Volkswagen names new chief engineer in Chattanooga and other business news

May 22, 2023

New VW chief engineer set for Chattanooga

Volkswagen is accelerating its engineering and research and development capabilities in the North American region with a new hire who will oversee the development and launch of future vehicles from Chattanooga.

Lyndon Lie will serve as chief engineering officer for the region, the German automaker said in a statement Thursday.

Lie will build on his extensive leadership experience at General Motors and Nikola Corp., the statement said, with duties to include the design, development and launch of multiple battery electric vehicles, as well as developing and launching advanced driver assistance systems.

"Lyndon brings incredible experience to the Volkswagen brand, which will help us achieve our goal of growing our market share across North America in this decade," said Pablo Di Si, president and CEO of Volkswagen Group of America. "Designing and engineering our vehicles to meet the unique needs of our markets is more critical than ever before. To achieve this, we continue to take proactive steps to strengthen our capabilities and experience within the North American market."

Developing innovative mobility products that deliver value to an ever-changing market is a passion and naturally aligns with where Volkswagen is heading, Lie said in a statement.

"The opportunity to apply my professional background to Volkswagen's engineering and R&D legacy empowers us to develop technology-forward solutions that excite consumers," he said.

Hyunda, Kia recall 92,000 vehicles

Hyundai and Kia are telling the owners of nearly 92,000 vehicles in the U.S. to park them outside because an electronic controller in an oil pump can overheat and cause fires.

The affiliated Korean automakers are recalling the vehicles and also are telling owners to park them away from structures until repairs are made.

The recalls cover certain 2023 and 2024 Hyundai Palisades, as well some 2023 Tucson, Sonata, Elantra and Kona vehicles. Affected Kias include the 2023 Soul and Sportage, as well as some 2023 and 2024 Seltos vehicles.

The companies say in documents posted Thursday by U.S. safety regulators that a capacitor on a circuit board in the oil pump assembly for the transmission may have been damaged by the supplier during manufacturing. That can cause a short-circuit and increase the risk of a fire.

Kia says it has six reports of melting components but no fires or injuries. Hyundai says it has confirmed four "thermal incidents" and no injuries.

Dealers will inspect and replace the oil pump controller if necessary. Hyundai owners will be notified by letter Sept. 25. Kia will notify owners starting Sept. 28.

Adidas Yeezy shoes boost quarterly profit

Adidas brought in $437 million from the first release of Yeezy sneakers left over after breaking ties with Ye, the rapper formerly known as Kanye West, as the German sportswear maker tries to offload the unsold shoes and donate part of the proceeds to groups fighting antisemitism and other forms of hate.

The first batch of shoes released in June, which sold out, helped the company reach an operating profit of $193 million in the second quarter, better than it originally planned, Adidas said Thursday. A second sale started Wednesday.

After Ye's antisemitic and other offensive comments led the company to end its partnership with the rapper in October, Adidas said it had sought a way to dispose of $1.3 billion worth of the high-end shoes in a responsible way.

"This is much better than destroying and writing off the inventory and allows us to make substantial donations to organizations like the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change and Robert Kraft's Foundation to Combat Antisemitism," Adidas CEO Bjorn Gulden said.

30-year mortgages rise to 6.9%

The average long-term U.S. mortgage rate rose again this week, bad news for Americans seeking to upgrade or buy their first home.

The average rate on the 30-year home mortgage rate ticked up to 6.9% this week from 6.81% a week ago. A year ago, the benchmark home loan rate stood at 4.99%, mortgage buyer Freddie Mac reported Thursday.

The average rate on 15-year, fixed-rate mortgages, popular with those refinancing their homes, climbed to 6.25% from 6.11% last week. A year ago, it was 4.26%.

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already overpriced for many Americans.

High inflation has driven the Federal Reserve to raise its benchmark interest rate 11 times since March 2022. Its Fed funds rate has hit the highest level in 22 years.

Inflation has come down steadily since last summer, and many analysts believe the Fed has reached the end of its rate hikes.

Mortgage rates don't necessarily mirror the Fed's rate increases but tend to track the yield on the 10-year Treasury note. Investors' expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

Jobless applications up in the past week

The number of Americans seeking unemployment benefits rose slightly last week but remained at a historically low level that points to a robust job market.

Applications for jobless aid rose 6,000 to 227,000 for the week ending July 29, the Labor Department said Thursday. The four-week moving average of claims, a less volatile measure, fell 5,500 to 228,250.

Jobless benefit applications are seen as a proxy for the number of layoffs in a given week. Thursday's report comes just a day before the July jobs report will be released, which will provide a broader and more detailed look at the labor market and economy.

Economists forecast the report will show employers added a solid 200,000 jobs last month, while the unemployment rate will be unchanged at 3.6%, near a half-century low.

The Federal Reserve has implemented 11 interest rate hikes in the past 17 months in an effort to cool the economy and combat inflation. Yet hiring has remained stubbornly strong, and layoffs — despite high-profile job cuts at many tech and media companies — have stayed unusually low.

Compiled by Mike Pare