ARI PUSH #194 Part 2

Monday, December 3, 2001, #194-Part Two
News digested November 19— 30, 2001

Significant fleet management news & developments of particular importance to fleet management executives.

 

SIGNIFICANT NEWS

  1. With Limited Cash & Engine Success, Ford Scraps Hybrid Explorer SUV, Sticks With 25% SUV Fuel Efficiency Goal

  2. Ford Delays 6-Safety Features For 2002 Explorer Until March; May Delay Some Sales

  3. Auto Finishes Influenced By Fashion Colors; Look For New Reds, "Touchy Feely Finishes" In Future

  4. Auto Sales & Household Goods Top US Complaint List; Suspect Finance Deals Are Common Complaint

  5. WAP Forum CEO Admits Technology Has Problems; New SmartPhone Software Due Next Year

  6. New Glasses Help Those With Carsickness; 40% People Suffer From Motion Problem

  7. Turbo Market Grows In Search Of Improved Fuel Economy; Turbo-Gasoline Engines Average 15% Better, Diesels 10%

  8. Mid-Sized Car Segment Losing Battle Against SUVs; Toyota's Camry Is Target To Beat

  9. Mazda Loses $2.7M In Product Liability Verdict; Driver's Seat Collapsed Upon Impact

  10. FAA Rule Bans Freight From 'Unknown Shippers' In Passenger Airlines

  11. Future Car Interiors Will Offer Choice & Versatility, No 2-Interiors May Be Alike

  12. Grand Cherokee Inadvertent Rollaway Complaints Climb Closer To Recall; 5-Deaths, 184 Injuries

  13. Bush Orders Strategic Petroleum Reserve Topped Off To Buffer Potential Future Supply Problems

  14. OPEC Warns Other Producers Of $10-Barrel Prices; Insists They Cut Production

  15. OPEC Loses Bid To Cut Output; Non-OPEC Exporters Give Only Token Commitments To Cut Oil Production

  16. Will New York’s New Cell Phone Law Be Enforced In Light Of Sept 11, Anthrax, Terrorists?

  17. Toyota Partners With Private College To Recruit & Train New Technicians

  18. Not All Automakers Meeting Voluntary Industry Side Air Bag Standard; Door-Mounted Bags Perform Poorly

  19. GM Urges Hands-Free Calls For 200K Employees; Use Not Mandatory Though

 
 

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Sourced from: The Associated Press, 11/16/2001

21) With Limited Cash & Engine Success, Ford Scraps Hybrid Explorer SUV, Sticks With 25% SUV Fuel Efficiency Goal

Situation

·         Ford Motor Co killed plans to offer hybrid power on Ford Explorer SUV

·         So-called mild hybrid uses integrated starter generator

·         Was key component to Ford's plan to boost SUV fuel efficiency by 25% by 2005

·         Starter generator was promise made in July by then-CEO Jacques Nasser

·         When vehicle stops, gas engine shuts off

·         At acceleration, system restarts instantly & gives vehicle a boost to take off

Significant Points

·         Starter generator hybrid effort designed to sharply improve fuel efficiency in world's best-selling SUV

·         Automaker acted because of cash crunch & less success with gasoline-electric hybrid than expected

·         Ford now limiting hybrid system to smaller trucks & cars, which tends to boost efficiency more

·         Automaker declined to comment on move to drop hybrid-powered Explorer, but stands by 25% improvement goal

·         Ford's environmental goals have greater prominence

·         Chairman & new CEO William Clay Ford Jr is advocate of making automakers more environmentally sensitive

Web Source

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Sourced from: Detroit Free Press 11-22-01 Page 3C & Detroit News 11-21-01 Page 1A

22) Ford Delays 6-Safety Features For 2002 Explorer Until March; May Delay Some Sales

Situation

·         6-safety features promised for 2002-model Explorer put off until March

·         Insuring failsafe qualities of new systems Ford's reason for delay

·         Included: 2nd-generation "depowered" front airbags; side airbags; crash absorption "limiters" & front-end beams; seatbelt pretensioners; "advance trac" traction/stability control

·         Highly-touted Ford leadership development center closing 12-31-01 after 34-month run

·         Instituted by ex-CEO Jacques A Nasser, center has 200 employees & @ 2,500 "alumni"

·         Replica of GE's famed Crotonville, NY training center, Ford center preoccupied "rising star" execs & advocate Nasser

Significant Points

·         Diversions like leader center distraction at root of product delays & launch defects under Nasser regime

·         Response to Explorer tire recall gave rise to safety program, also including optional ($150) tire pressure monitors

·         "Advance trac" also optional with price due by 01-31-02

·         Safety package now will reach market 3-months before end of Explorer's 2002 model run, meaning possible sales delays

·         If ideal leadership calls for meeting promised deadlines, then things like Ford center flunked big time

·         2-biz school profs who architected center, Drs Stewart Friedman & Noel Tichy, get As for effort & comp, Es for results

Web Source

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Sourced from: Automotive News, 11/05/2001

23) Auto Finishes Influenced By Fashion Colors; Look For New Reds, "Touchy Feely Finishes" In Future

Situation

·         Future auto colors influenced by colors of fashion

·         Nonprofit Color Marketing Group meets biennially to discuss color trends & present forecasts

·         Various manufacturers plan color choices after attending workshops

·         @ 50 of group's 1,700 members are in auto industry & use forecasts as starting point

·         Auto industry watches as fashion houses & others "test" colors in real world, making way to cars few years later

·         Auto colors in development often tested for public reaction on show cars

Significant Points

·         Vehicle colors generally reflect longer-term trends based on smaller, less costly items that survive in marketplace

·         Auto paint shops usually spray @ 10 colors, including basic red, black, blue, silver, brown or beige & white

·         New shade or color tone almost always met with resistance

·         Color Marketing Group's most recent forecast predicts, "more organic & complex & sophisticated colors with light values, soft but more complex"

·         Paint manufacturers & automakers keep details secret

·         Expect more interesting reds in short term, some new tints to silvers & blues, & possibly touchy, feely finishes

Web Source

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Sourced from: Reuters, 11/19/01

24) Auto Sales & Household Goods Top US Complaint List; Suspect Finance Deals Are Common Complaint

Situation

·         Auto sales & household goods tied for 1st on annual list of US consumer complaints released recently

·         Other sectors listed as being at greatest risk of going out of business: travel agencies & ISPs

·         Other categories leading in complaints: auto repair, credit/lending, Internet

Significant Points

·         Grievances about car sales have consistently been near top of list

·         Complaints include suspect finance deals where consumers promised special financing they didn’t get

·         Largest rise in complaints was for Internet purchases with average increase of 128% since 1999

·         Number of gripes expected to rise as economy weakens further

Web Source

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Sourced from: Reuters, 11/15/01

25) WAP Forum CEO Admits Technology Has Problems; New SmartPhone Software Due Next Year

Situation

·         New chief exec of WAP Forum admits problems, but believes will 1-day have mass following

·         WAP = wireless application protocol

·         Faster mobile networks & color screens will improve image --

·         But will take time to learn & find sites

·         No handset makers support WAP 2.0, but may, to offer Multimedia Messaging

Significant Points

·         Cellphone users eager to use mobile data services if they offer value & are easy to use

·         WAP connections notoriously unstable & few attractive services available

·         World’s largest wireless operator generated 0.5% of Sept revenues with WAP-based services

·         Same company generated 9.5% with non-WAP-related bare-bones test messages

·         New smartphone software does everything WAP does & more

·         Smartphone software to be mass marketed next year

Web Source

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Sourced from: Internet News Bureau, 11/13/01

26) New Glasses Help Those With Carsickness; 40% People Suffer From Motion Problem

Situation

·         New ViBAN® eyewear is 1st optical product designed for those who suffer from carsickness

·         Product helps those who have difficulty reading or focusing while riding in moving vehicle

·         Blocks views from outside vehicle giving person undisturbed view inside

·         Can be used in car, truck, bus, taxi or train

Significant Points

·         Up to 40% of people have this problem

·         Sensory imbalance resulting from body believing it is both stationary & moving causes carsickness

Web Source

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Sourced from: Detroit Automotive Press Assn Meeting 11-13-01

27) Turbo Market Grows In Search Of Improved Fuel Economy; Turbo-Gasoline Engines Average 15% Better, Diesels 10%

Situation

·         Turbo-charging demand on rise, especially in Europe, says Dr SM Shahed, Garrett Engine Boosting Systems VP

·         10% greater fuel economy averaged with turbo-diesel engines, 15% with gasoline engines

·         Based in Torrance, CA, Garrett investing $60M in Euro diesel this year to boost capacity of variable nozzle turbine (VNT) turbo-chargers

·         Present CA emission standards met by turbo engines, but stricter 2007 "clean-clean" rules pose problem

·         Shahed, president-elect of SAE, notes turbo vehicles bring $200-$500 more in value on remarketing

·         33% of Euro market, or 4.9M units this year, turbo-diesels, & 2006 total likely to reach 7.3M, or 47%

Significant Points

·         Garrett believes coming cuts in CO2 emissions can be met with VNT-equipped turbo-diesel engines in Europe, CA

·         Smaller engines can benefit from turbo-charging, says Dr Shahed, "with 2L acting like 3L"

·         Old problems met by turbos, like acceleration "lag" & failure to meet emission standards, now "behind us," says speaker, Garrett VP for advanced tech

·         $1B+ company, Garrett invented electrically-assisted turbo-charged electronically controlled & totally independent of engine speed

Web Source

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Sourced from: Automotive News, 11/12/01

28) Mid-Sized Car Segment Losing Battle Against SUVs; Toyota's Camry Is Target To Beat

Situation

·         Toyota Camry is 1st attack in mid-sized car wars shaping up in next 4-years

·         Auto marketers in trenches preparing marketing & product strategies

·         Mid-sized car segment has seen buyers migrate to myriad SUVs

·         Automakers prepared to win battle with big investments in marketing & new products

·         Competing for smaller number of buyers

·         Premium mid-sized segment will garner 2.8M sales by 2005 down from 3.1M in 2000

Significant Points

·         Consumers want more reasons besides practicality to buy hum-drum mid-sized car

·         Planning expanded versions of present mid-sized models by mid-decade

·         Introducing sporty trim levels to attract younger, performance-oriented buyers

·         Using everything from cartoon characters to nostalgia to sports to woo consumer

·         SUVs will replace mid-sized cars as #1 selling vehicle segment within next 5-years

Web Source

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Sourced from: The Associated Press, 11/15/2001

29) Mazda Loses $2.7M In Product Liability Verdict; Driver's Seat Collapsed Upon Impact

Situation

·         Starkville, MS woman, Velma Ruth Seavy, paralyzed from waist down, injury driving 1992 Mazda Protege

·         Struck from behind while stopped waiting to make left turn

·         She fractured 12th vertebra upon hitting upper part of back seat

·         Driver sued automaker after Sept 11, 1993 accident

·         Oktibbeha County jury ruled in favor of Seavy

Significant Points

·         Lawsuit claimed Mazda driver's seat collapsed backward upon impact, throwing Seavy into back seat

·         Seavy won $2.7M product liability verdict against Mazda Motor Corp

Web Source

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Sourced from: Transport Topics, 11/14/01

30) FAA Rule Bans Freight From 'Unknown Shippers' In Passenger Airlines

Situation

·         Federal Aviation's (FAA) deputy director & president Cargo Airline Assoc spoke as panelists at TransComp convention

·         Trucking companies may have to register as freight forwarders if they wish to haul freight to airports

·         Since Sept 11, FAA does not want freight from "unknown shippers" in cargo hold of passenger airlines

·         Specifics of rule could not be discussed due to security concerns

·         Cargo Airline Assoc instructs airlines & freight forwarders to think about relationship with shippers & how much they know about them

Significant Points

·         Cargo airlines (FedEx, Airborne, UPS & DHL) are scanning & searching cargo accepted from unknown shippers

·         Cargo companies sometimes use passenger airlines for timely shipments & have to operate by their rules

·         Rule may have impact on some cargo companies who have drop boxes for customers in hurry

Web Source

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Sourced from: Automotive News, 11/05/2001

31) Future Car Interiors Will Offer Choice & Versatility, No 2-Interiors May Be Alike

Situation

·         Future auto interior trends hint buyers will be able to choose from myriad of alternatives

·         Automakers may eventually offer buyers so much choice that possibly no 2-interiors will be identical

·         Automakers experimenting with instrument panels that can be reconfigured, allowing color & gauge font changes to suit individual tastes

·         Each driver can choose to see or not see gauges, depending on preference for voice commands

·         Audi already offers choice of 3-different interiors with different personalities on some models

Significant Points

·         While difficult to assess trends for auto interiors, some developments could be implemented within next decade

·         Customizing will take 2-forms: automakers building it into cars & motorists can add accessories after purchasing car

·         More efficient use of interior space will be priority, with heating & A/C mechanicals moved to less crowded locations, routing air ducts through floor

·         Conversion of mechanical components to electronic creates more space: steer by wire eliminates steering column; or younger drivers could drive with joysticks

·         Miniaturization of components like powertrain & using compact fuel cells could allow for expansion of cabin, creating room for limo-style rear seat

·         Designers experimenting with new ways to make seats like Lear Corp's web seat that eliminates foam padding & frees space underneath seat creating light, airy interior

Web Source

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Sourced from: Reuters & The Chicago Tribune, 11/09/2001

32) Grand Cherokee Inadvertent Rollaway Complaints Climb Closer To Recall; 5-Deaths, 184 Injuries

Situation

·         Federal regulators stepped-up investigation of 1.8M Jeep Grand Cherokee SUVs, 1993-98MY & possibly through 2002

·         NHTSA received addt'l complaints about vehicle suddenly shifting from park to reverse, "inadvertent rollaway in reverse"

·         Most people reported SUV would suddenly go into reverse shortly after they shifted to park & while vehicle was idling

·         NHTSA has been able to reproduce problem

·         Automaker feels government has gone to some unusual lengths to reproduce them

Significant Points

·         NHTSA received 865 complaints; up from 48 complaints when opened inquiry on June 28

·         359 crashes that led to 184 injuries & 5-deaths

·         NHTSA duplicated problem in test vehicle with auto transmission linkage properly adjusted & in good condition

·         Testing showed no park-to-reverse failures occurred on steep incline

·         Tests did show 3-park-to-reverse failures with vehicle on flat ground

Web Source

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Sourced from: The New York Times, 11/14/01

33) Bush Orders Strategic Petroleum Reserve Topped Off To Buffer Potential Future Supply Problems

Situation

·         Strategic Petroleum Reserve is network of underground caverns in Louisville & Texas

·         SPR contains 545M-barrels; 700M capacity

·         700M-barrels is US 53-day supply if all imports halted

·         SPR has never been full

·         48M-barrels due from last year's loan of oil from SPR

·         Filling SPR will take 100K-barrels/day for 2-yrs

Significant Points

·         Purchasing remaining 108M-barrels will cost $2.3B at current prices

·         Energy Department will convert public land drilling contracts from cash to oil payments

·         Decision comes at time when oil glut exists lowering prices & threatening oil industry health in US

·         US less susceptible to OPEC embargo than 30-years ago when SPR created

·         Announcement came on eve of OPEC meeting about cutting production to bolster price

Web Source

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Sourced from: The Wall Street Journal, 11/16/01

34) OPEC Warns Other Producers Of $10-Barrel Prices; Insists They Cut Production

Situation

·         OPEC insisting on $500K-barrels/day production cut from non-OPEC before making further cuts

·         OPEC produces 40% of world exports

·         Cooperation of non-OPEC producing nations necessary to control price

·         Mexico pledges 100K, Oman 50K, Norway still considering but all only if Russia cuts 300K-barrels/day

·         Russia's symbolic offer of 30K cuts not serious--actually planning increases of 17%

Significant Points

·         OPEC warns crude oil could drop below $10-barrel hurting producing nation economies; $17.48 on 11/15/01

·         Russia discussing cooperation to keep prices $16-22 instead of $25-28 OPEC targeting

·         Lower oil prices good for poor world economy

·         Oil price war is creating volatility in markets

Web Source

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Sourced from: The New York Times, 11/15/01

35) OPEC Loses Bid To Cut Output; Non-OPEC Exporters Give Only Token Commitments To Cut Oil Production

Situation

·         OPEC made 3-production cuts (3.5M-barrels/day) in 2001 to support $25-barrel crude oil prices

·         OPEC withholding addt'l 1.5M-barrel/day cuts unless non-OPEC producers cut 500K-barrels by 1/1/02

·         Mexico instrumental in 1998-99 cooperation to cut worldwide production when oil was $10-barrel

·         Non-privatized Russia (2nd-largest exporter after Saudi Arabia) offers only token cuts of 30K

·         Norway rejected making cuts at all

·         Even OPEC members overproducing while price $21-barrel

Significant Points

·         Lower demand for jet fuel & sluggish economy producing glut of crude oil & falling prices

·         Price fell another 9% on OPEC's stance closing 11/12/01 at $19.74

·         OPEC cuts to raise price were met w/ others increasing production taking its market share

·         OPEC strategy aimed at forcing others to cut production as price plummets

·         OPEC stands to lose most because their economies are oil-dependent

Web Source

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Sourced from: The Wall Street Journal, 10/31/01

36) Will New York’s New Cell Phone Law Be Enforced In Light Of Sept 11, Anthrax, Terrorists?

Situation

·         New Yorker’s recently started living under nation’s 1st statewide ban on driving while talking

·         New law requires drivers to use hands-free system for making calls while driving

·         If caught holding phone, drivers face fines of $100 per violation

·         Law enforcement insists law will be actively enforced

·         1-month "warm up" period allows police to only issue warnings, not tickets

·         Last year, 43 states proposed some type of regulation on cell phone use in cars

Significant Points

·         With police spending so much time dealing with terrorist threats, some question level of enforcement

·         Research divided on how dangerous it is to talk on phone while driving, researchers want more data

·         NY law allows for data collection on new law’s effectiveness

·         Some cell phone companies embracing new law as opportunity to sell new services & features

Web Source

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Sourced from: Collision Week, 10/30/01

37) Toyota Partners With Private College To Recruit & Train New Technicians

Situation

·         Toyota formed new educational partnership with Universal Technical Institute

·         Toyota Professional Collision Training designed to recruit, train, & develop entry-level collision-repair technicians

·         Toyota worked closely with UTI to develop & implement guidelines & graduation requirements

·         Toyota to provide Toyota workbooks & pay cost of students’ ASE testing fees

·         Students must complete intensive 51-week training in general & Toyota-specific collision repair

Significant Points

·         Helping to meet growing demand for entry-level collision repair technicians

·         Graduates prepared to work in select Toyota Certified Collision Centers

·         TCCC to provide tool scholarships to each hired graduate

Web Source

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Sourced from: USA Today, 11/11/01, page 1B

38) Not All Automakers Meeting Voluntary Industry Side Air Bag Standard; Door-Mounted Bags Perform Poorly

Situation

·         Few side air bags in 2002 model-year vehicles designed to meet voluntary industry standard

·         Side air bags some automakers installed since 1996 not safe for children, says government data

·         Earlier tests done by GM & Honda found bags could fling unbelted child across car causing injury

·         NHTSA knows of only 1-person being seriously injured by side air bag

·         Ford offers side air bags in 80% of 2002 vehicles

·         Side air bags in every 2002 Toyota model except Corolla meet standard, Corolla will in January

Significant Points

·         50%+ side air bags in 13 1999-2001 vehicles tested by NHTSA didn’t meet new standard

·         NHTSA data show door-mounted bags, used in Mercedes & BMW, exceeded injury levels in 5-of 5-tested

·         Those deployed from seat better, but surpassed acceptable injury levels in 4-of 10 cars tested

·         Head air bags & curtains met standard more easily, prompting Ford & others to consider changing

Web Source

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