If necessity is the mother of invention, uncertainty is the father… if that father was Saturn. Everything is unclear right now. I have no idea what’s going to happen next and, I presume, neither do most automakers. It’s the season for hedging and automakers are going to have to hedge.
Let’s start The Morning Dump with the news of the day, which is that the next-generation F-150, called P736 internally, has been pushed by a year. It’s not clear exactly why the 14th-generation truck is getting another year, and it comes at a time when Ford is saying it’s going to cut some middle-management bonuses in an effort to lower costs.
Could Ford’s decision have something to do with the possible tariffs? Maybe! The President said we can start expecting 25% tariffs, maybe, on cars coming into the United States. That’s basically threatening to put the Chicken Tax on everything.
In exchange for reading about something political, I’ve got another update on the Nissan-Honda drama, which is a story that just keeps on giving.
The 14th Gen Ford F-150 Gets One More Year, At Least
The Ford F-150 is the ultimate golden goose. Ford has gotten so good at building trucks and winning fans that each generation brings customers back with even bigger checks. Trucks are, generally, extremely profitable vehicles and Ford could use the profits right now.
Part of the appeal is that every few years Ford comes out with a new generation of F-150 that offers more style, more features, and more capabilities. According to reporting from Crain’s Detroit, Ford has been emailing suppliers and telling them that the current generation will likely stick around for at least one more year.
Ford was expected to roll out the 15th generation of its traditional gasoline/hybrid pickup in 2027. Production for the program, code-named P736, has been pushed out by at least a year to mid-2028 at Dearborn Truck and Kansas City Assembly, three auto supplier executives from three companies told Crain’s Detroit Business, an affiliate of Automotive News, under condition of anonymity.
In tandem with that decision, the automaker told suppliers that production of the current P702 version, introduced in 2021 and refreshed in 2024, will be extended by a year into 2028.
There are many reasons why this could be happening, including the usual boring internal complications having to do with product design. Ford is facing “headwinds” when it comes to profits, so it’s possible that Ford is trying to save money by squeezing more net income out of the truck by building it for another year.
Crain’s had another good theory:
The F-150 has historically been overhauled every five to six years, with mid-cycle enhancements between new models. A 2028 launch of the 15th generation would mean more than seven years on the same model.
The delay would allow Ford to put off some of the massive capital costs required for a new model launch as it works toward a 2027 launch on the EV side. It also allows the automaker to squeeze out another year from suppliers under contracts that were signed years ago and don’t reflect the new economic realities of inflation and tariffs.
Ford is definitely trying to save money wherever it can, with Bloomberg reporting that the company is getting rid of some stock grants for mid-level managers:
Ford has told employees roughly half of a group of 3,300 middle managers won’t get stock award bonuses, which are typically granted in March and vest over three years. Ford has about 76,000 global salaried employees. Chief Executive Officer Jim Farley is pushing his salaried ranks to improve performance as Ford forecasts a year when earnings before interest and taxes will fall by $2 billion or more.
“We are focused on driving a high-performance culture that recognizes and rewards employees for their business contributions,” the automaker said in a statement Tuesday.
On the other hand, a new truck is usually an excuse to charge higher prices, so delaying the new F-150 does come with costs. Maybe something else is going on? In fact, I suspect we’ll see a lot more of this happening in the coming years, with some of the biggest and most beloved models not getting upgraded on a typical schedule. Why?
President Trump Proposes Putting A Chicken Tax On Everything
Last week we covered the topic of Comparative Advantage, which seems timely since President Trump has threatened/promised a 25% tariffs on all imported cars. This is an interesting number because it’s also the same percentage as LBJ’s famous “Chicken Tax” on imported trucks.
Did the Chicken Tax work? Sort of! The tariffs essentially ended the import of small trucks into the United States, and foreign automakers eventually started building vehicles here. From that perspective, the main American automakers and their employees have benefited. That delayed F-150, which is built in the United States, exists in some small part due to the Chicken Tax.
On the other hand, the market forces against small trucks have meant that we’ve slowly seen small trucks disappear. The Maverick is, in this case, an exception, but it’s built in Mexico.
What happens if all imports are hit with a 25% tax instead of the usual 2.5%? We might find out.
Trump said that while a full announcement would come April 2, the import duties would likely start at 25%. He said he would charge the same amount for pharmaceuticals and semiconductors and gradually increase the tariffs over time.
“It will be 25% and higher, and it will go very substantially higher over a course of a year,” Trump said during a news conference at his Mar-a-Lago estate in Florida. “But we want to give them time to come in because, as you know, when they come into the United States, and they have their plant or factory here, there is no tariff, so we want to give them a little bit of a chance.”
If you really want to know why I think we’ll see more delays like the F-15o it’s because of rather vague statements like the one above. How do you plan for that?
Local import duties are just one of many factors that go into building a car. None of us exist in a vacuum and higher tariffs, often, lead to all sorts of harder-to-control outcomes. For instance, this might end up with America having a stronger dollar. That’s not really good or bad, but it can be beneficial for consumers in the United States if we can buy German cars that are suddenly cheaper to produce in Slovakia because of a weaker Euro. That advantage disappears if there’s a big tariff, though.
In fact, if you’re a European automaker, you may not give up on America, but I wouldn’t invest in new product until I was sure that I could still profitably sell cars there.
A lot of this might be bluster. The EU currently charges a 10% tariff on our imports, whereas we only charge them 2.5%, though, again, we do put a 25% tariff on the most profitable trucks. Could President Trump lower the Chicken Tax in exchange for lower tariffs? Maybe.
It probably doesn’t matter. Neither Japan nor Europe are going to buy a lot of American cars because we don’t build a lot of cars that consumers in those countries want. It’s possible that the long-term outcome of this is that European and Japanese (and South Korean) automakers build more plants here, but it’ll only happen after a long period of turmoil.
Honda Reportedly Wanted Nissan To Kill Its e-Power Hybrid System
Nissan is the biggest automaker in the United States with absolutely no hybrids, which is one reason why the company is struggling in this market. This is not just a marketing problem. It’s also a technological one. Nissan developed its hybrid system for Japan and Europe, where people spend a lot of time in stop-and-go city traffic.
Remember what I said about Japanese and European consumers not necessarily wanting American cars? Not only are the roads too damn small, but these countries also have a driving mix that often involves a lot less cruising on the highway at 75 mph.
That’s one reason why Honda, as it was putting other big demands on Nissan, told the company to stop investing in its hybrid system, at least according to reporting from Japan’s Yomiuri Shimbun, via Automotive News:
While Nissan had an early lead over its Japanese competitors — Toyota Motor Corp. and Honda — in electric vehicles, it has lagged on hybrids.
“It is obvious that we are a little better than Nissan when it comes to HVs,” a senior Honda official told Yomiuri Shimbun.
A person familiar with the matter told Automotive News that Nissan R&D execs could not stomach Honda’s demand to scrap a home-grown technology into which Nissan had sunk more than $2 billion.
“It was a clash of egos,” the person said.
Nissan is bringing a new e-Power Rogue to the United States, maybe, in a couple of years. That vehicle will feature a revised e-Power system that’s more tuned for American tastes.
A Quick Story About UAW Retiree Benefits
There’s a big feature in the Detroit Free Press about Clara Corso, the widow of an autoworker who managed to have a few final days on this planet in a comfortable and humane way that didn’t bankrupt her surviving relatives.
In November of last year, Clara entered Garden City Hospital with walking pneumonia, where she was diagnosed with chronic obstructive pulmonary disease. After a week, she returned home. Three days later she suffered a stroke and returned to the hospital. For weeks, she remained in the hospital until she ultimately was discharged to Angela Hospice.
At no point did we consider how my aunt would pay for any of it. Still, the coverage at hospice care came as a surprise. Fifth-level hospice care benefits like my aunt’s — which offer fully covered inpatient care at hospice facilities — are fading away alongside the dwindling policy holders.
Tracy Muzzarelli, who works in finance at Angela Hospice facility and has over 20 years of medical billing experience, refers to it as a unicorn policy for good reason. In most cases, there’s no deductible or copay with the benefit.
“The enormity of the cost of hospice care is quite significant, and the fifth-level benefit in particular is a gem,” she said. “It’s a growing expense for a need that is more in demand than ever before. As a society, we did not prepare for the medical advancements that we’ve had.”
The whole story is fascinating and I suggest reading it.
What I’m Listening To While Writing TMD
In my mind, there is no greater living American than Dolly Parton. That’s why this duet version of Sabrina Carpenter’s humorous “Please, Please, Please” with Dolly has to be the song of the day. Dolly is the best.
The Big Question
What new generation of vehicle are you most looking forward to?
I have high hopes for the next generation Miata. It seems as if Mazda hasn’t lost the plot for what that car means to the brand, and the broader enthusaist market. Also the new Type R might be cool. I hope it maintains a manual, otherwise it’s DOA
Magic Eight Ball says, “Doesn’t look likely.”
By the way Honda was definitely right to ask Nissan to axe the ePower tech, it really makes no sense outside of Japan and Honda’s system is superior in every point. The ePower would have been acceptable as a range extender but is not even used in a PHEV, it’s pure madness when you think about it.
The next generation Forester is of interest as is the BYD Sealion 7 and the Renault (Dacia) Duster when it/they/them turn up in Oz. I’m also curious about new Ford Transit Custom/Volkswagen T7 mashup but I’ve not got high expectations.
Next generation I am looking forward to? None. New vehicles focus on tech above all else. I don’t want more tech. Especially subscription tech.
Oh no, Ford’s money-printing machine will have to keep running a year longer before they replace it with the next model that prints even more money!
….in all seriousness I do wonder if/why pickup generations have to be so quick, but I’m sure it’s just consumer expectations and the general competitiveness of the market. I remember being confused that the F-150 has umpteen generations and the E-series had…four.
suposedly 2021 was the last refresh of the f150 and its suposedly a “new” generation but from what i can gather its the same bones as the 2015 generation so i’m not sure. pickup trucks are kind of like the 911 very incremental changes over time and then eventually an “all new” model that is only slightly newer than the last gen.
911 of Theseus?
Let me see if I’m following this….the US government turns it’s back while corporations move production globally to funnel the money spent paying fair US wages upward to the oligarchs.
Then, once this global system is irreversible, propose a tariff in name of nationalism that amounts to nothing more than an additional tax American consumers must pay to the government by way of the corporations.
Meanwhile the government continues to turn its back while companies purge employees in the form of layoffs to falsify growth and keep sending money upwards. And also continue to ignore that all the money made from the tariffs could be made just taxing corporations at the same ratio they tax middle class citizens (corporations are supposedly people, after all).
So America will be a market of products that are dirt cheap to make, a fortune to buy and the majority of Americans can’t afford.
Is that about right?
Every bit of this just makes me want to stop participating…Then again AI might make that choice for me.
I also suspect that the additional 25% tariff on aluminum — supposedly on top of all other import tariffs and set for March 12 — might screw the aluminum-heavy F-150 in particular.
If I was Farley, I wouldn’t be ratting out South Korean or Japanese automakers — I’d be going after the simpleton rat in the White House who’s trying to explode Ford’s production costs.
As for the flush, you think I can look forward to anything? At all? Bless your optimistic heart because I don’t share that. It’d be cool if the next Cayenne had more off-road goods again given the popularity of overland mods, though, but that’s it. I’ve all but given up hope of having anything cool in the near future, though.
New car purchase is postponed indefinitely. Was thinking of making one before tariffs were imposed. My wife cogently argued that that baby pumpkin and his teenage mutant turtle may tank the economy and steal our retirement. Will now look into fixing up our functioning but long-in-the-tooth vehicles. Besides, how could I replace my green vehicles? I can’t afford any vehicles that come in that color.
I support this for the same reason I support the Draft applying equally to women as it does to men. Apparently Vietnam wasn’t enough to get rid of the Draft or at least limit the Draft to apply to forced military service IN THE CONTINENTAL US ONLY. The only way I see us getting rid of the Draft is if the other half of the population is forced into fighting the next Vietnam with us then perhaps we’ll have enough votes to get rid of it once and for all.
Noone in the general public gives a shit about the Chicken Tax, because few people drive foreign made Trucks anymore because of the Chicken Tax, but if the Chicken Tax applied to ALL automobiles, then maybe we’ll finally abolish the Chicken Tax once and for all.
To clarify for those who didn’t understand: I’m against the Draft and the Chicken Tax.
I was under the impression that the draft was not active, but that it is still necessary to register and that it could be reinstated by the President under “emergency” conditions. Am I wrong? I’m not concerned for myself. I haven’t been subjected to call up, since my college deferment for the American War in Vietnam in 1970.
I along with all my male friends had to sign up for it as mandated by law when we became adults long after Vietnam ended, it certainly makes you pay greater attention when US politicians start talking about going to war in far away places when you know if it gets bad enough you won’t have a say in whether you go there or not.
In the most recent NDAA there was a provision that Women could not be forced into combat roles IF they get included in the Draft in the future, which to me is a bad thing because it doesn’t effect us equally, therefore we’re less likely to get rid of the draft than if it applied to both sexes equally.
But Sgt. Hulka said, “There ain’t no draft no more.” That was 1981.
To put it another way it is a sleeping dragon, still alive, and when it is woken so will wake its unquenchable thirst for the blood of young American men and foreigners.
For all his faults (which are waaayyyy too numerous to list here without reaching the max comment size, hell, not sure the internet as a whole has enough storage capacity to list them all, but I digress), Trumpty-Dumpty actually seems to be fairly war-averse. Even during the Afganistan and Iraq wars, both Bush and Obama knew re-enacting the draft would be political suicide. If the draft ever is re-enacted, it would mean the US is in one hell of a bad predicament, e.g., invasion on US soil. At that point everyone with a gun (i.e., everyone) will be fighting.
The draft went on for years during the Vietnam war, and never got curtailed or removed. If that wasn’t enough to kill it I doubt Vietnam 2.0 will be either unless both sexes are equally effected by it.
Meh. Dodge the draft just like Dear Leader did back in the day!
DOGE the draft.
I hope we do.
Just because I could get out of the draft doesn’t mean I shouldn’t give a shit about the people who can’t. Not everyone is so fortunate.
I was eligible in 1973, last year of the draft. My number was 99, they got to 86. Fucking lucky.
He WAS fairly war-averse, in fact that record was talked about quite a bit in the 2020 and 2024 campaigns, but that seems to have changed quite a bit lately, as the list of places he wants to invade and seize by force keeps growing
1. Canada
2. Greenland
3. Panama
4. Gaza
5. Possibly part of Ukraine, but it depends on what’s in the part of the Lavrov-Rubio Pact that’s currently private
Going back to the early 2000s, Trump was vocally opposed to going into Iraq and spent a lot of time hammering Jeb! in 2016 over his continued support for his brother’s decision, so suggesting we get into another decades-long peacekeeping & nation building venture in the Middle East is an unexpected turn
One of his mouth-breathing cheerleaders who was all about “he won’t start any foreign wars” before the election is telling my how bold his international plans are now, and that we should take Panama and Greenland by force, if necessary. Two-faced POS.
Mass-media brainwashing by wealthy foreign owners is scary.
I think the big issue is that second term Trump is the property of the Heritage Foundation, who were also a big force behind the scenes in George W. Bush’s administration, they have a new figurehead to push their agenda through.
He didn’t expect to win his first term, the plan was to lose a close election, then start his own cable TV network and be the voice of opposition to Clinton for the next 4-8 years, he had no real actionable agenda prepared coming into office in 2017 and most of his initial cabinet appointments were people he originally wanted to host shows on his network. This time around, he basically outsourced all that stuff to Heritage to put together for him, and they hit the ground running.
Fundamentally, Trump likes the title of President and the trappings that come with it, but the less glamorous parts of the job, he’d rather not do, and is happy to outsource to Elon Musk and also the Heritage staff. Prior to his first term, he offered the Vice Presidency to John Kasich, with the understanding that Kasich would basically function as the defacto President, doing all the day to day policy and administrative stuff Trump finds boring
That’s a very generous and unwarranted assessment of Trump and his motivations.
I think it’s at least part of some of the seemingly huge shifts from first to second term – why “America first, no new wars!” is now “America first? No, new wars!” and why the USMCA that he negotiated himself and bragged about being an amazing deal has now been dumped into the shredder
Some of its personal, he has a lot of resentment toward a lot of foreign leaders (Europe, Canada), and he must have skimmed through one history book on 19th century economics in the past 4 years, but a lot of it feels like the old neocon Christian fundamentalist/foreign interventionist faction of the GOP, as represented by Heritage, is now in the drivers seat. Vance, for instance, feels very much like their sort of pick and not necessarily the kind of guy who would be purely Trump’s choice
I think some of it is also that he was so desperate to do anything, absolutely anything, to get back in power that he made all sorts of deals with anyone domestic or foreign who could help with that, and now he has to pay them back for their efforts
There’s a lot of stuff going on right now that should make people deeply uncomfortable
I keep trying and failing to parse how this is a statement responding to the removal of employee bonuses. Is it supposed to work like a Jedi mind trick?
“Jim Farley is pushing his salaried ranks to improve performance…” – By effectively cutting their salaries? Sounds like it’s time for management to unionize.
When I heard stuff like that in my decades of being an engineer, layoffs were coming soon.