It’s going to be a short work week as those of us here in the United States celebrate Thanksgiving on Thursday, and then hit the holiday Black Friday sales. It’s also a great time for automakers to announce setbacks and strategy reversals. Let’s get started!
A Cruise robo-taxi makes way for humans. Reuters/Elijah Nouvelage
GM takes the wheel at Cruise
Kyle Vogt stepped down Sunday as CEO of Cruise, the self-driving car company he co-founded in 2013. Vogt will land on his feet. The future for Cruise is uncertain.
Cruise will now have two Presidents. General Motors’ chief counsel, Craig Glidden, who will take control of the efforts to navigate Cruise out of robo-taxi regulation hell. Mo Elshenawy, formerly Cruise’s head of engineering, will become President and Chief Technology Officer.
Cruise’s board, controlled by GM, has hired outside lawyers and technology experts to evaluate the unit’s technology as part of an effort, in Cruise’s words, to “strengthen public trust.” Those efforts will face vigorous opposition from automated vehicle skeptics, including labor unions.
In 2021, Microsoft, GM, Honda and other investors put $2 billion into Cruise valuing the operation at $30 billion, Reuters reported at the time. GM has not released a current valuation for Cruise.
One day before he stepped aside, Vogt apologized to Cruise employees for the situation the company is in and said employees would be allowed to sell their non-public shares back to GM – reversing a decision last Thursday to cancel the share buyback.
Cruise has less than nine months of cash left. GM CEO Mary Barra told Cruise employees in an email Sunday that GM is “intensely focused on setting Cruise up for long-term success,” according to Reuters colleague Greg Bensinger.
An all-hands meeting at Cruise is scheduled for Monday at 1 p.m. Pacific time. How many hands will be pecking out messages to potential new employers is just one challenge Cruise’s new leaders will face.
Shares in Apple gadget assembler Foxconn’s new electric vehicle unit, Foxtron Vehicle Technologies stumbled out of the gate as they started trading Monday. Investors valued the operation at $2.7 billion.
Foxtron’s inauspicious debut underscores the new sobriety among investors in electric vehicle startups, compared with the heady days of 2020 and 2021.
“The EV market has been flooded by a red sea of price cuts by major players such as Tesla,” said an analyst at Mega International Securities, as reported by Reuters colleagues Ben Blanchard and Faith Hung.
Stellantis turns its deal-making strategy to Italy
Stellantis will intensify talks next month with the Italian government toward a deal that could secure regulatory relief and subsidies from Rome in return for Stellantis committing to build more vehicles in Italy.
Stellantis said it wants postponement or cancellation of tougher emissions rules under the proposed Euro 7 standard, sales subsidies for EVs and help with EV charging networks and energy costs.
CEO Carlos Tavares’ deal-making with the Italian government comes on the heels of bargaining with the United Auto Workers in the United States, where Stellantis appears to have played a deft hand of poker.
Ahead of the UAW bargaining, Stellantis closed a factory in Belvidere, Ill. That prompted state and federal officials to offer subsidies to save Belvidere’s jobs. Those subsidies will now help Stellantis build a mid-size pickup it has been planning for years, as well as a battery plant.
Stellantis also lined up several parts warehouse operations for shutdown by declining to renew leases for the buildings, the UAW’s top bargainer at Stellantis told members in a video.
That confronted the union with a choice of accepting the company’s plan to consolidate warehouse operations or lose more jobs, Boyer said. “Mopar was going to die on the vine, slowly but surely,” he said.
In the end, Stellantis got new, modern parts warehouses. The UAW got a commitment that all current Mopar employees could keep their jobs – or take a buyout. Win-win.
Hyundai and Kia don’t see an EV slowdown
Senior executives of Hyundai and Kia said they do not see the EV sales slowdown that rivals are blaming for decisions to pull back on capacity and new EV launches.
“If I had more capacity today, I could sell more cars,” Hyundai COO Jose Munoz told a conference ahead of the Los Angeles Auto Show.
This talk will not help the Detroit Three make the case to the Biden administration that slowing EV demand requires the government to back away from rules aimed at shifting the U.S. new vehicle market to two-thirds EVs by 2032.
Separately, U.S. regulators said they are investigating Hyundai and Kia’s recalls covering 6.4 million vehicles that could be at risk of fires caused by brake fluid leaks.
It’s official! The UAW has secured ratification of new contracts at GM, Ford and Stellantis North America that promise 25% base wage increases over 4 ½ years, and even more substantial raises for workers who had been stuck in lower-wage scale parts and warehouse jobs. The union put out official confirmation of the ratification wins Monday. UAW online vote trackers had flagged the votes last week.
Chargepoint shares slumped by 38% Friday after the company slashed its revenue forecast. Chief Executive Pasquale Romano is out, replaced by COO Rick Wilmer. Pressure from Tesla and slower-than-expected uptake of non-Tesla EVs are likely culprits.
Subaru will raise pay for its U.S. production workers, looking to get ahead of the United Auto Workers’ efforts to sign them up as members.
Tesla defeated a lawsuit accusing the company of monopolizing parts and repair service for its vehicles. The judge ruled that the plaintiffs did not show that Tesla owners were “unaware of the supposedly supracompetitive prices and exorbitant wait times” for service.