TCC Daily Edition: 8/17/01

August 17, 2001

Welcome to TheCarConnection's Daily Edition, the best source of industry news-delivered FREE right to your e-mail inbox. There’s nothing like TCC Daily News to start off your day (unless, of course, we’re up against a fresh cup of coffee). As always, we welcome your comments and suggestions for making TCC’s Daily Edition the best place on the Web for automotive news. Write to us at [email protected]. The Editors


JUST IN TIME FOR THE DREAM CRUISE—THE LIMITED EDITION PT

As reported in yesterday’s TCC Daily Edition, Chrysler will be offering a series of special PT Cruiser vehicles, dubbed “Series 1”, starting in February. The vehicles will list for just under $24,000 with an automatic transmission. And the vehicles will be limited-edition, with just 7,500 to be made in two (so far) different flavors—a “Woodie” and “Flame” model (at $895 and $499 extra, respectively). The cars are meant to fit in with the custom car theme of the Annual Woodward Dream Cruise (held on the famous boulevard this weekend north of Detroit). Even the “regular” PT Cruisers are hard to keep in showrooms, with the company working to expand total Cruiser production capacity from 200,000 to more than 310,000 by the end of next year. The vehicles are made in Toluca, Mexico, and Graz, Austria.
SUPERCAR MODEL COULD BE MADE, BUT COULD YOU AFFORD IT?

An 80 mile- per- gallon car? Sure. But who could afford it? That seems to be the reason the National Research Council says the Partnership for a New Generation of Vehicles, established under the Clinton administration to facilitate the development of a so-called “supercar” capable of correspondingly super gas mileage might need a rethinking. More realistic aspirations might be significant fuel-economy gains by light trucks, SUVs and pickup trucks that account for half of all new-vehicle sales in the U.S. Indeed, the sales of these vehicles have increased as a percentage of total vehicles since the PNGV program was put in place. The report also points to the likelihood of higher fuel consumption due to new clean-air rules that will make the use of fuel-saving diesel technology more challenging.

WRONG TIRES FOR THE CLIMATE? FIRESTONE SUPPLIED ‘GRADE C’ TO FORD

Bridgestone/Firestone supplied tires to the Ford Explorer that it knew were vulnerable in hot climates. That’s the contention of attorneys representing victims of a Firestone tire-related accident in which a family member suffered a brain injury and is confined to a wheelchair. The family, although it settled with Ford in the case, is now seeking $1 billion from the tiremaker in the first case to go to trial in the U.S. In a deposition, a former Bridgestone/Firestone quality assurance executive said the tiremaker had supplied C-grade tires to Ford, the lowest-rated tires the company makes. The tiremaker, the deposition said, knew that an inflation rate of 26 pounds per square inch, as prescribed by Ford for Explorer tires, was very close to the margin of safety required. In a separate deposition, Firestone CEO John Lampe acknowledged the tiremaker might have learned earlier that some of its tires had defects if it had analyzed claims data. The trial continues.

T-BIRD ANYONE? FOR JUST 38 PERCENT MORE THAN THE STICKER PRICE

Talk about sticker shock. When Alan Must put down deposits for two new Thunderbirds, he expected to pay full price. But not $15,000 over the $39,000 MSRP. He’s suing the dealer, McLaughlin Ford of Royal Oak, Mich., alleging the dealer broke an oral agreement to sell the cars at list so it could cash in on the demand for the retro roadster. McLaughlin Ford, formerly Royal Oak Ford, said it never quoted a price and has the right to sell for whatever the market will bear. While automakers generally discourage markups, dealers are not bound by the “suggested” price and it happens—more recently with the Chrysler PT Cruiser and Audi TT Coupe, both of which went for much higher than MSRP. A trial is scheduled for January, although the dealer is not prohibited from selling the cars in the meantime.
MERCEDES BUYING SPECIAL SYSTEMS FROM HARMAN OVER THREE YEARS

Harman International Industries, a Washington-based maker of audio equipment, says it will sell Mercedes-Benz some $850 million of its “integrated infotainment systems” over the next three years, giving consumers access to sound, video, Internet access, driving directions and other material through a single device. Harman, which has been investing heavily in the technology, opened an engineering center in Detroit to design the new devices. Its automotive business grew 12 percent in 2000, becoming its fastest growing line. Mercedes-Benz, Harman said, will put the devices in E Class and S Class vehicles. It has also made sales to BMW, Porsche, Audi and Renault.

AUTOLIV MOVES AIRBAG PRODUCTION SOUTH OF THE BORDER

Swedish automotive safety equipment maker Autoliv will move production of its North American airbag cushion cut and sew operations from Utah to Mexico in the next 12 months. The plant, now employing 500 people, will be phased down to 40 jobs, all in non-production roles. Cost cutting was given as the reason for the move. The move mirrors similar actions by Autoliv in Europe, where production has moved to Poland from the Netherlands and other high cost countries.

ARVINMERITOR UNLOADING AUTOMOTIVE SEAT MOTOR BUSINESS

Johnson Electric has agreed to buy the manufacturing assets of ArvinMeritor’s Light Vehicle Systems automotive electric seat motor business for $11.7 million with plans to move its production to China by mid-2002. In the transition period, ArvinMeritor will act as a manufacturing subcontractor. Johnson Electric expects to reach sales of $50 million in the first year, the company said.

REVAMPED CAMRY PRICED LOWER THAN PREVIOUS MODEL YEAR, TOYOTA SAYS

In the first major makeover of the Toyota Camry in five years, the automaker has leaked a few details ahead of the 2002 official debut in September. The car, which is priced lower than the current model, comes in a new SE model, which is made to appeal to a younger driver, with chrome exhaust outlet and logos, special performance tires and special-look wheel covers among other features. The new Camry is larger with an increase in horsepower (to 151) but with better gas mileage. Look for more details elsewhere in TheCarConnection.com.

DAEWOO WOULD PRESS ON IF GM BUYOUT TALKS FAIL

What if? What if, indeed? Korean regulators are now warning of contingency plans if General Motors fails in its bid to buy Daewoo Motors. And the bankrupt automaker has tabled a go-alone survival plan if the purchase talks by GM fail to end in a sale. The Korean district court said Daewoo had submitted an independent survival plan that calls on the automaker to get rid of about $13.3 billion in debt, through a combination of repayment or debt into equity swaps. While an acquisition is still the most desirable option, the judge handling the Daewoo survival plan painted a picture of the next best solution: “If there are no buyers, independent survival is the only option. We cannot close down the company.” GM officials have refused to comment on the reports.

FROM THE SOURCE:

FORD URGES BOOSTER SEATS FOR CHILDREN IN NATIONAL CAMPAIGN

Washington Lt. Governor Brad Owen today joined Ford Motor Company, national booster seat advocate Autumn Alexander Skeen, Washington United Way agencies, and a host of local and national safety leaders in calling for a new safety habit in Washington -- booster seat use for children who have outgrown traditional safety seats. The Lt. Governor and Skeen presented the first of 6,000 booster seat donations in the state as part of Ford's Boost America! campaign. Lt. Gov. Owen said, "The National Highway Traffic Safety Administration has stated that traffic crashes are the number one killer of children. These needless tragedies can be avoided, and thanks to this initiative by Ford Motor Company, more than 6,000 booster seats will be available in Washington for use by children who have outgrown traditional safety seats. This is not just another campaign. Child safety is our responsibility." Ford Motor Company Safety Communications Manager Maria Sheler-Edwards said, "Boost America! campaign momentum is building every day. We are pleased to be in Washington because the leadership of this state helped start the booster seat trend that is changing the way children ride in motor vehicles."

--PR Newswire

AVIS SIGNS PARTNERSHIP WITH WEB-BASED CONCIERGE SERVICE

When traveling to unfamiliar cities, members of Avis' Preferred Select program for frequent travelers now need look no further than Avis' special Preferred Select Web site to find one of the best restaurants or the hottest shopping locations in town. Avis Rent A Car System, Inc. announced today that it has signed a partnership agreement with the 10Best Virtual Concierge service to provide the 10 best recommendations for dining, lodging, shopping, entertainment, recreation and other services in more than 270 destinations worldwide. The recommendations by 10Best -- which are unbiased, independently researched, and generally available by subscription only -- will now be available on the Avis Preferred Select Web site.

--PR Newswire

THE TICKER

Autoliv (ALV), Closed 21.15, up 0.14

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ArvinMeritor (ARM), Closed 20.05, up 0.11

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American Axle (AXL), Closed 20.50, down 0.26

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Dana (DCN), Closed 23.38, down 0.14

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DaimlerChrysler (DCX), Closed 47.00, down 0.70

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Donnelly (DON), Closed 15.27, down 0.53

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Delphi Automotive (DPH), Closed 15.76, up 0.26

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Eaton (ETN), Closed 75.39, up 0.52

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Ford (F), Closed 23.47, up 0.924

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General Motors (GM), Closed 62.57, up 0.58

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Gentex (GNTX), Closed 31.10, down 0.35

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Goodyear (GT), Closed 27.05, down 0.13

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Johnson Controls (JCI), Closed 79.39, down 0.44

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Lear (LEA), Closed 42.14, up 0.37

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Magna International (MGA), Closed 67.00, down 1.03

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Nissan (NSANY), Closed 13.30, down 0.12

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SDRC (SDRC), Closed 24.88, up 0.04

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Toyota (TM), Closed 64.95, down 0.80

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TRW (TRW), Closed 13.30, down 0.12

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Visteon (VC), Closed 20.51, up 0.20

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