Subject: North American Auto News 5/8/95 (1/2)

From: [email-masked] (CKB)
Date: Fri, 12 May 1995 16:08:43 GMT

* ---> 05/05/95 15:34 May 8 Edition                                 00 07/03/95
This post is a service of a Ford employee, taken from our mainframe computer 
system.  Enjoy!

Kent Booker
Manufacturing Systems
Detroit, Michigan

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1  Japanese set to fix seat belts.  Agreement near with US, involves millions
   of vehicles.
   Detroit News | p 1E | 95:05:03

US safety regulators are expected to announce one of the biggest recalls in
history.  The announcement is expected to have eight Japanese automakers
fix the seat belt buckles and / or release buttons in over 8 million 1986-
1991 vehicles that include cars, pickup trucks, minivans, and sports
utility vehicles (SUVs).  Although most of the vehicles to be recalled are
made by Japanese carmakers, some of the vehicles are made by the US Big 3.
The Japanese automakers involved are American Suzuki Motor Corp, Daihatsu
Motor Co, Honda Motor Co, Isuzu Motors America Inc, Mazda Motor of America
Inc, Mitsubishi Motor Sales of America Inc, Nissan North America Inc, and
Subaru of America Inc.  An issue that the regulators and automakers have
yet to resolve is whether the automakers will have to notify the vehicle
owners of the safety problems.  Some companies, including Honda Motor Co,
want to fix the seat belts without having to declare that the belts are
defective, but the National Highway Traffic Safety Administration (NHTSA)
wants the automakers to tell the car owners that the belts are defective.
According to the regulators, the release buttons on the belts can crack and
jam the latch, leaving the buckles susceptible to unlatching during a
crash.  Regulators and the auto industry are debating how to repair the
belts.  The recall could cost up to US$1 billion and include over 15
million belts.  The belts were manufactured by Takata Inc, a Japanese
supplier headquartered in North America.  No deaths have been reported from
the defective product, but NHTSA has received 539 complaints involving 47
injuries.

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2  A conservative approach for new GM venture.  Spied on the street.
   Detroit News | p 1D | 95:05:03

Judging from a photograph of a heavily disguised prototype, the General
Motors Corp 1997 redesigned plastic bodied minivans "will be far more
conservative and mainstream than the current 'DustBuster' design."  The
redesigned models will be updated with steel body panels, standard dual air
bags, and an optional fourth door.  They can be purchased in either short
or long wheelbase (no dimensions given).  GM's German subsidiary, Adam Opel
AG, and Chevrolet have been engineering the redesign, and Opel will make
its own variants to sell in Europe.  According to GM suppliers, Chevrolet
will drop the Lumina minivan nameplate in favor of a Venture badge.
Includes a front three quarter photograph of the prototype.

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3  GM's new marketing chief seeks clarity amid muddle of overlapping car
   lines.  GM redefines Olds strategy.  GM shortens product cycle.
   Wall Street Journal | p A3, 5 | USA Today | p 2B | Automotive News | n
   5602 p 1 | 95:05:01 | 95:05:01 | 95:05:01

General Motors Corp will shorten its product cycle by replacing its models
every 4 or 5 years, from the current 7 or 8 years, according to Ron
Zarrella, GM's new marketing director (vice president and group executive
for North American sales, service and marketing).  Zarrella cites a GM
survey from late 1994, which indicated that 35% of people looking for new
cars weren't considering GM models.  He feels that many GM models have
failed to be updated enough to keep up with the competition.  Each
marketing division will get two new models annually, and some of GM's 77
vehicle product lines will be cut.  According to Zarrella, GM's Buick
division will make "near luxury" vehicles to target "baby boomers in their
50s," and Cadillac will try to reestablish itself as a "world standard" to
compete with BMW AG, Lexus, Jaguar, and Mercedes-Benz AG.  It appears that
Zarrella doesn't want to give Cadillac a sport utility vehicle, which the
division has been requesting.  He would also like to see GMC be set apart
from Chevrolet's "mainstream truck business."  Along with Cadillac,
Chevrolet will also try to increase its global divisions by expanding car
and light truck sales outside of North America.  Chevrolet will continue to
make high volume, entry level vehicles; Pontiac will make sporty vehicles;
Saturn will keep its small car line; and Oldsmobile will be redefined as
the "step up" for Saturn, making medium priced cars that are larger than
Saturn cars.  GM light trucks are suffering from a lack of North American
factory capacity.  Zarrella feels that light trucks could account for more
than 45% of the vehicles GM sells, up from the most recent estimate of 31%.
The industry average is 43%.

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4  Abandoned GM plant in Van Nuys may be developed.
   Los Angeles Times | p 1B | 95:05:02

General Motors Corp is expected to sell its Van Nuys plant, which has been
abandoned for almost 3 years, to one of four potential buyers, which are
all from Southern California.  The 100 acre site is being offered for US$30
million, but one plan would have GM sell the property at a loss to the
Valley Jobs Recovery Group (VJRC), a non profit group set up by Los Angeles
Mayor Richard Riordon.  A private brokerage appraised the GM plant at US$25
million, and if GM sells it to VJRC for US$20 million, it could count the
US$5 million loss as a charitable donation and write it off as a tax
deduction.  VJRC would then sell the land to one of the four developers.
GM could also sell the property directly to one of the developers.  The
developers all say that they will turn the site into an industrial and
retail business area that could generate 1,000 jobs.

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5  GM approves new coolant.
   Automotive News | n 5602 p 16 | 95:05:01

General Motors Corp, which once did not allow the use of propylene glycol
based engine coolants in its cars, says that it will now approve the use of
the coolant in its vehicles, without affecting warranty coverage.
Technicians have been advised to completely drain the old coolant before
using the propylene glycol, to avoid a false reading of the coolant's
freezing and boiling point levels.

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6  Ford whittles platforms.
   Automotive News | n 5602 p 1, 41 | 95:05:01

In an effort to produce more products from fewer platforms, while saving
time and money, Ford Motor Co will cut about 30% of its vehicle platforms
and engine and transmission families.  The strategy is part of Ford's 1995
global reorganization.  Currently Ford uses 22 platforms for car and light
truck vehicles and 35 architectures for engines and transmissions.  The
global plan will give Ford another 10 to 15 new products by the early
2000s.  Half of the new products will be sold in Europe and North America.
Ford 2000 calls for five global vehicle centers - one in Europe and four in
the US - that design and develop vehicles for the worldwide market.  The
strategy is expected to improve product quality and increase cycle time.
Currently Ford develops new vehicles in 37 months, and it would like to
reduce that time to 24 months.  The plan is expected to increase Ford's
growth outside of North America and Europe.  In the first quarter of 1995,
Ford accounted for 26.7% of the US market and 12% of the European market.
According to Ford Automotive Operations President Ed Hagenlocker, US
dealers can expect "more products and a wider range of products that will
come to market faster than they have previously."  He also says that Ford's
product cycle plan for the next 5 years is at least "relatively firm."  The
plans for 5 to 10 years from now show "tremendous flexibility."

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7  Ford unveils lease backed securities in drive for quick capital access.
   The securities would allow automakers to use the money from auto leases
   upfront.
   Orlando Sentinel | p B5 | 95:05:02

Ford Motor Credit Co, a subsidiary of Ford Motor Co, is expected to issue
securities to be backed by car leases, and this is expected to set a
precedent for lease securitization for automakers.  General Motors
Acceptance Corp, a subsidiary of General Motors Corp, is developing its own
lease backed securities that will most likely resemble Ford's offer.
Chrysler's lease backed securities are expected to follow later.  If Ford's
securitization is accepted by the public, "it will open up a major new type
of asset backed security, or ABS, that could claim as much as 25% of ABS
volume in coming years."  In 1994, the ABS volume was US$75 billion.  The
securities let the automakers spend auto lease money before they receive
the cash, although that can bring up a problem when "transferring a
vehicle's title from the consumer back to the auto company and creating a
guarantee that the investor's claim on the underlying leases doesn't get
pulled into any possible bankruptcy of the automaker."

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8  Ford recalls 112,000 cars to repair fuel tank seal.  Fire fears prompt Ford
   recalls.
   Wall Street Journal | p A4 | Chicago Tribune | p 1 | 95:05:02 | 95:05:02

Ford Motor Co has recalled 112,000 1995 Ford Crown Victorias, Lincoln Town
Cars, and Mercury Grand Marquis to repair a fuel tank seal that might be a
fire hazard.  Fifteen reports of "fuel odor seepage" have been made to
Ford, but no fires or injuries have been reported.  The fuel tank seal will
be replaced at no charge to the owners.  The owners are being notified by
their dealers.  Ford is also recalling 61,000 1994 Mustang GT coupes
because of a possible power front seat wire harness malfunction that could
lead to a potential electric fire hazard.  Ford has received eight reports
of the wire malfunction, with no injuries reported.  The repairs will be
done free of charge.

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9  Ford, VW open Portugal minivan plant.
   Automotive News | n 5602 p 4 | 95:05:01

In late April 1995, Ford Motor Co and Volkswagen AG opened a US$2.6 billion
minivan factory for the production of minivans.  The automakers expect to
produce 50,000 minivans annually in 1995, and 180,000 annually by 1997.
The production output will be split equally between the two automakers, who
expect the minivan market to increase to 500,000 units by 2000, and they
expect to account for over 30% of that segment.  The new plant, AutoEuropa,
is the first Ford / VW European partnership.  It will employ 3,000.
Because the facility is located in an economically depressed area, 30% of
the cost for the new plant was incurred by the European Union and the
country of Portugal,  The automakers have reportedly guaranteed the
Portuguese government that the factory will operate for at least 7 years
after it produces at full capacity.  VW will sell its Sharon (to be
unveiled in the summer of 1995) and a SEAT model.  Ford will sell a version
of its Galaxy in Europe.  The VW / Ford partnership was helped because of
the European recession, which resulted in reduced costs for tooling and
other production items.

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10  Ford seeks Canada buyout.
    Automotive News | n 5602 p 8 | 95:05:01

Ford Motor Co says it will buy out the remaining shares of the
approximately 1,250 shareholders of Ford Motor Co of Canada.  The plan is
to buyout the shareholders at C$150 (US$110) per share.  If the buyout goes
as planned, Ford of Canada would merge with Ford Ensite International Inc,
which is wholly owned by Ford and which has engine and aluminum casting
facilities in Windsor, Ontario.  Ford of Canada also has research and
development facilities.  The merger would "eliminate redundancies and
reduce costs," and the change will have no effect on dealers nor on labor
agreements.  After the buyout was reported, Ford Motor Co stocks increased
C$26.  The proposal would have to be approved by Ford of Canada's board of
directors, and it is likely that the deal could be completed by the third
quarter of 1995.  The buyout is part of the global Ford 2000 strategy.

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11  Paint shadow casts cloud over Chrysler, Mitsubishi.
    Automotive News | n 5602 p 4 | 95:05:01

A potential paint glitch in tens of thousands of Chrysler Corp cars
surfaces within 3 months after production and is due to moisture getting
caught between the paint and the clear coat finish, casting a shadow or
spots on the body finish.  Moisture forms when there's a "50 deg
temperature swing," such as when a vehicle leaves a warm garage and enters
a cold climate.  Dark colored 1995 Chrysler models, with the exception of
minivans, Jeeps and Canadian manufactured vehicles, are affected.  The
cause of the problem stems from a "clear coat additive that was overbaked,"
according to a Chrysler spokesperson.  Chrysler says it will buy back any
vehicle with this problem, repaint it, and sell it back used at auction; or
Chrysler will repaint the car for free, if the customer wants to keep the
car.  The article includes a list of the vehicles that are affected, the
plants where they were made, and the time they were produced.  Mitsubishi
Motors Corp has about 4,900 cars with the flawed dark color paint, but
hasn't announced what to do with those cars that are affected.  Separately,
according to the EPA, over 7,000 Chrysler vehicles will be recalled for
failing to meet federal carbon monoxide emission standards.  The cars
affected include the 1989 Plymouth Sundance, Reliance, and Horizon, and
Dodge Aries, Omni and Shadow.  All of the above mentioned cars are equipped
with 2.2L engines.  Vehicles with the 2.5L engines that are affected are
the Plymouth Acclaim; Dodge Dynasty, Spirit, and Daytona; and Chrysler
LeBaron coupe and convertible.  Chrysler says its dealers will put in a new
computer to change the air / fuel ratio for improved fuel combustion.
Includes a front three quarter photograph of the Eagle Talon.

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12  Chrysler starts courting stockholders.  Eaton mounts campaign to repel
    Kerkorian's bid.
    Detroit News | p 1, 4E | 95:05:04

Chrysler Chairman Robert J Eaton is seeking support from shareholders to
block Kirk Kerkorian's takeover bid, and build a US$7.5 billion cash
cushion.  In a one page letter to shareholders, Eaton says that the
automaker could increase its dividends or buy back more shares to build the
cushion.  The article says that Chrysler "is willing to buy out Kerkorian's
36 million shares at market price," and "several major Chrysler holders
said...they would support Chrysler if it could buy out Kerkorian's 10%
stake - as long as it doesn't pay Kerkorian a large premium."  A
spokesperson at Kerkorian's Tracinda Corp says that Kerkorian will not
accept a buyout that excludes all shareholders, but did not say what
Kerkorian's next move would be.  Kerkorian has insinuated that he will ask
shareholders to back him on his buyout offer.  Chrysler stock closed on May
3, 1995, at US$42.25, up US$0.25, and if Chrysler bought Kerkorian out at
that price, it would cost the company US$1.5 billion.  If the stock fell
after the buyout, lawsuits could arise from shareholders who didn't get the
same buyout opportunity.

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13  Chrysler may rescind tribute to Iacocca.
    USA Today | p 1B | 95:05:01

Lee Iacocca may have lost his chance to have his name appear on the
automaker's new headquarters, due to his part in the Kirk Kerkorian
takeover bid.  Chrysler Corp was going to name its new 15 story office
building in Auburn Hills, Michigan after Iacocca; but because of his
support of Kerkorian's US$20.8 billion takeover bid, his name is looking
less attractive to Chrysler.

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14  Lamborghini plans to increase investments in Mexico.
    El Norte | p 6H | COMLINE | MEX n 7 | 95:04:22 | 95:04:28

Automoviles Lamborghini Latinoamerica says it will increase its investments
in Mexico from US$7 million to US$20 million.  The investment increase
hinges on the Secretariat of Commerce allowing Lamborghini to become an
auto assembler.  Lamborghini says it will take its investment to Brazil if
the Mexican government does not respond to Lamborghini by the end of the
second quarter of 1995.  Lamborghini says that in about 2 months it will
have about 10 completed units of its Countach, a model it wants to assemble
in Mexico, using up to 60% of domestic content, which would lower the cost
of the car.  Currently, the car sells in the US for US$200,000, but would
cost about US$75,000 if produced in Mexico (article does not indicate where
the car is currently produced).  Lamborghini plans to invest US$13 million
for a new plant to manufacture its Diablo and Vector models.

(abstract in English, article in Spanish)
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15  Argentina plans program to rev its auto sales.
    Wall Street Journal | p B10 | 95:05:01

In an effort to stimulate auto sales, the Argentine government is expected
to announce a plan to give car owners a discount on new vehicles when they
junk their old ones.  A discount of 20%, shared equally between the
government and the automaker of the exchanged vehicle, is the expected
average figure; but some key issues concerning the age of the car, the cost
shared by the automakers, and the amount of certificates that a person
could use or receive have yet to be resolved.  Argentina is in the midst of
an economic recession.  Sevel Argentina SA and Ciadea SA, Argentina's two
biggest automakers, had to cut back production early in 1995, and Sevel
expects a 20% decrease in sales, from 500,000 in 1994 to 400,000 in 1995.

---

From: [email-masked] (CKB)
Date: Fri, 12 May 1995 16:10:50 GMT

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16  Land Rover.  Baby sport ute still under wraps.  Car talk.
    Detroit News | p 1D | 95:05:03

Land Rover Ltd's new "baby" sport utility vehicle, Project CB40, will
function as an off roader and a "people mover."  It will cost between
US$30,000 and US$40,000 and will be marketed mainly in North America in the
fall of 1997.  The US version will be powered by a DOHC 2.5L V6 engine that
produces 165 hp, and the engine is linked to an electronic 4 speed
automatic transmission.

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17  Saab-Scania to recall total of 26,467 cars for range of problems.
    Wall Street Journal | p A4 | 95:05:01

Due to a range of problems on its 900 and 9000 models, Saab-Scania AB is
recalling 26,467 of these vehicles.  Of the recalled vehicles, 12,091
1992-1994 Saab 9000s need to be inspected by the dealers for possible
corrosion on the antilock braking system's (ABS) pressure switch terminal
connection.  Owners of these vehicles will be notified in June 1995.  Also,
8,993 1994 - 1995 Saab 900 5 door and coupe models with manual
transmissions will  be recalled to repair a pair of faulty washers in the
gearbox that causes slack in the shift linkage, which could make the
reverse gear inoperable.  Over 5,000 early production 1995 900 models
equipped with 2.3L 4 cylinder engines could have a problem that can result
in engine idle fluctuation.  Dealers will update engine management system
control modules in July 1995.

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18  Bit players in Seoul.  Importers gain foothold in Korean market, auto
    show.
    Automotive News | n 5602 p 3, 45 | 95:05:01

The Seoul Motor Show, which begins on May 3, 1995, and runs for 1 week, is
a sign that the Korean government might not be discouraging imports,
according to David Jerome, vice president of GM Korea.  The Korean
government has blocked imports in the past by "threatening to audit the
taxes of imported car buyers and requiring a special 'O' license plate for
non Korean vehicles."  Korea no longer uses these tactics, but Korean car
buyers might still be afraid of the negative image of buying imported
vehicles, even though imported vehicle sales have increased over 50%
through March 1995, from the same period in 1994.  Importers are upset at
the amount of space they have been given at the show, which is about 10% of
the space given the Korean automakers.  The Korea Automobile Manufacturers
Association says that the show was originally planned as a domestic only
event, but the plan was revised to include a pilot for an international
show it hopes to have in 1997.  Hyundai Motor Co Ltd will display its
HCD-III concept sport utility vehicle (SUV), a wagon version of its
Elantra, a step up version of its Sonata, and its FGV-I, which is a hybrid
electric vehicle.  Kia Motors Corp will introduce its new G-car, a 2.0L
engined midsized sedan, and its KMX-3; and it will show the KEV-4, a hybrid
concept car that runs off an 800cc gasoline engine and 50 kilowatt electric
motor.  Daewoo Motor Co will show its Bucrane sedan concept car, and
Ssangyong Motor will introduce its Istan commercial van, codeveloped with
Mercedes-Benz AG.  General Motors Corp will show its Blazer, Camaro,
Corvette, and Cadillac STS, which it hopes to start selling in Korea in
1995; and it will show its special edition Cadillac Concours, which
includes rear adjustable seats, reading lamp, rear audio controls, and
writing desk.  Ford Motor Co will show the Ford Mustang, Explorer, and
Windstar, as well as the Mercury Sable (currently sold in Korea through
Kia), and the Lincoln Town Car.  Chrysler Corp will display its Caravan,
LHS, Stratus, and Viper.

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19  Honda advances plan for bigger minivan for US.
    Automotive News | n 5602 p 10 | 95:05:01

Honda Motor Co is considering a "full sized" minivan to complement its new
Odyssey.  The minivan would be equipped with a V6 engine, and "be larger
than the Accord based Odyssey."  According to Tomoyuki Sugiyama, an
executive chief engineer for product planning of the Accord and its
derivatives, the full sized minivan would be made at a new or renovated US
plant.  Honda has yet to approve the project.  The new minivan could
feasibly be ready in 3 years, according to Sugiyama, and some suppliers
believe that it could be ready by 1998.  There is only speculation as to
where the new plant would be, what platform the new minivan would use, and
what manufacturing processes would be used.  Includes a front three quarter
photograph of the Honda Odyssey EX.

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20  Suzuki introduces new Esteem into jam packed sedan segment.
    Automotive News | n 5602 p 18 | 95:05:01

In early May 1995, American Suzuki Motor Corp will unveil its first
subcompact 4 door sedan - the Esteem.  The Esteem GL, the base model, is
priced at US$11,399, and the step up GLX model is US$12,699.  An optional
package would increase the GLX price to US$14,399 and would include air
conditioning, antilock brakes, and cruise control.  For an automatic
transmission, US$1,000 will be added to all models.  The Esteem is expected
to compete with the Geo Prizm, Honda Civic, Toyota Corolla, and Nissan
Sentra.  It features a "snub nosed" hoodline and a short rear deck and,
according to Suzuki, it has the largest interior volume in its class (97.5
cu ft).  It is powered by a 1.6L 16V 4 cylinder engine that produces 98 hp
and 96 lb-ft of torque and gets an estimated 31 mpg in the city and 36 mpg
on the highway.  It has front and rear independent suspension with
MacPherson struts and rack and pinion steering.  The GL comes with standard
dual air bags, intermittent windshield wipers, a standard trip meter, power
steering, rear window defogger, and tinted glass.  The GLX comes with those
standard features, plus power windows, door locks, and mirrors; split
folding rear seats; a stereo cassette player; and colored keyed bumpers.
Includes side and rear three quarter photographs.