2008年12月26日星期五

Detroit Car Show Hit by Industry's Gloom

The North American International Auto Show usually gives this downtrodden city an annual chance to celebrate with glitzy parties and celebrity sightings. But with two of the three U.S. auto makers on financial life-support from Washington, 2009's show is shaping up to be a scaled-back affair.
The show, which opens to the media Jan. 11, comes amid further signs of gloom in what already ranks among America's most depressed cities. Cultural institutions are cutting back. Charities are facing bleak times as big backers including Detroit's car manufacturers become pinched for cash. Detroit's struggling local newspapers plan to stop home-delivery soon on most days of the week.But perhaps the most visible sign of drearier times will come in January at the car show. Carpenters and caterers are feeling the brunt as manufacturers scale back exhibits and parties. The show's economic impact on Detroit will be about $350 million -- some $100 million less than 2008's show, predicted David Sowerby, portfolio manager and market analyst for Loomis, Sayles & Co., an investment-management firm.
Tony Hines, a 54-year old carpenter from Detroit's west side, lamented the city's troubles during a break from preparing auto-show exhibits at the Cobo Hall convention center. "We had like 700 tradesmen here last year. This year, we have maybe 200," he said. "You see your job just kind of dwindling away."
General Motors Corp., which like Chrysler LLC has won loans from the government, plans to use more carpet instead of more-costly tiles and hardwood floors for its exhibit. The company also will use reuseable aluminum wall supports instead of steel, said Timothy Peters, GM's assistant director of auto shows and operations.BMW AG, like some other exhibitors, won't build a traditional second-floor hospitality area at its show-floor stand this year, a spokesman said. Auto makers use such areas to serve food and beverages and attract journalists for interviews. Honda Motor Co. plans to reveal its new Insight hybrid car but won't hold a dramatic news conference with flashy lighting and graphics, said Ed Miller, a spokesman. "We'll still have steak, but we won't have the sizzle," he said.
Auto makers declined to say how much they would save by scaling back their displays and new-model unveilings. But a person familiar with show-planning costs said GM could save more than $1 million alone by using carpet for its entire 120,000 square-foot exhibit instead of wood or tile.
GM also has nixed its annual "GM Style" fashion party, traditionally held on the eve of the show's media preview. The party in years past has drawn celebrities including Carmen Electra, Kid Rock and Mary J Blige. Chrysler will forego its annual tradition of converting a downtown firehouse into a beer hall and party hub during the auto show's initial press days, a spokesman said.
The pullback on show events is hitting food vendors hard. "This year is somewhat of a nightmare," said Rob Katz, vice president of Cateraid Inc., which provides gourmet wholesale food to caterers who work the auto show. Spending on food service for the show is "almost nonexistent," he said.
Mr. Katz drew about $65,000 in sales for the 2008 show but expects that to be off as much as 50% for the 2009 show. His overall business, which posts annual sales around $3 million, is off 25% this year.
One reason for the malaise is that many car makers decided not to attend January's show. Nissan Motor Co. was the most high-profile withdrawal, forcing area dealers to lend their own cars to take up the company's reserved convention-floor space.
Detroit has pockets of optimism. The Book-Cadillac hotel, a historic but blighted building, recently was renovated as a Westin and hasn't had any booking cancellations for the auto show.
Local cultural and charitable institutions garner major support from Detroit's three auto makers, which collectively gave more than $100 million to charity last year. But future donations are now in doubt.
GM says its foundation has been "eliminating and in some cases significantly reducing its contributions" to many charities but hopes to support groups "when and how we can."
Chrysler's foundation hasn't planned its 2009 budget yet but donation reductions are likely, said Brian Glowiak, its vice president.
The local United Way organization gets nearly 40% of its annual revenue from the three auto makers, much of it from employees who are now jobless or facing uncertain futures, said Michael Brennan, the charity's president and chief executive.
Mr. Brennan said his office will have received about 320,000 calls to its 24-hour help line this year, compared with 100,000 in 2006. But the organization is preparing for up to a 50% drop in revenue in 2009, he said.
"At the very time you have an increase in volume for help, you have a contraction of philanthropic dollars available to respond," he said.

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