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: Have You Ever Thought Of Maybe Used Cars?
In case you haven’t heard, we’re all poor now, with income inequality in the United States on par with Russia. In what absolutely must be unrelated news, 2018 is going to be a worse year for new car sales than 2017, Automotive News reports:
For 2017, light-vehicle sales are on pace to come in around 17.2 million, about 2 percent less than the record set last year. That would represent the industry’s first annual decline since 2009, officially ending its longest growth streak in a century.
How much further sales slide in the year ahead will depend, in part, on how aggressively automakers discount their vehicles to keep inventories manageable and showrooms busy. So far, many have been content to let volumes recede because transaction prices have more than compensated when it comes to a more important metric: profits.
Maybe if automakers would start selling Ladas, Americans would be able to buy some new cars.
2nd Gear: Uber To Sell Its Sub-Prime Leasing Business
One of Uber’s all-encompassing Big Tech Ideas was that Tech Will Save Us And Get Us All Into Cars Even If We Don’t Have Money For Cars Because We’re All Poor Now. Obviously, the first cornerstone in that idea was that now we’d be able to hail a taxi through an app. But another plank in that platform was the idea that Uber would be able to get people into leases even if they had terrible credit.
And while Uber said the idea was never supposed to be profitable, it’s apparently so unprofitable that Uber is ditching it, the Wall Street Journal says:
Uber Technologies Inc. has agreed to sell its U.S. subprime auto-leasing business to startup car marketplace Fair.com, people familiar with the matter said, bringing to an end the ride-hailing giant’s failed attempt to attract new drivers who lack regular access to vehicles.
Uber has been seeking a buyer for Xchange Leasing, as the unit is known, since this summer, when it decided to wind down the business after learning it was losing roughly $9,000 a car, 18 times more than previously believed. In September, the company said it would begin to shutter Xchange Leasing, affecting about 500 jobs, while also launching a sale process.
Reminder: trying to get sub-prime drivers into cars will get us all eventually.
3rd Gear: The Chevy Volt Might Be Dead Eventually In Five Years
The Chevrolet Volt has had a good run, lasting through two generations, but its time has come, five years from now. That’s because eventually GM is just going to start offering hybrid and electric everything (especially crossovers), Motor1 notes:
Rumors about Chevrolet discontinuing the Volt have been swirling around for years and now a new report indicates this might eventually happen in 2022. According to information by AutoForecast Solutions, brought to our attention by GM Authority, the automaker wants to shift its focus towards electric crossovers and utility vehicles, and this strategy is the key factor for Volt’s uncertain future.
A couple of months ago, it was rumored that General Motors is considering removing six passenger cars from its U.S. lineup by the end of the decade. One of them is the Volt, which is expected to be replaced by a plug-in crossover of some sort, or a completely electric vehicle.
I really am sort of okay with this. The Volt has always been... fine.
4th Gear: Even The Factories Ain’t What They Used To Be
JOBS! That’s what we say a lot, right, friends? But when we shout it from the rooftops, we tend to mean specific jobs. The job you can get without any sort of education. The job that pays well, despite that. The job that lets you live in the same town you’ve always lived in, no matter what. Factory jobs. But even factory jobs ain’t what they used to be, as this interesting feature from Reuters focusing on a single exhaust parts factory says:
Of course, robots have been in factories for decades. The difference now is that the machines are being linked together in networks that allow more oversight and control. At Columbus South, managers and engineers walk around with iPads that allow them to watch production levels in real time and even less-skilled workers have to know the basics of how to use computer drop down screens and entering data.
Leading the way onto the factory floor, manager Mike Galarno points to the front of one of the long production lines dotted with robots to a large video screen that tracks production in real time.
Workers are also making more money, but they have less time to spend it.
5th Gear: Strength Through Union, For Airplanes
Big corporations are generally not fans of unions, as unions enable workers to collectively bargain, and when you collectively bargain you have more leverage, and thus a better negotiating position. But that tactic is becoming increasingly popular between corporations themselves, and that’s especially true when it comes to buying airplanes, the WSJ reports. That’s because aircraft manufacturers like Boeing and Airbus offer discounts if customers buy planes in bulk – and if you can make a bigger bulk order by working together with other airlines, you can get a bigger discount:
Eager to boost returns on investment, airline executives are looking for ways to lower their biggest capital costs. One strategy gaining traction: working together to buy jets in bulk.
Four airlines linked to a U.S. private-equity firm in November struck the largest-ever group deal. The parent of British Airways and aviation companies linked to Chinese conglomerate HNA Group have tried similar tactics to secure bigger discounts from plane makers.
The strategy is adding to pressure on Airbus SE and Boeing Co. to trim their own costs so they can afford to cut customers a better deal. Airlines “are doing a better job at negotiating,” said John Leahy, Airbus’s longtime chief salesman. “That is frustrating to any supplier.”
Collective bargaining works.
Reverse: Preston Tucker
On December 26, 1956, the visionary carmaker Preston Tucker dies of lung cancer. He was just 53 years old.
I got to ride in a Tucker for Car vs. America with Preston Tucker’s grandsons. It was brilliant.
Neutral: What Did You Get For Christmas?
I got a 2002 Lexus IS300 Sportcross with 75,000 miles on it. Also, I bought it for myself. What did you guys get?