This is Autoline Daily reporting on all aspects of the global automotive industry.
DIESEL EMISSION SCANDALS NOT GOING AWAY
We’re starting to wonder if accusations of automakers cheating on diesel emission regulations will ever go away. Yesterday, German prosecutors fined Daimler nearly $1 billion because it certified certain diesel vehicles for passing emission tests even though they did not. And in the U.S., prosecutors indicted a diesel calibration manager at FCA for cheating on diesel emission certification. Along with other FCA employees, he’s charged with conspiracy, clean air act violations, wire fraud and making false statements, even to FCA’s internal investigators.
RENAULT WANTS ANOTHER SHOT AT FCA MERGER
Speaking of FCA, Renault’s chairman Jean Dominique Senard, says he would welcome another run at having FCA join the Renault-Nissan-Mitsubishi alliance. Bloomberg reports that Senard says he would be delighted to do a deal. The whole project fell apart last June because Nissan would not go along with the deal. It’s still mad that Renault owns 43% of Nissan stock, while Nissan only owns 15% of Renault. Now it looks like Renault is open to a more equitable balance, and it that happens, look for FCA to join the alliance, which would make it the largest automaker in the world by a wide margin.
NIO INVESTOR HIT HARD BY DECLINE
Investors that bet heavy on the Chinese EV startup NIO are going through a bloodbath. A Scottish investment firm called Baillie Gifford bought 100 million shares of NIO for about $670 million. Today those shares are worth only $198 million. Baillie Gifford is also the second largest shareholder in Tesla after Elon Musk, where it has made a tidy profit. But this also shows that even though the future may be electric, it’s still an extremely risky segment to invest in.
SCANIA DEVELOPS CABLESS AV TRUCK
Last year, Volvo Trucks revealed an autonomous, trailer-hauling vehicle that doesn’t have a cab. And now its Swedish rival, Scania, is doing the same thing. Called the AXL, the concept is designed for mines or large construction sites. But unlike Volvo’s truck which is electric, Scania’s runs on biofuel. It’s built on an existing Scania truck chassis and uses cameras, radar, LIDAR and GPS to navigate. And to communicate with people outside the truck, the headlights will turn on when it recognizes someone to let that person know the truck “sees” them. Autonomous trucks are already being used at mines and construction sites but those have a cab and safety drivers to take over if necessary.
PEUGEOT VAN PERFECT FOR OUTDOORS
Here’s a cool concept that caught our eye. The BOXER 4X4 CONCEPT is Peugeot’s idea for the ultimate recreational vehicle. It has unique tires, all-wheel drive and the suspension has been raised to improve ground clearance. The large interior features a table behind the driver’s seat and it has enough space to accommodate up to 3 people on a long-term basis. There’s even room on the roof for a bicycle and full-size canoe. Overall, it has a pretty aggressive look and if there were a European version of the A-Team, we would probably see them driving this thing.
VOLVO HIGHLIGHTS BATTERY SAFETY WITH XC40 EV
Volvo is coming out with its all electric XC40 next month, and claims it’s the safest CUV yet. Since there’s no lump of an engine up front, engineers were able to completely redesign the front end structure. The battery is protected by an extruded aluminum safety cage which was embedded in the middle of the car’s body structure, creating a built-in crumple zone. Even the rear end structure was redesigned to divert crash forces away from the passenger cabin. We’ll have to see how this goes for Volvo. So far it looks like the key to success with EVs is by using a dedicated platform, not by modifying an existing one.
SKILLED TRADES RIPE FOR REFORM
The UAW strike at GM shows no sign that it will come to an end anytime soon. While the union wants higher pay, better profit sharing and fewer temporary workers and other things, at some point it’s going to have to help GM put a lid on rising labor costs, which are the highest in the US auto industry.
One area that is ripe for reform involves the skilled trades. To become a skilled trades person at GM, Ford or FCA you have to go through a four year training program. At the end of that you get a journeyman’s card but for only one specific skill. You get your card to be an electrician, a millwright, a machinist, or a tool and die worker. It’s a system designed to force the automakers to hire more skilled trades people.
Meanwhile at the transplants it’s a much different situation. At Honda, for example, trainees go through a 2-year program at a local community college, where they spend part of the week at school and part of it on the factory floor where they put their learning to use. And they learn all those trades, not just one. In fact, Honda doesn’t even call them skilled trades people, they call them maintenance people. Once they graduate they start at $60,000 a year, not including benefits. And most of those graduates are young, only 21 or 22 years old.
These graduates really know what they’re doing. Honda has excellent uptime and safety records. And there’s no reason why this wouldn’t work at GM, Ford and FCA.
And with that we wrap up today’s report, thanks for watching.
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Comments (28)
September 25th, 2019 at 12:26 pm
I used to work construction as a union Steamfitter, still have my ticket. I’ve heard many a story from paper mills using the multi trade model and there’s probably a lot of good reasons why you don’t see it much. Maybe the reason Honda does’t call them ” skilled trades” …. Like most situations you can’t just look at one part of an operation and declare it the reason for success, it’s usually multi facetted.
September 25th, 2019 at 12:34 pm
I’ve worked in heavy industry for almost 40 years. No one can be good at eveything, with the exception of some on this list. Most of the cross craft work means you don’t need an electrician to fix an extension cord. Each person has a skill set that leans one way or another. Otherwise you have a jack of all trades and a master of none.
September 25th, 2019 at 12:37 pm
Re risks in investing (in any hot segment), there are two kinds, as every MBA program will tell you, systematic risk which you can avoid (the risk if you invest in only one or two companies in an industry) and non-systematic risk which you cannot. If you have a high tolerance for risk, you can do what this outfit in Scotland did and invest only in a couple companies, but if not, you can always invest in a Mutual Fund focusing on that industry, which is what I did with Biotech since the 80s, every month I put 1/4th of my supplementary (not the main) 401k contribution in the Fidelity “Select Biotech” fund, , and 3/4ths in Fidelity Magellan, a huge diversified fund across all industries. When I started it was $100 in Bio and $300 in Magellan every month. After 33 or so years, as of today, the $100 a month in Biotech became $558.7k, (despite a $12k hit yesterday when markets were down) while the $300 in Magellan became only $ 695k.
So I avoided the systematic risk but still got over 13% annual (!!!!) return. The Magellan return must be much less than that, maybe 10% or less.
September 25th, 2019 at 1:02 pm
When I received my journeyman’s card at GM, we too learned on the floor while going to school, so this is nothing new. After the company was spun off, the trades were directed to do other trade work. Various trades have always supported and worked collaboratively. But the big difference lies in the adage ” a jack of all trades but an expert in none.” I learned this to be true from my own experience and observations. There is absolutely no comparison between a “maintenance person” and a card-holding skilled tradesman. The biggest down fall concerning a general maintenance person is in SAFETY. Being just good enough just might get you or someone else injured or killed! I’ve seen this pappen too many times.
September 25th, 2019 at 1:17 pm
The biggest advantage to companies like Honda to have Maintenance people rather than skilled trades is cutting un-necessary labor. Many of the UAW plants require that if any work is going to be done many trades need to come in even if they don’t end up doing anything.
For example if they are going to put up some new lights. A job that could be managed by two people at Honda. At GM they would need a Lift driver to reach the work, An Electrician to wire the lights, A millwright in case an brackets need machined, A welder in case anything needs welded, A plumber because a water line needs shut off. Another team member to sweep up. 6 people vs 2.
September 25th, 2019 at 1:21 pm
4 When I worked for GM, and then Delphi, I had process support responsibility in a silicon wafer fabrication, and had to work with skilled trades to get equipment repaired. The big problem was that we sometimes lost hours of up time on equipment, because of trade demarcation issues. An example is that a pipe fitter working on a piece of equipment would need to wait for an electrician to do a very simple job that the fitter could easily do. If the fitter connected or disconnected the wires, his union “brothers” would be upset, and if I did it, as a salary person, a grievance would be filed, and the electrician “at the top of the list” would get four hours of overtime pay for doing nothing. I think things have changed for the better, at least a little, on such things at GM and Delphi, but I don’t know the details.
September 25th, 2019 at 1:22 pm
A typical truck driver for a mine or construction site doesn’t make great money to begin with. Do these AV cab-less trucks really offer an advantage? I suppose being able to run 24/7 might be one, but they still need to be loaded and it looks like in the video that someone still needs to be there to direct a fleet of trucks from a desk.
September 25th, 2019 at 1:39 pm
The Skilled Trades comment has some merit, even if each plant would still need some specialized journeyman for each skill. The system is use today is ripe with inefficiency. As an example, I was once responsible for procuring a 2-post vehicle lift for the workshop of building. The cost for the hoist was ~$6000. It was a union shop, but out of curiosity, I had the supplier of the hoist provide a quote to install it. They quoted $1275, with all work complete in one day.
Then I had to get the union to quote – $11,204!!! This included millwrights to do most of the mechanical work, plumbers to attach the hydraulic lines, a hydraulics person to fill the hydraulic tank and bleed the system, and electrician to attach it to the existing power drop. Because each trade needed to work on ladders to reach the high parts, everything was doubled (one worker, one spotter). The installation took approximately 2 weeks.
Perhaps with Honda’s system, a millwright would be skilled enough to attach a couple hydraulic hoses and fill the system. And maybe one spotter could help all of the trades.
September 25th, 2019 at 1:46 pm
4) kit, that was the situation when I was at GM/Delphi, for the first few years, but those rules became more relaxed. The lead trade would contact only the support needed and when. Reason it this way; Most want to get the job done quickly and get out… maybe to just get back to the shop. Working in this manner, even out of laziness, reduced down time and saved money.
I’ll bet anyone that a good tradesperson will save ample more down time than a gen. maint. person any day of the week and do it in the proper manner!
Tidbit: Did you know one( a set-up person) could qualify for state certification maintenance worker if they could show they had experience having done repairs to their machines ( like changing drill bits, various set-up devices, or making machine adjustments )for X number of hours? We hired some of these clowns, and boy what a flubber -f#^k they were!
September 25th, 2019 at 2:01 pm
Great expose! on the union training program and its limitations “by design”. The FCA potential merger sounds also interesting but what about the “EGOS” of these executives!!!
September 25th, 2019 at 2:23 pm
@3, non-automotive topic: I watched last Friday’s episode yesterday and noticed that you wrote about a Dragon sailboat your family owns in Europe. You mentioned a value of that boat. Depending on who built it and when, whether it is a wooden boat or a polyester one, how it has been equipped and the condition of the ship, any results in races, its value may be significantly higher than you mentioned. Just wanted to mention this to you.
September 25th, 2019 at 4:12 pm
Back in the early 70′s I worked for RCA Computer Division (yes, believe it or not, RCA designed and manufactured large mainframe computers – called the “Spectre” series – to compete w/IBM) in Palm Beach Gardens, FL. I was in test engineering (magt), but the manufacturing personnel were union. I also made a point of getting along with this group of “testers” and several became good friends.
This was the first job I had in a union shop, so I was not familiar with all of the rules mgt. personnel had to follow. All components and circuit boards were tested prior to assembly of each end product by union employees. On one occasion, one the test fixtures I had built failed due to repetitive operation, which takes an employee off the job – unproductive – and can cause a backup somewhere else in the manufacturing process. I had repaired my “test fixture” and needed some production circuit boards to verify that the fixture was operational. Within minutes, a union shop steward came over and asked what I was doing, and I explained that I needed to verify that my repairs were good before anyone could resume testing. The rep asked where did I get the circuit boards, where I pointed out the location that was approximately 10-15 feet from where I was working. This event was also reported to the foreman for that group that an engineering mgt. person was doing union work. Another shop steward, who I knew very well, came over and told the other steward to leave me alone and that I had no idea that I had “infringed” on someone’s job.
This issue was reported to my Supervising Engineer who informed me that a minor issue, such as what I encountered, could actually cause a “walkout.”
I then went back to the person that originally “reported” me and apologized to him and explained that I had no idea I was “doing his job.” He was very gracious and understood that I was sincere in my apology. I personally found out that most of the craft personnel were just like the rest of us, but there were some that seemed to be at odds with management in general.
September 25th, 2019 at 4:23 pm
11. A new Dragon costs 80-100,000 UK pounds, according to s web site I found. Yeah, used ones vary all over the place. A new set of sails for serious racing would cost a few thousand.
September 25th, 2019 at 6:14 pm
After my plant closed, I enrolled in a one year “Industrial Maintenance Program”. And yes, this was a paid for retraining program (with continued pay) I took advantage of once unemployment benefits exhausted. Hey, I’m honest! This was a superb program for all trades. By the end of the program I received state certification in welding (up to 1″ plate including over-head, level 4 in HVAC, building construction, electrical and 2 cyc. engine repair, just to name a few.
In agreement with this report, there is a place for the general repair person in industry today for the more common, straight forward tasks.
And since I’m being honest, there is no replacement for a “real” tradesman in all areas.
General Maintenance should never include welding except on non-critical parts, Electricians, except for basic trouble shooting and board replacement, Millwright unbalanced loads, Machine repair over-haul. Tool & Die work should be excluded all together.
Just a thought: Maybe the gen. repair person should be limited and called a Dept. Service Repairman and paid at a separate level from a card holding, more knowledgeable skilled tradesman.
September 25th, 2019 at 7:08 pm
I have been maintenance on both sides of the UAW and most recently a maintenance supervisor for a Honda owned supplier. I concur with AD that the UAW does need reformed – badly. Several here are in deed speaking true frustration with UAW maintenance. What I will say from experience that union skilled training is bar none far superior to that of non union. Having stated that I can also say that the depth of skill needed today to repair and maintain equipment is not needed. The key difference in repair work is that union will not require or seldom want outside help to perform a repair. Non union auto suppliers will if needed reply on in house engineers if the repair exceeds their knowledge. A good non union maintenance staff will often perform better and faster than that of a union member. My experience worth not more that 2 cents.
September 25th, 2019 at 8:28 pm
John,
It makes one wonder where diesels would be if it had not been involved in the cheating scandal?
September 25th, 2019 at 8:55 pm
The scandal certainly hurt diesels, but much cleaner hybrids beat them in mpg, on cheaper fuel, having 7% less energy per gallon. I’ve had both.
September 26th, 2019 at 7:02 am
https://www.hidnow.shop/products/rolls-royce-phantom-alloy-diecast-car-model?variant=28474199212122
I’m thinking of ordering three, one of each color. It’s an early Phantom VII, before they made the front lights (below the headlights) a bit more elegant, from round to thin horizontal slits. I like the 6 openings, usually diecasts, even bigger than this 1:24, have only hood and two doors, maybe a trunk too.
September 26th, 2019 at 7:04 am
16 True in the US only. In Europe, gas is $7 – 8 and diesel $5 or so per gallon. Significant difference, which added to the far greater efficiency of the diesel, makes it quite economical. But if your driving has a lot of stop-go, a full hybrid gets twice the MPG than the diesel.
September 26th, 2019 at 8:40 am
The way Honda does it is like saying, “jack of all trades, master of none”.
I do not believe Honda has the best skill trade system. Today, to be an electrician, it takes an equivalent of an associate degree…none less. With the other trades, yes this could be done.
September 26th, 2019 at 9:20 am
18 Most EU countries still have substantially lower tax on diesel than on gas. I assume that is mainly to encourage conservation, but maybe refining capacity favors diesel. I remember Europe having low sulphur diesel fuel years before the U.S., as people started noticing that buildings and monuments were being etched away by the acid rain caused by zillions of vehicles burning high sulphur fuel.
September 26th, 2019 at 9:56 am
21 It was a political decision in the 90s, I remember being back in Germany in 1999 and one of my old professors picked me up at the train station in Duisburg in a Renault Diesel, very happy about the 50 or so MPG it got. The US got the extra low sulfur diesel in Oct 2006, if I remember well. Diesels were forbidden in some European countries for decades, but only in some major cities that had smog problems, while they were allowed in the minor cities and rural areas.
September 26th, 2019 at 10:44 am
Due to the Brexit mess (good excuse anyway), Tata-Jag is closing down UK factories. Wonder if they will make Jags in Calcutta (Kolkata) now.
September 26th, 2019 at 10:55 am
21 I always thought that GM should have made the Volt with a small diesel. What better motor to use as a generator than a little diesel engine. High torque constant RPM and better fuel economy than a gas engine. That to me would have made the ideal hybrid.
Basically would have been like locomotives diesel/electric.
September 26th, 2019 at 11:23 am
23 They are closing them for a week, not permanently, at least according to Auto News. BMW are also shutting down the Oxford Mini plant for a week or two. I suspect both are mainly doing it for what is often called “inventory adjustment.”
September 26th, 2019 at 11:29 am
25 then it’s not very newsworthy. I read the AN title but not the article, it said I’d reached my limit or whatever.
September 26th, 2019 at 11:35 am
24 Cars like the Volt, and regular hybrids like Prius would get somewhat better mpg with a diesel, but that would probably add $1.5-2K to the cost of the car. When you are already getting 50 mpg with a Prius, or ~40 mpg on gas with a Volt, an extra 15 mpg wouldn’t save much money in fuel cost. Actually, in most places in the U.S., it would increase fuel cost.
Peugeot introduced a diesel hybrid CUV a few years ago. I don’t know how well it sold, or if it is still made. I agree that a diesel hybrid, properly done, should be the ultimate non-plug-in powertrain for mpg.
September 26th, 2019 at 11:37 am
26 I’ve reached my limit too.