Last week, Hyundai announced it would add a second engine plant at its assembly facility in Montgomery, Alabama, but there was no announcement what the engine plant would produce. With the current engine plant in Montgomery building Hyundai’s V6 used in the Sonata and Santa Fe, we figured the plant would produce four-cylinder engines. Sixty to 70 percent of the Sonata sedans being built in Alabama are powered by four-cylinder engines that have been imported from Korea.

The new engine plant will build the Global Engine Manufacturing Alliance (GEMA) 2.4L four-cylinder engine, which will be used in the Sonata and for use at Kia’s new assembly plant in Georgia. The GEMA is an alliance of DaimlerChrysler, Mitsubishi and Hyundai, with the engines being used in various vehicles from each automaker, including the Hyundai Sonata, Kia Optima, Dodge Caliber and Avenger, and the 2008 Mitsubishi Lancer.

The plant will be able to build 300,000 engines annually — 200,000 a year in the first phase and another 100,000 annually at full production — and will employ 522 workers. Production is scheduled to begin in September 2008.

## Source: Automotive News ##

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When Honda’s new assembly plant in Greensburg, Indiana, begins production in 2009, the first product rolling off the line will be the Civic, according to a company source. Initially, the plant is expected to only build Civic models, but other models will be added later. The Civic is currently built in North America at Honda’s East Liberty, Ohio and Alliston, Ontario, No. 1 plants, and will soon be added to the Alliston No. 2 plant.

Honda will break ground on the new assembly plant on Monday, March 19. The Greensburg plant will be able to build about 200,000 units annually, and will employee about 2,000 workers.

Company spokesman David Iida declined to comment.

## Source: Automotive News ##

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BMW CEO Norbert Reithofer announced that the automaker will continue its new product initiative with the X6 crossover. The X6 crossover will begin production in 2008 at the company’s assembly plant in Spartanburg, South Carolina. The X6 is a spin-off of the X5 SAV that will seat four and feature a coupe-like body. The X6 will be offered with all-wheel drive and be powered by V8 engines.

Reithofer said that BMW hopes to increase production in the U.S. to more than 200,000 annually by 2010. BMW’s annual production capacity at its only U.S. production plant in Spartanburg, S.C., is currently around 140,000 vehicles. The aim of a North American expansion is to reduce the effect of a strong euro on prices in North America, BMW’s top single market.

## Source: BMW ##

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Hyundai has announced that it will build a new engine plant at its Montgomery, Alabama assembly plant. The new plant will begin engine production in September 2008 and will cost around $270 million. The new engine plant will add 520 jobs to the Montgomery assembly plant. The engines from the plant will be used in vehicle built at Hyundai’s Alabama plant, and also at Kia’s new plant in West Point, Georgia.

Hyundai currently produces V6 engines used in its Sonata sedan and Santa Fe crossover in Alabama.

Hyundai also said that it will begin prodcution of hybrid vehicles in 2009, will an output of 300,000 units annually by 2015.

## Source: Reuters ##

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Audi has announced that it will take over management responsibility for Volkswagen’s Brussels, Belgium assembly plant. Late last year, VW announced that it will move production of its Golf to plants in Germany, and there was speculation that the automaker would completely close the assembly plant. are now growing that the factory may be closed completely. However, VW decided that it would use the plant’s capacity to build the Audi’s new A1 entry-level car.

Under the terms of the agreement, later this year, the Audi A3 will join the production mix, and will be built along with various Volkswagen models until the end of 2009. After that, the new, compact Audi A1 (or whatever it will be called) will be built in Brussels starting in late 2009 or early 2010.

With various work rule changes, the new competitive pay and cost structures will cut personnel costs by 20 percent. The Brussels plant will help Audi meet is goal to increase production from 905,000 cars in 2006 to 1.5 million by 2015.

Audi press release after the jump.

## Source: Audi ##

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Despite reports to the contrary, Telsa Motors says that it will not use any Ford running gear in its WhiteStar project all-electric four-door sedan. There have been several reports that suggested that Tesla’s WhiteStar project will use Ford’s CD3 platform as the basis for the sedan. The CD3 platform underpins the Ford Fusion, Mercury Milan, and Lincoln MKZ.

Tesla Motors has said that the company will not share platforms with any major automaker. “I can confirm that we used some Ford products on the Roadster, but to the notion that we would use an entire chassis, or body of a car, the answer is no,” said spokesman David Vespremi.

Telsa has said that it will not use another automaker’s platform for its larger volume products like the WhiteStar sedan. Telsa is “…going to operate as any other major car manufacturer… Our business model is to bring more capabilities in house and do more ourselves,” said Vespremi. The company plans to do business directly with the same suppliers that the major automakers use.

Tesla will break ground next month on a $35 million assembly facility in Albuquerque, New Mexico. The new production facility is expected to employ up to 400 workers and have the capacity to build thousands of all-electric sedans annually. Production will begin in 2009.

## Source: The Car Connection ##

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Now that the deal for Aston Martin has been finalized, the British sports carmaker announced that it is committed to the expansion of the brand. Aston Martin plans to expand production by more than a quarter in the next three years, including the production version of the four-door Rapide concept, which debuted at the Detroit Auto Show in 2006.

Ulrich Bez, Aston Martin CEO, said the Rapide will add another 1,000-2,000 units to its current annual production of 7,000 units. The Aston Martin factory at Gaydon in Oxfordshire will need to be expanded with a new assembly line as well as other improvements.

The Rapide will be the second new model launched under Aston Martin’s new owners. Later this year, Aston Martin will kick off production of the DBS, its successor to the line-topping Vanquish S. The DBS debuted in Casino Royale, the latest Bond film.

The DBS and Rapide will expand Aston Martin’s range to six cars, including the current DB9, DB9 Volante V8 Vantage, and V8 Vantage Roadster.

## Sources: Aston Martin and TimesOnline ##

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Rolls-Royce has said that it expects its new “baby Rolls” to double the brand’s output when it debuts in 2010. Rolls-Royce CEO Ian Robertson expects that the brand will double to 1,600 units.

As previously reported, the new Rolls will ride on its own platform, and powered by V8 and possibly V12 engines. The car’s design was approved last month, and will be unmistakably Rolls-Royce. The new Rolls is expected to be priced between 200,000 and 300,000 euros.

## Source: Automotive News ##

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The Ford Motor Company said on Wednesday that its accelerated Way Forward turnaround plan, announced in September, would cost an estimated $11.18 billion. This is a $1.2 billion increase from it previous estimate in January. Most of that amount will be spent on programs to lay off employees.

Ford says it has already accrued $9.98 billion of the reorganization costs in 2006. The automaker is expected to spend $5.96 billion on “worker reduction programs,” $2.74 billion on charges related to scaling back pensions, $2.2 billion in fixed-asset impairment charges and $281 million associated to plant idlings.

Ford will accrue the additional $1.2 billion, primarily related to salaried job cuts, in the first quarter of 2007.

## Source: Reuters ##

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In a win for Ford Motor Co., a Michigan judge ordered Navistar International Corp. to resume shipping the 6.4L Power Stroke diesel engine that is used in Ford’s 2008 F-Series Super Duty trucks. The judge also ordered Ford to pay, without deductions, for the engines it receives.

Ford and Navistar have been at odds over warranty claims with the 6.0L Power Stroke — also built by Navistar. In January, Ford sued Navistar for unpaid warranty claims.

“The issue was never about building engines for Ford, it was about being paid, and they weren’t paying us,” said Navistar spokesman Roy Wiley.

Ford was forced to reduce production of the Super Duty trucks, but has said that regular operations will resume when it starts receiving engines. Navistar will restart production on Monday, but engines that are already built may be shipped earlier.

## Source: The Detroit Free Press ##

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General Motors has announced that it will end production of the Monte Carlo this summer, according to reports citing automaker sources. According to an email received by a member of the GMInsideNews forums, the Monte Carlo will be avilable for order until May 4th, and the last Monte Carlo will roll off the assembly line at GM’s Oshawa plant in Canada on June 20th.

According to the poster, GM is canceling the Monte Carlo to make room for the new 2008 Malibu that is due in October. When asked about the future of the Monte Carlo nameplate, GM said, “We do not comment on future product”.

## Source: GM Inside News ##

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The Chrysler Group and the UAW have agreed to two special buyout programs that will provide early retirement and separation incentives to union represented employees as the automaker tries to reduce its hourly work force by 11,000 people. Earlier this month Chrysler announced that it is cutting 11,000 hourly jobs and 2,000 salaried jobs to return to profitability by 2008.

The buyout program — officially called an Enhanced Voluntary Termination of Employment Program (VTEP) — provides a lump sum payment of $100,000 for employees with at least one year of credited service.

The early-retirement program — called an Incentive Program for Retirement (IPR) — will offer a lump sum payment of $70,000 pretax and full health care benefits to those with 30 years of service. The program will also be available to workers who meet a combination of age and years-of-service eligibility, either those at least 60 years old and with at least 10 years of service or workers who are at least 55 years old and whose age and credited service add up to at least 85 years.

Eligible employees were notified of their options today.

Chrysler Group statement after the jump.

## Source: Chrysler ##

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The DaimlerChrysler Supervisory Board today finally signed off on the limited partnership between the Chrysler Group and Chery to develop small vehicles. Under the agreement, Chery would build vehicles to be distributed under the Chrysler brands, primarily in North America and Western Europe. While DaimlerChrysler’s press release says “the Chrysler brands,” we assume it is talking about Dodge, as it is the only Chrysler brand that makes sense for a small car.

Back in December, Chrysler announced a preliminary agreement with Chery to build a new small car in China for worldwide export. At that time, Chrysler Group CEO Tom LaSorda said the automaker was not considering a production version of the Dodge Hornet concept, but rather it would a Dodge-branded Chery model. Word on the street is that Chrysler is now considering a production version of the Hornet, because of quality concerns of Chery vehicles.

While DaimlerChrysler has signed off on the deal, it’s still contingent upon approval of the Chinese government.

Full press release after the jump.

## Source: DaimlerChrysler ##

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Toyota today announced it would invest $1.3 billion to build its eighth North American assembly plant — and fifth in the U.S. — in northeastern Mississippi. The new plant will be built in Blue Springs, Miss., just outside of Tupelo.

Toyota’s new assembly plant is scheduled to begin production in 2010, and will build the Toyota Highlander crossover. The plant will have an annual capacity of 150,000 vehicles. It will employ approximately 2,000 workers at full production, and indirectly create work for many more.

The 1,700-acre site in Mississippi was chosen over sites in Arkansas and Tennessee. Mississippi is the seventh state where Toyota has a vehicle or engine factory. The new Toyota plant is the second big auto plant in the state, and follows Nissan’s Canton assembly plant, which opened in 2003.

Full press release after the jump.

## Source: Toyota ##

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Navistar International said on Monday that it has stopped shipping the all-new 6.4L Power Stroke diesel engines to Ford because of a “contract dispute.” Navistar builds the 6.4L Power Stroke that is the heart of the 2008 Ford F-Series Super Duty, one of the automaker’s key launches to help it become profitable again.

Last month, Ford sued Navistar over pricing and warranty costs related to the 6.0L Super Duty diesel engine. Ford claims that Navistar is not sharing warranty costs and says Navistar is not negotiating in good faith on prices for the new Power Stroke engine. Navistar said Ford had not honored the contract terms with the engine maker and it immediately halted production.

The F-Series truck line is Ford’s most profitable vehicle, and the Super Duty has averaged about 50 percent of the market for Heavy Duty trucks, and the Power Stroke is in 75 percent of all Super Duty trucks. Based on reports, Ford averages around $10,000 in profits on each diesel Super Duty sold.

Ford and Navistar are “tied at the hip,” Ford depends on the Navistar diesel engine and Navistar relies on the Ford production, according to Bear Stearns analyst Peter Nesvold. The cost of a disruption longer than a month, “could lead to an $11.6 billion in annualized revenue loss for Ford.” That’s a huge loss for Ford, and would be devastating to Ford’s turnaround efforts.

Ford says it has a stockpile of 6.4L Power Stroke engines, and that no production interruptions are expected.

## Source: Reuters ##

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