NUMMI Marks 20 Years
General Motors and Toyota celebrated 20 years of their New United Motor Manufacturing, Inc. (NUMMI) joint-venture near San Francisco, Calif., on Thursday. Both Toyota Motor Corporation President Fujio Cho and General Motors Chairman and CEO Rick Wagoner, on hand for the occasion, said the plant had benefited both companies: "Without [GM's] partnership twenty years ago, Toyota would not be where it is today," Cho said, while Wagoner noted that NUMMI had shown that "global auto manufacturers can work together and learn from each other." The NUMMI plant, in Fremont, California, builds the Toyota Corolla, Pontiac Vibe, and Toyota Tacoma pickup.
Pontiac Moves Back into Power by TCC Team (7/28/2003)
Big changes coming; could a redesigned GTO be one of them?
Ford: Oakville Decision Coming
Automotive News reports that Ford is close to deciding whether to transform its Oakville, Ontario, plant into a "flexible" plant that can produce a variety of models on the same production line. The weekly quotes Alain Batty, CEO of Ford Canada as saying that the company is "not far away" from talking about its future plans for the plant. Ford operates its Norfolk, Virginia, F-150 plant as a flexible plant, able to switch body styles according to demand.
DAILY EDITION: Sept. 29, 2003 by TCC Team (9/29/2003)
Ford building sport wagons in Ga.
One Small Stack for Man
But with the flick of a switch, General Motors and Dow insist they took a giant leap for mankind on Tuesday. With a procession of dignitaries — including Department of Energy Secretary Spencer Abraham on hand, the two partners activated the first of what may eventually be 400 stationary fuel cell stacks providing power to Dow's sprawling chemical production complex near Houston. The pilot fuel cell produces a modest 75 kilowatts of electricity — enough to power a dozen homes. If the partners eventually reach the planned 400 stacks, that would grow to 35 megawatts of power, enough for a modest-sized city. "Today, we're one step closer to the hydrogen economy," declared GM's technology director, Larry Burns. In August 2002, when the plan to produce stationary fuel cell generators was first announced, Burns suggested GM might create a new business unit, using the money to help fund automotive fuel cell research. Burns now tells TheCarConnection that such plans have been scrubbed, though GM will search for other partners, like Dow, to field prototype fuel cell generators. Such devices use the same basic hardware as that found in GM's prototype fuel cell vehicles, and should provide a proving ground for the technology. By 2010, the automaker says it hopes to begin commercial production of FCVs, and Burns repeated GM's goal of being the first car manufacturer to profitably field one million fuel cell vehicles. — TCC Team
Kerry: U.S. Needs More Efficient Vehicles by Joseph Szczesny (2/2/2004)
Democratic candidate will need Detroit against Bush.
Valade Takes Stand in DCX Trial
Former Chrysler CFO Gary Valade says shareholders received the top price Chrysler executives calculated the company would bring at sale when Daimler-Benz merged with the automaker in 1998.
Testifying in the Delaware trial that has pitted former Chrysler shareholder Kirk Kerkorian against DaimlerChrysler chairman Juergen Schrempp, Valade said Tuesday that Chrysler negotiators calculated that a price of $57.50 a share was the best they would be able to get from Daimler-Benz shareholders. Chrysler got its target price in deal negotiations with Schrempp, said Valade who called the $57.50 price "a home run."
Kerkorian charges in his $1 billion lawsuit that he and other shareholders were duped into voting for a merger that was really a takeover that should have paid shareholders like him a higher price for their shares. During Tuesday's proceedings, court attendees heard the infamous Financial Times interview with Schrempp in which he says he had always intended to make Chrysler a division of a larger company, but had to go about the deal in a "roundabout" way for psychological reasons. Valade says even if Schrempp had made those comments in 1998, he would have pushed for the deal at the per-share price that was agreed upon. Schrempp testified Monday that his "psychological reasons" comment was referring to workers, not shareholders and management team members that were negotiating the deal. Valade offered that he made close to $22 million from the merger deal. Kerkorian's lawyers may yet try and make a case that Chrysler managers were anxious to close a deal for their own profit, thus short-changing common shareholders. That argument will be hard to make, though, because a higher price paid for Chrysler would have benefitted managers too. But managers were also aware that there was no credible or interested merger partner for Chrysler other than Daimler-Benz. — Jim Burt
Next Kerkorian-DCX Slugfest Due by TCC Team (2/2/2004)
DCX awaits its next court round with battlin' Kirk Kerkorian.
January Deals Climb, But Fail To Ignite Sales
The average auto incentive per unit increased 35.9 percent year-over-year in January to $2751 per vehicle, said Autodata. That number looked big considering that auto sales clocked in at a seasonally adjusted selling rate of 16.1 million, down from 16.2 million a year earlier. The incentive levels, noted Merrill Lynch John Casesa, shows price cutting is not only intense, but getting worse, despite Detroit's now often-repeated expectation that incentive spending will moderate in 2004. With end of January inventories heavy, more incentives are coming online for February, such as a generous lease deal initiated over the weekend by GM. GM has been trying to limit its leasing on non-luxury vehicles, but is having to pull out the stops to save the first quarter sales after a sluggish January start to the New Year. Casesa noted, too, that 72-month loans are now between 10 and 20 percent of current loan business and climbing. — Jim Burt
Jan. Sales Disappoint GM, Ford by Joseph Szczesny (2/9/2004)
Asian makes continue to erode U.S. market share.
Werner, Former MBAG Head, Dead at 67
The man who brought new life to the Mercedes-Benz brand has died in Germany. Helmut Werner, 67, led Mercedes-Benz AG from 1993 to 1997, expanding the brand's lineup with new vehicles like the M-Class and SLK. Werner left MBAG in 1997 when Juergen Schrempp took over as chairman of the company, and then merged it with DaimlerChrysler. Werner also served as chairman of Continental AG prior to his tenure at Benz, and head of the supervisory board of Expo 2000 in Hannover, Germany, after his departure from Mercedes-Benz.
Yost Stepping Down from ArvinMeritor
Larry Yost will step down as CEO of ArvinMeritor, the supplier that aimed last year to take over the much larger Dana Corp. Yost, 65, has been CEO of the company since Arvin Inc. and Meritor Automotive Inc. merged in July 2000, and prior to that, CEO of Meritor. The company has not settled on a successor yet, and Yost has not set an official last day.
Siemens Buying Chrysler Plants
A pair of DaimlerChrysler parts plants in Alabama will be bought by Siemens VDO Automotive, the companies announced on Monday. The plants, which produce electronic parts, will be sold for an undisclosed amount. The companies employ about 2400 workers who make parts worth about $1 billion in sales each year, according to Automotive News.
XM, Sirius Stocks Skittish
Sirius Satellite Radio Monday announced that 2004 and 2005 Mazda vehicles will offer factory installed Sirius on a rolling basis throughout the year with the Tribute SUV, MPV, and Miata getting it in the spring and the Mazda3, RX-8, and Mazda6 getting it in the fall.
It wasn't a surprise since Mazda's master, Ford, has chosen to line up with Sirius instead of XM Satellite Radio.
Even as Sirius and XM line up as many exclusive relationships, each is also launching products that will convert the factory-installed version of each other's hardware to play the programming of the other.
Wall Street, meanwhile, is treating both stocks like Internet stocks circa 1999, citing the services' high costs and debt-load and uncertain future popularity.
Sirius, for example, recently reported fourth quarter revenue of just $5 million, a net loss of $148 million, and market capitalization of a whopping $3 billion. Shares of Sirius are off 30 percent since January 5, closing at $2.90 per share Monday, but up 50 percent from November 25. Sirius added 111,449 subscribers in the fourth quarter, a 75-percent bump from the third quarter, but at a high cost in the form of rebates. Analysts say the radio stocks have been the target of speculative investing. Anyone recall eToys.com?
XM has 1.36 million subscribers and projects doubling that in 2004. Of the 140 million shares of XM that float, 40 million are short. That's large enough to make it so that the stock overreacts to the upside on any good news. It's a similar picture for Sirius.
XM shares are up 14 percent since early November, off 11 percent from two weeks ago, but up about 500 percent from its one-year low.
Wall Street expects XM this year to post a loss before interest, taxes, depreciation, and amortization of $250 million on revenue of $259 million; at Sirius, analysts see negative earnings before interest, taxes depreciation and amortization of $313 million on $72 million in revenue. — Jim Burt