CHRYSLER SHAKEUP
GM AND DC IDLE
PLANTS
BRIDGESTONE FIRESTONE LAYOFFS
MAZDA MOVES PRODUCTION TO EUROPE
DAEWOO
PRESIDENT APPEALS TO UNIONS
STATES AGREE WITH CA DIESEL
RULES
NHTSA OPENS INVESTIGATION INTO GOODYEAR
TIRES
JEEP WILL KEEP CHEROKEE
FORD
AND VISTEON BABYSIT
DC STOCK DIVES
DAEWOO SUPPLIERS SUFFER
ZETSCHE TO
PHASE OUT INCENTIVES
SLATER REVEALS CHILD-SAFETY
PLAN
CHRYSLER
SHAKEUP DaimlerChrysler AG last week replaced Chrysler operations president
James Holden with Dieter Zetsche, a top executive in DaimlerChrysler's
commercial vehicles unit. Wolfgang Bernhard, of Mercedes-Benz's AMG performance
group, will be appointed as Chrysler's new chief operating officer.
DaimlerChrysler is hoping that the two new top executives will be able to turn
around the ongoing losses at the Chrysler division. Following the
announcement, three more executives have left DaimlerChrysler, likely in
response to the management changes announced by the company last week. Chief
administrative officer Kathleen Oswald and Theodore Cunningham, DC's vice
president of global sales and marketing for Chrysler, both announced their
retirement effective immediately, and Tony Cervone was forced out of his
position as vice president, communications. Cervone had only recently returned
to DaimlerChrysler from a position at General Motors.
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GM AND DC IDLE
PLANTS Both General Motors and Chrysler have announced that they will idle
some plants in the next few weeks due to excessive inventories. GM plans to idle
6100 workers at assembly plants in Janesville, Wisconsin, Shreveport, Louisiana,
Wentzville, Missouri, and St. Therese, Quebec. DaimlerChrysler will idle 3100
workers at its Belvidere, Illinois, plant this week, and it will also idle
several North American plants next week due to excess inventories. The plants to
be idled are in Bramalea, Ontario (Chrysler 300M, Concorde, and LHS), Jefferson
North in Detroit (Jeep Grand Cherokee), and Toledo, Ohio (Jeep Cherokee and
Wrangler). The temporary shutdown affects about 13,600 workers.
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BRIDGESTONE FIRESTONE LAYOFFS Bridgestone Firestone has decided to
temporarily lay off 1100 workers starting in January, mainly due to falling U.S.
sales from the massive Firestone recall. The company reports an oversupply of
most passenger car and light truck tires. The plants that are scheduled for
production cuts are those in LaVergne, Tennessee, Oklahoma City, and Warren
County, Tennessee. The company has already laid off about 450 workers at the
Decatur, Illinois, plant where most of the 6.5 million recalled tires were
made.
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MAZDA MOVES
PRODUCTION TO EUROPE Mazda Motor Corporation has announced that it will cut
about one fourth of its manufacturing capacity in Japan, in favor of launching
new production efforts in Europe. The changes will mean about 1800 lost jobs at
Mazda's facilities in Japan. The movement toward production in Europe will
enable Mazda to establish a stronger presence in the European market and cut its
losses due to trading against a weak euro. Mazda plans to make about 100,000
cars per year at an existing Ford plant in Europe. Although the site has not
been finalized, most likely locations are in Germany, Belgium, or
Spain.
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DAEWOO
PRESIDENT APPEALS TO UNIONS Daewoo's current president, Kim Dae-jung, has
warned labor unions that the car company will not survive if the unions will not
accept layoffs. Daewoo declared bankruptcy on November 8 after the labor union
rejected a plan that would cut more than 3000 workers. Daewoo Motor has applied
for court receivership, although officials anticipated that the receivership
will not be granted. The president has made an appeal to the workers that any
layoffs would be reversed as soon as the company is prosperous
again.
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STATES AGREE
WITH CA DIESEL RULES Thirteen more states have announced intentions to join
California in enforcing strict new emissions requirements for heavy-duty diesel
trucks registered in the states. The requirements would go into effect in 2005,
two years sooner than a similar federal law goes into effect. The states, mainly
in the northeast, jointly announced their intentions to close the "emissions
loophole" for big trucks. The new rules will especially crack down on the most
noticeable sooty particulate matter that trucks emit.
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NHTSA OPENS
INVESTIGATION INTO GOODYEAR TIRES The National Highway Traffic Safety
Administration (NHTSA) has opened a preliminary investigation into
tread-separation problems with Goodyear Load Range E tires. The agency has
received reports of 31 crashes and 15 deaths attributed to failure of the tires.
Goodyear claims that it has already completed its own investigation of the
tires, and concluded that all of the incidents were caused by overloading, road
debris, or improper tire maintenance. About half of the tires included in the
investigation were sold as original equipment on Ford and Dodge heavy-duty
trucks and other commercial models.
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JEEP WILL KEEP
CHEROKEE DaimlerChrysler AG has announced that it plans to sell the new Jeep
Liberty mid-size SUV alongside the Jeep Cherokee, the vehicle that the Liberty
was originally intended to replace. The Liberty will be built in Toledo, Ohio,
along with the Cherokee and Wrangler.
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FORD AND VISTEON
BABYSIT Ford Motor Company and Visteon have announced that their employees
will be able to get onsite child care at new family centers to be built near the
companies' facilities around the U.S. Over the next few years, the companies, in
cooperation with the United Auto Workers, will open 30 centers in 14 states. The
centers, which will each provide care for about 220 children, will also include
tutoring and health-screening services. The child-care service will demand a
fee, although some of the services will be free.
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DC STOCK DIVES
According to a Detroit News report, DaimlerChrysler's stock hit an
all-time low Monday, despite the appointment of Dieter Zetsche as the Chrysler
Group's new president. DCX stock closed at $40.10 on Monday, and slid even lower
on Tuesday, to $38.85. Since January 1999, when the company's stock hit a record
high of $108, Monday's price represents a total loss of value of $68 billion.
U.S. investors currently hold only 20 percent of outstanding company shares,
versus 44 percent at the time of the "merger."
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DAEWOO
SUPPLIERS SUFFER Several of Daewoo Motor Co.'s first-tier suppliers may
become insolvent if the Korean courts fail to resolve Daewoo's bankruptcy
situation. According to various sources, most at risk is Korea Delphi Automotive
Systems, a joint venture between Daewoo Motor and Delphi Automotive Systems.
Four of Daewoo's cooperatively run suppliers have already encountered financial
trouble. Daewoo has made a final appeal to Korea Development Bank, although the
chances of the bank granting an additional loan, or the Korean courts placing
the company in receivership, are slim.
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ZETSCHE TO
PHASE OUT INCENTIVES New Chrysler Group chief Dieter Zetsche sent out an
e-mail to employees saying that they "don't have much time to fix things,"
according to a Wall Street Journal report. Zetsche addressed employees
and dealers on the building of the Chrysler brand, saying that selling vehicles
on the cheap will not build the brand's image. Recent financing incentives and
rebates of up to $4000 on some models are expected to be phased out under
Zetsche's rule, which will undoubtedly make dealers unhappy.
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SLATER REVEALS
CHILD-SAFETY PLAN U.S. Transportation Secretary Rodney Slater Wednesday
revealed a new Child Restraint Safety Plan. The plan outlines more than 30
activities that would lead to better protection of children ten years old and
younger. Included in the plan is a proposal that would include child safety
seats in car crash testing and the development of a ten-year-old-size dummy. The
plan also includes a review of the agency's policies on child seats, and the
publishing of a guide and other consumer information.
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