1st Gear: Ford’s Brutal Own By Wall Street
Regular Morning Shift customers know the story well by now: the so-called “legacy” automakers are having a very hard time convincing Wall Street analysts that they are ready for the autonomous electric ride-sharing mobility future, or that they can weather the next recession or downturn that happens.
Moreover, those companies are pissed that analysts now put Tesla—which has never turned an annual profit!—as the most valuable car company.
Shareholder disdain cost former Ford Motor Company CEO Mark Fields his job earlier this year. So new Ford CEO Jim Hackett’s big test was to show investors and analysts that Ford is ready to face the future, and he did that with... a PowerPoint presentation. As one does.
The outcome? According to a fairly brutal account by Bloomberg, analysts are not impressed.
The plan included a few tangibles — $14 billion in cost cuts and a $7 billion shift in spending away from passenger cars — but not enough specifics for investors to grasp how, exactly, the century-old carmaker plans to navigate the new mobility landscape.
“While expectations were low, we were underwhelmed by the lack of detail,” George Galliers, an analyst at Evercore ISI, said in a note to clients Wednesday. Ford’s presentation “was generally lacking in the detail auto investors crave, with more McKinsey-like thought slides than those with actual numbers.”
[...] “While we don’t take issue with the principles themselves, they don’t seem to differ from what we know every other OEM globally is looking to pursue,” Galliers said. “What differentiates them is the lack of details and numbers.”
Ford shares opened lower Wednesday following the investor briefing before rising as much as 1 percent. The stock was up 0.7 percent to $12.43 at 11:53 a.m. in New York.
Ouch. In addition, Ford chose not to reveal any 2018 profit forecasts.
Be more like Tesla, car companies! Whatever that is supposed to mean.
2nd Gear: Meanwhile At GM
It could be thought of as an attempt to steal Ford’s thunder before their big Wall Street moment, but General Motors CEO Mary Barra touted her company’s recent success with electric cars and autonomous testing.
Apparently it worked, according to CNBC:
General Motors’ strong competitive position in key future technologies in the auto market is underestimated by investors, according to a Wall Street firm.
Bank of America Merrill Lynch raised its rating for GM to buy from neutral, saying the company will thrive due to its upcoming electric and autonomous cars.
“GM’s management is proactively pursuing expansion opportunities at an accelerating pace, while maintaining the strength of its core truck and global auto business,” analyst John Murphy wrote in a note to clients Tuesday. “We believe GM has many pieces of the puzzle (and more pieces than its major competitors) that will be required to deploy and monetize future vehicle technology, namely electrification, autonomy, and connectivity.”
Your move, Ford!
3rd Gear: GM Doubles The Autonomous Car Test Fleet
GM’s had a big week then when it comes to future-car news, reports Reuters:
General Motors Co’s self-driving unit, Cruise Automation, has more than doubled the size of its test fleet of robot cars in California during the past three months, a GM spokesman said on Wednesday.
As the company increases the size of its test fleet, it has also reported more run-ins between its self-driving cars and human-operated vehicles and bicycles, telling California regulators its vehicles were involved in six minor crashes in the state in September.
“All our incidents this year were caused by the other vehicle,” said Rebecca Mark, a spokeswoman for GM Cruise.
In the past three months, the Cruise unit has increased the number of vehicles registered for testing on California streets to 100 from the previous 30 to 40, GM spokesman Ray Wert said.
That should keep the Wall Street types happy for a bit.
4th Gear: Into The Fire For Ghosn’s Successor
Carlos Ghosn protege Hiroto Saikawa has been on the job at Nissan just six months and already he faces a massive crisis in Japan: a recall of basically all the cars, after it came out more than 1 million of them weren’t properly inspected for quality.
The recall affects 24 models made and sold between Oct. 2014 and Sept. 2017, but none here were exported from Japan, so U.S. models are not affected. Still, this is very bad!
In what Nissan CEO Hiroto Saikawa has called a “shocking” lapse, the automaker announced on Monday that it’s recalling 1.2 million vehicles in Japan after regulators discovered unauthorized inspectors approved vehicle quality. The recall covers all models produced in Nissan factories in Japan and will cost the company 25 billion yen ($222 million).
Less than 48 hours later, Nissan’s stock took a hit after the Kyodo news agency reported that the company allegedly falsified inspection documents to make it seem as if authorized inspectors had checked the new vehicles. The shares dropped. A Nissan spokesman declined to comment on the report.
“It sounds like CEO Saikawa wasn’t aware of the problem, and if it was just a mistreatment, that’s neglecting their duties, and that sure is a problem,” said Koji Endo, an auto analyst at SBI Securities in Tokyo. “What’s worse, and becomes a bigger issue, is that if the people at the factories were all aware and had practiced falsifying documents, regardless of whether the top management was aware.”
The Japanese auto industry has been reeling from multiple scandals involving product quality and falsification of records. In June, airbag maker Takata Corp. filed for bankruptcy after one of the world’s most famous recall crises. Last year, Suzuki Motor Corp. admitted to using unapproved fuel-economy testing methods in Japan, following similar disclosures by Mitsubishi Motors Corp. prompted greater scrutiny by the nation’s transport ministry.
5th Gear: The Mitsubishi e-Evolution Makes Me Hate Myself Even More Than I Already Do
The legendary Evolution name is back at Mitsubishi, this time for a concept that is an electric crossover with a personal AI assistant instead of being a raging hot rally car sedan. Via Automotive News:
Mitsubishi Motors Corp.’s upcoming e-Evolution Concept not only sports a three-motor, four-wheel drive powertrain, it gets an AI personal assistant to make driving safer and easier.
The Japanese carmaker unveiled new details about its Tokyo show vehicle on Oct. 5, saying it had no plans to build it. But the e-Evolution’s technologies will be adopted for production vehicles Mitsubishi wants to bring to market starting around 2020.
Mitsubishi’s vision calls for a single electric motor to drive the front wheels and a new dual motor system to power the rear.
Looks like ol’ PG’s coffee is gonna need to be extra Irish this morning.
Reverse: You May Have Heard Of This Guy
Neutral: Is Wall Street’s Treatment Of GM And Ford Fair?
Is it right to be held to the standard of an aggressive startup that admittedly has disrupted the car game, but has yet to make any actual money?