Opel’s turnaround negotiations with German unions have gone pear-shaped again, as top labour rep Klaus Franz left talks denouncing GM’s decision to cut 9972 jobs instead of the promised 8300, according to The Wall Street Journal. “Fundamental questions have not been answered,” fretted Franz. “Management’s plans seem to change on a daily basis.” Rudi Kennes, a labour representative from Antwerp, concurred, saying the atmosphere between management and the unions “has never been as bad as now.” He added ominously that “(Mr Reilly) needs to answer our questions.” Read More >
David Smith, CEO of Jaguar Land Rover has left the company for reasons that JLR and parent firm Tata refuse to elaborate upon beyond telling the Beeb that Smith’s departure is “not linked to the recent breakdown of talks with unions over pay and pensions.” Since the sale to Tata, Jaguar has been negotiating a two-tier wage system and pension reform with workers at its four British plants, but talks stumbled to a halt just days ago. So, that’s definitely not why Smith left suddenly.
GM and VW are the undoubted leaders in the biggest car market in the world, and despite challenges from homegrown upstarts like BYD, analysts say that the two global majors are best positioned to take advantage of their leadership in China. But now strategies they are a-changing. Recently, TTAC reported that VW seemed to be getting cold feet about expanding their capacity, but GM seem to have come to the opposite conclusion. Reuters reports that GM expects that they will need to build a new manufacturing plant to allow the growth of their Chinese division to continue. “We expect to sell more than 2 million units this year,” Kevin Wale, managing director of GM China, said. “We have enough capacity to build the cars we need to sell this year and we need to continue to look for ways of increasing our capacity. That will mean we will have to add a new plant some time in the near future.” The plant won’t be built this year because, according to Mr Wale it would be “physically impossible” to move so quickly, but with current GM China plants adding new shifts and expanding current production lines, it seems like their current facilities are just about tapped out. Maybe they could use some of their excess capacity in the United States? Er, maybe not.
Automotive News [sub] quotes CAW President Ken Lawenza as saying “supplier challenges” have shut down production of the Chrysler Group’s minivan plant in Windsor, Ontario. Chrysler confirmed that the plant would be closed until February 1, but refused to elaborate on the circumstances. According to Lawenza, “the reason is because if a supplier never lived up to their contract, then it could be legal ramifications. We let those guys hash it out legally.” The President of CAW Local 444 Rick LaPorte adds “it’s a piece for the key fob, so my understanding is that it’s a raw material issue. The good news is that it’s not an inventory adjustment problem or a lack of sales; it’s a good problem to have.” You know, relatively speaking. Read More >
Ford may be trying to do their bit about overcapacity issues, but they’re having little success with it. The Freep reports that a buyout program by Ford, which was offered to 41,000 hourly workers, has few takers. Very few. The program was issued on December the 17th and due to expire on Friday the 22nd of January. “They’ve offered it so many times, the ones that wanted them already took them,” said Rocky Comito, president of UAW Local 862. The deal offers early retirement or a buyout lump sum of between $20,000 to $50,000 plus either a voucher for $25,000 or $20,000 for a new vehicle. Presumably, Mexican Fusions won’t be high on their shopping list. However, Ford may have a new problem surfacing. Due to Ford’s rising stock price, higher sales and substantial profits, workers will start to see the current buyout package as small and may hang on for a better deal. Couple that with the dour economic climate & low prospects of finding another job and that’s even less reason to take the buyout. “It doesn’t do much for people,” said Jeff Terry, president of UAW Local 228. Once again, the mere perception of relative success at Ford turns out to hurt as much as it helps.
There’s a lot happening in the world of cars these days, but few stories are as compelling as the emergence of two rival US-based firms created by two former bosses of the Chinese automaker Brilliance. At face value, both Hybrid Kinetic Motors and Greentech Auto are little more than visa scams: neither attempts to hide the fact that their fundraising plans involve a US Visa program (EB-5) which allows citizenship to foreign nationals who invest a half-million bucks in an American business. For additional scam warning points, both firms purport to use mythical hybrid engines and plan factories with annual capacities of a million units. But as easy as it is to simply write these firms as Chinese visa hucksters grifting the good folks of such towns as Tunica, Mississippi and Bay Minette, Alabama, they keep showing up in the news with stories that predecessors like ZAP would have given their stock-price-boosting-press releases for. To wit: the latest news that Alabama hopeful Hybrid Kinetic Motors has signed a half-billion dollar deal with Italdesign-Giugiaro, the largest order in the famed design house’s 42-year history.
Mississippi is starting to get a bit shirty with Toyota. ABC News reports that Mississippi legislators are getting annoyed with Toyota because of the lack of clarity as to when Toyota will start paying the interest on the money the state borrowed to bring Toyota’s car plant to Mississippi. Tate Reeves, State treasurer, told lawmakers during a briefing that discussions are ongoing about when Toyota would begin making payments. The State of Mississippi has already paid about $16.7 million in interest. However, Toyota have a different take on affairs.
A few months back I noted that the French government was interfering in the car industry by demanding French plants stay open as a condition of their bailout of Renault. Well, things are getting even more….well….French. New York times (via Reuters) reports that French President Nicolas Sarkozy has summoned Renault and Nissan CEO, Carlos Ghosn for a cosy chat. Actually, “grilling” might be better way of putting it. The invitation has come about after reports surfaced that Renault might be producing its new Clio in Turkey, rather than France. This could be considered state bullying, but the French State is a 15% shareholder in Renault. French Industry minister, Christian Estrosi made absolutely no effort to cover this coercion.
With the world starting to gain stability economically and economists talking about “bull markets” you’d be forgiven for thinking we can start to be optimistic and why not? Ford are flying high, GM (prodded by the government) are adding third shifts and Chrysler’s sales “only” dropped 3.7% in December. Well, don’t be too sure. CNN Money reports that a survey conducted by KPMG of 200 auto and supplier executive showed that 88% of them believe there is still too much capacity in North American plants. In fact, the survey showed that the executives believe that overcapacity is a bigger problem today than a year ago and when you look at the figures, it’s a bit of a no brainer.
GM’s Lordstown, OH plant was something of a poster boy for all that went wrong with the UAW over the past several decades, reports the New York Times. Poor quality, worker sabotage and crippling strikes led to the coining of the term “Lordstown Syndrome” as a symbol of UAW recalcitrance. Lordstown’s workers were so feisty that they even picketed their own union hall in the 1980s. Now, with the legacy of the Vega hanging over their heads, and the possibility of plant closure only narrowly avoided by securing the Chevy Cruze manufacturing assignment, the members of UAW Local 1112 are singing a different tune. “We were the bad dog on the street at one time,” 1112’s shop Chairman Ben Strickland tells the Times’ Nick Bunkley. “We’ve got 3,000 lives to worry about. The cockiness and the arrogance that we once portrayed — we definitely got a lot more humble.” That, it turns out, is in large part due to General Motors’ spectacular fall from grace.
Good news for Elkhart, Indiana today, as The Detroit News reports that the Norwegian EV firm Th!nk has chosen the city for its $43.5m US production facility. The plant will have a production capacity of 20k units, once production ramps up from its 2011 start. By 2013, Th!nk says it will employ 415 workers who will build the firm’s City model, a two-seater which will initially cost nearly $40k before government tax breaks. The factory will receive some $17m in state and local tax breaks and incentives. Th!nk hopes to eventually reduce the cost of the City, which has a stated range of 112 miles and a top speed of 70 mph, to about $20k. Read More >
We’ve always said the Fiat-Chrysler alliance was positive. The headquarters of an increasingly global company are here. But I wouldn’t like to see new auto products being developed in the United States and not here in our own research-and-development facilities.
Andrea Bairati, commissioner for innovation for Italy’s Piedmont region in a WSJ piece on Fiat’s annual meeting in Turin. Maybe if Piedmont had kicked a few billion in on the Chrysler-Fiat alliance, Mr Bairati wouldn’t feel quite so slighted.
First, they sold the most amount of cars in the world, then, they started cost cutting and now, Toyota are taking another big step towards becoming GM. The Charleston Daily Mail reports that the managers of Toyota’s manufacturing plant in Buffalo, West Virginia have allowed workers to distribute union literature during breaks at the plant. There’d been grumblings about unionisation for some time. Last month, some Toyota employees, (with the backing of the UAW, naturally), filed a grievance with the National Labour Relations Board’s regional office in Cincinnati. They wanted to distribute union material but were stopped by Toyota managers. Jeff Moore, a Toyota vice president at the West Virginia plant, reversed that policy. Read More >
The WSJ reports that GM has added a third shift to its Fairfax assembly plant at the request of the US auto task force. The Kansas City plant will now build 6,300 vehicles a week working 21.6 hours a day, up from 4,500 units per week working 14.5 hours per day with two shifts. The move reportedly makes Fairfax the first US auto plant to run three shifts on a routine basis. According to the WSJ,
the auto task force that oversaw GM’s reorganization last spring was startled to learn that the industry standard for plants to be considered at 100% capacity was two shifts working about 250 days a year. In recommending that the government invest about $50 billion in GM, the task force urged the company to strive toward operating at 120% capacity by traditional standards.
Why? That’s not exactly clear. The potential downsides of the move are far easier to identify.
At the urging of the Italian government, Fiat said today that it is willing to shift production of Pandas from Poland to the Pomigliano plant in Naples and invest “hundreds and hundreds of millions” in order to bring its Italian production to over 800k units per year. But, he warns, the Italian government must extend domestic consumer credits in order to sop up the increased capacity or face a rapid market contraction. As part of the deal, the government would allow Fiat to shut a terminally unproductive plant in Sicily, for as Sergio says, “the number of cars produced per worker [in Italy] is totally out of proportion” compared with plants in Brazil or Poland. “It doesn’t correspond with any industrial logic.” He’s right, of course, but you have to admit that it’s strange to see the man who took American taxpayers for a savage ride by snagging a bailed-out Chrysler without putting a penny down, suddenly bankrolling the oblivious nationalism of the Italian government.
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