US car dealers are probably seeing the end of the profits they have made during the pandemic, a Justice Department monitor said the UAW is fighting to root out corruption and that the Twitter-Elon Musk trial is being fast-tracked. All that and more in Morning shift for Wednesday, July 20, 2022.
First gear: The party may soon be over for auto dealers
U.S. car dealership profit growth is losing momentum in the second quarter. That’s despite record-high car prices. It is blamed on the auto industry’s sluggish production rise as well as inflation. It’s a difficult combination. Oh, and maybe a recession too. Incredible. By Reuters:
According to analytics firm Wards Intelligence, the industry is grappling with chip shortages and supply chain disruptions that have caused inventories to drop by 25% in early June, which is a third of pre-pandemic levels. .
Investors will be watching comments from industry executives for warning signs of consumer behavior in a hyperinflationary environment.
AutoNation Inc, the largest US retailer, is expected to report its slowest quarterly profit growth since 2020 when it reports results on Thursday.
While car prices are at record highs right now, it looks like inflation is starting to eat into sales.
New-vehicle retail sales in June fell 18.2%, a report from automotive industry consultants JD Power and LMC Automotive showed.
However, JP Morgan analysts said that demand for high-end cars remains strong and will support declining sales of low- and mid-range cars.
G/O Media may receive a commission
2nd gear: UAW struggles to eliminate corruption
A new report from the Court-Designated Watchdog for Auto Workers has revealed a months-long effort by the UAW to obstruct and interfere with their investigation. It accused union leaders of withholding evidence and excluding the supervisory office from key meetings of the International Executive Committee.
In March, the Justice Department was called to intervene over a possible violation of the union consent decree. Are from Automotive News:
While the watchdog’s office says it has seen some improvements in transparency since March, the report shows a harsh stance on a struggling union that has been slow to respond to corruption. systematic corruption to its highest level. It could also be seen as a black eye for incumbent leaders, including UAW President Ray Curry, who will meet delegates next week in a constitutional conference where they are expected to seeking nominations for new terms.
A spokesman for the UAW said the union remained committed to rebuilding trust and creating reforms within the organization.
The report revealed for the first time the name of another union official involved in an ongoing corruption investigation. According to the supervisory office, it recently signed an agreement with former Assistant Area 5 Superintendent Danny Trull not to contest allegations of his participation in an embezzlement plot.
…
In addition to the 19 open investigations, the oversight office said it is working with the UAW on 38 recommended reforms. It said the union had cooperated in the negotiations, noting that it had hired a new internal audit service provider, implemented new financial controls around supplier relationships. provide and provide additional resources to upgrade IT systems.
The report also revealed that the UAW used union resources to purchase approximately 1,500 personalized backpacks with the name and title of an IEB member currently running for IEB office, which it said had may have violated the Labor Management Reporting & Disclosure Act of 1959. The supervisory office also learned of “significant expenditures at conferences made with inadequate oversight or policy control.” enough”.
UAW will never seem to get together.
3rd Gear: Turbo Time for the Twitter-Musk . Experiment
The trial between Twitter and Elon Musk in favor of his $44 billion takeover is now underway in October. A Delaware judge said the social media company deserves a speedy resolution. situation.
It is a a blow to Musk, who pushed the trial to February in an attempt to delay everything and ostensibly conduct one investigate his claims Twitter misrepresents the number of bots account. Are from Automotive News:
The company, which requested a test in September, said the problem was a distraction and that the terms of the agreement required Musk to pay.
Twitter has argued that delaying the trial to next year could threaten the financing of the deal.
Twitter wants the judge to order Musk to close the deal at the agreed-upon price: $54.20 per share. A corporate lawyer said Musk is falter because he’s looking to “suggest an exit to a no-deal.”
Just a hilarious little note: Musk has faced a separate five-day test before the same judge will also begin at the end of October. That’s more than his $56 billion salary package from Tesla. Looks like Elon will be spending time in Delaware this spooky season.
4th gear: Volvo Takes A Dip
Volvo is blaming supply problems and chip shortages for a drop in retail sales this year. According to the Swedish company, sales jumped 8% in June to 60,000 vehicles. This is the highest monthly output so far in 2022.
Even so, the company expects deliveries to be less than or equal to 2021. However, the wholesale volume will increase compared to last year. Are from Automotive News:
“However, given the time difference between manufacturing and retail distribution, those improvements are not expected to increase retail sales during the calendar year,” the company said. .
Volvo sold 698,693 vehicles last year and six-month production fell 23% to 291,300.
Volvo’s quarterly operating profit rose to 10.8 billion Swedish crowns ($1.06 billion) from 4.8 billion a year before the accounting impact from the listing of its subsidiary, the home Polestar electric vehicle production, has increased. That leads to a [operating] profit margin is 15.1%, but without listing, Volvo’s profit margin is 6.5%.
It seems difficult for everyone.
5th gear: Scout becomes CEO
Scott Keogh, CEO of Volkswagen Group USA is gear shift and became the first CEO of its newest electric car brand: Scout.
Pablo Di Si, who is currently head of VW’s South America region, will replace Keogh at VW North America. He has been the CEO of VW North America since November 2018, after a stint as the president of Audi of America. Are from Automotive News:
Keogh has made some private suggestions that he might be a good fit to spearhead the Scout revival since it was announced by the German automaker in May. Keogh on Tuedsay said Scout is now “one man’s company,” specifically, and that starting such a startup is what appeals to him.
…
Keogh did not question Scout’s future activities, but said the brand will introduce its first concepts in 2023 and will capitalize on the savings from being a member. part of the VW Group. He did not discuss how Scout would eventually be distributed in the United States, which is already a bones of contention with VW . dealers since the May announcement.
“That’s definitely what I want to do. And so obvious, what do you have to do? You have to bring this brand to life. You have to get the team on board. And unfortunately I have to bring a product to market that people love,” said Keogh.
That’s wonderful, sir. 2023 is less than a year away.
Reverse: Neil Armstrong Gets Out of His Flying Car
Neutral: Racing is cool, actually
I was never really into motorsport. In fact, I’ve never even watched a full race on TV, let alone live. That changed over the weekend when I watched the New York City ePrix in person. I understand now…a lot. See you at another racetrack reality soon, because now it’s time to go through some of the engine noise.
