Weekly News: Jan. 1, 2001

January 1, 2001

OLDS BOLSTERED WITH STRONGER WARRANTY In an effort to attract customers who are hesitant that the Oldsmobile brand will continue to be supported, Oldsmobile has extended its warranty to five years or 60,000 miles, from three years or 36,000 miles. Oldsmobile has already offered incentives of up to $5000 on some models. The new warranty leaves Oldsmobile now with a better warranty than most other GM divisions. Analysts say, though, that the resale value of Oldsmobiles will soon plunge.


COOPER DEAD Race car designer John Cooper has died at 77, after a battle with cancer. Cooper is credited with the development of the rear-engine Formula One race car and also the Mini Cooper, a British cultural icon for decades. Last year, Cooper was named a Commander of the Order of the British Empire for his motor industry fame. The original-generation Mini ceased production just a few months ago.


LORDSTOWN GM WORKERS SETTLE United Auto Workers at General Motors’ Lordstown, Ohio, assembly plant have reached an agreement with GM. With the contract, GM says that production at the plant will continue at least until 2004. According to union officials, the contract puts the plant in line for $500 million renovation for a future model.


DELPHI CUTS JOBS IN MEXICO Delphi has cut about 5000 jobs from its Mexican plants, in an attempt to improve profitability. The cuts are also attributed to the general U.S. auto industry slowdown.


MITSUBISHI READIES FOR JOINT VENTURE Mitsubishi will cut production at a domestic plant in Japan due to a future joint venture with DaimlerChrysler, according to Agence France-Presse and Automotive News. The affected plant, in Nagoya, Japan, will trim about 150 of its 2800 workers. The joint-venture car, known only as the Z Car, is anticipated to go into production in 2003.


DECEMBER SALES DOWN TEN PERCENT Preliminary estimates put December auto sales at one of its weakest levels in several years, with a drop of ten percent from December 1999 to an annual rate of 15.6 million vehicles. Experts also are saying that the estimate for 16.5 million vehicles in 2001 is on the high side. Most major automakers will not report December sales until January 3. Chrysler sales are predicted to drop the most, by nearly 16 percent.


FORD SETTLES SOME CASES Ford Motor Company has rushed settlement on at least eight cases dealing with accidents involving Ford Explorers and Firestone tires. Seven of the cases were in Florida. Most of the accidents attributed to the tires occurred in Florida, California, and Texas. Both Ford and Firestone have about 200 lawsuits filed against them. None of the settlement amounts have been announced.


MITSUBISHI-VOLVO JOINT VENTURE Automotive News reports that Mitsubishi Motors has confirmed a joint venture with truckmaker Volvo AB. Starting in 2004, the two companies will sell similar vehicles that share a jointly developed platform. Mitsubishi will sell the vehicles primarily in Japan, while Volvo will hold claims over the European market.


DC SHARES TUMBLE TO NEW LOW DaimlerChrysler shares last Thursday reached a new four-year low after a Financial Times Deutschland report estimated that the U.S.-based Chrysler division would post a 14.7 percent drop in sales for December. The announcement that Smart sales rose 26 percent for the year seemed to do little to shareholders’ dismal view. According to analysts, with the continued slump in the U.S. auto market, gloomy days for the company may be far from over.


HYUNDAI AND KIA MOVE IN Hyundai Motor Company has officially moved to a new headquarters south of Seoul, Korea, that it will share with Kia Motor Company, also part of the Hyundai Motor Group. The Hyundai Motor Group was previously located in the same building as Hyundai Group, but since the Motor Group separated from Hyundai in August, the company planned to move to a different facility.


GM CUTS WON’T DEAL MANY PINK SLIPS General Motors has announced that cutbacks in salaried jobs over the next year will be done mainly through early retirement programs and attrition, according to the Detroit News. GM plans to add more engineering resources in Mexico. Currently there are about 1000 engineers in Mexico and 20,000 in the U.S.


SMART CAR SALES UP DaimlerChrysler AG’s Micro Compact Car division, which makes the French-built Smart car, says that sales of the Smart rose 26 percent in 2000, due to increased demand for new versions of the car. Sales are estimated to be about 101,000 units for 2000, versus 80,000 for 1999. The division introduced new diesel and cabriolet versions of the car this year.


Headlight News will return on Tuesday, January 2, after the holiday weekend. Happy New Year!

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