Carlos Ghosn Faces a Different Kind of Prison
Today on Speed Lines: Ghosn’s new life in Lebanon, startups flounder and Ford has high hopes for Bronco parts.
Welcome back to Speed Lines, The Drive's morning roundup of what's new in autos, tech and more. It is Monday, but we will get through this unfortunate circumstance together.
Carlos Ghosn's New Life Isn't That Enviable
The prosecution and potentially lengthy prison sentence facing former Nissan-Renault boss Carlos Ghosn showed the world how draconian Japan's justice system can be. Given his resources, flair for the dramatic and unlikely chances of acquittal, it makes sense he would flee to Japan to Lebanon—even if he did it in a way that feels more like a heist movie than real life.
But life in Ghosn's familial homeland has not been all sunshine and roses. In this lengthy Wall Street Journal story, we learn Ghosn's new existence is full of limitations, paranoia, more legal battles and an attempt to mentally and physically recover from his ordeal:
A bodyguard, after looking the place over, disappeared. Several groups of Lebanese businessmen talked quietly nearby, paying little mind to the former auto titan who had made world-wide headlines weeks earlier by escaping house arrest in Tokyo and fleeing Japan after sneaking onto a private plane in a large black box.
Mr. Ghosn’s new life in Lebanon, he said between sips of espresso, is one of restrictions. He can’t leave the country where he grew up without risking arrest, and Lebanon’s banking crisis has crimped his access to cash. At times, street protests have made even moving around the city a challenge.
And always, he is on the lookout for Nissan or Japanese authorities who might be shadowing him.
“I’ve been told I need to protect myself,” he said. “Even the building in front of my house, Japanese people came to rent it. I don’t know what their intentions are. People tell me that a lot of Japanese people are coming, taking photos and observing.”
As that story notes, Ghosn hasn't lived in Lebanon since he was a teenager—none of his kids even speak Arabic. Furthermore, the country is in the midst of a financial crisis that's limited his access to cash. His life may be better than it was in Japan, but it's a far cry from the jet-setting one he had before.
That story is worth a read in full.
The Startup Bubble Feels Close to Bursting
Uber, Lyft, Lime scooters, WeWork—name a "disruptive" tech startup, in the transportation space or otherwise, and they all seem to follow the same pattern. Early hype, huge valuations, visions of grandeur as they seek to scale to crazy new markets (flying taxis!) followed almost immediately by an aborted or wakeup-call IPO, layoffs, cuts and investors left holding the bag.
Here's a briefing from The New York Times on the coming "reckoning" for startups, which of course includes those in the autos and transportation space:
Now the layoffs have started coming in droves. Last month, the robot pizza start-up Zume and the car-sharing company Getaround slashed more than 500 jobs. Then the DNA testing company 23andMe, the logistics start-up Flexport, the Firefox maker Mozilla and the question-and-answer website Quora did their own cuts.
“It feels like a reckoning is here,” said Josh Wolfe, a venture capitalist at Lux Capital in New York.
It’s a humbling shift for an industry that long saw itself as an engine of job creation and innovation, producing the ride-hailing giant Uber, the hospitality company Airbnb and other now well-known brands that often disrupted entrenched industries.
Their rise was propelled by a wave of investor money — about $763 billion washed into start-ups in the United States over the last decade — that also fueled the growth of young companies in delivery, cannabis, real estate and direct-to-consumer goods. Unlike low-cost software start-ups, these private companies frequently took on old-line competitors by spending heavily on physical assets and workers while losing money.
[...] Around the world, more than 30 start-ups have slashed more than 8,000 jobs over the last four months, according to a tally by The New York Times. Investments in young companies have fallen, with 2,215 start-ups raising money in the United States in the last three months of 2019, the fewest since late 2016, according to the National Venture Capital Association and PitchBook, which track start-ups.
As that story notes, the backlash isn't likely to be as severe as the dot-com bust of the early aughts. But at least one founder quoted in the story has a novel idea: a startup whose goal is to be "profitable from the beginning."
Imagine that! It turns out that your office rental company should make actual money first before it tries to end world hunger.
Ford Pins Its Bronco Hopes on Accessories
Ford won't admit it, but it's pretty clear the company is following the Jeep Wrangler model for the new Bronco: a rugged, off-road image, lots of customization and probably a price tag to match.
We all know how much Wrangler people love Wrangler crap, and so Automotive News reports that "weather mats, soft tops and as many other add-ons as possible" will be key to boosting dealer profits and stealing some of Jeep's thunder:
A revamped Ford Accessory Distributor network comprising seven regional providers aims to facilitate quick-turn orders and prevent dealers from having to amass large inventories of parts. Ford also has partnered with Autodata Solutions to make selling accessories online easier.
"The company is way more engaged than it's ever been in delivering accessories from the very beginning of launch," John Crane, chairman of the Ford National Dealer Council and owner of Golf Mill Ford in Niles, Ill., told Automotive News. "We know how important it is to sell accessories to people. They spend thousands of dollars on their vehicle. We want to be ready from the get-go."
Interestingly, Ford dropped the ball in that department with the new Ranger, which is only now starting to gain on the Colorado and Tacoma in terms of sales:
That didn't happen with the Ranger, despite inking an early deal with Yakima to offer everything from bed racks to paddleboard carriers. Dealers said some items initially weren't available and others were slow to arrive.
"At launch, we may not have had as many accessories as we would have wanted, but as Ranger has evolved, the accessories have caught up," said Tim Hovik, a member of the Ford council and owner of San Tan Ford in Gilbert, Ariz. "We feel like we've taken a step forward to modernize our distribution system to give the dealers more options and faster order fills so we're more efficient with our customers and can deliver a better experience for them."
Good luck to Ford on getting that sweet, sweet floormat money.
Coronavirus Fears Hammer Global Stocks
Let's close our roundup with some bad news: the ongoing coronavirus isn't just impacting car and parts manufacturing in China. It's affecting consumer and investor confidence across the board, and the markets in Asia and Europe reflect this today. Some findings via Bloomberg:
- Contracts on the three main U.S. stock benchmarks were all down more than two percent, with those on the S&P 500 Index pointing to the biggest drop since August. The Dow Jones Industrial Average may erase its gains for the year.
- The Stoxx Europe 600 Index slid as much as 3.7 percent on twice its average volume, heading for the largest drop since 2016, as investors fled travel and luxury-goods shares. A gauge of credit risk on the region’s high-yield companies jumped.
- The yield on 10-year Treasuries sank to its lowest since 2016.
- South Korea’s benchmark dropped 3.9 percent, leading declines across Asia, though Japan’s markets were shut for a holiday.
- Spot gold approached $1,700, while Brent crude oil tumbled almost four percent.
Outside China, South Korea and Italy are the countries most affected by the outbreak at this point. We'll be keeping an eye on this as it continues to hammer the car industry.
On Our Radar
Rivian seeks direct sales beyond Colorado (Automotive News)
GM retreats from more overseas battlefields (Automotive News)
Read These To Seem Smart And Interesting
An Oral History Of Rickrolling (MEL Magazine)
BMW E46 3 Series – Revisited 20 Years Later (BMW Blog)
What does Ghosn do next? One way or another, I just don't see him retiring quietly in Lebanon.