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Archive for April, 2010

Toyota Appoints Panel to Review its Safety

Outside experts will offer advice on safety, recalls.

by on Apr.30, 2010

Former U.S. Transportation Secretary Rodney Slater will head a new, outside panel investigating Toyota's safety problems.

An outside panel, comprised of a variety of experts from the safety, aviation, business and technology fields, will be empowered to advise Toyota how to deal with ongoing safety problems and what to do to prevent similar problems in the future.

The 7-member group will look at all aspects of Toyota’s operations, including internal policies that have delayed action on safety issues, as well as alleged – but so far unproven – issues with the computer control systems used in the maker’s vehicles.

“This is a very important company dealing with a very important issue,” Rodney Slater, the former U.S. Secretary of Transportation, who was asked to put together the panel, told The Detroit News.

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Another senior member of the panel will be Norman Augustine, who served 16 years as a technology advisor to the president, and later became CEO of Lockheed Martin, and Roger Martin, dean of the University of Toronto’s Rotman School of Management.

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Feds May Step Up Auto Safety Efforts – But Buyers Could Face New Fees

Congressional proposal would charge $9 per new car to bankroll program.

by on Apr.30, 2010

The recall of millions of Toyota products, plus evidence the maker concealed problems from federal regulators, is likely to result in the expansion of NHTSA's power to order recalls.

The recent rash of recalls at Toyota has federal regulators and lawmakers racing to find ways to improve safety oversight, and a new proposal could stick buyers, rather than consumers, in general, with the costs of the expanded effort.

A new draft bill, sponsored by Congressmen Henry Waxman and Bobby Rush, would reform existing safety measures among other things requiring that automakers begin equipping their vehicles with event data recorders, or EDRs, similar to the so-called black boxes used on commercial aircraft.  Along with a similar measure introduced in the Senate, the draft legislation would increase the size and powers of the National Highway Traffic Safety Administration.

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NHTSA has come under fire, in recent months, for getting too cozy with carmakers, Toyota in particular.  A document leaked from a Congressional committee, last February, showed Toyota officials celebrating a successful effort to convince the Washington-based safety agency to downsize a recall related to the maker’s products – saving Toyota hundreds of millions of dollars.

The proposal by Waxman, the Democratic chairman of the House Energy and Commerce Committee, and Rush, head of a subcommittee overseeing NHTSA, would also raise the funds for the additional manpower and resources required – by charging new car buyers a fee that would start at $3 and climb to $9 by the third year of the new law.  At that figure, that would amount to about .03% of the price for the typical vehicle sold in the U.S.

This year, most analysts expect to see the American auto market rebound slightly from last year’s low to about 11 million new cars, trucks and crossovers.  Most expect that figure to grow only slightly in the coming years, but would still generate at least $100 million in new fees.  Under the proposals, NHTSA would see its budget doubled to $100 million, next year, and increased to $280 million by 2013.

Senator Jay Rockefeller, an outspoken Democrat from West Virginia, is sponsoring a Senate measure that would step up NHTSA oversight – and give the agency more power to order a recall where it perceives “an imminent hazard of death or injury.”

Currently, the recall process can stretch out – sometimes for a year or more — as regulators and automakers debate the merits of a potential safety problem.  NHTSA chief David Strickland said the process “needs to be much faster” than the current system.

It’s clear that the Toyota safety scandal is a significant factor in the debate over expanded auto safety regulations.  Though most makers now equip their vehicles with some form of black box, the Japanese maker has repeatedly denied it can use its own system to help investigators understand the surge in complaints about “runaway” vehicles.

(Toyota empowers independent panel to study its safety problems. Click Here.)

Future EDRs would provide extensive information about what was happening in a vehicle before, during and immediately after a crash.

Earlier this month, Toyota agreed to pay a $16.4 million fine for failing to notify NHTSA of a problem with sticky accelerators in the timely manner required by law.  That is a record penalty, but it was also the maximum fine under current law – and Congress may lift that cap, which would mean a similar infraction could cost a maker $13.8 billion.

Executives would also face stiff penalties for giving false or misleading statements on safety-related matters.

Such steps as the removal of the penalty cap could trigger some significant lobbying by the auto industry, though even many Republicans appear willing to make a bipartisan effort to enhance auto safety at a time when it has wide public support.  Meanwhile, the black box proposal is expected to make it into any final bill, what with GM, among key automakers, lending the idea its backing.

Did “Cash for Clunkers” Program Help the Economy, Environment?

Actually economic and environmental effects are debatable.

by on Apr.30, 2010

Does this look like a healthy economy to you? (Click on the chart to enlarge.)

The House Committee on Energy and Commerce is interpreting a new General Accounting Office study of the “Cash for Clunkers” program as saying it met key goals of stimulating the economy and improving vehicle fuel economy.

If only it were that simple.

The press release from the Committee selectively quotes the GAO in what appears to be an attempt to justify the Administration’s economic policies in an election year.

The new GAO report, Lessons Learned from Cash for Clunkers Program, “confirms the beneficial impacts of the CARS program,” according to the Committee headed by Henry A. Waxman, a Democrat from California.

“The CARS program is a classic example of how good environmental policy can also be good economic policy,” said Chairman Waxman. “And it shows how Congress and President Obama have worked to get the American economy moving.”

GAO reviewed two key program goals: stimulating the economy and putting more fuel-efficient cars on the road, and concluded, “The program achieved these broad objectives.”

However, the report also says, “the extent to which it did so is uncertain. For example, nearly 680,000 consumers purchased or leased vehicles using the program’s credit, yet some of these sales would have happened anyway.”    (more…)

EV Maker Tesla Edges Closer to IPO

Founder Elon Musk also confirms plans for a Roadster replacement.

by on Apr.29, 2010

Tesla Motors founder Elon Musk, shown here with the Tesla Roadster, at the Detroit Auto Show, January 2009

The California-based electric vehicle manufacturer, Tesla Motors, is edging closer to an initial public offering, according to founder Elon Musk.

Musk also confirmed that Tesla is working on a replacement for its current 2-seat sports car, the Roadster, which will go out of production by 2012.  That timetable has been dictated by the British maker, Lotus, which supplies the chassis used by Tesla for its first production model.

“We hope to go public in a couple of months,” Musk said during a visit to Detroit, another company official noting that Tesla’s planned IPO has already gone through two rounds of reviews by the Securities and Exchange Commission since the company announced its interest in selling stock, back in February.

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Tesla has already formed an alliance with Daimler AG, which has purchased an 8% stake in the California start-up, and which will be using Tesla’s technology to power the new electric-powered Smart cars that will reach the market in the U.S. late this year or early 2011. Tesla has other projects underway with Daimler and is also discussing possible alliances with two other automakers, Musk said.

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New Name, New Look For Chrysler’s Midsize

Sebring soon to make way for new Nassau.

by on Apr.29, 2010

The look of the 2007 Chrysler Nassau concept will influence the next-generation midsize sedan, but the 2012 Chrysler Nassau won't be its clone.

The “new” Chrysler is likely to look but sound a lot different from the old version of the automaker.  Indications of the grand transformation conceived by Chrysler’s new and secretive CEO Sergio Marchionne will start coming into view later this year.

In the months to come, the market will get its first look at new versions of both the Jeep Grand Cherokee, as well as the Chrysler Sebring.  The SUV will be new almost from  the ground up, but while the revised version of the midsize sedan is largely a re-skinning, it will also get a brand new name: Nassau.

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The move is a critical one, say analysts, in cutting the company’s ties to failed past products.  Once a strong part of the Chrysler line-up, the most recent version of the Sebring was a market disaster, an ill-fated execution that emerged from a now-abandoned partnership with the struggling Japanese maker, Mitsubishi Motors.

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BMW Topples Toyota as Most Valuable Car Brand

Safety scandal sours consumers on Japanese maker.

by on Apr.29, 2010

BMW -- its X6M shown here -- has become the world's most valuable auto brand, surpassing Toyota, which has been hurt by its safety scandal.

With consumers increasingly soured by the maker’s ongoing safety scandal, Toyota has been toppled as the most valuable automotive brand in the world, according to a new study, replaced in the top spot, by Germany’s BMW.

Ford and Volkswagen both gained ground in the latest BrandZ Top 100 survey compiled by the market research firm Millward Brown.  But two other German brands, Mercedes-Benz and Porsche, lost ground in the annual study of brand value – which is based on both financial performance and the perceptions of more than 1 million consumers.

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The firm placed Toyota’s brand value at $21.77 million, just slightly behind BMW’s $21.82 million.  Among all companies, the Japanese maker ranked 26, while the German brand came in at 24.  In fact, both companies actually declined in value over the last year, Toyota by 27%, BMW by a more modest 9%.

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Porsche Recalling All Panameras

Faulty seatbelt tensioner to blame.

by on Apr.29, 2010

Knocked off its pedestal? The 2010 Porsche Panamera is recalled for faulty seatbelt tensioners.

Porsche is recalling all 11,300 of the Panamera sports cars it has so far sold due a potentially faulty seatbelt tensioner.

The problem with the maker’s first-ever four-door comes as an embarrassing stutter in the launch of the long-awaited Panamera – and an even more troubling setback for a brand that had been steadily climbing to the top of the automotive quality charts, in recent years.

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Porsche’s announcement coincided with the latest in the ongoing series of recalls by Toyota, which announced it will have to make repairs to an electronic control system on 50,000 of its 2003-model Sequoia SUVs.

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Toyota’s Latest Recall: 50,000 Sequoia SUVs

Maker says no “unreasonable risk,” but acts anyway.

by on Apr.28, 2010

No "unreasonable risk," but Toyota recalls its 2003 Sequoia anyway.

Seemingly unable to stay out of the headlines, Toyota has announced yet another recall, this one involving 50,000 of its Sequoia sport-utility vehicles due to concerns about potential rollover problems.

The move comes just weeks after Toyota was slammed by influential Consumer Reports magazine for a problem with the stability control system on its newly-updated 2010 Lexus GX460, which could lead to a rollover.  The maker responded by halting sales of that luxury SUV, and says it will fix the nearly 9,000 vehicles already in consumers’ hands.

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Daimler Posts $816 Million Profit for Q1

German maker looking to go black for the year.

by on Apr.28, 2010

With sales of high-line models, like the 2010 Mercedes-Benz S-Class, showing renewed strength, Daimler AG is forecasting a good year ahead.

Daimler expects to post a substantial profit this year, following the announcement by the German automaker that it earned  net income of $816 million for the first quarter of 2010.

“This very good result for the first quarter shows that we did our homework in the crisis and are now firmly on track for success once again,” stated Dr. Dieter Zetsche, Chairman of Daimler AG and head of Mercedes-Benz Cars.

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That’s a sharp turnaround compared to the nearly $1.7 billion Daimler lost during the first-quarter of 2009. The very positive earnings were reflected by what Zetsche called the “upward trends in nearly all divisions.”

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Dr. Death’s Suicide Van Up for Auction

Though eBay pulls sale of Kevorkian’s ’68 VW, Kruse sets sale for mid-May.

by on Apr.28, 2010

Though eBay cancelled the bidding on Dr. Jack Kevorkian's '68 VW Westphalia, the "suicide van" will be offered by Kruse Auctions, next month.

Looking to buy a piece of history?  Here’s a chance to buy a rather macabre one: the 1968 Volkswagen van used by “Dr. Death,” Jack Kevorkian, in several of his controversial assisted suicides.

Preliminary bidding reached $3,400, but you’ll have to work a little harder to get the VW Westfalia camper, as eBay has pulled the auction from its site because, it told the Associated Press, it “does not allow the sale of items closely associated with notorious murderers within the last 100 years.”

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After several acquittals, Michigan-based Kevorkian was ultimately convicted, in 1998, for his role in the death of a 52-year-old man suffering from Lou Gehrig’s disease.  Dr. Death, as he became known, claims he assisted in the suicides of 130 people during the eight years before that.

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