Stellantis ‘Starting To Come Apart’ As CEO Flies To Detroit To Salvage Sales
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1st Gear: The Wheels Are Coming Off At Stellantis
After hailing excellent sales and profits in 2023 despite global struggles and strike action here in America, Stellantis hasn’t been as fortunate so far in 2024. The automaker has seen sales flounder and profits fall, leading shareholders to even threaten legal action against the automaker. Now, the extent of the automaker’s concerns has become clear as CEO Carlos Tavares prepares to travel to Detroit to try and turn fortunes around for the Jeep owner.
Worries started to whirl following Stellantis’ latest financial results, which showed a massive sales drop of around 30 percent for key brands, such as Jeep. This was joined by warnings of falling profits for the automaker, which also owns Fiat, Dodge and Chrysler. Now, industry experts have warned that things are “starting to come apart” at the automaker, reports the Detroit Free Press:
“The rose is off the bloom as far as the Stellantis group goes,” John McElroy, host of “Autoline After Hours,” told the Free Press. “It looked brilliant up until the end of last year and now things are starting to come apart.”
McElroy pointed to the inventory issue as emblematic.
“Undoubtedly there were people who said we have to cut back production, and they were overruled, which I believe was for somebody to make their numbers,” McElroy said, noting that he’d love to know whether that decision was made “in Paris or Auburn Hills.”
“We don’t know for sure what’s been going on here,” he said. “The fact that they’ve lost so many top executives shows that it’s an unhappy situation. I’ve heard from people who work there that morale is bad, and it’s not a happy place to work.”
The company has lost a slew of executives in recent months, announced layoffs at sites across America and has even threatened to cut shifts at its Warren Truck Assembly north of Detroit. The latter has even sparked fears of strike action from the United Auto Workers union less than a year after its last major walkout at Stellantis and fellow Big Three automakers Ford and General Motors.
The worries haven’t gone unnoticed by Stellanits higher ups, and company boss Tavares is now reportedly planning an emergency trip to Detroit to try and bring about a turn in fortunes for Stellantis’ North American arm, reports Reuters. According to the site:
While Tavares typically visits the North American operations every four to six weeks according to the source and a second person, one of them added that the CEO’s visit this week during his summer break was meant to send a clear signal.
“He wanted to make clear he was handling it personally,” the source said. “North American operations are basically funding the rest of the group.”
On the agenda will be a new strategy for the North American branch of Stellantis, which Tavares recently said was “humbled” by its latest sales figures. The company boss said Stellantis fell victim to everything from high vehicle inventories, manufacturing issues and “a lack of sophistication,” reports Reuters.
2nd Gear: Tesla Faces 9 Percent Tariff On Its Chinese EVs
Governments around the world are clamping down on Chinese-made electric vehicles, which they fear are hitting competition across the auto industry thanks to enormous subsidies that the Chinese government offers native automakers. In response, the U.S. will impose an enormous tariff on any Chinese EV imported into the States and the European Union has its own tariffs incoming, which will hit American automaker Tesla.
Elon Musk’s electric car company currently imports certain models from its Chinese production facilities into Europe for sale. Under new guidance shared by the EU, those models will now be susceptible to a nine percent tariff imposed by the bloc, reports Bloomberg. The tariff marks a 50 percent reduction on the initial rate proposed by the EU, as Bloomberg reports:
The European Union said Tuesday it plans to introduce an additional 9% tariff on Teslas imported from China, as it notified automakers of its draft decision to move forward with definitive tariffs on electric vehicles shipped from the country.
The bloc disclosed its latest move to try to counter subsidies that Beijing provided to the industry, with officials saying they will continue to consult with manufacturers ahead of a member state vote on the tariffs due to kick in by November.
The proposed tariffs have been revised, with MG maker SAIC Motor Corp., Volvo Car AB parent Geely and BYD Co. each facing additional duties of 36.3%, 19.3% and 17%, respectively — all slightly lower than previously announced.
The tariff on Tesla cars imported from China is lower as Beijing reportedly hasn’t looked as favorably on foreign-owned automakers manufacturing in the region. As such, Tesla hasn’t been on the receiving end of the kind of subsidies that Geely and BYD could qualify for.
After the EU set the tariff amounts for imported EVs, all eyes will now be on China to see how it responds to the levies and whether it could mean higher import costs from automakers looking to export vehicles from Europe and the U.S.
3rd Gear: BMW Recalls 720,000 SUVs Over Fire Risk
After airbag recalls swept the industry and software issues hit Tesla, it’s now BMW’s time in the spotlight for a massive recall. The German automaker has been forced to issue a recall for more than 700,000 cars and SUVs over issues with the circuits on some cars that could spark fires.
More than 720,000 BMWs from 2012 to 2018 have been recalled, reports Car And Driver. The recall impacts 3- and 5-series cars as well as the X3 and X5 SUVs, which may have faulty seals that could cause a short circuit that – in some cases – could spark a fire on the cars. As Car And Driver reports:
The recall covers multiple cars and SUVs in BMW’s lineup, ranging from the 2012 to 2018 model years. The list of impacted models includes the Z4 convertible; certain 2-,3-,4-, and 5-series cars; and certain X1, X3, X4, and X5 SUVs.
Specifically, the problem with these BMWs involves the water pump’s electrical pump connector allowing water to drip from the positive crankcase ventilation system through the seal, potentially causing a short circuit. A short circuit could cause a fire in the engine bay, necessitating the recall. In the chronology report for the recall, BMW reports 18 events where either damage or complaints occurred due to the problem. Thankfully, BMW notes that it has not received any reports of injuries related to the issue.
BMW has already begun notifying dealers of the impending recall, and will begin informing owners of impacted models in early October. A fix for the issue has also already been identified, and will see owners bring their car to a dealership, which will then inspect and (if necessary) replace the water pump and plug connector for free. Dealers will also install a shield to divert dripping fluid away from the pump and plug connector.
Thankfully, the company has so far not received any reports of injuries as a result of the faulty seals.
If you are worried that your car might be affected by a recall, there are a few easy ways to check if it’s the case. First up, NHTSA has a super handy app that you can use to see if your vehicle is impacted by a recall, or you can head to the regulator’s website and plug your VIN into its recall search tool.
4th Gear: Waymo Doubles Ridership In Three Months
After the year started with torched self-driving cars in San Francisco and safety concerns for autonomous vehicle startups, it appears that paying customers haven’t been too put off by the bad press as Waymo has seen the number of paying riders using its services double in just three month.
The Alphabet-backed autonomous taxi service has reportedly hit more than 100,000 paying riders per week, reports Reuters. The figure represents riders across Arizona and California and is double what it achieved back in May, as Reuters reports:
Waymo, which has about 700 vehicles in its fleet, is the only U.S. firm operating uncrewed robotaxis that collect fares. The company opened its service to everyone in San Francisco in June without joining a waitlist while expanding its operations in metro Phoenix. This month, Waymo extended services to the San Francisco Peninsula and to certain parts of Los Angeles.
“People still think of autonomous vehicles as the faraway future, but for more and more people they’re now an everyday reality,” Chief Product Officer Saswat Panigrahi said in a statement, adding that Waymo’s expanded “deliberately” and by “optimizing costs”.
The rate of expansion for Waymo is significant as it is facing increasing pressure from competition across the autonomous taxi sector. Sure, GM-backed Cruise has been having a tough time of it, but American startup Zoox is also expanding and Chinese firm WeRide is also looking for growth across the U.S.
Then there’s the ever-present threat of a Tesla robotaxi, which is often paraded around by big boss Elon Musk, despite facing delays and now not being expected before october at the earliest.
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