Assembly concerns have promptedMotor Co. to delay until April the availability of a new V-8 for its ’02 Explorer sport/utility vehicle.
The delay is the result of “plant issues,” not engineering woes,says. As part of a renewed push to ensure flawless vehicle launches, assemblers at Explorer plants in St. Louis and Louisville, KY, are being asked to “concentrate on the V-6” to ensure “solid” builds. Production of V-8 models will begin later this month.
The second-generation Explorer was expected to be in showrooms in late February or early March. It comes standard with a 210-hp 4.0L V-6. The new optional 240-hp 4.6L V-8 offers an increase of 25 hp compared to its 5L predecessor. V-8s accounted for only 14.9% of ’00 model Explorer production.
The measured “cadence” of the ’02 Explorer's rollout is a strategy used by automakers such asMotor Corp., a spokesman says, adding the approach well could become a standard launch process for high-volume Ford products that feature complex technology — such as the “safety canopy” rollover protection system that will be offered in Explorers beginning in November.
In 2000, Ford sold a record 454,000 Explorers — despite negative publicity linked to the Firestone tire recall. This year, both the St. Louis and Louisville plants are expected to operate at full capacity, and Ford believes calendar year sales — including Sport Trac — “could be pushing 500,000.”
No Olds Models at Saturn, But Chevy May Be Interested
Corp. isn't going to change its mind about dumping Oldsmobile, even though sales improved in January. And the possibility of transferring Olds vehicles to other GM divisions is less likely, too, with Saturn Corp. saying it's not interested.
“A year from now we'll be bringing out the replacement S-Series. We've got to keep our focus on the products that we're bringing to market,” says Jill Lajdziak, Saturn's vice president of sales, service and marketing. “(There's) no opportunity in the other direction.”
Interest in salvaging some, if not all, of Olds intensified recently because the division posted a 3.9% sales increase in January, only its second gain in the past 12 months. It's rare for a brand to record sales increases after its demise has been made public. GM is phasing out Olds through 2003.
Helping to spur sales are numerous incentives, including customer cash, low annual percentage rates, deferred payments and extended warranties (60 months/60,000 miles). “It's certainly driven traffic into (Olds) showrooms,” says Paul Ballew, GM general director of market and industry analysis.
While GM execs rule out reversing the Olds decision, speculation persists that some of the models will wind up at another division — the latest rumor being that Chevy wants to sell Alero. But Saturn insists it's not interested, even though Olds is in segments where Saturn is not represented, such as midsize sport/utility vehicles, where Olds has Bravada.
Spirit of Ford: It's No Disney World
From the “good ideas poorly executed” category comes news that the Spirit of Ford Automotive Adventure Center in Dearborn, MI, is shut down and will become a conference center as part of the Ford Motor Co. campus.
What went wrong? Well, the price. And the lines. And the assumption that people would pay good money to suffer through a glorified infomercial.
Ford's second mistake was the content. The Spirit of Ford could be seen in total in less than two hours. Rates fell from $9 to $6 for adults, from $7 to $4 for kids ages 5-12 and from $8 to $5 for seniors. Ford employees and their families initially saved $1 off regular admission (Yippeee!) but later got in free.
Still, prices were too high. So Ford gave away free passes at the Detroit auto show in January. Big crowds arrived, and people had to wait in line two hours for the center's biggest attraction, Turbo Tour. This worthwhile video theater had seats that zoomed and jerked to follow the path of an unfinished car on an assembly line, and later a completed car on a test track.
The Spirit of Ford never saw its second anniversary. It was meant to mark the beginning of Ford's celebration of its June 17, 2003, centennial. Didn't anyone learn from the Flint Auto World debacle?
Olds Intrigue Dies With Loss of V-6
Corp. will halt production of its 3.5L Twin Cam V-6 engine sometime in the ’02 model year, putting an end to the Olds Intrigue, insiders tell WAW.
“I would guess (3.5L Twin Cam) production will end around June or July (of 2002),” says a GM source, adding that the stockpiled engines likely will be enough to handle foreseeable Intrigue demand to the end of the year. The 3.5L V-6 is the sole powerplant offered in the Intrigue.
Until GM announced the phaseout of the Oldsmobile division, the underutilized 3.5L Twin Cam was scheduled to add a volume-enhancing, high-performance 3.7L variant for the Pontiac Grand Prix GTP in ’03. “The Olds volume was the base volume,” for the 3.5L Twin Cam, says the source, “and the Grand Prix application was going to be icing on the cake. The engine really needed that extra application.”
The early halt of 3.5L Twin Cam output also will mean that the GM Powertrain plant in Livonia, MI, can quickly assign the engine's agile manufacturing equipment to production of the pending Northstar V-8 designed for longitudinal placement in rear-drive Cadillacs beginning in the ’03 model year.
to Build V-8 in Alabama
The boom in truck sales in the U.S. is leading to another trend — the shift of V-8 engine production from Japan to North America.
Motor Co. Ltd. earlier announced it would make truck V-8s at its Decherd, TN, plant beginning in 2003, and now Toyota Motor Corp. reveals it will build a new plant in Huntsville, AL, to produce V-8s for its Tundra fullsize pickup.
The $220 million facility will be operational by summer 2003, with capacity for 120,000 units annually. Construction of the 330,000-sq.-ft. (31,000-sq.m) plant begins this spring on half of a 400-acre (161 ha) plot recently purchased by the city of Huntsville. Toyota says the plant initially will employ 350 and create 1,000 spin-off jobs.
The facility will supply engines to Toyota Motor Mfg. Indiana Inc., which builds the Tundra in Princeton, IN, a five-hour drive. The V-8 also powers the new Sequoia fullsize sport/utility vehicle (SUV), and Toyota is talking to Alabama state representatives about expanding capacity to supply engines for the SUV as well. No decision has been made.
The new project represents the first time Toyota will make V-8s outside Japan.
Toyota also recently disclosed it would expand its Buffalo, WV, 4-cyl. and V-6 engine plant to make powerplants for the upcoming Matrix crossover vehicle and Lexus RX300 to be built in Canada. By 2003, Toyota will have the capacity to build 1.6 million engines and 1.45 million light vehicles annually in North America.
Hummer on Schedule; Jeep Files Suit
Construction on the AM General assembly plant in Mishawaka, IN, that will be home to General Motors Corp.'s Hummer H2 sport/utility vehicle is on schedule, with the building's shell set to be complete in March, an AM General spokesman tells Ward's.
The project is about one-third complete. Framing is under way for the general assembly area and should be finished within two months. Tooling installation then will commence and require most of the remainder of 2001. Some pilot production likely will occur prior to year's end. The H2 is scheduled to go on sale in 2002.
AM General, which sold the Hummer brand name to GM in 1999, expects to begin filling soon the 1,500 job openings required to run the 600,000-sq.-ft. (56,000-sg.-m) facility.
United Auto Workers Local 5 will represent hourly personnel slated to churn out 40,000 Hummer H2 units annually at full production. The spokesman says GM has not indicated plans for volume beyond that or for a second product. GM is known to be working a smaller H3 model.
Meanwhile, GM was fending off a lawsuit filed by DaimlerChrysler AG over the design of the H2. DC claims the H2's grille is “virtually identical” to the well-known grille for Jeep, which will compete directly with H2. GM filed its own suit, alleging that DC waived claims on the grille long ago.
The suits followed a phone conversation in which GM CEO Rick Wagoner and DCC President Dieter Zetsche failed to resolve the dispute.
DCC Gives Ground on Price Cut
DaimlerChrysler Corp.'s hard line edict to suppliers to cut prices 5% may be eroding.
Although President Dieter Zetsche continues to insist DCC isn't softening its stance on the price cuts demanded as of Jan. 1, supplier sources say they have been successful in brokering deals involving more lenient timetables.
“We will talk and listen (to suppliers),” Mr. Zetsche says at February's Chicago Auto Show. “But we have a clear program of what we want to achieve.” He says he understands the resistance, but expects DCC's good supplier relations to “prove itself in more difficult times.”
But Neil DeKoker, managing director of the Original Equipment Suppliers Assn. of Troy, MI, says that in some cases DCC is in fact backing down.
“Some (suppliers) settle for offering 3% as of January, 2% later on and 1% later on,” Mr. DeKoker says. “There's a range of agreements being done individually.”
Other suppliers have continued to flatly refuse the 5% cut and a few have stopped shipment of parts to DCC plants. Both suppliers and DCC officials have been tightlipped about the stoppages.
In those cases, DCC could find new suppliers, Mr. DeKoker says. “Some of the meetings (between DCC and suppliers) are fairly threatening in that regard,” says Mr. DeKoker. “The credibility of DCC management is questionable for some suppliers. And that's too bad. You don't need to threaten suppliers with future business.”
No Plans for Rendezvous in China
U.S. executives still won't rule it out, but GM President Philip Murtaugh insists there are no plans for production of the Buick Rendezvous in China.
Mr. Murtaugh says GM China considered Rendezvous production earlier in 2000 when the vehicle was a hit at the Beijing Auto Show, but since has put a halt to the program.
“To be very honest, we think that the market segment has not developed in China as well as people had expected,” Mr. Murtaugh says. “We already have the minivan (Pontiac Montana-based Buick GL8) there, and the Rendezvous would be a great complement to the minivan if that segment was big enough. But the growth really hasn't been there yet.”
Mr. Murtaugh also denies reports that the company soon plans to replace the Chevrolet Blazer with the TrailBlazer at its venture with Jinbei Co. in Shenyang, China. “Our plans are to continue production on the Blazer. If you had to make a prediction, yeah, we're probably going to introduce the TrailBlazer at some point in time, but right now it'd just be a prediction.”
PETA Draws Line in Sand
Where's the beef?
It doesn't matter with a casting process developed by General Motors Corp. that uses pork and turkey byproducts to bind sand together to create molds for automotive parts.
GM licensed the technology to Hormel Foods Corp. in 1998 and the Austin, MN-based company is expected to begin offering GMBOND in the near future.
While GMBOND is hailed for its environmentally friendly attributes, it is generating objections from the People for the Ethical Treatment of Animals (PETA), which says it will encourage a boycott of GM products, even though the automaker, itself, isn't planning on using the process. PETA also is considering resuming the public protests it used against GM in 1993-1994 — such as disruptions at auto shows — that ultimately forced the carmaker to halt crash tests involving animals. “It probably shouldn't be a surprise that GM is not taking the high road on an ethical issue,” says a PETA spokeswoman.
GMBOND, is made from the protein collagen, says GM research scientist Rich Schreck, who helped develop the substance in the early 1990s as the industry began moving from iron to aluminum castings. GM since has opted for lost foam casting over GMBOND for its aluminum components, and in order to salvage the latter licensed it to Hormel.
GMBOND is biodegradable, non-toxic and more cost-effective than other commercial binders, and the sand used can go to a general landfill. Using it would prevent foundry employees from being exposed to hazardous materials, and no costly emission control equipment would be needed. In addition, the casting process is faster and core removal requires less hammering and jarring, enabling more intricate components with thinner walls and narrower passageways for lighter weight and improved performance.
OnStar Off Mark, DCC Says
DaimlerChrysler Corp. says proprietary telematics systems such as General Motors Corp.'s OnStar in-vehicle communications service are flawed and not the future of wireless telecommunications and Internet services for vehicles.
It is the wrong approach, consumer demand is not there yet, and a business case cannot be made to offer the technology in-brand vehicles, explains Karenann Terrell, DCC director of Business Connect for its E-Connect Platform.
She says DCC is not lagging behind the competition; Mercedes-Benz pioneered telematics in Europe and its system is standard equipment on ’01 models. DCC also recognizes the huge potential of telematics with worldwide revenue estimated to grow from $4.2 billion this year to $47.2 billion in 2010.
But, “the first guy is not always right,” says Ms. Terrell who used to work on OnStar for GM. She believes proprietary systems such as OnStar or Wingcast, which is the joint venture of Ford Motor Co. and Qualcomm Inc., are limited because they are restricted to subscribers and designed for a vehicle, not a person.
The future of telematics is a more cost-effective open system accessible from multiple service providers using a smart card or similar tool equipped with a Java chip (the language of the Internet), says Ms. Terrell. Every passenger would have his personal profile card programmed to download music, e-mail and seat adjustments.
However, all that remains three to five years from reality, Ms. Terrell says. DCC won't provide details but says it will introduce interim steps, beginning with an ’02 model. “We're not going to create an OnStar,” Ms. Terrell promises.
New Products Show Mercury Here to Stay, Execs Say
A new chapter in the saga of Mercury's revitalization got under way with the Feb. 12 production launch of the ’01 Grand Marquis LSE.
The LSE, built at the St. Thomas, Ont., assembly plant, is one of two Grand Marquis spin-offs and one of five vehicles to debut at last month's Chicago auto show. Also bowing were ’01 Grand Marquis Limited, a pair of limited edition ’01 Cougars — the ZN and C2 — with significant styling and comfort enhancements, and the 300-hp ’03 Marauder (see story p.84).
Mercury's aggressive offering underscores repeated denials that the storied brand is in jeopardy.
“Mercury is alive and well,” says Lincoln-Mercury President Mark Hutchins. “I've only said that about a million times.”
Questions arose with the brand's exclusion from Ford Motor Co.'s Premier Automotive Group. About the same time, General Motors Corp. axed Olds and speculation about Mercury took on a life of its own, says brand executive Ben Gibert.
“There was nobody internal with Ford that was talking about it,” says Mr. Gibert. “There was just so much hubbub in the press, people were forced to answer a lot of questions about it.”
Mr. Gibert says his new position flies in the face of the rumors. Appointed Jan. 1, he is Mercury's first director dedicated to product development.
Losh: No Push Out Door
When J. Michael Losh retired Sept. 1 as chief financial officer at General Motors Corp., it ended months of speculation that he would depart. But Mr. Losh tells WAW that he was not nudged out the door after 36 years with GM.
“I had been CFO for six years — that's a long tenure,” Mr. Losh says. He says he originally wanted to retire June 1, 2000, but that was delayed while GM looked for a replacement.
“I had agreed to stay for a while on a month-to-month basis. Finally in August, I said, ‘Hey guys, I'm a good sport. I'm happy to help you through this transition. But I'm not going to continue to live my life on a month-to-month basis.’”
In December, GM named former Ford Motor Co. CFO John Devine as Mr. Losh's replacement.