Auto Headlines From 10 Yrs Ago, Fisker Owners Banding Together, Will Crowdstrike Pay Delta

Paul J Daly: 0:05

All right. It's Tuesday, July 30. There's crap going on about October and Halloween that I just have a problem with. But we're gonna talk about some headlines that are from the past, not from the future who is and who sometimes in the summer, Kyle, the new cycle, no means we're not in the general news cycle because the election but like, automotive news cycle tends to slow down a little in the summer. I don't know if you've noticed. That's

‍Kyle Mountsier: 0:31

exactly what happens. Because all the car dealers out here just selling cars. They're like, forget about talking about anything. Don't bother me in cars for another month and a half, then we can talk about all the stuff, okay? No.

Paul J Daly: 0:43

And it's been brutal. If you it's been brutal, it's so brutal. That today, we were like, You know what, we're gonna have fun. Forget this new cycle, talking about the paper clips being changed out at Ford headquarters, or whatever it is that we're talking about these days when we're looking for stories. And we're gonna go back a little bit. But we're still still Oh, Joshua, we're going to tell this story. Did you guys have a nice costume? We'll tell that story in a second. It's important to note that next week, even with new cycles aside, the business is moving forward regulations moving forward, the things you have to worry about in September moving forward. So we're having a soda wedge, quick, quick shot webinar. On the seventh. Is it the seven? Yes, seven. So a week from tomorrow, you have to register now. Right? Go to a soda.com register for the webinar, we're going to be with James Ganser of mosaic. Always fun to have James on even more fun to heckle him. If you want to be there live. And in the comments. We're going to be talking about what's been going on with the cars rule and what you need to be ready for once the kids go back to school. And you know, Congress is back in session and all that good stuff. Because there's some stuff coming down the pike. It's

Kyle Mountsier: 1:48

gonna be brewing, that's for sure. It's gonna be a hot fall. Hot fall,

Paul J Daly: 1:52

hot fall in New York. You can have a hot fall. No, he didn't. How do you segue in the intro? That's amazing. I

Kyle Mountsier: 1:57

say great in the intro, give it to him. Paul. I feel unique. With your hand up, like

Paul J Daly: 2:05

I posted on LinkedIn last night, a picture. It's the rare evening, Tuesday, Monday evening posts for me on LinkedIn, I was so angry and upset. I actually posted it on Instagram, too. I was in Costco. He said I went to too. So I was like, I'm gonna Instagram for this one. I was in I went to Costco with my little four year old and like mom and girls, and they were out. And so we're like, let's go to Costco and buy dog food because that's what you do. And we walked in, and when you know it, there was a full rack of Halloween costumes. And I was so upset about this. I could just go on social media and announce it in the strongest possible terms. What are you thinking Costco, and then everybody in the comments is like, Oh, they have stuff out at Lowe's too. And Cracker Barrels got Christmas stuff up what is going on with this world?

Kyle Mountsier: 2:54

It's a hallmark world and we're living in it poem. That's the problem. It's July. It's hallmarks world we're living by these holidays. But man, he paused for a minute. There

Paul J Daly: 3:05

is there is a strange gap, though. Think about it between the Fourth of July. And I guess Labor Day kind of counts. Right? Yeah, but that's like you buy food for a week. Not even a week, not because you gotta go to school the next day, right? Like there's not a thing. So I guess Halloween really is like there's a pretty big gap there. So I guess I'm a retailer. I'm trying to get creative. And that was a let's just put it this way. I wasn't happy about it yesterday. Pete Kelso chiming in on the comments. I was literally talking about Costco costumes being out too early yesterday. See, but

Kyle Mountsier: 3:35

here's the thing. You went to the checkout line, then you smelled the hot dogs and then life was

Paul J Daly: 3:40

Why didn't I was angry Kyle. I left I left angry. They say never go to bed angry. You know, I left I left Costco angry yesterday. Oh, we're at Costco, but not poor Costco because I'll go back and spend

Kyle Mountsier: 3:55

all the money. What are they gonna do?

Paul J Daly: 3:57

What are they gonna do? Okay, so let's talk about some news. This first story today is a lot different than what we usually do. So since the news cycle, and auto does tend to slow down during the summer, we thought we try a new segment today where we look back in the industry at some headlines from back you know, 10 years ago, we're going back 10 years when you had more hair. Maybe you had darker hair, you probably had less children. Or when let's be honest, some of our audience was still in middle school. Isn't that weird to think about?

Kyle Mountsier: 4:25

Oh it's so true.

Paul J Daly: 4:30

It's true. You're 21 in the industry today. Guess what? 10 years ago you were 11

Kyle Mountsier: 4:35

Oh my god newer 11 That's intense. Alright, so we

Paul J Daly: 4:39

took a job back end of July 2014 automotive news headlines. Number one Millennials are just started talking about millennials back then we were all in on. Millennials are drawn to car sharing services. Oh no. Oh, but eventually they buy car and here's the subhead card ride sharing pro programs are changing the way city dwellers get around and the way Millennials think about car ownership. automakers have noticed and are experimenting with ways to adapt, creating partners with car sharing services or offering their own transportation services. Remember that?

Kyle Mountsier: 5:14

Golly, wasn't that a time? This my gosh,

Paul J Daly: 5:18

and that now like fast forward to what the Tsar is this? Yeah,

Kyle Mountsier: 5:21

you were fine. Yeah, you think about the reality of cycles and and even you know, this morning, in in a few different like in our daily email and and a couple other news sources, just people pointing it, hey, look at Toyota is kind of, you know, getting the cycle at this point where last year they were getting the hammer for not going all EVs and then they're getting the cycle of like, look, they're doing gas powered with, like, and so you look back to 2014. And we're talking about one, we're not talking about Gen Z, we're talking about millennials. I mean, my generation was just getting hated you

Paul J Daly: 5:59

were in your 20s Bazmee taken all the shots. We're taking all the

Kyle Mountsier: 6:03

shots, right? And talking about car sharing services, we're talking about that and up until 2019. And that is just waned completely.

Paul J Daly: 6:11

Absolutely. I mean, it's just part of normal life now. Yeah. And guess what? Millennials are buying a lot of cars lots. And by the way, they're also doing a really great job working in the industry and managing the industry. It's a pretty awesome four years ago. Can we learn from a decade ago? Oh, remember this one? Nissan expands us recall of cars with defective Takata airbags? Wow.

Kyle Mountsier: 6:33

That was the thing. What a scandal. What a mess.

Paul J Daly: 6:36

Everybody it was a Nissan or Honda just shuttered a little bit.

Kyle Mountsier: 6:39

Everyone I mean, it hit everyone. I remember being a part of just all the conversations customers calling in questions on whether or not it's going to blow up in my face. Like those big deal. Now.

Paul J Daly: 6:53

Here's your crazy some water here.

Kyle Mountsier: 6:54

There you go. Here's a crazy one. Group one q2 profit tumbles 55%. On Brazilian problems. Stock price was around$55. Okay, well, yeah, that's a separate note. So

Paul J Daly: 7:04

that group one profits tumbled 55. I had a check. I had a check. Go ahead. What was that? So

Kyle Mountsier: 7:12

it was it was around $55 A share back then. This is only 10 years ago, this is 10 years only 10 years ago, years ago. And yesterday, it closed around, dial it up to$338 a share.

Paul J Daly: 7:31

That if you're counting is a 614% increase. So meaning if you invested the dollar in the auto industry in group one specifically, just 10 years ago, you'd be up 614% I don't know if you need to call your stock your advisor and be like, hey, what was my portfolio up in the last 10 years? Wasn't 614%? Not at all. So shout outs to the auto industry on that one. Finally, 10 years ago, 10 years ago, they were still in the news Fiskars Chinese owner, get that Fiskars Chinese owner plans a second model after karma output resumes. Speaking of Fisker segway

Kyle Mountsier: 8:09

All right, hit him

Paul J Daly: 8:10

fast forwarding now we're taking the time machine back forward where current day still talking about Fisker different kinds of Fisker Fisker, ocean owners are rallying to keep their vehicles operational despite the company's bankruptcy. The Fisker Owners Association they're calling themselves is at the forefront organizing efforts to secure parts and maintain their little electric SUVs. Fisker stops production and may fall by bankruptcy in June with over 6000 Fisker ocean sold before the stoppage and then after the stoppage they like they they were able to unload the rest of them to American transportation outside New York City for like it was like 3200 units or something. So the Fisker ocean owners, they formed this association to make sure that they could like kind of lobby to have continued access to parts and more importantly, software, American lease they did purchase the remaining inventory, maybe adding some parts supply, right because they have several 1000 their transportation company right they probably have some more leverage there. Daniel shum got access to all the software. That's right, they did. That's right. The association's attorney emphasized the highest priority for us is to make sure that these vehicles are not very expensive hunks of metal in the year

Unknown: 9:21

yeah. The

Paul J Daly: 9:23

software part of this phrase it's

Kyle Mountsier: 9:25

not like Braille something I feel something I can't imagine being having purchased them you know 30 $40,000 vehicle that now you're sitting there going where am I gonna get parts where am I gonna get software updates? Is the software going to be secure over time? Anything

Paul J Daly: 9:39

like that one? You got to be real motivated if you're like putting time and energy and trying to develop a hack for Fisker ocean. Yeah, I

Kyle Mountsier: 9:45

guess so. That's probably true.

Paul J Daly: 9:46

You know what I mean? The problem is actually is probably the safest TV with like, no firewall. So So here's another thing though, like they were saying in the article that you're you were only law How to have one key fob with the vehicle. Hmm. So you can't get a second key fob. So they're trying to figure out like a way that they can unlock it so they can use their phone as a key. Smart. Yeah, but that totally changes the game

Kyle Mountsier: 10:12

if you lose a key totally changes the game. Wow. Yeah. This is like, oh, yeah, man, I would love to talk to like some Fisker owners are part of this association to kind of figure out what they're doing. I'm sure American lease is going to if they've got all those vehicles, they're going to be taking that software

Paul J Daly: 10:31

they're probably going to end up buying the rest of them. You would think so they're gonna buy the rest of them for like 15 grand in like, all of them from all the all of them for 15 grand total. I know. So poor. Yeah,

Kyle Mountsier: 10:46

what a thing.

Paul J Daly: 10:46

But 10 years later, 10 years later, who knows it will be 10 years from now but speaking of software, stay on.

Kyle Mountsier: 10:56

So if you're the traveling type, you know the dealers are not the only ones looking for cash from a software company as Delta Airlines is gearing up to seek compensation from cybersecurity firm CrowdStrike. The firm that is known for basically make making 1% of Microsoft go down. It follows a software update that affected global businesses destruction, severely impacting Delta actually I had Delta flights totally wiped out supposed to be in Syracuse now you were didn't happen. The embarrassment for that listen to this animus analysts estimate the delta will experience a substantial substantial financial loss ranging from 350 million to 500 million bucks this quarter Bill mutation, normal damage, unnecessary ticket refunds. CrowdStrike Terms and Conditions limit their ability to pay fees for the software. So basically, all that delta can come after is the paid fees, which is nowhere close to that dollar amount significantly restricting potential compensation claims. Other legal advisors have said that similar cases have shown companies like count CrowdStrike I've actually succeed in defending against these financial damages due to contractual protections. So Mario, Marie CIO Sanchez, a senior director at a tech market research firm Del Oro group said that CrowdStrike may not have to pay at all said while it will be a miserable summer for CrowdStrike lawyers as they defend themselves from customers with torches and pitchforks. I don't see CrowdStrike having to pay much, if any compensation. Yeah. Wow.

Paul J Daly: 12:35

I mean, I guess I guess it makes sense. Who insures this kind of thing? Right? If it's that easy, if it's that easy for one? glitcher? What we'll see we'll figure it out. Maybe maybe one day what happened. But like for one thing to affect such a large swath of business and inconvenience, right? If you're CrowdStrike? Like, that's what you're right into the contract. Right? That's what you have to Yeah. And then if your business interruption insurance, like how do you? How do you like, even come close to having a premium that would cover against something like that for an airline? So I think that is probably just the loss. Right? It's probably just the loss. And and, you know, this conversation is super relevant right now, you know, we talked yesterday, and went back several, several back and forth hearing from dealers, because CDK came out saying, you know, they're going to offer one month's worth of subscription as compensation for, you know, the whole the whole CDK shut down, you know, last month, and some dealers are just moving on. Some dealers are like one month, about, you know, could be around 20 grand, not nearly enough for damages that actually happen, they have to actually prove loss, right, aside from like, overtime hours and things like that. How do you actually prove that business slow down? Right? I mean, it pushes many, it's Yeah, and

Kyle Mountsier: 13:48

delta is probably going to have an easier and easier way to go about that. Just because all their transactions, for the most part are digital.

Unknown: 13:56

Right? Still, like, nonstop flights is a real thing, right? Let's really shoot this amount of refunds, reputational damage. Yeah. And I haven't read books or anything like that. So like, that's just straight to your never flame Delta again. Yeah. Steve dreamfields Gonna boycott over this

Kyle Mountsier: 14:10

Not a chance. Yeah. But, you know, you look at that, and you just like, you start to see these software companies and and recognize that a lot more is at stake than just like, you know, a simple refund or, or having to deal with, you know, what are the what are the loss potentials around these things. And so, I think that there's some level of compassion that can be gained out of this, you know, for dealers with the software companies that are out there, that it's not just an auto thing. It's just a universal thing. When you're dealing with software, when you deal with technology, these things could come up and it's going to have a business impact sometime being resilient enough to go through that is the best case scenario.

Paul J Daly: 14:51

It is a look, we did our best to give you an engaging 14 minutes and 55 seconds. I hope we accomplished it. So now you can take that energy You that care that love that knowledge those laughs and go push them into the community

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