Good morning! It’s Monday, November 18, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Trump To Ease Self-Driving Car Rules
President-elect Donald Trump is apparently going to do “first buddy” Elon Musk a huge solid and make it a hell of a lot easier to get self-driving vehicles on the road. Members of his transition team have apparently told advisors they plan to make a federal framework for self-driving cars one of the Department of Transportation’s priorities.
If the new rules allow cars without human controls like pedals or a steering wheel, it’ll greatly benefit Musk, who is planning (emphasis on planning) to roll out a vehicle just like that in the Tesla Cybercab. From Bloomberg:
Current federal rules pose significant roadblocks for companies looking to deploy vehicles without steering wheels or foot pedals in large quantities, which Tesla plans to do. The Trump team is looking for policy leaders for the department to develop a framework to regulate self-driving vehicles, according to people familiar with the matter, who asked not to be named because they weren’t authorized to speak publicly.
While the Transportation Department can issue rules through the National Highway Traffic Safety Administration that would make it easier to deploy autonomous vehicles, an act of Congress would clear the way for mass adoption of self-driving cars. A bipartisan legislative measure being discussed in early stages would create federal rules around AVs, two of the people said.
One candidate under consideration for Transportation secretary is Emil Michael, a former Uber executive who has spoken with Trump’s team and potential staffers, they said. The work is in its early stages and policy details have yet to be determined, they said.
Republican Representatives Sam Graves of Missouri and Garret Graves of Louisiana have also been considered to lead the department, the people said.
Back in October, which feels so very long ago now, Musk announced plans to build thousands of driverless Tesla Cybercabs without driver controls starting in 2026. Right now, U.S. regulations don’t really allow such cars to be on the road. It poses a massive hurdle to Musk’s plans.
The CEO called for a federal approval process for autonomous vehicles during Tesla’s third-quarter earnings call, saying he’d use any role with the government to push for one.
Trump has since named Musk and entrepreneur Vivek Ramaswamy to lead a new Department of Government Efficiency to “dismantle government bureaucracy” and slash spending and regulations deemed overly burdensome.
Past efforts to come up with federal legislation to regulate autonomous vehicles have stumbled.
NHTSA currently permits manufacturers to deploy 2,500 self-driving vehicles per year under a granted exemption, but legislative efforts to increase that number to as many as 100,000 have repeatedly failed.
A bill to do that sailed through the House several years ago during Trump’s first term, but the measure has been bogged down in the Senate. An attempt during the first year of the Biden administration to merge the bill with other legislation faltered when some manufacturers tried to include language that would prevent consumers from suing or forming class-action cases.
Aside from all the racist, homophobic and transphobic stuff Trump and Musk agree on, it’s starting to become more and more clear why Elon has hitched his wagon so firmly to Trump. He think Trump can make him a lot of money.
2nd Gear: GM Cuts 1,000 Jobs To Save Money
General Motors laid off about 1,000 employees at the end of last week in an effort to cut costs and shift priorities as it deals with changing market conditions.
The layoffs weren’t concentrated in any one area. Instead, they came from across the automaker’s vast empire. Some were apparently because of poor performance, while others just happened to be part of a review to reorganized priorities within the company. From CNBC:
A majority of the employees impacted were salaried workers in suburban Detroit at the automaker’s global technical center in Warren, Michigan, the person said. The United Auto Workers said about 50 union members were included in the layoffs.
The company is targeting $2 billion in fixed cost reductions this year as it deals with slowing U.S. sales, business deterioration in China and a shift in its “all-in” strategy for electric vehicles amid slower-than-expected consumer adoption.
A spokesman for GM confirmed the layoffs but declined to disclose the total amount.
“In order to win in this competitive market, we need to optimize for speed and excellence,” GM spokesperson Kevin Kelly said in an emailed statement. “This includes operating with efficiency, ensuring we have the right team structure, and focusing on our top priorities as a business. As part of this continuous effort, we’ve made a small number of team reductions. We are grateful to those who helped establish a strong foundation that positions GM to lead in the industry moving forward.”
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Friday’s layoffs follow more than 1,000 salaried employees working in GM’s software and services organization being let go in August.
GM’s global salaried workforce was 76,000 as of the end of last year. That included about 53,000 U.S. salaried employees.
The United Auto Workers union was quick to condemn the cuts made by GM. UAW Vice President Mike Booth, who oversees General Motors for the union told CNBC, “GM is trying to cut around 50 UAW jobs, when they’re making record profits. We will fight for our laid off members with the full force of our contract.”
3rd Gear: Trump’s Tariffs Could Increase Costs For You
I hate to be the bearer of bad news, but President-elect Donald Trump’s proposed tariffs are going to raise costs for automaker, supplier and you. At the same time, it’s going to drastically change the global supply chain, and it’s going to do so in a not good way.
To be fair, we can’t be certain that these tariffs will ever actually come to fruition. His plans have a habit of doing that, but regardless, automakers are preparing for what could happen. From Automotive News:
Trump, a self-proclaimed “Tariff Man,” said during the campaign that he would impose tariffs of 200 percent or more on vehicle imports from Mexico, and has suggested placing increased duties on vehicles from Europe and Asia. He’s also pledged to use tariffs to prevent imports of vehicles and parts from China.
Such moves could have massive implications for the automotive supply chain. They could accelerate nearshoring and localization underway since the pandemic, which exposed risks and bottlenecks in the global supply chain.
But they could also make vehicles and parts more expensive for companies and consumers, analysts warned.
Tariffs would increase the price of imported automotive components and assembled vehicles. Companies would either absorb the expense, pass it on to consumers, or some combination of both. It would most likely create rising prices and squeeze profit margins at a time of concern over vehicle affordability.
“Any change to the current sourcing model will likely translate to higher costs,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
Trump’s goal is to boost American manufacturing, and his tariffs could aggressively target Chinese vehicles, parts and technology to achieve that.
Here’s how Trump’s theoretical tariffs could effect supply chains and vehicle production in Mexico, somewhere U.S.-based automakers (and just about everyone else) build a hell of a lot of vehicles:
Through September of this year, General Motors used Mexican plants for about 36 percent of its full-size pickup production. That production was 35 percent for Stellantis, according to financial services firm Morningstar. While Ford makes its F-Series pickups in the U.S., its compact Maverick pickup is assembled in Mexico.
About 30 percent of GM’s 2024 North American light-vehicle production also comes from Mexico, Morningstar said. About 24 percent of Stellantis’ regional production is in Mexico. Ford is at 15 percent.
“We think a large-scale tariff on any imported vehicle regardless of production origin would cost each firm billions in profit, be painful to middle-class workers at the automakers, and cause more vehicle-affordability problems for all American consumers,” Morningstar analysts wrote in a Nov. 6 note.
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“We think the Trump administration needs to be very careful with how it pursues its agenda to promote American manufacturing so that it doesn’t hurt American manufacturing and American consumers in the process,” the analysts wrote.
Yet some automaker and supplier executives signaled confidence they will be able to navigate trade uncertainty during the second Trump administration.
“We fundamentally approach setting up our supply chain in a way that allows us to buy where we build and build where we sell,” Tanya Skilton, GM’s executive director of strategy, innovation and customer care, said at the MEMA show.
Toyota is “much better prepared” to address trade risks than it was when Trump was elected in 2016, Grimm said.
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Regardless of their outlooks, virtually all automakers and suppliers are reviewing their sourcing strategies, Fiorani said. Many are looking to localize and simplify their supply chains while reducing the amount of times parts move over the border in order to reduce tariff burdens, he said.
“With the potential of tariffs being applied as they cross the border, in some cases multiple times, costs and profits will be affected,” Fiorani said.
Much remains uncertain, but one thing isn’t: Automakers and suppliers will need to be ready for four years of turbulence in U.S. trade policy.
Head over to Auto News for a closer look at how Trump’s proposed tariffs could impact the U.S.’s dealings with China, as well as how it could muck up the United States-Mexico-Canada free-trade pact. It won’t be good.
4th Gear: 112,000 Ford SUVs Probed For Seat Belt Issue
The National Highway Traffic Safety Administration has initiated a recall inquiry into 112,567 Ford SUVs because of an issue with their seat belt retractors. The auto safety regulator says it has received three complains that allege an inadvertent deployment of the seat belt retraction pretensioner. From Reuters:
The complaints referred to a loud sound, which was immediately followed by the seat belt rapidly tightening and remaining in the locked position, the auto safety regulator added.
The company said it was working with the NHTSA to support its investigation, which covers Ford Expedition and its luxury counterpart, the Lincoln Navigator, from model years 2019-2020.
The NHTSA said it has also opened another probe into Ford covering 456,565 vehicles over a loss of motive power and an electrical system failure.
The probe covers Ford’s Bronco Sport crossover SUVs and Maverick pickup trucks, which are based on the same platform, from model years 2021-2024.
This latest inquiry comes just a few days after Ford agreed to a $165 million civil penalty for failing to recall vehicles with defective rearview cameras in a timely fashion. I know the automaker has put a lot of emphasis on keeping recall numbers down, but it doesn’t look like that’ll happen anytime soon.