DAILY EDITION: Mar. 1, 2004

March 1, 2004

TCC'S DAILY EDITION: Mar. 1, 2004

Saturn May End L-Series Early

Plummeting sales and the coming of the Kappa cars could spell an early end for the Saturn L-Series, according to a report from the Detroit News. The paper reports that the L-Series’ sales have dropped by 78 percent in January from a year before, with inventories of 151 days available to General Motors in an industry when a 60-day supply is considered normal. The L-Series bowed in 1999 as a competitor for the Honda Accord and Toyota Camry. The Wilmington, Delaware, plant that assembles the L-Series is to build the new Pontiac Solstice roadster and other Kappa-architecture vehicles such as the Saturn Curve beginning in 2006. Saturn plans to replace the L-Series with a new car based on the Delta platform that underpins the new Pontiac G6.

Review: Tragic Indifference

It could be that Tragic Indifference: One Man's Battle with the Auto Industry over the Dangers of SUVs , simply arrived to long after the Firestone tire-recall fandango for many people to care about the story. But journalist Adam Penenberg's new book about plaintiff lawyer Tab Turner's crusade against Ford and Firestone for what he believes was faulty design is a worthwhile read for the exhaustive reporting done, which is organized in a fairly compelling way.Penenberg, known infamously as the Forbes reporter who exposed New Republic journalist Stephen Glass as a fraud, focuses literally on the trials and tribulations of Clyde "Tab" Turner, the Little Rock, Ark., lawyer who has done the most damage against Ford and Firestone in cases representing clients who were hurt or killed in rollover accidents in Explorers outfitted with Firestone tires, as well as cases involving rollover deaths of the Ford Bronco.

Review: “Tragic Indifference” (2/29/2004)
Book follows late on Firestone recall, but compelling details save it.

Pentagon Plots for Climate Change

A new study by the U.S. Department of Defense has warned that changes in the earth's climate that are possible in the years to come could undermine the national security of the United States. The report "The Weather Report: 2010 to 2020" was prepared by the DOD's Office of Net Assessment, the Pentagon's in-house think tank headed by one of the Defense Department's in-house legends, 83-year-old Andrew Marshall. The Office of Net Assessment's futurists have over the years successfully predicted the sudden fall of Soviet Union nearly a decade before it happened. The weather report prepared for the Office of Net Assessment by outside consultants indicates that the weather around the globe could change swiftly if glaciers around the world melt. The melting of the glaciers could disrupt ocean currents that transfer heat from the equator, leading to a series of changes that would make weather colder in the Northern Hemisphere and much warmer in the Southern Hemisphere.

Pentagon Plots For Climate Change (2/29/2004)
Report raises security concerns coming from pollution.

American Axle Strike is Over

After a brief strike, the United Auto Workers and American Axle & Manufacturing Inc. have reached a new contract that over time will cut the wages of the company's employees. The wages of 6500 current American Axle employees, many of whom had once worked for General Motors Corp., have been protected in the new four-year contract — but new employees will be hired at lower pay rate that will be negotiated in the next 90 days, union officials said. The union reached similar agreements last year with Visteon, Delphi, and DaimlerChrysler and its Metaldyne Corp., which acquired a key Chrysler Group parts operation last year. The new agreements amount to a tacit acknowledgement by the UAW that even relatively healthy suppliers such as Delphi and American Axle cannot afford Big Three compensation packages in an era when carmakers are pushing suppliers to move to low-wage countries to trim costs. Earlier this month, Tower Automotive, for example, recently announced plans to move from a factory in Milwaukee to Mexico because to trim costs.

American Axle Strike Is Over (2/29/2004)
Wage cuts in the new contract.

DAILY IN DEPTH

New Detroit Show Hall Enters Planning Stage

Preliminary planning that could lead to construction of a new Detroit auto show exposition hall is under way, says show co-chairman Bill Cook. “Government authorities and the leadership of the (sponsor) Detroit Auto Dealers Association (DADA) agree we critically need a larger convention center and more space for the North American International Auto Show,” Cook said, prior to an appearance on the weekly Autoline Detroit TV telecast. “Cobo Hall is nearly 50 years old and NAIAS has outgrown its 700,000 square feet.”

Cook, an import dealer in the Detroit suburb of Farmington Hills who will co-chair the 2005 NAIAS show next January, said the critical element toward building a new center is financing, which could entail a bond issue substantial enough to underwrite centers with one million or more square feet like those in Frankfurt, Las Vegas, and New Orleans. “If the center was big enough,” Cook added, saying the automakers are clamoring for more space here, “Detroit could draw major conventions as well as NAIAS. But we also need adequate adjacent parking, like Chicago.”

Interviewed on the Autoline show by host John McElroy, Cook said new construction was also on the table for his Mazda store. Mazda North America is offering incentives for an extended period to dealers who build a separate showroom for the brand, up to $400 for each new Mazda vehicle sold. A “pretty good deal,” says Cook, who also has Audi, Nissan, Porsche, and Volkswagen franchises. Cook and DADA vice-president Rod Alberts were planning to attend the Geneva and Paris shows this year in an ongoing effort to improve Detroit’s NAIAS. Autoline panelists appearing with Cook on the show were Mac Gordon, contributor to TCC, and Steve Finlay, editor of Ward’s Dealer Business Magazine. The show aired Sunday on Public Broadcasting WTVS, Detroit, and on the national Speed channel. —Mac Gordon

WORLD REPORT: BRAZIL

In a clear demonstration of sympathy to Brazil, GM chairman and CEO Richard Wagoner in person informed both the governor of state of Rio Grande do Sul and the Nations’ president of a new investment. After one year of negotiations, a disbursement of $240 million for the Gravataí, RS plant, the home of the small hatch Chevrolet Celta, has been defined. This industrial unit, the company’s most modern worldwide, will end up with annual capacity increased from current 120,000 to 210,000 units by 2006. Part of investment is aimed for the building a CKD plant, for GM has been betting high in this less risky, exporting strategy lately. Wagoner confirmed that a second model is to be produced in Gravataí, imaginably a sedan version of the Celta... In order to make better use of the ample currency exchange advantage of producing in Brazil, in addition to lower costs, some auto manufacturers are considering the country as an export platform not only to Europe, but to the U.S. as well. In spite of this Volkswagen has decided to take the production of the Golf Generation V to Mexico — a true loss for the country — but Honda is pondering about manufacturing here a subcompact in order to face competition from Korean entries in the American market. The probable platform will be that of the Fit (Jazz in some markets), built at Honda’s Sumaré plant, not far from São Paulo City. The goal is a price under $10,000, or up to 20 percent less than the lowest-priced Civic version... The planned export of the veteran, aluminum-bodied SUV Land Rover Defender to the U.S. might take longer than expected. The company’s engineering center in England must first work to make it comply with US emissions and safety requirements. The vehicle produced in São Bernardo do Campo, SP must undergo several changes, among them the fitting of the airbags not foreseen for the version produced in the country — Fernando Calmon

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Marking a significant breakthrough for fuel cell technology,Honda Motor Co., Ltd, today announced that it has conducted a successful cold-weather demonstration of its FCX fuel cell vehicle equipped with a Honda Fuel Cell Stack. Demonstrating the vehicle's cold-weather performance capabilities and its ability to start in below freezing temperatures, a major hurdle in the drive to create a truly mass-marketable fuel cell vehicle.


THE TICKER

Name Symbol Last Chg
AUTOBYTEL INC ABTL 13.90 -0.25
AUTOLIV ALV 44.38 -0.01
AUTONATION INC AN 16.68 +0.20
ARVINMERITOR ARM 22.56 +0.15
AMER AXLE & MANU AXL 38.01 +0.30
BALLARD PWR SYS BLDP 10.51 -0.146
BORG WARNER BWA 90.20 -0.75
COLLINS AIKMAN CKC 5.31 +0.08
CUMMINS INC CMI 49.40 -0.70
DANA CORP DCN 21.39 +0.24
DAIMLERCHRYSLER DCX 44.93 +0.49
DELPHI CORP DPH 10.20 +0.12
DURA AUTO SYS DRRA 12.80 +0.38
EATON ETN 58.54 -1.25
FORD MOTOR CO F 13.75 +0.09
GENERAL MOTORS GM 48.12 +0.34
GENTEX CORP GNTX 40.78 -0.54
GOODYEAR TIRE GT 8.42 +0.43
HONDA MOTOR CO HMC 21.81 +0.36
JOHNSON CONTROLS JCI 58.32 +0.28
LEAR CORP LEA 61.63 -0.25
MAGNA INTNL MGA 79.40 +0.93
MOTOROLA INC MOT 18.45 +0.36
NISSAN MOTORS NSANY 22.09 +0.24
SONIC AUTOMOTIVE SAH 24.60 -0.02
SIRIUS SAT RADI SIRI 2.94 -0.06
TRW AUTOMOTIVE TRW 25.00 +0.40
TOWER AUTO TWR 6.07 +0.04
TOYOTA MOTOR TM 69.13 +0.93
UNIT AUTO GRP UAG 28.38 -0.72
VISTEON CORP VC 10.10 -0.04
XM SATELLITE XMSR 24.52 -0.11

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