Today on The Morning Dump, we’ve got bad Q3 reports, a novel Ford approach to firing people, and mobility.
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.
Is VW Still A Mobility Company?
Every company is a technology company. And every company that isn’t a technology company is a mobility company, which is like a technology company but ::waves hands:: cars.
Volkswagen just joined Ford in bailing on self-driving company Argo to instead focus on a partnership with MobilEye. Now Volkswagen has announced it’s “selling” its in-house EV car-sharing business UMI Urban Mobility International GmbH to MILES Mobility to MILES mobility, another German-based company.
From VW’s press release:
“New mobility services such as car subscription models and car sharing are enjoying strong demand. This is a trend in which we would like to participate more. With a strong partner to operate the fleet and with vehicles from various Volkswagen Group brands, car sharing will become available to an even broader spectrum of customers. We are pleased to have found the perfect partner in MILES, whose portfolio will be bookable via the Volkswagen mobility platform. WeShare customers will then benefit from car sharing services in eight German cities,” says Dr. Christian Dahlheim, Chairman of the Board of Volkswagen Financial Services AG, which holds consolidated responsibility for the Volkswagen Group’s core activities in the field of mobility solutions.
Sure. As part of the deal MILES has ordered 10,000 electric cars from VW/Seat/Cupra/Audi.
[Editor’s Note: A few years ago, Porsche invited me to Germany to show off the new headquarters of “Porsche Digital,” an entirely new subsidiary within the company dedicated to…digitalization — whatever the hell that is. You’d think, of all people, I’d know given that I got a tour of the headquarters and a thorough explanation of Porsche Digital’s mission, which — per the subsidiary’s website — is:
Digitization is disrupting entire industries, including the automotive sector. Porsche sees these changes as opportunities that should be explored and utilized.
That is why Porsche Digital was founded in 2016.
We aim to find and scale new digital business models as well as optimizing existing products. Therefore, we develop digital products and services, create technologically advanced business solutions, and serve as a catalyst for the digital ecosystem.
Right. Anyway, that was a bit of an aside, but the point is that car companies have been diversifying for a long time, buying rental car companies, private jet companies, and much more. It’s trendy. The hot new thing has been automakers calling themselves “mobility companies,” in part due to investments in self-driving car tech and in rideshare companies. It’s no surprise that we’d eventually see some “mobility” investments get moved around. -DT]
Toyota Cuts Forecasts, Blames Chips
Toyota’s profits are down 25% in Q3 relative to 2021, which is worse than expectations, and they’re blaming the chips!
Per Reuters via Yahoo!:
“We’re out of the worst phase, but … it’s not necessarily a situation where we’re fully supplied,” said Kazunari Kumakura, Toyota’s purchasing group chief. “I don’t know when the chip shortage will be resolved.”
Operating profit for the three months ended September fell to 562.7 billion yen ($3.79 billion), well short of an average estimate of 772.2 billion yen in a poll of 12 analysts by Refinitiv. Toyota sales reported a 749.9 billion yen profit a year earlier, and 578.6 billion yen in profit in the first quarter.
“I don’t know when the chip shortage will be resolved.”
That’s a rough answer when your job is buying things to make things.
There is an argument to be made that much of what is driving inflation is not government spending or even supply chain disruptions, but corporate profits. It’s probably a mix of multiple factors, but it’ll be interesting to see if costs drop relative to inflation when the chip shortages and all the other disruptions melt away.
I’m putting a marker down to track it, though. The starting MSRP for a Toyota Highlander is: $36,420. Let’s check in on that number from time-to-time.
Skoda Made Some Money, Though Slightly Less Than Last Year
There are a lot of morning shifts/dumps/roundups/wrapups, but there are none as committed to bringing you the important Skoda news as this one. And I’m gonna level with you. I’m not gonna sugarcoat it. In spite of a truly wonderful suite of products from the Czech brand, it did take a little hit this quarter.
The company is calling its returns “stable” with $850 million profit through the first three quarters of the year, which is off 4.9% from the same period in 2022. This is as deliveries fell 22.3% year-over-year due to chips, supplies, and the war in Ukraine.
They’re profitable, though. They’re still making a profit. Let’s not lose sight of that. It’s tough times in Central Europe. Did I mention the war?
Yet, somehow, these hard-working people are still making Superbs for you (though, honestly, not many of you) to enjoy. Look at that thing above; doesn’t it look great? One might even say it looks…[Editor’s Note: Sorry, joke was too bad. Had to remove it. -DT].
Ford Offers Severance To Low-Performing Employees
Most modern corporations have what’s called a “Performance Enhancement Plan” to get employees who are underperforming back on track. In some cases it exists to provide support to some people who, simply, need a little attention. In other cases it’s a way a corporation can create a paper trail to try and cut-off a wrongful termination suit.
Rather than deal with all the tsuris, Ford is trying to shortcut the process by offering employees a PEP or just severance. As The Detroit News reports:
The updated policy now allows employees who have reached that point of intervention to leave the company with severance payouts based on length of employment, continuation of benefits and career transition services. The process would remain unchanged for those who opt to go through a PEP rather than leave — meaning they could be subject to termination, without severance, if they ultimately fail to turn around their performance.
I could see situations where this could be abused (the inherent threat that you could be fired anyway might force people into taking the money) but, for situations where the employment is a bad fit, it seems like a softer departure.
The Flush
Define: “Mobility.”
Photo credits: Volkswagen, Toyota, Apple, Skoda
My doctor keeps talking to me about “motility”. Is that the same thing? They seem to produce similar results.
Jacques Nasser had the same dumb idea at Ford a quarter-century ago.
Jacques “The Knife” Nasser…
“Mobility: I looked it up. It’s French for horseshit. They’ll look to screw you anyway they can”.
— Carroll Shelby (Matt Damon in Ford vs. Ferrari) paraphrased
“Look at that thing above; doesn’t it look great? One might even say it looks…[Editor’s Note: Sorry, joke was too bad. Had to remove it. -DT].”
I’m going to take a stab at this: Look at that thing above; doesn’t it look great? One might even say it looks superb.
Way back in the day, the stock companies like Merril Lynch would routinely and yearly fire the lowest performing 10% of their brokers – talk about the sword of Damacles……
And that right there is why people distrust financial services people. If the incentive is to make oodles of money, fiduciary duty falls down the list. Someone needs to be paid to keep the lights on and computers humming and balance the funds. But sticking customers into a high-churn portfolio that generates lots of juicy commissions and trade fees is just wrong.
Doesn’t surprise me at all that Toyota is struggling with IC shortages. People think it’s clever microchips and GPUs that are in short supply, since they’re exposed to it through PS5 scalping and the like. The bigger issue is that nearly every important IC is in short supply. Precision references, amplifiers, power conditioning. Really basic, unsexy stuff that every single electronic item uses are on huge lead times.
Mobility: The extent to which a body of solid rock is capable of viscous flow as a consequence of rheomorphic conditions.
Speaking as a geologist, I’ve never understood why car companies were so interested in this in the first place.
Sounds like you want the mantle all to yourself.
“Speaking as a geologist, I’ve never understood why car companies were so interested in this in the first place.”
Obviously to see how they can squeeze yet more blood (profit) from stone (customers).
The sooner we as a society turn our backs on marketing speak the better. Using meaningless phrases like “be iconic” to get you to buy a Cadillac, its just dumb and lazy.
Every product now has some blurb about having “_________ technology”, where the word before technology is some trademarked nonsense that of course no other product could be described as because you’ve trademarked the phrase.
I swear man, we need to get back to teaching critical thinking skills to our kids.
Thank Cthulhu we’re approaching the end (of the current phase) of this Mobility Bullshit.
Talk about your irrational exuberance. Driving is a complicated task and even the best computer Earth’s evolution has to offer, the human brain, still fucks it up on a regular basis. We are long way off from seeing a machine emulate such raw processing power no matter what one particular schmuck thinks.
There’s no “possible abuse” with the inherent threat of firing without severance with a PEP, that’s exactly what it is for. Ideally, they lose the dead weight and the real dummies get doubly penalized by choosing the PEP only to be later fired with nothing. Reality, though, is that, while it will get rid of some dead weight people or those whose jobs changed, but were kept around despite nothing much to do, it will largely be driven by popularity with managers—some good, unpopular people will be lost and some bad, popular people will be kept. So it goes.
RE: “digitization” quote from Porsche. Holy crap, that’s some of the most egregious marketing wank I’ve ever read. It says absolutely nothing.
And kudos on the Severance reference – one of the best series ever. Can’t wait for season 2! I keep hoping my employer will offer waffle parties as an incentive, or at least the finger cuffs…
“Mobility”: In my mind, as a disabled veteran, this should have very little to do with cars and more to do with helping people who have mobility limitations get around more easily. Where’s my robotic sedan chair, or powered exo-skeleton so I can enjoy steep-mountain hiking again!?
Drink a shot every time they say Digital!
Glad you brought up the disabled mobility angle. But in addition to your ideas, may I suggest Professor X’s hover-lounger?
Mobility derives from the word “mob,” which can mean “mafia” or “angry group.” And the suffix “ility” means “a quality or condition of being,” so mobility companies are therefore either criminal organizations or loosely affiliated groups of angry people.
Given what we know about VW’s scandals, criminal organization doesn’t seem too far off.
Ey, don’t lump us in wit them Joiman mooks, we gotta respectable waste disposal enterprise ta run here, capisce?
Car companies branding themselves as mobility companies is the same as Tesla-stans saying Tesla isn’t a car company, it’s tech or energy company. It’s all bullshit! But, here me out on this, it’s also all cyclical. It’s like GM owning Frigidare and Hughes Aircraft Company
It actually holds more water with Tesla given their charging network as well as their solar and powerwall products.
Mobility–the ability to build mobiles.
A few years back, the company I was with did something similar to Ford’s plan. Every department needed to give annual reviews on a bell curve, then all the people on the low side of the curve were offered a severance or a performance plan that was rumored to be designed to push people out. The really rough part was that you could have a high-performing department, but the reviews had to be on a bell curve, so your department would still lose at least one person.
But, hey, the company avoided layoffs, since people quit “voluntarily.”
We had a round of optional seniority and age based early retirement offers with a strong undercurrent that if enough people didn’t take it, cuts would follow. They expected 30% to take it. Instead roughly 2/3 did, leading to a problematic brain drain.
Several of the just retired people were brought back as consultants for larger salaries, because one of the stipulations was that they couldn’t rejoin the company workforce.
The company I was in had tried that the previous round of non-layoffs and learned the same lesson in the same way. I wouldn’t be surprised if the consultant pay led to the need for the performance non-layoffs.
The missus used to work at a company that did that. Each of her five member team was rated on a four point performance scale, but her manager was only given ten points to distribute, with each point translating into a 1% pay bump.
It was not a particularly healthy work environment.
As for defining mobility, in theory it should mean coming up with novel ways to make it easier for all people to get around (see other comments about improving accessibility). In practice it is coming up with new and more complex subscription models for the heated seats already in your car.