March 25th, 2010 at 12:08pm
Class action lawsuits could end up costing Toyota $40 Billion. Daimler and Renault look to develop vehicles and components in a partnership. The Obama administration holds a meeting on electric vehicles and the cooperation of utilities at the White House. All that and more, plus John answers your comments and questions in today’s “You Said It!”
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Toyota faces $40 billion in lawsuits. Daimler and Renault decide to dance together. And a big meeting about EVs takes place in the White House today.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Thursday, March 25, 2010. And now, the news.
In a courtroom in California today, a federal judge will determine if class action lawsuits can be filed against Toyota. These lawsuits are for owners who seek compensation because the resale value of their Toyotas have gone down due to all the negative publicity against the company. They are also filing racketeering charges against Toyota, saying it knowingly sold defective products. The AFP reports this could become the largest legal action ever taken against a car company. It cites Tim Howard, a law professor from Northwestern University, who is leading the class action lawsuits, as saying this could cost Toyota $40 billion.
Not only that, now Bloomberg reports that an opinion poll shows American consumers are turning against Toyota. Four out of ten now say they would never buy a Toyota. In fact, the company was viewed favorably by fewer than half of consumers, only 49%. GM is viewed favorably by 57%, Honda by 70% and Ford topped the poll, getting a favorable rating by 77% of consumers.
Ford may be popular with consumers, but it’s told its shareholders they’re not going to get any dividends anytime soon. Ford’s CFO Lewis Booth says the company needs to conserve cash, so it’s not going to pay out any dividends for now. Of course, the company’s stock has been going up so much that most shareholders will not complain…for now.
And Ford has figure out a way to preserve some of that precious cash. Using a program called PC Power Management, the company is now controlling the power settings on company laptops and desktop computers from a central location. It can shut them down when not being used, and load in updates during non-working hours. Ford says this will boost productivity and save over a million dollars a year when its fully implemented.
Earlier this week we reported that Honda avoids partnerships with other automakers because it says they lead to inefficiency. But apparently Daimler and Renault don’t see it that way. According to the AFP, the two are close to a deal where each would own 3% of the other’s stock. They want to develop a small car platform together and share components for light trucks and electric cars. The deal is likely to be announced next month.
Yesterday we reported that Toyota increased its incentives since its wave of recent problems, and now Honda is following suit. According to Bloomberg, the company is offering incentives on all Honda-brand vehicles in the U.S. for the very first time. The incentives, which run through the beginning of May include, no down payment or security deposit, no money due for a month and a waiving of fees when the agreement is signed.
The Obama administration is holding a meeting today with automakers about electric vehicles. According to the Detroit Free Press, the two sides want to explore how they can work with utility companies to improve the introduction electric cars. Both industries are concerned about the infrastructure and how much energy demand the vehicles will create. Meeting in the White House will be the Detroit automakers, a number of foreign ones including Honda and Nissan, and start ups like Tesla and Fisker.
Coming up next, it’s time for You Said It!
And now it’s time for You Said It!
HyundaiSmoke wrote in to say, “An interesting Tid Bit that just came hot off the press. Fact-80% of 1 Series owners already think they have a FWD car. So, I guess that Front Wheel Drive BMW idea might not be such a bad thing after all?”
Isn’t that an amazing statistic? 80% of BMW 1-series owners thought their car was front wheel drive. No wonder BMW is going away from its tag line “The Ultimate Driving Machine.” Its owners don’t even know they own one!
Mouhamad A. Naboulsi saw our report on a Tata Nano catching fire and says, “I knew Tata will be hot, but boy I never thought that they’ll be on Fire.”
Mouhamad, what a bad pun. But I have to admit we almost used the same line in our report.
And finally, Bill Warner, the founder and co-chairman of the Amelia Island Concours d’Elegance wrote in to say, “As a fan of Autoline, I was pleased to see the report on the RM auctions at Amelia. With RM and Gooding combined, the total sales on Amelia Island topped $34 M in a period of less than 24 hours. It appears that many investors are hedging their bets against inflation with tangible assets…..also, the market has been down and appears to have reached bottom. The Ferrari “Daytona” Spyder that once belonged to both Roger Penske and Edsel Ford had sold in the RM Maranello auction for $1.4 M about three years ago, so the $1.1M sale price at Amelia was off the previous purchase price, but still good considering the market in general.”
“Thanks for the plug and tell John he should come visit next year.”
Bill, thanks for the invitation. I’d love to take you up on it.
Don’t forget to tune in to Autoline After Hours for the best insight and commentary in the automotive business. That’s tonight at 7PM ET.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.