Daily Edition: Mar. 3, 2006

March 3, 2006

GM, Toyota Extend Partnership

The research consortium between GM and Toyota that was written off as dead in some reports last month is still very much alive. The world's two leading automakers have agreed to extend their cooperation on research and development projects in key areas for another two years, both companies said Thursday. The research, however, will no longer focus on fuel-cell technology. Instead, the two auto giants plan to focus on what was described as safety and congestion-related technologies.

Scott Fosgard, GM spokesman, said the change indicates that both companies are satisfied they can move from research into proprietary development of fuel cells that could be used in automobiles. One of the major advantages of fuel cells, which create electricity from a chemical reaction, is that they could help eliminate pollution from private automobiles, advocates of the technology suggest. GM is not backing away from its objective of producing by 2010 a commercially viable fuel cell that could be used in future vehicles, Fosgard added.  GM's fuel-cell projects continue to make substantial progress on critical issues such as durability, energy density, and cost, he added.

GM and Toyota have collaborated on basic research since 1999 and the new agreement now extends until 2008. Neither company has ever disclosed how much they spend on the joint research program. -Joe Szczesny

Feb. Sales: Chrysler, Japanese Strong by Joseph Szczesny (3/2/2006)
GM and Ford slip slightly as sales stay flat.

 


TH!NK Files for Bankruptcy

TH!NK Nordic AS, which was literally wheeled onto the world stage by former Ford boss Jac Nasser, has now filed for bankruptcy and under the tough bankruptcy laws that prevail in Western Europe faces almost certain dissolution. Ford brought almost 300 TH!NK-built electric cars to the U.S. but the experiment, which never made much sense, soon foundered. Ford ultimately sold the company in late 2002 and about 300 TH!NKs that Ford had leased to consumers were returned to Norway in 2004 for refurbishing. In all, TH!NK produced about 1000 vehicles during its relatively short life as an environmentally friendly car company. -Joe Szczesny

For Rethinks TH!NK Scrapping by Joseph Szczesny (9/20/2004)
Vehicles will return to Norway rather than be crushed.


Ford Expects More Losses

Ford expects its basic automotive business to lose money again in 2006 as it struggles to trim costs. Ford disclosed the anticipated loss in a 10K report it filed with the U.S. Securities Exchange Commission. Ford also said the losses in the automotive business would not extend beyond 2008. In another passage of the report, Ford cautioned that the bankruptcy of a major competitor could create problems for Ford. Bankruptcy would give the unnamed competitor an unfair cost advantage if its labor contracts were wiped out by the bankruptcy judge. The cryptic comments were dropped into the middle of the report and indicated Ford executives are concerned about the possible consequences of a bankruptcy filing by General Motors Corp.  However, Rick Wagoner, GM's chief executive, has said several times that bankruptcy is not an option for GM.
Ford also disclosed that it is considering a $1 billion charge in connection with "The Way Forward" restructuring plan, which calls for eliminating 30,000 jobs and closing 14 facilities by 2012 under the plan outlined in January. As part of the restructuring, Ford plans to close assembly three assembly plants in Atlanta, St. Louis, and Wixom, Mich., by the end of 2007. -Joe Szczesny

Special Report: Ford's Way Forward by TCC Team (1/30/2006)

 

Volkswagen's Mess Could Eat Pischetsrieder

Volkswagen AG chairman Bernd Pischetsrieder told the Financial Times that his job could be at risk if labor representatives on the company's supervisory board make good on opposing a contract renewal for the 58-year-old Bavarian. Meanwhile, supervisory board chairman Ferdinand Piech, who recruited Pischetsrieder as his replacement, has not exactly been backing up his protégé. 

The comments flying around are creating a climate all too reminiscent of that which sunk Pischetsrieder at BMW AG where he was chairman before going to VW, as well as that which preceded the ouster of Jacques Nasser at Ford in 2001. When newspapers like the FT and Wall Street Journal start writing about possible resignations or ousters, few CEOs can withstand the pressure for very long.

The root of the problem is the German labor unions who oppose Pischetsrieder's plan to cut 20,000 jobs from VW at the same time he is proposing to build a plant in Russia that will employ a cheaper labor force. Volkswagen AG, since after World War II, has been part owned by the State of Lower Saxony. That arrangement has long packed Volkswagen's operations and fortunes with excessive politics, as politician and workers have treated VW like a jobs bank of sorts. The automaker's net income for 2005 rose 62 percent to 1.12 billion euros, or 2.90 euros per share, in 2005, from 697 million euros, or 1.79 euros per share, in the previous year. Those results significantly exceeded previous forecasts and analysts expectations. But it still leaves Volkswagen with a small profit margin relative to its 95.2 billion euros in revenues.

When Piech turned over the chairman's job to Pischetsrieder in 2002, he also forced on the new chairman a collection of mistakes, and a culture of fear and paranoia fostered by Piech, and, in some parts of the company, corruption that was allowed to build during the former chairman's tumultuous and imperial era. Volkswagen's quality was in decline. Costs were out of control. Product styling approved by Piech, and hitting the market in the last two years, has been dull. It had invested heavily in costly product mistakes like the Phaeton luxury sedan and Audi W8 engine, while key product segments more fitting for Volkswagen's brand went unfilled. The U.S. still has no compact SUV priced under $30,000, for example, and no van. The current Golf was engineered in such a way to not support a small SUV. Meantime, the company's standing has been tarnished by accusations, currently under investigation by German prosecutors, that some high-ranking managers and a labor representative took several junkets at company expense featuring high-priced prostitutes.

Pischetsrieder has been in restructuring and reform mode since the day he took over, and the job cutting that analysts and experts say is necessary is overdue and should have been undertaken while Piech was chairman of the management board, the Vorstand.

The ten labor representatives on the supervisory board are using Pischetsrieder's contract renewal as a cudgel to get him to reduce the number of job cuts and perhaps cancel plans to build a Russian plant. Pischetsrieder has said he doesn't intend to change plans. But, he told the FT: "I also don't know of any company where the chief executive can stay against the will of the ten labor representatives."

Piech said this week that Pischetsrieder's contract renewal is an open question because of the current opposition. The FT quoted VW insiders as saying Piech had taken total control of the company by dominating both the management and supervisory boards. The chatter in Germany has been that Piech and Porsche CEO Wendelin Wiedeking (Porsche is now a major shareholder in Volkswagen) have been engineering a Pischetsrieder departure with his replacement likely to be either Audi chief Martin Winterkorn or management board member in charge of the VW brand and production Wolfgang Bernhard. The latter could be a reach because it was the Mercedes-Benz labor union that Bernhard antagonized when he was at Mercedes-Benz, a situation that led to his ouster.

Piech said that VW's two major shareholders, the automaker Porsche, and the state of Lower Saxony, were in favor of Pischetsrieder staying on. But, echoing Pischetsrieder's comments, he said he didn't think a chairman could survive with ten labor board members against him. However, there is a long history in German boardrooms of management brokering deals with labor to do the dirty work in exchange for givebacks to the union.  -Jim Burt

VW Turns To GTI For Juice by Jim Burt (2/27/2006)
Company pins GTI hopes on a curious new icon.




  

FROM THE SOURCE headlines from the latest press releases

PRNewswire

For decades, lyricists have included Mercedes-Benz in their songs as an icon of aspiration and accomplishment. Now, Mercedes-Benz and another icon of pop culture, AOL, have banded together to spotlight a new generation of artists through the premier online music destination AOL Music (http://music.aol.com).

In preparation for the launch of the 2007 Audi Q7, Audi of America has launched a pair of initiatives to spark consumer awareness of the new performance SUV and the Elton John AIDS Foundation (EJAF). Consumers can register to win a driving trip for four to the Rocky Mountains or the Utah Canyonlands. Concurrently, potential Audi customers will have an opportunity to have a donation made to the EJAF in their name, courtesy of Audi of America, Inc.




 

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Autobytel, Inc. ABTL 4.43 -0.28 (-5.94%)
Autoliv Inc. ALV 53.25 -0.70 (-1.30%)
AutoNation Inc. AN 20.91 -0.36 (-1.69%)
ArvinMeritor Inc. ARM 14.65 -0.89 (-5.73%)
American Axle & Mfr. Holdings Inc. AXL 15.57 -0.64 (-3.95%)
Ballard Power Systems Inc. BLDP 6.46 +0.09 (+1.41%)
BorgWarner Inc. BWA 55.36 -1.84 (-3.22%)
Cummins Inc. CMI 108.10 -1.22 (-1.12%)
Dana Corporation DCN 1.02 -0.81 (-43.78%)
DaimlerChrysler AG (ADR) DCX 55.66 -0.95 (-1.68%)
Dura Automotive Systems DRRA 2.14 -0.15 (-6.55%)
Eaton Corporation ETN 70.45 -0.55 (-0.77%)
Ford Motor Company F 7.66 -0.29 (-3.65%)
General Motors Corporation GM 19.41 -0.49 (-2.46%)
Gentex Corporation GNTX 16.49 -0.16 (-0.96%)
Goodyear Tire & Rubber GT 14.08 -0.44 (-3.03%)
Honda Motor Co. Ltd. (ADR) HMC 29.47 -0.27 (-0.91%)
Johnson Controls Inc. JCI 70.67 -0.61 (-0.86%)
Lear Corporation LEA 18.61 -2.16 (-10.40%)
Magna International Inc. MGA 73.87 -2.67 (-3.49%)
Motorola Inc. MOT 22.19 +0.10 (+0.45%)
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Sonic Automotive Inc. SAH 26.60 -0.04 (-0.15%)
Siemens AG SI 91.90 -1.10 (-1.18%)
Sirius Satellite Radio SIRI 5.08 +0.04 (+0.79%)
Toyota Motor Corporation (ADR) TM 106.83 -0.21 (-0.20%)
TRW Automotive Holdings TRW 25.10 -0.28 (-1.10%)
Tower Automotive Inc. TWRAQ.PK 0.06 -0.01 (-9.09%)
United Auto Group Inc. UAG 43.85 -0.16 (-0.36%)
Visteon Corporation VC 4.28 -0.46 (-9.70%)
XM Satellite Radio Hold. XMSR 21.90 -0.05 (-0.23%)
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