Week of August 21, 2000

GM BRINGS CONCEPTS TO PRODUCTION
TIRE PLANT WAS RIDDLED WITH PROBLEMS, SAYS POST
GROUPS URGE EXPANDED RECALL
STATE FARM SAYS IT TIPPED ON TIRE PROBLEM
TIREMAKERS BOOST PRODUCTION
FIRESTONE RECALL UNDER SCRUTINY
FORD EXECS ON THE DEFENSIVE
NHTSA PLANS NEW TIRE TESTS
DC TO OFFER TELEMATICS SYSTEM
GM TO EXPAND CORVETTE PLANT
MINI GETS BMW BADGING
GM MAY NOT SHARE GASOLINE FUEL CELLS WITH TOYOTA
COMMERCIAL TRUCK MAKERS SCALE DOWN
MITSUBISHI’S HEADACHE GROWS
GM STRAIGHT ON SIX

GM BRINGS CONCEPTS TO PRODUCTION General Motors has approved three recent concept vehicles for production. All of them promise to inject some much-needed youthfulness and excitement into the company stable.

• The Cadillac Seville STSi, based on the concept car introduced earlier this year to commemorate Cadillac's return to LeMans, will go on sale within a few months. The STSi will offer a new, supercharged version of the Northstar V-8 rumored to be worth more than 350 hp.
• The Pontiac Piranha, a performance sport-utility coupe for the youth market looks to be a likely downmarket sibling to the Aztac. Rumors suggest that GM's California joint-venture plant with Toyota, NUMMI, is a top contender for production of the Piranha.
• The Buick LaCrosse, a luxury hatchback sedan-pickup hybrid introduced at this year's Detroit Auto Show, offers traditional Buick luxury car virtues but with a convertible pickup-style bed with an 8-foot load floor. The concept car's 4.2-liter V-8 could make its way to production, too.
  

TIRE PLANT WAS RIDDLED WITH PROBLEMS, SAYS POST The Washington Post has revealed findings that Firestone's Decatur, Illinois, plant had severe quality control problems in the mid-1990s. For the recall, Firestone picked out tires manufactured at the facility as over-represented for the number of complaints linked to the failure of Firestone ATX, ATX II, and Wilderness tires. The Washington Post report said that workers at the Decatur, Illinois, plant were encouraged to cover up defects on tires, and that some of the tires made at the facility passed through uninspected. According to the report, witnesses about the practices at the Illinois plant are prepared to testify at future hearings on the safety of the tires.

GROUPS URGE EXPANDED RECALL Several vehicle safety advocacy groups, including Public Citizen and the research firm Strategic Safety, are calling for an expanded recall of all Firestone Wilderness tires. Firestone last week recalled only select 15-inch tires produced at its Decatur, Illinois, facility. Strategic Safety claims that all of the tires should be recalled because the manufacturing process does not differ significantly between facilities or sizes. Ford has taken a measure of responsibility in the recall, as the majority of fatality and injury claims have been in Ford vehicles, so the groups are holding the automaker jointly accountable.

STATE FARM SAYS IT TIPPED ON TIRE PROBLEM Insurer State Farm said that it had tipped the federal government as early as July 1998 regarding the high number of crashes related to Firestone tires. State Farm Insurance Company originally notified the National Highway Traffic Safety Administration (NHTSA) then, when it had attributed 21 crashes to the tires. The NHTSA suspects that State Farm is now attempting to be reimbursed by Bridgestone Firestone for tire-related claims, and says that the State Farm claims were too small to warrant an investigation when they were originally reported.

TIREMAKERS BOOST PRODUCTION Goodyear, Michelin, and Continental have reportedly boosted their production capacity of 15-inch model tires similar to Firestone's ATX, ATX II, and Wilderness tires recalled. Goodyear announced intentions of boosting production by as much as 500 percent within months. Since Firestone announced the recall, that covers 6.5 million tires, many consumers have been demanding non-Firestone replacement tires. Firestone and Ford have been paying for the non-Firestone tires if customers request them. Firestone says that it replaced 200,000 of the affected tires during the first week of the recall.

FIRESTONE RECALL UNDER SCRUTINY A United States House of Representatives subcommittee on consumer protection is likely to soon hold hearings on the recent Firestone recall. The issue at question is whether Firestone waited too long to inform the public and recall 6.5 million potentially defective tires. The National Highway Traffic Safety Administration is currently investigating the tires, which so far have been connected to 62 deaths and 100 injuries.

FORD EXECS ON THE DEFENSIVE Ford chairman William Ford Jr. and chief executive Jac Nasser have found themselves on the defensive in the past few days. Nasser said in a USA Today interview that he is frustrated with the pace of the Firestone recall efforts, and that the automaker has been considering alternatives to hasten the recall process. Alternatives would be for Ford to offer worried Ford Explorer drivers free rental cars, or to offer those tires allocated for new Explorers to customers for replacement. William Ford Jr. in a separate interview critically pointed out that the Firestone tire recall has nothing to do with the design of the Explorer. Of the 6.5 million Firestone tires recalled last week, the majority were installed as original equipment on Ford Explorers.

NHTSA PLANS NEW TIRE TESTS The National Highway Traffic Safety Administration (NHTSA), in a reaction to the Firestone tire-safety scare, plans to establish new tire safety regulations, says the New York Times. The NHTSA is considering testing tires at higher speeds than it presently does, and the group is currently reviewing 750 reported cases of tire failure.

DC TO OFFER TELEMATICS SYSTEM DaimlerChrysler will offer a competitive wireless, in-car communications system by 2003, reports Bloomberg News. DC's new, widely used system, which may share componentry with the Mercedes-Benz division's existing Tele-Aid system, would be quickly offered along all of its model lines, likely at first as an option. The system would require subscription fees for varied services, in a similar manner to GM's existing OnStar and Ford's upcoming Wingcast services.

GM TO EXPAND CORVETTE PLANT General Motors will likely enact a $39 million expansion of its Bowling Green, Kentucky, Corvette assembly plant. Although the company has not yet revealed the exact purpose of the expansion, which could be to make room for the eventual assembly of Cadillac’s upcoming Evoq roadster alongside the Corvette, it could add more than 100 new workers to the 1000-worker plant.

MINI GETS BMW BADGING BMW has clarified that the new Mini will be called "Mini by BMW Group." The new Mini, to first be shown to the public at the upcoming Paris auto show next month, will go on sale in Europe next year and in the United States in 2002. BMW hopes to sell 100,000 of the cars worldwide per year, with about 20,000 going to the U.S.

GM MAY NOT SHARE GASOLINE FUEL CELLS WITH TOYOTA Although a technology alliance exists between General Motors and Toyota Motor Corporation, a new gasoline fuel-cell technology unveiled recently by GM and Exxon may not be covered by the alliance, reports Bloomberg News. In an April 1999 agreement, GM and Toyota agreed to share technology for fuel-cell, hybrid-power, and low-emissions cars, although gasoline-processor fuel-cell technology between GM and Exxon began in 1998. The system, unveiled by the two companies last week, extracts hydrogen, used to power fuel-cells, from ordinary gasoline. No combustion takes place in the new system, and emissions are greatly reduced.

COMMERCIAL TRUCK MAKERS SCALE DOWN Truck makers Freightliner and engine maker Navistar both plan to greatly reduce their workforces, in response to an anticipated downturn in new commercial long-haul truck purchases. Chicago-based Navistar International will eliminate about 1100 workers, about 15 percent of its workforce, while DaimlerChrysler's Freightliner will cut 3745 jobs, nearly a quarter of its workforce, at various North American plants.

MITSUBISHI'S HEADACHE GROWS Bloomberg News reports that sources have revealed that Mitsubishi Motors has received product complaints regularly for the past 30 years. After a 1969 Japanese law required informing the government of complaints and recalls, the sources accuse the company of intentionally withholding the information. The withheld information could potentially have been used for recalls on common North American models. In recent weeks, Mitsubishi has admitted to accidentally withholding records dating back to 1992, and the automaker followed up with a 600,000-vehicle recall. DaimlerChrysler recently expanded its relationship with Mitsubishi, now at a 34-percent stake.

EU APPROVES GM-FIAT ALLIANCE The European commission has officially approved of the alliance between General Motors and Fiat SpA. The EU said in a statement that it considers the alliance a means of improving both companies' ability to compete with other manufacturers. General Motors and Fiat are already in the process of consolidating some redundant powertrain operations in Europe, and GM's Opel division and Fiat plan to produce future joint-venture models.

GM STRAIGHT ON SIX General Motors has revealed information about its upcoming inline six-cylinder engine. According to AutoWeek, the new engine, with variable valve timing, will make 270 hp and 275 lb-ft of torque, and it will be dubbed the Vortec 4200. The new engine family, set to be offered in GM's 2002 midsize SUVs, such as the Oldsmobile Bravada, Chevrolet Trailblazer, and GMC Envoy, will include inline four- and five-cylinder engines later on.