Lincoln to drop Mark VIII, next T-bird will be built in Wixom

Cats may have nine lives, but the run of Ford Motor Co.'s luxury coupe, the Lincoln Mark, will stop at eight. Ford announces production of the Mark VIII, the car marketed as a "jet fighter on wheels," will cease later this year at its Wixom, MI, assembly plant. That, say supplier sources, will free up capacity for the completely revamped and more upscale Thunderbird, which will be based on the same DEW98 platform as the LS6 and LS8, Lincoln's import-fighting sedans due early in 1999. The Mark may be back in the 2003 model year.

GM shops Korea

Like tourists in Korea's famed Itaewon district, General Motors Corp. says it is looking for bargain buys in Southeast Asia's second largest car market. A spokesman confirms GM is in talks centered on acquiring a stake in Daewoo Group, but GM also has talked with Kia Motors Corp. about taking an equity stake. GM says it probably will be several weeks before anything comes to fruition in Korea. Press reports have indicated GM would pour some $5 billion into Daewoo, but some insiders say that number is too big an investment, given Korea's economic situation.

Ford denies new Kia rumor

Meanwhile, Ford officials deny Korean press reports the automaker plans to take over ailing Kia Motors. Reports in January indicated the Korean government was favoring a plan to sell its share in Kia to Ford and allow Ford to assume management control of the automaker. A Ford spokesman says the company's position on Kia has not changed. Kia's financial crisis began months ago. Ford is interested in protecting its 10% equity in Kia and has told the government so, says the spokesman. But there have been no discussions about Ford managing Kia, he says.

Lincoln Mercury ditches Motown

Time will tell whether it makes a difference, but Ford's upscale Lincoln Mercury Div. is setting up shop in Irvine, CA., because as divisional General Manager Jim O'Connor puts it, Southern California's "trendsetting culture will help nurture the continued development of unique, robust brands that can play more independent roles." Sort of like Sharon Stone being cast as a nun. Navigator clearly has helped shift the paradigm. But to carry this off, the new Cougar and, especially, the upcoming LS6 and LS8 will have to deliver some big-time box office numbers.

Big Three earn $16.4 billion

It may not get any better than this. Led by Ford's $6.9 billion net income for 1997, the Big Three automakers posted an all-time best $16.4 billion collective profit for the year. So far, their exposure to the Asian currencies' collapse has been limited. GM profits were a near-record $6.7 billion and Chrysler piled up $2.8 billion. The bounteous margins on large pickups and sport/utility vehicles will be under greater pressure from new competing products. General Motors Corp.'s U.S. sales incentives rose to an average $1,148 per vehicle in the fourth quarter, up from $739 a year earlier.

State Farm sues Ford, UTA over alleged ignition switch defects

State Farm Mutual Automobile Insurance Co. is suing Ford Motor Co. and United Technologies Automotive Inc. on charges that they concealed defects in an ignition switch that led to an unknown number of car fires and millions of dollars in insurance claims. State Farm is seeking compensation for its costs of repairing or replacing vehicles affected by the faulty switches between the fall of 1988, when State Farm alleges Ford and UTA learned of the defect, and 1996, when Ford recalled 7.9 million vehicles that used the ignition switch in question. State Farm estimates those costs at about $200 million. The Bloomington, IL-based insurer also charges Ford built 26 million vehicles with the same switch. Ford attorneys deny the charges, saying that each vehicle fire needs to be assessed on a case-by-case basis.

Hyundai will launch minivan and SUV in U.S. by 2000

Despite the pressures of an economic crisis in its home country, Korean automaker, Hyundai Motor Co. Ltd. will introduce its first minivan and sport/utility vehicle in the U.S. in the next two years, says Hyundia of America (HAM) President M.H. Juhn. The front-drive minivan goes on sale in 1999, while the SUV will debut in 2000. An all-new replacement for the Sonata midsize sedan will be introduced later this year. Updated versions of the Accent subcompact and the Tiburon sporty coupe are coming next year. Relative to other Korean automakers, Hyundai is not a basket case. The company trimmed its management ranks by 30% over the last two years. More recently it announced it will cut total employment by an additional 11% and consolidate 14 divisions into seven. Separately HAM, U.S. sales arm, reduced its staff by 11 people, and Hyundai Motor Finance Co. will cut another 11 jobs as it cuts the number of U.S. dealers it will finance from 220 to 75. Hyundai is represented by 470 dealers in the U.S., most of which use other sources of financing. That number is not expected to change significantly, a company spokesman says.

Toyota plans to double Prius output in April

Hard economic times apparently have not hurt sales of Toyota Motor Corp.'s new Prius electric/gasoline hybrid. The company received 3,500 orders for the c ar between mid-December and mid-January, more than triple what Toyota marketers projected when they introduced the car last October at the Tokyo Motor Show. Beginning in April, Toyota will double production to 2,000 units per month. Priced at 2.15 million Yen (about $16,600), Prius emits about half the level of carbon dioxide of a similar gasoline-powered car because it averages about 66 mpg (3.6L/100 km). Toyota, which is spending more than $40,000 to produce each of these cars, has said it will begin selling Prius in the U.S. by 1999.

Shake-up at UTA

In a move aimed at solidifying its position as a major player in the sharp-elbowed automotive interiors market, United Technologies Automotive has shifted Richard Sloan from president of its European operations to president of its Interior Systems International unit, replacing Ed Northern. Volker Heuzeroth ascends from senior vice president of European operations to succeed Mr. Sloan. "Ed Northern came to UT Automotive at a very difficult time for our interiors operation," says UTA President Scott Greer. "It is no secret that our interiors business has presented major challenges over the last several years." Strategically, UTA has not been as aggressive as such competitors as Lear Corp. and Johnson Controls Inc. in positioning itself to produce larger interior modules.

Detroit Diesel has high hopes for smaller diesels

Unveiling its "next generation" diesel engines, Detroit Diesel Corp. positions itself to capitalize on the industry's push for more fuel-efficient power over the next decade. Vice Chairman Timothy D. Leuliette says DDC intends to establish diesel engines as a viable interim - and potential long-term - alternative successor to gasoline internal combustion engines. "To say we will triple our volume by the year 2000 is not unreasonable," says Mr. Leuliette. "Today this business is a $200- to $300-million business. It could be a $1-billion business." Diesels in North America remain negligible, but "by 2005 or 2006, we could be at 20% to 25%" market penetration, he says. DDC says it currently can produce a diesel engine capable of meeting ultra-low emission vehicle standards. Critical to such efficient and "green" operation is the use of a common-rail direct-injection fuel delivery system and sophisticated oxidation catalysts.

Eaton posts 95% gain in 4th-quarter earnings

After selling its worldwide Appliance Controls business for $310 million and the majority of the stock of AIL Systems Inc. (defense business segment), Eaton Corp. reports $129 million in net income for the fourth quarter of 1997, up 95% from a year ago. The Cleveland, OH, supplier ended the year with $410 million in net income, up 17% from 1996 (see Pipeline, p.57). Quarterly earnings statements for other suppliers were beginning to arrive as WAW went to press. Here are a few: Donnelly Corp., $5.2 million in net income for its second fiscal quarter, up 31.9% from a year ago; Johnson Controls Inc., $65.3 million, up 22.9%; GenCorp, $22 million, down 5.9%; PPG Industries, $159 million, up 4.6%.