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Automotive News and Reviews for the Petrolhead By Reuters
In this week's issue:
Prior to its replacement in mid 2005, Audi has introduced an A6 Avant Final Edition.
The Final Edition is based on the A6 Avant SE, with a specification including leather upholstery, electronic climate control, cruise control, six CD autochanger and a combined DVD-based satellite navigation system and MP3 player.
Prices range from £23,590 for the 1.9 TDI to £30,250 for the 2.5 TDI. Production will run until December 2004, so these models will be available until early 2005.
The nominees for the European Car of the Year Award have been announced.
The shortlist consists of the BMW 1-Series, Renault Modus, Citroen C4, Ford Focus Mark 2, Toyota Prius, Opel/Vauxhall Astra, and the Peugeot 407. The overall winner will be chosen in early November by a panel of motoring journalists from all over Europe.
Forecasting the winner of this competition is notoriously difficult: sometimes the panel makes a completely reasonable choice like last year's Fiat Panda and other times its chosen models look completely out of date after a couple of years like the Renault 9 or the Fiat Bravo/Brava. We would be inclined towards the BMW 1 Series, but would keep any wager on the small side.
Steve McQueen is to make another ad for Ford. Well not exactly, but Ford is to use digital techniques and a body double to recreate him in an ad for the new Mustang.
McQueen has already starred in an ad campaign for the Puma, which was shot in San Francisco in the style of the iconic car chase from the film "Bullitt". Of course, he actually drove a Mustang in the film, so Ford can claim the new ad is closer in spirit to the original, especially as the new car is a dead-ringer for the 1967 Mustang.
One thing is for sure: Ford won't be using Dennis Hopper again. Ford was so pleased with the Puma ad that, for the launch of the Cougar, Hopper recreated his "Easy Rider" persona. The ad was a pale imitation and the car bombed.
Jaguar has introduced a new X-Type Special Edition - the Spirit.
Based on the 2.5 litre, the new model features the recently announced Jaguar 'Sports Collection' accessory body styling package as standard. This comprises a new front lower spoiler, black mesh finish for both upper and lower grille openings, side skirts and a more pronounced rear boot spoiler.
Other features include cruise control, metallic paint, electric leather seats, climate control, remote ICE controls, trip computer and 17 inch Cayman alloy wheels.
The Spirit will cost £23,800. Alternatively, the 'Sports Collection' package can be ordered for all existing X-TYPE saloons for around £1,495 excluding wheels, depending on the model.
Ford Core Profits Disappoint
Ford has reported a stronger-than-expected quarterly profit, but losses have widened in its core automotive business and the company's shares have sagged after it said U.S. regulators were looking into its pension accounting practices.
The second-largest U.S. automaker continued to lose share in its key U.S. market, with sales of Ford cars and trucks in the United States down 8.1 percent in September and 5.1 percent year to date.
Third-quarter net income reached $266 million (147 million pounds), or 15 cents a share, compared with a year-earlier loss of $25 million, or 1 cent a share.
Ford's automotive operations lost $673 million before taxes, compared with a loss of $604 million a year ago, while its credit arm earned $734 million. Ford Credit posted a 45 percent increase in profits, boosted by a $65 million decrease in credit loss provisions during the quarter and improved leasing results.
"The quality of the earnings is pretty much the same as it has been, skewed towards finance but still well in the black overall," Burnham Securities analyst David Healy told Reuters.
Automotive operations are key to Ford's future profitability and to achieve its mid-decade, annual pretax earnings target of $7 billion, especially since rising U.S. interest rates are expected to hurt profit margins at Ford Credit.
"I think that the finance earnings will come under some pressure as we go forward," Healy said.
In the third-quarter results, Ford excluded $312 million in pretax losses due to its withdrawal from Formula One racing. In a note to clients, Merrill Lynch analyst John Casesa said the Formula One charge implied "that auto operations lost $921 million pretax."
Last month, Ford said it was withdrawing from Formula One racing and ending car production at a Jaguar plant in Britain, slashing 1,150 jobs, or 15 percent, of the money-losing division's work force. The automaker took $64 million in charges in the third quarter, including $23 million for restructuring Jaguar.
Excluding the special charges, Ford said it earned 28 cents a share. On that basis, Wall Street analysts on average were expecting profit of 14 cents a share, according to Reuters Estimates.
Earnings from both Ford and rival General Motors, which reported lower-than-expected results last week, show how much the two Detroit auto giants rely on their lending arms, while they cut costs amid a profit-eroding price war. GM lost money in cars and trucks last quarter for the first time since 1998, mainly due to mounting losses in Europe.
Sec Seeks Information
Ford's core North American vehicle operations lost $481 million before taxes, compared with $108 million a year ago, primarily due to lower production volumes and unfavorable currency exchange rates. Ford's auto business also burned through $2.9 billion of cash in the quarter, excluding pension and health care contributions.
"The headline number looks better than expected, but in our view the underlying results were not encouraging," Deutsche Bank analyst Rod Lache said in a research note.
Separately, Ford and GM said the U.S. Securities and Exchange Commission has asked them for information on the accounting methods used for their pension and health-care plans.
Last week, the SEC said it was looking into possible accounting abuses involving employee pension funds. The automotive industry has been particularly hard-hit by rising health-care costs and underfunded pension plans.
Ford also raised its full-year earnings outlook to $2.00 to $2.05 per share, excluding special items, from a previous estimate of $1.90 to $2.00. Analysts expect the company to post about $2.03 per share for the full year, according to Reuters Estimates. Ford shares were down 44 cents, or 3.3 percent, at $12.95 on the New York Stock Exchange on Tuesday afternoon.
GM Workers Decry European Job Cuts
Thousands of embittered car workers rallied across Europe against mass job cuts planned by General Motors, as labour unrest disrupted output at more GM plants on Tuesday.
GM's labour leaders said more than 50,000 staff at 13 facilities demonstrated against their U.S.-based employer, which aims to cut its European workforce by up to 12,000 -- roughly a fifth -- to halt chronic losses in the region.
Blaming management for errors that left GM exposed to weak European car sales, workers demanded that the company keep all its Opel, Saab and Vauxhall plants open and refrain from forced layoffs as it slashes its European payrolls.
Police said at least 10,000 people marched in Bochum, a city in Germany's industrial heartland whose Opel plant has become a symbol of labour's rage over job losses amid inexorable pressure from low-cost competitors. Klaus-Peter Hansvencl, who works for cash-rich luxury car maker Porsche, said he and 35 colleagues came to Bochum to show solidarity with their embattled GM counterparts.
"This is a clear signal that people will not just put up with this and will take their fate into their own hands," he said.
"Our existence is on the line," added Heinz Brandt, a 41-year veteran of GM's German Adam Opel unit. "If the plant closes, it is all over for Bochum."
Labour unrest that has halted output at the Bochum car and parts factory since GM announced the cuts on Thursday disrupted two other GM plants in Europe that depend on Bochum for parts.
A lack of axles forced a factory in Antwerp, Belgium, to halt production, while a dearth of exhaust systems closed down assembly lines at Ruesselsheim, Germany, which is Opel's headquarters. But GM said most plants in Europe were functioning normally.
"The vast majority of our workforce around Europe is working regularly and is taking the attitude that we need to be constructive about this and that a strike or industrial action is not appropriate," a GM Europe spokesman said.
In Sweden, several hundred workers downed tools at the Saab plant in Trollhattan for a two-hour meeting with union leaders.
"I think it was a good demonstration. This is the only thing we can do right now -- to show some form of union solidarity across European borders,' said Katrin Svensson, 42, an engineer who has been working at Saab for 19 years.
Germany in Crosshairs
After a first round of talks on Monday with employee representatives, Opel said both sides aimed to make German works in Bochum, Ruesselsheim and Kaiserslautern competitive enough to survive beyond 2010. Talks will continue, Opel said, adding that it would explore all possible alternatives to forced layoffs.
But hard-pressed staff at the Bochum plant kept output idle while they decided whether to heed the German government's calls to return to work while negotiations go on. Opel management urged the IG Metall metalworkers union to use its influence to get Bochum up and running again.
German Economy Minister Wolfgang Clement again urged Opel workers to return to the assembly line.
"We're doing everything to save this site," he told ZDF television. "There is cause for optimism that a resolution is possible. There is a need for sharp cost-cutting, which I'm afraid can't be done without some layoffs."
The Roman Catholic bishop of Essen, Franz Grave, also told protesting Bochum staff to resume work. Labour leaders reacted with relief and defiance to signs that GM could scale back job cuts if costs still came down.
"Opel management's blockade has been broken," crowed Dietmar Hahn, head of the Bochum plant's works council.
"We are on the right track and will succeed," he said, deriding GM's drive for drastic savings. "All that the losers in pinstripes can think of is job cuts."
GM says it has to save 500 million euros by 2006 at its uncompetitive European operations, which have not made a profit since 1999 and still face overcapacity and intense pressure on prices in a fiercely competitive market. The bulk of the job cuts target high-cost Germany, home to the world's best-paid car workers and where one out of every seven jobs depends on the motor vehicle sector.
GM's radical cuts reflect the misery of a car-making sector in western Europe that is desperately trying to counter the euro's strength, high labour costs and intense competition from Asian rivals, which are steadily winning market share.
Ford's loss-making Jaguar luxury brand is cutting 1,150 jobs in Britain, and Volkswagen is trying to push through a 30 percent cut in German labour costs by 2011.
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