Carmakers Shed Non-auto Units
First computer services and satellites, then armored military vehicles.
Now locomotives. Detroit automakers, moving to refocus management and
improve their balance sheets, are stepping up efforts to shuck
businesses unrelated to designing, engineering and assembling
automobiles. Through the years, Detroit automakers have owned aircraft
builders (Gulfstream), appliance makers (Frigidaire), computer data
management firms (EDS) and marine engine units. But under pressure to
cut costs, raise cash, boost profits and enhance returns on capital,
Detroit automakers are shedding the businesses. GM is selling Hughes
Electronics Corp., which owns DirecTV, the nation's largest provider of
satellite television, to News Corp. Earlier this year, the automaker
sold a defense unit to General Dynamics Corp. for $1.5 billion. "With
the competition today, you have to focus fully on your core business --
get back to basics," said David Cole, chairman of the Center for
Automotive Research in Ann Arbor. "It's a matter of survival. These
other businesses could be viewed as a distraction." At the same time,
the divestitures represent a way to raise cash to pay down debt and
shore up unfunded pension funds and other obligations.
(Source: The Detroit News)


Vehicles Perform Well in New Frontal Crash Tests
All seven cars and minivans that were put through frontal crash tests
got the highest rating by the insurance industry, including makes that
did poorly when earlier models were tested. The 2003 models of the
midsize Mazda 6, Infiniti G35 and Saab 9-3 and the larger Lincoln Town
Car and Mercedes E Class earned a "good" rating from the Insurance
Institute for Highway Safety. Two 2004 minivans, the Toyota Sienna and
the Nissan Quest, also earned "good" ratings. In the test, a vehicle
going 40 miles per hour is crashed at an angle into a barrier. A "good"
rating means a driver wearing a seat belt probably could walk away from
a similar crash with minor injuries. Jim Schell, a spokesman for Saab's
parent company, General Motors Corp., said the improvement was good
news. The Insurance Institute, a research group financed by insurance
companies, says automakers are making great improvements in safety
engineering. "Good performance in the institute's frontal offset crash
test program is now the norm, ... but it wasn't always that way,"
Insurance Institute President Brian O'Neill said.
(Source: The Associated Press)


Feds Probe GM Vehicle Steering
The federal government is investigating a possible steering defect that
could affect 714,000 General Motors Corp. vehicles. The National Highway
Traffic Safety Administration said Monday it has received 357 complaints
that the steering in the vehicles locked up or lost power. In some
cases, the vehicles became difficult to steer while making left turns.
The vehicles involved were built between Jan. 1, 1996, and Oct. 31,
1997, NHTSA said. They are the 1996-98 Buick Regal, the 1997-98 Buick
Century, the 1996-98 Chevrolet Lumina and Monte Carlo, the 1996-97
Oldsmobile Cutlass Supreme and the 1998 Oldsmobile Intrigue. GM
spokesman Jim Schell said the company is cooperating with the
investigation. NHTSA's vehicle investigations can lead to a recall.
(Source: The Associated Press)