Top stories of 2014

[AF News Desk]

The U.S. auto industry returned to full-fledged prosperity in 2014, racking up prerecession sales accompanied by rising transaction prices.
But the year was punctuated by grim news, as two lethal product defects were linked to dozens of deaths.
The bigger and deadlier of the two, involving General Motors' defective ignition switches, was the most important news story of 2014, according to the 62nd annual Automotive News editorial staff poll.
The recall could cost GM billions in claims from the victims' families and federal penalties. And it has hampered GM's efforts to rebuild its image under CEO Mary Barra, who started the year as the industry's glittering new rock star.
2014 also was a year of product innovation, with an aluminum-bodied Ford F-150 pickup rolling off assembly lines, audacious retail buy-sells, a new CEO at Ford after Alan Mulally's retirement and Jeep's striking sales surge.
Here's our list of the 10 biggest stories of 2014.


1. With ignition-switch recall, GM lurches into another crisis



The dawn of 2014 was supposed to mark the end of Government Motors and the rise of New General Motors. Instead, it heralded the Year of the Recall, as a long-standing safety issue erupted into a full-blown crisis for a CEO just weeks into her new job.
Along the way, a decade's worth of GM incompetence and dysfunction were laid bare through an internal investigation and congressional hearings, battering a corporate image that had barely begun to recover from bailouts and bankruptcy.
And it's not over. The official death toll from the ignition-switch defect, initially pegged at 13, has risen past 40 as a GM-appointed administrator reviews claims for compensation. Several lawsuits are pending, along with a reported federal criminal investigation and a consent decree with regulators. Revamped safety protocols unleashed a record string of recalls, covering more than 30 million vehicles globally.
Unlike the financial disaster of 2009, the recall crisis never posed an existential threat to GM. But it may have provoked far more soul-searching and triggered more of the internal reform that its critics have long demanded.

2. Takata airbag recall nightmare



It’s the ultimate in technology run amok: The airbag, an essential safety device, is instead a potential killer in millions of vehicles on American roads. According to Takata, its airbag propellant can degrade with humidity, causing the propellant’s canister to explode during a crash and send shrapnel at occupants. The problem has been linked to five deaths worldwide.
The side issues to the crisis have been as serious as Takata’s apparently shoddy engineering: The New York Times reported that Takata tested the canisters and then covered up the results. Takata denied the report. Takata acknowledged in congressional testimony that it has yet to find the root cause of the problem.
Various automakers decided to hire their own engineering firm to understand the issues. Last week, Takata President Stefan Stocker stepped down, with CEO Shigehisa Takada adding president’s duties.
3. Ford rolls out aluminum-bodied F-150



In the world of automotive materials, it doesn't get any bigger than Ford's switch to an aluminum body for the redesigned 2015 F-150 pickup -- the lead vehicle of the nation's top-selling vehicle line. Much of Ford's work this year has been in persuading dealers with body shops to invest in training and special equipment, and in retooling Ford's Dearborn truck plant to work with aluminum.
Production there has begun; when Dearborn is up to speed, a changeover will follow at the Kansas City, Mo., truck plant. Meanwhile, Ford has taken a short-term hit in truck sales. And rivals have questioned the value of aluminum, especially because Ford's fuel economy of 19 mpg city/26 highway/22 combined for the 2.7-liter EcoBoost V-6 in the new truck is shy of the segment-leading Ram 1500 3.0-liter EcoDiesel's 20 mpg city/28 highway/23 combined.
Ford counters that it has upped critical towing and payload capability -- and that more fuel economy advances will come.
Barra: Roller-coaster start


4. A rough first year for Barra



It was a roller-coaster start for Barra: spotlighted in January at the State of the Union address for her historic rise; taking flak in February over the ignition-switch recall; grilled and insulted at April's congressional hearings; lampooned as a know-nothing on "Saturday Night Live," and left to face a dispirited work force in June following an internal investigation into the switch fiasco.
But by late summer, as Barra and her executive team led a revamped approach to safety, engineering and communication -- and challenged employees to get on board or get out -- the 34-year company veteran began to solidify her role as a change agent.
And she has framed her recall response as a broader call to action to improve the way GM makes decisions and interacts with customers, dealers, suppliers and regulators.

5. U.S. sales: Let the good times roll



After 11 months of U.S. light-vehicle sales, the market appeared on pace to top 16.4 million vehicles this year -- the best total since 2006. And the sales aren't jacked up by widespread discounting: Average transaction prices have pushed past $30,000.
In a gratifying contrast to the Great Recession, the sales surge seems to be a product of several things gone right: falling gasoline prices, improved U.S. employment numbers, still-low interest rates and an absence of the production bottlenecks that were predicted as part of an industry revival.
Pickups, luxury brands and crossovers did well. And FCA's U.S. brands continued to boost sales, likely headed for a 15 percent year-over-year gain.
6. Lithia buys DCH; Buffett buys Van Tuyl



In June, Lithia Motors said it was buying DCH Auto Group. It closed the deal on Oct. 1. At an estimated $300 million, it was the biggest dealership acquisition ever -- for one day.
On Oct. 2, Warren Buffett's Berkshire Hathaway said it would buy Van Tuyl Group, the nation's fifth-largest dealership group. Outsiders estimated the price tag at more than $4 billion. Those blockbuster deals were part of a banner year for auto dealership buy-sells, whether measured by deals or dollars.
7. Cherokee helps fuel Jeep's extraordinary year



Jeep is on fire, thanks to sharp redesigns and falling fuel prices, which boost SUVs. U.S. sales rose 44 percent this year through 11 months. Market share was 3.1 percent for all of 2013. Through the first 11 months of this year, it's 4.4 percent.
Sales of each of its five established vehicles are up significantly over last year, and the year-old Cherokee now battles each month for top seller in the lineup with the Wrangler and Grand Cherokee. Who knew it took Italian ownership to realize the full potential of the all-American brand?
8. Price-fixing execs head for prison



For more than three years, the international crackdown on price fixing, mainly at Japanese auto parts makers, has showcased the cooperation of trust-busting authorities in the U.S., Japan and Europe.
What was striking in 2014 was that prosecutions just kept rolling along -- with more guilty pleas coming regularly.
One executive who did prison time for price fixing told Automotive News that the cases follow a pattern: A single exec takes the fall, refrains from naming higher-ups and is guaranteed lifetime employment once out of prison.
9. Fields succeeds Mulally as Ford CEO



It wasn't a surprise, but it was momentous nonetheless when Mark Fields succeeded Alan Mulally as CEO of Ford Motor Co. on July 1 It's not an exaggeration to say that Mulally steered Ford back from the edge of the abyss, handing a highly profitable, drastically reorganized company to Fields.
Fields, for his part, seems aware of the challenges of following a legend: He has spent the first several months of his tenure visiting Ford employees around the world and re-emphasizing his commitment to Mulally's One Ford philosophy. But Fields also pledged an unequivocal commitment to rebuild Lincoln and an aggressive drive to be a leader in new mobility technologies.
10. Toyota's new U.S. home: Plano, Texas



Jim Lentz was told to go big, to do something that would set his U.S. operation up for the next half century.
That mandate from Japan led Lentz to Plano, Texas, where the Toyota North America CEO is establishing a new U.S. base that unites sales, engineering and finance operations on one campus. The move will uproot Toyota from Southern California, its home for 57 years, and force thousands of workers to rethink their futures with the company.

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