General Motors, Ford, and DaimlerChrysler are watching their spot atop the U.S. automobile industry in sales here at home slipping slowly away. Toyota, Honda, and Nissan all posted record numbers last year, while DaimlerChrysler was the only Detroit automaker to show an increase. But in the end, DaimlerChrysler sold just 146,000 more vehicles than Toyota in 2004.
That had industry analysts paying close attention to the North American International Auto Show. What they saw was the Big Three's attempts to bring hybrid vehicles-using both gas and electric power-to market to compete with Toyota. Ford has moved up plans to sell a hybrid version of the Mercury Mariner SUV to this year, while GM is set to introduce its Opel Astra diesel hybrid concept, built in collaboration with DaimlerChrysler.
Will these efforts do the trick? Maybe, but a recent survey shows most auto executives don't expect it. Of the 110 interviewed, 87 percent expected Asian brands to increase their share over the next five years, while only slightly more than half said they expect North American brands to maintain or grow theirs.
An industry already burdened with hefty fuel costs, challenging labor negotiations, and mounting pension obligations added a new quandary last week-how to handle major fare cuts.
When Delta Air Lines, the third-largest carrier in the United States, slashed its most expensive fares by as much as 50 percent, many of its competitors quickly followed suit.
American Airlines reduced the number of different fares in each market and sharply lowered the price of tickets purchased at the last moment. American's one-way, last-minute ticket from Dallas to Washington dropped from $880 to $499.
Continental, Northwest, United, and US Airways made limited adjustments, offering cheaper ticket prices in markets where they compete directly with Delta.
With increasing competition from successful low-cost carriers like AirTran, JetBlue, and Southwest, not all of the major carriers are likely to survive the current shakeout. "It is no coincidence we are seeing simplified pricing. It was inevitable for the industry, given the aggressive growth of low-cost carriers," said Smith Barney analyst Daniel McKenzie. "There's probably been no carrier in history that has struck as much terror in the corporate offices of the cyclical majors as JetBlue. That's what Delta has to respond to."
· Employers added more than 2.2 million jobs to the U.S. economy in 2004, marking the highest increase in five years.
· Consumer credit dropped by $8.7 billion in November, marking the largest one-month decrease since the Federal Reserve began keeping records in 1943. It was in fact the first time in a year that consumers trimmed their borrowing.
· Wegmans Food Markets topped Fortune's eighth annual list of the best 100 companies to work for in America. The grocery chain's motto is "employees first, customers second."
· Although the overall retail sales picture for the holiday shopping season was disappointing, online sales for November and December rose a better-than-expected 29 percent to $15.8 billion, according to comScore Networks Inc.
· A federal judge order Pfizer Inc. to stop claiming that its Listerine mouthwash is as effective as dental floss. The judge said the ad campaign was false and misleading and a public-health risk.
· Ten former WorldCom directors will personally pay $18 million to compensate for investor losses from an accounting scandal that caused one of the largest bankruptcies in U.S. history.
· Martha Stewart, who built a billion-dollar media empire based on her holiday and home-decorating tips, was unable to lead her team to victory in a prison decoration contest, according to People magazine's website.