EuroWire July 2017

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Transatlantic cable
July 2017 28
But, noted Mr Leggett, “Car makers do use a variety of software
to regulate emissions control systems – to ensure that they only
work at the correct temperature, for example. Otherwise parts of
the system can be damaged.”
Fiat Chrysler insists that it did not set out to cheat the testing
process. Nevertheless, earlier this year it was informed of the
EPA’s concerns and asked to provide an explanation. Mr Leggett
summed up: “It seems the authorities, so far at least, aren’t
satis ed with what they’ve heard.”
General Motors may be quitting the Indian
domestic market but it is bullish about
exports of its cars from India
Another car maker recalibrating its international ambitions is
General Motors of the USA. Having determined on a global
business restructuring, the rm on 19th May announced that it
would stop turning out Chevrolet cars for the Indian market by
the end of 2017. Its plant in Maharashtra will continue making
cars but exclusively for overseas markets, mainly in Central and
South America.
As noted by the BBC, GM had planned to invest $1 billion to
boost its presence in India, but its sales for the year ended in
March fell below one per cent of the market. The disappointing
results were in striking contrast to another set of company
gures for the same period.
“In India, our exports have tripled over the past year, and this will
remain our focus going forward,” GM’s international president
Stefan Jacoby said in a statement.
An irony of the decision is that it comes amid predictions that
India will become the world’s third-biggest vehicle market by
2020. But GM, nothing daunted, has disclosed roughly similar
export-centred plans for South and East African markets.
The American car maker said it would stop o ering cars in South
Africa and sell its manufacturing business there to Isuzu Motors.
The Japanese maker of commercial vehicles and diesel engines
will also purchase a 57.7 per cent share in GM’s East Africa
operations, assuming management control.
“As a result of these actions, GM expects to realise annual
savings of approximately $100 million and plans to take a charge
of approximately $500 million in the second quarter of 2017,” the
company said in a statement.
† As a small indication of possible ambivalence about taking
itself out of the domestic Indian market forever, GM said
it will continue to provide maintenance services to Indian
owners of its cars.
‘Big rigs’
Owing more on their equipment than the
resale value, long-haul carriers in the USA are
stymied at a bad time for the industry
The term “underwater” was heard often in the USA during the
recession of 2007-2009, when a precipitous drop in the value
of real estate left many owners with high-payment mortgages
on low-worth properties. Similarly, now, a market glut of used
heavy-duty trucks has brought “upside down” into common use
among long-haul carriers, many of whom owe more on their
trucks than they can expect to realise at resale.
Large American long-haul trucking companies typically run
a truck for three to ve years. Because repair and maintenance
costs tend to soar after about 500,000 miles, the owner will
generally seek to o oad the equipment before the warranty
expires.
This background was provided by Jennifer Smith of the Wall
Street Journal , who recently reported on the glut of used big rigs
that is oppressing USA trucking companies already a ected by
a prolonged slump in the freight market. When transportation
demand was booming a few years ago, eets bought scores of
new trucks – main assets for many of them.
“Then US manufacturing activity agged and import growth
slowed as retailers rang up disappointing sales,” Ms Smith wrote.
”Freight volumes started stalling out in late 2015, leaving too
many trucks competing for cargo.” Following one of the steepest
plunges in used-truck prices since the recession, that pattern has
been disrupted. (“Trucking Industry’s Tale of Woe: Too Many Big
Rigs,” 12th May)
According to JD Power Valuation Services, the average retail
price for a used Class 8 sleeper, the heavy-duty tractor used for
long-haul routes, plunged some 22 per cent, to about $49,000,
over the two years through March. As noted by Ms Smith, that
translates to a decrease of some $140 million across a eet of
10,000 trucks.
† In April, Ryder System Inc (Miami, Florida), a
commercial-truck operator with a large leasing and
commercial rental division, reported that its rst-quarter
earnings fell 32 per cent from a year earlier. The company
blamed in part the soft used-vehicle market, as well as weak-
er-than-expected demand for commercial-vehicle rentals.
“Some carriers that expanded their eets now are cutting
the number of trucks they run,” wrote Ms Smith. “That feeds
more vehicles into the market and works to keep used-truck
values down.”
† Chris Visser, senior commercial-truck analyst at JD Power,
told the Journal that, while used-vehicle prices are showing
signs of bottoming out, the supply of used big rigs is
expected to remain substantial into 2020. If freight demand
fails to improve, he said, pricing will remain depressed.
Steel
A falcon 41 feet tall and
with a 68-foot wingspan is made entirely of
stainless steel – 36.5 tons of it
Already home to the National Football League (NFL) team
Atlanta Falcons and the professional soccer club Atlanta United,
the huge Mercedes-Benz Stadium (seating capacity: 70,000)
is about to welcome another impressive tenant – the world’s
largest free-standing bird sculpture.
The engineering marvel being installed on the main plaza of
the stadium faces the city skyline and is vividly present to those
approaching. As described by Joe Reisigl of Atlanta magazine,
“It seems poised to intimidate any fans of the opposing team
with its erce glare, razor-sharp steel plates stabbing out of its
body like daggers, and talons seized tight around a bronze