This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place at 9:30 AM. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?
1st Gear: What About The Taper?
Right now, the Federal Reserve has this program called QE3, or quantitative easing. Basically, each month the Fed is purchasing $85 billion in bonds which is then supposed to help kickstart the economy that has been lagging for quite a while.
What QE3 has done is increased subprime auto lending. Remember subprime? Yeah, those are loans that sent the housing market into a wild tailspin. What it means is that people who normally wouldn't be eligible for a loan can put a little down to get a lot back to make a big purchase. One example has a man with a bad credit history putting down $1,000 to get $10,000 to purchase a car. Then a few months later he went bankrupt due to a number of personal issues that meant he couldn't pay the loan. It's been called a "micro-bubble," so smaller than the housing bubble, that could burst and be a major issue for the economy.
There is talk that the Fed will announce a "tapering" of this program, with a reduction to possibly $75 billion instead of $85 billion. What does this mean for autos? Well, for one, fewer risky loans. That's a good thing since it will curb the possibility of a major crisis down the line. It could also mean a slow down of some auto sales, which is bad.
But in the end, it's probably better to get the cars to the people who can afford the loans than people who will default. Then a lender bubble bursts and then nobody can get cars at all. That sounds worse to me.
2nd Gear: UAW Hates Two Tiered Wages
New autoworkers are paid less than experienced auto workers. As you'd expect, the union that represents the autoworkers doesn't much care for this.
They want their workers to paid at the levels of non-union plants in the US, which the UAW says they also need to organize in order to have a chance to eliminate tiers in the next negotiations with the automakers. Right now, entry level workers make between $16 and $19 per hour, with veterans in the $28 range.
It's going to be a tough round of negotiations.
3rd Gear: GREAT NEWS!!!
Dacia is on the rise throughout Europe. I know, we're all excited, especially James May. Sales of Renault's Romanian low-cost automaker have made gains of more than 20 percent in the last year in Europe. That makes it the automaker with the fastest growth, even better than Jalop-darling Mazda.
Could we get a Sandero? Jeez, don't get me too excited. That'd be the best news ever.
4th Gear: Exports Are Good
In unsurprising news, auto exports from America to China are a boon for the shipping business. Our auto exports have seen a steady rise for the last couple of years, with growth again shown through the first 10 months of 2013. It does mean that shipping is in demand (good for them) which means shipping costs will rise (good for them, not as good for others).
5th Gear: Prius Prius Prius Prius
Want a car that's going to save you money? Well, I'm sorry to say that your best choice is the soul stealing Toyota Prius. Yep, Consumer Reports has named the Prius the best value car you can buy.
Cost of ownership of the Prius is just $0.47 per mile, which is pretty damn impressive. Too bad you'll be bored out of your mind the whole time. If you want to get a bad value, why not get a Nissan Armada? It costs a full $1.20 per mile to operate. That's no va bene.
On this day in 1968, the musical film "Chitty Chitty Bang Bang"opens in New York City. The movie featured Dick Van Dyke, who had made a splash four years before in the Disney musical "Mary Poppins"and whose eponymous TV show had been a hit since 1961. Its real star, however, was Chitty Chitty Bang Bang herself: a magical flying car that always knew how to save the day.
If the Fed tapers, what happens to auto sales?