AD #4114 – VW & UAW Still Don’t Have a Contract; Auto Industry Powering Robot Growth; Global EV Growth Slows

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

VW & UAW STILL BARGAINING
Here we are a year later and Volkswagen and the UAW still haven’t signed a labor deal. Workers at VW’s plant in Chattanooga, Tennessee overwhelmingly voted to unionize in April 2024 for the first time ever. Contract negotiations kicked off last September but now, nearly a year later, the two sides still haven’t come to an agreement. VW’s latest offer includes a 20% pay raise over four-years, cost-of-living adjustments, lowered health care costs, profit sharing and an 8% attendance bonus. The UAW wants a 24.5% pay increase over three-years, uncapped cost-of-living adjustments, free health care, contributions to retirement accounts and profit sharing, which would be similar to what the Detroit automakers receive. So far, the UAW hasn’t responded to VW’s latest proposal but the automaker says it’s reaching the limits of what it can offer.

HD TRUCK MAKERS SUE CALIFORNIA OVER EMISSION STANDARDS
California is being sued by heavy truckmakers over stricter emission standards. Daimler, Volvo, Paccar and International Motors are trying to block California from enforcing the standards under the argument that President Trump rescinded the EPA waiver that allows the state to set its own emission regulations. The truckmakers say they’ve been “caught in the crossfire” between the state and federal government and the regulatory uncertainty has put them at harm because they can’t make future plans without knowing what kinds of vehicles they can sell. At the same time, California is suing the Trump Administration for revoking the EPA waiver, so this is likely going to be a lengthy legal battle. By the way, heavy trucks only account for about 7% of greenhouse gas emissions in the U.S.

GLOBAL BEV & PHEV GROWTH SLOWING
Sales of EVs and PHEVs have been on a tear all around the world for the last five years, but now the rate of growth is slowing. According to Rho Motion, automakers sold 1.6 million EVs and PHEVs in July, which was up 21% compared to a year ago, however it’s the slowest rate since January and it was down 25% from June. Interestingly, China, which accounts for more than half of global EV sales, was the main reason sales slowed. That’s because China paused some government incentives for purchasing a new EV or PHEV in July.

PORSCHE LOOKS TO DEFENSE BUSINESS FOR GROWTH
Porsche is in trouble and it seems like it knows it. The automaker counted heavily on the Chinese market but has seen sales plummet as Chinese enthusiasts turn to cars like the Xiaomi SU7 Ultra instead. In the U.S., it faces tariffs that are 6 times higher than they used to be. And even in Europe, Porsche’s sales were down 19% for the first half of the year. Just to show you how bad things are, last quarter, Skoda, one of the bargain brands in the Volkswagen Group, turned in a profit that was higher than Porsche’s. So the board of directors is looking to the defense sector as a new source of growth. For now it’s investing in defense related companies. But who knows? Maybe it will go beyond that. Porsche has a rich history of designing military vehicles, including artillery tractors in World War I and Panzer and Tiger tanks in World War II.

CHINESE OEMs STILL DRAGGING THEIR FEET ON SUPPLIER PAYMENTS
Back in June, 17 Chinese automakers agreed to speed up payments to suppliers, but so far, most of the companies are not following through. Previously some automakers were taking more than 100 days to pay suppliers, so the Chinese government stepped in to get them to commit to a 60 day payment period. But China state broadcaster CCTV reports that only FAW, GAC and Seres have met the pledge so far. However, it does claim that the other companies are working hard to meet the goal. An official with the China Association of Automobile Manufacturers, says new contracts with suppliers will be in compliance with the 60-day pledge, while outstanding ones will gradually be resolved.

    

BMW TAKES AIM AT MERCEDES G-WAGON
BMW is reportedly coming out with a luxury off-roader in the second half of 2029, but we wonder what took it so long to get here? According to Edmunds, the average transaction price for a Mercedes G-Wagon is nearly $209,000, second only to the Porsche 911 amongst mainstream luxury models. So, BMW has let Mercedes walk away with the segment. Automotive News reports the new off-roader is expected to be based on a modified version of the X5’s platform and will be produced at the company’s U.S. plant in South Carolina. If you’re wondering why BMW is waiting until 2029 to launch the vehicle, it seems to be timed up with the exit of the XM SUV, which goes out of production at the end of 2028, according to Autoforecast Solutions.

CUSTOMIZE YOUR CT5-V BLACKWING FOR ONLY $60,000
Speaking of profits to be made, Cadillac says it took lessons learned from the hand-built Celestiq to create a new customization program, called Curated by Cadillac. The first models to get the treatment will be a limited number of 2026 CT5-V Blackwings, which will also be hand-built at the same Artisan Center in Michigan as the Celestiq. Each customer will have an expanded selection of colors, finishes and materials to choose from and will get their own personal concierge to help walk them through the entire process. Production will start in the middle of next year and prices will start at $158,000, including destination charges, which is about $60,000 more than a regular CT5-V Blackwing.

AUTO INDUSTRY POWERING ROBOT SALES IN U.S.
Automakers and suppliers in the U.S. are quickly adding more robots to their manufacturing operations. In the first half of the year, robot sales in all industries were up just over 4%, but in the auto industry they were up 34%, by far the most of any sector. Cobots, or collaborative robots, now account for 1 out of 4 robot sales. That’s according to the Association of Advancing Automation. As the prices of robots and cobots continue to fall and as labor costs go up, the cost/benefit ratio is increasingly favoring automation. And as it becomes increasingly difficult to find people willing to work in factories, robot sales will almost undoubtedly continue to climb.

TOYOTA OFFERS DAY CARE AT FACTORIES
With that in mind, Toyota is trying to make it more enticing for parents to work at its plants. It’s going to start offering childcare at most of its sites. It has offered the service in Kentucky since 1993 and in Indiana since 2003, but will also add centers in North Carolina, Mississippi, Alabama and West Virginia starting this year through 2027. They’ll be available to kids 6-weeks to 5-years old and have all the amenities you would expect from any modern childcare facility. While it’s unclear if employees are offered discounted rates, the centers are open for multiple shifts and in some cases 24-hours a day, so most parents can have child care no matter what their schedule is.

TOYOTA’S MIKE SWEERS TO RETIRE
Speaking of Toyota, we’d like to wish a happy retirement to Mike Sweers, the guy in charge of all of the company’s North American vehicle research and development, and a multi-time guest of Autoline. We always enjoyed Mike’s honesty and enthusiasm for the projects he was working on. He’ll be replaced by Keita Moritsu, Toyota’s current senior executive for R&D in North America.

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.