Weekly News Roundup
News about recalls, rebates and new cars from the automotive beat
Auto industry insiders are calling last month's sales slide "Black October," labeling it as one of the worst months ever for domestic automakers.And now they're saying that November and December may be as bad. Sales continue to slide, as buyers move away from large suvs and toward smaller, more versatile vehicles, while at the same time GM faces ramifications of a Delphi bankruptcy (Delphi is a major supplier of automotive parts for General Motors) and must also deal with the investigation of a potential $400 million misstatement of 2001 revenue. Ford meanwhile, must battle falling sales and an executive brain drain that may have put into danger the company's ambitious hybrid plans.
According to a Detroit News report, the two embattled automakers will soon begin shutting plants down and laying off thousands or workers, a result of lost market share, contracts with the United Auto Workers that keep them from closing plants at will, and factories that are not able to build other models to pick up production slack.
Of course, there's another way to pick up that production slack -- turn the factory into a Toyota plant. According to the Wall St. Journal, Toyota Motor Corp. is looking at increasing vehicle capacity in North America, and is considering Michigan -- which has lost thousands of GM and Ford jobs -- as the location of a manufacturing facility. Go figure: The quote-unquote domestic automakers are building cars in Mexico and Canada, while "supposed" import automakers are moving into shuttered plants in the north and opening new facilities down south. Pretty soon they'll tell us that you can actually run a car on hydrogen…
GM, of course, would be loath to see that happen - though they may not be able to do anything about it, except maybe launch another incentive. In an effort to counter its declining sales, General Motors has once again turned that old friend -- incentives -- to boost sales. Calling it a "Red Tag" program, the fire sale will be effective on 2005 and 2006 models through Jan. 3. Under the new program, dealers will post fixed maximum prices on vehicles. The plan covers most Buick, Chevrolet, GMC and Pontiac models, and should knock up to $4,400 off the sticker price. Industry analysts expect the Red Tag program to spark price discounts across the car industry, even by import automakers. Though GM initially said that they would offer no large scale national incentive program, you never say never -- and a 23-percent slide in October changed minds pretty quickly in Detroit. Just one question, however -- what's the real difference between the original sticker price and a Red Tag price?
GM has also rolled out its new 2007 Cadillac Escalade, one car that won't have any kind of red tag on it. GM hopes that it will be as popular as the outgoing model, and boost GM's dominance of the large SUV segment. General Motors now controls 60 percent of the large SUV market, which might be kinda like getting all the good deck chairs on the Titanic. The newest Escalade doesn't disappoint, however, with a new V8 engine, added safety features and a unique interior cabin. The Escalade debut comes on the heels of redesigns of the GMC Yukon and Chevrolet Tahoe.
Honda, meanwhile, has been humming along fine, cast in the SEMA Show glow and enjoying the sunny debut of its new Civic. That debut just got a little cloudy, however, though not enough to produce any kind of downpour. According to NHTSA, 25,000 Civic Sedans have been recalled due to improperly installed accelerator pedals. Apparently, they put the Civic Si pedals inside the sedan, and now everyone is driving like they belong on a race track. Buh-dump-bump! The recall begins on November 16, and affected owners can contact their local Honda dealer.
There are no accelerator pedal recalls for Ford -- just gas tank straps. In fact, the Dearborn company has just debuted its new 3.5-liter V6, which is great news for the automaker because it gives the Blue Oval boys a real engine with which it can battle import automakers. Up to now, the likes of Honda, Toyota and Nissan have been able to offer more horsepower and better fuel economy, a crippling blow as consumers get more savvy about powertrains. According to Ford, this new, high-tech V6 -- rated at 250 horsepower and 240 pound-feet of torque -- matched with a six-speed automatic transmission, changes everything. Ford says it matches the power and fuel efficiency of its Japanese rivals while achieving a PZEV rating -- partial zero emissions. The engine will make its debut on the new 2007 Lincoln Aviator and Ford Edge, crossover utility vehicles that Ford will unveil at the North American International Auto Show in January.
So maybe it's not a HEMI, but it sure beats the 203-horsepower wussy-boy engine stuck inside the Ford Five Hundred right now. As far as the world of HEMI goes, DaimlerChrysler finally pulled the plug on its 12.4-percent stake in Mitsubishi Motors last week, effectively ending a venture designed to grant the Euro-American giant access into the Asian car market -- but really only ended up delivering a fancy new Mitsubishi Raider pickup, and some shared future plans for vehicles such as the Dodge Caliber and Mitsubishi Lancer.
'Twas not enough.
Simple math says that of the $2.1 billion DCX gave to Mitsubishi, they got around $590 million back -- and gave Mitsubishi that truck. Though both companies swear that their collaborations will continue on a "project by project" basis, we wonder how comfortable the folks at DaimlerChrysler's Mitsubishi Product Development Department are feeling these days.
They could always do what Mia Quistorf did. Mia recently attended a Green Bay Packer football game wearing a self-made, Madonna-style cheese bra. The costume was a big hit, landing Mia and her friend on a segment of HBO's Inside the NFL. That turned out to be bad news for Mia. The next day, she returned to work to find that she had been fired for her display of a "dairy product" that was unbecoming of an employee.
Apparently, the owners were lactose intolerant. The good news? A local Ford dealer hired her, and cheese bras now sell on eBay for $24.95.