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Mazda Takes Driver's Seat Aboard The Struggle Bus

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Hard times continue for automakers across the world, BMW CEO asks Boris Johnson to not screw up Brexit, and hackers are going to ruin cars. All this and more in The Morning Shift of Thursday, August 1, 2019.

1st Gear: Mazda Out-Struggles All The Other Struggling Automakers

If you’ve been reading this website at all over the last, oh, I don’t know, eight months or so, then you know the cars are not doing so hot. Back in May, Mazda announced its operating profit slumped 43 percent in the latest fiscal year, which is bad. But it’s most recent quarterly earnings report is even worse.


From Automotive News:

Mazda Motor Corp. reported a 79 percent drop in quarterly operating profit as it continues to struggle with declining U.S. and Chinese sales, while a strengthening yen also cut into its bottom line.

Operating profit at Japan’s No.5 automaker was 7.0 billion yen ($64 million) in the first fiscal quarter ended June, versus around 33 billion yen ($302.8 million) a year ago and less than half of an average forecast for 18.5 billion yen from analysts polled by Refinitiv.


This, according to Automotive News, is Mazda’s worst first-quarter performance since June 2012.

Mazda is an interesting case because, unlike most other companies that are trying to manage gigantic industry-shifting changes like electric and autonomous vehicles, Mazda has largely opted out of that whole R&D push. Instead, it’s continuing its forever quest to become a premium brand, cleaning up its messy U.S. dealership network, and creating a very fuel-efficient gas engine.

Which is to say, although it is struggling sales-wise just like every other automaker, it has carved out a completely different path for how it wants to change that. Only time will tell if it’s going to work.

2nd Gear: Toyota Sued In Australia For Faulty Diesel Filters

Here’s a refreshing change: instead of intentionally lying about how well their diesel filters worked, Toyota simply made bad ones. That, at least, is the gist of a new class-action lawsuit in Australia against the automaker.


More from Reuters:

According to a statement on its website, Banister Law, together with Gilbert + Tobin, filed the suit in the Federal Court alleging some vehicles were fitted with defective diesel particulate filters meant to trap and burn soot from the engine.

“The affected vehicles ... require time consuming and costly repairs, including repeated vehicle servicing and repeated replacement of the (diesel filters) in its entirety,” Bannister Law said in the statement.


The class-action lawsuit covers anyone who purchased a Hilux, Prado and Fortuner from October 1, 2015 to July 26, 2019. The Hilux, according to Reuters, is Australia’s top-selling car.

3rd Gear: BMW CEO To Boris Johnson: Please Don’t

Schrödinger’s Brexit continues apace, and now that professional goofball Boris Johnson is Prime Minister, matters are surely to take a turn for the dumber.


Automakers are worried about this, just like everyone else, for the same reasons as everyone else: it tosses the entire country into a morass of unpredictable trade rules and economic uncertainty, so everyone who possibly can will take their business elsewhere.

Which is why BMW’s CEO Harald Krueger said during an earnings call that he desperately wants Boris Johnson to suddenly become a completely different person:

Leaving the common trading bloc without a negotiated trade deal would be a lose-lose outcome for both Britain and the European Union, Krueger said in a call to discuss the company’s second quarter earnings on Thursday.

“Listen to the economy and listen to the people. He needs to be in a dialogue with business. I would visit Johnson to tell him this,” Krueger said in response to a question about what advice he had for the British prime minister.


Good luck with that.

4th Gear: Democrats Go Easy On GM During Debates

After two days of Democratic presidential candidate debates in Detroit, GM may be breathing a sigh of relief because they got off pretty easy.


As Reuters summarizes, GM was expecting to get hammered and went so far as to distribute fact sheets to reporters. But few of the candidates even mentioned GM by name despite the company cutting tens of thousands of jobs.

When they did happen to bring up GM, it was either as a brief aside or as one of many examples of President Trump’s broken promises to the working class. Insofar as GM was a topic of conversation, it was part of a much broader one about automation, the deteriorating quality and quantity of American jobs, and separating good health care from employment.


This is good, because as much as GM is a big, important company, there are many more voters who do not care about GM.

5th Gear: Internet-Connected Cars Mean Hacked Cars

Internet-connected cars offer all kinds of safety and convenience improvements. But it also means your car is connected to the internet and, as we know all too well, once something is connected to the internet, someone is going to try and hack it.


A recent report about car hacking by the group Consumer Watchdog is making the media rounds because it warns that mass car hacks “could lead to Sept. 11-level casualties,” according to the Detroit Free Press:

“Millions of cars on the internet running the same software means a single exploit can affect millions of vehicles simultaneously. A hacker with only modest resources could launch a massive attack against our automotive infrastructure, potentially causing thousands of fatalities and disrupting our most critical form of transportation,” the group warns.

The report highlights what it describes as the key security flaw in connected vehicles, noting that the potential vulnerability is growing because of the increasing number of such vehicles on the roads.


A spokesperson for an auto industry trade group brushed off the report as fear-mongering and an attempt to garner attention before an upcoming major cybersecurity conference. The spokesperson added that, in essence, there’s nothing unusual about finding vulnerabilities and then patching them.

This is both correct and also terrifying, because when your computer gets a virus or is hacked, it is inconvenient and annoying but generally not life-threatening.


Consumer Watchdog advocates for cars to come with a “kill switch” that can instantly log the car off. I wish humans came with that, too.

Reverse: Roller Coasters Are Cars


Neutral: Does Having An Internet-Connected Car Worry You?

I’m not sure how much else there is to say about Mazda and slumping car sales, so let’s talk about car hacking. Does buying a car connected to the internet give you pause? Do you want your car to be on the internet? Are you worried it will get hacked?