Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place at 9:00 AM every weekday morning. Here are the important stories you need to know.
1st Gear: Sergio Hasn’t Given Up Trying To Take Over GM
Since apparently Fiat Chrysler boss Sergio Marchionne’s love letter to General Motors’ Mary Barra didn’t work, he’s instead resorted to recruiting hedge fund investors and other activist investors to push GM into a merger with his company, the Wall Street Journal reports.
His pursuit of outside investors is only the latest move in Mr. Marchionne’s drive to find a partner for the Italian-American auto maker, which logged $108 billion in sales in its most recent fiscal year. But contacts with activist investors—only months after GM agreed to hedge fund demands to buy back billions of dollars in stock—have yet to land a patron, these people said. A similar strategy could be employed with at least one European auto maker, they added.
Marchionne thinks individual automakers waste too much money making their own parts and technology when they could (theoretically) save billions by consolidating. Too bad nobody wants this to happen except him. STOP TRYING TO MAKE GM-FIAT CHRYSLER HAPPEN, SERGIO.
2nd Gear: An Electric BMW SUV Made In America?
The Germans may pretend to be like “I don’t know her” when it comes to Tesla Motors, but I do think they’re at least somewhat envious when it comes to electrified luxury vehicles.
So just in time for the Model X’s debut, BMW is reportedly planning an electric SUV for their i sub-brand to be built in Spartanburg, South Carolina along with the other X-vehicles. So sayeth a German business magazine report cited in Automotive News:
The electric crossover would be the third model sold under BMW’s i brand, joining the i3 electric hatchback and i8 plug-in hybrid sports car. The i3 and i8 are built in Leipzig, Germany.
Arndt Ellinghorst, head of global automotive research at Evercore ISI, said in an investors note: “In our view an iSUV makes perfect sense for BMW. SUVs are in demand and given the market’s reaction to Tesla’s Model X so far, it seems to be a good fit for families and suburban commuters.”
BMW officials, for their part, called the report “speculation.”
3rd Gear: Hyundai And Kia To Cut Back
Amid our national car sales boom, Hyundai and Kia profits have been slowing down a bit as of late. There’s several reasons for this, including a strong South Korean won and a lack of interest in its SUVs in China. As such, the automaker is seeking to cut costs as much as 30 percent, according to Bloomberg:
“The first thing they can cut would probably be costs related to sales, marketing and advertisement,” said Shin Chung Kwan, an analyst at KB Investment & Securities Co. “The current situation, and their efforts to cut costs, will also give them the power to have a say when negotiating terms for other costs that can be incurred, such as auto-part prices and workers’ wages.”
4th Gear: Is Auto Braking The Next Big Safety Requirement?
Collision-avoidance systems, which automatically brake if the car detects an imminent front wreck, are becoming increasingly common as options on all sorts of cars. And if the National Transportation Safety Board gets its way, it could be required equipment in a few years. From The Detroit News:
Since 2012, the NTSB has asked the National Highway Traffic Safety Administration to mandate new safety technologies in all vehicles, which could dramatically reduce the number fatalities caused by driver distractions. But the auto safety agency hasn’t agreed to do so.
“You don’t pay extra for your seat belt,” NTSB Chairman Christopher A. Hart said on Monday. “And you shouldn’t have to pay extra for technology that can help prevent a collision altogether.” He called the board’s report released Monday a “wake-up” and urged automakers and NHTSA to work together to speed adoption.
Having experienced more than a few “false positives” when testing new cars with this tech, I’m not convinced it’s ready for prime time yet. Looks like it won’t be going anywhere though.
5th Gear: Get Your Recalled Cars Fixed, People!
One major hurdle automakers have faced in this age of the epic recall is that drivers with the affected cars often don’t get them fixed. Recall participation rates fall between 15 and 75 percent depending on the age of the vehicle, leaving potentially unsafe cars on the road.
So automakers want the National Highway Traffic Safety Administration to do a huge advertising campaign to push owners to fix their damn cars. One more from The Detroit News:
In a joint letter, the Alliance of Automobile Manufacturers and Association of Global Automakers asked NHTSA Administrator Mark Rosekind to launch a “intensive public awareness campaign about the importance of recall participation by consumers.”
The groups, which represent all major automakers, said the campaign should be modeled on the “Click it or Ticket” or “Over the Limit — Under Arrest” campaigns. NHTSA had an $8 million budget for its two-week May seat belt use advertising campaign on cable, TV, radio and the web.
It can’t hurt. Based on all the reporting I’ve done on recalls over the last few years, few buyers even know how to find out if their cars have been recalled and what to do if they are.
On this day in 2006, the animated feature film “Cars,” produced by Pixar Animation Studios, roars into theaters across the United States.
Neutral: How Do You Get People To Fix Their Recalled Cars?
It’s important, but is an ad campaign the answer?
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