Ford wants money for government recovery similar to clunkers to boost car sales

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Illustration of an article titled Ford wants money for government incentive similar to that of clunkers to boost car sales

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Could Cash for Clunkers come back? Automakers are ramping up production of medical equipment, auto sales are declining, and more people in the industry have died from the coronavirus. That and more The Morning Shift for April 3, 2020.

1st gear: Ford wants money for government recovery similar to clunkers to boost car sales

The economic collapse caused by the global pandemic coronavirus has plunged the auto industry into a crisis. Sales fell sharply due to lack of demand as people stop driving and feel uncertain about their economic future. Because the production is stopped because the workers of the assembly line stay at home to avoid spreading the virus and a certain number of car manufacturers dismiss and / or reduce the wages of their workers to stay afloat.

When vehicle production can restart, and people get their jobs back and start to move from a lonely life to a normal life of automobility, Ford is going to want a government program to boost car sales. It’s according to a Bloomberg Interview with Ford’s vice president of marketing, sales and service for the United States, Mark LaNeve, who told the news site:

“We think that some level of stimulus somewhere on the other side would not only help the auto industry and our dealerships, which represent a huge part of our global economy, but would also help customers … We are in discussions on this which would be most appropriate. ”

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LaNeve mentions Cash For Clunkers, also known as the “Car Allowance Rebate System” as a potential model on which to base this stimulus. Cash for Clunkers, you may remember, implied that the government was offering consumers big discounts on new and more efficient cars, if those customers returned old, inefficient cars for disposal. From Bloomberg:

These discussions are internal to Ford at the moment, but should ultimately involve the federal government, LaNeve said a day after the automakers announced their slowest monthly rate of sales in the United States. a decade. A model envisaged is the 2009 “money for clunkersThis program helped boost auto sales in the aftermath of the global financial crisis by encouraging drivers to donate an old car in exchange for thousands of dollars to buy a new one.

“The money for the clunkers was very effective at that time,” said LaNeve. “It would be nice to think we could have something as effective for 2020 when we come out because it was a great program.”

Car and driver contacted a Ford representative, who had this to say on the subject:

Ford spokesperson contacted by Car and driver, while avoiding naming a specific type of program, said the automaker “encouraging Congress to explore a variety of ways to stimulate job creation, increase demand, support customers and ensure long-term stability of the entire automotive ecosystem ”. The

Whether Cash For Clunkers was really an “excellent program,” as LaNeve said to Bloomberg, is up for debate and depends on who you ask. Some criticized the program for simply “advancing” the sales of cars that were going to happen anyway, some criticized the effects that the withdrawal of old cheap cars from the market had on the working class, many car enthusiasts disparage the loss of conventional iron, some have criticized the overall environmental impact of the program and still others consider it too costly. There are also many studies that show both environment and economic advantages of the program as well, but we will not go into these details now. Instead, we will focus on the fact that a number of players in the US economy are considering the return of the program.

Here’s what U.S. representative Debbie Dingell said about the return of a Cash for Clunkers-style program according to Bloomberg:

“This is an idea with many other ideas,” she said. “We work with the entire ecosystem of automakers, workers, their unions, suppliers, dealers and consumers. “

The story also cites an analyst from Morgan Stanley, who describes why a stimulus is so important to the auto industry:

The industry has sold more than 17 million cars and trucks last five years

“Without specific stimulus to the automotive industry, we are ready for the right side of the recovery” v “to be as low as 11 million or 12 million units for a while,” wrote Adam Jonas, analyst at Morgan Stanley, in a report. Monday.

2nd gear: Car manufacturers increase production of medical supplies

Automakers have worked hard, using their manufacturing expertise to reduce the shortage of masks and ventilators that hospitals around the world need so badly. We explained how GM plans to manufacture 10,000 fans per month by summer, we watched The interesting configuration of Ford respirator that uses a seat cooler fan motor, more FCA announced plans to manufacture 1 million masks per month, Lamborghini also manufactures masks, and Honda produces face shields. The list goes on.

This is a tremendous combined effort from the automotive industry, and we continue to learn more and more every day about what the automakers are doing to help. For example, FCA announced today that he is working with an Italian company that manufactures medical equipment to increase the production of solenoid valves in ventilators, which are needed to help some people affected by COVID-19 breathing. From FCA:

FCA, with the support of the holding company Exor and Ferrari, has joined forces with the Siare Engineering International group located near Bologna, Italy, to provide additional resources and know-how to help intensify its response to the crisis. For more than 45 years, Siare has been a specialist in the design and production of medical electrical equipment for export to customers around the world.

The FCA Manufacturing Engineering team working in the Group’s factory in Cento, Italy – where high performance motors are produced for the world market – worked quickly to produce the first group of solenoid valves, which are the beating “heart” fans we urgently need. by hospitals in Italy and other countries.

A team of around 20 FCA specialists, in collaboration with Siare technicians, analyzed the feed flow and the assembly process of the Cento plant’s solenoid valves, in addition to solutions to increase production on the Siare site with the integration of solenoid valves produced by FCA.

According to the press release, the increase in the supply of solenoid valves should allow Siare to reduce the production time of the ventilator by “30 to 50%”, according to the Italian manufacturer of medical equipment.

3rd gear: Eighth FCA employee dies of COVID-19 and fourth Ford employee dies

A week ago, we learned via Automotive news that a fourth unionized FCA employee died as a result of COVID-19. These deaths are in addition to the death of a non-union employee working at the FCA engineering headquarters in Auburn Hills. Now, seven days later, the number of confirmed deaths has gone from five to eight, according to Detroit Free Press, who is writing:

A Fiat Chrysler Automobiles employee diagnosed with the new coronavirus who worked at the MOPAR national spare parts distribution center in the Center Line packaging department has died, the UAW confirmed on Thursday.

This was the second death of a person who worked there, and the eighth FCA worker publicly confirmed his death after being diagnosed with highly contagious respiratory illness.

The Detroit Free Press decomposes all death confirmations for the UAW COVID-19 since March 22, showing eight FCA employees and four Ford workers:

  • FCA employee of the Sterling Heights assembly plant
  • FCA employee at Kokomo transmission plant in Indiana
  • Two Warren Truck FCA employees
  • FCA employee of FCA Transport in Sterling Heights
  • Two FCA employees from the MOPAR parts distribution center at Center Line
  • A non-union FCA employee based at the Warren Tech Center and working at the company’s headquarters in Auburn Hills
  • Ford worker in the skilled trades at the Ford Data Center in Dearborn
  • A Ford employee from Dearborn DIversified Manufacturing Plant in Dearborn
  • Dearborn Stamping Ford Worker
  • A Ford worker from Michigan Assembly in Wayne

Automotive News keeps an update listing COVID-19 fatalities in the automotive industry.

4th gear: Ford suspends manufacturing in Europe until May

The automakers had planned to resume production of vehicles in some factories from April. Ford, for example, had set April 14 as the target date for “several key US factories,” but a few days ago decided to “[postpone] start dates, which will be announced later. ” GM, which aimed to boost production before early April, production suspended indefinitely.

Now by Reuters, we learn that the operations of the Ford plant in Europe will remain deactivated until May. From the news site:

Ford Motor Co (F.N) extended the temporary suspension of vehicle and engine production at most of its European manufacturing sites until Friday until May 4.

“Ford’s plans to restart production are highly dependent on the pandemic situation in the coming weeks, national restrictions in effect at the time, supplier constraints and the ability of our dealer network to function,” said said the company in a press release.

May is far away. Go it’s long without producing vehicles is a big problem.

5th gear: Here’s a look at GM’s first quarter sales in China. It’s dark

We have examined US auto sales in the first quarter earlier this weekand they were downright terrible. It’s not very different in China, like Reuters points out:

General Motors Co (GM.N), vehicle sales in China fell 43.3% in the first three months of 2020 compared to the same period last year, the company announced on Friday, as the coronavirus pandemic reduced demand in the world’s largest automotive market.

The pandemic has killed more than 3,300 people in China, the world’s second largest economy, and has forced the government to lock down parts of the country to contain the spread. Travel restrictions contributed to a 79% drop in overall auto sales in February after a 19% drop in January.

History notes that GM dealerships use “unusual advertising campaigns,” including a “makeup-promoting personality to tout car leasing.”

Reverse: 2006: General Motors sells its financing arm to GMAC as the company struggles to stay afloat

In trouble, General Motors sells its financing arm (which will later become Ally Financial) to Cerberus (the company that bought Chrysler – which went bankrupt soon after – to DaimlerChrysler in 2007). Of CNN:

General Motors finally announced on Monday an agreement to sell a majority stake in GMAC as part of an agreement to raise funds and let its profitable finance subsidiary get rid of its unwanted bond status.

The deal will bring troubled GM approximately $ 14 billion over time, including the purchase price of $ 7.4 billion and a distribution of $ 2.7 billion from GMAC itself. The buyer is a group led by a hedge fund called Cerberus Capital Management and the Private Equity branch of Citigroup.

Neutral: Cash For Clunkers: Do you want him back?

If yes, why? If not, what are the things you are trying to avoid?

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