Auto Outlook: Nearly midnight at Saab

By AL SWANSON, United Press International  |  Nov. 13, 2011 at 5:30 AM
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Time is running out for Saab.

General Motors Co., which sold its former Swedish car unit to Swedish Automobile in 2009, opposes the sale of Saab to two Chinese auto companies.

Say what?

Well, it seems GM, which is about 26.5 percent owned by the U.S. Treasury after its 2009 bailout, still has a sizeable interest in Saab stock and has a say in its proposed sale to Chinese companies Pang Da Trade Co. and Zhejiang Youngman Lotus Automobile Co. -- which offered $140 million for 100 percent of Saab last month.

Saab was one of four brands GM sold or dropped during its bankruptcy restructuring -- the others being Hummer, Pontiac and Saturn.

The takeover deal by Monday needs the approval of government officials in Stockholm and Beijing, as well as the European Investment Bank, which loaned money to Saab, and from GM, which licenses technology used in several Saab models. Saab's 9-4X crossover was assembled at a GM plant in Mexico, but no 2012 models are being built.

GM said it would no longer license its technology to Saab if the sale went ahead, The Wall Street Journal reported.

Asking GM to help save Saab from liquidation is like asking Cinderella's evil step-sisters for permission to keep her at the ball after midnight.

"Although General Motors is open to the continued supply of powertrains and other components to Saab under appropriate terms and conditions, GM will not agree to the continuation of the existing technology licenses or the continued supply of 9-4X vehicles to Saab following the proposed change in ownership as it would not be in the best interest of GM shareholders," GM said in a statement.

The two Chinese companies had announced ambitious plans to provide a bridge loan allow Saab to resume operations and $600 million to pay creditors and fund new products, including construction of a future Saab plant in China.

Saab, which halted production in March when unpaid suppliers cut off credit, has sold fewer than 5,000 vehicles in the United States this year, The Detroit News said, after selling just 5,800 vehicles last year.

The clock is about to strike midnight.


Ford retools MyFord Touch for 2013

Smarting from criticism of its onboard MyFordTouch infotainment system in Consumer Reports' reliability survey, Ford last week announced improvements and upgrades.

Ford's overall reliability fell from 10th place to 20th in the magazine's annual survey largely because of problems with voice-control recognition and touch screen electronics in new Focus and Explorer models.

The year-old MyFordTouch system, which replaced the popular Sync, controls music, navigation, cellphone calls, and heating and cooling.

Consumers said the touch interface was too complicated and didn't work as advertised. Users complained of freezes or no response at all.

Ford said it would add the upgraded system to 2013 Escape, Taurus and Flex models and provide owners of older vehicles a USB flash drive to update their MyFordTouch systems free of charge. Those not comfortable with that can have a dealer perform the upgrade, which Ford says makes MyFordTouch faster and simpler.

The new infotainment system has 3-D maps, improved cellphone compatibility and permits connection of tablet computers, The Detroit News says.

The new interface has a bigger clock, larger fonts, and icons that look like knobs replacing a lot of buttons that were cluttering up the screen.

"Just as we love our electronic devices and can't live without them, we always want them to be better. And that's exactly what our customers told us," Graydon Reitz, director electronics and electrical systems engineering told the Detroit Free Press.


Thailand floods continue to impact automakers

The worst flooding in a half-century in Thailand has caused parts shortages for automakers in North America.

Honda last week cut its North American production in half because of the problems affecting parts production in Thailand. Last Tuesday it extended cuts at six North American plants through Nov. 23, The Detroit News reported.

Thai companies produce many key electronic parts for vehicles.

Both Ford and Nissan shut down their assembly plants in Thailand because of the flooding. Toyota said parts shortages had disrupted production in Thailand, Vietnam, Indonesia, the Philippines, Japan and the United States.

The Thai flooding and the March 11 earthquake and tsunami in Japan have hit Toyota's bottom line. Toyota said its quarterly profit fell 19 percent, or $1 billion, from July through September, partly because of natural disasters and partly because of the rising value of the Japanese yen.

Akio Toyoda, vice chairman of the Japan Automobile Manufacturers Association, warned last week that Japanese auto production could collapse if the yen continues to strengthen, The Wall Street Journal said.

Nearly 30 percent of Toyota vehicles -- about 3 million cars and trucks -- are made in Japan with more than half being exported, The New York Times reported.

Production of Japanese automakers slipped 20 percent from April to September, the association said.

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