The 10 biggest stories of 2017

The 10 biggest stories of 2017

- in Automotive
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The auto industry spent a lot of 2017 focused on EVs, AVs and NAFTA, pausing to say “OMG” (or over at General Motors, “LOL”) when Ford Motor Co. ousted Mark Fields as CEO or Uber got caught in another scandal. Every automaker, seemingly, is working furiously to shove batteries into its vehicles — even Toyota, a longtime electric vehicle skeptic.

The staff of Automotive News ranked the top 10 stories from 2017, and EVs, nowhere to be found on last year’s list, shot to the No. 1 spot. There were plenty of other big stories keeping us busy in the past year. Autonomous vehicles are coming ever closer, whether anyone really wants them or not, and the Trump administration got to work on its plans to make automaking great again. Oh, and did we mention that Uber had a bit of a rough go?

Virtually every automaker becomes an EV evangelist

EVs make up a tiny fraction of industry sales, yet it’s now easier to list which automakers do not plan to electrify most or all of their offerings in the coming years than to keep track of the ambitious plans announced in 2017.

Volvo said every vehicle it builds starting in 2019 will have an electric motor. GM said it has 20 EVs coming by 2023, and Toyota is planning more than 10 by early next decade. Daimler AG is spending more than $11 billion to bring at least 10 EVs to market under its new Mercedes-Benz EQ subbrand by 2022, and it turned Smart into an all-electric brand. BMW is considering making its Mini brand battery-powered only.

All told, more than 100 battery-electric models are headed to dealerships globally within five years. Automakers are not only betting that cheaper batteries will help increase demand for these vehicles, but are reacting to a number of countries saying they will ban gasoline-powered engines within a few decades.

Hackett

Ford puts Jim Hackett in the driver’s seat

Ford’s sliding stock price cast an ominous shadow throughout Mark Fields’ three-year tenure as CEO, and its profits had started slipping as well, but it still came largely as a surprise when the company’s board decided in May to replace Fields with Jim Hackett, a former furniture executive who was mostly unknown in auto circles. Executive Chairman Bill Ford cited a need to act faster and more decisively when he turned to Hackett, who had spent several years as a Ford director before leading the automaker’s new Smart Mobility unit.

Hackett, who has deep ties to Silicon Valley and is regarded as an innovative thinker, has ordered the company to focus more on vehicle electrification, cut $14 billion in costs and build Internet connectivity into its full U.S. lineup by 2019. He’s also having Ford shift $7 billion in product-development funding from cars to more profitable light trucks, which will result in production of the Focus moving to China and could mean the end of the Fusion at U.S. dealerships.

Waymo: Taking human out of driver’s seat. credit: Katie Burke

Lots of companies jump into self-driving cars

Google’s Waymo unit started testing vehicles without a human in the driver’s seat in Arizona and said it would start letting Phoenix-area commuters use its cars soon. GM revealed plans to launch commercial autonomous vehicles at scale within two years, saying it would deploy fleets in “dense urban areas” and turn them into a viable, profitable business. Ford formed a partnership with Domino’s to test pizza delivery by autonomous car and said it intends to launch a self-driving hybrid vehicle in 2021. Delphi paid $450 million for a self-driving startup, NuTonomy, and then split its autonomous- and connected-vehicle business into a new company called Aptiv. Delphi also joined a partnership with Fiat Chrysler Automobiles, BMW, Intel and Mobileye to develop a platform for self-driving vehicles. In December, a $135 million autonomous-vehicle testing site opened west of Detroit, with Toyota and Visteon among the first users.

Trump starts regulatory overhaul, stops tweet-shaming Ford

President Donald Trump probably wouldn’t like that he fell from No. 1 in last year’s list to fourth. Trump wasn’t as vocal about the auto industry (to Bill Ford’s great relief) after taking office as he was on the campaign trail, but a number of actions by his administration will have a significant effect on automakers in the coming years, and potentially even decades.

It’s renegotiating the North American Free Trade Agreement, which could lead to big changes in where vehicles and parts are produced — or at least raise the cost to make them.

Trump is rolling back fuel-economy standards that the Obama administration pushed through on the way out, with the back-and-forth creating confusion among automakers about what requirements they will need to meet.

Trump and Republicans in Congress also have taken aim at the Consumer Financial Protection Bureau, which could lead to more freedom for auto lenders.

Early in his term, Trump welcomed the CEOs of the Detroit 3 to the White House, and GM’s Mary Barra had prime access to the president via a seat on his economic advisory council.

But after Trump’s response to neo-Nazi protests in Virginia, Barra’s participation was becoming more of a liability, and the panel decided to simply disband.

GM admits bigger not always better with Opel sale

After years of trying to make itself profitable again in Europe, GM decided to just get out instead. The move followed exits from Russia, Australia and other markets where it no longer saw big potential, but walking away from Europe was a stunning reversal for a company that reigned as the world’s largest automaker for 77 years.

President Dan Ammann said GM no longer feels compelled to compete in every available market and would rather cut back in areas where the returns are mediocre or nonexistent so that it can pour more resources into mobility services and other emerging businesses with bigger potential.

Taking Opel and its sibling brand, Vauxhall, off GM’s hands was PSA Group of France.

Tesla Model 3: A slow start.

Tesla’s bravado gets caught in Model 3 ‘bottlenecks’

Tesla collected nearly 400,000 deposits from customers who want to buy the Model 3, its most affordable car yet. But fulfilling those reservations has proved more difficult than founder Elon Musk anticipated. To speed the car’s launch, Tesla skipped many of the testing processes that most automakers use in their plants and quickly found itself in what Musk called “production hell.”

It delivered only about 200 of the cars in the third quarter of production, well below the 1,500 that Tesla had promised. Musk blamed supplier “bottlenecks” and pushed back the timeline for when the assembly line would reach high-volume output into 2018.

Hurricane Irma aftermath

Hurricanes deluge dealers in Texas and Florida

Hurricane Harvey dumped more than 50 inches of rain on Texas, flooding Houston-area dealerships. Not only did Harvey wipe out the stores’ inventories, but it decimated many of their employees’ homes. Just weeks later, Hurricane Irma inflicted widespread damage on dealerships in Florida. It was the first time two Category 4 storms made landfall on the nation’s Atlantic coast in the same year, and analysts estimated that as many as 1 million vehicles were destroyed. After the winds and rain ended, demand for replacement vehicles was so high that September and October were two of the strongest months ever for U.S. new-vehicle sales.

FCA execs, UAW leaders lived large on training funds

A Ferrari, solid-gold pens and a swimming pool. Those were among the luxuries that prosecutors say Al Iacobelli bought for himself with money meant for a worker-training center during his time as FCA’s top labor negotiator.

According to federal indictments, the training funds also were used to pay off a mortgage belonging to former UAW Vice President General Holiefield, who sat across the bargaining table from Iacobelli, and to send Holiefield and his wife on lavish trips around the world. Holiefield died before investigators exposed the scheme, but his widow and Iacobelli are scheduled to go to trial this year in the case, which is alleged to have involved funneling money through a fake hospice center and other charities.

UAW officials have condemned Holiefield’s actions and contend that the payoffs had no effect on contract negotiations, but the scandal — which is still unraveling — has been a black eye for the union.

Ride-hailing service has an uber-bad year

The best news for Uber is that it survived 2017 somehow. (See the first three items on our list of the year’s 10 top blunders, Page 4.) The ride-hailing company’s founder, Travis Kalanick, resigned as CEO in June amid evidence that the company was rife with sexism and sexual harassment. That was shortly after the U.S. Justice Department began investigating a program called Greyball that allowed Uber to block government officials from using the app if it thought they might be trying to investigate the company’s operations. In November, Uber revealed not only that data on 57 million customers had been hacked, but that it had paid the hackers $100,000 to delete the information and keep the breach secret. And last month, the European Union’s top court declared Uber to be a taxi service, not just a technology app, which will make it subject to much stricter regulations there.

U.S. auto sales poised to fall for first time since 2009

After a seven-year growth streak — the U.S. industry’s longest in a century — auto sales were certain to decline in 2017. Year-end figures won’t be available until Wednesday, Jan. 3, but sales were expected to total about 17.2 million, down from the record 17.54 million sold in 2016.

That would still rank as one of the five best years in history, though, and analysts say there are no signs of a big, 2009-esque plunge on the horizon.

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