Battle of the beleaguered SUVs
Production of the ’02 Chevy TrailBlazer/GMC Envoy/Oldsmobile Bravada resumes April 19 in Moraine, OH, after a recall forced the plant to close. The 6,000 sport/utility vehicles (SUVs) built to date were recalled for a faulty suspension part. It was serious enough that GM asked owners to stop driving the SUVs immediately because failure of the lower control arm on the front suspension could cause a driver to lose control of the vehicle. Dealers towed the vehicles and provided loaners pending a fix. The problem turned out to be a bracket connecting the arm to the vehicle frame, which, if fractured, could cause the arm to separate from the frame. Repaired vehicles were being returned to customers washed and with a full tank of gas. And so the battle for high-volume midsize SUV supremacy is back on track. The freshly recalled TrailBlazer squares off against ’02Explorer, which is trying to distance itself from the Firestone tire recall that plagued its predecessor. Ford has put more volume on the road, but its delayed launch caused the rare overlapping of key new vehicle launches, making any downtime more costly in this head-to-head battle.
New Saturn chief no stranger to shop floor
Annette K. Clayton, 37, takes over the presidency of Saturn Corp., filling the vacancy left by Cynthia Trudell, who left suddenly March 29. Ms. Clayton joined GM as a co-op student with the Moraine, OH, assembly plant in 1983 and by 1999 was plant manager at GM's Oshawa, Ont., truck assembly plant. Her most recent assignment has been implementation ofCorp.'s global manufacturing system. She is responsible for Saturn's Spring Hill, TN, and Wilmington, DE, plants and will guide the entry of four new Saturn products in the next four years. Jill Lajdziak, vice president-Saturn sales, service and marketing, continues her present duties, reporting to Bill Lovejoy, group vice president-GM North America vehicles sales, service and marketing. Ms. Trudell traded in sedan sales for pleasure boats as head of the Sea Ray Group, a unit of Brunswick Corp.
A subdued Juergen Schrempp, chairman of DaimlerChrysler AG, keeps his job despite calls for his dismissal from angry shareholders at the April 11 annual meeting in Berlin, Germany. He tries to soothe with talk of how the $3.9 billion recovery plan for theGroup is on track to make money in 2002 with a 4% profit margin for 2003. He says cost reductions for parts in 2001 already have been attained. He tells 10,800 shareholders of first quarter losses of $715 million to $893 million, and $400 million to restructure Motors Corp. and another $297 million to take AB Volvo's stake in MMC's commercial truck unit to expand DC's commercial vehicle market share in Asia. The 3.3% brings DC's stake in MMC to 37.3%, with the option to take full control in 2003. Dividend checks of $2.08 per share are approved and the meeting, that cost $9 million to stage, ends with the passage of everything the board sought.
New IRS suspension for Expedition and Navigator
Motor Co. will add independent rear suspension (IRS) to its Ford Expedition/Lincoln Navigator line, WAW has learned. It mimics IRS as a new feature on ’02 Ford Explorer/Mercury Mountaineer. That coincides with the addition of an optional fold-flat, third-row seat that required a lower floor, meaning the vehicle's solid-axle suspension had to go. Expedition, introduced as a ’97 model, will get its first redesign next year when it will be sold as an ’03. The current model has a third-row seat of the fold/tip/stow variety. With IRS, it could accommodate a fold-flat seat and still seat nine. Explorer can carry seven with its third-row seat. The redesign comes none too soon, as slow sales force Ford to cut a shift at the Michigan Truck Assembly Plant in Wayne, MI.
confirms worst — losses are double forecast
Mitsubishi Motors Corp. wraps up its fiscal year with a $2.21 billion loss — substantially more than the $190.8 million loss for the previous year. A special charge of more than $1 billion is necessary to cover the $229.24 million cost of recalling more than 2 million vehicles last year and a $818.73 million restructuring plan that cuts employment, production, platforms and material costs. The fate of the plant in Adelaide, Australia, is to be decided by June, production of the luxury Proudia and Dignity models in Japan cease at the end of the month, and a plant in Nagoya, Japan, will close in September. On a more positive note, a remodeled Lancer sedan launches in North America next month and the new Z compact car, developed with DaimlerChrysler, will be produced at Mitsubishi's Okazaaki, Japan, plant. Mitsubishi expects to break even in the fiscal year ending March 31, 2002.
‘Car guy’ lands top job at Covisint
Cynics may have figured that Covisint, the e-business Internet exchange being created by the Big Three, would go the way of other failed dot-coms: nowhere. Not Kevin English, who becomes the first chief executive, president and chairman of Covisint after an exhaustive search. Mr. English, 48, comes to his new post with optimism to spare. “This is a potentially huge company with a great business plan,” Mr. English says. “The opportunity is a three-way win for the auto companies, the suppliers and the consumers, ultimately.” He's held several positions in the technology sector and worked most recently as managing director of e-commerce at Credit Suisse First Boston and as CEO of TheStreet.com, a publicly traded Internet information hub for financial news. So what he lacks in automotive experience he makes up with Wall Street savvy. He vows that Covisint will stay in Michigan. A self-described “car guy,” Mr. English says he looks forward to buying a Cadillac Escalade upon arrival in Detroit.
GM goes into COMBATT
The U.S. Army hopes to announce sometime next year which automaker or automakers it will use for its Commercial Based Tactical Truck program — an effortCorp. recently joined that is aimed at developing a pickup truck for cargo and troop carrying. If all goes as planned, COMBATT will go into production during the ’05 model year, says Dennis Wend, director of National Automotive Center in Warren, MI. Ford Motor Co. and DaimlerChrysler Corp. have been involved since the late 1990s, while GM opted out to concentrate on the launch of its Chevy Silverado/GMC Sierra fullsize pickups. The Army wants to replace or refurbish its 110,000-unit light tactical fleet of mostly Humvees. “COMBATT could get 50% of that,” says Mr. Wend. With a budget cut since the end of the Cold War, the Army seeks to pass along expenses such as research and design to automakers, as well as production of less-expensive pickups. Some industry insiders question whether the COMBATT program will ever see the light of day, pointing to the seven-year, $2 billion contract AM General Corp. was awarded in late 2000 to continue making the Humvee. Some feel elements of the COMBATT program will be used in the development of the next-generation Humvee, codenamed A4. One insider says the Army is committed to Humvee. “There is no program to buy other vehicles.”
New Jeep Liberty priced to compete
DaimlerChrysler Corp. is pricing the new Jeep Liberty sport/utility vehicle aggressively, defying critics who said its costly engineering would prove a competitive disadvantage and skeptics who said it could not keep affordable company with the Cherokee it replaces. The all-new ’02 Liberty starts at $17,035, including a $585 destination charge. That compares to the base Ford Escape at $18,575, including a $540 destination charge. Others in the segment include the ’01RAV4 which starts at $l6,695 with destination charges and the CR-V at $18,750 with the $440 charge included. The Liberty Sport, at $18,545, comes with a 150-hp, 2.4L Power Tech I-4 with a 5-speed manual transmission and a number of creature comforts. The vehicle also features a patented rear flipper glass/swing gate system. Top-of-the-line Liberty Limited Edition 4×4 (3.7L V-6) retails at $22,720 before destination charges. Liberty is the first Jeep with side air bags ($390). The new Jeep goes on sale this summer, and Cherokee production ceases in mid-2001. Ford Motor Co. says it is the segment leader, offers superior ride with its four-wheel independent suspension, and it is unfazed by the pricing of the Liberty at $1,500 below the Escape.
Sachs: Chassis business to triple
Sachs Automotive of America plans to triple its market share for chassis components and modules in North America during the next four years, giving it a shot at moving to the No.2 spot, says Julio Caspari, president of Sachs North America Chassis Div. “Based on current customer contracts, we see our share growing from 6% to 22% in the U.S., Canada and Mexico.” The supplier is expanding production capability for chassis components at its plants in Florence, KY, and Guadalajara, Mexico, with an investment of $30 million. “Our deliveries of shock absorbers and suspension struts will increase from 6 million to 12.5 million, which will place us in a leading position in the NAFTA market,” Mr. Caspari says. Volvo Trucks North America Inc. will source chassis shock absorbers for its U.S.-built big rigs from the German-based company in the midst of a globalization drive. About 35% to 40% of Sachs' business currently is domestic. Chassis accounts for nearly 40% of sales and is the fastest growing sector, outperforming powertrain, vibration control and gas springs/steering vibration dampers. Sachs hopes to make North American inroads with its Nivomat vehicle-leveling system that automatically corrects vehicle level based on payload weight — a solution to automakers trying to provide better ride and handling characteristics for sport/utility vehicles without reducing payload capacity. With conventional shock absorbers, large payloads can cause the rear of the vehicle to lower. The Nivomat system is an option on DaimlerChrysler Corp.'s minivans, the GMC Yukon/Yukon XL and Chevy Tahoe and Suburban.