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Ford to cut 7,000 jobs; Tesla in 'code red situation' as slide continues


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Ford to cut 7,000 jobs; Tesla in 'code red situation' as slide continues


* Ford Motor Co. said it will cut about 7,000 jobs across the globe, including about 20% of its managers, over the coming months as part of a restructuring effort it expects will save the company $600 million a year. The carmaker will cut about 10% of its salaried staff as part of its restructuring plan, which aims to reduce bureaucracy as well as cut costs. "We understand this is a challenging time for our team, but these steps are necessary to position Ford for success today and yet preparing to thrive in the future," Ford said in a statement.

* Tesla Inc.'s stock slide continued May 20 as shares traded as low as $195.25, nearly half of its 52-week high of $387.46 and falling below $200 for the first time since December 2016 over the company's cash burn, Autopilot, and geopolitical conditions. In a note, Wedbush analyst Dan Ives termed issues facing the electric-car maker a "code red situation," adding it faces "Kilimanjaro-like uphill climb" to be profitable in the second half. Morgan Stanley analyst Adam Jonas slashed Tesla's worst-case stock value to $10, significantly below his previous projection of $97. Jonas said departure of key executives, price discounting and CEO Elon Musk's announcement of "hardcore" cost-cutting push to return to profitability "add to the narrative of a company facing real potential stress." Tesla stock was trading down 3.36% at $198.47 during pre-market hours May 21.


* Daimler AG's incoming CEO Ola Källenius is planning to cut central administration costs by 20% in a bid to reach profit margin targets, according to German newspaper Handelsblatt. The plan, which is expected to be ready this summer, comes as global trade woes and ramp-up issues at factories threaten the German carmaker's profit margin outlook, the report said.

* Jaguar Land Rover Automotive PLC said CFO Kenneth Gregor will step down, effective June 1, and will be succeeded by Adrian Mardell, chief transformation officer. The Tata Motors Ltd.-owned British car brand added that Gregor, who served as Jaguar Land Rover's CFO for 11 years, will facilitate the turnover process until the end of August.

* General Motors Co. introduced a new electronic platform that enables over-the-air software updates for its vehicles. The Detroit-based company said the new platform allows functionality upgrades throughout the lifespan of the vehicle. It will be used for General Motors' electric vehicles, active safety, infotainment and connectivity features, and Super Cruise drive assistance feature, according to the release.


* Panasonic Corp.'s North American arm teamed up with U.S.-based electric-vehicle maker Tropos Motors for electric compact utility vehicles. The low-speed electric compact utility vehicles have a lower purchase cost and reduced cost of operation and maintenance, according to Panasonic, which exclusively provides electric batteries for Tesla.

* Tesla released instructions to enable owners to maintain their own vehicles, Electrek reported. The electric-car maker's "Do it Yourself" service include maintenance procedures, parts catalogs and troubleshooting instructions for basic maintenance. However, more complicated procedures will still be managed by service centers. Separately, Tesla rolled out its Supercharger V3 stations beyond California, with about 12 of the new stations in Texas, Electrek reported. Launched in March, the Supercharger V3 delivers up to 250kW in power.

* General Motors and Honda Motor Co. Ltd. are teaming up to determine whether electric cars can be used to generate electricity for smart grids, the Nikkei Asian Review reported. The joint research project, which will be conducted under the Mobility Open Blockchain Initiative, will create ways to enable information exchange between electric vehicles and power grids using blockchain technology, according to the report.


* General Motors' car-sharing service, Maven, will pull out of eight of the 17 North-American cities it services to focus on markets with the strongest demand, The Wall Street Journal reported, citing a company spokeswoman. Maven reportedly plans to exit Chicago and Boston within the next few months but will continue operating in Los Angeles; Washington, D.C.; Detroit; Toronto; and other cities. Citing an email sent to a Maven customer in Chicago, the Journal said the service would shut down in the city by July 26.


* The Japan Automobile Manufacturers Association said it is "dismayed" with the White House's statement that its investigation has found that automotive imports are a threat to national security. The Japanese automotive trade body echoed Toyota's response to the Trump administration's statement that it appears that "long-time contributions of investment and employment" in the U.S. are "not welcomed," Reuters reported, citing Chairman Akio Toyoda. Toyoda also serves as President of Toyota Motor Corp., which aired a similar reaction May 20.

* The Competition Commission of India is investigating complaints that Maruti Suzuki India Ltd. forces its dealers to put a cap on their discounts, Reuters reported, citing sources. The Suzuki Motor Corp. unit holds a 51% market share in India and allegedly stifled competition and excluded consumers who would have benefited from lower prices.


* Auto parts supplier DENSO Corp. could increase its stake in powertrain manufacturer Aisan Industry Co. Ltd. or transfer parts of its powertrain business to Aisan. The Japanese companies said they began reviewing their options to improve their powertrain businesses, which could involve Denso acquiring all Aisan shares owned by Toyota.

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The day ahead

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

In Asia, the Hang Seng fell 0.47% at 27,657.24, while the Nikkei 225 shed 0.14% to 21,272.45.

In Europe, around midday, the FTSE 100 gained 0.76% to 7,366.61, and the Euronext 100 lifted 0.59% to 1,050.67.

On the macro front

The Redbook Index for retail sales and the existing home sales report 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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