This time, Ford crashes on purpose

March 18th, 2008

DETROIT: Even car novices should have no trouble identifying the Ford Taurus at the New York International Auto Show this week. It is the one with a crumpled hood and half of the front bumper missing.

But this vehicle did not have an expensive mishap on its way to New York from a warehouse in Michigan. Ford intentionally crashed the sedan at a test center to show consumers how well the 2008 Taurus - and by extension, the rest of its vehicles - can withstand a crash.

Ford, which is desperate to re-establish itself with consumers who have switched to Asian and European nameplates, hopes the same urge that makes commuters gawk at freeway smash-ups will kick in among those visiting the show that opens Friday.

“One of the problems that almost all of the Detroit automakers have is breaking through the resistance that people have to even looking at the cars,” said Art Spinella, of the automotive consulting firm CNW Marketing Research in Oregon. “You have to break through the clutter and you have to get people to somehow come and look at what youre offering.”

Spinella said he did not recall ever seeing a car that had been in a crash at an auto show and called the Taurus display “brilliant.”

Automakers have long shied away from showing consumers graphic images of what happens to their products in crashes, but Ford is not the first to venture into this territory recently.

Volkswagen ran a memorable award-winning ad campaign called “Safe Happens” for two 2007 cars, the Jetta and Passat. Commercials showed people nonchalantly riding in one of the cars before suddenly being involved in a violent crash. But the occupants were not injured, and the car was shown to be mostly intact afterward.

The ads were controversial because some viewers found them too jarring, but they increased consumer interest in Volkswagen cars.

When Ford re-introduced the Taurus last year, bringing back what had been a venerable model name and using it on a sedan that had been called the Five Hundred, the company ran a marketing campaign calling the Taurus the “safest full-size car in America.” The Taurus earned five-star ratings in frontal and side crash tests by the National Highway Traffic Safety Administration and was named a “top safety pick” by the Insurance Institute for Highway Safety.

But the ads about the ratings were widely criticized as bland and ineffective by dealers and industry experts, and sales of the Taurus have fallen short of expectations. So far this year, Taurus sales are down 13 percent.

Robert Parker, Fords car group marketing manager, said most car shoppers identified safety as a high priority, but it was difficult to communicate safety features in a compelling way.

“Safety is highly important to large car buyers,” Parker said. “The challenge for us is when do you go up and shout about it from the mountaintops. I think weve been a little bit conservative at times in terms of communicating how good we are in this category.”

Parker said the Taurus display in New York also signaled a more hands-on approach that Ford planned to use at auto shows. He said Ford was trying to demonstrate scientifically how Fords safety features worked and to show “whats under the skin” of a car as its electronics work to protect occupants in a crash. In contrast, Parker compared the Volkswagen ads to movies from drivers education classes, “where they try to scare the daylights out of you.”

Many of Fords newer vehicles have earned high marks for safety, but the automaker also has been dogged by past problems, including huge recalls of sport utility vehicles with defective Firestone tires and of trucks with cruise-control switches that could overheat and catch fire.

Ford says it took a 2008 Taurus SEL - equipped with chrome wheels and an optional navigation system but no different from the car any consumer could buy - and crashed it into a barrier at 35 miles, or 55 kilometers, an hour in a manner that occurs in many accidents.

A video of the crash, recorded by 12 cameras and 8 microphones, shows the car slamming into the barrier, sending debris flying and a dummys head into the air bag, and rising off the ground before landing at about a 45-degree angle from its direction of travel.

No repairs were done before taking the car to New York, but the floor and passenger-side doors of the Taurus were cut away, and the car will be elevated so that people can stand inside to watch how the crash happened on a large monitor suspended outside the still-intact windshield.

Ford crashes a car to lure buyers

March 18th, 2008

DETROIT: Even car novices should have no trouble identifying the Ford Taurus at this weeks New York International Auto Show. Its the one with a crumpled hood and half of the front bumper missing.

But this vehicle did not have an expensive mishap on its way to Manhattan from a warehouse in Michigan. Ford intentionally crashed the sedan in a test center to show consumers how well the 2008 Taurus - and by extension, the rest of its vehicles - can withstand a crash.

Ford, which is desperate to re-establish itself with consumers who defected to Asian and European nameplates, hopes the same urge that makes commuters gawk at freeway smash-ups will kick in among those wandering the floor of the Jacob K. Javits Convention Center, where the show opens Friday.

“One of the problems that almost all of the Detroit automakers have is breaking through the resistance that people have to even looking at the cars,” said Art Spinella, of the automotive consulting firm CNW Marketing Research in Bandon, Oregon. “You have to break through the clutter and you have to get people to somehow come and look at what youre offering.”

Spinella said he did not recall ever seeing a car that had been in a crash at an auto show and called the Taurus display “brilliant.”

Automakers have long shied away from showing consumers graphic images of what happens to their products in crashes, but Ford is not the first to venture into this territory recently.

Volkswagen ran a memorable award-winning ad campaign called “Safe Happens” for two 2007 cars, the Jetta and Passat. Commercials showed people nonchalantly riding in one of the cars before suddenly being involved in a violent crash. But the occupants were not injured, and the car was shown to be mostly intact afterward.

The ads were controversial because some viewers found them too jarring, but they increased consumer interest in Volkswagen cars.

When Ford introduced the Taurus last year, bringing back what had been a venerable model name and using it on a sedan that had been called the Five Hundred, the company ran a marketing campaign calling the Taurus the “safest full-size car in America.” The Taurus earned five-star ratings in frontal and side crash tests by the National Highway Traffic Safety Administration and was named a “top safety pick” by the Insurance Institute for Highway Safety.

But the ads about the ratings were widely criticized as bland and ineffective by dealers and industry experts, and sales of the new Taurus have fallen short of expectations. So far this year, Taurus sales are down 13 percent.

Robert Parker, Fords car group marketing manager, said most car shoppers identified safety as a high priority, but it was difficult to communicate safety features in a compelling way.

“Safety is highly important to large car buyers,” Parker said.

“The challenge for us is when do you go up and shout about it from the mountaintops. I think weve been a little bit conservative at times in terms of communicating how good we are in this category.”

Parker said the Taurus display in New York also signaled a more hands-on approach that Ford planned to use at auto shows. He said Ford was trying to demonstrate scientifically how Fords safety features worked and to show “whats under the skin” of a car as its electronics work to protect occupants in a crash. In contrast, Parker compared the Volkswagen ads to movies from drivers education classes, “where they try to scare the daylights out of you.”

Many of Fords newer vehicles have earned high marks for safety, but the carmaker also has been dogged by past problems, including huge recalls of sport utility vehicles with defective Firestone tires and of trucks with cruise-control switches that could overheat and catch fire.

Ford says it took a 2008 Taurus SEL - equipped with chrome wheels and an optional navigation system but no different from the car any consumer could buy - and crashed it into a barrier at 35 miles, or 60 kilometers, an hour in a manner that occurs in many accidents.

A video of the crash, recorded by 12 cameras and 8 microphones, shows the car slamming into the barrier, sending debris flying and a dummys head into the air bag, and rising off the ground before landing at about a 45-degree angle from its direction of travel.

No repairs were done before taking the car to New York, but the floor and passenger-side doors of the Taurus were cut away, and the car will be elevated so that people can stand inside to watch how the crash happened on a large monitor suspended outside the still-intact windshield.

U.S. Supreme Court limits shareholder lawsuits

March 18th, 2008

WASHINGTON: The U.S. Supreme Court upheld Tuesday protections for secondary players in securities frauds, as opposed to the primary engineers of those plots.

The court, in one of the most closely watched business cases in years, ruled 5 to 3 against plaintiffs who had sued two cable television equipment suppliers whose dealings with a cable television company, Charter Communications, had allowed the cable outfit to inflate its earnings and hide its failure to achieve financial goals.

Although the outcome of the case, Stoneridge Investment Partners v. Scientific-Atlanta, hinged on terminology that might seem technical and arcane to a layman, the case is likely to be felt far beyond Wall Street, as lawyers for investors and businesses fight over who can be sued and who cannot.

The majority noted that, whatever deception had been committed by the defendants, “their deceptive acts were not communicated to the investing public during the relevant times,” and that it was Charter that had misled auditors and filed fraudulent statements.

The plaintiffs were unable to show any public reliance on the defendants actions “except in an indirect chain that we find too remote for liability,” Justice Anthony Kennedy wrote for the majority.

The Stoneridge ruling appears to offer protection for accountants, lawyers and others who may know about corporate shenanigans but can establish that they are not directly involved in them. Defense lawyers in shareholders suits often complain that defendants can be forced to settle claims with little merit rather than risk prolonged and costly litigation.

“The court held that you are not your brothers bookkeeper,” said Jerrold Ganzfried, a former assistant to the U.S. solicitor general and now head of the Howrey law firms Supreme Court and appellate litigation group.

A crucial question in the case decided on Tuesday was whether Scientific-Atlanta and the other defendant, Motorola, had been “primary violators” in a sham bookkeeping transaction with Charter, or if they were guilty only of “aiding and abetting” a fraud engineered by Charter.

At the request of Charter, which in mid-2000 was falling short of its cash-flow target, Scientific-Atlanta and Motorola agreed to increase their prices for the cable boxes they sold to Charter and to use the extra money to buy advertising on Charters cable stations. The arrangement allowed Charter to treat the advertising purchases as current revenue while listing the money spent on cable boxes as a capital expense.

In fact, four Charter executives eventually pleaded guilty to criminal charges, and Charter paid $144 million to settle a suit brought on behalf of shareholders. When the case was argued before the justices Oct. 9, the lawyer for Scientific-Atlanta and Motorola asserted that, at worst, his clients had aided and abetted Charters fraud, and thus should not be liable.