It’s Thursday and we’ve got a study that looks at car dealership employees, some more news on Argo AI’s demise, and a little hint at the future of the Renault-Nissan-Mitsubishi-Funyon alliance.
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.
Dealership Turnover Lowest In A Decade
Since 2011, the National Automobile Dealers Association (NADA) has been studying dealership employees to watch employment trends in the industry. This year’s survey is out, showing that in 2021 salaries rose and turnover dropped by a large amount.
I haven’t seen the study, but the data was shared with Automotive News:
Average industry turnover was 34 percent in 2021 — the lowest level in the 11-year history of the National Automobile Dealers Association’s annual Dealership Workforce Study, the dealer trade association shared with Automotive News. It fell from 2020’s figure of 46 percent, which is where the annual turnover number had been hovering for several years.
That’s still a fairly high turnover. By comparison, the construction industry has an average turnover of 9.2%.
Doing a little math, Automotive News also determined that the average employee made $103,000 a year in 2021, a 27% increase over 2020 when the industry was in the throes of the pandemic. Obviously, that average includes higher paying jobs (sales/service managers) as well as lower paying positions.
All this makes sense given that, in a pandemic, you’re not likely to jump into another job (even with hiring up). It’ll be interesting to see how this changes next year, but good for Toyota Jan!
Lyft Cancelling Argo AI-Backed Taxis In Austin
With Ford’s announcement that they will essentially implode Argo AI we see the rest of the chips are starting to fall. Back in 2021, Ford, Lyft, and Argo made a big splash with a plan to add something like 1,000 new robo taxis to Lyft’s fleet.
You can guess how that plan is going. Lyft announced it was immediately suspending self-driving taxis in its trial markets of Miami and Austin.
“Argo AI has been a great partner and we’ve learned a lot from each other,” a Lyft spokesperson tells Fast Company. “This development does not impact Lyft’s autonomous strategy. We will continue working with our other partners to advance the safety and commercialization of AV technology.”
Life comes at you fast.
VW Pairing Up With Mobileye
The collapse of Argo AI was a surprise, but it’s not much of a shock that Volkswagen is going with Intel-backed Mobileye to pick up where Argo left off, especially since Mobileye and Volkswagen are already working together.
What I am curious about are the details from this Reuters report, which adds a little more info to my query about the actual composition of Ford and Volkswagen’s investment:
Volkswagen’s and Ford Motor’s exit from Argo came after three years of joint efforts on the development of automated driving systems and investments of more than $3 billion, highlighting the cost pressure automakers face in that field.
While Ford took a $2.7 billion non-cash pre-tax impairment on Argo, VW might have to write down more than one billion euros ($1.00 billion), a source familiar with the company said.
We know Volkswagen put in at least $1.0 billion and then had another $1.6 billion as some sort of on-paper supporting investment. We don’t know how much each company ended up with, but what sounds like happened to me is that Ford split the company with Volkswagen, got Volkswagen to say it would put in $1.6 billion worth of ::waves hands meekly over valuation of VW’s existing autonomous cars unit:: to pump up the value of the company. Ford then counted that increased value as income. At some point Lyft got 2.5% of the company in exchange for data, though at what value is not clear.
What I’m curious about is how much more money Volkswagen or Ford actually put in. There’s an interesting detail in this old Forbes article:
However, during a recent Deutsche Bank conference, Ford CEO Jim Farley briefly referenced Argo, saying “My personal opinion is that I think they deserve the opportunity to be a one-stop-shop company, and that they will take on more of the go-to market responsibilities for our AVF (automated vehicle fleet).” Ford and Argo have since declined to comment on what this remark means for Ford’s mobility service ambitions.
However, it does appear that just as Cruise has supplanted Maven as GM’s brand for mobility services, Argo AI may be taking on a similar role for Ford. Given that Argo is currently pursuing a new private funding round ahead of a potential IPO in 2022, it may be that investors are more inclined to put money into a dedicated AV business like Argo than to provide Ford with the capital required to launch an entirely new line of business. This is likely part of the reason why Ford delayed its originally planned 2021 launch into 2022.
This is pure conjecture, but I wonder if that private funding round didn’t go as well as they hoped and that created a chain reaction that led to this.
Nissan May Take A Stake In Renault’s EV Unit
I do not regularly read the Kyodo News, but thankfully someone at Reuters does and they had this little tidbit from the ongoing work that Nissan and Renault (and I suppose Mitsubishi) are doing to repair their relationship:
Japan’s Nissan Motor Co is considering investing up to a 15% stake in Renault SA’s planned electric vehicle (EV) unit, Kyodo news agency reported on Thursday, as the two companies negotiate an overhaul of their decades-old partnership.
The Japanese and French automakers said this month they were in talks about the future of their alliance, including Nissan potentially investing in the electric vehicle business being spun out of Renault.
Ford has essentially done this with Ford Blue so Renault establishing its own EV-focused endeavor seems sensible. That Nissan would want a piece of this also makes sense.
Have you ever worked at a dealership? If so, what was your experience?
Photo credits: Toyota, Lyft, Volkswagen, Renault