Week of April 17, 2000

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BMW DISSES SELLOUT REPORT
GM, FUJI GET IT TOGETHER
LEGACY SCORES IN CRASH TESTS
FORD PUTS THE "W/D" IN WINDSTAR
GM GIVES TRUCKS THE OK
VW SNUBS BIG THREE NETWORK
HONDA TAKES ON ONSTAR
AAA TO GO AFTER ONSTAR
KOREAN AUTO WORKERS TO END STRIKE
RENAULT SEEN SELLING TRUCKS TO VOLVO
GM, HONDA, DC VEHICLES RECALLED
DC HOPPING ON THE PC BANDWAGON?

BMW DISSES SELLOUT REPORT After Britain’s Sunday Times reported that BMW’s primary shareholders, the Quandt family, were in joint talks with Ford and Vollkswagen to sell their stake, BMW spokesperson Richard Gaul stated that the report was "absolute rubbish." The newspaper quoted an unnamed BMW exec who said that Ford was negotiating to take BMW, while VW was talking about purchasing Rolls Royce. Separately, the Times reported that the new bid for Rover, which is being headed by former Rover exec John Towers, includes the purchase of the R30 and the new Mini, which BMW is retaining in its current deal with Alchemy Partners. British trade union officials reported that the consortium led by former Rover head John Towers is expected to make a formal bid for soon. The bid will be a counter-offer to the proposal put forth by Alchemy Partners last month. Towers, current Rover head Werner Saemann and representatives from the unions reportedly have been meeting to discuss the proposal.

GM, FUJI GET IT TOGETHER General Motors and Fuji Heavy Industries, parent company of Subaru, have finalized their agreement, giving GM a 20 percent equity stake in FHI. As a result of the venture, the two companies will form a liaison office, with eight executives, five from GM and three from FHI. Separately, General Motors announced that its profits dropped two percent for Q1 2000, with total earnings at $1.78 billion.

LEGACY SCORES IN CRASH TESTS In its most recent tests of inexpensive mid-size sedans, the 2000 Subaru Legacy received a "good" rating from the Insurance Institute for Highway Safety (IIHS). Of the seven vehicles tested, the 1999 Daewoo Leganza fared the worst, due to extensive damage to the occupant compartment and high injury measures on the crash test dummy. The Pontiac Grand Am and Oldsmobile Alero also received a "poor" rating, while the Nissan Altima was rated "marginal." The Mazda 626, Saturn LS, Chevrolet Malibu and Olds Cutlass Supreme were all given "acceptable" ratings.

FORD PUTS THE "W/D" IN WINDSTAR Ford’s latest concept vehicle, Windstar Solutions, brings new meaning to home on the road. Unveiled at the National Kitchen and Bath Industry Show in Chicago, the joint project between Ford and Maytag is designed to show consumers how home appliances can be incorporated into a vehicle. The minivan features a long list of home appliances, including a refrigerator, microwave, cooler, hot and cold cupholders, a trash compactor, a vacuum and a washer/dryer combo unit. Despite the plethora of features, the Windstar still seats six. Alas, Ford says the vehicle is a concept only and will not be built.

GM GIVES TRUCKS THE OK As expected, General Motors announced that it would convert its factory in Oklahoma City to a production facility for trucks. GM will plunk down over $700 million to make several new mid-size SUVs that will fill a void in its product line between the Chevy Tahoe and Chevy Blazer. These vehicles, which will compete with the Dodge Durango, will begin production in 2002.

VW SNUBS BIG THREE NETWORK Volkswagen announced that it will launch its own supply network instead of joining the exchange formed by the Big Three automakers. The electronic marketplace will allow VW to order manufacturing parts, tools and office equipment online and will be open to any companies who want to join. VW will partner with IBM, and software companies i2 Technologies and Ariba to build the network.

HONDA TAKES ON ONSTAR Honda has said that it will begin using General Motor’s OnStar service in cars it sells in the U.S. Although Honda did not offer any further details, Japan’s Nihon Keizai Shimbun said that the system is expected to arrive in Acura cars as early as 2001. Honda said that it is considering working with GM to develop a satellite-linked system for vehicles.

AAA TO GO AFTER ONSTAR The American Automobile Association (AAA) will be launching a service to consumers that will be in direct competition with General Motors’ service OnStar, according to a report in Automotive News. Tested in as many as six markets early next year, the service will offer an instant connection to its service center, where drivers can request travel information, ask for a tow truck or an ambulance. Later, the report said, AAA expects to add other services, such as an Internet connection or remote vehicle diagnostics.

KOREAN AUTO WORKERS TO END STRIKE Union workers in South Korea’s auto factories have agreed to resume work on Monday, ending the strike that has virtually halted automobile production. The group said it would still have a partial strike on April 19 and a full strike on April 27 to reiterate its concerns about the possible sale of Daewoo Motor to a foreign company.

RENAULT SEEN SELLING TRUCKS TO VOLVO Several foreign newspapers reported that Renault was in serious negotiations with AB Volvo to sell its truck unit, RVI, to the Swedish company. The deal is expected to result in Renault selling RVI to AB Volvo in exchange for a 15 to 20 percent stake in the company. The newspaper reports suggest the deal will be finalized within a few weeks.

GM, HONDA, DC VEHICLES RECALLED The National Highway Transportation Safety Administration (NHTSA) issued recalls on over 400,000 vehicles produced by Honda, General Motors and DaimlerChrysler. Dodge Intrepids, Chrysler Concordes, 300Ms and LHS’ and Jeep Grand Cherokees built in August 1999 as well as some 1998 and 1999 Oldsmobile Intrigues are being recalled for a minor seat belt problem. Model year 1999 and 2000 Honda Odysseys that were built from August 1998 to August 1999 are being recalled to fix a wire that may blow a fuse and result in a power loss. No injuries or deaths have been caused by these problems.