June 28th, 2010 at 12:00pm
China’s Premier, Wen Jiabao, is urging companies and local governments to build more “harmonious employment relations.” Ford has to make a big payment into the UAW’s retiree health-care trust and Wall Street is very interested if it will pay in cash or in stock. Fisker is not going to meet the production timetable it announced last fall. All that and more, plus a look at an advanced new tire-pressure monitoring system from Continental.
Transcript and Story Links after the jump . . .
It’s Monday, June 28, 2010 and here’s the news.
CASH OR STOCK?
Ford has to make a big payment into the UAW’s retiree health-care trust and Wall Street is very interested if it will pay in cash or in stock. Ford needs to pay $859 million into the VEBA trust, but may want to preserve cash and pay with stock instead. According to Bloomberg, Wall Street believes it will pay in stock if it thinks the price of those shares are not going anywhere. If it thinks its stock is still going up, it will pay in cash. I would add that if Ford pays the union with stock, share prices will probably drop more. It’s the psychology of the market. Even though the shares would only represent 1.5 percent dilution, the company would be sending a signal that the future looks weaker than before.
CAR DEALERS EXEMPT FROM NEW REGS
Even though the U.S. financial system faces new regulations, car dealers will pretty much be exempt from the new rules. The Detroit News reports that dealers successfully lobbied Congress, saying they weren’t the cause of the financial collapse and that more regulations on them wasn’t going to fix anything. Consumer groups wanted a new regulatory agency to cover dealers because they write $250 billion in loans every year, which is nearly 80 percent of all car loans.
CHINA LABOR COSTS RISING
More about that labor unrest in China. The Chinese Premier, Wen Jiabao, is urging companies and local governments to take more effective measures in addressing labor cost issues and to build more “harmonious employment relations.” According to Bloomberg, China’s cost of labor is expected to hit 30 percent of its gross domestic product over the next decade, double what it is right now.
KIA ON STRIKE
And speaking of labor unrest, Kia’s workers in South Korea voted to go on strike last Friday.
FORD’S CURVE CONTROL
Ford’s redesigned 2011 Explorer hasn’t even debuted yet, but the company keeps announcing more of the technology and safety features it’s going to have. Months back it was inflatable seatbelts, then, a few weeks ago Ford detailed the SUV’s new terrain management system – complete with a Land Rover-inspired control knob. Now the company is talking about something called “Curve Control.” According to the Detroit News, this safety feature is an add-on designed to complement the existing stability control system. It’s designed to detect oversteer AND understeer, and then use individual wheel braking to correct the vehicle’s path to help keep it on the road. According to Ford, it’ll be the first system of its kind on the market. This patent-pending technology has been in development for about a year and a half
FISKER MISSES PRODUCTION DEADLINE
In electric-vehicle news, the Detroit News reports that Fisker is NOT going to meet the production timetable it announced last fall. The $88,000 Karma plug-in sports car was scheduled to go on sale this summer, but wouldn’t you know it, it’s not – NotGonnaHappen.com to quote Peter De Lorenzo, the Autoextremist. A company spokesman says a handful of customers should get their cars by the end of this year and that full production is expected to start sometime in the first quarter of next year. He also said that technical issues are NOT to blame for the delay; instead, the company has had trouble raising money from private equity markets. I would point out Fisker got over half a billion dollars in loans from the Energy Department, but needs to raise more money because that government money can only pay for 80 percent of the cost of a project.
Coming up next, a look at an advanced new tire-pressure monitoring system. We’ll be back right after this.
Tire-pressure monitors are nothing new. In fact, they’ve been mandatory on all new vehicles sold in the U.S. since 2007. On our recent trip to Germany, Continental showed us a sophisticated new type of sensor that it’s developing.
Conti is pushing the boundaries of what these little pressure sensors can do. Relocating them from the rim to the cavity offers engineers a world of new data about what your tires are doing as they go down the road. Of course safety is the company’s main focus with this research, but there are other benefits as well – like convenience.
Ok, big deal you’re saying. The car knows when it’s got the right amount of air in its tires. That’s the whole idea behind these systems, right? True, but this setup goes beyond that. It can monitor pressure in REAL TIME. If you’re topping-off a low tire for instance, it can alert you with a chirp from the horn and a flash of the hazard lights when you’ve hit the proper level. There’s no need for you to use a separate pressure gauge.
The company also demonstrated a slick iPhone/iPod Touch application that dynamically shows the pressure of each tire. Again, if you’re filling one up you can watch your progress on the screen and know exactly when it’s topped off.
Tire-pressure monitoring systems are not mandatory across the globe yet, but more and more countries will require them in the coming years. Look for Continental’s Intelligent Tire Monitoring System to launch in 2013.
And hey, stay tuned, there’s a lot more to Conti than just tires and pressure sensors. We’ll have more reports from our trip to Germany in the coming weeks.
Tonight is our Open Line discussion where we open our phone lines, and any automotive topic you want to tackle is up for grabs. Michelle Naranjo has a report of some of the topics tackled on last week’s show.
Open Line starts tonight at 8 p.m. Eastern Time, 5 p.m. Pacific. Call in at 1-218-936-6581 and enter the PIN 12870. Visit our website to get more details on how you can participate.
And that’s it for the most important news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.