Daily Edition: Nov. 14, 2005

November 14, 2005

Ghosn Defends Move to Tennessee

Surveys already indicate that Nissan North America will lose relatively few senior managers as it starts to shift its headquarters from Southern California to Tennessee, says Carlos Ghosn, Nissan's chairman and chief executive officer.

"Almost all of them will come," said Ghosn, as he defended the decision to move the company to a new $70 million facility near Nashville over the next two years.

"People are attached to the company and they're attached to what happened in the last five or six years. They're proud of it," he said. "The top management of North America, almost all of them, will make the move and those that don't make the move, it's because they have very important personal issues."

Ghosn also made it plain that as far as he was concerned, Nissan had not benefited all that much from having its headquarters near L.A.

"Let me remind you that before 1999, Nissan was struggling. It had struggled for ten years. Frankly one of the features of our brand and our company is, we say, "Bold and Forceful." So breaking out of existing molds is not something we stay away from," he told a small group of reporters during a roundtable discussion at Nashville's historic Hermitage Hotel after a press conference at which he announced the decision that Nissan's North American headquarters would leave L.A. by the end of 2008. The move will start next summer.

The Nissan chief executive officer also emphasized the move was thoughtfully analyzed and carefully studied.

"Do you think the headquarters makes the cars? The design center remains in San Diego and engineering remains in Detroit. Frankly product planning people are always traveling," he said. "We have design centers all across the world. It has nothing to do with headquarters. Most of the jobs (at headquarters) are support functions," he said.

Ghosn Defends Move to Tennessee (11/13/2005)
Not a cost-cutting decision, Nissan CEO says.

DaimlerChrysler Sells Last of Mitsu

DaimlerChrysler AG will continue to collaborate with Mitsubishi Motor Corp. despite the sale of its remaining Mitsubishi stock and the resignation of its representative on the Japanese automaker's board of directors.

The German-American automaker did not say exactly how it will account for the sale of its 12.4-percent stake in the Japanese automaker's capital stock to the investment firm of Goldman Sachs. However, it noted its income in 2005 will improve by approximately $590 million.

Originally, DaimlerChrysler paid approximately $2.1 billion for a 27-percent stake in MMC back in 2000, at a point when most automotive assets were overvalued. The exact impact on financial income will be disclosed after closing, which will take place by the end of November at the latest, according to the DaimlerChrysler statement.

Both companies said they intend to continue working together as business partners on a project-by-project basis.

"MMC will maintain the relationship with DaimlerChrysler as business partners where both parties continue working on individual alliance projects that are mutually beneficial,'' Mitsubishi said in a statement acknowledging the sales of DaimlerChrysler shares. In addition, DaimlerChrysler and MMC plan to renew and extend current projects which are mutually beneficial.

DaimlerChrysler Sells Last of Mitsu (11/13/2005)
Star-crossed partnership ends, but collaborations will not.

GM Dogged by Bankruptcy Talk

Speculation inside the financial world about bankruptcy, fueled by the disaster at Delphi Corp., continues to haunt General Motors Corp.

The speculation is fed, GM officials acknowledge, by a run of bad news this fall that has left the company on the defensive and searching for a way to repair the its dented image.

The latest bit of news, the disclosure the automotive giant plans to restate its earnings for 2001, was followed by report from Bank of America suggesting there is a 40 percent chance GM will file a bankruptcy petition within the next two years.

GM spokesman Jerry Dubrowski, however, reiterated that GM is not considering filing for bankruptcy. "We have no intention of filing for bankruptcy, and we're not going to comment on sensational speculation," he said. GM has very practical reasons for staying out of bankruptcy court, he added. "People will fly on bankrupt airline. They aren't going to spend $30,000 or $40,000 with a bankrupt auto company," he said. In addition, GM is sitting on cash reserves of more than $19 billion.

GM officials also said GM chairman Richard Wagoner is planning to set out a new plan for restructuring before the end of December. The new restructuring effort will include a plan for reducing the company's capacity, Wagoner has said. Any capacity adjustment means the company is preparing to close more assembly plants. By some estimates, GM currently has the capacity for a company with 33 percent of the market. Currently it only holds about 25 percent of the U.S. market and its share is projected to decline further over the next couple of years.

GM Dogged by Bankruptcy Talk (11/13/2005)
Some in Detroit chanting Chapter 11; company tries to persuade otherwise.

Visteon Woes Continue Despite Aid

Visteon Corp. apparently isn't out of the woods yet.

The big supplier said in a preliminary financial report that its financial position continued to deteriorate during the third quarter, despite a $700 million bailout by the Ford Motor Co., which also took back responsibility for 14 factories that housed struggling operations.

The bailout, which was completed Oct. 1, was supposed to signal a new beginning for the company, which was created from Ford's disparate components operations in a spin-off in 2000. Instead Visteon, which has lost money ever since the spin-off, reported another substantial financial loss, showing the company's operations continue to bleed cash.

For the third quarter, Visteon reported a net loss of $200 million, or $1.58 per share, which includes $11 million, or nine cents per share, of special charges to buy out employees outside the U.S. During the same quarter in 2004, Visteon lost $1.4 billion, or $11.48 per share, for the third quarter 2004, which included $1.3 billion, or $10.13 per share, in special charges.

In addition, Visteon Corp. shares fell nearly 10 percent last week after it delayed the filing of its official third-quarter financial statements. In a filing with the Securities and Exchange Commission, Visteon said its previously announced decision to restate earnings from 2002 through 2004 kept it from being able to submit the report. In addition, an outside review of the company's financial controls is not complete and the company indicated auditors now expect to find additional material weaknesses in Visteon's financial reports.

Visteon Woes Continue Despite Aid (11/13/2005)
Supplier needs another restructuring, chief says.

UAW Approves Healthcare Cuts

Members of the United Auto Workers have reluctantly agreed to concessions on healthcare that will save General Motors up to $3 billion annually.

The final tally showed that 61 percent of the union members voting approved the contract. And while the margin was substantial enough to pass the agreement, it proved small enough to serve as a warning that the union could have difficulty selling additional concessions to its members.

Thus, any new contract that includes major wage concessions by Delphi workers is probably facing certain defeat during any kind of ratification vote, which spells trouble for the planned Chapter 11 turnaround of the top U.S. supplier.

The UAW lined up with five other unions last week to oppose Delphi's demands for drastic cuts in the current contract, which specifies that production workers collect $27 per hour in wages. Delphi is offering to pay $9.50 and some commentators have suggested that the company and the union could compromise at about $17 per hour. But right now it's doubtful that even the compromise wage cuts would get approved by Delphi workers, given the vote at GM.

UAW Approves Healthcare Cuts (11/13/2005)
But union faces growing resistance from members to additional concessions.

Gas, Crude Prices Still Falling

Gasoline prices continue to fall as supplies caught up with demand and as the price of crude oil fell to its lowest level since late July in trading on the New York Mercantile Exchange. November, however, is also traditionally the month in which demand for crude bottoms out pending the onset of colder weather.

In Southern California, the average price of self-serve regular gasoline in the Los Angeles-Long Beach area was $2.669, or 8.9 cents lower than last week, 31 cents lower than last month but still 29 cents higher than a year ago. The same pattern prevailed in San Diego, where the price was $2.697 or 7.1 cents below last week's price, 32 cents below last month and 29 cents above last year, according to the Automobile Club of Southern California's Weekend Gas Watch.

The national average for regular self-serve gasoline is $2.352 a gallon - 10 cents less than last week's average.

"Motorists have experienced significant relief during the past month with pump prices falling about 30 cents per gallon," Auto Club spokeswoman Carol Thorp said. "As long as supplies remain strong, motorists can expect this lower price trend to continue for at least the next couple of weeks," said Thorp.

In Texas, the statewide average price for a gallon of regular self-serve was $2.273 a gallon - a weekly decrease of 11 cents. "Gasoline prices are falling steadily throughout the nation due to reduced demand and rising inventories," said Rose Rougeau, spokesperson for AAA Texas. "Unless there is a disruption in the availability of gasoline, prices are expected to continue to drop throughout the Thanksgiving holiday."

Crude oil futures for December delivery fell 27 cents to settle at $57.53 a barrel, the lowest futures closing price since July 22, on the New York Mercantile Exchange. -Joe Szczesny


Last Week's Poll

I visit TheCarConnection.com:




3-4 times a week


1-2 times a week


once or twice a month


This is my first visit to TCC.

FROM THE SOURCE headlines from the latest press releases


What do a California helicopter pilot, a New Mexico firefighter, a Wisconsin emergency medical technician, and a Texas U.S. Army Commander Sergeant Major share in common? They are the four Grand Prize Winners - one in each of four categories - to be recognized in a nationwide Jeep Heroes program which was established by the Jeep(R) brand to honor military, police, fire, and emergency medical services (EMS) personnel who deliver exemplary, unique, and heroic service to improve the quality of life in cities and towns across America. The Jeep brand's goal was to recognize the important service these individuals perform every day and to reward the Grand Prize Winners - the Best people to represent America's Best - with a rugged, dependable Jeep vehicle that will give them the same sense of security and reliability they give Americans.


Name Symbol Last Change
Autobytel, Inc. ABTL 4.54 +0.03 (+0.67%)
Autoliv Inc. ALV 43.30 +0.52 (+1.22%)
AutoNation Inc. AN 19.87 -0.11 (-0.55%)
ArvinMeritor Inc. ARM 16.68 +0.30 (+1.83%)
American Axle & Mfr. Holdings Inc. AXL 21.59 +0.40 (+1.89%)
Ballard Power Systems Inc. BLDP 5.01 -0.09 (-1.76%)
BorgWarner Inc. BWA 59.33 +0.88 (+1.51%)
Cummins Inc. CMI 87.07 -0.82 (-0.93%)
Dana Corporation DCN 7.03 +0.12 (+1.74%)
DaimlerChrysler AG (ADR) DCX 50.17 +0.57 (+1.15%)
Dura Automotive Systems DRRA 2.39 +0.03 (+1.27%)
Eaton Corporation ETN 62.37 +1.39 (+2.28%)
Ford Motor Company F 7.97 +0.15 (+1.92%)
General Motors Corporation GM 24.48 +0.97 (+4.13%)
Gentex Corporation GNTX 18.24 +0.16 (+0.88%)
Goodyear Tire & Rubber GT 15.59 -0.01 (-0.06%)
Honda Motor Co. Ltd. (ADR) HMC 27.10 +0.22 (+0.82%)
Johnson Controls Inc. JCI 69.13 +0.43 (+0.63%)
Lear Corporation LEA 28.33 +0.55 (+1.98%)
Magna International Inc. MGA 69.58 +0.57 (+0.83%)
Motorola Inc. MOT 23.56 -0.13 (-0.55%)
Nissan Motor Co. Ltd. (ADR) NSANY 19.80 -0.21 (-1.05%)
Sonic Automotive Inc. SAH 21.97 -0.19 (-0.86%)
Siemens AG SI 74.29 +0.46 (+0.62%)
Sirius Satellite Radio SIRI 7.00 +0.03 (+0.43%)
Toyota Motor Corporation (ADR) TM 91.02 +0.12 (+0.13%)
TRW Automotive Holdings TRW 25.12 +0.01 (+0.04%)
Tower Automotive Inc. TWRAQ.PK 0.1125 -0.0075 (-6.25%)
United Auto Group Inc. UAG 34.45 -0.13 (-0.38%)
Visteon Corporation VC 6.48 +0.49 (+8.18%)
XM Satellite Radio Hold. XMSR 28.49 +0.11 (+0.39%)

The Car Connection
See the winners »
The Car Connection
Commenting is closed for this article
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from The Car Connection. I understand that I can unsubscribe at any time. Privacy Policy.
Thank you! Please check your email for confirmation.