Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the stories you need to know.
1st Gear: Is This How It’s Going To Be?
Six months behind schedule, Tesla (sort of!) hit a long-sought milestone this past weekend of making 5,000 Model 3 sedans in a seven day span, and the automaker pulled out all the stops to make it happen. Elon Musk has been sleeping on the factory floor, something several news reports can attest to. A makeshift tent for another assembly line was cobbled together, as I’m sure you’re aware.
All in all, it sounds like it’s been a bruising experience, and now Reuters is helping illustrate why:
A tense and short-tempered Chief Executive Elon Musk barked at engineers on the Fremont, California assembly line. Tesla Inc pulled workers from other departments to keep pumping out the Model 3 electric sedans, disrupting production of the Model S and X lines. And weekend shifts were mandatory.
One worker characterized Musk in an unpleasant light, with Reuters summarizing his remarks as saying the CEO spent Sunday morning “snapping at his engineers when the around-the-clock production slowed or stopped due to problems with robots.”
And the rush to hit 5,000 units per week by the end of the quarter caused strain elsewhere at Tesla’s Fremont factory, amplifying questions of whether that sort of production pace can be maintained.
For instance, this:
“They were borrowing people from our line all day to cover their (Model 3) breaks so the line would continue to move,” said a Model S worker on Sunday.
Which caused this:
Because of the focus on the Model 3, the S line is about 800 cars behind, the worker said.
“They’ve been throwing Model 3s ahead of the S to get painted to try to assure that they make their goal of 5,000,” the worker said. “The paint department can’t handle the volume.”
Luckily for Tesla, it has another Musk-set goal to hit for 2018's third quarter: profitability. Onward, I guess.
2nd Gear: Automakers Hate The Trump Tariffs
President Donald Trump is considering a 25 percent tariff on imported cars for ... national security reasons. And ahead of a public hearing later this month, automakers are pulling out all the stops to try to explain why it’d be a disaster for their business, as Bloomberg reports:
Here’s one example:
On behalf of members GM, Ford and Fiat Chrysler, the American Automotive Policy Council says any increase in U.S. tariffs on cars, trucks and parts will undermine the companies’ economic contributions to the country
Volkswagen hates the idea, too:
The company “does not see how continuing imports of automobiles and automotive parts at current levels could impair U.S. national security” and says that “this proposition — supported by no U.S. motor vehicle manufacturer — is implausible”
Yeah, they all hate this idea.
3rd Gear: GM Readying Some Robot Taxis
Last month, we snagged a set of emails from the San Francisco mayor’s office that pointed to General Motors’ ambition to launch a pilot program in the city for a fleet of totally driverless cars.
Turns out, GM’s plans to launch in the city are far more expansive than the emails lead on. As Bloomberg found out, there’s a lot already in the works:
General Motors Co. has created its own ride-hailing platform and quietly built one of the largest charging stations in the U.S. to get its Cruise self-driving car unit ready to enter the robo-taxi business next year.
Cruise has installed 18 fast chargers in a parking facility near San Francisco’s Embarcadero, the well-trafficked boulevard along the city’s eastern shoreline where Uber Technologies Inc. and Lyft Inc. have busy drivers. And GM’s self-driving car unit has been testing its own Cruise Anywhere ride-hailing app and fleet-management system, said people familiar with the matter.
A number of hurdles remain, but GM sure seems hellbent on hitting its 2019 goal to deploy driverless cars.
4th Gear: Hyundai Strike
Hyundai’s preparing for the possible blowback of new U.S. tariffs on the auto industry, but now it has a more immediate issue on its hands: unionized workers in the automaker’s South Korea unit have voted to strike over stalled wage discussions, according to Reuters:
Its shares slid to eight-year lows after the union, which has voted to strike every year for the past six years, said on Monday that nearly three-fourths of its 44,782 voters voted in favor of the strike action.
“We have not been able to narrow differences in key issues, making it difficult to reach a preliminary (wage) deal easily,” the union said in a statement.
Union negotiators later on Tuesday decided to hold off on starting the strike until July 10, when they will discuss a strike plan again, a union spokesman said.
The union walked out of the wage negotiations in late June, after Hyundai Motor proposed wage increases and bonuses which the union said fell short of expectations.
The union wants a 5.3 percent increase to basic monthly wages, Reuters says. Talks are supposed to resume Wednesday, and the union hopes to have a deal in place by July 30.
5th Gear: Mexico Will Probably Hit Back If The U.S. Strikes
Trump has antagonized Mexico from the moment he took office, but things between the president and our neighbor to the south could really heat up soon, now that Mexico has elected as president Andrés Manuel López Obrador, a staunch leftist.
And if the U.S. goes ahead and slaps tariffs on Mexico’s auto export, the president-elect’s advisers are already suggesting he’ll hit Trump back.
If the United States slapped duties on Mexico’s auto exports, the government should retaliate against U.S. businesses, a top economic adviser to presidential election winner Andres Manuel Lopez Obrador said on Monday.
The veteran leftist, who won by a landslide on Sunday, says he wants friendly relations with the United States. However, he has vowed to take a firm stand against efforts by U.S. President Donald Trump to impose his will on Mexico.
Graciela Marquez, Lopez Obrador’s designee for economy minister, said the new administration should push back against “protectionist” moves by the United States on trade, backing the policy of the outgoing Mexican government.
Reverse: Aw Hell Yeah
Neutral: The Trump Tariff
Automakers are flipping their damn wigs over Trump’s proposed 25 percent tariff. You think he’s actually going to go through with this?