The Automotive News Week in Review - February 26, 2010
Buyers Wary As More Recalls Announced
Two more automakers added their troubles to the growing pile of recent recalls this past week. While neither of the issues has so far manifested itself in a fatal or life-threatening accident, the problems are still serious enough to warrant a preemptive recall.
Chrysler has been forced to call back over 300,000 minivans built between 2005 and 2006. Specific models include the Chrysler Town & Country, the Dodge Caravan and the Dodge Grand Caravan. The reason for the recall? A defective crash sensor that may limit the response of the vans' safety systems in the event of a collision. Chrysler has stated that the failure of this sensor triggers a warning light on the dash, which makes it likely that many of the failed components have already been replaced by concerned owners. That being said, the company is taking no chances, and each minivan fitted with this sensor will see it replaced free of charge by dealerships regardless of whether it has been dealt with in the past or not.
Hyundai's recall is somewhat more surprising, given that it affects the 2011 Hyundai Sonata - a vehicle which has been on sale for only a short period of time. The Hyundai Sonata's issue relates to a door latch which may not close properly should passengers interact with the door lock in a certain sequence while opening the door. 46,000 cars are affected by the recall, but only 1,300 of those have actually made it into the hands of consumers in America at this time.
Although most of the automotive world thought that the sale of Hummer by General Motors to Chinese conglomerate Sichuan Tengzhong Heavy Industrial Machines Co., Ltd was a done deal, it was announced this week that HUMMER would in fact not be changing hands. With most of the legwork on the sale agreement having been done during the summer months of 2009, all that remained to complete the transaction was to obtain the blessing of the Chinese government. After several extended deadlines and delays, it became clear that this permission was not forthcoming. Sources close to the deal have said that the government was concerned about the environmental implications associated with building a lineup of fuel-hungry sport-utility vehicles in its domestic market.
According to GM, HUMMER will now be put out to pasture much in the same way that Pontiac and Saturn have been, with inventory to be liquidated and dealerships to be closed. Some media outlets have claimed that GM may be reviewing past offers it had received for HUMMER from other suitors, but the company has so far maintained its position that the failed sale means the end of the line for the green movement's lightning rod.
On a happier note, the sale of Saab to Spyker Cars, a Dutch company previously focused on the supercar market was officially completed this week. This marks Saab as the only one of the four discontinued GM brands to actually make it out of receivership and find a second life under a new corporate parent. Saab Spyker Automobiles, as the company is now known, intends to expand the brand's offerings to include a more balanced mix of vehicles.
Test Out A Tesla - For A Price
A large contingent of the car buying public remains wary, if not skeptical of the potential for pure electric vehicles to replace gasoline cars and trucks as practical daily driving choices. In order to bridge this credibility gap, electric car company Tesla is now offering a special lease program on its attractively-styled Tesla Roadster, a vehicle which has received intense media attention over the past few years. The lease is for three years and 30,000 miles, and it releases drivers from having to make a long-term commitment to what is still perceived as a largely unproven technology.
There is a price to be paid, however, for sampling the battery-powered convertible. Specifically, the Tesla lease requires a monthly payment of at least $1,658. This represents an amount that most people would typically associate with a much more exotic automobile, or a luxury landmark such as Rolls-Royce, but given the stated MSRP of the Tesla Roadster ($111,005) the lease payment doesn't seem that far off of the mark. In order to score this lowest of lease rates, a down payment of $12,453 is also required. It remains to be seen whether the ecologically avant-garde will be willing to pony up big bucks for the privilege of spending a few years behind the wheels of a two-seat electric sports car.
Cummins Hit With Huge Fine
For many diesel pickup truck owners, especially those who are fond of the Dodge brand of heavy-duty rigs, the name Cummins has been synonymous with stump-pulling power and excellent reliability. Unfortunately, the Indiana-based Cummins Inc. has now found itself on the hook for a substantial financial penalty relating to the environmental impact of its diesel engines.
Specifically, Cummins was charged with having shipped over 570,000 diesel engines without having any pollution control equipment installed on them. The violations took place between 1998 and 2006, and the complaint, which was heard in the U.S. District Court for D.C. goes on to state that 197 tons of harmful emissions were released into the air by these engines. Even though Cummins will only be forced to recall the 405 engines that didn't have the proper emissions gear fitted on to them before they were re-sold by machinery and truck manufacturers, it will also be forced to pay up $2.1 million in fines. The amount represents a settlement negotiated between Cummins and the Environmental Protection Agency, which is responsible for enforcing the Clean Air Act.