The new Cadillac XT6 doesn’t seem to stand a chance against the new Lincoln Aviator, some United Auto Workers idiots are in trouble for not handing out watches, a dealer owner faces five centuries of jail time, and Trump is blaming everyone but himself for the recession scare. All that and more for The Morning Shift for Monday, August 19, 2019.
1st Gear: What Exactly Is Cadillac Doing?
The new Lincoln Aviator is a handsome, all-new and very powerful mid-size luxury crossover with a hybrid option, and the also all-new Cadillac XT6 is none of those things for some reason. That should scare Caddy, as Automotive News relishes:
Lincoln crafted the Aviator on a new rear-wheel-drive platform with a plug-in hybrid option. It replaces the MKT as the brand distances itself from the blander designs and confusing names it favored earlier this decade.
Cadillac, which has been working to rebalance its sedan-heavy lineup since replacing President Johan de Nysschen last year, brought the XT6 to market with a single powertrain. There’s no hybrid or plug-in variant, and the Super Cruise hands-free driving system won’t be offered until later, even as the brand positions itself as the pinnacle of General Motors’ technology and electrification efforts.
The Aviator costs less, is more powerful and has won widespread praise from critics for its distinctive styling. Reviews of the XT6 have been more mixed.
What’s happening here is Lincoln is doing everything it can to not seem like old American luxury and also not seem like an expensive Ford. Meanwhile Cadillac is still sticking to its old American luxury pricing and seemingly embracing being an expensive General Motors product. What happens a year from now when nobody can blame Johan de Nysschen anymore?
2nd Gear: Who Has Time For Hybrids?
Automakers, all of which rake in billions of cash a year and constantly complain about margins and investing in new technology, are now complaining about having to “choose” between developing hybrid vehicles or fully-electric vehicles, as The Detroit News outlines:
“If you pick one path and go with it, then it significantly reduces your development costs,” said Sam Abuelsamid, industry analyst with Ann Arbor-based Navigant Research. “If you know you’re going full-EV, you don’t have to design hybrid powertrains. The downside is that if people don’t buy EVs, you’re stuck.”
Ford has said it will introduce its EVs alongside hybrid and plug-in hybrid variants of most models in its lineup, bridging the gap between traditional internal-combustion engines and the electric vehicles most predict will dominate the industry at some point. All told, Ford plans to spend $11 billion on electrification over the next few years to bring 16 battery-electrics and 24 hybrids to market.
Fiat Chrysler has committed nearly $10 billion to develop more than 30 hybrid or electric vehicles worldwide, including Jeeps. More than half of its portfolio, depending on geographic region, will be electrified before 2023.
I don’t really care if companies feel like they’re going to fall behind on electric vehicle development if they get too distracted building hybrids, because you know what, they’ve had hybrid technology for decades. Tesla made full EVs sexy almost a decade ago. There were signs, and there was time, and now there should be action.
And plus, consumers buy Toyota and Ford’s hybrids. The problem is GM couldn’t sell too many, so now it’s salty:
GM has already tried the hybrid route, said Doug Parks, GM’s vice president of autonomous and electric vehicle programs. Its Volt hybrid and the hybrid variants of other models were not big sellers, and GM sees more opportunity spending all of its research and development dollars on the battery-electrics it thinks are the endgame.
“We’ve been on this path for a while,” he said. “We’ve done a lot of hybrids, but we think that EVs are the real answer. We think they’re the long-term answer.”
If there’s a theme to today’s Morning Shift, it’s that maybe General Motors tries to execute interesting ideas, like a luxury brand, or hybrid vehicles, but something inherent to the company holds it back. Just a thought.
3rd Gear: Watch The Time, It’s (Allegedly) Time For Crime
The federal government’s investigation into the United Auto Workers union is ramping up, charging its ninth former employee with wire-fraud and money-laundering in a case that now involves union representatives for Fiat Chrysler and General Motors, so far.
The crime this time? Allegedly buying a bunch of watches for members and slipping the budget under the table to some friends, and then just never giving anybody the watches that were actually made, Automotive News reports:
In 2013, the training center jointly run by General Motors and the UAW ordered 58,000 custom-made watches — enough to give one to every GM hourly worker and have plenty left over.
But they were never handed out. Today, the $4 million order remains packed away in a warehouse near the Detroit River.
Still, federal investigators say, the deal accomplished what it was intended to do. The UAW official who arranged it collected a $250,000 kickback. Two others split $95,000 disguised as payments for “furniture.” That still left well over $1 million in profit for the vendor — a Philadelphia chiropractor who got into the watch business solely to recoup a bad loan he had made to a friend of one of the union officials.
That’s just one of the conspiracies that prosecutors detailed last week when filing wire-fraud and money-laundering charges against Michael Grimes, an assistant in the UAW’s GM department who retired last year. Grimes, who is accused of collecting nearly $2 million in illicit benefits over more than a decade, is the ninth person charged in a corruption investigation by the U.S. Justice Department.
Grimes is also charged with bribing vendors for up to $900,000, and over a $1,000,000 in kickbacks from vendors on orders for UAW jackets and backpacks. If you’re going to go through the effort and swag out, you should at least spread the love. I mean, I’d be marginally less mad as a member if I actually had my UAW watch.
4th Gear: More Pitiful Car Crime
Former National Independent Automobile Dealers Association president and GM dealership owner Andrew Gabler and his former finance manager Chad Bednarski are in deep shit with the federal government for a fraud scheme that allegedly pulled millions from banks and customers, Automotive News reports:
The federal government accuses the former president of the National Independent Automobile Dealers Association of defrauding four banks and credit unions as well as General Motors by using fake vehicle sales and fraudulent loan applications to pocket millions of dollars in a four-year scheme.
The plot, which ran from about January 2015 until January of this year, led to losses of nearly $1.9 million to S&T Bank, an Indiana, Pa., lender that provided vehicle floorplan financing to the dealerships, federal prosecutors said. It also led to undisclosed losses with other financial institutions, according to court records.
If convicted, Gabler faces up to 510 years in prison and a fine of $17 million, while Bednarski faces 330 years in prison and an $11 million fine, though actual sentences would depend on the seriousness of the crimes and prior criminal history, according to the U.S. Attorney’s Office.
The two are also accused of reporting fake car sales to receive dealership rebates, as well as having customers pay for service contracts on their cars without actually submitting any paperwork, thus customers receiving no actual coverage.
5th Gear: Everything Trump’s Doing Isn’t Working, So How Is This His Fault?
The economy is looking bad and the President is looking for someone to blame,. Since this is Trump, that means the people he appointed to avoid this, via The New York Times:
He has insisted that his own handpicked Federal Reserve chair, Jerome H. Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession.
“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”
But even as he returns to Washington facing new pressures, Mr. Trump did not seem to anticipate a quick resolution to the trade war. “The tariffs have cost nothing, in my opinion, or certainly very little,” in terms of pain to American consumers and businesses, Mr. Trump insisted, adding that “China is eating the tariffs.”
“China would like to make a deal,” he said. “I’m not ready.”
Oh boy. Who wouldn’t tank the global economy just to own the people on the TV? He’s not mad. He’s laughing, actually.
Reverse: 110 Years Of Racing At Indianapolis
Neutral: What Was Your Favorite Thing About The Last Recession LOL?
I was fortunate enough to be relatively insulated from the previous recession given the fact that I was still a child with no job or mortgage, thankfully. But that also makes me really curious to hear from you just how bad it was, and how I should be preparing for the next five years of possible turbulence!?