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Runtime: 10:04
0:00 Ford Michigan Assembly UAW Workers Approve New Deal
1:23 Ford’s EV Sales Slowing
2:39 BMW’s EV Sales Soar 80%
4:05 U.S. October Car Sales Below Analyst Forecasts
5:07 NIO Plans 10% Jobs Cut
5:49 Ford Acquires Power Startup AMP
6:16 Bronco Off-Roadeo Program Now Open to Non-Owners
6:58 Acura Upgrades the TLX for 2024
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FORD MICHIGAN ASSEMBLY UAW WORKERS APPROVE NEW DEAL
The UAW is quickly working through its 5 Step program. The first step was the tentative agreements. It’s already to step 3 with Ford and Stellantis, which was live streams to go over the highlights of the contracts with workers. And since the UAW first came to an agreement with Ford, it’s the furthest along. Workers at Ford’s Michigan Assembly Plant are on step 5 and overwhelmingly voted in favor of the new contract. 81% of production workers and 90% of skilled trades people said yes to the new deal, although it did not say how many of the 4,800 workers voted. This was the first plant from Ford to go on strike, so the workers there might have the most incentive to get a deal done. However, the new contracts do include back pay for strikers and people that were laid off, which is reported to be about $110 for every day they were out of work. Now it’s Stellantis’ turn to move on to steps 4 & 5. It only took Ford a few days to go from the step 3 live stream to starting votes at plants, so we’re expecting a similar progression from Stellantis.
FORD’S EV SALES SLOWING
And we might be seeing another sign of the impact of the strike on Ford. The company, including Lincoln, sold a shade under 150,000 vehicles in the U.S. last month, which was down 5% compared to last year. And it wouldn’t be surprising to see more sales numbers in the red as strikes impacted production. We also might have a reason for why Ford delayed a battery plant with SK Innovation in Kentucky and is cutting overall EV spending by $12 billion. While its overall BEV sales were up 9% last month in the U.S., that’s down from the 13% growth for the full year. Sales of the F-150 Lightning are up over 50% to 3,712 units, but Ford had plans to be making 12,500 Lightning’s every month by the end of the year. It’s not going to do that if it’s selling less than 4,000 a month. The Mach-E is also struggling. Sales last month were down 11% year-over-year and over 50% when compared to September. And like the Lightning, the Mach-E is likely to miss its production targets by a wide margin.
BMW’S EV SALES SOAR 80%
BMW reported its third quarter earnings and the results are pretty good. The automaker sold about 621,700 vehicles, up nearly 6% compared to last year, including Mini and Rolls-Royce. BEVs helped fuel that growth. The Group sold nearly 94,000 which is up about 80% from a year ago. BEVs now account for 15% of its total sales, which is its target for the full year. Its revenue of 38.5 billion euros in Q3 is an increase of 3.4%. It posted an EBIT of 4.4 billion euros, an 18% gain and its net profit of 2.9 billion euros was actually a drop of 7.7%. BMW blames the slide in net profit on it taking majority control of its Chinese joint venture with Brilliance last year, which boosted its net profit in 2022. Even so, BMW says it’s on track to meet its goals for 2023.
U.S. OCTOBER CAR SALES BELOW ANALYST FORECASTS
Car sales in the U.S. were up last month. According to GlobalData, automakers sold an estimated 1.2 million vehicles in October, which is up 1.8% from a year ago. But that was actually below forecasts that estimated a 3 to 4% increase in sales. The slower growth is blamed on the UAW strikes, student loan payments resuming and other economic issues. The SAAR or seasonally adjusted annual sales rate was 15.5 million units last month, which was down from September’s 15.69 million units. But it’s up significantly from October 2022’s 14.7 million figure. While average transaction prices still remain high at $45,651, it was a drop of $451 from a year ago. So hopefully this is a trend that continues.
NIO PLANS 10% JOBS CUT
A highly competitive home market and a slight dip in BEV demand are having a big impact on Chinese EV startup NIO. Due to those factors, it says it will cut its workforce up to 10% this year. Since it only sells BEVs, NIO has been hit harder than other automakers that also sell hybrids and PHEVs. But the good news for NIO is that it continues to increase sales. It’s sold nearly 110,000 vehicles so far this year, which is up over 33% compared to last year. However, not everyone is in the same boat as NIO and we expect a lot more shake up in the Chinese market.
FORD ACQUIRES POWER STARTUP AMP
As we said earlier in the show, Ford is struggling to meet its EV ambitions, but it is trying to make its vehicles more attractive to customers. It’s buying power startup AMP and will absorb the business into its all-electric division, called Ford Model E. AMP will help Ford improve its power, battery and charging management on future EVs. Although no word on what it’s spending on the deal.
BRONCO OFF-ROADEO PROGRAM NOW OPEN TO NON-OWNERS
Ford is opening its Bronco off-roading program to non-Bronco owners. New Bronco owners get a complimentary 10-hour off-road training session. But now non-owners can enjoy a similar 4-hour experience. Ford provides the Bronco, along with trail experts to help guide participants. Packages start at just under $800 and includes you and three guests. The program is available at three locations across the U.S. at Mt. Potosi in Las Vegas; Moab, Utah; and Horseshoe Bay, Texas. If you’re interested, Ford is taking reservations now.
ACURA UPGRADES THE TLX FOR 2024
Acura is upgrading the TLX for 2024. Most notably, the front-end styling has been updated with a new fascia and different grille pattern and the design of the rear has also been massaged. The Technology Package, which is now standard, includes 19-inch wheels, leather seating, an upgraded audio system and ambient LED lighting. Other standard features include a 12.3-inch display and new safety tech. The powertrains are the same as before. The base setup is a 2.0L four-cylinder turbo mated to a 10-speed automatic transmission. While the Type S comes with a 3.0L turbo V6 that’s mated to a sport-tuned 10-speed auto. The new Acura TLX will arrive at dealerships later this month in the U.S. but no word on pricing just yet.
But that brings us to the end of today’s show. Thanks for joining us and I hope you have a great weekend.
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With reference to the Ford Bronco experience in the US, I thought I would mention that here in British Columbia Canada, our hidden gem, the Area 27 racetrack in the southern interior of the province, has recently opened a Chevrolet ZR2 Off-Road Academy https://area27.ca/zr2-off-road-academy/ which is similar to the Bronco Program.
I just listened to yesterday’s AAH, and it sounds like, if you want an EV, buy used. They have a residual value of 45% after 18 months, very low, and they would still be an warranty.
I’m not surprised that BMW’s EV sales are up substantially. While I’m not in the market for an EV, if I were, it would likely be an i4. It’s competitively priced, it looks pretty good except for the front end, and it’s my favorite body style, a hatchback car, not an SUV or sedan.
It’s a “no brainer”. The UAW members will vote for a strike every time. No risk. Get strike pay, Then get back pay for zero production. Ford, GM, and Stellantis just rewarded a monster.
Drew I agree! I’m not sure why the manufacturers would agree to back-pay. The one thing the UAW can use to bring you to your knees and they’re going to pay them for doing it? Back-pay should have come from the multi-million-dollar strike fund that UAW members pay into. I never would have agreed to that. Fain is much better than I gave him credit for.
F isn’t much better… Bill, Mary, and Carlos are clueless.
@Drew, Lambo I had missed the back-pay part. I agree with you that this is a recipe for disaster.
Of course, no one knows what the OEMs got for agreeing to pay that back pay. Its all negotiation.
But, I agree that it doesn’t look good. I heard this morning that there will be a signing bonus for each worker as well. Must be nice. Working at supplier companies, I have seen many contracts with the manufacturers. Not one of them included a signing bonus.
It looks like strikers will get about $110/day, a lot less than regular pay, but it’s crazy that they’d get anything.
https://www.freep.com/story/money/cars/ford/2023/11/03/ford-strike-laid-off-uaw-extra-pay-deal/71426913007/
Something is seriously wrong in this industry and country when we reward lack of production and reward absenteeism. And politicians encouraged this while claiming success in fighting inflation. How stupid is that?!?!?
The companies will get some of that money back, when the employees buy more new trucks.
Ladies and gentlemen, let us not be to quick and rush to judgement on some of the benefits that UAW worker are getting for the contract. Of COURSE Fain is going to talk up and about all the benefits that the new contract has for the employees. It would make no since for him not to! He has to justify all the pain the last several weeks for both the OEMs and employees, was worth it. As many understand and has been alluded to here, this was a negotiation, and, trust me, they gave up some things to!! Things that will not be on the front page.
That being said, there is a lot soar talk about what the UAW workers have ‘won’ in these current contracts with the Detroit Three, but where was all this ‘righteous’ indignation when the UAW had to SURRENDER many of these things back in 2008-9? No one was saying that the OEMs were wrong for doing this to their employees! Yet, over the pass 10 plus years, CEO and upper management’s pay has risen over 40%! This is why Fain was originally asking for that for UAW workers. People are quick to say that, these companies may not survive if they pay their employees this much, but, for the good and survive of the company, couldn’t the leaders of the company just as easily refuse and not take more compensation from the OEM’s they oversee? Investing those big returns BACK into the company? Why is it okay and much more palatable for the leaders of big business to take home big returns, but if their workers push for a little more of that pie, then the company is doomed and destined to fail?! I don’t agree with Fains approach, not in the least, but that has nothing to do with the hard-working men and women, who have spilled blood, sweat and tears for the success of the companies that they work for! That includes both hourly AND salary workers!
As long as the D3 can sell a lot of huge pickups and SUVs for big money, the companies will be ok, in spite of the UAW contract. If tastes in vehicles change, the companies could be in deep trouble.
Yeah, it’s absurd how much CEOs get, given how easily most of them could probably be replaced with someone better.
wmb – I agree exec compensation has grown to be shamefully out of balance. But 2 wrongs don’t make a right. Tell me what the UAW gave up 15 years ago. Answer… not much at all. 1. They agreed and now reneged on a 2-tier wage structure… which promised to help close the wage gap to the transplants… and had ZERO adverse effect to existing workers. 2. They gave up one or two vacation days, which took ZERO dollars away from the membership. 3. Obama protected the UAW pensions, while sacrificing white collar pensions at GM and Chrysler (at the ensuing contract the UAW agreed to take over the pension management, but now that their membership can’t live with a generous 401k). 4. The UAW’s “Cadillac” health care benefit was relatively untouched. Still, I don’t see what is being done to reduce absenteeism or to instill personal responsibility over their own health.
But let’s not allow the facts to get in the way of a pro union money grab.
History is repeating itself. The greedy union victories in the 60s/70s partially enabled the collapse.
Meanwhile, Jan-Sept EV sales in Europe are looking good.
The Tesla Model Y and 3 still come out on top, with 209K and 66K units respectively, but they only have a 12.7% share of the electrified market. The only relevant Ford is the Kuga PHEV, with 40K units. No other product from an American company. A couple of Rivian vans have been seen with Amazon.
In China, this October Tesla’s EV market share is just under 10%. (Solar energy is going through the roof: 130GW installed this year already.)
In the US, quite a few prospective Lyriq owners have been jumping ship, due to long waits.
Drew – You cite a laundry list of things the UAW gave up and now you suggest they are now ‘reneging’ on, but I ask you, what did the CEOs and top paid executives ever go up or lose? A few lost a lot a little, but many gained, and continue to gain so much more! When they were/are fired, many received ‘golden parachutes’, to enjoy a much softer landing on their exist. Add to that, the fact that GM and Chrysler had to file bankruptcy and survival through government loans, was NOT as a result of the union employees, but due to poor leadership! The responsibility of leaders of the company, is to pay attention to the market, adjust to change and manipulate the product flow to stay competitive. Many here can attest to some of crazy decisions that corporate leaders of the Detroit Three has made and, again, it is the ones that build the product that are blamed for the companies lack of success! Two wrongs do not make a right, but if the employees are making too much, the leaders are too! Yet it seems that it’s okay and acceptable for the heads of the company to make more then they should, but the people that work for them should NOT, under no circumstances! Absenteeism is just as bad on the salary side of the business, as it is on the hourly side, it’s just not as highly publicized. It the absenteeism that you speak of, is as a result of the recent report from the Ram truck plant, those employees were being REQUIRED to work mandatory overtime of 10-to-12 hour work days, 6-to7 days a week. When they were just to tired to go on, many called off and were declared absent! That doesn’t sound like an absenteeism problem, but poor leadership that’s leading to burn out employees! I have family and know a lot of people who work for one of the Detroit Three, none of them are drunkards, use drugs, all of them are at work on time, give a full days wage you are proud to work for their employer. I know someone who has lost their father as a result of an incident at an assembly plant, another who never touch a cigar or cigarette a day in his life, but developed the lungs of a 20 year smoker as a result of work in the foundry of an automaker because they were never given the PPEs to do the work assigned. Another who developed carpal tunnel syndrome in both hands as a result of the repetitive work they were doing at their work station. They were then laid off and then fired because they could perform their job. After years of the union and lawyers fighting to get their job back, they still had to endure a number of personal set backs as a result of being laid off and fired! You would think that this person would be bitter, but they are still a die hard supporter of the company they work for! So when people say that assembly works are uneducated, lazy and don’t deserve making good money for the work they do, because anyone from off the street can do what the do, they don’t know the half of it! if this was true, why would the Detroit Three boast of having a “trained workforce”, if just anyone off the street can just do what they do? You can’t have it both ways!
I worked for GM, later Delphi, and the UAW jobs ranged from needing 5 minutes training, to needing weeks or months to perform well. I was in an atypical facility that made electronics products and silicon ICs, but I suspect an assembly plant, engine plant, foundry, or any other UAW plant would have a similar wide range of skills, or lack thereof, needed for jobs. The supervisors and engineers had a certain amount of flexibility to assign people to jobs, based on their desire and ability to learn the more complex jobs. Except for skilled trades, the jobs paid the same, but the higher skill jobs would generally be more interesting, so certain people wanted them, even without extra pay. Yeah, without the union, there may have been more “pay for performance” involved.
GM salary retirees didn’t lose promised pensions after the bankruptcy, but did lose other promised retirement benefits. Some Delphi retirees lost part of their pension. I did not, but would have if I’d been a little younger.
If both pay scales are wrong, and the good of the company is the ultimate goal, then both the bottom AND top should take less, is all I’m saying. It’s not fair if all the sacrifices of pay and benefits are levied against the employees who do the physical work, as they watch those at the top receive most of the financial benefits of said work. I’m not saying the UAW workers should make anywhere near as much as those who lead to company, though, yet how many of those leaders have ever been in danger of losing finger digits, hands, arms and/or legs, head, lungs, neurological injury, or even the lose of life, as a result of a sped up assembly line, to meet an increased production schedule dictated by leadership?! They are never endangered of none of those risks from their office, yet they make the big dollars and make the call on the shop floor! I’m not suggesting that leaders do not deserve the pay the receive, just that their employees very well deserve more too and it wouldn’t be wrong for them to expect to enjoy at least a little more of the rewards that other are enjoying.
GM and Ford CEOs make 3-4 times as much as the Toyota CEO’s $7M. I don’t think it is because the Toyota guy is underpaid.
And those $7m were a rise of 46% from last year.
While Mary Barra is the industry’s highest-paid CEO, with quadruple that already-tidy sum. One shudders to think of any putative golden parachute. I used to think that having a manufacturing engineer in charge of the company might spur a revival.
I’m beginning to seriously fear for the remaining American automotive industry, Tesla and Rivian apart. Just the fact of being so reliant on gargantuan vehicles, while not even developing powerful and attractive hybrid powertrains, means that any change in buyer sentiment will refocus attention on their giant debt-load.
They need a better capital cushion, and some less fuel-thirsty, attractive products. Even if they dilute current earnings – when the tides shift, shareholders can jump ship, but showrooms need an instant answer.
My thoughts on the UAW contract are this; A factory job is a factory job and has a value associated with it. What is the going rate for a factory worker? Meanwhile the upper management positions have less framework. The pay for CEOs can be all over the place and include stock options and golden parachutes. The group no one is mentioning is the white-collar workers. The engineers and middle management that seem to be lost in this whole money grab. At this point some of the factory floor workers will make more than the engineers which is discouraging to spend 100K on an education at a 4 year university to make less than the school mate that runs a press.
Like what was said above; two wrongs dont make a right. So bumping everyone up just brings the company closer to not being competitive or maybe going under.
I see the biggest culprit to this is all these CEO’s sit on each other’s board of directors and allow these ridiculous pay scales and in return they give the same favor to the ones they sit on. Its corruption done legally and just shows that ethics in business is pretty much gone. So do I blame the UAW for trying to get their piece of the pie. NOPE! you behave just like your leaders above you and grab what you can now. The longevity of the company is their problem and they created this monster. Upper management has been trained to rise the wave while things are good and at the slightest sign of a downturn, they will cut jobs and reduce head count even to the detriment of future programs. Thats how business is run now and why shouldnt the workers behave the same way when its their jobs that will be cut first when things go south. Gotta get it while the getting is good. Even though they will get blamed for the next set of lay offs.