It’s 2019 and for some reason people are just figuring out that maybe GM has been... not great. That and more in the Morning Shift for February 27, 2019.
1st Gear: Opel Perplexingly Makes Something Called ‘Money’ Without General Motors
This one hits maybe a little too close to home for anyone who watched the death of Pontiac and Saab, Hummer, Oldsmobile, and Saturn. (There are Saturn fans out there, still, right?) We all read about market realities and changing landscapes and how these brands just had to go and there was nothing to be done. It was time for them to die off.
Well, one of the nameplates under the GM umbrella actually made it out and, annoyingly, seems not only fine but healthier without GM calling the shots, as a new Automotive News report profiles:
Opel called its 2018 profit “historic” after 20 years of losses under former owner General Motors.
The German brand and its U.K. sibling, Vauxhall, made a profit of 859 million euros ($979,000) in 2018 compared with a $204 million loss for the last five months of 2017 after PSA closed its acquisition of GM’s European business on Aug. 1 of that year.
AN’s Christiaan Hetzner points out that hey, it’s not fair just to levy all of Opel’s problems on GM, just, you know, a lot of the things we have always hated about GM:
[T]he building blocks for profitability were there. But there was always one piece missing.
That would be PSA Group CEO Carlos Tavares, who took on Opel’s powerful union to cut 3,700 manufacturing jobs in its uncompetitive factories in Germany and transferred 2,000 posts at Opel’s r&d center in Ruesselsheim, near Frankfurt to France’s Segula Technologies.
Tavares also focused on eliminating heavy discounting to maintain pricing, just as he did in turning around PSA. Total Opel-Vauxhall inventory, including independent dealers, stood at 195,000 vehicles at Dec. 31, 2018, a decrease of 32,000 from the end of 2017, PSA said Tuesday.
Heavy discounts and giant inventory are GM calling cards. Cutting them seems to have made some decent car designs profitable.
Maybe GM has a thing or two it could learn from Opel.
2nd Gear: UAW Suing GM Over Factory Not-Closures
Remember when GM was like “Hey! We’re gonna not close these factories but instead, uh, ‘unallocate’ them,” because closing them would violate its union deal?
Yeah, GM is getting sued over that. The UAW (along with everyone else in the world) has seen through GM’s plan, as the Detroit News reports:
In a larger restructuring announcement on Nov. 26, GM was careful in its language addressing production stops at Detroit-Hamtramck Assembly, Warren Transmission, Baltimore Operations and Lordstown Assembly in Ohio. GM said these plants would be “unallocated,” indicating that the products currently built at these plants would stop production without anything to immediately replace them.
The UAW alleges that use of the word “unallocated” deliberately avoids the words “idle or “close,” which are explicitly addressed in the 2015 agreement, set to expire in mid-September.
“Notwithstanding its obligations under that letter agreement,” the UAW wrote in its lawsuit, GM “has decided that the following plants will be ‘unallocated’ — which is a synonym for ‘closed’ or ‘idled.’”
GM refuted this claim in a statement Tuesday, but declined to comment further.
The lawsuit is seeking to keep Lordstown Assembly, Warren Transmission and Baltimore Operations up and running for at least as long as they were supposed to under the current union contract.
3rd Gear: Ford’s China JV Has ‘Quietly Begun’ to Lay Off Thousands
For the past few months, we’ve been following how the Chinese auto market, the biggest in the world, has slowed down for the first time. The repercussions are getting very real, as the New York Times reports this morning:
China’s slowdown presents the most immediate problem. Some of Detroit’s Chinese factories have slowed to a crawl. In the inland metropolis of Chongqing, where Ford builds cars like the compact Focus, three big assembly plants have been running at less than one-fifth of capacity. Ford’s joint venture in Chongqing has quietly begun dismissing thousands of its 20,000 workers.
You should go over the whole story, it’s an interesting and sober review of a market that we in America kept hearing was going nowhere but up.
4th Gear: Ford/VW Partnership Still Standing by the Punch Bowl, Talking About Going Onto Dance Floor
A few months back, Ford and VW announced a partnership to work together on driverless cars and other future auto tech and now, several months later, the two companies are... still talking about working together on driverless cars and other future auto tech, as the Freep reports:
Despite a report that Volkswagen plans to invest $1.7 billion in Ford’s autonomous vehicle partner, a person close to the negotiations tells the Free Press that the talks continue with no specific numbers on the horizon.
“Both parties are still at the table and will be for months before a deal is reached, if a deal is reached at all,” said a person who is involved with the meetings but not authorized to comment publicly.
I was particularly interested in how this deal would shake out, as whenever I think of VW and big corporate partnerships I just think of how it totally bungled its big plans with Suzuki in India a few years back.
5th Gear: Read This Profile of the EV Truck Startup that Got $700M in Amazon Money
I don’t exactly know why Rivian, the electric truck startup, immediately garnered the trust of the motoring press as legit. But I do enjoy reading about the company that picked up what I think would amount to several boatloads of cash from Amazon. What is life like when you get thrust into the spotlight? This profile from the Freep gets into it:
“Part of our culture, part of what I’ve worked really hard to embed is a level of humility and honesty with how hard this is. Very often not just … for new automotive companies but also for startups in general … there’s the desire to present what you’re working on as being far more complete than it is so that the (perceived) progress is 10 times the real progress. We try to achieve the opposite of that,” [RJ] Scaringe [founder and chief executive officer of the electric vehicle startup] said. “We’d rather under promise and over deliver.”
I don’t know if the whole article will get you a sense of if this company is overhyped or not, but t will give a view of what the company is up to at the moment, its goals and its fears.
At just 21 years old Italian Walter de Silva began a career as an automotive designer when hired by Fiat in 1972. Born on this day in 1951, de Silva would go on to lead design for Alfa Romeo, SEAT, Audi brand Group and finally Volkswagen Group, where he reigned from 2007 until 2015. During his career he would craft and sign off on a number of important designs for numerous automakers. Some of the designs he is responsible for include the 1997 Alfa Romeo 156, 2004 Audi A6, 2006 Audi TT and R8, 2006 Lamborghini Miura concept, 2010 Volksagen Jetta, 2011 Volkswagen Beetle, 2013 Lamborghini Egoista concept, and 2015 Volkswagen Touran, among many others. After leaving Volkswagen he started a women’s shoe company named Walter de Silva Shoes.
Neutral: What If Hummer Still in Production Today?
What other GM brands do you think could have lived if cut loose from big ownership? I fear... all of them.