Category: Auto news (Page 5 of 8)

Daimler, Volvo Mull Combustion Engine Cooperation

January 5, 2020 / WIL BALDWIN

BERLIN (Reuters) – Luxury German carmaker Daimler <DDAIF> and Volvo Cars, owned by China’s Geely, are considering cooperating to cut the costs of developing combustion engines, a magazine reported on Sunday, citing unnamed company sources.

The Automobilwoche weekly cited a Volvo manager as saying there were initial talks with Daimler, but no concrete plans, while a company spokesman said it was too early to talk about firm projects, although it was not excluding anybody.

A Daimler spokesman said the company’s cooperation with Geely, which owns a 10% stake in the German carmaker, was developing in a positive way, but declined to comment further.

Global tariffs, accelerated by a trade war between China and the United States, as well as higher investment requirements for electric and autonomous vehicles, are forcing carmakers to seek new ways to cut and share costs.

In October, Volvo said it would merge its engine development and manufacturing assets with those of Geely, creating a division to supply in-house brands and also potentially others with next-generation combustion and hybrid engines.

The Automobilwoche said this new division would start operating by the end of March, which could be a possible starting point for cooperation with Daimler, while a further step could be a partnership to develop electric power trains.

Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture and the two companies are also cooperating on a premium ride-hailing service in China.

Geely bought Volvo Cars in 2010 from Ford Motor Co <F.N>, allowing the Swedish brand to operate on an arms-length basis. But in recent years, it has deepened cooperation between the two brands.

Volvo already supplies engines to some Geely-branded vehicles, sharing technology through Geely’s Lynk brand. Both companies share and develop common vehicle platforms.

(Reporting by Emma Thomasson and Georg Merziger; editing by Jason Neely)

After Tesla’s Record Year in Norway, Rivals Gear Up for 2020

January 3, 2020 / WIL BALDWIN

FILE PHOTO: A 2018 Tesla Model 3 electric vehicle is shown in Cardiff, California

OSLO (Reuters) – The sale of new electric cars in Norway rose by 30.9% last year amid soaring demand for Tesla Inc’s <TSLA> vehicles, but the pioneering U.S. firm faces rising competition from rival auto makers in 2020.

Fully electric cars made up 42.4% of sales in the Nordic nation last year, a global record, rising from a 31.2% market share in 2018 and just 5.5% in 2013, the Norwegian Road Federation said on Friday.

Seeking to become the first country to end the sale of fossil-fueled cars by 2025, Norway exempts battery-powered vehicles from the taxes imposed on petrol and diesel engines.

This year, as many as six in 10 of all new cars sold in the country could be fully electric, said Volkswagen <VWAPY> distributor Harald A. Moeller AS, which is preparing to launch several models in 2020.

“The electrification of the car market is accelerating … we forecast electric vehicles to hold a 100% market share in 2025,” the importer said of the outlook for Norway.

The country’s best-selling car in 2019 was Tesla’s mid-sized Model 3 sedan, which retails from 384,900 Norwegian crowns ($43,721.74), racking up an 11% market share in the California-based firm’s first attempt at addressing the mass market.

(Reporting by Victoria Klesty and Lefteris Karagiannopoulos, writing by Terje Solsvik, editing by Gwladys Fouche)

GM Loans $40 Million to Firm to Acquire, Retool Shuttered Lordstown, Ohio, Factory

December 9, 2019 / WIL BALDWIN

FILE PHOTO: The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing.

WASHINGTON (Reuters) – General Motors Co <GM> confirmed on Monday it agreed to loan $40 million to an electric vehicle start-up to facilitate the acquisition of its shuttered Lordstown Assembly plant in Ohio.

Lordstown Motors Corp, which is 10% owned by Workhorse Group Inc <WKHS>, bought the plant and equipment for $20 million in November as part of its ambitious plan to begin building electric pickup trucks by the end of 2020.

The loan agreement, which was reported earlier Monday by the Business Journal in Youngstown, was filed in Trumbull County last week.

Lordstown Motors has been working on the engineering of the new truck, “Endurance”, and hired Rich Schmidt, a former director of manufacturing at Tesla Inc, as chief production officer.

“We structured the sales agreement to help support Lordstown Motors’ launch plans for the Endurance pickup,” GM spokesman Jim Cain said, who added it “allows them to take possession of the plant and to cover some operating expenses while they undertake their capital raise.”

GM is not investing in the venture, but Cain said GM financing could rise to $50 million.

The fate of the sprawling northeastern Ohio 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.

Lordstown CEO Steve Burns told Reuters last month he hopes to have pre-production prototypes coming off the assembly line by April and to start production by November 2020 with an initial workforce of 400 hourly workers.

Burns said last month the company hopes to raise more than $300 million, the Business Journal reported. Burns told Reuters it retained Ohio investment bank Brown Gibbons Lang & Co in its capital fundraising effort.

GM and South Korea’s LG Chem <051910.KS> said Thursday they will invest $2.3 billion to build an electric vehicle battery cell joint venture plant in Ohio which will be one of the world’s largest battery facilities.

The plant, to be built near the Lordstown complex, will employ more than 1,100 people, the companies said.

As part of the Lordstown sale, GM has the option to lease land near the assembly plant that it could use for the battery plant.

(Reporting by David Shepardson; Editing by Sonya Hepinstall)

Italy Tax Authorities Say Fiat Underestimated Value of Chrysler by $5.6 Billion

December 4, 2019 / WIL BALDWIN

MILAN (Reuters) – Italian tax authorities believe that Fiat Chrysler Automobiles <FCAU> underestimated the value of its U.S. business by 5.1 billion euros following Fiat’s phased acquisition of Chrysler, according to a company filing and a source close to the matter.

The audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5 billion, the source added, confirming a report by Bloomberg.

FCA said in its third-quarter report that the tax authorities had issued to the company a final audit report in October this year “which, if confirmed in the final audit assessment, could result in a material proposed tax adjustment related to the October 12, 2014 merger of Fiat SpA into FCA NV.”

It said the issuance of a final audit report starts a 60-day negotiation period, which ends with the issuance of a final audit assessment expected to be received by the end of December 2019.

“The company believes that its tax position with respect to the merger is fully supported by both the facts and applicable tax law and will vigorously defend its position,” it said in the third-quarter report.

A spokesman for Italy’s tax agency declined to comment.

“At this time, we cannot predict whether any settlement may be reached or if no settlement is reached, the outcome of any litigation. As such, we are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss,” Fiat said.

News of the tax probe comes at a delicate time for Fiat Chrysler, which is finalizing talks with PSA, the maker of Peugeot and Citroen, over a planned $50 billion merger to create the world’s fourth-largest automaker.

(Reporting by Silvia Aloisi in Milan; Editing by Anil D’Silva)

Logo of car manufacturer Fiat is seen in Zurich

Tesla Move will Draw Further Companies into Germany

December 1, 2019 / WIL BALDWIN

FRANKFURT (Reuters) – Tesla’s announcement earlier this month that it will build its first European factory near Berlin will draw further companies from the electric mobility and energy storage sectors into Germany, a state premier told newspaper Die Welt.

“They are already on their way. I’m hearing there are further inquiries with the communities and the regional business development programme. Tesla will cause other companies to follow,” said Dietmar Woidke, premier of the eastern German state of Brandenburg that surrounds Berlin.

He said Brandenburg was already in talks with other companies, declining to identify them due to confidentiality agreements. “I expect that we can announce it before Christmas,” Woidke said.

Tesla’s move is a big boost for Germany as a centre for manufacturing after BMW and Daimler in recent years chose to build new factories in Hungary, and after its auto industry was hit hard by Volkswagen’s admission in 2015 that it cheated U.S. diesel emissions tests.

(Reporting by Christoph Steitz; Editing by Mark Heinrich)

Brandenburg’s PM Woidke speaks speaks to the media on Tesla European factory in Potsdam

Fiat Chrysler Reaches Tentative Labor Deal with United Auto Workers

December 1, 2019 / WIL BALDWIN

DETROIT (Reuters) – Fiat Chrysler Automobiles NV and the United Auto Workers (UAW) union on Saturday announced a tentative agreement for a four-year labor contract, a boost for the automaker as it works to merge with France’s Groupe PSA.

Italian-American Fiat Chrysler and PSA, the maker of Peugeot and Citroen, last month announced a planned $50 billion merger to create the world’s fourth-largest automaker.

The tentative agreement with Fiat Chrysler, which is subject to ratification by the union members, follows contracts that the UAW already concluded with Ford Motor Co and General Motors Co.

The deal with GM followed a 40-day strike in the United States that virtually shuttered GM’s North American operations and cost the automaker $3 billion.

The UAW on Saturday said the contract with Fiat Chrysler included a commitment from FCA to invest $9 billion, creating 7,900 new jobs over the course of the four-year contract. Of the $9 billion, $4.5 billion was announced earlier this year, to be invested in five plants and creating 6,500 jobs.

Detailed terms of the tentative agreement were not released, but they are expected to echo those under the new contracts with GM and Ford, as the UAW typically uses the first deal as a pattern for the others.

“FCA has been a great American success story thanks to the hard work of our members,” UAW acting President Rory Gamble said in a statement. “We have achieved substantial gains and job security provisions for the fastest growing auto company in the United States.”

Ratification is not a sure thing. Rank-and-file UAW members at FCA in 2015 rejected the first version of a contract. In addition, a lawsuit related to a federal corruption probe could also raise doubts among union members about the terms agreed.

The federal corruption led GM to file a racketeering lawsuit against FCA, alleging that its rival bribed union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. FCA has brushed off the lawsuit as groundless.

Under the UAW’s deal with GM, the automaker agreed to invest $9 billion in the United States, including $7.7 billion directly in its plants, and to create or retain 9,000 UAW jobs.

Ford’s contract included commitments to invest more than $6 billion in its U.S. plants and to create or retain more than 8,500 UAW jobs.

The deals with GM and Ford also created a pathway to full-time employment for temporary workers and left healthcare insurance coverage unchanged.

Both automakers also agreed to signing bonuses, with $9,000 for full-time Ford workers and $11,000 for workers at GM.

(Reporting by Nick Carey; Editing by Leslie Adler)

FILE PHOTO: FCA’s Manley and Elkann speaks at the North American International Auto Show in Detroit, Michigan

Daimler to Ax at Least 10,000 Jobs in Latest Car Industry Cuts

November 30, 2019 / WIL BALDWIN

FRANKFURT (Reuters) – Daimler said on Friday it will cut at least 10,000 jobs worldwide over the next three years, following others in the industry as they cut costs to invest in electric vehicles while grappling with weakening sales.

It marks the third announcement on cost cuts this week by a major German car company as automakers seek to fund huge investments into cleaner and self-driving technologies while demand in China, their biggest market, is falling and a trade war between Washington and Beijing is curbing economic growth.

“The automotive industry is in the middle of the biggest transformation in its history,” Daimler said in a statement.

Daimler, the owner of Mercedes-Benz, revealed the 3% cut in its workforce after reaching an agreement on its plans with labor unions.

They have agreed on a variety of measures to cut costs and jobs, including expanding part-time retirement and a severance program to be offered in Germany. The company is also cutting 10% of worldwide management positions.

Staff reductions would be in the low five-digits, or at least 10,000 people, according to Wilfried Porth, a board member in charge of human resources. The company employed 304,680 staff at the end of the third quarter.

Plans laid out by Daimler in November showed the company aimed to cut staff costs by around 1.4 billion euros ($1.54 billion) by the end of 2022.

The announcement comes days after Volkswagen’s <VOWG_p.DE> luxury car unit Audi said it would cut up to 9,500 jobs or one in ten staff by 2025, freeing up billions of euros to fund its shift toward electric vehicle production.

Also this week, BMW said that its management and labor had reached an agreement on measures to reduce bonus and other pay schemes for staff to cut costs.

Car suppliers Continental and Osram have also announced staff and cost cuts.

Daimler has repeatedly cut its profit outlook over recent months, partly to cover a regulatory crackdown on diesel emissions but also because of a slowing auto market.

Group operating profit will be “significantly lower” than a year ago, the company said last month.

Other measures to reduce staffing costs include offering shorter working weeks.

Agreements in place to prevent forced redundancies in Germany until 2029 will remain in place, Daimler said.

The workforce needs a clear strategy for the future, said Michael Brecht, chairman of Daimler’s works council. “A reduction in capacity must not be carried out on the backs of the employees,” he said.

(Editing by Elaine Hardcastle)

The Daimler logo is seen before the Daimler annual shareholder meeting in Berlin

Lincoln Electric SUV to use Ford-backed Rivian ‘Skateboard’ Chassis

November 28, 2019 / WIL BALDWIN

DETROIT — A battery-powered Lincoln SUV, due in mid-2022, will be the first Ford Motor Co. vehicle built on a custom electrified chassis that resembles a skateboard, which was developed by Ford-backed startup Rivian, according to several people familiar with the program.

The all-wheel-drive Lincoln SUV could compete against Rivian’s R1S, an electric sport utility vehicle slated to go into production in early 2021 that will be priced from $72,500. Both models will use Rivian’s so-called skateboard, a flexible platform that combines electric motors, batteries, controls and suspension.

On Tuesday, Ford declined to comment. Rivian did not respond to a request for comment.

The new Lincoln, which carries the internal program code U787, also could compete with premium offerings from others, including General Motors Co, which plans to introduce at least two new electric SUVs by 2023, one for Cadillac and one that could revive the Hummer name, sources have said.

Ford invested $500 million in Rivian this year and plans to help it begin production next year at a former Mitsubishi plant in Normal, Illinois.

When Ford made the investment, it said it would use Rivian’s skateboard to develop its own electric vehicle, but did not disclose details.

It is not clear where Ford intends to build the Lincoln SUV, which will be among the first of several battery-powered utility vehicles planned for Ford’s premium brand in North America and China, according to supplier sources familiar with those programs who asked not to be identified.

Ford expects to introduce a compact Lincoln electric crossover in late 2021 or early 2022 and a mid-size companion in 2023, the sources said.

The U.S. auto industry plans to invest billions of dollars over the next few years to build all-electric pickups and SUVs, sectors of the market that have been among the most profitable, especially for Detroit-based automakers.

But analysts have questioned whether demand from consumers and commercial customers will come close to matching production.

Founded in 2009, Rivian has raised $1.9 billion from investors, including e-commerce giant Amazon, which has ordered 100,000 electric delivery vehicles from Rivian. The first Amazon vans will be built in Normal and are to be delivered in 2021.

Ford aims to sell an electric F-series pickup in late 2021, sources have said. It also will offer the electric Mustang Mach E SUV next year as part of plans to invest $11.5 billion by 2022 electrifying its vehicles.

China’s BAIC Willing to Increase Daimler Holding after 5% Stake Buy

November 25, 2019 / WIL BALDWIN

FILE PHOTO: BAIC Group automobile maker at the IEEV New Energy Vehicles Exhibition in Beijing

BEIJING/FRANKFURT (Reuters) – Daimler’s <DDAIF> main Chinese joint venture partner BAIC Group has signalled its intention to increase its stake in the German luxury car manufacturer, sources briefed on the matter said, after it built up a 5% Daimler holding in July.

Officials at BAIC’s listed company, BAIC Motor Corp Ltd, said at investor conferences in mid-October that “both sides are willing to increase stakes in the other”, responding to questions about future relationship between BAIC Group and Daimler, the sources said.

Daimler said in a regulatory filing on Friday that HSBC held 5.23% in Daimler’s voting rights directly as well as through instruments such as equity swaps as of Nov 15. BAIC has used HSBC to help it build its initial 5% stake.

Sources declined to be named as they are not allowed to speak to media.

A Daimler spokesman on Monday said, that the company had received notification from HSBC that the voting stake of 5% has been exceeded.

While the spokesman would not say whether BAIC played a role in the transaction, he added that Daimler welcomed long-term shareholders such as BAIC, who support the carmaker’s strategies.

“Daimler AG appreciates BAIC as long-standing partner and long-term investor,” the spokesman said in a written statement.

“Such shareholders help us to further safeguard and strengthen the capitalization of our company,” the statement continued.

BAIC was not immediately available for comment.

Geely, Daimler’s biggest shareholder with a 9.7% stake, said: “We are a long-term investor in Daimler. We do not react spontaneously to any volatility and we support Daimler’s management and their strategy.”

BAIC (Beijing Automobile Group Co Ltd) has been Daimler’s main partner in China for years and operates Mercedes-Benz factories in Beijing through Beijing Benz Automotive.

Two months before its July stake deal was announced, sources told Reuters that BAIC wanted to invest in Daimler to secure its investment in Beijing Benz Automotive.

In March, sources told Reuters Daimler had asked Goldman Sachs <GS> to help it explore increasing its stake in BAIC’s Hong Kong-listed company.

The partners also planned to revamp manufacturing facilities to make Mercedes Benz-branded trucks via their commercial vehicle joint venture Foton Daimler Automotive (BFDA), Reuters reported in August citing a document and sources familiar with matter.

The companies also said Daimler and BAIC’s new energy vehicle unit BluePark have jointly developed a battery research lab in Beijing.

State-owned BAIC built its stake after Li Shufu, chairman of rival private automaker Zhejiang Geely Holding Group, built a 9.69% stake in Stuttgart-based Daimler in early 2018.

By using Hong Kong shell companies, derivatives, bank financing and structured share options, Li kept the plan under wraps until he was able, at a stroke, to become Daimler’s single largest shareholder.

Since the investment, Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture.

Zhejiang-based Geely owns Volvo while BAIC in addition to Daimler has a partnership with South Korea’s Hyundai Motor <HYMTF>.

Daimler said it had collaborated with BAIC in areas such as production, research and development and sales since 2003.

(Reporting by Yilei Sun and Edward Taylor; additional reporting by Arno Schuetze and Ludwig Burger; editing by Brenda Goh, Jason Neely and Louise Heavens)

China’s BAIC willing to increase Daimler holding after 5% stake buy – sources
FILE PHOTO: Ola Kaellenius, Chairman of the Board of Management of Daimler AG, speaks at a media event during the Guangzhou auto show in Guangzhou

GM Sues Fiat Chrysler Claiming UAW Bribes Cost it Billions

November 20, 2019 / WIL BALDWIN

General Motors filed a racketeering lawsuit Wednesday against Fiat Chrysler.

GM accused its smaller rival of making bribes over many years to corrupt the bargaining process with the United Auto Workers.

GM said it will seek “substantial damages” as part of the remedy. Although it did not specify an amount, it said the bribes cost it billions of dollars.

In the lawsuit, America’s biggest automaker accused Fiat Chrysler, under the leadership of now deceased CEO Sergio Marchionne, of bribing UAW officials into allowing it to pay lower wages than GM, use more temporary workers than GM and employ more lower-paid second-tier workers than GM.

Fiat Chrysler said in a statement it is “astonished by this filing, both its content and its timing” and said it assumes the lawsuit was intended to disrupt the labor negotiations tied to merger talks between it and Peugeot owner PSA.

Union officials from the UAW fired back in a separate statement, saying the fact these issues can cause doubts about the contract is “regrettable” and it stands by the terms previously negotiated with Fiat Chrysler.

The UAW has been the focus of a spreading federal corruption probe that recently forced its president to seek a leave of absence.

The lawsuit comes at a precarious time for Fiat Chrysler, not only is it in aforementioned merger talks – it is also in the midst of negotiating a four-year contract with the UAW.

GM said the lawsuit has nothing to do with the merger or the union and is solely focused on Fiat Chrysler.

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