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Runtime: 10:15
0:07 Ford Names New President & CEO
0:36 GM Digs Up New Dirt on FCA & UAW Corruption Scandal
2:07 U.S. Sales Slowly Recovering
4:28 Lordstown Going Public Through Reverse Merger
5:35 Would You Pay for Parking with Electricity?
6:26 Tesla Will Make “Conventional” Truck if Cybertruck Flops
7:20 FCA Doesn’t See EV Trucks Catching On Anytime Soon
8:21 Ferrari Sales Cut in Half
8:48 Next-Gen Wrangler & Gladiator Not Scheduled Until 2027
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FORD NAMES NEW PRESIDENT & CEO
We predicted back in February that when Jim Farley was named Chief Operating Officer of Ford that he was next in line to take over for CEO Jim Hackett. And that’s what’s happening. Hackett, who took over in 2017 plans to retire as President and CEO, but will stay on as an advisor until March of next year. Farley will have the same titles as Hackett and will join the board of directors, effective October 1st.
GM DIGS UP MORE DIRT ON UAW CORRUPTION
Just when we thought this UAW corruption case was winding up, General Motors dropped a bombshell yesterday. It accused three former UAW presidents of taking bribes directly from Fiat Chrysler Automobiles. It says those presidents, another UAW vice president, and one of GM’s own executives stashed the money in secret overseas bank accounts. Up to now we thought that UAW executives were just stealing money from training centers, not getting bribes directly from FCA. GM says it only just found out about those bank accounts and was asking that the court reinstate its case, which a district court judge had recently dismissed. GM accuses FCA of planting moles at the highest levels of the company to steal information. FCA is accused of getting UAW VP Joe Ashton nominated to GM’s board of directors, and getting its own labor negotiator, Alphons Iacobelli, onto the GM labor staff. Both were sent to GM to steal information and weaken GM through an uncompetitive labor contract, and then let FCA take over GM. If true, it’s an amazingly Machiavellian move. And if the case moves forward we wonder if FCA’s merger with PSA is ever going to happen.
U.S. MARKET SLOWLY RECOVERING
Now let’s look at the sales numbers for July in the U.S., where the market looks like it’s slowly recovering. Automakers sold 122,000 more vehicles than they did in June, but sales were down more than 15% from a year ago. The SAAR, or seasonally adjusted annual rate, came in at 14.5 million, up from 13 million in June. Amazingly two automakers actually posted higher sales compared to a year ago. Jaguar Land Rover was up nearly 9% and Volvo was up 6%. But at the other end of the spectrum Mitsubishi was down more than 46% and Nissan fell 28%. Subaru–surprisingly–posted a drop of more than 22%, but we know it’s suffering from extremely low inventory. Porsche and Toyota also posted big drops. It’s good to see that the market is recovering, but we’ll have to see if it lasts. The surge in the corona virus in so many states could easily kick the legs out from under this recovery.
| U.S. Sales, July 2020 | ||
|---|---|---|
| Sales | 1.2 Million | -15.5% |
| SAAR | 14.5 Million | |
| Jaguar Land Rover | 9,600 | +8.9% |
| Volvo | 9,697 | +6.0% |
| Mitsubishi | 4,800 | -46.5% |
| Nissan | 74,041 | -28.0% |
| Subaru | 51,458 | -22.8% |
| Porsche | 4,000 | -22.4% |
| Toyota | 169,484 | -22.1% |
Keep an eye out later today for our coverage of the Management Briefing Seminars which are put on by the Center for Automotive Research in Ann Arbor, Michigan. This year MBS is going virtual, and so will our coverage of the conference. We’ll be providing condensed wrap ups that hit the highlights of the conference, so that you can keep up with the latest insights from some of the savviest people in the auto industry.
LORDSTOWN GOING PUBLIC THROUGH REVERSE MERGER
What is it with companies using reverse mergers to go public? A reverse merger is where a company that is already listed on the stock exchange goes bankrupt, sells off all its assets but keeps its legal standing and then a company that wants to go public merges with the bankrupt company. We first reported about this in June when we had Nikola founder Trevor Milton on Autoline After Hours. Since that time we’ve seen Fisker, Velodyne, bus maker Proterra and now Lordstown Motors all use reverse mergers to go public. While it may seem like these companies jumped on the bandwagon after seeing Nikola generate billions of dollars despite not selling a single vehicle, that’s actually not the case. A reverse merger can take around two years to finalize, which means those other deals were already in the works. The most recent one with Lordstown values the electric truck maker at $1.6 billion and will see it trade on the NASDAQ under the ticker symbol “RIDE.”
WOULD YOU PAY FOR PARKING WITH ELECTRICITY FROM EV?
Here’s something interesting. Nissan recently opened an exhibition space in Japan that it hopes will show how the automaker is moving people toward a better world. It features a Cafe that operates on renewable power as well as virtual experiences in a Formula E race car and the all-new Ariya EV. But what is interesting is that visitors can pay for parking with electricity if they own an electric car. So, we want to know what you think of this idea. Would you pay for parking with electricity from your EV? And while we understand there’s a lot of variables, how much battery life would you be willing to give up for a parking space? Nissan doesn’t say how much it will take for parking at its new Pavilion.
TESLA WILL MAKE “CONVENTIONAL” TRUCK IF NO ONE WANTS CYBERTRUCK
The Tesla Cybertruck made a huge splash when it debuted last year thanks to its wild styling. People seemed to love the look and the company received hundreds of thousands of $100 deposits for the truck. But those deposits are refundable and if customers don’t end up buying it and it’s not a success, Tesla has a backup plan. In an interview with Automotive News, CEO Elon Musk said it will sell a more conventional looking truck “if it turns out nobody wants to buy a weird looking truck.” He also revealed that Tesla didn’t do any market research when developing the Cybertruck, it just wanted to create something that was “awesome and looks super weird.” But we guess Tesla won’t need to come out with a “normal” looking truck and will sell plenty of Cybertrucks.
FCA DOESN’T SEE EV TRUCKS CATCHING ON ANYTIME SOON
And speaking of electric trucks, a number of automakers have revealed plans to introduce one but there’s been one notable absence, Ram, which is one of the leaders in pickup truck sales in the U.S. During an earnings call, FCA CEO Mike Manly said it’s keeping an eye on the electric truck segment but the company has a “slightly different view of timing and adoption rates, particularly in North America in terms of full electrification.” In other words, FCA doesn’t see electric trucks catching on anytime soon. And while Manly didn’t confirm an electric Ram truck, he said the company won’t sit on the sidelines if the segment takes off.
FERRARI SALES CUT IN HALF
Most automakers have taken a beating in their second quarter earnings due to the coronavirus and Ferrari is no exception. Its sales were cut in half compared to a year ago, which led to a 42% drop in revenue. And while its EBIT and net profit plunged, they remained in the black, which is a good sign for the company. But its back to full production and it says it doesn’t expect any further disruption from the pandemic.
| Ferrari Q2, 2020 Earnings | ||
|---|---|---|
| Sales | 1,389 | -48% |
| Revenue | €571 M | -42% |
| EBIT | €23 M | -90% |
| Net Profit | €9 M | -95% |
NEXT-GEN WRANGLER & GLADIATOR WON’T COME UNTIL 2027
Looks like it’s going to take years before Jeep can react to the Ford Bronco coming into the market. Autoforecast Solutions reports that the next generation Jeep Wrangler and Gladiator will not come out until late 2027. Obviously Jeep will do refreshes and upgrades between now and then, and can adjust pricing. Who knows? If the Bronco proves to be really successful, maybe Jeep will pull its plans forward. But for now it will not have a clean sheet design for most of this decade. Meanwhile, Ford will put on the pressure by coming out with an all new Bronco Sport in late 2026.
Be sure to catch this week’s Autoline After Hours when our guest will be Mark Del Rosso, the CEO for Genesis in North America. Hyundai botched the launch of Genesis and it’s Del Rosso’s job to get it straightened out. He has a ton of automotive experience having worked at Toyota, at Bentley and at Audi. So we invite you to join us, to learn how he is going to rebuild Genesis in the American market.
But that wraps up today’s show, thanks for watching and we’ll see you 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.
