Jeep has to idle a plant to adjust to decreasing demand, Boeing knew the 737 Max was a bad plane, Carlos Ghosn lost his money and gets a video game, and all that and more in The Morning Shift for Jan. 10, 2020.
1st Gear: The Cherokee Takes A Break At The Shit Factory
Car sales, globally, are generally in decline. China experienced its first year of decline after decades of growth. The smaller automakers are struggling for market share, those without crossovers or massive EV ventures are getting left behind, but through it all, people have wanted Jeeps.
Just maybe not the Jeep Cherokee, right now, as Automotive News reports:
Fiat Chrysler Automobiles’ Belvidere assembly plant near Chicago will be temporarily idled for two weeks starting Monday as the company aligns production with demand.
Normal output at the factory, which assembles the Jeep Cherokee, will resume the week of Jan. 27, the company said Thursday.
U.S. sales of the Cherokee, Jeep’s No. 3 seller after the Grand Cherokee and Wrangler, fell 20 percent last year to 191,397. Demand slid 30 percent in the fourth quarter.
FCA had 53,000 units of the Cherokee in inventory on Jan. 1, the Automotive News Data Center estimates, or a 97-day supply, up from a 91-day supply on Dec. 1.
That same assembly plant, which I’ve kindly labeled the “shit factory” up above, has built the Dodge Dart, Dodge Neon, Jeep Compass and Jeep Patriot in the past. That does not signal good times ahead for the Cherokee, but also the Cherokee is so much better than all of those cars.
2nd Gear: Internal Memos Confirm The Crashy Clown Plane Is Bad
Everyone knew the Boeing 737 Max, the plane involved in two fatal crashes last year due to a suspected issue with the flight control systems, was a bad plane way before 2016, according to newly revealed internal communications.
From Bloomberg:
“This airplane is designed by clowns, who in turn are supervised by monkeys,” said one company pilot in messages to a colleague in 2016, which Boeing disclosed publicly late Thursday. The company had already provided the documents to lawmakers and the U.S. Federal Aviation Administration, who are investigating the 737 Max and the process that cleared it to fly.
The communications threaten to upend Boeing’s efforts to rebuild public trust in the 737 Max, which has been grounded since March after two crashes that killed a total of 346 people. That will add to the hurdles for David Calhoun, a longtime board member who will take over on Jan. 13 as chief executive officer from Dennis Muilenburg, who was ousted last month.
In Boeing’s defense, um, they… knew it was bad already?
“We regret the content of these communications, and apologize to the FAA, Congress, our airline customers, and to the flying public for them,” the Chicago-based company said in a statement. “We have made significant changes as a company to enhance our safety processes, organizations, and culture.”
In a statement, the FAA said it has reviewed the Boeing messages and found that “nothing in the submission pointed to any safety risks that were not already identified as part of the ongoing review of proposed modifications to the aircraft.”
3rd Gear: Ghosn
Carlos Ghosn has lost 40 percent of his fortune, blamed on the Japanese indictment of his alleged money crimes during his reign at Renault-Nissan, according to Bloomberg:
The cost of his escape included $14 million in forfeited bail money while the operation that saw him celebrate New Year’s Eve in Beirut could have cost $15 million or more.
That includes $350,000 for the private jet that spirited the former auto executive from Osaka to Istanbul and millions of dollars for his multicountry extraction that would have taken a team of as many as 25 people half a year to plan, according to a private security expert who said he wasn’t involved and asked not to be identified given the nature of the operation.
Such outflows have seen Ghosn’s fortune shrink by 40% since he was arrested more than a year ago at Tokyo’s Haneda Airport, according to estimates by the Bloomberg Billionaires Index. His fortune is now calculated to be about $70 million, down from around $120 million at the time of his first court appearance a year ago.
Somebody is making a video game about him now (I’m sure he hopes for some royalties to make up for his own kidnapping), according to Bloomberg:
Carlos Ghosn’s dramatic flight from Japan may not be the subject of a Netflix deal yet, but a video game parodying his escape may be in the works.
A pre-order page for the game Ghone is Gone appeared on the internet gaming platform Steam this week, and began trending on Japanese Twitter. It promises players will take on the role of “Loscar Gon,” a familiar-looking fallen chief executive officer of the “Ruso, Nisson and Bishibishi corporations.” (The description cautions any resemblance to actual persons is “purely coincidental.”)
And now Ghosn’s lawyer in France is accusing Japan of an unfair trial, via Reuters:
Francois Zimeray, French lawyer for Ghosn, said that it had been for Japan’s prosecutors to prove Ghosn’s guilt, not for Ghosn to prove his innocence.
“It belongs to the prosecution to prove guilt and not to the accused person to prove its innocence,” Zimeray said in a statement.
I’m going to be honest—I don’t care about his money, but the video game looks interesting.
4th Gear: China’s Rival To Airbus And Boeing
China has been trying to develop its own aircraft industry to take on titans like Airbus and Boeing with the C919 single-aisle plane, but it’s reportedly not working out so hot.
From Reuters:
COMAC engineers miscalculated the forces that would be placed on the plane’s twin engines in flight – known in the industry as loads – and sent inaccurate data to the engine manufacturer, CFM International, four people familiar with the matter told Reuters. As a result, the engine and its housing may both have to be reinforced, the people said, most likely at COMAC’s expense – though another source denied any modification.
That and other technical and structural glitches meant that by early December, after more than two and a half years of flight testing, COMAC had completed less than a fifth of the 4,200 hours in the air that it needs for final approval by the Civil Aviation Administration of China (CAAC), two people close to the project told Reuters.
As long as there were no clowns involved in the engineering process, I’m sure the plane will be fine eventually.
5th Gear: German Rivals, And Oh Yeah, JLR
Mercedes-Benz outsold BMW and Audi to hold on as the best-selling luxury automaker for a fourth year in a row, despite having a lineup that, as a professional automotive journalist, I only had about three conversations about in all of 2019. Impressive.
But it also proves the luxury market is a little more resilient in the face of economic shifts and decline, from Automotive News:
The win emerged on Friday when BMW reported sales of its namesake branded vehicles rose 2 percent to a record 2.17 million cars last year. Daimler’s Mercedes-Benz said Thursday its own sales increased 1.3 percent to 2.34 million vehicles. Audi lagged behind both.
Demand for upscale vehicles has proved to be more resilient than the mass-market segment, which has seen sales crimped in some regions by slower economic growth and fallout from trade disputes. While deliveries of expensive models in China — the world’s largest auto market — have held up, the outlook could darken for the German luxury manufacturers due to their exposure to potentially higher auto tariffs between the U.S., China and Europe.
MEANWHILE, speaking of luxury sales, there could be hope for Jaguar Land Rover despite a rough 2019, again from Auto News:
Land Rover sales fell 3.8 percent to 396,105 for the year, while Jaguar sales dropped 11 percent to 161,601.
JLR’s sales last year were hit by a 14 percent slump in China, but in the last six months the company reported double-digit growth in the country.
“2019 was a year of two halves,” said Chief Commercial Officer Felix Brautigam. “Over the last six months we saw a marked improvement in China, where intensive work with our retailers, combined with significant process and product improvements are starting to gain traction,” he said.
JLR’s global sales increased 1.3 percent to 52,814 in December. Land Rover’s volume rose 9.6 percent to 39,442, but Jaguar sales dropped 17 percent to 13,372.
With the F-Pace and E-Pace not exactly blowing anybody’s doors off as hoped, I wonder where Jaguar has left to go to get people to buy their stuff. Hopefully China is kind to them in 2020.
Reverse: Ah Shit
Neutral: You’re Dumped In The CEO Role At JLR. What Do You Do?
Me? I would ask for a new C-X75 or similar halo car, make the I-Pace more crossover-looking, change the fucking names of the E-Pace and I-Pace to something else altogether, dump the F-Type and XF for a sedan with coupe version, dump the XE, and consider but ultimately not commit to just renaming Jaguar just “Jag.” Land Rover seems fine, if a little repetitive.
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