No new Chevy Bolts will leave the factory until GM and LG can stamp out their battery issues, Uber and Lyft’s driver shortages aren’t going away, and dealerships in Louisiana are reckoning with the damage caused by Hurricane Ida. All that and more in The Morning Shift for Tuesday, August 31, 2021.
1st Gear: The Bolt Has Been Paused
That’s just about the most efficient way I can describe what’s going on with the Chevy Bolt, as GM confirmed separately to The Detroit Free Press and The Verge on Monday that new Bolts will not be made until it and LG are confident they can put problem-free batteries in the car. GM’s prioritizing replacement for the some 140,000 Bolts on the road — makes sense — and until that’s settled, the Bolt’s just going to go away for a minute.
As for how long that will take, GM doesn’t know. While GM CEO Mary Barra reaffirmed the company’s commitment to LG — a critical partner in its new Ultium EV architecture development — every other comment that GM’s made to the press indicates that LG is going under the bus. Here is GM saying it is “not confident” LG can make good parts, via the Free Press:
“If we took the battery stock that’s in the field right now or at a warehouse, we’re not confident that it is defect-free,” [GM spokesman Dan] Flores said. “Because we are not confident that LG has the capability to build defect-free products, we’ve put the repairs on hold and we are not building new Bolts. We’re not going to start recall repairs or start building new Bolts until we’re confident LG will build defect-free products.”
That is quite damning! It’s the textual equivalent of the gritted teeth emoji. I would not want to be present at any meetings between GM and LG personnel out of fear I’d cringe to death. GM went on to say the two companies understand what the issue is, they just don’t know why it’s developing in the manufacturing process. Which is almost more frustrating, in a way.
LG is cooperating and providing GM the data it requests, Flores said, noting LG is as eager as GM to fix the problem.
“It’s in everybody’s best interest if we speed the repairs along as best as we can,” Flores said. “Both LG and GM understand the significance in what we’re doing here and we’re committed to doing the right thing for our customers.”
GM and LG know the defects are a torn anode tab and a folded separator in the modules. The presence of those two defects in the same battery cell increases the risk of a fire, Flores said. But GM and LG do not know what is causing those defects in the manufacturing process. They also do not know if the defects are in every Bolt that is recalled, or just a few.
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This is clearly going to take a while. Ultimately I’ll credit GM for being up front about this, rather than dodging the severity of the issue. Seems like it’ll keep dodging the blame, though.
2nd Gear: The Ride Sharing Driver Shortage Isn’t Easing Up
Much like the semiconductor shortage, or the truck driver shortage, the shortage of Uber and Lyft drivers has been an ongoing issue throughout the course of the pandemic. Also like the semiconductor shortage, the pinch is being felt not by the executives of the pertinent companies, but their employees and customers. The cost of the average ride through one of those apps has increased 92 percent between January of 2018 and January of this past year, based on data CNBC cited from Rakuten. CNBC posted an informative update on the situation today:
“The companies don’t really look at us as human beings, and they just consider us as profit,” says Ben Valdez, a driver and volunteer coordinator for the group Rideshare Drivers United. “Once everything started to slow down, I was making... I think it was around $85 dollars for 12 hours.”
Uber’s website says drivers make anywhere between $22 per hour in cities like Orlando, to $37 an hour in cities like New York. Lyft has a long list of incentives and bonuses for drivers. But for those who are still relying on ride-sharing platforms to make a living, the companies are not offering enough.
As NPR pointed out earlier this month, it’s a mistake to think that when fares go through the roof, driver earnings increases just as well.
Drivers are earning more, but [Rideshare Guy founder Harry] Campbell said Uber is raking in the most from the steep fares.
For instance, for a fare that’s $100 instead of the normal $50 because of peak customer demand, the driver is not making double, even though the rider is charged twice the typical fare.
Campbell said in this situation, Uber drivers are no longer paid a percentage of the cost of the trip. Instead, Uber pays drivers a set amount for the time and distance of the drive, plus a bonus if demand is high. In other words, when drivers are most needed, their pay is decoupled from what customers are paying.
“Uber is making a big percentage on this ride,” Campbell said. “The worry is that Uber will keep increasing their take over time since there is no transparency.”
So drivers have the ability to get more rides because there are fewer drivers around, however there will probably be fewer customers despite the increased the demand because no rider wants to pay a double fare if they can avoid it. Even if drivers get that fare, their take is only slightly better than it’d be in pre-pandemic conditions, all while Uber and Lyft stand to make in cash. Many drivers have shifted to delivery services, like DoorDash, Uber Eats and so on, that have become increasingly popular throughout this whole ordeal.
3rd Gear: Ida’s Ravaged Everything, Including Dealers
More than a million homes and businesses across Louisiana and Mississippi were left without power after Ida swept through the region on Sunday, the AP reported. It could be weeks without power for some, and a combination of rising temperatures and humidity could make it feel like it’s 105 degrees out there through the middle of the week. Our hearts go out to everyone impacted.
Dealerships have certainly been impacted as Automotive News reports. Lost power seems to be more the concern than flooding or serious damage affecting inventory, at least among the dealers in this story:
Ray Brandt Auto Group has nine stores in the state. Several are clustered around New Orleans. The group said in a Facebook post that all of its dealerships would be closed on Monday. Southland Dodge, a Dodge-Chrysler-Jeep-Ram-Fiat dealership in Houma, La., closed Saturday in anticipation of the storm. Premier Automotive Group’s five Louisiana stores experienced no major damage but lost power, dealer principal Troy Duhon told Automotive News. The group’s corporate office was vandalized and a vehicle was stolen from its Honda store in New Orleans, he said. “The good news is there’s no major [storm] damage,” Duhon said. “This is nothing compared to Katrina. In Katrina, we lost 1,200 cars.”
The levees appeared to do what they were designed to do, unlike during Katrina. That’s a relief, but this is also very much a moving target as storms like Ida become stronger, if not more common.
4th Gear: Several Chrysler, Dodge Jeep And Ram Models Will Not Be Built This Week
The Ram 1500, Jeep Cherokee, Chrysler Pacifica, Voyager and 300 and Dodge Charger and Challenger are the latest nameplates that will see production paused in the coming weeks as a result of the semiconductor shortage, Automotive News reports:
The ongoing chip shortage has forced Stellantis to halt Ram 1500 production this week at its Sterling Heights Assembly Plant in Michigan.
The Sterling Heights facility, which employs 7,068 and operates on three shifts, will be down for one week. The plant also had downtime in July.
Sterling Heights is just one of several Stellantis sites cutting production.
The Belvidere Assembly Plant in Illinois, which builds the Jeep Cherokee, and the Windsor Assembly Plant in Ontario, which handles the Pacifica and Voyager minivans, are down the weeks of Aug. 30 and Sept. 6.
The Brampton Assembly Plant in Ontario, which assembles the Dodge Challenger, Charger and Chrysler 300, is down this week.
I’ve run out of comments to make on ceases in production, so let’s move it along.
5th Gear: An F1 Race Has Been Dropped From The Calendar, And The Teams Are Probably OK With That
The Japanese Grand Prix was recently canceled, and it appears there will not be a replacement for it. This leaves the 2021 schedule at 22 races, one less than the planned 23.
Although everyone loves racing at Suzuka, the teams are probably pleased with this, because they’ll still get to spend the same amount of money under the cost cap even though the championship has effectively become shorter. From Motorsport.com:
For this season, F1's budget gap is based around a $145 million limit, although there are certain exclusions such as marketing, driver wages, engine development and travel.
That $145 million figure is set if there are 21 races per season, with Article 2.3 of F1's Technical Regulations stating that for every extra event added teams will be allowed another $1.2 million.
That means for this year’s originally scheduled 23-race calendar, the limit will be $147.4 million.
However, thanks to a clause in the rules, teams will be able to stick to that higher figure even though the schedule is being cut back and their outgoings will be reduced.
Turns out that if a race is cancelled within three months of its projected date, the agreed-upon budgets remain in place. As the story notes, that’s welcome news for top teams like Mercedes and Red Bull, which are operating at the limit and keep sending each other bills for crash damage. $1.2 million isn’t much though, so I fully expect more bickering between garages, particularly as we get to the late rounds of the campaign. JR Hildebrand had a very good take on this, by the way.
Reverse: That Crash
Neutral: Minor League Baseball
On Sunday I went to a minor league baseball game — specifically, a Lehigh Valley IronPigs game against the rival RailRiders of Scranton-Wilkes Barre. Minor league ballgames are great because they offer all the pure joys of going to a major league game without the indignity off forking over dumb money for a decent seat or food or beer. They’re also fun because I literally couldn’t have given less of a shit who won or what happened. In fact, my greatest disappointment of the afternoon wasn’t that the game was a blowout, but rather that the fans seemingly haven’t adopted “Piggies” as an affectionate nickname for their hometown team. Y’all had one job.