BEIJING/TOKYO (Reuters) – U.S. electric carmaker Tesla Inc <TSLA> plans to slash on-site staff at its Nevada battery plant by around 75% due to the coronavirus pandemic, the local county manager said on Thursday.
The move comes after its Japanese battery partner Panasonic Corp <6752.T> said it would scale down operations at the Nevada factory this week before closing it for 14 days.
The factory produces electric motors and battery packs for Tesla’s popular Model 3 sedans.
“Tesla has informed us that the Gigafactory in Storey County is reducing on-site staff by roughly 75% in the coming days,” Austin Osborne said in a post on the county’s website.
No further details were available and it was not clear how many employees work in the factory. Tesla did not immediately respond to a Reuters request for comment.
The Reno Gazette Journal, which earlier reported the planned suspension, said Panasonic has about 3,500 employees at the Nevada plant.
Tesla said last week it would temporarily suspend production at its vehicle factory in San Francisco Bay Area from end of March 23, as well as at its New York solar roof tile factory.
However, Tesla CEO Elon Musk said the company will reopen the New York plant “as soon as humanly possible” to manufacture ventilators for coronavirus patients.
Two employees of Tesla have tested positive for coronavirus but have been working from home for the past two weeks and had not been symptomatic at work, Tesla said in an email to employees on Thursday. It did not disclose which unit or at what location the employees work.
(Reporting by Yilei Sun and Makiko Yamazaki; Editing by Miyoung Kim and Himani Sarkar)
FRANKFURT (Reuters) – Swedish carmaker Volvo is suspending production at its factories in Sweden, the United States and Belgium, to curb the spread of the coronavirus, it said on Friday, even as it resumes manufacturing in China where the infection rate has slowed.
Volvo’s Swedish factories in Torslanda, Skovde, Olofstrom, and its U.S. plant in South Carolina will close between March 26 and April 14, the company said. Its plant in Ghent, Belgium has already been temporarily shut down.
“Our primary concerns are the health of our employees and the future of our business,” Chief Executive Hakan Samuelsson said. “I think for the economy, we need to do something drastic, rather then trying half-hearted measures that drag on forever.”
“We are seeing the effect from this coronavirus is increasing every day. We see problems in the logistics supply side,” he told Reuters. “We have to help contributing to social distancing.”
Samuelsson said the financial impact of the shutdown would become clearer when the carmaker published first-half earnings. The company will reduce the working hours of white-collar staff during the factory closures and will take advantage of government incentives, Samuelsson said.
The financial impact on Volvo also depended on how different countries reacted to contain the virus.
“There is a big difference between countries. Some have curfews, with restaurants and schools closed. In other countries there are less drastic measures. I just think we need to synchronise that more.”
(Reporting by Edward Taylor; Editing by Pravin Char)
DETROIT (Reuters) – Ford Motor Co is putting more chips on a bet that it can profit from selling electric vans to delivery businesses that need to reduce carbon emissions.
Ford will roll out an all-electric version of its Transit van for North America in model year 2022, mirroring the timetable for launching a similar model for the European market, the company said on Tuesday in conjunction with the NTEA Work Truck Show in Indianapolis.
“Our electric bet as a company is different than our competitors,” Ford Chief Operating Officer Jim Farley said in an interview. “The most critical bet we will be making over the next several years will be our commercial vehicles.”
Two of three electric vehicles Ford has announced as part of an $11.5 billion investment in electrification through 2022 are aimed at commercial customers – the Transit and an electric version of the company’s best-selling model, the F-150 pickup.
Ford’s Mustang Mach-E electric SUV represents a low-volume challenge to electric luxury vehicle market leader Tesla Inc.
The electric Transit and F-150 will play in market segments Ford dominates in the United States and Europe.
“Half of the vehicles doing work in the U.S. are Ford Motor Co vehicles,” Farley said. Ford is also the No. 1 commercial vehicle brand in Europe, and has led the commercial van market in Britain, which is Europe’s largest, for 55 years.
Regulators in Europe and in some U.S. cities are stepping up pressure on businesses to replace diesel or gasoline-fueled delivery vans with electric models to reduce pollution in city centers.
In the United States, Amazon.com Inc, has ordered 100,000 electric delivery vans from start-up Rivian, the first of which will be delivered in 2021 and built in Normal, Illinois. Ford has a separate partnership with Rivian.
The electric Transit will not be related to the Rivian van, said Ted Cannis, Ford’s director of electrification.
The new Transit will be an early test of the company’s efforts to deploy new connectivity technology and services to go with it, Farley said.
Ford said the electric Transit will be built in America and cost more than the gasoline-powered version, which starts at $34,500. Research firm Auto Forecast Solutions said it will be built in Kansas City, Missouri, along with the gasoline version.
Supplier sources who asked not to be identified said Ford will launch production in late 2021, with plans to build around 2,000 that year and increase to 14,000 annually by 2023.
(Reporting by Ben Klayman in Detroit; Additional reporting by Paul Lienert; Editing by Richard Chang)
DEARBORN, Mich. (Reuters) – Investors sent Ford Motor Co shares skidding on Tuesday after the company delivered a weaker-than-expected 2020 forecast, warning of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars.
Shares in the No. 2 U.S. automaker plunged 9.4% in after-hours trading, shaving more than $3 billion off the company’s value. In comparison, electric carmaker Tesla closed up nearly 14%, pushing its market cap to $160 billion, more than four times the size of Ford’s $36.4 billion.
“The results were not OK in 2019,” Ford Chief Financial Officer Tim Stone told reporters at the company’s headquarters outside Detroit.
“As I look to 2020 and beyond, I’m very optimistic,” he said, while cautioning that Ford’s lower guidance does not yet account for the potential impact of the coronavirus outbreak in China.
In an after-hours call with financial analysts, Chief Executive Jim Hackett was more blunt about the challenge of balancing Ford’s protracted turnaround efforts with its continuing work on future technology, including electric and self-driving cars.
“I don’t think this company can keep straddling the old and new worlds forever … This company has to change,” Hackett said.
Ford said it expects 2020 operating earnings to be in the range of 94 cents to $1.20 a share. Analysts were expecting $1.26 a share.
Stone said Ford expects to continue its quarterly dividend of 15 cents, which could cost the company $2.4 billion in 2020. Asked about continuing the dividend after lowering its 2020 guidance, Hackett said, “We like to return value to shareholders.”
The disappointing 2020 forecast, coming after Ford previously trimmed its 2019 outlook, is a blow for Hackett, who took the helm in May 2017.
He has been asking investors to be patient with a restructuring that has seen the formation of a wide-ranging alliance on commercial, electric and autonomous vehicles with Volkswagen AG <VOWG_p.DE> and the sale of its money-losing operations in India to a venture controlled by India’s Mahindra & Mahindra.
But by Ford’s own accounting, the restructuring is far from complete. It has booked $3.7 billion of the projected $11 billion in charges it previously said it would take, and expects to book another $900 million to $1.4 billion this year.
For the fourth quarter of 2019, Ford reported a net loss of $1.7 billion, or 42 cents a share, compared with a loss of $100 million, or 3 cents a share, a year earlier.
The quarter included a loss of $2.2 billion due to higher contributions to its employee pension plans, something it disclosed last month.
Revenue in the quarter fell 5% to $39.7 billion, above the $36.5 billion Wall Street had expected.
Ford’s adjusted free cash flow fell 67% in the fourth quarter to $500 million, including the $600 million cost of bonuses related to a new labor deal with the United Auto Workers union. The UAW deal also played a role in driving North American automotive profit margins down to 2.8% in the fourth quarter.
Ford said its operating losses in China last year totaled $771 million, including a loss of $207 million in the fourth quarter. It lost $1.5 billion in 2018. Ford’s market share in China in the fourth quarter fell to 2% from 2.3% last year.
In December, Ford said it would halve its operating loss in 2019 and nearly halve it again in 2020, followed by further improvement in 2021.
However, that forecast was before the appearance of the fast-spreading coronavirus and its crippling effects on China’s economy.
Ford’s China sales fell about 15% in the fourth quarter and 26% for the year as it continued to lose ground in its second-biggest market. Ford has been struggling to revive sales in China since its business began slumping in late 2017.
Detroit rivals General Motors Co and Fiat Chrysler Automobiles are scheduled to report their results on Wednesday and Thursday, respectively.
(Reporting by Ben Klayman and Paul Lienert; Editing by Tom Brown)
FILE PHOTO: A sign welcomes visitors to the General Motors Lordstown Complex assembly plant in Warren, Ohio
WASHINGTON (Reuters) – Electric pickup truck start-up Lordstown Motors is pursuing a $200 million loan from a U.S. Energy Department program to retool a former General Motors <GM> factory in northeast Ohio, Chief Executive Steve Burns told Reuters.
Burns met with Energy Secretary Dan Brouillette on Monday for about an hour and the company was holding additional talks with officials on Tuesday from the Energy Department’s Loan Program Office.
“We think we are worthy of government help. We don’t want a handout – we want a loan,” Burns told Reuters in an interview. “It’s just going to be more jobs faster if we get it. We are viable without it.”
Burns disclosed the company plans to unveil a drivable version of its electric truck at the Detroit auto show in June. It hopes to begin production by year-end.
The Energy Department declined comment.
Burns said the company hopes to receive funding from the Energy Department’s Advanced Technology Vehicles Manufacturing program that in 2009 awarded loans to Ford Motor Co <F>, Tesla Inc <TSLA> and Nissan Motor Co <NSANY> to retool factories, but has not issued loans since 2011. Nissan and Tesla previously repaid their loans.
The fate of the sprawling plant became a political lightning rod after GM announced its planned closure in November 2018, drawing condemnation from U.S. President Donald Trump and many U.S. lawmakers.
A bipartisan group of Ohio lawmakers wrote Brouillette last week offering “strong support” for the loan, saying northeast Ohio was dealt a “severe blow” by the plant closing.
Lordstown Motors Corp, which is 10% owned by Workhorse Group Inc <WKHS>, bought the plant and equipment for $20 million as part of its ambitious plan to begin building electric pickup trucks by the end of 2020.
“It’s cool to bring something back to life,” Burns said.
The company is working to raise additional funding and is in advanced talks with a large strategic investor, Burns said.
GM last year agreed to loan Lordstown Motors $40 million to acquire and retool the plant. Burns hopes to repay GM’s loan “in a few weeks.”
Burns plans to start crash-testing vehicles in July, hiring about 400 hourly workers in September and to begin production in November or December.
Electric vehicle startup Rivian, backed by Amazon.com Inc <AMZN> and Ford, plans to build an electric pickup truck and companion starting in late 2020. GM plans to build its first electric pickup truck starting in late 2021. Tesla plans to start building its electric Cybertruck in late 2021.
(Reporting by David Shepardson; Editing by Nick Zieminski)
FILE PHOTO: The corporate logo of Ford is seen at Brussels Motor Show
(Reuters) – Ford Motor Co <F> said on Wednesday its fourth quarter results will be hit by a pre-tax loss of about $2.2 billion (1.7 billion pounds) due to higher contributions to its employees pension plans.
The charge is largely related to a drop in discount rates, the company said, as that leads to an increase in the amount of money to be contributed for future pension benefits.
The U.S. automaker said it will record a $2 billion loss related to pension plans outside the United States and a $600 million loss associated with other post-retirement employee benefits plans globally.
However, the overall loss was offset by a $400 million gain associated with pension plans in the United States.
On an after-tax basis, the loss is expected to reduce Ford’s net income by about $1.7 billion in the fourth quarter. The loss will not impact the adjusted earnings per share as it is a special item, the company said.
(Reporting by Dominic Roshan K. L. in Bengaluru; Editing by Arun Koyyur)
WASHINGTON (Reuters) – Toyota Motor Corp <TM> said on Friday it will move production of its mid-size Tacoma pick-up truck from the United States to Mexico as it adjusts production around North America.
The largest Japanese automaker also said it will end production of the Toyota Sequoia in Indiana by 2022 as that facility focuses on mid-size SUV’s and minivans.
Toyota will shift production of the Sequoia in 2022 to Texas and that plant will end production of the Tacoma by late 2021.
Toyota has been building Tacoma trucks at its Baja California plant in Mexico since 2004. Last month, Toyota’s Guanajuato plant began assembly of the Tacoma.
Toyota said its production capacity for the Tacoma in Mexico will be about 266,000 per year. Last year, the automaker sold nearly 249,000 Tacoma pickup trucks in the United States, up 1.3%.
Toyota said the product moves were to “improve the operational speed, competitiveness and transformation at its North American vehicle assembly plants based on platforms and common architectures.”
The new North American trade agreement approved by the U.S. Senate on Thursday ensures that automakers will still be able to build pickup trucks in Mexico without facing new punitive tariffs.
In February, Fiat Chrysler Automobiles NV <FCAU> said it was reversing plans to shift production of heavy-duty trucks from Mexico to Michigan in 2020, freeing a Michigan facility to produce Jeeps.
Toyota said Friday it completed a $1.3 billion modernization investment in its Indiana operations to add 550 jobs. Toyota said there would be no reduction to direct jobs at any of Toyota’s facilities across North America as a result of the vehicle moves.
(Reporting by David Shepardson; Editing by Chris Reese)
Volkswagen logo is seen on a Teramont X SUV displayed at the second media day for the Shanghai auto show in Shanghai
HONG KONG/BEIJING (Reuters) – Volkswagen AG <VWAGY> is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd, two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.
The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.
The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalization of $2.8 billion, a 20% stake in the company at present is worth about $560 million.
The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.
After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.
Guoxuan is among a swathe of mid-tier Chinese battery makers behind CATL and BYD. It is based in China’s eastern city of Hefei, where Volkswagen is also building electric vehicles with JAC Motor, one of a number of its Chinese joint venture partners.
A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain.
Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to requests for comment.
To achieve its NEV sales goal in China, Volkswagen has built a new $2.5 billion electric vehicle plant with partner SAIC Motor that will have annual output capacity of 300,000 cars and is also revamping manufacturing facilities in China’s southeastern city of Foshan to build electric cars with partner FAW Group.
Volkswagen has also identified CATL as a strategic supplier and Volkswagen board member Stefan Sommer told Reuters in July last year that it could even build its own battery cell manufacturing plants in China.
“By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”
Volkswagen’s rivals in China include Tesla, which earlier this month began delivering cars from its $2 billion factory in China. The U.S. electric car maker eventually plans to manufacture 250,000 vehicles a year in the plant’s first phase.
China has been a keen supporter of NEV – pure battery electric, hybrid and plug-in hybrids – and has started implementing NEV sales quota requirements for automakers.
However, cuts to subsidies have dealt the market a blow, with NEV sales contracting for the first time last year. Sales this year are likely to be flat or rise only slightly, according to China’s top auto industry association.
(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Zhang Yan and Zhang Xiaochong in Beijing; Editing by Brenda Goh and Richard Pullin)
SHANGHAI (Reuters) – Ford Motor Co’s <F> China vehicle sales fell for a third consecutive year, by 26.1%, as it battles a prolonged overall sales decline in its second-biggest market that has hit demand for its mass-market Ford brand and sports utility vehicles.
The U.S. automaker delivered 146,473 vehicles in China in the fourth quarter, down 14.7% year-on-year, Ford said in a statement. In total, it sold 567,854 vehicles over 2019.
Ford has been trying to revive sales in China after its business began slumping in late 2017. Sales sank 37% in 2018, after a 6% decline in 2017.
Anning Chen, president and chief executive of Ford Greater China, said that while 2019 was a “challenging” year for the automaker, it saw its market share in the high-to-premium segment stabilize and its sales decline in the value segment start to narrow in the second-half of the year.
“The pressure from the external environment and downward trend of the industry volume will continue in 2020, and we will put more efforts into strengthening our product lineup with more customer-centric products and customer experiences to mitigate the external pressure and improve dealers’ profitability.”
The automaker plans to launch more than 30 new models in China over the next three years of which over a third will be electric vehicles. It has also said it would localize management teams by hiring more Chinese staff and aimed to improve relationships with joint venture partners.
New models it launched in the fourth quarter include a new Ford Escape version – for which the automaker said orders received so far have been much higher than expected – and the Lincoln Corsair, the first localized Lincoln model in China.
In China, Ford makes cars through a joint venture with Chongqing Changan Automobile Co Ltd and Jiangling Motors Corp Ltd (JMC). It has also said it would partner Zotye Automobile Co Ltd to sell lower priced cars.
Its larger U.S. rival General Motors Co <GM> last week said its sales in China fell 15% from a year earlier to 3.09 million vehicles in 2019, its second year of decline.
China’s auto market is set to contract by 2% in 2020 for the third year of decline, the China Association of Automobile Manufacturers (CAAM) forecast, due to a weaker economy and trade dispute with the United States.
Over 28 million vehicles were sold in 2018, down 3% from the prior year, while 2019 sales are likely to have declined 8% from the prior year, CAAM said.
(Reporting by Brenda Goh and Yilei Sun; Editing by Christian Schmollinger and Christopher Cushing)
A Ford model is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai
Workers leave the General Motors CAMI car assembly plant where the GMC Terrain and Chevrolet Equinox are built in Ingersoll
WASHINGTON (Reuters) – General Motors Co <GM> will revive the Hummer name to sell a new family of electric pickup trucks and sport utility vehicles and will tout the return with a Super Bowl ad featuring NBA star LeBron James, two people briefed on the matter said on Friday.
The vehicles will be sold under the GMC nameplate. Reuters reported in October that GM planned to build a new family of premium electric pickup trucks at its Detroit-Hamtramck plant beginning in late 2021 and was considering reviving the Hummer name, citing several people familiar with the plans.
The Wall Street Journal reported GM’s decision to move forward earlier on Friday. GM declined to comment.
The electric truck and SUV program is the centerpiece of a planned $3 billion investment in the Detroit-Hamtramck plant to make electric trucks and vans, and part of a broader $7.7 billion (5.9 billion pounds) investment in GM’s U.S. plants over the next four years that was part of a new contract signed with the United Auto Workers union last year.
The investment moves the automaker into a part of the EV market that is largely untested and where GM has a higher likelihood of turning a profit, analysts said.
Reuters reported GM plans to first build EV pickups in late 2021 and then an electric SUV in 2023.
Tesla <TSLA> CEO Elon Musk in November unveiled an electric pickup called “Cybertruck” it plans to build starting in late 2021.
Rivian, a start-up electric company backed by Amazon.com <AMZN>, will begin building 100,000 electric delivery vans for Amazon starting in 2021.
Hummers were rugged civilian utility vehicles with low gas mileage that were inspired by military vehicles and were popular with such celebrities as actor Arnold Schwarzenegger but derided by environmentalists as gas-guzzlers. GM shut down its Hummer brand after a deal to sell the SUV-line to an obscure Chinese machinery maker was blocked by Chinese regulators in 2010.
Michael Harley, executive editor for Kelley Blue Book, noted “the original Hummer was ostracized out of showrooms for being heavy and ponderous with an insatiable appetite for gasoline. An all-electric powertrain essentially exonerates the truck on all charges.”
Electric pickups and SUVs – the heart of the U.S. market – could help Ford Motor Co <F> and GM generate significant sales of EVs needed to meet tougher California emission standards and electric vehicle mandates.
The Trump administration is moving to roll back those standards – and eliminate extra credits that automakers receive from EV sales but electric trucks are a hedge if California prevails.
(Reporting by David Shepardson; Editing by Sandra Maler and Alistair Bell)
