The quest for automotive super glue

TRAVERSE CITY, Mich. — Ask an automotive engineer what the ideal material for the next vehicle would be — steel, aluminum or carbon fiber composite — and the likely answer would be “all of the above.”

Although material suppliers compete aggressively for program real estate, even the most ardent sales rep would admit the future lies in multimaterial vehicles.

But a serious long-standing technical problem has held back mixed materials: the difficulty of joining different materials on an assembly line.

Now researchers at Michigan State University, supported by the American Chemistry Council’s automotive group, believe they have hit on a new kind of adhesive that will enable manufacturers to join multiple materials, says Sandra McClelland, a member of the council and sales development manager for Solvay Specialty Polymers. The group is promoting a new compound — a kind of super glue that adapts to different surface properties and works at different material temperatures.

Just as important, McClelland says, the group believes the adhesive will allow mixed auto materials to be cleanly separated at the end of vehicle life — another growing concern as manufacturers move deeper into recycling campaigns.

The group intends to keep patenting fees low in hopes of encouraging mixed-material vehicle design.

“The vehicles of today and tomorrow will be manufactured with a combination of energy-saving materials,” ​ McClelland said this month during the Center for Automotive Research’s Management Briefing Seminars here. “Multimaterial solutions are and will provide OEMs and consumers with the best possible choices for performance, safety, aesthetics and value. All materials are in play.”

The industry wants to avoid being locked into all-or-nothing uses of materials for vehicles and components. The hope is to be able to join high-strength steel to aluminum alloys, aluminum to composite or composite to steel without adding weight or using adhesives that make it hard to separate the parts at the end of vehicle life.

Consulting group Ducker Worldwide has released a study of industry vehicle weight targets showing that passenger vehicles must drop more than 200 pounds by 2025, said Abey Abraham, Ducker Worldwide North America managing director. That means that a typical car or passenger truck will add, on average, 33 pounds of polymer materials in place of existing metals.

That weight-cutting demand will only increase the need for easier ways to join a variety of materials.

“It has to be a mixed-material approach to get to these standards,” Abraham said.

The adhesive that has researchers enthusiastic is an enhanced thermoplastic with extremely tiny magnetic particles that would bond different kinds of plastic, different types of metals or metals and plastic without the need for more rivets or connectors.

Because the bond can be reversed, it would allow for easier recycling at the end of the product’s life.

The research is in the laboratory testing phase, McClelland said. But signs are strong for its potential in real-world situations.

The joining method also would allow a component to be repaired in a way that will make that joint stronger, she said.

Infiniti Prototype 9 invokes history, fantasy

PEBBLE BEACH, Calif. — Imagine the unbelievable luck of walking into an old barn in rural Japan and finding there, rusted and abandoned, a long-forgotten 1940s-era Infiniti roadster.

That is the visual impact of the Prototype 9 roadster concept that Infiniti showed audiences last week at Pebble Beach.

The handcrafted silvery retro racer concept, with spoked open wheels and a grille of sculpted blades, is a salute to the tens of thousands of high-end car collectors and luxury-class shoppers who strolled over Monterey Peninsula’s golf courses of restored Maseratis and Mercedes touring cars, Bugattis and Paganis with seven-figure price tags, and 2018 Cadillacs and Jaguars. At the same time, the Prototype 9 is a declaration of what Infiniti is willing and able to do to win the attention of those elite car buyers.

“We wanted to show the DNA that became Infiniti,” says Alfonso Albaisa, who oversaw the Prototype 9 as head of global design for Nissan Motor Co. and former design boss of its Infiniti line.

“It’s clearly inspired by a racing car from decades ago, with that airplane-influenced look of an oversized hood, a tapering tail and a driver’s cockpit set back toward the rear. The design of that day was really all about engine and tires.”

In the classic fantasy scenario of Pebble Beach attendees, such an antique Infiniti “barn find” would be pulled into the sunlight to be inspected. It would be trailered home to a garage, where the collector would spend months tracking down classic replacement parts and restoring it to the sort of bold look that would have shocked Japanese audiences 70 or 80 years ago.

But here’s where the fantasy ends, Albaisa says: There was no Infiniti in 1940. The brand was created in 1989. Infiniti was launched as a modern Japanese challenger to what was — at least for a time in the 1980s — a tier of waning European luxury makers that seemed stuck in their decades-old legacies.

Imagined legacy

Infiniti has no such legacy, and so it has created one.

“We tried to build a car as if we were there,” Albaisa explains. “It is to show people that what Infiniti is today has roots in the spirit of that era, when cars were still very new and exciting to people.”

He admits it was a pretty zany idea for a project. But as the Prototype 9 took shape, it became a bigger mission inside Nissan and Infiniti. It gave the more passionate car lovers there a channel to problem-solve and try new ideas.

Albaisa was still head of Infiniti design last year when he received a text message from Allyson Witherspoon, who was at that time director of marketing for Infiniti North America. She is now manager of global brand engagement for Nissan in Japan. Witherspoon challenged the designer to draw such a “what if?”

What if Infiniti had existed in the era of the Mercedes W154 or of Grand Prix-winning Bugattis? What would it have looked like then? And what components of that old look would have evolved into the look of Infiniti 2018?

Albaisa remembers chuckling at the text message.

Thought provoking as it was, he was too busy to think about it. He was about to become the first non-Japanese head of design in Nissan’s history, succeeding Shiro Nakamura, Nissan’s influential, long-serving global design chief. He also just had taken on a series of nondesign corporate duties.

“I was kind of busy,” Albaisa recalls. “But I kept thinking about it.”

‘Build it?’

Albaisa enlisted a young Japanese designer to give the idea a stab. He then involved a designer out of Infiniti’s styling studio in San Diego.

“The early drawings looked pretty much like a racer,” he says. Other designers began to get involved. Soon, a manufacturing group at Nissan’s old Oppama plant in Japan found out about the drawings and contacted him.

“They said, ‘We want to build it,'” Albaisa recalls. “I said, ‘Build it? There’s nothing to build. It’s a computer drawing.'”

He assumed the workers were envisioning a traditional inexpensive foam model typically used to make concept cars, and Albaisa reminded them that they had no expertise in producing foam concept models.

But they clarified their desire: They wanted to build it out of metal.

Albaisa was astonished to learn that a manufacturing team intended to receive training in the old art of “hammer forming” vehicle bodies.

The work involves a group of craftsmen using hammers to delicately shape precision body pieces, meeting strict tolerances just as on any other automobile.

The employees had taken the training on their own time and now proposed doing the work after hours.

The factory also had just acquired a dieless forming machine that had not been used. A seldom-used alternative metalworking technology, dieless forming works with programmed computer designs to create small batches of parts without the need for expensive dies.

Given the go-ahead, the factory team had within weeks an actual open-wheel metal prototype to show the designer.

Making it a runner

At that point, Albaisa was startled to be contacted by Nissan’s advanced powertrain department.

“These are the guys who made the powertrain for the Leaf and were busy working on the next Leaf,” Albaisa says. “They said, ‘We’re in, too.’

“I said, ‘What do you mean, you’re in?’

“They said, ‘We’re going to make the car run.'”

Advanced powertrain created a twin-battery electric powertrain for the concept vehicle. That part was no real feat for the group. Their challenge, Albaisa says, was packaging the modern electric powertrain into the racer’s elongated retro design.

The battery pack had to be fitted to the layout, with modern steering, brakes and electronic powertrain controls routed around the car to fit the design.

“At that point, there was nothing I could do to hold the project to the ground,” Albaisa says. “I realized I’d better tell Mr. Klein that this thing had taken on a life of its own.”

Philippe Klein is Nissan Motor Co.’s head of global product planning, with responsibility for product strategy and business plans around the world — and there was no Infiniti Prototype 9 in the company’s business plans.

Albaisa emailed the executive and alerted him that “a lot of dominoes are about to fall and it could be loud.” He explained the project that had sprung to life on its own.

Klein emailed back almost immediately, a reply so fast that Albaisa was certain he was about to be fired.

Instead, Klein was fascinated and wanted to hear the details. He interrupted his schedule to travel to the Oppama plant to see the rogue concept for himself.

“He really supported it,” Albaisa says. “Like me, he loved the idea of a design concept that celebrated the company’s spirit of undertaking a project like this.”

Supported by whom Albaisa calls “protectors” in the company, the concept vehicle remained an underground project until it was ready for display this month.

Infiniti now wants the public to see it as an expression of what the brand is about — not actual racing heritage from the last century but modern-day passion to take an idea and turn it into a car.

Pension cold-calling ban to include texts and emails

senior couple on the phone

A forthcoming ban on cold-callers who try to scam people out of their pension savings will include emails and texts, the government has announced.

Nearly 3,000 savers have been conned out of an average of £15,000 each since 2014, after fraudsters persuaded them to cash in their pensions.

Certain types of cold calls, including those involving mortgages, are already banned.

Now the law will be changed to include callers trying to sell pensions.

Companies that do not have prior permission to contact consumers, or do not have an existing client relationship with them, will face fines of up to £500,000.

But whereas the government originally proposed excluding texts and emails, it has now decided to include them within the new law.

“The fact emails and text messages will also be covered by the ban means savers can be absolutely certain that if someone they don’t know contacts them out of the blue about their pension, they simply should not engage with them,” said Tom Selby, an analyst with AJ Bell.

“That means don’t email, don’t text back and hang up the phone.”

A spokesman for the Department of Work and Pensions (DWP) said the legislation would be tabled “when parliamentary time allows”, raising the possibility that it could be many months before the rules come in.

The consumer organisation Which? said that the regulator, the Information Commissioner’s Office (ICO), would need to be strict about enforcement.

“Pension scams are costing retirees millions, so this action must lead to a crackdown on criminals stealing people’s hard-earned savings,” said Gareth Shaw, Which? money expert.

Some fraudsters have taken advantage of the new pension freedoms, which were introduced in April 2015.

Since then, anyone over the age of 55 has been allowed to withdraw money from their pension, with the ability to spend it, or invest it elsewhere.

investigated by the BBC, thousands of people were persuaded to buy so-called storage pods with their pension savings.

However, most never received the returns they were promised.

The government will also tighten the rules to make it harder for consumers to transfer money to unregulated pension schemes, such as those investing in forest schemes or parking spaces.

Under proposals to be added to the Finance Bill later this year, trustees will have to ensure that any receiving scheme is regulated by the Financial Conduct Authority, is an authorised master trust, or has an active employment link with the individual.

The new measures have been welcomed by the Pensions Regulator, and by the former pensions minister, Ros Altmann.

“The sooner the government acts, the sooner we can improve protection for people’s pensions.

“We will never stop such fraudsters completely, but these measures will certainly protect the public better – about time too,” she said.

However, experts warned that fraudsters would try to find new ways of working.

“It’s important to note that this will not stop cold-calling or pension scams,” said Tom Selby.

“Fraudsters will seek to exploit any loopholes in the rules, and many of the outfits involved will simply move their call centres abroad to avoid the ban.”

Hard Brexit ‘offers £135bn annual boost’ to economy

Professor Patrick Minford

Removing all trade tariffs and barriers would help generate an annual £135bn uplift to the economy, according to a group of pro-Brexit economists.

A hard Brexit is “economically much superior to soft” argues Prof Patrick Minford, lead author of a report from Economists for Free Trade.

He says eliminating tariffs, either within free trade deals or unilaterally, would deliver huge gains.

Campaigners against a hard Brexit said the plan amounts to “economic suicide”.

In an introduction to the full report, entitled From Project Fear to Project Prosperity, which is due to be published in the autumn, Prof Minford argues that the UK could unilaterally eliminate trade barriers for both the EU and the rest of the world and reap trade gains worth £80bn a year.

The report foresees a further £40bn a year boost from deregulating the economy, as well as other benefits resulting from Brexit-related policies.

Prof Minford says that when it comes to trade the “ideal solution” would still be free trade deals with major economic blocks including the EU.

But the threat that the UK could abolish all trade barriers unilaterally would act as “the club in the closet”.

The EU would then be under pressure to offer Britain a free trade deal, because otherwise its producers would be competing in a UK market “flooded with less expensive goods from elsewhere”, his introduction says.

He argues UK businesses and consumers would benefit from lower priced imported goods and the effects of increased competition, which would force firms to raise their productivity.

However, Open Britain, arguing for the UK to remain within the single market and the customs union, said the proposed strategy would be damaging to the UK economy.

“Unilaterally scrapping our tariffs without achieving similar reductions in the tariff rates of other countries would see Britain swamped with imports, leaving our manufacturers and farmers unable to compete,” said Labour MP Alison McGovern, a supporter of the cross-party group Open Britain, which is campaigning against a hard Brexit.

“The levels of bankruptcy and unemployment, especially in industry and agriculture, would sky-rocket.

“This is a project of economic suicide, not prosperity. No responsible government would touch this report with a barge pole as a source of ideas for our future trade policy.”

Economists for Free Trade is a group of 16 economists, including former government advisors and academics.

The group plans to release further chapters of the report in the run up to its full publication.

It is a counterintuitive idea, but actually the economics textbooks do provide some support for the idea of unilateral trade liberalisation.

This analysis suggests that removing trade barriers produces benefits for consumers and businesses buying components or raw materials that exceed the losses suffered in industries that face stiffer competition.

The downside is that it may take time, perhaps years, for the workers who lose their jobs to find new ones.

Professor Minford has expressed the view that the British economy is flexible enough to cope.

There is also the question of how the new jobs would compare with the old ones.

The mainstream view among economists is that while countries overall may gain from trade liberalisation, there are usually some specific groups that lose.

Prof Minford also directs criticism at Chancellor Philip Hammond’s current approach to Brexit, which he says amounts to “throwing away our hard-won freedom from EU rules”.

The chancellor is viewed as favouring a softer approach to Brexit, but recently in the Telegraph in which he proposed that the UK would leave both the single market and the customs union in March 2019, but that there would be a “time-limited” transition period to help businesses adjust.

A government spokesman said the UK would maintain a “deep and special” relationship with the bloc after departing the EU.

“The economy has grown continuously for four years and there are more people in work than ever before.

“As we leave the European Union, we will build on this success by maintaining a deep and special partnership with the EU while embracing the wider world as an independent, open, trading nation.'”

During the referendum campaign last year Prof Minford stoked controversy that the effect of leaving the EU would be to “eliminate manufacturing, leaving mainly industries such as design, marketing and hi-tech”.

However in a recent article in the Financial Times he suggested manufacturing would become more profitable post-Brexit.

VW to revive ’60s Microbus with new, all-electric van

PHOTO GALLERY: Volkswagen I.D. BUZZ concept


PEBBLE BEACH, Calif. — Volkswagen has confirmed plans to build a production version of its all-electric ID Buzz van in 2022 for consumer and commercial applications.

The van — or microbus in VW parlance — will have Level 3 autonomous capabilities in the commercial version. The Buzz will be one of three electric vehicles VW is planning for its MEB architecture. The family of EVs includes the ID Crozz SUV and the ID hatchback.

The automaker confirmed its plans last week in Pebble Beach, channeling the California lifestyle that helped turn Volkswagen’s Bus from the 1960s into an icon.

“The Microbus, which is what the Bulli is called in America, has always been part of the California lifestyle,” Herbert Diess, Volkswagen CEO, said in a statement ahead of the debut. “Now we’re bringing it back by reinventing the Bulli as an electric vehicle.”

The production Buzz will be 194.5 inches long — 8.5 inches shorter than a Honda Odyssey minivan and 4 inches shorter than a Ford Explorer. It will be built at the Hanover, Germany, plant where all six earlier generations of VW’s van were built. It will be exported throughout Europe, the U.S. and China.

Because of the compact powertrain and flexible platform architecture, VW is promising the Buzz will have variable seating configurations. While only the commercial iteration was announced with Level 3 autonomy, VW has previously said all ID models would be fully autonomous by 2025.

Volkswagen didn’t disclose the Buzz’s range though the concept version had about 270 miles of range on the EPA test cycle for its two-motor, 369-hp system. The range of the production version is expected to be higher than that by the time the Buzz hits the road next decade.

China eclipses U.S. in Honda’s world view

WUHAN, China — American customers and U.S. dealers long have been the tail that wags the dog at Honda Motor Co., despite Honda’s roots as a Japanese company.

When Honda rushed out a major midcycle update of its previous-generation Civic, the brand’s most iconic global nameplate, it was the negative feedback from American drivers, not those in Japan or Europe, that ultimately sway-ed the top brass into making improvements.

But America’s pre-eminence in Honda’s empire is fading.

China, the world’s largest auto market, is on pace to replace the U.S. as Honda’s biggest and possibly most profitable sales center. The sea change has far-reaching implications for Honda’s U.S. and global lineups and the company’s worldwide outlay of r&d and production resources.

Honda is hardly alone in embracing a shift that’s influencing carmakers from Wolfsburg to Detroit as companies increasingly kowtow to the almighty Chinese buyer.

The rapid expansion of Honda’s footprint in China shows a reordering of priorities for a global manufacturer that long has prided itself on its tight bonds with America but now sees bigger growth opportunities elsewhere.

China’s rise has complex ramifications. Chinese tastes and trends increasingly will flavor models sold worldwide. More vehicles will be developed for China first before being sold in the United States and other markets.

For Honda’s Acura luxury line, meanwhile, the rise of China could be a saving grace, supporting the global build-out of a second-tier brand that largely has been confined to American shores.

China also could emerge as an export hub. Honda has a China factory dedicated to shipping its City compact sedan to Mexico. But exporting to the U.S. increasingly enters the realm of possibilities, as underscored by Ford Motor Co.’s plan to import a China-made Focus to the U.S. and moves by General Motors and Volvo to send models built in China stateside.

No one says Honda is lessening its commitment to the U.S., which is the world’s No. 2 auto market. But China’s rise is giving that country a bigger voice in corralling limited resources from Honda’s headquarters in everything from r&d and product planning to factory investment and retailing build-out.

“China has a high priority, and I think we will likely put more emphasis on listening to Chinese customer voices going forward,” said Kotaru Shimizu, general manager for sales at Dongfeng Honda Automobile Co., one of Honda’s two joint ventures in China.

New cash cow?

In Honda’s world, China is nipping at America’s heels by almost every measure, including production, sales, dealership count and employee tally.

Most importantly, China is challenging North America’s traditional position as Honda’s cash cow. North America and Asia each notched comparable operating profits in the fiscal year that ended March 31. But Asia’s regional operating profit margin was 9.6 percent, almost double North America’s 4.9 percent.

In the U.S., Honda can churn out 1.27 million vehicles a year. That outstrips its China capacity of 1.16 million vehicles by 110,000 vehicles. Yet China has expanded much faster.

Honda has been building vehicles in the U.S. since 1982 and today has five plants there. Honda started assembling vehicles in China a full decade later and already has six. Moreover, it has broken ground here on a seventh plant to open in 2019 with initial capacity for 12,000 more vehicles annually.

The U.S. still beats China in raw sales volume. Last year, American Honda sold 1.64 million vehicles in the U.S., compared with Honda’s 1.26 million sales in China. But growth in China has been astronomical.

In 2016, Honda’s sales surged 24 percent in China. U.S. sales, by contrast, grew just 3.2 percent.

Honda forecasts China sales to jump to 1.34 million vehicles this year. But in the U.S., the carmaker is merely hoping to eke out the slightest gain. Its U.S. sales slid 0.2 percent through July in an overall market that’s down 2.9 percent and widely believed to be past its peak.

In China, Honda supports 972 dealers, just shy of the 1,048 in the U.S. But it employs some 22,400 people in China vs. 16,100 in the United States.

“The rise of China does throw the conventional wisdom of global resource allocation to the wind,” said James Chao, managing director for the Asia Pacific region at IHS Markit, “especially for global automakers who are only now experiencing the success of the China market and who have traditionally centered their strategic product decisions out of the U.S.”

Courting China

Honda’s newfound fixation with China starts at the top, with CEO Takahiro Hachigo and his top lieutenant, Executive Vice President Seiji Kuraishi.

Both did the obligatory stints in the United States, notching more than a decade there combined. But Hachigo and Kuraishi cut their teeth in China during its heady, go-go days just a few years back.

Hachigo was vice president of overall operations, leading purchasing, production and r&d. Kuraishi racked up several years​ with different stints and eventually was tapped as boss of all of Honda’s business in China from 2013 to 2016.

The duo’s exploits in China have assumed near-legendary proportions at Honda, from their marathon drinking sessions to their fondness for classical Chinese literature.

Such bonds count in Japan and China — nations that share deep cultural ties and a custom of personalized business relationships. When asked, Hachigo waxes nostalgic about his China days.

“It wasn’t much of a surprise, but I surely did drink a lot,” Hachigo recalled of the evening rituals with Chinese business partners. “I had drinks with them over and over again. Then I started getting along with them. … They got drunk and hugged me.”

Hachigo insists the U.S. still sits atop Honda’s hierarchy. For starters, it is one of the few mature markets worldwide where an increasing population helps ensure rising demand.

“How long do I think it will take for China to overtake the U.S. market? It won’t be so easy,” Hachigo told reporters after a June tour of Honda’s factories, r&d center, design studio and retail network in China. “It remains an important market to us. … Just because China grows more doesn’t necessarily mean that North American models will decline.”

Civic showdown

Clearly, though, China has begun to throw its weight around.

It shows in Honda’s development of China-only vehicles, such as the Acura CDX and Honda Avancier, two popular crossovers designed for and sold only in China. Engineering such vehicles saps resources that could have been channeled into building a better Accord or Pilot.

It matters because Chinese and Americans want different things in cars.

“American customers value practicality,” said Dongfeng Honda’s Shimizu, who spent several years working in the U.S. “They drive to work every day. So cars are an essential tool for American people.”

Chinese consumers, on the other hand, still see cars as an important status symbol. They’re drawn to vehicles such as the Avancier, with fake hood vents and wild fender creasing, whose designs might be considered overwrought and gaudy by American standards.

“Chinese customers are firstly trend-conscious,” Shimizu said. “Automobiles are still seen as an asset, not as a tool. They’d like to show off something.”

Hachigo likened Honda’s strategy to serving up ramen noodles that have the same basic ingredients but using recipes tweaked to local tastes.

“We tell them to use this kind of noodle and let them decide the flavor,” he said.

Yet as different as Chinese tastes are, Chinese appetites are getting a bigger voice in determining the flavor of global cars such as the Accord or Civic. In fact, Chinese and American viewpoints butted heads when Honda developed the current-generation Civic.

Market research showed that Chinese buyers wanted a traditional three-box, sedan-shaped Civic, Shimizu said. Americans, however, wanted a fastback, coupe-styled silhouette.

Product planners argued back and forth about which way to turn.

In the end, American tastes prevailed, as seen in the sleek profile that debuted in 2015. But as China’s sales grow, its market will have the volume to make ever-stronger demands.

Bigger Chinese voice

Chinese are laser-focused on global trends and often demand better features and quality than Americans, says Atsushi Fujimoto, president of Dongfeng Honda.

“They assume that foreign carmakers sell lower-quality models in China than those sold in North America,” Fujimoto says. “On the contrary, we tell them that we spend more money on making cars for China than those North American models.”

Chinese, for example, demand better soundproofing and smartphone connectivity, he says.

But looking ahead, Chinese trends likely will have bigger knock-on effects.

China’s swing to compact crossovers and its deep dive into electrified vehicles are two shifts affecting product-planning dynamics worldwide, including those in the U.S.

Consider the Acura CDX subcompact crossover or the Honda UR-V and Avancier, crossover siblings designed as successors to the Honda Crosstour.

Honda says it has no plans to bring these nameplates to the U.S., despite their popularity in China. But the entries overlap with hot spots in U.S. demand. And it is conceivable these offerings could make their way to America as imports.

Fujimoto points to the origins of the CR-V crossover as a potential model.

The CR-V was developed as a Japan-only vehicle first but soon gained a foothold in the United States. Today, it is mainly a U.S. and China vehicle that’s not even sold in the home market anymore.

“We may be making a China-only model, but if this sells well in other regions, we should do so,” Fujimoto said. “Our cars will spread globally instead of saying U.S.-only or China-only models.”

China could even become a global center for compact crossover development, analysts say.

“Smaller SUVs, and perhaps even sedans, could be led by designers in China,” IHS’s Chao said. “If Honda feels that the small SUV segment has a lot more growth potential in China — it does, I think — then they will allocate more resources towards this effort.”

China also is leading the charge toward electrification.

In fact, Honda is developing an electric vehicle for China that it will start selling next year.Executives say an aggressive Chinese EV mandate could influence global lineup decisions, pushing Honda to leverage the technology and spread costs through scale.

In June, Hachigo said his company would launch more EVs in other markets. It will unveil one car at an auto show this fall that possibly targets North America.

But again, the impetus came from China.

“I think electrification will likely get moving faster here than in the U.S.,” said Mitsuru Horikoshi, head of Honda’s China r&d center in Guangzhou, which oversees product development and design for both of Honda’s local joint ventures. “We are working on it now.”

Horikoshi’s unit spearheaded development of the China-market EV due next year. That car will be made at an existing plant in China. But in a sign of Honda’s expectation for surging EV demand, a new plant slated to open in 2019 will be capable of handling EVs from the start.

While Honda’s r&d footprint in China is huge, it still trails its U.S. counterpart in terms of capability. The U.S. can handle some powertrain development, for instance, that China can’t.

Honda’s U.S. r&d center dates to 1975, while China’s is just 4 years old. And despite the U.S. head start, Horikoshi’s expansion plans speak volumes about Honda’s ambitions here.

“The U.S. r&d center already has a long history. They are several times bigger than us,” he said, before casually adding: “It will take [us] five to six years to catch up.”

Naoto Okamura contributed to this report.

Can U.S. follow through on tough NAFTA talk?

WASHINGTON — The U.S.’s aggressive opening statement heading into the first round of the North American Free Trade Agreement talks raised eyebrows for its directness, but the content came as no surprise to auto industry officials seeking to block massive rules changes that could force a restructuring of their business strategies.

U.S. Trade Representative Robert Lighthizer, channeling the same rhetoric Donald Trump rode from the campaign trail to the White House, characterized NAFTA as a failure for the U.S. manufacturing sector, pointing to trade deficits and more than 700,000 lost jobs from outsourcing as conditions that need to be reversed through an extensive overhaul. He drew attention to the $68 billion auto deficit with Mexico and reiterated the administration’s goal to tighten rules of origin that determine whether goods can cross the border duty-free as a way to spur U.S. manufacturing.

“It was a pretty hard-line opening statement, which heightens concern about how this is going to work out, but it’s also only the opening statement,” said an official for an international automaker who did not want to be named because of the sensitivity of the talks.

To follow through on the rhetoric and deliver the promised jobs to the U.S. manufacturing belt, the Trump administration will need the cooperation of the U.S. business community and key members of Congress, both of which sought to distance themselves from the embattled president last week.

Indeed, at the same time Lighthizer was pressing his case on behalf of U.S. manufacturing, Trump was forced to disband various advisory councils made up of top business leaders, many of whom recoiled at or openly denounced his tepid response to a white-supremacist rally and ensuing violence in Charlottesville, Va.

General Motors CEO Mary Barra was on one of those councils, the White House’s Strategic and Policy Forum, which GM had called “a seat at an important table” as the Trump administration dealt with issues such as tax reform and job growth. But Barra and fellow CEOs grew restive last week amid the Charlottesville furor, leading to the disintegration of the group.

“General Motors is about unity and inclusion and so am I,” Barra said in a statement. “Recent events, particularly those in Charlottesville, Va., and its aftermath, require that we come ​ together as a country and reinforce values and ideas that unite us — tolerance, inclusion and diversity — and speak against those who divide us.”

Mexico’s economy minister, Ildefonso Guajardo, said the breakdown of the councils could be a wild card as the talks progress, given the business community’s support for free trade. “What I would hope is that this does not indicate that these business groups are not going to be present, sending messages to their White House” during the talks, said Guajuardo, who is Mexico’s chief negotiator.

In Congress, too, where views on NAFTA don’t fall along traditional party lines, the president was taking bipartisan fire over his comments on the Charlottesville protests, with one Republican senator questioning his competence and stability.

NAFTA is too important for the business community to fully disengage from the negotiations, analysts say, and business leaders see sufficient separation from the White House, since talks are being conducted by the U.S. trade representative in partnership with the Department of Commerce.

But the president’s personal credibility could be a factor when it comes time to get a final deal ratified by Congress, said Eric Miller, president of Rideau Potomac Strategy Group, a policy advisory firm, and a former official at the Canadian Council of Chief Executives.

“What is the standing of this president when it comes time to advocate and make calls to round up votes for the new NAFTA,” he said, especially if health care and tax reform have stalled, race relations are stirred up and there is an international crisis.

Many lawmakers in both parties are already wary about restricting trade or have strong business constituencies in their districts. If Trump hasn’t built trust with the business community, it may be difficult to get its support for NAFTA changes, analysts say.

“Ratification [is] going to be a nail-biter,” said Miller, “and what we’ve seen is that it’s very important for the White House and the business community to work together to get the bill enacted.”

Lighthizer’s sharp tone Wednesday appeared to have had a carry-over effect. According to another highly placed industry source familiar with the talks, private meetings between the parties have been tense.

As expected, rules of origin for automobile components were high on the agenda. Lighthizer’s call for “substantial” U.S. content requirements beyond the stricter rules of origin for duty-free treatment drew quick pushback from Canadian Foreign Minister Chrystia Freeland.

“Canada is not in favor of specific national content in rules of origin,” she said at a press briefing.

National content requirements would amount to a production allocation agreement, said Miller. “Certainly, Canada and Mexico are right to be concerned about this because it doesn’t align with what a free trade agreement is supposed to be about,” he said.

Mexican officials have also drawn a line in the sand over national content requirements. “National content is not utilized in any trade agreement in the world because it creates too much rigidity for companies,” Guajardo said on the Televisa TV network. He characterized the first round as mostly “basic positioning” by the different sides.

The next round of talks will take place in Mexico City Sept. 1-5, and then move to Canada on Sept. 23, according to two industry sources familiar with the proceedings.

Laurence Iliff contributed to this report.

Mercedes-Maybach goes green with Vision 6 Cabriolet

PHOTO GALLERY: Vision Mercedes-Maybach 6 Cabriolet


Mercedes-Benz is showing its view of an ultraluxe convertible of the future with its Vision Mercedes-Maybach 6 Cabriolet unveiled Friday in Pebble Beach, Calif.

The Vision 6 Cabriolet is engineered and designed as an electric car with output of 750 hp and a range of more than 200 miles.

It is capable of accelerating from 0 to 60 mph in less than 4 seconds, Mercedes says. A quick-charge feature allows for enough power to charge the car in five minutes to boost driving range by around 60 miles.

The two-seater, inspired by art deco, follows the Vision Mercedes-Maybach 6 Coupe shown a year ago at the same Monterey Car Week event.

The cars don’t hint at a coming production model but instead showcase Mercedes’ latest design vision for the Maybach subbrand.

“The Vision Mercedes-Maybach 6 Cabriolet takes modern luxury into the realms of the ultimate in luxury, and is the perfect embodiment of our design strategy,” Gorden Wagener, chief design officer for Daimler AG, said in a statement. “Breathtaking proportions combined with a luxurious ‘haute couture’ interior help to create the ultimate experience.”

The concept measures nearly 20 feet in length and includes a superlong hood, flowing lines and an extended, round “boat tail” rear meant to recall the look of a luxury yacht.

New malware masquerades as a ride-sharing app

An update to the venerable Faketoken.q Android malware has made it easier for the program to steal your credit card information from ride-sharing apps. Faketoken attacks Russian ride-sharing apps by overlaying text boxes on the credit card information pages that can capture your credit number and other important information.

Kaspersky writes:

After getting onto a smartphone (judging by the malware icon, Faketoken infiltrates smartphones through bulk SMS messages with a prompt to download some picture) and installing the necessary modules, the Trojan hides its shortcut icon and starts background monitoring of everything that happens in the system.

The trojan masquerades as a photo app on your phone and is specially camouflaged for maximum sneakiness. It then watches all your apps and uses a technique similar to Cloak & Dagger that overlays interface items onto running apps. This functionality is helpful in some cases but, as we see, is dangerous in others.

The trojan also goes after “apps for booking flights and hotel rooms, and apps for paying traffic tickets — as well as apps for booking taxis.”

US to review China intellectual property policies

Counterfeit items seized in 2008 (file picture)

The US has formally launched an investigation into China’s policies regarding intellectual property.

The top US trade official, Robert Lighthizer, said his office had “determined that these critical issues merit a thorough investigation”.

The move was expected after President Donald Trump asked Mr Lighthizer to review China’s practices.

China has voiced “serious concern” over the inquiry, which could result in US trade sanctions.

The US has been concerned about these matters for some time, said Gary Hufbauer, from the Peterson Institute for International Economics in Washington.

The annual cost to the US economy from counterfeit goods, pirated software and theft of trade secrets has been estimated at up to $600bn (£470bn).

On Friday the US it planned to look into hacking and reports that the Chinese government is steering investment into US companies in key industries as a way to gain access to new technology.

Officials will gather comments and hold a hearing in October as part of the so-called Section 301 investigation.

Mr Hufbauer said it’s a “foregone conclusion” that the US will find evidence of unfair practices, but it’s not clear how the Trump administration will proceed after that.

It could bring a complaint to the World Trade Organization, or decide to take action unilaterally, which would be faster.

Penalties might be targeted against individual companies, or more wide-ranging, he added, which will shape China’s reaction.

On Tuesday, China’s commerce ministry warned: “If the US side takes actions that impair the mutual trade relations, disregarding the facts and disrespecting multilateral trade rules, China will not sit idle.”