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Weekly News: March 12, 2001


DC WILL LAYOFF 2700 SALARIED EMPLOYEES

DaimlerChrysler announced that it plans to permanently lay off about 2700 salaried workers by the end of March. Company officials call the layoffs a step toward achieving the turnaround-plan goal of cutting 5000 white-collar workers. Nearly 2300 Chrysler Group salaried workers have taken advantage of the company's offered early retirement plan. Most of the workers who will be laid off will receive a severance package.

MITSUBISHI TO REPORT LARGER LOSS

Japan’s Mitsubishi Motors is now anticipating a loss of 2.1 billion-nearly twice as large as previously expected, according to Japan’s Nihon Keizai and other sources. The additional loss includes additional money spent to recover from the company’s scandal, in which Mitsubishi last year admitted to covering up consumer complaints for more than twenty years. Mitsubishi has not yet made a public statement regarding the higher losses.

FIRESTONE SETTLES TEXAS CASES

Bridgestone Firestone has settled 26 of its lawsuits filed by accident victims attributing their accidents to tread separation on Firestone tires. While the terms of the settlements were not revealed, most of the cases, represented by Houston law firm Houssiere, Durant, and Houssiere, involved Texans.

BELT FAILURE SIMILAR TO EARNHARDT'S

David Hutchins, a ProStock driver, has filed a lawsuit against Simpson Performance Products, alleging that the failure of a Simpson Cam Lock 5-Way Driver Restraint System led to serious injuries in a crash last summer. The racing harness that failed was similar to the one used by Dale Earnhardt in his fatal crash. The lawsuit seeks $2 million in damages.

KOREAN LABOR GROUPS PLAN BLOCKADE

Angry Korean labor groups demonstrated at Daewoo's main Bupyong assembly plant, in protest of the company's 1751 layoffs on February 16. The layoffs were carried out on the request of creditors, who want to make the company attractive to potential foreign buyers. Daewoo shut down the main plant just after the layoffs. Protestors say the shutdown was a ploy to avoid confrontation with the workers, while Daewoo says it was simply to reduce inventories. Daewoo Motor Company has since reopened its main assembly plant, and police continued to block demonstrators' access.

FORD COMPLETES HERTZ PURCHASE

Ford Motor Company has completed its $710 million purchase of the remaining shares of rental-car company Hertz, soon to be a wholly owned subsidiary of Ford. When Ford announced its offer last September, the automaker owned about 81.5 percent of the rental-car company's outstanding shares.

GAS PRICES AT A LOW, FOR NOW

The U.S. Energy Department reported fuel prices down 8.4 percent from a year ago, to an average pump price of $1.417 per gallon, the lowest price so far this year. Prices were lowest in the Gulf Coast and Midwest regions, while prices remained highest in the West Coast states. Despite the low prices, USA Today predicted that gas prices could rise as high as $2.50 per gallon in some regions this summer. The report predicts that areas being required to sell a new "clean-air" summer-blend gasoline for the first time could be hit hardest. Areas included would be Chicago, Milwaukee, St. Louis, Houston, and Dallas. Any problem with refineries or pipelines could make the reformulated fuel expensive and in short supply.

DC EXECS DETERMINING PARTS-SHARING

Top-ranking DaimlerChrysler executives met in Germany last week to begin determining the extent of platform and parts sharing between Chrysler and Mitsubishi. The Chrysler restructuring plan is likely to include the sharing of a small-car with Mitsubishi and components from larger vehicles with Mercedes-Benz. The new automotive council is reportedly in the process of determining the specifics of the parts sharing.

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