Forgotten jets, looming Brexit, and Tesla might be onto something with this whole “building cars” thing.
1st Gear: Bloomberg Is Tracking Model 3 Production and Thinks It’s Ahead
This is an odd one, as one of Tesla’s weak points as a car manufacturer is, well, manufacturing cars. The Model 3 notoriously went through “production hell,” and that’s what Tesla itself was calling it.
(The other problem is getting caught up in random bullshit like when Musk starts calling people pedophiles, but that’s something for another day.)
In any case, this week Tesla will be announcing how many cars it has built this quarter, but Bloomberg thinks it has the story early thanks to a fancy tracker. The results of which indicated the 3 is getting made faster than expected, as Bloomberg itself reports:
An experimental tool built by Bloomberg to track the rollout of Tesla’s Model 3 electric car suggests next week’s production total could approach 80,000 cars, far higher than the average analyst estimate of 64,400, according to research firm Visible Alpha. The gap between Bloomberg’s projection and the Wall Street consensus is more than $800 [$AU1,130] million worth of Model 3 cars.
Bloomberg goes on to point out that “Being so far out of step with market expectations is an uncomfortable place to be for an experimental model,” and elaborates that more cars than people expected might not be great:
Analysts believe the international rollout over the last few months will end up suppressing delivery numbers, if cars can’t be unloaded from ships and delivered to customers in time. On an earnings callin January, Musk warned that about 10,000 cars could be stuck in transit at the end of the quarter and since then things appear to have gone further awry. Ships were delayed due to a worker’s strike in Belgium, and China temporarily halted deliveries after incorrect labels were discovered on some cars.
Undelivered cars don’t pay the bills, and Tesla’s finances remain under stress.
This all seems like, somehow, a very Tesla problem to have.
2nd Gear: LOL
GM’s recent plant closures made the news not just for being an extremely raw deal for American workers, but for maybe breaking GM’s union deal.
You see, GM claimed it “unallocated” these plants, specifically not using language like “closure” as that would have clearly been in violation of what it had agreed on with the UAW.
GM thought it was smart. The UAW took GM to court.
Now, GM has asked a federal judge to simply dismiss the case, as the Associated Press reports:
Attorneys for General Motors have asked a federal judge to dismiss a lawsuit claiming the automaker sidestepped an agreement with union workers through its plans to idle three plants, including one in Ohio.
The Warren Tribune Chronicle reports GM’s motion argues the United Auto Workers didn’t exhaust grievance arbitration procedures contained in the contract. The motion says the contract bars the union from going to court over a contractual dispute while grievances remain open.
Good luck with that, GM.
3rd Gear: NHTSA Investigating Three Million Hyundai/Kias for Bursting into Flames
This is a rough one, involving at least one death. NHTSA is opening up two investigations, one on Hyundai and one on Kia for cars catching on fire.
Worryingly, these are cases of fire breaking out when cars have not been involved in a crash, as the AP reports:
The U.S. government’s highway safety agency has decided to open two new investigations into fires involving Hyundai and Kia vehicles after getting complaints of more than 3,100 fires and 103 injuries.
[…]
The investigations, one for Hyundai and the other for Kia, cover non-crash fires in almost 3 million vehicles from the affiliated Korean automakers. The probes cover the 2011 through 2014 Hyundai Sonata and Santa Fe, the 2011 through 2014 Kia Optima and Sorento, and the 2010 through 2015 Kia Soul. The complaints came from consumers and from data provided by both automakers.
Hyundai and Kia recently recalled 200,000 of these cars for catching fire, so we’ll see how this goes.
4th Gear: Ford Cut 5,000 Jobs in Germany. Now Britain Is Waiting for an Answer
Ford’s expecting things to get bad in Europe, and recently cut 5,000 jobs in Germany in anticipation. But Germany is only one of two main hubs for Ford in Europe.
The other is the UK, and it is waiting for the other shoe to drop, as Reuters reports:
While the company has announced 5,000 job cuts in Germany, its second-biggest European market, it has yet to make major decisions in Britain, which is its biggest.
[…]
[Ford Europe chairman Steven] Armstrong said Ford has hedged against the possibility of a sharp fall in the value of the pound through the end of 2019, while stockpiling inventory would help bridge a one or two month period of potential chaos around Brexit.
“But it’s impossible really to mitigate the financial impact in the longer term of no-deal,” he said. Ford could try to pass on higher tariff costs, but that would be difficult in Britain, where a recession would mean falling sales, he added.
“We haven’t really factored in completely the negative shock. There are a number of things that we would try to do but the reality is … it would impact the whole of industry, not just Ford,” Armstrong said.
Basically, we know things will get bad, we just don’t know by how much. Very relaxing. Love how all this is going down.
5th Gear: Renault-Nissan Just Found Three Private Jets It Didn’t Know About
The Ghosn investigation has turned up a lot over the past few months, and it may have its largest new reveal today, at least in terms of physical size. Renault thought it had one private jet. It found out during its investigation of Carlos Ghosn that it actually has four, as the Financial Times reports:
The Renault-Nissan alliance had four private jets at its disposal, French investigators have found — three more than previously known.
Carlos Ghosn, the former chief executive of Renault and former chairman of Nissan, was known for a relentless travel schedule, often using a corporate jet that bore the registration number N155AN.
“It is not uncommon for me to leave Tokyo on a Friday night, attend meetings in another country over the weekend, then fly to Paris for a full week of work,” he said in a 2017 profile on Nissan’s website. “It helps that I can sleep well on an aeroplane.”
[…]
People close to Mr Ghosn’s family said: “This is another baseless attack from executives who knew all along that Nissan owned four planes and [who] flew on them personally”.
I know it’s too early to call, but I feel like you have to side with Ghosn’s family on this one. What kind of executive are you if you only have one private jet? C’mon.