Managing Automotive

News, knowledge, and insights for the automotive industry.

Managing Automotive
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BMW to Mazda Imports Slowed as Strike Shuts Baltimore Port

A contract dispute which prompted 2,000 Baltimore Port union longshoremen to walk off the job and close the port, puts pressure on the supply chain of Mazda Motor Corp. and BMW as shipments are caught in the middle of the walk-out. The dispute revolves around a contract signed by the International Longshoremen’s Association which needs to be signed by all local labor unions. Local 333, one of four Baltimore chapters, rejected the contract and prompted a work stoppage on October 15. Chrysler shipped about 124,000 units through the port in 2012, while Mercedes-Benz also said about one third of its sales are processed through Baltimore Port. [Bloomberg]

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Tesla Tops California Green-Car Credit Sales in Past Year

Tesla Motors Inc. was the top seller of California zero-emission vehicle credits last year with 1,311.52 credits, while Toyota topped hybrid-car credit trades with 507.5 AT PZEV credits. Companies listed by California that acquired ZEV credits for last year were: Chrysler, GM, Honda, Jaguar Land Rover, Subaru, and Volkswagen. Tesla has reported $119 million in ZEV credit sales this year, with each Model S generating up to seven ZEV credits. [Bloomberg]

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Litigation
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Mini Coopers misrepresent ‘Lifetime’ Transmission Fluid, Lawsuit Claims

A class action lawsuit against BMW Group claims the automaker “failed to disclose that neglecting to replace the transmission fluid – per BMW Group’s instructions – leads to sudden and premature transmission failure” in some Mini Cooper vehicles. The lawsuit also alleges the warranty “expressly misrepresents to consumers and to automotive services that, although transmission fluid must be changed for the standard Mini Coopers, this service was not necessary.” A spokeswoman for Mini said the company could not comment on any pending litigation. [ABC News]

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Tennessee VW workers say company coercing them to join UAW

Four workers from Volkswagen’s Chattanooga, Tennessee plant filed charges with U.S. labor officials alleging German VW officials are coercing them to agree to UAW representation and that the plant would not get additional vehicle production and future jobs unless a Works Council – which, according to one anti-union group, would force workers to accept the representation of UAW union officials – was installed at the plant. U.S. labor law requires any such council to be recognized through a U.S. trade union, or else be considered an illegal company union. [Reuters]

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Fiat Union to Meet UAW Leaders on Chrysler Deal Impasse

Fiat SpA’s union leaders will meet United Auto Workers officials next week in hopes to beat the stalemate over the Italian automaker’s efforts to merge with Chrysler Group LLC. A UAW retiree health-care trust is forcing Fiat and Chrysler CEO Sergio Marchionne to prepare for a listing of Chrysler because the two sides cannot agree on the value of shares held by the union fund. Fim Cisl national secretary in charge of Fiat relations, Ferdinando Uliano, said, “We are concerned that a Chrysler initial public offering would harm a combination of the two carmakers . . . We’ll tell the UAW that only a merger of Fiat and Chrysler would grant a positive future for both companies’ workers.” [Read the Article]

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Advance Auto to Buy General Parts for Top America Ranking

Advance Auto Parts Inc. will buy General Parts International Inc. for $2.04 billion in an all-cash acquisition. Advance Auto said in a statement, “[the takeover] creates the largest automotive aftermarket parts provider in North America, with combined sales of over $9.2 billion.” The companies plan to close the deal by early 2014; Blackstone Group LP and JPMorgan Chase & Co. were financial advisers to Advance Auto. [Bloomberg]

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Accavitti: American Honda Needs to Take More Risks with Marketing

American Honda’s Senior Vice President of Automobile Operations, Mike Accavitti, said the company needs to take more risks with marketing to strengthen its bond with consumers. Accavitti also said Honda has already reallocated about 30 percent of its yearly marketing budget to allow for more risky endeavors – 20 percent for marketing initiatives which may advance Honda’s business goals using new mediums, and 10 percent for “cutting-edge” initiatives which may also carry a high probability for failure. The remaining 70 percent of the budget will be used to continue Honda’s standard marketing procedure of vehicle launches, TV advertising, digital advertising, and other mainstream efforts.

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Litigation
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Jury Verdict Clears Toyota but Hands Down $10 Million Verdict against Driver in Unintended Acceleration Lawsuit

After six days of deliberation, a Los Angeles county jury cleared Toyota Motor Corp. of responsibility in the first of “bellwether” cases, Yasuharu (Peter) Uno et al. v. Toyota Motor Sales USA Inc. et al., LASC case number KC057888/JCCP4621.  The family of the 66 year old driver, Noriko Uno, filed the action after her 2009 Camry accelerated out of control, causing her death.  The family’s lawyer argued a brake override system could have saved Uno’s life.  The brake override fail safe was adopted by many automakers in the early 2000s, but was not required under federal vehicle safety standards. Toyota did not begin using the brake override in its vehicles until 2010.  In awarding Uno’s family with a $10 million verdict against the co-defendant driver, the jury found the accident was entirely the fault of the driver who crashed into the Camry, causing Uno to accidentally step on the accelerator and race out of control.

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US Receives $570.1 Million From September GM Share Sale

The US Treasury Department received $570.1 million from its partial sale of GM shares as the government diminishes its investment in the carmaker. The automaker held its IPO in 2010 at $33 a share. Investor confidence is rising in company while shares have climbed 23 percent this year, outpacing the 19 percent increase for the S&P’s 500 Index. The government has recovered $36 billion of the $51 billion it spent to bail out GM and may complete selling its stake before the end of 2013. [Bloomberg]

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Litigation
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Takata to pay $71.3 million fine over seat belt price-fixing charges

Takata Corp will pay a $71.3 million fine to settle antitrust charges brought by U.S. federal prosecutors.  Additionally, 20 companies and 21 executives have agreed to pay $1.6 billion in fines overall and plead guilty in the United States. The proposed settlement is the latest in a long-running probe in several countries of price-fixing of more than 30 types of car parts, including seat belts, radiators, windshield wipers, air conditioning systems, power window motors and power steering components.  In some cases, the price-fixing lasted a decade or longer. [Reuters]

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