It’s been a busy week for the auto industry, as Tesla released its quarterly report and Fiat Chrysler laid out its five-year blueprint and strategy. Lots of other, smaller things happened too, however, that may have gotten lost in the shadows, even in just that last day or two.
Tesla is finding itself in the midst of another legal battle, while Toyota is moving production of the new Camry out of Subaru’s Indiana plant. General Motors has announced quite an interesting recall, and Fiat has finally chosen a home city to run its operations.
Here are four recent news stories that are making headlines now.
1. Tesla faces (another) legal struggle, this time in Missouri
Well, state legislatures are at it again, this time in the state of Missouri. On Thursday, Tesla reported on its website that a bill was altered as “dealers proposed new language in an existing bill that would force Missouri consumers to purchase new vehicles only through middleman franchised dealers,” the company said. “This extraordinary maneuver amounts to a sneak attack to thwart due process and hurt consumer freedom in Missouri.”
“This change is not an innocent, minor amendment. It is completely unrelated to the original bill, which was about laws regarding all-terrain vehicles, recreational off-highway vehicles, and utility vehicles,” Tesla went on. “It is also a complete 180 from current law. The current statute only bars franchisors from competing against their franchisees (for example, Ford cannot compete against Ford dealerships).”
2. Toyota may bring more Camry production to Kentucky
Toyota (NYSE:TM) will reportedly be moving production of 100,000 Camry units from the Subaru plant in Indiana to its facility in Kentucky. Fuji Heavy Industries, the parent company of Subaru which Toyota is the largest shareholder, has been producing the popular sedan at its facility in Indiana with some excess capacity, but given that Subaru is headed for its sixth consecutive annual sales record, Fuji needs the space to focus on its Subaru brand.
Toyota is rolling out a new Camry model with more “emotional” appeal, as the current model has struggled to hold its own against new bolder and competitive offerings from Ford and others. No details were provided as far as what would be done to the Kentucky plant to accommodate the surge, how many positions it would open up, or what the financial ramifications would looks like.
3. Fiat chooses London
The new Fiat Chrysler Automobiles merger has chosen London, England as its happy medium between Fiat’s Italy and Chrysler’s Michigan. That’s where the company will be based, though its primary stock listing will be in New York. Fiat Chrysler has been looking at the U.K. for a while, but until now hasn’t chosen a city; England is favored by large corporations because it offers a comparatively forgiving tax structure.
Manufacturing will still be centered around Italy, though by moving to England — where the tax rate is scheduled to drop to 20 percent from 21 — Fiat Chrysler will thereby be avoiding the 31 percent tax rate imposed by its native country.
“If you put it in Detroit, you make Fiat people feel bad, and if it’s in Turin, you make Chrysler people feel bad,” auto analyst John Wolkonowicz told Bloomberg. “This way it’s neutral ground.”
4. GM recalls Malibu and LaCrosse
To put it mildly, General Motors (NYSE:GM) has had a rough year on the recall front. This situation didn’t improve at all this week, when it announced a recall of 8,208 new Chevy Malibu and Buick LaCrosse sedans. But that’s not even the worst part — it’s because the rear brake rotors may have accidentally been installed in the front brake assembly. That’s not going to help the company’s competency image at all, but it should be given credit where credit is due: GM initiated the recall early on, knowing it would look bad on its end, to ensure that the potential reduced braking performance didn’t come with adverse consequences later on. Only about 1,700 of the vehicles have actually be delivered to customers.
For those keeping count, that’s the fifth recall from the House of Barra in the last two weeks. It also illustrates two distinct things at the company: Firstly, that the production system has more than a few hiccups that need ironing out, but secondly, that the higher-ups are gutting the house to get to a clean slate with which to build up from in the future.