FORD RESUMES PRODUCTION
NHTSA
EXPANDS INVESTIGATION
FORD AND FIRESTONE CLASH
HOUSE HEARING GRILLS FORD, FIRESTONE
ANOTHER HEADACHE FOR BRIDGESTONE
CONTINENTAL RECALLS 160,000 TIRES
SECOND TIRE RECALL HURTS FORD’S IMAGE
NHTSA INVESTIGATES FORD STEERING
FORD-DAEWOO DEAL COLLAPSES
DAEWOO OPEN FOR
BID AGAIN
MITSUBISHI ACCUSED OF FAKING SALES
NUMBERS
DC COURTING CHINESE COMPANIES
SATURN PAYING EMPLOYEES TO LEAVE
DC MIGHT
BRING SMART TO U.S.
BRAZILIAN GOLFS RECALLED
FORD RESUMES
PRODUCTION Ford Motor Company resumed production at three of its light-truck
assembly plants that had been held idle for three weeks. Over the idle time,
Ford says it rerouted more than 100,000 tires toward recall replacement rather
than production. The plants that have been held idle normally produce Ford
Ranger and Mazda B-Series pickups and Ford Explorer SUVs. Ford says that the
shutdown cost 23,500 Rangers and 15,000 Explorers. Most of the Ranger output can
be made up, although Explorer production won't be made up until sometime next
year.
NHTSA EXPANDS
INVESTIGATION The National Highway Traffic Safety Administration has
expanded its probe of Firestone tires to include 47 million similar-design tires
made by the tiremaker since 1991, in addition to the 6.5 million already
recalled, reports USA Today. The agency also plans to upgrade its investigation
of the matter to include its own engineering analysis. Of the similar-model
tires, some were sold under different brand names. If the NHTSA's engineering
analysis shows the other tires to be defective by design or production methods,
then the agency would ask that all 47 million tires be recalled.
FORD AND
FIRESTONE CLASH Ford and Firestone have once again exchanged criticisms
regarding the recent Firestone tire recall. According to the Detroit
News, Ford released a report indicating that Ford Explorers equipped with
Firestone tires were about ten times as likely to be involved in a fatal
rollover crash than those Explorers equipped with Goodyear tires. Firestone's
vice president, John Lampe, responded by criticizing Ford's choice to recommend
a lower pressure for the tires. Ford says that both Goodyear and Firestone tires
were made to the same specification, and yet there is such a different safety
record between the two.
HOUSE HEARING
GRILLS FORD, FIRESTONE U.S. Representative Billy Tauzin, the leader of the
latest House Commerce subcommittee hearing looking into last month's recall of
6.5 million tires, accused both Ford and Firestone of misleading the public. The
House panel looked into reasons why Ford used a converted F-150 pickup to test
handling characteristics with the tires, and also requested more missing
documents from the automaker. Ford had, earlier in the recall, said that the
tire tests had been done on an Explorer. The panel concluded that no one had
ever conducted high-speed tests of the Explorer with the Firestone tires
inflated to 26 psi as advised. Panel members questioned testing practices of
Firestone, while Firestone turned the table to Ford and again said that it had
recommended higher pressures for the tires than those advised by Ford. The
committee then refocused the attention to Firestone by referring to tests the
tiremaker had conducted that indicated a high failure rate in randomly selected
tires. Failure of the tires is now linked to 101 deaths, and the NHTSA has since
expanded the investigation to about 47 million tires.
ANOTHER
HEADACHE FOR BRIDGESTONE Bridgestone Corporation is facing yet another
potential problem with defective tires. Owners of high-performance Audi S4
models equipped with Bridgestone Potenza RE040 tires are claiming problems with
sidewall bubbles on the tires. The tires, used on 6000 2000-model cars, have not
been linked to any accidents although the National Highway Traffic Safety
Administration (NHTSA) has received at least twelve complaints regarding the
tires.
CONTINENTAL RECALLS 160,000 TIRES Continental General Tire
Incorporated has voluntarily recalled about 160,000 tires due to reports of
tread separation. The tires, 16-inch ContiTrac models, were featured as standard
equipment on about 38,000 1998 and 1999 Lincoln Navigator sport-utility
vehicles. Ford and Continental are not aware of any crashes caused by failure of
the tires, and both companies have stressed that the recall has been made as a
customer-satisfaction issue. The recall is expected to cost Continental about $5
million.
SECOND TIRE
RECALL HURTS FORD IMAGE Ford lost even more consumer confidence due to last
week's recall of Continental tires on Lincoln Navigators, reports Bloomberg
News. According to a survey by CNW marketing research, on September 19, 47
percent of potential buyers rated Ford products below average in overall safety,
compared with only 9.6 percent on July 15. On September 14, before the most
recent Continental recall, the figure was at 42 percent. Thirty-two percent of
potential Navigator buyers said that the recall would affect their buying
decision. Continental recalled about 160,000 ContiTrac tires yesterday, mostly
installed as original equipment on Lincoln Navigators.
NHTSA
INVESTIGATES EXPLORER STEERING The National Highway Traffic Safety
Administration has opened an investigation into reports of failure of front
stabilizer bars in 1995 and 1996 Ford Explorers. The problem, unrelated to the
recent Firestone tire recall, hasn't yet been linked with any accidents or
injuries. Breakage of the stabilizer-bar link may cause clumsy handling and
noise, says Ford. The investigation was opened after seven of fourteen Explorers
brought in for inspection by the NHTSA were found to have broken or missing
stabilizer-bar links.
FORD-DAEWOO DEAL
COLLAPSES Ford Motor Company has withdrawn interest in Korea's Daewoo Motor.
The company issued a statement saying that the deal was deemed "...not in the
best interest of Daewoo and Ford..." To expand its Asian-market presence, Ford
will likely pursue alternatives with Japan's Mazda Motor Corporation as an
alternative to the deal. According to reports, Ford may have withdrawn interest
in the Korean automaker partially because of a recent slowing in growth in Asian
markets, Daewoo's ageing models, and tremendous debt to creditors. Experts
anticipate that General Motors may soon make a bid for an amount far lower than
Ford's preliminary bid of $6.9 billion.
DAEWOO OPEN FOR
BID AGAIN South Korea's Daewoo Motor has been placed back on the auction
block, just days after Ford Motor Company announced a withdrawal of its bid and
interest in the Korean automaker. General Motors is highly likely to put forth a
joint bid (with Fiat) for Daewoo, and creditors of Daewoo may allow Hyundai to
make a bid in order to get a higher price from likely buyers GM and Fiat. The
creditors had originally hoped that DaimlerChrysler and Hyundai would submit a
joint bid as they had in the first round, however DC announced that the company
had no intentions of doing so. The creditor banks of Daewoo said that they would
make a decision on any new bids by October 20. Daewoo's creditors also strongly
criticized Ford's business ethics for withdrawing from the deal at such a late
date.
MITSUBISHI
ACCUSED OF FAKING SALES NUMBERS Mitsubishi Motors now faces another
scandal—this time in the U.S. Automotive News reports that Mitsubishi's
sales arm has been faking sales numbers in order to meet quotas and incentives.
The report estimates that as many as 21,000 fake sales could have been included
in Mitsubishi's sales earlier this year. Most of the fraudulent sales claims
involve vehicles that have been "burned," referring to cars marked as sold
sometimes months before they actually are. The potentially fraudulent practice
often indicates a false name as the first owner of the vehicle. Mitsubishi
buyers are advised to check records and make sure that the purchase date and
retail delivery record date match.
DC COURTING
CHINESE COMPANIES DaimlerChrysler is hoping to soon establish a partnership
in China, says Bloomberg News. The company is reportedly most interested in the
commercial-truck market. DC has conducted preliminary talks with several Chinese
truckmakers in recent weeks. Within ten years, the commercial-truck market in
China is expected to be twice as large as Japan's.
SATURN PAYING
EMPLOYEES TO LEAVE General Motors' Saturn Corporation division is offering
bonuses to employees who want to leave their jobs. The automaker is faced with
slow sales and too many employees with jobs bound under a United Auto Workers'
contract. Saturn is reportedly offering some workers up to $25,000 to take
leaves of absence, retire, or quit. About 400 of the 6000 Spring Hill,
Tennessee, workers are expected to accept the offer. Saturn says that the slump
is only temporary, and that the start of production of its upcoming
sport-utility vehicle next year will fill the gap.
DC MIGHT BRING
SMART TO U.S. According to an Associated Press report, DaimlerChrysler is
considering bringing its Smart minicar for sale in the U.S., Japan, and Taiwan.
The Smart, a two-seater that's sold in Europe for less than $10,000, has
attained somewhat of a cult following since its 1998 introduction. Sources in
the report say that a four-seat Smart may be offered in the U.S., although
introduction may be delayed by several years because the model would first have
to pass a full battery of U.S. crash-test and safety regulations.
BRAZILIAN
GOLFS RECALLED Volkswagen has announced a recall of some 2000 and 2001
Brazilian-made Golf models for a possible suspension defect in the control arm.
The recall covers 4218 cars in the U.S., 1448 in Canada, and about 28,000 Golfs
and Audi A3s worldwide. All of the cars recalled were made in VW's new Parana,
Brazil, assembly plant.
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