Stellantis says Canada is not sticking to its end of the bargain

Canadian battery plant Stellantis is up in the air Stellantis also needs to clean up its facilities in Europe and Hyundai still isn’t making the one car we all hoped it would. All that and more in this edition of morning shift For Monday, May 15, 2023.

First gear: They’ll have what Volkswagen has

Last year, Stellantis and LG Energy Solution announced a plan to build a battery factory in Ottawa. The facility was to receive “undisclosed contributions from federal and provincial governments,” according to Reuters, and at the time was heralded as the largest investment ever made in Canada’s auto industry. As part of the deal, LG was investing nearly $1.5 billion of its own money. However, all of that now appears to be in jeopardy, because Stellantis has reportedly decided he deserves more from the government. from Reuters a report:

“As of today, the Canadian government has not delivered what was agreed upon, and therefore Stellantis and LG Energy Solution will immediately begin implementing their contingency plans,” Stellantis said in a brief emailed statement, without elaborating.

The real problem here may be Volkswagen. See, Volkswagen got a very generous investment from Canada this year for its own factory, worth C$13.2 million ($9.77 billion). This was apparently even sweeter than what the government promised Stellantis in 2022, making the house of mismatched brands (and pocket) jealous. The Reuters report continues:

The Toronto Star reported earlier Friday, citing unnamed sources, that Stellantis is threatening to pull the plug on the battery factory unless the deal with the government is improved to the level Volkswagen received this year.

The Star said Stellantis began seeking a rich deal in Canada shortly after the US Inflation Reduction Act, which provides $369 billion in subsidies for electric cars and other clean technology, passed law last year.

Canada’s deal with Volkswagen for a massive battery factory, announced this year, is the largest single investment ever in the country’s electric vehicle supply chain.

The federal government has committed up to C$13.2 billion in manufacturing tax credits through 2032, while Europe’s largest automaker is investing up to C$7 billion to build the St. Thomas, Ontario plant.

It’s unclear what Stellantis’ “contingency plans” are, but they seem to involve the company packing up its toys and moving its future factory elsewhere, possibly south of the border. The Canadian government shouldn’t worry about that; It’s not hard to find demand for new auto manufacturing facilities in North America these days.

Gear two: Stellantis dirty plants

We now turn to Stellantis’ Pomigliano d’Arco factory outside Naples, where the new Alfa Romeo Tonale and Fiat Panda. Some factory workers were suspended from work there for two hours on Friday to mark three days of protest against unsanitary conditions. from bloomberg:

“The plant is dirty and the toilets stink” [Italian Federation of Metalworkers automotive coordinator Simone] Marinelli He said. “Work clothes are missing – some workers have to wait months to replace old and worn clothes.”

Stellantis said it rejected accusations of a lack of concern for working conditions, according to an Italy-based spokesperson. He said that the company always operates within the framework of labor contracts and respect for its employees, taking into account the competitive environment of the auto industry.

Unfortunately, this “respect for staff” seems to be a trend across Stellantis’ European facilities:

Stellantis CEO Carlos Tavares is known to have left no stone unturned to find cost savings with a strategy that supports profits soaring to record levels. Concern about facility maintenance due to cutbacks at Pomigliano — where less than half of the workers making pandas took part in Friday’s protests — has not insulated employees at other factories as well as pressed management to improve conditions.

Christine Verasamy, who heads the carmaker’s French CFDT trade union, one of the country’s largest, said manufacturing sites in France do not receive adequate investment in their maintenance.

“Often there are clogged toilets, missing soap, or grass that isn’t cut,” she said in a phone interview. Ventilation devices are missing in summer and it can suffocate in factories.

The Stellants finished 2022 with profits of $17.9 billion. An increase of 26 percent year on year That outpaced GM’s growth over those same 12 months. It definitely beat Ford, which Lost $2 billion. Buy the damn soap.

Third gear: Not Hyundai’s vision

We all love N Vision 74Cyberpunk Hyundai Hydrogen-powered supercar concept. “Love” may actually be a very modest description of how many car enthusiasts feel, which is why I am disappointed when the latest from carscopeswhich he recorded after some rumors otherwise Vision 74 is still not destined for series production:

“We are aware of media speculation regarding potential commercial production of the N Vision 74 rolling mill development model,” Hyundai spokesperson Derek Joyce told Carscoops after speaking to the company’s Korean brass. “However, we currently have no plan to put the model into commercial production.”

Hyundai was forced to deny the rumor after a report by Korean outlet Money Today. Earlier this week, the outlet claimed that the brand was preparing to host something called “Pony Day” at its design studio in Seoul on May 27. […]

Joyce confirmed that the port was incorrect. His comments follow similar denials reported by Korea’s Wikitree, which quoted the automaker as saying, “There is no plan to mass-produce the Pony Coupe, and there is no plan for a Pony Day event.”

It looks like this mysterious Pony Coupe might actually just be a new concept inspired by the Giorgetto Giugiaro-designed Hyundai Pony, the brand’s first mass-produced car. Oddly enough, Hyundai actually did such a one-off in 2021, called Pony Heritage Series. The heritage version was an EV restaurant, however, maybe this new venture is a little more original. Whatever it is, it is no Produced by N Vision 74 So I’m Going Back to Sleep. Wake me up when that changes.

Fourth gear: Ford Cuts jobs in China

The Blue Oval is said to have cut as many as 1,300 jobs in China, according to the report bloomberg Taken from regional business publication Daily economic news on monday:

Ford’s wholesale sales in China fell below half a million units for the first time in a decade in 2022, continuing the slide since 2016, when the US automaker shipped 1.27 million vehicles and had a market share of 4.6%. That share fell to 2.1% last year, as Chinese consumers increasingly embrace electric cars made by companies like Tesla Inc. and local players such as BYD Co.

“Our costs are not competitive, and we work internally and with our partners to reduce costs across the board,” a Ford spokeswoman wrote in an email response to Bloomberg News. “We can only win with an agile and agile enterprise. These measures are essential for us to build a healthier and more sustainable business in China.”

It did not specify how many jobs would be eliminated or provide a time frame.

It is the only electric vehicle that Ford sells in China Mustang Mac E, which does not exactly take off there. However, this isn’t a phenomenon that Ford is facing alone, as we’ll discuss in our final gear for the day…

5th Gear: China Price War Update

…which is that the race to the bottom of new-car prices in China hasn’t helped anyone sell more cars. Earnings roll industrywide—unless you’re BYD, anyway—and domestic factories involved in joint ventures with foreign companies are hardest hit. Economists are getting very nervous. From Bloomberg again, this time sponsorship Auto News:

A price war and swelled investment in the transition to electric vehicles fueled growth. Of the 10 companies that reported profits in the quarter, only three posted an increase. That’s less than four in 2022, all in 2021. Again, BYD was an outlier, reporting a 410 percent increase in profits, while Changan Automobile’s profits were up 54 percent.

The dilemma facing all legacy automakers, not just the Chinese, is that gasoline cars currently bring more profits and better profit margins. By selling an increasing number of electric cars, they’re actually making less money, according to [Minghsun Lee, head of greater China auto research at Bank of America Corp].

“But if they want to survive, they have to embrace EVs or they will disappear,” he said He said. “So they have to choose. All over the world, traditional car companies would like to make more sales of electric vehicles, but profitability will be worse.”

If we go back to the Mach-E example, remember this Ford takes a shower every time it sells one. However, the electric Stang was one of 695 passenger car models to see a sticker drop since the start of 2023. Consumers seem content to wait. the next price drop, because the market has taught them that there is always another coming down from the pike. Mingchun Li, the Bank of America analyst quoted in the article, summed it all up succinctly in relation to Bloomberg:

Li expects wholesale passenger car sales to remain flat for 2023, with a slight decline in domestic demand offset by growth in exports, as Chinese automakers eye growth. The market is so crowded with dozens of electric and conventional vehicle makers, he said, that no major player has come out yet.

“There are a lot of companies and everyone wants to survive,” he said.

Back: Season of Quotas

On this day in 1942—81 years ago—17 states began enforcing mandatory gasoline rationing to aid the war effort. By the end of the year, this was the policy in 48 states. There was a temporary speed limit of 35 mph to reduce unnecessary fuel burn. Tiny sacrifices of personal liberties to serve the common good, brought to you by the same country that cannot wear a damn mask. from History.com: