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: Car Sales Are Down!
The last few years have been marked by record monthly and annual new car sales, thanks to cheap gas, widely available credit and a ton of pent-up demand as the U.S. recovered from the recession. But logic dictates that demand can’t last forever, and this year new car sales have been plateauing. Now, they are down!
But only marginally so, according to USA Today. A year-over-year increase is now pretty much impossible, given current trends. If car sales remain on track to finish below last year’s amount of 17.6 million, it would be the first time since 2007 that sales have not risen. That was when the Great Recession happened and the world was very dark.
From USA Today:
For the first 11 months of the year, total industry sales were down 1.5%, putting a full-year increase essentially out of reach. PricewaterhouseCoopers projected full-year sales of 17.1 million vehicles, below last year’s 17.6 million.
The expected 2017 dip could mark the start of a longer slide. The National Automobile Dealers Association on Friday projected 2018 sales of 16.7 million vehicles, while Autotrader.com and Kelley Blue Book projected 16.6 million.
“We definitely think sales will be down some for next year,” Autotrader.com analyst Michelle Krebs said.
One reason: Many people are buying nice used cars that recently came off of leases instead of opting for expensive new models.
Barclays analyst Brian Johnson said that the industry is facing “an eroding plateau” that will settle in a “normalized” range of 15.5 million to 16 million vehicles a year.
What were you doing in 2007? I was attending journalism school. Never attend journalism school.
2nd Gear: The UAW Will Have A New President Next Summer
His name is Gary Jones. He’s an accountant. He is positioned to succeed the current president Dennis Williams, when Williams retires next summer. Jones is already a director within the union, according to the Detroit Free Press. He’ll probably be around for awhile.
From the Freep:
Members of the largest and most powerful UAW caucus have described Jones as a steady hand who can effectively navigate the organization through times of change and uncertainty.
In addition to Jones, the slate includes Gary Casteel, who is expected to remain as secretary-treasurer, and vice presidents Cindy Estrada, Rory Gamble and Terry Dittes.
Rank and file members will vote at the UAW’s Constitutional Convention in June, but victory is traditionally a shoo-in for nominees selected by this group. While other members can run for president or vice president, the men and women named Thursday are likely to lead the union for the next several years.
Jones, 60, a regional director who oversees 17 states, including Missouri, Texas and Louisiana, and the West Coast, was considered the front-runner to succeed Williams going into this week’s leadership caucus. He would need to move to Detroit if he becomes president.
He started with the UAW at the Ford plant in Broken Arrow, Ala. More recently, Jones has served as the union’s top non-elected finance person for nearly a decade. His members work at Lear, Lockheed, Raytheon and the University of California.
3rd Gear: There’s A Ford F-150 And Explorer Recall
It includes 202,274 F-150s and Explorers, the vast majority of them being in the U.S. As far as recalls go, it’s not in the Run To Your Dealership As Quick As You Can category, but it’s still pretty dangerous. It involves the the front seats.
From the Freep:
In affected vehicles, the upper left-hand pivot bolt for the front power seat adjuster may loosen or fall out. A front seat cushion with a missing upper left-hand pivot bolt may experience increased movement in a crash and not properly restrain occupants, increasing the risk of injury.
Ford is not aware of any accidents or injuries associated with this issue.
Of the recalled vehicles, 177,264 were sold in the United States, 22,620 in Canada and 2,390 in Mexico.
The affected F-150s were those built at Dearborn or Kansas City assembly plants between Jan. 22 and April 19, 2016 or Explorers produced at the Chicago assembly plant during that same period.
Dealers will measure the torque of the power seat track upper pivot link bolt. If the bolt passes the torque inspection, dealers will remove and clean the bolt, apply new threadlock, and reinstall the bolt to the specified torque. There will be no charge to owners.
4th Gear: PSA, Which Owns Peugeot, Plans To Build 900,000 Electric Motors By 2022
They will do it with the help of the Japanese company Nidec. The companies announced the partnership, which will amount to around $237 million in new investment, on Monday. It’s all part of the future, which is electric everything.
The electric motors developed with Nidec will supply all Opel and Vauxhall models, Lucas said. Nidec will act via Nidec Leroy-Somer, the French electric motor company it acquired in February this year.
The aim of the joint venture is to make high-performance “electric traction motors” for PSA Group and potentially other carmakers, the companies said.
Nidec manufactures motors for products ranging from hard disk drives to elevators and automobiles, and owns the U.S. Motors brand.
The highly acquisitive company, which describes itself as specializing in “everything that spins and moves”, has been snapping up companies in anticipation that new automotive technologies will result in a boom in the market.
It announced last week it had bought driveXpert GmbH, which makes electronic control units for automobiles. Earlier this year, it acquired the motor and electric power generation businesses of France’s Emerson Electric, and the drive business of Emerson Electric Co of Britain.
5th Gear: Volkswagen Might Soon Buy A Stake In The Russian Automaker GAZ
GAZ has been around since 1932 and makes light commercial vehicles, among other things. The two companies have already been working together on passenger cars, and any stake would be an extension of that partnership.
GAZ is a part of the Basic Element group that holds the assets of Russian businessman Oleg Deripaska. Both GAZ and Basic Element declined to comment, while a spokesman at VW headquarters said he does not comment on market speculation.
“There are talks, they are trying to reach an agreement. Deripaska has long been looking for a partner and VW does not have a Russian partner,” one well-placed industry source said.
Another well-connected car industry source, two financial market sources and another person familiar with the matter also said talks were under way.
One of the sources said that a decision on the size of the proposed stake sale has yet to be made.
Reverse: A Minneapolis ‘Godfather’ Dies Because Of A Car Bomb
“Dapper Dan” Hogan was killed on this day in 1928. He was a “pillar of the Twin Cities underworld,” according to History.
As the newspaper reported the day after Hogan died, car bombs were “the newest form of bomb killing,” a murderous technology perfected by New York gangsters and bootleggers. In fact, Hogan was one of the first people to die in a car bomb explosion. The police investigation revealed that two men had entered Dapper Dan’s garage early in the morning of December 4, planted a nitroglycerine explosive in the car’s undercarriage, and wired it to the starter. When Hogan pressed his foot to that pedal, the bomb went off, nearly severing his right leg. He died from blood loss.
Neutral: All Things Being Equal, Would You Buy A New Or (Lightly) Used Car, Given The Choice?
My last car payment is coming up in February and I hope to be free of car payments after that for pretty much the rest of my life. But if I had to I would go with brand new, if only because I’ve never done that before. It would be a bad financial decision. You?