Mercedes-Benz Is Making So Much Money Right Now
Photo: Mercedes-Benz
Mercedes-Benz says it’s doing pretty well despite everything going on in the world, Russia is sending less gas to Europe because of everything going on, and NHTSA is probing nearly 2 million vehicles from the Big Three. All that and more in The Morning Shift for Wednesday, July 27, 2022.
1st Gear: Mercedes is Doing Pretty, Pretty, Pretty Good
Mercedes-Benz says they are expecting a significant revenue rise and slightly higher earnings in 2022, despite the world nearly coming to an end on a daily basis. It all has to do with higher-than-ever vehicle prices and the company’s mix of models.
MB said it is raising its outlook after an 8 percent jump in adjusted earnings in the second quarter to $4.97 billion. It had previously said it only expected slightly higher revenues this year and earnings on par with 2021.
Mercedes also says it’s cut its gas consumption by 10 percent in Europe while maintaining full operations. From Automotive News:
The company said it could reduce its gas intake in Germany 50 percent if regional pooling took place. It said it had found a way to operate the paint shop in its Sindelfingen plant without gas in an emergency. The plant builds the high-end electric EQS, S-Class and Maybach models.
A worsening economic climate weighing on consumers are combining with the ongoing struggles to procure enough semiconductors for automakers. Ongoing pandemic lockdowns in China preventing people from buying cars are another threat.
Even so, Mercedes predicted healthy demand for its models during the second half with solid order books indicating demand continues to outstrip available cars.
The company is also working with several microchip-makers directly to make sure the chips keep flowing through the rest of the year.
2nd Gear: Russia is Cutting Gas Flow to Europe
Russia is delivering less gas to Europe as part of further escalations in the energy stand-off between Moscow and the European Union. It’s going to make it a lot harder and costlier for the E.U. to fill up storage ahead of the winter heating season.
Apparently, the capacity of the Nord Stream 1 pipeline, the major delivery route to Europe for Russian gas, has been cut to a fifth of its total capacity. It accounts for about a third of all Russian gas exported to Europe. The drop came just a week after the pipeline restarted following a scheduled 10-day maintenance break. From Reuters:
On Tuesday, EU countries approved a weakened emergency plan to curb gas demand after striking compromise deals to limit cuts for some countries, hoping lower consumption will ease the impact in case Moscow stops supplies altogether.
The plan highlights fears that countries will be unable to meet goals to refill storage and keep their citizens warm during the winter months and that Europe’s fragile economic growth may take another hit if gas will have to be rationed.
Royal Bank of Canada analysts said the plan could help Europe get through the winter provided gas flows from Russia are at 20-50% capacity, but warned against “complacency in the market European politicians have now solved the issue of Russian gas dependence.”
While Moscow has blamed various technical problems for the supply cuts, Brussels has accused Russia of using energy as a weapon to blackmail the bloc and retaliate for Western sanctions over its invasion of Ukraine.
Kremlin spokesman Dmitry Peskov said Gazprom was supplying as much gas to Europe as possible, adding that sanctions-driven technical issues with equipment were preventing it from exporting more.
Now, countries in Europe are scrambling to make up the difference in lost energy. Germany, the largest importer of Russian gas, may use nuclear power to avoid an electricity shortage. The country is now in Phase 2 of a three-stage emergency gas plan. The final phase would start once gas rationing cannot be avoided.
3rd Gear: A Couple Million Detroit-Three Cars Are Being Probed
U.S. safety regulators have opened five separate probes into the safety of about 1.9 million vehicles made by Ford, General Motors and Stellantis, according to Automotive News. The largest probe covers around 1.3 million Jeep Cherokees made between 2014 and 2020. Water may leak into the vehicles and cause the electronic parking brake to active and stop the cars while in motion. So far, the NHTSA has received 80 complaints.
The agency is also looking into 2016 Dodge Journeys, Jeep Compasses and Jeep Patriots after getting 127 complaints alleging crankshaft or camshaft sensor failures that are causing the engines to stall while driving. From Automotive News:
FCA US, now Stellantis, recalled certain Journey, Compass and Patriot vehicles manufactured between May 9 and July 15, 2016, for the problem in December 2016. NHTSA said vehicles similar to those identified in the recall, but not included in its scope, also may experience the alleged defect. The agency has opened a recall query into more than 289,000 vehicles for further assessment and to determine whether more vehicles should be recalled.
The agency also is investigating Chrysler Pacifica plug-in hybrid vehicles from the 2019-21 model years after receiving 40 complaints alleging a potential transmission malfunction that may cause a stall or loss of motive power. Most of the alleged incidents occurred at speeds greater than 25 mph and required the vehicle to be towed, according to NHTSA. The safety probe covers an estimated 21,348 vehicles.
In addition to this, the agency is launching a probe into the 2021 Ford Bronco. You can read more about that here. The NHTSA will also be investigating 2020-2021 Cadillac XT5s, XT6s and GMC Acadias after learning about rearview camera issues.
According to the complaints, the rearview camera screens are black or sometimes show a red triangle and a circle with a line through it. The investigation covers an estimated 190,151 vehicles.
This issue has so far led to one reported crash and 11 complaints to the agency.
4th Gear: UAW Embezzler Gets 57 Months in Prison
A former United Auto Workers official has been sentenced to 57 months in prison for embezzling more than $2 million from the union.
Timothy Edmunds pleaded guilty in March to embezzlement and money laundering while he served as the financial secretary and treasurer of UAW Local 412. The 54-year-old worked at the union from 2011 to 2020. From The Detroit News:
Edmunds of Madison Heights is the 17th defendant convicted in a years-long attack on corruption within the auto industry and one of the nation’s most influential unions. He was responsible for managing and investing money for Local 412, which represents around 2,600 workers.
Investigators found that Edmunds used union debit cards for personal purchases, cashed union checks into personal accounts and created false bank statements to conceal his systematic theft.
Edmunds took $2.1 million from the organization between 2015-21, and federal prosecutors said evidence showed that he used the money for gambling, cocaine, cars and firearms. Between 2018 and 2020 Edmunds spent $30,000 on a union debit card at Greektown Casino alone.
The 57-month (almost five year) sentence is not the only penalty Edmunds will be facing. He’ll also have to pay $1,963,740 in restitution to Local 412 as well as a $1 million fine.
This is the first criminal charge filed since a court-appointed corruption watchdog was installed to oversee reforms at the UAW.
5th Gear: A Strike is Causing Lufthansa to Cancel Over 1,000 Flights
Lufthansa had to cancel almost all of its flights from two of its hub airports as grounds-crew staff staged a walkout. It’s an issue that is only making flight disruptions worse as carriers around the world try to deal with increased fight demands.
The German company says that 678 flights were canned from Frankfurt Airport. That’s on top of 345 at its Munich hub that were cancelled on Wednesday. All in all, it’ll impact about 134,000 passengers, and additional delays and cancellations could be coming Thursday and Friday. From The Wall Street Journal:
The airline’s ground staff are striking until 6.a.m. local time Thursday over a wage dispute. German labor union Verdi is pressing for higher pay for about 20,000 workers, calling for a 9.5% pay increase—or a minimum of 350 euros, about $355, a month—to offset rising inflation and to compensate for higher workloads as the industry battles with staff shortages.
“The situation at airports is escalating,” Christine Behle, Verdi’s deputy chairwoman said. “They [workers] urgently need more money and they need relief—for themselves and for the passengers. The employer’s offer is not enough.”
Lufthansa has offered basic pay increases of €150 a month from July and a further €100 increase from the start of next year. It is also offering to increase the minimum wage from October and a 2% increase in compensation next year provided the company’s earnings are positive. In total, the airline said, its offer represents a 14.8% increase for lower paid workers scaling down to a 5.9% increase for workers on higher salaries.
The strikes are the latest in a series across the aviation industry—and across Europe more broadly—that have led to major travel delays and cancellations. Paris’s Charles de Gaulle airport has been battling with repeated strikes by workers in recent months as workers push for better pay, while airlines including Ryanair Holdings PLC—Europe’s biggest airline by passenger numbers—and discount rival easyJet PLC have been hit by walkouts by cabin crew.
Folks, it’s a bad time to be flying, no matter how you look at it. However, it’s a much worse time to be an airline worker, so I don’t blame them for what they’re doing at all.
Reverse: Jet!
On this day in 1949, the world’s first jet-propelled airliner, the British De Havilland Comet, made its maiden test-flight in England. If I have to tell you why that’s incredibly important, I don’t know why you’re reading this website. From History.com:
The Comet was the creation of English aircraft designer and aviation pioneer Sir Geoffrey de Havilland (1882-1965). De Havilland started out designing motorcycles and buses, but after seeing Wilbur Wright demonstrate an airplane in 1908, he decided to build one of his own. The Wright brothers had made their famous first flight at Kitty Hawk, North Carolina, in 1903. De Havilland successfully designed and piloted his first plane in 1910 and went on to work for English aircraft manufacturers before starting his own company in 1920. De Havilland Aircraft Company became a leader in the aviation industry, known for developing lighter engines and faster, more streamlined planes.
Neat!
Neutral: Suh Dude?
The heat wave over the East Coast has finally broken, and the vibes are immaculate. Go outside, see your buds, and have a lovely Wednesday.
