Ford and the UAW respond to the protests that have spread across the country after police killed George Floyd, American automakers have restarted operations in Mexico, car sales are looking good in China, and VW and Ford finalize a big autonomous car agreement. All that and more in The Morning Shift for Tuesday, June 2, 2020.
1st Gear: The UAW And Ford Respond To The Protests Following George Floyd’s Death
Protests have erupted all around the country as thousands speak out against racial injustice following the brutal restraint and death of an unarmed black man named George Floyd.
It’s a tragic issue that has captured the world’s attention. Even Ford and the United Auto Workers union have issued statements on the topic. In a letter titled “A message from Bill Ford & Jim Hackett,” Ford’s executives acknowledge the seriousness of problem, and promise to take action:
...the tragic killing of George Floyd, compounded by other senseless killings over the years, has sparked the expression of decades of collective anger and frustration over the unacceptable abuse of power and authority. This pain is felt across the communities our employees call home.
There is no doubt that the weight of these challenges disproportionately fall on the black community. We have seen this disparity among our own Ford team members affected by COVID-19, and the legacy of economic disparities in our own home city of Detroit. It is pain that many of our team members have long felt in their daily lives.
There are no easy answers. We are not interested in superficial actions. This is our moment to lead from the front and fully commit to creating the fair, just and inclusive culture that our employees deserve.
The letter discusses how Ford plans to hold internal dialogues to understand its employees’ feelings, and to seek ways to improve itself as a company in regards to racial disparities. The letter goes on to call for “empathy and humanity,” stating:
And while we would like to say that racism has no place in our society, we know that systemic racism still exists despite the progress that has been made. We cannot turn a blind eye to it or accept some sense of “order” that’s based on oppression.
Many of us cannot know what it is truly like to be part of a community of color, to know what it is like to be afraid for our children every time they leave the house, or to worry that this day might be our last. But as long as so many of our colleagues, our friends, live with that fear, how can we live with ourselves? As long as we have the privilege to breathe, it’s on all of us to summon new levels of empathy and humanity.
The president of the United Auto Workers union, Rory Gamble, also issued a statement on the protests. From Automotive News:
Earlier on Monday, UAW President Rory Gamble — the former head of the union’s Ford department and an African American — issued a statement about the crisis.
“These are unprecedented times for us all. What we need now is not hard-heartedness. Not division,” Gamble said in the statement. “Not looking at our differences but looking at who we are and what we value as Americans. And we are ALL Americans. We are this nation, and our differences should be our strength, not our weakness. Not our tragedies.
“This pandemic, terrible as it is, has, in my opinion, shown us that we are in this together and we must rely on one another if we are going to navigate in this worldwide crisis. This is a scary time, and fear and prejudice are our enemies.”
2nd Gear: American Automakers Have Reopened Operations In Mexico
Automakers reopened their assembly plants across the U.S. earlier this month, and while there remain concerns about employee safety, a major hurdle for automakers has involved Mexico. The country’s manufacturing operations haven’t gotten back up to speed quite as soon as the U.S.’s, and this is a big deal, since much of the automotive supply chain sits south of the U.S. border. It’s also a big deal because automakers themselves have numerous operations in the country, which finds itself embattled in an especially serious struggle to contain the coronavirus.
But despite concerns about the virus’ spread in Mexico, the country is beginning to open up, and now, according to the Detroit Free Press, Ford is the last of the Big Three to fire up Mexican production facilities. The news site discusses the reopening of the Cuautitlan Stamping, Cuautitlan Assembly (for the Mustang Mach-E), Hermosillo Stamping, and Hermosillo Assembly (for the Ford Fusion and Lincoln Assembly) facilities, writing:
“The safety of our workforce is our top priority,” said Ford spokesman Said Deep, in an email to the Free Press. “Working closely with government, suppliers and union leaders, Ford de México is gradually resuming operations and production under the strictest protocols to keep our employees healthy and safe. We have resumed operations at our four sites.”
This comes after Fiat Chrysler began a gradual reopening of its Mexico operations last month, with the Detroit Free Press writing:
On May 25, FCA initiated a gradual restart of its plants in the northern city of Saltillo, where it started with about 40% of its staff. The next day the automaker restarted the Toluca Assembly plant, where FCA builds its Dodge Journey and Fiat Freemont crossovers.
FCA confirmed that it was running one shift. FCA has engine and stamping plants and a pickup and van assembly plant in Saltillo. The plant builds the popular Ram 1500 and Ram Heavy Duty pickups.
It also comes after GM’s restart of operations in Mexico. From the Detroit Free Press:
General Motors, meanwhile, restarted its three assembly plants and powertrain and stamping plants in Mexico on May 21.
GM’s Silao plant in Guanajuato, Mexico, is one of the biggest auto plants in the large Mexican industrial state. The Silao plant is critical for GM because it builds some of the automaker’s light-duty pickups. GM also builds full-size pickups at its Flint Assembly plant and Fort Wayne Assembly plant in Indiana.
3rd Gear: Car Sales Look Good In China For A Second Consecutive Month
Car sales in China have seen a remarkable recovery since coronavirus shutdowns depressed the entire auto sector for months. Both Nissan and Volkswagen have seen a resurgence of sales, with the latter—discussing April sales results—referring to China’s auto recovery as a “V-shaped” curve.
The good news is that May results also look promising. From Reuters:
The China Association of Automobile Manufacturers (CAAM), in a post on its official WeChat account, said vehicle sales were estimated to rise to 2.14 million in May. It said the numbers were based on sales data it had collected from key companies, without giving further details.
[...]
As the global auto industry is hit hard by the coronavirus pandemic, China has become a ray of hope for automakers including Volkswagen (VOWG_p.DE) and General Motors (GM.N).
In April, China’s auto sales hit 2.07 million units, up 4.4% from a year earlier, the first monthly sales growth in almost two years, CAAM data showed.
Of course, sales from January to May are down by quite a bit over the previous year—23.1% Reuters says CAAM predicts. So, even though car sales have come back, spurred in part by people rejecting public transportation, the year hasn’t been great.
4th Gear: GM and Ford Are Skipping Their Usual Summer Break To Build Cars
Automakers usually have a two-week summer shutdown to retool their plants and get ready for the new model year. This summer, that’s not happening, at least, not at GM and Ford.
From Automotive News:
Most GM plants will stay open the weeks of June 29 and July 6, a period when they normally would be closed, spokesman Jim Cain said.
“Thanks to excellent teamwork, the restart of vehicle production at GM’s manufacturing facilities continues to go safely and smoothly,” Cain said.
A handful of Ford’s assembly plants will have a one-week summer shutdown, rather than the typical two-week stoppage, according to a Ford memo posted online by one UAW local. Chicago Assembly, Louisville Assembly and Kentucky Truck will be down only the week of June 29, while Flat Rock Assembly will be down for only the week of August 3, according to the memo.
The rest of Ford’s assembly plants are scheduled for a two-week shutdown sometime between late June and mid-October.
This makes sense. Automakers are just trying to get things back up and running. Any model-year changes are likely to be made right away as production ramps up, one would think.
5th Gear: VW and Ford Finalize a Deal on Self-Driving Car Development
A year ago, after Ford and VW announced a partnership involving commercial vehicles, we heard about the companies’ intentions to team up on autonomous vehicle development. Now, per the Detroit Free Press, the two automakers have finalized their deal. From the news site:
Ford, in a posting by executive John Lawler, said the arrangement finalized Monday involving the Pittsburgh-based startup would allow the Dearborn automaker to share the cost of self-driving technology development with Germany’s VW.
“We’ve committed to spending more than $4 billion through 2023 on the development of our self-driving service. A large part of this investment is dedicated to developing the self-driving system. With Volkswagen’s investment in Argo AI, we will now share the cost of developing Argo AI’s technology,” said Lawler, CEO of Ford Autonomous Vehicles and vice president of Ford’s Mobility Partnerships.
Reverse: 1988: Consumer Reports Wants To Ban The Suzuki Samurai
From the Associated Press:
The Suzuki Samurai, a popular sport utility vehicle, tends to roll over in sudden turns and should be banned, the publishers of Consumer Reports magazine said Thursday.
″That car literally trips over its own feet, and I wouldn’t want to be in it,″ said R. David Pittle, technical director of the non-profit Consumers Union, which publishes the monthly magazine.
In an article scheduled to appear in its July issue, Consumer Reports labels the Japanese-made Samurai ″not acceptable″ - the first time it has given such a rating to a car in 10 years.
Neutral: How Are You Feeling About Cars?
How has the state of the world affected your view/love of cars?