Dealers are having difficulty keeping cars on their grounds. The big three have a brain drain problem. Cadillac makes adjustments to dealerships to prepare for electric vehicles. Oil corporations are cutting their exploration activities as a call to collapse. That and more in The Morning Shift on Monday, August 17, 2020.
Even though the maximum automotive plants in the U.S. are back up and running, the truth is that managing an automotive plant in a pandemic is not so simple and hoping to reliably maintain pre-COVID production grades is simply unreasonable.
While demand for cars is no longer what it used to be, it far exceeds supply, leading to the “lowest point of the national inventory since November 2011,” according to Automotive News. This is largely the result of production bottlenecks:
Most automakers and suppliers struggle to keep staff healthy and lines running at top speed. Ford Motor Co. executives. and General Motors warned this month that absenteeism is a challenge in their plants and that production had not yet returned to pre-COVID-19 levels. Both BMW and Honda recycled some of the staff to upgrade absent staff and keep meeting lines running, while Kia said suppliers’ limitations were delaying production of the popular Telluride crossover, according to a report released last week through Bloomberg.
Nissan said there was also shortages in some models and versions, adding the Rogue crossover and Frontier pickup truck. Mercedes-Benz told Automotive News that “lately it faces some limitations related to the stock of new cars, especially in some models such as the GLE. The German luxury manufacturer said it was looking to minimize the effect on consumers and distributors. .
At Toyota Motor North America, “we have worse days and days,” said Randy Pflughaupt, vice president of home chain management organization.
But it is only the struggles for production that cause this lack of supply; the challenge is also the result of the change of year of style. From Automotive News:
Inventory disruptions are not just due to a production slowdown, said Michelle Krebs, Autotrader’s executive analyst.
While inventory levels in August are tighter due to style year changes, PRODUCTION closures similar to COVID-19 have delayed the deployment of New Year vehicles.
According to Cox, only 0.5% of existing stock are 2021 models, at 9% of the stock for 2020 models at the same point last year.
The article mentions how the president of southeasterly Toyota dealers, Ed Sheehy, implored dealers to take the cars while the factories were final because he suspected the demand had returned:
… With regard to the source of some popular models, such as Toyota Tacoma, Kia Telluride and Hyundai Palisade, stocks for sale run out and probably charge sales accordingly, as Sheehy had predicted at the end of MarchArray
“Please don’t reject your assignments. I implore you to settle for everything you’ve earned, because the day will come a not too far back when you’ll need those cars and more,” Sheehy, his consumer broker, warned prophetically, in a video as auto factories and brokerages formed.
What a desirable change from dealers suffering from too many cars that no one wanted to buy to have too few cars to meet demand now.
When the world learned that General Motors’ CFO, Dhivya Suryadevara, left the company to take a chance at Stripe, the San Francisco-based virtual payments company, several of my automaker friends began talking about “brain drain,” especially the Detroit skill movement. Silicon Valley.
Part of the discussion within my organization of friends encouraged through the article “The departure of CFO Dhivya Suryadevara highlights the existing challenge of ‘brain drain’ for the automotive industry”. Here’s a little nugget from this story:
Morgan Stanley analyst Adam Jonas called the competition this week, or “brain drain,” the “biggest challenge” for Detroit automakers.
“While we don’t anticipate this outing, we’ve published our considerations about the ability of classic automakers to retain and attract talent,” he wrote in a note to investors on Tuesday.
Now there’s a new article about this discussion, this time from Automotive News. It is titled “The Last Outing of the Chief Financial Officer in Detroit Against The Hit in Silicon Valley,” and although it presents many of the same arguments as the CNBC article (which Detroit is wasting skills in Silicon Valley), it argues that Suryadevara good fortune can lead to the ability to seek opportunities in Detroit. From history:
But the switch from Suryadevara to Stripe, an online payment processor that has one of the most valuable startups in the world, also validates the growing amount of coveted skills in the automotive industry.
“What you see are abilities that expand and then are searched. It’s a smart challenge. Maybe now, after doing it right there, it will be less difficult to recruit,” said Gartner analyst Mike Ramsey. “It’s a popularity that there’s skill [in Detroit] backwards.”
The discussion about the “brain drain” from Michigan to California is complex, however, here are some issues that my industry colleagues have raised: The generation industry will pay more; The generation industry is faster at a time of innovation; the big 3 tend to offer slower upward mobility, and life in Detroit can be, well, incrusting and suburban.
Cadillac leads the attack on General Motors electric vehicles, with the Lyriq crossover newly revealed. However, to electrify its high-end brand, GM has many things to do, especially at the broker level, as Automotive News publishes in a recent article.
Service center appliances for repairing electric vehicles, the structure of charging stations and, more importantly, educating consumers about the merits of an electric Cadillac while raising awareness of the differences in the ownership of a classic ICE car are among the main challenges. From history:
Over the next two years, Cadillac riders will set up on-site charging stations and receive education to sell and repair electric vehicles, said David Butler, chairman of the Cadillac National Board of Dealers and chief executive of Suburban Collection, a Michigan-based group of racers. . Training
“It’s another style of ICE vehicles. For example, in constant operations, you no longer have an engine to start [electric vehicles]. There will be adjustments there,” he said.
Dealer service areas will want exclusive elevators to accommodate batteries and special equipment for electric vehicle maintenance work, Malishenko said.
Many dealers are involved in the depreciation of electric vehicle sales shortly after making an investment in constant-loading and operational equipment, as well as an electric vehicle education program.
“At some point, it’s a pretty big investment in the shops,” Malishenko said. “It doesn’t seem reasonable, at least at first, for everyone to do it. But I guess time will tell how they’ll implement it from one market to another.”
Bloomberg reports on how resource-rich sites in the past considered mature for oil extraction are in fact left to their fate, as demand for oil wells declines due to coronavirus and stricter limits on carbon emissions.
From Bloomberg:
While the coronavirus is ravaging economies and crippling demand, Europe’s major oil companies have admitted something uncomfortable in recent months: the billions of dollars worth of oil and fuel would probably never be extracted from the ground.
As the crisis also accelerates a global transition to cleaner energy, fossil fuels are likely to be less costly than expected in the coming decades, while the carbon emissions they involve will be more expensive. These two undeniable assumptions mean that the exploitation of certain fields no longer makes economic sense. BP Plc said on August 4th that it would no longer explore new countries.
The story goes on:
BP said in June that it would compare its discovery portfolio and leave some undeveloped. The chief of staff, Dominic Emery, had already alluded to the kind of resources that never “see the sweetness of the day. Complicated projects can simply separate in favor of faster fields to develop, such as the American shale, he said.
Pressure on emissions can also cause corporations to leave the maximum carbon reserves extensive in the ground, as Total SE stated last month by making a $8 billion depreciation on extensive carbon assets.
The list of high-risk projects includes deep-sea discoveries against Brazil, Angola and the Gulf of Mexico, said Parul Chopra, vice president of upstream in Rystad. Canadian oil sands projects, such as the expansion of the dawn progression in Alberta, are also in doubt, he said.
Over the years, we’ve noticed that car dealerships specialize in Jeeps, however, on those days they’re pretty rare, as Jeeps are concentrated on the Rams and Dodges. But apparently, Jeep dealerships are gaining ground now, with Automotive News writing:
After spending a decade consolidating its logos under the roof of a dealership, Fiat Chrysler Automobiles has sought exclusivity in recent years for its highly successful Jeep logo in some markets. The automaker will expand Jeep by creating exclusive grocery shopping reports for some of its top critical buyers, who continue to promote the logo despite a persistent fitness crisis.
The story goes on:
“I think they appreciate the fact that they’re specialized [and] that they feel better about their business,” said Mike Downey, vice president of Fort Collins Jeep in Colorado, a new independent dealership. “Just send a message that we’re all Jeep, we’re in Jeeps, just like the customers. I think it gives them a little more confidence in us.
According to the news site, there were only 14 autonomous Jeep dealerships by the end of 2019, said to be “59 places that are autonomous Jeep retail stores or engaged Jeep showrooms.” That’s not much, but it is said that FCA still sees price on the idea, especially as the new models prepare to enter the showroom, with Auto News writing:
The manufacturer hopes that a Jeep-centric retail environment, made up of others who know the ins and outs of diversity, can help the logo grow by attracting a greater diversity of customers. FCA will focus more on Jeep as it prepares for a product offensive that includes the Wagoneer and the premium Grand Wagoneer, as well as a redesigned Grand Cherokee.
From Toyota:
On 14 August 1945, Toyota Motor Co., Ltd.’s Koromo plant suffered an airstrike and a quarter of the plant was destroyed. Then, the next day, August 15, while efforts were being made to repair the damage caused by the bombings, the emperor’s announcement of the end of the war was transmitted.
The next day, August 16, Vice President Hisayoshi Akai strongly stated his conviction at a leaders’ meeting that “trucks will be a vital team for the reconstruction of Japan.” Toyota has a duty to manufacture and obtain them. So, we have to restart truck production.” In response, control to restart truck production and production at the plant resumed on August 17.
Do the big three have a challenge to maintain talent and, if so, why? I think living in Detroit can be a little tricky for many, and I know a lot of friends who just couldn’t stand the dark, blood-free weather and endless urban expansion. Others, like me, have stayed because of addictive car culture and wonderful car opportunities. But this discussion isn’t just about location; there’s a way the Big Three works for newer, more “lighter” businesses. Given all this, do you think the big three have a brain drain challenge?
Like it on Facebook to see stories
Please give an overview of the site: