Week of October 23, 2000

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TRANSFORMING AN ICON Ford Motor Co.'s massive River Rouge assembly complex is set for a massive renovation, the automaker's chairman, William Ford, has announced. Built by the executive's great-grandfather, Henry Ford, the aging facility was once the most modern manufacturing center in the world, with raw materials entering on one end and finished cars rolling out the other. Today, it's outdated and environmentally unsound. "We're going to transform this icon of the 20th Century into the model of 21st (Century) environmentally sustainable manufacturing," said Ford. Though he declined to discuss specific details, the Ford heir is actively involved in efforts to show that environmentalism does not have to be costly. "Preserving the environment, Ford declared, "is a competitive advantage and a major business opportunity."—TCC Team

ANOTHER BRIDGESTONE FIRESTONE BLUNDER Bridgestone Firestone has responded to complaints regarding yet another of its tire models. The company says that it has tested its Dueler HT 689 models for problems with small cracks in the sidewalls, and the problem was found to be only cosmetic. The tire is installed in Toyota's Tundra pickup and Sequoia SUV, although Toyota has temporarily suspended the use of the tire in new models. Bridgestone Firestone says that the tires pose no serious safety threat, and that the visual defects were caused by a problem in the manufacturing process. The tires are made at the same North Carolina plant that makes Steeltex tires, which are currently under investigation by the National Highway Traffic Safety Administration (NHTSA).

FIRESTONE AGREES TO EXPAND RECALL The New York Attorney General's office says that Firestone has agreed to replace an additional 1.4 million tires in 48 states, on top of the existing 6.5 million tire recall. The tires affected, also commonly installed on Ford Explorers, are also said to have higher-than-expected separation rates. The National Highway Traffic Safety Administration (NHTSA) issued a consumer warning last month regarding the AT, ATX II, and Wilderness tires, which share a common design with the tires that had already been recalled.

TIRE SUITS MAY BE CONSOLIDATED A judges' panel is scheduled to hear arguments on whether more than 80 separate class-action lawsuits dealing with the safety of Firestone tires should be consolidated, according to USA Today. Ford and Firestone support the consolidation, although opponents say it could delay decisions for years, and they already have most of the information they need to go ahead. If the cases are consolidated, a committee of lawyers would question Ford and Firestone a single time. The NHTSA has now brought the death toll due to tires affected by the Firestone recall up to 119, and there are now more than 3500 complaints in the agency's database.

BRIDGESTONE FIRESTONE PLANTS SHUT DOWN Bridgestone Firestone has announced that it will temporarily shut down three U.S. tire plants due to a drop in demand caused by the Firestone tire recall. Plants in La Vergne, Tennessee, and Oklahoma City will close for three weeks, and the infamous Decatur, Illinois, plant will close for two weeks. Also, about 450 workers will be laid off indefinitely. The company says that its passenger-car tires are currently oversupplied, and the shutdown is to compensate for that by reducing total company production by about 25 percent.

BRIDGESTONE FIRESTONE CONSOLIDATES OPERATIONS Bridgestone Firestone has announced that it is consolidating sixteen existing business units into four and bringing in Japanese executives to head the company's consumer tire and manufacturing and technology operations. All four of the newly formed business units will now report directly to the company's CEO, John Lampe.

FORD EARNINGS DOWN DUE TO RECALL Ford reported a seven-percent drop in third-quarter earnings, crediting the costs of the Firestone tire recall as being one of the contributing factors. So far, the automaker estimates the cost of the recall to be about $500 million. For three weeks, Ford halted production of its in-demand, best selling Ford Explorer SUV to make replacement tires available for the recall effort. Ford says that it will not be able to make up the lost production of the Explorer, as the factories are already running near capacity.

CHEVRON BUYS TEXACO San Francisco-based Chevron has purchased rival Texaco for $35.1 billion in stock and an assumed debt of $7.5 million. The new, combined company will be called Chevron Texaco. Texaco has been plagued with poor stock performance and a major racial-discrimination suit in recent years, bringing down the company's finances. The deal is subject to approval by the Federal Trade Commission.

GM CUTS U.K. PRICES General Motors' U.K. division is the latest to follow suit in an apparent price war in the country. Vauxhall has announced that all of its British car prices will be cut by up to 12 percent. Ford, Toyota, and Rover have already lowered prices in the past few weeks. The British government has recently pressured automakers to reduce the vast price gap between auto prices in the U.K. versus mainland Europe.

END OF THE METRO LINE The joint venture between General Motors and Suzuki that builds the Chevrolet Metro and Suzuki Swift has notified workers that production of the cars will cease as of next spring, according to Wards Automotive Reports. As a result, up to 500 of the 2300 workers at the London, Ontario, CAMI facility could be laid off. The facility also has production lines that assemble the Chevrolet Tracker and Suzuki Vitara compact SUVs—these will not be affected by the change. The plant is operating well below its capacity, so GM may look to add another model to the facility.

HYUNDAI FAVORS SOUTHEAST FOR U.S. PLANT Hyundai has confirmed to Automotive News that it will build both Hyundai and Kia cars in the United States starting in 2004. The company is looking at the Southeastern United States as the prime location for the plant, which would have a capacity of 300,000 vehicles per year. By then, the automaker hopes to have a full line of vehicles in the U.S., including a pickup truck. Although there have been no announcements regarding the products that would be built at the new facility, the company would be most likely to build its light trucks, SUVs, and larger sedans at the U.S. plant.

FOCUS RECALLED Ford Motor Company has recalled all North American Ford Focus models for several unrelated problems. The retaining panel that holds the windshield in place could be weak, a retaining nut for the rear brake assembly could loosen, and there have also been reports that the cruise-control cable can stick. The windshield problem affects all of the U.S. cars, and the other problems affect only a portion of the cars. Ford will be notifying all 351,000 Focus owners.

GM AND TOYOTA JOIN FUEL-CELL PARTNERSHIP General Motors and Toyota have announced that they are joining the California Fuel Cell Partnership. The group, which already includes Ford, DaimlerChrysler, Honda, Hyundai, Nissan, and Volkswagen, cooperates in research on fuel-cell vehicles. The companies are reportedly working on more than 60 fuel-cell vehicles, including the Honda FCX V3. Previously, General Motors and Toyota have cooperated in fuel-cell and alternative fuel vehicles.

LAND ROVER STRIKE About 800 workers at Land Rover's Solihull, England, assembly plant staged a one-day walkout on Tuesday to protest a change in vacation time for workers. The plant, which makes Land Rover's compact Freelander SUV, lost production of about 240 vehicles. The next-generation Freelander will be brought to the U.S. in about two years.

VW TO INVEST $1.4 MIL IN BRAZIL Volkswagen has announced plans to invest about $1.4 million into its Brazilian operations. The money will go toward retooling of an existing facility at Sao Bernardo and also the modernization of existing plants for new models. After the modernizations, the company will produce a new small car that will share its platform with one used by VW's Czech division, Skoda.

HONDA PRESENTS FUEL-CELL CAR Honda has revealed the details of its fuel-cell car, the FCX V3. The prototype car, which will be presented as Honda's contribution to the California Fuel Cell Partnership, will give way to a fuel-cell vehicle that Honda will eventually produce. The 1750-kg car is powered by a 60kW (81 hp) electric motor that gets its power from hydrogen-fed fuel cells. The FCX V3 uses a unique, computer-managed ultra capacitor system that helps to make power delivery smooth. Honda estimates the range of the car, which borrows the regenerative braking system and other componentry from the Insight gasoline hybrid, to be between 100 and 150 miles. There are several great obstacles for Honda to overcome before making the car viable, though, including finding a way to create a network of hydrogen refueling stations and overcoming the extremely high cost of the fuel cells themselves. Honda also put TCC in the driver's seat of the FCX V3—an upcoming road test will give you all the details.