Week of March 27, 2000

For more on the DC-Mitsu deal, click here

RESIDUALS FROM ROVER BREAKUP After agreeing to buy Land Rover, Ford is in the logical position to acquire Rover’s R&D division, according to British Trade and Industry Secretary Stephen Byers. Meanwhile, Rover’s new owner, Alchemy Partners, announced it will hire Chris Woodwark, a former exec at Rolls-Royce and Rover, to head the new company. BMW still has a lot to work out before the sale is complete, including cooperating with the British government to try to minimize the job cuts when the sale goes through. Despite all of the forward steps to sell Rover to Alchemy, the British government still says it’s not too late for other bidders and U.K. millionaire John Hemming said he’s gathered five investors in an effort to place a rival bid.

GM CONTINUES TO TANGO General Motors forged an alliance with Fiat partially to keep it away from competitors, according to the head of GM’s Adam Opel AG unit. Although Fiat has a put option with GM, Fiat chairman Paolo Fresco said that he didn’t think it would be selling the remaining stake to its new American partner. Separately, a CNBC news report that News Corp. and a subsidiary of AT&T were interested in buying GM to get at its Hughes’ satellite TV unit caused GM stock to jump. GM declined to comment on the report, while a News Corp. spokesperson said it was false.

FIAT TO PROPOSE TO VOLVO, SCANIA After announcing an alliance with General Motors last week, Fiat is contemplating a deal with truckmakers AB Volvo and Scania AB. The European Union recently rejected a proposed merger between the two truckmakers, which would have made it the world’s second-largest truck and bus manufacturer. Milan’s daily newspaper said that it was likely Fiat and Iveco, its truck unit, would only be interested in bidding for Scania.

RENAULT, SAMSUNG CONTINUE NEGOTIATIONS Renault will start negotiating with Samsung’s creditors again next week in an effort to buy the Korean automaker. Samsung’s creditors said that it would issue a formal counter-offer this week to Renault. Of the talks next week, one of the main creditors said it "expects Renault to change its position" on the purchase price or there will not be a deal.

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M-B C-CLASS DEBUTS Mercedes-Benz has taken the covers off its redesigned C-Class, according to a report in Automotive News. Sources told Automotive News’ sister publication Autoweek that the ultra-power C32 AMG model will have a supercharged 3.2-liter V-6 that produces at least 320 horsepower. Other revisions include an upgrade from a double-wishbone suspension system to a three-link unit made primarily out of aluminum. The C-Class is slated to hit U.S. dealers this fall as a 2001 model.

SUBARU’S CONCEPT ST-X TO BECOME SUV FOR U.S. Subaru’s parent company, Fuji Heavy Industries will develop a new SUV for the North American market that is based on the part-car, part-truck ST-X concept vehicle introduced at the Los Angeles Auto Show. Japan’s Nihon Keizai reported that the new SUV, which could arrive as early as 2002, will be supplied to dealers who have relationships with GM, who owns a stake in Subaru. The vehicle is to be assembled at the Subaru-Isuzu plant in Indiana.

NISSAN’S HIRSHBERG TO RETIRE Jerry Hirschberg, head of Nissan’s southern California design studio, Nissan Design International, will retire after a 20-year stint with the company, according to an Automotive News report. His last day with the company, June 30, is his 60^th birthday and will be the day the new Z car design will be finished. Hirshberg, who plans to continue working with Nissan as a consultant, said that it is possible he will continue to appear in Nissan TV commercials, since his designs will debut until 2003.

SUVS GET CAR-FRIENDLY Many auto manufacturers have said they will be making modifications to future SUVs to help reduce the risk of injury to others during accidents, according to a New York Times article. The changes will be designed to reduce the possibility of the SUVs riding over the bumpers and doorsills of a small vehicle. General Motors, Ford and DaimlerChrysler as well as Toyota, Nissan, Honda and Mitsubishi have all said they will make changes.

DAEWOO SALE EXPECTED BY SEPTEMBER The impending sale of Korean carmaker Daewoo Motor should be completed by September, said the head of the committee overseeing the restructuring. Oh Ho-keun said that the field of candidates to purchase the company would be narrowed to one or two by the end of May. General Motors, Ford, DaimlerChrysler, Fiat SpA and Hyundai are all interested in purchasing the ailing automaker.

EV1S CAN BE FIXED, BUT NOT EASILY After recalling all of its 1996 EV1 electric cars earlier this month, stating they could not be repaired, General Motors engineers have developed a new charge port system. The company, however, estimates that the repaired EV1s will not be available for about a year, because it needs to find a supplier, prepare for production, produce the replacement systems and then perform the repairs. Because of the delay, GM will be refunding the current payments and then terminating the lease on each 1996 vehicle.

FEDS SNIFF AROUND ONLINE SUPPLY SITE The Federal Trade Commission is launching a preliminary inquiry into plans by the Big Three automakers to build an online supply network, according to the Wall Street Journal. Officials will look at the network’s structure and assess the possibility of the illegal practice of price signaling. The inquiry comes before General Motors, Ford and DaimlerChrysler have filed with the commission for review.