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Runtime: 10:01
0:00 UAW Strike Becomes Political Football
1:21 Ford & Unifor Settle New Contract
2:31 Parts Depot Strikes Hurt OEMs, Dealers, Customers
3:22 Striking Workers Don’t Qualify for Unemployment
4:46 NIO Opens New HQ In California
5:34 Chinese Car Exports Soar in August
6:34 ACEA Begs the EU Not to Tax EVs from UK
7:18 Manual Transmissions Double Market Share
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
Sean is on vacation this week and so I’m filling in for him.
UAW STRIKE BECOMES POLITICAL FOOTBALL
Day 11 of the UAW strike and now it’s becoming a political football for next year’s US presidential campaign. Tomorrow, President Joe Biden will be in metro Detroit to meet with strikers. The Detroit News reports it’s the first time in 100 years that a sitting president has met with strikers. Then, on Wednesday, former President Donald Trump will be in metro Detroit to give a speech to union strikers. Over the weekend, Republican Presidential candidate Vivek Ramaswamy, speaking to leaders in the Republican Party in Michigan, blamed the strike on President Biden’s policies. Mike Pence and Nikki Haley also issued statements blaming the President. And Republican Presidential candidate Tim Scott suggested that all the striking workers should be fired. So the UAW filed a labor complaint against him. All this political grandstanding is only going to help UAW president Shawn Fain. He’s been able to turn this strike into a national issue that is putting a spotlight on the power of the United Auto Workers.
FORD & UNIFOR SETTLE NEW CONTRACT
Meanwhile, in Canada, Ford and the Canadian union Unifor, agreed to a new labor contract without any of the rancor and animosity that’s going on in the ‘States. 54% of the workforce voted in favor of it. Ford agreed to boost wages 22% over the course of the 3-year contract, and workers get more than $7,400 as a signing bonus. New hires will now get 70% of top wages and move up to full wages in four years instead of today’s eight years. Ford will also restore cost of living adjustments or COLA, instead of lump sum payments. Surprisingly, Ford agreed to reinstate fully defined benefit pensions for all Canadian workers beginning in 2025. Undoubtedly, the UAW is going to seize on that since it too has been demanding a return to full benefit pensions instead of employee savings plans. And no doubt General Motors and Stellantis are going to feel that Ford is giving away too much.
PARTS DEPOT STRIKES HURT OEMs, DEALERS, CUSTOMERS
As you probably know, last week the UAW expanded the strike to 38 GM and Stellantis parts depots in 20 different states. That’s going to immediately impact the companies and their dealers and their customers. It was already hard enough to get your car repaired or serviced due to a shortage of techs. Throw a parts shortage on top of that and the strike is going to hurt a lot more than just the car companies. And service parts are a very profitable business for automakers and dealers. But the UAW may be treading on thin ice. That parts shortage could adversely affect police and fire departments, ambulance services and even airport vehicles. And if the strike starts to affect the general public, that could turn public support against the union.
STRIKING WORKERS DON’T QUALIFY FOR UNEMPLOYMENT
According to the Anderson Economic Group, the strike has already cost the American economy $1.6 billion. There are now more than 18,600 workers on strike and thousands more have been forced into layoffs. The economic pain for those on strike is real and immediate. The union is only paying them $500 a week and they don’t qualify for state unemployment. It also looks like the UAW workers who were forced into layoffs because of the strike may not qualify for unemployment either. But even if they do, they will no longer get supplemental unemployment benefits, or SUB benefits, from the automakers. Under the previous labor contract, the Detroit Three would pay our SUB benefits on top of state unemployment benefits that would get workers to about 75% of their take-home pay. But since that contract expired the automakers are under no obligation to pay SUB benefits.
OK, enough of all that strike stuff.
NIO OPENS NEW HQ IN CALIFORNIA
We often get asked if Chinese automakers are going to sell cars in the American market? Well, here’s part of your answer. Chinese automaker Nio just celebrated opening its new North American headquarters in San Jose, California. The building is located near its previous HQ but it’s twice the size. And the opening was attended by 70 business partners as well as local government officials. In 2021, Nio’s CEO, William Li, said it would start selling vehicles in the U.S. in 2025 and last year he said that its next-gen vehicles are coming to the U.S. However, there is still no definitive date when the company will enter the U.S. and its current efforts are focused on Europe.
CHINESE CAR EXPORTS SOAR IN AUGUST
Chinese car exports continue to surge. According to Car News China, Chinese automakers exported 436,000 cars in August, up 39% from the year before. And for the first 8 months of the year, China has exported more than 3.2 million vehicles, which is 65% higher than a year ago. That now makes China the number one vehicle exporter in the world ahead of Japan. Exports to Russia have helped fuel that growth. Last year, China exported 160,000 cars to Russia but so far this year, that has surged to 544,000 units. Mexico is the second largest market China exports to but it’s less than half of Russia’s volume. And most Chinese EV exports end up in Western Europe but that could slow down because of the EU launching an investigation into Chinese EV imports.
ACEA BEGS THE EU NOT TO TAX EVS FROM UK
From China we move over to Europe, where the ACEA, the European Automobile Manufacturers’ Association, is begging the European Union not to tax EVs that are traded between the UK and the EU. If the EU fails to act, EVs going in either direction will get a 10% tariff slapped on them, which could reduce sales by 480,000 vehicles and cost automakers €4.8 billion over the next three years. Eliminating that tariff would also help European automakers compete more favorably against the Chinese EVs that are pouring into the European market.
MANUAL TRANSMISSIONS DOUBLE MARKET SHARE
And finally, here’s a news item that should make enthusiasts jump for joy. Manual transmissions are making a comeback in the U.S. Well, a bit of a comeback. JD Power reports that sales of vehicles with a stick shift account for 1.7% of the market this year. That’s up from 1.2% last year and 0.9% in 2021. So sticks have almost doubled their market share in just the last two years. CarMax says manual transmission sales at its dealerships hit 2.9% last year, up from 2.4% in 2020. There isn’t any one factor responsible for the increase, but it’s not because buyers are trying to save money. Manuals are no longer cheaper than automatics, and they usually don’t get better fuel economy, either. CarMax says 20-something buyers are driving the increase but older consumers are also buying manuals for nostalgia. The best-selling vehicles with a manual are the Honda Civic, Ford Mustang, Subaru WRX, Jeep Wrangler and Chevy Camaro.
That brings us to the end of today’s reports, thanks for watching Autoline Daily.
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Seamus and Sean McElroy cover the latest news in the automotive industry for Autoline Daily.