Elon Musk is tweeting again, the Peugeot brand has been selected to lead Groupe PSA’s North American comeback, Ford has a steering wheel mixup and more on The Morning Shift of Tuesday, Feb. 26, 2019.
1st Gear: Elon Is Tweeting Through It
You’d think that after the “funding secured” Twitter debacle last year that Tesla boss Elon Musk would’ve, you know, stuck to tweeting memes instead of things like production plans and financial predictions. But as we reported last night, he’s back in hot water again, possibly to be charged with contempt of court in violation of his Securities and Exchange Commission settlement.
The settlement agreement said Musk is supposed to have tweets reviewed by lawyers before loosing them upon the world, and the SEC’s mad about this inaccurate tweet about car production—which would put him in violation of said agreement.
Naturally, Musk did not learn his lesson, but instead decided to Tweet Through It:
Tesla shares were down as much as 5 percent Monday night as a result, and down 1.5 percent in early trading today. And even one of Tesla’s biggest boosters believes it’s time for Musk to throw his smartphone into a lake, forever. Via Bloomberg:
“I hope they take away his phone,” Ross Gerber, the chief executive officer of fund manager Gerber Kawasaki, said of Musk on Monday, after the U.S. Securities and Exchange Commission asked a judge to hold the chief executive officer in contempt. The agency alleged the billionaire violated a settlement reached in September that required him to seek pre-approval from Tesla before posting material information on Twitter.
Musk, 47, wrote on Feb. 19 that Tesla would make around 500,000 electric vehicles this year, then corrected himself about four hours later by saying deliveries would only reach about 400,000.
“It feels like the SEC cares more about doing right by Tesla than Elon does,” said Gerber, whose fund holds about 35,000 shares. “I am all for the bad-boy attitude, in theory, but this is still a business and he’s costing his company and shareholders a lot of money.”
Other investors and analysts are concerned as well. Via CNBC:
Investors had hoped that the settlement would allow Tesla to put the whole affair behind it and focus on its ambitious plans for ramping production, building new factories and developing new vehicles.
“With Tesla/Musk settling with the SEC in October this black cloud was in the rear view mirror for the company (and investors) and now this latest tweet (which most investors shrugged off at the time) represents a wild card that could potentially bring this tornado of uncertainty back into the Tesla story until resolved,” Wedbush analyst Dan Ives said in a note sent Tuesday morning. “At this point we are more concerned around this issue being another distraction for Musk & Co. as the company navigates one of its most challenging periods in its history and certainty did not need this news.”
When should we tweet? Say it with me, everyone: “NEVER!!!”
2nd Gear: Peugeot, Je T’aime
We’ve known for several years that French automaker Groupe PSA
(formerly PSA Peugeot Citroën), which fairly recently took money-losing Opel off General Motors’ hands, has had its sights on a return to the North American market after bowing out amid lagging sales in the early 1990s. It’s finally official, and this time PSA hopes things will be different—and of all its many brands it’s Peugeot that will lead the charge.
Here’s what we know of the comeback announcement from Automotive News, including the fact that excited car-Francophiles have a long time to wait before they can actually get into one of these, emphasis mine:
CEO Carlos Tavares pointed to Peugeot’s “strong growth” and profitability in revealing the selection Tuesday in Paris. Since announcing its planned return in 2016, PSA has maintained that any of its brands – including Citroen, DS and, more recently, Opel – might lead the comeback to the U.S. and Canada.
The vehicles for the U.S. will initially be sourced from China and Europe, he said.
The choice marks a big step on PSA’s methodical path toward selling vehicles in a market that it abandoned in 1991. In 2017, PSA named former Nissan and TrueCar executive Larry Dominique to lead its North American charge. Last fall, Tavares indicated that decisions on a distribution model and where its U.S.-bound vehicles will be built were also likely by midyear. The automaker maintains that it’s in no hurry. Its only stated time frame is to have vehicles for sale in the U.S. by 2026.
In the meantime, PSA has been focusing on car-sharing and other mobility initiatives. Those efforts have been designed to help PSA understand U.S. consumers while expanding the 130-year-old automaker’s expertise in forms of transportation beyond the privately owned car.
We have repeatedly heard PSA’s return will be more in the form of a ride-sharing program, at least at first, but it appears to be exploring all options.
I won’t hide my own disappointment that it’s not funky Citroën instead, makers of the lovely Cactus, or even its luxury brand DS, which is also doing some interesting things. But hey, French cars in America again! That’s fun.
It’s also somewhat perplexing given the glut of brands on the current car market, plateauing sales and a probable downturn on the horizon. But this is still the world’s second-biggest car market, so PSA kind of has to try again here, and with a focus on mobility and the long game it could be up to something interesting and viable.
3rd Gear: The Mustang-Inspired EV Will ‘Go Like Hell’
Ford Executive Chairman Bill Ford has high hopes for the “Mustang-inspired” electric crossover currently in development. From Automotive News:
Speaking Monday at the Crain’s Detroit Business Newsmaker of the Year luncheon, Ford Executive Chairman Bill Ford said the Mustang-inspired vehicle “is going to go like hell.”
The callback to that phrase isn’t an accident. It underscores a change in strategy for how Ford views its EVs. The company’s early forays into electrification included now-discontinued vehicles such as the Focus Electric and C-Max plug-in hybrid that were known more for their fuel economy than performance capabilities.
“When we first started talking about electrification, there was this thought that there had to be a trade-off: It was either going to be green and boring and no fun, or really exciting but burn a lot of fossil fuels,” Ford said. “Electrification has come to the point that you can do both.”
The vehicle will have a range of more than 300 miles. Production was originally slated for Flat Rock, Mich., near Detroit, but Ford last year decided instead to build the vehicle in Mexico.
Expect that last tidbit to be a contentious one in the coming months. Why not build it in America, with American jobs?
4th Gear: Let’s Just Hope It Gets The Right Steering Wheel
A supplier issue in Mexico has forced a temporary delay on some Ford vehicles, reports The Detroit Free Press:
A labor strike in Mexico forced Ford Motor Co. to build Mustang cars and Explorer SUVs with temporary steering wheels and hold thousands of the vehicles in nearby parking lots awaiting parts, the Free Press has learned.
While waiting, Ford sent approximately 3,200 factory workers home for two weeks of unplanned down time at the Flat Rock Assembly Plant south of Detroit, the company confirmed Monday.
In addition, workers at the Oakville Assembly Plant in Ontario were sent home for three days while waiting for parts to install in the Ford Flex and Lincoln Nautilus.
[...] As of Monday, Ford employees confirmed that the supply of steering wheels had resumed. At 6 p.m. Monday, Ford planned to inform its Flat Rock UAW workers that they would remain on two shifts for two weeks in April to make up for lost production.
“We had a parts shortage due to a supplier issue,” confirmed Ford spokeswoman Kelli Felker. “It affected Flat Rock and Mustang, specifically. The Explorer was affected and we did continue to build. We did not take down time at the Chicago Assembly Plant. We will be upfitting those vehicles affected by the (parts) shortage, just like Mustang.”
I have not seen the “temporary” steering wheels but in my mind I’d like to believe they look like this.
5th Gear: Nissan’s Friction With Renault
There’s reason to believe Carlos Ghosn’s current legal woes in Japan stem from a growing resentment between the Nissan and Renault sides of the alliance. While the two unlikely allies have had great success together over the past two decades, word is Nissan was against a fuller, more formal integration—in part because it didn’t want to deal with the French government’s partial control of Renault.
But in this deep-dive from Automotive News, we learn that post-Ghosn Nissan is cooling on the idea of further convergence between the two brands. And it illustrates Nissan’s growing frustration at this arrangement:
The Ghosn approach seems truer than ever, with conventional wisdom dictating economies of scale as the key to developing costly new technology such as autonomous driving and electrification. Yet a growing faction at Nissan feels convergence is not only ineffective but in need of a revamp.
For example, the fusion of engineering under a single head last year with a direct report to Ghosn complicated planning, slowed development and created conflicts of interest, the argument goes.
The same holds for other functions, such as manufacturing.
Nissan’s cooling on convergence signals another friction point with French partner Renault, as the carmakers maneuver to salvage a 20-year tie-up rattled by the sudden arrest last year of Ghosn, the visionary who hammered them together into the world’s biggest auto group.
“It didn’t work. Development became much more difficult,” a person familiar with Nissan’s thinking said of recent steps toward convergence. “The alliance needs to be fixed further.”
So what does that mean when you’re Nissan? It means frustration over a lack of efficiency—and sorry to stereotype here but that’s no great shocker considering we’re talking about the French—and a complicated, international bureaucracy to sift through:
Ghosn converged several functions across Renault and Nissan from April 1 last year, giving the bosses of those combined areas direct reports to him as the final arbiter.
But following Ghosn’s Nov. 19 arrest and detention in Japan, the setup hasn’t officially changed, one person said. The functional bosses have been reporting in makeshift fashion to an alliance circle led by Nissan’s Saikawa, Renault CEO Thierry Bollore and Mitsubishi CEO Osamu Masuko.
“In a way, they are not reporting to anybody, they do not have a boss to make an appraisal, to make decisions about compensation and things,” a person familiar with the situation said. Bollore, Saikawa and Masuko now aim to decide such matters, no matter how controversial, unanimously.
This is also interesting:
In manufacturing, meanwhile, Nissan feels its products are being used to pad out unused capacity at Renault assembly plants. A Renault factory in France, for example, makes the Nissan Micra small car, and a Renault plant in South Korea makes the Nissan Rogue crossover.
That is fine when Nissan itself is running at full capacity. But Nissan’s worry, one person said, is that it will be hard to reel that production back into Nissan’s own plants should demand slump in a down cycle.
I think Nissan wants to see other people. I don’t know where this leaves poor Mitsubishi, but I’m sure both Nissan and Renault have assured it that no matter what happens they’ll always love it very much.
Reverse: Earth Car!
Neutral: What Happens To Elon?
He’s not gonna stop tweeting and he’s certainly not going anywhere at Tesla. So what happens with this latest dust-up with the SEC?