Auto Shows Expected to Hold Steady

With the U.S.' largest automakers in the throes of reorganization, will cost cuts eventually trickle down to the showfloor? The answer is no, at least not in the short term.

On the surface, the country's largest manufacturing industry seems to be in deep trouble. General Motors in November announced that it would close 12 plants and lay off 30,000 workers by 2008. Ford followed suit last month with a plan to eliminate 30,000 jobs and close 14 plants by 2012. And DaimlerChrysler a day later weighed in with 6,000 job cuts, mostly affecting white-collar workers in the United States and at the company's German headquarters.

Ford's plan is its second major restructuring in recent years. In 2002, it closed five plants and cut 35,000 jobs. But while U.S.-based automakers are struggling, Japanese-owned Toyota experienced a 10-percent increase in North American sales last year and anticipates expansion of production capacity here.

And according to the Assn. of Intl. Automobile Manufacturers, the automotive industry actually employs 500,000 more workers now than the 1.3 million it employed in 1996, largely due to foreign automakers opening production facilities in the United States and picking up the slack.

At issue are the high costs of U.S. production facilities and the fact that U.S. automakers are losing market share to foreign manufacturers. All of which means that U.S. carmakers are still very interested in selling vehicles, so aren't expected to cut back on exhibit space, organizers said.

The large array of auto manufacturers should also help insulate the shows from any disruptions.

John Marriott, vice president and general manager of Motor Trend Auto Shows, which produces 18 auto shows, said it's extremely rare for manufacturers to cut back on exhibit space. "Once a manufacturer gets a chunk of floor space, they hold onto it, even when business turns down. Once a manufacturer has a footprint, they rarely downsize, because once it's gone, they're not going to get it back."

When manufacturers are in cost-cutting mode and concerned about exhibiting costs, they're more likely look to I&D and freight for savings. And because exhibit space is purchased so far in advance, if Ford, GM or DaimlerChrysler were to scale back now, the earliest that shows to feel the effect would be the fall, Marriott said.

At the Hampton Roads Intl. Auto Show, which recently drew 100,000 people to the new Virginia Beach (Va.) Convention Center Jan. 6–8, dealers were clamoring for more exhibit space, said manager Ron Lampkins.

"The factory people want more space. They see that it's a very good avenue for the public to see their product," he said.