Illustration for article titled Will The Free Market Be The Thing That Kills Takata?
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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: Will Capitalism Give Takata The Death Penalty?

Takata, a Japanese automotive parts supplier, made faulty airbags that exploded with such force that they threw shrapnel everywhere. The problem was so serious that at least seven people were killed, and nearly 100 were injured. At first, we lamented the government’s initial $14,000 per day fine, as it was not much more than a joke, and even the record-setting $200 million fine that the government finally levied felt like it wasn’t enough for a company pulling in over a billion dollars in a fiscal quarter.


But that wasn’t because we want Takata dead, and its thousands upon thousands of jobs lost with it, but because we hope that a large enough fine could serve as a deterrent to corporate malfeasance. That may not matter, however, as Takata’s customers cancel contracts and head for the hills. From Reuters:

Analysts are openly questioning the survival chances of Takata Corp. as more automakers consider no longer using its airbag inflators at the center of a recall crisis.

A day after Takata’s biggest customer, Honda Motor, said it would stop fitting its new cars with the supplier’s airbag inflators, Mazda said it would drop Takata inflators containing ammonium nitrate from its new cars.

Subaru, Mitsubishi, and Fiat Chrysler have all made similar noises, and if we get word that banks are starting to deny Takata access to loans, that may be the death knell. Takata says it has “plans to survive,” but won’t say what those plans are yet.

2nd Gear: Toyota Back On Top

Thanks to the failures of both Dieselgate and Beigekrieg, Volkswagen took a tumble in the last quarter, allowing Toyota to re-claim the throne as the world’s largest automaker. Toyota is actually so big that it posted more than $5 BILLION worth of net profit in the second quarter alone. Unfortunately, Toyota doesn’t expect the party to last, as the Wall Street Journal notes:

But Toyota cut its group-wide vehicle-sales forecast by 150,000 to 10 million vehicles, and trimmed its full-year revenue outlook by 1% to ¥27.5 trillion.

“Our outlook for the second half of the financial year is cautious because emerging markets carry weaknesses,” said Managing Officer Tetsuya Otake, citing slowdown in China. Toyota is concerned that recovery in emerging markets, especially Asia, will be slow even for the financial year starting April 2016, he said.


If you want to get down to brass tacks, people are nervous about a possible collapse of the Chinese economy, and they’re getting their rain gear on.

3rd Gear: Speaking Of Profits, Subaru’s Doing Well

Subaru’s been reaching for the stars lately, and it looks like they might just get there. Big sales numbers, as well as a favorable exchange rate, pushed the profits of parent company Fuji Heavy Industries 41% higher in the last quarter, according to Automotive News. The company’s planning to boost production at its Indiana plant up to 394,000 vehicles by the end of next year.


Hey, other automakers, see what happens when you make cars that people actually like?

4th Gear:Mazda’s Doing Pretty Well, Too

While we’re at it, AN reports that Mazda’s quarterly profits are up 25% as well. Other automakers, the same lesson applies here, too.


5th Gear: GM And The UAW Look Like They Might Have A Deal

The UAW is looking to complete the latest round of bargaining agreements with the major American auto manufacturers, and hot on the heels of a deal with Fiat Chrysler comes one with GM. And as the Detroit Free Press tells it, the contract looks like it’s sailing through:

The UAW’s agreement with General Motors is on the way to ratification after workers at Detroit-Hamtramck Assembly ,three facilities in Pontiac and plants in Wentzville, Missouri, and Spring Hill, Tennessee, gave it solid majorities Wednesday. .

The vote had been close until late Wednesday.

Glad everyone’s happy.


Reverse: America Gets Its First Car Patent

On November 5, 1895, Rochester attorney George Selden wins U.S. Patent No. 549,160 for an “improved road engine” powered by a “liquid-hydrocarbon engine of the compression type.” With that, as far as the government was concerned, George Selden had invented the car–though he had never built a single one.


Neutral: What Automaker Could Stand To Learn Something Today?

When automakers make bland cars and offer steep incentives, their profits may jump for a little bit – but seemingly only a little bit. When profits tumble, they blame something like “dealer experience,” but if they just made better cars, it seems like everything would turn out okay. Just take Mazda and Subaru as examples. What other car companies could stand to learn that lesson?


Photo credit: Getty Images

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