AD #3620 – Toyota Considers Corolla Pickup; UAW Demands 46% Pay Raise; Mercedes Goes With Geely Powertrain

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

UAW DEMANDS 46% PAY RAISE
Wow, the UAW’s Shawn Fain is making contract demands that GM, Ford and Stellantis have never seen before. He wants a 32-hour work week, full pensions, cost of living allowances, and a 46% pay raise over the 4 years of the next contract, just to name a few of his demands. It’s a smart negotiating strategy. He’s putting everything on the table so he has as many bargaining chips as possible. But it could also put the Detroit Three at a competitive disadvantage. Each one of the automakers spends over $6 billion a year on UAW labor. If the union got everything it wanted, it would likely push that to over $10 billion a year per company. And if they’re not cost competitive with non-union automakers, they could end up losing sales and market share that would threaten UAW jobs.

NIKOLA GETS NEW CEO
Yesterday we reported on the progress that Nikola is making. Today we learned that it’s getting a new CEO. Michael Lohscheller is stepping down as president and CEO immediately due to a family health matter and will be returning to Europe. He’ll stay on as an advisor until the end of September. Replacing him is Steve Girsky, who’s been the Chairman of Nikola’s board since 2020 and previously held a number of positions at General Motors. Before he went to GM, Girsky was one of the top auto analysts on Wall Street.

RIVIAN ADDS KRAFCIK TO ITS BOARD
And EV startup Rivian is adding a board member with tons of automotive experience. John Krafcik, who was most recently the CEO of Waymo, will take a seat in the boardroom. He was also the CEO at Hyundai Motor America and served as president of TrueCar after. Before that he worked in product development at Ford, and he was a key researcher at MIT who worked on the book The Machine That Changed the World, which triggered the move to lean production amongst manufacturers in the United States.

CHINA CAR IMPORTS DROP DRAMATICALLY
We’ve reported on how China became the biggest exporter of vehicles this year, and now car imports to China are plunging. In 2017, China imported nearly 1.3 million vehicles, last year that dropped to 880,000 units and in the first half of this year it was only 338,000, a 23% drop. Part of the reason is more automakers have moved production to China, another is that the government is really incentivizing EVs. Just about no one exports EVs to China. Over half the imports are SUVs and 90% of imports are from luxury brands, which suggests that Mercedes, BMW and Audi are losing the most.

FISKER LOSES LESS MONEY…
Fisker is walking a fine line. The EV startup cut its production forecast again for the year, this time by 12,000 units to 20,000 – 23,000 vehicles. Fisker puts the blame on a supplier that needs more time to ramp up. But it’s still going to be hard to meet its updated forecast. In the second quarter, it only made a little more than 1,000 Ocean SUVs, which brought in $825,000 in revenue. It lost almost $88 million on its operations, about the same that it lost a year ago, but that was 38% lower compared to the first quarter. Its net loss was $85 million.

…AND UNVEILS MORE NEW PRODUCTS
And yet despite its production struggles, Fisker is revealing and taking orders for new product, which is that fine line we were talking about. It finally showed a physical prototype of the Pear, which will be built on an all-new platform by Foxconn at the Lordstown plant in Ohio. Fisker has pushed back production from 2024 until the middle of 2025, but says it will still keep its sub-$30,000 price tag. However, that’s most likely with incentives. It also showed an off-road focused version of the Ocean, a small pickup truck based on the same platform as the Ocean and a sports car, called the Ronin. The truck, called the Alaska, is projected to have 230-340 miles or 370-547 kilometers of range, come out in 2025 and have a $45,000 price tag before incentives. The Ronin is a 4-door, carbon fiber hardtop convertible that could have 600 miles or 965 kilometers of range, over 1,000 horsepower and do 0-60 MPH in roughly 2 seconds. These are ambitious goals for sure, but Wall Street in general still has a positive outlook on Fisker with its shares up more than 2% in premarket trading.

TOYOTA TO MAKE ROBOTAXIS IN CHINA
Toyota wants to get into the robotaxi business in China. Back in 2019, it formed a partnership with Chinese self-driving startup Pony.ai to develop AVs. And now the two of them are expanding that partnership to mass produce and deploy robotaxis in China along with Toyota’s joint-venture partner GAC. They’ll invest $140 million into the new venture and Pony.ai’s AV technology will be integrated into vehicles based on Toyota’s EV platform. Pony.ai has already launched robotaxi services in four cities in China but no timeframe was given on when we’ll see the ones from Toyota.

MAGNA REPORTS STRONG FINANCIAL EARNINGS
More good news from the automotive supplier community. Yesterday we reported strong financial earnings from Aptiv and Borg-Warner. Today, it’s Magna’s turn. The giant Canadian supplier reported that its revenues shot up more than 17% to $10.9 billion. And that’s in US dollars. It made $483 million in operating profits versus a loss of $88 million a year ago. And it made a net profit of $321 million versus last year’s loss of $341 million. Those are significant turnarounds largely thanks to the chip shortage starting to ease up and automakers making more vehicles.

MERCEDES GOES WITH GEELY POWERTRAIN
Here’s an interesting update on the new Mercedes CLA that we showed you a teaser of the other day. Reports out of Europe say that Mercedes developed the vehicle’s plug-in hybrid powertrain and Geely will produce it in China. But Gasgoo reports that Geely was involved in the development of the car and that the PHEV is Geely’s new generation system. Hopefully, we’ll learn more when the new CLA debuts in September, but it would be a milestone and a sign of how the industry is changing, if the system is Geely’s. And one other thing to note about the CLA. It will be available with a number of powertrains, including pure battery electric.

TOYOTA CONSIDERS COROLLA PICKUP
The Ford Maverick might be getting some competition, but will it be too late? Automotive News reports that Toyota is considering making a Corolla-based pickup truck, which would be built in the U.S. And that way it wouldn’t be hit with the 25% import tariff that normally gets slapped on pickups. But a vehicle like this would be expected to hit the market until 2027.

And that brings us to the end of today’s show and this week. Thanks for tuning in and I hope you have a great weekend.