Ford Isn't Done With Layoffs
Good morning! It’s Friday, June 23, 2023, and this is The Morning Shift, a daily roundup of automotive news both big and small.
What Exactly Is Going On at Tesla Right Now?
1st Gear: Ford
Ford has been through round after round of layoffs in the past year or so, intended, ostensibly, to better position the automaker for our electric future and also to cut costs to improve profit margins. Or perhaps they are merely regular exercises in cutting Ford’s lowest-performing employees, who can really say, such is capitalism. In one day, out the next.
According to The Wall Street Journal, there is a new round of layoffs expected in the next several weeks. The WSJ says that the layoffs will be “mostly” salaried workers in the U.S. A Ford spokesman did not deny to the WSJ that layoffs would be coming, which means that they definitely will be.
The number of people Ford plans to lay off in this latest round couldn’t be learned. The cuts are expected to affect employees on Ford’s gas-engine side of the business, as well as its electric-vehicle and software division, [people familiar with the matter] said.
A Ford spokesman said the company has nothing to announce.
“As we have said, part of the ongoing management of our business includes aligning our global staffing to meet future business plans, as well as staying cost competitive as our industry evolves,” he added, in a statement.
Ford does seem to have a cost problem — in a bit of a humblebrag, Ford CEO Jim Farley has said previously the company’s products are just that good and that’s why they haven’t had to think about Ford’s dysfunctionality — but this still sucks for anyone on the receiving end.
Wasn’t Ford Executive Chair Bill Ford just saying the other day how Ford is a “family company, despite what anybody says”? Ah, yes, he was. Well, Ford is a family company till you’re no longer part of the family anymore.
2nd Gear: Audi Has A Plan For Revival
The plan involves electric cars and RS cars, a lot of them for China. Audi — and parent company Volkswagen — has had various software issues with their cars in recent times, which hasn’t helped. Audi is also stuck in a malaise, and has been for some time, as the other German automakers always seem to shine a little brighter. Is Audi the Buick of German luxury marques? No one would ever say that, that would be a terrible insult.
Volkwagen Group CEO Oliver Blume has a plan to fix things, at any rate, according to Automotive News.
Audi’s revival of Audi will focus on the faster development of electric cars, Blume said. He highlighted the brand’s sports-oriented models as offering big potential in this area.
“The growing RS franchise is a highly attractive business, both from a customer as well as from a financial viewpoint,” Blume said. “Therefore, we are already planning a high-performance BEV lineup.”
Audi has “huge opportunities” with the upcoming product product launches, beginning next year, Blume said.
In 2024, Audi will launch the Q6 E-tron, the brand’s first vehicle on Volkswagen Group’s PPE (premium platform electric) architecture. The full-electric crossover will have VW Group’s much-delayed 1.2 software.
The Porsche e-Macan, also on this platform, will arrive at the same time.
The PPE platform will allow faster charging times averaging just 21 minutes to go from 10 percent to 80 percent of battery capacity, VW Group says. It will also offer semi-autonomous driving features from Mobileye’s SuperVision system.
Auto News says that Blume did not even deign to say the forbidden word, Artemis, which was a plan for EV relevance discussed under a prior administration. So much for landjets.
3rd Gear: CarMax Made Some Money
CarMax, which primarily buys and sells used cars, reported quarterly earnings on Friday that exceeded the estimates of Wall Street analysts, which isn’t very important. These things are still tracked, however, as a broad measure of how the used car market is “doing,” which is not actionable information for consumers but does provide some fodder for armchair economists (there are no other kinds of economists) who try to predict where things might be headed.
And, anyway, on Friday CarMax said it was doing better not because the market is doing better but because of their own cost-cutting measures.
From Reuters:
Shares of the company jumped 6.8% before the bell, as it also reported a better-than-expected first-quarter revenue.
Although used-car prices have cooled of late, retailers have been hit hard as inflationary pressures and improving new vehicle supply have put off consumers from purchases of pre-owned automobiles.
The industry has also been struggling to offload cars that were purchased at higher prices, forcing companies such as CarMax and Carvana (CVNA.N) to take a profit hit by offering them at lower prices, as well as paring back costs.
In December last year, CarMax said it was pausing some hiring, halting share buybacks and cutting expenses as it battled a “used-vehicle recession.”
“Our deliberate actions are driving improved trends in the business, despite the challenging macro environment,” CEO Bill Nash said in a statement on Friday.
The used car market: as inscrutable as ever, unless you’re an insurance adjuster for whom car values get very precise.
4th Gear: The UAW’s General Counsel Is Out
The UAW, which represents hundreds of thousands of workers, most at the Big Three American automakers, elected a new president earlier this year, and he came in with some fighting words. Shawn Fain also mentioned the word “purge” with regard to some of the UAW’s staff, a highly concerning word if you are member of the UAW’s staff.
This is the context for the news Thursday night that Abigail Carter, who is the UAW’s top lawyer, has been ousted. The Detroit Free Press reports:
Two sources with knowledge of the situation who agreed to speak about it on condition of anonymity confirmed that Abigail Carter, who had been the union’s general counsel, as of Wednesday was no longer with the union.
The reason for the departure was not made clear to the Free Press.
Carter could not be reached for comment.
The United Auto Workers union declined to comment Thursday on the situation or clarify who is leading the union’s legal department or who would replace Carter.
Carter appears to keep a pretty low profile, though the timing is such that the UAW is gearing up for contract renegotiations later this year with the Big Three, in what will either be an impressive showdown, a relatively routine continuation, or, most likely, a skirmish involving a strike or two where both sides get bloodied, like last time. Someone other than Carter will be the top lawyer for it, a good thing to have when negotiating a contract.
5th Gear: Bahrain Bought Into McLaren
Bahrain’s state investment fund is called Mumtalakat, and it owns a majority of the McLaren Group, which makes cars and also has a racing team that you may have heard of. Mumtalakat said Thursday that it was slightly rejiggering its investment in McLaren.
From Reuters:
Bahrain’s sovereign wealth fund bought shares and warrants worth 400 million pounds ($510 million) in McLaren from Saudi Arabia’s Public Investment Fund (PIF) and Ares Management (ARES.N), Sky News reported.
The proposed restructuring, which is subject to ongoing shareholder discussions, aims to achieve the group’s long-term objectives, Mumtalakat said in a statement.
Mumtalakat views the restructuring “as the optimal governance structure to deliver McLaren’s Future of Performance strategy,” it said.
The transaction will not lead to any new money being injected into McLaren, the Sky News report said.
Reuters also says that McLaren wants to go public at some point in the next few years, probably when the global market for supercar companies is in better shape, which is basically never.
Reverse: Happy Birthday Michèle Mouton
She finished second in the World Rally Championship in 1982 driving some car called an Audi Quattro. She loved the noise.
Michelle Mouton Audi Quattro Noise
Neutral: I Fear I May Be Renting A Tesla In The Near Future
My mom is turning 80 in August, which necessitates a trip to Ohio for a big party, which is very exciting for everyone involved. The flight is booked and I have a place to crash. I was going to force my dad to taxi me around because he’s retired and got nothing better to do, but then I looked into renting a car, which was less expensive than I was expecting. Hertz will even rent me a Tesla at Cleveland Hopkins International Airport for not much more than a Chevy Spark or whatever, and because I’m a masochist and enjoy participating in dumb experiments, I’m considering it. Indulge me and guess how many public Tesla Supercharger locations there are in Northeastern Ohio. If your guess was a single digit you are close to being right.
