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Runtime: 11:10
0:00 Canada vs. U.S. Traffic Fatality Rates
1:08 Ford Posts $36 Million Q2 Loss
1:52 Ford Cuts EV Programs to Feed ICE
3:04 Could U.S. Tariffs Be Illegal?
3:59 Tariffs Hit Denso Profits
4:27 ZF to Accelerate Restructuring
6:12 Renault Makes Head of Purchasing the CEO
7:40 Honda Prelude Sneak Peek
8:38 IVECO Sells Truck Business to Tata
9:32 Mercedes Seizes 1.5 Million in Fake Parts
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CANADA VS. U.S. TRAFFIC FATALITY RATES
Are Canadian drivers better than Americans? Up until 2014 both countries had similar traffic fatality rates. But from 2011 to 2021, fatalities in the U.S. increased 33% to more than 43,000, while in Canada they fell 18%. Traffic deaths involving pedestrians and cyclists and fatalities involving large trucks and young drivers all increased in the U.S. while they declined in Canada. Even more telling is that Canada is experiencing greater population growth, a growing number of licensed drivers and more miles driven than the U.S. The Insurance Institute for Highway Safety or IIHS says the difference is due to stronger distracted driving and seat belt laws and more widespread use of speed cameras in Canada. That’s why it’s calling on lawmakers in the U.S. to adopt similar policies.
FORD POSTS $36 MILLION Q2 LOSS
Ford posted a net loss of $36 million in the second quarter. That’s not much of a loss, but a year ago it made a $1.8 billion profit, so it’s quite a swing and tariffs played a big role in the change. The company sold 1.1 million vehicles in the last three months, up nealy 4%. Revenue hit $50 billion, up almost 5%. But costs on the car making side of the business went up dramatically, by $3.7 billion, and so the company’s operating profit dropped 73% to only $511 million. And as noted, it posted a net loss of $36 million.
| Ford Q2, 2025 Results | ||
|---|---|---|
| Sales | 1.18 Million | +3.7% |
| Revenue | $50.2 Billion | +4.9% |
| Operating Profit | $511 Million | -72.8% |
| Net Income | -$36 Million | -$1.7 Billion |
FORD CUTS EV PROGRAMS TO FEED ICE
Here are several key takeaways from Ford’s earning call:
– It’s reallocating resources from future EV programs to commercial truck programs for Ford Pro and will come out with more EREV and PHEV retail trucks.
– It’s going to save $1.5 billion for not having to pay for CO2 credits in the U.S. and will save several billion more over the next two years. This will especially help the ICE side of the business, Ford Blue, which was hit with those charges.
– It will richen its mix with more ICE commercial trucks and full size SUVs that it describes as a multi-billion dollar opportunity.
– Its EV operations, Ford Model E, doubled its revenue to $2.4 billion and improved its margins by 44 basis points, largely thanks to launching the electric versions of the Explorer and Puma in Europe.
– And over the air updates are cutting repair costs by 95%. But one-third of all of Ford’s warranty costs are still software related problems.
COULD TRUMP TARIFFS BE ILLEGAL?
So far this quarter, every single automaker that we’ve reported on posted significantly lower profits. And they all pretty much blame the tariffs. But what if it turns out that the tariffs aren’t legal? Congress is supposed to have the only power for taxation and tariffs. What if the way that President Trump went about enacting them is unconstitutional? Those tariffs could get thrown out. Two federal courts have already ruled that Trump cannot not use the International Emergency Economic Powers Act to impose new tariffs. The Trump Administration is appealing those decisions and we’ll get a ruling from the U.S. Court of Appeals, probably in a couple of months. But this case is likely to end up with the Supreme Court and it could set a historic precedent about the limits or freedom of power of the Executive Branch versus Congress.
TARIFFS HIT DENSO PROFITS
And those tariffs took a bite out of Toyota supplier Denso’s profits. The company reported that its operating profit declined 11% to $720 million in the most recent quarter. A stronger yen also played a role in the decline. Denso’s chief financial officer says it will offset the losses with price hikes and will lower the impact of tariffs by increasing U.S. manufacturing.
ZF TO ACCELERATE RESTRUCTURING
And Denso isn’t the only supplier that’s struggling. German supplier ZF says it needs to accelerate its restructuring which could involve even more layoffs. The company says it needs to cut costs further because of a slowdown in global vehicle production, the slower than expected transition to electrification and U.S. tariffs. ZF has laid off 11,200 full-time employees since the beginning of 2024 and another 4,700 employees have agreed to partial or early retirement packages.
RENAULT MAKES HEAD OF PURCHASING THE CEO
Renault looked from within to hire its new CEO. Former CEO Luca de Meo kind of quit out of nowhere in the middle of June, so it’s taken the company about a month and a half to announce Francois Provost as his replacement. Provost has been with Renault for 23 years and most recently held the title of Chief Procurement, Partnerships and Public Affairs Officer. As Chief Procurement Officer, or head of purchasing, you have to deal with pretty much every part of the company, so he should have a deep knowledge of how Renault works. Provost says he has already helped launch a set of countermeasures to deliver on the company’s targets and he will now be part of finalizing a new strategic plan. In the first half of the year the Renault Group sold about 1.17 million vehicles, up just over 1%. That helped push revenue up 2.5% to about 27.6 billion euros. However, mainly due to a change in the way it reports its stake in Nissan, its operating income dropped by over 10 billion euros and its net income fell by over 12.5 billion euros. But going forward, if there’s any change in the value of its stake in Nissan based on the performance of Nissan’s stock that will no longer be reflected in Renault’s net income.
HONDA PRELUDE SNEAK PEEK
Honda opened a new website dedicated to the Prelude that shows a few details I haven’t seen before. There’s a full view of the production car’s rear end, which is available both with and without a spoiler on the decklid. The interior is also on full display. It’s offered in either a two-tone blue and white combination or all black accented with blue stitching. Those are the main things we wanted to highlight, but it’s possible there’s even more we’re missing because the entire website is in Japanese. And there’s interviews with designers, engineers and F1 driver Yuki Ysunoda gets behind the wheel. But even still, there are some cool pictures to check out, including some behind-the-scenes stuff, and watching Tsunoda whip the car around on a race track. The new Prelude will first start going on sale this September.
IVECO SELLS TRUCK BUSINESS TO TATA
Last week we reported that India’s Tata Motors is interested in buying Iveco, the largest truckmaker in Europe. And now it’s official. Iveco has agreed to sell its truck business to Tata for €3.8 billion or $4.3 billion. As part of the deal, the holding company Exor, which is controlled by the Agnelli family, will sell its 27% stake in Iveco to Tata. Tata plans to buy the remaining shares and delist the truckmaker. And in a separate deal, Iveco agreed to sell its defense business to Italian defense firm Leonardo for €1.7 billion or $1.9 billion. But the deal for Tata will give it an even larger presence in Europe, where it already owns Jaguar Land Rover.
MERCEDES SNAGS 1.5 MILLION FAKE PARTS
Last year Mercedes-Benz helped law enforcement conduct nearly 800 raids, securing over 1.5 million fake Mercedes parts. As you might expect, that includes things like the Mercedes logo, but there’s also counterfeit wheels, lights and even brake pads, which the company says can pose a safety risk to customers. The internet is also a popular place to find fake parts, so it’s no surprise that the over 200,000 counterfeit product listings removed from social media and websites was nearly a 50% increase over 2023.
S&P GLOBAL’S ROBINET ON AAH
Be sure to tune in this afternoon for Autoline After Hours. We’ll have Michael Robinet from S&P Global as well as Keith Naughton from Bloomberg going through the latest news and developments. So join John and Gary when the show goes live at 3 pm eastern time today.
But that’s a wrap for this show. Thanks for tuning in.
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Honda’s interiors were great in the early 90s, at least in my Accord LX, and ok in my 1991 Civic. But look at this Prelude. They are disgusting. The seats look like 2X4s painted black, and about as comfortable or supportive. There is a sea of black hard plastics (and some white ones, big deal). Fools who buy this will pay more than $35k for it. Will they not mind? And the prelude was always regarded as a chick car, a pretend sporty one. A colleague’s wife had one (before she became a Ford engineer and had to drive Ford losers around) and she managed to get a ton of speeding tickets from its anemic engine.
I am in favour of speed cameras. In most cases they are in fixed locations which are shared and easily found. But the main reason is that they are convenient. Being pulled over by the police involves time and conversation. A ticket is also registered to the driver, making it a license problem. With speed cameras, the car gets the ticket, you are not held up for a lecture, and no points are lost. Sure it costs money but that’s the same in either case. I believe the cops prefer to not have to do speed checks either.
Traffic regulations are very unpopular, inflammatory discussion points. You can find videos with people outraged by seatbelt, and even no drinking and driving regulations when they were first deployed. In my view these humongous vehicles we drive around in the US are a huge safety hazard. If you look at this from an engineering perspective, vehicle speed limit should be dictated by vehicle maximum momentum (mass x velocity). That would limit top speed of large trucks, SUVs and EVs to a lower number vs lightweight alternatives. As an example, heavy duty trucks should not drive faster than say, 65, a half ton truck say, 70, passenger sedans 75 or 80. This would bring so many benefits to everyone, yet impossible to deploy in this country. In a near future I hope this will be a moot point if indeed we have the vehicles driving while the passengers stay legally distracted.
I like red light cameras. There used to be one at an intersection in where I sometimes cross on foot, and having the camera substantially reduced the number of people running red lights. The cameras have been gone for years, as a result of some legal issues, or maybe the legislature banned them.
It looks like the Prelude’s powertrain will be borrowed from the Accord or Civic hybrid. It will get good gas mileage, but will not be “sporty,” power-wise, though the handling may be good. C and D thinks the suspension will be borrowed from a sportier version of the Civic.
A lot of the revenue from CA red light camers went to a private company, not te State or Local Govt, so the cameras were removed. Also the time the violation came in the mail was not prompt.
The red light camera I mentioned earlier was in FL, also owned by a private company.
If the US wants the world to believe that it is a trustworthy country that will operate under rules and regulations, the tariffs need to go. If the US wants a new treaty, it needs to be negotiated properly, and put into law the right way. Otherwise, it won’t be worth the paper it’s written on. (There’s a reason that trade deals between non-US countries are happening so fast)
Bottom line. Trumpy wants to be King. Everybody knew this, as the only world leaders he speaks well of, are dictators. That is what he is trying to make himself into, in the US.
But he’s surrounded himself with people who’s only skillset is kissing up. Every secretary and director of any federally controlled department not only has that skill, but is also willfully running their department into the ground. And that’s on top of the blatant racism and corruption that runs from the top to the bottom of the administration.
And FWIW, I don’t believe the stories that the US economy is ‘doing well’, despite everything that is going on. From my view, those reports are nothing more than other sycophants trying to kiss up to Trumpy, and tell him ‘what a good boy’ he is. Pathetic.
It will be interesting to see how the coming civil war plays out. That is paraphrased from the curse: “May you live in interesting times”
miradart, exactly
Oh Miradart, now you’ve gone and done it. Hoping you can elude ReguLarry’s condemnation.
In 2021, NHTSA published that unlicensed drivers were responsible for 18.4% of fatal motor vehicle accidents. Given that the number of licensed drivers far exceeds those not licensed, it follows that those without a license were responsible for an outsized number of fatalities. It might be informative to examine the trends of that mix over the same period that your charts in the video cover.
We’ve seen the financial reports for Denso and ZF, but what’s going on with BorgWarner? They went all in a couple of years ago for EV components, and started shedding units that made components for ICE vehicles.
Now, with EV sales slowing down and ICE growing again, what is the effect on BorgWarner’s financial health?
And no, I’m not in favor of red light cameras or speed cameras. The fines are civil only, since they’re not witnessed in real time by law enforcement, so they don’t have any real teeth – it’s just an income generator, mainly for the contractors that run the cameras. Increase police enforcement, ratchet up the fines, and maybe start adding jail time, at least for repeat red light runners. Maybe five days in jail would make an impression.
I’m all for red light cameras, but the governments should own them. They’d reduce the number of people running red lights, and could lower property tax rates. Yeah, a few days in jail would get the attention of red light runners.
Penske sold 1/3 of IndyCar and IMS to Fox, according to Autoweek.
It does make sense for Ford to move resources to the money makers. The competition is not staying stagnate and Ford needs to be certain that their money making vehicles do not get stale or else they will lose the entire company. They also need to spend more on engineering to stem the flow of recalls which are draining money from Ford at an alarming rate. Their decision to get rid of their experienced people to save cost was a bad one that will haunt them for another decade. Certainly the huge expansion in recalls and failed launches began with that decision. They saved a few hundred million but it cost them a few billion. Farley forgot about the law of unintended consequences which is always at work.
For now, it looks like Ford, GM, and former Chrysler need to maximize revenue from big trucks and SUVs. Our anti-environment regime is encouraging it. At some point, though, I’d think the companies would need to become competitive in other markets, and maybe even make cars again. I hope GM’s aggressiveness into EVs will eventually pay off. The products seem decent, but Lyric has done very poorly in CR’s reliability surveys.