1.3M Fords, Toyotas, Hondas under investigation

Paul A. Eisenstein , The Detroit Bureau – 5 days

The National Highway Traffic Safety Administration has launched a series of safety investigations targeting nearly 1.3 million Ford Motor Co., Toyota Motor Co. and Honda Motor Co. vehicles.

Federal regulators caution that they have not decided whether recalls are necessary but automotive observers note that, having come under fire for getting too cozy with the industry in recent years, NHTSA is getting more aggressive when it comes to ordering manufacturers to resolve safety-related problems.

Toyota’s popular Prius – the nation’s best-selling gas-electric vehicle – is the target of one of the new investigations. A total of 561,000 of the high-mileage hybrids are involved, NHTSA probing reports that the vehicles’ steering shafts were improperly assembled.

The investigation focuses on Prius hybrids built between 2004 and 2009. Many of them were already the target of a previous Toyota recall involving steering shaft defects. That previous recall, announced last November covered 669,000 Prius hybrids also sold during the 2004 to 2009 model-years. According to the government, parts connected to the steering assembly could deform if a driver makes frequent, aggressive turns at low speeds.

The Prius was involved in an earlier steering-related recall that could cause loss of vehicle control. That service action covered 170,000 of the hybrids produced between 2004 and 2006.

If NHTSA orders a recall of the Prius it would prove a double black eye for the maker. The hybrid is the brand’s halo car, essential to its claims of being the “greenest” manufacturer in the industry. But it would also mark another major recall for a brand that has traditional been viewed as a quality benchmark.

In 2012, Toyota had the most vehicles recalled of any brand in the U.S. market, the third time it achieved that dubious distinction in four years. And it has already had 1 million vehicles recalled since the beginning of 2013.

NHTSA has separately launched an investigation of 724,000 Ford Escape, Fusion and Mercury Mariner and Milan models, triggered by 123 reports that the vehicles have experienced unexpected losses of power or completed stalled.

The problem could be the result of several issues including contaminated printed circuit boards and faulty throttle body assemblies. Vehicles produced between 2009 and 2011 are involved in the investigation.

The size of the investigation could also prove embarrassing to Ford which has been struggling to maintain a reputation for quality after seeing its scores drop in recent years in such key owner surveys as the 2012 J.D. Power Initial Quality Survey.

The investigation was triggered by a formal complaint filed by the North Carolina Consumers Council. That group has been actively involved in automotive safety issues in recent years, and has triggered several recalls and investigations.

The smallest of the three new NHTSA investigations targets 87,000 Honda Pilots produced for the 2005 model-year. The government agency has received 205 reports of unexpectedly severe braking that could be caused by a faulty sensor in the crossover-utility vehicle’s Vehicle Stability Assist system.

Copyright © 2009-2013, The Detroit Bureau

Read More

Throttle problems probed in Fords, Mercurys

A U.S. government safety agency has opened an investigation into complaints that the throttles can stick on some older-model Ford Taurus and Mercury Sable sedans.

The National Highway Traffic Safety Administration said in documents posted on its website Friday that 50 drivers have complained about the problem in cars from the 2000 through 2003 model years. No crashes have been reported and no one has been hurt, according to the documents.

The probe affects an estimated 310,000 cars in the U.S. that have four-valve, 3-liter V-6 Duratec engines. NHTSA says a cruise-control cable collar can fracture at a mounting bracket and cause the throttles to stick open.

No recall has been issued yet. Investigators will determine whether the problem is bad enough to cause a recall.

Ford says it is cooperating with the agency and doing its own analysis. The company can't offer advice to owners of the cars until it determines the exact cause of the problem, spokeswoman Marcey Zwiebel said.

"Until we are able to gather more information and complete our own investigation, we cannot speculate as to what actually occurred during the reported incidents," she said.

The Ford Taurus and Mercury Sable and are nearly identical cars. Ford ended the Mercury brand two years ago.

In March, NHTSA opened an investigation into sticky accelerators in as many as 1.9 million Tauruses and Sables from the 2001 through 2006 model years. Zwiebel said the agency closed that investigation without a recall, replacing it with the one announced today. The March investigation involved a different cruise control cable part, she said.

© 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Read More

Ford's Mulally enjoys $34.5 million payday

DETROIT — Ford CEO Alan Mulally is $34.5 million richer after shares granted two years ago vested this week.

The payout is sure to be a sore subject among some Ford factory workers, who have cited Mulally's pay when they have voted against contract changes. Mulally made $26.5 million in 2010, making him the ninth highest-paid CEO in the U.S. last year, according to calculations by The Associated Press. United Auto Workers President Bob King has called Mulally's pay "morally wrong."

But the company says Mulally's compensation is fair because it's tied to the shares' success.

"Our compensation philosophy is to align the interests of our leadership with those of our shareholders," Ford said in a statement Tuesday. "Ford's stock was $1.96 a share at the time of the 2009 awards, and is over $12 a share today. That is a more than a 500 percent increase, which benefits all stakeholders in the Ford turnaround."

Mulally was given 4.8 million stock units for his performance in 2009, a pivotal year in the company's turnaround when it posted its first annual profit since 2005. Ford withheld 1.9 million shares for taxes. The remaining 2.85 million units were converted to shares worth $34.5 million at Tuesday's closing stock price of $12.09.

The stock awards were disclosed Tuesday in a regulatory filing. Mulally's 2011 salary and other compensation will be released later this spring.

Mulally also received 1.2 million stock options that will fully vest in three years. Those options have a strike price of $12.49 per share. He was also granted 376,000 stock units for his 2011 performance that will convert to shares in 2014.

Mulally, 66, has been widely credited with turning Ford around since he was hired as CEO in 2006. He made the critical decision to mortgage most of the company's assets — including its Blue Oval logo — for $23.5 billion to fund a turnaround. That decision helped the company avoid taking government aid and filing for bankruptcy in 2009, two steps that rivals General Motors Co. and Chrysler Group were forced to take. Mulally also has streamlined global operations and introduced successful new models like the Ford Explorer SUV and Ford Fiesta subcompact.

In an interview with The Associated Press last fall, Mulally defended his compensation, saying it is entirely tied to the success of Ford.

"The vast majority of my compensation is at risk, because the numbers that you see are only realizable if we profitably grow the corporation. And that's the way it should be," he said.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Read More

Ford's union workers ratify new contract

Union workers at Ford Motor Co. overcame early opposition to a new four-year contract with the company and overwhelmingly approved the deal in voting that lasted two weeks.

More than 26,000 workers, or 63 percent of those who cast ballots, voted in favor of the pact, while almost 15,000, or 37 percent, opposed it, the UAW said in a statement Wednesday.

The vote means that new contracts have been approved at Ford and General Motors Co., with Chrysler workers just starting to vote on their deal. At all three companies, the union agreed to profit sharing and signing bonuses instead of annual pay raises, a novel concept that helps the companies control their costs yet rewards workers.

The contracts set the wages and benefits for 112,000 auto workers nationwide, and also influence the pay at auto plants owned by foreign companies, auto parts supply companies and other industries.

As part of the deal at Ford, the company promised $4.8 billion in new investments in its U.S. plants and 5,750 new jobs.

Most workers won't get annual raises under the contract, but they will get profit-sharing checks, inflation adjustment payments and other bonuses worth at least $16,700 through 2015. The deal at GM was similar, but the Chrysler pact has far smaller signing bonuses and profit-sharing checks.

UAW Vice President Jimmy Settles, the union's top Ford negotiator, said in a statement that workers at Ford were frustrated with the economy, a lack of pay increases and what he called "outrageous" pay packages for executives, yet they still approved the pact. Eighty-five percent of the union's members at Ford cast ballots, he said.

"As the nation's economy remains stalled and uncertain and its employment rate stagnates, we were able to win an agreement with Ford that will bring auto manufacturing jobs back to the United States from China, Mexico and Japan," union President Bob King said.

Despite the signing bonuses and profit-sharing, analysts expect a minimal impact to Ford's labor costs, in part because most of the new workers will be hired at lower wage rates than the company's longtime workers. Brian Johnson, an auto analyst with Barclays Capital, estimates the contract will add around $70 million to Ford's labor costs each year. If large numbers of older workers leave the company, Ford will spend even less, he said.

Johnson said Ford could see immediate benefits from the union approval in the form of a ratings upgrade, which would help lower its borrowing costs. Standard & Poor's Ratings Service has said it expects to raise Ford's corporate credit rating to "BB+" — which is one notch below investment grade — if the labor agreement is ratified.

Read More

Ford’s union deal could help investors too

Signing bonuses, profit sharing checks and inflation protection aside, Ford is billing its tentative new contract with the United Auto Workers union as a significant step forward in its bid for competitiveness — and CEO Alan Mulally’s goal of rebuilding the carmaker’s credit rating.

In fact, Ford shareholders could benefit from the deal as much as Ford’s unionized workers, especially if the new settlement helps the automaker restore its once-lucrative dividend payments.

“We believe this agreement ... will enable us to increase our overall competitiveness in the United States,” said Ford’s labor and manufacturing chief John Fleming, something he underscored by noting that the four-year contract, if ratified, will “also permit us to in-source work from Mexico, China, Japan and other parts of the world.”

Wild Wall St. Has the market volatility got you nervous? These cartoons may give you a little comic relief.

Cyber-thieves create fake Kelley Blue Book site US says Reebok toning shoes don't really Can you live on $9 an hour? Play the game

The settlement at Ford, reached Tuesday morning, comes nearly three weeks after the UAW union came to terms with General Motors, and the proposed contract largely follows the GM pattern.

That means an improved profit-sharing program, a signing bonus and inflation protection. But Ford, considered the healthiest of the Detroit carmakers, bumps the up-front cash to $6,000, a full $1,000 more than at GM, while it will offer four $1,500 lump sum payments meant to compensate for inflation, double what its crosstown rival came up with. Significantly, Ford and GM both avoided any fixed increases in wages — a move that auto analyst Joe Phillippi sees as critical to the companies' long-term competitiveness.

Ford, UAW reach tentative contract pact

He isn’t alone. Standard & Poor’s has signaled that it might follow an upgrade in GM’s credit rating by also upgrading Ford’s rating. That would meet one of Mulally's top goals — something Ford highlights on its website.

An investment grade rating would deliver more than just bragging rights. It would also mean a significant savings on Ford’s hefty debt. The carmaker borrowed heavily going into the last recession to ensure it could survive. As a result Ford — unlike GM and Chrysler — was able to avoid bankruptcy and a bailout from the federal government.

An upgrade “is paramount in Alan’s mind,” said Phillippi, founder of AutoTrends Consulting. “It would not only help lower [Ford’s] debt costs, but also signal their willingness to reinstate the dividend. They could do that now, but the ratings agencies would probably respond better if they wait until the debt rating has been restored.”

While Ford — like the rest of the auto industry — has been slammed by Wall Street in recent months it is generally seen as best positioned to take advantage of an eventual economic recovery. Ford’s sales were up 9 percent in September, well ahead of some key import competitors, including Honda and Toyota.

Ford remains a leader in the pickup market, with its F-Series and other light truck segments. But with models like the new Fiesta subcompact and midsize Fusion the automaker also is  gaining traction in the passenger car segment where it was long an also-ran.

As a result of the new contract, Ford will expand production of the Fusion, now built in Mexico, by adding a line at its plant in Flat Rock, Mich. That factory, known as AutoAlliance, has been operating as a joint venture with longtime affiliate Mazda Motors. But Mazda plans to pull out of the plant, and there had been concerns the facility would close. Its future seems to be rosy as a result of the new UAW contract.

Indeed, Ford’s Fleming announced that the carmaker will add another 5,750 U.S. hourly jobs once the contract is ratified, bringing to 12,000 the number of jobs it has either added or saved. All the new jobs, however, will be classified Tier II, meaning those employees will make significantly less than veteran Ford line workers. To soften concern among the rank-and-file, Ford has agreed to boost Tier II wages by $3.78 an hour to $19.28, still significantly less than the top tier makes.

Ford also will offer buyouts to veteran workers to open up even more Tier II jobs and lower labor costs further.

The auto industry has traditionally had a strong impact on what happens in the rest of American manufacturing, and the settlements at GM and now Ford are being well received, with Jay Timmons, president of the National Association of Manufacturers, declaring that this week’s [Ford] announcement “will create jobs, will make the manufacturing sector stronger.”

For the UAW, it’s two down and one to go. The union still needs to work up a settlement with Chrysler, the smallest and weakest of Detroit’s makers. A settlement seemed close at hand as negotiations approached the Sept. 14 expiration of the old four-year contract. But an unexplained glitch led UAW President Bob King to walk away from Chrysler and focus on the GM settlement -- a move that triggered the rage of Chrysler’s CEO Sergio Marchionne.

The two have since tried to patch things up and negotiations are again moving ahead, though Chrysler is reportedly balking at the signing bonuses and Tier II wage hikes approved at GM and Ford. It insists that anything that increases its costs — which average $50 an hour — must be offset by cuts in other areas.

Observers expect both sides will bend. If not, they face unforeseen risks. Terms of Chrysler’s 2009 federal bailout prohibit both a strike and a company lockout. As a result, a deadlock would leave the final terms of a settlement up to binding arbitration.

© 2011 msnbc.com.  Reprints

Read More

Sexist sock puppet is Ford's new spokesperson

Ford's new speaker has an attitude: he is rude, lustful and... bright orange.

Doug, the new pitchman for Ford, earlier this month and he debuted on YouTube anything other than the typical suitable PR flak that you would image represents focus the cumbersome centuries-old automaker (we hope that Mrs some real-life speakers would call reporter "pretty pants.")

"I am really concerned." I feel that he was out of control there, "a Ford Executive in a YouTube video said press conference after Doug's fake debut." "I would like to know whether he will be wearing at any point."

The social media campaign is the obvious attempt of the redesigned compact car for people with, well, the market a sense of humor. She probably will see not be Doug's edgier antics on broadcast TV, but you can friend him on Facebook. With all the high-tech bells and whistles in the new focus - think screen stereo controls and sonar based parking - is it useful, that the company is the car for a public Web savvy marketing.

Jon Beebe, digital marketing manager for Ford, said Mashable is it new videos added each week following a story arc in the next few months.

"The 2012 focus is so wildly different - we wanted to grab their attention and have sure," Beebe said Mashable.

Doug is the latest entry in the annals of marketing PuppetMaster. You think because Fonera's speaking dog or Kermit the frog pitching the Ford escape? A top 10 list of famous puppet ad campaigns you check out this column in AdAge.

What do you think of Doug: funny or offensive?

© 2011 msnbc.com.  Reprints

Read More