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Ford’s big EV play, drama at the United Auto Workers negotiations, and some more executive-level intrigue at Renault-Nissan. All this and more in The Morning Shift for Tuesday, September 3, 2019.

1st Gear: Ford’s Electric Plan

To date, Ford’s electric strategy has felt incredibly unclear. While it’s had its share of hybrids, it has yet to do a truly competitive fully electric vehicle and some critics have said the big tie-up with Volkswagen is a better deal for the Germans.

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But Ford has been quietly ramping up in the electrification department, and, before you know it, a bunch of electric Fords will be here. That includes an electric F-150 and a “Mustang-inspired” EV crossover. They’re going after the stuff they know their customers want to buy, it seems.

Per Automotive News:

After years of heavy investment and one forgettable attempt, Ford Motor Co. has yet to deliver a serious battery-electric vehicle.

That will change in 2020 with the introduction of Ford’s first long-range EV, a Mustang-inspired crossover expected to be called Mach E. That will be followed as soon as a year later by a full-electric F-150, with two midsize EV crossovers on tap for late 2022.

And still two more are expected in the same period.Ford may have ceded the early days of the EV craze to the likes of Tesla, Nissan and General Motors, but executives say Ford didn’t miss much, considering the low demand and even lower margins today’s EVs command. And having that time to see what works and what doesn’t, Ford now believes it has solved the problem that has vexed manufacturers for a decade: how to make EVs that are popular and profitable.

“Mach E” is a stupid name, but I do like Ford’s strategy of leveraging existing nameplates for other EVs:

“We’re coming in at the right time,” Ted Cannis, Ford’s global director of electrification, told Automotive News. “We could do all sorts of different things, but we’re going to play to what we’re good at: commercial vehicles, vans, pickups, performance vehicles and SUVs. We have loyal customers, we know our base and the margins are better. It’s just the right business.”

The key to Ford’s strategy is to first electrify some of its most well-known nameplates, so that wary customers aren’t scared off by new technology in a vehicle with no history.

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Ford under CEO Jim Hackett has had some bold strokes, first killing off their cars, now going in on electric trucks.

“There are people out there looking for electric vehicles,” he said. “Let’s say of the 800,000 F series that we sell a year, just 10 percent are interested. That’s still 80,000 vehicles. These are huge numbers.”

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I have no idea if any of this will work, but in the interim Ford is vulnerable to any rise in gas prices, as all-in on SUVs and trucks as it is.

2nd Gear: American Autoworkers Deserve Better Than The UAW

We’ve said it before and will say it again: The United Auto Workers union mostly sucks, especially up top, where it’s been dogged with corruption cases for years now. 

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When it emerged that federal agents raided the home of its president last week, it wasn’t very surprising. But the timing of it was awkward, less than a month before the union’s contracts expire at GM, Ford, and Fiat Chrysler.

Now, according to Automotive News, the raid is complicating contract negotiations:

Contract negotiations traditionally ramp up after Labor Day, and union leaders are expected to announce, as early as this week, which of the three automakers they will look to reach a deal with first before turning to the others. As more details trickle out about kickbacks allegedly paid and training money misused, and with the current president reportedly now under investigation, trust among the rank and file could erode.

“Even if the relationships between the car companies and the union have not been damaged by this, there’s a big question on the membership’s mind,” Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich., told Automotive News. “An investigation doesn’t mean anyone’s guilty of anything, but they have to be questioning whether their leadership is corrupt and if they’re working for them.”

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The UAW will negotiate a contract with General Motors first, and then leverage that to get the same terms from the other two.

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These negotiations are expected to be contentious for lots of reasons, including American factories closing down, a big shift to electrification and autonomy and a possible economic downturn looming.

3rd: The Renault-Nissan Alliance Is Functioning Well 

Just kidding. Let’s check in on it via Reuters:

Former alliance director Arnaud Deboeuf will become PSA’s industrial strategy director under Chief Executive Carlos Tavares, himself a former Renault (RENA.PA) second-in-command, the rival French carmaker confirmed on Tuesday.

Deboeuf’s exit underscores deep tensions threatening to subsume the Renault-Nissan alliance in the wake of the November 2018 arrest of former Chairman Carlos Ghosn, now awaiting trial in Japan on financial misconduct charges he denies.

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Deboeuf’s send-off included a nice bit attacking his boss, Renault chief Thierry Bollore.

Deboeuf was well regarded at Nissan and even offered a senior executive role at the Japanese carmaker, as his relations with Bollore soured following Ghosn’s ouster, three sources told Reuters. But Bollore, a former Ghosn protégé who succeeded his absent boss as CEO in January, blocked the move.

“Thierry Bollore told me no one wanted to work with me ... and that I could not go to work at Nissan either,” Deboeuf said in a farewell email to colleagues seen by Reuters.

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4th: Volkswagen Is Back

Sales in the U.S. have recovered to pre-Dieselgate levels, reports Automotive News. Internally, that has been a milestone for Volkswagen, but their next goal is a bit more ambitious. The company wants to get to a five percent share in the U.S. market, or more than double what it is now:

Volkswagen’s U.S. sales were up 6.1 percent through July, to 215,796, while the industry as a whole is down an estimated 1.6 percent, according to reported results and estimates compiled by the Automotive News Data Center.

If its sales trend continues, including August results due this week, Volkswagen will be on track to top its U.S. sales for 2014 — the year before its costly diesel emissions scandal, when it sold 366,970 vehicles in the U.S. In 2018, Volkswagen’s U.S. sales totaled 354,064 vehicles.

Also helping dealers is the growth of Volkswagen’s Certified Pre-Owned program, up 16 percent through July to 64,000 vehicles, after experiencing a 26 percent increase in 2018. The automaker’s program was rebranded in April 2018 after years as Volkswagen WorldAuto Certified.

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The Atlas, Tiguan, and (somehow) new Jetta have been big hits for VW here.

Volkswagen has grown its sales this year in large part thanks to three nameplates: the Tiguan and Atlas crossovers and the redesigned Jetta sedan. Through July, Atlas sales had risen 31 percent from the same period a year earlier to 45,414, the Tiguan was up 4.7 percent to 66,299, while the Jetta has climbed 43 percent to 57,059.

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5th: Hyundai’s Unionized South Korean Workers Won’t Strike

They struck a deal on Tuesday to avoid their first strike in eight years. Which is no small deal, since this particular bargaining unit has a long history of striking.

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Per Reuters, emphasis mine:

Hyundai’s South Korean workers, who have staged strikes in all but four years since the union was created in 1987, had drawn media and public criticism for threatening to walk out despite their relatively high annual wage of 92 million won ($75,866) on average as of 2018, plus benefits and job security.

The deal came with tightened export curbs by Japan threatening to damage Asia’s fourth-biggest economy, weighing on an auto industry already struggling with production cuts and job losses in the face of a slowdown in exports to the United States, Europe and other countries.

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The terms of the deal aren’t ideal, but the union has Trump’s trade war to thank.

In a statement issued after the vote results came out, union leaders thanked members for supporting their decision to hold off from staging a strike “considering a U.S.-China trade war, a Korea-Japan economic war and the auto industry’s downturn”.

Fifty-six percent of Hyundai workers who cast ballots approved the deal, which includes a bonus equivalent to one and a half months’ salary plus 3 million won - totaling the lowest bonus payment since 2000, union officials said.

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Best of luck to all involved.

Reverse: When Sweden Switched From Driving On The Left To Driving On The Right

From the BBC:

“Thrilling” is the word repeatedly used by Jan Ramqvist to describe how he felt about participating in a nationwide mission to get all Swedish motorists and cyclists to change the habits of a lifetime and begin driving on the right-hand side of the road for the first time.

“Everyone was talking about it, but we really didn’t know how it would work out,” explains the 77-year-old, who was just 26 and a newly qualified traffic engineer working in the city of Malmö when the potentially catastrophic changeover took place on 3 September 1967.

The day was officially known as Högertrafikomläggningen (right-hand traffic diversion) or simply Dagen H (H-Day). Its mission was to put Sweden on the same path as the rest of its continental European neighbours, most of which had long followed the global trend to drive cars on the right.

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Neutral: Can Ford Pull This Electric Thing Off?

We have felt this strategy is a bit more patchwork than what you see at other automakers. But you could argue as long as Ford keeps the truck market and secures a future there, it’ll be fine.