Geneva show under threat amid bailout dispute

The organizers of the Geneva auto show have said the event may not be held next year amid a dispute with the local authorities over a bailout and a reluctance by some automakers to attend.

The Swiss show was canceled this year due to the coronavirus pandemic.

The Geneva International Motor Show (GIMS) Foundation, which organizes the annual event, has rejected the terms of a 16.8 million-franc ($17.3 million) bailout loan from authorities in Geneva because the the authorities have asked for a guarantee that that the show will be held next year.

Some automakers are reluctant to commit to attending the show next year, the new director general of GIMS, Sandro Mesquita, told Automotive News Europe in a phone interview.

“The signals we are receiving from the brands are more in the direction of 2022. The whole industry is facing a huge challenge with the COVID crisis,” Mesquita said. “For the moment we are thinking of organizing the next event in two years’ time.”

The loan would have helped repay 11 million francs ($11.3 million) to automakers after the event was canceled in March, while the remaining money would be used to stage the 2021 event.”The situation is still not clear,” Mesquita said. “If we again have to cancel next year it would just be a catastrophe for us.”

Authorities in Geneva said that they cannot pay out the money without the guarantee of a show next year.

“We didn’t want a situation where we lend almost 17 million, then six months later they won’t organize the event because then you have a political problem,” Pierre Maudet, the councilor in charge of economic development for the State of Geneva, told Automotive News Europe.

The show, which is held in March, is the largest event in Switzerland, generating around 200 million francs ($206 million) in income for the city, the authorities said.

Under the terms of the loan, GIMS would have pledged its 7 percent stake in the Palexpo convention center, where the show is held, to the Geneva State as a guarantee the loan would be paid back.

The State calculated the stake was worth 16.8 million francs after it fell in value following the cancelation of this year’s event.

“The auto show represents a third of the value of Palexpo. If you don’t organize in 2021 then that value goes down and you lose money,” Maudet said.

The decision to spend 11 million francs on reimbursing automakers for stand space represents a U-turn from March, when the show’s organizers said that because the Swiss government essentially banned the event, it could claim ‘force majeure,’ which would let them break automaker contracts without penalty.

“A claim against the auto show will not have success. There are no refunds or litigation possible,” Maurice Turrettini, Chairman of the Foundation Board of GIMS said in a statement in March.

GIMS will now reimburse “fully” money automakers paid to rent stand space at the event. “Legally we are not liable, but this is not our intention, our intention is to reimburse,” Mesquita said.

Under Mesquita, who took over the position May 1, the GIMS Foundation is pursuing other avenues to raise money, including investors and financial institutions. It has also approached the Swiss government for help, Mesquita said.

The Geneva auto show was facing falling exhibitor numbers before the 2020 cancellation as automakers redeployed precious finances to launch new cars in a cheaper environment.

After other auto-show cancellations this year — including Detroit, New York and Paris — automakers may start to believe such events are no longer needed.

For example, Porsche said that coverage for a hastily arranged digital reveal of its 911 Turbo S flagship sports car had outstripped that of last year’s Geneva reveal of the 911 Cabriolet, a more important model in terms of sales.

VW yanks ?tasteless’ Golf ad

Volkswagen Group last week withdrew a German social media ad for the redesigned Golf and apologized after it was criticized as racist.

The 10-second video posted on its Instagram page showed a man with dark skin being moved around by a large white hand and flicked into a cafe. The name of the cafe is a reference to Christopher Columbus and colonialism.

Some people who complained about the ad noted that the letters in the phrase “Der Neue Golf” (“The New Golf”) materialize in a way so that they briefly spell a German slur for people of color.

At first, VW replied to its critics that the “origin of the people depicted is irrelevant” and that the automaker was “surprised and shocked that our Instagram story could be so misunderstood.” But it later admitted the ad was wrong.

“Without question: The video is inappropriate and tasteless,” VW said in a statement. “We will clarify how something like this could happen, and there will be consequences.”

VW in need of marketing chief — again

At a brand not known for executive longevity, Saad Chehab’s tenure as head of marketing for Volkswagen of America was shorter than most — nine months.

Chehab, 53, was replaced last week by the VW brand’s U.S. sales and marketing executive vice president, Duncan Movassaghi, 45. He will assume Chehab’s duties on an interim basis until a new VW brand marketing chief is named. Volkswagen did not give a reason for Chehab’s departure.

Not counting those who held the post as an interim assignment, Chehab was the fifth person in the job in less than 10 years. He had replaced Jim Zabel, whose tenure lasted less than two years. Zabel had replaced Vinay Shahani, who left Volkswagen for Toyota after steering the German brand through the heart of its diesel emissions crisis. Shahani had succeeded Tim Mahoney, who departed Volkswagen for General Motors in 2013. Mahoney had succeeded Tim Ellis in 2011.

Chehab’s role had been confined to North America, and Volkswagen confirmed his departure was unrelated to a controversy last week over a Volkswagen ad with racial discrimination overtones that ran in some European markets before being pulled.

Chehab, a native of Lebanon, had been vice president, marketing and communications for Kia Motors America from April 2017 to June 2019. He joined VW in August, where he reported directly to Volkswagen Group of America CEO Scott Keogh. The three-time Automotive News All-Star — he won in 2011 and 2012 for his work with Chrysler and again in 2019 for work with Kia — had been tasked to distance Volkswagen from its 2015 diesel emissions scandal, to prepare the way for a lineup of electric vehicles and to boost sales consideration and market share.

Keogh told Automotive News last month that VW had been making inroads with consumers, roughly halving the percentage of those who rejected the brand outright because of the emissions scandal, and that its sales had been growing before the COVID-19 pandemic in the U.S. The brand plans to launch the first of its family of battery-electric vehicles in the U.S. late this year with the ID4 compact crossover.

Chehab has a rich history of automotive marketing success, especially with struggling brands. He was widely credited as the creative force behind Chrysler’s highly successful Super Bowl commercials “Born of Fire” in 2011 and “Halftime in America” in 2012.

As head of the Chrysler brand, Chehab embraced the “Imported from Detroit” tag line from the “Born of Fire” commercial and used it to promote special editions of Chrysler vehicles. The phrase helped redefine the brand, repositioning it as a gritty domestic underdog, and helped increase sales.

Post-quarantine Texas Jeep party turns chaotic

Abeach party for Jeep enthusiasts in Texas this month resulted in two men being shot, nearly 200 arrests and viral video of carefree partying during a pandemic.

The annual “Go Topless Jeep Weekend” event attracted thousands of people to a peninsula along the Gulf of Mexico near Galveston.

“We’ve been in quarantine and, like, I need to get out and party,” one attendee, Chelsey Coyer, told TV station KBMT in a report shared widely on social media last week. The video showed many of the partiers flouting social distancing recommendations, which police said they were unable to enforce.

“You can’t. It’s not possible to do that on this beach with the amount of people we have here,” Galveston County Sheriff’s Sergeant Mark McGaffey told the station.

After a group of people got into an argument, two men were shot in the torso and had to be airlifted to a nearby hospital, NBC News reported. Authorities said they arrested 189 people on various charges unrelated to the shooting, including assault, driving without wearing a seat belt, driving while intoxicated and public intoxication.

But the majority of those arrested weren’t Jeep owners, said Galveston County Sheriff Henry Trochesset. “I can’t blame it on the Jeep clubs,” he said.

It was the second consecutive year the event led to more than 100 arrests. Texas allowed its beaches to reopen May 1.

2020 New York auto show canceled amid crisis conditions

Organizers said Friday they were canceling the 2020 New York auto show that had previously been pushed back until August, citing the ongoing coronavirus pandemic and the venue’s use as a field hospital.

The show, which was initially set for early April and is typically used to unveil many new vehicles, was previously postponed until August. The Javits Convention Center remains set-up as an active hospital and is in standby mode for the foreseeable future, organizers said.

The next New York show will take place April 2-11, 2021. A string of auto shows have been canceled this year and some automakers — like Toyota Motor Corp. — are opting to hold virtual unveilings of new vehicles.

Mark Schienberg, president of the Greater New York Automobile Dealers Association, the organization that owns and operates the 120-year-old New York show, noted that automakers and their exhibit partners needed “immense planning” to construct a show. “Because of the uncertainty caused by the virus, we feel it would not be prudent to continue with the 2020 show,” he said.

Large gatherings in New York have been canceled through at least Labor Day, including Broadway shows.

Detroit’s auto show that had been set for June was canceled in March. The Paris Motor show scheduled for late September/early October in March was canceled as were auto shows in Geneva.

A major event for luxury car unveilings, the Concours d’Elegance in Pebble Beach, Calif., was also canceled. Beijing’s 2020 auto show was postponed until September.

Auto shows are often visited by potential new car buyers but cost tens of millions of dollars to put on. Many automakers have rethought whether they still make economic sense amid the pandemic and have scaled back the number of shows in which they participate.

VW pulls Instagram post criticized for racial overtones

FRANKFURT — Volkswagen Group has withdrawn an Instagram snippet meant to promote the latest Golf model after social media users criticized the video clip for using potentially discriminating motifs.

The snippet showed a man with dark skin moved around like a marionette by a large white hand before being snipped into the entrance of the Petit Colon cafe in Buenos Aires. The cafe is next to the popular Teatro Colon named after Italian explorer and colonist Christopher Columbus.

Some social-media users suggested that floating letters in the video clip briefly spelled a pejorative German word for people of color.

In a statement, Volkswagen apologized: “Without question: the video is wrong and tasteless,” the company said. “We will clarify how this could happen — and take consequences from this.”

VW has stepped up diversity and integrity efforts since the manufacturer’s diesel-emissions manipulation came to light five years ago.

Last year, VW CEO Herbert Diess apologized for using a phrase that appeared to play on a slogan with right-wing connotations.

VW said it opposes any form of racism, xenophobia and discrimination, especially against the backdrop of its own corporate history. VW was founded in 1937 during the Nazi era.