Nissan is profitable for the first time in years
Nissan is making money again, not Rivian and GM. All this and more in The morning shift for May 12, 2022.
1st gear: Nissan
Nissan had a strange three years after ousting of former CEO Carlos Ghosn in circumstances that can only be described as too bizarre to be invented. Current Nissan CEO Makoto Uchida thereafter promised a big turnaroundand it only took a few more years to get there, with Nissan reporting its first annual profit since 2019 on Thursday.
Since Automotive News:
The rebound underscored Nissan’s progress in restoring financial health after a period of management upheaval in which it plummeted to the biggest operating loss in the company’s history.
For the just-ended fiscal year, which ended March 31, Nissan erased that red ink as operating profit jumped to 247.3 billion yen ($2.03 billion).
“Finally, we’re on the starting line,” Uchida said when announcing the company’s financial results. “Now is the time to deliver greater value and grow the business.”
Uchida unveiled its Nissan Next mid-term plan in 2020, which focuses on reducing fixed costs, reducing production capacity, launching new products and improving revenue per vehicle. The campaign wraps up in the fiscal year ending March 31, 2024, but Nissan is ahead of plan in many metrics.
Nissan cut global capacity by 20%, reduced the number of nameplates by 15% and cut 350 billion yen ($2.87 billion) in fixed costs. COO Ashwani Gupta said the rationalization phase of the comeback plan was complete and Nissan was now focused on growth.
Ghosn’s strategy was to increase the volume, while Uchida’s is more or less the opposite. Nissans always seem to be the kind of car for people who believe every car is more or less the same.
2nd Gear: Rivian lost $1.6 billion in the first quarter
Rivian, however, thinks the worst is behind it all. The automaker has been struggling with various supply chain issues like every other automaker.
Since The Wall Street Journal:
The company’s net loss nearly quadrupled to $1.6 billion for the January-March period from $414 million in the year-ago quarter as the company continued to spend heavily on R&D and manufacture of its first vehicles.
Rivian said higher logistics costs also weighed on results, in part due to higher spending on expedited shipping as a workaround to supply chain disruptions. Since late March, the company has halted assembly lines for longer than expected periods, causing it to lose about a quarter of its planned output due to supply constraints, Rivian said.
Chief executive RJ Scaringe said he is working with suppliers to secure more parts and believes the company is overcoming previous hurdles it has encountered in obtaining semiconductors. He said Rivian plans to add a second factory shift in the second half of this year.
“We’ve really seen the worst, or sort of a valley if you will, of supply constraints,” Scaringe said, referring to the shortage of computer chips.
Ford sold eight percent of its shares to Rivian, it was reported this weekwhich caused some Rivian investors to freak out a bit, although it was a bit odd because Ford has retained a very large stake in Rivian, which will probably be fine in the end.
3rd gear: GM
GM CEO Mary Barra recently did an interview with the New York Times, but after reading the story, I don’t really know why since the story isn’t very flattering. The Times, for example, notes that GM is releasing a bunch of super-expensive electric vehicles like the Cadillac Lyriq and the Hummer EV, before quoting Barra as saying that affordability is very important with electric vehicles, which is true, except Unfortunately, GM doesn’t make affordable electric vehicles.
The Times also says GM’s plan is to win with economies of scale, by building its own batteries, for example, but economies of scale have been every automaker’s core strategy for only about a century.
The Times also quotes Barra saying the following:
Along the way, Ms. Barra has formed a close partnership with [GM President Mark Reuss]a contemporary who had been a candidate for the highest position in 2014. He too had made his career at GM and had followed his own father, Lloyd Reuss, former president of the company.
While Ms. Barra led product development and Mr. Reuss was in charge of North America, they decided to break away from the company’s reputation for making substandard cars. “We made a pact,” Barra recalled. “We said we weren’t going to make shitty vehicles. If we launch a vehicle, we want it to win.
And then, a few grafs later, mentions that, by the way, every bolt was recalled due to a potential fire hazard, so much, I guess, for the whole thing of not making shitty cars. The story kicker, meanwhile, is:
And if his team needs a reminder of the urgency of the matter, the recent fanfare generated by Ford when the F-150 Lightning went into production does the job well.
“Do I wish the electric launch of the Silverado came sooner?” said Mrs. Barra. “Sure.”
Barra’s purpose granting the interview was, I assume, to project confidence in GM’s EV vision, and possibly increase its stock price, and also to brush Tesla and Ford off as competitors, which is really GM in a nutshell, being full of itself without having earned it. Please just make one (1) Affordable, GM EV. I’ll buy it, promise.
4th Gear: Subaru decided to build an electric car
Subaru has the groundland, but it’s basically a rebadged Toyota bZ4X. He said on Thursday he plans to build his own electric vehicle by the end of this decade.
Since Automotive News:
Unlike the Solterra, electric vehicles produced in the second half of this decade will be made directly by Subaru.
Subaru CEO Tomomi Nakamura outlined the plans Thursday while announcing the results for the year.
Subaru will begin manufacturing its own electric vehicles in mixed production with internal combustion vehicles at its Yajima plant in Japan in the mid-2020s. Starting around 2027, Subaru will build a dedicated electric vehicle plant at its plant site. of Oizumi, which now manufactures engines and transmissions.
Electric vehicles made there will be exported around the world to markets such as the United States, Nakamura said. Subaru is still considering what type of segment or models the next electric vehicles will be, he added.
Nakamura also declined to provide a production capacity figure for the new electric vehicle production plant, but said it would start small with room for expansion over time.
Subaru has been late to the EV game, but maybe that doesn’t matter. All I know is that GM is convinced that GM will crush it.
5th Gear: Foxconn has reached its agreement with Lordstown Motors
Lordstown burn money, but on Wednesday night it announced good news, namely its agreement with Foxconn to sell its factory and enter into a contract manufacturing agreement. Foxconn is a Taiwanese company best known for manufacturing Apple iPhones.
It seems, more or less, to be right before Foxconn acquires the whole company. From the Lordstown exit:
As previously reported, on November 10, 2021, Lordstown Motors and Foxconn entered into an asset purchase agreement (“APA”) providing for the sale of LMC’s Lordstown, Ohio vehicle assembly plant to Foxconn for $230 million plus reimbursement of certain operating and expansion costs from September 1, 2021 to the closing date. The transaction was subject to several conditions, including that the parties enter into a manufacturing contract for LMC’s flagship vehicle, the Endurance, a fully electric full-size pickup truck.
On May 11, the transactions under the APA closed. Total proceeds for LMC were $230 million, plus the reimbursement of approximately $27 million in operating and expansion costs. Additionally, Foxconn had previously purchased $50 million of LMC Class A common stock directly from the company. Along with the closing, Foxconn and Lordstown Motors entered into a manufacturing supply agreement for the Endurance. The start of commercial production of the Endurance is scheduled for the third quarter of this year, with the first commercial deliveries expected in the fourth quarter. Foxconn will immediately assume manufacturing operations at the Lordstown plant, without disruption. Approximately 400 skilled and talented LMC employees will transition into employment with Foxconn. LMC will maintain a presence in Lordstown, Ohio, as well as engineering and technical centers, as well as company personnel, in Farmington Hills, Michigan and Irvine, California.
Congratulations to everyone involved.
Backhand: AJ Foyt
AJ Foyt is currently 87 years old and probably too bad to die.
Neutral: How are you?
So Charles Leclerc is going to win the Formula 1 title this year, right? I was pretty sure until Miami, at least.
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