Ford is mostly getting out of India, New York is banning the sale of gasoline cars, and should teens be allowed to drive semis across state lines? All that and more in The Morning Shift for September 9, 2021.
Ford first entered the Indian market 25 years ago, hoping to, you know, sell cars and make profits. It hasn’t quite worked out that way, with the company saying Thursday that it would end production there by next year, effectively pulling out of the world’s fifth-biggest car market.
From Ford’s release:
Ford will continue to provide customers in India with ongoing parts, service, and warranty support. As part of the plan, Ford India will wind down vehicle assembly in Sanand by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.
Following accumulated operating losses of more than $2 billion over the past 10 years and a $0.8 billion non-operating write-down of assets in 2019, the restructuring is expected to create a sustainably profitable business in India.
Ford will focus on growing its Ford Business Solutions capabilities and team in the country, as well as engineering and engine manufacturing for export. With more than 11,000 team members currently in India, Ford Business Solutions plans to expand to provide more opportunities for software developers, data scientists, R&D engineers, and finance and accounting professionals, in support of the Ford+ plan to transform and modernize Ford globally.
More than 500 employees at the Sanand Engine plant, which produces engines for export for the best-selling Ranger pickup truck, and about 100 employees supporting parts distribution and customer service, also will continue to support Ford’s business in India.
Ford will begin importing and selling must-have, iconic vehicles, including Mustang coupe. Customers in India also will benefit longer term from the Company’s plan to invest more than $30 billion globally to deliver all-new hybrid and fully electric vehicles, such as Mustang Mach-E. Sales of current products such as Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once existing dealer inventories are sold.
According to Automotive News, Ford has less than a two-percent market share in India, where buyers prefer small, low-cost vehicles from automakers like Hyundai, Suzuki, Mahindra, and Kia. I’m not sure this is anything more than Ford trying to focus on the parts of its company that are profitable, but there has been a mini-trend of companies leaving India as of late, with Harley-Davidson and, more distantly, GM, too. Tesla, meanwhile, remains bullish.
As it stands, teens can get commercial driver’s licenses in most states but federal rules do not allow them to drive big rigs across state lines. That might be changing, with a provision in the infrastructure bill passed by the Senate to set up a pilot program to allow 18-, 19-, and 20-year-olds to do just that, as the trucking companies contend with what they say is a major shortage of drivers. But, according to The Wall Street Journal, some people in the industry say that that won’t be nearly enough to solve the problem.
“If you’ve got holes in the bucket, no matter how much water you put in the top of the bucket, if it’s running out as fast at the bottom as it is at the top, you haven’t really resolved that issue,” said Todd Spencer, president of the Owner-Operator Independent Drivers Association, which represents independent owners of single trucks and small fleets.
The association says there is no true shortage of drivers, as many trucking companies contend. In a recent letter to Commerce Secretary Gina Raimondo, the group said that hundreds of thousands of people get commercial driver’s licenses each year and that driver turnover, not supply, is the problem, as new entrants try out the business and leave for other work.
The American Trucking Associations, another trade body that represents trucking companies, hopes the pilot program will demonstrate that young people can safely drive tractor-trailers interstate, said Bill Sullivan, its executive vice president of advocacy.
Proponents of lowering the federal age limit say that plenty of young commercial-driver’s-license holders already drive long distances within large states like Texas and California and that the proposed apprenticeship program’s required 400 hours of training would add another layer of safety beyond what is needed to get a commercial license.
This issue of there being a driver shortage — or not, depending on who you ask — is an interesting one, in that it does seem true that there are plenty of licensed drivers. The problem is that not enough of them want to drive trucks for a living, especially the long-haul routes.
Average annual pay for heavy-duty truck and tractor-trailer drivers in May 2020, the latest month for which data is available, was $48,710, up from $40,360 in 2012, according to BLS. In comparison, drivers of light trucks or vans had average annual pay of $41,050 in May 2020, BLS data show.
Michelle Kitchin, who drives for Byron Center, Mich., truckload carrier Van Eerden Trucking Co. and has worked behind the wheel for more than three decades, doubts that bringing in younger recruits would plug leaks in the trucking labor force. Truckers face a “retention issue,” she said, because of the long hours, the time spent waiting for freight handling at truck docks and extended periods away from home.
“What 17-year-old is going to look at the trucking industry and say, ‘I want to do that when I’m 18?’” Ms. Kitchin asked.
It seems to me that banning the registration of new gas cars would be better than banning the sale of them, since if neighboring states don’t also follow suit it isn’t hard to imagine a scenario where, in 2035, if you want a new gas car, you just go to Pennsylvania and buy one. But, still, this is progress, and, anyway, I expect a lot of states like Jersey to do something similar, following California’s lead.
The sale of new gas-powered cars and trucks will be banned in New York State in 14 years, under legislation signed by Gov. Kathy Hochul on Wednesday.
The measure (S.2758/A.4302) sets into law a state goal to have all New York sales or leasing of new passenger cars and trucks—as well as off-road vehicles and equipment—be zero-emissions by 2035. All new medium- and heavy-duty vehicles sold will have until 2045 to meet the goal, according to the bill.
“New York is implementing the nation’s most aggressive plan to reduce the greenhouse gas emissions affecting our climate and to reach our ambitious goals, we must reduce emissions from the transportation sector, currently the largest source of the state’s climate pollution,” Hochul said in a news release.
Big trucks are also in the state’s sights.
Hochul on Wednesday also directed the state Department of Environmental Conservation to release a proposed regulation that would reduce air pollution from trucks.
The regulation, modeled after California’s clean truck rules, would require truck manufacturers to transition to clean, electric zero-emission vehicles. A certain percentage of sales would have to be zero-emissions, dependent on the vehicle weight class, starting with the 2025 model year.
The proposed regulation allows several compliance options and would require a one-time reporting from applicable truck fleets.
Toyota’s president, who is also the head of the Japan Automobile Manufacturers Association, said Thursday that parts shortages — mainly semiconductors — will likely lead to new cuts in production in October for Japanese automakers, who have fared slightly better than their American counterparts amid the global chip shortage but this is the kind of supply chain crisis that will bloody everyone.
“Depending on the manufacturer, we could see production cut to a lower level in October,” said Toyoda, who leads the Japan Automobile Manufacturers Association and is President of Toyota Motor Corp (7203.T), the country’s biggest car maker.
Toyota slashed global production in September by 40% from planned levels, joining other big global automaker that have already slowed output to cope with the shortage.
The world’s biggest automaker by sales volume said it would try to make up for lost production in order to meet a 9.3 million vehicles target in the year ending in March 31.
Other Japanese automakers that have struggled to overcome the shortage in components include, Nissan Motor Co (7201.T), Honda Motor Co (7267.T), Suzuki Motor Corp (7269.T) and Mazda Motor Corp (7261.T).
Mercedes has a new head of U.S. sales, a company veteran named Senol Bayrak, according to Automotive News. His primary goal, like his predecessor Adam Chamberlain — who Mercedes says will “will leave the company and pursue opportunities outside of Daimler” — will be to beat BMW and Lexus. Oh, also Tesla, which is gunning for them.
From Auto News:
In his most recent role, Bayrak served in Stuttgart as the director of product management for SUV and electric models, as well as market intelligence and competitor analysis.
He will have overall responsibility for Mercedes’ U.S. sales, volume planning, distribution operations and product management.
He arrives as the automaker faces tight inventories and product disruptions due to industrywide supply chain challenges.
Dealers seem optimistic but also a little nervous, given that there have been a lot of changes up top.
Bayrak is one of a number of new senior leaders at Mercedes-Benz USA. In the past year, the changes have included a new CEO and CFO.
The “instability at the top is concerning to the dealer network as the industry deals with the effects of the pandemic and then the second gut punch with the semiconductors,” Jeff Aiosa, dealer principal at Mercedes-Benz of New London in Connecticut, told Automotive News.
“I’m optimistic that they’re going to work their way through it,” Aiosa said. “But it’s been a lot over a long duration of time.”
Van Heugten, the Dutch sidecar motocross champion, was born on this day in 1945. Van Heugten, who died in 2008, was world champion of the sport in 1981. Here he is in action back then:
It’s been raining all night in New York, and will also rain all day today, in what I assume is the remnants of a hurricane, but I don’t really know because it’s hard to keep track of all of them these days. I’m looking at the radar and see another one, Larry, out on the Atlantic after Mindy has now made landfall in Florida.