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 know.

Advertisement

1st Gear: Decision Time

Saddled with the enormous costs of Dieselgate and attempting a huge multi-brand electric turnaround, the Volkswagen Group has some tough decisions to make. At least some of those will come at a board meeting on Friday, a meeting Reuters describes as “extraordinary” for the sheer volume of stuff that needs to be figured out, including cost cuts at successful and profitable brands like Audi and Porsche.

Advertisement

We’re already seeing VW chop unessential areas like motorsports—what’s next?

Management and labour leaders are seeking to agree on cost cuts and investments that will form part of the German carmaker’s efforts to revive its fortunes more than a year after the diesel emissions scandal broke.

Two weeks before the supervisory board is scheduled to ratify spending plans for the multi-brand group through 2021, the sheer number of issues facing the 20-member panel on Nov. 18 made the extraordinary meeting necessary, the sources said, adding no decisions were expected to be made.

[...] Herbert Diess, head of Volkswagen’s (VW) namesake brand, wants to cut annual costs at the troubled division by 3.7 billion euros ($4.11 billion) through 2021 in a so-called future pact with workers, sources familiar with the negotiations told Reuters last month.

But as the story notes, VW’s powerful “works council” labor group likely won’t be on board without cemented targets and goals.

2nd Gear: Fuel Economy On The Rise Again, Slightly

Sponsored

Pickup trucks may have negligible fuel economy gains thanks to their general embiggenment over the past few decades, but cars in general continue to become more efficient. And the national average is finally creeping up again despite the surge in truck, SUV and crossover sales as of late.

Via Automotive News:

Advertisement

Advertisement

After a brief stall, the auto industry saw fleetwide fuel economy improve last year despite continued growth in light-truck sales, according to new datareleased Wednesday by the EPA.

The average fuel economy of new light vehicles hit 24.8 mpg in the 2015 model year, up 0.5 mpg from 2014, when average fuel economy was unchanged from the prior year. The final 2015 fleet average was also 0.1 mpg better than what the EPA projected last year.

The agency projected that 2016 model year fleet fuel efficiency would rise to 25.6 mpg.

Nice.

3rd Gear: Everyone Is Wrong But Me

Advertisement

Elon Musk has faced a great deal of skepticism from investors and analysts over his move for Tesla to acquire SolarCity, not the least of which was concern over the fact that SolarCity’s CEO is Musk’s cousin. But on Tuesday, Musk blasted the “naysayers” who he claims have always been wrong about Tesla, and said SolarCity will pay off within three years. Via Bloomberg:

While people once questioned the company’s ability to make electric cars, the surge of interest in the forthcoming Model 3 means “no one should doubt that anymore,” Tesla said in a blog post after the market close on Tuesday. “Those same naysayers may have similar feelings about solar and storage, but it probably would be unwise to trust them again.”

SolarCity will add $1 billion in revenue to the combined company in 2017 and $500 million in cash to Tesla’s balance sheet over the next three years, Tesla predicted. Musk sees the merger as creating the world’s only integrated sustainable energy company, with consumers able to buy stylish electric cars, solar roofs and home batteries in a seamless transaction.

“Quite a few naysayers from big hedge funds” have been wrong in the past with a “batting average of zero,” Musk said on a later conference call with analysts, while mentioning no one by name.

We shall see!

4th Gear: Building Up EV Infrastructure

Advertisement

Advertisement

EV sales have been weakened by cheap gas, but charging infrastructure remains an issue, especially given Americans’ driving habits. We think in terms of filling up at gas stations, not charging, like we do for our devices. The White House is taking steps to add more places to charge your EV, however, in a new big infrastructure push. Via The Detroit News:

President Barack Obama’s administration is moving to accelerate the development of electric cars by establishing 48 national electric vehicle charging corridors on U.S. highways that will cover nearly 25,000 miles in 35 states and Washington, D.C.

The White House said the charging corridors, which will be managed by the Federal Highway Administration, will “ensure that electric vehicle drivers have access to charging stations at home, at work, and on the road — creating a new way of thinking about transportation that will drive America forward.”

The Obama administration said the move to boost the number of charging stations for electric cars is evidence that it “is committed to taking responsible steps to combat climate change, increase access to clean energy technologies, and reduce our dependence on oil.

It’s a start.

5th Gear: Pacifica Output May Be Thwarted By Strike

Advertisement

And up in Canada, a supplier to both General Motors and Fiat Chrysler may go on strike, halting production of the Pacifica minivan and other models. Via Automotive News:

Integram (Magna) Seating, a key supplier to General Motors and Fiat Chrysler assembly plants in Canada, faces a strike deadline today over a new wage and benefit contract with union workers at a Windsor, Ontario, parts factory.

About 1,000 members of Unifor Local 444 are set to strike Integram at 11:59 p.m. ET today.

A work stoppage at Integram would likely halt production at Fiat Chrysler Automobiles’ Windsor assembly plant and General Motors’ CAMI assembly plant in Ingersol, Ont.

Both automakers rely on just-in-time delivery of 1,500 seats and 10,000 “foam buns” that Integram produces in Windsor every day.

FCA makes its popular minivans, the Chrysler Pacifica and Dodge Caravan, at its Windsor factory while GM assembles the Chevy Equinox and GMC Terrain at the CAMI plant.


Reverse: Tunnel!

Neutral: What Is To Be Done At Volkswagen?

Advertisement

Advertisement

What must the company do to secure its financial future?