Nissan’s U.S. sales are so bad that furloughs and cost cuts are in order, everybody knew about the defective Ford transmissions, Toyota can’t make enough hybrids and more for this Morning Shift of Friday, Dec. 6, 2019.
1st Gear: Introducing The 2020 Nissan Furlough
I’m not that smart, in case you didn’t know. I don’t have an MBA or an engineering degree or a big fancy executive title. Most of my shirts aren’t currently ironed. The pants, even less so. I’m just a guy with a keyboard and the music of the blogs in my heart.
But it doesn’t take a genius to know something is very wrong over at Nissan—not just with all the Carlos Ghosn stuff and the massive upheavals up top, but with the way it does business entirely, especially in the U.S. market. I’ve been saying for years that Nissan’s unclear brand identity and heavy reliance on discounts, incentives and fleet sales were going to bite them in the ass eventually.
And that’s where we find ourselves now. As Automotive News reports, the Nissan Group’s U.S. sales were down 16 percent year over year—13 percent at Nissan, a whopping 33 percent at Infiniti. It’s beginning to implement some painful cuts to get costs under control as a result.
That includes a two-day, unpaid furlough for all U.S. employees next month. From the story:
“While we’ve made some positive progress, Nissan’s performance has fallen short of our expectations,” Nissan North America Chairman Jose Valls said in a memo to employees this week that was obtained by Automotive News.
Valls said in the memo that Nissan will cut employee travel expenses by half “effective immediately.”
The company also will remain closed for two days after the New Year’s holiday, with employees forgoing pay Jan. 2 and Jan. 3.
Valls informed Nissan employees that the move will translate to a 9.2 percent pay cut in January for those paid monthly. Employees paid biweekly will not be paid for those two days.
The mandatory closure will affect all of Nissan’s U.S. operations, including the automaker’s headquarters in suburban Nashville and assembly plants in Smyrna and Decherd, Tenn., and Canton, Miss. Luxury unit Infiniti and the company’s finance arm, Nissan Motor Acceptance Corp., are included in the cost cutting.
Two days of pay doesn’t sound like a lot, but when you consider how huge the Nissan organization is in America, it must add up to quite a bit. And you know that’s going to sting for many of the employees in the company.
Nissan’s new CEO Makoto Uchida has said that fixing the U.S. arm is his top priority going into 2020. But we have to wonder if Nissan’s slump will be part of a larger industry downturn next year.
2nd Gear: Toyota’s Hybrids Are In Demand
Meanwhile, at Toyota, the automaker has another kind of problem, and it’s sort of a good one: they can’t build hybrid Corollas and RAV4s fast enough. Though sales of the Prius have been tanking hard for the past few years—I think the fact that it’s now ugly as sin has something to do with that—the more normal-looking hybrid versions of its mainstream cars are selling spectacularly well.
But as this Bloomberg story notes, battery sourcing is a major issue, and that foretells problems down the road for all automakers as the industry increasingly goes electric.
“The only thing holding us back on hybrids is capacity,” Bob Carter, Toyota’s North American executive vice president for sales, told reporters on Thursday at an event in Detroit. “We can’t make enough Corolla and RAV4 hybrids.”
While many of its competitors are walking away from hybrids and plowing billions into battery-powered cars, the Japanese automaker has seen demand surge for its 14 gasoline-electric models. Toyota’s hybrids accounted for 13% of total Toyota and Lexus brand sales in the U.S. last month and made up nearly a quarter of the volume for its top seller, the RAV4 compact SUV.
Toyota could easily sell twice the number of hybrid RAV4 models, but can’t source enough electric batteries for the popular vehicle, Carter said. It currently has an 11-day supply of them in stock, compared to more than 20 days’ supply of gasoline-powered versions, he said.
I see this as a good thing. More “normal” cars should be hybrids. It’s better for the environment and will hopefully drive the costs of batteries down, if they can figure out the supply issues.
3rd Gear: Of Course Ford Knew Its Transmissions Were Defective
Ford’s dual-clutch transmission, code-named DPS6 and used in the Fiesta and Focus, has been an utter disaster for the automaker. It’s the subject of owner complaints, lawsuits and a huge investigation by the Detroit Free Press earlier this year.
Now the paper follows up on that, reporting on the extent to which whistleblowers within Ford who expressed concerns about the gearbox were just told to be quiet:
The engineer said: “We’d raise our hands and be told, ‘Don’t be naysayers.’ We got strange comments. It seemed the ship had sailed. After that, if you ask questions, you’re accused of mutiny, so you put your head down and make it work. Good people tried to make it work. But you can’t violate the laws of physics. It’s a mechanical catastrophe.”
He was referring to the DPS6 dual-clutch “PowerShift” transmission used in 2 million Focus and Fiesta cars sold this decade that is the subject of massive litigation and a federal criminal fraud probe.
“It was cheap to make and cheap to assemble,” the engineer said, but because the DPS6 used “dry” clutch technology, it couldn’t cool itself, ensuring failures in real-world use.
The story is worth a read in full.
4th Gear: Waymo’s Autonomous Taxi Service Tops 100,000 Rides
Apparently this is going well. Via Bloomberg:
On the first anniversary of its pilot program in Chandler, Arizona, Waymo said it will begin offering an iOS app for its robot ride-hailing service for iPhones. It also revealed new details of the pioneering robotaxi service, which has been slow to offer fully autonomous service without human “safety drivers” behind the wheel to take over in an emergency.
Waymo, which began a decade ago as Google’s self-driving car project, said its service has 1,500 monthly users and has tripled the number of weekly rides since January. Since late summer, Waymo has ramped up a “rider only” option without human safety drivers to a test group of a few hundred commuters. While those people weren’t always charged initially, they are now paying rates that are competitive with Uber and Lyft ride-hailing services, according to a Waymo spokeswoman.
Most Waymo rides occur in the late afternoon and evening, with commuters using the service for everything from getting to work to having a “date night,” Dan Chu, the company’s chief product officer, wrote in a blog post.
5th Gear: A Quick Programming Note
If you’ll indulge me for a moment: after almost eight years, approximately 5 million Kinja posts and, thankfully, only one incarceration, today is my last day at Jalopnik.
I’ll have more to add later, but for now, I will merely say thank you for supporting this website and being a loyal Morning Shift customer. Moving forward, you have my permission to berate the staff if they don’t get it up before 11 a.m.
Reverse: You Just Don’t See Many Train Robberies Anymore And Stuff Like This Is Why
Neutral: Would You Buy A Hybrid For Your Next ‘Normal’ Car?
I don’t see why not.