Thursday, January 10, 2019

Volkswagen discusses using Ford's US plants to produce its own EVs

U.S. auto manufacturer Ford is talking with Volkswagen in Washington, DC about the German auto maker possibly using Ford plants to make electric vehicles and sharing its platform with Ford in the U.S.

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EVs to be manufactured may include microbuses
Back in June the two companies announced that they were planning an alliance to cooperate on some future products. Diess said that the alliance would not include equity stakes for the automakers. Volkswagen chief executive officer Herbert Deiss said recently that he is looking for a place to build the company's electric cars in North America.
EV models include classic microbuses
Although Diess did not say what exact models may be made in the U.S., they may include the I.D. Crozz and the I.D. Buzz.
The I.D. Crozz is expected to go on sale in 2021, and the I.D. Buzz in 2022. The Buzz is a remake of the classic microbus. However other possibilities include pickup trucks shown at recent auto shows that are sold worldwide.
Diess said: “We need additional capacity here in the United States, we need an additional car plant for VW and Audi combined.” Audi, which is now part of the Volkswagen group. is also planning to sell vehicles in the U.S. including several models that will be based on VW's MEB platform designed to produce more affordable models.
A recent article notes: "Volkswagen is expecting to launch at least three new all-electric vehicles in the U.S. in the next five years.The first will be the 2020 introduction of the ID, a unique electric-only that would replace the e-Golf; the much-anticipated, all-electric ID Buzz, a remake on the counterculture-icon microbus, due in 2022; and the I.D. Crozz, a rugged-hatchback spinoff. A flagship sedan, previewed by last year’s I.D. Vizzion concept, could also arrive around 2022."
Ford could use VW's EV architecture
If Ford and VW come to an agreement on sharing the development of EVs, both companies could use VW's EV architecture. VW is planning large investments in EVs up to $50 billion.
VW hopes that by just 2025 fully a quarter of all the groups' vehicles will be solely powered by electricity. They expect to have some 50 different fully battery powered vehicles plus 30 plug-in hybrids.
Using Ford plants would save VW money
Although there are some reports and rumors about VW expanding its existing plant in Chattanooga, Tennessee or even building a new plant, sharing facilities with Ford could achieve the aims of VW without the company having to invest a great deal of money in a new or expanded facility. It would help localize production as well and help shield it from currency fluctuations or trade wars.
Neither company has released any specifics about their deal, and both said they were still in the process of working out details.
Previously published in Digita Journal

Saturday, January 5, 2019

Auto union leader and PM Trudeau to fight GM closure of Oshawa plant

(November 27) Jerry Dias, the head of Unifor union that represents General Motors auto workers in Oshawa, has met with Canadian PM Justin Trudeau and was optimistic that the two will put up "one hell of a fight" to keep the plant open."

Dias and Trudeau will fight to keep the Oshawa plant open Dias claims
Dias warned that if GM is able to get away with closing the Oshawa plant it could be on track to a complete disinvestment in Canada. Dias said he is more optimistic about a solution after an hour-long meeting with PM Trudeau with his staff. Dias said: "He's certainly going to roll up his sleeves and speak to General Motors and do every thing he can to get their attention..The prime minister doesn't view it as a fait accompli — he's going to roll up his sleeves and fight with us."
Dias called the meeting constructive as they shared their disappointment at GM's decision to lay off more than 2,500 workers. Dias said that their focus will be on the families hurt by the global announcement. They discussed also their recent discussions with GM and with Trudeau's call with U.S. President Trump earlier in the day about the auto industry and how best they could stand up for those affected in both the U.S. and Canada. Dias said that Trudeau and Trump should pursue a coordinated, binational policy to stop GM from closing its plants in Oshawa, Ohio, Michigan and Maryland. Given Trump's America First policy it is unlikely that this can be successful especially since Trump has been critical of Trudeau and does not seem to get along with him.
Dias wants new tariffs on GM-made vehicles from Mexico
Dias is calling for tariffs on GM-manufactured vehicles from Mexico. He claims that while GM is making cuts both in Canada and the U.S. the company is investing more in Mexico. It already builds almost one million cars each year in Mexico. This suggestion is probably a non-starter given that Canada has just finished negotiating a three-way trade deal with Mexico and the U.S.
Dias warned that GM could intend to end up by shutting down all operations in Canada. If Oshawa closes the only assembly plant left in Canada would be in Ingersoll Ontario. That plant manufactures the Equinox which is also made in Mexico. There is a GM propulsion plant in St. Catherines Ontario that builds engines and transmissions that are then shipped to assembly plants for installation.
Dias also warned that GM's plan to divest from Canada would lead to the collapse of the Canadian auto parts industry.. Dias would like to see GM shift production of some new vehicle to Ottawa to avoid closing the plant. Right now its makes the Impala and Cadillacs. The cars are facing declining sales. It also does final assembly on two pickup models.
Union ready to take aggressive action to save Oshawa plant
If GM does not reverse its decision, Dias said that workers are ready to take prolonged action. Dias said he would meet with the president of the United Automobile Workers in the U.S. to discuss possible joint actions as the closings also effect plants in the U.S.
Dias claimed that Canada could not just sit by as GM moved more vehicle production to low-wage jurisdictions such as Mexico. The newly negotiated trade agreement probably allows GM to shift production to Mexico I expect. Dias said: "They aren't closing our damn plant without one hell of a fight. Our plant in Oshawa is not closing and we'll do whatever it takes. We're sick and tired our jobs going to Mexico. Period. We will do anything to stop that. We need a very aggressive strategy."
Dias has a friendly relationship with the federal Liberal government as he worked closely with the government as it renegotiated NAFTA with the U.S. after the U.S. made a deal with Mexico.
As the appended video shows the Oshawa plant has seen declining production for years and its size is a mismatch with its present level of production. It is highly unlikely that GM will try to keep the plant open especially when the Liberal government seems clearly not interested in pushing for this. Trudeau is much less reactive to the closures than Trump.
Trudeau vows to help
Trudeau vowed to help get GM workers 'back on their feet' as GM stood firm on closing the Oshawa plant. This does not seem to be in sync with Dias' view which is to keep the plant open. Innovation Minister Navdeep Bains also said the government was ready to support the 2,500 workers who will be affected by the closing of the plant. Both have pointed out that GM appears unwilling to change its mind about closing the plant as it is pursuing a broad plan of global restructuring. GM argues that the closure are required because of shifts in consumer buying patterns.
The response of the Liberal government makes it clear that they are not even contemplating a big fight to save the Oshawa plant from closing. Instead they will provide those laid of with some unspecified form of assistance.
GM has had financing of a bailout through large government loans
The Canadian economist Jim Stanford tweeted: "A black day for Oshawa, and for Canada. This is what financialization and globalization hath wrought. GM paid out $25b in dividends & other cash to shareholders in last 5 yrs. Its manufacturing is high-quality and profitable. But still that's not enuf: coupon-clippers demand more"
In June 2009, GM filed for bankruptcy protection. In its filing in U.S. Bankruptcy Court, it said it had $82.29 billion US in assets and $172.81 billion in liabilities as of the end of that fiscal year. The Canadian Ontario and Federal government provided GM about $9.5 in financial aid. The governments received an 11.7 percent stake in GM in return.
Both the U.S. and Canadian government received shares in GM although they sold quite a few in 2011. The Canadian federal government sold off its last shares in 2015. In October, Export Development Canada showed there was an outstanding loan to the GM Corp. of more than $1 billion. The government apparently wrote off over $1 billion owed by Chrysler.

Previously published in Digital Journal