Fields tried to fire Hinrichs before being ousted from Ford

DETROIT — Days before his May 19 ouster as CEO of Ford Motor Co., Mark Fields was proposing to fire his top lieutenant, Joe Hinrichs, in an effort to relieve some of the pressure he was facing from a skeptical board of directors, Automotive News has learned.

Fields intended to get approval from the board for his decision to fire Hinrichs during the week of May 14, sources said.

Fields’ plan backfired, however, when the board decided instead to part ways with him and communications chief Ray Day, following a Friday, May 19, meeting. Instead of a pink slip, Hinrichs was given a promotion to the newly created position of president of global operations, in charge of Ford’s global product development; manufacturing and labor affairs, among other things.

Jim Hackett, the former head of furniture maker Steelcase and chairman of Ford Smart Mobility, was named Ford’s new CEO as part of a wide-ranging management shakeup.

FROM OUR ARCHIVES:Who’s who at Ford

Hinrichs was conspicuously missing in a round of retention bonuses the company paid out to top executives on Wednesday, May 17, according to Securities and Exchange Commission filings.

But Hinrichs was added to the list the following week, getting a $5 million stock bonus.

Fields faced increased scrutiny during meetings with Ford’s board of directors ahead of the company’s annual shareholders meeting on May 11. The board had grown impatient with Fields’ strategy for the future and irritated with the automaker’s sluggish stock price, which had fallen nearly 40 percent since he took over in July 2014.

Fields believed he could deflect pressure from himself and pacify the board by ousting Hinrichs, the sources said.

Fields did not immediately respond to requests for comment. Ford said in a statement, “Joe is a critical part of our leadership team for taking the company forward, as he knows Ford inside and out and has led many parts of our business. We do not comment on rumor or speculation.”

Hinrichs, 50, had been president of the Americas since December 2012. Since he took over, the company earned about $38 billion in North America, which represented 92 percent of its total pretax profits during that period.

He also oversaw the successful redesign of Ford’s best-selling vehicle, its profit-generating F-series pickup.

However, U.S. sales are down 5.1 percent through April, more than double the industry decline as the industry plateaus. The automaker has lost four-tenths of a percentage point of market share during that same stretch.

Part of that sales decline is due to a planned drop in fleet sales. Ford had front-loaded fleet sales at the beginning of last year, so this year’s comparisons are much lower.

In April, Ford reported first-quarter net income of $1.6 billion, down $900 million from a year earlier.

Musk mulls the end of his tortured dance with Trump

Elon Musk has vowed to leave President Donald Trump’s advisory councils if the president pulls the U.S. out of the Paris climate accord. To many of Musk’s fans, it’s about time.

“Don’t know which way Paris will go, but I’ve done all I can” to convince Trump to stick with U.S. commitments made under his predecessor, Barack Obama, Musk wrote Wednesday in a post on Twitter. Asked what he’d do if Trump decides to leave, the chief executive said he “will have no choice but to depart councils.”

America’s clean-energy icon — the founder of Tesla Motors and SpaceX — angered many of his supporters earlier this year when he started meeting with Trump and joined the president’s business and manufacturing advisory councils. Some customers even canceled their $1,000 reservations for Tesla’s upcoming Model 3 electric car and posted their refunds on Twitter.

Musk continued to advise Trump even as Uber CEO Travis Kalanick succumbed to similar pressure to step down. Musk insisted that it was his chance to ensure the president was hearing from people who take the threat climate change seriously.

Now, as Trump nears a final decision on the Paris climate agreement, and appears to be leaning toward exiting, Musk seems to have reached the end of his patience. The accord was decades in the making, involving more than 200 nations representing almost the entirety of humanity.

Don’t know which way Paris will go, but I’ve done all I can to advise directly to POTUS, through others in WH & via councils, that we remain

— Elon Musk (@elonmusk) May 31, 2017

The only nations that haven’t signed on are Nicaragua and Syria.

Other CEOs are mounting a last-minute push aimed at persuading the president. Tim Cook placed a call to the White House on Tuesday, according to a person familiar with the move. Twenty-five companies, including Intel and Microsoft, have signed on to a letter set to run as a full-page advertisement in the New York Times and The Wall Street Journal on Thursday. A television ad ran Wednesday showed CEOs of top U.S. companies backing the pact.

Before the November election, Musk tepidly criticized Trump, saying he was “probably not the right guy” for running the country. In December, he joined a council of 14 CEOs including Disney, Wal-Mart, and Uber.

Musk says he will resign from CEO council if Trump withdraws from Paris agreement

Elon Musk has vowed to leave President Donald Trump’s advisory councils if the president pulls the U.S. out of the Paris climate accord. To many of Musk’s fans, it’s about time.

“Don’t know which way Paris will go, but I’ve done all I can” to convince Trump to stick with U.S. commitments made under his predecessor, Barack Obama, Musk wrote Wednesday in a post on Twitter. Asked what he’d do if Trump decides to leave, the chief executive said he “will have no choice but to depart councils.”

America’s clean-energy icon — the founder of Tesla Motors and SpaceX — angered many of his supporters earlier this year when he started meeting with Trump and joined the president’s business and manufacturing advisory councils. Some customers even canceled their $1,000 reservations for Tesla’s upcoming Model 3 electric car and posted their refunds on Twitter.

Musk continued to advise Trump even as Uber CEO Travis Kalanick succumbed to similar pressure to step down. Musk insisted that it was his chance to ensure the president was hearing from people who take the threat climate change seriously.

Now, as Trump nears a final decision on the Paris climate agreement, and appears to be leaning toward exiting, Musk seems to have reached the end of his patience. The accord was decades in the making, involving more than 200 nations representing almost the entirety of humanity.

The only nations that haven’t signed on are Nicaragua and Syria.

Other CEOs are mounting a last-minute push aimed at persuading the president. Tim Cook placed a call to the White House on Tuesday, according to a person familiar with the move. Twenty-five companies, including Intel and Microsoft, have signed on to a letter set to run as a full-page advertisement in the New York Times and The Wall Street Journal on Thursday. A television ad ran Wednesday showed CEOs of top U.S. companies backing the pact.

Before the November election, Musk tepidly criticized Trump, saying he was “probably not the right guy” for running the country. In December, he joined a council of 14 CEOs including Disney, Wal-Mart, and Uber.

Don’t know which way Paris will go, but I’ve done all I can to advise directly to POTUS, through others in WH & via councils, that we remain

— Elon Musk (@elonmusk) May 31, 2017

G4S rejoins FTSE 100 as Debenhams drops out of FTSE 250

G4S personnel at Wimbledon 2015

In the latest reshuffle of the FTSE share market indexes, security company G4S is rejoining the FTSE 100.

But department store Debenhams has lost its spot in the broader FTSE 250, alongside online electrical retailer, AO World.

Debenhams is in the process of implementing an investment programme which involves closing some of its stores and warehouses temporarily.

The changes to the indexes will take effect on 19 June.

Property company, Segro will also join the FTSE 100, while Hikma Pharmaceuticals and Intu Properties will be demoted.

Joining the FTSE 250 are thread manufacturer Coats Group and turnaround specialists Melrose Industries.

On Wednesday Melrose announced a £144m bonus package to be shared between four of its top executives and further bonuses for a wider group of senior managers.

Also moving into the FTSE 250 are: IT services company FDM Group; hedge fund Pershing Square Holdings; fertiliser company Sirius Minerals; and the Georgian TBC Bank Group.

Leaving the FTSE 250 along with Debenhams and AO World are: the intellectual property group, Allied Minds; investment specialist, BH Macro; engineering business Keller; and private equity firm SVG Capital.

The make up of the FTSE 100 and 250 indexes is reviewed on a quarterly basis.

As the market value of companies change, they can drop in or out of the indexes which are adjusted four times a year.

Exxon shareholders back ‘historic vote on climate

Exxon

Shareholders in Exxon Mobil have backed a motion requiring the company to assess the risks from climate change.

The plan, proposed by investors including the Church of England, was supported by over 62% of those eligible to vote.

The vote comes as US media reports that President Trump is poised to pull out of the Paris climate agreement.

Exxon will now have to consider how global efforts to mitigate climate change will impact their business.

Long seen as the last bastion of opposition to action on rising temperatures, Exxon Mobil is the world’s largest publicly traded oil company.

They’ve recently been under investigation by some state authorities in the US.

They’ve been accused of allegedly concealing information from shareholders on when the company first realised that human emissions of carbon were driving up global temperatures.

Previous attempts by activists to force the company to take the impact of climate change into account failed. Last year, the motion gained just over 38% of shareholder support.

The resolution, filed by the Church Commissioners for England and New York State Comptroller Thomas P DiNapoli, asked Exxon to report on how its business model will be affected by global efforts to limit the average rise in temperatures to below 2C.


This year, the non-binding motion secured 62.3% of the votes, indicating that some of the bigger investor groups must have sided with climate activists.

“This is an historic vote – despite strong opposition from the board, the majority of Exxon’s shareholders have sent an unequivocal signal to the company that it must do much more to disclose the impact on its business of measures to combat climate change,” said Edward Mason, head of responsible investment for the Church Commissioners.

“We are grateful to all of the investors who supported the proposal, and we call on the company to begin urgent engagement with shareholders on how to bring its disclosures in line with those of its peers.”

While the motion is non-binding observers say there will be increased pressure on the company to report on the impacts of climate change and the restrictions on fossil fuels being considered as part of the Paris climate agreement.

Exxon Mobil was one of the last hold-outs among major oil companies on the issue of climate change. Earlier in May, Occidental Petroleum shareholders also passed a similar motion in a vote at its annual meeting.

Other major producers including BP and ConocoPhillips already publish reports on how rising temperatures would impact their businesses.

“This extraordinary result, on the heels of the majority Occidental vote, indicates growing institutional investor concern,” said Robert Schuwerk, a senior counsel at the Carbon Tracker Initiative.

“Climate change is now front and centre in investors’ engagement. As Exxon is a standard bearer for the oil and gas industry, smaller companies should take note and respond accordingly.”

Some shareholders were quick to point out the irony of Exxon finally taking this step on a day when US media reports indicated the President Trump was about to pull the country out of the Paris climate agreement.

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Android Pay expands to Canada

Android Pay launched in Canada on Wednesday, with support for a number of major banks at launch, and additional banks to be added soon. The Android Pay debut in Canada was teased at Google’s I/O developer conference keynote earlier this month, and reported as imminent last week by MobileSyrup.

The launch today includes support for Visa and MasterCard credit and debit, as well as Interac debit cards (starting June 5) from leading national banks BMO, CIBC and Scotiabank, as well as from smaller regional and specialist institutions like ATB Financial, PC Financial, Desjardins, Banque Nationale and ATB Financial. Android devices running version 4.4 of the OS or higher will be able to add cards from these banks and make mobile payments at compatible, tap-enabled terminals – which are actually very prevalent in Canada.

American Express and Tangerine support are “coming later this summer,” Google says. The noteworthy absentees from this list of supporting financial institutions are RBC and TD, which are the largest of Canada’s “Big Five” banks. Both RBC and TD do support Apple Pay, though, indicating a willingness to support mobile payment options. Spencer Spinnell, Google’s Director of Emerging Platforms, would only say at a launch event that it “expects banks will come on board over the next several quarters.”

Spinnell also noted at a launch event that the progress of Android Pay represents the result of a tremendous amount of work, since it means bringing together and satisfying a large number of stakeholders, from merchants, to financial institutions, to payment networks and to customers. Unlike Apple, Google doesn’t charge transaction fees to any parties involved for use of Android Pay (Apple charges banks).

OLYMPUS DIGITAL CAMERA

Android Pay uses NFC tech to transfer tokenized payment information from the device to a merchant terminal. Like Apple Pay, which launched in Canada last year, Android Pay doesn’t pass on your actual original payment card details to a merchant, but instead generates a unique token to use for transactions. To use it, once you register your card you simply wake your device, authenticate using one of your phone login methods, and tap it to a payment terminal. Also, once your cards are registered, if they’re lost or stolen, you can use Android Pay to remotely lock or wipe or disable your card.

Android Pay first launched in the U.S. in 2015, and has been rolling out to additional markets gradually since then, covering 12 in total. Other new markets coming online this year include Brazil, Russia, Spain and Taiwan, and Google will also be offering improved loyalty card integration on the merchant side. Android Pay also works in-app with a range of partners, including Uber, 1-800 Flowers and more.

Android Pay has had 1.5 million new registrations per moth on average in the U.S. alone, Spinnell said, which he argued is all the more impressive given the current state of the contactless payment system in America, which lags its equivalents in Canada, the UK and other countries. He said that one in three Canadians who own smartphones have used their device to pay for something, and noted that in Q4 2016, Canadian contactless payments rose 120 percent. Spinnell also noted that eight out of 10 Canadian retailers support NFC capability, making the market an ideal target for an expansion of Android Pay.

New-car loans lasting 73 to 84 months soar

LAS VEGAS — The share of new-vehicle loans lasting 73 to 84 months has risen sharply in the past eight years, according to Experian.

In the first quarter of 2009, 11.7 percent of new-vehicle loans were 73 to 84 months, Karl Kruppa, senior automotive solutions consultant for Experian, said at CU Direct’s Drive ’17 conference here last week. Through February 2017, 33.8 percent of loans were 73 to 84 months.

Even within that bucket, term lengths are creeping up. In the fourth quarter of 2010, three-quarters of new-vehicle loans in the 73- to 84-month category were between 73 and 75 months, Kruppa said. “Now we are seeing more and more lenders willing to go all the way up to 84 months,” he said. In the fourth quarter of 2010, 17.1 percent of new-vehicle loans were 84 months. In the fourth quarter of 2016, 28.7 percent of new-vehicle loans were 84 months.

Used affected, too

Longer terms are becoming more commonplace in used-vehicle financing, too. Most long-term loans still are on late-model used vehicles, Kruppa said. For example, about 30 percent of 2016 model-year vehicles are financed with 73- to 84-month loan terms. But lenders also are approving long-term loans on vehicles more than 5 years old. “You know what’s kind of startling?” Kruppa said. “There’s actually 10 percent of [2010 model-year] used vehicles being financed at a term between 73 and 84 months. Longer terms are here, and more and more lenders are willing to do that.”

Credit union support

Loans lasting 73 months or longer made up a significant chunk of the overall portfolio for banks, automakers’ captives, credit unions and independent finance companies in the fourth quarter of 2016. The segment’s share was largest, however, at credit unions, at 30.8 percent. Still, loan terms at credit unions are relatively evenly distributed. The share of terms running 61 to 72 months was 31.8 percent, and loans of 60 months or fewer made up 37.4 percent of the portfolio.

Lenders in the U.S. allow very few loans above 96 months, Kruppa said, but in the fourth quarter, credit unions supported more than half of the auto finance market’s loans in that segment.

Shootout at Texas dealership kills 3

A shooting last night at a Nissan dealership in the Dallas region left three people dead.

Officers arrived at Nissan of Greenville around 7:20 p.m. local time, responding to reports of multiple gunshots. At this time, the number of bullets discharged is unknown, though the front glass in the showroom was shattered and some vehicles sustained damage.

Dealership CEO Rick Ford told NBC DFW that two men arrived at the dealership Tuesday afternoon, claiming to be federal agents, to wait for a third man who showed up with a woman looking to purchase a car. Ford said when the two men tried to apprehend the third, a gunfight broke out. No one else was wounded.

“I’ve been told that the two gentlemen approached him with handcuffs, who were going to try to arrest him, and that’s when the shooting started,” Ford said.

“We are all very relieved that none of our employees or customers are hurt. We can replace the glass, we can replace the furniture,” Ford told a local ABC affiliate. “But the ultimate thing is no one was hurt.”

Ford is CEO of the RFJ Auto Partners dealership group, which owns 20 dealerships in the southern tier of the U.S. as well as some locations near Washington and Montana.

The dealership, which is about 50 miles northeast of Dallas, will remain closed during the investigation.

Katie Buda contributed to this report.

Related Downloads

BMW brings back the 8 series

Previous Weeks
Top Videos of the Year
Top Videos of All Time

BMW is bringing back the 8 series, and people are starting to take notice in the newest commercial to join our weekly viral video chart.

In the spot “Concept 8 Series,” the automaker shows off the 8 series coupe concept, which was unveiled last week.

The 8-series, which will go on sale next year in the U.S. and Europe, appears sleeker and sportier than the 6-series coupe it will replace.

Throughout the 1 minute, 31 second spot, BMW focuses on the concept’s performance, technology and luxury chops as it speeds around a track. At one point the song in the video goes “So here you are again.”

The new version has more muscular surfaces, but its basic proportions resemble the 850i that launched in 1989.

BMW’s video comes in at No. 4 with 1,834,291 views, according to the rankings compiled by Visible Measures.

Hyundai’s “Shackleton’s Return” stayed in the No.1 spot this week with 26,989,851 views.

Kia also had a new spot join the chart this week at the tenth position.

1

87%
Shackleton’s Return
Hyundai

NA

This week

(True Reach): 26,989,851


Last week: 1

2

6%
New Renault Megane
Renault

NA

This week

(True Reach): 2,429,606


Last week: 2

3

18%
Beauty
Mazda

NA

This week

(True Reach): 1,994,872


Last week: 4

4

NEW
Concept 8 Series
BMW

NA

This week

(True Reach): 1,834,291


Last week: NEW

5

3%
Discovering Bermuda
Land Rover

NA

This week

(True Reach): 1,791,773


Last week: 3

6

11%
Head to Head
Ford

NA

This week

(True Reach): 1,648,290


Last week: 8

7

RETURNEE
Meet the Accomplice
Nissan

NA

This week

(True Reach): 1,539,213


Last week: RETURNEE

8

5%
2017 Mazda3
Mazda

NA

This week

(True Reach): 1,219,224


Last week: 9

9

-27%
Where Too Much Is Just Right
BMW

NA

This week

(True Reach): 1,081,482


Last week: 7

10

NEW
All New Picanto
Kia

NA

This week

(True Reach): 875,713


Last week: NEW

Source: Visible Measures

Automotive News’ Video Traction Chart, powered by Visible Measures, focuses on brand-driven social video ad campaigns. Each campaign is measured by True Reach, an MRC accredited metric that includes views from brand-driven and audience-driven social video clips. The data are compiled using the patented Visible Measures platform, a constantly growing repository of analytic data on hundreds of millions of videos tracked across hundreds of online video destinations.

Note: This analysis does not include Visible Measures’ paid-placement (e.g., overlays; pre-, mid-, and post-roll) performance data or video views on private sites. This chart does not include movie trailers, video game campaigns, TV show, or media network promotions. View counts are incremental by week.

**Indicates percent change in views compared with the same period the week before.

A new warning as fewer subprime auto borrowers pay off early

Fewer subprime borrowers are paying off their auto loans early, a possible sign that consumers with weaker credit scores are struggling more, according to a report by Wells Fargo & Co. researchers.

Borrowers are making fewer extra payments on loans that were bundled into bonds in 2015 and 2016, compared with loans in 2013 and 2014 bonds, according to Wells Fargo analysts led by John McElravey. The data on prepayments may offer another sign that subprime consumers are having more trouble paying their bills, the analysts wrote in a note dated Tuesday. Borrowers are already defaulting on a growing amount of auto debt.

Last decade, slower monthly payment rates on credit cards were an early sign of the consumer credit cycle changing for the worse, the analysts wrote. For auto loans, slower prepayment may be more of a coincident indicator than a leading one, they wrote.

Growth in auto debt since the financial crisis has set off alarm bells on Wall Street and among regulators who are concerned that borrowers may be overburdened and used car prices are falling. Government enforcement officials have expressed concern that lenders may be making loans that borrowers can’t repay, and packaging them into bonds that investors are willing to buy.

Total issuance of subprime auto loan-backed securities rose to $7.1 billion in the first quarter from $5.9 billion in the same quarter last year, according to data compiled by Bloomberg. The growth came even as losses from the debt have risen beyond levels last seen in the aftermath of the 2008 financial crisis.

The researchers at Wells Fargo, the number one seller of bonds backed by subprime auto loans, have said that the bonds pose few risks to bondholders, even though they recommend investors cut their risk exposure because of valuations.

Slowing prepayments can hurt investors in bonds backed by car loans, said Peter Kaplan, a senior portfolio manager at Merganser Capital Management. They can result in a deal’s bonds getting paid down more slowly, which can hurt the riskiest securities in a transaction. “I think downgrades are completely possible,” with a remote possibility that the riskiest securities will take losses, he said.

Lenders and big bond graders, such as S&P Global Ratings, have pointed to the debts’ fast amortization and possible upgrades as reasons for investors to have faith in the securities.