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GM, UAW strike enters week 5; China sales fall for 15th straight month

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GM, UAW strike enters week 5; China sales fall for 15th straight month


* The United Auto Workers accused General Motors Co. of "releasing half-truths" and trying "to starve UAW-GM workers off the picket lines" after the carmaker chose to address its striking staff directly and said its most recent proposal offered to increase compensation, preserve healthcare benefits, improve regularization policies and enhance profit sharing. The carmaker reportedly offered to raise U.S. investments to $9 billion from $7 billion, Reuters reported. The union increased strike pay 10% to $275 per week and allowed workers to start part-time jobs as long as they continue picketing as the strike enters its fifth week.

* China's automobile sales dropped to 2.27 million vehicles in September, down 5.2% year over year and marking the 15th consecutive month of decline, Reuters reported, citing data from the China Association of Automobile Manufacturers, or CAAM. The sales of new energy vehicles fell 34.2% to 80,000 units. The industry body previously said it expected sales to improve in the second half of 2019. CAAM Assistant Secretary-General Chen Shihua said sales "have not hit expectations and the pace has been slow."


* Volkswagen AG denied reports that it is planning to sell or float its Italian sports car brand Lamborghini, Reuters reported. The German carmaker called the Bloomberg News report that it has started preparations for the process "unfounded."

* Volkswagen CEO Herbert Diess said it does not expect its €30 billion shift into electric cars to affect its margins, Reuters reported, citing Diess' interview with A&F, a supplement to Italian newspaper la Repubblica. "We do not expect a deterioration in margins. Our advantage is that all our brands have the same platform for electric products and the same batteries that we buy in China," Diess said.


* Struggling electric-vehicle startup Faraday&Future Inc. said it is preparing for an IPO and that its outgoing CEO Jia Yueting filed for Chapter 11 bankruptcy in the U.S. as part of his attempts to settle his debts with the company. Faraday said the move will not affect its normal business operations and that the executive, who is staying on as chief product and user officer, will continue to help the company in its strategic goals.

* Tesla Inc. plans to open "Tesla Centers" that aim to boost deliveries and solve logistics problems, Electrek reported, citing sources. The electric-car maker, which plans to "create a continuous flow of vehicles," will hire more sales and delivery staff, increase salaries for sale advisers, and remove its commission structure. Sources added that Tesla will change its bonus structure to stock options once delivery goals are met.

* Porsche partnered with U.S. aircraft manufacturer Boeing to develop electric flying cars. Boeing, Porsche and Boeing's subsidiary Aurora Flight Sciences are working on a concept for a pure electric vertical takeoff and landing vehicle. Engineers from both companies, as well as Porsche subsidiaries Porsche Engineering Services GmbH and Studio F.A. Porsche, will implement and test a prototype.

* Porsche unveiled the Taycan 4S, a smaller version of its all-electric Taycan. The Taycan 4S will have a range of 407 kilometers and come with a 79.2-kWh battery pack with a 390-kW output and a 225-kW charging capacity. The carmaker, which reportedly built the Taycan to rival Tesla's Model 3, said orders are already open and that deliveries in Europe will start in January 2020. Separately, Electrek reported that the 4S will retail at $103,800 in the U.S., less than $150,000 for the Taycan.


* Renault SA said 100 people in Paris will pilot its electric robotaxi service from Oct. 14 to Nov. 8. The test rides will take place in the Paris-Saclay urban campus and will be conducted using Renault's ZOE Cab prototypes.

* Renault and self-driving software company Waymo LLC said they will develop and test an electric robotaxi taxi service in partnership with the Public Transport Authority of Paris Region, the Rouen Normandy Metropolitan Area and the Normandy Region. Renault will invest €100 million in the project, which will cater to residents and tourists in the Île-de-France region and run from Roissy-Charles de Gaulle and La Defense.

* Tesla will increase the cost of its full self-driving software package by $1,000 to $7,000 on Nov. 1, CEO Elon Musk tweeted.

* Panasonic Corp. said it developed a self-driving valet parking system, which will be added to Toyota Motor Corp.'s next-generation hydrogen fuel-cell car, LQ. Panasonic said the system, which will be equipped with level 4 autonomous driving capabilities, will use augmented reality and can park without expensive sensors, using cameras, maps, sonars and radar to navigate instead.


* The U.K. could reclassify Uber Technologies Inc. as a transportation provider, which would force it to pay 20% value-added tax on gross booking fees, Reuters reported, citing filings and a statement from the ride-hailing app. Uber, which has been unable to secure a long-term operating license in London, said the tax scheme would apply retroactively and that it could face a back-tax claim of up to "hundreds of millions of pounds," the report said.

* Uber said it will buy a majority stake in delivery startup Cornershop, which provides online grocery delivery in Latin America and Toronto, for an undisclosed amount. Cornershop will continue to operate under its current leadership after the transaction, which is expected to close in early 2020, subject to regulatory approval.


* The U.K.'s Business Minister Nadhim Zahawi said it is in discussions with carmakers including Peugeot SA, Ford Motor Co., Nissan Motor Co. Ltd., Jaguar Land Rover Automotive PLC and Toyota to determine how the government can support the auto industry in case of a no-deal Brexit, Bloomberg News reported. The U.K. is trying to identify "pinch points" for the industry and come up with solutions to help auto companies "within the confines of either World Trade Organization state aid rules, or, if we have a deal, EU state aid rules."

* Daimler AG said it will recall a "medium six-figure" number of vehicles, including 260,000 Mercedes-Benz Sprinter vans, which could be installed with illegal engine management software, Reuters reported.

* The European Commission will investigate Hungary's plan to grant €108 million in state aid to Samsung SDI Co. Ltd.'s planned electric car battery production facility in the country, Reuters reported. The regulator said it has doubts whether the aid could be functioning as an incentive and whether or not it could boost development in the region, the report said.


* French auto-parts maker Faurecia SE said it will buy out the remaining 50% of its SAS Autosystemtechnik GmbH & Co.KG joint venture from Germany's Continental AG for €225 million. The two companies formed SAS, which manufactures cockpit modules for vehicles, in 1996. The venture employs 4,490 people in 19 facilities in Europe, North America and South America and counts carmakers including Renault, Volkswagen, Fiat Chrysler Automobiles NV, Tesla, Mercedes-Benz and Ford Motor Co. as clients.


* Lower-middle-market private equity firm Southfield Capital sold Spectrum Automotive Holdings Corp. to Cornell Capital. Spectrum Automotive is an agent, marketer and administrator of finance and insurance products and services for the automobile market.

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The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng advanced 0.81% to 26,521.85.

In Europe, around midday, the FTSE 100 slipped 0.54% to 7,208.26, and the Euronext 100 was down 0.79% to 1,085.52.

On the macro front

No notable reports are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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