This is the Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place at 9:00 AM. Or, you could spend all day waiting for other sites to parcel it out to you one story at a time. Isn't your time more important?
1st Gear: It May Be Hot, But Car Sales May Not Be
Investors Business Daily says Tuesday's auto sales reports are likely to show that the market is cooling down from its pace at the beginning of the year. It says economists are expecting an annual rate of 13.9 million units. That might be a little better than May, but below the average of 14.5 million for the first four months of the year. We've been telling you about troubling economic news, in terms of consumer confidence and jobs, so even if June beats what the economists predict, there are warning signs ahead.
Among the individual car companies, Investors says sales at Toyota, Honda and Nissan ought to be up by double digits, because last June's sales fell in the wake of the Japanese earthquake and tsunami. Chrysler sales also ought to be up significantly. General Motors and Ford are the wild cards, although both are expected to report sales gains. June is a key month because automakers want sales to keep climbing as the industry segues into summer. However, that nasty storm that hit the mid-Atlantic this weekend is likely to have hurt late-June sales, and may affect holiday week sales, too.
2nd Gear: Hip Hip, Chin Chin, Mercedes Confirms CLS Shooting Brake
Mercedes-Benz finally made it official this weekend: it will sell the CLS Shooting Brake (or station wagon as we know it in the States). The shooting brake, first displayed as a concept at the 2010 Beijing show, goes on sale in the UK in September. As yet, there are no plans to sell it here, and Mercedes probably will only build about 10,000 a year. "In essence it represents an unprecedented version of a sports car with five seats and a large tailgate.," Mercedes says in its press release. Or to put it more succinctly, it's the latest iteration of the CLS, which was introduced in 2004, and which Mercedes calls a four-door coupe, although we think of it as a sedan.
It's full of luxury touches, like an optional wood floor for the luggage compartment. But the car also features the extensive use of aluminum, including frameless doors made from deep-drawn aluminum panels with extruded sections. The doors are 52 pounds lighter than conventional steel doors. The tailgate, hood and substantial parts of the suspension and engines are all made of aluminum too. The shooting brake will be available with an inline 4-cylinder diesel engine or V6 CDI. There are rumors of an AMG version, too. The four is top-rated at 146 mph and the six at 155 mph. Mercedes is also giving the shooting brake the same LED headlights that it offers on the CLS coupe. Pricing will be announced later.
3rd Gear: Fiat To Chrysler: Thank You? No, Thank You!
Barrons (sub. required) has an interview with Sergio Marchionne, who lays it right on the line. "The Fiat Group has a future because of Chrysler…. There's not a single doubt in my mind that I want the rest of it." And the reason why is pretty clear: since its government-sponsored bankruptcy, the leaned down Chrysler is shaking its money maker. Max Warburton, an analyst at Bernstein Research in London, estimates Chrysler's earnings before interest, depreciation and taxes, or EBITDA, at about $6.4 billion this year.
Yes, there is some guess work involved, and Chrysler doesn't have operating margins approaching those of Ford. But, Chrysler is looking like an awfully good bet for Fiat, which paid about $2.2 billion for its Chrysler holdings thus far. Perhaps the biggest plus for Fiat, says Barrons, is the hope that Chrysler will continue to improve through next year. If nothing else, says veteran analyst Ron Harbour, Chrysler has invigorated its product lineup — or at least, you might say, it's invigorated its image. (P.S. this Gear photo is our tribune to Nora Ephron. Bonus points to the first person who matches it with the film.)
4th Gear: Duck! VW Issues A Recall For Shattering Audi Sunroofs
NHTSA says Volkswagen has agreed to recall 13,172 Audi Q5 models because the sunroofs can shatter. The recall involves 2012 model year vehicles built from June through December of last year. NHTSA says some of the vehicles are equipped with a front sunroof panel that could break in extremely cold temperatures. If that happens, the driver and passengers could be showered with glass, which could "distract the driver, increasing the possibility of a crash." (That's an understatement.) VW dealers will start replacing the roof panels next month.
5th Gear: Holden Workers Pour Themselves Some V8 Parts
The Sunday Mail reports that the GM Holden plant in Elizabeth, Australia has been hit by a multi-million dollar parts-theft ring. Workers at the plant apparently helped themselves to $2.5 million (Australian) in V8 engine and transmission parts. They sold the parts on Ebay and through car clubs on the east coast of Australia. Each of the engines are worth about $10,000, but they were being sold for $1,500 to $2,000 on the black market.
Police discovered a V8 engine "during an unrelated inquiry," according to the paper. It says Holden officials were unaware that the parts were missing until police alerted them of their suspicions that a theft-ring was underway. So far, police have recovered several engines as well as automatic and manual transmissions. Okay, now we were under the impression that parts were numbered, and we also figured someone kept count of how many engines and transmissions were supposed to be built each day. How did they get the stuff out of the plant without anyone seeing? By the way, GM received a $275 million bailout from state and federal governments in March to ensure that the plant would stay open.
6th Gear: Toyota Rethinks Manufacturing In Elvis Country
I have a story in the new issue of Forbes about Toyota's assembly plant in Blue Springs, MS. They haven't let very many outsiders see it, for a good reason. Blue Springs, about 20 minutes from Tupelo, is a new approach for Toyota: smaller, leaner, and less complicated than the other factories it's built in North America. This is the factory that Toyota delayed for nearly two years because of the recession and the recall crisis. Both of them exposed a lot of problems in the way Toyota managed its business, including the fact that it had just gotten stuck in its ways.
The Blue Springs plant shows a lot of re-thinking. For one thing, Toyota has cleared out all the clanking machinery overhead. For another, it lightened up equipment on the assembly line (nothing that anybody picks up weighs more than 30 pounds). Workers no longer have to grab parts from racks next to the line: boxes of the parts they need are put together and delivered as they need them. The place also isn't very noisy, which is a big surprise for anybody who's spent time in plants. Granted, the plant is just building the Corolla right now, which in complexity terms is like teaching a kid to bake muffins. But, there's a big open field out back where Toyota could easily put up another plant, whenever its sales justify it.
Meanwhile, we tried to get a few more details from Toyota on what it has planned for the sports car it's planning with BMW. There isn't much to tell yet, according to a Toyota spokesman: "Toyota and BMW are still at the stage of continuing discussions and exchanging information about the joint development of architecture and components of future sports vehicles, so at this time no decisions have been made concerning specific types of vehicles."
But he added, " Generally speaking, we think that BMW can bring us expertise in vehicle dynamics and performance while Toyota can bring its expertise and long experience in alternative powertrains to BMW." In other words, think Alfons Schuhbeck and Iron Chef Morimoto.
Stiff New Drunk Driving Penalties In Alberta [Calgary Herald]
BMW To Cut Temps, Hire Permanent Workers [Dow Jones, Via Fox Business]
Renault Cuts 200 Jobs At Flins Plant Near Paris [Reuters]
Worker Hurt At GM's Fairfax, Kansas Plant [Kansas City Star]
Ina Garten's Dream Car [New York Times]
GM Manager Found Guilty Of Torching Lover's Home [Toronto Star]
In keeping with our new discussion system, here's a place for you to own the floor. We're asking each day what you think about an issue that comes up in TMS.
Today, we'd like to hear your thoughts on Fiat's takeover of Chrysler. What have you liked about the relationship? What bothers you? Is there anything more you'd like to see them do? Remember there's no right answer or wrong answer. It's Neutral.
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