TCC'S DAILY EDITION: July 15, 2003
NHTSA Releases Rollover, Side-Impact Ratings
SUV Wars Roll into Court by Joseph Szczesny (6/2/2003)
Groups sue the NHTSA to keep new fuel-economy rules from taking effect.
Toyota Adding Hybrid Technology to Trucks
2004 Toyota Prius
Hybrids Growing, Diesels Too? by Joseph Szczesny (6/23/2003)
Uncertainty reigns in Detroit over which higher-mileage option will win the day.
Hyundai May Build R&D Center
Automotive News reports that Hyundai is looking for a home for a new research and development center for its Hyundai and Kia vehicles — and the home could be in Michigan or Alabama. The weekly says the Korean automaker is studying sites near Pittsfield Township, Mich., and in Alabama, where the company has broken ground on a new assembly plant on the south side of the state capital of Montgomery. The new R&D center would represent an investment of $240 million and could be as large as 200,000 square feet.
2004 Hyundai XG350 by Robert Ahl (6/30/2003)
The Koreans build a Japanese luxury car.
Mitsu Hires SpongeBob to Sell the Endeavor
2004 Mitsubishi Endeavor
2004 Mitsubishi Endeavor by Robert Ahl (5/12/2003)
Just how goofy can SUVs get?
GM Very Unlikely to Bow to Fiat Put
While Wall Street has been long speculating on whether GM will have to absorb struggling automaker Fiat into GM Europe, GM insiders say it probably will never happen. Fiat has an option, based on the deal that gave GM’s control of 20 percent of Fiat in 2000, to make GM buy the rest between 2004 and 2009. But one GM executive said that the deal would likely not happen because Fiat would not accept a third-party assessment that the company was worth less than zero dollars and because GM could drag the validity of the option through courts for many years.
Meanwhile, The Financial Times had quoted Fiat CEO Giuseppe Morchio as telling investors that GM believed legal problems made its promise to buy Fiat Auto by 2004 invalid, although Morchio believed the put option was enforceable.
“The put is a right that begins in 2004 and is valid until 2009,” Morchio said in a statement. “I never made comments about GM's position regarding the put.”
GM officially doesn’t deny the legality of the put, but executives say Fiat wouldn’t even try to exercise it because they know of the prolonged legal hurdles. GM is only interested in taking on Fiat in the distant future and on its terms.
GM bought 20 percent of Fiat Auto for $2.4 billion in 2000 but last year wrote down its value to $220 million. The 2000 “Master Agreement” gave Fiat the right to force GM to buy the rest from 2004 to 2009.
In a filing with the U.S. Securities and Exchange Commission, GM said in March the put option “could become non-exercisable under other provisions of the Master Agreement (or) could be rendered unenforceable by reason of actions Fiat may have taken.” —Jim Burt
Suzuki Prices Verona from $16,499
2004 Subaru Verona and Forenza
Ford Scuttles New Ga. Plant?
Automotive News reports that a proposed replacement plant for Ford’s top-ranked Atlanta assembly facility has been scuttled. Ford is said to have searched for a greenfield site that, with supplier parks and a new assembly plant, would have replaced its aging Atlanta plant. But financial considerations have apparently put the plans on hold, meaning that Ford will not be moving to suburban Morgan County, Ga., or Meriwether County. The decision, reported by the weekly, could be seen as preserving employment levels through the upcoming UAW contract talks; the plan also keeps intact one of Ford’s highest-ranking workforces in terms of product quality. The Atlanta plant churns out Tauruses and Sables and regularly finishes in the annual Harbour Report as one of the country’s most efficient assembly plants. A source tells Automotive News that Ford will freshen the Taurus in 2006, ostensibly leaving it in production at the Atlanta plant through 2009.
DAILY IN DEPTH
Asbury Folds Used-Car Lots at Wal-Marts
An experiment in selling used cars at Wal-Mart store parking lots has been called off by Asbury Automotive Group, a publicly-owned megadealer based in Stamford, Conn., as cited in Automotive News (July 14) and the Wall Street Journal (July 11). Asbury said that the pilot program, launched last year at four Wal-Mart locations in Houston, resulted in losses of $2.3 million this year. Not enough Wal-Mart shoppers stopped by the “Price 1” showrooms or adjacent used-car inventory displays to warrant continuation of the program. “Customer traffic was lighter than expected,” according to Asbury CEO Ken Gilman. Allen Levenson, Asbury’s vice president of sales and marketing, indicated that sales “ended in the 50-per-store-per-month range.”
Veteran dealers recalled that in the 1950s, Kaiser-Frazer Corp. franchised Sears stores to sell its Henry J subcompact car as the Allstate model. The department-store plunge into auto retailing ended when Kaiser-Frazer, based in Willow Run, Mich., went out of the auto business in 1954. The Sears episode prompted many states to amend their auto franchising laws to require that only dealers with “contiguous” service facilities could obtain franchises to sell motor vehicles. Sears stores were servicing Allstate cars in distant auto service centers.
Wal-Mart, the largest general retail network in the U.S., rented space to Asbury for the Price 1 outlets but did not otherwise participate in marketing or servicing at the Houston locations. —Mac Gordon
Top Brass Assemble in Tokyo for “Auto Summit”
A glittering array of world CEOs and COOs has been lined up for the Tokyo International Automotive Conference 2003, scheduled October 20-21 in Tokyo, to be held at the New Takanawa Prince Hotel. According to the ad posted in the Wall Street Journal (July 11), it is billed as an “auto summit unprecedented in scale.” Organized by Nikkei Business Publications, Inc., with special sponsorship by the Japan Automobile Manufacturers Association and the Wall Street Journal as one of its cooperative supporters, the conference will present top leaders of eleven automakers as speakers and honor GM CEO G. Richard Wagoner, Jr. with the Athena award for “excellence in automotive leadership.”
The industry speakers list includes CEOs or COOs Helmut Panke, BMW; Carlos Ghosn, Nissan; Nicholas Scheele, Ford; Rolf Eckrodt, Mitsubishi; Jujio Cho, Toyota; Dong-Jin Kim, Hyundai; Bernd Pischetsrieder, Volkswagen; Jean-Martin Folz, Peugeot-Citroën; and Takeo Fukui, Honda. Other industry speakers include Juergen Hubbert, chief of the Mercedes car group of DaimlerChrysler and Frederick Henderson, GM group vice-president and president of GM Asia Pacific.
A dinner October 20 will be keynoted by Karen Elliott House, publisher of the Wall Street Journal, and U.S. auto analyst Maryann Keller. A discussion will follow with Wagoner and Honda Chairman Yoshihide Munekuni. The focus session is planned around the China market and environmental issues. Conference theme is “new technologies and markets in the automotive industry.” Further information is available at 81-3-3479-5875 or [email protected].
FROM THE SOURCE headlines from the latest press releases
Gov. Bob Riley joined with officials from Toyota Motor Manufacturing Alabama on Monday to announce an historic major expansion of the company’s facility currently located in the Huntsville/Madison County area. Toyota’s expansion will include an additional investment of $20 million in its Alabama facility and will add 150 new jobs, a figure that raises the facility’s total workforce to approximately 500 employees. The additional investment will allow Toyota to produce 130,000 Alabama-made V-6 Tacoma and Tundra pickup engines and bring its total production to 250,000 engines per year.
|AMER AXLE & MANU||AXL||27.71||+0.42|
|BALLARD PWR SYS||BLDP||13.93||+0.19|
|FORD MOTOR CO||F||11.31||+0.02|
|HONDA MOTOR CO||HMC||21.00||-0.02|
|UNIT AUTO GRP||UAG||23.28||+0.14|
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