Happy Monday! General Motors has a nice little tailwind going into 2024 thanks to a nice chunk of profits, but it also facing the reality that its Cruise robotaxi division isn’t going to be a profit center for a while, with GM President Mark Reuss admitting it’ll take many years to earn back trust after a pretty disastrous response to a tragedy.
It’s been fun watching the merger rumors between Renault and Stellantis, but it ain’t happening according to Stellantis Chairman John Elkann. Your local neighborhood The Morning Dump will be looking into this because the more someone denies something the more we’re tempted to believe it.
News out of China is both interesting, with BMW and Mercedes getting approval for a joint venture in the country, and depressing, with a new report out about forced labor being used in automotive production there.
GM’s Reuss Hopes Cruise Will Regain Trust In ‘Four To Five’ Years
The best way to measure the magnitude of your screwup is to record the duration between public awareness of the screwup and public ignorance of it. Remember how mad everyone was about the GM Ignition Switch Recall? Nope, me either.
GM’s Cruise done messed up and they done messed up something fierce. One of the company’s robotaxis was involved in a pedestrian-dragging incident and the company, essentially, tried to hide that fact. This led to its self-driving license being revoked, which then led to the company shutting down its taxi service, which then led to much of its executive team either leaving or getting fired.
A report commissioned by GM has since been released and it showed that the company was terrified of the media and didn’t initially consider the issue important enough to fix, possibly out of a concern that it would bring more attention to said issue. This is not-how-to-do-things 101.
GM’s President Mark Reuss was at last week’s big J.D. Power Auto Summit and The Detroit Free Press has seen the video of his speech, wherein he says some important things. From that report:
“We had some problems with transparency and the way we dealt with a very serious situation,” Reuss said Thursday at the J.D. Power Auto Summit.
Hard agree. [Ed Note: That is your name, after all. -DT].
“In the next four to five years, you’ll see, hopefully, we regain that trust. We continue on the technical progress for that,” Reuss said. “I’d say in the next one to two years, we return back to the roads with great products and great delivery for both the taxi piece of it, but also delivering goods to people that can’t, don’t have mobility perhaps or for companies that need an autonomous delivery system. So we’ll do that. And I think we’re capable of doing it.”
So that’s 1-2 years to get the cabs rolling again and another 2-3 years after that to get people to trust the service? That’s a rough timeline and probably a little pessimistic given the American people get mad like cannons, with one big burst and then a long silence.
I personally like Reuss. He’s a car person and a gearhead and likes to drive fast. I think as a board member at both GM and Cruise he, along with other board members, may not have been involved in the bad decision-making of individuals at Cruise in this particular incident but he does bear some responsibility for appointing and overseeing those executives.
The use of the 1st person plural here is encouraging. It’s not they need to regain trust, it’s we need to regain trust.
Elkann: We Are Not Merging With Anyone
There’s been a bit of speculation as of late that someone might try to buy Renault given the company’s current issues, specifically that the French automaker had to simultaneously abandon its profitable Russian operations and start earnestly unwinding its Nissan marriage.
There’s been a sense that maybe the most obvious partner for Renault is to link it to its longtime rival Peugeot, which is now part of Stellantis. Stellantis Chairman John Elkann, who also represents the Agnelli family holding company that owns the biggest chunk of Stellantis, says that ain’t happening.
Specifically, according to Reuters, he said “There is no plan under consideration regarding merger operations with other manufacturers.”
Elkann (the serious one) is one of three grandchildren of the legendary Italian industrialist Gianni Agnelli, along with Lapo (the fun one) and Ginerva (the artsy one).
So where is this coming from? Also from that Reuters report:
Italian daily Il Messaggero had said on Sunday that the French government, which is Renault’s largest shareholder and also has a stake in Stellantis, was studying plans for a merger between the two groups.
A spokeswoman for Renault said on Monday the group did not comment on rumours. France’s Finance Ministry had declined to comment on Sunday.
Hmm… if it’s cheap enough I think Stellantis would do it.
BMW Brilliance-MercedesTie Up Approved In China
Here’s a fun question: have Mercedes and BMW ever worked together?
Mercedes once worked with Porsche, which was aligned with Volkswagen, but that was before Porsche was fully ingested into Volkswagen. But BMW? I can’t think of a single time this happened, though I’m excited to be wrong.
Well, I can’t think of a single time this happened until now.
BMW Brilliance is the Bavarian automaker’s tie-up with Shenyang-based Brilliance. Unlike a lot of European-Chinese JVs, BMW owns most of the company (75%) and builds primarily the same cars it builds in other markets.
Last year, BMW announced it was planning to team up with Mercedes-Benz China to create a joint venture built around creating a high-power charging network:
The joint venture aims to establish a network of at least 1,000 high-power charging stations with around 7,000 high-power charging piles by the end of 2026, adopting state-of-the-art charging technologies. The first stations are expected to open for business in 2024 in top NEV regions, with further stations to be installed nationwide.
According to Reuters, this deal has now been approved. What’s next? A Mercedes-badged 3-series?
Forced Labor Is Possibly Being Used In Creating Aluminum For Cars
It’s no secret that forced or coerced labor has been involved in the manufacturing of Chinese products, and a new report from global nonprofit Human Rights Watch indicates that this includes the aluminum used in automobiles, although China is a hard place to study if you care about human rights and tracing the source of materials like aluminum is difficult. From the report:
The link between Xinjiang, the aluminum industry, and forced labor is Chinese government-backed labor transfer programs, which coerce Uyghurs and members of other Turkic Muslim communities into jobs in Xinjiang and other regions.
If you aren’t aware of what’s happening in these regions of China, the BBC has a good explainer on the religious persecution that’s been sanctioned or encouraged by the Chinese government.
The report specifically looked at VW through its SAIC venture, BYD, Toyota, and GM. Most of those companies didn’t provide much in terms of details, mostly stating that it was difficult to track but that the companies are variously committed to not using coerced labor.
Curiously, Tesla was the most forthright here, according to the report:
Tesla, which does not operate in China through a joint venture but builds cars for China’s domestic market and for export at its Shanghai Gigafactory, provided the most detailed information to Human Rights Watch about its aluminum sourcing. The company stated that it had intensified supply chain mapping for aluminum, “driven in part by global trade regulations to combat forced labor.” Tesla said that it had, “in several cases”, mapped its supply chain back to the mining level and had not found evidence of forced labor. The company did not, however, specify how much of the aluminum in its cars remains of unknown origin and so could be linked to Xinjiang.
You can read the report and draw your own conclusions, but it’s clear to me that the opaqueness around material sourcing benefits everyone except those being pressed into labor.
What I’m Listening To While I Write TMD
Here’s some kickass rock music courtesy of Bully and her most recent album.
The Big Question
What’s your favorite weird automotive tie-up between two theoretically competitive companies?
Choosing that picture of Mark and a C7 from the Belle Isle Grand Prix and the sentence immediately following it is PURE. EFFING. GOLD. I think it was a blue Z06 though if my memory serves…
Did BMW and Merc do a bit of a tie up on some emissions cheating by chance?
We don’t need no more stinken car brands
Favorite tie up; GM/ Ford co-development of a 10 speed planetary auto.
Hey, I have good news for GM, I trust their Cruise robotaxis just as much today as I did before the reports of the accident.
I doubt I will have any trust for AVs as long as they are based on what amounts to a black box that even proponents admit is too complex for humans to understand (although they usually say that as if it’s a good thing).
Sounds awfully similar to trusting a random 16 year old to drive it if we phrase it correctly.
Human made (man not quite accurate), too complex to understand logical controller (brain), with some instruction and training.
I think my level of trust for some autonomous systems is approaching that of a 15 year old driving for the first time. I will trust, but watch like a hawk to correct as necessary. (and I know for a fact they will get it wrong)
The Big Question: It was always amazing to me that Toyota and GM were building cars together at the NUMMI plant. Or when competing manufacturers share a model like the Nissan Quest/Mercury Villager. At least when Mazda was selling a rebadged Ranger it was because Ford had a stake in Mazda.
Normal people will forget GM’s robotaxi’s woes, just change the name and wait a bit. There is so much news and information going out there that without the autopian
I wouldn’t have even heard of the incident.
How much US aluminum comes from China? Are there still those tariffs on it?
I honestly think most people don’t even know what Cruise is even now, unless you live in San Francisco or follow the auto industry quite closely, the most the average person might have heard is a news headline of a GM self driving car running over a pedestrian, but most people would be hard-pressed to recall the name of the GM subsidiary responsible or any more details beyond that.
I believe that Mr. Reuss or whoever asked him to provide that statement is being overly optimistic. I don’t speak for the outraged public necessarily, but I think it will take 4-5 decades to rebuild trust, not 4-5 years. This is reminiscent of GM’s decision to kill the EV1, which killed about 20 years or so’s worth of progress on EVs.
GM’s motto? If it’s worth doing, it’s worth doing wrong a couple of times? Where’s Cave Johnson when you need him?
Flush:
The good answer: Diamond Star Motors. Mitsubishis! Except they’re Chryslers.
The bad answer: …do you know how unnaturally stoked I get when I see a Routan on the road? The Chrysler-VW minivan was a questionable idea at best, but they’re just so RARE. As a fellow rare VW owner, I just want to teach every Routan owner I meet the secret Weird VW Owners Club handshake of suffering and pain.
Ford and GM teaming up to design automatic transmissions for their most important vehicles always seemed a bit strange to me, but the product itself is apparently good.
Bless his heart.
4 to 5 years to regain trust in a new technology seems… not ideal lol
But can the Robotaxi survive without satisfying its thirst for human blood? Will Robotaxi not bring drought and disease to our fields without proper sacrifice? These GM execs are risking our damnation to hell, and we’re going to have to drive ourselves!
“Xinjiang is a mostly desert region and produces about a fifth of the world’s cotton. Human rights groups have voiced concerns that much of that cotton export is picked by forced labour.”
Yeah, about that….
Seriously though why is anybody picking cotton by hand anymore?
Because it’s cheaper, obviously.
The Chinese shareholder doesn’t care how the money is made!
I dunno. Even if the labor is free you still have to deal with the needs of a bunch of people and dealing with annoying, do gooder forigeners.
Is such forced labor really cheaper than meeting the needs of a single driver and a mechanized cotton picker, especially when that one machine can pick, comb and bale cotton so much faster and better?
Are you not familiar with how Communism works?
today I learned that the American South prior to the civil war was Communist
What, you thought the Civil war was about slavery or “states rights”?
Today I learned cotton picking by hand is indeed still a thing in the US:
https://www.glassdoor.com/Salaries/cotton-picker-salary-SRCH_KO0,13.htm
I also learned some people make racist shit up on Glassdoor.com:
https://www.glassdoor.com/Salary/Nigga-com-Cotton-Picker-Salaries-EI_IE6777776.0,9_KO10,23.htm
https://www.glassdoor.com/Salary/Nigga-com-Swagger-Checker-Salaries-E6777776_D_KO10,25.htm
China is still in the industrial revolution situation where people are much cheaper than technology, so might as well just have armies and armies of low paid or unpaid workers, if one gets uppity and quits, replace him, if one dies, replace him, there’s an endless supply of more workers waiting to take over.
Unskilled Uyghur laborers in Xinjiang earn around $425/month. Pay is higher in the rest of the country, theoretically the national average pay for agricultural laborers is $2.67/hour
“China is still in the industrial revolution situation where people are much cheaper than technology”
That is true here as well. See below.
“might as well just have armies and armies of low paid or unpaid workers, if one gets uppity and quits, replace him, if one dies, replace him, there’s an endless supply of more workers waiting to take over”
Hmm, you just described much of the American workplace too.
“Unskilled Uyghur laborers in Xinjiang earn around $425/month. Pay is higher in the rest of the country, theoretically the national average pay for agricultural laborers is $2.67/hour”
It could be worse. They could be here:
https://www.theguardian.com/us-news/2021/dec/25/us-farms-made-200m-human-smuggling-labor-trafficking-operation
https://www.aclu.org/news/human-rights/captive-labor-exploitation-of-incarcerated-workers
Well, if we’re drawing moral equivalencies, I expect federal agents to raid the ACLU headquarters, throw all their leaders in a reeducation camp, and block the Guardian’s website from being accessed from US IP addresses, and you and I will both lose our ability to travel outside our home cities until we sufficiently recoup our social credit scores
Oh there are folks here who would love nothing more than that to happen JUST to “own those damn libs”.
Basically. I have been to China a few times. I opened up a bit to the point of where I did not want to go any further due to it potentially not being good for me.
We had a CEO visit a plant there. One of the Chinese salesman didn’t like him and called one of his “friends”. He disappeared at the airport for 3 days.
They point to a city block and tell people they are responsible for keeping it clean. And that is their job.
As said above, they don’t care about people. And, those articles you linked to are also horrible. I would not argue that it’s not happening here. But, I promise you, any person in that circumstance would rather it be in the US than in China.
I don’t doubt those who are in those circumstances in the US would rather do so in the US than China. That said thanks to the 13th amendment we put more people in those circumstances per capita than they do.
This just in. BMW and Mercedes Benz announce two new joint ventures. One will be a new styling studio and the other will be a quality control venture. Both will operate independently of the joint owners and will be spun off and IPO in the next 12 months. Sources say this is a strategic move to offload and monetize under performing assets.
I am skeptical of Tesla’s claimed level of supply chain transparency. Partially because it’s Tesla. Partially because I’ve spent enough time working on supply chain transparency. It’s the OEM, asking the Tier 1, who’s asking the Tier 2, who might bother asking the Tier 3, etc. etc.
The only way to do better, would for Tesla itself to go down the supply chain. Are they just seeking written certification of compliance, or actually performing (expensive and time-consuming) on-site audits? Which, in either case … why would anyone in the supply chain beyond Tesla’s immediate suppliers provide that transparency? They don’t have a relationship with Tesla. I just don’t buy it.
In the linked article Tesla was the only one who actually answered the question. Toyota and BYD didn’t respond, GM and VW both played the “50-50 joint venture, and we don’t have control over the supply chain” card, and only Tesla actually said anything about their sourcing. And they did say they “mapped” their supply chain down to the mining- how rigorous that was is certainly another question, but apparently they actually try, unlike any of the other companies mentioned.
Dunk on Tesla for their many actual failings, but this one ain’t it chief.
I’m not dunking on them. All the companies are putting forth efforts to map their supply chains because they are legally required to in the US, EU, and the rest of the developed world. My point is that there is no way Tesla is having more success at this than GM or Toyota (bigger players with much more sway over their supply base). Tesla (per usual) is “inflating” the truth.
Your claims are directly contradicted by the linked article.
I would not say it provides definite proof that Tesla has better visibility of their Chinese supply chain, but it does provide some more hints about why that may be the case- GM and Toyota operate 50-50 joint ventures in China and are allegedly not responsible for the supply chain in-country. Tesla does not operate as a joint venture in China (which is unique among all foreign automakers there), they are the same corporate entity as their North American operations. That is a very significant difference.
“Remember how mad everyone was about the GM Ignition Switch Recall? ” Yes. It was literally the first thing that came to mind when I read “it’ll take many years to earn back trust after a pretty disastrous response to a tragedy.” Maybe it’s a Detroit thing but we remember this kind of stuff (unless you’re an auto exec, then you’re clueless).
Oh, I still identify heavy keychains as “Cavalier hazards” and I’ve never lived up that-a-way. I am a car dork who pays more attention than most to that, though.
I recently un-GM-ignition-hazard-ed my keychain and gosh, it feels good, man. Clean out those unused keys.
Well, to get to the level of trust they had before the incident, which for me was zero, I’d say they can get that back pretty quick.
That seems ambitious. I’m not sure the American car buying public ever got over the damage that GM did to the reputation of diesel cars back in the early ’80s.
This being the first I have heard of GM hurting diesel I guess it will take a few decades. Or are you referring to the trash Oldsmobile diesel engines?
VW diesel, now that I remember.
Yes, the Olds 350 diesels were problematic and soured a lot of people on diesels in general.
And by “we regain that trust” I assume he means “people will forget this happened”.
Hard to forget being stuck behind a stationary Cruise car or having empty zombie taxis roaming your neighborhood for seemingly no reason—or worse, for those who weren’t only mildly inconvenienced or annoyed that the damn cars won’t stop circling her lawn.
Typical GM. Unleash a shit product on the unsuspecting public. Spend years and billions to perfect it. Kill it, because they did nothing to change its reputation.
Surprised it took this long to get a “hard agree” joke, in retrospect.
Matt Hardagree got a perfect dumb chuckle out of me. Well played, DT, dad/10
Yeah, that legit made me snort-laugh. Well done DT.
And in 22.3 years, we can laugh at the Cruise Robotaxi incidents.