Carmakers Confront Europe's Gloom

First Up 09/28/12

September 28, 2012

Nissan to Buy Back 2 Leafs From Disgruntled Owners
According to Automotive News, Nissan Motor Co. has agreed to buy back two of the seven Leaf electric cars whose owners in Arizona have publicly raised concerns about aging batteries. The gesture could help mollify a small group of Leaf owners and green-car enthusiasts who have been raising questions about whether the electric car's battery is too quickly losing its ability to hold an adequate charge. In response, Nissan earlier this week said it would enlist an independent, global panel to help it communicate with worried Leaf owners that there is nothing wrong with their batteries. "We are not happy that we have any customers with concerns and we're working hard to improve our customer communications to better meet their expectations," Nissan chief spokesman Dave Reuter said. "In Phoenix, we have sold approximately 450 vehicles, with the majority of those to very satisfied owners. In fact, worldwide Leaf customers are some of Nissan's most satisfied. It's important that this perceived issue is placed in context." The small group of Phoenix customers believes that their Leafs are not holding a charge as long as they should be after only a year or two of use. Click here to for coverage of Nissan’s decision to buy back two Leaf EVs.

New CAW Contracts Do Little to Reduce U.S. Labor Cost Gap
The Canadian Auto Workers (CAW) union will allow all three Detroit automakers to offer rich retirement incentives to thousands of Canadian factory workers. Retirement-eligible production workers would receive a lump-sum payment of $50,000 (all amounts Canadian) and a $20,000 voucher for the purchase of a new vehicle. Skilled trades would receive the same voucher and a lump-sum payment of $60,000. Workers who take advantage of the incentive could be replaced by lower-paid entry-level workers. It is a key provision of the new contracts – one that experts say could go a long way toward closing the labor cost gap between Canada and the United States. Aside from these retirement incentives, the new contract does little to narrow the labor cost gap, according to The Detroit News. "This is really attrition-dependent," said Kristin Dziczek, a labor expert at the Center for Automotive Research. "It remains to be seen how successful the companies will be in (reducing) the work forces they have." She estimates that about a quarter of the factory workers employed by GM, Ford, and Chrysler in Canada could be eligible for the offers. Click here for more on a labor agreement between Detroit’s automakers and the CAW.

Carmakers Confront Europe's Gloom
The Wall Street Journal reports that the glitz of new car launches at this week's Paris auto show is taking a back seat to talk in the corridors and meeting rooms of plant closures and job cuts as Europe's auto executives confront a deepening sales slump. The finance chief of Volkswagen AG, one of the region's strongest car makers, warned this week that not all the region's auto makers could survive without government aid. Fiat Chief Executive Sergio Marchionne said a painful restructuring of the European industry looks inevitable. "[We've] loaded the gun for bear," he said, referring to the consequences of Europe's failure to close factories or seriously consolidate the industry in the 2008 to 2009 downturn. European auto sales are on track to drop for the fifth year in a row. Last month, registrations of new cars in the European Union fell to their lowest monthly level since the European auto makers' association started collecting the data in 1990. Volkswagen sales chief Christian Klingler said at the Paris show he doesn't expect a significant rebound in the European market over the next two years. For more on Europe’s auto crisis, click here.

Automakers Shush Cars with Noise Cancellation Technology
When it comes to creating quieter cars, automakers are giving a whole new meaning to the sounds of silence. USA Today reports that more of them are using technology to mask bad sounds and enhance good ones. Engineers say manipulating sounds in a car adds to perception of quality and harmony. "Our aim isn't to trick the customer," says Chuck Gray, chief powertrain engineer on Ford's electric vehicles. "It's to give them the best experience." When it comes to eliminating unwelcome sounds, the new technology works like noise-canceling headphones. A few automakers have used the strategy in luxury cars, and it's now starting to filter down into mainstream models. "Active noise cancellation works to get rid of noises that customers don't want to hear," says Honda spokesman Chris Martin. The new 2013 Honda Accord, where the goal is to make the cabin as quiet as possible, employs microphones that pick up engine, wind, or road noise. A computer then produces almost indistinguishable sounds, projected back into the cabin through four speakers, in frequencies that reduce or cancel out the unwanted sounds. Read about what other automakers are doing to use noise canceling technology in their vehicles here.

Electric Cars Struggle to Break Out of Niche
It has been a rough week for electric cars. Tesla Motors disclosed that it needs to raise more capital because the launch of its new Model S luxury sedan is going slower than expected. A top Toyota Motor Corp. executive said vehicles powered by hydrogen fuel cells are more likely to be viable by 2020 than battery electric cars. And the Congressional Budget Office said federal tax credits that subsidize plug-in car purchases up to $7,500 aren't an effective way to reduce gasoline consumption or cut greenhouse-gas emissions. According to The Wall Street Journal, these setbacks come as big carmakers are gearing up to push a significant number of new hybrids, plug-in hybrids, and all-electric vehicles onto the U.S. market. The question is whether the latest group of electric vehicles will offer enough features and reliability and an attractive enough price to move electric cars beyond niche status. All the electric cars and gas-electric-hybrid models currently for sale in the U.S. have captured just 3 percent of total sales through the first eight months of this year. The Toyota Prius line accounts for more than half of the hybrid sales. Click here for more on the obstacles EVs face in breaking out their niche status.

Around the Web  
Mercedes-Benz Electrifies SLS AMG [Automotive News]
Audi Crosslane Coupe Concept is Bursting with Interesting Tech [Autoblog]
Cool Cars from the Paris Motor Show [CNN Money]
Photos: Carmageddon II [Forbes]