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RX Hybrid Enters Canadian Production this Year

The first Lexus model made outside of Japan will also become the first Toyota hybrid ever assembled offshore.

by on Jun.15, 2009

Lexus 2010 RX450h

Adding what is essentially a powertrain option to a plant is a less risky bet for the conservative company, which is reeling from huge losses.

Lexus confirms that the hybrid version of its best selling RX350, the RX450h, will enter production this fall at Toyota Motor Manufacturing Canada (TMMC), which also builds the Corolla and Matrix models.

This decision, from the division of Toyota that leads the U.S. luxury vehicle sales race, is in stark contrast to one that suspended work earlier this year on a U.S. plant in Alabama for the lower-priced Toyota Prius. Prius is of course the unchallenged global hybrid champion. But it saw sales plummet in parallel with declining gasoline prices in 2009. A new 2010 Prius has just gone on sale, but the U.S. plant is still in limbo as Toyota officials debate its future.

Toyota’s  record losses of $4.4 billion in 2008, and a staggering loss of $7.7 billion in the first quarter of 2009 have shaken management, which is traditionally risk adverse. So adding what is essentially a powertrain option to an existing  manufacturing plant costs hundreds of millions of dollars less than the more substantial tooling costs for a dedicated hybrid plant. It is also a less risky sales bet. If buyers do not appear, the Canadian plant can simply change its build mix to conventionally powered RXs, still the best sellers in the line.

The 2010 RX 450h introduces an updated version of Lexus Hybrid Drive, with a 3.5-liter V6 Atkinson-cycle engine, lighter electric motors, a smaller and lighter power-control unit and other fuel-saving touches. It offers performance similar to small V8s, with an EPA-estimated 32 mpg city and 28 mpg highway (30 mpg combined) for the front-drive version. This is about 16-20% better economy than its RX400h predecessor.

The Lexus RX series demolished the commonly held assertion at U.S. car companies that a sport utility vehicle had to be built from a truck chassis. Not only did the passenger-car derived RX300 catapult Lexus to the number one sales spot in the U.S. luxury segment where it still resides, but it ended the reign of body-on-frame, rear-drive trucks as the basis for luxury vehicles. More than one million RXs have been sold worldwide.

The second-generation RX330, debuted in 2005 with an optional gasoline-electric powertrain — making it the world’s first luxury hybrid. Together, the two versions nudged U.S. RX sales to an all-time record of more than 100,000 in 2007, with the division selling 329,177 vehicles in total. Last year RX sales plummeted to 80,000, but Lexus retained its U.S. luxury sales lead with 260,087 vehicles sold in 2008, although it was down 21.2% from 2007. (more…)

GM Bankruptcy Plan Includes UAW Lobbying Organization for Health Care Reform

Protection is asked for funding for what will largely be a taxpayer-financed organization that includes Chrysler and Ford.

by on Jun.08, 2009

While the union preserved active woker benefits for the moment at GM, retirees took a a bit hit. Mor ecuts could be on the way.

While the union preserved active worker benefits for the moment at GM, retirees took a a big hit. More health care cuts could be on the way.

The United Auto Workers Union in its revised contract with bankrupt General Motors is attempting to establish a lobbying organization funded by the automaker that would push for health care reform. Ford Motor Company and New Chrysler would contribute as well.

GM has agreed to provide funding of $3 million annually for five years to a “National Institute for Health Care Reform,” provided that Ford and Chrysler participate with proportionate funding.

GM CEO Fritz Henderson told TDB that, “We are committed to go ahead with the Institute,” even though he didn’t know the status of Ford and Chrysler contributions. “There has to be change in the health care system,” Henderson said.  Henderson disagreed with our lobbying designation, insisting  that the Institute is a research group.

The Institute  funding, of course, will be largely taxpayer supplied since the U.S. Treasury will hold majority stakes in GM and the Chrysler Group when they emerge from bankruptcy.

The new push comes at a time when the national debate on health care is heating up, as President Obama tries to fulfill his campaign promise to reform a system that spends more money and produces worse results when compared to any other industrialized nation. We are now facing skyrocketing costs, massive numbers of uninsured people and the ongoing problem of profit-driven decision-making on the delivery of health care.

Almost 47 million Americans are without health insurance, and the cost of providing medical services from a private, for-profit system is rising at an unsustainable rate. This  is forcing businesses to increasingly trim or eliminate benefits for workers with health care — precisely what is happening at the auto companies.

The revived union initiative is taking on new urgency since the UAW has now assumed enormous risks on behalf of its one million retirees and dependents whose health care will be financed by Voluntary Employee Beneficiary Associations (VEBA) run by the union, funded in part by automaker stock.   (more…)