TCC Daily Edition: 8/7/01

August 7, 2001

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GM TO SELL STATIONARY FUEL CELLS

General Motors plans to bring its first fuel cell to market within the next two years, the automaker will announce this morning. But the products it brings to market won’t come with steering wheels. Many analysts predict a huge market for the “green” technology as an alternative power source for homes and offices, as well as for use in rural under-developed regions that lack an electric infrastructure. In his prepared text, GM’s technology chief, Larry Burns, alluded to the market building potential of stationary fuel cells: “In addition to being an exciting business opportunity, it would accelerate our learning with respect to increasing consumers’ familiarity with fuel- cell technology, and understanding its durability and manufacturability.” Like many of its key competitors, GM still plans to begin limited production of mobile fuel cells by mid-decade. But while the technology has a solid shot at eventually replacing the long-lived internal combustion engine, few experts believe fuel- cell-powered vehicles will achieve significant sales before 2010, at the earliest.

Report says GM pushing for weaker clean air, diesel rules

Even in the wake of an industry victory over possible tightening of fuel economy standards, General Motors is reportedly getting ready to lobby for looser clean-air rules allowing wider use of diesel engines, possibly arguing the diesels will save fuel over gasoline engines in light trucks. The reports appeared in the Monday online editions of The Wall Street Journal. The newspaper said GM would be taking its pro-diesel campaign public as part of a report by the Diesel Technology Forum, a Virginia-based trade group made up mostly of makers of diesel engines and diesel-system components. Exxon Mobil Corp. is also a member. GM is the only automaker in the group. (See related item in FROM THE SOURCE).

Auto workers at NUMMI ratify deal

A four-year labor pact between NUMMI and its 4,000 workers, members of United Auto Workers local 2244 was ratified Sunday by a four-to-one margin, the union announced. The previous agreement had expired at 2 a.m. on Saturday. The new agreement includes a $1,450 lump sum payment and a three percent wage increase in each of the four years of the deal. Other features include pension improvements for future retirees and a boost in the company contribution to the 401(k) plan. NUMMI workers with at least 10 years of service will now be able to retire at age 62 with full pension and health benefits.

Striking Aussie workers ordered back to work, union says it will decide

While the country’s Industrial Relations Commission has ordered 350 striking workers at a steering components assembly plant back to work, their union has said, in effect, “maybe, maybe not” to the tribunal’s edict. The union, the Australian Manufacturing Workers Union, said it would decide on Tuesday at noon whether to comply. Tribunal commissioner Bob Redmond said the impact on the auto industry, which was mounting at up to $206.5 million (U.S.) per week, was the reason for the back to work order. “On this ground I accept the argument . . . that this will cause significant damage to an important part of the Australian economy.”

Toyota plans to sell 2 million in U.S. by 2006

Two million by 2006. That’s the reported goal by Toyota for its U.S. sales, a report in the Wall Street Journal’s online editions said Monday. The automaker is also reportedly eyeing a fifth North American assembly plant, this one in Mexico. Toyota already has plants in Cambridge, Ont., Georgetown, Ky., Princeton, Ind., and Fremont, Calif. (jointly owned with General Motors). Yoshi Inaba, head of Toyota’s U.S. sales unit in Torrance, Calif., was quoted as saying Toyota wants to start producing cars in Mexico by 2004 or 2005. The newspaper said Toyota is already expanding its existing capacity in Canada and the U.S. to produce 1.45 million vehicles by 2003.
Roy Chapin Jr., Mastermind of Jeep purchase, dies at 85

Roy D. Chapin Jr., who is credited with the purchase of the venerable Jeep brand by American Motors Corp., predecessor to Chrysler, has died of heart failure at 85. Chapin, who guided AMC from 1967 to 1977, also helped negotiate Chrysler’s purchase of the company in 1987. A funeral service is scheduled for August 11 in Healdsburg, Calif. A memorial service in Grosse Pointe Farms, Mich. will be held at a future date.

DCX looking for $1 billion in cost cutting options

DaimlerChrysler says it wants cuts in its non-material costs that are more than twice its initial target of $500 million. The new target of $1 billion came from Tom LaSorda, senior vice president of powertrain manufacturing, speaking at the 2001 University of Michigan Management Briefing Seminars in Traverse City, Mich. LaSorda said none of the $1 billion nonmaterial cost savings would come from earlier demands that suppliers cut costs by five percent. He also said improvements in quality were a top concern, predicting vehicles such as the Jeep Grand Cherokee and Dodge Intrepid would score at or near the top of their respective classes in next year’s J.D. Power and Associates Initial Quality Survey.
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FACTOID:

SUPPLIERS SAY UPFRONT INVESTMENT NOT TAKEN INTO CONSIDERATION

It’s a harsh pricing environment for auto suppliers. A survey of 67 suppliers (focused on suppliers under $300 million in revenue and in discrete part production) by the Center for Automotive Research in Ann Arbor, MI found that 62 percent of suppliers believe that pricing on nearly every program didn’t acknowledge upfront development investment and 45 percent of the respondents didn’t believe pricing on most programs acknowledges re-capitalization needs.

Find out more about the Center for Automotive Research (CAR) at the Environmental Research Institute of Michigan:

//www.thecarconnection.com
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FROM THE SOURCE:

Mitsubishi pilots Covisint with online auctions

Mitsubishi Motor Manufacturing of America, Inc., (MMMA) is accelerating use of the Internet and related business-to-business technologies by conducting pilot programs with Covisint, the e-business exchange for the automotive industry. Covisint facilitated two trial online auctions July 17 between MMMA and 11 of its suppliers. "One element to becoming profitable over the past two years has been our commitment to reducing and controlling costs. Covisint's online auction process helps us do just that and ensures that our supplier partners are onboard with pricing that is market-driven," MMMA President and Chief Operating Officer Rich Gilligan said. In addition to providing market-driven pricing, online auctions for suppliers will significantly increase MMMA's purchasing efficiency, compressing weeks of bid analysis and negotiations into hours. "The total impact on efficiency is enormous," Gilligan said.

--PR Newswire

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e-Business chief says IT can accelerate technology delivery

Dana Corporation Vice President and Director of E-Business Kevin Moyer [Monday] told automotive suppliers and original-equipment manufacturers that he sees the real value of information technology in its ability to provide the information and communication that will unleash the company's advanced product technologies and systems integration solutions. Moyer delivered his remarks to automotive industry leaders attending the 36th annual University of Michigan Management Briefing Seminars in Traverse City, Mich. "Ultimately, it can be a platform to accelerate the delivery of our advanced product technology and systems integration service solutions. What we're talking about is using information technology to unlock the intellectual property inherent in advanced technology solutions and processes, which is important as manufacturing companies shift their focus toward technology and service solutions. "

--PR Newswire

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Diesel advocates contrast European/U.S. experience

The United States and Europe are taking very different approaches to the use of clean diesel technology to improve fuel economy in passenger cars and light-duty trucks, according to a report released [Monday} by the Diesel Technology Forum. The report, "Demand for Diesels: The European Experience," highlights the dramatic differences in clean diesel technology use and consumer acceptance of light-duty automotive applications between the two continents. "We can learn a great deal here in the U.S. from the European experience with clean automotive diesels, and this report profiles the experiences and policies that have led to these successes," according to Allen Schaeffer, executive director of the Washington, DC-based Diesel Technology Forum. The recent National Academy of Sciences report evaluating fuel economy standards noted the possibilities for reducing petroleum consumption with the use of clean diesel technologies: "direct-injection diesel engines are among engine technologies with high-potential for improved fuel consumption ... and the application of small, turbocharged direct injection diesel engines has seen tremendous expansion in passenger cars and light-duty trucks in Europe." The contrast in diesel usage between the U.S. and Europe is stark: In Europe -- one of every three new cars sold today is powered by clean diesel technology and in the premium and luxury categories, over 70 percent are clean diesels. But in the U.S. -- light-duty diesels account for only about 0.26 percent of all new cars sold, with only slightly higher figures in the light-duty truck markets.

--PR Newswire

THE TICKER

Autoliv (ALV), Closed 20.99, down 0.08

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ArvinMeritor (ARM), Closed 20.78, down 0.10

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American Axle (AXL), Closed 19.58, down 0.16

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Dana (DCN), Closed 25.23, down 0.28

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DaimlerChrysler (DCX), Closed 47.37, down 0.81

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Donnelly (DON), Closed 15.70, unchanged

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Delphi Automotive (DPH), Closed 16.11, down 0.03

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Eaton (ETN), Closed 75.70, up 0.71

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Ford (F), Closed 24.65, down 0.30

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General Motors (GM), Closed 63.15, down 0.13

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Gentex (GNTX), Closed 30.61, down 0.29

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Goodyear (GT), Closed 28.04, down 0.21

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Johnson Controls (JCI), Closed 79.86, down 0.79

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Lear (LEA), Closed 40.95, up 0.75

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Magna International (MGA), Closed 61.98, up 0.48

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SDRC (SDRC), Closed 24.78, down 0.03

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Toyota (TOYOF), Closed 35.75, unchanged

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TRW (TRW), Closed 42.95, down 1.00

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Visteon (VC), Closed 20.59, down 0.01

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Volkswagen (VLKAF), Closed 45.88, unchanged

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