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: It’s All About Emissions
Yesterday Ford announced a huge $4.5 billion investment in hybrid and electric cars, even while cheap gas prices have sent demand for those vehicles plummeting. Still, Ford and other automakers are facing some tough emissions and fuel economy requirements in the coming decade, and electrification is one way to meet them, reports Bloomberg:
The automaker will add 13 electric cars and hybrids by 2020, rising to 40 percent of its lineup from 13 percent now, Chief Executive Officer Mark Fields said Thursday at a press conference in Dearborn, Michigan. The plans include a new Focus Electric car with fast-charge capability, Ford said.
“We’re going to see more and more companies invest in electrified vehicles because at the moment there’s some very stringent 2025 emission standards,” said Michelle Krebs, senior analyst at AutoTrader.com. “The way to get there is using electrification. It’s a significant investment, but it’s the way the industry is moving forward.”
2nd Gear: The Proposed DuPont-Dow Merger Matters To Cars
The big story in the business world this morning is the proposed merger between Dow Chemical and DuPont, two historic manufacturing giants that have struggled in recent years. Their merger has less of an antitrust concern than you might expect, but both have a big role in the world of cars, reports Bloomberg/Automotive News:
The merger, the largest ever in the chemicals industry, will combine products from both Dow and DuPont in the areas of agriculture, commodities chemicals and specialty chemicals to create the new businesses. It comes after two years of pressure from activist investors who argued that shareholders of both companies would realize greater value if they were broken up.
Both companies have a major presence in the automotive supply chain. DuPont’s automotive unit ranks No. 64 on the Automotive News list of the top 100 global suppliers with estimated worldwide sales to automakers of $3 billion in 2014. The company produces a variety of polymers, composites, chemicals and bio-based fuels for automakers.
Dow Automotive ranks No. 72 on the list, generating $2.8 billion in business with automakers last year. The company produces various adhesives, foams and industrial fluids for automakers.
3rd Gear: VW Began Working On Diesel Cheat Ten Years Ago
There were a lot of moving parts to Volkswagen’s mea culpa press conference yesterday. One key fact that came out was that the company started way back in 2005 to develop a way to circumvent U.S. emissions standards, since engineers couldn’t figure out how to make the diesels pass the tests. Via the AP:
In an update on the company’s investigation in the case, Chairman Hans Dieter Poetsch said engineers in 2005 were unable to find a technical solution to U.S. nitrogen oxide emissions within their “time frame and budget” and came up with the software that manipulated results when lab testing was done.
Later, when a technical solution became available, it was not employed, Poetsch said.
“We are not talking about a one-off mistake, but a whole chain of mistakes that was not interrupted at any point along the time line,” he told reporters at Volkswagen headquarters in Wolfsburg, Germany.
The second paragraph up top is key for me. What is that “technical solution,” and can it be employed now?
4th Gear: BMW Passes The Test
So far, at least officially, only Volkswagen Group cars have been found to be circumventing emissions standards. And the Environmental Protection Agency and California Air Resources Board just gave the stamp of approval to the BMW X5 diesel for sale as a 2016 model, reports Reuters:
In September, U.S. environmental regulators and Transport Canada announced they would review all current diesel passenger cars, trucks and SUVs for sale to ensure that they did not have “defeat devices.”
EPA spokeswoman Laura Allen said Thursday that the agency - along with California and Canada - was doing additional testing before approving new diesel vehicles. “Our screening tests found no evidence of a defeat device in the 2016 BMW X5,” she said.
BMW said late Thursday it had delayed the start of production of the diesel X5 - known as the X5 xDrive35d - until EPA testing and certification were completed.
5th Gear: Jaguar Land Rover Invests Big In Central Europe
Via Reuters, here are some details on Jag Land Rover’s big new car plant in Slovakia:
Luxury carmaker Jaguar Land Rover (JLR) confirmed on Friday it will build a car plant in Slovakia, beginning a 1 billion pound ($1.5 billion) project which will be one of the biggest ever foreign direct investments in the central European nation.
The company, which is rapidly expanding its model line-up and volumes, had said in August it aimed to build a plant at the western Slovak town of Nitra with an annual output of up to 300,000 cars.
On Friday, JLR, owned by India’s Tata Motors Ltd (TAMO.NS), said it will begin constructing the site next spring with around 2,800 jobs created as production ramps up. “The new factory will complement our existing facilities in the UK, China, India and Brazil and marks the next step in our strategy to become a truly global business,” JLR CEO Ralf Speth told reporters after signing the deal with the Slovak government in Bratislava.
Reverse: No Lower Manhattan Expressway