Week of August 28, 2000

August 28, 2000

MITSUBISHI FACES COVER-UP
MITSUBISHI: PROBLEMS DON’T AFFECT U.S.
NHTSA INVESTIGATES MITSUBISHI
POST: FORD RECOMMENDED UNDERINFLATION
FORD STOPS PRODUCTION TO MAKE TIRES AVAILABLE
FIRESTONE TO AIRLIFT TIRES
LAWSUIT SEEKS EXPANDED RECALL
ROVER AND PROTON?
CADILLAC TO PRODUCE EVOQ
VW’S MEXICAN WORKERS STRIKE
SALES DROP FOR U.S. AUTOMAKERS
AMAZON.COM SELLS CARS
M-B WILL OFFER ARMORED MODEL
VOLVO RECALLS FOR SUSPENSION REPAIR
LOLA WILL MAKE NEW MG
CAMARO AND FIREBIRD SALES SLOW

 

MITSUBISHI FACES COVER-UP Mitsubishi Motors of Japan has confessed that it has unreported consumer-complaint data dating back to 1977. Mitsubishi originally opted to fix the cars by individual complaint rather than using them to launch recalls, and the automaker said that the practice was known by high-level management. Last month, Mitsubishi announced the recall of about 600,000 cars due to unreported complaints in the 1990s, although a Japanese government investigation in progress suggested that the automaker may have improperly reported complaints all the way back to 1969, when they were first required to be reported. The developments will lead to a greatly expanded recall of vehicles and likely, a decrease in consumer confidence in the brand. Various estimates have placed the recall at as many as a million vehicles worldwide, with about 200,000 U.S. vehicles made in Japan potentially affected. DaimlerChrysler now owns 34 percent of Mitsubishi Motors.

 

 

MITSUBISHI: PROBLEMS DON’T AFFECT U.S. Mitsubishi Motor Sales of America said that the large-scale recall problems announced by Mitsubishi in Japan will not significantly affect Mitsubishi's operations in the U.S., as the problems apply to particular Japanese-made vehicles. Mitsubishi in the U.S. plans to recall only about 10,000 1995 and 1996 Galants for a possible problem with the fuel tank, and possibly some additional Mirage models with potential crankshaft pulley problems. Mitsubishi Motors in Japan has admitted to improperly withholding recall data dating back to 1977.

 

NHTSA INVESTIGATES MITSUBISHI The National Highway Traffic Safety Administration (NHTSA), a federal auto safety agency, is prepared to investigate the safety of Mitsubishi's U.S. cars, in light of a recent admission by Mitsubishi in Japan that the automaker had concealed safety complaints from the government for more than 20 years. Although there is no evidence that Mitsubishi Motor Sales of America withheld such information, the NHTSA wants reassurance from the U.S. arm that information wasn't withheld on U.S. cars in the same manner. Just over 10,000 U.S. cars were affected by an expanded Mitsubishi Motors recall after the Japanese announcement.

For more on Mitsubishi’s Japanese recall cover-up and its U.S. implications, click here

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POST: FORD RECOMMENDED UNDERINFLATION A Washington Post report says that Ford originally told owners to underinflate the tires on their Ford Explorers for better vehicle stability. In 1989, Ford found that the Explorer would be significantly less stable with its tires at 35 psi than at 26 psi. The automaker recommended the lower pressure of 26 psi to reduce chances of rollover, although lower tire pressures can cause problems with heat buildup at high speed. The report said that Ford is currently investigating a connection between the recommended pressure and the incidents. Recently, Ford officials partially blamed consumers for keeping their tires underinflated.

 

FORD STOPS PRODUCTION TO MAKE TIRES AVAILABLE Ford Motor Company has announced that it will suspend production at three of its light-truck plants in order to make up to 70,000 tires meant for production vehicles available as replacements in the 6.5-million-tire Firestone recall. The affected plants, in Minnesota, Missouri, and New Jersey, will close from August 28 through September 8. Because of the shutdown, Ford will lose production of about 10,000 Rangers and 15,000 Explorers and Mountaineers.

 

FIRESTONE TO AIRLIFT TIRES Bridgestone Firestone has announced that it plans to help remedy the supply shortage of recall replacements by airlifting tires from tire plants in Japan to the U.S. Shipments of P235/75R15 tires, currently at a shortage in the U.S. due to the recently announced 6.5-million tire recall, will begin today and last as long as necessary. Firestone, reacting to public outrage and several more deaths since the recall announcement, now intends to have the recall replacements complete before spring, rather than late summer as originally announced.

 

LAWSUIT SEEKS EXPANDED RECALL The Center for Automotive Safety, the consumer watchdog group founded by presidential candidate Ralph Nader, has filed a lawsuit that seeks to replace Firestone tires affected by the recall immediately. The group also alleges in the suit that the total number of tires recalled, 6.5 million, is less than half of the number potentially affected by the defects.

For an update on the Firestone tire recall, click here

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ROVER AND PROTON? Bloomberg News reports that Rover Cars has entered talks with Perusahaan Otomobil Nasional, otherwise known as Proton. Although the extent of the talks is not yet known, the two companies could create a joint venture to develop a new platform shared by the two companies and built in both countries. Proton already is the majority owner of British specialty automaker Lotus. Rover stands by its plan to produce 200,000 cars per year and be profitable by 2002.

For more on Malaysia’s Proton, click here

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CADILLAC TO PRODUCE EVOQ Cadillac has announced that it will build its Evoq two-seat sports car in 2002. The Evoq, originally shown in last year’s Detroit Auto Show as a concept car, will be built at GM's Corvette facility in Bowling Green, Kentucky, confirming speculation this past week that GM's upcoming expansion of the plant is to accommodate the Evoq. The Evoq will share the Corvette's platform, but it will likely be a lower-volume car to compete against luxury/prestige coupes such as the Lexus SC 430.

 

VW’S MEXICAN WORKERS STRIKE Auto workers at Volkswagen's Puebla, Mexico, assembly plant went on strike on Friday, August 18, over wage disputes. Workers at Volkswagen's Puebla, Mexico, assembly plant returned to work after the five-day strike was determined to be illegal. Volkswagen stated that if the workers would not return to work they would be fired. The 12,600 workers at the plant had been on strike to ask for higher pay. The strikers said that they think that VW isn't sharing its global prosperity with the Mexican workers. The union originally requested a 36-percent raise, but later said it would settle for 20 percent. VW originally offered only nine percent, but later offered 12 percent. The plant assembles New Beetles, Jettas, Golf Cabrios, and old Beetles.

 

 

SALES DROP FOR U.S. AUTOMAKERS According to Bloomberg News, overall U.S. new-vehicle sales are predicted to fall by 0.9 percent in August. Hardest hit again will be the domestic automakers. GM's sales are anticipated to fall by 3.8 percent, while Ford's sales, suffering due to the Firestone recall, are predicted to fall by 9.5 percent. Several import brands are expected to continue to gain sales in August.

 

AMAZON.COM SELLS CARS Amazon.com has launched a new car-buying site. The car-buying service, jointly provided with Greenlight.com, will offer side-by-side feature comparisons and no-haggle prices online and be tied in with the Amazon.com name. It is first offered in 27 markets around the country. Greenlight.com has reportedly agreed to pay Amazon.com $15.25 million for a two-year partnership with the Internet giant.

 

M-B WILL OFFER ARMORED MODEL DaimlerChrysler will begin offering an armored version of its new S-Class, the S500 Guard. The sedan features run-flat tires, steel armor plating, and security glass. The model, Mercedes-Benz's first official U.S. armored-car offering, starts at $153,950 and will go on sale in November.

 

VOLVO RECALLS FOR SUSPENSION REPAIR Volvo Cars is recalling S80 models and some V70 models to replace potentially defective ball joints. About 116,000 1999-model and 2000-model S80s and 700 2000-model V70s are affected. Volvo says that the cars will be recalled immediately for the front suspension repairs.

 

LOLA WILL MAKE NEW MG The Rover Group has announced that it will develop a new MG sports car in time for the 2001 LeMans 24-hour race. Rover, now run by former Rover chief executive John Towers and his Phoenix Consortium, says that the car will be developed by Lola Cars International. Rover also announced that it intends to soon start selling Rover and MG in Australia and South Africa.

 

CAMARO AND FIREBIRD SALES SLOW General Motors will halt production of Chevrolet Camaro and Pontiac Firebird models the last week in September because of excess inventory, reported Reuters. The plant where the two cars are made, in Ste-Therese, Quebec, employs about 1250 workers.

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