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How much does it cost to kill a car?



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The Morning Shift All your daily car news in a suitable location. Is your time not important?

Ford hits a big blow as it conducts a worldwide restructuring, number 1,684,349 over a possible merger of Renault and Nissan and a one-year review of Ford's sedan-less future. All this and more for Friday's Morning Shift, April 26, 2019.

1. Gear: Ford makes a (one-time) profit pool in the midst of restructuring

Pretty much every automaker is battling demand for new cars this year in the midst of a global slump, but Ford took a particularly large bathtub with net revenue by 34 percent. The company states that this is due to worldwide restructuring and other one-time costs to support the business. Here are the automotive news:

Ford attributed much of its net income to US $ 600 million in one-off charges related to its global redesign, including the abandonment of the commercial vehicle market in South America and the restructuring of its operations in Europe.

It was a $ 24 million hit for the ongoing layoffs of employees in North America, a process Shanks is about to end.

Also included in this write-down is a $ 67 million royalty to discontinue Focus's US production as part of the company's sedan killing strategy (more on this later), reminding that It costs a lot of crazy money to kill a car.

Although it's a rounding error for Ford, the company also made a mistake $ 11 million fell to end the Chariot transit program, which was a hilarious failure at least in New York. Depreciation, however, would suggest that this is not just for the Big Apple.

In general, Ford believes that this is good news. Automotive News again:

"It was a good start, but we still have three-quarters of the year ahead of us," said Ford Chief Financial Officer Bob Shanks on Thursday. "We are happy, but our enthusiasm is well under control."

"Our enthusiasm is well under control" is a fantastic oxymoron I would like to use at the regulars' table. In any case, however, investors also seem to have the excitement under control:

Following the release of the company's financial results for the first quarter, Ford's shares outperformed trading for over $ 10 for the first time since August.

There's likely to be more for Ford as it prepares for a bad sales year like most other automakers and prepares for an expected recession.

2. Gear: The Neverending History of the Nissan Renault Association Adds More Pages

The Nissan Renault partnership is decades old at this point, but despite the efforts of Carlos Ghosn, they just do not seem to be putting a ring on it.

The main issue has historically been the French government's 15% stake in Renault. A new Renault plan, reported by Nikkei, is now set to finally reach an agreement that can appeal to all parties involved:

[Renault] suggests that the shareholders of Nissan and Renault have equal interests in a holding company that has 100 Owners will be% of each automaker and equal representation on the board. According to the plan, the 15% share of the French state in Renault would amount to 7% of the holding company.

Renault is pushing the problem because both automakers need a shot in the arm. Nissan continues to revise sales and revenue forecasts as the company drops out of Ghosn's rapid expansion policy, while Renault continues to struggle to gain market share in general.

There are many complicating factors, as a decades-long hiring phase suggests. Renault believes, however, that they have made the right plan at the right time. More from Nikkei:

Renault's approach is announced when the Japanese company announced its second profit warning of the year this week. The operating result would decrease by 45% compared to the previous year.

Renault's chairman, Jean-Dominique Senard, believes he can address some of Nissan's concerns by suggesting the structure of the holding company and proposing that the seat should be located outside of Europe and Japan. Renault has considered Singapore as an option. Nissan would retain 34% of Mitsubishi Motor, the third partner of the Carnnaking Alliance.

Does it work? Nikkei certainly does not believe this:

Nissan is expected to reject the plan again, setting the course for a future relationship between the two companies, and questioning the stability of the alliance's key alliance.

Hey, you miss 100 percent of the shots you do not make.

Third Gear: Adding Daimler to List of Breaking Automakers

Daimler's first quarter results were basically as bad as any other. Reuters reports:

Daimler's operating income declined 16 percent on Friday, as a one-time gain of $ 718 million ($ 800 million) was related to a production delay for its Mercedes-Benz GLE and higher raw material costs could not compensate.

Daimler said that problems with the launch of a new sports car platform in Tuscaloosa, Alabama, led to delays in production of the GLE model, which lowers the return on sales of Mercedes-Benz vehicles dropped 6.1 percent from 9 percent in the previous year.

Sales of Mercedes-Benz in China, the world's largest passenger car market, also fell 3 percent, and sales of smaller compact cars helped narrow margins, Daimler said.

According to Daimler, costs were incurred following the discontinuation of X-Class sports cars in Argentina. The markets in South America are not mature for a premium pickup, said CFO Bodo Uebber.

Sales slump in China? Production problems and / or closures in the US? To leave the South American market for large vehicles? Sounds familiar.

It's going to be a tough year for The Cars.

. 4 Gang: Hey Ford, what about the limousine without a future?

A year ago, Ford shocked pretty much all the company said it was going without a sedan. There was a lot of digital ink talking about why Ford did that and whether it was a good call not to make the car cars of all cars anymore. But that should not stop us from distributing more digital ink to the topic.

Some, like our own Tom McParland, argued at the time that it was smart because Americans who wanted to buy fords almost always preferred the larger crossovers with little compromise on fuel economy or price, but higher driving positions and more Space. And since they went crazy in limousine sales anyway, they stuck to the Bart Simpson theory of car sales: I can not win, do not try.

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One year later Ford stops According to the plan, Detroit Free Press reports:

"The exodus of passenger cars in SUVs has accelerated," said Mark LaNeve, vice president of the US marketing, sales and service department of Ford Free Press. "It's breathtaking. It's a generational change. At Ford, we believe it is structural or otherwise durable. It will not hit back with an oil shock.

LaNeve even made essentially the same argument as our own McParland, which was crammed with the Detroit automaker "My Wife as a Replacement for the American Consumers" anecdote:

Years ago, when you read of Switching a car into an SUV meant having to compromise on fuel economy, ride quality and technology, LaNeve said. "You do not have to make any compromises with the SUVs that are currently being built. We invented a better mousetrap. My wife, No. 1 with her, is visibility. She wants to see. And a heated steering wheel. She likes the command seat position.

Ah yes, the wife of an executive firm of the Ford Motor Company, the car buyer of America.

Do not worry, Ford is sure they've made the right decision, even though there are some people who actually like sedans. They'll convince them by getting them to buy something other than a sedan:

"Are there die-hard limousine customers we could lose? We hope to minimize that, "said LaNeve. "We will play to our strengths. We will take every opportunity to introduce you to Ecosport and Escape (compact SUVs). And we use capital that we have assigned to the sedans. That's the compromise we make. We will spend money where growth takes place rather than let it go.

What about the drivers of the Ford Fiesta, Ford Focus, Ford Fusion? They will switch to other Ford products, LaNeve predicted.

I mean, maybe? A lot of that rhetoric blows in the old stench of Detroit hubris (everyone will buy the cars we're supposed to tell them to buy!), But there's also some data to support it.

Another possibility outlined by the Wall Street Journal is that SUVs will become increasingly smaller until they become straight to the new sedan:

As the sedan out of favor with many US car buyers Automakers have rushed to introduce cheaper, rather small sports utilities into their lineup. These new offerings aim to provide customers with a new entry point into car brands as small and hatchback models – a long-term target for many first-time buyers – expire. In some cases, automakers are targeting younger consumers with smaller SUVs to more inspire older drivers for the models.

The subcompact SUV class barely existed a decade ago but has grown significantly in recent years, from just a single model in 2009 to around 16 this year, according to Edmunds.com car-shopping website. It now includes nameplates such as the Nissan Kicks, the Ford EcoSport and the Toyota C-HR.

That sounds like Ford's bet to me. Even if fuel prices inevitably rise again, they have a robust supply of fuel-efficient small SUVs that can meet consumer demand for better fuel efficiency. However, this would require the price for small SUVs, as the Journal says:

Automakers tend to make more money on sports cars, mostly because they can have higher prices than sedans for relatively little extra cost. For example, the average price for a SUV SUV in 2018 was about $ 22,400, more than $ 6,000 more than for a car of similar size, according to research firm JD Power.

It's obviously (too) early to say what Ford is. Limousine future means in the long run, but it seems they rely on the sedans to be no more the archetypal car.

5. Gang: But you do not think Uber lost a lot of money again

Gradually it seems that the markets are watching a little bit over Uber and Lyft have extremely crazy business models. Here are Uber IPO's latest news and earnings report:

Uber reported a net loss of approximately $ 1 billion for the first quarter of 2019, with revenues of approximately $ 3 billion.

And:

The valuation Uber intends to make on its IPO is below the $ 120 billion that investment bankers reported to Uber last year, and could get closer to the $ 76 billion it spent last year private position had reached fund-raising round in 2018.

This reflects the poor stock performance of its smaller competitor Lyft Inc following its IPO last month. Lyft's shares were discontinued on Thursday, falling more than 20 percent from the initial public offering, reflecting investors' skepticism about the path to profitability.

With sales of $ 3 billion a quarter, it lost $ 1 billion. And soon they will be worth tens of billions of dollars on the open market. I can not help shaking the feeling that a market so unimpressed by the catastrophic P & L measurements is somehow linked to the often-vaunted recession around the corner.

Reverse: UAW and Chrysler Reach Deal in 2009, Bankruptcy Set in Motion

Chrysler and Auto Workers' Unions agree to a deal

On this day in 2009, Chrysler and the United Auto Workers union meet (UAW) a preliminary deal that …

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] Neutral: One year on, how do you feel about Ford's sedentary future?

Although I understand the logic, it still feels weird that Ford has completely abandoned the limousine market.


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