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Episode 685 – UAW Targeting Suppliers, Mexico Booming, Toyota and Tesla Ink $100M Deal

July 21st, 2011 at 12:00pm

Runtime: 9:00

We all know the UAW is targeting transplant automakers in the U.S., but Autoline Daily has learned its strategy includes going after suppliers as well.  In a good sign for the entire NAFTA region, sales and production in Mexico posted big gains last month.  Toyota and Tesla just signed a three-year, $100 million deal for batteries and electric motors.  All that and more, plus a look at some advanced new automotive technologies on the not-so-distant horizon.

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This is Autoline Daily for July 21, 2011. Here’s the latest news in the global auto industry.

UAW TARGETING SUPPLIERS
While the media have focused on the UAW’s plan to try and organize one of the foreign transplants operating in the United States, Autoline Daily has leaned the union’s strategy includes going after automotive suppliers. Specifically, the union is going to target suppliers who already have UAW representation in some of their plants, but now it wants to get all of their plants organized. In an upcoming episode of Autoline, Cindy Estrada, the UAW vice president in charge of suppliers says the union is still formulating its strategy, but it is soon going to announce a national campaign targeting key suppliers. The union has partial representation at companies like JCI, Lear, Magna and Metaldyne. Estrada says workers at supplier companies are increasingly interested in the union.

The union has launched a couple of campaigns over the last decade to organize suppliers, with limited results. But Estrada is the first UAW vice president with organizing experience to sit on the union’s executive board. And now the union is devoting more money and resources to organizing.

MEXICO BOOMING (subscription required)
In a good sign for the entire NAFTA region, sales and production in Mexico posted big gains last month. According to Ward’s, production was up nearly 15 percent to just over 245,000 units. Passenger-car sales jumped over 21 percent while light-duty truck sales saw just a 3 percent gain. The Detroit Three automakers all posted sales gains, however Asian automakers, with the exception of Nissan, struggled. Honda and Toyota both saw sales and production declines. It’s also interesting to note that Alfa Romeo entered the Mexican market for the first time last month, with three models. Sure looks like Alfa is sticking its toes in the Mexican market before moving north into the U.S.

OPEL’S ALL-NEW DOBLO COMBO VAN
Now to Europe. Opel just introduced an all-new version of its compact van, the Combo. It’s offered as a passenger or as a panel van. The panel version comes in two wheelbases and two different roof heights. Under the hood, the Combo comes with a choice of six engines. Four diesel, one gas and a natural-gas version. Five- and six-speed manual transmissions are available along with start/stop technology. If any of this sounds familiar, it should. The Opel Combo is a redesigned version of Fiat’s Doblo.

PLUG-IN PRIUS SALES FORECAST
Now for some Toyota news.  Bloomberg reports the Japanese giant estimates it will sell at least 16,000 plug-in Priuses . . . sorry, Prii in the U.S. next year.  The car launches in early 2012 and features a lithium-ion battery that should deliver an electric-only range of 13 miles.  Once that power is depleted, it functions just like a regular Prius.

TOYOTA TEAMS WITH TESLA
The big T is also wooing Tesla.  It just gave the California-based EV maker $100 million as part of a three-year powertrain deal.  Tesla will provide Toyota with lithium-ion batteries and electric motors for use in the all-new RAV4 EV, which goes into production next year. You know, Tesla may yet prove me wrong.  A couple years ago I thought Tesla would be joining Studebaker and Oldsmobile in the automotive graveyard. But the company might just have a future, especially if it can convince more big OEMs it’s a one-stop shop for advanced batteries and electric motors.

MOTORCYCLE SPEED RECORD
Two wheels or four, few things are as satisfying as winding out a really powerful vehicle.  Fast is fun, but it can also be terrifying, especially if you’re breaking a land-speed record.  Autoblog reports a guy named Bill Warner hit nearly 312 miles an hour on a motorcycle!  That’s nuts!  Making the feat all the more amazing, his modified Suzuki Hayabusa has an open cockpit!  No aerodynamic bubble canopy protected him from the roaring wind.  According to Warner, the most challenging part of this record-breaking run was not the speed but the stopping.  He had to really fight the machine to bring it to a halt before the runway ended.  He said the bike was jumping all over the place!  Now that’s scary.

Would you believe that the speakers for your audio system in your next car could be paper thin? I didn’t believe it, until I heard it. That is coming up next.

CRANK IT UP TO 11!
In Taiwan, the Industrial Technology Research Institute is working on all kinds of really cool technology. Recently I was invited to visit ITRI’s laboratories and here are three new technologies I saw there that are directly related to the auto industry.

By the way, the newest models from Luxgen, a Taiwanese start-up car company are going to incorporate the paper speakers. So this technology is already migrating out of the laboratory.

I’ve got to tell you, I am really looking forward to tonight’s Autoline After Hours. We’ll have Tom Crumm, author of “What Is Good For General Motors?” in to talk about his ideas of doing away with the moving assembly line. He proposes a new way of making cars and I think he’s really on to something. Learn all about it tonight, so join me and the Autoextremist, Peter De Lorenzo for the best insider discussion in the industry.

And that’s today’s report. Thank you for your attention, and please join us again tomorrow.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

43 Comments to “Episode 685 – UAW Targeting Suppliers, Mexico Booming, Toyota and Tesla Ink $100M Deal”

  1. pedro fernandez Says:

    China booming, Mexico booming, US in decline and now we hear that Audi is thinking of setting up in Mexico thanks to threats from UAW to set up shop in Tenn where Audi actually wanted to move. Way to go!! Perhaps they can turn the shuttle landing site into homeless tents for the soon to be US workers.

  2. pedro fernandez Says:

    Maybe Cindy is an agent for the Mexican govt trying to push more companies to set up shop in that country with all this UAW crap. You’re doing a good job there Ms 007.

  3. John Says:

    Re: Suppliers —-> Mexico ?

    “Cindy Estrada, the UAW vice president in charge of suppliers says the union is still formulating its strategy, but it is soon going to announce a national campaign targeting key suppliers.”

    So what will keep the U.S. Suppliers from moving to Mexico if they are targeted by the UAW ?

  4. HtG Says:

    Here’s a little intel from the Nissan dealer. We brought in the Versa for service, but not before the used car dealer called us up for a ‘free equity analysis.’ It seems late model Versas are in short supply and high demand. They’d like us to trade in the car for a newer Nissan. I spoke to someone in service about what’s going on, and learned two things. First, canvassing existing owners raises the dealer’s chances of finding a warm body that can actually qualify for credit. Second, that part of making an offer on a used car involves calling the service department to get the vehicle’s service history. I don’t have the heart or the time to jerk the dealer around by going further into the process.

    ps Real men do not say ‘Prii.’

  5. pedro fernandez Says:

    Of course they are, most Japanese used small cars are in demand, used Yarii have gone up in price and short on supply around here, seems like folks want to save on purchase price and on fuel, is it ok to say Yarii?

  6. HtG Says:

    @5, only if you want to get laughs, Pedro

  7. pedro fernandez Says:

    Why don’t we get the Aygo here? by all accounts it’s a nice, economical, affordable small car. It has done very well in Europe and Asia. It would draw people who can only afford used now.

  8. pedro fernandez Says:

    #3 NOT A DAMN THING!

  9. JimT Says:

    Wonder if those same Nissan dealers contact the Armada owners in for service with a free “upside down” analysis?

  10. Tony Gray Says:

    Isn’t getting a vastly improved Mexican economy one of the reasons NAFTA exists in the first place? By making more decent jobs available “down there” you will theoretically reduce the immigration to the north that some folks want to see even dry up completely.

    If this keeps up, AMERICANS will be the illegals heading south of the border for the jobs they once had up here.

  11. MJB Says:

    Hey UAW. Even I think you’re shooting yourself in the foot on this one.

    Best Regards,
    Plaxico Burress

  12. MJB Says:

    …Oh, and Cheddar Bob seconds that.

  13. pedro fernandez Says:

    Or on a rickety boat to China.

  14. Lex Says:

    NAFTA = North American Free Trade Agreement is working out quite well for our neighbors to the South (Mexico). Then are the elected officals in Washington going to stop their “Tax and Spend” mentality of running the country into the ground! We bailouted the Banks, then the Domestic Auto Makers, soon it will be the UAW because all the Tier 1,2 & 3 Suppliers have moved to Mexico and taken the jobs with them!

    I think Mr. Musk / Tesla Motors is attempting to play Toyota. Didn’t Toyota already give Tesla a whole lot of cash and allowed Tesla to move into a portion of the space at the Nume Production Plant in California? Musk is probable looking to one day sell out Tesla to Toyota at a healty profit for himself.

    Where are the Tesla dealerships that Musk spoke about? Tesla will one day be a sub brand under the Toyota Banner just like Prius. General Motors needs to really ramp up production of the Volt to reduce costs and increase market share in the EV segment.

  15. Buzzed Says:

    Pedro is right,what is the UAW thinking? they actually want people to get paid a reasonable wage with some benefits? what a terrible idea! I think what we need to do is poll the nation and find out who has the worst wage, benefits and holidays and make people work for that and then tell them how lucky they are to have a job.

  16. Lex Says:

    John,

    Those paper thin speakers in the head liner are a great idea for saving weight and space, one thing how do they sound?

  17. MJB Says:

    Furthermore, how are they at reproducing deep bass notes simultaneously with higher notes?

    Bottom line, they’re gonna have to do some show-and-tell.

  18. pedro fernandez Says:

    I can see where Toyota and Tesla could merge and Tesla makes the EV’s for Toyota, Toyota uses another company to build most of the Scion cars for them, already.

  19. Chuck Grenci Says:

    I would have thought that they’d have a little more video coverage of the motorcycle speed record; maybe it is forthcoming (like maybe a GoPro camera video on the Hayabusa itself). Man, that thing was cooking.

  20. shan Says:

    @Pedro, so if Audi opens a plant in Mexico, will it lower the MSRP of that vehicle? Sadly, most of us can only dream of owning an Audi lol.

    Suppliers tend to be located near the auto plants due to logistical reasons and quality control. Paying American workers a measly $10-12 compared to the extreme low wages in Mexico is insignificant when you factor in the cost of transportation.

  21. SalvadorG. Says:

    Isn’t Funny? Countries that are fill with what used to be American jobs, like China and Mexico; have a booming economy. What a coincidence.

  22. pedro fernandez Says:

    I saw a report on the Chrysler plant in Canada where they build the 300/Charger/Challenger and they bring the engines and transmissions from Mexico by train. I thought: wow, that train passing by cities devastated by unemployment carrying Mexican built engines to install in American cars built in Canada. Pathetic!!

  23. John Says:

    @15 Buzzed,

    Don’t forget all the jobs that could be created by building a big fence all the way around the country that the union workers would build to keep all those auto supplier factories and union jobs in the U.S. .

  24. pedro fernandez Says:

    In an ideal world, yes everyone should make good wages,benefits and all, but guess what? it ain’t an ideal world. Look what the UAW did to the domestics, while the transplants were flourishing without them, at this point, any auto assembly worker would be thrilled to have the opportunity to work with or without the union.

  25. Tom L Says:

    Come on guys, stop the crying
    Chevy is trying to build small cars in Michigan.
    To help.. Buy a Sonic. Looks like it will be a good car.
    Keep jobs in the USA.
    If this car does well, more small cars will be built in the USA

  26. John Says:

    Tom,

    I hope you are correct.

    http://www.chevrolet.com/sonic-family/

  27. pedro fernandez Says:

    Me too, it would be a slap in the face for Ford who had to turn to Mexico to build the Fiesta, BTW from what I am hearing, owners are not loving that double-clutch tranny

  28. Kit Gerhart Says:

    I just had my free oil change/tire rotation done on my Prius, and a salesman offered me almost $$4000 more for it than I paid a year ago. Of course, when I bought my car, they had about 10 in stock on the lot. Now, they have none, and haven’t had any for months.

  29. pedro fernandez Says:

    Kit: I must think this is due to the earthquake, not the economic boom we’re supposed to be having. ps watch out for them thieves. Did you see if they had any Yaris in stock?

  30. MJB Says:

    @28 WOw. That doesn’t happen everyday. You gonna take it, Kit?

  31. HtG Says:

    was that an outright offer, or if you traded for a new car?

  32. cwolf Says:

    pedro, I don’t understand what you meant by the UAW setting up shop in Tenn. or why it would matter. If you and others honestly believe the transplant workers are happy, then,as a result,must acknowledge the UAW should be no threat to Audi! Right?
    Let me take a hit at the nail head; Perhaps todays anti-union people’s biggest fear is that providing workers fair wages and benifits,the on-going devotion to health and safety and all within the context of bettering the environment,increases product costs. And any time someone has to pay a buck more for something they want they point fingers at those who only ask for fairness. But what it really comes down to is the underlying expectation that in order to get products the anti-union people want at the price THEY want to pay, they are most willing to cut the throats of the workers to get it! The “It’s O.K.,as long as it does’nt happen to me attidude” just does’nt fly with me!

  33. Bob in Atlanta Says:

    John – In a future AAH show maybe you could host a UAW representative to discuss the many UAW contributions to the US auto industry over the years? I’m sure an hour would not be adequate time to cover all the innovations the UAW has brought to the industry. Automation of the assembly process is one obvious result of the UAW – there must be thousands more.

  34. pedro fernandez Says:

    At least they got a job, not flipping burgers for minimum wages or at Walmart for close to it. As a matter of fact if had been an auto worker I would have moved south long ago, just how far south? well that depends on where the jobs are.

  35. cwolf Says:

    pedro ,I agree! Contact the AAA to see just how far south you can go.

  36. John Says:

    If the U.S. had an affordable domestic fuel supply for day to day commercial and private ground transportation and billions of dollars were not gushing out of the U.S. Economy for foreign oil, then there would be more money for the higher standard of living that the UAW demands.

    But, as long as the U.S. Economy is starved for affordable ground transportation fuel, the UAW will have to accept the global economic rules of supply and demand when it comes to labor.

  37. pedro fernandez Says:

    There are a few people here who don’t care much for the UAW, I find it curious that you take out your angst at me!

  38. cwolf Says:

    It is taken out on you is because I enjoy and value your in put,and because of that,expect more from you. I usually try to provide some validation for my comments or pose a question to stimulate anothers thought. pedro, you don’t respond to any question asked,don’t offer any support for your comments or simply say your belief is a gut feeling. I want to always give you the respect you deserve, but it would help if you would give me a little idea of where you are coming from so I can understand. You see, responding to John would be a waste of time. Even now he has not grasped reports that the focus of the UAW is not on wages; do you recall wage performances offered in stock by McElroy? The UAW is bartering to keep plants open,bringing more models back to the US and some sense in job security. After reading his report,can you agree he thinks some form of unrealistic increase is DEMANDED? Being uninformed does’nt mean one has to be an idiot at the same time!

  39. pedro fernandez Says:

    Well you can thank NAFTA for that, those who opposed it, like me, were afraid that this is exactly what would happen, and it has. Congrats Mr Bush Sr.

  40. John Says:

    Re: Union NEWS

    ” “This is What Democracy Looks Like,” King accused” ”

    BREAKING: SEIU PLANS DAYS OF RAGE AGAINST WALL STREET
    Published 07/19/2011 – 8:20 a.m. CST

    http://www.thecypresstimes.com/article/News/National_News/BREAKING_SEIU_PLANS_DAYS_OF_RAGE_AGAINST_WALL_STREET/48134

  41. John Says:

    Pedro,

    Don’t forget President Clinton.

    “Bill Clinton had become president of the U.S. before the agreement came into force, and is seen here signing the U.S. implementation legislation.”

    http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement

  42. pedro fernandez Says:

    from today’s headlines: Massive lay-offs continue and we wonder why car sales are freaking weak, if you don’t have a job or fear you’re gonna lose the one you have, you ain’t buying no car, is that so hard to comprehend?

  43. vrmchris Says:

    hello to all.

    to mr. fernandez,

    are these massive lay-offs in southeastern florida? just curious. i have not seen the news yet.

    however, in southeastern wisconsin; we are seeing a resurgence in manufacturing. there are many tier 1,2,and 3 suppliers to the aerospace, agriculture, and automotive industries here.

    and yes, cars are being bought. mostly c-class cars such as the elantra, forte, focus, and the biggest seller the cruze.

    there is spending. but it is careful spending. there is pent-up demand for new vehicles. but only when necessary.

    so yes, there are problems with this economy. and there is fear of losing ones income. auto sales during this time of year are usually weak. but pick up around september. however, that is no guarantee in this economy.

    btw, management is primarily to blame for the domestic makes downfall over the past 30+ years. it will take both the uaw and management/leadership to correct what went wrong. neither one is solely to blame for what happened in the past. nor can one side take all of the credit for the resurgence taking place either.

    regards,
    vrmchris