It’s been a bleak end of the year in some ways, so I’m going to try to cheer people up with today’s Morning Dump. Volkswagen’s union is calling the plan to eliminate 35,000 “future” jobs a “Christmas Miracle.” This means no plant closures or massive wage cuts, which is amazing, with most of the concessions coming to future jobs. The same vibe is continuing in Ohio, where Stellantis has reversed its position on job cuts to a Jeep plant there, for reasons seemingly having to do with the loss of one specific employee.
Did Elon Musk play a role in convincing President Trump and the Republican Party to nearly shut down the government in exchange for Tesla getting the ability to ship jobs to China? This is the claim that some are making and it’s hard to counter.
Ford’s had quality issues this year, and it seems like the brand is trying to fix those woes, although the speed that it’s been improving doesn’t seem fast enough for CEO Jim Farley, who is making more moves to try to lower warranty costs and improve his company’s reputation.
Volkswagen Workers Don’t Get The Worst Outcome After 70 Hours Of Negotiation
It was clear that Volkswagen and its German union, IG Metall, wanted to get a deal done ahead of Christmas. What was not clear was how that was going to happen given that Volkswagen wanted to close a bunch of plants, and workers, understandably, didn’t want that.
Volkswagen is far from the only major carmaker to find itself building uncompetitive products, struggling in China, and realizing it overcommitted to an EV future that isn’t going to happen without a lot of government support. But Volkswagen is a German company and that puts it in a uniquely tough position. The country’s government is in flux, and, by virtue of being in the EU, has to abide by some rules it wouldn’t necessarily make if things were entirely up to German leaders. General Motors faces a lot of these same challenges, though it has a strong domestic market it can fall back on to support itself. Volkswagen doesn’t, as Europe’s car sales have faltered this year.
Continuing to employ a lot of people, expensively, for years to come to make cars people don’t want or can’t afford isn’t a great strategy. This means that Volkswagen had to find a way to save money. The company’s opening bid was just to close a bunch of plants which, in some ways, is probably the most logical path forward. However, the complicated politics of Germany (the German state of Lower Saxony has a large voting share within VW) makes it difficult to close plants, especially given the rise of the far-right AfD party in exactly the places where job cuts would only bolster that party’s position.
The solution? Volkswagen is going to eventually take 700,000 vehicles out of production in Germany, albeit slowly and in a way that everyone involved hopes will avoid unnecessary pain, as Reuters explains:
VW said the deal would allow savings of 15 billion euros ($15.6 billion) annually in the medium term and saw no significant impact on its 2024 guidance. While there were no immediate closures, VW said it was looking into options for its Dresden plant and repurposing the Osnabrueck site, including looking for a buyer. Some production would be shifted to Mexico.Vehicle production would shut at the Dresden plant by the end of 2025. VW AG’s staff will not get raises under a collective wage agreement over the next four years, while some bonuses will be scrapped or reduced.Production at VW’s Wolfsburg plant, its biggest, will be cut to two assembly lines from four.“No site will be closed, no one will be laid off for operational reasons and our company wage agreement will be secured for the long term,” said works council chief Daniela Cavallo.
This society is shocked to discover that the economy and value creation do not run on their own, but require continuous investment and recurring phases of reform.
The poor economic situation is currently the number one issue in Germany, as the latest DeutschlandTrend survey by the Infratest dimap institute shows. At the last federal election three years ago, the problem priorities were completely different: At that time, the issues of the environment and climate, immigration, social justice and Corona dominated the political mood. Now the pollsters are talking about an “economized problem agenda”. Three quarters of those surveyed are worried about Germany as a business location. Tragically, they do not believe any party has outstanding economic policy skills. It is questionable how the country is supposed to free itself from the pessimism trap under these conditions.
A lot of my family is German, and the pessimism lately on the WhatsApp group has reached historic proportions, even for Germans. People clowned on former European Central Bank President Mario Draghi for his report on European competitiveness, mostly because it seemed impossible to make the changes he asked for given the current appetite for change and meta-governmental structure. I don’t think he was wrong, though. Germans are savers. That’s what they do. Other Europeans do as well.
That’s exactly the wrong response to this crisis. As Draghi’s report pointed out: When European inventors invent things, they go somewhere else to pay for them and make them. Why? Europe doesn’t invest enough in itself. If Germany is to de-industrialize it has to be able to do something else, and it’s not clear what this is. It’s also not clear that de-industrialization is going to work, especially as countries like the United States start to re-industrialize. I don’t know what Germany is supposed to do, and I don’t know that any German companies or politicians have articulated a clear enough strategy for the future.
The “Christmas Miracle” of this deal is good for about six years, and then I fear that Germany is going to need another miracle.
Jeep Trades One Employee For About 1,100 Others, At Least For Now
Both the outgoing and incoming American administrations are saying they want to bring more industrial jobs back to the country. If that’s the case, the last thing you want to do is close a bunch of plants here in the United States. Of course, that’s what then-Stellantis CEO Carlos Tavares, pictured above, tried to do.
This included cutting about 1,100 jobs at Ohio’s Toledo South Assembly Plant, which is home to the Jeep Gladiator. Now that Tavares is gone, Jeep has decided to reverse course, at least according to the UAW, via Toledo’s WTOL:
On Friday, a Stellantis spokesperson confirmed the postponement and that employees would “return to work as scheduled after the new year.” Stellantis said the decision was made as the company “continues to reassess its strategy in North America.”
Another letter from the UAW on Friday stated that “the number for indefinite layoffs has been reduced to 125.”
“Who knows what it’ll look like when we get when we get to February, but, right now it looks like 125 people,” UAW Local 12 Bruce Baumhower said. “Then you think about all our suppliers, we had another 1,000 of them that were going to get laid off on top of the 1,100 from the initial announcement, and now, they’ll all be saved, too, if this all comes through the way we think it’s going to.”
Baumhower added that Stellantis is offering a retirement incentive that could further reduce the new number.
There’s a lot here that’s unresolved, and it’s not like the Gladiator is going to be a lot more popular, but maybe there’s another Jeep product that slots in here eventually? Either way, it’s good news for some workers in Ohio.
Democrats In Congress Claim Elon Musk Got President-Elect Trump To Threaten Shutting Down The Government To Help Tesla’s Business Dealings In China
Writing about Tesla CEO Elon Musk is not as much fun as it used to be. There are too many sites, and people, who get knee-jerk mad OR excited about everything Musk does, and one hint in either direction will eventually lead them to the conclusion that you’re for them/against them. Talking about Elon Musk sometimes feels like drinking ocean water when you’re dying of thirst.
I trust you, dear readers, and I enjoy the back-and-forths I have here, whether its with people who agree with me or the ones I disagree with as I learn a lot from both. This is a valuable aspect of this site, and I do not want to ruin it with politics. On the other hand, we are in the historically unique (I think, please tell me I’m wrong) situation of an automotive CEO (or, really, any CEO) who is leveraging his connection with a President to make some wild changes to the government. Imagine if Robert McNamara was CEO of Ford back when he drove us further into the Vietnam War; that’s as close as I can get.
There are three unresolved conflicts of the President Trump-Elon Musk tie-up:
- It’s likely, given their histories as dealmakers, that both think they’ve got the upper hand over the other one.
- Musk builds electric cars, Trump doesn’t seem to think much about them.
- Musk cannot make his future Tesla plans work without the Chinese government, which was President Trump’s favorite target.
My sense is that the first conflict will resolve itself on its own, with either one swallowing their pride or a huge blow-up. The second conflict plays well for Musk because he can afford to ingest a little poison and his competition cannot. The third one seems more intractable to me and, yet, maybe there was a solution this week.
As always happens around the end of the year, Congress was in a position of having to pass a short-term spending bill or force the government to close around Christmas. There was a bipartisan deal in the table which included a bunch of random stuff, including a provision that would require screening of investment in critical technology (like AI) in China. This is the kind of provision that few people get upset about in Congress because of historically bipartisan concerns over China.
Right as the bill was about to be voted on, both President-elect Trump and Elon Musk railed against the deal. President-elect Trump wanted to raise the debt ceiling for a few years, ostensibly so he could continue the large tax cuts that defined his first term. I guess another bipartisan belief is that “debt” is only bad when it pays for something you don’t like. However, there are a few die-hards on the Republican side of the government who don’t ever want to raise the debt ceiling, and Republicans have an extremely narrow majority and either need Democrats or every single Republican to get anything done.
What did Musk want? According to this letter from Democratic Representative Rosa DeLauro, it was to protect Tesla’s investments in China:
This outbound investment provision was agreed to after months of bipartisan, bicameral negotiations and years of advocacy from Members of Congress. It would have kept innovation and manufacturing in semiconductors, artificial intelligence (AI), quantum computing, and other cutting-edge technologies in the United States and prevented wealthy investors from continuing to offshore production and U.S. intellectual property into China – benefiting only their bottom lines and the Chinese Communist Party, while hurting American workers and threatening our national security. Importantly, many of the innovations this bill would have protected were developed with the help of taxpayer dollars – all the more reason for these innovations to remain at home and not be used to fuel adversaries’ technological and military capabilities.
It is no surprise, then, that “President” Musk does not want to see a funding deal containing this provision be signed into law. Musk’s investments in China, and ties with its government, have only grown over the last few years – alongside his growing involvement in American politics. Musk’s car company, Tesla has poured billions of dollars into investments in China, particularly its “gigafactory” in Shanghai. The Shanghai plant is Tesla’s largest car manufacturing facility – the Chinese gigafactory produced about 50 percent of Tesla’s global automobile output over the last year,1 and Tesla drew nearly a quarter of its global revenue in 2023 from sales of Chinesemade vehicles from the Shanghai factory.2 And there are signs that Musk plans to double down on his company’s investments in China – as Tesla awaits the Chinese government’s approval of its “Full Self-Driving” technology, Musk noted that “the value of Tesla lies primarily in its plans for autonomous driving.” And in May of this year, Tesla broke ground on a new $200 million factory to manufacture large batteries critical to its electric vehicle supply chain – down the street from its Shanghai car factory. Notably, proponents of regulating U.S. investment in China have advocated for the inclusion of large battery manufacturing in the list of technologies subject to outbound investment screening.
Rep. DeLauro is far from the only person accusing Musk of doing this, and the allegations are getting a lot of attention in the media.
Is this what Musk truly wanted? It’s impossible to know for sure unless he comes out and says it, but there are some reasons to believe this is the case. Discounting what Democrats say because, you know, they don’t like Elon Musk, it’s clear that Musk needs China. Not only does the company sell a ton of cars there, but Musk has been courting China’s government in order to try to build out his self-driving car capabilities with a huge pool of consumers.
Additionally, Musk got exactly what he wanted. President-elect Trump of course didn’t get his debt-ceiling increase. Not much of the bill actually changed, but this provision was removed from the final bill. Trump looks weaker here, as does House Speaker Johnson, who looked to be cruising to easy reelection to Speaker in January and is now facing a potential revolt with some even suggesting Musk as Speaker of the House.
There’s an old truism about the Internet that often applies to Musk, which is that when people are right they’ll refute you, and when they’re wrong they’ll just make fun of you. I will therefore end by pointing out that Musk made fun of Rep. DeLauro on his media platform X.
Ford: We’re Still Working On That Quality Thing
Ford CEO Jim Farley has made the improvement of quality at the company a huge issue for The Blue Oval, going so far as to delay the rollout of the F-150 until issues were addressed. The company is still spending a ton of money on recalls and fines, though mostly for cars built before 2021 it says.
What’s the next move? Appointing a new quality chief. From the Detroit Free Press:
Ford Motor Co. is appointing a new head of quality, the company confirmed Wednesday, as the automaker works to reverse its industry-topping record of recalls and reduce warranty costs.
The automaker will move control of its quality team from Jim Baumbick to a new leader who has not yet been announced, as Baumbick takes on the responsibility of EV programs.
Baumbick, who has led quality since late 2022, will oversee the entire vehicle programs team, which focuses on keeping the costs and timing of vehicles on track, now including EVs under his supervision as well as gasoline-engine vehicles.
If Ford can save money on recalls it’ll be a big improvement to the company’s bottom line and reputation.
What I’m Listening To While Writing TMD
I realized this year that “Christmas Wrapping” by The Waitresses was actually one of my favorite modern Christmas songs. It’s so ’80s and I love it.
The Big Question
What car are you most looking forward to in 2025?
I’m looking forward to a used Honda Accord 2.0T once I can get my lemon claim settled on this 4XE.
What car are you most looking forward to in 2025?
Something cheap with amazing energy efficiency, low NVH, great visibility with knobs, buttons and sliders and either a Double DIN sized hole in the dash or a fully integrated touchscreen.
So a 10 yo used Civic.
As I continue to struggle with options for a large SUV outside of the Grand Highlander, I’ve considered the Ford Explorer and the Lincoln Aviator. They are a good size, they seem nice enough. The 400 hp motor won’t win fuel economy awards, but at least you get some power for it.
But Ford’s reputation for “quality” really makes me pause. It is hard to put your money on the table when you don’t have a lot confidence in how well it is made. I’m not buying a sports car here where I’d forgive some fragility for performance. I’m buying a road trip car. I want it to start every day, make its trips with zero drama, and rarely need service outside of maintenance visits.
Being under warranty doesn’t excuse problems, because so many dealers are shitty stewards of warranty work. Probably at least in part because the OEMs don’t offer enough incentive to take care of customers. Too many stories of people losing their car for a month and not even being offered a loaner.
“What car are you most looking forward to in 2025?”
I’m not looking forward to any specific vehicle. I am looking forward to the greater proliferation of BEVs… particularly when it comes to BEVs replacing diesel-powered trucks because I like clean air.
I like clean air too but I think hybrid trucks of the REX variety with as small and as efficient an ICE as possible are the best path forward there. A clean, highly efficient on board emergency generator capable of providing heat and power to an entire block party should be a huge selling point to the truck crowd, even to coal rollers as no coal roller want to stink up (insert preferred personal pronoun here) own house/campsite/tailgate party.
“ hybrid trucks of the REX variety”
I see both being useful. The fact is that the Rivian vans built for Amazon and the Brightdrop vans made by GM are great for local deliveries.
And Tesla has shown that BEVs can work for a lot of longer haul trucking as well.
As the cost continues to come down, I also predict that having solar with a battery pack as a buffer will become a common thing for both houses and RVs.
And I REALLY look forward to ICE generators being less popular. I camped in a park where some people in a motorhome or large RV insisted on running their generator all day. The beauty of solar with a battery is the lack of noise.
I’m mostly interested to see if Ram screws up the Ramcharger truck. I’d like that to be a quality offering but I’m not sure the quality will be there. I know how we got here but it’s still enraging to see a person like Elon out and proud about how much he’s corrupting all aspects of federal government. Aided and abetted by the very people who scream and yell about crony capitalism and all that crap.
I’ll continue, in 2025, to clutch my car for another year waiting for Subaru to bring the WRX hatch back.
Does the new Prelude come out next year? That’s at least somewhat interesting. Otherwise I’m excited to drive my Chrysler van for another year.
Im looking forward (and praying) that the 2025 Tundra will have an engine that will make it past its 1st or 2nd oil change. Also is there any way to reign Musk in? I was hoping the whole dystopian future thing was going to be a little farther in the future. I would really prefer if my children will never need to learn who he is.
Re: Musk
Well, we could start making him un-rich by dumping Tesla stock – because not buying Teslas seems to be having little effect on the stock price.
Tesla stock doesn’t trade on fundamentals. It’s basically a meme stock.
He’s reigning in already, that’s the problem. I’d also suggest reining him in, but it’s not exactly raining adults, you know?
There’s not a whole let to get excited about next year. I guess I’ll just cross my fingers that an Integra hybrid happens…and I guess I’m interested to see how the straight 6 Charger is and whether or not Ford is actually building a Mustang sedan or if it’s just vaporware.
I’m worried the Integra Hybrid is just going to be the Prelude, which isn’t the same thing.
I was going to say I don’t know why luxury manufacturers have so few hybrids, but I do. Wealthier customers are more open to EVs and they need to establish their EV brand and yadda yadda yadda…but for someone like me? A mid 30s professional whose next purchase will probably have a Lexus or Acura badge?
An entry to mid level hybrid luxury sedan or liftback would be the bee’s knees. It would save me money and make me feel a little less guilty about my carbon footprint…and the weirdest part is I’m not the only one. I work in healthcare in DC and I’m pretty sure every one of my coworkers would be too…and outside of a small handful of Tesla stans/EV truthers and the Subaru crowd that doesn’t believe in buying anything but Subarus pretty much all of my friends would be too.
It just seems like such an underserved niche to me. Like give me a stylish luxury hybrid that I can get for 50k or less that isn’t a total snooze dynamically and I’ll write a check tomorrow. I get that the psychotic bean counters probably say SEMI AFFORDABLE HYBRID BAD UPSELL TO THE BIGGEST SUV WE HAVE but I feel like volume would make up for the lower margins at a certain point.
100%, I’m in the same boat. My big elephant in the room though is the lack of Lexus IS hybrid. An IS350h would be awesome, some variant of the 2.0T with hybrid power.
EDIT: They make an IS300h just not for the US
Interesting Prologue you’ve written there.
Perhaps I’m taking this thread too literally.
I can’t help but think the idea for the Prelude started as a new Integra. The new Prelude is a liftback, but Preludes had trunks and 2-door Integras were liftbacks. I’m not anti-current-Integra and don’t want that discourse to start up but it’s not wrong to say that the 2-doors are remembered most. But then they realized Acura would be left with a big hole in the lineup for a 4-door vehicle below the TLX in price and size, but giving them two smaller models when Honda lost both the Civic and Accord coupes didn’t make sense either.
I’m hopeful that the arrival of the ADX makes a hybrid Integra more likely. ADX will no doubt be priced just over the Integra, and when you’re at $40k for the same 1.5T/CVT combo, which one is the average buyer more likely to go for? But a hybrid Integra would be a different value proposition. OTOH – that is right up against the Accord hybrid pricing, and with Toyota going all-hybrid on models like the Camry they may just be focusing on producing as many hybrids of the Accord/CR-V/Civic, which I can’t fault them for either.
Well not 2025 but I’m curious what will come of Ford’s small cheap EV, I think they said 2026. Not sure I’ve seen much hoopla for 2025, except maybe the car makes will start putting NACS ports in their EVs instead of having to provide adapters.
I think it was in the 1980s when Ford made a slogan of “Quality is Job 1”. I guess we’re still waiting, 4o years later.
Quality is Job 10
Shareholder returns are Job 1
C Suite bonuses are job 1.5
For a while, Ford had the best quality among the North American automakers.
“Quality is Job 1” was brought in by Philip Caldwell… the guy who replaced Hank the Deuce.
And that quality focus continued through the 1990s.
Problem is, after years of having better quality, some dipshits in management decided to sacrifice quality so they can save some nickels and dimes.
And as far as I can tell, quality started to slide after Jac “The Knife” Nasser became CEO in 1999
And subsequent CEOs like William Clay Ford Jr, Alan Mulally and Mark Fields also didn’t have a quality focus. If they did, then the Ford PowerShift transmission disaster (development started in the mid-2000s and it went on sale in 2008) wouldn’t have gone on for as long as it did.
Now they’re at the point the company was after Hank The Deuce retired. They must be getting clear messages that their crappy quality is costing them in terms of sales and warranty costs.
So now quality is suddenly a top priority again… for now.
It’s almost like Leon and the orange asshole are corrupt asholes that only care for themselves. But we all know they really care about the country and all us peasants. I’m excited for $0.43 cent eggs, $10,000 new cars and no taxes at all. What can possibly go wrong?
I hope the F-150 Lightning will finally get NACS in 2025. I would really prefer one with a front bench seat and at least a 6ft bed but beggars can’t be choosers in this dumb modern Truck market.
The Lightning has NACS support today with the free adaptors Ford shipped everyone. Plus you get integrated Tesla Supercharger access through the Ford app (no need to set up a Tesla account and have yet another app).
I’m still waiting for my free adaptor for my Mach-E, but the car software is fully updated to support NACS, and my friend with a Lightning did get his free adaptor and said Supercharging works great.
VW worker guy is back! I hope he’s having a good holiday!
Ha, VW worker guy has certainly gotten a lot of use around here.
And it does make me wonder if there’s an image of me being used as meme somewhere like, I don’t know, Bulgaria or something. I doubt VW worker guy knows that we’re happy to see him again.
On Germany, yes, Europe is entering a phase where some very hard corrections will need to be made. It will not be pleasant. The regulatory scheme of most western European countries needs to be radically reformed if they want to compete. It’s a very hard thing because the vast majority of these regulations probably make sense in isolation. Unfortunately decades of adding to the pile means you step back and it’s nearly impossible to start a tech company and make any real money. So what do you do as a European entrepreneur? Come to the ole US of A of course!
I think Musk knows China is going to cut him out of their domestic market like they did to everyone else. Whether he made this move for some short sighted gain I don’t know, but he has demonstrated some business acumen in the past and I have to imagine he sees this. The competitiveness of his products doesn’t matter when your business can be removed from the country with the stroke of a pen.
As for 2025, I’m looking forward to some range extended EVs being on sale and will likely lease one if, say, Genesis comes out with something nice.
Looking forward to in 2025? Well, my kids are healthy, so that’s the most important thing.
But the President-elect has promised economic pain, so we’re not spending any fun money at the moment to make sure we can handle a job disruption without selling investments. We live in a good spot for state parks and other free recreation, which is nice. But at the moment I don’t have any plans I’m excited about.
My sense is to treat the next couple of years as if Covid never went away. I have a hot tip for you campers: County Parks. In WI we found one near Viroqua called Esofia (sp). Nice clean lovely out of the way space, fishing creek, clean new bathrooms/showers and a 9 mile bike ride into Viroqua for breakfast. Oh, $10/ Night
Well, we’re not campers, but we have so many good spots within a two-hour drive of where we live that there’s really no need to be.
It’s not onbious to me, either.
Didn’t expect to have an existential crisis reading The Autopian. I have a cross-country ski trip early next year. Beyond that, I apparently have nothing to look forward to. I should work on that.
Skiing across the country sounds like a hell of a challenge.