Daily Edition: Apr. 3, 2006

April 3, 2006

Hybrids Lose Lifetime Energy Battle, Study Says

Hybrid advocates trumpet the environmental benefits of the gas-electric vehicles. But a new study says that the overall energy picture for hybrid vehicles isn't as favorable as it seems. CNW Marketing Research, of Bandon, Ore., says that when the total cost of hybrids to the environment is calculated, including factors like recycling batteries into a "dollars per lifetime mile" figure, hybrids come up short against gas-powered vehicles. CNW's energy cost per mile driven figured that the most "energy expensive" vehicle from 2005 is the Maybach at $11.58 per mile, while the Scion xB checks in at the bottom of the scale, at $0.48 a mile. Some hybrids, like the Honda Accord Hybrid, actually get higher lifetime costs than their gas counterparts: the Hybrid Accord has an energy cost per mile of $3.29 while the gas version's is $2.18. CNW accounts for the differences by citing the investments in lightweight materials along with the cost of recycling batteries. The auto industry as a whole, CNW says, has an average dollar per lifetime mile of $2.28; GM's HUMMER H3's figure was $1.949 per mile, lower than the Honda Civic at $2.42 a mile. "If a consumer is concerned about fuel economy because of family budgets or depleting oil supplies, it is perfectly logical to consider buying high-fuel-economy vehicles," says Art Spinella, president of CNW Marketing Research, Inc. "But if the concern is the broader issues such as environmental impact of energy usage, some high-mileage vehicles actually cost society more than conventional or even larger models over their lifetime."

2006 Hybrid Buyers' Guide (9/12/2005)
What to look for in the new wave of fuel-sippers.


Delphi Asks Court to Toss Contracts

On Friday, Delphi Corp. set out its plan to recast itself as a smaller, nimbler company. In the process, the company also asked the courts to cancel its UAW contracts, setting off a firestorm in Detroit. "Delphi's misuse of the bankruptcy procedure to circumvent the collective bargaining process and slash jobs and wages and drastically reduce healthcare, retirement, and other hard-won benefits or eliminate them altogether is a travesty and a concern for every American," said UAW president Ron Gettelfinger in a blistering statement denouncing the plan. GM also questioned the move in a statement by chairman Rick Wagoner. But is it all posturing-or will Delphi strike and put GM closer to bankruptcy itself?

Read more about the delicate situation at Delphi


GM Says Turnaround Gaining

Meanwhile, as Delphi's drama unfolded, General Motors heard some good news from its own court proceedings. A federal judge in Detroit ruled that it could go ahead with changes to healthcare plans for employees and retirees that it had negotiated last year with the United Auto Workers. However, the announcement was followed by those that GM had lost market share, would sell its stake in Isuzu for more cash, and that it would cut its research and development budget. Is GM really turning around-or are things getting darker in Detroit?

Read more in today's story on GM's turnaround


Kia Rondo Coming to the U.S.

2007 Kia Rondo

2007 Kia Rondo

The Kia Carens crossover vehicle is set to be redesigned - and the new version will be sold in the U.S. as the Rondo. Kia confirmed the addition to its lineup last week accompanied by this sketch. The vehicle will make its world debut at the Madrid auto show on May 25. The Korean automaker promises the new Carens/Rondo will be longer, wider, and taller than the model it replaces, with seating for seven and flat-folding capability for flexibility.



SAE Congress Goes Global

The Society of Automotive Engineers (SAE) will kick off its 2006 Technical Congress today in an atmosphere of unprecedented global participation, though blemished by ongoing reorganizations at General Motors and Ford and bankruptcies of such leading suppliers as Delphi, Dana, Collins & Aikman, and Tower Automotive. The theme of the conference is "Driving Innovation Through Partnerships."

The host company for the first time at Detroit's Cobo Center is BMW AG, whose management board member, Dr. Burkhard Goeschel, is Congress general chairman. Next's year's Congress will be hosted by Toyota, and the president of Toyota Technical, USA, Yaksuhiko Ichihashi, will be general chairman.

Running through Thursday, April 6, the Congress will feature more than 200 technical sessions and make available over 1500 technical papers. A new facility, OEM/Supplier Park, will be unveiled, including special exhibits from the American automakers, BMW and Toyota, plus their Tier One suppliers.

U.S. Secretary of Energy Samuel W. Bodman will be the featured speaker Thursday night at the annual Congress banquet in the Detroit Marriott Renaissance Center Hotel. Always held in downtown Detroit, the Congress has been sought by other cities, reportedly Chicago and Cleveland, but SAE's leadership has voted to remain in the Motor City for the foreseeable future, according to SAE executive Bob Chalker.  Though its annual Congress remains a Detroit fixture, ironically the 101-year-old organization is headquartered in Warrendale, Penna., a suburb of Pittsburgh. -Mac Gordon

SAE Meeting Set for Detroit (4/2/2006)
Revived interest sparks new ideas at tech conference.



China Car Makers Get Ratings Cuts, Too
A key Chinese partner of General Motors Corp. and Volkswagen AG has had its credit rating reduced. Hong Kong-based Xinhua Far East China Ratings has downgraded the debt of Shanghai Automotive Co. Ltd., one of GM's principal partners in China, from an A- to a BBB+. The outlook also was changed from stable to negative.

The action was prompted mainly over concerns about the diminishing attractiveness of China's sedan market, which is experiencing lower-than-expected growth and as well as overcapacity. "Xinhua Far East expects that this situation will continue to squeeze Shanghai Auto's profit margin and cash-generating ability. In particular, its heavy reliance on sales to Shanghai Volkswagen and Shanghai General Motors exposes it to rising market risks and stretches its financial flexibility," the ratings report said.
Xinhua said there are also doubts about whether Shanghai GM will be able to sustain its level of sales when a new government policy requiring more fuel-efficient vehicles takes effect. Xinhua also confirmed the ratings for FAW Car Co. Ltd. but changed its outlook for the company from stable to negative. "Xinhua Far East expects the (FAW's) target market may face greater price cut pressures, with more and more new models expected to be launched and compete in this niche as a result of its relatively high profit margins," said the report. 

Xinhua also confirmed the rating of Chongqing Changan Automobile Co. Ltd., which is a major partner of Ford and Suzuki. The outlook for Chongqing, however, was changed from stable to negative. The outlook change reflected concerns about the company's pricing power in the mini-vehicle segment and doubts about the sustainability of growth of its self-branded products. "Price competition has intensified in the mini-vehicle category and, even though it enjoys rapid sales growth, this growth has been unable to offset the negative effect on earnings by widespread price cutting. Changan Auto's profit margin fell significantly toward the end of 2005, following the decisions to cut prices to maintain its position in the market," the Xinhua report noted. -Joe Szczesny


FROM THE SOURCE headlines from the latest press releases


Delphi Outlines Transformation Plan

X PRIZE Foundation Challenges Innovation at SAE Congress

Hybrids Consume More Energy in Lifetime Than Chevrolet's Tahoe SUV


Name Symbol Last Change
Autobytel, Inc. ABTL 4.82 +0.05 (+1.05%)
Autoliv Inc. ALV 56.58 -0.27 (-0.47%)
AutoNation Inc. AN 21.55 -0.20 (-0.92%)
ArvinMeritor Inc. ARM 14.91 -0.18 (-1.19%)
American Axle & Mfr. Holdings Inc. AXL 17.13 -0.18 (-1.04%)
Ballard Power Systems Inc. BLDP 6.77 -0.10 (-1.46%)
BorgWarner Inc. BWA 60.04 -0.35 (-0.58%)
Cummins Inc. CMI 105.10 +1.04 (+1.00%)
Dana Corporation DCN 0.66 0.00 (0.00%)
DaimlerChrysler AG (ADR) DCX 57.41 -0.24 (-0.42%)
Dura Automotive Systems DRRA 2.40 0.00 (0.00%)
Eaton Corporation ETN 72.97 -0.32 (-0.44%)
Ford Motor Company F 7.96 -0.20 (-2.45%)
General Motors Corporation GM 21.27 +0.21 (+1.00%)
Gentex Corporation GNTX 17.46 +0.09 (+0.52%)
Goodyear Tire & Rubber GT 14.48 +0.20 (+1.40%)
Honda Motor Co. Ltd. (ADR) HMC 30.96 -0.62 (-1.96%)
Johnson Controls Inc. JCI 75.93 -0.64 (-0.84%)
Lear Corporation LEA 17.73 -0.56 (-3.06%)
Magna International Inc. MGA 75.69 -1.37 (-1.78%)
Motorola Inc. MOT 22.91 -0.05 (-0.22%)
Nissan Motor Co. Ltd. (ADR) NSANY 23.78 -0.27 (-1.12%)
Sonic Automotive Inc. SAH 27.76 -0.16 (-0.57%)
Siemens AG SI 93.17 -0.60 (-0.64%)
Sirius Satellite Radio SIRI 5.07 +0.02 (+0.40%)
Toyota Motor Corporation (ADR) TM 108.90 -1.25 (-1.13%)
TRW Automotive Holdings TRW 23.30 +0.01 (+0.04%)
Tower Automotive Inc. TWRAQ.PK 0.085 0.00 (0.00%)
United Auto Group Inc. UAG 43.00 +0.20 (+0.47%)
Visteon Corporation VC 4.60 -0.14 (-2.95%)
XM Satellite Radio Hold. XMSR 22.27 -0.14 (-0.62%)
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