UAW filing string of charges over Tesla’s Fremont plant, Ford faces set of challenges for profit and electrification

Tesla vs. UAW:  Labor relations are getting worse between Tesla Inc. and its factory workers in Fremont, Calif., which the UAW is using to file a string of unfair labor practice charges with the National Labor Relations Board. As was reported last week, conditions have been difficult for management and labor in Fremont as Tesla ramps up the Model 3 production line to try and reach goals that had been set last year. The UAW complaints may present another challenge for Tesla management to overcome to reach these targets and retain a stable workforce. The union conflict had been publicized in February 2017 when Tesla employee Jose Moran posted a blog article detailing harsh working conditions. Moran said that some of these workers had contacted the union because of it. In October, Tesla fired about 700 workers, which CEO Elon Musk said was part of routine performance reviews. Volkswagen has faced similar efforts from the UAW to organize its plant in Chattanooga. The union lost a vote in 2014 to unionize factory employees, but has successfully organized a group within the plant to stay with it. Workers in the greater Bay Area, where Fremont is based, have been known to be more supportive of unions than in other parts of the country; but the UAW and all the other major unions in the U.S. have been losing support and membership for several decades. Convincing a majority of the workforce to bring in the union is very difficult to carry out.

Nordic region strong in EV presence:  A new report from International Energy Agency recognizes the Nordic region (Denmark, Finland, Iceland, Norway, and Sweden) for taking the global lead on electric vehicle adoption. With nearly 250,000 electric cars sold in the region by the end of 2017, the five countries represent about 8% of the total number of these vehicles that have been sold around the world. Norway, Iceland, and Sweden have the highest ratios of EVs per person in the world. Norway leads the way with a 39% market share of electric car sales, the highest globally, and the Nordic region follows behind China and the U.S. as the third largest EV market for sales. Policy support has been behind much of the growth, according the IEA report. Successful programs have included measures reducing the purchase price of EVs, tax cutes, local incentives that exempt on road-use charges and parking fees, and policy support for the the charging infrastructure.

Ford CEO facing performance pressure:  Ford’s announcement last week that it will be taking on Toyota as the U.S. leader in hybrid sales comes at a time when Ford CEO Jim Hackett is being pressured to lead the company through a transition over to more profitable trucks and crossovers, electrification, and smart vehicle technologies. Last week, Ford said it will be replacing more than 75% of its North American lineup and adding four nameplates in the next two years. By 2020, the automaker hopes to see pickups, utilities, and vans making up 86% of its sales, up from about 70% today. The automaker will be selling eight utilities in North America, up from six today.

Ford says it will be offering a hybrid variant — either a traditional hybrid, a plug-in hybrid or both — on every new utility it adds or redesigns going forward. The automaker expects to go from its current spot at No. 2 in hybrid sales to taking away the top spot from Toyota by 2021.

The automaker’s corporate moves have been aimed at refining its financial and market strength in the U.S. market along with its global presence. The global strategy has been heightened by China’s booming auto market and that government’s push for new energy vehicles.

Taking a look at its current sales in the U.S. vehicles shows that the company has a long way to go for hybrids, plug-in hybrids, and all-electric vehicles. As for Toyota’s U.S. electrified vehicles, the company sold 3,889 Prius Liftbacks in February. For the year, it has sold 7,900 in the U.S., slightly edging out the Ford Fusion Hybrid. The Toyota Prius C is at 1,527 and the Prius V is at 1,040 vehicles sold for the year. The Prius Prime plug-in hybrid has so far sold 3,546 units.

Ford is discontinuing the C-Max hatchback after six years on the U.S. market. U.S. production for the C-Max Hybrid will end in mid-2018, according to Automotive News, and production for the C-Max Energi plug-in hybrid model has already ended. The C-Max has been the automaker’s worst-selling mass-market U.S. nameplate.

Analysts and shareholders have kept the pressure on Ford to improve financial and stock performance. The company has been accused of being too reliant on low-margin car models and outdated SUVs.

Fiat Chrysler Automobiles CEO Sergio Marchionne is thought to have tipped the auto industry more toward trucks with praise he’s received for killing the Dodge Dart and Chrysler 200 and emphasizing the Jeep SUV and Ram pickup. That’s helped FCA see its profits rise, which has grabbed attention with groups of shareholders.

The Ford Fusion and Chevrolet Impala may be pulled off assembly lines as the truck switchover continues. That would be ironic on the electrified vehicle side. Ford’s Fusion Hybrid and Fusion Energi plug-in hybrid have been fairly strong in U.S. sales.

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