American Airlines flights booked to capacity in two days won’t be the only thing taking off, Ford has to try to launch its best-seller in quarantine, and the industry is in a panic now that they can’t market pickups to sports fans. All that and more in The Morning Shift for Monday, June 29, 2020.
Just as the federal government realizes pushing any governor who would listen to reopen their state at the first sign of a dip in COVID-19 cases was a horrible idea, as U.S. cases spike to a new all-time high while the rest of the world seems on the path to recovery.
Despite this, American Airlines will start operating flights back to capacity as early as two days from now, on July 1, which seems not particularly smart:
Notifications to customers booked on more crowded flights
As more people continue to travel, customers may notice that flights are booked to capacity starting July 1. American will continue to notify customers and allow them to move to more open flights when available, all without incurring any cost. This is in addition to the airline’s current travel waivers. Additional details regarding travel waivers can be found below and on aa.com/travelalerts.
If space is available once boarding is complete — taking into consideration any aircraft weight or balance restrictions — customers may move to another seat within their ticketed cabin subject to availability.
Flexibility for customers
American is providing customers additional flexibility for travel by extending its offer to waive change fees. This offer applies to tickets that meet the following criteria:
- Any ticket for travel through Sept. 30, 2020, will not incur change fees prior to travel. Customers must pay any fare difference, if applicable, at time of ticketing of the new fare. Fare rules may apply depending on the ticket.
- All AAdvantage® award tickets are included in this offer.
- Customers are allowed to change their origin and destination cities as part of this offer.
- Travel must be completed by Dec. 31, 2021.
Any situation in which an airliner is actively encouraging me to move away from as many people as possible, while still trying to convince me it’s okay to be in a sealed tube for hours on end, sounds like a sketchy situation. The only change now is that American basically cleans the airplane better than they used to before flights.
If we had trains, everyone could have compartments, and they could even open windows, etc.
After totally fumbling the new Ford Explorer launch after an overzealous plan for a rapid factory turnaround went wrong last year, Ford is now promising its new-gen F-150 launch will go way smoother, despite a global pandemic that potentially signals another six months of hell for Americans who want to keep breathing. From Automotive News:
To roll out the Explorer, Ford tore its Chicago Assembly Plant down to the studs, rebuilt it in 30 days and tried to run three shifts of Explorers, Lincoln Aviators and Police Interceptors from the jump. It turned out to be a grave error.
The plant couldn’t get line speeds moving as quickly as intended, and some early builds had to be shipped to Michigan for extra quality checks. The stumbles contributed to a dismal final quarter in 2019 and likely cost longtime executive Joe Hinrichs his job.
Hau Thai-Tang, Ford’s product development and purchasing boss, told Automotive News nothing like that will happen with the F-150.
For starters, Ford doesn’t have to gut its pickup assembly plants in Kansas City, Mo., and Dearborn, Mich. The two-plant system also provides a hedge against early problems and allows for continued production of the current model in one plant as the other one ramps up.
Trucks aren’t having too hard of a time selling, but given the risk that a lot in the world can go much worse up until November, Ford really is going to wish it had a smooth Expedition launch to fall back on.
While many companies are still up in the air about what to with a massive workforce, some of which has been furloughed, isn’t working, laid off, or is currently working from home, some of those jobs just simply may never come back after a rigorous round of pandemic cost-cutting, Auto News reports:
Franchised dealers terminated or furloughed about 300,000 employees, or more than a quarter of the industry’s work force, during the first crushing months of the U.S. coronavirus outbreak, and about half of dealership jobs were reduced or altered in some way, recruitment technology firm Hireology estimates. Dealership employment started to rebound as states began easing stay-at-home restrictions and retailers leveraged federal Paycheck Protection Program loans meant to support payrolls.
But even as retail sales came roaring back in May and June, there is reason to believe the rush might be temporary. When will pent-up demand from consumers who stayed home in March and April subside? How badly will falling inventory levels for both new and used vehicles crimp sales? Improved productivity brought about by the acceleration of digital retailing and fears about spiking coronavirus cases also make many retailers hesitant to restore staffing to pre-virus levels, dealers and experts say.
The trends might trigger permanent changes to dealership staffing models. Some of the biggest dealership groups in the country, citing lower vehicle sales and success with digital channels, already have said thousands of their job cuts are permanent.
That’s a lot of retail workers who don’t know if they’re going to get their old job back. This is another very real, very tense game of wait and see.
Everyone knows Nissan has really been going through it for the last couple of years now, with an executive financial scandal, poor sales, fledgling design, and aging halo models that nobody really cares about anymore.
Its new goals to focus more on quality and not just market share may run into some problems, though, as 80 percent of Nissan marketing budget goes to sports-related properties, which aren’t playing right now.
From Auto News:
That’s a problem for auto brands, including Nissan. Sports is the largest area of Nissan’s annual media spend, the automaker said. Automakers spent nearly 80 percent of their sponsorship dollars on sports properties last year, according to consulting firm IEG.
Witherspoon: Commitment to sports remains
Allyson Witherspoon, vice president, marketing communications and media for Nissan North America, said it is too early to predict when major sporting events will return as an important marketing platform. But Nissan will be waiting.“Our commitment to sports will remain,” she told Automotive News. “We are having active conversations every single week with our different properties. We want to position ourselves to be in a conversation when major sports return.”
It is an inopportune time for Nissan to lose a key communications platform. The automaker is orchestrating a product offensive that involves updating about 70 percent of its portfolio by mid-2021.
Can’t wait for the automotive pivot to E-sports, where gamers are running over each other in Rogues in Fortnite, or something. I went to school for marketing, so that’s a real marketing idea. Phone line is open.
GMC claims its diesel offering in the GMC Sierra has led to a lot of “conquest sales,” or customers who ditched anther truck brand to buy a GMC. From Auto News:
Hitting a 20 percent take rate for the Sierra’s 3.0-liter Duramax turbodiesel, vs.10 percent today, will take some time, said Phil Brook, vice president of marketing for GMC. “We have to get a bit more awareness out there for how good our diesel is,” he said. But “we’re so confident and excited about this engine. I think it’s very doable.”
According to a March survey by GMC, more than two-thirds of Sierra diesel buyers were new to diesel engines — though not new to pickups — and more than half were first-time GMC customers.
That 20 percent take rate is an internal goal for GM, but the news here is the other numbers. If two-thirds of Sierra diesel buyers are new to diesel, and half of those are first-time GMC buyers, then one-third of diesel GMC buyers are conquest sales. That’s a good metric for a vehicle at high risk of getting canned at any moment.
If so, WHY?