That which is dead may never die, but rises again harder and stronger. So goes the story of Mitsubishi, which may soon emerge from zombie status in North America thanks to a big injection of cash from the Renault-Nissan-Mitsubishi Alliance. Get excited! Even more exciting: it’s Friday. And with it, we’re talking about more EV production problems, buyouts at General Motors, and yet another fight over Chinese batteries in America. Let’s take it to the streets!
Mitsu Back? Mitsu Might Be Back
Most of us these days think of Mitsubishi as “that car company that used to make cool stuff,” and that’s certainly true; but it’s also been a small but quietly growing and profitable part of the Renault-Nissan-Mitsubishi Alliance. (I’m talking about North America here, too; Mitsubishi is pretty huge in other parts of the world, like Southeast Asia.) We know its product offerings aren’t the newest or strongest out there, but they get great fuel economy, and guess what else? Mitsu’s new cars don’t cost a billion dollars, unlike most these days. Also, the company’s still bothering to make small cars with the Mirage when almost every other automaker threw in the towel there.
Now, Mitsubishi may be getting a lifeline of investment as the Alliance renews its wedding vows for 2023 and figures out how to invest in North America to take advantage of those lucrative EV and battery subsidies under the Inflation Reduction Act. The plan is called Challenge 2025, and it’s maybe the most interesting Mitsubishi news I’ve seen in a decade-plus of covering cars.
Here’s some of the company’s announcement from last night; it involves heavy investment in electrification (bold mine):
Under Challenge 2025, the next three-year mid-term plan (MTP), Mitsubishi Motors Corporation (MMC) will accelerate efforts toward a sustainable carbon neutral future, made possible through a reduction of vehicle CO2 emissions by 40% and a reduction in operational CO2 by 50% by 2030.
Additionally, MMC will move to make 50% of global sales an EV by 2030, and then 100% of the fleet electrified by 2035 (“EV” specifically refers to a blend of plug-in hybrids (PHEV), hybrids (HEV) and pure electrics (BEV)). This goal is made possible through more aggressive investment in R&D and CAPEX, particularly in areas of electrification, IT, and new business. MMC also envisages a 200 billion Yen (US$1.5 billion) investment in battery sourcing to achieve its EV sales target in 2030.
[…] Specifically as it relates to North America, the next three years of business will see an enhanced and electrified product lineup in the market, closer cooperation with Alliance member Nissan, and growing the company’s local leadership position in digital tools for sales and marketing areas across other global markets.
Remember, one major reason the Alliance glanced at Mitsubishi from across the bar, walked over, bought a gimlet and said “We dig your vibe… so, do you party?” is because Mitsubishi’s hybrid tech is pretty advanced. It’s actually well-poised to be a decent player in the electrified space. Scale with Nissan will help in a big way.
But let’s hope Mitsubishi stays in the affordable-car realm! That’s a big advantage here, especially as EVs and even hybrids and PHEVs still command big price tags. I’m past the point in life where I’m going to beg for a new Lancer Evo or a 3000GT—I’ve had my heart broken too many times before, you see—but I’d love to see Mitsubishi emerge as an affordable, volume player in the BEV and PHEV space in this country. It can be done. Good luck to all involved.
The Nissan Ariya Has Problems, Too
Yesterday our man Thomas Hundal wrote a comprehensive roundup of all the early production problems that have faced this new, modern class of EVs in recent years—not to spread EV skepticism or to detract from problems with ICE cars, mind you. No, this is to point out the common issues facing the entire car industry’s electric transformation and to let buyers know what they might be in for, which I think is bare-minimum responsibility in the world of auto journalism.
Unfortunately, we can add Nissan’s new electric Ariya to that list. Though featured heavily in Nissan’s new ad campaigns, production is running at least a third below plan thanks to problems, reports Reuters today. And both dealers in Japan and the U.S. have since stopped taking new orders. Ugh. Here’s the story:
A fancy new factory, plus the standard-issue supply-chain disruptions equal an equation for headaches. I haven’t driven the Ariya yet but I’ve heard it’s good, if unexciting. (I also haven’t seen any on the road, ever!) But clearly, it’s a crucial component of what Nissan wants to do in the EV era. They had better figure this out sooner than later if it’s going to be a true player here.
GM Offers Buyouts To Employees After Nicely Profitable 2022
Here’s one for your “Capitalism Is All Made-Up” file: Though GM posted a record $14.6 profit for 2022 and paid its workers a handsome bonus to go with it, it is now offering buyouts to a “majority” of its 58,000 white-collar workers in the U.S. CEO Mary Barra said Thursday that the move is part of an effort to cut $2 billion in costs over the next few years. Here’s CNBC with the details:
The “Voluntary Separation Program,” or VSP, will be offered to all U.S. salaried employees who have spent five or more years at the company as of June 30. Outside of the U.S., the automaker will offer buyouts to executives with at least two years of time at the company.
GM expects to take a pretax charge of up to $1.5 billion related to the buyouts, according to a public filing Thursday. The majority of the charges are expected to be all-cash and occur during the first half of the year, the company said.
Barra, in the letter Thursday, said the program is “designed to accelerate attrition in the U.S.,” assisting the company in potentially avoiding “involuntary actions” in the future. The buyout offer comes after the Detroit automaker said last week it would terminate about 500 salaried positions globally.
Why do this after the record profits? For the usual reasons, like shoring up funds for the expensive EV transformation being undertaken by the entire industry. There’s also an upcoming UAW contract process coming up, and those workers will be likely to ask for more hourly money thanks to the record profits.
Anyway, buyouts are often a precursor to layoffs, and hopefully, GM’s people won’t have to face that. This buyout offer also reportedly comes with up to a year of COBRA medical coverage; not a bad deal if you’re in a position to take advantage of it.
[Editor’s Note: This type of thing is not unusual in the auto industry, but it is not a sign of good times. At Chrysler, when times were tough, the company offered employees VTIPs, or “Voluntary Termination Incentive Programs,” that involved money and a voucher for a car, as long as the employee agreed to leave the company (and, according to rumors from folks who dealt with the VTIP in the early 2000s, to agree never to return).
Here’s some info on the VTIP from 1991, per Justia US Law:
In April, 1991, Parker received a brochure for Chrysler’s newly implemented Special Early Retirement Voluntary Termination Incentive Program (“VTIP”). The package was accompanied by a cover letter signed by Chrysler’s president, Lee Iacocca, which explained that, as a result of “slim profits,” Chrysler needed to reduce its workforce by 3,000. The letter also explained that choosing the program was completely voluntary. The VTIP package included $62,000, a Chrysler vehicle, six months of continued life and health insurance coverage, and savings plan benefits. The brochure also offered information sessions and outplacement counseling in connection with the VTIP.
Sen. Marco Rubio Hits At Michigan’s Ford-CATL Plant
Remember how Virginia Gov. Glenn Youngkin passed on having a Ford-CATL battery plant in his state because he was afraid of undue “Chinese Communist Party” influence on the battery giant’s operation there? And remember how the Ford plant went to Michigan instead? It all shows you how political these battery fights can be, especially with companies from China—which has such dominance in this space already—getting involved.