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+++ ASTON MARTIN will reportedly offer a third variant of its Valkyrie hypercar, designed to slot between the ‘standard’ road-legal model and the track-only Valkyrie AMR Pro. The British manufacturer is working on a Track Pack for its hypercar. As with similar models offered by other automakers, it will be based on the road-legal model and come complete with a host of new aerodynamic parts. Additionally, it could also weigh slightly less than the normal Valkyrie. It is alleged that Aston Martin is developing an optional, ultra-lightweight carbon fiber tub that could be included in the Track Pack, while there’s a chance that there will also be a slightly bump in power. In August, Cosworth, the company responsible for creating the Valkyrie’s naturally-aspirated 6.5-liter V12, revealed that its bespoke powertrain will pump out a remarkable 1.130 hp. It is widely assumed that this horsepower figure quoted by Cosworth will be for the AMR Pro and includes the extra oomph provided by the electric motor and battery from Rimac. In all likelihood, the road-going Valkyrie will produce closer to 1.000 hp. In Track Pack guise, this could be bumped up by about 50 hp. Whether the lucky few to secure a Valkyrie application opt for the standard model, the Track Pack or the AMR Pro, they’ll receive the keys to what’s promising to be the fastest production car around a circuit ever produced, with Aston promising that the Valkyrie AMR Pro will match current Formula 1 cars around certain tracks. +++ 

+++ BMW is considering a second U.S. manufacturing plant that could produce engines and transmissions, Chief Executive Harald Krüger said, shortly after a report that U.S. President Donald Trump would impose tariffs on imported cars from next week. Krüger in an interview at the Los Angeles Auto Show also said he backed British Prime Minister Theresa May’s current Brexit plan to divorce the United Kingdom from the European Union. “The compromise on the table is something I can clearly support”, he said. May is drumming up support for the divorce deal with the European Union ahead of a December 11 vote in British parliament. BMW is considering changes to U.S. operations as sales in the region grow, Krüger said. BMW has a U.S. vehicle assembly plant, in South Carolina, is planning to open a Mexico factory next year, and is considering changes to its current scheme of importing engines and transmissions. “We’re at the range where you could think about a second location” in the United States, he said, adding that such a factory would provide a natural currency hedge. +++ 

+++ It’s finally happened: the last remaining American automaker is bailing on compact passenger sedans, at least for the foreseeable future. While its long been rumored that a number of GM vehicles were on the chopping block, one of the biggest surprises about the company’s recent announcement was the death of the CHEVROLET Cruze in North America. The Cruze was never as successful as the Honda Civic or Toyota Corolla, but nevertheless consumers bought lots of them. Thanks to the model’s spaciousness and affordable $16,975 base price, people could easily overlook the fact that the car wasn’t necessarily best-in-class. Carsalesbase data shows Chevrolet sold 184,751 Cruzes in the United States last year, and that’s a significant number even if it trails the 377,286 Civics and 308,695 Corollas that were sold in 2017. The model also outperformed the Ford Focus, which managed to sell 158,385 units last year. The number is large enough that the Cruze outsold the whole entire Oldsmobile lineup in 2002 as the brand was inching closer to being a memory. The model also eclipsed the 178,300 Pontiacs that were sold in 2009 before that brand, too, was handed a ‘death’ penalty. While it’s easy to say consumers want crossovers instead of cars, a quick look at the sales chart shows the Cruze outsold the Trax by more than 100,000 units in the United States in 2017. Of course, that particular crossover starts at $21,300 and is getting pretty long-in-tooth, but still. This leads me to an issue that a number of automakers will soon be facing: a lack of affordable models. When Dodge killed the Dart, the brand’s entry-level model became the aging Journey, which cost thousands of dollars more. The same thing happened at Chrysler, where the brand’s entry-level product is now the Pacifica that starts at $26,995. Not that long ago, affordable sedans were seen as stepping stones to get people into the Ford, GM or FCA family. While they might be buying an affordable sedan today, the hope was that buyers would remain loyal to the brand and become lifelong customers who would eventually return to purchase more expensive products in the future. Of course, brand loyalty is finicky and automakers have to balance demand against the pressures of building affordable sedans in the United States. There’s also the chance this could only be temporary as GM has plans for an assortment of new electric vehicles including a “low roof car”. Right now, though, traditional sedans by U.S. automakers are becoming extinct, and fast. Makes you wonder what’ll happen when people get bored of SUVs though, doesn’t it? +++ 

+++ Tesla’s vehicle sales in CHINA sank 70 % last month from a year ago, the country’s passenger car association told, underscoring how the Sino-U.S. trade war is hurting the U.S. electric carmaker. Hours later, the company responded from its headquarters in California, calling the industry group’s report “wildly inaccurate”. An official from China Passenger Car Association (CPCA) said data from the industry body showed Tesla sold just 211 cars in the world’s largest auto market in October. Tesla representatives in China did not respond to repeated calls and written requests for comment during the Asia work day. Later, a California-based spokesman issued a written statement saying Tesla disputed the CPCA’s data, but he did not provide internal sales figures. “This is wildly inaccurate. While we do not disclose regional or monthly sales numbers, these figures are off by a significant margin”, he said in the statement. The electric carmaker, which imports all the cars it sells in China, said in October that tariff hikes on auto imports were hammering its sales there. In July, Beijing raised tariffs on imports of U.S. autos to 40 % amid a worsening trade standoff with the United States. While so-called new-energy vehicle sales have continued to climb in China, wider auto sales have slowed sharply since the middle of the year, taking the market to the brink of its first annual sales contraction in almost 3 decades. Tesla said last week it was cutting the price of its Model X and Model S cars in China in a shift in strategy to make the cars “more affordable” and absorb more of the hit from higher tariffs. Tesla recently secured the site for its first overseas factory in Shanghai that will help it avoid the steep tariffs. +++

+++ DAIMLER will start building electric cars in China next year as a way to meet Beijing’s stringent anti-pollution quotas for carmakers, even as demand for conventional models like the Mercedes-Benz Maybach remains strong. China has introduced minimum sales requirements for so-called new energy vehicles (NEV’s) and Daimler is on track to meet the quota for 2018, Daimler China chief Hubertus Troska said. “We are very confident about fulfilling the NEV quotas”, Troska said, adding that a new fully electric vehicle will be added to local production. “We begin production end of next year”, Troska said about the Mercedes-Benz EQ C electric model. Chinese customers are still buying high-end Maybach models at a rate of 600 vehicles a month, Troska said. Sales of Mercedes-Benz passenger cars will continue to grow next year, given that consumer demand for premium cars has bucked an overall trend of flagging sales in the world’s largest auto market, Troska told a briefing in Stuttgart. “We are absolutely positive about business development next year”, Troska said about growth prospects for Mercedes-Benz passenger cars. Although talks with Chinese carmaker Geely about areas of potential cooperation are continuing, Troska said Daimler was very happy with its existing China partners which include BAIC and BYD. Geely founder Li Shufu has asked Mercedes to enter a broader alliance after acquiring a 9.69 % stake in the German carmaker earlier this year. Daimler could enter a cooperation with a non-auto company in the area of electric vehicles, Troska said, declining to comment further. +++

+++ GENERAL MOTORS ’ decision to idle 5 plants, trim its salaried workforce by 15 % and cease North American production of 6 different models sparked outrage on both sides of the US-Canadian boarder. Canada’s prime minister, Justin Trudeau, was the first to speak out as he tweeted “GM workers have been part of the heart and soul of Oshawa for generations, and we’ll do everything we can to help the families affected by this news get back on their feet”. Trudeau went on to say he spoke with General Motors CEO Mary Barra to “express my deep disappointment in the closure of the Oshawa Assembly Plant in Ontario”. President Trump’s response wasn’t as measured as he tweeted “Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the thanks we get!” Trump went on threaten to cut all GM subsidies, including those for electric vehicles. If this were to happen, it could prove disastrous for the company as it has plans to introduce at least 20 new electric vehicles by 2023. Of course, the company is already nearing its EV tax credit limit so it might not have much effect unless the subsidies are extended. Regardless, Trump went on to say “General Motors made a big China bet years ago when they built plants there (and in Mexico). I don’t think that bet is going to pay off. I am here to protect America’s Workers!” Unions were also angered by the move and the UAW said “General Motors decision to stop production at the Lordstown, Ohio, and Hamtramck, Michigan, assembly plants will idle thousands of workers, and will not go unchallenged”. UAW Vice President Terry Dittes even echoed Trump as he stated “GM’s production decisions, in light of employee concessions during the economic downturn and a taxpayer bailout from bankruptcy, puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days”. The union went on to note that products, such as the Chevrolet Blazer and Buick Envision, which could have been built in the affected plants are instead produced in Mexico and China. Needless to say, GM is feeling the heat and decided to respond with a short statement saying it is “committed to maintaining a strong manufacturing presence in the U.S”. The automaker went on to say the recently announced cuts are designed to support the company’s future and position it for long-term success so it can “maintain and grow American jobs”. While that’s little comfort to the thousands of GM employees impacted by the changes, the company said many factory workers will have the option to transfer to other plants where the company builds more successful trucks, crossovers and SUVs. GM went on to say it plans to add new technical and engineering jobs to support future electric and autonomous vehicles. +++ 

+++ HONDA is planning on axing its diesel models in Europe, while focusing on all-electric and hybrid powertrains moving forward. The Japanese automaker wants twothirds of its vehicles sold in Europe to be electrified by 2025. According to a senior Honda executive, his company plans to ditch all diesels on sale in Europe by the year 2021, when the current Civic will get replaced. “Every single model change from now on will not have a diesel”, said Dave Hodgetts, managing director for Honda in the UK, the automaker’s largest European market. The new CR-V is Honda’s first mainstream new model to be launched without a diesel. Once it arrives in March, it will only feature gasoline-electric and full hybrid powertrains. In fact, Honda expects the hybrid version of the CR-V to account for half of the nameplate’s 60,000 predicted annual sales in Europe. Right now, you can still get a diesel engine from Honda as long as you opt for either the Civic or the HR-V. Meanwhile, replacements for the HR-V as well as the Jazz are expected in 2020 with the automaker’s i-MMD (Intelligent Multi-Mode Drive) hybrid system. Honda will launch its first fully-electric car next year, based on the Urban EV concept previewed at the 2017 Geneva Motor Show. +++

+++ A senior executive at MITSUBISHI said its alliance with Nissan and Renault can survive management upheaval, a day after it fired Carlos Ghosn as chairman over financial misconduct allegations. The future of the 19-year alliance, one of the biggest automotive groups in the world, has been thrown into doubt after the arrest and subsequent ousting of Ghosn as chairman of both Nissan and Mitsubishi. Ghosn, 64, is the architect of the alliance and its chairman. He also remains CEO and chairman of Renault. Senior executives of the alliance are due to meet for their regularly scheduled gathering later this week in Amsterdam. Executives are also expected to discuss Ghosn’s chairmanship of the alliance, one source at Nissan told, seeking anonymity because the contents of the meeting are not public. Mitsubishi CEO Osamu Masuko said he would join the meeting via video link, while Nissan CEO Hiroto Saikawa, who remains in Japan, hasn’t decided whether he will travel for the meeting, 2 company sources said. Nissan declined to comment. A major longer-term focus is whether and how the ownership structure of the alliance might evolve, as Ghosn, under pressure from the French government, had pushed for a deeper tie-up, including potentially a full merger between Renault and Nissan, despite strong reservations at Nissan. Renault holds around 43 % of Nissan, which in turn owns a controlling 34 % stake in Mitsubishi. Nissan, the biggest partner in the alliance by sales, has a non-voting 15 % stake in the French partner. Speaking to reporters at a research and development center in Okazaki, central Japan, Mitsubishi Executive Vice President Mitsuhiko Yamashita said that regardless of the shape the alliance takes, the 3 companies would continue to source more parts together and leverage their ties to develop new technologies. “I can’t say how the 3-way partnership might evolve, but as car-making requires more and more new technologies, the days when a single car maker can handle everything on its own are going to disappear”, Yamashita, who once served as Nissan’s top engineer, said. Renault will appoint a new chief compliance officer to head the carmaker’s own independent audit triggered by Nissan’s allegations against Ghosn, 3 sources said, days after Finance Minister Bruno Le Maire announced the probe. The investigation will conduct checks on Ghosn’s pay and benefits as well as those of his immediate staff and executives, they said. The promotion of security chief Eric Le Grand to the new compliance role was first reported by Les Echos. Ghosn is in detention in Tokyo over suspicion of financial misconduct, including alleged understating of his income and personal use of corporate money. He has denied those allegations, public broadcaster NHK has reported. He has not made public comments on the allegations. Yamashita said the alliance would need to work out who would make decisions, and how, without the binding figure of Ghosn, but was confident the partnership was strong enough to withstand the challenge. “Renault and Nissan have a history of nearly 20 years, and we’re coming up on 2 years since Mitsubishi Motors joined”, he said. “The foundation on which the cooperation has been built is becoming strong so I have faith that we can work with that”. Sealed in 1999 when Nissan was rescued from near-bankruptcy, the Franco-Japanese alliance was enlarged in 2016 to include Mitsubishi and enabled the members to jointly develop products and control costs. Yamashita’s remark echoes comments by Saikawa who told staff in a town hall meeting on Monday that the alliance remained important to generate synergies. Saikawa also said there was an “excessive concentration of power” on Ghosn, and that in future alliance members should communicate better to help preserve their independence. In fresh allegations, Japanese media reported that Ghosn had shifted personal investment losses incurred during the 2008 financial crisis to Nissan to avoid millions of dollars in losses for himself. Citing several unidentified sources, the Asahi Shimbun newspaper said that when Ghosn’s bank had called for more collateral from the executive, he instead handed the rights over the derivatives trade to Nissan, which effectively shouldered 1.7 billion yen ($15 million) in losses. Japan’s Securities and Exchange Surveillance Commission (SESC) discovered this incident during that year’s routine inspection, the newspaper said. Nissan said it could not comment on the report. An SESC spokesman said the watchdog could not comment on individual cases. +++ 

+++ In October, it was revealed that a company had bought the second-generation Aston Martin Vanquish’s tooling and design drawings. Today, we may know who the mystery buyer was. MORGAN may be the company behind the $26 million intellectual property purchase. Aston Martin would not confirm who the buyer was, and Morgan denied the purchase on the record, but the latter has announced plans for a new model with specs quite similar to the Vanquish. As a refresher, Aston Martin decided to resurrect the DBS name to replace the second-generation Vanquish. When the company launched its initial public offering, it was required to disclose a public prospectus, which noted the sale of the Vanquish IP. Until now, it was anyone’s guess who paid a price to own the tooling and design, but Aston Martin itself promised 18 months of assistance in whatever is under development. Morgan’s new vehicle will allegedly be a rear-wheel-drive, front-engine coupe with a bonded and riveted aluminum chassis. The generic specs are very similar to the Vanquish. The company added it will first use the new platform for a wide-body vehicle before it builds a flagship model on the architecture in the next 5 years. Aston Martin CEO Andy Palmer said he agreed to the deal after he learned how the unknown buyer’s vehicle was to be executed.  He also said the mystery buyer did not want the Vanquish connection made public, but it appears Morgan may have outed itself. Today, Morgan is best known for its wood-framed and 3-wheeled sports cars, but it seems the British company has grander plans ahead. We could learn more about the new sports car as early as next year when Morgan celebrates its 110th anniversary. +++ 

+++ Jurors have narrowed down a list of semi-finalists to 3 finalists in each category for the 2019 NORTH AMERICAN Car & Truck/Utility of the Year awards. This time, the finalists for North American Car of the Year are: the Genesis G70, the Honda Insight and the Volvo S60. All 3 fended off a handful of other cars that made their best case for the award. Cars that did not make the finalist cut were the Audi A6, Buick Regal Tour X, Hyundai Veloster, Kia Forte, Mazda 6, Mercedes-Benz A-Class, Nissan Altima, Nissan Leaf, Toyota Avalon / Avalon Hybrid, Toyota Corolla, and Volkswagen Jetta. The 3 North American SUV of the Year finalists are: the Acura RDX, the Jaguar I-Pace and the Hyundai Kona. Each SUV outshone numerous other vehicles, and the award is arguably more coveted as consumers turn to SUVs in the market. Vehicles that did not make it to the final round were the BMW X5, Cadillac XT4, Hyundai Santa Fe, Infiniti QX50, Jeep Wrangler, Lincoln Nautilus, Nissan Kicks, Subaru Ascent, Toyota RAV4, and Volvo XC40. Finally, the North American Pick-up of the Year finalists are: the Chevrolet Silverado 1500, the GMC Sierra 1500 and the Ram 1500. All 3 pick-ups are completely redesigned for the 2019 model year, and the finalist group pits the General Motors trucks against the Ram. Today’s announcement paves the road to the winner’s circle and one final round of voting. The winners will all be announced at the 2019 North American International Auto Show in Detroit, which takes place next January. Last year’s winners included the Honda Accord (car), Volvo XC60 (SUV) and Lincoln Navigator (truck). +++

+++ When PSA Group confirmed in September that it planned to transfer 2,000 engineering jobs at the OPEL engineering center in Rüsselsheim, Germany, to Segula Technologies, the question on many people’s minds was: Who? It’s a fair question. Segula is a French engineering company that has been active only since 2000. The company’s 12,000 employees work in the fields of automotive, aerospace, energy, naval, railways, and oil and gas, though automotive work makes up about 55 % of Segula’s business. The so-called “externalization” of PSA Group work to Segula would increase the size of Segula’s automotive division by 40 %, said Laurent Germain, group managing director for Segula Technologies. It’s part of a pattern of sharp growth at the privately held company, which has increased its revenues to about €700 million this year from €345 million in 2013, and is hoping to add an additional 4,500 employees in the coming year. “The aim of Segula is to become the world leader in automotive engineering activities”, Germain said in an interview at the Paris auto show. Segula has activities in 28 countries, but 50 % of the turnover, and 6,000 employees, are in France. The Rüsselsheim agreement, if ratified by German unions, would give Segula a strong presence in Europe’s largest automotive market, and one where spending on r&d tops 3 billion euros a year, Germain said. “That is about one-third of global automotive research and development spending”, he noted, adding that it was likely to increase to as much as €6 billion by 2023. “This is precisely why we want to increase our presence in Germany”. For PSA Group, the deal eliminates, or at least delays, a major personnel decision. When PSA acquired the perpetually money-losing Opel/Vauxhall from General Motors in 2017, CEO Carlos Tavares said that combining product development and r&d would be a major driver of synergies. The Rüsselsheim technical center, with 7,000 employees and, now, a greatly reduced workload, has been in the crosshairs. PSA has shifted some functions there, such as light commercial vehicle development and electric cars, but there still appears to be an oversupply of engineers. “We analyzed the situation in depth”, Anka Felder, Opel’s labor director, said in an interview posted on Opel’s Twitter feed last month. “A strategic partnership is by far the best solution to keep the highly qualified jobs here on site”. She said that by having a partnership with Segula Opel would “tackle the overcapacities that have been created by the decreasing workload from external parties”. Felder added: “Therefore, there was a certain level of relief that we are presenting a plan that could sustainably safeguard 2,000 jobs in Rüsselsheim”. If the deal gets final approval, expected by the end of the second quarter next year, PSA engineers will essentially work for Segula rather than Opel at first, Germain said. “They will work on the same projects in the same locations,” he said. Segula will honor a commitment made by Tavares that jobs at the technical center will be safe until at least 2023. Although the Rüsselsheim project was an open-bidding process, PSA is very familiar with Segula’s capabilities. Segula has already completed 3 similar externalizations with PSA Group. 3 years ago it took over operations at the test facility in La Ferte Vidame southwest of Paris; it operates the group’s body shop activities in France; and manages process engineering activities at PSA’s joint venture in China with ChangAn, known as Capsa. “It’s probably why PSA chose us”, Germain admitted. While Segula’s activities in Rüsselsheim would start with existing PSA Group projects, the ultimate aim is to use the work there as a bridge to win more contracts in Germany, and ultimately China. “We want to use the competencies of these 2,000 engineers to increase our market share with other German automaker such as VW, BMW and Daimler”, Germain said. Segula specializes in engineering a new car “from A to Z”, said Vincent Fournier, executive vice president and commercial and technical group director at Segula. Fournier said the largest projects, with fees of tens of millions of euros, involve creating a new model on an existing platform, though Segula would not name any specific projects, citing confidentiality rules. More and more automakers are outsourcing this kind of model development, because they need to devote resources and money to future technologies, Fournier said. In addition, the creation of new segments and subsegments, many centered on SUVs or crossovers, has led to increased demand. “The market is growing due to new technologies”, Fournier said, “and at the same time you have a real multiplication of body types on the same platform”. Segula hopes that making inroads with German automakers will help land new contracts in China, the world’s largest auto market. “In China, the signal of a successful engineering company is to work with German automakers, and having thousands of engineers in Germany helps you win market share in China”, Fournier said. Germain acknowledged that the potential Opel agreement has put Segula in a spotlight that it might not be accustomed to, but he said the company was trying to embrace it. “It’s a structural change”, he said. “We’re becoming better known, because our customers are relying on us more, and they are giving us more responsibilities”. +++ 

+++ The PORSCHE Taycan due out late next year will be among the first production cars with an 800 volt electrical system. It means the electric sport sedan will be able to take advantage of the new generation of high-speed, 350-kilowatt charging stations, which Porsche is already installing at some of its dealerships. In an interview, Porsche CEO Oliver Blume provided some insight into how quickly Taycan owners will be able to charge their cars. He said a charge of less than 20 minutes would net a range of about 400 kilometers, and for individuals extremely short on time, charging for just 4 minutes would net about 100 km. That’s substantially faster than with existing electric cars, including those from Tesla. Blume also provided some insight into targets for next-generation battery technology due on the market in about a decade. He said the technology would allow for quicker charge times than what’s currently available and a range approaching 1,000 km on a single charge. Production of the Taycan will take place at a new facility being established at Porsche’s main plant in Zuffenhausen, Germany. A Taycan Sport Turismo has been confirmed to join the sedan and there are rumors an open-top Targa option will be added as well. +++

+++ The arrest of RENAULT – Nissan boss Carlos Ghosn has triggered new attempts by the Japanese carmaker to shake off the control of its French parent, adding to the problems piling up on President Emmanuel Macron’s desk in the Elysee Palace. But this one, more than most, may be of Macron’s own making. In April 2015, as a 37 year-old economy minister with then-unknown presidential ambitions, Macron ordered a surprise government stake increase in Renault, designed to secure double voting rights for the state. The overnight move profoundly rattled the Japanese end of the Renault-Nissan alliance. In the ensuing 8 month boardroom fight between Macron’s ministry and Hiroto Saikawa, Nissan’s second-in-command at the time, many now see the seeds of today’s crisis. When Ghosn’s Gulfstream touched down in Tokyo on Nov. 19, prosecutors were waiting. Nissan, the company he rescued from bankruptcy and had overseen for almost 2 decades, outlined allegations of financial misconduct against its chairman and said governance had been eroded by Renault’s control. Saikawa has since contested Renault’s right to appoint executives and directors under the alliance master agreement. Such fundamental differences now threaten the future of the partnership, which rivals Volkswagen and Toyota on the global auto industry stage. “President Macron himself has skin in the game”, Max Warburton, an analyst with New York-based asset manager AllianceBernstein, said this week. “He must recognize that his decision in 2015 to increase the French state’s holding in Renault likely impacted Japanese perceptions of the alliance and heightened concerns that Nissan was ultimately within the control of the French government”. The Elysee declined to comment, but an adviser said the president had “no regrets” about the events of 2015. Macron, who surged to victory in elections last year to became France’s youngest president, now finds himself battling street protests and record low approval ratings. The Renault-Nissan crisis may draw more attention to the risks of his bold interventionism, once seen as refreshing. The year before his move on Renault, the government under Socialist President Francois Hollande had passed the Florange law. Named after a steel furnace whose closure became a symbol of decline, it doubled voting rights for long-term investors (chief among them the French state) in any listed companies that did not opt out via a shareholder vote. Over several months starting in late 2014, Macron, a former Rothschild dealmaker, tried in vain to dissuade Ghosn and the Renault board from proposing an opt-out at the company’s April 30 general meeting. With a 15 % stake in the carmaker and an only slightly larger share of the vote, the government seemed likely to lose such a face-off. Then, on the evening of April 7, Macron called Ghosn to let him know, as a courtesy, that the state had bought another 4.73 percent of Renault for €1.2 billion, would announce its maneuver in the morning and planned to sell back down to 15 % only after defeating his opt-out. “He would always go in with guns blazing”, a former minister said of Macron. “Only then would the real power dynamics of the situation register”. With that step, seen by detractors and admirers alike as an unprecedented government “raid”, the simmering battle of egos between Ghosn the global CEO and Macron the wunderkind banker-turned-minister had burst into the open. Brushing aside warnings, Macron pressed ahead and defeated the opt-out. The vote handed France an effective blocking minority at Renault, which in turn controlled Nissan shareholder meetings via its 43.4 % stake in the Japanese firm. Alarm bells rang in Tokyo as that sank in, ratcheting tensions higher over the months that followed. Nissan threatened to exit the Restated Alliance Master Agreement; a radical step that would have freed it to buy up shares in its smaller French parent, and end or reverse Renault’s control. “The governance of Renault and consequently the autonomy of Renault management, which have been the basis of trust for the alliance, will be significantly impacted”, Saikawa wrote in a Sept. 3, 2015, note to the Renault board. Macron’s staff initially dismissed Saikawa’s demands (that Renault sell down its controlling Nissan stake, restore voting rights to Nissan’s 15 % Renault holding and relinquish control of the alliance) seeing them as dictated by Ghosn, who at that point remained Nissan CEO. “When Ghosn talks about what Nissan and Japan think, he’s speaking for himself”, an official at the French agency that oversees state shareholdings said at the time. “It’s all rubbish as far as I’m concerned”. Fast-forward 3 years: Ghosn is gone, detained for now in a Tokyo cell to face accusations that he misappropriated Nissan assets, misrepresented company investments and, partly as a result, massively under-reported his real compensation. He denies the allegations, according to NHK television. And yet the same Nissan demands are back on the table. “The terminology, the phrases and vocabulary we’re hearing today are much the same as in 2015”, said another former French government official, now an investment banker. “We didn’t believe Ghosn when he presented the Japanese position, but in fact it was no invention”. Macron’s pressure for a full Renault-Nissan merger also raised hackles in Japan months before the Nissan whistleblower probe that led to Ghosn’s arrest and ouster as chairman. Having previously insisted that France would first have to sell its Renault stake, Ghosn agreed this year here to explore a closer tie-up in return for the renewal of his Renault CEO contract with government backing, and he then revived deal talks. This week, executives from Renault, Nissan and Nissan-controlled Mitsubishi are gathering for the first time since Ghosn’s arrest. The Amsterdam meetings are aimed at keeping shared plants and programs ticking over in the sudden absence of a global leader, and averting conflict. But as the appointments dispute threatens to escalate into a new boardroom fight, Renault’s hand is critically weakened by another deal Macron struck to end the last stand-off. At the end of 2015, as tension mounted over Nissan’s threat to sever alliance ties, France agreed here to cap its Renault voting rights at 18 % for most non-strategic decisions. But the Macron-backed “stabilization” agreement went further, with a binding pledge by Renault never to oppose the Nissan board at a company shareholder meeting. In the now-unfolding tussle over directorships, that is a handicap. The reversal was a staggering “failure of oversight” from a government that had intervened to protect what it saw as Renault’s interests, according to Loic Dessaint, CEO of Proxinvest, a Paris shareholder advisory firm. “It’s nothing less than the abandonment of Renault’s rights over its main asset”, Dessaint said. “Renault has effectively forfeited its votes in Nissan”. He added: “Now we’re approaching a situation where they realize too late it’s had an impact on their negotiating position. The alliance power balance is already upended”. A Macron’s cabinet colleague said he seemed distracted towards the end of the year when, as is now known, he was preparing to launch En Marche, the political party that eventually carried him to the presidency. The web address en-marche.fr was registered on Jan. 7, 2016, less than 4 weeks after the Renault-Nissan deal was brokered. “It didn’t prevent him from being very engaged with his dossiers, given his intelligence and capacity for work”, the ex-minister said. “But they were no longer his main concern”. Ghosn also bears some responsibility for escalating his 2015 battle with the economy minister, he added. “Ghosn had the absolutely insufferable conviction that he was above dealing with ministers, so he’d only ever consider talking to a prime minister, which I doubt endeared him much to Macron, who was also rarely unaware of his own significance”. At least part of that verdict was shared by another cabinet colleague, Christophe Sirugue, when asked about his relationship with Renault’s CEO a year after the dispute was settled. “With Carlos Ghosn? You have got to be kidding”, said Sirugue, then industry minister for Europe’s third-ranked economy and Renault’s biggest market. “As far as he’s concerned I don’t exist”. +++ 

+++ Elon Musk, outspoken CEO of TESLA , has confirmed the company was close to running out of cash as it dealt with numerous production issues surrounding its Model 3. Musk said: “The company was bleeding money like crazy earlier this year and if we didn’t solve these problems in a very short period of time, we would die”. When asked how close the automaker was to running out of funds, Musk responded: “I would say within single-digit weeks”. In April, The Economist pointed out Tesla was not only burning through money at a prodigious rate, but needed more to fund further development, and service a $1.2 billion loan due in early 2019. Responding via his favourite medium, Twitter, Musk said: “The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obvious no need to raise money”. Musk even posted a series April Fools’ tweets joking about Tesla’s bankruptcy. After launching the Model 3 in the middle of 2017, the company went through almost a year of self-proclaimed “production hell” as it tried, failed and finally succeeded in meeting a production target of 5.000 Model 3s per week. According to Good Car Bad Car, 22,250 Model 3 sedans were sold in the US in September. With 17,750 said to be sold in October, the Model 3 was the 6th best selling passenger car in the States behind the Toyota Camry (26,914), Honda Accord (23,778), Honda Civic (22,450), Toyota Corolla (22,020), and Hyundai Elantra (18,312). Improved production and sales have even allowed the company to turn its first quarterly profit. Despite the company being in a better financial situation, it has still garnered more than its fair share of negative attention. Musk and Tesla were both fined US$20 million for making false claims funding had been secured to take the automaker private. Musk was also forced step down as chairman, and the company is under investigation by the FBI over its production targets. +++

+++ General Motors’ monumental announcement that it will close 3 car assembly plants in North America and slash its workforce will only partially close the gap between capacity and demand for the automaker’s sedans, according to a analysis of industry production and capacity data. Sales of traditional passenger cars in the UNITED STATES have been declining for the past 6 years and are still withering. After GM ends production next year at factories in Michigan, Ohio and Ontario, it will still have 4 U.S. car plants, all operating at less than 50 % of rated capacity, according to figures supplied by LMC Automotive. In comparison, Detroit-based rivals Ford and Fiat Chrysler Automobiles will have 1 car plant each in North America after 2019. The Detroit Three are facing rapidly dwindling demand for traditional passenger cars from U.S. consumers, many of whom have shifted to crossovers and trucks. Passenger cars accounted for 48 % of retail light-vehicle sales in the United States in 2014, according to market researchers at J.D. Power and Associates. This year, sedans will account for less than a third of light vehicle sales. That shift in turn has left most North American car plants operating far below their rated capacities, while many SUV and truck plants are running on overtime. The collapse in passenger-car demand is a challenge for nearly all automakers in the United States, including Toyota and Honda, which have the top-selling models in the compact and midsize car segments. Toyota executives said last month they are evaluating the company’s U.S. model lineup. But Toyota also plans to build the Corolla at a new $1.6 billion factory it is building in Alabama with partner Mazda. The obstacles facing GM in its plans to close more auto factories became apparent as U.S. President Donald Trump threatened to block payment of government electric vehicle subsidies to GM. While it is not certain that Trump unilaterally has the power to do that, he made it clear he intends to use his office to pressure the company to keep open a small car plant in Ohio that GM says will stop building vehicles in March. Asked whether GM’s plans to close factories and cut jobs might not solve the demand problem for its sedans, GM spokeswoman Kimberly Carpenter said: “We continuously look at our operations for opportunities to improve our efficiency and capacity utilization. We believe the actions announced yesterday move us in the right direction and we will continue to monitor the market and consumer trends and adjust accordingly”. GM executives have said they do not intend to abandon cars to the extent that Ford and FCA have. GM car plants that will remain open include Fairfax, Kansas, which builds the Chevrolet Malibu and Cadillac XT4. But that plant is operating at 48 % of capacity, well below the 80 % that GM Chief Executive Mary Barra is targeting as the average for North America. A GM plant in Lansing, Michigan, that builds the Cadillac ATS and CTS and Chevrolet Camaro is running at just 33 % capacity, while the GM Orion Township, Michigan, facility that builds the Chevrolet Bolt / Opel Ampera-e electric car and the Chevrolet Sonic subcompact runs at 34 % capacity. A Bowling Green, Kentucky, plant that builds the Chevrolet Corvette works at just 27 % of its potential output, according to LMC data. “Until GM gets more flexibility in its platforms, it will continue to have to play whack-a-mole with its plants as the market transitions, and it will happen again”, said LMC analyst Bill Rinna. In all, the 4 General Motors car plants that will remain open have a combined capacity of more than 800,000 vehicles a year, but are expected to produce only 360,000 cars this year, according to LMC. Industry analysts have said the general break-even point for running an assembly plant profitably is around 80 %. Barra said GM’s North American plants are running at 70 % capacity, including pick-up and SUV plants that are working overtime. Ford plans to end production in March of the Taurus at its Chicago plant, which also builds the Explorer and Aviator SUVs. That will leave the automaker with only one U.S. car plant, in Flat Rock, Michigan, which currently builds the Mustang and the Lincoln Continental. The Mustang is due for a mild redesign around 2021, but the Continental is scheduled to be phased out then, according to 2 sources familiar with the company’s plans. Flat Rock is running at just 49 % of capacity, but Ford has said it plans to add new products to the plant, including its first automated vehicle, in 2021. Fiat Chrysler still builds the full-size Chrysler 300 and Dodge Charger and Challenger at its Brampton, Ontario, plant. Demand for those large cars remains robust, and the plant is running at nearly 80 % capacity. +++

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