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Week of May 1, 2000


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ROVER BID COLLAPSES
RENAULT SELLS ITS TRUCKS TO VOLVO, BUYS SAMSUNG
SATURN BOOSTER
FRANCIS: NOT A CAR GAL ANYMORE
GM BUILDING EXCITEMENT IN PONTIAC
GM RECALLS SUVS
MITSUBISHI TRIMS DOWN
BLIMEY! MORE BRITISH JOBS LOST?
FORD FINED BY EPA
36-VOLT STANDARD?

 

ROVER BID COLLAPSES The sale by BMW of Rover to venture-capital company Alchemy Partners has collapsed at the eleventh hour. BMW had been working with a preferred deadline of Friday April 28 to complete the sale. Earlier in the week the company had dismissed a counter-proposal for Rover from an organization called the Phoenix Group, lead by former Rover CEO John Towers, because it could not be finalized ahead of this cut-off point. The whole plan was wrecked, however, when Alchemy Partners announced, on the morning of the final day, that it was withdrawing from the deal, quoting disagreement on "contractual matters."

 

RENAULT SELLS ITS TRUCKS TO VOLVO, BUYS SAMSUNG AB Volvo, the second-biggest truck and bus maker in the world, will immediately acquire Renault's truck division, Renault Vehicles Industriels (RVI). RVI also manufactures trucks and buses, and includes U.S.-based Mack Trucks. Combined, the Renault-Volvo truckmaker could boast sales (based on 1999 figures) of $846 million. According to the New York Times, Renault opted to pay an extra $470 million to up its stake in Volvo to 20 percent to get approval from the French government, which owns 44 percent of Volvo. With its 20 percent stake in AB Volvo, Renault will be able to take two seats on Volvo's board. Renault also this week completed its pending purchase of Samsung Motors. Samsung's creditors have agreed to accept a $560 million deal that would give Renault a 70.1 percent stake in Samsung. These moves mark another step in Renault's refocusing, along with Renault's purchase of Romanian carmaker Dacia and investment in Japan's Nissan.

 

SATURN BOOSTER GM introduced a $1.5-billion expansion plan for Saturn that will include a manufacturing complex expansion and a new engine facility. According to Automotive News, $500 million will go to an engine facility in Spring Hill, Tennessee, to produce a new four-cylinder engine, code-named L850, that will power an upcoming SUV as well as the S-Series. Along with the engine-facility announcement, Saturn made an announcement that it will use a Honda V-6 engine in an upcoming model. The remaining approximately $1 billion will go to an expansion of the existing Spring Hill manufacturing complex.

 

FRANCIS: NOT A CAR GAL ANYMORE Oldsmobile's general manager, Karen Francis, announced her resignation, effective April 30. Francis has taken a position as chief marketing officer and managing director of business-to-business e-commerce company Internet Capital Group. Francis joined GM in 1996 after working at Proctor & Gamble and Empire pens.

 

GM BUILDING EXCITEMENT IN PONTIAC GM has announced a new $193 million brand-rejuvenation investment in Pontiac's home turf. The plan, which concentrates in a new Pontiac North engine-design complex, is part of a broader $2 billion plan to relocate scattered workers to distinct "business campuses."

 

GM RECALLS SUVS General Motors has issued a safety-related recall of 1999 full-size sport-utility vehicles. In a February 1999 test conducted by the National Highway Traffic Safety Administration (NHTSA), a Chevrolet Tahoe registered a higher possibility of neck injury than that allowed by the government. In the test, the crash dummy's chin hit the dashboard because the bag deflated too quickly. Although GM has insisted that the test was an anomaly, and even filed a petition last summer to disregard the results, GM has since used a redesigned airbag that will deflate more slowly. GM's fix for the recalled vehicles involves the installation of a foam strip on the dashboard. Approximately 279,000 Chevrolet Tahoes, GMC Yukons, and Cadillac Escalades built between September 1998 and May 1999 are affected by the recall.


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