BREAKING NEWS : Fort Wayne Police remain quiet days after officer shoots man Full Story
BREAKING NEWS : Family of Mario Gilmer Jr. sets up GoFundMe for funeral costs following canceled safety alert Full Story

The existential threat facing the auto industry

The auto industry is healthy, making billions of dollars in profit around the globe. But it also faces great...

Posted: Nov 28, 2018 6:22 AM
Updated: Nov 28, 2018 6:22 AM

The auto industry is healthy, making billions of dollars in profit around the globe. But it also faces greater risks than it did even a decade ago when sales plunged, forcing bankruptcies and bailouts.

That's because the way people get from Point A to Point B is about to undergo the most radical change since the early automobiles replaced horses. Autonomous driving vehicles are about to change how cars are driven, powered and used. In the future, far more people will probably buy rides, rather than cars.

Alternative fuel vehicles

Automakers and manufacturing

Automotive fuels

Automotive industry

Automotive industry and environment

Business and industry sectors

Business, economy and trade

Companies

Company activities and management

Electric vehicles

Employee termination

Employment and income status

General Motors

Human resources and personnel management

Labor and employment

Layoffs

Motor vehicles

Personnel changes

Personnel management

Product development

Product innovation

Product management

Self-driving cars

Social and economic status

Society

Technology

Unemployment

Workers and professionals

For General Motors (GM) and the rest of the auto industry, that looming change poses an existential threat.

That's why GM announced plans to close five North American plants and cut about 14,000 jobs by the end of next year: Not because GM is in trouble today, but because it will soon be in trouble if it doesn't free up the cash it needs to radically change its business.

A changing industry

Self-driving cars will hasten the switch from gasoline-powered automobiles to electric vehicles. The sensors and computers calling the shots will need electrical power, rather than horsepower that gasoline engines provide.

The concept of car ownership could change, too. Today, privately owned cars spend most of their lives parked and unused. Self-driving cars of the future are expected to be on the roads for a much bigger portion of the day — once they drive you to work, they can drive someone else to the grocery store. That means roads could be filled with fewer vehicles overall.

That could be a tremendous opportunity for the auto industry: Automakers could sell rides, rather than cars.

Last year, GM President Dan Ammann said his company makes an average of $30,000 for each car it builds, between the sales price and maintenance. By selling rides in driverless cars, he said GM could make hundreds of thousands of dollars per car.

But there are other companies who hope to be the one selling those rides. All of this technology and change is attracting new players to the field, including upstart automakers like Tesla (TSLA) and deep-pocketed tech companies, such as Alphabet (GOOG), Apple (AAPL) and Uber.

When CNN Business asked Uber CEO Dara Khosrowshahi for his prediction 10 years in the future, he responded, "Hopefully, you won't own a car." He sees Uber, not GM, as the company that will be moving people.

The race is on

The battle to provide the vehicles of tomorrow is do-or-die for traditional automakers like GM and Ford (F). GM changed its motto to "Zero Crashes, Zero Emissions, Zero Congestion," a sign of the shift to self-driving, electric vehicles.

But it's an expensive bet — probably too expensive for the automakers to fund with the way they're currently doing business. And car companies will receive limited revenue from these futuristic vehicles in the coming few years, if not decades.

That's the reason why automakers are looking to slash their existing costs.

"We see these steps as necessary to ensuring the long-term sustainability and independence of GM," wrote Adam Jonas, auto analyst for Morgan Stanley, in a note to clients.

GM says it should save $6 billion a year with the moves it announced Monday. Ford said it expects to spend $11 billion in the next three to five years to reshape the company, though it has yet to announce the changes and cuts it will make to free up that cash.

Ford is also in talks with Volkswagen about some kind of alliance to help share the costs, short of a complete merger.

GM is also reaching out for new partners. It has set up a separate part of the company to focus on that new technology, and sold large stakes in the unit to Softbank and Honda (HMC).

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 749532

Reported Deaths: 13746
CountyCasesDeaths
Marion1030911775
Lake554681006
Allen41636691
St. Joseph36947564
Hamilton36527416
Elkhart29363459
Tippecanoe22862225
Vanderburgh22542400
Porter19331325
Johnson18405388
Hendricks17588317
Clark13200193
Madison13120344
Vigo12604253
LaPorte12394221
Monroe12163175
Delaware10947198
Howard10263225
Kosciusko9614119
Hancock8549144
Bartholomew8162157
Warrick7854156
Floyd7772180
Grant7229179
Wayne7155201
Boone6917103
Morgan6736141
Dubois6211118
Marshall6206116
Cass5991108
Henry5894108
Dearborn588978
Noble580186
Jackson508674
Shelby500897
Lawrence4732121
Gibson444093
Harrison440773
Clinton440055
DeKalb438785
Montgomery434690
Whitley406042
Huntington402281
Steuben399259
Miami392768
Jasper386954
Knox375790
Putnam372160
Wabash360583
Ripley346570
Adams344955
Jefferson335685
White330253
Daviess3031100
Wells295181
Decatur289992
Greene286385
Fayette284864
Posey273735
LaGrange272872
Scott269955
Clay265848
Washington244934
Randolph244683
Jennings235149
Spencer234231
Starke227558
Fountain218647
Sullivan213943
Owen211058
Fulton201542
Jay200932
Carroll193420
Orange188055
Perry186937
Rush175726
Vermillion173644
Franklin170235
Tipton165846
Parke149016
Pike138034
Blackford136132
Pulaski120247
Newton112736
Brown103943
Crawford102316
Benton101014
Martin91515
Warren83615
Switzerland8098
Union72810
Ohio57811
Unassigned0420

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1107225

Reported Deaths: 20091
CountyCasesDeaths
Franklin1285061459
Cuyahoga1156322204
Hamilton812991245
Montgomery524951040
Summit48356999
Lucas43309817
Butler38903603
Stark33297929
Lorain25641502
Warren24558303
Mahoning22332601
Lake21139385
Clermont20098252
Delaware18819135
Licking16649222
Fairfield16564204
Trumbull16527479
Medina15597270
Greene15256246
Clark14223306
Wood13281197
Portage13229214
Allen11903239
Richland11598211
Miami10837223
Wayne9116222
Columbiana9023230
Muskingum8889135
Pickaway8652122
Tuscarawas8639247
Marion8635138
Erie8052164
Ashtabula7139179
Hancock6996131
Ross6934161
Geauga6832150
Scioto6530104
Belmont6149174
Union583849
Lawrence5723102
Jefferson5669158
Huron5539122
Sandusky5437125
Darke5415129
Seneca5344126
Washington5308109
Athens523360
Auglaize501687
Mercer487285
Shelby476295
Knox4568112
Madison443765
Ashland435197
Putnam4334103
Fulton431871
Defiance431798
Crawford4033110
Brown401961
Logan387377
Preble3847103
Clinton378566
Ottawa372781
Highland359465
Williams347878
Champaign343858
Guernsey324253
Jackson317554
Perry297150
Morrow291340
Fayette285350
Hardin274865
Henry273267
Holmes2699101
Coshocton268459
Van Wert247264
Adams242956
Pike242735
Gallia240550
Wyandot234556
Hocking220162
Carroll196948
Paulding176342
Meigs148240
Monroe136144
Noble135839
Harrison113738
Morgan109624
Vinton85417
Unassigned03
Fort Wayne
Partly Cloudy
60° wxIcon
Hi: 79° Lo: 58°
Feels Like: 60°
Angola
Clear
° wxIcon
Hi: 77° Lo: 55°
Feels Like: °
Huntington
Partly Cloudy
58° wxIcon
Hi: 79° Lo: 55°
Feels Like: 58°
Decatur
Partly Cloudy
60° wxIcon
Hi: 79° Lo: 57°
Feels Like: 60°
Van Wert
Partly Cloudy
56° wxIcon
Hi: 79° Lo: 56°
Feels Like: 56°
It'll be another pleasant day with sunshine and highs in the upper 70s.
WFFT Radar
WFFT Temperatures
WFFT National

Community Events