AAH #804 - A Shop-Level View of Running a U.S. Battery Plant

0:00Forget whatever plans you have this weekend because you're staying at home and playing on SpinQuest. And there's never been a better time to sign up than right now. New users get$30 coin packs for just$10. All the table games you love with hundreds of slot games and real cash prizes. That's at SpinQuest.com. S-P-I-N-Q-U-E-S-T dot com. SpinQuest is a free-to-play social casino. Void where prohibited. Visit SpinQuest.com for more details.

0:31AutoLine After Hours is brought to you by Alex Partners, when it really matters, Bridgestone Tires, solutions for your journey, and by BorgWarner. The automotive industry continues to evolve and so do the opportunities to define it. BorgWarner, one of the world's most admired companies, gets partners where they need to go. Let's do something big together.

0:57Gary Vasilash: Hey, everybody. Thanks for joining us on AutoLine After Hours. Especially you, Gary. I'm glad you're here. I'm glad I'm here, too. It's a good sign. That's right. I think we're going to have an excellent show. I wish we would have had the show before the show because we're going to have such a good conversation with our guests here. Yeah. So let's let everybody know we've got Anthony O'Donovan. He's the Director of Operations for LG Energy in Michigan. Anthony, great to have you here. Thank you very much. It's a real pleasure to be here, actually. Real pleasure. Yeah. And we got Tom Murphy back from Carbuzz.

1:29Gary Vasilash: I'm back. I'm back. Good to have you here, Tom. Good to be here, John. So do we start out? No, no, no. We'll go straight into it. We'll start writing it. You opened a new factory this week. Yes, we did. Our Lansing facility. Huge facility. Purpose built. 2.8 million square feet. Whoa, whoa, whoa. Purpose built to make what? Because we haven't said that yet. Batteries. Batteries, right. We make cells for EV and for energy storage systems. And I believe both LFP and NMC. Exactly, yeah. We have a very flexible manufacturing system. So we make NMC, obviously, high-power solutions. They predominantly go into EVs.

2:14And we make LFP, which is the predominant technology for energy storage systems. You've got another plant in Michigan, too, though. We have another plant, Holland, Michigan. Which has been there for a while. So 2012, that kicked off. Very famously with Mr. Obama opening the facility, President Obama opening the facility back in the groundbreaking. I think it was in 2010. And then it kicked off in 2012. That's been there just over sort of really 15 years from when our first employees actually joined. And they're celebrating this year their 15-year. We have a significant amount of those. What's the split between the stationary energy storage and then the EV?

2:59And I don't know if it's the same or will be the same between Holland and, say, the Lansing plant. Yeah, so it's a little bit different. So predominantly now, the shift has been to energy storage systems as that market has really accelerated. So our Holland facility, approximately, I'll give you a percentage, 75 to 25 approximately. And our Lansing facility will be of a similar nature. Were you thinking four years ago it would have been a different percentage? I think, you know, I wasn't with LG four years ago. I've been within the automotive industry, and I think many people would not have thought that at the time.

3:38I think that the growth of the energy storage system has really come on quite quickly. and the customer demand has really accelerated in terms of that.

3:48Gary Vasilash: Thank goodness you got it. I mean, the EV segment hasn't developed in the U.S. like everyone was planning on. It's got to be terrific to have these energy center batteries. You know, I think I really, part of the reason when I joined LG is when I looked at what they were doing and the way that they approached the transition in the market was something that really impressed me, right? They really just made a decision to go forward and recognized the change in the market and capitalized on that. They really accelerated that. And, of course, I think the big thing is they kept it in the USA. I think that was that investment that they made and drove that into that market and that recognition, I think, is kudos to them.

4:35Kudos to them. Great strategy. Just to give the audience a sense of how big this energy storage thing is, according to Bloomberg, nationwide, some 750 gigawatts of energy storage projects, roughly equivalent to the generating capacity of more than 700 nuclear reactors, are in line to get grid connections, according to Lawrence Livermore Labs. So, it's... I mean, thanks for sharing that. I didn't know that. That's a great piece of information. But, you know, you talk about, okay, you've got this, you said it was a massive plant. I mean, give us a sense of how batteries are made. I mean, I don't think that people have a, you know, I mean, we can imagine how, you know, bottles are made and we can imagine how other things are made.

5:19But this is rather different. Yeah. So it's funny because, you know, the common term is to refer to it as a battery. We refer to it as a cell, right, because they're different modus of operation. We have what we call pouch-type cells. We have cans for prismatic, and we have cans for cylindrical. Yeah, so different things. The battery manufacturing process is really put into three stages. First stage is the electrode. It's where we take the cathode and the anode, and we have a copper foil and we have an aluminum foil, and we coat that with the materials, whether it be NMC, nickel, manganese, cobalt, or LFP, lithium, iron, phosphate.

6:01So what we actually do is we make a slurry out of materials, right? So we use solvents, we use binders, we use active materials, and we bring those together and then we apply that coating onto the foils, and that's called our coating process. We dry that. The next part of that is then we press that because we want to get very good adherence to the surface, but we also want to get the molecules really tightly packed and laid out to do that. For us, then, we have another process. We won't talk too much about that, but if ever you think about a battery, it has a positive and a negative terminal, we create a tab for that connection point.

6:44The next part is our assembly. This is where really we, for the pouch-style cells that we make, we actually cut them into segments, and we bring the anode, what we call the separator, and the cathode together, and we cut that into the shape that it's going to be formed up for the pouch. Once we've gone through that, we stack them into a whole series so that it becomes what we call a cell. We weld the tabs together, we join them, and then we put it into an aluminum pouch. That aluminum pouch is what is going to encompass the active materials. We're going to add electrode to that once we add electrolyte.

7:28We're going to add electrolyte to that. That becomes then the active material for the ions to pass backwards and forwards. That's pretty much the assembly process finished. Then we go on to what we call formation. This is really where the chemistry happens for the cell. And this is where we age the cell, we pressure it, we add heat to it, we age the cell, and we test the cell. So this is a formation process over a number of hours and days, which really sets the chemistry up for how the formation of the cell is. I think this is where LG is exceptional within its processes. It does a lot of work on that to really excel and provide high-powered solutions which are very high quality.

8:14Once we do that, it's ready for packing and to the customer. Well, you mentioned the foils. I mean, you guys have these giant rolls. Jumbo rolls, yeah, yeah. And so this is why the plant is so big, right? Because, I mean, you're doing this over a huge distance. It's unrolling this thing. So you're going to think this factory that we have in Lansing is like 2.8 million square feet. And we always think of square feet as flat. Really, we use cubic feet, right? Because we have a lot of what we call automatic retrieval systems where we process the parts because they take time for aging. So we use a lot of height of the factory to actually manufacture that.

8:50So it's a very efficient factory in terms of the flow. from one end of the factory is the beginning of the process to the other end is the end of the process. So say purpose-built because the cells flow all the way through the system straight down.

9:06Gary Vasilash: To flex between NMC and LFP. Can it all be the same equipment or do you have separate lines? We do have separate lines because of volume, so we have to stay flexible for that. But could either line build the other? Absolutely, yes. There's a process behind that. We have very rigorous cleaning protocols for that that we can apply to do that, and it absolutely can be done. So it's just a different slurry between the two? Yeah, it's a different mix, right? So when you do that, so we use tanks. So our tank systems are set up to operate in a different way so that we're very flexible. Can you talk about the customer base?

9:44I know you have other plants beyond the two in Michigan. I think you have one in Ohio that is serving Honda. And can you talk a bit about the relationship with General Motors now and going forward? I know they've scaled back partnership with you and certain plants, especially in Lansing. You know, who are your biggest automotive customers now? And where do you go with General Motors into the future? Yeah, I mean, the future for us. Let's talk about where we are today. So part of Lansing, we have new programs with Toyota, which are kicking off. It's with the Highlander and with the Lexus. So they will go forward as our customer.

10:21Our relationship with GM is, I think, very, very solid. We still have two joint ventures going on with Tennessee and another plant in Ohio. We have eight altogether. LG is the largest manufacturer of batteries in the U.S. I think this is key to that. And our joint ventures with that are a testament to what goes on. Our relationship with GM, I think, is still very, very solid. work very closely with them on all of our work that we do together. For the future, sorry, can you repeat the last bit, Tom, for me? Just like where you go from here. Well, you've talked about General Motors a bit, but I guess is it important now to reach out and find other auto makers as customers?

11:01I'm thinking about, I went to Windsor a couple of weeks ago to the new battery tech center that Stellantis has opened. Yeah. Research, not assembly specific there. And they're looking at all sorts of interesting things. I'm just wondering, are they pulling in battery companies like LG into that research? Yeah, so I can't talk to specifics on that, especially when it comes to research. It's confidential information. But we have other joint ventures with Hyundai, Kia, with Honda, etc. So these are important strategic partnerships that we have. Of course, we welcome all customers to do that with what we work with.

11:38And from a financial standpoint, as dire as the EV market looks today, I can only imagine what challenges it creates for the battery suppliers. And here you pivot now more to energy, you know, stationary storage systems. And is that enough to sustain you going forward? I mean, it seems like at some point, if there aren't more EVs coming online, if that volume isn't going up, it seems like it would create a real financial headache for you. To be honest, I think when we look at things like that, right, energy storage systems, the demand from our customer is huge, right? It's consistently coming through.

12:23We're the largest North American, so they come to us as the first choice, right, generally. The EV market in itself is rebounding. There's no doubt about that. There was a lot of balancing over the last year from what was doing from stock levels. And now we're starting to see that come back. And the demand for that is starting to pivot both ways. I think that points to exactly why we build our factories in a flexible system. We have to be able to meet those demands that come from our customers. And if we have new customers coming forward to us, we want to be able to support them. LG is a very customer-centric organization.

13:03There is absolutely no doubt about that. So when a customer wants, we want to be able to provide a solution for that. Hence, we have such a large North American manufacturing footprint. Anthony, with all the data centers, I suspect that even if there was another electric vehicle never made, they would still be in great shape. Yes.

13:23Gary Vasilash: Anthony, I'm curious what it takes to run a battery plant in the U.S. I mean, China clearly in the lead, dominates everything. And I'm especially curious about running battery plants in the state of Michigan. Yeah. What are some of the issues that you got to get by? And I'm thinking about hiring people with the proper skills, getting the materials that you need, getting the machinery that you need. Take me through that a bit, would you? Yeah, so if we start with the factory itself, right, obviously the first part of it is the infrastructure of a factory. The second part is the equipment that goes into the factory.

13:59LG is really skilled at the technology that it brings. If you were to walk around the factory, you would be overwhelmed with the amount of technology that's in there. And LG has a hand fully vertically through that process with its partners, designing hand-in-hand with what goes on. That's the first part of the story. The second part is that batteries manufacturing is a little bit different than normal automotive manufacturing. We tend to think of automotive manufacturing as being a very repeatable process. Anybody can go on an assembly line and build that. Battery manufacturing is not like that.

14:37We have some chemical processing going on. We need much more technical skills. The blend of automation and people together is of a far higher level. I would say they're some of the most challenging situations that we have in terms of people's skills. We've seen in this country the very difficult challenge with maintenance technicians, industrial technicians, engineers, growing that. We've invested heavily within Michigan itself, invested with the community colleges to bring those technical skills to our people. And when we hire people, we're looking for that blend of automation, the growth potential that they have with that.

15:18I think that's probably the most difficult thing. And you'll see that with the skills that we have with some of our colleagues, transferring that knowledge is an important aspect of growth within the business. taking all the skills that have been learned and then passing them on to the new colleagues. So you mentioned the difference. So I looked at your CV and various places you've worked over the years, including a company called Tesla. And it seems to me that given your variety of experiences in manufacturing of different types of components, that this battery manufacturing must be a challenge to you personally in terms of wrapping your mind around the process, being more of a process operation than a discrete part manufacturing operation where most of your experience seems to have been.

16:16Yeah, so for 30 years, I've been in all types of manufacturing. I've always been very fortunate in my roles that I'm not just at my own factory. I traveled all over the world, right? And I've been very fortunate to always be within the supply chain as well, whether it be advising other suppliers, working with other partners. I spent a lot of time in my early career as manufacturing engineer, designing equipment, designing industrial automation and doing a lot of high tech automation. I remember in the UK, one of the first robot applications with cameras, right? That was the first thing. Noise monitoring systems with into sunroof systems.

16:54One of the first applications of that. and getting a sound generator, right, and putting microphones on it and putting it onto a frame and going, okay, we get that signal, linking it to a PLC and going, okay, we can get a pass or fail criteria and kind of developing. My career has always been that way, right? I'm a learner. I love to learn. So for me, any type of challenge, any type of thing that brings on that new challenge is really my will base. That's what I love doing, pretty much. And battery manufacturing, I think if you put it down to its basics, all manufacturing is process driven. It's all process driven.

17:34It's understanding the variables that come out of it, which is probably the most important thing, and how you can adapt your methodology to understanding how process is.

17:44Gary Vasilash: So my understanding, the key to making a battery plant profitable, I think this is true of any plant anyway, but especially batteries, is yield that you get out of it. From what I've been told, you've got to get to 90 percent, 92 percent yield or you're not making money, anything above that. You really are. Is that right? And if yield is the key, what are the things that you really focus on to boost that yield? Yeah, yield is an absolute critical measure in terms of what that is because of how many processes we have. So if you imagine from the first process to the 35th part of the process, if we lose parts of our process within any of that, there's a multiplication factor.

18:340.1 times by 0.1 times by 0.2 times by 0.3 times by 0.1, all of a sudden you're at 85 % and you're going, what's going on? So the quality that's employed in each part of those processes at each stage, the measurement of that is the critical nature of what we do. So our yield figures are in the very high 99%. So that gives us really that critical nature of what we're doing to be able to control our process so that the yield at the end is in a very high 90%, not down at another level. people sometimes forget they measure at the end we measure at every point because that's what gives us the advantage and when we have a challenge we deal with that challenge immediately but you're not inspecting this in some of it we are so we use a lot of I can't talk too much about technologies yeah some measurement systems so let's talk about roll press we measure exactly the thickness for what is going on And they use this technology in many other industries as well.

19:42But there's very, very precise measurement on every part of the role, very precise measurement. And we don't not measure where it is. So every point in that process, there's data to be derived from it. And analysis, you know, obviously you guys are very automotive. Six Sigma, right? So Six Sigma, 99.973%, right? That's how high you have to be. So you're challenging yourself in every part of the process to reach and attain to them.

20:11Gary Vasilash: So we heard on this show a couple of weeks ago that you really got to go to 9 Sigma. I mean, yeah, that's an achievement. Because I always learned that once you get to 6 Sigma, that's the process telling you go find other problems because you got this one nailed. Yeah. So if you individualize it, you could talk like that. But the goal should be your overall process to be a 6 Sigma. So just as I explained, you've got 35 parts to your process. You add that up. Now try and achieve Six Sigma. And I love the point that you make of measuring throughput yield, i.e. at every step of the way, not just at the end of the line.

20:51Gary Vasilash: That's critical. It's absolutely critical. And it's like our process is split into three distinct phases of operation. Mainly the environments that we're manufacturing with the electrode is a little bit different to what we manufacture the cell in. We don't want humidity within the process. And then to our formation, the cell is encased, so it's not exposed to the atmosphere. So we can have a different atmosphere which we operate in. So each phase is done slightly differently. But we measure very critically every step of the process. So if you're in the formation part, so this is basically the end of the line.

21:30You're making everything work. You're charging it. You're discharging it. There you go. You know, if you find something doesn't work, maybe it's one cell. I mean, what do you guys do? Goodbye. It's gone. Yeah. We only use the highest grade. We only use A-grade cells in terms of the process. And part of that is the longevity of the cell. So the criticality is chemical engineering at the end of the day, right? And if you find lower-grade cells, what you don't want is to join those together with other cells. You don't want to be doing that. So it's very important if you have an issue, you grade that cell, is to take it away from the system.

22:12Very important. Can you give us an update on Ultium? We've heard of Ultium in this current generation of GM EVs across the platforms. I mean, it is a battery platform that was in place, joint venture between GM and LG. And now as of 2025, I believe they have sold off their share to you. So LG, I think, owns all of what was the Altium venture? No, we still have joint ventures, Altium 1 and Altium 2. Okay. So Altium 1 is in Ohio, Warren, Ohio. Altium 2 is in Tennessee, Springfield, Tennessee. They're still joint ventures. In fact, they're just going to ramp back up again now, working together as the teams, both in energy storage and EV.

22:58Still with General Motors? Still with the joint venture, yes, yes. Okay. It's only our Lansing that we wholly acquired in May last year. But future EVs that are coming from General Motors will be on Altium or will be on something else? That's something I'm not privy to. I'm really sorry. I don't work in that side of it. When they say, Anthony, we need you to make that, of course, if we make that in any of our other facilities, is that or they choose to make it in the Altium facility. Are you learning much about solid-state batteries? Is that something that LG wants to head into? That's a different technology that's going on.

23:37I don't really work at the front end of the business in terms of solid state, but I think it's an exciting technology. There's a lot to be worked on for that, especially we talked about the cost basis of our sales. That's something that needs to be really looked into as cost effectiveness in the market. I think it may not be quite ready yet. Anthony, I'd love to know how readily you're able to get the materials that you need.

24:05Gary Vasilash: Everybody knows China dominates the materials that go into batteries, or at the very least, the processing thereof of those. Where does the U.S. or maybe the rest of the world stand right now in terms of trying to develop its own sources for the raw materials and the processing of them? Yeah, that's a really interesting question. For LG itself, I can't talk for other people, but for LG we have alternative sources, which are the most important thing is to solidify what those sources are and make sure they're very stable within your environment. So LG works really hard with alternative suppliers from Indonesia.

24:46It's also investigating with South Korean, Japanese manufacturers about how it can really develop further that supply chain And, you know, global supply chains have always been very difficult the last since COVID. So stability is very hard to achieve. That's why they look at alternative sources and make sure that they can maintain them. Yeah, I was wondering about materials. Okay, you know, if you're making a stamping, right? Yeah. You get a coil of steel, you know what the makeup of the steel is, easy. Okay. Well, compared to you're getting these giant containers full of powder that become the slurry, how do you validate that whatever is in one of those giant vats is the right stuff so you don't find yourself making a slurry with something that is not right?

25:44Yeah, so if you visit our facility, you'll see that there's a full control center around our mixing, right? So it's kind of like, I don't know the best way to describe it, but we have on the one end big tanks that we bring the material in. But before we do that, the material gets checked. It gets validated, scanned. It's cross-referenced. We have control centers which do chemical tests of that. So we'll make partition, small sections, test it. Once it's tested, validate that right in the lab there, and then they're approved to submit. And the tanks themselves, they're done in different stages.

26:26So there's a main tank where we mix, but that then processes to other tanks. So it's separated. So if ever you had an issue, it would be immediately separated as something else. You don't get into those problem areas. We focus really heavily, like I said, on how to get the yield. Part of that is the quality check that you put right in place to start with. It starts from the beginning. Steel coupons easier, so. You know, I won't get into that. COVID was really challenging for steel and gold and stampings and everything. So I had a really tough time. You mentioned the EV market. You're seeing it improving.

27:07You're seeing it recovering. From your standpoint, how do you know when the market is really back and churning? And like, is it based on your plant achieving, say, 80 % capacity usage or something better? I mean, is there, can you talk a bit about the threshold of, you know, where do you know, yes, the EV market is actually in full recovery? Yeah, I think if we take our Holland facility, for instance, so we have 22 gigawatt hours. We have about five hours for EV. We have about 17, 17 and a half for ESS. And that facility is a little bit different to our Lansing facility. Our Lansing facility is purpose-built.

27:47You see the evolution of Holland as it's grown over the years. It's split into different sections. So when we're at capacity with our EV and in that area, we know we're really pushing it out and we're seeing the return to the volume creation. Of course, for something like Toyota, we have a plan. Just like any automotive supplier, it's about the forecast. our OEMs in automotive, they're actually very, very good at forecasting. They're really very good, and Toyota is especially good. They work on, their system is all-level scheduling, so they pretty much know from the market demand how they work.

28:24That gives us very good indications as to what's going on in our market for our customers.

28:31Gary Vasilash: This is to bounce off a question Tom asked earlier, the different chemistries and the like. GM and Ford have both announced they're going to LMR. In fact, we should be right around the corner based on their original announcements. Would it be easy enough for your plants to switch over to a lithium manganese rich kind of chemistry? So that's something that the teams are really working on in terms of that and the future. I can't comment too much on that. But we build very flexible manufacturing systems. The lessons that LG has learned is all about flexibility. So there's lots of opportunity. So if they're ready to pull the trigger, you're ready to build them.

29:19We're always ready.

29:21Gary Vasilash: He's a manufacturing engineer. He'll design the system. LG is very customer-centric. They're really focused on their customers, and customers are so important to what they do, and they're very solution-driven. I think what's indicative of that is you look at Holland. Holland was the first LFP, North American manufacturing, right, in North America, and they did that very quickly. They turned what was a very challenging situation into a very positive situation and were able to offer their customers exactly the things that they need. Again, that's why I really joined LG, to be honest. Amazing at that kind of stuff Well good We're at the half hour mark here, we're going to have to wrap up this segment, but Anthony it's been great to have you on the show here Very interesting Thank you very much, I appreciate it Thank you Tom, thank you Gary We're going to take a quick commercial break Great sponsor support here and then we'll be back to talk about some of the news of the week The automotive and industrial sectors are undergoing a historic transformation.

30:37Electrification, digitalization, supply chain reinvention, regulatory shifts. The pace is accelerating and the pressure to adapt is real. This is not a time for hesitation. It's a time for bold decisions backed by fast, effective execution. You need a partner who understands complexity from factory floors to boardrooms and delivers measurable results. That partner is Alex Partners, when it really matters.

31:13The automotive industry continues to evolve and so do the opportunities to define it. BorgWarner, one of the world's most admired companies, gets its partners where they need to go. let's do something big together performance that shines even in the rain that's what really matters rich don't potenza tires improved grip in wet conditions

31:44Gary Vasilash: all right we're back we're going to talk news of the week but all right so so i i was going to stump us and then i think tom's going to stump gary Oh, we'll see. So I actually had a special one for Tom, but this would be perhaps too obscure. But I'll throw this out anyway. I like obscure. Okay. So this, maybe you'll get it right off the bat. I'm going to say that now. Okay. This automotive supplier was founded on August 20th. Today's the 20th. 1915. What was it? 15. It wasn't Bosch because that was before 1915. And I don't think... And I'm just thinking about you, Tom. Now, just think about this.

32:28I'm thinking about me. It's like Murphy... No, no, no, no, no, no.

32:36I'm going to say ZF. And you're right. There we go. Look at that. Wow. Yeah? Stump the chump. See? So, the sufficient clue. So, anyway, here's the real one for you guys. Okay. Now, so for whatever reason, I started looking into the Hup Motor Car Company, okay, which was not founded on August 20th, by the way. But so they made the Hupmobile. Hupmobile, right? Exactly. And I mean, this is sort of a fascinating company. It was founded in 1909 and it lasted until 1940. And in 1911, it was one of two companies on the planet that was making cars with all steel bodies. And the other was BSA in England.

33:22And their making these all-steel bodies led to a contract with the supplier. And that contract led to the creation of the Bud Company, which was a huge supplier during the 20th century in terms of automotive stampings. Right. You know, fascinating. Okay. And now it turns out that, you know, Greyhound buses, okay, the first Greyhound bus was actually a Hupmobile that this guy in Minnesota in 2014, he had this left over and he said, well, let's try to make a transit system with these things. Hupmobile, right? It's 1914. That's not the question. In 1932, Hupmobile hired the famous designer, Raymond Lowry to design cars for it.

34:15Wow, he must have been extremely young then. And so it was the Model K. Okay, so I just thought this was very amazing, this hub company you don't even hear about anymore, right? Do you hear them, Tom? Yeah, I've heard of them, of course. So August 20th, 1920, seven guys, including Olympic gold medalist Jim Thorpe, met in a Canton, Ohio, Hupmobile dealership and created what is now an immensely popular organization that we are all familiar with. What was it? Football Hall of Fame in Canton, Ohio? It wasn't the Football Hall of Fame. So you're not talking Goodyear. I'm not talking Goodyear. That's Akron.

35:13okay they established the american professional football conference which became the nfl now now here's thank god for hupmobile yeah see it's it's and who knew now i'm concerned that this is the stuff that keeps you up at night gary are you i am yeah well so so i was i was a little curious because I know Sean, big F1 fan. Okay, the valuation of the NFL,$300 billion. Valuation of Formula One,$36 billion. Cadillac should have bought into the NFL, that's all I'm going to say.

35:57Gary Vasilash: that's for you sean i'll add that raymond lowey went on to become the chief designer of studebaker he is also the guy who designed the exxon logo he's also the guy that nasa hired to look at space lab remember space lab it was our space station back in the mid 70s and his design contribution was to put a window in it he said you can't send those astronauts up there and just have him sit in a tin can you got to put a window there gotta see something he was uh he was uh quite the designer but anyway let's get let's get to some of the news i i thought we should start off with the some of the stuff going on at ford tom i don't know if you've been following the bronco getting a pickup that's what it looks like and i was i swear i was i was thinking two days ago hmm why doesn't bronco have a pickup i mean you know the gladiators out there making some traction.

36:53And hey, this market is nuts about trucks. And I've been writing about all sorts of Ford things like four-door Mustangs and hybrid Mustangs. And it seems like there is no limit to where product development might take an automaker these days.

37:09Gary Vasilash: So in the Detroit News today, there was an article that was suggesting maybe the Ranger goes away to be replaced. You think that's what they would do? Well, I don't think it goes away permanently. You know how things go away and they come back. Like the Cadillac XT6, I wrote about that a couple months ago when it was assumed the XT6 was going away, and now, oh, it's actually going to come back to Spring Hill, Tennessee. Same with the XT5 is coming back. There was some information this week about the XT5 that Cadillac released some information about the plug-in hybrid version of the new XT5 in China, which made us think, oh, well, I mean, if the new XT5 is going to be built in Spring Hill, might that also be a plug-in hybrid?

37:50They're, of course, not going to let that cat out of the bag just yet. But anyway, so, yeah, so many different ways that automakers are going different directions. Steve, I wonder about this whole Bronco pickup thing. Okay, they're trying to like 2030, right? It's going to be a while. Oops.

38:07Gary Vasilash: Yeah. Okay, so you say Gladiator. Gladiator isn't doing very well, okay? Its sales for the first half are down 25%. They're down 33 % for the second quarter. I mean, it's like... That's just because it's a current generation. I mean, that generation's been out for a while. But it never made big numbers when it was making big numbers. But it's derived from the Wrangler. So you have that sense of scale. I'm sorry? It's the chassis of the Ram, 1500. Right. But you've got Wrangler and you've got Gladiator. In the same plant. Yeah, the same plant.

38:45When do we get truck fatigue? Apparently not anytime soon. Not any time soon. We've got the new battery electric UEV, the Fathom, coming very soon, or next year sometime.

38:55Gary Vasilash: Yeah, I just find that interesting that they might get rid of the Ranger to go with, add that pickup essentially to the Bronco line. So let's see if we're in there, Stuart. So I thought that was very interesting. And the other thing we learned is that Lincoln is going to get a version of the Bronco. That took me by surprise. I mean, there have been a number of Lincoln pickups in the past. the blackwood i recall uh the mark was there a lincoln mark mark four or the mark something or other than about the time that the blackwood came out and um yeah i worry about that because i'm not sure that well the blackwood was a pickup too it was right but what they're talking about at least what's been talked about is that this would be uh sort of styled like a mercedes g-wagon yeah but you know probably at half the price of a g-wagon and with the bed but you know the thing about the Bronco pickup truck that I worry about is you think of the Bronco Sport and you think of the Escape and the Escape went away partially because, well, for a number of reasons, but also Bronco Sport charges a premium.

40:00So that tells me that if Ford wants to keep that model going, the Bronco pickup truck would also be a more expensive version, something bigger, more expensive than a Maverick. Does it take the place of a Ranger? I'm not sure. And is there room for both a Ranger and a Maverick and a Fathom? And a Fathom. It's a lot to process, but I don't think Ford has reached the point of maximum truck just yet.

40:32Gary Vasilash: What was curious, too, is that the Escape went away, like you said, and the Corsair Lincoln. And then I thought they got to build a Fathom. There was going to be at the Fathom factory, the Louisville truck plant. They were going to, I thought they were going to come out with an electric crossover and that would be the escape. But now we've learned that Ford's working with, who are they working with in Spain, Sean? Oh, with Geely. And they're going to do a compact crossover in Spain with Geely. But then they also announced they're going to have a compact crossover in the United States priced at$25 ,000.

41:16Gary Vasilash: And I thought, and I want to say Auto Forecast Solutions said that's going into AirMoseo to be built on the same line as the Maverick. So, man, I'm totally confused as to what's actually going to happen. Better hope they're not. They certainly need a replacement for the Escape. Think of all of the other brands that are playing in that space. You know, not like even sub$25 ,000. There are vehicles out there. And so Ford is MIA in that regard. So they really need something. Whether they can, you know, ship this thing across the border from Mexico, from Hermosillo, and make it work financially. I don't know.

42:01I mean, it's going to have to happen when tariffs have gone away or have been significantly reduced.

42:09Gary Vasilash: Yeah. USMCA, baby. Yeah, that's another can of worms. It doesn't seem to be. Not going to be resolved anytime soon. No, it's not. And tick tock, you know, the clock is ticking here. Yeah. So, Gary, what do you make of this move of Jaguar Land Rover, or specifically Land Rover, going to Stellantis and asking Stellantis to build products for it here in the U.S.? Specifically the Defender. Yeah, Defender. And where? Well, okay, if you look at it from two ways, right? One, JLR needs help, okay? Its business is not doing particularly well across the board, okay? So you need to sell more product in the United States, which is a very viable place for people to sell products.

42:59So they got to get here. A forementioned tariffs would make it very expensive for them to bring these cars in. So you say, hmm, I got to start looking around for somebody to work with. Well, two things with Splantis. One is that basically it is a European company at the end of the day, right? So JLR is going to be able to talk to people on the other side of the Atlantic and work this thing out. Two, they've got capacity and know-how in terms of manufacturing things like defenders. So it just makes perfect sense. But it's also 30 ,000 units. That's kind of what they're talking about. And by Stellantis standards, that's pretty small stuff.

43:42And then where does it happen? It doesn't seem like it's going to happen in Belvedere, Illinois, where they have capacity. Probably not going to happen in Brampton, Ontario, because that doesn't solve anything in terms of tariffs. No, it has to be made in the U.S. So the Warren truck plant here seems to be a possible target, unless there's some other interesting scenario that they haven't really shown any on yet. You figure if you're going to do$30 ,000 low-volume sort of manufacturing, you're going to be making a very serious premium on this product, right? Right. then let some of those trucks go.

44:18Gary Vasilash: Is that it? I think a lot will be dictated. Is this going to be body on frame or is this going to be unit body? And if it's body on frame, then you can put it in a truck plant or you could put it in the same plant as the Wrangler and the Commander. Compass. Gladiator. Gladiator, thank you. or, you know, that Jeep Wagoneer, Grand Wagoneer, never sold all that well. There's got to be capacity there. Jefferson North? Yeah. So I think it comes down to, you know, what do they want to do? Body on frame is a whole lot easier to do, especially in low volume than a unit body. Yep. So mentioning the Brampton plant.

45:04So apparently last Friday, Unifor, the Canadian trade union, was notified by Stellantis that Stellantis is going to begin talking to a third party about doing something with the Brampton plant. So what might this be? Leap Motor. I mean, there were tons of questions on Investor Day, May 21st in Auburn Hills, tons of questions about Leap Motor. And they, at that point, CEO Feloso is not ready to talk in detail about that. But you got to think that would make some sense to produce them in Brampton. battery electric vehicles, China designed. And then there's perhaps some, because Stellantis also has a huge presence in Europe, you've got some carryover between their operations in Europe and perhaps what they might do in Brampton with Leap Motor.

46:10And then again, the tariffs come up. So it seems like we're seeing a lot of these actions right now that are being considered based on the calendar. Like, you know, Trump administration ends next year. What happens in tariffs after that? The automakers are trying to figure out their next steps based on what does the tariff world look like? It's hammering the bottom line for everybody. Yeah, really. So what do you think is going to happen? Well, so I started thinking about this and maybe it was in the middle of the night, maybe not. And, you know, we automatically assume that this is going to become an auto plant of some sort or another.

46:50So I started looking into this. It turns out that AMC used to have a plant in Brampton. Okay. Same plant. No, it was a different plant. Really? Yeah. I thought it was the same one. It was on a different location because it was flattened and reconstructed as a Walmart distribution center. And there's also a Lowe's on the property. Okay. So that plant went away. So it ramped in. And now Chrysler, it's famous Kenosha, Wisconsin plant. Okay. well you know it's a manufacturing operation and they did good stuff there and uh they demolished that and turned it into a mixed use mixed use lake site community so property in brampton maybe you know it's outside of toronto toronto is a growing metropolis no that's what i think would

47:46Gary Vasilash: be most likely is it would be non-automotive turned into a shopping mall yeah some talk about some defense work even i think in that plant but it's a big plant and you know it's capable of making a lot of stuff um i i think you know the leap motor thing if if leap comes up or stalantis says hey we're going to do all this uh though to your point they i mean what the hell is is usmca going to let cars like that in i suppose if they didn't have any chinese software or hardware having to do with connectivity it'd be really hard to keep them out but uh I think you're onto something, Gary, that it will be non-automotive.

48:27So a third thing, Belvedere was mentioned, and so then it was announced recently that they're still delaying production in the Belvedere, Illinois plant. That plant basically has been down since February 2023. And it's supposed to be Compass and Cherokee, correct? Well, it's supposed to be the next generation Cherokee coming there. And I wonder, why is it taking them so long?

49:02Gary Vasilash: You know, depending on what the delay is, was the Cherokee already done? And now they decided, you know what, we really got to put that on the Stella One platform. Well, that's because the Stella One is going to be everything. Yeah, and that's a real problem because they just launched an all-new generation coming from Toluca, I believe, from Mexico. The current Cherokee, right, is coming from Mexico, and it's only going to be, based on this planning, it's only going to be like three or four years, and then a new Cherokee is going to replace it ostensibly at Belvedere. Yeah, so it was Cherokee at Belvedere.

49:36They moved it to Toluca, building that new one there. Yeah, those are very expensive moves right there. So who's making these decisions to make these very expensive moves at a company that needs to make everything it possibly can in terms of money? Well, I think we're seeing laid bare the management upheaval. I mean, Carlos Tavares set certain things in motion that all in the last two years, all of his plans have been uprooted. The Hemi is back, and we're back to SRT vehicles and muscle cars. Changes in regulations certainly helped Atlantis in that regard. So, you know, we're just witnessing all of these things that might not make sense right now because of so many changes that they have to, you know, they're still adapting.

50:37They're still adjusting to what Tavares had in place. And now they're trying to, you know, repurpose everything. They're recreating much of the company. I mean, when I was at the investor day on May 21st, it was staggering. I think, John, you were there. It was staggering from morning to the end of the day. It's just a steady parade of, oh my God, you're going to do how many new vehicles in the U.S. and they're going to launch? How soon? And then we got to go in the design dome. We got to see them. We got to see the Copperhead. And I mean, it was, it was, it changed my mind about the company because I was expecting to go, you know, I was expecting to come out of there with, oh, they're going to shut down this brand and they're going to shut down this brand.

51:16No, they want to keep them all alive, which, you know, might be unreasonable. It might be a bridge too far to, like, try to keep 14, 13 brands alive.

51:26Gary Vasilash: Right. And it might be. But their plan is to commonize across the whole board. So if they want this. Things like Stella 1. Yeah. They want, you know, what they call Stella Brain. They want this common electronic architecture. They want Stella Cockpit. You know, the screens and all the software and everything. that goes, they want that standardized across, what was it, 80 % of their line across all these brands. Kind of makes sense. So I wouldn't be surprised if they said, oh, you know what, if we push Cherokee back another year or two, that gives us time to get it into the common family of things.

52:01Gary Vasilash: And yeah, we're missing market. And yes, we sunk money into that product already, but the plan is the plan. And let's delay this until we can get everything commonized. That That would be my guess. The other thing too is, remember they announced we're going to spend$70 billion on new products and everyone went, where the hell are they going to come up with the money? But I said, wait a minute, that's spread over 10 years. That's$7 billion a year. That's actually less money than they were spending on new product development before all of this. So it may even be part of the budget just going, hey, guess what, boss?

52:36Gary Vasilash: We can't do Cherokee right now. We're going to have to wait till it goes into another budget in another year. And year six of this 10-year plan, they may just say, maybe we need to change again. It's entirely possible. But they're putting a pretty convincing face on the plan at this point. Well, so far, what Pelosi has been doing, along with the people he's brought in, like Tim Kaneskis, and like, it's working. I mean, certainly in the U.S., you know, RAM, especially, is really showing signs of a turnaround. And you're seeing it elsewhere in the company, too. And overall profitability has improved dramatically.

53:18Gary Vasilash: So, you know, they've got some wind in their sails here. The plan has not even been fully executed, and they're starting to turn things around. Yeah. Talking about RAM, I just did a story yesterday about RAM pricing for the RHO, the RAM 1500 RHO. Super high performance. Yeah, high performance off-roader. And the pricing on that was such that Ford had to respond and cut their price by over$4 ,000 for the F-150 Raptor. Now, you know, the Raptor had that segment all to itself. And then as other products have come into the mix, to see Ford cutting the price by that much, and they cut it by taking what was the base model and just getting rid of like heated seats and a premium audio system.

54:14And there were a few more features that they cut. So they created a new sub-base level that was$4 ,000 less expensive to make. So it was just interesting to see Ford responding to RAM pricing because they're out there making some noise.

54:38Although these brands are doing better, we've got to put this in some sort of a context here. So we know we've got the new Silverados coming soon, right? So we have the existing Silverado that's out in the market right now that people know will be replaced. It's selling quite well. It's selling quite well. So in the first half, there were 125 ,000 and change Rams sold, but there were 179 ,000 Silverados sold. Now, it wasn't that many years ago when the Ram 1500 outsold the Silverado. Right. Okay. So to put apples to apples, well, one's a big-ass apple and one is much smaller. So we've got to keep that in mind.

55:24Gary Vasilash: Two things there. Remember, Ford's been capacity-constrained with the F-150 from that aluminum fire and the like. And Ram's only clawing its way back right now. You know, Tavares had gotten rid of the Hemi V8. Caniscus has called back. First thing he does is put the Hemi back in that thing. So Ram is clawing its way back right now. The wind in the sails is a bit of an exaggerated metaphor. I don't know. I do see. But here's another, because we're getting down to the end here. And, Tom, this is something that you reported on this week. What the hell is going on with backup cameras? Oh, man. Yeah.

56:01Recall from Chrysler across the whole lineup. Chrysler minivans and Ram trucks and Jeeps, like all the Jeeps. and Dodge also. 2026, 2027 model years, 900 ,000 vehicles because of backup cameras. And yeah, I looked at, okay, well, who really is, you know, taking the brunt of most of the backup camera recalls? And of course it's Ford. They've, you know, 49, is it 49 recalls just for backup cameras in the last year and a half, something like that. Just crazy numbers. And it's because of software. It's because of the complexity of all this stuff we're trying to channel through the central screen. It's a lot.

56:50And, yeah, there have been tons of recalls on that, just on that front alone, on these backup cameras, which, you know, they've been in the market. They've been standard since 2008. Shouldn't we have this stuff nailed down by now?

57:04Gary Vasilash: So I dug into it. Ever since those cameras have come out, 21 million vehicles have been recalled. Yeah. And it's two things. Water gets into the camera and it goes on the fritz. And that doesn't happen very often. It's software stuff. And so I looked into it. Every single car company, without exception, has had massive hundreds of thousands, if not millions of vehicles recalled because of backup cameras. And I thought, what about Tesla? I mean, they're the best at software, right? Nope, Tesla's had backup camera recalls too. What the hell is going on? So is this a supply-based problem? I don't think so.

57:43Gary Vasilash: I think it's across the chain. It's everything. It's the suppliers and it's the automakers. It's integration. Because the Chrysler one is the radio was interfering with the software camera. So it's a complexity of integration of electronic systems. Yeah, images freezing up. Images being reversed. Yeah. Imagine that, you know, I mean, I, I, I, my mind was blown when I saw that it is entire, it's across the entire industry and it involves so many millions of vehicles. Yep. So how do you feel about the, um, rear view mirrors now that are being, uh, digitally fulfilled in the, in the saying in the mirror, put the, put the camera in the mirror so that you're seeing like, well, yeah, I mean, so the cameras on, on the exterior of the vehicle, which are allowing you to see what's going on behind you rather than just having reflection that has been.

58:36It takes some real, I'm sure you guys have driven cars with it. And it's, you know, Gentex does it and they're growing that business. But man, it's, for me, it's a cause for motion sickness occasionally. Because you're used to looking into the rear view mirror and you're seeing X. But when now you're seeing X times three because the cameras are pointing so, so much further out and you're seeing so much more there, it really, the smaller the vehicle, the harder it is for my brain to process that. Like in Corvette, it's worse than technology, whether, you know, that that will be a problem there.

59:14Gary Vasilash: Some people love it. Some people absolutely love it. I personally do not. And the real problem is your focal point changes. You know, so you're looking out, you know, around the car, through the windshield, through the side windows, through the outside mirrors. And the focal point is pretty much the same. Whereas when you look at that video feed on the inside rearview mirror, your focal point stops right at the mirror. Your focal point is not the depth of reflection in the mirror. So it throws my head off. I know Gentex has worked on software to give it more depth of field. but I personally still don't like them.

59:54Gary Vasilash: If there's people in the back seat that are blocking your view for the central, the inside rear view mirror, then I think the video feed is good. It can be good at night as well. I just wonder if it reflects if the image gets reversed while you're not sure. You can just flip the tab on the bottom of all of them and they go right back. Yeah, so Sean, it's a good point. You don't have to have the video feed. all these cameras have a little switch so you can go back to the reflective glass but but i want to keep using it because i want to i want to i want to adapt to it i want to be able to use it it's but the more you use it the more used to it you will become yeah but it still changes your focal point yep can i give a quick plug for car buzz yeah do yeah so i've been writing for car buzz now eight nine months um and it's been great i've been writing up a storm um i've been used to editing and managing for so long that now it's just, you know, hip deep in industry news and product stuff and trends and analysis.

1:00:56And we've got a car marketplace on the website. So we've got a carbuzz.com. You can even shop cars. It's pretty cool. Thank you.

1:01:04Gary Vasilash: Yeah. Yeah. No, no, you're more than welcome. Everybody should check it out. John, you were going to say something? I was going to say if you pair the digital rear view with digital side view, that means that jumping back and forth is not as stuck. Okay. Good to know. Good to know. Well, with that, time to wrap up the show. Tom Murphy from Carbuzz, thanks so much for coming back on the show. Thanks, John. Gary, it's always good to get into these discussions. We invite all of you back next week. Auto Line After Hours is brought to you by Alex Partners, when it really matters. Bridgestone Tires, solutions for your journey.

1:01:49And by BorgWarner. The automotive industry continues to evolve and so do the opportunities to define it. BorgWarner, one of the world's most admired companies, gets partners where they need to go. Let's do something big together.

1:02:11Forget whatever plans you have this weekend because you're staying at home and playing on SpinQuest. And there's never been a better time to sign up than right now. New users get$30 coin packs for just$10. All the table games you love, with hundreds of slot games and real cash prizes. That's at SpinQuest.com. S-P-I-N-Q-U-E-S-T dot com. SpendQuest is a free-to-play social casino. Void where prohibited. Visit SpendQuest.com for more details.