Ford Is Feeling Itself

The automaker said that it will invest billions in new battery and truck factories.

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Photo: Ford

Ford is throwing lots of money at EVs, Tesla’s third-quarter delivery numbers are expected to be good, and Jony Ive. All that and more in The Morning Shift for September 28, 2021.

1st Gear: Ford Says It Is Building The ‘Biggest Auto Plant In Ford’s History’ And It’s Not Union For Now

This is at a site near Memphis, Tennessee, where Ford will build an assembly plant for electric trucks, its first new assembly plant in years, according to The Wall Street Journal. There will also be three new battery factories, one in Tennessee and the other two in Kentucky. All of this will cost Ford $7 billion, part of the company’s previously announced $30 billion that it is spending on EVs.

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You can tell when Ford is really excited about something by the number of times Ford CEO Jim Farley or Ford spokesman Mike Levine tweets about it. By that measure, Ford is very, very excited.

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Why Tennessee, you ask? The WSJ talked to Farley, who gave many of the usual talking points, and then talked to another Ford executive, who gave what is possibly the biggest reason. Emphasis mine:

Mr. Farley said the new assembly plant required a fresh site, partly so Ford could move quickly without the cleanup and renovation that would be needed to retrofit an existing facility. He also cited the region’s proximity to other Ford plants and lower energy costs. Battery plants use many times more energy in their operations than traditional auto-assembly plants, he said.

Size was also a factor, he said. Covering nearly 6 square miles, the Tennessee complex would be roughly three times the size of Ford’s River Rouge plant complex near its Dearborn headquarters.

The EV transition is expected to put factory jobs at risk, union leaders say, because they require fewer parts and less manpower to assemble than gas- or diesel-powered cars. The United Auto Workers and unions in Europe have warned that tens of thousands of jobs could be lost as the switch unfolds over the next decade.

Battery factories could help offset any potential job losses, although it isn’t known whether jobs at these future facilities will be unionized. They are expected to offer lower wages than those at UAW-represented factories.

John Savona, Ford’s vice president of manufacturing and labor affairs, told reporters that future workers at the assembly factory and the three battery plants would decide whether to be represented by a union.

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It is not just Ford who has turned to the South to expand, of course, likely for similar reasons, as BMW, Volvo, Toyota, Honda, Nissan, Hyundai, Volkswagen, and Mercedes all have non-union plants down there, too. It’s almost like the UAW should go all out in trying to organize them.

2nd Gear: GM Says It Is Down With Stricter Fuel Economy Requirements

The Biden administration has sought to largely restore the targets set by the Obama administration, which the Trump administration tried to undo. GM said Monday it is all right with that, with some caveats, via Reuters:

GM called the EPA’s proposal “historically stringent” and said the Biden administration should ensure automakers in compliance with EPA rules not be subject to civil penalties in the parallel National Highway Traffic Safety Administration fuel economy program “that may arise from the geographic location of its supply chain.”

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I am not totally sure what GM is on about here, if I’m honest, but the bottom line is that the world needs cleaner cars and fast.

3rd Gear: It’s Almost The End Of The Third Quarter, Which Means That Some People Are Obsessing Over Tesla’s Delivery Numbers

Wall Street analysts that Reuters talked to expect those numbers to be good. You may recall that Elon Musk sent an email earlier this month exhorting his employees to work, an end-of-quarter ritual for him. I’m sure, if Tesla delivery numbers for the third quarter are good, that Elon will be patting himself on the back.

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From Reuters:

Analysts at Piper Sandler and RBC raised their estimates to about 233,000 vehicle deliveries for the third quarter ending Sept. 30, while Credit Suisse’s estimate was 225,000-230,000.

The figures represent a 65%-67% jump from a year earlier. As of Monday, analysts on average expected 222,700 Tesla vehicle deliveries for the third quarter, according to market data provider Visible Alpha data.

Analysts have also said the impact of the global semiconductor shortage, which has crippled many automakers around the world, may have been smaller on Tesla.

“Tesla appears to have been less impacted by the shortage than other (automakers),” Credit Suisse’s Dan Levy said in a report, citing its “quick pivot” to new microcontrollers and writing its own vehicle software.

The third quarter will likely be Tesla’s “strongest” ever, Piper Sandler’s Alexander Potter said, noting increasing adoption of electric vehicles in Europe and China and Tesla’s rising market share. Potter has a five-star rating for estimates and recommendations on Tesla, according to Refinitiv Eikon.

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This only really matters if you hold stock in Tesla, which a lot of people do these days, betting that the company will continue to hit its marks. It’s been so far, so good, for them, and a very bad couple of years for the Tesla shorts.

4th Gear: Man Gets Job

Jony Ive is best known as the guy who helped design a lot of Apple products that you probably know and love. Or loved. I speak of the iPhone, iPod, iPad, iMac, Apple Watch, and Macbook, among others. Ive left Apple in 2019 to start his own firm, called LoveFrom, and now that firm will be working with Ferrari, it was announced on Monday.

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This seems like a move further into making Ferrari a brand, as opposed to just the maker of fast cars.

From The Wall Street Journal:

Ferrari declined to reveal the specifics of the collaboration, but said it sees potential in working with LoveFrom across the whole range of its business. Alongside its legacy production of its engine-powered cars, the company sells clothes, watches and other apparel.

Ferrari said in April that its first battery-powered vehicle would hit showrooms in 2025.

LoveFrom is set to work with [Exor, the holding company controlled by Italy’s Agnelli family that also holds stakes in Stellantis] on other projects outside of the Ferrari brand. John Elkann, chairman and chief executive of Exor, and chairman of Ferrari, said the holding company had started talks with LoveFrom’s founders soon after they formed the design firm.

“Ferrari represents a first, exciting chance to do great things together as we build our future,” Mr. Elkann said.

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5th Gear: Man Loses Job

Genesis North America’s CEO is leaving, reports Automotive News. Mark Del Rosso has been on leave for three months for a “personal matter.” His duties will now be assumed by Hyundai North America CEO Jose Muñoz. Hyundai Mexico’s CEO Claudia Marquez will also join Genesis North America as chief operating officer.

“Claudia is a strong leader that has implemented effective strategies for growing automotive brands throughout her career,” Muñoz said in the release. “As an ambitious brand with a bold vision, we are pleased to have Claudia onboard to lead Genesis through its next phase of growth.”

Del Rosso took a leave of absence beginning July 1 during a time of rapid expansion for the upstart luxury automaker, which has introduced new models and tripled sales in August compared to the previous year.

“Under Mark’s leadership, Genesis achieved all-time record sales and elevated levels of customer satisfaction,” Genesis said in the separate statement. “We thank Mark for his leadership in building the Genesis Brand and wish him well.”

When Del Rosso joined Genesis in October 2019, the Korean automaker touted his experience in the luxury market with such brands as Audi, Bentley and Lexus. Earlier that year, Del Rosso had stepped down as president of Audio of America less than six months into the job.

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As usual, there is either a juicy backstory here or not; I’m sure I’ll hear about it in six months on a press drive somewhere.

Reverse: Estonia

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Neutral: How Are You?

If my car battery dies, the radio prompts me to put in a code to start working again, a common anti-theft measure that, as far as I can tell, has helped largely eliminate car radio thefts. Remember those? In the ‘90s, everyone was worried about their radio getting stolen.