Toyota (TM), Ford (F), GM (GM) Down after Shocking Supreme Court Decision

Shares of Ford (NYSE:F), General Motors (NYSE:GM) and Toyota (NYSE:TM) are all down on a shocking US Supreme Court ruling, which said that car companies who were in compliance with federal standards on seat belts are not protected from being sued by owners.

In another shocker, it was a unanimous ruling, which stated that a California suit against Mazda could go forward. In 2002, a passenger sitting in a rear seat who was wearing a lap-only seat belt was killed.

The family sued Mazda, saying that the minivan was defective. Mazda said it was in compliance with federal safety regulations in effect at the time of the accident; an appellate court in California agreed.

But the Supreme Court overturned the appellate court ruling, stating that federal safety regulations don't pre-empt state lawsuits that claim car manufacturers should have installed lap-and-shoulder belts.

So what are federal safety standards for?

Ford (F) May Lose Mazda at Flat Rock Factory

Mazda Motor Corp. may pull out from a Southest Michigan factory it operates jointly with Ford Motor Co. after production turned unprofitable, CFO Kiyoshi Ozaki said.

Japan’s second-largest car exporter will announce plans for the Flat Rock factory by middle of this year, Ozaki told reporters today (Monday) in Tokyo. The company also may consider overhauling the plant or change the models built there, he said without elaboration.

The plant needs to run at 70 percent of its full 240,000-vehicle capacity to make a profit, Ozaki said today. Mazda, based in Hiroshima, Japan, aims to introduce a more fuel-efficient engine to spur demand and increase domestic production to improve economies of scale after slipping to a third-quarter loss.

Mazda’s U.S. sales fell 9 percent in January, as increased incentives on Toyota Motor Corp.’s (NYSE:TM) Corolla compact and demand for Hyundai Motor Co.’s Elantra sapped demand for the Mazda3, Ozaki said. The automaker will need to adjust U.S. inventory by 5,000 vehicles through March, he said.

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