Compact pickup trucks, lawsuits over tiny fish, unexpected dangers on the road and more await you in The Morning Shift for Wednesday, Aug. 1, 2018.
1st Gear: Ford’s Got Plans, Maybe
A new compact Ford unibody pickup truck is in the works with plans to bring it to the U.S. market in 2022—at least, according to sources familiar with the matter. Those sources spoke to Automobile recently, saying that the truck would be built on the next-generation Focus platform.
With Ford throwing most of its cars out the window here in the North American market because everybody wants trucks, SUVs and crossovers, it makes sense to build yet another size variation of a truck. Sources told Automobile the reported new smaller truck would slot in below the new Ford Ranger, which has gotten pretty large itself.
From Automobile:
Ford is preparing a compact pickup truck that would fill the space left open when its Brazilian-built, Fiesta-based subcompact Courier pickup was replaced with the larger, midsized Ranger in 2013.
Sources familiar with Ford’s future product plan say the automaker is considering it for the U.S. market. It would slot below the Ford Ranger midsize pickup arriving in U.S. dealerships early next year, but bigger than the 1998-2013 Courier. The European Union market has been buying larger vehicles in recent years, including pickup trucks, and so the Courier replacement will be built on the next-generation Focus platform, sources say.
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Really, it would be nice to have another Focus RS instead of a new Focus-based pickup. But trucks, crossovers and SUVs—that’s all automakers see when they look at us now, and it’s all our fault.
2nd Gear: Mazda and Toyota May Be In For a Lawsuit
The $1.6-billion plant Mazda and Toyota decided to build together was all fun and interstate jealousy until a location was announced, because the companies picked a spot where they could potentially harm a tiny, threatened fish species. Now, they may get sued over it.
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The story started way before either company decided to build a factory capable of 300,000 cars each year in Huntsville, Alabama when it opens in a few years, and a group called the Center for Biological Diversity kept Toyota and Mazda out of it at first. It instead sued the U.S. Fish and Wildlife Service for allegedly not abiding by the Endangered Species Act in regards to the spring pygmy sunfish—our little friend that could be affected by this new car plant.
But after a work stoppage on the plant resumed recently, the center announced that it’s given Toyota, Mazda and the City of Huntsville notice that it wants to sue over protecting the fish. From a press release by the center:
“This massive industrial auto plant will unquestionably hurt the spring pygmy sunfish and what’s left of its natural springs,” said Elise Bennett, an attorney at the Center. “Allowing construction to go forward without carefully looking at the impacts and putting a strong conservation plan in place is playing fast and loose with Alabama’s unique natural heritage. One wrong step could wipe this lovely little fish off the face of the Earth.”
In 2018 Toyota-Mazda announced it would build a $1.6 billion automobile assembly plant on what’s known as the “Huntsville Mega Site.” The plant will include massive industrial development, including a very large factory and parking lots covering hundreds of thousands of square feet. […]
“The construction of a sprawling industrial facility right next to one of the last places the spring sunfish lives is a serious threat to its survival and could contribute to pollution of a beautiful spring system,” said Bennett. “We need to see comprehensive and enforceable measures in place to protect this tenacious little fish before we can rest easy that it is out of harm’s way.”
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The formal intent to sue is here, and more background on why the fish, the plant, and the main arguments from the center can be found here and here.
3rd Gear: Funding Tesla’s Chinese Factory
Tesla’s prices are skyrocketing in China thanks to international trade wars and tariffs galore, and Bloomberg reports that the company could change that with the help of a $5-billion investment into a Chinese factory that’s partially funded by partners in China. Plans are for the plant to be near Shanghai and Tesla’s considering getting funding from local partners for it, according to Bloomberg.
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That’s according to unnamed sources quoted by Bloomberg, who asked not to be named because the matter is private. Here’s the word Bloomberg got:
Chief Executive Officer Elon Musk secured a preliminary deal to build the factory last month, just days after China’s retaliation against President Donald Trump’s tariff hikes boosted the cost of exporting cars made in the U.S.
Chinese funding partners could enable Tesla — which is yet to turn a profit — to share the financial burden of realizing an ambitious expansion plan that includes building a factory in Europe. While analysts say the California-based company will need to raise capital to bring its plans to fruition, so far Tesla has insisted it doesn’t need to do so. The carmaker had just $2.7 billion in cash at the end of the first quarter, and has been spending billions of dollars on accelerating production of its Model 3 sedan.
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China imposed tariffs on U.S.-made cars in response to the mounting trade war, increasing the prices of the Model S and Model X by more than $20,000 each in the country at the beginning of July. Prices as a result of the trade antics are pretty unpredictable, too.
Bloomberg reports that China is the world’s largest electric-vehicle market and Tesla’s second-largest market, so it’s kind of a big deal. Tesla didn’t respond to Bloomberg’s request for comment, but here’s the bigger picture for EVs and China right now, from the story:
China’s ambition to boost annual sales of new-energy vehicles tenfold by 2025 has encouraged hundreds of automakers to produce electric vehicles in the country. Backed by investments from local governments, tech entrepreneurs and venture-capital firms, Chinese EV startups are trying to capture the market before Tesla increases its presence.
Tesla didn’t provide details on how much the factory would cost when it announced the preliminary agreement with the Shanghai government last month.
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The source who spoke to Bloomberg said Tesla wants to start producing the Model 3 in the Chinese factory by 2020.
4th Gear:How Opel Has Turned Around After Leaving GM
When General Motors sold Opel, it was because the German brand was bleeding money year after year, with no end in sight. But now, under its new French ownership of PSA, Opel is actually doing well, with Automotive News Europe writing that the brand scored a first-half operating profit of $587 million and managed a 5-percent profit margin.
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Automotive News called it “a remarkable turnaround,” and it’s happened pretty quickly thanks to a reported 28-percent reduction in fixed costs at Opel, as well as big savings in manufacturing. A lot of that happened with Opel using PSA as a benchmark, according to Automotive News:
The biggest area of savings came from manufacturing. Opel has “compressed” assembly plants to make them more compact to save in areas such as logistics and has reduced complexity, [Opel CEO Michael] Lohscheller said.
For example at Ellesmere Port in northwest England, Opel cut staff by around a third to cut production of the Astra and Astra Tourer compact models to a single shift. The plant was benchmarked against PSA’s flagship plant in Sochaux, France and was found to be building cars at twice the cost, Opel’s sister brand Vauxhall in the UK has previously said.
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PSA is also reducing its employee count by 3,700, according to Automotive News Europe, with PSA CEO Carlos Tavares insisting that the cuts will be voluntary. Lohscheller said top management has been cut by 25 percent.
But PSA’s recent success wasn’t just about reducing manufacturing or labor costs. Strategic changes in pricing and “model mix” for the brand’s new SUVs were also key. Lohscheller says variable costs per model are down, and that the brand’s strong performance could continue.
From Automotive News:
Lohscheller described Opel’s half-year financial results as delivering a “very clean margin” that was repeatable. He said “every single model” was profitable for the brand.
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Not bad.
5th Gear: Maybe Don’t Drive Tomorrow
Aug. 2 is the most deadly day of the year in terms of traffic crashes in the U.S., in case you woke up this morning and thought, “Gee, I wonder what the most deadly day for U.S. driving is?” So, yeah, maybe stay home tomorrow.
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That count is according to Insurance Institute for Highway Safety, or the people who do the IIHS safety ratings on your car. According to IIHS stats published by Bloomberg, the danger of Aug. 2 isn’t because of anything particular like drunk driving, bad weather, big sporting events or holidays. It’s just because it’s sunny and nice outside, and a lot of people are traveling on vacation.
The month of August in general is bad for that same reason, Bloomberg quoted IIHS researcher Becca Weast as saying. People are less on guard while driving because the weather is good, and there are just a lot of them out there.
From Bloomberg:
August accounted for 15,914 fatalities during the study’s span. The first week of the month is prime vacation time, putting more cars on the road and therefore more chances for an accident. But other than that, “there’s no significant event that makes the first week in August a particular lightning rod for high fatalities,” Weast said.
Nationwide Mutual Insurance Co. members reported 60,976 accidents in August 2016, more than in any another month in the last four years, according to the Columbus, Ohio-based company.
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Between 2012 and 2016, the five most fatal days to be on U.S. roads were Aug. 2, with 101 average deaths each year; July 4, with 99 average deaths, Oct. 25, with 98; and May 3 and Nov. 1, each with 97 average deaths per year.
It’s a good week—month, year, all the time—to work from home.
Reverse: Richard Petty Gets Richer
Richard Petty became the first NASCAR driver to surpass $1 million in career earnings on Aug. 1, 1971 with a win in the Dixie 500 in Georgia, according to the NASCAR website. That’s a lot of cash.
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Neutral: Do ‘Dangerous Days on the Road’ Freak You Out?
Driving on New Year’s Eve or the early hours of New Year’s Day? Nope. No, thank you.
Additional reporting by David Tracy
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