Ford Cautiously Up, GM’s Awkward Moment, McDonald’s Launches To Launch New Concept

Paul Daly: 0:22Okay, so if you had any idea how hot we came into this meeting, you would be very I'd say we're gonna talk about Ford's cautiously up GMs awkward moment. McDonald's aliens is not grimace. Not grimace. Did anyone want to feel that like we're gonna get there? No, it's been a long week. It's been a it's been

‍Kyle Mountsier: 0:56

at Ford and okay it's been a really long week and we're rolling in Marlon slow so this week has been unbelievable.We're at. We were in Atlanta,Syracuse and buffalo all in one week. We did golf tournaments and webinars and podcasts and filmed shows and the whole night we are all across the country with dealers. It was great. It's great.

Paul Daly: 1:18

I think I think the summary I can't remember exactly what was it was like 10locations to morning shows webinar. However many dealerships we've been to we talked to a lot of people, a lot of stores, talked to a lot of people over the last two days.We got spent a lot of time on lots with dealers with managers,finance managers, technicians, parts department folks. Oil Change, Tech's like we had the whole game executives, of course, movie theaters, we had the whole stinking like gamut.Oh, we got a question coming in.

Kyle Mountsier: 1:47

From Robbie like upset. You know what I love? I love upstate New York in the summer.

Paul Daly: 1:54

It's great. You'd love it. Have you ever been here in the fall?

Kyle Mountsier: 1:58

Not in the fall.I would like in the fall I would

Paul Daly: 2:00

fall is the honestly,September October is Tyler's ask. Yeah, October is the best summer is awesome. Two summers awesome, too. Hey, look, we were filming more than cars episode three. Episode Two is in edit right now we get to see an opening cut. That's coming along soon. If you haven't seen episode one, you should go to more than cars.tv You can see it for free. And Episode Two and Three coming in hot. Speaking of other things coming in hot. A soda con is coming in real fast for like 60 days, less than 60days out at this point. And let's talk about some speakers because we just released them last week. We haven't talked about them. I'm going to read them if you're we have some on the screen right now. But we have a lot of public groups represented we have autumn Jaime butters the editor of automotive news, Mike Stanton, the president of na da this is just the speaker list lies abortions a list Melissa Carter ganja Brandis drummer who is an absolute epic boss, Ashley Cavazos, Mike Kavanaugh from Lithia Colton Ray, the Chief Marketing Officer of Walzer,Patrick, a bad who you know, and I think it's important that we talk about this isn't people can get confused and think of soda con is just about hype and fun.You couldn't be or wrong, this is going to be like real high level conversation, and also very, very practical education and learning.

Kyle Mountsier: 3:23

Yeah, I mean,like, last year, I came out of it with a ton of learning. And I think it's going to be even deeper this year, because we're just we're curating some incredible people, some people that we've never had in the asoto verse as far as like,speakers on stages, and so I'm excited to hear those. Those conversations. We gotta get into it. Paul, we gotta get into it.

Paul Daly: 3:45

All right, let's talk about some new So Ford reported a $1.9 billion net income for the second quarter of 2023.Making it nearly three fold increase from the same period in the previous year, increased their overall profit forecast,but also predicted a 1.5 billion and additional $1.5 billion loss of their EVs due to consumer concerns. This is a really interesting one. So like so you have Ford Pro and Ford blew the ice divisions, reporting both like I think it's like 11% or12% 15%, and a 9%, profit margin. EVs are not the case. So production targets on EVs have actually been delayed. You know,they were initially saying they produced 600,000 EVs this year,they're now pushing that to the end of next year, and they're saying, you know, what, we did want to make 2 million by 20 by the end of Oh, when was it?2026. But they said, Actually,we don't know we're gonna hit that target, saying the reason is basically, there's a shift in evey consumer perception. Jim Farley says there are plenty of consumers but there's an issue to the price they're willing to pay and CFO John Lawler said,while the shift to EVs is unquestionably underway, the last few weeks have shown us that the adoption by the early majority customers will be yours will be a lot slower than the industry expected.

Kyle Mountsier: 5:03

So even Yeah,that so the early majority is the second curve when you look at adoption curves, and that that early majority needs a price point at this point. And so these 4550 $60,000 price points are a lot harder to swallow, they're nowhere close to that five $600 A month payment. It's a lot of convincing that has to be done with leasing, over purchasing,and with the market compression and affordability at an all time like heightened awareness. This is going to be an interesting two quarters to see how EVs kind of make it and especially as discounts are looming across all these brands. We'll see how deep they're willing to go to create demand for adoption. could get a little awkward. Speaking of awkward time.

Paul Daly: 5:54

So we reported earlier this week on GMs, big earnings and it could get a little awkward as stronger financial results may complicate ongoing negotiations with the United Auto Workers Union.Despite q2 revenue of 44 point 7billion GMs discussions coming up with the union amidst their investments in electric vehicles could be big for challenging second half. So the current four year contract with the UAW expires in September, the last time they negotiated, it cost the company $3.6 billion. And so like ongoing inflation, union challenges, GM is investment in battery factories that pay lower wages could be a sensitive issue. So even amidst the profits, you know, GM needs to focus on keeping expenses low.To see how it goes. It is an awkward conversation. Hey,

Kyle Mountsier: 6:43

it's an awkward conversation. Yeah, we don't have any more money because they're trying like, it's this weird balance because they're obviously profitable on the ice business, but they're not profitable on the Evie business.And that's what they know is the future. And so they're balancing these current labor negotiations with future projections for expenses revenue. So I see the balance at a corporate standpoint. But man when you're going into a q3 negotiation, and you just came off a record high and celebrating great quarters,on Wall Street, Wall Street celebrating you and two great quarters of revenue, not a lot of legs to stand on right now.

Paul Daly: 7:18

No, and it just has a lot to do with trust. Like there has to be trust. And you know,that's the that's the whole balance. Like, can we have a balance of trust? Where, yes,there's some money in the hopper. But do you trust that our vision for the next horizon,like for all of our benefit,like we have to come to a, I guess, a compromise. That's what it's about. Speaking, I don't have

Kyle Mountsier: 7:38

vision for a new horizon.

Paul Daly: 7:44

This one's from

Kyle Mountsier: 7:46

McDonald's Corporation announced plans to launch a spin off restaurant brand. Listen to this, it's called cosmics. In 2024, they're going to base it on the retro alien mascot cosmic from the1980s and 1990. So they're doing it like the kids are doing it.They're just bringing all the old stuff forward. The move follows a recent viral success with the grimace theme meal, a tribute to another old company character, which resulted in billions of social media engagements. The CEO, Chris KHAMSIN, ski described cosmics as a small format concept that maintains the McDonald's DNA,but has its unique personality.So in my estimation, it's like we're still going to serve halfway decent burgers and it's just going to look cooler, you know what I'm saying?

Paul Daly: 8:31

So, so you consider McDonald's burgers halfway decent, I'm going to put that down for later. So next time we're halfway decent.

Kyle Mountsier: 8:43

I call on like halfway non decent, you know, I just like I really really want to get if I really really technical, I couldn't do that on this show.

Paul Daly: 8:54

It was a beautiful brand play beautiful brand play because the House of Representatives a subcommittee on UFOs actually had a hearing this week where you know, came out to the government possesses video footage of solid of unidentified flying objects. So really great brand timing and coordination. I love the reinvention of a brand to you know get build a little momentum and make it relevant we were talking about auto dealers launching quick service you know, quick service outlets that were you know, aside from an apart from the main campus or the main building as a way to reinvent the brand the little and dive deeper into the consumer mindset especially for Gen Z and newer drivers that love convenience and maybe want a little bit of like a little bit of brand sizzle that you just can't connect to like a franchise store. So I like this idea. I think it ties back to retail auto because you know, no matter how old your your organization is, or how many rules you have for your OEM and regulations you have to keep you always have an opportunity to spin off and do something fun and interesting. Well that is all we have for today we are heading over to clubhouse for the all things use cars room with David Long. We're going to talk about some practical stuff and how we can all just together. Have a great Friday.Have a great Saturday.

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