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Did you see the recent tornado that played with a Chevy truck like a toy, spinning it on its side only to have it drive away after? This is maybe one of the best Chevy truck commercials I have ever seen. Thank goodness it was an older version truck as the newer vehicles made out of aluminum might not have been so lucky.
The auto industry is starting to hint at yet another delay in the return to normal production. Many manufacturers’ latest forecasts saw the chip and parts shortage start to ease up in the second half of this year. With international conflict continuing and the threat of Russia nationalizing assets of automotive companies that have pulled out of Russia further delays seem likely⁴. The Russian Prime Minister Mikhail Mishustin said “If foreign owners close the company unreasonably, then in such cases the government proposes to introduce external administration. Depending on the decision of the owner, it will determine the future fate of the enterprise.” Russia has basically said that they are open to transferring ownership to enterprises “ who want to work”. This is exactly what evil people do when they don’t get their way or face resistance from others, they use threats of violence and force to either make you do what they want you to do or replace you with someone that follows the orders. Before you slam Russia too harshly make sure to take a look at our own system that pretty much does the same thing but much more covertly. I have a feeling that if there was a Russian owned company that employed thousands of people in the US that suddenly just turned off because it didn’t like that we invaded another country like we did in Vietnam, Korea, Iraq, Afghanistan, Yemen, Somalia, Syria, Pakistan, Bosnia… you get the idea, I bet the US government would seize their assets and turn ownership over to an American that they saw fit all in the name of protecting the American people.
Just Mercedes-Benz alone has over $2B in assets in Russia that are potentially up for grabs and many other manufacturers like Renault, VW, Stellantis, and Ford have large facilities there as well.
European automakers VW and Mercedes-Benz are also scrambling to find replacement suppliers for wiring harnesses that are made by a company out of Ukraine called Leoni that are experiencing disruptions from the Russian invasion. The automakers are looking to find alternative suppliers with their search said to include companies from North Africa, Eastern Europe, Mexico, and China.
You would think this chip/part shortage, market instability, record unemployment, a staggering number of recalls and huge cuts in production would lead to some very unhappy automotive CEO’s. That is just not the reality. Ford’s CEO Jim Farley’s total compensation for 2021 was up 93% from 2020 which was up 40% from 2019. Yes you heard me correct, since the pandemic started Jim Farley went from a little over $7M in total compensation in 2019, before the pandemic, to over $20M. Let me explain why this seems so out of touch to me. Ford hired another CEO in 2021 named Ted Cannis to run commercial and fleet sales, a job that used to taken care of by Mr. Farley and that accounts for about ⅓ of Ford’s business. So Jim dropped a significant portion of his responsibilities all while justifying almost doubling his pay and while laying off about 4% of the company’s employees in the last 2 years. I just don’t understand how in 2019 it took about 8 weeks to get an ordered vehicle produced from Ford and the CEO was paid $7M and now to get the same vehicle it takes 30+ weeks. They are producing far fewer vehicles taking much longer to produce them and all while dealing with major quality issues and record numbers of recalls. This just doesn’t scream that the CEO has justified a huge pay raise for himself but for some reason the auto industry that is in complete disarray is home to some of the highest paid executives in the world.
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