Ford faces a potentially big lawsuit, pundits wonder if the new Corvette will sell, everyone is maybe getting real about autonomous cars and much more for The Morning Shift of Tuesday, July 23, 2019.
1st Gear: A Big Lawsuit for Big Trucks
The Ford F-150 is still the best-selling vehicle in the world, and as with many other modern trucks, one of its biggest selling points is that it’s not as gas-guzzling as the trucks of yesteryear.
But a new class-action lawsuit filed by Seattle law firm Hagens Berman—a serial car company-suer that also went after Volkswagen for Dieselgate—alleges Ford falsified fuel economy tests on the ultra-popular truck.
It’s a lawsuit to the tune of $1.2 billion. It claims that due to how Ford performed the “coastdown” tests, which calculates resistance, an owner of a 2018 or 2019 F-150 could pay a lot more in fuel costs over time than stated. Here’s the report on the suit from The Detroit Free Press:
“We did the math and based this lawsuit on our own independent research. Ford’s fuel economy promises are all smoke and mirrors,” said Steve Berman, managing partner of Hagens Berman. “Ford’s lies about the F-150 are masking the truth: Consumers are paying far more for these trucks than meets the eye. Over the lifetime of the vehicle, we believe F-150 owners are paying more than $2,000 more for fuel.”
[...] According to the suit, plaintiffs conducted tests using EPA-mandated coastdown procedures and found that Ford overstated the fuel economy in its F-150 trucks by 15% for highway mileage and 10% for city mileage.
“Ford fudged its coastdown testing and used inaccurate drag and resistance figures to boost the vehicles’ EPA mileage ratings,” the lawsuit says.
[...] The lawsuit says that assuming the lifetime of a truck is 150,000 miles, city driving would consume an extra 821 gallons over the lifetime of the truck, or at a $2.79 national average fuel price, an extra $2,290 in fuel costs. The extra highway fuel would be 968 gallons or $2,700, it said.
What’s especially interesting here is that these alleged issues were flagged internally by Ford employees:
On Feb. 21, 2019, Ford said its employees, through an anonymous reporting process, had raised concerns about the way Ford calculated road loads, which are used to provide the Environmental Protection Agency with vehicle miles per gallon ranges.
At that time Ford said it had begun an internal investigation into whether its vehicles have worse gas mileage and emit more pollutants than car, truck and SUV labels state, going back to 2017 models.
“Our investigation continues into how Ford estimates road load as part of the U.S. fuel economy and emissions certification process,” Kim Pittel, the company’s vice president of sustainability, environment and safety engineering, said at the time.
A Ford spokesman told Jalopnik that while the automaker doesn’t comment on pending litigation, “based on reports, this appears to be similar to two other recent filings by the same law firm in the same court. In any case, it’s important to not confuse claims with merit.” The first sentence there likely refers to Hagens Berman’s other fuel economy cases, including this one also aimed at Ford.
This case was filed in the U.S. District Court for the Eastern District of Michigan and also affects anyone who bought the new Ranger. We’ll see where this suit goes, but between this and the Fiesta/Focus gearbox mess, Ford has headaches on a few fronts.
2nd Gear: Ford Invests in Chicago
Some good news from Ford: more investments in American workers. From Automotive News:
Ford Motor Co. is investing $50 million and converting 450 temporary union workers to full-time at its Chicago Assembly Plant as it converts a nearby modification center to handle final assembly of the electrified versions of its Explorer and Aviator crossovers.
The move, which takes effect in the fourth quarter, allows Ford to free the main line at Chicago Assembly for gasoline versions of both vehicles. The 200,000-square-foot modification center, about a mile from Chicago Assembly, previously handled the automaker’s Police Interceptors. That work will move to another building.
The temporary workers being converted to full-time will come from the Chicago Assembly Plant and the Chicago Stamping Plant, and Ford plans to hire more workers to replace them.
The United Auto Workers union, however, wants more guarantees those temporary workers can become full-time ones.
3rd Gear: Can the C8 Corvette Find Enough Buyers?
I went into the C8 Corvette reveal more cynical and questioning of its price and positioning than anything else. I walked away from it all pretty impressed and even excited by what I saw. A mid-engine, naturally aspirated V8 car with a “starting price” under $60,000? That trashes an entire segment of similarly priced sports cars. I’m into it.
Questions, however, remain. In recent years the C7 Corvette was a profitable car for General Motors, but it’s unclear whether that’s been true lately as the global sports car market declines and gives way to SUVs. The C8 seems great but it enters the toughest atmosphere for such a car it’s had in a while. GM is hoping that its price tag can help it snatch buyers from other brands.
From Automotive News:
[General Motors President Mark] Reuss believes one of the new Corvette’s direct competitors will be the Porsche 911. The least expensive 911, the Carrera, starts at $92,350, including shipping, and has a six-cylinder engine with 125 hp less than the Corvette’s 495-hp V-8. The Carrera’s 0-to-60 mph time is around 4.2 seconds, still very fast, but considerably slower than the new Corvette’s.
Other sports cars with the engine behind the driver that could lose customers to the latest Corvette are also more expensive, such as the Acura NSX, which starts at $159,495, including shipping, and the Audi R8, which has a $171,150 starting price, including shipping.
Reuss said the new Corvette has a chance to win those customers.
“The price point has the effect of not scaring away buyers who assume it is out of their league, more than lure buyers in who were thinking of spending more elsewhere,” said Stephanie Brinley, principal automotive analyst with IHS Markit.
“The price point is also reflective of the relatively higher volume that Corvette captures, compared with pricier sports cars,” Brinley said.
“To convert buyers from more expensive sports cars, Chevrolet will have to rely on traditional product attributes, including the increased performance and improved handling,” she said. “As it has often done in the past, it has to outdrive the competition.”
I used “starting price” in quotes above because I’m nearly certain that with the options you’d really want, most C8s we’ll see will be $70,000 or more. Still! Not cheap but vastly less expensive than many competitors.
We’ll find out if that’s enough to drive people away from Porsche and the rest.
4th Gear: I Don’t Want to Say I Told You So, But...
I’d say that over the past few years, the website you are reading has been generally optimistic about electric vehicles but skeptical about autonomous ones. Increasingly it looks like that was the right path to take as more and more car companies, startups, analysts, business types and would-be tech overlords admit that, yeah, driverless cars are not really just two or three or five years away.
Here’s a sobering report from The New York Times:
A year ago, many industry executives exuded much greater certainty. They thought that their engineers had solved the most vexing technical problems and promised that self-driving cars would be shuttling people around town in at least several cities by sometime this year.
Waymo, which is owned by Google’s parent company, Alphabet, announced that it would buy up to 62,000 Chrysler minivans and 20,000 Jaguar electric cars for its ride service, which operates in the Phoenix suburbs. General Motors announced that it would also start a taxi service by the end of this year with vehicles, developed by its Cruise division, that have no steering wheels or pedals.
Captivated by the notion of disrupting the transportation system, deep-pocketed investors rushed to get a piece of the action. Honda and the Japanese tech giant SoftBank invested in Cruise. Amazon, which hopes to deliver goods to its shoppers by driverless vehicles, invested in Aurora, another start-up in this area.
“There was this incredible optimism,” said Sam Abuelsamid, an analyst at Navigant Research. “Companies thought this was a very straightforward problem. You just throw in some sensors and artificial intelligence, and it would be easy to do.”
“Just throw in some sensors and artificial intelligence!” You know that’s how a ton of these people actually think, too.
But the death of a pedestrian at the hands of an autonomous Uber prototype last year changed all that, as have the three known Tesla Autopilot-related deaths in the U.S. Now legacy automakers and tech companies are slowing down or rolling back plans for things like autonomous taxi services and fully self-driving vehicles:
Companies like Waymo and G.M. now say they still expect to roll out thousands of self-driving cars — but they are much more reluctant to say when that will happen.
Waymo operates a fleet of 600 test vehicles — the same number it had on the road a year ago. A portion of them are the first set of vehicles it will be buying through the agreements with Chrysler and Jaguar. The company said it expected to increase purchases as it expanded its ride service.
“We are able to do the driving task,” Tekedra Mawakana, Waymo’s chief external officer, said in an interview. “But the reason we don’t have a service in 50 states is that we are still validating a host of elements related to offering a service. Offering a service is very different than building a technology.”
Testing, of course, will continue all over the U.S. and the world. But now it’s generally accepted that your car (or taxi) probably won’t be a fully autonomous robot pod by 2021. Try a few more decades after that.
5th Gear: Actually, We’re Not Terrible, Says NHTSA
The recent mess with the Ford transmissions I mentioned above has once again emboldened critics of America’s supposed auto safety regulator, the National Highway Traffic Safety Administration, and made them wonder aloud: “Just what the hell do you people do, exactly?”
Well, here’s NHTSA’s people defending themselves and their agency to the Detroit Free Press, and saying: “We do things! Things are what we do. Don’t say we don’t do things.”
“Automakers share information with us, but I don’t think we just hear information and hang up,” said Deputy Administrator Heidi King, who awaits Senate confirmation to be NHTSA administrator. “If there’s something I’m uncomfortable with, neither I nor anyone here is hesitant to pick up the phone and call and ask more questions. We take very seriously that we get it right.”
The proof lies in the future. In some of the biggest vehicle recalls in history, such as Firestone tires on Ford Explorer SUVs, Toyota’s unintended acceleration crisis, General Motors’ faulty ignition switches and Takata air bags, NHTSA did not take action until after crashes killed or injured many people.
“GM told them that the ignition switches were not an issue. Right,” said Janette Fennell, founder and president of safety advocacy agency KidsAndCars.org, referring to a defect ultimately linked to 124 deaths. “You don’t believe the fox when he’s in the henhouse.”
Said Sean Kane, president of Safety Research & Strategies, “They’re always going to be behind the curve. The big bang for this agency is setting good standards. That would help minimize the number of problems that would end up in the enforcement side or defect side.”
NHTSA didn’t open an investigation into or order a recall for the Ford transmissions, which in many cases experienced power losses at highway speeds. And this story implies it just didn’t want the fight:
Kane said the agency would be reluctant to act because of the high cost of fixing the millions of cars with bad transmissions. Ford would likely resist, he said.
“Ultimately, NHTSA would have to litigate against a well-funded company that knows the issue inside and out. You’ve got a small agency, small staff and limited resources. Why would they want to pick that fight?” said Kane. “That’s why I say, if you’ve got a big enough defect, you’ll get away with it.”
Remember, the GM ignition switch recall only happened after USA Today reported the details of a settled lawsuit filed by the family of one of the victims. Often it seems like NHTSA has to be publicly shamed by the media into actually doing its job.
Being proactive still isn’t its strong suit, and the Ford gearbox thing is further proof of that.
Reverse: Riots In Detroit
Neutral: Will the C8 Corvette Sell?
Even if it’s an insane value—which it seems like it might be—can the new Corvette overcome a slumping sports car market?