Listen to “AD #2766 – Ford 2019 Earnings Abysmal; Cadillac Reveals All-New Escalade; Kia Unveils New SUV” on Spreaker.
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Runtime: 10:01
0:07 Ford 2019 Earnings Abysmal
0:50 Cadillac Reveals All-New Escalade
2:15 Kia Unveils New SUV
3:13 Britain Bans ICE Vehicles By 2035
3:54 Musk’s Tesla Stock Worth $30 Billion
4:36 Musk Hints at Texas Gigafactory
5:06 BMW Creates Aerodynamic Wheels for EVs
6:46 GM 2019 Earnings Surprisingly Good
7:38 Ford Blames Poor Earnings on Operational Execution
8:54 Hackett Could Be on His Way Out
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FORD 2019 EARNINGS ABYSMAL
Ford reported its financial earnings for last year and the numbers are abysmal. The company sold 5.4 million vehicles, but that was nearly 600,000 less than the year before. As a result, its revenue dropped by $4.4 billion. Its operating profit plummeted by 82% and its net profit was a meager $84 million, down 98%. No doubt results like this are going to put enormous pressure on Ford’s CEO Jim Hackett, and John has something to say about that at the end of today’s broadcast. And he will dive into GM’s earnings as well.
| 2019 FORD EARNINGS | ||
|---|---|---|
| Sales | 5.38 M | -10% |
| Revenue | $156 B | -2.7% |
| Operating Profit | $574 M | -82% |
| Net Profit | $84 M | -98% |
| Source: Ford | ||
CADILLAC REVEALS ALL-NEW ESCALADE
The all-new Cadillac Escalade is no longer a teaser, as the 2021 model debuted yesterday. The front-end design brings it more in-line with the brand’s other utility vehicles, but other than that, the overall exterior look is pretty similar. The interior was inspired by the Escala concept and is dominated by its curved OLED display screens. A 7.2-inch touch screen for driver information sits to the driver’s left, a 14.2-inch display is used for the instrument cluster and a 16.9-inch infotainment screen is off to the driver’s right. Another neat feature is an Augmented Reality navigation system that puts directional overlays on top of live street views. Since the Escalade shares its platform with GM’s other large SUVs, you’ll see some similar features and powertrain options. It has independent rear suspension, which helps clear up some interior space as well as magnetic ride control and an electronic limited slip differential. A 6.2L V8 with 420 horsepower comes standard and for the first time it will be available with GM’s new 3.0L diesel engine. Both engines are mated to a 10-speed automatic transmission. The all-new Escalade goes on sale in the third quarter of this year.
KIA UNVEILS NEW SUV
Speaking of reveals, Kia showed off its new compact SUV concept for the Indian market, called the Sonet. It’s a good-looking vehicle that has a little bit of a dune buggy vibe with large wheels and flared fenders on a small body. And we’d also say the rear pillar was inspired a bit by the Chrysler Pacifica. While there’s no pictures, the interior features a 10 and a quarter inch display screen, Bose audio system and a manual transmission. Kia says the Sonet concept previews a future production vehicle, but we don’t expect styling to change much, since the production version launches in the second half of this year.
BRITAIN BANS ICE VEHICLES BY 2035
We’ve seen a number of cities around the world introduce plans to ban the use of cars powered by internal combustion engines. And now Reuters reports, Britain is stepping up its efforts to curb pollution and will end the sale of new gasoline, diesel and even hybrid vehicles by 2035, five years earlier than planned. While automakers have over a decade to make the transition, gasoline and diesel powered vehicles still account for 90% of the car market in Britain. France also plans to ban sales of fossil fuel powered vehicles by 2040. And we expect more countries to follow suit over the coming years.
MUSK’S TESLA STOCK WORTH $30 BILLION
And the leader of the electric revolution, Elon Musk, is laughing all the way to the bank. Thanks to Tesla’s stock surge over the last few days, Reuters reports Musk’s 19% stake in the company is now worth $30 billion, which is $16 billion more than it was at the start of 2020. And he’s also in-line to receive a record breaking payout from Tesla. He doesn’t earn a salary, instead he opted for a pay package based on market value targets. And with the latest surge in Tesla’s stock, Musk has hit two targets that could unlock options worth $1.8 billion.
MUSK HINTS AT TEXAS GIGAFACTORY
And speaking of Elon Musk, he hinted that the company is looking at building a gigafactory in Texas. Yesterday, he sent out a tweet asking “Giga Texas?”, along with a poll asking users to respond with a “Hell Yeah” or “Nope.” Nearly 200,000 people have voted as of this morning with about 80% saying “Hell Yeah.” Nothing official has been announced yet but last week Musk said the company needs more battery capacity to meet future demand.
BMW CREATES AERODYNAMIC WHEELS FOR EVs
I think most aerodynamic wheels are pretty ugly, but BMW is out to change that. It’s previewing a new set of wheels that will first debut on the iX3, but will also be used on the iNEXT and i4. Plastic inserts with an aluminum surface sit overtop a cast aluminum wheel. Both the inserts and the base wheel can be painted with either a matte or polished finish and the pattern of the inserts can be switched around, so there’s a lot of customization the owner can do. Not only do they look good, but they improve performance. BMW says they reduce drag by about 5% compared to the wheels on the standard X3 and when combined with a 15% weight savings, it extends the EVs range by 10 kilometers or a little over 6 miles based on the WLTP test cycle.
And don’t forget to join us for Autoline After Hours this week. We got a great show lined up with John Manoogian, a former GM designer and the current Director of Design at the startup Quadrobot. Also joining us for that show is Lindsay Brooke from SAE International. So if you have any questions about the design world, send them our way to viewermail@autoline.tv. And join us at 3PM Thursday afternoon for some of the best insider discussions in the industry.
GM 2019 EARNINGS SURPRISINGLY GOOD
General Motors reported its earnings this morning and considering the company was hit by a 40-day strike by the UAW, the numbers look surprisingly good. GM sold 7.7 million vehicles last year, down 668,000 from the year before. It earned $137 billion in revenue, which was down $9.8 billion from 2018. And yet, thanks to cutting expenses, its operating profit rose by a billion dollars to $5.4 billion. But the bottom line was off by a billion three. GM posted a net profit of $6.7 billion. If not for that strike these numbers would have been much higher, and they certainly are much better than what GM’s cross town rival achieved.
| 2019 GM EARNINGS | ||
|---|---|---|
| Sales | 7.7 M | -8% |
| Revenue | $137 B | -6.6% |
| Operating Profit | $5.4 B | +23% |
| Net Profit | $6.7 B | -17% |
| Source: General Motors | ||
FORD BLAMES POOR EARNINGS ON OPERATIONAL EXECUTION
As we reported at the top of the show Ford’s financial earnings were abysmal and the company’s CEO Jim Hackett had this to say. “Clearly, I and my team are not satisfied with this level of performance.” Whoops, I’m sorry. My mistake. That’s what Hackett said about Ford’s earnings in 2017. Here’s another thing he said about earnings. “(It’s) time to bury the year in a deep grave and grieve over what might have been.” Whoops, sorry again. That’s what he said about 2018 earnings. OK, here’s what he said about 2019 earnings. “A primary reason for that shortfall was our operational execution….(it) was simply not good enough.” Uh-oh, is he throwing Joe Hinrichs under the bus? After all, Hinrichs is in charge of operations. And there’s no question that the botched launch of the all-new Ford Explorer really hurt earnings. Think about it. Nobody at Ford should ever again criticize Tesla for its manufacturing problems. For a company that’s been building vehicles for over 100 years, the Explorer launch was inexcusable.
HACKETT COULD BE ON HIS WAY OUT
Wall Street has been highly critical of Jim Hackett almost since he became CEO. Clearly Ford’s board of directors must be thinking about Plan B. Jim Hackett will turn 65 years old on April 22. Ford has a policy that top officers must retire when they turn 65, unless the board decides to extend their contracts. My guess is that Hackett will not be invited to stay on much past his birthday.
And on that ominous note, we wrap up today’s report. Thanks for watching and please join us again tomorrow.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.
