Caught in campaign crossfire

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Updated: February 20, 2012 4:45PM

An unlikely 81-year-old emerged from the shadows into the glare of political controversy on Feb. 5.

Clint Eastwood sauntered out of a dark-toned Chrysler Group Super Bowl spot to growl out a tribute to the revival of domestic automakers.

“Detroit’s showing us it can be done, and what’s true for them is true for all of us,” the Academy Award-winner rasped, urging a revival of American confidence.

The next day the political fireworks began — a likely harbinger of things to come.

Republican political consultant Karl Rove was the first to attack the commercial. Rove said it amounted to a political endorsement of President Obama, who has been touting the resurgence of Detroit automakers in his re-election campaign.

“The president of the United States and his political minions are in essence using our tax dollars to buy corporate advertising,” Rove charged.

Although Chrysler CEO Sergio Marchionne denied that the spot was political, the message for the automotive industry was clear: Like it or not, automakers are targets for election year sniping.

Hyundai weighs new luxury sub-brand for its showrooms

Hyundai is looking at selling its rear-wheel-drive premium vehicles such as the Equus, Genesis sedan and Genesis Coupe under a new sub-brand called Genesis.

Already rejected, though, are expensive new showrooms and rooftops for the brand, said Dave Zuchowski, executive vice president of sales for Hyundai Motor America.

Instead, vehicles in the Genesis sub-brand, if approved, would occupy a separate zone in Hyundai showrooms.

John Krafcik, CEO of Hyundai Motor America, says the plan is in the talking stage.

“We study thousands of things and ask provocative questions about even more things, and that’s probably in the category of ‘What if we did this?’ or ‘Should we consider that?’ — just scenario planning,” he said. “We love the halo that Genesis, Genesis Coupe and Equus has provided the Hyundai brand, so we’re in great shape, and there is absolutely no plan to make any change.”

Sticks and carrots: Why furor over facilities won’t go away

Martin NeSmith personifies the boiling point over manufacturer facility programs.

NeSmith just built a Chevrolet-Buick-GMC store in Jesup, Ga., spending an extra $500,000 to comply with General Motors’ Essential Brand Elements program. But with hefty volume-based payouts for complying and a shrinking dealer margin, he figures he had little choice.

That money has become “a carrot that all the dealers are chasing,” said NeSmith, whose store will open April 2. Last year he sold about 1,100 new cars between his two stores. “It’s caused dealers to be cutthroat on pricing because they’re doing everything they can to get that EBE money.”

NeSmith’s experience explains the intensity of the attention paid to the National Automobile Dealers Association study released Feb. 4. That study, which dominated conversation in meeting rooms and on the exhibition floor at last week’s annual NADA convention in Las Vegas, weighed in on the carrots and sticks used in facility programs. The conclusion: A perfect resolution isn’t obvious.

When it comes to dealer objections about facility demands, the volume-based incentives tied to some of the programs take center stage. Many dealers argue the incentives amount to illegal two-tier pricing — in other words, dealers who don’t get the bonus money ultimately pay more for the vehicle. They compete against dealers who get the money and use it to offer lower prices to consumers.

For the full stories and more visit autonews.com.