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 important stories you need to know.
1st Gear: Deal Or No Deal
Today Volkswagen will ask a federal judge to do the final sign off on its $14.7 billion settlement with owners. What’s not ready yet is the finalized fix for the cheating diesel cars. Regulators including the U.S. Environmental Protection Agency still have not approved that, according to Bloomberg.
What that means is that, for now, owners have just one option to pursue: the buyback. But that doesn’t mean VW is going to leave nearly half a million diesel cars un-fixed; they can’t. From the story:
A formal proposal by VW for a fix won’t be considered by federal regulators in an official review until after the settlement is approved by the judge. VW’s negotiations with the EPA have been fluid, said the person who asked not to be identified.
So far, regulators led by the California Air Resources Board have been critical of the carmakers’ attempted solutions. CARB has twice rejected VW’s recall plans — once in a January letter related to the 2-liter engines and again in a similar July statement for the 3-liter models.
And a Volkswagen spokesman told Jalopnik that the company is still “actively working with EPA and CARB. The Consent Decree provides a schedule for when we need to provide proposals for the modifications for the various generations of vehicles.”
While a fix is coming, we won’t get it today.
2nd Gear: Audi Makes Cuts
Speaking of VW’s diesel crisis: you may not know this, but in the Volkswagen Group, Audi is the real cash cow. But everyone there is tightening their belts right now, and even as the luxury brand prepares a big shift toward electrification, it has to make cuts. Via Reuters:
Audi, Volkswagen’s profit engine, has said it will scale back its conventional car programme to fund a strategic shift to green vehicles and digital services through 2025 as competition with German rivals BMW (BMWG.DE) and Mercedes-Benz (DAIGn.DE) heats up.
But cutbacks will also affect next-generation technology projects intended to help Audi clean up its image in the wake of the emissions scandal, two sources at Audi told Reuters.
Among other projects, Audi will postpone a test-track for self-driving vehicles and facilities to make batteries and concept cars, the sources said. A spokesman for Audi said projects pertaining to a planned technology park at Audi’s home in Ingolstadt dubbed “IN-Campus” would be postponed for the foreseeable future, without elaborating.
Apparently the news of cuts at the home base was not well received by workers, who are upset the first mass-produced electric Audi will be built in Brussels, not Germany.
3rd Gear: Bolt Sales
Will people buy the electric Chevrolet Bolt, or is the high-tech but humble hatchback not sexy enough? In a very brief Reuters story, supplier LG Chem said it expects Chevrolet to sell more than 30,000 Bolts next year.
For context: that’s about how many Corollas Toyota sells in a month, and a few thousand more than all the Tesla Model S-es sold last year. The Bolt’s $30,000 (after incentives) price tag makes it a compelling product, but now’s a tough time for EVs with gas so cheap.
4th Gear: Nissan Acts Like A Startup
Nissan-Renault wants to fend off challenges from Silicon Valley startups, so it’s “forming a 300-person in-house startup division” that will focus on big data, software, cloud engineering and more, reports Automotive News. Exciting!
The new startup team will develop core technologies for connected cars and new mobility services, a Nissan spokesman said today. Carlos Ghosn, CEO of both carmakers, outlined the new 300-person team in a June commentary on LinkedIn about the global race to hire high-tech talent. Ghosn’s LinkedIn pitch was partly aimed at drumming up applicants.
“We’re seeking those with expertise in software and cloud engineering, data analytics, machine learning and systems architecture,” Ghosn wrote. “I expect the global auto industry to see more changes in the next five years than it has in the last 20. Those changes will bring tremendous opportunities for those with the skills and talents to help the Alliance.”
Nissan is building its team as it solidifies a base in software and connected car platforms. It comes as carmakers worldwide scramble to bring aboard computer engineers and software programmers with the expertise typically lacking in the r&d centers of old school metal-bending car companies. Rival Toyota Motor Corp. spent $1 billion on its own artificial intelligence division, a unit dubbed the Toyota Research Institute, last year upping the stakes.
Yet another sign of how high-tech cars and mobility are becoming, and how threatened traditional automakers feel in those departments by the new players.
5th Gear: Ford Cuts F-150 Production Too
Ford is already cutting back on Mustang production to try and limit the number of people maimed at Cars and Coffee events (okay, I’m done, I promise) and also because new car sales are starting to fall off after years of record sales driven by pent-up demand.
That’s set to happen for the insanely popular F-150 as well, at least on one line. Via Reuters:
In a fresh sign of pressure on U.S. automakers, Ford Motor Co on Monday said it will shut down production of its best-selling F-150 pickup truck for a week at a Kansas City assembly plant, and temporarily idle three other plants over the next several weeks.
About 13,000 Ford hourly workers will be laid off during the temporary shutdowns. There are nearly 14,000 workers at the four plants, the company said. Some of them are salaried managers. Of the layoffs, about 4,000 will be in Mexico and about 9,000 in the United States. The cuts will hit Ford’s three highest-volume models in the United States.
The F-150 is the best-selling vehicle model in North America, where Ford in the second quarter derived 90 percent of its profit, and the F-150 is a key profit-maker for Ford. However, sales of the overall F-series pickup model line fell nearly 3 per cent in September. Ford dealers had a heavy 95 days’ supply of the pickups on their lots at the end of September, according to data compiled by Automotive News.
F-150 production at the Dearborn Truck Plant in Michigan will continue without interruption, Ford said.
Neutral: Will People Buy The Bolt?
It’s easy to write the Bolt off as being a vastly less-sexy holdover until the Tesla Model 3 comes out, but I’m not so sure we should. And if it fails, what will that mean for the EV market as a whole?