Big Ford Cuts, AppleCar Secrets Stolen, Costco Fashion Thriving on TikTok

August 24, 2022
Tuesdays are for Troublemakers. Today we cover Ford’s layoff of 3000 workers, the guilty plea of a Chinese former employee working in Apple’s automotive division, and why so many TikTockers are talking about Costco.
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Ford CEO Jim Farley and Executive Chair Bill Ford announced layoffs of 2000 US workers based in its Dearborn, MI headquarters and 1000 contract workers across the globe

  • This constitutes about 1% of Ford’s total workforce and is a move in the direction of cutting more than 8000 positions as announced by Farley back in june
  • Part of a broader restructuring of the company to be more cost competitive in the quickly developing EV space
  • Farley has committed to cutting $3B in expenses by 2026 in an effort to reach 10% in pretax profit

A former Apple employee working on the secretive AppleCar project pled guilty in Federal Court on Monday to stealing trade secrets including downloading circuit board schematics as well as removing hardware from the facility

  • Xiaolang Zhang, faces up to 10 years in prison and a $250k fine after the plea
  • In 2018 Zhang took paternity leave and went back to his home country, China. When he returned, he resigned his position stating he was going to move back to China and take care of his mother.
  • His plan was to work for Xmotors, a leading China EV maker
  • Apple has footage of him removing servers and a chip board from the facility as well as downloading a number of sensitive documents
  • An FBI agent disclosed Apple has 5000 employees on the projects with about 2700 having access to database

Costco fashion deals are going viral on TikTok

  • The search term, “costco clothing finds,” on TikTok has 1.8 billion views on the platform as influencers and regular users are showing off their finds
  • Fashion brands such as Hunter Boots, Tommy Hilfiger, Pendleton, Puma, DKNY, Uggs, Calvin Klein, Fila can be found in Costco aisles at significant savings from regular retail pricing and users are thrilled
  • The ‘treasure hunt’ mentality is strong with this type of shopping and as opposed to traditional ‘treasure hunt’ outlets like Marshalls who may only have a few of each item, Costco stocks a plethora of sizes and colors of each item
  • Costco has a $6.5B clothing business…before TikTok :)

Kyle Mountsier, Paul Daly

Paul Daly  00:20

We got Nashville Kyle this morning. rocking it out. We're talking about Ford cutting jobs. Costco on tick tock. Yeah Costco fashions on tick


tock is topping tags tag Jags at Costco

Paul Daly  00:41

cost nothing says high fashion like Costco brother.


Nothing. That's the top notch. That's the thing. Well,

Paul Daly  00:47

it might be we're gonna talk about that in just a minute. We can't talk about it yet because we have other things to talk about. But I just want to start off by saying, yesterday, you just told me this actually, yesterday, more people than ever in the history of asoto opened our morning email.


Wow, nuts. Isn't that crazy? I love it.

Paul Daly  01:09

We got a barrage of subscribers lately, which has been unbelievable.

Kyle Mountsier  01:13

There's just so much energy and I love it. I'm just happy, happy that more people get to share in the joy of the morning email. Because there's always some good nuggets like if out loud when I proofread it every single

Paul Daly  01:26

day. Oh, no, literally every day when I read it. It's I like, that's good.

Kyle Mountsier  01:32

And then the email today did you write? Is that quite a limerick? Or was it just a rhyme? I don't I'm not. I'm not. I'm not down on my poem.

Paul Daly  01:38

I don't I don't know. I don't know. I literally just wrote the first line because I was like, Okay, I'm gonna write the lead. And you know, Kyle and I, you know, kind of take turns writing the lead for the email depends on who's doing what and you know, kind of a message Okay, can you write the lead can write the lead. So it's really luck of the draw, who writes it that day. And I got, I got the call. They called in the right hander from the outfield, I jogged up to the mountain and I was like, All right, there once was, right. And then it just literally like every single

Kyle Mountsier  02:03

time you start with that you got that literally

Paul Daly  02:06

took me 30 seconds to write

Kyle Mountsier  02:10

the best. He's a poet, and he didn't know I didn't know. You know what else also happened yesterday, Paul, we sold out of the room block at the XFINITY hotel or the live casino and hotel, which is nuts. Because literally, the whole hotel or 94% of the hotel is a Soto attendees, meaning basically, if you're in the hotel, and you bump elbows with someone, they're at asoto standing next to an automotive employee. How cool is

Paul Daly  02:40

that? So even like, look there, we have two hotels for the event. One is like six blocks and one is like eight blocks. So the six block one is the one we bought out the whole hotel recommitted to buy the whole hotel, and now it's booked the other ones only eight blocks away. But that doesn't mean you can't hang out at the closer hotel, because it's a hotel and casino. There's restaurants in there. There's the you know, there's like sports stuff. It's thought, you know, all the usual stuff. That's super exciting. Just to think we're gonna walk in there in less than three weeks. And we're gonna be like, these are all our people. Yes, if you haven't got your tickets, if your dealer there's still tickets available, a soda We want to have you there. The energy is growing, people are reaching out like crazy around this and Monday night's party, Monday night's party, if you just work at a dealership period, you can come for free on Monday night putting on a full night of entertainment. And one of the cool things about the new email subscribers we were just talking about is the majority of them are rank and file dealer import dealership employees. We're not it's not just all managers, which is super exciting, because these are the people that are probably not subscribed to any other automotive publication at all.

Kyle Mountsier  03:51

Yeah, yeah. So if you've joined that community, thank you, because we love having you a part of the community and this is for you like this is this is the whole reason why we do this because we believe that the entire automotive industry should see how good of an industry it is should vibe together should innovate together should push into the boundaries of consumer and employee experience. It's not just for the managers and the executives.

Paul Daly  04:12

And you might not realize this, but the asoto con logo, the CEO N The reason the O is elongated, because it's our mission to draw a big circle around everyone in the industry. So trying to do that as best we can. One of the ways we're doing that is by launching the auto collabs podcast. We have like what 15 episodes out now it's doing amazing. So you can go to auto collabs search that on any podcast platform or go to our YouTube channel. Why a so tube ASO t u dot B E, check out all the video interviews there which is so much fun and we're also live streaming them now to a day on Labor Day. You said we're like the NFL now we have like the noon game and then we have the access high school

Kyle Mountsier  04:53

football every day. Every day and you do a practice you get out late You do a practice and we're just going every single day superphosphate

Paul Daly  05:03

I'm not gonna hit the button. But speaking of Texas high school football, our noon guest Tommy Gibbs is actually a pretty accomplished high school football coach. And when you hear him talk, you're gonna be like, oh, yeah, that's a high school football coach like, yes, it's killing it, kill it. Alright, let's talk about some news into it. So yesterday, Ford CEO Jim Farley and executive chair Bill Ford announced layoffs of 2000 US workers and 1000 contract workers. So 2000 from its Dearborn Michigan Office and 1000 global contract workers, that constitutes a total of about 1% of Ford's workforce. Now they did say if you remember, we covered it back in June that they were going to cut 8000 people. So this is 3000 as part of a broader restructuring, because of the needs of the new Evie ecosystem. You know, Jim Farley is just straightforward. He's like, Hey, we're like, we cannot be competitive on cost, because we're just structured in the wrong way. He committed to cutting 3 billion in expenses by 2026. So this is just I think, another step in that direction. Right?

Kyle Mountsier  06:05

Yeah, it is a step in that direction. You know, it's, it's tough. When you're looking at, like, the volume of employees that are being like, they knew this was coming. This was not like, I mean, it's a surprise if you're one of the ones but as in Oh, it's not a surprise. But imagine living under that stress, for that isn't needed right? Or months ago, he's like, 8000 people are gone. And you're just every single day just fighting to figure out whether it's me. And then it finally comes. And I'm sure you know, there's been a lot that's come out like they're doing a good job at taking care of those people with severance packages, and they're there and things like health care, and even job placement. But hey, look, there's there's a couple things here that I want to comment on. One is that, like, job cuts are never easy, yet sometimes very necessary for a changing business. And this doesn't matter whether it's a manufacturing business or software business or an automotive dealership. I mean, we saw automotive dealerships have to go through layoffs and early pandemic, right. I mean, this is not an easy decision. I know that that. Like, it may seem flippant, but it's not easy. So recognize that, that that's just the reality of it. And employers, I think are doing their best to care for every employee in the best way possible. And then the other piece of this is like, these probably BS people are probably all over LinkedIn. And they and they know automotive manufacturing, and they probably love the industry. So go hire them. Hey, people up today, if

Paul Daly  07:35

you happen to be me or know anyone who has been laid off, send them our way, just email us or send us a DM because we will find a way to connect some dots, get them some exposure, maybe even have him on the show. Now people show you should

Kyle Mountsier  07:50

do like speed dating for Dearborn, Michigan Ford employees for that all the dealers and industry partners would be perfect. Consider What's your name? What have you done?

Paul Daly  08:00

It sit her down. Okay, next. So, it I love this line. So this is from the we cited two articles in the story. One is Wall Street Journal. One is Automotive News. And the automotive news one says in it a letter obtained by automotive news and I just stopped right there. I was like, I want to obtain letters and letters. That sounds awesome. I can't wait to a Soto's obtaining. Actually we've obtained a few letters, we I thought I thought that was just like obtaining that that word like I want to obtain information. So if Hey, by the way, if you have any information in automotive that you want to like, get out, we will. We will. Once it's obtained by us, it's in good hands and we will

Kyle Mountsier  08:40

obtain it's a weird word now. A pain

Paul Daly  08:42

updating and we promise if we ever obtain information from you, we will promise to associate the appropriate gift to whatever it is that we obtain. Jim Farley said none of this changes the fact that this is a difficult and emotional time. The people leaving the company This week our friends and co workers and we want to thank them all for what they've contributed to Ford we have a duty to care for and support those affected and will live up to this duty providing not only benefits but significant help to find new career opportunities. Kyle that's your first point. Jim Farley understand that change takes strong leadership empathetic leadership, caring leadership. And you know, we hope that it continues that they you know, adapt serve the industry well provide dealers with great product to meet the demands of the changing future while taking care of the team that got them there. Speaking of I don't know I guess this guy got taken care of speaking of taking care of the team Oh former got you know,


he got you got taken care of took care of this guy.

Paul Daly  09:48

A former Apple employee working on the secret of Apple Car project pled guilty in federal court on Monday to stealing trade secrets including downloading circuit board schematics as well as literally Removing like servers like an actual like Linux server from the property. I don't know if you realize but they had like,


Miami security, didn't have cameras.

Paul Daly  10:11

He got it out of the building. Right? It didn't get stopped. I mean, there's not too many people around. They're trying to get people back if you may have heard, but I'm, I'm going to need help with this pronunciation. I'm not going to be yelling, chalets up the tent, jelling, Jiang young, might be young, somebody can help us with his faces up to 10 years in prison, and a $250,000 Fine. After the plea in 2018. He took paternity leave, went back to his home country, China, when he returned, he resigned his position that's not suspicious. Say he was gonna go back to take care of family. But he planned to work for X motors, who is the leading Chinese Evie maker. And again, Apple has footage of him removing a chip board from the facility and downloading a number of sensitive documents. And here's a little piece of information that we didn't have about the project that this is kind of uncovered. An FBI agent said that Apple has 5000 employees working on this, you know, the automotive project with 2700 Having access to the databases, we're

Kyle Mountsier  11:11

not making a car in air quotes, right?

Paul Daly  11:15

Come on, what do you think? What do you think this is? We're going to finally find out something about that.

Kyle Mountsier  11:20

I honestly think we're still two years away from it.

Paul Daly  11:24

So you're sitting there running 25? Yeah, because I'm running for

Kyle Mountsier  11:27

about like, the way that the iPhone followed, like a Blackberry, right? If you think about like a smartphone, or a now they were the first obviously with this touchscreen technology. So what happens the way that Apple continually innovates is they're not actually the leader in the general space, they're the leader in this specific space. Yeah. And so my guess is that they're kind of what they do. And what they've historically done is they watch kind of everyone unfold kind of the table stakes,

Paul Daly  12:01

and they say, this is what you really meant to do. Right? This is what you really were trying to

Kyle Mountsier  12:05

do. Exactly. And so like you think about Blackberry, you know, what is it mid late 90s kind of came on the screen scene with a more robust phone, and then not till 2005 or six, did the well, six or seven, right? Did the iPhone come out. And so you've got like a 1011 year gap on kind of smartphone technology. But then they came in with something nobody had touched yet, which was the touchscreen. And so my perception of this is, is that there's going to be this 1011 year gap, which is like mid mid teens was really when Tesla's Tesla hit off, right? Yeah, making and now you're gonna see Apple come in with all of the table stakes of every other manufacturer. And then they're going to come with something that nobody was expecting. And that's what

Paul Daly  12:52

trying to think now. Like, what would be those things? I think that if they can figure out how one

Kyle Mountsier  12:58

knows, no one knows. Because Because yeah, hydrogen, because here's the thing.

Paul Daly  13:02

That'd be crazy if it was hydrogen,

Kyle Mountsier  13:04

because in 2002 Would you have ever been like, Man, I know Apple's gonna come with a touchscreen phone in three years. No one has ever said that. Right? Oh,

Paul Daly  13:15

like they're also man. But there's so many other people making cars and there were maybe not I don't know. Hey, I think that they'll probably figure out a way to integrate it with your life and your ecosystem in a really seamless way. I can see them like having delivered like some kind of like you know the the MagSafe charger Puck, right but one that goes into your garage or your parking lot You just drive over and it charges the car you don't have to think about it. I don't know

Kyle Mountsier  13:39

at a minimum I'm walking up to my car with my Apple Watch on and that things that things turning, turning on starting turning on and yeah, yards right for sure. Welcome, Kyle. Yeah, hey,

Paul Daly  13:50

it's done. I'm still waiting for Tesla to make a phone. That'd be the great thing if we didn't figure it out and test was like yeah, here's the phone. Honestly, if anyone did a good job with it, satellite connected. Okay, go. It'd be a lot of fun. But speaking of

Kyle Mountsier  14:05

having a lot of fun. Yeah.

Paul Daly  14:07

Segway people have a lot of fun on tick tock and now Costco fashion deals are going viral. The search term Costco clothing finds you can try it right now. The hashtag on Tik Tok has 1.8 billion views on the platform as influencers and just regular users are showing off their finds you can find fashion brands like Hunter boots, Tommy Hilfiger Pendleton, I've been seeing a bunch of Hurley stuff in there lately, it's wild are finding the way they're, I mean, they're capitalizing on the treasure hunt mentality. You know, like Marshalls made popular and a lot of the let's see what I can find except Costco has like every size and color options that literally

Kyle Mountsier  14:46

the nicest winter jacket I have came from Costco and you would have never expect at $3 Literally no, not a joke. It was $75 I went and looked at it retail elsewhere was over 100 and $60? Well, just because Costco has the volume and like, it's not a brand that you would expect, it's one of those. I can't remember the brand. But it's essentially like the way I would perceive it as like it's one of those brands that you only find out because it became an Instagram ad, right? Yeah. But it's a high class brand that you see everywhere. Your Costco caught it and caught a volume discount, and boom, I got a $75 winter jacket in the middle of winter. And I think that these things are, they're everywhere within there. What's so surprising what I love about like, the treasure hunt mentality is if you've ever been to a Costco or even a Sam's Club, and you go to that, like clothing aisle, if you like, if you just do like that first quick glance at it, like that's a bunch of cheap clothes, what a mess. Because the way they're layered and the way they're stacked and all that type of stuff. You just wouldn't expect anything that nice to be in there. So I love this, like, oh, no, if you go start digging, you're gonna find some really cool

Paul Daly  15:54

so you don't have to dig either. It really is much more organized than it looks right. You walk through the aisles, you start seeing brand names. You're like, dang, dang, dang. I mean, the Hunter boots got me I remember seeing those. And like I bought my wife a nice pair of Hunter boots one and they're expensive, like 150 bucks, or even at 75 bucks. And it was literally the same ones for $75. And I like picked that thing up. I was like, this can't be the same thing. But Costco has got like a crazy commitment to quality and like that's why people trust Costco. Like if it's there, you just assume that it's quality because they're sticklers about that. And you can return anything at any time for any reason at Costco. So smart. Yeah, so hey, if you have a Costco near you go check it out. See for lying or not 1.8 billion people on tick tock couldn't possibly be wrong, because people in tic tac are never wrong. Oh, look, you can't go wrong today with going out there and serving some people. Draw your own little big circle around everybody in your store your company and let them know that you need them to come closer

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