The Carlos Ghosn drama takes another turn, Aston Martin isn’t doing so hot, and China might no longer be the saving grace that GM has long counted on. All that and more in The Morning Shift for January 7, 2020.
Less than a week after former Nissan CEO and chairman Carlos Ghosn’s truly bizarre flight from Japan, the Japanese government is making all sorts of noise about still bringing him to justice. That could be a little hard to do, considering Ghosn is currently in Lebanon, a country that generally doesn’t extradite its citizens, but in what I’m sure is a totally definitely 100% unrelated move entirely, Ghosn’s wife, Carole Ghosn, now has a warrant for her arrest out as well, Reuters reports:
Tokyo prosecutors on Tuesday issued an arrest warrant for Carlos Ghosn’s wife Carole for allegedly lying in testimony, as officials sought ways to bring the fugitive car industry boss back for trial on financial misconduct charges.
The perjury arrest warrant accuses Carole Ghosn of falsely claiming not to know, or to have met, people connected to a company that received payments from Nissan Motor, part of which it subsequently transferred to a firm owned by Ghosn.
Going after family members in the hopes of exerting pressure seems like a go-to move for the prosecutors who don’t have a lot of options for getting Carlos to return. That said, it sure as hell does feel a bit manipulative.
The Financial Times points out as well that this could all be tied to Carlos’ plans to speak publicly for really the first time since the first allegations of financial misdeeds at Nissan emerged:
In a move that has already sent shudders through Japanese officialdom, Mr Ghosn previewed the Wednesday press conference by telling a US television interviewer that he would show “actual evidence” and reveal the names of Nissan executives and Japanese government officials whom he claims plotted a coup that brought him down.
A spokeswoman for Mr Ghosn and his family in Beirut pointed out that Mr Ghosn’s fourth arrest in Japan last April came after he announced he was to hold a press conference. The day before he was due “to speak out freely for the first time, they issued an arrest warrant for his wife Carole Ghosn”, the spokeswoman said.
“Nine months ago, Carole Ghosn voluntarily went back to Japan to answer prosecutors and was free to go without any charges,” said the spokeswoman, who added: “The issuance of this warrant is pathetic.”
The FT went on to point out that while Japan might not have much luck getting Carlos, Carole is an American citizen, and the United States does have an extradition treaty with Japan.
While the only people getting even richer in this world are the people who are already rich, somehow that is not translating into a bonanza for Aston Martin. Here’s Reuters:
It has blamed weak UK and European markets and subdued demand for its Vantage model and said on Tuesday those conditions continued through December, leading to a 7% drop in wholesale volumes for 2019.
“From a trading perspective, 2019 has been a very disappointing year,” Chief Executive Officer Andy Palmer said, as the company’s shares plunged as much as 16%.
While Aston spent 2019 ploughing money into a new factory to build its first sport utility vehicle (SUV), the highly lucrative market a number of carmakers have entered, rivals such as BMW-owned (BMWG.DE) Rolls-Royce and Volkswagen-owned (VOWG_p.DE) Bentley appear one step ahead.
A lot of the the sales advantage for Bentley and Rolls appear to revolve around the fact that they’re shoving gaudy SUVs out the door, and Aston Martin isn’t, but Aston is looking to fix that as soon as the DBX rolls off the line this year.
All power to Bristol, which is a British car company that cares not for making cars, and doesn’t care if it has an SUV or not. Is Bristol still a thing?
While American automotive sales are still above 17 million for the fifth straight year, we’re definitely showing signs of a slowdown, Automotive News says:
Ford Motor Co., reporting 2019 sales results three days after its rivals, said its fourth-quarter deliveries slipped 1.3 percent to 601,862.
But the numbers were enough to lift the industry above the 17 million mark for an unprecedented fifth year in a row, despite an overall decline of 1.2 percent.
AN’s take is probably more optimistic than I would ever dare, as automotive sales have been propped up by predatory lending practices for a while now, and that sort of business model is unsustainable. Not to mention that the bulk of the U.S. economy has essentially been flat for a while now (remember the mantra: the stock market is not the economy!), and that’s not exactly conducive to car buying. Plus automakers have been cutting smaller and cheaper cars from their lineups, in the hopes of enticing customers to buy bloated SUVs with their thick profit margins.
Does anyone else smell smoke?
If the American economy isn’t doing so hot, what about the second-largest global economy in China? General Motors says it’s taken a steep dive over there, too. Here’s Bloomberg:
General Motors Co. warned pressure on its China business will persist this year as the world’s biggest auto market suffers a prolonged slump, exacerbated by a lackluster economy and the trade war with the U.S.
GM and its partners sold 3.09 million vehicles in China in 2019, according to a statement Tuesday. That represents a 15% decline for a company that was once the top foreign automaker in China.
“We expect the market downturn to continue in 2020, and anticipate ongoing headwinds in our China business,” Matt Tsien, Shanghai-based head of GM’s China business, said in the statement.
It quickly emerged in the wake of Dieselgate that it wasn’t just Volkswagen cheating on emissions tests, it was damn near everybody. Now Daimler’s shareholders are Big Mad about the whole thing, because they ended up taking a bath, the FT says:
More than 200 institutional investors are seeking €900m in damages from Daimler, alleging that the Mercedes-Benz owner failed to disclose the use of diesel emissions cheat devices.
Lawyers in Germany claim shareholders including banks and pension funds saw stock that was once worth more than €90 a share fall to approximately €60 in 2018 after regulators accused the carmaker of installing illegal software in its vehicles.
In a filing with a court in Stuttgart, Germany, Daimler is accused of violating its obligations under capital market law by not mentioning the existence of the devices in its financial reports or in ad hoc announcements.
In a nutshell, the issue is that companies have a general legal obligation to disclose information that may affect its share price to their shareholders, especially information that may hurt that share price. Since Daimler didn’t tell everyone “hey, we’re doing crimes over here!” its shareholders feel they have a right to sue. I know it can seem like semantics, but don’t get me started on what does or does not constitute legal grounds to sue. Just know that, for right now, a lot of Daimler’s shareholders feel like this is the best way to get what they want.
Of course, this whole thing could’ve been avoided by not doing crimes, but I’m clearly not an automotive executive brain genius.
The first Chevrolet trucks went on sale. Chevy introduced two four-cylinder trucks for the 1918 model year, both cowl chassis designs that were only outfitted with sheet metal on the front.
And why is it the Ford Fiesta ST?