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Big 3 rivalry makes a Motor City comeback

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Big 3 rivalry makes a Motor City comeback

Outsider influence, rebound fray bonds forged during crisis

Christine Tierney / The Detroit News

Chrysler Group LLC hosted President Barack Obama at the automaker's Kokomo, Ind., transmission plant on Nov. 23, after days of meticulous preparations. As Obama took the opportunity to defend the government's $82 billion auto industry bailout, Chrysler announced it was raising its investment in its Kokomo facilities to more than $1.2 billion.

That same day, General Motors Co. workers let slip that GM was about to announce $163.2 million in investments in three Midwestern factories.

A week later, when GM announced it was hiring 1,000 engineers in Michigan, a spokesman for Chrysler said it, too, would add 1,000 employees.

Pure coincidence, executives at the companies said about the timing. But the tit-for-tat announcements suggest the sympathetic bonds forged among Detroit's automakers during their darkest hours in late 2008 and 2009 are fraying now that they're recovering.

Some industry insiders say the automakers are simply reverting to their old tactics, when public relations managers made a sport of trying to deflate the impact of a rival's announcement — or wedge their own way into the limelight.

But the tone also is changing because of fundamental differences in the industry, they say.

The old fraternity of top executives is gone now that Detroit's automakers are all run by outsiders.

And the Big Three label has lost its meaning. The U.S. automakers are neither as big as they once were, nor as united by common interests and rivals.

In the past year, Ford Motor Co. has increased its share of the U.S. auto market as rapidly as Japan's Toyota Motor Corp. has been losing it, after recalling millions of vehicles, mainly because of sudden acceleration concerns.

GM and Chrysler, meanwhile, may be on the mend, but they still face enormous challenges after their brushes with collapse.

"They may feel they have to fight and claw for everything they can get," said Jeffrey Caponigro, president of Caponigro Public Relations Inc., which has offices in Southfield and Tampa, Fla.

"Maybe they feel they have to be more street fighters than they were in the past.

They're struggling for survival."

In late 2008, as the economy plunged, Detroit's automakers banded together to seek help from the federal government.

Seated next to one another, the chief executives of Ford, GM and Chrysler told congressional panels that the failure of any of their companies could unhinge the parts supplier base and bring down the entire industry.

A public relations executive working for one of the U.S. automakers, who spoke on condition of anonymity, said the companies realized that by undercutting each other, they risked hurting the image of the industry as a whole.

Japan's automakers don't hammer each other publicly, this executive said, citing Honda Motor Co.'s silence throughout Toyota's recall crisis. "Honda knows it's part of Japan Inc."

Detroit's carmakers still work together when they have common interests, in such areas as emissions regulations.

But the closeness that developed during the downturn, when some even considered merging, was short-lived.

Ford, which had large sums of borrowed cash to weather the worst of the industry's decline, withdrew its request for government aid — and has pointed out repeatedly that it hadn't been rescued by the government.

Ford turned down requests for joint appearances with its crosstown rivals.

The Dearborn automaker also riled rivals by suggesting unflattering stories to reporters, nudging them, for instance, to check into GM advertising claims and whether U.S. taxpayer funds were going into the restructuring of GM's German subsidiary, Adam Opel GmbH.

"We arefocused ontellingthe unique Ford story to everyone," said Ford spokesman Mark Truby.

"It was andis importantthat consumers understandthat we havebeen transforming ourselves for the past several years with a solidbusiness plan and without Chapter 11 or an emergency government bailout."

At GM and Chrysler, the financial assistance came along with new boards and hard-nosed managers — from different industries in GM's case, and from another country in the case of Chrysler, which is now 20 percent owned by Italy's Fiat SpA.

Chrysler's new communications team says the company is not trying to upstage GM or anyone else.

In the case of the 1,000 new hires that made news the same day GM announced it would add 1,000 engineers, a Chrysler spokesman said the automaker had disclosed those plans in a recent conference call.

GM has come through a terrible time, when financial troubles, management turmoil and job cuts overshadowed any messages about new products or technologies.

Now the company wants to emphasize what it's doing right, said Selim Bingol, GM's new chief spokesman.

"We want people to know that we're delivering on this vision, to design, build and sell the world's best vehicles," he said. Bingol was brought in from AT&T Inc. by GM Chairman Edward Whitacre Jr., former chairman and CEO of the telecommunications giant.

What's different about the auto industry, Bingol said, is that it's one of the few industries concentrated in one place — the others he could think of being the entertainment business in Los Angeles and the financial services industry in New York.

"By having the companies all located in one place," he said, "you have this intense scrutiny of what's going on."

From The Detroit News: http://detnews.com/article/20101213/AUTO01/12130329/Big-3-rivalry-makes-a-Motor-City-comeback#ixzz180C6lrhj

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