DAILY EDITION: Sept. 2, 2003

September 1, 2003

Mitsu Ousts Gagnon, Takes On O’Neill

Mitsubishi Motors Corp. said Sunday it replaced CEO Pierre Gagnon with Hyundai's U.S. chief Finbarr O'Neill. Gagnon resigned to "pursue other opportunities," but, in fact, was ousted because of Mitsubishi's suddenly bleak results in North America brought about by aggressive lending practices that have created credit losses, as well as charges that Mitsubishi has sometimes artificially boosted monthly sales figures in the last two years. Gagnon joined Mitsubishi Motors in 1997 and had been CEO since July last year, during which time he consolidated Mitsubishi Motors' North American operations into a single organization.

Mitsubishi Ousts Gagnon as CEO (9/1/2003)
Will a turn to Hyundai’s O’Neill help sagging sales?


UAW Hasn’t Picked Target Yet

The United Auto Workers contracts with the Big Three automakers are set to expire in less than two weeks, but UAW officials aren’t ready to name a lead company or target in this year’s negotiations. Ron Gettelfinger, UAW President, indicated that the pace of the contract negotiations had intensified over the Labor Day weekend as the union’s negotiating teams at General Motors Corp., Ford Motor Co. and DaimlerChrysler worked throughout the holiday. The UAW president, however, also said he is not yet prepared to focus on one company during an impromptu press conference following the dedication a new monument in Flint to the sit-down strikers of 1936-37. “That’s my decision to make and I have not made the decision on who would be a lead company or when the time is right,” Gettelfinger said.

UAW Hasn't Picked Target Yet (9/1/2003)
Which automaker will the union tackle first?


WORLD REPORT More Frankfurt Newcomers by Ian Norris

2003 Frankfurt Show Preview by TCC Team (8/11/2003)
Mercedes and BMW assert their territorial rights.

Toyota will show a new hybrid concept car at Frankfurt that will take the company’s hybrid technology into a new market segment. It already has a hybrid family sedan, the Prius, in production, but the new car is an out-and-out sports car. The CS&S (Compact Sports & Speciality) concept is a 2+2 mid-engined car midway in size between Toyota’s MR2 and Celica conventional sports models. Like the MR2, the main engine of the CS&S is mounted in the center of the car, driving the rear wheels. The front wheels are also driven by a powerful electric motor, which contributes to the car’s sporting characteristics by providing strong acceleration. The system is similar to that used in the Prius sedan in that the electric motor is more powerful than those used in other hybrid designs. The CS&S was designed by Toyota’s styling studio in the south of France and is unusual in that although it appears to be a two-seater, it actually has two additional rear seats that are concealed by removable rear canopies. The car introduces a new control technology that uses holographic technology to enable the driver to operate certain systems by ‘touching’ virtual switches that appear as spheres floating in space.

2004 Lexus LS430

2004 Lexus LS430

Frankfurt will see the introduction of the third generation of the Lexus flagship, the LS430. The changes are mainly under the skin, but there are new headlamps and a lower and wider front end, with minor modifications to the body sides and tail. Mechanical improvements include a new six-speed automatic transmission with sequential shift lock mode that is claimed to improve performance and improve fuel economy. Improved lighting includes a system that directs the headlamps to follow the movement of the front wheels and LED rear lamps.

2003 Peugeot 307 Elixir concept

2003 Peugeot 307 Elixir concept

Peugeot’s stand in Frankfurt will highlight a new sedan concept and the company’s 2004 entry in the World Rally Championship. The 407 Elixir points the way to the French company’s next family sedan, with fluid lines that sweep back to rear end that has no visible trunk but features an opening rear window and tailgate that put the car mid-way between a station wagon and a hatchback. The Elixir is evidence of an increased interest in wagons in Europe, but it is far from any conventional ideas of the wagon as a load-carrier — the concept has only two doors and just four seats.

2004 Peugeot 307 WRC

2004 Peugeot 307 WRC

Peugeot is currently enjoying a good run in the World Rally Championship with its 206 WRC car, but it is already looking to the 2004 season, in which it will rely on a completely new car, the 307 WRC. Unusually, the rally car is not based on the compact sedan version of the 307, but on the new 307CC, a convertible with a retractable hardtop similar to that of the Mercedes SLK. The top of the rally Peugeot will not retract, but the body style offers real advantages to the engineers in terms of packaging. The new car is longer than this year’s entry and rides on a longer wheelbase, but weight is the same. Power comes from an all-aluminum 2.0-liter unit that develops around 300 hp.

WORLD REPORT: BRAZIL by Fernando Calmon

The EcoSport compact SUV , made exclusively in Brazil by Ford, is overwhelmingly a success in the Mexican market. In barely two weeks 1500 units were sold in July — a previous full quarter volume forecast. Thanks to its dimensions, engine options and the fact of sharing several components with the Fiesta, the EcoSport is marketed at a true competitive price of US$15,600. The model will surely help the company in increasing market share in Mexico this year, where it ranks fourth at sixteen percent. Ford is also fourth in Brazil presently, at twelve percent. In May it has achieved leadership in the light commercials segment for the first time, thanks to this compact SUV, the only of the kind made in Brazil so far. There are plans to significantly boost exports. The EcoSport is one of its weapons for new markets yet to be explored in Europe, Canada, Australia, Japan, and South Africa. The company expects to export 40 percent of production, which is expected to quickly reverse the chronic losses of the last five years... GM is fulfilling the promise of supporting ethanol use in the U.S. The company was represented at the opening of Wisconsin’s 17th service station in Janesville in July 17, together with National Ethanol Vehicle Coalition (NEVC) people. As the six mid-western states are working hard to expand the outlet network, at current pace the U.S. may become the world’s biggest ethanol producer in a few years. But Brazil, the current leader with 3.6 billion U.S. gallons of ethanol per year, may trigger a reaction soon. The Country’s National Bank for Economic Development has announced on August 25 that resources are at hand for doubling ethanol production. Brazil obtains ethanol from sugar cane at an average price 40 percent less than that of gasoline and with no subsidies at all. In the U.S. ethanol is obtained from corn, at much higher prices.

DAILY IN DEPTH

Is “Solidarity Forever” Still Working?

The Labor Day-inspired Detroit Free Press series on the UAW’s growth, and transplant-inspired decline, holds bittersweet memories for most native Detroiters. Born in the great depression, the UAW weathered loads of automaker resistance before succeeding in being recognized. Workers endured speedups, low wages, no security if laid off, no pensions, no health benefits. Slowly, Walter P. Reuther, a golden-tongued orator, presided over the UAW in its early years and won autoworkers decent wages and attendant benefits. The UAW’s membership soared past the one million mark as the Big Three kept on a growth path. And the only foreign-owned plant started before the Japanese transplant invasion of 1982 — Volkswagen in Westmoreland, Penn.— recognized the UAW as its bargaining union right off the bat in 1978.

The idea that the UAW “automatically” should be the union for any autoworkers in the U.S. or Canada changed when Nissan and Honda began production in Ohio and Tennessee, respectively, in 1982. Workers were hired in the small-town transplant locations whose youth and backgrounds carried no ‘union’ genes. The Japanese created a culture of employees being “team associates” and management sent out a message that union representation was “not needed.” Wages and benefits matched those paid by the unionized Big Three, anyway, while workers were asked to wear uniforms conveying the idea of “team” players. UAW organizers from Michigan were viewed as “secular radicals” if not out-and-out troublemakers. The UAW struck out even when BMW opened a plant in South Carolina and Mercedes-Benz opened one in Alabama — despite the fact the German automakers are fully unionized at home.

As the transplant concept grew in the 1980s and 1990s, cutting a 40 percent chunk out of the Big Three’s historic market share, UAW membership plateaued and then nosedived to about 650,000 currently. Efforts to organize Nissan’s plants in Smyrna, Tenn., or Toyota’s in Georgetown, Ky., have been rebuffed, and the Detroit Free Press reports that a Nashville unionist is quitting an intensive effort to try again at Nissan and Toyota. “Solidarity forever,” the UAW’s motto, may well be a cry of the past. —Mac Gordon

Nissan Surging Ahead in Japan and U.S.

When you’re hot, you’re hot — as is the case with Nissan Motor in the U.S. and Japan. Nissan was the only major Japanese automaker increasing its production at home in July, according to Dow Jones reports (Wall Street Journal, August 26), while in the U.S. it began production a month later of the all-new Pathfinder Armada full-size SUV at the new assembly plant in Canton, Miss.

Reflecting a dramatic comeback that began in 2000 with the Renault takeover, Nissan is racking up gains in all its financials, production, market share, sales volume model offerings and, not the least, operating profits. The Canton plant opened in May with output of the restyled Quest minivan and will finish 2003 by adding the highly-awaited Titan full-size pickup truck. Ancira Nissan, a dealer outside San Antonio — heart of the Texas “truck country” — where archrival Toyota is building a new truck plant, reports that “Nissan buzz” is pulling in shoppers already because of news that the Titan is roomier than the new Ford F-150 and Chevrolet Silverado and generates more power than any rival truck. “Titan is going to do well against F-150 and Silverado,” says the dealership’s sales manager, Gary Patenaude.

At a launch ceremony for Pathfinder Armada, a platform sibling of Titan, Nissan officials in Canton ticked off Nissan’s inroads on competition in U.S. and Japan. Even Honda and Toyota trimmed July output schedules in Japan, while Nissan raised its completions six percent from a year ago for its 17th consecutive monthly rise. A new minivan was launched in Japan by Nissan in July, related to the Quest, and called Presage. Nissan’s U.S. market share for the January-July period spiked to 4.6 percent from 4.1 percent in the same 2002 period. Operating profits for parent Nissan Motor, of which 44 percent is owned by Renault, surpassed $6 billion for fiscal 2002, up from near-zero sums from 1997-1999.

Perhaps the most energizing aspect of “Nissan buzz” stems from the styling flights taken on such new models as Quest, 350Z, Infiniti FX35, and even Pathfinder Armada and Titan. Retired Nissan U.S. styling chief Jerry Hirschberg says that Nissan Motor CEO Carlos Ghosn proved “surprisingly daring in accepting extreme design cues for new models like Quest and Titan for a company that was on the rocks. It was a gamble that paid off, one that a Japanese guy never could have taken — but Carlos, being from France, insisted on.” —Mac Gordon

FROM THE SOURCE headlines from the latest press releases

PRNewswire

As schools open their doors for the 2003-2004 academic years, Operation Lifesaver reminds drivers to be particularly careful along school routes. OL President Gerri Hall encourages motorists to "leave home just a little earlier" to allow for traffic. "At railroad crossings school buses are required to stop, open their doors and look down the tracks both ways before proceeding."


THE TICKER

Name Symbol Last Chg
AUTOLIV ALV 30.21 +0.93
AUTONATION INC AN 18.79 +0.05
ARVINMERITOR ARM 18.82 +0.49
AMER AXLE & MANU AXL 32.50 +0.73
BALLARD PWR SYS BLDP 12.88 -0.04
BORG WARNER BWA 71.22 +1.07
COLLINS AIKMAN CKC 3.07 -0.08
CUMMINS INC CUM 49.84 +0.40
DANA CORP DCN 15.42 +0.02
DAIMLERCHRYSLER DCX 38.23 -0.11
DELPHI CORP DPH 9.06 +0.41
EATON CORP ETN 93.64 +3.44
FORD MOTOR CO F 11.56 +0.12
GENERAL MOTORS GM 41.10 +0.69
GENTEX CORP GNTX 37.50 +0.29
GOODYEAR TIRE GT 7.12 +0.50
HONDA MOTOR CO HMC 20.36 +0.14
JOHNSON CONTROLS JCI 99.00 +2.00
LEAR CORP LEA 55.55 +0.79
MAGNA INTNL MGA 83.60 +1.68
MOTOROLA INC MOT 10.73 0.00
NISSAN MOTORS NSANY 21.76 +0.11
SONIC AUTOMOTIVE SAH 27.50 0.00
TOWER AUTO TWR 4.36 +0.22
TOYOTA MOTOR TM 55.39 -0.11
UNIT AUTO GRP UAG 25.60 +0.45
VISTEON CORP VC 6.75 +0.22

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