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February 4, 2010

NHTSA Confirms Probe of Toyota Electronic Throttle Systems

The National Highway Traffic Safety Administration is taking a second look at the electronic throttle systems in Toyota vehicles that are allegedly prone to sudden acceleration, says Transportation Secretary Ray LaHood, confirming news reports of the probe.

LaHood tells reporters the probe also will include complaints of sudden acceleration in vehicles made by other automakers. He says NHTSA will study whether electromagnetic interference from power lines could affect the performance of electronic throttle controls. He says the agency plans to meet with automakers and suppliers, independent experts and safety advocates.

NHTSA has previously examined a handful of Toyota vehicles blamed for sudden acceleration and found no defect. LaHood says the agency has no reason at this point to believe the systems pose a safety risk. Toyota says its testing has found no evidence of a problem that could cause unintended acceleration.

Safety experts suggest to Dow Jones Newswires that other electronic devices such as cell phones or Blackberries could interfere with a vehicle’s electronics. They note that airplane passengers aren’t allowed to use such devices during takeoff and landing for fear they might affect flight controls. Hospitals also restrict the use of electronic devices around medical equipment.


Chrysler Boosts Sales Outside U.S.

Chrysler Group LLC says it sold 11,500 vehicles outside the U.S. last month, an increase of 9% from January 2009. Results were buoyed by a 132% surge in sales in China.

Last month marked Chrysler’s first year-over-year gain in overseas sales in 20 months. Demand increased 55% in the Asia Pacific region and in the region encompassing Africa, the Middle East, eastern Europe and Russia. But volume fell 21% in western and central Europe and 9% in Latin America.

Demand for the Jeep brand jumped 16%, led by the Wrangler small SUV. Sales of the Chrysler and Dodge brands increased 7% and 4%, respectively.


Honda Profit Soars More Than Six-Fold

Honda Motor Co. reported a $1.5 billion net profit in the fiscal third quarter ended Dec. 31, up from $222 million a year earlier, despite a 12% slump in sales to $24.7 billion. Volume declined 3% to 914,000 vehicles on weaker demand in Europe and the U.S.

The company credits its higher profits to sales rebounds in China and India and to the popularity of its small, fuel-efficient cars. Cost savings of an estimated $5.8 billion in the current fiscal year also are boosting income, analysts say.

Honda raised its earlier forecast for net earnings in the fiscal year that ends March 31 by 71% to $2.9 billion, a 93% year-over-year increase. Honda cites a weaker-than expected yen for the third upward revision of its profit outlook since the fiscal year began. Sales are expected to decline 15% to $93.8 billion for the full fiscal year.

The company says its worldwide car sales will probably decline by 3% to 3.4 million units in the 12-month period ending March 31. It anticipates sales will grow to 3.6 million in the fiscal year beginning April 1.


DOT Secretary’s Gaffe Rattles Toyota Owners

Transportation Secretary Ray LaHood told a Congressional appropriations subcommittee yesterday that the owners of 2.3 million recalled Toyota Motor Corp. vehicles in the U.S. should stop driving them until the company fixes the defect.

His comment touched off a frenzy among the company’s vehicle owners, dealers and investors.

At a press conference following his testimony, LaHood says he misspoke and meant only that Toyota owners should get their vehicles fixed quickly. “If you own one of these cars, take it to a dealer,” he added.

The Dept. of Transportation further clarified that owners should contact their dealers to schedule an appointment for the repair, which involves installing a steel reinforcement bar in the accelerator pedal assembly to eliminate the excess friction that has caused pedals to stick. Toyota reiterated that the recalled models are safe to drive unless a pedal is difficult to depress, slow to return to idle or feels jerky.

But LaHood’s remarks still left Toyota owners more confused than ever about the roadworthiness of their vehicles. Dealers, who are just beginning to receive the parts needed to perform the repair, say they were quickly deluged with calls from anxious customers.

Separately, Toyota said yesterday it will recall an estimated 30,000 vehicles from the 2007-2010 model years in Mexico for the same problem. The company says it has received no reports of sticking pedals there, but all seven models are built in Canada and the U.S. and contain the defective pedal assembly.

The models involved in the Mexican recall are the Camry and Corolla cars, RAV4, Highlander and Matrix crossovers, Tundra pickup truck and Sequoia SUV. Toyota sold 52,000 vehicles in Mexico last year.


Wal-Mart Drops Exide, Makes JCI Its Sole Battery Supplier

Wal-Mart Stores Inc., the world’s largest retailer, has awarded all of its U.S. transportation battery business to Johnson Controls Inc. and ended its relationship with Exide Technologies Inc.

Milwaukee-based JCI says it will be Wal-Mart’s sole supplier of batteries for cars, pickup trucks, motorcycles, boats, jet skis and garden tractors for stores in the U.S. The company has been a Wal-Mart supplier for more than 25 years.

Milton, Ga.-based Exide says its business with the retailer will phase out by year-end. The company says Wal-mart accounts for a “significant portion” of its sales in the Americas.


Japan Orders Toyota to Probe Brake Problems in Prius Cars

Japan’s transportation ministry instructed Toyota Motor Corp. yesterday to investigate reports of problems with the brakes in the latest generation of its Prius hybrid sedan, which is the country’s best-selling vehicle.

The ministry says it has received 14 complaints about Prius brakes, almost all since early December. Many reportedly involve slow brake response on icy or bumpy roads. The ministry says it does not currently believe the Prius has design or structural flaws. The government says it routinely asks carmakers to investigate many of the 5,000 complaints it receives annually.

The Nikkei reports that the U.S. National Highway Traffic Safety Administration has received 102 complaints about the brakes on the revamped Prius. The Japanese newspaper does not cite its sources. All Priuses sold in the U.S. are made in Japan. NHTSA says it is looking into possible Prius brake problems.

The Prius troubles come as Toyota is struggling with a pair of worldwide recalls involving some 8 million vehicles equipped with accelerator pedals that can jam or stick. None of the recalls involves vehicles sold in Japan.

Senior executives at Honda Motor Co. and Mitsubishi Motors Corp. said yesterday they are worried that the image of all Japanese automakers could suffer as a result of Toyota’s woes.

Toyota shares have lost one-quarter of their value since the company announced the recall of 2.3 million vehicles in the U.S. two weeks ago. Shares are trading at a 10-month low of $35.43 on the Tokyo Stock Exchange.


GMAC Will Shed 550 Jobs

Auto and home lender GMAC Inc. says it will eliminate 554 jobs and close three offices as it works to reduce costs.

GMAC’s money-losing Residential Capital mortgage unit plans to cut 313 jobs and close an office in North Carolina. The auto loan business will close offices in North Carolina and Tennessee and shed 241 jobs.

The company said last month it lost about $5 billion in the fourth quarter of 2009. It will release detailed results today.


Dura Names Von Staden as CEO

Dura Automotive Systems LLC, a maker of automotive trim and control systems, has appointed Torben von Staden, president and CEO of Global Automotive Systems, as its new president and CEO.

Von Staden succeeds Tim Leuliette, who becomes Dura’s non-executive chairman and a managing director at hedge fund Patriarch Partners LLC, which acquired a majority stake in Dura on Jan. 21. Leuliette, who had been president, CEO and chairman, joined Dura when it emerged from Chapter 11 in June 2008. Dura’s CFO, chief administrative officer, corporate development chief and von Staden will report to Leuliette.

New York City-based Patriarch said in December it would buy a controlling stake in Dura for $125 million and integrate Dura with its metal forming and welding company, Global Automotive Systems. The combined company is expected to generate $1.6 billion in annual sales.


Goodyear Hires Andersson to Head North American Unit

Goodyear Tire & Rubber Co. has recruited Curt Andersson, president of Cooper Industries plc’s electrical product maker Cooper Crouse-Hinds, to become president of the tiremaker’s North American operations on Feb. 16.

Andersson succeeds Richard Kramer, who became Goodyear’s chief operating officer last June. Andersson previously worked for bearings maker Timken Co. and conglomerate General Electric Co.