Automobile Industry

The drastic reinvention plan that General Motors Corp. unveiled Monday would leave the onetime world goliath a smaller, leaner company -- with its legendary Pontiac brand discontinued -- but puts the automaker on a collision course with bondholders that could still land it in Bankruptcy Court. GM proposed a painful downsizing that would eliminate 21,000 workers, 2,600 dealers, $44 billion in debt and four brands -- while making the U.S.

Perhaps the most attention-getting Super Bowl ad - other than that dog blackmailing his owner with tortilla chips to keep quiet over a felinicide, of course - was Clint Eastwood's paean to a resurgent auto industry in Detroit. The ad featured Eastwood leveraging his cinematic persona to the hilt, emerging from the shadows while praising and challenging Americans at the same time. “It's halftime in America too,” Eastwood rasped during halftime at the Super Bowl in a manner reminiscent of the Detroiter he played in “Gran Torino.”  “Seems that we've lost our heart at times.

The road to recovery for U.S. automakers could be jammed with hundreds of thousands of gas-guzzling used cars, which President Obama hopes will be traded in for more fuel-efficient vehicles -- with the lure of government money. So-called cash-for-clunkers programs in Germany and France have worked well this year to spur new car sales. But similar initiatives aimed at reducing smog in Southern California have not fared so well in recent years.

U.S. automakers, which have long battled perceptions of poor craftsmanship in their cars, edged out imports in a key benchmark of quality for the first time in nearly a quarter century. Led by improvements at Ford Motor Co. and General Motors Co., the domestic industry topped J.D. Power & Associates' latest initial quality study — something that has never happened before in the survey's 24 years. The Toyota brand, a perennial star in the survey, plunged below average as it has struggled with massive recalls.

The sleek Infiniti G37 Cindy Marsh bought last August was the car of her dreams, equipped with the latest keyless electronics technology that allows her to start the engine with the touch of a button. But right away, the system gave her trouble. To get the engine started, she would sometimes have to tap the power button repeatedly. Sometimes it wouldn't start unless she opened and closed the car doors, Marsh recalled. She eventually adapted to the system's quirks but said that even now she isn't sure how to shut off the engine in an emergency.

More signs emerged Tuesday that the U.S. auto industry may actually be recovering from its deep slump, despite estimates of anemic January sales and Toyota Motor Corp.'s suspending sales of eight vehicle models because of accelerator problems. Ford Motor Co. said it would hire 1,200 workers, and General Motors Co. announced a big investment in manufacturing electric engines. Also, Dutch sports-car maker Spyker Cars said Tuesday that it had struck a deal to acquire Saab from General Motors.

The monthly sales reports released by the world's automakers Wednesday carried a double dose of bad news for the U.S. Trouble in the housing market has spread to dealer showrooms, with worrying implications for the broader economy, and Detroit is no longer the carmaker of choice for the majority of Americans. In July, import brands grabbed a majority share of the U.S. market for the first time as sales by the Big Three nosedived.

"We offer everything!" car salesmen Gary Starr exclaims, all shirt sleeves and teeth. "CD players, tinted windows, hands-free cellular phone, even power windows. We'll lease you a car. We take trade-ins too, as long as they're electric." As the sharp aroma of roasting espresso breezes along the street in downtown Santa Rosa, past the furniture store and the Omelette Express, Starr, president of Solar Electric Engineering Inc.

Campaigning within a mile of each other at one point, President Bush and challenger Patrick J. Buchanan wooed Michigan voters Friday with promises to aid the ailing automobile industry. Bush, in a speech to a business group meeting in this suburban headquarters of Ford Motor Co., announced he was scrapping an Environmental Protection Agency regulation that new cars be equipped with canisters to capture gasoline fumes that escape when fuel is pumped into gas tanks.

A new bill of rights for California car buyers provides grace periods for used-car purchases, caps dealer compensation on loans and features other provisions that are some of the strongest consumer protections in the country, according to state legislators and consumer advocates. The law, which went into effect July 1, applies to motor vehicles bought in California from a dealer for personal, family or household use.

On a summer day in 1911, Donald MacPherson was driving his Buick runabout to Sarasota Springs, N.Y., when the wooden spokes snapped on a rear wheel, flipping the open car and trapping him under the rear axle. MacPherson suffered a badly lacerated eye and a broken wrist so painful he couldn't grip the tools he needed to ply his craft as a stone cutter. He sued Buick Motor Co., alleging negligence in failing to ensure the wheel was roadworthy. In what would become a landmark ruling in product liability law, the New York Court of Appeals in 1916 awarded MacPherson $5,025 in compensation -- about $115,000 in today's dollars -- and established the automaker's "duty of care" to ensure customers are sold a safe product.

Federal regulators in 2007 asked Toyota Motor Corp. to consider installing software to prevent sudden acceleration in its vehicles after receiving complaints that vehicles could race out of control, company documents show. Yet the automaker began installing the safety feature, known as brake override, only this January after a widely publicized accident involving a runaway Lexus ES that killed four people near San Diego. Safety regulators acknowledged late last week that they pressured Toyota anew last fall to consider the override software in the wake of that crash, which set off a chain of events leading the company to issue nearly 10 million recall notices worldwide.

Apologizing for Toyota's missteps in dealing with defects blamed in dozens of fatalities, a contrite Akio Toyoda told members of Congress that his company's rapid growth had "confused" the priority it places on safety. "Quite frankly, I fear the pace at which we have grown may have been too quick," the president of Toyota Motor Corp. said during more than three hours of testimony. "I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced."

Toyota Motor Corp. officials took credit for saving hundreds of millions of dollars by persuading federal regulators to limit or avoid safety recalls and rules, a company document released Sunday shows. The document, an internal company presentation, depicts an automaker focused on getting what it termed "favorable recall outcomes" from regulators, with a goal of saving money even as the death toll climbed from accidents in which Toyota vehicles accelerated uncontrollably. The presentation by executives in the company's Washington, D.C., office was addressed to Yoshimi Inaba, Toyota's top U.S. executive, and dated July 6, 2009 -- months before the sudden-acceleration problem was widely known outside Toyota and the federal highway regulatory agency.

Between the Super Bowl and word that thousands of Prius hybrids could soon join the millions of vehicles already being recalled, Sunday threatened to be an awful day at Toyota of Glendale. But a slow stream of customers headed into its Brand Boulevard showroom throughout the morning and early afternoon. Some were looking for bargains, some for answers and some loyal customers were looking to buy. This weekend a company spokesman said Toyota was considering recalling its 2010 Prius hybrids because of problems with the anti-lock brake system.

California electric car maker Tesla Motors Inc. plans to raise up to $100 million in an initial public offering, according to a filing with the Securities and Exchange Commission. The move brings the innovative car company, which has long enticed car enthusiasts, one step closer to becoming a household name. The price of shares or the timing of their availability is still unclear, but industry observers expect the much-anticipated offering to be well-received by investors.

Financially strapped Ford Motor Co. says it will boost introduction of new and revamped cars and trucks. But only by increasing the fuel economy of its vehicles well beyond federal requirements will the automaker avoid going under, a study from a respected academic and former industry insider said Monday.

Toyota Motor Corp. officials took credit for saving hundreds of millions of dollars by persuading federal regulators to limit or avoid safety recalls and rules, a company document released Sunday shows. The document, an internal company presentation, depicts an automaker focused on getting what it termed "favorable recall outcomes" from regulators, with a goal of saving money even as the death toll climbed from accidents in which Toyota vehicles accelerated uncontrollably. The presentation by executives in the company's Washington, D.C., office was addressed to Yoshimi Inaba, Toyota's top U.S. executive, and dated July 6, 2009 -- months before the sudden-acceleration problem was widely known outside Toyota and the federal highway regulatory agency.

Here in this Mississippi Delta county, they are waiting for the return of the slender man in the elegant suit -- the one who spoke, in a heavy Chinese accent, of a promise that couldn't have been more welcome or fashionable. It was the promise of a new green industry, with hundreds of green jobs. "I heard about it," said Claude Boyd, a 41-year-old farmhand out of work after the winter harvest. "I need it bad. I've got good references." Joey Lowery, 42 and also unemployed, sounded a skeptical note.