Ford plant in Germany might cut 700 engine-making jobs

Ford Motor's plant in Cologne, Germany might have to cut 700 out of the nearly 1,000 jobs working at the engine production plant if it is not awarded the contract to make three-cylinder engines, a company spokesman said.

He said the 700 will be transferred to other jobs elsewhere at the plant because the union has an agreement with management that there will be no mandatory layoffs until 2011.

The facility currently produces six-cylinder engines but will be stopped "in the foreseeable future". He declined to give a timeframe.

Discussions are going on whether the production of three-cylinders would be made at the Cologne plant or in Craiova, Romania, or split between the two sites.

He rejected German media reports that the Cologne plant is on the brink of being shut down.

The Cologne plant employs 17,300 people, of which almost 1,000 are in the engine production facility. The engine facility currently makes around 100,000 engines annually, mainly for the U.S. market.

Ford could face suit over troublesome truck engine

Ford Motor Co. once again could be haunted by a diesel engine problem resulting from a batch of bad engines used in 2003- and 2004-model trucks.

A federal court reinstated a lawsuit Wednesday against Ford alleging that the automaker equipped its 2004-model diesel-powered Super Duty pickups with flawed engines from the 2003 model year.

The ruling reopens a motion previously filed to give the suit against Ford class-action status.

The 6th Circuit Court of Appeals in Cincinnati ruled in favor of Kenneth E. Corder of Louisville, Ky., who sued Ford in 2005.

According to court documents, Corder purchased a 2004 F-250 Super Duty pickup that contained a 2003 model year version of the 6.0-liter Power Stroke, instead of the improved 2004-model engine.

Corder said he waited to purchase the 2004 model because of "widely reported problems" with the 2003 engine model, according to court documents.

"The engine in the 2003 F-250 truck was notorious for its deficiencies, which were widely publicized, including leaky fuel injectors, oil leaks, broken turbochargers, wiring harness troubles, faulty sensors, defective exhaust gas recirculation valves and bad computers," U.S. District Judge William Schwarzer wrote in an opinion Wednesday.

Corder sued Ford in 2005 and filed a motion for class-action status to represent anyone who bought a 2004 pickup with a 2003-model engine.

A two-judge majority of three federal judges ruled in favor of reinstating the case. The dissenting judge was U.S. District Judge David McKeague.

"Ford is disappointed with the decision," spokesman Marcey Evans wrote in an e-mail to Automotive News. "The company agrees with Judge McKeague that it is not misleading or deceptive not to inform car purchasers about the manufacturing history of vehicle components, and that the plaintiff in this case, who is satisfied with his properly-performing vehicle, has suffered no loss. We believe that a jury is likely to reach these same conclusions as well."

Ford argued that its engines do not have model years. But Schwarzer wrote today there is "substantial evidence" that Ford distinguished between the 2003 model and 2004 model diesel engines, according to court documents.

The documents cite internal letters from Ford that distinguish between a 2003 engine and 2004 engine.

A U.S. district judge dismissed the suit in 2007 before ruling on the motion seeking class-action status.

The case now returns to U.S. District Court in Louisville for further proceedings.

Ford faced engine problems in 2003- and 2004-model Power Stroke trucks. Automotive News reported in 2005 that at least 58 suits were filed against Ford involving quality problems with the engines.

Ford said in 2005 that its warranty costs soared by $500 million through the first nine months of that year compared with the same period in 2004. Part of the increased costs were to pay for repairs of the faulty diesel engine.

iPhone Hype Begins Again

Get ready for iPhone-mania 2.0.

On July 11, Apple will launch a zippier version of the iPhone starting at $199 with a two-year AT&T contract, down from $399. It will have built-in GPS for traffic directions, run on a speedy "3G" wireless network from partner AT&T and offer corporate e-mail support.

"Sales will explode," says Van Baker, an analyst at Gartner.

The iPhone — a combination phone/iPod and Internet device — first began selling last June. "As we arrive at the iPhone's first birthday, we're going to take it to the next level," Apple CEO Steve Jobs said Monday.

The $199 model can hold 8 gigabytes of music, photos and other media. A $299, 16 GB is available in a new color, white.

AT&T will be the exclusive U.S. distributor for another four years. One significant change: With the 3G version, AT&T said Apple will no longer receive a portion of monthly service revenue.

Instead, AT&T will fork out a substantial subsidy to help keep the price low. AT&T is hoping to drive mobile data usage and draw new subscribers.

While the subsidy — which telecom analysts peg in the $200 range — initially will put pressure on AT&T's profit margins, it could help push the iconic iPhone into the mainstream.

Jobs told USA TODAY that current iPhone customers can buy a new one and have their old plan morphed into a new two-year arrangement.

"This is a very positive move for AT&T, and it will gain share from Sprint and Verizon," analyst Tim Horan of Oppenheimer wrote in a note to clients.

While the iPhone has been a critical and consumer hit, Internet speed has been a chief complaint. The new phone uses faster networks that will dramatically improve mobile Web surfing.

Apple said it has sold 6 million iPhones. Tech analysts think it will meet its goal of 10 million by the end of the year. Over the next several months, Apple will roll out official sales in 70 countries, up from six.

In July, the company will launch the iPhone App Store on iPhones and the iPod Touch (like the iPhone, without the phone). It lets users easily download applications.

Getting such access to Apple customers "is phenomenal," says Andrew Erlichson, CEO of photo-sharing site Phanfare, which introduced an iPhone application Monday. "Power is shifting from the wireless carriers to the handset manufacturers."

Apple also introduced a new version of its $99-a-year .Mac backup service. Now called MobileMe, it automatically updates e-mails, contacts and other personal data across a computer and iPhone.

Mazda Extends RX-8 Warranty

Mazda North American Operations will extend the warranty on the rotary engine for the RX-8 sports car to eight years and 100,000 miles. The warranty takes effect on the 2009 model. It also is retroactive for the 2004-08 model years.
The warranty covers the rotary engine core, rotary housing and internal parts, and the internal seals and gaskets, according to a letter sent to dealers obtained by RX8club.com.
RX-8 owners who have repaired their engines in the period covered by the extended warranty can make a claim for reimbursement, the letter states.
While the rotary engine is smooth in its power delivery, owners have complained that it also is prone to coolant seal failures and sudden power drop-offs. Initial reaction from owners to the extended warranty was favorable.

Toyota May Bolster Truck Plant With Camrys

Toyota is considering a plan to add production of its strong-selling Camry to its under-utilized pickup, SUV and minivan plant in Princeton, Ind., a supplier source says.
Mike Goss, spokesman for Toyota Motor Engineering & Manufacturing North America, declined to confirm the plan. But he added, "We are looking at a lot of things to balance production."
The Camry, which sold 51,291 units in May, is assembled in Georgetown, Ky., and also at a dedicated assembly line at Subaru of Indiana Automotive Inc. in Lafayette, Ind.
Falling sales of the Tundra full-sized pickup has cut production at Toyota's two-shift Princeton plant. Built at two U.S. plants, the Tundra declined 31.5 percent in May. Princeton also assembles the Toyota Sienna minivan and the Toyota Sequoia full-sized SUV.