Automobiles
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FILE PHOTO: A container ship is shown at port in Long Beach, California, U.S. July 16, 2018. REUTERS/Mike Blake
March 14, 2019
WASHINGTON, (Reuters) – U.S. import prices increased by the most in nine months in February, but the trend remained weak, with prices declining for a third straight month on an annual basis.
The Labor Department said on Thursday import prices rose 0.6 percent last month, the biggest gain since May, boosted by increases in the costs of fuels and consumer goods. Data for January was revised higher to show import prices edging up 0.1 percent instead of falling 0.5 percent as previously reported.
Economists polled by Reuters had forecast import prices rising 0.3 percent in February.
In the 12 months through February, import prices fell 1.3 percent. That followed a 1.6 percent decline in January.
The report came on the heels of data showing tame producer and consumer inflation readings in February. The jump in the monthly import prices probably does not change economists’ expectations that inflation will remain moderate through the first half of 2019, and allow the Federal Reserve to stay pat on interest rates.
The U.S. central bank has pledged to be “patient” before tightening monetary policy further this year. The Fed increased rates four times last year
Last month, prices for imported fuels and lubricants rose 4.9 percent after increasing 4.1 percent in January. Prices for imported petroleum increased 4.7 percent after rebounding 7.1 percent in January.
Food prices fell 0.8 percent in February after decreasing 0.4 percent in the prior month. Excluding fuels and food, import prices rose rebounded 0.2 percent last month after falling 0.3 percent in January.
The so-called core import prices fell 0.3 percent in the 12 months through February. Increases in the core import prices have been curbed by last year’s strength in the dollar. Prices for imported consumer goods excluding automobiles rose 0.3 percent in February, reversing January’s drop,.
The report also showed export prices increased 0.6 percent in February after declining 0.5 percent in January. There were increases in the prices of both agricultural and nonagricultural exports. Export prices rose 0.3 percent on a year-on-year basis in February after falling 0.2 percent in January.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
Source: OANN
Mahindra Automotive North America quality control workers inspect ROXOR off-road vehicles at the MANA Plant in Auburn Hills, Michigan, U.S., January 30, 2019. REUTERS/Rebecca Cook
March 14, 2019
By Nick Carey and Ben Klayman
AUBURN HILLS, Mich. (Reuters) – “Warning: Don’t do anything stupid!” reads the sign to the right of Rick Haas’ office computer.
It is the same tongue-in-cheek warning affixed to the dashboard of every off-road Mahindra Roxor vehicle that Indian automaker Mahindra and Mahindra Ltd assembles in a suburb north of Detroit.
The motto might also apply to the Indian automaker’s latest attempt to enter the U.S. auto market – an effort Haas, a former executive at Ford Motor Co and Tesla Inc, is leading.
(GRAPHIC: Mahindra eyes U.S. auto market as new car sales are poised to stall – https://tmsnrt.rs/2F5aj1u)
A decade ago, Mahindra tried to break in to the U.S. market with a low-cost pickup truck. The foray ended in failure and a lawsuit from dealers demanding their franchise fees back.
Haas, the automaker’s North American chief executive, says this time Mahindra has a more cautious “pay-as-you-go strategy.” Instead of starting with a truck or passenger car, Mahindra is reintroducing its brand with the Roxor, a vehicle that looks like a vintage Jeep.
Mahindra has built around 3,000 off-road Roxors and is using the model, which starts at around $15,000, to demonstrate to American consumers and dealers “acutely aware of our previous experience” here that the Indian automaker can build a reliable product before it launches mainstream models for use on American roads, Haas told Reuters.
“Getting burned makes you cautious,” Haas said.
RICH PROSPECTS, BIG RISKS
Mahindra is one of a handful of European and Asian automakers gearing up to enter the U.S. market in hopes of gaining sales as well as credibility that can boost their brands at home.
France’s PSA and China’s Zotye and GAC all have outlined plans for establishing beachheads in the world’s second-largest market by sales, which offers rich pickings in segments including pickup trucks, SUVs and crossovers.
But the United States is a mature market that most industry executives say is heading for a downturn, and it is already crowded with over 40 automotive brands and 300-plus models on sale.
See graphic on annual U.S. new car sales https://tmsnrt.rs/2F5aj1u
“There’s not a line waiting out the front door of every potential newcomer to North America of people saying ‘I cannot wait for a new car to show up here today,’” said Larry Dominique, North American head of PSA, which has also taken a cautious approach to relaunching here.
PSA announced last month the Peugeot brand will lead its U.S. return – the same brand that crashed out of this market less than three decades ago.
Analysts and auto executives say new entrants must stand out in a crowd to crack the U.S. market, as Tesla Inc has with electric vehicles.
Just offering a cheap car may not be enough, said Mark Wakefield, head of the North American automotive practice for consultancy AlixPartners. The higher quality of used vehicles presents a challenge, while delivering the expensive safety features American consumers and regulators demand.
“If you fail to deliver on that then you’re a pariah in the market,” he said.
Prospective U.S. entrants might look to the example of South Korean automaker Hyundai Motor Co, the last foreign automaker to successfully enter the U.S. car market.
The Korean carmaker launched cheap models in the United States in 1986, as Toyota Motor Corp and Honda Motor Co Ltd had done before. Hyundai scored early successes, but quality problems set the brand back, and forced a relaunch. Now, it is overhauling its U.S. strategy, shifting from sedans to SUVs.
The problem for prospective entrants is that if they do find an untapped niche, consultants and analysts expect other automakers to rush to fill it themselves.
A NEW STRATEGY
Mahindra’s first foray into the U.S. auto market was a disaster, as plans to launch a low-cost pickup with high fuel efficiency never came to fruition, in part because it failed to meet federal emissions standards. Angry dealers who had signed on to sell the Scorpio pickup sued Mahindra.
Mahindra regrouped. Haas set up Mahindra’s U.S. office in 2013 with just a handful of people, and that has risen to 450.
The company decided not to go into direct competition with major automakers, but to enter the much smaller and less heavily regulated market for off-road recreational vehicles sold mainly in rural America.
The Roxor stands out because it looks like a World War II Jeep. Mahindra has had a license since the end of that war to make such vehicles in India. Municipalities, mining and construction companies, and many others seeking rugged off-road vehicles have shown interest, Haas said.
The Roxor also has caught the eye of the owner of the Jeep brand, Fiat Chrysler Automobiles (FCA) NV, a potential competitor whose U.S. headquarters is just up the road from Mahindra’s. Last August, FCA asked the U.S. International Trade Commission to block Roxor sales because the model is too similar to its own Jeep.
The commision has ruled FCA can pursue its intellectual property claims against the Roxor, but on Feb. 21 Mahindra asked the agency to review that ruling.
Mahindra has signed up a network of 390 powersports dealers all over the country to sell the Roxor. Haas said around a third of powersports dealers also own car dealerships so the Roxor allows him to establish the brand, then build relationships with car dealers.
“I can’t say what our plans are, but the smoke is going to clear out of the air in the next year to 18 months,” Haas said.
Among the vehicles under consideration for the U.S. market is the new Marazzo, a minivan designed by Mahindra’s Michigan engineers for sale in India that has scored well in international crash safety tests and features Apple CarPlay.
Instead of low prices, Mahindra plans to focus on its image of building rugged, durable vehicles for India’s roads.
“We’re India tough,” Haas said. “That’s a value that resonates with a chunk of the population here.”
The speed of Mahindra’s U.S. rollout will depend not only on retail consumers but the U.S. Postal Service, Haas said. The Postal Service is searching for its next generation of delivery vehicles and Mahindra is one of five finalists for the $6 billion project, which may be decided this year.
“That contract would make a fast (U.S.) entry easier, as you might imagine,” Haas said. “If it doesn’t happen, then we have to decide what we’re doing here.”
(Reporting By Nick Carey and Ben Klayman; Edited by Joseph B. White and Julie Marquis)
Source: OANN
United Auto Workers (UAW) union President Gary Jones addresses UAW delegates at the ‘Special Convention on Collective Bargaining’ in Detroit, Michigan, U.S. March 13, 2019. REUTERS/Rebecca Cook
March 13, 2019
By Nick Carey
DETROIT (Reuters) – The leader of the United Auto Workers union on Wednesday warned that job security and preventing the shift of U.S. jobs to Mexico would be top priorities in contract talks with Detroit’s automakers slated for later this year.
“There will be no more quiet closing of plants, no more shipping jobs to Mexico and abroad without a sound,” Jones said in a speech to delegates the union’s bargaining convention in Detroit. “They are on notice.”
This year’s contract talks between the UAW and General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV are likely to be contentious, with both sides focused on healthcare costs and the use of temporary workers.
The auto industry is expected to hit a downturn following an unprecedented run of strong sales dating to the end of the Great Recession.
The talks will come after GM’s announcement in November it will close five North American plants producing less-popular sedans.
Just last week, the last Chevrolet Cruze rolled off the line at GM’s plant in Lordstown in northeastern Ohio.
The closing has drawn a lawsuit from the United Auto Workers union and significant political blowback, including from Republican U.S. President Donald Trump.
Boosting American manufacturing jobs was a cornerstone of Trump ‘s successful 2016 campaign and Ohio is a key state for his 2020 reelection chances.
The UAW has vowed to fight for GM to reopen Lordstown with a new vehicle.
During his speech on Wednesday, Jones said to workers at Lordstown and other plants slated for closure: “We have your back.”
Analysts, however, say the chances of a new product being assigned to Lordstown are slim as Lordstown was one of several money-losing GM plants running well below capacity.
GM Chief Executive Mary Barra has said the cuts will help the company’s long-term financial stability. The automaker expects they will improve annual free cash flow by $6 billion by the end of 2020 – and fund new electric and self-driving vehicles.
(Reporting By Nick Carey; Editing by Steve Orlofsky)
Source: OANN
A Fiat Chrysler Automobiles (FCA) sign is seen at its U.S. headquarters in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook
March 13, 2019
WASHINGTON (Reuters) – Fiat Chrysler Automobiles NV will recall 862,520 gasoline-powered vehicles in the United States that do not meet U.S. emissions standards, Reuters has learned.
The recall was prompted by in-use emissions investigations conducted by the U.S. Environmental Protection Agency and testing conducted by Fiat Chrysler as required by EPA regulations, the agency said. EPA told Reuters it will continue to investigate other Fiat Chrysler vehicles which are potentially non-compliant and may become the subject of future recalls.
The recall includes 2011-2016 Dodge Journey, 2011-2014 Chrysler 200 and Dodge Avenger and 2011-2012 Dodge Caliber. Fiat Chrysler did not immediately comment.
(Reporting by David Shepardson)
Source: OANN
Ford Motor Co. expects the cost of health insurance for its 56,000 hourly workers in the U.S. to top $1 billion for the first time next year, according to a person familiar with the situation, highlighting a growing expense for automakers even as car sales slow.
Those mounting health-care costs represent a potential sticking point in this year’s contract talks between the United Auto Workers and the three U.S. automakers that tried and failed four years ago to address an expanding outlay that threatens profits and jobs.
At Ford, General Motors Co. and Fiat Chrysler Automobiles NV, the tab for health insurance topped $2 billion in 2015 and has only grown since.
Bargaining negotiations get underway this summer on contracts that expire in September with each of the three automakers. Some experts say divisive issues including cost-sharing for health care benefits may lead to striking.
The UAW must balance its protection of benefits with the need to keep workers on the job at a time when GM is shuttering five North American factories and Ford is slashing shifts and cutting jobs as part of an $11 billion restructuring. Although the three automakers remain profitable, they are bracing for a slowdown that could become a recession while spending billions to prepare for a future dominated by electric and self-driving cars.
Hard-Won Benefit
Nationwide, health expenditures are projected to grow by 5.5 percent annually from 2018 to 2027, more than twice the rate of inflation, according to a new study by the Centers for Medicare and Medicaid Services. But unionized auto workers enjoy some of the most generous medical coverage plans in the country and have been spared premium increases.
The UAW sees that as a hard-won benefit that helps make up for concessions to automakers in other areas. But automakers view these gold-plated worker plans as a growing burden that puts them at a disadvantage against rivals with non-unionized factories.
“We’re returning to major concession negotiations in the auto industry,” said Gary Chaison, professor emeritus of industrial relations at Clark University in Worcester, Massachusetts. “The major manufacturers are saying: Give us a reason for why we should expand in the U.S. as opposed to China or India or somewhere else.”
Thin Contributions
With little or no co-pays or deductibles, UAW members contribute just 3 percent to their health-care coverage, compared with 30 percent by Ford’s salaried workers, said the person familiar with the matter, who asked not to be identified revealing internal data. Without changes, the growth in health-care costs over the life of the next contract would be the equivalent of a $3 hourly wage increase, the person said.
In the U.S., workers with health insurance contribute an average of 18 percent of the premium for single coverage and 29 percent of the premium for family coverage, according to a study last year by the Kaiser Family Foundation.
Health-care coverage has been sacrosanct at the UAW, which gave up wages and jobs in 2009 to help keep the automakers afloat but didn’t give back medical benefits. “The union has fought hard in the darkest of economic times to ensure its members remain protected,” said Harley Shaiken, labor relations professor at the University of California at Berkeley. “It’s not a rhetorical commitment. It is a substantive commitment at the bargaining table.”
In 2015, when then-UAW President Dennis Williams proposed creating a health care co-op that leveraged the buying power of almost 140,000 UAW members working for Detroit automakers, workers soundly rejected it, fearing it would erode their benefits. That’s why labor analysts expect health care to be a flashpoint in negotiations for the contracts.
‘Cadillac’ Tax
As the union gathers in Detroit this week to map out its bargaining strategy for this summer’s contract talks, it has made retaining and expanding health-care benefits a top priority. The union said it will seek to eliminate disparities in coverage, which have left newer workers with less-generous coverage than veterans. It also is looking to reduce co-pays on prescription drugs and avoid any “cost shifting” from companies, according to the bargaining resolutions prepared for the convention.
Looming over the talks is a provision in the Affordable Care Act — also known as Obamacare — that will tax so-called “Cadillac” health care plans like the UAW’s at 40 percent starting in 2022. That cost would be crippling for the automakers and its workers, both sides say. But finding a way around that will be tricky.
Labor experts say neither side is eager to make concessions, which could bode ill for the negotiations.
“I don’t think any of the Big Three can absorb that cost, so they’re going to want more cost sharing,” Wheaton said. “But I can see the UAW saying, we’ve given up so much money on other things and we’ve tried to claw back some of that, and now you’re saying we need to make up for a 40 percent hit on health care. I think you’re talking strike.”
Source: NewsMax America
FILE PHOTO – Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, gestures as he speaks during the presentation of the Renault’s new Alpine sports concept car “Vision” in Monaco February 16, 2016. REUTERS/Eric Gaillard
March 12, 2019
TOKYO (Reuters) – When the three leaders of the world’s top car-making alliance gather in Japan on Tuesday, they will be looking to secure a partnership that was built by former Nissan boss Carlos Ghosn and then possibly imperiled by his ouster.
A Tokyo court on Monday rejected Ghosn’s request to attend Nissan’s board meeting, denying him a seat at the table even as the carmaker looks set to bolster the alliance with Renault and Mitsubishi Motors that Ghosn drove for over two decades.
Released on $9 million bail last week after spending more than 100 days in a Tokyo detention center, Ghosn faces charges of under-reporting his salary at Nissan by about $82 million over nearly a decade – charges he has called “meritless”.
In the wake of the scandal, Renault has started its own review of payments to Ghosn. French prosecutors have opened a preliminary inquiry into how he financed his 2016 wedding, French media reported on Monday.
His dramatic arrest in November and the long detention that followed exposed tensions between Nissan Motor Co and its top shareholder, France’s Renault SA, causing concern about the future of the alliance – the world’s largest maker of automobiles, excluding heavy trucks.
Some at Nissan had been unhappy with Ghosn’s push for a deeper tie-up, which was seen as possibly including a full merger. Smaller Renault owns 43 percent of Nissan after rescuing the Japanese company from near-bankruptcy in 1999. Nissan holds a 15 percent, non-voting stake in Renault, whose top shareholder is the French government.
While Ghosn himself has cast the charges against him as a boardroom coup, there are clear signs emerging that the alliance looks set to continue.
Renault on Monday confirmed it was in talks with Nissan and Mitsubishi Motors Corp about setting up a new alliance body to improve their collaboration.
“The proposed arrangement will have no impact on the existence of the (alliance agreement) and the cross-shareholding structure, which will both remain in place,” Renault said.
Nissan, Renault and Mitsubishi plan to set up a joint board meeting structure under which Renault’s new chairman, Jean-Dominique Senard, is likely to take the chair, people with direct knowledge of the matter have told Reuters.
That would replace Dutch-based companies currently linking Nissan and Renault and, separately, Nissan and Mitsubishi Motors, the people said.
The heads of the partners will hold a news briefing at Nissan’s Yokohama headquarters on Tuesday, Nissan said. That is scheduled 4:30 p.m. (0730 GMT).
(Reporting by David Dolan; Editing by Stephen Coates)
Source: OANN
FILE PHOTO: A person walks past cars at a parking lot in Sao Bernardo do Campo, Brazil September 6, 2017. REUTERS/Paulo Whitaker
March 11, 2019
SAO PAULO (Reuters) – Automobile production in Brazil rose 29.9 percent in February from January, while sales slipped 0.6 percent, the national automakers’ association said on Monday.
Automakers in Brazil produced around 257,200 new cars and trucks last month, while sales totaled about 198,600 vehicles, according to industry group Anfavea. Compared with a year ago, auto output rose 20.5 percent and sales grew by 26.6 percent.
Brazil was one of the world’s five biggest auto markets until a recent downturn and remains a major base of operations for Fiat Chrysler Automobiles NV, Volkswagen AG, General Motors Co and Ford Motor Co.
(Reporting by Marcelo Rochabrun)
Source: OANN
FILE PHOTO: People walk with shopping bags at Roosevelt Field mall in Garden City, New York, U.S., December 7, 2018. REUTERS/Shannon Stapleton
March 11, 2019
WASHINGTON, March 11 – U.S. retail sales unexpectedly rose in January, lifted by an increase in purchases of building materials and discretionary spending, but receipts in December were much weaker than initially thought.
The Commerce Department said on Monday retail sales rose 0.2 percent. Data for December was revised down to show retail sales dropping 1.6 percent instead of tumbling 1.2 percent as previously reported. The drop in December was the biggest since September 2009 when the economy was emerging from recession.
Economists polled by Reuters had forecast retail sales to be unchanged in January. Retail sales in January increased 2.3 percent from a year ago.
The January retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25. February’s retail sales report, which was scheduled for publication on Thursday, will be released on April 1.
Excluding automobiles, gasoline, building materials and food services, retail sales rebounded 1.1 percent in January after a downwardly revised 2.3 percent plunge in December. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
They were previously reported to have decreased 1.7 percent in December. The downward revision to December core retail sales could have an impact on the government’s fourth-quarter gross domestic product estimate.
The government reported last month that the economy grew at a 2.6 percent annualized rate in the last three months of 2018.
However, December reports on the trade deficit and construction spending have led economists to believe fourth-quarter GDP growth estimate would be revised lower when the government publishes its revisions later this month.
The rebound in January core retail sales will probably do little to change expectations of a significant slowdown in economic activity in the first quarter. Growth estimates for the first quarter are below a 1.5 percent pace.
In January, online and mail-order retail sales increased 2.6 percent, the biggest gain since December 2017. Receipts at auto dealerships tumbled 2.4 percent in January, the biggest drop since January 2014, after gaining 0.3 percent in the prior month. Sales at building material stores increased 3.3 percent, the most since September 2017.
Receipts at service stations fell 2.0 percent reflecting cheaper gasoline prices. There were declines in sales at clothing and furniture stores.
Sales at restaurants and bars rose 0.7 percent and spending at hobby, musical instrument and book stores increased 4.8 percent, the largest advance since January 2013.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
Source: OANN
FILE PHOTO: Fiat Chrysler Automobiles (FCA) headquarters are seen in Turin, Italy, July 21, 2018. REUTERS/Massimo Pinca
February 26, 2019
(Reuters) – Fiat Chrysler Automobiles NV said on Tuesday it will cut nearly 1,400 jobs at an Illinois assembly plant where it builds the Jeep Cherokee sport utility vehicle.
The Italian-American automaker will cut one of three shifts at the Belvidere Assembly plant starting May 6, impacting 1,371 jobs, in order to “better align production with global demand,” a spokeswoman said.
Earlier on Tuesday, Fiat Chrysler announced it was investing $4.5 billion in five plants and creating 6,500 jobs in Michigan, including building a new assembly plant in Detroit.
(Reporting by David Shepardson; Editing by Bernadette Baum)
Source: OANN
FILE PHOTO: A Fiat Chrysler Automobiles (FCA) sign is seen at the U.S. headquarters in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook/File Photo
February 26, 2019
By Nick Carey
DETROIT (Reuters) – Fiat Chrysler Automobiles NV said on Tuesday it will invest $4.5 billion in five plants to build new models of Jeeps, hoping to bolster the brand so it can compete more effectively in the lucrative market for large SUVs currently dominated by rivals General Motors Co and Ford Motor Co.
The plants will also create 6,500 jobs in Michigan, Fiat Chrysler said in an announcement, around three months after GM announced it would not allocate new products to five plants in North America that mostly produce less-popular sedan models. GM workers and political officials including U.S. President Donald Trump have blasted GM for the decision which is likely to close those plants.
FCA’s plans include turning an engine plant in Detroit into an assembly plant. The company has also reversed a decision to shift production of heavy-duty trucks from Mexico to Michigan in 2020, freeing up the Michigan facility to produce Jeep models.
The automaker said the plans included investments to enable three Michigan plants to produce hybrid and fully-electric Jeep models.
FCA plans to start construction on the new Detroit facility in the third quarter of 2019 and to start production of a new three-row SUV by the end of 2020, followed by a revamped version of the Grand Cherokee in the first half of 2021.
The automaker will also start production of its Wagoneer model and the Grand Wagoneer, a new three-row luxury SUV, at a plant in Warren in the first half of 2021. Early last year, FCA had said it would move heavy-duty truck production to that plant, but it will now remain in the company’s Saltillo, Mexico, plant.
(Reporting By Nick Carey)
Source: OANN
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