1st Gear: Blackberry, Still A Thing
Long, long ago, before you were born, before anyone was alive, there was a company called “Blackberry.” Blackberry was a victim of the Phone Wars, and it was utterly crushed by the belligerents Apple and Google, its once fruitful crops plowed asunder, its hopes and dreams turned to ashes in its mouth. So it switched from making phones to making software.
Part of that move involved making automotive software for Ford, which happened way back in 2014, but now Ford is building that partnership by hiring 400 Blackberry employees wholesale, according to Bloomberg:
Ford Motor Co. agreed to hire 400 employees from BlackBerry Ltd. to help develop wireless technology at the automaker, deepening an ongoing partnership between the two companies involving in-car connectivity.
The shift doubles the number of connected-car engineers at Ford and will help the U.S. company build its own wireless products in-house, said BlackBerry spokeswoman Sarah McKinney. At the same time, it helps the Canadian tech company pare costs as it completes a shift to selling software instead of phones.
“The move enables us to focus all our resources on the new strategy,” McKinney said.
This is silly. Apple CarPlay and Android Auto are fine. Google and Apple won the war. Just give it to them. Every car infotainment system is bad anyway. Stop trying to do it all in-house, car companies. Just give up.
Embrace the sweet release of automotive software death. It’s easier on everyone this way.
2nd Gear: Ford CEO Got A 19 Percent Raise
How much of a raise did you get this year? Was it 19 percent? Were you already making more than $18 million? No? Weird. You must not be the Ford CEO. Huh. Too bad, says Automotive News:
His total compensation was $22.1 million, up from the $18.6 million he made in 2015, according to the company’s annual shareholder proxy statement, released Friday.
That includes a $1,787,500 base salary, a $2,736,000 million cash bonus and $14,298,356 worth of long-term stock and performance-based equity awards, making the value of the compensation awarded to Fields during the year — excluding changes in pension value and other costs — $18.8 million, up 8.4 percent from the prior year.
Two million of Mark Fields’ new dollars are due to a rise in the value of his pension, which Ford doesn’t really control. But Ford does control the use of Fields’ private jet, on which it spent almost $300,000.
For the record, Jalopnik barely spent half that on its own private jet this year. We’ll be filing a union complaint.
3rd Gear: The Problem With Dividing GM Shares
Okay, this gets a little wonky, but bear with me. A little while back, a hedge fund guy named David Einhorn proposed separating GM stock into two classes of shares in a scheme designed to boost the company’s stock price. The thinking behind it, so it would seem, is that it would allow for two types of investors. One type of investor would be looking for short-term profits and dividends, and the other type would be in it for the long haul. Everyone would win, depending on what type of investor you are. Right?
Not so fast, Reuters says, because there’s an inherent conflict of interest there:
One obstacle cited by legal and financial advisers is the probable conflict it presents for GM’s directors, who under Delaware law are required to be loyal to all shareholders. That could get tricky under Einhorn’s plan as directors would oversee two classes of stock that each have voting powers but competing ambitions for use of company capital.
For instance, directors would have to square voting to raise quarterly payouts, which would exclusively benefit the dividend stock holders, versus allocating more toward capital expenditures or stock repurchases, which would benefit the growth stock camp.
“It puts the board in an odd position,” said Charles Elson, a University of Delaware corporate governance professor who also sits on the board of restaurant chain Bob Evans Farms Inc (BOBE.O). “Do you plow money back into the business, or buy back the stock? You end up penalizing at least one of the stock holders. It gets messy.”
Legally speaking, GM’s executives have to act in the interest of all shareholders at all times, as any company’s executives must do. This plan would create the opposite of that.
Also, it’s a little weird that Einhorn would want to do it with GM, of all companies, since car companies by their very nature need to operate on relatively vast corporate timescales. Cars take a long while to develop, is what I’m saying.
GM rejected Einhorn’s proposal, but he still says he’s going to fight for it.
4th Gear: Aston Martin’s Going To Do Some Financial Re-Tooling
This is a bit of a nutty concept in today’s day and age, but Aston Martin is still a (relatively) independent small car company. The number of high-end automakers that can claim that sort of independence can nominally be counted out before you run out of fingers. To stay in business, it needs to do some work with its debt, Bloomberg says:
At stake is the next step of a revamp of the product range to revive sales and the company has burned cash every year since 2008, according to research firm CreditSights. Aston Martin has funded this with repeated capital raising, including a 200 million pound issue of preference shares in 2015, and the debt it’s seeking to replace — 304 million pounds of secured notes issued in 2011 and a 2014 issue of payment-in-kind notes on which $219 million is outstanding.
If everything goes smoothly – which it probably will – Aston will be just fine. You’ll get your DBX. If you can afford it.
5th Gear: Change At Volkswagen Will Be Hard
Dieselgate was the result of a number of factors at Volkswagen, ranging from profits to egos to who-the-hell-knows-what, but one of those factors was the corporate culture. And in a company as vast as VW is, changing that culture will be hard, Reuters reports:
VW is hamstrung by the different interests of its stakeholders - which include a powerful role for trade unions - and a lack of new leaders, he added. CEO Matthias Mueller has been with VW for nearly four decades and Chairman Hans Dieter Poetsch was previously its long-term finance chief.
[Volkswagen head of HR Karlheinz] Blessing said VW wanted to put an end to managers shifting accountability to others and would ensure the best qualified people were handed responsibilities - something that might not always have been the case under a top-down management style.
I, for one, support full radical anarchic democracy at Volkswagen. TRULY A PEOPLE’S CAR.
On this day in 1931, Knute Rockne, the legendary Notre Dame football coach and namesake of the Studebaker Rockne line of autos, is killed in a plane crash near Bazaar, Kansas, at the age of 43.
Neutral: Can’t Infotainment Systems Be Easier?
At this point, I’m wondering why Ford or GM or Honda or BMW or whomever doesn’t just go to Google or Apple or whomever and be like “screw it, you wanna just do the whole infotainment system? Not just the phone stuff, the whole shebang. We’ll pay you money. It’s fine.”
I suspect it has something to do with pride. Thoughts?