Keith Naughton

Stories by Keith Naughton

  • Naughton: Obama's Tough Talk Backfires in Motown

    Nine years ago this week, Al Gore warmed up his run for the presidency by making a visit to Motown and speaking to the Detroit Economic Club. I covered that speech and recall that Gore was entering hostile territory. Detroit, an SUV boomtown in those days, was deeply skeptical of the vice president, who famously called for the death of the internal-combustion engine. But Gore, keen on endorsements from Big Labor and contributions from wealthy auto execs, changed his tune in Detroit. "Here in Motor City, we recognize that cars have done more than fuel our commerce," he rhapsodized. "Cars have freed the American spirit, and given us the chance to chase our dreams."My, how times have changed. This week, Sen. Barack Obama attempted to fuel his presidential run with a scalding speech to the Detroit Economic Club, castigating Motown's big wheels for driving our dependence on foreign oil. "For years, while foreign competitors were investing in more fuel-efficient technology for their...
  • Naughton: Big Labor Sure Isn't Dead in Detroit

    Last week in a crowded amphitheater at Chrysler’s Auburn Hills, Mich., headquarters, the carmaker’s CEO was having a hard time keeping the media on message. He was there, flanked by Michigan Gov. Jennifer Granholm and United Auto Workers (UAW) President Ron Gettelfinger, to announce $1.8 billion in new factories Chrysler is building in suburban Detroit. But all the reporters wanted to talk about was DaimlerChrysler’s plans to sell off the ailing American automaker, which lost $1.5 billion last year as sales of its SUVs tanked amid soaring gas prices. CEO Tom LaSorda, who is in the unenviable position of trying to drive a car with a couple of blown tires and a FOR SALE sign in the window, finally ran out of ways of steering around the question. “Maybe you should ask him,” he said, pointing to Gettelfinger. “He’s my boss.”When it comes to the sale of Chrysler, the union is in the driver’s seat. For starters, Gettelfinger sits on DaimlerChrysler’s 20-member Supervisory Board, the...
  • How Cars Define a Generation

    From their Beetles to their boxy SUVs, Americans who grew up in the '60s and '70s defined themselves by what they drove.
  • Naughton: Can Detroit Go Green?

    Inside New York’s massive Javits Center this week, the world’s automakers took the wraps off shiny new cars for hundreds of automotive reporters gathered from around the globe. But outside, in a cold downpour, a pair of environmentalists in mountain-climbing gear scaled the front of the steel and glass building and hung a banner criticizing a major automaker for its gas-guzzling ways. The 15-by-20-foot banner hung on the building for 35 minutes before police arrested the protesters and pulled it down. Who was the target of these “eco-warriors?” Toyota. That’s right, the makers of Prius, who have had such a good ride lately as the top seller of gas-electric hybrids. That’s all changed, though, now that Toyota is selling a big new Tundra pickup that gulps a gallon of gas every 17 miles. The banner from the Freedom From Oil activist group showed the Tundra slicing through the planet and made a sly play on its ad slogan, “The truck that’s changing everything.” The enviros edited the...
  • Naughton: Who Will Buy Chrysler?

    Las Vegas billionaire Kirk Kerkorian raised the stakes this week in the race to acquire Chrysler. His surprise $4.5 billion offer now puts pressure on the other bidders to top him. But even if the other deep-pocketed suitors offer more money, the nearly-90-year-old wheeler-dealer just might have an ace in the hole: Carlos Ghosn, Renault-Nissan's rock-star CEO. Last year, Ghosn and Kerkorian teamed up in an unsuccessful effort to get General Motors to become the American partner in Ghosn's Franco-Japanese auto alliance. Now, Chrysler could complete the global alliance that Ghosn continues to covet, analysts say. "I would not bet against the idea," says veteran analyst David Cole of the Center for Automotive Research in Ann Arbor, Mich. ...
  • For Chrysler, Dr. Z's Startling Prescription

    Remember those Chrysler commercials, where the mustachioed Dr. Z, with thick German accent, raved that Chrysler's cars have "the best of American and German engineering and design"? Apparently even the doctor couldn't make this transplant work. Last week Dr. Z--a.k.a. DaimlerChrysler chairman Dieter Zetsche--stunned Detroit by putting Chrysler on the block. "All options are on the table," he said, as the German automaker considers what to do with its American problem child. Just last fall, Zetsche insisted Chrysler wasn't going anywhere. But Zetsche said he "revisited" the issue after Chrysler lost $1.5 billion last year as $3 gas drove its SUV sales into the ditch. Now, while Chrysler chief Tom LaSorda attempts a repair job by cutting 13,000 workers and engineering more fuel-efficient models, DaimlerChrysler has hired JPMorgan to shop for suitors. Late last week reports emerged that GM is in talks to buy Chrysler; both companies declined to comment. Other possible buyers: Nissan...
  • The Last Van Standing

    When Chrysler designer Ralph Gilles first became a family man, he wasn't ready to drive a dowdy minivan. So he pimped out a '99 Dodge Caravan with big wheels, dual racing stripes and a monster engine. "I thought, 'If I'm going to have a minivan'," he says, " 'I'll have it my way'." Now Chrysler is letting him have his way with its entire minivan lineup, injecting some style into what is essentially this generation's station wagon. The Chrysler Town & Country and Dodge Caravan that will be unveiled at this week's Detroit Auto Show sport the big rims, blinding chrome and massive grilles that are a hallmark of Gilles's designs. Far from egg-shaped eyesores, these minivans are direct descendants of his 300C sedan, a car so cool that 50 Cent drives one. "We asked ourselves, 'How can we sprinkle some of the magic bling dust from the 300C on the minivan?' " says Gilles.Chrysler badly needs a sequel to its 300C, a blockbuster when it was introduced in 2004. The company lost about $1.2...
  • Driving Forces: Driving Through the Looking Glass

    Greetings from the Alice in Wonderland Auto Show in Detroit. On one end of this city’s aging conference center, General Motors, maker of the hulking Hummer, is generating buzz with its 150-miles per gallon hybrid electric concept car, the Chevy Volt . At the other end, Toyota, best known for its gas-sipping Prius, has rolled out an enormous pickup truck that will guzzle a gallon of gas every 17 miles or so. The car business, it seems, has driven through the looking glass.As strange as all this sounds, 2007 is the year of role reversals in the car business. After all, this is the year when most analysts figure Toyota will overtake GM to become the world’s largest automaker. But GM—emboldened by signs of a nascent comeback—isn’t conceding. “We’re not giving up just because somebody got a calculator for Christmas and worked some numbers,” says GM CEO Rick Wagoner. “This is going to be a dogfight.” Toyota, meanwhile, is so worried about a patriotic backlash from U.S. consumers that it...
  • Honda Primes the Pump

    Falling gas prices have taken some of the steam out of hybrid car sales lately. But you wouldn’t know that from all the buzz about hybrids at the opening day of the Detroit Auto Show. First, GM introduced its Chevy Volt plug-in hybrid concept . And then Honda CEO Takeo Fukui revealed in an interview with NEWSWEEK that his company is developing an all-new small hybrid car that he described as a five-passenger version of its quirky two-seater, the Insight gas-electric car. But unlike the Insight, which sells in small numbers to die-hard greenies, Fukui says this new Honda hybrid will be aimed at mainstream car buyers when it hits the road in two or three years. “Hybrid technology is very strong and proven technology for improving fuel economy,” he says. “And we won’t relent in our efforts.”For Honda, this new hybrid could finally be the answer to the megawatt popularity of the Toyota Prius, which controls more than half the market for hybrids in the U.S. Even though the Honda Insight...
  • Average Joes Are Now Going Green

    Five years ago Bill Ford said selling a green agenda was an uphill fight. Now, says the Ford Motor chairman, it's catching on inside his company and worldwide. He spoke with NEWSWEEK's Keith Naughton. Excerpts: ...
  • Auto Industry: GM Loses Its Back-Seat Driver

    Struggling General Motors had some good news lately, with its sales rising 6 percent in November and the debut last week of its curvaceous new Buick Enclave. But for besieged CEO Rick Wagoner, the best news had to have come Thursday, when Las Vegas billionaire Kirk Kerkorian cashed out his final 28 million shares of GM stock. In the course of a week, Kerkorian--whom analysts believed was gunning for Wagoner--went from being GM's largest individual shareholder to just another outsider the Detroit establishment ran off the road.Now GM has to keep moving forward--even without Kerkorian as back-seat driver. GM is farther down the road to recovery than its crosstown rivals, who are hemorrhaging billions while GM is merely losing millions. And analysts say Wagoner owes some thanks to Kerkorian for that. Sure, the two probably parted ways because Wagoner wouldn't go along with Kerkorian's ambitious plan to align GM with France's Renault and Japan's Nissan, creating a car colossus...
  • Periscope

    If Lebanon flares into civil war, once again, the spark may well ignite inside the minority Christian community.This threat has been obscured by the rising tension between Shiites and Sunnis. Crowds poured into central Beirut last week, seeking to topple the government. By demanding more power for the bloc allied with the Shiite forces of Hizbullah, the crowds threaten the 16-year-old agreement that ended the last civil war by dividing influence among Lebanon's dueling sects. U.S. Ambassador to the U.N. John Bolton called the rallies "part of the Iran-Syria-inspired coup."That may be missing the hottest flashpoint. Entrenched in the pro-Hizbullah crowd last week were thousands of Christian supporters of Michel Aoun, an Army commander during the civil war who has made no secret of his presidential ambitions. Since returning to Lebanon last year after more than a decade in exile, Aoun has forged a political alliance with Hizbullah, with his eye on the presidency. He's now widely seen...
  • No Jolly Holiday for Wal-Mart

    Jamie Bartosch used to be a Wal-Mart regular. Several times a month, the Arlington Heights, Ill., mother would drop $100 or more at her local Wal-Mart to stock up on staples like diapers, milk and cleaning supplies. Last Christmas, many of the gifts under her tree came from Wal-Mart. But that won't be the case this year. She's begun to notice other retailers matching Wal-Mart's low prices. And she's happy to shop the competition, rather than suffer through what she views as Wal-Mart's downscale atmosphere. "Why endure the crowds, the clogged aisles and the riffraff?" says Bartosch, 39. "Why not just go to Kohl's or Target and get the same things for the same prices?"It's turning into a blue Christmas for Wal-Mart. While many of its rivals ring up healthy holiday sales, Wal-Mart is struggling. In the critical shopping month of November, the nation's largest retailer suffered its first decline in same-store sales in more than a decade. And December isn't shaping up to be much better....
  • Average Joe Goes Green

    Five years ago Bill Ford said selling a green agenda was an uphill fight. Now, the chairman says, it's catching on inside Ford and worldwide, as other big businesses take leadership roles. He spoke with NEWSWEEK's Keith Naughton. Excerpts: ...
  • Kerkorian Cashes Out

    With Kerkorian Gone, What Now for GM?General Motors CEO Rick Wagoner tried to generate some good news for his struggling company this week. On the eve of the glitzy L.A. Auto Show, he rolled out the curvaceous new Buick Enclave crossover utility vehicle with help from Tiger Woods. Then he fended off a heckler while delivering a speech on how GM is going green, developing cars that run on hydrogen, as well as gas-electric hybrids that can plug into a wall socket in your garage. But for Wagoner, who’s been under siege for more than a year, the best news of the week came Thursday, when Las Vegas billionaire Kirk Kerkorian cashed out his final 28 million shares of GM stock. In the course of a week, Kerkorian—who analysts believed was gunning for Wagoner—went from being GM’s largest individual shareholder to just another outsider the Detroit establishment ran off the road. “Rick will sleep very well this weekend,” says the veteran auto analyst David Cole, a longtime friend of the GM...
  • Three for the Road

    When Detroit's Big Three chieftains emerged from their long-awaited, oft-delayed meeting with President Bush earlier this week, there was a telling moment at the end of their press conference in the White House driveway. Their handlers told reporters that the three bosses of America's ailing auto industry would take no more questions and began leading them away. But Alan Mulally, Ford's new CEO, wasn't done yet. Before he could be whisked off, Mulally stepped up to the microphone to clear the air. "The question was asked, are we interested in a bailout?" he said. "Absolutely not!"That's good, since President Bush, who chided American automakers earlier this year for not making "relevant products," has shown little desire to ride to Detroit's rescue. Indeed, after the White House meeting Tuesday, Bush expressed confidence that the shrinking Big Three can make the "tough choices" necessary to heal their companies on their own (read: lots of layoffs and factory closings). And the only...
  • Putting Detroit in the Shop

    Bob Wiley has always driven Detroit iron. So when the 62-year-old retired Air Force man decided this year to trade in his Ford pickup truck for a more comfortable car, he test-drove Ford and Buick sedans. But he was turned off by bland styling and worries about reliability. His son suggested he try a Toyota Avalon. Wiley was wary. "That's nothing but a damn Camry with a skirt," he said. Then he drove an Avalon. "Wow, this thing's a rocket," he said as he raced to 75mph in a blink. "And it's like you're in a crypt it's so quiet." Best of all, the Avalon gets 31mpg highway, perfect for those long trips to see the grandkids in Texas. Just that quick, Detroit lost another customer. "Detroit, are you listening?" asks Wiley. "Why can't you build me a peppy yet economical car like the Avalon?"Detroit might have a hard time hearing any more bad news after the week it just had. The Big Three--nowadays known as the "Detroit Three," since Toyota will soon be the world's No. 1 automaker--posted...
  • The Great Wal-Mart Of China

    In the grocery section of a big-box store in north Beijing, shoppers struggle to catch a bargain. And a fish. "We'd still rather pick it out ourselves," says law student Guo Jiao, as she and a friend repeatedly plunge fishing nets into a tank full of slippery grass carp. Other shoppers with nets mob serve-yourself tanks swimming with crabs, clams and eels. Nearby, Yang Fuming has already landed his fish and carefully watches a clerk gut it. Once his fresh catch is eviscerated, Yang takes the bloody bag of still-convulsing carp and drops it into his shopping cart beside a pair of duvets he's buying to cover his sofas, and a new kitchen apron. "I come here every day or two for the fresh stuff," says the retired physicist. "They've got everything you need."Such is life in the Great Wal-Mart of China. Recognize the place? For Wal-Mart, China represents the biggest frontier since it conquered America. China's voracious consumers are pushing retail sales to a 15 percent annual growth rate...
  • One Rich Ragtop

    As the sun sets on Golden Vineyards in Napa Valley, I wind my way through mountain switchbacks and become lost. And I couldn't care less. I'm too enthralled by the power and the glory that is the Bentley Continental GTC. At one point, a road sign warns: ROAD NARROWS AHEAD. And I wonder: how can it get any narrower? But not to worry. No matter how tight and twisty my path becomes, this sleek silver convertible propels me confidently upward into the hills. And I'm in heaven.Oh, sure, I know what you're thinking. It's easy to adore a $190,000 luxury car. But actually many high-strung thoroughbreds can be downright quirky. A Lamborghini's awkward and aggressive high-tech driver's seat once literally tore the jacket off a friend's back. He had to take the car back to the dealer to extricate his coat. But this Bentley drop-top, like its coupe and four-door siblings, requires no special pampering. In fact, it pampers you, cosseting you in firm leather seats. The burled walnut covering the...
  • A Smooth Ride

    The rapper Xzibit made his name customizing cars. But when it came time for the host of MTV's "Pimp My Ride" to purchase his most expensive car ever, he didn't change a thing. His $200,000 gray green Bentley Continental GT came fully loaded straight from the factory with hand-stitched baseball-glove leather seats and a massive 12-cylinder engine. "There was no pimping required," says Xzibit. What was required, though, was some restraint on the road home to L.A. from San Francisco, where he bought his Bentley a few months ago. But Xzibit couldn't resist putting that 552-horsepower engine to the test. Before he knew it, he was doing 120mph and a police car was coming up in his rearview mirror. Fortunately for Xzibit, the cop was a car enthusiast. "I've never seen one of these on the road before," the cop gushed, says Xzibit, who adds: "He only wrote me up for going 80, which was a lifesaver."Bentley has gone through its own lifesaving experience in the past eight years. A threadbare...
  • Let’s Make a Deal

    When I interviewed General Motors CEO Rick Wagoner two days before his first meeting with Renault-Nissan CEO Carlos Ghosn this summer, it was clear that this was an unwilling bride being forced into a shotgun marriage. “There’s a lot of aspects of all of this that haven’t been normal,” Wagoner said, referring to how his hand was forced into negotiating with Ghosn by GM’s big and restive shareholder, Las Vegas billionaire Kirk Kerkorian. “It’s not the way I would have done it.” In the end, though, Wagoner got his way when alliance talks collapsed this week.But Ghosn still might find a willing partner across town in Detroit. Bill Ford struck a much more conciliatory tone when I asked him Aug. 31 if he was interested in forming an automotive alliance. “We’re certainly open to that,” he said. “I think a focused Ford Motor Co. with the geographic reach that we have would make a strong partner for anybody.” And what did he make of Renault-Nissan’s superstar CEO, whom he’d previously...
  • Q & A 'We Understand We're in Trouble'

    Talk about your Motown meltdown. The full-throttle crisis afflicting General Motors has suddenly moved across town to Ford Motor Co. It's not that GM is fixed, it's just that Ford is more of a wreck at the moment. It lost $1.4 billion in the first half of the year as rising gas prices drove down sales of its SUVs and pickup trucks. What's worse, analysts don't see hot new models riding to Ford's rescue any time soon. Sure, Ford hopes its Edge wagon coming later this year will help. But this fall, the new model in Ford's showrooms is a supersize version of its already jumbo Expedition SUV (14mpg city).With car buyers steering clear of guzzlers like that, Ford's biggest engineering project now is coming up with a new business model that's less dependent on big gulps. The chief mechanic of that job: CEO Bill Ford Jr., 49, great-grandson of the founder. This month, Ford will roll out his second fix-it plan this year, which analysts expect to cut deeper and move faster than his earlier...
  • Matchmaker

    In mid-July, Boeing executive Alan Mulally received an unexpected phone call from someone who had recently become a trusted adviser: former House Democratic leader Dick Gephardt. The career pol asked the career Boeing man: would you be interested in running Ford Motor Co.? Mulally was shocked and more than slightly skeptical. He is, after all, no car guy. Mulally spent 37 years at Boeing, rising to the top of its commercial airline division. Besides, Bill Ford Jr., great-grandson of Henry, already held the CEO job at the automaker, which was still firmly controlled by its founding family. But Gephardt—who’d also recently become a confidant of Bill Ford—insisted. “This is not just about you or Ford, it’s about the country” Gephardt told Mulally. “It won’t hurt you to go talk to them.”So began a whirlwind courtship that culminated Sept. 5 with Mulally and Bill Ford walking onto a stage in Dearborn, Mich., to announce that the fly guy was to become Ford’s new driver. That dramatic...
  • Hot Wheels

    It's the week before finals at Texas A&M University, and cramming for exams is in high gear. But just outside the student center, a half-dozen cars are parked in a row beneath the shade trees surrounding A&M's iconic Rudder Fountain. The cars are tricked out with hot paint jobs and cool wheels, but this isn't some car company's slick marketing display. This car show--the fifth on campus this semester--is the handiwork of A&M's burgeoning Sports Car Club. And it's putting a crimp in the studying as students slow down to check out the hot rides. The star of the show is a silver '75 Firebird with black racing stripes owned by club president Benton Hodges, a senior communications major. His car is such a head turner, several female students have even--he says--offered him some back-seat action in exchange for a ride. "I tell them, 'No, thank you, I have a girlfriend'," he says.There are still plenty of college kids who are happy to drive a junkmobile. And at city schools,...
  • I'm the Right Guy for GM'

    On the Friday morning before all of General Motors was to go on its Independence Day holiday, a surprise letter hummed over CEO Rick Wagoner's fax machine. It was from GM's largest individual investor, 89-year-old Vegas billionaire Kirk Kerkorian. And though it was addressed to Wagoner, the June 30 missive was simultaneously telegraphed to the world in an SEC filing. Kerkorian, growing impatient with Wagoner, decided to shake things up by outing top-secret talks he'd initiated to arrange a shotgun marriage between GM, France's Renault and Japan's Nissan. Wagoner, who had just learned of the talks a few days earlier, was stunned. "Well," he recalls thinking ruefully, "this looks like something else we'll have to deal with." He immediately cleared his schedule and got his board on the phone to inform it of a deal that could create a colossus controlling one quarter of the world's auto sales. But he wasn't happy that sensitive negotiations would now be conducted...
  • 'I'm the Guy to Run GM'

    Over dinner in Detroit last Friday night, General Motors CEO Rick Wagoner and Renault-Nissan chief Carlos Ghosn discussed concocting a car colossus that would control one quarter of the world's auto sales. But for Wagoner, the dinner was a blind date. Last month GM's largest shareholder, 89-year-old Las Vegas billionaire Kirk Kerkorian, broadsided the GM boss with a proposal for the three-way auto alliance. Impatient with Wagoner's efforts to turn around GM, Kerkorian and his adviser, GM director Jerry York, met secretly with Ghosn (rhymes with phone) for six weeks before going public with the idea June 30. Many believe Kerkorian is trying to shove Wagoner out of the driver's seat and install Ghosn, an automotive superstar revered for bringing Nissan back from the grave. Before the Friday meeting, Ghosn insisted: "I'm not interested in his job." That's fine by Wagoner, who is not ready to give it up. He's moving to take control of the situation by being GM's point man in the talks,...
  • ‘The Craziest Thing I’ve Ever Heard’

    General Motors CEO Rick Wagoner felt like the turnaround he’s struggled to engineer was finally gaining some traction when he was broadsided last month by a proposal to marry the U.S. automaker with France’s Renault and Japan’s Nissan. The radical idea came from Kirk Kerkorian, the 89-year-old Las Vegas billionaire who is GM’s largest individual investor, and Kerkorian’s right-hand man, Jerry York, the former Chrysler and IBM executive who now sits on GM’s board. The two have grown impatient with Wagoner’s efforts to fix the ailing automaker, which lost $10.6 billion last year. So they secretly approached Renault-Nissan’s superstar CEO Carlos Ghosn. The proposed deal, which Kerkorian sprung on Wagoner and the world in late June, could create a car colossus that would control one quarter of the world’s auto sales. It also could shove Wagoner out of the driver’s seat and give Ghosn a chance to jump start GM as he did Nissan.Not so fast, says Wagoner. He jammed the brakes on the deal...
  • Tailing the X-Commuter

    The drive to get out of big cities is turning the United States into a land of nomads. "Extreme commuters" who travel more than 90 minutes to work, one way, are the fastest-growing group of commuters, according to the U.S. Census Bureau. They are also an increasingly important economic force shaping everything from real-estate markets to fast-food menus.More Americans than ever are willing to trade time in their car for the dream of a big house and a big yard. Nearly 10 million people now drive more than an hour to work, up 50 percent from 1990. Many are doing what California real-estate agents call "driving 'til you qualify" for a mortgage. In places like southern California, each exit along the interstate saves you tens of thousands of dollars.Companies are rushing to soak up some of that savings. Americans today eat an average of 32 meals a year in their cars, according to researcher Harry Balzer at the NPD Group. And they order one in four restaurant meals from the car. So...
  • Auto Nation

    Last year, I wrote an article that identified Toyota's relentless rise in the United States as being the real source of General Motors' problems. At the end of the piece, I put a wry twist to the old axiom that what's good for GM is good for America. "With a new automotive order emerging," I wrote, "it may not be long before someone in Washington—or even Detroit—observes: 'What's good for Toyota is good for America'."  I got the location wrong, but something close to those words appeared two months later in a piece by New York Times' Pulitzer Prize-winning columnist Thomas Friedman, headlined "AS GOES TOYOTA ..."  In that column, Friedman said he was rooting for GM to go bankrupt, explaining: "The only hope for GM's autoworkers, and maybe even our country, is with Toyota. Because let's face it, as Toyota goes, so goes America."Since then, GM actually has appeared to teeter close to bankruptcy, as it suffered through $10.6 billion in losses last year and announced plans to cash out...
  • Periscope

    It isn't easy being Mahmoud Abbas. As if the Palestinian president weren't wrestling with enough problems, last week Israel gave him one more headache, when an errant artillery shell killed seven civilians on a Gaza beach. Abbas vowed to go ahead with his referendum on a peace plan crafted by jailed Palestinian leaders--one that would recognize Israel if it withdrew to the 1967 borders. But at the same time, Hamas militants resumed attacks against Israel for the first time in 16 months, and even Abbas was forced to condemn the beach tragedy as a "bloody massacre"--not exactly an ideal bumper sticker for his referendum campaign. And Israeli leaders also now seem determined to scuttle Abbas's plans, which they portray as unrealistic. Last week Prime Minister Ehud Olmert told a British newspaper that he considers the vote a "meaningless" exercise and an "internal game."Olmert was being diplomatic. A better description of the increasingly savage power struggle between Hamas and Fatah:...