Trade News

DETROIT — With the financial pain of the global microchip shortage largely behind them, General Motors and Ford Motor Co. are racing to become leaders in electric vehicles even faster than planned with the help of growing profits from their internal combustion vehicles.

Last year's results — record adjusted earnings for GM and nearly $18 billion in net income for Ford — have given the automakers more confidence to accelerate their EV commitments.

Although the chip shortage persists, forcing Ford to cancel production this week at multiple truck plants, the two biggest Detroit automakers expressed confidence it will have little effect on future revenue and profits. After seeing its chip supplies improve in recent months, GM projected its global sales would grow 25 to 30 percent in 2022, with most of the increase in the second half of the year. Ford said it expects 2022 volumes to increase 10 to 15 percent.

The automakers now are s…

Martin Chevrolet-Buick-GMC has become an open book. The Texas dealership posts a list of incoming vehicles online so it can turn that inventory faster.

Customers can browse the frequently updated spreadsheet of what's in transit and in production and then call, text or chat online with the sales team to reserve a vehicle with a refundable $1,000 deposit. From August through December, reserved vehicles accounted for 17 percent of the store's new-vehicle sales, increased sales team engagement and improved turn rate, said Janet Martin-Clark, vice president of the store in Cleveland, Texas.

At the end of January, the store had 75 in-production vehicles listed, seven of which were reserved or had pending reservations, and 21 in-transit vehicles featured, eight of which were reserved or pending.

The store came up with the strategy in response to the global microchip shortage that has hampered vehicle production industrywide and left dealershi…

LMP Automotive Holdings Inc. said the seller in a proposed transaction in which it was to buy five import dealerships in Texas will keep a $1.5 million deposit per terms of the contract, which was terminated this week.

The Fort Lauderdale, Fla., publicly traded company said in a Thursday regulatory filing that its asset purchase agreement to buy dealerships from Steve McGavock was terminated Monday. In a news release, LMP CEO Samer Tawfik said the termination happened "due to the expiration of the closing date deadline."

In September, LMP announced the planned acquisition of four Nissan dealerships in Abilene, Amarillo, San Marcos and Lubbock and an Infiniti store in Lubbock from McGavock, principal of McGavock Auto Group. The deal also included real estate.

LMP said then that the transaction, predicted to generate about $592 million in annual revenue, was slated to close in the fourth quarter.

The company in a Septembe…

DETROIT — The automotive supply chain has been wracked by a multitude of events almost nobody saw coming, whether it be the pandemic, the global semiconductor shortage or the huge container ship blocking the flow of goods through the Suez Canal last year.

But Stellantis now says its suppliers must bear the full risk of such disruptions in the years to come. Updates to its purchase order terms and conditions declare that "all future events are deemed foreseeable" by a supplier, which must "assume such events will occur."

That language is particularly jarring for suppliers considering new contracts at a time when the industry has suffered through a confluence of crises, said Jonathan Jorissen, a lawyer at Brooks Wilkins Sharkey & Turco.

"A key defense that you have under the law is the force majeure concept, or the commercial impracticability, that if something happens that's unforeseeable at the time of the contract, you're excused from your perform…

Reynolds and Reynolds Co. aims to step up its acquisition activity as the retail technology giant charts its future product portfolio.

In addition, the privately held dealership management system provider will take a more public stance with the industry, company President Chris Walsh told Automotive News. That will happen through both Walsh's role as the public face of Reynolds and with the hiring of an industry relations director, whose job will be to engage with groups such as state and national dealer trade associations and dealership consultants.

Walsh, 57, who was promoted to company president in January from his role as executive vice president of sales and marketing, also will help steer the Dayton, Ohio, company's ongoing work to simplify its DMS contracts and improve its relationships with dealer customers who have perceived Reynolds to be inflexible.

Walsh will work alongside Willie Daughters, 54, who last month was prom…

Audi is considering investments in clean energy for sites in China where the luxury carmaker is struggling to source enough power from renewable sources to churn out hundreds of thousands of vehicles each year.

Volkswagen Group’s key earnings contributor has pledged to make its production network carbon-neutral by 2025, and has already moved plants in Belgium and Hungary onto a net-zero footprint. The task is more complex elsewhere, and particularly in China where fossil fuels remain a dominant source of power supply.

“China is the most difficult market to precisely forecast the tipping point toward electric vehicles, partly because of the availability of green energy sources in some regions,” Chief Financial Officer Juergen Rittersberger said in an interview. Audi may move to “investing in green energy ourselves at some locations.”

The move would echo efforts by peers such as China’s biggest private carmaker, Zhejiang Geely Holding Group Co., which pla…

Adient took blows to its top and bottom lines in the fiscal first quarter due largely to the semiconductor shortage, volatile production and the same supply problems that have pinched the industry for more than a year.

The seating supplier, whose North American headquarters is in suburban Detroit, had a net loss of $54 million in the first quarter of fiscal year 2022, compared with a $150 million gain in the same period last year, according to its earnings presentation Friday.

The company's revenue slipped to $3.5 billion, down from $3.8 billion a year prior. The company recorded $13.7 billion in revenue in fiscal year 2021 and said it expects full-year revenue of $14.8 billion in FY2022.

Executives said on an earnings call Friday that the unpredictability of operations is hindering the company's progress on improving its balance sheet.

"It's the only time in my career I can recall the industry being impacted by supply constraints versus demand,"…

DETROIT — As Lincoln Motor Co. celebrates a century of ownership under Ford Motor Co., the luxury brand is preparing this year to show its first battery-electric vehicle.

Lincoln last year announced plans to launch four new EVs by 2030. Automotive News has reported the first will be an electric Aviator crossover, although output has been delayed until late 2024.

Ford's luxury division already trails competitors such as Cadillac, which plans to begin production of the Lyriq EV in the coming months, in the automaker's transition to electric vehicles. Tesla Inc. and startups such as Rivian, Lucid and others are demonstrating that luxury customers are willing to pay for battery-powered vehicles.

"Premium buyers are definitely adopting electrification faster than the mainstream buyers, so for Lincoln we definitely want to move quickly, but we also want to make sure we're methodical in thinking through all the different impacts," said M…

WASHINGTON — Dealership owner Bernie Moreno on Thursday ended his campaign for one of Ohio's seats in the U.S. Senate after having a private meeting with former President Donald Trump.

"I am a businessman, not a politician. Business leaders recognize patterns before they happen," Moreno said in a statement. "After talking to President Trump, we both agreed this race has too many Trump candidates and could cost the [Make America Great Again] movement a conservative seat."

Moreno, 54, had been vying for the GOP nomination to succeed Sen. Rob Portman, a Republican who announced last January that he will not seek reelection. Portman's term expires this year.

Eight other Republican candidates are bidding for Portman's seat, according to the Ohio Secretary of State.

"This decision may surprise some, but it is what I feel gives us the best chance of success," Moreno said. "The stakes are too high."

Instead, Moreno will focus his efforts on support…

A marketing company and its owner have appealed a Federal Trade Commission ban following what the agency deemed deceptive dealership mailers and auto lending disclosure violations.

FTC commissioners in October ruled 4-0 that Traffic Jam Events and its owner, David Jeansonne, had violated the Federal Trade Commission Act and the Truth in Lending Act with dealership promotional materials. The agency banned both the company and Jeansonne from advertising, selling or leasing vehicles for 20 years.

"They put me out of business," Jeansonne said Thursday.

According to the FTC summary judgment opinion by Commissioner Christine Wilson, the agency took exception to dealership promos describing a "COVID-19 economic stimulus" or "economic stimulus." It said one mailer on behalf of Dothan Chrysler-Dodge-Jeep-Ram-Fiat in Alabama featured a manila envelope declaring, "Economic stimulus documents enclosed." A representative of the dealership declined to comment.

…

WASHINGTON — The U.S. House of Representatives passed on Friday a multibillion-dollar bill aimed at increasing American competitiveness with China and boosting U.S. semiconductor manufacturing, despite Republican opposition.

The Democratic-majority House backed the "America Competes Act of 2022" by 222-210, almost entirely along party lines. One Republican joined Democrats in voting for the measure and one Democrat voted no.

Passage set up negotiations with the Senate on a compromise version of the legislation, which must pass both chambers before it can be sent to the White House for President Joe Biden's signature.

The talks could take weeks or months, although Biden urged quick action in a statement praising what he called "vital" legislation.

"Every day we delay we fall farther behind and that increases our domestic national security risk," Commerce Secretary Gina Raimondo said at a news conference.

The vote took place hours after the …

DETROIT — Ford Motor Co. on Thursday said fourth-quarter net income jumped to $12.3 billion from a $2.8 billion loss a year earlier, despite continued production and inventory struggles stemming from the ongoing semiconductor shortage.

The profit includes an $8.2 billion gain from Ford's investment in Rivian, the EV maker that went public in November, though Ford was in the black for the quarter even without that and other one-time items.

The automaker reported adjusted earnings of $2 billion before interest and taxes, a 19 percent increase from the same period a year earlier.

Revenue in the quarter rose 5 percent to $37.7 billion.

For the full year, the automaker reported net income of $17.9 billion, up from the $1.3 billion loss it incurred in 2020, the first year of the coronavirus pandemic. It posted adjusted EBIT for 2021 of $10 billion, roughly four times its 2020 earnings on that basis and in line with its estimates after it reclassified …