Firm fined £45,000 after heavy slab fell four floors

May 28th, 2007

A CONSTRUCTION firm has been fined 45,000 after a concrete slab weighing several tonnes plunged four floors during building work.

Barr Ltd was in charge of work at a multi-level car park near Glasgow’s St Enoch Centre in 2004 when advised that a part of the structure needed reinforcing. But the required action was not carried out and a large slab eventually gave way.

Glasgow Sheriff Court yesterday heard that it was “very fortunate” no-one was killed or injured as a result. Barr Ltd admitted a charge of failing to provide and maintain a system of work under the Health and Safety Act. It was the Ayrshire firm’s fifth criminal conviction in nine years.

Fining it, Sheriff Alistair Noble said the incident arose from “quite an extensive failure to act appropriately”.

The court heard the firm ran the construction of the Q car park in Howard Street when concerns were raised by the slab manufacturers about the building work.

One of the men Barr had in charge on site was the project manager, who was a joiner to trade and had little experience of slab work. He was told that metal cleets would have to be welded on to strengthen the structure.

But at about 6pm on 7 October, 2004, a slab gave way and dropped from the seventh floor to the third.

Stephen Woolman, QC, defending, said Barr accepted responsibility for “a most unfortunate incident” and had since increased its health and safety team.

Volkswagen prepares reorganization to centralize management

May 28th, 2007

FRANKFURT: Volkswagen was expected to approve on Thursday a broad reorganization that would centralize control over its myriad brands and cement the power of its new chief executive, Martin Winterkorn, only a month after he took the helm at the largest European automaker.

Under the plan, Volkswagen is looking at assigning management board members responsibilities across the entire company range of VW, Audi, Skoda and other brands for basic tasks like production, sales and marketing, and research and development a step that analysts said appeared to be aimed at avoiding management fiefdoms in a sprawling corporate structure.

The new arrangement also appears to confirm the strong role that Porsche, which now holds slightly over a quarter of VW’s shares, is playing at the company. Porsche strongly backed Winterkorn’s installation as chief executive, and is now helping him to consolidate his position.

“Porsche has effectively installed friendly management,” said Arndt Ellinghorst, an automotive analyst with Dresdner Kleinwort. “And now the board is going to create a more centralized management structure.”

The Volkswagen presidium, a six- member subset of Volkswagen’s supervisory board, met to discuss the plan on Wednesday, and the full board was planning to approve it on Thursday, according to several people briefed on the matter.

The revamping, which has been in the works since Volkswagen announced Winterkorn would replace Bernd Pischetsrieder as chief executive in November, may yet claim the job of Wolfgang Bernhard, a Pischetsrieder protйgй who was in charge of the Volkswagen brand.

Bernhard was offered the job of overseeing production, but instead pressed an apparently unsuccessful case that Volkswagen should stand by its current organizational chart.

“I would be shocked if Bernhard were not gone by the end of the week,” said a Volkswagen adviser, who requested anonymity because the reorganization is not yet approved.

The new plan would also abandon Volkswagen’s current organization, in which Volkswagen and Audi both head up “brand groups” that include both luxury and mass-market vehicles.

In its place would come a clear division between premium and mass-market brands, but with more informal groupings within the two areas than was the case under Bernhard, according to the people briefed on the deliberations. The company’s luxury brands Lamborghini, Bentley and Bugatti would be grouped with Audi, while the Volkswagen group would include Seat and Skoda.

With the reorganization, Winterkorn, a former head of Audi, is seeking to rid Volkswagen of its image as a lumbering giant and deliver on expectations that the company can become, in the words of one board member, a challenger to Toyota, the industry leader in lean, profitable production.

Though they raised the ire of the company’s powerful unions, Pischetsrieder and Bernhard forced through some tough steps like a plan to shed 20,000 jobs and another to lengthen Volkswagen’s famously short work week to about 33 hours from 28.8 hours.

“It’s probably safe to say that what gets done by 2008 was the job of Pischetsrieder and Bernhard,” said Horst Schneider, an automotive analyst with WestLB in Dьsseldorf. “What comes after that is Winterkorn.”

For now, most analysts said the company was well-placed to meet its target of a \5.1 billion, or $6.5 billion, in operating profit this year.

At the same time, Ferdinand Piлch, the VW chairman who is also a board member at Porsche, looks likely to get another term when his contract expires in April.

This week at the North American International Auto Show in Detroit, Piлch indicated that he was interested in keeping the job. With Porsche on his side, he has won half the battle, analysts said. Volkswagen’s employees, who hold half of the supervisory board’s 20 seats, in turn said they would support Piлch, effectively guaranteeing his future there.

[”If the owner representatives on the board proposed having him remain as supervisory board chairman, he would certainly get 10 votes from the employee side of the board,” Bernd Osterloh, head of the VW works council, said in Detroit, Bloomberg News reported. “I would welcome it if Mr. Piлch remained.”]

At the same time, Porsche appeared this week to back away from suggestions that it might take over Volkswagen.

Though Porsche has already asked its shareholders to approve a capital increase that could be used to finance an acquisition, its chief executive said in Detroit that a takeover would not make sense, given Porsche’s position as a luxury sports car brand.

But his statements fell on incredulous ears among analysts, who are betting he is simply biding his time until the acquisition. “If the law goes, they will find a reason to revisit their views,” said Ferdinand Dudenhцffer, director of the Center for Automotive Studies in Gelsenkirchen, Germany.

Ford’s Edge blunts sales decline

May 28th, 2007

DETROIT: Is the Edge giving Ford the edge it was hoping for?

At the very least, the new crossover vehicle, or small sports utility vehicle, is keeping sales at Ford Motor from dropping even more than they already are this year, at a time when the company is pulling back on unprofitable sales to rental-car companies.

Ford is meeting the expectations it set for the Edge when the vehicle went on sale in December. But the Edge is not generating the revenue of the big sport utility vehicles that once fueled Ford profits, and it is not drawing the new customers that the company will need to bounce back from its worst loss in history - $12.7 billion last year.

Ford has pulled out all the stops to promote the Edge, with television ads directed by the playwright David Mamet in its latest attempt to get attention for the vehicle.

Yet there are already lease deals available for the Edge, and some Ford insiders are concerned that its U.S. price, which starts at $25,995, is too high to sustain current sales levels once the vehicles novelty wears off - further proof that in the ultracompetitive car market, automakers have only a brief window to make a splash.

Since arriving at U.S. dealerships in December, the Edge has been one of the few bright spots for Ford. On Tuesday, when automakers reported sales for April, Ford said its overall sales in April fell 7 percent on a selling-day adjusted basis, a distinction made because a year ago, there were two more selling days in April. Without the Edge and two other new crossovers in its lineup, Fords decline last month would have been 12 percent, the worst among major automakers.

Ford has sold 33,600 Edges so far this year, on pace for its goal of selling 100,000 Edges in all of 2007. But the companys chief sales analyst, George Pipas, said many of those had been bought by people who already owned Fords.

“The products that are most traded in are other Ford products,” Pipas said. “Its retaining Ford buyers” who owned big sports utility vehicles who “are moving into another category.”

Ford needs vehicles that can keep its customers from defecting to other brands, particularly as high gasoline prices lead consumers to seek more fuel-efficient vehicles. But the Edge alone can do little to help Ford reach its goal of earning a profit in North America by 2009.

“Crossovers are not the cash cows that the Ford Explorers and Expeditions were,” said Ron Pinelli, president of the Autodata, an auto industry research company in New Jersey.

“Theres just not enough volume there for Ford to make up for what theyve lost,” Pinelli said. “Even if the Edge is doing incredibly well, the profit contribution isnt going to be terrific, and there arent going to be enough of them to move the scale from the loss side to the profit side.”

The Edge was not enough to stop Fords market share from falling to 17 percent from 18 percent a year ago, according to Autodata. The decline was the largest among all major automakers. GMs market share slipped to 23 percent from 23.5 percent, while the Chrysler Group had a rare increase, to 14.4 percent from 13.1 percent. Toyota leads all automakers in worldwide sales.

Meanwhile, Japanese automakers had an uncharacteristically weak month, with Honda sales down 1.6 percent and Nissans down 11.2 percent. Toyota posted a 3.7 percent sales increase, its lowest year-over-year gain since August 2004. Although Ford came in slightly ahead of it for the month, Toyota has sold nearly 5,000 more vehicles than Ford so far this year.

Yet there are signs of some bumps in the road for Toyota, like an inventory that has grown 30 percent in the last year. Many of those unsold vehicles may be the new Tundra pickups. Toyota has sold about 43,000 Tundras since the truck went on sale in February, well below the pace needed to reach its goal of selling 200,000 this year.

But because the Tundra makes more money for Toyota than the Edge does for Ford, the Edge cannot necessarily be called the more successful of the two.

Still, Ford and its dealers say they are thrilled with the Edge.

Pipas said it was competing well against crossover models from Toyota, Honda and Nissan. “The sales levels, really coming from having no brand recognition, are kind of in the same sandbox as three really great products that have established themselves over the course of several years,” Pipas said. “I dont know if I thought we could get there that soon.”