Nutson's Nuggets - Automotive News Factoids Week of April 28-May 4, 2014
Auto Central Louisville, KY May 4, 2014 (Derby Day +1) Each week Larry Nutson, Senior Editor, New York Bureau of The Auto Channel, along with Steve Purdy and Thom Cannell from The Auto Channel Michigan Bureau give you easy to digest nuggets of the past week's automotive news you may have missed.
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Automotive News Factoids Week of April 28-May 4, 2014
* Top story in automobile industry news this week is the formal announcement that Alan Mulally will step down as Ford CEO July 1st to be replaced by long-serving Ford exec, current COO, Mark Fields. The move was no surprise as it had been talked about for some time but the timing had been unconfirmed. Fields said he is planning no major changes in company leadership or strategy. Mulally has revealed no future plans for himself.
* Spring has thawed the auto industry with sales up 8% to about 1.39 million. The SAAR is over 16 million. Trucks out sell cars with 51% of new vehicle sales. Ford F-150 leads the pack closely followed by the redesigned Chevy Silverado. Improving fuel economy and stable fuel prices make it easier to make the purchase decision for those who want a truck. The new Ram pickup came in at number 4. Toyota had three vehicles in the top 10 - Camry, Corolla and CR-V. Honda scored two with Accord and Civic. Ford Fusion came in at number 9. In spite of GM's ignition recall they are up 7%.
* The average fuel economy of new vehicles sold in the U.S. last month was 25.4 miles per gallon — an increase of 5.3 mpg since October 2007. The uptick reflects a combination of consumer demand and an increase in fuel efficiency among light-duty vehicles produced by automakers, according to a report from the University of Michigan Transportation Research Institute (UMTRI). Meanwhile, the latest data from the UMTRI Eco-Driving Index estimates a 20% reduction in greenhouse gas emissions for the average driver who purchased a new vehicle in January 2014 compared to October 2007.
* In real estate it's: location, location, location. In the auto industry it's: product, product, product. One would think that corporate compensation had been based heavily on product success. Well now it will be more so. Ford and GM employee bonus payments were only 10 percent dependent on meeting product quality targets. Ford will hinge 20 percent of bonuses for 2014 — paid in early 2015 — on the company meeting quality standards, which include the number of what the industry calls “Things Gone Wrong” — a standard metric that measures problems in vehicles —as well as the costs of warranty claims and customer satisfaction. GM this year has increased the quality component of its bonus structure to 25 percent.
* Toyota Motor Corp. said it will move its North American headquarters from California to Texas. The Japanese automaker will move its headquarters from Torrance, Calif., over the next three years to a single, 70-acre, state-of-the-art campus in Plano, Texas. The move will affect 2,000 employees at Toyota Motor Sales in Torrance, 1,000 at Toyota Motor Engineering & Manufacturing in Erlanger, KY and 1,000 at Toyota Financial Services in Torrance, plus employees from Toyota’s New York office. At the same time it is expanding its R&D center near Detroit. Texas landed Toyota because it has no state income tax, lower housing costs, a strong pro-business stance and solid quality-of-life ratings. The cost of living in Plano, for example, is 31 percent lower than in the Los Angeles-Long Beach area, which includes Torrance. The move will be transparent to Toyota and Lexus owners and shoppers. In the official announcement Toyota boss Jim Lentz talked about "preparing for the next 50 years."
* Mercedes-Benz is recalling nearly 253,000 C-class 2008-11 vehicles, including the C300, C350, C63 built from 2007 through mid-2011, in the United States to correct a problem with the tail lights.
* Harley-Davidson is recalling about 9,100 motorcycles because they can unexpectedly run out of fuel and stall. The recall covers the 2013-14 FXSB Breakout and FXSBSE CVO Breakout models built from March 20, 2012, to March 10, 2014.
* Another automobile anniversary will be celebrated soon - the modern iconic sports car, Mazda MX-5 Miata. Mazda launched a special Website this week (http://mazdausa.com/MusaWeb/displayPage.action?pageParameter=modelsMain&vehicleCode=MXR#anniversary-panel) where you can prepare to order your Anniversary Edition starting at a surprising $32,205. Only 100 of these will be produced, all with the retractable hard top. The 2015, fourth generation, Miata will be coming soon but the date was not announced. Pricing has been announced, though, starting at a modest $23,970.
* We reported earlier that popular former Hyundai US boss John Krafcik was appointed to the Board of Directors of automotive data and sales Website TrueCar. Some had speculated that he may be looking at running the business and we learned this week that will indeed be the case. Krafcik has been named president of TrueCar. The company is planning an initial public offering of stock in the next few months.
* The U.S. Treasury Department revised upward its assessment of the total cost of the G.M. bailout resulting in a carefully managed bankruptcy. Citing an accounting error the Treasury now says the bailout cost $11.2 billion instead of the previously estimated $10.3 billion.
* Our R.I.P. note for the week is Nigel Stepney, the former Ferrari mechanic who was at the center of a spying scandal that rocked Formula One racing in 2007, who died in a traffic accident in Kent, England. He was 56. Mr. Stepney, who had worked closely with Michael Schumacher at Ferrari, effectively becoming his personal engineer, leaked nearly 800 pages of confidential Ferrari information to Ferrari’s British Formula One rival McLaren Mercedes before the 2007 season. He was convicted in Italy of sabotage, industrial espionage and sporting fraud, and in 2010 was sentenced to 20 months in prison. He did not serve the sentence, but he never worked in Formula One racing again.