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FORD WINS BIDDING WAR FOR
DAEWOO
DC AND HYUNDAI FORM ALLIANCE
MICHELIN AND GOODYEAR JOIN FORCES
LEAR
TO HELP MAKE GM VANS
BMW WILL EXPAND IN SOUTH
CAROLINA
AUDI ISSUES RECALL
MESA
PROVING GROUNDS TO CLOSE
HYUNDAI FLIP-FLOPS ON
STRATEGY
NISSAN TO RESTRUCTURE FINANCIAL ARM
WISCONSIN LEGISLATORS TRY TO BLAME THE EPA
ENVIRONMENTALISTS CRITICIZE GORE
PLAN
FORD WINS DAEWOO BIDDING WAR Ford Motor Company has been selected as the preferred bidder for Korea's Daewoo Motor Company. Although Ford’s initial bid was for $6.9 billion, the bidding price and conditions will likely change during negotiation. Daewoo negotiation officials have said that Ford’s bid far surpassed those made by GM-Fiat and DaimlerChrysler-Hyundai. Negotiations between Daewoo officials and a committee of creditors will take about six weeks, and should they fail, the opportunity will be offered to the next highest bidder.
For more on the Ford-Daewoo bidding, click here.
DC AND HYUNDAI FORM ALLIANCE DaimlerChrysler and Hyundai are forming an alliance, for which DaimlerChrysler is paying $428 million for ten percent of Daewoo. The alliance provides for joint-venture collaborations on commercial vehicles between the two companies and co-development on passenger cars with Mitsubishi Motor Company. The two companies also announced that they will proceed to submit a joint bid for Korea's Daewoo Motor Company.
For more on the Hyundai/DC alliance, click here.
MICHELIN AND GOODYEAR JOIN
FORCES Michelin and Goodyear announced a joint venture for run-flat tires.
The venture will aim at establishing an industry standard for run-flat designs,
which allows motorists to continue to drive safely on a flat for a limited
distance. The two companies will share their established patents for run-flat
technology, and the venture may not necessarily result in joint
products.
LEAR TO HELP MAKE GM VANS Lear
Corporation will benefit from a new joint-production plan with General Motors.
According to Automotive News, Lear will complete assembly of up to 15,000
full-size GM vans per year in a Lear facility. GM will assemble the vans
partially and then send them to Lear, where the vans will receive interior
fittings and exterior trim. The new vans, which will be more expensive and more
luxuriously fitted, will be shipped back to GM prior to distribution to dealers.
The vans are costly, at about $10,000 more than a regular full-size van, but GM
hopes to conquer some of the conversion van market.
BMW WILL EXPAND IN SOUTH CAROLINA
BMW announced a $300 million investment to expand production of X5 sport-utility
vehicles at the company's South Carolina facility, due to high demand. The
expansion will likely include about 500 new jobs at the factory, called BMW
Manufacturing Corporation.
AUDI ISSUES RECALL Audi has
issued a voluntary recall of some Audi A6 quattro models in the U.S. and Canada
for faulty fuel-gauge sending units. The sending units, which communicate to the
fuel gauge and onboard computer the level of fuel remaining in the tank, have
been shown to go bad due to some fuel additives. Shortly before the recall was
issued, a class action lawsuit alleging malfunctioning fuel gauges was filed
against Audi. The lawsuit alleges that Audi has known about the problem for 20
months and had failed to alert customers--until today. The recall affects more
than 50,000 1998, 1999, and 2000-model-year vehicles.
MESA PROVING GROUNDS TO CLOSE
The Detroit News reports that General Motors plans to close its Mesa,
Arizona, Desert Proving Ground by the end of 2002. The automaker hopes to open
an entirely new, $60-million site in Mezcala, Mexico, in 2002. The Mexico
facility will give GM the opportunity to test vehicles at scorching temperatures
in the winter months. Due to shorter vehicle development times, GM has had
trouble planning the tests. The Mesa facility has been in operation since
1953.
HYUNDAI FLIP-FLOPS ON
STRATEGY Korea's Hyundai Group has affirmed that automotive operations will
take a center stage in the company. The move, which comes only a couple of days
after an announced alliance with Daimler Chrysler AG, is in conflict with what
the company has recently said. Just a few weeks ago, Hyundai said that it
planned to spin off its automotive unit, Hyundai Motor, as a separate
firm.
NISSAN TO RESTRUCTURE FINANCIAL
ARM Nissan Motor Company will combine three of its finance units into one,
in order to strengthen its consumer auto finance operations. The new
organization, which will provide consumer services like credit cards and auto
financing through dealerships in the U.S. and Asia, will combine Nissan Credit
Corporation with Japanese financial affiliates. In Europe, Mexico, and South
America, Nissan will rely on Renault's existing financing
operations.
WISCONSIN LEGISLATORS
TRY TO BLAME THE EPA Wisconsin legislators are suing the Environmental
Protection Agency (EPA) over what they deem unreasonable price consequences of
enactment of new clean fuel requirements in the Milwaukee area. Although the EPA
estimated the price increase due to the new reformulated gas to be about 1.2
cents per gallon, prices have risen as much as 50 cents per gallon throughout
parts of the Midwest. Experts say that oil refiners seem to be cashing in on
what many have described as a situation in which demand far exceeds supply, and
that prices will fall back to their previous level after a few months. The EPA
and experts investigating the situation insist that the problem does not stem
from the reformulated gasoline, but from a number of factors, including oil
refiners' lack of preparation for the new requirements. The movement, started by
Wisconsin Republicans, seeks a suspension of the new Clinton-backed rules, which
are aimed at cleaning up smog problems.
ENVIRONMENTALISTS
CRITICIZE GORE PLAN Vice President Al Gore's plan to support industry
development of more fuel efficient cars through incentives is being attacked by
environmental groups, who say that the incentives would allow automakers to
convince lawmakers not to raise fuel-economy standards, says the Wall Street
Journal. The Sierra Club and Friends of the Earth, and also presidential
candidate Ralph Nader, have spoken out against the plan. Another plan announced
by Gore earlier in the week, proposing tax credits for people who buy more
fuel-efficient vehicles, has had a warmer reception from environmentalists thus
far.
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