Week of September 27, 1999

September 27, 1999






DC SHAKES UP BOARD The latest round of sweeping changes at DaimlerChrysler has claimed Thomas Stallkamp, president of DC’s Chrysler division. Stallkamp, 53, will retire, leaving James Holden, currently the company’s executive vice president for sales and marketing, in charge of Chrysler operations. Also in the purge, DC trimmed its management board from 17 members to 14. Theodore Cunningham, formerly head of Latin American operations, will be effectively demoted to executive vice president for global sales and marketing. Head of commercial vehicles, Kurt Lauk, is gone, as is the former head of human resources, Heiner Tropitzch, who will be replaced by Guenther Fleig.

For more on the bloodletting at DaimlerChrysler, click here
For Co-Chairman Bob Eaton’s view on the round of changes, click here




MBUSA’S JACKSON TO HEAD AUTONATION The DC defections also include the popular chief of Mercedes-Benz USA, Michael Jackson. Jackson is departing MBUSA to become the CEO of AutoNation USA. Jackson replaces AutoNation co-founder Steven Berrard, who will remain a director of the company. Jackson, 50, began his career at Mercedes-Benz and once ran a Maryland dealership, Euro Motorcars. Jackson will be replaced by Paul Halata, former head of Mercedes-Benz U.K.

For more on the bloodletting at DaimlerChrysler, click here
For Co-Chairman Bob Eaton’s view on the round of changes, click here



SMART RACE DOWN TO 1 A German business daily is reporting that two candidates are in line to run DC’s embattled Smart division — and one of those has a new job already. German daily Handelsblatt reported last week that the race to run the Smart brand (a dubious honor, given its epic launch difficulties) was down to Guenther Fleig, head of Mercedes-Benz France, and Andreas Renschler, head of personnel development at DaimlerChrysler. As of Friday morning, Fleig had been appointed head of human resources, leaving Renschler, former head of Benz’s Alabama assembly plant, as seemingly the only candidate. Smart’s former president, Lars Brorsen, resigned recently over the usual artistic differences.

For more on the bloodletting at DaimlerChrysler, click here
For Co-Chairman Bob Eaton’s view on the round of changes, click here




IS PLYMOUTH DEAD? DaimlerChrysler may announce the demise of the Plymouth brand as soon as next month, according to the Detroit News. The paper points to several recent signals to the brand’s demise, including the lack of new product and removal of Plymouth badges from the tailgate of the 2000 Voyager minivan. Plymouth sales have been shrinking for the past two decades, and although the brand has existed for more than 70 years, its international viability within DaimlerChrysler is seen as minimal.

For more on the bloodletting at DaimlerChrysler, click here
For Co-Chairman Bob Eaton’s view on the round of changes, click here




HONDA GETS INSIGHT The first gas-electric hybrid to hit the ground running will be priced at less than $20,000. Honda announced last week that the Insight, its hybrid compact, will go on sale early next year and will be priced comparable to the least expensive versions of its midsize Accord sedan. Honda plans to market 4,000 of the vehicles in the United States in its first year. The Insight uses a gasoline engine and a battery pack in tandem to cut emissions and increase fuel efficiency to 70 mpg. The Insight will also be sold in Japan beginning in November and in Europe starting early next year.

To get more Insight, click here



FORD GOES ONLINE WITH MICROSOFT Have you driven a PC lately? With the latest business venture between goliaths Microsoft and Ford, ordering your next Ford vehicle might involve a little wheel-spinning on the World Wide Web. Last Monday, the two companies announced a partnership where new-car buyers will be able to use Microsoft’s CarPoint site to designate the color, options, and trim on new Fords. The order will be matched against dealer and factory inventories first, and sent as an order to the factory if no such car exists. Once the specs have been clicked off online, the purchaser will arrange a price and delivery details with a local dealer, thus keeping Ford in line with franchise laws that forbid carmakers to sell their vehicles directly. While Ford is taking a piece of the CarPoint business, Microsoft says it intends to bring online other manufacturers in a similar manner.



MERCURY LOSES ITS MYSTIQUE It’s the end of the assembly line for the Mystique, the second Mercury this year to go the way of the Montclair. Ford says it’s halting production of the Mystique in December, when its sister Contour sedan moves production to Mexico. The Mystique, the smallest sedan in Mercury’s lineup, means the brand is without an entry-level car — the new Focus is being reserved for Ford only.

Earlier this year, Ford killed the Mercury Tracer econosedan.



NEW AIRBAG STANDARD BREWING? Automakers have proposed a new 25-mph front-impact test for airbags in the hopes of warding off more stringent standards they say are nearly impossible to meet without risk. The new 25-mph standard for crash tests would involve unbelted crash-test dummies; the Department of Transportation has suggested it might return to the 30-mph frontal crash with unbelted dummies to improve safety in new vehicles. Automakers say that the tougher test will force them to revert to airbag designs with faster inflation speeds and higher explosive forces that could injure children and small adults. According to data from the government, airbags were responsible for 143 deaths this decade.



FORD, CAW REACH TERMS Ford and the Canadian Auto Workers union (CAW) have reached a three-year agreement that covers some 13,000 workers in Ontario who make minivans, pickup trucks, large sedans and engines, Reuters reports. The agreement will raise wages for assembly plant workers by 3 percent in each of the next three years, plus offers cost-of-living increases. The agreement relieves Ford of some anxiety that its most popular sport-utes and pickups might be faced with engine shortages — especially the new Excursion brute-ute. Ford is still negotiating with the UAW on terms for a new labor contract in the United States.



GM, FORD TELL SUPPLIERS TO ‘GET GREEN’ Ford and GM are both telling suppliers to step up environmentally friendly initiatives — or else. Last week, the carmakers announced separately that they will require suppliers to meet the international ISO 14001 standard, under which independent auditors evaluate processes to measure energy use, waste disposal, water treatment, recycling and air pollution. Ford will require all suppliers to have at least one facility to the standard by the end of 2001 and all plants shipping products to Ford compliant by July 1, 2003. GM, meanwhile, will require all supplier facilities to meet the standard by Dec.31, 2002.



BREED FILES CHAPTER 11 Breed Technologies Inc., the third-largest maker of automotive airbags, has filed for Chapter 11 protection from its creditors, citing more than $1.6 billion in debts after suffering continued losses over the past two years. Lakeland, Florida-based Breed also listed $1.32 billion in assets and $330 million in bond debt in documents filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware, Reuters reports. Though the company has shed 5,000 workers, it may be forced to sell its assets. Sweden's Autoliv AB, the largest airbag maker, said earlier this month it was negotiating to buy parts of Breed, Reuters adds.



VW BUILDS 100 MILLIONTH CAR Volkswagen AG’s sales may be in a slump, but overall it’s doing OK. Recently, the carmaker marked the production of its 100 millionth car. The first production VW Beetle rolled off the Wolfsburg, Germany, production line in 1938. "It began with my grandfather Ferdinand Porsche on January 17, 1934 when he gave the government an 'expose' on the construction of a 'People's Car,''' said VW Chairman Ferdinand Piech in a prepared statement. Of the 100 million cars, some 82 million have been VWs, 12 million Audis, 5 million Spanish-made Seats, and 2 million Czech-built Skodas.




CHEVY WILL ‘BE THERE’ Chevrolet’s new ad slogan, "We’ll Be There," will be used to hawk its new midsize car lines, the brand announced last week. The tagline will first be used by the Monte Carlo coupe, then by the Impala sedan, in ads to air this fall. The campaign, by Campbell-Ewald of Warren, Michigan, features spots showing owners frustrated by technology and travel but soothed by their Chevy. Each spot poses the question: "Don't you wish everything was as dependable as a Chevy?"



HALF OF DRIVERS RUN LIGHTS While almost all drivers recognize the danger in running red lights, a recent survey says more than half of us willingly disobey them at times. The survey, by the National Highway Transportation Administration and DaimlerChrysler, was announced at the beginning of National Stop on Red Week, which started on Friday. In its results, NHTSA found that some 56 percent of 880 drivers interviewed admitted to running red lights and 19 percent said they had run at least one red light in the last 10 intersections. More troubling: some ninety-eight percent agreed the practice was dangerous but 48 percent cited no compelling reason other than being in a hurry. Nearly 1000 people died last year as a result of running red lights, according to Reuters. In profile, the average light-runner is more likely to be a male between 18 and 25 years old, either unemployed or in a low-technology job, Reuters adds.

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