Breaking News: Ford, Geely come to terms with Volvo's Intellectual Property

As part of Ford’s renaissance, they have been cutting costs and pumping money into research and development (R&D).  It started in 2007, when current CEO Alan Mulally was hired.  He immediately leveraged part of Ford in order to get $4 billion in operating costs, which he then sunk into R&D to bring Ford’s car offerings up to par with their foreign rivals.

The fruits of those labors are coming to fruition, with Ford’s Fusion taking Motor Trend’s Car of the Year award for 2010, and many other Ford cars being received well by American consumers.  Another thing Mulally did was to begin selling off underperforming brands that Ford owned.  First, Aston Martin was sold to a British conglomerate, and then Land Rover and Jaguar were sold to Tata Motors, an Indian company.  Ford then sold its controlling interest in Mazda, and Volvo went up for sale.

Geely, a Chinese automaker, stepped up with a bid to buy Volvo.  The problem that has been plaguing the deal is intellectual property: Ford currently shares a lot of the hardware between its Volvo and Ford vehicles.  If Ford sells Volvo, the new owner would automatically have the underpinnings to a lot of Ford vehicles.  Negotiations have been going on between Ford and Geely for some time now, and this morning it was announced that they had come to an agreement for the intellectual property.

The agreement states that Geely will get any technology that is exclusive to Volvo, but anything shared with Ford will not transfer.  This protects Ford, while still giving Geely the base they need to continue production of Volvo vehicles.

What does this mean to us, as American consumers?  It gives Geely a way into the US auto market.  For some time now, Chinese automakers have been looking to sell their cars here, but have been unable to meet environmental and safety regulations.  I believe that our marketplace is already saturated and we really don’t need any more sellers.  Car sales in 2007 were over 13 million vehicles, but since then, sales have been declining.  Even with the Cash For Clunkers program, sales in 2009 are still not above 10 million.  I just don’t think that the market can sustain any more automakers than what are already here.  Also, the sale of Volvo is not good for Ford.  Even though Volvo sold 73,078 vehicles in the US in 2008, a fairly low number, the safety features and platforms that Volvo has been developing have made their way into Ford’s vehicles, the latter underpinning the Lincoln MKS and 2010 Ford Taurus.  While the Lincoln is a niche seller, the Taurus has been well-received so far, and should sell well.  I have a feeling that Ford will want whatever Volvo develops to succeed the Taurus’ platform, and selling them off will only make things more difficult.  As always, time will tell, but I hope that Ford isn’t making a mistake by selling Volvo.

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by John Suit

Source: Automotive News

[Via http://roadreality.wordpress.com]

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Montadoras contratam para atender à demanda

O Estado de S. Paulo

Montadoras de veículos e fabricantes de autopeças chegam ao fim do ano com contratações de funcionários, redução ou suspensão de férias coletivas e até reclamações de excesso de horas extras. Neste mês, General Motors, Scania e MAN (antiga Volkswagen Caminhões) estão contratando 1.050 pessoas para a área produtiva.

O mercado passou a reagir mais fortemente desde a redução do Imposto sobre Produtos Industrializados (IPI) de carros com motor até 2.0, em dezembro, quando as vendas despencaram, após a crise de crédito. Mesmo após a volta gradual do imposto, a partir de outubro, as vendas continuaram aquecidas em relação a 2008, ancoradas nas promoções e na volta do financiamento de longo prazo.

A indústria espera encerrar o ano com produção de 3 milhões de veículos, segunda melhor marca histórica, atrás apenas de 2008, com 3,2 milhões de unidades. A queda é creditada à redução das exportações, já que o mercado interno terá recorde de vendas, com mais de 3,1 milhões de veículos, 10% mais que no ano passado.

De julho a outubro, as montadoras contrataram 2,3 mil pessoas. Mesmo com as vagas recém-abertas, as empresas não devem recuperar, até dezembro, o quadro de um ano atrás, de 126,8 mil trabalhadores.

Nas autopeças foram 8,3 mil contratações desde junho. Em outubro, o setor tinha 204,3 mil trabalhadores, ante 208 mil em dezembro do ano passado.

A MAN anunciou na segunda-feira 250 contratações para a fábrica de Resende, no Rio. A Scania iniciou na semana passada a seleção de 200 operários para a fábrica de São Bernardo do Campo (SP). Já a GM abriu no início do mês 600 vagas nas fábricas de São Caetano do Sul, São José dos Campos e Mogi das Cruzes, em São Paulo.

“A razão de as vendas internas não terem sofrido tanto está nas políticas de redução do IPI e do custo do financiamento para caminhoneiros”, diz o presidente da MAN, Roberto Cortes.

As férias coletivas este ano também serão mais curtas que em 2008, quando as fábricas chegaram a parar 50 dias. A Ford não dará férias coletivas aos funcionários da produção das fábricas de automóveis de São Bernardo do Campo (SP), Camaçari (BA) e da unidade de motores em Taubaté. Na GM, parte do pessoal só terá férias em janeiro. As demais montadoras darão férias por período máximo de três semanas.

Na Fiat, com fábrica em Betim (MG), o Ministério Público do Trabalho cobra um acordo com os funcionários para reduzir as horas extras. Segundo o Sindicato dos Metalúrgicos, os operários trabalham pelo menos oito horas semanais além do normal.

A entidade alega que o excesso de jornada afeta também toda a cadeia de fornecedores da Fiat. A empresa tem de apresente proposta de acordo até sexta-feira, mas alega que segue a legislação.

Fonte: O Estado de S. Paulo/Cleide Silva, Débora Thomé e Ivana Moreira | www.estadao.com.br

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Scrappage Success For Ford!

According to figures just released Ford have just sold their 30,000th scrappage vehicle – the vehicle in question, the good old Ford Transit!

Ford have now sold 1,100 commercial vehicles through the scrappage scheme which has been a fantastic success for them.

Ford lead the scrappage sales in the UK with Vauxhall following closely behind.

The Ford Fiesta in particular has been particularly popular during the scheme – and sales of the Fiesta recently topped the 100,000 mark (both scrappage and non-scrappage sales).

[Via http://m0torworld.wordpress.com]

Fitch on Autos

Got Fitch’s latest outlook on the auto industry.  Frankly it’s not that good.  I’m not sure what I can share/not share from the release, so I’ll try and hit the highlights here.  If you want more, you can always go to their site here and sign up for updates.

At any rate, they really tackle a couple of key, hard-hitting themes when it comes to the outlook.  First, was the forecast for 11.1 million in unit sales.  How does that compare to the historic average? Abysmal. Over the last 20 years, sales have averaged 15.7 million units (courtesy of Ward’s).

Which rolls right into the next big point – negative cash flow.  They didn’t discuss how they calculated that, but it’s safe to say they used a standard metric like free cash flow (FCF).  FCF is defined as the following:

There won’t be a lot of new CapEx (no new plants being built and most auto manufacturers are not under capacity, they’re over capacity), there will be some level of working capital expenditures, but what it’s going to boil down to is too little income to go around between all of the players.  The market is contracting.  Which is why the estimated $125Bn spent on TARP, TALF, cash-for-clunkers, and other government programs were a waste.  It was never going to stop the free-fall in net income for the industry, and it didn’t even stop GM from losing money and asking for more government money.  Ford probably got some benefit from suppliers staying in business via supplier guarantees & other forms of assistance, but Ford is on the mend without government aid.

Also, negative cash flow for Chrysler and GM means no capital market access so all of that talk of an IPO?  Total fail.

As for the companies that are left (i.e. the Japanese & Korean manufacturers), there will be a smaller market to fight for so there’s no more easy money to be made by grabbing more market share.  There may be a few more points left over to take from GM and Chrysler, but there won’t be much more.

The one other takeaway?  Unfunded pension liabilities.  The loss in the value of pension assets will make funding the future pension liabilities that much tougher.  And those liabilities continue to grow while the auto companies continue to conserve cash by reducing their contributions to the minimum amount allowed by law or contract.  It seems to me this an area the government could actually help by restructuring the liabilities of GM and Chrysler which in turn would give Ford the wiggle room it needs to restructure these liabilities.  Because these have the potential to bring the industry down.

[Via http://professorpinch.wordpress.com]

Old timer bonanza

We’re on a bit of an old timer kick here- including vintage Opels,  German-market Fords, and other European “heavy metal” (by the way, how great is it that the term “old timer” is a legal definition in the Netherlands and Germany?). It’s hard not to be intrigued by these cars – and the culture behind them – when they’re unavailable to us and differ markedly from the domestic market and its, er, culture. The same could be said about the Fords and Holdens of the Australian market.

The ultimate irony, of course, is that the cars from abroad likely looked to and took their cues from the America of yore (cool America) for inspiration- and appear to continue to do so in the culture that lives on today, albeit with a distinctly European flair. And thus the circle becomes complete.

Wonderful photographs by Mausi_Monroe.

- Gyro

[Via http://bulgogibrothers.wordpress.com]

Rolls Royce Goes HD!

Saturday, it was announced that Rolls Royce would be joining Volvo in making HD radio a standard component across all its lines for 2010!  This comes quick on the heels of an announcement from Mercedes-Benz that HD will be in all its 2010 models that have “premium feature packages.” Looks like HD has locked on with the luxury car aficionados!

That is one heck of a brand association. Rolls Royce has been known for refinement and luxury since before World War II. It is a name that has stood the test of time and retained its noble bearing throughout. The Phantom, for example,  is to cars as a tuxedo-clad James Bond is to espionage (the Sean Connery Bond). To have HD radio become a standard firmly affixes the growing medium in the luxury market and the luxury mindset.

Here is the statement from iBiquity via Radio Ink:

“We are proud to confirm the availability of HD Radio technology for yet another prestigious brand — Rolls-Royce,” iBiquity COO Jeff Jury said. “The Rolls-Royce brand is revered. This commitment to HD Radio technology as standard illustrates how digital radio’s dynamic function enhances the in-car ambiance. The addition of Rolls-Royce to the HD Radio roster truly solidifies the technology’s stature in the luxury automotive class.”

Rolls Royce  joins an array of other car makers in offering HD either as a standard or an option: BMW, Hyundai, Jaguar, Mercedes, Mini, Scion, Land Rover and Volvo. In addition, Audi, Ford, Kia, Lincoln and Mercury are soon to join their ranks and have committed to offering HD as well. Now that approximately 85% of the US is covered by HD signals, it looks like it could be a great time for a road trip!

It’s really fun watching a medium grow up. There are always growing pains, but the process always seems to yield fascinating results.  As each quarter slips by, we see more maturity in the HD radio platform. Not only are the high-end auto makers adding it in as a standard, but there is now a HD listening option for the iPhone. (See my earlier post.) The times are certainly changing, and as far as HD is concerned, changing for the better!

Image: ynguyen666 / CC BY 2.0

[Via http://radio2020.wordpress.com]