Week of August 9, 1999

GM REBUFFS FIAT In the latest in a series of setbacks for the Italian automaker, General Motors Corp. has rebuffed a bid to team up with Fiat SpA. Fiat has reportedly approached a range of potential partners covering every corner of the globe, including Volvo, Mitsubishi, GM, and even DaimlerChrysler. According to TCC sources, Fiat approached GM with a range of options. At the simplest, these would have involved the swapping of technology and, perhaps, some product platforms. But Fiat also envisioned a more extensive arrangement with GM that might have led to a merger of their two automotive operations. The scenario that seemed to be at the center of the talks would have resulted in GM taking a one-third stake in Fiat. A GM officer reportedly says there is no chance that such a merger will take place.
For more on the GM-Fiat talks, click here.

GM, DAEWOO SIGN ALLIANCE Turning its sights instead to Asia, GM has signed a letter of understanding with Korea’s Daewoo group to form an auto-manufacturing alliance. The letter indicates the companies will pursue joint vehicle development and production; sources say Daewoo hopes the agreement will lead to a cash infusion from GM. From 1978 to 1992, GM owned one-half of Daewoo in a rocky relationship that produced the ill-fated econo-hatch Pontiac LeMans and even more corporate headaches. Daewoo bought out GM’s shares in 1992.

VOLVO WORKING ON S60 Automotive News Europe is reporting that Volvo will add a model to its lineup that seems to be a replacement for the current S70/V70. The new S60, the magazine reports, will be positioned between the current S80 and new S40 range, and will share its platform with one of the two existing models. Volvo plans a station wagon of the new midsizer, which seems to point to the current S70’s demise.  Stay tuned for more details.

GM, FORD TO GET PLASTIC TRUCK BEDS At last week’s auto-industry management conference sponsored by the University of Michigan, GM announced that it would make a plastic pickup bed optional on its Chevrolet Silverado full-size truck. The pickup box will be 50 pounds lighter and more resistant to dents and corrosion than current metal one, and will be available next year. However, over at Ford, they’re insisting the 2001 Explorer Sport Trac will be the first vehicle on the market with a plastic pickup bed.  Sport Trac goes into production in January, and on sale soon after.
For more news from this year’s Traverse City conference, click here.

CALIF. WANTS SULFUR LEVELS HALVED California isn’t content with some of the most sulfur-free gas on the planet: now state lawmakers are working on a proposal that would more than halve the amount of sulfur in its gasoline, from an average 80 parts per million to between 20-30 parts per million. On average, U.S. gasoline contains 330 parts per million sulfur, which is considered a key component in air pollution. The Clinton administration has proposed that U.S. gasoline be limited to 80 parts per million sulfur beginning in 2004. Oil companies say it will add 10 cents a gallon to the price of gasoline, although BP Amoco recently introduced reformulated gas with low sulfur content in the Atlanta area at no additional cost.

DC RECALLS BABYSMART Mercedes-Benz USA says its parent company, DaimlerChrysler, will recall some 6000 BabySmart infant seats over concern that the airbag system will cause injury in a crash. MBUSA says the company has received four reports that the BabySmart passenger "airbag off" light did not illuminate when the seat was out of position. BabySmart uses a special seat and sensors to disable a front passenger airbag, so that infants and small children can ride in the front seat of an airbag-equipped vehicle. The BabySmart Toddler seat is unaffected by the recall.

MAZDA MOVES FOR EQUAL PAY Mazda is pushing for more women in senior management by promoting two or three to senior management roles, the company announced last week. Mazda will also raise the pay of some 500 female employees to reduce gender discrimination, the AP reported. Mazda officials decided on the pay hikes and promotions after evaluating the skills and job performance of some 1,000 of its female employees — who hold just six of the company's 3,000 management positions.

TOYOTA DOES FIVE-DAY ORDERS Toyota says it now can fill specific customer vehicle orders within five days, instead of the more normal five weeks, a company spokesman says. A pilot program to build vehicles within five days and deliver to customers within ten will begin in September on Camry Solara coupes built at Toyota's plant in Cambridge, Ontario. If that test is successful, Toyota will arrange similar programs for its Corolla sedan, built on the same assembly line in Canada, and eventually to all models at all its plants, including Japan.

TOYOTA BEGINS V-6 PRODUCTION Toyota’s newest U.S. production facility began cranking out V-6 engines last week, the company reported. Toyota’s new Buffalo, West Virginia plant will produce engines for the redesigned Avalon full-size sedan to be introduced this fall. The plant began making four-cylinder engines for the Corolla last November. When fully operational, the plant will have the capacity to produce 300,000 four-cylinder engines and 200,000 V6 engines per year, Toyota said. Production at a new automatic-transmission factory next door will begin in early 2001.

GM TO BUILD CARS IN JAPAN To boost its market share in Japan, GM says it will begin production of vehicles in Japan within five years for the first time since World War II. GM is said to be looking for an existing factory, which might be available from its Japanese affiliates: GM owns ten percent of Suzuki and 49 percent of Isuzu, both of which may supply GM with the capacity to build in Japan – something U.S. automakers haven’t done since the 1930s.

NISSAN KICKING SAMSUNG’S TIRES? Still sorting out its association with France’s Renault SA., Japan’s Nissan Motor Co., is said to be studying the acquisition of Korea’s Samsung Motors. Samsung, the smallest of Korea’s carmakers, was to have been taken over by Daewoo in a government-sponsored realignment of the country’s auto industry. However, Daewoo and Samsung did not come to agreeable terms. Samsung halted production in November after selling only about 50,000 cars, mostly to Samsung executives and employees.

AM GENERAL TO BUILD NEW FACTORY? Indiana’s South Bend Tribune reports that AM General may build a new facility to produce a new version of its Humvee military vehicle. The new plant, which could cost about $200 million, could produce a "Hummer II" that would be sold by GM dealers. In June, GM said it will buy the right to use the Hummer brand name worldwide and will explore product development and marketing opportunities with AM General.

BMW GETS TIME OFF FOR ECLIPSE BMW says it will halt production at its Munich and Regensburg plants for a half an hour this Wednesday, so employees may watch the last total solar eclipse of the century. A spokeswoman told the Agence-France Presse "it makes no sense if people want to see the eclipse and get all nervous on the production lines.'' The total eclipse, best viewed in Europe and the Middle East, can be seen in a band from south England to India – peaking over Romania – on August 11.