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July 30, 2010
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Chrysler sues 7 Detroit dealers over disputed letters of intent
WASHINGTON -- Chrysler Group has sued seven Detroit area dealerships in an attempt to gain legal support for the letters of intent it has given dealers reinstated through arbitration. Dealers have challenged the terms of those letters as onerous and unfair.
Chrysler claims it should be allowed to withdraw a letter of intent to a dealership if nearby stores protest its reinstatement The condition has been in at least 82 letters offered to dealerships that filed arbitration claims after being closed during the company's bankruptcy last year.
Only 29 dealers have signed the letters of intent, although that number could grow because many of the others are in talks with Chrysler in an attempt to get the requirements eased.
Dealers who haven't signed have argued that several ... >> story Published: Jul 30 3:41 pm U.S. Eastern time
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Chrysler to keep Michigan plant open after 2012, add 900 jobs next year
DETROIT -- Chrysler Group CEO Sergio Marchionne said today the company will keep its Sterling Heights assembly plant in suburban Detroit open indefinitely instead of closing it after 2012, as previously planned.
The company plans to build the Fiat-based successors to the mid-size Chrysler Sebring and Dodge Avenger at the factory, Marchionne told reporters today on the sidelines of President Barack Obama's appearance at Chrysler's Jefferson North Assembly Plant.
“It's a permanent retention,” Marchionne said of the plant decision. “There are no plans to close it in ‘14 or '15. We've made a decision to keep it. We're playing for keeps.”
Chrysler will introduce refreshed versions of the current Sebring and Avenger later this year as 2011 models. ... >> story Published: Jul 30 11:44 am U.S. Eastern time / Last changed: 7/30/10 3:19 p.m. ET
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Obama: Auto industry revival justifies bailouts
DETROIT (Bloomberg) -- President Barack Obama, in the heart of the U.S. auto industry, told a crowd of workers that the government bailouts of General Motors Co. and Chrysler Group LLC are giving taxpayers a return on their investment.
Heading into a congressional election season in which polls show the public skeptical about the $84.8 billion rescue and anxious about economy, Obama used the backdrop of Detroit-area plants owned by GM and Chrysler to promote what he says is an industry revival that has saved more than a million jobs.
“The fact that we’re standing in this magnificent factory today is a testament to the decisions we made,” Obama said at a Chrysler plant that recently added a second shift of workers to build the Jeep Grand Cherokee SUV.
Obama told ... >> story Published: Jul 30 7:22 am U.S. Eastern time / Last changed: 7/30/10 3:40 p.m. ET
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GM to boost Volt output 50 percent for 2012 on buyer demand
General Motors Co. said today that buyer interest in the new Chevrolet Volt has prompted the automaker to boost 2012 production plans for the plug-in hybrid to 45,000 units from 30,000.
GM announced the 50 percent production increase as President Barack Obama toured the Detroit-Hamtramck plant today where the Volt is being made. It goes on sale later this year.
“We are very proud to host the president of the United States where the future of the American auto industry is being built today,” said GM CEO Edward Whitacre Jr.
After consultations with the Secret Service and his press secretary, Robert Gibbs, Obama stepped into a black Volt, buckled himself in and haltingly drove perhaps 10 feet at a crawling speed, according to pool reporters with the president.
"Pretty ... >> story Published: Jul 30 2:00 pm U.S. Eastern time / Last changed: 7/30/10 3:54 p.m. ET
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YANG JIAN
Fragmented Chinese industry will consolidate -- someday
SHANGHAI -- At present, 85 manufacturers in China are churning out vehicles carrying 63 different brands.
Given such a high level of fragmentation, is the industry ready for consolidation?
The answer is not yet. Attracted by strong market growth, domestic automakers are launching new brands, and more joint ventures will be formed between Chinese and foreign automakers.
Over the next years, at least three domestic Chinese companies will start producing their own brand cars.
SAIC-GM-Wuling Automobile Co., a mini commercial vehicle maker, and Guangzhou Automobile Industry Corp. will start building their own brand cars later this year. In 2011, Beijing Automotive Industry Holding Corp. will produce its first own-brand sedans using platforms it purchased from Saab last December. ... >> Read the column Published: Jul 30 10:32 am U.S. Eastern time
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Non-Chrysler dealers may get Fiat franchises
Some non-Chrysler Group dealers may receive franchises to sell Fiats, said Sergio Marchionne, CEO of Fiat and Chrysler.
“I think there's going to be a large part of the distribution that will be part of the Chrysler environment,” Marchionne told reporters today. “There may be others that will not” be Chrysler dealers.
Marchionne spoke after President Barack Obama's appearance at Chrysler's Jefferson North Assembly Plant.
He also said Fiat franchisees could also get the Alfa Romeo franchise, which will return to the United States in 2012.
Marchionne said Chrysler already has begun making pre-production versions of the Fiat 500 minicar at its Toluca, Mexico, factory, and the car is on schedule for volume production late in the year. Fiat plans four 500 ... >> story Published: Jul 30 4:08 pm U.S. Eastern time
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Visteon union seeks bigger role in exit plan vote
 (Bloomberg) -- A union for Visteon Corp. retirees is seeking greater influence over the auto parts maker's bankruptcy exit plan, saying it has a claim for $100 million that entitles it to more votes on the proposal.
The Communications Workers of America said Visteon's valuing the union claim at $1 would “effectively disenfranchise” the retirees in creditor voting that ends today, as votes are apportioned by the size of the claim. The union, in papers filed today in U.S. Bankruptcy Court in Wilmington, Del., asked the judge to recognize its position on the claim in the balloting.
Creditors of Visteon, based in Van Buren Township, Mich., must decide by today whether to support the company's reorganization plan. The distressed-debt investment company, Fulcrum Credit ... >> story Published: Jul 30 4:02 pm U.S. Eastern time
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Ford expects slight boost in July sales, thanks to F-series
DETROIT -- Ford Motor Co. expects sales of new light vehicles in July to trump results in the year-ago period, largely due to increased sales of the F-series pickup.
In July 2009, Ford sold 158,838 vehicles. Those sales are expected to be “slightly” higher this July, George Pipas, Ford's chief sales analyst, said today.
Pipas said the federal government's cash-for-clunkers incentive program -- launched in late July 2009 -- created a “sales tsunami” for small cars with four-cylinder engines. Therefore, demand for smaller Ford vehicles, such as the Focus sedan and Escape crossover, probably will be down in July vs. last year.
But the F series was not a big seller during cash for clunkers. It's selling well now with the introduction this spring of a ... >> story Published: Jul 30 3:21 pm U.S. Eastern time
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BorgWarner sees record earnings in 2010
 DETROIT (Reuters) -- Auto parts maker BorgWarner Inc. posted stronger-than-expected quarterly earnings on Friday and raised its full-year earnings forecast due to stronger vehicle production in North America, Europe and China.
BorgWarner, which produces turbochargers, transmission components and other parts, said it expects sales growth to outpace the market overall and anticipates record earnings for the year.
The auto parts maker reported net income of $82.8 million in the second quarter, compared with a net loss of $35.9 million, a year earlier.
Sales rose to $1.42 billion in the quarter from $916.2 million a year earlier.
A "volume shift in Europe toward vehicles with higher BorgWarner content, including diesels, also boosted results," Chief Executive Timothy Manganello ... >> story Published: Jul 30 9:46 am U.S. Eastern time
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American Axle hikes revenue outlook on truck, SUV rebound
DETROIT (Reuters) -- American Axle & Manufacturing Holdings Inc. swung to a profit in the second quarter and said it was benefiting from increased demand for full-size pickups and SUVs.
The auto parts maker also said it expects demand for large pickups and SUVs to continue through the second half of 2010 and raised its full-year revenue forecast.
Net income was $25.4 million in the second quarter, compared with a net loss of $288.6 million a year earlier, when the auto parts maker took charges for asset impairments and work force cuts.
Sales more than doubled to $559.6 million in the latest quarter from $245.6 million a year earlier.
In the summer of 2009, American Axle's biggest customer, General Motors Co., and Chrysler Group LLC, another key customer, had extended ... >> story Published: Jul 30 9:12 am U.S. Eastern time
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Lithia to pass on Fiat stores
 Lithia Motors Inc., which receives almost 30 percent of its sales from Chrysler Group brands, doesn't plan to seek much Fiat business as the Italian automaker prepares to reenter the U.S.market.
Chrysler dealers have been invited to apply for about 200 available Fiat franchises to be awarded later this year. Lithia CEO Sid DeBoer said Thursday that he's not yet sure whether Lithia, the nation's ninth largest retailer, will go after the franchises.
“We're not in a lot of the markets that they're targeting,” DeBoer said. “It's not going to be a major initiative for us.”
DeBoer said Lithia has one Chrysler store with an empty showroom on its property – and that acquiring the Fiat franchise might be a good solution for that location. Lithia ... >> story Published: Jul 30 12:01 am U.S. Eastern time
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Ford cuts 400 jobs at Canadian engine plant
ORONTO (Reuters) -- About 400 workers at Ford Motor Co'.s Windsor, Ontario, engine plant will lose their jobs as Ford completes a planned move to a single shift, the company said,
Ford made the announcement Thursday, a day after General Motors Co. shuttered its transmission plant in the city.
Ford said in January that it planned to cut a shift at the engine plant in Windsor. But the company has now put numbers to that plan.
Spokeswoman Lauren More said about 500 people will be laid off when the shift ends in November. Some 100 of them will be given jobs at the nearby, newly upgraded Essex engine plant.
On Wednesday, GM closed its Windsor transmission plant, cutting 500 jobs and ending a 90-year presence in the city, which is across the river from Detroit.
Windsor has ... >> story Published: Jul 30 12:01 am U.S. Eastern time
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Kia earnings up sharply in latest period
 SEOUL (Reuters) -- Kia Motors Corp.'s quarterly net profit rose 61 percent, beating estimates as the No. 2 automaker in South Korea enjoyed brisk sales of newly launched models.
Kia, an affiliate of the country's top carmaker, Hyundai Motor Co., announced a 557.8 billion won ($470.6 million) net profit in the second quarter, beating a consensus forecast of 440.5 billion won from 27 analysts surveyed by Thomson Reuters.
That compared with a 347.1 billion won profit a year earlier and 398.6 billion won in the first quarter of 2010.
The maker of the Cee'd compact and new Sportage SUV posted a 423.7 billion won operating profit during the quarter ended on June 30, above a consensus forecast of a 386.6 billion won profit.
But the second-half outlook for Kia, like most other global ... >> story Published: Jul 30 12:01 am U.S. Eastern time
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Honda raises forecasts after profit is boosted by U.S., China
TOKYO (Reuters) -- Honda Motor Co. posted its best quarterly operating profit in nearly three years today on brisk sales in the United States, China, and other Asian markets, and raised its forecasts despite a sharp rise in the yen.
Japan's No.2 automaker joined Nissan Motor Co., Hyundai Motor Co. and Kia Motors Corp. in reporting strong results for April-June, but like the rest of the industry, faces concerns over a slowdown in demand in the United States, China and Europe.
A further strengthening in the yen is also clouding the outlook for Japanese automakers, with the dollar hitting an eight-month low below 86.27 yen on Friday.
For the year to March 31, 2011, Honda now expects an operating profit of 450 billion yen ($5.2 billion), higher than its previous forecast of 400 ... >> story Published: Jul 30 2:31 am U.S. Eastern time
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Denso lifts profit forecast on global auto rebound
 TOKYO (Reuters) -- Denso Corp., Japan's largest car parts maker, raised its full-year profit forecast after swinging back to profit in the latest quarter due to a rebound in global auto production, mostly in Asia and North America.
Like other Japanese car and car parts makers, Denso's earnings have been boosted by Japanese government subsidies for eco-friendly cars. That program is set to end in September, potentially leading to a drop-off in demand.
For the three months ended in June, Denso reported an operating profit of 70.7 billion yen, against a loss of 15.2 billion yen in the same quarter last year. Sales jumped 37 percent to 802.8 billion yen.
"Despite a currency exchange loss, the sales and operating income increased due to the recovery of worldwide car production from ... >> story Published: Jul 30 6:56 am U.S. Eastern time
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