This is The Morning Shift, our one-stop daily roundup of all the auto news that’s actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn’t your time more important?
1st Gear: Somebody Shoot Me While I’m Happy!
Fats Waller used to say “shoot me while I’m happy” when he was playing the piano particularly well. That’s how carmakers might feel right about now, at least according to this article by Joseph White. Here’s his case:
The climate now is as favorable for auto makers as it has been in years. Interest rates remain unusually low, oil prices are remarkably stable and consumers in the world’s two largest car markets—the U.S. and China—are snapping up sport-utility vehicles, luxury cars and, in the U.S., big pickup trucks, the most profitable vehicles most car makers sell.
Even Europe has come out of the worst of its funk, allowing mass market car makers such as Ford and General Motors to narrow losses.
Can it get any better than this? Probably not.
I don’t know that I entirely agree that it can’t get any better than this, but I buy the argument that it’s hard to see what the path is. The U.S. car market feels like it’s getting close to redline, China has an inevitable cap, and developing markets are developing and thus don’t just buy cars at a perfect pace (and sometimes they declare war… looking at you Russia).
The question isn’t “will the car market ever slow down?” but “are carmakers ready when it does?”
2nd Gear: Andy Palmer To Head Up Aston Martin
Andrew Palmer is one of those execs that’s had a good rep for a number of years, mostly for his work in various positions at Nissan. Now the Brit is taking his skills to Aston Martin to help lead the brand in its next iteration.
Logically, this is such an obvious and smart move it seems not worth talking about so let’s talk about the more interesting story here: Nissan execs on the way out.
We all so Johann De Nysschen quickly leave Hong Kong to come back to America, ostensibly because he didn’t want to live in Hong Kong. Now Palmer. Is this Carlos Tavares disease? Do execs realize that Carlos Ghosn isn’t going anywhere anytime soon and looking for companies where they can lead?
I honestly don’t know, but it’s curious.
3rd Gear: A Tale Of Two Asias
Asia is huge and home to an enormous chunk of the human population, so it’s almost insultingly reductive to reduce it to North Korea and Japan. But. Reducing it to South Korea and Japan, you see two companies on different points of the same cycle.
Japan is in a growth phase after a long period of mediocre returns, having worked hard to lower their currency to encourage exports, expansion, and profits. South Korea was in that position a few years ago, but now the won is up, they’ve grown a lot, and their middle class is starting to have middle class concerns.
Essentially, they’ve Freaky Friday’d themselves, and South Korean stocks like Hyundai are on their way down while Japanese stocks like Toyota and Nintendo are on their way up.
4th Gear: Utilities Want You To Buy EVs
All your stupid LED light bulbs and high efficiency washers are working, which isn’t great for people in charge of selling you electricity. Sure, it’s good for your wallet and good for the environment and lowers the risk of straining our energy grid but… money money money.
Thus, the people in the business of selling you electricity also want you to buy electric cars and are willing to make it easy for you by installing 5,500 EV chargers around San Diego — and then tacking on a surcharge to everyone’s bill.
The Utility Reform Network, a nongovernmental organization that fights rate increases, has asked state regulators to reject the new fee, about 40 cents a month for an average customer.
It is inappropriate to ask consumers to pay for risky business ventures, says Marcel Hawiger, a lawyer for the group. The equipment might not prove profitable in the long term or quickly could become outdated, he says. “Shareholders should fund business opportunities for the company.”
5th Gear: Elon Musk Getting States To Bid For Factories
State and local governments throwing tax breaks and other incentives at automakers (or any companies) to get them to locate (or relocate) to a particular place is nothing new, but Elon Musk and Tesla have turned the process into something resembling art.
Through a series of unusual plays, Tesla has five states bidding up subsidy packages to land the coveted plant. The winner is expected to offer the luxury car-maker publicly financed incentives exceeding a half-billion dollars.
Tesla signaled this would be no ordinary competition last fall, when it gathered economic development officials from seven Western states and unveiled its vision for a “gigafactory.” (”Giga” refers to the large amount of power that batteries produced at the plant will store.)
This spring, CEO Elon Musk announced Tesla would take the extremely unusual step of spending millions to prepare sites in two states — or perhaps even three — before the finalist was chosen. Then, over the summer, Musk said the winning state would pitch in about 10 percent of the cost, effectively signaling a minimum bid of $500 million.
“We don’t usually see companies setting a floor at which states will be considered,” said Leigh McIlvaine of the research group Good Jobs First, which tracks large subsidy packages by states.
There’s a lot of great reporting in this piece so you should read the whole thing.
Reverse: Ford Should Bring The Falcon Name Back
On September 2, 1959, at a news conference broadcast to viewers in 21 cities on closed-circuit television, Henry Ford II introduces his company’s newest car—the 90-horsepower, 30 miles-per-gallon Falcon. The Falcon, dubbed “the small car with the big car feel,” was an overnight success. It went on sale that October 8 and by October 9, dealers had snapped up every one of the 97,000 cars in the first production run.
Neutral: Is The Car Market About To Implode? And are automakers ready for it? Which ones? How?
Photo Credit: Getty Images
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