Week of August 30, 1999

RECORD LABOR DAY TRAFFIC?
GM TO GIVE CVT A WHIRL
GM VERDICT SLASHED
BLUEOVALNEWS.COM SHUTTERED
DODGE OWNERS FILE SUIT
VW TO LICENSE TOYOTA TECH
FORD NABS LAND ROVER STYLIST
CADDY DUMPS DUCKS
BIG BIMMERS RECALLED
VW RECALLS PASSATS, AUDIS
BMW LOOKING FOR ROLLS HOME
GM FLIES THE FRIENDLY SKIES

RECORD LABOR DAY TRAFFIC? Rising gas prices won't discourage record Labor Day traffic, says the American Automobile Association. Some 34.8 million Americans are expected to travel over the coming holiday weekend -- nearly 30 million of them by car. The AAA says that's an increase of 2 percent over last year, despite gas prices 18 percent higher than a year ago. The AAA surveyed 1500 adults to arrive at its estimate.

GM TO GIVE CVT A WHIRL GM is getting into gearless transmission. Last week the company announced that one of its 2002 models would have a continuously variable transmission (CVT). The new transmission, like existing CVTs from Honda and others, will use a toothed belt to create an infinite number of gear ratios, which allows a vehicle's engine to run more efficiently than a standard four- or five-speed gearbox. GM says its CVT will improve gas mileage about seven percent over that of a standard four-speed automatic. The company will produce 100,000 of the transmissions for the 2002 model year.

For more on GM's CVT quest, click here

GM VERDICT SLASHED A recent $4.9 billion verdict against GM has been slashed down to a mere $1.09 billion. Last week a California judge overturned the record product-liability verdict against the world's largest automaker, offering the plaintiffs a choice to go to trial again or accept the new, lower amount. Earlier this month, a jury made the original award to six people burned in a 1993 accident. The gas tank of the 1979 Chevrolet Malibu they rode in exploded in a rear-impact collision. GM had argued the gas tank met all current safety requirements, while the plaintiffs argued the location of the tank was dangerous but money-saving for the company. GM plans to appeal the verdict.

BLUEOVALNEWS.COM SHUTTERED Ford's attempt to shutter a renegade Web site may succeed today, if a judge in Michigan decides that BlueOvalNews.com has broken the law. Last week Ford won a temporary restraining order against the site, which Ford says has been revealing company secrets from illegally obtained documents. Robert Lane, of Dearborn, Michigan, has promised to keep the site going as a matter of free speech. Lane began the site under a different URL last year, but after receiving complaints from Mustang owners, began publishing complaints and messages from anonymous Mustang engineers.

For more on the blue-oval fracas, click here

DODGE OWNERS FILE SUIT Three Dodge Dakota R/T pickup truck owners say that DaimlerChrysler misled them about the towing capacity of their vehicles, in a lawsuit filed last week in California state court. Reuters reports Robert Graham of California, Truman Trekell of Texas and Daniel Hawkins of Florida claim the automaker said the R/T could haul 6,400 pounds when it could carry just 2,000 pounds. A DaimlerChrysler spokesman says the company realized in April that it had misprinted some dealer brochures and owners' manuals, and that the 11,000 affected customers were notified. The plaintiffs agree that some trucks were repurchased, but that a buyback offer was only extended to those owners who complained.

VW TO LICENSE TOYOTA TECH VW and Toyota are sidling closer to each other, at least in a techno way. Last week Toyota announced that VW would license its direct-injection engine technology, which improves fuel economy on gas-powered engines. While the first use of the technology has not been announced by either company, the German daily Sueddeutsche Zeitung reports that VW plans to introduce a Seat-brand vehicle, equipped with the Toyota technology, that can travel 100 kilometers (63 miles) on just 3 liters (0.8 gallons) of gas.

FORD NABS LAND ROVER STYLIST The globalization of Ford continues apace this week, as Lincoln gets a new styling director straight from the muddy fields of England. Ford announced last Tuesday that it has hired Gerry McGovern, former director of styling for Land Rover vehicles, as the new design director for Lincoln. McGovern will split his time between Lincoln's new Irvine, Calif., headquarters and Ford's Dearborn, Mich., corporate headquarters.

McGovern, 42, joins the international invasion at Ford; which has already nabbed former BMW USA president Victor Doolan and former BMW second-in-command Wolfgang Reitzle. Reitzle now heads up Ford's Premier Automotive Group, which includes Lincoln, Aston Martin, Jaguar, and Volvo; Doolan signed on as the group's North American marketing director.

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BIG BIMMERS RECALLED The U.S. Environmental Protection Agency (EPA) said last week that BMW will recall some 30,000 cars sold in the U.S. to correct an exhaust emissions problem. In the recall, BMW will replace a programming chip in the engine control computer that may cause the vehicles to exceed the federal nitrogen oxide exhaust emission standard, the EPA said. The cars affected include the 1995 3.0- and 4.0-liter 5-Series cars, the 740I and 750iL, and the 840Ci coupe. Repairs will be completed free of charge.

VW RECALLS PASSATS, AUDIS Volkswagen also tops the recall charts this week, with a service notice for some 428,000 cars built in 1998. A design flaw in some of those cars might cause premature wear of the front axle. Cars included in the recall are 270,000 VW Passat cars, and 158,000 Audi A4, A6 and A8 models. Repairs will be performed for free on affected cars.

BMW LOOKING FOR ROLLS HOME The search is on: BMW says it's now evaluating properties for a new Rolls-Royce assembly plant, due to open in 2003. The early notice, BMW says, is a sign of its commitment to keep production of the uber-luxury cars in England. "The cars of the future will be built in England and will be genuine Rolls-Royces, not upgraded BMW 7-Series models or whatever,'' said Fritz Fruth, a BMW spokesman. BMW will introduce an all-new Rolls-Royce model in 2003, he added, and said that BMW won't build the cars in the plants of its Rover cars unit. Last year, Volkswagen AG won a bidding war to acquire the rights to build Rolls-Royce and Bentley cars, and own the Crewe factory that builds them -- but failed to lock up the rights to the Rolls-Royce name, which were held separately. BMW purchased those rights from Rolls-Royce PLC, and by virtue of a licensing agreement with VW, will take over full control of the Rolls-Royce brand in 2003.

GM FLIES THE FRIENDLY SKIES The horrific, Third World quality of the major air carrier in Detroit has driven GM to get into the airline business. GM will turn over three of its aircraft to Pro Air, a small airline operating out of Detroit's City Airport, the Detroit Free Press and News reported. Under terms of the agreement, GM retains the ownership of the planes, while Pro Air will provide the pilots, flight attendants and maintenance for air travel to some popular GM corporate destinations. The automaker and the airline will share revenue from the venture, in which GM employees will fly for free and leftover seats will be sold to the public, the newspapers said. Earlier this month, GM and DaimlerChrysler petitioned the government to form a joint-venture charter air service.