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Nissan-Renault’s partnership isn’t on the best of terms, Hyundai’s leadership is getting younger, the U.A.W. is gearing up for a big summer, and much more on The Morning Shift for Wednesday, the 12th of December.

1st Gear: The Nissan-Renault Alliance Is Getting Rockier By The Day

Carlos Ghosn, the now former chairman of Nissan and Mitsubishi, was arrested last month and has been in jail in Japan ever since being accused of financial misconduct. But Ghosn’s arrest has since deepened into a (possibly much wider) scandal, as Automotive News reports on Wednesday.

From Automotive News:

A top priority for investigation is Renault-Nissan BV, the Netherlands-based joint venture owned 50-50 by Nissan and French automaker Renault, three people familiar with the issue said.

But Nissan is also targeting as many as a dozen other Nissan-affiliated subsidiaries set up in the Netherlands, one of the people said. Japanese prosecutors are already looking into some the companies with Nissan’s assistance, and the probes could last months, the person said.

The expanding dragnet could lead to more criminal charges, one person added.

[...]

The move signals a new stage in the scandal that could bring investigations to Renault’s doorstep in Europe. Opening the second front could also undermine any hope of quick resolution and further complicate delicate relations between the Japanese and French automakers.

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What exactly might have went down in the Netherlands? A shell company, among other things.

Also still under investigation is Zi-A Capital BV, another Netherlands-based entity Nissan set up in 2007 as a venture capital company. The company was flagged by Nissan auditors who could not find evidence of venture investment, a person familiar with the case said. Zi-A instead seemed to be paying for real estate that Nissan now claims was acquired for Ghosn’s personal use.

The subsidiaries were established in the Netherlands, partly because it was seen as a kind of neutral territory between Japan and France. The Netherlands also has lower tax rates than Japan and more relaxed rules governing the disclosure of executive compensation.

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The Auto News report came within minutes this morning of Reuters coming out with their own Nissan story, a hot exclusive. It turns out the companies’ boards aren’t getting along ahead of a meeting Thursday of Renault’s board. Stop contacting our board, Renault has told Nissan, according to Reuters’ sources.

Renault’s board meets on Dec. 13, and the findings of Nissan’s investigation will be shared at the meeting where Ghosn’s future could be also debated, one of the sources with knowledge of the matter said.

The French firm told Nissan not to contact its directors ahead of the meeting, because such contact was outside the agreed channels for communication of the sensitive findings, the source said.

Nissan offered last week to brief Renault’s board about findings on what it considers proof of wrongdoing by Ghosn, said a second source who has knowledge of the matter but declined to be identified as it was confidential.

But Renault advised Nissan to brief its lawyers instead, which led to a meeting between the Japanese firm’s officials and Renault’s legal teams early this week in Paris, the person said.

The Japanese automaker later invited Thierry Bollore, who was named Renault’s deputy CEO with the same powers as Ghosn a day after his arrest, as well as board members, to examine the contents of the findings, said the source.

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It’s almost impossible not to see the whole case as political, with Ghosn the pawn in a multinational power struggle, as the French government owns a significant chunk of Renault. What’s more, Ghosn is still Renault’s CEO and chairman, though he may not be after tomorrow’s board meeting.

Was Ghosn whacked, possibly because he wanted to deepen the alliance’s ties? You be the judge.

2nd Gear: There’s a Big Executive Shake-Up At Hyundai 

In an attempt to inject some new blood into the family-owned company Hyundai has appointed Albert Biermann, a former BMW executive, to head its research and development. Biermann previously served as group president and this could be good news, at least for enthusiasts. Some of the credit for Hyundai’s recent focus on improved driving dynamics, like with Genesis, and the wonderful G70 I drove a couple months ago, belongs to Biermann.

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Beyond that, more than a dozen other executives were also moved to new roles across the company.

From Reuters:

In all, 17 top executives were reassigned across the group including at Hyundai Motor Co and Kia Motors Corp - which together form the fifth-biggest automaker in the world.

The move follows the promotion of Euisun Chung in September to Hyundai Motor’s executive vice chairman, moving him closer to succeeding his 80-year-old father, Mong-Koo Chung, as group chairman.

[...]

Hyundai Motor Co chief innovation officer Youngcho Chi was promoted to president, as the automaker tries to catch up with its rivals in future technologies such as car-sharing.

Biermann, a former BMW performance vehicle development official, is one of several foreign executives that heir apparent Chung, 48, has brought into the traditionally Korean-dominated group.

In October, Thomas Schemera, also a former BMW executive, was appointed to lead product planning for autonomous cars, connected and electrified vehicles, while Luc Donckerwolke, a former Bentley design chief, was appointed to oversee design at Hyundai and Kia.

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Altogether, the shake-up seems to show that Hyundai is increasingly serious about taking on the Germans. Genesis is a step directly in that direction, though it remains to be seen whether American consumers will latch on. (I honestly hope they do.)

3rd Gear: The UAW Is Preparing For War

The union represents some 156,000 employees in the Big Three, and has a $760 million strike fund to boot, even though American autoworkers still deserve better. But that strike fund suggests they shouldn’t be underestimated as they’re not afraid to use it, the Detroit Free Press reports. The UAW will head in to negotiations this summer for a new labor contract. The current deal expires in September.

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From the Freep:

“I think there’s an understanding on both sides, which is different than when I started,” said [Bernie Ricke, president of UAW Local 600 in Detroit and chairman of the national negotiating committee for the UAW at Ford.]

“There’s an understanding, now, that basically we need each other. Workers understand that the company needs to be successful, but we need to share in that success. There’s nothing wrong or bad about workers sharing in the gains the company makes. Long-term security is an issue.”

Dennis Williams, past president of the UAW, noted in 2017 not only that he rebuilt the strike fund but that his team was not afraid to tap it.

“A strong strike fund, the UAW has found through the years, is the best deterrent to a strike,” said Harley Shaiken, a professor at the University of California, Berkeley, and a national expert on labor. “The choice is not some jobs or no jobs. It’s about a fair share of a rebuilt and highly successful company right now. The competitive challenges for GM are very real. But their workers have gotten GM through the roughest times. They want to share in the better times.”

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Union membership has increasingly been catalyzed by recent layoffs at both Ford and GM. And more plant closures could be in the offing, drawing more urgency to the talks.

“All three — GM, Ford and Fiat Chrysler — likely need to further reduce plant capacity in North America,” said Jon Gabrielsen, a market economist who advises automakers and auto suppliers. “If they talk about keeping one plant open, the companies will have to find another plant to close in North America.”

As of December 2018, GM has four of 12 plants operating below recommended capacity. Ford has three of nine plants operating at that level. And FCA has two of six plants operating below recommended capacity.

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The most recent upheaval in the auto industry can be at least partially attributed to President Donald Trump’s shortsighted trade war, though changing consumer tastes are also a factor, as automakers heavily scale back on sedans, a decision that may or may not come back to haunt them.

4th Gear: Former Ford Argentina Executives Get Prison Time for Abetting Torture

More than forty years after a military coup, two former Ford executives were found guilty of helping the government dictatorship arrest and torture 24 union members in 1976.

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From the Associated Press:

The court said that factory manufacturing director Pedro Muller and security manager Hector Francisco Sibilla targeted workers and gave information to security agents for their kidnapping and torture after the 1976 military coup.

Muller was sentenced to 10 years and Sibilla to 12 years. Santiago Omar Riveros, a former chief of the army’s fourth battallion, was sentenced to 15 years.

[...]

Prosecutors had accused them of giving names, ID numbers, pictures and home addresses to security forces who hauled the workers off the floor of Ford’s factory in suburban Buenos Aires to be tortured and interrogated and then sent to military prisons.

The trial that began last year is part of a series of prosecutions focused on corporate support for the brutal military dictatorship of 1976-1983, when about 30,000 people were killed or disappeared, according to human rights groups.

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The factory built the Ford Falcon which, the AP says, also became a “symbol of state terror,” as it was commonly used to disappear alleged dissidents.

5th Gear: China’s Making Its High-Speed Trains More High Speed

You ever been on a high-speed train? I feel like if everyone in the States rode one just once, they’d see what all the hype was about. I took one between Barcelona and Madrid last summer, and there was a speedometer in every car. It fuckin’ ruled.

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Anyway, China has the actual quickest trains in the world, with locomotives that can go up to 217 mph. But according to Bloomberg, that still isn’t quick enough.

China Railway Corp. is studying measures to further increase the pace of its high-speed trains, according to Qi Yanhui, a deputy head at the technology and information department of the state-owned operator.

[...]

“There’s definitely a plan, but it’s hard to tell when,” Qi said at a media briefing Monday in Beijing, adding any increase in speed would need substantial tests and should be justified by demand.

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Demand, schmemand. I demand quicker trains, right now.

Reverse: RIP Olds

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Neutral: Will Nissan-Renault Survive?

My guess is it will in some form, as both companies need each other, but the whole Ghosn episode has been a weird and unexpected blow.