The vast interconnectedness of the world was always an inevitability, which makes debates about whether it’s a good or a bad thing both important and just a little tiresome. Still, if the last two decades were concerned with the possibilities of global expansion, this decade will be defined by the limitations.
In today’s Morning Dump, we get a great example of this from Italy and tire-maker Pirelli. This is a famous brand known for its high-performance tires and revealing calendars. The company has a technologically advanced tire that it’s anxious to sell in the United States, but it can’t because that tire is now caught in a global power struggle between the Italian government, American lawmakers, and Chinese shareholders.
GM is building more vehicles in the United States, but is that enough to deal with tariffs? Will price increases have to follow? Akio Toyoda’s leadership of his family’s company has been in dispute for the last few years after a wave of controversies. Do most shareholders want to replace him? Nope. Especially not now.
Tesla is also sticking with Elon Musk, who is putting a lot of his eggs in his Austin robotaxi launch. Will it be a real robotaxi service or just a small demo? That’s another big question.
Pirelli And The Golden Power Law
The idea of a global enterprise goes back as far as the Dutch East India Company in the early 1600s. Once mankind had the ability to take stuff easily from one place to the next, opportunities for trade and arbitrage on a large, cross-continental scale emerged (no disrespect to the Silk Road).
This raises questions of who gets to own what, which today we lump under the concept of Foreign Direct Investment. In particular, China has decided to play in a lot of industries that various countries think are core to their economic and physical security. How does this impact Pirelli?
Chinese company Sinochem, which is a state-owned and controlled enterprise, put billions into Italy’s Pirelli in order to gain a majority share. In doing so, it had to comply with Italy’s so-called Golden Power Law, which gives the Italian government control over approving/vetoing sales to non-Italian investors. This law also gives the government the power to place restrictions on owners. In the case of Sinochem, it wasn’t allowed to get involved in the day-to-day operations or change leadership, and has had its overall control reduced over time.
For obvious reasons, the existence of a large shareholder that can’t influence policy running up against a small minority investor (Camfin) that can has inevitably created friction. It’s come to a head lately because of one specific tire, the “Cyber Tire” that uses a Bluetooth connection to communicate more details on the performance of the tire to a car’s ECU. Pirelli thinks this is the future and wants to sell that technology in the United States, which is one of its most important markets.
Why can’t it? The United States banned Chinese firms from deploying any systems on cars that might allow the Chinese government to track where people are going. As Manager Magazin explains, this has caused quite a headache for Pirelli:
Officially, the law serves to protect national security: The government is concerned that sensitive data could be read from the affected vehicles. It is set to take effect starting with the 2027 model year, but also affects technologies being developed today, according to Casaluci. Pirelli is considered a Chinese company because of Sinochem, and the “Cyber Tire” is therefore subject to this embargo.
In order to fix this, the Pirelli board has been pleading with both the Italian government and Sinochem for a change. Specifically, Pirelli wants Sinochem to cut its stake to below 25% so it doesn’t have to deal with this law (it currently has a 37% stake). Sinochem doesn’t seem interested in this and, as of a couple of hours ago, isn’t going away quietly, as Bloomberg reports:
Pirelli & C. SpA’s biggest shareholder, Sinochem International Corp., escalated a clash among the Italian tiremaker’s owners by voting against the approval of last year’s financial results.
The Chinese group was the only shareholder that didn’t approve the 2024 report at a shareholder meeting in Milan on Thursday, according to a press release. The annual report was approved with 57% of the votes.
Clearly, Pirelli’s board can act without Sinochem’s support and still get a majority, but it’s not an ideal situation. The Italian government has pushed its decision on Sinochem’s ownership while it gives the issue “careful assessment.” I suspect one of the challenges is that the Italian government doesn’t want to make the Chinese government too upset while it still enjoys trade with that country, and its automakers require things like Rare Earth minerals and magnets.
GM Is Exercising Price Discipline
I thought it was interesting that General Motors didn’t join Ford and Stellantis in employee pricing or other big incentives ahead of tariff impacts. Now we’ve got a better explanation from CFO Paul Jacobson via the Detroit Free Press:
General Motors did not join fellow automakers that discounted certain models or advertised tariff-free pricing deals. This choice will aid the company in the long run, Jacobson said, by helping the vehicles GM sells to retain their value in the aftermarket and preserve vehicle profitability.
“I wouldn’t say that we’ve been focused on pricing; we’ve been focused on discipline,” Jacobson said. “Pricing is an outcome of that.”
GM can mitigate further losses, Jacobson added, through a disciplined approach to vehicle inventory. Rather than respond to the cyclical nature of the automotive sector, where car-buying tends to heat up and cool down at various times during the year, he said GM should avoid self-imposed processes that overreact to known changes.
Quarterly sales and financials will be available next month, and I’ll be better able to judge who played their hand better.
Investors Seem Fine With Akio Toyoda
There was some concern earlier this week that Toyota Chairman and former CEO Akio Toyoda might face a grilling at the annual shareholder meeting over the company’s purchase of Toyota Industries, his statements about EVs, or the ongoing fallout of past scandals. That didn’t happen, though the exact numbers on his reapproval are not yet available (the guess is he’ll do better than the low of 72% last year).
Here’s how Bloomberg describes the scene:
Partway through the meeting, Toyoda reminisced about his longstanding personal friendship with a recently retired sumo wrestler. Later, one shareholder asked if he could trouble Toyoda for a picture together, which garnered broad laughter from other attendants.
Questions about the privatization of Toyota Industries and Toyoda’s role in it never came up.
Well, that’s convenient.
What Is The Cyber Taxi Rollout Actually Going To Be?
Tesla CEO Elon Musk is excited about robotaxis and, probably, excited to not talk about his recent tweeting habits. This is a big deal for the company, even if the robotaxis won’t be the Cybercab we were shown and instead just Model Ys.
It was already announced by Musk that the taxis would be geofenced, but the actual limitations of this system are starting to become even clearer. An analysis from Bloomberg shows that the launch is more of a “souped-up demo,” and former Waymo boss John Krafcik told Automotive News he doesn’t think the company is ready:
“This is my nightmare scenario,” Krafcik said. “Cruise crashes nearly dragged down the entire U.S. AV industry. And right now, the public doesn’t always differentiate between AV operators.”
This is a big gamble. If anyone is in Austin and wants to try out the service for us, hit me up.
What I’m Listening To While Writing TMD
British artist Jamie xx (of The xx) had a low-key hit with his song “Girl.” There are numerous samples in here, but today I want to focus on one. It’s from “Brian Wilson Presents Smile.” Can you hear it? RIP Brian Wilson.
The Big Question
Who is going to have a better 2nd quarter? GM, Stellantis, or Ford?
Top photo: Pirelli
‘Telsa CEO Elon Musk is excited about robot taxis and, probably, excited to not talk about his recent tweeting habits.”
I feel like this is something I have heard before. Correct me if I am wrong.
There are multiple theories in data science regarding junk data. The general big one is the more bad data in your data set, the more processing power and time you will be wasting to avoid it polluting your outcomes.
I say we fully support the PRC monitoring our tire pressure and wear. Keep ’em busy with something like that.
I have less than zero interest in “connected” tires. Ridiculous. I’m not even much of a fan of sensor-equipped TPMS, wheel-speed measuring TPMS is good enough, effectively free, and much less hassle.
Yep, the tire rotation speed (using existing wheel speed sensors) is one of the few things where VW/Audi had the easy solution instead of the much more complicated one of TPMS sensors — at least for a little while.
Wheels speed sensing works great in my Mazda.
Although it does highlight the scam when tire shops automatically tack on the “new TPMS sensor installation and calibration (x4)” by default to every tire change.
I really wonder how many people pay this not knowing that their car might not even have them?
I’ve called out NTB on this a time or two. My local guy is honest.
The government actually banned that system for a while, then the automakers demonstrated that it could be accurate enough and they started allowing it again. This is why my generation of BMW can do either. They came with sensor-based in the US, but wheel-speed based everywhere else, and you can code back and forth. But the luxo brands like the sensors because they can add the WOW factor of being able to display individual pressures and temperatures on the big screen.
Have they gone back to using sensors? My ’17 GTI just used wheel-speed.
I guess if you have a track-weapon, the sensors that can also show temp are nice, but for a daily driver, no thanks, wheel-speed is perfectly fine to tell me there is a developing problem.
I’m so not interested in connected tires that I still check the damn things with a manual gauge, inspect the tread and look for stuff stuck in them before they go flat. (actually found a nail stuck in a tire before it went flat on one of my periodic checks)
But I’m just a luddite that doeSn’T unDerStanD TecHnoloGy.
Ditto – my Mercedes will tell me what the tire pressures are, and I still check them with a gauge.
I understand techology, I’m an IT consultant by trade. I just don’t want to deal with any more of it in my home life than absolutely necessary, and only when it makes my life notably better. The more tech in a car, the more I find it annoys the ever-loving-piss out of me. I want the ability to make a hands-free phone call, and to play music off an SD card or thumbdrive, and that is about it.
I was in IT for 30 years before I retired, I too am actually pretty well versed in how things work since my apple \\e days.
Tech is great when it works, but I don’t want to have to debug some POS sensors that are designed to fail and/or not be serviceable outside of a dealership for things that absolutely do not need to be ‘sensed’.
110% spot on. And too often today, the tech is half-baked and *doesn’t* work properly. I drive a crapload of cars every year with my work travel, and most of it is awful.
Is the Bluetooth sensor in the tire itself? or is it something mounted to the wheel like a TPMS sensor? If in the tire, what info could it be sending, and to where? “sir, your tires are too hot, you need to slow down? You took that corner too fast and scrubbed 100 miles off the tires?” that sort of thing?
Yeah, I see the feature as TPMS on steroids, basicly Pirelli trying to cash in ont he market corned by, I believe; Continental. IF the tire itself has load, temp, and speed sensors in it that could be tied to active suspension, stability control and even driveline performance.
My inner cynic says it’ll probably just result in another smartphone app to nag you about going to your Pirelli dealer for tire service, and data gathering to moneitize their customer base.
Sir, your tire battery is dead and must be replaced.
It’s only $9.99/month for the cloudy app subscription so you can see your tire pressure without ads.
You Pirelli tire warranty does not apply because your driving history includes too much high-speed cornering and occasional heavy acceleration.
Why is Stellantis even in the discussion? They’re down to like 2 brands that make money, out of 14! Talk about derating Tesla, need to derate Stellantis as a “major brand”.
Since when has “making money” been important in this? Stellantis stills sells a LOT of cars. More than 3X as many as Tesla, 2X as many as Nissan, 3.5X as many as Mazda, and over a million cars a year more than Honda. They are still #5 globally in fact – ahead of darling around here BYD. Seems pretty major to me, even if I don’t want anything they hawk.
Kind of my point was they have 14 brands, you’re comparing their conglomerate to individual brands, may need to check the math on Honda, and BYD is a whole other thing being government backed and not paying supplies and all that.
Like compare to the smallest of those listed, not Honda but Mazda. Dodge sells 1/3rd the cars of Mazda, even adding Chrysler still not enough, Only RAM, which is only trucks, and Jeep have sold about as many each as Mazda individually.
I guess if we’re looking at Jeep/Ram as the brand then ok, but feel like as been’s covered here before Stellantis needs to either be broken up or trimmed way down to like 5 brands.
As for having a better 2nd quarter than Ford or GM, that’s like asking if Nissan will have as good a quarter as Toyota, was kind of my point, why even include them in the question?
Brands don’t really matter, IMHO. It’s still all one company at the end of the day. Whether you sell them all as Toenails or Hornets, a sale is a sale.
But brands do matter – hence the great GM housecleaning of 2009. Each brand has its own management, marketing, design, parts and components. Even a brand as badge engineered as the late Mercury costs the company money to run.
That matters some for profitability. It doesn’t necessarily matter for sales, and getting rid of them can hurt sales. And Stellantis has nothing like the brand overlap problem that GM had (and I would argue still does to a lesser extent – there is no reason to sell two identical lines of trucks, just so Buick dealers can sell trucks too). Stellantis has VERY distinct brands selling different products in different places with relatively minimal overlap compared to the olden days of rampant badge engineering.
Dutch East India Company???
I will not tolerate such blatant Muscovy Company of 1555 erasure
This won’t be best measured on an immediate basis, but, instead, over a longer term if GM can keep from offering a regular roll-out of sales. It would be foolish to simply see a value from solely the last three months and call it success/failure IMHO.
Much like certain department stores who’ve trained us with: “I’ll buy it when it goes on sale” deflates long-term value.
I’ll just wait until VW “Volksfest”, Ford’s “Employee Pricing Event”, GM’s “Truck Month”, or Chrysler & Nissan’s “It always feel like we’re about to go out of business sale”
“The United States banned Chinese firms from deploying any systems on cars that might allow the Chinese government to track where people are going.”
But nothing about the devices in everyone’s pockets which literally track where people are going and which use phone systems which have already been hacked by the Chinese….
….including US Secretary of Defense & President who use insecure phones every single day
https://www.nbcnews.com/tech/security/chinese-hackers-stole-americans-phone-data-8-telecoms-us-officials-say-rcna182942
The blatant stupidity is beyond disgusting.
I’m trying to figure out what makes this “Cybertire” any more of a threat than existing TPMS sensors, which also broadcast unique IDs.
IIRC TPMS is very low power and frequency, so not as far a throw as Bluetooth.
(Somewhere in Mongolia)
”Sir – There’s a blue Lincoln Corsair in the Walmart parking lot in Tampa Florida with a low right front tire”
”Oh her. She hit the curb on the way back from the hairdressers again, didn’t she?”
The Mongolians I know wouldn’t take too kindly to confusing their country with China.
My Bad.
You are talking about the govt here, so the stupidity is baked in.
This all started in 2024.
https://www.reuters.com/business/autos-transportation/us-propose-barring-chinese-software-hardware-connected-vehicles-sources-say-2024-09-21/
It will be interesting to see how Tesla’s autonomous taxis are received. Autonomous taxis owned by uncontroversial companies appear to be frequent targets for vandalism. I can’t imagine how frequently autonomous taxis owned by Elon will be targeted.
Well, at least Teslas aren’t known for battery fires.
Some yahoos burn two (2) Waymos, and that’s the only thing the nooze media is going to show for the next few weeks while massive crowds peacefully protest to protect our fellow Americans. (And yes, with modern decentralized organizing, it’s hard to keep the wreckers and vandals out.)
I am not just referring to the two Waymos that were burned in LA. I have read about several other cases of these being vandalized.
Here are two from this website:
A Mob Just Vandalized A Waymo Self-Driving Car And Set It On Fire. The Videos Are Nuts – The Autopian
Rider And Dog Seem Hilariously Unbothered As Vandals Spray-Paint Self-Driving Waymo Taxi – The Autopian
I presume autonomous taxi vandalism gets a disproportionate amount of attention, but it does appear some view these vehicles as easy targets for vandalism. It also appears some people also view autonomous car vandalism as victimless crimes. Given how much people hate Elon, I would be surprised if these vehicles aren’t targeted by the small number of idiots that aren’t peaceful.
This might rise to a tinfoil hat level conspiracy theory, but part of me wonders if the Tesla autonomous taxis are being released as bait for vandalism. The burned Waymo vehicles have been all over right leaning media as examples of how Democrats are promoting lawlessness. I can’t imagine how much of a field day right leaning media would have with torched autonomous Teslas.
Yeppers to all of that. AVs like that are vulnerable and pretty much helpless, and there’s always folks who enjoy destroying helpless things.
Another thought.
Perhaps the self-driving car vandalism is a reflection of many peoples underlying mistrust of technology that profits a very few…but proposed as a gift for the rest of us.
Unfortunately, this goes hand in hand with underlying premise of the anti-vax movement.
All forms of orthodoxy are indistinguishable at a certain level. A far right “wingnut” and far left “libratard” are just different sides of the same coin.
There’s additional reason—the LAPD has used camera data from Waymo as evidence in investigations. Granted, it has currently been limited to things we’d generally approve of, like IDing a hit-and-run vehicle. But couple that info with the total access some LEO seem to have with Ring camera data and it’s not *just* that people want to destroy things.
On the less “burn it down” angle, some protesters have found that AV taxis are very effective roadblocks. You can hail them, then pretty easily get them to line up but refuse to move because they sense an obstruction. Now you’ve got a pretty darn effective barricade.
“Innocent robotaxi deported to El Salvador”
Let’s torch some and find out!
I could not imagine a scenario in which the robotaxi is asked to drive over a particularly rough road and a potholed boulevard over and over and over… nope, that would never happen…
GM is going to win our on the quarter. I’m shocked to be praising GM this much, but their product portfolio versus Ford and Stellantis is in a much better place, their EVs are widely compelling and well priced (Mach-E and Lightening are losing their edge) and GM was wise to recognize that if sales will get pulled up on their own, they should hold the line on pricing. With the tariff scares going around and consumers pulling up purchases to avoid hikes, it only seemed natural to avoid overly incentivizing inventory when demand will be artificially inflated.
The caveats here being that the 6.2 recalls for mass engine failures are likely going to slow full size truck and SUV sales, and the cost of the engine replacements are likely going to hurt the bottom line. That said, it really seems like GM is able to move some serious metal right now, and while many of their products aren’t necessarily for me, their products tend to be mid-pack at worst in each respective segment, and leaders in others, especially the highly profitable full-size BOF SUVs like Escalade. Ford has some promise with an updated expedition hitting the market, but slow mustang sales, stagnating Mach-E and Lightning sales won’t bode well for profitability. Sure they moved a LOT of Broncos which are generally higher margin, but they were heavily incentivized, so net profits may take a hit. I suspect GM and Ford will both have done well over the last quarter and Stellantis leadership will be wishing they worked for a different company.
Mach-E and Lightning are losing their Edge. They will need to Focus on an Escape plan, maybe an Expedition or Fusion of ideas can allow them to Flex their muscle on GM and Stellantis.
Taurus
LOL
For us.
They could ride a Mustang from Everest, across the Galaxie to Granada and Capri, pick up an Escort in Montego, then Pilot a Quadricycle to the Rheinland to visit the Consul and Probe an Elite Cougar.
Working at a Buick/GMC dealership, the 6.2 issues aren’t doing as much negatively as you’d think. The 5.3 and 2.7T are the volume engines and most people spring for the 3.0TD for max towing if they’re going to upgrade. The 6.2 is only for the guy wanting “the big motor” and he’s a dying breed.
That was sort of my suspicion, given AFAIK the 6.2 is generally reserved for the top trims anyways, which aren’t the highest volume sellers in the first place. I’m curious about the cost of replacement on the bottom line, since I can’t imagine GM would end up making much if any net profit on one of those if they have to swap and entire long block. Like you said though, they’re not the bulk of sales, so they’re probably doing great given how many BOF products that they’re selling, which are all high margin.
I got the 6.2 for that exact reason and regret it.
Part of it is cause I was notified 2 days ago that my engine is bad and will need to be replaced. They are taking care of it at no cost to me, but time I guess. They only told me 4-5 days to get the engine delivered. They didn’t tell me how long it would be for the car to be ready.
The other reason is that after 2 year of ownership, we bought a camper and the gas mileage has been halved, even though I’m going 15-20 mph slower with it attached. And it’s not even heavy at around 3500 lbs.
Got me looking into the new Silverado EV, but we’ll see what happens.
Would be funny if you’re my cousin, is your workplace in Texas?
Ah, I’m actually in central Ohio. You might want to consider the 3.0TD Duramax. The diesel gets in the 30s for mpg with nothing attached
I absolutely have been leaning towards that as well. Bonus is I’ve never owned a diesel, and I like trying new things. Any tips? Things to watch out for? I know the just updated to the LZ0 in 23 so I would definitely want that one. I think anyway.
Thanks!
The LZ0 is the one to get, fixes a lot of the issues of the first gen diesel. There weren’t any major problems with the first one, just wasn’t as efficient or as powerful as it could be.
The only down side to the diesel is that you need to put miles on them for them to be happy. The guys that only drive 5k miles a year are having issues because they don’t get hot enough. If you drive more than 10k miles a year though , you’ll be fine
So, this just sounds like a redux of “Fiat is significantly owned by the Libyans and it’s becoming inconvenient.” Back in the Gianni Agnelli era, a significant stake in the company was sold to Gadhafi which started getting rather inconvenient when Fiat wanted to get US military contracts in the “Star Wars” era but couldn’t because the connection was too close for American comfort. Eventually, Fiat worked an absolutely mind-boggling deal that bought the shares back from the Libyans but managed to play quite elegantly into the Agnelli family portfolio (again in a gracefully looping round-about way cause holy frick was this whole deal complicated) and left smaller players holding the bag. And then in the end those military contracts didn’t exactly happen. So basically, someone who isn’t China or a major shareholder is probably soon to be bent over.
I can see no scenario where Stellantis bests anyone in the 2nd quarter. Unless we’re comparing them to Pontiac or something.
Compared to Stellantis, Pontiac actually has a chance!
Marmon?
Well, Pontiac’s profit/loss will be $0.
So Stellantis will have to come in with some profit in order to beat Pontiac. We’ll see!
For the Robotaxis, I suggest we send Alanis, since she’s based in the state. Instead of the trunk test, we’ll apply the “Alanis Drunk Test”. Wherein she gets smammered and has to rely on a Tesla Robotaxi to get her home safely.
I hope she lives in the geo-fence or it’s a long walk home
Home is where you lay your head. A hotel is sufficient.
TIL she hasn’t been living in Ottawa this whole time.
No, that’s me that lives in Ottawa. People get us confused all the time.
I’m guessing you won’t have to replace the sensor in the valve stem?
How The ‘Chinese ownership’ Has Jeopardized Pirelli’s Future 😉
I predict a rousing reception here in the comments for the idea of this coming soon to tires.
For the record, I’m intrigued, but not yet sold on it.
This technology will help prevent crashes caused by your pressure being off by 1.5 psi.
The tires know to compensate the pressure for the lighter wallet on the driver’s side.
I’ve always thought of Mclaren as the BMW fanboys supercar brand of choice, so the image in the article makes a lot more sense now.
LOL
Will this only work on Bimmers?
I need to know my tires are at 150 degrees on my daily drive to work.
I feel like this would be stellar for track day telemetry. Minute tire adjustments are crucial to lap times, and this could help the average enthusiast up their game.
Exactly.
My Cadillac displays tire temps and pressures on the main screen (I assume it’s just guessing, because it’s not in degrees but “cold”, “cool”, “warm” etc) but a better version of that with more granular detail could be really neat.
Hell, depending on what they monitor and how, it could even improve tire life of low treadwear tires on normal street driving, based on suggested pressures.
Most cars’ pressure settings are based off the OE tire. Once you change tire size/type/brand, those settings can go out the window.
A tire that can discern it’s optimal pressure could seriously improve wear and handling in pretty much any vehicle. This tech should be in OTR trucking.
I could see fleets adopting this. The average owner will get annoyed that the tire thingy is flashing or beeping, and take the car into the dealer for a walletectomy. The rest of us will shrug and eventually adjust the pressure to the optimal level.
Imagine combining load sensing with automatic inflation. Always running the optimal pressure. That would be sick.
One thing I didn’t see mentioned is for alignment.
I don’t know how granular the detail would be, but if it can sense that you’re getting more wear on a certain part of the tire, it could tell you to get it checked out.
My M235i could display tire pressure and temp. Interesting to watch (well have my passenger watch, I was busy) how high the temps got at 155mph on the Autobahn on a hot summer day.
But for day-to-day purposes, wheel-speed based TPMS is more than good enough, and effectively free.