Ford, UAW cut deal on retiree health benefits

Ford has hit a home run in negotiations with the UAW, setting a precedent for GM and Chrysler and freeing up the cash it needs to stay out of the government bailout cookie jar.

Embargo be damned! 2010 Mustang pics & specs leaked before LA debut

The cat... or rather... the colt is out of the bag on this one.

We were just a day and a half away from the new Mustang's official debut at the LA Auto Show, but thanks to a bit of file mismanagement on Ford's side, the dam has burst. Since everyone else is doing it, here's the scoop on Ford's new steed.

Technically, the 2010 Mustang is a mid-model refresh of the SW195 platform that debuted in 2005 to immediate acclaim. But with the exception of the roofline, all exterior sheetmetal is new for 2010.

The remade Mustang starts with an aggressively raked grille which features the first new Mustang emblem since the car's introduction in 1964. Both the V-6 and V-8 GT wear front bumpers unique to each model. The headlamps and turn signals are now integrated into one unit, drawing inspiration from the 1970 Mustang Boss series.


On the V-6 models, the fog lamps are located on the lower fascia, while on the GT, the fog lamps are again located in the upper grille – a pattern similar to the original lamps of the 1967-68 Mustang. The new headlamps, lower fascias, fenders and grille are capped by a powerdome hood that adds to the muscular appearance while allowing greater air circulation underneath.

"We understand Mustang's heritage and iconic status it has in the world and as a symbol of Americana," said Peter Horbury, executive director of US design. "We wanted to create a face that is more muscular but unquestionably, unequivocally Mustang and carry that spirit through to the entire car."
Along the new Mustang's flanks, both the front and rear fenders are tautly flared at each wheel arch. Taking inspiration from the 2006 Guigiaro Mustang Concept, the new Stang's rear fenders now swell to a pronounced flare just below the rear quarter window. "It helps give the car aggressive, forward direction, like it's ready to jump," said Doug Gaffka, Mustang chief designer.

Out back, new LED tailights debut along with a revised trunklid and rear bumper. Firing sequentially from the inside cornet, the three red LED lamps mimic the sequential turn signal unique to the Mustangs of the late '60s. The reverse lamps are tucked in vertically between each red lamp, creating a modern version of the classic Ford three-lens taillamp.

Under the hood and on the road, improvements abound
The 2010 Mustang 4.6-liter V-8 benefits from the cold air induction system, taller final drive and re-calibrated ECU which debuted on the 2007 Mustang Bullitt.

Now producing 315 horsepower, the GT's ECU will now advance engine timing and richen fuel trim when premium unleaded is used, rewarding drivers with a deeper well of midrange torque. The 4.0-liter V-6 carries on unchanged, with 210 horsepower.

Suspension-wise, wheel and tire combinations are an inch bigger across the board, ranging from 17 to 19 inches, depending on the model. The shocks have been retuned on all models as well.

"We adjusted the springs, stabilizer bars and shocks to better balance the ride, steering and handling for all models, which results in a more engaging driving experience," adds Mustang Vehicle Engineering manager Tom Barnes. "The 2010 Mustangs feel more controlled for steering and handling, yet retain a good ride balance."


There's new safety gear on hand as well. Electronic Stability Control (ESC) is now standard for 2010, complementing Mustang's all-speed traction control and anti-lock braking system (ABS). Dual front and front seat mounted side airbags are standard equipment on every 2010 Mustang.

Inside, a one-piece instrument panel design is new for 2010. Crafted in seamless soft-touch TPO (Thermoplastic Olefin) resin, the new assembly offers fewer places for squeaks to develop, a goal Ford engineers sought out with the new Mustang.

"That's the difference between good enough and exceptional," said Gary Morales, Interior Design manager. "We wouldn't accept anything less than leadership design and world-class craftsmanship."

The 2010 Mustang will offer the latest version of Ford SYNC bluetooth and multimedia integration system, which now includes 911 Assist and Vehicle Health Report. The somewhat frivolous My Color™ system returns for 2010, which allows drivers to customize the car's gauge lighting from a range of 125 colors.

To see more of the 2010 Mustang, visit Ford's mini-site here:
http://www.fordvehicles.com/the2010mustang/

GM to Washington: Loan $25B now or lose $150B later

If General Motors fails, nearly three million jobs could be lost in 2009 as part of a cascading collapse of suppliers, shipping companies and ultimately dealers. So argues General Motors in a video released as the embattled automaker campaigns for immediate federal aid in the wake of a cash-flow crisis.



Released on Sunday, GM's four-minute video highlights the fact that American auto industry is one of the largest economic multipliers in the U.S. economy. GM employs more than 1.7 million people, either directly or through parts suppliers, subcontractors and dealers.

The key argument is that if either GM, Ford or Chrysler fails, the industry would be faced with an imminent collapse due to the impact on suppliers and the cascading effects of production lines being halted and workers laid off at every level of production.

All told, as many as three million jobs could be lost if one or more the Big Three automakers fail. GM argues that in such a scenario, with no cars being made or sold, as much as $156 billion in tax revenue would be lost between 2009 and 2011.

And the economic catastrophe wouldn't stop there.

Add in the cost of supporting 775,000 retirees currently drawing a GM pension. And the health care costs of 2 million people who would find themselves uninsured if GM were to fail.

A collapse of the U.S. auto industry would reduce personal incomes by $150.7 billion, the automaker warns. Over three years, the cost could grow to $398 billion in unemployment assistance, as people struggle to find new work.

By every measure, the damage from a collapsing US auto industry will reach far beyond the industry itself.

The nation's auto industry is a major contributor to our gross domestic product -- nearly four percent in total. According to the Center for Automotive Research, our current recession was fueled by three-tenths of a percent decline in GDP. If GM alone is left to fail, a sudden one percent loss in GDP could easily trigger panic, turning a recession into a depression.

[GM]

NMM at the Movies: The cars of Quantum of Solace

Confession time: In addition to being a car nut, I'm also an ardent fan of Ian Fleming's James Bond 007.

And so tonight, as the first US screenings of Quantum of Solace get underway, we have a feature on the cars appearing in the latest Bond film.

Daniel Craig returns to his role as the famed British secret agent, taking the wheel of the heart-achingly gorgeous Aston Martin DBS in the process.

Even before Q works his armored wizardry, the Aston is a force to be reckoned with, packing a 6.0-liter V-12 good for 510 horsepower and 420 pound-feet of torque.

Olga Kurylenko makes her Bond film debut as Camille Montes. As in Die Another Day, Ford has once again signed a deal to get their cars on screen; Kurylenko drives the plebeian but Euro-chic 2009 Ford Ka subcompact.

With a meager 1.2-liter four, the Ka is more adept at being miserly with fuel than outrunning henchmen, but nonetheless, it's appearance is more so a feature of Madison Avenue than of Fleming himself.

As for the aforementioned henchmen, the Alfa Romeo 159 is their car of choice in Quantum of Solace.

On paper, the 253-horsepower V-6 powered Alfas should be utterly humiliated by the Aston Martin, but toss in a dusty, switchback laden road conspicuous for it's lack of guard rails and the vehicular drama and mayhem nearly writes itself.

Speaking of mayhem, it's worth noting that one of seven Bond-spec Astons drew its dying breath in a plunge into Lake Garda in the Italian Alps while on the way to shooting a chase scene nearby. While driver Fraser Dunn suffered only minor injuries, the $266,000 Aston was declared a total loss.


For more on Quantum of Solace and James Bond's creator, Ian Fleming:

* Quantum Of Solace - Official Movie Site
* Quantum Of Solace on IMdB
* A brief biography of Ian Fleming

GM posts $4.2 billion Q3 loss; exits Chrysler merger talks

Over the last three months ending Sept 30, General Motors has lost $46 million each day.

Announcing its third quarter earnings today, General Motors posted a $4.2 billion dollar loss, its fifth straight losing quarter and in an amount far greater than analysts had expected. In response, GM shares fell 13 percent to close today at $4.16m amidst doubts about the company's cash reserves.

“The third quarter was especially challenging for the auto industry. Consumer spending, which represents close to 70 percent of the U.S. economy, fell dramatically, and the abrupt closure of credit markets created a downward spiral in vehicle sales,” said Rick Wagoner, GM Chairman and Chief Executive Officer in a statement.

Tight credit, rising unemployment, declining income, falling stock markets, and continuing deterioration in the housing market have all contributed to an abrupt halt in consumer spending. Many customers who still intended to buy or lease a car this summer were denied financing, or found the cost of financing prohibitive.

In response to today's earning report, the beleaguered automaker said it would cut white-collar jobs and slash next year's capital spending budget by $2.5 billion in attempt to cope with the troubled economy. Including job cuts made in July, more than 7,000 salaried and contract positions are being eliminated, trimming spending on salaries by $500 million.

This afternoon, Wagoner renewed his pleas for low-interest loans from the U.S. Treasury. “The U.S. government’s actions to help stabilize the credit markets and eventually ease the credit crunch are an essential first step to the economy’s and the auto industry’s recovery, but further strong action is required.”

The biggest problem confronting GM is a lack of cash to pay it's suppliers and operating costs. Most of the company's funds are tied up in factories or tooling; without an injection of capital, analysts predict that GM will run out of cash by the second quarter of 2009.

Finding new lenders will not be easy, either. In response to the $46 million per day cash burn, Standard & Poor's lowered GM's debt rating further into junk status, from B- down to CCC+. "We now believe GM will use much more cash this year than our previous estimate of as much as $16 billion in its global automotive operations," said Standard & Poor's credit analyst Robert Schulz in a statement.

The 'will-they, wont-they' romance is over: GM kills Chrysler merger talks
Without mentioning Chrysler verbatim, Wagoner confirmed the end of negotiations with Chrysler to Automotive News.

"We have recently explored the possibility of such an acquisition based on the analysis that it would strengthen our industry position in the long term," Wagoner said. "we are better off to put 100 percent of our efforts on the liquidity side. We've set aside such (acquisition) actions as a near term priority."

Chrysler issued its own statement separately, saying the company would continue to work on returning to profitability. "As an independent company we will continue to explore multiple strategic alliances or partnerships as we investigate growth opportunities around the world that would aid our return to profitability."

Majority shareholder, Cerberus Capital Management declined to comment.

So what's next for GM?
In short, a fire sale.

The automaker has already killed the next generation of its full-size sport-utes and is ramping up efforts to sell the ailing HUMMER brand. Today, GM said it would put its ACDelco aftermarket parts business up for sale, a move the company expects will raise another $2-$4 billion.

Wagoner reiterated today that bankruptcy is not an option and that the company "will take whatever actions we can to avoid it."

But Wagoner's pledge will be hard to uphold given the state of the economy. Ford Motor Co. posted a $3 billion after-tax operating loss for the third quarter today, and said it too would cut costs further to preserve cash.

Both automakers said that U.S. sales will worsen next year. GM forecast its 2009 U.S. sales at 11.7 million units; if true, next year will be the company's slowest since 1982. In 2010, GM predicts US sales will rise to 12.7 million unit -- over 4 million less than the automaker's 10-year average ending last year.

[GM,AN]

GM, Chrysler lead horrific month as October sales plunge

Falling gas prices and rising inventories weren't enough to offset a tight credit market, leading to another awful month of sales for all automakers.

On average, October sales were down 32 percent from a year ago, with General Motors hit the hardest. Not only did GM's HUMMER brand lead the industry with sales off by 64 percent, but the rest of the GM portfolio followed closely behind.

Cadillac and Saturn sales fell about 55 percent, GMC trucks were down 52 percent, followed by Pontiac, Buick and Chevrolet, which were all down by at least 40 percent.

The decline is largely due to tighter lending policies adopted by GMAC Auto Finance. With GM's in-house lending unit refusing loans to buyers with credit scores below 700, a large percentage of prospective customers were unable to qualify for a loan.

Possibly the worst month since World War II
"If you adjust for population growth, this is probably the worst industry sales month in the post-WWII era," said Mark LaNeve, GM's vice president for sales and marketing, speaking with Automotive News. "Until the credit markets open up and consumer confidence improves, the entire U.S. economy, and any industry like autos that relies on financing, will suffer."

To spur sales, GM said today it will start its annual Red Tag Sale early this year. The event - which normally runs from Thanksgiving weekend to January 5, will instead start tomorrow, with some GM vehicles carrying up to $7,250 in cash incentives.

Chrysler sales fell 50 percent, trailed by Jeep and Dodge, down 32 and 27 percent respectively. Ford sales were off 28 percent from a year ago.

So far only two automakers have reported monthly sales increases this year: Toyota in April and GM in January. This month, Toyota's decline was lead by its Lexus unit, down 35 percent. The Toyota brand retained its position as the nation's best-selling brand, ahead of Ford and Chevrolet.

MINI posts gain, Audi bucks the downward spiral
Among the few to post gains were BMW's MINI brand, up 56 percent. Audi, whose sales were up by less than one percent were weighed by parent company Volkswagen AG, whose sales fell by nearly 8 percent.

"This is the toughest economy we've seen in a long time," Mark Barnes, COO of VW Group of America, said in a statement.
[AN]

[Photo: Flickr.com; Original by Broken Wing Productions. Post-processing by David Moll.]

Dodge, Ford to offer deep discounts on newest trucks

If you are waiting to replace your 1978 Ford pickup and you've got the cash or credit to close the deal, there are big bargains to be found in big trucks.

It's no secret that pickup trucks have been Detroit's financial bedrock for decades. Even through the 1973 OPEC embargo, the Big Three have relied on the steady cadence of truck sales to keep the coffers full. In an effort to reverse the paralyzing decline in sales last month, both Ford and Chrysler announced new discounts this fall on their newest trucks.

Chrysler LLC will offer a $2000 cash discount on the all-new 2009 Dodge Ram. The incentives seem to be working; the Ram's market share increased last month to nearly 16 percent from a low of 8.6 percent in May. Discounts vary by trim level and market; in Southern California, Dodge currently offers a $5000 incentive on the base model Ram 1500.

According to the Financial Times, Ford will offer a $2,500 incentive for every trade in for a 2009 F-150 pickup.

The new discounts come as a result of launching the two all-new trucks in a very difficult market. The downturn in home construction has pulled the rug out from underneath many contractors and builders, both of whom are core customers for large pickups. Discounts are usually a tool of last resort, used most often to clear dealer lots of outgoing models.

Since it's introduction in 1948, the Ford F-series pickup has become a sales legend. For 31 years, the F-series was Ford's best-selling vehicle; in 2007, sales of the F-series made up 27 percent of the automaker's annual sales volume. But as high oil prices sapped demand during the spring and worried lenders and faltering finances curtailed loans this summer, sales of the F-series have fallen sharply. Sales of the F-series were down 39 percent in September compared to a year ago.

Sales of the Dodge Ram were off by 28 percent for the same period, according to the Financial Times.

CSM Worldwide, a Michigan consultant firm, expects the US truck market to shrink next year and in 2010, bringing annual sales down to about 1.3 million units, about half of 2001’s peak.

Bond, Ollila step down from FoMoCo board
In other Ford news, the Financial Times reports that Sir John Bond and Jorma Ollila have stepped down from Ford Motor Company's board of directors. In a statement, Ford said that Bond, who had previously been head of HSBC, and Ollila, chairman of Nokia and Royal Dutch Shell, “believe they could not devote the additional time and international travel that would be required of them as the company responds to the unprecedented external environment and rapidly changing auto industry”.

Shares of Ford traded lower, down 4.12 percent to close at $2.33 per share.
Dodge is not publicly traded. Dodge is a subsidiary of Chrysler LLC, a privately held company controlled by equity management firm Cerberus Capital Management. The firm maintains a controlling stake in Chrysler's three brands: Chrysler, Jeep and Dodge.

Ford introduces MyKey electronic watchdog for parents of teen drivers

When handing over the keys to the family car, parents of teen drivers have every right to be worried.

Not only are teen drivers statistically the most likely to crash, they are also more likely to speed and less likely to wear seatbelts than older drivers.

In an effort to help parents curtail risky driving and promote safe driving habits, Ford has designed the MyKey system, which will debut on the 2010 Ford Focus.

The MyKey system allows parents to program any key through the Focus' vehicle message center and turn on a range of safety-concious settings. These settings are stored in the car and activated when the specific key is inserted into the ignition.

The MyKey system can be programmed to include a persistent reminder to buckle up — not only will a reminder beep continue to nag the driver, the stereo is muted until the driver's seat belt is fastened. A message center display “Buckle Up to Unmute Radio” also appears on the instrument cluster.


To combat the dreaded lead-footed teenager, the MyKey system can also be programmed to limit the car's top speed to 80 mph.

Parents can also limit the volume of the car's stereo, permanently activate the traction control system and set a speed alert chime to sound at 45, 55 or 65 mph.

The speed alert system has an added benefit: improved fuel economy. According to studies conducted by Ford, driving at 55 mph instead of 65 mph consumes 15 percent less fuel.

By mastering other eco-driving habits such as avoiding jackrabbit starts and excessive idling, young drivers can help improve fuel economy by more than 30 percent, according to studies conducted by Ford.

Ultimately, the MyKey system is an innovative tool to promote safe driving, even if teens ultimately chafe at the system's electronic leash.

No doubt Ford is banking on the MyKey system to make the Ford Focus a popular choice for both parents and teens alike, the latter of which may be appeased by the optional SNYC multimedia system that is offered in the Focus and other Ford vehicles.

[Ford]

September sales hit 15-year low as credit crunch hits car dealers

When it comes to our nation's economic future, I am reticent to join the chorus of hyperventilating worrywarts wringing their hands at the approach of fiscal Armageddon. But one thing is clear -- the impact of a shell-shocked credit market hit car dealerships in full force this September with predictably grim results.

On average, sales for September were off by over 27 percent from a year prior. Overall sales volume for September totaled 965,160 units - the first month in 15 years to sell fewer than one million units industry-wide.

Ford Motor Company posted their 10th straight month of declining sales as its three domestic divisions dropped 34 percent. Chrysler LLC sales fell 33 percent and General Motors was down 16 percent.

European and Asian automakers also suffered. Porsche sales were off by nearly 45 percent from a year ago. BMW Group sales fell nearly 26 percent. Suzuki and Mitsubishi sales fell 47 and 39 percent respectively, trailed closely by Mazda, Nissan and Toyota.

No automaker posted an increase. Only German automakers Volkswagen AG and Daimler AG were able to limit their declines to less than 10 percent.

Sales results were released today as the Senate prepared to vote tonight on a revise $700 billion bailout plan to rejuvenate lending by purchasing the toxic mortgage-related securities left behind by the collapse of the sub-prime mortgage industry.

Credit crunch hampers dealer financing
As the drama on Capitol Hill and Wall Street has played out, buyers have postponed big purchases. And dealers say buyers with good credit ratings are being denied loans more often.

"In the past, we were accustomed to financing 70 to 80 percent of our cars sold," Jim Weisbecker, general manager for Belle Glade Chevrolet in Florida, told Automotive News on Tuesday, Sept. 30. "Now we finance about 20 percent, if that. It has been a drastic turnaround."

Jim Fosche, sales manager at Buddy Foster Chevrolet in Zephyrhills, Fla., said volume at his store plunged 50 percent last month. He blamed the credit crunch and job worries.

Future remains grim as Big Three attempt to restructure
For the faltering domestic automakers, weak sales and tight credit couldn't come a worse time.

Combined, the Big Three have cut tens of thousands of jobs since 2006. Many GM and Chrysler plants have been idled for weeks at a time this year to slow production of slow-selling pickup trucks and sport utility vehicles.

Compounding the problem, billions of dollars in cash reserves are being spent to finance new products as well. General Motors lost $15.5 billion in the second quarter of 2008; Ford lost $7.8 billion.

[AN]
[Photo: Flickr.com; Original by Broken Wing Productions. Post-processing by David Moll.]

2009 Mazda 3 sedan to debut at Los Angeles Motor Show

Taking a number of design cues from the recently announced 2009 Mazda 6 , the next generation of the popular Mazda 3 compact sedan will debut at the Los Angeles Motor Show in November.

The four-door hatchback version will premiere at the Bologna Motor Show a month later.

For the US market, the current range of 2.0 and 2.3 liter inline-four gasoline engines will carry over to the new car unchanged. The car will go on sale in Europe at the start of 2009 and will be available in the US by mid-summer or early fall.

Despite the pressure of rising gas prices, Mazda announced that it will offer a high performance MazdaSpeed version. Expected to be hit the streets in 2010, the new MazdaSpeed 3 will likely use a version of the 2.5 liter turbocharged inline-five currently available in the US market Volvo C30.

Photo Credit: AutoExpress.co.uk
Source: Autocar, AutoExpress

VIDEO: Ford Verve Concept

While the Verve debuted at the Detroit Motor Show nearly six months ago, this week's restructuring announcement provides an opportunity to delve deeper into what Ford will bring to market for the embattled Mercury brand.

Follow this link for more photos and details on the Verve.

Ford announces revamped lineup, reports $8.7 billion loss in second quarter of 2008

In their quarterly earnings report, Ford announced today that its operations lost $1.3 billion in rising production costs during the second quarter. While sales produced $258 million, over $8 billion in losses and devalued assets produced a flood of red ink.

All told, Ford lost $8.7 billion for the second quarter of 2008, making this the worst quarter in the company's history.

Yesterday, we reported that the Mercury brand will be infused with a large percentage of vehicles drawn from Ford's European offerings. Following the grim financial news this morning, Ford released new details on the company's revamped product line.

• Michigan, Kentucky and Mexico plants to retooled:
Beginning in December, the company will retool the Wayne, Michigan plant to build a new sedan bred from the European Focus platform. Production of the Ford Expedition and Lincoln Navigator - rumored earlier to be on the chopping block - will be moved to the Fayetteville, Kentucky plant early next year.

In 2011, the Louisville, Kentucky plant will retool from Ford Explorer production to more intermediate and compact sedans.

The third plant — which went unnamed in yesterday's report — to shift to car production will be in Cuautitlan, Mexico. The plant currently builds the F-series pickup, will build the new Ford Fiesta hatch in early 2010.

Bucking the trend, the Ford Ranger compact pickup has received a stay of execution. Previously, Ford announced that production would end in 2009; the company announced today that the Minnesota plant which builds the Ranger will continue production through 2011.

• New product plan to eliminate redundant platforms:
As reported by Automotive News Daily, Ford confirmed the following products in development:

2009:
• Ford will introduce a version of the European Transit Connect small van.
• Lincoln will receive a seven-passenger crossover, likely to be based on the Mazda CX-9 crossover.

2010:
• The European Ford Fiesta will debut in sedan and five-door hatchback versions. The Mercury division will receive their own as-yet unnamed model based on the new Fiesta.
• The US Ford Focus will switch to the European market platform in sedan and five-door hatchback models.

Late 2010, 2011:
• A uni-body version of the next-generation Ford Explorer will arrive. In addition to new drivetrain and
significant weight reduction, the new model will improve fuel economy by as much as 25 percent.

In addition to the new platforms, Ford announced it will accelerate development of its EcoBoost engines, which will replace the venerable "modular" V8 engine range with a series of smaller displacement, turbocharged and direct injected V6 mills.

• Hourly worker buyouts to continue:
In addition to the overhauled product range, Ford said it would continue to offer targeted buyout plans to hourly workers at its US plants. The company said it is on track to reduce their salaried worker costs by 15 percent — most of which will come through attrition — in the US by August 1st.

Trading on today's news weighed heavily on Ford; company stock fell by 15.3 percent to close today at $5.11 per share.

[Link]

Fleet-footed once more, Mercury will lead Ford's transition with new cars from European market

It is no secret that the auto industry has been hit hard by the double whammy of high gas prices and soaring inflation. Amidst this bad news, Ford's Mercury division appeared to be wilting much the same way that Chrysler's Plymouth brand did a decade earlier.

The lack of investment in new vehicles was readily apparent by 2007. While Ford CEO Alan Mulally insisted last fall that Mercury was not circling the drain, news leaked that suppliers had stopped renewing their contracts and that no new vehicles had been planned beyond 2012.

At the time, Ford had just sold Jaguar and Land Rover to Indian automaker Tata Motors for $2 billion, barely breaking even on their investment to rescue the iconic British marques from the clutches of then ailing British Leyland.

In poker parlance, the fire sale of Jaguar and Land Rover was a tell. A desperate move amidst a tidal wave of red ink.

But it appears that rumors of Mercury's death were greatly exaggerated.

The New York Times has reported that Ford will revitalize the Mercury brand with an entirely new model range, drawn increasingly from Ford's European offerings. An official announcement is expected tomorrow morning as the automaker releases their quarterly earnings report.

The move is similar to General Motors' strategy to redefine the Saturn division as the US line for their European models. The strategy has paid off so far; as sales of trucks and SUVs have flat-lined, demand has risen for smaller cars. The Saturn Astra - itself a rebadged Opel Astra from GM's European division - has been selling a pace the outgoing ION sedan could never match.

As a part of the shift in product strategy, Ford is expected to make permanent cuts in truck and SUV production. According to the New York Times report, three plants will be retooled for car production -- the Wayne, Michigan plant (which builds the Ford Expedition and Lincoln Navigator) and the Louisville, Kentucky plant (which builds the F-250 and F-350 pickups).

The location of third plant chosen for retooling has not yet been released. Besides Kentucky, Ford builds trucks and SUVs in Dearborn, Michigan, Kansas City, Missouri and Cuautitlan, Mexico.

[Link]

Market Watch: GM, Ford shares rise as oil prices slide

After enduring months of unending decline, shares of General Motors and Ford Motor Company closed up by more than 15 percent as oil fell by over US$10 per barrel in the past 48 hours.

Oil prices declined on news of higher domestic inventories of crude oil and gasoline from the US Department of Energy. Prior reports indicated that inventories would continue to decline over the summer.

The recovery of GM's share price comes a day after CEO Rick Wagoner's restructuring plan aimed at raising US$15 billion in capital to survive what the company expects to be their worst sales year in a decade.

Further bucking the bear market, today's gains came despite credit rating agencies downgrading or threatening to lower their ratings for each automaker.

Moody's Investors Service announced it would review its ratings on Ford, while Fitch Ratings on Tuesday downgraded GM to B-minus from B.

Both agencies cited a gloomy forecast for automakers in an already slow sales year.

The following suppliers and dealership groups also posted gains in afternoon trading today:

Dealership groups:

• AutoNation Inc.: $8.00, up 5.6 percent

• Penske Automotive Group Inc.: $12.50, up 5.8 percent

• Sonic Automotive Inc.: $8.89, up 5.9 percent

• Group 1 Automotive Inc.: $16.19, up 7.3 percent

Suppliers:

• Johnson Controls Inc.: $29.61, up 4.0 percent

• Lear Corp.: $14.97, up 7.7 percent

• Dana Holding Corp.: $6.56, up 7.5 percent