It was an electric week in the global automotive business -- and I mean that literally, with a wide range of developments pointing toward the mainstreaming of electric vehicles here in the United States. But that's not all that's going on, of course. Here are some other stories that you might have missed.
A coming death at Ford?
Is Ford's (NYSE: F ) venerable Mercury nameplate about to join Studebaker, Oldsmobile, and Pontiac in the automotive dust heap? According to a Bloomberg report, Mercury's death may indeed be imminent: Bloomberg's sources say that a proposal to wind down the brand will be presented to Ford's board of directors at its July meeting.
The Mercury brand, created by Edsel Ford in 1939, has been Ford's mid-priced brand for decades, offering somewhat plusher variations of mainstream Ford vehicles that were separate from Ford's upmarket Lincoln nameplate. In practice, the brand served as a way to give standalone Lincoln dealers a full line of cars to sell, just as Chrysler's dealers paired its namesake luxury line with workmanlike Plymouth in decades past. According to Bloomberg, Ford will try to persuade standalone Lincoln-Mercury dealers to close or to merge with existing Ford dealerships.
While traditionalists may be saddened, Ford shareholders should applaud this move. Mercury has been little more than a distraction in recent years, a brand-engineered stable of placeholders supported by marketing efforts best described as trivial. Refocusing Mercury's resources on Ford-branded products -- or perhaps on a Cadillac-like renaissance for the once-iconic Lincoln brand -- is a natural step in CEO Alan Mulally's drive for a focused global portfolio of best-in-class Fords.
Here comes the safety crunch
How did you think Congress would react to Toyota's (NYSE: TM ) very public safety woes? If you said "with grandstanding and bombast and a bill full of new safety rules that the manufacturers have resisted for decades," you were right on the money. The House Energy and Commerce Committee just signed off on an extensive auto-safety bill that would require, among other things:
- "Black boxes," otherwise known as "event data recorders," in all new cars. Details have yet to be completed, but the idea is that the boxes will record the last 60 or so seconds of data from several sources in your car -- including your speed, how hard you were applying the brakes, what your engine was doing, and so on -- for use after an accident.
- A "safety fee" of $3 on every new car sold -- rising to $9 after a few years -- that would fund a larger budget for the National Highway Traffic Safety Administration.
- Brake systems that would override the engine's throttle, allowing drivers to stop runaway cars.
- $40 million in funding for research into drunk-driver detection systems that would prevent those who have been drinking from starting their cars.
- Quiet-car noisemakers that would require electric vehicles to make enough noise to be heard by blind pedestrians.
The bill was characterized as a compromise that the automakers would support. A full House vote will probably come later this year.
Why so skeptical, Honda?
Honda (NYSE: HMC ) has long been known as an innovator, but the company has shied away from the ongoing electric-vehicle gold rush. CEO Takanobu Ito reiterated that position yesterday, when he said battery technology is not yet ripe and that he expects that it will be 10 to 20 years before electric vehicles become mainstream.
But Honda's apparently hedging that bet. It's now considering some low-volume electric models for the U.S. market and looking to China for battery production, according to a Reutersreport. Honda is hardly the only one seeking deals in China -- most recently, battery maker Ener1 (Nasdaq: HEV ) signed a joint-venture agreement with Chinese auto-parts maker Wanxiang. Wanxiang has a backlog of battery orders from customers in China, currently the world's fastest-growing market for electric vehicles, and is looking to Ener1 to ramp up production later this year.
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