More chip shortage nonsense, more SPAC nonsense, and what’s the deal with Ford and new product launches? All that and more in The Morning Shift for March 29, 2021.
1st Gear: Ford Has Another Bungled Launch It Can’t Really Explain
Ford messed up the new Explorer launch, some new Broncos have been felled by a roof, the F-150 launch didn’t inspire much confidence and the Mustang Mach-E already has a recall. It’s been the responsibility of Jim Farley, who became CEO of Ford last October, to fix this. Clearly there is more work to be done; Automotive News reported Monday that another new product launch has been botched.
This time it isn’t a car but a wall charger for EV owners to stick in their garages. This is not what Ford wants as it rolls out the Mach-E and has an electric F-150 on the way.
The automaker issued a stop sale for its $799 Ford-branded wall boxes on Feb. 24 after it discovered some weren’t working properly, a spokesman told Automotive News. It’s unclear how long the hold will last, although the spokesman said Ford was “working hard to alleviate the matter with all parties involved.”
While the delay isn’t a deal-breaker for most customers — many don’t purchase the Ford-branded charger and instead use the free but less-efficient mobile cord or a third-party wall box — it’s another bump in the launch of one of Ford’s highest-profile new vehicles and a growing pain for an automaker looking to raise its electric vehicle credibility. It’s also a frustration for dealers looking to cash in on a major in-house accessory.
“We’ve been told to go on Amazon and order chargers that way,” Evelyn Sames, COO of Sames Auto Group, said at an Automotive News Retail Forum panel this month.
Two other dealers who asked to not be identified said their zone representatives also suggested turning to Amazon, but only if a customer raises the question. One of the dealers said it had not been an issue for the few Mach-Es they’ve sold so far.
“Don’t buy a car in the first year after its launch” has long been an automotive maxim that in the modern age I was hoping we could discard, though for Ford it sure still seems relevant.
2nd Gear: Black Media Leaders Call GM Racist
The group, including Ice Cube, took out a full-page ad in the Detroit Free Press on Sunday after they said GM CEO Mary Barra had refused to meet with them. After repeated requests, the last straw apparently came a couple of weeks ago when GM offered the group a meeting with its chief marketing officer instead of Barra. At issue, in part, is how GM spends its advertising budget.
From the Freep:
The Black-owned media group wants GM to allocate at least 5% of its ad budget to Black-owned media companies, said [Byron Allen, CEO of Allen Media Group, which owns The Weather Channel] in an interview with the Free Press on Sunday.
The ad says “less than 0.5% goes to media companies owned” by African Americans, calling that “horrendous, considering that we as African Americans make up approximately 14% of the population in America and we spend billions buying your vehicles.”
Allen said the group could recommend 14% of the budget be spent on advertising with Black-owned media companies, “that would be economic parity, we’re not even asking for parity, we’re asking for inclusion.”
But [GM spokesman Pat Morrissey] said GM spends more than .5% of its media budget now with Black-owned media. While he declined to provide specifics, he said it is increasing and it is “much higher than .5%.”
Corporations talk a whole lot of shit about being inclusive and aspiring to do this and that, but, at the end of the day, the numbers don’t lie. And it’s highly unpersuasive for GM’s response to be that the ad got its facts wrong but, sorry, we can’t provide you with the real numbers.
Anyway, here are the people behind the ad:
- Byron Allen: Founder, chairman & CEO of Allen Media Group, a California-based media group that owns The Weather Channel and provides video to broadcast and cable TV, mobile devices, multimedia platforms, and the web.
- Roland Martin: CEO of Nu Vision Media, Inc., a Chicago-based company that produces and distributes Roland S. Martin’s daily digital show, #RolandMartinUnfiltered.
- Todd F. Brown, PMP: Founder, Urban Edge Networks and HBCU League Pass, which covers historically Black colleges and universities.
- Don Jackson: Founder, chairman and CEO of Central City Productions, a Chicago-based full service television production company.
- Earl “Butch” Graves Jr.: President and CEO, Black Enterprise, a magazine covering African-American businesses.
- Ice Cube: BIG3, Cubevision, CWBA.
- Junior Bridgeman: Ebony Media, the publisher of Ebony Magazine, which covers pop culture and news focusing on the African-American community.
You can read the full text of the ad here.
3rd Gear: Yet Another SPAC
I can’t wait for a movie in the style of The Big Short to be made in five years or so about the rush for all kinds of companies, but especially in the car world, to merge with special-purpose acquisition companies and go public. The latest is Cazoo, a British car retailer that sponsors the English Premier League team Everton.
From Bloomberg:
Cazoo Ltd., the British used-car platform, agreed to sell itself to a blank-check company for $7 billion.
The deal with special-purpose acquisition company Ajax I will raise about $1.6 billion in proceeds, including $805 million in a cash trust from the SPAC and another $800 million from Ajax’s sponsors, Cazoo said in a statement on Monday. London-based Cazoo will be listed in New York after the deal closes.
The company, which buys and restores used cars and delivers them directly to buyers, was valued at more than $2 billion after raising funds in October. Cazoo had been weighing an initial public offering after the successful listing of its German counterpart, Auto1 Group SE, which raised 1.8 billion euros ($2.1 billion) earlier this year.
Cazoo seems to be the British version of Carvana. Good luck to them.
4th Gear: The Chip Shortage Apparently Claims Another Victim
This time Hyundai is has been hit, though it’s not saying so just yet officially. The global chip shortage has been going on for months and doesn’t seem to be letting up any time soon.
From Reuters:
South Korea’s Hyundai Motor Co plans to temporarily suspend production at its Ulsan No.1 plant in South Korea due to chip shortage between April 5 and April 13, Korea Economic Daily reported on Monday, citing the auto industry.
The affected Ulsan factory produces 311,000 vehicles annually including the Kona Electric and Ioniq 5.
“No decision has been made on the reported temporary suspension of the facility,” Hyundai said in a statement to Reuters.
The Korea Economic Daily said the production at Hyundai’s Ulsan No.1 plant is being suspended due to supply issues regarding chips and power electric modules.
5th Gear: Another Production Stoppage Though This One Is Only Partially Due To The Chip Shortage
It is also due to the pandemic. It is in Italy, where Stellantis makes compact SUVs.
From Reuters:
Carmaker Stellantis will halt production at its plant in Melfi, southern Italy for the period April 2-12 because of low demand triggered by the COVID-19 crisis, the UILM union said on Monday.
Production at the plant, where the world’s fourth largest automaker makes Jeep Renegade and Compass models and the Fiat 500X compact SUV, has been repeatedly disrupted due to weak demand and semiconductor supply shortages.
The FIM CISL union said last week the firm was considering permanently closing one of its two production lines at the Melfi plant to address excess capacity in Italy.
European car registrations fell 23% year on year in the first two months of this year, according to industry data...
It is somewhat surprising to me that Stellantis is having a hard time hawking Jeep Renegades and Compasses and Fiat 500Xs, though perhaps that is in part because of the big electric push in Europe. Perhaps take this opportunity to reconsider the Renegade in any case.
Reverse: Space Exploration Good
Neutral: How Are You?
I am, once again, stuck in a rut of watching old Top Gear. I had forgotten how delightful the Kristen Scott Thomas interview is, as she owns Clarkson effortlessly. Also, the interview reminded me of the G-Wiz, which Thomas said she drives. I had forgotten about it completely.