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NOVEMBER SALES JUMP; GM SHARE TO
DROP?
UAW ON EDGE IN LORDSTOWN
HONDA TO DC: WE’RE NOT ON THE BLOCK
MORE
DC-PEUGEOT MUTTERINGS
VW TO SPEND BIG ON NEW
MODELS
MITSU LOSSES MOUNT
DC VAN
SALES WILT WITH COMPETITION
ASTRO/SAFARI CUTBACKS
PLANNED
INDIANA IN LINE FOR SECOND TOYOTA
PLANT
FORD PLANS LUXURY-DEALER CONVERGENCE
GOODYEAR TO SHUTTER FACTORIES
DC WINS
REVERSAL OF $750,000 VERDICT
UAW ON EDGE IN
LORDSTOWN Last week’s rejection of a new contract offer from GM means that
workers at the Lordstown, Ohio, assembly plant still don’t have a deal to carry
them through 2004. The plant, which assembles the Cavalier and Sunfire compacts,
had been the subject of a skirmish over GM's plans for "Project Yellowstone," a
modular-assembly proposal that would have slashed employment at the plant. When
Yellowstone was scuttled, GM extended the life of the current Cavalier/Sunfire
way out to 2004 — but gave no guarantees to the plant’s work force beyond that
year. The UAW members at Lordstown rejected the proposed four-year agreement
because they say GM is slowing down production at the plant despite rising sales
of the models.
HONDA TO DC: WE’RE NOT ON THE BLOCK Despite reports
in Germany’s Wirtschaftswoche, Honda is not interested in being acquired
or being invested in by DaimlerChrysler, the Japanese company announced last
week. A report in the German paper said that DC Co-Chairman Juergen Schrempp was
interested in purchasing a part of Japan’s third-largest carmaker; the paper
reasoned that Honda’s motorcycle engines would make great powerplants for DC’s
problem-child Smart car. With a four-seat Smart planned in the near future, DC
is in search of a partner to bear the brunt of development costs. A Honda
spokesperson gave no credence to the report.
MORE DC-PEUGEOT MUTTERINGS Meanwhile, in scenic Paris,
daily Le Figaro is citing internal PSA Peugeot sources that say DC in
fact will invest in the French carmaker, which will in turn develop the platform
for the new Smart. The paper, citing an unnamed Peugeot executive, reports that
DC is talking with Peugeot and Fiat about mutual cooperation on small cars and
diesels.
VW TO SPEND BIG ON NEW MODELS Volkswagen, of course, is
content to soldier on by itself with a just-announced initiative to spend more
than $30 billion on new products, including a new range of Bentley motor cars,
some upscale VWs earmarked to compete with Benz and BMW, and a long-floated
Beetle cabriolet. Last week, the biggest German automaker said it would plug DM
60 billion into the new models and into refurbishing factories in the
homeland.
MITSU LOSSES MOUNT Mitsubishi, meanwhile, is still sliding into debt. The fourth-largest Japanese maker reported a $370 million loss for the six-month period that concluded in September — even after selling some valuable Japanese real estate. Wire reports estimate Mitsu’s total debt at Y1.75 trillion, or about $17 billion. Mitsubishi was the only one of Japan’s carmakers to post a loss for the period, which it attributes to the appreciating yen and slackening sales.
DC VAN SALES WILT WITH COMPETITION
DaimlerChrysler has its own wilting sales to worry over. Its category-defining
minivans are facing sales pressure from new entries from Ford, GM, and,
especially, Honda and Toyota. To boost sales, DC has taken the once-unheard-of
step of introducing and then boosting rebates on the vans. Sales fell about 3
percent this year, while the category itself grew at 11 percent. Through
October, the company controlled 37.8 percent of the minivan market, down from
more than 50 percent in the early to mid-1990s. The rebates now reach $1,250. A
new DC minivan is scheduled to make its debut at the Detroit auto show in
January.
ASTRO/SAVANA CUTBACKS PLANNED A
reduction in production at GM’s Baltimore assembly plant has workers worried
that the rear-drive Astro and Safari vans are headed for an ignominious fate. On
Monday, GM announced that it would cut production of the vans down to one shift,
eliminating workers that staff the second shift. A GM spokesman told Reuters the
vans would stay in production through 2003 on one shift, but declined further
comment. GM cites declining demand for the vans as the impetus behind its
decision.
INDIANA IN LINE FOR SECOND
TOYOTA PLANT Is the Sienna minivan moving from Georgetown, Kentucky, to
Indiana? According to Japan’s Nihon Kezai daily, it is. The paper, citing
unnamed sources, says Toyota will jumble around a handful of models and will
spend about $290 million to build a new Indiana plant for the Sienna. At
October’s Tokyo Motor Show, Toyota announced it would decide by year’s end on
expanding in the United States; the Japanese paper states Toyota has decided
already on building in Indiana, adding Sienna production capacity next door to
the Toyota Tundra pickup/Sequoia SUV plant. The report also says Toyota will
move its Camry Solara coupe from its Canada facility to Kentucky, alongside the
Camry, then bring production of the popular Lexus RX 300 to Canada from
Japan.
FORD PLANS LUXURY-DEALER CONVERGENCE If at first you don’t succeed, repackage. That’s the general concept behind Ford’s new initiative, announced last week, to combine the back-office functions of its luxury brands within major markets but to retain individual dealerships. You’ll recall that last year Ford began a plan to purchase and combine retailers within metro areas into superstores known as the Ford Auto Collection. In the face of dealer conniption fits, Ford has scaled back those plans and now is offering to assist in purchasing real estate and brokering deals to combine service shops, finance and insurance and other dealership functions. Ford’s European locations for its Volvo and Jaguar dealers would be included in the plan. Ford is hoping to shave costs at the retail level with the plan and to boost luxury-car sales from about 650,000 this year to more than 1 million.
GOODYEAR TO SHUTTER FACTORIES Goodyear announced last week that it will close plants in Italy and Argentina and will cut nearly 1,400 jobs to trim its network of production facilities. Goodyear estimates that it will save about $40 million with the closings, which should ease the price it paid to set up a European joint venture with Japan’s Sumitomo tire company.
DC WINS REVERSAL OF $750,000 VERDICT DaimlerChrysler has
been relieved of a $750,000 judgment in a New York federal court, by a judge who
ruled that the automaker was not liable for the airbag-related death of a
5-year-old boy. U.S. District Judge Jed Rakoff said on Friday the attorneys for
the family of Michael Liz Crespo had failed to prove their case, Reuters
reports. A jury had ruled last December that the world’s fifth-largest carmaker
was 50-percent liable for boy’s death and had awarded the family $750,000.
Crespo was killed in 1995 when an airbag deployed during a head-on collision
involving a minivan driven by his father; the plaintiffs had argued that their
son could still be alive if DC has used a different type of airbag. The child
was not belted into the seat at the time of the accident.
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