Week of January 17, 2000

DETROIT GROWS EVEN BIGGER When the smoke finally settled, the North American Auto Show proved to be bigger, more crowded and more expensive than ever. With 40 production models and concepts debuting, the 7,00 journalists covering the show were kept busy. SUVs, trucks and an array of cross-over vehicles reigned supreme once again with introductions including the Dodge Maxxcab, HUMMER H2, VW AAC pickup, Toyota Sequoia and Ford Escape, among others. At the show, the Ford Focus and the Nissan Xterra were selected as the North American Car and Truck of the Year. Although GM announced that it halted production of the EV1, green was still in with the unveiling of GM’s Precept, Ford’s TH!NK brand, the ultra-clean gasoline-powered Nissan Sentra CA and Honda’s announcement that it intends to be the first to bring a fuel-cell vehicle to market.

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GM ANTES UP FOR ALL OF SAAB The other half is now in the fold: General Motors confirmed to CNNfn that it has purchased the 50 percent of Saab’s car business that it did not already own. GM exercised an option on the remaining shares that were owned by Sweden’s Investor AB. "We had the option and it seemed like the right time to exercise it," G.M. President and Chief Operating Officer Richard Wagoner told the financial news service. Terms of the deal were not disclosed.

EVERYBODY HAS THEIR EYE ON DAEWOO South Korean automaker Daewoo seems to have everyone’s attention these days. Hyundai announced Monday that it plans to make a joint bid with an overseas automaker, according to the Asian Wall Street Journal. Tuesday, Yonhap News reported DaimlerChrysler hopes to form an alliance with an "unspecified South Korean automaker" and that DC may opt to take part in the auction of Daewoo. At the same time, Ford stated it couldn’t accept the Korean creditors' assessment of Daewoo’s assets and wanted to conduct its own due diligence. GM told creditors that it wouldn’t bid in the auction if creditors won’t write off enough debt or if they refuse to give GM managerial control.

FORD, GM GET WITH ROLLOVER PROTECTION Ford Motor Co. will start offering specially designed airbag "curtains" designed to reduce the chance of death or injury in all of its 2001 model-year sport-utility vehicles. The new Ford system is designed to detect the difference between the rollover and a vehicle simply driving onto a sharp embankment. The rollover curtains use a new method to remain inflated longer than conventional airbags -- up to six seconds -- so it could protect passengers, even if their vehicle rolls over three times. Also this week, General Motors announced it will install side airbags as standard equipment in all of its vehicles by 2003. GM will use curtain-style airbags that inflate from the ceiling and offer head protection, according to Bob Lange, engineering director at GM’s safety center.

DC SCRAPS JEEP SUV Plans for the full-size Jeep SUV, coded named SJ, have reportedly been killed. DaimlerChrysler told several suppliers developing parts for the vehicle to cancel plans, due to fuel economy requirements, rising gas prices, vehicle pricing and possible cannibalization of other DC models. DC officials have never confirmed plans for the Jeep SUV, which was expected to compete with the Ford Excursion and the Chevy Suburban.

FORD, GM FORM PARTNERSHIPS WITH YAHOO, AOL Both Ford and General Motors announced partnerships with large Web sites this week. Ford will link with Yahoo to offer personalized services such as owner guides, recall notices, service reminders and traffic updates on Yahoo’s site as well as Ford’s car owner site (www.ownerconnection.com). Meanwhile, GM has allied itself with America Online to offer GM product information and links to GM dealers on the AOL site. America Online will launch a new Auto Channel later this year which will offer the GM vehicle and dealer information. AOL will also launch a new version of My Calendar that will allow owners to track maintenance and repair schedules.

JETTA GETS TOP RATINGS, ELANTRA GETS BEST AND WORST The 2000 VW Jetta became the first compact four-door sedan to receive a five-star rating for both driver and front passenger, the top rating in tests conducted by the National Highway Traffic Safety Administration (NHTSA). The compact Hyundai Elantra received both the best and the worst ratings in two NHTSA crash tests. The best rating, five stars, was given for the driver in a 35-mph frontal crash, while the one-star rating was given for rear passengers in a 38.5-mph crash. The Chevy Malibu was the only other vehicle among the 18 tested to receive less than three stars – it received two stars for the driver in a side crash test.

BOEING BUYS A CHUNK OF HUGHES Boeing confirmed this week that it would buy a portion of General Motor’s unit, Hughes Electronics, the largest maker of commercial satellites. The $3.75 billion deal encompasses Hughes’ space and communications business only, while GM retains all of Hughes’ other operations, including its communication networks, broadcast and communication services as well as networking and communications equipment productions.

DELPHI, LUCAS DEAL CLOSES Delphi Automotive Systems announced it completed the acquisition of Lucas Diesel Systems and its related aftermarket areas. The $871 million deal means that Delphi’s non-GM revenue will increase by about 16 percent and European sales will see over a 20-percent increase. The new division will be known as Delphi Diesel Systems.

GM AIMS FOR SPEEDY DELIVERIES In an effort to speed vehicle delivery times from the current average of 40 days to 7-10 days, GM will invest $250 to $500 million in its computer systems, according to GM president Ron Zarrella. He projects that over $1 billion will be expended if the company determines regional distribution centers are needed, as they are used in the distribution of Cadillacs. Zarrella said that GM is at least three to four years away from reducing delivery times.

DAKAR RALLY UNDER TERRORISM THREAT After the French Foreign Ministry issued warnings of a risk of an attack by terrorists while the Paris-Dakar-Cairo race passed through Niger, event organizer TSO decided to airlift the entire rally from Niamey, Niger, to Libya. The U.S. government also issued warnings of terrorism threats and recommended that American citizens exercise caution. The two-vehicle team, sponsored by Kia North America, is the only American team at the event. At the end of the day yesterday, the team of Darren Skilton and TCCer Sue Mead were in 57th place overall, while the other Kia team with driver Curt LeDuc and Pepo Martinez were 36th in the standings. The airlift operation will begin today and conclude on Sunday. TSO will re-start the race in Libya on Monday, January 17.

DRIVERS’ PRIVACY PROTECTED, SAYS SUPREME COURT Congress can prevent states from selling the personal information on drivers’ licenses, according to a Supreme Court ruling this past Wednesday. In a unanimous decision regarding a case from South Carolina, the Court said that the law does not violate the rights of states, some of which sold names, addresses, telephone numbers, photographs and Social Security numbers to businesses and political candidates for a profit. The verdict stems from a challenge to the 1994 Driver’s Privacy Protection Act, enacted as a result of the 1989 killing of actress Rebecca Schaeffer by a stalker who obtained her address through drivers’ license records.

CELL, CELL, CELLULAR As safety concerns for handheld cell phones grows, GM announced it would offer factory-installed cellular phone service with Internet access in one million vehicles this year. Further, it may reach a partnership agreement with a "large telecommunications company" (reportedly Bell Atlantic) soon that would allow the carmaker to keep a portion of the monthly fees, according to Mark Hogan, head of e-GM. The strategy is seen as a continuous revenue stream, beginning once the vehicle leaves the dealer.