As the curtain closes on 2018, we're looking back at the biggest stories that defined the auto industry. The industry is coming off a near-record year for sales, yet business is being complicated by the president's trade war, and companies like GM and Ford are lining up layoffs to position themselves for a downturn. Meanwhile, the industry mourned the passing of former Fiat-Chrysler CEO Sergio Marchionne and looked on in bemusement at Tesla's unpredictable CEO, Elon Musk.
Carlos Ghosn arrested and jailedVying with Elon Musk for the strangest story in the auto industry in 2018 is the ongoing legal saga of Carlos Ghosn. To recap: The former chairman of the Nissan-Renault-Mitsubishi alliance was arrested with another former Nissan executive, Greg Kelly, in Tokyo on Nov. 19, charged with underreporting his income and accused of other financial misdeeds. Both Nissan and Mitsubishi have fired him as chairman, though he retains the position for now with Renault. The turn of events has raised questions about the future of the three-company alliance and speculation that Nissan may have orchestrated his downfall to gain power or even independence. Meanwhile, Ghosn remains in jail, where he is getting a firsthand view of Japan's brutal criminal justice system.
Elon Musk's wild rideFew people (though Donald Trump comes to mind) can match the Tesla leader for sheer bluster, raw impulse, unpredictability and ill-advised Twitter usage, and Elon Musk gave us plenty of jaw-dropping moments in 2018. There's the juicy but relatively small-potatoes stuff: his calling a British caver a pedophile; his lashing out at journalists; locking horns with short-sellers; his trolling Warren Buffett; his allegations of "sabotage" against a former employee; and that shockingly raw confessional interview with the New York Times in which he acknowledged using Ambien to sleep and working up to 120 hours a week. Then there was the truly consequential stuff, punctuated by his poorly orchestrated bid to take Tesla private and the trouble it got him in with the SEC. It all threatened to overshadow what is a more hopeful story: Tesla posted a rare quarterly profit in October on rising production numbers and strong sales of the Model 3.
GM layoffsAll things considered, times are pretty good right now for General Motors, which reported a $2.5 billion profit in its most recent quarterly filing and nearly $20 billion in cash on hand on strong sales of high-margin trucks and utility vehicles. Then it dropped the hammer in shocking fashion, announcing in November it would slash as many as 14,000 jobs and end production at five plants that build or support six slow-selling sedans. GM says the move is about being proactive, preparing for the next downturn and readjusting operations to reflect larger industry trends toward electric vehicles and self-driving cars. But it reminded many people of the dark days a decade ago, when GM hemorrhaged thousands of jobs on its slide into bankruptcy. To others, it was a stark reminder of the brutality of modern capitalism.
Trade war rocks automakersPresident Trump waded into the globalized auto industry in 2018 like a bull in a china shop, enacting tariffs on imported steel and aluminum, upending the North American Free Trade Agreement to strike a new agreement with Canada and Mexico, and enacting steep tariffs on imports from China, the world's largest auto market. That's increased prices for imported vehicles and U.S. exports, and you don't have to look far to see how it has complicated things for automakers. GM has said the tariffs have added $ 1 billion in costs for raw materials. So did Ford, which also scrapped plans to import the Chinese-built Focus Active to the U.S. Volvo, which is owned by Chinese automaker Geely, opted to indefinitely postpone a planned IPO. Tesla's sales in China have fallen off a cliff, and the German automakers are also seen as particularly exposed to risk as the trade war drags on. Just how long the trade war does drag on, or where it all leads, is anyone's guess. But at least Trump has held off so far on his threats to target imported vehicles.
Sergio Marchionne mysteriously diesBy joining it with Fiat, Sergio Marchiane threw Chrysler a lifeline and quickly revived its post-bankruptcy fortunes by elevating Jeep and Ram into international cash cows. The former philosophy student was one of the most colorful personalities in the auto industry, known for his sweaters, chain-smoking and relentlessly pursuing mergers with the likes of General Motors. His unexpected death at age 66, in July, came ahead of his planned retirement in 2019, the result of complications following surgery on his shoulder in Switzerland that Fiat Chrysler has never fully explained. He was replaced as FCA chief executive by Jeep and Ram veteran Mike Manley, but many would argue no one can really replace someone like Marchionne.
Ford's car cullTrucks and utility vehicles have been extending their lead over traditional sedans in the U.S. market for a few years now, but Ford's announcement in April that it will phase out all of its passenger cars save the venerable Mustang and double-down on profitable trucks, crossovers and SUVs sent ripples across the industry. It's a bold move for a brand that has struggled all year with a flagging stock price, with investors saying Ford's turnaround plan under CEO Jim Hackett lacks transparency and that it's behind the curve on trends including electric vehicles and autonomy. The announcement also overshadowed a big year for Ford news, including a major new ad campaign, its expansion into Corktown and the Michigan Central Station, and the buzz surrounding the Mustang Bullitt.
Uber autonomy's fatal setbackIn March, a Volvo equipped with Uber's self-driving technology struck and killed a woman walking her bike across the street in Tempe, Ariz. The news confirmed the public's worst fears about autonomous vehicles, the first known case of a fatality at the hands of a self-driving vehicle in the United States. Federal investigators determined that Uber had disabled an emergency braking system in the XC90, and the self-driving software failed to recognize the pedestrian. Uber only recently resumed testing its autonomous Volvos in Pittsburgh by pledging to have two human backup drivers, drive only during daylight hours, and stick to streets with 25 mph speed limits. Waymo, meanwhile, continues to lead the self-driving pack.
Climate change report cries out for actionThat giant thud you heard in October was the sound of the Intergovernmental Panel on Climate Change's report laying out humanity's dwindling options to minimize the impact of a warming planet. In short, it says our options are fast running out for limiting global temperature rise and related catastrophes, such as the wildfire that wiped the town of Paradise, Calif., off the map. (And just think: The U.S. seeks to freeze emissions standards and showed up to the U.N. climate conference in Poland this month promoting coal!) Of course, driving is a significant source of the carbon emissions that are imperiling our home planet. So we put together a list of suggestions for ways you, as an automobile lover, can minimize your carbon footprint.
Jeep gets back into the truck gameThe Jeep brand is on fire, as shown by the rapturous reception to the new Gladiator four-door pickup truck. It's essentially a longer Wrangler with a new frame and a longer wheelbase, solid payload and towing numbers, removable top and doors, and tons of cool off-road and cargo features. Everyone was calling the forthcoming truck the Scrambler, a legacy nameplate, until it officially became known as the Gladiator, which was the name of a Jeep pickup concept from 2005. Jeep hasn't had a pickup on the market since the Comanche in 1992.
Rise of the Tesla fightersBeing outsold on your home turf will do it, but 2018 was the year European automakers finally got serious about taking on Tesla in offering high-end electric vehicles. Porsche burst out of the gate with the Taycan (TIE-kahn), and consumers have reportedly responded enthusiastically. Audi responded with the 2020 E-Tron midsize SUV to compete against the Model X, as did Jaguar with the all-electric I-Pace. As for the other Germans, they're planning EVs for 2020 — Mercedes-Benz with the EQC 400 crossover, and BMW with the iX3 crossover and i4 four-door coupe. Better late than never?