[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 2 January, 2004, 11:14 GMT
Revving up for the Detroit motor show

Analysis
By Stephen Evans
BBC North America Business Correspondent

Chrysler worker
Daimler Chrysler has faced shareholder opposition

Anybody who's anybody anywhere in the motor industry will be swishing round the chrome and lights of the world's leading auto-show at the Cobo Arena on the banks of the Detroit river next week.

The North America International Auto Show - which starts on Sunday - is without doubt (despite what they say in Frankfurt or Tokyo) the premier event of its kind.

It takes place in Detroit, the birthplace of the mass-produced automobile, and still the home town of General Motors, Ford and Chrysler.

This year's show will be the usual up-front celebration but with deep-down reflection on what 2004 might bring.

Of the American Big Three, General Motors is in the clear.

Fundamentally healthy

It's not been easy for the company in an economy emerging slowly from recession, but, to reforge the rusty old phrase - "what's good for the American economy is good for General Motors".

Growth of perhaps 4% in the economy as a whole in 2004 will ease the squeeze on a company that seems fundamentally healthy.

Ford workers
Ford is hoping for a return to good fortunes

There will not be a corresponding confidence exuding from the areas of the hall devoted to Ford and Daimler Chrysler.

This will be the year when all those assertions of "it's been tough but we're getting it right" will be tested.

And if it transpires that the fabled corner that's perpetually being turned actually leads straight into a brick wall, then high executives will be victims of the crash.

Trouble for Ford?

Ford's difficulty is that the model of its North American revival is itself now looking flawed.

When Bill Ford took over as Chief Executive two years ago, he looked to Europe for answers.

He imported the executives and their ideas to do for the core market in the US what they had done for the family firm on the other side of the Atlantic: cut costs drastically but introduce exciting new models; lose unproductive capacity, make remaining plants much more efficient and above all flexible - but place more weight on good design and higher standards.

The snag is that the European template isn't looking so attractive.

Ford of Europe has lost around $1bn in 2003.

On track

Of course, a lot of that can be attributed to a slow economy, particularly in Germany, but on top of that Ford's new range of models has not enthused European drivers.

Ford's Chief Operating Officer, and the architect of the company's initial turn-round in Europe, says the corner has been turned - 10% of Ford's workforce in Germany, Britain and Belgium have gone; costs are down, presaging an upturn in sales.

At Ford's global headquarters in the Detroit suburb of Dearborn, the assertion remains that the company's recovery in North America is also on track.

It was a careful plan, they say, with milestones and scheduled targets that have been met.

It was never about a single magic solution, but about a range of improvements on both the cost and product side, and those targets, the company says, are being hit.

Happy marriage?

That kind of assertion is echoed across town at Chrysler - the new models are on the way, we've turned the corner (it might be the Detroit mantra of the past few years)

And yet doubts remain about whether Daimler Chrysler is a happy marriage.

Or even whether it was a marriage of equals at all.

The billionaire investor Kirk Kerkorian is asserting that he, as Chrysler's biggest shareholder, was misled into thinking DaimlerBenz plus Chrysler was a merger of equals rather than a take-over of the American company by the German one.

Litigation is costly in time and money and it diverts attention from what Daimler Chrysler's chief executive, Dieter Zetsche, would prefer the cameras to focus on, namely the new models on the way.

Big smiles

So at the Cobo Arena next week, there will be executives displaying big smiles but with dark thoughts hidden behind them.

The spring in some steps may be a little forced.

It seems a simple thing to say but being a successful car-maker is primarily about making attractive cars at attractive prices.

Ford and Chrysler both forgot that basic rule and have now remembered it - but have they remembered too late?


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific