Jaguar Land Rover wants to sweep up tech workers, Carvana investors are preparing for a crash, GM looks to reduce EV costs. All this and more in today’s issue of The Morning Dump.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday
Jaguar Land Rover Wants To Hire In Tech
You know how Twitter, Meta, and other tech companies are laying off workers right as we come towards the holiday season? Well, Jaguar Land Rover is looking at picking them up. According to the automaker’s official media release, it’s opened a job portal as it’s looking to hire 800 displaced tech workers with positions mostly based in Britain, America, Ireland, China, and Hungary. From the automaker:
Jaguar Land Rover has today announced a global hiring drive to fill more than 800 new digital and engineering vacancies across the UK, Ireland, USA, India, China and Hungary, as it seeks to recruit skilled workers from the digital technology industry.
Following the news of large-scale job losses from technology firms, Jaguar Land Rover is opening a new jobs portal for displaced workers from the tech industry to explore career opportunities, offering hybrid working patterns.
Holy crap, Jaguar Land Rover has the money to pay another 800 people? Either selling $200,000 Range Rovers has been a boon on the corporate side or the company’s making an aggressive bet. Regardless, it wasn’t that long ago that the company’s infotainment felt like a Palm Tungsten with a scaled-up screen and an electrified Range Rover just meant that the sunroof was possessed, so to see such a quick embrace of the digital age is cool.
Perhaps even more surprising is that JLR wants to hire for a little bit of everything. The marque has openings in areas as varied as cloud software, data science, electrification, machine learning, and autonomous driving. This should allow displaced tech workers to sink their teeth into many key aspects of upcoming models and genuinely help reshape the owner experience. Comment from digital product platform director Dave Nesbitt certainly seems to support this notion.
Jaguar Land Rover is transforming to an electric-first business, and we are creating some of the most digitally advanced vehicles ever seen. Through our products we will create new experiences, new levels of intimacy and connected car services for our customers, to give clients a true modern luxury experience.
Considering that the first electric Range Rovers are just a few short years away, this hiring spree should do JLR some proper good. So, if you’ve recently been laid off from a tech job and have always wanted to work in the automotive industry, maybe give JLR a shout.
Carvana’s Forecast Doesn’t Seem So Sunny
Between pissing off multiple states, allegedly failing to title customers’ cars in a timely fashion, and just burning through cash like it’s 87-octane, Carvana’s had a pretty bad year. According to Bloomberg, Carvana investors are now bracing for impact despite the company being liquid enough to last through 2023.
“The company grew too fast and now we are seeing the ramifications of it,” said John Kerschner, head of US securitized products at Janus Henderson Group.
Carvana needs a steady drip of financing to conduct its business, as do many corporations. It’s sold nearly $6 billion of corporate bonds over the last two years. It makes auto loans to car buyers, and sells those loans to other firms, or bundles them into bonds known as asset backed securities.
But funding is getting harder. The company’s corporate bonds trade between about 37 and 48 cents on the dollar, making it all but impossible for the company to borrow economically in that market.
“Carvana’s debt prices are saying default,” said Eric Rosenthal, senior director of leveraged finance at Fitch Ratings. “The debt prices in the secondary market are one of the best indicators of what you’re going to see happen with the company.”
If Carvana does go down that path, the used car market might briefly enter what is professionally known as the “lol, lmao zone.” Heaps of inventory could hit the wholesale market at lower prices than what Carvana paid for those cars in the first place, driving up auction supply for dealers to compete for. While hardly enough volume to crash used car pricing, it could be interesting.
GM Might Save A Lot Of Money
Between engineering, battery materials, and manufacturing, making electric cars is an expensive business. To help beef up margins, Automotive News reports that GM might’ve found a way to shave $2,000 off the cost of each EV the automaker builds. From the news site’s story titled “GM projects $2,000 savings per vehicle from digital retailing, regional EV fulfillment”:
The automaker has opened three centralized EV fulfillment centers — two in California and one in the Southeast, Reuss said. The inventory management change is designed to speed up vehicle delivery times — to as few as four days — and increase efficiency, which will reduce distribution costs, Reuss said.
“The biggest enterprise-wide cost savings will come as we and the dealers change how we handle inventory, which means we’re reducing how much we’re … incentivizing vehicles that were ordered that aren’t popular,” he said. “At the same time, we’ll improve the customer experience by delivering the exact vehicles our customers want quickly and efficiently.”
GM also has launched a digital retailing tool that currently works with the Chevrolet Bolt EV. Reuss said the platform will expand to include Cadillac in 2023. About 3,200 dealerships are enrolled on the digital retailing platform, representing about 80 percent of GM’s U.S. network, he said.
While speeding up delivery times should help consumers actually get cars, there doesn’t seem to be any indication that these cost-savings will be reflected in retail pricing. That’s not much of a surprise, but it’s a great reminder that tighter manufacturer control of new vehicle supply typically means more money for automakers.
Japan’s Also Mad About The Inflation Reduction Act
U.S. Trade Representative Katherine Tai and Japanese industry minister Yasutoshi Nishimura discussed new U.S. electric vehicle tax credits during a meeting on the sidelines of a summit in Bangkok, Tai’s office said on Thursday.
During their meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, Tai “also raised the status of the U.S.-Japan beef safeguard agreement and Japan’s ongoing review of its on-road ethanol use targets,” her office said in a statement.
Japan’s government has warned that the electric vehicle tax credits in the Inflation Reduction Act could deter further investment by the Japanese in the United States.
While we’ll have to wait and see regarding further investment from other industries, Japan’s automotive sector seems to have risen to the Inflation Reduction Act’s challenge. Not only has Honda committed to a massive North American EV investment, Toyota’s plotting a multi-billion dollar investment in American EV manufacturing and Nissan still has EV plans for its American manufacturing operations. In any case, it looks like allies may have found a bargaining chip that may lead to other trade concessions.
Whelp, time to drop the lid on today’s issue of The Morning Dump. The Los Angeles Auto Show’s press day is officially over, so I’d love to hear what your favorite debut from the show was. Admittedly, it’s not a long roster of vehicles, but such is the nature of autoshows when manufacturers are happy to hold exclusive unveiling events so they don’t have to compete for views because media outlets aren’t spreading out resources to cover several new cars at once.
Lead photo credit: Land Rover