Automotive News - May 18, 2020 - 28

28 * MAY 18, 2020

DESIGNERS

Bright backgrounds,
clothing are a no-no
continued from Page 4

by using special handheld color-correction
lights and jeweler lenses to inspect samples.
Red shirts are a no-no; bright colors could
reflect off the swatches and make testing difficult. They're also instructed to work in parts
of their home with neutral tones.
Still, the makeshift setup - common for
workers throughout the auto industry in the
age of COVID-19 - allows Ford's designers to
keep operating near full capacity, ensuring
both prototype and production vehicle programs remain on track.
"We've gotten a lot of positive feedback," Allen Brown, Ford's color and materials design
manager, told Automotive News. "I got a
sense that it was almost a sense of relief [from
suppliers] that we were still operating at capacity, engaging them and requiring them to
do stuff. It takes a little longer, but it's still
moving, getting the suppliers what they need

SCOUT

Dealer balances
store and baseball
continued from Page 4

just gone right now."
Growing up, Guest had no intention of joining the family business.
He did what he could to help out
during the summers, working as a
porter or in other jobs, but didn't pay
much attention to that world. His
passion was baseball.
Little did he know that the sport he
loved eventually would bring him
back home.
He went from a youngster who
tagged along to White Sox games
with his season-ticketholder father
to a college player good enough to be
drafted by the White Sox in 2004 after
stints at Purdue University and Saint
Joseph's College in Indiana.
He played in the club's minor

league system as an infielder for
three years, but Guest felt his talent
had carried him as far as it could. So
while he was still playing, he began
setting up his next career.
Guest would sit near the coaches
in the dugout during games to see
how they thought through certain
situations. He picked their brains
when possible.
He was released by the White Sox
in November 2006 but wasn't out of
the game for long. The Detroit Tigers
hired him the following February for
$500 a month as a baseball operations intern, before putting him into
scouting and developmental roles
the next year. He had a homecoming
in fall 2009, returning to Chicago as
the Tigers' Midwest scout.
Guest's father asked him to come
help out wherever he could. Dennis
Guest was looking for a fresh perspective, so Garrett, who didn't know
much about the industry at the time,
began immersing himself in dealer-

JAPAN

continued from Page 4

"We will not relent in our investment in development and facility for our future growth," Akira
Koga, Mazda senior managing executive officer,
said last week. "We will continue and step it up."
The disciplined approach contrasts with surgical cutbacks seen elsewhere in the industry.
Ford Motor Co. postponed its autonomous vehicle commercial services until 2022, for example, and General Motors shuttered its Maven
car-sharing service. Some suppliers also are reeling in projects as they shift to survival mode. And
it remains to be seen what road other Japanese
automakers will take. Nissan and Mitsubishi, for
instance, have warned of full-year losses.

Stores, suppliers
use livestreaming

continued from Page 8

vehicle maker, launched a video on a
wide range of auto websites. In the
video, the company used nail penetration tests to demonstrate how its

ship life while pulling double duty
with the Tigers.
He'd do his scouting reports and
interviews each day, then stroll
through the dealership and ask staffers about the operations. He raised
questions about why certain processes were handled the way they

CHANGE,
YEAR OVER YEAR

NET EARNINGS

$585.3 million
---- $273.6 million
---- $188.3 million

---- 86%
N/A
N/A

Source: Company reports; amounts converted from yen

For the time being, Toyota and Honda can afford their long-term perspective thanks to relatively solid finances, despite the sudden hit
from falling sales and suspended production.
Toyota is better prepared for a downturn today than it was during the 2009 financial crisis.
At that time, it had about $27.8 billion in cash
reserves. Today, thanks to Toyoda's aggressive
cost control and contingency planning, it has
about $74.2 billion.
Honda said it faces no cash crunch at the mo-

redesigned lithium iron phosphate
batteries are much safer than conventional batteries.
Car dealerships are embracing online marketing and sales. At the end
of March, nearly a quarter of dealerships surveyed were using livestreaming services for sales and
marketing, according to the China
Automobile Dealers Association.
Auto suppliers are also joining the

him confident that they can continue to work
effectively should the arrangement last into
the summer.
For now, the workers will continue to adapt
to their new normal. Some, Brown said, have

Name: Garrett Guest
Age: 37
Job 1: Vice president of South
Oak Jeep-Dodge-Chrysler-Ram
in Matteson, Ill.
Job 2: Assistant scouting
director for the Chicago White
Sox
Past: Drafted by the White Sox
in 2004 and played 3 years in
the minor leagues. Worked for
the Detroit Tigers from 2007
until taking a scouting job with
the White Sox in 2014.

Quarter ended March 31
Toyota
Honda
Mazda

LeBlanc, left, uses a jeweler's lens to look at samples; Brown employs a handheld color
correction light. Says Brown of working from home: "It takes a little longer, but it's still moving."

Baseball and cars

Virus grips Japan

Automakers spending
on R&D despite crisis

CHINA

to get the parts to go into the vehicle."
The early days of the work-from-home experiment were rocky, Brown said, as Ford attempted to redirect supplier deliveries to
workers' homes.
Ford also had to scramble to order and expedite delivery of $150 handheld lights,
which they had previously experimented
with in-studio.
But after the initial stretch, which Brown
described as a "shock to the system," workers
got in a groove.
The designers spend most days validating
samples, making sure the color on a Mustang's headliner, for example, matches the
color on the pillars.
They're also working with suppliers on vehicles further out in Ford's product pipeline,
creating new hues to sell alongside the Grabber Blue, Twister Orange and Race Red offered today.
Brown said his team is still evaluating when
it might safely return to the office.
"We're 80 percent functioning, but that 20
percent is needed," he said. "The team wants
to get back to do those things."
Still, the experience since mid-March has

were and sometimes was told that's
just how the dealership always did it.
The answer didn't sit well with
Guest, especially with the economy
still shaky after the Great Recession.
"I literally was introduced to the
business at the worst possible moment," he said, and with such little
room for error, he looked for ways to
make the dealership more efficient.
"I just started making notes for myself and eventually we got to the
point where it got really, really tight
and got really, really scary for a
while," he recalled.
Advertising was one area that
needed updating. Guest said the
dealership was too reliant on newspaper ads and needed to shift resources to the digital realm through
Google and social media. He ran this
game plan by his father, who was
hesitant at first.
"It was really, really hard for him to let
go of his instincts a little bit and maybe
get pulled in a different direction, but

ment and has sufficient credit lines as a backup.
Toyota CFO Kenta Kon said the company will
delay some new-model plans because of the
pandemic slowdown, but he said the overall
impact would be insignificant.
Indeed, Toyoda said the company would stay
steady with big R&D investments, such as the
Woven City "town of tomorrow" it is building
in the foothills of Mount Fuji.
Despite falling sales in the current fiscal year,
Toyota will keep R&D spending stable at ¥1.1
trillion ($10.2 billion). As a percentage of revenue, R&D outlays will increase to 4.6 percent,
from 3.7 percent.
"Recently we have planted the seeds of a new
Toyota," Toyoda said. "And for this kind of new
project, we will continue pushing the accelerator pedal."
Honda didn't give an outlook for its R&D outlays in the current fiscal year. But it spends an
even bigger share of its revenues on R&D than

digital push. Germany's ZF Friedrichshafen has started marketing aftermarket products through a livestreaming service hosted by Chinese
e-commerce giant JD.
VW executives say a new kind of
Chinese customer is emerging -
one eager to own a personal vehicle
to avoid the risks of infection on public transport. Many of those consumers, VW says, are first-time car buyers

had to explain to neighbors why FedEx and
UPS trucks were pulling into their driveways
multiple times a day.
"I think we've all become a little closer with
our delivery people," he said. a
to his credit, he did it," Guest said.
After a few years of working for free,
Guest took a leadership role at the
store. While he moved up at the dealership, he also switched baseball teams,
jumping to the White Sox in 2014.
He became Chicago's assistant
scouting director last year.
The dealership has continued making progress to keep up with the times.
Amid the pandemic, the store rolled
out FCA's new Online Retail Experience platform and has been delivering vehicles directly to consumers.
With so much on his plate, there
are times when Guest's phone rings
and dinner gets cut short. The nature
of both jobs means "there's no real
flow or schedule to it," he said.
But he has been able to keep the
two careers from overlapping. "I find
that the advantage of taking a 24/7
mindset," he said, "is, [even though]
it sounds crazy, you can kind of
space things out enough to where
they don't ever intersect." a

Toyota, despite being smaller. In the fiscal year
that ended March 31, it channeled 5.5 percent
of its top line into future technologies.
Mazda, which sold only 1.42 million vehicles
in the last fiscal year, compared with Toyota's
10.46 million, spent ¥135.0 billion ($1.25 billion) on R&D, or 3.9 percent of its revenue.
Both Toyota and Honda seemed upbeat about
recovery in the U.S., a top market for each.
Honda executives warned that a second or
third wave of coronavirus outbreaks, which
some health officials predict will arrive this fall,
pose a threat to stable market recovery. But
Honda began a gradual restart of its U.S. plants
this month, and showrooms are opening.
"Dealers have started operations gradually,"
Hachigo said. "On a national level, it may be
the summer, at the earliest, when sales activities return to normal." m
Naoto Okamura contributed to this report.

- which describes 60 percent of
China households.
"The lockdown will have a catalyst-like effect on the long-term
change towards digitization of sales,
services and marketing in our industry," VW China CEO Stephan Wöllenstein said in a LinkedIn post May 6.
"We have to make the connection
with customers, not the other way
around, and become a part of their

everyday digital ecosystem."
April's new-vehicle sales increase -
after 21-straight months of declines -
inspired Wöllenstein to write of sales
climbing "to the peaks again."
But his optimism is not widely
shared. In the first 10 days of May,
new-vehicle sales fell 14 percent
from a year earlier, according to the
China Association of Automobile
Manufacturers. a

https://www.linkedin.com/pulse/china-market-where-we-now-do-go-from-here-stephan-w%C3%B6llenstein?trk=portfolio_article-card_title

Automotive News - May 18, 2020

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