Week of October 4, 1999

October 4, 1999




FORD, UAW REACH AGREEMENT After weeks of negotiating, Ford and the UAW have reached a tentative agreement on a four-year labor pact. As a part of the agreement, Ford will be allowed to spin off its Visteon parts unit, while Visteon’s 24,000 workers remain Ford employees. Ford, which hasn’t had a UAW labor strike since 1976, agreed to maintain those employees in addition to expected 3-percent raises in each year of the contract and a signing bonus. Details of the agreement will be released Wednesday at a press conference.

For more on the Ford-UAW pact, click here.



DC HQ RUMORS FLY After last week’s rumors, we half-expected DaimlerChrysler’s headquarters to move into its parent’s basement. Independently, various world news sources reported that the company was consolidating its headquarters in three locations: Stuttgart, Auburn Hills, and even New York City. DC officials negated all three rumors, but did confirm, according to Frankfurt’s Allgemeine Zei

tung daily, that more board meetings would be held in New York City to gain more favor with financial analysts. DaimlerChrysler is seeking ways to increase its share price, which has fallen by about a third since April.




DC TO BUILD BRUTE UTE At long last, DaimlerChrysler will join Ford and Chevrolet in the brute-ute wars. As a part of a $48 billion capital program on new products, DC announced last week that it would expand its Windsor, Ontario

, truck plant to the tune of $400 million. The investment in the plant, which builds commercial full-size vans, will allow the company to build a massive sport-utility vehicle to compete with the new Ford Excursion and the Chevrolet Suburban. The Toronto Globe & Mail reports that some 50,000 copies of the new vehicle, code-named SJ, will be produced each year beginning in 2004. The vehicle is said to be an addition to the Jeep lineup, which may prove troublesome for the brand’s hallmark of off-road capability.



AUDI TT GETS HANDLING FIX Owners of Audi TT coupes are reporting problems with the car’s handling — and Audi is sending in a fix for all new TTs entering production. Germany’s Stern magazine reports that the TT’s rear end "swings" out during braking in hard corners, and that Audi has revised the car to fix the tendency. "We're reacting to the criticism of our customers,'' Rudolph Schiller, a spokesman for the Volkswagen AG unit, told Reuters. Beginning in December, the magazine reports, a new stabilization method will be offered — likely an electronic stability program — but vehicles already built will be modified in another unspecified way. The magazine states the handling problem has resulted in several accidents.



FORD, PEUGEOT INK DIESEL DEAL France's PSA Peugeot Citroen and Ford will continue an existing diesel-engine production deal, both companies announced last week. As one of Europe’s largest diesel makers, Peugeot is maintaining its independence through several similar agreements with Ford, Fiat, and other car companies. Recently, DaimlerChrysler confirmed it was talking to the French company about supplying a suitable platform for a new four-seat Smart microcar.


STATE FARM NAILED FOR USING 'FAKE' PARTS State Farm, one of the nation’s largest auto insurers, must pay $1.18 billion to policyholders as a result of a class-action lawsuit charging State Farm with using "fake" replacement parts in insured vehicle repairs. Company representatives insist they will appeal the verdict, by far the largest penalty ever assessed against a U.S. insurance firm. The lawsuit alleged that State Farm, which insures 20 percent of the vehicles on the road in the U.S., used knockoff parts rather than OEM parts in repairing policyholder’s vehicles. The company says the parts are safe and of good quality.



EPA ORDERS BIG TRUCKS CLEAN Trucks, passenger vans and sport-utility vehicles over 8,500 pounds must slash their toxic emissions by over 90 percent in less than a decade, the Environmental Protection Agency said on Wednesday. The EPA's proposal calls for the reduction by 2007 in smog-causing nitrogen oxides and particulate matter, or soot, from the heaviest SUVs, like the massive Ford Excursion, according to Reuters. The EPA is proposing new engine standards beginning in 2004 for vehicles over 8,500 pounds. It is also requiring gasoline-powered trucks to be 78 percent cleaner and diesel trucks to be 40 percent cleaner than today's models. Motor vehicles generate nearly one-third of all emissions of nitrogen oxides and volatile organic compounds -- the pollution that causes smog.



MERCURY TO LIVE? In response to rumors that Mercury’s days are numbered, Ford execs are insisting a bright future ahead for the quicksilver nameplate. In a reorganization expected this November, Ford is expected to keep Mercury aligned with the Lincoln brand, which has been moved into Ford’s new Premier Automotive Group, headed by former BMW exec Wolfgang Reitzle. In addition to sticking by Lincoln, Mercury will get a new ad tag line, "Live life in your own lane," which debuts with new ads for the Sable sedan this fall. In addition, Mercury reps confirmed to Reuters the production of a handful of Mercury-only models coming down the pike: a hotted-up Grand Marquis called the Marauder, a Cougar S sport coupe with more horsepower, and a next-generation Mountaineer bearing little resemblance to the next Ford Explorer.



L-M HEATS UP WEB WARS Ford’s Lincoln and Mercury divisions are adding some sizzle to their online sites by allowing viewers to compare

the features and prices of Lincoln and Mercury vehicles directly with the competition. Courtesy of Ford’s new limited partner, www.carclub.com, visitors to the Lincoln (www.lincolnvehicles.com) and Mercury (www.mercuryvehicles.com) sites will be able to line up specs, performance, and price information against primary competitors. They’ll also be able to line up a test drive through the sites.


AUTOBYTEL STARTS AUCTIONS One of the Web’s best-known car-buying ser

vices has added auctions to its burgeoning business. Autobytel announced last week that it will offer consumer-to-consumer car auctions as well as dealer-to-dealer auctions through its Web site. The company also will add an accessories auction to be hosted by FairMarket Auction Network. Autobytel joins Autoweb.com and Ebay in offering the auctions; however, Autobytel will also auction off accessories, and will sell a mechanical assessment of any auction car for $69.99, as well as transportation for the vehicle and escrow services for the financial transaction.
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