A look into GM’s electric vehicle onslaught, PSA and FCA need to figure out China, Tesla is allegedly not reporting workplace injuries properly, coronavirus is having serious effects on Jaguar Land Rover, there’s a possibility of a government takeover of the UAW—all this and more in The Morning Shift for March 6, 2020.
This week, General Motors announced a new “skateboard” electric vehicle platform—one that we pointed out isn’t dissimilar to one the automaker pioneered two decades ago.
On Wednesday, the company apparently hosted a “high security briefing” at its Warren Technical Center, unveiling 11 new electric vehicles all at once. The Detroit Free Press was there to scribble down some nuggets of info on GM’s EV plans, which involve selling over 1 million EVs by 2025.
The news site writes that among the 11 vehicles shown—10 of which were physically present, and one of which the Free Press says was just a rendering—were three “dramatic” Cadillacs, two Buick SUVs, four Chevys, and “the first two GMC Hummers.” (This last quote has me wondering how many of these GMC Hummers are coming.)
The Detroit Free Press provides a quick summary of what each new EV will look like, saying the Celestiq (not Celestique) will be an expensive, four-door Cadillac with “a long nose, expansive four-seat passenger compartment, fastback and short rear overhang” while the Lyriq (not Lyric)—slated to hit production in 2022—will be a four-seater luxury Cadillac SUV similar to an XT5. It gets a 34-inch-wide high-def screen in its interior, which seems pretty huge.
The third EV Caddy presented was an Escalade-sized SUV. A three-row vehicle, GM presented a machine with “high-def screens that literally stretch along the dashboard the full width of the car, from pillar to pillar,” the Detroit Free Press writes. It sounds like GM is upping its screen size game on its future EVs.
Things get especially exciting when the Detroit Free Press mentions a GMC Hummer SUV and pickup, with the latter having removable roof panels that fit into its frunk. From the news site:
The crew cab Hummer sport truck will have removable roof panels that can be stowed in its front trunk, where the engine would go in a conventional SUV. The pickup has a five-foot bed and go into production in late fall 2021. Its wheelbase is 9 inches longer than the SUV.
Speaking of pickups, Chevy showed off a rendering of an EV truck, too. From the article:
...the full-size pickup will complement the Silverado, Chevy’s best-selling vehicle. It’ll also compete with Rivian’s upcoming pickup, though the Chevy is more likely to be a working vehicle than the luxury Rivian, which is seen more as an accessory for luxury lifestyles and outdoor vacations.
It’s slated for production in 2025.
Slightly less exciting than these are two small Chevy EVs that will apparently hit the market in mid 2021. One is five inches longer than the Bolt, and has a long, level roof (which sounds wagon-y?). Then there’s a midsize Chevy SUV that’s about the same size as the Chevy Blazer and shares that crossover’s “design flair.” Here’s how the story describes it:
It had a low roof, long doors and big wheel wells. Like the other EVs, it will have a larger touch screen than most current vehicles, but smaller than those in the Cadillac, Buick and GMC Hummer models.
Also shown were two Buicks with “sleek, vaguely European looks.”
2nd Gear: PSA And FCA Are Going To Have To Put Their Heads Together To Compete In The Chinese Car Market
French auto giant PSA is in the process of merging with Fiat Chrysler, with the deal set to be finished in 2021. Among the big-ticket items that the two will need to tackle together, figuring out the Chinese market rises to the top.
Both parties have been struggling there lately, with Reuters saying PSA sales dropped by 55 percent in 2019 “due to fierce competition from local rivals.” Total sales in 2019 was 117,084, though capacity in China is, per the story, 1 million. Fiat Chrysler, too, has seen a similar drop, percentage wise, in sales between 2018 and 2019.
That’s bad, and Peugeot’s CEO knows it. From Reuters:
Peugeot boss Carlos Tavares said on Friday PSA and Fiat Chrysler (FCA) will need to review their strategy in China in order to boost sales after the closing of the merger between the two groups.
“We are in China to stay, we need to find a formula in order to succeed,” Tavares said.
Back in April of 2018, we cited the Center for Investigative Reporting’s magazine Reveal, which wrote about how Tesla was allegedly underreporting workplace injuries in state and federal records. Now, a new story by Bloomberg reports that, per California’s OSHA division, Tesla failed to include all workplace injuries in its reports even after that initial Reveal story.
“The Cal/OSHA documents suggest the carmaker overstated the strides it was making in improving injury rates after reports by the Center for Investigative Reporting and others called attention to the issue,” the news site writes, before going on:
Tesla omitted hundreds of injuries that the company listed in logs at its factory from annual summary data that the company sends to the government, according to a memorandum the state’s workplace-safety agency sent in December. California’s Division of Occupational Safety and Health, or Cal/OSHA, also hit Tesla with a citation that month for failing to properly record other injuries in its logs since 2015.
The documents, some of which were obtained through a public-records request, undermine statements Tesla executives have made about its plant in Fremont, Calif. CEO Elon Musk dedicated a portion of an October 2018 earnings call to brief investors about workplace-safety efforts. He said Cal/OSHA had investigated the company and concluded it had not been underreporting injuries. Last month, Tesla said a review by the agency showed its record-keeping was 99 percent accurate.
The story goes on to detail the discrepancies:
In its December memorandum, Cal/OSHA said the 2018 summary data Tesla provided to the government was missing roughly three dozen incidents that were listed in its logs, or 4 percent of the total. For 2016, 44 percent of the incidents weren’t included.
The $400 citation Cal/OSHA issued that month was for 14 injuries or illnesses the agency said the company failed to properly record in its logs. Four of those that occurred in 2019, and the others were between 2015 and 2018. Tesla is appealing the citation, and the agency said it’s reviewing additional evidence the company has provided.
Cal/OSHA said in its December memorandum that disparities sometime arise when companies learn about incidents and add them to their injury logs after they’ve sent their summary to the government. But the agency said that when there are “significant numerical disparities,” a company should consider whether its processes are “adequate to verify accuracy.”
We’ve reached out to Tesla to learn more.
By now you’re likely aware of the years-long federal investigation into the United Auto Workers union and how its officials’ used members’ dues to fund lavish lifestyles and—per a recent lawsuit from GM—how those officials allegedly took bribes from Fiat Chrysler to give the automaker a leg up in contract negotiations. It’s pretty bad.
On Thursday, former president Gary Jones—whose house the feds raided last August and whom we wrote about back in November after he was charged by the executive board of the union for “submission of false, misleading and inaccurate expense records to the UAW Accounting Department and further [concealing] the true information concerning those expenses”—received charges from the government. From the New York Times:
Now prosecutors have taken aim at their biggest target yet, charging a former U.A.W. president with embezzlement of union funds. And they left no doubt that there may be more to come — possibly including a federal takeover of the union, a pillar of the nation’s labor movement.
In a criminal filing unsealed Thursday, the former president, Gary Jones, is accused of misusing more than $1 million of union money for extravagant meals, golf outings, cigars, apparel and other purposes over several years before his election in 2018.
The news site delves deeper into the charges, writing:
Mr. Jones faces two counts: that he diverted union funds to support spending that benefited him and other union officials, and that this embezzlement conspiracy resulted in tax fraud.
For example, the filing asserts that in 2017, Mr. Jones and others orchestrated the transfer of more than $500,000 in union funds to four resorts throughout the country, and that more than $290,000 of that amount went to illegitimate uses like meals and cigars. It says that this caused a U.A.W. official to unknowingly file a false tax form with the Internal Revenue Service omitting the $290,000 as reportable income to the union’s officers.
The times references prosecutors as saying Jones faces “five years in prison and up to a $250,000 fine for each of two counts.”
What’s equally as wild is the concept of the feds possibly managing the union—something that is apparently a real possibility, per the attorney running the investigation. From The Times:
But at a news conference in Detroit, the U.S. attorney overseeing the investigation, Matthew Schneider, said he could not rule out a federal takeover of the union. Another union faced with corruption allegations, the International Brotherhood of Teamsters, wound up under government oversight for a quarter-century.
Mr. Schneider alluded to that episode and said oversight could be a “good model here.” While he said it was premature to elaborate on that prospect, he declared, “We are another step closer to ridding the U.A.W. of its corrupt leadership and returning it to its hard-working members.”
We’ve been reading about Coronavirus’s widespread effects on the automobile industry (and on the economy at large) for weeks now. It’s hurting vehicle demand, vehicle production capability, and employee health.
The reduced demand in China is having especially deleterious effects on automakers’ bottom lines, and that includes that of struggling British brand Jaguar Land Rover, with Reuters quoting its parent company, India-based Tata Motors’ comments on Coronavirus:
The outbreak, which started in China and is spreading globally, has hurt sales in the world’s biggest auto market. The spread of the virus to South Korea, Japan, and Northern Italy is creating similar issues, Tata said in a statement.
“Recognizing the present situation is highly uncertain and could change, the reduction in China sales resulting from the coronavirus presently is estimated to reduce Jaguar Land Rover’s full year EBIT margin by about 1%,” it said.
“Suppliers in China are resuming operations but remain below full capacity,” Tata said, adding that JLR has managed to avoid potential parts shortages by working closely with its suppliers and with some increased use of air freight.
The story goes on to say that Tata was planning on a 3 percent profit margin for JLR in 2020, but, per the automaker, the outbreak could jeopardize this goal.
From Automotive Hall of Fame:
Upon visiting the Chicago Exposition in 1893 and seeing Gottlieb Daimler’s self-propelled carriage, King set about to build a horseless carriage of his own. And learning that New England’s Duryea Brothers, Charles and Frank, had already built and tested an automobile, King knew he had no time to waste. On March 6, 1896, ten years after Carl Benz patented the first gasoline automobile in Germany, and three years after the Duryea Brothers’ first vehicle, Charles King became the first driver of a gasoline automobile in Detroit. Ironically, King was followed by Henry Ford, who was riding a bicycle. It would be another three months before Ford would test-drive his first car.
General thoughts on The General’s thoughts?