Week of October 9, 2000

October 9, 2000




ANOTHER FIRESTONE PROBLEM TIRE A new National Highway Traffic Safety Administration (NHTSA) report shows a high level of accidents associated with yet another Firestone brand of tires. The tires, Steeltex R4S snow tires and A/T all-terrain light-truck tires, are installed as original equipment on the Ford Super-Duty F250 and F350 pickups, Ford Excursion, Chevrolet/GMC Suburban and Ford Econoline vans. The NHTSA already has about 160 complaints, two deaths, and twelve injuries. NHTSA officials said that there may be an increase of accident reports due to the recent Firestone tire-recall-mania, although the agency hasn't collected the level of complaints from other tire brands.


RECORD NUMBER OF RECALLS Last year, while 16.9 million vehicles were sold, a record 19.9 million vehicles were recalled in the United States. The Detroit News reports that the higher scale of recalls may be the signal of deep quality control issues within the auto industry. Suggested reasons for the high rates of recalls may be the record rate at which factories have been producing vehicles for the last several years, shorter product cycles and less time to revamp factories for changes, and more technologically complex features on vehicles. Automakers instead say that the higher frequency of recalls indicates a greater commitment to fix problems.


2001 FUEL-ECONOMY RATINGS RELEASED The U.S. Environmental Protection Agency (EPA) has released its annual fuel economy ratings for the 2001 model year. The Honda Insight and Toyota Prius hybrid gasoline-electric cars, respectively, take the top ratings this year, followed by Volkswagen's diesel models. Honda's Civic HX had the highest rating for an ordinary gasoline-powered car, and Toyota's front-wheel-drive RAV4 had the best rating for an SUV. Among light trucks, General Motors' GMC K1500 Sierra pickup was worst, with an 11 mpg city and 15 mpg highway rating. Here are the top-rated models for fuel economy this year, and their actual ratings (city/highway mpg):

  1. Honda Insight (61/68)
  2. Toyota Prius (52/45)
  3. Volkswagen New Beetle TDI (42/49) [Three-way tie]
  4. Volkswagen Jetta TDI (42/49)
  5. Volkswagen Golf TDI (42/49)


PROTON AND ROVER Malaysian automaker Perusahaan Otomobil Nasional, known elsewhere as Proton, says that it has no plans to buy shares of Rover, even though Rover's chairman, John Towers, has said that Proton is interested in buying Rover, according to Bloomberg News. Proton said that it is still in negotiations for an alliance with the U.K.'s Rover Group, though. The Malaysian company is looking to form an alliance for future joint ventures that would cut costs in supplying cars to more markets.


JAPAN FINES MITSUBISHI Mitsubishi Motors Corporation has been ordered to pay the equivalent of only about $37,000 for incidents related to its customer-complaints cover-up. Earlier this year, Mitsubishi admitted that it had not revealed customer complaints that could have led to recalls, dating back more than twenty years. The fine, levied by a Tokyo court, punished Mitsubishi the maximum allowable amount for four separate recalls since 1998 in which the company did not notify government regulators. Japan is in the process of toughening its penalties for such violations.


TOP FIRESTONE OFFICIALS TO BE REPLACED Automotive News reports that Bridgestone Firestone's U.S. president, Masatoshi Ono, will soon be replaced. According to comments from Bridgestone's president, Yoichiro Kaizaki, the U.S. division's top officials will likely all be replaced in order to mend the image of the Firestone brand, and communications departments will be made closer to management. In the first weeks of the Firestone recall, Kaizaki said that Bridgestone had failed in instilling its quality standards into Firestone. Bridgestone bought Firestone Tire and Rubber in 1988.


CA APPROVES ZEV SUBSIDY California's governor has approved a bill that allocates $18 million in subsidies for electric cars that are purchased under the new Zero-Emission Vehicle Mandate. The bill would allow a tax credit of up to $9000 per zero-emission vehicle. The Alliance of Automobile Manufacturers applauds the subsidy, and says that it will make the sales targets for cars under the mandate more achievable. The mandate requires at least ten percent of cars sold in California to be ZEV vehicles.


ROUSH TO MAKE FASTER FORDS Roush Industries has announced that it will be creating a full line of Ford high-performance production vehicles. The vehicle line, to be marketed through Roush Performance, will include high-performance versions of the Mustang, Focus, F-150, and Expedition. The Roush Stage III Mustang will be introduced first, at the SEMA show in Las Vegas later this month. The vehicles will be modified at assembly facilities in California, Texas, Colorado, and Michigan.


DAEWOO TO BUILD NEW FACILITY Daewoo plans to make parts delivery faster with a new part-distribution facility near Atlanta, Georgia. The Suwannee Creek Distribution Center will keep a parts inventory for dealerships and other customers in the eastern and Midwestern states, regions where Daewoo sales have been growing fastest. The new facility will begin business early next year.


SCIENTISTS WILL REVIEW ROLLOVER RATINGS Members of Congress have made a deal to move ahead with government rollover ratings, with the stipulation that the National Academy of Sciences will review the new National Highway Traffic Safety Administration (NHTSA) testing methods. The ratings were approved as part of a major transportation bill that includes provisions to make states set their blood alcohol limit to 0.08 percent.


EXPLORER SALES STRONG Ford Motor Company asserts that sales of its Explorer sport-utility vehicle have stayed strong despite bad press from the Firestone tire recall, says an Associated Press report. The automaker reported a modest 1.1-percent increase in sales through September, although it does include sales of the new Explorer Sport Trac crossover pickup. Ford says that in future months there will be a supply shortage of Explorers due to the three-week shutdown of assembly plants to make more Firestone tires available as replacements. Other dealers have reported that the market for used Explorers has suffered recently.


LAST MINI PRODUCED The last Mini rolled off the assembly line Wednesday, signaling the end of a 41-year production run. The once innovative minicar was especially popular in the U.K. and Europe in the 1960s, and it caught on somewhat in the United States but was always overshadowed a bit by the fanatical following of the VW Beetle. MG Rover's Longbridge, England, home of the Mini will be retooled for production of the Rover 75, while a completely new, BMW-designed Mini will soon be produced in Oxford.


ADJUSTED SALES UP Seasonally adjusted U.S. sales for vehicles in September were up to 17.9 million, from 17.2 million in September 1999 and 17.5 million in August 2000, as reported by Bloomberg. The adjusted sales figures take into account a number of economic adjustment factors.


DC JUMPS INTO HYBRID RACE DaimlerChrysler has announced the formation of a new U.S.-based engineering group to develop hybrid gasoline-electric cars. The automaker plans to bring hybrid vehicles to market as soon as possible. Honda and Toyota already have hybrid gasoline-electric cars, which use the combination of an electric motor and conventional gasoline engine, available in the U.S. Rival U.S. automakers GM and Ford have already announced intentions to produce hybrid vehicles in the next few years.


DYNAMIC ROLLOVER TEST PROPOSED According to the Wall Street Journal, a member of the U.S. House of Representatives, Democrat Edward Markey, is proposing a driving test that would rate the likelihood for vehicles to roll over. Recent legislation that would establish a static rating system based on a simple mathematical calculation and vehicle dimensions has a good chance of being adopted, although the automotive-industry representatives and even some safety people say that the static ratings are oversimplified.


FORD HARSH WORDS AGAINST FIRESTONE Ford Motor Company, in a meeting with Venezuelan accident victims, accused Firestone of hiding tire defects from the automaker and from the public, says Reuters. At the Venezuelan meeting with victims of accidents caused by Firestone tire failures, Ford again said that it is a tire problem, and not a design problem with the Explorer. The automaker also said that Firestone should compensate the victims. No Firestone representatives were present at the meeting.

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