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Jayski.com: Auto Club Speedway Weekend Preview

Larson attempts to extend points lead at Auto Club, notch first win

Kyle Larson achieved a couple of “firsts” when he notched his third straight runner-up in last weekend’s race at Phoenix. He became the first NASCAR Drive for Diversity alum to top the points standings, as well as the first Chip Ganassi Racing driver to lead the standings this late in the season since 2002.

Monster Energy NASCAR Cup Series Auto Club Race Info

The Monster Energy NASCAR Cup Series race at Auto Club Speedway is Sunday, March 26. Entry List, Schedule, TV, Tire Notes and more….Green flag: 3:50pm/et.

On Sunday, he’ll attempt to notch his first win of the season in the Auto Club 400 at Auto Club Speedway in Fontana, California (3:30 p.m. ET on FOX) – the third and final stop of the Monster Energy NASCAR Cup Series’ “NASCAR Goes West.”

“It’s weird running all these seconds,” Larson said. “It took me, like, three years to finish second in sprint cars. Now I finish second like every week, so… a little weird, but maybe we’ll turn them into wins soon.”

Larson, who at 24 years, seventh months old, is the sixth-youngest points leader in series history, has come close to earning that elusive win in almost every race this season. He led on the final lap of the Daytona 500 before running out of gas, paced the field at Atlanta with four laps left before Brad Keselowski passed him, and almost tracked down Ryan Newman during the two-lap overtime shootout at Phoenix.

The #42 Chevrolet driver claims finishes of second, 26th and 39th in three career starts at Auto Club. He grew up in Elk Grove, California, a 6.5-mile drive from the two-mile track.

“(Auto Club) is a fun race track,” Larson said. “It’s super wide, really slick, lots of lanes to choose from. The seams play a big part in finding grip. It’s somewhat close to home for me. I get to see some old race fans or sprint car fans and friends and stuff. I enjoy going there.”

Allgaier goes for second straight win after ending drought

Justin Allgaier ended an 80-race winless drought by visiting Victory Lane in last Saturday’s DC Solar 200 at Phoenix.

It was his first checkered flag in the NASCAR XFINITY Series since Aug. 18, 2012 at Circuit Gilles Villeneuve in Montréal.

Allgaier hopes the wins begin to pile up, starting with Saturday’s Service King 300 at Auto Club Speedway (4 p.m. ET on FS1).

The #7 JR Motorsports Chevrolet driver has three top 10s and an average finish of 14.0 in eight career starts at the two-mile track.

“I’m very much looking forward to going to Auto Club Speedway,” Allgaier said. “It’s fun, it’s fast and it’s slick. I think that when you add those three words together it makes for great racing.”

Auto Club Race Weekend Preview

Monster Energy NASCAR Cup Series
Race: Auto Club 400
Place: Auto Club Speedway
Date and Time: Sunday, March 26 at 3:30 p.m. ET
Tune-in: FOX, MRN, SiriusXM NASCAR Radio
Distance: 400 miles (200 laps); Stage 1 (Ends on lap 60),
Stage 2 (Ends on lap 120), Final Stage (Ends on lap 200)
What to Watch For: Fourteen-time Most Popular Driver Dale Earnhardt Jr. makes his 600th career start. … Ryan Newman goes for his second straight victory after snapping a 127-race winless streak at Phoenix last weekend. … Sunoco Rookie of the Year contenders Daniel Suarez and Erik Jones hope to continue their momentum after posting career-high finishes of seventh and eighth, respectively, at Phoenix. … Defending Auto Club winner Jimmie Johnson tries for his track-record seventh win at Auto Club Speedway.

NASCAR XFINITY Series
Race: Service King 300
Place: Auto Club Speedway
Date and Time: Saturday, March 25 at 4 p.m. ET
Tune-in: FS1, MRN, SiriusXM NASCAR Radio
Distance: 300 miles (150 laps); Stage 1 (Ends on lap 35),
Stage 2 (Ends on lap 70), Final Stage (Ends on lap 150)
What to Watch For: Elliott Sadler attempts to grow his points lead. He currently holds an 11-point advantage over second-place William Byron. … A youth movement continues to sweep through the NASCAR XFINITY Series. The average age of the top-12 drivers in the points standings is 26 years old. … Rookie sensation William Byron goes for his fourth top-10 finish in the first five races of the season. … Californians Ryan Reed, Cole Custer, Kyle Larson and Casey Mears can win in front of their hometown crowd.

– NASCAR Wire Service –

Article source: http://www.espn.com/jayski/cup/2017/story/_/id/18984804/auto-club-speedway-weekend-preview

Trump’s auto review may only slow march to better fuel efficiency

By Nick Carey and Paul Lienert

DETROIT (Reuters) – When U.S. President Donald Trump announced a review last week of tough Obama-era vehicle emissions and fuel-efficiency standards, he proclaimed that the “assault on the American auto industry is over.”

But rules set by the Environmental Protection Agency may take a backseat to consumers demanding vehicles that guzzle less gas and automakers having to meet tougher standards if they want to export cars overseas, according to auto industry analysts.

In the end, U.S. carmakers may just gain a few more years to meet the more stringent targets that former President Barack Obama’s administration negotiated with the companies in 2012, analysts said.

If Europe and China continue to toughen their emissions standards, “the U.S. might become an outlier,” American Axle President Mike Simonte told Reuters on Thursday.

Trump’s move was widely seen leading to a rollback or loosening of more stringent targets, which would slash vehicle exhaust emissions while effectively doubling average fuel economy to 54.5 miles per gallon by 2025.

Automakers have argued the rules for 2022-2025 are too expensive and could cost American jobs, so the Trump administration’s review was seen as a win for them.

On a conference call Thursday with investors, Bob Shanks, Ford Motor Co’s chief financial officer, said, “We are not seeking a rollback in any way. We just want to have a conversation around the levels we want to achieve.”

Despite what the EPA may want, California and nine other states in the Zero Emission Vehicle program — eight in the northeast, plus Oregon — are expected to move ahead on Friday with the previously established targets.

Those states account for nearly 30 percent of U.S. auto sales.

The potential divide with the rest of the country could create a “two-tiered environment with two sets of regulations,” said Mark Wakefield, managing director of AlixPartners’ automotive practice. This “could drive costs higher if automakers have to build two versions of the same vehicle to meet the two different standards.”

The Alliance of Automobile Manufacturers, a trade group that sued to overturn the Obama-era rules on behalf of several big automakers, wrote the White House on Thursday urging talks to begin quickly with California to ensure that national standards remain in place.

“Automakers seek certainty, predictability and rationality – over time – from the regulatory process,” the group’s CEO Mitch Bainwol wrote.

“EPA A DISTANT THIRD”

Kristin Dziczek, director of the Center for Automotive Research’s labor and industry group, said U.S. automakers could find it hard to export cars to markets such as China and Europe with tougher regulatory regimes if the U.S. targets were rescinded.

“I don’t think we’re going to see a rollback,” she said. “At most, I think we may see a slowing of the timetable” for implementing the tougher standards.

AlixPartners’ Wakefield said if China, the world’s largest market, continues pushing electric vehicles while America backpedals, it could lead to “some movement of investment from the U.S. to China, especially as the latter market continues to grow.”

General Motors Co and Fiat Chrysler Automobiles NV referred Reuters to public comments made by the industry’s lobbying group, the Alliance of Automobile Manufacturers.

EPA Administrator Scott Pruitt, a climate change skeptic, said the Obama administration estimated it would cost $200 billion over 13 years to comply with stricter standards, which he believes will lead to higher prices for consumers and jobs leaving the country.

Morgan Stanley analyst Adam Jonas said the auto industry expected to miss the 2022-2025 targets regardless of who occupied the White House, but he believes the EPA’s recent move may carry relatively little weight.

“Of all the things that are likely to drive fuel economy, I would rank the EPA a distant third on the list, behind consumer preferences and the direction of technology,” he said.

United Auto Workers union President Dennis Williams said while around 60 percent of U.S. auto sales are currently trucks and SUVs, consumers value fuel-economy improvements for those vehicles.

“The automakers shouldn’t make the mistake of sliding backward,” Williams said. “We’re here to protect our (union) members, but we understand that in doing so we also have to look at the future.”

(Reporting by Nick Carey and Paul Lienert in Detroit; Additional reporting by David Shepardson in Washington; Editing by Lisa Shumaker)

Article source: http://whtc.com/news/articles/2017/mar/23/trumps-auto-review-may-only-slow-march-to-better-fuel-efficiency/

THE AUTO SCANNER: Are your brakes breaking bad?

Your car care questions answered by repair expert Larry Rubenstein.

Q: My daughter’s 1996 Taurus has started making a strange noise when braking. It sounds like it is coming from the interior, not exterior, between the dashboard and e-brake pedal. It sounds like someone plucking on a taut wire. The harder she brakes the louder it sounds. Any thoughts on what this could be?

A: Most likely, the noise is coming from the brake power booster diaphragm. The only device exactly in that area is the brake booster. If the brake booster actually stops working, your daughter will have a very hard time stopping the car, and it may be accompanied by a rough idle.

Q: I have been listening to WBZ Radio 1030 AM for years and I enjoy the segments that you provide on his show (NightSide). Very informative and detailed. I tried to phone in last show with no luck. I have a 2004 GMC Envoy SLT and a month ago, following an oil change at a dealership, the oil gauge indicator did not work. Three to five days later, the speedometer stopped working. At the same time, three buttons on my Bose radio do not light up.

I brought the car into a local automotive shop and he didn’t have time to diagnose, but he told me he thinks GM has had problems with the “cluster.” I am a 63-year-old single woman and would like some advice on where the best place is to have this fixed. Dealership? Or find a reputable auto service shop? I have had men in the family say it may be electrical, or something else. I would very much appreciate your response.

A: I feel badly you couldn’t get through to us, but I do appreciate you being a listener. Now on to your problem. The car needs to go to a GM dealer or to a repair shop that has the Tech 2 scanner, which will be able to perform a battery of tests on the instrument panel. I would pay special attention to the grounds that are located on the left kick panel inside the car. Check your calendar to tune in on May 11 when The Car Guys take to the air on WBZ Radio 1030.

Q: Larry, my van has 63,000 miles on it and has not ever been used for towing or hauling big loads. For the last six months, it has developed a “harsh” downshift when coming to a quick stop, with a very noticeable jerk and noise. Is there an adjustment for this or could something be worn in the transaxle? The fluid is up to level and reddish in color, but has never been changed. I’d appreciate your opinion on this problem. Thank you. — Bob

A: Bob, the problem you are describing is what sold me on the transmission flushing system. I had a Ford Bronco with exactly the same problem. The overall feeling was the transmission would have to be torn down to locate the exact cause. This is when a company representative came into my shop and told us of their product. I presented them with the problematic Ford Bronco. We did the service as an experiment. Within 100 miles, the banging and jerking were gone. Bear in mind the flush is maintenance and not a fix; however, problems have been known to disappear after having the system flushed, especially with your kind of mileage.

Car care tip: If you change over to summer wiper blades, consider saving your winter blades if they are still good. They can be stored in the same sleeves the new summer blades came from. Keep the blades stored in a cool and dry place.

Submit car questions to scanauto@aol.com. For more tips and seasonal articles, visit Rte. 1 Auto Service’s Facebook page at facebook.com/Rte-1-Auto-Service, or the shop’s website at rte1autoservice.com. You can hear Larry and his son Scott on WBZ’s NightSide.

Article source: http://newburyport.wickedlocal.com/news/20170323/auto-scanner-are-your-brakes-breaking-bad

Inside Alabama’s Auto Jobs Boom: Cheap Wages, Little Training, Crushed Limbs

Regina Elsea was a year old in 1997 when the first vehicle rolled off the Mercedes-Benz assembly line near Tuscaloosa. That gleaming M-Class SUV was historic. Alabama, the nation’s fifth-poorest state, had wagered a quarter-billion dollars in tax breaks and other public giveaways to land the first major Mercedes factory outside Germany. Toyota, Honda, and Hyundai followed with Alabama plants of their own. Kia built a factory just over the border in West Point, Ga. The auto parts makers came next. By the time Elsea and her five siblings were teenagers, the country roads and old cotton fields around their home had come alive with 18-wheelers shuttling instruments and stamped metal among the car plants and 160 parts suppliers that had sprouted up across the state.

A good student, Elsea loved reading, horses, and dogs, especially her Florida cracker cur, named Cow. She dreamed of becoming a pediatrician. She enrolled in community college on a federal Pell Grant, with plans to transfer to Auburn University, about 30 miles from her home in Five Points. But she fell in love with a kindergarten sweetheart, who’d become a stocker at a local Walmart, and dropped out of school to make money so they could rent their own place.

Elsea went to work in February 2016 at Ajin USA in Cusseta, Ala., the same South Korean supplier of auto parts for Hyundai and Kia where her sister and stepdad worked. Her mother, Angel Ogle, warned her against it. She’d worked at two other parts suppliers in the area and found the pace and pressure unbearable.

Elsea was 20 and not easily deterred. “She thought she was rich when she brought home that first paycheck,” Ogle says. Elsea and her boyfriend got engaged. She worked 12-hour shifts, seven days a week, hoping to move from temporary status at Ajin to full time, which would bring a raise from $8.75 an hour to $10.50. College can wait, she told her mom and stepdad.

On June 18, Elsea was working the day shift when a computer flashed “Stud Fault” on Robot 23. Bolts often got stuck in that machine, which mounted pillars for sideview mirrors onto dashboard frames. Elsea was at the adjacent workstation when the assembly line stopped. Her team called maintenance to clear the fault, but no one showed up. A video obtained by the Occupational Safety and Health Administration shows Elsea and three co-workers waiting impatiently. The team had a quota of 420 dashboard frames per shift but seldom made more than 350, says Amber Meadows, 23, who worked beside Elsea on the line. “We were always trying to make our numbers so we could go home,” Meadows says. “Everybody was always tired.”


After several minutes, Elsea grabbed a tool—on the video it looks like a screwdriver—and entered the screened-off area around the robot to clear the fault herself. Whatever she did to Robot 23, it surged back to life, crushing Elsea against a steel dashboard frame and impaling her upper body with a pair of welding tips. A co-worker hit the line’s emergency shut-off. Elsea was trapped in the machine—hunched over, eyes open, conscious but speechless.

No one knew how to make the robot release her. The team leader jumped on a forklift and raced across the factory floor to the break room, where he grabbed a maintenance man and drove him back on his lap. The technician, from a different part of the plant, had no idea what to do. Tempers erupted as Elsea’s co-workers shoved the frightened man, who was Korean and barely spoke English, toward the robot, demanding he make it retract. He fought them off and ran away, Meadows says. When emergency crews arrived several minutes later, Elsea was still stuck. The rescue workers finally did what Elsea had failed to do: locked out the machine’s emergency power switch so it couldn’t reenergize again—a basic precaution that all factory workers are supposed to take before troubleshooting any industrial robot. Ajin, according to OSHA, had never given the workers their own safety locks and training on how to use them, as required by federal law. Ajin is contesting that finding.

An ambulance took Elsea to a nearby hospital; from there she was flown by helicopter to a trauma center in Birmingham. She died the next day. Her mom still hasn’t heard a word from Ajin’s owners or senior executives. They sent a single artificial flower to her funeral.

Alabama has been trying on the nickname “New Detroit.” Its burgeoning auto parts industry employs 26,000 workers, who last year earned $1.3 billion in wages. Georgia and Mississippi have similar, though smaller, auto parts sectors. This factory growth, after the long, painful demise of the region’s textile industry, would seem to be just the kind of manufacturing renaissance President Donald Trump and his supporters are looking for.

Except that it also epitomizes the global economy’s race to the bottom. Parts suppliers in the American South compete for low-margin orders against suppliers in Mexico and Asia. They promise delivery schedules they can’t possibly meet and face ruinous penalties if they fall short. Employees work ungodly hours, six or seven days a week, for months on end. Pay is low, turnover is high, training is scant, and safety is an afterthought, usually after someone is badly hurt. Many of the same woes that typify work conditions at contract manufacturers across Asia now bedevil parts plants in the South.

“The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia,” says David Michaels, who ran OSHA for the last seven years of the Obama administration. Safety at the Southern car factories themselves is generally good, he says. The situation is much worse at parts suppliers, where workers earn about 70¢ for every dollar earned by auto parts workers in Michigan, according to the Bureau of Labor Statistics. (Many plants in the North are unionized; only a few are in the South.)


Cordney Crutcher has known both environments. In 2013 he lost his left pinkie while operating a metal press at Matsu Alabama, a parts maker in Huntsville owned by Matcor-Matsu Group Inc. of Brampton, Ont. Crutcher was leaving work for the day when a supervisor summoned him to replace a slower worker on the line, because the plant had fallen 40 parts behind schedule for a shipment to Honda Motor Co. He’d already worked 12 hours, Crutcher says, and wanted to go home, “but he said they really needed me.” He was put on a press that had been acting up all day. It worked fine until he was 10 parts away from finishing, and then a cast-iron hole puncher failed to deploy. Crutcher didn’t realize it. Suddenly the puncher fired and snapped on his finger. “I saw my meat sticking out of the bottom of my glove,” he says.

Now Crutcher, 42, commutes an hour to the General Motors Co. assembly plant in Spring Hill, Tenn., where he’s a member of United Auto Workers. “They teach you the right way,” he says. “They don’t throw you to the wolves.” His pay rose from $12 an hour at Matsu to $18.21 at GM.

In 2014, OSHA’s Atlanta office, after detecting a high number of safety violations at the region’s parts suppliers, launched a crackdown. The agency cited one year, 2010, when workers in Alabama parts plants had a 50 percent higher rate of illness and injury than the U.S. auto parts industry as a whole. That gap has narrowed, but the incidence of traumatic injuries in Alabama’s auto parts plants remains 9 percent higher than in Michigan’s and 8 percent higher than in Ohio’s. In 2015 the chances of losing a finger or limb in an Alabama parts factory was double the amputation risk nationally for the industry, 65 percent higher than in Michigan and 33 percent above the rate in Ohio.

Korean-owned plants, which make up roughly a quarter of parts suppliers in Alabama, have the most safety violations in the state, accounting for 36 percent of all infractions and 52 percent of total fines, from 2012 to 2016. The U.S. is second, with 23 percent of violations and 17 percent of fines, and Germany is third, with 15 percent and 11 percent. But serious accidents occur in plants from all over, according to more than 3,000 pages of court documents and OSHA investigative files obtained under the Freedom of Information Act.

Michaels, who was running OSHA when Elsea was killed, was furious when he learned how it happened. A year earlier, while attending a conference in Seoul, he’d paid a visit to executives at Hyundai Motor Co. and Kia Motors Co. to warn them that OSHA had found serious safety violations at many of their Korean-owned suppliers in the Southeast. Michaels told the carmakers they were squeezing their suppliers too hard. Their productivity demands were endangering lives, and they had to back off.


“I gave them a very strong message: ‘This brings shame on your reputation. American consumers are not going to want to buy cars stained with the blood of American workers,’ ” says Michaels, who in January rejoined the faculty of George Washington University. “They didn’t acknowledge the problem but said they were committed to safe working conditions. Clearly, they didn’t make safety a requirement for their suppliers.” Safety is a top priority at Hyundai’s Alabama operation, says spokesman Robert Burns, who added that Hyundai promotes safety at suppliers’ plants with quarterly forums and requires suppliers to comply with OSHA standards.

After Elsea’s death, Ajin issued a statement saying all employees were being retrained in safety procedures. “Ajin USA is deeply saddened by the tragic loss of Regina Elsea,” it said. A spokesman, Stephen Bradley, says the company can’t comment on the incident because of litigation. Elsea’s death “was a tragic accident, and Ajin remains deeply saddened,” the company said in a written statement. “Safety continues to be our guiding principle.”

Ajin had settled other OSHA violations a month before Elsea was killed. Eight workers had fingers crushed or fractured in recent years in welding machines. After the first seven injuries, Ajin’s safety manager recommended installation of a machine controller called Soft Touch, which slows welding electrodes and stops them from closing together if a finger is detected. Nothing happened. Then an eighth worker smashed his thumb. For the unsafe welding machines, OSHA fined Ajin a total of $7,000.

In December, after investigating Elsea’s death, OSHA fined the company $2.5 million for four “willful” citations, the agency’s most severe sanction, reserved for violators that “knowingly” disregard employee safety. Ajin is contesting the findings.

The pressure inside parts plants is wreaking a different American carnage than the one Trump conjured up at his inauguration. OSHA records obtained by Bloomberg document burning flesh, crushed limbs, dismembered body parts, and a flailing fall into a vat of acid. The files read like Upton Sinclair, or even Dickens.

Last year a 33-year-old maintenance worker was engulfed in flames at Nakanishi Manufacturing Corp.’s bearing plant in Winterville, Ga.—after four previous fires in the factory’s dust-collection system. OSHA levied a $145,000 fine on the Japanese company, which supplies parts to Toyota Motor Co., for a willful violation for knowingly exposing workers to unguarded machinery. The plant’s maintenance chief told the OSHA investigator that he’d been too busy to write up proper lockout procedures for working on the system. The technician suffered third-degree burns all over his upper body.

Phyllis Taylor, 53, scorched her hand inside an industrial oven last year at the HP Pelzer Automotive Systems Inc. insulation plant in Thomson, Ga., while baking foam rubber linings for BMW hoods. The oven had been down for repairs earlier that day, and “there was always pressure to catch up,” Taylor says. She slipped on a puddle of oil at her feet, and as she instinctively grabbed the oven in front of her, the door slammed down on her hand. She’d been telling her supervisor for weeks about the oil leak. “They don’t pay you no mind; they just want you to work,” says Taylor, who had skin graft surgery but still can’t close her dominant hand. The plant’s maintenance manager told OSHA, “The focus of this plant is production at all costs.” OSHA fined HP Pelzer $705,000 for 12 “repeat” safety violations.

Nathaniel Walker, 26, had been doing the same high-wire act for three years at the factory of WKW-Erbsloeh Automotive, a supplier of metal trim parts to Mercedes and BMW, in Pell City, Ala. Every Saturday he climbed onto a ventilation duct above big dipping pools of acid on the plant’s back line, where the aluminum parts were anodized to give them a protective coat. It was always a race. At first, Walker and a co-worker had 24 hours to clean and service as many of the 34 tanks as possible. As production demands rose, management cut that to 14 to 16 hours, and sometimes to as few as 6. The job required balance and dexterity. Walker and his colleague hopped on and off the 4½-foot-high ventilation shafts, hauling hoses, tools, and 50-pound bags of caustic soda. They were always exhausted—Walker worked from 3 p.m. to 3 a.m., seven days a week, for up to six months straight.

There were no gangways, no cables, no handrails. The only training the workers got from the plant’s German supervisors, according to Walker, was in how to rinse off the ventilation ducts so they weren’t so slippery.

In July 2014, Walker fell in. He was balancing on the duct between two tanks—one empty, one full—while using a crowbar in the empty one to remove and replace a lead cathode. His hands slipped, and he tumbled backward into a vat of sulfuric and phosphoric acid 4 feet deep. Submerged, he swam for a second before righting himself. A nearby co-worker quickly pulled him out and hosed him down, minimizing damage to his skin and eyes. Walker’s cotton shirt pulled off his skin like wet tissue paper. His throat burned and swelled from swallowing the solution. He spent four days in intensive care and didn’t fully recover for months.

OSHA fined WKW-Erbsloeh $178,000 and issued the company a willful violation for failing to secure the work areas around open chemical tanks. The agency had inspected WKW-Erbsloeh eight times since 2009 and issued multiple citations after another worker’s arm was chewed up in a polishing machine and a third employee lost a thumb. Walker was earning $13 an hour when he fell into the acid. “I was way, way underpaid for working all the time in a risky situation like that,” he says.

Ray Trott, a retired U.S. Marine aircraft maintenance chief, worked for WKW-Erbsloeh as a production manager until 2015. He says the German managers didn’t seem to understand the American workers and were never satisfied with what they got from them. “If you made 28,000 parts one day, the next day they’d want 29,000,” Trott says. “You heard all day long, ‘If we don’t get these parts out, the customer is going to fine us $80,000.’ ”


Reco Allen, 35, took a job at Matsu Alabama to get his life together. After dropping out of high school, he’d worked briefly at McDonald’s, then sold marijuana for a living. When he turned 30, with three kids younger than 6 and his wife working at Walmart, Allen decided dealing dope was no way to raise a family. “They’d see cars pulling up, hear people talking, and ask, ‘Daddy what are you doing? You ain’t got no job.’ I wanted to better myself.”

He applied at Surge Staffing, a temp agency that was hiring workers for Matsu. Allen’s dad, who’d worked at the facility for a few weeks after a 30-year career making furniture at Steelcase Inc., told him to stay away—the Matsu plant was too dangerous. “Don’t let the monster eat you up,” he told his son.

Allen took a $9-an-hour job on the overnight shift as a janitor. He passed up higher-paying positions on the assembly line, because “the machines scared him,” says Adam Wolfsberger, the former manager at Surge Staffing who hired Allen. The only training he received was where to find the mop and broom, Wolfsberger says.

On April 2, 2013, after Allen had been on the job for about six weeks, a plant supervisor ordered him to put down his broom. He assigned him to work the rest of the shift on one of the metal-stamping presses instead and admonished him not to tell anyone about the job switch. Matsu was producing only 60 percent of its parts quota and could have been fined $20,000 by Honda for every minute its shortfall held up the company’s assembly line, according to a deposition by the plant’s general manager at the time, Robert Todd, in a workers’ compensation suit filed by Allen in state court in Huntsville.

Allen testified in the case that his only operating instructions came from a co-worker who told him: “Get these blanks out of the bin. You load them in the machine, and you make sure you get back.” Stepping back was essential, not only to avoid injury but to clear the vertical safety beam, or light curtain, which is supposed to deactivate the machine if a worker is standing too close when an operator cycles it on.

At about 4 a.m., Allen, wiry and 5 feet 9 inches, was leaning inside the machine with his arms extended upward, loading metal bolts. Suddenly the die, which stamps the metal parts, slammed onto his arms. “It felt like the whole world was coming down on me,” he says. The press operator hadn’t noticed him working inside the machine, and Allen’s frame was so slight that the safety beam missed him.

He stood there for an hour, his flesh burning inside the heated press. Someone brought a fan to cool him off. “I was just talking to myself about what my daddy had told me,” Allen says. When emergency crews finally freed him, his left hand was “flat like a pancake,” Allen says, and parts of three fingers were gone. His right hand was severed at the wrist, attached to his arm by a piece of skin. A paramedic cradled the gloved hand at Allen’s side all the way to the hospital. Surgeons removed it that morning and amputated the rest of his right forearm to avert gangrene several weeks later.


Matsu, it turned out, had known for years that Press 10, where Allen was dragooned into working, was dangerous. Three years earlier a press operator on the plant’s safety committee reported a near miss on an identical machine after the light curtain failed to pick up a worker. The safety committee recommended fixes to the vertical beam, but nothing was done, according to testimony in the court case. In 2012 a worker on that same press had his hand crushed. In response, Todd, the general manager, recommended installing horizontal beams to eliminate the blind spot in the vertical light curtains of both machines. It would have cost $6,000 to $7,000, Todd testified. John Carney, the company’s vice president for operations at the time, rejected the proposal. Instead, he told Todd to install a safety bar, for $150, Todd testified. It failed to protect Allen.

After Allen’s injury, Surge Staffing gathered its 80 or so Matsu workers for a meeting, says Wolfsberger, the former Surge manager. That’s when the agency learned the plant had provided no hands-on training, routinely ordered untrained temps to operate machines, sped up presses beyond manufacturers’ specifications, and allowed oil to leak onto the floor. “Upper management knew all that. They just looked the other way,” says Wolfsberger, who left Surge in 2014 and now manages a billiards parlor. “They treated people like interchangeable parts.”

An administrative law judge with the Occupational Safety and Health Review Commission approved a $103,000 fine against Matsu, ruling that Allen’s injuries resulted from its “conscious disregard or plain indifference” to his safety. Matcor-Matsu did not respond to phone messages and emailed questions, nor did its attorney, John Coleman. After the commission’s 2015 decision, Coleman told the Birmingham News the judge was mistaken and that Allen was trained but didn’t follow the rules. Allen sued the company and reached a multimillion-dollar settlement out of court. He and his wife purchased 15 acres and a big house with a fish pond near the Tennessee River, prepaid their kids’ college tuition, and bought a bright-green Buick Roadmaster. “I’d rather have my arm back any day,” Allen says.

 

    Article source: https://www.bloomberg.com/news/features/2017-03-23/inside-alabama-s-auto-jobs-boom-cheap-wages-little-training-crushed-limbs

Meet the muscle: Lehigh Valley Auto Show 2017 preview

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Trader bets on more pain ahead for auto giant

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Auto stocks are taking a beating, and options traders are betting on more pain ahead for one in particular: Ford.

Big auto names like Ford and GM are both down 6 percent in the last week, as new data point to growing trouble for the space. The compounding pain stems from a drop in used car prices, growing auto loan defaults and bearish Wall Street sentiment.

Morgan Stanley on Monday reiterated its underweight rating on Ford, rattling investors on the notion that we’ve reached the peak for autos.

Mike Khouw of Optimize Advisors noted that the sentiment has trickled over to the options market. “Ford saw 2.5 times its average daily put volume [Monday],” he told CNBC’s “Fast Money” on Monday.

In one particularly bearish trade, there was a big buyer of 12,000 of the June 12-strike puts for 55 cents. This means that the trader is betting that Ford shares will fall below $11.45 per share by June expiration. “That is testing that 2016 low,” Khouw explained.

“The auto sector, not just due to the credit crisis, is a high cyclical industry that’s sensitive to oil prices and obviously product cycle issues,” he added.

Ford was down nearly 4 percent in midafternoon trading Tuesday.

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Options Action



  • Ford Mustangs on the assembly line at the Ford Flat Rock Assembly Plant in Flat Rock, Michigan.

    Auto stocks are taking a beating, and options traders are betting on more pain ahead for one name in particular: Ford.




  • Options Action: Bet against autos?




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  • Melissa Lee

    Melissa Lee is the host of CNBC’s “Fast Money” and “Options Action.”

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Auto Makers Target China as New US Trade Rules Loom

Top auto makers, facing the threat of costly North American trade policy changes, want the Trump administration to take a harder line on a market thousands of miles from their home turf.

China’s car business is attractive to outsiders chasing sales growth, but rules protecting local companies dent profits of global auto giants and force them to share technology with potential rivals. The 25% tariff on vehicle imports makes U.S.-built…

Article source: https://www.wsj.com/articles/auto-makers-target-china-as-new-u-s-trade-rules-loom-1490175002

The Looming Technology That Could Crash The Auto Parts Party

Auto part retailers have long been the darlings of the retail industry with consistent earnings growth, the highest margins in the sector, and protection from online players. And as a result, the stocks have been rewarded with a high valuation and market outperformance. However, there’s a looming technology that could disrupt the industry that I don’t think is being accounted for by investors.

Before I get into what people aren’t talking about, we need to first establish what people are talking about. For those who aren’t familiar with my writing, my Word on Wall Street posts talk about the bull and bear theses among the largest buy-side investors. The intent is to establish what the consensus arguments are (which most retail investors are not familiar with) so that we understand what will move the stock and what is baked into the stock price. So let’s kick off this discussion with a look at what those arguments are for the auto part retailers.

The Current Discussion Focuses on Secular Tailwinds and Defensiveness

Auto part retailers have been on a tear since the recession with a trajectory that has been just about straight up. The group has increased 493% over the last 10 years compared to the 72% gain for the SP 500.

The tailwinds are well understood in the industry. Auto parts are one of the few areas in retail where investor sentiment (both sell side and buy side) have been uniformly bullish since the recession. Currently, 67% of ratings on auto part retailers are Buys (mostly for O’Reilly (NASDAQ:ORLY) and AutoZone (NYSE:AZO)), 30% are holds, and just 1% are sells.

To recap, the bull thesis is that the industry faces a number of favorable secular tailwinds that should drive continued longer-term growth. Additionally, the company offers several defensive features that allow investors to sleep at night.

Tailwind 1: Increasing average age of vehicles. As cars get older, they require more repairs. This in turn drives business at the auto part retailers, which sell to both consumers and local mechanics (the pro customer). The average age has increased every year since the data was available (from the Bureau of Transportation Statistics) and now sits at 11.4 years.

Tailwind 2: Increasing number of vehicles on the road. Vehicle sales have been surging. Auto sales recently hit the 18M SAAR mark in December, and have returned to levels not seen since before the recession. Auto registrations have increased as well, increasing 1.7% to 260 million in 2014. As more vehicles get on the road, more auto maintenance and repair will be needed.

Tailwind 3: Increased driving. Miles driven, a metric from the government, shows that people are driving more than ever. After taking a brief pause between 2009-2014, miles have begun to increase again. Low oil prices have likely helped this metric as well. As the cars are driven more and more, repairs will be increasingly necessary.

Tailwind 4: Increasing complexity of cars. This will make repairs more complicated, which will likely drive higher spend as consumers require more services to help fix things.

Eating the local retailers

Outside of the factors that are benefiting the industry as a whole, the public auto part retailers also offer a compelling share gain story. The industry, sized at roughly $100B, remains extremely fragmented. The top five retailers hold just 20% of the DIFM side and 36% of the DIY side. Who holds the rest of the industry’s sales? It’s mostly local, smaller shops. And as the big 3 (ORLY, Advance Auto Parts (NYSE:AAP) and AZO) grow, the benefits of scale will continue to grow over these smaller players. We have already seen this happen over the last two decades as census bureau data suggests that roughly a fourth of the industry’s store base (outside of the big 3) has disappeared. The auto part retailers’ small market share suggests that a significant amount of upside remains as they continue to take share from the smaller, less competitive retailers.

Defensive characteristics protect the industry from Amazon and recessions

The group also offers several attractive defensive characteristics that most of retail does not offer. Perhaps the biggest defensive characteristic is its insulation from the online threat. The nature of auto parts is favorable to the auto part retailers and unfavorable to online players. Purchases are often out of necessity and are time sensitive. Local mechanics or your average consumer may need a spare part or a tool within the next hour. And online retailers are currently unequipped to get parts to the customer that quickly. Meanwhile, the auto part retailers have an entire infrastructure of regional hubs set up to deliver necessary parts to its customers quickly.

Additionally, the DIFM side is heavily relationship-based. Mechanics will often call “the guy they know” that has been delivering hard-to-find parts quickly and consistently over time. They’re much less likely to go online and order something. Furthermore, many customers, even the local mechanic, might go to an auto part store looking for advice. Online retailers would not be able to offer customer support to the degree that the auto part stores are able to.

The other defensive characteristic is that auto part retailers have historically outperformed in recessionary environments. This occurred during the last recession in 2007-2009. Auto part purchases are largely not discretionary – when someone’s car breaks down, they have to get it fixed. In fact, one could even argue that consumers are more likely to fix their cars and try to extend the life of their existing car in a recession as opposed to buying a new car.

With such strong tailwinds behind it, the auto part retailers have consistently posted strong same store sales trends over the last several years. Several of the retailers have company-specific initiatives as well. For example, O’Reilly continues to benefit from growing DIFM sales at its stores (a separate story for another time). Meanwhile, Advance Auto Parts has lagged the rest of the sector, but also has the most upside of the three as it seeks to improve on its operations.

Bear Arguments are Harder to Find, but Revolve Around Online Threat, Valuation

What are the bear arguments? Recent stock price performance has driven valuation significantly higher for all the auto part retailers. Currently, the group trades at a 19x PE multiple (NTM) despite consensus estimates of 11% growth in 2017. Admittedly, this is likely due to the great degree of confidence that investors have that the auto part retailers will hit their estimates. The group has been remarkably consistent over the years and has a strong bull case going for it. As a result, you’ll need to pay up for each point of growth that they’re expected to generate.

Additionally, while many investors are aware of the defensiveness to the online threat, investors are still wary of the impact of Amazon’s (NASDAQ:AMZN) entry into the industry. And for good reason. Amazon has a long history of getting into industries that were once thought to be insulated from the online threat, and quickly disrupting it. And Amazon appears to be getting more serious about the auto parts industry. The company recently struck deals with auto part suppliers to sell their parts directly on the Amazon platform. While the sector’s supposed insulation from the online threat is well known, many investors are hesitant to conclusively say that it will not be impacted. Arguably, at a minimum, Amazon’s entry into the space is worthy of a 1-2 point discount on the multiple given the increased risk.

The other bear argument that has lingered for several years is the declining amount of cars in the 6-11 age bracket. The entire existing fleet of cars has a certain number of cars in the 0-5 year bracket, a certain number of cars in the 6-11 year bracket, and a certain number of cars in the 12+ year bracket. The 6-11 bracket is considered the sweet spot because cars are old enough to start breaking down, are potentially out of warranty, and are valuable enough for consumers to want to make them last longer. Unfortunately, 6-11 years ago was the time that we were going through one of the most severe recessions in the history of the country. Car purchases dropped off a cliff as consumers tightened their budgets. As a result, there will be a smaller number of cars in the sweet spot in the coming years. Bears believe this could potentially hurt auto part purchases over the next year. However, this thesis has been around since 2014, and auto parts retailers have continued to post fairly strong results despite the sweet spot decline. As a result, this argument has lost supporters in recent years.

Self-Driving Cars Could Leave Auto Part Retailers Out of the Equation

There’s another longer-term bear thesis that’s not talked about – the impact of self driving cars. I get the sense that investors often think of self-driving cars as one of those long-term technologies that will get pushed back further and further as it hits technological and regulatory issues. And as I have discussed before, public equity investors are mostly near-term focused, especially institutional investors. As a result, it’s a topic that I think most investors mentally think they can revisit and think a bit harder about in 5-7 years.

However, as I’ll discuss soon, self-driving cars could come sooner than expected. And stocks could react even sooner than that. Venture capital investors, which have longer-term horizons and are arguably the closest to the technology, are paying a significant amount of attention to it now. In fact, many of the arguments I’ll put forward actually come from the VC world, but just have yet to bleed into public equity conversations.

Self-driving fleet operators would not need auto part retailers

Self-driving cars have the potential to leave auto part retailers out of the car-repairing equation. And while this scenario involves multiple assumptions to play out, the sheer magnitude of the impact is enough to warrant investors’ attention. Let’s walk through the exact way that this thesis could play out.

The benefits of self-driving cars are well established. Without a required driver behind the wheel, cars can now be used more frequently for the benefit of others. Cars are currently used 5% of the time during their lifetime. Additionally, even when they are used, they are underutilized and often have only one driver in them. With the advent of self-driving cars, we will have fewer cars on the road, fewer accidents, and higher usage per vehicle.

Some of you may be anticipating how this will impact auto part retailers already. Big deal, you might think. There might be less cars on the road, but they will be driven much more and will need repairs more frequently. Auto part retailers should continue to benefit from this.

However, many VC investors believe that the characteristics of self-driving cars lend itself well to an oligopolistic industry with only a handful of major players offering self-driving cars as a service. In a world where all cars on the road are self-driving, we’ll have 1) a small fraction of the total number of cars on the road, and 2) fairly expensive cars with lots of sensitive gear. Additionally, if there are ever any technical issues (i.e. fog preventing the cameras from operating fully, network hacks, significant construction in certain areas, etc.), transportation service providers could quickly fix the issue by temporarily rolling out their fleet with human drivers. It makes a lot of sense to have the cars owned and maintained by a few other companies rather than the consumer. This obviously positions Uber (Private:UBER) or Lyft (Private:LYFT) well as they already offer transportation services on demand, but it could possibly also include Tesla (NASDAQ:TSLA), the car manufacturers, or another tech company as being major players as well. Ultimately, many VC investors believe that in a self-driving car world, there will only be a handful of major players in the industry operating and owning all of the cars on the road.

And in a world where only a handful of companies own all the cars on the road, they will likely not go to a local mechanic to maintain and repair their fleet. They also won’t go directly into an auto part store. These two channels comprise all of an auto part retailer’s revenue (DIFM in the former situation and DIY in the latter). Instead, the manufacturers are much more likely have their own in-house operation. In that scenario, the auto part stores will be cut out of the equation.

Counterarguments Exist, but Do Not Fully Allay Concerns

Current earnings expectations and multiple demonstrate how far the stock could fall

You might think that they won’t lose all of their revenue. After all, there will still be people driving cars out there. But stocks are highly sensitive to changes in growth rates, and slight changes vs. investor expectations could lead to a big impact on the stock price.

The current expectations for the auto part retailers is for sales growth of 2-7%, margin expansion of 20-50 bps, and earnings growth of 6-16% (with AZO and ORLY at the high end of these ranges).

Should they miss these expectations, consensus estimates would lower significantly as analysts change their growth estimates for the business going forward. And over time, a change in a couple percentage points can make significant differences in earnings projections when compounded over time. This is likely further hurt by the auto part retailers’ elevated margins, which are the highest in all of retail. While the auto part retailers’ extremely high margins are a testament to the auto part industry and to the efficiency of the operators, it is also a risk given how far they can fall. We saw something similar happen to Bed Bath Beyond (NASDAQ:BBBY) several years ago once their sales started to slow and the company was forced to reinvest in the business to drive further growth.

Furthermore, the biggest impact would be a decline in the multiple. If the auto part retailers miss earnings expectations, investors would lower the multiple for the business due to 1) its lower growth trajectory, and 2) increased risks and uncertainty on its future.

After all, if someone told you that there is a potential scenario out there where the auto part retailers could lose half of their sales (or more) in five years, and that that scenario had a 10% chance of occurring, how would you react? The multiples would have to take a hit. It might be akin to something like GameStop’s (NYSE:GME) situation, a retailer in which its business model could eventually go away with video game distribution over the internet. While the company has enjoyed moments of outperformance, the multiple has remained below 15x post-recession and below 10x for most of that time period.

Timeline of events could be shorter than you might think

You might think, “OK fine, but it will take a long time for the impact of self-driving cars to roll out and move the needle. Ten years maybe.”

But, the impact to stocks could happen sooner than you might think for several reasons.

First of all, many manufacturers expect self-driving cars to begin entering the market by 2019-2020. That’s in just 2-3 years – well within the 3-5 year framework that many investors use to value stocks.

Second, once self-driving cars are rolled out, they could easily replace existing cars on the roads much more quickly than is currently believed. The average car age is 11.5 years, and many models assume that for our entire fleet of cars to turn into self-driving cars, it would take ~13 years. However, technology has sped up the rate of adoption for more recent innovations. And if we assume that people will begin to use shared vehicle services more frequently (whether through Uber, Lyft, or another car manufacturer), then the cars will be used much more heavily, which will age them more quickly, and cause the entire fleet of cars to turn over in a shorter period of time. In that scenario, the entire existing car fleet could turn over in a fraction of that time – as little as three years by some estimates.

Third, the stocks could potentially move before the impact is seen in the fundamentals. Already you can see this from Amazon’s impact on the auto part retailers (see the chart in the Bear section). While Amazon has yet to actually impact their results, just the announcement that they would enter the space has increased selling and contracted the multiple slightly.

So when could the stocks actually move? It really depends on how quickly investors grasp how this might impact auto part retailers. Let’s take the extreme cases. At the latest, investors might begin to take notice once it actually hits financial results. In that case, it could occur once self-driving cars become more mainstream, which could be 5-plus years from now at the later range of estimates. At the earliest, investors could begin to take notice as self-driving cars begin to launch some time in 2019, or even before that (potentially even now, although this seems aggressive and unlikely to me). So we have a time span of 2-5 years potentially of when the stock could begin to feel pressure from this threat.

Increased Caution for the Auto Part Retailers As Self-Driving Technology Arrives

Now obviously, this is a huge range and leaves investors with little to actually act upon in the near term. And admittedly, it is much more likely that the auto part retailers continue to outperform during that time frame given the bevy of positive secular tailwinds that the companies are enjoying. However, for those investors who currently own auto part shares, or are looking at the sector, I would be increasingly cautious of these companies as the launch of self-driving cars approaches. At some point in the near term, it could become a talking point that depresses the multiple. And longer-term, it could significantly disrupt the operations of the businesses and hurt the stocks even further.

This article originally appeared on The Non-Consensus.

Disclosure: I am/we are long AMZN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Article source: http://seekingalpha.com/article/4056948-looming-technology-crash-auto-parts-party

US Auto Sales Decline in February Despite Truck Demand

- By Mayank Marwah

February U.S. auto sales were not as strong and resilient as expected despite higher incentives and strong demand for trucks. While car sales plunged 13%, light truck sales spiked 7% for the month. The industry saw a second consecutive month of sales decline after witnessing sales drop in January due to cold spells in the U.S. Overall sales for February were down 1.1% to 1.33 million vehicles as compared to last year. The seasonally adjusted annual sales rate stood at an impressive 17.57 million units, however, leaving a ray of hope for the automakers as selling season approaches.

Here’s a comprehensive look at February auto sales in the U.S.

Winners and losers

General Motors (GM) said its sales climbed 4.2% in February to 237,388 units. This is attributed to the healthy performance seen by Chevrolet and GMC, registering respective sales surges of 3.4% and 17%. In contrast, Buick and Cadillac witnessed sales declines of 9.4% and 8.6%. Trax and Equinox SUVs registered their best-ever February sales.

Source: www.goodcarbadcar.net

Ford Motor (NYSE:F) said sales plunged 4% in February. This marks the fourth sales decline in the last six months. Although light pickup trucks saw strong sales volume, it was not able to compensate for the steep fall in car deliveries. Ford F-Series pickups sold well, an 8.7% hike for February to 65,956 units. While Lincoln sales were up 8.8%, Ford division sales dropped 4.5%. SUV sales surged 24%.

Source: www.goodcarbadcar.net

The third-largest automaker, Fiat Chrysler (FCAU), saw its sales plunge 10% in February, selling 168,326 vehicles. Ram sales increased 4%, while Jeep sales dropped 15%. The company has discontinued several of its smaller car models. As the company is currently undergoing product changes and restructuring in the Jeep manufacturing units, its sales are being affected.

Nissan (NSANY) sales improved 3.7% as the company’s brand sales went up 1.2% and sales at Infinite surged 33%. Moreover, Nissan said the combined sales of crossover, pickups and SUVs totaled 61,870 units, representing a 22% sales gain.

Honda (HMC), too, was among the winners as it posted a 2.3% increase in sales by selling 181,686 vehicles in February. The improvement was powered by a 15% sales gain in trucks, crossovers and SUVs. In contrast, Acura sales were down14.9% to 10,864 units.The decline, however, did not offset the positive sales figure.

Toyota (TM) said its sales plunged 7.2% to 174,399 units as its brand sales decreased 5.4%. This was coupled by weak Lincoln sales of 18,338 units, down 20.6% in comparison with last year’s comparable period. SUV sales were up 14.3%.

Bill Fay, Toyota division’s group vice president and general manager, was happy to note the “industry sales in February topped a 17 million unit pace for the eighth straight month.”

Analysts sense some trouble ahead as automakers are on an incentive spree to do away with their inventories. Incentives such as heavy discounts would impact the bottom line. Tom Libby, head of automotive industry analysis said, “Dealers and manufacturers now need to use more tactics such as aggressive conquest programs, cash incentives and attractive financing terms to achieve year-over-year sales increases, and we can expect more of this as the year progresses.”

It will be interesting to see how the rest of the year unfolds for automakers.

Disclosure: I do not hold any position in the stocks discussed in this article.

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This article first appeared on GuruFocus.

Article source: http://finance.yahoo.com/news/us-auto-sales-decline-february-214836689.html

Used-Car Prices Put Auto Finance in a Pickle

The U.S. car-financing market is flashing worrying signals. And the big Japanese car makers will take the first hits.

Car-lease volumes in the U.S. have risen rapidly over the past two years for Japan’s big three car makers. Toyota, Honda and Nissan have been among the most aggressive this cycle, with close to 30% of sales coming from lease transactions for all three, according to Jefferies. For Ford Credit, for instance, the rate…

Article source: https://www.wsj.com/articles/used-car-prices-put-auto-finance-in-a-pickle-1490073879