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Since becoming the CEO of Ford, Jim Hackett, and his management staff has had a difficult time of convincing folks about the ambitious restructuring plan that will see the lineup become more dependent on crossover and trucks, and job cuts. One group that has been quite worried about the plan are dealers. "There's been a lot less exposure to senior management. There's just not enough information flowing down to dealers about where the company's headed," said Jack Madden, owner of Jack Madden Ford to Automotive News. Ford is hoping to ease dealers later this week at the company's national dealer meeting in Las Vegas. Aside from seeing a number of new products, including the next-generation Escape and Explorer, Hackett and his team will be taking questions from dealers about the future direction of the company. "It's the right medicine at the right time," Rhett Ricart, CEO of Ricart Automotive Group in Groveport, Ohio. "I think it will be a huge jolt for dealers' attitudes." Dealers aren't the only group who are wanting more information. Ford's 70,000 salaried workers around the world have been told that the $11 billion restructuring plan will include job cuts, but not providing any specifics on numbers or how or when the cuts will take place. The cuts were announced in a video message sent to employees. "In Ford's history, we have streamlined organizations but we rarely removed work, causing each team member to have to do more with less," Hackett said in the video, according to a transcript Ford provided to AN. Employees were told the upcoming changes would be made using "a cascading process that will involve many of you" and that they will work to eliminate "low-value" tasks. "While redesigning the organization is important and it's necessary work, it's not going to be easy. But it is fundamental to us becoming the business we need to be," said Hackett. Ford say the message wasn't about job cuts and "said employees have appreciated the way it is handling the news." But AN reports that some employees became confused with the message being provided. Some experts say giving employees information about impending job cuts early on allows for more preparation and gives more time to look for another job. But some point out the way Ford announced the move could actually damage morale. "In an absence of any information, it's stressful. People are going to be looking for more direction from the company," explained Carol Olsby, a human-resources consultant and author. Source: Automotive News (Subscription Required) View full article

The threat of a 20 percent tariff on vehicles exported from the European Union has a number of automakers panicking. But that tariff could be taken off the table if the EU removes their tariff on vehicles exported from the U.S. German paper Handelsblatt learned from sources that a meeting was held between the US ambassador to Germany, Richard Grenell and number of CEOs from German automakers. Grenell presented an offer directly from President Donald Trump - "elimination of all tariffs on automobile imports on both sides and removal of non-tariff barriers, such as regulations on the size of rear mirrors." Currently, the U.S. levies a 2.5 percent tariff on vehicles imported from EU. A 10 percent tariff is slapped on by EU members on vehicles imported from the U.S. The hope is that German automakers can put some pressure on the government to possibly bring this up with other EU members. Diamler, Volkswagen, the German Economy Ministry, and the European Commission declined to comment when asked by Reuters. Source: Handelsblatt, Reuters View full article

There were serious concerns before the beginning of Tesla's annual shareholders meeting mostly due to CEO Elon Musk's erratic behavior over the past month or so. But Musk was on his best behavior during the meeting, where some big announcements were made. On the business front, Tesla shareholders voted to keep Antonio Gracias, James Murdoch, and Kimbal Musk on the board, despite criticisms from a group of shareholders that they aren't fully independent from Musk. There was also the proposal of splitting the chairman and CEO posts held by Musk, with one investor saying it has become difficult for Musk to oversee the company. This motion would be defeated. "At Tesla we build our cars with love. At a lot of other companies, they're built by marketing or the finance department and there's no soul. We're not perfect but we pour our heart and soul into it and we really care," said Musk, choking up on the mic after the voting took place. From there, Musk went on to talk about what's in the pipeline for Tesla. He started with the Model 3 by claiming it was the best selling mid-sized premium sedan in the U.S. and had a graph to prove it - though we're a bit dubious as to this claim since the graph doesn't label the x and y axises. Musk also claimed that Tesla is producing 3,500 Model 3s per week and is “quite likely” to be building 5,000 of the sedans a week by the end of this month. This will happen through the addition of a third production line at their Freemont, CA Plant. “The biggest constraint on output is general assembly. We can probably get to 5,000 a week with the current two general assembly lines. But with the third one, I’m highly confident that we can exceed 5,000 units per week,” said Musk. Production of the mystical $35,000 Model 3 will begin sometime early next year according to Musk. In other product news, the Model Y crossover was teased once again. The current plan is to reveal it next March with production to begin in 2020. Autopilot made some news during the meeting as Tesla announced a new free trial to owners who haven't decided to opt-in. Musk revealed that a planned Autopilot upgrade will begin rolling out later this week and promises a marked improvement. Other news from the meeting: Tesla will be adding another plant in Shanghai. The plant will produce battery packs, cars, and powertrains. More details may be announced as soon as next month. Musk also revealed plans to build a plant in Europe towards the end of this year. Tesla service centers will be increasing in size and adding body shops. This could solve one of biggest issues of the current system to repair Teslas involved in accidents. Currently, Tesla requires a body shop to order parts directly from the factory, which takes weeks for parts to be delivered. The semi-truck has been going through various revisions in terms of design and powertrains with the goal of making it a world-wide vehicle. Source: Bloomberg, (2), Reuters, Roadshow View full article

Yesterday, Ford held its annual shareholder meeting and executives were once again defending the decision to cut most of their car lineup and focusing on trucks and utility vehicles. Automotive News reports that shareholders questioned CEO Jim Hackett and Executive Chairman Bill Ford about the move and the two said the changes are necessary due to the changing tastes of customers. Ford expects 90 percent of its North American mix to be made up of trucks and utility models by 2020. "This doesn't mean we intend to lose those customers. We want to give them what they're telling us they really want. We're simply reinventing the American car," said Hackett. "We don't want anyone to think we're leaving anything. We're just moving to a modern version. This is an exciting new generation of vehicles coming from Ford." Bill Ford blamed the media coverage for the negative reaction to this move. The company officially made the announcement during their first-quarter earnings reports, but rumors of this move had been floating around for over a year. "I wish the coverage had been a little different. If you got beyond the headline, you'll see we're adding to our product lineup and by 2020 we'll have the freshest showroom in the industry. The headlines look like Ford's retreating. In fact, nothing could be further from the truth." We have to think a fair amount of this 'negative' media coverage comes from Ford comes from the lack of information concerning the future of Ford's entry-level lineup and Lincoln. Ford's entry-level crossover is the EcoSport which begins at $19,995 and only returns EPA figures of 27 City/29 Highway/28 Combined (23/25/29 for the AWD model), which will push some buyers away. We don't know if Ford is planning an update to the EcoSport to boost fuel economy figures or has another model in the cards to sit underneath the EcoSport. Lincoln's future is murkier. The only comment made about the brand was by Hackett, saying the Continental (only introduced two years ago) would continue "through its life cycle". This is leading a fair number of people to think the Continental's days are numbered. For now, Ford is focusing on their $25.5 billion cost-cutting goal by 2022 and getting those trucks and SUVs out the door. The hope is this will help Ford's stock price, which has been a major point of contention with shareholders for many years. "I share your frustration. The whole management team does. Look, we want to get the stock price moving. The business can get fitter, and it will get fitter," said Bill Ford. Source: Automotive News (Subscription Required) View full article

The CEOs of Detroit's three automakers met with President Donald Trump this morning to talk about investments. Specifically, investments into U.S. manufacturing. "We have a very big push on to have auto plants and other plants -- many other plants," Trump told reporters at the meeting. “We’re going to make the process much more simple for the oil companies and everybody else that wants to do business in the United States.” During the meeting, Trump told the CEOs that he plans on cutting corporate tax rates to 15-20 percent, and reduce regulations by 75 percent. “We think we can cut regulations by 75 percent. Maybe more. When you want to expand your plant, or when Mark wants to come in and build a big massive plant, or when Dell wants to come in and do something monstrous and special -- you’re going to have your approvals really fast,” said Trump. One regulation that is likely going to be shown the door are the EPA's 2025 fuel economy regulations which were set in stone during the final days of President Obama's tenure. Automakers have been asking President Trump to rethink the aggressive mandates set by the agency. “I am, to a large extent, an environmentalist. I believe in it. But, it’s out of control,” said Trump. After the meeting, Ford CEO Mark Fields seemed the most upbeat when speaking to reporters. "As an industry we're excited about working together with the president," said Fields. GM CEO Mary Barra said she sees a “huge opportunity” with working with the president to “improve the environment, improve safety and improve job creation.” FCA CEO Sergio Marchionne was less enthused than the other two, stating the meeting was a positive one. Source: Automotive News (Subscription Required), Detroit Free Press View full article