Monthly Archives: January 2012

Japanese Suppliers Yazaki, Denso Plead Guilty of Price Fixing

The two-year price fixing sentences would be the longest imprisonment imposed on a foreign national for a Sherman Act antitrust violation. The fine amounts and prison sentences are subject to court approval and the potential influence of the U.S. State Department, which based on previous actions, cares little – if at all – in my opinion about competitive aspects of the U.S. auto industry or its effects on workers and the U.S. economy. In fact it can be argued that since the end of World War Two, State has actively pursued policies that strengthen offshore competitors of U.S. firms at the expense of the U.S. middle class. Continue reading

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Mopar Debuts Third Factory Built Hot Rod off Chrysler 300

Still working its muscle car roots, the Mopar 300 has a 363 horsepower (hum the Charger was 370?) 5.7-liter Hemi V8 engine and a now dated five-speed automatic transmission. A change from a 3.06:1 to a 3.91:1 final-drive means zero-to-60 mph times in the low 5-second range, according to Chrysler, same as the Charger. Continue reading

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Mazda Tribute Recall Follows Ford Escape Defect for Fires

Mazda is recalling 2001-2002 Mazda Tribute SUVs because the master cylinder cap can leak brake fluid, corrode an underhood ABS wiring connector and possibly start a fire. The recall follows one announced by Ford two weeks ago for the same safety defect on Escape SUVs, which mechanically are the same as Mazda Tributes. Like Ford, Mazda said it will tell owners to park their vehicles outside until parts are ready. Continue reading

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Hyundai, Subaru and Lexus Lead in NADA Satisfaction Survey

The survey, conducted twice a year by the National Automobile Dealers Association, rates dealer sentiment in three areas: franchise value, automaker policy decisions that affect the dealership and the automaker’s field staff who visit dealerships. Continue reading

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BMW Conducts Second Smallest Recall in NHTSA History

In third place with a Bronze medal resides Toyota, the reason for the renewed emphasis on following recall regulations to the letter, after Toyota was fined in 2010 millions of dollars for covering up safety effects. Continue reading

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PBGC Says American Airlines Workers Should Worry About Pensions and Medical Care – So Should Taxpayers

The Pension Benefit Guaranty Corporation has called out what it says is misleading statements to American Airlines employees by its management about their pension plans under a bankruptcy reorganization. “American Airlines is telling their workers and retirees not to worry, … Continue reading

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Pep Boys Sold to The Gores Group for $800 Million

The proposed transaction has already interested at least one legal firm trolling for business. Tripp Levy, a securities law firm, immediately put out a notice to investors that there are “potential claims of breaches of fiduciary duty and other violations of state law” against the board of directors of Pep Boys in connection with the sale. There likely will be more such allegations from firms looking to garner legal fees.

However, the agreement does provide for a 45-day “go-shop” period and contains customary closing conditions, including receiving the approval of Pep Boys’ shareholders and all applicable regulatory approvals. A special meeting of Pep Boys’ shareholders will be held following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission. Continue reading

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Ford Motor Company Posts 2011 Profit of $8.8 Billion

As a result of Ford’s 2011 financial performance, profit sharing payments will go to 41,600 eligible U.S. hourly employees. Under the UAW-Ford collective bargaining agreement, Ford’s North American pre-tax profits of $6.2 billion will generate approximately $6,200 on a full year basis. Based on first-half 2011 results, about $3,750 was paid per employee, which was distributed in December 2011. For the second half of 2011, about $2,450 per employee will be paid in March. Continue reading

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Honda at 800,000 Hybrids as Toyota Reaches 400,000 in Europe

In the U.S. alone Toyota has 1,000,000 Prius owners. Moreover Toyota has built a substantial environmental reputation as the global leader in hybrid vehicles with sales of Toyota and Lexus hybrids now well over 3,000,000 vehicles.

In spite of clear fuel economy benefits and high U.S. fuel prices, hybrids remain a tiny portion of the U.S. auto market – a little over 2% of sales because mainstream buyers refuse to pay a premium amounting to several thousand dollars over a comparable gasoline-fueled car. Plug in hybrids with expensive lithium ion battery packs will compound the problem. The Prius plug-in coming this year adds another $4,000 to the cost of the standard Prius hybrid. Continue reading

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Volt Fire Hearings Pits Ideologues versus Engineers

In the end how you view this low-voltage Congressional short circuit – with lots of smoke but no fires – depends on how you view Obama Administration actions that used taxpayer-funded subsidies to encourage production of the Volt. These include $151.4 million in stimulus funds for LG Chem, which produces lithium-ion polymer battery cells for the Volt, and $105 million given directly to GM, as well as an end-user federal tax credit of up to $7,500 per Volt purchased. Such subsidies will likely be hotly debated for all industries during the election. Continue reading

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Nissan to Build $2 Billion Plant In Aguascalientes Mexico

The announcement comes as the United Auto Workers union is developing plans to once again try to organize transplants in the United States, where Nissan has two other plants. The UAW has been unsuccessful in previous organizing attempts, and its lack of international alliances with other unions is a decided disadvantage.The lack of exports from UAW organized Detroit Three plants is preventing the creation of middle class jobs in the U.S. – now clearly the issue in the upcoming presidential election. Continue reading

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U.S. New Auto Sales to Drop in January for Third Month

Retail transactions are thought to be the most accurate measurement of underlying consumer demand for new vehicles, so the New Year starts for automakers with mixed results. A weak recovery of some sorts is underway, but auto sales are nowhere near their pre Great Recession levels where the retail SAAR was routinely above 14 million units. Continue reading

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Chrysler Opens Manufacturing Academy in Warren, Michigan

WCM is the creation of Chrysler owner Fiat, which began developing, implementing and refining manufacturing operations in 2005 with the purpose of reducing waste, increasing productivity and “restoring dignity” to the employees. Continue reading

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GM Names Carat its Global Media Planning and Buying Agency

Carat, the main media agency for GM in Europe, was in competition with the Starcom unit of the Publicis Group, which handled media in the United States. Also involved in the bidding were Universal McCann, part of the Mediabrands division of the Interpublic Group of Companies, which handled GM media in South America, and Omnicom Media Group. Continue reading

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Hewlett-Packard Fined $425,000 for Not Reporting Defective Lithium Ion Batteries that Seriously Injured Consumers

The controversy is of interest to the auto industry since its use of lithium ion batteries in electrical vehicles and hybrids is growing at exponential rate, with millions of battery packs soon to be on U.S. roads. The National Highway Traffic Safety Administration closed its investigation of fires in Chevrolet Volt EVs last week. Nevertheless many consumers remain wary of the emerging technology and it remains to be seen if the Volt brand is damaged. Continue reading

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