Staffing Woes Put U.S. Car Industry's Remarkable Rebound at Risk
On the surface, carmakers have staged a remarkable recovery toward pre-pandemic production. But within the walls of U.S. auto plants, it was incredibly challenging to pull off—and is proving difficult to sustain, reports Bloomberg. Manufacturers rushed to restart assembly lines months ago because sales stayed surprisingly buoyant in the midst of the pandemic. But along the way, automakers have been stretched thin by absenteeism, distancing protocols, quarantines and supply-chain constraints. The data is surprising because of just how standout a comeback the auto industry has staged. Since April, the motor-vehicle and parts sector has added 289,000 to U.S. payrolls, a more than 45% surge that dwarfs employment growth in other manufacturing categories. Automakers caution that the number of people in their plants may not necessarily correlate with production. Foot traffic at Ford’s factories is down primarily because the company is limiting admittance to critical staff, a spokesperson said. Read more here.
Auto Loan Appetite Hard to Predict in Second Half
Generous automaker incentives and government stimulus efforts drove new- and used-vehicle sales during the onset of the coronavirus pandemic. But as these provisions fade so may consumer demand for auto loans and leases, reports Automotive News. Auto analysts are split on whether sales in the third or fourth quarter will eclipse activity in the spring and early summer as the viral outbreak rages on in the U.S. Consumer auto loan appetite amid mounting economic uncertainty and high unemployment is difficult to discern, some say, all while the virus' trajectory further clouds the crystal ball. This summer's sales frenzy — spurred by historically low interest rates and automaker incentives — likely exhausted any remaining pent-up demand that occurred during shelter-in-place orders that shuttered dealerships in key states in the spring, according to Cox Automotive. Auto lenders are exercising caution in lending decisions, telling investors during second-quarter earnings that recovery will be slow. Read more here.
Auto Buyers Will Soon Have More Brand Choices Than at Any Time Since World War II
Lucid Motors, a California-based EV maker, plans to unveil its first production model during a web event next month, the Lucid Air set to go on sale during the coming model year. The Detroit Bureau reports that the startup is just one of a long list of new brands hoping to crack the U.S. market during the next several years, a list that also includes the likes of Fisker, Lordstown Motors, Faraday Future, Bollinger, Vantas, BYD, Great Wall, and others. The U.S. automotive market has long been a relatively closed club. While a handful of new brands have pried open the door in the past half century, far more have either shut down or walked away. During the past 120 years, the U.S. has seen more than 800 brands come and – most of them – go. But some things have changed and the door appears to be open wider than it has been in years. The nascent shift from internal combustion to electric power is offering significant opportunity, especially for companies hoping to ride the coattails of Tesla. Read more here.
Ford's Hackett: Remote Work Likely to Stretch Into '21
Ford Motor Co. has pushed back its return-to-work plans twice, most recently giving some salaried employees the option of working remotely until at least the end of this year, reports Automotive News. Outgoing CEO Jim Hackett thinks that policy is likely to continue beyond what the automaker has announced. "It's my bet it will be extended beyond that," Hackett told reporters earlier this week on the sidelines of an event promoting the new Bronco SUV. "If you come this far to manage this and just say 'Well I'm tired of this' and change the profile and the risk, why did we do all the safety planning to begin with?" Hackett, who will retire effective Oct. 1, said the automaker is shifting what he calls "we spaces," or common office areas, to be more mindful of social distancing should workers elect to return to Ford facilities. Ford resumed production at North American manufacturing facilities in mid-May. At the same time, it recalled about 12,000 non-manufacturing employees whose jobs required them to be on site. Ford says more than 100,000 workers globally have returned to the workplace since May. Read more here.
More Cars Steer Away From Stick Shifts
The manual transmission continues to go the way of the hand-crank window, reports The Detroit News. Several more vehicles — including the popular Jeep Compass and Honda Accord — will no longer have stick-shift options after the 2020 model year. The continuing trend toward automatic transmissions is driven not only by ease of use: In many cases, automatics now get better gas mileage than their stick-shift counterparts. Adding to the decline is the phase-out of small, entry-level sedans that traditionally have offered manual transmissions as budget options. Auto enthusiasts have rallied behind the hashtag #SaveTheManual, but it’s not just entry-level SUVs and sedans that are stiffing sticks. High-end sports cars in the pursuit of more speed are also turning their backs on manuals. Two of the highest-profile performance-car launches in 2020, the Ford Mustang GT500 and mid-engine Chevy Corvette, debuted without a three-pedal option. Read more here.
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