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auto beat MITSUBISHI BACKERS TO DOUBLE INVESTMENT.
The three Mitsubishi group companies that pumped $2.4
billion into ailing Mitsubishi Motors Corp. last May will
double their investment under the new turnaround plan
MMC unveils later this month, reports today’s Nihon
Keizai Shimbun. Mitsubishi Corp., Bank of Tokyo-Mitsubishi and Mitsubishi Heavy Industries will buy $2.4 billion in new
common and preferred shares in MMC, according to the
newspaper. It says the automaker will ask Japanese
banks for nearly $1 billion in new credit. Last December media reports said MMC had burned through $4 billion in funds collected through its previous
turnaround plan. Ten days later Mitsubishi Corp., Bank of
Tokyo-Mitsubishi and Mitsubishi Heavy pledged to
contribute $1.9 billion in new funding to the company. The new recovery plan calls for MMC to write down the value of its North American and Australian operations
and continue pursuing alliances with other automakers. To
r e v e r s e l o s s e s i n N o r t h A m e r i c a , M M C w i l l h i r e
AlixPartners LLC, the Southfield, Mich.-based turnaround
advisory firm. COST OF U.S. SAFETY STANDARDS: $839 PER VEHI-
CLE. The National Highway Traffic Safety Administration
says the auto safety standards it has promulgated since
1968 have added an average $839 to the cost of today’s
passenger vehicle. NHTSA says the standards also have added about 125 lb in equipment per vehicle compared to models built
before 1968. Its analysis includes such features as
antilock brakes, child safety seats and airbags but not
more recent technologies such as side airbags or elec-
tronic stability control systems. The agency figures its safety requirements have saved about 329,000 lives since 1960, more than half of
them because of seatbelts. It estimates the cost of safety
technology at about $544,000 for every life saved. FIAT, GM TO MEET AGAIN OVER PUT OPTION. Fiat
SpA and General Motors Corp. will meet as early as
Thursday to continue discussion over the put option that
could force GM to buy the remaining 90% of Fiat Auto it
doesn’t already own, Reuters reports. Separately, GM is expected today to say it took a $220 million writedown in the fourth quarter of 2004 to
reflect the declining market value of its stake in Fiat Auto. GM and Fiat are trying to resolve their differences about the validity of the put option before Jan. 24. That’s
when Fiat is allowed to ask a New York court to enforce
the option. GM has indicated it would fight such an order. SALES, EARNINGS UP FOR JOHNSON CONTROLS.
Johnson Controls Inc. netted $168 million in its first fiscal
quarter ended Dec. 31, up 2.4% from the previous year.
Revenue rose 11% to $7 billion. Operating income from JCI’s automotive business increased 2%, but its profit margins were squeezed by
price reductions and higher raw material costs. The supplier of seats, interior systems and batteries said it expects a double-digit increase in net income for
the current fiscal year on 8%-10% higher sales. AMERICA’s VEHICLE SCRAP RATE HITS 11-YEAR
LOW. Only 5.3% of the vehicles on U.S. roads were
scrapped in 2004, the lowest proportion since 1993,
according to R.L. Polk & Co., the industry’s oldest statisti-
cal service. It was the fourth consecutive year of decline. T H E D A I L Y R E P O R T F O R A U T O M O T I V E E X E C U T I V E S daily ™ W E D N E S D AY J A N U A R Y 1 9 , 2 0 0 5 PA G E 1 O F 3 Contents © 2005 Hampton AutoBeat LLC. All rights reserved. Research. Watson Wyatt has conducted some of the most extensive demographic research in the business, including reports on global aging, hybrid
pension plans and phased retirement. Our industry-leading research efforts
identify the critical human capital issues facing today's companies worldwide
and point to cutting-edge approaches for addressing these issues. Call one of our automotive experts at (248) 936-7560 or visit us on the Web at www.watsonwyatt.com Human Capital Consulting HR Technology Employee Benefits daily auto beat W E D N E S D AY J A N U A R Y 1 9 , 2 0 0 5 PA G E 2 O F 3 Polk says the scrap rate for passenger cars fell from 5.2% in 2003 to 4.8% last year—the lowest pace since
1948. The scrap rate for light trucks declined by 1.7 points
to 6% last year. The scrap rate for passenger cars dipped to 4.8%, the lowest since the 4.1% rate recorded in 1948. The rate for
light trucks slipped to 6% from 7.7% in 2003. Polk attrib-
utes the trend to improved durability of most vehicles. The Polk survey says the nation’s car fleet is older than ever. The median age of passenger cars last year
rose by 0.3 to a record 8.9 years. The median age for light
trucks declined to 6.4 years from 6.6 years, mainly
because of continuing strong new-truck sales in 2004. DCX REORGANIZES NORTH AMERICAN INFORMA-
TION TECHNOLOGY. Karenann Terrell has been named
vice president and chief information officer for Chrysler
Group and Mercedes-Benz North America, a new position. Terrell, who began her new assignment on Jan. 1, formerly was director of managed services and interna-
tional systems at Chrysler. She is responsible for all North
American information technology serving engineering,
manufacturing, sales and marketing, human resources,
finance and communications. She reports to Sue Unger,
DaimlerChrysler’s CIO. As part of a broader IT reorganization, Michael Gorriz will take over the new position of vice president and CIO
for the Mercedes Car Group. In a step to bring greater
efficiency to the company’s IT spending, Joseph Bulat,
head of DaimlerChrysler ’s purchasing of technology
systems, will now report directly to Unger. GM BROADENS CHEVROLET LINEUP IN CHINA.
General Motors Corp. is expanding its Chevrolet brand in
China next month with new small and midsize models and
a new network of as many as 100 new dealers. GM’s joint venture with Shanghai Automotive Industry Corp. will produce the cars in addition to the Buick Regal
and Sail models it already assembles. GM has marketed the Chevrolet Blazer SUV and GM Daewoo Matiz, rebadged as the Chevy Spark, in China for
some time. Last year its began importing its Saab and
Cadillac brands to China. Now it wants to focus on the small and midsize car segments, which account for about two-thirds of China’s
new passenger vehicle sales. GM holds about 8% of China’s passenger vehicle market. Last summer the company said it will spend $3
billion to double its annual capacity in China to 1.3 million
vehicles and introduce about 20 new or redesigned
models by the end of 2007. NHTSA PROBING HONDA ACCORD IGNITIONS. The
National Highway Traffic Safety Administration is looking
into complaints that the ignition keys on some 1.2 million
Honda Accord cars can be removed when the automatic
transmission isn’t in park. NHTSA has received 75 complaints about the prob- lem in 1999-2001 models. In 2003 Honda recalled about
647,000 1998-1999 Accords, Odyssey minivans and
Acura TL vehicles and 2002 CR-V SUVs to replace worn
ignition switches that caused the same problem. The agency said there have been 11 crashes when Accords have rolled after the driver removes the key, but
no one has been injured. NISSAN IMPLEMENTS GLOBAL PARTS TRACKING.
Nissan Motor Co. has begun coding major components
with detailed data to help it identify problems more sharply
and narrow the scope of product recalls, reports today’s
Nihon Keizai Shimbun. It says Nissan’s proprietary code will assign parts with a serial number, the date and time of manufacture and the
vehicle model for which it was made. Nissan has begun using the system to code certain cylinder blocks, camshafts and other engine components
made in Japan. The Nihon Keizai says the system eventu-
ally will be expanded to transmissions and other compo-
nents globally. It also says the coding system will be
supported by Renault SA, Nissan’s 44% owner. FIAT LOOKS FOR A BUYER OF IVECO FINANCE UNIT.
Fiat SpA is trying to sell the financial services arm of its
Iveco commercial truck business, according to Dow Jones
Newswires. The news service reported the same thing
last September. Fiat has sold controlling interest in financial entities tied to some of its other businesses, including 51% of Contents © 2005 Hampton AutoBeat LLC. All rights reserved. Bose ® automotive surround sound. To hear a better performance you’ll have to buy a ticket. Fidis, Fiat Auto’s finance arm. Analysts tell Dow Jones
that selling 51% of Iveco Finance might raise about $195
million and remove about $3 billion in gross debt being
carried by the unit. CHRYSLER PLANS FIVE NEW MODELS IN 2005.
Chrysler Group, which debuted nine new or redesigned
vehicles last year, will add another five this year, confirms
CEO Dieter Zetsche. He hasn’t identified all five, but three of them will be the Dodge Charger sedan, Jeep Commander SUV and
Dodge Ram Mega Cab pickup truck. The math indicates Chrysler will debut a record 11 new models in 2006 to meet its previously stated goal of
debuting 25 new vehicles between 2004 and 2006.
Z e t s c h e , s p e a k i n g t o t h e A u t o m o t i v e N e w s Wo r l d
Congress earlier this week, promises a “brisk pace” of
additional new models beyond 2006. EDS, TOWERS PERRIN TO CREATE NEW HUMAN
RESOURCES OUTSOURCING SERVICE. Electronic
Data Systems Corp. and Towers Perrin are forming a new
company to sell human resources services. EDS will own
85% and Towers Perrin will own 15% of the new company,
which hasn’t been given a name yet. T h e c o m p a n y w i l l c o m b i n e To w e r s P e r r i n ’s Administration Solutions business with EDS’ payroll and
HR outsourcing operations. The partners say the new
organization will start with more than 400 clients in
Europe and the Americas and annual revenue of about
$600 million. Separately, Towers Perrin announced it has awarded EDS a 10-year, $365 million contract to provide information
technology services for all Towers Perrin global operations. W E D N E S D AY J A N U A R Y 1 9 , 2 0 0 5 PA G E 3 O F 3 auto beat daily STOCK SYMBOL CLOSE CHANGE DOW 10,628.79 +70.79 NASDAQ 2,106.04 +18.13 American Axle AXL 28.38 -0.15 ArvinMeritor ARM 20.26 +0.14 Autoliv ALV 46.46 -0.10 BorgWarner BWA 54.02 +0.19 Cooper Tire CTB 22.06 +0.30 DaimlerChrysler DCX 45.94 +0.10 Dana DCN 16.31 +0.01 Delphi DPH 7.97 -0.03 Dura Automotive DRRA 10.05 +0.47 EDS EDS 22.10 +0.41 Ford F 14.08 +0.02 STOCK SYMBOL CLOSE CHANGE General Motors GM 36.77 -0.36 Gentex GNTX 33.39 +0.26 Goodyear GT 15.36 +0.04 Hayes Lemmerz HAYZ 7.86 +0.09 Honda HMC 26.28 -0.37 Johnson Controls JCI 61.47 +0.23 Lear LEA 55.00 -0.26 Magna International MGA 77.86 -0.10 Nissan Motor NSANY 21.94 -0.28 Tenneco Automotive TEN 16.12 -0.09 Toyota TM 80.72 -0.78 TRW Automotive TRW 19.69 +0.05 Visteon VC 8.73 +0.16 T U E S D AY ’ S C L O S I N G S T O C K S Contents © 2005 Hampton AutoBeat LLC. All rights reserved. AUTOBEAT DAILY is a publication of Hampton AutoBeat LLC, Box 33068 Bloomfield Hills, MI 48303-3068 SUBSCRIPTIONS: PAULA DOAN (888) 771-6430 paula@autobeatdaily.com ADVERTISING: DAN KEELAN (248) 455-7252 DKeelan@cbs.com NEWS: BILL HAMPTON (248) 540-2530 bill@autobeatdaily.com D O Y O U R C O L L E A G U E S G E T I T ? __________________________ Have AutoBeat Daily delivered to your entire group or company at a deep discount. Contact Paula toll-free at (888) 771-6430 for details.

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