Insurance Rises, F-150 Lightning Drops, Pentagon Goes Solar

Paul J Daly: 0:00

Good morning, everybody, Monday Freshers Week in automotive, it's January 20. Today we're talking about insurance rising f150 Lightning production dropping in the Pentagon going solar. The people really want to know, I did some calculations on that last.

‍Kyle Mountsier: 0:33

You did do some calculator. You did do some CAC. I was impressed because normally you're not the calculator guy. Normally that's me for counting it out. But then I see all these decimal points and everything this morning. I'm like, okay, yeah, I'm

Paul J Daly: 0:47

a practical. I'm a practical approval point calculator guy. Right. That's what it is. I gotta prove a point. It's yeah, so So tell me this, that a lot of the South has been under snow and cold weather. I slept. Paul last week. Hold on. I have a question. I have a question. Because I saw an amazing post. And last week, when we were at the public policy show in DC, you flew home from DC to Nashville, and then stayed in a hotel next to the airport because I could not drive home. Which is

Kyle Mountsier: 1:14

which I'm glad I did. Let me be clear, because literally, everything was fine. Except for once I got to my neighborhood. And the problem with neighborhoods is here in Nashville, there's no salt. There's no trucks. There's no nothing like that. Right? So for three days in sub 20 degree weather, all that was happening was packing and packing were shut down. And you know what that makes? Absolutely makes ice. Ah, it took me like 10 minutes to get home and another four minutes to get through my neighborhood just because like it was just a little bit dicey. That's

Paul J Daly: 1:50

I saw a post from a guy who lives in Nashville. And he's a satire writer and an author and a speaker's name's Jonathan Acuff, and he said he lived in the Northeast, and now he lives in Nashville. He's lived there for years. He said. He said, the difference is in Nashville. He goes, we the whole plan for snow is in a binder, he said, and when you open it up, there's just one page in there. And it's a picture of the sun.

Kyle Mountsier: 2:15

That's it. That's it. So we got so we have sun coming today. It's supposed to be 40. And this notion start to go away. And then it rains tomorrow, and then we're good. Yeah, that it's all over. It's all legit. Saturday, my family and I it was the worst on Saturday, right? Because it like it got even more cold and people packed it down more. And so by Saturday, literally where it so we live on a hill like this type of slope, right? And literally, we're just watching like SUVs and trucks. They just start down and then they just go like,

Paul J Daly: 2:50

let's just lock and they're just locked. I feel like there's like orchestral music that it was gonna make a great tic tac video. So wherever you are, we hope you're warming up a little bit up here in the Northeast. We're good because there's salt. Right? But it's it's 25 degrees and it feels like it's like 55 Now, it was like seven over the weekend. We know a lot of you had the same scenario. Oh Doug Good morning on the live stream go lions like it was a big weekend. I feel tired because the lions made it made it through Heart team now. I feel like auto team auto right. It feels like a win for auto and like Sheila Ford is up there team owners she turned the team around. Like, I feel like this is an automotive story. And you know, we have a lot of friends who were Bills fans. And I'm sure you know we have a lot of friends that are chiefs fans and yet but I think I think for me it's alliances from now on.

Kyle Mountsier: 3:36

Yep. Did you see well did you I sent you the Instagram post Did you see the them them chanting the same song that we had everybody complete the lyrics to it MRC.

Paul J Daly: 3:48

Oh, was that what it was? Yes, yes.

Kyle Mountsier: 3:52

So

Paul J Daly: 3:54

it's been they knew that words. They knew the words words, hey, covenant hot NADA coverage is going to be a thorough and more than it's ever been. We hope you tune into our coverage for NADA, just 10 days from now we're going to start on the ground on Thursday the 31st We're gonna be all over the place at all the events, trying to bring you some insights from the from the field, some insights from what's going on on the floor. Hey, and by the way, if you're having an after party for companies having an after party, make sure you go to ASOTU.com and just scroll down a little bit, you'll see a link we want you to add your after party. We have a whole directory of all the after parties happening and we need your party to be on there. So make sure you check that out. Let's get in some new showers do it about for two but first, and 2023. The auto industry faced a wave of soaring rates with the 10 largest insurers in the US implementing not one but double digit increases shaking up the market. The trend the trend is attributed to higher claim frequencies severity is including more severe crashes, more litigation around claims and losses from weather and theft. Farmers Insurance led the charge 17 points 6% average increase across 43 States, American Family and USAA huge insurer right hike their rates by 17.5% and 16.9% respectively. Other major players nationwide nationwide StateFarm also crossed the 16% threshold, Geico and Allstate. I'm happy because I'm all stay MGS, the biggest rate rises in 2022. They ended 2023 With comparatively lower increases. So the state of Nevada highest rate increase at 28.3%, while states like North Carolina and Colorado saw rates under 5%. So a lot changing Thanks, Steve Greenfield put this story in his Monday email, which I was like, let's talk about.

Kyle Mountsier: 5:44

Look, we all we talk about in the industry is affordability due to pricing and interest rates. But in insurance is a massive portion of affordability. How many times sitting on the showroom floor selling a car, someone says Let me check my insurance on this car. And so as we see the changes in monthly payments on insurance change that's also going to impact all of the affordability at the vehicle level. And

Paul J Daly: 6:09

so we stack eg on top of that. Stacie V because we were always talking about like EVs being more expensive to insure because repair costs are way higher, and a lot of the unknowns, right. So I don't know. You know, from an insurance and affordability standpoint, there's nothing really we can do about this except, be aware about it. Be aware of it.

Kyle Mountsier: 6:31

Yeah, just don't let people from Michigan drive everywhere else in the country.

Paul J Daly: 6:34

Oh my gosh, all the way speaking of people from Michigan

Kyle Mountsier: 6:42

so I wouldn't have a problem with Michigan.

Paul J Daly: 6:46

That's okay. Ford Motor Company announced an adjustment in their Evie strategy scaling back production of the F 150. Lightning due to decreased demand while simultaneously ramping up. Its focus on the Bronco and the Ranger. Not surprisingly on Friday, they announced the reduction affecting 1400 workers from with a shift from two to one at the rogue electric vehicle Center. In April, or from April moving forward, the company plans to reallocate 700 of the workers to its Michigan assembly plant where they are increasing the production of the Bronco and the Raptor. Despite the shift, they did sell 24,100 lightnings and 2023, which was a big jump from 2022. But as you know, we've all been talking about that big plateau. Their restructuring is part of balancing their lineup right gas powered hybrid and electric sounds really familiar Toyota, we're taking Here's a quote from Ford CEO Jim Farley says we're taking advantage of our manufacturing flexibility to offer customers choices while balancing our growth and profitability.

Kyle Mountsier: 7:53

I mean, is this the part where we all just laugh is? Okay, so here's my commentary on this kudos to them for jumping in and saying, Hey, let's move these places from one to the next, we've got opportunity to produce more of the vehicles that everybody's wanting out there. So let's be flexible and head in that direction. I can't imagine being one of these manufacturers putting all of my eggs in one basket in 2023. And in 2024, having to adjust that in like spades. And then you see, with Ford and even GM putting up these brand new plants that are just supposed to handle EVs, to 4000. Job manufacturing plants, what are they going to do with those when those are set to come online? Will they see the demand ready? Or are they going to have to retool those factories to appropriate the demand still on the ice and hybrid vehicles?

Paul J Daly: 8:48

I mean, it's a massive squeeze play that a lot of the American automakers had to take on. I think there's probably more pressure on a Ford to lean in on the Evie because they're located here in the States. There's a lot of governmental pressure on EVs, and like, let's face it, like everyone's given them a lot of flowers when they're making these decisions, when it really is a gigantic bet not driven by consumer data. Now they find themselves in this position. And and all these plans in motion. Man, it'll be interesting to Iraq, actually, you know, has a little bit of an advantage here, I think because they are not centered in the country. They do take a broader global perspective. And, you know, so I don't know, I think it's a little mixture of being excited about the attention at the time. Right. And absolutely. And now it's just the consumer, guess what the consumer always wins. The consumer does, and they're winning now. But speaking of speaking of Energy, speaking of solar, speaking of renewables, speaking of electric I don't know if we're winning or not, but just speaking of the government got their

Kyle Mountsier: 9:53

wedding and the US Department of Defense is set to install rooftop solar panels and heat recovery. Um, heat pump system at the Pentagon targeting a drastic cut and fossil fuel dependence. So they're playing their part ladies and gentlemen, these installations are expected to cover over 95% of the space and hot water heating needs previously fueled by natural gas and oil. So the Pentagon, here's some, here's a little bit of data, the Pentagon has over 6.6 million square feet of space so crazy. They're aiming for net zero and they project doing all of this work with the solar panels and the heat recovery heat pump system will give an annual savings of $1.36 million. It's a part of a grant under the DOD, the Department of Energy's effect program, so that using the government program for the government, you know, I'm saying that it's 100. And it's, no we're not spending any of our money, it's their money,

Paul J Daly: 10:57

which is our money, which is all your money. Right, exactly.

Kyle Mountsier: 11:00

But you know, the 1.3 6 million, you know, they're they're saving more than that, then the grant is worse. So that's good. And, you know, we'll go with that. So it's $104 million grant usage as a part of the project. Here is a quote from deputy Deputy Secretary of Defense Catherine Hicks, she says, by rethinking how we generate, distribute and use energy, the Department of Defense is making our installations more resilient, better securing our critical infrastructure and saving money, when for warfighters and taxpayers alike. I will say one thing about this, the Pentagon, roof space is ginormous. And there is no shade around that thing. So I think plenty of opportunity.

Paul J Daly: 11:45

We flew over it when I was coming into the flight into DC and I'm always amazed I've been in it before I went on the Pentagon tour before they locked that sucker down tight like is pre COVID. It was amazing. It was amazing. And then the guy does walk backwards the whole entire time keeping his eyes on his group up the escalator never turns around, always looks at you while he's walking backwards and given the tour. But the the thing is with the Pentagon and the government, like it makes sense from a security standpoint that That sucker is self sustained. Right? I think that that that's probably the best argument. But when you think of it this way, I just did did a little more math. So we figured out the energy cost and what it costs to heat a an average commercial building, and I'm sure the Pentagon costs more, and you got to think about like the 18 layers underneath the building that we don't know about. Um, so here's the deal. It's gonna save 1.3 6 million a year. Got it. Right. And as a grant of $104 million, which is still your money. It will it'll be a 75 year ROI, hey, energy costs.

Kyle Mountsier: 12:42

We shouldn't be around that long. You know, I

Paul J Daly: 12:45

don't think so. I won't be around. I doubt it. I doubt I'll be a

Kyle Mountsier: 12:49

pentagon hopefully

Paul J Daly: 12:50

is around that. We'll be around that. Like our grandkids might Yeah, our grandkids will just start to see that little bit of art. Oh, this kind of a wonky Monday episode.

Kyle Mountsier: 13:02

what a what a Monday.

Paul J Daly: 13:03

I think this Monday does it Welcome to Monday's everybody. The bottom line is whatever you're out there doing. There are things that you can affect right now. Right now because you work with people, you serve people. So go out and serve people make it about so much more than cars. We'll see you tomorrow.

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