Week of June 16, 1999

June 16, 1999



AIRBAGS WON’T MEET NEW STANDARDS Ford, GM and DaimlerChrysler say that a newly-proposed rollback in airbag standards could be impossible to meet with the current generation of de-powered bags. Earlier this month, the National Highway Traffic Safety Administration proposed reinstating a crash test that requires an airbag to cushion an unbelted dummy when a vehicle is driven into a wall at 30 mph. The automakers say that going back to that standard will require them to re-power airbags to levels that may endanger small adults and children. GM and Ford say they have in fact tested their latest airbags to the 30-mph standard, and the new-generation bags failed to adequately protect unbelted crash-test dummies. 

GM ARMS TRUNKS AGAINST LOCK-INS GM says it will equip some of its newest models with a device that automatically opens the trunk lid when movement is detected inside the trunk. While other automakers have announced plans to install emergency-release handles in trunks, GM says it believes it is the first to use an infrared detector to sense the unique "heat signature" of a human trapped in the trunk. The new 2000 Impala will be the first GM vehicle to be equipped with the system. 


AMERICANS WANT TOUGHER SUV EMISSIONS The American Lung Association says its recent surveys indicate Americans are strongly in favor of stricter air-pollution standards for sport-utility vehicles. According to their results, nearly nine out of ten people asked felt that SUVs should meet the same pollution standards as passenger cars. The survey also found that on average, Americans are willing to pay 2 cents more per gallon for cleaner gasoline if it would produce significantly less pollution. 


FORD TO PASS GM? Autofacts, a subsidiary of consulting and accounting firm PricewaterhouseCoopers LLC, says that in 2005 the world's largest automaker could be Ford Motor Company.The company says its research points to Ford gaining the lead in capacity in 2005. In that year, a recent Autofacts survey says, Ford production will grow to 9.15 million cars and trucks in 2005 from an estimated 7.77 million in 1999, beating GM with 9.10 million in 2005, up from 8.08 million in 1999. The survey includes acquired brands such as Ford's Jaguar and Volvo units and Mazda, which it effectively controls, as well as GM's Saab part-ownership. Ford is expected to overtake GM in overall revenue this year, thanks to its acquisition of Volvo and continued strong demand for its light trucks and SUVs. 


GM EXPECTS TO REGAIN SHARE On the other side of the fence, General Motors President G. Richard Wagoner said last week that he expects the current number-one automaker to regain market share, even in the face of limited availability of some of its most popular models. "Nobody's given up on growing share. I honestly do expect to see our share going higher," Wagoner told reporters after GM's annual stockholder's meeting. GM's domestic market share has fallen below 30 percent for nine of the past 12 months; through May of this year, it equaled 29.3 percent, down from 31.4 percent. Wagoner attributed recent sales slumps to a shortage of hot-selling vehicles such as the new Chevrolet Silverado. 

MITSU RECALLS A HALF-MILLION Nearly half a million cars built by Mitsubishi Motor Manufacturing of America Inc. are being recalled for a potential steering problem, according to a news release issued by the National Highway Transportation and Safety Administration. The cars affected by the recall include Mitsubishi Galants from the 1994 to 1996 model years; Mitsubishi Eclipses from 1995 and 1996; Eclipse Spyders from 1996; and Eagle Talons, Dodge Avengers, and Chrysler Sebrings from the 1995 and 1996 model years. The total number of cars being recalled is 464,000, but Mitsubishi officials believe few are actually affected by the problem. Owners should take their cars to dealers for a free inspection and part replacement if necessary. A rubber boot on an arm of the wheel mechanism can become damaged, exposing a ball joint to dirt and water. That could cause extensive wear and in the worst case, a wheel could collapse, NHTSA spokesman Tim Hurd said. Mitsubishi officials said in a statement that they are unaware of any reports of injury caused by the condition.



SATURN EXTENDS ENGINE WARRANTIES GM satellite corporation Saturn says it will extend the warranty on more than 363,000 four-cylinder engines to cover repair costs for cylinder-head cracks. The cracked heads have shown up in some 1994-1996 single overhead-cam engines. Saturn will double the warranty protection from three to six years, and more than double the mileage coverage, from 36,000 miles to 100,000, a company spokesperson said last week. Some 600 owners who paid for repairs on their won have been reimbursed. 


MITSU, FIAT TO UNITE? Recent talks between Mitsubishi and Fiat are getting more serious, the London Financial Times reports. The automakers had been discussing a venture to share some parts development costs; now the talks have spread to discussing production of a jointly-developed SUV to be built in Italy, the paper reports.
The project would fill a niche in Fiat's lineup while allowing Mitsubishi to share development costs for a new generation of off-roaders. Mitsubishi Motors President Katsuhiko Kawasoe said last week the talks may also include the license of Mitsu direct-injection technology to Fiat.



FORD EXECS ON THE MERRY-GO-ROUND The latest round of executive swapping at Ford will take James Donaldson from his post as head of Ford's European operations and put him in charge of global business development. Donaldson's replacement will be Nick Scheele, former chief of Ford's Jaguar unit and current sernior vice president for marketing, sales and service for Ford's European operations. And in Brazil, former president of Brazilian operations, Ivan Fonseca e Silva becomes vice president of business operations and strategy for South America. His replacement is Antonio Maciel, 41, former president of a Brazilian industrial concern. 


FORD BUYS INTO EXTENDED WARRANTIES Ford announced last week that it has made a formal offer to purchase Automobile Protection Corp. (APCO) , an Atlanta-based provider of extended service contracts, for $180 million. APCO has 200 workers in Atlanta, and will retain its officers, employees and independent sales representatives under the deal. APCO's main business is selling EasyCare Certified Pre-Owned Vehicle Merchandising Program and EasyCare Vehicle Service Contracts through car and truck dealerships; the company also administers warranty and service contract products under private labels. Both missions fit in with Ford's new strategy of cradle-t-grave service for owners of its vehicles. 


NISSAN WANTS A PIECE OF RENAULT First, Renault anted up for a chunk of Nissan, Japan's second-largest automaker. Now Nissan president Yoshikazu Hanawa says his company would like to purchase a stake in Renault equivalent to Renault's 37 percent holding in Nissan as soon as possible, the AP reports. "The objective is for reciprocal shareholdings," Hanawa told reporters in attendance at Renault's shareholders meeting. Asked if Nissan was seeking a stake equivalent to Renault's 37 percent holding in the Japanese company, Hanawa said "Yes." He then added: "As soon as possible."



PACKARD PLANT GETS  A REPRIEVE The still-developing saga of Detroit's old Packard plant is still being written. The Detroit Free Press reports that Dominic Cristini, the real estate entrepreneur who has been holed up inside the former Packard Motor Car Co. since last fall, has persuaded a judge to prevent the demolition of the historic factory. Cristini and his attorney, Gary Felty of Southfield, Mich., say a ruling by Wayne County Circuit Judge Michael James Callahan stops the city from tearing down the plant while their lawsuit claiming rights to the property heads to trial early next year, the paper says. The city of Detroit contends it had foreclosed on the property, while Cristini, who had been hired to oversee the property, says the last owners were not properly notified of the foreclosure proceedings. The plant stopped production of Packards in 1956; since then, the Free Press says it has been the site of paintball war games, all-night raves, and wholesale garbage dumping. Cristini says he wants to refurbish the plant as a complex for small businesses and training programs.

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