Detroit Hurt in "Total Quality" Study

June 19, 2006

Detroit Hurt in "Total Quality" Study

Detroit automakers fielded winners in eight of 20 different product segments in the latest Total Quality Study, General Motors matching that perennial benchmark of quality, Toyota. But the overall study gives Detroit little room to celebrate. Most of its victories - with the exception of the mainstream Ford Fusion - came in low-volume niche segments.

Meanwhile, the report, by the market research firm Strategic Vision, showed Japanese makers grabbing twelve segment winners, including virtually all of the light-truck categories, bread-and-butter segments for profit-challenged GM and Ford.

The challenge for Detroit, said Gorrell, is "regaining the trust of the American buyer, which has been lost over (the) years." The 2006 TQS had some findings that ran sharply in contrast to the widely-reported Initial Quality Study, published by J.D. Power & Associates. For one thing, Strategic Vision declared BMW the number-two overall brand, just behind Lexus, in its measure of both things gone wrong and things gone right. Power's IQS found BMW lagging in the bottom third of 37 brands studied.

Get the results of the Total Quality Study:

Detroit Hurt in "Total Quality" Study (6/18/2006)
New survey says Americans are losing ground where it matters, gaining in unexpected places.

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Ford Confirms Mexican Plan

As part of a sweeping effort to upgrade its Mexican operations, Ford Motor Company will refurbish its assembly plants in Cuautitlan and Hermosillo and an engine plant in Chihuahua. The company, however, withheld specific details of the overhaul, which will take place over the next few years.

"Ford has been doing business in Mexico since 1925, and we were the first automaker ever in the country. We are proud of our manufacturing capability in Mexico today, and we plan to upgrade our facilities for the future, just as we have been modernizing many of our facilities in the U.S. and Canada," Mark Fields, Ford's President of the Americas, said in statement that accompanied the announcement.

Ford Confirms Mexican Plan (6/18/2006)
Company will invest heavily in three plants to cut production costs.
Acura Eyes Sales Record

Acura is gunning for another sales record this year as it continues to expand with new products, new marketing, and a focus on cutting-edge technology.
John Mendel, vice president of operations for Honda in the U.S., noted that Acura has now set sales records for the past three years and expects sales to top 200,000 units again this year.

Honda also is preparing to launch the Acura brand outside the U.S. for the first time. It will introduce the brand in China this fall and then launch it in Japan in 2008 as part of an effort to establish Acura as a global brand, he said.

Acura Eyes Sales Record (6/18/2006)
A non-traditional ad campaign will help it get there, execs suggest.

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UAW Taps New Bargainers

General Motors and Delphi Corp. will find a new face in charge of the United Auto Workers' GM department in the wake of the union's quadrennial convention.

Richard Shoemaker, who had served as the union's top bargainer with GM for the past eleven years, retired during the convention and was replaced by UAW Cal Rapson, a former GM worker who earlier in his career with the union has served as its Flint regional director and as the chairman of the UAW GM bargaining committee.

Gettelfinger announced the assignments of Rapson and other union vice presidents after the conclusion of the union's convention in Las Vegas last week.

UAW Taps New Bargainers (6/18/2006)
GM appointment could be most critical.

Tennessee Gov. Says ToyotaInterested

With Nissan and Saturn under its belt, the state of Tennessee is pursuing Toyota for another assembly plant to add to its ranks. The state's governor, Phil Bredeson, says Tennessee is on a "relatively short list" of states competing for the next Toyota assembly plant, which Toyota has alluded to in previous announcements. The Wall Street Journal reported that the sites include one near Chattanooga in the southeast corner of the state, and another 80 miles northeast of Memphis. Toyota will open its San Antonio truck plant later this year and a Canadian plant next year. An engine plant is also in the plan; Michigan and Indiana are said to be lobbying Toyota for that project.

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Gas Buyers Have It Good, Oilco Exec Says

American gas prices, while at near-record highs of $3 a gallon, are lower than much of the rest of the world, one oil company executive says. Out defending the record profits of oil companies on NBC's Meet the Press, ConocoPhillips chairman James Mulva said that European customers pay $5 to $7 a gallon and that the U.S. needed to "reduce demand." The U.S. uses a quarter of the world's oil and produces 2 percent of it, Mulva added. Mulva warned that hurricane season worried the oil companies, particularly because so many workers on the GulfCoast are still living in temporary housing along the coast.

Ford Rolling Out Fumes-to-Fuel System

A new paint system that uses toxic fumes as fuel for electrical power will be rolled out to more Ford Motor Company plants, the company confirmed last week to the Detroit Free Press. The system tries to mitigate the millions of pounds of waste created by factory paint booths each year. Ford's system, engineered with DTE Energy Co., captures the paint fumes and converts them into fuel that can generate electricity. The pilot program for the system has been in use at Ford's Michigan truck plant for two years. The Ford plant in Oakville, Ont., will add the system next year.

WORLD REPORT

Former GM Exec Heads to SAIC

Automotive News reports that Philip Murtaugh, former chairman and CEO of GM China, will stay in the country as the new VP of international operations at SAIC. SAIC has a joint-venture agreement with GM in the country and it owns a slice of GM Daewoo, the automaker's Korean arm. Murtaugh had resigned from GM in May of last year. SAIC is in an expansion cycle that the company hopes will push it to 200,000-unit capacity for Chinese consumption and an additional 50,000 for export.

Chung Offers Apology to

Korean Court

Amid rising expectations that he might be freed on bail soon, Hyundai Motor Chairman Chung Mong-Koo apologized in a two-page letter to a Seoul court judge for setting up slush funds and then bribing government officials.

"I wholeheartedly apologize for raising and using slush funds," said Chung in the letter, admitting his full responsibility over the slush funds.

The 68-year-old Chung said he learned "a lesson" that will never be forgotten for the rest of his life.

On May 16, Chung was indicted for embezzling $129 million from Hyundai Motor affiliates and misusing company funds. Chung faces a third trial on June 26. Under South Korean criminal laws, Chung, chairman of both Hyundai and Kia Motors, could face a life sentence.

Chung's only son Chung Eui-son, who is 37 and the president of Kia Motors, wasn't indicted over the case.-Peter Chang

Ford Fusion Draws Brazilian Fans

The Fusion has gone on sale in Brazil and has been well-received in the Brazilian market. Working in its favor, the Fusion sedan is imported from Mexico, which has a trade accord with Brazil, making it duty tax exempt. The Fusion may in fact be the most successful American-designed model not produced in Brazil to be sold there in the last 15 years, when the country opened its borders to imports. Ford is counting on the success of the Fusion to further improve its financial results in Brazil, since exports are less profitable now due to the appreciation of the Brazilian currency, the real.- Fernando Calmon

FROM THE SOURCE headlines from the latest press releases

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Name Symbol Last Change
Autobytel, Inc. ABTL 3.10 -0.10 (-3.13%)
Autoliv Inc. ALV 53.73 -1.02 (-1.86%)
AutoNation Inc. AN 20.90 -0.17 (-0.81%)
ArvinMeritor Inc. ARM 15.46 -0.24 (-1.53%)
American Axle & Mfr. Holdings Inc. AXL 15.94 -0.55 (-3.34%)
Ballard Power Systems Inc. BLDP 6.27 -0.09 (-1.42%)
BorgWarner Inc. BWA 62.70 +0.05 (+0.08%)
Cummins Inc. CMI 106.33 -0.85 (-0.79%)
DaimlerChrysler AG (ADR) DCX 47.28 -0.48 (-1.01%)
Dura Automotive Systems DRRA 1.80 0.00 (0.00%)
Eaton Corporation ETN 72.44 -0.06 (-0.08%)
Ford Motor Company F 6.69 -0.09 (-1.33%)
General Motors Corporation GM 25.60 +0.01 (+0.04%)
Gentex Corporation GNTX 14.03 -0.03 (-0.21%)
Goodyear Tire & Rubber GT 11.67 -0.10 (-0.85%)
Honda Motor Co. Ltd. (ADR) HMC 30.82 -0.21 (-0.68%)
Johnson Controls Inc. JCI 80.46 -1.23 (-1.51%)
Lear Corporation LEA 20.89 -0.09 (-0.43%)
Magna International Inc. MGA 71.20 -0.77 (-1.07%)
Motorola Inc. MOT 20.08 -0.25 (-1.23%)
Nissan Motor Co. Ltd. (ADR) NSANY 21.56 -0.47 (-2.13%)
Sonic Automotive Inc. SAH 22.91 -0.17 (-0.74%)
Siemens AG SI 79.80 -0.84 (-1.04%)
Sirius Satellite Radio SIRI 4.07 -0.07 (-1.69%)
Toyota Motor Corporation (ADR) TM 100.67 -0.12 (-0.12%)
TRW Automotive Holdings TRW 25.72 -0.47 (-1.79%)
Tower Automotive Inc. TWRAQ.PK 0.13 +0.00 (+2.36%)
United Auto Group Inc. UAG 20.56 -0.14 (-0.68%)
Visteon Corporation VC 7.10 -0.08 (-1.11%)
XM Satellite Radio Hold. XMSR 13.60 -0.27 (-1.95%)

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