Keith Naughton

Stories by Keith Naughton

  • FED UP WITH FILLING UP

    John Luber reached the breaking point when he took the family SUV for a fill-up recently and the pump didn't stop spinning until it hit $65. When the Cincinnati-area dentist got home, he sat down with his wife and did the math. With their GMC Yukon getting only 13mpg and gas at $2 a gallon, they discovered their monthly fuel bill was more like a car payment: $385. So last month the Lubers doubled down. They traded in one guzzling SUV for two sipping Hondas. The new math: the family gas bill is slashed nearly in half. "We don't miss the big SUV," says Luber. "Not at all."Pain at the pump is threatening America's long love affair with SUVs. Sales of large SUVs, which boomed earlier this year, fell 5 percent in April and May as pump prices soared. And that could be just the beginning. Neither two-buck gas nor the stress on SUVs is expected to ease up any time soon. Analysts warn that we shouldn't take comfort in the recent small drop in gas prices. What we're experiencing is not just...
  • AUTOMOBILES: CHINA HITS THE ROAD

    For decades You Xiaoyi rode a bike to his job at a state-run factory in China. In the 1980s he upgraded to a Beijing public bus. But today You, 70, owns his own factory, and he's ready for the ultimate status symbol of China's accelerating middle class: a new car. He test-drove Buicks and Audis but settled on a silver $15,000 VW Jetta. "Chinese aren't worried about Maoist ideologies anymore," he says, looking out over a sea of new models on a Beijing lot. "We're concerned only with making money."Voracious new capitalists like You are making China the hottest place in the world to sell cars. Last year China snapped up more than 4 million automobiles, surpassing Germany to become the world's third largest market. It is now poised to leap past Japan to the No. 2 spot--trailing only the United States. That's why giddy auto execs descended on the Beijing Auto Show this month. General Motors launched its Cadillac luxury line with a ceremony at the Forbidden City staged by filmmaker Ang...
  • MARTHA HOLDS OUT A HELPING HAND

    As her sentencing date approaches, Martha Stewart is searching for a way to stay out of jail--or at least get out of jail early. NEWSWEEK has learned that Stewart will seek to serve all or part of her sentence helping underprivileged women start their own businesses. She recently approached the Women's Venture Fund, a New York nonprofit, offering to work 20 hours a week teaching low-income and minority women to become entrepreneurs. She even created her own curriculum to teach the art and science of cleaning. "Can you imagine if we had graduates of the Martha Stewart cleaning program bidding for contracts cleaning Hilton Hotels?" WVF president Maria Otero told NEWSWEEK. Sources close to the case confirm Stewart's strategy.Martha faces long odds on transforming a felony conviction into a teachable moment. But she intends to ask U.S. District Judge Miriam Cedarbaum to shorten her jail time so she can work up to 1,000 hours at WVF. Last week Otero wrote a three-page letter explaining...
  • Trailblazer By Design

    Many fathers and sons bond over baseball. For Ed Welburn and his father, it was cars. Beginning when he was 2, Welburn and his dad would lie on the living-room floor of their Philadelphia home, scribbling away for hours. Dad, a car buff who owned an auto-repair shop, penciled long-nosed 1930s Duesenbergs, and little Eddie traced over them. Finally confident enough to draw on his own, Eddie, not yet 3, took down every book from his parents' shelves and scrawled cars inside their covers. When Evelyn Welburn discovered the graffiti in dozens of books, she didn't scold her toddler. "I told everyone, 'You should see what my little boy can do'," she recalls.A half century after leaving his mark in Mom's books, Ed Welburn, 53, is living his childhood fantasy: he's the new chief designer for the world's largest automaker, General Motors. Only the sixth man to hold that job in GM's 95-year history, Welburn also is the first African-American to run the design studio of any major automaker....
  • Hot Wheels: Chrysler's 'Poor Man's Bentley'

    Once Howard Sucher saw the audacious Chrysler 300 on the Internet, he had to have it. But the Chrysler dealer near his home in Boca Raton, Fla., told him he'd have to wait five months. So Sucher and his wife traveled 180 miles to get a $38,000 satin-jade 300C, the model with a steroidal 340-horsepower Hemi engine. Sherrie Sucher is giddy about a car that "looks like a Bentley" and gives her a break from the hulking family SUV. "I'm tired of driving around with all the drink boxes and diapers," she says. "I'll feel renewed in this car."Detroit has come out with plenty of hot SUVs and pickups in the past few years. But Chrysler is doing something Detroit hasn't managed in decades: generating buzz for a traditional car. You remember those things--they have four doors but no four-wheel drive. GM is also rediscovering cars, with models like the tasteful Pontiac G6. But in a culture that's big on the brash statement, car buyers like Chrysler's wild ride. After only a month on the market,...
  • TYCO TRIAL: IT WASN'T 'OK' AFTER ALL

    A juror in the Tyco case did not flash an OK sign to the defense during deliberations, NEWSWEEK has learned. Juror Glenn Andrews told NEWSWEEK that his fellow juror Ruth Jordan "did not do that. We talked about it. She does have this nervous tic and she fixes her hair all the time." The widely reported--but misinterpreted--gesture set off a firestorm that helped cause the collapse of the six-month trial of former Tyco CEO Dennis Kozlowski and ex-CFO Mark Swartz, accused of looting their company of $600 million. Prosecutors vow to retry the men.The villain of the Tyco trial became Jordan, a former schoolteacher and lawyer who was in seclusion after the mistrial. She was demonized on the Internet after The Wall Street Journal and the New York Post identified her as the lone holdout. But Andrews says there was plenty of disagreement in the jury room. "You had 12 different backgrounds all clashing," he said. "The responsibility doesn't fall on one person." By Friday morning, though, the...
  • BUSINESS: GETTING A BEAT ON BMW

    In the image-conscious luxury-car business, BMW has always been the car to beat. The Ultimate Driving Machine doesn't sell the best, but it laps the competition when it comes to cachet. Now, though, BMW is catching a little exhaust from two Japanese luxury lines that were once distant also-rans: Acura and Infiniti. Consumer Reports just slapped the $33,000 Acura TL on the cover of its annual auto issue, naming it the best upscale sedan on the road, nosing out the BMW 330i. And Car and Driver just judged the Infiniti G35 the No. 1 $35,000 sports sedan, also beating BMW. But it's not just the critics who are falling for the Japanese luxury duo's blend of high style and horsepower. Sales are up 27 percent at Acura and 18 percent at Infiniti this year, while BMW is down 2.3 percent. "I don't think I'll ever go back to a 3 Series," says L.A. Internet exec Seth Berkowitz, who traded in his Bimmer last month for an Acura TL.Now that Acura and Infiniti have the buyers, they've got to prove...
  • LAW: DEATH, OR LIFE IN A 'RUBBER ROOM'?

    Will Charles McCoy Jr., the man arrested in the Ohio shooting spree, face the death penalty? It's not an easy call. McCoy, 28, who surrendered last Tuesday in Las Vegas after a brief manhunt, is no Beltway sniper. The suspect, who is to be arraigned this week, is alleged to have taken mostly pot shots at cars, houses and schoolbuses. In 24 shootings, he's suspected of killing just one person, a 62-year-old woman. Authorities don't even classify the shooter as a "sniper" because he didn't use a high-powered rifle like the D.C. duo; McCoy's suspected of firing a 9mm pistol from highway overpasses.In order to qualify McCoy as "death eligible" under Ohio law, prosecutors have to prove he was intent on a killing spree, arguing that it was an act of terrorism or mass murder. That motive will be difficult to prove since McCoy's believed to be mentally ill. (His family says he suffers from paranoid schizophrenia; authorities suspect he stopped taking his medication.) Trucker Bill Briggs,...
  • ROLLING OFF THE LOT

    Here's a sign of economic resurgence: it's OK again to drive a Rolls-Royce. When Rolls introduced the lusciously appointed Phantom a year ago, the car dazzled and daunted in equal measure. It's not that the $320,000 sticker was a problem for a typical buyer (average net worth: $30 million). It's just that after all those business scandals, corporate fat cats didn't want to look quite so, well, fat. And the sheepskin carpets and champagne cooler seemed a tad excessive. Now, though, the well wheeled are ready to get their Rolls on. The imposing cruiser is sold out through June. "Everybody is getting over that image concern," says Rolls dealer Michael Parchment. Still, they don't want to be too flashy. Eight in 10 Phantom buyers get a conservative black or silver paint job. Not slugger Sammy Sosa. He went for "Cornish white." And took delivery, appropriately enough, on Christmas Eve.
  • MARTHA'S NEXT FIGHT: KEEPING HER JOB

    Martha Stewart is working hard to stay out of prison. After a visit to the probation office last Monday (to submit a urine sample, among other things), she sped off to tell the directors of her $250 million company that they still need her as a "creative force." After all, her new line of garden merchandise is flying off shelves, and her Turkey Hill furniture is selling briskly. (Never mind that CBS dumped her TV show and advertisers are fleeing her magazine.) Martha Stewart Living Omnimedia directors are expected to acquiesce, allowing her to remain in an unspecified creative role, though without her board seat.Remaining employed is a key to Martha's stay-out-of-jail strategy. At her June 17 sentencing hearing, Martha will argue that 550 jobs depend on her freedom, say sources close to her case. But legal experts doubt the gambit will work. "the idea that no one other than Martha Stewart can pick out matching place mats seems a stretch," says New York University law professor Harry...
  • SHELTER FROM THE STORM?

    Chiara Edmands strolled the pastel aisles of Kmart in Manhattan last week, filling her shopping cart with Martha Stewart kitchenware. She knows the domestic diva was just convicted of four felonies at the federal courthouse a few blocks away. No matter. Edmands just hopes Stewart's stylish, affordable housewares don't disappear. "I don't agree with what she's done," Edmands says as she selects a Martha chopping block, "but as long as she's around, I'll still buy."If Martha has it her way, she isn't going anywhere. With the guilty verdicts still ringing in her ears, Stewart is hard at work concocting a plan to stay out of jail. Sure, it's a long shot, but she's determined not to go down without a fight. After visiting the probation office last Monday (to submit a urine sample, among other things), Stewart sped off to persuade her board of directors not to abandon her. She insisted the $250 million company she created from scratch still needs her as a "creative force." After all, her...
  • Martha's Fall

    SHE WAS ALWAYS THE MASTER OF MANAGING HER IMAGE. BUT IN THE COURTROOM, SHE WAS AT THE MERCY OF HER LAWYERS AND THE JURY. HOW TEAM MARTHA BLEW IT, AND WHAT'S AHEAD
  • The World According to Trump

    JUST A DECADE AGO, HE WAS A PUNCH LINE, A COMBED-OVER RELIC FROM THE DECADE OF GREED. BUT HE'S BACK, AND BIGGER THAN EVER, THANKS TO HIS NEW HIT REALITY SHOW 'THE APPRENTICE.' WHY WE STILL LOVE TO OGLE HIS HOUSES, HIS HELICOPTERS AND HIS HAIR--AND TO HEAR HIM SAY: 'YOU'RE FIRED'
  • A DIVA IN DISTRESS

    It had been almost three hours since the last break in the Martha Stewart trial. The marbled federal courtroom in Manhattan was stuffy and the jurors were restless. The prosecution's star witness, Douglas Faneuil, had just given potentially damning testimony against Stewart and her stockbroker, Peter Bacanovic. And now the best defense lawyers money can buy were ready to carve up Bacanovic's former assistant. But the slight 28-year-old was no easy prey. He cleverly sidestepped their land mines. He even praised Bacanovic as "the best boss I ever had," while implicating him and Stewart in a conspiracy to cover up her suspicious ImClone stock sale. Bacanovic's lawyer, David Apfel, tried to paint Faneuil as the real liar. But Faneuil deftly deflected Apfel and put the blame back on Bacanovic and Stewart. "I felt I would be fired," Faneuil insisted, "if I didn't lie."Trials are about casting and calculations, and Faneuil's poised parrying on the stand last week offered surprises that are...
  • THE SOFT SELL

    During the third quarter of the Super Bowl on Sunday, 90 million viewers will get a break from the rough- and-tumble. A languid 60-second commercial will open with a middle-aged couple in side-by-side bathtubs on a mountain bluff, taking in a golden sunset. To the gentle strum of a jazz guitar, the spot slowly cuts to another couple canoodling at a coffeehouse. Then there's the pair riding off in a convertible, wind in their silver hair. Finally, a rugged husband lovingly startles the missus in the kitchen and drags her off for who knows what? It might look like a pitch for a dating service, but what's really for sale is sex. Or, more specifically, a sexual aid: Cialis, the latest impotence drug to take on Viagra. The Super Bowl ad, shown exclusively to NEWSWEEK, is laced with Cialis's biggest selling point--it works for up to 36 hours (the French call it "Le Weekender"). Sure, there's a mention of an unsettling side effect or two, like erections that won't go away, but overall the...
  • MARTHA'S MAKEOVER

    As Martha Stewart prepares to go on trial this month, she's carefully crafting a new, homespun image. Forget the high priestess of domesticity; she's now Martha From the Block. She took Barbara Walters on a stroll down the humble street in Nutley, N.J., where she grew up as one of six children. "I had to get up really early to use the bathroom," Stewart said in front of the tiny bungalow the Kostyra family called home. She also brought her 89-year-old mother on "Larry King Live" to serve Polish babka, and wished her host happy new year--in Polish. King was swept up in Martha's makeover. "The Stewarts," he barked to close the show, then corrected himself. "No, the Kostyras."As hard as she tries to recast herself as Martha Kostyra of the people, Stewart remains the poster CEO for corporate scandals. When she makes her entrance at the federal courthouse in Manhattan Jan. 20, it will be scrutinized on a continuous cable loop. Sources close to the case tell NEWSWEEK there's a good chance...
  • DETROIT'S HOT BUTONS

    In a darkened room deep inside Ford Motor Co.'s top-secret design studios, Elizabeth Baron slides behind the wheel of the $140,000 GT sports car. She adjusts her seat and reaches for the stick shift. Suddenly, Baron can't move. "Adam," she shouts to another Ford engineer, "could you toggle me, please?" Adam reboots a laptop and Baron is once again free to move about the GT's cabin. But it's not a real GT, and Baron is not exactly herself, either. She's actually sitting in a crude wooden car seat, wearing virtual-reality goggles and gloves, with 11 sensors strapped to her body. The high-tech gear, known as Digital Occupant, transforms the slender 5-foot-6 woman into a beefy 6-foot-5 man shoehorned into this lowrider. In her goggles, she feels like Ralph Kramden struggling to work the GT controls. "It's a pretty tight cockpit," she says. "I don't have much room."Detroit is finding itself squeezed in a new way. After two decades of chasing Japanese automakers' superior car quality,...
  • A New Campus Crusader

    Growing up in Georgia, Mary Sue Coleman was caught in the school-desegregation battle. After the Supreme Court's landmark Brown v. Board of Education ruling in 1954, hard-line segregationists threatened to padlock public schools before they would admit black students. So Coleman's father moved his family north to Iowa. "My parents were very scared," recalls Coleman. "They wanted to go to a place where public schools were supported."Nearly 50 years later, Coleman is still in the thick of the fight. But this time, she's president of the University of Michigan and writing the rule book on how to foster diversity. Last June, Michigan won its own landmark case when the Supreme Court upheld its affirmative-action policy for admitting students to its law school. However, the court struck down Michigan's undergrad admissions process, which, unlike the law school, awarded extra points to minorities to give them an edge. So U-M drafted a new undergrad application--one that many other colleges...
  • Finbarr O'neill: Revving Up A New Machine

    Finbarr O'Neill left Hyundai to become the CEO of Mitsubishi's American operations A year ago, Finbarr O'Neill was the auto industry's most unlikely success story. A lawyer by training and an Irishman by birth, he engineered a turnaround of Korean carmaker Hyundai that would make Lee Iacocca proud. Thanks to O'Neill's canny marketing of a 10-year warranty, Hyundai went from a punchline to a powerhouse and now outsells Volkswagen and BMW in the United States. And O'Neill had visions of catching Honda and Toyota by the end of the decade. "You no longer have to explain to your neighbors why you bought a Hyundai," O'Neill triumphantly crowed to NEWSWEEK when we featured him in our 2003 Who's Next issue.Now O'Neill has some explaining of his own to do. He stunned the car business in September when he exited Hyundai to try to repair a car wreck over at Mitsubishi. A hot brand for Gen Y, Mitsubishi hit the skids this year after selling too many cars to kids with bad credit. As the...
  • Three For The Road

    Robert Baller is an American everyman. The earnest 40-year-old software engineer works out of his stucco-style home in suburban Sacramento, Calif. He has a wife, a 13-year-old daughter and an 80-pound Labrador. But inside his three-bay garage is nearly a hundred grand worth of heavy metal: a Honda Civic, a Toyota minivan and a racy Nissan 350Z. "The Z is our date car," he explains. That's fine, but isn't three cars for two drivers a bit much? "Some people might think it's excessive," says Baller, "but our friends haven't said anything."If they have, they're probably scheming to get a third car of their own. These days a driveway that looks like a car dealer's lot is fast becoming the new suburban status symbol. A recent study from the Department of Transportation has confirmed what a drive through any suburban neighborhood would suggest: cars now out-number licensed drivers in American households. Nearly three out of 10 American driveways today are jammed with three cars, up 27...
  • Sedan Begone

    When he's on the road selling banking software, Mark Oliver of Houston typically rents a Ford Taurus. But recently he took a ride on the wild side: he splurged on a 2004 Cadillac DeVille. He rationalized spending the $75 a day on the luxury car--almost twice the Taurus's price--because he was squiring around important banking clients. But after dropping them off, he cruised around Dallas, enjoying the Caddy's cushy leather seats and fiddling with its 101-channel satellite radio. "It's a great ride," he says. Now that he's spoiled, Oliver's eying a Volvo for his next business with clients.Road warriors are driving golden chariots. With business travel finally showing signs of life, rental companies are attempting to jump-start the bottom line by offering dream cars for hire. The pitch: impress your clients by showing up for the meeting in a hot car. Instead of the usual bland-mobiles, business travelers can now pick from Jags, Land Rovers, T-birds and sports cars like the Nissan Z....
  • Road Test: Ford F-150

    As I nosed the brawny Ford F-150 into a jammed parking lot before a Detroit Lions game, the attendant sighed. "It's getting harder and harder to fit big SUVs like yours in my lot," he griped. Of course, the F-150 isn't an SUV. It's a pickup truck. But you can't blame the attendant for being confused. Driving the smooth, startlingly quiet F-150, I felt as if I were behind the wheel of a Lincoln Navigator. The interior is a work of industrial art, with elliptical vents that open with mechanical precision and a dashboard that appears to be held in place by thick steel bands (though they're actually textured plastic). It's comfy, too: my football buddies had plenty of room in its two rows of seats. But as stylish as it is on the inside, the F-150 is studly on the outside. Unlike the previous curvy F-150 (read: girly), the new model is an alpha truck. The raised hood and massive grille snarl, while the bed seems bottomless now that its slab sides have been raised to 18-wheeler height....
  • A Rebel With A Car

    Behold, the Nissan Quest. Awash in the glow from four skylights, the Quest was inspired, oddly enough, by the airy, contemporary homes of Frank Lloyd Wright and Ludwig Mies van der Rohe. Pebble-grain leather seats suggest sofas in a SoHo loft. A cylindrical pod, which houses the gearshift and stereo, juts from the dash like a postmodern entertainment center. But this is no sleek luxury car. It's a minivan. And to Quest designer Alfonso Eduardo Albaisa's kids, it's a place to play house. "It's hard to get them out of it," he says.Albaisa is not your typical gearhead. He washed out of car-design school in Detroit in the '80s when he was told his quirky look (Napoleon jackets, bleached white hair) didn't fit Motown's buttoned-down culture. He found refuge at New York's Pratt Institute, where he indulged his passion for furniture and boat design. Albaisa also has architecture in his blood: his father, a Cuban refugee, designed Richard Nixon's Miami home. But he'd given up on cars when...
  • Road Test: Nissan Quest

    I realized there was something different about the Nissan Quest when I drove it to my daughter's Saturday-morning soccer game. As we tried to leave after the match, we were blocked by a crowd of curious moms. They loved its racy looks and wondered how it handled with a full load of soccer players (who piled in while their moms fired questions). The answer: this is one hot minivan. Its edgy styling is complemented by a muscular V-6. Inside, the Quest feels like a loft, with four skylights in the roof. My kids liked the third row of seats, which steps up for theater-style seating. The second and third rows fold flat--a minivan first. My only problem: the gauges are mounted in the center of the dash, requiring an awkward glance to check your speed. Where you'd normally find the speedometer is a clip to hold a family photo. Cute, but not convenient. Still, Nissan is out to prove that soccer moms can also be sexy moms.Tip: Go for the leather interior with the pebble texture (a $1,500...
  • Business's Killer I.O.U.

    With car sales surprisingly strong, J. T. Battenberg III, CEO of auto-parts maker Delphi Automotive, would like to expand his factories and hire some workers. But he can't. And it's not because his products aren't in demand--Delphi makes the DVD players and satellite radios that are becoming the next big things in cars. He first has to deal with an ugly blemish on his balance sheet--a $4.1 billion shortfall in Delphi's pension fund. Three years ago the pension plan was fully funded, but it cratered along with the stock market. To fill that hole, Battenberg is shoveling some $600 million a year--about half of Delphi's available cash--into the fund. "It's a huge millstone," he grumbles. "We are delaying our expansion plans because our board suddenly has half the amount of cash you would normally have."Delphi is not alone. Huge pension liabilities are strangling corporate America, and execs say this new debt is choking off an economic recovery. Companies that offer workers traditional...
  • The Competition: Zero Is A Gm Hero

    General Motors CEO Rick Wagoner is a pretty laid-back guy. But after Ford and Chrysler execs kept carping that GM was driving Detroit off a cliff with its zero percent financing deals, he decided he'd had enough. Defending the discounts at a conference last winter, Wagoner barked: "It's time to stop whining and just play the game."The problem for Ford and Chrysler is that the zero-sum game is proving deadly. GM is peddling the best deals in town--steep discounts averaging $4,370 per car--and hot models like the Hummer H2 and the Cadillac CTS. Because it's Detroit's low-cost producer, GM earns profits in a price war--and builds market share--as Ford and Chrysler lose ground and money.While Chrysler takes the high road, Ford is heading down the dirt road with a new F-150 pickup. It will be followed by a parade of new models, like an edgy Mustang and $150,000 GT racer. But if the pickup doesn't sell, nothing else matters.GM doesn't have a "bet the company" model coming. But it is...
  • Chrysler Shifts Gears

    Pity the poor Chrysler execs at the Frankfurt Motor Show this month. They traveled to Germany to show off their steroidal new 300C Hemi luxury sedan and wagon. But the press wanted to talk only about Chrysler's fall from the Big Three after being overtaken by Toyota in August. With microphones shoved in their faces, the Chrysler brass tried to beat back rumors of layoffs, salary cuts and even speculation about the company's demise. "Nobody ever claimed this would be an easy road," a weary Chrysler CEO Dieter Zetsche told NEWSWEEK during a brief break from the frenzy. At that very moment, back stateside, Toyota execs basked in a two-day lovefest with their dealers at a convention center in Philadelphia. Former president George H.W. Bush was on hand to congratulate them. Ruben and Clay, the "American Idol" duo, serenaded the crowd, too. And for the grand finale, Elton John gave a private concert of his greatest hits. A crowd favorite: "Don't Let the Sun Go Down on Me."Toyota's...
  • Road Test - Infiniti Fx45

    Sometimes a wheel is just a wheel. As I drove around in the Infiniti FX45, with its long nose and huge 20-inch wheels, reaction divided evenly along gender lines. Guys loved the racy SUV and were awed by those oversize wheels; women scoffed. Said one female: "A man designed this, right?" Of course, that means I really liked this car. With a 315-horsepower V-8 under toe, it drove and handled like the Nissan 350Z sports car. (And that's no coincidence, since the FX is built on the same chassis as the Z.) The broad-shouldered, swept-back look is a welcome departure from the wimpy egg shape of so many car-based SUVs. The FX's aggressive, angular lines do have drawbacks: big blind spots in the rear. And the techie aluminum interior is rather sterile (though I liked the bomber-jacket leather seats). Still, this macho cruiser could be Arnold's next SUV. Now, if only Infiniti can convert the glove box into a cigar humidor.Tip: For 10 grand less, the FX35 packs a 280hp V-6 and sports only...
  • The Price Of Darkness

    The Blackout's Toll On The Economy May Be Small And Short-Lived, Thanks To Resilient Consumers And Some Lucky Summer Timing