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Auto racing: Scott Dixon claims 1st career IndyCar win at Road America

Elkhart Lake, Wis. • Scott Dixon won the IndyCar race at Road America on Sunday to spoil the Team Penske party on the rural road course.

Dixon edged Josef Newgarden by 0.57 seconds to claim his first victory at Road America. It also gave the Chip Ganassi Racing veteran his first win since Watkins Glen in September.

Dixon’s 41st career victory moved him within one of tying Michael Andretti for third on the all-time list.

Ganassi has a chance for a weekend sweep. Kyle Larson, the NASCAR points leader, started on the pole at Sonoma in a Ganassi car.

Dixon’s No. 9 Honda held off Newgarden and the three other Penske drivers who started up front.

Article source: http://www.sltrib.com/sports/5441803-155/auto-racing-scott-dixon-claims-1st

Tips for Adding a Teenage Driver to Your Auto Insurance

But the impact of adding teenagers to a policy is still a jolt to families, especially those adding boys. Putting a male teenager on your insurance policy increased rates an average of 89 percent, compared with 66 percent for a female teenager, the analysis found.

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Ms. Adams said premiums increased when a teenager was added because, statistically, younger drivers — particularly boys — have more accidents than older, more experienced drivers, and file more insurance claims.

Nearly 1,900 drivers aged 15 to 20 died in car crashes in 2015, according to the National Highway Traffic Safety Administration, up 9 percent from 2014.

Motor vehicle crashes are the leading cause of death among teenagers, according to the Centers for Disease Control and Prevention.

As with most insurance costs, the impact of adding a teenager varies by state. Adding a teenager in Rhode Island bumps up premiums by more than 150 percent, while parents in Hawaii get about an 8 percent increase.

For the analysis, insuranceQuotes.com hired Quadrant Information Services, an insurance data firm, to calculate the price increase of adding a driver aged 16 to 19 to a family’s auto insurance policy. The averages are based on a hypothetical couple — a man and a woman, both 45 years old, married and employed — who each drive 12,000 miles each year and have good credit and driving records. The policy tested included $100,000 for injury liability, $300,000 for all injuries, a $500 deductible on collision and comprehensive coverage, and uninsured motorist coverage.

Here are some questions and answers about teenagers and auto insurance:

How can I reduce the cost of having a teenage driver on my policy?

Kathy Bernstein Harris, senior manager for teenage driving initiatives at the National Safety Council, a nonprofit, said that some insurers offered discounts for students who get good grades (even though it’s not necessarily clear that being a good student correlates with safer driving). Discounts are also often available for new drivers who take driver’s education classes.

Ms. Harris said the best way to reduce claims and hold costs down — and keep your child safe — was to set rules and spend time driving with teenagers and coaching them along, even after they pass their driver’s license tests. “Just getting a piece of plastic doesn’t mean they are totally prepared for the open road,” she said. “The first year of independent driving is the riskiest.”

Many state programs set restrictions on teenage drivers, such as curfews for night driving and limiting the number of other people, particularly other teenagers, who can ride in the car with them. Ms. Harris urges parents to follow such rules. “With every teen passenger you put in the car,” she said, the risk of a crash increases.

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The council’s DriveitHome website offers resources for parents and teenage drivers, including interactive safety tests.

Are some cars safer than others for teenagers to drive?

The Insurance Institute for Highway Safety each year publishes a list of safe, affordable cars for teenagers. In general, larger, heavier vehicles are best.

Ms. Harris suggests that parents not buy a new car specifically for their new teenage driver — or, if they do, that they make it clear that the car is the family’s car, rather than the teenage driver’s personal vehicle. By making the car a “family” car, she said, parents can better set rules for its use and talk about where their child is headed and who is expected to go along.

Also, she advises getting teenagers involved in researching the safety and price of a new car, as a way of teaching them lessons about budgeting, and emphasizing the need for safe driving habits.

Are there apps that can help reduce distracted driving?

Technology is emerging that can disable texting and social media on cellphones while the car is in motion. One system, Cellcontrol, recently was favorably reviewed by Consumer Reports.

The organization also offers other tips for reducing distracted driving and increasing safety for teenage drivers on its website.


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Article source: https://www.nytimes.com/2017/06/23/your-money/auto-insurance/tips-for-adding-a-teenage-driver-to-your-auto-insurance.html

Grand Theft Auto modding tool gets updated, is available again

The modding toolkit at the center of a dispute between its creators and Take-Two Interactive, which roiled the Grand Theft Auto PC community over the past two weeks, has received an update and is being distributed. It’s another sign that Take-Two is backing away from a hard-line stance on modding.

OpenIV got a small update, notes PC Gameer. It’s now build 907 of version 2.9, implementing “bug fixes and small improvements.” By itself that isn’t much of a development, except that OpenIV’s makers had taken the toolkit offline on June 14, after receiving what they said was a cease-and-desist demand from Take-Two’s legal representatives on June 5.

Take-Two owns Rockstar Games, which makes Grand Theft Auto (and Max Payne 3, which OpenIV can also mod). Rockstar, on Friday, stepped in with a statement saying it “believes in reasonable fan creativity,” and supports creators who “showcase their passion for our games.” On Friday, the studio/publisher said it went to its corporate parent and secured an agreement that Take-Two wouldn’t take legal action against Rockstar-made PC games, provided they follow certain rules.

That came after a week in which furious PC gamers staged an online protest, one component of which was bombarding Grand Theft Auto 5‘s Steam marketplace listing with negative reviews.

OpenIV has been in use for nearly 10 years and is responsible for most of the modding seen for Grand Theft Auto 4 and Grand Theft Auto 5. The original cease-and-desist letter had alleged OpenIV allowed “third parties to defeat security features of (Take-Two’s) software and modify that software in violation (of) Take-Two’s rights.”

Modifying online multiplayer — which OpenIV’s developers insist they never did, nor enabled — is still against Rockstar and Take-Two’s policies.

Clarification: Speaking to Motherboard, Yuriy Krivoruchko, OpenIV’s developer, said he had never developed mods for Grand Theft Auto Online but conceded that some parts of the toolkit could be used by others to mod that portion of Grand Theft Auto 5.

Article source: https://www.polygon.com/2017/6/25/15870154/grand-theft-auto-mod-toolkit-openiv-update

Ford’s Signal to the Auto World: Here Comes China

HONG KONG — After years of predictions that cars sold in the West would bear the “Made in China” label, the time has finally come.

Ford Motor Co.’s plans to build its popular Focus compact cars in China, rather than Michigan or Mexico, is a milestone in China’s automotive rise. Chinese auto industry leaders praised the move as long-awaited confirmation that the country’s factories have become as efficient and high-quality as those in the United States and Europe.

The question now is how political leaders greet the development, amid rising skepticism in the U.S. over Chinese trade policies and the benefits of free trade in general. Though the White House so far has been muted in its reaction to Ford’s move, President Donald Trump in particular was strongly critical of Chinese trade policies during his campaign last year. China’s high tariffs on imported cars and auto parts have already emerged as a potential trade issue.

“Ford’s moving production to China shows China’s competitiveness in manufacturing is continuously increasing and our industrial supply chain is improving,” said Cui Dongshu, the secretary-general of the China Passenger Car Association, a government-backed trade group in Beijing. “But this is obviously against Trump’s policies — it is quite complicated and may cause some friction in Sino-American trade in the future.”

China represents a competitive challenge and a profitable opportunity for U.S. carmakers.

China is already the world’s largest automaker, with annual car production roughly equal to that of the United States and Japan combined. Chinese players have long wanted to develop underused factories dotting major cities to increase production and export the excess.

For years, it has been a quixotic dream. Such factories tend to churn out lower-quality, domestic-brand rides that would not pass muster with American or European consumers.

But China is angling for a big share of the future. Beijing has put very heavy pressure on Western automakers to transfer their latest, most cutting-edge technology to China as a condition of doing business. Many companies, including Volkswagen, General Motors and Ford, have plans to shift more research and development to China, particularly around electric cars.

China has an increasingly global auto presence. General Motors began exporting the Buick Envision compact SUV to the United States last year, although the Envision is a much lower-volume model than the Focus. Volvo, which is owned by a Chinese company, started exporting S60 sedans from China to the United States in 2015, while Cadillac this spring started shipping its Shanghai-made CT6 Plug-in hybrid to the United States.

Ford’s decision will significantly ramp up the country’s car exports. The Focus would more than triple China’s exports of fully built cars to the United States.

As a manufacturing base, China holds strong appeal for Detroit’s automakers. Auto factory pay in China is similar or slightly higher than in Mexico at around $1,250 a month, including government-mandated benefits like contributions to savings funds with which workers can buy housing. Overtime adds roughly $300 a month. But that pay is much lower than in the United States, where workers earn several times as much even before overtime.

Auto parts are also much cheaper in China than in the United States, because labor tends to be a larger share of the cost than final assembly. The global auto parts industry has shifted much of its production to China, partly because of low costs and partly because China’s steep tariffs make it impossible for multinational manufacturers to compete in the Chinese market unless they produce in China.

And quality is high at Chinese factories run by Western carmakers.

Global automakers already have built some of their most modern factories in China. A Ford factory in Hangzhou has 650 robots. A somewhat smaller General Motors factory in Shanghai has 530 robots that make Cadillacs with all-aluminum bodies — one of the latest and toughest manufacturing challenges even in the West.

GM’s China-made Buick Envision ranks slightly above average in initial quality surveys of American consumers among 13 compact SUVs, according to J.D. Power and Associates, the international quality rating company. The top three concerns of the Envision’s U.S. buyers involved the ease of use of its voice recognition system and other consumer electronics — concerns indicating that American consumers were basically satisfied with the actual car.

Chinese domestic automakers still lag in quality surveys. But among the global brands, cars made in China come from assembly lines that are identical in almost every respect to factories in the West — except that the factories in China, because they are new, tend to be more automated. Jeff Cai, the general manager of the China automotive practice at J.D. Power, said that the relative newness of Chinese factories tended to balance out the limited experience and high turnover of Chinese workers.

“In terms of the building quality,” he said, “it’s pretty similar.”

Industry insiders fear that all the auto factory capacity will encourage China to increase exports if homegrown demand slows down. Thanks to a cut in sales taxes last year, car sales in China in 2016 grew by an amount almost equal to the entire Japanese market. That helped absorb some of China’s overcapacity. But with the partial expiration early this year of the sales tax cut, demand is starting to slow.

Ford’s sales in China in the first five months of this year were down 11 percent from the same period last year. But Sinead Phipps, a Ford spokeswoman, denied any connection to the new export plans.

“We’ve made the decision because it allows us to reduce global Focus production by one plant, improve the health of our Focus business, save $1 billion in investment costs and further improve our scale in China,” she said.

The Chinese government is so worried about overcapacity that in June it tightened the approval process for any further auto assembly plants. But automakers are still rushing partially built factories to completion.

(STORY CAN END HERE. OPTIONAL MATERIAL FOLLOWS.)

Ford’s decision could shift work away from American auto parts factories, which are heavily concentrated in Ohio, Indiana and southern Michigan. The Focus made in Michigan has 40 percent of its parts manufactured in the United States and another 26 percent in Mexico, where business activity tends to involve a lot of materials imported from the United States. By contrast, U.S. government data shows that only 2 percent of the Envision’s parts come from the United States.

Ford was a relative laggard in China compared with GM for many years. Today, it is increasingly part of an industry shift across the Pacific to China. Shortly before he was replaced last month as Ford’s chief executive, Mark Fields said in Shanghai, “You can see from our series of announcements, we are not holding back.”

Article source: http://www.nrtoday.com/ford-s-signal-to-the-auto-world-here-comes-china/article_6b53fa5d-2ca6-5c88-8a9c-1fa1e1895a9b.html

Suspect arrested in auto burglaries, theft – Sarasota Herald-Tribune – Sarasota Herald

 MANATEE COUNTY— Tyshana S. Douglas, 19, has been arrested in connection with a rash of recent vehicle burglaries and auto thefts, the Manatee County Sheriff’s Office reports. Douglas has been charged with grand theft auto.

Manatee County detectives are investigating several vehicle burglaries that occurred between June 23 and 24. Multiple personal items were removed from unlocked vehicles at various locations in the 4800 block of Glenbrooke Drive, the 8100 block of Glenbrooke Court, and the 8100 block of Glenbrooke Place.  Each time detectives found no sign of forced entry.

In another incident a credit card was stolen from a vehicle in the 4600 block of Glenbrooke Terrace and then used at a Shell gas station in the 8000 block of Lockwood Ridge Road. The black female captured by security cameras is believed to be Douglas. One of several possible suspects involved with the burglaries.  

Detectives are also looking for three black males, 16-25 years of age, one with a light complexion  and driving a jeep Wrangler.

 The suspects entered several vehicles, and one dwelling and stole two vehicles. Suspects entered a vehicle in the 4200 block of Charles Drive removing personal items. Two attempted vehicle burglaries also occurred on that street. Two vehicles were entered at another residence, taking personal items. Another vehicle was burglarized in the 7800 block of Ontario Circle, and two more in 7700 block of Geneva Lane. One vehicle had a key in it and was stolen, a 2017 Gray Ford Escape. 

 Anyone with information should contact the Sheriff’sOffice at 941-747-3011 or Crime Stoppers at 866-634-TIPS.

Article source: http://www.heraldtribune.com/news/20170624/suspect-arrested-in-auto-burglaries-theft

Uber and Tesla are showing ominous signs that the era of auto disruption may be about to come to an abrupt end


Elon Musk
Tesla CEO Elon
Musk.

TED

•Uber’s CEO departed and Tesla’s head of Autopilot left
in the same week.

•The leading disruptors of the auto industry
are experiencing severe challenges.

•Investors and tech enthusiasts have insisted that
transportation is about to undergo profound change — but maybe
that won’t happen.

The much-discussed disruption of the traditional auto industry
was itself disrupted this past week, as Uber CEO Travis Kalanick
stepped down amid a storm of scandal and Tesla said goodbye to
the leader of its Autopilot self-driving program after just six
months.

The Uber situation is far more serious; at almost $70 billion,
the ride-hailing startup is valued more steeply than any
company on Earth. Tesla Autopilot is important, and CEO Elon Musk
has pledged that a self-driving vehicle built by his 13-year-old
firm will make a Los-Angeles-to-New-York run by the end of the
year.

But job one for Tesla is to launch the Model 3 mass-market car
and get it to customers in substantial numbers by  2018
to vindicate a stock price that’s risen over 70% since the
beginning of the year. Autopilot is cool, but also something of a
sideshow as Tesla works to prove that a $35,000 all-electric car
really can capture the hearts and minds of millions of buyers.

In this sense, Tesla is operating just like any other automaker:
build the cars, sell the cars, repeat. This is an often
overlooked aspect of Tesla’s business — which is baffling, as
it’s the core business of every car company in existence. The
dynamics of this industry are well understood. 

Maturing disruptors


Travis Kalanick
Former Uber CEO Travis Kalanick.
Money Sharma/AFP/Getty Images

So Tesla, after more than a decade of profit-free operations and
limited growth, must be up to something far larger. It must be a
daring disrupter of the conventional car business as well as an
energy company, a solar company, a dealer of networked
transportation — all the buzzy concepts that currently captivate
Silicon Valley and the tech elite.

That thinking stopped making sense when Uber began its rapid,
monumental growth trajectory. Here was a startup that was
effectively just an iPhone app that connected freelance drivers
with people in cities who wanted rides and weren’t happy with
taxis.

Unlike Tesla, Uber didn’t need a factory or a workforce that was
paid established wages, or engineers and designers who could
sculpt aluminum and develop powerful batteries and construct
100,000 complicated machines. Uber was almost preposterously
lightweight, but with a scale that defied belief. The only way
for Tesla to match that would have been to build and sell so many
cars that it controlled the entire auto
industry globally.

But because Uber was so lean and mean, it had no way to create a
vast competitive moat; a pack of software engineers could copy
Uber’s business and launch a competitor without much difficulty.
So Uber and Kalanick had to both fight a winner-take-all battle
with the Lyfts of the world and continue to raise enormous sums
of money to support the company’s spending levels. Uber
dominated, but the price of that domination was hundreds of
millions in quarterly losses.

Overblown expectations


Tesla Detroit sales vs market capAndy Kiersz/Business Insider

This vast, dauntingly valued company is now leaderless, with no
CEO, no COO, and no CFO. Investors have sunk billions into Uber
and currently, they have no clear path to exit their risk
with an acceptable return. The entire firm is in the
unprecedented position of requiring a crisis turnaround when just
a year ago it looked as if it could be worth $100 billion.

So the mega-disrupter is in big trouble, while the previous big
disrupter is finding it challenging to continually recast its
disruptive narrative. Tesla, as a plucky electric carmaker, was
exciting ten years ago. But no one can be sure if that business
model wipes out the traditional auto industry, in the manner
that Netflix obliterated Blockbuster. 

The obvious conclusion to draw from Uber’s crisis and Tesla’s
Autopilot struggles is that the disruption of transportation so
enthusiastically cheered by the tech industry was ridiculously
overblown. And it wasn’t confined to Tesla and Uber. 

Despite Waymo’s partnership with Lyft, the self-driving project
isn’t closer to commercialization now than it was three years
ago. And the Apple Car — “Project Titan” — has pivoted numerous
times, always vaguely and secretively. 

Meanwhile, the traditional car industry continues to set sales
records, although it now appears that a booming US market is
plateauing. The record sales are coming from electric cars or
self-driving vehicles, either — they’re coming from highly
profitable, old-school pickups and SUVs. 

No dramatic path to the future


Chevrolet Bolt 1
GM’s all-electric Chevy Bolt.
Hollis Johnson

The legacy carmakers have found themselves, ironically, in a far
better disruptive position that the alleged disruptors. Ford, GM,
BMW, Toyota, and others can disrupt themselves while still
funding their operations with the conventional business. The
level of disruption just depends on how much cash the familiar
old business is throwing off.

The disruptors, committed as they are to a market-remaking idea,
have to disrupt … or else. Uber and Tesla are not entirely in
that position. Tesla has notable, if not massive, sales to look
forward to, given that the Model 3 has racked up 400,00o
pre-orders and Tesla is doing business in Europe and China. And
Uber stands to be the biggest player in a ride-hailing oligopoly,
sharing the space with Lyft and various local and regional
competitors.

But the events of the past week do suggest the vast, industry
remaking disruption is collapsing, probably under the weight of
outsized expectations. No one should be needlessly disappointed.
The path to the future is rarely so dramatic.

Article source: http://www.businessinsider.com/uber-tesla-waymo-struggle-to-disrupt-auto-industry-2017-6

Takata Bankruptcy Would Cloud Auto Industry’s Biggest Recall

The expected bankruptcy of troubled air-bag maker Takata Corp. isn’t just a crisis for its employees and suppliers. It also throws a wild card into one of the biggest and most complicated recalls in automotive history.

The Japan-based auto supplier has pledged to recall and replace tens of millions of defective air-bag inflators used by 19 car and truck makers around the world, from Tesla Inc. to Toyota Motor Corp. A filing to restructure in U.S. bankruptcy court, which could come as early as Monday according to people familiar with the matter, doesn’t relieve a manufacturer of recall responsibilities. However, should its financial assets be exhausted before all the work is done, carmakers may have to cover the difference.

U.S. bankruptcy laws permit a would-be buyer to acquire Takata’s desirable assets, but not necessarily assume unwanted liabilities — including recall obligations, according to Robert Rasmussen, a University of Southern California law professor specializing in corporate reorganizations.

Funds raised by an asset sale would go toward funding Takata’s production of replacement parts, Rasmussen said. U.S. law treats a manufacturer’s recall obligations in bankruptcy as a claim of the U.S. government and they receive priority “to ensure that consumers are adequately protected from any safety defect” in a manufacturer’s products, according to statute.

“The big risk,” Rasmussen said, “is how much are the assets worth versus what’s the cost to do the replacements.”

Read more: Takata Plunges 55% as Investors Anticipate Bankruptcy Filing

Scott Upham, president of Valient Market Research, estimates that automakers and suppliers globally face $5 billion in future costs tied to the recalls, about $2 billion of which can be tied to Takata. He estimates a Takata asset sale will generate about $1.5 billion to $2 billion.

“There’s not enough money,” Upham said. Automakers may have to cover any shortfall, he said.

The car companies have already shifted business away from Takata and toward rivals for about 70 percent of the parts to repair the millions of vehicles recalled for the company’s defective airbag inflators, which can explode with too much force and spray drivers and passengers with metal and plastic shards. That should assure enough new inflators for the estimated 100 million defective ones forecast to be replaced worldwide.

Only 38 percent of the 43 million air bag inflators under recall in the U.S. had been repaired as of May 26, according to data on the U.S. Department of Transportation’s National Highway Traffic Safety Administration website. In Japan, 73 percent of the close to 19 million air bags under recall have been repaired, a spokesman at the country’s transport ministry said this month.

Prior story: Takata Rises as Carmakers to Pay $553 Million Over Recall Losses

At least 17 deaths have been linked to the devices worldwide. Mounting liabilities associated with the faulty airbags have forced Takata to seek a buyer that would see it through a costly restructuring process. A Takata steering committee has recommended Key Safety Systems Inc. — the U.S. air-bag maker owned by China’s Ningbo Joyson Electronic Corp. — as the preferred bidder, and bankruptcy filings would bring the Japanese company a step closer to a sale.

The challenges for the acquirer are manifold. Takata posted its third-straight annual loss even without including the full costs of repairing millions of air bags, which automakers are now paying for. It faces a talent exodus and auto industry distrust.

“It would be hard for Key Safety Systems to put in huge amounts of money if there’s no guarantee against unexpected liabilities, after any deal,” said Mitsuhiro Harada, a researcher at Tokyo Shoko Research. “Takata is making money in non-airbag operations, so if they can drastically cut recall-related debt through bankruptcy, they can surely revive soon.”

Read more: Takata to Pay $1 Billion, Plead Guilty in U.S. Air Bag Probe

Automakers have avoided supply disruptions by sourcing replacement parts from Takata competitors Autoliv Inc., ZF-TRW and Daicel Corp. Autoliv, for example, has already provided 15 million replacement inflators and has orders for another 15 million into 2019, company spokesman Thomas Jonsson said.

“We are working with suppliers to ensure a steady supply of replacement inflators for our customers,” said Kelly Stefanich, a Toyota spokeswoman in Princeton, Indiana. “We don’t anticipate any supply disruptions at this time.” Honda Chief Executive Officer Takahiro Hachigo said at a June 16 media briefing that the automaker hasn’t heard any specifics about the Takata bankruptcy plan.

The Japanese government has said it’s focused on completing the recall process and ensuring there’s no disruption of the supply chain.

In the U.S., NHTSA has been coordinating the pace of recalls and the flow of parts under a legally-binding 2015 agreement with Takata and 19 companies. That pact, NHTSA said, “is designed to deal with future contingencies, including the possibility of additional recalls, new information about the cause of the ruptures, or interruptions in the supply of replacement inflators.”

“The automakers, the government, Key Safety Systems and Takata will come to an agreement to keep supplies flowing,” Upham said. “The No. 1 priority is the safety of the driving public, and I think everybody realizes that.”

Why It Seems Like Open Season on Car Companies: QuickTake QA

Honda first started recalling Accord and Civic models in 2008 due to the flaw that may end up being Takata’s undoing. The supplier’s inflators use ammonium nitrate propellant that can be rendered unstable after long-term exposure to heat and humidity. That same year, Takata began adding a drying agent to its propellant formula in an attempt to fix the problem. It has until the end of 2019 to prove to U.S. regulators that those air bags are safe.

Honda now uses no Takata-sourced inflators for recall repairs in the U.S., and none of the company’s new vehicles in mass production worldwide use Takata inflators with ammonium nitrate propellant, said Chris Martin, a Honda spokesman in the U.S..

Opting for bankruptcy protection in Japan and the U.S., as opposed to a court-led restructuring, should ensure there’s “minimum negative impact to the airbag supply chain for automakers,” said Takeshi Miyao, an analyst at Tokyo-based market researcher Carnorama. He predicts the procedure would take two months in a best-case scenario, but would more likely need half a year.

    Article source: https://www.bloomberg.com/news/articles/2017-06-23/takata-bankruptcy-would-cloud-auto-industry-s-biggest-recall

How Ford’s decision to build cars in China could impact the auto world

Ford Motor Co.’s plans to build its popular Focus compact cars in China, rather than Michigan or Mexico, is a milestone in China’s automotive rise. Chinese auto industry leaders praised the move as long-awaited confirmation that the country’s factories have become as efficient and high-quality as those in the United States and Europe.

The question now is how political leaders greet the development, amid rising skepticism in the U.S. over Chinese trade policies and the benefits of free trade in general. Though the White House so far has been muted in its reaction to Ford’s move, President Donald Trump in particular was strongly critical of Chinese trade policies during his campaign last year. China’s high tariffs on imported cars and auto parts have already emerged as a potential trade issue.

“Ford’s moving production to China shows China’s competitiveness in manufacturing is continuously increasing and our industrial supply chain is improving,” said Cui Dongshu, the secretary-general of the China Passenger Car Association, a government-backed trade group in Beijing. “But this is obviously against Trump’s policies — it is quite complicated and may cause some friction in Sino-American trade in the future.”

China represents a competitive challenge and a profitable opportunity for U.S. carmakers.

China is already the world’s largest automaker, with annual car production roughly equal to that of the United States and Japan combined. Chinese players have long wanted to develop underused factories dotting major cities to increase production and export the excess.

For years, it has been a quixotic dream. Such factories tend to churn out lower-quality, domestic-brand rides that would not pass muster with American or European consumers.

But China is angling for a big share of the future. Beijing has put very heavy pressure on Western automakers to transfer their latest, most cutting-edge technology to China as a condition of doing business. Many companies, including Volkswagen, General Motors and Ford, have plans to shift more research and development to China, particularly around electric cars.

China has an increasingly global auto presence. General Motors began exporting the Buick Envision compact SUV to the United States last year, although the Envision is a much lower-volume model than the Focus. Volvo, which is owned by a Chinese company, started exporting S60 sedans from China to the United States in 2015, while Cadillac this spring started shipping its Shanghai-made CT6 Plug-in hybrid to the United States.

Ford’s decision will significantly ramp up the country’s car exports. The Focus would more than triple China’s exports of fully built cars to the United States.

As a manufacturing base, China holds strong appeal for Detroit’s automakers. Auto factory pay in China is similar or slightly higher than in Mexico at around $1,250 a month, including government-mandated benefits like contributions to savings funds with which workers can buy housing. Overtime adds roughly $300 a month. But that pay is much lower than in the United States, where workers earn several times as much even before overtime.

Auto parts are also much cheaper in China than in the United States, because labor tends to be a larger share of the cost than final assembly. The global auto parts industry has shifted much of its production to China, partly because of low costs and partly because China’s steep tariffs make it impossible for multinational manufacturers to compete in the Chinese market unless they produce in China.

And quality is high at Chinese factories run by Western carmakers.

Global automakers already have built some of their most modern factories in China. A Ford factory in Hangzhou has 650 robots. A somewhat smaller General Motors factory in Shanghai has 530 robots that make Cadillacs with all-aluminum bodies — one of the latest and toughest manufacturing challenges even in the West.

GM’s China-made Buick Envision ranks slightly above average in initial quality surveys of American consumers among 13 compact SUVs, according to J.D. Power and Associates, the international quality rating company. The top three concerns of the Envision’s U.S. buyers involved the ease of use of its voice recognition system and other consumer electronics — concerns indicating that American consumers were basically satisfied with the actual car.

Chinese domestic automakers still lag in quality surveys. But among the global brands, cars made in China come from assembly lines that are identical in almost every respect to factories in the West — except that the factories in China, because they are new, tend to be more automated. Jeff Cai, the general manager of the China automotive practice at J.D. Power, said that the relative newness of Chinese factories tended to balance out the limited experience and high turnover of Chinese workers.

“In terms of the building quality,” he said, “it’s pretty similar.”

Industry insiders fear that all the auto factory capacity will encourage China to increase exports if homegrown demand slows down. Thanks to a cut in sales taxes last year, car sales in China in 2016 grew by an amount almost equal to the entire Japanese market. That helped absorb some of China’s overcapacity. But with the partial expiration early this year of the sales tax cut, demand is starting to slow.

Ford’s sales in China in the first five months of this year were down 11 percent from the same period last year. But Sinead Phipps, a Ford spokeswoman, denied any connection to the new export plans.

“We’ve made the decision because it allows us to reduce global Focus production by one plant, improve the health of our Focus business, save $1 billion in investment costs and further improve our scale in China,” she said.

The Chinese government is so worried about overcapacity that in June it tightened the approval process for any further auto assembly plants. But automakers are still rushing partially built factories to completion.

Ford’s decision could shift work away from American auto parts factories, which are heavily concentrated in Ohio, Indiana and southern Michigan. The Focus made in Michigan has 40 percent of its parts manufactured in the United States and another 26 percent in Mexico, where business activity tends to involve a lot of materials imported from the United States. By contrast, U.S. government data shows that only 2 percent of the Envision’s parts come from the United States.

Ford was a relative laggard in China compared with GM for many years. Today, it is increasingly part of an industry shift across the Pacific to China. Shortly before he was replaced last month as Ford’s chief executive, Mark Fields said in Shanghai, “You can see from our series of announcements, we are not holding back.”

Article source: https://www.boston.com/cars/car-news/2017/06/23/how-fords-decision-to-build-cars-in-china-could-impact-the-auto-world

Trump’s job promises face challenge in auto sector

President Trump’s promises to revive the struggling American manufacturing industry faces new headwinds as the automotive sector, the largest driver of manufacturing jobs, announces thousands of new layoffs. 

The layoffs come as the auto industry faces declining growth after a post-recession rebound.

In less than a year, Ford has said it will cut as many as 1,400 jobs. General Motors has cut production at four U.S. assembly lines, costing 4,400 workers their jobs. Fiat Chrysler laid off another 1,300 workers at their assembly line in Detroit.

Mark Muro, a senior fellow at the Brookings Institution’s Metropolitan Policy Program, estimates that auto jobs represented 60 to 80 percent of overall manufacturing job growth after the recession. That growth came as Americans made auto purchases they had delayed during the recession, though now those catch-up sales have plateaued.

“I think that when we talk about making American great again, a lot of that is tied up in how auto manufacturing is doing,” Muro said. “This next period, auto will not drive the overall manufacturing [sector], will not generate significant manufacturing employment.

Beyond those announced layoffs, Muro’s research shows the auto industry has shed jobs in 45 of the nation’s 100 largest metropolitan areas in the last year. 

“The question is, what’s going to happen now?” Muro asked. “One possibility is auto goes flat and nothing else really picks up, so we really have a very tough manufacturing story for the next few years.”

When Ford announced last year that it would not move production of its Ford Focus to Mexico, Trump hailed the decision as a victory. He didn’t offer a comment this week when Ford said it would move production of its Focus model to China, a decision that could hurt the broader American auto sector. 

Industry analysts say automotive jobs that move to Mexico still benefit the United States, where parts makers still employ tens of thousands of people. Automotive manufacturing in China is much less likely to rely on American-made parts.

Cyclical slowdowns are normal in an industry that has ebbed and flowed for generations. 

“We’ve had an extraordinary rebound in auto sales, to essentially record levels, and so nobody should be surprised if the industry softens a bit,” said Steven Rattner, who led the Obama administration’s task force on the auto industry at the height of the recession. “It’s a cyclical industry, and sometimes people buy more cars, and sometimes they buy fewer cars.”

Yet some industry analysts believe this slowdown presages a broader shift in the thinking of major auto companies. 

They say that trends affecting the industry are likely to be a drag on manufacturing, though U.S. companies are likely to increase their hiring in other fields.

With the prevalence of ride-hailing companies like Uber and Lyft, and the nascent beginnings of self-driving automobiles, families are likely to have less use for multiple vehicles. 

Auto companies “have always been a personal transportation provider, and it’s just that the nature of how that is provided is shifting, from an ownership platform to none of us own a car,” said Tony Hughes, managing director at Moody’s Analytics’ economics division. “But there is this one car that’s owned by these people called Uber or Lyft.”

Auto companies are making investments in different, more technology-oriented fields necessary to compete in the self-driving space. These fields may not have the same need for manufacturing jobs.

Reid Wilk, an auto industry advisor for Strategy, the strategic consulting team affiliated with PwC, said auto companies are focusing on things like artificial intelligence software.

“There is a battle for talent across industries in that type of space, and we see aggressive hiring globally in the auto industry,” Wilk said. “The net, at least in terms of the product development and innovation space, is a plus.”

By shifting resources from manufacturing positions to technology jobs, companies are likely to rely on smaller workforces, Rattner said.

“Technology companies simply don’t use the same amount of labor as manufacturers do, so you don’t get a one-for-one replacement,” he said.

The shift toward technology is also likely to change the types of vehicles rolling off assembly lines, industry analysts said. As ride-sharing becomes an increasing proportion of the auto market, companies are likely to craft more homogenous vehicles, in the same way the taxi industry largely uses standardized types of vehicles. 

The auto industry today makes much of its money on specialized vehicles for specific markets: Smaller sports cars and larger pickup trucks do particularly well in the American market.

“If the number of journeys taken by commuters in homogenous driverless ride-shares increases, it’s sort of like the monopoly profits enjoyed by the auto industry selling custom niche products to niche clientele will reduce,” Hughes said. “The biggest threat to the auto industry is that the nature of those vehicles will be much more homogenous.”

The rise of driverless vehicles and ride-hailing companies represents “a fairly transformational way in which people use their cars,” Rattner said. “That means fewer cars, period, and that means fewer jobs. And that won’t be offset by technology jobs.”

CORRECTION: An initial version of this story inaccurately described job cuts at Ford. The company expects to cut 1,400 jobs. 

 

Article source: http://thehill.com/homenews/state-watch/339055-trumps-job-promises-face-challenge-in-auto-sector

IRS investigating auto sales lots on east side – WISH

INDIAINAPOLIS (WISH) — IRS agents are investigating at least two auto sales lots on the city’s east side.

Scott Brown with IRS criminal investigations said Thursday that special agents are at the car lots with Indianapolis Metropolitan Police Department officers assisting the federal agency.

Investigators are at Bulls Auto Sales, 2302 E. Washington St., and Chicago Auto Sales, 2233 E. Washington St. The car lots are on Washington Street between State Avenue and Rural Street.

Brown said the IRS will provide additional information when it is available, but was unable to comment further on the investigation.

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Article source: http://wishtv.com/2017/06/22/irs-investigating-2-auto-sales-lots-on-east-side/