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Ford not interested in Chrysler assets

Ford Motor Company (NYSE: F) may not need any help from the U.S. federal government, but it doesn't want any part of Chrysler should that automaker go through bankruptcy protection and/or be broken up into pieces. Ford also has no interest in Chrysler's brands such as Jeep and Dodge. Ford's Mark Fields indicated at the International Auto Show this week that Ford is only focused on Ford at this time, and the possibility of Chrysler being history could be shockingly near.

Continue reading Ford not interested in Chrysler assets

Chrysler recalls nearly a quarter million vehicles

An electrical problem in Chrysler LLC's Chrysler Sebring and Dodge Avenger vehicles is resulting in a massive recall of 212,347 cars to fix the problem.

The vehicles in question involve models from 2007-2008 that deploy standard tire pressure monitoring systems. Apparently, electrical connectors in the system have been rusting, leading to problems starting the engine, dead batteries, inoperative cruise control, or even the vehicle's engine stalling.

Chrysler has stated that there have been no injuries reported as a result of the problem, but that it had already received nine reports from consumers that their engines had stalled out on them.

Continue reading Chrysler recalls nearly a quarter million vehicles

Before the bell: NOK, NVS, Chrysler

Main market news here: Futures flat ahead of earnings reports

Finland's Nokia Corp. (NYSE: NOK) -- with a global market share of 39 percent, the world's largest maker of cellphones -- posted third-quarter earnings nearly double earnings from Q3 2006, citing strong sales in Asia.

Swiss pharmaceutical giant Novartis (NYSE: NVS) posted weak earnings and disclosed forthcoming layoffs in the U.S. Novartis plans to cut 750 staff jobs, as well as ending relations with 510 contract sales representatives.

Reuters reported that Chrysler, still streamlining since its recent purchase by Cerberus Capital, could discontinue a number of models. The Wall Street Journal said models awaiting the hatchet include the Chrysler Pacifica, Dodge Magnum and the PT Cruiser.

Auto recall list for 2007 is suprising

BusinessWeek put together a list of the most recalled new cars in 2007. What is surprising is that four out of the top five vehicles were imports, and not domestic cars. Chrysler's (NYSE: DAI) Jeep Liberty, with 149,605 recalls, was the only domestic in the top 5. Chrysler had three other significant recalls, including the new Dodge Nitro, Jeep Wrangler and Chrysler Sebring. General Motors (NYSE: GM) had two vehicles recalled, while Ford's (NYSE: F) lone recall was from its Expedition line, and only totaled 10,000 SUVs.

Toyota's (NYSE: TM) Sequoia hit No. 2 on the recall list, with 533,000 vehicles recalled. This is a surprising improvement from last year, where Toyota recalled nearly 700,000 vehicles.

The new Volkswagen (OTC: VLKAY) Beetle took No. 1 on the recall list; triggered by the potential for a brake light switch to malfunction in over 1 million vehicles if it was installed incorrectly.

Take a look at BusinessWeek's slide show here.

Eight cars bound for steep depreciation

I may never hear the word "depreciate" without thinking of the late great Michael Hutchence and the INXS half-single, "Mediate." Anyway...

After consulting Kelly Blue Book, arguably the expert on the subject of used cars, Forbes released its list of the eight worst new-model vehicles in terms of projected depreciation. Claiming the dubious top spot is the Buick Ranier SUV. With a base price of $32,285, the vehicle, made by General Motors (NYSE:GM), is expected to retain just 42% of its value after two years. Five years out, the Ranier will be worth about 26% of its purchase price. The Dodge Caravan Minivan, a DaimlerChrysler (NYSE:DCX) vehicle that I'm fairly certain half of my new-Mom friends have purchased in the past 12 months, starts with a base of $19,770 but will keep just 41% of this value 24 months later. Third is the Dodge Durango SUV (pictured, right), with a base price of $27,055 and projected value retention of 38% after two years.

Rounding out the top eight:

  • Ford (NYSE:F) Crown Victoria Sedan
  • Ford E-Series Van
  • Kia Amanti Sedan
  • Kia Spectra Compact
  • Ford Mercury Grand Marquis

Stay tuned for tips on smart shopping for a vehicle that won't utterly disappoint when it becomes time to trade it in ...

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Chrysler's big pain in the Benz

Just as DaimlerChrysler (NYSE:DCX) is getting ready to let Chrysler go out on its own -- whether through a private equity route or with a GM-type suitor, they get hit with a recall. Mind you, not a small recall, but nearly a half a million cars and SUVs. This is the equivalent of being dressed and ready for the prom and then having your pants split in the seat after the first dance. Uncomfortable, annoying, and embarrassing.

The recall encompasses several models from the Jeep Liberty, the Dodge Durango, and the new Dodge Avenger. The latter's name is exactly what's happening to poor old Chrysler. The costs of the recall of course are borne entirely by Daimler, and the dealers must follow up with customers to ensure compliance. All in all, it's one giant pain in the Benz.

Daimler has not quantified the dollar amount involved in this recall and, at the end of the day, it ends up being a rounding error to Daimler's earnings number. Nonetheless, a significant cost it is. The rule of thumb as told to me by a car dealer a few years ago, a "typical, minor" recall costs the manufacturer about $150 per auto, when factoring in labor cost and materials. The dealers love recalls, as it guarantees to keep all the mechanics busy, and no one can blame the dealer or mechanics for the error. For once, customer and mechanic are on the same side.

If the $150 cost per recalled vehicle is consistent, Daimler is facing about a $75 million expenditure, but the timing could not be worse.

Georges Yared is the author of Stop Losing Money Today and Baby Boomer Investing. Please visit www.georgesyared.com

Chrysler goes mini

DaimlerChrysler (NYSE:DCX) and Chery Automobile Co. of China will join forces to manufacture a line of tiny cars to be sold under either the Chrysler, Jeep, or Dodge brand. The move is the latest in the phenomenon of outsourcing of U.S. manufacturing jobs, as U.S. labor costs would be too high for such inexpensive cars.

The move is a good one for the American consumer. A line of small, affordable cars is good for the financial situation of working Americans and for the environment. If you're like me, you're getting sick of all the big SUVs everywhere, and you'd love a return to smaller compact cars that are better for the planet and less dangerous to other vehicles.

Hey AutoNation, it's awfully quiet over there!

One of the stocks that I like to keep an eye on is AutoNation (NYSE: AN). It interests me due to their number one position in online auto sales and because of their robust size. I'm getting a bit curious about how quiet it is over there in terms of news items. I'm not the least bit worried about what they're up to. As I've said before, generally a lack of news means that things are going in a business-as-usual fashion.

As of this writing, the most current news item you'll find on the AutoNation website is their Oct. 26, 2006 news release of their third quarter earnings report. . The most current news piece I can find on the web is a reference to the AutoNation Inc. presentation at the China Auto Services Market Summit, December 5, 2006 at JW Marriott Hotel Shanghai . What this signals to me is that AutoNation is yet another active participant in the massive movement to exploit China's blooming economic opportunities. The summit seemed to be geared more towards automobile service operations than towards outright retailing of automobiles. The logistics of moving cars to market, the financing of new vehicle purchases, underpinning the retail segment, leasing, renting and mechanical service were among the topics of focus. The entire summit signals to me that the groundwork is being carefully laid for a major influx of automobiles into mainland China.

I like the feel of the whole thing. "Detroit's" big three are surely in full preparation for this impending boom. Aren't they? I want to see some advertising fliers showing Chevrolet (NYSE: GM) Silverados parked along the Great Wall. I want to see pictures of the streets of Peking jammed with Nitros (NYSE: DCX) and Explorers (NYSE: F). I want to see some of the money we've spent on cheap Chinese die cast tools and toys coming back as wages for American workers. I want my piece of their economy now. C'mon gang, it's time to bring it on home!

Holy crap: car companies' bleep-heavy advertising

binky and friends in dodge commercialWant to get your customers' attention? Swear at them. That seems to be the latest marketing strategy from Big Auto, who's peppering ads with barely bleeped-out swear words. While the most famous one is Dodge's Caliber advertisement showing a panel of sweet imaginary creatures (the fuzzy puppet, the fairy unicorn, 'Binky') reacting with fear to the auto, the most profane and disturbing is probably Volkswagen's crash commercial, where two friends get in an accident and one of them says, "holy shi " [fade to black].

Sure, people swear. Lots of people swear, and I'd be willing to bet that a majority of VW and Dodge customers are potty-mouthed. (I know, sweeping generalizations, but that's what marketing is about folks!) But is this really the best way to communicate brand? Shock tactics?

It depends, I'm sure, on the consumer. DaimlerChrysler AG (NYSE:DCX) unit Dodge's vehicles are heavily marketed to the wanna-be gangster audience (Snoop Dogg and 50 Cent are famous for wanting to be the first customers of Magnum, Charger, and the Chrysler 300), for whom "crap" is probably not even considered swearing, whereas Volkswagen AG (FRA:VOW)'s consumer profile is famously young and understatedly hip. Hip enough, it seems, to say "holy shit" without blinking an eye.

As for me? I don't give a damn about the swearing (see what I did there?). I'm much more disturbed by the depiction of the accident in the VW commercial, which always jolts me out of my primetime TV buzz and makes my heart beat pitter-patter. Entirely not the shock I want while I'm being entertained -- like the cute little hedgehog says in the Dodge commercial, it doesn't make feel all warm and fuzzy inside.

AOL hopes 'Saved' will be a 'Closer'

TNT's is about to drop yet another original drama series on us. It's called Saved, and AOL products will be integrated into the actual show.

Saved will air Mondays at 10 p.m. starting June 12. The series launches with a commercial-free premiere episode, sponsored by Quizno's and Dodge.

"Our integration with both Saved and [the TNT series] The Closer -- an established hit -- allows us to tap into new audiences and broaden our reach in a unique way," says Richard Taylor, senior vice president of brand marketing for AOL. "We can showcase the value of AOL within the actual storyline, making it relevant to the characters' lives."

According to the press release, Saved focuses on a young, hip, directionless slacker named Wyatt Cole. Cole -- played by Tom Everett Scott (Boiler Room, That Thing You Do) -- kicks around Portland, Oregon, trying to figure out what to do with his life and struggling to live in the shadow of his high-achieving parents.

The hook? He's a paramedic.

The catchphrase? "By saving other people's lives, he will be able to save his own."

I can only imagine how this one is going to work...

SCENE: Burnside Bridge, Downtown Portland. Single-car auto accident. Cole is applying a tourniquet.

Cole: "I can't deal with all these pressures. They've been with me ever since childhood. I mean if only they'd placed PARENTAL CONTROLS on their expectations of me --"

Auto accident victim [suddenly coming back to consciousness]: "You mean like the PARENTAL CONTROLS on AOL?!"

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Last updated: November 27, 2009: 12:25 AM

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