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GM to Invest $300 Million to Ramp Up Electric Car Production in Michigan

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General Motors invests a lot more in domestic electric vehicle production and hopefully takes the heat off, the United Auto Workers union has another potential scandal on its hands, Ford hires a former Silicon Valley financial guru and much more for The Morning Shift of Friday, March 22, 2019.

1st Gear: GM Appeases Trump, Ramps Up EV Production in Michigan

General Motors has been catching a lot of flak from President Trump for closing the Lordstown, Ohio plant, which made Chevrolet Cruzes, which no one bought.


Still, Ohio came up big for Trump in 2016, and if he is to win another four years, he’ll likely need Ohio in his corner again. Factory closings as production shifts abroad will not help his case.

So it is particularly noteworthy that, in the face of all his Twitter sniping, GM is expected to announce a $300 million investment in the Orion, Michigan plant to ramp up domestic EV manufacturing, according to Automotive News. That’s the plant where it builds the Chevrolet Bolt, and it should also announce plans to build “a new electric compact vehicle for Chevrolet.” I’m willing to bet it’s a crossover this time.


GM wouldn’t comment on the story, but an industry analyst said:

Jeff Schuster, a forecasting analyst at LMC Automotive expects GM to add up to four new EVs to the plant’s manufacturing mix over the next several years to make good on promises to electrify more of its lineup. “It’s essentially an all-electric story with an investment in EVs across several brands.”

Building an all-new electric vehicle in Orion would underscore GM’s gradual shift away from gasoline-fueled cars toward battery-powered models. The investment announcement will come at a time when the company is wrangling with the UAW and Trump over ending production at a car plant about a four-hour drive away in Lordstown, Ohio.

In addition, GM will formally endorse the new trade agreement between Mexico, Canada, and the United States, which will replace the North American Free Trade Agreement (NAFTA), another potential re-election item of concern for Trump.

At any rate, it’s good news for American workers, and it shows GM is putting its money where its mouth is about EVs.


2nd Gear: Feds Investigating UAW ‘Flower Funds’

Before I get to what the feds are investigating the UAW for actually using the flower funds for, you may be asking: what are flower funds?


The Detroit News, which broke the story, says:

Flower funds were created initially to pool voluntary contributions from union members for funeral flowers and to finance union election campaigns.


Mmhm, mmhm, nothing weird about a pot of money earmarked for funeral flowers and re-election campaigns, two very similar types of goods and/or services.

So what were UAW honchos allegedly using the “flower fund” for? Again, from The Detroit News:

Federal agents are investigating whether senior United Auto Workers staff were forced to contribute money to funds originally established to buy flowers for auto workers’ funerals, and whether union executives pocketed the cash, The Detroit News has learned.

Investigators are questioning whether UAW leaders threatened to send high-level staffers back to the assembly line if they failed to contribute to so-called flower funds controlled by union presidents, vice presidents and regional directors, three sources familiar with the investigation said.


As the article details, flower funds have a long history of being slush funds for union executive luxuries, a totally unpredictable outcome of the stated purpose of a fund being the heart-tugging flowers for funerals but the actual purpose being re-election campaigns. So, add this investigation to pile of the growing list of investigations and/or convictions into UAW corruption.


With Ford and GM both downsizing and the UAW gearing up for a battle against the former in upcoming labor negotiations, this is hardly the best time to be in the news for misappropriating funds meant to pay for funeral flowers. Then again, is there ever a good time for that?

3rd Gear: Ford Plucks New CFO From Silicon Valley

Tim Stone, the former Snapchat and Amazon financial executive, will be Ford’s new Chief Financial Officer starting April 15, according to The Detroit Free Press. (OK, if we’re being technical, neither Snapchat, which is based on Santa Monica, nor Amazon, with headquarters in Seattle, are Silicon Valley companies, but they’re both definitely Silicon Valley companies.)


Although Snapchat has struggled as a public company and Stone rubbed shoulders with the 20-something billionaire who ran it, he was previously CFO of Amazon Web Services, otherwise known as The Part of Amazon That Makes All The Money.

As expected, at least some industry watchers are skeptical a CFO from “move fast and break things” culture can work in the comparatively languid auto industry. From The Free Press:

Economist Jon Gabrielsen, who advises auto companies and suppliers, voiced concern.

“Amazon is a lighting-fast moving distribution company, which is the antithesis of a long lifecycle product development and manufacturing company like Ford. The two could not be more opposite in what you need to know and how you need to act,” he said. “It is so complex and different.”


Others are feeling good about it, because technology:

The decision to tap a CFO who most recently worked in social media marks a significant shift, said David Kudla, CEO and chief investment strategist with Mainstay Capital Management, a Grand Blanc investment adviser managing $2.5 billion in assets.

“Ford’s decision to hire Tim Stone for the CFO role demonstrates Ford’s continuing transformation to a new age auto company,” Kudla said. “This outside hire gives Ford a younger feel to their executive ranks with a CFO that has broad experience in the technology space.”


I might humbly suggest it’s less important what general sector of the economy someone worked in and more important about their particular personality and skillset.

4th Gear: Musk Asks Employees to Please Focus on Vehicle Deliveries

In am email to employees, Elon Musk told Tesla employees that vehicle deliveries are the most important thing over the next 10 days that round out the financial quarter, Reuters reports.


This comes on the heels of Tesla asking workers to volunteer to deliver 30,000 cars by the end of the quarter.

Anyways, from Musk’s email to employees, published in full at CNBC:

For the last ten days of this quarter, please consider your primary priority to be helping with vehicle deliveries. This applies to everyone. As challenges go, this is a good one to have, as we’ve built the cars and people have bought the cars, so we just need to get the cars to their new owners!


Some other things Tesla did recently: announce they were going to close all their stores then announce they weren’t and then slash retail employee compensation in a move apparently geared to coax resignations instead of having to lay people off. But, sure, any “help” from employees is appreciated.

5th Gear: Oslo Becomes First City to Install Wireless Charging for EV Taxis

Oslo, and Norway in general, is a global leader in EV standards. In another first, the city is installing wireless charging systems for electric taxis, which will have to be zero emission by 2023. From Reuters:

Norway’s capital Oslo will become the first city in the world to install wireless charging systems for electric taxis, hoping to make recharging quick and efficient enough to speed the takeup of non-polluting cabs.

The project will use induction technology, with charging plates installed in the road at taxi ranks linking to receivers installed in the vehicle, Finnish utility Fortum said on Thursday.


The hope is the charging mechanism will be efficient enough that the taxis can be charged while they’re waiting in queues to pick up passengers at high-traffic locations. That’s smart!

Reverse: Hummers!


Neutral: Hiring Executives From Outside the Industry?

Do you think it’s a good thing when an established automaker hires an executive from outside the industry? Is the learning curve for someone coming from, say, the tech sector too steep? Or does this business need more outside perspectives?