DC REPLACES HOLDEN
SHIPPERS
HOLDING DAEWOO CARS
COURTS FREEZE DAEWOO
ASSETS
DC MAY IDLE MORE PLANTS
RECALL CUT SALES BY 40 PERCENT
KIA RECALLS
SEPHIAS
MITSUBISHI REPORTS LOSS
FIAT WILL MOVE ARGENTINA ASSEMBLY TO BRAZIL
BRAZILIAN AUTO WORKERS STRIKE
TROOPERS RECALLED
NEW REAR CRASH TESTS
PROPOSED
PT CRUISER SUPPLY DISAPPOINTING
GM/REYNOLDS DEAL DISSOLVES
VISTEON
PLANS MONROE IMPROVEMENTS
MONROE COMES BACK TO
MEXICO
PARTICIPATION LOW IN SAME-SEX
PROGRAMS
DC REPLACES HOLDEN DaimlerChrysler AG has revealed that Chrysler operations president James Holden is to be immediately replaced by Dieter Zetsche, a top executive in DaimlerChrysler's commercial vehicles unit. Speculation began early in the week, when the company had called a supervisory board meeting for Friday. Since Holden's appointment less than a year ago, the Chrysler unit has posted its first operating loss in years and contributed to the German company's lackluster stock price. Wolfgang Bernhard, currently of Mercedes-Benz's AMG performance group, will probably be appointed as Chrysler's new chief operating officer.
For more information on the top management changes in Auburn Hills, click
here.
SHIPPERS
HOLDING DAEWOO CARS Daewoo Motor's shipping companies in Europe are holding
nearly 1700 Daewoo cars on freight ships in Germany and Belgium until the
automaker can pay them. The Korean automaker has been shipping about 50,000 cars
to European ports per month. Daewoo was forced to declare bankruptcy last week
after creditors refused to loan the automaker more money. Although many
of Daewoo's suppliers have agreed to ship parts to the struggling Korean
automaker, Daewoo will likely remain idle due to overdue power bills and the
lack of other essential parts. Daewoo's Bupyong plant was shut down last
week.
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COURTS FREEZE
DAEWOO ASSETS Korean courts have frozen the assets of debt-ridden Daewoo
Motor Co., although they have not yet placed the automaker in receivership.
General Motors and Fiat are still considering a joint bid for Daewoo, but no
progress has been made in recent days. If the company is placed in receivership,
a new administration will be appointed to restructure the company's finances,
but if the court refuses receivership, then the company will be auctioned off in
pieces, which may be what GM and Fiat are waiting for.
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DC MAY IDLE MORE
PLANTS With DaimlerChrysler's Chrysler dealer inventories accumulating once
again, several of the U.S. division's plants may face more temporary shutdowns,
reports the Detroit News. Several plants may be idled for the last two weeks of
the year, until dealer inventories can clear the way for new orders. A decision
regarding the shutdowns may be made soon after the expected change of power in
Auburn Hills.
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RECALL CUT
SALES BY 40 PERCENT Bridgestone Firestone has reported that sales of
Firestone tires fell by about 40 percent through September and October versus
the same period in 1999, while sales of the company's passenger-car tires
weren't as affected by August's massive recall of 6.5 million Firestone
light-truck tires. Firestone now expects the cost of the recall to be about $450
million. So far, 77 percent of the recalled tires have been
replaced.
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KIA RECALLS
SEPHIAS Kia Motors America has announced a recall of all 1998 and 1999 model
year Kia Sephia models. The recall, which affects more than 100,000 cars, has
been called for a potentially defective fuel vapor recovery valve. Improper
operation of the valve may cause gasoline to overflow and spill during fill
ups.
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MITSUBISHI
REPORTS LOSS Japan's Mitsubishi Motors Corporation has reported a
$701-million loss for the six-month period ending September 30. The loss is
nearly twice that reported for the same period a year earlier. The company has
recently scarred its image with reports that the company hid consumer complaint
data going back more than two decades. The exchange rate between the yen and the
dollar is also partially to blame.
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FIAT WILL MOVE
ARGENTINA ASSEMBLY TO BRAZIL Fiat is planning to move the assembly of
several models from Argentina to Brazil, according to sources. Fiat currently
assembles Palio and Uno Mille models in Argentina. The automaker, which believes
that it will be able to be more competitive if it assembles the cars in the
Brazilian market, will cut the Argentina plant to produce only one model, the
Siena.
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BRAZILIAN
AUTO WORKERS STRIKE About 60,000 automotive assembly workers in Brazil have
walked off their jobs, demanding higher wages. The walkout affects Ford, General
Motors, Honda, Mercedes-Benz, Toyota, and Saab plants in Brazil. The workers are
requesting a ten-percent pay raise, although the National Vehicle Manufacturer
Association won't agree to more than eight percent.
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TROOPERS
RECALLED Isuzu has announced a recall of 18,460 Trooper sport-utility
vehicles due to a problem with fuel-tank leakage in crashes. The problem affects
2000 and 2001 model years. In a recent Insurance Institute for Highway Safety
crash test, a fuel line separated, causing the leakage. Owners and dealers have
already been notified of the problem.
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NEW REAR CRASH
TESTS PROPOSED U.S. Secretary of Transportation Rodney Slater has proposed
several upgrades to the way that the federal government conducts rear-impact
crash tests on vehicles. The proposed changes would include a change from the
current rigid, 30-mph test to a deformable, 50-mph test that would more
accurately simulate a rear impact from another vehicle. The fuel system
integrity test would also be raised, from a rigid, 20-mph test to a deformable,
33.5-mph test. Both of the tests are aimed at toughening the standards for the
resistance of vehicle fires. Vehicle fires result in less than one percent of
crashes, while four percent of people killed inside a vehicle were in a crash
that resulted in fire. Manufacturers would have three years to comply with the
new requirements.
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PT CRUISER
SUPPLY DISAPPOINTING DaimlerChrysler has warned its dealers that it will
continue to be far behind in filling orders for new PT Cruisers. The company
will advise dealers, by December 1, of how many 2001 model year PT Cruisers they
will get through next summer. Customers with orders not filled will have to wait
for model year 2002 and pay a higher price. DaimlerChrysler has also ordered its
executives who drive PT Cruisers under a company car plan to turn them in to be
resold. About 120,000 PT Cruisers will be made this year at the Toluca, Mexico,
plant. Additional production will soon start at DC's Graz, Austria, plant,
although production volumes will only be a fraction of that produced at the
Mexico plant. DaimlerChrysler had originally intended the PT Cruiser to be an
image-building car, but rapidly building discontent with the way the company is
dealing with buyers’ unfilled orders and failing to communicate with dealers may
prove worse.
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GM/REYNOLDS
DEAL DISSOLVES Automotive News has reported that a deal for General Motors
to take a ten-percent stake in dealer e-business company Reynolds and Reynolds
has apparently fallen through. Both companies have ended negotiations for the
deal, which would have been worth more than $200 million.
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VISTEON PLANS
MONROE IMPROVEMENTS Visteon Corporation plans to invest $100 million into a
modernization of its Chassis Systems plant in Monroe, Michigan. The improvements
will enable the facility to use new technologies and allow new products such as
an expanded catalytic converter business. The improvements to the plant will be
completed by 2002.
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RENAULT COMES
BACK TO MEXICO France's Renault has announced that it will re-enter the
Mexican car market after a 14-year absence. The automaker will first introduce a
Mexican-built version of its Scenic multi-purpose vehicle, which has been a
sales success throughout Europe in the past few years. The Scenic will be
assembled at an existing Nissan facility at Cuernavaca. Renault plans to sell
about 6000 Scenics and 10,000 other models per year.
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PARTICIPATION LOW IN SAME-SEX PROGRAMS Participation in
progressive new programs that extend worker benefits to domestic partners of gay
employees has been far below that originally expected, reports the Detroit News.
General Motors says that only 114 employees have participated in its program,
while DaimlerChrysler reports that only 89 workers have signed up. Ford isn't
releasing figures for its program. Other major U.S. corporations that have
offered same-sex benefits have posted participation rates far higher than these
in the auto industry, so the figures suggest that the auto industry itself may
not be as progressive as the companies.
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