Pendragon has announced a plan to axe 1,800 jobs from its UK car retail network as part of a bid to create a “leaner and more sustainable operating model” in the wake of the COVID-19 crisis.
The former AM100 top-ranking retail group will initially close a total of 15 dealerships (7 freehold and 8 leasehold) as a result of a review of its operational structure, it revealed in a statement issued via the London Stock Exchange today (July 30).
But wider-reaching proposed changes to its car retail operating model are expected to result in a total of around 1,800 redundancies in an effort to save £35m – a process which will command an estimated one-off cash restructuring cost of approximately £5m.
News of the changes comes just weeks after a Pendragon spokesperson denied that any large-scale redundancies would be taking place at the group after consultation opened over “a small amount of leadership roles”.
Commenting on the changes to the business announced today (July 30), Bill Berman, Pendragon’s chief executive, said that its restructuring proposals “reflect our intention to create a resilient, leaner and more profitable business across the entire group”.
He said: “These have been difficult decisions for the board to make and our priority now is to manage the transition to our new operating model.
“The COVID-19 pandemic is a uniquely challenging situation and we want to protect as many jobs as we can sustainably and the proposed redundancies are, of course, extremely regrettable.
“During the pandemic we have focused on ways to improve workflow, efficiency and our digital capabilities.
“It is paramount that we embed these behaviours into all areas of the business, as we expect the economic environment to remain challenging.
“The actions that we are undertaking are for the long-term health and success of the group and ensure that we emerge from the pandemic as a more competitive and stronger business with the ability to thrive in the future.”
Pendragon said it planned to close 15 of its car retail locations which had been predominently loss-making and had made an operating loss before tax of over £2m in 2019.
Around 400 redundancies are expected from the 15 locations with estimated one-off cash redundancy costs of £1.2m and closure costs of approximately £1m.
There will also be associated lease and asset impairment charges of approximately £5.5m.
In March Pendragon reported a £117.4 million loss after tax (pre-tax loss £16.4m) from 2019 trading, due to “significant H1 losses”.
Last month it revealed that COVID-19 disruption had wiped out almost £10m operating profit at its franchised dealerships before the end of March.
Underlying operating profit at Pendragon’s franchised motor division, which includes the brands Stratstone and Evans Halshaw, was £4.4m, a decline of £4.7m versus Q1 2019.
Its Car Store division of used car supermarkets, which was radically rationalised in 2019, reduced operating losses from £7m in Q1 2019 to £1m in Q1 2020 and improved gross margin from 7.4% to 8.0%.
Berman, who completed an in-depth interview with AM ahead of the COVID-19 crisis, added: “I would like to take this opportunity to thank every one of our employees for the hard work that has been done to reopen our businesses from lockdown.
“I am proud of the essential work we undertook to assist key workers during lockdown and for the way we have served our customers in store and online during these difficult times.”
GM Debuts Even Quicker Fourth-Generation Magnetic Ride Control
It’s been almost 20 years since Cadillac first introduced their nifty MagneRide technology on the Cadillac STS Seville, and, at the time, was pretty groundbreaking stuff, offering technology that would adjust and adapt suspension components of a vehicle in real-time in response to changes in terrain. Now on its fourth generation, MagneRide 4.0 gets a number of substantial upgrades across the board making it, in Cadillac’s own words, the world’s fastest reacting suspension technology. And with up to 45% faster damping response than the third generation, we kinda believe that claim.
According to Cadillac, these are the most dramatic changes yet to the MagneRide system yet, and will elevate the driving performance and road-going comfort of the 2021 Cadillac CT4-V, CT5-V, CT5 Sport, and Escalade. “With MagneRide 4.0, the world’s fastest reacting suspension system is now even faster,” said Thomas Schinderle, Cadillac vehicle performance engineer. “When paired with our sedans’ award-winning rear-wheel-drive architecture, the result is two of the most responsive sport sedans on the market, with reflexes that elevate the already high threshold of the V-Series legacy.”
MagneRide is an active damping system that literally uses electromagnets and magnetorheological fluid to help vary the damping rate of the shock absorbers. Wheel accelerometers read the road up to 1,000 times a second, triggering adjustments in the magnetic charge in the fluid. This fluid then adjusts the shocks almost instantly, allowing the vehicle to better respond to different road surfaces and corners, maximizing the traction on the road at all times.
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Every facet of the previous MagneRide system was improved to create version 4.0, with new wheel hub accelerometers, an inertial measurement unit that processes changes four times faster and is more precise, new temperature maps for the fluid, new flux control to provide more consistent and more accurate changes between rebound and compression, reduced damper friction for more pronounced differences between drive modes, and new software and hardware to help the vehicle remain more level when transitioning through corners.
MagneRide 4.0 comes standard on the 2021 Cadillac CT4-V in rear-wheel drive and CT5-V and starts at $45,8901 and $48,7901, respectively. The 2021 CT5 Sport can get MagenRide 4.0 as part of an optional V Performance Package, plus suspension performance upgrades and a mechanical limited-slip diff. The 2021 Cadillac Escalade will have MagneRide 4.0 on the Sport and Platinum models as standard, which starts at $86,8901 and $101,2901, respectively. The Premium Luxury trim may get MagneRide 4.0 as part of an optional Performance Package.
BMW Gives Android Auto, Other Freebies To 750,000 Owners In OTA Update
In 2012, Wired reported that Tesla would deliver the auto industry’s first over-the-air (OTA) update to more than 100 Model S sedans. Fast forward to 2020, and BMW has announced it’ll deliver a free OTA update to more than 750,000 cars in markets worldwide. BMW OS 7 and the Remote Software Upgrade tech allow the automaker to update existing features while introducing completely new ones, like adding wireless Android Auto for the first time.
Google’s in-car connectivity software joins Apple CarPlay that has already been available in BMW models, though there’s a lot more included in the update. BMW is updating its proprietary map software for an “entirely new navigation experience.” BMW says its cloud-based system can calculate routes faster by combining real-time info with forecast models. Even CarPlay gets some love with turn-by-turn directions and lane information that’s now viewable in the head-up display. Oh, and there’s no mention of an Android Auto subscription.
BMW’s other new features try to make the driving a bit less frustrating. BMW’s Connected Parking, which helps drivers find parking spots and shows the probability of a spot being open, can now consider the vehicle’s size when assisting. BMW’s eDrive Zones can automatically switch the vehicle to its pure electric driving mode through geofencing. So far, 90 European cities have established such zones. Even BMW’s Intelligent Personal Assistant is a bit smarter, distinguishing between whether the driver or passenger is speaking.
OTA updates for cars didn’t exist a decade ago. But today, BMW, Ford, GM, and others are offering it, or they will be offering it soon. It is just one example of how pure vehicles are changing, highlighting their rapid digitalization and increased connectivity, enabling a host of new and interesting features. Pair that with electric vehicles, and you have a rapidly changing automotive landscape. All you have to do is download it.
VW Uses Engine Rev Hang To Cut Emissions
It has been almost a year since Volkswagen introduced the eighth-generation Golf – the latest version of VW’s best-seller. While a lot can be said about the Golf’s design, one of the great things about it is that it still can be ordered with a 6-speed manual transmission. For enthusiasts and purists, that’s a huge thing, considering that only 12 percent of new models in the U.S. are offered with a stick shift.
But as with most modern cars, the latest VW Golf has an engine rev hang, which is most noticeable in cars equipped with a manual gearbox.
Douglas Skorupski, Volkswagen of America, Inc.’s powertrain strategy manager, has a good explanation for this, as reported by Autoweek. According to Skorupski, the engine rev hang cuts the Nitrous Oxide (NOx) emissions of cars.
“As you pull your foot off the throttle, what we are trying to prevent is a big hunk of air getting into the chamber without any fuel. If air gets in that way, when you do reapply throttle, it creates a lean condition (a higher than 14.7:1 air-to-fuel ratio), which generates nitrous oxides or NOx. By delaying the fuel cut-off in the cylinder, we get some fuel in there with the air to keep the mixture correct and avoid the lean condition and prevent the NOx from occurring,” Skorupski said in an explanation in Autoweek‘s report.
Engine rev hang isn’t actually limited to the VW Golf. Most modern cars are equipped with electronic throttle bodies, resulting in the catalytic converter’s better control of air/fuel ratio balance and improvement of throttle control. But the use of this technology also ushered in engine rev hang, especially felt in manual gearboxes since you’re in full autonomy.
While it can be intrusive for some, it’s good to know that engine rev hang has a positive environmental effect – no matter how marginal it sounds.
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