The first of hundreds of similar suits, the jury in Johnny Ray vs. Yamaha Motor Co. just found in favor of Yamaha, decided that it wasn't negligent in the death of 13-year old Forest Ray. Ray was killed over two years ago when his Yamaha Rhino rolled while driving off grass and onto pavement. Yamaha places prominent warnings on all its ATVS that they shouldn't be used on-road and Ray wasn't wearing his seatbelt or helmet at the time of the accident.

Ray's family argued the lack of rear differential gears on the Rhino would have prevented the rollover, but Yamaha countered by saying that the Rhino is only designed for off-road travel, where a rear differential is more of a safety "demerit." The Rhino is fitted with both seatbelts and a strong roll cage.

It's expected that this ruling in Texas will influence the outcome of similar litigation across the country. [via Southeast Texas Record]

If Rolls-Royce does sue it'll be purely on principle. Intellectual property lawsuits over clones are rarely, if ever, successful in Chinese courts. This may explain why Chinese automakers released these copycat cars at the Shanghai show this week:

JAC A0 = Toyota Yaris
Lifan Motors 320 = Mini Cooper Clubman
Geely ET925 = Honda Ridgeline
BYD B8 = Mercedes SL/CLK

[UK Telegraph]

Not only is Vik Keuylian looking at a 30 year jail sentence, but a $1 million fine for all the conniving that he's done. This is all pending a judge's approval on Monday at the U.S. District Court in Santa Ana.


For those not in the know, Vik Keuylian cheated the system by offering a Lamborghini fire sale at two of his California-based dealerships, netting him $8.1 million which he has yet to repay to VW Credit Inc., who originally financed the cars at a cost of $12 million.

We originally asked how someone could sell 54 Lamborghinis (or 8% or Lamborghini's 2008 total U.S. sales) in eight days and it seems as if that question has been answered. He sold many to wealthy Hollywood elite like, Sharon Stone, Kobe Bryant, but also sold a package of 23 to Newport Beach entrepreneur, Levon Gugasian, owner of Newport Collectibles exotic auto dealership. Included in the plea agreement is one instance where Gugasian paid Keuylian, in cash, $60,430 for a single 2009 Lamborghini LP640. Silly thing is, VW Credit Inc. had originally financed it for $387,720.

Keuylian; Looks like you're up shit's creek without a paddle. We'll bring you more after the hearing on Monday.

You can read his plea agreement HERE.

U.S. Attorney's Press Release:

ORANGE COUNTY LUXURY CAR DEALER AGREES TO PLEAD GUILTY TO FEDERAL FRAUD CHARGES FOR BILKING COMPANY THAT LOANED HIM MONEY TO PURCHASE LAMBORGHINIS

SANTA ANA, Calif. – An Orange County man who owned two Lamborghini
dealerships that sold up to 5 percent of all Lamborghinis sold in the world has
agreed to plead guilty in a scheme to bilk the financing company that gave him
millions of dollars to purchase the luxury sports cars and put them on his lot.
Viken Keuylian, 45, of Laguna Hills, was charged with wire fraud in a
criminal information filed this morning in United States District Court. In a plea
agreement also filed this morning, Keuylian agreed to plead guilty to the charge,
which carries a statutory maximum penalty of 30 years in federal prison.
Keuylian was the owner of two recently closed automobile dealerships:
Platinum Motors, LLC (d.b.a. Lamborghini of Orange County) and Calabasas
EuroAutoGroup, LLC (d.b.a Lamborghini of Calabasas). Most of the Lamborghinis
at Keuylian's dealerships were purchased using money borrowed from
Volkswagen Credit Inc. (VCI). Under the loan agreement with VCI, Keuylian's
dealerships borrowed money from VCI to purchase cars, and, as each car was
sold, Keuylian was obligated to pay back the money loaned to purchase that
specific vehicle. While the cars were at the dealerships, VCI maintained a security
interest in the unsold cars.
As part of the scheme, Keuylian and others deceived VCI into believing that
certain cars remained on his lots, when in fact the vehicles had been sold and the
proceeds had been misappropriated to pay Keuylian's other business debts,
including debts associated with his vineyard, a commercial building on Pacific
Coast Highway in Newport Beach, and his Lotus dealership in Beverly Hills.
In October 2008, Keuylian sold at least 54 vehicles – mostly Lamborghinis,
but also several Bentleys and other high-end cars – for less than he owed VCI for
each car. Keuylian used the proceeds from these sales to make some payments to
VCI to pay back money he had already misappropriated. In relation to the 54 cars
that Keuylian sold in October 2008, VCI had loaned him $12,560,314 to purchase
the vehicles, but Keuylian received only $8,163,275 from the sales of these cars.
None of the funds paid for the 54 cars were used to pay back VCI for the money it
had loaned to purchase those cars.
In connection with this investigation, the FBI has taken into custody 13
Lamborghinis and an Audi that Keuylian had sold to end-users in relation to the
scheme.
Keuylian is expected to make his initial court appearance in federal court in
Santa Ana on Monday.
The case against Keuylian is a product of an investigation by the Federal
Bureau of Investigation.
CONTACT: Assistant United States Attorney Andrew Stolper

[via OCbiz]

The lawsuit against Factory Five, FFCobra.com and LK Motorsports alleges the websites of all three entities, which it claims are agents of each other, all make unauthorized use of the “Cobra,” “Shelby,” and “Daytona Coupe” trademarks and several other less common ones like “427.”

There’s three interesting things here. First, Factory Five, among many other similar companies, is a long-standing manufacturer of Shelby Cobra look-a-like kits. So why Carroll Shelby has waited until now to sue is puzzling, especially since he’s encountered the replicas at many public events. Second, with the exception of the physical resemblance of the replica’s to vehicles produced by Shelby, the alleged trademark violations all seem fairly minor to us, existing in minor pieces of text and, as cited many times, in the Metatags of the defendants’ websites. The lawsuit cites that usage as, “a design to conceal their use…a knowing disregard for the Plaintiff’s rights, and also demonstrates…malice, willfulness, and fraud.” Third, we're not entirely certain FFCobra.com is an agent of Factory Five. In fact, it seems pretty clear they're advertisers and not owners of the site. If that were the case, then blueovalforums.com would be owned by Ford.

While we don’t argue that Factory Five’s vehicles are intentionally intended to look exactly like the famous vehicles of Caroll Shelby, we’re extremely puzzled as to why he’s decided to sue the company, its owner forum and California based builder now. Factory Five has been in the business of building Cobra replicas since 1995 and is only one of many companies doing so. Does Shelby plan to sue every replica maker and garage builder in the country? Or, more unbelievably, every website devoted to discussing his legendary automobiles or their replicas? It’s the selectiveness of this lawsuit that puzzles us in addition to the inclusion of the owner fan forum. Actions like this can only serve to alienate his fans and customers.
[via FFCobra]

VW has filed suit against Lamborghini Orange County and it's sister-dealership, Lamborghini Calabasas, in Orange County Superior Court claiming that owner Vik Keuylian and his sisters Asdghig, Nora and Sossi Keuylian sold 54 cars in 8 days without repaying VW Credit - the true owner of the cars.

Lamborghini O.C. was the largest Lamborghini dealership in the world before it unexpectedly closed without explanation in November of 2008. Court documents are slowly starting to tell the story of why they closed up shop so quickly and silently. In the lawsuit filed by VW it says that VW Credit financed the cost of Lamborghini O.C.'s inventory in advance of sale, but they're not sure where the proceeds ended up because they certainly didn't receive the money.

The Keuylian's attorney, Jeffrey Gubernick, declined to comment on VW's allegations because the case is still under litigation and has yet to respond to the allegations of the suit, but a hearing is scheduled for January 22nd.

While this is certainly a big blow for the Keuylians, it's not the only lawsuit they are facing. A separate suit was filed in Orange County Superior Court by East-West Bank. They claim that the Lamborghini O.C. defaulted on a $3 million loan by failing to make payments in November and December of 2008. Another lawsuit was filed in Las Vegas is seeking $340,000 for failing to pay for a 2008 Lamborghini Murcielago, formerly owned by the owner of Diamond Resorts, Stephen Cloobeck.

We'll be watching out for updates on this sensational story as they become available, but we have one major question about this suit; How in the hell do you sell 54 Lamborghinis in 8 days? That's 8% of Lamborghini's total U.S. sales for 2008. All we have to say is watch yourself Keuylians and don't trip and fall into any tree shredders.

[via OC Register]

"Even one day's disruption in supply of certain component parts could cause a shutdown of GM assembly operations, disrupting not only GM's business, but the operations of countless suppliers, dealers, customers and other stakeholders," states GM’s lawsuit.

The automaker is suing Cadence for immediate access to parts it needs to produce the new Camaro. GM argues that a delay in delivery could could hamper the launch of the vehicle by causing a ripple-effect of delays, ultimately setting the vehicle’s production schedule back significantly.

GM’s lawsuit claims Cadence is “holding hostage” parts and equipment it for Camaro production.

The automaker is already stretched to the limit, kept alive only by its share of the $17.4 billion auto industry bailout. The Camaro is its headline new product for 2009 and any delay would cost GM millions and cause it publicly to lose face during a critical period.

Cadence, which manufactures airbags, consoles and other parts, was named GM’s supplier of the year in 2006. It filed for Chapter 11 two years later, proving the Carpocalypse is hard on everyone and GM really knows how to pick a winner.

GM hopes to have a new supplier manufacturing the parts it needs by January 12. [via WSJ]

Back in the development days of the Tesla, Henrik Fisker was hired to do the body design on a four-seater code-named the White Star. Tesla forked over $875,000 for Fisker's work. The lawsuit continues to divulge that Fisker had no experience with hybrids prior to working for Tesla and essentially sabotaged the project, took his earnings and developed the Fisker Karma, a similar sporty hybrid.

The story gets a little peculiar on Tesla's end after Fisker left the company to make his own hybrid. Tesla said that they didn't want to use Fisker's design because he was going to make his own car and become the competition. This set the company back three to six months in production. If Tesla had a head start on the design-work why didn't they just progress with Fisker's current design and beat him to the show floor? Tesla continues to say that Fisker's work was substandard, so it's understandable, but they didn't have to scrap the design completely, right? Also, why would Tesla shell out nearly a million on a substandard designer with no hybrid experience?

This is the point where we would initially speculate on how the lawsuit will affect production of the Tesla Whitestar and the Fisker Karma, but who are we kidding. These two are perpetually in that yes, but no, but maybe someday phase of production development. [NY Times]

Gov. Schwarzenegger Announces Lawsuit against U.S. EPA for Failing to Act on California's Tailpipe Emissions Request

Governor Schwarzenegger today announced that California has filed a lawsuit against the U.S. Environmental Protection Agency (EPA) for failing to act on California's tailpipe emissions waiver request. The Governor put the federal government on notice six months ago saying such a lawsuit would be filed if the U.S. EPA continued to delay action on California's request for authority to regulate greenhouse gas emissions for cars and light trucks sold in the state. Fourteen other states are expected to join California's lawsuit today.

"California has a long and proud history of leadership in reducing pollution and fighting for clean air for our residents. And we are upholding that tradition today by filing a lawsuit against the federal government that takes a big step forward in the battle against global warming," said Governor Schwarzenegger. "California is ready to implement the nation's cleanest standards for vehicle emissions, but we cannot do that until the federal government grants a waiver allowing us to enforce those standards.

"Our air quality, our health and our environment are too important to delay any longer, and it is not just the people of California who are waiting. Those states that want to follow our lead cannot do so until federal permission is granted. In fact, fourteen other states are expected to join our lawsuit later today."

Following the filing of California's lawsuit against the U.S. EPA today, fourteen states will be announcing that they are joining California as interveners in the lawsuit, including: Massachusetts, New York, Arizona, Connecticut, Illinois, Maine, Maryland, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington and Pennsylvania.

Under the Federal Clean Air Act, California has the right to set its own tougher-than-federal vehicle emission standards as long as it obtains a waiver from U.S. EPA. Over the past 30 years the U.S. EPA has granted California more than 40 such waivers, denying none.

The original request for a waiver of federal preemption of California's Motor Vehicle Greenhouse Gas Emissions Standards was made by the California Air Resources Board (ARB) on December 21, 2005. The waiver, allowing California to enact and enforce emissions standards to reduce greenhouse gas emissions from automobiles, was requested after the Air Resources

Board developed regulations based on a 2002 California law, AB 1493 by Assemblymember Fran Pavley.

That law required California to establish new standards for motor vehicle greenhouse gas emissions beginning in model year 2009. The ARB-adopted regulations will phase in and ramp up over eight years to cut global warming emissions from new vehicles by nearly 30 percent by model year 2016.

By implementing these standards, California would be eliminating greenhouse gases equivalent to taking 6.5 million cars off the road by the year 2020. If all the other states with similar plans follow through, that figure would grow to nearly 22 million vehicles and would cut gasoline consumption by an estimated 11 billion gallons a year.

In letters sent on April 10, 2006 and October 24, 2006 to President Bush, the Governor reiterated the urgency of approving California's request to address global warming. On April 25, 2007, 16 months after the original waiver request, Governor Schwarzenegger sent a letter to Administrator Johnson informing him of California's intent to sue after 180 days under the Clean Air Act and Administrative Procedure Act, which provides mechanisms for compelling delayed agency action.

California's request has been supported by recent judicial decisions. In September, a court decision in Vermont confirmed that states do have the ability to adopt California's motor vehicle greenhouse gas emissions standards. Sixteen states comprising about 45 percent of all U.S. auto sales have adopted, or are in the process of adopting, California's standards.

In the Vermont case, the judge dismissed the argument by automobile manufacturers that they could not comply with the California-based regulation because the technology was out of reach and that it would cost too much. The Vermont decision came on the heels of a U.S. Supreme Court ruling last April saying the U.S. EPA has the authority to regulate greenhouse gases.

States that have adopted, or are in the process of adopting, California's strict automobile emissions standards are: Arizona, Colorado, Connecticut, Florida, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Utah, Vermont and Washington.

# # #

An autopsy showed that two of the victims survived the accident and burned to death. The attorney for the family of the victims claims that the gas tank/fuel system was configured negligently, which was to blame for the fire. The attorney compared this to the Ford Pinto and said that many Altimas have been involved in similar accidents. We'll follow this as it develops. [MyFox LA]

A ruling by the 2nd District Court of Appeal in Los Angeles indicated that the state's Good Samaritan law only protects people from liability if they are giving emergency medical care. But according to the court, removing someone from a wrecked car is not considered to be emergency medical care... This all stems from a lawsuit filed by a woman who is suing the person that pulled her out of her wrecked car "like a rag doll," which may have led to her becoming a paraplegic (though the crash couldn't have helped). There are two lessons here: Don't move someone unless you're trained or the person is imminent danger. Have someone sign a release form before you help them. – Matt Hardigree

Good Samaritan Law May Not Apply [AP via USA TODAY]

Related:
Jay Leno Rescues Duesenberg From Garaga Oblivion [Internal]

In 2005, Cuneo received complaints from employee Sayaka Kobayashi, who claimed she was sexually harassed by her boss, TMA chief executive Hideaki Otaka. According to court filings, Kobayashi did not feel Cuneo addressed her concerns. Otaka left the company after Kobayashi's lawsuit was filed.

So yeah, umm — we don't know either — and of course...

...we'd never speculate — so our best bet's that its got something to do with that whole Otaka-Kobayashi thing. Or you know, he just really liked the view of K-street better from his old law firm digs and it took him 22 years to realize it. – Ray Wert

Cuneo leaves Toyota to return to law (sub. req.) [Automotive News]

Related:
Jim Press-ing On After Toyota Sex Scandal; Toyota's Otaka Is Totally Feeling It [internal]

Attorney General Lockyer Files Lawsuit Against "Big Six" Automakers for Global Warming Damages in California Impacts of Uncurbed Vehicle Emissions Costing Taxpayers, Economy and Environment

FOR IMMEDIATE RELEASE

(OAKLAND) - Attorney General Bill Lockyer today filed a lawsuit against leading U.S. and Japanese auto manufacturers, alleging their vehicles' emissions have contributed significantly to global warming, harmed the resources, infrastructure and environmental health of California, and cost the state millions of dollars to address current and future effects.

"Global warming is causing significant harm to California's environment, economy, agriculture and public health. The impacts are already costing millions of dollars and the price tag is increasing," said Lockyer. "Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and automakers have refused to act. It is time to hold these companies responsible for their contribution to this crisis."

Filed in U.S. District Court for the Northern District of California, the complaint names as defendants: Chrysler Motors Corporation, General Motors Corporation, Ford Motor Company, Toyota Motor North America, Inc., Honda North America, and Nissan North America. The lawsuit is the first of its kind to seek to hold manufacturers liable for the damages caused by greenhouse gases that their products emit. Lockyer filed the lawsuit on behalf of the People of the State of California.

The complaint alleges that under federal and state common law the automakers have created a public nuisance by producing "millions of vehicles that collectively emit massive quantities of carbon dioxide," a greenhouse gas that traps atmospheric heat and causes global warming. Under the law, a "public nuisance" is an unreasonable interference with a public right, or an action that interferes with or causes harm to life, health or property. The complaint asks the court to hold the defendants liable for damages, including future harm, caused by their ongoing, substantial contribution to the public nuisance of global warming.

As stated in the complaint, the automakers produce vehicles that emit a combined 289 million metric tons of carbon dioxide in the United States each year. Those emissions, the complaint alleges, currently account for nearly 20 percent of the carbon dioxide emissions in the United States and more than 30 percent in California. The defendants rank "among the world's largest contributors to global warming and the adverse impacts on California," according to the complaint.

"Global warming has already injured California, it environment, its economy, and the health and well-being of its citizens," the complaint alleges. "California is responding to the ongoing impacts and the inevitable additional future impacts of global warming. The State is spending millions of dollars on planning, monitoring, and infrastructure changes to address a large spectrum of current and anticipated impacts, including reduced snow pack, coastal and beach erosion, increased ozone pollution, sea water intrusion into Delta drinking supplies, response to impacts on wildlife, including endangered species and fish, wildfire risks, and the long-term need to monitor on-going and inevitable impacts. California has already begun to address the decline in the snow pack and earlier melting of the snow pack in order to avert water shortages and flooding in the future." Dealing with global warming's harmful effects, the complaint adds, "will almost certainly cost millions more."

Today's filing comes as Lockyer fights the auto industry's attempt to invalidate California's landmark global warming regulations curbing tailpipe emissions. In their federal-court lawsuit, the automakers claim the regulations, adopted in 2005 through legislation sponsored by Assembly Member Fran Pavley, are pre-empted by federal law. Lockyer is defending the rules against the industry's legal challenge.

Lockyer noted the Bush Administration's inaction on global warming has forced California and other states to take action on their own. The U.S. Supreme Court is currently reviewing a lawsuit filed by Lockyer, 11 other Attorneys General, two cities and major environmental groups challenging the U.S. Environmental Protection Agency's (EPA) refusal to regulate greenhouse gas emissions. Numerous parties have submitted amicus briefs supporting the states, including climate scientists, three former EPA Administrators, former Secretary of State Madeleine Albright, and environmental and religious groups.

In addition, Lockyer, along with nine other state Attorneys General, the District of Columbia and the City of New York, filed a lawsuit earlier this year challenging the Bush Administration's new fuel economy standards for SUVs and light trucks. That complaint alleges the rules fail to address the effects on the environment and global warming.

California is particularly vulnerable to global warming impacts. According to a report recently submitted by the Climate Action Team to Governor Schwarzenegger and the California Legislature, the consequences of climate change in California will be "severe."

"We are seeing the harmful impacts of global warming today, and if we continue with 'business as usual,' we can expect to see more and larger impacts in the future," said Lockyer. "As a coastal state, an agricultural state, and a state that relies on its Sierra snow pack, California has an enormous stake in acting now to combat global warming."

###

Global Warming Public Nuisance complaint.pdf [ag.ca.gov]
Experts.pdf [ag.ca.gov]

Related:
Feds: Normal Supply/Demand Stuff Post-Katrina, Lockyer: Bullshit! [internal]

Press: Toyota Will Emerge Better From Suit [Washington Post]

Related:
Toyota's Otaka Is Totally Feeling It [internal]

05/11/2006
As prepared for:

Jim Press
President, Toyota Motor North America
Inforum (formerly Women's Economic Club)
Detroit, MI
May 11, 2006

"A New Day for Women and the Auto Industry"

Good afternoon! It's great to be back in Detroit, and I'm happy to spend some time with you, members and friends of Inforum.

Believe me, I've done the math and I KNOW women rule the world!

Today, the spending power of women has never been greater...affecting 80 to 85% of ALL consumer buying decisions...or nearly $7 Trillion! That makes all of you my boss, so I'll try to do a good job for you this afternoon.

I want to start by having a little fun, and giving you a pop quiz. Now, don't worry, it's a fun test and you won't be graded. So, whoever gives me the first right answer will win a new Lexus. How's that sound?

Well...actually, it's a scale model of a Lexus, but it will be quite a conversation piece for your home or office.

Are you ready to go? OK...if you know the answer, raise your hand as quickly as possible and I'll call on you. The first one with the right answer takes home the car.

Here's the first question: How many computer chips does the typical passenger car have onboard today?

OK...that's a tough one. I just wanted to see if you were still awake after that dessert. Let's make it a multiple choice: does the average car contain 33...47...or 70 computer chips?

The average car has 70 onboard microprocessors.

What the heck do all those chips do? Well, they control audio systems, air conditioning, brakes, air bags and many other functions to make sure your car is safe, comfortable and efficient.

Even more impressive, software for the average car today has more than 35 million lines of code...100 times the amount needed for a fully packed interactive computer game!

That illustrates just how advanced and complicated cars are today and why they are smarter, safer and more comfortable than ever before.

And think how impressed your kids will be when you tell them you managed more computer code driving home than they did playing games all afternoon.

Yeah, right...Well, we can dream, can't we?

Here's question No. 2...Based on the latest research, who was the first person to design a car?

This is tricky, so I'll give you some choices. Was it Karl Benz? Ransom Olds? Leonardo da Vinci? or Fred Flintstone?

Actually, Fred isn't that far off. Leonardo da Vinci designed the first car more than 500 years ago - in 1478. That's right...Italian scientists recently uncovered drawings from Da Vinci they consider to be the first definitive vehicle design.

What did the da Vinci coupe look like? By all accounts, it was a boxy, open-top three-wheeler, made mostly of wood, about six feet long and five feet wide.

So, if you put Leonardo's car together with the computer chips in the first question, what do you get? That's right...The Da Vinci Code!

All right, here's the last question: "Who are safer drivers, men or women? Well, at least you have a 50-50 chance on this one...

The answer: That's right...women. According to an Allstate insurance survey, only 52% of women report driving 20 mph over the speed limit vs. 64% of men.

Well, that was a lot of fun, and hopefully it provided you with some new insights about the automotive business. It's also a great lead-in to what I want to talk about today: the future of the auto industry; the future of Detroit; and the future of women as both leaders and as a consumer force in our industry.

I know the headlines here and around the state of Michigan have been bleak and that a lot of people are scrambling to re-order their lives in the wake of financial troubles at Ford and General Motors and at Delphi and other suppliers.

There's pain, disappointment and probably some despair about the future. That's understandable, and I don't for a minute want to discount the hardship that some people are experiencing.

I'm sure all of our hearts go out to those faced with major life challenges. I do, however, want to tell you that I see great hope, and passion, and potential for the future and that I firmly believe Detroit will ALWAYS play a starring role in the world's greatest industry.

Let me tell you why.

Despite what you may be seeing and hearing, the automotive industry is alive and healthy. Globally, sales continue growing because people are gaining a higher standard of living and discovering the freedom that cars provide in major developing countries like China, India, Russia and Brazil. In some ways, they are like America was in the Roaring 20s.

Here in the United States, business is solid. The auto industry is coming off its third best year in history, and sales so far this year are nearly on the same pace.

General Motors and Ford are taking bold steps to recover, and there are signs good things starting to happen. Both were profitable in Asia, Europe and Latin America in the first quarter and some analysts believe GM's job buyouts will pay for themselves and generate significant cost savings in less than two years.

In addition, General Motors sales were up a whopping 75%, and Ford sales doubled during the first quarter in China, rapidly becoming the second largest auto market in the world after the United States.

I firmly believe GM and Ford will both come back stronger than ever and be very successful. And that's important because they are vital to our industry, vital to this area, and vital to our national economy.

It won't happen overnight, but it WILL happen, and consumers will be the biggest winners because greater competition will spur better and better cars.

I think it's also important to note that the majority of auto suppliers — many with operations here in Michigan — are healthy and growing.

In fact, a recent analysis by CSM Worldwide confirmed that 3 out of 4 auto suppliers are in good financial shape.

So, at Toyota we're cautiously optimistic and projecting annual industry sales of about 17 million this year, up just a hair over last year's. That would make 2006 not just another solid year, but also one of the top three or four in automotive history.

For the long term, we believe annual industry sales of 20 million vehicles — 3 million higher than now — are within reach in the next decade, and the whole industry will benefit from that rising market tide.

So...where's the boom coming from? First, people are living longer and driving longer. CNW Research found that 7 vehicles — more than half of the 13 cars the average American buys over a lifetime — are purchased AFTER the head of the household turns 50.

Sixty percent of the U.S. population will be 50 or older in the next five years, and Baby Boomers won't reach the peak of their spending power until 2009, so there are enormous opportunities for growth ahead.

Second, Generation X is maturing and adding cars to their household. They already buy more than a fifth of all new cars and are entering their child-rearing years when they'll need family vehicles.

Third...the 63 million people of Generation Y are reaching driving age in this decade. It's the second-largest generation of all time and will start flexing its spending power in 2010, buying one of every four new cars.

And fourth...strong immigration will continue because America is still viewed as the land of opportunity by people all over the world.

The result of these trends coming together is simply astounding. During the next 19 years, the U.S. population will increase by 70 million, or equal to the populations of California, New York and New Jersey COMBINED!

Along with phenomenal demographics, market drivers are on our side too. Our gross domestic product is growing, consumer spending is positive, jobs are increasing and productivity is rising. And new booms in information technology, biotechnology and nanotechnology will boost our economy even further.

All of this together adds up to a golden opportunity in the years ahead for automakers, suppliers and all those who support the industry.

Like Ford and GM, I fully believe this region will stage a major comeback and that Detroit will shine like it did when you recently hosted baseball's All-Star Game and football's Super Bowl. This is a special place where the fortitude of the people has honed this region into a powerful symbol of American ingenuity and re-invention.

There's an energy here that is unique, bold and everlasting. That's why Toyota is so bullish on this region, and why we have big plans here. Our goal is to make the Detroit area Toyota's North American hub for research, development and engineering. It absolutely will be the focal point for our efforts to design cars and trucks by Americans...for Americans.

Toyota set up shop here with a Technical Center in Ann Arbor nearly three decades ago, and our operations have been steadily expanding ever since, including the addition of a design studio in 2004.

This year, we'll start work on a major expansion in York Township where we're building a 350,000-foot structure to house our entire U.S. engineering group. When it opens in 2008, we'll have more than 1,100 associates, and there's plenty of room to grow because we purchased 690 acres of land — 7 times more than our current facility in Ann Arbor.

In addition, some of our key suppliers and subsidiaries are moving here:
Hino Motors, our truck subsidiary, moved its U.S. headquarters to Farmington Hills in 2005;
Aisin Seiki, a key supplier, opened up a proving track last October in Fowlerville;
And Denso, our largest supplier, directs North American operations from its headquarters in Southfield, has three plants in Michigan, and is the largest employer in Battle Creek.

And Toyota's not alone. Nissan recently doubled its engineering staff in Farmington Hills and Hyundai-Kia is adding 600 jobs to its new technical center in Superior Township.

Others will follow because Michigan has a deep pool of talented workers; the state's colleges and universities are some of the best in the nation, and it's the automotive capital of the world.

Today, Michigan is home to more automotive-related R & D centers — a total of 215 facilities — than all the other states, Canada and Mexico... COMBINED!

And there's more good news statewide. To stimulate the production of ethanol, Michigan has set up 20 agriculture zones with tax incentives for companies that build ethanol and other renewable energy facilities. And no less than 4 ethanol production plants are being built right now in the region.

There's also a pioneer hydrogen technology park in Southfield and a new, 100-acre bio-tech park being built in Wayne County.

Michigan is also home to some leading-edge work on wind-generated energy, with commercial wind turbines operating in Traverse City and Mackinaw along with new turbine farms being built in Huron and Sanilac counties.

So, yes, there's a lot of transition going on here now, and definitely some pain but overall there's great hope for the future.

Southeast Michigan is poised for a new day of progress that will attract fresh jobs and fresh companies and Toyota is proud to be a part of it.

OK...so now we know that things will soon be looking up for the auto industry, but what about the other key pursuit of Inforum, the empowerment of women?

After all, the auto industry has been a male-dominated business for nearly a century, so some people don't have much hope for progress.

Well, once again I have positive news. Women today are playing increasingly vital roles as both leaders and consumers in the auto industry, and the trend gets stronger every year.

At the risk of preaching to the choir, let me quickly list some remarkable statistics about the growing power of women in the world and in the marketplace:

46% of U.S. workers are women
46% of all privately held companies are owned by women
57% of the bachelor's and master's degrees awarded in 2005 went to women
55% of married women earn half or more of their families' income
More women hold elective office than ever, with 14 U.S. Senators, 67 Congressional representatives and 8 Governors
And...47% of all investors are women

In the auto industry, the numbers are even more dramatic. The industry trend of women buying more cars has been on the upswing for the past 12 years and currently hovers at 46% — nearly half of all vehicles.

For Toyota, it's even higher. 51% of all Toyota vehicles are purchased by women, and when you to narrow the list to just "passenger cars" purchased, about 59%, or 3 out of 5 of our buyers, are women.

All I can say is thank you very much, and let me know if there's anything else I can get for you while I'm in town.

I really wasn't kidding earlier when I said you are my boss. And luckily, I've had the good fortune to have several women mentors in my life.

My mom, of course, was a key influence. And so is Pat Moran, the president of our largest private distributor in the country, responsible for about a fifth of our U.S. business.

I'm also guided by some incredible women leaders at our headquarters in California.

Our chief information officer, top lawyer, top financial planner, the head of our North American parts operations and the leaders of Lexus marketing and service are women and playing crucial roles in Toyota's success.

In fact, people tell me it's BECAUSE we have so many women leaders that we're doing so well now...and I don't dispute that.

Now, are we doing as much as we can as a company on this front? No, we're not. We need to do more, but we are making some good progress.

In vehicle design, for example, we carefully considered the 'hip height' while designing our Toyota Highlander and Lexus RX sports utility vehicles. Our goal was to accommodate drivers who wanted the greater visibility of higher seating, but didn't want to step up to get into their vehicles. That goes for both men and women, but our surveys show that women appreciate this hip-height selection the most, and the Highlander and RX have been big sellers.

The high mileage, low-emission benefits of our cars and hybrids also rank high with women.

Along with design improvements, we're increasing our company's profile in women's sports by sponsoring a key woman tri-athlete, Beth Hibbard, and professional golfer, Janice Moodie.

And we are in our second year of a major partnership with the Women's National Basketball Association. A key part of our association is support of the WNBA "Read to Achieve" program that features players promoting the importance of reading to young fans.

We're also a major sponsor of the Danskin Triathlon Series, the largest such series in the country, and the Los Angeles Revlon Run/Walk for Women. I'm particularly proud that the volunteer Toyota Revlon Run/Walk team has been the top-fundraiser for the past 3 years.

In terms of improving the profile of women in society, we're teaming up with Glamour magazine for the second year to sponsor "Moving Forward" awards to honor three American women.

The Toyota winners will be invited to attend the annual Glamour "Women of the Year" awards in New York City and receive a Toyota hybrid vehicle.

We know we still have a long way to go to fully reach out to women consumers, but we are getting better every year and will continue refining our efforts. And at the center of those efforts is our long-standing commitment to produce the kinds of products that ALL customers want — cars and trucks that are high in quality, dependability, reliability and resale value.

Along with significant roles as leaders and consumers, women are also creating a revolution in the retail automotive business. More and more dealers are finding great success recruiting, training and promoting women managers and sales associates.

Asbury Automotive Group, one the nation's largest dealership companies, is actively recruiting women in malls to come to work at some of their dealerships.

Why? Because there's growing evidence that women are better at selling cars than men.

CNW Research reports that saleswomen are less likely than their male counterparts to ignore women customers or to ask them if their boyfriend or husband is helping them finance a purchase.

In addition, CNW found that nearly 10% of men actually preferred buying a car from a woman while more than 81% had no preference.

Women are extremely good at running dealerships, too. Although just 8% of all U.S. car dealerships are owned by women, those stores average a higher rate of sales than those owned by men.

Asbury Automotive embarked on their recruitment program after seeing the success of women sales representatives at several of its dealerships. A prime example is Kaylene Cohen, the manager of pre-owned Lexus vehicles at Plaza Motors in St. Louis. Eight years ago, she was managing a Gap store, but the dealership hired her and trained her, and she's been successful selling cars ever since.

Then there's my favorite, Elsie MacMillan, who entered the business 35 years ago as a bookkeeper at a New Jersey dealership and worked her way up through the ranks to become General Manager of a Lexus store in 1989. Although she did very well at the Lexus store, she decided it was time to buy a dealership of her own.

Through strong determination and a lot of hard work, Elsie put together a deal with financing help from our Dealer Investment Group to buy a Toyota dealership in Sierra Vista, Arizona, 70 miles southeast of Tucson.

Three years later, the dealership is thriving, and she owns it lock, stock and barrel. In fact, she has increased sales 25% and is building an entirely new, larger facility next door.

In addition to a lot of hard work, including 11-hour days, 6 days a week, Elsie attributes her success to providing supreme customer care. And her customers are not only rewarding her with more sales, but have nominated her for several business awards. Last year, Elsie's dealership won the "Ethics Award" from the Tucson Better Business Bureau, and Inside Tucson Business selected her as one of the top 10 "Women of Influence" in the region.

Oh, and that customer who nominated her for the ethics award? Her name is Melba Vickery. She's 82 years young and bought a used Prius hybrid from the dealership. She loves her car, and just as important, she loved buying it from Elsie, who took time to thank Melba by taking her to lunch to celebrate.

You see, for Elsie a successful day is not so much about ringing the cash register, but about meeting and serving the needs of those who come into her dealership.

As a result of that philosophy, a car sale is not the end, but rather the beginning of a long, fruitful relationship. We couldn't agree more, and we're extremely proud to have her as a Toyota dealer.

Elsie is a great example of how women are increasingly influencing and changing the auto industry for the better.

And in the future more and more women will come into our industry and it will be much better as a result.

Well, we've covered a lot of topics today, from Leonardo da Vinci and wind turbines to Gen Y and mall recruiting. But I think one point is clear: things ARE starting to come together and there is GREAT hope for the future.

This is no time to run scared; it's time to embrace the changes and opportunities presented by globalization, seismic demographic shifts and the empowerment of women.

Our world is definitely transforming, but a new day is dawning and we can choose to make it a positive thing by confidently moving forward.

By doing that...we will not only ensure a brighter future for ourselves, but also for Detroit, the state of Michigan, the United States and our world.

Thank you.

Oh, and I have one more surprise for you....

Because she's an important pioneer in our industry, and a prime example of what's right with the car business today, we've invited Elsie MacMillan here today so you would have a chance to meet her in person.

Ladies and gentlemen, please welcome the leader and dealer principal of Sierra Toyota, Elsie MacMillan.

Elsie, thanks for coming, and please come join me on stage to say hi and answer questions....
# # #

SEX-FUELED CAR BIG A GROPE DOPE: AIDE [NY Post via AdFreak]

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I Smell Sex and Bribery: Volkswagen's Not So Secret Shame [internal]

A story that rivals papa Henry's Nazi medal for Things Ford Most Wants to Forget has surfaced once again. A group of former union organizers in Argentina has filed a civil suit against FoMoCo and its Argentine subsidiary claiming the men were kidnapped and tortured inside the company's plant in the dawning years of that country's military dictatorship and subsequent "Dirty War" of 1976-1983. The workers, who had filed a similar criminal suit against Ford Argentina in 2003, claim they were beaten, tortured by electric shocks and subjected to mind-fuck techniques favored by the junta of the time. (To be fair, Ford's not the only company who has faced such charges; Mercedes Benz's Argentine affiliate was accused of the same kind of anti-union violence.) See kids, those unaware of history are doomed to repeat it — and that doesn't just apply to the 1977 Pinto Cruising Wagon.

Ford Sued In Argentina Over Alleged Kidnappings, Torture [CNN]

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Let s Party While the Children Starve! [internal]

For a wronged consumer, facing down insurance companies (motto: what we don't own, you don't freaking need) in court is daunting. But the fear of a flannel-suited squadron of lawyers isn't stopping one guy from attempting to wring satisfaction out of State Farm. It seems the man bought a certified pre-owned Honda Civic whose pre-ownership, the man later discovered, included being totaled and sold as salvage back into the market. At auction, State Farm had left off the car's salvage history — along with those of 30,000 other wrecks — an incident that ended in a cash settlement with the State of Pennsylvania. That settlement provided the Civic owner with $2700 to offset the loss in value of his (now valueless) $14,000 Civic. Nice try, State Farm. See you in court. And you can have your keychain back thank you very much.

Consumer sues State Farm for selling salvage cars without disclosure [Leftlane News]

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Progressive Testing Black Box to Calculate Insurance Rates [internal]

The hoard of liability lawyers representing two giant companies can finally relax, grab a smoke or maybe take in an afternoon on the back nine. Bridgestone Corp. yesterday announced it was paying FoMoCo $240 million in a settlement related to Ford's wide recall of Firestone tires in 2000 and 2001, back when the words "tread separation" really meant something. Four years ago, Ford replaced millions of Firestones — the failure of which was cited by the Feds in rollover accidents linked to numerous deaths and injuries — at a cost of $3 billion. The tires had been original equipment on its Explorer SUV. Ford and Bridgestone never saw eye-to-eye on the cause of the tire failure, Bridgestone saying Ford set the inflation too low to make up for a center-of-gravity deficiency, and Ford blaming the problem on poor quality at Bridgestone plants.

Related:
McLaren Mulls Switch to Bridgestone [internal]

We had a "Diamonds on my Windshield" joke all cued up, but we somehow lost the thread when the UPS guy hit the bell. No matter, it was probably less funny than hearing that Tom Waits number sung in Norwegian. What are we on about? Waits is suing General Motors's Opel division and ad agency McCann Erickson for running a series of car commercials in which an impersonator copies Waits's gravelly vocals. Waits had previously refused to participate in the campaign, which was broadcast in Sweden, Finland, Denmark and Norway. GM, saying it didn't knowingly seek out Waits for the ads, is passing the buck to McCann, which produced the ads in Germany. Waits, who happened to be cruising down the boulevard looking for the heart of Saturday night, was unavailable for comment. [Update: Big Rick Stuart has the full quote from Tom about his involvement in the suit. Classic Waits poetics after the jump.]

"Apparently," Waits said, "the highest compliment our culture grants artists nowadays is to be in an ad — ideally naked and purring on the hood of a new car. I have adamantly and repeatedly refused this dubious honor. Currently accepting in my absence is my German doppelganger. While the court can't make me active in radio, I am asking it to make me radioactive to advertisers."

Big Rick's blog [KFOG-FM]

Grammy Winner Tom Waits Sues GM [Edmunds]

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Eric Clapton Busted in Porsche, Loses License; Rod The Mod s Ferrari Enzo on E(AKA "Wake Up Maggie, Rod's Out of Gas") [internal]