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Recent Automotive News
Articles...
GM offers interest-free loans on all
'02 models
DETROIT, Sept 19
(Reuters) - General Motors Corp. <GM.N> said on
Thursday it will offer interest-free loans until Sept. 30 on all its
remaining 2002 model year vehicles, following a new move by Ford
Motor Co. <F.N> to lure buyers to its dealers.
GM, the world's largest
automaker, said it is now offering loans with no interest for up to
five years on all its 2002 models, including its Saab cars. It also
boosted cash rebates on a number of models.
Similar offers helped boost
its sales in July and August to near-record levels, and prompted
much of the industry to respond with incentives of its
own.
But GM pared back on the
deals earlier this month, saying it had low inventories of 2002
vehicles and wanted to focus on selling 2003 model year vehicles
instead. GM Vice Chairman and Chief Financial Officer John Devine
told analysts earlier this week that September's sales will not
reach August's highs, in part because GM was "basically sold out" of
2002 models.
Earlier this month, Ford
said it would let customers buy 2002 model vehicles and make no
payments to January 2003. Such offers had been uncommon in the auto
industry. A GM spokeswoman said the automaker wanted to be
competitive with the "very aggressive" programs from other makers.
WASHINGTON, Aug 14 (Reuters)
- U.S. demand for crude oil and
petroleum products fell in July from a year earlier, and demand was
lower for the first seven months of 2002, the American Petroleum
Institute said on Wednesday.
Petroleum deliveries, not
including exports, last month averaged 19.638 million barrels per
day (bpd), down 1.4 percent from a year ago, API said in its monthly
U.S. petroleum report.
During the first seven
months of 2002, petroleum deliveries dropped 1.3 percent from the
same year-ago period to 19.514 million bpd.
Deliveries, which are a
good indicator of demand, are calculated by API to reflect petroleum
products moved from refineries and bulk storage to wholesale and
retail suppliers.
Gasoline continued to be
the only petroleum product in July that had positive year-on-year
demand growth, rising 1.6 percentto an average 9.165 million bpd.
Gasoline use is up 2.7 percent for the first seven months of this
year.
Low pump prices and growth
in personal income helped push gasoline demand higher, API
said.
July demand for jet fuel
was down 4.5 percent because of weakness in air travel, distillate
was off 0.9 percent and residual fuel oil was down 27.4 percent as
large industrial uses burned more less expensive natural gas in
their boilers, API said.
On the supply side,
domestic crude oil production increased for the ninth month in a
row, jumping 1.7 percent in July from ayear earlier to an average
5.848 million bpd.
Oil output in the lower 48
states was up 1 percent, and Alaskan production posted a larger 5.5
percent year-on-year increase in July, even though the state's oil
output fell below 1 million bpd for the first time since last
October.
July oil imports were down
4.2 percent to 9.135 million bpd.Total imports of crude oil and
refined petroleum products fell 1.8 percent to 11.533 million bpd,
the eighth straight monthly declined and the lowest level for July
in five years, API said.
DETROIT, Aug 12 (Reuters)
- Ford Motor Co. said on Monday it had
settled a class-action lawsuit over late fees on vehicle leases for
as much as $87 million, depending on claims from 1.8 million
customers nationwide.
The company said in a
quarterly filing with the U.S. Securities and Exchange Commission
that it had settled a class-action lawsuit filed in August 2001 in
Maryland against its vehicle financing arm, Ford Credit.
The lawsuit by two Mazda
owners claimed Ford Credit's late fees on leases exceeded 6 percent,
the maximum rate allowed under Maryland law.
Ford said it mailed notices
of the settlement to 1.8 million customers in July, and that if all
submitted claims the maximum amount the automaker would have to pay
is $80 million.
Ford also said it agreed to
pay about $7 million to the attorneys in the case; a hearing for the
final approval of the settlement is set for Sept. 20.
A Ford Credit spokesman
could not immediately be reached for comment; other Ford
spokespeople declined to comment. The company provided no further
details about the suit in its filing.
The company separately
announced that Chief Executive Bill Ford Jr. and Chief Financial
Officer Allan Gilmour had certified the company's quarterly report.
Ford to cancel Excursion after 2004
model
NEW YORK, July 31 (Reuters)
- The Ford Motor Co.<F.N> has
decided not to build a second generation of the Excursion sport
utility vehicle, the New York Times reported Wednesday citing people
close to Ford's future product program.
The Excursion, seven feet
tall and able to seat a softball team, was oft criticized as the
auto industry's most visible symbol of sport utility vehicle excess,
the paper said, and is expected to be discontinued at the end of the
2004 model year.
Introduced in 1999 as a
2000 year model, the end of production will mean the Excursion
lasted just one generation.
Sarah Tatchio, a
spokeswoman for Ford, declined to confirm to the Times whether the
company would drop the 19-foot vehicle, which gets 10 miles a
gallon, is too long to fit in many garages and takes up two
conventional city parking spaces.
She did confirm the car was
part of Ford's 2003 product range.
Budget car rental files for
bankruptcy
NEW YORK, July 29 (Reuters)
- Car-rental company Budget Group Inc.
<BDGPA.OB> succumbed to its heavy debt burden and filed for
bankruptcy protection on Monday, as the recession in business travel
that has plagued the sector since Sept. 11 claimed another
victim.
Budget's Chapter 11 filing
followed the bankruptcy last November of rival ANC Rental Corp.,
parent of the Alamo Rent-A-Car and National Car Rental
brands.
Daytona Beach,
Florida-based Budget, which was expected to file for bankruptcy,
said it has secured $750 million of loans to pay for new cars, along
with $100 million of additional funding to keep its operations
running as it reorganizes.
Budget, which faces
billions of dollars of debt, filed for Chapter 11 protection in the
U.S. Bankruptcy Court in Delaware.
It listed $4.05 billion of
assets and $4.33 billion of liabilities and said the bankruptcy
filing covered it and some of its domestic subsidiaries.
"Despite the success of our
efforts to increase productivity and rationalize costs, the impact
of Sept. 11 and the continued recession in the travel sector has
left Budget Group with a level of nonvehicle debt greater than our
operations can reasonably support," Budget's Chief Executive Sandy
Miller said in a statement.
Budget needed the $750
million of vehicle financing to increase and upgrade its fleet of
Ford Motor Co. <F.N> vehicles to compete in the peak summer
travel months.
The company does not expect
to lay off any workers or close any locations because of the
bankruptcy filing, Budget spokeswoman Kimberly Mulcahy said on
Monday.
Its largest creditor is
Wells Fargo & Co.'s <WFC.N> main unit Wells Fargo Bank, as
trustee for about $430 million of debt, according to court papers.
Most of its largest creditors are banks.
Standard & Poor's
rating agency cut its corporate credit rating for Budget Group on
Monday afternoon to "D" from "SD," or selective default.
Budget, with 6,500 car and
truck rental locations worldwide, had been in talks to be bought by
travel and real estate firm Cendant Corp. <CD.N> for $100
million, sources close to the talks said.
Budget's bankruptcy filing
on Monday made no mention of any deal with Cendant. A spokeswoman
for Cendant said the company had no comment on the
matter.
With the $100 million of
debtor-in-possession financing, Budget said day-to-day operations
should remain intact as it restructures the company.
Bill to update U.S. energy policy inches
forward
WASHINGTON, July 25 (Reuters)
- Senate
and House lawmakers today moved forward with broad energy
legislation, approving language to boost energy efficiency in public
buildings, help poor families pay their energy bills and raise oil
production on Indian lands.
Negotiators are racing
against the clock to hammer out legislation to overhaul U.S. policy
for the first time in a decade. Lawmakers have only a few weeks
until Congress adjourns to tackle the controversial provisions,
including proposals to drill in an Alaskan wildlife refuge, reform
the U.S. electricity market and triple U.S. ethanol use.
Republican Rep. Billy
Tauzin of Louisiana, who chairs the Senate-House conference
committee working on the legislation, said he wants the panel to
complete its work by September 30.
That would give the full
Senate and House about a week to debate and vote on final energy
legislation before Congress' scheduled October 4
adjournment.
"This conference is moving
as swiftly as possible," said Tauzin, who added that lawmakers would
work "around the clock if necessary" to finish the energy
bill.
During Thursday's meeting,
Republican Rep. Joe Barton of Texas unveiled a proposal to prohibit
so-called "wash" electricity trades like those carried out by CMS
Energy <CMS.N>, Duke Energy Corp. <DUK.N> and other
firms. Wash trades are the target of several federal investigations
to determine if they worsened California's power crisis of 2000-01
and if companies used the deals to inflate trading volume and
influence prices.
Negotiators on Thursday
cleared 40 minor provisions of the bill that took congressional
staff several weeks to work out out. Lawmakers agreed to:
* Raise spending to help
pay energy bills of poor families from the current $2 billion
annually to $3.4 billion each year through 2005.
* Boost the overall fuel
mileage of the federal government's car and truck fleet by 3 miles
per gallon by 2005.
* Make permanent the U.S.
emergency stockpiles of Gulf Coast crude oil and Northeast heating
oil.
* Create an office of
Indian energy within the Energy Department to help site oil, gas and
other energy facilities on tribal land.
* Reduce energy use in
government building by 2 percent annually through 2012.
* Increase spending on home
weatherization for poor families to $325 million in 2003, $400
million in 2004, and $500 million in 2005.
FATE OF ALASKA DRILLING UNCLEAR
When lawmakers return in
early September from their month-long summer recess, negotiators
will address the bill's controversial issues.
Tauzin ordered
congressional staff to work through the summer recess to settle
difficult parts of the bill related to ethanol, energy tax credits,
stricter gasoline efficiency standards and climate change
initiatives.
The single most contentious
issue is whether to allow drilling in the Arctic National Wildlife
Refuge (ANWR).
The Republican-led House
voted to give oil companies access to the refuge in its energy bill,
but the Democratic-controlled Senate agreed to keep ANWR closed to
drilling.
The Bush administration
wants to tap the refuge's possibly 16 billion barrels of oil to help
reduce U.S. dependence on foreign crude imports. Environmentalists
argue there is not enough oil in the refuge to justify disrupting
the area's polar bears, caribou and other wildlife.
Senate Majority Leader Tom
Daschle has said a final bill that allows ANWR drilling will be
rejected by the Senate.
Last week, a senior Energy
Department official involved in negotiations suggested the
administration may be able to accept a final bill that kept ANWR
closed as long as the legislation increased overall U.S. oil and gas
supplies.
U.S. automakers are expected to report 2nd-quarter
profits
July 15, 2002 - For the first time in almost two
years, the traditional American automakers are all expected next
week to report profits from day-to-day operations in April, May and
June.
But it might not last long.
Summer plant shutdowns and new-model changeovers
usually cut into third-quarter production and profits.
Ford Motor Co., for one,
is expected to lose money again in the July-to-September quarter,
according to First Call/Thomson Financial, which surveys
analysts.
Despite confidence that the automakers will post
profits, stock prices took a beating all week as concerns emerged
that the weak economic recovery will lead to slowing sales and that
escalating incentives will continue to cut profits.
This has been especially true at General Motors
Corp. It has been on a roll with strong results in quality and
efficiency studies, which have helped support a strategy of
aggressive discounts to boost sales.
Despite continued losses in Europe and around the
world, the automaker is expected to say Tuesday that it earned $1.3
billion from operations, almost double last year's results.
Continued gains in high-profit pickup and
sport-utility segments should produce $1.2 billion in profits from
North American operations, according to Wendy Beale Needham, who
studies the industry for Credit Suisse First Boston
(CSFB). Financing arm GMAC will produce the rest.
The stock lost about 10 percent last week in part on
concerns over GM's growing pension deficit. Its U.S. pension account
is underfunded by $9 billion, which could more than double to $19
billion this year, says a recent analysis.
But David Bradley of J.P. Morgan Securities
Inc. said those fears are overblown. At worst, they should cost
stockholders $7 a share, he said, but since May, the price has
fallen more than $21.
Three prominent analysts downgraded GM from buy to
hold during the week, before Bradley reiterated his buy rating.
But shares fell $1.12, or 2.4 percent, to close at
$46.60 Friday.
Shares at 9-year low
Ford has been hit even harder, losing almost 20
percent of its value last week alone, even as it prepares to
announce its first quarterly operating profit in a year. Shares
closed the week at $12.61, a nine-year low.
Ford is expected to report on Wednesday that it
earned almost $500 million from operations in the quarter. Whether
that is really an improvement from last year depends on what you
count.
A year ago, Ford reported a loss from operations of
a little more than half a billion dollars. But that included a
$3-billion hit -- $2.1 billion after taxes -- to replace potentially
faulty Firestone tires on pickups and sport-utility vehicles. If not
for that, the Dearborn automaker would have earned about $1.5
billion.
Chrysler's turning point
The Chrysler Group had promised a break-even
2002 or a modest operating profit, and when it posted one in the
first quarter, Chief Operating Officer Wolfgang Bernhard declared:
"This is the turning point."
Thanks to aggressive cost-cutting, even Saul Rubin
of UBS Warburg, a critic, expects the Chrysler Group to earn
several hundred million dollars this year -- almost $250 million in
the second quarter, before interest and taxes.
First Call does not survey analysts on their
expectations for the Auburn Hills arm of DaimlerChrysler AG, which
makes Dodge, Jeep and Chrysler brand vehicles.
But the parent company in Stuttgart, Germany, is
expected to report growing profits thanks to the Chrysler
contribution.
Rubin upgraded DaimlerChrysler from sell to hold on
Friday, because the stock price had fallen to the mid-40s, where he
had set his price target.
On Friday, the shares gained 5 cents to close at
$44.90.
Many of Michigan's big parts makers also are seeing
growing profits and falling stock prices. Delphi Corp., Visteon
Corp. and ArvinMeritor Inc. all raised their profit
outlooks in late June, but have seen their stock prices fall this
week with the rest of the stock market. Lear Corp. and
American Axle are also expected to show strong operating
profits.
But stock prices are falling, in part on concerns
that automakers will squeeze suppliers for further price concessions
to make up for rebates given to consumers.
July 11, 2002 - Saturn service leads J.D. Power
survey - Saturn, the General
Motors Corp. division that pioneered no-haggle pricing and cozy
customer relations, has become the first non-luxury nameplate since
1986 to score highest in the annual J.D. Power and Associates
Customer Service Index. "It shows you don't have to be a luxury car
make to satisfy customers," said Steve Witten of J.D. Power. The
last non-luxury brand to top the list was Honda in 1986.
Saturn replaced Toyota Motor Co.'s Lexus division as the
nameplate with the best customer-satisfaction index. Lexus fell to
No. 3 behind Nissan Motor Co.'s Infiniti division.
Cadillac was ranked fourth and Volvo fifth.
DETROIT, June 27 (Reuters) - Ford
Motor Co. <F.N> has recalled 250,283 Windstar minivans to fix
a potentially hazardous brake problem and 25,876 cars from its Volvo
subsidiary with faulty cooling fans that could trigger engine fires,
U.S. auto safety regulators said on Thursday. Quality problems have
dogged the world's No. 2 automaker ever since the Firestone tire
crisis that erupted two years ago. The recall of the Windstar was
the second announced by the U.S. National Highway Traffic Safety
Administration since last month. NHTSA said the latest recall,
involving 1995 and 1996 model year Windstars, was due to the
improper installation of brake lines on some of the vehicles, making
them susceptible to corrosion or leaks that could increase the risk
of a crash. The Volvo recall involved S80 sedans produced between
April 1998 and May 1999. NHTSA said the vehicles' engine cooling
fans were subject to overheating in hot climates, posing the risk of
a fire.
Forester
gets good rating in bumper test
WASHINGTON -- Bumpers on
three of four small sport-utility vehicles performed poorly in
5-m.p.h. crash tests performed by the insurance industry, according
to results released Tuesday.
The 2002 models of the Honda CR-V and Land Rover
Freelander performed the worst. The Honda sustained $6,607 in damage
and the Freelander $6,470 in four crash tests by the Arlington,
Va.-based Insurance Institute for Highway Safety. Also getting a
poor rating was the 2002 Saturn VUE, which suffered $3,389 in
damage.
The only vehicle in the batch to get a "good" rating
was the redesigned 2003 Subaru Forester, which sustained only $1,421
in damage.
The ratings -- good, acceptable, marginal and poor
-- are based on how much damage is done to the bumper and other
parts of the vehicle.
The low-speed testing is designed to imitate the
impacts that often occur in commuter traffic and parking lots:
front- and rear-into-flat barrier, front-into-angle barrier and
rear-into-pole tests.
The Freelander and the CR-V have spare tires mounted
on their tailgates that extend beyond the bumper. When the vehicles
were stuck from behind, the tire was driven into the rear body.
Land Rover spokesman Bill Baker said consumers like
the door-mounted spare tire because it allows greater inside storage
space. He said the Freelander is made of premium materials and has a
complex design that makes it more expensive to repair, but the cost
is comparable to other luxury vehicles.
"Our first concern with the design of any Land Rover
is protection for the vehicle occupants during a crash situation,"
he said. "While crashworthiness, four-wheel drive system
capabilities, overall utility and cost of repairs are related,
occupant safety always comes first."
Honda spokesman Art Garner said: "The top priority
has got to be passenger protection. In the CR-V's case, it's got the
highest five-star rating that the government gives."
"We wish we had done better in the IIHS test, and
we're going to take a look at that," he said, "But the top priority
has got to be passenger safety and that's certainly where the CR-V
shines."
The 2003 Subaru Forester owed its "good' rating to
energy-absorbing foam in the front and rear bumpers. The Forester
also has two aluminum bars to absorb energy, while most vehicles
have just one.
GM Raises U.S. Incentives on Midsize Cars
General
Motors Corp. said on Thursday it has raised cash rebates on its
midsize cars by $500 to $2,500, days after reporting a surprising
drop in U.S. vehicle sales for May. Sales of GM's aging lineup of
midsize cars were hit hard in May, while Toyota Motor Corp. and
Nissan Motor Co. Ltd. both recorded strong gains for their newly
redesigned midsize cars, the Toyota Camry and the Nissan Altima. The
new sales incentives include such cars as the Pontiac Grand Prix,
Chevrolet Malibu, Chevrolet Impala and Buick Century. Earlier this
week, GM raised rebates on its full-size pickup trucks and midsize
sport-utility vehicles following poor May sales results. GM raised
rebates on midsize SUVs by $750 to $1,750. Rebates on most
four-door, full-size pickups were raised to $1,500 from $1,000,
while rebates on other full-size pickups were raised from $2,000 to
$2,500. GM's higher pickup truck and SUV rebates bring them in line
with those offered by Ford Motor Co. However, Ford offers to combine
rebates with cheap interest rates on loans. The Chrysler arm of
DaimlerChrysler AG is offering a rebate of $1,500 on most Ram
pickups, along with larger rebates on its midsize SUVs, and an
extended warranty on its engines and transmissions. Reuters,
June 6, 2002
U.S. Auto Sales Drop in May Despite Recovery
Automakers
reported Monday that U.S. auto sales declined about 5.7 percent in
May, falling well below industry forecasts and hitting their weakest
pace this year as shoppers eased spending on new cars and trucks.
But even as they reported sharp drops in sales, there was some good
news from General Motors Corp. and Ford Motor Co. GM said it was
raising its earnings outlook and Ford said it was setting its
third-quarter North American production estimate at a robust 940,000
vehicles, a 16 percent increase over a year ago. Still, GM, the
world's largest automaker, said its May U.S. vehicle sales dropped
by a surprising 12 percent while Ford, the No. 2 automaker, reported
an 11.5 percent fall in sales. With all automakers but Isuzu Motors
Corp. reporting, May's sales ran at seasonally adjusted annual rate
of about 15.6 million. Most industry analysts had predicted that May
auto sales of cars and light trucks would come in at a seasonally
adjusted annual rate of about 16.8 million vehicles, compared to a
robust 16.7 million rate in the same month last year and a 17.4
million rate in April. Honda Motor Co. Ltd. and Volkswagen AG were
among those reporting lower U.S. sales. High-volume automakers
bucking the downward trend included the Chrysler arm of
DaimlerChrysler AG , which saw U.S. sales rise 4 percent, Toyota
Motor Corp. and Nissan Motor Co. Ltd. Reuters,
June 3, 2002
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