Week of October 18, 1999

October 18, 1999

NHTSA DEFLATES SIDE AIRBAGS
FORD UNVEILS NEW STRUCTURE
GM MAKES $877 MILLION IN Q3
DODGE COMES BACK TO NASCAR
GM STICKS WITH DEALER BUYOUTS
QUEBEC BIDS TO KEEP GM PLANT
GM, SUZUKI TO BUILD CAR IN JAPAN
GM, DAEWOO TALK ON ALLIANCE
FIAT ANGLING FOR SAMSUNG
VAUXHALL TO SELL ONLINE
VW SUES VW(.NET)

 

NHTSA DEFLATES SIDE AIRBAGS The National Highway Traffic Safety Administration (NHTSA) is warning owners of vehicles equipped with side airbags that the devices can harm or kill children sitting too close to them. NHTSA says recent tests on child-sized, unbelted test dummies showed the potential for serious injury or death when the airbags explode after a collision. The agency is also concerned that rear side airbags are reducing the safe space for children in the rear seat, where it recommends seating them to avoid danger from front airbags. NHTSA has asked automakers manufacturing the rear airbags to deactivate them until they can prove the bags are without risk; currently, only GM, BMW, Audi, and Mercedes-Benz offer the rear bags.

 

 

FORD UNVEILS NEW STRUCTURE Jac Nasser has signed off on his own tweaks to Ford’s massive globalization effort. As of Jan. 1, Nasser’s Ford will set up 11 business units that will give its regions more flexibility in developing cars and serving markets.

The 11 markets will include Ford North America, Ford Europe, Ford Asia Pacific and Ford South America (the Ford North America business unit will include Ford Car, Ford Truck, Ford Division, Ford Canada and Ford Mexico). The Premier Automotive Group will consist of Jaguar, Aston Martin, Volvo, Lincoln and Mercury, a late inclusion that leaves some analysts puzzled as to its future goals. Other units will include Ford, Credit, Hertz, customer service, and Ford's new e-commerce unit. In addition, Mazda, of which Ford owns 33 percent, and the Visteon Automotive Systems parts unit will also be global business units.

 

 

 

GM MAKES $877 MILLION IN Q3 General Motors and Delphi Automotive Systems took advantage of strong sales and labor peace to post strong earnings for the third quarter. GM reported it earned a record $877 million or $1.33 during the third quarter, beating the expectations of analysts by more than 7 cents per share. The results were a $1.19 billion turnaround from the $309 million loss in the third quarter of 1998, which came in the wake of a 54-day strike by the United Auto Workers at two of the company's key installations in Flint, Michigan.

 

For more on the GM results, click here.

 

 

DODGE COMES BACK TO NASCAR Confirming all sorts of rumors and reports, DaimlerChrysler announced last week that its Dodge division will re-enter the NASCAR circuit in 2001. Dodge will run two teams on the Winston Cup circuit, starting with the 2001 Daytona 500. The company’s return follows years of stellar growth in NASCAR fan loyalty, TV ratings, and endorsement and ad revenue. NASCAR attendance has surged 65 percent in this decade, and of the top 10 largest sporting events in the country, each surpassing 100,000 spectators, nine are NASCAR events, Dodge said.

 

 

GM STICKS WITH DEALER BUYOUTS In the face of dealer outrage, GM says it’s proceeding apace with its plan to purchase up to 10 percent of its U.S. dealers, some 770 dealerships in 130 markets, over the next few years. GM CEO Jack Smith met with National Automobile Dealers Association (NADA) Chairman Jim Willingham for an hour last Wednesday, Reuters reports, and during the meeting, Smith told the dealers GM needs to protect its brands as well as increase its sales and slumping market share, now at 29 percent. GM has 7,753 dealerships in the U.S., and is in the early stages of winnowing its dealer body to improve customer service, as well as beginning a comprehensive Internet marketing strategy that may include direct delivery of vehicles ordered online.

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