On today’s show… Ferrari makes a $53,000 profit on every car it sells, the UAW gets real interested in forming a union at Tesla and Chevy shows why diesels still have a role to play in fuel efficiency for passenger cars. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
LOOK FOR THE UNION LABEL
Here’s a story that we’re going to hear more about. Line workers at Tesla have approached the UAW about forming a union at the Tesla assembly plant in Fremont, California. The story broke when one of those line workers posted an article on line complaining about excessive overtime, hard working conditions and frequent injuries. He goes on to say that most Tesla workers earn between $17 and $21 an hour, while UAW workers, on average, earn over $25. Elon Musk had something to say about this. He called the allegations “morally outrageous” and said that Tesla workers make more money than UAW workers when Tesla stock options are taken into consideration. This story is far from over, and we will bring you all the gory details as they unfold.
FERRARI MINTS MONEY
We just got Ferrari’s earnings for 2016 and the numbers are eye-popping good. Ferrari sold just over 8,000 cars, an increase of 350 cars from the year before. That brought in 9% more revenue, just over 3.1 billion euros. But look how much of that money dropped to the bottom line. Earnings before interest and taxes shot up 34% and net income of 425 million euros skyrocketed 37%. That means Ferrari made a net profit of 53,000 euros on every car it sold.
| Ferrari 2016 Earnings |
| Vehicle Sales |
8,014 |
+4.6% |
| Revenue |
€3.1 Billion |
+9% |
| EBIT |
€632 Million |
+34% |
| Net Income |
€425 Million |
+37.1% |
And we’ll be back with more right after this.
FORD PLUNKS DOWN ANOTHER BILLION
The Ford Motor Company just put another chip on the autonomous technology roulette board. It’s investing $1 billion in a company called Argo AI that specializes in using artificial intelligence for robotic applications. The auto industry is going ga-ga over AI because the software can be used for writing the algorithms needed for Level 4 autonomous cars. AI is turbocharging the efforts to develop autonomy because we’re now at the point where we have software writing the software.
WAGONS, HO!
Opel and Vauxhall already showed us what their Insignia sedans look like. But now we’re getting more information on the station wagons. Like the sedan, the wagon sheds quite a bit of weight despite growing in size. Everything is bigger on this car. The wheelbase is over 3.5 inches longer, the trunk is bigger, cargo space was increased, and the passengers have significantly more room. And yet the car is 440 lbs lighter. It also gets torque vectoring all-wheel drive and a new 8-speed automatic transmission. Look for the new wagon and sedan to make their official debut at the Geneva auto show next month. And then look for them to debut in the U.S. as the new Buick Regal.
Coming up next, the Detroit Three formally petition the Trump Administration to re-open the mid-term review on fuel economy regulations.
PSA FACES DIESEL PROSECUTION
Back in April of last year PSA’s offices were raided in an effort to find evidence that the automaker was cheating on diesel emissions. Now the agency that conducted those raids says it’s going to French prosecutors with what it found. PSA is sticking to its guns saying that the, “Group’s vehicles comply with regulatory test criteria.”
CHEVY CRUZE DIESEL IS SUPER CLEAN
And in other diesel news, but this with a more happy tone, Chevy has announced that the new Cruze Diesel Sedan with a 6-speed manual transmission will get an EPA-estimated 52-mpg on the freeway, 30 in the city and 37 combined. With a 9-speed automatic those numbers drop slightly on the highway, go up in the city and have the same combined number. Plus the diesel meets the most stringent emission standards, Tier 3 Bin 125. The Cruze Diesel will be available this year with a starting price of just over $24,500, including destination charges.
OEMs ASK TRUMP TO RE-OPEN MID TERM REVIEW
Well, it’s a wonder this story didn’t break on Twitter. Mary Barra, Mark Fields and Sergio Marchionne wrote a letter (how quaint!) to President Trump asking him to re-open the EPA’s mid-term review of the CAFE standards. The EPA hurriedly ended that review in the last days of the Obama Administration. Originally, the deadline was April, 2018. Automakers would love to get some relief from that standard and Trump is obviously ready to give it to them. My position has always been that the 2025 CAFE standard should be pushed back to 2030. That would give automakers another design cycle to meet the standard, which would be a huge relief for them. Yet, it would keep the standards in place, which are scientifically sound. So we’d still get the same environmental results, just few years later.
Anyway, that’s how I see it. And as always we welcome your feedback in the comments section. And with that we wrap up today’s show, thanks for watching and we hope to see you again here tomorrow.
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Comments (32)
February 13th, 2017 at 12:09 pm
I have never been a GM fan, and the bailout further pushed me from the brand. However, the Buick Regal post bailout (aka based off the Opel product) has always been the GM product I would choose.
The new Buick Regal looks even better, and if it were on the market 6 months ago I just might own one now. Instead we stumbled upon a used Lexus IS-250 AWD. I don’t think my wife will want anything but a Lexus now.
The morale of the story, is GM your product is very competitive, but for us “niche” buyers (aka wagon buyers) you are too slow to respond.
My heart was with the Subaru Outback Touring, but the “rugged” appearance and hefty price tag detoured my wife.
February 13th, 2017 at 12:11 pm
Elon makes a good point about the stock options, however UAW workers receive an annual bonus linked to the financial performance of the company (much like stock options are). This year’s generous bonuses were recently in the news. I wonder if those are taken into account when Elon is making his compensation comparison argument?
February 13th, 2017 at 12:12 pm
Hi Guys. Just read a road test on the Mazda6
Diesel wagon avaiable in the UK. Like
The reporter said. No way in the USA
Bummer. Cozy
February 13th, 2017 at 12:14 pm
Has anyone tried to quantify if NUMMI desolving/closing actually helped Tesla?
Also, I assume some of NUMMI’s workers are now Tesla workers. If I remember correctly the NUMMI facility was a shining star for the UAW. Could this be causing some of the labor issues? This may not be horrible, but they were almost utopic with NUMMI.
February 13th, 2017 at 12:16 pm
Those standards sure made the car companies come up with a lot of new technology which i believe has made the cars alot better.
February 13th, 2017 at 12:20 pm
@Ferrari profits: the EUR 53k profit per vehicle would be true if all revenues would be vehicle sales. Which I believe is not the case, since then the average vehicle sales price would be EUR 386,823 (USD 410,000). I suggest the Autoline team checks these figures. Tips: Racing? After market? Merchandise?
February 13th, 2017 at 12:31 pm
So The Insignia is a Vauxhall in RHD form a Opel in LHD form and a Buick in US form? Isn’t this type of badge engineering what got GM in trouble before? They look like great cars why just release it under one brand name Worldwide ?
February 13th, 2017 at 12:35 pm
John,
With the new Cruze diesel, does it require the additive to the exhaust like with the Duramax diesels?
February 13th, 2017 at 12:36 pm
UAW at Tesla? Well time for prices to rise and quality to fall. If the workers are comparing a make like Chevrolet to Tesla I believe there is a major fault. How many cars a day does Chevy put out vs Tesla? I really don’t see the Tesla workers working too hard. Hey Elon! Move Tesla to SC and we will be glad to assemble your cars for you without the UAW crushing the industry. Our BMW plant is the largest in the world and not a single union thug around.
February 13th, 2017 at 12:38 pm
#7
I couldn’t agree more.
February 13th, 2017 at 12:42 pm
Re: CAFE standards relief ltr, not surprising to me. I think Trump’s election gave the OEMs the opportunity to ask a key question: what’s more important to Americans, saving lives (autonomous tech) or saving the enviornment (higher CAFE). This is why I believe all the OEMs are going crazy with autonomy, because in the long run, the argument to save lives will always “trump” saving the environment.
February 13th, 2017 at 12:52 pm
8) The new Cruze diesel will use DEF. The fill will be next to the conventional fuel filler. We received the invoice for our first one, due any day.
I am impressed with the fuel mileage figures. Chevy hasn’t sent that downstream to us yet.
February 13th, 2017 at 1:00 pm
1 What, exactly, does an IS250 have to do with wagons? The only IS I’m aware of sold as a wagon, was the first generation IS300. I had one for a couple years.
February 13th, 2017 at 1:02 pm
Kudos to GM for not requiring the top-of-the-line trim level with the diesel Cruze. It makes this engine available without a huge price tag. Also kudos for offering the manual transmission with the diesel. As for the mpg rating, I suspect someone really trying could get over 60+ mpg on highway with the diesel (even with the AT). I have a 2016 Cruze with the 1.4L gas engine rated at 40 mpg highway and I routinely get 50+ driving the speed limit (mostly on state highways). Great car.
#8 – Yes, GM is using the urea additive. That is the only legal way to meet emissions (just as VW).
February 13th, 2017 at 1:09 pm
7, 10 I don’t see anything wrong with using different name plates in different markets. There are historical reasons for the use of Opel, Vauxhall, Buick, and Holden in their respective markets. GM uses different “brands” in different markets, because they bought existing brands many years ago. What doesn’t make sense, is having similar cars “badge engineered” and sold in the same market. This practice is much less common than it once was.
Ford, M-B and others expended by entering different global markets with existing products, and building plants around the world, thus the same name plates being used globally.
February 13th, 2017 at 1:23 pm
#6. Great point, Wim. We’ll have a detailed breakdown of where Ferrari gets its money in tomorrow’s Autoline Daily.
February 13th, 2017 at 1:57 pm
I spent my working lifetime in auto repair & the appeal of a diesel & or a 6 spd manual is impossible for me to understand. I hope to live long enough to enjoy a 2nd gen Nissan ePower Note. It’s simplicity is thrilling to this olwrench,.
February 13th, 2017 at 2:02 pm
@arcade- ” crushing the industry”???? yea, the auto industry is in shambles these days isn’t it.
February 13th, 2017 at 2:02 pm
I hope GM offers an AWD version of that wagon, they are pretty light on crossovers.
February 13th, 2017 at 2:20 pm
@7&10 – I agree with Kit (14). Stating Kit’s case a little differently, badge-engineering is a problem if the clones reside in the same market. But this is not the case with Opel, Vauxhall, Buick, and Holden. Also, remember the Ford Fusion is a Mondeo in Europe and Asia-Pacific. Similarly, the Escape and Kuga are the same product with regional nameplates.
It’d be a real waste of resources if the products were unique with common names (as it was with the Ford Esxap and still is with the Honda Accord).
February 13th, 2017 at 2:56 pm
#12
Hah! Maybe you are not married.
Although my wife claims to not care about cars, I will not own another car she isn’t 100% happy about.
The VW Diesel Wagon was gone and she never noticed an IS-250 before. She saw it on the lot, saw the price (20k less than an Outback Touring) and fell in love with it.
However, she would prefer a wagon and had I shown her the new Buick Regal. I am sure she would have had a similar reaction.
February 13th, 2017 at 3:23 pm
I really like the styling of the new Opel’s, and the weight reduction mimics the latest GM’s on this side of the pond; with all that said, and Buick getting a crack at a version, I hope they (Buick) can tone down their front clip to maintain the beauty the Opel seems to present. And I might even be a player if we get the wagon over here.
February 13th, 2017 at 3:55 pm
john, I disagree with you (cafe to 2030). I see the automakers are asking for this for only one reason: it plays well with Trump. In reality this is all going to be irrelevant as battery cost and power density in Li ion are improving faster than we thought not too long ago. Soon enough we will see cost under $100 per kWh and that will be the day ICEs will have super tough competition. That is coming before 2025 and the current cafe standards will be easily met by then.
February 13th, 2017 at 6:13 pm
@23 – Roger, the auto industry is always being squeezed between government policy/regulations and consumer demand. Demand is simply not rising fast enough for hybrid and pure electric vehicles to meet such a near term requirement. Furthermore, the existing grid infrastructure doesn’t support the millions of customers who don’t have access to overnight charging. And the country’s power grid is woefully unprepared for the surge in electricity demand (even with off-peak hours). And Elon didn’t do anyone any favors when his vehicles use a charging connector that does not comply with The SAE standard.
February 13th, 2017 at 6:18 pm
Arcade mike should know that there are alot of union workers like myself who don’t consider ourselves thugs. Just because he is wolling to work for less with out many benefits is his business. Some of us like to live a decent life with a few things and provide for our families. We need to leave that talk on some other site!
February 13th, 2017 at 6:22 pm
Any compensation comparison between union and non-union jobs has to include the union dues in order to be accurate, please include this in any future discussion of wages and compensation, thanks.
February 13th, 2017 at 8:40 pm
John, on what basis do you claim that the CAFE standards are “scientifically sound.” I agree that the technology probably can be developed to reach that, but at what cost? And further, will we be able to buy the cars that people want, or will we be left with only buying $50,000 (in today’s dollars) Ford Fiestas and the equivalent? Let the market make the decision, not the government.
February 13th, 2017 at 10:20 pm
Meeting the CAFE standards wouldn’t mean $50K Fiestas, but it might mean more small vehicles, and fewer 6000 pound trucks transporting one person, like in the rest of the world.
February 14th, 2017 at 7:23 am
The five year delineation for EPA rulings/requirements is just an arbitrary number. Perhaps the standards can be looked at and appropriately revised or maintained; the tricky part is to keep it scientific and remove the political agenda (if any). Even the 54.5 standard, while somehow scientifically defined, had/has a lot of ‘fuzzy logic’ in how it was originally derived. And stealing “Peter to pay Paul”, buying energy credits, delays the goal of reducing usage and pollution.
February 14th, 2017 at 9:11 am
Yeah, unions are evil because the corporations have their labor’s best interests at heart.
{sarcasm off}
February 14th, 2017 at 10:15 am
The UAW helped me, even as a non-union salary employee. We got the holidays vacation time negotiated by the union, and the contract probably helped the pay of lower level salary people.
February 14th, 2017 at 11:44 am
Our electric infrastructure probably is not capable of handling the increase in demand for EVs.I got a msg from our electric company that said they are shutting down for an hour Tuesday to make an emergency repair. This is the first time I can remember this ever happening. Electric companies are not investing enough to maintain the grid let alone improving it enough to meet future demand.