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0:07 VW Wants to Buy Stake in Tesla
0:51 Trump Criticizes Ford for California MPG Deal
1:48 JLR Developing 3D HUD & Entertainment Display
3:08 Dealers Complain About Care by Volvo
4:00 Urus Boosts Lamborghini
4:35 Autoworker Compensation Breakdown
5:55 BYD Triples Profit, Stock Tumbles
6:28 What Makes People Car Sick?
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This is Autoline Daily reporting on the global automotive industry.
VW WANTS A STAKE IN TESLA
In a bombshell disclosure Volkswagen’s CEO Herbert Diess is interested in buying a stake in Tesla and “would go in right away if he could.” Diess believes VW could profit from Tesla’s know-how in batteries and software. That’s according to a company source who spoke to the German publication Manager Magazin. VW would not buy the whole company, but it has enough cash to buy a significant stake. Diess still needs the approval of VW’s board members.
UPDATE: After this show was recorded, VW came out with a statement denying it is interested in buying a stake in Tesla. We still can’t wait to hear if Elon Musk has anything to say about this.
TRUMP CRITICIZES FORD FOR DEAL WITH CALIFORNIA
Donald Trump went on a Twitter tirade against Ford, blasting the company for making a fuel economy deal with California and four other automakers. Trump said Henry Ford would be “disappointed” in his decedents and that him and Alfred P. Sloan, GM’s former President and CEO, are “rolling over” because executives are weak for agreeing to the deal. GM wasn’t one of the four automakers to sign the deal, so it’s unclear why Trump included it. Trump also went on to claim that the MPG deal will add $3,000 to the cost of a car, make vehicles less safe and that they won’t work as well. But others point out that higher fuel economy standards will save drivers money at the pump. Trump’s claim that vehicles will be safer is also in dispute and there’s little basis for his claim that vehicles will run smoother with less stringent standards.
JLR DEVELOPING 3D HUD & ENTERTAINMENT
The future will be brought to you in living color. Jaguar Land Rover is developing a 3D head-up display that will project alerts like lane departure, hazard detection and navigation directions, directly on the road ahead. It’s also using the same technology to develop 3D entertainment for autonomous vehicles. Passengers would be able to watch 3D movies thanks to head and eye tracking technology that follow their position so they can watch the video without extra screens or glasses. Now that is the kind of technology that will bring customers running into the showrooms.
A programming note here. There will not be an Autoline After Hours this afternoon. But John and Gary will be back next week when Mark Bosanac, the head of Mopar for North America, will join us. He’s got big news to make and is going to bring Mopar’s newest car into the studio. If you’re into muscle cars, you won’t want to miss this one.
DEALERS COMPLAIN ABOUT CARE BY VOLVO
At the LA auto show last year Volvo didn’t have any cars on display. Instead it had giant signs that read “Don’t Buy Our Cars” and “Subscribe, Don’t Buy.” It was all about promoting its subscription services called Care by Volvo. Well, apparently it’s dealers didn’t take too kindly to that. A dealer group in California filed complaints against the subscription service saying it violates franchise laws. So the California DMV launched an investigation. The dealers say it encourages customers to bypass the dealer and they say they also weren’t given notice about the services. Other brands, like Cadillac, have dropped subscription services, not because of dealer complaints, but because very few customers were interested.
URUS BOOSTS LAMBORGHINI
Purists cringed when Lamborghini came out with its first SUV, the Urus. but Lambo is laughing all the way to the bank. The Urus helped boost sales 51% and the company’s market cap jumped by $2 billion. The company, which is owned by Audi, is now worth $11 billion. And Bloomberg Intelligence says it’s probably a candidate for an IPO. Bloomberg also says that when Lambo adds a hybrid supercar next year its profit margins will hit 30%.
AUTOWORKER COMPENSATION BREAKDOWN
The Detroit News reports that the UAW is going to bargain for significant wage increases in this year’s labor negotiations. Here’s a breakdown of what those workers currently earn in total compensation. This includes all benefits such as health care, pension payments, vacation time, and in the case of the Detroit 3 workers, profit sharing. GM’s UAW workers on average earn over $130,000. Ford workers get $127,000. FCA workers make $114,000 and the average worker at the transplants makes $104,000. One of the reasons why GM workers earn so much more is that they make a lot more in profit sharing, more than $40,000 over the last four years, compared to $33,000 at Ford and $20,000 at FCA. Though the formula varies at each company UAW workers get about $1,000 in profit sharing for every billion dollars the companies make in profits. But transplant workers don’t get any profit sharing.
|U.S. Autoworker Compensation|
|U.S. Autoworker Profit Sharing ’15-’18|
BYD’S STOCK TUMBLES
Despite tripling its first-half profit, Chinese automaker BYD’s stock dropped the most it had in more than a year. Due to lower electric car subsidies and a slowing economy, BYD warned that its net income for the first 9 months of the year could grow as little as 1.8%. In the first half of the year BYD’s sales of new energy vehicles were up 94.5%, while sales of non-electrified vehicles were down nearly 45%.
WHAT MAKES PEOPLE CAR SICK?
The University of Michigan is studying what makes people car sick. About one in three people get car sick and autonomous cars could make that worse. There’s been lots of research on people getting sea sick or air sick, but not car sick. We know that it affects passengers, especially those who are reading or looking at a handheld device—the very kinds of things that more people will do in autonomous cars. So the U of M is developing test procedures to figure out exactly what makes people car sick and to what degree–from mild nausea all the way to throwing up. No such methodology exists today. That’s what’s so amazing about the automotive industry. It involves all kinds of scientific research involving artificial intelligence, lidar, high speed computing… and what makes people vomit.
But that’s it for today, thanks for watching and please join us again tomorrow.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.