This is the Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place at 9:00 AM. Or, you could spend all day waiting for other sites to parcel it out to you one story at a time. Isn't your time more important?
1st Gear: Now We Know Why GM Is Firing People
The New York Times reports on GM's second-quarter profit plunge, which explains why it pushed out the head of Opel and fired its chief marketing officer (although the jerseys had something to do with that). GM's overall net income fell 41 percent, or a billion dollars, to $1.5 billion. Revenue also fell by just under $2 billion, to $37.6 billion. And yesterday, GM said its market share during July dropped by nearly three percentage points (it is down two points for 2012 overall). The big spotlight, of course, is Europe, where GM lost $361 million, compared with an operating profit of $102 million a year ago.
As any prof would have told you in Econ 101, these numbers are moving in the wrong direction. Meeting with reporters this morning in Detroit, GM CFO Dan Ammann said GM had no immediate plans to close more factories in Europe (beyond the one it plans to close in 2016) and couldn't say when GM would make money there again. It's now lost almost $17 billion in Europe since 1999. The company pointed out that it earned a $2 billion operating profit in North America, and that it has been profitable for 10 straight quarters now since its federal bailout. Well, it's supposed to do that.
2nd Gear: Detroit's Share Is Disintegrating
GM's earnings results reflect some other gloom in the Motor City. Last month, GM, Ford and Chrysler held 43.1 percent of the car market, compared with 47.6 percent in July a year ago. Where did it go? Essentially to Asian car companies, although the Europeans picked up about a half a point of share. Toyota, Honda and Nissan pretty much have recovered all the share they lost due to the Japanese tsunami and earthquake and floods in Thailand last year. There are a couple of interesting numbers that go along with the drop in GM's share last month (although its new marketing officer calls it "a little blip.") First, Ford's share fell two points in July, and it lost share in both car and truck sales. Chrysler picked a little bit of share, about 0.3 points, so at least there's one Detroit company gaining. And, vehicles made by transplants (foreign companies building cars here) took 34.5 percent of the market. In other words, one of every three vehicles sold last month was produced in America by a non-Detroit company.
3rd Gear: You Can See It, But You Can't Have It (Yet)
Motor Authority found this video of BMW's performance hatchback, the M135i. Even though the announcer has an American accent, the car isn't coming to the U.S. The story, according to Motor Authority, is that BMW of North America was originally offered the car, but shot it down because "Americans don't buy hatchbacks." Thousands of hatchback sales here later, the BMW folks appealed for the car, but were told it was too late to modify it to meet American safety standards. Instead, Motor Authority says the U.S. will get a different coupe, labeled as a 2-series. But anyone who's in Europe can have fun driving this one.
4th Gear: No Minestrone for You
Bloomberg says Fiat is suspending new investment in Italy because of the European debt crisis. It says the situation is too unclear to pour any more lire into its home market. Fiat plans to give an update on its plans for its European factories at the end of October. "Difficult conditions persist in the European auto market, particularly in Italy where demand is approaching the lowest level since 1979," Fiat said in a statement. "Certain peers who are still heavily exposed to the European market are experiencing significant losses and have even had to announce plant closures." That would be Peugeot and Opel, although we're still waiting for more specifics from GM on its plans for an Opel turnaround.
5th Gear: A Big RAV Recall At Toyota
Reuters reports that Toyota is recalling about 760,000 RAV4s and 18,000 Lexus HS 250h hybrids to fix a problem with the rear suspension that could cause the vehicles to crash. The RAVs were made from were made from the 2006 through 2011 model years, while only 2010 models of the the 250h were affected. Toyota said it doesn't have a fix yet for the problem, which is basically that the suspension arms are rusting out after improperly performed alignments. It said it will notify owners when a solution is available. There have been nine crashes and three minor injuries. According to the Associated Press, NHTSA opened an investigation in June after getting several reports from drivers, including one who reported swerving across four lanes of traffic when the arm broke. Four drivers said they temporarily lost control of their vehicles, though no one has yet experienced... fiery death.
6th Gear: Celine Dion's Automotive Legacy
Advertising Age takes a look at what the auto industry can learn from the ads Celine Dion did for Chrysler back in 2003. (Yes, it's been that long.) It concludes that Chrysler basically wasted its money on the short campaign, which AdAge estimates was between $10 million and $14 million, and that car companies have to be extremely careful in relying on celebrities' appeal. Otherwise, the buzz over them can overshadow the car, as happened with Dion and the Chrysler Pacifica. Chrysler seems to have learned "half the lesson," AdAge says. Jennifer Lopez didn't do much for the Fiat 500, but Eminem and Clint Eastwood have clicked with consumers.
Reverse:
The Fed Says The American Economy Is Losing Strength {Associated Press]
Does the Giant Japanese Robot Really Exist? [Atlantic Cities]
VW And Porsche Are Officially Integrated Auto Group [Volkswagen]
Rhode Island Cops Arrest BMW Driver Going 135 In A 55 [Associated Press]
British Manufacturing Rate Down Most In Three Years [Telegraph]
Visiting South Korea's Aerotropolis [NYCAviation]
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