GM and Ford are almost through making ventilators, the UAW is mad, and new Chevy Bolts. All that and more in The Morning Shift for August 26, 2020.
1st Gear: The Bolt EUV Is Coming
Chevy teased moving images of the Bolt EUV and facelifted Bolt today. Said moving images show the Bolt transforming into Bolt EUV:
These Big Bolts will be the first Chevy cars to get Super Cruise, the company also announced, and will go into production next year to be sold as model year 2022 vehicles. (Clarification: Chevy only confirmed that the Bolt EUV will get Super Cruise, not the Bolt EV as well, apologies if this was unclear initially!) The Bolt EUV is pretty much Chevy’s response to Tesla’s Model Y, which means that it will probably be priced somewhere in the $40K+ range, though this car will have to be... more exciting than the current Bolt to really turn many people’s heads who might otherwise be giving their money to Tesla.
It’s all on Chevy to prove it is capable of that, or even capable of generating the excitement Ford did with the Mustang Mach-E.
2nd Gear: GM Is Using White-Collar Workers On Assembly Lines And The UAW Isn’t Happy
Every automaker has been struggling with higher-than-normal absentee rates because of the coronavirus pandemic, including GM. GM has responded by sending salaried workers to the factory floor at its plant outside St. Louis, though the UAW is arguing that that violates their union contract.
From The Wall Street Journal:
The Detroit auto maker has asked white-collared employees to voluntarily fill in on jobs that are normally staffed by unionized workers, while it works to make up for production lost this spring during a nearly two-month factory shutdown, a company spokesman said Tuesday.
The United Auto Workers union, which represents 3,800 hourly employees at the Wentzville, Mo., factory, has pushed back against the move, arguing that it violates the company’s labor contract requiring assembly-line jobs be filled only by union members. A UAW spokesman said the union’s local chapter has filed a grievance with GM.
GM said in a statement that it believes its actions are necessary and appropriate given the challenges of operating during a pandemic.
[...]
The white-collar employees working at the pickup-truck plant are intended to be there only temporarily to help GM meet stronger-than-expected demand for the models it builds there, the GM spokesman said.
The company has unionized workers it expects to transfer to the Missouri plant from other factories, as well as temporary workers lined up to fill vacancies, but it needs time to train those people, the spokesman said.
At this point, the company doesn’t know how long it will need the salaried workers to fill in, the spokesman said, adding that the situation at the Missouri factory was a special case.
It’s funny that whenever something is working in management’s favor it’s always just a one-time “special case” situation.
3rd Gear: GM And Ford Are Close To Being Done Making Ventilators
Remember when this was a whole to-do? Well, it’s almost over now. A huge portion of these never even got used anyway and instead were stuffed into federal stockpiles.
Reuters reports:
The government currently has 108,000 ventilators in its medical equipment stockpile, and 12,000 deployed at U.S. hospitals, the U.S. Health and Human Services department said Tuesday.
GM and medical equipment maker Ventec Life Systems are in the “home stretch” toward completing a contract to deliver 30,000 critical care ventilators by the end of August under a $489 million contract with the federal government, the automaker said.
GM and Ventec have already delivered more than 20,000 machines, GM spokesman Jim Cain said.
Ford has assembled about 47,000 of the 50,000 ventilators it agreed to supply to partner General Electric Co., Ford spokeswoman Rachel McCleery said. GE has a $336 million contract with the government.
HHS said it has received more than 69,000 ventilators assembled by GM, Ford and their partners, and “both of these delivery schedules are nearly complete.”
This has been the federal government’s coronavirus response in a nutshell: begrudgingly ordering up a half-baked solution it didn’t even end up using all that much.
4th Gear: Honda Settles For $85 Million Over Takata Airbags
The settlement is with a host of U.S. states that had been investigating the company over its use of the airbags, which have been tied to 25 deaths globally and tens of millions of recalls from a slew of automakers including Honda. Honda will pay $85 million but did not admit wrongdoing.
From Reuters:
In the settlement announced Tuesday, American Honda Motor Co and Honda of America agreed to upgrade their product safety procedures related to frontal airbags, including to reduce the risk that their inflators could rupture.
The Honda affiliates agreed to the consent order without admitting wrongdoing and to avoid the cost of further litigation, the automaker said. Court approval is required.
Honda confirmed it had reached civil settlements with 46 U.S. states, Washington, D.C. and three U.S. territories over the matter.
5th Gear: Tesla May Or May Not Get Into The S&P 500
The company has qualified for inclusion into the S&P 500 by traditional benchmarks but at least one analyst thinks that that might not be enough. That’s because of how the company counts its profits and revenues.
From Bloomberg:
Specifically, Tesla would not have made money on a generally accepted accounting principles basis the last several quarters without the sale of regulatory credits to carmakers that need help complying with toughening emissions standards around the world.
In the first half of this year, the company booked $782 million of revenue from the sale of those credits, which are pretty much all profit, according to Nicholas Colas, DataTrek’s co-founder. That compares with $220 million posted in GAAP net income.
“This puts the S&P committee in charge of adding names to the 500 in a real bind, because while to the letter of their ‘law’ Tesla qualifies for inclusion this is purely due to regulatory arbitrage — not fundamental profitability from designing, manufacturing and selling cars,” wrote Colas, who in the 1990s spent nearly a decade as an equity auto analyst at First Boston.
This has been the refrain of Tesla skeptics for awhile now, so it’ll be interesting to see if even given the regulatory credit sales Tesla has done enough to be listed in the index.
Reverse: Nukes
Neutral: How Are You?
Easily the most shameful thing I’ve done in the pandemic is to get really into wine. My drinking history is mostly beer for many years, then whiskey for years after that, then various vodka drinks for years after that, and now I’m all about a good, sour, dry riesling or a chilled low-tannin red. I hate myself.