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Mercedes Recalls 85,000 Recent Cars for Steering Problem

Mercedes-Benz is recalling 85,000 of its 2010 and 2011 models because a steering problem could make the vehicles difficult to control, The New York Times reported.

The models are the 2010 C-Class and the 2010-11 E-Class, the automaker told the National Highway Traffic Safety Administration in a recent report.

Mercedes said a connection fitting on the high-pressure power steering line might not be tight enough, allowing power-steering fluid to leak.

As a result, the automaker reported, “Owners may not have sufficient control of the vehicle under circumstances such as parking where maximum power steering is required.” The company added that the problem “could lead to a vehicle crash.”

Mercedes said it learned of the problem from customer complaints. Its report to the safety agency did not say whether there had been any accidents. A Mercedes spokesman could not immediately be reached.

In its report to the safety administration, Mercedes described the recall as voluntary. But once an automaker identifies such a safety defect, the law gives it no option but to recall the vehicle.

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Ford Wants to Work with Wireless Companies to Create Safe Car Apps

Ford Motor Co., which has made its Sync connectivity technology a distinguishing feature of its vehicles, wants collaboration with the wireless community to create safer, smarter and more seamless connectivity solutions in vehicles while preventing distracted driving, The Detroit News reported.

Derrick Kuzak, Ford group vice president responsible for global product development, addressed the CTIA Enterprise & Applications 2010 wireless technology trade conference in San Francisco today.

“Customers have Ford vehicles and smart phones and demand that they work together beautifully,” Kuzak said. But that requires the auto industry and wireless telecommunications industry work together more closely.

Ford is the only automaker with a presence at the CTIA conference, originally known as the Cellular Telephone Industries Association. On display are vehicles with MyFord Touch, which is the latest version of Sync as well as a dashboard from a 2011 Ford Explorer to show how the system works.

Sync, developed with Microsoft, makes the vehicle an extension of a smart phone, as opposed to an imbedded car system such as General Motors Co.’s OnStar service.

Ford said it has been working to increase the number of Bluetooth phones that can communicate with Sync to provide more voice-activated functions in an effort to discourage drivers from texting or other functions that take their eyes off the road and hands off the wheel.

About 26 percent of Americans of driving age admit to texting while driving, according to a recent poll from Pew Internet and American Life Project.

Ford is one of many automakers that support legislation banning hand-held texting while driving.

The Dearborn-based company has offered text-to-voice capability through Sync since 2007, and MyFord Touch allows drivers to listen to incoming texts and reply using voice commands.

So far, about six cell phone types work with Sync but Kuzak wants to grow the number of compatible phones by encouraging adoption of standard protocols across the cell phone industry.

“A limited population of phones has the capability to work with the text message read-back feature of Sync,” said Kuzak in calling for help from phone makers and the wireless industry. “We’ve taken the initiative and encourage others to join us.”

The automaker already is working with Research In Motion, which makes BlackBerry smart phones.

“Our goal is to give customers a driving experience where listening to a text message is no different than listening to a news announcer on the car radio,” said Jim Buczkowski, director of Ford Global Electrical and Electronics Systems Engineering.

“Ford Sync provides a better answer to picking up the phone and taking your eyes off the road to read messages.”

Kuzak told the San Francisco audience that Ford has three categories of apps.

Built-in apps come standard with a vehicle, such as the ability to call a local 911 operator.

Beamed-in apps pull down information, such as directions, wirelessly.

The next phase is “brought-in” apps through a feature known as Applink that would identify the apps a consumer has on their phone, identify which ones are safe to import into a car, and then download them. An example would be Pandora Internet radio.

Kuzak said it is providing a software development kit to interested smart phone app developers, so they can modify their existing apps to work with Sync. The automaker already has received contacts from more than 1,000 interested parties wanting to ensure their apps are compatible with Sync, Kuzak said.

“Our goal is not to have thousands of apps available for the car because there are strict limitations on what should be allowed while driving,” he said.

Kuzak called on the companies at the annual trade conference to offer ideas for future apps and partnerships.

“We have an opportunity right now to set the standards others will follow.”

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Ford, Dealers Say Credit Access Helping Recovery in Auto Sales

New-vehicle buyers are having an easier time getting credit, signaling U.S. auto sales may continue to accelerate after last month reaching the fastest pace since the government’s “cash for clunkers” program, Bloomberg reported.

Federal Reserve data shows banks began easing consumer-lending standards in July, and the Fed’s loan facility program rejuvenated the market for securitized auto debt, said Ellen Hughes-Cromwick, Ford’s chief economist. Data from CNW Research shows improved sales for buyers with weaker credit scores.

“Credit has begun to ease for automotive in general,” Hughes-Cromwick said today in a telephone interview. “We should see consumer credit begin to evidence some recovery, but it is a slow go. I don’t think anybody is baking in some sizable cyclical uplift in the next 12 to 18 months.”

Auto retailers including Group 1 Automotive Inc. and CarMax Inc. have said credit is less of a setback now after tighter lending helped slow U.S. auto sales to 10.4 million deliveries last year, the lowest since 1982. Sales in September rose to a seasonally adjusted annual rate of 11.8 million, the fastest pace since August 2009, according to Autodata Corp.

That’s still less than the 16.8 million annual average from 2000 to 2007, as Americans defer big-ticket purchases amid weak consumer confidence and high joblessness. Payrolls fell by 95,000 workers last month, more than forecast in a Bloomberg survey of economists, as the unemployment rate held at 9.6 percent, according to Labor Department figures released today.

“Credit is certainly available to meet the consumer’s needs,” Peter DeLongchamps, a vice president at Houston-based Group 1 Automotive, said in a telephone interview. “For current sales levels to increase, we need additional showroom traffic.”

The share of new-vehicle sales to buyers with subprime credit rose to 9.9 percent in September, the highest since February 2008, according to consulting firm CNW Research.

Subprime buyers represented 6.8 percent of the new-vehicle market through the first nine months of the year, according to CNW. That’s up from 5.7 percent last year, while short of the 14 percent share in 2006, the data shows.

CNW, based in Bandon, Oregon, defines subprime borrowers as having a FICO score below 619. Fair Isaac Corp.’s FICO scores use variables including the number of credit inquiries and missed payments.

Ford Motor Credit Co., the finance arm of the Dearborn, Michigan-based automaker, sold $500 million of bonds backed by dealer payments last month and had a similar offering worth $1.13 billion in March with help from the Fed’s Term Asset- Backed Securities Loan Facility.

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LaHood Weighs Urging U.S. Ban on All Driver Phone Use in Cars

WASHINGTON – U.S. Transportation Secretary Ray LaHood says he believes motorists are distracted by any use of mobile phones while driving, including hands-free calls, as his department begins research that may lead him to push for a ban, reported Bloomberg.

LaHood, whose campaign against texting and making calls while driving has led to restrictions in 30 states, says his concerns extend to vehicle information and entertainment systems such as Ford Motor Co.’s Sync and General Motors Co.’s OnStar.

“I don’t want people talking on phones, having them up to their ear or texting while they’re driving,” LaHood said in an interview. “We need a lot better research on other distractions,” including Bluetooth-enabled hands-free calls and the in-car systems, he said.

Even without a ban, which would have to be implemented by individual states, LaHood’s escalating campaign may limit the growth of vehicle features such as Sync, being added by automakers to attract younger buyers. His push also may reduce calls made from vehicles and the revenue of mobile-phone companies such as Verizon Wireless and AT&T Inc.

LaHood, 64, said even hands-free phone conversations are a “cognitive distraction.” Calling for a ban on hands-free communications is a possible outcome of research under way at the Transportation Department’s National Highway Traffic Safety Administration into all driver distractions, Olivia Alair, a department spokeswoman, said.

LaHood plans to meet with the heads of all makers of cars sold in the United States to discuss their cooperation in limiting distracted driving. He said he’s not yet recommending restrictions on hands-free phone calls and didn’t say when he might make a decision.

The transportation secretary may have little chance of getting a ban by the states even if he decides one is justified, said Christopher King, a telecommunications analyst at Stifel Nicolaus & Co. in Baltimore.

“It’s so ingrained at this point, I think banning that would be extremely difficult, bordering on folly,” King said in an interview. “There would be no legitimate, public support for an outright ban.”

The Transportation Department’s powers to push further limits on distracted driving range from exhortations to setting standards backed by the federal government’s financial clout. The government previously awarded highway aid to states based on whether they raised the legal drinking age to 21 or required seatbelt use.

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Ford’s Credit Rating Raised Two Levels by Moody’s

DETROIT – Ford Motor Co.’s credit rating was raised two levels by Moody’s Investors Service, which said the automaker’s operating performance “significantly exceeded” expectations, Bloomberg reported.

The upgrade in Ford’s corporate family rating to Ba2 from B1 is the fifth Moody’s has given the automaker in the last 13 months. Ford, which has $27.3 billion in automotive debt, remains two levels below investment grade. Moody’s said it has a stable outlook on Ford’s debt and its finance subsidiary, Ford Motor Credit Co.

“The company is well positioned to continue generating strong earnings and cash flow through 2011, and to further strengthen its balance sheet,” J. Bruce Clark, Moody’s senior vice president, said in a statement. “At the same time that the industry’s business practices have become more disciplined, Ford is coming to market with an exceptionally strong product portfolio.”

Returning to investment grade, which Ford slipped out of in 2005, has become “a rallying cry within the company,” Chief Financial Officer Lewis Booth said last month. Ford paid down debt by $7 billion in the second quarter. It continues to have larger obligations than General Motors Co., which had its balance sheet cleansed in bankruptcy last year.

Ford is the only major U.S. automaker that didn’t seek bankruptcy protection with the help of the U.S. government in 2009.

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How to Get an SBA Loan

The U.S. Small Business Administration offers a variety of loan programs for small businesses but there are two main points to keep in mind if your business is considering pursuing one: First, the SBA does not directly make loans; that’s the job of financial institutions. Second, SBA-backed loans should be seen neither as a first recourse or a last resort, bizjournals reported.

“The SBA guarantees loans – it doesn’t actually lend money,” said Carol Kuc, president of the National Association of Women Business Owners. “So it’s important to develop a relationship with a banker – one that makes SBA-backed loans.”

Most banks do, and the SBA’s website, www.sba.gov, includes a list of participating lenders.

Before applying for an SBA-backed loan, small businesses are advised to seek a conventional bank loan – they’re cheaper.

“SBA programs can be an excellent source of funds, especially if you lack collateral or established earnings,” said Jim Overton, director of SBA 504 lending at Self Help. “But the rate tends to be a little higher than a conventional loan. You are paying a fee for that guarantee. If you are creditworthy, an SBA-backed loan does not necessarily offer the best terms and conditions you can get.”

Self Help is a North Carolina-based community development financial institution that serves businesses across the country. Jim Hammersley, director of the SBA’s Office of Business Loans, said borrowers may be able to get a longer term for an SBA-backed loan – as long as seven to 10 years – which would lower monthly payments. Paying off an SBA loan will enhance the creditworthiness of a small business with commercial bankers, making future borrowing easier, he added.

Although the loan is backed by the SBA, the borrower is still responsible for it. Said Kuc, “This is not free money. A loan is a loan, and you have to repay it.”

Hammersley also suggested spending lots of time exploring the SBA Web site. It not only provides in-depth information on the SBA and the services it offers, but is also a primer on how to begin and grow a business, and lists resources.

The site can steer a borrower through loan options. For example, if you are looking to finance the construction of a building, a 504 loan is appropriate, while the 7(a) program is geared toward the purchase of computers, phone systems or other equipment.

The SBA also has a Microloan program, which provides small loans. Under this program, SBA makes funds available to nonprofit community-based lenders that make loans of up to $35,000. The intermediary provides technical assistance, which, Hammersley said, can be just as valuable to a young company as a loan.

You can also get assistance from local SBA-affiliated small business centers and women’s business centers or from the volunteers at SCORE, which is staffed by retired business executives. A community college, public library, chamber of commerce or local government agency may also be able to provide resources and technical assistance.

“The website can steer you through the process, but it doesn’t tell you how to make the deal work or build relationships for you,” Kuc explained. “You have to do that yourself.”

Don’t think that if no one else will lend you money, you can get it through SBA programs. The SBA and its lenders are not going to make loans to excessively risky businesses and those that lack solid business plans. “Show them — why are you good candidate for a loan?” Kuc advised.

A well thought-out business plan with reasonable projections is a must. Said Overton: “A plan won’t make or break your application, but without one that shows how you intend to succeed, it will hurt your chances. The more data you have, the more you show you understand your business, how you will make it work and have relevant experience, the better your chances are.”

Also be prepared with your personal tax returns and financial statements, as well as your company’s financials.

“The most important thing to do – by a long shot – to get an SBA-backed loan is to have a well thought-out business plan,” Hammersley said. “And do your homework to see what’s available. Plus pay attention to the details – understand the transaction.”

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