WCA November 2014

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52 Wire & Cable ASIA – November/December 2014
From the Americas
that a Tesla died 12,000 miles into a 15,743-mile test run,
requiring a ‘hard reset’ to restore most of its functions. The
trim panels had to be replaced to fix a creaky noise coming
from the roof. Multiple other parts also required replacement.
(‘Tesla Hit By Another Harsh Review,’ 12th August)
By the time Consumer Reports weighed in, CEO Elon Musk
of Tesla Motors had responded to the Edmunds assertion
of a frequent need for both hardware and software fixes
to the Model S, insisting that the policy of the company’s
service department is to err on the side of caution in
unnecessarily swapping out parts.
Mr Kaufman pointed out that when, two years ago,
Consumer Reports lavished praise on the Model S, the only
real concern it expressed was about the feasibility of driving
the car long distances.
Even so, he wrote, Tesla’s stock price soared in the months
that followed, outpacing those of its older auto industry
rivals such as General Motors, Fiat, Ford, Daimler and
Toyota.
With the increasing number of supercharger plug-in stations
across the USA, the problem of long-distance driving has
been addressed. But, Mr Kaufman wrote in August, “Tesla
just got another dent.”
 In other news of Tesla Motors, the company announced
that, together with Panasonic, it will build a large-scale
plant in the USA which by 2020 will employ 6,500
people in producing batteries for Tesla’s all-electric
vehicles as well as modules for the stationary storage
market.
Its intention, Tesla said, is to reduce the costs of making
battery packs, enabling the company ‘to meet its goal
of advancing mass market electric vehicles.’ Currently,
the requirement for large batteries tends to price
electric cars out of a market dominated by conventional
gas-powered models.
For the projected ‘Gigafactory’ – plant and associated
supplier complex – Tesla will ‘prepare, provide and
manage the land, buildings and utilities’ as well as
assemble the battery packs. Panasonic will invest in
machinery and tools and manufacture and supply the
lithium-ion cells needed for the batteries.
Yoshihiko Yamada, Panasonic’s executive vice
president, said in an accompanying statement on 31st
July that the Japanese company believed the joint
project would ‘accelerate the expansion of the electric
vehicle market.’ So far, that effect has eluded Tesla,
which according to Autodata sold only about 1,500 cars
in June and 9,100 in the first half – totals up by only a
little from those periods of 2013.
General Motors tries to rise above its
financial woes, but substantial fines
and criminal charges may lie ahead
A second-quarter earnings report from General Motors
Co recorded a drop of about 85 per cent in the quarter,
mainly the result of the automaker’s recalls of defective
small cars, begun in February. A $400 million charge was
taken to compensate those affected by faulty ignitions
that can cut engine power and disable air bags. The
disclosure marked the first time GM had specified the
expected cost of such compensation, a total that it said
could grow.
The report, published 24th July, indicated that GM –
after issuing 60 long-delayed recalls and accumulating
$3.8 billion in costs for vehicle repairs and payments
to accident victims – was trying to confine as much
as possible of the financial damage to the first half of
the year.
The company also took an $874 million charge to cover
future recall costs. The two charges came on top of the
$2.5 billion already spent on recalls in 2014.
But GM – the world’s second-largest automaker by sales,
after Toyota of Japan – still faces significant potential
liabilities. In a federal filing, GM said that 45 state attorneys
general were investigating the company’s failure for years to
fix defective switches that it had tied to at least 13 deaths
and 54 accidents.
In addition, more than 100 class-action lawsuits have been
filed against GM in the USA and Canada, and investigations
by the US Justice Department and Securities and Exchange
Commission (SEC) could prompt substantial fines and
criminal charges.
 Ironically, for a company with safety-related problems
on such a scale, General Motors fielded the only entry
in a small-car test group to earn a 2014 Top Safety
Pick+ award from the US Insurance Institute for Highway
Safety (IIHS). But this certifiably safe car – the Chevrolet
Volt, which has a basic-rated optional forward collision
warning system – is unlikely to recoup GM’s fortunes.
Sales numbers for the Volt dropped 12.6 per cent to
8,615 in the first half.
“No one could say it is any more than a niche product,”
said Douglas A McIntyre on the financial news site
24/7 Wall Street, recalling that the Volt was introduced
in 2007 as a key to GM’s future. But issues with battery
fires in 2011 made the car a public relations nightmare
for the company – a harbinger of worse to come.
“There is no way back to success for the Volt,”
Mr McIntyre wrote (30th July). “It has fallen much too far
behind in the market for electric engine cars.”
Elsewhere in automotive . . .
 No longer challenged by excess capacity, auto suppliers
in the US are now facing the demands of a recovering
industry, David Andrea, senior vice president of the
Original Equipment Suppliers Association, said at a
7th August management briefing seminar in Michigan.
With so many vehicle and parts launches this year,
automakers and suppliers need each other, Mr Andrea
told business writer Alisa Priddle of the Detroit Free
Press.