Photo Credit: AP
Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know. The ones you don’t want to not know. The ones that are ideal for you to be cognizant of, in detail, this morning. The news, auto news, that is.
1st Gear: Not Mexico? Fine, China
One of the biggest controversies in the car world last year was when President Donald Trump bellowed at Ford for planning to build small cars in Mexico. Ford cowered to Trump’s bullshit about ‘saving’ American manufacturing (Ford wasn’t going to replace any jobs here in the US in the plan) and nixed their Mexico factory under construction. The drama basically cost Ford’s CEO Mark Fields his job. Now there’s a new guy at the head of Ford and, oh, wow (from Bloomberg):
Ford Motor Co. is canceling controversial plans to build the Focus small car in Mexico, saving $1 billion by ending North American production entirely and importing the model mostly from China after next year.
The automaker will start making the next-generation Focus in China from the second half of 2019, a year after output ends at one of its plants in Michigan. Ford’s savings will come from canceling plans to assemble the car at an existing factory in Mexico and a decision made in January to abort construction of a plant in Mexico.?
So, uh, if Ford won’t be making cars in neighboring Mexico, it’ll make them in even cheaper China. The countdown to a Trump Twitter storm begins now.
Anyways, America cucked again, etc. etc..
2nd Gear: Tesla May Finally Properly Break Into The World’s Largest Car Market
Every time I talk with somebody about some startup electric carmaker with ties to China, I hear “so-and-so could take over EVs in China. Tesla doesn’t have China.” Part of the problem is that Tesla doesn’t build cars in China, doesn’t have a factory in China, doesn’t even have a joint venture to locally produce cars in China. That may be changing soon, as Bloomberg reports:
Tesla Inc. is close to an agreement to produce vehicles in China for the first time, giving the electric-car maker better access to the world’s largest auto market, according to people familiar with the matter.
The agreement with the city of Shanghai would allow Tesla to build facilities in its Lingang development zone and could come as soon as this week, said the people, who asked not to be identified because the negotiations are private. Details are being finalized and the timing of the announcement could change. Tesla would need to set up a joint venture with at least one local partner under existing rules and it isn’t immediately clear who that would be.
[...]
Setting up local production is key for Chief Executive Officer Elon Musk to continue growing in China, where Tesla’s revenue tripled to more than $1 billion last year. Assembling vehicles locally would allow the company to avoid a 25 percent tax that renders Model S sedans and Model X sport utility vehicles more expensive than in the U.S.?
Tesla did not respond when Bloomberg reached out for comment.
3rd Gear: China Stands In Defiance Of The Haters And Keeps Up Its EV Quotas
China is interesting in the car world as it’s a huge market and it has very strong government support of electric vehicles. Quite strong. Super strong. Effective and strong. Big incentives to buyers, harsh quotas for carmakers. How do carmakers like these quotas? Not so much, as Reuters reports:
China has been pushing to get more electric vehicles on its roads as soon as possible to fight urban air pollution. But automakers and industry groups have said the targets are too tough, while German policymakers say they fear Beijing wants to help domestic carmakers overtake global rivals in developing electric vehicles.
The quotas would be in addition to stricter fuel economy requirements that are set to become among the world’s toughest by 2020.
The quota proposals had met with requests by carmakers such as Volkswagen AG to be given more time to meet them. However, VW has said it is prepared to comply with the 2018 quota if the government insists.?
Is China slowing down with these quotas? Nope! Reuters further reports that China met with Germany and Europe to go over the quotas, and issued a new draft virtually unchanged from before:
“That’s what it looks like: no compromise, no concession,” [Dominik Declercq, China representative for the European Automobile Manufacturers Association] told Reuters.?
Somebody’s gotta stay strong on this stuff.
4th Gear: VW Strike In Bratislava
Volkswagen was one of the first to step over the rubble of the fallen Iron Curtain and took over Bratislavské Automobilové Závody in then-Czechoslovakia all the way back in 1991. It made communist-era Škodas back then, and now it puts the finishing touches on some of Volkswagen’s top vehicles. It’s in Bratislava where they finish not only the little VW Up!, but also VW’s full-size SUVs: the Porsche Cayenne, the Bentley Bentayga, the Audi Q7 and the VW Touareg. Anyway, the workers at this plant argue that they’re not getting paid enough for their very important-to-the-company work. That didn’t go over great with VW, as Automobilwoche says (through Google Translate):
At Volkswagen, the first strike of the 25-year company history in Slovakia started on Tuesday. Prior to this, the company’s management rejected the union’s demand for a pay increase of 16 percent as unrealistic.
With an average gross wage of 1800 euros per month, the pay at VW is twice as high as the countrywide average income, according to the company management. Volkswagen has about 12,000 employees in Slovakia.?
The workers rejected an offer of a 4.5 percent raise this year and a 4.2 percent raise next year, as The Slovak Spectator reports. VW’s workers in Bratislava say that though their pay is higher than their national average, it’s way down from what VW pays its workers in other countries.
5th Gear: BMW’s New Partner Wants To Sell Self-Driving Car Platform To Other Companies
Tesla’s old partner in autonomy, MobilEye, has been linked up with BMW for some time now, along with Intel. Now big time automotive industry supplier Continental is joining that partnership, as Reuters notes:
Continental said on Tuesday it would join a self-driving platform developed by BMW Group, Intel and Mobileye with the German supplier handling integration of components and software.
The costs to integrate hardware, software and data and the accelerating pace of development of self-driving vehicles has sparked a growing number of alliances between automakers and suppliers.
Continental said in a statement that it would play a key role in commercializing the new platform, which is to be sold to other auto manufacturers.
“We can meet the steep demands in autonomous driving through an industry-wide collaboration more comprehensively, rapidly and at lower costs than by going alone,” CEO Elmar Degenhart said.?
It’s easy to forget that BMW is one of the last independent carmakers on the global stage, and it’s smaller than we usually give it credit for.
