NEWS BRIEFS FOR THE WEEK OF DEC. 8, 2005

Orion VII Hybrid Bus
(Photo: BAE Systems)

This increases the NYC hybrid fleet to 825 by the middle of 2007. In addition, MTA took an option that could add another 389 units to city service. Further rollouts of the transit buses are occurring in St. Louis, San Francisco and Toronto.

The hybrid diesel-electric buses produced by Orion are assembled in Oriskany, NY. When compared to traditional diesel transit buses operating in New York, DCX says the buses show significant reductions in fuel use, pollution emitted and noise produced. 

"Every Orion hybrid on the streets replacing a diesel bus means a cleaner and quieter environment for all New Yorkers," said Andreas Renschler, head of DaimlerChrysler's Commercial Vehicles Division. "The hybrid system includes a diesel engine with nearly half the size of a standard diesel-bus engine, [as well as] a generator and batteries."

At the heart of the Orion VII hybrid bus is the HybriDrive propulsion system provided by BAE Systems of Johnson City, NY. The system propels the bus with a single electric motor powered by a diesel-driven generator. The diesel engine provides the generating power, which also charges the system's batteries. The batteries are the source of additional electrical power for high demand situations, such as fast starts and hill climbs. The diesel engine is optimized to run at relatively constant speeds or maximum efficiency and clean operation. Acceleration and deceleration are accomplished by varying the speed of the electric motor, not the diesel.

Another feature of the Orion VII hybrid is the regenerative braking system that uses the electric drive motor to slow the bus, effectively turning the motor into a generator to help recharge the batteries. This feature both saves energy and significantly reduces brake wear. The series hybrid design also eliminates the need for a mechanical transmission, which means no transmission overhauls, says DCX.

(Source: DaimlerChrysler, BAE Systems)

Car Battery Maintenance: 
To Water Or Not To Water?

CHICAGO, IL (Nov. 30, 2005) - In millions of vehicles, lead-acid batteries start people on billions of journeys every day. Yet as car engines become more complex and the technology of automotive batteries advances, motorists can become confused about the proper maintenance of the batteries under their hoods. 

The auto battery is made of lead, plastic and electrolyte -- a dilute solution of sulfuric acid and water. It is designed to deliver a short burst of high power to start the vehicle's engine. But what does battery maintenance entail? Should the battery caps be pried off, the electrolyte level checked and water added? And what does the term "maintenance-free" really mean?

Battery Council International (BCI), a not-for-profit trade organization that represents manufacturers and recyclers of lead-acid automotive, commercial, telecommunications and industrial batteries, has provided recommendations for service providers and consumers who may be misinformed about maintaining vehicle lead acid batteries.\

Terminals: Motorists should occasionally check the terminal connections where the battery cables are hooked to the battery to be sure the connections are tight and free of corrosion. If the terminals are corroded, they should be cleaned with a brush (such as a discarded toothbrush) and a light paste of household baking soda and water. Keeping the terminals bright and tight will help ensure that the battery performs through its entire service life.

Maintenance-free batteries: According to BCI, the majority of today's auto batteries are maintenance-free. This means that motorists should not check or top off the electrolyte levels in maintenance-free batteries. "Battery manufacturers provide instructions with their products, and a motorist should read and follow all of instructions that come with the battery," said Randy Hart, president of BCI. In addition, the battery label generally provides guidelines. Many maintenance-free battery labels carry a "do not open" or similar statement. 

Finally, battery caps that appear to be removable may actually be glued or locked in place. "If a battery cap is meant to be opened, it can be opened without much effort. Forcing or prying these caps open may destroy or permanently damage the battery," Hart said.

Maintenance-accessible batteries: A few auto batteries are referred to as "low water loss" or "maintenance accessible" batteries. In certain conditions, such as hot climates or high heat, it may be necessary to add water. Here, too, the battery label will provide a guideline. These products typically do not carry a maintenance-free label or a statement that advises against opening. 

For maintenance-accessible batteries, electrolyte levels can be checked by a few different measures. Some batteries have removable battery caps; others carry a "magic eye," a small, round device that floats to the top of the electrolyte. Still others have a translucent case through which the fluid level can be seen. If the level is low, top off the electrolyte by adding a small amount of distilled - not tap -water. BCI advises against tap water, which can contain chlorine or other chemicals that can change the composition of the electrolyte.

End of the Road: While today's auto batteries can provide motorists with reliable service and long life, nothing lasts forever. All batteries eventually reach the end of their service lives. In addition, a battery can dry out and fail prematurely if the vehicle's electrical system malfunctions or fails. "But in a properly designed, voltage-regulated system, water loss should not cause maintenance-free batteries to fail," said Mr. Hart.

(Source: Battery Council International)

Survey Notes Trends In 
Workplace Benefits

WASHINGTON (Nov. 28, 2005) -After initial skepticism from employers, the concept of Health Savings Accounts (HSAs) coupled with High Deductible Health Plans (HDHPs) is beginning to gain traction in the marketplace, according to the latest Employee Benefits Market Survey released today by the Council of Insurance Agents and Brokers (CIAB).

The CIAB represents domestic and international commercial insurance brokers who annually administer billions of dollars in employee benefits accounts. Compared to spring 2005, the fall 2005 survey of benefit brokers showed a definite increase in the number of business clients who are viewing HDHPs and HSAs as a health benefits option to be offered in the workplace. Last spring, survey respondents said only less than 10 percent of their clients were inquiring about the HDHP/HSA combined approach. This fall, more than half of their customers were interested in HDHPs and HSAs.

According to the survey, about two-thirds of employers who offer an HDHP-HSA plan do so as an option, rather than a replacement for an existing plan. The benefits brokers reported that employers are dealing with the rising price of group medical coverage by increasing deductibles and copays for their employees, increasing the employee share of premium costs, assessing prescription drug copays and instituting up-front hospital and outpatient copays.

The least likely option taken by employers, the survey showed, was discontinuing medical coverage. Ninety-six percent of the respondents said only 1 to 10 percent of their customers picked discontinuing medical coverage as an answer to rising costs.

"Benefit design has not deteriorated even in the face of rate increases because employers are having a very difficult time finding and retaining qualified people," said one benefits broker from the Southeast.

(Source: Council of Insurance Agents & Brokers)

Goodyear: RFID Is The Future

AKRON, OH (Nov. 22, 2005) - Goodyear Tire & Rubber Co., the first to implement Radio Frequency Identification (RFID) technology on a production scale, and says RFID is the future for tire identification in manufacturing, supply chain management and tire/vehicle integration.

Goodyear began exploring RFID technology in 1984 and in 1993 began the first field trial with more than 3,000 tires. "Through this program, we can demonstrate the effectiveness of our technology, while encountering the same issues we would experience with any original equipment or retail customer," said Steve Roth, Goodyear's director of vehicle systems." 

Roth said he expects RFID to have a huge impact on tire production, warehousing, sales and service. RFID tags provide for automated reading by RFID scanning equipment and are capable of carrying large amounts of information. Tire identification is the first piece of data that will be available, but as the technology progresses, specific tire data could also be added that would allow for improved vehicle performance.

Like many automotive innovation, real-life testing is often done on the racetrack. The company's RFID technology passed its first major test when NASCAR used it for the Craftsman Truck Series race at Homestead-Miami Speedway in Florida. "A multitude of passenger tire advances, such as innovative tread designs and new construction techniques, have evolved from our racing roots. Now RFID technology is following that same path," said Roth. 

"The fast-paced, high-pressure racing environment was the perfect real-life test for our patented, embedded RFID tag, which has been in development in our laboratories for several years," he said. Goodyear will start the 2006 racing season with a new tire leasing program for NASCAR's top three series, and RFID technology will assist with the implementation of NASCAR's new controlled testing procedures, developed to level the playing field for all of the teams in the series. The RFID chips store tire identification data to help manage the leased inventory and ensure each team gets its correct tires. 

Within the industry, Goodyear is an advocate for the use of the EPCglobal Unique Identification (UID) format for data contained on the RFID tag. Roth said providing a standard is one of the most important steps in getting new technology adopted, easing implementation for both customers and suppliers.

(Source: Goodyear Tire & Rubber Co.)

GM Outlines Its Turnaround Plan

DETROIT, MI (Nov. 21, 2005) - General Motors Corp., struggling with huge losses, runaway expenses, behind the curve products and a possible anchor in its commitment to Delphi Corp, announced a turnaround plan for its North American operations. GM still ranks as Delphi's largest customer - accounting for over 50 percent of Delphi's $28.6 billion of revenue in last year, and its commitments to Delphi continue to hang in the balance.

Following is a brief update and summary of the other key elements of the beyond structural cost reductions:

* Health-care costs - On Oct. 17, GM announced a far-reaching agreement with the UAW that will introduce a series of changes to the hourly retiree health-care plan. As part of the agreement, pending court approval, active hourly employees will contribute financially to this health-care plan. As a result, GM will continue to provide competitive health-care benefits to its hourly employees and retirees, but at a significantly lower cost. The agreement is projected to reduce GM's retiree health-care liabilities by approximately 25 percent of the hourly liability, or about $15 billion, and cut the company's health-care expense by about $3 billion on an annualized, pre-tax basis. Annualized cash savings will be approximately $1 billion a year.* Product development - GM North America will target key growth segments with the right products, with increased capital expenditures going toward future car and truck programs. This increased investment will allow GM to average 15 all-new entries a year in the North American market for the foreseeable future. Technology that will be supported includes hybrid cars and trucks, displacement on demand and six-speed transmissions, expansion in its offerings of ethanol-capable vehicles, and other future-based projects. GM's strategy also builds on its recent move to create a single, global product development organization, which will permit the company to better leverage its considerable design and engineering resources around the globe. By taking full advantage of its unique global footprint and that of its global partners, GM will more effectively be able to address emerging trends and markets, and take advantage of its creative talent base around the world.* Sales and marketing - GM also laid out a focused strategy designed to improve significantly the company's performance in the retail marketplace. This strategy includes strengthening GM's automotive brands, marketing that emphasizes the inherent value of GM cars and trucks, completing GM's distribution channel strategy, and aggressively targeting markets where GM has underperformed against the competition. As part of the move toward emphasizing the value of GM cars and trucks, the North American operations will continue to adjust suggested retail prices to more closely match actual transaction prices, manage inventories and resale * Reduced production - GM is also reducing capacity utilization, a major component of reducing structural cost. A total of nine assembly, stamping and powertrain facilities and three Service and Parts Operations facilities will cease operations. In addition, 30,000 jobs in North America will be eliminated, 90 percent of them in the United States. Given the demographics of GM's workforce, the company plans to achieve much of the job reduction via attrition and early retirement programs. GM will work with the leadership of its unions, as any early retirement program would need to be mutually agreed upon. GM hopes to reach an agreement on such a plan as soon as possible.

"These are difficult moves that will affect thousands of dedicated GM employees and families, as well as state and local governments," GM Chairman and CEO Rick Wagoner said. "We will work our hardest to mitigate that impact."

(Source: GM)

Delphi To Restructure 
Creditor Payments

NEW YORK, NY (Nov. 29, 2005) According to a Reuters report, auto parts maker Delphi Corp. won bankruptcy court approval to pursue a plan to pay some prebankruptcy bills owed to key suppliers in exchange for extending contracts set to expire at the end of the year. The approval followed an agreement between lawyers for Delphi, its unsecured creditors and a trustee representing the interest of bondholders. Several suppliers voiced objections to the plan during a hearing in New York. 

Delphi wants to extend roughly 8,000 sole-source contracts to avoid disruptions in production that might occur if they expired and plans to offer to pay those suppliers up to 75 percent of the prebankruptcy claims they have against Delphi. In return, suppliers must agree to extend contracts by two years, give up price increases and keep regular payment terms. As part of a settlement, creditors and Delphi agreed to share information on contracts with a value above $1 million.

Delphi estimated that about $587 million of roughly $1 billion in prepetition claims would be covered by contracts that it wants to extend under the plan. It plans to pay participating suppliers in installments and expects an average quarterly payment in 2006 of about $50 million. Judge Robert Drain said he viewed Delphi's plan as giving it flexibility to negotiate new contracts and that he had to assume suppliers know what they are doing when they agree to contract extensions.

(Source: Reuters)

Trading to Help Drive Down 
CO2 Emissions

PARIS, FRANCE (Nov. 24, 2004) - The International Energy Agency (IEA) released a new report titled "Act Locally, Trade Globally," which focuses attention on the continuing need to reduce carbon dioxide (CO2) emissions. The report was issued just a few days the United Nations climate change conference in Montreal, Canada, the first such meeting of countries who recently ratified the Kyoto Protocol.

Among the original proposals examined in this study are the allocations of liability for emissions to fossil fuels importers and producers, the aviation sector and carmakers. Emissions trading could also be broadened to include the rapidly growing emissions of international aviation. The IEA states that rising CO2 emissions are driving the need to act. Without changes being made, current multinational energy policies will result in worldwide CO2 emissions increasing by 50 percent by 2030.

"It's our role to deliver analyses and suggestions to the climate negotiators when they start considering the future beyond Kyoto." said Claude Mandil, executive director of the IEA. "We believe that emissions trading will remain at the core of any future international agreement to combat climate change. Emissions trading allows reducing emissions at the least-cost, and helps governments to achieve acceptability through allocation processes, domestically and internationally."

Plans include the use of emissions trading in pollution markets through which organizations that pollute less than the assigned targets may sell so-called "rights to pollute" to organizations which exceed their targets. Under this market-driven incentive system, organizations that are cleaner than a given standard gain a competitive advantage and excessive polluters bear a cost burden.

For road transport, the report outlines a range of policy options including a market among car manufacturers making them "responsible for the CO2 emissions of their products" by implementing a "cap and trade" system. Under this scheme, an overall limit on emissions in the sector is set by a nation's government, and then allowances that can be traded are granted to producers according to the emissions of their fleet. 

One example of such a market is the current European Union Emissions Trading System (ETS), which allows participating governments and companies to acquire "credits" of CO2 if a development or energy project in a poor country helps to reduce carbon pollution. For example, emissions of carbon dioxide (CO2) from the aviation sector rose by 60.0 percent between 1990 and 2002 within the European Union, while total emissions fell by 3.0 percent. Proponents hope to include the aviation and automobile industries shortly.

Climate policy raises a number of challenges for the energy sector, the most significant being the transition from a high to a low-CO2 energy path in just a few decades. Emissions trading has become the instrument of choice to help manage the cost of this transition, whether used at international or at domestic level. 

While acknowledging the need for complementary policies in areas such as urban planning and public transport to reduce transport emissions, the report says that such a market system would foster quicker technical improvements and benefit consumers by providing, citing as a example, more fuel-efficient or zero-emission vehicles and planes.

(Source: IEA)

Oil Company Settles 
Price-Gouging Suit With NJ

NEW YORK, NY (Nov. 22, 2005) - Amerada Hess Corp. announced today that it reached an agreement with New Jersey's Attorney General to resolve alleged violations of a 1938 provision of the Motor Fuels Act which prohibits motor fuel retailers from changing prices more than once during a 24-hour period.

In the turmoil following Hurricane Katrina, the market experienced an unprecedented four-day surge in the wholesale cost of gasoline. During this period, Hess made measured price increases, as opposed to a single, large price change each day. Although Hess firmly believes that these pricing practices resulted in lower gasoline prices for customers, the company agreed to a settlement of $372,391.

A portion of the settlement payment will be used to address the home heating needs of seniors and low-income families in New Jersey.

(Source: Amerada Hess Corp.)J.D. Power Releases 
2005 Audio Quality Report

WESTLAKE VILLAGE, CA (Nov. 3, 2005) - J.D. Power and Associates released its 2005 Audio Quality Report, which ranked Visteon Corp. and Panasonic Automotive Systems Company of America/SANYO Automotive USA Inc. highest in quality among factory-installed automotive audio systems.

The 2005 Audio Quality Report is based on responses from 115,026 owners of new 2005-2006 model-year cars and light-duty trucks. The report measures consumer experiences with the quality, design, and features of automotive audio systems supplied in new vehicles. Audio system manufacturers rankings are based on a "problems per 100 vehicles" (PP100) score in two segments: AM/FM/single CD players and AM/FM/multi-CD changers. A lower PP100 score indicates higher quality.

Visteon ranks highest in quality in the AM/FM/single CD player segment, with a score of 3.3 PP100. SANYO and Siemens VDO Automotive follow Visteon in the rankings with 4.5 PP100, and 5.3 PP100, respectively. The segment average is 6.1 PP100. 

"In general, a large and diverse portfolio of products can make the process of ensuring consistent audio quality more difficult," said Allison LaDuc, manager of research projects at J.D. Power and Associates. "Visteon has consistently been a top performer in audio system quality, despite the breadth of their products and services."

Under a non-competitive, split-sourcing arrangement, Panasonic and SANYO rank highest in the AM/FM/multi -CD changer segment, recording 3.1 PP100. The two suppliers combine efforts on several Mazda models, with Panasonic supplying the CD-changer component and SANYO supplying the AM/FM tuner. Systems produced by Panasonic/SANYO experience relatively few problems in the areas of "CD player jumps/skips," "CD player won't eject" and "sound system controls." Following Panasonic/SANYO in the segment are Visteon and Panasonic, recording 4.3 PP100 and 4.6 PP100, respectively. The segment average is 6.7 PP100.

LaDuc noted that satellite radios and single- and multi-CD systems are increasingly being equipped in new vehicles. Satellite radio penetration has increased 6 percent from 2004, and now represents 17 percent of the market. Additionally, multi-CD-changer systems currently represent 45 percent of the market - up from 39 percent from 2004. 

(Source: J.D. Power and Associates) 

EPA To Revise Fuel Economy Ratings

WASHINGTON (Nov. 18, 2005) - The U.S. Environmental Protection Administration (EPA) will propose new regulations for testing vehicle fuel economy by the end of the year. The Agency says it plans to implement the new tests by the 2008 model year. The changes will mark the first major update in the rules used to gauge fuel economy for consumers since 1985.

EPA administrator Steve Johnson indicated that the new rules would include different factors than the current tests. "Everyone agrees that the test procedures and our calculations are outdated. We've got 20 years of new technology, 20 years of experience, 20 years of new driving conditions," he said.

(Source: EPA)

Vehicle Safety System 
Interacts With Driver

G