- The Washington Times - Friday, January 11, 2002

Author Charles Dickens could have been writing about the auto industry in 2001 when he wrote, "It was the best of times; it was the worst of times."
Indeed, 2001 ranked among the best of times in terms of car and truck sales. When the final figures are tallied, 2001 likely will mark the industry's second-best year in history for U.S. car and truck sales with nearly 17.1 million cars, down from last year's previous record of 17.4 million.
The near-record sales were spurred by unprecedented incentives, which made it among the best of times for consumers to buy new cars and trucks. Even before the September 11 terrorist attacks, vehicle sales had weakened due to the economic slowdown. After the attacks, traffic in dealerships ground to a halt. In response, General Motors began its zero-percent-interest "Keep America Rolling" campaign. Other automakers were forced to follow. Many of the programs were extended and will remain in effect through early January.
It was the best of times for nearly all import brands. Many set new sales records. Korean automakers Hyundai and Kia were the biggest sales gainers with double-digit increases. Likewise for Acura and BMW. Lexus, Subaru and Toyota also enjoyed higher sales. Lexus may well overtake BMW, Mercedes-Benz, Cadillac and Lincoln for luxury vehicle leadership in 2001. In total, import brands will probably report a 5-percent sales increase and 1.5-point market share gain to 38 percent, according to Merrill Lynch auto analyst John Casesa.
These are good times at GM, which is likely to have sales and market share increases, reversing a long downward trend. It has not been the best of times, however, for Ford and DaimlerChrysler. Both are expected to have lower sales and market share.
The near-record sales have not translated to near-record profits by any stretch. Red ink is spewing from many of the automakers and their suppliers, some of which have filed Chapter 11 bankruptcy. They are now scrambling to offset losses and lower profits by cutting costs and people.
Auto execs also experienced extremes.
Some landed fabulous new jobs; others got sacked. DaimlerChrysler continued the restructuring started late in 2000, announcing it would eliminate 26,000 jobs, or a fifth of its work force, and close six plants over the next two years.
Despite his short tenure in office, Dieter Zetsche, the German executive brought in to turn around DaimlerChrysler's U.S. operations in late 2000, now is the longest-ranking executive among the Big Three's top executives.
At Ford, CEO Jac Nasser got the boot. The ouster of the controversial Mr. Nasser came on the heels of many ugly events at Ford. Among them were the recall of 13 million Firestone tires, which cost the company $3 billion, and the flawed debut of the redesigned 2002 Explorer, which required a recall for rear windows that shattered. In addition, Ford was socked with lawsuits by white-collar workers who charged the company's performance measurement system instituted by Mr. Nasser favored minorities and women over older men. The program has been since modified and the suits settled for $10.5 million.
The end for Mr. Nasser appeared near when, in July, the automaker created an office of the chairman and CEO to include Mr. Nasser and William Clay Ford Jr., who had been kept out of the loop by Mr. Nasser. European Nick Scheele, who had turned Jaguar around, took over North American operations.
By October, Mr. Nasser was gone, Mr. Ford took over as CEO and Mr. Scheele became chief operating officer. The company would refocus on "the basics" of manufacturing and quality, while cutting 5,000 workers through buyouts and early-retirement packages.
With trouble at DaimlerChrysler and Ford, GM looked good by comparison. In a stunning move, GM hired "car guy" Robert Lutz, former Chrysler vice chairman, to head product development. Two months later, he was named chairman of GM North America, replacing Ronald Zarrella, who resigned to become chairman and CEO at Bausch and Lomb, his former employer. Mr. Zarrella had led GM's botched drive toward brand management.
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