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January 20, 2010

Bosch’s Take on Parking: It’s Automatic

Bosch GmbH says it is working on a wide-range of next-generation parking technologies, with the ultimate goal of developing a fully automated system.

The company currently supplies semi-automatic park-assist systems on some 200 vehicles marketed by 14 automakers worldwide. Using Bosch’s ultrasound sensors, these systems take over the steering function during parallel parking maneuvers. Drivers still must operate the throttle and brakes and watch for surrounding traffic.

Bosch wants to provide similar assistance when motorists pull out of a parallel parking space. Steering control would be automated, and the driver would operate the accelerator and brake pedals. New side sensors also are in the works to help identify approaching vehicles and pedestrians that otherwise may be in the driver’s blind spot. Bosch also is developing a longer-range ultrasound sensor that could be used to help in pulling into right-angle parking spaces.

The company says it is targeting a fully automated system that controls the throttle, brakes and steering—and automatically intervenes if a potential collision is identified—while entering and leaving parking spaces. Bosch isn’t saying when it expects to launch any of the new technologies or how much each system would cost.


Canceled Acura NSX Replacement Morphs into Race Car

Honda Motor Co. has transitioned its now defunct replacement for the Acura NSX supercar into a new car that will compete in Japan’s popular Super GT Series that kicks off in March.

Honda HSV-010 racer

Honda emphasizes that the upcoming HSV-010 won’t provide the basis for a street car. But much of the technology developed for the canceled NSX program will be utilized in the race car. Riding on a 106-inch wheelbase, the race car measures 184 inches long. A new carbon fiber chassis helps keep curb weight to 2,425 lbs.

Power will come from a SuperGT-spec 3.4-liter DOHC V-8 that is expected to make about 500 hp and 289 lb-ft of torque. (The all-wheel-drive street model was to have been fitted with a 5.0-liter V-10, which also has been cancelled.) A Ricardo sequential gearbox with steering column paddle shifters will transfer power to the rear wheels.

Other features include a double wishbone suspension at all four corners, a torsion-bar stabilizer, hydraulic ventilated disc brakes and rack-and-pinion electric power steering.

Honda pulled the plug on the original NSX four years ago, following a 15-year run for the sports car. Development of a replacement model has stopped and started several times in recent years before the program was nixed altogether at the end of 2008 due to the global recession. Honda terminated its Formula One racing team at the same time.


Former Chinese Auto Exec Inks U.S. Deal with Italian Design Firm

Hybrid Kinetic (HK) Motors Corp., a Pasadena, Calif., start-up company headed by the former CEO of Brilliance China Automotive, has signed a four-year, $500 million deal with Italy’s Italdesign Giugiaro SpA, which will design and engineer eight vehicles the automaker plans to build in the U.S.

HK announced in September it had selected a site near Bay Minette, which is 40 miles from Mobile, Ala., for the greenfield plant.

The partners say they aim to develop a range of cars, crossovers, SUVs and large trucks with American style, European quality and Japanese prices. A unique hybrid powertrain is planned that teams an electric motor with a combustion engine able to run on either gasoline or compressed natural gas.

At yesterday’s signing ceremony in Bay Minette, HK displayed Giugiaro’s two-year-old Quarante concept vehicle. The unusual vehicle, which the Italian firm developed to celebrate its fourth decade in the car business—quarante means “forty” in Italian—will provide inspiration for the new models. It features three front seats, with the driver in the middle position. The vehicle’s large one-piece front section, which combines the hood, windshield and side windows, tilts forward to allow access in place of traditional doors.

HK hopes to break ground in Alabama by year-end and begin production in early 2013. Local government groups have indicated they will provide financial incentives to HK after the company has raised more than $1.3 billion in funds. The ambitious plan calls for up to 300,000 vehicles to be produced at the new plant. Additional facilities also are being considered elsewhere in North America and China, with a goal of combined output topping 1 million units per year by 2018.

Yeung, formerly known as Yang Rong in China, helped build Brilliance China Automotive and worked on projects with Italdesign. Fearing arrest for alleged “economic crimes,” he left China in 2002 and relocated to California.


NHTSA Evaluates Ford Brake Recall

The effectiveness of a previous Ford Motor Co. recall is being investigated by the U.S. National Highway Traffic Safety Administration, following reports of fires in the vehicles that were to have been serviced.

The original recall called for repairing or replacing components related to the antilock brakes. But NHTSA says new information provided by Ford suggests that some vehicles were not properly inspected and/or repaired. In some cases not enough, if any, electrical grease was applied.

The 2007 campaign covered some 500,000 Ford Escape and Mazda Tribute SUVs that Ford built during the 2001-2004 model years. At the time, there were 50 reports of engine fires caused by corroded brake parts in the vehicles. At least 86 of the 388,500 vehicles serviced so far have subsequently had non-crash fire incidents originating near the ABS module connector, according to NHTSA.


New Mitsubishi Compact Crossover to Get Geneva Reveal

Mitsubishi Motors Corp. will unveil its all-new ASX compact crossover at the Geneva auto

Mitsubishi ASX compact crossover

show in March. The five-seater is the European version of the new RVR that is due to bow in Japan next month, followed by a sequential launch across Europe starting in the spring.

Slotted below the recently redesigned Outlander midsize crossover in Mitsubishi’s lineup, the 169-inch-long ASX will offer a 1.8-liter direct-injection diesel engine jointly developed by MMC and Mitsubishi Heavy Industries Ltd. A six-speed manual transmission is standard. The car also will feature automatic stop-start technology.


Partners Team Up on “Smart” Grid Project

Indianapolis-based Ener1 Inc. and its EnerDel Inc. unit have signed a deal with the real estate arm of Japanese industrial trading giant Itochu Corp. to develop and produce lithium-ion battery systems for a residential energy storage project at an apartment building near Tokyo. The so-called “smart” grid system will serve as a renewable energy link between local utilities and high-speed charging for electric cars.

The residential batteries will come from hybrid/electric cars that have been retired from the vehicle fleet. These types of secondary use applications will help lower the price of electric drivetrains by spreading the cost of a battery over a longer period, Ener1 says.

Itochu Property Development Ltd. plans to use such batteries in 20% of its new apartment buildings in the future. The company previously announced plans to partner with Ener1, Think and Mazda Motor Corp. to convert test vehicles to electric power and recharge them at convenience stores equipped with smart grid systems.

In November, EnerDel was selected to supply the batteries that will power a U.S. Dept. of Energy-funded smart grid storage project for Oregon’s Portland General Electric. The system is designed to help manage peak demand and smooth the variations in power from renewable sources like wind and solar.

A large investor in Ener1 since 2003, Itochu is EnerDel’s sales and marketing partner in Japan. It also claims to be the largest reseller of manufacturing equipment for lithium-ion battery production.


VIEWPOINT: Post-2009 Strategies for the Auto Industry

Jim Plemmons

The North American automobile industry is beginning to emerge from perhaps its biggest crisis ever. But it won’t be a return to business as normal. Profound changes were unleashed in 2009, and they will continue to ripple through the industry for years. To thrive, companies must continue to be proactive. In many cases, the issues facing companies in the industry’s traditional Midwest base are very different than those in the “new auto industry” of the South.

Dickinson Wright PLLC provides broad legal counsel for more than 200 automotive clients in both regions from its offices in Detroit, Bloomfield Hills, Grand Rapids, Lansing and Ann Arbor, Mich., Washington, D.C., Nashville, Phoenix and Toronto. The firm has an exceptional understanding of the regional and regulatory issues impacting the industry. Its automotive practice is led by Jim Plemmons. He and several members of his team describe issues facing carmakers and their suppliers in the new year and beyond.

What is the single most important thing for the industry to know this year?

Nobody should assume the worst is over. We will have as challenging a 2010 as what we saw in 2009. Restructurings of suppliers’ capacity (decreases) and cost effectiveness (increases) remain to be completed this year and next.

Today’s economic conditions continue to push the auto industry to focus on weak processes that have hurt them. Companies are becoming more sophisticated about the legal side of their business, and they want support in many areas beyond consolidation, workouts and liquidation.

Which are the biggest changes to come out of last year’s crisis?

Government involvement is certainly one of them. The massive loans Washington made to the industry resulted in much more government monitoring, and it has raised questions about how the government will influence the industry in the future.

Taxes are another big issue. Clients are searching for tax breaks, not just ways to plan future tax liabilities. Washington, D.C.- and Detroit-based Dickinson Wright tax expert Will Elwood recently won a major decision in this area concerning the use of R&D tax credits on tooling manufactured and sold to an OEM. Many large accounting firms were telling clients not to claim tax credits on these items, but the new ruling means there is an opportunity for suppliers to file a refund claim.

Intellectual property issues, which have been somewhat ignored while companies struggled with larger economic challenges, are back. Dickinson Wright IP expert Rick Jones is seeing a significant increase in due diligence in this area among companies that use mergers and acquisitions to gain technology. There is more “patent mapping”—checking to see which patents are truly owned by a target for acquisition. Dickinson Wright also helps buyers determine if the technology they seek from another company was developed with government funds. If so, the ability of the acquiring company to capitalize on it may be limited.

International trade issues are another growing area, especially for smaller suppliers who are being pushed to go global. Dickinson Wright international automotive trade and customs expert Bruce Thelen gives an example that an assembly made in Mexico could be treated as Chinese if it contains components from China that define the ‘essential character’ of the final product. We help companies make smart sourcing decisions that can help avoid high tariffs and take advantage of NAFTA and other preferential trade arrangements.

What issues are especially big in the South?

The carmakers in the South are relatively recent arrivals, and some of the issues that northern companies have dealt with for years are new to them. Dickinson Wright Nashville-based automotive attorney Kim Stagg notes that OEMs and their suppliers are making new investments in the South. They want to make prudent investments, and they want to make sure they have processes in place now to avoid problems later.

The traditional Big Three carmaker supply base has become expert in dealing with such issues as Chapter 11 and “363” sales, Stagg continues. However, these are newer experiences for many companies and OEMs in the South. Not long ago a carmaker or tier one supplier rarely did much financial due diligence on a supplier that bid on a contract. It has become commonplace in the North and even with certain new domestic OEMs, but many suppliers in the South are just setting up those processes now.

Similarly, Dickinson Wright automotive contract expert Roger Cummings says suppliers are focusing on avoiding gaps between the terms of their purchase contracts with lower-tier suppliers and the terms they have with their own customers. This includes everything from indemnification and IP rights to contract duration and pricing adjustments.

Has M&A activity peaked in the auto industry?

Volume remains high, but it doesn’t get as much publicity. Companies are definitely cherry-picking facilities because there are so many plants and other assets on the market. There is significant shifting of machinery from unstable to stable suppliers, for example, but it’s mostly behind the scene. There has been a major upswing in stronger tier one and tier two suppliers doing this in the past six months.

To learn more about Dickinson Wright’s automotive practice, please contact Jim Plemmons in Detroit at (313) 223-3106 or e-mail jplemmons@dickinsonwright.com.