(13)
-- Chrysler could reinstate dealers, Some to return to cut arbitration (Detroit Free Press)
-- Chrysler ponders reinstatements, Some terminated dealers expect to get letters detailing offer to skip arbitration, be reinstated (The Detroit News)
-- Updated: At least 12 rejected Chrysler dealers may be offered reinstatement (Automotive News)
-- Chrysler May Offer to Restore Some Outlets, Dealer Group Says (Bloomberg)
-- GM about to repay more of its loans (Detroit Free Press)
-- GM to make 2nd loan payment to U.S. (Automotive News)
-- Toyota incentives pull, Honda into price war (The Detroit News)
-- Arbitrator: Axle maker violated pact, UAW calls it major victory for workers (Detroit Free Press)
-- Questions linger as sale of Volvo nears, One is cooperation of 3 carmakers (Detroit Free Press)
-- Tata vouches for Nano safety after vehicle fire (The Detroit News)
-- Analyst views mixed on Renault-Nissan-Daimler tie-up (Automotive News, Reuters)
-- UPDATE 4-Renault-Nissan, Daimler to take mutual stakes-media (Reuters)
-- US DoJ plays European contract card (Financial Times)
*Refer to © Notice Below
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Detroit Free Press ( 03/26/2010 )
by GREG GARDNER
Chrysler could reinstate dealers, Some to return to cut arbitration
Chrysler may reinstate some of the 789 dealerships it terminated last June because the cost and time consumed in arbitrating nearly 400 cases would be a distraction to the company’s fragile turnaround, according to dealers and others familiar with Chrysler’s plan.
The company would not comment on the plan, but several former Chrysler dealers told the Free Press that Chrysler contacted them and other dealers telling them they would receive a letter of intent.
One person familiar with lobbying efforts of the rejected dealers said he had heard that about 96 dealers could be reinstated, but he asked not to be identified because new information was circulating among Chrysler dealers throughout the day Thursday.
General Motors sent letters of intent this month to 661 of 1,160 dealerships that it had planned to wind down. Those letters detail a process through which dealers could keep their Chevrolet, Cadillac or Buick-GMC franchises if they meet certain criteria over the next 60 days.
Chrysler terminated about 25% of its dealerships during a 41-day bankruptcy last May and June. The company cited statistics showing that the average Chrysler dealer sold fewer than 200 vehicles in 2008. Chrysler’s U.S. market share fell to 8.9% in 2009 from 11% in 2008. As a smaller company, Chrysler said it could not sell enough cars and trucks to support 3,200 dealers profitably.
In December, Congress passed and President Barack Obama signed a bill giving rejected GM and Chrysler dealers a chance to regain their stores through binding arbitration. Almost 400 Chrysler dealers asked for arbitration, according to a company spokeswoman.
As recently as January, Chrysler CEO Sergio Marchionne considered challenging the constitutionality of the new law. He later said Chrysler would abide by the process.
Chrysler hired two prestigious law firms to contest the arbitrations, which must be completed by June 14. The process has moved slowly, however, and the legal costs have mounted for dealers and Chrysler.
“I’ve heard the process has been far more frustrating for everyone,” said Chuck Eddy, a Youngstown, Ohio, Chrysler dealer who did not lose his store. “I don’t know how many they’re going to restore. I just hope they do it for some.”
(c) Copyright 2007, Detroit Free Press. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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The Detroit News ( 03/26/2010 )
by Alisa Priddle
Chrysler ponders reinstatements, Some terminated dealers expect to get letters detailing offer to skip arbitration, be reinstated
Some terminated Chrysler Group LLC dealers expect to receive, as early as today, letters outlining terms for reinstatement.
The letters are expected to be similar to those General Motors Co. sent to more than half of the 1,160 GM dealers it marked for termination, but are appealing through a federally approved arbitration process.
To be reinstated, dealers must meet Chrysler’s criteria: location, facilities, inventory financing and working capital.
A Chrysler spokeswoman said she could not comment on dealer reinstatement.
An offer by Chrysler to bypass the arbitration process for some of its terminated dealers is significant because the automaker has shown little willingness previously to compromise.
“So far, Chrysler has opted not to do the right thing at every turn,” said Alan Spitzer, CEO of Spitzer Management Inc. in Elyria, Ohio, whose seven Chrysler dealerships are among the 789 that were terminated in June.
While he doesn’t expect to get a reinstatement letter, Spitzer is among almost 400 Chrysler dealers who notified the American Arbitration Association that he wants his case heard.
Under legislation passed in December, arbitration hearings are to be completed in June. Hearing dates for some have been set.
As part of its bankruptcy restructuring, GM planned to close more than 2,000 dealerships by late this year, as it sheds four brands and shrinks its overall dealer network.
GM gave its dealers substantially more notice than Chrysler did, and its executives have appeared more open and conciliatory in efforts to resolve outstanding issues with dealers it targeted. Some dealers have been told by Chrysler to expect to receive letters of intent today, said Tammy Darvish of Silver Spring, Md., who lost two of her eight Chrysler franchises. Like Spitzer, she is on the Committee to Restore Dealer Rights but does not expect to receive a letter.
The reason some dealers and attorneys were contacted in advance is that Chrysler needed mailing addresses to send the packages in cases where the old businesses are no longer in operation, Darvish said.
Darvish said some who are expected to receive letters did not apply for arbitration. She speculated they could be in rural areas where the automaker has found it needs additional dealers.
Chuck Eddy, a dealer in Austintown, Ohio, and leader of the Chrysler Dealer Council, said he has heard talk of reinstatement letters, but has not been told officially of the reinstatements without arbitration.
He said some who are offered reinstatement may question whether the struggle to reopen is worth it.
Spitzer and Darvish say they do not see the letters as a softening of Chrysler’s stance, so much as the automaker recognizing it has 400 arbitration cases to ready in a short time.
“In reality, Chrysler probably looked at the tremendous number of arbitrations it is facing and is trying to reduce it down to size because they have a daunting task in front of them,” Spitzer said.
Darvish said the number receiving letters could range from 50 to fewer than 100, figures that were echoed by Spitzer.
In a concession last week, Chrysler agreed to stop giving dealerships additional brands to sell in areas where former dealers have filed for arbitration.
The automaker has been trying for years to get dealers to sell all brands. In areas where there were more than one dealer — each with only one or two brands — the strategy has been to close operations and award their franchises to the remaining local dealer.
Otherwise, Chrysler has been “completely nonresponsive all along and been ornery and difficult to work with,” Spitzer said of dealings with the committee and dealers.
“Chrysler has been the proverbial junkyard dog over this,” said Jack Fitzgerald, who had five Chrysler franchises terminated in the Washington, D.C., area.
(c) Copyright 2007, The Detroit News. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/25/2010 )
by Neil Roland
Updated: At least 12 rejected Chrysler dealers may be offered reinstatement
WASHINGTON -- At least 12 closed Chrysler Group dealerships were told by company representatives that they are to receive letters of intent beginning their reinstatement process, according to a leader of a rejected-dealers group.
Chrysler reinstatements would represent an about-face in company policy.
The company signaled as recently as two weeks ago that it had no plans to reinstate any of the 400 or so dealerships that have given notice of their intent to seek arbitration.
It isn't clear yet how many closed Chrysler dealerships have been told they are getting letters of intent and it's not clear how the process will work.
Chrysler on Wednesday declined to confirm that it was beginning reinstatements.
“Nothing new in our network has happened as of today,” the company said in an e-mail. “When/if we have something to announce, we will announce it. We do not have anything to announce today.”
Tammy Darvish: "They're running out of time in arbitration.”
Tamara Darvish, a co-leader of the Committee to Restore Dealer Rights, which has led lobbying on behalf of rejected Chrysler and General Motors Co. dealerships, said Wednesday she was e-mailed separately by three former Chrysler dealers.
The three dealers -- two from Florida and one from Ohio -- said they had been told by Chrysler representatives that they were to receive letters of intent via Federal Express. She said today she's now heard from more than a dozen dealers who say they've been told to expect a letter.
Running out of time?
“If I were a betting woman, I'd say Chrysler is doing this because they're running out of time in arbitration,” Darvish said in a phone interview. “How are they going to get all their cases covered?”
She added that pressure from Rep. Chris Van Hollen, the sixth-ranking House member, may also have figured into Chrysler's plans.
Van Hollen, D-Md., called on Chrysler earlier this month to follow GM's lead and reinstate rejected dealerships.
Leonard Bellavia, a Mineola, N.Y., lawyer, said one of his clients also was notified today by a Chrysler representative that he was to receive a letter of intent later this week.
Bellavia declined to identify the state in which his client does business, except to say it isn't Florida or Ohio.
“It makes sense for Chrysler to settle now as opposed to later when all they will have done is incur greater expenses,” Bellavia said. “They're likely to pick dealers who have strong cases and whose markets are under-dealered.”
Earlier this month, GM said it plans to reinstate 661 of the 1,160 rejected dealerships that have filed for arbitration.
GM reinstatements continue
GM has mailed nearly all of its letters of intent, which list requirements that dealers are expected to meet -- including facility size, location, capital and floorplan financing.
GM is giving dealers 10 days to sign and mail them, and then 60 days to provide documentation.
Under a new federal law, arbitrations must be completed by June 14, though they can be extended a month at an arbitrator's discretion.
Fewer than 400 of the 789 Chrysler dealerships that were closed last spring as part of the company's bankruptcy have filed for arbitration, Chrysler said recently.
Chrysler signaled earlier this month that reinstatements didn't figure into its plans.
“Dealer appointments will be a function of the arbitrations,” Chrysler said in a March 8 e-mail. “The company looks forward to the expeditious completion of the arbitration process.”
Read more: http://www.autonews.com/article/20100325/RETAIL07/100329941/1400#ixzz0jHC318C0
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Bloomberg ( 03/25/2010 )
by Mike Ramsey
Chrysler May Offer to Restore Some Outlets, Dealer Group Says
Chrysler Group LLC, the U.S. automaker run by Fiat SpA, may offer reinstatement to some of its terminated dealers, said Tammy Darvish, the co-chairwoman of a dealership organization lobbying for the restoration.
Fifteen to 20 dealers contacted Darvish in the past day telling her that Chrysler officials had called to say offers would be sent to reinstate franchises, said Darvish, a leader of the Committee to Restore Dealer Rights.
The offer of reinstatement would follow a General Motors Co. decision this month to bring back 661 dealers that it had planned to cut. Both companies are facing U.S.-ordered binding arbitration cases with dealers that ask for an appeal.
Chrysler terminated 789 dealers last year in its bankruptcy. President Barack Obama signed a law in December allowing terminated dealers to be granted binding arbitration to seek to have their dealership restored. Chrysler said in January 409 dealers had applied for arbitration.
A Chrysler spokesman declined to comment.
The Detroit Free Press reported earlier that as many as 96 dealers may be reinstated, citing unnamed sources with knowledge of the situation.
Darvish, a principal of Darcars Automotive Group in Silver Spring, Maryland, had two Chrysler dealerships terminated. She wasn’t contacted by the company, she said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afWGjfe_TUg0
©2007 Bloomberg L.P.
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Detroit Free Press ( 03/26/2010 )
by Tim Higgins
GM about to repay more of its loans
General Motors plans to make another round of $1.19billion loan payments to the U.S. and Canadian governments on Wednesday, the company said Thursday.
Last December, the Detroit automaker made similar payments as part of its efforts to pay off the $6.7-billion U.S. and $1.4-billion Canadian government loans.
“Given the progress the company is making, GM has every confidence that the remainder of the loans will be paid in full by June 2010, five years ahead of schedule,” GM Chairman and CEO Ed Whitacre said in a statement.
Paying off the loans is only the first step for taxpayers to get their money back from helping GM stay afloat last year. The next step will be launching GM as a public company again.
GM is expected to release its fourth-quarter 2009 financial results soon.
On Thursday, industry analyst Eric Selle of J.P. Morgan Chase estimated in a note to investors that GM could post $2 billion in earnings before interest, taxes, depreciation and amortization for the fourth quarter.
He also said GM’s enterprise value in 2011 could be $67 billion.
GM Chief Financial Officer Chris Liddell said this month it’s possible that GM could launch a public offering later this year if several factors were in place, such as an improved economy. He also said there’s a reasonable chance GM could be profitable this year.
(c) Copyright 2007, Detroit Free Press. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/26/2010 )
by Chrissie Thompson
GM to make 2nd loan payment to U.S.
DETROIT -- General Motors Co. said it will make its second loan payment to the U.S. and Canadian governments on March 31 and reaffirmed a plan to pay back its loans by mid-year.
The automaker will shell out $1 billion to the U.S. Treasury on the way to paying back $6.7 billion. At the same time, GM will put $192 million toward paying off its Canadian loan, worth $1.4 billion U.S. The first payments, also at those amounts, were made in December.
“GM has every confidence that the remainder of the loans will be paid in full by June 2010, five years ahead of schedule,” CEO Ed Whitacre said today in a statement.
GM was not required to make any payments on the loans before they matured in July 2015.
The repayment will come from leftover funds set aside by the Obama administration to finance GM's fast-track sale out of bankruptcy in July.
After the loan repayment, the U.S. government will still have a 61 percent equity stake in GM. The government is hoping to sell GM stock to recoup the $50 billion it gave GM to fund its restructuring.
Executives have said GM's initial public offering could come as early as this year.
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100325/OEM/100329924/1179#ixzz0jHLnYkUR
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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The Detroit News ( 03/26/2010 )
by CHRISTINE TIERNEY
Toyota incentives pull, Honda into price war
Honda Motor Co. has been one of the most disciplined automakers when it comes to sales practices, steering clear of splashy deals and incentives that can erode brands and profits.
But Honda is being pulled into a price war now by its archrival, Toyota Motor Corp.
The two Japanese automakers are fiercely competitive, tending to fight over the same customers. After Toyota raised incentives recently to counter bad publicity over big recalls, analysts said Honda was bound to respond.
Honda’s discounts are still below the industry average of around $2,700 per vehicle, but in the first two months of 2010, they rose nearly 30 percent to $1,641, according to Autodata Corp.
Forecasting firm True Car predicts Honda’s incentives will reach $1,929 this month, up 8.3 percent from last March. It estimates the industry average will be around $2,800, and Toyota’s incentives at $2,318 per vehicle.
In comparison with its rivals, Honda seems restrained. But its incentives are high for the company, which normally shuns sales tactics that erode the residual value of vehicles and brands.
It’s now offering deals, such as no-money-down lease plans with no deposit required on models such as its flagship Accord.
“This Honda program snuck in very quietly,” said James Bell, analyst at used car pricing specialist Kelley Blue Book. “Their huge new lease program is proof that Toyota’s recent flood of incentives might just be impacting Honda as well.”
Honda said it had increased its incentives, but not dramatically.
“It’s probably a little bit higher than it has been in the past few years,” said company spokesman Chuck Schifsky. But he said last year’s discounts were low. Demand for small cars was high, and Honda was short of supplies. Art Spinella, president of CNW Research of Bandon, Ore., says he thinks the rise in Toyota and Honda incentives is less dramatic than it appears.
The two automakers have always provided cash quietly to dealers to help them close deals. They’re taking some of that cash and making it more visible to draw customers into showrooms. “They’ve never needed to drive floor traffic before,” Spinella said. But “Honda’s incentives aren’t up very much at all,” he said.
True Car analyst Jesse Toprak agrees. “Their spending is up, but not as much as it appears,” he said. “It’s very well calculated.”
(c) Copyright 2007, The Detroit News. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Detroit Free Press ( 03/26/2010 )
by JEWEL GOPWANI
Arbitrator: Axle maker violated pact, UAW calls it major victory for workers
An arbitrator has ruled that American Axle & Manufacturing violated its contract with the UAW last fall when the company moved most of its axle production out of its Detroit plant to Mexico, according to the UAW.
The Detroit-based auto supplier had not commented by early Thursday evening.
Citing the violation of jobsecurity clauses, the UAW said American Axle will have to “make whole” workers whose work was outsourced. That could mean American Axle would have to pay back wages and benefits or recall workers from layoff.
“This is a major victory for these workers, and we’re very gratified that the umpire upheld our strong outsourcing language reached in the 2008 agreements,” UAW President Ron Gettelfinger said in a statement Thursday. “Our American Axle members went on strike for three months in part to win this measure of job security.”
The 2008 labor contract was reached after a bitter three-month strike among more than 3,600 UAW-represented workers at five American Axle plants.
Workers protested wage cuts of about $10 an hour and benefit reductions but ultimately ratified a deal that made those cuts, fewer vacation days, shorter breaks and eliminated about 2,000 hourly jobs at the auto supplier.
Less than a year later, the supplier sought additional concessions from its workforce at its sprawling plant that straddles Detroit and Hamtramck to meet an even-lower cost structure that workers at the company’s plant in Three Rivers, near Kalamazoo, had adopted.
When no concessions were reached by the summer, the company decided to move a large portion of its axle work from Detroit to its plant in Guanajuato, Mexico.
The UAW said the next move is for the UAW and American Axle to determine how many workers were affected by the outsourcing of work and how much those workers lost in wages and benefits, according to the union.
In other American Axle news, the company said Thursday that it has opened a new plant in Lancaster, Pa., near Philadelphia to make axles for commercial trucks.
(c) Copyright 2007, Detroit Free Press. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Detroit Free Press ( 03/26/2010 )
by BRENT SNAVELY
Questions linger as sale of Volvo nears, One is cooperation of 3 carmakers
With just days left before Ford-owned Volvo’s likely sale to Chinese automaker Geely, big questions remain about the deal: How closely will the three companies work together in the future and for how long?
Ford, which acquired Volvo in 1999 for $6.4 billion, is expected to reach an agreement to sell Volvo as early as this weekend, according to a person familiar with the process, and arrangements are being made for an announcement in Sweden.
The Free Press has previously reported that the sale could be for about $1.8 billion.
Ford spokesman Mark Truby would only say that Ford still expects to meet its previsider ously announced Wednesday deadline.
But even after the deal is signed, it is likely that Ford, Volvo and Geely will continue to work together for several years, said Michael Robinet, vice president of global vehicle forecasting for CSM. Ford and Volvo cars share common parts, assembly processes and technology, Robinet said. “Selling an integrated car division … is like selling a room in your house. It is very connected and not easily separated,” he said.
UBS Investment analyst Colin Langan noted that Ford sold Jaguar and Land Rover in 2008, but said unwinding Volvo will be more challenging. “Chinese automakers do not have some of the advanced technologies the automakers in developed markets have,” he said.
Ford first said it would conselling Volvo in December 2008 and named Zhejiang Geely Holding Group as its preferred bidder last fall.
In November, Ford reached a deal with Geely on the terms of Volvo’s intellectual property but said final details still needed to be worked out.
Ford has lost millions on Volvo since acquiring the Swedish automaker and reported a pretax loss of $653 million on the brand in 2009.
Tim Dunne, director of global automotive coordination for J.D. Power and Associates, said selling Volvo will allow Ford to devote more resources to its core Ford, Lincoln and Mercury brands.
“It is less money than what they paid for it, but it’s good money, and … Volvo will no longer be diverting their attention.”
(c) Copyright 2007, Detroit Free Press. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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The Detroit News ( 03/26/2010 )
Tata vouches for Nano safety after vehicle fire
Mumbai, India — When it was launched less than a year ago, the $2,500 Tata Nano was promoted as a safe, ultra-cheap car for poor Indians, an alternative to the motorbikes that zoom precariously around the country. New questions about the safety of the pint-sized auto are being raised after one burst into flames Sunday as it was being driven home from the showroom.
Tata Motors spokesman Debasis Ray said the company is investigating the cause of the fire. Ray said the automaker believed it was “a one-off, stray incident.”
(c) Copyright 2007, The Detroit News. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News, Reuters ( 03/26/2010 )
Analyst views mixed on Renault-Nissan-Daimler tie-up
TOKYO -- Analysts say a tie-up of partners Renault SA and Nissan Motor Co. with Daimler could be positive but warned against unchecked optimism.
"It could set the stage for the expanded supply of electric vehicles or batteries (by Nissan) to Daimler," JPMorgan Securities analyst Kohei Takahashi wrote in a note.
"However, given the failure of numerous past alliances and mergers to meet their stated targets, we caution against excessive expectations for sharp cost reductions through parts sharing until more details become available," he added.
Said Hiroaki Osakabe, a fund manager at Chibagin Asset Management: "I personally think there aren't a lot of merits for Nissan. Just about the only merit I can see is that it might help make parts procurement less expensive, and maybe open some routes into Europe. But overall the gains for Nissan look rather small."
The three automakers are reportedly in the final stages of talks to obtain symbolic stakes in each other as they look to share technology amid intensifying competition.
Symbolic stake
The Nikkei business daily reported on Friday that Nissan, which is Japan's third-biggest automaker and is held 44.3 percent by Renault, was set to take a stake of 1 percent to 2 percent in Daimler. Negotiators are considering stock swaps or other arrangements that limit the need to raise fresh funds, it said.
The report came a day after the Financial Times said Renault and Daimler were close to agreeing on a wide-ranging strategic partnership that would include a swap of small stakes between them. The paper quoted one unidentified person as saying the "symbolic" stake could be about 3 percent.
Le Figaro newspaper reported on Friday that Renault's board will meet on April 6 to discuss the partnership with Daimler, adding that the deal would be announced to shareholders at the carmakers' annual meetings later in April.
Renault-Nissan CEO Carlos Ghosn has repeatedly said he is open to a third partner for the 11-year-old Franco-Japanese alliance, and that an equity relationship was meaningful to ensure a level of commitment and trust.
Carmakers are on the hunt to cut costs by building scale and spreading the load of heavy investments in new technologies such as hybrid and electric vehicles over large numbers of cars.
All three companies declined to confirm the reports.
Renault and Daimler, the maker of Mercedes-Benz and Smart brand cars, have made no secret of being in talks about cooperating to cut costs, pool technology resources and build scale as the crisis-hit industry tries to become more efficient. Both companies have said they were talking with a wide range of makers.
Marriage vs. engagement
Analysts also said a deal could fall through, with many citing widespread views that Renault-Nissan's Ghosn was pushing for the equity deal, which his Daimler counterpart, CEO Dieter Zetsche, does not favor.
"He's (Ghosn) not into living together, he's into getting married. And maybe Daimler is interested in only getting engaged," said CLSA Asia-Pacific Markets analyst Christopher Richter. He added that operationally there could be advantages on both sides, with Nissan-Renault possibly supply electric vehicle technology and Daimler providing big diesel engines.
"One nice thing with this alliance is that nobody would be stepping on anybody's toes," he said, adding that Mercedes buyers were unlikely to have Renault or Nissan cars on their shopping list and vice-versa.
The auto industry is replete with capital alliances that have floundered or are yielding few or no synergies. Daimler itself has had numerous failures, with Chrysler, Mitsubishi Motors Corp. and Hyundai Motor Co.
Mitsubishi ended months of speculation earlier in March by announcing with France's PSA/Peugeot-Citroen that the two had decided to forego an equity tie-up for now.
Small equity holdings within the industry are also not uncommon: Suzuki Motor Corp. and Subaru-maker Fuji Heavy Industries Ltd. hold a few percent in each other, while Toyota Motor Corp. owns 4 percent of Yamaha Motor Co.
Read more: http://www.autonews.com/article/20100326/ANE/303269998#ixzz0jHKJOpB7
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Reuters ( 03/26/2010 )
by Chang-Ran Kim
UPDATE 4-Renault-Nissan, Daimler to take mutual stakes-media
TOKYO - Partners Renault SA and Nissan Motor Co are reportedly in the final stages of talks with Daimler AG to obtain symbolic stakes in each other as they look to share technology amid intensifying competition.
The Nikkei business daily reported on Friday that Nissan, which is Japan's third-biggest automaker and is held 44.3 percent by Renault, was set to take a stake of 1 to 2 percent in Daimler. Negotiators are considering stock swaps or other arrangements that limit the need to raise fresh funds, it said.
All three declined to confirm the reports, which came a day after the FT said Renault and Daimler were close to agreeing a strategic partnership that would include a swap of small stakes.
The paper quoted one unidentified person as saying the "symbolic" stake could be around 3 percent.
Renault-Nissan chief Carlos Ghosn has said he is open to a third partner for the 11-year-old alliance.
Renault's board will meet on April 6 to discuss the partnership with Daimler, Le Figaro newspaper reported on Friday, adding that the deal would be announced to shareholders at the carmakers' annual meetings later in April.
Carmakers are on the hunt to cut costs by building scale and spreading the load of heavy investments in new technologies such as hybrid and electric vehicles over large numbers of cars.
Renault and Daimler, maker of Mercedes cars, have made no secret of being in talks about cooperating to cut costs, pool technology resources and build scale as the crisis-hit industry tries to become more efficient. Both companies have said they were talking with a wide range of makers.
Analysts said a partnership among the three to seek operational synergies could be positive.
"It could set the stage for the expanded supply of electric vehicles or batteries (by Nissan) to Daimler," JPMorgan Securities analyst Kohei Takahashi wrote in a note.
"However, given the failure of numerous past alliances and mergers to meet their stated targets, we caution against excessive expectations for sharp cost reductions through parts sharing until more details become available," he added.
SMALL GAINS
Nissan shares rose 0.9 percent to 775 yen by early afternoon, roughly in ine with Tokyo's transport sector index .ITEQP.T.
"I personally think there aren't a lot of merits for Nissan," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"Just about the only merit I can see is that it might help make parts procurement less expensive and maybe open some routes into Europe. But overall the gains for Nissan look rather small, and I think the stock price is reflecting this view."
Analysts also said a deal could fall through, with many citing widespread views that Renault-Nissan's Ghosn was pushing for the equity deal.
"He's (Ghosn) not into living together, he's into getting married. And maybe Daimler is interested in only getting engaged," said CLSA Asia-Pacific Markets analyst Christopher Richter. He added that operationally there could be advantages on both sides, with Nissan-Renault possibly supplying electric vehicle technology and Daimler providing big diesel engines.
"One nice thing with this alliance is that nobody would be stepping on anybody's toes," Richter said.
The auto industry is replete with capital alliances that have floundered or are yielding few or no synergies. Daimler itself has had numerous failures, with Chrysler, Mitsubishi Motors and Hyundai Motor .
Mitsubishi ended months of speculation earlier in March by announcing with France's PSA Peugeot Citroen that the two had decided to forego an equity tie-up for now.
Small equity holdings within the industry are also not uncommon: Suzuki Motor and Subaru-maker Fuji Heavy Industries hold a few percent in each other, while Toyota Motor owns 4 percent of Yamaha Motor.
Meanwhile, carmakers have also aggressively sought operational tie-ups without an equity relationship.
Sources have said Japan's Mazda Motor is discussing the possibility of asking Toyota for help in hybrids, though Ford Motor is Mazda's top shareholder with 11 percent.
The Nikkei reported on Friday that Mazda planned to introduce a mid-size hybrid vehicle by 2013 based on core components supplied by Toyota.
http://www.reuters.com/article/idUSSGE62O0IQ20100326
(c) 2007 Reuters Limited
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Financial Times ( 03/26/2010 )
by Stephanie Kirchgaessner
US DoJ plays European contract card
Daimler, the German carmaker, this week agreed to pay $185m in civil and criminal fines under the terms of a deferred prosecution agreement with US prosecutors following allegations that it engaged for years in an elaborate bribery scheme in 22 countries.
The US Department of Justice considers fighting bribery one of its top law enforcement priorities, and the Daimler case was the latest in a string of corporate settlements that underlined how aggressively prosecutors are pursuing such cases.
But a close look at hundreds of pages of court records show that the maker of Mercedes-Benz was never formally charged with paying bribes, though two of its subsidiaries were.
Instead, it was charged with conspiracy to commit bribery – an allegation that is usually reserved for defendants who plan, but do not execute, crimes – and a violation of “books and records provisions” of a US anti-bribery law.
German scandals trigger a change in attitude towards corruption
Daimler and Ferrostaal this week became the latest in a series of German companies to be embroiled in bribery scandals, Daniel Schäfer reports from Frankfurt.
The cases have again put the spotlight on a country where bribes have long been regarded as a normal part of the business culture.
Daimler is set to pay $185m to settle allegations by the US justice department. Munich prosecutors this week raided the Essen-based office of Ferrostaal, an industrial services group majority-owned by an Abu Dhabi-based investor.
Prosecutors are investigating several Ferrostaal managers and have detained one of them, said Barbara Stockinger, spokeswoman for the prosecutor.
A Ferrostaal spokesman said the group would co-operate closely with prosecutors, adding that the investigations were not directed against the company itself.
Ferrostaal is a former subsidiary of MAN, the German truck and engineering group that is also entangled in a large-scale bribery scandal that led to the departure of several management board members and ongoing investigations against about 100 suspects.
An even bigger bribery scandal at fellow Munich-based engineering company Siemens led to a €1bn ($1.3bn) fine paid to US and German authorities in 2008.
Foreign bribes were even tax-deductible as recently as a decade ago.
But the impression that the payment of bribes is normal business practice for German companies is probably out of date.
The Siemens scandal shocked German boardrooms and triggered a fundamental change in the attitude towards corruption.
“Siemens has woken up corporate Germany. Ever since the scandal erupted, compliance has gained enormous attention in the boardrooms of both large co-operations and Mittelstand companies,” said Wendelin Acker, a partner at Lovells.
Having entered into a “deferred prosecution agreement”, Daimler did not plead guilty to any charges, including the lesser conspiracy charge.
The technicalities might seem inconsequential.
But the small print of the European Union’s public procurement rules forbids any company from receiving an EU contract if it has been found guilty or convicted of bribery.
Thus the DoJ’s decision not to formally charge Daimler with bribery, in effect, radically reduced any risk that the company would be shut out from European government contracts were it to have been convicted of such a charge.
The case is not an anomaly. Last month, BAE Systems, the British defence group, paid $400m in fines to the DoJ after prosecutors alleged in court documents that it doled out millions of dollars in improper payments to foreign government officials.
But BAE, which did not dispute the description of its conduct, was charged and pleaded guilty to allegations that it made false statements about its anti-bribery compliance programme. The DoJ’s case against Siemens in 2008, in which the German conglomerate paid $800m in US penalties, similarly centred on “books and records” violations.
There are several reasons why the justice department might not bring criminal bribery charges against a company even if it has clear evidence of corrupt acts. In some cases, it might lack evidence that a company had criminal intent.
Under US law, however, the DoJ must also consider the “collateral consequences” of such charges. Indeed, legal experts say the recent string of big US bribery cases emphasises the significant impact EU “debarment” policies – which regulate when a corporation must be barred from competing for government contracts – have had on the DoJ’s ability to negotiate settlements with companies.
“We’re seeing severely contorted settlement agreements to avoid pleading guilty to conduct that would result in automatic debarment,” says Alexandra Wrage, the president of Trace, a non-profit organisation that specialises in corporate anti-bribery compliance programmes.
Companies with deep pockets can afford steep penalties. But the severe consequences they face in Europe and sometimes the US if they are found guilty of actual bribery might be insurmountable, giving the DoJ a strong hand in negotiations.
US corporate attorneys who work on bribery cases say the DoJ never explicitly threatens that companies ought to settle lesser allegations in order to avoid bribery charges.
But they acknowledge that the risks associated with a bribery conviction can hang over negotiations with prosecutors like a dark cloud.
The DoJ does not always shy away from directly bringing bribery cases. Subsidiaries of Siemens and others have been faced with substantive bribery charges.
“While I can’t comment on any specific case or charging decision, I can say that we follow the facts, available evidence and the law where it leads,” a spokeswoman for the justice department said.
(C) The Financial Times Limited 2007.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
Tuesday, March 30, 2010
Chrysler Early Clips Headlines (8
)
-- Chrysler Expedites 300 Sedan, Restyled Model Is Pushed Up to Improve Chances of Reaching 2010 Goal (The Wall Street Journal)
-- In new ads, Ram truck stands alone (Automotive News)
-- At Chrysler plant, the most flexible rules (Automotive News)
-- Chrysler shifts tone on dealers, Automaker offers reinstatement to 50 stores, signals settlement talks with more (Automotive News)
-- Fiat could launch hybrids, Marchionne says (Automotive News)
-- Ford Agrees to Sell Volvo to a Fast-Rising Chinese Company (The New York Times)
-- GM, dealers have fences yet to mend, Lawsuit continues; emotions still raw (Detroit Free Press)
-- How 'black boxes' help in car crash reconstructions (USA TODAY)
*Refer to © Notice Below
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The Wall Street Journal ( 03/29/2010 )
by Jeff Bennett
Chrysler Expedites 300 Sedan, Restyled Model Is Pushed Up to Improve Chances of Reaching 2010 Goal
Chrysler Group LLC is rushing to accelerate the U.S. launch of its redesigned flagship sedan, a once hot-selling model whose sales have slipped, as part of a push to keep on track its ambitious turnaround plan, said three people familiar with the matter.
The company is off to a sluggish start this quarter, and now needs a sales surge later this year to hit its target of selling 1.1 million vehicles in the U.S. When the car maker set the 2010 goal in November it predicted it would break even this year.
Chrysler, which is under the management control of Fiat SpA, will get help in May when a new version of its Jeep Grand Cherokee goes on sale at U.S. dealerships. The restyled version of one of the company's top-selling models features a more fuelefficient engine and a higher-quality interior.
In hopes of spurring sales later in the year, Chrysler also is making plans to move up the U.S. launch of the restyled Chrysler 300 sedan by three to four months, to November from the first quarter of 2011, these people said.
The new 300 model, as with the Jeep, features a sleeker exterior and a better grade of interior materials such as softer plastics, an area where Chrysler has come in for criticism.
The current 300, with a bold front grille and styling that some likened to a gangster car, was a hit when Chrysler started selling it in 2005. But sales have fallen in recent years. The car competes against Toyota Motor Corp.'s Avalon, General Motors Co.'s Buick Lucerne, Ford Motor Co.'s Taurus and other large sedans.
Chrysler also is working to raise production of the new six-cylinder engine that will debut in the reworked Grand Cherokee, these people said. Increased supply would enable Chrysler to offer the so-called Pentastar engine in other models this year, including the 300, they said. The engine could help win customers looking for a combination of power and fuel economy.
Chrysler is making the moves as it nears the one-year anniversary of its Chapter 11 bankruptcy filing on April 30. As part of a strategy worked out by the U.S. government, Chrysler formed an alliance with Italy's Fiat. In November, Sergio Marchionne, who serves as chief executive of both auto makers, outlined a turnaround plan that envisions Chrysler breaking even this year and generating profits in 2011.
The plan is based on a forecast that Chrysler's U.S. sales will rise 18% this year, from 931,402 cars and light trucks in 2009 to 1.1 million in 2010. But in the year's first two months, sales fell 3.2%, and analysts expect another decline when March sales are reported Thursday.
Chrysler sales this year through February fell to 141,592 vehicles, the lowest for the company in 30 years, according to Ward's Automotive Group.
To hit its target, Chrysler must now sell at least 95,000 vehicles per month for the rest of the year. It has reached that level only once in the last 14 months.
In addition, half or more of the vehicles Chrysler sold in January and February were purchased by rental-car companies and other fleet customers, said people familiar with the matter. That suggests Chrysler is having some trouble winning over individuals who buy cars through dealerships.
Mr. Marchionne's plan envisions such retail sales making up more than 70% of the total, and lower-margin fleet sales less than 30%.
Tom Stallkamp, a former senior Chrysler executive who is now a partner at Ripplewood Holdings LLC, a private-equity firm, said it will be hard for Chrysler to make up for sales it is losing out on now. "They are giving away their customers and you can't win them back later in the year, especially when you have more competition out there," he said, noting that Toyota, Honda Motor Co. and Hyundai Motor Co. are offering attractive incentives to gain market share.
A Chrysler spokesman, Gualberto Ranieri, said the company is sticking with its U.S. sales target. "The goal is for 1.1 million and Mr. Marchionne has never missed a target," he said. He declined to comment on Chrysler's financial situation. The company plans to report details on its fourth-quarter performance next month.
Mr. Stallkamp suggested Chrysler needs to be more aggressive marketing the models it has on its lots now, a strategy the company tried when it was struggling in the 1980s. "You can't go radio silent," he said. When I was there all we had was the K-car and we advertised the heck out of that and it bought us time until we had more product."
Last week the auto maker outlined a new advertising campaign plugging the heavy-duty Ram truck. The ads focus on the pickup's use at work and play and feature the voice of actor Sam Elliott, who stared in the move "Road House."
Under Mr. Marchionne's strategy, Chrysler eventually will launch a string of small cars based on Fiat models. But the first one won't arrive until late this year.
Dealers said they would welcome an early arrival of the revamped 300 sedan.
"I am selling a lot of Jeeps and Dodge trucks but not much else," said Alan Helfman vice president of River Oaks Chrysler Jeep Dodge in Houston. "We are holding tight until the summer and are awaiting the new Grand Cherokee and Chrysler 300."
(Copyright (c) 2007, Dow Jones & Company, Inc.)
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by Brad Wernle
In new ads, Ram truck stands alone
DETROIT -- A new advertising campaign this spring for the 2010 Ram Heavy Duty pickup features the deep, resonant voice of actor Sam Elliott and celebrates the Dodge-like manly American pickup virtues of toughness, utility and durability.
But nowhere in the campaign is the word "Dodge" to be found.
That's just as Chrysler CEO Sergio Marchionne wants it. Marchionne is trying to rebuild Chrysler Group around strong brand identities. Last year he decreed that the Ram brand would be separate from Dodge in the same way Fiat and Fiat Professional are separate brands in Europe.
Marchionne said the change will give Dodge more room to establish an identity as a car, minivan and crossover brand while the Ram brand can increase its recreational and commercial truck business.
Skeptics have argued that Chrysler is weakening an icon by divorcing Dodge and the Ram pickup. American truck buyers long have chosen among Ford, Chevy and Dodge, they argue, and Chrysler is throwing away decades of brand equity.
Falling sales
Ram marketers have their work cut out for them. Ram brand sales dropped 31 percent in February compared with February 2009. The full-sized pickup segment rose 7 percent in February. Also, Chrysler is dialing back incentives that were as high as $3,000 per heavy-duty pickup a year ago. A $1,000 rebate is available through April on the heavy-duty Ram 2500.
The ad campaign was created by Ram's new agency, the Richards Group in Dallas. A central element will be the Ram HD's most prized honor: the 2010 Motor Trend magazine Truck of the Year award.
The Richards Group filmed five TV brand spots with the truck showing off its capabilities under heavy loads and in heavy weather.
Fred Diaz, CEO of the Ram brand and also Chrysler Group's lead sales executive, said, "We'll spend the lion's share on media and advertising and a minimum on incentives."
The Ram brand, which now includes the Ram and Dakota pickups and the discontinued Dodge Sprinter, accounts for about a third of all Chrysler Group shipments and revenues, he said. "It is a mainstay of the corporation, and we will not back down."
Marissa Hunter, head of communications for the Ram brand, said Ram wants to improve its heavy-duty share in areas in which it has been weak, such as pickups with gasoline engines, for example. Ram also plans to add nameplates, some fashioned from Fiats.
Road trip
In addition to TV and print ads and a new Web site, Ram marketers are taking their heavy-duty pickup to 33 venues.
Diaz said separating the brands gives Dodge "space to play."
Those buyers who still want to call their trucks Dodge can be proud to do so, Diaz said. "This Ram truck is always going to be a Dodge," he said. Each truck will carry a Dodge vehicle identification number.
"But you will never see it marketed as a Dodge Ram."
Read more: http://www.autonews.com/article/20100329/RETAIL03/303299951#ixzz0jYoxVlQ6
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by David Barkholz
At Chrysler plant, the most flexible rules
DETROIT -- Chrysler Group's new Pentastar V-6 engine plant in suburban Detroit has opened with some of the most flexible work rules among shops represented by the UAW.
When the plant is fully operational in October, most of its 500 UAW workers will spend at least part of their day in production, although 300 of those workers are skilled tradespeople, said Dan Haws, a shop steward for UAW Local 372 at the new Trenton South Engine Plant.
Haws knows of no other UAW plant where skilled trades workers are expected to run production daily. Traditionally, the UAW has insisted that production and skilled trades roles be kept separate to preserve jobs and ensure the safe repair and maintenance of machinery.
The rules will work at the plant, Haws said, because workers on each of two 10-hour shifts are broken into small teams responsible for producing and assembling parts on a specific group of machines. The trades workers will be responsible for running parts and maintaining and repairing machines as needed, Haws said after the plant's opening this month.
The $364 million Trenton South plant is producing a new generation of fuel-efficient V-6 engines that will replace seven older V-6s in the Chrysler fleet over the next two years.
Hourly assembly team leader Wesley Brooks said the skilled trades workers in each team are familiar with the machines, so they have a good feel for anticipating problems before they affect production. And when problems crop up, trades workers are on the spot to begin fixes, thus minimizing down time, Brooks said.
At the plant opening, Chrysler Group manufacturing chief Scott Garberding confirmed that many skilled trades workers will also run production. He declined to say how many.
Read more: http://www.autonews.com/article/20100329/OEM01/303299945#ixzz0jYoZYIPM
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by Neil Roland and Brad Wernle
Chrysler shifts tone on dealers, Automaker offers reinstatement to 50 stores, signals settlement talks with more
Finally, some movement at Chrysler.
After nearly a year of taking a hard line with rejected dealerships, Chrysler Group changed course last week and offered to reinstate 50 stores.
The company also said it will enter settlement talks with an unspecified number of rejected dealerships and disclosed that 36 already have been reinstated nationwide.
One thing hasn't changed, though. Chrysler still favors dealerships that sell all four of its brands: Chrysler, Dodge, Jeep and the recently added Ram truck brand. All 50 offers of reinstatement are to stores selling all those brands.
But despite the actions by Chrysler, problems remain.
Dealer lawyers say Chrysler hasn't budged in its approach to arbitration -- for example, demanding that arbitrating dealers sign confidentiality agreements blocking them from sharing Chrysler information with other dealers.
One dealer who received a call from a Chrysler official saying a letter of intent for reinstatement was coming said he was taking a wait-and-see attitude.
"We're looking at it with guarded optimism," said the dealer, who declined to be identified. He remains skeptical because Chrysler had given no previous indication it had any interest in bringing back any rejected dealerships.
A company spokesperson said Chrysler would continue to explore "mutually beneficial options outside arbitration" to settle with dealers who have filed for arbitration.
By offering to reinstate the 50, Chrysler reduced its arbitration caseload to 337, said a company spokesperson.
Ed Tonkin, chairman of the National Automobile Dealers Association, called Chrysler's intention to reinstate 50 dealerships "a move in the right direction." This, coupled with previous contracts awarded to 36 other closed dealerships, brings the total to 86 dealerships that could be reinstated.
In U.S. Bankruptcy Court last year, Chrysler canceled 789 dealerships.
"NADA views this as a good-faith effort and hopes that this carries forward in Chrysler's continuing settlement and arbitration discussions with the other terminated dealers," Tonkin said.
Delays?
Eric Chase, an attorney representing four rejected Chrysler dealers, said the reinstatements do not change his opinion that the automaker won't give in easily on the remaining dealerships seeking arbitration. He said Chrysler has been "obstructive" at every phase of the arbitration process.
Chrysler's demand for a signed confidentiality pledge before it will agree to provide documents in discovery is prompting complaints from dealer lawyers accustomed to comparing notes on strategy.
The company also still is resisting dealers' efforts to find out the specific criteria used in terminating their stores -- information that Chrysler was required under law to provide in January, dealer lawyers said.
"Chrysler continues to resist and contest each and every step in arbitration," said Rob Byerts, a Tallahassee, Fla., lawyer whose firm represents 13 closed Chrysler dealerships. "It appears to be for no good reason other than delay."
Delays benefit Chrysler because if arbitrations aren't completed before the June 14 deadline set by Congress, the dealers lose their cases, said Mike Charapp, a McLean, Va., lawyer.
Chrysler's nine-page "Confidentiality Agreement and Order" -- a copy of which Automotive News obtained -- has touched off wrangling in dozens of arbitrations, seven dealer lawyers said.
Chrysler defended the confidentiality agreement.
"This is a standard request in litigation dealing with sensitive financial and competitive data," the company said in an e-mail last week.
It added that the new law setting up arbitration states that "discovery shall be limited to request for documents specific to the covered dealership."
Dealer lawyers disagreed, saying the standard approach in arbitration is to consider each particular document rather than the documents as a whole.
If a document deals with trade secrets or confidential business information, then it is addressed with the arbitrator, they said. But dealership performance documents rarely raise such sensitive issues.
Hearings in April
Meanwhile, the June 14 deadline looms over proceedings, although arbitrators have the discretion to extend them another month.
A total of 115 hearing dates, scheduled from April 21 into early June, had been set as of last week, said India Johnson, senior vice president of the American Arbitration Association, which is administering the cases.
Hundreds more have yet to be scheduled. The exact figure is a shifting number, as General Motors Co. and perhaps Chrysler move to reinstate dealerships.
A total of 1,550 GM and Chrysler arbitration claims have been filed, but GM has said it is reinstating 661 rejected dealerships and is willing to discuss possible settlement with as many as 499 more.
Johnson has little concern about the arbitrations meeting the congressional deadline. Said Johnson: "We have a lot of other arbitrators that we could throw at these cases."
Chrysler Group reinstatements
Dealerships
789 - Canceled in bankruptcy in 2009
36 - Reinstated by Chrysler after bankruptcy
2,334 - Operating as of Feb. 28
50 - Will receive offers of reinstatement from Chrysler
337 - Still in arbitration
Source: Chrysler
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100329/RETAIL07/303299935/1400#ixzz0jYn7Tgi8
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by Luca Ciferri
Fiat could launch hybrids, Marchionne says
TURIN – Fiat S.p.A. CEO Sergio Marchionne said the automaker is considering selling hybrids in Europe. His comment adds weight to a remark by a local Italian politician that the company will soon launch minivans with a fuel-saving alternative powertrain.
Speaking at Fiat's annual shareholders meeting in Turin on Friday, Marchionne declined to elaborate further on hybrids, saying only that the company will announce its future products when it unveils its 2010-2014 business plan on April 21.
Earlier on Friday, Piedmont region governor Mercedes Bresso said Marchionne told her that Fiat will build hybrid variants of the five- and seven-seat minivans that will replace the Idea and Multipla models.
Bresso said the hybrid minivans would be built at the Mirafiori plant in Turin where Fiat has already said it will produce the new minivans with conventional engines starting in late 2011.
Automakers are launching gasoline- and diesel-electric hybrids as well as full-electric vehicles in Europe to meet a growing demand for fuel-efficient models and to help them comply with tougher EU regulations on fleet CO2 emissions that start to take effect in 2012.
Volkswagen has just introduced its first gasoline-electric hybrid powertrain, which is on the Touareg premium SUV. Next year, PSA/Peugeot Citroen will introduce diesel-electric hybrids starting with the 3008 medium minivan.
Fiat has not said whether it plans gasoline- or diesel-electric hybrids.
Fiat has had the lowest average fleet CO2 emissions of all companies selling cars in Europe for the past three years, according to UK-based market researched JATO Dynamics.
The automaker has focused on engine technology such as its Multiair variable valve timing system to boost fuel efficiency and lower CO2 output.
No Fiat electric car for Europe
Marchionne said it was very unlikely that Fiat will sell an electric version of its 500 minicar in Europe.
Chrysler Group said last week that it will sell an electric Fiat 500 in the United States starting in 2012.
Read more: http://www.autonews.com/article/20100329/ANE/100329905#ixzz0jYqOZIR1
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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The New York Times ( 03/29/2010 )
by Keith Bradsher
Ford Agrees to Sell Volvo to a Fast-Rising Chinese Company
HONG KONG — Ford Motor reached an agreement on Sunday to sell its Volvo subsidiary to a Chinese conglomerate, in the clearest confirmation yet of China’s global ambitions in the auto industry.
“The future road for Volvo Cars is now defined,” Maud Olofsson, the Swedish deputy prime minister, said on Sunday. “Regardless of who owns Volvo Cars, its brand will still be Swedish.”
The Zhejiang Geely Holding Group, based in Hangzhou, agreed to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.
Ford paid $6 billion in 1999 to acquire Volvo, leaving the company with a substantial loss on its investment. Ford has shifted its strategy to focus on its core brands and has already sold off other luxury brands, including Jaguar and Land Rover to the Tata Group of India for $2.3 billion a year ago.
The purchase of one of Europe’s most storied brands shows how China has emerged not just as the largest auto market by number of vehicles sold in the last year, but also as a country determined to capture market share around the globe.
Zhejiang Geely said it planned to retain production of Volvo cars in Sweden, but it is expected to build another factory for them in China, most likely near Beijing or Shanghai. Ford already builds small numbers of Volvos for the Chinese market at an assembly plant in Chongqing. Most of the vehicles built at that factory are Fords and Mazdas for sale in China.
China overtook the United States in 2009 as the world’s largest auto market in terms of the number of family vehicles sold. But the average car in China sold for $17,000 last year while the average price tag in the United States was close to $30,000, according to the consulting firm J. D. Power & Associates. So the American car market is still bigger by value than China’s.
Zhejiang Geely’s majority-owned automotive subsidiary, Geely Automobile Holdings, is China’s 12th-largest automaker based on production so far this year. But it is China’s second-largest automaker, after the BYD Group, that is not at least partly state-owned.
Michael Dunne, an independent auto analyst based in Bangkok, said that acquiring a well-known brand was the fastest way for a company like Geely Auto to move up from making affordable cars for the masses to building respected cars for the affluent.
“This is all about Geely’s efforts to bust out of the basement,” Mr. Dunne said. “Volvo happens to be available.”
Many automakers in China are loaded with ambition, but Geely Auto stands out even by Chinese standards. While making most of its money on inexpensive compacts and subcompacts, it has turned heads at auto shows with ambitious concept cars that look like Western sports cars and even Rolls-Royces.
Last fall, Ford said that Geely was the preferred bidder for Volvo, but there were a number of problems that needed to be overcome, including ones involving trade secrets, financing and the initial hostility of Swedish labor and political leaders. In late December, the two had settled on most of the details of a deal, but financing and government approvals remained to be completed.
The parent company has said repeatedly that it planned to keep Volvo as a separate unit from Geely Auto. The company promised again on Sunday to retain Volvo’s existing management, but according to people in the industry, the company had already hired several executives with international automotive experience to help it oversee the new subsidiary.
Zhejiang Geely is dominated by its founder, Li Shufu, the son of farmers from Taizhou, in southeastern China, who turned a small business building motorcycle parts there into one of China’s fastest-growing companies.
“I want to emphasize that Volvo is Volvo and Geely is Geely — Volvo will be run by Volvo management,” Mr. Li said on Sunday at a news conference in Goteborg, Sweden. “We are determined to preserve the distinct identity of the Volvo brand.”
Having been scared last year by the near collapse of Saab, Sweden has acquiesced to the sale of Volvo to the Chinese buyer.
“The future road for Volvo Cars is now defined,” said Maud Olofsson, the Swedish deputy prime minister and minister for enterprise and energy. “Regardless of who owns Volvo Cars, its brand will still be Swedish.”
The deal is scheduled to close in the third quarter of this year. In the 11 years that Ford has owned Volvo Cars, it has closely integrated the two companies’ designs, so that their cars now share many parts.
Lewis W. K. Booth, Ford’s chief financial officer, said Ford would continue to supply Geely with engines, stamped steel body parts and other components for a period of time that he did not specify.
Yale Zhang, the director of greater China vehicle forecasts for CSM Worldwide, an international consulting firm, said the acquisition would benefit Geely Auto’s image at home, because many Chinese were likely to take pride in the acquisition of such a famous brand by a Chinese company. But Zhejiang Geely may also face a difficult time in becoming a multinational concern, since it has focused mostly on its domestic market up to now.
“It will help Geely’s brand, that’s for sure,” Mr. Zhang said.“The challenges and the risks are equal to the opportunity.”
Zhejiang Geely owns 51 percent of Geely Automobile Holdings, which is publicly traded in Hong Kong. Zhejiang Geely also still owns the original motorcycle parts manufacturing operation, along with several technical institutes and a hotel complex in southern China.
In a letter to the Hong Kong stock exchange last summer, Geely Auto publicly assured its minority investors that it would not try to buy Volvo. Such a deal would have greatly increased its debt at a time when the automaker was already investing heavily to expand in the Chinese market.
Instead of making a bid for Volvo through Geely Auto, the privately held parent company made the deal. With its pledge to keep Geely Auto and Volvo as separate subsidiaries, Zhejiang Geely may have been trying to address possible concerns in Sweden about the sale of a national icon to a Chinese company.
Mr. Dunne predicted that the Chinese market for luxury cars would more than double in the coming years, to 650,000 in 2015, compared with 300,000 last year.
“There is room in China for a successful Volvo,” Mr. Dunne said. “But will Geely know how to make it go?”
(c) 2007 New York Times Company
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Detroit Free Press ( 03/29/2010 )
by Tim Higgins
GM, dealers have fences yet to mend, Lawsuit continues; emotions still raw
Though General Motors is trying to get past problems with dealers over proposed shutdowns as quickly as possible, Steve La Belle’s lawsuit filed in Massachusetts shows how complicated the process is for the Detroit automaker.
La Belle was one of the 1,160 GM dealerships to file for arbitration, to fight to keep from losing his Chevrolet franchise. In the meantime, GM allowed a dealer from a neighboring community to move into LaBelle’s sales area, according to the lawsuit filed in early March.
La Belle, whose dealership is in Bridgewater, Mass., a town about 45 minutes south of Boston, is trying to get an injunction to keep that competitor from selling new GM vehicles until his arbitration is resolved.
It’s a complicated situation inherited by Mark Reuss, who became GM president of North America in December, following a management shake-up that included Fritz Henderson resigning as CEO and Chairman Ed Whitacre assuming chief executive duties.
Reuss quickly signaled that improving relations with dealers was one of his top priorities. At the National Automobile Dealers Association’s annual meeting in February, he said he wanted to settle as many of the arbitration cases as possible outside of court.
A few weeks later, he announced that GM was offering 661 GM dealers the opportunity to be reinstated. The rest remain in arbitration and face a June 14 deadline that can be extended by 30 days. La Belle received one of those offers, according to court filings. Those records give new insight into what GM is asking of those dealers to stay, and La Belle’s response illustrates the raw emotions that remain.
“I’m extremely frustrated,” La Belle told the Free Press by telephone. “I think Mark Reuss is trying to right a lot of the wrongs. … I think a lot of the old regime that still is there is trying to defend the decisions they made.”
The rules: Repay and remodel
La Belle was promised $250,000 to wind down his dealership. But if he wants to stay as a GM dealer, he now must come up with a line of credit, present $400,000 in working capital and repay GM the $56,000 of the wind-down money he already received, according to court filings.
The letter said he won’t be able to order any new vehicles until all of the wind-down money has been repaid.
There also are requirements on what the store must look like. Furthermore, he must withdraw the arbitration claim by April 30.
“I’m not going to sign their letter of intent until they provide me with a customary and usual letter of intent,” he said. While declining to discuss the specifics of La Belle’s situation, Ryndee Carney, a GM spokeswoman, said the terms of his letter of intent were similar to those sent to the 661 dealers offered a chance at reinstatement. Some of the details would be tailored to each dealer’s situation.
Carney said La Belle’s lawsuit has “has little or nothing to do with the arbitration process.” But she agreed that the case illustrates the complicated nature of GM’s dealer arbitration process, especially given the variances in franchise laws among the states.
“This type of thing, in the best of times, is complicated,” she said. “That’s why it’s been so important for us to address each one of these cases individually.”
Offer gets mixed reception
Joe Godfrey, of Godfrey Chevrolet Buick in Cadillac, was one of those dealers, facing the loss of his Buick franchise until he received GM’s letter offering reinstatement.
“I’m very pleased. … My family goes way back with Buick,” he said.
Godfrey said he was required to return money that GM already had paid him to wind down the Buick franchise — he wasn’t losing his Chevy line.
“I’ve already sent them a check,” he said.
Furthermore, he said, GM gave him an extension on when he must update his facilities. “They’ve been reasonable,” Godfrey said. “They said, ‘Times are tough, your road is going to be torn up in front of you. You don’t have to do it this year.’ ” The decision to fight GM over the dealer process was difficult for many, however.
Allan Rose, a small Buick-Pontiac-GMC dealer in Gloversville, N.Y., said he decided not to appeal the decision because of the cost of arbitration and troubles getting financing for inventory.
Plus, he figured if his dealership had won an appeal, he would be required to spend about $150,000 or more to update his facilities to meet new GM requirements.
“My gut is that I could have beat General Motors on this had it gone to arbitration,” he said. “But when you’re going to sell 45 or 50 cars a year, what the hell am I going to win?”
(c) Copyright 2007, Detroit Free Press. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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USA TODAY ( 03/29/2010 )
by Jayne O'Donnell
How 'black boxes' help in car crash reconstructions
When it comes to "black boxes" in cars, there's one thing everyone from regulators to automakers agrees upon: These onboard crash-data recorders have their limitations.
Even so, in alleged unintended-acceleration incidents, there may be no better way to try to figure out whether the car or the driver is to blame.
Prompted by Toyota's recalls and questions about whether they fully remedy possible runaways, the National Highway Traffic Safety Administration is considering whether to require so-called black boxes — officially "event data recorders" or EDRs — in every vehicle sold in the USA. It estimates that two-thirds of new cars now come with them; about 40% of the cars on the road have them.
These devices typically gather information in the event of a crash. The data — spanning from a few seconds before a crash to up to a few seconds after — include such information as speed, seat belt use, air bag deployment and (important in acceleration probes) brake and gas pedal positions. If the data show a driver had his or her foot on the brake but the car still accelerated into a crash, it could help verify that the car, not the driver, was to blame.
NHTSA said last week that data from a Prius' black box, as well as other data from its diagnostic systems, showed that a woman who careened into a stone wall in Harrison, N.Y., was pressing the accelerator, not the brakes, and that a car defect was not at fault.
The data can be wrong
While the information proved useful in that case, the limited data being collected by black boxes mean they can help only so much in accident probes, or crash "reconstruction." The data can also be wrong if the car is defective, since EDRs rely on the same electronics that could have caused the problems in the first place. But data from multiple points in the car likely won't all be wrong.
Most crash investigations still rely on factors such as skid marks and deformation of the vehicles in the crash. That's why Mukul Verma, a former safety expert at General Motors, believes black boxes should be required.
"Today's cars are complex mechatronic (mechanical and electronic) systems, but reconstruction methods are still all mechanical and treat the car as a mechanical system only," says Verma, a consultant and professor. "Mandatory EDRs offer a way of catching up with the modern automobile."
He says black boxes could be redesigned to capture "fault codes" — error codes that vehicle computers supply to help mechanics diagnose and fix your car — for little cost. That, he says, would make EDRs more useful in seeing if vehicle malfunctions caused a crash.
NHTSA regulations are being phased in
A NHTSA standard, due to start phasing in this fall and be in place in 2012, does not mandate black boxes, but requires automakers that install them to disclose it and requires certain data, including brake and throttle position.
The Alliance of Automobile Manufacturers, which represents all major automakers except Honda, has petitioned NHTSA to postpone the rule's effective date to September 2013 because economic conditions delayed vehicle redesigns. Alliance spokesman Wade Newton said the group likely would not oppose making EDRs mandatory if NHTSA keeps the same data requirements. "That way development can continue unfettered and uninterrupted," he says.
If NHTSA proposes making boxes mandatory, it is expected to add a requirement that the data and tools to read the data be generally available.
Toyota executives testifying before Congress were admonished for limited accessibility of its vehicles' EDR data. Only Toyota could read the system and, until recently, it had only one machine in the U.S. for doing so. Accident investigators complained they rarely could obtain the data.
Toyota says it will have upgraded the software that can interpret EDR data by the end of April. NHTSA will have four of the Toyota machines used to extract EDR data by that time, and 150 more will be available in North America, Toyota says. Once these additional units are available, Toyota says, it will provide owners with access to recorder data from their vehicles upon request.
Toyota President Akio Toyoda said last month that the company would "make more active use" of EDRs because "we have recognized that we should enhance our information-gathering capabilities" and it would improve quality.
Ford Motor, General Motors and Chrysler have, by contrast, made their black-box technology available so that Bosch Diagnostics can make and sell systems to analyze their data. Anyone with the system can read them, including independent investigators and attorneys.
The other two of the six largest automakers in the U.S. market, Honda and Nissan, are more restrictive.
Nissan says it makes data from its recorders available to vehicle owners, law enforcement and NHTSA, upon request. The black-box function is part of a system it calls Consult. The data, such as EDR post-crash information, as well as things like why a check-engine light is on, can be obtained using an access code. Each of the 1,150 Nissan and Infiniti U.S. dealerships has at least one Consult tool, says Nissan spokesman Colin Price.
Honda says it is protecting its owners. "Our stance has always been that EDR data belongs to the owner of the vehicle, and we will download it at their request — or to comply with a court order," says Honda's Chris Naughton.
Honda and Acura dealers can access portions of the data with their diagnostic tools, but detailed analysis of EDR data currently can be done by Honda's research and development staff, Naughton says. In states that require it, independent garages can buy the tools from Honda.
Since EDRs began to be used, privacy advocates and civil liberties groups have raised concerns about how such data would be made available and used. At least 12 states have laws restricting access to EDR data, says Jim Harris, a Port St. Lucie, Fla., accident recontructionist.
The more access to data the better
Harris favors requiring all vehicles to have black boxes with standardized access to the data. Harris, who owns Harris Technical Services, says it already is costly for police and private investigators to buy the gear needed to access the data in the Detroit makers' vehicles.
"Whatever the outcome of the present hot issue, electronic failures likely to affect safety will happen in the future," he says. "We need to have some way of investigating those that is more reliable than today's technology."
Click here to view supplemental graphics: http://www.usatoday.com/money/autos/2010-03-29-blackboxes29_ST_N.htm
© Copyright 2007 USA TODAY, a division of Gannett Co. Inc.
-- Chrysler Expedites 300 Sedan, Restyled Model Is Pushed Up to Improve Chances of Reaching 2010 Goal (The Wall Street Journal)
-- In new ads, Ram truck stands alone (Automotive News)
-- At Chrysler plant, the most flexible rules (Automotive News)
-- Chrysler shifts tone on dealers, Automaker offers reinstatement to 50 stores, signals settlement talks with more (Automotive News)
-- Fiat could launch hybrids, Marchionne says (Automotive News)
-- Ford Agrees to Sell Volvo to a Fast-Rising Chinese Company (The New York Times)
-- GM, dealers have fences yet to mend, Lawsuit continues; emotions still raw (Detroit Free Press)
-- How 'black boxes' help in car crash reconstructions (USA TODAY)
*Refer to © Notice Below
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The Wall Street Journal ( 03/29/2010 )
by Jeff Bennett
Chrysler Expedites 300 Sedan, Restyled Model Is Pushed Up to Improve Chances of Reaching 2010 Goal
Chrysler Group LLC is rushing to accelerate the U.S. launch of its redesigned flagship sedan, a once hot-selling model whose sales have slipped, as part of a push to keep on track its ambitious turnaround plan, said three people familiar with the matter.
The company is off to a sluggish start this quarter, and now needs a sales surge later this year to hit its target of selling 1.1 million vehicles in the U.S. When the car maker set the 2010 goal in November it predicted it would break even this year.
Chrysler, which is under the management control of Fiat SpA, will get help in May when a new version of its Jeep Grand Cherokee goes on sale at U.S. dealerships. The restyled version of one of the company's top-selling models features a more fuelefficient engine and a higher-quality interior.
In hopes of spurring sales later in the year, Chrysler also is making plans to move up the U.S. launch of the restyled Chrysler 300 sedan by three to four months, to November from the first quarter of 2011, these people said.
The new 300 model, as with the Jeep, features a sleeker exterior and a better grade of interior materials such as softer plastics, an area where Chrysler has come in for criticism.
The current 300, with a bold front grille and styling that some likened to a gangster car, was a hit when Chrysler started selling it in 2005. But sales have fallen in recent years. The car competes against Toyota Motor Corp.'s Avalon, General Motors Co.'s Buick Lucerne, Ford Motor Co.'s Taurus and other large sedans.
Chrysler also is working to raise production of the new six-cylinder engine that will debut in the reworked Grand Cherokee, these people said. Increased supply would enable Chrysler to offer the so-called Pentastar engine in other models this year, including the 300, they said. The engine could help win customers looking for a combination of power and fuel economy.
Chrysler is making the moves as it nears the one-year anniversary of its Chapter 11 bankruptcy filing on April 30. As part of a strategy worked out by the U.S. government, Chrysler formed an alliance with Italy's Fiat. In November, Sergio Marchionne, who serves as chief executive of both auto makers, outlined a turnaround plan that envisions Chrysler breaking even this year and generating profits in 2011.
The plan is based on a forecast that Chrysler's U.S. sales will rise 18% this year, from 931,402 cars and light trucks in 2009 to 1.1 million in 2010. But in the year's first two months, sales fell 3.2%, and analysts expect another decline when March sales are reported Thursday.
Chrysler sales this year through February fell to 141,592 vehicles, the lowest for the company in 30 years, according to Ward's Automotive Group.
To hit its target, Chrysler must now sell at least 95,000 vehicles per month for the rest of the year. It has reached that level only once in the last 14 months.
In addition, half or more of the vehicles Chrysler sold in January and February were purchased by rental-car companies and other fleet customers, said people familiar with the matter. That suggests Chrysler is having some trouble winning over individuals who buy cars through dealerships.
Mr. Marchionne's plan envisions such retail sales making up more than 70% of the total, and lower-margin fleet sales less than 30%.
Tom Stallkamp, a former senior Chrysler executive who is now a partner at Ripplewood Holdings LLC, a private-equity firm, said it will be hard for Chrysler to make up for sales it is losing out on now. "They are giving away their customers and you can't win them back later in the year, especially when you have more competition out there," he said, noting that Toyota, Honda Motor Co. and Hyundai Motor Co. are offering attractive incentives to gain market share.
A Chrysler spokesman, Gualberto Ranieri, said the company is sticking with its U.S. sales target. "The goal is for 1.1 million and Mr. Marchionne has never missed a target," he said. He declined to comment on Chrysler's financial situation. The company plans to report details on its fourth-quarter performance next month.
Mr. Stallkamp suggested Chrysler needs to be more aggressive marketing the models it has on its lots now, a strategy the company tried when it was struggling in the 1980s. "You can't go radio silent," he said. When I was there all we had was the K-car and we advertised the heck out of that and it bought us time until we had more product."
Last week the auto maker outlined a new advertising campaign plugging the heavy-duty Ram truck. The ads focus on the pickup's use at work and play and feature the voice of actor Sam Elliott, who stared in the move "Road House."
Under Mr. Marchionne's strategy, Chrysler eventually will launch a string of small cars based on Fiat models. But the first one won't arrive until late this year.
Dealers said they would welcome an early arrival of the revamped 300 sedan.
"I am selling a lot of Jeeps and Dodge trucks but not much else," said Alan Helfman vice president of River Oaks Chrysler Jeep Dodge in Houston. "We are holding tight until the summer and are awaiting the new Grand Cherokee and Chrysler 300."
(Copyright (c) 2007, Dow Jones & Company, Inc.)
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by Brad Wernle
In new ads, Ram truck stands alone
DETROIT -- A new advertising campaign this spring for the 2010 Ram Heavy Duty pickup features the deep, resonant voice of actor Sam Elliott and celebrates the Dodge-like manly American pickup virtues of toughness, utility and durability.
But nowhere in the campaign is the word "Dodge" to be found.
That's just as Chrysler CEO Sergio Marchionne wants it. Marchionne is trying to rebuild Chrysler Group around strong brand identities. Last year he decreed that the Ram brand would be separate from Dodge in the same way Fiat and Fiat Professional are separate brands in Europe.
Marchionne said the change will give Dodge more room to establish an identity as a car, minivan and crossover brand while the Ram brand can increase its recreational and commercial truck business.
Skeptics have argued that Chrysler is weakening an icon by divorcing Dodge and the Ram pickup. American truck buyers long have chosen among Ford, Chevy and Dodge, they argue, and Chrysler is throwing away decades of brand equity.
Falling sales
Ram marketers have their work cut out for them. Ram brand sales dropped 31 percent in February compared with February 2009. The full-sized pickup segment rose 7 percent in February. Also, Chrysler is dialing back incentives that were as high as $3,000 per heavy-duty pickup a year ago. A $1,000 rebate is available through April on the heavy-duty Ram 2500.
The ad campaign was created by Ram's new agency, the Richards Group in Dallas. A central element will be the Ram HD's most prized honor: the 2010 Motor Trend magazine Truck of the Year award.
The Richards Group filmed five TV brand spots with the truck showing off its capabilities under heavy loads and in heavy weather.
Fred Diaz, CEO of the Ram brand and also Chrysler Group's lead sales executive, said, "We'll spend the lion's share on media and advertising and a minimum on incentives."
The Ram brand, which now includes the Ram and Dakota pickups and the discontinued Dodge Sprinter, accounts for about a third of all Chrysler Group shipments and revenues, he said. "It is a mainstay of the corporation, and we will not back down."
Marissa Hunter, head of communications for the Ram brand, said Ram wants to improve its heavy-duty share in areas in which it has been weak, such as pickups with gasoline engines, for example. Ram also plans to add nameplates, some fashioned from Fiats.
Road trip
In addition to TV and print ads and a new Web site, Ram marketers are taking their heavy-duty pickup to 33 venues.
Diaz said separating the brands gives Dodge "space to play."
Those buyers who still want to call their trucks Dodge can be proud to do so, Diaz said. "This Ram truck is always going to be a Dodge," he said. Each truck will carry a Dodge vehicle identification number.
"But you will never see it marketed as a Dodge Ram."
Read more: http://www.autonews.com/article/20100329/RETAIL03/303299951#ixzz0jYoxVlQ6
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by David Barkholz
At Chrysler plant, the most flexible rules
DETROIT -- Chrysler Group's new Pentastar V-6 engine plant in suburban Detroit has opened with some of the most flexible work rules among shops represented by the UAW.
When the plant is fully operational in October, most of its 500 UAW workers will spend at least part of their day in production, although 300 of those workers are skilled tradespeople, said Dan Haws, a shop steward for UAW Local 372 at the new Trenton South Engine Plant.
Haws knows of no other UAW plant where skilled trades workers are expected to run production daily. Traditionally, the UAW has insisted that production and skilled trades roles be kept separate to preserve jobs and ensure the safe repair and maintenance of machinery.
The rules will work at the plant, Haws said, because workers on each of two 10-hour shifts are broken into small teams responsible for producing and assembling parts on a specific group of machines. The trades workers will be responsible for running parts and maintaining and repairing machines as needed, Haws said after the plant's opening this month.
The $364 million Trenton South plant is producing a new generation of fuel-efficient V-6 engines that will replace seven older V-6s in the Chrysler fleet over the next two years.
Hourly assembly team leader Wesley Brooks said the skilled trades workers in each team are familiar with the machines, so they have a good feel for anticipating problems before they affect production. And when problems crop up, trades workers are on the spot to begin fixes, thus minimizing down time, Brooks said.
At the plant opening, Chrysler Group manufacturing chief Scott Garberding confirmed that many skilled trades workers will also run production. He declined to say how many.
Read more: http://www.autonews.com/article/20100329/OEM01/303299945#ixzz0jYoZYIPM
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by Neil Roland and Brad Wernle
Chrysler shifts tone on dealers, Automaker offers reinstatement to 50 stores, signals settlement talks with more
Finally, some movement at Chrysler.
After nearly a year of taking a hard line with rejected dealerships, Chrysler Group changed course last week and offered to reinstate 50 stores.
The company also said it will enter settlement talks with an unspecified number of rejected dealerships and disclosed that 36 already have been reinstated nationwide.
One thing hasn't changed, though. Chrysler still favors dealerships that sell all four of its brands: Chrysler, Dodge, Jeep and the recently added Ram truck brand. All 50 offers of reinstatement are to stores selling all those brands.
But despite the actions by Chrysler, problems remain.
Dealer lawyers say Chrysler hasn't budged in its approach to arbitration -- for example, demanding that arbitrating dealers sign confidentiality agreements blocking them from sharing Chrysler information with other dealers.
One dealer who received a call from a Chrysler official saying a letter of intent for reinstatement was coming said he was taking a wait-and-see attitude.
"We're looking at it with guarded optimism," said the dealer, who declined to be identified. He remains skeptical because Chrysler had given no previous indication it had any interest in bringing back any rejected dealerships.
A company spokesperson said Chrysler would continue to explore "mutually beneficial options outside arbitration" to settle with dealers who have filed for arbitration.
By offering to reinstate the 50, Chrysler reduced its arbitration caseload to 337, said a company spokesperson.
Ed Tonkin, chairman of the National Automobile Dealers Association, called Chrysler's intention to reinstate 50 dealerships "a move in the right direction." This, coupled with previous contracts awarded to 36 other closed dealerships, brings the total to 86 dealerships that could be reinstated.
In U.S. Bankruptcy Court last year, Chrysler canceled 789 dealerships.
"NADA views this as a good-faith effort and hopes that this carries forward in Chrysler's continuing settlement and arbitration discussions with the other terminated dealers," Tonkin said.
Delays?
Eric Chase, an attorney representing four rejected Chrysler dealers, said the reinstatements do not change his opinion that the automaker won't give in easily on the remaining dealerships seeking arbitration. He said Chrysler has been "obstructive" at every phase of the arbitration process.
Chrysler's demand for a signed confidentiality pledge before it will agree to provide documents in discovery is prompting complaints from dealer lawyers accustomed to comparing notes on strategy.
The company also still is resisting dealers' efforts to find out the specific criteria used in terminating their stores -- information that Chrysler was required under law to provide in January, dealer lawyers said.
"Chrysler continues to resist and contest each and every step in arbitration," said Rob Byerts, a Tallahassee, Fla., lawyer whose firm represents 13 closed Chrysler dealerships. "It appears to be for no good reason other than delay."
Delays benefit Chrysler because if arbitrations aren't completed before the June 14 deadline set by Congress, the dealers lose their cases, said Mike Charapp, a McLean, Va., lawyer.
Chrysler's nine-page "Confidentiality Agreement and Order" -- a copy of which Automotive News obtained -- has touched off wrangling in dozens of arbitrations, seven dealer lawyers said.
Chrysler defended the confidentiality agreement.
"This is a standard request in litigation dealing with sensitive financial and competitive data," the company said in an e-mail last week.
It added that the new law setting up arbitration states that "discovery shall be limited to request for documents specific to the covered dealership."
Dealer lawyers disagreed, saying the standard approach in arbitration is to consider each particular document rather than the documents as a whole.
If a document deals with trade secrets or confidential business information, then it is addressed with the arbitrator, they said. But dealership performance documents rarely raise such sensitive issues.
Hearings in April
Meanwhile, the June 14 deadline looms over proceedings, although arbitrators have the discretion to extend them another month.
A total of 115 hearing dates, scheduled from April 21 into early June, had been set as of last week, said India Johnson, senior vice president of the American Arbitration Association, which is administering the cases.
Hundreds more have yet to be scheduled. The exact figure is a shifting number, as General Motors Co. and perhaps Chrysler move to reinstate dealerships.
A total of 1,550 GM and Chrysler arbitration claims have been filed, but GM has said it is reinstating 661 rejected dealerships and is willing to discuss possible settlement with as many as 499 more.
Johnson has little concern about the arbitrations meeting the congressional deadline. Said Johnson: "We have a lot of other arbitrators that we could throw at these cases."
Chrysler Group reinstatements
Dealerships
789 - Canceled in bankruptcy in 2009
36 - Reinstated by Chrysler after bankruptcy
2,334 - Operating as of Feb. 28
50 - Will receive offers of reinstatement from Chrysler
337 - Still in arbitration
Source: Chrysler
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100329/RETAIL07/303299935/1400#ixzz0jYn7Tgi8
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Automotive News ( 03/29/2010 )
by Luca Ciferri
Fiat could launch hybrids, Marchionne says
TURIN – Fiat S.p.A. CEO Sergio Marchionne said the automaker is considering selling hybrids in Europe. His comment adds weight to a remark by a local Italian politician that the company will soon launch minivans with a fuel-saving alternative powertrain.
Speaking at Fiat's annual shareholders meeting in Turin on Friday, Marchionne declined to elaborate further on hybrids, saying only that the company will announce its future products when it unveils its 2010-2014 business plan on April 21.
Earlier on Friday, Piedmont region governor Mercedes Bresso said Marchionne told her that Fiat will build hybrid variants of the five- and seven-seat minivans that will replace the Idea and Multipla models.
Bresso said the hybrid minivans would be built at the Mirafiori plant in Turin where Fiat has already said it will produce the new minivans with conventional engines starting in late 2011.
Automakers are launching gasoline- and diesel-electric hybrids as well as full-electric vehicles in Europe to meet a growing demand for fuel-efficient models and to help them comply with tougher EU regulations on fleet CO2 emissions that start to take effect in 2012.
Volkswagen has just introduced its first gasoline-electric hybrid powertrain, which is on the Touareg premium SUV. Next year, PSA/Peugeot Citroen will introduce diesel-electric hybrids starting with the 3008 medium minivan.
Fiat has not said whether it plans gasoline- or diesel-electric hybrids.
Fiat has had the lowest average fleet CO2 emissions of all companies selling cars in Europe for the past three years, according to UK-based market researched JATO Dynamics.
The automaker has focused on engine technology such as its Multiair variable valve timing system to boost fuel efficiency and lower CO2 output.
No Fiat electric car for Europe
Marchionne said it was very unlikely that Fiat will sell an electric version of its 500 minicar in Europe.
Chrysler Group said last week that it will sell an electric Fiat 500 in the United States starting in 2012.
Read more: http://www.autonews.com/article/20100329/ANE/100329905#ixzz0jYqOZIR1
Copyright (C) 2007 Crain Communications, Inc. All rights reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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The New York Times ( 03/29/2010 )
by Keith Bradsher
Ford Agrees to Sell Volvo to a Fast-Rising Chinese Company
HONG KONG — Ford Motor reached an agreement on Sunday to sell its Volvo subsidiary to a Chinese conglomerate, in the clearest confirmation yet of China’s global ambitions in the auto industry.
“The future road for Volvo Cars is now defined,” Maud Olofsson, the Swedish deputy prime minister, said on Sunday. “Regardless of who owns Volvo Cars, its brand will still be Swedish.”
The Zhejiang Geely Holding Group, based in Hangzhou, agreed to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.
Ford paid $6 billion in 1999 to acquire Volvo, leaving the company with a substantial loss on its investment. Ford has shifted its strategy to focus on its core brands and has already sold off other luxury brands, including Jaguar and Land Rover to the Tata Group of India for $2.3 billion a year ago.
The purchase of one of Europe’s most storied brands shows how China has emerged not just as the largest auto market by number of vehicles sold in the last year, but also as a country determined to capture market share around the globe.
Zhejiang Geely said it planned to retain production of Volvo cars in Sweden, but it is expected to build another factory for them in China, most likely near Beijing or Shanghai. Ford already builds small numbers of Volvos for the Chinese market at an assembly plant in Chongqing. Most of the vehicles built at that factory are Fords and Mazdas for sale in China.
China overtook the United States in 2009 as the world’s largest auto market in terms of the number of family vehicles sold. But the average car in China sold for $17,000 last year while the average price tag in the United States was close to $30,000, according to the consulting firm J. D. Power & Associates. So the American car market is still bigger by value than China’s.
Zhejiang Geely’s majority-owned automotive subsidiary, Geely Automobile Holdings, is China’s 12th-largest automaker based on production so far this year. But it is China’s second-largest automaker, after the BYD Group, that is not at least partly state-owned.
Michael Dunne, an independent auto analyst based in Bangkok, said that acquiring a well-known brand was the fastest way for a company like Geely Auto to move up from making affordable cars for the masses to building respected cars for the affluent.
“This is all about Geely’s efforts to bust out of the basement,” Mr. Dunne said. “Volvo happens to be available.”
Many automakers in China are loaded with ambition, but Geely Auto stands out even by Chinese standards. While making most of its money on inexpensive compacts and subcompacts, it has turned heads at auto shows with ambitious concept cars that look like Western sports cars and even Rolls-Royces.
Last fall, Ford said that Geely was the preferred bidder for Volvo, but there were a number of problems that needed to be overcome, including ones involving trade secrets, financing and the initial hostility of Swedish labor and political leaders. In late December, the two had settled on most of the details of a deal, but financing and government approvals remained to be completed.
The parent company has said repeatedly that it planned to keep Volvo as a separate unit from Geely Auto. The company promised again on Sunday to retain Volvo’s existing management, but according to people in the industry, the company had already hired several executives with international automotive experience to help it oversee the new subsidiary.
Zhejiang Geely is dominated by its founder, Li Shufu, the son of farmers from Taizhou, in southeastern China, who turned a small business building motorcycle parts there into one of China’s fastest-growing companies.
“I want to emphasize that Volvo is Volvo and Geely is Geely — Volvo will be run by Volvo management,” Mr. Li said on Sunday at a news conference in Goteborg, Sweden. “We are determined to preserve the distinct identity of the Volvo brand.”
Having been scared last year by the near collapse of Saab, Sweden has acquiesced to the sale of Volvo to the Chinese buyer.
“The future road for Volvo Cars is now defined,” said Maud Olofsson, the Swedish deputy prime minister and minister for enterprise and energy. “Regardless of who owns Volvo Cars, its brand will still be Swedish.”
The deal is scheduled to close in the third quarter of this year. In the 11 years that Ford has owned Volvo Cars, it has closely integrated the two companies’ designs, so that their cars now share many parts.
Lewis W. K. Booth, Ford’s chief financial officer, said Ford would continue to supply Geely with engines, stamped steel body parts and other components for a period of time that he did not specify.
Yale Zhang, the director of greater China vehicle forecasts for CSM Worldwide, an international consulting firm, said the acquisition would benefit Geely Auto’s image at home, because many Chinese were likely to take pride in the acquisition of such a famous brand by a Chinese company. But Zhejiang Geely may also face a difficult time in becoming a multinational concern, since it has focused mostly on its domestic market up to now.
“It will help Geely’s brand, that’s for sure,” Mr. Zhang said.“The challenges and the risks are equal to the opportunity.”
Zhejiang Geely owns 51 percent of Geely Automobile Holdings, which is publicly traded in Hong Kong. Zhejiang Geely also still owns the original motorcycle parts manufacturing operation, along with several technical institutes and a hotel complex in southern China.
In a letter to the Hong Kong stock exchange last summer, Geely Auto publicly assured its minority investors that it would not try to buy Volvo. Such a deal would have greatly increased its debt at a time when the automaker was already investing heavily to expand in the Chinese market.
Instead of making a bid for Volvo through Geely Auto, the privately held parent company made the deal. With its pledge to keep Geely Auto and Volvo as separate subsidiaries, Zhejiang Geely may have been trying to address possible concerns in Sweden about the sale of a national icon to a Chinese company.
Mr. Dunne predicted that the Chinese market for luxury cars would more than double in the coming years, to 650,000 in 2015, compared with 300,000 last year.
“There is room in China for a successful Volvo,” Mr. Dunne said. “But will Geely know how to make it go?”
(c) 2007 New York Times Company
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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Detroit Free Press ( 03/29/2010 )
by Tim Higgins
GM, dealers have fences yet to mend, Lawsuit continues; emotions still raw
Though General Motors is trying to get past problems with dealers over proposed shutdowns as quickly as possible, Steve La Belle’s lawsuit filed in Massachusetts shows how complicated the process is for the Detroit automaker.
La Belle was one of the 1,160 GM dealerships to file for arbitration, to fight to keep from losing his Chevrolet franchise. In the meantime, GM allowed a dealer from a neighboring community to move into LaBelle’s sales area, according to the lawsuit filed in early March.
La Belle, whose dealership is in Bridgewater, Mass., a town about 45 minutes south of Boston, is trying to get an injunction to keep that competitor from selling new GM vehicles until his arbitration is resolved.
It’s a complicated situation inherited by Mark Reuss, who became GM president of North America in December, following a management shake-up that included Fritz Henderson resigning as CEO and Chairman Ed Whitacre assuming chief executive duties.
Reuss quickly signaled that improving relations with dealers was one of his top priorities. At the National Automobile Dealers Association’s annual meeting in February, he said he wanted to settle as many of the arbitration cases as possible outside of court.
A few weeks later, he announced that GM was offering 661 GM dealers the opportunity to be reinstated. The rest remain in arbitration and face a June 14 deadline that can be extended by 30 days. La Belle received one of those offers, according to court filings. Those records give new insight into what GM is asking of those dealers to stay, and La Belle’s response illustrates the raw emotions that remain.
“I’m extremely frustrated,” La Belle told the Free Press by telephone. “I think Mark Reuss is trying to right a lot of the wrongs. … I think a lot of the old regime that still is there is trying to defend the decisions they made.”
The rules: Repay and remodel
La Belle was promised $250,000 to wind down his dealership. But if he wants to stay as a GM dealer, he now must come up with a line of credit, present $400,000 in working capital and repay GM the $56,000 of the wind-down money he already received, according to court filings.
The letter said he won’t be able to order any new vehicles until all of the wind-down money has been repaid.
There also are requirements on what the store must look like. Furthermore, he must withdraw the arbitration claim by April 30.
“I’m not going to sign their letter of intent until they provide me with a customary and usual letter of intent,” he said. While declining to discuss the specifics of La Belle’s situation, Ryndee Carney, a GM spokeswoman, said the terms of his letter of intent were similar to those sent to the 661 dealers offered a chance at reinstatement. Some of the details would be tailored to each dealer’s situation.
Carney said La Belle’s lawsuit has “has little or nothing to do with the arbitration process.” But she agreed that the case illustrates the complicated nature of GM’s dealer arbitration process, especially given the variances in franchise laws among the states.
“This type of thing, in the best of times, is complicated,” she said. “That’s why it’s been so important for us to address each one of these cases individually.”
Offer gets mixed reception
Joe Godfrey, of Godfrey Chevrolet Buick in Cadillac, was one of those dealers, facing the loss of his Buick franchise until he received GM’s letter offering reinstatement.
“I’m very pleased. … My family goes way back with Buick,” he said.
Godfrey said he was required to return money that GM already had paid him to wind down the Buick franchise — he wasn’t losing his Chevy line.
“I’ve already sent them a check,” he said.
Furthermore, he said, GM gave him an extension on when he must update his facilities. “They’ve been reasonable,” Godfrey said. “They said, ‘Times are tough, your road is going to be torn up in front of you. You don’t have to do it this year.’ ” The decision to fight GM over the dealer process was difficult for many, however.
Allan Rose, a small Buick-Pontiac-GMC dealer in Gloversville, N.Y., said he decided not to appeal the decision because of the cost of arbitration and troubles getting financing for inventory.
Plus, he figured if his dealership had won an appeal, he would be required to spend about $150,000 or more to update his facilities to meet new GM requirements.
“My gut is that I could have beat General Motors on this had it gone to arbitration,” he said. “But when you’re going to sell 45 or 50 cars a year, what the hell am I going to win?”
(c) Copyright 2007, Detroit Free Press. All Rights Reserved.
© 2007 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
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USA TODAY ( 03/29/2010 )
by Jayne O'Donnell
How 'black boxes' help in car crash reconstructions
When it comes to "black boxes" in cars, there's one thing everyone from regulators to automakers agrees upon: These onboard crash-data recorders have their limitations.
Even so, in alleged unintended-acceleration incidents, there may be no better way to try to figure out whether the car or the driver is to blame.
Prompted by Toyota's recalls and questions about whether they fully remedy possible runaways, the National Highway Traffic Safety Administration is considering whether to require so-called black boxes — officially "event data recorders" or EDRs — in every vehicle sold in the USA. It estimates that two-thirds of new cars now come with them; about 40% of the cars on the road have them.
These devices typically gather information in the event of a crash. The data — spanning from a few seconds before a crash to up to a few seconds after — include such information as speed, seat belt use, air bag deployment and (important in acceleration probes) brake and gas pedal positions. If the data show a driver had his or her foot on the brake but the car still accelerated into a crash, it could help verify that the car, not the driver, was to blame.
NHTSA said last week that data from a Prius' black box, as well as other data from its diagnostic systems, showed that a woman who careened into a stone wall in Harrison, N.Y., was pressing the accelerator, not the brakes, and that a car defect was not at fault.
The data can be wrong
While the information proved useful in that case, the limited data being collected by black boxes mean they can help only so much in accident probes, or crash "reconstruction." The data can also be wrong if the car is defective, since EDRs rely on the same electronics that could have caused the problems in the first place. But data from multiple points in the car likely won't all be wrong.
Most crash investigations still rely on factors such as skid marks and deformation of the vehicles in the crash. That's why Mukul Verma, a former safety expert at General Motors, believes black boxes should be required.
"Today's cars are complex mechatronic (mechanical and electronic) systems, but reconstruction methods are still all mechanical and treat the car as a mechanical system only," says Verma, a consultant and professor. "Mandatory EDRs offer a way of catching up with the modern automobile."
He says black boxes could be redesigned to capture "fault codes" — error codes that vehicle computers supply to help mechanics diagnose and fix your car — for little cost. That, he says, would make EDRs more useful in seeing if vehicle malfunctions caused a crash.
NHTSA regulations are being phased in
A NHTSA standard, due to start phasing in this fall and be in place in 2012, does not mandate black boxes, but requires automakers that install them to disclose it and requires certain data, including brake and throttle position.
The Alliance of Automobile Manufacturers, which represents all major automakers except Honda, has petitioned NHTSA to postpone the rule's effective date to September 2013 because economic conditions delayed vehicle redesigns. Alliance spokesman Wade Newton said the group likely would not oppose making EDRs mandatory if NHTSA keeps the same data requirements. "That way development can continue unfettered and uninterrupted," he says.
If NHTSA proposes making boxes mandatory, it is expected to add a requirement that the data and tools to read the data be generally available.
Toyota executives testifying before Congress were admonished for limited accessibility of its vehicles' EDR data. Only Toyota could read the system and, until recently, it had only one machine in the U.S. for doing so. Accident investigators complained they rarely could obtain the data.
Toyota says it will have upgraded the software that can interpret EDR data by the end of April. NHTSA will have four of the Toyota machines used to extract EDR data by that time, and 150 more will be available in North America, Toyota says. Once these additional units are available, Toyota says, it will provide owners with access to recorder data from their vehicles upon request.
Toyota President Akio Toyoda said last month that the company would "make more active use" of EDRs because "we have recognized that we should enhance our information-gathering capabilities" and it would improve quality.
Ford Motor, General Motors and Chrysler have, by contrast, made their black-box technology available so that Bosch Diagnostics can make and sell systems to analyze their data. Anyone with the system can read them, including independent investigators and attorneys.
The other two of the six largest automakers in the U.S. market, Honda and Nissan, are more restrictive.
Nissan says it makes data from its recorders available to vehicle owners, law enforcement and NHTSA, upon request. The black-box function is part of a system it calls Consult. The data, such as EDR post-crash information, as well as things like why a check-engine light is on, can be obtained using an access code. Each of the 1,150 Nissan and Infiniti U.S. dealerships has at least one Consult tool, says Nissan spokesman Colin Price.
Honda says it is protecting its owners. "Our stance has always been that EDR data belongs to the owner of the vehicle, and we will download it at their request — or to comply with a court order," says Honda's Chris Naughton.
Honda and Acura dealers can access portions of the data with their diagnostic tools, but detailed analysis of EDR data currently can be done by Honda's research and development staff, Naughton says. In states that require it, independent garages can buy the tools from Honda.
Since EDRs began to be used, privacy advocates and civil liberties groups have raised concerns about how such data would be made available and used. At least 12 states have laws restricting access to EDR data, says Jim Harris, a Port St. Lucie, Fla., accident recontructionist.
The more access to data the better
Harris favors requiring all vehicles to have black boxes with standardized access to the data. Harris, who owns Harris Technical Services, says it already is costly for police and private investigators to buy the gear needed to access the data in the Detroit makers' vehicles.
"Whatever the outcome of the present hot issue, electronic failures likely to affect safety will happen in the future," he says. "We need to have some way of investigating those that is more reliable than today's technology."
Click here to view supplemental graphics: http://www.usatoday.com/money/autos/2010-03-29-blackboxes29_ST_N.htm
© Copyright 2007 USA TODAY, a division of Gannett Co. Inc.
GM Recall of Oshawa Shift
GM Recall of Oshawa Shift Good News, CAW President Ken Lewenza Says March 26, 2010, 2:06 PM EST
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Today's announcement of the recall of more than 600 laid off auto workers by GM is great news for the hard-hit industrial communities of Oshawa and Ingersoll, Ontario, CAW National President Ken Lewenza says.
"The auto industry has been on a roller-coaster ride in recent years and it's the workers who have absorbed most of the shock," Lewenza said. Job losses, shift reductions and plant closures have hit autoworkers hard from all major automakers in Canada and around the world in recent years.
"It feels great to be talking about some good news in the auto sector, for a change," Lewenza said. He stressed that the recall of these laid off workers is also positive for auto parts manufacturers and others who supply GM's auto assembly operations.
The addition of a third shift of production at the Oshawa car plant and increased production at the GM (formerly CAMI) plant in Ingersoll, Ontario signals a big boost to GM's market woes.
"Through no fault of their own, laid off workers and those who have remained at work in auto assembly plants and parts manufacturing facilities have suffered from tremendous uncertainty and hardship during the recent economic crisis," Lewenza said. "Today's announcement is finally some long awaited good news for workers, their families and these communities which have been so hard hit."
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Today's announcement of the recall of more than 600 laid off auto workers by GM is great news for the hard-hit industrial communities of Oshawa and Ingersoll, Ontario, CAW National President Ken Lewenza says.
"The auto industry has been on a roller-coaster ride in recent years and it's the workers who have absorbed most of the shock," Lewenza said. Job losses, shift reductions and plant closures have hit autoworkers hard from all major automakers in Canada and around the world in recent years.
"It feels great to be talking about some good news in the auto sector, for a change," Lewenza said. He stressed that the recall of these laid off workers is also positive for auto parts manufacturers and others who supply GM's auto assembly operations.
The addition of a third shift of production at the Oshawa car plant and increased production at the GM (formerly CAMI) plant in Ingersoll, Ontario signals a big boost to GM's market woes.
"Through no fault of their own, laid off workers and those who have remained at work in auto assembly plants and parts manufacturing facilities have suffered from tremendous uncertainty and hardship during the recent economic crisis," Lewenza said. "Today's announcement is finally some long awaited good news for workers, their families and these communities which have been so hard hit."
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