AD #2826 – New Mercedes GLA Highlights; Lincoln Axes Rivian-Based Electric SUV; Should Ford Consider a Merger?
April 29th, 2020 at 11:54am
Listen to “AD #2826 – New Mercedes GLA Highlights; Lincoln Axes Rivian-Based Electric SUV; Should Ford Consider a Merger?” on Spreaker.
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Runtime: 11:20
0:07 BMW Finishing Up Tests on New 4 Series Coupe
1:00 Highlights of Mercedes’ New GLA
2:01 Autonomous Shuttles Turned into Pizza Delivery Vehicles
2:40 Glickenhaus to Offer Porsche-Inspired Buggy Kit Car
3:06 Infiniti Invents ‘Carigami’ to Pass the Time
3:55 Dealers Reluctant to Stock Used Inventory
4:44 Lincoln Axes Rivian-Based Electric SUV
5:09 Ford Delays Autonomous Vehicle Service
5:35 Automakers Still Burning Through $1 Billion a Week
6:07 Analyst Says Ford Should Consider a Merger
6:26 Should Automakers Merge or Merge Operations?
7:40 Elon Musk Ready to See Quarantine End
8:04 Why Tesla’s Gigafactory is the Biggest
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
There’s plenty of coronavirus news for us to cover, and we’ll get to it. But we start out today’s show with a focus on product and technology.
BMW FINISHING TESTING ON NEW 4 SERIES COUPE
We start in Germany where BMW is running the 4 Series Coupe through its final phase of dynamic testing. The sporty two-door already went through rigorous winter tests in Sweden and tracks, including the Nurburgring. Now engineers want to see how it performs in normal driving conditions. They’ll do their final chassis tuning on highways and roads near the BMW’s test center in Munich. The 4 Series Coupe will feature an M version at the top of its lineup. It’s powered by an inline six-cylinder engine which is mated to an 8-speed automatic transmission. It also features a 48V mild-hybrid which will not only improve fuel economy, it will help improve acceleration off the line.
NEW MERCEDES GLA HIGHLIGHTS
And BMW’s greatest rival Mercedes-Benz revealed more details about the new GLA. Here are the highlights. It’s a little taller and a little shorter than the outgoing model, and passengers will sit up higher as well. The interior has three display screen options: two 7-inch displays, one 7-inch and one 10.25 inch or two 10.25 inch displays. There will be a range of gasoline and diesel engines with the highest output currently rated at 225 horsepower. They can be mated to either a 7- or 8-speed DCT as come with front- or all-wheel drive. All-wheel drive models come standard with an off-road package that includes unique lighting, an additional drive mode, special view from the display screen and hill descent control. The new GLA is scheduled to launch in Europe at the end of this month, followed by the U.S. and China.
AUTONOMOUS SHUTTLES TURNED INTO PIZZA DELIVERY VEHICLES
Now to Florida, where the mobility company Beep came up with a unique way to use its fleet of autonomous shuttles. Since no one is signing up for rides right now, Beep is using its vehicles to deliver pizzas to health professionals at a medical center in Orlando. After the pizzas are cooked, each box is sealed, loaded on cart, put into the shuttle and taken over to the medical center where workers can roll the cart right into the building. And Beep is not just delivering pizzas with its fleet of autonomous shuttles. It’s also been using them to deliver medical supplies and transfer COVID-19 tests.
GLICKENHAUS TO OFFER PORSCHE-INSPIRED BAJA BUGGY KIT CAR
Scuderia Cameron Glickenhaus, which is known for making really fast and really expensive sports cars, could come out with a kit car. It showed this off-road, baja-like buggy whose design is inspired by Porsche 959 rally cars. The company also makes another buggy, called the Boot, but wanted something smaller and more affordable. This so-called ‘mini Boot’ kit car would fill that gap.
INFINITI INTRODUCES ‘CARIGAMI’ TO PASS THE TIME
Every automaker seems to be coming up with coloring books for kids to use while they’re quarantined at home. But Infiniti decided to do something different. It’s giving you the opportunity to create origami-like designs of some of its vehicles, which it’s calling “Carigami.” The templates can be downloaded at Infiniti.com and then you just print them out and assemble them using a knife and glue. Three models are currently available, the Q50, QX80 and FX crossover but more will be added in the future.
The financial situation at Volkswagen and Daimler is bad. So much so that the automakers are practically begging the German government to get sales going again, probably with buyer incentives. In the U.S. dealers are reluctant to stock their used car lots with more cars because sales are so slow. Wholesale prices dropped 16% earlier this month so dealers are selling off what they have now and waiting for things to turn around. The good news is it might not take long. J.D. Power predicts wholesale prices will be down through June before improving dramatically.
LINCOLN AXES RIVIAN-BASED ELECTRIC SUV
Volkswagen and Ford reported dismal earnings for the first quarter. No surprise there. And they both warned that their business is going to get worse. Ford announced it’s going to drop a plan for Rivian to make a luxurious electric Lincoln SUV. But that project was going to eat half a billion dollars and so it got the axe. Remember the clip we played yesterday from our interview with Matteo Fini from IHS Markit, who said that vehicles that aren’t very far in the development process are the most likely to get cut.
FORD DELAYS AUTONOMOUS VEHICLE SERVICE
Ford is also going to delay its autonomous vehicle service by a year, although we wouldn’t be surprised if it announces another delay further down the road. And we have to wonder if Ford will think about stopping its rehab of a glorious historic train station in Detroit, which was going to become the center of development for its mobility services. It’s estimated Ford was spending over $1 billion to restore the building.
AUTOMAKERS STILL BURNING THROUGH $1 BILLION A WEEK
Before the crisis hit large automakers would typically burn through about $2 billion in cash every week. Now they’ve slashed their spending to the bone, but they’re still burning through prodigious amounts of cash. One analyst firm, Morningstar Research, estimates GM and Ford are burning through $130 million to $150 million a day. That’s around a billion a week. And unless they start to get revenue coming in the door, they’ll be out of cash before the end of the year.
ANALYST SAYS ITS TIME FOR FORD TO CONSIDER A MERGER
Adam Jonas, the well known automotive analyst with Morgan Stanley says it’s time for Ford to seriously consider consolidating or merging with another automaker, like Volkswagen. He even suggests that Ford should think about exiting the European and Chinese markets.
SHOULD COMPANIES MERGE OR MERGE OPERATIONS?
Here’s my Autoline Insight. I have a different idea than Adam Jonas. Before Ford thinks about merging with another car company, it ought to consider merging its powertrain operations with General Motors, and maybe even FCA. Collectively, the three of them make 20 million engines a year, and 20 million transmissions. And 90% of that production overlaps, meaning they all make engines with the displacement, and transmissions with the same number of gears. And yet, with the exception of some iconic engines, like the Hemi, GM’s LS2 or Ford’s 5-liter, most customers don’t even know what they have under the hood of their car. So why not eliminate all that duplication? Even though piston engines will be around for decades, everyone knows that the future is electric. By merging their powertrain operations GM, Ford and FCA could save billions.
So what do you think? Should car companies merge with one another, or simply merge operations where the vast majority of customers would never even know the difference?
ELON MUSK READY FOR QUARANTINES TO END
First he tweeted out “Give people their freedom back.” Later he tweeted his support for Texas for allowing businesses to reopen. Then tweeted out “Free America Now.” Sure sounds like President Trump, right? But it’s not. It’s Elon Musk, who wants to see the quarantines and stay at home guidelines come to an end right now.
WHY TESLA’S GIGAFACTORY IS THE BIGGEST
Tesla likes to brag that its Gigafactory is the biggest battery factory in the world. And it’s true. No one else has built one that large, and there’s a reason. It all has to do with safety. On Autoline After Hours last week Bob Galyen, who was the CTO at CATL, which is the world’s largest EV battery manufacturer, explained why they never built a plant as large as Tesla’s Gigafactory.
Bob Galyen, Galyen Energy LLC
“We don’t build what you would term a huge Gigafactory. Why? In Chinese law there is a requirement for fire egress every 60 meters in the building. In the United States it’s greater than that. And I’m not throwing rocks at our own people for not having rigorous safety protocols, but if you’ve ever been involved in an industrial fire, which I have unfortunately been involved in in the past, you want to get out of that place as fast as you can. Chemicals that are used in battery manufacturing are typically what you would call nocuous materials, or noxious materials. And of course getting out as quickly as possible is of paramount importance. If you build too big of a factory, we have a lot of people who cannot run 100 or 150 yards to save their own life because they’re not in good physical condition. Therefore if you build a factory that is too big, human beings cannot escape. Therefore, all the plants I’ve been involved in with design reviews and built in China, have been built such that we have a certain amount of a gigawatts worth of capacity, and there’s separation of the buildings. The physical separation of the buildings is filled with thick concrete. Because if you have to bring in a snorkel truck, the typical 100-foot aerial ladder truck, you deploy the side pods on that thing so that you get stability, you can pick people off the top of the roof or break out the windows to extricate them from the hallways that go around the outer perimeter. Some factories don’t do that. And I’m not going to mention other factories here in the United States that don’t do that, but it wouldn’t take too much investigation to find out who those are. My whole point to that is safety is Number One, whether that is in product design or whether it’s in taking care of the health and safety of the people who are in the factories that build these products.”
Bob Galyen shared a ton of knowledge about batteries and future applications and you can watch that entire show right now on our website or YouTube channel.
And with that we wrap up today’s report, please join us again tomorrow.
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Comments (37)
April 29th, 2020 at 12:13 pm
if doj lets them, do both.
April 29th, 2020 at 12:13 pm
John, your idea of consolidating some powertrain parts among GM, Ford, and FCA makes sense to me. Keep the few engines that are the “soul of the brand,” and then use the best of the others. Ford has some good turbo 4s and V6s, while GM has probably the best of the non-turbo V6s. GM and Ford are already sharing 10-speed automatic transmissions, and Chrysler is building the ubiquitous XF 8-speed in Indiana. Use both of those, and phase out the other longitudinal automatics, like the still-used GM 6-speed. Similar consolidation could be done with the transverse engine transmissions. As you allude, except for buyers of pony cars, Corvettes, and trucks, few people know or care where the engine and transmission came from.
April 29th, 2020 at 12:28 pm
John why doesn’t someone tell Elon to shut-up, he sounds so damn stupid.
What a shame that Ford is now being talked about as a merger candidate. The original mass produced car in the US (some might say the world) is now run by a guy that honed his manufacturing expertise building file cabinets is now running down one of the iconic nameplates in automotive manufacturing. Talk about mismanagement its no wonder why Alan Mulally ran from there as quick as he could.
April 29th, 2020 at 12:33 pm
I was under the impression that the big 3 had previously outsourced or consolidated components like axles, wheels, bumpers. Non-iconic engines and transmissions seems like the next logical step. As far as partners for Ford goes, VW seems more like a takeover than a partner. Someone like Renault or Nissan sounds better to me. Ford could provide trucks and Nissan has cars that everyone except Larry likes.
April 29th, 2020 at 12:33 pm
About mergers: What Sergio said. A powertrain merger is a great idea.
April 29th, 2020 at 12:56 pm
GM consolidated engines back in the late 70s and it went over like a lead ballon. In the long run I’m sure it was a good move.
April 29th, 2020 at 1:01 pm
FCA, GM and Ford will never merge powertrains. That’s the heart and soul of a car and they don’t work well together.
April 29th, 2020 at 1:04 pm
To add to #7, the Ford GM transmission project didn’t go well with the 9 speed not even used by Ford.
April 29th, 2020 at 1:08 pm
Your suggestion of sharing products …is right out of the old British Leyland “Badge Engineering”lay book that was also used by GM with the “corporate engine transmission” cost saving edict for Cadillac, Olds. Buick, Pontiac,and Chevrolet. How did that turn out?
April 29th, 2020 at 1:08 pm
John,
I’ve heard you say that GM, Ford and FCA needs to work together on engine and transmission build and design. That makes a lot of sense to cut expense and still achieve the same goal. Why, why won’t they listen to reason? lol
April 29th, 2020 at 1:15 pm
It sure seems like Ford, GM and FCA could all use one set of 4 cylinder engines with a few different displacements (turbo and non-turbo). Same for the V6′s. I agree on the iconic motors.
I recall that Chrysler, Hyundai and another automaker (Mitsubishi?), did a cooperative engine deal on 4 cylinder engines a decade or so back. I think it was called Global Engine Manufacturing (GEM). It didn’t work out too well. The engines were mediocre and I believe Chrysler installed most of them in their cars (Dodge Caliber, Jeep Patriot and Compass, maybe the Chrysler 200). The cooperative venture between GM,. BMW and Chrysler for a hybrid transmission didn’t work out well either. BMW never installed it, Chrysler used it in two SUV’s with very small installation rate, and GM used it in large SUVs and pickup trucks that cost a lot of money and did not sell. The warranty expense for that thing was horrendous because it never worked well.
Maybe the lesson is that when its nobody’s engine or transmission, it suffers from top notch investment or engineering talent. Looks good on paper, but like many things it has to be managed well.
April 29th, 2020 at 1:23 pm
4 – Ford and VW already have a number of cooperative projects cooking and results so far have been very positive. I think more cooperative projects would be better than a merger. Two large companies with large egos is not a recipe for success – see also DaimlerChrysler.
Renault is not in a strong position at the moment and has a large product overlap with Ford in Europe. Their ties to Nissan are significant, meaning a merger would be problematic, especially with Nissan’s issues.
And, who says everyone like Nissan cars except Larry? Their styling is horrendous or forgettable, depending on the model and their vehicles are cheaply made. That is why their sales are down severely world-wide (even before Covid effects). They are not in good shape financially, so how would they be a good merger candidate for Ford?
April 29th, 2020 at 1:29 pm
Hi John!
I generally watch your weekly tv show but the daily release is also interesting.
In re: to joint engine use, GM already used this strategy. Remember in the 70′s when Your GM vehicle could have ANY engine in it. A Chevy with a Olds motor and the matching bolt pattern transmission or visa versa. In Canada a Pontiac/Parisien(SP) even had complete Chevy frames and drive trains, if I recall. You could tell because the frame was MUCH more narrow than a REAL Pontiac frame. suspension and drive train.
I also know that Mitsubishi supplies their turbo motors to a whole host of other manufacturers.
I guess if the manufacturers can blow it by their ignorant (ignorant as in unknowing not to be confused with stupid) customers, they will! Many have brand loyalty issues, including me! If I buy a performance vehicle I want the engine that “belongs” in that vehicle. If I’m buying a van or economy car I want it to get reasonable performance good gas mileage and be dependable. I wouldn’t really care what kind of motor it had.
Just sayin’
Thx for listening!
Phil
April 29th, 2020 at 1:36 pm
Merging powertrain operations – I’m on the side of those opposed as I also feel that the engine is the heart of a vehicle. I can also remember the days in the late ’60s (long gone) when those of us at Chevrolet considered Pontiac more of a competitor than Ford. Part of this was Chevrolet was about the same size as FOMOCO, & we also had friends from school at the Pontiac, & BOC.
April 29th, 2020 at 1:46 pm
11 The current Chrysler “Tigershark” 4 cylinder engines are derived from the Chrysler/Hyundai/Mitsu “World” engine, and are still mediocre.
GM got in trouble when the started to standardize their ~300-350 CID engines, and some people didn’t like it. Some were non happy about getting a Chevy engine in their Olds Cutlass, never mind that the Chevy V8 was probably better than the Olds one.
April 29th, 2020 at 1:48 pm
John,
A good proposal. Why stop at manufacturing? There are some base Product Engineering areas that could also be consolitdate. For example, does a customer care how a door run channel operates or how a door trim panel is attached? Electrical distributions systems could commonize with connectors, how they attach, etc.
Logistics would also be an area to review. The movement, warehousing, and scheduling of parts and dealer delivery of finished vehicles are all prime canidates.
April 29th, 2020 at 1:50 pm
few years back, achates power showed what appeared to be a better engine for most OEM applications. Their comment at the time was it was hard for any OEM to walk away from their large investments. Given Ford’s expierence with another now defunct diesel manufactuerer, that suggestion surely looks better on paper than in real life
April 29th, 2020 at 1:52 pm
11 There were a lot of Trans Am owners that were very disapointed that their car had Olds 400 as opposed to the Pontiac 400 which had more power.
April 29th, 2020 at 1:52 pm
Elon will probably say that he was just being sarcastic in saying that everything should open up immediately.
If Ford actually merged with anyone, VW would seem to make the most sense. Ford is strong in big pickup truck in North America, and fairly strong in crossovers in N.A., while VW remains a relative small player. VW is strong in the rest of the world, where Ford is, at best, weak, and they don’t sell in some markets at all. With a combined VW/Ford, though, the question comes up of “how big is too big”?
April 29th, 2020 at 2:26 pm
John, while I hear you in regard to the economic sense of consolidating powertrain businesses among the Detroit 3, it does harken back to the 1970s when GM introduced “inter-divisional assembly” to the brands. That marked the beginning of the end of any semblance of difference among the then-5 major GM brands within the model categories. A Pontiac B-body car became virtually identical to it’s Buick, Chevy, and Oldsmobile counterparts. While the economics make unquestionable sense, I have to believe it would lead to the homogenization of all models within a category of the 3 companies.
April 29th, 2020 at 2:45 pm
Ford and VW already had a joint venture in Latin America during the late 70′s and early 80′s. the cars they produced didn’t sell well and were very forgettable. Hence it didn’t last. Saving CAPEX money is one thing but producing memorable cars that the public wants is even more difficult.
April 29th, 2020 at 3:02 pm
excellent show yet again, i really liked the giga factory low down,and getting people to to safety,should the need arise. I also like your idea of power train sharing between the big 3. The halo cars could keep their own in house power trains,but most of the rest could easily be shared.
April 29th, 2020 at 3:27 pm
With the level of dislike and competitive arguing between FCA, Ford & GM, I think any merger would be a disaster. But, a takeover is a good idea. One company in charge, one culture becomes dominant and the others either buy in to the new status quo or move on. When you merge, you have everyone expecting that their way will dominate, a recipe for backbiting and complaining.
April 29th, 2020 at 4:16 pm
Agree with your opinion that huge efficiencies are low hanging fruit (consolidation of engines/transmissions ). Why not start with wheels? “Ya can’t put a Chevy wheel on a Ford, etc. etc”: maybe that would be a simple way to breakdown the centuries old mindset.
April 29th, 2020 at 4:28 pm
im all for vw and ford merging their powertrain operations. and while theyre at it,is there a need for an 8 cylinder engine anymore? let me answer that not just no but heavens no! look no further than the output of turbo 3,4,5,6 cylinder engines. or merge with nautilus engineering and achates opposed piston engines. for superior fuel efficiency and reduced emissions
April 29th, 2020 at 4:37 pm
24. Apparently it doesn’t cost to much to make molds for wheels, given the hundreds of different aftermarket wheels. Probably a lot of Ford and Chevy wheels are made by the same companies, like Ronal, which also sells aftermarket wheels.
April 29th, 2020 at 5:49 pm
25 Eight cylinders? Absolutely! I’ll take an 8 with cylinder deactivation that run 70mph at 1400rpm over a turbo every day. When you lean on that turbo to get the V8 acceleration you want you are pushing the limits on that engine and reducing its life. If you do that a lot (which I do), don’t plan on keeping that vehicle for a decade and 150k miles (which I do). Cylinder deactivation equals the mpg playing field between a V8 and turbo 6.
April 29th, 2020 at 5:51 pm
“Tesla reported Wednesday that it earned $16 million and generated $5.985 billion in revenue in the first quarter, results buoyed by improved automotive margins and reductions in operating expenses.” (see web source)
Looks like taking the opposite advice of “Montana skeptic” and “Anton” has paid off again.
April 29th, 2020 at 8:09 pm
The problem with engine consolidation is that it seems no engineering group takes the time and motivation to produce a GREAT engine. Chrysler has tried with the alliance with Hyundai (the 1.8, 2.0, and 2.4L engines with lukewarm success, then later with Fiat’s Multi-air 2.0L and 2.4L engines. There are great 4cyl. engines, why not simply go to Honda and license the VTEC ? If I were head of Chrysler this is what I would do, perhaps in exchange for producing a mid-sized pickup in joint production and putting the Ridgeline out of its misery. Problem solved your welcome.
April 29th, 2020 at 8:29 pm
29. The “world engine,” later called “tigershark” was always mediocre, and it now has that complex multi-air system that seems to accomplish nothing. Yeah, Honda seems to have the best 4 cylinder engines as a compromise between power and efficiency, while using regular gas in most cases. The 1.5t “grows oil” in some cases, though. The BMW and M-B turbo 4s work well, but they recommend premium for both. I don’t know if they really need premium, though my sister uses regular in her Mini Countryman, with a lower power BMW 2.0, and it works fine, even though they recommend premium.
April 29th, 2020 at 8:55 pm
@25 I for one would much rather have a normally aspirated V8 than a turbo V6 any day. Much less stress on the engine and it (non-turbo engine) should last forever. When the turbo itself fails, and they all seem to, one writes a big check.
April 29th, 2020 at 9:45 pm
31. It’s probably too early to really know the life expectancy of the Ford turbos in pickup trucks as they reach high mileage. The high volume 2.7 turbo has been around only about 5 years. Still, what’s the point? In CR’s tests, an F150 with a 2.7 turbo had essentially the same acceleration as a Silverado with the 5.3 V8. The Ford got about 10% better mpg “overall” in their tests, but if you need a turbocharger at 150K miles, the cost will eat up that fuel savings many times over.
April 29th, 2020 at 11:50 pm
@ #31, #32 The Ford truck twin turbo V6′s do seem to be reliable to the 150K-200K range so far. It does become an expensive problem if you do have a turbocharger failure prior to that. It is the same with the Chevy 1.4L (Cruze) or BMW 3.0L (3 and 4 series) from what I have observed.
April 30th, 2020 at 12:05 am
@#30 The BMW premium fuel requirement is because they are tuned for maximum performance with premium. The ECM will adjust for regular 87 octane fuel but HP and torque is lower.
April 30th, 2020 at 8:54 am
34. I never understood the need, or recommendation for premium for the very mildly tuned Mini S engine, only 189 hp from a 2.0 liter turbo engine. With not-uncommon 300+ hp 2.0 liter turbos, needing premium, at least for rated performance certainly makes sense.
April 30th, 2020 at 12:41 pm
I like the cut of Bob Galyen’s jib.
May 1st, 2020 at 9:01 am
A merger with the VW Group? I think not, but a strategic alliance, like what Nissan and Renualt had, may work. This way on the product front they can work together, where it makes since and saves money, but they are still independent companies. The only thing about this and even with the combining of the powertrains on the Big 3, are all the jobs that will be lost by the employees on the manufacturing side of such a move! Saving the company billions, off the backs of the line workers. To your point John, it may make since with the engines found in each automakers sedans and unibody CUV’s and crossovers, but this would NEVER work in their pick-up trucks, especially the full size trucks and SUV’s! ‘You mean to tell me that the only difference between an F-150, Silverado and a Ram is how the styled trucks body?!?! That would be like putting up different curtains on the same window!’ I think the truck faithful, where each automaker makes the most of their money and profits, would-Hit-The-Roof! Where these automakers would stand the most to gain and save money would be on BEV’s and vehicle electrification! Like you said, it is the future and that is a cost that is going to be a bitter pill to swallow! If the consumer doesn’t know what size their engine is, or who makes it (Jaguar will son use BMW engines and Aston Martins use Mercedes V8′s), would they care if the EV hard and software that motivated their Model Y, Mustang Mach E or ID3 were one and the same? The problem is if they would set their egos aside and go with best practice and work together.