TCC Daily Edition 8-3-01

August 3, 2001

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LUTZ TO START SLOWLY

Don't look for any immediate, wholesale shake-up of the General Motors line-up or its vehicle development process, cautions the automaker's new product czar, Bob Lutz. As TheCarConnection's Daily Edition first reported yesterday, the 69-year-old "car guy" has agreed to join GM in the post of vice chairman. Lutz was personally recruited by GM CEO Rick Wagoner, who admits he was surprised when the former Chrysler president said yes to an offer. For himself, Lutz had good things to say on Thursday, even though he's been critical of GM products in the past. "We're not dealing with a disaster here," he emphasized. "This company has bottomed out and is heading up." In the near term, Lutz said he's simply going to have to learn what is already in the GM pipeline and how its product development process works. The first example of his distinct touch, he hinted, will likely be the concept cars appearing at the January 2003 North American International Auto Show in Detroit. Though he's already well past GM's normal, mandatory retirement age, Lutz has signed a three-year contract, which Wagoner said could be extended. Noting Lutz' father is still working at 93, the now-GM exec quipped: "I have good genes."

BEANS TO BRACKETS: PARTS BUILDER BREAKS GROUND

Toyotetsu MidAmerica LLC has set out to transform a former Owensboro, Ky., bean field into a 174,000 square foot auto parts plant, turning out such unromantic but entirely necessary items as metal radiator supports, center pillars and cross members. Initially employing 120 workers (earning $11 an hour), the 43-acre development is being lauded by officials, one of whom called the groundbreaking an "historic day" for Owensboro. Toyotetsu is initially investing $13.3 million in the plant, which will supply a Toyota facility in Princeton, Ind., where the company makes Tundra and Sequoia models. Officials have said the total investment might go as high as $70 million.

ALSO SELLING WELL IN AMERICA: HYUNDAI MOTOR

Not to be overlooked, Hyundai Motor America rang up a record sales number in July with 31,189 vehicles sold, a 32 percent increase over a year ago. It's a sixth consecutive increase and counting, says Robert Cosmai, vice president of sales, who expects the strong sales to continue. He cited the company's Elantra GT 5-door hatchback and the Santa Fe SUV plus Hyundai's warranty as reasons for the steady climb.

PEOPLEFIRST LENDING INCREASES, EXPECTS $1.5 BILLION BY YEAR END

Online auto loans company PeopleFirst.com says it lent out a record $388 million in auto and motorcycle loans in the second quarter and expects to do even better in the second half of the year, exceeding $1 billion and bringing total lending for the privately-held company to $1.5 billion. The company, which was started in 1995, says 15 percent of its business is to repeat or referred customers. Dealers, who might at first have considered PeopleFirst a competitor, now see the benefit of having pre-approved customers walk through the door, says company CEO Gary Miller.

GM TO OFFER $590 MILLION FOR DAEWOO

It's not a done deal yet. But General Motors is reportedly willing to pay nearly $590 million for the bankrupt Daewoo Motors, South Korea's third largest automaker. Still, GM, which reportedly last month had offered $588 million for Daewoo but without its main plant west of Seoul, is concerned about labor issues. A spokesperson for Daewoo's main creditor-Korea Development Bank-would not comment on the reports.

NOT A GOOD WEEK FOR MITSUBISHIThere are good weeks and bad weeks. This might be the latter for Mitsubishi, which has workers in Normal, Ill., suing for age (and possibly ethnic) discrimination. On another continent, Mitsubishi has apologized to Chinese consumers for selling them defective cars, promising a global free replacement of brakes that might lead to malfunctions or even failures. The five stateside workers engaged a lawyer after Mitsubishi allegedly refused to mediate through the Equal Employment Opportunity Commission. Mitsubishi, which paid out $34 million two years ago related to a sexual discrimination suit, denies any wrongdoing.

DELPHI PLANT TOLD TO 'SHAPE UP' LEAKED LETTER SAYS

A Buffalo, N.Y. area Delphi Automotive Systems plant has been called a "troubled operation" as it struggles to remain competitive. The comments are in a letter from Rodney O'Neal Delphi's president of safety, thermal and electrical architecture, to Delphi's Lockport plant, which makes radiators and air conditioning systems. Still, O'Neal was optimistic. "I believe the Lockport operations can be fixed." A copy of the letter was obtained by The Buffalo News, the newspaper reported yesterday.

FORD TO CLOSE TWO AUSTRALIAN PLANTS AFTER PARTS SHORTAGE

Friday may not be 'shrimp on the barbie' for 5,000 Ford workers in two car plants, but they won't be working either, the result of a strike at a maker of steering systems. More than 300 Tristar workers have forced the national car industry to review operations on a day-to-day basis. Ford will be giving its workers half pay for the day, bringing forward a planned down day in reaction to its supplier labor problems. Some 4,000 workers at a Holden plant have had the last two days off on full pay. Meanwhile, Toyota has said it has not been affected by the Tristar strike.

AIRBAG CUTOFF SWITCHES BEING MISUSED

A survey by the National Highway Traffic Safety Administration shows widespread misuse of the airbag cutoff switches in vehicles where such devices are permitted. Nearly half (48 percent) of the switches were left on when the seat was occupied by children under the age of 12, potentially exposing them to serious injury or death from the airbag's deployment. In most of the cases, the drivers wrongly said the airbags needed to be turned off only for babies (or for passengers younger than their passengers). Another problem? In situations where adult passengers were riding, the airbag was not activated some 18 percent of the time.

HUMMER SALES SLIDE BLAMED ON DEALER TRANSITIONS

Nothing can stop a Hummer. Apparently, not even a 19.6 percent slide in sales. Michael DiGiovanni, Hummer's general manager, said the GM division's sales slide had more to do with a turnover in dealerships than any weakening of interest in the army-style truck. GM, which in 1999 acquired the marketing rights to the Hummer brand from AM General, is dropping some Hummer dealers while signing others, particularly in more affluent markets served by Cadillac dealers. The automaker plans a slimmed down version of the Hummer (dubbed the H2), to be on the market in about a year.

FACTOIDS:

IN THE PACIFIC NORTHWEST: SOLAR-CHARGED PARKING METERS?

"They're ugly, they get in the way, they're a dying technology and we don't have enough parts." Other than that, the parking meters in Portland, Oregon, may not be so bad after all. But Marc Zolton, an aide to Oregon's transportation commissioner, is still determined to phase in a replacement: up to 1,000 pay stations that should bring in more parking revenue while lowering maintenance costs.

GOODYEAR WORKING ON BETTER WET-WEATHER TREAD

It is getting stormier. At least that's the idea behind Goodyear's plans to engineer more wet-weather tread compounds and designs. Increased hurricane activity on the U.S. east and gulf coasts is prompting the tiremaker to get working on technology that will better grip the payment. Their efforts won't come too soon: the U.S. National Oceanic and Atmospheric Administration predicts an increase in hurricane activity since 1995 will continue for another 40 years or so. And because hurricane development is associated with warmer temperatures, Bill Egan, Goodyear's chief designer of advanced tire technology, says the new tires also must resist heat buildup. In the meantime, he has two words of caution for motorists who encounter wet conditions. "Slow down."

FEELING LOST, NERVOUS? YOU'RE NOT ALONE

A study commissioned by Fodor's Road Guides USA shows the top concern of motorists (excluding car trouble) to be a nervous feeling when they're lost, with some 43 percent of respondents, followed by the fear of locking keys in the car. OnStar, GM's wholly owned subsidiary, used the study to explain why its customer base continues to grow. "People want to feel secure when they travel," says OnStar president Chet Huber. OnStar uses Global Positioning System technology to pinpoint a vehicle's location and connect with the motorist through wireless technology.

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FROM THE SOURCE:

Nissan rolls out first Altima in Tennessee

Against a backdrop of cheering employees, Nissan today (Wednesday, August 1) rolled out the first 2002 Altima at its Smyrna, Tenn., manufacturing facility, signaling the company's arrival as a serious contender in the four-million-unit mid-sized sedan segment. "This Altima writes a new chapter for Nissan sedans, and we believe it will be a showstopper," said Dan Gaudette, senior vice president, U.S. Manufacturing. "We have a fully dedicated workforce here in Tennessee, and we will build the Altima with the same attention to detail and quality that has served us so well over the past 18 years."

--PR Newswire

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ASC names new chief technology officer

Dr. Klaus Blickle has been named chief technology officer of ASC Incorporated. Blickle previously was head of Cosworth Technology, a subsidiary of Audi AG. "Blickle's outstanding record of engineering management and strategic planning will have a tremendous impact on ASC's worldwide engineering strategy," said Larry Doyle, CEO of ASC. "ASC is moving forward with its plan to build a specialty vehicle and systems engineering solutions company that is second to none."

--PR Newswire

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Dealers association cheers defeat of higher truck gas standards

The American International Automobile Dealers Association (AIADA) is pleased with the outcome of yesterday's vote by the U.S. House of Representatives to defeat an energy bill proposal that would have increased Corporate Average Fuel Economy (CAFE) standards for light-duty trucks, including minivans, sport-utility vehicles and pickup trucks. Rep. Sherwood Boehlert (R-NY) and Rep. Ed Markey (D-MA) offered an amendment to the House energy bill (H.R. 4) to increase CAFE standards for light-trucks to 27.5 mpg by 2007, matching the current fuel-economy standard for cars. "Yesterday's vote was a strong and bipartisan win for the industry," said AIADA President Walter Huizenga. "Hopefully, this is a wakeup call to all of us in the industry to develop an energy conservation policy that everyone can adopt and work to implement."

--PR Newswire

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THE TICKER

Autoliv (ALV), Closed 20.70, off 0.09

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ArvinMeritor (ARM), Closed 21.75, up 0.25

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American Axle (AXL), Closed 20.90, off 0.12

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Dana (DCN), Closed 25.86, up 0.11

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DaimlerChrysler (DCX), Closed 49.40, up 0.10

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Donnelly (DON), Closed 15.70, up 0.20

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Delphi Automotive (DPH), Closed 16.26, off 0.10

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Eaton (ETN), Closed 73.03, off 0.41

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Ford (F), Closed 25.03, off 0.14

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General Motors (GM), Closed 62.67, off 0.93

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Gentex (GNTX), Closed 32.35, off 0.44

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Goodyear (GT), Closed 28.40, off 0.18

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Johnson Controls (JCI), Closed 79.981, off 0.69

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Lear (LEA), Closed 39.24, off 0.36

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Magna International (MGA), Closed 62.80, off 0.05

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SDRC (SDRC), Closed 24.77, up 0.01

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Toyota (TOYOF), Closed 35.75, unchanged

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TRW (TRW), Closed 44.35, up 0.10

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Visteon (VC), Closed 21.32, up 0.25

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Volkswagen (VLKAF), Closed 45.88, unchanged

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