AD #2276 – 2019 Jeep Cherokee Updates, Strike Looms in Germany, Trump Tax Cuts Boost FCA & Ford Earnings
January 25th, 2018 at 11:35am
Runtime: 6:38
0:26 Strike Looms in Germany
0:44 Public Warming Up to Autonomous Cars
2:01 Nissan’s Self-Parking Slippers
2:44 2019 Jeep Cherokee Updates
4:44 Trump Tax Cuts Boost FCA & Ford Earnings
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On today’s show…the Trump tax cuts are helping Ford and FCA boost their bottom lines…German automakers are facing a strike…and we give you our first impressions of the redesigned Jeep Cherokee. All that and more coming right up on Autoline Daily.
This is Autoline Daily the voice of the automotive industry.
STRIKE LOOMS IN GERMANY
Uh-oh the German auto industry could be running into trouble. Labor negotiations between several German automakers and the union IG Metall have hit a snag. Bloomberg reports the dispute is over wages and work hours and the union is threatening to strike if the deadlock can’t be broken.
PUBLIC WARMING UP TO AUTONOMOUS CARS
We’ve reported about the public being wary of riding in a self-driving car. But maybe they’re getting used to the idea. A new survey from AAA shows 63% of respondents say they’re afraid of riding in an autonomous car, but that’s down from 78% just a year ago.
AAH IS BACK!
Don’t forget to join us for Autoline After Hours later this afternoon. One of the topics of discussion will be some of the design issues on the Tesla Model 3 that Munro and Associates discovered as its started to tear down the model for competitive benchmarking. Join John and Gary for some of the best insider information on what’s going on in the automotive industry. That’s 3 pm eastern time, live, later today at www.Autoline.tv.
The world is going crazy over autonomy, and now Nissan is using that technology to organize slippers. You heard me right, slippers, and that’s coming up next.
NISSAN’S SELF PARKING SLIPPERS
Nissan has once again come up with a fun way to use its ProPilot autonomous technology. It’s customary in Japan to remove your shoes at the door and one traditional inn has equipped the slippers you put on in place of your shoes with a version of its parking technology. When someone is done using the slippers, they just push a button and the slippers return themselves to the front door. The low tables and sitting cushions in the tatami rooms will also neatly re-organize themselves when not in use. Nissan is offering a contest for one lucky pair of travelers to stay a night in the hotel and if interested, just follow the link in the transcript or description box to learn more about it.
JEEP CHEROKEE UPDATES
The styling of the Cherokee was polarizing when it first came out in 2014, even Jeep admits that. Since the Cherokee was new to its segment, Jeep felt it needed styling that stood out from the crowd. Sales hit nearly 170,000 units last year, but were down 15%. So now Jeep is toning down the styling. Gone is the pointy noise in favor of a more blunt face, and the lighting is now in a single headlamp assembly. All the sheet metal from the A-pillar forward is brand new. At the rear the big changes are a new set of tail-lights with a new LED lighting signature and the license plate has been moved from the bumper to the tailgate. It might sound odd, but Jeep said it actually gained a few millimeters of trunk space by moving the license plate because it was able to pull the latch rearward. In all, 27-cubic feet of cargo volume was added through small tweaks. While remaining changes to the interior are minimal, an upgraded 7-inch infotainment screen with Android Auto and Apple CarPlay is now standard and an 8.4-inch display is also available. Overall, Jeep feels the new exterior and interior styling makes the Cherokee feel more upscale than before. But the big news for the refreshed Cherokee is the addition of a new 2.0L 4-cylinder turbo engine. It puts out 270-horsepower and nearly 200 lb-ft of torque. My thoughts on the new engine and overall driving experience are embargoed until tomorrow. So, stay tuned.
Coming up next, Ford and Fiat-Chrysler reported their financial earnings and they’re already benefiting from Trump’s tax cuts.
TRUMP TAX CUTS BOOST FCA & FORD EARNINGS
Ford and FCA reported their earnings for last year, and the Trump tax cuts played a role in the results. FCA sold 4.7 million vehicles worldwide, and raked in just over 110 billion euros, about the same as the year before. But FCA boosted its pre-tax earnings to €7 billion, a nice 16% increase. And it’s net profit jump 93% to €3.5 billion. Those are good numbers. And it reduced its debt load by €2.1 billion. FCA now has about €2.4 billion in debt left on the books, but is clearly on the way to achieving its goal of eliminating that debt by the end of this year.
| FCA 2017 EARNINGS | ||
|---|---|---|
| Sales | 4.7 M | —– |
| Revenue | €110.9 B | —– |
| EBIT | €7.0 B | +16% |
| Net Profit | €3.5 B | +93% |
| Source: FCA | ||
Meanwhile Ford sold 6.6 million vehicles worldwide, a drop of about 44,000 units. But it still managed to boost its revenues 3% to more than $156 billion. Its pre-tax profit jumped a nice 19%, but its net profit shot up 65% to $7.6 billion. It’s also giving its UAW line workers $7,500 profit sharing checks.
| FORD MOTOR COMPANY 2017 EARNINGS | ||
|---|---|---|
| Sales | 6.6 M | —– |
| Revenue | $156.7 B | +3.2% |
| Pre-Tax | $8.1 B | +19.8% |
| Net Profit | $7.6 B | +65.5% |
| Source: Ford | ||
It sure looks like both FCA and Ford are benefiting from corporate tax cuts in the United States. Ford’s income tax bill dropped by more than $1.6 billion. FCA’s tax bill dropped more than €1.3 billion. But FCA is a European company and says only €88 million of its lower tax bill was related to tax cuts in the US.
And that brings us to the end of today’s report.
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Comments (31)
January 25th, 2018 at 11:58 am
’19 Jeep Cherokee: looks better.
And, I’m guardedly optimistic of the President’s corporate tax cut. (automotive as well as other reported money sharing by either bonus payouts or increased wages from other companies)
January 25th, 2018 at 11:59 am
The opening tagline has changed starting on Tuesday.
“This is Autoline Daily the show for enthusiasts of the automotive industry.”
TO
“This is Autoline Daily the voice of the automotive industry.”
Any special reason?
January 25th, 2018 at 12:13 pm
I am confused by your report today that Trump’s tax cut improved Ford and FCA’s profits? First, the law just went into effect January 1 and the profits were for 2017? Second, you reported that Ford’s after tax income went up and yet the profit sharing amount, which is tied to profits, went down relative to last year?
Something doesn’t seem to add up!
January 25th, 2018 at 12:16 pm
Car profits- do we know how much the companies make in new car sales compared to parts sales and or licensing ?
January 25th, 2018 at 12:20 pm
It’s nice that big corporations are making more money, and giving some of it to employees. Unfortunately, the huge budget deficits will come home to roost in a few years, and the social safety net is likely to be be ravaged, after Trump and Ryan are done with “entitlements reform.” I’m going to quit spending as much money, because I am concerned about what will happen to Social Security and Medicare, which I depend on. Sorry about getting a little “political.”
January 25th, 2018 at 12:29 pm
Glad they are coming, but sad some of you choose this site to bash efforts of the WH and Houses. Are you an economist or actuarial in the industry? Be glad for the steady climb as registered by the Markets and the major corporation(s) return to the States, and plan accordingly.
January 25th, 2018 at 12:39 pm
Will there be an AAH this afternoon?
January 25th, 2018 at 1:12 pm
@Bradley – We sprinkled in a few different opens before Tuesday, but it’s just to keep things fresh.
January 25th, 2018 at 1:13 pm
@GM-10 – Yes there’s a new live AAH today.
January 25th, 2018 at 1:15 pm
Yes, what was the reason for changing the opening tag line of the broadcast?
January 25th, 2018 at 1:21 pm
@2 and 9 Bradley and Barry:
Just change your description of ‘tagline’ to ‘intro-line’ and all is good. There have been multiple changes to the intro; not a problem and all convey similar direction of the show. Or maybe John and Sean are fine tuning so they can get it just perfect.
January 25th, 2018 at 1:25 pm
This question is sort of related to today’s subject, what is current ratio of people in the USA market that are buying new vehicles versus leasing? I am talking about new personal vehicles and the lease on a new titled vehicle? Could people leasing be driven by wanting the next new technology every few years or the price per month of leasing versus buying.
January 25th, 2018 at 1:43 pm
I’ve never leased a vehicle, but I know a number of friends who lease. In most cases, the people are not “car nuts,” in the traditional sense, but want a new “luxury brand” vehicle every few years, and want to know it advance how much it will cost. While there is negotiating involved in leasing, my friends who lease find in much much painless than working out a trade price on an expensive vehicle every three or four years.
January 25th, 2018 at 2:06 pm
Good Job Sean!
I am especially interested in your opinions of the New 2019 Jeep Cherokee with the 2.0 litre turbo. The vehicle looks more attractive with the reworked headlights / bumper and rear hatch. The only minor modification suggestion I have to the exterior of the 2019 Cherokee is the roof rails. I would give it the same flush mounted roof rails as are on the Grand Cherokee and Compass.
January 25th, 2018 at 2:12 pm
Kit…They are missing all the fun of winning the price negotiation game. In addition there is more price information to use than ever before. I guess I am showing my age.
January 25th, 2018 at 2:17 pm
Leasing – Being a dinosaur/control freak similar to Kit, I did lease once about 18 years ago. I signed up for extra miles in advance since the cost/mile was much less in advance than at the end. I turned it in with 44,995 miles against the 45K lease agreement so cost was as expected. However, once done, I was not comfortable with renting & have not done it since.
About 1 1/2 years ago our one daughter was getting a Focus & comparing leasing for 3 years with predetermined option to buy at the end of 3 years was less than purchasing up front since they were offering greater incentives on leasing compared to purchase. As Kit implied, you need to do the math on your circumstances.
January 25th, 2018 at 2:39 pm
@12 Hi Kit,
Leasing is mostly for people who look at vehicles as either “Status Symbols” or “Disposable Applicancies”. I tend to keep my vehicles for many years unless they give me trouble in the first few years of ownership. If a vehicle has been troublesome during the new car warranty I will rid myself of the inferior OEM product just before or immediately after the new car warranty is done and not revisit that OEMs products again.
January 25th, 2018 at 2:56 pm
16 Yep, most people I know who lease want “status symbols,” recent model year “premium” brands. Also, the probably don’t want them after they are off warranty.
January 25th, 2018 at 3:42 pm
@ Kit: Yeah,I’m in the same boat. I live on my VA disability,(100% sc/p&t) and my SS.For healthcare I have the VA,( but it’s over 100 miles away) so use my Vets choice card for civilian care,(worlds better)and of course,medicare.
New Jeep Cherokee,I love it. But didn’t some other articles have the torque of the turbo 4 banger listed as 290 ft.lbs.?
January 25th, 2018 at 4:08 pm
I recently saw an article, maybe Jack Baruth, saying that all of tbe car companies of the world should use the same 2.0 liter turbo four. Just figure out which of the two dozen out there is best, and everyone use it.
Yes, I’m surd he was writing in jest, but many millions of dollars in development cost would be saved, if all of the car companies weren’t out there designing a different, but similar version of the same thing.
January 25th, 2018 at 4:11 pm
How can tweaks to the lift gate and other trim add 27 cu.ft. to the Cherokee’s cargo space? That is akin to adding 2 compact car trunks.
January 25th, 2018 at 4:20 pm
I just saw a video this week with the Nissan park tech on conference room chairs. No matter were they are in the room,they return to a spot at the conference table.
January 25th, 2018 at 5:44 pm
Ken —–”Politics, Politics, Politics. All Is Politics”
January 25th, 2018 at 5:46 pm
20 Thinner lift gate, thinner rear seat backs, lower floor (somehow), wider cargo area? A little of all of those? More “square” lift gate?
January 25th, 2018 at 6:40 pm
@23 – Hard to image that adds to 27 sq.ft. Within the scope of a minor change freshening.
January 25th, 2018 at 8:26 pm
24 I agree. It would be hard to come up with another 27 cubic feet. We may hear more.
January 26th, 2018 at 8:19 am
@Drew – I may have heard wrong during the presentation and wrote it down wrong in my notes. I will find out and correct it as necessary.
January 26th, 2018 at 9:10 am
Probably 27 cubic inches
January 26th, 2018 at 9:18 am
Just what everyone needs, self parking slippers and remotes. Just thinking about the house of the future where everything returns to its set location. Now if they can figure out how to get dirty laundry and dishes to find their way to the washer machines and then dishes back to the cupboard and clothes neatly folded into the dresser.
January 26th, 2018 at 9:19 am
Form an article on “thedrive.com”
“And since it’s what’s inside that counts, Jeep has redesigned the cargo area to add space, bringing the capacity to 28 cubic feet behind the second row of seats.”
January 26th, 2018 at 11:22 am
Don’t tell me how much the profits increased, tell me how many new US employees were added. That is how we will judge the success of the Trump Tax Cuts!