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Corporate News: Chrysler Takes a Bite Out of Viper --- Auto Maker Lops Off 15% of Sports Car's
Price Amid
Disappointing Sales Against............................................................................................................................................5
Corporate News: U.S. New-Car Sales Sizzle..................................................................................................................7
U.S. Compacts Gain Ground --- Chevrolet Sonic and Ford Fiesta Leapfrog Rivals Toyota, Honda and Mazda ............9
This is not your father's minivan ; Sales picking up for passenger versions of vehicles ...............................................11
Few Thrills, but More Frills ............................................................................................................................................13
Fiesta ST: Track star, but road ruffian ; It's a blast, if you have bum of steel................................................................16
Corporate News: Car Makers Crank Up Sales Incentives ............................................................................................18
Ford Recalls 160,000 Turbocharged Vehicles ..............................................................................................................19
Version 1.0: More Boost Than Eco ...............................................................................................................................20
S.U.V.s and Trucks Lift Monthly Vehicle Sales .............................................................................................................22
Corporate News: U.S. Auto Sales Sizzle in July --- GM, Ford, Chrysler Post Strong Gains; Incentive Spending Keeps
Showrooms Full.............................................................................................................................................................24
To Lift Sales, G.M. Turns to Discounts..........................................................................................................................26
Price hikes on aluminum F-150 from minor to mega.....................................................................................................29
Ford Reports $1.3 Billion in Earnings ............................................................................................................................30
Ford posts 20th consecutive profitable quarter ; $2.6 billion earnings beat estimates..................................................32
Rather sporty Fiesta fires on all 3 cylinders ; Gets job done, even if it sounds like a lawn mower ...............................33
Corporate News: Contrasting Fortunes for GM, Ford --- Profit at Nation's Largest Auto Maker Hit by Recall Charges;
Ford Up On Strong U.s., Asia Results...........................................................................................................................36
Ford's Play: Slim Down to Pick Up ................................................................................................................................38
Ahead of the Tape .........................................................................................................................................................39
In Chaos, Venezuela's Factories Grind to a Halt...........................................................................................................41
Corporate News: Ex-Ford CEO Mulally Joins Google's Board......................................................................................44
ON THE MOVE .............................................................................................................................................................45
Car Makers to Road Test MPG Claims .........................................................................................................................46
Muscle cars break 700-hp barrier ; Trip back to days of cheap gas and screeching tires ............................................48
Corporate News: Foreign Brands Bring Car Loans to China --- Toyota and Ford Offer Interest-Free Loans to Lure
Buyers While Mercedes Rolls Out Lease-Like Financing Deals ...................................................................................50
Corporate News: Corporate Watch ...............................................................................................................................52
Ford sweetens pay deal for its new CEO ; Fields greeted with 13% raise, stock, millions in incentives.......................55
Recent recalls haven't hurt Ford, GM sales as much as expected ...............................................................................56
Corporate News: GM Trying to Turn Its Cars Into Wi-Fi Hotspots ................................................................................57
Page 1 of 188 © 2020 Factiva, Inc. All rights reserved.
Corporate News: U.S. Car Sales Climb Higher .............................................................................................................58
In China, Engineers Are Hard to Keep ..........................................................................................................................60
Air-Bag Fix Needed, But It's Not 'Recall' .......................................................................................................................62
Pension Funds Missed Stock Rally --- Push to Diversify Portfolios Didn't Pay Off for Large Investors, Including
University Endowments .................................................................................................................................................64
Air-Bag Recall Hits 10 Million Cars --- Honda, Nissan, Chrysler Join List of Firms Seeking to Replace Defective
Device That Can Explode..............................................................................................................................................66
2015 Chrysler 200 sweet disappointment ; Easy on the eye, fun on the foot, but not perfect ......................................69
Corporate News: Gripes About New Cars Tick Higher .................................................................................................72
Corporate News: Aluminum Cars Take Heat From Mittal .............................................................................................74
Have You Shopped for a '70 Ford Lately? ....................................................................................................................76
Free music for members of Prime Lower fuel economy ratings for Ford cars...............................................................78
Ford cuts mpg ratings on some autos ; Automaker to pay compensation ....................................................................80
Ford Admits Overstating Fuel Ratings ..........................................................................................................................81
MKC in brand booster club ; Lincoln hopes to shine among small luxury crossovers...................................................83
Detroit's Appetite for Aluminum Grows..........................................................................................................................85
Car Makers Jockey for Pole Position in China ..............................................................................................................87
Corporate News: Corporate Watch ...............................................................................................................................88
Automakers Pledge $26 Million to Save Detroit Art ......................................................................................................91
U.S. News: Car Makers Join Effort To Keep Intact Detroit's Art....................................................................................93
Corporate News: Auto Sales Surge in the U.S. --- Recalls Don't Sting for GM as May Industry Sales Reached 1.6
Million Vehicles..............................................................................................................................................................94
Unleashing Innovation: Manufacturing (A Special Report) --- One Thing Isn't New In Car Design: Auto makers still
create full-size clay... .....................................................................................................................................................96
OFF DUTY --- Gear & Gadgets -- Rumble Seat: Ford Fiesta: One Liter Isn't Just for Soda Anymore..........................98
Ford issues four recalls involving 1.3M cars, SUVs ; Escape, Mariner, Explorer among the vehicles cited ...............101
An Increase in Vehicle Recalls Extends Beyond Just General Motors .......................................................................102
Corporate News: Ford Alters Course And Issues a Recall .........................................................................................104
Ford Faces Hurdles in China Expansion .....................................................................................................................106
All Fancy Hat and No Horse ........................................................................................................................................107
Farmers Seen Supporting Vehicle Sales in Thailand ..................................................................................................108
New Dent in Navistar's Truck Sales --- Ford Motor Prepares to Return Medium-Truck Production, Now Outsourced, to
Its Own Factory ...........................................................................................................................................................109
Ford Recalls Vehicles for Air Bag Flaw .......................................................................................................................111
Ford Recalls 1.4 Million Crossovers; G.M. Recalls 9,000 Sedans ..............................................................................112
Ford, Chrysler issue recalls over defects ....................................................................................................................113

Corporate News: Thai Car Sales Sputter Amid Turmoil ..............................................................................................115
The Chatter for Sunday, May 3 ...................................................................................................................................117
Small and City-Smart, Microvans Proliferate...............................................................................................................118
More Pickup Buyers Opt for V6s .................................................................................................................................119
Video: The Ford Fiesta ST Is a Party on Wheels ........................................................................................................121
New Ford Chief Faces Tough Array of Choices ..........................................................................................................122
5 things Ford's new CEO needs to do.........................................................................................................................124
G.M. Sales Increased 7% in April, Apparently Unaffected by Recalls ........................................................................125
Corporate News: Sales Spring Ahead for Car Makers ................................................................................................127
For Ford and GM, Margins in the Mirror May Look Bigger ..........................................................................................129
FORD EXECUTIVE SAYS HIRING EXCEEDS PLEDGE ...........................................................................................131
Goodbye Econoline, hello Transit ; New van to offer 3 lengths, 3 heights ..................................................................132
Politics & Ideas: Welcome to the Well-Educated-Barista Economy ............................................................................134
Vintage Defenders on the prowl ; Entrepreneur gives old Land Rovers expert TLC...................................................136
New Vehicles and Recalls Cut Ford Profit ..................................................................................................................138
Corporate News: Ford Profit Falls on Warranty Costs --- Car Maker Sets Aside $400 Million for Repairs; Results Hit
by South America Loss... ............................................................................................................................................140
Corporate News -- The Upshot: China Lures More Investment --- Foreign Car Makers Keep Building More Factories,
Models and Dealerships ..............................................................................................................................................142
Rail Logjam Leaves Some New Cars At Factories .....................................................................................................144
30,000 Golf Carts and 4,000 Heavy Duty Ford Trucks Recalled ................................................................................146
Mulally vs. Piketty ........................................................................................................................................................147
Mulally's Legacy: Shifting Ford To Stronger Course ...................................................................................................149
Ford's heir apparent set to take the wheel ; Mark Fields to replace popular Alan Mulally...........................................151
Mulally helped Ford fly ; CEO changed automaker's way of doing business ..............................................................152
Corporate News: Ford Boss Reinvented Himself --- Mark Fields Survived a Tough Patch, Now Favored to Lead No. 2
U.S. Car Maker............................................................................................................................................................154
Ford Boss Mulally To Exit Early ..................................................................................................................................156
A shale-oil boom beckonsin Mexico's danger zone.....................................................................................................158
A Mustang Option: Matching Nail Polish .....................................................................................................................161
Corporate News: Car Makers Woo China's First-Time Buyers --- Stakes Are High for Manufacturers Stepping Up
Efforts to Tap Consumer Interest... .............................................................................................................................162
OFF DUTY --- Gear & Gadgets -- Rumble Seat: Fusion Cuisine: Lincoln MKZ Isn't a Full Meal................................164
Ford's China Beachhead for Lincoln --- U.S. Auto Maker Lays Groundwork to Sell Against Audi, BMW,
Mercedes-Benz ...........................................................................................................................................................167
Ford Takes the Transit Up, Up and Away ...................................................................................................................169

A Homecoming of Sorts for Mark Fields of Ford .........................................................................................................170
Corporate News: Round Round Get Around: Ford Mustang, at 50, Climbs the Empire State Building ......................171
Mustang: 50 years of running the roads ; Ford's sporty car went on sale in 1964, changing the auto industry ..........172
For the Auto Industry, a Showcase for Change ..........................................................................................................175
Big Car Makers Race to Recall --- Potential Fines, Criminal Probes Weigh on Firms ................................................177
Corporate News: The Secret to Ford's Surge in China: SUVs ....................................................................................179
My Little Pony, 50 Years Later ....................................................................................................................................181
Corrosion Risk Prompts Ford Recall; Mazda Stung by Spiders ..................................................................................185
The Culture of General Motors ....................................................................................................................................187

Corporate News: Chrysler Takes a Bite Out of Viper --- Auto Maker Lops Off 15% of Sports Car's Price Amid Disappointing Sales Against...
Corporate News: Chrysler Takes a Bite Out of Viper --- Auto Maker Lops Off 15% of Sports Car's Price
Amid Disappointing Sales Against Corvette, Mustang
By Christina Rogers
560 words
9 September 2014
The Wall Street Journal
J
B4
English
(Copyright (c) 2014, Dow Jones & Company, Inc.)
The Dodge Viper, among Detroit's most celebrated muscle cars, is getting a rare $15,000 price reduction amid
disappointing sales in a market that has shown a healthy appetite for sports cars from domestic rivals.
The highest-priced car of Chrysler Group LLC, a unit of Fiat Chrysler Automobiles NV, hasn't shared in the auto
maker's recent success. Chrysler is the hottest car company in America, gaining more U.S. market share in 2014
than any of its domestic rivals.
The Viper, which had been carrying a base price of at least $100,000, will now start at about $85,000. While the
Viper is still more expensive than the Chevrolet Corvette or Ford Mustang, the new price is more akin to its
inflation-adjusted price at first launch in 1992, Chrysler said.
The Corvette, which starts at about $54,000, has enjoyed a recent resurgence with a much-anticipated redesign
fueling demand. General Motors Co. sold 2,679 Corvettes in August, compared with just 38 Vipers sold by Dodge
the same month. Ford Motor Co.'s cheaper Mustang has been redesigned for the 2015 model year.
Overall, sales of luxury sports cars are up 35% in the first eight months of 2014 compared with the same period
last year, and domestic sports cars have led the way with sales more than tripling in that period.
U.S. sales of cars and light tucks in August also clipped along at the fastest annualized pace in eight years.
Chrysler has posted the strongest growth in the industry, with volume up 14.3% through August and market share
increasing a full percentage point, due largely to demand for its stable of trucks and sport-utility vehicles.
The Viper has fallen far short of Chrysler's expectations. Where it once expected to sell 2,000 models a year,
Viper sales this year through August have totaled 438, and that is a 15% increase compared with the same period
in 2013.
As of the end of August, U.S. dealers had 434 days' supply of the Viper, compared with 42 days' supply of
Corvettes and 71 days for Mustangs.
The Viper first launched in 1992 with a $50,700 price tag, equivalent to $86,130 in current dollars, according to
Chrysler. In 2010, following bankruptcy and the subsequent takeover by Italy's Fiat SpA, Chrysler discontinued
the Viper. It revived the nameplate two years later under an initiative to establish the SRT performance brand as a
stand-alone line.
The new Viper, the fifth generation of the auto, made its debut as a 2013 model. Anyone owning a fifth-generation
model before Monday's pricing reduction will receive a $15,000 certificate toward a new Viper purchase, Chrysler
said.
SRT, short for Street and Racing Technology, has been folded back into the Dodge brand after a failed attempt to
make it stand on its own.
Dealers who had previously wanted to sell the Viper needed to spend $25,000 to obtain special equipment. That
initiative has been shelved, opening the door for all 2,300 Dodge dealers to sell the Viper. the auto maker said.
License this article from Dow Jones Reprint Service
Document J000000020140909ea990000n
Corporate News: U.S. New-Car Sales Sizzle
Corporate News: U.S. New-Car Sales Sizzle

By Mike Ramsey and Christina Rogers
758 words
4 September 2014
J
B6
English
U.S. new-car sales motored higher in August as an improving economy, generous incentive spending and
increased demand for trucks and sport-utilities lifted the annualized selling pace to an eight-year high.
Fiat Chrysler Automobiles NV continued its 2014 winning streak, reporting a 20% increase on the strength of its
Jeep SUVs and Ram pickup trucks. Its results outshone rivals Ford Motor Co., which reported flat sales, and
General Motors Co., which posted a small decline over year-earlier sales.
Overall, industry sales rose to an annualized 17.5 million pace, according to researcher Autodata Corp., the
fastest since January 2006. Among the gainers, Toyota Motor Corp.'s sales rose 6%, Hyundai Motor Co.'s were
up 6% and Nissan Motor Co. reported an 12% gain, all over the same month a year earlier.
In the luxury car race, BMW AG's 11% increase to 27,214 vehicles edged ahead of Daimler AG's 9% gain to
27,078 Mercedes-Benz cars. Sales of Volkswagen AG's Audi brand jumped 27% to 17,101.
The strong performance comes at the end of the summer selling season, when car companies traditionally tack
extra rebates and discounts on vehicles to make room for new models.
Sales also were lifted by an improving U.S. economy.
"If you look at the marco-economic fundamentals, they're all flashing green," Emily Kolinski Morris, Ford's
economist, said on Wednesday. She pointed to robust manufacturing, new housing strength and rising
employment as reasons for continued optimism.
GM's U.S. sales chief, Kurt McNeil, said energy prices, business investment and consumer confidence "are in
good shape" and should fuel demand for the remainder of this year.
The Detroit auto maker's sales fell 1%, which the company blamed on one fewer selling day this year over last
and a tough comparison to strong year-earlier sales. But GM said it also spent less on purchase incentives and
the slump at its Cadillac luxury brand deepened in August despite the introduction of a new Escalade SUV and a
healthy appetite among U.S. consumers for luxury cars and trucks.
GM suffered declines for some of its key passenger cars, including the Chevrolet Malibu, Cadillac CTS, Buick
LaCrosse and the Chevy Volt plug-in car.
Ford reported flat sales ahead of one of the most heavily-anticipated product launches in its recent history. Its
F-series will soon feature an aluminum-bodied F-150 pickup boasting better fuel economy and lighter weight.
Both GM and Ford offered 0% financing on six-year loans in August. GM, however, said it is charging more for its
vehicles, a strategy that led to lower retail sales and boosted the auto maker's reliance on fleet sales, such as
deliveries to rental car companies.
Chrysler, the smallest of Detroit's auto makers, is reaping the benefits of a focus on trucks and SUVs. Jeep sales
grew 49% and the Ram pickup outran domestic rivals. The company offered a $7,000 discount on its minivans.
Beau Boeckmann, vice president of Galpin Motors, which operates new-car dealerships in Southern California,
said business is good for many of the brands he sells, but noted high incentives are needed to sell certain
vehicles.

"The small and midsize cars is where they're really pouring it on," he said. Honda and Toyota have become more
aggressive when it comes to spending on marketing and promotions, he added. Toyota, for instance, offered
no-interest five-year loans on its 2014 Camry sedan.
Auto makers and dealers are forecasting continued strong sales. Steve Szakaly, chief economist for the National
Automobile Dealers Association, said he sees no sign of a change in robust buying patterns. Mr. Szakaly said
sales could rise even higher in the next five months and 2015 will be even better.
Some analysts have raised caution flags, saying vehicle inventories are growing, used-car prices are sagging and
auto makers are adding more production capacity. Additionally, heavier reliance on subprime auto loans raises
questions about whether the 17-million-plus sales pace is being artificially inflated by cheap loans.
Dealers like Adam Lee, chairman of Lee Auto Malls in Maine, aren't overly worried. He said July was one his
group's strongest months in history and August seemed just as strong.
"While we're concerned about the same [demand] questions, we're not really seeing it," he said.
Document J000000020140904ea940002w

U.S. Compacts Gain Ground --- Chevrolet Sonic and Ford Fiesta Leapfrog Rivals Toyota, Honda and Mazda
U.S. Compacts Gain Ground --- Chevrolet Sonic and Ford Fiesta Leapfrog Rivals Toyota, Honda and
Mazda
By Jeff Bennett
664 words
3 September 2014
J
B10
English
August auto sales are due Wednesday and top sellers again are likely to be pickup trucks and small sport-utility
vehicles, both of which are sizzling amid relatively stable gas prices, generous incentives and strong demand for
new cars.
General Motors Co. executives, however, will likely point to success at the opposite end of the market as another
reason to be optimistic as the summer selling season comes to an end.
It has been three years since the subcompact Chevrolet Sonic first appeared and GM is expected to report sales
of more than 13,000 of the small cars in August, a strong month in a crowded segment. Chevy's Sonic, built in
Michigan, was topped among subcompacts in sales through July only by Nissan Motor Co.'s Versa, meaning GM
has succeeded in building market share in a small-car market long dominated by Japanese rivals.
The auto industry is expected to report the sales pace for August rose to 16.7 million vehicles, according to
Barclays, up from 15.9 million for the same period a year earlier. GM's sales are expected to be flat compared
with a year earlier and rival Fiat Chrysler Automobiles NV to post a nearly 12% gain on strong demand for its
Ram pickups.
In general, subcompact cars don't sell at high enough volumes or with high enough price tags to impact big auto
makers' earnings, but they are often seen as a battlefield for young buyers who move up to pricier models. And,
Detroit for decades has struggled to field small cars capable of attracting buyers who otherwise wouldn't be
interested in a domestic car.
The Chevy Sonic's rise follows on the heels of Ford Motor Co.'s success with its Fiesta, which was launched
shortly before GM's small car. Both vehicles are outselling Toyota Motor Corp.'s Yaris, Honda Motor Co.'s Fit, and
Hyundai Motor Co.'s Accent.
"For U.S. vehicles to be outselling most of the Asian auto makers in a small car segment is unusual and
unexpected," IHS automotive analyst Tom Libby said. Japanese car makers dominated the field five years ago by
bringing industry-leading small vehicles to market. But now, he said, "the landscape is shifting."
GM's legacy with small cars is often more associated with econoboxes like the Chevy Aveo, Cobalt and Geo
Metro. When engineers were making creating the Sonic, however, they decided to add a list of snazzy options,
such as heated seats, remote start and navigation screens. This pushed up price tags and boosted appeal.
GM estimates retail prices of its Sonic hit $16,700 in August, about $1,700 shy of the slower-selling Fit but higher
than the Chevrolet Aveo and GM's estimate for the Fiesta. The Aveo, which preceded the Sonic, sold at about
half the volume and held a third of the market share that the Sonic now has.
Brian Sweeney, Chevy's U.S. sales chief, said low-interest rates are boosting sales. GM Financial, which provides
financing, has offered 4% interest rates on Spark and Sonic purchases.
"Many of the [small car] buyers are facing credit challenges," Mr. Sweeney said. "Either they are students or
first-time buyers and GM Financial has worked to help them out."
That is true for Michelle Sanders of South Carolina who recently bought a new Sonic with a rear-view camera,
replacing a 2005 Honda Accord. The 27-year-old said she wanted a fuel-efficient small car.

She said the low-interest rate loans available on the vehicle persuaded her to purchase. She had looked at the
Honda Fit before choosing the Sonic. "I had seen some ads and decided to go take a look," she said. "The pricing
was reasonable and I love the rear-view camera."
Document J000000020140903ea9300026

This is not your father's minivan ; Sales picking up for passenger versions of vehicles
MONEY
This is not your father's minivan ; Sales picking up for passenger versions of vehicles
Chris Woodyard
Chris Woodyard, USA TODAY
660 words
2 September 2014
USA Today
USAT
FINAL
B.6
English
© 2014 USA Today. Provided by ProQuest Information and Learning. All Rights Reserved.
Without much fanfare, Ford has been seeing sales gains for its "unminivan" -- a passenger version of its newly
redesigned Transit Connect small, commercial van.
Ford is branding it as the "unminivan" -- even though it has that minivan trademark, sliding side doors. It has
seating for five or seven passengers in a dressed-up version of what most people think of as a small delivery van.
And even the larger version is substantially more compact than a traditional minivan.
"People still want the functionality, but not with the (minivan) name," says Jessica Caldwell, analyst for
Edmunds.com.
She compares the experimentation with minivans to the same image makeover that automakers attempted with
hatchbacks, which were variously called sportbacks, liftbacks or other names in the 1970s and 1980s.
The Transit Connect, long sold in Europe, debuted in the U.S. as a cargo hauler in the 2010 model year. Though
Ford added a rear seat and more windows to create a five-passenger Transit Connect Wagon for 2011, the
design and shape of that first U.S. version still was very truck-like.
But a redesign for 2014 brought a much sleeker, more minivan- like Transit Connect. It came in two lengths,
allowing not only a five-passenger "civilian" version but also a seven-passenger Transit Connect Wagon that went
on sale in January. The longer version is more than a foot longer than the standard Transit Connect but still
measures about 16 inches shorter than a Honda Odyssey or other full- size minivan.
The new design and additional model have resulted, Ford spokesman William Mattiace says, in more than one
out of three Transit Connects now being sold as passenger versions to individual customers -- more than double
the passenger model mix for the previous generation.
"We're seeing more demand than ever for the passenger version," he says. Transit Connect's overall sales rose
42% in July compared with the same month a year ago. Meanwhile, overall minivan sales were up 5.1%,
according to Autodata. The Transit Connect also has one of the highest percentages of sales to Latino customers
-- about one in five -- for any Ford vehicle.
The Transit Connect Wagon also has a price edge over traditional minivans. The five-seater starts at $25,520
with shipping; the long- wheelbase seven-seater starts at $25,995. That compares with $29,805 to start for a
Honda Odyssey minivan. And the Transit Connect Wagon, like a minivan, can be stocked with a full range of
optional features -- from a sunroof to leather, heated front seats.
Ford has marketed the Transit Connect Wagon largely through alternative promotions to give the "unminivan"
theme more edge. "It's a unique vehicle, so we launched it in a unique way," Mattiace says. Advertising has
included heavy reliance on Twitter, Facebook and Instagram.
Ford has rivals coming in similar five-passenger vans that are better known for the cargo versions. Nissan's
NV200 has been adopted as a taxicab for New York City. And Chrysler's Ram division has a passenger version of
the ProMaster City (a version of a Fiat van sold in Europe) coming next year.

Mattiace says the vehicle's practicality is bringing in more than customers looking for a minivan alternative. He
says it also is attracting buyers who owned other smaller, practical boxy vehicles such as the Honda Element,
which is no longer made.
The newfangled, small, passenger vans could help renew interest in the minivan segment. Dealers have had a
50-day supply of minivans on their lots, a good sign since new vehicles as a total are averaging about 70 days to
sell, says Alec Gutierrez, analyst for Kelley Blue Book. But, he adds, it appears that more automakers are adding
sales incentives to move traditional minivans, which spur sales but cut profitability.
photo Fiat
Document USAT000020140902ea9200006

Few Thrills, but More Frills
BEHIND THE WHEEL

Automobiles; SECTAU
Few Thrills, but More Frills
By CHRISTOPHER JENSEN
1,337 words
31 August 2014
The New York Times
NYTF
Late Edition - Final
1
English
Copyright 2014 The New York Times Company. All Rights Reserved.
SUGAR HILL, N.H. -- In 2010, with middle age fading in the rearview mirror, Practical Adult Syndrome struck my
wife and me. The telling symptom: the purchase of our first boring car, a 2011 Subaru Outback.
Subaru makes some hilariously entertaining vehicles, notably the WRX and WRX STI. But the Outback is a
station wagon, clearly at odds with more frivolous transports we've owned, which have included a 1971 BMW
2002, a 1984 VolkswagenGTI, a 1986 Toyota MR2 and the surprisingly entertaining 2000 Ford Focus ZX3
hatchback that our Subaru replaced.
But relocating to the White Mountains of New Hampshire -- to a house in a snow-prone region with a steep
driveway -- we concluded that the Outback was the perfect choice. Its 8.7 inches of ground clearance and
all-wheel drive would also make traveling a rough, muddy road to go hiking or kayaking less worrisome.
We consoled ourselves with the idea that the Outback, despite a name that suggested adventure, wasn't about
fun but about getting someplace to have fun.
It helped. A little.
The 2011 Outback has been, nevertheless, a likable and comfortable tool, a conclusion widely shared in these
parts. A parking lot in New Hampshire often looks like a meeting of an Outback club. But the 2011 does fall far
short of engaging its driver, an issue remedied by the 2015 model.
The latest Outback is the fifth generation of what is probably Subaru's most important vehicle. Last year the
company sold about 425,000 vehicles in the United States; 118,000 of them were Outbacks. An example of the
popular category known as crossovers -- it's car-based but dressed in a sport-utility-vehicle disguise -- the
Outback's competition includes the Chevrolet Equinox, Ford Edge, Hyundai Santa Fe, Jeep Cherokee and Toyota
Venza.
All Outbacks have all-wheel drive. The least expensive version with a 4-cylinder engine costs $25,745, including
an $850 destination charge. The most expensive is the 6-cylinder 3.6R Limited, at $33,845. The model I tested
was the midrange 2.5i Premium with a 4-cylinder engine and a starting price of $27,845; Partial Zero Emissions
Vehicle equipment added $300. The only option was a $2,195 package that included a sunroof, navigation and
power rear lift gate, for a total of $30,340.
Subaru says the 2015 model has new underpinnings, which it shares with the revised Legacy sedan. The
appearance has been updated with a new grille, a windshield that's less upright and some smoother lines that
lessen the appearance of its being bundled up in an unflattering winter coat. The overall length grew by 0.6
inches, to 189.6 inches.
But the biggest change to the body is noticed on a rough road, where the Outback feels exceptionally solid
compared with my weak-sister 2011 model. Subaru says it has increased the torsional stiffness -- a measure of
the chassis' resistance to twisting -- by 59 percent, largely through the more generous use of high-strength steel.

That's just one of the elements that contributes to making the new Outback more interesting to drive. Another is a
reworked suspension. The third is steering that is quicker and has more weight, though still short on delivering a
feel for the road.
Body lean and upward motions are now far more tightly controlled. The vehicle is keener to head into a turn, and
it doesn't demand fiddly steering corrections when that turn includes uneven road surfaces. If the driver is pushing
too hard and overwhelms the grip of the front tires, the computer will briefly apply the brake on the front inside
wheel to help tug the Outback back on course.
The result is that the latest Outback is far more rewarding and confidence-inspiring to drive quickly, though it is
hardly a sport wagon like the turbo Forester XT.
There is a downside to the suspension work. On a rough road our 2011 is notable for its ability to soothe and
smooth. The 2015's ride is significantly stiffer and there's more of a jolt when encountering broken pavement or
tar expansion strips. The new Outback still has 8.7 inches of ground clearance, something appreciated in deep
snow or on an unpaved road.
As before, there's a choice of two engines. The 2.5-liter 4-cylinder has been extensively reworked, cutting noise
and vibration and while improving fuel economy; output has increased to 175 horsepower, from 173. The 3.6-liter
6-cylinder -- largely carried over from last year -- is still rated at 256 horsepower.
All models now use a continuously variable automatic transmission. Previously, a somewhat clunky 6-speed
manual was available on the base model while the 6-cylinder had a 5-speed automatic.
The 4-cylinder provides adequate acceleration thanks to the C.V.T.'s quick response. Subaru claims a zero to 60
run of about 9.3 seconds, so this is not the vehicle for a quick pass on a mountain road, but it keeps up with
traffic.
The upside is that the fuel economy is impressive, particularly for a vehicle with all-wheel drive. The federal rating
is 25 miles per gallon in town and 33 m.p.g. on the highway. That's an improvement over 2014 models of 1 m.p.g.
city and 3 on the highway. Over some 400 miles, traveling two-lanes and Interstates, I averaged just better than
31 m.p.g. without any special effort to economize.
Subaru says the 6-cylinder, also a boxer design, takes the Outback to 60 m.p.h. in 7.3 seconds. The fuel
economy is rated at 20 m.p.g. city and 27 m.p.g. highway. That's better by 3 m.p.g. in the city, and 2 more on the
highway, than last year.
Inside, the first pleasant surprise comes when settling into the driver's seat and pulling the door closed. The
interior door handle doesn't just have soft-touch plastic, it feels plush. That luxury feel is not carried over to the
rest of the Premium trim, but the surroundings are handsome, including the weave of the cloth used on the seats.
The basic controls are mostly intuitive, and there is adequate storage space.
The cargo capacity behind the second row is rated at 35.5 cubic feet, an increase of 1.2 cubic feet. Subaru has
also added more sound-deadening material so the Outback is quieter. Improvements to the 4-cylinder and
continuously variable transmission also reduced vibrations and noise, making long trips less tiring.
The 2015 Outback and its sedan sibling, the Legacy, received a Top Safety Pick+ rating in crash tests conducted
by the Insurance Institute for Highway Safety, a research group financed by the insurance industry.
Like other automakers, Subaru offers a collision-prevention system. Called EyeSight, it uses forward-looking
cameras to detect objects in the vehicle's path and automatically applies the brakes. Based on its tests, the
insurance group gave EyeSight a rating of Superior. The least-expensive EyeSight comes on the Premium model
and costs $1,695 as part of a package that also includes blind-spot detection and a power rear liftgate.
After a week or so of driving the 2015, my wife, Cheryl, mentioned our 2011 and asked: ''Does this mean we have
the crummy one?''
Well, the 2015 Outback is significantly better in everything, from handling to fuel economy without surrendering its
core role as practical all-weather transportation. Crummy might be a bit harsh, a criticism that would just make us
feel bad about our years-ago choice, but the 2015 is much, much better.
(PHOTOGRAPH BY MARTIN CAMPBELL) (AU1); AMBIENCE: The Outback, a vital model in the Subaru line,
gets a handsome new interior treatment for the 2015 edition. (PHOTOGRAPH BY SUBARU OF AMERICA) (AU2)

Document NYTF000020140903ea8v0003t

Fiesta ST: Track star, but road ruffian ; It's a blast, if you have bum of steel
MONEY
Fiesta ST: Track star, but road ruffian ; It's a blast, if you have bum of steel
James R Healey
James R. Healey, jhealey@usatoday.com, USA TODAY
916 words
22 August 2014
USA Today
USAT
FINAL
B.4
English
If you drive often on race tracks, you'll love Ford's pocket rocket, the Fiesta ST high-performance hatchback.
If your driving is more normal, you're likely to hate it. The ride is so hard you wonder if somebody forgot the
springs or shock absorbers.
Judging from the stablemate Focus ST, a bit bigger car, it's clear Ford knows how to make an excellent-handling
car that also rides comfortably.
Ford says the hard ride is the result of deliberately pushing Fiesta ST further toward the very sporty axis than is
the case with Focus ST. That includes tires with significantly shorter -- and thus stiffer -- sidewalls that don't flex
as much to help absorb bumps.
We understand the intent, but think Ford went too far for most people, including even those who like firm
suspensions and tight handling.
Emphasizing its uncompromising personality, ST comes only as a hatchback and only with a manual
transmission. You want an automatic or a four-door sedan, you settle for some other version of Fiesta.
ST is Ford's global designation for Sport Technology, meaning the excellent-handling, more-powerful
performance versions of its cars.
The U.S. Fiesta ST is derived from the European version and is aimed at the malcontents who whine, "Why don't
car companies bring those cool European cars to the U.S.? We never get the good stuff."
The Fiesta ST made its debut overseas in 2005, went through the requisite updates and re-dos, and only showed
up in the U.S. a year ago as a 2014 model. The 2015s that are going on sale now are unchanged.
The ST's bragging points are what Ford calls the "sport-tuned" suspension, upgraded brakes and a more powerful
engine. It also has the cool styling that Ford's been able to execute well on small cars, a challenge. Reasonable
people disagree on matters of taste, so you might not like how it looks.
We had a chance to test the Fiesta ST extensively during the $30,000 Cheap Speed Challenge we did with
Cars.com and MotorWeek and published in late July. It's online at usatoday.com.
The Challenge included time on a race track at a private club in Joliet, Ill., and we love how the Fiesta ST
behaved in that environment.
The little front-drive car had little front-drive imbalance -- at least little that came through enough to spoil the party.
The Ford didn't need as much braking as some other Challenge cars, allowing the driver to keep a high average
speed on the course and sling through the tight corners in immensely satisfying fashion.
But the underpinnings that allow such exceptional track handling are a huge drawback on the street. Even on
smooth roads the car is punishing.
We also find the clutch engagement pretty abrupt, making the Fiesta ST hard to drive smoothly in traffic.
And its infotainment/connectivity features are just OK -- though even that ho-hum level isn't guaranteed on Ford
products with their underlying Microsoft Sync voice-control system.
Seems silly to us that General Motors and Chrysler Group are so good at making those features easy to use,
intuitive, quick- responding and reliable -- usually -- while other automakers, including Ford, deliver generally
awkward setups.
On most other fronts, the Fiesta ST is good-to-great.
Interior seems of good quality, though the design and shapes on the instrument panel might not please
everybody. And there's certainly no richness evident inside the car. Not a cheap-o feel, but not premium.
The hatchback configuration makes the small car useful for toting things too big for a trunk.
Dynamic abilities are excellent. Quick acceleration, reassuring brakes and good steering response make Fiesta
ST a well-rounded high- performance car that delivers driving fun.
The $22,225 starting price is big for a little car, but a good value for the agility, responsiveness and sheer joy the
car can provide in the right circumstances.
But, alas, the Fiesta ST never would grace our driveway without a big upgrade in ride quality.
List
2014 Ford Fiesta ST
What? Hopped-up version of Ford's small, front-drive, four-door hatchback.
When? On sale since August 2013 as a 2014 model; unchanged 2015s now going on sale.
Where? Made at Cuautitlan Izcalli, Mexico
How much? Starts at $22,225, including $825 shipping.
What makes it go? 1.6-liter turbocharged four-cylinder gasoline engine rated 197 horsepower at 6,350 rpm, 202
pounds-feet of torque at 4,200 rpm
How big? Smaller than the Volkswagen Golf GTI, which sometimes is cited as a rival; bigger than Mini Cooper S
or Fiat 500 Abarth, also rivals.
Weighs 2,742 lbs. Passenger space, 85.1 cubic feet, cargo 10.1 cu. ft.
Turning circle diameter, 35.5 ft.
How thirsty? Rated 26 miles per gallon in the city, 35 mpg highway, 29 mpg combined.
Test car registered 31.2 mpg (3.21 gallons per 100 miles) in highway and some suburban and rural-road driving.
Premium recommended, regular acceptable. Tank holds 12.4 gallons.
Overall: Tons of fun for those who can stand a harsh, jarring ride.
List
Whats stands out
Handling: Superb.
Ride: Who forgot the shock absorbers?
Styling: Appealing.
photo Ford
Document USAT000020140822ea8m00005

Corporate News: Car Makers Crank Up Sales Incentives
Corporate News: Car Makers Crank Up Sales Incentives

By Christina Rogers and Jeff Bennett
515 words
21 August 2014
J
B3
English
General Motors Co. is cranking up sales incentives including heftier rebates on many Chevrolet models and
deeper discounts on its top-selling Silverado pickup truck.
The largest U.S. auto maker also expanded a 72-month, zero-percent financing deal to include nearly all
Chevrolet models and no payments for the first 90 days, according to a memo sent to dealers.
The new offers, which run through Sept. 2, further sweeten deals announced by GM last week as part of its Labor
Day sales event, which began early this year.
Ford Motor Co., also seeking to get a jump, launched its Labor Day sale on July 29 with zero-percent financing for
72 months on many models. Chrysler Group LLC began its holiday sales event on Tuesday. Like GM, it is offering
a no-payment financing for the first 90 days.
GM's move comes as car makers, trying to clear out inventory and make way for the new model year vehicles,
strive to hit the three-day holiday weekend hard.
"We are gearing up for the Labor Day selling season, which is a good time to buy a car," said GM spokesman Jim
Cain. "There is a lot of activity out there and we think the program we have will be successful in bringing
customers into the showrooms. The program also keeps our disciplined approach to pricing intact," he said.
Despite strong sales this year, some analysts have warned that the U.S. auto market is near its peak and that the
underlying demand is starting to soften. That means car makers are going to have to work hard to keep sales
growing, putting downward pressure on pricing.
For GM, the need to keep sales rising is particularly important amid a safety-recall crisis that has bruised its public
image. Earlier this year, the company revealed it had delayed for more than a decade a recall of 2.6 million small
cars with an ignition-switch defect. The company has recalled nearly 29 million vehicles in North America since
the start of the year.
The auto maker's U.S. sales are up 3.5% through July to 1.7 million vehicles, but its market share has fallen to
17.8%, down from 18.1% last year, according to Autodata Corp.
GM has also struggled to generate buzz around its newest pickups, the Chevrolet Silverado and GMC Sierra,
both highly profitable models.
Among its new incentives are up to $1,500 in additional cash for certain light-duty versions of the Silverado and
new special rebates for its heavy-duty trucks.
The Detroit auto maker sold 282,776 Silverados through the end of July, or 2.9% more than during the same
period a year ago. Sierra sales were 110,679, or 1.2% higher than the same period last year.
However, sales of GM's two trucks combined continue to lag behind Ford Motor's best-selling F-series pickup
trucks.
Document J000000020140821ea8l0000x

Ford Recalls 160,000 Turbocharged Vehicles
Business/Financial Desk; SECTB

Ford Recalls 160,000 Turbocharged Vehicles
250 words
16 August 2014
The New York Times
NYTF
2
English
Ford is recalling about 160,000 Focus ST hatchbacks and Escape crossovers from the 2013-14 model years
because the turbocharged, 2-liter 4-cylinder engine may lose power or stall, the automaker said Friday. The
action includes about 133,000 vehicles in the United States and 25,000 in Canada.
The connections for the engine wiring harness may have been ''insufficiently compressed,'' Kelli Felker, a
spokeswoman for Ford, said in an email. The defect could lead to drivability problems, including the engine
stalling without warning. Ms. Felker said the automaker was not aware of any accidents or injuries related to the
problem.
The Ford action follows a number of stalling-related recalls, though many have been related to faulty ignition
systems.
General Motors in February began recalling millions of cars for an ignition defect that could cause unexpected
stalling, disabling air bags, and eventually linked the flaw to 13 deaths and dozens of accidents.
Earlier this summer, regulators at the National Highway Traffic Safety Administration said they were investigating
several Chrysler models over concern that jostling the ignition keys could cut power in moving cars -- a potential
defect that mirrors the one that has thrown G.M. into crisis. Last month, Chrysler said it would recall some older
Jeep S.U.V.s to correct an ignition-related stalling problem.
This is a more complete version of the story than the one that appeared in print.
Document NYTF000020140816ea8g0002v

Version 1.0: More Boost Than Eco
BEHIND THE WHEEL

Automobiles; SECTAU
Version 1.0: More Boost Than Eco
By EZRA DYER
1,068 words
3 August 2014
The New York Times
NYTF
1
English
The standard-issue Ford Fiesta is powered by a 1.6-liter 4-cylinder that generates a modest 120 horsepower at
6,350 r.p.m. and 112 pound-feet of torque at 5,000 r.p.m. The lofty r.p.m. numbers for the power and torque
peaks tell you all you need to know: This car is largely gutless unless you're riding it to the redline. Even then, the
base Fiesta won't strain your sternocleidomastoid with undue G forces.
Ford offers two possible upgrades. One is a turbocharged 1.6-liter 4, found exclusively in the Fiesta ST. That
vicious little chupacabra makes 197 horsepower and is intended for people who like to party. The other option is
less dramatic but more intriguing: For an extra $995 on top of your $16,405 2014 Fiesta SE sedan (or $16,905
hatchback), Ford will sell you a 999 cc 3-cylinder that is both more powerful and more efficient than the 1.6-liter
4-cylinder.
This is the 1.0 EcoBoost, turbocharged and equipped with direct fuel injection, tied with the Smart Fortwo's
3-cylinder for the title of the smallest auto engine in the United States market. It's available only with a 5-speed
manual transmission and steel wheels fitted with aerodynamic covers, probably to prevent the price from straying
too far upward (besides its expensive hardware, the 1.0 is built in Germany, while the 1.6 hails from Brazil).
The Fiesta 1.0 EcoBoost tests a hypothesis thus far unexamined on our shores: Will Americans pay a premium
for a car with an engine block that's the size of carry-on luggage?
The Fiesta's twee turbocharger spins as fast as 248,000 r.p.m. Under moderate driving conditions, the maximum
boost pressure is 14.7 pounds per square inch, providing 125 pound-feet of torque at 2,500 r.p.m. But the Fiesta,
like the Porsche 911 Turbo, can also allow a temporary overboost, raising maximum boost to 20 p.s.i. and
generating 148 pound-feet of torque for as long as 15 seconds. Backing off the throttle resets the timer.
Given the generous parameters for the Fiesta's overboost mode -- who keeps the throttle floored for more than 15
seconds? -- one might suspect that Ford made the distinction simply because the concept of overboost might
lead your 1-liter Fiesta to be mentioned in the same sentence as a 911 Turbo. In which case, mission
accomplished.
But horsepower is horsepower, and the 1.0 still doesn't have an embarrassment of it. Its main advantage over the
1.6-liter lies in its low-r.p.m. torque and the consequent improvement in around-town acceleration. A 1.0 Fiesta
doesn't have to work as hard to nip from light to light, which is fortunate because you won't want to listen to its
exertions.
That's partly a result of the uneven blat emitted by its odd number of cylinders, and partly because Ford doesn't
seem to know how to combine EcoBoost virtues with a rewarding soundtrack. I own a car with a 3.5-liter
EcoBoost, and it sounds like a whale with indigestion, all groans and clicks from the intake and injectors.
Sometimes I don't know whether to take it to the dealer or to the scientists at Woods Hole.
But thanks to the 5-speed's gear ratios, which are so far apart they need counseling, you won't have to listen to
the 1.0 unless you deliberately whip it up. Both fourth and fifth gears are overdrives, aimed squarely at fuel
economy rather than sportiness. And fuel economy is obviously a big part of the 3-cylinder's appeal.

To that end, the 1.0 returns impressive mileage, earning the 2015 model an E.P.A. rating of 31 miles per gallon in
town and 43 m.p.g. on the highway. It's hard to be blasé about a nonhybrid that gets 43 m.p.g., but am I wrong to
want something more? Plenty of larger sedans earn 40 m.p.g. ratings, and it'll take a lot of driving before you
realize much savings from the margin from 40 m.p.g. to 43.
Further complicating the EcoBoost argument is that at least some of its efficiency derives from Ford's SFE
package, which is automatically included when you opt for the 1-liter. The SFE trim includes a smoother
underbody, small wings at the base of the wheel arches and those 15-inch steel wheels with aerodynamic covers
and low-rolling resistance tires. Sedans also get a trunk lid spoiler, which is standard on the hatch.
So equipped, a 2015 1.6-liter Fiesta SFE earns an E.P.A. combined rating of 32 m.p.g. The EcoBoost's combined
rating is 36 m.p.g. That's not, fair to say, a huge difference. Thus I conclude that the appeal of the 1.0 lies less in
the Eco than in the Boost.
There's a geek factor here, a satisfaction in knowing that you're on the front edge of the smaller-displacement
trend that began, oh, when Pierce-Arrow stopped building the Model 6-66 Raceabout (13.5 liters, it was).
While the Fiesta 1.0 EcoBoost makes a legitimate case for itself on paper, I suspect its following will come less
from rationalists than from the crowd that finds its small-bore, high-tech approach inherently cool. Compared with
the base model, the 1.0 is a little bit more powerful, a little more fuel efficient and about a thousand times more
interesting.
In software terms, 1.0 refers to the first version of something. In that respect, this Fiesta is indeed American Tiny
Motor Car version 1.0, a smart concept in search of early adopters. Early adopters who can drive a stick.
The 3-cylinder EcoBoost engine, good for 43 m.p.g. on the highway, is a $995 Fiesta option. (AU1); ROOM FOR
MORE: Top, the 1-liter engine fits easily into the space normally taken by a 1.6-liter 4. Above, SFE models get
extra aero body touches. (PHOTOGRAPHS BY FORD MOTOR) (AU4)
Document NYTF000020140803ea8300045

S.U.V.s and Trucks Lift Monthly Vehicle Sales

S.U.V.s and Trucks Lift Monthly Vehicle Sales
By AARON M. KESSLER
884 words
2 August 2014
The New York Times
NYTF
3
English
Sport utility vehicles are back, and in July they helped bolster auto sales nationwide.
On Friday, General Motors, Ford and Chrysler all reported hefty sales gains helped by S.U.V.s as well as a rise in
rebates, zero-percent financing and cheap lease deals.
G.M., despite a long string of recalls, sold more than 250,000 vehicles last month, up 9 percent from a year ago,
and its S.U.V.s had their best month since August 2007.
Chrysler's sales rose 20 percent from a year ago, relying almost exclusively on S.U.V.s and trucks. Jeep sales
were up 41 percent, the best sales month ever for the brand. Chrysler's passenger cars, by contrast, dipped 1
percent.
Ford, whose sales lagged in June, rebounded strongly in July because of a wave of growth in its S.U.V.s,
including double-digit gains for the Explorer, the Escape and the Expedition. Ford sales were up 10 percent over
all in July compared with the previous year, beating analysts' expectations.
The auto industry as a whole in the United States is expected to sell about 1.4 million vehicles for the month, an
increase from last year. The seasonally adjusted annual selling rate for light vehicles was estimated in the high 16
million range -- G.M. itself predicted 16.7 million -- making July the fifth consecutive month that the annual
estimate has topped 16 million.
Steven Szakaly, chief economist for the National Automobile Dealers Association, said that with gas prices stable,
interest rates low and the economy in rebound, it was not surprising that S.U.V. sales were booming again.
''There are many people in America who just don't want to drive a small car,'' he said. ''Everybody's going back to
the light trucks that they love.''
Sales of G.M.'s large S.U.V.s, its most profitable vehicles, have been robust in recent months, and in July their
sales were up 32 percent compared with the previous year.
The Chevy Tahoe's sales rose 52 percent, the GMC Yukon was up 48 percent, and the even larger Yukon XL
jumped 27 percent. While Cadillac was the only G.M. brand to post a sales loss in July, its large Escalade S.U.V.
was the exception: Escalade sales nearly doubled. Sales of even the fanciest version, the Escalade ESV, whose
retail price can reach $90,000, increased 107 percent.
Crossover sport utilities are also proving wildly popular and have become one of the most competitive
battlegrounds in the market.
''You're seeing some customers that may have considered a car before come into the segment,'' said John Felice,
Ford's United States marketing vice president, in a conference call on Friday.
G.M., which owns the large S.U.V. market but faces stiff competition for crossover buyers, has nevertheless
remained strong: Its crossover sales were up 26 percent in July.
Vehicles like Buick's compact S.U.V., the Encore, led the way, with a 28 percent jump. The Encore is now up
nearly 80 percent for the year, helped by G.M.'s extra rebates aimed at bringing in new buyers.
Eustace Phillip, a professor from Canton, Mass., is one of them. He and his wife bought an Encore June 15, even
though they had not even heard of it before that day. Mr. Phillip said they had planned to look at Toyota's Avalon
sedan, but his wife did not like the feel of it. A dealer suggested an Encore, and while they had never owned an
S.U.V., they were drawn to the extra space and higher seating position.
''She opened the door, sat inside, and was hooked,'' he said. ''We went from zero interest in buying it, to test
driving it, to signing on the dotted line.''
Mr. Phillip said G.M.'s incentives also helped seal the deal: a $1,000 rebate plus a $500 ''secret bonus for
Father's Day.''
July is the 11th consecutive month that S.U.V.s and trucks have outsold cars, according to the auto research firm
Edmunds.com, the longest streak since 2005.
Jessica Caldwell, a senior analyst at Edmunds, said that truck sales generally peaked in the fall and winter, then
gave way to cars in the spring and summer. This year, though, that hasn't happened.
''It's very surprising,'' she said. ''They started to get hot last fall, and you might have thought things would slow
down in February or March, but it just hasn't stopped.''
Most other automakers also reported gains for July. Toyota sales were up 12 percent from a year ago, and
Nissan's rose 11 percent. Honda, however, dropped 4 percent.
Volkswagen continued to struggle, posting another disappointing month. Its Volkswagen division fell 15 percent
from a year ago, even as its luxury Audi brand gained 12 percent. Volkswagen recently announced plans to add a
midsize S.U.V. to its lineup, to be built in Tennessee, to better compete in the crossover market.
CHARTS: How the Industry Fared; How the Automakers Fared; Most Popular Cars and Trucks (Source:
MotorIntelligence.com)

Corporate News: U.S. Auto Sales Sizzle in July --- GM, Ford, Chrysler Post Strong Gains; Incentive Spending Keeps Showrooms Full
Corporate News: U.S. Auto Sales Sizzle in July --- GM, Ford, Chrysler Post Strong Gains; Incentive
Spending Keeps Showrooms Full
By Mike Ramsey and Michael Calia
683 words
2 August 2014
J
B3
English
U.S. auto demand roared ahead in July thanks to healthy summer sales incentives, with top auto makers posting
near double-digit increases over last year on top of already-high levels in the U.S.
Car makers sold 1.435 million vehicles in the U.S. last month, up 9.1% from a year earlier and lifting the
seasonally-adjusted annualized selling rate to 16.48 million, from 15.76 million vehicles in 2013, according to
researcher Autodata Corp.
Underlying the momentum: bigger sales incentives. TrueCar Inc., the Internet auto-pricing service and research
firm, said incentive spending rose 8.4% overall from July 2013 and to the highest since July 2010.
Strong sales of the Jeep Cherokee sport-utility vehicle helped drive Chrysler's July sales up 20%. General Motors
Co., Ford Motor Co. and Nissan Motor Co. each reported strong gains over year-earlier sales.
Sergio Marchionne, chief executive of Fiat Chrysler Automobiles NV, said earlier this week that incentive
spending hurt its profitability in North America and it plans to rein in spending going forward.
On Friday, Fiat shareholders approved a reorganization that opens the way for the car maker's merger with
Chrysler. They also agreed to relocate its headquarters to the Netherlands from Italy, create a tax domicile in the
U.K., and to list its shares in New York.
Mr. Marchionne and other executives will have offices in London, where future board meetings are scheduled to
take place.
New car sales have been a bright spot for Fiat and the U.S. economy in recent years. Some analysts believe the
industry is near its peak for normal demand following deep declines in 2008 and 2009.
Ford EconomistEmily Kolinski Morris said the Dearborn, Mich., company expects U.S. economic growth to be
about 3% in the third and fourth quarters, supporting continued strong demand for new cars and trucks.
"This is a pretty well supported [sales] level for the industry," she said. "We are getting to a level where you might
see some ups and downs."
General Motors, the largest U.S. auto maker, said its July sales rose 9.4% over a year earlier to 256,160, driven
by a 22% increase from its GMC truck and sport-utility brand. Toyota Motor Corp.'s sales shot up 11.6% to
215,802, eclipsing Ford, which posted a 9.5% sales increase to 211,467 cars and light trucks. Chrysler's sales
jumped 20% to 167,667 and Nissan's increased 11.4% to 121,452.
Honda Motor Co.'s sales dipped 3.9% to 135,908, dragged lower by sagging results at Acura as well as declines
for its Odyssey minivan.
Hyundai Motor Co. said sales rose 1.5% to 67,011 and Kia Motors Corp. said its U.S. sales rose 6.7% to 52,309.
SUVs remained popular. Ford said sales of its SUVs rose 17.1% in July. Chrysler's Jeep brand rose 41% over a
year ago.
"The key behind this trend is the growth of the compact crossover SUV market. The segment's share of all sales
has nearly doubled in the last decade," said Jessica Caldwell, an analyst with Edmunds.
The National Automobile Dealers Association said demand may continue to rise. "There is a lot of upside
potential for new-vehicle sales during the final five months of the year," said Steven Szakaly, NADA's chief
economist.
"We've had an agonizingly slow recovery that has in many ways been led by the automotive sector, but the
overall economy is finally picking up," he said. "The housing market is stronger, gasoline prices have been
relatively stable and interest rates -- while rising recently -- are still low compared to historical levels."
Mr. Szakaly predicts 2014 sales of 16.4 million new vehicles, and rising to 16.8 million vehicles in 2015.
---
Eric Sylvers contributed to this article.
Document J000000020140802ea820003i

To Lift Sales, G.M. Turns to Discounts

To Lift Sales, G.M. Turns to Discounts
By AARON M. KESSLER and BILL VLASIC
1,330 words
1 August 2014
The New York Times
NYTF
1
English
In February, General Motors hit a milestone of sorts when its sales incentives, as tracked by the research firm
Edmunds.com, dropped below those of its domestic rivals, Ford and Chrysler.
It was a satisfying achievement for G.M., which has labored to rebuild its product lineup since its 2009
bankruptcy, and reduce its reliance on discounts to sell its cars and trucks.
But since G.M.'s safety crisis began to mount in the spring, the automaker has piled on cash incentives and
cheap lease deals to invigorate sales of its passenger cars, particularly the smaller models, joining what some of
its competitors have been doing as well.
G.M.'s overall sales in the United States have held up well despite the overwhelmingly negative attention the
company has drawn for failing to recall millions of defective small cars for more than a decade.
In the first six months of the year, G.M.'s sales rose 2.5 percent, compared with the industrywide increase of 4.3
percent. On Friday, automakers will announce sales figures for July.
Yet most of G.M.'s gains have been in sport utility vehicles. By comparison, its mass-market car models have
struggled, be it the negative publicity, a more competitive environment or consumers opting for bigger vehicles.
So G.M., which had worked hard to reduce its reliance on incentives, is back in the discount game, for smaller
cars. It's not the only automaker that has turned to incentives -- a broad term for discounts, rebates and
subsidized lease deals. Ford and Chrysler have bolstered their use in recent months, and together with G.M.,
remain at the top of the list, according to Edmunds.com.
Tim Fleming, an analyst at Kelley Blue Book, said G.M.'s discounts made sense, given the competition in the
small car market these days.
''It's a very competitive segment, and you have to price your models competitively to survive,'' he said.
Take the compact Chevrolet Cruze, G.M.'s top-selling car model and a prime example of the improved quality and
styling the company has striven for since its bankruptcy and $49.5 billion government bailout five years ago.
While sales of the Cruze started the year strong, they dropped nearly 21 percent in June. And as sales have
slipped, G.M. has responded by adding discounts of about $2,700 a car -- a 45 percent increase from a year ago.
The company is being very aggressive on the lease side, offering three-year leases for $159 a month, with about
$2,400 due at signing. Adjusted for the money down, that makes the Cruze about $35 cheaper a month than a
Ford Focus, $20 less than a Hyundai Elantra and about even with Toyota's Corolla.
A G.M. spokesman, James Cain, said the company disagreed with the Edmunds data, and that it preferred
incentive numbers that it obtained from J. D. Power, which he said showed Ford and Chrysler ahead of G.M. in
incentive spending for June. J. D. Power did not immediately respond to a request for comment.
Mr. Cain declined to comment on incentive strategies for individual models, but insisted G.M. overall had
''maintained our discipline'' when it came to discounting.

''The great sin in the past for the industry was overproducing, then using aggressive incentives to capture that
volume. We've taken the pledge not to do that anymore,'' he said. ''But you can use incentives strategically to
grow your volume and your market share.''
Gregory Bisch, 52, of Avenel, N.J., has been a Chevy owner for 23 years, but he has normally opted for larger
cars. In May, he received a call from the dealer who sold him a Malibu: How would he like a new Cruze? The
dealer offered to pay the remaining balance on the Malibu, in addition to giving him a $2,000 rebate for the Cruze
on top of whatever price they negotiated.
''That made a huge difference, and I know a good deal when I see one,'' Mr. Bisch said. Soon, he was downsizing
to a top-of-the-line version of the Cruze.
Despite the recent G.M. recalls, Mr. Bisch said he ''never thought twice'' before buying the Cruze. Shortly after he
came home with the car, though, the news broke that the air bags were faulty and needed replacing. ''I'm
expecting a recall notice any day now,'' he said.
Other small G.M. cars have had hefty incentive increases as well.
Discounts on the Chevy Sonic more than doubled in June compared with a year ago, and those for the tiny Chevy
Spark more than tripled. The move apparently worked. Sales of the two cars spiked for that month. Sonic sales
were up 37 percent, compared with June 2013, and Spark sales were up 20 percent. But two of Chevrolet's
bigger cars, the Impala and Malibu, had lower discounts in June, and also had a drop in sales.
The incentives are one way G.M. is staying competitive, as some rivals also turn to discounts. Ford increased
incentives on its Focus, which competes against the Cruze, by 72 percent in June over a year ago. And Ford's
larger cars were flush with discounts as well, with those on the Taurus rising 33 percent, and those on the Fusion
50 percent.
Toyota, by contrast, reduced its popular Corolla's discounts by about 20 percent in June from a year ago.
The discounting, analysts say, have a big impact on a buyer, especially in smaller cars.
''If you put $2,000 in incentives on a $20,000 car versus a $40,000 car, you're talking about a much bigger
difference in how attractive that deal becomes,'' said Jesse Toprak, an analyst at Cars.
com.
Even with G.M.'s recent increase in discounting, it is still a far cry from the days when the company once offered
''employee pricing'' on its whole lineup, essentially taking losses on its cars just to move them off dealers' lots.
Today, the incentives and lease deals are adjusted on individual vehicles each month, using sophisticated data
analytics and other methods.
''It's much more precise now, the way incentives are used; there's a business case behind each decision,'' said
Steven Szakaly, chief economist at the National Automobile Dealers Association. ''They're not just giving out
candy anymore.''
G.M.'s overall incentives began to rise in March, nudging ahead of Chrysler, according to Edmunds. In April,
when both Ford and Chrysler reduced their discounts, G.M. once again lifted its spending -- taking the lead
among automakers. At that point, its wave of recalls, now totaling about 29 million worldwide, had taken off.
Since then, the Edmunds data shows, G.M. has steadily raised its incentives every month, keeping the top spot
through May and June.
Ken Taub, 59, of New York, is one buyer won over by G.M.'s incentives. He had never owned a G.M. vehicle
before, and had always owned large vehicles. But this year, Mr. Taub not only bought a G.M. car -- but he and his
wife also purchased one of the smallest G.M. offerings available, the Chevy Sonic.
Mr. Taub was not looking to spend a lot of money -- he planned an all-cash offer -- and he wanted a manual
transmission. After some negotiating and a rebate of $1,000, the price wound up being about $17,700.
''There's just not a lot out there for that price,'' he said.

General Motors, which had worked to reduce its reliance on incentives, has piled on discounts, rebates and
subsidized lease deals to invigorate sales of its smaller cars. That includes models like the Chevrolet Sonic, left,
and the Chevrolet Cruze. (PHOTOGRAPHS BY STEVE FECHT FOR CHEVROLET; GENERAL MOTORS) (B4)
Document NYTF000020140801ea810005n

Price hikes on aluminum F-150 from minor to mega
MONEY
Price hikes on aluminum F-150 from minor to mega
James R Healey
James R. Healey, USA TODAY
431 words
28 July 2014
USA Today
USAT
FINAL
B.2
English
Ford Motor is boosting the base prices of the 2015 F-150 pickup by $395 on low-level models, and by as much as
$3,515 on top versions.
The new trucks use aluminum body panels to save about 700 pounds, a way to boost fuel economy -- a treasured
attribute in thirsty big pickups -- and to boost towing and payload ratings.
But aluminum construction is more expensive than steel, and there has been considerable speculation about how
much more Ford would charge. The moves aren't trivial. F-150 has been the best-selling vehicle of any kind in the
U.S. for decades, and among the most profitable.
At the same time it's raising base prices, Ford is trimming the price of the popular 3.5-liter EcoBoost V-6 option
and says every version of the redesigned truck will have an array of new standard features that are worth more
than the price increase -- including massaging seats on the high-end Platinum version.
Dealers can start ordering the 2015 trucks today. They go into production in the third quarter and on sale in the
fourth quarter.
The much-higher price increases on the premium versions will give Ford's fourth-quarter earnings a boost
because the loaded models are the ones early buyers are likely to choose.
"They'll want the higher-end trucks. That's been the history," says Doug Scott, Ford truck group marketing
manager. "That's where the most new tech is found, so we expect the same rich mix at launch as we have seen
in the past." He says all trim levels and engines will be launched at once, but there will be a short delay before all
cab configurations -- regular, extended and crew-cab -- will be available on all models with all drivetrains.
The extra standard features range from an information screen and telescoping steering column in the XL starter
model to heated rear seats, a big info screen and the "multi-contour" massaging front seats in the Platinum truck,
and include a variety of safety- related and convenience features.
Ford guarantees better gas mileage because aluminum panels and other changes cut weight.
But Ford says it won't give mileage ratings until later.
The 3.5-liter EcoBoost V-6 that is the F-150's most popular engine -- picked by about 45% of F-150 buyers -- will
be a $1,995 option, down $100 from $2,095 now, Ford says.
photo
Document USAT000020140728ea7s0000d

Ford Reports $1.3 Billion in Earnings

Ford Reports $1.3 Billion in Earnings
By AARON M. KESSLER
753 words
25 July 2014
The New York Times
NYTF
4
English
Ford Motor Company issued its first earnings release since the company's new chief executive, Mark Fields, took
the reins, and reported some good news.
Despite lagging sales and revenue, the automaker's cost savings in the second quarter powered it to a record
quarterly profit in North America and strong showings in other markets around the world -- including its first
quarterly profit in Europe in three years. The exception was South America, where the company reported a loss of
about $300 million.
Ford, which is based in Dearborn, Mich., said on Thursday that its net income rose to $1.3 billion, a 6 percent
gain from the period a year ago. Operating earnings for the quarter exceeded Wall Street's prediction of 36 cents
a share, as Ford earned 40 cents a share -- a profit of $2.6 billion -- excluding one-time charges.
Three weeks after Mr. Fields, Ford's former chief operating officer, succeeded its chief of eight years, Alan R.
Mulally, Ford said it set a record for its operating profit in the North American market with $2.4 billion.
That came largely through cost savings, since deteriorating market share resulted in revenue for the quarter
actually dropping to $21.2 billion, down from $21.8 billion last year. For the first half of 2014, Ford's revenue is
also down about $2 billion compared with last year, to $41.6 billion.
The company's market share dropped 1.2 percentage points to 15.3 percent in the United States, and similarly to
14.8 percent for North America as a whole.
But despite those challenges, lower spending and increased efficiencies in the second quarter translated to the
carmaker's still achieving a profit margin of 11.6 percent -- up 1 percentage point from the same period last year.
Bob Shanks, Ford's chief financial officer, said in a conference call Thursday that Ford was in something of a
''quiet period,'' sitting between product introductions as it prepared to release the new aluminum-bodied F-150
pickup and redesigned Mustang this year. That helped the company keep its costs down in the second quarter.
''We have the big launches ahead of us in the second half,'' Mr. Shanks said.
Akshay Anand, an analyst for auto research firm Kelley Blue Book, said the second half of 2014 could bring a
sizable uptick in sales for Ford, leading to even stronger earnings.
''The F-150 has been a hot topic for months now thanks to the aluminum it features, and once again should
continue to be the most dominant vehicle in terms of sales in America,'' Mr. Anand said.
In Europe, the automaker has lagged as the region's overall market has floundered, but on Thursday, Ford
reported a slim profit of $14 million there for the quarter, helped again by lower costs. Ford has predicted it will
achieve annual profitability in Europe in 2015. Mr. Fields said on Thursday that he was ''pleased by the response
of our European consumers'' and that the company expected to meet its European profit prediction for 2015.
Asian operations also did well, particularly in China. Mr. Shanks said Ford's wholesale volume in China rose 26
percent during the second quarter compared with last year, as the company continued to expand aggressively in
the country. Ford plans to introduce its luxury Lincoln brand there this fall.

Mr. Fields said he believed Ford's position ''does well for growth going forward'' and that the company's Chinese
buyers were proving to be younger and more affluent compared with competitors' buyers. Ford continues to trail
the market leaders, General Motors and Volkswagen, in China.
Ford is investing heavily in Asia, with a new Chinese plant recently completed and five more factories under
construction in China and India.
South America was the weak spot in Ford's earnings, as the unit slipped considerably, posting a nearly $300
million loss for the second quarter. The industry over all continued to struggle this year in countries like Brazil.
Ford also affirmed its guidance for the year of a pretax profit of $7 billion to $8 billion, and company officials say
they expect that investments in new offerings will begin to pay off during the second half and into 2015.
''This year is the most aggressive in our history for new product launches,'' Mr. Fields said, calling 2014 a ''critical
next step forward'' for the automaker.
Document NYTF000020140725ea7p0004u

Ford posts 20th consecutive profitable quarter ; $2.6 billion earnings beat estimates
MONEY
Ford posts 20th consecutive profitable quarter ; $2.6 billion earnings beat estimates
Jayne O'Donnell
Jayne O'Donnell, USA TODAY
418 words
25 July 2014
USA Today
USAT
FINAL
B.4
English
Ford Motor bounced back from its bleak first quarter, beating analysts' estimates with second-quarter profit,
excluding one-time items, of $2.6 billion, or 40 cents per share, the automaker announced Thursday. That topped
the 36 cents analysts forecast.
The company's $2.6 billion pretax profit was its 20th consecutive profitable quarter and its best since the second
quarter of 2011. The company also affirmed its full-year pretax profit guidance of $7 billion to $8 billion.
After bouncing above $18 in early trading, Ford stock closed at $17.84, up 0.3%.
JPMorgan analyst Ryan Brinkman said Ford's North America result "is all the more impressive considering the
company's most important product -- the F-150 pickup truck -- is approaching the end of its current product cycle."
He highlighted Ford's "surprise profit" in Europe, where General Motors said Thursday it continued to lose.
Ford reported a $14 million profit in Europe, "barely above break- even, but fantastic given where it's been," CFO
Robert Shanks said in an interview with USA TODAY.
But it's not the end of money pit Europe. He says Ford will post a European loss in the second half and for the full
year because restructuring costs will rise and vehicle deliveries will fall, due to normal summer shutdowns.
He forecast a profit in Europe next year. Ford's overall second- quarter net income was $1.3 billion, or 32 cents
per share, an increase of $78 million, or 2 cents, from a year ago.
"Moving forward, our commitment is to build on this success by accelerating our pace of progress, while
delivering product excellence and driving innovation in all areas of our business," said CEO Mark Fields, who took
the reins from Alan Mulally on July 1.
Sales to dealers fell 1% as Ford's market share slipped in every region except Asia-Pacific. Even so, the
company's operating margin was up 0.2%, to 6.6%.
"Our second-quarter results demonstrate the underlying strength of our business," said Shanks. "We are
delivering strong results in a year of aggressive global product launches and difficult external conditions in many
parts of the world."
Earlier this month, Ford said its European sales rose by 6.6% in the first half of 2014, slightly outpacing the
overall industry growth of 6.3%.
photo Joe Raedle, Getty Images

Document USAT000020140725ea7p00009

Rather sporty Fiesta fires on all 3 cylinders ; Gets job done, even if it sounds like a lawn mower
MONEY
Rather sporty Fiesta fires on all 3 cylinders ; Gets job done, even if it sounds like a lawn mower
James R Healey
1,025 words
25 July 2014
USA Today
USAT
FINAL
B.4
English
Ford Motor is among a few car companies trying a three-cylinder powerplant on possibly skeptical American
buyers.
The others are Mitsubishi, in its Mirage, and Mini, in its redesigned Cooper.
Tightening fuel-economy regulations are forcing car companies to try the likes of tiny three-cylinder engines,
which would have seemed silly a few years ago.
The Ford 1-liter, three-cylinder engine, on sale overseas for several years and a multiple award winner there,
made its U.S. debut in January in the SFE version of Ford's subcompact Fiesta. SFE is Ford's designation for
high-mileage special.
Hewing to Ford's EcoBoost formula, it's a small-displacement powerplant with turbocharging and direct injection.
If you're in the market, tracking this gets slightly tricky. Ford also sells an SFE Fiesta with 1.6-liter four-cylinder, so
not all SFE models have the small engine; in fact, it's a $995 option. And the three-banger was an addition during
the Fiesta's 2014 model year. The 2015 Fiesta now is on sale, including the 1-liter SFE.
The three-cylinder is available in either the Fiesta hatchback or the sedan.
So, spend a moment in your shopping to be sure you're considering the car you really mean to be.
Headline feature for the 1-liter: 43 mpg highway rating, and not- shabby 31 city, 36 combined.
The new engine is stingy with fuel, as advertised. Despite our heavy foot the test car got 30 mpg in the suburbs.
When hammered, the three-cylinder first sounds like an angry lawn mower, then slides into a more palatable roar
that slightly evokes a motorcycle and finally is a growling mini-beast. We're glad Ford didn't quiet it into
blandness.
We were surprised by how frisky it is when driven in lower gears - - second when you'd normally be in third, third
instead of fourth, and so on. Zips and growls like a champ driven thus, though you cut your fuel economy driving
that way.
The tester was a five-speed manual and required more shifting than most small cars, because the three-banger
doesn't handle low- rev lugging very well -- hence its preference for lower gears. You know it right away when
you're in the wrong gear. Shift down or stall the engine.
Unfortunately, the shift action was clunky and imprecise. So all that sticking around wasn't appealing. Honda has
the front-dive, manual transmission combo down just fine. Hyundai does a good job, too. No shortage of good
examples for Ford.
Overall, no serious gripes about having only three cylinders, just that 123 hp, 148 lbs.-ft. -- though a lot for just 1
liter of displacement -- isn't a yippee zone output unless you tap the power by driving one gear lower than you
otherwise would.
Our sticking point is more the 1-liter displacement than the number of cylinders. The emergency generator at
home has a 1-liter engine (two cylinders).
Beyond the new fuel-sipping engine, the Fiesta is fresher, having gotten an update in 2014. Nicer, newer
technology, among other things. Updated or not, the Sync voice-command system wasn't intuitive.
It is comfy in front, but pretty darn crowded in back, not unusual for a subcompact.
Interior looks, feels cheap. Lacks the oodles of soft-touch surfaces that can make a car seem much classier,
friendlier. And places where parts join sometimes have sharp edges, such as the two- piece door grab handles,
where you'll feel the unpleasant edges every time you pull the door closed.
At $17,530 the tester lacked navigation, backup camera, satellite radio. It feels underfurnished for the price, but
rivals aren't giving you the moon, either.
Fiesta's ride is composed, not unduly jiggly or harsh, which is an accomplishment for a small car.
Steering, brakes, handling all feel responsive, more like a sporty car than an econo-box.
But we know how much better the Fiesta can be in other variants, owing to a recent romp in the Fiesta ST
high-performance model.
You can read about it Monday in our Cars.com/USA TODAY/MotorWeek $30,000 Cheap Speed Challenge.
You'd hardly think the ST and the SFE both are Fiestas.
List
Ford Feista SFE 1 liter details
What? Rare three-cylinder engine for even better mileage in Ford's front-drive, four-door subcompact. The 1-liter,
three- cylinder is available only in SFE high-mpg models.
When? The three-cylinder went on sale in January as a 2014 model. The 2015s now are on sale, unchanged.
Where? Engine's made in Germany. Fiesta's made in Mexico.
How much? The 1-liter engine adds $995, making 2015 Fiesta FE with that engine $16,915 to $19,795, including
shipping.
Test car was SE trim level with manual transmission, heated seats, defrosting mirrors, auto climate control:
$17,530.
What makes it go: 1-liter three-cylinder rated 123 horsepower at 6,350 rpm, 148 pounds-feet of torque at 5,000
rpm.
How big? Fiesta hatchback's about even with a Honda Fit, but has much lower roofline. Fiesta sedan is roughly a
foot longer because of the trunk.
Weighs 2,578 lbs. to 2,628 lbs.
Passenger space, 85.1 cubic feet. Cargo space: sedan, 12.8 cu. ft. in trunk; hatchback, 14.9 cu. ft. behind rear
seat.
Turning circle diameter, 34.4 ft. curb-to-curb.
How thirsty? Rated 31 mpg in the city, 43 highway, 36 combined city/highway.
Test car with five-speed manual registered 30 mpg (3.33 gallons per 100 miles) in suburban driving.
Burns regular, holds 12.4 gal.
Overall: Unrefined, but not a bad way to save fuel.
List

What stands out
MPG: Made to sip, even under our heavy foot.
Styling: Ford has the look down cold.
Interior: On the cheap side.
photo Photos by Ford

Document USAT000020140725ea7p00006

Corporate News: Contrasting Fortunes for GM, Ford --- Profit at Nation's Largest Auto Maker Hit by Recall Charges; Ford Up On Strong U.s., Asia Results
Corporate News: Contrasting Fortunes for GM, Ford --- Profit at Nation's Largest Auto Maker Hit by Recall
Charges; Ford Up On Strong U.s., Asia Results
By Jeff Bennett and Joseph B. White
814 words
25 July 2014
J
B4
English
A $2.5 billion pretax bill for safety recalls and a victims' compensation fund slashed General Motors Co.'s
second-quarter profit and highlighted the work it must do to close a profitability gap with rival Ford Motor Co.,
which reported stronger results for the quarter ahead of a critical product launch.
GM on Thursday reported a $278 million profit, off 80% from a year earlier, as special items offset North
American operating-margin expansion and continued growth in China.
The Detroit-based company recently launched a new family of pickup trucks and sport-utility vehicles in the U.S.,
but costs related to defects -- resulting in nearly 30 million recalls this year -- blunted the positive impact of new
models designed to compete in the sweet spot of the American market.
Meanwhile, Ford's second-quarter profit rose 6% to $1.3 billion, propelled by record earnings in North America
and momentum in Asia.
Ford, like GM, was hit by weakness in Latin America and Russia, but posted its first quarterly profit in Europe in
three years even as GM's losses in the region continue to mount.
Both boosted margins in North America, but Ford's 11.6% operating profit in the region solidly outpaced GM's
9.2%.
Shares in GM fell 4.5% to $35.74 in trading Thursday. Ford's stock edged up to $17.84.
RBC Capital Markets analyst Joseph Spak, in an investors' note, said GM's margin was "below general
expectations." Mr. Spak said GM has been able to command higher prices in recent months and that may have
prompted higher forecasts ahead of Thursday's earnings.
Ford is readying a new aluminum-bodied version of its best-selling F-150 pickup truck for launch later this year.
Ford warned again that costs for that launch would likely depress profits during the second half.
GM finance chief Chuck Stevens said the company is confident that it can achieve a 10% operating margins in its
core market by "mid-decade."
Its North American market share was virtually unchanged, and dealers used the crisis to demonstrate the
improvements GM has made to its vehicles in recent years, Mr. Stevens said.
Still, past quality problems are proving to be painful. The company last quarter set aside $400 million to
compensate victims of accidents involving certain small GM vehicles, including the Chevrolet Cobalt, that were
built in the last decade with defective ignition switches. Mr. Stevens said the fund could grow by as much as 50%.
RBC Capital's Mr. Spak said the fund estimate was well short of some forecasts. RBC, for instance, estimated
$1.5 billion in its model for the reserve.
GM also took a $900 million noncash pretax charge during the quarter for recall costs it estimates could be
accumulated over the next decade on the 30 million vehicles already sold and still on U.S. roads.
GM Chief Executive Mary Barra, speaking during a conference call, said the review and analysis of past quality
problems is "substantially complete."
GM still faces a U.S. Justice Department investigation that analysts think could end with a multibillion-dollar fine
for not telling customers or the U.S. auto-safety regulator about safety flaws.
The company disclosed on Thursday it is now also being investigated by Transport Canada and 45 state
attorneys general in connection with its recalls.
"We are cooperating fully with all requests," the auto maker said in a federal filing. "Such investigations could in
the future result in the imposition of material damages, fines or civil and criminal penalties."
GM's $278 million profit in the second quarter compared with $1.41 billion a year earlier. Excluding certain
one-time costs.
Revenue rose slightly from a year earlier to $39.6 billion.
GM's operating loss in Europe last quarter grew to $305 million on new restructuring charges. In South America,
GM posted a loss of $81 million as the economy remains soft in that region.
Ford's pretax operating profit edged up to $2.59 billion, with cost cutting playing a key role in helping to offset a
1% decline in revenue for the quarter to $37.4 billion. Ford affirmed a forecast for full-year pretax profit of between
$7 billion and $8 billion. It earned $8.6 billion in 2013.
Ford's net was reduced by a $329 million write-down of an investment in a Russian joint venture. Still, Ford eked
out a narrow pretax profit in Europe on favorable exchange and lower costs. Chief Financial Officer Bob Shanks
said "we're clearly on the way to a profit in 2015."
Document J000000020140725ea7p0003j

Ford's Play: Slim Down to Pick Up
Heard on the Street

Ford's Play: Slim Down to Pick Up
By Justin Lahart
468 words
25 July 2014
J
C10
English
[Financial Analysis and Commentary]
Ford Motor Co. says its aluminum-body F-150 pickup trucks will be able to pull as much as 8,400 pounds. The big
question is how well the auto maker will be able to pull off the F-150 launch.
Ford on Thursday delivered solid second-quarter results, as strength in North America and Asia and a return to
profitability in Europe more than offset continued woes in Latin America. Ford stock was little changed, while
shares of crosstown rival General Motors, which reported a sharp drop in second-quarter earnings on recall costs,
fell sharply.
But for Ford investors, the past quarter doesn't matter as much as the 2015 F-150, scheduled to arrive at
dealerships toward the end of this year. The move to the mostly lightweight aluminum truck body is a gamble:
Ford's F-series full-size pickups accounted for about 30% of Ford's U.S. sales last year, and with its higher
margins, an even more substantial portion of profits.
But the payoff could be big. Ford won't release fuel-economy figures until closer to the launch. Still, at more than
700 pounds less than this year's model, the F-150 will offer substantial fuel savings. And that could translate into
substantial market-share gains.
Many pickup owners use their trucks on the job. So while they tend to be loyal, being able to squeeze more
mileage out of the tank is appealing. A recent UBS survey showed that among respondents looking to buy a new
pickup over the next year, 27% of Chevrolet and 19% of Dodge Ram owners said they were "extremely likely" to
consider the new F-150. Gas mileage was cited as the chief reason.
GM, in particular, has cause to worry. The new F-150 is coming out when it has had to commit resources --
including a fair share of new CEO Mary Barra's time -- to dealing with its recall. That may limit its ability to
respond. And the threat will intensify if Ford moves toward incorporating aluminum into its other vehicles, like its
SUVs.
The catch for Ford is that all this is predicated on it having little in the way of hitches bringing out the new F-150.
The company seems so self-assured that Morgan Stanley's Adam Jonas, on Ford's conference call, said "your
tone on the changeover, it sounds so confident that I can't help but be a little skeptical."
Investors, too, have to maintain a modicum of caution on Ford ahead of the F-150 launch. But if it goes well, that
caution will quickly melt away.
Document J000000020140725ea7p0001y

Ahead of the Tape
Ahead of the Tape

Ahead of the Tape
By Spencer Jakab
430 words
24 July 2014
J
C1
English
U.S. Auto Makers Aren't Lemons
Five years ago, these were real clunkers.
But a close brush with a bailout for America's No. 2 auto maker, Ford Motor Co., and a taxpayer rescue of output
leader General Motors Co., sparked a renaissance for them. The two have reduced capacity and abandoned
many of the habits that drove them to the brink in 2009.
Even with annualized sales hitting an eight-year high in June, North American auto capacity utilization is around
100%, while workforces, as represented by union membership, are 40% lower than a decade ago. Pricing
discipline is stronger, too. Both companies are slated to report second-quarter results Thursday and there is little
sign of that rigor slipping.
Although analysts expect earnings to decline for 2014 compared with last year, the turnaround in their financial
fortunes is stunning. Ford lost $30 billion between 2006 and 2008 while, between 2010 and the end of 2014, it will
have earned $45 billion, based on analyst forecasts. GM's legal predecessor lost $72 billion during those dark
days and will have earned about $26 billion since 2010.
But since GM's late 2010 initial public offering, despite its recent recalls, both stocks have risen by less than 10%
while the S&P 500 is up by two-thirds. Ford and GM trade at seemingly modest forward price/earnings multiples
of 10.8 and 9.8 -- about 66% and 60%, respectively, of the S&P's multiple.
It seems that there is a disconnect between the industry's convincing rebound and what investors are willing to
pay for it. But the stocks' cheapness reflects the highly cyclical and capital-intensive nature of the auto business.
For example, 20 years ago the price/earnings ratios of Detroit's Big Three (Chrysler was still a public company) all
were below 40% that of the broader stock market. That is a fairly representative year as the U.S. in the mid-1990s
was well into an economic recovery but the technology bubble hadn't yet begun to distort the broader market's
valuation multiple.
Today's improving credit and labor conditions at home and rebounds in emerging markets and Europe all are
cause for optimism. Just don't expect that to translate into outsize share-price gains for auto makers.
It may seem like they are priced to move, but investors with long memories know that doesn't guarantee a smooth
ride.

Document J000000020140724ea7o0000v

In Chaos, Venezuela's Factories Grind to a Halt
In Chaos, Venezuela's Factories Grind to a Halt

By Ezequiel Minaya
1,315 words
22 July 2014
J
B1
English
Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved.
VALENCIA, Venezuela -- This car-crazed country's auto industry, once the third largest in South America, is
seizing up as manufacturers struggle to produce a few vehicles a day.
Car makers, including global giants like Ford Motor Co ., Fiat Chrysler Automobiles NV , General Motors Co . and
Toyota Motor Corp ., have cut output by more than 80% in the first six months of the year compared with a year
earlier because of a lack of dollars to pay parts suppliers, according to data compiled by the Automotive Chamber
of Venezuela, which represents car makers.
"This is the first time I have ever seen things this bad," said 61-year-old Antonio Lopez, a Ford worker who
recently prepared a sedan for painting at the auto maker's factory here. The cavernous Valencia plant, about 110
miles west of Caracas, was quiet by midafternoon one day last month, with a handful of workers sweeping up and
maintaining equipment on assembly stations.
Ford's 2,500 workers still arrive each workday, their jobs protected by stringent labor laws, said Gilberto Troya,
secretary-general of the Ford union who led a Wall Street Journal reporter on a tour. But the factory churns out
just a few Fiesta compacts and Explorer sport-utility vehicles a day.
"I worry about the plant leaving," Mr. Lopez said. "This is how my family eats. This is what I've done all my life."
A Ford spokesman said the auto maker has been in talks with Venezuela to obtain more dollars to import needed
parts. He declined to elaborate on the discussions or provide details about the state of Ford's operations except to
say that the Dearborn, Mich., auto maker is focused "on getting all operations in Latin America back to
profitability."
Across Venezuela, car production and sales has been sliding fast. Balance sheets have been battered, with
revenue vulnerable to devaluation and trapped in Venezuela because of currency controls. Auto makers built
36,919 vehicles through June of last year. But only produced 6,161 during in the same period this year, about
what Argentina produces in a few days.
"[Sales] volumes are down 75% below 2013, and last year was the lowest level in a decade," said Carlos Gomes,
an economist who follows the global auto industry for Scotiabank. "I think it is fair to say that the situation is
alarming."
Economists say the car industry, like newspapers, bottlers and food processors, has been hard hit by a shortage
of dollars in Venezuela that has left many companies scrambling to pay for much-needed imports in a country that
produces little more than oil. The reverberations in the economy include companies going out of business, a
shortage of basic products and one of the world's highest rates of inflation.
The car industry this year began on a particularly dire note, with only Toyota and Volvo AB 's Mack de Venezuela
powering up their assembly lines. By March, Toyota halted production for three months, followed by Italian truck
maker Iveco SpA in April. Ford, GM and Chrysler rolled back production amid big losses due to currency
devaluations as President Nicolas Maduro's government tried to address a shortage of dollars by weakening the
value of the bolivar.
Mr. Maduro, though, blames the car companies, not the country's economic policies for hobbling the auto sector.

The government fined GM last year after accusing it of selling overpriced car parts. In February, the president
publicly criticized Toyota for its plans to cease production, suggesting the Japanese car maker was colluding with
his political foes. GM declined to respond, and Toyota didn't return calls seeking comment.
"The only thing these little managers want is dollars, dollars and more dollars," Mr. Maduro then said on state
television. "You don't have to be very intelligent to find that behind these things there are always political
interests."
Venezuela's Communications Ministry declined to comment. The ministries of finance and industry didn't return
phone calls. A spokeswoman for the Automotive Chamber of Venezuela, which represents foreign auto makers,
said the group was in talks with the government and declined further comment.
Since the first car reached Venezuela in 1904, a Cadillac delivered to a Caracas doctor, the automobile has
become part of the national identity in the country. Venezuela built highways that were the envy of Latin America.
And fuel remains nearly free, giving long life to Detroit's classic gas-guzzlers, which are common nationwide.
"We love whiskey, beauty queens, fine cars and baseball here," said Leonardo Casadiego, president of the
Venezuelan Association of Antique and Classic Cars.
But no longer. Mr. Maduro's predecessor, Hugo Chavez , made the government the sole source for greenbacks,
tightly controlling their disbursement through a stringent currency exchange regime. Billions of dollars were lost as
corrupt businessmen billed the government for imports that never took place, government officials have publicly
acknowledged.
Economists say the currency regime coupled with excessive spending have planted the seeds for a deepening
economic crisis since Mr. Chvez's death last year, leaving Mr. Maduro struggling to contain shortages of
everything from cooking oil and sugar to, recently, coffins.
One auto executive, who works for a non-U.S. company and spoke on the condition of anonymity, said the
Maduro administration had failed to deliver dollars promised last year through the central bank's SICAD system,
which sells a limited amount of greenbacks at a weakened exchange rate. That executive estimated the
government has delayed up to $4 billion in payments the car companies need to convert local currency into
dollars to pay suppliers.
"Some companies have shut down their lines because of the lack of materials, others are working at a reduced
rate," said the auto executive. "Eventually, raw materials will finish for us and there will be zero new cars."
Buyers seeking new cars can spend years on waiting lists. New car sales totaled 98,878 in 2013, a fall of 80%
since 2007, when car sales peaked at 491,899. Restrictions on car imports, coupled with the fall in car production,
have made Venezuela the rare country where used vehicles climb in value.
"I can't find anything. Prices are climbing daily," said Jesus Ramirez, a taxi driver who has spent a year trying to
replace the 2008 Renault he purchased new for $7,441. He sold the car for over $30,000 five years later.
With inflation at 60% a year, among the highest in the world, Venezuelans protect their earnings by buying cars,
among other big-ticket items.
Car parts needed to keep vehicles on the road have also become difficult to find. That has led thieves to steal
parts such as batteries from parked cars.
The owner of a Caracas car dealership who said he last sold a vehicle in 2009, said he stays in business by
servicing cars. But with spare part shipments tumbling 75%, he said, he fears his business may soon close.
"I spend all day on the phone looking for parts," the owner said, asking to remain nameless. "We are in survival
mode."
In 2012, Venezuela's car makers' output ranked behind only Brazil and Argentina in South America, according to
the Paris-based International Organization of Motor Vehicle Manufacturers. This year, Venezuela is now fifth,
trailing neighboring Colombia and much smaller Ecuador.
Hector Lucena, an auto industry expert at the University of Carabobo in Valencia, said that while roughly 15,000
assembly plant workers remain on payrolls, both Chrysler and GM have petitioned the government for permission
to shed several hundred jobs. "There has never been a year uglier than this," he said.

Companies "seem to be positioning themselves to be much smaller," Mr. Lucena said. "This could be the norm
now."
Document J000000020140722ea7m0001q

Corporate News: Ex-Ford CEO Mulally Joins Google's Board
Corporate News: Ex-Ford CEO Mulally Joins Google's Board

By Rolfe Winkler, Alistair Barr and Joann S. Lublin
526 words
16 July 2014
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Copyright © 2014, Dow Jones & Company, Inc.
Former Ford Motor Co. Chief Executive Alan Mulally, who flirted with Microsoft Corp.'s top job last winter, has
joined the board of another tech giant: Google Inc.
Mr. Mulally, who retired as Ford's CEO on July 1, became the 11th member of Google's board on July 9 and adds
a dose of independence to a group that has added just one other new member since 2005. Mr. Mulally will serve
on the board's audit committee.
Mr. Mulally, also a former Boeing Co. executive, brings to Google expertise in both the auto and aviation
industries as the search giant expands into self-driving cars, information and entertainment systems for cars and
delivering Internet access from drones and satellites.
Google courted Mr. Mulally for several months, according to one person familiar with their discussions. The
person said Mr. Mulally told an acquaintance in late 2012 that Microsoft and Google were the only companies he
would be interested in leading after retiring from Ford.
Google CEO Larry Page became interested in getting to know Mr. Mulally after he read the book "American Icon,"
which chronicles the former Ford chief's efforts to turn around the struggling auto maker, according to a different
person familiar with the matter.
Since then, the two executives have had several conversations on leadership as Mr. Page pushes Google to
remain innovative as it grows, the second person said.
"As Google's car project progresses, the company needs a mixture of their existing culture of moving quickly and
disrupting things and a more incremental approach to address safety and other challenges faced in the auto
industry," said Bob Denaro, a consultant in intelligent transportation systems and former executive at Nokia Corp.
and Motorola Inc.
Google has had a somewhat tense relationship with the auto industry since its self-driving car project began
about five years ago. Google is developing a fully autonomous car and has largely brushed aside concerns about
liability if and when such vehicles are released onto public roads to carry individuals.
In contrast, most auto makers have added autonomous driving features to their new cars incrementally amid
concerns about liability risks.
Google is also trying to get a new version of its Android mobile operating system into existing cars, to become the
hub for navigation, communication and entertainment features while people drive. Ford is among more than 20
auto makers and brands that are planning new cars with Android Auto built in.
The search giant's aviation efforts have only recently begun. In April, the company bought solar-powered drone
maker Titan Aerospace for an undisclosed amount and in June agreed to buy satellite imaging startup Skybox
Imaging Inc. for $500 million. The hope is that both companies will help it collect images of the Earth's surface,
while delivering Internet access more widely. The Wall Street Journal reported in June that Google is planning to
spend more than $1 billion to extend Internet access to unwired regions of the earth.
Document J000000020140716ea7g00026

ON THE MOVE
MONEY
ON THE MOVE
126 words
16 July 2014
USA Today
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Former Ford Motor CEO Alan Mulally is taking on a new corporate role less than a month after retiring from the
automaker. He's joined Google's board. Mulally, 68, will serve on the board's audit committee, Google said.
Mulally is the only director with a background in manufacturing on Google's board.
NUMBER OF THE DAY: $2.1 BILLION
-- Billionaire Warren Buffett's largest single charitable donation, which he made this week to the Bill and Melinda
Gates Foundation. The Berkshire Hathaway CEO, 83, who is encouraging more charitable giving by the wealthy,
donated 16.6 million Class B shares to the foundation. That topped last year's record gift of $2 billion, when he
gave 17.5 million shares.
Document USAT000020140716ea7g0008e

Car Makers to Road Test MPG Claims
Car Makers to Road Test MPG Claims

By Mike Ramsey
770 words
15 July 2014
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The Environmental Protection Agency wants auto makers to road test the mileage claims they submit after a rash
of recent inflated fuel-economy claims based on wind tunnel and other laboratory measurements.
The proposal, which would require a public comment period, comes after several high profile cases in which
estimates provided by Ford Motor Co., Hyundai Motor Co. and Kia Motors Corp. were inflated and triggered
complaints to regulators and auto makers. The EPA has adjusted the test over the years -- most recently in 2008
-- to better match new-car window stickers to actual results
"Some auto makers already do this, but we are establishing a regulatory requirement for all auto makers," said
Chris Grundler, director of the EPA's Office of Transportation and Air Quality. The proposal would make it difficult
to manipulate lab results to achieve higher mileage ratings.
Generally, window stickers have better conformed with drivers' experience since the test was changed in 2008,
Mr. Grundler said. In fact, a Wall Street Journal comparison of auto makers' estimates against driver-provided
reports posted on a government website shows many owners should get slightly better mileage than the car
makers estimate.
For instance, drivers of the 2011 Ford Fiesta subcompact reported an average of 37 miles on a gallon of gasoline,
compared with the 33 mpg window sticker. A total of 17 different drivers entered results for that car.
The analysis of nearly 1,000 vehicle models from 2012 through 2015 model years found that fuel economy
reported by drivers to the government's fueleconomy.gov website was 1.2 mpg better than the EPA label. The
analysis excludes electric and plug-in electric vehicles like the Chevrolet Volt
Some experts say the fueleconomy.gov estimates may be higher than the general population because of driver
pride. Rick Goeltz, a researcher in the Center for Transportation Analysis at Oak Ridge National Laboratory,
which maintains the data, said consumers most likely to take time to record their mileage, are more likely to be
focused on getting good mileage and drive more economically.
All car makers run fuel economy tests in real-world driving, but the type of real-world test the EPA is looking for is
different. They want companies to measure air-resistance and rolling friction on a test track and not just a
computer model. These data can dramatically affect fuel economy, particularly in very efficient vehicles like
hybrids, which is what happened to Ford on its incorrect labeling.
"We've continued to work constructively with the EPA to regularly audit real-world performance and cooperatively
establish testing protocols that reflect how people drive today," said The Alliance of Automobile Manufacturers,
the lobbying group that represents most auto makers in the U.S.
In 2012, the EPA forced the South Korean companies to lower EPA label figures on much of their lineups. This
came after customer complaints about the variance. The companies agreed to pay drivers for the difference
based on how many miles they drove. Later, following a class-action lawsuit, owners received one-time cash
payouts.
Ford last month said it overstated the mileage of six 2013 and 2014 models, mostly gasoline-electric hybrids.
Ford said it would pay owners of the cars up to $1,050 to compensate them for the failure to deliver advertised
fuel savings. Ford made the change after a real-world driving audit found mistakes in the testing it had used.

Ford's problems were with very efficient cars, mostly hybrids, and that is where variances from the real world and
test results often appear. Small changes to the formula used to test the car can have a big impact, Mr. Grundler
said.
It isn't well known, but the EPA doesn't test every new car. Most lab testing for fuel economy is performed by auto
makers and the data is vetted by the agency.
The EPA currently requires a five-part lab test that simulates driving under conditions that are repeatable from
one car to another. Because of the number of vehicles on the road, the agency runs tests on only about 15% of
the industry's models each year to check the accuracy of mileage claims.
In real world use, hybrids for many auto makers tended to underperform the lab results. Meanwhile, diesel
engines tend to perform much better than the label -- by almost 5 miles a gallon. Mr. Grundler has asked
engineers to look into why the testing of diesels doesn't reflect real-world results more closely.
Document J000000020140715ea7f00035

Muscle cars break 700-hp barrier ; Trip back to days of cheap gas and screeching tires
MONEY
Muscle cars break 700-hp barrier ; Trip back to days of cheap gas and screeching tires
Chris Woodyard
Chris Woodyard, @ChrisWoodyard, USA TODAY
475 words
11 July 2014
USA Today
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As if it was the 1960s all over again, Detroit automakers are pushing horsepower in what's left of their muscle car
lineups to new heights.
But having just announced 700 horsepower in a production car, some experts question whether it's more power
than most potential buyers can handle.
The bar was raised last week by Chrysler Group's Dodge, which announced that a special version of the
Challenger will spit out 707 horsepower for the first time in a production car. Ford Motor and General Motors'
Chevrolet are already within striking distance:
Ford's 2014 Shelby GT500 version of the Mustang already gets 662 horsepower, but an all-new Mustang is on
the way for 2015, and that horsepower rating could increase again.
General Motors coaxes 580 horsepower out of a big V-8 in the Camaro ZL1, and "at least" 625 out of the engine
in its 2015 Corvette Z06.
The cars are a throwback to a more innocent age of cheap gas and screeching tires.
Back in the 1960s and 1970s, cars like the Pontiac GTO, Plymouth Barracuda and Ford Boss 302 ruled the
roads.
Prices of these new models are on the upper end of affordability for mainstream car buyers -- and their appeal
usually is limited to Baby Boomers, because they have both the spending power and the nostalgia. For them,
allegiances can switch quickly to the most powerful car.
"It is a game of one-upsmanship," says Rik Paul, auto editor for Consumer Reports magazine. "For people who
buy these cars, it's bragging rights."
But, he says, it may be way too much power if left in the hands of inexperienced drivers. For instance, he says,
his magazine warns parents against letting their kids drive sports cars or cars capable of excessive speeds.
When it comes to a 700-horsepower car, he says, "no one needs that horsepower, and few drivers would know to
use it properly."
Those who closely follow racing, however, say these are a new breed of muscle car.
Tim Suddard, editor of Grassroots Motorsports, a "hard-core" sports-car magazine, says he recently drove a
Shelby Mustang. "The shock wasn't how fast it went, but (that it) was a pussycat to drive." Modern muscle cars
have electronic engine controls and other features like traction control that let even less experienced drivers stay
in control.
"You're talking a different world," he says.

The 707-horsepower engine going into the 2015 Dodge Challenger SRT is the supercharged, 6.2-liter Hemi
Hellcat engine. The other performance characteristics of the engine, and the price, are due to be announced
before the car goes on sale in the fall.
photo Dodge
Document USAT000020140711ea7b00045

Corporate News: Foreign Brands Bring Car Loans to China --- Toyota and Ford Offer Interest-Free Loans to Lure Buyers While Mercedes Rolls Out Lease-Like Financing Deals
Corporate News: Foreign Brands Bring Car Loans to China --- Toyota and Ford Offer Interest-Free Loans
to Lure Buyers While Mercedes Rolls Out Lease-Like Financing Deals
852 words
11 July 2014
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SHANGHAI -- When Shi Li bought her 310,000-yuan ($50,000) Audi A4 at a Beijing dealership in December, she
did something unusual for a Chinese car buyer: She borrowed money.
The 29-year-old advertising saleswoman placed a 200,000-yuan down payment then took out a one-year,
interest-free loan from the dealership for the rest. It cost 3,100 yuan in commission charges, but Ms. Shi figured
she could make that back by putting her savings into a Chinese investment product. "It makes more sense to
keep the money in hand," she said.
Foreign auto makers are increasingly pushing car loans in the world's largest auto market, which traditionally has
demanded cash. As of the end of March, outstanding loans issued by China's 17 auto-financing companies
totaled 266 billion yuan, up 10% from the end of last year, according to the China Banking Association, an
industry group backed by the China Banking Regulatory Commission.
The shift is intensifying competition, aiding profits as superfast growth cools, and helping car makers reach new
and younger buyers. On Wednesday, the semiofficial China Association of Automobile Manufacturers said
passenger car sales grew 11% to 9.63 million vehicles in the first half of this year. That is compared with a 14%
rise recorded in the year-earlier period.
So far, foreign car makers are leading the charge, a move analysts say is helping expand their share of the
country's market. As elsewhere, the auto makers have set up financing companies in China, sometimes with local
partners, and offer dealers incentives to push loans.
Daimler AG's Mercedes-Benz, which is catching up with its German rivals in terms of Chinese market share,
offers a product that mimics the lease deals in the U.S. and a program that targets college students. Toyota Motor
Corp.'s luxury brand, Lexus, initiated an interest-free financing option that allows consumers to split car prices
between a 50% down payment and a 50% payment at the end of the loan period. Fiat Chrysler Automobiles NV is
teaming up with four of China's largest banks to provide low-interest funds to buyers of the Chrysler 300C, which
has a price tag of at least 400,000 yuan.
BMW AG and Volkswagen AG's Audi are offering similar financing deals. Cao Xiang, general manager at
Shanghai Fande Automotive Co., a dealer for BMW and Mini brands, said at least four out of 10 cars his company
sells are financed.
"Auto finance looks attractive to consumers that are younger and better aware of international trends," he said.
"These people either have not enough time to save or want to manage cash flow in a more flexible way."
By contrast, many domestic companies, such as Great Wall Motor Co. and Zhejiang Geely Holding Group, have
yet to launch independent financing operations. "Their dealers are less sophisticated," said Bernstein Research
analysts in a recent report, making it difficult to put financing in place.
Victor Yang, a spokesman at Geely, said the company has increased its consumer financing, mostly through
cooperation with banks. "We are placing more emphasis on auto finance, not only because of sales but also due
to higher margins," he said.
A representative for Great Wall said the company is at the early stage of developing auto financing and
management is studying how to proceed with the service.

Overall, Chinese car brands accounted for 38% of the country's passenger-vehicle market in the six months
through June, down from 41% in the same period of last year, trade group CAAM said.
Financing today mostly focuses on luxury cars. In China about 30% of luxury cars are purchased on finance, well
above the industry average of 20%, according to Bernstein.
But VW, General Motors Co. and Ford Motor Co. are trying to carve out a greater presence in auto financing
here. Ford's financing unit offers interest-free loans for buyers of Fiesta and Focus sedans.
"Our goal is to build a long-term relationship with customers so they are repeat buyers of Ford vehicles in the
future," said a Ford spokeswoman.
Encouraging the trend is a shift in consumption habits among younger Chinese toward credit from cash. VW, the
largest foreign car maker in China by market share, said auto finance is growingat"anunprecedentedrate" in the
country.
"With the arrival of the Internet age, Chinese people can access information faster and more conveniently and are
therefore more open to the outside world than before," said Joern Kurzrock, chief executive for VW's financing
unit in China.
GM said it sees great potential in auto financing because of the growing purchase power of consumers born in
the 1980s and 1990s. "They are more open to financing and have an attractive variety of options to choose from,"
said Rick Livingood, general manager at GMAC-SAIC Automotive Finance Co.
-- Rose Yu
Document J000000020140711ea7b0001r

Corporate News: Corporate Watch

987 words
3 July 2014
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EXXON MOBIL
$1 Billion Investment Set
For Belgian Refinery
Exxon Mobil Corp. is to invest more than $1 billion at a refinery in Belgium to meet diesel demand, despite the
challenging industry environment that has closed other facilities in Europe.
The U.S. energy company said the money would be spent on installing a new delayed coker unit at a plant in
Antwerp, which will convert heavy, high-sulfur residual oils into products such as marine gas oil and diesel fuel.
Exxon said it is making the investment to meet demand for transport fuels in northwest Europe. The company
added that it was evaluating several other investments in the region.
-- Selina Williams and Peter Stiff
---
CONSTELLATION BRANDS
Beer Segment Brews
Profit for Spirits Maker
Constellation Brands Inc. said its fiscal first-quarter earnings surged as the company's beer segment continued to
benefit from a significant acquisition, as well as stronger demand.
Results topped Wall Street's estimates and the company lifted its earnings outlook for the year, citing the strong
performance from its beer business. Constellation projected a per-share profit of $4.10 to $4.25, up from its
previous view of $3.95 to $4.15 a share.
The company last summer paid Belgium's Anheuser-Busch InBev NV about $5.3 billion to gain U.S. distribution
rights for Corona and a handful of other Mexican beers, plus a Mexican brewery. The deal, Constellation's largest
ever, was a byproduct of AB InBev's $20.1 billion purchase of Mexican brewer Grupo Modelo and made
Constellation the third-largest beer supplier to the U.S.
For the latest quarter, Constellation reported a profit of $206.7 million, or $1.03 a Class A share, up from $52.9
million, or 27 cents a share, a year earlier. Excluding items such as acquisition costs, per-share earnings rose to
$1.07 from 38 cents.
Sales, excluding excise taxes, more than doubled to $1.53 billion.
-- Anna Prior
---
FORD MOTOR
New CEO's Salary Slightly

Less Than Predecessor
Ford Motor Co.'s new chief executive, Mark Fields, will receive an annual salary of $1.75 million, slightly less than
his predecessor, Alan Mulally, as he takes the helm of the second largest U.S. auto maker.
Details of the compensation, disclosed in a regulatory filing Wednesday, show Mr. Field's pay package also
includes a grant of 710,227 stock options, which have an exercise price of $17.21. The package also has a
performance bonus of up to 200% of his base salary, or $3.5 million.
Mr. Fields officially took over Tuesday for Mr. Mulally, who retired from his posts as CEO and president.
Last year, Mr. Mulally received a base salary of $2 million, with the whole compensation package, including stock
awards and bonuses, totaling $23.2 million, according to a regulatory filing earlier this year.
Mr. Fields' final compensation, which will include restricted stock grants that vest, will likely be much higher than
the $5.25 million reported Wednesday. Mr. Fields, who was chief operating officer, had compensation of $10.2
million in 2013. While his base salary is $250,000 lower than Mr. Mulally's was, his performance bonus of 200%
of salary compares with Mr. Mulally's bonus of 175% of salary.
-- Anna Prior and Mike Ramsey
---
LENOVO
Confidence High on IBM
Deal Despite U.S. Probe
Chinese personal-computer maker Lenovo Group Ltd. still expects to complete its acquisition of International
Business Machines Corp.'s low-end server business by year-end, even as the U.S. government investigates
possible national-security risks related to the deal.
"There is no change to the plan," said Lenovo Chief Executive Yang Yuanqing at a news conference after the
company's annual shareholder meeting Wednesday.
Lenovo, which last year overtook Hewlett-Packard Co. as the world's largest PC maker, is trying to obtain
regulatory approvals in various markets for two multi-billion-dollar acquisitions: a $2.3 billion deal to buy IBM's x86
low-end server unit and a $2.91 billion deal to buy Google Inc.'s Motorola Mobility.
After announcing the two deals in January, Lenovo said it expected both deals to close by the end of this year.
People familiar with the matter said last month that U.S. security officials are examining the IBM server deal due
to concerns that the servers, used in parts of the U.S. government, could be accessed remotely by Chinese
hackers.
"We are still confident that we can complete the two transactions by the end of this year," Mr. Yang said.
-- Juro Osawa
---
BARRICK GOLD
Miner Looks to Sell
Montana Facility
Barrick Gold Corp. is looking to sell its Golden Sunlight mine in Montana, according to people familiar with the
matter, continuing a two-year-long drive to shed noncore assets.
The Toronto-based gold-mining giant has hired Canadian Imperial Bank of Commerce, Canada's-fifth largest
bank, to help sell the mine in Jefferson County, southwestern Montana, one of these people said. The open-pit
mine is one of Barrick's smallest properties, producing 92,000 ounces of gold in 2013, according to the company's

website. Golden Sunlight has a relatively short shelf life, with around 192,000 ounces of gold left at the end of
2013.
A company spokesman declined to comment.
Barrick Gold first announced plans to shed noncore assets in the summer of 2012 to boost profits and free cash
flow, and has since sold a number of operations, raising more than $1 billion. The sales followed years of buying
mines around the world.
The company had also been in talks to sell its 73.9% stake in African Barrick Gold PLC to Chinese miner China
National Gold Group Corp., but that deal later fell apart.
-- Alistair MacDonald and Ben Dummett
Document J000000020140703ea7300037

Ford sweetens pay deal for its new CEO ; Fields greeted with 13% raise, stock, millions in incentives
MONEY
Ford sweetens pay deal for its new CEO ; Fields greeted with 13% raise, stock, millions in incentives
Alisa Priddle, Detroit Free Press
414 words
3 July 2014
USA Today
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On his first day on the job, new Ford CEO Mark Fields got a 13% pay raise, sweetened bonuses -- and he gets to
use a private jet again for personal travel.
Fields' salary will go from the $1.54 million he was getting as chief operating officer to $1.75 million as CEO,
according to documents filed on Wednesday with federal regulators.
If all targets are met, Fields also is eligible for $3.5 million in performance incentives this year, making his 2014
package worth $5.25 million, not including additional options that vest each year.
The board also granted Fields 710,227 Ford shares that are vested over three years and can be exercised over
10 years. At $17.21 a share, the current value would be $12.2 million.
The board also determined that Fields -- whose family lives in Florida and whose job takes him around the world
-- will be required for security reasons to use private aircraft for all his travel, business and personal, as was
former CEO Alan Mulally.
Fields currently flies commercial, first class paid for by Ford, for his weekly commute to the family home. But in
October 2005, when he moved from CEO of Ford-controlled Mazda to Ford's Dearborn, Mich., headquarters to
become President of the Americas, Fields' contract granted him use of a Ford plane for his personal travel to
Florida.
He voluntarily gave up that perk in 2007 for commercial flights after media reports and public outcry criticizing the
spending. In December 2008, with Ford still in a financial crisis, the company announced plans to sell its
corporate jets.
Mulally, who retired Tuesday, received $23.2 million for 2013, with a salary of $2 million, a $5.9 million cash
bonus and $15.3 million in long-term stock options, performance awards and pay for items such as security.
Fields is not yet in the same pay bracket as Mulally, but the promotion is expected to provide a nice bump from
the $10.2 million total package he received last year as COO. His total compensation this year will be released in
next year's proxy.
For comparison, Executive Chairman Bill Ford reported $12 million total compensation last year. General Motors'
new CEO Mary Barra is eligible to earn about $14.4 million this year.
photo Joshua Lott, Getty Images

Document USAT000020140703ea730000e

Recent recalls haven't hurt Ford, GM sales as much as expected
NEWS
Recent recalls haven't hurt Ford, GM sales as much as expected
233 words
3 July 2014
USA Today
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Chrysler and General Motors sales went up by 9.2% and 1% respectively, while Ford sales dropped by 5.8%,
compared with last June.
I'm surprised anyone would buy a GM vehicle. It adds several million to its recall list on what seems like a daily
basis.
Cory Goulding
The first Ford Escapes of the new design had massive recalls, but most consumers like them, and it has been a
great seller. Most recalls are not to correct a problem but to prevent one from ever happening. And many are now
software-related, too -- and we get those all the time on our computers and phones and think nothing of them.
Terry Mayer
In June 2013, sales for Ford were pretty good (sales were up 13%). So is it really surprising to see an overall 6%
drop from those numbers this year? Not really. And as for the trucks, the manufacturers are approaching
downtime, during which they will switch out to manufacturing the new 2015 model.
They are offering less in incentives so they have enough trucks to get them to the new model when factoring in
the downtime. Ford knows what it's doing. Plus it managed its finances and did not take any bailout money. I'm
Glad to be driving two of its vehicles.
Marty Beck
Document USAT000020140703ea730005t

Corporate News: GM Trying to Turn Its Cars Into Wi-Fi Hotspots
Corporate News: GM Trying to Turn Its Cars Into Wi-Fi Hotspots

By Jeff Bennett
205 words
3 July 2014
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General Motors Co. will soon begin an effort to sell high-speed Internet service to buyers of everything from
$17,000 Chevrolet Spark subcompacts to top-of-the-line Cadillacs, a test of how much consumers are willing to
pay to be online at the wheel.
The campaign is the first time the nation's largest auto maker has promoted one electronics technology across its
Chevrolet, Cadillac, Buick and GMC brands. The Wi-Fi option would allow 2015 model year vehicles to link up to
seven cellphones, laptops and other gadgets to the Internet.
GM is making its 4G LTE and Wi-Fi hot spot option the centerpiece to an effort to challenge rival Ford Motor Co.'s
Sync, which offers Wi-Fi access and voice-activated calling, music and navigation controls.
The communication services will be provided by AT&T Inc. Customers will have to pay $10 a month for 200
megabytes of data. GM says that is enough to stream music over an app like Pandora for 6.5 hours, or to spend
roughly 13 hours surfing the Internet.
Document J000000020140703ea730002a

Corporate News: U.S. Car Sales Climb Higher
Corporate News: U.S. Car Sales Climb Higher

By Christina Rogers and Michael Calia
754 words
2 July 2014
J
B2
English
Low interest rates and a brighter economic outlook drove U.S. new-vehicle sales higher for most major auto
makers in June, allaying worries of a market slowdown and setting the industry up for a strong second half.
Industry-wide auto sales rose 1.2% to 1.4 million in June, pushing the annualized selling rate to 16.98 million, its
highest pace since July 2006, according to market research firm, Autodata Corp.
For the first half of the year, auto makers sold a total of 8.2 million vehicles in the U.S., up 4.3% over the same
year-ago period.
General Motors Co. continued to throw off worries over its massive safety recalls as consumers pushed up its
June U.S. sales, while Fiat Chrysler Automobiles NV's sales soared on demand for its pickup and sport-utility
vehicles.
Toyota Motor Corp. said its U.S. sales rose 3% in June over a year earlier, and Nissan Motor Co. reported a 5%
gain. Hyundai Motor Co.'s U.S. sales rose 4% last month.
But it wasn't a good month for all. Ford Motor Co. sales fell 6% as it tapered sales to fleet buyers, such as
car-rental companies, and prepared to launch a new, aluminum-bodied F-series pickup truck.
Honda Motor Co.'s U.S. sales declined 6% as demand for its passenger cars and sport utilities also fell.
Volkswagen AG's U.S. unit reported a 22% decline for its namesake brand amid a lack of new-model rollouts.
After torrid sales in May, which included five weekends compared with June's four, analysts expected industry
sales to cool. May had a seasonally adjusted annual selling rate of 16.77 million vehicles.
June had two fewer selling days than the same period a year earlier and was tarnished by a rash of safety recalls.
"Everyone was expecting sales to fall off the cliff in June and that didn't happen," said Fred Diaz, Nissan's head of
U.S. sales and marketing.
Encouraged by the surprisingly strong June, industry executives say demand remains on track to finish the year
with U.S. new light-vehicle sales of more than 16 million.
"Incoming indicators are really consistent with a rebound in the economy," said Ellen Hughes-Cromwick, Ford's
chief economist. "We've seen good improvement in manufacturing activity. Consumer sentiment has been in
good stead, and incomes are gaining ground."
The year got off to a bumpy start with U.S. sales in January and February falling short of expectations due to
severe winter weather across the Midwest and East. Auto sales picked up in late March and April, then surged in
May, climbing 11% over a year earlier.
"We had an absolutely extraordinary May, and the good news is we had a strong June too," said Beau
Boeckmann, president of Galpin Motors Inc., which owns stores in southern California. "We're continuing to see
momentum in the industry and very positive signs."
GM said it had its best June in seven years, selling 267,461 vehicles. The 1% increase was mostly driven by
higher demand for its new large SUVs, fleet sales and a double-digit gain in its Buick brand.

But sales of some models that faced stop-sales orders and recalls were lower. Chevrolet Cruze sales fell 21%
amid a temporary halt to sales on some models. Malibu and Impala sales also fell 24% and 17%, respectively,
while Cadillac passenger-car sales were down across the board.
Demand for pickups was uneven for the month. Chrysler's Ram was the only big brand to report a gain. GM's
Silverado brand was flat and GMC Sierra sales fell 7%. Ford's F-series fell 11% over a year ago.
Ford's overall sales were 221,396, with its passenger-car sales off 1% over a year earlier.
Chrysler, which expanded an ignition-switch recall this week, sold 171,086 total vehicles in June for a 9%
increase over the same month last year.
Truck and SUV sales, which made up 77% of total Chrysler sales in the month, improved 22%, while car sales fell
19%.
Toyota said it sold 201,714 vehicles last month in the U.S., topping analysts' expectations. The company cited
double-digit gains in its recently redesigned Corolla and Camry cars.
---
Mike Ramsey contributed to this article.
Document J000000020140702ea720002x

In China, Engineers Are Hard to Keep
In China, Engineers Are Hard to Keep

By Colum Murphy
1,198 words
2 July 2014
J
B1
English
NANJING, China -- Johnny Wang grew up in a small town in the poor Anhui province in rural, eastern China,
where even riding in a car, let alone owning one was a dream. Landing a job in China's booming auto industry
changed all that.
Mr. Wang, 32, is a voice recognition engineer at Ford Motor Co.'s research and engineering lab in neighboring
Nanjing. His wife, Xiang Jun, 32, works for Chery Automobile Co. some 56 miles away in Wuhu, where the couple
owns an apartment. Mr. Wang rents an apartment nearer to his workplace and drives to the couple's home in his
Ford Focus at the weekend. Later this year they plan to take Mr. Wang's parents to Southeast Asia on their first
overseas trip.
"All the things that were totally impossible as a child are now within reach," said Mr. Wang.
A century ago, when Henry Ford began paying his assembly-line workers $5 a day, the equivalent of $116 a day
today and double the manufacturing norms of the time, he triggered a social revolution in America that
transformed low-paid workers into middle-class consumers. Much the same has happened in China.
The explosive growth of China's auto industry during the past 20 years has helped to lift tens of thousands of
Chinese like Mr. Wang into the middle class. Though below that of other major car-producing nations such as
Germany, Japan and South Korea, wages for factory workers and engineers in China's auto sector are typically
higher than average here.
Research by consultancy Mercer LLC, for example, shows wages for automotive engineers and factory workers
in Shanghai in 2013 were between 15% and 17.6% higher than the average manufacturing wage in the area.
But now auto makers are confronting in China what U.S. auto makers discovered decades ago: Workers'
aspirations rise with their pay. China is no longer a low-wage workshop for auto companies. It is increasingly a
center for engineering, and research and development initiatives.
Foreign car companies are finding it increasingly difficult to attract and keep engineering talent, as more Chinese
car companies offer better pay packages and at times broader professional experience. At the same time, all auto
makers face competition for skilled Chinese workers from certain other industries where the pay and professional
prospects are better.
Ford declined to reveal salary figures for its research and development engineers, but Chinese engineers with
experience at foreign car firms command top pay in China.
Engineers with under 10 years' experience in research and development for foreign auto makers in China earn
between 180,000 yuan ($29,200) and 300,000 yuan a year including bonuses, according to recruitment
consultancy Robert Walters PLC.
Chinese auto companies usually offer around 30% more in salary to attract top talent from foreign brands, the
consultancy said -- more when employees are asked to relocate cross-country to newly emerging industry centers
such as Wuhan, Changsha and Chongqing.
Vanessa Moriel, managing director of Human Capital Partners, a recruitment firm specializing in the auto industry,
said engineers with specialized knowledge or leadership skills could earn as much as 500,000 yuan.

Chinese auto engineers typically want to fast track their careers and seek opportunities that allow them to expand
their skills into high-tech, specialist areas, she said. Companies must pay market price salaries, she said, and
interpersonal relations are key. "Chinese don't work for a company, they work for a leader," Ms. Moriel said.
Ford's Mr. Wang is content with his career advancement and has no plans to switch to another car company,
Chinese or otherwise. "I have a long way to go in my career -- and right now, I think I have a lot to learn at Ford,"
he said.
He also said he plans to stick with the auto industry. "I do desire an overseas experience to expand my horizons,"
said Mr. Wang. As to where that might be? "My first choice would be America -- it's a country on wheels."
Keeping ambitious employees like Mr. Wang satisfied could still require some changes. He and colleague, Shawn
Ma, aspire to greater roles in industry R&D.
Mr. Ma, a 27-year-old engine component engineer, said his team mostly modifies existing Ford technology to fit
Chinese market requirements. But he is hopeful that will change in the next five to 10 years and allow the group
to design new parts that will be used globally.
"They are starting to take some leads on global products but we haven't announced anything yet," said Scott
Chang, a spokesman for Ford in China.
John Lawler, chief of Ford Motor China, recently described the expansion of the center in Nanjing as one of
Ford's "top global product-development priorities." The company has invested more than $200 million there and
plans to invest another $100 million. Ford would increase the number of employees at the Nanjing complex to
around 2,000 people by 2018 from roughly 1,300 today. When the company moved into the current facility in
2007, the center had around 300 employees.
To maintain and grow their engineering workforces in China, foreign auto companies are finding themselves
battling for talent with Chinese auto makers.
"Five years ago, a lot of Chinese wanted to work for multinationals, now that pendulum has swung," said Mary
Thornton, formerly human resources director China for General Motors Co. The attrition rate at GM in China is
around 12% a year, she said. Some other companies in the industry have rates of around 20%, according to
Human Capital Partners.
If Chinese car makers evolve into national or even international champions, more Chinese engineers working for
foreign companies may switch allegiance to homegrown companies.
"The auto industry is almost 100 years old, but I think for China we're just at the start," says Mr. Ma. "At this time
we're working for a foreign company. But in the future, more and more Chinese people are going to work in the
industry and contribute to our own China automobile" industry.
Ms. Moriel said that trend could become more pronounced as ambitious Chinese employees realize that top jobs
at foreign auto makers still go to foreigners. At Chinese companies, Chinese engineers have more chances to
perform management roles beyond R&D and, she said, stand a greater chance of becoming chief executives one
day.
Still, the auto industry remains a popular choice among engineering graduates. In a recent survey employer
branding consultancy Universum Group AB said the car industry overtook heavy industry as the "most ideal"
sector to work upon graduation for Chinese engineering students, something the consultancy said could be due to
students' perception of the industry as creative and dynamic.
But when Universum looked at specific companies, auto makers in China trailed leading technology companies
such as Huawei Technologies Co. and Google Inc. Only one, BMW AG, appeared on the top 10, ranking at No. 8.
China's FAW Group ranked 14 and GM's Shanghai GM joint venture ranked 20th.
Document J000000020140702ea7200025

Air-Bag Fix Needed, But It's Not 'Recall'
Air-Bag Fix Needed, But It's Not 'Recall'

By Christina Rogers
768 words
25 June 2014
J
B1
English
Federal regulators have warned that airbags in millions of cars could explode, but they haven't ordered a formal
recall, leaving consumers, dealers and auto makers in an awkward position.
Japanese auto parts maker Takata Corp. has alerted safety officials that cars equipped with its air bags and kept
in ultra-humid climates could explode upon deployment, sending metal shrapnel into the front cabin. Tokyo-based
Takata says it is aware of at least six incidents of ruptured airbags, all of which occurred in either Florida or
Puerto Rico. But Takata says it doesn't know the root cause of the problem, nor how many vehicles are at risk.
U.S. safety regulators say they are investigating the incidents but have yet to determine a cause or identify a
safety defect, a necessary step in launching an official safety recall.
In the meantime, NHTSA has asked car makers to initiate limited recalls, focusing mostly on Southern states and
territories, to replace the air bag inflator module.
NHTSA says that based on the limited data available now, it wants to support efforts by auto makers to respond
to "the immediate risks in areas that have consistently hot, humid conditions over extended period of time." The
agency has told car makers the purpose of the limited recalls was to collect air bag parts to help with the
investigation.
As a result, some car makers are describing their offers to replace Takata airbag inflators in certain regions of the
U.S. as a "field action" or "service program," avoiding the term "recall." Mazda Motor Corp. says it is referring to
its effort as a "Special Service Program."
Others, including Ford Motor Co., say that federal officials have asked them to designate the airbag campaign as
a safety recall, but insist they haven't approved the use of that term -- which would require filing formal notices to
regulators and inform consumers.
On Monday Chrysler Group LLC said it would honor a request by the National Highway Traffic Safety
Administration to replace airbag inflators in 2006 Dodge Chargers, registered in Florida, Hawaii, Puerto Rico and
U.S. Virgin Islands. Chrysler stressed the action was "not a safety recall" but rather a "regional field action
conducted out of an abundance of caution."
NHTSA says it is looking into an estimated vehicle population of about 1 million vehicles from the 2002-2006
model years.
This isn't the first time that auto makers have had to fix airbag systems with possibly defective Takata inflators.
Problems with Takata air bag inflators have led to recalls of 10 million vehicles since 2009.
The bottom line this time is that dealers are being asked by NHTSA to fix the air bags even though an official
safety recall hasn't been initiated.
"That doesn't make any sense," said Earl Stewart, owner of Earl Stewart Toyota in North Palm Beach, Fla. "How
can you tell a customer that anything to do with an airbag is not a safety problem?"
Clarence Ditlow, executive director for the Center for Auto Safety, said such limited recalls typically don't ensure
that all vehicles affected by the problem will be fixed and are a way for companies to avoid a larger, more
expensive campaign.

Auto makers say the regional campaigns will target affected vehicles based on where they were originally sold
and current registration data.
But Mr. Ditlow said that's not enough. "What about people who take vacations? What about people who go to the
beach?" he said.
Chris Martin, a spokesman for Honda Motor Co., said the regional campaigns could be just the beginning.
Depending on the results of NHTSA investigation, the recalls could be broadened later on. Even so, "it's going to
take some time for us to get all the parts," he said.
BMW AG, Chrysler, Mazda, Ford, Toyota Motor Corp., Honda and Nissan Motor Corp. have all said they will
respond to NHTSA's request to track down vehicles with the suspect Takata inflators.
NHTSA has advised car makers to notify customers using the same envelope labels reserved for official safety
recalls. Internally, however, the agency has said that neither Takata nor the car makers "would be expected to
admit that its products contained such a defect."
"All affected owners will get their vehicles fixed for free and will receive notification in an envelope using NHTSA's
required label," the agency said. That label has big bold letters across the top that read "Important Safety Recall
Information."
Document J000000020140625ea6p0003b

Pension Funds Missed Stock Rally --- Push to Diversify Portfolios Didn't Pay Off for Large Investors, Including University Endowments
Pension Funds Missed Stock Rally --- Push to Diversify Portfolios Didn't Pay Off for Large Investors,
Including University Endowments
By Gregory Zuckerman
1,109 words
24 June 2014
J
C1
English
Corporate pension funds and university endowments in the U.S. have missed out on much of the rally for stocks
since 2009, following a push to diversify into other investments that have had disappointing performances.
The institutions, ranging from large corporations such as General Motors Co. to big universities such as Harvard,
have been shifting to hedge funds, private equity and venture capital. But while these alternative investments
outpaced stocks during 2008's market meltdown and are seen as potentially less volatile, they have badly lagged
behind the S&P 500 since 2009, a period in which U.S. stock indexes have more than doubled.
Diversifying away from stocks could work out since many of these institutions enjoy long investment horizons and
won't need to spend the bulk of their assets until years in the future, if ever. At the same time, many alternative
investments have topped stocks over the past decade. Investments in private equity nearly tripled the gains in
stocks, according to Cambridge Associates LLC, which invests in these funds for clients.
Missing out on recent stock gains, though, adds to challenges facing pension funds, some of which don't have
enough assets to meet future obligations. For universities dependent on endowment income, reducing
stockholdings represents a lost opportunity in a time of stretched resources.
The recent poor showing has put a spotlight on pension funds and endowments that have turned away from
stocks for more than a decade, including the period after the market's plunge, when stocks became inexpensive
relative to their earnings.
"Alternative asset classes are expensive, especially if you have to live with the average fund instead of stellar
funds," said William Goetzmann of the Yale School of Management. Hedge funds and private-equity firms
generally charge investors much higher fees than mutual funds and other traditional investments, including
management fees of as much as 2% of assets and a take of any returns.
Harvard University, with the world's largest endowment, at $32.7 billion, had an average annual return of 10.5%
over the past three years through June 2013, according to the school, well below returns of 18.45% for the S&P
500, including dividends, over that same period. Yale University, with an endowment of $20.8 billion, and Stanford
University, $21.9 billion, had returns of 12.8% and 11.5%, respectively, over that same period, the schools said.
Over the past 10 years, the schools fared better, generating gains of 9.4%, 11% and 10%, respectively, above the
7.3% return of the S&P 500. Spokesmen for the schools declined to comment.
The U.S. companies with the largest defined-benefit pension plans in 2013 posted an average return of 9.9%,
according to a survey of 100 large firms by Milliman, which provides actuarial products and services. The S&P
500 returned 32% in 2013, including dividends.
The average college endowment had 16% of its investment portfolio in U.S. stocks as of the end of June 2013,
the most recent academic year, according to a poll of 835 schools conducted by Commonfund, an organization
that helps invest money for colleges. That is down from 23% in 2008 and 32% a decade ago. The 18% allocation
to foreign stocks didn't change in that period. Schools in the poll, which collectively manage nearly $450 billion,
had 53% of their funds in alternative strategies, up from 33% in 2003.

The average allocation of corporate pension funds to stocks was 43% at the end of last year, down from 61% at
the end of 2003, according to J.P. Morgan Chase & Co. The average public pension fund had 52% of its portfolio
in stocks at the end of 2013, down from 61% at the end of 2003, J.P. Morgan said.
While stockholdings have shrunk, alternative investments made up 25% of the portfolios of public pension funds,
up from 10% a decade ago. Corporate funds had 21% of their money in alternative investments, up from 11% at
the end of 2003, J.P. Morgan said. Hedge funds and private-equity firms can use a range of strategies, including
betting against stocks and buying and selling companies.
The shifts haven't worked out lately. Since the start of 2009, when the market began rallying, the S&P 500 has
climbed 137%, including dividends, to record levels. By contrast, the average hedge fund is up 48%, according to
research firm HFR Inc., while the average hedge fund that is focused on stocks has risen 57%. Over that same
time, private-equity funds have climbed 109% on average, while venture-capital funds rose 81%, according to
Cambridge Associates.
Among large U.S. companies with small allocations to stocks in their pensions, shareholdings ranged from 5.2%
at NCR Corp. to 14% at Prudential Financial Inc. and TRW Automotive Holdings Corp. to 15% at Ford Motor Co.
to 18% at General Motors to 19% at Citigroup Inc., as of the end of fiscal 2013, according to Milliman and data
provided by the companies.
A Prudential spokesman said the company establishes "guidelines that match our obligations with assets in the
plan." A Citigroup spokesman said its plan is "largely invested in assets other than equities in part because it has
been closed to new participants for several years and has adopted an approach that is consistent with plan
closure."
A GM spokesman cited language in the company's annual report that the asset mixes of GM's pension fund aim
to improve its funded positions while trying to reduce the plan's risks. Spokesmen for NCR, Ford and TRW
declined to comment.
Some pension funds elect to have big bond holdings instead of shares or alternative investments. CBS Inc.,
which had 26% of its pension fund in stocks as of last year, largely invests in bonds, a spokesman said.
Some institutions aim to achieve a certain return above inflation and find steady returns from
alternative-investment vehicles make it easier to plan future spending. The long-term results of alternative
investments are somewhat better. Over the past 10 years, the S&P 500 has climbed 114%, including dividends.
That bests the 75% gain of the average hedge fund, according to HFR, and the 68% return of the average
stock-focused fund. But private-equity funds topped stocks, rising 304% on average over that period, while
venture-capital funds climbed 153%, according to Cambridge Associates.
Document J000000020140624ea6o0003d

Air-Bag Recall Hits 10 Million Cars --- Honda, Nissan, Chrysler Join List of Firms Seeking to Replace Defective Device That Can Explode
Air-Bag Recall Hits 10 Million Cars --- Honda, Nissan, Chrysler Join List of Firms Seeking to Replace
Defective Device That Can Explode
By Eric Pfanner and Christina Rogers
1,079 words
24 June 2014
J
B1
English
Seven major auto makers on Monday disclosed they combined would recall millions of vehicles equipped with air
bags that could explode under certain circumstances.
The moves expand on earlier efforts to find and fix potentially defective air bag inflators made by Takata Corp.,
and highlight the challenges for auto makers to contain mass recalls.
Tokyo-based Takata is one of three major manufacturers of air bags and supplies similar components to auto
makers around the world. That strategy allows car makers to save money on parts through economies of scale,
but heightens the risk of large-scale recalls. General Motors Co., under pressure from U.S. regulators, has
recalled 20 million vehicles world-wide this year over a variety of defects.
The problems with Takata air bag inflators have led to recalls of 10 million vehicles since 2009. Takata says it
knows of at least six incidents in which the cylinder-shaped inflators exploded, sending metal fragments flying.
In one incident cited by U.S. highway safety regulators, a one-inch piece of metal propelled from an exploding air
bag hit the right eye of the driver of a 2005 Honda Civic, causing loss of sight and facial lacerations that required
100 stitches, according to a complaint describing the August 2013 accident.
Honda Motor Co., Mazda Motor Corp. and Nissan Motor Co. on Monday recalled 2.9 million cars world-wide for
potentially faulty Takata air bags.
The U.S. National Highway Traffic Safety Administration on Monday said Toyota Motor Corp., BMW AG, Chrysler
Group LLC and Ford Motor Co. in addition to Honda, Mazda and Nissan would conduct regional recalls on
vehicles equipped with Takata air bags. Its recall targets Southern states and territories with hot, humid weather
and a precise number of vehicles involved isn't yet available.
NHTSA is still investigating the issue. The air-bag recalls appear to involve inflators made in the early and middle
part of the last decade in plants in Washington state and in Mexico.
The latest actions follow Toyota's June 11 recall of 2.2 million vehicles equipped with Takata air bags. Many of its
recalled vehicles had already been recalled once for inspection in 2013, but Toyota said it had received an
incomplete list of potentially faulty parts from Takata the first time around.
Takata first notified U.S. safety regulators in April 2013 it needed to recall vehicles with the faulty air bags. That
month, auto makers including Toyota, Honda and Nissan announced a recall of more than three million vehicles,
including about 1 million in the U.S.
At the time, Takata said it didn't know how many vehicles would be affected by the recall but identified six auto
makers that had installed the air bags on their vehicles: Toyota, Honda, Nissan, Mazda, BMW and GM.
Takata says the car makers are responsible for handling the recalls, including notifying owners and replacing the
air bags.
Takata last week said the NHTSA investigation was prompted by six incidents that occurred in either Florida or
Puerto Rico, and it said their humid climates may be one reason for the air bag problems.

"We currently believe the high levels of absolute humidity in those states are important factors; and as a result our
engineers are analyzing the impact that humidity may have on the potential for an inflator malfunction, as well as
other possible contributing factors," said Takata Chief Executive Shigehisa Takada last week.
Air bags are Takata's biggest business, accounting for 43% of its 556.9 billion yen ($5.47 billion) in sales in its
latest fiscal year. Takata posted net income of 11.1 billion yen for the year ended in March, from a net loss of 21.1
billion yen a year earlier.
A Takata spokesman said the company hadn't yet determined how the new recalls might affect its earnings. Last
year, it took a $300 million charge related to the previous recall.
In addition to air bags, Takata makes other auto parts, including steering wheels, seat belts and lane-departure
warning systems. Takata, originally a textile company founded in 1933, acquired auto parts maker Petri AG of
Germany in 2000. Its biggest air bag rivals include Sweden's Autoliv Inc. and TRW Automotive Holdings Corp. of
the U.S.
The air-bag recalls aren't the only problem that Takata has faced recently. Last year, the company agreed to
plead guilty to settle U.S. antitrust charges that it had participated in a scheme to fix the prices of seat belts and to
pay $71.3 million.
Takata was involved in a large recall in the U.S. in 1995, when nearly nine million cars were recalled for repairs to
potentially faulty seat belts it had supplied.
In the latest recall, Honda said it would recall two million cars world-wide, including its top-sellers Accord and
Civic, to fix possibly defective air bag inflators supplied by Takata.
Nissan is recalling 755,000 vehicles, including some Sentra, Pathfinder and Maxima models and certain Infiniti
I30/I35, QX4 and FX luxury models. Mazda said it was recalling about 160,000 vehicles, mostly Mazda6, RX-8
and MPV models.
In Japan, Honda, Nissan and Mazda said they would turn off passenger air bags in vehicles now on the road to
prevent an possible inflator explosion.
As a temporary remedy, Toyota has disabled air bags in affected cars in Japan, said spokesman Brian Lyons. He
said the company took step as a stop-gap measure because Japanese regulators require a remedy in case of
recalls, and parts are running short.
Takata's shares rose nearly 3% to 2,111 yen in trading in Tokyo on Monday and remain slightly above the level at
which they were trading before the April 2013 recall announcement.
---
Common Problem
Some of the models in line for new air bag inflators:
Honda: 2001-2005 Civics, 2001-2007 4-cyl. Accords, 2002-2006 CR-V, 2002-2004 Odyssey, others
Nissan: 2001-2003 Maxima, Pathfinder, I30/I35, others
Mazda: 2003-2007 Mazda 6, 2004-2008 RX-8, others
Toyota: 2003-2005 Corolla, Matrix, Sequoia, Tundra, others
Dodge: 2006 Charger
Ford: 2005-2007 Mustang, 2005-2006 GT, 2004 Ranger
BMW: certain 3 Series
Sources: NHTSA, auto makers
Document J000000020140624ea6o00039
2015 Chrysler 200 sweet disappointment ; Easy on the eye, fun on the foot, but not perfect
MONEY
2015 Chrysler 200 sweet disappointment ; Easy on the eye, fun on the foot, but not perfect
James R Healey
1,177 words
20 June 2014
USA Today
USAT
FINAL
B.6
English
Looks cool, needs work.
The 200 has grown up into an attractive midsize sedan that Chrysler hopes will face off very well against the big
dogs in the category -- Honda Accord, Toyota Camry, Ford Fusion, Hyundai Sonata.
Appearance and power are sufficient to do the trick. But our two 200 test cars had issues we thought would have
been ironed out by now.
First, the good stuff:
Styling. Great job distinguishing the 200 from the many other midsizers that look like a worn bar of soap. The
general shape is dictated by the need for low wind resistance, to meet tightening federal mileage standards. So
it's hard to distinguish your bar of soap from the next guy's, but Chrysler does it well.
Ford's Fusion, which Chrysler says is No.1 rival to the 200, likewise has great eye appeal.
Interior. The two well-furnished test cars had thoughtful and good-looking insides, as befits the higher end of the
200 model line. The wood trim is actual wood, not woodish plastic, Chrysler says, and that's rare outside the
luxury-car universe.
The multi-featured center console has several ways to hold phones, iPods, beverages, what have you, usually
without interfering with each other or having to share space.
Seats were just OK on comfort. Your physique might find them swell. And they certainly look good in either
leather or cloth upholstery.
Power. We drove no four-cylinder versions, so withhold comment on those. The V-6 is a howling good time under
hard spur. It's the 3.6- liter Pentastar V-6 (295 hp) used in many Chrysler Group vehicles.
Mileage. Good by our admittedly low standards. Both V-6 cars registered 19 mpg, one in heavy-foot suburban
running, the other in a mix of city/highway.
The V-6 and four-cylinder both use regular gas, saving you a few bucks at the pump. And they are what they are:
straightforward gas engines with good technology but eschewing turbo this and hoo-hah that. Those more exotic
engines -- which claim to sip like mini powerplants but go like mega muscle -- usually do neither.
Infotainment. Chrysler's true-blue Uconnect immediately paired with any phone we offered and stayed paired.
Voice control was above- average in ease of use and speech intelligibility.
Still no match for Test Drive's Garmin aftermarket navi, though.
Now, the not-so-good:
Trunk lid. Ouch. On neither test car would it stay partway open as you sometimes want, or assume it will. Nor did
it rise all the way when you lifted it casually.
As a result, it fell on a child's arm, and he expressed, in remarkably adult language, that it wasn't the high point of
his day. Separately, it drooped into perfect alignment to nearly knock out an adult as he bent over to arrange
items in the trunk.
By contrast, General Motors' trunk lids pop fully open the instant they're unlatched, and stay that way until you
slam them closed. Much better.
Chrysler tested and said the trunk setting was incorrect and adjusted it to match cars in showrooms now.
Brake pedal feel. Numb. And once you can feel the brakes respond, it's not in proportion to how hard or far you
push the pedal.
Nine-speed automatic transmission. Shared with the Jeep Cherokee and the Dodge Dart, the gearbox was too
busy in the test cars, shifting too often, and too noticeably as it moved among the gears. The programming kept
the transmission in the lower gears a bit longer than seemed proper, revving the engine a little more than most
people probably prefer in normal, low-speed driving -- sort of a "sport lite" mode.
We didn't notice those flaws driving the Jeep or Dodge.
Chrysler's first with a nine-speed. But being first isn't necessarily best. Ask people who owned inaugural versions
of BMW's iDrive control system. Or early adopters of Ford Motor's Sync control setup.
Nor is being first a guaranteed flop. Chrysler Group was first to offer an eight-speed outside the luxury market,
and it works very well.
Chassis. A bit jiggly on smooth roads, not especially forgiving over drainage channels. Not the just-so tuning
we've felt on bigger Chrysler Group vehicles, such as the Jeep Grand Cherokee and even the big Ram pickup.
The 200 AWD car felt smoother, more composed, more comfortable over bumps, which could be a nod to its
extra weight -- though lighter cars usually feel better to drive than heavier ones.
The Chrysler 200 looks so appealing, the higher-level models have such well-done interiors, and the V-6 is so
much fun that we'd love to offer a standing ovation. But the drawbacks make us wary. We'd wait to see if the car
gets better in Year Two.
List
2015 Chrysler 200
What? Full-on remake of the midsize, four-door sedan based on chassis derived from Fiat's Alfa-Romeo Giulietta,
and similar to that used for Dodge Dart and Jeep Cherokee. Available with four- cylinder or V-6 engine,
front-wheel drive (FWD) or (V-6 only) all- wheel drive (AWD).
When? On sale since mid-May.
Where? Made at Sterling Heights, Mich.
How much? Base model, LX, starts at $22,695, including $995 shipping. Top-level C with AWD and every listed
factory option is $36,265.
Well-equipped test cars: 200S AWD V-6, $33,470; 200C FWD V-6, $34,415.
What makes it go? Standard: 2.4-liter four-cylinder MultiAir2 rated 184 horsepower at 6,250 rpm, 173 pounds-feet
of torque at 4,600 rpm. Optional, 3.6-liter Pentastar V-6 rated 295 hp at 6,350 rpm, 262 lbs.-ft. at 4,250 rpm. Both
use a nine-speed automatic transmission.
How big? Fraction of an inch longer, wider, taller than Ford Fusion, which Chrysler says is the chief rival. Despite
4.2-in. shorter wheelbase, the 200 interior is only 1.4% smaller than Fusion. Trunk is the same -- 16 cubic feet.
Weighs 3,473 lbs. and up, depending on model.
Turning-circle diameter, 39.2 feet (FWD), 39.5 ft. (AWD).
How thirsty? Four-cylinder rated 23 mpg in the city, 36 mpg highway, 28 mpg combined city/highway driving.

V-6 rated 19/32/23 (FWD), 18/29/22 (AWD).
200C FWD V-6 test car registered 19 mpg (5.26 gallons per 100 miles) in suburban driving that included
full-throttle bursts. 200S AWD V-6 tester showed the same 19 mpg in mix of city, highway.
Both engines burn regular; tank holds 15.8 gallons.
Overall: Looks sweet inside and out; chassis and drivetrain need refinement.
List
What stands out
Styling: Very appealing.
Interior: Roomy, thoughtful.
Drivetrain: Needs work.
photo Photos by CHRYSLER

Document USAT000020140620ea6k00003

Corporate News: Gripes About New Cars Tick Higher
Corporate News: Gripes About New Cars Tick Higher

By Christina Rogers
788 words
19 June 2014
J
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English
DETROIT -- Consumers this year generally reported more flaws with their new cars than they did a year ago,
according to a new-car quality survey that cited struggles with in-car technologies such as phone pairing and
voice recognition.
Among Detroit auto makers, Ford Motor Co. was the one exception with fewer flaws than a year ago after years
of below-par grades tied to consumer complaints about its MyFord Touch multimedia system.
Ford's ranking climbed seven notches and tied with the industry's average number of flaws in the latest J.D.
Power & Associates Initial Quality Study, which compiles rankings based on problems reported by owners during
their first 90 days of ownership.
General Motors Co., had several brands whose scores fell in the rankings after a strong showing in 2013. Overall,
its brands averaged 114 flaws per 100 vehicles, slightly better than the industry average and Chevrolet, for a
second year in a row, was the top-ranked domestic brand.
The average number of flaws in Chrysler Group LLC's four brands rose slightly over a year ago to 124 per 100,
hurt by a greater number of complaints on a new Jeep sport-utility vehicle.
Overall, J.D. Power said new-vehicle owners reported about 3% more problems, or 116 flaws per 100 vehicles,
than a year earlier largely due to difficulties customers reported with new technology features.
The cold winter weather also played a role, exposing mechanical flaws at a higher rate, particularly with the
engine and transmission.
"Auto makers continue to go through this painful transition of introducing these new technologies," said Dave
Sargent, J.D. Power's vice president of vehicle research. "Customers want them. Then, they complain about
them."
Ford's rise signals it is now starting to move past earlier problems with its in-car entertainment and phone system.
Since it launched MyFord Touch in 2010, Ford's initial-quality score has gone from among the top in the industry
to below average, sinking to sixth from the bottom in 2013.
Consumers have complained about glitches in the software and the system being too difficult to use.
Ford has since made changes to improve the speed and simplicity of the interface, including adding back some
buttons and knobs to make the radio easier to use. Ford had 116 problems per 100 vehicles, according to this
year's study.
"Virtually, every vehicle they have has gotten better this year," Mr. Sargent said. "They've acknowledged that they
probably got over their skis a bit."
GM received six segment awards, the most of any auto maker for a second consecutive year. The accolades are
good news for a company battling to restore its image after delaying the recall of 2.6 million older-model small
cars for more than a decade. A faulty ignition-switch on those vehicles has been linked to 13 deaths.
However, its GMC truck and sport-utility brand, which last year captured the No. 2 slot, fell to the middle of the
pack, largely due to the recent release of a redesigned Sierra pickup. Newly redesigned models tend to have
more quality problems than vehicles further along in the product cycle because companies haven't had as long to
work out all the kinks, Mr. Sargent said.
Buick slipped below the industry average with 120 problems per 100 vehicles. Cadillac remained about the same.
Mr. Sargent said GM's recent recall crisis didn't have any impact on its rankings because the models involved are
mostly older vehicles.
Chrysler, a unit of Fiat Chrysler Automobiles NV, also had mixed results. Its Ram and Chrysler brands rose in the
survey's rankings with above-average scores. Dodge also improved its score but remained below the industry
average.
Jeep, however, finished second from the bottom due to the launch of its Cherokee last year. The new model had
quite a few quality flaws that still need ironing out, Mr. Sargent said. Fiat fell to last place with 206 problems per
100 vehicles.
For the second year in a row, Porsche held the top spot with only 74 problems per 100 vehicles, while Toyota
Motor Corp. recaptured its place among the top five brands, after falling to sixth place in 2013.
Jaguar rose into the No. 2 spot, up from eighth place in last year's study, while Hyundai Motor Co. climbed to
fourth place overall, making it the highest ranked nonluxury brand.
The study was based on responses from more than 86,000 owners or lessees of 2014-model year vehicles. The
study was conducted between February and May.
Document J000000020140619ea6j00039

Corporate News: Aluminum Cars Take Heat From Mittal
Corporate News: Aluminum Cars Take Heat From Mittal

By John W. Miller and Mike Ramsey
691 words
17 June 2014
J
B3
English
NEW YORK -- ArcelorMittal, the world's biggest steel company, is fighting back against aluminum's advances in
the U.S. and European automotive industries by investing heavily in fast-growing car markets, such as China and
Mexico, where steel still rules, according to CEO Lakshmi Mittal.
Mr. Mittal also challenged claims that aluminum is invariably lighter, saying the aluminum industry uses outdated
data when comparing its metal to steel. In prepared remarks to be delivered Tuesday morning at a steel
conference here, Mr. Mittal said new forms of steel can compete with aluminum on weight. "Steel can provide all
the weight reduction that auto producers require to satisfy the new fuel-efficiency standards, for all types of
vehicle," Mr. Mittal said.
The steel industry is on its heels following a report this month from Ducker Worldwide that 18% of all vehicles will
have all-aluminum bodies by 2025, compared with less than 1% now. The report said that Ford Motor Co.'s
decision to use an aluminum body for its coming 2015 F-150 pickup signals a move by auto makers toward
lightweight materials for pickups and sport-utility vehicles to meet tougher fuel-economy standards. An alternative
would have been to simply build smaller cars made out of steel.
Auto makers are rushing to take weight out of vehicles to achieve better fuel economy as regulations in Europe,
China and the U.S. tighten. Fuel economy must rise 5% every year until 2025 in the U.S., pushing companies to
take chances on more expensive aluminum rather than steel.
Much of the growth in auto sales over the next seven years is forecast to come in China, India and the Middle
East, and Mexico continues to grow as a production hub in North America.
This past weekend, Mr. Mittal cut the ribbon on the opening of VAMA, an $832 million joint venture in
southeastern China between ArcelorMittal and Hunan Iron & Steel Co. ArcelorMittal's first major steelmaking
investment in China, it will be able to produce 1.5 million tons of automotive steel a year for the Chinese car
industry, which grew 16% to 18 million units produced last year.
The plant will produce "high-strength automotive steel in China, the world's largest and fastest-growing
automotive market," Mr. Mittal said. He said the plant's customers will be global brands, including Volkswagen AG,
General Motors Co., Ford, Toyota Motor Corp. and others, as well as leading domestic manufacturers.
Mr. Mittal said the growth of the global auto market will be concentrated in developing economies, with 32 million
of the 33 million additional cars produced annually coming from developing markets.
The CEO also detailed investment in Brazil and said that his recent purchase of a big plant in Alabama was in
part motivated by the opportunity to export steel from that plant to Mexico.
He said that claims by aluminum makers that their metal is "30% or 40% lighter" than steel is "accurate if you are
using the steel of 2005 as a comparison." Mr. Mittal also said that making steel generates fewer emissions that
aluminum smelting.
"The voices that matter most are those of the customers, and their words are matching by their actions in the
marketplace," said a spokesman for the Aluminum Association. "A recent survey of North American auto makers
confirms that within a decade, 75% of all pickups and more than 20% of all SUVs and large sedans will convert
from steel to aluminum bodies."

New types of steel, which are made using a special heating and cooling process, are harder and lighter than
before, he said. For example, a new door ring engineered for the new Honda Accura MDX is a full 8.8 pounds
lighter than previous models, he said.
By 2025, aluminum will comprise more than 75% of pickup-truck body parts, doors, hoods and lift gates, 24% of
large sedans, 22% of SUVs and 18% of minivan body and closure parts, according to the Ducker Worldwide
study.
Document J000000020140617ea6h0002k

Have You Shopped for a '70 Ford Lately?
COLLECTING
Automobiles; SECTAU
Have You Shopped for a '70 Ford Lately?
By LARRY EDSALL
1,300 words
15 June 2014
The New York Times
NYTF
2
English
EL MIRAGE, ARIZ. -- To step into Kevin Marti's garage here is to travel back in time, to reset the dial on the
WABAC Machine for 1970 and the destination for the Ford dealership in Anytown, America.
There's a parts department, a display area to show off a few seemingly brand-new cars (actually, they were new
in the late 1960s and very early '70s) and a service area with a pair of lifts and all the tools and equipment needed
to repair and maintain a Ford, Lincoln or Mercury. The cars are not for sale, however: They are from Mr. Marti's
personal collection, mostly Fords and Mercurys.
This nearly half-century-old ''dealership'' here, a half-hour west of Phoenix and not far from the runways of Luke
Air Force Base, is the new home of Marti Auto Works, famous among Ford collectors for its Marti Reports. These
documents provide information about individual vehicles from the day they started moving along the assembly
line, detailing the color of the original paint, the specific powertrain combinations in the car when it left the factory
and the options that were added.
Two buildings in the Marti complex are up. Three more -- one to become a restoration shop and others for vehicle
storage and for entertaining classic-car owners -- are on the drawing board.
And while this complex, which melds Mr. Marti's business and personal interests, is a monument to his symbiotic
five-decade relationship with Ford, it all began with a quirk of fate -- and a misunderstanding by his mother.
In 1973, Mr. Marti was a 16-year-old in Phoenix, eager to buy his first car. Armed with savings from his
newspaper delivery route, he had $1,600 to spend, and he wanted a Chevrolet -- not a Ford. One Sunday
morning after his route was done, his mother took the newspaper, turned to the auto classifieds and copied down
all the Camaros and Chevelles for sale, which were grouped in alphabetical listings. Then they drove around to
look at the available cars, but nothing met Mr. Marti's expectations or budget.
For reasons he didn't understand, his mother had also copied down the car that followed the Camaros and
Chevelles in the ads. It was a Cougar, a variation on the Mustang that was sold by Ford's Mercury division. Mr.
Marti said he wasn't interested, but his mother insisted that they at least take a look.
''I saw the sequential taillamp signals and bought the car,'' Mr. Marti said, referring to the Cougar's distinctive rear
signals that lighted up in a one-two-three sequence, like a neon sign in Las Vegas, when a turn was indicated. Mr.
Marti says his mother's ''little mistake'' when she compiled their shopping list ''changed everything in my life.''
Ultimately, given the business that grew out of Mr. Marti's developing interest in old Fords and Mercurys, that
mistake also changed the lives of Ford fans, collectors and restorers.
Around the time Mr. Marti was buying his Cougar, the popular movie ''American Graffiti'' was released. Mr. Marti
recalls that one day, while cruising in his Cougar, he had an experience similar to a scene from the film in which
Richard Dreyfuss's character catches a fleeting glimpse of Suzanne Somers. Several days after spotting the
Somers look-alike, Mr. Marti says, he saw the same blonde in the same car, and this time there was a brief
conversation. The young woman told the impressionable teenager that his car would be better if it were a
convertible.

So Mr. Marti, by then 17 and a recent high school graduate, was moved to saw the roof off his Cougar, only to
find ''I couldn't open the doors anymore.''
His discovery that removing the structure above the passenger compartment caused his car to sag in the middle
resulted in another change in Mr. Marti's life: He would enroll in college and study engineering and have a short
but successful career doing research and development for a Space Shuttle contractor.
But eventually he realized that what he really wanted to do was to turn his hobby into a business. He completed
his unique Cougar convertible with parts salvaged from a pair of Mustang convertibles in a junkyard. He also
found a high-performance Cougar Eliminator in a salvage yard, and his restoration of that car led to his current
relationship with Ford.
By 1979, Mr. Marti had his Eliminator running, but couldn't find stripes to match its original appearance. After
placing calls to Ford, he learned the stripes were no longer in production, but that the equipment to make them
was still around. He could buy the tooling and make his own.
It didn't take long for people to notice his car, and soon owners of Boss 302 and Mach I Mustangs were calling to
see if he could make stripes for their cars. With a license from Ford to produce reproduction parts, Mr. Marti found
himself in the stripe-producing business.
That was only the start. Soon he was making other parts with his wife, Shelli, who remembers stamping out
radiator hoses on her kitchen table and curing them in her oven.
Mr. Marti not only was making reproduction parts and selling ''new old stock'' parts he had acquired from
dealerships and other sources, but was restoring cars and searching for information to return those vehicles to
original condition. Through that process he learned that Ford still had the old IBM punch cards that contained
production data, but no longer had equipment that could read the cards.
As part of his hobby-turned-business, Mr. Marti had been collecting all sorts of equipment from old Ford
dealerships. He also had a punch card reader and the engineering skills to figure out how to translate the cards
into a modern database. Ford leased him the cards, and he started providing Marti Reports to car owners.
These provide, aside from data about color, interior trim and drivetrain, all sorts of other information: the date the
car was shipped from assembly plant to a dealer, even the dealership's name and location -- potentially important
to collectors, because the car's early location can suggest factors like exposure to road salt.
If your Ford was built from 1967 to 2007, he can even tell you if it was one of only so many in a particular color or
with certain options. And soon he'll also have all the Ford build data on vehicles produced through the 2010
model year.
Depending on how much data you need, Marti Reports are available in three levels of detail, priced from $17 to
$220.
Over the years, Mr. Marti's collections of Ford dealership equipment and original parts had grown to the point he
could create his own quasi dealership. Beyond the cars, parts and signs, there is a display of Philco appliances --
a nod to Ford's 1961-74 ownership of Philco -- including a refrigerator, eight-track audio system and televisions.
There are phonograph records that dealers gave to customers each year.
Appropriately, an IBM punch card machine, the cornerstone of the Marti Reports business, is also on display.
When Mr. Marti's mother made the inadvertent addition of a Cougar to the Camaros and Chevelles on their
used-car shopping list, he ended up with more than a Mercury. Now he has a dealership.
JUST LOOKING: Top, Kevin Marti in his dealership-style private museum. Counterclockwise from above, his
self-made Cougar convertible and a vintage Mustang; old cans of touch-up paint; a manly Mercury dealer sign;
Cougar's grille badge. (PHOTOGRAPHS BY LARRY EDSALL)
Document NYTF000020140615ea6f0003o

Free music for members of Prime Lower fuel economy ratings for Ford cars
A-Section
Free music for members of Prime Lower fuel economy ratings for Ford cars
1,070 words
13 June 2014
The Washington Post
WP
FINAL
A15
English
Copyright 2014, The Washington Post Co. All Rights Reserved
Amazon Prime members are getting a new perk: The company announced Thursday that it is launching its own
streaming music service as part of its premium membership package.
The service, called Prime Music, comes at no extra charge to members of Amazon's Prime service, who pay $99
a year for free two-day shipping and access to the company's video content.
The move gives Amazon a foot in the door of the growing online music world and may help it smooth any ruffled
feathers among its valuable Prime customers after it decided to hike the annual cost of Prime membership earlier
this year to $99 from $79.
Prime Music is ad-free and unlimited. Like Spotify, Prime Music will let users pick the specific tracks that they
want, rather than having them tune into a Pandora-like radio station featuring songs from a certain genre.
Amazon also is applying its recommendation expertise to the service by suggesting tracks you might like based
on the ones you choose yourself and by offering curated playlists with names like "Feel-Good Country" and "80s
Dance Floor Fillers."
Before you get too excited, however, there are a couple of caveats. The main one is that while Amazon's new
service does include songs from top artists such as Justin Timberlake, Bruno Mars, Blake Shelton and Madonna,
the online retail giant hasn't struck deals with all the major music labels.
So, the odds are that you'll quickly find that some song you want to listen to - like any original Beatles song - isn't
available on the free service. Missing, too, are the hits of the moment. BuzzFeed reported that Amazon won't get
access to songs until the tunes have been out for six months. That kind of delay echoes other content deals the
company has made, such as its agreement with HBO to include only items from the back catalogue in Prime.
Ford Motor Co. said Thursday that it is lowering the fuel economy ratings on six of its models, including a number
of hybrids, and will reimburse owners for the difference.
The No. 2 U.S. automaker said the ratings will be cut on its 2013 and 2014 model year hybrid and plug-in hybrid
vehicles as well as most 2014 Fiesta cars. It was the second time Ford has cut fuel ratings for the C-Max hybrid in
less than a year.
"We apologize to our customers and will provide goodwill payments to affected owners," Alan Mulally, Ford's chief
executive, said in a statement. "We also are taking steps to improve our processes and prevent issues like this
from happening again."
The restatement of mileage estimates is nothing new in the auto industry.
Last August, Ford - which has touted its superior fuel efficiency in the past - cut the ratings for the C-Max hybrid
by up to 7 mpg after complaints from consumers and experts that the model's actual mileage fell short of the
company's claims.
In 2012, an investigation by the Environmental Protection Agency showed that Hyundai Motor Co. and its affiliate
Kia Motors Corp. overstated fuel economy by at least a mile per gallon. The South Korean carmakers last
December agreed to pay $395 million to settle lawsuits related to the matter.

The largest change is for Ford's Lincoln MKZ hybrid, for which the combined city and highway fuel economy value
was reduced by 7 miles per gallon. Other affected models include four versions of the Fiesta, the hybrid and
Energi versions of the Fusion, and the C-Max hybrid and Energi.
l U.S. retail sales rose less than expected in May and first-time applications for jobless benefits increased last
week, but the data did little to alter perceptions that the economy is regaining steam. The Commerce Department
said Thursday that retail sales gained 0.3 percent. While that was below the 0.6 percent rise expected on Wall
Street, April sales were revised higher to show a 0.5 percent increase, helping to keep growth forecasts intact. In
a separate report, the Labor Department said initial claims for state unemployment benefits climbed 4,000 to a
seasonally adjusted 317,000 for the week ended June 7. Despite the rise, claims are not too far from their
pre-recession lows, and job growth continues at a steady clip.
l Lululemon Athletica Inc. slumped to the lowest level in three years after the yogawear retailer cut its full-year
earnings forecast. The shares plunged 16 percent to $37.25 at the close of trading Thursday, the lowest since
March 2011. The company has been seeking to address supply-chain issues and quality checks that slowed
deliveries, and also has been trying to regain shoppers' trust after it recalled its popular line of black Luon yoga
pants for being too sheer.
l A former BP senior engineer found guilty last year of destroying evidence related to the 2010 Gulf of Mexico oil
spill was granted a new trial based on his claim of juror misconduct during deliberations. Kurt Mix was convicted
by a federal jury in December of one of two counts of obstruction of justice. Prosecutors said Mix deleted from his
mobile phone text messages and voice mails related to BP's effort to estimate the size of what turned out to be
largest U.S. offshore oil spill. The Justice Department declined to comment on the ruling.
l Many federal workers and contractors who earn the minimum wage are getting a raise next year. Labor
Secretary Thomas E. Perez has issued a rule to raise the minimum wage from $7.25 an hour to $10.10. The
higher level applies to new federal construction and service contracts beginning Jan. 1. President Obama had
announced the raise earlier this year, but Perez moved to put it into effect.
l The Senate Judiciary Committee's antitrust panel will hold a hearing June 24 to examine the proposed purchase
by AT&T of DirectTV, the committee said Thursday. In a regulatory filing this week, AT&T said it needed
DirectTV's customer base to give it economy of scale.
l 8:30 a.m.: Producer price index.
l 9:55 a.m.: Consumer sentiment.
l Earnings: Liberty Energy, Studio One Media
WP20140613digest0613
Document WP00000020140613ea6d0003s

Ford cuts mpg ratings on some autos ; Automaker to pay compensation
MONEY
Ford cuts mpg ratings on some autos ; Automaker to pay compensation
James R Healey; Fred Meier; Chris Woodyard
James R. Healey, Fred Meier and Chris Woodyard, USA TODAY
451 words
13 June 2014
USA Today
USAT
FINAL
B.1
English
Ford on Thursday cut the fuel economy ratings on six of its vehicles most promoted for fuel efficiency, including
the Fiesta subcompact and hybrid and plug-in hybrid C-Max, Fusion and Lincoln MKZ models from the 2013 and
2014 model years.
Ford says it will compensate owners and lessees of the 200,000 vehicles affected for the difference between the
old and new mileage ratings -- 1 to 2 miles per gallon for most, but as much as 8 mpg for the highway mileage on
the MKZ.
The move is a hit to Ford's portrayal of itself as the most mileage-conscious of the Detroit makers. The C-Max
hybrid is on the new list, and it's the second time Ford has cut the mileage rating for that model. Ford pitches it as
a rival to the Toyota Prius V, but the Prius V now has better mileage ratings. C-Max hybrid lost 3 mpg in all driving
modes, so it's now rated 42 mpg in the city. 37 on the highway, 40 in combined city/highway use. Last August,
Ford cut the C-Max rating 4 miles per gallon.
The two cuts don't make the government suspicious, says Chris Grundler, director of the EPA's office of
transportation and air quality.
Last year, he says, it was because Ford used a mileage label from the Fusion hybrid, allowable under EPA rules
because the two share a drivetrain and are similar in size. The numbers were so far off that "we're rewriting those
regulations right now," Grundler says.
He said Ford found the latest errors by testing production-line vehicles to make sure the ratings matched the
laboratory testing. Grundler complimented Ford for doing that and says the EPA "is considering this type of
production-vehicle audit" for all automakers.
Ford said it won't ship any of these models from the factory until it has new window stickers for them. It said
dealers should have new stickers with corrected mileage for cars on hand in about a week. The EPA already has
changed its website to reflect the new ratings.
Ford's "make-good" compensation ranges from $125 to customers who lease 2014 Fiestas with the 1-liter engine
and manual transmission, to $1,050 to owners of 2013 and 2014 MKZ hybrids, which had the biggest cut.
"This is our error. When we see an issue, we address it," said Raj Nair, Ford Motor group vice president in charge
of global product development.
photo Ford
Document USAT000020140613ea6d00016

Ford Admits Overstating Fuel Ratings
Ford Admits Overstating Fuel Ratings

By Mike Ramsey
747 words
13 June 2014
J
B1
English
Ford Motor Co. admitted overstating the fuel-economy ratings on six 2013 and 2014 models, and agreed to pay
owners as much as $1,050 to compensate for underestimating their fuel costs.
It was the second time within a year that the Dearborn, Mich., auto maker has admitted to overstating the mileage
ratings on its vehicles. The company said each time overstatements resulted from errors conducting
government-prescribed tests.
Hyundai Motor Co. and Kia Motors Corp. admitted in 2012 they had overstated the fuel economy of more than a
third of the vehicles sold in the U.S. for the previous two years. The car makers also agreed to reimburse
customers, and blamed the overstatements on testing errors.
One of the Ford vehicles, the C-Max hybrid, already had its mileage rating lowered. The latest rating has fallen to
a combined, city/highway rating of 40 miles per gallon, down from 43 mpg. When the C-Max was launched, Ford
advertised it with a combined rating of 47 mpg.
The rating change lets the air out of Ford's efforts to promote its vehicles' fuel economy, particularly over Toyota
Motor Corp. When Ford launched its Fusion hybrid in late 2012, the company said it far outstripped the fuel
economy of the rival Camry hybrid, which has a combined mileage of 41 mpg. Now the Fusion hybrid's 42 mpg
rating is one notch higher.
The rating changes affects all of Ford's hybrids, including the C-Max plug-in hybrid and Fusion plug-in hybrid as
well as most 2014 model-year Fiesta subcompact cars.
Ford said it would compensate more than 200,000 customers who bought these vehicles with payments of
ranging between $125 and $1,050 depending on which vehicle and whether it was leased or purchased. The
company wouldn't provide an estimate of the total cost of the payouts.
The biggest restatement affected the 2013 and 2014 Lincoln MKZ hybrid sedan. Previously advertised at 45 mpg
in combined driving, the car will be sold with a mileage rating of 38 mpg city, 37 highway. People who bought the
car will get $1,050 back from Ford.
"Fuel economy is very important to customers and to us. This was our mistake, plain and simple. We've corrected
our error and we are taking steps" to prevent it from happening again, Raj Nair, Ford's global product
development chief, said during a conference call.
Ford discovered the latest mistakes and reported them to the Environmental Protection Agency, which regulates
fuel economy testing. The EPA said it oversaw Ford's re-testing of the vehicles, and conducted independent tests.
The agency and Ford said they have agreed to improved tests for future vehicles, under EPA supervision.
Mr. Nair said Ford didn't pay fines to the EPA for the mistakes.
"Consumers need to trust that fuel economy window stickers are giving consumers reliable and fair estimates of
real world fuel economy," said Chris Grundler, director of EPA's Office of Transportation and Air Quality.
Ford said the payments would come from the company's warranty reserve, but that the issue wasn't connected to
the company's $400 million increase in the reserve announced during first quarter earnings.

Ford wouldn't estimate the cost of the payments to customers, which was based on a calculation of the difference
between the advertised rate and the change.
AutoPacific Inc. analyst Dave Sullivan said the Ford move could influence other auto makers to be more
conservative with their fuel economy estimates. Hybrid vehicle buyers are more sensitive about fuel economy
than buyers of conventional cars, he said. "A couple hundred dollars or some sort of monetary value isn't going to
be able to buy someone's trust."
Ford said the error occurred in the calculation used to determine something called the "total road load
horsepower," a resistance measure on a machine called a dynamometer that is used to test vehicle performance
in a static, lab setting.
Mr. Nair said the correlation of wind-tunnel data to the computer model was incorrect, creating too little
resistance. That led to a big disparity in results, particularly for the heavier hybrid vehicles, such as the Lincoln
MKZ hybrid.
Ford said it confirmed the problem in its testing in March, notified the EPA, and proceeded to retest its entire
lineup of vehicles using a modified formula.
Document J000000020140613ea6d0003q

MKC in brand booster club ; Lincoln hopes to shine among small luxury crossovers
MONEY
MKC in brand booster club ; Lincoln hopes to shine among small luxury crossovers
Chris Woodyard
Chris Woodyard, @chriswoodyard, USA TODAY
738 words
12 June 2014
USA Today
USAT
FINAL
B.5
English
-- Looks like a Lincoln. Is quiet like a Lincoln. Powerful like a Lincoln.
So is it a Lincoln?
Yes, but it remains hard to put out of your mind that the new Lincoln MKC shares its basic structure with the still
competent, but cheaper, Ford Escape.
The MKC is an all-new model and a key part of Ford's effort to revive the Lincoln premium brand. It's Lincoln's
entry for the hot - - and profitable -- small, luxury crossover segment. As such, it will compete worldwide against
the likes of Audi Q5, BMW X3, Mercedes-Benz GLK, Land Rover Evoque and the Acura RLX, the segment leader
in the U.S.
Lincoln will have one advantage right out of the box in the U.S., the lowest base price of the group at $33,995,
including $895 shipping for a a front-wheel-drive model. But from there, Lincoln plans to get a share of the
segment based on an all-new turbocharged engine, abundant use of leather and open-grain woods in the interior,
and design touches such as a high-end, hard-to-create rear hatch. It even has a nifty new touch to parallel
parking.
Lincoln designers say they went to lengths to try to make sure that potential buyers would not look at the MKC
and see it as just a gussied-up Ford Escape.
"That was high on our minds," says Sandeep Khatiwala, MKC's program manager. "It's a totally different car," he
says, even though it's built in the same plant on the same platform, though modified so that MKC is an inch wider
than Escape.
The 2015 MKC -- the second of four vehicles, after the new-for- 2013 MKZ sedan, that Lincoln hopes will rebuild
the brand -- will play a pivotal role when it comes to showrooms this month. It also will be a key model for
Lincoln's entry this fall into China, where luxury crossovers are hot.
The MKC is being counted on to bring younger and first-time luxury buyers to the brand, but also to appeal to
current luxury SUV owners who might be downsizing. It's aimed at bolstering the brand image of approachable
luxury that Lincoln is trying to project.
"We're not a snobby brand," says Andrew Frick, Lincoln Group's marketing manager. Sure, the Lincoln of yore
had been attracting more older customers than younger, but with the new Lincoln, Frick says, "It's not about age,
it's about attitude."
The new MKC's attitude might best be described as the silent, muscle-bound type. It's the first to get the
new-design 2.3-liter EcoBoost four-cylinder engine with a newfangled "dual scroll" turbocharger, meaning it puts
out more boost with less lag than single turbine blades.
The new engine, only available with all-wheel drive, puts out 285 horsepower -- more power for its size than any
other in the Ford kingdom -- and is rated 18 miles per gallon in city driving, 26 mpg on the highway for 21
combined.

The MKC also is available with a 240-horsepower, 2-liter turbo four that gets 19 mpg city, 26 highway with
all-wheel drive and 20/ 29 with front-wheel drive. Both engines are paired with a six- speed automatic controlled
with push buttons on the dashboard, not a lever on the console.
Even with the MKC in sport mode on a 224-mile jaunt inland from Santa Barbara, the engine and most other
sounds stayed muted. Although relatively compact, the MKC exudes a feeling of being locked in a bank vault. It
cornered confidently, without the body roll that can go with a high-profile crossover.
MKC puts a new twist on the systems that let a car parallel park itself. As part of the $2,235 "technology
package," the MKC can automatically get itself out of a parking space, not into one.
To make sure MKC is distinct from its mainstream Ford cousin, designers say they took care to design new
sculpted body panels and cover the inside with upscale design and materials. Some of those features impressed
critics. "The overall level of fit and finish is really first class," says Joe Phillippi of AutoTrends Consulting.
photo USA TODAY

Document USAT000020140612ea6c00003

Detroit's Appetite for Aluminum Grows
Detroit's Appetite for Aluminum Grows

By Mike Ramsey and John W. Miller
949 words
12 June 2014
J
B1
English
Auto makers plan a broad shift to aluminum from steel in larger vehicles over the next decade in North America,
and 18% of all vehicles will have all-aluminum bodies by 2025, compared with less than 1% now, according to an
industry study released this week.
The report by consultants Ducker Worldwide indicates that Ford Motor Co.'s decision to employ an aluminum
body for its coming 2015 F-150 pickup truck is proving a trigger for an extensive move by auto makers and their
suppliers toward lightweight materials for pickup trucks and sport-utility vehicles to help them meet coming fuel
economy standards, rather than push consumers into buying mostly small cars.
Ducker's survey of industry executives was conducted on behalf of the Aluminum Transportation Group, a trade
association, according to the seventh edition of the study, which has been published every two to three years
since the 1990s.
In a separate analysis, Bank of America Merrill Lynch analyst John Murphy said on Monday that Ford's aluminum
F-150 will determine whether consumers are willing to pay a premium for a larger-but-lighter vehicle. The 2015
F-150 could be efficient enough to meet future U.S. fuel economy standards without requiring Ford to offset its
performance by selling more small cars, he said.
If Detroit auto makers can succeed at slashing weight from their large SUVs and pickups, Mr. Murphy said, "you
could see an environment where [their sales] perform really well." Heavy-duty pickups and SUVs are big
moneymakers for Detroit auto makers and efforts to make them more fuel efficient would keep the profits flowing.
Aluminum producers already are expanding production capacity to meet projected automotive demand. Alcoa
Inc., Novelis, a unit of India's Hindalco Industries Ltd., and Constellium NV and UACJ Corp., have disclosed
several large projects in the U.S. and more are in the pipeline, said Tom Boney, vice president of Novelis
automotive business.
Pittsburgh-based Alcoa has invested around $600 million at plants in Iowa and Tennessee to meet projected
demand by auto makers. Alcoa and Novelis are the U.S.'s two biggest sheet aluminum producers.
Alcoa shares recently reached their highest levels in three years. Western aluminum producers have been
battered after they built capacity in anticipation of demand from China that never came. Instead, China developed
its own aluminum industry, leaving Alcoa and others to scramble to take smelters out of production. Once all
curtailments are finished, Alcoa will have reduced operating smelting capacity by 1.2 million tons, or 28%, since
2007.
"We're engaged with car makers talking about 2017, 2018 [and] 2019 demand," said Randall Scheps, Alcoa's
automotive marketing director. He forecast "a steady stream of announcements" like the aluminum-bodied F-150
"over the next 10 years."
Today, aluminum is mostly found in engine parts, auto hoods and trunk lids, but that soon will change. By 2025,
aluminum will comprise more than 75% of pickup truck body parts, doors, hoods and lift gates, 24% of large
sedans, 22% of SUVs and 18% of minivan body and closure parts, according to the study.
In North America, Ford, General Motors Co. and Fiat Chrysler Automobiles NV, are expected to be the largest
users of aluminum sheet, which is the material used to make auto bodies.

"This is part of our overall light-weighting strategy and we are already using aluminum in a wide array of
applications," said GM spokesman Klaus-Peter Martin, without commenting specifically on the report. "We are
already a massive user of aluminum."
A new Constellium-UACJ aluminum line is being built in Bowling Green, Ky., where GM makes its Corvette, which
has an aluminum frame.
GM is developing an aluminum-bodied pickup due out late this decade, according to people familiar with the
matter, and the study estimates Chrysler will have one early next decade.
In the interim, Fiat Chrysler will use more aluminum on doors, interior structural parts, hoods and other parts, said
Dick Schultz, the primary author of the Ducker report.
Mr. Schultz said the firm is conservative with its estimates "We won't inflate numbers; we are always a little bit
low." His firm does similar studies for the steel industry that looks at content in vehicles.
Meanwhile, the steel industry is readying for battle, and auto makers aren't putting all their eggs in the aluminum
basket.
Ford last week showed off a Fusion sedan concept car that reduced gross weight over an existing model by 23%
using an array of carbon-fiber parts, aluminum and lightweight steel.
Aluminum's advances in cars "is a challenge that was laid down at the beginning of the year," said Ron Krupitzer,
vice president of the Steel Market Development Institute, which coordinates lobbying and research on automotive
metal for steelmakers.
"The steel industry is still the single biggest supplier to the automotive industry," he says. "And we've never been
busier, we are going to give these car companies real choices between aluminum and steel and magnesium and
other materials."
He said aluminum often has hidden costs compared with existing steel parts. For example, "aluminum pillars are
light but they're also fatter than steel pillars, and that can obstruct vision," he said. "It's not always about weight."
Ford also has said it would require extensive overhauls to its factories and to dealer auto-body shops to handle
the change to aluminum bodies in the F-150. That shift is expected to cut 90,000 pickup trucks from its normal
factory output this year.
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Car Makers Jockey for Pole Position in China
Heard on the Street

Car Makers Jockey for Pole Position in China
By Abheek Bhattacharya
417 words
12 June 2014
J
C10
English
When China's car market was speeding up, it dragged everyone along for the ride. Now car makers must fight
each other to get ahead.
China sold 11% more passenger cars in the first five months of 2014 than the year before, a comedown from the
nearly 15% growth over the same period in 2013. Some of the deceleration is because last year was set against a
weak 2012. It also is possible China's broader economic problems are weighing on consumption.
The clearest losers are domestic car makers. They sold 38% of all locally made cars this year through May, down
from nearly 42% in the same period last year, according to an industry association. Hong Kong-listed Geely sold
32% fewer cars these five months, as consumers shun its poor technology and marketing.
Not all foreign car makers gain at locals' expense, though. After nationalist protests in late 2012 saw crowds
literally beat up Japanese cars, Toyota, Honda and Nissan clawed back some market share partly by launching
new models, says Macquarie's Janet Lewis. But Toyota's market share at 4.9% so far this year is still below
2011's 5.5%, according to data compiled by Ms. Lewis.
There is ample animosity to overcome. In a Sanford C. Bernstein-led survey of 40,000 Chinese consumers this
year, half said they would never consider a Japanese car.
Other laggards are General Motors' main passenger-car brands. The 8.2% market share Buick and Chevrolet
command fell from 8.6% last year.
In contrast, Ford, a relative newcomer, has made inroads with SUVs and sedans. Ford sold 4.1% of the cars
made in the country between January and May, compared with 3.8% last year and just 2.2% in 2011.
Volkswagen remains on top. One of the market's earliest entrants, VW has consolidated its grip with a 14.4%
market share, up from 13.4% last year, by offering everything from low-end sedans to sporty SUVs. VW's brand
and pricing are so compelling dealers barely offer discounts, according to Ms. Lewis.
Should China's car market slow further, how each brand positions itself will matter more. China's first generation
of car buyers is moving on to second cars. Brand loyalty is developing. Success won't be just about showing up.
Document J000000020140612ea6c0001i


810 words
11 June 2014
J
B4
English
FORD
Car Maker, Heinz Team Up
On Tomato-Based Car Parts
The tomato may be moving from the vine to the vehicle as Ford Motor Co. explores the use of more sustainable
materials in its cars.
Ford and H.J. Heinz Co. are researching the use of tomato fibers to develop a sustainable composite material in
car manufacturing. Dried tomato skins could become wiring brackets or the storage bin for coins and other small
items in a vehicle, the companies said on Tuesday. Ford researchers are testing the material's durability.
The Dearborn, Mich.-based auto maker already has eight materials in production in its "bio-based" portfolio,
including coconut-based composite materials and soy-foam seat cushions. The auto maker has been working
with Heinz, Coca-Cola Co., Nike Inc. and Procter & Gamble Co. to create a 100% plant-based plastic for
packaging and other purposes, as opposed to the petroleum-based packaging currently used, they said.
Heinz, meanwhile, had been seeking ways to recycle peels, stems and seeds from the more than two million tons
of tomatoes used each year to produce its namesake ketchup.
-- Erin McCarthy
---
ABERCROMBIE & FITCH
New President of Kids,
Namesake Brands Hired
Abercrombie & Fitch Co. said Christos Angelides has been named president of the teen apparel retailer's
namesake and kids brands, a role that is seen as a potential steppingstone to the chief executive post.
Mr. Angelides, 51 years old, is slated to take up his new role in October, Abercrombie said, noting that he will
have overall responsibility for all product and customer-facing activities for the Abercrombie & Fitch and
abercrombie kids brands.
He joins the teen retailer from Next PLC, a U.K.-based fashion retail and Internet chain, where he most recently
was group product director, a role he held since 2000, the company said.
Abercrombie -- which sells teen-focused apparel under its namesake, Hollister, Gilly Hicks and abercrombie kids
brands -- has been hunting for two new brand presidents, both of whom would be candidates to one day succeed
longtime CEO Mike Jeffries.
-- Anna Prior
---
TARGET
Ex-GM Executive Named
Information-Security Chief
Target Corp. said it has hired General Motors Co.'s information-security chief, Brad Maiorino, to fill a similar role
at the retailer, following last year's data breach.
Mr. Maiorino will be Target's chief information security officer and will be responsible for helping to ensure that the
company, its customers and employees are protected from internal and external information security threats,
Target said.
Prior to his stint at GM, Mr. Maiorino was the chief information security officer at General Electric Co.
The appointment marks the latest executive shake-up at the retailer, which saw the departure of Chief Executive
Gregg Steinhafel and Chief Information Officer Beth Jacobs in the wake of the data breach.
-- Anna Prior
---
ACHILLION
FDA Lifts Clinical Hold
On Firm's Hepatitis C Drug
Achillion Pharmaceuticals Inc. said Tuesday that the U.S. Food and Drug Administration has removed the clinical
hold on its experimental hepatitis C treatment, news seen adding to the company's attractiveness as a possible
takeover candidate.
Shares of Achillion surged 83%, or $3.54, to $7.79 on Tuesday, its highest point since July. The stock has more
than doubled from its Friday close of $2.88.
Last summer, the FDA put the treatment, sovaprevir, on clinical hold after the company's early-stage study of
drug interactions in healthy patients resulted in elevated liver enzymes tied to higher-than-expected exposures to
sovaprevir and another drug, atazanavir.
The FDA has now removed the clinical hold on hepatitis C patients, allowing the company to conduct trials on
those volunteers, while keeping a partial hold on healthy patients, Achillion said Tuesday.
-- Anna Prior
---
CATERPILLAR
Equipment Company Settles
2008 Engine-Fire Suit
Caterpillar Inc. has agreed to pay $46 million to settle litigation over a marine engine that caught fire at a Mobile,
Ala., shipyard in 2008, the law firm Cunningham Bounds LLC said Tuesday.
A spokeswoman for Caterpillar, a Peoria, Ill.-based maker of construction equipment and engines, confirmed that
the litigation had been settled but declined to comment on it.
The settlement covers lawsuits filed in Mobile County Circuit Court by Bender Shipbuilding & Repair Co., a
now-defunct Mobile company that was building the ship when it caught fire, and by Seacor Marine LLC, of
Houma, La., which had ordered the vessel, to be used for such tasks as towing oil rigs.
Bender declared bankruptcy and was liquidated in 2010. Skip Finkbohner, a partner at Cunningham Bounds,
which represented Bender and Seacor in the case, said Bender's share of the settlement would go to creditors of
that firm. Seacor officials couldn't be reached for comment.
-- James R. Hagerty
Document J000000020140611ea6b0003m

Automakers Pledge $26 Million to Save Detroit Art
National Desk; SECTA

Automakers Pledge $26 Million to Save Detroit Art
By STEVEN YACCINO
664 words
10 June 2014
The New York Times
NYTF
15
English
CHICAGO -- The Detroit Institute of Arts announced Monday that the nation's three major automakers would
donate a combined $26 million to help save the city's art collection, bringing the city a step closer to completing a
deal aimed at coming out of bankruptcy by fall.
The Ford Motor Company and General Motors each committed to giving $10 million to help the institute raise
$100 million as part of a so-called grand bargain that would also ease pension cuts for city retirees. Chrysler, the
smallest of the three American automakers, will contribute $6 million.
''The D.I.A. and the city of Detroit need our help,'' Joseph R. Hinrichs, executive vice president of Ford, said at a
news conference at the museum. ''And we are here, as we've always been, to do our part.''
General Motors and Chrysler emerged from their bankruptcy reorganizations in 2009, avoiding collapse with the
help of billions of dollars in assistance from the federal government. With Monday's announcement, the three
automakers add to a growing list of philanthropic gifts trying to make the nation's largest municipal bankruptcy
less painful for the hometown of America's auto industry.
Detroit's world-class art collection has been a subject of constant contention during reorganization proceedings.
Creditors have suggested selling the city's collection, which includes pieces by van Gogh, Bruegel and Matisse,
calling it an untapped source of cash for a city with an estimated $18 billion in long-term liabilities and shrinking
revenues. But the notion has outraged others, who say a sale would rob the struggling city of one of its most
valuable assets. Museum officials have also argued that selling masterpieces could lead to the museum's closing
because donors would feel betrayed and stop giving.
Last year, Kevyn D. Orr, the state-appointed emergency manager in Detroit, hired Christie's to appraise a portion
of the museum's masterpieces. The auction house said selling those works would net up to $867 million, a
number that has since been criticized by some of the city's creditors as being below market value.
As part of a larger deal forged amid federal bankruptcy court mediation sessions, the Detroit Institute of Arts
agreed earlier this year to raise $100 million to help rescue itself over the next 20 years. The money would join
more than $370 million in private philanthropic donations and nearly $200 million in state funds, which were
approved last week by the Michigan Legislature.
The arrangement would funnel those financial contributions toward lessening pension cuts for Detroit retirees. It
would also put ownership of the art museum under a private nonprofit organization that currently operates the
museum, a common governing structure for large public art institutions across the country, shielding the city's
66,000-piece art collection from future municipal threats.
Still, potential roadblocks remain. Creditors have objected to the deal, saying that it favors retirees over banks
and that they could get more by selling the art outright. And the city's 20,000 retirees must first voice support for
Detroit's bankruptcy plan, which will require them to vote for cuts to some of their benefits. In the end, a federal
bankruptcy judge must sign off on the deal after a trial scheduled for this summer.
On Monday, the judge, Steven W. Rhodes, pushed back the start of the trial until Aug. 14, a delay that puts more
pressure on the city to get a plan approved before the emergency manager leaves office in September.

''Let's build on this,'' Gov. Rick Snyder of Michigan said Monday. Standing in front of a mural depicting a scene
from inside an automotive manufacturing plant, he added, ''We're accelerating.''
''The Thinker'' by Auguste Rodin at the Detroit Institute of Arts. The sculpture is part of the city's 66,000-piece
collection. (PHOTOGRAPH BY REBECCA COOK/REUTERS)
Document NYTF000020140610ea6a0004i

U.S. News: Car Makers Join Effort To Keep Intact Detroit's Art
U.S. News: Car Makers Join Effort To Keep Intact Detroit's Art
By Matthew Dolan
369 words
10 June 2014
J
A5
English
Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved.
DETROIT -- Top U.S. auto makers pledged $26 million to help protect Detroit's art collection from being broken
up or sold during the nation's largest municipal bankruptcy case.
The pledges of $10 million from Ford Motor Company Fund, $10 million from General Motors and its foundation,
and $6 million from Chrysler Group LLC are part of an effort to raise more than $800 million from private donors,
foundations and the state of Michigan to insulate the city-owned Detroit Institute of Arts from sale by transferring
the collection into a trust designed to keep the work on public display in Detroit. The city would use the proceeds
from the transfer to help plug a $3.5 billion shortfall in funding for Detroit's two municipal pension funds.
The DIA itself must raise $100 million as part of the bankruptcy's so-called grand bargain negotiated by
court-appointed mediators. With the auto makers' pledges, the DIA is 70% of the way toward the goal, Eugene A.
Gargaro Jr., DIA board chairman, said.
But the issue is far from settled. Pension holders must vote in favor of the plan for the funding to come through
from foundations and others, including nearly $200 million approved by the state Legislature.
Other creditors, including municipal-bond insurers, still oppose the deal in court, arguing the 66,000-piece
collection is worth much more than the city's estimate of up to $867 million for its most valuable pieces. A trial is
set on the city's bankruptcy to begin in mid-August.
Municipalities have broad power in a Chapter 9 bankruptcy to hold on to their assets. But some creditors say
presiding bankruptcy Judge Steven Rhodes must also act in the best interest of creditors and shouldn't favor
pension holders unfairly.
Political leaders including Republican Gov. Rick Snyder and his appointee, Detroit Emergency Manager Kevyn
Orr, used Monday's donation announcement to plead with Detroit's 32,000 pension holders to support the plan or
risk losing outside funding and incurring deeper cuts to their benefits.
Document J000000020140610ea6a0000t

Corporate News: Auto Sales Surge in the U.S. --- Recalls Don't Sting for GM as May Industry Sales Reached 1.6 Million Vehicles
Corporate News: Auto Sales Surge in the U.S. --- Recalls Don't Sting for GM as May Industry Sales
Reached 1.6 Million Vehicles
By Michael Calia and Mike Ramsey
671 words
4 June 2014
J
B3
English
U.S. auto sales rose 11% in May, confirming that the cold winter had more to do with damping demand earlier this
year than a dip in consumer confidence.
Industry sales reached 1.6 million vehicles last month and the seasonally adjusted annualized selling rate hit
16.77 million cars and light trucks, according to market researcher Autodata Corp.
Sales in January and February were below expectations and auto makers blamed the tepid results on the severe
weather in the U.S. North and East, an explanation also used to explain the economy's slow growth in the first
quarter. However, car sales picked up in late March and April, and with strong May sales it is clear that
consumers are still in a new-car mood.
Among the German luxury brands, BMW AG was the largest seller, with a 17% gain over a year earlier, followed
by Daimler AG's Mercedes-Benz brand, which posted a nearly 9% gain. Volkswagen AG's Audi unit was third and
its sales increased 26%. Sales fell 15% at VW's namesake brand for the month.
General Motors Co., the largest U.S. auto seller, said its sales jumped 13% to 284,694 on the strength of the
Chevrolet brand easily topping expectations despite a steady flow of recalls over safety concerns.
Analysts said consumers haven't linked the largely discontinued brands and models affected by the recalls to the
Detroit auto maker's new vehicles.
Toyota Motor Corp. and Chrysler Group LLC posted 17% unit sales gains, Nissan Motor Co.'s increased 19% and
Honda Motor Co.'s rose 9%, all compared with a year earlier.
Ford Motor Co.'s sales were up 3%. The nation's No. 2 auto maker said it is striving to maintain inventory on its
F-150 pickup trucks and reduce the use of sales incentives. Its pickup sales slipped about 4% from a year earlier.
Ford also said it expects to lose market share in 2014 due to extended shutdowns at truck plants while it installs
new equipment to make the next generation F-150.
Due to the shutdowns -- a total of 10 weeks for its Dearborn, Mich., truck plant and three weeks for its Kansas
City plant -- Ford will build about 90,000 fewer trucks than the plants' usual output.
"We aren't going to be overly aggressive in the market," said John Felice, vice president of sales for Ford North
America. "The most important thing is to not get too anxious and try to sell more trucks" by using higher
incentives.
Ford said it had its best May sales since 2004, but it lost market share. It sold 253,346 vehicles in May, led by
growth in sales of its sport-utility vehicles. Car sales rose 1.7%, while truck and SUV sales fell less than 1%.
Trucks were big sellers for GM and Chrysler. Chrysler's Jeep and Ram pickup trucks have accounted for the
majority of the auto maker's gains lately. Sales of Jeeps rose 58%, fueled by its Compass, Cherokee and
Wrangler models, while its Ram pickup sales rose 19%.
Sales of GM's two pickup brands rose 9.5% combined over a year ago. The company's double-digit gain overall
was a surprise, especially under the cloud of recalls.

"The momentum we generated in April carried into May, with all four brands performing well in a growing
economy and 17 vehicle lines posting double-digit retail sales increases or better," said Kurt McNeil, a GM U.S.
sales vice president.
Hyundai Motor Co. reported May sales of 70,907, up 3.7% while affiliate Kia Motors Corp. said its sales jumped
15%, both over the same period last year.
May had 27 selling days, one more than last year's period.
Document J000000020140604ea6400035

Unleashing Innovation: Manufacturing (A Special Report) --- One Thing Isn't New In Car Design: Auto makers still create full-size clay...
Unleashing Innovation: Manufacturing (A Special Report) --- One Thing Isn't New In Car Design: Auto
makers still create full-size clay models of new cars, sculpted by hand
By Joseph B. White
1,091 words
2 June 2014
J
R4
English
New cars have enough digital horsepower to connect to the Internet while going 70 miles an hour, compute speed
and direction multiple times a second and drive themselves for long stretches if the law allowed.
When it comes to designing these high-tech machines, however, auto makers still depend on clay models
sculpted by hand -- a craft that goes back to the industry's early days.
Designs for a new car may start with a simple sketch on a cocktail napkin. At Ford Motor Co., such a sketch could
get turned over to digital modeler Kevin Goff, who fits the lines of the drawing over a digital rendering of the car's
engine, suspension and other chassis parts. The idea then might go to clay modeler Larry Pelowski to be
transformed into a series of clay models, usually starting with sculptures four-tenths the size of an actual car.
"I've saved a lot of articles [saying] holograms are coming in, they're going to take over" for the clay models, says
Mr. Pelowski, a 25-year Ford veteran whose father also worked for the company. It hasn't happened.
Indeed, despite Ford's use of three-dimensional imaging technology that allows executives to don headsets and
see a virtual vehicle in a computer-generated cityscape, the top brass won't sign off on producing a new car -- a
decision that can involve spending a billion dollars or more -- until they see full-size physical models.
The same is true at other major auto makers, even as advances in industrial-design software have allowed them
to cut back on some physical prototypes.
The pressure to produce new designs more rapidly intensified when competition in the auto industry went global.
During the 1990s and into the 2000s, big auto makers boasted about how quickly they could bring new vehicles to
showrooms as they slashed product-development times from five years or more to two years or less by relying
more heavily on computer-design tools.
They figured they could squeeze the time from concept to showroom even further if they did more designing
online and less via physical prototypes.
The rapid decline in the cost of computing power and continual improvement in design software have moved the
auto industry closer to a world where the mathematic models of a car's exterior and interior surfaces -- rendered
as a thick web of points and polygons -- could go directly to computer-driven machines that cut dies and molds for
production.
"We have a European manufacturer we've worked with -- they were able to eliminate about 70% of the clay
models they were using," says Ed Martin, a business-development manager at Autodesk Inc., which sells Alias, a
design software widely used by auto makers.
"It's when they start getting into final choices," Mr. Martin says, "that they get into physical clay."
Indeed, Chris Svensson, the director of design for Ford's North and South American operations who helped push
the use of holograph-projection technology within Ford, says he still struggles to evaluate whether a
computer-generated design will work until he sees it in a physical model.
"We always came back to clay," says Mr. Svensson. The problem is, he says, digital projections can't accurately
show how light will play on a car's surface. "You can't replicate the sun."

So instead of trying to eliminate clay models, automotive designers are now increasingly mixing the two mediums,
training clay modelers in the use of digital tools and vice versa.
At Chrysler LLC, designer Mark Hall works closely with sculptors like John Morris, who says he was hired in part
because of his skill at creating convincing mock headlights from plexiglass and repurposed Christmas lights.
An auto like the recently launched Dodge Challenger SRT Hellcat muscle car will start life as a paper sketch that
Mr. Morris will use to create a clay model three-eighths the size of an actual car.
Mr. Hall, who began his career as a clay sculptor, and Mr. Morris will work together refining the lines of the scale
model. It's highly detailed work -- a change of just a few millimeters in the elevation of a crease in the door or in
the width of a taillight can make the difference between cool and cold. Mr. Morris makes the adjustments by hand
using scrapers and other tools.
"That's the point the computer can't replace," Mr. Morris says.
Once they agree they have a model about 60% right, they can use an optical scanner to translate the clay scale
model into a package of digital data that can power a computer-controlled milling machine. The milling machine
can produce a full-size clay replica in a day or so, which they further refine by hand.
That's a big improvement from years ago, when designers would have to use cardboard templates and hand-held
dividers to transfer the lines of a scale model to a life-size clay prototype.
The clay-to-digital, digital-to-clay approach is now common, designers say. Designs go back and forth between
clay and digital renderings, and are integrated with digital representations of the car's chassis and other
mechanical components, or "hard points," developed by engineers. The connection with engineers working on the
hard points is critical to avoid spending hours refining the line of a fender only to discover that it's occupying the
same space required for the car's front suspension.
At Toyota's California design center, known as Calty, designers mixed clay modeling and all-digital processes to
construct a prototype sports car called the FT-1 unveiled at the Detroit Auto Show in January.
"The exterior was developed in clay," says Kevin Hunter, president of Calty Design Research. But the car's
interior was designed using digital technology "all the way through. We confirmed the shape using quick foam
studies."
Still, Mr. Hunter says he doubts Toyota would offer a car to the public before reviewing a full-size model.
When a digital rendering is produced in a full-size, three-dimensional form, he says, "there's always a surprise."
---
Mr. White is the global auto editor for The Wall Street Journal in Detroit. Email him at joseph.white@wsj.com.
Document J000000020140602ea6200009

OFF DUTY --- Gear & Gadgets -- Rumble Seat: Ford Fiesta: One Liter Isn't Just for Soda Anymore
OFF DUTY --- Gear & Gadgets -- Rumble Seat: Ford Fiesta: One Liter Isn't Just for Soda Anymore
By Dan Neil
1,419 words
31 May 2014
J
D12
English
People have accused me of being interested only in fast and expensive cars. Others think I'm Canadian.
While it's true I do enjoy the occasional go at the kraken -- Porsche 918, the McLaren P1, LaFerrari in two weeks,
at last! -- I admire nothing quite so much as the achievement of a great cheap car. Why? Because, just to get to
one single example, somebody has to build, like, a million.
As marvelous an item as is, say, a Pagani Huayra -- a $2 million, 225-mph hypercar that when driven in anger
sounds like God is yelling at you -- the process by which it is consummated is trivial compared with building
something like our test car, the Ford Fiesta (as tested, $18,585).
At Pagani, if Horacio needs a new part he walks across the studio in Modena, Italy, and has one of his
carbon-composite elves make it. At Ford, any perturbation in the Fiesta process (B-class, front-transaxle platform)
sends tremors through a vast, interdependent global web of manufacturing, an awe-inspiring construct of logistics
that -- important to note -- plays out across contested geopolitical terrain.
The numbers are staggering. The Fiesta is the best-selling car in Europe, as well as the best-selling subcompact
globally and No. 7 light vehicle overall, with production in 2013 reaching 735,299. It is built in nine countries in
seven times zone, in four body styles, with seven engine options and three transmissions, and sold in more than
151 countries, all against a backdrop of regulatory sprawl; edgy, autocratic governments; and vastly different
expectations of labor and management.
In other words, the process that brings the dinky red econobox to my house is a miracle of human ingenuity. So,
respect.
Here's another remarkable fact about our scarlet nubbin: one liter, as in, one tiny, spectacularly optimized liter of
displacement across a three-cylinder turbocharged engine, what Ford calls its EcoBoost technology. A $995
option on the Fiesta SFE model, the 1.0-liter EcoBoost helps the 2014 Fiesta claim the title of most fuel-efficient
nonhybrid sold in North America, with an EPA-estimated highway mileage of 45 mpg.
Now, first blush, given these factors -- a schlubby global B-segment widget and a 1.0-liter, three-cylinder engine --
you would be wise to keep expectations of driving rapture in check. Siesta is more like it.
But this engine is Godzilla in a shoebox: A turbocharged, direct-injection 3-cylinder in-line engine producing 123
hp at a nice, snarly 6,000 rpm; and a gratifying slug of turbo-induced torque, 125 lb-ft, from a mere 1,400 rpm to
4,500 rpm. The engine also has a turbo over-boost function that allows it to pump out a maximum 148 lb-ft for as
long as 15 seconds, which is a long time at full throttle. The engine's very compactness -- the tiny, low-inertia
turbocharger is but a few centimeters from the exhaust valves, thanks to the integrated manifold -- gives it a crisp,
responsive throttle, a free-spooling nature that grabs the 2,578-pound car by the scruff. Zero-to-60 mph
acceleration takes just over eight seconds but, more relevant to the Fiesta's urban mission, the initial first-gear
rush to 30 mph is torque-y and emphatic.
Ford even had the wisdom to pair the engine with an increasingly rare five-speed manual transmission, with a
clutch pedal and everything (a dual-clutch six-speed automatic is slated for the North American market, date
uncertain). The stick stirs the three-holer in all sorts of appealing ways. Good lord, the thing even sounds good, a
refined burr at low rpm that transitions to an adorable, honey badger growl at high rpm.

The arithmetic is straightforward: Ford's three-banger generates 123 hp per liter of displacement. That specific
output ranks with some of the world's most exotic whirligigs, like the 4.5-liter V8-powered Ferrari 458 Italia and
4-liter Porsche 911 (both around 125 hp/liter).
Those are naturally aspirated engines, true, but even among turbocharged engines, Ford's 1-liter is almost
hilariously potent for its size and -- this is the more nuanced point -- its scale of manufacturing. Yes, a Nissan
GT-R's twin-turbo V6 makes 139.5 hp/liter, but every one of those few thousand engines a year is hand-built by
white-gloved, venerated Nismo technicians. Ford's engine line in Cologne, Germany, is cranking out 1.0-liter
EcoBoosts like doughnuts, by the hundreds of thousands annually. Meanwhile, the tolerances are insane: This
engine has a mere 6.1 mm between the cylinder bores, and a turbo that spools to almost a quarter-million rpm.
The 1L engine isn't brand new. About 30% of Ford Focuses now sold in Europe are spec'ed with the 1.0-liter gas
engine. This is the fourth engine in the EcoBoost family, and it features some of Ford's most ingenuous
internal-combustion fettling. For one thing, it's a three-cylinder that manages to get away without a
counter-rotating balance shaft. To null out the engine shake inherent with three reciprocating pistons, the engine
uses an offset crank, as well as counterweighting on the flywheel and timing-belt pulley, abetted by more elastic
engine mounts (all equaling less weight, complication, size and frictional losses).
The 1L is a veritable temple of low friction. For example, the two-channel cooling system diverts coolant from the
iron block during cold start up to reach operating temperatures more quickly (less friction, better efficiency, lower
emissions). The camshaft drive belt spools in its own little oil sump; the oil pump is variable pressure.
It all adds up to less: the 1.0-liter produces more horsepower and torque than Ford's own 1.6-liter four cylinder
(123 vs. 120), with about a third less displacement, 25% fewer parts and 20% better fuel economy. Ford says this
1.0-liter is the most power-dense engine it has ever made. Super-small, in other words. The cast-iron block can fit
on an 8 1/2-x-11 piece of paper.
The Fiesta debuts the 1L engine in the North American market. Here, again, you get a sense of the tidal forces at
work behind such a car. Around the world, in various markets and varying degrees of penalty, engine
displacement is being taxed. In Germany, for example, motorists pay a vehicle tax based on engine size, 2 euros
per 100 cubic centimeters on a gasoline engine.
It's a long and interesting story, but the upshot is this: one liter of displacement is the new black. GM and Opel
have recently introduced its own turbocharged 1-liter three-cylinder engine, as have Citroen, Renault and VW.
One liter. It's not just for soda anymore.
In other ways, the Fiesta is much the same as the car I reviewed two years ago: bandy, fun, surprisingly useful
and comfortable. The upper and lower front grille openings have gotten a lip-liner of polished metal --
underscoring Ford's plagiarism of Aston Martin -- and the amenities have been enlarged with features friendly to
Millennials, such as AppLink, which allows voice operation of your phone's mobile apps, such as Pandora.
See, this is why a great cheap car always wins over a million-dollar exotic. The exotic can never exceed your
expectations, your sense of entitlement. You've written the big check and it had damn well better perform. With a
cheap, utilitarian car, you can't expect much, and when one over delivers like the 1.0-liter Fiesta, it feels like a gift.
Ford Fiesta: One in a million.
---
2014 FORD FIESTA SFE 1.0-LITER ECOBOOST
Base price: $17,840
Price, as tested: $18,585
Powertrain: Turbocharged direct injection, 12-valve, 1.0-liter in-line three-cylinder with variable valve timing;
five-speed manual transmission; front wheel drive.
Horsepower/torque: 123 hp at 6,000 rpm/125 lb-ft at 1,400-4,500 rpm (148 lb-ft for maximum of 15 seconds in
overboost function)
Length/weight: 159.7 inches/2,578 pounds

Wheelbase: 98.0 inches
EPA fuel economy: 32/45/37 mpg, city/highway/combined
Cargo capacity: 14.9 cubic feet
Document J000000020140531ea5v0000g

Ford issues four recalls involving 1.3M cars, SUVs ; Escape, Mariner, Explorer among the vehicles cited
MONEY
Ford issues four recalls involving 1.3M cars, SUVs ; Escape, Mariner, Explorer among the vehicles cited
Chris Woodyard
Chris Woodyard, @chriswoodyard, USA TODAY
522 words
30 May 2014
USA Today
USAT
FINAL
B.2
English
Ford Motor continued the drumbeat of auto-industry recalls Thursday, announcing four recalls covering 1.3 million
vehicles, most of them to fix power-steering defects in SUVs that are linked to 20 reported accidents.
Toyota recalled more than 2 million U.S. vehicles in April, and more car companies are likely to join the as they
clean house to avoid federal fines for foot-dragging, such as the fine imposed this month on General Motors.
The average number of U.S. vehicles recalled annually by all makers from 2000 through 2012 was 21 million,
according to a USA TODAY analysis of National Highway Traffic Safety Administration data. GM alone has
recalled 13.79 million vehicles in the U.S. this year.
The "sheer number (of recalls) in recent months has become a sort of background white noise for consumers,"
says Karl Brauer, analyst at Kelley Blue Book.
The biggest of Ford's recalls on Thursday was 915,216 Ford Escapes and the discontinued Mercury Mariner
SUVs from the 2008 to 2011 model years -- 736,407 in the U.S. -- over a steering issue that could cause loss of
power assist. Ford knows of five crashes and six injuries.
A second recall, also for potential loss of steering assist, covers 195,527 of Ford's 2011 to 2013 Explorer full-size
SUVs, 177,747 in the U.S. Ford knows of 15 low-speed accidents and two injuries.
The Escape and Mariner problem involves a possible defective sensor in the steering column. The result could be
loss of power- steering assist, causing the system to default to manual steering. In other words, no power
steering, more effort to turn the wheel -- particularly at lower speeds -- and a higher risk of a crash. With the
Explorer, the issue is an electrical connection in the steering gear that can cut in or out, which could result in a
loss of power- steering assist, causing it to default to manual steering.
Ford's other recalls Thursday:
About 183,425 2010 to 2014 Taurus sedans sold or registered in states where road salt is used. The license-plate
light assembly can corrode, creating a short circuit. There have been 18 reports of fires, five of smoke or melting
and one injury.
About 82,576 driver's-side all-weather floor mats sold for 2006 to 2011 Ford Fusion, Mercury Milan and Lincoln
MKZ and Zephyr sedans, because the mats could jam the gas pedal. Ford knows of two crashes, no injuries. It's
similar to one of the defects that led to Toyota's unintended-acceleration recalls.
GM's recalls this year include more than 2.6 million 2003-2011 small cars with faulty ignition switches so far linked
to 12 U.S. deaths and one in Canada. NHTSA acting Director David Friedman said the agency still is
investigating, "but we believe it's likely that more than 13 lives were lost."
Contributing: James R. Healey, Paul Overberg
photo Ford Wieck

Document USAT000020140530ea5u0002y

An Increase in Vehicle Recalls Extends Beyond Just General Motors

An Increase in Vehicle Recalls Extends Beyond Just General Motors
By CHRISTOPHER JENSEN; Bill Vlasic and Danielle Ivory contributed reporting.
941 words
30 May 2014
The New York Times
NYTF
4
English
The growing number of recalls is spreading beyond General Motors.
Ford Motor said on Thursday that it was recalling about 1.3 million vehicles, including about 1.1 million in the
United States, mostly because of steering problems. So far this year, Ford has recalled more than 2.9 million
vehicles in the United States, far surpassing last year's 1.2 million vehicles.
There is now heightened sensitivity among automakers and regulators over safety, ever since G.M. in February
began recalling millions of smaller cars with a defective ignition switch that it has linked to 13 deaths. This month,
regulators fined G.M. a record $35 million, the maximum allowed, for not reporting the defect in a timely manner.
''This recall could be driven by the heightened sense of concern all automakers are feeling right now,'' said Karl
Brauer, senior analyst at Kelley Blue Book.
A Ford spokeswoman, Kelli Felker, said, ''These recalls are part of our normal processes.''
Other automakers are reporting higher recall numbers as well. In one action in March, Nissan recalled 990,000
vehicles in the United States, about 30,000 more than in all of last year. And Toyota is already more than halfway
to exceeding its total from last year, when it led all automakers with 5.3 million vehicles recalled.
The costs of the recalls are also mounting. While G.M. has set aside $1.7 billion to pay for the more than 13
million vehicles it has recalled this year, Ford said in April that it had taken a $400 million charge in the first
quarter to pay for warranty claims, including $350 million for recalls and other repair work on older model cars.
All four of the recalls announced on Thursday come several years after the automaker first knew of problems, and
in three cases, only after investigations by either the National Highway Traffic Safety Administration or its
counterpart Transport Canada.
The largest recall involves about 915,000 Ford Escape and Mercury Mariner sport utility vehicles from the 2008 to
2011 model years because the power steering may shut off, the automaker said. About 736,000 of the vehicles
are in the United States.
Ford said a problem with a sensor could cause a switch to manual steering, making the vehicle more difficult to
turn. Ford said it was aware of five accidents involving six injuries related to the steering problem.
Ford told regulators that it was aware of a problem in 2009 and made improvements in the part about a year later.
But there was no recall.
Then late in 2011, Transport Canada began an investigation after receiving complaints from owners. At the time,
Ford said there was no need for a recall because the vehicle could still be steered. The Canadian regulators,
however, continued to push, leading to Ford's decision to recall the vehicles in both countries.
The National Highway Traffic Safety Administration website lists several hundred complaints from owners,
including at least nine claims of accidents and six injuries.
''The power steering goes out while driving or parked,'' one owner wrote to the agency. ''The car needs to be
pulled over and restarted. This is very unsafe.''
Another owner said that Ford wanted $1,500 for the repair.
There is no indication that the agency ever opened an investigation, but a spokeswoman said it was monitoring
the situation.
The second recall action announced on Thursday covers about 195,500 Ford Explorers from the 2011-13 model
years, in which a poor electrical connection in the steering could cause the loss of power assist. Almost 178,000
of the sport utility vehicles are in the United States.
Ford was aware of 15 accidents, which it said took place at low speeds, and two injuries, described as minor,
related to the defect, Ms. Felker wrote in an email.
Ford said it began investigating ''quality issues'' with the steering in the summer of 2011 after noticing more
warranty claims than expected. That fall, the automaker modified a part to fix the problem. But there was no
recall.
In June 2012, however, American safety regulators began an investigation based on complaints from owners. As
with the steering issue with the Escape and Mariner, Ford said that even if power assist was lost, the vehicle
could still be controlled. But the safety agency continued to push for a recall, and this month, the automaker
agreed.
The third recall covers about 196,600 2010-14 Tauruses with corrosion in the rear license plate lamps that could
cause a short circuit and fire. The recall includes about 183,400 in the United States.
Ford is recalling vehicles only in places that use a lot of road salt, including New York, New Jersey and
Connecticut. The recall is also taking place in Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Missouri, New Hampshire, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia,
Wisconsin and the District of Columbia.
Ford told federal regulators that it was aware of a problem in 2011 and that it had been monitoring the problem.
Ms. Felker said the automaker was aware of 18 reports of fires and one minor injury.
The fourth recall covers about 82,500 all-weather floor mats on some 2006-11 Fusions, Mercury Milans, Lincoln
Zephyrs and Lincoln MKZs. The mats may have come with the vehicles or been bought from a dealer. Ford is
aware of two complaints that the accelerator jammed, but no accidents, Ms. Felker wrote in an email.
Document NYTF000020140530ea5u0007z

Corporate News: Ford Alters Course And Issues a Recall
Corporate News: Ford Alters Course And Issues a Recall

By Mike Ramsey and Neal E. Boudette
646 words
30 May 2014
J
B3
English
Ford Motor Co. on Thursday added to the year's massive surge in auto-safety recalls, calling back 1.38 million
vehicles in North America for repairs, some of which it previously had ruled out requiring a change.
The No. 2 U.S. auto maker's latest action includes about 1.1 million sport-utility vehicles in North America
because of problems that could lead their power steering to stop functioning.
The move highlights a shift in behavior this year among auto makers to fix problems they had previously tried to
address without broad-based safety campaigns. Auto makers have recalled about 22.7 million vehicles in the U.S.
to date this year compared with 20.9 million cars in all of 2013.
Nearly a year ago, a Ford safety official ruled out recalling the 2011 Explorers despite complaints by U.S. drivers.
According to a June 2013 letter to U.S. regulators, the official said a loss of power steering "does not present an
unreasonable safety risk in these vehicles."
The SUV recall for steering defects now includes that same vehicle. Ford plans to replace a malfunctioning
electrical connection in certain 2011 through 2013 Explorers whose power steering can turn off. It also would
replace a faulty sensor in 2008 through 2011 Escape and Mariner vehicles that could cause power steering to
malfunction and make the cars difficult to control.
Ford said it is aware of five accidents and six injuries connected to the Escape and Mariner problems and 15
slow-speed crashes and two injuries connected to the Explorer's steering.
General Motors Co. earlier this year recalled 1.3 million cars for a power steering problem despite arguing earlier
that a loss of power steering wasn't a safety concern because the cars could still be controlled, albeit with more
effort by a driver.
GM reversed its position and ordered a recall on March 31, part of a series initiated after the Detroit company
came under fire for failing to recall small cars with a defective ignition switch then linked to at least 13 deaths.
The steering recall included Saturn Ions built between 2003 and 2007. Four years earlier, GM recalled Chevrolet
Cobalts and Pontiac G5s -- vehicles made from the same components as the Ion -- for the same power steering
problem, but GM had pushed at the time to exclude the Ion from that recall.
The record year for automobile recalls was 1999, when nearly 55.6 million vehicles were recalled, according to
U.S. data.
GM already has recalled 13.8 million vehicles this year. Ford, Toyota Motor Corp. and Fiat Chrysler Automobiles
NV have recalled millions of cars and light trucks each.
Hefty government penalties changed the recall reluctance. In March, Toyota agreed to pay $1.2 billion to settle a
U.S. government criminal investigation. GM earlier this month agreed to pay $35 million to settle a civil complaint,
and the auto maker faces civil and criminal investigations over a troubled recall.
Ford's recall of Escapes and Mariners was compelled by Transport Canada, that nation's traffic safety regulator,
not by the National Highway Traffic Safety Administration in the U.S.
"Our decision to conduct this safety recall is based on concerns relayed to us by Transport Canada," Ford said in
a statement on Thursday.
Although Transport Canada was investigating the Escape's power steering problem, NHTSA had no active probe
of the Escape steering complaints as of April, according to its website.
The U.S. agency received 336 complaints about steering problems with 2008 Escapes -- nearly half of all
complaints it had on that year's model. NHTSA received 114 steering-related complaints total for Escapes from
the 2009 to 2012 model-years.
Document J000000020140530ea5u0003d

Ford Faces Hurdles in China Expansion
Ford Faces Hurdles in China Expansion

By Colum Murphy and Rose Yu
507 words
28 May 2014
J
English
Ford Motor Co. has pinned its global revival on a standard world-wide portfolio of models, a strategy referred to in
the industry as the "One Ford plan." Its champion, Chief Executive Alan Mulally, has repeatedly said nothing will
stand in the way of Ford's "laser focus" on that blueprint -- including in China.
But in recent weeks, reports in Chinese and auto-industry media suggested Ford may announce plans to develop
a new brand with one of its Chinese partners, Chongqing Changan Automobile Co. The reports said it would
develop an indigenous brand of sedan cars tailored for Chinese consumers and would represent a departure from
the One Ford plan.
The Chinese government requires all foreign auto makers producing passenger cars in China to do so. What is of
note, however, is how long it has taken Ford and Changan to get such a project up and running.
Changan declined to comment on the reports. A spokeswoman for Ford in China said: "As we have said before,
we are studying the feasibility of indigenous brands in China. However, we are focused on continuing to build the
Ford brand in China right now."
Foreign auto makers do business in China through joint ventures with local car companies. The government asks
those joint ventures to develop their own Chinese brands so that its car makers gain access to technology and
marketing know-how from their global partners. The ultimate intent is to make sure Chinese brands become
stronger and prosper.
Ford started to team up with Changan more than a decade ago, when there was no such a requirement. But in
recent years, as China's dream to create its own stable of strong auto brands looked increasingly difficult to make
reality, the Chinese government stepped up pressure on foreign car brands to help their Chinese partners.
Some foreign auto makers have been quicker than others to respond to that call. Nissan Motor Co. developed a
Chinese brand -- Venucia -- with its partner Dongfeng Motor Group Co. General Motors Co.'s Baojun brand is
also another prominent example.
So far, the One Ford strategy has yielded strong results here. Ford's sales in China leapt nearly 50% last year.
Meanwhile in the first four months of this year, Ford sold 368,150 vehicles in China, up 41% from a year earlier. It
expects to sell more than one million cars in China this year -- suggesting that the company's $5 billion China
investment plan, announced in 2011, is bearing fruit.
Ford also is planning to double its 2010 passenger-car production capacity in China and hopes to reach 1.2
million vehicles annually by 2015.
With such big ambitions, Ford will sooner or later need to add more production capacity. That would mean
seeking new permissions from the Chinese government -- which at that stage may check to see if Ford is
complying with the country's indigenous brand strategy.
Document J000000020140528ea5s00007

All Fancy Hat and No Horse
RUST IN PEACE
Automobiles; SECTAU
All Fancy Hat and No Horse
By ROB SASS
339 words
25 May 2014
The New York Times
NYTF
5
English
WHAT WAS IT? 2002 Lincoln Blackwood
WHAT WAS THE POINT? Perhaps because there was a Texan, George W. Bush, in the White House, Ford and
General Motors sensed a demand for prestige pickup trucks. The automakers' rival luxury divisions fought it out,
the Lincoln Blackwood battling the Cadillac Escalade EXT.
WHAT THE COMPANY SAID ''Lincoln is a distinctly American luxury brand, and Blackwood is an example of the
wide range of possibilities left to be explored,'' J Mays, then Ford's vice president for design, said in December
1998 as he introduced a concept version at the Los Angeles auto show.
REALITY CHECK As it turned out, the possibilities were explored and then quickly abandoned. While the
Escalade EXT lasted until 2013, the F-150-based Blackwood was sold for just one model year. The Blackwood
was not very useful -- 4-wheel drive was not available -- and its small cargo bed was covered by a motorized
tonneau. The bed's floor was carpeted and its sides lined in stainless steel, making it too nice to do work actually
expected of a pickup. Demand stalled at about 3,300 trucks.
WHAT THE CRITICS SAID In his review for The New York Times, Dan Neil wrote, ''So we have here a pickup
that won't pick up,'' and added, ''This is a truck so perverted by style and luxury that it cannot even carry the
occasional lawn mower.''
WHAT THE MARKET SAYS A split market seems to exist for used Blackwoods. A quick search of Cars.com
shows that trucks with fewer than 100,000 miles draw asking prices in the $15,000 to $19,000 range;
high-mileage examples are offered for under $10,000. None of the 50 Neiman Marcus Edition trucks, which
carried a $58,800 window sticker, appear to be on the market at present.
The Blackwood's covered, carpeted cargo bed, trimmed in stainless steel, proved too precious. (PHOTOGRAPH
BY FORD MOTOR)
Document NYTF000020140525ea5p0006k

Farmers Seen Supporting Vehicle Sales in Thailand
Farmers Seen Supporting Vehicle Sales in Thailand

By Kathy Chu
427 words
14 May 2014
J
NPC
English
Thai auto makers have a secret weapon to combat slumping domestic car sales: Farmers.
Farmers are reliable customers for pickup trucks, which they use to transport crops and machines. Pickup trucks
are also popular with miners and construction workers. These groups are boosting sales of pickup trucks in parts
of Southeast Asia at a faster rate than passenger-car sales, according to data provider LMC Automotive.
That's why, with car sales expected to fall in Thailand by nearly a quarter to about 1 million vehicles this year,
some auto makers are focusing on selling pickup trucks. Sales of pickup trucks in Thailand are falling, too, but
less rapidly than passenger cars -- by about 20% to 421,574 vehicles this year, LMC Automotive estimates. And
demand for pickups in other parts of Southeast Asia still is growing.
Ford Motor Co., which has a $1.9 billion joint venture in Thailand with Mazda Corp., is increasing exports of its
Ranger pickup truck this year to countries such as Vietnam and the Philippines, according to a Ford spokesman,
helping the company offset weak car demand in Thailand.
Ford's pickup sales in Thailand also have held up: In April, Ford Ranger sales rose 20% over the previous year,
although year-to-date sales are flat.
"We have a predominantly export business, and Thailand is a good market for us, but it's a small percentage of
the total volume that we build," said Trevor Negus, chief executive of Auto Alliance Thailand, the Ford-Mazda joint
venture, which exports 70% to 80% of its car and truck production overseas.
General Motors Thailand said it also is seeing demand for its Colorado pickup truck this year in places such as
Australia, Asia and the U.S.
"The proportion of exports is much higher this year than in previous years," said Gustavo Colossi, vice president
of General Motors Thailand.
Demand for the car maker's pickup trucks also has held up fairly well in Thailand so far, especially during the
October-to-May agricultural season, according to Mr. Colossi.
Yet many farmers in Thailand still are waiting for subsidies from a domestic rice program that sought to buy the
grain at above-market prices from farmers. If those subsidies don't come through in coming months, farmers'
purchases of pickup trucks may be affected in Thailand, said Colin Kinghorn, Asean head at Ipsos Business
Consulting.
---
Nopparat Chaichalearmmongkol and Warangkana Chomchuen contributed to this article.
Document J000000020140514ea5e0000i

New Dent in Navistar's Truck Sales --- Ford Motor Prepares to Return Medium-Truck Production, Now Outsourced, to Its Own Factory
New Dent in Navistar's Truck Sales --- Ford Motor Prepares to Return Medium-Truck Production, Now
Outsourced, to Its Own Factory
By Bob Tita
893 words
13 May 2014
J
B6
English
What happens when one of a company's biggest customers becomes one of its biggest rivals?
Navistar International Corp., a Lisle, Ill., commercial truck maker, is about to find out. For the past 13 years,
Navistar built Ford Motor Co.'s F-650 and F-750 commercial trucks, an approximately $400 million-a-year
business. Beginning next year, Ford plans to start making the $55,600-and-up vehicles itself, cutting out Navistar.
Chief Executive Troy Clarke plans to patch the hole in production and revenue by chasing high-volume,
medium-truck buyers such as big rental companies, municipalities and distributors. His idea: offer customers a
wider variety of engine brands and transmissions, allowing them to customize trucks to their specific needs. He is
pressing Navistar's dealers to emphasize the $10.5 billion company's single focus on commercial trucks.
Trying to hold on to customers in the medium-size truck business is one more hurdle for Mr. Clarke, who became
CEO after his predecessor's costly detour into building pollution-control systems for the firm's truck engines
collapsed and Navistar was forced to abandon the effort. To win customers back, Navistar is offering engines
made by Cummins Inc. and the same exhaust treatment system the rest of the industry uses.
"We are recovering our share, but we have more work to do," said Mr. Clarke, a former General Motors Co.
executive who was appointed CEO in March 2013. The company has been losing money for more than a year,
and posted a $248 million loss for its fiscal first quarter on $2.2 billion in sales.
Besides the troubles with its heavy-duty trucks, Navistar also has been losing market share for medium-duty
trucks, or those that can carry up to 33,000 pounds. Its DuraStar and WorkStar trucks now account for about 26%
of the North American medium-duty market, but that share is down from nearly 36% in 2011.
Medium-duty trucks are used as the underpinnings for many delivery vehicles, dump trucks, recreational vehicles
and school buses. Market forecaster John Stark in Chicago called Ford's March decision to build its own vehicles
a "real threat" to Navistar. "Ford has made all the investments to be a serious player in the market," he said.
Ford's coming trucks would share engines, transmissions and cab components with its other F-series vehicles to
build economies of scale. Ford had been selling trucks built in Mexico by the two companies' joint venture, known
as Blue Diamond Truck, since 2001. In 2015, Ford will start making new versions of the F-650 and F-750 at an
existing E-series van factory in Avon Lake, Ohio.
"We're going to be everywhere in the market," said Todd Kaufman, director of F-series truck marketing at Ford.
"We're not going to take a back seat to anybody" in the truck market.
He said the company intends to market its new trucks to the same truck and rental fleet operators courted by
Navistar and others. To ease apprehension about trying the new designs, Ford plans to offer a five-year,
250,000-mile warranty on engines and transmissions, about double the industry's standard warranty. Ford intends
to control costs by sharing cab components from its F-350 and F-450 pickup trucks.
Ford also will leverage its dealership network to support the new vehicles. About 600 of Ford's 3,000 U.S. dealers
sell its commercial truck brands, and all of its dealers will be capable of repairing the F-650 and F-750 vehicles.
"They'll be a big drawing card," said Charlie Gilchrist, president of Southwest Ford near Fort Worth, Texas.

Lee Dill, president of Circle D Truck Sales in Abilene, Texas, expects the coming Ford trucks to cost about $5,000
less than rivals because Ford is using in-house components and assembly. A Ford spokesman declined to
comment on the pricing.
"After we found out they're going to be offering a purely Ford product, we're going to buy quite a few of them,"
said Mr. Dill. He said Ford's five-year powertrain warranty takes away much of buyers' uncertainty about the new
models.
Navistar said it has no plans to increase its warranty incentives to drive medium-truck sales and is counting on
the wider range of engine, drivetrain and other options to increase its share in heavy- and medium-duty trucks.
"The real advantage we have is purposely built commercial trucks, and we have dealers who are solely focused
on commercial trucks," said Jack Allen, chief operating officer. "Those are inherent advantages over an
auto-based truck dealer."
Navistar loyalists such as Daniel Murphy, president of Idealease Inc. in North Barrington, Ill., said orders for
Navistar's medium-duty trucks are up 21% since the company began offering Cummins' 6.7-liter engines in the
trucks in September.
"We came through a bad patch, but we've learned," agreed dealer Drew Linn, owner of Southland International in
Alabama. "Having the Cummins engines has opened some doors with new customers for us and calmed some
fears with existing customers."
Document J000000020140513ea5d0001i

Ford Recalls Vehicles for Air Bag Flaw

Ford Recalls Vehicles for Air Bag Flaw
By CHRISTOPHER JENSEN; Danielle Ivory contributed reporting.
419 words
10 May 2014
The New York Times
NYTF
2
English
The three Detroit automakers announced vehicle recalls on Friday, though they said none of the defects had
resulted in accidents or injuries.
Ford said it was recalling nearly 1.4 million vehicles from the 2013-14 model years for an air bag malfunction and
door handles that may not latch properly. The air bag issue covers about 692,500 Escape and C-Max models,
including 591,000 in the United States, about 78,000 in Canada and almost 19,700 in Mexico.
The air bag problem involves what Ford calls its ''safety canopy'' -- an air bag that deploys from the ceiling near
the windows to protect an occupant's head in a side impact crash or rollover. Ford said a computer software issue
could delay the canopy's deployment ''in certain rollover circumstances, potentially increasing the risk of injury.''
The door handle defect affects 692,700 Escapes, including about 580,000 in the United States, 89,500 in Canada
and 20,000 in Mexico. Ford said any of the vehicle's door handles could malfunction and fail to latch properly,
allowing the doors to open when the vehicle was in motion.
Chrysler announced two recalls, covering more than 784,000 vehicles. The company will replace window
switches in an estimated 780,000 Dodge Grand Caravan and Chrysler Town & Country minivans from the
2010-14 model years, after episodes of overheating. Chrysler will also replace the power inverter module in more
than 4,000 electric cars, including some 2013-14 Fiat 500e vehicles, because a defect could cause coolant to
seep onto electrical component, elevating the risk of a short circuit and power loss while driving.
In addition, General Motors is recalling almost 9,000 Buick LaCrosse and Chevrolet Malibu sedans from the 2014
model year because brake rotors intended for the rear brakes may have been installed on the front brakes, the
automaker said in a news release. The rear brake rotor is thinner than front rotors, and G.M. said that although
the braking performance should not be affected when the vehicle was new, there would be ''reduced brake
performance'' over time.
The automaker said only about 1,700 of the cars had been sold; the others were still at dealerships. Under federal
law, the cars must be repaired before they are sold.
This is a more complete version of the story than the one that appeared in print.
Document NYTF000020140510ea5a00062

Ford Recalls 1.4 Million Crossovers; G.M. Recalls 9,000 Sedans
Business/Financial Desk; SECT

Ford Recalls 1.4 Million Crossovers; G.M. Recalls 9,000 Sedans
332 words
10 May 2014
The New York Times
NYTF
The New York Times on the Web
English
In two actions, Ford is recalling nearly 1.4 million vehicles from the 2013-14 model years for an air bag
malfunction and door handles that may not latch properly, the automaker said Friday. The air bag issue covers
about 692,500 Escape and C-Max models, including 591,000 in the United States, about 78,000 in Canada and
almost 19,700 in Mexico.
The air bag problem involves what Ford calls its ''safety canopy'' -- an air bag that deploys from the ceiling near
the windows to protect an occupant's head in a side impact crash or rollover. Ford said a computer software issue
could delay the canopy's deployment ''in certain rollover circumstances, potentially increasing the risk of injury.''
The door handle defect affects 692,700 Escapes, including about 580,000 in the United States, 89,500 in Canada
and 20,000 in Mexico. Ford said any of the vehicle's door handles could malfunction and fail to latch properly,
allowing the doors to open when the vehicle was in motion.
Ford said it was not aware of any accidents or injuries because of the defects.
In other recall news, General Motors is recalling almost 9,000 Buick LaCrosse and Chevrolet Malibu sedans from
the 2014 model year because brake rotors intended for the rear brakes may have been installed on the front
brakes, the automaker said in a news release. The rear brake rotor is thinner than front rotors, and G.M. said
although the braking performance should not be affected when the vehicle was new, there would be ''reduced
brake performance'' over time.
The automaker said only about 1,700 of the cars had been sold; the others were still at dealerships. Under federal
law, the cars must be repaired before they are sold. G.M. said it was not aware of any crashes related to the
problem.
Document NYTF000020140510ea5a0002w

Ford, Chrysler issue recalls over defects
A-Section
Ford, Chrysler issue recalls over defects
753 words
10 May 2014
The Washington Post
WP
FINAL
A10
English
Ford recalled almost 700,000 Escape SUVs and C-Max hybrid cars to fix a defect that could prevent air bags from
deploying in a rollover.
The fix involves reprogramming vehicle software, not a mechanical repair, Dearborn, Mich.-based Ford said in a
statement Friday. The action includes 627,275 Escapes and 65,192 C-Maxes from the 2013 and 2014 model
years. It applies to vehicles sold in the United States, Canada and Mexico.
Also on Friday, Chrysler recalled 780,000 minivans to replace window switches that could short-circuit and
overheat if exposed to moisture. Chrysler said it knows of 36 incidents related to the minivan's faulty switches but
is unaware of any related injuries or accidents. The recall involves certain 2010 through 2014 Dodge Grand
Caravan and Chrysler Town & Country minivans.
Ford's announcement is the latest in a series of recalls for the Escape and follows actions by multiple automakers
over air-bag defects. General Motors is in the middle of recalling 2.59 million small cars, including the Chevrolet
Cobalt and Saturn Ion, over a defective ignition switch that can lead to air-bag failure. That defect has been linked
to at least 13 deaths.
In March, Nissan recalled almost 1 million cars, including the 2014 Altima sedan, because software can
incorrectly classify a passenger seat as empty, leading to an air-bag failure. Faulty software also was cited in a
petition to the U.S. National Highway Traffic Safety Administration asking for a defect investigation into the
Chevrolet Impala.
Separately from the air-bag issue, Ford recalled 692,744 Escapes to fix an exterior door handle that can bind,
preventing the latch from working, the company said. The doors could open while driving or during a crash, and
could be difficult to close.
l A U.S. judge said Wal-Mart does not deserve dismissal of a lawsuit claiming it defrauded shareholders by
concealing suspected corruption at its Mexico operations. U.S. Magistrate Judge Erin Setser in Fayetteville, Ark.,
on Thursday recommended denying Wal-Mart's request to dismiss the lawsuit, led by a Michigan pension fund
against the world's largest retailer and former chief executive Mike Duke. A Wal-Mart spokesman said the
company disagrees with Setser's recommendation, which is subject to review by U.S. District Judge Susan
Hickey.
l Crews from Union Pacific Railroad worked to clear a six-car oil train derailment that leaked some crude into a
ditch in northern Colorado. State and local emergency officials determined that one car of the 100-car train was
leaking after the 8 a.m. derailment near LaSalle, about 45 miles north of Denver. The amount of oil spilled wasn't
immediately known, but a vacuum truck was brought in to suck up the spill.
l RadioShack, which said in March it would close as many as 1,100 locations to cut costs, is proceeding with a
plan to shut fewer stores because of a snag with its lender agreements. The Fort Worth, Tex.-based company
has been seeking consent from creditors to proceed with the full closure plan, though the terms being offered
aren't acceptable, according to a regulatory filing Thursday. The impasse may have a negative effect on
RadioShack's credit because most of the stores it wanted to close are underperforming, Moody's Investors
Service said in a statement Friday.

l Procter & Gamble has apologized for "any false connotations" after stirring anger in Germany for unintentionally
placing a neo-Nazi "code" on promotional packages for its Ariel laundry detergent. Outraged shoppers had posted
pictures online of Ariel powder boxes featuring a white soccer jersey with a large number "88." The number is
sensitive because far-right extremists in Germany often use it as a code to skirt a ban on the use of Nazi slogans
in public: Since H is the eighth letter of the alphabet, 88 represents the phrase "Heil Hitler." Similarly, 18 is used
to stand for AH, or Adolf Hitler. Procter & Gamble said Friday that the number was "unintentionally ambiguous."
l U.S. employers advertised slightly fewer jobs and slowed hiring a bit in March, though the declines came after
healthy gains the previous month. The Labor Department said employers posted 4 million jobs in March, down
2.7 percent from February. But February's total nearly matched November's for the highest level of openings
since January 2008.
WP20140510digest0510
Document WP00000020140510ea5a0001u

Corporate News: Thai Car Sales Sputter Amid Turmoil
Corporate News: Thai Car Sales Sputter Amid Turmoil

By Kathy Chu, Nopparat Chaichalearmmongkol and Warangkana Chomchuen
829 words
9 May 2014
J
B3
English
RAYONG, Thailand -- Two years ago, when car demand was strong, workers at a 3.5-million-square-foot
automobile factory southeast of Bangkok could install four tires on a Ford Fiesta in two minutes. Now, the
assembly line runs much more slowly and the job takes twice as long.
That production slowdown is one way car makers such as Auto Alliance Thailand -- a $1.9 billion joint venture of
Ford Motor Co. and Mazda Corp. -- are coping with an industrywide sales drop of an estimated 25% this year,
which is likely to put Thailand behind Indonesia as Southeast Asia's largest car-sales market. A key culprit: more
than half a year of political turmoil that has pummeled business, slowed the economy and, this week, led to the
ouster of the prime minister.
Auto Alliance is also cutting overtime hours by as much as 30%, and deploying some of the 7,000 workers at its
Rayong plant to the assembly line for pickup trucks, whose sales are holding up better than those of passenger
cars.
"The political situation is starting to eat into people's confidence, and whether they want to spend on a new car,"
said Trevor Negus, chief executive of Auto Alliance.
Infighting in Thailand between political parties is now stretching into month seven and threatening to get worse,
with demonstrators from both camps planning rallies in Bangkok, after a Thai court this week removed Prime
Minister Yingluck Shinawatra.
The toll on growth is already clear. Thailand's economy likely contracted in the quarter ended in March, the
country's Ministry of Finance said last month. The International Monetary Fund warned Thursday that it might
need to cut its estimate for Thailand's economic growth this year to below their previous estimate of 2.5%, if the
political turmoil continues.
The strife has taken a toll on tourism, which accounts for about 10% of Thailand's economy, and lopped off sales
at businesses as diverse as retail conglomerate Central Group and quick-service restaurant chain Yum Brands
Inc. Thailand's exports slid 1% in the first quarter from a year earlier while factory output contracted 7% during the
same period, extending its decline to 12 straight months.
The slow-boil turmoil has put industries such as car manufacturers in a bind. They can't afford to leave, analysts
say, because they have spent billions on factories and supply-chain infrastructure that have made Thailand the
largest car-production hub in Southeast Asia. And there is nowhere to go: Despite Thailand's troubles, it still tops
others in the region for everything from roads and power lines to the workforces needed for car manufacturing.
Many car companies are trying to cope by slowing production, offering promotions, boosting exports and shifting
around inventory.
But there are also signs that Thailand's troubles could be taking a toll on longer-range investment plans, or
chipping away at the country's competitiveness while other Southeast Asian nations, including Indonesia and
Malaysia, are aggressively courting auto makers.
Honda Motor Co. of Japan said in April that it would delay construction of a $530 million Thai car-assembly plant
by at least six months.
Toyota Motor Co. warned in January that it might need to rethink an investment of as much as 20 billion baht, or
$618 million, because of the political turmoil.
Honda now expects Thailand's auto sales in 2014 to drop as much as 25% to about one million cars.
That would put Thailand behind Indonesia, which analysts expect to sell 1.2 million cars this year, for the first time
since Thailand's massive floods in 2011.
"Overall, Thailand has slightly lost its attractiveness" for investment, said Honda Thailand Chief Operating Officer
Pitak Pruittisarikorn, on the sidelines of the Bangkok auto show in March.
Inside Auto Alliance's Rayong factory, some workers say that the production slowdown means they now spend as
much time waiting for auto parts to roll down the production line as they spend assembling the car.
A handful of factory workers said the reduction of overtime hours has affected their ability to cover their monthly
bills.
The joint venture can't furlough workers or cut their hours dramatically for fear of union troubles and the threat of
losing trained workers, said a former midlevel manager with Ford. Keeping a full staff on board also helps the joint
venture prepare for coming car launches, said another person close to the company.
General Motors Thailand said it is trying to stimulate sales through promotions, including a two-year car-insurance
policy that is meant to attract buyers to newer models. It focuses on sales of pickup trucks, as well as managing
its passenger-car inventory and reallocating unsold cars between dealers.
---
Rose Yu, In-Soo Nam and Mitsuru Obe contributed to this article.
Document J000000020140509ea590002t

The Chatter for Sunday, May 3
THE CHATTER
Money and Business/Financial Desk; SECTBU
The Chatter for Sunday, May 3
186 words
4 May 2014
The New York Times
NYTF
2
English
''I knew we could do this. Every week I got more and more confident, even through the toughest of times.''
Alan Mulally, talking about the turnaround of Ford after it appeared headed for bankruptcy in 2009. Last week, Mr.
Mulally announced that he would retire as chief executive on July 1 and, as expected, be succeeded by the
veteran Ford executive Mark Fields.
''We've been living in sub-3-percent land, and people have gotten used to that as the new normal.''
Dan North, chief economist at Euler Hermes North America, a large insurer. He said the annual economic growth
rate in 2014 would most likely be below the post-World War II average of just over 3 percent and called that
''anemic.''
''Sony needs a new strategy. They need hit products.''
Daniel Ernst, founder of Hudson Square Research. Sony slashed its profit outlook for the third time in a year on
Thursday, putting increased pressure on its chief executive, Kazuo Hirai, to show that he can still engineer a
turnaround.
Document NYTF000020140504ea540004h

Small and City-Smart, Microvans Proliferate
FIRST LOOK
Automobiles; SECTAU
Small and City-Smart, Microvans Proliferate
By PAUL STENQUIST
502 words
4 May 2014
The New York Times
NYTF
4
English
If Americans found the arrival of the Ford Transit Connect in North America in 2009 a bit unsettling, by now they
have become accustomed to its upright and somewhat ungainly shape. In just a few years, small cargo vans have
become a familiar sight in American cities -- and Ford's competitors are taking notice.
The latest entry in the class is the Chevrolet City Express, introduced at the Chicago auto show in February and
scheduled to arrive at dealerships this fall. The City Express gives General Motors a vehicle to compete in a class
that also includes models like the Nissan NV200 and will expand again with the release of Fiat Chrysler's 2015
Ram ProMaster City. That vehicle is based on the high-roof Fiat Doblò, which has been sold in various countries
for a decade.
The Chevy van is essentially a Nissan NV200 wearing a bow tie. Both are built on a Nissan front-wheel-drive
platform in Cuernavaca, Mexico. Both offer 122.7 cubic feet of cargo space and use a 131-horsepower 2-liter
4-cylinder engine with a continuously variable automatic transmission. They even share a 5.8-inch dashboard
touch screen.
The NV200 may be best known in the United States as the vehicle that was intended to be the Taxi of Tomorrow.
It won a 2011 competition aimed at selecting a uniform taxi design for New York City, but the plan was derailed by
political wrangling and complaints over shortcomings. Rulings by the New York State Supreme Court ultimately
doomed the single-source taxi plan.
Still, it was not the loss of the New York taxi monopoly that led Nissan to forge a deal with G.M., a Nissan
spokesman, Dan Bedore, said in a telephone interview. Rather, it was G.M.'s desire to fill a hole in its product
line, and the NV200's appeal as an urban delivery vehicle, that sealed the deal. ''G.M. had a need,'' he said, ''and
we had a van that suited their needs.''
The City Express offers some features not found in the NV200, including six standard cargo tie-downs, optional
door glass and a second dome light, a Chevrolet spokesman, Robert E. Wheeler, said in an email.
Both vans have an estimated payload capacity of 1,500 pounds and a 6-foot 10-inch stretch of floor space from
the rear doors to the back of the front seats. Sliding doors on each side and 60-40 split rear doors offer good
access.
''The van wins friends wherever it goes,'' Mr. Bedore said of the NV200. ''Customers really adore that van.''
G.M. is betting that van buyers will be equally pleased with the Chevrolet version. Prices for the City Express LS
start at $22,950 and a better-equipped LT version begins at $24,510.
The Chevrolet City Express is a first cousin of the Nissan NV200. (PHOTOGRAPH BY GENERAL MOTORS)
Document NYTF000020140504ea540003p

More Pickup Buyers Opt for V6s
MOTORING
Automobiles; SECTAU
More Pickup Buyers Opt for V6s
By TUDOR VAN HAMPTON
971 words
4 May 2014
The New York Times
NYTF
2
English
It's much too soon for a retirement party, but the V8 engine seems to be losing its clout with buyers of full-size
pickup trucks. For the first time in about 50 years, many big-truck customers no longer consider a 6-cylinder
engine to be a downgrade.
''The V6s today are V6s in name only,'' said Doug Scott, truck group marketing manager at Ford Motor. ''The
technology that we have been able to apply has really resulted in much better power output, while at the same
time achieving much better fuel economy.''
By Ford's estimates, roughly 57 percent of F-150 pickups are now shipped with V6 engines. The 3.5-liter
twin-turbocharged EcoBoost V6, developing a V8-like 365 horsepower and 420 pound-feet of torque, is now the
model's most popular engine with a so-called ''take rate'' of 47 percent. An entry-level, naturally aspirated 3.7-liter
V6, which puts out 302 horsepower and 278 pound-feet, accounts for the balance of Ford's small-engine mix
today, or 10 percent of sales.
Just last year, Ford's 5-liter V8 was the most popular engine in the F-150, accounting for more than 50 percent of
sales. But in the fall, Ford increased EcoBoost production. By December, the V8 was taking a backseat to the
boosted V6.
''In just over three years, we have been able to sell over 500,000 EcoBoost-equipped F-150s,'' Mr. Scott said.
''The engine has gotten more popular, and we have been in a better position to meet that demand.''
Ford expects the 6-cylinder renaissance to continue. Later this year, the company will drop the 6.2-liter V8 it has
been offering, leaving the 5-liter as the only V8 offered in the 2015 F-150, while adding a 2.7-liter EcoBoost V6,
whose power ratings have not been announced.
The current 3.5-liter turbo is rated at 16 miles per gallon in the city and 22 on the highway.
The naturally aspirated 3.7-liter V6, rated at 23 m.p.g. on the highway, will shrink to 3.5 liters, a downsizing made
possible because the new aluminum-body truck will weigh less.
Ford expects its line of three V6s to account for more than 70 percent of all F-150 sales.
Mileage numbers for the 2015 F-150 are still hush-hush, but Ford promises to up the ante. ''This is going to be the
most fuel-efficient F-150 ever,'' Mr. Scott said.
The main competitors, from General Motors and Ram, aren't standing still, however. G.M.'s 4.3-liter V-6,
delivering 285 horsepower and 305 pound-feet of torque, accounts for 20 percent of its half-ton pickup sales, up
from 5 percent last year, while achieving up to 24 m.p.g. on the highway.
''There really is no downside to the V6, unless you are towing a really heavy trailer,'' a Chevy spokesman, Tom
Wilkinson, said. G.M.'s new 4.3-liter V6 has direct injection, variable valve timing and cylinder-deactivation
technology that automatically shuts down two cylinders in cruising mode to save fuel.

Not to be outdone, Ram expects that its V6 lineup -- consisting of a 3.6-liter V6, with 305 horsepower and 269
pound-feet of torque, and a 3-liter turbocharged EcoDiesel -- may together account for close to 30 percent of its
full-size pickup mix by the end of the year.
Bob Hegbloom, brand director for Ram, compared the first Ram pickup with a Cummins diesel engine, in 1989,
with Chrysler's current 3-liter EcoDiesel. The Cummins engine made 160 horsepower and 400 pound-feet of
torque, whereas the new V6 -- which is half the size -- produces 240 horses and 420 pound-feet. ''Technology
has caught up,'' he said.
Ram holds bragging rights for class-leading fuel economy, with its EcoDiesel rated at 28 m.p.g. on the highway.
Its most fuel-efficient conventional truck, the 2014 Ram 1500 HFE, also leads the gasoline class. Equipped with
the 3.6-liter V6 and an optional engine stop-start system, and mated to an 8-speed automatic transmission, it is
rated at 18 m.p.g. in town and 25 m.p.g. on the highway.
Aside from engines, truck makers are considering higher-geared transmissions and even smaller engines to
reach the 30 m.p.g. mark and beyond.
Ford and G.M., which offer only 6-speed transmissions today, are in a partnership to develop 9- and 10-speed
automatics, and experts say that 4-cylinder engines are not off the table for half-ton trucks.
''There is a scenario under which you might have a large, turbocharged 4 that could run in the lightest-capacity
version of these trucks,'' said John Voelcker, editor of Green Car Reports. ''Once the market is 80 percent V6s,
then they might look at it.''
Later this year, G.M. is reintroducing midsize Chevy Colorado and GMC Canyon trucks that feature 2.5-liter
in-line 4-cylinders.
Still, the lazy V8 leads the pack among heavy haulers. As such, Ford is aiming EcoBoost at owners who tow
trailers, boats or campers only occasionally.
''If you are a frequent tower, it may be that for you the 5-liter is a better choice,'' Mr. Scott said.
Driving style can take a significant bite out of fuel economy, Mr. Voelcker echoed. ''If you baby a turbo, you can
get great mileage,'' he said. ''But most people don't drive turbos that way.''
Ford expects more than 70 percent of 2015 F-150s to be sold with V6 engines. (PHOTOGRAPH BY LUCAS
JACKSON/REUTERS)
Document NYTF000020140504ea540003m

Video: The Ford Fiesta ST Is a Party on Wheels
Automobiles; SECT
Video: The Ford Fiesta ST Is a Party on Wheels
By TOM VOELK
230 words
3 May 2014
The New York Times
NYTF
English
A 197-horsepower car is not the kind of machine that gets acceleration addicts excited. A basic V6 Mustang
delivers 305. The V8 GT has 402. But 197?
As it turns out, 197 horses can be loads of fun, as they are in the Ford Fiesta ST. For starters, this hatchback is
not very big, and it weighs only 2,742 pounds. Its price isn't large either. The base model goes for $22,225, and
yes, that includes the destination charge. Throw in an extra two grand, and Ford will bolt in deeply bolstered
Recaro seats. Skinny drivers will love them; larger people would be wise to try them first.
The E.P.A. fuel-economy numbers are 26 miles per gallon in the city, 35 on the highway. That's just a bit less
than the standard Fiesta, which has only 120 horsepower. I saw 24 m.p.g., but I flogged the ST mercilessly and
constantly. I just couldn't help myself.
The mandatory 6-speed manual gearbox has a light, forgiving clutch and solid shifter feel. Driving dynamics are
wonderfully neutral for a front-wheel-drive car. Zero to 60 happens in 6.5 seconds. Add it all up and 197
horsepower makes the Fiesta ST a party on four wheels.
Document NYTF000020140503ea530002w

New Ford Chief Faces Tough Array of Choices
New Ford Chief Faces Tough Array of Choices

By Mike Ramsey and Joann S. Lublin
746 words
2 May 2014
J
B1
English
Mark Fields is set to take over as chief executive of Ford Motor Co. on July 1, and he'll face a very different set of
challenges than those the current boss, Alan Mulally, has tackled over the last eight years.
When Mr. Mulally arrived in 2006, the second largest U.S. auto maker's main troubles were inside the company --
a dysfunctional culture, mounting losses, poor product quality and unending turf battles that hamstrung its
performance.
Mr. Fields will take the reins of a company that is expanding and profitable. However, he can't slow the changes
intended to make the results-oriented management style instilled under Mr. Mulally continue. He will also have to
keep Ford's profits in North American rolling and stanch losses in Europe.
Big tests also will come from the outside: Ford is still building operations in China, Russia, India and other
emerging markets, and Mr. Fields faces decisions on where next to invest for sales expansion, and what new
automotive technologies to back.
The new CEO won't have an easy time at Ford, some executive experts believe. "Mulally worked wonders," said
Jeffrey Sonnenfeld, a senior associate dean at Yale School of Management who knows Messrs. Fields and
Mulally. "This company is not on cruise control."
Ford, as expected, disclosed on Thursday that Mr. Mulally, 68 years old, would retire, and Mr. Fields, 53, and the
Dearborn, Mich., company's chief operating officer for the last 15 months, would be his successor. Ford shares
fell 1.5% to $15.91.
Mr. Mulally is retiring but his ever-present smile won't go away. A U.S. high-tech firm has approached him about
joining its board, said a person close to the matter. But it was unclear whether he would accept the position. Mr.
Mulally was a candidate to join Microsoft Corp. as CEO before the tech giant chose an insider earlier this year.
In an interview on Thursday, Mr. Mulally declined to discuss his plans. "The most important thing for me right now
is this orderly [management] transition," he said. "But you know how much I like to serve. I do like to serve, but I
also like the idea of retirement."
Mr. Mulally said he offered no advice to Mr. Fields. "Mark helped to create this business environment. He is going
to hold the values of this company really dearly in his hands. I don't need to tell him anything."
Mr. Fields's appointment is the latest in a series that has put Ford in the hands of a close-knit group of mostly
younger executives. They include Chief Financial Offer Bob Shanks, 61, and development head Raj Nair, 49, who
took their posts in 2012, the same year Mr. Fields was named chief operating officer. Mr. Fields worked closely
with Mr. Shanks while each were at Mazda Motor Corp., when it was affiliated with Ford.
Joe Hinrichs, president of Ford's Americas operations, and Jim Farley, global marketing chief, were considered
possible successors to Mr. Mulally.
Keeping the team together may be one challenge. "These are terrifically talented people, and there will be other
companies that want to entice them," Mr. Fields said.
In China, industry growth is slowing and economists worry manufacturers may eventually end up with more plants
than they will need.

Ford has also invested heavily in Russia and India, two giant markets where auto sales haven't grown as rapidly
as hoped. Trepidation in Russia because of the political situation in Ukraine and the economic sanctions that
have been put in place pose another hurdle for the new boss.
The auto industry is also being reshaped by new technologies such as hydrogen fuel-cells and electric vehicles.
In the past few years, not all of Ford choices have panned out as hoped.
Ford was an early adopter of advanced in-car electronics that link with smartphones and manage vehicle controls.
But its system, MyFord Touch, suffers from complaints it is hard to use.
Mr. Fields promised to continue the focus on pushing new technology, while using research to reduce risks.
Mr. Fields said one thing that won't change is the weekly business review meeting that Mr. Mulally instituted. It
allows the company's executives to bring up each issue and hash it out before problem become serious.
Document J000000020140502ea520003o

5 things Ford's new CEO needs to do
MONEY
5 things Ford's new CEO needs to do
424 words
2 May 2014
USA Today (Newspaper)
USAT
FINAL
B.1
English
Ford Motor finally made it official: CEO Alan Mulally will retire July 1, and COO Mark Fields will replace him.
Fields had been the heir apparent since Ford created the COO job for him in December 2012 to be Mulally's
understudy. Fields' major accomplishment with Ford has been reviving the North American operations, its main
source of profits today. Wall Street's had time to get amiliar with Fields, so Ford's
stock price moved little on the announcement, but closed down 24 cents, or 1.5%, at $15.91, after Ford reported
weak April sales. Ford lost about $15 billion in Mulally's first three years, but rebounded in 2009 and has earned
about $43 billion since. Mulally leaves Ford healthy, with plenty of products in the pipeline, but Fields has lots on
his plate. He must finish giving Ford's aluminum- bodied 2015 F-150 pickup and profit machine a smooth launch
this year. But looking beyond that, he needs to:
1. Find a reliable substitute for Sync, fast. It's the Microsoft setup that underlies Ford's voicecommand system,
and it stinks. Sync foul-ups have sunk Ford on widely consulted third-party quality and reliability
surveys and soured the increasing number of tech-savvy buyers.
2. Fix Lincoln, or dump it. Start by giving the cars real names. Who can keep straight the MKX from the MKZ from
the MKT? It's nice to have a luxury brand, but as Cadillac has shown at GM, it takes many years to establish
BMW-style credibility. Lincoln can't do it with a line of re-badged Fords.
3. Get busy in China. "We're clearly late," acknowledges Mulally, but sales there are starting to roll, and the car
company can't afford to stumble in the fast-growing market. Ford also starts selling Lincolns there this fall.
4. Stay focused in Europe. The economy's begun slowly to edge back up, bringing auto sales with it. Ford might
break even in there next year. Once Europe isn't an earnings anchor, the temptation will be to
slowdown needed job cuts and factory closings. Froma corporate standpoint, bad idea.
5. Keep Mulally's all-for one philosophy steaming ahead. It'll be easy to slide back into Ford's notorious fiefdoms
and infighting without constant pressure from the boss. Those warring fiefdoms played a part
in bringing Ford to the edge of bankruptcy before Mulally took over and smashed the silos.

G.M. Sales Increased 7% in April, Apparently Unaffected by Recalls

G.M. Sales Increased 7% in April, Apparently Unaffected by Recalls
By REBECCA R. RUIZ
917 words
2 May 2014
The New York Times
NYTF
4
English
Despite a steady drumbeat of negative news surrounding the recall of 2.6 million small cars with a deadly defect,
General Motors continues to be unaffected in its showrooms.
Car sales for the nation's largest automaker rose 7 percent in April over the same month a year ago, to 254,076,
the company said on Thursday. The increase follows a 4 percent increase in March, which was the first full month
since G.M. began recalling the cars in February for a defective ignition switch that it has linked to 13 deaths.
Sales numbers were mixed for the domestic automakers; Chrysler stood out with a 14 percent increase in sales,
and Ford declined 1 percent.
Over all for the industry, sales were up 8 percent over April of last year, with 1.39 million vehicles sold in the
United States for a seasonally adjusted annualized rate of 16 million vehicles, according to Autodata.
As in March, healthy overall growth suggested that some car buyers had postponed their purchases during the
bad weather over winter. ''The industry is out of first gear,'' said Jesse Toprak, chief analyst for Cars.com.
Analysts credited G.M.'s strong sales to its fresh lineup of redesigned vehicles, along with surging demand for
trucks and sport utility vehicles.
''G.M.'s current product portfolio is compelling enough to allow in-market consumers to look past G.M.'s recall
woes,'' said Alec Gutierrez, senior analyst for Kelley Blue Book.
Chrysler also had strong sales in April, with its 14 percent increase, to 178,652 vehicles. Chrysler, which is now
fully owned by Fiat, was lifted by surging sales of its Jeep brand, which rose by 52 percent. Its Ram trucks rose
17 percent in what was Chrysler's 49th consecutive month of sales growth.
Ford was the exception among domestic automakers. Though its trucks continued to sell well, rising 8 percent
over last year, it was hurt by sluggish demand for sedans like the Focus, which fell by 15 percent from April last
year to 19,104 cars sold. Over all, Ford sold 210,355 vehicles in April.
Ford's numbers were announced the same day that the company said that Mark Fields, its chief operating officer,
would succeed Alan R. Mulally as chief executive July 1.
Some analysts were surprised by April's sales figures, which had G.M. beating expectations. ''Ford has been the
biggest disappointment,'' Mr. Toprak said.
Analysts had speculated that because G.M.'s recalls were announced in waves, starting in February and
continuing through mid-March, it would take time for the market to reflect consumer concern. Competitors like
Ford, they said, would be well positioned to poach some of G.M.'s small-car business in April.
''We haven't seen any impact,'' John Felice, Ford's vice president for United States marketing, sales and service,
said in a conference call with analysts. ''It's negligible.''
And cars are starting to get fixed by G.M., as replacement ignition switches and cylinders arrive at dealerships.

Through April, the industry has nearly matched the number of vehicles recalled in the United States it had for all
of last year. G.M. is responsible for a third of this year's volume, having already recalled some seven million
vehicles, including the 2.6 million for the ignition-switch defect. G.M.'s total so far this year is nearly 10 times its
total for all of 2013. The ignition-switch recall has drawn particular attention given the fatalities associated with it,
and the length of time it took for the company to address it.
In the end, consumers appear to have attached little stigma to G.M. over its troubles. According to a Kelley Blue
Book survey, buyers were more affected by Toyota's recall of millions of vehicles several years ago after
widespread complaints of sudden, unintended acceleration.
One reason, analysts say, is that the G.M. cars under recall like the Chevrolet Cobalt are all out of production.
And some of the models, like Saturn and Pontiac, were discontinued in the company's restructuring after its
bankruptcy, putting them further out of consumers' memory.
Toyota, by comparison, recalled millions of cars that were still in production. Its sales suffered as complaints
mounted, but have since rebounded. In April, Toyota reported a gain over April of last year, led by strong sales of
its sport-utility vehicles. Sales of the 4Runner, for example, jumped 64 percent, to 6,300.
Other foreign automakers had strong months as well. Both Nissan, which rose 18 percent to 103,934 vehicles
sold, and Hyundai, which increased 4 percent to 66,107, reported record April sales.
Volkswagen, though, continued to struggle, with a decrease in sales, even as its parent company's Audi brand
remained a bright spot, with sales increasing 19 percent.
Mr. Gutierrez attributed Volkswagen's decline to a brand identity problem.
''They've got this dual personality,'' he said. ''They're somewhere between a traditional mainstream brand and a
luxury brand. They're in a tough spot.''
The average purchase price for light vehicles in April, according to Kelley Blue Book, was $32,141, only slightly
down from last month and up 1 percent from last year.
Hyundai Sonata; Hyundai Elentra CHARTS: How the Industry Fared; Most Popular Cars and Trucks; How the
Automakers Fared (Source: MotorIntelligence.com)

Corporate News: Sales Spring Ahead for Car Makers
Corporate News: Sales Spring Ahead for Car Makers

By Jeff Bennett and Michael Calia
614 words
2 May 2014
J
B2
English
Consumers last month shrugged off concerns about the tepid economy and continued streaming into U.S. auto
dealerships, helping most car makers post higher new-vehicle sales.
General Motors Co., although ensnared in a troubling series of safety recalls, reported a nearly 7% gain in April
sales on strong demand for its pickup trucks. Fiat Chrysler Automobiles NV posted a 14% increase, boosted by
its Jeep sport-utility vehicles, which achieved their best-ever sales month, and Ram pickup trucks.
Ford Motor Co.'s sales slipped less than 1% to 210,355 cars and light trucks, mainly because of an 8.5% drop in
Ford-brand cars and an 11% decline in its Lincoln luxury brand. Its pickup truck sales rose.
Overall, auto makers sold 1.39 million cars and light trucks last month, a year-on-year rise of 8%, according to
researcher Autodata Corp.
The annualized selling rate for the month was 16.0 million vehicles, down from March's 16.4 million pace but up
from a year ago.
If the sales pace holds until the end of the year, 2014 will be the first year auto sales have topped 16 million cars
and trucks since 2007.
GM's strong sales of 254,076 in April supported the company's earlier insistence that its major brands were faring
well, and "suggests that consumers are looking past old GM's errant ways and has more faith in new GM's
products," Kelley Blue Book analyst Eric Ibara said.
Wall Street investors had been looking for April sales results to gauge the impact of the auto maker's first-quarter
recalls of nearly seven million vehicles for faulty ignition switches and other defects. Chief Executive Mary Barra
appeared before congressional hearings at the start of the month and was grilled on why it took GM nearly a
decade to start a recall after first identifying the switch problem.
One factor helping GM: the models affected by the recalls and the faulty ignition switches, the Chevrolet Cobalt
and Saturn Ion, have been out of production for years, said Mark Wakefield, a managing director at Alix Partners,
a consulting firm with a large automotive practice.
Amid all the negative publicity the recalls have brought, "you would think GM sales would have cratered," he said.
"But customers are considering the products GM has on the ground."
Investors cheered the GM gains, sending the company's shares up 42 cents or 1.2% to $34.90 in 4 p.m. trading.
Ford was off 1.5% at $15.91, both in New York on Thursday. Fiat didn't trade on Thursday.
One weak spot for the Detroit auto makers proved to be sputtering sales of mid-size cars. Ford's big-selling Focus
compact car sales fell 15% compared with a year ago.
The auto maker said its sales to fleet buyers such as rental car companies fell. But Fiat Chrysler car sales fell
26% and sales of GM's Chevrolet Malibu family sedan declined 8.2%
Upbeat results came from Toyota Motor Corp., whose April sales rose 13%, Nissan Motor Co. with an 18% gain
and Honda Motor Co. eked out a 1% rise. Dealers said Japanese auto makers are discounting more than usual,
taking advantage of favorable exchange rates now that the yen has fallen against the dollar.

Hyundai Motor Co. said its U.S. sales rose 4% year-over-year helped by a 36% increase in its subcompact
Accent and 30% gains in its Sonata sedan and Santa Fe sport-utility vehicle.
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For Ford and GM, Margins in the Mirror May Look Bigger
Heard on the Street

For Ford and GM, Margins in the Mirror May Look Bigger
By Justin Lahart
490 words
2 May 2014
J
C8
English
Investors may want to cast one last glance back at the profit margins Ford Motor and General Motors have been
achieving on their home turf lately. The years to come might not be so kind.
When it comes to the profitability of their businesses in North America -- far and away the most important market
for both companies -- Ford and GM are in different places. Ford has targeted a margin of 8% to 10%, and has
been hitting that. Last year, its pretax profit margin was 9.9%, down a bit from 2012's 10.4%. That is a testament
to the costs Ford has taken out under Chief Executive Alan Mulally, who on Thursday announced he would step
down on July 1.
GM, meanwhile, has set a North American margin target of 10% by "mid-decade" and hasn't hit it yet. Its was
7.8% last year, up from 7.2% in 2012. And 2014, with the costs and bad press GM is incurring from its recall,
doesn't look like it will be the breakout year.
But these differences aside, the two companies face a shared challenge of selling into a U.S. market in which
growth looks likely to slow even as competition heats up. That will make maintaining profit margins, in Ford's
case, or expanding them, in GM's, a tough trick to pull off.
Ford, GM and their rivals reported Thursday that they sold about 16 million cars and light trucks, expressed as an
annual rate, in the U.S. in April. Sales may not be able to go much higher on a sustainable basis. Industry
watcher IHS's base case, which weighs factors including population growth and the number of vehicles already
on the road, projects light-vehicle sales to average a bit less than 17 million a year over the next decade.
With vehicle sales overall unlikely to show much growth, the focus inevitably turns more forcefully to market
share. Indeed, differences between the Labor Department's quality-adjusted car-price statistics and dealer selling
prices suggest companies are adding more content to vehicles, such as fancy entertainment systems or trim. This
effectively means giving customers more car for their money in an effort to capture more sales, risking profit
margins.
Both Ford and GM likely also will have to step up capital spending and research-and-development spending to
produce cars that compete.
Unless Ford can figure out more ways to streamline its business, such investment could weigh on its bottom line.
GM, meanwhile, says it will make its North American business more efficient. But until it actually delivers, this
remains an aspiration -- and one that will have to be realized as the tailwind of the market's recovery peters out.

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FORD EXECUTIVE SAYS HIRING EXCEEDS PLEDGE
MONEY
FORD EXECUTIVE SAYS HIRING EXCEEDS PLEDGE
148 words
1 May 2014
USAT
FINAL
B.1
English
Ford Motor now expects to exceed its commitment to the United Auto Workers to hire 12,000 workers by 2015,
says Joe Hinrichs, Ford's president of the Americas. "The business has grown faster than we predicted it would in
2011," he told Bloomberg News. Ford says it has hired about 9,000 workers since the UAWcontract was signed in
2011.
Southwest Airlines CEO vows more on-time flights
Southwest Airlines ranked 12th out of 16 big U.S. carriers for most on-time flights last year, and CEO Gary Kelly
isn't happy about it. "We've got significant schedule changes that are planned for summer," Kelly said
Wednesday. "We need to get back to where we were in 2012." About 83% of Southwest's flights arrived on time
in 2012, compared with almost 77% last year.
photo Bloomberg News

Document USAT000020140501ea510005l

Goodbye Econoline, hello Transit ; New van to offer 3 lengths, 3 heights
MONEY
Goodbye Econoline, hello Transit ; New van to offer 3 lengths, 3 heights
James R Healey,; Fred Meier
James R. Healey, and Fred Meier, USA TODAY
630 words
1 May 2014
USAT
FINAL
B.4
English
You probably don't notice big vans until the repair guy parks one in your driveway, or you catch a ride from the
airport to the hotel.
But they sell in big-enough numbers for big-enough profits that automakers are paying new attention to the
commercial van market.
The big van "is an extremely important product for us," says Joe Hinrichs, head of Ford's operations in North and
South America.
Ford on Wednesday started production of its new Transit van at Claycomo, Mo., near Kansas City. Demonstrating
the importance Ford attaches to the new van, it made a $1.1 billion investment there, mostly to build the Transit,
though some is going to update the plant's F-150 pickup line.
Transit replaces the aging E-series -- also called Econoline and Club Wagon -- that's the USA's best-selling
full-size van and has been for decades. These vans start at roughly $30,000, but the price can balloon because
vans offer an array of features to tailor them to buyers' job needs.
Hinrichs said the Transit will be "competitively" priced, but he wouldn't pledge to hold the current pricing: "There's
a lot more capability" in the Transit to justify a higher price.
Transit -- not to be confused with Ford's smaller Transit Connect van -- will try to vacuum up every possible van
buyer when it hits dealerships this summer by offering three body lengths, two wheelbases, three roof heights and
three engines, including a diesel. It's aimed at fleet buyers as well as tradesmen and others.
Even though Ford dominates the van market, outselling closest rival Chevrolet about two-to-one and others by
nine-to-one, Transit nevertheless hits a tough market. New-design van rivals include the Nissan NV,
Mercedes-Benz Sprinter and Ram ProMaster.
"There are more competitors in the van segment," which is growing with increased business spending, Hinrichs
notes.
It's "the new age of commercial vans," says Eric Lyman, a product expert at TrueCar.com's ALG unit. He says
van buyers now demand more than a box on wheels, including "increased flexibility, functionality, efficiency and
even unique styling."
Ford says Transit's bona fides include an interior tall enough for a 6'8" person to stand, as much as 487 cubic feet
of cargo space (more than four times that of a full-size SUV) and capacity of up to 4,650 pounds (three times that
of a typical full-size pickup). Engines offered: 3.7-liter V-6; 3.5-liter EcoBoost turbocharged V-6 and 3.2-liter V-6
diesel.
The venerable Econoline it replaces first went on sale as a 1961 model, about the time the U.S. and Cuba broke
off diplomatic relations. It evolved from compact van to a full-size rig that some gave shag-carpet and party
amenities in the 1970s. The one you'd buy today still is recognizable as derived from the first modern E-vans in
1975.

That slow pace of change, and a van's simple construction, lets automakers make good profits on vehicles sold in
modest volumes.
To satisfy E-van fans, Ford will continue building that current model through this year. And it will make E-van
cab-chassis and so- called cutaway versions through the decade, for buyers who convert them into ambulances,
shuttle buses and other heavy uses.
Transit is a new design that Ford sells worldwide. To save money, it was engineered simultaneously with versions
for the U.K., China, Turkey and elsewhere, the "One Ford" concept CEO Alan Mulally emphasizes.
photo Ford

Politics & Ideas: Welcome to the Well-Educated-Barista Economy
Politics & Ideas: Welcome to the Well-Educated-Barista Economy

By William A. Galston
898 words
30 April 2014
J
A13
English
A century ago, Henry Ford startled the world by doubling his workers' wages, with some reaching the unheard-of
level of $5 a day. Although accounts of Ford's motivation differ, his decision fit into a larger context: A
mass-production economy requires a mass-consumption society. In the absence of broad-based, steadily rising
purchasing power, the engine of economic growth will sputter and die.
Fast-forward four decades to the day in the early 1950s that a Ford executive was showing United Auto Workers
President Walter Reuther around a state-of-the-art automated assembly plant. The executive pointed to some
gleaming new machines and asked Reuther, "How are you going to collect union dues from these guys?" Reuther
replied, "How are you going to get them to buy Fords?" News accounts record no answer to either question; nor
do the ensuing 60 years.
This brings us to the present day -- to a slow-motion recovery that thus far has left millions of Americans
unemployed or underemployed and millions more outside the workforce. One key reason for this sluggish
performance is a housing industry that is falling far short of a normal rebound from recessionary lows. Economists
estimate that long-term demand for new housing units should average about 1.5 million a year. After overshooting
badly between 2000 and 2006, the market collapsed to barely half a million by 2009. New housing starts have
increased since then to an annual rate of just under one million, far below long-term trends. According to Neil
Irwin of the New York Times, investment in new residential property today represents a smaller share of the U.S.
economy than at any other time since World War II. If it returned merely to its postwar average share, growth
would jump by 2%, adding 1.5 million jobs and knocking a full point off the unemployment rate.
So why aren't there more housing starts? Answer: Because new households are forming at less than 40% of the
normal rate. Young adults are living with their parents at much higher rates than before the Great Recession.
Many cannot afford monthly rental costs, let alone come up with the down payments they need to qualify for
mortgages.
This reflects the continuing travails of young adults in a slack labor market. Among recent college graduates ages
20 to 29, the Bureau of Labor Statistics reports, unemployment stands at 10.9%, more than three points higher
than in 2007. A study from the Federal Reserve Bank of New York finds that of the recent college graduates who
have managed to find work, more than 40% are in jobs that do not require a college degree; more than 20% are
working only part-time; and more than 20% are in low-wage jobs.
They are not alone. A recent report from the National Employment Law Project found that low-wage sectors such
as food services and retail trade accounted for only 22% of jobs lost during the Great Recession but fully 44% of
jobs gained since the bottom. Mid-wage jobs accounted for 37% of losses but only 26% of gains; higher-wage
jobs, 41% of losses but only 30% of gains. The wage structure of the entire economy has shifted downward since
the Great Recession, and young adults trying to start careers and families have been the principal, but hardly the
only, victims.
These developments are jarring. For the past generation we've been telling ourselves and our children that
demand for higher-order skills is surging and that a college education is the key to the future. But recent research
by three Canadian economists calls this proposition into question. Paul Beaudry and David Green of the
University of British Columbia and Benjamin Sand of York University document a declining demand for
high-skilled workers since 2000. In response, they say, "high-skilled workers have moved down the occupational
ladder and have begun to perform jobs traditionally performed by lower-skilled workers, . . . pushing low-skilled
workers even further down the occupational ladder and, to some degree, out of the labor force altogether."
Well-educated baristas and unemployed high-school graduates are flip-sides of the same phenomenon.
To explain this, Messrs. Beaudry, Green and Sand argue that as the IT revolution matures, the demand for
advanced cognitive skill cools relative to the preceding investment stage, as it has with the maturing of every
preceding general-purpose technology. That's plausible, but so is the even more troubling hypothesis that IT can
replace an ever-widening range of higher-skilled workers with less-educated individuals using systems whose
inner workings they cannot begin to fathom.
If correct, these economists' work turns conventional wisdom on its head. It would imply that our wage and
employment woes are structural as well as cyclical -- that in tandem with the global market for labor, the IT
revolution has permanently transformed the U.S. labor market by suppressing the growth of purchasing power on
which the economy depends. Responding to this new reality would challenge the innovative capacity of a political
system that is hard-pressed to discharge even its most routine obligations.
(See related letter: "Letters to the Editor: Baristas and Government Enablers" -- WSJ May 7, 2014)
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Vintage Defenders on the prowl ; Entrepreneur gives old Land Rovers expert TLC
MONEY
Vintage Defenders on the prowl ; Entrepreneur gives old Land Rovers expert TLC
Chris Woodyard
Chris Woodyard, @ChrisWoodyard, USA TODAY
924 words
29 April 2014
USAT
FINAL
B.3
English
In an era when automotive luxury usually means the sleekest of sedans or crossovers, an entrepreneur here is
offering a different kind of status vehicle, a rugged off-roader more at home fording the Ganges than crawling
through the drive-through at Wendy's.
Matt Perlman has made a business out of importing and refurbishing vintage Land Rover Defenders, the British
truck perhaps best known as a vehicle of choice for African safaris. It is a rugged, easy-to-fix vehicle that is no
longer sold in the U.S.
Nonetheless, Perlman says that since opening last year, his West Coast Defenders has refurbished and sold
more than 30 mid-1980s Defenders at prices from $95,000 to $110,000, depending on condition and body type.
At any given time, a bevy are packed into the rear lot of his garage in this motoring metropolis' tony west side.
"Our main goal is to keep them as authentic as possible while bringing them into the 21st century," Perlman says.
After tracking down good prospects in Europe, Africa or Asia, he goes through them looking for anything that
needs to be fixed and adding comforts the new owners want -- whether it's automatic transmissions, a more
forgiving suspension or a navigation system. His profit varies widely, based on the cost of the base vehicle and
the work it needs, but he tries to keep it "around the $10,000 range."
Even Defenders in rough condition don't deter him if the underpinnings are sound. "The chassis is really all that
matters," he says.
Buyers are typically like Perlman, drivers who want a vehicle that stands out from the crowd.
They are being snapped up by luxury buyers who want to appear to be more into the rugged image than into
making full use of the Defender's off-road prowess. They do, after all, show up with celebrities and royalty.
Angelina Jolie drove one in a movie as fictional explorer Lara Croft. Queen Elizabeth, when not in crown and
gown, is seen in her Defender on her country estates.
"I love getting people into these cars," Perlman, 29, says. Though it may look primitive, "It's an easy car to drive."
Because the no-nonsense vehicle was built for work in the most primitive places, it is full of exposed bolts that
make parts easily replaceable -- or, parts are unavailable, easy to jury-rig. "With five tools, you could take the
whole car apart," Perlman says.
It's that kind of British can-do that made a name for Land Rover long before it was associated in the U.S. almost
entirely with the plush Range Rover. Nothing was ever fancy about Defender. It was simply called the Land Rover
90 or 110 -- denoting the length of the wheelbase -- until 1990, when the Defender name was created, says Bob
Burns, a Land Rover events manager who has kept on eye on the Defender in his 27 years with the company.
Rover and successor British Leyland sold Land Rovers in the U.S. from the 1950s through 1974. Then the brand
was pulled out of the U.S. and didn't return until 1987, Burns says, with the super-luxe Range Rover that found
instant appeal among executives and celebrities for its comforts and rugged heritage.
Revival short-lived
But the Defender didn't reappear until 1993 when 500 were imported to the U.S. to try to revive the model. In
each of the following model years, 1994 and 1995, the company, then owned by BMW, brought in about 5,000.
By 1996, Defenders could no longer meet toughening emissions requirements in the U.S., and they weren't sold
for that model year. A few were imported for the 1997 model year, but Land Rover stopped selling them
altogether because the relatively small sales value could not justify a list of other costly modifications required by
U.S. law, says Burns.
The Defender continues to be sold elsewhere in the world, and Land Rover -- now owned by India's Tata -- hasn't
shut the door on reintroducing the model. "It's always on our radar," Burns says.
Perlman sticks to mid-1980s models because they can be brought in under U.S. import laws and require less
modification to be legal on U.S. roads. Finding suitable vehicles has so far been tougher than finding customers.
The thrill of the hunt
A car fancier, Perlman says he was first attracted to the Defender at age 15. Later, he was a lawyer driving a
BMW, when he decided to act on his longtime fondness for Defenders, tracking down his first one in Alabama.
Soon, his friends were asking about them, and he started finding more.
The thrill of the hunt continues as part of the new business. "My favorite part of this is finding the vehicles," he
says.
They come in all types. There are hardtops and those with removable roofs. Some have benches in the rear,
others have a pickup bed. One Defender he brought from Texas had a snorkel -- a breathing tube mounted next
to the front roof pillar so that the engine could suck air while fender-deep fording rivers.
Is Perlman's redoing of classic Defenders a solid business idea?
"He's absolutely on to something," says Burns. "They aren't making any more of them."
photo Land Rover

Document USAT000020140429ea4t00001

New Vehicles and Recalls Cut Ford Profit

New Vehicles and Recalls Cut Ford Profit
By BILL VLASIC
844 words
26 April 2014
The New York Times
NYTF
3
English
DETROIT -- The rising tide of recalls has made it more expensive for automakers to do business, even in the
absence of a major crisis like the ignition switch recall at General Motors.
Ford Motor said on Friday that its net income in the first quarter dropped 39 percent, partly because the company
needed to set aside more money for potential recalls and other service work for older vehicles.
Ford, the nation's second-largest carmaker after G.M., said it earned $989 million, or 24 cents a share, in the first
quarter, down from $1.61 billion, or 40 cents a share, in the period a year earlier.
The company said that a big factor in the decline was its decision to increase its warranty reserves by $400
million, $350 million of which was targeted for recalls and other service work it expected to perform in the future
on 2008-13 model cars and trucks.
The balance of the warranty expense is for current recalls on even older vehicles.
Robert L. Shanks, Ford's chief financial officer, said the increasing number of recalls and customer service
programs made it necessary to increase the reserves.
''What's unusual is that we had a need for such a large increase in the reserve,'' he said in an interview. ''We have
had more recalls than we would have had based on our previous history.''
Ford recalled 1.2 million vehicles in the United States in 2013, according to the National Highway Traffic Safety
Administration, making it No. 5 in recalls among automakers.
Ford's recall issues are minor in comparison to those at G.M., which spent $1.3 billion in the first quarter to cover
costs associated with recalling nearly seven million vehicles this year, including 2.6 million small cars for defective
ignition switches that it has linked to 13 deaths.
But recalls are up industrywide, partly because more companies are choosing to do voluntary recalls before
federal regulators begin investigations. In addition, automakers are doing more repairs to fix quality problems with
a wide array of new software and technology installed in cars.
''Based on history, we expect that at some point in time a certain number of field service actions and recalls,'' Mr.
Shanks said.
The warranty reserve expenses were among a handful of nonrecurring costs that cut into Ford's profits. The
company also said it spent $100 million on production problems related to severe weather during the quarter.
And Ford took a $122 million charge for restructuring costs in Europe, where it is downsizing operations to better
meet shrinking demand for new vehicles.
Over all, Ford is asking investors for patience this year as it spends heavily to bring out 23 new products,
including the first aluminum-body pickup truck.
Alan R. Mulally, Ford's chief executive, called the company's first-quarter results solid, and noted that the
automaker was expanding its Asian operations as well as revamping its product lineup in North America and
Europe. ''This year we will have the most product launches in our history,'' Mr. Mulally told analysts in a
conference call.
He did not, however, offer any new information about his plans for retirement.
People with knowledge of Ford's succession plans have said that Mark Fields, the company's chief operating
officer, has been picked to replace Mr. Mulally as chief executive.
Mr. Mulally has previously said he will remain in his job through the end of 2014, and he declined to comment
Friday on whether he would leave earlier.
''We don't comment on speculation, and we have no change to the plan,'' he said.
Despite the additional warranty costs, Ford's core North American business was still its prime source of profits in
the quarter. The company reported a pretax profit of $1.5 billion in the region, down from $2.39 billion a year ago.
But results were mixed in its international divisions. In the Asia-Pacific division, where Ford is rapidly adding
production capacity, the company earned a pretax profit of $291 million. Last year, it had a $28 million loss.
Ford cut its losses in Europe, where it is closing factories in an effort to be profitable by 2015. The company said
that it had a pretax loss of $194 million during the quarter in Europe, compared with a loss of $425 million a year
ago.
Unfavorable exchange rates hurt Ford's performance in South America, where it reported a pretax loss of $510
million -- more than double its loss of $218 million in the same period in 2013.
The company's overall revenue was $35.9 billion during the quarter, nearly the same as the $35.6 billion a year
ago. Ford sold 1.59 million vehicles during the quarter, compared with 1.5 million in that period last year.
Alan R. Mulally, Ford's chief executive, with a Mustang at the Auto China show on Sunday. (PHOTOGRAPH BY
NG HAN GUAN/ASSOCIATED PRESS)
Document NYTF000020140426ea4q0004g

Corporate News: Ford Profit Falls on Warranty Costs --- Car Maker Sets Aside $400 Million for Repairs; Results Hit by South America Loss...
Corporate News: Ford Profit Falls on Warranty Costs --- Car Maker Sets Aside $400 Million for Repairs;
Results Hit by South America Loss, Europe Charge
By Mike Ramsey
723 words
26 April 2014
J
B3
English
DEARBORN, Mich. -- Ford Motor Co., largely untainted by the big safety recalls affecting rivals, said its
first-quarter net income fell 39% in part because it expects to spend more to recall and fix defective vehicles.
The nation's second-largest auto maker didn't disclose any new recalls or identify models that would require
repairs. However, it is boosting its warranty reserves by $400 million after a review of repair claims and new
pressures on the auto industry to address customer complaints.
Ford said it put money aside to fix quality problems in vehicles made between 2008 and 2013 as well as some
older models. General Motors Co. on Thursday said recall costs took a $1.3 billion bite out of its first quarter
profits.
"We have seen more recalls at Ford, and across the whole industry, and as that has occurred we have had to
look at our reserves and adjusted them," said Bob Shanks, chief financial officer. "It's not related to anything
specific; it's based on [warranty] data and what we anticipate could happen."
Ford shares fell 3.3% to $15.78 in 4 p.m. trading on Friday.
The auto maker said first-quarter net income dropped to $989 million, or 24 cents a share, from $1.60 billion, or
40 cents a share, in the year earlier quarter. In addition to higher warranty costs, net was hurt by a wider loss in
South America and a charge for restructuring in its European operation.
Revenue rose slightly in the first quarter to $35.9 billion from $35.6 billion a year earlier. Wholesale deliveries rose
6% to 1.6 million vehicles.
Despite missing Wall Street forecasts for the quarter, Ford affirmed a forecast for pretax profit of between $7
billion and $8 billion for the full year, down from $8.6 billion in 2013. It previously said this year's results would be
hit by costs of launching 23 new models, including a re-engineered version of its best-selling vehicle, the F-150
pickup truck. Mr. Shanks said the following three quarters of the year would be "substantially stronger" than the
first quarter.
Recalls have been on the rise over the past several years as auto makers have become quicker to repair
vehicles. Car makers this year were jolted by a $1.2 billion settlement Toyota Motor Corp. struck to settle federal
criminal charges stemming from its failure to promptly recall vehicles after complaints of sudden acceleration.
Ford is starting to see strong results from its Asian operations, which posted a pretax profit of $291 million, a
record high. Its Chinese sales increased 45% in the quarter benefiting from the company's success with small
cars and compact sport-utility vehicles.
Mr. Shanks said the economic outlook in South America is worsening, primarily because of a currency
devaluation in Argentina and a general economic slowdown in Brazil. In South America, Ford's pretax losses
widened to $510 million from $218 million.
Improving conditions in Western Europe have reduced losses there, though Russia's economy is slowing, and the
company has temporarily idled some production there. Ford's European unit posted an operating loss of $194
million, compared with a $425 million deficit a year ago. Its European results include a $122 million charge to
earnings, mostly for severance costs.

In North America, its largest market, pretax profits fell 36% to $1.5 billion, reflecting weaker sales, lower prices
and a mix shift to less profitable models.
Ford Chief Executive Alan Mulally deflected questions about whether he plans to leave the company earlier than
the end of this year. Ford in late 2012 that he would stay through 2014, but earlier this week, people familiar with
the matter said he would leave before year end. Mr. Mulally said only that there was "no change to the plan."
Ford's pretax profit fell 36% to $1.38 billion, or 25 cents a share, below analysts' 31-cent estimate. Despite lower
earnings, Ford generated $2 billion in net cash in the quarter, in part because the higher warranty reserve isn't a
cash expense.
Document J000000020140426ea4q00040

Corporate News -- The Upshot: China Lures More Investment --- Foreign Car Makers Keep Building More Factories, Models and Dealerships
Corporate News -- The Upshot: China Lures More Investment --- Foreign Car Makers Keep Building More
Factories, Models and Dealerships
By Joseph B White
1,075 words
25 April 2014
J
B5
English
China's economic growth may be slowing, but for global auto makers, the Middle Kingdom is still the land of
opportunity.
Top executives of the world's largest auto makers spent Easter weekend at Beijing's big auto show pledging
allegiance to the world's largest car market, outlining billions in new investments for factories and technical
centers, and hawking new models tailored for the country's affluent young.
This year's Beijing show marked the official end of China's days as a developing market and the beginning of a
new era in the world's largest car market.
It has been obvious for some time that China's major cities don't fit the developing-market label. Beijing's modern
office towers, opulent hotels and all-day rush-hour traffic deliver a very passable imitation of Los Angeles, albeit
with far worse smog. The Chinese capital's major thoroughfares teem with stretched Audis, BMWs and
Mercedes-Benzes.
Yes, Beijing still has narrow streets called hutongs where deliveries are made on beat-up tricycles and tiny
three-wheeled cars. But in the Beijing that matters to car makers, consumers prefer rides from globally known
brands, just as they do in Europe or the U.S. By 2020, General Motors Co. President Dan Ammann said during
the show, China will be the world's largest luxury- car market, with 10% of industry sales in that category. Others
echoed his view.
To the industry's delight, upper middle-class Chinese have over the past two years embraced American-style
sport-utility vehicles with a relish, boosting sales and profits for companies such as Ford that caught the wave
early and confounding government policies aimed at cutting gasoline consumption.
Now, industry executives are shifting their efforts in China's megacities from selling consumers their first cars to
installing the machinery used in the U.S. to lock them in as repeat buyers.
Mercedes-Benz, for example, used the Beijing show to launch a new financing product that mimics the lease
deals that account for nearly half of luxury-vehicle deliveries in the U.S., according to Edmunds.com. Volkswagen
AG's Audi brand also is encouraging dealers to start marketing certified used vehicles -- the better to assure
strong resale values that in turn make lower-priced leases on new vehicles possible.
This sounds simple enough, but Chinese consumers still dislike debt and mistrust secondhand cars. China is only
now getting used-car pricing services such as the online Kelley Blue Book.
Used-car sales are just 10% of the volume of overall new-car sales, says Jim Farley, Ford Motor Co.'s head of
world-wide sales and marketing. He predicts that the used-car market in China will develop differently from the
U.S., and could become dominated by retailers that specialize in used cars, not by franchised new-car dealers.
Meanwhile, more cities are starting to clamp down on new-vehicle registrations -- rendering the markets mature
by fiat if not in fact. That is one reason why Western auto executives are forging into what are known in China as
tier two, three and four cities -- mainly inland metropolitan areas few Americans recognize, but which are larger
than all but the largest cities in the U.S. or Western Europe.
Ford's Lincoln luxury-car brand said last week that by 2016 it wants to have 60 dealerships in 50 Chinese cities,
many of them second- or third-tier markets. Wherever Lincoln goes, its rivals likely will be already.
"There is more opportunity in tier two and tier three markets than in tier one," said GM China President Matt Tsien.
Auto executives are counting on an expansion of China's middle class. By 2020, 51% of Chinese families could
have disposable income of 106,000 to 229,000 yuan, or roughly $17,000 to $37,000, up from 6% in that income
band in 2010, according to McKinsey & Co.
Western auto executives are starry-eyed about the huge cohort of young Chinese consumers now entering their
car-buying years. Some 128 million Chinese were between the ages of 20 and 24 three years ago, says Yale
Zhang of Automotive Foresight, a Shanghai market-research company. Nissan Motor Co.'s chief planning officer,
Andy Palmer, puts the Chinese youth market at 240 million -- double the population of Japan.
Call them the Transformers Generation. GM's launch party for the new Chevrolet Trax SUV, staged at Beijing's
Olympic Park, was heavy with imagery from the "Transformers" video franchise. GM landed the little SUV a
cameo in the coming fourth installment of the movie series.
With luck, China's Transformers Generation will come to like the same types of cars that American and European
youth prefer. Car makers with headquarters in Detroit or Germany would do well to keep pace with Chinese
tastes -- and shift global management focus and capital investment even more decisively toward the desires of
the Chinese middle class.
The maturation of the Chinese car market is prompting talk that the Chinese government should allow global auto
makers to do business without forced marriages to domestic state-owned auto makers. These alliances do
produce strange fruit such as a Volkswagen factory in impoverished Xinjiang, far from both markets and supply
lines and GM and state-owned partner Shanghai Automotive Industries Corp. launching a brand in 2010 called
Baojun to fulfill a requirement that Western auto makers transfer more technology to their Chinese counterparts.
But if global auto makers want the freedom to go it alone, they don't say so in public. GM's Mr. Ammann
sidestepped the issue during a session with the media, saying it was "hard to address a hypothetical."
For the Chinese government, using joint ventures to develop competitive Chinese auto makers is a cornerstone of
industrial policy and generates lots of cash besides. Of course, the global manufacturers will keep on investing in
China regardless of the debate and content themselves that half a loaf is better than none, especially when the
loaf is so very, very big.
---
Joseph B. White is The Wall Street Journal's Global Auto Editor. The Upshot is a column by bureau chiefs around
the world offering timely analysis of the industries they cover.
Document J000000020140425ea4p0003t

Rail Logjam Leaves Some New Cars At Factories
Rail Logjam Leaves Some New Cars At Factories

By Christina Rogers, Bob Tita and Betsy Morris
989 words
24 April 2014
J
B1
English
New cars and trucks -- including some of the season's hottest sellers -- are stacked up outside U.S. factories as
auto makers and railroads struggle to overcome delays brought on by winter weather and the rise of production
outside the Midwest.
The logjams have left dealers short of some popular models, such as the Ford Explorer sport-utility vehicle and
Toyota RAV4, ahead of the biggest months of the year for new-car sales.
John Medved, owner of Denver-based Medved Autoplex, said he has had trouble getting timely shipments of the
midwest-built Ford Explorer and F-150 Raptor SVT pickup. After six weeks of waiting, he says, they're just coming
in now.
"It's been frustrating," Mr. Medved said. "I could have sold those Raptors eight times over if I had them on the lot."
Lost car and truck sales are another example of widespread fallout from U.S. rail traffic snarls. Farmers, grain
elevators, and coal and ethanol shippers have all been hurt. Snowy, frigid weather and rising grain and coal
shipment forced railroads to run shorter trains and more of them, clogging routes through Illinois, Michigan and
southern Ontario.
Service is improving and eventually will be back to normal, the railroads and many auto makers say. However,
some shippers believe the problems could linger, aggravated by a booming crude-by-rail business that barely
existed five years ago and is crowding the rails. Other factors include the growth of U.S. auto exports, which
means more vehicles are heading to coastal ports and returning empty, the rise of Mexico as a car production
powerhouse, and the scrapping of rail car carriers during the recession.
Railroads believe the weather is to blame. "Think of it as a conveyor belt: Detroit to New York and back," said
Michael Ward, chief executive of CSX Corp. "That whole cycle is disrupted right now." He expects it will ease
through the second quarter. U.S. auto sales are up and most dealer inventories are healthy for this time of year.
"Before this winter, there was no issue of moving all the autos they [auto companies] wanted to move," Mr. Ward
said.
The concern some shippers have is longer-term equipment availability and new production hubs that require rail
cars. When the auto industry began shrinking in 2008, the size of the auto rail car fleet did too. Investments in
new auto carriers haven't been enough to replace those taken out of service and scrapped, according to industry
data.
Now, demand for new cars has bounced back and auto production is surging, especially in areas such as Mexico
and the U.S. South. Yet the size of the auto carrier fleet remains near a 10-year low, and the pattern of moving
U.S.-made vehicles to the coasts and returning with Japanese cars no longer works. Empty rail cars are shipped
to Mexico and diverted to Georgia, Mississippi and Tennessee, creating longer trips.
"Mexico is not a huge" market for U.S.-made autos, said Dick Tierney, a vice president at Oregon-based rail car
manufacturer The Greenbrier Cos. "It's just adding to cycle times and that means that the fleet has to be larger."
Many shippers in the northern U.S. and Canada have been suffering severe rail delays and suspect crude oil is
part of the reason. "The railroads are really busy right now with the shale oil coming out of the Bakken area and
coal, because of the winter, coming out of Wyoming," said Charles Clowdis, a transportation analyst with
researcher IHS Global Insight. "And we are anticipating a huge grain crop."

Ben Shain, director of logistics for Nissan North America, predicts that even after weather-related problems
subside getting enough rail cars to handle auto deliveries will continue to be a problem. "We're going to be faced
with this for the next several years as we deal with returning total [auto] industry volume," he said.
Ford Motor Co. says nearly all of its vehicle backlogs have now cleared, but other manufacturers are still having
trouble getting new cars to dealers. GM says rail congestion has stacked up vehicles at plants in the U.S. and
Canada. Honda Motor Co., Toyota Motor Corp., Nissan and Fiat Chrysler Automotive NV have turned to trucking
to offset rail delays.
Normally, about 80% of new cars are transported by rail; trucking is typically used for distances under 300 miles.
Joe Hinrichs, Ford's president for the Americas, said the railcar shortage this year was worse than in years past.
"Every year, in the first quarter, we get tight on railcars but this year it was more pronounced than usual because
of the weather," he said.
Dennis Manns, assistant vice president of logistics at American Honda Motor Co., said: "We've had days on top
of days where we have not had equipment" to transport cars, he said.
The Association of American Railroads said the current number of finished automobiles on the ground awaiting
rail transport is 158,138 -- more than two times the industry's target number of 69,312. At the beginning of April,
the inventory was more than 182,000.
Auto makers expect the rail traffic to smooth out as the weather improves, and two railroads expect their traffic
problems to ease in the second quarter. Still, "we think it's going to be early summer, maybe past that, before we
really work past all this," Mr. Manns said.
The estimated 53,000 auto carriers in service is up from a decade low of 52,806 in 2012 -- but far from a high of
58,239 cars in 2009, according to the Association of American Railroads. Industry experts estimate that utilization
of the carrier fleet is likely above 90% already.
Document J000000020140424ea4o0002s

30,000 Golf Carts and 4,000 Heavy Duty Ford Trucks Recalled

30,000 Golf Carts and 4,000 Heavy Duty Ford Trucks Recalled
423 words
23 April 2014
The New York Times
NYTF
English
About 30,000 golf carts and buggies are being recalled because the steering wheel may be loose, according to
the Consumer Product Safety Commission. Ford is recalling almost 4,000 of its heavy-duty pickup trucks because
they might go into reverse when the driver wants to move forward.
The cart recall covers E-Z-GO, Cushman and Bad Boy Buggies models that were sold from August 2012 to
February 2013 and were manufactured by the E-Z-GO Division of Textron, which is based in Augusta, Ga. The
company said it was aware of one injury -- a chipped tooth -- after an out-of-control vehicle ran over a curb.
In a news release, the Consumer Product Safety Commission said the recalled models affected by the recall were
E-Z-GO TXT Fleet golf carts; E-Z-GO Freedom TXT, Shuttle 2+2 TXT and Valor personal golf carts, all with one
bench seat and one rear-facing seat; E-Z-GO Express carts with two bench seats and one rear-facing seat;
E-Z-GO Terrain carts with a cargo bed; Cushman Shuttle vehicles and Bad Boy Buggies HD, LD, LTO, and LT
Safari utility vehicles.
Small, off-highway vehicles such as golf carts are regulated by the Consumer Product Safety Commission, not
the National Highway Traffic Safety Administration, which is responsible for cars and trucks.
The Ford recall covers 2015 F-250, F-350, F-450 and F-550 trucks equipped with 6.2-liter gasoline or 6.7-liter
diesel V8 engines and 6-speed automatic transmissions. In a report, Ford told N.H.T.S.A. that a software error
could cause the transmission to stay in reverse when the driver shifts into drive, even though the indicator says
the transmission is in drive. But Ford said this would happen for only ''up to 1.5 seconds'' before settling on the
proper, forward gear.
The automaker said it learned of the problem at the assembly plant and was not aware of any accidents or
injuries related to it. Ford described the recall as voluntary, although under federal regulations once an automaker
is aware of a safety problem it must -- within five business days -- inform the safety agency of its plan for a recall
or face a civil penalty. In its report to the agency, Ford also said it did not intend to issue a news release about the
recall.
Document NYTF000020140423ea4n0002y

Mulally vs. Piketty
Business World
Mulally vs. Piketty
By Holman W. Jenkins, Jr.
908 words
23 April 2014
J
A13
English
When the legend becomes fact, print the legend. CEO Alan Mulally is destined in the popular mind to receive
credit for saving Ford from having to be bailed out by the federal government. And that's OK.
Credit actually belongs to Bill Ford, his chief financial officer at the time, and the Ford family. They preferred
putting everything in hock rather than reaching out to Toyota or another foreign partner. The financial markets
were still open at the time. Ford hit its rough patch before the housing boom had a chance to become the housing
bust.
Recruiting Mr. Mulally was part of their solution, not the ultimate cause of it. Ford was set with a new CEO and
$23 billion in bank loans when GM and Chrysler were caught in the post-Lehman backwash. Mr. Mulally surely
played his part brilliantly. He reorganized the company around a single global game plan, reinforced by his
relentlessly upbeat management inquisitions.
Mr. Mulally, we learned on Monday, will retire around midyear, to be replaced by Mark Fields. He will depart one
of the most lavishly compensated executives in recent memory. Yet even the auto-workers union won't gripe too
loudly.
In "Capital in the Twenty-First Century," the Thomas Piketty book so adulated by liberals, the French economist
argues that capitalism is innately flawed by a rich-get-richer, everybody-else-stagnates dynamic that has stayed
hidden for the past half century by serendipitous factors. Somewhat disconsolately for his story, though, the U.S.
has exhibited the wrong kind of income inequality, caused not by rising inheritances of the idle rich but soaring
"labor earnings" of the managerial class, which he attributes to self-dealing by executives and boards.
Mr. Piketty, ironically, misses an opportunity here. Executive compensation is better understood as executive
incentive: Wealth holders carve off a small bit of their holdings to share with their hirelings to give them the
incentives desired by the wealth holders. This is perfectly consistent with his larger claim, or would be if Mr.
Piketty's economics was not strangely devoid of incentives.
Boards have no reason to economize on CEOs. The money they save wouldn't go into their pockets (as it
shouldn't). The sum is trivial to shareholders in relation to the market cap and stock price that shareholders care
about. Plenty of applicants would do the job for less money, but boards would be crazy to settle for a subpar
candidate just to save on executive pay.
Mr. Mulally was an outsider. He didn't control the board that gave him his contract; the board was controlled by a
Ford, heir to the founder. Private-equity firms dominated by wealthy sole proprietors also have been known to
write lucrative contracts for the hired CEOs of their portfolio companies. Private-equity honchos aren't controlled
by the executives they hire.
Mr. Piketty insists that executive competence is hard to measure and there's no evidence that managers deserve
their stock options and golden parachutes. But "deserves" has nothing to do with the function such payments
have in our system. Thus a signal phenomenon of our age gets a fundamentally trivial analysis from one of our
supposedly deepest economists. Mr. Piketty and friends simply like their explanation of CEO pay too much to
think too hard about it.
A similar condition seems to burden the many idolaters of his celebrated book. He argues that capitalism's true
nature is to produce stagnation for the masses and ever-concentrating wealth in the hands of the heirs and
heiresses. Such is the ineluctable outcome when inherited wealth earns its natural (he says) 5% return in an
economy where growth is naturally stuck at 1% except when extraordinary demographic and historical events
intervene.
He may be right about our slow-growth future, but his faith in taxation to correct the imbalances and
consequences of stagnation is excessive. The 70% top income-tax rate that once prevailed in the U.S. was not a
great leveler. It did more to empower politicians and special interests -- who busied themselves creating
loopholes for llama farms and soft porn movies -- than it did for the average earner. And his equation of wealth
with capital overlooks that much stock-market wealth is likely to evaporate in the face of his confiscatory agenda.
His liberal fans, though, are so delighted by his afflict-the-rich nostrums they fail to notice his book leaves them
nothing to offer the mass of voters except little hope and lots of recrimination. Making capital the enemy will
hardly improve their future. And who says a world in which capital rather than labor produces a growing share of
income must be a dystopian one? In fact, shouldn't it be our ideal? Don't we just assume that nobody on the
bridge in Star Trek needed to work for a living?
A more useful prescription, long before anyone heard of Mr. Piketty and his gloomy novelties, is the prescription
promoted by boring-old Social Security reformers. They've long argued for turning Social Security into a system of
real savings, via private accounts, so every American can become a capital owner and benefit from Mr. Mulally's
incentives too.
(See related letters: "Letters to the Editor: The Economic Witch Doctors Step In" -- WSJ April 29, 2014)
Document J000000020140423ea4n0000r

Mulally's Legacy: Shifting Ford To Stronger Course
Mulally's Legacy: Shifting Ford To Stronger Course

By Neal E. Boudette, Christina Rogers and Joann S. Lublin
1,146 words
22 April 2014
J
B1
English
Alan Mulally arrived at Ford Motor Co. in 2006 with no experience in the auto industry. After eight years at the
helm, the 68 year old Kansan is preparing to retire with a reputation as one of the best chief executives the
industry has seen in a generation.
Ford is making more money than ever in its history -- $42 billion in the past five years. Its market value is more
than $63 billion, an increase of $48 billion since he arrived. The company's cars and trucks sell well around the
world and Mr. Mulally's management style is widely studied and copied.
It wasn't immediately clear where Mr. Mulally might land next, but recently he has been looking West -- away from
gears and metal and toward the technology industry.
He was a candidate to become the next CEO of Microsoft Corp., people familiar with the matter said.
And as long ago as late 2012, he told an acquaintance that Microsoft and Google Inc. were the only companies
he would be interested in leading after eventually retiring from Ford, a person familiar with the matter said.
Mr. Mulally will likely retire before the end of the year and be replaced by Chief Operating Officer Mark Fields,
said another person familiar with the matter.
Ford declined to comment. Asked over the weekend, during a trip to Beijing, about succession planning, Mr.
Mulally said the company hadn't set a date.
When he arrived at Ford after 37 years at Boeing Co., Mr. Mulally broke down regional rivalries that had divided
the company for decades, quietly demanding and rewarding accountability from his lieutenants. Most famously,
he pulled Ford back from the brink of collapse in 2008 and steered the company clear of the government-funded
bankruptcy restructurings that were needed to turn around crosstown rivals General Motors Co. and Chrysler
Group LLC, now part of Fiat Chrysler Automobiles NV.
"The American auto industry should pass the hat and build a statue to Alan," said Michael J. Jackson, chief
executive of AutoNation Inc., a large dealership chain that operates 40 Ford franchises.
Few would have expected that result. Although he had run Boeing's aircraft division, Mr. Mulally had failed to
impress the company's board enough to give him the CEO job in 2005, when directors instead went with an
outsider, Jim McNerney.
A year later, Ford CEO William C. Ford Jr., a great-grandson of Henry Ford, concluded it would be best if his
company, too, handed the reins to an outsider.
The auto maker was losing billions of dollars at the time and burning through cash. It was burdened by huge
costs, a bloated bureaucracy and a collection of poorly performing brands, such as Jaguar, Mercury and Land
Rover.
The company's regional arms were so out of sync that Ford made one Focus compact car in Europe, while the
North American unit made its own small car with the same name out of a different set of parts.
During Mr. Mulally's first month on the job, Ford dramatically mortgaged most of its assets, including its blue oval
logo, to borrow $23.5 billion. That cash helped keep the company afloat during the financial crisis.

Mr. Mulally also changed the way Ford's management team operated. He instituted a weekly meeting where each
manager presenting a report on his areas, coded in green, yellow or red, to show whether business was on
target.
After a few months, Mark Fields -- now Mr. Mulally's designated successor -- confessed that a vehicle program for
a new sport-utility vehicle was "red." Mr. Mulally clapped in response, setting an atmosphere where Ford
executives felt encouraged to air bad news, rather than let problems fester.
Eventually Mr. Mulally formulated a "One Ford" strategy that called for the company to stop producing more
vehicles that it could sell, focus on the Ford brand and make its vehicles more attractive by offering new
technology, adding safety features and improving gas mileage.
Mr. Mulally said in a recent interview that he wasn't worried about the auto maker going back to its old ways.
Rather, he said, he was "excited about the institutionalizing of our management systems inside Ford."
When the financial crisis hit in late 2008, Ford was again suffering big losses, and Mr. Mulally appeared before
Congress with GM's Rick Wagoner and Chrysler's Bob Nardelli to ask for a bailout.
The three CEOs came under withering criticism. After the meeting, Mr. Mulally decided Ford had to do anything it
could to avoid government help. American consumers liked that Ford didn't turn to taxpayers. As sales improved
and cost cuts kicked in, the company surprised the industry by making money in 2009.
Soon, the company began rolling out new models that it had designed to be sold around the world to leverage
economies of scale. In 2011, Ford produced began selling the same Focus in Europe, North America and Asia.
Mr. Mulally's tenure hasn't been perfect. One move that has caused trouble on his watch was Ford's early
adoption of advanced in-car electronics. Ford's system, called My Ford Touch, has proved buggy and frustrating
for some customers and caused Ford's rankings to drop in quality surveys.
In addition, Mr. Mulally's decision to keep the Lincoln brand and stock it with cars made from many of the same
components as less expensive Fords has yet to pay off.
Now, with Mr. Mulally nearing the end of his tenure, Ford is making one of the biggest bets in its history on the
vehicle that drives most of its profit -- the F-150 pickup truck, the top-selling light vehicle in the U.S.
The 2015 model will be made largely of aluminum, the first time a high-volume auto maker has used aluminum for
more than just a small number of parts.
The aluminum alloys do cost more, Mr. Mulally said in the interview, but he said Ford knew over time the cost
would come down. He said the only reason Ford wasn't using the alloys before was that it didn't have enough
volume to justify the extra cost.
Jeff Carlson, owner and president of Glenwood Springs Ford in Colorado, said he met Mr. Mulally shortly after the
executive took over as CEO. At the time, Mr. Carlson was on a dealer group industry-relations committee.
"He had a plan and laid it out for the five us at the meeting," Mr. Carlson said. "He came with one plan and stayed
with one plan, and that continuity of leadership allowed him to manage the company out of dire straits."
---
Mike Ramsey contributed to this article.
Document J000000020140422ea4m00030

Ford's heir apparent set to take the wheel ; Mark Fields to replace popular Alan Mulally
NEWS
Ford's heir apparent set to take the wheel ; Mark Fields to replace popular Alan Mulally
Chris Woodyard
Chris Woodyard, USA TODAY
400 words
22 April 2014
USAT
FINAL
A.1
English
Ford Motor is poised to tap Mark Fields, its chief operating officer, as its new CEO, replacing the popular Alan
Mulally in the latest leadership change among Detroit automakers.
Mulally, a former Boeing executive, is credited with steering Ford clear of the same path to bankruptcy
reorganizations that ensnared Detroit's other two automakers, General Motors and Chrysler Group.
Fields, known for his brash, in-your-face style, will move to the top job in an automaker facing manufacturing
hurdles, like a smooth rollout of the industry's first high-volume aluminum-bodied pickup truck, and global
challenges, like becoming profitable in Europe and catching up to other auto brands in China.
Expectations are that Ford will name Fields, 53, to replace Mulally, 68, this year. News reports Monday said the
announcement may come sooner rather than later. Ford officials refused to confirm the reports on the record.
While Mulally's departure would be termed a retirement, he was heavily in the running to become CEO of
Microsoft a few months ago.
Fields, who distinguished himself as Ford's chief of North, South and Central America operations, became the
leading candidate to replace Mulally last year when he was moved into the automaker's No. 2 job, chief operating
officer.
While Mulally was recognized for seeking loans to bolster Ford's cash reserves before the recession -- saving it
from a bankruptcy filing -- Fields has his own reputation as a turnaround expert. He ran Japan's Mazda, then a
Ford unit, from 2000 to 2002 and reinvigorated it.
Even now as Fields faces such challenges as shaking up Ford's European operations, he will arrive in the top job
with experience under his belt: He was a vice president for Ford of Europe.
Some of the projects that Mulally initiated will be left for his successor to complete.
The country's best-selling vehicle, the F-150 pickup, will be largely made of aluminum instead of steel to save
weight and fuel. But aluminum is a tricky material in which to make vehicles in mass quantities, creating potential
rollout issues.
Another Mulally project has been to reinvigorate the Lincoln brand, trying to move it to the same level as
Mercedes-Benz, BMW and Lexus.
photo Richard Drew, AP

Document USAT000020140422ea4m0000s

Mulally helped Ford fly ; CEO changed automaker's way of doing business
MONEY
Mulally helped Ford fly ; CEO changed automaker's way of doing business
Chris Woodyard; James R Healey
Chris Woodyard and James R. Healey, USA TODAY
850 words
22 April 2014
USAT
FINAL
B.1
English
Alan Mulally, passed over for the top job at Boeing after helping overhaul the plane company, climbed aboard
struggling Ford Motor at the personal invitation of eponymous Chairman and CEO Bill Ford and powered the
automaker through a 180-degree turn back into the black.
Now he's about to retire after about eight years as Ford CEO, becoming a rarity in the auto business -- an auto
CEO who leaves on a high note.
COO Mark Fields is set to become CEO. No shrinking violet, Fields righted Mazda when Ford controlled that
Japanese maker, and moved to the U.S., where he made some tough calls to turn Ford's North and South
American operations back into profit-makers.
Mulally's Kansas-bred aw-shucks public persona and his offer, not entirely facetious, to stop what he was doing
and sell anybody a car or truck, gave Ford an approachability it had lacked.
He will leave the Dearborn, Mich.-based company with a popular line of small and midsize cars, with an array of
alternative-power offerings and two key products in the wings, both radically redone - - the 2015 Mustang and the
2015 aluminum-bodied F-150 pickup.
Ford had the money to develop those because Mulally OK'd a daring plan to mortgage the entire company -- right
down to the big blue oval logo -- to raise money in 2006, just before lenders shut off the taps.
The move allowed Ford to continue developing models on a normal schedule even as rivals had to pull back and
delay new cars and trucks due to lack of money.
That not only kept it in good stead with investors and other stakeholders, but helped it resist the scorn heaped on
companies saved by a government bailout.
His stories about starting in the working world as a supermarket box boy and his folksy manner belied boardroom
toughness.
He became well known at Ford for knocking executives' heads, for rewarding honesty about the status of projects
and for punishing those who tried to hide problems. Above all, he treasured team play.
"Everyone is part of the team, and everyone's contribution is respected, so everyone should participate," he told
consultants McKinsey & Co. in November. "When people feel accountable and included, it is more fun."
A new philosophy
While he'll be best remembered for saving Ford during the roughest stretch for the auto industry since the Great
Depression, his dismantling of the company's way of doing business is a signal achievement.
To get executives to work together, he created a "war room" at Ford's headquarters.
They met each week to review progress and were supposed to mark their portfolios with red, yellow and green
markers to indicate how a project was proceeding.
Mulally told USA TODAY in an interview that, week after week, the managers told him that everything was rosy.
Mulally wasn't buying it: "Guys, we're losing billions."
Fields, now COO, was first to acknowledge some problems in making the tailgate work right on the Ford Edge he
was overseeing.
At Mulally's prodding, the others started offering suggestions, instead of criticism or smug silence.
Eventually, others followed Fields' lead, creating a new sense of teamwork that could be Mulally's greatest
legacy.
His other ongoing contribution: One Ford.
That translates into developing each model just once, making it adaptable to all markets.
For example: When he stepped in, Europe and America each had their own versions of the Focus, built on
different platforms.
Vehicle teams were forced to work together to create single vehicles that could be sold in markets around the
world.
That meant shifting to the same product cycles so that the U.S. Focus was redesigned simultaneously with the
European Focus, for example.
Today, there is one Focus compact with few differences between European and American models. Mustang,
which for generations has been Ford's halo car in America, was redesigned to try to make it appeal to the rest of
the world.
Changing emphasis
Mulally -- who drove a Lexus LS 430 when he joined Ford, and called it the best car in the world -- was frustrated
at all the foreign luxury brands he saw in the corporate garage.
Why wasn't anyone driving a Ford? Worse, he hated the looks of some of the company's key products.
So he pushed for more appealing styling and performance, and wanted more emphasis on the Lincoln luxury
brand as credible rival to the Lexus he used to drive, as well as the top German models.
"The most important thing we can do -- and we're doing -- is to create an exciting, profitably growing Ford," he
said at a USA TODAY CEO Forum.
"We are now competing with the best companies in the world right here in the United States."
photo Michael A. Schwarz, USA TODAY Ford CEO Alan Mulally created a "war room" to get executives to work
together.
Document USAT000020140422ea4m0000o

Corporate News: Ford Boss Reinvented Himself --- Mark Fields Survived a Tough Patch, Now Favored to Lead No. 2 U.S. Car Maker
Corporate News: Ford Boss Reinvented Himself --- Mark Fields Survived a Tough Patch, Now Favored to
Lead No. 2 U.S. Car Maker
By Jeff Bennett and Mike Ramsey
1,042 words
22 April 2014
J
B6
English
The elderly woman sitting quietly at a table beamed as Mark Fields, Ford Motor Co.'s chief operating officer,
finished a speech last week heralding Ford's history at the New York International Auto Show.
Mr. Fields nodded toward his mother, Elinor, after finishing his speech and walked toward a group on the
sidelines. "I can't come to New York and not see my mom," he smiled.
The 53-year-old executive is about to become the leader of the nation's second-largest car maker, but the
boss-to-be is a natural manager known for keeping what's important front and center, whether acknowledging his
mother or arguing, as he did three years ago, for a bigger bonus for Ford production workers.
His easygoing style was developed after a rough patch, say people who have worked with him. Mr. Fields
survived a tough period in the early 2000s that was marked by battles among Ford managers, and adapted to the
company's more collegial tone set by his boss. Today, he mixes good-natured ribbings with a twinge of sarcasm
that is offset by chumminess.
When Mr. Mulally was hired in 2006, few at Ford expected Mr. Fields to last. At the time, he was the head of the
auto maker's North America operations. Plans to quickly overhaul the unit were floundering.
Three months after Mr. Mulally's arrival in 2006, the auto maker posted a $12.6 billion loss. He looked to be
another casualty after dealers and employees learned he was using the corporate jet to fly home during the
weekends to see his family.
Mr. Fields gave up the perk and set about trying to learn from Mr. Mulally. He is enshrined in corporate legend for
once telling Mr. Mulally in an executive meeting that the team was having problems meeting certain goals. The
remarks earned him a round of applause from Mr. Mulally, who felt the gesture went a long way to breaking
through the company's "keep it quiet" culture.
He is expected to soon take over a financially sound company that has jumped ahead of bigger rivals by
constantly introducing new technologies such as its EcoBoost fuel-efficient engines and Sync entertainment while
pushing the envelope in products -- including a largely aluminum pickup truck.
Mr. Mulally stuck with Mr. Fields, nurtured his revised restructuring plan and supported Mr. Fields's call for big
investments in new products. North America, which Mr. Fields ran until 2012, thrived and became Ford's profit
engine.
"He and Alan Mulally have proven that one and one can equal three," said Adam Simms, chief operating officer of
Price Simms Auto Group, who owns a Ford store in Fairfield, Calif.
In 2011, Mr. Fields convinced Mr. Mulally to pay union workers profit-sharing bonuses of $5,000 each, more than
was required under its labor contract, a Ford executive familiar with the matter said. Mr. Fields argued that paying
the bonuses, after Ford finished one of the most profitable years in its history, would win goodwill among the
union's rank and file and ease talks over a new contact later in 2011, this executive said.
"That's indicative of the kind of person Mark is," said Bob Shanks, Ford's chief financial officer, who has worked
directly with Mr. Fields for more than a decade in different roles.

The youngest of three boys, Mr. Fields followed closely in his older brothers' footsteps. The trio all worked at
Abraham & Strauss department store, then part of the Federated Department Stores brand. In high school he
served on student council for three years, the last as vice president.
He followed his brothers to Rutgers University where he majored in economics and joined them at Zeta Psi
fraternity, where he made it to vice president. After he graduated, he followed them to International Business
Machines Corp. before heading to Harvard University for a master's degree in business administration. He chose
to pursue cars instead of Wall Street.
"I always had an affinity for product. I'm not an engineer, so I don't have oil running through my veins, but this
business is all about product and this is where we spend the majority of our time," he said in a recent interview.
Mr. Fields was only 36 when he took his first major position, running Ford's Argentina operations. He quickly
turned it from an operation losing $100 million a year to a slim profit.
Analytical and hardworking, he was sent to Mazda Motor Corp. in 1998 and a year later, at 38, was promoted to
president of the company, which at the time was a third owned by Ford, and had to lead a restructuring and
rebranding effort.
The Japanese company flourished under his management and he was asked to go to run Ford's luxury division,
which then included Jaguar and Land Rover, and later all of Ford's European operations.
As U.S. operations worsened, then Chief Executive Officer Bill Ford Jr. brought Mr. Fields to the U.S. to run North
America and craft a restructuring plan to make the region profitable.
Working with Anne Stevens, who retired in 2006 as chief operating officer, and Mr. Shanks, the current finance
chief, they created the "Way Forward" plan. The dramatic downsizing effort got off to a rough start. The cuts
weren't deep enough. He was criticized for using the company jet to commute to his home in Florida.
Since taking the role as Ford's chief operating officer last December, Mr. Fields has gradually taken on a more
visible role outside the company and began to relax, choosing to engage with reporters and poke fun when the
opportunity strikes.
As a child he collected metal minicars. Mr. Fields is a lifelong runner and fitness buff. The first car he bought was
a 1983 Datsun 280ZX sports car, a vehicle that he never got rid of even after working at Ford and Mazda.
---
Christina Rogers contributed to this article.
Document J000000020140422ea4m00031

Ford Boss Mulally To Exit Early
Ford Boss Mulally To Exit Early

By Mike Ramsey
1,161 words
22 April 2014
J
A1
English
Ford Motor Co. Chief Executive Alan Mulally will leave the company earlier than expected after a more than
seven-year run in which he oversaw a significant expansion of the U.S. auto maker, people familiar with the
matter said.
Mr. Mulally's successor will be Mark Fields, 53 years old, a Ford veteran who survived management turmoil in the
years before Mr. Mulally's 2006 arrival from Boeing Co. Mr. Fields, the company's operating chief, has won praise
along with Mr. Mulally for getting Ford's diverse operations to function as a single business with shared parts,
models and goals.
The move may come as soon as July, the people said. Earlier he said he would remain with Ford through at least
2014. Mr. Mulally, in China for the Beijing International Automotive Exhibition, couldn't be reached on Monday for
comment. Last week, he said: "We've got a great succession plan. We have nothing new to announce on our
succession plan at this point." Ford declined to comment.
A midyear departure would be earlier than previously indicated. One person close to the situation said the
company believes Mr. Fields has proved himself capable in his 15 months as COO. Mr. Mulally also wants to get
started with his post-Ford career, likely serving on corporate boards, this person said.
Mr. Fields is expected to step easily into his new role. He has been running the company's weekly business
review -- Mr. Mulally's signature creation -- for more than a year. He also created his own Wednesday morning
meeting with key executives to regularly receive updates on the company's product launch schedule.
Mr. Mulally, 68, would leave Ford in a good stead: it has a booming business in China, record profit in North
America and a European operation on the mend.
Among Mr. Fields's first challenges will be the new trepidation toward Russia, where the company has invested
hundreds of millions of dollars, as well as currency devaluations in South America that are hurting profit. He also
must manage the rollout of the company's 2015 aluminum F-150 pickup truck, which introduces new production
techniques to Ford's most profitable vehicle.
Mr. Mulally likely will seek "another active engagement as a CEO" or a full-time executive chairman probably at a
major U.S. manufacturer, said Jeffrey Sonnenfeld, a senior associate dean at Yale School of Management who
knows Mr. Mulally.
Mr. Mulally hasn't told the full Ford board what he plans to do next, according to one person familiar with the
company.
Mr. Mulally would leave Ford with some fellow directors still bothered by his protracted flirtation with Microsoft
Corp. over its search for a chief executive last year, this person said. Those directors criticized Mr. Mulally for
allowing the Microsoft courtship to "go on way too long," this person added. "That didn't make the board happy."
Mr. Mulally, a longtime Boeing executive, was the first of a trio of outsiders including Dan Akerson at General
Motors Co. and Sergio Marchionne at Fiat Chrysler Automobiles NV who took over Detroit's big auto makers in
the last decade.
While GM and Chrysler accepted billions of dollars in taxpayer funds to finance their bankruptcy restructurings in
2009, Mr. Mulally and Ford financed a drastic overhaul with a $23.5 billion borrowing completed not long before
the financial markets began to seize up because of the subprime mortgage crisis.
Ford had a net loss of $12.6 billion in 2006, the year Mr. Mulally took over. The North and South America
operations that Mr. Fields was running suffered a pretax loss of $15.3 billion, as revenues plunged by nearly 10%.
Last year, the company's net income was $7.16 billion.
Ford in 2006 sold vehicles under six big-name brands -- Ford, Mercury, Lincoln, Jaguar, Land Rover and Volvo --
and owned British exotic sports car maker Aston Martin.
Mr. Mulally sold the European luxury brands, closed Mercury and sold nearly all of Ford's stake in its longtime
Japanese affiliate Mazda Motors Corp.
By 2012, Ford had just two brands -- Ford and Lincoln -- and reported net income of $5.7 billion. Its stock, which
had traded as low as $1.01 a share in 2008, had rebounded to more than $13 a share. It closed on Monday down
two cents at $15.98.
The timing of Mr. Mulally's departure was reported earlier by Bloomberg News.
Mr. Mulally pushed through the globalization of its products, ensuring that the same products were produced in
every area of the world and backed a $5 billion push into China that is beginning to pay off handsomely today.
Mr. Fields was an early convert to Mr. Mulally's effort to break down Ford's fiefdoms and compel senior
executives to work together to create "One Ford." The slogan stood for a far reaching effort to put most of the
vehicles Ford sold around the world on common architectures, aimed at taking advantage of economies of scale
in purchasing and engineering.
When Mr. Mulally was hired, many speculated that Mr. Fields would be a casualty. Instead, Mr. Fields endeared
himself to Mr. Mulally by being among the first to buy into his business review meetings. Mr. Mulally helped Mr.
Fields execute his restructuring plan and supported Mr. Fields's call for big investments in new products. North
America thrived and became Ford's profit engine.
Since becoming chief operating officer in December 2012, Mr. Fields has gradually taken on a more visible role
outside the company. Inside Ford, he is seen as part of a two-man leadership team with Mr. Shanks.
The pair spent much of 2013 traveling the globe to get acquainted with Ford's far-flung operations, and tend to
play complementary roles for each other, people familiar with the matter said. In meetings, Mr. Shanks tends to
be very direct in putting other executives on the spot, they said.
Mr. Fields has a smoother manner that leavens Mr. Shanks's frankness. "Bob is like Mark's alter ego," one person
said.
In late October, Messrs. Fields and Shanks flew to Shanghai for a review of Ford's Asian operations and its
critical expansion strategy in China.
They landed on a Saturday night and went into an all-day meeting the following day. To ease the burden of
working on a Sunday, they wore jeans and open-collar shirts.
"Mark and Bob are acting like the CEO and CFO," said one person familiar with the China trip. "[Mr.] Mulally is
more and more ceremonial."
During the meeting, Mr. Fields pushed Ford's Asian executives to move faster on launching new models in China
and expanding its physical presence in Southeast Asia. "They want everything tomorrow," said a person familiar
with the trip.
---
Joann S. Lublin contributed to this article.
Document J000000020140422ea4m0002z

A shale-oil boom beckonsin Mexico's danger zone
A-Section
A shale-oil boom beckonsin Mexico's danger zone
Nick Miroff
1,649 words
20 April 2014
The Washington Post
WP
FINAL
A01
English
BATIAL-1 WELL, Mexico - The geological marvel known to Texas oilmen as the Eagle Ford Shale Play is buried
deep underground, but at night you can see its outline from space in a twinkling arc that sweeps south of San
Antonio toward the Rio Grande.
The light radiates from thousands of surface-level gas flares and drilling rigs. It is the glow of one of the most
extravagant oil bonanzas in American history, the result of the drilling technique known as hydraulic fracturing, or
fracking.
Curving south and west, the lights suddenly go black at Mexico's border, as if there were nothing on the other
side.
This is a reflection of politics, not geology. The Eagle Ford shale formation is believed to continue hundreds of
miles into Mexico, where it is known as the Burgos Basin. But while more than 5,400 wells have been sunk on the
Texas side since 2008, Mexico has attempted fewer than 25.
A landmark energy bill approved by Mexico's Congress in December is aimed at correcting this disparity. It has
opened the country's oil industry to private and foreign investment for the first time in 75 years, with the goal of
bringing in new technology, expertise and a risk-taking culture long missing at the state oil monopoly, Pemex.
Lawmakers will be hashing out the nuts and bolts of the law over the coming weeks, but expectations are that
U.S. and other global companies will be able to bid on oil and gas projects by the end of this year, beckoning the
fracking crews across the border - into some of Mexico's most violent areas.
"The United States and Canada are exploiting their shale resources on a massive scale, and we're still in the
prospecting stage," Gustavo Hernandez, the director of exploration and production at Pemex, said in an interview.
"But we believe the volumes we have are enormous."
Pemex estimates that Mexico's shale formations hold the energy equivalent of 60 billion barrels of oil, an amount
exceeding the entire volume the country has pumped out by conventional means since 1904.
Natural gas is thought to be especially plentiful. In a 2013 survey, the U.S. Energy Information Administration
ranked Mexico's reserves of shale gas as the world's sixth-largest after China, Argentina, Algeria, the United
States and Canada.
A glut of gas production in Texas has pushed prices so low that drilling for gas alone is no longer profitable, and
much of it is simply burned off, or "flared," as it comes out of the ground.
Despite Mexico's abundant resources, the country's soaring demand for electricity and meager pipeline
infrastructure have left it dependent on imported gas to cover roughly a third of its needs. In some parts of the
country, natural gas prices are four times as high as those in the United States.
It is one reason Mexican officials say the shale reserves are crucial to the country's economic and energy
development, while advancing the broader goal of "North American energy independence" - making the entire
free-trade zone self-sufficient for its fuel needs. Cross-border pipelines are also being added.

With cheaper gas, Mexico could lower electricity costs at the manufacturing and assembly plants that have
become a pillar of the nation's economy and that are increasingly competitive with China's.
"This is critical to the re-industrialization of North America," said Javier Treviño, the head of the energy
commission in the lower house of Mexico's Congress. "Mexico needs to develop these resources, or else we'll be
left behind."
But the big money is in oil, not gas.
In Texas, fracking on the Eagle Ford Shale Play - "Eagleferd" in local parlance - has triggered an oil rush as rich
as any other in the state's history. After just four years, the formation has surpassed more than a million barrels of
oil per day, making it the second-most productive in the country, after the Permian Basin of West Texas and
ahead of North Dakota's Bakken shale formation.
The shale boom is the main reason the United States is challenging Saudi Arabia and Russia to become the
world's top oil producer. Texas pumps more than a third of U.S. output, and on its own the state would rank as the
world's ninth-largest oil producer.
The surge has transformed long-blighted south Texas towns such as Cotulla, halfway between Laredo and San
Antonio, into places of frenzied construction and quick fortune. A three-bedroom house in town rents for $6,000 a
month, but most oil-field workers - arriving from as far away as Alaska - sleep in RVs and campers.
"You put in a couple years here, and you're set," said Carla Thorton, 31, who drove down with her husband from
Mississippi two years earlier and has lived in a campground ever since. Her husband works "seven 12s," she said
- 12 hours a day, seven days a week.
"If you want to buy a house or a truck, this is how you do it," Thorton said.
Less clear is whether the U.S. contractors who have poured into south Texas would be willing to take their
expertise into Mexico if the money is good enough - or the Eagle Ford ever slows down.
The biggest interest in Mexico's energy overhaul is expected to come from large global companies such as Exxon
Mobil and Shell that have the capital and equipment to hunt the most lucrative prize: huge oil fields deep under
the Gulf of Mexico.
Developing northern Mexico's shale beds could take much longer.
The reason, experts say, is that fracking is a completely different industry, dominated by smaller, independent
companies and nimble contractors that can provide specialized equipment and services at precise moments in
the drilling process.
Mexico has few of these things, and the willingness of foreign companies to test their fortunes in the wilds of its
northern borderlands remains unknown. The region is almost totally lacking in the pipelines, highways and other
infrastructure that spread across south Texas, and Mexico's shale beds sit beneath some of the most lawless
parts of the country.
Then there is the problem of water. Fracking requires huge amounts of it, and northern Mexico is in the grips of a
protracted drought.
Mexican geologists and petroleum engineers say they will worry about water later. They will bring a pipeline from
the sea if they have to, or from wetter coastal regions. The important thing is to first figure out how much oil and
gas they have.
Along a flat, baked expanse of scrubland south of the Mexican border city of Reynosa, Pemex engineers work
alongside a fracking crew of 50 men in bright red roughneck suits that resemble baby pajamas, emblazoned with
the logo of the global oil-field service firm Weatherford International.
The company and other international firms have been working for years in Mexico under the old model, earning a
set fee from Pemex rather than a percentage of production. Once the new law takes effect, foreign operators will
finally get their wish - a chance to obtain licenses to drill on their own.
It is costly, highly technical work. Clustered around the well, Batial-1, are dozens of trucks, noisy generators, acid
vats and storage tanks for the sludgy wastewater coming out of the hole. From a tall crane, engineers feed a

flexible steel tube 8,000 feet into the earth, then angle it 4,000 feet horizontally, allowing them to blast a mix of
water, sand and chemicals at pressures so powerful that the rock shatters, squirting out oil and gas.
"Unless we fracture, this oil doesn't even exist," said Pemex geologist Jose Galicia.
The site is a unique kind of Mexican man camp, where crews work round-the-clock in the company of cattle and
goats browsing along the edge of the fence line. The oil workers have been here more than a month but cannot
leave, not even to go into the nearby town. It's too dangerous.
Like many of the well sites in this part of northern Mexico, the Batial-1 is in Zeta country. The cartel specializes in
kidnapping and extortion, and when Pemex geologists and survey crews need to look for new well sites, they
often travel in the company of a military escort.
A group of Weatherford employees came under fire at their hotel in the nearby town of Ciudad Mier this month
during a cartel gun battle, though none of the workers were hit.
While big oil companies working in countries such as Nigeria and Iraq are used to dealing with such security
threats, the smaller operators that specialize in fracking are not.
"You can hire private security to keep workers safe, but all of that implies cost and slows down business," said
Duncan Wood, an energy expert and the director of the Mexico Institute at the Woodrow Wilson International
Center for Scholars in Washington.
"And if a company has a shipment of supplies hijacked, that's lost time," Wood said. "It's something they wouldn't
have to deal with in Texas."
Industry experts say the current rate of return on the Eagle Ford shale is so high, and the backlog of pending
drilling permits so large, that it may take years for U.S. companies to begin moving crews into Mexico.
"The first step will be getting land in the right places, and the rest of the operation will follow," said Chris Robart, a
consultant at PacWest Consulting Partners in Houston. "It'll depend how interested people are in bringing
equipment over the border."
"That part will be relatively easy," Robart said. "After all, it's not that far."
WP20140420mexshale0420
Document WP00000020140420ea4k0000s

A Mustang Option: Matching Nail Polish
Automobiles; SECT
A Mustang Option: Matching Nail Polish
By TAMARA WARREN
255 words
19 April 2014
The New York Times
NYTF
English
The Ford Motor Company is using a distinct new palette to market the Mustang to women at the New York
International Auto Show: a line of nail polish colors. The Ford Mustang by OPI Collection features six colors
inspired by the 50th anniversary of the car.
Nail artists were set up at tables equipped with nail files and top-coat lacquers to give women, including this
reporter, and several men manicures at the Ford booth on Thursday morning at Jacob K. Javits Convention
Center in Manhattan. Only the pitch-perfect Race Red carries over from the Mustang's paint options. ''Race Red
is an exact match,'' said Suzi Weiss-Fischmann, the co-founder of OPI. ''I'm big on reds.''
The other five colors in the collection are inspired by the motif of Mustang driving rather than paint-chip
replications. ''Some colors don't look good on the hand,'' Ms. Weiss-Fischmann said. I chose a sparkly the Sky's
My Limit turquoise blue for my sample treatment. Queen of the Road black was a close second.
Ms. Weiss-Fischmann visited Ford 's design studios last year to develop the color scheme. She consulted with
Ford designers and marketers to understand the process of paint options on cars. ''They had a great conversation
about color and the science of color,'' said Betsy McKelvey, a Ford marketing manager for brand licensing. The
limited-edition collection goes on sale at retailers and nail salons in July.
Document NYTF000020140419ea4j0002u

Corporate News: Car Makers Woo China's First-Time Buyers --- Stakes Are High for Manufacturers Stepping Up Efforts to Tap Consumer Interest...
Corporate News: Car Makers Woo China's First-Time Buyers --- Stakes Are High for Manufacturers
Stepping Up Efforts to Tap Consumer Interest Despite Signs of Cooling Economic Growth
913 words
19 April 2014
J
B3
English
BEIJING -- As China's economy slows, its role as the biggest growth engine for the global car business depends
on auto makers getting reluctant customers like Yvonne Ge behind the wheel.
"It's too expensive to own a car," said the 29-year-old Shanghai teacher, citing hefty taxes and parking costs. She
once considered buying a car but felt it would be beyond her means: "I'll feel financial pressure if I bought one."
For years, China has been a key sales and profit region for global giants such as Volkswagen AG, General
Motors Co. and Toyota Motor Corp. as demand slowed elsewhere. But Chinese consumers' interest in cars has
shown signs of cooling along with broader economic growth. Meanwhile, a growing number of Chinese cities are
curbing auto sales to fight traffic congestion and pollution.
Auto makers are responding with renewed efforts to convince the reluctant like Ms. Ge that they would look good
in a new car. Global auto executives meeting this weekend at the Beijing International Automotive Exhibition plan
to offer lower-priced cars aimed at the tastes of young, professional Chinese with an eye on the high life.
Honda Motor Co., which is still recovering following an anti-Japanese backlash two years ago, aims to unveil a
new Fit sedan with a price tag beginning at 70,000 yuan ($11,272). GM plans to release a sleeker Chevrolet
Cruze with smaller engines to meet China's call for energy efficiency.
Volkswagen, the largest car maker in China by volume, will unveil five models, including a 40th anniversary
edition of its Golf tailored for Chinese consumers by its joint venture with FAW Group Corp.
The stakes are high. Volkswagen and its Chinese partners will invest 18.2 billion euros ($25.3 billion) through
2018 to increase their annual production capacity in China to more than four million vehicles from 3.3 million.
GM's manufacturing capacity is set to reach five million units annually by 2015.
Last year 17.9 million passenger cars were sold in China, according to industry data.
Passenger-car sales here in the first quarter grew 10% compared with the year-ago period. That rate would
delight car makers in the U.S. and Europe, but it pales in comparison to last year's 16% gain and several times
that earlier in the decade.
Consulting firm IHS Automotive projects a 10% rise in China's passenger-car sales this year and 8% in 2015. "It's
almost certain growth in car sales will slow," said Lin Huaibin, an IHS analyst. "When people feel the pinch of
economic slowdown, they will cut spending."
Many foreign car makers remain optimistic, pointing to the number of new buyers coming to the market. Three out
of four new cars are purchased by first-time buyers, according to research firm J.D. Power and Associates.
"We see new growth coming from third- and fourth-tier cities, as well as the still strong demand for individual
mobility," Jochem Heizmann, chief executive of Volkswagen Group China, said earlier this month, citing
developing cities largely in the country's interior.
VW's first-quarter China sales rose 14.5% from a year ago.
The China heads of GM and Ford Motor Co. also expressed optimism. "We are looking at probably 7% to 10%
growth overall," said GM's Matt Tsien, describing the outlook as steady and sustainable. Ford's John Lawler said:

"We're looking at 2014 as being another solid year for China." GM's first-quarter sales here rose 12.6%, and
Ford's rose 45%.
Foreign car brands are gaining at the expense of local rivals that don't enjoy the same reputation for quality.
The share of Chinese brands in passenger vehicles including minivans fell to less than 39% in the first quarter
from 43% a year earlier, according to the government-backed industry group the China Association of Automobile
Manufacturers.
According to UBS Securities, China's overcapacity in the passenger-vehicle market by 2015 could total about
eight million cars, most of which would be on the books of domestic auto makers. By comparison, globally Ford
produced 6.3 million cars in 2013.
Combined car sales in Japan and South Korea this year are expected to be 7.7 million, according to LMC
Automotive.
Excess capacity has led to lower rates of capacity utilization and eroded profit margins. Hou Yankun, head of Asia
auto research at UBS Securities, said operating margins at Chinese car makers and their joint ventures with
foreign companies peaked in 2011 but have fallen and will continue to fall. In China, major foreign auto makers
build much of their fleet domestically through joint ventures with local companies.
More barriers to growth are emerging. The city of Beijing has said it aims to keep less than six million vehicles
licensed by the end of 2017, from 5.4 million now. Officials have pledged to cut one type of air pollution by at least
25% by then. "It is extremely difficult to actually get a car in Beijing -- there are license plate restrictions and
people sometimes wait years just to get a plate," said Journey Yu, 21, who doesn't own a car.
-- Rose Yu, Colum Murphy and Kathy Tian
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OFF DUTY --- Gear & Gadgets -- Rumble Seat: Fusion Cuisine: Lincoln MKZ Isn't a Full Meal
OFF DUTY --- Gear & Gadgets -- Rumble Seat: Fusion Cuisine: Lincoln MKZ Isn't a Full Meal
By Dan Neil
1,405 words
19 April 2014
J
D12
English
You think it's easy. You just wave your little magic wand and poof, Lincoln -- Ford's empty storefront of a luxury
division where once presided American car-building glory -- is fixed. Oh no.
This week it became known that in December Lincoln, with little comment, relieved its chief designer, Max Wolff,
and replaced him with David Woodhouse, a veteran Ford campaigner formerly of Jaguar, Aston Martin, and Land
Rover. Mr. Wolff will stay on as Lincoln's head of exterior design, though I resent any reference to these men as
deck chairs.
Having no insight into the workings of Dearborn's design department, and having never met the man, I will only
note the contrast between Mr. Wolff's demotion and the occasion of his promotion in 2010, when he was given
rock-star coverage as the man who would revitalize the look, the brand, the lure of Lincoln. Fate apparently has
answered a resounding no.
Candidly, I didn't seek an audience with Mr. Wolff during his tenure as chief because I had nothing positive to
share about the design direction of Lincoln. This is a brand that has raised badge engineering to a high art, selling
essentially up-optioned Ford products with dubious/hallucinogenic styling at premium prices.
This would be absolutely cricket, except that in one version of overblown rhetoric or another, Lincoln had been
promising a renaissance of the American luxury car for years. My cynicism toward the brand requires a
deep-water port.
The whole enterprise has seemed overdrawn and under-reaching, a play-within-a-play about how cleverly one
could disguise a Ford as a Lincoln. It was like watching three-card Monte and always knowing where the ace was.
And the arch example is this car, the MKZ (as tested, $52,110), which is a ruthlessly badge-engineered,
sort-of-premium version of Ford Fusion that is actually less successful, stylistically, than the donor car.
It is also kind of overpriced, but that is another matter.
Strangely enough, I'm not hating on the MKZ, exactly. There are moments when the standoff effect is actually
pleasing and modern, especially at angles that emphasize the fastback silhouette. And I do think history will be
kind to the MKZ just like we celebrate the exuberant weirdness of late-1950s Italian coach building.
The MKZ's brand-defining "split-wing" grille offers a spectrum of oddness depending on which angle you see it. In
the three-quarter view, I'm getting some sort of bird spirit, not quite a thunderbird, maybe Navajo or Olmec, with a
hint of Pokemon. From straight on, the MKZ appears to be wearing a surgical mask, or maybe it is spraying for
mosquitoes.
The rear is likewise conspicuous, with the short, high-bustle of a deck ending in a pronounced aero-lip at the
edge. Below that there is the wall-to-wall rear taillight bar, zany with LEDs.
Again, not awful, kind of interesting, but to the extent the MKZ is a pleasing shape, it is largely thanks to the
subdermal Fusion.
Likewise, the machine itself, being a Fusion with all-wheel drive, 300 naturally aspirated horsepower, heated rear
seats in a roomy rear cabin, and a panoramic moonroof the size of a bridge table, ain't bad driving. It really isn't.
My test car was decently quick and willing; with 0-60 mph acceleration around 7 seconds and fairly long legs (the

MKZ gets by with six forward gears as compared to some of the competition with seven or eight). The electric
steering is light, fine and very pointable.
Whatever funds were devoted to product differentiation seem to have been spent on turning up the refinement.
The cabin ambience is electronically hushed with an active noise-canceling function in the audio system; the car's
adaptive suspension is pliantly sprung but completely competent when driven with spirit and will get very stubborn
about controlling weight transfer if pushed. Really nice 19-inch all-season radials, too.
Unfortunately, the competition includes equal or better driving front-drive biased cars -- the Acura RLX would eat
the MKZ alive on a road course -- as well as some quite serious rear-drive cars from Cadillac and Infiniti. And we
haven't yet begun to account for the Germans, who absolutely know how to sell you a $50,000 car.
Here are some notes for the lads and ladies in Lincoln product planning. First, repurposing the Fusion interior
won't cut it. This cabin needs much richer, finer materials, more persuasively applied. The real walnut veneer in
my test car was mere hardwood tokenism. Lincoln has announced a coming "Black Label" program of cabin
upgrades with premium leather and Ziricote wood. I wonder what Ralph Lauren thinks of that.
This car needs a sewn leather split-dash gracefully integrated into its own dash and door contours and fascia. It
needs better interior and indirect lighting. The capacitive slider switches -- thin horizontal metal strips in the
center-stack that you finger-sweep to control volume and climate-fan speed -- need to be bigger and more of a
cool encounter. The switchgear and stalks for wipers and indicators that are completely invisible in a $25,000
Fusion are glaringly cheap in the Lincoln.
The MKZ ought to have its own dedicated instrument panel and graphics, separate and better than the Fusion's,
artful and beautiful. The design fatigue factor comes in pretty early in the MKZ experience. The center touch
screen running the MyLincoln Touch software is as GI as khaki boxer shorts.
Here we are very close to the source of the problem for the MKZ. The exterior promises much, and the interior is
a letdown. One's appreciation of the car never transcends that initial, crestfallen moment.
Where are we now? Lincoln's U.S. sales are up, modestly, 31% in March and 36% in Q1 2014; but volume is still
miserable, fewer than 9,000 cars in March, in a booming luxury market. In 2013 sales were down two-thirds from
the historic high of 231,660 in 1990.
The lone bright data point is MKZ sales, up 72% in Q1, accounting for half of volume. And Ford, like any good
mad king, just demoted the car's chief designer.
There will be hits, going forward. The compact crossover MKC, coming this summer, tardily, will move the needle.
And livery services from wherever you are to Long Beach are waiting for the 2015 Lincoln Navigator, a vehicle so
ancien regime they didn't even bother to change the name. We'll be seeing Mr. Wolff's exotic nosewear for some
time.
Is Lincoln's failure to launch Mr. Wolff's fault? Well, it would be hard to know without a Port Authority-style
subpoena for the company's email. But I seriously doubt it. The stylistic exertions of the MKZ are a manifestation
of the no-win mandate he was given. Unable to alter much the underlying vehicle proposition, Mr. Wolff's team
was reduced to this unseemly fiddling at the stylistic margins.
Anyway, the position of director of Lincoln Design is a thankless job and a hopeless task, because the bosses
and the board of Ford Motor Co. have made it so. As much as Ford would like a piece of the premium luxury
market and the margins it commands, the leadership -- President and Chief Executive Alan Mulally and his
deputy Mark Fields, by name -- won't spend the money it would take to turn Lincoln brand into a serious luxury
contender, a near-peer with Mercedes-Benz, Audi and BMW. I am sure they would love to, but ROI is just not
there.
That is not bad management. It is just management.
---
2014 LINCOLN MKZ AWD
Base price: $38,080
Price, as tested: $52,110

Powertrain: Naturally aspirated 3.7-liter, DOHC, 24 valve V6 with variable valve timing; six-speed automatic
transmission; front-biased all-wheel drive.
Horsepower/torque: 300 hp at 6,500 rpm/277 pound-feet at 4,000 rpm
Length/weight: 194.1 inches/4,000 pounds (est.)
Wheelbase: 112 inches
0-60 mph: <7 seconds
EPA fuel economy: 18/26/21 mpg, city/highway/combined
Cargo capacity: 15.4 cubic feet
Document J000000020140419ea4j0000h

Ford's China Beachhead for Lincoln --- U.S. Auto Maker Lays Groundwork to Sell Against Audi, BMW, Mercedes-Benz
Ford's China Beachhead for Lincoln --- U.S. Auto Maker Lays Groundwork to Sell Against Audi, BMW,
Mercedes-Benz
By Joseph B. White in Beijing and Mike Ramsey in Detroit
826 words
18 April 2014
J
B6
English
Ford Motor Co. said on Thursday that it plans to sell five U.S.-made Lincoln models in China by 2016, offering
new details of plans to pitch its premium cars to Chinese buyers who now equate luxury with German vehicles.
The Dearborn, Mich., auto maker said it lined up 60 dealerships in 50 cities for a brand that currently lacks a
formal presence here. Sales begin later this year. Longer-term, Ford hopes to make Lincolns in China so it can
better compete with market giants Audi AG, BMW AG and Mercedes-Benz.
"Clearly over time as we sell more and more Lincolns here we will gradually localize them," Ford Chief Executive
Alan Mulally said Thursday ahead of this weekend's Beijing International Automotive Exhibition, the biggest car
show this year in the world's largest auto market.
The first models to come this fall will be the MKZ midsize sedan, a competitor to popular German rides such as
the Audi A4 and Mercedes C-Class, and the MKC small sport-utility vehicle. A midsize SUV, a large sedan and a
version of the brand's big Navigator SUV will follow.
The aim is to capture buyers like Qin Chao, who this week inspected Navigator SUVs at one of Beijing's
gray-market car lots, which purchase foreign vehicles and bring them to China to sell. "American cars consume
too much gas," said the 35-year-old Mr. Qin, who owns a Beijing restaurant. "Not many people in China recognize
this brand."
Lincoln won't present an immediate threat to the top premium brands in China, said Klaus Paur, global head of
automotive at research firm Ipsos. Imported vehicles in China are subject to taxes and duties that can raise the
sticker price or crimp profits.
Volkswagen AG's Audi, BMW and Daimler AG's Mercedes-Benz make much of what they sell in China
domestically through joint ventures with local auto makers. They account for roughly two-thirds of the 1.6 million
luxury cars sold last year in China, according to data from the companies and an estimate from
management-consulting firm Strategy&.
"If you want to get on premium buyers' radar screen you need critical mass in terms of on-the-road presence, and
that requires localization," Johan De Nysschen, chief executive of Nissan Motor Co.'s Infiniti, said in an interview.
Competition also is intensifying. Infiniti plans to introduce to China a youth-aimed crossover SUV based on the
Nissan Juke, while Toyota Motor Corp.'s Lexus plans to show in Beijing a production version of its first compact
SUV, to be called the NX.
Ford China CEO John Lawler didn't disclose pricing for the coming vehicles but said Lincolns will be
"competitively priced" with locally made rivals.
Lincoln plans to enhance its appeal by offering a boutique feel in its dealerships. On Thursday, Lincoln executives
in Beijing showed off a mock-up of the design for its stores, which will feature amenities such as a tea room,
seating areas designed to evoke a plush hotel lobby and a "Personalization Studio" where customers can use a
touch-screen table to choose among options and styling packages for the interiors of the cars.
All of this is a departure from the way Lincoln sells vehicles in the U.S., which is through a long-standing network
of independently owned franchises that largely control the way a customer is treated. But in China, Ford and
Lincoln can set up the retail network from scratch -- one advantage of coming late to the market.
In the U.S., Lincoln sales declined slightly in 2013 -- a drop of less than 1%, to 81,694 -- as the brand dealt with
the phaseout of the Town Car. Later this year, the brand's sales should jump as it begins selling the MKC, a small
crossover built on the same underpinnings as the Ford Escape -- known as the Kuga in China -- but with a
different look.
China is "strategically important because of the size of the market," said Matt VanDyke, director of Global Lincoln.
"We expect it to be a very substantial piece of our global sales."
At the car market in Beijing, Sun Xiaogang, a 29-year-old staffer for a foreign trading company in Beijing, said he
ordered a Navigator for his boss. "My company has quite a number of American clients, so my boss wants to
have a Lincoln car to pick up those American clients when they come to Beijing," Mr. Sun said. "He knows that
Lincoln is a luxury brand in America. And it looks good as well. Big and powerful."
---
Lilian Lin in Beijing and Colum Murphy in Shanghai contributed to this article.
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Ford Takes the Transit Up, Up and Away
Automobiles; SECT
Ford Takes the Transit Up, Up and Away
By PAUL STENQUIST
276 words
17 April 2014
The New York Times
NYTF
English
What is it? A concept vehicle based on the Ford Transit full-size van.
Is it real? Is Alan Mulally the Easter Bunny? Skyliner may be make-believe, but it's a real effort to demonstrate
that Transit is a good fit for the wacky world of custom limousines.
What they said: ''You step into the vehicle and are immediately immersed in the custom interior and high-tech
audiovisual environment,'' Tim Stoehr, Ford's manager for commercial truck marketing, said. ''The next thing you
know, you are arriving at your destination.''
What they didn't say: Although the Transit has been sold in Europe and around the world for many years, the
boxlike high-roof vehicle is a different breed of full-size van for United States buyers. Exercises like Skyliner can
demonstrate that Transit is a more than adequate replacement for Ford's E-Series, which served as a work van
and airport hauler for more than half a century, and as a blank canvas for customizers of the 1970s.
What makes it tick? The concept vehicle is equipped with Transit's available 3.5-liter EcoBoost V6. What might
make it really tick for Ford is a plethora of limousine companies turning it into a super-luxurious wedding wagon
and prom-night playpen.
How much, how soon? A lot and never.
How does it look? With Forgiano wheels and silver paint no one will mistake it for the plumber's work van. Inside,
huge seats look like they were plucked from the space shuttle, while mood lighting casts an eerie glow.
Document NYTF000020140417ea4h0009d

A Homecoming of Sorts for Mark Fields of Ford
Automobiles; SECT
A Homecoming of Sorts for Mark Fields of Ford
By JOHN R. QUAIN
442 words
17 April 2014
The New York Times
NYTF
English
The opening keynote address at the New York International Auto Show by Mark Fields, chief operating officer of
Ford Motor, unsurprisingly promoted innovation and technology, but it sidestepped any discussion of rumors that
the company would soon take a new direction with one of its most visible technologies.
Keying off Ford's 50th anniversary celebration of the introduction of the Mustang at the 1964 World's Fair, it was a
homecoming of sorts for Mr. Fields, who was born in Brooklyn and who at the age of 4 witnessed the car's debut
with his family. With images of Bell System's video phone and IBM's mainframe computers of the time as a
backdrop, Mr. Fields invoked classic American images of technological progress (although there were no flying
cars or personal jet packs in the slide presentation).
Emphasizing gains in fuel efficiency and the rise of the global marketplace, he later noted that the company would
take its luxury Lincoln brand to China this year. A major touch point continues to be Ford's Sync-connected car
system, which was the first mass market in-dash system to take advantage of the communications features of
smartphones seven years ago. According to Mr. Fields, the Sync system is now in 10 million Ford vehicles in 37
countries around the world.
Being first to market has resulted in Ford receiving a fair number of dings for the complexity and sometimes balky
behavior of the Sync systems as they have evolved from providing basic navigation services to full-blown color
touch displays controlling things as diverse as streaming music and social media apps. This summer it was
reported that Ford had decided that its partnership with Microsoft, which has toiled for over a decade to get its
software into automobiles, should end, with Ford choosing to build a new generation of Sync systems with QNX,
a Canadian company well versed in embedded car systems and now owned by BlackBerry.
Nevertheless, Mr. Fields made no mention of any such innovative changes that may be afoot.
Indeed, in speaking about innovative companies that have set an example for other businesses, Mr. Fields
mentioned Apple and the wearable computing firm Fitbit. Images of Nest's smart thermostat and 3-D printers
were also emphasized -- but he made no nod to Microsoft.
As if to underscore the technological changes, Mr. Fields took questions from a few reporters, not from the floor
but from Twitter, read from an iPad. Then, in fitting Brooklyn boy fashion, he concluded the keynote by drinking an
egg cream.
Document NYTF000020140417ea4h00061

Corporate News: Round Round Get Around: Ford Mustang, at 50, Climbs the Empire State Building
Corporate News: Round Round Get Around: Ford Mustang, at 50, Climbs the Empire State Building
192 words
17 April 2014
J
B3
English
The New York International Auto Show opens on Friday with car makers including GM, Hyundai, Toyota and
others showing off their new hot rods and family sedans. Ford Motor Chairman Bill Ford unveils the 2015
Mustang GT convertible -- atop the Empire State Building's observation deck on Wednesday.
The Dearborn, Mich., auto maker celebrated this year's 50th anniversary of its "pony" car by disassembling the
bright yellow car, ferrying it in pieces up the historic building and reassembling it for a lofty debut.
Among other new cars being introduced to the public this week: Fiat Chrysler is bringing updated versions of its
Dodge Charger and Challenger, while BMW is showing its X4 sport-utility vehicle. General Motors is bringing a
redesigned version of its top-selling Chevrolet Cruze compact car, Toyota has a revamped version of its
Highlander SUV, and Hyundai is raising the curtain on a new and less flashy Sonata sedan. Nissan has a
redesigned Murano SUV and Honda is showing off its new Fit subcompact.
Document J000000020140417ea4h0001w

Mustang: 50 years of running the roads ; Ford's sporty car went on sale in 1964, changing the auto industry
MONEY
Mustang: 50 years of running the roads ; Ford's sporty car went on sale in 1964, changing the auto
industry
James R Healey
James R. Healey, USA TODAY
1,256 words
16 April 2014
USAT
FINAL
B.6
English
Fifty years ago, the first Baby Boomers hit 18 with a ravenous appetite for anything outside the mainstream. The
U.S. economy was booming, and the country was yearning to shake off the November 1963 assassination of
President Kennedy.
Ford Motor couldn't have timed its entirely new car better.
On April 17, 1964, the Ford Mustang sporty car went on sale -- and exploded into American culture as no other
car had since the Model T.
Mustang gave Ford a vehicle with a halo that still lends a little sheen to ordinary Fords. And it made Ford
executive Lee Iacocca look like a genius for pushing Ford to build the iconic model.
The Mustang was introduced at the New York World's Fair starting at $2,368 -- or $17,934 in today's dollars.
This week, Ford marks the birthday at the New York Auto Show by re-creating the 1964 public relations stunt of
disassembling a Mustang, taking it up in elevators and reassembling it on the Empire State Building's observation
deck.
Mustang fans also plan big events, including at the speedways in Charlotte and Las Vegas.
Iacocca pushed to sell 417,000 Mustangs in the first 12 months, to mark the 4/17 launch. The car hit 418,812,
according to Ford archives. That marked a huge success, considering that auto sales at the time were about half
of what they are today.
The car became so popular that just about everybody had a story about it. The favorite of the late Don Frey, the
engineer who conceived the Mustang, was a letter he got from a Texas janitor: "I've been courting this 5,000-acre
widow for years. I finally got her in my red pony. Thank you, thank you, thank you."
Iacocca, known for his marketing savvy, pitched the Mustang as "the car designed to be designed by you." That
was his way of inviting buyers to add high-profit options, such as power windows.
A tough sell for Iacocca
Frey collaborated with Ford product engineer Harold "Hal" Sperlich under Iacocca's sponsorship to get the green
light to build the Mustang -- on their fifth try.
Iacocca "took the major burden of getting the thing (Mustang) sold to the top brass," still smarting from the
spectacular failure of its 1958-1960 Edsel line, Frey recounted in a past interview with USA TODAY.
Frey, who died in 2010, said he came up with the Mustang concept after his children razzed him about Ford's
boring lineup. As a big shot at Ford product development, he was singularly positioned to do something about it.

Frey and Sprelich adapted the Ford Falcon economy car as the underpinnings of the Mustang. The team "used
as many (Falcon) parts as they could," recalled Mustang hop-up artist Carroll Shelby in a 2004 interview, as the
car celebrated its 40th birthday.
Ford styling chief Joe Oros made numerous prototypes until Oros' stylists finally got the desired "Italian" look: thin
and elegant wrap-around bumpers, air scoops on the sides, a long hood to imply a big engine, small trunk to
suggest an impetuous buy-what-we-need- when-we-get-there attitude, and a hefty medallion on the grille as
Italian maker Maserati might use.
Company chief Henry Ford II finally gave the OK. He showed up at a studio in fall 1962, and in typically salty
fashion, as Frey recalled it, said: "Frey, I'm tired of hearing about your (expletive) Mustang. I'm gonna approve it,
and it's your ass if it doesn't sell."
In an interview several years ago with USA TODAY, Oros, who died in 2012, said that Mustang was "the most
exciting car that I worked on at Ford. It was just unbelievable."
Claim challenged
Purists might accuse Ford of stretching the truth by claiming Mustang has been in continuous production since
1964. Yes, there have been cars called Mustang since the start. But the 1974-1978 Mustang II was wholly
different.
That car was a shrunken version of the traditional Mustang, built atop a Ford Pinto economy car chassis with a
four-cylinder standard engine. It kept the name alive through the oil embargo of 1973 and the fuel shortages and
small-car import invasion that followed. Adding "II" to the name makes it clear that even Ford had trouble keeping
a straight face calling that one a Mustang. It sold well enough, though.
The car almost died after the 1993 model. But Ford engineer John Coletti and other company Mustang
enthusiasts, dubbed the Gang of Eight, couldn't imagine Ford without Mustang.
Working on their own time in an old Montgomery Ward warehouse, they developed a plan to carry over some
parts and mildly modify others, to keep costs down, while designing a new body and interior. Then-CEO, flinty
Harold "Red" Poling, gave it the "Go" after a grueling interrogation of the Gang and a written promise from them to
deliver the car on time, under budget.
A classic Mustang debate remains on whether the first ones, launched outside the then-customary fall new-model
launch, are "1964" or 1965 models. Ford archivist Dean Weber says the vehicle identification numbers (VIN) were
coded as 1965 from the very first, so, in the minds of DMV clerks everywhere, the issue's settled. But, he says,
some internal Ford documents refer to "the 1964 car," giving license to that designation.
From mule to racehorse
Shelby, who died in 2012, said the early Mustangs were lame. But "Iacocca called me and said, 'Carroll, can you
make this a sports car?'" Shelby said his reaction was, "These guys want me to make a mule into a racehorse."
He did, building it at his Shelby American operation instead of at Ford directly: "Built it on the outside because you
can do things twice as fast for half the money."
Those 1965-1967 Shelby Mustangs today command more than $100,000 at classic-car auctions.
On the Mustang's 40th anniversary, Bill Ford, the company's executive chairman, said, "Mustang's always made
money, but its importance has always been way beyond financial. It's a halo car for other products. Its
contribution to the company always has been greater than its sales."
As Ford Motor readies a redesigned 2015 Mustang due later this year, Ford hasn't lost his enthusiasm. In a
recent video to employees, he said: "This is the most important product we have, at least to me personally. Every
time we unveil a Mustang, the stakes are raised."
---
Galloping through pony car history
ONE IN A MILLION

AMustang with serial number 001, apre-production model not intended for sale, was sold to Canadian airline pilot
Stanley Tucker by a dealer who didn't knowit wasn't for sale. Two years later, Ford traded him the 1 millionth
Mustang for #001.
WHAT'S IN A NAME?
Henry Ford II wanted to call the car Thunderbird II. Other names considered: Cougar; Torino; Allegro; Avventura.
Henry Ford II, after fighting against the Mustang, gave his son one for his 16th birthday on Dec. 27, 1964. It had
the high performance 289 V-8 and rear fuel- filler cap with "EBF II" for Edsel B. Ford II.
photo Ford Motor The 2015 Ford Mustang, the latest in a long line of pony cars.
Document USAT000020140416ea4g00001

For the Auto Industry, a Showcase for Change
NEW YORK AUTO SHOW

Automobiles; SECT
For the Auto Industry, a Showcase for Change
By JERRY GARRETT
933 words
15 April 2014
The New York Times
NYTF
English
The 2014 New York International Auto Show is billed, rightly so, as a showcase for dozens of new and
significantly changed automobiles. But more than that, it is also a showcase for the quickening pace of change in
the auto industry.
Organizers have designated more than five dozen vehicles as world or North American premieres, among the
hundreds on display at this year's show, which opens Wednesday for two days of press previews at the Jacob K.
Javits Convention Center in Manhattan. Models expected to draw large crowds include the 2015 Chevrolet
Corvette Z06 convertible; the 2015 Jeep Renegade, a smaller addition to the Jeep line that made its debut earlier
this year in Geneva; and the much anticipated Alfa Romeo 4C sports car.
Among those debutantes are a large number, including the Ford Fusion, Chevrolet Cruze, Toyota Camry, Dodge
Charger and Challenger and Volkswagen Jetta, that may seem like little more than familiar faces with freshened
facades and fancier features. But the changes run more than skin deep.
''This year's show will feature a wide range of both all-new and heavily refreshed vehicles,'' Karl Brauer, a senior
automotive analyst for Kelley Blue Book, said in an email. ''The automotive market is more competitive than it has
ever been, which puts increased pressure on manufacturers to keep product fresh.''
Product cycles are shortening. Where seven to eight years might have been the norm in the life cycle of an
automaker's core products in the past, now it seems at least a significant refresh or face-lift is in order every three
to four years.
''We'll see this in the high number of significantly updated models like the Camry, Focus and Challenger,'' Mr.
Brauer continued. ''At the same time we'll see plenty of all-new models from luxury brands like Acura and BMW.
The show reflects the need to keep innovating and revising models at a much faster rate than automakers had to
just a few years ago.''
As the competition among automakers intensifies, technological advances are happening faster, and likewise,
obsolescence now seems to be lurking just around the corner.
A timely example can be found at McLaren, the British racing legend and supercar builder, which is showing its
new 650S model to the press at a location near the convention center. The 650S is so advanced compared with
the 12C, a still-handsome model it has been making for just three years, that McLaren felt compelled to cancel
the 12C.
Also in New York, Ford is ready to introduce its sixth-generation Mustang, even though its outgoing
fifth-generation model has been subjected to a series of updates almost yearly since at least 2009 -- and still
looks fresh. To gain an extra measure of attention, Ford is disassembling a new Mustang and putting it back
together on the observation deck of the Empire State Building.
Although Toyota introduced an all-new Camry in 2012, a heavily revised version will be unveiled at New York for
the 2015 model year. The company said, ''The refreshed Camry will challenge conventional expectations of a
midcycle model change.'' New styling, new engines and transmissions and better fuel economy are among the
changes promised.

Honda provided one of the more radical examples of the need to move fast when it rolled out a much-changed
Civic last year, little more than 18 months after a tepidly received new version had made its debut in 2012. This
year, Honda is updating its Fit compact.
Chrysler is carrying out what are called speed-to-market initiatives in which ''we are not waiting until all-new,
next-generation vehicles come out to make significant changes,'' Rick Deneau, a Fiat Chrysler Automobiles
spokesman, said.
Prime examples, he added, include running changes to Ram pickups, the Jeep Grand Cherokee and the Dodge
Challenge and Charger. He says such initiatives ''get us closer to the customer.''
Mark Schirmer, a Ford spokesman, said the pace of change might be a bit faster,, ''or perhaps people are noticing
it more because of the amount of change.''
''Back in the 1950s, they made minor styling changes year after year, right? And then for a while through the dark
days, it seemed we never changed the darn things,'' he said. ''If you consider that a typical vehicle cycle is seven
to eight years, which I think it still is ---all-new to all-new -- the midcycle is more aggressive and often includes
new engines and updates throughout and lots of added technology and new features.''
Logistically speaking, Mr. Schirmer said, a major change still requires about 36 months to put into effect.
There is also the staggered, year-round nature of new car introductions; gone are the fall ''new car season''
introductions of the past.
Ford is mixing in a significant midcycle update to the Focus, with a sneak peek of the next Edge crossover, a new
Skyliner adaptation of the Transit van and a complete redesign of the Mustang. The net effect may appear more
transformative, to Ford's overall lineup, than is actually the case.
But to an untrained eye, even a new palette of colors on a line of existing models can seem brand new, especially
under the bright lights of an auto show display.
The show opens to the public Friday morning at the Javits center on 11th Avenue between 34th and 40th Streets
and continues through April 27. Admission is $15 for adults, $5 for children 12 and younger.
Document NYTF000020140414ea4f00096

Big Car Makers Race to Recall --- Potential Fines, Criminal Probes Weigh on Firms
Big Car Makers Race to Recall --- Potential Fines, Criminal Probes Weigh on Firms
By Neal E. Boudette and Hiroyuki Kachi
1,029 words
10 April 2014
J
A1
English
Corrections & Amplifications
Financial-advisory firm Stout Risius Ross Inc. completed a study about auto recalls. A Page One article on April
10 about the rising number of recalls incorrectly referred to the authors of the company's study as attorneys.
(WSJ April 17, 2014)
(END)
Major car makers are accelerating recalls and directing dealers to stop sales of vehicles with potentially
dangerous defects amid an aggressive safety clampdown by auto regulators and others in the U.S., Japan and
China.
The latest move: Toyota Motor Corp. on Wednesday issued a massive recall of nearly 6.4 million vehicles
world-wide. The action covers five separate problems and 27 different models including such globally popular
cars as the Corolla, Yaris and Matrix compacts, and RAV4 and Highlander sport-utility vehicles.
All told, BMW AG, Fiat Chrysler Automobiles, Ford Motor Co., General Motors Co., Toyota and Volkswagen AG
have recalled nearly 15 million vehicles since the start of the year. Industry experts say a landscape that once
allowed auto makers to negotiate terms with regulators has been transformed because of the potential for huge
fines and criminal prosecution now hanging over executives.
Last month, Toyota agreed to pay the U.S. a $1.2 billion penalty to settle a criminal probe by the Justice
Department. The company was charged with misleading consumers and failing to report defects that could cause
some Toyota and Lexus models to accelerate suddenly and were linked to a series of fatal crashes.
Allan J. Kam, a consultant who served 25 years as an enforcement attorney at the National Highway Traffic
Safety Administration, said the settlement "certainly got the attention" of other auto makers. "They're thinking,
'There but for the grace of God go I,'" he said.
The globalization of production also has led to more common parts used across borders and models.
South Korean inspectors triggered a January U.S. auto recall after challenging the flammability specifications on
seat covers used in some American-made Toyotas.
The triggers for the newfound caution are several.
Volkswagen, GM and SAIC Motor Co. addressed consumer complaints with repairs after public scoldings and
recall orders last year from newly emboldened Chinese regulators. Japanese regulators last decade brought
criminal charges against Mitsubishi Motors Corp. executives after it admitted to hiding defects for years.
U.S. General Eric Holder said the Toyota settlement "serves as a model" and warned that other car makers
"should not repeat Toyota's mistake." The company has also agreed to pay $1.6 billion to settle related civil suits.
The public pounding GM is now taking before Congress and online for its massive ignition-switch recall is a
reminder of the reputational damage car makers can face if they delay acting on a defect.

Last week, GM Chief Executive Mary Barra faced two days of pointed questioning before televised congressional
panels. The company also faces more than a dozen lawsuits related to crashes linked to the switches, the threat
of criminal prosecution, and calls for it to ask customers to park until fixed some 2.3 million vehicles.
Ms. Barra has repeatedly said GM is changing its internal operations to identify and fix safety defects more
quickly, and recently created the position of global safety chief, mimicking changes introduced last decade by
Toyota during its day in the recall spotlight.
Toyota named a chief safety technology officer as well as a quality officer for North America who has direct
access to Chief Executive Akio Toyoda. It also created a global quality task force and set up a center in Ann
Arbor, Mich., to study automotive safety.
Last month, Mr. Toyoda said Toyota and car makers overall are becoming more proactive in their recalls -- pulling
vehicles back and replacing parts to address consumers' safety concerns, even though they may not be officially
required to do so.
Wednesday's massive recall "has to do with our company rededicating ourselves to strengthening safety and
quality, putting customers and people first, and taking action," said a Toyota spokeswoman at the company's
Torrance, Calif., U.S. headquarters.
Recalls by auto makers have been steadily increasing over time and the pace is accelerating in the past three
years. A study by attorneys at financial advisers Stout Risius Ross Inc. showed recalls ramping up between 2010
and 2013, attributing at least some of the increase to stronger enforcement by National Highway Traffic Safety
Administration and the highly public nature of Toyota recalls in 2009 and 2010.
One factor that has increased the size of recalls is the auto industry's practice of using the same parts in many
different models. Ford recently issued a recall related to seat frames that were used in the Ford Fusion and
Lincoln MKZ sedans, but also in two distinctly different vehicles, the Escape SUV and C-Max compact minivan.
During the 1990s, auto makers issued recalls affecting 123 million U.S. vehicles; it rose to 170 million in the
2000s -- with a large number of Toyota's recall occurring in 2009. In just the first three years of this decade, the
number of vehicles recalled in the U.S. has reached 63 million, according to NHTSA data compiled by SRR.
"The car companies are trying to recall proactively," said Jessica Caldwell, an analyst at Edmunds.com, a
car-shopping and auto information website, "before there is a negative backlash."
She added that many consumers shrug off routine recalls, but take notice when defects are linked to accidents or
traffic deaths.
Toyota had 17% market share in the U.S. in 2009, before the sudden acceleration issue came to light. A year
later, its share had fallen to 15.2%, according to researcher Autodata Corp. Its market share was further hurt by
the earthquake and tsunami that hit Japan in 2011 and knocked out production in many of its plants for weeks or
months. In the first quarter of this year, Toyota's share was 13.9%.
Toyota shares fell 3.1% Wednesday on the Tokyo Stock Exchange.
Document J000000020140410ea4a0003i

Corporate News: The Secret to Ford's Surge in China: SUVs
Corporate News: The Secret to Ford's Surge in China: SUVs

By Colum Murphy
917 words
8 April 2014
J
B4
English
SHANGHAI -- Ford Motor Co. is driving into the big leagues of China's auto industry after years in the minors,
thanks in part to a prescient call four years ago anticipating rising demand for sport-utility vehicles by Chinese
consumers.
Ford's sales in China leaped more than 50% last year and are off to a strong start in 2014. Two things have
driven the surge: Chinese customers began to shun Japanese cars in 2012 over a heated territorial dispute
between Beijing and Tokyo over an island chain; meanwhile, Ford's $5 billion investment in Chinese car and SUV
production was bearing fruit.
After years trailing behind General Motors Co. and Volkswagen AG in the world's largest car market, Ford's
Focus compact car now is the top-selling nameplate in China. In 2013, Ford's China deliveries jumped past
Toyota Motor Corp., a longtime powerhouse.
While Focus-size compact cars still are the most popular passenger vehicles sold in China, Ford's EcoSport,
Kuga and Edge SUVs have sold well and are driving the company's market-share gains.
John Lawler, chief executive of Ford Motor China, said its executives decided to field more SUVs in China after
watching trends in other markets such as South America and Europe, where consumers aspired to graduate to
SUVs from sedans. Ford has long been a leader in marketing tall-riding SUVs in the U.S., and has a broad
portfolio of such vehicles in its global lineup.
"We're good at SUVs," Mr. Lawler said.
China sales of all such vehicles grew 49% to about three million vehicles, according to data from the China
Association of Automobile Manufacturers.
Guan Jiajie is a convert to Ford's SUVs. A 30-year-old who works in sales for a manufacturing company, he
bought a white Ford Kuga last August for 240,000 yuan ($38,675). Prior to that, he drove a Ford Focus for five
years. Before deciding, Mr. Guan visited a GM Buick dealership but wasn't convinced. "I ruled out the Encore
right away," he said. Compared with the GM model, he said, the "Kuga is more beautiful and roomier."
Ford sold 155,571 Kuga and compact EcoSport SUVs in China last year, while GM's six SUV models combined
had 132,000 sales.
In 2014, GM plans to launch two new SUVs, including a midsize Buick. GM is investing $11 billion in China by
2016 to boost capacity to roughly five million vehicles a year.
Ford still has a long way to go to catch up to VW and GM in total sales. Ford's 2013 market share overall was
4.4%, compared with 15.1% at VW and 14.5% at GM, according to market researcher IHS Automotive.
Ford once appeared to have missed the boat in China. GM and VW had clinched partnerships with the larger
domestic car companies in the coastal cities of Shanghai and Beijing, where the bulk of car buyers have been in
the past decade.
Ford was left to join with Chongqing Changan Automobile, a unit of a defense-equipment manufacturer China
South Industries Group Corp. that is based in the southwest Chinese city of Chongqing. The city has a large
population but isn't as wealthy as the coastal areas. Ford will have three assembly plants as well as an engine
and transmission plant in the city later this year.
"The impression at the time was that Ford was getting the leftovers" among local partners, said Greg Anderson, a
China automotive expert.
Beginning in 2009, with the U.S. auto industry still reeling from the financial crisis, Ford executives in China and at
corporate headquarters in Dearborn, Mich., began a series of dawn and late-night meetings that spanned from
late 2009 to the middle of 2010 to hammer out a plan to sharply boost the company's market share.
The result was the $5 billion program to expand the number of manufacturing facilities there to nine from four. By
2015, Ford plans to have capability to build 1.2 million passenger cars in China, double the levels of 2012.
Ford is still weak in the luxury market, an important segment in China. German luxury-car brands Audi, BMW and
Mercedes-Benz have been producing cars locally for many years. Other emerging luxury-car brands in China's
market such as Cadillac, Volvo, Jaguar-Land Rover are either already producing in China or will start to do so in
the near future.
Ford is playing catch-up with a plan to bring its Lincoln luxury brand to China later this year, beginning with
imports from the U.S.
Zhou Huicheng manages a Ford dealership in Shanghai and said his store once was lucky to sell 40 cars a
month. Today, sales are up to 300 cars a month -- one-third of which are SUVs. The number of employees has
tripled to 180.
Mr. Zhou said he is proud of the success of Ford in recent years, but worries whether Ford can sustain its
momentum.
"Ford moved too fast last year, with new products coming out every four to five months," he said. "I'm a little bit
concerned that the pace could slow down. . . . Does Ford have other models to trigger another sales boom?"
---
Rose Yu in Shanghai and Mike Ramsey in Detroit contributed to this article.
Document J000000020140408ea480001l

My Little Pony, 50 Years Later
COLLECTING
Automobiles; SECTAU
My Little Pony, 50 Years Later
By PAUL STENQUIST
2,280 words
6 April 2014
The New York Times
NYTF
1
English
When the Ford Mustang was introduced 50 years ago this month, it was first to break from the gate in a market
class that would come to be known as pony cars.
With a long hood and a short rear deck -- proportions carried forward by the Chevrolet Camaro, Plymouth
Barracuda and many others -- the Mustang looked ready to bolt. And bolt it did, as 22,000 wowed Americans
placed orders for the car on April 17, according to Ford, the official first day of sales.
Naming the car for a horse proved to be a stroke of marketing genius. Not just any horse, mind you (a car named
Clydesdale might never have been so popular) but one that conjured images of rugged wild horses roaming the
American West: The drama that imagery invoked was supported by the car's fresh style and a galloping steed
front and center in the grille.
Underneath, the Mustang was essentially Ford's Falcon, a solid compact that was available with V8 power and a
4-speed manual transmission. Those underpinnings were enough to get the pony car sales competition off to a
fast start.
America was smitten, and buyers showed up in droves, eager to put down $2,368 for the base model or more
than $3,400 for a loaded version. Ford had projected first-year sales of about 100,000; instead, it sold 418,812
Mustangs, setting a single-year sales record. It was, in brief, Mustang mania.
The earliest cars off the assembly lines have a special place in Mustang lore. Officially, they are titled as 1965
models, but enthusiasts draw a distinction between cars built before August 1964 and those built later, calling the
early cars '64 1/2 models. There is reason for this: The car was revised after a few months of production with trim
changes, different engine options and a reset of the vehicle identification number sequence.
Among the fans who will be celebrating the Mustang's 50th birthday will be some owners who bought the car
when it first went on sale. Here are the stories of some early buyers who could never let go.
The New Graduate
Kathy Miller of Boardman, Ohio, had just graduated from high school in the spring of 1964 when her parents, Ken
and Lois Mitchell, bought her a Mustang.
At the time, Ms. Miller might have been more interested in academics than cars, but she has since become one of
the most enthusiastic fans of the model. The Prairie Bronze Metallic coupe she took delivery of a half-century ago
was a basic machine -- 6-cylinder engine, automatic transmission, manual steering and brakes -- but it quickly
won her heart.
''They had only been out a month,'' Ms. Miller said in a recent telephone interview. ''Everyone admired that car.
My girlfriends and I would go riding around.''
She is still having fun with it. The car was restored about 10 years ago, and Ms. Miller regularly takes it by trailer
to shows. There she is apt to meet others who share the distinction of being the original owner of a first-year
Mustang, and she maintains a database of those with similar credentials at 50th-anniversary-mustang.com.

The Unlicensed Buyer
Marc Snyder of Enterprise, Ala., who became a Mustang owner at 15, might have been youngest of the original
buyers.
''I didn't even know Mustang was in the works when I started working on my dad to let me get a car,'' he said.
In early April 1964, Mr. Snyder and his father, James, went car shopping. They looked first at a Chevrolet Corvair
that Marc Snyder described unappealingly as a ''puke-green 4-door'' model.
''Then we went to Bemis Motor Company in Byron, Ill., on April 17, 1964, and saw a Poppy Red Mustang on
display,'' Mr. Snyder said. ''I wanted it, but it had been sold earlier that morning.''
He continued: ''So on April 22, dad and I ordered a Wimbledon White 6-cylinder Mustang. I was told that it would
be delivered on June 18, so on that day I rode my bicycle to the dealership and watched my car roll off the truck.
On the 20th, my 16th birthday, I drove the new Mustang down to Oregon, Ill., and took my driver's license test.
''Until '67 or '68 mine was the only Mustang in Byron. It's a small town; my graduating class numbered only 35.
When I went back, some of my classmates asked if I still had the car. Felt good to say yes.''
A Business Proposition
Fred Glazier first saw the new Mustang on Ford's Magic Skyway ride at the 1964 New York World's Fair. The
magic worked; Mr. Glazier was spellbound.
''I was excited about the car and wanted to buy one,'' he said. ''I called about 10 Ford dealers within 50 or 60
miles of home -- found one at Conroy Ford in Doylestown, Pa. It had been sold, but the financing had failed, so I
was able to buy it.''
Mr. Glazier traded in his '54 Corvette. His fiancée, Susan, who was quite fond of the 'Vette, was not pleased.
''We're still married,'' Mr. Glazier said, ''so I guess she got over it.''
Mr. Glazier's Mustang is a Rangoon Red coupe with a 260-cubic-inch V8 and 3-speed manual transmission. He
drove it for 15 years, stored it for 26 years and did a complete restoration in 2006.
''That Mustang was the beginning of a career,'' Mr. Glazier said. ''I restored Mustangs to pay my college tuition
and was in the Mustang restoration business for 35 years before retiring in 2012. The cars have been good to
me.''
Jumping the Gun
Gail Wise had just graduated from Chicago Teacher's College when she and her parents went car shopping on
April 15, 1964, two days before the Mustang's introduction. Ms. Wise said in a phone interview that she told the
salesman she wanted a convertible, but there were none in the showroom, so the salesman invited her to have a
look in a back room at something that had just been delivered.
''I loved it,'' Ms. Wise said. ''The salesman said he wasn't supposed to sell it, but for some reason he did. When I
drove away from the dealership everyone was giving me thumbs up. I drove it to school the next day, and the 7th
and 8th grade boys crowded around it.''
And that is how Ms. Wise introduced Mustang to the world, two days before it was revealed at the World's Fair.
In Long-Term Storage
Ron Hermann didn't take delivery of his Mustang until after the official introduction, but he put down a deposit to
reserve the car on April 8, 1964, and the date on the Pennsylvania title certificate is April 14.
The blue convertible was a demonstrator sample, so while the car was his, it would not be delivered until the area
dealers had their turns displaying it. Mr. Hermann's father, Adam, was a friend of the general manager of Barr
Ford in Philadelphia, who made available the list of when and where the car would be shown. Mr. Hermann
traveled to each dealership to protect his investment.
''I'd go there and tell people to keep their hands off my car,'' he said.

He maintained that protective mode, driving the car for a brief time before storing it in a heated garage, where it
has remained for almost 50 years. ''I drove it only when it was new,'' he said, ''honking at girls and waving at
them.''
Today, the Mustang shows 17,000 miles on the odometer and, according to Mr. Hermann, is 100 percent original.
''I never really got to enjoy the car,'' he said, ''because I had to protect it. I hope to one day donate it to a
museum.''
600,000 and Counting
Grant Martin of Shawnee, Kan., saw the new Mustang on display at the New York World's Fair in April 1964.
When he returned home, he bought a Mustang coupe, equipped with the 260-cubic-inch V8, from
Whittaker-Stikels Ford.
''I was going to school in Montreal,'' Mr. Martin said. ''Drove up there the day after I bought the car. Drove it for 41
years and put 603,000 miles on it. I quit driving it in 2005 and restored it.''
The car was stolen in 1977, and although the police recovered it two hours later, Mr. Martin wasn't informed for
three weeks. ''I was pretty sad,'' he said. ''Hadn't realized I was so attached to the car. After that, I knew I had to
hang onto it.''
The Coveted K-Code
Phil Florio was at a Ford dealership in Centereach, N.Y., the day his Wimbledon White Mustang coupe was
delivered. Mr. Florio's car was among the first to be produced with the high-performance 289-cubic-inch V8, a
271-horsepower engine known as the K-Code option, which was not available until the summer of '64.
Mr. Florio had read about the option earlier that year, he said, in Hot Rod magazine. The dealer had no
information about it, but an order was placed.
''I told the dealer that if I wasn't there when the car came in they could keep it,'' Mr. Florio said. ''I knew what they
were going to do with it. They were going to hot-rod it around. It was on the upper rack of the truck when it arrived
and enclosed in a bag. The only time Ford saw that car again was for the 3,000-mile checkup.''
Mr. Florio has put 65,000 miles on the car, which is original save for a repaint about 12 years ago. Some of those
miles were logged on drag strips, where the car recorded a best elapsed time of 13.08 at 105 m.p.h.
One That Almost Got Away
Laki Malamatenios, a native of East Africa, had been in the United States for only a couple of years when he
visited a Los Angeles area Ford dealership on April 17, 1964, to see the new Mustang. The white coupe on
display did not immediately win him over, but later that night he found himself unable to stop thinking about the
car. Soon after, he ordered a car, then waited. And waited. Months later, after his car still had not arrived, he was
offered a Poppy Red Mustang ordered by another customer who had canceled.
''The car has been on the road ever since,'' Mr. Malamatenios said. ''I raced the car at one time and changed the
dash out to install full instrumentation, so I'm not sure of the mileage -- but it's around 200,000. I drove it to
Birmingham, Ala., and back for the 45th anniversary celebration and will drive it to Charlotte, N.C., for the 50th.''
''I really love the car,'' he said. ''In '69 I almost traded it in for a Mach 1. But when it was time to turn over the keys,
I couldn't do it. After that I knew I'd keep it forever.''
A Separation and a Reunion
Jerry Bridgforth was among the lucky young drivers who received a first-year Mustang as a graduation present.
Mr. Bridgforth's coupe was ordered in March 1964, a month before the release date. The car was built on May 6
and delivered to Curtiss Ford in Savannah, Ga., on May 13.
Powered by the 260-cubic-inch version of Ford's small V8, it did not pack as much punch as Mr. Bridgforth
wanted, so he upgraded it with a high-performance intake manifold and exhaust headers. At his local drag strip's
Mister Mustang race, he beat 29 other cars to take home a trophy.

Having had his share of fun with the car, Mr. Bridgforth sold it in 1969 to buy a Mach 1 Mustang. Over the years
he proved his devotion to the marque, buying two other Mustangs, a '66 Shelby G.T. 350 H and a 2006 Shelby
GT-H.
But the one that got away bothered him. Fortunately, he knew where it was -- disassembled and in boxes in a
garage not far from his house. It had been taken apart with thoughts of a restoration, but sat untouched for over
30 years. It took years of arm-twisting, but now Mr. Bridgforth and the Mustang he loved first and best are
reunited. The car has been restored, and it will be in Charlotte, N.C., to celebrate the 50th anniversary.
Fred and Susan Glazier went on their honeymoon in their Mustang. They now own five Mustangs, including the
one that started it all. (PHOTOGRAPHS FROM THE GLAZIER FAMILY COLLECTION); When Kathy Miller came
home from her high school graduation in 1964, a new Mustang coupe was in the driveway. (PHOTOGRAPHS
FROM THE MILLER FAMILY COLLECTION); Marc Snyder, far left, was 15 when he took delivery of his Mustang,
and he later raced it in Byron, Ill. Today he and his son Erich enjoy the car. (PHOTOGRAPHS FROM THE
SNYDER FAMILY COLLECTION) (AU1); CORRALLED: From top, Laki Malamatenios will attend a 50th
anniversary celebration with his Mustang; his car when new; Gail Wise bought her convertible two days before
the official introduction in New York; Phil Florio raced his Mustang; Grant Martin realized how much he loved his
Mustang only after it was stolen. (PHOTOGRAPHS COURTESY OF LAKI MALAMATENOIS; GAIL WISE; PHIL
FLORIO; ROY MOORE) (AU2)
Document NYTF000020140406ea460003a

Corrosion Risk Prompts Ford Recall; Mazda Stung by Spiders

Corrosion Risk Prompts Ford Recall; Mazda Stung by Spiders
678 words
5 April 2014
The New York Times
NYTF
English
Ford is recalling nearly 386,000 Escape sport utility vehicles from the 2001-4 model years because a corrosion
problem could result in a loss of steering. The company is also recalling 49,000 vehicles from the 2013-14 model
years because the seat backs are not strong enough, the automaker said in a news release on Friday.
Ford said corrosion of the Escapes' subframe ''may cause the lower control arm to separate, potentially resulting
in diminished steering control.'' The company said it knew of one accident related to the problem, although there
were no injuries associated with it.
Ford is recalling vehicles only in states that use a lot of salt on their roads during the winter, however, saying that
those places are where the problem is most likely to occur.
The carmaker's action is known as a regional recall, and for years, consumer advocates have said that this type
of recall allows automakers to save money but may miss unsafe vehicles in other states. But the National
Highway Traffic Safety Administration has approved such recalls and, along with auto manufacturers, defended
them as practical and safe.
The 21 places affected by the recall are Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania,
Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia. About 349,000 of the vehicles are
in the United States, and almost 37,000 are in Canada.
''Customers located in other states who routinely operate their vehicles in one of these areas, or customers with
vehicles showing evidence of this condition can request to be included through their dealer,'' Kelli Felker, a Ford
spokeswoman, wrote in an email to The Times.
The second Ford recall involves Ford Fusion, Lincoln MKZ, Ford Escape and Ford C-Max vehicles from the
2013-14 model years. Ford said the seat backs may have substandard welds joining the recliner mechanism to
the seat back frame, increasing the risk of injury in a crash. The company said the seats did not meet Federal
Motor Vehicle Safety Standard No. 207, which is aimed at minimizing the possibility that seats may fail during a
crash.
Nearly 43,000 of the 49,000 recalled vehicles were sold in the United States, about 4,700 in Canada and almost
1,100 in Mexico. In all, the recall includes about 26,500 Escapes, 17,000 Fusions, almost 4,000 C-Max
crossovers and nearly 1,300 MKZs. Ford said it wasn't aware of any crashes or injuries related to the defect.
Mazda, in yet another encounter with spiders, said it was recalling about 42,000 Mazda 6s from the 2010-12
model years because spider webs could cause a fuel leak, according to a report Mazda posted Friday on the
N.H.T.S.A. website.
The automaker told the agency that yellow sac spiders ''may weave a web in the evaporative canister vent line,
potentially causing a restriction in the line.'' That can put stress on the fuel tank, which may cause it to crack and
fuel to leak out. The automaker said it was not aware of any fires related to the defect.
In 2011, Mazda recalled about 52,000 of its 2009-10 Mazda 6s because of the same problem. At the time, the
automaker said it would begin installing a spring ''to inhibit spider intrusion.'' But the automaker concluded in
February that some spiders could still get past the device and decided to install a new valve. Asked why Mazda

seemed to be having so much trouble with spiders, Jeremy Barnes, a spokesman, wrote in an email, ''Don't ask
me, I'm terrified of the damn things.''
Last year, Toyota recalled about 803,000 vehicles in the United States because of the possibility that spider webs
might clog a drain hole and cause a water backup that could damage electronic components and cause the air
bags to deploy.
Document NYTF000020140405ea450005x

The Culture of General Motors
REVIEW & OUTLOOK (Editorial)

The Culture of General Motors
848 words
4 April 2014
J
A12
English
General Motors CEO Mary Barra testified on Capitol Hill this week about the company's long delay in recalling
defective ignition switches from some small-car models. Members of Congress seized the opportunity to attack
the "culture" of GM. Yet many of these same politicians supported a 2009 federal intervention that bent the rules
of bankruptcy precisely to maintain the culture of GM. This is a handy lesson in the virtues of normal corporate
bankruptcy.
For years prior to GM's 2009 bankruptcy, our columnist Holman Jenkins and various Journal contributors warned
that Detroit's business of making small cars wasn't sustainable given the high costs of union labor, pension and
medical benefits plus fuel-economy standards mandated by the government. GM, Chrysler and Ford could make
money selling trucks and SUVs because Americans wanted them (and because light trucks enjoy tariff
protection). But the Big Three struggled to stay profitable making the low-emission small cars desired by
politicians.
Toyota maintained a labor cost advantage (including health care) of roughly $2,000 per vehicle over Detroit. If the
Big Three got creative they could find a way to offset this advantage when selling a $30,000 truck but not a small
car in the $10,000-$20,000 range.
Federal regulations essentially prevented Detroit from building the small cars more cheaply offshore. That's
because the auto makers still had to meet stringent fuel-efficiency averages for all the cars they produced
domestically. So in order to keep building the big vehicles they could make profitably, they had to churn out lots of
fuel-efficient vehicles and somehow make them cheap enough to compete with cars produced by non-union
workers.
Is this why GM didn't make much earlier what seems like a relatively inexpensive fix? Ms. Barra suggested as
much this week. "In the past," she said, "we had more of a cost culture, and now we have a customer culture that
focuses on safety and quality."
The explanation may not be that simple, since the company did initiate other safety recalls on the vehicles. And
given that GM didn't recall the faulty switches until this year -- roughly a decade after they were first introduced in
cars -- a dysfunctional bureaucracy with poor internal communications might also have been to blame.
That goes for the federal government too. The National Highway Traffic Safety Administration received
information from GM and elsewhere in the mid-2000s about how drivers could knock the keys out of position and
about accidents involving the failure of airbags to deploy while the vehicles seemed to have been turned off. The
feds even convened a defects assessment panel in 2007 but took no action. This was partly because the overall
rate of crashes and injuries from non-deployment of airbags in the GM cars was similar to rates in other vehicles
in their class.
Within both the company and the government, which essentially began running GM in 2009, there may have been
a failure to recognize the connection between the bad switches and airbag problem. Or perhaps this was known
and ignored, which is why if Congressional investigators continue this inquiry they should also question federal
traffic-safety employees and members of the White House automobile task force to see what they knew while
running GM.
By the way, if the feds knew about this, why wasn't it disclosed to investors when the reborn GM sold shares to
the public in 2010 or when the government sold the last of its shares in 2013? This would seem to be an issue for

the Securities and Exchange Commission, which never tires of sanctioning companies that fail to disclose
material facts. Does GM get a pass because it was Government Motors?
Keep in mind that GM's culture would have been turned upside down and might no longer exist if the government
hadn't preserved it. In the throes of the financial panic and recession, Chrysler and GM could no longer be
sustained without help from Washington. In December 2008 they began receiving money from the Troubled Asset
Relief Program. More aid came in 2009 when the feds engineered bankruptcies.
But they weren't normal bankruptcies intended to preserve value for creditors while allowing the companies to
restructure to become more competitive. The Chrysler and GM bankruptcies were engineered to maintain union
jobs and benefits, as well as the political commitment to make small cars. The Obama Administration even
handed 20% of Chrysler to Fiat with an option to buy more because the Italian auto maker had designs to make
still more small cars.
One of the reasons it's good to let companies fail is that consumers benefit as well-run companies replace poorly
run firms. Consumers do not benefit when companies are kept alive to serve political goals. Let's hope that the
"new GM" that Ms. Barra likes to describe can develop a culture of serving drivers and passengers rather than
Senators.
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Corporate News: Chrysler Takes a Bite Out of Viper --- Auto Maker Lops Off 15% of Sports Car's

Corporate News: U.S. New-Car Sales Sizzle..................................................................................................................7

Few Thrills, but More Frills ............................................................................................................................................13

Corporate News: Car Makers Crank Up Sales Incentives ............................................................................................18

Ford Recalls 160,000 Turbocharged Vehicles ..............................................................................................................19

Version 1.0: More Boost Than Eco ...............................................................................................................................20

S.U.V.s and Trucks Lift Monthly Vehicle Sales .............................................................................................................22

To Lift Sales, G.M. Turns to Discounts..........................................................................................................................26

Price hikes on aluminum F-150 from minor to mega.....................................................................................................29

Ford Reports $1.3 Billion in Earnings ............................................................................................................................30

Ford's Play: Slim Down to Pick Up ................................................................................................................................38

Ahead of the Tape .........................................................................................................................................................39

In Chaos, Venezuela's Factories Grind to a Halt...........................................................................................................41

Corporate News: Ex-Ford CEO Mulally Joins Google's Board......................................................................................44

ON THE MOVE .............................................................................................................................................................45

Car Makers to Road Test MPG Claims .........................................................................................................................46

Corporate News: Corporate Watch ...............................................................................................................................52

Recent recalls haven't hurt Ford, GM sales as much as expected ...............................................................................56

In China, Engineers Are Hard to Keep ..........................................................................................................................60

Air-Bag Fix Needed, But It's Not 'Recall' .......................................................................................................................62

Corporate News: Gripes About New Cars Tick Higher .................................................................................................72

Corporate News: Aluminum Cars Take Heat From Mittal .............................................................................................74

Have You Shopped for a '70 Ford Lately? ....................................................................................................................76

Ford Admits Overstating Fuel Ratings ..........................................................................................................................81

Detroit's Appetite for Aluminum Grows..........................................................................................................................85

Car Makers Jockey for Pole Position in China ..............................................................................................................87

Corporate News: Corporate Watch ...............................................................................................................................88

Automakers Pledge $26 Million to Save Detroit Art ......................................................................................................91

An Increase in Vehicle Recalls Extends Beyond Just General Motors .......................................................................102

Corporate News: Ford Alters Course And Issues a Recall .........................................................................................104

Ford Faces Hurdles in China Expansion .....................................................................................................................106

All Fancy Hat and No Horse ........................................................................................................................................107

Farmers Seen Supporting Vehicle Sales in Thailand ..................................................................................................108

Ford Recalls Vehicles for Air Bag Flaw .......................................................................................................................111

Ford, Chrysler issue recalls over defects ....................................................................................................................113

The Chatter for Sunday, May 3 ...................................................................................................................................117

Small and City-Smart, Microvans Proliferate...............................................................................................................118

More Pickup Buyers Opt for V6s .................................................................................................................................119

Video: The Ford Fiesta ST Is a Party on Wheels ........................................................................................................121

New Ford Chief Faces Tough Array of Choices ..........................................................................................................122

5 things Ford's new CEO needs to do.........................................................................................................................124

G.M. Sales Increased 7% in April, Apparently Unaffected by Recalls ........................................................................125

Corporate News: Sales Spring Ahead for Car Makers ................................................................................................127

FORD EXECUTIVE SAYS HIRING EXCEEDS PLEDGE ...........................................................................................131

Politics & Ideas: Welcome to the Well-Educated-Barista Economy ............................................................................134

New Vehicles and Recalls Cut Ford Profit ..................................................................................................................138

Rail Logjam Leaves Some New Cars At Factories .....................................................................................................144

Mulally vs. Piketty ........................................................................................................................................................147

Mulally's Legacy: Shifting Ford To Stronger Course ...................................................................................................149

Ford Boss Mulally To Exit Early ..................................................................................................................................156

A shale-oil boom beckonsin Mexico's danger zone.....................................................................................................158

A Mustang Option: Matching Nail Polish .....................................................................................................................161

Ford Takes the Transit Up, Up and Away ...................................................................................................................169

For the Auto Industry, a Showcase for Change ..........................................................................................................175

Corporate News: The Secret to Ford's Surge in China: SUVs ....................................................................................179

My Little Pony, 50 Years Later ....................................................................................................................................181

Corrosion Risk Prompts Ford Recall; Mazda Stung by Spiders ..................................................................................185

The Culture of General Motors ....................................................................................................................................187

Page 4 of 188 © 2020 Factiva, Inc. All rights reserved.

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Corporate News: U.S. New-Car Sales Sizzle

Sales also were lifted by an improving U.S. economy.

Page 7 of 188 © 2020 Factiva, Inc. All rights reserved.