Street Impatient with Ford's Way Forward

Ford Motor Co. is scheduled to release its earnings this week and the consensus among analysts is that the company will post a substantial loss that will underscore the failure so far of the company's turnaround plan, in the face of stiff competition and rising fuel prices.

Patience is absent from Wall Street's view on Ford. Moody's Investors Service cut the company's credit rating further into junk status Friday. In its announcement, Moody's said that it was apparent that the ongoing shift from big SUVs to cars was hurting the company's prospects for recovery.

With gasoline prices hovering near record levels, Moody's said the downgrade reflected its expectation that high fuel prices and the resulting shift away from highly profitable sport-utility vehicles would further damage the company's profits. During the first six months of 2006, Ford's sales of mid-size SUVs fell 24.7 percent and sales of large SUVs declined by 32.1 percent, Moody's noted.

Street Impatient with Ford's Way Forward (7/15/2006)
Earnings this week could underscore lack of progress.

TCC's All About Green Machines

Fuel prices are hovering near record levels, while turmoil in the Middle East threatens to cut off supplies of petroleum. Meteorologists predict another year of record heat and high hurricane activity as some skeptics start to accept the threat of global warming.

It's no wonder American motorists have begun to think twice about the cars, trucks, and crossovers they buy. Wherever you turn these days, you hear people talking about hybrids, diesels, ethanol, and fuel-cell vehicles. But what exactly do these terms mean? Can they really reduce your fuel bills, trim back on imported oil, and lower harmful automotive emissions? Are any of these products are right for you? And are there any downsides?

TheCarConnection wants you to know all about "green machines" -- whether you're looking for a hybrid vehicle, a fuel-cell car, an electric SUV or a diesel commuter car.

All About Green Machines (7/15/2006)
The basics - and more - about earth-friendly vehicles.

All About Green Machines: A Primer (7/15/2006)
A new generation of vehicles promise to help the earth stay green - but what does it all mean?

All About Green Machines: Glossary (7/15/2006)
What's the difference between a biodiesel and McDonald's fry machine? Find out here.

Gas Prices Set to Soar

Conflict in the Middle East has left gasoline prices at or near record levels across the United States, topping levels reached after Hurricane Katrina last September. The average price for self-serve regular gasoline is $2.968 per gallon, according to AAA's survey - and new data suggested prices could soon push past $3 per gallon.

The average price of self-serve regular was $2.899 one month ago. One year ago the price was $2.291 per gallon, AAA said.

AAA said events in Mexico, Iran, Iraq, Israel, India, and North Korea have energy markets on edge and oil prices at elevated levels. In addition, gasoline stocks dropped following heavy demand over the Fourth of July holiday.

Crude futures, which have emerged as a good indicator of the direction of prices, reached an intraday record of $78.40 in trading on the New York Mercantile Exchange on Friday. Crude eventually settled at $77.03 a barrel but the rule of thumb is that every dollar increase in the cost of crude oil adds five cents to the price at the pump.

Economists are growing concerned that rising oil prices will hobble economic growth. The University of Michigan said its consumer-sentiment index for July fell 1.9 points to 83. That compares with expectations for a slight rise to 85.5. In addition, the upward pressure on oil prices has heightened expectations that the Federal Reserve Board will boost interest rates again in an effort to defuse inflationary pressures. -Joe Szczesny

Toyota in Japanese Recall Flap

Toyota's reputation took another recall hit last week when it was disclosed that the police in a small Japanese city were accusing Toyota execs of failing to recall a sport-utility vehicle even though the company knew for some time that the vehicle suffered from a potentially dangerous defect in the steering gear.

The defect was uncovered by the police in Kumamoto after an accident in which the driver of a Hilux Surf lost control of his vehicle and crossed a center divide into another vehicle. No one was killed but five people were injured and the discovery of the defect was front-page news throughout Japan last week.

The local police in Kumamoto have asked the local prosecutors to investigate three current and former executives for possible negligence for deciding not to recall the vehicle, which is sold as 4Runner in the U.S. The three Toyota executives were not identified but Toyota issued a statement indicating the company was prepared to defend the three officials and that they had acted appropriately. However, Toyota also promised to cooperate with the investigation and to work harder at quality control.

The Japanese auto giant has been hit with a number of large recalls lately. But while a scandal involving Mitsubishi recalls badly damaged the company's reputation with Japanese consumers, Toyota is in a much stronger position to weather a recall controversy. Provided it goes no further up the chain of command at Toyota, the latest recall controversy does not appear to be as extensive as the one that crippled Mitsubishi.

Still, Toyota is starting to adopt a more proactive stance in confronting recalls. Last week, it announced it was recalling more than 367,000 Toyota and Lexus sport-utility vehicles in the U.S. because a piece in the front console area could come loose and interfere with the gas pedal. The recall involves 2004-05 models of the Toyota Highlander and Lexus RX330, and early 2006 models of the Highlander Hybrid and the RX400h, the hybrid version of the RX330. -Joe Szczesny

Hyundai Chair, Ala. Gov Meet

Hyundai Motor Chairman Chung Mong-koo met Friday with Alabama state governor Bob Riley in his office in Seoul.

During the meeting, Chung expressed his thanks for Alabama's help in the growth of the automaker's plant, which opened in late May of last year. Riley in turn thanked the company for its hiring and development in the southern state, according to a Hyundai release.

The meeting is significant as one of the first designed to put Hyundai and Kia back on track as the company pushes to become one of the five top automakers in the world by 2010. Now that Chung is back on duty, Hyundai Motor and its affiliate Kia Motors are expected to soon schedule ceremonies to mark the start of construction their new plants in the Czech Republic and in West Point, Georgia.

The 68-year-old Chung was freed recently on $1 million bail after two months in detention on charges he set up slush funds to pay for political and business favors. -Peter Chang

FROM THE SOURCE headlines from the latest press releases

Toyota Announces Pricing for 2007 Corolla

Name	Symbol	Last	Change
Autobytel, Inc.	ABTL	3.39	-0.07 (-2.02%)
Autoliv Inc.	ALV	53.24	-0.76 (-1.41%)
AutoNation Inc.	AN	20.21	-0.20 (-0.98%)
ArvinMeritor Inc.	ARM	16.24	-0.08 (-0.49%)
American Axle & Mfr. Holdings Inc.	AXL	14.81	+0.01 (+0.07%)
Ballard Power Systems Inc.	BLDP	5.89	+0.08 (+1.38%)
BorgWarner Inc.	BWA	60.39	-0.42 (-0.69%)
Cummins Inc.	CMI	114.37	-1.17 (-1.01%)
DaimlerChrysler AG (ADR)	DCX	47.59	-0.34 (-0.71%)
Dura Automotive Systems	DRRA	1.79	-0.01 (-0.56%)
Eaton Corporation	ETN	68.05	-1.16 (-1.68%)
Ford Motor Company	F	6.38	-0.18 (-2.74%)
General Motors Corporation	GM	27.47	-0.85 (-3.00%)
Gentex Corporation	GNTX	13.01	-0.03 (-0.23%)
Goodyear Tire & Rubber	GT	9.99	-0.09 (-0.89%)
Honda Motor Co. Ltd. (ADR)	HMC	30.10	-0.31 (-1.02%)
Johnson Controls Inc.	JCI	80.88	-1.99 (-2.40%)
Lear Corporation	LEA	20.16	-0.68 (-3.26%)
Magna International Inc.	MGA	71.55	+0.33 (+0.46%)
Motorola Inc.	MOT	18.69	-0.36 (-1.89%)
Nissan Motor Co. Ltd. (ADR)	NSANY	20.45	-0.07 (-0.34%)
Sonic Automotive Inc.	SAH	21.24	-0.28 (-1.30%)
Siemens AG	SI	79.51	-1.54 (-1.90%)
Sirius Satellite Radio	SIRI	4.03	-0.06 (-1.47%)
Toyota Motor Corporation (ADR)	TM	97.96	-1.14 (-1.15%)
TRW Automotive Holdings	TRW	25.16	-0.55 (-2.14%)
Tower Automotive Inc.	TWRAQ.PK	0.09	-0.00 (-0.11%)
United Auto Group Inc.	UAG	20.03	-0.08 (-0.40%)
Visteon Corporation	VC	6.78	-0.35 (-4.91%)
XM Satellite Radio Hold.	XMSR	12.89	-0.14 (-1.07%)