This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?
1st Gear: Hyundai Goes Gangnam Style With $10 Billion Building Purchase
So, we're not the only ones buying a new pad as we expand.
Hyundai makes us look small time with a record $10 billion laid out for a site in the Gangnam district for their new HQ. Reuters says this freaked out their investors:
The conglomerate smashed the previous record auction price for a single plot of land in South Korea with its 10.55 trillion won ($10.14 billion) bid, more than triple the appraisal value.
It would be the highest price by far for a single piece of land in Asia since the global financial crisis, according to CBRE Research, topping the $3.6 billion paid last year by Hong Kong's Sun Hung Kai Properties (0016.HK) for a site in a commercial district in Shanghai.
Investors and analysts expressed alarm at the price that Hyundai was willing to pay for a site at a time when it could be pouring money into higher dividends or more factories. At the site, it plans to build an auto theme park and a hotel as well as new offices.
"The bid price is nonsense. I was stunned," said Kim Sung-soo, a fund manager at LS Asset Management and an investor in all the three Hyundai companies in the bidding group.
Buried in this article is the fact that there's a law in Korea that taxes excess corporate cash, which makes this kind of make a little sense. Man, though, can you imagine trying to be someone else trying to buy property in Seoul now?I'd be pisssssed.
2nd Gear: UAW Moving To End Two-Tier Wages
Partsmaker Lear has given in to UAW demands and will phase out the two-tier wage system that's been in place as a cost-cutting measure.
The two-tier wage system last decade won worker acceptance as car makers were struggling to survive, battling high production costs, overcapacity and slumping demand for U.S. trucks and sport-utility vehicles. Now that these companies have returned to health and are consistently profitable, rank-and-file union members have demanded the system be eliminated.
But auto makers want to move away from across-the-board increases that dig into profits when sales fall. They have been pushing the UAW to accept more variable pay, using profit-sharing, which allows labor costs to rise and fall based on profitability.
This is important shit, both for workers and automakers. Hopefully, they can learn to work together as they did after the Carpocalypse.
3rd Gear: The ZF And TRW Merger Is Weird
Transmission company ZF Group plus partsmaker TRW equals the second biggest automotive supplier in the world (Bosch is the biggest). Normally, you'd think of a merger leading to a large scale reduction in workforces as "redundancies" appear.
ZF and TRW, however, don't make a lot of the same gear and thus there seems to be less of a desire to cut at the moment.
According to Brent Snavely, they're even hiring:
"Currently we are in a recruitment phase. We have been adding people. If we could take on another couple of hundred people right now, we would in the area of engineering — software engineering," said John Plant, President and CEO of TRW.
This continues to be the smartest merger I've seen in a while. OR at least it appears that way. Am I wrong?
4th Gear: South Koreans On A Spending Spree
Not sure I needed to put "South" in that headline since, um, most North Koreans don't have any money to speak of.
Anyways, Bentley thinks the $250K+ car market in South Korea is about to get competitive as the country relaxes restrictions on imports and the won has made anyone holding the Korean currency a little wealthier relative to much of the world.
The company’s dealership in Seoul has paced a 133 percent jump in Korea deliveries this year through August to become the brand’s No. 2 retailer in the world, trailing only its outlet in Dubai.
“The success that we’ve enjoyed is actually being watched closely by competitors, and you’ll see greater investment focus on the market because of that,” Mackinlay said ahead of an event in Seoul today to mark the start of sales of the V-8 variant of its best-selling Flying Spur sedan, which sells for about $272,000 in the country.
See, it's not just Hyundai.
5th Gear: This Might Be A Good Kind Of Regulation
One of the better features to come out of the recession-triggered Dodd-Frank law was the Consumer Financial Protection Bureau. I worked briefly with the Better Business Bureau and also worked in the securities market briefly and the amount of predatory lending out there and shitty lending practices will astound you. It's an industry that craves oversight not only to protect consumers but to protect the lenders and their investors from their worst impulses.
Discrimination abounds, against minorities, against poor people, against the uneducated. It's pretty disgusting.
it's why I think this plan, as reported by David Shepardson, makes sense.
The new rules would mean oversight for 38 large non-bank auto lenders, including captive finance arms of companies like Ford Motor Co., Toyota Motor Corp., Honda Motor Co., Volkswagen AG and Nissan Motor Co. They would cover any non-bank that made 10,000 auto loans or leases in a year. The Consumer Financial Protection Bureau declined to provide a list of the 38, but said there are as many as 530 non-bank auto lenders.
Currently, only auto finance companies that are banks or bank holding companies — like Detroit-based Ally Financial Inc. — are subject to federal oversight. They are already overseen by CFPB, the Federal Reserve Board and other regulators.
The finance companies originate around 90 percent of non-bank auto loans and leases, and in 2013 provided financing to about 6.8 million buyers, the bureau said.
The CFFB has already pushed banks to return hundreds of millions of dollars to consumers. This isn't to say that there aren't legitimate reasons to charge people more for a loan, but " because they're black" isn't a legitimate reason.
Reverse: Oh Canada
On this day, the 20,000-car parking lot at Canada's West Edmonton Mall makes the Guinness Book of World Records as the largest parking lot in the world. The mall has held other records, too: At one time or another it's been the World's Largest Shopping Mall (5.2 million square feet, or about 48 city blocks), the World's Largest Indoor Amusement Park and the World's Largest Indoor Water Park (which includes the World's Largest Indoor Lake and the World's Largest Indoor Wave Pool).
[HISTORY]
Neutral: Have You Seen Any Shitty Lending? Either personally or from a friend?
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