1929 Ford Model A Coupe on 2040-cars

Auto blog

The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

V8-powered 2022 Ford F-150 Raptor R spied testing alongside Ram TRX

Spy photographers captured Ford engineers testing what appears to be a 2022 F-150 Raptor R alongside a Ram TRX this week, giving us a sneak preview of the first major battle in the coming war for super-pickup dominance.  Ford has remained tight-lipped about the Raptor R's performance specs. We know only that it will be powered by a V8 (likely a variant of the 760-horsepower, supercharged 5.2-liter unit from the Ford Mustang Shelby GT500), and that it's due to break cover some time later this year. Given that the 702-horsepower Ram TRX will be the Raptor R's only competition (and pretty much the only reason it exists in the first place), Ford's decision to benchmark the fast Ram is a bit of a no-brainer.  The Blue Oval's performance engineers have years of practice when it comes to building high-performance off-road trucks, so despite Ram's first-strike advantage and Hellcat trump card, the TRX might actually be the underdog in this fight. Why? Well, based on what we've seen of the EcoBoost-powered 2021 Raptor so far, it should weigh at least 500-600 pounds less than the TRX, and while we expect that gap to shrink with the addition of the bigger engine, it's likely that it will still favor Ford, and perhaps significantly.  While the larger, supercharged V8 will certainly weigh more than the EcoBoost V6, it's still an all-aluminum engine (all SRT motors are based on cast-iron blocks) and Ford still has the advantage of its lightweight body panels. There will likely be more to the Raptor R's chassis modifications than a new set of engine mounting points, since the existing Raptor was not engineered to handle an 800-horsepower engine, but even with the chassis modifications necessary to handle that power, we expect the Raptor R to be the featherweight of the two.  Since Ford plans to get the Raptor R into production for the 2022 model year, we shouldn't have to wait much longer to find out just exactly how it shapes up against Ram's big dinosaur. Stay tuned. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

The UAW's 'record contract' hinges on pensions, battery plants

DETROIT - After nearly four weeks of disruptive strikes and hard bargaining, the United Auto Workers and the Detroit Three automakers have edged closer to a deal that could offer record-setting wage gains for nearly 150,000 U.S. workers. General Motors, Ford Motor and Chrysler parent Stellantis have all agreed to raise base wages by between 20% and 23% over a four-year deal, according to union and company statements. Ford and Stellantis have agreed to reinstate cost-of-living adjustments, or COLA. The companies have offered to boost pay for temporary workers and give them a faster path to full-time, full-wage status. All three have proposed slashing the time it takes a new hire to get to the top UAW pay rate. The progress in contract talks follows the first-ever simultaneous strike by the UAW against Detroit's Big Three automakers. The union began the strike on Sept. 15 in hopes of forcing a better deal from each major automaker. But coming close to a deal is not the same thing as reaching a deal. Big obstacles remain on at least two major UAW demands: restoring the retirement security provided by pre-2007 defined benefit pension plans, and covering present and future joint- venture electric vehicle battery plants under the union's master contracts with the automakers. On retirement, none of the automakers has agreed to restore pre-2007 defined-benefit pension plans for workers hired after 2007. Doing so could force the automakers to again burden their balance sheets with multibillion-dollar liabilities. GM and the former Chrysler unloaded most of those liabilities in their 2009 bankruptcies. The union and automakers have explored an approach to providing more income security by offering annuities as an investment option in their company-sponsored 401(k) savings plans, people familiar with the discussions said. Stellantis referred to an annuity option as part of a more generous 401(k) proposal on Sept. 22. Annuities or similar instruments could give UAW retirees assurance of fixed, predictable payouts less dependent on stock market ups and downs, experts said. Recent changes in federal law have removed obstacles to including annuities as a feature of corporate 401(k) plans, said Olivia Mitchell, a professor at the University of Pennsylvania Wharton School and an expert on pensions and retirement. "Retirees want a way to be assured they won't run out of money," Mitchell said.