Good morning! It’s Thursday, December 12, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: GM To Continue Autonomous Work In Wake Of Cruise’s Death
General Motors is such a funny company, man. The automaker’s CEO, Mary Barra, says that even though its Cruise robotaxi unit is dead, GM is still committed to autonomy. She added that the decision to close Cruise reflects its need to stay agile in a changing industry, whatever that means.
Barra declined to say how soon personal self-driving vehicles would actually be on the market (because it’s an extremely long time from now), noting that technological developments are taking longer than expected. She simply said, “This is our vision.” Back in 2022, she actually outlined the goal of introducing a personal autonomous vehicle by the middle of the 2020s. Well, Mary, it’s the middle of the 2020s. Good thing Cruise is dead. From Automotive News:
Starting up a robotaxi business is capital-intensive, and GM recognized that its vehicle fleet is capable of collecting the necessary data to evolve Cruise’s technology, Barra said Dec. 11 at an Automotive Press Association event here. Her comments came a day after GM said it no longer will fund the robotaxi effort and instead will combine Cruise’s technology with its own to pursue advanced driver-assistance technologies in pursuit of personal vehicle autonomy.
“We are still very committed to autonomy,” Barra said.
“We looked at what’s important to our customer, what’s important to our core business, how do we lead in that space? And that’s now the journey that we’re on,” she said. “So we’re still going to be investing, but we’re going to focus our investment to make sure we’re accelerating the core technology for personal autonomy, for personal driver assistance and autonomy, not a rideshare business that is not our core business.”
GM, which owns about 90 percent of Cruise, is working to acquire Cruise’s remaining shares. Executives said robotaxis need to be held on GM’s balance sheet as it awaited a future market to develop. The automaker said its restructuring of Cruise should save more than $1 billion annually, slashing the roughly $2 billion it spends on Cruise each year in half.
GM had called Cruise a growth business that could generate $50 billion in revenue by 2030. Barra said Dec. 11 that GM and Cruise had expected a faster rollout of vehicles and also had to repair regulatory relationships after a pedestrian crash in October 2023 that ultimately led Cruise to halt operations nationwide.
“That caused us to have to take a pause to getting the vehicles back on the road, because we had to make sure we’re building the right regulatory environment,” she said. “It wasn’t just we pulled the number out of the air. We actually had plans — pretty detailed plans — with a path to get there. Between the technology and some of the challenges Cruise specifically had, that’s what’s taken it a little bit longer.”
One thing GM does very well in the world of hands-free driving is its Super Cruise Level II automated driver assist. If you ask me, it’s just about the best in the biz. Now, GM is rolling it out on more and more vehicles and on more and more roads across the U.S. and Canada. I eagerly await the day it’s available on every GM product.
Maybe one day GM will actually crack autonomy. Who really knows? One thing is for sure, though. Cruise won’t be there to bask in the glory.
2nd Gear: VW’s Board May Be Against Plant Closures
Finally, there’s some good news for Volkswagen plant workers in Germany. The automaker’s supervisory board is reportedly leaning away from closing a handful of plants in the country as a way to tackle the cost crisis it’s currently facing. Still, no final agreement has been reached.
Board members apparently discussed halting production at the 300-person Dresden plant as well as selling its 2,300-employee Osnabrueck plant back in November, according to a German business publication called Manager Magazin. Now, that all may not be happening. From Reuters:
A potential buyer for the Osnabrueck plant, where capacity utilization is just 30%, was far from being found, the magazine’s report added.
The measures were still speculative and there was some division among members, with the powerful Piech and Porsche families, the largest Volkswagen shareholders, wanting to take a harder line on cuts, the publication said, adding all sides wanted a solution by Christmas.
On Monday, the latest round of talks between the automaker and unions ended with no solution as record numbers of workers went on strike across Germany. Both sides agreed to continue negotiations on Dec. 16-17.
Volkswagen needs to figure out a way to save itself without hurting the thousands of people who have made the automaker all of its money through their labor. At least it’s sort of looking like not as many jobs will be cut with this recent news.
3rd Gear: Stellantis Extends Mirafiori Plant Stoppage
On the flip side of the European auto plants coin, it’s looking like Stellantis is extending the production halt at its factory in Mirafiori, Italy by another two weeks. Now, the plant isn’t slated to reopen until January 20 at the earliest, according to the FIOM-Cgil trade union. From Reuters:
FIOM’s Gianni Mannori told Reuters that the decision – first reported by daily MF – had not yet been made official by the company. A spokesperson for Stellantis was not immediately available for comment.
Mirafiori, based in Fiat’s hometown of Turin, has seen several production stoppages this year due to low demand for the electric Fiat 500 city car and the two Maserati sports models produced there.
Stellantis had announced at the end of last month that assembly lines would be paused for the whole of December and until Jan. 5, due to “continuing uncertainty in sales” for electric cars in Europe and luxury cars in China and the U.S.
I really need Stellantis to figure its shit out, man. I really dig the GranTurismo, and the 500E is very cute as well. However, I can sort of see why nobody is buying them.
4th Gear: Lack Of Hybrids Lead The Charge For Nissan’s Woes
There was a point in time when Nissan was actually ahead of the curve on hybrids with its e-Power hybrid system it launched in 2018. It used a gas engine as a generator for an electric drivetrain. The system turned the Nissan Note into that year’s best-selling car in Japan.
Fast forward to 2024, though, and you’ll find that Nissan still doesn’t offer a single hybrid in the United States. It’s hurting sales in a big way, yet it’s still just the tip of the iceberg when it comes to issues facing the Japanese automaker. Now, Nissan is trying to turn that all around. From Automotive News:
“We have issues specific to our company,” CEO Makoto Uchida said in November, when Nissan reported a net loss in the latest quarter. “The biggest issue is our inability to hit the sales plan.”
[…]
Uchida is under siege by financial problems that threaten Nissan’s newfound footing as an independent carmaker since rebalancing crossholdings with its longtime controlling owner Renault.
Free cash flow is dwindling. A massive bond repayment of $3.8 billion (¥570.6 billion) is due in the fiscal year starting in April. The company’s bond ratings hover just above junk status. And the stock price has tumbled 35 percent this year to its lowest since 2020.
On Nov. 28, Moody’s downgraded its outlook for Nissan to negative from stable. “The negative outlook also reflects the potential for further downside over the next 12-18 months, notably in the company’s execution of its new restructuring plan,” analyst Dean Enjo wrote.
Uchida’s plan calls for slashing 9,000 jobs and cutting global capacity by 25 percent. The Jan. 1 executive rejig is part of the gambit.
Reaction in Japan to the arrival of Papin in the top finance job was mixed. Nissan’s business in the U.S. — Papin’s mandate for the past several years — is the carmaker’s biggest pothole. Sales are stagnating and its market share shrinking.
The Nissan brand has lost more than a quarter of its U.S. market share over the past five years, tumbling to 5.6 percent in the first nine months of 2024, according to the Automotive News Research & Data Center.
Over the next handful of years, Nissan expects to launch some hybrids to get with the times.
On hybrids, Nissan is shifting into gear, but only belatedly. In the next three years, it expects to bring three electrified variants of its bestselling Rogue crossover to U.S. stores, starting with a plug-in hybrid model in late 2025. That will be followed by a Rogue using Nissan’s in-house e-Power series hybrid technology and then an extended-range version.
All of it is far later than Nissan had indicated when it declared that hybrid technology would spread to America in high-end vehicles and that e-Power would form the backbone of electrification for a reborn Infiniti premium brand. The company even developed a more powerful system for overseas, including a version that bolts a high-tech turbocharged engine onto the series hybrid.
To hear headquarters tell it, North American executives dropped the ball.
“The U.S. team was not completely convinced that the electrification system was good for their business,” said one former executive involved with the decision-making. “They said U.S. consumers are not ready. It was a conservative approach.”
Nissan used to really be something. Here’s hoping these issues get figured out before it’s too far gone.
