Auto File: Mercedes: What Recession?

GS Yuasa

28/04/2023 16:16

April 28 - Joe White 
Global Autos Correspondent 
    
Greetings from the Motor City!  

Happy Friday and Happy May Day and Golden Week to readers in
Asia!  

There’s an American songbook classic that goes, “accentuate the
positive, eliminate the negative, latch on to the affirmative,
don’t mess with Mr. In-Between.” This is today’s theme song for
the news from the World of Cars. 

Mr. In-Between will be playing the piano. He insisted. Today – 

    *         Mercedes delivers a more upbeat outlook
    * The UAW’s contract campaign heats up
    * An embarrassing admission by a Toyota affiliate


Mercedes makes the case for optimism 

Luxury automaker Mercedes-Benz raised its forecast for profit
margins at its van business, said its luxury car business is
tracking to the high side of earlier margin forecasts and told
investors demand in the U.S. and China is looking up. 

This against the backdrop of continued fears of recession among
financial market actors.  

Auto industry executives are living with high levels of
cognitive dissonance. All around are warning signs that
consumers are stressed by inflation and rising rates. Headlines
about bank sector troubles and mass layoffs don’t help.   

And yet demand for expensive Mercedes cars, SUVs and trucks
remains strong. Businesses are spending on Mercedes Sprinter
vans. 

Mercedes is not alone. At General Motors, 60% of the orders for
the redesigned Chevy Colorado pickup truck are for high-end
versions of the truck, up from 42%, CEO Mary Barra said earlier
this week. GM also highlighted strong commercial fleet demand. 

If the global economy is careening toward recession, no one told
affluent consumers or commercial fleet operators. 

The UAW turns up the pressure 

United Auto Workers President Shawn Fain this week enlisted U.S.
Sen. Bernie Sanders and other political figures to advance his
campaign for better wages and benefits for Detroit Three
manufacturing workers. 

Fain and Sanders blasted GM and its Ultium battery venture for
paying workers at a battery factory starting wages of $16.50 an
hour, while preparing to rake in more than $1 billion in
taxpayer-funded subsidies for the batteries produced there. 
Ultium, half-owned by South Korean battery maker LG Energy
Solutions, is bargaining with the UAW for a new contract at the
Ohio facility.  

Fain also flamed Stellantis for offering buyouts to 33,500 U.S.
employees, most of them UAW-represented factory workers. The UAW
is fighting to stop Stellantis from closing an assembly plant in
Belvidere, Ill. Buying out UAW workers would make it easier for
the automaker to find new work for Belvidere workers losing
jobs. Fain wants the Belvidere plant kept open to build a new
vehicle.  

A Toyota safety test scandal 

Toyota Chair Akio Toyoda and CEO Koji Sato said they have
ordered investigations into why engineers at Daihatsu, a Toyota
affiliate, rigged test vehicles to pass side-impact crash tests.

Daihatsu said a whistleblower disclosed that someone had cut a
notch into door trim in the vehicle used for side-collision
tests to prevent the piece from shattering with a sharp edge
when side airbags deployed. The models involved include vehicles
sold as the Toyota Yaris and made in Thailand and Malaysia. 

Tesla: Too many friends of Elon on the board? 

Proxy advisory firm Glass, Lewis urged Tesla shareholders to
reject Tesla co-founder and former chief technology officer JB
Straubel’s bid for a seat on the board of directors. 

Glass, Lewis said Straubel cannot be considered a truly
independent director given his long association with Musk and
the fact that he departed Tesla management only four years ago.
Former managers should be gone five years at least to unwind
potential conflicts, Glass, Lewis said. 

SOC Investments, which works with union pension funds, also has
urged a no vote on Straubel. 

Fast Laps 

Elon Musk must answer questions about recorded statements he
made about Autopilot, a California judge ruled. Musk’s lawyers
had tried to block the demand for testimony about videos in
which he claimed a Model S could drive itself more safely than a
human, arguing that Musk was often the subject of “deepfake”
videos.  

GM said former Vice Admiral Jan Tighe has been nominated to join
its board of directors. Tighe was Deputy Chief of Naval
Operations for Information Warfare and Director of Naval
Intelligence. GM is building a defense business, and
cybersecurity issues are front and center as it develops
connected vehicles.  

EV charging for the UK is doubling this year, maybe. That’s the
goal of a new industry group, ChargeUK, that said its members
are ready to invest 6 billion pounds in new charging
infrastructure over the next seven years.  

Rizon – that’s the U.S. electric truck brand created by Daimler
Trucks for a new line of medium-duty electric trucks it will
offer. Regulators in California and Washington are proposing to
clamp down on commercial truck emissions and push the commercial
trucking sector toward electrification.  

Japan promised $1.8 billion in subsidies for storage battery
projects, including one proposed by Honda and battery maker GS
Yuasa.  

Stellantis will get nickel for batteries from Western Australia
as part of a new deal with miner Alliance Nickel. The automaker
will take a stake in Alliance. Australian nickel would help
Stellantis batteries qualify for US EV subsidies.  

A manager at Continental has admitted involvement in
Volkswagen’s Dieselgate emissions test cheating scandal, and
implicated others, German prosecutors said. 

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 (Editing by Alexander Smith)