Episode 501 – Volt Battery Workers Join UAW, CUVs #1 in U.S., Toyota R&D Questioned

October 18th, 2010 at 12:09pm

Runtime 8:06

Employees at GM’s plant that makes batteries for the Chevrolet Volt decided to join the United Auto Workers union. The CUV segment is the most popular in the American market for the second-consecutive year. Ralph Nader questions R&D spending claims Toyota made in some of its advertisements. All that and more, plus a look at the design of the 2011 Kia Optima.

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This is Autoline Daily for October 18, 2010. And now, the news.

VOLT BATTERY WORKERS JOIN UAW
In a development that will be watched closely by labor experts, employees at GM’s plant that makes batteries for the Chevrolet Volt decided to join the United Auto Workers union, but they did this with a very controversial card check, not by an election monitored by the National Labor Relations Board. In the United States unions have been pushing legislation to allow card checks instead of elections that use voting booths where workers can vote in private. They just want workers to sign a card instead. Despite strong support amongst Democrats, including President Obama, this legislation has never been brought to a vote, because Democrats are afraid to bring it to a vote, because it would almost certainly fail. The DetroitBureau.com reports that General Motors agreed to card checks in its last labor contract. Besides, there was no way GM could protest this, after all, the UAW is the second-largest shareholder in the corporation, after the federal government.

UAW PROTESTS WORRY INVESTORS
Now, the AFP reports that problems with the UAW are starting to make investors nervous about buying stock in General Motors when the company goes public. This includes nervousness of workers protesting the need for lower wages to make small cars profitably in the United States. It quotes one analyst as saying GM has a long history of destroying shareholder value and that the hourly workers don’t seem to be aware of the need to be competitive. I would point out that this is not what GM needs as it prepares to start selling stock again, probably within a month.

CHINA’S OVERCAPACITY CONCERNS
Last week we reported that even though car sales are up in China, they are starting to slow down. Now the AFP reports that China’s National Development and Reform Commission is concerned about overcapacity. By 2015 China’s 30 largest manufacturers are projected to have production capacity of 31 million units which is double the current number. Automakers say that sales will hit 30 million by then, but the NRDC doesn’t think that will happen.

CUVs #1 IN U.S. (subscription required)
The CUV segment, which is short for cross-utility vehicle, is the most popular segment in the American market. According to Ward’s, nearly a quarter of all vehicles sold during the 2010 model year, which runs from October to September, were a CUV, totaling 2.7 million units. It’s the second consecutive year CUVs were the top seller. Coming in second place were midsize cars and rounding out the top three were small cars.

MITSUBISHI CONSOLIDATES U.S. LINE-UP (subscription required)
It’s no secret that Mitsubishi is up against the ropes. The automaker’s U.S. sales have declined 3.4 percent so far this year compared to 2009, though its market share has stayed the same at a whopping HALF a percent. In response to its tepid sales, Ward’s reports that the company plans to trim its product lineup down to just the Lancer and Outlander, both of which are imported from Japan. To me this suggests that Mitsubishi will be closing its only North-American factory, located in Normal, Illinois, where it builds the Eclipse, the Galant and the Endeavor.

TOYOTA R&D SPENDING QUESTIONED
Ralph Nader has another automaker in his sights. This time Toyota has a bull’s eye on its back. USA Today reports that the tireless safety advocate sent a letter to Jim Lentz, the company’s U.S. sales chief, questioning some of its advertisements where it claims to be spending a million dollars an hour on research and development. Nader did the math – and so did we. At 24 hours a day, 365 day a year that works out to nearly $8.8 billion. But Autoline Daily discovered that’s the R&D number from two years ago. Today, Toyota is spending $1 billion less on R&D, about $7.8 billion a year.

The Hyundai Sonata is selling like crazy. And now Kia, the sister company to Hyundai, is getting its version of the car. We’ll show you what it’s about, right after this.

2011 KIA OPTIMA
The new Kia Optima sure doesn’t look like the old Kia Optima. We asked Ralph Tjoa from Kia to take us through the car and show us what it’s all about.

The Kia Optima is yet another example of the design work of Peter Schreyer, the new head of design at Kia who was hired away from Audi. Pretty good looking car.

Don’t forget to listen in tonight for Open Line, where you can join in on the conversation for the biggest party-line in the world. That’s tonight starting at 8 p.m. Eastern Time.

And that’s today’s report on the top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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37 Comments to “Episode 501 – Volt Battery Workers Join UAW, CUVs #1 in U.S., Toyota R&D Questioned”

  1. Drew Says:

    New Kia is pretty nice, but I would improve the front grill design, scrap those ugly flat wheels, and eliminate all those buttons on the steering wheel.

  2. Dale Leonard,Lakewood Ohio Says:

    Hi John, My question is how many more auto plants have to close before the UAW workers get it through their heads that working for 40% less money is better then not working at all? When is the greed going to stop? The economy is stiil far from stable and the whole industry could still implode at any minute in this country.

  3. Phoenix Mark Says:

    With China corning the market on rare earth metals and the GM battery plant going union, it won’t be long before battery production moves to china.

  4. LEX Says:

    All this Chinese Automotive Manufacturing Overcapacity can be easily converted to War Time Manufacturing Capacity, Food for Thought!

  5. pedro fernandez Says:

    Optima, Sonata, Volt, all plasticky crap with a lot of electronics, give me a 93 Camry any day, thank you very much.

  6. steve s Says:

    card check is just another reason Obama and the UAW must be stopped. our industrial capacity depends on it. do this country a favor and don’t give a dime to either of them. they are killing blue collar America.

  7. dcars Says:

    Ouch! Pedro is looking for some fire works! The UAW did pass a contract to get lower wages at factory so you have to give them credit for that. A shot was fired across they’re bow by the picket at their office so they need to do some pr work. I hope they can keep them selves on the right track. The only way to do it is to make them share holders. If they ask for too much, they hurt themselves.

  8. G.A.Branigan Says:

    It seems that the uaw,gm,and major banks all have several things in common:GREED,and IGNORANCE.

  9. tj Martin Says:

    UAW – Damned and Determined to slit their own Union throats and send GM looking overseas or bankrupt them , which ever comes first . As they have always been . And as they shall ever be .

    China’s Over Capacity – John . Didn’t you give this same report almost six months ago ? If so has it gotten worse or is this just old news that bears repeating ?

    @Pedro Fernandez – Oh for the days of an honest , reliable and pleasant car . Now days you’d have to go to the UK for a Bristol to get such a car and pay upwards of $200K for the privilege . Funny . in the old days the simple reliable , last you forever car was the the automobile of the Middle Class . Now its become the car of the very privileged few .

    Kind of like property on the Docks and Peasant food . Once the domain of the poor and middle class . Now the stolen birthright of the very rich . Crazy world we live in .

  10. D. B. Says:

    @ pedro

    While I agree on the sentiments about the volt, optima, and sonata, We had a 93 Camry and it was our least favorite Toyota. We got rid of it with the fewest miles and shortest time of ownership of the 8 Toyotas we have owned to date. Reason: it was too much appliance and not enough motorcar…
    When I replaced my much beloved 98 Corolla (41 mpg!) I tried many a Camry but could not pull the trigger. Ended up buying an Acura…

  11. Brett Cammack Says:

    It saddens me to think of Mitsubishi’s eventual departure from the domestic market here. I love our 1990 Eclipse and 2006 Outlander. I expect we’ll be driving them for quite a while to come.

  12. pedro fernandez Says:

    D. B. I’m surprised about your experiences, I never owned on of those Camry’s but I did own a 1986 and had the opportunity to rent a ’92 back when it was new and it blew my mind how much better it was than mine. When you consider it was built on a Lexus platform, you understand why. I consider those better than the current ones, ( my wife thinks I’m nuts for feeling that way)I also feel the same way about the older Corollas vs the new ones.

  13. Tom L Says:

    Hey Pedro
    To get the same type of car you will have to buy a new C200 Chrysler.They will be the best Chryslers in years.Just wait and see…….VALUE # 1

  14. pedro fernandez Says:

    no thanks Tom, I don’t need to turn back the time either, there are still good vintage 1993/95 Camry cars to be had at very good prices. ps. much lower ins rates also.

  15. tj Martin Says:

    Tom L ;

    I second Pedro’s sentiment . A Chrysler with the same quality and dependability as any Toyota ? With FIAT running the show ? Never gonna happen . Not in this or any other lifetime I’m afraid .

    Pedro ;

    Correct me if I’m wrong but I do believe its the Lexus thats based on the Toyota platform when it comes to the Camry . Not Visa versa .

    There’s a thought though . Wonder if Toyota will ever do a model off of the IS platform . RWD . Tone down the goodies a bit . That could be a winner .

  16. Patrick Says:

    New Kia Optima isn’t bad, but not a fan overall. Too many buttons in a confusing layout on the steering wheel, wheels are ugly, dash is unimpressive. Hey I remember my Grandma’s Mercury Cougar from the 90′s had that 10 degree or so wrap around on the dash board, along with a host of other defunct vehicles from the era, Olds Aurora, etc..

  17. pedro fernandez Says:

    tj: the original ES 250 was a Camry rebadg, but the next gen was designed by the Lexus division and then a Camry version was derived from it. with a 4 cyl engine, cheaper interior, different body panels, lesser suspension, and less noise isolation but in the case of the V6 and the transmission, they were the same and the driving dynamics were very close, specially the V6.

  18. cwolf Says:

    It’s,once again,amusing to read all the UAW bashing comments; realizing the writers probably have little grasp of any of the facts. Clearly, anyone with a hint of knowledge of present contracts and inkling of where it is headed would realize the union is no longer deserving of its reputation a decade ago.
    New hires make about $15/hr and half the benies once provided, so what do bashers think is a fair wage? Another 40-50% cut in wages is less than min. wage isn’t it? This is why the KUGA wasn’t brought to the US, for the most part. The german worker makes about $50/hr US and has a lot more vacation time, so do US unionized workers realy make too much in the larger scope of things?
    I suggest prviding training the people the way GM use to do, to test incoming mat’ls and reject what does not comply, the way they use to do. And, most importantly, become much more vigorous in the elimination of waste. Becoming more robust towards these 3 things will make the big 3 most competitive. What are your thoughts of having the company provide money to a union towards these three areas, then, proportion any savings between them annually?
    dcars has the right thought! The UAW IS heavely vested in the future of the US car company and is guided by intellectuals equal to their rival. They know what has to be done and has already proven able to make the appropriate sacrifices in this tough economy.
    I am a UAW tradesman, but I am my oun person. I don’t know all the facts, either! But I do know that Pedro and Branigan make comments they can’t support. Support your comment and I will try to equally comply.

  19. pedro fernandez Says:

    What comments? that most of these new cars are a piece of sh– compared to those built in the 80′s and 90′s, I base that on information given to me by technicians who work on these new overcomplicated mobile computer banks, all smoke and mirrors with tons of sound deadening materials to make people think that they’re solid and well engineered. I just want to see where they’re gonna be 15-20 years from now. I’ll take a late 80′s early 90′s Toyota or Honda over these new ones.

  20. cwolf Says:

    Pedro, what do these overly complicated cars, either domestic or foreign, have to do with your views towards the UAW? I don’t recall any car designed, engineered and marketed by the UAW! I,too, miss the simple roll-down windows, knobs for heat and air,and a power plant that can be worked on in the home garage, but sadly these days are gone…unless you buy from TATA.
    The ol’cars we grew up with were pretty great,huh?;But in reality they really aren’t the cars we want to think of them to be in a good many of todays cars. I’ll still keep liking them,too!

  21. pedro fernandez Says:

    cwolf, you got me confused with someone else, I barely ever mention the UAW, only to say that they cannot be making too many demands because the OEM’s will just haul ass down to Mexico and then there will not be American jobs in the industry at all.

  22. pedro fernandez Says:

    ps. I also believe that there should be some kind of profit sharing with the workers, if the domestics do well and start making money, then everyone should get a piece of the pie.

  23. cwolf Says:

    Sorry Pedro. I must have mis-interpreted dcars comment stated above. Lot’s of stuff seems to be headed Mexico way, but I have just begun to hear a growing interest in more “home grown” things. Smaller cars assembled in the US for one. I trust the UAW (have no choice!) will make it happen while still supporting a middle class. I will also go as far as saying more foreign buyers will go domestic in the comming years. Once everyone finds a real sense of direction and works as one, I know we have all the tallents to make world class cars for the money. FWD BMW’s and cheapened JETTAs make it easier.

  24. XA351GT Says:

    Yeah lots of things heading to Mexico except Mexicans who continue to illegally enter the US and bankrupt the finances of every state that touches Mexico.

  25. pedro fernandez Says:

    While the jobs are moving south, the Mexicans are still moving north, I guess it’s not just about jobs, is it?

  26. pedro fernandez Says:

    BTW Motorweek will be testing the Volt on the Oct 31st show, I look forward to their evaluation.

  27. cwolf Says:

    What will be the cost of the Volt this week?

  28. Jim Haines Says:

    I will be glad to see Mitsu leave as they have been nothing but unreliable vehicles in every way. ps I know there will be ten people who got a semi good car from them some how that will dispute this.

  29. Kit Gerhart Says:

    Anyone who thinks 80′s cars are better than today’s cars hasn’t driven an 80′s car lately. I have two 80′s cars in near-mint condition, and two 2010 cars. The new ones are better in about every respect.

  30. Gary Paul Says:

    Well I once longed for simpler cars and trucks where I could change the plugs myself and get at the distributor cap and change the shocks without using a spring compression tool (as with struts), and change and not have to align the REAR end after changing the shocks, etc.

    But something happened on the way from 1980 to today… High quality, dependable, electronics and assembly began to take effect, steadily through the 80s and 90s so that I don’t have to long for simpler designs as much because the vehicles are becoming so darn dependable, meaning that I don’t have to get at components because they usually don’t need to be replaced! The quality of these vehicles is certainly obvious, and I don’t think insulation or sophisticated electronics are hiding many quality faults…

    Take spark plugs… On most vehicles from the mid 90s on, if you are replacing the things before 100,000 miles its typically a waste because they have platinum coatings and high energy ignitions systems and can usually operate well for far beyond. In fact ACDelco Engineers through Delphi (when GM owned them), indicated that the 100,000 mile interval was quite conservative for most driving (i.e., not including severe conditions like towing, or extreme environments such as driving in Alaska, etc.) and would usually operate well at far beyond that range… have you ever noticed how far fewer vehicles are stranded on the roads these days? How few fail to start in the morning in spite of massive neglect?

    Or take ignition wires on vehicles up to 15 years old or so. Your supposed to unhook em and inspect the plugs regularly right? …Uh NO!… Just leave the plugs in there and leave the ignition wires alone. Every time the wire is messed with (unhooked from the plug) it weakens the wire and you are more likely to have ignition concerns. And besides the plugs usually don’t need replacing until at least 100,000K.

    There are so many examples of superior quality today… Which does not mean we aren’t in a temporary quality dip today as components may be sourced from less dependable China parts suppliers or we stress engineers to the limit trying to improve vehicle design with tightening resources (Toyota).
    I haven’t had to replace a water pump, or an alternator or and oil pump, etc in about 30 years! (on an old 72 Pinto was the last time for a water pump and an oil pump on an 80 Citation). I once forgot to change a timing belt on my 97 Ford Ranger 4-banger. I discovered it churning away 15 years later without a problem (it did have visible cracks!) @ 170K miles!

    Quality of components and use of galvanized sheet metal and superior oils and great tire designs, and long life shocks, and great paint adhesion with clear coat, etc. mean today’s vehicles hardly need to be serviced relative to 30 years back. Now if you’re gonna modify your vehicle, well your in for some “fun” trying to work on these modern machines!

    Now this does not mean I don’t like simpler vehicles. –That’s why I drive a basic pickup with a 4 cylinder and a stick & 2wd. I don’t even like a/c! But i have to admit that overall the quality has gone seriously up since the early 80s with every vehicle maker. Ideally I would prefer simplicity plus modern electronics and dependability and safety, but if i had to choose I’ll take greater sophistication over simplicity if the dependability is high…

    Now if you really want to get into simplicity, buy an old 1960s Studebaker Pickup, or an 65 International Harvester Travel-All!

  31. Nick Stevens Says:

    Pedro,

    The brownnoses at Motorweek will never find anything wrong even with the Chrysler 200 (identical to the excremental Sebring-Avenger, and Top Gears worst car in the world, EVER)

    Nothing they will say about the STUPID Volt will change my opinion on this DOG one iota.

    The SECOND Gen Volt may be better, if batteries get far better, that’s what GM is counting on.

    (The 1st gen Prius was quite a dog too!). The only ones that will bother to buy the STUPID volt will be utter geeks with $ to waste and government types whose arms the Admin will twist into buying several copies.

    The 91-94 Camrys were great for their time, but are OBSOLETE in today’s market. There are ABSOLUTELY NECESSARY items every car should have, such as side airbags and ESC etc etc and you could not have them on the primitive Camry even as an option.

  32. Nick Stevens Says:

    “# Kit Gerhart Says:
    October 18th, 2010 at 10:03 pm

    Anyone who thinks 80’s cars are better than today’s cars hasn’t driven an 80’s car lately. I have two 80’s cars in near-mint condition, and two 2010 cars. The new ones are better in about every respect.”

    ABDOLUTELY AGREE.

    EVEN comparing an allegedly very UNreliable car that Consumer Reports asks people to AVOID, such as my bargain basement $10.5k (in perfect shape) 7 yr old BMW 740iL, whose equivalent will cost you $100k new now, PROVED far, far, far superior, DESPITE its 100 times more systems and complexity, not only compared to my lousy 1983 Pontiac Sunbird thad died at 65.5k, but even compared to my 1990 Accord coupe (which did not even have ABS or a SINGLE Airbag, let alone ESC etc), and comparably reliable to the Accord!!!!

  33. Nick Stevens Says:

    (a 98, but 7 yr old when I bought it in 05 with over 100k miles!)

  34. Nick Stevens Says:

    “pedro fernandez Says:
    October 18th, 2010 at 2:08 pm

    D. B. I’m surprised about your experiences, I never owned on of those Camry’s but I did own a 1986 and had the opportunity to rent a ‘92 back when it was new and it blew my mind how much better it was than mine. When you consider it was built on a Lexus platform, you understand why.”

    First of, you got it exactly BACKWARDS. The 1991-94 Camry was NOT built on any LExus platform. At that time, there was only ONE LExus Platform and that was the one for the LS400. The other lexus was a thinly disguised Camry that sold for $5,000 more than an identically optioned Camry, and was built on the TOYOTA platform on which the Camry was also built.

    Second, your own experience proves how much BETTER, NOT WORSE, were cars of 1992 vs those of 1986, and the same is true for most cars of 2010 vs similar cars of 1990 or 1995.

    When I bought my 1990 Accord coupe for $6,500 only in Feb 1994 with 68k miles, I also tested some toyotas, incl an 86 corolla. I would not DARE drive that tinny, ugly, poor interiored POS TODAY, esp. om the Highway. Not that it drove well anyplace else. AND due to its reliability, they were asking a RIDICULOUSLY High price, so I walked away.

  35. -pedro fernandez Says:

    The ,92 Camry started as a Lexus, the opposite of the previous gen which Lexus just put more luxury items and called it an ES250, a dressed up V6 4 speed auto with all power accessories, leather, more sound proofing and different body panels, the next one (1992)was engineered by Lexus and then they made a poor man’s version of it and they called it Camry, that’s why it was so much more nicer to drive than the previous gen.

  36. Kit Gerhart Says:

    I didn’t think anything “started as a Lexus” except the LS. The IS is a Lexus-only platform in the US, but I think it is sold as a Toyota in other markets.

  37. Nick Stevens Says:

    “# Kit Gerhart Says:
    October 19th, 2010 at 3:40 pm

    I didn’t think anything “started as a Lexus” except the LS. The IS is a Lexus-only platform in the US, but I think it is sold as a Toyota in other markets.”

    Even the LS may have shared its platform with a “Toyota Crown” old-fashioned exec car in Japan and maybe other places, but not much else.

    The ES 250 Lexus was not only based on the Camry platform, it was almost a complete twin at first, and even later models made little effort to be different and justify the $5,000 price premium, due to which COnsumer Reports thought the ES was a poor buy.