That which is dead may never die, but rises again harder and stronger. So goes the story of Mitsubishi, which may soon emerge from zombie status in North America thanks to a big injection of cash from the Renault-Nissan-Mitsubishi Alliance. Get excited! Even more exciting: it’s Friday. And with it, we’re talking about more EV production problems, buyouts at General Motors, and yet another fight over Chinese batteries in America. Let’s take it to the streets!
Mitsu Back? Mitsu Might Be Back
Most of us these days think of Mitsubishi as “that car company that used to make cool stuff,” and that’s certainly true; but it’s also been a small but quietly growing and profitable part of the Renault-Nissan-Mitsubishi Alliance. (I’m talking about North America here, too; Mitsubishi is pretty huge in other parts of the world, like Southeast Asia.) We know its product offerings aren’t the newest or strongest out there, but they get great fuel economy, and guess what else? Mitsu’s new cars don’t cost a billion dollars, unlike most these days. Also, the company’s still bothering to make small cars with the Mirage when almost every other automaker threw in the towel there.
Now, Mitsubishi may be getting a lifeline of investment as the Alliance renews its wedding vows for 2023 and figures out how to invest in North America to take advantage of those lucrative EV and battery subsidies under the Inflation Reduction Act. The plan is called Challenge 2025, and it’s maybe the most interesting Mitsubishi news I’ve seen in a decade-plus of covering cars.
Here’s some of the company’s announcement from last night; it involves heavy investment in electrification (bold mine):
Under Challenge 2025, the next three-year mid-term plan (MTP), Mitsubishi Motors Corporation (MMC) will accelerate efforts toward a sustainable carbon neutral future, made possible through a reduction of vehicle CO2 emissions by 40% and a reduction in operational CO2 by 50% by 2030.
Additionally, MMC will move to make 50% of global sales an EV by 2030, and then 100% of the fleet electrified by 2035 (“EV” specifically refers to a blend of plug-in hybrids (PHEV), hybrids (HEV) and pure electrics (BEV)). This goal is made possible through more aggressive investment in R&D and CAPEX, particularly in areas of electrification, IT, and new business. MMC also envisages a 200 billion Yen (US$1.5 billion) investment in battery sourcing to achieve its EV sales target in 2030.
[…] Specifically as it relates to North America, the next three years of business will see an enhanced and electrified product lineup in the market, closer cooperation with Alliance member Nissan, and growing the company’s local leadership position in digital tools for sales and marketing areas across other global markets.
Remember, one major reason the Alliance glanced at Mitsubishi from across the bar, walked over, bought a gimlet and said “We dig your vibe… so, do you party?” is because Mitsubishi’s hybrid tech is pretty advanced. It’s actually well-poised to be a decent player in the electrified space. Scale with Nissan will help in a big way.
But let’s hope Mitsubishi stays in the affordable-car realm! That’s a big advantage here, especially as EVs and even hybrids and PHEVs still command big price tags. I’m past the point in life where I’m going to beg for a new Lancer Evo or a 3000GT—I’ve had my heart broken too many times before, you see—but I’d love to see Mitsubishi emerge as an affordable, volume player in the BEV and PHEV space in this country. It can be done. Good luck to all involved.
The Nissan Ariya Has Problems, Too
Yesterday our man Thomas Hundal wrote a comprehensive roundup of all the early production problems that have faced this new, modern class of EVs in recent years—not to spread EV skepticism or to detract from problems with ICE cars, mind you. No, this is to point out the common issues facing the entire car industry’s electric transformation and to let buyers know what they might be in for, which I think is bare-minimum responsibility in the world of auto journalism.
Unfortunately, we can add Nissan’s new electric Ariya to that list. Though featured heavily in Nissan’s new ad campaigns, production is running at least a third below plan thanks to problems, reports Reuters today. And both dealers in Japan and the U.S. have since stopped taking new orders. Ugh. Here’s the story:
Ariya production has been slowed by problems with the highly automated “intelligent factory” manufacturing system it built for the model at its plant in Tochigi, north of Tokyo, two of the people said.
Nissan designed a system that would allow it to produce cars with different powertrains – batteries, hybrids and internal combustion engines – on the same line.
Implementation has proved “an extremely, extremely high challenge” and the advanced paint line has become a persistent headache, one of the people said.
Nissan also faces shortages of plating for an electronic component for the Ariya after a fire at China-based supplier Wuxi Welnew Micro-Electronic in January, one of the people said. The supplier told Reuters it had shifted output to a second plant and was “working to recover production.”
In a statement to Reuters, Nissan said Ariya production had faced challenges including supply of semiconductors, disruptions in components shipments and the factory’s paint line. “Nissan is making a full and diligent effort to fully regain production capacity at the plant,” the company said.
A fancy new factory, plus the standard-issue supply-chain disruptions equal an equation for headaches. I haven’t driven the Ariya yet but I’ve heard it’s good, if unexciting. (I also haven’t seen any on the road, ever!) But clearly, it’s a crucial component of what Nissan wants to do in the EV era. They had better figure this out sooner than later if it’s going to be a true player here.
GM Offers Buyouts To Employees After Nicely Profitable 2022
Here’s one for your “Capitalism Is All Made-Up” file: Though GM posted a record $14.6 profit for 2022 and paid its workers a handsome bonus to go with it, it is now offering buyouts to a “majority” of its 58,000 white-collar workers in the U.S. CEO Mary Barra said Thursday that the move is part of an effort to cut $2 billion in costs over the next few years. Here’s CNBC with the details:
The “Voluntary Separation Program,” or VSP, will be offered to all U.S. salaried employees who have spent five or more years at the company as of June 30. Outside of the U.S., the automaker will offer buyouts to executives with at least two years of time at the company.
GM expects to take a pretax charge of up to $1.5 billion related to the buyouts, according to a public filing Thursday. The majority of the charges are expected to be all-cash and occur during the first half of the year, the company said.
Barra, in the letter Thursday, said the program is “designed to accelerate attrition in the U.S.,” assisting the company in potentially avoiding “involuntary actions” in the future. The buyout offer comes after the Detroit automaker said last week it would terminate about 500 salaried positions globally.
Why do this after the record profits? For the usual reasons, like shoring up funds for the expensive EV transformation being undertaken by the entire industry. There’s also an upcoming UAW contract process coming up, and those workers will be likely to ask for more hourly money thanks to the record profits.
Anyway, buyouts are often a precursor to layoffs, and hopefully, GM’s people won’t have to face that. This buyout offer also reportedly comes with up to a year of COBRA medical coverage; not a bad deal if you’re in a position to take advantage of it.
[Editor’s Note: This type of thing is not unusual in the auto industry, but it is not a sign of good times. At Chrysler, when times were tough, the company offered employees VTIPs, or “Voluntary Termination Incentive Programs,” that involved money and a voucher for a car, as long as the employee agreed to leave the company (and, according to rumors from folks who dealt with the VTIP in the early 2000s, to agree never to return).
Here’s some info on the VTIP from 1991, per Justia US Law:
In April, 1991, Parker received a brochure for Chrysler’s newly implemented Special Early Retirement Voluntary Termination Incentive Program (“VTIP”). The package was accompanied by a cover letter signed by Chrysler’s president, Lee Iacocca, which explained that, as a result of “slim profits,” Chrysler needed to reduce its workforce by 3,000. The letter also explained that choosing the program was completely voluntary. The VTIP package included $62,000, a Chrysler vehicle, six months of continued life and health insurance coverage, and savings plan benefits. The brochure also offered information sessions and outplacement counseling in connection with the VTIP.
-DT]
Sen. Marco Rubio Hits At Michigan’s Ford-CATL Plant
Remember how Virginia Gov. Glenn Youngkin passed on having a Ford-CATL battery plant in his state because he was afraid of undue “Chinese Communist Party” influence on the battery giant’s operation there? And remember how the Ford plant went to Michigan instead? It all shows you how political these battery fights can be, especially with companies from China—which has such dominance in this space already—getting involved.
Rubio, the top Republican on the Intelligence Committee, introduced legislation that would block tax credits for electric vehicle batteries produced using Chinese technology, saying it would “significantly restrict the eligibility of IRA tax credits and prevent Chinese companies from benefiting.”
Ford said in response to Rubio that “making those batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do. A wholly owned Ford subsidiary alone will build, own and operate this plant. No other entity will get U.S. tax dollars for this project.”
Last month, Rubio asked the Biden administration to review Ford’s deal to use technology from CATL.
My take is this is a little overblown. First of all, the entire point of the IRA—one of them, anyway—is to create a North American battery supply chain ecosystem so that we don’t have to rely on China, a hostile peer state that already has too much control over that world already. Second, I think we can safely assume security and IP protection will be paramount for Ford here, right? Third, this plant represents thousands of American manufacturing jobs, so it’d be a shame to see those get torpedoed over speculative politics.
To be fair, however: China is also giving this Ford deal extra scrutiny since they trust us about us much as we trust them. That’s probably unlikely to cause the deal to be blocked, though. And while some speculate America could be at actual war with China in a few years, my other favorite car blog the Council on Foreign Relations points out that none of these heightened tensions have kept American companies from doing business in China:
To be sure, the Ford-CATL deal is part of the larger story that there is in fact much less decoupling between the two economies than headlines would lean one to believe. Macro-level statistics suggest that geopolitical tensions have not deterred U.S. commercial actors from continuing to deal with China. New data released in February by the U.S. Department of Commerce reveals that both the import of goods from China to the United States and export of goods from the United States to China increased from 2021 to 2022, totaling a cumulative $690.6 billion in 2022—a record high level. Investors are similarly bullish on China, with, for example, Goldman Sachs’ overseas hedge fund clients’ positions in China also reaching a record high.
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The GM move is to remove salaried workers and replace with contractors or temp employees. Contract/temp workers can be cut easily, cheaply, and without media news. The Big 3 have really stepped up their H1 hiring the past 10 years since the last crash, these people are contractors & off the books. Even is people that take the package and can return some day, they will not be perm FT salaried employees, they will be contractors/consultants.
The problem with this strategy is you lose institutional knowledge over time. Onboarding and offloading contractors gets to be inefficient and disruptive. Let’s use a hypothetical example. You botch a new product launch, but you learn from it. Are you using those same experienced contractors for the next launch?
Of course none of this matters to investors who track value in seconds rather than years.
Whatever Mitsubishi, just give me a US market Delica again.
Republicans spent decades preventing investment in EV technology, and now they’re pissed that American companies need help from countries who actually made the investments that we should have. It’s a great time for those of us who enjoy dark humor
Speaking as a 57 year-old man and without getting political these continuous early buyout efforts are a bit frightening. It’s clear that there’s a conflicting trend of companies endeavoring to make their workforces younger and cheaper, while the threats of inflation, Social Security going insolvent, health care and housing costing ever more, and other issues are causing people like me to anticipate working until age 70 or older. I do live in fear of losing my job. Fortunately I’ve been sensible financially so I can weather the storm but if I lose this job there’s little chance I’ll find another one that pays nearly as well, and age discrimination would likely make finding another suitable position difficult.
I understand that cost saving urge but there’s also a huge risk in shedding your experienced people in waves. While institutional inertia and resistance to change can be quite damaging there’s a ton of useful institutional wisdom that’s being tossed aside. Young workers need training and tempering.
In my current role I am a manager of young engineers coming straight out of college and I guide them through a year of on-the-job training and then three years as customer support engineers before promoting them out of my team to higher level positions. Contrary to popular imagination I see plenty of 20-somethings who are intelligent and willing to work hard as long as they are treated well and fairly. If Gen Z seems nihilistic and have a bad attitude at times it’s because they see how the Silent Generation, the Boomers, and the Gen Xers have put the world in its current state and they rightfully resent it. The problem is they don’t know much of anything when they come out of school (thanks, overly expensive and ineffective educational system!) and need capable mentors to bring out their full potential. That’s where I come in, and you wouldn’t believe just how much I have to teach these young people to get them to the knowledge levels I need them at.
Companies that actively shed their experience and willfully ignore the need to mentor and train their younger, cheaper workforce are going to suffer in the long run.
Our Nissan sister dealership is almost choking on Ariyas. They have a ton, and demand is there for EVs… which is getting filled by Leaf stock. With Vermont’s incentives, the Leaf is probably the cheapest car you can get; the premium for an Ariya is a hard sell when someone can go EV in a new Leaf instead.
How dumb is Rubio. Once the plant is finished, it can be nationalized for the war effort should we come to blows with China.
He is infinitely dumb. In fact he’s so dumb, dumb doesn’t even begin to describe him. The adjective doesn’t exist because at least 900 other adjectives would have to be created before we go to the one to explain his level of dumbness. I hope hat helps answer your quesiton.
Damn it, we really need an edit button.
CUV all the things and stick PHEV drivetrains into them. Also rebadge an Ariya to have a token EV while they work out how to EV everything.
For Ford, aren’t they using Chinese LiFePo technology for that plant? Hate to say it but China is pretty dominant in that area. May as well use their tech while innovating. And Chinese automakers already know how to botch a product launch. They don’t need Ford’s help there.
There’s a part of me that’s kind of rooting for Mitsubishi. It likely helps that the new Nissan products do seem to be healthy improvements over their predecessors, so better base to start with. The Outlander seems to have a genuinely nice interior (haven’t sat in it personally, and the PHEV gives them something a bit unique for the segment. So, there’s promise – they just need newer products out there. But there are people who genuinely don’t know if they still sell cars here, and I’m not sure if that’s better or worse brand image than the budget-car/buy here pay here positioning they’ve been in.
I’ve actually done some research on Mitsubishi’s family haulers lately and have come to the conclusion that they’re competitive. They’re not necessarily class leading in any one category but they’re affordable, they offer good hybrid technology, and despite their US reputation taking a hit they’re still reliable cars. They have a decent formula. Don’t get me wrong, they’re not going to unseat Honda or anything, but the products are far from DOA.
Honestly as much as I’d like another Evo and currently drive a car that’s been compared to it for both good (powertrain) and bad (chintzy interior) reasons, I think they just need to stick with what they’re doing. Crossovers are how you make money. I think if they keep improving their hybrid and electric technology they’ll be in a good place. I’m rooting for them because I love an underdog and they’ve made some amazing enthusiast products in the past.
I go back and forth when it comes to this anti China grandstanding nonsense. On one hand I know for a fact that China is not our friend, that they’re committing atrocities, and that they’re more or less the defacto model for a modern totalitarian regime. But on the other hand I just see a lot of this as more recycled Red Scare bullshit and I find it ludicrous and exhausting.
I don’t think Glenn Youngkin or Marco Rubio are up in arms because they care about human rights violations…and hell, Republicans got a taste of their own bootleg brand of totalitarianism in Trump and they loved every second of it. Prominent Republicans are trying to dismantle child labor laws, social security, etc. as we speak. They look at what countries like China do and their heart skips a beat.
They’d love nothing more than to stash “the poors” away in factories from the cradle to the grave working for less than minimum wage so they and their handlers can reap windfall profits. At the end of the day to my eyes what this is about is DURRRRRRRRR *audible, prolonged, wet fart* COMMUNISM BAD!!!!
It’s just more culture war red meat for their troglodyte voters to slop up from the Fox News trough. The funniest part of it is China isn’t even communist in practice. Economically the country is basically a crony capitalist oligarchy…heyyyyyyy wait a second that sounds familiar ???? Anyway, the fact that COMMUNISM is still so easily weaponized today is just sad. Right wing politicians literally throw it out there and it convinces their voters that basic human rights like healthcare, education, etc. are COMMIE BULLSHIT! This is why we can’t have nice things. Goddammit…
Happy Friday everyone!
“At the end of the day to my eyes what this is about is DURRRRRRRRR *audible, prolonged, wet fart* COMMUNISM BAD!!!!”
Okay, I read this in the Regular Car Reviews character voice and it was amazing.
I’m honored to be associated with anything RCR related 🙂
DONT CALL IT A COMEBACK THEY’VE BEEN HERE FOR YEARS!
Doing what they have been doing is the right call: Nissans with hybrid power and value-pricing.
Mitsu would be back with a sub $17000 ev or ev with a range extender called a colt.
I really want to cross shop a mitsu pajero that can compete off road with the wrangler and bronco. both pie in sky wishes .
Or make the EK X Kei Car the colt and drop the Charade.
“and, according to rumors from folks who dealt with the VTIP in the early 2000s, to agree never to return”
I do not believe that is entirely true.
I worked with a number of people who took those buyouts during those times and had returned, eventually, to Chrysler (then FCA).
I do say eventually, because I think it *was* stipulated you could not return for a number of years.
Hey buddy, since you continue to copy and paste this list, please update your software :
The megane doesn’t exist anymore, only the eMegane, RS dead too, never was awd anyway so no lancer wanabe.
Kangoo / trafic / Master already have Nissan branded copies.
What mitsu actually branded lately is the Renault Captur, as an ASX, fwd shitty compact suv.
I was really considering a Outlander PHEV for when we need another vehicle this fall, but then they changed the EV rebate program and it no longer qualifies. It’s tough to justify that purchase when we can find another EV with a 7500 rebate. I’ll probably just end up ordering a Bolt EUV because the numbers make much more sense.
On the GM note, I suspect part of the VSP to to shed some employees who don’t have skills that transfer well to electrification programs. I would guess that VSP’s are not going to be accepted to most of their engineers that are already working on electric vehicle related programs. Just my guess. I do agree that it’s not a good sign for the economy in general.
I feel like Mitsubishi is very strong in the Small vehicle market. They could pretty easily compete with the Maverick buy cutting out the rear end of an Outlander and calling it a Raider. they already make the outlander in many forms of drivetrain. this would just end up being a lower cost option since it would have less metal and glass and all the other stuff in the back of an outlander.
That’s a cool idea, esp. if Mitsubishi forgoes all the profitable bells/whistles that Ford is adding in the Mav that are completely jacking its price.
Focus on producing as many as you can, and all of sudden people are noticing them everywhere, which of course leads more people to say “hmm, maybe I should look at Mitsubishi…”
A Lancer sedan/hatch with the same concept of the Mirage – a basic but well-built car with a warranty and maybe a little quirk.
It’s cool that the Mirage is selling (I’ll admit I didn’t expect that), and seems to show there’s a fair amount of “21st Century Saturn” shoppers out there who want a decent automotive appliance with the lower running costs of a car vs a SUV (e.g. they appreciate that 15″ car wheels mean cheaper tires).
If Mitsubishi wants to be relevant again in the US, they need to pump out crossovers like there is no tomorrow. Extra small, small, medium small, medium, medium large, large, extra large, XXL. Cover every CUV segment there is, offer all of them as PHEV or EV.
Then they should relaunch the Mighty Max as a direct PHEV competitor to the Ford Maverick and Hyundai Santa Cruz. With America’s insatiable desire for crossovers and trucks, they could be swimming in money like Scrooge McDuck.
Where’s my Mitsubishi Zero?!
It went down with the ship?
Man, maybe it’s me being a boomer but… am I the only one who thinks the abbreviation “IRA” for Inflation Reduction Act is a bad choice? Cause when I read “IRA threatening car industry” I’m thinking car bombs, not taxes.
I get what your saying, but as I get older, I associate it with retirement accounts.
I suspect the Mitsu comeback will go about at well as the Mistu Heavy Industries rocket did. Failure during the second stage of implementation.
I’m no boomer, but I am right there with you. Depending on the headline, I’m thinking about the Troubles or retirement savings, not EVs.
Non-Boomer here, but yes, I think of this every single time. (Also, if you’re into that history, read “Say Nothing” by Patrick Radden Keefe. I cannot recommend it more highly! Outstanding story and work of journalism.)
Nah as a borderline Millennial/Gen-Z (depending on which chart or study you read) that was my first instant thought.
When you say car bombs I think of getting blitzed on St. Patrick’s Day.
If I’m Mitsubishi right now, I would focus on two things: Ralliart and PHEVs.
The Outlander PHEV is always in the conversations, but they could stand to give it a little more attention and also introduce other PHEV models. While others are trying full EV, they could use a lot less lithium to stay in the conversation. And Ralliart models are great for both grabbing some enthusiast sales and getting more eyes on their vehicles.
Mitsubishi’s hybrid tech has a major flaw: At least in the Outlander PHEV: the car won’t start below -25C or so with a “unable to start to protect battery” on the instrument panel.
Yeah but where does -25c happen? The moon?
it is -25oC or colder for weeks on end in MN, WI, ND, the UP of MI and other great plains states.
It’s been like that most of the last month here in North Dakota. I try to keep busy with projects, get outside daily to keep the SAD at bay, but by mid-March, I’m D-O-N-E.
Canada?
It was -31c here in Halifax a few weeks ago.
-25C = -13F. Very cold, but hardly unheard of. Didn’t Minnesota have something like -70F wind chill just a month ago?
Shoot, it was -12°F here in Bismarck, ND this morning. It’s warmed up a bit now to a sweltering -8°F. If we’re lucky, the high today might reach 16-18°F
I thought it was possible to pre-heat the vulnerable components. Are they not implementing that? Odd…
That is Mitsubishi’s way of telling you that you really need to move to somewhere warmer.
“Second, I think we can safely assume security and IP protection will be paramount for Ford here, right?”
I think we can safely assume as much effort will be put into this as ensuring quality launches of all of Ford’s products.
Harsh, but sadly probably close to the truth!
Oh, snap!
Quality is Job … well, something. With that said, my 2018 Fiesta ST assembled in Hermosillo, Mexico was properly screwed together and has not had a single issue in nearly five years of ownership – despite my constant hooning.
Sadly, customer security and safety is nothing but lip service and an afterthought to most companies.
There was a time when Mitz had the 3000GT in base model, mid model, and the scorching VR-4 while at the same time it had the Eclipse with base model, mid model, and the scorching GSX. Why not do the same now? They’ve already got the car and the platform so just offer a high performance version of everything you sell.
Mitsubishi should rebadge some Renaults and Dacias
Mitsubishi Kwid
Mitsubishi Sandero
Mitsubishi Kangoo
Mitsubishi Trafic
Mitsubishi Master
Bring back the Montero, since big SUV’s will always sell here.
Rebadge the Megane as a Lancer, and the RS can be the new Evo XI.
For a comeback, the 3000GT.
It really does need a halo car, doesn’t it? And the 3000 was the firm’s technological tour de force back in the day (all wheel steering, etc.) so having it reborn as an EV might make sense.