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.
1st Gear: Damn Infotainment Systems
On the heels of Consumer Reports ranking Audi the best all-around brand, J.D. Power has released its own dependability study, and one that puts General Motors and Toyota at the top of the list. Why? Among many reasons, it would appear those companies have the least-infuriating nav, voice and infotainment systems, now the top complaint among consumers, reports Bloomberg:
The study, released Wednesday, is a benchmark watched by automakers and consumers. J.D. Power again cited technology issues as the industry average rose to 152 problems per 100 vehicles, from 147 a year earlier. Infotainment, navigation and in-vehicle communications systems now account for 20 percent of all issues reported by customers, the firm said in a statement.
“In the context of conversations around autonomous vehicles, the industry clearly has more work to do to secure the trust of consumers,” Renee Stephens, vice president of U.S. automotive at J.D. Power, said in the statement. “If consumers can’t rely on their vehicle to connect to their smartphone, or have faith that their navigation system will route them to their destination, they’re certainly not yet ready to trust that autonomous technology will keep their vehicle out of the ditch.”
I’m not sure I agree with that correlation since the technologies are so different, but yes, infotainment systems do suck.
2nd Gear: Are GM And Ford Vulnerable?
One of the reasons Wall Street hasn’t warmed up to the Detroit automakers the way it has to tech companies is a fear among analysts that a possible economic downturn in the near future could undo everything achieved since the Carpocalypse. One Morgan Stanley analyst puts GM and Ford more at risk in a recession than the companies would like to admit, reports Bloomberg (via Automotive News):
The two companies would break even in a U.S. auto market of about 13 million or 14 million vehicles, analyst Adam Jonas said in a note. GM and Ford have said they can avoid losses even if U.S. sales fall to 11 million vehicles or lower.
The level at which profits might evaporate is a vital point for the two automakers, which have been telling investors they can weather even a steep downturn like the financial crisis of 2009, when U.S. sales slid to 10.4 million. Investors will have more faith in the U.S. carmakers if they can show that they are able to stay in the black during a downturn, which Jonas has now called into question.
“We are encouraged by their focus on managing risk in the most profitable and healthy auto market today,” Jonas said in the note, adding that he is skeptical about their ability to break even in a downturn because “pricing typically comes under pressure as automakers must rely more on discounting.”
3rd Gear: What’s Up With The Volkswagen Lawsuits?
Volkswagen still hasn’t gotten the EPA to sign off on a fix for its cheating diesel engines, and it also faces a barrage of lawsuits. Here’s where we’re at on those, via Reuters:
A U.S. federal judge will hold a hearing Thursday that may offer the first details on any progress in settling over 500 lawsuits filed against Volkswagen AG, a top supplier and many current and former top executives over excess emissions in 580,000 U.S. diesel vehicles.
Late Monday, lawyers representing owners filed a consolidated 719-page complaint against VW, supplier Robert Bosch GMBH, which helped develop emissions controls, along with VW’s current and former CEOs and other executives, accusing them of racketeering, mail and wire fraud, among other misconduct. The plaintiffs are asking that VW be ordered to buy back vehicles that don’t meet emissions standards, and pay “significant” damages.
4th Gear: “Love,” “Haha,” “Wow,” “Sad,” “Angry”
Social media! You know the kids love it. And to make them hip to the new Chevy Malibu, GM is launching a super cool new video for “the Facebook crowd” to try and get them to “like” the car. Gosh! Via Automotive News:
The video, “From Like to Love,” zips through a range of videos and pictures ranging from hilarious to heartfelt that many users can relate to seeing on their Timelines. The one-minute video includes familiar Facebook subjects such as cute kids and pets.
The video closes with a quick demo of how to “Love” it.
Early in the campaign’s development last fall, Chevy’s marketing crew decided the Malibu was a midsize sedan that consumers could finally love, said Paul Edwards, Chevrolet’s vice president of marketing. The segment was full of options that people like, but Edwards said there was a dearth of lovable standouts.
From one guy who has to deal with this shit all the time, GM: I highly encourage you not to read the Facebook comments.
5th Gear: The Union Wants In At Volkswagen
Volkswagen may be in deep trouble right now, but the Chattanooga, Tenn. site where a midsize SUV is slated to be built is still a big deal. And the United Auto Workers union is still trying to make inroads there. Here’s an update from The Detroit Free Press:
The AFL-CIO’s Executive Council voted Tuesday to support the UAW’s effort to force Volkswagen to negotiate a contract covering 162 skilled-trades workers at its plant in Tennessee. The move gives the Detroit-based union a vocal ally.
“Volkswagen’s refusal to bargain is not only a reversal of its pre-election statements, but violates its own Declaration on Social Rights and Industrial Relationships,” the AFL-CIO said in a statement Tuesday.
Volkswagen employs about 1,450 hourly workers in Chattanooga, Tenn., where it builds the Volkswagen Passat. VW also plans to begin building a midsize SUV in Chattanooga later this year and it plans to gradually add as many as 2,000 plant workers.
They don’t give up easy.