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: Even The Small Cars Are High Tech Now
We didn’t pay a ton of attention to the new 2017 Hyundai Elantra because it was one of the least exciting cars to debut at the LA Auto Show. Or was it? The neat thing about Hyundai’s new compact sedan is the technology it packs: options like automatic braking with pedestrian detection, lane keeping, blindspot monitoring, an auto-opening trunk, and pivoting headlights.
It’s not alone, either. Via Automotive News:
Likewise, adaptive cruise control, first offered globally in 1999 on Mercedes-Benz’s flagship S-Class, will be available next year on a Nissan Sentra or Honda Civic costing roughly $20,000.
Examples of that shift were visible everywhere at last week’s Los Angeles Auto Show, illustrating how quickly high-end technology is making its way into compact cars that were long conceived as cheap, basic transportation.
“These are things that customers have come to demand now,” Mike O’Brien, vice president of corporate and product planning at Hyundai Motor America, said in an interview. “If you talk to a customer who has never experienced a backup camera and gets one for the first time, they tell you they’ll never go back. Our job is to bring this technology down to an affordable level.”
That’s kind of amazing.
2nd Gear: VW’s ‘Constant Overspending’
You read on Friday and this weekend about cuts coming to Volkswagen in the wake of the increasingly costly diesel cheating scandal. But today, analysts say those cuts didn’t go far enough.
The company is cutting capital spending by $1 billion, including putting off renovations to a Mexican paint plant and delaying the next all-electric Phaeton. Could they have done more? Once again from Automotive News:
The VW brand already had announced annual cost cuts of 1 billion euros on top of the existing 5 billion euro efficiency plan introduced last year under then-CEO Martin Winterkorn. But analysts felt VW should have gone further.
“It reads as if management sees these cuts more as a necessity related to the current extreme challenges the company has navigated itself into,” Arndt Ellinghorst, Evercore ISI’s head of global automotive research, wrote.
Instead Ellinghorst believes the company needs to address its constant overspending in good times and bad; he said the modest cuts implied that no other part of the sprawling group other than the VW brand appeared to be reducing investments.
3rd Gear: UAW Contracts At Last
Finally, Ford and General Motors on Friday approved their new contracts with the United Auto Workers union, and everybody’s gettin’ a raise. Via Bloomberg:
Labor peace returned to Detroit after the United Auto Workers voted to approve new contracts with Ford Motor Co. and General Motors Co., wrapping up one of the most lucrative rounds of negotiations for the union after it offered concessions to help the Big Three U.S. automakers get through the recession and two bankruptcies.
In a narrow victory, Ford’s U.S. union workers voted to accept a four-year contract that included across-the-board raises, $9 billion in factory investments and $10,000 in bonuses per member. The deal was ratified by 51.3 percent of production workers and 52.4 percent of skilled-trades workers, the UAW said late Friday in an e-mailed statement.
“This agreement provides a good foundation for Ford Motor Company, our employees and our communities as we work together to create an even stronger business in the years ahead,” John Fleming, Ford’s Executive Vice President, Global Manufacturing and Labor Affairs, said in an e-mailed statement.
After months of negotiations, all of Detroit’s Big Three automakers now have new four-year contracts with the UAW.
4th Gear: No Sporty Stuff From Lincoln (Yet)
No, Lincoln is not getting the Mustang-platformed, EcoBoosted sport sedan or sports car you’re all wishing for. “Core segments first,” company officials told Automotive News:
What it apparently won’t have, at least anytime soon, is a rear-wheel-drive sports car that many fans of the brand have been hoping for.
“We’ve said we need to cover the core segments first,” Matt VanDyke, director of global Lincoln, told Automotive News at a private event here to show the freshened MKZ sedan. “Luxury coupes and sports cars are not the first place we need to go.”
In the near term, Lincoln is more concerned with updating its look. After years of tinkering with the split-wing grille drawn from the brand’s early years, Lincoln is dropping the polarizing design when the 2017 MKZ arrives next summer. In its place will be the more rectangular shape, filled with a repeating Lincoln star pattern, first seen in March on the Continental Concept.
The company plans to add two new vehicles by 2020, not including the Continental.
5th Gear: Tesla Recall? NBD
Diarmuid O’Connell, Tesla’s vice president of business development, said the recall announced Friday was prompted by a customer in Europe whose belt did not attach properly and the carmaker is taking action because safety is paramount.
“Our North Star for these things is what’s right for the customer,” O’Connell said following a speech at the Automotive Press Association in Detroit.
Tesla stock fell on the news, but rebounded as the day progressed to close at $220.01, down $1.79.
O’Connell also said not to expect anything big from Tesla at January’s Detroit Auto Show:
The executive was not aware of any plans to do anything big at the North American International Auto Show in Detroit in January. “If you are trying to sell cars, it makes sense,” he said. “But in Michigan we can’t legally sell cars.”
Reverse: Elvis Made The Best Movies
Neutral: What’s Next To Trickle Down To Small Cars?
More autonomous tech, probably. But what else?
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