INDUSTRY REPORT: Jan. 25, 2004

January 25, 2004

Kerkorian Not Lying Down

Billionaire investor Kirk Kerkorian on Wednesday challenged findings by a court-appointed official in the investigation of an evidence snafu that halted the trial of his lawsuit against DaimlerChrysler AG last month. Kerkorian's lawyers filed papers in the Delaware court where the trial has played out, complaining there is still no explanation for the sudden appearance late in the trial of documents Kerkorian's attorneys say were important to his case. Former Chrysler CFO Gary Valade last month produced some 70-plus pages of notes taken by him and assistants at the time the merger of Chrysler and Daimler-Benz was being deliberated inside Chrysler's board of directors. The notes had not surfaced in two years of discovery, and were produced on the eve of Valade's testimony. Collins J. Seitz, the special master charged with investigating the circumstances behind the late discovery of the documents, concluded the documents had been honestly mishandled by outside copying vendors in two different cities, not hidden by DaimlerChrysler attorneys. U.S. District Judge Joseph Farnan is expected to make a final determination on the appropriate remedy for the late discovery of the notes soon, and announce when the trial will resume and when closing arguments can be made. Kerkorian's suit says he, formerly Chrysler's biggest single shareholder, was hoodwinked into backing the 1998 merger, billed as a "merger of equals" by Daimler-Benz and Chrysler management. — Jim Burt

Zetsche: It's DaimlerChrysler For Good by Joseph Szczesny (1/19/2004)
No chance on giving up on Chrysler, says group CEO.

Judge: Leach Can Work Again

A judge in U.S. District Court has ruled that former Ford exec Martin Leach can seek work with other automakers after having been fired by the number-two car company. Leach had contended in court that Ford had fired him, nullifying his non-compete agreement; Ford had argued that Leach had resigned and as such, the employment contract rider still was in effect. Last Friday, U.S. District Judge Paul D. Borman decided that Ford had indeed fired Leach in August of 2003 after the company discovered he'd been trying to land a job at Fiat. A Ford spokesman told the Detroit Free Press the company would examine its options. The ruling leaves Leach able to sue the company for damages.

Ford Uses Car Few Will Buy In Super Bowl Ads

2005 Ford GT

2005 Ford GT

Enlarge Photo
Ford said Thursday it will run two ads for the GT supercar during the pre-game of the Super Bowl. By bypassing the actual game broadcast, the company says it is spending its money wisely because, says Ford Division marketing communication manager Rich Stoddart, attention wanes from the kickoff on.

Two TV spots, one 30 seconds and one 60 seconds, will run that are little more than video postcards of the screaming, growling GT, which "goes on sale" this summer for a sticker of $139,995, though dealers who actually sell them to customers instead of keeping them for their own garages are sure to charge more.

Ford executives have been carried away with the GT ever since chairman Bill Ford introduced the concept at the 2002 Detroit Auto Show. Why spend big money in a pricey Super Bowl venue on a car that doesn't need to be sold? "The answer is, this car is a testament to the capabilities of Ford Motor Co.," said Stoddart. "This is a car no one else can build. It's the perfect car to launch 'The Year of the Car.'" After spending the past few years beefing up its truck and SUV business, Ford this year is launching the Five Hundred sedan, Freestyle crossover and Mustang to go along with the GT, rescuing the beleaguered Taurus and Crown Victoria from having to do battle alone with Honda Accord, Toyota Camry, and Nissan Altima. The GT, Ford hopes, will sprinkle stardust on the more pedestrian offerings.

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