Warren Buffett's Firm Backing Out Of GM Stocks An ‘Ominous’ Sign
Good morning! It’s Thursday, November 16, 2023, 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.
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1st Gear: Warren Buffett Offloads GM Stock
Warren Buffet’s Berkshire Hathaway investment firm has been offloading an awful lot of shares recently. After selling even more of its stake in Chinese EV maker BYD, the firm has now offloaded millions of dollars worth of shares in General Motors.
The investment giant controlled $848 million worth of GM shares back in June, reports the Detroit Free Press. However, a regulatory filing shared earlier this week shows that Buffet’s firm now owned no shares in the U.S. automaker. As the Free Press reports:
Morningstar autos analyst David Whiston said he can only speculate on Berkshire’s reasons for dumping its stake in GM.
“Could be they saw a strike coming and even if they expected a short strike, higher labor costs were a certainty,” Whiston told the Detroit Free Press in an email. “That plus the stock being dead money for a while now could be reasons. They also could have better ideas and wanted to redeploy capital.”
However, other analysts aren’t so sure that it’s merely a sign of a “well-respected firm moving on” as Whiston puts it. Instead, Wall Street analyst Dan Ives warned that it was an “ominous sign” that trouble could be on horizon for the Chevrolet owner.
Following the automaker’s deal with the United Auto Workers union to secure wage increases and better benefits for its workers, Ives suggested that the higher costs now associated with building cars could pose “more headwinds” for GM. The analyst also suggested that uncertainty around the EV transition could have sparked Buffet’s sale.
Despite the negativity swirling around the deal, shares in General Motors ended the day at $28.20, up by $1.30.
2nd Gear: Toyota EVs To Run On Recycled Parts
The biggest questions surrounding our future filled with electric cars all circle around the batteries. How are we going to make enough, can we get enough components to make enough and what the heck do we do with the old, outdated ones when they reach the end of their lives? Well now Toyota has a deal up its sleeve that could answer a few of those conundrums, as it’s planning to make new batteries for its electric models out of components sourced from recycled EV cells.
Japanese automaker Toyota has signed an agreement with a company called Redwood Materials to purchase recycled battery materials, reports Automotive News. Toyota will use cathode active material and anode copper foil collected from recycled batteries at its new U.S. plant to create batteries for its future electric models. As Automotive News explains:
The Japanese automaker will use the material in batteries produced by Toyota Battery Manufacturing, North Carolina. The plant will start production in 2025 and is Toyota’s first automotive battery plant globally. It will make lithium ion batteries for hybrid and battery-electric vehicles. Toyota said it is spending $14 billion on the facility.
Redwood said it believes this is the first contract where an automaker provides batteries from its end-of-life hybrid vehicles to supply some of the metals for new EV batteries.
Redwood Materials hopes that its recycling facilities in the U.S. can help offer a domestic supply of the essential rare earth metals that are used to create EV batteries. From aging cells, it is able to collect compounds such as nickel, lithium and cobalt, which can then be used in new batteries that can be fitted to electric cars.
3rd Gear: UAW Ratifies Mack Trucks Contract
While the United Auto Worker union strike at General Motors, Ford and Stellantis has grabbed most of the headlines recently, the union has also been hard at work fighting for a new deal for Mack Trucks workers here in the U.S. Now, the union says its members have ratified a new contract bringing its 39-day strike to an end.
Workers at the Volvo-owned Mack Trucks plant walked off the job in October as it fought for pay rises and better working conditions, reports Reuters. After rejecting an earlier contract offer, UAW members have now ratified a deal bringing the walkout to an end. Reuters reports:
“After 39 days on strike, UAW members at Mack Trucks have voted by 93% to ratify their new contract with significant local improvements,” the union said in a post on messaging platform X, earlier known as Twitter.
Mack Trucks said the new contract guaranteed “significant wage growth,” and covered its employees at facilities in Pennsylvania, Maryland and Florida.
Details of the new agreement were not shared by the UAW or by Mack Trucks. However, the previously rejected offer would have given workers at the plant 19 percent raises, a $3,500 ratification bonus and improved retirement benefits.
4th Gear: The Vatican Pivots To EVs
Countries around the world are announcing measures that would one day ban gas powered cars and bring about a pivot to electrification and other zero-emission vehicles. It turns out that the tiny nation of the Vatican is no different and it’s currently ironing out an EV deal with Volkswagen.
The city state, which has an official population of around 800 people, has signed an agreement with Volkswagen to replace its entire car fleet with EVs by 2030, reports Reuters. Financial details of the deal haven’t been shared, but it will reportedly see the tiny nation switch to running electric VW and Skoda cars over the coming years. As Reuters reports:
It said the “partnership accord” with the Volkswagen Group (VOWG_p.DE) was one of the ways the 108-acre sovereign city-state aims to reach a long-term goal of becoming carbon neutral and relying exclusively on renewable energy.
The Vatican’s fleet of cars includes dozens of vehicles, most of them dark blue. A pool of drivers take senior Vatican officials to events in Rome and beyond. The fleet also includes many maintenance, gardening and delivery vehicles.
As well as acquiring electric cars for its fleet, the Vatican will also invest in the charging infrastructure across the state and its properties around Rome. The nation will build a network of electric charging stations across the state, which its employees will be able to use for their own private EVs in an attempt to encourage wider adoption.
