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In Taiwan, the first generation Ford Escape carried the Maverick nameplate.

Jon Harris, The Morning Call / November 13, 2018 [Volvo Group subsidiary] Mack Trucks is idling its second-shift production employees this week — and possibly beyond — due to a supply chain issue. Mack spokesman Christopher Heffner said the temporary layoff, which began Tuesday and runs through Friday, affects a majority of second-shift employees at the company’s assembly plant in Lower Macungie Township. He did not say exactly how many second-shift employees, who typically work from 3:15 to 11:15 p.m., are affected. “Our colleagues are dedicating significant resources to solve the supply chain interruption and keep this temporary layoff to only this week,” Heffner said. “However, the situation is fluid, and we won’t know more about shift impacts beyond this week until Friday.” For this week, Mack is treating it as a “shift curtailment” and plans to compensate all of the affected employees 80 percent of their pay, according to a document circulated among employees Friday and later reviewed by The Morning Call. Asked whether that will continue if the layoff extends beyond Friday, Heffner responded: “We have not made any decisions beyond this week, as our hope is to be back up and running as soon as possible.” Mack’s assembly plant, which employs a total of about 2,400 across two shifts and was closed Monday for Veterans Day, has been hampered by supply chain constraints throughout the year, especially since transitioning to its new truck range in the spring. In its third-quarter report, parent company Volvo Group mentioned supply chain issues as the reason for Mack’s heavy-duty market share dropping to 6.6 percent in North America. In addition to supply chain issues, Heffner has previously pointed to Mack ramping up its new highway truck, Anthem, during a hot highway market as another reason why the company’s market share has declined. “Now that we’ve worked through the ramp, our teams are fully focused on managing supply chain issues and we expect our market share will grow,” Heffner said in an Oct. 19 email to The Morning Call following the third-quarter report’s release. The most recent issue stems from a “supplier quality issue” that is causing the company’s Hagerstown, Md., powertrain production plant to run short on axle housings, according to the document provided to employees Friday. That shortage is related to a “porosity issue occurring in the supplier’s casting process,” the document stated. In the notice, Mack said it is working with the United Auto Workers Local 677, which represents Mack workers, to minimize the impact of the temporary layoff and to consider ways to “avoid incidents of this nature in the future.” Union officials did not return calls seeking comment Monday and Tuesday. As for when the affected second-shift employees could return to work, they will need to call the plant’s Production Interruption Line on Friday to determine whether to report to work Monday, Nov. 19. Even if they return then, the document makes it sounds like the supply chain issue could linger for a while. “The entire Volvo Group is focused on supporting the supplier to get them back on track with resources from around the world,” the notice says. “Unfortunately, [Lehigh Valley Operations] will continue to see production disturbances over the next couple of weeks until the supplier issue can be corrected and the flow of good material can be restored.”

EPA Aims to Cut NOx Emissions from Heavy-Duty Trucks David Cullen, Heavy Duty Trucking (HDT) / November 13, 2018 Seemingly acting out of character, the U.S. Environmental Protection Agency on Nov. 13 announced it will launch a rulemaking to further cut the emission of nitrogen oxide from diesel-powered heavy-duty trucks. EPA said it intends to publish a proposed NOx rule in early 2020. While the EPA under President Trump has been heavily engaged in rolling back dozens of environmental rules, the agency could now be said to be aiming to promulgate a single federal rule to forestall a patchwork of federal and state rules on NOx emissions from commercial vehicles. Indeed, even as California moves toward writing new state emissions rules, trucking and truck-manufacturing lobbying groups along with state environmental officials have been pushing EPA to set a new nationwide rule on allowable NOx emissions for diesel trucks. California would actually prefer a national rule, if it is tight enough, as more than half the trucks delivering goods there are registered in other states. EPA has tagged its new effort as the “Cleaner Trucks Initiative,” which Acting Administrator Andrew Wheeler said will include a “future” rulemaking that will update the existing (federal) NOx standard, which was last set in 2001. In addition, he said the new rule would “streamline” compliance and certification requirements. “The Cleaner Trucks Initiative will help modernize heavy-duty truck engines, improving their efficiency, and providing cleaner air for all Americans,” said Wheeler, speaking at a public announcement in Washington that was shown live online. “The U.S. has made major reductions in NOx emissions, but it’s been nearly 20 years since EPA updated these standards. Through rulemaking and a comprehensive review of existing requirements, we will capitalize on these gains and incentivize new technologies to ensure our heavy-duty trucks are clean and remain a competitive method of transportation.” “Today’s announcement makes clear that reducing NOx emissions from heavy-duty vehicles is a clean air priority for this administration,” said EPA Office of Air and Radiation Assistant Administrator Bill Wehrum. “EPA’s Cleaner Trucks Initiative is an important signal to all interested stakeholders that we will work hard on reducing emissions while producing a more effective and efficient program.” EPA is not required by statue to update the NOx standard. However, in a news release, the agency asserted that although U.S. NOx emissions fell by more than 40% from 2007 to 2017, “there is more work to be done.” EPA estimates that heavy-duty trucks will be responsible for one-third of NOx emissions from the transportation sector in 2025. The agency said “any update to the standards will result in significant mobile source NOx reductions, which will aid communities across the country in the attainment of ozone and particulate matter standards.” Referencing the agency’s rollback already of over two dozen regulations since Trump took office, EPA said that in addition to NOx emissions standards, the “CTI will cut unnecessary red tape while simplifying certification of compliance requirements for heavy-duty trucks and engines.” The agency said that “areas of deregulatory focus will include onboard diagnostic requirements, cost-effective means of reassuring real world compliance by using modern and advanced technologies, the deterioration factor testing process, and concerns regarding annual recertification of engine families.” Commenting on the EPA initiative, John Mies, manager of corporate communications for Volvo Group North America (parent of Volvo Trucks North America and Mack Trucks) told HDT that the OEM “supports the agency’s decision to investigate whether additional NOx reductions are needed to address any of the nation’s last remaining air quality challenges. “This is a great opportunity to update and streamline the certification and compliance processes, ensuring a focus on real-world emissions control with minimal impediment to market vitality,” he continued. Mies added that, historically speaking, trucking has “delivered dramatic emissions reductions in response to EPA’s leadership in developing challenging but practical national emissions regulations.” The American Trucking Associations also applauded EPA for “taking the first step” toward issuing new NOx standards. “As an industry engaged in interstate commerce, ATA strongly favors a single national emission pathway as opposed to a patchwork of state standards,” ATA Executive Vice President of Advocacy Bill Sullivan said in a statement. He pointed out that trucking has “repeatedly demonstrated that it can work proactively and in partnership with the federal government in achieving these aims. We look forward to working with the EPA in developing a standard that achieves nationwide air quality improvements across the country while maintaining a strong and robust economy.” Global diesel engine maker Cummins Inc. also announced support for the EPA effort. “Cummins has a long history of working with regulators to help develop tough, clear and enforceable standards that lead to a cleaner, healthier and safer environment,” said Jennifer Rumsey, vice president and CTO. “We can and should do more to reduce NOx. This is an important step forward because a streamlined, national regulatory program brings consistency across the country allowing manufacturers to develop cleaner, more cost-effective solutions for our customers.” The Diesel Technology Forum advocacy group said that EPA’s action “follows petitions for rulemaking from a number of state and local air agencies, as well as support for a new low NOx standard from truck and engine makers. The EPA last revised these standards in January 2001. The CTI proposal [rulemaking] is slated to be released in 2020.” DTF added that it expects the planned low-NOX rulemaking for trucks will “help bring today's generation of diesel even nearer to zero emissions than ever before.” Truck and Engine Manufacturers Association President Jed Mandel called the Cleaner Trucks Initiative “a tremendous opportunity. We – EPA and the manufacturers – have done this before, and we’re ready to step forward to do it again. We ask the agency to follow that same successful roadmap by leading a collaborative, open regulatory process involving all stakeholders.” Mandel also stated that adopting a national low-NOX truck program with sufficient regulatory lead time, stability and certainty will be essential to provide a clear path for [truck and engine] manufacturers to succeed. “By working together,” he said, “we believe we can reduce emissions and improve and streamline the compliance program while at the same time preserve the necessary diversity of the commercial vehicle marketplace and protect the needs of our customers for durable, reliable products.” EPA has set up a website devoted to its new Cleaner Trucks Initiative. .

Ford's 2020 baby Bronco off-roader emerges in photos from dealer meeting Michael Martinez, Automotive News / November 13, 2018 Photos leaked from Ford Motor Co.'s annual dealer meeting last month in Las Vegas provide the first public look at the so-called baby Bronco, an upcoming off-road compact crossover. The vehicle, expected to slot between the EcoSport and Escape in Ford's crossover-heavy lineup, will debut in 2020 as a smaller companion to the Bronco SUV also due out that year. A name has not been announced, but one possibility is the Maverick, reviving a name that Ford used in the 1970s and trademarked this year. The images were first reported Tuesday morning by Off-Road.com, which believed them to be of the Bronco. They show front, side and three-quarter views. The vehicle has round LED headlights and "FORD" stamped on the grille without the company's blue oval logo, consistent with a teaser image of the Bronco companion that Ford showed this year. In the side view, the vehicle sits in front of a more boxy silhouette that is consistent with teasers of the Bronco that Ford has shown. Ford, in a statement Tuesday, said it doesn't comment on speculation. Jim Farley, Ford's president of global markets, told reporters last month that dealers were not shown any images of the Bronco at the Las Vegas meeting, although he did tease them with a shot of his own 1973 classic. .

Contact your axle's manufacturer. Call customer support at 1-800-826-HELP (4357) and ask them.

Smithsonian Channel / November 10, 2018 Video - https://www.youtube.com/watch?v=M8MM1CavmO8

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Transport Engineer / November 6, 2018 Welton Aggregates has added two new Range C430 8x4 tippers to its line-up – the latest of six new Renault vehicles to join the fleet in the past year. Supplied by Thompson Commercials of Grimsby, the Lincolnshire-based operator’s new additions are equipped with aggregate tipping bodies by Broughtons of Barnetby. The Range Cs are powered by the DTi 11-litre Euro VI engine, which produces 2550Nm of torque, coupled to an Optidriver 12-speed automated manual transmission system. The spacious cab is a hit with drivers, says Guy Tomlinson, Welton’s transport manager: “8x4 rigid tippers are not usually known for their comfort, but the Range C’s level of refinement is leagues ahead.” The vehicles also deliver on the road, he adds: “We’ve found them to be extremely sturdy, powerful and reliable, ideal for our application in off-road heavy construction and quarry work. “In fact we are so pleased that we’ve just placed an order for another vehicle, an 11-litre 6x4 C380 demountable mixer-tipper.” Other recent additions to the fleet, for use in the concrete operation, include three Range C 8x4 tridems with rear steer and 8m3 McPhee mixer bodies. .

Commercial Motor / November 9, 2018 We head to Northern Ireland to meet Kevin Mackin and to take a look at his impressive collection of vintage Scania trucks. .

Daimler Press Release / November 12, 2018 Successful production of transmissions for Daimler Trucks & Buses since 1955 Transmissions made in Gaggenau are used in seven vehicle brands of Daimler Trucks & Buses worldwide Frank Reintjes, Head of Global Powertrain, E-Mobility & Manufacturing Engineering Daimler Trucks: "Five million transmissions 'Made in Gaggenau' are an impressive milestone for both Gaggenau and our global production network: they stand for reliably high quality, for 63 years of competence and experience in the Daimler Trucks manufacturing network and not least for millions of satisfied customers worldwide." Matthias Jurytko, Head of Operations at the Mercedes-Benz plant in Gaggenau: "The only way to successfully produce this magnitude of transmissions and with this quality, is to have a highly-qualified and motivated team work hand-in-hand and with the greatest commitment. We can all be very proud of this at the plant." Gaggenau – The Mercedes-Benz plant at Gaggenau has set another milestone in its long history. On 12 November 2018 the five millionth commercial vehicle transmission left the production line at Rastatt's Gaggenau plant. The proud production team watched the 12-speed automated transmission (G330) ceremoniously leaving the production line – which is going to be exhibited, on show at the Rastatt plant. Dr. Frank Reintjes, Head of Global Powertrain, E-Mobility & Manufacturing Engineering Daimler Trucks acknowledged this very special achievement: "Five million transmissions 'Made in Gaggenau' are an impressive milestone for both Gaggenau and our global production network: they stand for reliably high quality, for 63 years of competence and experience in the Daimler Trucks manufacturing network and not least for millions of satisfied customers worldwide." The plant located in the northern Black Forest region boasts a long tradition of producing transmissions and can fall back on a great deal of experience: the production of the first special transmissions for the Mercedes-Benz Unimog began there in 1951. Production of medium-duty and heavy-duty transmissions for trucks and buses followed in 1955. Now part of a global production network, the Gaggenau plant delivers its drive assemblies and components the world over: to the truck assembly plant in Wörth in Germany's Rhineland-Palatinate region; to the Turkish plant in Aksaray; to Brazil, Japan, India, Mexico and the USA, for example. The medium and heavy-duty transmissions from Gaggenau are fitted in seven Daimler Truck and Bus brands: Mercedes-Benz, Setra, Fuso, Western Star, Freightliner, Thomas Built Buses and BharatBenz. Dr. Matthias Jurytko, Head of Operations at the plant thanked employees for their commitment during the ceremony: "Five million heavy-duty transmissions in 63 years once more underscores our excellent competence as a transmissions plant as well as the huge capacity of our factory. The only way to successfully produce this magnitude of transmissions and with this quality, is to have a highly-qualified and motivated team work hand-in-hand with the greatest commitment. We can all be very proud of this at the plant." Michael Brecht, Head of the Works Council also praised his colleagues: This is a fantastic achievement of the whole team, and each and every one should be very proud of that. Especially in the last few months the workload was extremely high due to an ever increasing output. We have already made a lot of investments in order to increase capacity and we will continue with those in the next two years. Therefore, I would like to give my special thanks to all colleagues – you do a brilliant job!” About the powerful manual transmissions for Daimler commercial vehicles The medium and heavy-duty transmissions are fitted in vehicles with the greatest output. These include the Mercedes-Benz Actros, the long-distance haulage truck and the Mercedes-Benz Arocs for construction site operations, the Mercedes-Benz Atego for short-radius distribution as well as the touring coaches, intercity and urban buses from Setra and Mercedes-Benz. Global Daimler truck brands fitted with transmissions from Gaggenau include the Freightliner Cascadia and Fuso Super Great. Over the years and during numerous development cycles, the manual transmissions have become increasingly fuel-efficient and consequently more economic for customers. This is mostly thanks to the aluminium housing whose weight has been continually optimised. A further important innovation was the move from manual transmissions to fully-automated manual transmissions that provide for further fuel savings, particularly in long-distance haulage thanks to finely tuned gearshift processes. The automated transmissions have been produced at the plant since the 1990s. Truck and bus transmissions of the current generation weigh between 200 and 300 kilograms, are over a metre in length and house 15 individual cogs and ripples. The fully-automated manual transmissions impress with easy operation, a high degree of shifting and driving comfort as well as low fuel consumption. About the production of heavy-duty transmissions at the Gaggenau plant Highly complex manual transmissions have been produced in the northern Black Forest region since 1955 – initially directly in Gaggenau and later in the Rastatt plant. Until 1965 when the Mercedes-Benz plant in Wörth was opened, cab-over-engine trucks like the "millipede" or the round-nosed trucks were produced in Gaggenau. After that, production focused on transmissions, axles and components for commercial vehicles and the Unimog. Whilst production of the first million manual transmissions took just over 20 years, only six years were needed for the fifth million. An overview of all production milestones since 1955: one million by 1976, two million by 1986, three million by 1993, four million by 2012 and five million by 2018. About the global platform strategy at Daimler Trucks For more than ten years now, Daimler Trucks has been relying on one uniform platform for the drivetrain for heavy-duty trucks. This comprises for the most part the engine, axles and transmission. The transmission generation in which production and the major components are standardised, is designed such that it can be adapted flexibly and individually to customer and market demands in the USA, Europe and Japan using the same technology. Detroit Diesel began series production of the automated DT12 transmission for the NAFTA market in 2015. In a close cooperation, staff from Gaggenau helped their colleagues with the run-up at the site in Detroit and trained them in modern production processes. About Global Powertrain at Daimler Trucks Global Powertrain doesn't just stand for integrated powertrains, but also for the integration of all global locations and the relevant functional areas along the value-added chain. The division produces innovative and reliable drive components with internationally uniform quality standards. The components are fitted in all of Daimler's commercial vehicle divisions and brands as well as in those of external customers. The drivetrain makes up approximately 50 percent of the added value of a truck – the largest share in fact – and thus makes an important contribution to the economic success and growth of Daimler Trucks. About the Mercedes-Benz Gaggenau plant The Mercedes-Benz Gaggenau plant was founded in 1894 as "Bergmann-Industriewerke GmbH" and is the oldest automotive manufacturing plant in the world. With around 6300 employees, it is not only the biggest employer in the town but also the region's most active company for apprenticeships. In addition to transmissions for all Daimler vehicle divisions, planetary and portal axles as well as torque converters for passenger cars are also produced at this plant. The Mercedes-Benz plant at Gaggenau is the Centre of Competence for commercial vehicle transmissions in the international Daimler AG manufacturing network. The staff support quality management worldwide, help with run-ups on site and train international teams at the Gaggenau plant. .

Renault Trucks International Press Release / November 6, 2018 Renault's international technician START competition is over. Thanks to all participants, who were able to demonstrate their many skills! And congrats to our great winners .

DAF Trucks Press Release / November 13, 2018 Our DAF Engine Plant in Eindhoven enters a new era in engine manufacturing. An area of almost 7,500 square meters is freed up to make room for more than 43 ultra-modern machines and 10 state-of-the-art robots. We’re now able to manufacture cylinder blocks and cylinder heads for our popular PACCAR MX-11 engines. .

Matt Cole, Commercial Carrier Journal (CCJ) / November 12, 2018 A brake light issue on certain Freightliner Cascadia tractors has prompted Daimler Trucks North America to recall more than 6,000 units to fix the problem. Daimler’s recall affects 6,326 model year 2017-2018 Cascadia tractors in which the brake lights may remain on after the brake pedal is released. Trucks included in the recall were manufactured between June 8, 2016, and June 30, 2017. Daimler has yet to develop a remedy for the recall, but it will begin notifying affected truck owners on Dec. 17, according to documents from the National Highway Traffic Safety Administration. Owners of affected trucks can contact DTNA customer service at 1-800-547-0712 with recall number FL-799. NHTSA’s recall number is 18V-742.

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Opposed-Piston Diesels Enter Limited Production Tom Berg, Heavy Duty Trucking (HDT) / November 9, 2018 A pair of heavy-duty opposed-piston engines will be produced for an emissions-reduction project in California, officials with the program announced Nov. 8 at a press event in San Diego. The two 10.6-liter 450-hp engines designed by Achates Power will run in Peterbilt tractors in regular service to prove the low-emissions performance that they’ve demonstrated in laboratory simulations, officials said. They will be operated within the state by the transportation arms of Tyson Foods and Walmart, and will be running by late 2019. Achates’ heavy-duty engine met the ultra-low nitrogen oxide standard of 0.02 gram per brake-horsepower-hour, which is 90% less than the current federal limit, said David Johnson, the firm’s president and CEO. That’s also up to 15-20% below the greenhouse gas requirement for carbon dioxide. The 0.02 grams per brake horsepower-hour (g/bhp-hr) Ultra-Low NOx standard target has been achieved in natural gas engines but not yet in a production diesel engine, according to a company announcement. The project team has started building the engines that will run in the Peterbilt demonstration vehicles. Achates is a development company whose engineers have been working to perfect the opposed-piston, or OP, concept since 2004. It expects to license designs to existing engine manufacturers but will assemble the in-service test engines at its San Diego facility. The demonstration project is funded by the California Air Resources Board (CARB) and several air-quality districts, and managed by CalStart, a Pasadena-based non-profit organization that encourages use of sustainable transportation methods. The Achates OP engine also achieves superior fuel efficiency by virtue of its lower heat losses, improved combustion and reduced pumping losses, Johnson said. An OP engine has two pistons per cylinder, facing each other, and a central combustion chamber. Explosive fuel burn pushes the pistons apart and their connecting rods twist separate crankshafts at each end of the cylinder. Through pulleys and gears, the crankshafts transfer their power to a single output shaft. It is a two-stroke design with no intake or exhaust valves; fuel-air mix and exhaust enter and leave the combustion chamber through ports in the cylinders. Achates Power is leading a project team with personnel from Aramco Services, BASF, Corning, Dana, Delphi, Eaton, Faurecia, Federal Mogul, Honeywell, Litens and Federal Mogul, along with the Southwest Research Institute. Peterbilt will integrate and deploy the new engine in two of its Model 579 Class 8 road tractors for the project. “This project challenges conventional wisdom in the industry: that ultra-low NOx cannot be combined with ultra-high efficiency in a diesel engine,” said Bill Van Amburg, CalStart’s executive vice president. “This impressive team is showing that you can significantly improve air quality while also making progress on climate change. We can and must do both. “Success in this project will support widespread commercial adoption of the ultra-low NOx standard in Class 7 and 8 trucks, which will support CARB’s – and the world’s – air quality and environmental goals.” Said Johnson, “Achates Power is committed to bringing the opposed-piston engine to market to provide a practical solution for ultra-clean, ultra-efficient and cost-effective transportation. Our project with CalStart for CARB shows the need in the market for solutions that will meet the goals we all desire, without forcing solutions on the industry.” .

We've all known people who are driving 20 to 30 year-old Toyota pickups, or Honda cars, and they still look great. You just don't see that many old GM vehicles, and if you do they're beat up. The interior materials used by GM right up to the present day, and both Car & Driver and Motor Trend often comment on this, are cheap when compared to the competition.

Why Paccar Inc. Stock Slid 16.1% in October Despite Solid Quarterly Numbers The Motley Fool / November 12, 2018 The truck manufacturer is benefiting from strong trucking markets, so what's worrying investors? What happened Paccar Inc. (NASDAQ:PCAR) was on its way to a strong year when October happened. Shares of Paccar [and Navistar] got caught in the broader industrials sell-off, and even better-than-expected quarterly earnings backed by exceptionally strong trucking markets couldn't help investors shrug off their pessimism. Paccar stock finally ended October down 16.1%, according to data provided by S&P Global Market Intelligence, and has barely budged so far this month. So what Orders for heavy-duty Class 8 trucks in North America are sitting at record highs, with October likely to be the eighth straight month of industry orders of more than 40,000 units, according to research firm FTR. As a leading truck manufacturer in the U.S., Paccar is making the most of the good times, as evidenced by its third-quarter numbers that were released on Oct. 23. In Q3, Paccar's production hit record highs, revenue climbed 14% to $5.76 billion, and net income soared 35% to $545.3 million. While the company didn't give out its backlog value, CEO Ron Armstrong revealed that Class 8 orders for Paccar's flagship truck brands, Kenworth and Peterbilt, more than doubled during the first nine months of the year compared with the year-ago period. Meanwhile, in Europe, Paccar's DAF brand achieved record market share of 16.6% in the above-16-tonne market, up from 15.1% same quarter last year. Given those numbers, it appears fears of escalating trade tensions between the U.S. and China and concerns about the trucking cycle peaking triggered a sell-off in Paccar shares in October. Now what While we can't say much about how long the trade war will last or how badly it'll affect Paccar, the trucking markets remain on a strong footing. Barely days ago, FTR raised its forecast for 2019 North American industry Class 8 truck shipments, as it foresees robust freight growth. Paccar, for its part, is chalking out plans to increase capital expenditures in 2019 by nearly 20% of the projected 2018 midpoint of $450 billion on new truck models, diesel and powertrain technologies, and capacity expansion for both trucks and parts. So if not for the broader market sell-off, October would've likely been a smoother ride for Paccar.

David Shepardson, Reuters / November 12, 2018 WASHINGTON - The U.S. Environmental Protection Agency on Monday will announce plans to propose new rules to significantly decrease emissions of smog-forming nitrogen oxide from diesel highway heavy-duty trucks and engines, an agency official said. Industry groups and state environmental officials have urged the EPA to set new nationwide rules as the state of California has been moving forward with plans to set new state emissions limits. California also wants nationwide rules in part because more than half of all trucks delivering goods in the state are registered in other states. The effort to impose a new regulatory limit by EPA comes as the Trump administration has generally touted its efforts to eliminate regulations. But the effort on nitrogen oxide (NOx) is backed by industry, which wants to avoid a patchwork of federal and state standards, the official said. In December 2016, the Obama-led EPA said in response to petitions to impose new standards that it acknowledged "a need for additional NOx reductions from on-highway heavy-duty engines, particularly in areas of the country with elevated levels of air pollution" and said it planned to propose new rules that could begin in the 2024 model year. Another administration official said Monday the new proposed emissions rules may not be announced until 2020.

My mindset of GM is stuck in the 1970s thru 1990s, when they blatantly designed cars to wear out, forcing customers back to the showroom. Toyota and Honda gave the BIG 3 a wake-up call with quality and durability.

Revived credit business helps GM finance its future Hannah Lutz & Michael Wayland, Automotive News / November 12, 2018 DETROIT — A business line General Motors pioneered nearly a century ago is expected to begin significantly contributing to the company's future, providing a fount of profits to fund investments in emerging technologies such as electrified and autonomous vehicles. GM Financial, the company's captive auto financing arm, paid GM a $375 million dividend on Oct. 30 that will be reflected in the GM's fourth-quarter earnings. It's the first in a series of annual payouts GM Financial will pay GM until it consistently holds 50 percent of GM retail sales penetration in the U.S., which is expected to occur in the early 2020s. The dividend, according to GM CFO Dhivya Suryadevara, will strengthen long-term cash generation and free cash flow — targeted to be $4 billion to end 2018. "Combined with the ongoing GM Financial dividend and our focus on cost reduction, we see significant opportunity to improve cash generation," she told analysts when discussing third-quarter earnings on Oct. 31. "We are confident in the opportunity ahead of us and continue to expect strong performance over the short term as well as the long term." GM Financial refers to its leverage ratio — measured as the ratio of net earning assets to tangible net worth — to determine how and when to send capital back to GM. 'True captive' In 2015, announced a target to more than double pretax earnings of $803 million from 2014 to as much as $2 billion for GM Financial by 2018. Through the first nine months of this year, it was at $1.48 billion. Suryadevara said earnings for GM Financial will experience "traditional seasonality" in the fourth quarter, but the business will still report "significant" profit growth for the year compared to 2017. Financing 50 percent of GM's retail sales in the U.S. has been an important goal in delivering on GM Financial's value propositions, said GM Financial CFO Susan Sheffield. "We talk about loyalty and retention and are a true captive at those levels," she told Automotive News this month. GM has a long, complex and pioneering history with captive financing firms. It established General Motors Acceptance Corp. as the industry's first captive finance company in 1919 — decades ahead of others such as Ford Motor Co. The business helped GM weather difficult times in its core automotive business and later diversified into other financial services, such as insurance and mortgages. However, GM sold its majority stake in the company in 2006 in a scramble to raise cash. It further reduced its stake in 2009, as part of its government bailout and bankruptcy restructuring. The rebranded business became the independent bank Ally Financial, which continued to provide financing to GM dealers and customers. But GM didn't stay out of the financing game for long. In 2010, it formed GM Financial with the acquisition of subprime lender AmeriCredit and has expanded the business by adding services such as prime and floorplan lending and taking or acquiring business from Ally. In 2015, GM notified Ally that it would steer all of its lease subsidies for its brands in the U.S. to GM Financial, instead of distributing them among Ally, GM Financial and, to a lesser extent, U.S. Bank. The move gives GM more control of its customer data and a better shot at keeping its off-lease customers. Ally also sold GM many of its international business operations such as China, Europe, South America and Mexico starting in 2013 — the same year it sold its remaining stake in Ally. Suryadevara said GM expects the financial arm to continue doing well despite challenges such as higher interest rates. "We're, again, continuing to risk-manage this business, and this is going to be a strong contributor to earnings as we move forward," she said. While the unit's financial results have improved — a net income of $441 million in the third quarter vs. $51.3 million eight years ago — GM Financial still has operational and reputation hurdles to clear. It ranked below average on the J.D. Power 2018 U.S. Dealer Financing Satisfaction Study, which followed as many as 2.5 million GM Financial customers affected by problems that followed a systemwide technology upgrade in late December. From January through May, the lender stopped reporting customers' payment information to credit bureaus. The reporting halt saved some past-due customers from the consequences of late payments but customers applying for other types of loans were left in limbo. The company quickly resolved several problems including customers who were overcharged or undercharged, but the effort was further complicated by intermittent phone outages. "Frankly, we didn't have the capacity to grow to the size we expect to grow to in the coming years," Bob Beatty, executive vice president of customer experience, told Automotive News in January. . GM Financial vs. Ford Credit General Motors beat Ford by decades in establishing a captive finance company, but today Ford Motor Credit is more profitable: FORD CREDIT GM FINANCIAL Q3 9 mos Q3 9 mos Revenue $3 billion $8.9 billion $3.5 billion $10.4 billion Pretax profit $678 million $2 billion $498 million $1.5 billion Net income $518 million $1.7 billion $441 million $1.3 billion . Heir to GMAC General Motors has a long and recently complex history with auto financing. 1919: GM creates General Motors Acceptance Corp. It becomes the model for modern captive finance companies. Ford follows 40 years later with Ford Motor Credit Co. 1980s-90s: GMAC expands into mortgages and corporate finance. 2006: GM sells a majority stake in GMAC to raise cash. 2009: GM further reduces its stake in GMAC, as both companies receive government bailouts. 2010: GM purchases subprime lender AmeriCredit and turns it into GM Financial; GMAC is renamed Ally Financial. 2013: GM sells its remaining ownership in Ally, and buys many of its international operations. 2014: Ally goes public at IPO price of $25 a share. 2018: GM Financial pays first dividend of $375 million to GM.