Bentley Blames ‘Emotional Sensitivity’ For Slow Sales

Photo: Bentley
Photo: Bentley

Good morning! It’s Tuesday, March 19, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: “Emotional Sensitivity” Slows Bentley Sales

Bentley reported a lower-than-expected operating profit for 2023 this week due to high interest rates and a weak-ish economy, but said its performance had stabilized and new model launches would help it in 2024. From Reuters:

“We had an uneven performance for the first time in about four years,” CEO Adrian Hallmark told reporters. “Even though our customers can still afford our cars... there was a level of emotional sensitivity that slowed down demand.”


I’m not exactly sure what “emotional sensitivity” means. Is it wokeness? I feel like it’s wokeness.

For those who leased rather than bought cars with a starting pre-tax price above 220,000 euros ($238,590), interest rates had led to a tripling in monthly fees last year, Hallmark said.

He said the launch of four high-performance hybrids this year should spur sales as the company gears up to launch its first fully electric Bentley in 2026.

Bentley is aiming for an all-electric model lineup by 2030, but Hallmark said its hybrids were likely to be on sale after that deadline as the company seeks to ensure a return on its substantial investment.

The luxury automaker in January reported an 11% drop in sales for 2023 following a record year in 2022.

The British luxury unit of Volkswagen posted an operating profit of 589 million pounds ($748 million) for 2023, down nearly 17% from 708 million pounds in 2022.

Reuters says revenue was down 13 percent (about $3.7 billion) from just a year earlier, and Bentley says its profit margin also dropped to 20.1 percent from 20.9 percent in 2022 because of new vehicle investments.

2nd Gear: Fisker Is In Big Trouble

Fisker is pausing Ocean production for at least the next month and a half as the nascent electric vehicle maker attempts to rein in inventory and avoid possibly having to file for bankruptcy.

It’s been a rough few months for Fisker, and the company apparently did not make a required $8.4 million interest payment last week on its unsecured convertible notes due in 2026. The automaker warned it may not be able to meet obligations to service its debt and could end up needing to “seek protection under applicable bankruptcy laws.” From Bloomberg:

Fisker shares fell as much as 14% shortly after the start of regular trading. The stock had plummeted 90% this year through last week’s close.

Fisker also said Monday that it plans to raise as much as $150 million through a financing deal with the holder of its 2025-dated convertible notes. The Los Angeles-based EV maker didn’t identify the existing investor and said the funding will be organized in four tranches and subject to certain conditions.

The disclosures expound on the dire state of Fisker, which warned late last month that there was substantial doubt about its ability to stay in business. The company has said it will cut 15% of its workforce after struggling with production issues, software glitches and short-seller criticism.

Fisker said it remains in negotiations with an unidentified large automaker about a potential investment and joint development partnership. Bloomberg reported earlier this month that the company was in talks with Japan’s Nissan Motor Co., citing people familiar with the matter.

Fisker said it has about 4,700 vehicles in its inventory right now, and altogether that’s worth about $200 million. It has hit the pause button on production in Graz, Austria in an attempt to sell down a chunk of that already-built supply.

3rd Gear: Unionizing VW Plant Takes A Huge Step

Workers at Volkswagen’s assembly plant in Chattanooga, Tennessee are seeking an election to join the United Auto Workers union. It’s the first big test of UAW President Shawn Fain’s push to expand the union’s reach to foreign-owned automakers in the southern U.S. From Reuters:

The UAW said a supermajority of eligible workers at the VW plant have signed union cards in about three months. The workers have filed a petition with the National Labor Relations Board (NLRB) seeking a vote to join the union. It would be the third time in 10 years that the UAW has sought to represent VW Chattanooga workers.

For more than two decades, the UAW has tried and failed to organize non-union U.S. auto assembly plants established by Asian and European automakers, mostly in southern states with laws and political leaders that are hostile to unions. The UAW has not organized workers at Tesla or other electric vehicle startups such as Rivian.

Winning a vote to organize the VW plant would be a significant milestone for the UAW in an election year where both U.S. President Joe Biden and his presumptive Republican rival Donald Trump are aggressively courting votes from UAW members in Michigan and other industrial swing states.

Biden, in a statement released by the White House, congratulated the workers and noted that many VW plants internationally were unionized. “As the most pro-union president in American history, I believe American workers, too, should have a voice at work. The decision whether to join a union belongs to the workers,” Biden said.

This push started after Fain and the union won record contracts with the Big Three automakers in the fall of 2023. He launched a first-of-its-kind campaign to organize the entire non-union auto assembly sector of the U.S. There are simultaneous organizing efforts at non-union operations at 13 automakers like Toyota, Mercedes, Hyundai, Kia, Tesla, Rivian, BMW and Mercedes-Benz

VW, which produces the Atlas and ID.4 at the plant, said Monday it “will fully support an NLRB vote so every team member has a chance to vote in privacy in this important decision. The election timeline will be determined by the NLRB.”

The NLRB said it had received the union election petition for 4,300 employees at the VW plant to be represented by the UAW. If both sides do not agree on the election details, the NLRB will hold a pre-election hearing on March 26 in Atlanta.

This will end up being the third attempt from the UAW to unionize the Chattanooga plant. Two others narrowly failed. In 2019, VW workers at the plant rejected union representation in an 833-776 vote.

4th Gear: Ferrari Sued For “Life-Threatening” Brake Defect

Ferrari has been accused in a U.S. lawsuit of failing to fix a “dangerous safety defect” with the brakes of the 458 Italia supercar from the early 2010s. This happens to be the case despite the fact Ferrari has issued multiple recalls to fix the problem. From Bloomberg:

The recalls were no more than “an interim corrective measure” for one of the identified brake problems, leaving thousands of Ferrari drivers in unsafe vehicles, according to the proposed class action filed Monday in San Diego federal court.

California resident Iliya Nechev claims his 2010 Ferrari 458 Italia, which he bought in 2020, had “brake issues” from the day he got it and “would experience partial or total loss of braking capability.”

“On one occasion, plaintiff was driving downhill at approximately 50 miles per hour and while preparing to take a 90-degree right hand turn, plaintiff pressed down on his brakes,” but the car didn’t slow down, the brake pedal was hard, and despite down shifting, there was no brake pressure, according to the suit.

When Nechev reported this to the Ferrari dealer, he said, he was told the issue was “normal.”

In a voluntary recall initiated in October 2021, Ferrari North America identified an issue with leaking brake fluid that could impair braking capability. An expanded recall was launched in 2022 and Ferrari also targeted vehicles in Germany, China and Japan, according to the complaint.

Robert Bosch GmbH, which the complaint says is the maker of the faulty parts, is also named as a defendant.

Ferrari is accused of not notifying customers of the full extent of the brake defect. Nechev says it can only be fixed by replacing the entire brake master cylinder. But, that’s not what happened.

Ferrari apparently continued to sell “thousands of cars containing this life-threatening defect,” according to the complaint.

The case, Nechev v. Ferrari North America Inc., is taking place in the U.S. District Court, Southern District of California (San Diego).

Reverse: You Stink, George Bush

Neutral: Retro Done Right, Baby

On The Radio: Bleachers - “Goodmorning”

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