reuss, GM North America president, with the excitement of a linebacker who just scooped up a fumble and is end zone bound.

Unlike full-size trucks, of which Americans will buy about 1.9 million this year, compact pickups are almost a niche market on pace to sell about 225,000 this year. Dominating the market is the Toyota Tacoma, which has sold 146,724 through November. “We have this diamond — a 150,000-unit annually pickup truck,” and it sells with zero incentives, said Bob Carter, Toyota senior vice president of automotive operations. “Our business hasn’t declined. It’s just that (nearly) everybody has pulled out.” The closest competitor is the Nissan Frontier, with less than 58,000 U.S. sales this year through November. Honda has sold 16,160 Ridgelines.

“The question is whether the segment will continue to be squeezed out by the advances in full-size trucks,” said Reid Bigland, head of Ram trucks. “Or is it a major growth segment?” Chrysler, so far, is betting the segment will shrink. But Jeep chief Mike Manley would love to see the return of a Jeep pickup. “Jeep has a history of pickups. I’m a fan of a pickup,” Manley said. “It’s something a number of people would like to see.” But not enough for Chrysler’s top management to approve a program.

Ford sells the Ranger everywhere but North America. Joe Hinrichs, Ford president of the Americas, said Ford is not re-evaluating its decision to stop selling the Ranger in the U.S. “With our fuel-efficient F-150 we can meet demand,” he said. “We think our strategy is working.” (continued on back)

GM sees an opportunity. Reuss recognizes the risk, but is betting new product will stimulate interest and sales. GM was unveiled a new Chevrolet Colorado last month at the Los Angeles auto show. Sometime in the next year or so it likely will add a ZR2 off-road version. Reuss said there is a lot of opportunity for special editions and accessories. The GMC Canyon, which has not been revealed yet, looks more like a full-size truck, Reuss said. Pricing of the small trucks’ top trim levels will overlap with entry-level full-size trucks. But Reuss said the small truck buyer appreciates its smaller dimensions and driving something almost 1,000 pounds lighter than a Chevy Silverado. Making a smaller, lighter and more fuel-efficient truck also helps GM bring down its corporate average fuel economy to meet regulations on the horizon, Reuss said.

Toyota welcomes the competition. “I actually believe that the Colorado creates more Tacoma business,” Carter said. “I really think some energy into the market is going to help.” The Tacoma was refreshed last year. “I would rather be a little smaller share of a growing segment than a big fat share of a declining segment,” said Bill Fay, Toyota division general manager. Chrysler executives beg to differ. “The vision of a small pickup is easy to understand from a consumer point of view. It’s just hard to execute given how competitive full-size pickups have become,” Bigland said. Resources will focus instead on the full-size Ram lineup. Bigland said the dilemma is that to make a small truck distinctive, it would need to be priced below $20,000 and get more than 30 m.p.g. “When we have half-ton trucks that can get 27 miles to the gallon and be had for the low $20,000s, we are struggling with where that would fit,” Bigland said. “We need to make sure we’re investing in the places where we’re going to get the best return.”

From Automotive News: Despite slow sales, Honda is not giving up on the Ridgeline pickup. Honda Motor Co. said today it will launch an all-new second generation of the Ridgeline within two years. The vehicle will be new from the wheels up and built in Honda’s Lincoln, Ala., plant, home of the current model. Honda plans to end production of the first-generation Ridgeline in June, leaving a gap in production. Depending on demand for the current model, dealers may run out of Ridgelines before the new one is available. But Honda spokesman Steve Kinkade said if that does happen, dealers will not be out of the truck for an extended period of time. Honda did not release any technical details of the new Ridgeline or indicate whether it would remain the same size as the current model. There’s also no word on whether it will continue to be based on the Odyssey minivan platform or get unique underpinnings. The Ridgeline, facing full-size truck competitors from Ram, Ford, GM, Toyota and Nissan, is the segment’s lowest volume seller. Through November, Honda has sold 16,160 Ridgelines, up about 29 percent over last year. The company recently introduced a special edition model for 2014. The U.S. market for smaller pickups may gather momentum after GM unveiled its Chevy Colorado and GMC Canyon pickups, said Karl Brauer, senior analyst at Kelley Blue Book. "It's likely Honda sees a potential second coming for the small/midsize truck segment," Brauer said in an e-mail. "And if you consider the potential for economic growth, along with lower gas prices, over the next few years they could be right. Between housing starts rising and more disposable income for 'lifestyle' activities and recreation the demand for compact trucks could grow substantially.