Other than Tesla, the EV business in the US is struggling. Ford’s layoffs will significantly affect its North America engineers.
Ford Plans to Lay Off at Least 1,000 Contract and Salaried Workers
The Wall Street Journal reports Ford Plans to Lay Off at Least 1,000 Contract and Salaried Workers
In internal meetings Monday, Ford began notifying some salaried workers in North America that job cuts would be coming, a company spokesman confirmed Tuesday morning.
This latest reduction of Ford’s white-collar workforce includes employees in its electric-vehicle and software side of the business, the company spokesman confirmed. The cuts will also affect workers in the automaker’s gas-engine and commercial-vehicle divisions, he said. Managers at the company held meetings Monday in which they informed employees that layoffs were coming and that affected teams should work from home for the rest of the week, a company spokesman said.
Ford’s annual costs are $7 billion to $8 billion, too high relative to rival automakers, executives have said. To eliminate this cost gap, the company is streamlining its supply-chain spending, reducing complexity in its vehicle lineup and clamping down on warranty costs, executives have said. Ford has said it expects to lose $3 billion in operating profit on its EVs business this year. While executives at the automaker have said profits from its gas-engine operations would sustain the business in the midst of these losses, some analysts have questioned whether the automaker would require additional funding.
Lordstown Motors Dies
Also note As Lordstown Motors Dies, Lordstown’s EV Business Survives
Electric-vehicle startup Lordstown Motors wants a buyer for its pickup truck, the Endurance. To clear the asset of “legacy issues,” it sought bankruptcy protection on Tuesday, a sorry step for a company whose purchase of General Motors’ redundant factory in Lordstown, Ohio, made it an unlikely darling of the Trump administration. The stock fell 30% in early trading.
The company is now pitching the Endurance not to vehicle-fleet buyers, but as a “springboard” to other manufacturers that might want a ready-designed electric pickup. Its value is doubtful given the Endurance’s history, which has included battery fires, quality issues and a recall—all before it entered full-scale production.
Another question for the residual value of Lordstown Motors is the merit of the legal case it kicked off Tuesday against Foxconn. The contract manufacturer turned from white knight to foe for Lordstown when Foxconn withheld a promised slug of investment earlier this year, claiming breach of contract.
The Journal comments “Lordstown Motors is now in the hands of lawyers and bankers. But don’t write off the Lordstown EV business.”
Indeed, especially when Biden is going to mandate building EVs no matter what they cost to the manufacturer or consumers, whether consumers want them or not.
Ford Gets a $9.2 Billion Cheap Government Loan With Inflationary Strings Attached
Please note that Ford Gets a $9.2 Billion Cheap Government Loan With Inflationary Strings Attached. So not even $9.2 billion is enough to make Ford profitable.
Most likely, its due to the strings like profit-sharing and child-care mandates. And the Wall Street Journal comments “The Mercatus Center’s Christine McDaniel estimates the IRA battery production tax credit will cost $152.8 billion—more than five times as much as Congress’s Joint Tax committee estimated last year.“
The UAW Demands a “Just Transition” to Electric Vehicles
Biden is hell bent on socializing the auto industry to his liking. And the socialists are pleased. Ford has already agreed to a union “neutrality” agreement at the battery factories that will make it easier for the United Auto Workers to organize workers.
Everything Biden does adds inflation pressures.
Note that the Inflation Reduction Act Price Jumps From $385 Billion to Over $1 Trillion. That’s just a start.
And if you missed it, please see Hoot of the Day: The UAW Demands a “Just Transition” to Electric Vehicles
But don’t worry. If the vehicles cost too much, Biden’s inflation reduction solution is sure to be more free money subsidies. There’s nothing like free money to artificially boost jobs and create inflation along the way.
Four Measures of Inflation
Of course, the Fed had a hand in inflation. The Fed had a hand in job creation as well.
But if Biden is going to take 100% credit for creating jobs, I suggest he take 100% of the credit for creating inflation as well.
For discussion, please see Disingenuous Claims by President Biden on the Number of Jobs He Created
What About Minerals for the Batteries?
No one yet has factored in the cost of minerals to make the batteries. EVs will not go from 3 percent of sales to a Biden-mandated 67 percent with the price of the needed metals and rare earth elements to stay flat.
For discussion, please see Critical Materials Risk Assessment by the US Department of Energy
Yep, Biden’s own energy department is issuing mineral warnings.
And by the way please note Biden’s Solar Push Is Destroying the Desert and Releasing Stored Carbonhttps://mishtalk.com/economics/bidens-solar-push-is-destroying-the-desert-and-releasing-stored-carbon/
All in all, it’s a brilliant plan on numerous fronts simultaneously, to create more inflation, just what the Fed wanted for years, but now doesn’t.
EV sales in the US last quarter were about 7%. Expected to be over a million sold this year.
The problem with Ford and GM is they’ve been in denial and have waited too long to get going. Tesla and many Chinese companies are way ahead of them. There are some legacy auto makers who could see what’s coming and started years ago, like VW and Kia/Hyundai. They have good products, but they cost too much compared to what Tesla offers and outside of VW, they don’t qualify for the $7500 credit. Unless you lease them. Not sure how that works.
I am curious where the electricity comes from to charge all this battery powered crap?
Oh, I forgot, magic fairy-dust!
That being the case, ill sleep well tonight as the foolish push to EV accelerates towards its inevitable dead-end.
Off topic on Ford but one thing I assumed would happen is happening right now. It involves electric lawn mowers. I see many of them for sale on local classified boards but no buyers. The used gas ones however sell fairly quick which they should. Cheap, reliable, easy to fix and can top it off in seconds. SOLD. Add some fuel stabilizer and it can sit for a couple years without losing any power.
What I love about gas lawnmowers is that I get to add oil, change spark plugs and filters and especially that little electric motor you need to start the gas motor. It’s so fun figuring out why it won’t start. Is it the gas? Or maybe the fuel line is clogged? Did I flood the engine? Maybe there is no spark in my spark plugs. I miss all that. Now with my electric lawnmower I just check if the battery is charged and push the button and it starts. No fun at all.
Clearly you have a lawn the size of a postage stamp.
Try mowing a half acre or larger lot with an electric mower. It’s no fun stringing a dozen or more electric cords together to cover your yard.
They’re cordless and come with multiple batteries. You can likely get over 1/4 acre on full charge. Enough for most people.
I have an electric one for trimming up. I have a contractor who cuts the whole yard. It’s a farm size machine for fields but it does run on gas….for now. I am a half-hour from Paris by car but I am surrounded by wheat fields, horse stables and forests.
I actually like electric mowers. Especially these Stihl robot ones:
link to stihlusa.com
Unfortunately they are very expensive and no bagging capability. I was talking to a Stihl dealer and he said they were running one on their property. Worked great until someone decided to steal it. It does however have a security shutoff but the thief could sell parts of it so…meh.
I have a lot to cut, may get one when I retire but gas mowers are so cheap and super easy to work on. I’m using one now getting on 40 years old. Amazing.
I have a neighbor with a battery mower. He loves it. His yard isn’t big. Maybe like 8000 ft^2.
In the Critical Materials Assessment table if you had invested in the materials in the “critical” area you would have lost your shirt. The paradox is that these materials are in high demand because of the EV revolution yet their prices seem to be tied more to the general economy than to EV growth and demand. For the moment the increase in demand has been nicely matched by the increase supply. Perhaps the miners have been selling forward a lot of supply.
EV’s will not work for the majority of the planet who do not have flushing toilets or reliable electricity if any but we will learn this together. This is very difficult for people to understand who have never been in a warzone or a horrible 3rd world country for an extended period of time. They do not understand how the world lives.
Those people don’t have cars of any sort.
Cuba doesn’t have cars? Ok. I was wrong. You are correct.
China makes some really cheap EVs. Costing like $5k. Someone with some solar panels may be able to get limited daily range out of them.
Anyone else reading the Fed’s bank stress test report? It’s a doozy especially page 16 but I’m not one to gossip.
link to federalreserve.gov
Earlier in the year big tech was laying off people (Facebook, Microsoft, Twitter, etc) then all the layoffs seemed to have stopped but layoffs in other industries seem to be gearing up this month.
link to finance.yahoo.com
KPMG laid off 5% of their work force.
Accenture laying off in Austin.
Illumina will layoff but no number listed, needs to cut $100m in expenses.
Robinhood laying off 7% of labor force.
Ironically, adding all these layoffs up still doesn’t offset the 150k+ boomers signing up for social security each month so unless we get 300k+ layoffs each month, nobody is going to notice or care.
Well, My F stock should Rally higher as most companies stock gets a boost when the company cans it’s workforce… “Cost cutting’ – Look at what it did for META-
Trail your stop-loss is my take a-way….
Will the real Tesla killer please stand up. Crickets
There will be no Tesla killer that comes out of the USA. That’s because GM, Ford and whatever Chrysler is called are all pushing hard on EV trucks and SUV’s and have essentially abandoned the car market (other than high end sports cars).
Instead it will most likely come from China (much cheaper manufacturing costs) or potentially one of the other Asian car manufacturers (Japan, Korea) because they are still focused on EV cars that can potentially be sold for 20K or less.
Tesla is already outcompeting them in China. Unless tesla is no longer able to produce cars in China, won’t happen any time soon.
But note that Tesla does not qualify for any of the taxpayer funded subsidies … only companies through which he can funnel money to the UAW and other unions.
You mean, like golf carts?
Is Crickets the new line of GM EVs?
So when are all the zombie companies going to really start going belly up?
Just wondering.
I hope they’re not “too big to fail” … ie: let’s just keep throwing good money after bad. You know, 9.2 billion here, 9.2 billion there, 170B here (Ukraine war, not including the rebuilding), .. and before long you’re talking about real money.
The fed financed massive government spending on things that didn’t need to be spent on ranging from Ukraine bioweapons labs and now a proxy war against Russia. Government wants to spend money on anything under the sun except infrastructure upgrading. It’s like someone is purposefully trying to bankrupt the USA. I suspect that both dem and gop know that the fake money is inherently worthless and that they might as well line their pockets with kickbacks and buy votes to stay in control as long as possible before the fake money dies, which it eventually will.
Federal spending goes straight to the bottom line of GDP (inflates the ‘all things are peachy-keen’ decoy) notwithstanding that it emanates from the ever monstrously ballooning federal debt. TPTB just can’t lose and the stock casinos love every bit of it.
With Ford dropping out of this, Biden is going to have to be more direct with his use of taxpayer dollars to kick back to the unions. He can push some thru GM … but otherwise he’s just going to have to hand taxpayer $s to union leadership … no more obfuscating it so that at least the folks who didn’t want to believe quid pro Joe would do that could delude themselves with “industry subsidies”.
Ford has 86,000 employees in the USA. Getting rid of 1000 is basically reducing the workforce by 1%. That’s hardly dropping out.
But the drop is largely in EV which is where the original kickback was going to flow. I guess he could just flow it through another part of the company.
Yeah it’s not much in terms of head count but when you multiply the salaries it all adds up. Then again there will be severance payments etc., so the savings won’t be felt in year one.It’s more about showing the street that they are doing something at least…anything to demonstrate that they are “managing” expections.
New (non-lithium) battery technologies are being developed, such as link to yahoo.com,
which uses Niobium, whatever that is, lasts 10 times longer than lithium, and is expected to start manufacturing next year.
Everyone is waiting with baited breath for this kind of breakthrough and they’ve been promising it for the better part of a decade.
I’m not holding my breath that it will be manufactured in quantities in 2024. If somehow it does, it will render every EV made in 2023 or earlier obsolete in the sense that no one is going to want to buy a used car with old battery technology.
I hadn’t thought of that item. The fact is, new battery tech is desperately needed if we are to achieve even 1/3 of the big plans our leaders have for EV … but when they finally come out and are reliable, affordable, and common … the value of EVs with old battery tech likely will plummet. Continually overpromising it now could have a strong affect on new EV sales now as well. Sort of like the opposite affect as the impact on firearm sales when a progressive gets into office.
Nice thing about batteries is they’re easily replaceable.
Yes, batteries are easily replaceable.
Too bad they aren’t cheap. Paying 8-10K for a replacement means they won’t be replaced.
When a car costs 50k, 10k to get another 100K miles is well worth it. Battery Prices will likely continue drop as well.
Yes, I’m not holding my breath, but eventually there will be alternative mass produced battery technology. Technology is always harder to take from lab to production than people think. Such as flying cards, self driving cars, quantum computing, etc.
Another “MONEY LAUNDERING” program???
Just like Obama’s “SOLAR PANEL” program!!!
There are a lot of cheaper batteries already in production. Like Sodium Ion batteries that use sodium instead of lithium. They’re used in cheaper cars and have less range, but likely good enough for many buyers.
Having been to numerous Asian countries where there seem to be 10 scooters per car … good electric scooter technology could have a huge impact. These scooters with light weight, no heat/AC obviously take a lot less power. But they would still need the battery changeOut options one Taiwanese billionaire wanted to set up (ie: quick to pull out your battery, put it in the machine, pay your fee, and get a charged battery (then it starts charging yours for someone down the line).
“being developed” is a far cry from “readily available” and “competitively priced.”
I will keep my Crown Vic a few more years.