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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

Ecotricity offering 1,000 free EV miles to new customers

Ecotricity is offering electric vehicle drivers in the United Kingdom an lengthy incentive for using green energy: 1,000 miles of free fast charging per year. Called "Green Electricity + Car," the program will power customers' homes with renewable power allow them to charge their cars through Ecotricity's national network of fast chargers, which the company has named the Electric Highway. It makes complete sense for Ecotricity. "To get the greatest environmental benefit from an electric car, it needs to be charged using 100 percent green electricity from the wind and the sun – otherwise you're still powering it from dirty fossil fuels," wrote Dale Vince, founder of Ecotricity. Ecotricity, a UK-based producer of green energy, wants to bring fast charging to 90 percent of highway service stations around the UK in the near future and four fast chargers are installed per week under the Electric Highway campaign, the company says. Users can fast charge their EVs in 20-to-30 minutes. Ecotricity recently instituted a price freeze for all gas and electricity customers until April 1, reducing energy costs below what's being billed by the country's "Big Six" energy companies. Green Electricity + Car coincides with Volkswagen bringing its electric e-Up! to the British market. Volkswagen Group (UK) Limited imports VW, Audi, SEAT and Skoda brand vehicles and has signed a deal with Ecotricity as its official green energy supplier. Volkswagen Group customers purchasing an EV through one of its brands can take advantage of a new, reduced-cost Ecotricity tariff and a free smart meter installation. 08 February 2014 Green Electricity + Car Drivers of electric cars will receive 1,000 free miles every year with a new electricity tariff being launched by green energy company Ecotricity. Green Electricity + Car – will not only power customers homes with green energy but also their cars (either 100% electric or plug-in hybrids), plus they'll get free access to Ecotricity's national network of fast chargers[1] – the Electric Highway. This latest move comes after Ecotricity announced a price freeze for all gas and electricity customers until the end of winter (April 1st), making them cheaper[2] than the standard tariff of the Big Six energy companies.

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs