More Renault-Nissan-Mitsubishi alliance drama, General Motors’ fight with the United Automobile Workers union, Walmart’s plan to go driverless and profit, Geely’s new autonomous-software partner, and how London will handle that little “pollution” problem it has. All of this and more in The Morning Shift for Wednesday, June 19, 2019.
1st Gear: Things Aren’t Great Without Ghosn
Carlos Ghosn, former Renault CEO and chairman of both Nissan and Mitsubishi, was a cheerleader for the Nissan-Renault-Mitsubishi alliance before his arrest on allegations of financial misconduct in November, to the point that his efforts to further intertwine the companies might have helped him get in trouble.
Now that Ghosn is out, though, things aren’t great in terms of keeping the band together. We thought we might be in a moment of rapprochement. But things have been taking a turn by the looks of it. They have been rocky. Tense, even! Renault thought about merging with Fiat Chrysler before the company backed out, with reports saying FCA was dissuaded at least partly by Nissan’s lack of support for the merger.
And now, it looks like the ties between Nissan and Renault are unraveling as we live and breathe. Just take this bleak new report from the Financial Times, which says, according to current and former employees, some departments that oversee shared parts of the Nissan-Renault-Mitsubishi alliance are being cut, and others “have received no new work in months”:
Now the “CEO office”, which oversaw the day-to-day running of the alliance functions and had several senior executives, is being disbanded, while other areas such as light commercial vehicles, sales and marketing, and communications are dwindling and dismissing staff, according to several people. [...]
Since Mr Ghosn’s arrest on charges that he denies, France and Japan have drifted further apart, in part because of an increasingly strained relationship between the two rival management teams.
“It is fair to say the relationship is as bad as we have seen in 20 years, and that is having an impact on joint operations,” said a second person close to the situation.
This has affected the alliance functions, with some being slated for closure, while others are simply ignored.
The Financial Times wrote that spokespeople for Renault, Nissan and the alliance all declined to comment on the report, and has more on the story here.
2nd Gear: GM Wants to Hire More Temporary Workers Amidst Union Disagreements
General Motors and its employees who belong to the United Auto Workers union have a summer of bargaining ahead in order to come to an agreement for a new four-year contract deal before the current one expires in September, as Bloomberg notes, but the looming reality isn’t cheery. GM has closed production plants (possibly breaking its existing union contract in the process), cut jobs and transferred employees all in the last several months. The union, for obvious reasons, is mad about it.
But Bloomberg reports that unnamed people familiar with the matter said GM wants to hire fewer union workers and more temporary ones at its U.S. plants. The justification GM gave was to trim costs for things like healthcare.
The union wants more investment into plants and thus more non-temporary jobs, but GM seems to be arguing that temporary workers will be good for union members—basically, that the non-temp workers will receive perks at the expense of the temporary ones. That’s a bad argument, and goes against a history of union gains helping working conditions of even non-union workers in the same field.
From Bloomberg, which also pointed out that Japanese carmaker plants are made up of about 20 percent temporary workers compared to 7 percent at GM:
GM’s argument is all dollars and cents. Workers at plants run by Japanese rivals Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. make $50 an hour in wages and benefits. GM’s workers cost $63 an hour, said the people, who asked not to be named because the company’s labor negotiations are private.
If GM can hire more temporary workers who are paid less and aren’t on the same health care plan, the automaker argues that it can offer job security for its unionized employees. GM would also like to find ways to reduce its roughly $900 million annual health care bill for union employees, including by getting greater contributions from workers, the people said.
Bloomberg reports that a UAW spokesperson declined to comment on the situation, and has more information about what’s going on here.
3rd Gear: Walmart Wants to Cut Out Delivery Drivers in Order to Up Profits
People cost money, and companies want to spend as little money as possible—hence that whole “robots are coming for your jobs” talking point that really translates into “management is coming for your jobs.”
Walmart is stepping further into that game as well, with Bloomberg reporting that the company wants to start working on driverless delivery in order to cut costs.
Due to “runaway shipping costs,” Bloomberg reports, Walmart’s online sales aren’t as profitable as the company would like. Walmart calls that shipping its “middle mile,” and its U.S. President and CEO Greg Foran said it would be a “no brainer” to go driverless because the idea is that it’ll cut middle-mile shipping costs in half.
Here’s some context on costs, via Bloomberg:
Driving the demand is the boom in online shopping that has helped cause a severe shortage of truck drivers that tops 60,000 unfilled long-haul positions, according the American Trucking Associations. That has sent costs soaring for a job that is among the most dangerous due to the risk of wrecks and long periods spent on the road.
Of course, this revolution won’t happen tomorrow or anything, no matter how badly software companies and carmakers would like you to believe that line. “Driverless” car technology is far from perfect, and will be for a long time.
4th Gear: Geely Has an Autonomous-Car Software Partner
Walmart isn’t the only company getting more into driverless cars, though. Chinese automaker Geely has decided to partner up with an unsurprisingly Swedish software firm to work on autonomous technology, Reuters reports. That software firm happens to be a place called Zenuity, a joint venture between Volvo, which Geely owns, and Swedish technology group Veoneer.
Reuters reports that the new Geely deal involves Geely Auto, Polestar, Lynk & Co and Lotus, which Geely bought a controlling stake in a couple of years ago. The deal is welcome news for Zenuity, which was formed by Volvo in 2017, according to the story:
Regulatory challenges and soaring development costs mean carmakers have delayed forecasts for the mass adoption of self-driving cars, putting pressure on suppliers such as Zenuity, which declined to comment on financial terms on Wednesday. [...]
It is competing with larger rivals in self-driving technology, where U.S. companies are leading the way, with Google’s Waymo last year winning the first approval to test cars without safety drivers on Californian roads.
Zenuity, according to Reuters, also got approval for hands-free testing in Volvos on Swedish highways this year. Maybe we’ll see a self-driving British sports car out there next.
5th Gear: London Is Trying Not to Be So Bad About This ‘Pollution’ Thing
Pollution is kind of a problem in London, Bloomberg reports, with some parts of London going over their annual air-pollution limit just five days into the year in 2017. That’s why London and its lawmakers are pushing people toward public transport and emissions-free driving.
Bloomberg reports that cars are a central focus in that push, but that Shirley Rodrigues, London’s deputy mayor for environment and energy, said the idea isn’t to be anti-cars, it’s to be anti-pollution. Here’s the deal, via Bloomberg:
London’s lawmakers aren’t against cars and vans driving through its most congested parts, as long as they turn electric soon. [...]
As well as increasing spending on cycle paths and widening sidewalks to make streets more inviting for pedestrians, streets have narrowed in many places. Khan introduced an ultra-low emission zone that charges older, more polluting cars a levy to drive through central London.
Together, the measures are aimed at coaxing people out of cars and onto public transport in a bid to reduce harmful emissions.
London has been a standout in forcing away cars out of its center, with its congestion pricing zone probably being the most famous in the world. As London goes, perhaps so goes the rest of us.
Reverse: The First Woman in Space Returns to Earth
Russian astronaut Valentina Tereshkova, the first woman in space, landed on June 19, 1963, according to the Encyclopedia Britannica. She had been in space since June 16 of that year, and made 48 orbits in 71 hours.
Neutral: Have You Ever Felt Like a Robot Is Coming for Your Job?
No one can replace you, of course. You’re you.