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Week of Jan. 25, 1999

January 25, 1999

NOT ‘2002NOT’

VOUCHERS FOR VENTURES? A Louisiana judge has OK'd a settlement that sees 5.8 million owners of trucks with sidesaddle fuel tanks get $1,000 vouchers they can use toward the purchase of any GM vehicle, excluding Saturns. Owners of C- or K-series trucks built from 1973-87 or R- or V-series trucks built from 1987-91 are covered. Critics of the settlement claimed the side-mounted gas tanks were fire hazards in side-impact crashes (most tanks are mounted in the middle of the frame). But GM had proved that the trucks held their resale value, one reason for the relatively low per-consumer settlement. Attorneys were criticized for the level of their fees — originally $24 million — but have agreed to contribute to a fund to study ways to make the tanks safer.
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BEST OF THE BEST The re-made Volkswagen Beetle earned the “Best Small Car” and “Best of the Best” awards from the PBS weekly automotive show “MOTORWEEK.” Other “bests” announced by host John Davis: Family sedan: Volkswagen Passat V-6; Minivan: Honda Odyssey; Convertible: Mazda Mx-5 Miata; Luxury car: Volvo S80; Peformance Car: Ford Mustang GT; Sports Car: BMW M-Coupe; Family SUV: Jeep Grand Cherokee; Small SUV: Suzuki Grand Vitara; Pickup: Chevrolet Silverado and GMC Sierra; Dream machine: Mercedes-Benz E55.
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NOT ‘2002NOT’ Negative Olympic statements are definitely “poor form” as far as Utah’s Department of Motor Vehicles is concerned. The state agency governing vanity plates has nixed the application of a motorist who wanted "2002NOT" on his vehicle. This, even though the host state of the 2002 Winter Olympics has already issued several pro-Olympic plates, including "OLYMPX" and "5RNGS." The difference? A state official said the application for "2002NOT" was meant to be a protest and a vanity plate is “not a public forum.”
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GRADUATED LICENSING WORKING Graduated licensing —phasing in on-the-road driving privileges — is being credited for reducing fatal and injury crash rates for the youngest drivers. An insurance industry study showed there were 9 percent fewer incidents involving 15- to 17-year-olds in Florida in the first full year of graduated licensing. A type of apprentice system, graduated licensing in some form is in six Canadian provinces and 24 U.S. states.
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CADILLAC HIGH ON SAFETY GM said it will offer a package of high-tech safety options on the 2000 Cadillac DeVille, including an ultrasonic backup device that warns drivers of objects behind the vehicle. Edward J. Zellner, the company’s chief designer for luxury cars, said the device, developed by Robert Bosch, might be bundled with a night driving device previously announced. Cost was not disclosed.
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FORD POSTS RECORD GAINS Ford Motor earned $6.57 billion in 1998, nearly 10 percent more than the year before. It was the 11th consecutive quarter of improved operating earnings, a feat President and CEO Jac Nasser said was due to continuing quality gains, operating efficiencies and customer acceptance. Flattening sales may make future stratospheric gains a challenge. “The trick for us is to continue to improve earnings despite (rising marketing costs),” said John Devine, Ford’s chief financial officer.
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WORKERS SCORE BIG PROFITS There will be some happy retailers in March when Ford employees begin cashing in their average $6,100 profit-sharing checks. Ford President and CEO Jac Nasser, who took over the reins at Ford in 1998, pointed to red-hot truck sales, productivity and quality awards as year-end highlights. Ford employees have received an average of $32,575 since the profit sharing began in 1984.
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GM SEES STRONG FOURTH QUARTER Aggressive cost cutting and a strong showing from North American operations gave GM an earnings boost in the fourth quarter. The company made $1.8 billion, 13 percent higher than the year before. Mike Losh, GM’s chief financial officer, pointed to higher sales per customer, a rising demand for trucks, and a turnaround in Europe. Losh is optimistic about 1999, saying the company should do especially well in Europe, where sales are running at record levels, although prospects for Latin America may be a little more tricky, particularly in Brazil where GM is especially exposed.
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EMPLOYEES SUFFER LOSS Workers at GM may not need long to spend their profit-sharing checks of $200, down from the $750 checks they cashed a year ago. The company cited a crippling work stoppage as rationale for the drop.
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DAIMLERCHRYSLER ITCHY TO DEAL With both DaimlerChrysler and Nissan confirming they’re talking about ways to work together, DC Chairman Juergen Schrempp says his company is “impatient” as it works to forge some sort of alliance with the Japanese carmaker. No deals from the talks have been released. Nissan Diesel, long on the block at Nissan, is a focus of the talks, but as reported in the Jan. 18 edition of “Headlight News,” Nissan officials haven’t ruled out any possibilities involving DaimlerChrysler and Nissan.
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DC MERGES FINANCIAL UNITS As widely expected since the Chrysler and Daimler-Benz joining was announced, the firm is going ahead with the merger of its separate financial units. The new company, DaimlerChrysler Services AG (also known as "debis"), will have $81 billion in resources and be the world’s fourth largest non-bank provider of financial services. Debis, which also includes information technology and telecommunications in its activities, is the second-biggest earner in DaimlerChrysler, earning $14 billion in 1998 when Chrysler financial services are included.
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MERCEDES PLANT OPENING DELAYED DaimlerChrysler’s Brazilian unit — Mercedes-Benz do Brasil — says it is delaying the opening of Mercedes' first car plant by two months, largely because of a 30 percent dive in the value of the country’s currency. Mercedes is better known as a truck and bus maker in Brazil. A spokesperson said the delay matches the inauguration with the plant’s product launch but also holds out hope that Brazil’s economic situation will improve by then.
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ALL-ALUMINUM AUTOS? Expertise in working with aluminum is at least partly behind a move by Ford Motor to buy Troy Design and Manufacturing, of Redford, Michigan. The company, a tool and die maker, should help Ford shorten its product development time and help the automaker boost its use of aluminum, beginning with a project at Ford’s Rouge plant early in the new millennium. Troy employs 340 workers and has facilities in Redford and Warren, Michigan. Terms of the deal were not disclosed.
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WATER POWER It may have been considered a risk by some, but GM is now a convert to a technology that is making frames for its Chevrolet Silverado and GMC Sierra trucks stronger, safer and more reliable. Cheaper, too. With fewer welds, there should be lower warranty costs. The technology is called hydroforming. High-pressure water is used to shape metal and even pierce holes in the steel. The manager of the plant that introduced hydroforming to GM says the process requires fewer dies (about 10 to 1) and creates less scrap. Lerick Chissus, a director of purchasing for GM’s truck group, says the company will use the technology on other products.
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CURBING DRUNK DRIVERS At least for the time being, drunk drivers in New York City will lose their vehicles until they are acquitted of the charges. Previously, police held vehicles only until someone came to pick them up. New York cops plan to use a section of city code allowing the seizure of “instrumentalities of crime,” but others expect the plan to be challenged since the law does not cite drunken driving.
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BOLSTERING BENTLEY Is there a Bentley in your future? Bentley Motor Cars hopes so. It plans to launch an international advertising campaign designed to increase awareness and boost sales. The company, working with agency BMP DDB, will spend 1 million British pounds to create awareness and pique interest in the Bentley brand. Campaign organizers said “unusual design, provocative copy, and intriguing use of the traditional Bentley green” would be featured.
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