A Tesla logo on a Model S is photographed inside of a Tesla dealership in New York
Tesla Inc <TSLA> has cut prices of its electric vehicles by as much as 6% in North America following a decline in auto demand in the region during weeks of lockdown that have now started to ease.
Tesla also said its Supercharger quick-charging service will no longer be free to new customers of its Model S sedans and Model X sport utility vehicles (SUV’s).
Auto retail sales in the United States likely halved in April from a year earlier, showed data from J.D. Power. However, sales in May are likely to improve due to pent-up demand and incentives offered by most carmakers, the analytics firm said.
Automakers including General Motors Co <GM>, Ford Motor Co <F> and Fiat Chrysler Automobiles NV <FCAU>, are offering 0% financing rates and deferred payment options for new purchases.
Factories in the United States started to reopen earlier this month with suppliers gearing up to support an auto industry employing nearly 1 million people.
Tesla was briefly forced to stop work at its Fremont, California, factory due to stay-at-home orders. It resumed production after resolving a dispute over safety measures with local authorities.
On Wednesday, Tesla website’s showed the starting price for its Model S sedan is now $74,990, down from $79,990.
Its Model X SUVs are now priced at $79,990, from $84,990, and the lowest-priced Model 3 sedan is $2,000 cheaper at $37,990.
Tesla said it will also cut prices in China – as per usual after price adjustments in the United States – by around 4% for the Model X and Model S.
Tesla China, which is delivering Model 3 sedans from its Shanghai factory, in a Weibo post said it has also cut prices for the Model S and Model X cars it imports, but will keep prices of locally made Model 3 cars unchanged.
(Reporting by Yilei Sun and Brenda Goh; Editing by Tom Hogue and Christopher Cushing)
Textron Aviation Inc., a Textron Inc. (NYSE:TXT) company, today announced the successful first flight of its new twin utility turboprop, the Cessna SkyCourier. The milestone flight is a significant step toward entry into service for the clean-sheet aircraft, and it kicks off the important flight test program that validates the performance of the Cessna SkyCourier.
“Today was an exciting day for our employees, our suppliers and our customers. The Cessna SkyCourier performed exactly as we expected, which is a testament to the entire team of men and women who worked together to prepare for this day,” said Ron Draper, president and CEO, Textron Aviation. “I’m proud of the way the team has persevered through disruptions caused by the COVID-19 global pandemic and remained focused on getting us to this point. The Cessna SkyCourier will be an excellent product in its segment due to its combination of cabin flexibility, payload capability, superior performance and low operating costs. Our customers will be very pleased with what they experience from this aircraft.”
The Cessna SkyCourier took off from the company’s east campus Beech Field Airport, piloted by Corey Eckhart, senior test pilot, and Aaron Tobias, chief test pilot. During the 2-hour and 15-minute flight, the team tested the aircraft’s performance, stability and control, as well as its propulsion, environmental, flight controls and avionics systems.
“We were very pleased with how the Cessna SkyCourier performed throughout its first flight,” Eckhart said. “It was particularly impressive to see how stable the aircraft handled on takeoff and landing. The Cessna SkyCourier already displays a high level of maturity in its flight characteristics, especially for a first flight. We were able to accomplish everything we wanted on this flight, and that’s an excellent start to the flight test program.”
The prototype aircraft, along with five additional flight and ground test articles, will continue to expand on performance goals, focusing on testing flight controls and aerodynamics.
Relentless capability
The Cessna SkyCourier, featuring Pratt & Whitney Canada PT6A-65SC engines, will be offered in various configurations including a 6,000-pound payload capable freighter, a 19-seat passenger version or a mixed passenger/freight combination, all based on the common platform.
The Cessna SkyCourier is designed for high utilization and will deliver a combination of robust performance and lower operating costs. Cessna SkyCourier will feature the popular Garmin G1000 NXi avionics suite and offer highlights such as a maximum cruise speed of up to 200 ktas and a maximum range of 900 nm. Both freighter and passenger variants of the Cessna SkyCourier will includer single-point pressure refueling as standard to enable faster turnarounds.
(Reuters) – Boeing Co suppliers Hexcel Corp and Woodward Inc on Monday called off their planned all-stock merger as widespread travel bans to curb the coronavirus pummels demand in the aerospace sector.
The companies, which make and supply aircraft parts, had agreed to a merger in January in a $6.4 billion deal.
“Although we are disappointed with this outcome, we are confident this is the right decision for our customers, our shareholders, and our employees,” the companies said in a joint statement.
The market rout triggered by the coronavirus pandemic and the resulting economic downturn has thrown a wrench into corporate deal making. Last month U.S. printer maker Xerox Holdings Corp walked away from its $35 billion hostile cash-and-stock bid for HP Inc.
Boeing, which halted the production of its grounded 737 MAX aircraft in January, said on Sunday it would extend the suspension of production at its Washington state facilities until further notice.
Boeing is Hexcel’s second-biggest customer, accounting for a quarter of the company’s annual sales. Hexcel also supplies Airbus SE.
Woodward gets about 15% of its annual sales from Boeing, its biggest customer.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta and Devika Syamnath)
Boeing is extending the temporary suspension of production operations at all Puget Sound area and Moses Lake sites until further notice. These actions are being taken in light of the company’s continuing focus on the health and safety of employees, current assessment of the spread of COVID-19 in Washington state, the reliability of the supply chain and additional recommendations from government health authorities.
During the suspension, the company will continue to implement additional health and safety measures at its facilities to protect employees. These measures include new visual cues to encourage physical distancing, more frequent and thorough cleaning of work and common areas and staggering shift times to reduce the flow of employees arriving and departing work, among many other improvements.
“The health and safety of our employees, their families and our communities is our shared priority,” said Boeing Commercial Airplanes President and CEO Stan Deal. “We will take this time to continue to listen to our incredible team and assess applicable government direction, the spread of the coronavirus in the community and the reliability of our suppliers to ensure we are ready for a safe and orderly return to operations.”
The volunteers who have been supporting essential site and services work should continue to report to their assigned shifts. Puget Sound area and Moses Lake employees who can work from home should continue to do so.
As the suspension of operations continues, Boeing will monitor government guidance and actions on COVID-19 and associated impact on all company operations. Boeing sites that remain open are being monitored and assessed on a daily basis.
We thank the Administration, especially the President and Secretary Mnuchin, as well as the Senate for working together to take swift bipartisan action to support the American economy, including the 2.5 million jobs and 17,000 suppliers that Boeing, the aerospace industry and the U.S. rely on to maintain our world leadership in commercial, defense and services. The bill’s access to public and private liquidity, including loans and loan guarantees, is critical for airlines, airports, suppliers, and manufacturers to bridge to recovery.
Boeing’s top priority is to protect our workforce and support our extensive supply chain, and the CARES Act will help provide adequate measures to help address the pandemic. We have also taken a number of measures for affordability and liquidity as we navigate the challenges our industry currently faces, including forgoing pay for our CEO and board chairman, suspending our dividend until further notice, and extending our existing pause of any share repurchasing until further notice.
We appreciate the House taking swift action to support the American people.
MONTREAL/PARIS (Reuters) – Europe’s Airbus SE <EADSY> is likely to acquire Canadian plane and train maker Bombardier Inc’s <BBD-B.TO> remaining stake in the A220 passenger jet program, two industry sources said.
A deal for Airbus to buy the 33.58% share in the program was widely expected after Bombardier said in January it was reviewing the stake in the joint venture. Barring surprises, a deal is expected next week ahead of both companies’ earnings reports on Feb. 13, the sources added.
Airbus and Bombardier both declined to comment. The terms of a potential deal that would mark Bombardier’s exit from commercial aviation were unclear.
Bombardier, which is weighing additional asset sales, faced a cash crunch in 2015 due to its high-stakes bet on the technologically advanced narrowbody.
Bombardier shares closed up 2.8%.
Montreal-based Bombardier ceded control of the program to Airbus in 2018 for a token C$1 as part of broader efforts to improve its finances. It retained a minority stake alongside the Canadian province of Quebec.
Bombardier had warned the program would require additional cash to ramp up production, and could be subject to a writedown, as it faces higher-than-expected costs in its rail division and more than $9 billion of debt.
Since Airbus took over the program, the A220 has seen a sharp pickup in sales to 658 orders as of Jan. 31. But it has not seen the cost declines expected from Airbus applying its greater purchasing power with suppliers, one of the sources said.
A deal would leave Airbus to shoulder additional investments required by the plane program.
“Airbus did not particularly want to do this at this time, but is presented with little choice if Bombardier is pulling back,” the second source said.
Airbus, with a 50.6% stake in the program, delivered 48 A220 jets in 2019 and is ramping up production toward its maximum monthly capacity of 10 jets in Mirabel, Quebec, and four planes at a second line in Alabama by mid-decade.
Airbus Chief Commercial Officer Christian Scherer told Reuters in January the company was progressing toward its target of a double-digit percentage reduction in the A220’s production costs.
Quebec, with a 16.36% stake in the A220 program, would not invest further. Rather, it is trying to protect the program’s estimated 2,700 jobs, along with the province’s $1 billion investment in the program, Economy Minister Pierre Fitzgibbon said on Monday.
“We put $1 billion in it and that’s enough.”
(Reporting by Allison Lampert and Tim Hepher in Paris; Editing by Diane Craft, David Gregorio and Richard Chang)
With parts from nearly 250 suppliers, Alstom trainset production creates 1,300 new jobs
HARVEY, Ill. – The Amtrak partnership with Alstom to produce the next generation of Acela trains to move customers at higher speeds and more comfort between Boston and Washington is also boosting businesses nationwide. Today, Amtrak and Alstom thanked workers at LB Steel in Illinois for building wheel assemblies (known as “bogies” or “trucks”) and other components.
“While these new trains will provide world-class accommodations for customers traveling in the Northeast, this production will benefit communities across the country by creating jobs and stimulating local economies,” said Amtrak Executive Vice President Roger Harris, who led the visit to the factory south of Chicago. “The fastest trains in the hemisphere – at speeds up to 160 mph – will ride on the work done here in Harvey at LB Steel.”
Alstom is using parts manufactured by nearly 250 suppliers in 27 states, with 95 percent of the components produced domestically. More than 1,300 new jobs will be generated in nearly 90 communities across the United States to support production, including the creation of new, sustainable, high-tech, engineering and manufacturing jobs in New York.
“We are proud to have been selected by Amtrak, not only to design and build the new Avelia Liberty high speed trainsets, but also to provide long-term technical support, and supply spare components and parts for the maintenance of the new trains.,” said Michael MacDonald, Site Managing Director for Alstom in Hornell, N.Y., who also participated in the news event south of Chicago. “Alstom is partnering with suppliers across the country for this project, and the emergence of a high-speed rail manufacturing industry here in the U.S. is becoming a reality.”
The trains are being produced at Alstom’s Hornell facility, which is undergoing a massive investment and transformation to build the 28 high-speed trainsets for Amtrak. One of three new structures has been built to accommodate fleet manufacturing and testing and a new bridge has been built to extend the site’s current test track to accommodate higher speeds.
The new trains are scheduled to enter service in the Northeast Corridor in 2021 and will accommodate nearly 25 percent more customers while continuing the spacious, high-end comfort of the current Acela service that customers enjoy today. Each train will feature modern amenities such as improved Wi-Fi access, personal outlets, USB ports and adjustable reading lights.
The new Acela trains are part of an Amtrak plan to modernize and upgrade our fleet. Last year, Amtrak refreshed the interiors of the current Acela trains and Amfleet I railcars and announced plans to acquire 75 new locomotives for Amtrak’s long distance and state-sponsored services. This year, Amtrak performed similar work on Amfleet II railcars and announced plans to start next year to refresh Superliner cars used on long distance services. Refreshing of Horizon railcars in the Amtrak MidwestSM network is also now underway with state partner support.
New high-speed Acela train sets for the Northeast Corridor when they enter service in 2021. Check out the first prototype (still under construction) being assembled at Alstom’s Hornell, New York facility.
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
FILE PHOTO: Emirates Airline Boeing 777 planes at are seen Dubai International Airport in Dubai
DUBAI (Reuters) – An eight-month crisis over the grounding of Boeing’s 737 MAX jets and widespread industrial delays are setting an unpredictable backdrop to next week’s Dubai Airshow, with some airlines reviewing fleet plans even as others look for bargains.
The biennial civil and military expo is a major showcase for wares from jumbo jets to military drones but faces growing questions over demand and the capability of overstretched suppliers, delegates arriving for the Nov. 17-21 event said.
Top of their agenda will be the worldwide grounding of the 737 MAX in the wake of two deadly crashes.
Investors who have pushed up Boeing <BA> shares believe the planemaker is turning a corner after the eight month grounding, with the company predicting commercial flights in January. But it also faces a logjam of undelivered jets that could take 1-2 years to unwind.
State-owned flydubai expects its fleet will now shrink by a third this year, highlighting the cost of the grounding for the biggest MAX customer outside the United States. “Flydubai has very big ambitions … given the scale of those ambitions, there’s little they can do but wait and watch, like everyone else,” said Teal Group analyst Richard Aboulafia.
Boeing lost one potential MAX customer earlier this year as Saudi budget airline flyadeal ditched a provisional order.
Experts say airline frustrations with plane and engine makers could also disrupt plans by the world’s largest jetmakers pushing for order endorsements. The Middle East’s largest aerospace event will give Airbus <EADSY> and Boeing a chance to sit with some of their top customers who have threatened to walk from billions in deals.
The planemakers are struggling to deliver aircraft on time, forcing airlines to delay expansion plans, while engines on some jets are consistently causing issues for carriers.
“This seems to be a systemic issue across the board,” said Novus Aviation Capital Managing Director Mounir Kuzbari.
“As a result, we see stress on the relationship between airlines and the plane and engine makers.” Dubai’s Emirates, by far the region’s biggest airline, has issued a stern warning to plane and engine makers. It will no longer take delivery of aircraft that do not meet performance expectations, raising doubts over $35 billion in pending orders.
Airbus, Boeing and engine makers will be looking to allay concerns as they finalise jet sales with Emirates, which is also looking at reducing an order for the delayed Boeing 777X.
Airbus is seen close to a final order for A330neo and A350 jets while Boeing aims to salvage a provisional order for 787s.
GULF PRESSURE
Air Arabia could, however, steal the show with a planned order of up to 120 Airbus jets, industry sources say.
Kuwait’s Jazeera Airways is in negotiations with Airbus and Boeing for around two dozen airplanes.
Past editions of Dubai’s premier trade event have featured blockbuster deals, often led by Emirates as Gulf carriers redrew the aviation map around their ‘super-connector’ hubs.
But the Gulf hub model is increasingly under pressure as the once-rapid growth of the region’s biggest airlines slows.
“The market continues to be weak for all airlines in the region; we should see a further 2-3% reduction in passenger numbers for the full year,” said Diogenis Papiomytis, Frost & Sullivan’s Global Program Director for Commercial Aviation.
Middle East military leaders touring the displays will try to gauge whether they are on the cusp of another regional splurge on weapons after an escalation in Gulf tensions.
A series of attacks over the summer has highlighted potential security gaps among some of the world’s top defence spenders who now increasingly buy from China and Russia.
(Reporting by Alexander Cornwell, Tim Hepher, Ankit Ajmera, Stanley Carvalho; Editing by Mark Potter)
FILE PHOTO: Supercar Hongqi S9 is unveiled next to FAW Group Chairman Xu Liuping at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany. September 10, 2019. REUTERS/Wolfgang Rattay/File Photo
FRANKFURT (Reuters) – Chinese suppliers and manufacturers have stepped up their presence at the Frankfurt auto show, capitalizing on a strong position in electric technologies forced on European carmakers by regulators seeking to curb pollution.
Though the number of exhibitors has fallen to 800 in 2019 from 994 in 2017, Chinese automakers and suppliers now make up the biggest foreign contingent, with 79 companies, up from 73.
Several European and Japanese carmakers including Fiat , Alfa Romeo, Nissan and Toyota have skipped the show as the industry cuts costs.
Europe’s automakers face multibillion-euro investments to develop electric and autonomous cars, forcing them to rely on Chinese companies for key technologies such as lithium ion battery cell production, an area where Asian suppliers dominate.
German firms are striking major deals with Chinese suppliers to help them meet stringent EU anti-pollution rules, which were introduced in the wake of Volkswagen’s 2015 emissions cheating scandal.
“All carmakers face the challenge that they will have to fulfill fleet consumption targets,” Matthias Zentgraf, regional president for Europe at China’s Contemporary Amperex Technology, told Reuters.
Zentgraf said he expected further supply deals to be struck in Europe this year following agreements with BMW and Volkswagen.
Daimler on Wednesday said it had chosen China-backed Farasis Energy to supply battery cells for its Mercedes-Benz electrification push.
Farasis is building a 600 million euro ($663 million) factory in east Germany, close to where Chinese rival CATL is erecting a 1.8 billion euro battery plant.
SVOLT Energy Technology, which was carved out of China’s Great Wall Motor Co, told Reuters it would start building battery cells in Europe at a new 2 billion euro plant in 2023.
TIPPING POINT
Chinese companies are also giving Europe more attention since the United States and China embarked on a global trade war, which has resulted in tariffs.
“We put Europe up in priority,” said Daniel Kirchert, chief executive of Chinese electric car maker Byton.
“We are at a tipping point” for acceptance of electric vehicles in Europe, Kirchert, a former BMW executive, added.
Byton has taken its prototype vehicles on road shows in Europe, and received expressions of interest from 20,000 customers, he said. In electric vehicle hot spots, such as Norway and the Netherlands, “we see a very positive response.”
Byton plans to export vehicles from its factory in Nanjing, to Europe in 2021, Kirchert said, adding that exporting to the United States would be a challenge if Washington and Beijing did not resolve their trade war.
He said Byton still hoped to launch in the United States in 2021, but tariffs would threaten the company’s goal of selling vehicles at a starting price of about $45,000.
“We decided no matter what” Byton will launch in the United States, even at a higher price, he said.
China’s Great Wall Motor may consider building car manufacturing facilities in the European Union once its sales there hit 50,000 units a year, its chairman told Reuters at the show.
German carmakers have been forced to accelerate electrification plans after the EU imposed a 37.5% cut in carbon dioxide emissions between 2021 and 2030 in addition to a 40% cut in emissions between 2007 and 2021.
PSA Group Chief Executive Carlos Tavares used the show to step up criticism of Europe’s aggressive approach toward emissions limits.
“The word dialogue has become meaningless in Europe,” he said, referring to the requirements placed on the auto industry.
“Politicians can decide rules without any discussion with industry,” he told journalists on the sidelines of the show.
Electric cars made up only 1.5% of global sales last year, or 1.26 million of the 86 million passenger vehicles sold, JATO Dynamics said.
If carmakers fail to meet the 2021 targets they could face a combined 33 billion euros in fines, analysts at Evercore ISI have estimated.
They also estimate it will cost the auto industry an aggregate 15.3 billion euros to comply, assuming a 60 euro cost per gram to reduce CO2 emissions for premium carmakers and 40 euros per gram of CO2 reduction for volume manufacturers.
(Writing by Edward Taylor; Editing by Mark Potter)
A woman cleans the prototype of a Chinese car at the IAA Auto Show in Frankfurt, Germany, Monday, Sept. 9, 2019. The IAA officially starts with media days on Tuesday and Wednesday. (AP Photo/Michael Probst)
