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: Honda Is Trying To Fix Things
Between championing cleaner emissions, pushing out two widely-purchased sedans, and killing it on the racetrack, Honda has a storied history in the tail-end of the 20th Century to look back on. But things haven’t been well for awhile, and a lengthy, insightful piece from Reuters shows the company knows as much.
“There’s no doubt we lost our mojo – our way as an engineering company that made Honda Honda,” Chief Executive Takahiro Hachigo told the news outlet.
Along with more than 11 million recalls since 2008 over defective airbags, Honda’s also fell off in the industry-wide effort to develop electric cars. But Reuters spoke to more than 20 current and former executives and engineers at the company, who offered a candid assessment of the automaker’s decline and exactly how it’s going to get its mojo back that Hachigo knows is gone.
Here’s a snip:
They said Honda had become trapped by Japan’s “monozukuri” (literally, “making things”) approach to manufacturing. This culture of incremental improvement and production line efficiency, called “kaizen”, served the company well in the decades after World War Two, they said, but today’s challenges – electrification, computerization, self-driving cars – demand a more nimble and flexible approach.
Most importantly, they said, over the past two decades company executives in Tokyo were given too much control over research and development. In their view, this led to shareholder value being prioritized over innovation. There was a reluctance to draw on talent from outside Japan. In its quest to deliver for shareholders, Honda sought to maximize volume and profit and match the product range of its main Japanese rival, Toyota.
“The upshot was, as we obsessed about Toyota and beating it in the marketplace, we started to look like Toyota. We started to forget why we existed as a company to begin with,” Honda R&D President and CEO Yoshiyuki Matsumoto told Reuters.
2nd Gear: Ford CEO Meeting The Union First
As part of his first 100 days atop Ford’s food-chain, the automaker’s new CEO, Jim Hackett, has been conducting a full evaluation of where the company stands today. And, in a sign that’s surely going to create nice optics for him among Ford’s rank-and-file, Hackett plans to meet with the United Auto Workers first before chatting with the suits on Wall Street, according to Bloomberg.
The mid-September meeting in Detroit with United Auto Workers leaders from across the U.S. sends an important signal that the new boss is putting workers first, Jimmy Settles, the head of the union’s Ford department, said in an interview Wednesday.
“Normally, it’s the other way around, if it happens at all,” Settles said of the CEO meeting with union leaders before Wall Street. “Then people know that I care about you. You’re hearing it from me. You don’t have to hear about it from the media.”
The union also has to be feeling pretty good because Hackett, UAW officials said, “assured” them that no union workers will be laid off, Bloomberg reported, despite the fact that Ford plans to cut 10 percent of its workforce in North American and Asia this month.
3rd Gear: U.S. Sued Over Delayed Fines For Gas-Guzzlers
The question over what President Trump intends to do with the vehicle emission standards set by the Obama administration has been hanging in the balance for months. Along with that, after Trump took office, the National Highway Traffic Safety Administration suspended an Obama-era regulation that doubled the financial penalties for automakers who produce new vehicles that don’t meet minimum fuel-economy standards.
The Center for Biological Diversity, the Natural Resources Defense Council and the Sierra Club filed suit in the U.S. Court of Appeals for the Second Circuit, challenging the National Highway Traffic Safety Administration’s (NHTSA) decision in July to suspend a 2016 Obama administration regulation that more than doubled penalties.
Automakers had protested the hike, saying it could increase industry compliance costs by $1 billion annually.
NHTSA previously said the increased fine—from $5.50 to $14, according to Reuters—would amount to an additional $30 million in civil penalties per year, the news outlet reported. Automakers have pushed back, saying it’ll cause costs to spike.
And so far, the Trump administration has been keen to the concerns of automakers. So it’ll be interesting to see how this one plays out.
4th Gear: Lyft Plans Self-Driving Pilot
Lyft has been racing ahead to expand its marketshare in the ride-hailing industry, while entering the self-driving car melee much later than its competitors. But the company has been making huge strides as of late—launching a new, in-house engineering center for autonomous tech, a partnership with one of the leaders in the field, Google’s self-driving car project Waymo, and a partnership with startup nuTonomy, to launch a pilot program in Boston to test robocars.
And now, it has a new pilot project planned, this time on the west coast with Drive.ai. The project will entail ferrying Lyft passengers to their destination in automated cars, according to The Verge.
Initially, the pilot will involve a small set of passengers who will opt in to this program, Taggart Matthiesen, senior director of product of Lyft, told The Verge. He did not provide a specific number of vehicles or participants, but noted the self-driving car will have a Drive.ai safety driver behind the wheel to take over in case the artificial intelligence controlling the car fails, and of course, to meet California regulations.
Once a ride is requested, Drive.ai’s software will evaluate whether or not the route is feasible, said Carol Reiley, co-founder and president of Drive.ai. This may be a route that has been pre-selected, Reiley said, adding that the company’s self-driving technology can handle rainy and nighttime conditions.
Like Lyft’s other partnerships, details are scant for now—a launch date isn’t set, for instance—but if this confluence of autonomous tech activity comes together all at once, Lyft’s going to be well-positioned to advance its robocar ambitions in the coming years.
5th Gear: French Probing PSA For 2 Million Cars With Alleged Diesel Cheat
Maybe one day the endless probes of diesel emission cheats will come to a close, but for now, basically everyone’s being looked at. An investigation by French authorities into the PSA Group has determined that emissions cheat software has been used on an estimated two million vehicles made by the company, according to Reuters, citing a report from French newspaper Le Monde.
Here’s more from Reuters:
Paris-based PSA denies any use of fraudulent engine software, a spokesman said in response to the newspaper report, which sent PSA shares sharply lower. The stock was down 4.4 percent at 17.78 euros as of 1019 GMT.
So-called “defeat devices” restrict exhaust output of toxic nitrogen oxides (NOx) under regulatory test conditions while letting emissions far exceed legal limits in real-world driving.
PSA is one of four automakers being reviewed by French authorities, Reuters reports. Clean diesel. Hm, it just sounded so nice on paper.
Reverse: Nissan Goes To Europe
Can Honda fix itself? What do you think needs to be done to turn the ship around?