Ford of Europe, which two months ago lowered its second-half-year production target by 80,000 vehicles, has announced that it will increase its fourth quarter production by 40,000 vehicles. This is in anticipation of an increase in demand later in the year and the introduction of new marketing programs to stimulate demand even further.
Martin Leach (46), appointed as president and COO of Ford of Europe a year ago, has resigned “to pursue new opportunities”, says the company. This follows publication of Ford Europe’s second quarter figures, which show that the car manufacturer made a 2Q pretax loss of $525 million (462 m Euro). Leach’s job will be carried out by David Thursfield, president of international operations and chairman and chief executive of Ford of Europe, until a replacement is found.
It was in August last year that Tim Parker (48) was named as the new Chief Executive Officer of Kwik-Fit, following the purchase of the company from Ford by CVC Capital Partners for a reported £330 million.
Superior Industries is to be the supplier of aluminium wheels for the Ford F-150 truck, supplying five different styles of wheels for the 2004 model. The 2004 model is the latest version of the F-150, which has been the best-selling vehicle of any type in the USA for the past two decades and the country’s best-selling truck for the past 25 years.
Back in May 1996, Kwik-Fit was on the acquisition trail, buying a number of independent chains. The then Chairman, and yet to be knighted, Tom Farmer, said that the group was aiming to build up a second retail chain, made up of regional companies with a strong local presence. They would retain their original identities and, in some cases, compete with local Kwik-Fit centres. Although there was no national identity, the second chain did have a name – Tyre Plus. Now, almost exactly seven years later, the situation is very different, as Kwik-Fit has announced that Tyre Plus is to be integrated into the group’s core operation, with all the fast fit business coming under a single management structure. Kwik-Fit, under its new owners CVC Capital, has been undergoing an extensive review of all aspects of its operations and the decision to integrate Tyre Plus is the latest result of this process. So what will it mean? Firstly, the Tyre Plus head office in Motherwell will be closed, as will other support offices around the country. The Tyre Plus chain consists of 256 centres and the initiative will see the closure of less profitable centres and those that compete with Kwik-Fit centres. In all, 140 Tyre Plus centres will be closed, with the remainder being re-badged as Kwik-Fit centres. What will happen to the employees in the centres that are to close? Kwik-Fit says that “the majority of staff affected will have their employment transferred to Kwik-Fit” and that the company is working closely with the T&GW trade union to ensure that staff are aware of their position and the proposals on offer. Redundancies will be kept to a minimum and Kwik-Fit will make a further announcement after having consulted with the T&GWU. When the dust has settled, the number of fast-fit centres being managed within Kwik-Fit GB will total over 700 and it is an indication of how the trade – and Kwik-Fit’s aspirations under the new management – have changed as, before the company was sold to Ford, its stated aim was to be operating from 2,000 service points by the year 2005.
In North America, Ford and GM are encouraging their suppliers to produce more parts in China, not only to support locally-made vehicles, but to enable them to match a “world price”, based on a Chinese price. The companies offer a deal where, if a supplier builds a factory in China, it can sell to Ford and GM factories in North America. GM Europe denied that it was pressurising suppliers to re-locate, although if a supplier asked GM how he could cut costs, he might be advised to move to China or Korea.
Ford’s head of the company’s Premier Automotive Group (which includes the Volvo, Jaguar and Land Rover marques) says that “it was not out of the question” that the group might post a profit in Europe this year, despite a weakening market generally.
At its AGM, which coincided with the company’s 100th anniversary, Ford shareholders rejected proposals that would have weakened the Ford family’s hold over the company had they been accepted. Ford family members own four per cent of the company’s shares but control forty per cent of the voting rights. A further proposal, to set up a committee to investigate possible conflicts of interest between the Ford family and other shareholders, was also rejected, but attracted almost twenty per cent of the vote.
Hankook Tire Manufacturing Co. will be supplying Ford with tires for the F-150. “Supply to the world’s top auto maker should enhance the brand recognition of Hankook Tire in the global market,” said Cho Choong-Hwan, Hankook’s top executive. Hankook Tire America Corp. is expected to release more details on this domestic OE contract with Ford soon.
Pirelli has ambitious plans to increase its presence on the US market, Dr. Francesco Gori told assembled journalists at a new tyre presentation in Georgia. Georgia had been chosen as it is the state where Pirelli’s latest MIRS factory has been built, and it is this technology that is at the heart of the new strategy. The new tyre being launched was the Scorpion STR, which is already homologated on vehicles such as the Ford Excursion and the Ford Super Duty F-250, and which is made in the MIRS factory. Dr. Gori said that $100 million had already been invested in Pirelli’s US operations and this would increase significantly over the next couple of years. Pirelli, he went on, plans “a dramatic increase in US growth”. The Scorpion STR combines Pirelli’s expertise in the areas of high performance and 4×4 tyres, to produce a product that can cope with the demands of modern-day vehicles. STR stands for Dynamic Stability, all weather Traction and load and speed Rating. Stability comes from the design and materials used; a dual ply radial carcass is flexible and resistant to give uniform support, improved comfort and better resistance to sidewall damage.
Pirelli P6 Four Seasons tyres are to be fitted as standard on the Ford Focus ZTS in the USA and are an option on the ZX3, SE and ZX5 models. The size in question is P205/50 R16 87H and the tyres will be manufactured in Pirelli’s Brazilian factory and shipped to Ford’s plants in Hermosillo, Mexico and Wayne, Michigan. Pirelli has enjoyed OE success in the US with summer tyres on cars imported from Europe, but this latest contract puts the company in the forefront of OE all-season business.
Market analysts UBS Warburg have reduced their ratings on both Ford and GM. Ford moves to “Reduce2” from “Neutral 2” and GM goes from “Buy 2” to “Neutral 2”. The move comes despite a good 1Q performance from Ford, but UBSW thinks that the company will still struggle versus the competition. On the other hand, a stronger Ford means the price war will last longer, adversely affecting GM, hence their downgrade.
Industry analysts Goldman Sachs have upgraded Ford to In-Line and downgraded GM to Underperform. This follows better-than expected first quarter profits from Ford – net income was $896 million, compared to a loss of $1.1 billion in 1Q last year. GM has warned that it might not meet its profit target this year.
Dunlop Tyres Australia has signed a two-year exclusive contract to supply vehicles in the ‘V8 BRutes’ racing series. Founded two years ago, the series – which features pick-ups like the Ford Falcon XR8 or Holden Commodore SS in racing trim – has become more and more popular in Australia. From now on, competitiors will use 245/40 ZR 17 sized Dunlop SP Super Sport Race tyres. Made at the German Dunlop plant in Hanau, the SP Super Sport, which is available in nine sizes in 17″ and 18″ can be used as a road tyre, but only under dry conditions and by extreme sport oriented drivers.
Once again Ford and Firestone have settled a roll-over claim. This case attracted an even higher level of interest as two of the victims of the crash were high profile people. Earl Shinhoster, a veteran NAACP civil rights official in Atlanta, died in the 2000 Ford Explorer crash which also injured Samimah Aziz, a goddaughter of the Rev. Jesse Jackson, and the driver, Ademah Hackshaw. The Explorer was in a motorcade with the first lady of Liberia and a state patrol escort making this an unusual case. Ruby Shinhoster speaking for herself and two other survivors said “I’m relieved …. but they still haven’t admitted they did anything wrong.” Bridgestone/Firestone spokesman Dan MacDonald said the company was pleased to resolve the case without a trial. “Although the tire line involved in this case has an excellent safety record, protracted litigation is in no one’s best interest,” Firestone has now settled some 700 such cases. Ford spokeswoman Kathleen Vokes said the company believes the Explorer is a safe vehicle and statistics back up the claim. Ford and the tire maker had said the accident happened partly because the tire was 7 years old and the motorcade was travelling at least 80 mph in a 70 mph zone.
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