Week of June 12, 2000

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BIG THREE EXTEND BENEFITS
HIGH GAS PRICES NOT HURTING SUV SALES
IT NO LONGER TAKES A VILLAGER
U.S. WILL GET AUSSIE MITSUBISHIS
ALFA RETURNS TO AMERICA
THE NEW MINI LIVES ON
GAS MARKETERS SHIFT THE BLAME
AVALANCHE FALLS IN ‘01
VOLVO AGREES TO CHANGE AIRBAG DESIGN
PORSCHE’S POSH SPICE

BIG THREE EXTEND BENEFITS The Big Three automakers in the U.S.--General Motors, Ford Motor Company, and the Chrysler division of DaimlerChrysler --yesterday announced together, that they will extend health care benefits to partners of gay employees. The benefits, which will begin August 1, will apply to same-sex partners of current employees but not those of retirees.

HIGH GAS PRICES NOT HURTING SUV SALES Despite rising gasoline prices and a decline in overall vehicle sales, May sport-utility vehicle sales rose 11 percent over May 1999, reports Bloomberg. Car sales fell 3.4 percent, while seasonally adjusted vehicle sales dropped 1.9 percent from May 1999. Gasoline prices have reached their highest point in nearly a decade.

IT NO LONGER TAKES A VILLAGER Company spokesmen have confirmed that Ford and Nissan will discontinue the Villager and Quest minivans after a short production run for model year 2002, reports Automotive News. The vans, a joint venture between the two companies since 1992, face an early demise due to slow sales. The models were originally planned to be sold through 2005.

U.S. WILL GET AUSSIE MITSUBISHIS Mitsubishi Motors Australia, recently on the verge of massive cuts, has been awarded a job-saving contract to build cars for the U.S. market. The $87 million contract would have the Australian facilities, located near Adelaide in South Australia, making about 4000 additional cars for U.S. export. The announcement comes as a surprise, as recent rumors have suggested that Mitsubishi may close the unprofitable facilities altogether, and earlier this week Mitsubishi officials suggested that further cuts may be necessary.

ALFA RETURNS TO AMERICA Alfa Romeo plans to return to the U.S. market in late 2003 or early 2004 with the debut of the new Spider, says Ward's Automotive International. Following the Spider introduction, the company may also launch a revised GTV 2+2 model in the States. Now that Fiat, Alfa Romeo's parent company, is in a partnership with General Motors, the cars may be marketed through existing GM dealerships. Alfa Romeo left the U.S. market in 1995 due to slow sales and a poor dealer and service network.

THE NEW MINI LIVES ON BMW partner Ricardo says it will employ 75 former Rover employees to help with New Mini development, says Automotive News Europe. Despite the recent sale of Rover Cars from BMW to the U.K.'s Phoenix Consortium, Rover's New Mini remains under the control of BMW. The partnership between BMW and Ricardo, which is currently developing the New Mini, is set to last for another 18 months, but the project's ultimate fate is still unknown. If all goes as planned, the car will be built in BMW's Cowley, England, plant starting early next year.

GAS MARKETERS SHIFT THE BLAME Gasoline marketers are speaking out against the Environmental Protection Agency (EPA) for the agency's enforcement of anti-smog, clean-air gasoline rules. The Petroleum Marketers Association of America accuses the EPA of failing to consider market price as a factor in the agency's consideration of who would give waivers for meeting new, clean gasoline rules. Scarcity of reformulated gasoline, now required for some smog-ridden areas has driven up prices in many areas. In Chicago, prices are now at more than two dollars per gallon. Although the EPA gave a grace period to the St. Louis area due to a pipeline failure, the agency said that no more waivers would be granted.

AVALANCHE FALLS IN ‘01 General Motors has announced that the Chevrolet Avalanche, a cross between a sport-utility vehicle and a pickup truck, will be produced starting early next year for the 2002 model year. The new model will be built at GM's Silao, Mexico plant, which already makes Suburbans. The automaker expects to sell about 100,000 of the vehicles in its first production year.

VOLVO AGREES TO CHANGE AIRBAG DESIGN Volvo has agreed to change the design of the airbags offered in the 2001 Volvo S80, in response to a fault found by the Insurance Institute for Highway Safety during testing. The institute found that the front airbags on the car deployed early, during a 5-mph bumper test, and also that hot gases contacted the driver's hands. Volvo has redesigned the airbag sensing system to activate at higher impact speed, and the vent holes will be redesigned.

PORSCHE’S POSH SPICE Porsche said that it will call its upcoming luxury sport-utility vehicle the Cayenne. Volkswagen shares the platform with Porsche and will be making the bodies for the Cayenne. The company hopes to sell 25,000 of the SUVs in 2003.