Ford isn’t so sure about a vaccine mandate, car output in the U.K. is bad, and flight-shame. All that and more in The Morning Shift for August 26, 2021.
1st Gear: Buy Used? Buy New? Lease? Buy With Cash? Get A Loan? What Now?
The conventional advice to car buying is: Buy certified pre-owned, for the warranty. Only do a loan if you get a good rate. Buying new isn’t always a rip-off with the right incentives, or if a dealer really wants to move a new car that’s been sitting on their lot for way too long. (That’s going to be rare these days.) Also, leasing is a good option now! Still, The Wall Street Journal reports that car buying is, more than ever, unique decision after unique decision.
If you have the standard 20% down payment and will need a car, calculate how much it would cost to lease or buy including interest and fees. Start your decision process there, and be aware of the length of the loan. Some auto loans last as long as seven years, lowering monthly payments but dramatically increasing the total cost of a vehicle.
“Do the math, and figure out what that actually means,” says Stephanie Brinley, principal auto analyst at IHS Markit, a forecasting firm. “It really does come down to you and your personal finances and your personal situation and your personal vehicle needs.”
And leasing is a complicated proposition.
If you’re looking to lease a luxury vehicle, you’re more likely to find dealer incentives, says [Ivan Drury, an automotive analyst at Edmunds]. Luxury-vehicle lessees have a propensity for hopping from the hottest model to the next new thing, he says, and dealerships make it easy to do so. For example, 47% of new luxury sedans were leased in July, according to Edmunds.com.
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If you’ve decided to lease a vehicle, make sure you read the fine print. If you know you will go over the contracted mileage limit, do the math again on whether the extra cost to increase the limit or pay the penalty makes leasing the less attractive option.
Consumers looking at leases should “think pretty hard about what their work situation might be like in the next three years,” says [Tyson Jominy, vice president of data and analytics J.D. Power]. He adds that during the pandemic the standard yearly limit of 12,000 miles for most leases has dropped to 10,000.
“I would caution about these ultrashort leases that most consumers are now getting, probably believing that they’re not going to be driving very much for the next three years, and that’s a really long time,” Mr. Jominy says.
It seems like the people best-positioned right now are those whose leases are ending and they have the option to buy at a price that is lower than what the car might fetch in the open market. If that is you, well-played.
2nd Gear: Ford Is Pondering A Vaccine Mandate
Ford now says it won’t bring its white-collar workers back to the office until January, and is also considering whether or not to mandate the vaccine. Well, it’s waffling, really.
From Reuters:
Kiersten Robinson, Ford’s chief people and employee experience officer, said the company has not yet decided whether to join employers and government agencies requiring workers to get coronavirus vaccinations.
Ford has required vaccinations for employees who travel internationally for work. Robinson said the company is still assessing whether a broader mandate is appropriate, how employees would respond and how a vaccine requirement would be adapted to different countries.
“We want to understand the sentiment of employees. What’s standing the way of them getting vaccinated voluntarily,” Robinson said. Employee views - and the access Ford workers have to vaccines - vary around the world, she said. “It’s simplistic to have a one-sized fits all mandate.”
Ford has instituted mask requirements and other policies to limit the spread of coronavirus infections in factories and workplaces where employees cannot do jobs remotely. So far, Robinson said, there have not been major outbreaks at any Ford facilities.
Robinson’s point about the vaccine not being freely available in many parts of the world is well-taken, but a vaccine mandate in the U.S. — where the vaccine is freely available — seems like an obvious move.
3rd Gear: The UK Hasn’t Made This Few Cars Since The 1950s
For the month of July, at least, all due to the chip shortage and public health efforts to stop the spread of the pandemic.
From Reuters:
British car output fell to its lowest July level since 1956 as a global shortage of semi-conductor chips and staff having to self-isolate due to COVID-19 hit the sector, a trade industry body said on Thursday.
Volumes dropped by an annual 37.6% to 53,438 vehicles last month, according to the Society of Motor Manufacturers and Traders (SMMT), which also blamed the timing of summer factory shutdowns.
The U.K. has been having a so-called “pingdemic” as of late, in which residents have been told via app to isolate after coming into close contact with someone who tested positive for the virus.
4th Gear: Flight-Shame
The Wall Street Journal says that sleeper trains in Europe are back, baby. This is for the reasons you might expect — flying is a pain in the ass, so is driving to the airport, so is parking your damn car at the airport, etc. — but also because of a reason new to me: “flight-shame.”
In the past two years, Europe has witnessed a revival of sleeper trains both from state-run rollers such as Austria’s ÖBB, which operates 19 Nightjet routes and seven Euronight trains as a partner, and a new crop of privately operated trains like the Alpen-Sylt Nachtexpress, which in July started service between the North Sea and the Alps. Sleeper trains are currently in operation in Poland, Russia, Italy and Scotland, among many other European countries, and new routes are opening all the time.
The driving force? Much of it before the pandemic was fueled by European flygskam (flight shame) about the carbon footprint of short flights, and weekly climate-change protests in many European cities.
“The flight-shame in Europe was real,” says Joe Herger, who operates a hiking company, The Alps by Joe, in Switzerland. “People really called you out if you expressed a desire to take a short flight within Europe. I still love to fly, but in many instances, European trains are easier to use for shorter distances and definitely better for the environment.”
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“Everyone wants to avoid the hassle of getting to/from suburban airports, exhausting check-in-procedures and highways clogged with traffic,” says Meike Quentin, director of communications and marketing at Alpen-Sylt Nachtexpress, which is run by the German unit of Pittsburgh-based Railroad Development Corp. “Also, with sleeper trains you use your night for traveling, and save money by not spending on a hotel.” Alpen-Sylt Nachtexpress offers accommodations ranging from a private compartment to a single seat, at prices starting at about $34.
Trains in Europe are great, except if you are ever on one and in close proximity to young people. They are probably drunk, and I recommend moving far, far away.
5th Gear: Lordstown Motors Has A New CEO
Lordstown Motors is trying to stay afloat by any means necessary. Things seem real bad though, and its CEO and CFO both quit in June. Now it has a new CEO, who is named Daniel A. Ninivaggi.
From Lordstown’s release:
Ninivaggi is the former CEO of Icahn Enterprises L.P. (Nasdaq: IEP), a diversified holding company controlled by Carl C. Icahn, and has served in a variety of senior leadership positions in the automotive and transportation industries. He began his automotive career at Lear Corporation, ultimately serving as Executive Vice President, where he was responsible for, among other functions, corporate development and strategy. He later held the positions of Co-Chairman and Co-CEO of Federal Mogul Holdings Corporation, an $8 billion supplier of powertrain, chassis, sealing, brake and other automotive components, prior to its sale to Tenneco.
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“I believe the demand for full-size electric pickup trucks will be strong and the Endurance truck, with its innovative wheel hub motor design, has the opportunity to capture a meaningful share of the market. With an absolute focus on execution, I look forward to working with the talented Lordstown management team, our suppliers and other partners to bring the Endurance to market and maximize the value of our assets,” said Daniel Ninivaggi, Lordstown Motors CEO.
Good luck, Daniel, you’re going to need it.
Reverse: This Was All A Mistake
I’m an old Millennial, the first generation that has no real memories of the Cold War, and, as such, I’ve only read about it. It seems more ridiculous with each passing year. For several decades two countries played a game of chicken with the highest stakes possible because they were mad about capitalism and communism or something? Tragic embarrassment all around.
Neutral: How Are You?
With vaccine mandate enforcement coming to New York City in September, we are approaching the end of This, at least here. In many other places, like Florida, they decided to stop trying a while ago, with disastrous results. I was walking back from work yesterday and overheard some guy on the street explaining to some other guy that pretty soon in New York you wouldn’t be able to eat at a restaurant or go to a movie without the vax and the other guy was like, “All right, fine,” and I thought, we’ll be all right.