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Auto blog
Toyota fears supplier pressure in Australia with GM pull out
Wed, 11 Dec 2013With Ford and General Motors both announcing an end to production in Australia, the country's auto industry is in a bad way. With the exit of two big players, there's increased concern that a third Australian manufacturer, Toyota, will be forced out, as well.
"We are saddened to learn of GM Holden's decision. This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia," Toyota Australia said in a statement. The GM closure of Holden production will be the direct end to 2,900 jobs, but will also force a dramatic reduction in the size of the country's supplier network, as there will simply be fewer cars to build.
In the same statement, Toyota Australia said it would work with suppliers and local government to figure out whether continuing production Down Under was even feasible. According to Automotive News, a representative for the Australian Manufacturing Workers' Union told reporters it was "highly likely" that Toyota would also close up shop within the next few years.
Rising aluminum costs cut into Ford's profit
Wed, Jan 24 2018When Ford reports fourth-quarter results on Wednesday afternoon, it is expected to fret that rising metals costs have cut into profits, even as rivals say they have the problem under control. Aluminum prices have risen 20 percent in the last year and nearly 11 percent since Dec. 11. Steel prices have risen just over 9 percent in the last year. Ford uses more aluminum in its vehicles than its rivals. Aluminum is lighter but far more expensive than steel, closing at $2,229 per tonne on Tuesday. U.S. steel futures closed at $677 per ton (0.91 metric tonnes). Republican U.S. President Donald Trump's administration is weighing whether to impose tariffs on imported steel and aluminum, which could push prices even higher. Ford gave a disappointing earnings estimate for 2017 and 2018 last week, saying the higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Ford shares took a dive after the announcement. Ford Chief Financial Officer Bob Shanks told analysts at a conference in Detroit last week that while the company benefited from low commodity prices in 2016, rising steel prices were now the main cause of higher costs, followed by aluminum. Shanks said the automaker at times relies on foreign currencies as a "natural hedge" for some commodities but those are now going in the opposite direction, so they are not working. A Ford spokesman added that the automaker also uses a mix of contracts, hedges and indexed buying. Industry analysts point to the spike in aluminum versus steel prices as a plausible reason for Ford's problems, especially since it uses far more of the expensive metal than other major automakers. "When you look at Ford in the context of the other automakers, aluminum drives a lot of their volume and I think that is the cause" of their rising costs, said Jeff Schuster, senior vice president of forecasting at auto consultancy LMC Automotive. Other major automakers say rising commodity costs are not much of a problem. At last week's Detroit auto show, Fiat Chrysler Automobiles NV's Chief Executive Officer Sergio Marchionne reiterated its earnings guidance for 2018 and held forth on a number of topics, but did not mention metals prices. General Motors Co gave a well-received profit outlook last week and did not mention the subject. "We view changes in raw material costs as something that is manageable," a GM spokesman said in an email.
How privacy fears are driving automakers in the age of the connected car [w/poll]
Wed, Aug 27 2014A recent GAO report concluded car companies don't adequately disclose how and why they share location data. As cars collect and store more and more data about the whereabouts of their drivers, automakers are responding to critics who say they should be more transparent about how those details are used. Ford is hiring a global privacy policy attorney to craft the company's customer privacy policies in the era of connected and autonomous cars. "In this emerging space, there is an important need to address customer privacy policies," reads a job description posted on the "people and careers" portion of the company's website. "As part of our compliance and ethics organization at Ford, this person will have an immediate and direct impact in shaping existing and future policy and corporate thinking in this area." Ford is creating the new position, based at its Dearborn headquarters, at a time technology advances are outpacing privacy protections. Earlier this year, a report from the federal government concluded car companies don't adequately disclose to motorists how and why they share location data. That report, from the Government Accountability Office, found many car companies did not describe how they shared location data, did not allow consumers to request their data be deleted and that there was a "wide variation" in how car companies retained vehicle-specific or identifiable location data. It noted there is increased risk of location data being used in ways "consumers did not intend." Ford was one of 10 companies the GAO surveyed while compiling its report. Customers are opting to share that data largely by using features like maps and turn-by-turn direction that are run by a vehicle's telematics unit. Depending on the company, it can be unclear how that data is collected, retained or shared. At the time the GAO report was issued, AAA, the nation's largest motoring club, urged carmakers to be more transparent in how they handle data and to offer stronger security protections. Shaping Autonomous Car Regulations At Ford, the new hire could change how the company handles that data. According to the job description, the successful applicant will, "demonstrate visionary thinking around privacy strategy – imagine how consumer and employee expectations around privacy may evolve and how business should adapt, develop approaches that maximize the benefit of data sharing for consumers and business, etc." (Emphasis from Ford).