December 26, 2008 - Detroit International Auto Show, The Motor City - Detroit MI

Detroit Car Show Hit by Industry's Gloom

Like the Auto Makers, Annual Event Is Downsized; Nissan Won't Attend, GM Cancels Fashion Show

	No GM Fashion Party
	No Kid Rock
	No Mary J Blinge

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.

View Full Image GM won't hold its GM Style event at the Detroit auto show. At the 2008 event, models introduced a Saturn concept car as the group Maroon 5 performed. At the 2008 event, models introduced a Saturn concept car as the group Maroon 5 performed. GM won't hold its GM Style event at the Detroit auto show. At the 2008 event, models introduced a Saturn concept car as the group Maroon 5 performed.

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.

GM won't hold its GM Style event at the Detroit auto show. At the 2008 event, models introduced a Saturn concept car as the group Maroon 5 performed.

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.

Original Story - New York Times

Update - January 4, 2009

Worldwide spotlight burning bright for Detroit auto show

News media interest stirred by recent industry meltdown

The same global economic crisis that has sacked the automotive industry and led to budget cutbacks for the 2009 North American International Auto Show is also leading to heightened news media interest in Detroit's best-known annual event.

More than 4,000 journalists have applied for credentials for this year's event, auto show organizers said. That's about 50 more than last year at this time. Typically, there is a flurry of reservations in the final two-week lead-up to the event and about 6,000 journalists attend.

Maintaining news media interest is critical for the Detroit auto show because organizers bill the event as the most newsworthy of all auto shows.

"If we can keep the media excited about this show, then we can use that and say to them, 'This is where you need to be,'" said Joe Serra, senior cochair of this year's auto show.

Serra suspects the heightened interest is due to an industry-wide sales meltdown that led the Detroit Three to travel to Washington, D.C., and plead for government aid.

"Because of that ... the media is making it a point to be here this year" Serra said. "They want to know what is going on."

The Detroit Auto Dealers Association, which produces the auto show, now expects that automotive manufacturers will reveal 49 new production or concept vehicles to the news media over three days starting Jan. 11. Of those, 85% are worldwide debuts, Serra said.

The show is open to the public from Jan. 17-25.

"That's really what the Detroit and the North American International Auto Show is all about," Serra said. This year's expected highlights include an all-new Ford Taurus large sedan, a redesigned Toyota Prius hybrid, an all-new Buick LaCrosse large sedan and the production version of the Honda Insight, a new hybrid vehicle.

But while news media interest is up, show organizers are struggling to adjust and adapt to economic conditions that have caused some manufacturers to pull out of the show and are causing slower ticket sales for the Charity Preview -- the annual black-tie gala that typically raises about $6 million for 12 children's charities in a one-night event.

At $400 a piece, ticket prices are steep. But organizers are trying to make it a better deal by adding entertainment options. This year, the event will include two internationally known music groups -- the Doobie Brothers and the Jonas Brothers -- who will perform in separate concerts.

Appealing to baby boomers, the Doobie Brothers will play immediately after the Charity Preview in Cobo Arena, while the Jonas Brothers, who are popular among teenagers, will play on Jan. 18 in Joe Louis Arena.

"What we are trying to do is bring additional value and not be blinded or deaf to this current economic situation that all of us are facing," Serra said.

Serra declined to say whether the Doobie Brothers or the Jonas Brothers provided a price break to play at the charity event, but said that even with two musical acts booked, the dealers association was able to keep the cost of the event at just 12% of the expected ticket sales revenue.

Despite the entertainment options, Serra said ticket sales for the Charity Preview have still slowed. So far, the dealers association has sold about two-thirds of the tickets normally sold by now.

"That's about as good as I anticipated, but not as good as I had hoped," Serra said.

Total capacity for the event is about 15,000.

The biggest blow for auto show organizers came in November when Nissan announced its decision to pull out of the event. While several other smaller manufacturers previously announced decisions to skip Detroit, Nissan was the first major manufacturer to cancel.

Since then, a group of local Nissan dealers has banded together to pay for and staff a Nissan display at the show, but other manufacturers have scaled back on display costs and other marketing events.

Toyota, meanwhile, has canceled an annual news media party. And even though Honda will display its Insight at the show, it isn't holding a news conference.

The departure of the manufacturers has led to a reconfiguration of floor space and has led to two Chinese automotive manufacturers, BYD and Brilliance, making their first appearance on Cobo Center's main show floor.

Serra also said talks are under way with several manufacturers to assemble a central area in the lower level of Cobo Center where automakers can display hybrid or alternative fuel vehicles.

Ford Motor Co. said it likes the idea.

"It seems like an interesting initiative," said Ford spokesman Jay Ward.

So while this year's Detroit auto show will have less glitz and glamour than in years past, it remains an effective global stage for product unveilings.

"It's going to be a little bit more of a business tone, which I think is proper right now," Serra said.

Update Story - Detroit Free Press