Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to read because cars are the greatest oh yes they are the greatest.
1st Gear: FCA Gives Up
Fiat Chrysler Automobiles CEO Sergio Marchionne recently floated the idea of selling his company to Volkswagen, probably since everyone else rejected him first. This was news to Volkswagen, which rejected the plan with a righteous self-own. Now Marchionne told the Detroit News they’re not talking to VW or anyone else, and is finally going it alone:
“We need to be very careful that we don’t start unrealistic dreams about consolidation as we are on our way to achieve historically important results and a debt-free position,” Marchionne told investors in Amsterdam at the company’s annual general meeting. “We are not at a point of time to discuss any alliance.”
Marchionne said in March he expected an eventual approach by Volkswagen AG for a combination after PSA Group’s move to purchase GM’s Opel unit. He made clear today that no discussions are being held with VW, nor is he seeking a deal with Tesla Inc.
Good on you, FCA. You’re an independent company who doesn’t need a buyer.
2nd Gear: The Revolution Is Coming
Say what you will about GM, but it does seem to be among the leaders in its development of self-driving car technology (along with Tesla, Volvo, Mercedes, FCA/Google, and, uh, maybe Audi if you’re feeling exceptionally generous). Adding fuel to that fire comes 1,100 new jobs to develop self-driving technology in California, Reuters reports:
The automaker said it is investing $14 million in a new research and development center in San Francisco that will more than double its current space.
GM acquired Cruise Automation for $1 billion in March 2016 as part of its effort to build autonomous vehicles.
California gave GM $8 million in tax credits, and GM is investing $14 million in return. Not bad I suppose.
3rd Gear: Continental’s Getting Into Too
Continental, which doesn’t just make tires, is also getting into this whole hire-a-bunch-of-people-in-California-so-they-can-do-the-tech-things as well, with 300 new people in the state, Automotive News says:
Continental AG is expanding its footprint in Silicon Valley with the opening of a 65,000-square-foot r&d center in San Jose.
The site, which opened Wednesday, can hold more than 300 employees and is the first location to house all five of the supplier’s divisions. The facility will focus primarily on r&d, enabling cooperation among the supplier’s chassis and safety, interior, powertrain, tires, and rubber and plastics teams.
More jobs for more people is a good thing.
4th Gear: Volvo Is Making Absurd Amounts Of Money
The turnaround at Volvo has been astonishing, but even more incredible seems to be how much money it’s making. Automotive News has the numbers:
The company’s 2016 operating profit rose 66 percent to 11 billion Swedish crowns ($1.24 billion) and revenue increased 10 percent to 180.7 billion crowns. That helped improve the automaker’s profit margin to 6.1 percent compared with a 4 percent margin in 2015. In 2013, Volvo’s operating margin was just 1.6 percent. The goals for 2020 are even tougher: global sales of 800,000 vehicles and a profit margin of 8 percent.
It’s one thing for a car company to make money, but it’s another thing entirely for a car company to be profitable while it’s re-doing its entire lineup, investing in automation and electrification, and building a huge new factory in South Carolina. All of those are extremely expensive, so for Volvo to have actually increased its profit margins is good to see, and it all came after its acquisition by Geely. Volvo might be here for the long haul.
5th Gear: All The Stuff You Missed From The New York Auto Show