Good morning! It’s Thursday, November 21, 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: Trump’s Tariffs Would Be Bad For America, Warns Mexico
In just 60 days, president elect Donald Trump will be sworn in as leader of the United States for a second term. When that happens, the convicted felon will have to start delivering on all the ridiculous promises he made on the campaign trail, like the end of an EV mandate that doesn’t exist, strict rules on imported cars from China and sky-high tariffs on almost everything that crosses the border from Mexico.
In the days leading up to the election, Trump promised that he would strap a 200 percent tax on imports from Mexico. Now, teams from south of the border have warned that this wouldn’t just hurt Mexican industry, it would be bad for American business as well, as Reuters reports:
Economists have warned that such tariffs would amount to a serious blow to Mexico’s export-dependent economy and have warned of a lesser hit to the U.S. economy.
“Mexico’s negotiation power is relevant,” Mexico’s economy minister, Marcelo Ebrard, said at a press conference on Tuesday, pointing to the number of multinational firms that have set up shop in his country.
“Any action that you take to put at risk (the U.S.-Mexico trade relationship) means thousands of companies” will be impacted, Ebrard said. “There’s hardly an important U.S. company that doesn’t have money here.”
Ebrard suggested last week that Mexico could roll out retaliatory measures of its own.
What those retaliatory measures could look like remains to be seen, but the immediate issue facing car fans is the impact import tariffs will have on some of America’s most popular models. Cars like the Honda CR-V and Toyota Tacoma are all built in Mexico and shipped north, a 200 percent tariff on those would simply be passed onto consumers meaning higher prices across the board.
Then there’s the long-promised Mexican Tesla plant, which was supposed to massively increase production capacity for the electric car maker. Tesla boss Elon Musk has remained pretty quiet on this one after his best bud was voted into power, but long delays, missed deadlines and broken promises are all part of the Musk playbook, so maybe this is just business as usual.
2nd Gear: Ford Cuts 4,000 Jobs, Blames Weak EV Demand
Ford is about to become the latest in a long line of global automakers to backtrack on electric vehicle production and slash jobs after demand for its models was “weaker than expected.” The Blue Oval will follow the lead of Stellantis and Toyota in altering its outlook on EVs after it was revealed that it will slash 4,000 jobs and cut production of models like the Capri and Explorer.
Ford will cut jobs across its workforce as a result of economic challenges, stiff competition in the EV space and weaker than expected sales of electric cars, reports the Associated Press. The cuts will be carried out at the automaker’s facilities across Europe by the end of 2027:
Ford said Wednesday most of the job cuts would come in Germany and would be carried out in consultation with employee representatives.
Of the total, 2,900 jobs would be lost in Germany, 800 in Britain and 300 in other European Union countries. Ford has 28,000 employees in Europe, and 174,000 worldwide.
“The global auto industry continues to be in a period of significant disruption as it shifts to electrified mobility,” the company said in a statement. “The transformation is particularly intense in Europe where automakers face significant competitive and economic headwinds while also tackling a misalignment between CO2 regulations and consumer demand for electrified vehicles,” the statement said.
As well as cutting its workforce, Ford will also reduce its focus on new electric models destined for Europe. Working hours at a Ford plant in Cologne will be cut, which will impact production of the European Explorer SUV as well as the revived Capri, which is due to hit the road in early 2025. Ford hasn’t confirmed what this will mean for Capri deliveries in terms of targets, but it’s never good to hear about production cuts of a much-hyped model that hasn’t even gone on sale yet.
Ford isn’t the only automaker struggling to make EVs work in Europe, though, as Volkswagen recently announced that it may have to shut factories in an attempt to reduce its cost amid the pivot to battery-powered cars. Stellantis has also faced problems of its own, repeatedly cutting production at a site in Italy that builds the Fiat 500 EV amid struggling sales.
If everything from cutesy city cars to family SUVs is struggling to sell in battery-powered form, do the problems with EVs run deeper than we first thought?
3rd Gear: VW U.S. Head Out, Replaced By Porsche Boss
If potential factory closures and warnings that it only has a few years left to run weren’t bad enough for Volkswagen, the German automaker has just lost its U.S. boss after just two years in the job.
Pablo Di Si, the head of Volkswagen in the U.S. has stepped down to be replaced by former Rivian and Porsche executive Kjell Gruner, reports the Financial Times. The change in leadership comes as VW battles “lackluster results” in the company’s mission to win over new buyers in America:
“In Kjell Gruner, we have brought on board an experienced expert who knows the market and customers very well,” said group chief financial officer Arno Antlitz.
Gruner, a former head of Porsche Cars North America, was most recently chief commercial officer of Rivian, which has a software joint venture with Volkswagen.
Since taking over the helm of Volkswagen two years ago, chief executive Oliver Blume has replaced several division heads with people he knows well from Porsche, which he also heads. Gernot Döllner, who last year took over premium brand Audi, and Peter Bosch, chief executive of software arm Cariad, both used to work at the sports car brand.
The management shake-up for the US, Mexican and Canadian markets comes as Volkswagen makes a renewed push to expand sales in North America to offset a sharp decline in sales in China.
The change in leadership comes as VW comes to terms with stagnating sales of its electric models. The ID4 has sold just 17,000 units so far this year, which is much lower than the 100,000 capacity of the Tennessee factory where it’s made. The ID Buzz has just launched and it’s hoped the retro bus will reinvigorate interest in VW, but it takes more than a brightly colored bus to create a world-beating car brand and VW knows that.
4th Gear: Stellantis Halts Italy Production Yet Again
Stellantis has been struggling to deal with slowing sales, a CEO that’s on the way out and a list of disgruntled dealers that goes on, and on, and on. Now, the Fiat and Jeep owner has a bunch of angry Italians to contend with too, as it’s just announced two new stoppages at plants it runs in Italy.
Stellantis will pause production at its Termoli engine plant and the Cassino auto factory, reports Automotive News. During the shutdowns, workers at the two facilities will be furloughed, as the site explains:
In two separate statements Nov. 20, Stellantis said it informed unions about a pause in production at the Termoli engine plant on Dec. 16-22 and at the Cassino auto factory on the day of Nov. 29. During the stoppages, workers will be furloughed.
The automaker, whose Italian brands include Fiat and Alfa Romeo, said it was determined to “ensure the continuity” of its Italian operations, but noted it was facing “a challenging path requiring difficult choices and offering no easy solutions.”
Stellantis is facing industry-wide challenges such as low demand for more expensive electric cars and competition from China. It is also grappling with bloated inventories that have led it to cut profit and cash-flow forecasts.
In Italy, it has repeatedly paused production this year, including at its historic Mirafiori plant in Turin, but in talks last week with the government and unions, it pledged not to close factories in the country or make mass redundancies.
Stelantis has already paused production at its Mirafiori plant twice this year. The facility in northern Italy produces the Fiat 500 EV as well as two models for Maserati.
These actions have irked lawmakers in Italy, who have repeatedly called on Strelltis to do more to revive Italy’s manufacturing industries. Now, the Italian government has tasked Stellantis with presenting a “convincing and sustainable” plan of investments that can prevent further work stoppages and a rejuvenation of the country’s auto industry. No biggie, then.
