Week of June 21, 1999

June 21, 1999



SPORT-UTES WIMP OUT IN CRASHES Sport-utes may look brutish, but a recent study by the Insurance Institute for Highway Safety (IIHS) revealed some SUVs have wimpy bumpers. After testing six 1999 models, the Insurance Institute for Highway Safety found that only two of the SUVs had less than $5,000 damage in four impacts at 5 mph. The four impacts tested were front bumper into barrier, rear bumper into barrier, front bumper into angled barrier, and rear bumper into a pole. The worst vehicle tested, Mitsubishi's Montero Sport, sustained more than $6,000 in damage in the combined tests; even the SUV requiring the least expensive repairs, the Mercedes ML320, sustained more than $2,900 damage from the tests. The damage costs for the vehicles ranked as follows:

Mitsubishi's Montero Sport  $6,282 
Dodge Durango  $5,655 
Land Rover Discovery  $5,226 
Jeep Grand Cherokee  $5,107 
Lexus RX 300  $3,293 
Mercedes ML320  $2,918 



GM TO OPEN USED SUPERSTORE? GM may branch out into the used-car business, the world's largest automaker said last week. The company said Wednesday that it is looking at opening a factory outlet in Houston to sell used vehicles coming off leases. The program, tentatively called Driverside, may be approved next week. The eventual goal is to sell vehicles over the Internet, and to duplicate the stores across the country, USA Today reports.


GM WINS AIRBAG SUIT GM emerged victorious in an airbag lawsuit adjudicated last week, according to AP reports. On Thursday, GM was found not liable for an accident involving former NFL football player Jerome Brown, whose ZR-1 Corvette crashed into a telephone pole, killing him, in 1992. Brown's family sued for $30 million, arguing that the Corvette's airbag prematurely inflated when he hit a pothole, causing him to lose control and go airborne before crashing into a tree and a utility pole. GM responded that Brown was speeding down the wrong side of the road and was not wearing a seatbelt when his Corvette spun out of control. Brown, 27, and his 12-year-old nephew Augustus Brown, died in the Brooksville, Florida, crash.


FORD, TOYOTA MOST PRODUCTIVE Last year’s most productive assembly plants belong to Ford and Toyota, according to a report issued last week by Harbour and Associates Inc. Toyota’s Cambridge, Ontario, plant and Ford’s Atlanta and Chicago plants beat out a longtime winner, Nissan’s Smyrna, Tennessee, assembly plant, for the honor. The Cambridge plant builds Corollas, the Ford plants the Taurus and Sable; Nissan’s plant builds the Altima sedan, Frontier truck and Xterra SUV. Nissan’s plant cut production last year in an attempt to reduce high inventory but did not lay off workers, which hurt its productivity results.


NEW CAVALIER, SUNFIRE DELAYED GM says the replacements for its aging Cavalier and Sunfire subcompacts have been delayed to 2004. GM had planned to build a new plant in Lordstown, Ohio, and implement a new modular-assembly system sooner than 2004, but disagreements with the UAW over the new assembly system and a refocusing of efforts toward trucks led to the delay.

GM had also considered building the vehicles at its joint-venture CAMI facility, shared with Suzuki, but will instead increase production of trucks there. The CAMI plant currently builds the Chevrolet Metro and Suzuki Swift small cars, and the Chevrolet Tracker and Suzuki Vitara small sport-utility vehicles.




CD RADIO FOR FORD Ford Motor Co. and radio broadcast company CD Radio said last Monday that they will work together to give motorists access to CD Radio's coast-to-coast, commercial-free music stations beginning in 2001, Reuters reports. Ford said it will begin installing CD Radio receivers in all seven of its car brands as early as the first quarter of 2001. Once installed, drivers will have access to CD Radio's soon-to-be-completed 100-station radio satellite system for a monthly subscription price of $9.95. CD Radio's system should be fully operational by the end of the fourth quarter of 2000, the company said. The first of CD Radio's three satellites, which are currently under construction by Loral Space and Communications Ltd., is set to launch in January.

For more on the CD Radio system, click here


FORD ANTES UP LOW-EMISSION ENGINES Ford’s European cars are getting a lot cleaner, says Ford Motor Co. Chairman William Clay Ford Jr. Ford announced last week that his namesake company will offer new low-emission engines that exceed required clean-air standards on its Ka and Fiesta small cars. The engines meet the European Union's proposed Stage IV emission standards, which will become mandatory in January 2005. Other vehicles will get the cleaner engines later in 2000. The Stage IV vehicles from Ford have 50 percent less carbon carbon monoxide, hydrocarbon and oxides of nitrogen emissions than cars and trucks that meet the European Union's Stage III standards. The new engines include a mandatory on-board diagnostics system that monitors emissions and activates a warning light if certain levels are exceeded. Ford also plans to begin selling versions of the Ford Focus and Mondeo cars and Transit van later this year that run on either compressed natural gas or liquefied petroleum gas; the flexible-fuel vehicles cut carbon dioxide emissions by up to 20 percent.




MAZDA, MITSU JOIN ON TRUCKS It’s far short of a merger, but Mazda and Mitsubishi are linking up in Japan to share commercial trucks. Under terms of a new agreement, Mazda will supply Mitsubishi with 8,000 commercial vehicles annually, in a tie-up that will help Mitsubishi cut costs and boost Mazda's sales. Mazda will supply Bongo commercial vans and trucks to Mitsu beginning this fall; Mitsubishi will sell the trucks under its Delica brand. Though analysts don’t expect the move to lead to further links (even though Mitsu shares a Dutch car plant with new Ford brand Volvo), the link with Mazda will save Mitsubishi the money spent on developing new trucks.


BEETLE PLANT REOPENS AFTER QUAKE Volkswagen has resumed production at its Mexico Beetle assembly plant after suffering only light damage in a strong earthquake that jolted the region Tuesday, the AP reports. The Puebla, Mexico, plant, the world's only factory producing both the Volkswagen Beetle and the New Beetle, shut down last Tuesday after an earthquake measuring 6.7 on the Richter scale shook the area southeast of Mexico City.

The Puebla quake killed 16 people and left hundreds injured. The plant was not seriously damaged, aside from some broken pipes and a fallen lamp, but production of some 500 vehicles was lost.



SAAB SHIFTS TO AUSTRIA According to Canadian supplier Magna International, Saab will begin producing some vehicles in Graz, Austria, in the near future. "We have agreed a new cooperation deal with Saab through our subsidiary Steyr-Fahrzeugtechnik concerning the development and production of two new models of a niche car in Graz," Magna spokesman Karl-Heinz Grasser told the AP. However, the commencement of production, the vehicles in mind, and even the number of workers have yet to be decided. The Austrian paper Der Standard says that Saab will build new convertible and sports models based on the next 9-3 at the site, but Finland's Valmet Automotive, which produces the current Saab 9-3 convertibles and 9-3 Viggen sports cars at its Uusikaupunki plant, said it had received no indication from Saab that output would be moved to Austria, according to the AP.




FORD TO BUILD IN BRAZIL U.S. automaker Ford will construct a $1.3 billion car assembly plant in Brazil's northeastern state of Bahia after scrapping earlier plans to build one in the southern state of Rio Grande do Sul, Reuters reports.

Ford will start producing 250,000 small cars at the factory, where it plans to employ 5,000 workers, a Ford spokesman told the news service. In April, Ford cancelled its project to build the plant in Rio Grande do Sul because the state government had reneged on plans to contribute $260 million in fiscal incentives, including tax breaks and cheap loans.




LAMBO CHIEF QUITS Lamborghini Chief Vittorio Di Capua has resigned, effective immediately, Lamborghini parent company Audi AG said Wednesday. Audi only revealed that Di Capua’s departure was of his own request, and that Rodolfo Roccio, a member of Lamborghini's executive management team, would take over Di Capua's duties until a replacement is named. Audi, itself a brand owned by Germany’s Volkswagen AG, bought Lamborghini last year.

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