AD #2825 – GM Eliminates Dividend & Share Buyback; Audi Drops DTM for Formula E; Sporty Elantra N-Line Teased

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

FCA FOLLOWS GM & FORD PLANT TIMELINE
Yesterday we reported that FCA would open its plants in the U.S. next week, but now it’s reconsidering that. The Wall Street Journal reports that GM and Ford will reopen their U.S. plants on May 18, and FCA will probably go along with that. The UAW is opposed to opening plants too early and the state of Michigan, where the Detroit Three have their headquarters and many plants, still has a stay at home order until May 15. Even so, the UAW told local union leaders to talk with local management to explore ways to safely resume production. We hear that behind the scenes, the Detroit Three are putting enormous pressure on their suppliers to get back to work next week so there are enough parts for assembly lines to resume production. Officially, however, the automakers say they have no date set to resume production and encourage everyone to stay home.

TESLA FORCED TO POSTPONE PLANT RE-OPENING
Tesla was planning to reopen parts of its plant in Fremont, California this week, but health authorities put a stop to that. They’re maintaining their stay at home orders until at least May 3. Tesla ran into problems with the same authorities back in March when it tried to keep its plant running. Those authorities in the San Francisco Bay area were the first in the United States to issue a stay at home order, and it’s been credited with greatly limiting the spread of Covid-19.

GM ELIMINATES DIVIDEND & SHARE BUYBACK
General Motors took early steps to slash spending and raise extra cash. But clearly that wasn’t enough. Yesterday it announced it is eliminating its dividend and will stop buying back its own shares. And it’s extending a $3.6 billion revolving credit agreement until April, 2021. Automakers and suppliers are desperate to resume production and get some revenue coming in, because they’re burning through cash at a dangerous rate.

MARY BARRA EARNS MUCH LESS THAN ELON MUSK
GM announced that Mary Barra earned $21 million in total compensation last year. Not bad. But it pales in comparison to what Elon Musk earned. In a 10-K filing, Tesla reported that Mr. Musk earned $2.2 billion as part of a CEO Performance Award applicable to 2018. But it’s all paid in stock and Elon Musk will not be fully invested in those shares until Tesla’s market cap hits $650 billion. Currently, it’s at $147 billion.

AUDI DROPS OUT OF DTM TO FOCUS ON FORMULA E
Audi is making a big commitment to electrification. By 2025, it’s aiming for electric cars and plug-in hybrids to make up 40% of its sales. And to reach that goal, Audi is scaling back on motorsport activities that use internal combustion engines. Audi announced it will not participate in the DTM touring car racing series beyond 2020. Instead, it will focus on Formula E, where it already participates. Part of the reason it’s leaving DTM is to save money during the coronavirus pandemic, but it also wants to cultivate a greener image and that’s why it will be more involved in Formula E and probably in similar series in the future.

HYUNDAI TEASES SPORTY ELANTRA N-LINE
Hyundai is boosting its performance image with its N models. But it also knows it can boost sales with cars that have some of the bits and pieces from the N, but sell at a lower price. So it just officially revealed details of Elantra N-line. This is not a full-blown performance N car, but the big news announced here is that the Elantra N-Line will get a turbocharged engine. Hyundai only previously revealed that the Elantra would have a standard 2.0L 4-cylinder with 147 horsepower and a hybrid with a 1.6L engine mated to a small electric motor. Also coming to the N-Line Elantra are unique design elements and chassis upgrades. Hyundai didn’t show us any interior shots and it did a good job of hiding those design details. We did notice a small change in the rear fascia for dual exhaust and would expect a different treatment around the front air curtain vents. We’ll share more details as they come along.

ROLLS-ROYCE NOW MAKES THE ROLLS-ROYCE OF HONEY
If we have any beekeepers in the audience, you know that the global population of bees is falling fast. So Rolls-Royce is doing its part to help honey bees. It installed six beehives at its factory in Goodwood in 2017 and is ramping that up. And here’s an interesting side fact: five of the six hives are named after Rolls-Royce cars, while the other is named after its logo ‘The Spirit of Ecstasy.’ A total of about 250,000 bees make honey, which is served to guests and customers of Rolls-Royce. Makes sense. Honey, like Rolls-Royce customers is rather rich.

THE SKODA FELICIA FUN WAS AN ALL-YELLOW, LITTLE PICKUP
We’ve been enjoying these lesser-known models from Skoda’s history and here’s a newer one you may have actually heard of. In 1995 the automaker introduced a version of its small pickup, called the Felicia Fun. It was powered by a range of gasoline and diesel engines, but the real highlight of the truck – other than its bright yellow paintwork – was the rear wall of the cabin could fold and slide towards the rear, revealing two more seats. A little more than 4,000 Felicia Funs were made between 1995 and 2000 and Skoda says they’ve become sought-after collectables.

NEW PORSCHE 911 CARRERA FEATURES
The Carrera series of the Porsche 911 is getting a few new features. A 7-speed manual transmission is now offered in place of the standard 8-speed automatic. It’s only available with the Sport Chrono package, which includes things like torque vectoring, tire temperature monitor, dynamic engine mounts, Sport mode and a track app. There is no extra charge for the manual, but Porsche has not announced what the price of the package is. Another new feature is what they call InnoDrive, which improves the adaptive cruise control. Navigation data is used to calculate the proper speed to travel looking up to 3 kilometers or nearly 2 miles ahead. And lastly, Smartlift will raise the front of the vehicle about 40 mm wherever it might scrape the ground. Data is in the GPS and the vehicle will automatically raise when it comes to those spots again.

VEHICLES UNDER DEVELOPMENT MOST LIKELY TO BE CUT
IHS Markit conducted a survey of automakers and suppliers that showed R&D budgets will be cut significantly because of the coronavirus. That makes us wonder, what will happen to the vehicles that are already under development? Matteo Fini, the Executive Director of Supply & Technology at IHS Markit explains it all depends on the stage the vehicle is at in the development process.

Matteo Fini, Executive Director of Supply & Technology, IHS Markit
“Think of it this way. You have a big phase that starts from minus 60 months, from when the vehicle is actually launched from Job One let’s say, and so minus 60 months to minus 24 (months) is essentially when the whole development of that vehicle happens. So, when they’re are going to first define which sort of vehicle they want to develop at a high level, initial styling, then moving on to define that vehicle more from a technical and engineering standpoint, up to minus 24 months. Of course, each OEM is different, but minus 24 months is when they freeze the design. Now, if a vehicle is in that phase, from minus 60 to minus 24, it’s more likely to be cut. It’s more likely that if that vehicle is perhaps in the passenger car segment still at the early stage or perhaps it was a halo vehicle that they really didn’t need, it’s more likely to be cut. Anything that tends to be from that design freeze, so from that famous minus 24 months that I was mentioning to you before, to Job One is more committed because that investment has been put together, has been deployed. And obviously in that phase from minus 24 to Job One you have all of the sourcing activities. So, allocating the business to suppliers, making sure that the manufacturing capacity is there and the tooling is there. So, again it’s quite… there’s already been a certain level of capital deployment and it’s much more difficult to pull out of that.”

Matteo also discusses how future technology, like EVs and EVs will be delayed and so will the regulations that govern those technologies. You can watch that interview right now on our YouTube channel.

And with that we wrap up today’s show. Thanks for watching and we’ll see you again tomorrow.