GM PLANS TO RAMP UP PLANTS WITH DEALERS RUNNING LOW ON PICKUPS
General Motors Co.'s North American assembly plants have overcome initial parts-supply challenges and will boost production next week. Three U.S. factories building mid- and full-size pickups will operate on three shifts starting June 1, the automaker said in a statement Thursday. GM has been running just one shift at the facilities and was unable to increase output this week because supply of parts from Mexico was constrained.
Source: Bloomberg
VW PUMPS ANOTHER $2.3B INTO EV BET
Volkswagen Group agreed to invest 2.1 billion euros ($2.33 billion) in two separate Chinese electric vehicle players. VW said it will invest 1 billion euros to take a 50 percent stake in the state-owned parent of Anhui Jianghuai Automobile Group, also raising its stake in an existing EV joint venture with JAC to 75 percent from 50 percent. VW will gain full management control of the JV, said Stephan Wollenstein, the company's China CEO. The joint venture will launch five more electric models by 2025 and establish an EV factory in Hefei, VW said. The automaker aims to sell 1.5 million new energy vehicles (NEVs) -- including full- electric cars as well as plug-in-hybrid and fuel cell vehicles -- a year in China by 2025. The production of EVs based on the MEB platform will start at the JAC-VW venture in 2023, Wollenstein told a media briefing on Friday.
In a separate transaction, VW said it will pay 1.1 billion euros to acquire 26.5 percent of Guoxuan High-tech, a maker of electric vehicle batteries, becoming its biggest shareholder.
VW said Guoxuan, based in Hefei like JAC, will supply batteries to its EV models in China.
The deals come as global rivals such as EV maker Tesla seek to make inroads in the Chinese car market. Tesla last year became the first foreign automaker to wholly own a car plant in China.
China has set a target of 25 percent of 2025 annual vehicle sales to be made up of NEVs. More than 25 million vehicles were sold in China last year. Friday's moves also make VW the latest foreign automaker to increase ownership of operations in China since the government started to relax rules in 2018, with BMW quick to take control of its main local venture. VW also has ventures with state-owned China FAW Group and SAIC Motor.
Source: Reuters
TESLA SHAREHOLDER WANTS MUSK TO DROP HIS DISDAIN FOR ADVERTISING
Tesla Inc. shareholders will vote in July on whether the electric-car maker should start doing something Elon Musk has long resisted: advertise its cars. James Danforth, a San Diego-based holder of 850 Tesla shares, is proposing that the company spend at least $50 per vehicle produced to advertise its products. Tesla's board opposes the measure. "Advertising can increase brand value, product awareness and interest," Danforth wrote in the proposal, which is included in Tesla's proxy statement. "Tesla ads can help mitigate and dilute substantial FUD ('Fear, Uncertainty, Doubt') and misinformation campaigns sponsored by competitors and detractors worldwide and steer the narrative more favorably."
Musk, 48, has opposed paying for traditional advertising and criticized other companies for spending on marketing rather than on improving their products. The CEO prefers to promote Tesla himself on Twitter, where he has almost 35 million followers, and through other even less conventional means.
This week, NASA astronauts rode in Tesla Model X crossovers on their way to the rocket built by one of Musk's other ventures, Space Exploration Technologies Corp. In February 2018, a SpaceX rocket carried a cherry red Tesla Roadster into space. "While we welcome stockholder feedback, we also believe we have an experienced management team that is best situated to determine Tesla's day-to-day business operations, including our sales and marketing practices and expenditures," the board said in its opposing statement.
Tesla confirmed in the filing that one tranche of Musk's moonshot pay award has vested. The last milestone needed for the CEO to collect 1.69 million stock options that he can exercise at $350.02 apiece occurred on May 5, according to data compiled by Bloomberg. The options were worth more than $700 million at that time.
Source: Bloomberg
CDC SAYS CARS ARE BETTER THAN MASS TRANSIT DURING COVID-19 CRISIS
During the day on Sunday, the CDC adjusted its recommendations to clarify that they are "if feasible," and that it doesn't object to people "driving or riding by car either alone or with household members." It also added a suggestion that employees be told to follow CDC guidance on "how to protect yourself when using transportation" if they found it necessary to use public transport methods.
Source: Car and Driver
U.S. COURT REFUSES TO SHIELD VW IN DIESEL SCANDAL LAWSUITS
A U.S. appeals court ruled on Monday that Volkswagen Group cannot escape potential financial penalties from two counties in Florida and Utah that may amount to a "staggering" additional liability arising from the German automaker's diesel emissions scandal. The unanimous ruling by a three-judge panel of the 9th U.S. Circuit Court of Appeals, sitting in Anchorage, Alaska, was a victory for Utah's Salt Lake County and Florida's Hillsborough County in their litigation against VW. The counties sued VW for causing excess diesel emissions harmful to the environment and could in theory seek billions of dollars in damages.
Volkswagen settled U.S. criminal and civil actions prompted by the scandal for more than $20 billion, but that did not shield it from liability from local and state governments, the 9th Circuit noted.
The 9th Circuit found that nothing in the Clean Air Act "raises the inference that Congress intended to place manufacturers beyond the reach of state and local governments."
The judges wrote that they were "mindful that our conclusion may result in staggering liability for Volkswagen. But this result is due to conduct that could not have been anticipated by Congress: Volkswagen's intentional tampering with post-sale vehicles to increase air pollution."
The two counties each have penalties of $5,000 per day for tampering violations and had a combined total of at least 6,100 polluting VW diesel vehicles. U.S. District Judge Charles Breyer, who had ruled in the case in 2018, noted at the time that "the potential penalties could reach $30.6 million per day and $11.2 billion per year."
Volkswagen vowed to seek further review by the 9th Circuit or the U.S. Supreme Court if necessary, saying the ruling conflicts with the findings of other courts. "Those other courts rightly recognized the chaos that would ensue if thousands of localities can regulate manufacturers' updates of their software systems, which are an inherent feature of modern vehicles and, in this case, reduced emissions," Volkswagen said.
Volkswagen has admitted to using illegal software to cheat U.S. pollution tests in 2015, allowing up to 40 times legally allowable emissions. This triggered a global backlash against diesel vehicles that has so far cost the automaker 30 billion euros ($33.3 billion) in fines, penalties and buyback costs.
Source: Reuters
FCA SAYS ALMOST 90 PERCENT OF NA HOURLY WORKFORCE NEARLY BACK ON JOB
Fiat Chrysler Automobiles says almost 90% of its hourly workers in North America are back on the job this week. The automaker released a breakdown this week of the return to work following the lengthy manufacturing shutdown caused by the coronavirus pandemic. The company said 48,145 of 54,940 hourly workers, or 88%, have returned to work in the United States, Canada and Mexico.
Source: Detroit Free Press
GM EXPECTS TO EMERGE FROM PANDEMIC WITH LOWER COSTS
General Motors should emerge from the coronavirus pandemic with a permanently reduced cost base after it scrambled to reduce its cash burn to withstand a two-month shutdown in North American production as part of efforts to halt the spread of COVID-19, CEO Mary Barra said Tuesday. "We were quickly able to take out significant costs and we are being very conservative about what costs we turn back on," Barra said during an investor event with Credit Suisse. "I believe we will come out of this with a lower cost structure that is permanent."
Barra said those permanent cost reductions could include fewer vehicle platforms and reducing the complexity of those platforms to be more focused on producing the versions consumers want most. She said that the pandemic had given GM the opportunity to go through all of its line item expenses and eliminate redundant processes. "We've found things that we don't need to do and things we can do more efficiently," Barra said.
The U.S. automotive industry has been ramping up after the coronavirus shutdown, and major automakers have been keeping a close eye on suppliers in Mexico to see the pandemic disrupts the flow of parts. Barra said if there are problems in GM's supply chain, the automaker will focus on diverting parts for its popular, highly-profitable pickup trucks.
Source: Reuters
WALMART CLOSING ITS TIRE, LUBE AND EXPRESS BUSINESSES ACROSS CANADA
Walmart says it will begin closing its Tire, Lube and Express businesses in stores across Canada. An email from corporate affairs director Adam Grachnik says the move will allow Walmart to accelerate online growth while continuing to deliver its "core business of food, consumables, health and wellness, fashion and general merchandise."
However, it says some of Walmart stores will continue to have a partnership with Mr. Lube.
The email says 106 stores Canada-wide and approximately 550 employees will be affected.
It says Walmart is attempting to minimize job losses and that it expects to retrain the vast majority of those employees.
Source: the Canadian Press
LOW INTEREST RATES
If automakers report better-than-expected results for new vehicle sales in May, the interest rates buyers got may be the primary reason, coming in at their lowest level in seven years. The annual percentage rate, or APR, on new financed vehicles averaged 4% last month, according to Edmunds.com, which was a bit of a drop compared with the 4.3% average buyers were charged in April. However, it's a marked difference compared with the rate from the year-ago period of 6.1%. May's 4% rate is the lowest average interest rate since August 2013, and the third lowest Edmunds has on record dating back to 2002.
Source: The Detroit Bureau
AUTO DEALERS' NEW CHALLENGE: DISINFECTING MOVING INVENTORY
Long after social distancing and the wearing of personal protection equipment becomes a memory (soon, we pray), consumer alertness to microbial dangers will remain active, redefining how auto retailers and their customers view and interact with inventory. It's one thing to disinfect horizontal surfaces, another to clean vehicles every time one returns from a test drive or a porter moves one off a transporter. A dealer's inventory now becomes a moveable risk. It's a safe bet no auto dealer ever thought he or she would also be in the vehicle disinfection and personal safety business, as the COVID-19 pandemic has forced upon the industry. But most companies – and especially car dealers – are now in it for the long haul.
Source: WardsAuto
CAR DEALERSHIPS SORTING OUT ONLINE SALES BEST PRACTICES
Online dealership vehicle sales and their associated home deliveries have become a relatively popular purchase alternative in the age of COVID-19. But the auto-retailing industry is still working on best practices, which, among other things, include safeguards against getting ripped off by Internet scammers. But less-risky issues need sorting out, too, such as establishing a delivery process, executing it without burning up excessive time and miles and designating who makes the runs.
Source: WardsAuto
FORD SHOWS A WILD, MASSIVE MUSTANG WINDSHIELD IN PATENT DRAWINGS
Patent drawings reveal a new windshield design that effectively covers the entire top panel.
It looks like replacing your next-generation Ford's windshield might set you back a pretty penny. That is, if Ford brings the windshield shown in its recent patent filings into production. The new patent, shown on a Ford Mustang, describes what Ford calls a "vehicle roof bow" that separates the windshield and the rear glass panel. You might think: That's just called a top. And, you'd be technically correct, but the top has shrunk dramatically because of the expansive windshield.
The new windshield looks similar to Tesla's windshield on the Model X, save for the added structure of the roof bow. Essentially this windshield design eliminates the need for a panoramic sunroof because it's baked into the windshield.
It's hard to say what vehicle this new windshield design would launch with, but considering the patent drawings clearly show a Mustang, the next-gen Mustang might be a good candidate. We hope Ford at least digs into its archives and brings back the Skyliner badge for the radical design.
Much like the V10-powered Mustang we tested earlier this year, there's always a chance that this patent never sees production. Though, with designs continually pushing barriers of available technology, we wouldn't be shocked to see a Ford with this design sometime in the next few years. Until then, you can head to the Mach-E Club to check out more of these patent drawings.
Source: Autoweek
Originally published by Crowe MacKay, on June 2020
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