Author: CNBC Online news

‘Bloodbath’ is coming to Nissan as key foreign executive resigns amid Ghosn investigation

Kyodo | Reuters
A court sketch, drawn by Nobutoshi Katsuyama, shows ousted Nissan Motor Chairman Carlos Ghosn during a January open hearing to hear the reason for his continued detention, at Tokyo District Court in Tokyo, Japan.

The unexpected departure of Jose Munoz, one of the highest-ranking westerners working for Nissan, is raising new concerns about what former executives and industry insiders warn could become a purge of foreigners linked to the automaker's dethroned Chairman Carlos Ghosn.

Munoz, who until recently was thought to be in the running for the Nissan CEO role, resigned Friday after the company put him on leave from his regular job as chief performance officer. Nissan assigned Munoz to work on a growing internal investigation looking for financial and other ethical irregularities, according to an industry executive who has close ties to Nissan's board of directors.

Numerous industry executives, even some inside the company, question whether Ghosn's arrest and lengthy detention are more political than criminal.

People familiar with the matter said Nissan's internal investigation is little more than an attempt to wrest power away from Renault, the French automaker that engineered Nissan's 1999 bailout and which holds a 43.4 percent stake in its Japanese alliance partner.

'Bloodbath'

A former Nissan executive who worked in Japan and who remains close to the automaker was far more blunt. He said he sees the departure of Spanish-born Munoz as the start of what he called “a bloodbath,” a thinly veiled witch hunt to oust Ghosn's allies.

The automaker laid the blame squarely on Ghosn, who was previously heralded as something of a savior in Japan for engineering a bailout that saved Nissan from bankruptcy two decades ago. It also said in a statement that “Nissan does not in any way tolerate such misconduct,” something its ongoing investigation is supposed to be rooting out.

And when asked about the circumstances of Munoz's departure, the automaker responded with a terse note saying, “Jose Munoz has elected to resign from Nissan Motor Company, effective immediately.”

The 64-year-old Ghosn was arrested Nov. 19 shortly after landing in his corporate jet at Haneda Airport in Tokyo. He's been charged, among other things, with undereporting his income at Nissan by about 9.1 billion yen (about $84 million) over eight years ending March 2018. He's denied all charges, telling a Japanese judge Jan. 7 that he believes he acted “honorably, legally and with the knowledge and approval of the appropriate executives inside the company.”

Japanese prosecutors also filed charged against his American colleague Greg Kelly, as well as Nissan itself.

'Wrongly accused'

“I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations,” Ghosn told the court in his first public appearance since his arrest.

Since November 2016, Munoz had been serving as Nissan's chief performance officer, a job that seemed well-suited for a man credited with driving the automaker to a solid No. 1 spot during his tenure heading Nissan Mexicana. He became a top Ghosn lieutenant and was subsequently appointed head of North American operations.

“He had a tough assignment but drove as hard as anyone I've ever seen,” said a current executive who reported to Munoz in the U.S.

Nissan CEO Hiroto Saikawa has repeatedly criticized the man once seen as his mentor, but has also expressed a desire to shift the balance of power in the Renault-Nissan-Mitsubishi Alliance. The French carmaker currently has the right to unilaterally name Nissan board members and senior executives. It is widely believed that Ghosn was traveling to Japan when arrested to fire Saikawa and replace him with an executive more palatable to Renault.

Now, however, it is Ghosn that has been ousted as chairman of Nissan, as well as chairman of Mitsubishi, the smaller automaker that he directed Nissan to bail out in 2016.

Cleaning house

“Once you get new management in, invariably, things begin to shake up,” said Joe Phillippi, a veteran auto analyst and head of AutoTrends Consulting. The crisis surrounding the prosecution of Ghosn could give Nissan executives, starting with Saikawa “an opportunity to clean house.”

Munoz was highly regarded at Nissan and close to Ghosn. He was credited with helping the former chairman meet the goals of the Power 88 corporate plan put in place in 2011: an 8 percent global market share and an 8 percent operating profit margin. While Nissan fell short on a global basis, Munoz briefly drove the company's U.S. operations up to a 10 percent market share. That fell back to 9.2 percent in 2017, the year after he took on his new job, but he was still given credit for setting into motion the strategy that delivered record U.S. sales of 1.6 million vehicles.

The first sign that something might be wrong came last week when Munoz proved a no-show for the events Nissan had planned at the Consumer Electronics Show in Las Vegas. That included the debut of an all-new version of the Leaf battery-electric vehicle. While it has been the world's best-selling BEV, sales have been sliding as Tesla has gained rapid momentum with its Model 3. The new Leaf is aimed at shoring up its position by boosting range to 226 miles, or triple what it first offered in 2011.

Internal investigation

Reports indicate that Munoz had been called to Japan to work on the ongoing investigation that Nissan claimed had uncovered evidence of Ghosn's corruption.

“Unfortunately, Nissan is currently involved in matters that have and will continue to divert its focus. As I have repeatedly and recently made clear to the company, I look forward to continuing to assist Nissan in its investigations,” Munoz wrote in a post on his LinkedIn page, adding that he decided to leave the company. He didn't immediately respond to a request for comment.

The industry executive close to the Nissan board told CNBC that Munoz was concerned that the ongoing investigation was intended to do more than just look into corruption involving Ghosn and Kelly, however.

“They have 100 people assigned to dig up dirt on people and pressure them to either leave under disgrace or turn state witness against Ghosn,” he said. “Jose wasn't going to do that. He felt they were going to fire him. To retain his dignity and to avoid a public fight he went ahead and quit.”

Make room

Several people with direct knowledge of the matter indicated that Munoz wasn't the only Nissan veteran who has been concerned about the handling of the Ghosn affair.

On Wednesday, Toshiyuki Shiga, a former chief operating officer at Nissan who has continued serving on the company's board, announced he would retire at the end of his current term. Shiga issued a formal statement that said, “I think it's time to make room for the next generation.” But several people close to Nissan have said Shiga privately expressed his concerns about Ghosn's arrest and the way Nissan had handled the case.

Efforts to reach Shiga by CNBC have not been successful.

RAM Trucks wants a bigger piece of hot heavy-duty trucks with new Detroit debut

Source: Ram
2019 Ram 3500 Heavy Duty Limited Crew Cab Dually

RAM Trucks has stolen the limelight with its 1500 pickup truck in the eyes of many auto industry watchers. Now it wants to spread a bit of that magic out to larger work pickups.

Fiat Chrysler released an updated lineup of heavy-duty pickups at the Detroit auto show on Monday.

With the new models, RAM is aiming at truck buyers who want to use the truck for work, but also want nice interiors and features that make the truck usable as a family or recreational vehicle on the weekend.

While the trucks have serious towing capability and payload capacity, RAM is also outfitting them with features designed to make the ride as pleasant as possible for drivers. Cabins are equipped with active noise cancellation, anti-vibration devices and acoustic glass.

The truck maker also says it has exclusive rear air suspension that has a special driver-activated Bed Lowering mode, a normal mode for driving with a payload in the bed and a Trailer-Tow Mode.

The introduction of the new vehicles is another shot fired in the ongoing battle between the three big American truck makers.

U.S. truck sales, especially full-size truck sales are dominated by the three American manufacturers: Ford, General Motors, and Chrysler. RAM has historically come in third place in sales, behind Ford and GM.

But bold design choices and upscale, feature-rich interiors have earned RAM's light duty full-size line, the RAM 1500, has praise from critics and a jump in sales.

“It's all part of the truck wars,” said Michelle Krebs, executive analyst for Autotrader, a website that connects car buyers and sellers.

Commercial and work-focused trucks and vans were extremely good in 2018, she said. Sales defied Autotrader forecasts by rising instead of falling, in large part because tax reform provided a benefit for businesses to buy vehicles.

“If you looked at the commercial van segment, that was up,” she said. “Big trucks were up. Ford has done very well with its Super Duty trucks. So Ram is looking at doing just as well. And GM is coming out with a new Silverado medium duty and heavy duty this year. So it's the war of the big trucks this year.”

Ford’s CEO says a ‘big surprise’ is coming next year with electric vehicles

Ford CEO Jim Hackett on restructuring, going electric and China's slowdown
2 Hours Ago | 10:00

Ford Motor is gearing up to launch new electric cars as soon as next year, CEO Jim Hackett told CNBC on Sunday.

Ford has previously announced its plans to invest $11 billion in electric vehicles by 2022 and produce 40 hybrid and fully electric cars, in a plan to revive its slowing business. However, the company's chief told CNBC that drivers should be prepared for 'a big surprise' from Ford.

“We talked about a huge investment in electric vehicles. We have 16 models that are in design and development. We have a pretty big surprise coming next year,” Hackett told CNBC's Phil LeBeau on the sidelines of the Detroit Auto Show, which kicks off this week.

During the first nine months in 2018, Ford's profit dropped a whooping 27 percent from the same period in 2017. Shares of Ford, which tumbled 39 percent in 2018, are hunkered under $10 a share for the first time since 2012.

“Some of the pain in the margins additionally [is] because the vehicles are old. We have on average the oldest fleet in the industry and we are going to have average the newest fleet. 75 percent of the portfolio is being turned over,” the CEO said.

The company is also in the middle of a massive restructuring with an aim to slash costs by $14 billion over the next five years. Ford recently announced plans to cut thousands of jobs in Europe as well as discontinuing some unprofitable lines there.

Yet in the face of a skeptical market Hackett defended Ford's moves to right its ship. He told CNBC that investors “needed to be a little patient with some of the long-lived problems that haven't been addressed that I'm going to represent. In less than 19 months, I've addressed every one of them.”

Many companies have expressed concerns about American brands potentially falling out of favor in China. For example, tech giant Apple cut its forecast in January, sounding alarms that an economic slowdown will weigh on its business. However, Hackett is not so worried.

“China's optimism is still high with us,” he told CNBC. “The brand is one of the highest-ranking brands in the country. Even at the highest levels of the government they see it as a family-owned business that middle America loves. The Chinese want to relate to American businesses like that,” Hackett added.

Nissan aims to take on Tesla by giving its electric vehicle Leaf major range, performance boost

Photo: Paul Eisenstein
2019 Nissan Leaf

With a growing number of long-range battery-cars coming to market, Nissan's own electric vehicle, the Leaf, has been in danger of coming unplugged.

But the Japanese automaker is hoping to attract potential buyers with the launch of a new model that gives a 50 percent boost to both range and performance.

The new Nissan Leaf Plus will go on sale in early spring and will deliver an estimated 226 miles per charge of its lithium-ion battery. That's more than triple the range of the original Leaf which, when launched in 2010, was the world's first mainstream battery-electric vehicle, or BEV. The second-generation Leaf, launched two years ago, yielded 150 miles per charge. The latest model, which will be known as the Leaf e+ outside the U.S. and Canada, will now fall in line with a surge of long-range competitors, such as the Tesla Model S, Chevrolet Bolt EV and Hyundai Kona EV.

“This deserves to be called a big bang,” Denis LeVot, the CEO of Nissan North America, said during a conversation with CNBC following the debut of the 2020 Leaf Plus at the Consumer Electronics Show in Las Vegas Tuesday night.

A long with the boost in range, the updated battery car will also deliver better acceleration, Nissan promised. While it didn't offer specific performance figures, Japan's second-largest automaker said the updated hatchback's single electric motor will now punch out 217 horsepower, up from 147 when the second-generation Leaf launched, with torque climbing from 174 to 250 pound-feet.

The Leaf Plus relies on a 62 kilowatt-hour battery pack, about 50 percent bigger than the 2017 model and the mere 24 kWh pack in the original, 2010 Leaf. Like the earlier versions, however, the latest battery-electric vehicle will remain air-cooled, rather than the more advanced liquid cooling found in its key competitors. Nissan claims the approach requires few compromises but means a less complex — and thus less expensive — product.

The automaker won't release final pricing until the Leaf Plus goes on sale in early spring. But at a starting price of $29,990, the current model is one of the least expensive all-electric models on the market.

Since the debut of the original Leaf, Nissan has sold about 365,000 to customers around the world, LeVot pointed out, making it the best-selling BEV on the market. But it has been losing momentum as new competitors have come to market. The Tesla Model 3 is now the best-seller on a monthly basis and likely to pass Leaf's overall record this year if current demand holds, according to industry analysts.

“Ideally, Nissan should have had this long-range model at (the) launch” of the second-generation Leaf in 2017, said Sam Abuelsamid, a senior analyst with Navigant Research. “They absolutely needed to bring this out to remain competitive.”

For his part, LeVot said he is confident the long-range Leaf will help rebuild demand for Leaf in a market just beginning to embrace electrification in all its various forms. And, if anything, he added, “competition growing is not a bad thing. It is converting (more) people to electrification.”

By various estimates there will be as many as 100 all-electric vehicles on the market by the end of 2020, along with scores of hybrids and plug-in hybrids, the latter extending range by blending gas and electric powertrains on the same platform.

Nissan was an early proponent of electrification, along with French alliance partner Renault, but it has been slow to expand its line-up – at least until now. The automaker is expected to signal an acceleration of its battery strategy at the North American International Auto Show in Detroit next week. It is expected to reveal a concept vehicle that will signal the future direction of the Nissan brand. While LeVot would not discuss what's coming in Detroit, Nissan has already confirmed it's upscale Infiniti brand will also signal its battery-car plans during the auto show with its QX Inspiration concept.

Nissan's global CEO Hiroto Saikawa last year announced that Infiniti will electrify virtually its entire line-up starting in 2021.

During his presentation at CES, North American chief executive LeVot did confirm that there will be “eight models electrified or fully electric” available through the two brands by 2020, with the parent company expecting to sell 1 million battery cars worldwide in 2022.

If anything, the increase in range with the Nissan Leaf Plus will be just the beginning, he told CNBC, suggesting that “in three to four years, we could have 300-mile” ranges on some models. That would be in line with the top products from Tesla, though some manufacturers are now looking at pushing up into 400-mile territory as lithium-ion technology improves.

A number of manufacturers are using this week's CES to discuss their electrification strategies, including some new brands such as Chinese-owned Byton. It showed off a long-range model dubbed the M-byte it expects to put into production by the end of this year at a new plant in China, with U.S. sales set to begin by the third quarter of 2020.

Mercedes-Benz also showed off its first long-range electric vehicle in Las Vegas, the EQC set to launch later this year.

Disclosure:
Paul Eisenstein
is a freelancer for CNBC. His travel and accommodations for this article were paid by an automaker.

Cadillac debuts 3-row crossover XT6 to lure luxury buyers from rivals

Source: Cadillac
The 2020 Cadillac XT6

Cadillac debuts its three-row XT6 sport utility vehicle at the Detroit auto show on Sunday, filling out a lineup of luxury SUVs that many industry analysts say is long overdue.

In recent years, the brand once known as the “Standard of the World” has taken heat for being slow to respond to the shift toward crossovers and SUVs. With the XT6, Cadillac now has crossovers in three different segments, plus the full-size Escalade SUV.

The XT6 is a crossover, which blends elements of cars with a traditional truck-based SUV. It comes with a 3.6 liter V6 engine and a nine-speed automatic transmission. Buyers will be able to choose between one design option that emphasizes luxury, and another that focuses on performance.

The car will offer customers a blend of spaciousness, safety and convenience features, said Cadillac President Steve Carlisle.

Cadillac had a big hit with the Escalade in the early 2000s, but GM's premier brand later turned away from SUVs to focus on sedans and performance cars — just as the public was moving in the opposite direction. Cadillac suffered as rivals beefed up their SUV lineups.

Now, the brand is playing catch-up.

Source: Cadillac
The 2020 Cadillac XT6

In recent years the company has begun releasing a slew of SUVs meant to target these gaps, as the brand phases out slower selling sedans. Cadillac debuted the compact XT4 crossover at the New York International Auto Show in 2018, and the mid-size XT5 back in 2015.

Given how strong GM's other brands are — such as Chevrolet and GMC with SUVs and trucks — it is odd that Cadillac took so long to enter the SUV space, said Jeff Schuster, president of global forecasting at LMC Automotive, a group that tracks the automotive industry.

The Escalade is a notable exception. It appeals to certain types of customers who either need an exceptional amount of space, or are buying the vehicle for its styling as a status symbol — or for the image associated with it.

As customers move out of sedans and compact cars, they are moving into vehicles just like the XT4, XT5 and XT6, which Cadillac is releasing years after rivals have already been in the market.

“I think the jury is still out, quite frankly, on where they go from here and how much they can accelerate within the premium segment,” Schuster said. “They are not quite there yet, but they are doing what they can. They are getting the vehicles out, which I think is something they needed to do sooner and now we are starting to see them.”

The XT4 and XT5, however, have been strong sellers in their segments, suggesting that Cadillac can play well in the market, even if it is late to the game.

GM says 2018 earnings exceeded expectations and 2019 looks even better

GM raises guidance for 2019 as it focuses on light truck production
42 Mins Ago | 04:28

General Motors CEO Mary Barra said the automaker's full-year 2018 earnings exceeded its previous expectations and that 2019 is looking even better, citing strong sales in China and high demand for its truck and utility vehicles in the U.S.

“From a 2018 perspective, it is not only a focus on really capitalizing on the new trucks we have out there, the light duty trucks, but also the focus on cost reduction so it was across the board. Every element of the company,” Barra told CNBC's Phil LeBeau.

The second largest U.S. automaker had previously told investors it expected 2018 adjusted earnings of between $5.80 and $6.20 a share and adjusted automotive free cash flow of $4 billion. It now expects to surpass those projections and painted an even better picture of 2019, Barra said Friday.

She forecast diluted adjusted earnings per share of between $6.50 to $7 and adjusted automotive free cash flow $4.5 billion to $6 billion for 2019.

GM's shares surged 6 percent in premarket trading on the news.

Barra also said GM tightened its belt last year, helping to boost earnings. She announced several plant closures and 14,000 job cuts in November. The reorganization is estimated to save about $6 billion by the end of 2020, with about half of those cost savings realized by the end of 2019, the company said at the time.

Barra said the job cuts were a “proactive” move in an otherwise strong labor market.

“We have been transparent with the [United Auto Workers union], helping them and making sure they understand the business and that customers' preferences are changing,” she told reporters on a call Friday morning.

GM plans to expand its footprint overseas with a global family of vehicles it is set to launch in China this year, Barra said on the call. She said GM has 20 new or updated products coming out in China.

“When you step back and look at China, we have been there for 20 years, we have had tremendous success, we have very strong brands,” she told LeBeau. “We think that the trade talks that are going on right now are very constructive, the fact they have extended this round to have even more discussion, the next is already scheduled, we know there is discussion of durable goods stimulus in country that we think will apply to autos.”

Cadillac will become the company's lead electric vehicle brand, it said. It's projecting just over 17 million in total U.S. vehicle sales in 2019 and 27 million in China — about flat from 2018. She said annual auto sales in China will eventually climb to 30 million.

WATCH:
CNBC's full interview with General Motors CEO Mary Barra

Watch CNBC's full interview with General Motors CEO Mary Barra
59 Mins Ago | 09:49

Nissan cancels lease on ex-Chairman Ghosn’s Tokyo apartment

Takashi Aoyama | Getty Images
Pedestrians walk past a big screen showing images of Former Nissan Motor Co. Chairman Carlos Ghosn in a news program on Jan. 8, 2019 in Tokyo, Japan.

Nissan Motor has terminated the lease to ex-Chairman Carlos Ghosn's luxury apartment in Tokyo, Ghosn's legal team said on Friday, as the Japanese automaker cuts ties with the executive following his arrest in November.

Nissan confirmed it had sent Ghosn's Japan-based legal team a termination notice on his residence in Azabu, one of Tokyo's priciest neighborhoods, on Monday, the latest step in ending its relationship with Ghosn, who is facing financial misconduct charges in Japan.

In the wake of Ghosn's arrest, the automaker is also planning to terminate other agreements under which it had been providing residences to Ghosn, a person with knowledge of the issue told Reuters, including the lease agreement on an apartment in Amsterdam.

In addition, it is no longer making payments on his residence in Paris, the person added on condition of anonymity due to the sensitivity of the matter.

Nissan was not immediately available to comment on the additional residences.

As chairman of Nissan, Renault and Mitsubishi Motors, the globe-trotting Ghosn had access to a string of residences around the world, including additional homes in Beirut and Rio de Janeiro.

Tokyo prosecutors are expected on Friday to indict Ghosn on two new financial misconduct charges, adding to his legal challenges. Ghosn has denied all of the allegations against him.

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Tesla feature that gets car to follow you like a pet will ‘probably’ be available soon, Musk says

Spencer Platt | Getty Images
The inside of a Tesla vehicle is viewed as it sits parked in a Tesla showroom and service center in Red Hook, Brooklyn on July 5, 2016.

A Tesla feature that gets your car to follow you around like a pet and auto-park is undergoing regulatory approval and will “probably” be available for some customers soon, CEO Elon Musk said on Twitter on Thursday.

“Going through final validation & regulatory approval,” Musk said of Summon+, a planned upgrade to Tesla's Summon auto-parking feature. “Probably releases to early access program owners in a few weeks. It's trippy!”

However, the auto executive added the caveat that the firm might not be able to roll out Summon+ in all of the markets it operates in, saying it was “getting some regulatory pushback.” He didn't elaborate on those regulatory hurdles.

Musk said back in November that cars operating with Summon+ will be able to “drive to your phone location & follow you like a pet,” and that users will be able to control their car remotely “like a big RC car.”

He said at the time that the upgrade would be compatible with all Tesla cars made in the past two years.

The technology is part of Tesla's Autopilot self-driving system. It currently lets Model S and Model X drivers park their car in tight spots and get it to move short distances remotely using the Tesla app.

Tesla's CEO recently broke ground on a new factory the firm is opening in Shanghai, and met with Chinese Premier Li Keqiang to discuss the plans.

Li told Musk at their meeting that he hoped the firm could become an “in-depth participant of China's opening and a promoter of the stability of China-U.S. relations.”

Ford unveils the new 2020 Explorer, the popular SUV’s first redesign in 8 years

Ford reveals all-new Explorer with upgraded tech features
2 Hours Ago | 00:56

With more and more consumers looking to buy a midsize SUV, Ford is rolling out a fresh version of its iconic Explorer model. Unveiled Wednesday in New York, it's the first all-new version of the Explorer in eight years.

The 2020 Explorer has been redesigned with special features, new technology and creature comforts SUV owners have come to expect. That includes Ford Co-Pilot360 which provides driver assistance to avoid collisions. In addition, Ford increased the towing capacity by 66 percent while making the Explorer lighter and more fuel efficient.

Starting at $33,000, the new model goes on sale this summer, Ford said.

“The new Explorer is very important for Ford,” said Jeff Schuster, analyst at automotive consulting firm LMC Automotive. “Even though the Explorer is the top-selling midsize SUV, there's a lot more competition and new models coming in the next couple of years.”

While there were 21 midsize SUV's available in the U.S. last year, LMC Automotive expects that number to climb to 26 next year and to 30 models by 2022.

That competition will be looking to cut into the Explorer's No. 1 position in the midsize SUV market. Last year, Ford sold more than 261,000 Explorers. An impressive number considering the model has not had a major makeover in years.

“The Explorer is really in the sweet spot of the market,” said Schuster. “Last year, midsize SUVs made up almost 14 percent of the market and we think the segment will keep growing.”

Whether or not the Explorer remains the leader of the SUV market remains to be seen, but the new model should position Ford to continue doing well in that segment. That's critical since Ford will be relying on its trucks and SUVs to generate profits while it restructures its business, investing billions in future technology like autonomous drive vehicles.

Questions? Comments? BehindTheWheel@cnbc.com.