The Morning ShiftAll your daily car news in one convenient place. Isn’t your time more important?
The top news today is probably a giant deal to save Aston Martin, but you should also read about Tesla facing potential delays from wolves and snakes, and I don’t mean metaphorical ones. All that and more in The Morning Shift for Friday, January 31, 2020.
1st Gear: For Once, Geely Didn’t Get To Buy Up Another Struggling Carmaker
Chinese auto mini-empire Geely has bought up and into struggling car companies all over the world, from Volvo to Proton to Lotus. As of only a few hours ago, it was Geely bidding to invest several hundred million dollars into Aston Martin.
The little British independent makes the same lovely gas-burning sports cars and GTs it always has, but it has been having a hard time transitioning to EVs and getting an SUV into production. For that, it has needed cash.
The news today is that Geely lost out in its bidding to none other than F1 driver Lance Stroll’s dad, Lawrence Stroll. Stroll the elder made his money backing Tommy Hilfiger, among other fashion brands. He is a big Ferrari fan but now has his own F1 team, which conveniently provides a seat for his son, Lance. That team, formerly Force India and currently Racing Point, will become an Aston Martin factory effort, as the Financial Times reports.
The details of the investment are slightly more complicated, per the FT:
Aston Martin will raise £500m in a rescue deal led by Canadian Formula 1 billionaire Lawrence Stroll as the luxury carmaker attempts to draw a line under a period marked by a calamitous initial public offering.
A consortium led by Mr Stroll will inject £182m for a stake of 16.7 per cent in the company at a price of £4 per share, while Aston will raise a further £318m via a rights issue after the company’s results next month.
Shares in Aston surged almost 30 per cent in early trading on Friday.
Bloomberg also reports that “[h]e edged out rival suitor Geely, which also sought to invest in the sports-car maker” and gave a bit of clarification as to what’s going to change for Aston:
Stroll’s presence will help steer the company toward its aim of becoming a luxury-goods company, [Chief Executive Officer Andy] Palmer said. “It’s going to change the dialogue in the boardroom,” he said. “The dialogue will change from automotive to luxury.”
All right yeah that’s nonsense. The actual business change is that Aston is stepping back from EVs, as the FT notes:
As part of the rescue, the company will delay investments into a suite of electric vehicles — which had been expected from 2022 — until after 2025, and has pushed back the release of its Ferrari-rival supercar until 2022. Investment will instead go into a V6 hybrid engine, which the company has said will be manufactured in the UK, and will help it reduce CO2 output from its cars. At present Aston uses V8 and V12 engines.
This is annoying, as EVs are kind of interesting but F1-style hybrid V6s are a struggle for even the most ardent car enthusiasts to get interested in. Mercedes is having a hard as hell time getting them to work on the road, too. Good luck, Aston!
2nd Gear: I Have Genuinely No Clue What VW Is Trying To Do With Its Trucking Business
The other day I was writing about how VW is having a hard time selling off MAN Energy Solutions, part of its heavy trucking operations. VW needs billions for its transition out of diesels and into EVs and it just doesn’t have money to spare.
Oh wait, no, nevermind, VW’s heavy trucking operations just announced it is offering $2.9 billion to buy up Navistar here in America, as the Financial Times reports:
Volkswagen’s truckmaking subsidiary Traton has tabled a $2.9bn offer to buy the rest of American manufacturer Navistar, in an attempt to make inroads into the lucrative US heavy-duty vehicle market.
[…]
Traton, which was spun off by Volkswagen last year, comprises brands including Scania, Man and VW, and relies on Europe for almost 60 per cent of its sales. The company also has a strong presence in Brazil, but lacks exposure to North America.
Following several years of strong growth, supercharged by the boom in online shopping, the truck industry is facing a squeeze, with analysts expecting sales to plateau in several key markets.
If the deal goes through, Traton would become one of the biggest operations in the trucking industry.
3rd Gear: Tesla’s European Factory May Be Delayed By Wolves, Bats, Snakes, Lizards
Please excuse me for some Borscht Belt-grade humor here but while Elon might spend all his time complaining about metaphorical snakes in the form of shorts, what he might actually be hindered by are literal snakes. That is, the German government might be forced to pause any construction on Tesla’s factory outside of Berlin to allow for the breeding period of local wildlife. As Bloomberg reports following a Handelsblatt interview, that means snakes, bats, etc:
Tesla Inc.’s plans to build a factory outside Berlin could be under threat if construction work doesn’t begin by mid-March, according to the economy minister for the Brandenburg region where the site is located.
Under German environmental regulations, the project in the town of Gruenheide could be delayed by nine months unless work begins before the breeding period for local wildlife this spring, Joerg Steinbach said in an interview with the Handelsblatt newspaper published Friday.
[…]
Tesla still has to jump through a number of hoops, including scaring off or relocating wolves, hibernating bats as well as snakes and lizards until construction is over. Residents still have the chance to raise objections, and some have bemoaned that they’ve seen little from Tesla since its blockbuster announcement.
Bloomberg notes that the local mayor seems confident that Tesla will make it all work, and is in conversation with local environmental groups, at least.
4th Gear: Mitsubishi Still Having A Time
With the drama between Renault and Nissan these days, it’s easy to forget that Mitsubishi is part of that auto alliance and, uh, things could be better, as Automotive News reports:
The automaker swung to an operating loss of 6.6 billion yen ($60.5 million) in the fiscal third quarter ended Dec. 31, the company said in results published on Friday. That compared with an operating profit of 28.1 billion yen ($257.7 million) a year earlier.
[…]
“The overall business environment is harsh,” [CFO Koji] Ikeya said.
Mitsubishi’s plunge exacerbates an earnings crisis confronting its alliance partners, Renault and Nissan. Mitsubishi’s automotive allies are under similar pressure from volatile sales and slumping profits, as the three-way alliance struggles to find its feet following the arrest of former alliance Chairman Carlos Ghosn and the tumult it unleashed.
If Mitsubishi sold the Delica here, I’m sure its woes would be short-lived.
5th Gear: Let’s Check In On The Coronavirus
As it turns out, there’s a lot of auto industry in Wuhan, the center of the coronavirus outbreak. As such, the auto industry in Wuhan is taking an extended break at the moment, with many companies holding off an extra week from the new year into early February. Automotive News has a roundup of which companies are holding off for how long, but generally everyone is saying that things are going to suck.
Reverse: We Played Golf Up There
Neutral: Whither Aston?
I’m a little bummed that it looks like Aston is taking a step back from future tech and leaning more towards traditional racing. But the 1970s Lagonda is my favorite car from the company. What do you think Stroll should be doing with the little British automaker?
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source https://jobsearchtips.net/f1-billionaire-to-rescue-aston-martin-but-pull-back-on-evs/
