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Japanese Government Catching Blame for FCA-Renault Merger Talks Breakdown

Deal was unexpectedly scuttled on June 6.

by on Jun.21, 2019

FCA CEO Mike Manley pulled out of the proposed deal when the French government sought to delay it.

The Japanese government played a central role in the breakdown of merger talks between Fiat Chrysler Automobiles and Group Renault earlier this month, according to a report by the Bloomberg news service.

The agreement, proposed by FCA last month, was widely expected to win the approval of the Renault board at a meeting in Paris on June 6, but even as the two companies prepared a joint announcement, things unexpectedly fell apart. Sources close to the negotiations previously told TheDetroitBureau.com that Fiat Chrysler decided to withdraw its offer after the French government, Renault’s lead shareholder, called for a week’s delay.

The Last Word!

The new Bloomberg report fleshes out the details, indicating that French government officials were reacting to the “misgivings” of their Japanese counterparts who thought the merger “could harm Nissan,” Renault’s long-time Alliance partner.

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UAW, Faurecia Reach Deal to End Strike Michigan Plant

Workers hit pickets just after midnight.

by on Jun.21, 2019

Workers at Faurecia's plant in Saline, Michigan, walked off their jobs just after midnight. A deal has been reached ending the walkout.

The United Auto Workers and the French supplier Faurecia have reached a tentative agreement that ended a brief walkout at a critical parts plant in Saline, Michigan.

Brian Rothenberg, UAW director of communications, confirmed that a tentative settlement had been reached Friday morning. Members of UAW Local 892 in Saline had set up picket lines around the plant at 12:05 a.m. Friday after negotiators failed to reach an agreement by the deadline set earlier by the union.

Strike News!

Details of the pending agreement were not released, pending a ratification meeting for the Faurecia employees. The dispute, over wages and benefits, had been simmering for several weeks while both sides worked to find a formula that could settle the dispute. (more…)

French Government Blamed for Collapse of Fiat Chrysler – Renault Merger Plan

Government’s “cumulative demands and pressures” prove too much; FCA opts out rather than accepting further delays.

by on Jun.06, 2019

FCA CEO Mike Manley had hoped to create the world's third-largest automaker with Renault.

Less than two weeks after proposing a merger-of-equals with Renault that would have formed the world’s third-largest automaker, Fiat Chrysler Automobiles withdrew the offer late Wednesday citing government interference in the proposed deal.

“We went in different directions very rapidly,” said a source close to the ongoing negotiations, noting that only three hours earlier the two carmakers had been preparing to release a joint statement indicating that the Renault board had voted in favor of the proposal and would begin taking the necessary steps to complete a merger – a process expected to take 12 to 18 months.

Going into the negotiations, it was clear there would be some potential obstacles, notably finding a way to preserve Renault’s long-standing relationship with Japanese automakers Nissan and Mitsubishi. But, in the end, FCA formally pointed blame for the collapse of the deal at the French government that is Renault’s largest shareholder.

Breaking News!

“It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” FCA said in a statement.

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Trump Trade Wars Could “Backfire,” Hitting American Jobs

GM supplier czar urges “calm” as deadline on Mexican tariffs approaches.

by on Jun.05, 2019

The looming tariffs on products from Mexico ordered by President Trump has auto executives concerned.

With less than a week left before President Donald Trump’s proposed new tariffs on Mexican imports go into effect, auto industry officials are worrying about the potential impact on prices, sales, production and jobs, with at least one industry veteran warning such a move could “backfire” and worsen the current market downturn.

The proposed 5% tariffs, which would cover everything from agricultural products consumer electronics – as well as around $100 billion in cars and car parts – will go into effect on June 10, and then steadily escalate before reaching 25% by October. But there is growing opposition coming from Republican leaders in Congress, Senate Majority Leader Mitch McConnell this week said, “There is not much support in my conference for tariffs, that’s for sure.”

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About 2.6 million Mexican-made vehicles worth around $93 billion were shipped to the U.S. last year, with nearly $10 billion in car parts also crossing the border. Since some of those parts show up in almost all vehicles assembled in the States, the tariffs would have an impact on virtually every American car buyer. But the potential is there for U.S. auto workers to also feel the brunt. (more…)

Auto Stocks Taking a Beating as Industry Prepares for Mexican Tariffs

Domestic, import automakers alike hammered by Trump plan.

by on Jun.03, 2019

GM imports more vehicles from Mexico than any other automakers, including the Chevy Silverado.

It’s a bear market, at least when it comes to automotive stocks, with Pres. Donald Trump’s planned tariffs on Mexican imports set to go into effect a week from today.

Last Friday, the president tweeted that he was prepared to enact a new 5% tariff on Mexican goods in an effort to pressure that country to stem illegal immigration across the southern border. Barring any resolution, Trump said that would continue to climb to 25% by October 1.

Beyond the Headlines!

Nearly a dozen manufacturers would quickly be forced to either raise prices on vehicles imported from Mexico and risk weakening sales, or absorb the tariffs and take a hit to their bottom lines. But even vehicles produced in the U.S. would face tariffs on imported parts and components, such as engines, wiring harnesses and body and interior trim, according to industry analysts.

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Lexus Lifts the Covers on Updates RX Line in Bid to Retain CUV Dominance

More aggressive styling, more features – but there also are plenty of new competitors.

by on May.30, 2019

Lexus VP Lisa Materazzo shows off the 2020 RX 350 F Sport during a CA event Wednesday.

For countless American family buyers, the Lexus RX has served as the luxurious alternative to a minivan. Almost from the moment it was introduced, 22 years ago, it has dominated the high-line midsize crossover market, and that’s a position Lexus is determined to retain as what was once a small niche has become one of the U.S. luxury market’s largest segments.

Four years after launching the fourth-generation RX, Lexus is giving the CUV a significant enough “refresh” to stage a roll-out event for journalists in both the U.S. and China on Wednesday night. What they got to see was a vehicle with more distinctive styling, more high-tech features and more advanced safety gear as a standard feature – but with the 2020 Lexus RX facing significantly more competition than ever before, the question is whether it can maintain its traditional momentum.

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Part of the challenge is that Lexus has, since it first launched in 1989, been a Baby Boomer brand, and the RX line is one of the examples of that, said Rebecca Lindland, an automotive analyst with RebeccaDrives. “The RX,” she added. “is no longer aspirational” for the subsequent generations “just starting their families.”

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What Next for Fiat Chrysler and Renault?

Deal faces numerous obstacles; could take 18 months to complete.

by on May.28, 2019

Jeeps, like this new Gladiator pickup, are one of the potential prizes in the proposed merger.

The French government is weighing in on the proposed Fiat Chrysler-Renault merger plan and underscores the potential challenges the automotive merger faces before it can be completed.

Following four months of talks, FCA on Monday proposed a merger-of-equals with the larger of France’s two automakers, a plan expected to take up to 18 months to complete. Before that can happen, however, an assortment of obstacles will need to be overcome, among other things winning the blessings of the French government that holds a 15% stake in Renault.

Breaking News!

French Finance Minister Bruno le Maire told RTL radio on Tuesday that he will demand “four guarantees” from Renault before approving any merger, starting with “the preservation of industrial jobs and sites in France.”

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FCA Lays Out Plan for “Transformative Merger” with Groupe Renault

Move would create 3rd-largest global automaker; 1st if factoring in Alliance partners Nissan, Mitsubishi.

by on May.27, 2019

Fiat Chrysler Chief Executive Officer Mike Manley originally approached Renault over much more limited plans, such as platform sharing.

After extensive, secret negotiations, Fiat Chrysler Automobiles has laid out a plan to merge with the largest of France’s two automakers, Groupe Renault, a move that would create the world’s third-largest motor vehicle manufacturer, with annual sales of 8.7 million vehicles – and a clear number one if factoring in the volumes of Renault’s current Alliance partners, Nissan and Mitsubishi.

Both FCA and Renault have openly sought new partnerships over the past decade to both expand their geographic bases and fill in gaps in their product and technology portfolios. If, as expected, the proposed deal is completed, the new organization will have a more well-rounded global presence, with FCA bringing to the table its Jeep SUV and Ram pickup brands. Renault, among other things, provides a growing range of electric vehicles and an aggressive autonomous vehicle develop program.

Breaking News!

Over the past decade, FCA has repeatedly said it was looking for a partner, with names like General Motors and Volkswagen on its list. But while those were seen as unsolicited proposals, talks between the Italian-American automaker and Renault have been underway since early this year. And though the French automaker early Monday said that its “Board of Directors will meet this morning to discuss this proposal,” it is expected that this is largely a formality.

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Could Tesla’s High-Flying Ride on Wall Street be Ready to Come Crashing Down?

Shares head towards $200 for first time since 2016, as key analyst warns $10 is possible.

by on May.21, 2019

Tesla CEO Elon Musk has plenty to worry about as investors turn bearish on its stock.

After sliding to its lowest level since December 2016 on five days of losses, Tesla stock fell to its lowest level in nearly 30 months, at just above $200 — and one key analyst, Morgan Stanley’s Adam Jonas, warns Tesla could see the stock plunge to just $10 a share.

Not much has gone right for the California automotive upstart in recent months, starting with word that first-quarter sales had fallen well short of expectations. Its unexpectedly deep, $702 million loss for the quarter didn’t help. And the situation only grew worse when CEO Elon Musk last week ordered a “hardcore” belt-tightening covering “literally every payment that leaves our bank account.” Then, the National Transportation Safety Board weighed in, blaming a fatal March 2018 crash on Tesla’s much-ballyhooed Autopilot system.

Breaking News!

Even where the automaker appeared to pull off a coup, topping substantially what it had expected to raise with last month’s combination of stock and debt offerings, Musk told employees in an e-mail, that the $2.7 billion Tesla brought in “actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

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“Hardcore” Belt-Tightening a Must, Says Tesla’s Musk

The “only way for Tesla to become financially sustainable.”

by on May.17, 2019

Tesla's Elon Musk has ordered employees to rein in spending on virtually everything.

Tesla will need to engage in some “hardcore” cost-cutting, CEO Elon Musk told employees in an e-mail late Thursday, a move that comes in the wake of an unexpectedly severe first-quarter loss.

The automaker earlier this month was able to raise $2.7 billion through a combination of stock and debt offerings, but investors have become increasingly wary of the challenges that face the automaker – Tesla facing substantial debt repayments on top of the costs involved in the development of an array of new products and a new plant in China.

Breaking News!

The latest cash infusion, according to Musk, will only let it go for another 10 months without getting back into the black, he wrote, which “is why, going forward, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves out bank account must (be) reviewed.”

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