February 11th, 2013 at 11:53am
Anyone who lives in the United States definitely has noticed that the price of gasoline shot up dramatically in the last month. Now, find out why. Holden unveiled the redesigned version of its rear-wheel-drive VF Commodore sedan, which will make its way to the U.S. as one much-awaited Chevy model. Set to make its debut at the Geneva Motor Show is the Subaru Outback with the companies Boxer Diesel mated to a CVT. All that and more, plus the UAW once had a monopoly on automotive labor in the United States and Canada but not anymore.
Well, we hope you had a great weekend. Welcome to a new week of Autoline Daily, let’s get to the news.
WHY GASOLINE PRICES ARE SURGING
Anyone who lives in the United States definitely has noticed that the price of gasoline shot up dramatically in the last month. That’s because speculators have jumped back into the market in a big way. They expect higher prices because some East Coast refineries are shutting down permanently or closing for maintenance. And because of record exports of gasoline, especially to Brazil and Venezuela. Tight supplies are a magnet for speculators who place bets that prices will go even higher.
CITROEN GOES TECHNO
Citroen has been selling an MPV for years called the Picasso. It’s met with moderate success, but if you ask me it’s always looked a little goofy. Now the company is getting rid of the fishbowl look with this good-looking concept that it’s going to unveil at the Geneva show next month. Citroen calls it the Technospace and says it uses a new, modular platform that is lightweight and space efficient. We wanted to show you what it looks like but we’ll all have to wait until Citroen releases more details.
CHINA IN OVERDRIVE
The Chinese car industry is growing by spectacular numbers again. Despite worries of a slowdown last year, sales last month hit 2.3 million units, up an astonishing 46 percent compared to a year ago. Production was up over 50 percent, hitting 1.96 million. And that is amazing growth.
HERE, HAVE SOME MONEY
Ford wants its dealerships to look as gleamingly new as possible. It’s telling its dealers it will match, dollar-for-dollar, up to $750,000 in upgrades to their stores in the U.S. Even so, Wards Auto World reports that the outgoing president of the National Automobile Dealers Association, Bill Underriner, says automakers need to butt out of a dealer’s business. He criticized these kind of renovation programs, because they make all dealerships look alike and rarely pay off.
HOLDEN REDESIGNS COMMODORE
Holden unveiled the redesigned version of its rear-wheel-drive VF Commodore sedan, which will make its way to the U.S. as the much-awaited Chevrolet SS. The new sedan features lightweight aluminum panels, new exterior design and a more sophisticated interior. Unfortunately we were not given any information on what engine and transmission will go in it. So we’ll just have to stare at these pictures and imagine a Chevy badge on the grille.
SUBARU’S VISION INTO THE FUTURE
Subaru is giving us a look into its design and technology future with this tease for the VIZIV concept crossover, which makes its debut next month at the Geneva Motor Show. The name VIZIV comes from the phrase “vision for innovation” that Subaru suggests is the brand’s direction.
SUBARU BOXER DIESEL W/CVT
Also set to make its debut at the Geneva Motor Show from Subaru is the Outback with Subaru’s Boxer Diesel mated to a CVT. I think that could be a killer combination. CVT’s provide terrific real world fuel economy and so do diesels. Together the two could be a real nice package.
Coming up next, a look at the biggest problem facing the UAW. It’s running out of money.
THE LABOR MOVEMENT
(The labor movement can only be viewed in the video version of today’s show.)
And now it’s time for my viewpoint. Today’s topic: the labor movement.
The UAW is facing an existential threat. It’s running out of money.
It once had a monopoly on automotive labor in the United States and Canada but not anymore. While Asian and European automakers added millions of units of capacity in the United States and Canada, the union has failed to organize any of their plants. Not one.
The same goes for suppliers, who now have many fewer union workers, or none at all.
And it will only get worse. New hires at GM, Ford and Chrysler are paid half as much as legacy workers. Since union dues are assessed at two-hours pay per month, every new hire means the union gets half as many dues. Yet, the union is already dipping into its savings to pay for its operational expenses because it’s not collecting enough dues.
Another dilemma. GM, Ford and Chrysler gave the union over $50 billion in cash and stock to manage its Voluntary Employee Beneficiary Association (VEBA) which provides health benefits to retirees. That’s a lot of money, but not enough. According to the latest papers filed with the government, the VEBA is more than $30 billion short of covering its obligations. A year ago the shortfall was $20 billion. Where is the union going to come up with that kind of money?
And now the state of Michigan, home to the UAW, just became a right to work state. Simply explained, that means no one can be forced to join a union or pay union dues or fees. Most UAW members will choose to remain in the union and pay their dues. But some people will drop out.
Now, before the anti-union crowd rubs its hands in glee, watch out. The UAW is mortally wounded and will likely lash out. I think the contract negotiations in 2014 could become extremely contentious. And it will ramp up the rhetoric against the transplants.
Obviously the union has to do something. Because it’s pretty obvious that it’s only a matter of time before the union runs out of money.
And that’s my viewpoint for today. Thank you for tuning in, and I hope to see you back here again tomorrow.