Macron is apparently not happy with the Biden administration, Bird gives the bird to investors, Carvana cuts staff to try and save itself, and Ram 2500s have a little fire problem.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday
Looks Like Macron Doesn’t Want Automakers To Flee To The Land Of Freedom Fries
We’ve already covered how the Inflation Reduction Act is causing global automakers to move to the United States (along with cheaper energy and a market for EVs). Why? The sweet sweet tax credits that help automakers reduce the price of their cars are contingent upon production in the United States.
You know who doesn’t love this? European leaders already worried that disruptions from the war in Ukraine are already going to send automakers looking elsewhere to build things, apparently. To wit, Reuters is reporting that French President Emmanuel Macron is going to have a dinner for execs (including from Volvo and BMW) to try to convince them to say.
From the report:
French President Emmanuel Macron on Monday will host a dinner with a number of European chief executives to convince them not to move production to the United States, where lower energy prices and the Inflation Reduction Act is proving a lure.
European leaders have been alarmed by massive anti-inflation measures passed by Joe Biden’s administration, which make tax breaks conditional on U.S-manufactured content and which EU industries say make investment in Europe less competitive.
[…]
“We’re having difficulties with companies which are starting to consider offshoring their production or making future investment outside Europe,” a French official said, listing high energy costs and the U.S. legislation as reasons.
Carvana And The Lemonade Stand Problem
“Collapse of Carvana, the ‘Amazon of Used Cars’, Continues” is the how The Street puts it.
We’ve covered how the alt-car dealer has faced numerous lawsuits from state authorities and the risks that come with the securitization of its loans. Now Carvana is going to cut 1,500 jobs after cutting 2,500 positions in May. The Street has an email from Carvana’s CEO kind of explaining why.
“It is fair to ask why this is happening again, and yet I am not sure I can answer it as clearly as you deserve,” Chief Executive Officer Ernie Garcia told employees in an email on Nov. 18. “I think there are at least a couple of factors. The first is that the economic environment continues to face strong headwinds and the near future is uncertain. This is especially true for fast-growing companies and for businesses that sell expensive, often financed products where the purchase decision can be easily delayed like cars.”
In addition, “we failed to accurately predict how this would all play out and the impact it would have on our business. As a result, we find ourselves here.”
The underlying fundamental proposition of Carvana (mostly online, low pressure used car sales) isn’t a bad one. It’s basically CarMax 2.0. What Garcia isn’t saying here, though, is that the company benefited greatly from the pandemic economic environment (low interest rates, low unemployment, and federal stimulus checks) and used that tailwind to rapidly expand and “failed to accurately predict” what would happen when that environment shifted.
Think of a lemonade stand. You decide to sell lemonade in April and it’s a hit. By June the temperatures are super high and there’s been no rain for weeks. You sell more lemonade and make more money. With cold weather coming your best options are probably to diversify (hot cocoa stand?) or bank that profit to make investments over the winter to have more lemonade stands ready to go next summer. What Carvana seems to have done is… just keep building lemonade stands as fast as they could in the hopes it would stay warm forever.
Scooter Company Bird Is In Even Worse Shape
Micromobility (lol) company Bird probably wishes it had Carvana’s problems. Here’s a real quote from their latest filing with the SEC about their financial statements for the last two years:
[They] should no longer be relied upon. Similarly, any previously furnished or filed reports, related earnings releases, investor presentations or similar communications of the Company describing the Company’s financial results contained in the Original Filings should no longer be relied upon.
Ouch. The translation is: We screwed up and the money we said we made was more than the money we actually made.
What happened? According to TechCrunch, it seems like the company reported that they made money on trips that people took but didn’t actually pay for because the riders didn’t have enough money in their accounts. Bird went public with a SPAC (lol) last year and raised a bunch of money with a stock price as high as $8.29 per share last December.
The price as of this morning? $0.20. That gives the company a market cap of about $51 million. Double ouch.
Ram Is On Fire, In The Bad Way
If you have a Ram 2500 model built between 2020 and 2023 or a Ram 3500 built between 2020 and 2022 you might want to carry a fire extinguisher with you in the cab of your truck. Chrysler is recalling almost 250,000 of the trucks over a fire risk.
Here’s the full letter from Chrysler, explaining what’s probably happening:
A build-up of pressure and heat inside the transmission may result in a transmission fluid leak from the dipstick tube. Consequence: Leaking transmission fluid may contact an ignition source within the engine compartment, increasing the risk of a fire.
If you have one of these trucks you can expect a letter soon explaining how they’re going to fix this.
The Flush
Have you ever used a scooter rental service? What was your experience?
Photos: Emmanuel Macron/France, Carvana, Google, Stellantis
Instead of laying people off, shouldn’t Carvana be hiring people to do paperwork? I mean, being unable to keep up with all the title and registration work from the cars they DO sell and all ?
Say Carvana, Wondering how much you’re asking for one of those sweet delivery trucks? I need to see the title first.
I tried a scooter and crashed twice. Once the throttle wasn’t working right and suddenly kicked in and it sped into a bench. Once I was approaching a tree too fast and made a series of bad decisions that made it whip into my ankle and even cause a scar.
Both times the same couple rode by in an improbable show of sitcom reality.
France. Yeah we charge more, give worse workmanship, may set the plant on fire a few times a year when everyone goes on strike, because the baggetts in the vending machine went up a penny, and am constantly shitting on the automotive industry, EV or not. But please stay here.
Caravan is somehow a worse idea than CarMax.
Bird isn’t surprising considering they hire really anyone to change the scooters. And have a really bad idea of how much they pay for that.
Dodge. Did everyone forget, it’s Chrysler.
I have/had the bird app on my phone to keep my kids amused when we are at the Salt River in Phoenix. I did use it once for it’s intended purpose leaving LAX, to go back to the hotel after dropping my wife and kids off at the airport. It was a four hour wait for the shuttle to come get me. It took about 20 minutes to use the scooter. Plus I got a crap-ton of pictures of how bad LA is as extra evidence for wife as to why we should not in fact move to LA
Please inform David Tracy about LA
Bird went public with a SPAC (lol)
lmao
Have you ever used a scooter rental service? What was your experience?
My experience was everyone getting mad at the damn things being left in the sidewalk, in the road, wherever. After a while they sort of disappeared. I assumed they all got thrown into rivers by fed-up locals but it looks like the companies are still around.
I rode a Lime scooter during a work trip recently and I can’t say I’m in a big hurry to do it again. They’re kind of fun, kind of terrifying. They handle differently from any other two-wheeled vehicle I’ve ever ridden and the tiny wheels seem ill-suited to the cracked and potholed streets in most big cities. Also, the person who decided to put the rear brake on the right hand needs to be taken out back and flogged with a brake cable. That’s also the hand that controls the throttle, which means trail braking is extremely awkward at best. They should have gone with a motorcycle-style setup where the front brake is on the throttle hand since it’s less likely you’re going to be balancing the two like you do with the rear brake and throttle.
I suppose the exclusion zone is a good idea, but in my case it encompassed my destination so we ended up dumping our scooters in a big pile of scooters on a narrow-ish sidewalk right at the edge of the zone.
They did get us (most of the way) to our destination, but I can’t say they did so with any great deal of comfort or convenience.
Oh, another fun thing: A cop stopped and told us to get out of the street and use the sidewalk. First time I’ve ever heard of someone being told to ride on a sidewalk. In my experience most communities are militant about not taking bikes on sidewalks. We had two bikes and two scooters in our group, so this isn’t a scooter-specific thing either.
I got into bicycling a couple of years ago and was surprised to find my capital city allows them on sidewalks AND the roads.I couldnt shake the feeling a cop could stop me at any moment.
Now with scooters riding literally everywhere whether allowed or not, i wonder if bikes privileges will be collateral damage
“I’m sorry Mr. President, but you see, the French people just don’t want to wo…*breaks into hysterical laughter*…oh, who am I kidding? Nobody wants to work anymore. Although those 14 year olds at Hyundai have a great work ethic.”
What are you talking about? You give a french working guy his summer off, every holiday, allow him to sympathy strike a couple hundred days a year, give him his and everyone he is realated to birthday off, dont ask him to work weekends or holidays, 2 weeks vacation and you got a guy who will work like a snail on that one day a year he has left providing he isnt hung over or otherwise ill
And how can we expect those poor corporations to cut into record profits to pay workers? The lowest people on the totem pole and customers should take all of the responsibility for cost increases.
Bird is a nuisance company that makes cities look trashy by cluttering sidewalks with litter.
Seriously. I never understood why people made such a big deal about this until one of those scooter companies came to the university near me. Those fucking things got strewn everywhere. Haphazardly discarded all over sidewalks and roadsides of an otherwise nice, walkable campus. Makes the whole area look like the bedroom of a nine year old kid. Clean up your damn room, ya little brats.
That is the new generation. Live with your parents til they die. Complain you cant afford to move out while sipping $20 lattes at Starbucks writing your screenplay or pefecting your video game skills. Demand free college despite not wanting to work in your field anyhow unless you are hired as a CEO or Marketing Influencer. Demand that the government raise taxes on the parents you are sponging off of despite having a better quality of life than they had until they earned it and better than 75% of the rest of the world.
I suggest a new tax law. If you are an adult you pay 100% tax on the handouts you get from your parents and the government above the income level of the average person in a 3rd world country.
I haven’t used any rental scooters, although I’ve used Toronto’s municipally run bikeshare a few times. It works pretty well, the pricing isn’t too bad as long as your rides are under a half hour, although the bikes are hefty and a bit slow (they’ve started adding e-bikes though, which I’m eager to try out as a couple of the hills near my house are a bit nasty). That said, one of our councillors complained recently that it’s a bit of a money-losing venture (although, quite a minimal loss for something that’s effectively a piece of public transit infrastructure), I’m not at all shocked that private scooter companies can’t do *that* much better.
I used a scooter rental in DC and other cities. The major unaddressed problem in DC is that most people bring kids with them when they visit, and there’s no provision for children or even teenagers to use them, even teenagers with a driver’s license! So for a tired family that wants to get to the next attraction or back to the hotel, they’re not at all useful.
There are ways around the age limit, and many people do that. But it’s a major pain.
Also for groups, you can spend several dollars of rental time just getting a scooter for each person in your group. At one spot where they were scarce, I had over $10 in charges on mine by the time everyone was checked in and mounted up. A taxi would have cost about the same.
For adults who use them occasionally, those who can afford the relatively high cost of renting them often, or those on a subscription discount plan, they’re pretty close to ideal for solo or two at a time transport in fair weather. But if you’re outside any of those, the disadvantages add up quickly.
I still like them a lot. But I wish they had 10 inch or larger spoked bicycle wheels instead. Those little tires don’t ride very smoothly or stable over any but the best surfaces. Most of the time, an e-bike rental is a better choice.
Does Bird have an accounting department? People owe you money, that’s just accounts receivable.
And why do they let people take rides without money in the first place? I’m guessing they’re too broke now to collect from them.
It’s a risk you take when you allow people to create accounts with prepaid visas and no confirmation of identity. Compounds well with the inability of a minor to enter a legal contract.
Hard to go after fictional people and minors, especially for a very small amount each. Ends up costing you more to try to recover the money than it does to write it off.
That said, the whole model is pretty much destined to be unprofitable. The only way they could really hope to make money was a lot of large contracts with cities, and they didn’t really get cities excited to subsidize this whole thing.
I triggered the moderation, and I think I know why. The reason they can’t collect is the small amounts and the likelihood people gave them fictional info. That and minors can’t enter a binding contract.
They needed cities to get excited and subsidize them more than they charged for rides, and that didn’t happen.
Soon to come on Shitbox Showdown: an entire scooter company
Put it up against the husk of an abandoned EV startup. Because it’ll definitely lose against anything that normally shows up on there.
Here’s my Carvana theory. If you look at the locations of their first vending machines, (Dallas, Houston, Atlanta) they are all near the HQ’s of publicly traded dealership groups. Ernie Garcia Jr was trying to build something to flip with the money dad gave him from Drive Time. None of them bit, pandemic happened, business looks good and he decided that he was a genius and kept the strategy the same.
For a moment there, I thought ‘The Street’ was Mercedes’ new nickname.
*Announcer Voice* On today’s adventures of Mercedes “The Street” Streeter we see if she buys a dilapidated VW or a dilapidated Bus.
In a stunning twist it was a dilapidated VW Bus! Maybe throw a decoy Smart in there. lol
“What Carvana seems to have done is… just keep building lemonade stands as fast as they could in the hopes it would stay warm forever.”
Which isn’t helped by the fact that Carvana is just Ugly Duckling/DriveTime in a new paint scheme, but now with more illegality. They’re facing uncountable lawsuits for failing to register cars, failing to transfer titles, license suspensions, selling known lemons without required disclosures, and at least 3 class actions including one shareholder class action alleging material misrepresentation.
Which based on history will do absolutely nothing. Ernest Garcia II and III and their friends will keep their billions, switch frauds again, and commit some more crimes to make themselves wealthier.
“Ouch. The translation is: We screwed up and the money we said we made was more than the money we actually made.”
Actual translation: “Uh yeah remember all those laws that came about because of all the accounting fraud? We engaged in some light accounting fraud. Everywhere. The whole time.”
If the regulators actually did their jobs, they’d be perp-walking every Bird executive that signed the filings.
“A build-up of pressure and heat inside the transmission may result in a transmission fluid leak from the dipstick tube.”
Well, that’s not good.
This specifically affects the 68RFE. The 68RFE’s an evolution of the 545RFE. They’ve always had a problem with the pressure transducers, but that’s the sensor which should warn of the overpressure. (It’s also a pretty minor repair. No transmission drain required.) But the pressure levels in these is fairly low. Low enough that a Sonnax line booster’s pretty much step 1 for poor shifting complaints.
So this is almost certainly a mechanical installation defect – crushed/damaged O-ring, or incorrect O-ring on the dipstick tube.
Which is the one, singular, obnoxiously difficult and complicated repair on these transmissions. It’s easier to do the entire valve body than the dipstick. You pretty much have to disassemble the driver’s half of the engine to get clear access. Otherwise it’s threading a needle blindly.
“Have you ever used a scooter rental service? What was your experience?”
Nope. Seen enough of them and their people that even if the whole idea wasn’t ridiculous to begin with, I would never trust any of them with my credit card information.
I bet the dipstick tube fix will be to install a locking one.
Nope, no can do. Would require a whole new transmission because that’s a major casting change on the case. And these are already 3-point or 4-point anchored. They bolt at 1 or 2 points on the engine, 1 on the transmission, and protrude into the case past the sealing point.
What I referred to as an O-ring for simplicity’s sake is actually a rather more complicated part, referred to as a ‘dipstick tube boot’ or ‘boot seal.’ It’s an inch long rubber piece that essentially incorporates two O-rings. Doing it this way makes it much more tolerant of flex and vibration, and provides a better overall seal. Dipstick slides into the inner O-ring portion, transmission protrusion mates to the other inner O-ring, and then the outer O-ring and lip provide sealing to the body and splash protection.
It’s actually a really brilliant design and I love it. (It also makes it possible to have a dipstick or use a sensor without a housing change, and switch between the two at leisure.) But if somebody at the factory was inserting it at an angle? They could easily tear it, causing a significant leak. Which, yes, speaking from experience. It’s such a known problem that of course The Purple Scam Artists sell an overblown, unnecessary part using the most bombastic language, like telling you every 68RFE owner’s truck has burned down. (No.)
On the plus side, if it is that, it really is an easy fix. It’s a single simple rubber part and it’s not backordered. Which is the most unbelievable part of it by far. But this assumes mechanical error, mind.
The only other time these spew fluid out the dipstick, is when you’ve quite literally boiled the ATF or fried a clutchpack so badly – both of which are mandatory full reman events. The ‘pressure warning may indicate’ has me thinking bad seal though, because the transducer is nearby in circuit and would likely see a pressure drop from a bad seal leak. I mean, mine did.
Just vent any boiling transmission fluid into the exhaust pipe and burn it off. Problem solved, plus it will look cool as hell to have Rams spewing flames out the pipe until the tranny runs dry and they stop dead.
Bought my wife a ca from Carvana with a clean Carfax. When I went to trade it in a year later I found out that the passenger side was repainted for a repair. I’ll never buy from them again, but I might not have a chance if things keep going this way.
about 3 years ago, my wife and I took a day trip to Atlanta. We spent a part of the day at Piedmont park riding on some of those scooter things (they may have been Birds. there were scooters from several brands there and I know Bird was one of them). It was a fun novelty, but not something that I would spend money on regularly. Plus the bad behavior and poor manners of of most of the youths (who were the primary consumer of the services) left a bad, if not altogether surprising, impression. Also, seeing thousands of scooters scattered about waiting for riders is not a good look. And scooters being thrown in ponds, in bushes, on top of parked cars, in the middle of the road, etc seemed like something that any city would be loathe to encourage. My home town ( a medium sized city in the southern Appalachian foothills) has banned these things since day one for the reasons described.
I was in downtown Atlanta three years ago. You could barely walk down the sidewalk without tripping over one of those things. There’s no consequences for being a total dick with them. Imagine what would happen if you could just rent a car and then just leave it anywhere for someone to come pick up. Park it on the sidewalk. Leaving it sitting in the middle of the road. Then you get to understand how much of a pain these businesses are to the people who actually live in these areas.
I’m torn. I’ve never personally encountered them, but–it sounds more like it’s a human behavior problem than a scooter problem, right? (Not that that doesn’t implicitly shift the burden of mitigating the human behavior problem onto the mobility company….)
I’m a 30-minute walk from my mechanic. If I want to leave my car with them, it’s not a pleasant walk for me: it feels stupid and pricey to use ridesharing; I have no room in my apartment for a bicycle even if I’d feel safe using one; and electric scooters are effectively illegal to use in PA currently.
Better rented scooters on the sidewalk than more cars on the road, right? But I guess unless you severely penalize people for not returning the scooters to designated spaces (and have to keep track of that somehow), it’ll be really hard to discourage them being left out haphazardly.
It’s both behavior and the way the scooters work. There aren’t designated drop-offs. You get done with it, you end the ride and leave it where it is. It’s like if there weren’t shopping cart areas in parking lots: some people would put them where they would be the least intrusive, others wouldn’t care. It would probably be better to have designated drops, like shopping carts do, but that might limit the use of the scooters, since people wouldn’t necessarily want to park their scooter and walk a couple blocks.
Generally speaking, municipalities with bicycles for rent do better: they almost always lock into some bike rack and continue to accrue charges until properly put away. You still get the occasionally jerk who uses a card with limited funds and drops the bike wherever, but most people put them away. But there are fewer points to rent/drop off bikes, so they may not get enough use.
Obligatory
♪♫ This Ram is on fiiiiiirrreeeee ♫♪♪
Also:
♪♫ Ram-is on fi-re ♫♪♪
2500s bursting into flames at RAM Ranch…
Those scooters irritated me at first, but I tried one and the geofencing makes sure you can’t be too much of a nuisance. In areas that should be pedestrian-only, you can only use it as a slower (and heavier) foot-powered scooter while it tells you not to use it there. It was a little frustrating to see bicycles zoom through some of those same areas, but that is not the fault of the scooters.
I do still wonder what the liability will look like when a kid gets hurt crashing one and there is no proof of parental consent to whatever liability waiver I skipped through to try one out. While the parent is largely responsible for their kid’s phone use, it doesn’t seem like these companies put many safeguards in place to prevent misuse, and that might come back to bite them.
It was already rather cost advantageous to stick car factories in the US: Most of the new plants are in the south where energy, real estate and labor is cheaper. State governments bend over backwards to prevent unions. They get massive tax cuts and financial incentives. I grew up in that region. Many of the car factories were placed in depressed rural areas with few opportunities. So of course for the locals getting paid $20 an hour sounds amazing. I just looked up the average wage for an assembly line worker in KY and its $31k a year. That is ZILCH compared to other areas.
That’s the direct opposite of what happens in many EU countries where they actually care about the employees, are unionized, pay them decently, hold companies accountable for emissions and pollution and the unions have a real say in how things are run.
In the end its all about the money and if the product can be made cheaper and with less “stuff” to get in the way? That is where the factories get setup.
What are you talking about? You give a french working guy his summer off, every holiday, allow him to sympathy strike a couple hundred days a year, give him his and everyone he is realated to birthday off, dont ask him to work weekends or holidays, 2 weeks vacation and you got a guy who will work like a snail on that one day a year he has left providing he isnt hung over or otherwise ill
It’s outsourcing to a developing nation that somehow has the world’s reserve currency.
What is Macron smoking? Because my shit is at 38% and is nowhere near as potent whatever this fucker is inhaling.
So, Ram is emulating their Italian owners vehicles as well?
well sort of, this is Diesel Rams, and not likely to be as expensive to fix as the incorrectly machined Maverick with Oil leaking out the front of the engine and catching fire. Those guys temp fixed all units by removing an aero shutter on the radiator and drill 4 inch holes in the under carriage plate so the oil can drain out and the wind can blow out a fire I suppose.
… what?
I was momentarily flummoxed by the capitalization of Oil. Then after the Oil issue, I was halted by reference to the 4 inch holes. After some thought, I decided against asking.
I’m at work, so I’m afraid the answer could get me in trouble with HR.
What do you have that’s 38%, dry sift ?
I work for a dispensary part-time. I have all the goodies at my disposal.
See? If they’d just kept building full-size trucks with manual transmissions, they wouldn’t have that fire risk.
A buddy of mine got one of the last manual Dodge Ram 2500’s. I’m pretty jealous.
Haha suck it Europe
I read this in Sean Connery’s Suck it Trebek voice. Infinitely funnier.