DC IN TROUBLE,CAD GOES RAP,HONDA'S NEW "MODEL,"TOYOTA STICKS

ITS FOOT IN ITS MOUTH AND PENSKE PREVAILS by Bob Hagin

Many interesting things have been going on in the auto world recently and most of them point up the fact that it's a very diverse world. Here's some new happenings for your perusal:

GERMAN BANK BACKS AWAY FROM DAIMLERCHRYSLER - It's no secret that since Daimler-Benz took over Chrysler Corp. several years ago, things have not been going well for that German company. From the time that DaimlerChrysler (DC) head man Jurgen Schrempp gleefully admitted that he bamboozled Chrysler executives about the takeover being a "merger of equals," (it wasn't) to strong-arming American parts suppliers into lowering prices, to bringing in a flying phalanx of German execs to replace Americans, it's been tough times in Auburn Hills, Michigan. Now things may get even worse as Deutsche Bank, the auto maker's largest stockholder, announced that it would sell off its 12-percent share of the company's stock as soon as the price per share recovers from its slump. DC wants to drop its stock divided to investors by almost 60 percent, which won't sit well with shareholders at the next annual stockholder's meeting. Last year DC stock ranged from a high of $52 down to $25 last year and is currently at $35. Deutsch Bank plans to sell as soon as shares get back up to a reasonable price and it also plans to sell its stock in all its publicly-traded industrial businesses. Maybe it's decided that backing companies that make "stuff" is too risky.

CADILLAC TAPS A RAPPER - Cadillac wants to shake it's stodgy image, right? Since the average age of a typical Caddy owner is in the mid-'60s, it will take some innovative publicity to get those demographics down into the low '50s but the company is determined. To that end, the youthful executive and advertising folks involved with the marque came up with some innovative programs. TV viewers have already been exposed to a promotion for the 2003 3.2-liter Cadillac CTS sedan that features it blasting past a pristine 'late-'50s Cad convertible. It's accompanied by a Led Zeppelin tune (it's the first time that group has allowed its songs to be used in a commercial) in a pitch to the generation that venerates that style of rock and roll. But the really startling possible promotion is one that involves rap star Snoop Dogg. A special version of the Deville is on order with a Texas Cad dealer to produce the personalized Snoop Dog Deville. The company disclaims rumors that it plans a production model, but somewhere in the corporate psyche there must be the memory of the special Cad convertibles made famous by the late Elvis Presley.

HONDA INTRODUCES PERSONABLE ROBOT - It's a Honda model that you won't see on a showroom floor for a few years, but it's one that is bound to attract attention wherever it's shown. Maybe "it" should be called "he" since "Asimo" is a totally articulated robot that can walk, talk, sing, dance, climb stairs and even do simple domestic chores. Asimo is so human-like, Honda executives asked religious leaders in Japan for their blessing to complete the project. Honda started its human-like robot research in the early '70s as a way to accelerate the research and development of future products. "He" isn't very tall at only 47-inches, and weighs 115 pounds, but he has a smile on his "face" and can even shake hands with onlookers. But if you're really serious about having an Asimo (Advanced Step in Innovative Mobility), you may be able to rent one - if you live in Japan. The new, improved version can receive voice input and do a plethora of other interesting things. It's not as versatile as The Robot in the "Lost In Space" TV series but then Will Robinson (actor Billy Mumy) is all grown up (he should be about 48 now) and can take care of himself.

KNOWLEDGEABLE BUYERS SEEN AS THREAT TO INDUSTRY - Sometimes auto executives say the darndest things that come back to haunt them. The aforementioned Jurgen Schrempp of DaimlerChrysler is a prime example. Another recent member of that unofficial "Foot In Mouth" club has to be Jim Press, Chief Operations Officer of Toyota U.S.A, as he addressed the recent annual meeting of the National Automobile Dealers Association in New Orleans. In recent years, animosity has been developing between the auto makers and their dealers. In the case of Ford, it led to court battles and hard feelings for a long time. In an attempt to urge dealers and factories to grow closer together, Press cited the need for the two to join against "assaults" from several different groups. One threat is from customers who are now more knowledgeable and demanding, he said, while another is activist groups who are concerned about traffic, safety driver distractions and the environment. I hope that the rest of the industry doesn't feel that buyer ignorance is bliss and that traffic, safety and the environment will take care of themselves.

KMART FILES BANKRUPTCY BUT PENSKE PRESSES ON - Roger "The Captain" Penske isn't known for making bad business decisions, except maybe for bucking the Indy Racing League and almost wrecking formula racing in America. One of his multitude of business ventures is the operation of the auto service centers for the Kmart mass-merchandiser. Penske Auto Centers are in one out of every three of Kmart's 2100 stores and doing very well. But recently Kmart filed for bankruptcy and that may leave Penske in a tight spot. All but 48 of his centers are under Kmart roofs, so drawing customers may take some innovative marketing. Although the Penske Auto Centers have been money-losers since their inception in '95, the company just signed a 10-year renewal contract with Kmart. Martha Stewart may have a problem but The Captain sails on. All of these items point up the fact that there's more to the car business than just cars.