From Hollywood to Detroit, pandemic-weary companies cautious on Omicron

Pandemic-weary corporations struggled to assess the impact of the new Omicron variant of the coronavirus on Monday, with industries from Hollywood movie studios to airlines and autos awaiting more details to help determine how it might affect their operations and profits.

The World Health Organization warned on Monday the Omicron variant carries a very high global risk of infection surges. Spooked investors wiped roughly $2 trillion off global stocks on Friday, but markets regained some ground on Monday.

Countries have swiftly imposed bans on travel from southern Africa, where the variant was first uncovered. Japan and Israel went even further, announcing bans on all foreign visitors.

Some airlines said they were not heavily changing schedules, but industry sources said big carriers moved swiftly to protect their hubs by curbing passenger travel from southern Africa.

Ryanair Chief Executive Michael O'Leary saw no reason to cancel flights although he was worried about some countries potentially shutting air travel. Lufthansa, Germany's flagship airline, said its flights were still well booked.

US President Joe Biden met with chief executives of major retailers and other companies on Monday to discuss how to move goods to shelves as the US holiday shopping season begins in the shadow of Omicron.

Before the meeting, Walmart CEO Doug McMillon cited improvement in the supply chain, noting the retailer had seen a 26% increase in shipping containers going through U.S. ports over the past four weeks.

US Commerce Secretary Gina Raimondo said on Monday it was too soon to tell if Omicron will have any impact on global supply chains.

The prospect of a fast-spreading variant has raised fears of a return of the sort of restrictions that shut down a swathe of industries in 2020.

In Hollywood, where production on film and television shows returned to pre-pandemic levels this summer thanks to stringent health and safety precautions, the studios were waiting to learn more about this latest mutation of the coronavirus.

"With COVID, it keeps shape shifting. It's like mercury -- we can't get our hands around it," said Dr. Neal Baer, a physician who was a longtime producer of "Law & Order: Special Victims Unit."

"It's going to take a couple of weeks for us to know, one, how well vaccinations protect us, two, whether you need a booster and whether a booster helps or three, whether the vaccine needs to be modified to make it effective against this mutation."

Movie theater attendance has been returning in fits and starts since the summer, but a spokesman for the National Association of Theatre Owners said variants remain a concern -- especially after the pullback in attendance that accompanied the Delta variant.

In the United States, auto plants were closed for two months last year. Even after automakers restarted operations, they have curtailed production schedules due to semiconductor chip shortages and other supply-chain constraints. Automakers said it was too soon to predict the impact of Omicron.

"This is new," Nissan Motor Co's US spokeswoman Lloryn love-Carter said. "We're monitoring of course, but we still have a lot of pretty strict COVID protocols in place."

General Motors Co, the largest US automaker, said it was watching closely and its COVID-19 safety protocols remain in place at its plants.

"We continue to strongly encourage our employees to get vaccinated given the broad availability of safe and highly efficacious vaccines," GM spokeswoman Maria Raynal said in an email. "We will continue to review and adjust our protocols as new information regarding this variant becomes available."

Toyota Motor Corp said its US management team will meet on Tuesday to discuss the Omicron variant.

"Right now we're in the 'gathering info' mode," Toyota's U.S. spokesman Scott Vazin said. "Since most of our employees are based in plants, we've never stopped COVID protocols such as social distancing, health screenings, masking up." 

(Reporting by Ben Klayman in Detroit, additional reporting by Dawn Chmielewski in Los Angeles, Tim Hepher in Paris and Alex Alper in Washington; Editing by Peter Graff, Bill Berkrot and Sandra Maler)

-reuters-  

GM, Honda announce North America car alliance

NEW YORK - General Motors and Honda announced Thursday they were establishing a strategic alliance in North America to share vehicle platforms and development costs.

The venture builds on existing partnerships on electric cars and fuel cell systems and comes as automakers face pressure to develop autonomous driving and other envelope-pushing technologies amid uncertain vehicle demand in the wake of the economic downturn due to the coronavirus.

A joint press release said the venture would save money from shared vehicle platforms and propulsion systems, joint purchasing and shared research and development spending. 

GM's US rival Ford has teamed up with German giant Volkswagen to jointly develop electric and self-driving vehicles, and a pending merger between Fiat Chrysler and Peugeot also aims to hold costs down.

Morningstar analyst David Whiston said there few details offered on the extent of the financial savings to either firm, but that "the alliance can make sense" if Honda makes headway in some of the truck segments where it lags and GM benefits from Honda's expertise with smaller cars.

"We see the agreement as a low-risk and potentially high-reward move for both firms, and their prior history lowers the risk of tension and poor cooperation," Whiston said.

Agence France-Presse

Hyundai, Kia to recall 240,000 vehicles in South Korea

Hyundai Motor and Kia Motors on Friday said they would recall 240,000 vehicles from South Korea after the transport ministry issued its first compulsory recall order over safety defects first flagged by a whistleblower.

The ministry also asked the prosecutor to investigate whether or not the automakers allegedly covered up the five flaws, which affect 12 models, including the Elantra, Sonata, Santa Fe, and Genesis.

This is the first time ever that the ministry ordered a compulsory recall of Hyundai and Kia vehicles, and comes after the automakers had rejected an earlier order for a voluntary recall, saying the defects did not compromise driving safety.

On Friday, Hyundai and Kia said they "accept the administrative order," adding: "There have been no reported injuries or accidents from the cited issues."

source: news.abs-cbn.com

Luxury in focus as Geneva car show opens

PARIS - Europe's biggest annual car show kicks off in Geneva on Tuesday with luxury and crossover vehicles in the limelight, but with the emissions scandal still hanging over the industry.

Automakers are celebrating the end of the sector's crisis as European sales have returned to levels last seen in 2008 before a global financial meltdown inflicted deep dents on their business.

It is a far cry from last year's show where the industry was under a cloud after Volkswagen admitted in 2015 to having installed software in 11 million diesel engines worldwide to circumvent emissions tests, a scandal that will cost it billions in fines and compensation to car owners.

While Volkswagen has survived the crisis, the scandal has focused attention on emissions and the challenges automakers will have in building cars that can meet ever tougher pollution rules.

Carmakers are now having to steer toward engines that emit no more than 95 grams of CO2 per kilometre by 2021 to meet European requirements, compared to 130 grams in 2015.

But as diesel cars have been getting a bad rap because of emissions scandals, that target looks harder to meet.

"Diesel cars emit 15 percent less CO2 per kilometer" than gasoline-fueled models, said Christophe Aufrere, a technology strategist at car parts maker Faurecia.

With electric vehicles still only accounting for a sliver of European car sales, that means gasoline-powered cars have to take up the slack, requiring the industry to squeeze more efficiency out of engines and to reduce vehicles' weight.

Research and development costs "have practically doubled in the past decade" said Remi Cornubert at AT Kearney, a consulting firm, and if carmakers fail to succeed, the bill will be high.

Automakers failing to meet the CO2 targets -- capping petrol consumption to 4.1 liters per 100 kilometres and diesel to 3.6 litres -- will have to pay 95 euros ($100) for every extra CO2 gram emitted by each car -- potentially adding up to tens of millions of euros of fines.

NEW MODELS

Jostling among carmakers for market position is also likely to dominate discussions after French carmaker PSA announced Monday the acquisition of General Motors' European subsidiary, which includes the Opel and Vauxhall brands, for 1.3 billion euros ($1.38 billion), catapulting it into second place in Europe.

And there was more good news for PSA in Geneva on Monday after its Peugeot brand won European car of the year for its 3008 urban 4x4, as the show opened to the press.

Volkswagen, meanwhile, unveiled its first prototype autonomous car Monday evening, the electric Sedric.

The German giant, whose brands include Audi and Porsche, said it planned to join a string of other automakers in investing billions of dollars in developing the vehicle over the coming years.

Despite the greater emphasis on fuel economy, the Geneva car show is unlikely to disappoint in terms of its usual glitz and glamour.

The legendary Ferrari, Lamborghini, Pagani, McLaren and Bentley have all picked Lake Geneva's shores to present new models. Renault will showcase the final version of its Alpine A110 sports car.

"Geneva has always been the show of beautiful automobiles and prestigious racing cars," said Ferdinand Dudenhoeffer at the CAR institute.

But the greatest buzz may come from so-called "crossover" vehicles (CUVs), which combine features taken from sports utility vehicles (SUVs) with those of passenger cars.

The segment, including fashionable urban four-wheel drive vehicles, now makes up nearly 30 percent of the European car market and features the Volvo XC60, the Citroen C-Aircross, the DS7 Crossback and the Land Rover Velar.

Some 180 companies will be present at the 10-day show which opens to the public on March 9 after two press days during which most major corporate announcements are expected. Last year's show attracted 687,000 visitors.

source: news.abs-cbn.com

Mazda, Mitsubishi add 624,000 more cars to air bag recall

TOKYO - Mazda Motor Corp. and Mitsubishi Motors Corp. said on Friday they would recall about 624,000 more vehicles to replace air bag inflators made by Japan's Takata Corp., following similar moves last week by domestic automakers.

Mazda said it was recalling about 112,000 vehicles including the Atenza sedan, Bongo van and two models it builds for Nissan Motor Co. and Mitsubishi Motors.

A spokeswoman said it was still working out plans for any recall overseas.

Mitsubishi Motors is calling back about 100,000 cars in Japan and 412,000 overseas, it said.

source: www.abs-cbnnews.com

As recalls mount, Takata, Japan automakers stuck in uneasy reliance

TOKYO - Air bag manufacturer Takata Corp and Japanese carmakers including Honda Motor Co are locked in the commercial equivalent of a bad marriage; not entirely happy in each other's company but unable to break apart and wary of potentially costly court battles.

Honda on Friday unveiled a new model with an unusual sales pitch - fuel efficient, lots of cargo space and, by the way, no air bag inflators made by Takata, the Japanese supplier at the centre of a global safety crisis that has rocked both companies.

Over the past five years, recalls have ballooned to include 36 million vehicles fitted with potentially lethal Takata air bags, triggering a criminal investigation and lawsuits in the United States, and testing ties between Takata and its main customers, bankers and auto executives say.

Automakers don't normally discuss supply arrangements for components like air bags in their new models.

But in a departure that underscores an increasingly strained relationship, Sho Minekawa, Honda senior managing director, said the new Shuttle wagon sold only in Japan would use inflators from Takata's rival, Daicel Corp.

"We use very little from Takata for our domestic models and that's been the trend in recent years," Minekawa said in response to a question at the launch of the new car. "There was a time when we used a lot."

The uneasy dynamic explains why Japan's automakers have not been agitating for a shake-up or even restructuring at Takata even as they give new contracts to other suppliers.

The automakers need Takata to supply replacement parts for urgent repairs and cannot demand compensation that would endanger its ability to do so in an industry where no rival could readily take up the slack.

A court battle could risk embarrassing disclosures about the responsibility of automakers in reviewing Takata's designs or in pushing for cost cutting, a banker who has been in contact with Takata said.

"The most important thing from the perspective of the automakers is that they can ensure replacement parts are being supplied in a stable fashion," said Masaki Higurashi, deputy director of the automobile division at Japan's trade ministry who is involved in coordinating the government's monitoring of the recall crisis.

Any discussion of restructuring would have to wait until after that, he said. "After all the replacement parts are supplied, the automakers have to decide whether to let Takata stay on as it is," he said. "I think the automakers are starting to think about that."

Honda, still Takata's largest customer, recalled almost 5 million more cars last week after concluding the Takata air bags they contained were at risk of exploding in accidents. Toyota Motor Corp added another 5 million vehicles to the tally and Nissan Motor 1.5 million.

Six deaths, all in Honda vehicles, have been linked to shrapnel from defective Takata air bags. Problems with Takata air bags have also been linked to more than 100 reported injuries.

'NO CHOICE BUT TO STAY TOGETHER'

The Japanese automakers and Takata failed to agree on whether the most recent recalls were necessary based on data provided by Takata.

As a result, there is no agreement between Takata and the automakers on how to split the costs, representatives of both sides said. That will have to wait until after they have determined why Takata air bag inflators are breaking down.

Takata will not be able to go it alone. The new costs could be as much as $1 billion if all vehicles covered by the new recall were repaired and the $100-per-car estimate favored by analysts applied. By comparison, Takata's market value is a little over $1 billion.

Takata has allocated $520 million to cover recall costs. At a meeting with analysts on Thursday, CFO Yoichiro Nomura said Takata had asked automakers to allow it to pay its share of recall costs in installments, a concession that would allow it to avoid a potentially destabilizing charge, according to analysts who attended the closed-door briefing.

Takata CEO Shigehisa Takada, whose family controls some 57 percent of the auto parts maker, did not attend the meeting. Nomura told attendees the CEO was busy with quality issues.

Honda is using a Takata competitor, Toyoda Gosei, for driver's-side air bags for its new Accord sedan in North America, two people with knowledge of that move have said. Toyota is no longer among Takata's top five customers.

Even so, one purchasing manager at a Japanese automaker involved in the recalls, who asked not to be named, said the companies were forced to rely on Takata given its 20 percent plus global market share.

"We have no choice but to stay together," he said.

source: www.abs-cbnnews.com

Modular mojo: Toyota re-engineers its appeal

TOYOTA CITY - Toyota Motor is looking to cast off a reputation for making reliable, but often dull, cars in a wide-ranging review of its designs, technologies, factories and supply deals - a full makeover aimed at staying on top in a cut-throat industry.

For decades, the Japanese automaker carved out global leadership by using common parts across many of its models. This was efficient, but made for uniform styling. A one-size-fits-all layout for the engine's surrounding parts, for example, gave its cars a boxy front end.

Under its ongoing Toyota New Global Architecture (TNGA) initiative, the automaker will standardise vehicle engineering, such as the optimal 'hip point' seating position for different vehicles, from sedans and sports cars to SUVs and trucks. This cuts the number of air-bag variations needed and allows air-bag modules to be installed from just one side of the assembly line rather than both, making plants more efficient.

Redesigning cars from the ground up, Toyota plans to lower the hood, or bonnet, and centre of gravity for better styling and handling. The new vehicle platforms, to feature more fuel efficient engines and rigid, lightweight frames, will be rolled out in stages starting with a medium-sized car this year, widely expected to be the fourth-generation Prius hybrid.

The savings from this overhaul - to be at least a fifth of Toyota's development costs - would be used to add or tailor other high-tech features, such as auto-braking, to suit different markets.

This approach is not new. Volkswagen, Toyota's rival for the title of the world's biggest automaker, has already rolled out its Modular Transverse Matrix (MQB) in more than a fifth of its vehicles.

In a progress report on Thursday, Executive Vice President Mitsuhisa Kato, the architect of the TNGA outline, said Toyota expects about half of its vehicles in 2020 to feature TNGA platforms.

TNGA reflects the changing nature of the global auto industry. As rivals close the gap on quality and fuel economy, styling and cutting-edge features have become the key battleground. More car for the same price.

"TNGA is not just a more cost-effective way of designing the automobile" to play catch-up with Volkswagen and others, said a senior Toyota executive, who didn't want to be named because he is not authorised to speak to reporters. "It changes fundamentally the way we design and procure technologies and manufacture final finished products using those technologies."

MODULAR DESIGN
Since taking the helm in 2009, Akio Toyoda has sought to steer the company founded by his grandfather back to making more appealing cars instead of what he called reliable but unexciting products that fuelled Toyota's rise in the last century.

"Other automakers would design parts to accommodate exterior styling," said Satoshi Hino, a former Mazda Motor engineer and consultant specialising in modular architecture. "Having fewer parts was important in the 20th century because it helped secure quality. But in the 21st century, you have to make unique, attractive cars while still trying to limit new parts. Modular design allows that, and it's what TNGA is after."

With modular design, pioneered by Volkswagen's Swedish truck unit Scania decades ago, standardised units, such as a cockpit module, can be used across several models and be built flexibly into subtle variations to suit different markets. That allows for a simpler, slimmer manufacturing process - and factory savings.

With TNGA, Toyota aims to halve the investment required to retool factories for new models compared with pre-financial crisis levels in 2008, while slashing investment on new factories by about 40 percent, the company said on Thursday.


TNGA will also bring profound changes for Toyota's group suppliers.

Traditionally, Toyota's suppliers were forced to design parts to meet specifications that were optimal for individual car models - even where other automakers employed globally compatible standards.

TNGA will change that, with Toyota using global standards for certain parts - a move that would weed out weaker suppliers while landing more business for others.

Kato said this would allow Toyota's group suppliers to sell the parts to other automakers, boosting their competitiveness and benefiting Toyota.

To that end, Toyota said in November it would consolidate the development and production of diesel engines, manual transmissions and brakes at three group suppliers, helping top-tier firms such as Denso and Aisin Seiki focus on cutting-edge technologies and compete with global rivals such as Bosch and Continental.

For the first time, Toyota will also add an official from both Denso and Aisin Seiki to its executive line-up next month.

Ultimately, the test for TNGA will be whether the new generation of Toyota cars appeals to buyers.

"Competition will be even fiercer as demand in developed markets saturates and consumers become more selective in developing countries," said Satomi Hamada, senior analyst at consultancy IHS Automotive.

"Toyota needs to boost its product appeal, and quickly, to avoid losing market share." (Additional reporting by Norihiko Shirouzu and Kevin Krolicki; Editing by Ian Geoghegan)

source: www.abs-cbnnews.com

Apple poaching auto engineers to build battery division

SAN FRANCISCO - Electric-car battery maker A123 Systems has sued Apple Inc for poaching top engineers to build a large-scale battery division, according to a court filing that offered further evidence that the iPhone maker may be developing a car.

Apple has been poaching engineers with deep expertise in car systems, including from Tesla Inc, and talking with industry experts and automakers with the ultimate aim of learning how to make its own electric car, an auto industry source said last week.

Around June 2014, Apple began aggressively poaching A123 engineers tasked with leading some of the company's most critical projects, the lawsuit said. The engineers jumped ship to pursue similar programs at Apple, in violation of their employment agreements, A123 said in a filing earlier this month in Massachusetts federal court.

"Apple is currently developing a large-scale battery division to compete in the very same field as A123," the lawsuit read. The suit was reported earlier by legal website law360.com.

Neither Apple nor A123 immediately responded to requests for comment and Apple has not responded to the allegations in the complaint. The company also sued five former A123 employees, who could not be reached for comment.

A123 Systems is a pioneering industrial lithium-ion battery maker, which was backed by a $249 million U.S. government grant. It filed for bankruptcy in 2012 and has been selling off assets.

Lithium-ion is a battery technology that can be used in applications from computers to airplanes, but A123 specializes in big batteries that can be used in big machines, including cars. A123 did not say what specifically the engineers worked on.

It said in its lawsuit that the engineers who left were of such caliber that the projects they had been working on had to be abandoned after their departures. It also accused one of the five defendants, Mujeeb Ijaz, of helping Apple recruit among its ranks.

"It appears that Apple, with the assistance of defendant Ijaz, is systematically hiring away A123's high-tech PhD and engineering employees, thereby effectively shutting down various projects/programs at A123," according to the lawsuit.

"They are doing so in an effort to support Apple's apparent plans to establish a battery division that is similar if not identical to A123's, in competition with A123."

In its complaint, A123 said it believed Apple was looking to hire other battery engineers from companies including LG Chem Ltd, Samsung SDI Co Ltd, Panasonic Corp , Toshiba Corp and Johnson Controls Inc . None of the companies immediately responded to requests for comment.

A123 added that former executive Ijaz also contacted its battery partner SiNode Systems on behalf of Apple. Ijaz's outreach to SiNode "confirms that his work on behalf of Apple is at least substantially similar (if not identical) to his work at A123," the filing said.

SiNode did not respond to a request for comment.

Trying to build an actual car would mark a dramatic shift for the maker of the iPhone and iPad. Apple often researches projects which are then discarded, but has so far mainly stuck to its core expertise in mobile and electronic devices.

Whether it will build and release an electric car or a more evolved autonomous vehicle remains to be seen, the source told Reuters last week. But evidence is mounting that the maker of smartphones and other mobile gadgets is, like Google Inc , researching and developing next-generation car technologies.

Silicon Valley is competing to create software to run self-driving vehicles, as well as services associated with autonomous driving, such as mapping, car-sharing and car recharging services.

Data on LinkedIn, the professional networking site, shows that Apple has been siphoning up automotive engineers and experts, many with expertise in autonomous driving technology, at a significant pace.

A search of LinkedIn profiles turns up more than 60 former Tesla employees now employed by Apple, including dozens of hardware, software, manufacturing and supply chain engineers. There are also a variety of ex-Tesla recruiters, retail or sales specialists, attorneys and product managers.

Apart from the five defendants, at least six other ex-A123 engineers had moved over to Apple, according to their LinkedIn profiles, though with titles like "Technical Program Manager," their duties at Apple are unclear.

source: www.abs-cbnnews.com

Hyundai, Kia to pay record fine in US for overstating mileage

WASHINGTON/DETROIT - Korean carmakers Hyundai Motor Co and affiliate Kia Motors Corp will pay $350 million in penalties to the U.S. government for overstating fuel economy ratings in what officials said on Monday was the biggest settlement of its kind.

The deal comes on top of $395 million the automakers agreed to pay last December to resolve claims from the owners of the vehicles, bringing the companies' total cost for the mileage overstatements to more than $700 million.

Monday's settlement with the U.S. Environmental Protection Agency, the U.S. Department of Justice and the California Air Resources Board resolves an investigation of the South Korean carmakers' 2012 fuel economy ratings.

The penalties were the largest ever under the Clean Air Act.

"This will send an important message to automakers around the world that they must comply with the law," said Attorney General Eric Holder.

Under the accord, which involved the sale of 1.2 million cars and SUVs, the South Korean car firms will pay a $100 million penalty, spend around $50 million to prevent future violations and forfeit emissions credits estimated to be worth more than $200 million.

The greenhouse gas emissions that the forfeited credits would have allowed are equal to the emissions from powering more than 433,000 homes for a year, the EPA said.

"Businesses that play by the rules shouldn't have to compete with those breaking the law," said EPA Administrator Gina McCarthy.

McCarthy said Hyundai and Kia had committed the most egregious violation of the reporting standards. She declined to say whether other violators may also be fined.

"Every automaker will be looking carefully at its current testing procedure to avoid a similar penalty in the future," said Karl Brauer, senior analyst at Kelley Blue Book's KBB.com, who noted "frustration in the gray area between automakers' stated MPG numbers and the real-world results experienced by car owners".

In November 2012, Hyundai and Kia conceded they overstated fuel economy by at least a mile per gallon on vehicles after the EPA found errors for 13 Hyundai and Kia models from the 2011 to 2013 model years. Hyundai said at the time that the affected cars' reported fuel economy would be adjusted by 1 to 2 miles per gallon.

Hyundai Motor shares fell as much as 4.4 percent in Seoul trading on Tuesday, extending a slide that has dragged them to their lowest in over four years.

The decline knocked Hyundai from its perch as South Korea's second-most valuable company after Samsung Electronics Co Ltd , according to exchange data on common shares, a spot it had held since March 29, 2011.

Hyundai and Kia both increased their shares of the U.S. new-vehicle market in the past decade, particularly during the economic downturn of 2008 to 2010 when consumers craved fuel-efficient and relatively low-priced vehicles.

However, Hyundai has lost U.S. market share in the past couple of years, as U.S. and Japanese rivals made a comeback.

Hyundai said on Monday that its U.S. vehicle sales fell 7 percent in October from a year earlier, lagging the market's 6 percent gain, with weaker sales of the Sonata sedan offsetting demand for its Santa Fe sport utility vehicles. Kia's U.S. shipments rose 12 percent in October.

"We are pleased to put this behind us," said Hyundai U.S. chief David Zuchowski. The company added that it believes its process for testing vehicle fuel economy meets U.S. guidelines, and the overstatement was a result of a data processing error.

Hyundai's U.S. chief at the time, John Krafcik, stepped down after his contract expired at the end of 2013.

Kia in a statement said its priority "remains making things right for our customers through our fair and transparent reimbursement program".

source: www.abs-cbnnews.com

Self-driving cars also talk to each other

DETROIT -- An Acura RLX sedan demonstrated an unusual way to tow another car this week: the vehicles were not physically attached. The second car drove itself, following instructions beamed over by the first in a feat of technology that indicates a new stage in automation is happening faster than many expected.

Systems that enable vehicles to communicate with each other have been developed in recent years in parallel with features that enable cars to drive themselves. Manufacturers and suppliers now are putting the two together in novel ways, with broad implications for vehicle safety and convenience.

General Motors Co., Honda Motor Co., which owns Acura, and other automakers are working with traditional suppliers and startup firms. Tech giants Google, with its pioneering work on driverless cars, and Apple, which is working with automakers to embed greater connectivity in their cars, are accelerating the change.

"It is the mix of big companies -- Apple, Google, the automakers and the data aggregators -- that starts to create momentum. Two years ago, it was different. It was a promise. Today, it's reality," said Laurens Eckelboom, executive vice president of business development at Parkmobile, a smart-parking startup whose investors include BMW AG and Ford Motor Chairman Bill Ford's venture capital firm Fontinalis Partners.

A "truck platooning" application by Peloton Technology, a startup based in California's Silicon Valley, is intended to save fuel and reduce collisions.

As with virtual towing, a "platoon" of two heavy trucks use wireless communication and computer-controlled braking and acceleration to keep in close formation on the highway, according to a description by the company, which expects to start selling the technology late next year at $2,000 per truck plus a share of the projected operating savings.

The total price tag for widespread adaption of such features could be steep. The National Highway Traffic Safety Administration estimates automakers will need to spend billions of dollars to install safety systems that automatically assist drivers and could be mandated by 2020, when the industry expects the first self-driving cars to start easing onto roads.

Who is liable?

There are other risks and issues including reliability, cybersecurity and legal liability.

"What happens if a self-driving car gets into an accident? Who is liable for the damages? Will the human 'copilot' be at fault or will the car's manufacturer?," the Center for Insurance Policy and Research wrote last month, citing "a long list of safety and legal issues to iron out before self-driving cars hit the road."

All the razzle-dazzle technology promised by automakers and regulators "shouldn't take our eyes off the prize -- cars that don't crash," Jon Lauckner, GM's chief technology officer, said at the Intelligent Transport Systems World Congress in Detroit this week.

Citi analyst Itay Michaeli said the convergence of connected and automated technologies also has the potential to reduce vehicle emissions and fuel usage, and bring down vehicle operating and insurance costs.

Active safety, including hands-free driver assistance and accident avoidance, was a common thread of many technical discussions and technology advances on display at the ITS show, which attracted 10,000 engineers, scientists and researchers, ending on Thursday.

Automakers are starting to put more of the new technologies on the road "to get some experience and see how the market reacts in advance of the government requiring it," said Jeff Owens, Delphi Automotive chief technology officer.

Price is still a big question. Some advanced systems could cost two to three times more to develop than early adopters are likely to pay, several industry insiders estimated in conversations at the show.

Even with just a few semi-automated systems installed, the price tag remains stiff, although recent studies have shown car buyers are willing to pay about $3,000 to have hands-free driving capability.

The Chrysler Group, a unit of Italy's Fiat SpA, is charging nearly $3,500 for a technology bundle on its new 2015 Chrysler 200C sedan that includes adaptive cruise control, which automatically applies brakes and throttle to keep a vehicle a safe distance behind the one ahead; lane departure warning with lane keep assist, which automatically redirects a vehicle that is drifting out of its traffic lane; blind spot and cross path detection, which helps the driver monitor the presence of vehicles, and automatic park assist.

GM's Cadillac brand hasn't said how much its new Smart Cruise system will cost when it debuts in about two years. The system is designed to enable hands-free driving on the freeway with automatic steering, braking and throttle, as well as using GM's OnStar system to provide location, weather and traffic information to the automated systems.

But drivers should not expect to take a snooze. "We are talking about 'automated' driving features, not autonomous driving," with Smart Cruise, warned spokesman Jim Cain. "We will have strategies in place to keep the driver alert and engaged."

source: www.abs-cbnnews.com

Japanese automakers recall 3-M vehicles globally for airbag

TOKYO - Japanese automakers on Monday recalled nearly three million vehicles worldwide over an airbag defect that could pose a fire risk.

Honda said it recalled about 2,033,000 vehicles which were produced between August 2000 and December 2005, including more than one million in North America and 668,000 in Japan.

Two other automakers -- Mazda and Nissan -- also recalled hundreds of thousands of vehicles over the same problem, which was also responsible for earlier recalls by Toyota.

Japan's Takata Corp., which made the airbag, noted its US subsidiary had manufactured the airbag, apologising for the problem and vowing to make its utmost efforts to prevent a recurrence.

"We apologise deeply for causing tremendous trouble and worries to client companies, users of our products and other people concerned," the company said in a statement.

Nissan recalled a combined 755,000 vehicles, including 128,000 in Japan and 627,000 overseas.

"In North America, 228,000 are on the recall list, with 7,000 in China," a Nissan spokesman said.

A Mazda spokeswoman said: "The recall will cover 11,832 vehicles at home and 147,975 units overseas, mainly in Europe and China."

Subject to Honda's recall are a total of 13 types of vehicles in Japan including popular Fit and Accord models.

Front passenger airbag inflators could have been assembled with an improperly manufactured propellant component, Japan's third largest automaker said.

That could cause the container of the inflator to rupture in the event of a crash, posing a fire risk or injuring passengers, it added.

The same problem has also caused top automaker Toyota to recall millions of vehicles globally.

Toyota has earlier said it acted as it received a complaint from a Japanese customer who said his passenger seat was burned from the defect.

Honda said the company had received no complaint or reports of injuries on its own.

Honda shares closed down 0.63 percent at 3,602 yen on the Tokyo Stock Exchange while Takata soared 2.87 percent to 2,111 yen.

source: www.abs-cbnnews.com

With driverless cars, what will humans do on the road

EMBED: A model poses in the Rinspeed XchangE electric powered autonomous driving concept car is pictured during the media day ahead of the 84th Geneva Motor Show. Photo by Arnd Wiegmann, Reuters

GENEVA -- Brew an espresso, watch a movie on a large screen, surf the Internet or simply sit and chat with friends?

As automakers and technology firms steer towards a future of driverless cars, a Swiss think tank is at the Geneva Motor Show this week showing off its vision of what vehicles might look like on the inside when people no longer have to focus on the road.

"Once I can drive autonomously, would I want to watch while my steering wheel turns happily from left to right?" asked Rinspeed founder and chief executive Frank Rinderknecht.

"No. I would like to do anything else but drive and watch the traffic. Eat, sleep, work, whatever you can imagine," he told AFP at the show, which opens its doors to the public Thursday.

Google is famously working on fully autonomous cars, and traditional carmakers are rapidly developing a range of autonomous technologies as well.

With analysts expecting sales of self-driving, if not completely driverless, cars to begin taking off by the end of this decade, Rinderknecht insists it's time to consider how the experience of riding in a car will could be radically redefined.

Patting his shiny Xchange concept car, Rinderknecht says he envisages a future where car passengers will want to do the same kinds of things we today do to kill time on trains an airplanes.

So Rinspeed has revamped the interior of Tesla's Model S electric car to show carmakers how they might turn standard-sized vehicles into entertainment centres, offices and meeting spots wrapped into one.

The seats can slide, swivel, and tilt into more than 20 positions, allowing passengers to turn to face each other or a 32-inch screen in the back.

Up front too, an entertainment system lines the entire length of the dashboard, and the steering wheel can be shifted to allow passengers a better view of the screens.

Espresso anyone?

And of course there is an espresso machine.

While brewing coffee, video conferencing and keeping an eye on your email at 120 kilometers an hour may sound like a fantasy today, Rinderknecht is convinced it could happen in the not too distanced future.

"We think this is what things could look like in a few years time," he said.

Driving, he said, is on the cusp of being redefined, allowing people to take the wheel for pleasure, for instance while going over an Alpine pass, but handing over control of the car on tedious stretches.

"If I have to go three hours from Geneva to Zurich and it's congested, I'm not doing anything... I want to be doing something else," he said.

Carmakers at the Geneva Motor Show seemed to agree that vehicles that drive themselves, at least to a certain extent, are on the horizon.

"Autonomous driving is an inevitability that we are approaching very rapidly," Hyundai Europe COO Allan Rushforth told AFP. He stressed though that "full automation" was not a priority.

Ford Europe chief Stephen Odelle also said the technology was speeding forward, but added that he believed "the technology will be ready before legislation and consumers are."

"How comfortable will consumers be with fully automated cars?" he asked, adding that legislating for liability would be quite tricky with no driver behind the wheel.

Rinderknecht acknowledged there are obstacles, but insisted "they can be overcome."

He pointed out that accident reduction is actually a major argument for automation, since once the technology is finalized the machines should be far more reliable than humans.

And while it will be an upward battle to redefine liability legislation, "I think it can be done, because laws must adapt to life, and life as we all know changes," he said.

source: www.abs-cbnnews.com

Fiat strikes $4.35-B deal to buy rest of Chrysler

MILAN/DETROIT - Italian carmaker Fiat SpA struck a $4.35 billion deal to gain full control of Chrysler Group LLC, ending more than a year of tense talks that have obstructed Chief Executive Sergio Marchionne's efforts to combine the two automakers' resources.

The agreement, announced on Wednesday, cements Marchionne's reputation as the industry's consummate dealmaker about a decade after he took the helm of Fiat as a car business newcomer, analysts and bankers said.

But it remains to be seen whether a merger will be enough to cut Fiat's losses in Europe. Marchionne's plan to shore up Fiat depends on the ability to share technology, cash and dealer networks with Chrysler, the No. 3 U.S. automaker.

"This is an increasingly American company now, because in Europe, and especially in Italy, the business conditions remain difficult," said Andrea Giuricin, transport analyst at Milan's Bicocca University. "Fiat has already lost many of its market positions in Europe and it won't be easy to recover that."

Fiat will acquire the 41.46 percent stake in Chrysler it did not already own from a retiree healthcare trust affiliated with the United Auto Workers union. The trust, known as a voluntary employee beneficiary association or VEBA, will receive $3.65 billion in cash for the stake, $1.9 billion of which will come from Chrysler and $1.75 billion from Fiat. After the deal closes, Chrysler has committed to giving the UAW trust another $700 million over three years.

The deal is expected to close on or before Jan 20. Fiat said that because of how the deal is structured it will not need to make any capital increase through a rights issue.

The VEBA's payout is less rich than some analysts expected. The sale of the UAW trust's stake values the No. 3 U.S. automaker at less than $9 billion. When factoring in the additional $700 million, Chrysler is worth $10.5 billion.

"We thought they were going to have to pay a lot more than that," a London-based analyst at a major investment bank said. "The market's going to love this - Marchionne's done it again. He's brought in a deal that looks like a cracking one on the face of it and he doesn't need to do a capital increase."

'DEFINING MOMENT'

Marchionne, who has run both automakers since Chrysler's 2009 U.S. government-funded bankruptcy restructuring, aims to merge Fiat and Chrysler into the world's seventh-largest auto group.

But he has been at odds over the U.S. automaker's worth with the trust, which was pushing for a payout of more than $5 billion. In September, the trust exercised an option enshrined in bankruptcy documents to force Chrysler to file for an initial public offering.

Wednesday's deal will allow Chrysler to avoid an IPO.

In a statement, Marchionne called the buyout a defining moment for the two companies.

"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker," he said.

The Chrysler buyout talks have been closely watched by debt and equity investors as Fiat's long-term plan to cut losses in Europe depends on its ability to deepen ties with Chrysler.

Chrysler is now a profit center for Fiat, but the two companies currently are forced to manage their finances separately. A full merger will make it easier - but not automatic - to combine the cash pools of the two companies, giving Fiat more funds to expand its product lineup.

The UAW trust was created in 2007 as a way for General Motors Co, Ford Motor Co and Chrysler to offload their obligations to pay retiree healthcare benefits.

Medical benefits for GM, Ford and Chrysler retirees are handled in separate accounts and each account was initially to be funded with cash. But during the 2009 financial crisis, the VEBA agreed to accept stakes in GM and Chrysler in lieu of cash.

source: www.abs-cbnnews.com

Race to develop self-driving cars heats up

TOKYO - Cars that drive themselves used to be a pipe dream, only to be seen in the movies. But with cars already packed with information technology, the idea is no longer far-fetched for global automakers, and the competition is heating up.

U.S. companies are leading the way. Last year, Google Inc. posted a video on YouTube showing a car traveling on its own while its "driver" eats a hamburger with his hands completely off the steering wheel. The clip, covering a slice of the firm's 200,000 miles of computer-led driving tests on public roads, has been viewed almost 5 million times.

Google is aiming to introduce the technology by 2017, while General Motors Co. has announced a plan to put its own automated driving technology into practical use in the second half of the 2010s.

With the new technology expected to reduce accidents caused by human error and give opportunities for the elderly and the handicapped to travel by car, rivals are also entering the race.

Nissan Motor Co. was among the first Japanese automakers to announce plans to market self-driving cars. The Japanese firm is looking to put the technology on the market by 2020, setting up a driving test facility near Tokyo.

"Obviously, we've seen the reaction from the public. There is a lot of attention and thirst from everybody about the automated car," Nissan CEO Carlos Ghosn said earlier this month as he sat behind the wheel to test his firm's prototype self-driving car at the CEATEC high-tech show in Tokyo.

"We are under pressure from a lot of competition...We're going to get there even sooner than we think. What's going to be left is only the reliability of the system."

Nissan is looking to begin its first tests of its driverless car, equipped with artificial intelligence, on public roads in Japan.

Toyota Motor Corp. has also recently announced it is joining the battle. It is planning to launch a safety system for highways featuring automated driving technology in the mid-2010s, but its approach slightly differs from Google and Nissan, whose ultimate goal is to build completely driverless cars.

"Of course we want to establish a perfect technology for automated driving, but we believe it always needs to be a human that drives a car, and such technology would just serve as a support for drivers. We are not planning to market cars which run without a driver," said Susumu Umemura, general manager at Toyota's future project division.

"But it will definitely be one of the most important technologies we need to put resources into down the road. We would like to deliver it to our customers as soon as possible."

Honda Motor Co. unveiled a prototype of its automated driving car on Tuesday at the ITS World Congress held in Tokyo. The car is equipped with camera, censor and telecommunication systems, and it stops when it senses danger and drives itself from point to point.

Though Honda has not unveiled a specific date for putting the vehicle on the market, it is a "must-win game and we will definitely put a lot of efforts into this area," said Naoki Hayashibe, general manager at the technology development division.

There are many challenges, however, to realize the dream of self-driving cars. Shigeru Matsumura, equity researcher at SMBC Friend Research Center, says the development of legal systems remains the biggest agenda in Japan and elsewhere.

"In the event of an accident, would it be a driver or an automaker, or a software maker that would be held liable? Japan is lagging behind in such discussions compared with the United States. I think we have to go a long way before driverless cars grow popular," Matsumura said.

Analysts and researchers also point out that self-driving cars would deprive car enthusiasts of the joy of sitting behind the wheel, contradicting automakers' efforts to promote a driving culture.

"But it is certain that automated driving system will be the hottest issue in the auto industry in the next few years," said Matsumura.

source: www.abs-cbnnews.com