Detroit motor show: What next for the Big Three US carmakers?

GMC Canyon pick-up truck The GMC Canyon pick-up truck kicked off the Detroit motor show when it was unveiled on Sunday night

With the spectre of government bailouts behind them, the big three US carmakers - General Motors, Ford and Chrysler - are looking ahead to what's next in Detroit at this year's annual car show, which gets under way on Monday.

The feeling of a renewal - and change - is palpable here in Detroit.

When I picked up my rental car - a Ford this time, having learned last year that one does not show up to the signature US car show in a foreign model - the man driving my shuttle let out a low whistle of appreciation.

"I've never bought a Ford before, but now I'm considering," he told me, after glancing at my spiffy new Ford Fusion.

This year promises to be one of transition for the big three, with Mary Barra taking over from Dan Akerson as the head of GM, while Ford boss Alan Mulally is set to depart at the end of this year.

In 2013, Chrysler avoided a public stock offering and in the past fortnight came under the complete ownership of Italian carmaker Fiat, finally giving boss Sergio Marchionne the chance to integrate the two firms, which badly need each other.

All of these developments are seen as good omens for the resurgence of the US car industry in 2014.

Matt Anderson, Curator at the Henry Ford Museum in Detroit, looks at some of America's most iconic cars

"Detroit is on the offensive again and it's for very substantive reasons - good product, competitive costs, and improving brand reputation," says Guggenheim car analyst John Casesa.

"I haven't been able to say this in 20 years."

Year of the truck

The Big Six

Although GM, Ford and Chrysler have long been known as the "Big Three", Matt Anderson, the curator of transportation at the Henry Ford Museum, says that might no longer be the right name.

"We call them the 'Detroit Three' now," says Mr Anderson, "in recognition that foreign auto makers have become popular in the US market."

Now, the category has been expanded to the "Big Six", as ranked by US market share:

1. GM

2. Ford

3. Toyota

4. Chrysler Group

5. Honda

6. Nissan

More than 50 concept and production vehicles will be shown for the first time in Detroit.

Perhaps the most anticipated launch at this year's show is the rumoured unveiling of Ford's new F150 pick-up truck - the best selling vehicle in North America for the past 32 years.

The truck generates the lion's share of Ford's profits - last year, 763,402 of them were sold - and Ford has been busy selling down the old model in anticipation of this launch.

Most observers anticipate that the changes in the truck will be radical - including better fuel efficiency, long a goal for gas-guzzling trucks.

"It's very unusual to reinvent a mature product," says Mr Casesa, adding that in doing so, Alan Mulally would be repeating what he did as the head of Boeing, when he changed the plane manufacturer's signature 787.

And it's not just Ford that will be unveiling a new truck. GM unveiled its 2015 Canyon model at a glitzy event in Detroit on Sunday evening, the first helmed by Mary Barra, who is officially set to take over as head of GM on Wednesday.

Mary Barra Mary Barra took to the stage for the first time as GM's new boss

The hope is that as the US housing industry continues to rebound, truck sales will grow in 2014 as consumers look to replace ageing vehicles.

"The trucks on the road are even older than the cars on the road," says Edmunds.com senior analyst Michelle Krebs, noting that the average age of cars on US roads is 11.2 years - the oldest ever driven.

'What are his goals?'

But not everyone is convinced that 2014 will bring only good news.

Gary Pacheco, 57, works at Chrysler's Trenton Plant here, making Pentastar engines - what he calls the "rock star" of the engine world. The plant churns out 1,850 engines a day.

He's been with the company for 19 years, through the disastrous DaimlerChrysler merger and of course through the dark days of 2008-09.

Gary Pacheco Gary Pacheco lives in a neighbourhood filled with union members who work at the area's car plants

He's cautiously optimistic that Fiat's complete takeover of Chrysler, which was finalised in December with the blessing of the union to which he belongs, might result in positive changes for the firm.

"I'm glad that Fiat got involved in Chrysler. For the first time in a long time, I believe that they're bringing technology to the US, not taking Chrysler's good technology," says Mr Pacheco.

On Monday, Chrysler is expected to unveil its new 200 model, which includes technology from Fiat. The hope is that it can make inroads into the very competitive mid-size sedan market, which makes up about one in four new car sales in the US.

Gary Pacheco Mr Pacheco was laid off from the Trenton plant before it was reopened by Fiat

But after years of mergers - and after seeing union workers like him fired, only to be replaced with lower-cost vendors - Mr Pacheco is wary of what's to come.

"[Sergio] Marchionne's ego will not allow him to fail and I kind of like that," he says.

"But what are his goals? Will they include laying off workers?" he asks, adding that he has not been pleased with the way that the United Auto Workers (UAW) union has handled the merger.

No leader

But the Detroit car show is of course not just about the big three. Mercedes is expected to unveil its new C-class model, while many more foreign car makers will launch products aimed at the US consumers.

"[This year] is a much more balanced competitive field than in previous years, where there was one national group just had an advantage or disadvantage," says Guggenheim's Mr Casesa.

All of which bodes well for US carmakers as they look to the future - and to regain the top spot around the world.

"I think the environment in 2014 is one in which the US companies can continue to gain share and maybe accelerate their share gains."

More on This Story

Global Car Industry

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    UNEMPLOYMENT 10:46:
    A  general view of a Jobcentre Plus in Glasgow.

    The ONS data also shows the claimant count - the number of people claiming Jobseeker's Allowance - has fallen below 1 million for the first time since September 2008. It now stands at 966,500.

     
  2.  
    'SICK' FRANCE 10:36:
    Emmanuel Macron

    "France is sick," the country's new economy minister Emmanuel Macron has told French radio. He said France has no choice but to "reform the economy". Unemployment is currently at a record 10% and there's been no growth for two quarters. Meanwhile the government budget deficit is expanding. The Business live page wishes Mr Macron good luck.

     
  3.  
    UNEMPLOYMENT 10:14:
    Iain Duncan Smith

    Work and Pensions Secretary Iain Duncan Smith tells the BBC News Channel that pay in the financial services industry is distorting current average wage growth statistics. He says pay rises in the manufacturing industry are up 2% year on year. He also points out that food prices are coming down and inflation generally is falling.

     
  4.  
    Via Twitter Andrew Sentance, former member of Monetary Policy Committee

    tweets: "UK unemployment rate at 6.2% & still falling sharply. At current rate of decline it'll be <5% next summer - pushing up pay & inflation."

     
  5.  
    WAGE GROWTH 09:58:
    Hand and coins

    The ONS data shows average pay was 0.6% higher in the three months to July, compared to a year earlier. That's an improvement on the previous figure which showed a 0.2% decline. Pay excluding bonuses also rose slightly by 0.7%, the previous figures was 0.6%. Pay rises are still running well below the rate of inflation. On Tuesday data showed consumer price inflation running at 1.5% in August.

     
  6.  
    INTEREST RATES 09:35:

    There was no change in voting patterns at the Bank of England's Monetary Policy Committee at September's meeting. Two members voted in favour of raising interest rates to 0.75%.

     
  7.  
    UNEMPLOYMENT 09:32: Breaking News

    The unemployment total fell by 146,000 to 2.02 million in the three months to the end of July, official figures show. The Office for National Statistic said the unemployment rate for the period was 6.2%, down from the previous level of 6.4%.

     
  8.  
    EUROPEAN CAR SALES 09:27:
    The new body of the Volkswagen Passat

    Car sales across Europe rose for the 12th month in a row industry figures show today. They were 1.8% higher at 701,118 in August, from 688,464 a year-earlier the Association of European Carmakers (ACEA) says. Volkswagen, Ford and Opel all benefited from improved demand in Spain, Portugal and Ireland. But car sales in Germany - Europe's largest car market - were 0.4% lower.

     
  9.  
    INTEREST RATES 09:20:

    At 09:30 the Bank of England publishes minutes from the interest rate policy meeting in September. In August's meeting two members of nine-strong monetary policy committee voted to raise interest rates. Will others have joined them in September? Watch this space.

     
  10.  
    Via Twitter Kevin Peachey Personal finance reporter, BBC News

    tweets: "Hold music among biggest consumer service irritations says @WhichUK survey - any views on the most annoying?"

     
  11.  
    TECH SHARES ARE UP 09:04:
    imagination technologies

    Shares in two of Britain's most successful technology companies are sharply higher this morning. Imagination Technologies, which designs chips for mobile devices, has seen its shares jump 6%. That's after the company forecast a strong performance in the second half of the year. Fellow chip designer, ARM Holdings is leading the FTSE 100 higher with a 1.9% gain.

     
  12.  
    HEADLINES
     
  13.  
    MARKET UPDATE 08:34:

    Shares in London are higher in early trading with the FTSE 100 up 16 points

    • Smiths Group slumps 5.4% after sales fall
    • JD Sports up 2.7% following half year results
    • Pound slightly higher at $1.6296
     
  14.  
    SCOTTISH REFERENDUM 08:26: BBC Radio 4

    Former Bank of England Deputy Governor, Sir John Gieve says the Bank is "a creature of Westminster" and will be an adviser in any currency negotiations. "I think it could work, " he says of currency union but adds it "relies on careful negotiation". A lot of policy decision would remain in London, he adds. If the economies of Scotland and the rest of the UK began to diverge more than they do at present that could be a problem.

     
  15.  
    INTERNET OF THINGS 08:17: BBC Radio 4

    The Internet of Things is a phrase bandied around. ARM Holdings boss, Simon Segars is fresh from a conference about it - but it all sounds a bit pedestrian. Mr Segars says one example is a coffee cup that has a microchip in it that could tell you if you're consuming too much coffee. There is already a fork that can tell you if you are eating too quickly. On Today he also mentions apps that help you find a parking space.

     
  16.  
    JD SPORTS 08:11: Radio 5 live

    We're not far off being saturated with sports shops in the UK says Peter Cowgill, executive chairman of JD Sports on Radio 5 live. But the company is having "significant success" competing in Spain, German, France and the Netherlands.

     
  17.  
    PHONES 4U RESCUE 07:57: BBC Radio 4

    It is "perhaps not surprising" that Vodafone and EE are looking at buying parts of Phones4U now that it is in administration, says Laura Lambie of Investec Wealth and Investment on Today. Both EE and Vodafone had been approached by Phones 4U which tried to interest them in buying the retailer, she says. After refusing that approach, Vodafone and EE are now looking "to pick up assets on the cheap", according to Ms Lambie.

     
  18.  
    SONY PROFIT WARNING 07:50:
    xperia phones

    The profit warning at Sony is the result of a review of its mobile phone business. It says there has been "a significant change in the market and competitive environment". As a result, it has taken a £1bn charge to reflect the loss of value of the mobile business. It is reducing the number of models it produces and is concentrating on a premium lineup.

     
  19.  
    JD SPORTS PROFITS 07:36: BBC Radio 4

    "The high street is alive and well," says Peter Cowgill, executive chairman of JD Sports on Today. The retailer has a strong presence in shopping malls and online but Mr Cowgill says a high street presence is "still very important to JD Sports". The retailer has a contingency plan if Scotland votes Yes to independence. But he adds: "We don't think there will be a major impact on our trade. We think there will be no change to prices [if Scotland votes Yes]."

     
  20.  
    SONY PROFIT WARNING 07:32: Breaking News
    Sony office

    Sony expects to report a much deeper loss this year than originally forecast. The firm now expects a loss of 230bn yen (£1.3bn) for the year which ends 31 March. Its previous forecast was for a 50bn yen loss.

     
  21.  
    JD SPORTS PROFITS 07:29:

    Profits at retailer JD Sports doubled in the first half of the year. Before exceptional items it made a pre-tax profit of £19.9m. Sales at stores open for more than a year rose 13% from the same period a year ago. But its fashion business which includes Scotts and Bank had a "disappointing" first half, the company said.

     
  22.  
    INDITEX RESULTS 07:10:
    Zara store

    The world's biggest clothing retailer, Inditex has posted a 2.4% fall in first half net profit. The owner of Zara, made 928m euros (£738m). That was not as bad as some analysts were expecting. The company also said that sales for the start of the third quarter rose 10%.

     
  23.  
    SPACESHIP CONTRACT 06:56: Radio 5 live
    Space X Capsule

    Nasa has awarded up to $6.2bn (£3.8bn) to Boeing and SpaceX to develop space vehicles that can take crew into space. The firms are aiming to have their spaceships ready by 2017. Since the space shuttles were retired in 2011, the Americans have relied on Russia and its Soyuz vehicles to get to the International Space Station.

     
  24.  
    SCOTTISH REFERENDUM 06:38: BBC Radio 4
    Scottish bank notes

    Former Bank of England deputy governor Sir John Gieve tells the Today programme he expects Bank staff to be at work very early on Friday morning to try to calm markets, whichever way Scotland votes in the independence referendum. In particular, the Bank will be busying itself with the possibility of "deposit flight" so that "we don't get the sort of panic that there was with Northern Rock". That means for starters making sure that cash machines remain fully stocked.

     
  25.  
    ARM CHIEF EXECUTIVE 06:27: Radio 5 live
    Arm processor

    It's arguably Britain's most successful technology company, but you may have never heard of it. ARM designs computer chips and is worth almost twice as much as Marks and Spencer. On Wake Up to Money chief executive Simon Segars says most of the firm's customers are in California, China, Taiwan and South Korea. "It's a shame" there are not more technology companies in the UK, he says. People have been keener to go into financial services, Mr Segars says.

     
  26.  
    SCOTTISH REFERENDUM 06:16: Radio 5 live

    Whichever way the Scottish independence vote goes, the business impact "remains unclear" says Nora Senior, chair at Scottish Chambers of Commerce on Wake Up to Money. Big questions over currency, Europe, debt, pensions and tax were raised in the run up to the vote, she says. "Business wants a decision that is clear and swiftly executed," Ms Senior says.

     
  27.  
    BEREAVEMENT AND WORK 06:10: Radio 5 live

    A third of employees who have suffered bereavement in the past five years felt that they had not been treated with compassion by their employer, according to a survey by the Advisory, Conciliation and Arbitration Service (ACAS). It is launching guidance for companies. "Managers need appropriate training and support," said Sir Brendan Barber, ACAS chair on Wake Up to Money.

     
  28.  
    PHONES 4U RESCUE 06:00:
    Phones 4U sign

    The Financial Times is reporting that Vodafone and EE have approached the administrators of Phones 4U about buying parts of the failed business. Around 550 shops and 6,000 jobs are at risk. The private equity owners of Phones 4U and its founder, John Caudwell have blamed the aggressive tactics of EE and Vodafone for the collapse of the firm. Both network operators deny those accusations.

     
  29.  
    05:59: Matthew West Business Reporter

    Morning everyone. As always you can get in touch with us via email on bizlivepage@bbc.co.uk or twitter @bbcbusiness.

     
  30.  
    05:59: Ben Morris Business Reporter

    We'll get the latest unemployment figures and data on earnings at 09:30 this morning. Plus the Financial Times says that Vodafone and EE are looking to buy parts of their former customer, Phones 4U. Stay with us.

     

Features

From BBC Capital

Programmes

  • Cinema audienceClick Watch

    Brighter 3D films - the new laser-based system promising to deliver crisper, clearer movies

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.