Episode 959 – Lincoln Heads to China, Mexican Manufacturing Boom, CAW and Big Three Face Off

August 28th, 2012 at 11:39am

Runtime: 6:58

Ford is taking its troubled luxury brand to China. Lincoln vehicles will be sold in this red-hot market starting in the second-half of 2014. Vehicle manufacturing in Mexico is expected to grow by 1 million units over the next three years. The Canadian Auto Workers Union and the Detroit Three are facing off in their latest round of contract negotiations. All that and more, plus a look at a new electric-motor technology.

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Here we go again! Welcome to another episode of Autoline Daily. It’s Tuesday, August 28, 2012. I’m Craig Cole, thank you for joining us.

HONEST ABE HEADS EAST
HUGE news for Lincoln today. Ford is taking the troubled luxury brand to China. Initially they were going to wait until they properly resurrected it in the U.S. before going global, but the top brass must be really confident it how quickly the product lineup has progressed. As McElroy puts it “they lose by waiting, why not get in now?” The Chinese market is hotter than a blast furnace and the luxury-car market is projected to overtake that segment in the United States by 2020. Additional sales and global exposure for Lincoln CANNOT be a bad thing. Don’t look for any immediate changes, though. Lincolns will not go on sale in China until the second-half of 2014.

VOLT PRODUCTION OUT OF JUICE
Unofficially GM is halting production of the Chevy Volt . . . again! Bloomberg reports the company’s plant in Hamtramck, Michigan will close down for about four weeks in late September and early October. Sales of the extended-range electric vehicle have not met expectations. According to Ward’s the company has sold fewer than 11,000 of them through the end of July. It had targeted U.S. sales of 45,000 units annually. It’s likely production was halted in an attempt to match supply with demand but GM is also retooling the factory to build the brand-new Chevy Impala, which should arrive at dealers in the first half of 2013. That could be part of the reason for the stoppage.

MEXICAN MANUFACTURING BOOM
In related production news there’s a completely different story to tell in Mexico. According to Bloomberg output in the country is expected to increase by 1 million units over the next three years. That’s nearly a 40 percent jump! Foreign automakers are investing heavily in Mexico with plans to use it as an export base. Audi, Mazda and Nissan are all building new plants in the country.

CAW AND BIG THREE FACE OFF
Contract negotiations between the Canadian Auto Workers and Ford, GM, and Chrysler are starting to heat up. The union just voted to authorize strikes against the automakers if necessary during talks. The CAW says it should have a fairer share of profits. But the automakers say Canada has the highest labor costs in the world and is looking for further concessions. The last CAW strike was in 1996 against General Motors.

SOME ASSEMBLY REQUIRED
Mercedes-Benz announced it will start building SKD, or semi-knocked-down kits of its SUVs in Tuscaloosa, Alabama for final assembly in emerging markets. Later this year, SKD kits of the M-Class will be shipped to India, Thailand and Indonesia for final assembly and next year GL kits will be shipped to India and Indonesia. Mercedes says it expects SUVs will become more popular in these markets.

POLITICAL HOT POTATO
Yesterday we reported that GM and Chrysler won’t allow candidates to tour their assembly plants because they don’t want to be part of the political debate. And now the Detroit News reports GM will not provide cars for the Democratic and Republican conventions. The company has supplied vehicles to each party for the last 30 years and in 2008 it made 400 cars available to each convention. A spokeswoman says the company made the decision because GM is a “new company focused on designing and selling the world’s best cars.”

After the break an interesting type of electric motor could offer automakers all kinds of benefits. What am I talking about? Stick around for all the details . . .

PIEZO-ELECTRIC INNOVATION
A company called DTI, or Discovery Technology International has come up with a new kind of motor using piezo-electric technology. These motors don’t need copper coils or magnets so they’re much smaller than conventional electric motors. They’re also half the weight and use one-tenth the current. This means automakers could also use much lighter-gauge wiring with them for additional weight savings. They are also much quieter and don’t emit any EMI, electromagnetic interference.

These motors range in size anywhere from 10 millimeters to four inches in diameter, so they’re good for all kinds of vehicular applications, but not for propulsion, so they can’t be used to power a hybrid or EV. DTI makes these piezo-electric motors for the medical industry and so far have shown them to Ford and Chrysler, which have indicated an interest in them. And as you heard Mark Broderick say, they don’t use any rare earth metals because they’re made out of ceramics.

And with that we’re done with today’s show! Please join us again tomorrow, same time, same place. We’ll see you then!

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62 Comments to “Episode 959 – Lincoln Heads to China, Mexican Manufacturing Boom, CAW and Big Three Face Off”

  1. Chuck Grenci Says:

    The story on the piezo electric motors left out one important piece of the equation; cost. A lot of benefits but………………….. Anyone know what that might be?

  2. pedro fernandez Says:

    CAW workers better watch out, Mexico is looking pretty inviting to the OEM’s with its lower labor and tax costs, and it seems the work force is not too shabby either. Just look at the Fiat 500 and the Fusion.

  3. Chuck Grenci Says:

    Pedro, I think you’re right; Canadian workers need to heed the times. Maybe some of those jobs may even find themselves back in the good ole USA.

  4. pedro fernandez Says:

    The OEM’s have to balance the cost of building new plants in Mexico or taking over abandoned ones in the States, should it become too expensive to stay in Canada.

  5. guybob Says:

    WASN’T CADILLAC INTRODUCING A NEW ELECTRIC AUTO BASED ON VOLT TECHNOLOGY? FOR $30K MORE, WHY SHOUD IT SELL EITHER??

  6. Kit Gerhart Says:

    What are these piezo motors to be used for? I guess HVAC blowers and power seats and windows. Also, if they use 1/10 the current, they need 10 times the voltage for the same power. Will they need an electronic voltage increasing power supply for use in cars?

  7. RS Says:

    I thought GM and Chrysler workers had promised not to strike few a few years. Are the Canadian operations exempt? Was Canada too short sighted to have overlooked that little detail when they gave the companies their Visa number? So, there could be a few more unemployed Canadians! What was the name of that pop song a few years ago – “When will they ever learn”?

  8. Bradley Says:

    Continental, Town Car, Mark, Zephyr, and maybe even Navigator will hopefully be the only names China will see from Lincoln. Alphabet soup isn’t working for Lincoln; they should go back to what people know. The stereotypes, that once clouded those names, are gone.

  9. pedro fernandez Says:

    The Maytag repairmen are no longer the least busy men in the world, now the title goes to the Volt assembly workers.

  10. Chuck Grenci Says:

    I went to the piezo website and it looks (they claim) that costs are comparable to standard type motors, voltages can be at 12 volts (and the motor I saw used about 1/2 amp current) but I don’t know how much work that particular motor does. These are high torque, low rpm motors (the highest rpm I saw listed was for 120 rpms; most lower). These look pretty good initially; will be interesting if we see these in future vehicle applications.

  11. Jon M Says:

    I love hearing evasive and/or sugar coated responses from corporate spokespersons. This is up there with the best of them. GM isn’t providing cars for the political conventions because they’re a “new company focused on designing and selling the world’s best cars.” Now that’s comedy! I’m sure Akerson and crew are brimming with pride in their media relations group right about now. What the spokeswoman was really saying is, Are you crazy!?! People are still calling us Government Motors. Besides, we wouldn’t know whose side to take…you know, just in case.

  12. Kit Gerhart Says:

    #10,
    That 12 volt, 1/2 amp motor would have less than 1/100 hp, if 100% efficient. That’s not much. Maybe it would work air doors in an HVAC system, if the system is designed with very little friction. Current window motors are at least 4 times that amount of power.

  13. aliisdad Says:

    I hate to see Volt production slow/stop since GM had a pretty good idea, and those who have them seem to love them…It kind of seems like the old way of GM’s “cut and run” ways are happeening again…It seem like they actually come up with some good cars; however, they seem to release them just before they are really “squared away”, then they “cut and run” just as the car gets “squared away” and could be a success..I am also reminded of their ’80′s diesels and how that set back diesel acceptance in the US for many years…I think the price is probably the main problem, though…I don’t understand how other companies (i.e. Toyota) can produce these kinds of cars and sell them for more reasonable prices…Can they be trying to recover their investment too fast instead of planning long term? I don’t know, but it is too bad, and I hope the Volt story does not hurt this kind of car being accepted like the diesel in the past..
    On Lincoln to Japan, I have to wish them well; yet, I don’t see their products competing with estabished upper-level brands for some time…They problem is to sell what they have now at a price point they want is not realistic yet..However, they need to have a price point that demonstrates that level of market car to establish Lincoln at that level…That will be a challange…I still think the LS could have been developed into a up market car to compete at that level a few years ago…Today, the Lincoln style is too overdone “American” and they don’t have the feel of the German brands, yet…

  14. aliisdad Says:

    Woops, I meant “Lincoln to China”…Guess I just had a RECALL!!

  15. Kit Gerhart Says:

    #13,
    The Volt actually is pretty well “squared away,” as far as how it drives, and reliability. Also, the price is what would be expected for a car with that size battery. It’s just that not a lot of people want that type of car.

  16. Kit Gerhart Says:

    #13,
    Toyota does not sell a car like Volt for a more reasonable price. If you mean the plug-in Prius, it has a much smaller battery, and does not have full performance on elecric power, even with a full battery. It remains to be seen how well the plug-in Prius will sell, but I’ll be surprised if it sells very well. I wouldn’t consider paying an extra 8K or so over my regular Prius. At least Toyota wouldn’t have spent a lot developing the plug-in, since it mostly uses the regular Prius power train.

  17. T. Bejma Says:

    #13

    Apparently Toyota is having a hard time “squaring” away their EREV, the Plug in Prius, as well based on the high price ($32K after rebates) and very dismal sales totals (5,500 this year as opposed to 11,000 Volt’s).

  18. pedro fernandez Says:

    17 if I were shopping for a Prius I would go for the C, not the V for sure, not worth the extra money the few miles you get of EV use. The C is a better buy IMHO. GM must be getting ready to export the Volt to Latin America, this fellow I know was doing a review for a Latin American TV car show, he told me he LOVED it!

  19. C-Tech Says:

    I understand starting to sell Lincolns in China now, starting your luxury brand with better products to come (hopefully!).

    Something that I noticed with the way dealers sell the Volt, they are never fully charged! This is a vehicle people are curious about and if you are considering it, you will want to test drive it, and the battery is half charged so the engine starts up in the first couple of miles. This does not inspire confidence in how far you can go on electric only. There are dealers who don’t have the quick-charger installed either. Poor presentation will give you poor sales.

  20. pedro fernandez Says:

    19 wow how stupid is that? I’m not surprised, on my recent car shopping odyssey, I found that most sales reps did not know the product well enough to even answer a few basic questions, most of them said they had just come from another dealership and were not familiar with their new ones. A lot of changing jobs in this business, I guess!

  21. C-Tech Says:

    I can see a use for those piezo-electric motors in throttle bodies, hvac systems, and power windows. Hopefully the durability will also be there. Auto use is a lot rougher than medical use.

  22. C-Tech Says:

    My better half test drove a 2013 Malibu Eco and it was not fully charged. The start-stop system did not work since it was not fully charged, but the killer thing was the salesman did NOT know it had a start-stop system. He was dealing with a customer who has a 14-year old car with over 250,000 miles and he was not ready to sell! (She did like the car overall).

  23. Lex Says:

    The problem with the low sales of the Volt is that it is way over-priced. The Volt Techology should have been incorporated into The Cruze.
    GM will find the same low sales of the Cadillac EV expected to go on sale in 2014.

    The same is true for Nissan. The Leaf should have been mergered into the 5 door version of the Versa. This would have reduced cost and improve the access to this technology.

    Both of these OEM’s thought that they could copy the Toyota Prius business model. The problem is that GM and Nissan have EV’s that are not price competitive with the Prius.

  24. Brett Says:

    I’ll bet somebody at GM decided it was faster/cheaper to retool while production of the Volt was suspended and, seeing how they weren’t selling that fast anyway, it became a win-win proposition.

  25. C-Tech Says:

    I think GM and Nissan may have overestimated the market for electric cars. The cost is what it is. There just aren’t a whole lot of customers.

  26. Kit Gerhart Says:

    #25,
    Exactly…

  27. Lex Says:

    Who do we blame the Automotive Industry, The Consumer Polling Experts or the Obama Administration for pushing Electric Vehicles?
    I think the later needs to take most if not all the responsibility.

    As John McElroy has stated numerous times EV’s and Hybrids only make up 2% of all sales, and Prius models make up half of that. People like myself do not want to pay for more expensive vehicles that have a payback period longer that ten years or the life of the vehicles or it’s warranty!

  28. HtG Says:

    I don’t know how Craig missed this story, but it seems that Sir Alex Ferguson, yes that one, has banned United players from driving Chevrolet sports cars. Don’t believe me? WTH, HtG?

    http://www.dailymail.co.uk/sport/football/article-2194469/Manchester-United-ban-players-driving-Chevrolet-sports-cars.html

  29. pedro fernandez Says:

    maybe they can drive Aveos? They still make them in the UK

  30. Kit Gerhart Says:

    Maybe Sir Alex is afraid too many of the young players would crash their Corvettes…. or maybe it’s just another way of showing who’s boss.

  31. pedro fernandez Says:

    If they give them Aveos they might just change to another team, sponsored by BMW or MB.

  32. HtG Says:

    Rest assured Coleen will fancy her ‘Vette in red, particularly if Wayne shoots another one in the back of the wrong onion bag, if you get my drift.

    (sorry about the innuendo Craig)

  33. cwolf Says:

    You guys are forgetting how important the Volt will be in meeting the future mpg standards. It is becoming more evident that all manufacturers has or will have an EV just to boost the averages. EV’s are’nt going away! Adding the Impala is a good fit into the Volt plant. The new Impala is really getting my attension,but it sure is’nt cheap!

  34. Kit Gerhart Says:

    #19,20,
    I would think that anyone considering a Volt would want to experience the transition when the gas engine starts, and would want to know what the car feels and sounds like with the engine running. I agree, though, that it doesn’t send the right message if the engine starts in the first mile of a test drive.

    BTW, when I drove a Volt a few months ago, the most impressive part was how seamlessly a quietly the car went about its business when the engine started.

  35. pedro fernandez Says:

    #33 not if it doesn’t sell, cwolf.

  36. pedro fernandez Says:

    I submit that if someone really wants to spend that kind of money for a Volt that they arrange to have the car for a day so they can experience both EV driving and when the gas engine kicks in, I would insist on it.

  37. cwolf Says:

    Considering how many cars I have purchased over the years, I have come to the realization that very few salesmen truely know the cars they sell. Many don’t even know the manufacturer supplies spec sheets with included option codes and costs, without seeking the managers help. It’s very sad. I am facing the same delema with realtors in my search for a retirement home. Regardless of their credentials,I have yet to find one reasonably knowledgeable of home construction or of building standards. I sometimes wonder if I ask or expect too much. Do you share my observations?

  38. cwolf Says:

    Sorry pedro, EV’s are going to stay even if they don’t sell because of the mandates. Manufacturers simply don’t have an option!

  39. Kit Gerhart Says:

    #36,
    The dealer near me in Indiana does that, if they have a potentially serious customer.

  40. Kit Gerhart Says:

    The more expensive gas gets and the cheaper batteries get, the better EV’s will sell. For now, they are a very small part of the market, but it will increase in time. Some type of quick change batteries would be needed, though, for EV’s to ever work for road trips.

  41. cwolf Says:

    Kit

    If I move back to my hometown,an EV would get me to and from work and an extra 60-70 miles to spare. Imagine how many would be sold, as a second vehicle, if the cost becomes more realistic! The potential is there!

  42. T. Bejma Says:

    #22
    The Malibu Eco charges as it drives. I don’t even think you can “uncharge” it in normal operation. Are you sure the start/stop wasn’t working? It is very seamless and I can’t even tell without looking at the tachometer.

  43. W L Simpson Says:

    In unionism, banking, & politics , The operative word is—GREED!
    I was there when the IAM took
    down PAA, Nat’l & EAL , almost all at the same time.

  44. HtG Says:

    37 A neighbor recently bought an X3 from a salesman that was her student in grade school. She related to me that he really didn’t care that much about cars. I replied that this was often the case about the salesmen. I remember my own experience a few years ago dealing with a young salesman who didn’t know lots about the car he was selling. I keep in mind that it’s the F&I guy that is THE MAN, and that ‘touched’ people like us care a lot more about cars than other people.

  45. HtG Says:

    Ya think math wiz, Rick Van Wagoner was a car guy? Mark Reuss, yes

  46. Kit Gerhart Says:

    “Knowing the product” is a lot easier for a car sales person than it once was, now that you have almost no choice except paint color. Still, many of the sales staff are amazing ill-informd.

  47. W L Simpson Says:

    Re: EVs—lighten ,simplify , reduce costs with
    fewer & better batts , in wheel micro managed motors, full time generator ,utilizing a turbine or very small ICE . All of the above technologies
    exist, just not under one hood.

  48. Kit Gerhart Says:

    It probably makes goid sense for Lincoln to go to China now. They will be a new “luxury” brand, and the locals won’t realize that the products are not competitive in the rest of the world. By the time they notice, maybe Lincoln will actually have some good product.

  49. pedro fernandez Says:

    back in the day, most people ordered their cars the way they wanted them and waited for weeks to get it, now no one wants that, most people expect to go home with it the same day, or the dealer can get it from another store sometimes hundreds of miles away, usually the next day. This old fashioned way only seems to happen with ultra expensive cars like Rolls and Bentley, which are specifically built for the demanding buyers.

  50. cwolf Says:

    I’m not so sure Lincoln will gain the numbers they need by going to China. They have to realize they have nothing new to offer and has been in the shaddows of just about every auto maker. Even if the Chinese can’t tell a Lincoln from a Ford, they will quickly see any Ford product back seats are just to small for their tastes. Solly Charry- no sale!

  51. Kit Gerhart Says:

    I liked the old way of ordering cars when you had an actual choice of engines, transmissions, interior colors, axle ratios, body styles, etc. Those were the days.

    You still have a number of interior choices with MINI, but when I bought my car, they gave a much better deal on a car they had in stock than if I’d ordered a car. Otherwise, I would have ordered, with about an 8 week wait.

  52. cwolf Says:

    I have been trying to understand how global markets effect world economies and the effects upon the US. I know I yet to have fathomed just how large the Chinese market is or of the huge buyer market there. For instance, I am in awe of the gain in import auto sales, but when one thinks about the population, the sales numbers are small from a Chinese perspective. How can this keep happening month after month when Chinese exports have dwindled 40% during that duration? Chinese manufacturing is slowing,yet they claim a GDP of 6-8%. The marketeers even state their numbers are faulsly exagerated by up to 2% GDP. Our auto makers can’t build in China fast enough for Chinese orts without fear or care that China may hit bottom quite hard. I wish I could understand the reasoning….beyond greed!

  53. HtG Says:

    52 Think about governments and central bankers doing all they can. For then next decade. Think the 1930′s. Pray

  54. HtG Says:

    Yes, drinking

  55. Bill A. Says:

    Edsel vs Volt:
    Seems the Edsel sold nearly 79,000 cars in 1958 and around 45,000 in 1959. Volt has sold 11,000 thru July (not sure if that is current model year or total production since 1st unit). Who gets the lemon arward?

  56. kevin m Says:

    LINCOLN SHOULD STAY IN AMERICA AND GO BACK TO IT’S LUXURY CAR ROOTS . CHINA IS TOO FILL TO THE GILLS WITH MANY MAKES AND MODELS ALREADY . LET’S HAVE SOMETHING TO CALL OUR OWN HERE . COME ON FORD FIX LINCOLN (WHAT A LUXURY CAR SHOULD BE ) WHAT YOU USE TO SAY IN YOUR ADS WHICH MEANT LUXURY , STYLE , COMFORT . DON’T SELL IT CHINA YOU MIGHT BE MAKING A BIG MISTAKE . DON’T LET BE COME A MERCURY TO THE GRAVE. ‘

  57. Kit Gerhart Says:

    #52,

    Here’s an explanation of what is going on in China.

    http://english.people.com.cn/90001/90778/7451841.html

    Is this Chairman Mao’s official site? It looks like it may be.

  58. HtG Says:

    …and I raise you 800 billion pounds.

    http://www.telegraph.co.uk/finance/china-business/9500548/China-announces-800bn-stimulus-to-boost-confidence.html

    I love the smell of free markets in the morning.

  59. pedro fernandez Says:

    In a Communist country, there can never be really FREE markets!

  60. pedro fernandez Says:

    After the administration and congress save GM and Chrysler, now they want to mandate an impossible MPG goal in 2 generations of cars, it is impossible to achieve unless everyone drives 3 cyl 2,000lb vehicles or scooters.

  61. Kit Gerhart Says:

    That 54.5 mpg cafe equates to about 36 mpg combined on the window sticker. There are a few, but not many current cars that beat that number. Probably all of them are hybrids, unless the Scion iQ or something like that is that high.

  62. Brett Says:

    When cars are all autonomous, they won’t do stupid things and crash. Then they won’t have to be built like bank vaults. Then fuel mileage will increase dramatically.