Good morning! It’s Wednesday, September 11, 2024, 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: Harris, Trump Battle Over Auto Industry
On September 10, Vice President Kamala Harris and former President Donald Trump participated in their first presidential debate. It covered a wide range of topics, from fracking and immigrants eating cats, to the pull-out of Afghanistan and transgender operations on illegal aliens in prison.
There was a lot going on. So much so that it was easy to miss that the two actually talked about the automotive industry and auto manufacturing jobs for a few minutes. It was a welcome subject change.
One subject that was omitted was the former president’s false claims that the Biden administration handed down a “mandate” that forces Americans to buy electric cars. It’s completely made up, but I still can’t believe he didn’t mention it. From the Detroit Free Press:
Detroit’s automakers did get a mention, late in the debate, when Harris claimed the administration has created some 800,000 manufacturing jobs when Trump, she said, oversaw a decline in manufacturing. “I’m also proud to have the endorsement of the United Auto Workers and (UAW President) Shawn Fain,” said Harris, “who also knows that part of building a clean energy economy includes investing in American-made products, American automobiles.”
Trump fired back that Chinese companies are opening plants in Mexico with the belief they will be able to import vehicles into the U.S. and undercut American manufacturers and said if he’s elected, he’ll stop any such imports “because they will kill the United Auto Workers and any auto worker, whether it’s in Detroit or South Carolina or any other place.”
Mexico, however, has already begun backing off incentives for Chinese car investments under pressure from the Biden administration, and the president earlier this year instituted a 100% tariff on EVs from China, with the possibility of further trade rules to stop Chinese imports via Mexico into the U.S.
The two candidates also spoke about manufacturing jobs in general, clashing rather hard (as you may have expected).
As for claims about manufacturing, according to the Bureau of Labor Statistics, Trump saw a decline during his term of about 180,000 jobs, though the economy was still recovering at the time from the COVID-19 pandemic shutdowns. Before COVID hit, manufacturing jobs were up about 414,000, or more than 3% from when he entered office. During the Biden administration some 739,000 manufacturing jobs were created nationally, a gain of more than 6%, though some of that was due to the economy strengthening after COVID.
And motor vehicle and parts manufacturing is up to 1.08 million jobs nationally in August, above the 1.01 million high mark during the Trump years in January 2019. Motor vehicle manufacturing jobs in Michigan declined during Trump’s term even before the pandemic. They’re up 10% now compared to the high water mark under Trump in January 2017.
Listen, I don’t know how or why someone was an undecided voter up until yesterday, but at this point, you’ve got no excuse if you don’t know who you are going to vote for in November.
2nd Gear: Jeep Making Sure Wagoneer S Is Ready For Us
The Jeep Wagoneer S, the automaker’s first all-electric vehicle in North America, is a big deal for Jeep and Stellantis. So, it sort of makes sense that the automaker would take its time with it to make sure everything is ready to go.
Previously, the new crossover was slated to debut in the fall, but CEO Antonio Filosa emphasized that Jeep is more focused on making sure quality is up to par rather than giving a specific launch date when he was asked if the EV was still on schedule. He said the Wagoneer S is close to being ready, and he has gotten word from the Toluca, Mexico plant that is building it that “quality in increasing.” From Automotive News:
The mandate for the vehicle, he said, is clear: “No launch if the quality isn’t perfect.”
“It carries the responsibility of being a Jeep, No. 1, but also it carries the unique responsibility to be the first battery-electric vehicle for Jeep in the history of the North America market, which is the most important market,” Filosa told Automotive News. “I want perfect quality, and I know that we are close, but close is not good enough. Timing is important, but more important than that is to be perfect for the consumers that will give us the privilege to buy this car.”
The Wagoneer S is just one piece of a broader strategy to expand Jeep’s footprint amid a five-year sales slump in the U.S. The gameplan includes bringing out fresh midsize offerings, including the Wagoneer S, and building a product portfolio that covers a range of powertrain options.
This is occurring during a musical chairs-like period at the top of the brand’s North America unit, which has changed hands twice since December. Bob Broderdorf, who was Ram’s senior vice president of operations, became head of Jeep North America on Sept. 3. He took over for Bill Peffer, who had the position for only nine months and will now lead dealer network development.
Jeep may be heading into the final part of the year with some newfound momentum, after a rocky start to 2024. Its U.S. sales declined 19 percent in the second quarter and 9.3 percent in the first half. Every nameplate was in the negative except for the Wagoneer and Grand Wagoneer.
From July 1 to the end of August, Filosa said Jeep inventory on dealer lots shrank 12 percent.
Filosa called August a “robust month of growth” for Jeep in the U.S., with market share rising 22 percent from the previous month. He said U.S. sales increased about 12 percent in August despite losing Cherokee and Renegade volume from the previous year.
In addition, the brand said August was the best retail sales month for Grand Cherokee and Compass in nearly two years.
Jeep hopes to generate more volume in the near term with the Wagoneer S, the Wrangler-inspired Recon EV and a crossover coming in 2025 that could revive the Cherokee name.
[…]
Prices for the standard and extended Grand Cherokees were trimmed between $2,000 and $4,000 in February. The Compass and Gladiator have seen cuts as well.
Filosa said the Grand Cherokee and Compass got further reductions at midyear. More are under consideration for the 2025 Wagoneer, Grand Wagoneer and Gladiator.
It’s sort of hard to overstate how important the Wagoneer S will be to Jeep. I can’t deny that it’s a great-looking car, but there are still some major question marks around how it drives and what kind of quality it comes with.
3rd Gear: Volkswagen Is Preparing For Layoffs
Volkswagen is getting rid of a range of labor agreements including a guarantee of jobs until 2029 at six different German plants. The move is raising the prospect of job cuts next year, but workers’ representatives have vowed to resist the moves.
These decades-old employment guarantee cuts are part of a larger cost-cutting initiative. It has triggered a fight between workers and management as the German automaker struggles to compete against cheaper Asian rivals. From Reuters:
Volkswagen’s move follows a threat that it could shut plants on German soil for the first time in its 87-year history, which sent shockwaves through the global autos sector and prompted high-level German government concern.
“We must enable Volkswagen AG to reduce costs in Germany to a competitive level in order to invest in new technologies and new products with our own resources,” the company’s Labour Director Gunnar Kilian said in a statement.
In a bid to counteract uncertainty around labour agreements, Kilian said Volkswagen was offering to bring forward wage negotiations.
Such talks were due to start in mid- to late October, with strikes possible from the end of November, but the works council has called for the talks to start this month.
The head of the company’s works council has promised fierce resistance against lay-offs and factory closures, blaming management for Volkswagen’s ills.
The IG Metall union has said it could possibly move to a four-day work week as an alternative to plant closures. It’s similar to something the union did back in the 1990s as a cost-cutting measure.
Volkswagen’s troubles come at a time of economic uncertainty, with weak growth, higher energy prices and questions over trade ties with the lucrative Chinese market testing Germany’s model for consensual industrial relations.
If the two parties do not reach an agreement by next June, labour agreements in place prior to 1994 will come into force – which, in what works council chief Daniela Cavallo described in a statement for workers as a “crazy-sounding consequence” – would result in a pay rise for staff at the six plants.
Additional pay components in the labour agreement before 1994 included a Christmas bonus, additional holiday pay, and higher bonuses for overtime, according to an article published in the works council’s internal newspaper.
However, layoffs for operational reasons would also be possible for the first time in decades.
“A negotiated compromise is actually needed. Otherwise, VW will be able to push ahead with forced redundancies from summer 2025, but at the same time would immediately face enormous cost increases for all those who remain,” the works council said in its article.
It really does not sound like a good time to be a worker at Volkswagen right now. Let’s just hope this massive company does right by the folks who provide all of its value.
4th Gear: Ford May Head Back To India
Ford recently held talks with India’s Tamil Nadu state in regards to producing vehicles for export in the region. It’s the first sign of life for Ford in India since the automaker left the country three years ago. Ford threw in the towel on producing cars in India for domestic sale in 2021, following struggles to boost volume. A short time later, in 2022, it gave up on exports from the country as well. It marked Ford’s effective exit from the world’s third-largest car market, which has been dominated by Asian rivals. From Reuters:
Ford sold one of its two plants in India to Tata Motors in 2023. Its other plant, which is in Chennai in Tamil Nadu state, was shuttered.
“Had a very engaging discussion with the team from Ford Motors. Explored the feasibility of renewing Ford’s three decade partnership with Tamil Nadu, to again make in Tamil Nadu for the world,” M.K. Stalin said in a post on X.
Ford continues to explore suitable alternatives for its plant in Chennai, the automaker said in a statement.
Ford, which made its EcoSport and Endeavour SUVs in India, had a less than a 2% share of the country’s passenger vehicle market when it stopped production, having struggled for years to turn a profit.
When it stopped production, Ford said it had accumulated losses of more than $2 billion over a decade and demand for its new vehicles had been weak.
The decision to exit the market came after Ford and local automaker Mahindra & Mahindra failed to finalise a joint venture partnership that would have allowed the U.S. company to continue making cars in India at a lower cost.
Ford continues to build engines for its Ranger pickup trucks at its factory in western India and source parts from local suppliers for global operations.
If I had to guess, Ford’s ambitions of selling its own vehicles in India are probably dead. A two percent market share three years ago (and nothing since) will hurt any chances of success. However, building its cars there for export makes a whole lot of sense to me.