Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place at 9:00 AM every weekday morning. Here are the important stories you need to know.
1st Gear: That’s Not Happening
FCA CEO Sergio Marchionne has been rumbling about wanting a merger with another automaker for quite a while now. He thinks that consolidation within the industry would be beneficial for everyone. One of the companies that was mentioned as a potential partner for a merger was General Motors
Barra told analysts yesterday that GM is focused on its own profitability plans that take them through the next decade. Barra said she does see some need for consolidation in the industry, but GM isn’t one of the companies that need to consolidate.
Ford President of the Americas Joe Hinrichs also jumped in yesterday, even though he wasn’t asked, just to say that Ford also had no interest in a merger with FCA.
So, now that Ford and GM have both said they have no interest and we’ve definitively said that a merger like this won’t happen, look for them all to merge into one company, FDGMFCA, within the next few days.
2nd Gear: Ford Will Cut 700 Jobs
Ford plans to release nearly 700 hourly workers from its small car plant in Wayne, MI, the plant that builds the C-Max and Focus. Sales have gone down 22 percent so far this year after dropping 15 percent last year, so Ford is eliminating the third shift at the plant.
The workers being laid off all earn between $17 and $19 an hour, though Ford says that they should be able to find something for nearly all of the workers impacted by the change by early 2016. For those that cannot find a job, they will be eligible for 13 to 26 weeks of supplemental pay as well as unemployment, which will have them making nearly 75 percent of their salary.
The first 200 workers will be laid off in late June, 200 more in late July, and then the final batch in September.
3rd Gear: GM Miss
GM made $945 million in the first quarter of 2015. That sounds pretty good, but it’s actually less than analysts expected and led to GM stock tumbling four percent.
The reasons for the miss were losses in Europe and South America, as well as a $337 million write off to end production in Russia and another $150 million to handle the ignition switch crisis.
CEO Mary Barra has said that even though they may have missed targets, they will still meet their goals to improve profitability in 2015 and 2016.
4th Gear: Goodyear Goes To Mexico
Everyone seems to be opening plants in Mexico these days. Add a supplier to that list. Goodyear is reportedly planning on investing $550 million in a new tire plant in central Mexico.
The plant should initially have the capacity to produce six million tires per year (damn!) when it come on line in 2017. It should also create 1,000 new jobs. This investment is the latest in nearly $21 billion that has gone into Mexican auto production in the last couple of years. Mexico has lower wages and a number of free trade agreements that makes it an attractive place to send production, much to the chagrin of every other country that builds cars.
5th Gear: VW Is Number One, Kind Of
According to a recent survey of potential car buyers in China, Volkswagen is the number one brand considered, followed by BMW and Buick.
Here’s the thing, 20 percent of people surveyed would take a VW, but just 1,000 people were surveyed in 30 cities, or an average of 33 per city. That’s a fairly small sample size per city to get a real idea of just how popular a brand is in the country as a whole. Also, knowing the size of the Chinese market, it just seems hard to get a trend from that few people.
Just keep that in mind, China, when VW starts advertising that they’re the tops in this MNI survey.
Who should FCA merge with?
Contact the author at firstname.lastname@example.org.