Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: Ford May Have Given Up On Sedans, But GM Hasn’t
In fact, GM is investing $175 million into a plant in Lansing, Michigan, all to make more of them, according to The Detroit Free Press. More than that, these will likely be Cadillacs, a brand which has had a turbulent recent past, with its CEO Johan de Nysschen ousted in April and its sedans not selling well in the U.S., though they’ve been doing better lately and reasonably well in China.
The money will be invested at GM’s Grand River plant, where it builds the CTS and ATS, as well as Chevy Camaros.
Here’s the Freep:
The money will pay for new tooling and equipment for a project that will halt production of two Cadillac sedans and replace them with two yet-to-be-named products.
GM’s new cars to be built at the Lansing plant are expected to debut sometime before 2021.
“Cadillac is on the cusp of rolling out the most aggressive product portfolio expansion in the brand’s history,” Steve Carlisle, Cadillac’s president, said in a media statement. “The continued investment in our North American facilities helps ensure we will remain on the forefront of manufacturing technology as our next generation of luxury vehicles are launched.”
Here’s some more context from The Detroit News:
A Cadillac spokesman would not comment on the name of the new car, but said the brand would continue with its alpha-numeric naming pattern, unlike Ford Motor Co.’s Lincoln, which is in the middle of shedding its MK badges.
GM spent $211 million in retooling at the Lansing Grand River plant in 2016, a project that included a 32,000-square-foot addition to the body shop for future Cadillac sedans. The plant currently employs nearly 1,600 employees and operates on two shifts.
2nd Gear: Audi Has An Interim Boss After Its Actual Boss Was Arrested
Audi CEO Rupert Stadler was arrested yesterday in the ongoing fallout of Dieselgate, after prosecutors in Germany worried that Stadler might suppress evidence if allowed to walk free. Abraham Schot, a sales executive, was named Stadler’s interim replacement.
Stadler has been under fire from the media, politicians and VW’s powerful trade unions for his handling of the scandal, but he survived a management reshuffle announced in August thanks to backing from the Piech and Porsche families that control VW.
Schot joined the VW group in 2011 after having worked as president and CEO of Mercedes-Benz Italia. He has been Audi board member for sales and marketing since last September.
Peter Mosch, deputy chairman on Audi’s supervisory board and head of its works council, said labour representatives had backed a move to appoint Schot as interim CEO to ensure that Audi’s business did not suffer from the leadership crisis.
“For the employees it is now important that the interim CEO returns the company to calmer waters, drives the (diesel) investigation and brings it to a conclusion, but mostly keeps the day-to-day business in view,” he said in a statement.
Audi is VW’s most profitable business by some margin, though it has put $30 billion aside in anticipation of fines related to Dieselgate. Even before his arrest, Stadler was a controversial leader, and his contract, according to Reuters, started off as a sham to begin with.
In May 2017, Stadler was awarded a five-year contract extension until the end of 2022, but only because of a closed-door pact among supervisory board members that he would not serve out his full term, two sources close to the company’s supervisory board told Reuters at the time.
Stadler has enjoyed backing from the Porsche and Piech families who control Porsche SE, the family’s holding company which has a 52 percent stake in VW.
Stadler is close to the families because of his prior role at VW, where he was chief of staff to Ferdinand Piech, the former chairman and chief executive of VW.
Piech and his cousin Wolfgang Porsche, who currently heads the family clan that controls VW, are grandchildren of Ferdinand Porsche who developed the iconic VW Beetle.
I, too, have a five-year contract to blog for Jalopnik, though by mutual agreement of all parties have also agreed not to serve out my full term.
3rd Gear: Mitsubishi Is Doing All Right?
So says its chief operating officer Trevor Mann, in an interview with Automotive News. Let’s go straight to the tape (bolding theirs):
One of your big priorities was to get finances in order. How is that going?
We are completely on track in terms of the midterm plan. We plan to go from about 1 million vehicle sales to 1.3 million globally. We also aim to increase our revenue by 30 percent and return to a 6 percent margin. We are ahead of the profit target [Mitsubishi’s margin was 4.5 percent in its 2017 fiscal year, which ended March 31]. We are also ahead of the volume target at 1.1 million [for the 2017 fiscal year]. Overall, I’m quite pleased. We are doing well.
You have stayed profitable, right?
Even though we originally forecast a loss [for the 2016 fiscal year] after the crisis [Mitsubishi was embroiled in a mileage manipulation scandal], we didn’t make a loss for the full year.
More interestingly, Mann talked about what kind of tariff it would take for Mitsubishi to build its cars in the U.S. It’s a bigger number than what I would have thought:
U.S. President Donald Trump has talked about raising import tariffs. Does it make sense to localize below 80,000 when tariffs are involved?
We do in some countries around the world where we sell below 80,000. For example, in some ASEAN countries, we have local manufacturing on a CKD [complete knockdown] production, with a certain level of localization. From my previous experience of being in charge of manufacturing and supply chain, a tariff would need to be above 35 percent to make CKD worth it. You have got to overcome the cost of setting up the plant as well as the packaging and logistics costs of individual parts.
Thirty-five percent! Though, who knows, we may yet get there.
4th Gear: Speaking Of Tariffs, Canada Is Mulling Its Options
Our northern neighbors already approved an aid package worth 867 million Canadian dollars last year for their softwood lumber industry, following Trump administration tariffs. The car industry, of course, would be a much bigger monster, though Reuters says the administration of Prime Minister Justin Trudeau is considering things, even if an aid bill goes into the billions.
After Trump slapped tariffs on Canadian steel and aluminum on May 31, government ministers promised to support the sectors, and Innovation Minister Navdeep Bains told Reuters the same kind of aid could be ready for the auto industry.
“We’re examining all options ... our view is that if any such action is taken, we’re going to support our workers,” he said in an interview last week.
“The message I would convey to the auto sector workers is — we have your backs.”
The bill could run into billions of dollars, depending on the extent of government support for the industry, which represents about 500,000 direct and indirect jobs and contributes around C$80 billion ($60.5 billion) to the economy a year.
5th Gear: Mercedes Is Worried About Its Aging Workforce
And they are taking measures to fight misconceptions over it, including, Reuters reports, by setting up an exhibition.
One initiative Daimler has developed is an exhibition to challenge stereotypes about aging. It has already been visited by 80,000 people, including 2,500 of its factory managers and has now been brought to Berlin and opened to the public.
Visitors are asked to choose between the “young” or “old” door to enter the exhibition. Many retired visitors, who obviously feel young at heart, come in through the “young” door.
Once inside, you can take tests to measure memory, balance, ability to work in a team, the tightness of your grip, how high you can jump and how easily you can relax.
This story is more interesting than just the exhibition, I assure you.
In addition to the exhibition, Mercedes has introduced demographic audits across the company to encourage employees and management to openly discuss the age structure of their teams and address ways to promote cooperation between young and old.
Initiatives that have come out of that process include the launch of a corporate video platform where older workers can post YouTube-like tutorials on complex working processes to pass on their expertise to the next generation.
The company has also launched formal joint toolmaking training for teenage apprentices and employees aged over 50 and is testing ergonomic tools, such as an exoskeleton that reduces muscle strain for workers installing parts overhead.
Other ideas include a system to help workers swap shifts more easily; allowing older staff to work part-time as they approach retirement and hiring retirees for short-term projects.
Ah, nevermind, this one can’t be saved. Exoskeletons are cool, though.
Reverse: An Utter Mess At The 2005 U.S. Grand Prix
Everyone could’ve played this one a little better.
Neutral: Will Sedans Ever Die?
I think the answer’s no, but I’ve been plenty wrong before.