Keith Naughton

Stories by Keith Naughton

  • Secret Weapon

    As Nissan's new chief designer, Shiro Nakamura, walked among vintage Japanese sports cars jammed bumper to bumper into the Las Vegas convention hall, it was obvious how he earned the nickname "Fingers": he inspected each one of the sleek machines with respect, intensity and more close physical contact than you'd ever expect to see from a Japanese auto executive. Later that evening he demonstrated another unlikely skill: showmanship. At a dinner hosted by fiercely loyal fans of Nissan's Z-car, who have never stopped hoping that Nissan will resurrect the car it deep-sixed in 1996, Nakamura handed out illustrations depicting a sliver of rear tire, a bit of fender and a gas cap. "It was a tease, says "Mad" Mike Taylor, a Z-club head who organized the gathering. "But it was enough to whet our appetites. Everyone at the convention went crazy." Nakamura stayed late signing autographs.That was six months ago. Next week, at the Detroit Auto Show, Nissan plans to raise the curtain on its much...
  • A Mess Of A Merger

    It was supposed to be a quiet Sunday dinner between the top executive of Chrysler, Jim Holden, and his German boss, DaimlerChrysler chief Jurgen Schrempp. Sure, Chrysler was hitting some hard times, but Holden had just presented a turnaround plan to his top dealers in Detroit, and he was eager to share it with the top executives at DaimlerChrysler's headquarters in Stuttgart, Germany. But he never got the chance. On Nov. 12, Schrempp arrived at the executive dining room with written notes on how Holden had failed in his year as Chrysler's CEO, according to company insiders. "I'm on the hot seat," Schrempp said. "I have to do something decisive." Holden braced himself for the coming blow. "So I'm being fired," he said.With that, American control of Chrysler came to a startlingly abrupt end. When Daimler-Benz and Chrysler Corp. announced their $36 billion "merger of equals" in 1998, it was hailed as a marriage made in heaven. At the time, Chrysler was the world's most profitable and...
  • Motown Slowdown

    Each January in Detroit auto executives in black ties and sequined gowns turn out for a gala to celebrate the opening of the Detroit auto show. Affectionately dubbed the "auto prom," the glittering event is a must-attend affair for the industry's big wheels and rising stars. But as executives now make plans for the big social event, many are discovering they are losing a nice perquisite--their companies are no longer willing to pick up the $350-per-ticket cost. "We said, 'Hey executives, we pay you good money, we think you can afford to pay your own way'," explains General Motors vice president Bill Lovejoy, who will fork out more than $1,000 to take his wife and a few friends to the event. "We want to show our work force that we're tightening our belts. It's that monkey-see, monkey-do effect."After eight years of booming sales, Detroit is reluctantly preparing for the party to end. Thanks to a fast start in the first half of this year, the auto industry is expected to sell a record...
  • Growing A Green Plant

    In its day, Henry Ford's River Rouge manufacturing complex was a showcase of the Industrial Revolution. Huge freighters bearing freshly mined iron ore docked at one end of the mile-long warren of foundries and factories, while on the other end, as if by some industrial magic, shiny black Model A automobiles rolled off the assembly line every 49 seconds. At its peak in the 1930s, more than 100,000 workers labored at "the Rouge," and everyone from American presidents to school kids flocked to Dearborn, Mich., to marvel at Ford's vast creation. Today, however, the 83-year-old Rouge is a rusting relic of a bygone age and an environmental wasteland, its grounds covered with contaminated soil. And while workers still toil there to build Ford Mustangs, their surroundings are bleak and, at times, even dangerous. Last year an aging electrical powerhouse at the complex exploded, killing six workers.Now Henry Ford's great-grandson is initiating his own industrial revolution. But the one waged...
  • Safety First

    Nicole Heisman's car saved her life. Last June, on her way to a job interview in San Jose, Calif., Heisman, 20, swerved to avoid road debris, and her car flipped three times. As the VW Beetle began rolling, airbags in the seat back and steering wheel blew to cushion her, while the seat belt automatically tightened around her. "It was like being on a ride at Disneyland," she recalls. When the crumpled blue bug finally came to rest, passing motorists pulled Heisman out through the sunroof; she was shaken but unscratched. When Nicole's mother, Marleen Brodsky, arrived on the scene, "I thought, 'Oh, my God, how could anyone have survived this?' " Brodsky says. "Nicole's car held her like a cradle."Sound miraculous? You ain't seen nothin' yet. A new high-tech age of auto safety is dawning in which cars will protect us like armor in even the most violent crashes. Long before the Ford-Firestone tire recall mushroomed into one of the worst highway crises ever, safety had become the new...
  • Spinning Out Of Control

    When Lori Lazarus heard about the big Firestone tire recall last month, she was steamed, but not surprised. On Labor Day 1996, while driving home from Disney World, a Firestone tire on her Ford Explorer shredded. Her sport utility vehicle flipped into a drainage ditch along the Florida Turnpike, leaving her trapped underwater. She was saved by passing motorists who pulled her from the submerged SUV, but she still suffers from headaches and balance problems. The 31-year-old teacher is bitter that Ford and Firestone are only now owning up to the problem. "They've known something was wrong for years," says Lazarus, who filed suit against both companies in 1997.As the tire recall spins out of control, Ford and Bridgestone/Firestone have swung into full damage-control mode. Just a month into one of the biggest tire recalls ever, the companies are under mounting pressure to widen the recall of 6.5 million ATX and Wilderness tires. Critics want to know if the companies are guilty of a...
  • Contrarian At The Gate

    A few years ago, long after corporate raider Carl Icahn had amassed a fortune that reached into the billions, he was asked by a television reporter: "Why do you keep doing this?" His tart reply: "It's a way of keeping score."Now at 64, Icahn, the whip-smart kid from Queens, N.Y., who grew up to be one of the most feared predators of the go-go '80s, is shooting for his biggest score yet: General Motors. The company that Alfred Sloan built into the 20th-century model of American industrial power has become just another Old Economy laggard in the 21st century. Its stock price has sunk so low that the world's No. 1 automaker could be bought for around $37 billion, or about one fifth of what AOL paid for Time-Warner. So Icahn, who always had an eye for a bargain, fired off a terse letter to GM on Aug. 16 revealing his intention to buy up to 15 percent of the company.As if in a flashback to the greed-is-good decade, GM's board convened a special meeting to deal with Icahn. But they needn...
  • Throwing The Brakes On Tires That Peel Out

    In the early-morning hours of June 15, Nancy Dudley headed north out of Florida with her son Eric sleeping soundly in the back seat of her Ford Explorer. They were traveling to North Carolina, where 8-year-old Eric was to be ring bearer in a wedding. Suddenly, there was a loud bang from a blown rear tire. The Explorer lurched into the median of I-95 and began rolling over "for what seemed like forever," says Dudley. When it finally came to rest on its side, Eric was no longer inside. His mother found him by the side of the road in a pool of blood, his limbs broken and twisted. Hysterical, Dudley screamed at her unconscious child: "Baby, please hold on." Recalling that horrible sight, Dudley whispers: "He was just so maimed and distorted."Last Tuesday, as Dudley wheeled her brain-damaged son out of a Florida hospital for the first time since the accident, executives from Bridgestone/Firestone, Inc., and Ford Motor Co. announced a recall of 6.5 million tires like the one that blew on...
  • Ford Goes For The Green

    First Ford Motor Co. admits sport utility vehicles foul the planet and are a menace to society. Now it is promising to improve gas mileage by 25 percent on all its SUVs by 2005. Has Ralph Nader suddenly taken control of America's No. 2 automaker? Hardly. "The only thing I have in common with Ralph Nader," deadpans Ford's Lebanese-born chief executive, Jacques Nasser, "is that he has some Lebanese heritage."Ford's pledge last week wasn't driven by altruism alone. With gas prices hitting record highs and SUVs under attack, Nasser sees gain in transforming the image of Ford's models from guzzlers into sippers. He says customers will flock to Ford's promise to save $2,400 in fill-ups and 80 trips to the pump over the life of its SUVs. Not that Ford has any problem moving them. Its SUV sales rose 15 percent this year, and it expectsto peddle more than 1 million next year.But while Ford's success in SUVs is fueling record profits, it has also scuffed the company's reputation. The Sierra...
  • Bring On The Junk Food

    When Philip Morris agreed to pay nearly $15 billion for Nabisco Holdings last week, Wall Street pros were staggered by the price tag. But snack-food king Nabisco can thank diners like Andy Baze for the hefty tab. "Snack foods rock," says Baze, 29, "because they require absolutely no effort." The busy software engineer's idea of a square meal: a Premium Saltine cracker (made by Nabisco) smeared with peanut butter, followed by Chips Ahoy chocolate-chip cookies (also Nabisco), all washed down with a glass of orange juice. "Eating is an inconvenience," gripes Baze. "When I'm strapped for time, I just want to open something, stuff my face and go back to what I'm doing."While Philip Morris talked about "an important scale-enhancing opportunity," this deal is really all about snacking. America has become a Snack Food Nation. More than ever, "meals" are being consumed behind the wheel of a car in what food-industry experts call "dashboard dining." Americans wolfed down $50 billion in snacks...
  • Why Bill Has Become Microsoft's Mr. Rogers

    Bill Gates has a new sideline: company pitchman. During breaks from Shaq's domination of the NBA finals last week, the smiling, sweater-clad Microsoft chairman popped up frequently in television commercials for the software giant. He reassured computer users that "the best is yet to come" and pledged that Microsoft will continue to make "great software" that "will help your children learn." With its jangly folk-guitar soundtrack, high-tech-office backdrop and Gates's enthusiastic delivery, the commercial made it appear that times have never been better in Redmond.But looks can be deceiving. Gates's "Vision" commercial, full of optimism for the future, is part of a public-relations blitz aimed at countering the hard reality the company faces after its long antitrust trial. Two weeks ago Judge Thomas Penfield Jackson branded Microsoft an "untrustworthy" monopoly and ordered the company to be broken in two. Gates's warm and fuzzy new ad aims to convince consumers that Microsoft is not...
  • Living With Less Power

    Jimmy Lee was at the top of his game. Running the booming investment-banking business at Chase Manhattan, Lee worked 17-hour days, keeping six cell phones humming, while pulling together billion-dollar deals for clients like AT&T and General Motors. Nicknamed Jimmy Fee, he pocketed $20 million last year. Forbes magazine put him on the cover, crowning him "The New Power on Wall Street."But two weeks ago Chase chairman William Harrison shocked Wall Street by announcing that Chase was acquiring the small New York investment firm Beacon Group, and installing its founder, Geoff Boisi, as the new head of investment banking, Jimmy Lee's old job. But when Harrison added that Lee would remain Chase's dealmaking king, the shock turned to skepticism. Ceding power on Wall Street has never been viewed as a good thing. In that world of big money and even bigger egos, accumulating power is even more important than amassing wealth. When someone talks, as Lee did, of "spending more time with my...
  • Sofas For The Masses

    For Leslie Wilder, fashion is not just something you wear. It's where you live. In the past three years, she has spent $12,000 decorating her Seattle home with funky furnishings like a red art deco couch, a purple chaise longue and black cube end tables. But with home fashions changing faster than hemlines, the 33-year-old marketing exec hates spending a lot for furniture. So she was thrilled to stumble across a Web site for CB2, the new cheaper sibling of Crate & Barrel. "I like knowing that I won't have to go broke to fix a decorating faux pas."First there was shabby chic; now comes cheapie chic. Inspired by the success of the Gap's high-style, low-price Old Navy chain, Crate & Barrel and Williams-Sonoma, the houseware and furniture merchants that brought class to the masses, are now heading downscale. Crate & Barrel opened its first CB2 in Chicago in January and is planning to expand its flagship store by 60 percent. Next year Williams-Sonoma will roll out Elm Street,...
  • Vw Rides A Hot Streak

    When Carlyn Challgren moved to Los Angeles, she quickly fell into the California lifestyle--rock climbing, mountain biking, Rollerblading. But the one thing she lacked was a cool car. "I used to park as far away as possible so people wouldn't see what I drove," says the 35-year-old paralegal, who cruised L.A. in a rusty 1976 Oldsmobile. But after buying a cherry-red Volkswagen Jetta last fall, she is no longer ashamed to use the valet. An added benefit: "Now cute guys check me out.''Volkswagen is turning a lot of heads these days. Among America's Gen-Xers, VW's cars have become the wheels of choice. And they're not just embracing the cute-as-a-bug New Beetle. The young and fashionable are buying Jettas, Golfs, Passats and Cabrio convertibles, driving VW's sales up 35 percent this model year. That makes it one of the fastest-growing carmakers in the country, while many of its rivals struggle to move economically priced cars. VW connected with the elusive youth market by overhauling...
  • Is The 'Regis Look' Your Final Answer?

    Who wants to look like a millionaire game-show host? Apparently, millions of American men. The monotone shirts and shiny ties Regis Philbin wears on "Who Wants to Be a Millionaire" are creating the biggest men's fashion frenzy since Don Johnson slipped a pink T shirt under his white blazer. Forget business casual, guys want the "Regis Look" in shades of mustard and eggplant. "People from all over the country are calling," says Lou Melazzo, manager of Beau Brummel, the Manhattan store that outfits Philbin.Now Philbin wants to make a million, at least, off the fashion phenom he created. Coming to department stores in time for Father's Day: "Regis brought to you by Van Heusen," a line of shirts and ties that sell for $77.50 a set. Van Heusen expects to sell $50 million in Regis wear in the first year.But with Regis making monotone mainstream, will the look become a fashion victim? "Do I want to look like Regis?" says Channing Barringer, 28, an exec who fancied brown-on-brown tones. ...
  • Squabbling Like Children

    After Steven Hsiao's 81-year-old mother died in 1998, dividing her financial assets was no trouble. Her will dictated her estate be shared equally by her seven children. Yet when it came to cleaning out their mother's Washington apartment, the middle-aged siblings battled over lamps, furniture and even kitchen utensils. When Hsiao claimed a knife and bread pan, his older sister, Dorothy, lambasted him for stealing her memories. "I said, 'It's just a knife. It's not worth anything'," says Hsiao, 44, a professor at Johns Hopkins.With the help of bereavement counseling, Dorothy says she got over her anger at Steven. But much is still unresolved. Art work from their mother's native China remains in storage until tempers cool. "There's a lot of baggage and ghosts that come out at a time like this," says Dorothy. "You should be grieving together, but you go back to being the way you were as kids, and you start fighting."Family feuds like the Hsiaos' are breaking out all over. In a recent...
  • Did Kayla Have To Die?

    After A 6-Year-Old Kills His Classmate, The Search For Answers Raises Fears About Parenting And Guns. Untangling The Troubled Life Of A Little Boy.
  • Tired Of Smile-Free Service?

    Hustling off to work one morning recently, Ann Andraska pulled into her neighborhood gas station in Ann Arbor, Mich., for a fill-up. On her way to the checkout counter, the elementary-school speech therapist grabbed a Coke and a five-pound bag of ice. As she fumbled with the ice while trying to pull money from her purse, the cashier barked, "Would you put that stuff down! I need the money." Andraska did as she was told, and the clerk flung her change across the counter. Shocked by such rudeness, Andraska sighed. "If you want better service,'' the clerk growled, "go across the street.''The problem is, it's not likely to be much better across the street. It's no secret that service is abysmal, a fact confirmed last week by a new University of Michigan survey of customer satisfaction that puts an exclamation point on an unfortunate Econ 101 lesson: as unemployment has fallen to its lowest level in 30 years, it's tough to find good workers. And that's why customer satisfaction at fast...
  • Crunch Time At Kellogg

    Growing up in Cleveland, Terri Manns started her day with a bowl of Kellogg's Raisin Bran. But now, Manns's day begins with "pure chaos" as she rushes to get her two kids to school and herself to the office. "I'm lucky to make it to work," says the 37-year-old executive, "let alone sit in my kitchen and eat breakfast." On a good day, Manns manages to gobble down a bagel during her morning scramble. "If it can't be easily eaten with one hand while the other hand is on the wheel of the car, forget about it," she says.Americans' hectic new morning routine is wreaking havoc on Kellogg Co. Killer commutes (nearly an hour round trip in many cities) leave no time to fix even the simplest breakfast. Getting out the door is equally challenging for the 64 percent of families in which both parents work. More Americans than ever simply skip breakfast, according to new data from NPD Group, an eating-habits researcher. "People wish they could just get breakfast injected into them on the run,"...
  • Impress Your Friends, Flatten Your Enemies

    It's the top draw at this year's Detroit Auto Show: General Motors' new Hummer H2SUV, a smaller sibling of the gulf-war monster. Without losing its combat roots, the H2 packs in enough creature comforts to serve as a Humvee for the whole family. At $45,000, it'll require a serious splurge, but GM chairman Jack Smith told NEWSWEEK that the H3, a baby Hummer priced at a trim $20,000, is on the way.To accomodate off-road excursions, the panel features altimeter and inclinometer gaugesThe instrument panel's chrome gauges glow green like a radar at nightA voice-activated stereo comes with a six-CD changer, plus 10 speakers throughout the vehicleThe transmission shifter is designed to resemble the throttle in a fighter jetIn lieu of a keyhole, the dash has a red button marked 'fire.' Press it, and the H2 starts.GM's new H2: it's not your mom's Hummer Price: $45,000*Debuts:Engine:Gas mileage:*Estimated. Source: GM
  • Can Toyota Get Its Mojo Back?

    When Gretta Rose Bart went shopping for her first new car, she intended to follow her family's tradition of buying Toyotas. The 29-year-old learned to drive in her mother's Toyota Camry, which she says was "safe and practical." Instead, Bart drove away in a sleek white Volkswagen Jetta for $16,000. Why? "Toyota is a responsible, heavy car," says the San Diego kayak instructor. "But VW is carefree, light and fast."Once the wheels of Young America, Toyota is having a midlife crisis. Baby boomers began a love affair with Toyota three decades ago as they rebelled against the big, stodgy cars Detroit sold to their parents. The boomers' devotion made Toyota the most successful foreign model on the road, with the Camry cruising along as America's top-selling car for the last three years. But as its boomer buyers age, Toyota is beginning to feel trapped by the relationship. With the average age of Camry buyers approaching 50, the carmaker is desperately seeking Gen-Xers. Otherwise, Toyota...
  • When Cars Drive You

    It's 2050, and one quintessential American passion has withstood the test of time: we like to drive. So you decide to hit the open road and cruise across country. First you must unplug your car from your house. That's right: cars now run on electric fuel cells, those hydrogen-powered devices found only in rockets back in the 20th century. Your fuel cell throws off so much juice that it can fill the electrical needs of both home and car. Or, as Pete Beardmore, director of Ford's research lab, describes it: "Your car becomes the brain stem for controlling your house." (You'll have a home backup system when you take a trip.)You ease into your personalized driver's seat--which in a crash whisks you out of harm's way, eliminating the need for airbags--and you grab hold of the joystick. Steering wheels and pedals have gone the way of the buggy whip. All the movements of your car--accelerating, turning, braking--are now controlled by a joystick familiar to generations weaned on computer...
  • Cyberslacking

    With a new baby and a full-time job, Jill McGarr doesn't have time to cruise the malls this Christmas. Instead, she's cruising the Internet, shopping for gifts for her husband and 2-month-old daughter. Not owning a home computer, however, she's doing her online shopping at the Cleveland graphics studio where she works. Does that make her feel guilty? "Oh, come on," says the 28-year-old secretary. "I'm not cheating anyone. I'm a multitasker." After all, she says, everyone shirks at work sometimes. Besides, she says, "what's more beneficial? Talking on the phone to a friend or maybe becoming more computer literate because you're using the computer?"McGarr might be multitasking. But a new generation of cyberslacking workers are multishirking by spending hours a day frittering away time online. As e-mail and high-speed Internet access have become standard-issue office equipment, rampant abuse of computers in the workplace is making the water cooler look like a font of productivity. For...
  • Chewed Out By Mints

    Wrigley has a problem with bad breath. And it is playing out inside Brian Knott's briefcase. In one corner is the Ohio auditor's trusty tin of Altoids, the curiously strong mints that have sweetened his breath in stressful situations. In the other corner is a newcomer: Wrigley's Eclipse gum, which also packs a minty wallop. Says Knotts: "Eclipse is like Altoids with the gum factor added."Wrigley, for a century the Goliath of gum, has found its David in Altoids, whose irreverent ads transformed it from a forgotten, two-centuries-old British breath mint into a must-have accessory in today's hip cigar and coffee society. Altoids, owned by Philip Morris, have become so hot they've inspired a swarm of breath-deodorizing imitators. Now Wrigley is wading in with Eclipse, which debuted this summer and is its first new gum in five years. Shaped like a tiny white tablet, Eclipse is really a mint masquerading as a gum. And it aims to get back some of the business lost to the supercharged mints...
  • Hitting The Bull's-Eye

    Target stores' new marketing blitz brings new meaning to the term "fashion victim." After launching a series of ads this summer featuring Gen-X models in fashions dotted with its red and white bull's-eye logo, Target was deluged with calls from consumers eager to don the funky threads. The discount chain claims it never intended to sell the logo ware, but now it is rushing out a line of bull's-eye boxers, T shirts and PJs. Deadpans marketing chief John Pellegrene: "It's not meant to be the Ralph Lauren polo pony."For Target, it's all about building buzz for its unconventional blend of high-style offerings and low-rent prices. Discounters, such as Wal-Mart, became the darlings of the retail industry this decade as savvy shoppers refused to pay full price and spurned department stores. But Target disdains the typical approach of "stack 'em high, price 'em cheap and watch 'em fly," says consultant Candace Corlett of WSL Strategic Retail. Instead the discounter, regally referred to as ...
  • Speed Bumps Ahead For Suvs

    Royce "Butch" Myers has been a lifelong Chevy man. You could often find the Memphis money manager behind the wheel of a Chevy Blazer, tooling off to a turkey shoot along the Mississippi River. But when it came time to trade in his '94 Blazer this summer, Myers decided he'd had enough of Detroit. What did he buy instead? A $26,500 Toyota Tundra pickup. "I looked hard at the Chevy pickup, but it just doesn't stack up," explains Myers, 58. "It takes a city block to turn the Chevy, but the Toyota handles like a car."For Detroit automakers, Myers is more than simply one that got away. He's part of a trend that threatens Detroit's unparalleled prosperity. It might look like fat city in Motown these days, with record sales and profits expected this year. But buyers like Myers represent a problem that could make Detroit's money machine throw a piston rod. Automakers are facing a double whammy: sport utility vehicle (SUV) sales are slowing down and the Japanese are coming--again. But this...