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Car sales are poor, the UAW is unconvinced by Ford and Sergio Marchionne’s heirs received more money than GM CEO Mary Barra last year. All this and more The Morning Shift for May 1, 2020.
1st gear: Hyundai hasn’t hurt that much, but car sales in general are poor
Hyundai fell 39% in the United States in April compared to the same month last year, which is terrible but not as terrible as some expected, according to Automotive News. The company announced its April results on the heels of several other automakers on Friday. April is when things get based out, or so they think:
Overall, retail sales fell 28% and fleet deliveries fell 74%, said Hyundai.
As the pandemic significantly disrupted April demand in the industry, Hyundai executives attributed “the ingenuity of our dealers” and “robust customer support programs” for helping to mitigate the impact.
“Sales varied widely from region to region,” said Randy Parker, vice president of national sales for Hyundai Motor America. “We have focused on supporting sales in areas that have moved from showroom retail to digital and contactless retail and service.”
Toyota Motor Corp., America Honda, Kia, Mazda, Subaru and Volvo are also expected to report April sales later Friday or Monday, providing a broader picture of how the epidemic has disrupted the market.
The Detroit 3, Nissan Motor, Volkswagen Group, Daimler, BMW Group and other automakers are now reporting sales on a quarterly basis. Analysts said each company suffered a significantly lower April volume.
What is really striking is that:
The seasonally adjusted annualized sales rate is forecast to fall to 7.5 million to 7.7 million. It would be the lowest sales pace in more than 40 years – it reached 8.8 million in December 1981 during a double-dip recession, according to Cox. By comparison, during the Great Recession, the SARR reached a low of 9.05 million in February 2009.
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Annual car sales are expected to be just under 17 million by 2020 before all that.
2nd gear: BMW still plans to reopen in South Carolina
It all sounds dangerous and stupid when everything has to close due to a second epidemic, but BMW continues to move forward to reopen next week.
About 11,000 people work at the Spartanburg plant, which was closed on March 29. These workers will be greeted by various deep cleaning and safety measures that BMW implemented during the closure.
While the doors of the facilities were closed, the plant equipment was disinfected, the workstations were disinfected, the facilities were redesigned to improve social distancing and the preventive maintenance of the equipment was completed, officials said in a statement.
Temperature controls will also be added to protect employees from the spread of COVID-19, the release said.
Other efforts are being made to improve workplace safety, including modified seating for the cafeteria and offices, shifted lunch hours and extended cleaning practices, officials said.
In addition, any employee unable to maintain the mandate of 6 feet of social distance must wear a mask, according to the press release.
3rd gear: Sergio Marchionne’s heirs are doing very well
They got $ 23.5 million worth of Fiat Chrysler shares in 2019, according to Automotive News. That’s more than what GM CEO Mary Barra got, which was $ 21.6 million, and it was more than what FCA CEO, Mike Manley, which was $ 14.4 million. dollars.
Marchionne, former CEO of FCA, died in July 2018.
The shares were awarded “due to the exceeding of performance targets for the 2014-2018 performance period,” said the FCA’s annual report, which was filed with the United States Securities and Exchange Commission on 25 February.
The date of delivery of the shares was not indicated in the report, but even at the lowest price of FCA’s share in 2019, at 11.05 euros, they would have represented 21.56 million euros.
Marchionne’s heirs should receive even more money from the FCA.
The report says that other payments will be made “in accordance with the obligations set out in Mr. Marchionne’s contract, including his post-employment benefit of five times his base pay.”
4th gear: Ford says it’s ready to reopen but the UAW is skeptical
No restart date has been announced for the Big Three, largely because the UAW does not believe a restart at this time is safe.
Billions of dollars in revenue and profit depend on how quickly Ford and its American rivals can convince the UAW and Michigan Governor Gretchen Whitmer that it is safe to return to work. The UAW said that the beginning of May was too early to reopen and since then has not agreed on a date.
Without Michigan, the Detroit Three and other automakers operating in the United States cannot build vehicles. Ford executives have pointed out that the US auto sector accounts for 6% of US economic production.
“We really get clarity from our heads of government because we are ready,” said Jim Farley, chief operating officer of Ford during a conference call with reporters.
Farley added that it would be “absolutely” comfortable for his family to work in a Ford factory, given the steps the company has taken to keep employees safe.
UAW President Rory Gamble said the union is negotiating with Detroit automakers on the safe reopening of their US factories. Questions on the table include the types of protective equipment workers should have, the speed at which assembly lines should move, and the amount of testing to be done.
Farley should put his money where he is and put his family to work in a Ford factory. You can’t just say nonsense like that!
5th gear: the oil industry is sure that demand will come back and I’m afraid to agree
Gas prices are cheap and cheaper with an overabundance of oil, but when the economy picks up (and eventually picks up), you can expect demand for oil to come back as well.
It’s according to a column in the Financial Times wrote by an analyst at an oil and gas consulting firm, which would normally give me a break, but unfortunately I agree that this austere vision of the future is probably there:
While global consumption will fall 11 million barrels per day by this year, or 11% this year, from 100 million barrels per year last year, there is still a host of factors providing underlying support growth in demand for oil despite the pressure to act against the changing climate.
First, air transportation is expected to recover. The consumption of jet fuel, the petroleum product most affected by the pandemic as travel bans and blockages come into effect, will rebound once people come out of isolation. It may only take a few years, but current concerns will eventually disappear and the strong relationship between increased income and travel ambitions will return.
Meanwhile, road transport, which accounts for almost half of world oil consumption, will show resilience and could even benefit from the crisis. People are less likely to use public transit, since subways, buses and trains have been a major – if not the main – vector of the virus.
The low oil price environment in which we are going will also encourage car use, while reducing or even eliminating the fuel cost advantage of electric vehicles. Electrification will lose speed and internal combustion engines will continue to dominate, as policymakers are less willing to provide the necessary subsidies for electric cars in times of economic crisis. There will also be less pressure to push for better energy efficiency, as global CO2 emissions are expected to drop considerably in 2020.
Reverse: happy Help
Neutral: how are you?
Yesterday I ate a lot of food out of boredom: cold meats, canned soup, leftover breasts, some pesto pasta. In the evening, I drank vodka and danced alone. Things are going well!