DCC kills plans for big SUV - again

Cost cutting at DaimlerChrysler Corp. has killed plans to produce a fullsize sport/utility vehicle (codenamed DR74) off the Dodge Ram platform for '04. That has fueled fears in Windsor, Ont., home of the Pillette Road Truck Assembly Plant where it was to have been built, that the facility will not receive the full $1 billion investment announced in June. But despite DR74's demise, Pillette still is expected to be revamped in preparation for a high volume (130,000-unit) Dodge product. The original plan was to triple the size of the facility to 2.7 million sq.-ft. The expectation was capacity of 160,000 units annually, of which 50,000 to 60,000 would be SUVs and the rest crew or regular cab Ram pickups. The decision to drop DR74 is said to be a proactive cost-cutting move. DCC officials say they are looking at the $35 billion to $40 billion product planning budget for the next five years and "redefining the scope of some programs." There are no "wholesale cancellations of platforms planned," just an eye to do more with less, DCC officials say.

Ford takes $500 million hit from tire recall

The Firestone tire fiasco took a $500 million bite out of Ford Motor Co.'s earnings in the third quarter, preventing the company from posting record profits and ending its string of 17 quarterly increases. Ford reported earnings of $888 million, off $71 million from year-ago's results. Chief Financial Officer Henry D. Wallace says he expects the tire recall to be wrapped up in mid-November, and that related charges in the fourth quarter will be kept to a minimum. About half the $500 million hit is related to downtime at Ford truck plants in order to divert tires to the recall effort. The other half is related to increasing tire production at other suppliers and in getting replacements to customers. North American automotive earnings were down $98 million to $769 million, even though unit sales were a record 1.1 million. Ford also continued to bleed in Europe and South America.

Finally, Buick gets a small car for China

Shanghai General Motors Automotive Co. Ltd. (SGM) sails into China's burgeoning small car arena with its newest entry. The joint venture between General Motors Corp. and Shanghai Automotive Industry Corp. announces its much-anticipated small car, the Buick Sail, after years of trying to secure a small-car deal in China. The 1.6L Sail, based on the Opel Corsa, will be tailored to Chinese road and market conditions but equipped with modern conveniences such as dual air bags and antilock brakes. The base model will carry a price tag of about $12,000 and targets families, a segment with enormous growth potential. The first pre-pilot Sail is slated to come off the line in December, joining production of a large sedan and minivan at the Shanghai plant. Sales of the Sail are slated to begin in the first half of next year.

Satum counting heavily on SUV

With interest in its bread-and-butter small cars waning and its L-Series midsize sedan a huge disappointment, Saturn Corp. is relying heavily on its all-new sport/utility vehicle (SUV) to turn its fortunes around. The SUV goes on sale in the fourth quarter of 2001 as an '02 model with a base price under $20,000. Saturn is looking to sell 50,000 units in the first year. Critics say Saturn Corp. should have rolled out an SUV earlier, instead of the L-Series, which debuted last year and is selling at half the predicted 200,000 volume. But Saturn officials argue the company isn't too late to the "cute-ute" segment. Sales of compact SUVs are expected to nearly double by 2005, says General Motors Corp. Chief Executive G. Richard Wagoner Jr.. Plus the Saturn SUV includes a number of features that set it apart from competitors, including dent-resistant polymer body panels, a continuously variable transmission and side curtain air bags. The SUV will be built at Saturn's Spring Hill, TN, assembly plant.

Death rattle from Daewoo Motor Co.?

Only a few months ago the world's largest automakers were fighting for the right to buy it. Now, despite strong products in key markets across the globe, Korea's Daewoo Motor Co. Ltd. is starting to make a death rattle. Its banks have shut off the automaker's life support system, refusing to grant it any more credit, and they are demanding sweeping changes. But insiders say such efforts without any money will not save the sinking carmaker. Creditor banks have forced all 135 of Daewoo Motor's senior executives to resign, and some 12,000 factory employees missed their paychecks in October. Plus, the plants have no cash to enable them to import vital parts such as engines and transmissions and are progressively ratcheting down production. Now, even with the General Motors Corp./Fiat SpA alliance offering some hope as it begins a new round of due diligence, creditor banks are unwilling to budge.

Can Richard Hatch survive without all-wheel-drive?

Richard Hatch says he REALLY likes his new Pontiac Aztek. There's just one problem: he hasn't actually taken delivery of his "sport recreation vehicle" yet. It seems the million-dollar star of TV's Survivor, upon requesting an all-wheel-drive Aztek, was flatly told by General Motors Corp. that the vehicle won't be available with the option until at least December. Mr. Hatch makes the comment last month at the opening of the Michigan Manufacturing Technical Center in Plymouth, MI, a facility devoted to teaching suppliers the art of lean manufacturing. Himself some 20 lbs. (9 kg) leaner since his days as a castaway on Survivor island, Mr. Hatch tells reporters that he likes the "unusual" styling and practicality of the Pontiac Aztek, based on what he's seen of the vehicle so far. GM's Pontiac Div. was a major sponsor of the show.

Chrysler plant expands to build Mercedes 5-speed

DaimlerChrysler AG is investing $455 million to expand its Indiana Transmission Plant in Kokomo, IN, to produce a 5-speed automatic transmission developed by Mercedes-Benz. It is the first major component sharing between the Chrysler Group and Mercedes-Benz products in a much-needed bid to pare costs. The W5A580 rear-drive transmission went into production at the Hedelfingen, Germany, plant for the '95 model year. The 600,000-sq.-ft. (55,740 sq.-m) expansion in Indiana breaks ground late this year with production (400,000 units annually) slated to begin in 2004, in time for use in the Chrysler group's rear-drive family of LH sedans. The 2-year-old Indiana plant employs 1,700 on two shifts. They produce 400,000 45RFE rear-drive automatic transmissions for Jeep and Dodge trucks, a figure that will double next year.

CAMI to end car production, idle 500

CAMI Automotive Inc., the joint venture of General Motors Corp. and Suzuki Motor Corp., notified its Canadian workforce last month that as many as 500 will be laid off in the spring of 2001, reducing the workforce to 1,800. The plant, located near London, Ont., will cease production of the Chevrolet Metro/Suzuki Swift, essentially eliminating the single car shift at the plant. The 200,000-unit-per-year plant has been running about 86,000 on its two-shift truck line and 35,000 on a single-shift car line, with a 2,300-person workforce - a 10% cut since '96. CAMI is being restructured in response to sales that have been slower than hoped and the need to become more competitive, plant officials say. The expectation is a new small light truck will be added for the '04 model year. A candidate is the Chevy Traverse crossover SUV, to be built on a truck frame, and due to bow in '04.

Alliance's new idea: `intelligent stability and handling systems'

Remember all the consumer confusion over antilock brakes? History may be on the verge of repeating itself with the latest electronic automotive safety system - stability control. Hoping to head off controversy, the ABS Education Alliance, a non-profit organization backed by ABS and stability system suppliers, is launching an education campaign designed to familiarize car buyers with today's stability systems. Apparently many consumers are confused by the more than 20 different brand names out there for the same basic technology now offered on some 54 vehicles in the U.S., the alliance says. Audi AG and Mercedes have ESP (Electronic Stability Program), BMW AG goes with DSC (Dynamic Stability Control), General Motors Corp. has StabiliTrak, Active Handling System and PCS (Precision Control System) and Ford Motor Co. uses IVD (Interactive Vehicle Dynamics) and AdvanceTrac. The alliance is proposing that automakers, suppliers and media use "Intelligent Stability and Handling Systems" when referring generically to the technology.

Get lean or die, Day tells Tier 2s

Small and midsize suppliers need to adopt lean manufacturing in order to survive, Freudenberg-NOK Chief Executive Joseph Day tells attendees at the grand opening of the Michigan Manufacturing Training Center in Plymouth, MI. The new facility aims to educate sub-tier suppliers on how to eliminate waste and increase reliability. MMTC President Wilbur (Butch) Dyer says the center has adopted Freudenberg-NOK's GROWTTH (Get Rid Of Waste Through Team Harmony) initiative, a program that has helped the supplier become the North American benchmark for lean systems. The initiative is based on the Toyota Production System. Mr. Day, who is a member of MMTC's Automotive Advisory, says lean systems that will reset the supply chain's clockspeed must be adopted in order to offer consumers the much-ballyhooed five-or 10-day car. But while many automakers and Tier 1s are embracing a lean approach, Mr. Day says the industry still has a long way to go. "For every supplier adopting lean manufacturing, there are literally thousands of suppliers who still just don't get it," he says.