If there’s a red line with Ford Motor Company it’s probably striking at one of the company’s highly profitable truck plants. Ford likes to brag that its Super Duty line makes more revenue than companies like Southwest Airlines and Marriot. So the UAW’s surprise last-minute strike at the plant hurts. The way that it was done hurts even more.
What does the union want? There’s another piece from Reuters that details some of the remaining sticking points, and we can evaluate the nut kick from the UAW in the context of those outstanding details.
Taking a little brake from union stuff, let’s finish off The Morning Dump with some good news for our British readers and some interesting news for Toyota fans regarding solid-state battery plans.
UAW President Shawn Fain Hits Ford Where It Hurts
While it seemed like Ford was closest to getting a deal with the UAW, the UAW pulled a real “Wildcard, Biiiitches” last night, but instead of cutting the brake lines, union President Shawn Fain abruptly called for a walkout at Ford’s Kentucky Truck Plant after a 10-minute meeting. That plant is responsible for the highly profitable Super Duty pickups, Expedition, and the Lincoln Navigator.
Here’s Automotive News on how that all went down, and it’s pretty wild:
A Ford source with knowledge of the negotiations said the union and automaker had been having constructive discussions this week, with the understanding they would focus on specific issues such as battery plants and retirement security.
YIKES! It gets stranger:
A UAW source with knowledge of the talks said the union had still been expecting Ford to enhance its offer. When Ford did not add to its economic proposal at the Wednesday meeting, the source said Fain responded: “If this is all you have for us, our members’ lives and my handshake are worth more than this. This just cost you the Kentucky Truck Plant.”
Ford is not pleased, releasing this statement last night:
The decision by the UAW to call a strike at Ford’s Kentucky Truck Plant is grossly irresponsible but unsurprising given the union leadership’s stated strategy of keeping the Detroit 3 wounded for months through “reputational damage” and “industrial chaos.”
Ford made an outstanding offer that would make a meaningful positive difference in the quality of life for our 57,000 UAW-represented workers, who are already among the best compensated hourly manufacturing workers anywhere in the world. In addition to our offer on pay and benefits, Ford has been bargaining in good faith this week on joint venture battery plants, which are slated to begin production in the coming year.
The UAW leadership’s decision to reject this record contract offer – which the UAW has publicly described as the best offer on the table – and strike Kentucky Truck Plant, carries serious consequences for our workforce, suppliers, dealers and commercial customers.
If we take everyone at their word, Ford thought it had the economic issues resolved and was ready to talk about joint venture battery plants and the UAW figured it would get a new contract with some more dollar signs attached.
Automakers have been pushing a line that the UAW is going to cut off its nose to spite its own face if it continues to go down this road, but for the moment it doesn’t seem like the UAW or its members are that worried. By carrying out these almost melodramatic strategic strikes there’s still likely money left in the UAW’s strike fund to continue to weather any immediate layoffs.
It still feels like the automakers don’t have a good plan to respond to all of this. National sentiment towards unions and unionization is high right now according to Gallup, and both major political parties in the United States have been generally supportive of the auto workers. The main leverage automakers have is with layoffs, but given a tight labor market that comes with its own downsides.
The UAW seems to have the better hand here and is milking it for all its worth. The only way it could get worse for Ford is if the UAW tried to shut down the Dearborn Truck Plant where the F-150 is built.
What Does The UAW Actually Want?
There’s a report from Reuters yesterday that was filed before the truck plant walkout and it points to the big issues still remaining before the Detroit Three and the UAW.
All of the automakers seem to be good with a base raise of 20% to 23%, Ford/Stellantis are okay with bringing back cost-of-living adjustments, and everyone seems to be pushing towards the elimination of tiers and better conditions for part-time workers. That’s a big chunk of what the UAW asked for initially.
What’s left? From Reuters:
Big obstacles remain on at least two major UAW demands: restoring the retirement security provided by pre-2007 defined benefit pension plans, and covering present and future joint-venture electric vehicle battery plants under the union’s master contracts with the automakers.
On retirement, none of the automakers has agreed to restore pre-2007 defined-benefit pension plans for workers hired after 2007. Doing so could force the automakers to again burden their balance sheets with multibillion-dollar liabilities. GM and the former Chrysler unloaded most of those liabilities in their 2009 bankruptcies.
The union and automakers have explored an approach to providing more income security by offering annuities as an investment option in their company-sponsored 401(k) savings plans, people familiar with the discussions said. Stellantis referred to an annuity option as part of a more generous 401(k) proposal on Sept. 22.
Perhaps the UAW was hoping to get more info on retirement from Ford? With GM bending a lot on battery plants it seems like that’s set a pattern for Ford.
Ford Cuts Mustang Mach-E Prices In The UK
When I was in the UK driving the excellent Puma ST I got to take a peek inside the Ford UK press garage. There were a lot of Mach-Es. I also saw a decent number of Mach-Es whilst traveling around England, though I probably saw more V8 Mustangs.
The big news in Britain is that the cost of the Mach-E has been slashed by about $9,400, or £7,700. Here’s Autocar with an explanation of what’s going on:
The Mach-E Premium, with the bigger battery and a range of up to 372 miles, now costs £52,380 while the performance-focused GT has been reduced to £67,540.
Ford bills the changes as a ‘promotion price’ rather than a long-term change but doesn’t give a date when it could be revised upward again. Finance offers currently available for the Mach-E finish at the end of December.
The price cuts effectively reverse the increases of up to £7700 that Ford levied across 2022 on the Mach-E on the back of rising raw material costs. Inflation had “wiped out” profit on the car, company chief financial officer John Lawler said.
By comparison, a Mach-E Premium in the United States starts at a much lower $46,995 before delivery (compared to $64k in the UK) or a partial Federal Tax Credit. The Mach-E GT is also much cheaper at $59,995 (compared to a wild $82k in the UK).
Toyota And Idemitsu See Solid-State Battery Breakthrough By 2028
Toyota will have to build many, many cars with lithium-ion and iron-phosphate batteries. It’s doing it now and it’ll have to do it for the foreseeable future. So will BMW and GM and Tesla and just about everyone. The future every automaker is hoping for, however, is the day when the current liquid electrolyte batteries can be swapped for more efficient solid-state batteries.
If they work, solid-state batteries should hold more energy, be lighter, easier to package, faster to charge, and less prone to fires. That little lava lamp in the photo above is a jar of solid electrolytes.
This makes Toyota’s announcement that it’s making a deal with Japanese petrochemical company Idemitsu Kosan that much bigger of a deal.
Here’s what Toyota CEO Koji Sato had to say about it earlier today in Japan:
“[O]ur two companies will combine their separate efforts to mass-produce new materials and establish a supply chain for solid electrolytes, which hold the key to the commercialization of solid-state batteries.
First, between 2027 and 2028, we will start to produce solid-state batteries for use in battery electric vehicles. We will then lay the foundation for mass production.
These batteries are not yet perfect, as Sato acknowledged:
A longstanding technical issue has been that repeatedly charging and discharging the battery causes cracks between the cathodes and anodes and the solid electrolytes, degrading battery performance.
Since 2013, our partner in working together to solve this issue has been Idemitsu, which was one of the first companies to conduct the development of elemental technologies for solid-state batteries.
One such elemental technology is a highly flexible, adhesive, and crack-resistant solid electrolyte.
Through repeated trial and error and by combining the material technologies of both companies, we have been able to develop a crack-resistant material that demonstrates high performance.
By combining this new solid electrolyte with the Toyota Group’s cathode and anode materials and battery technologies, we are now on the path toward achieving both performance and durability in solid-state batteries.
It’s great if it works.
The Big Question
What will it take for EVs to be palatable for 99% of drivers. For you battery nerds: How far away are we from a mass-produced solid-state battery? Can Toyota get them in cars by 2030 or is that wishful thinking? Will BMW beat them there?
[Editor’s Note: We changed the headline from “sucker punch” to “hit,” because let’s be honest, Ford knew a strike was possible, and “sucker punch” is kind of an adversarial term. This was not our intent; we just meant that the strike was a surprise. -DT].
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