Hey, baby. Good morning. And not just any morning—a very happy Inflation Reduction Actaversary to you. I know, I can’t believe it’s been a whole year, but President Biden’s landmark legislation has already had profound implications for the automotive landscape, both (potentially) good and (potentially) bad. And however indirectly, the U.S.’ newfound love of battery plant investments may contribute to a strike by the United Auto Workers union this fall.
We’ll have those stories on today’s morning roundup, plus some dispatches from Ford CEO Jim Farley’s electric road trip and one outlet asks: are all cars Land Rovers now?
You deserve the best, baby, and I’m gonna make sure you get it.
UAW Pushes Membership For Strike Authorization Vote, Says It’s Done With ‘Scraps’
All summer we’ve been closely watching the UAW’s contract negotiations with the Big Three, which are more fraught than they’ve been in decades. Union members say their pay hasn’t kept up with inflation, they’re losing manufacturing jobs to China and Mexico, they’ve hated the “two-tier” wage system and they want it gone, and they want assurances that they’ll still have jobs in a potentially EV-centric industry that may need fewer parts and less labor. They’re making big demands in a time when the auto industry is posting record profits and record car prices, but execs say the “electro-mobility” future may kick everyone’s asses. (I think that about summed all it up.)
There’s a good chance many of you know this already, but in union negotiations, you have what’s called an “escalation plan.” The UAW’s latest step is asking members for a strike authorization vote next week. That doesn’t mean they’re going on strike—not yet, anyway—but the members will affirm to leadership that they’re down to do it if negotiations don’t go their way. It’s both a powerful and scary message to send to management and a test to see if the members really have the appetite to take the fight to that level because they won’t get paid if that happens. (The UAW has a strike fund, but at $500 per week per member in this economy, it’s not what I’d call a mind-blowing deal.)
In asking for the strike authorization vote, UAW President Shawn Fain delivered the fire members have been used to under his tenure. Here’s Reuters:
He urged members to approve the strike authorization, saying it would show the automakers that “we’re done taking their crap and the scraps they want to feed us,” Fain said.
He directed union locals to begin strike authorization voting immediately and to transmit the results to UAW International by the end of the day on Thursday, Aug 24. The workers’ current contract expires on Sept. 14.
“Whether or not there’s a strike next month is entirely up to the Big Three automakers,” Fain said in a statement earlier on Tuesday. The UAW wants to improve pay and benefits and end a two-tier pay system that contributes to wage erosion.
[…] The three automakers have said they want to reach a deal that is fair to the workers but also gives the companies flexibility at a time when the industry is shifting from gasoline-powered vehicles to electric models that have fewer parts and require less labor.
Via the Washington Post, here’s the automakers’ response (sans Stellantis, which did not respond):
“Ford is proud to build more vehicles in America and employ more UAW-represented hourly workers in America than any other automaker,” the company said in a statement. “We look forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever.”
General Motors said it is working hard with the union “to ensure we get this agreement right for all our stakeholders. We know that our U.S. economic impact supports more than 6 jobs for every job created by GM. We take that responsibility very seriously.”
How likely is this to happen? I’d say it’s pretty serious; one analyst who spoke to Axios put the odds at 50%. If it does, it will be costly; GM lost $3.6 billion from a 40-day strike in 2019. And as that story notes, Fain’s UAW could orchestrate a strike with all three automakers, essentially crippling a huge chunk of the American auto industry.
On the consumer side (that’s you guys) it could mean constrained new car supplies and probably higher prices at a time when the industry is juuuuust getting back on track post-COVID. You also have to put this in the context of a Hot Militant Union Summer, which has seen Hollywood go on strike (maybe into next year, from what I’ve heard) and UPS and the Teamsters threatening one too before an agreement was made.
I think this UAW’s eager to send a message, and if any of this works, it will target the Asian and European automakers for organizing next, as well as Tesla. But the next few weeks could be a wild one in the auto business.
The Inflation Reduction Act, One Year Later
Battery factories are part of the UAW’s concerns here. A bunch of American automaker EV battery joint ventures are popping up all over the country, but those aren’t unionized plants—not yet, anyway. It’s one part of union members’ concern about the future, a concern the automakers share too but in different ways.
But this wouldn’t be happening without the Inflation Reduction Act (also, the name sucks and it’s almost comically misleading.) It passed a year ago today. And the Biden Administration’s signature act has meant huge government-subsidized investments into battery factories as well as a revised EV tax credit system.
Is it working? On the first front, I’d say it is. The Electrification Coalition has a long list of battery plant investments I won’t copy and paste here because you’d be here all day and we need you to click on other articles. But it’s sparked the construction of multibillion-dollar new battery plants from Rivian, Hyundai, SK On, LG, each of the Big Three, Samsung, Tesla, Toyota, Volkswagen’s new Scout brand… you name it. Everybody got in on this. I’m starting to feel like I should’ve started a battery plant myself.
Interestingly, most of those factories are being built in the South or in red states because those tend to be most friendly to big business and manufacturing (and less so to unions.) The battery investments America is making right now are game-changing and could succeed in wresting the supply chain away from China as intended.
But as journalist Ryan Cooper wrote in Heatmap News this week, Biden’s election-year problem is that nobody knows about this stuff—especially in the communities that most stand to benefit from these investments. Democrats are terrible at messaging and great at getting rolled by their enemies, particularly a certain national cable news network.
But hey, that’s his burden to carry. Has the IRA been good for consumers? If you take the long-term view I’d say yes, because those battery plant investments will pay off. But I increasingly believe the EV tax credit scheme has been flawed—too limited right now to the cars and batteries built in the U.S., and I think that’s a big reason EV adoption is slowing down.
Again, you can’t blame everyone for not running out and buying $60,000 electric Hyundais they’d struggle to find charging for.
Ford CEO Jim Farley’s Electric Road Trip Has Some Charging Challenges
As many of us do in the summertime, Ford CEO Jim Farley has grabbed his car keys and set out to experience the open road. He’s been out and about lately, and sometime after his trip ended he stopped by Autopian associates Galpin Motors in Los Angeles to hang out with Dwayne “The Rock” Johnson and oversee delivery of the star’s new F-150 Raptor R.
(David got to go check it out. He is en route to Pebble Beach now, along with Jason and Matt. They are all doing many fun things together in very fun cars. I have been stuck behind writing the blogs. This is not the first time this has happened.)
Anyway. Back to Jim Farley. His search for adventure happened in an F-150 Lightning, which to me seems like an excellent road trip vehicle. But as anyone who’s ever road-tripped in a (non-Tesla) EV will tell you, charging was the biggest challenge. Here’s the video he posted on the social media service formerly known as Twitter:
No surprise charging can be a challenge, but still learning a lot seeing firsthand the issues our customers face. This is why we’re working w/ @Tesla to provide @Ford drivers access to +12,000 superchargers & our EV certified dealers are installing fast chargers at their… pic.twitter.com/fES15o9orT— Jim Farley (@jimfarley98) August 13, 2023
Ford was the first automaker to gain access to, and eventually adopt, Tesla’s charging network and plug standard. Many more automakers followed and there’s a good chance those things will represent the future of EV charging in America.
I do appreciate Farley’s candor here, though. You often get a really rosy view of EVs and EV adoption from the automakers, charging companies, climate activists and policy wonks, and that view is quite different from the reality on the ground.
Are All The SUVs Land Rovers Now?
Over at Newsweek, Eileen Falkenberg-Hull puts to words a feeling I’ve had for a while but haven’t been able to articulate: all the SUVs are turning into Land Rovers, now. Seriously! It’s what so many of them look like. Boxy, tough, ready to plunder nature on an individual level—more so than even in past decades:
Lincoln Aviator, Hyundai Santa Fe, Lexus GX, Cadillac Escalade IQ, Toyota Land Cruiser. All four sport utility vehicles (SUVs) have brought up immediate comparisons to Land Rover design.
Why do these new vehicles pull so strongly on Land Rover aesthetics? Are designers out of ideas? Is it that Land Rovers are so iconic that looking like one is an immediate badge of off-road authenticity?
[Larry Printz, internationally-syndicated automotive journalist]: “Land Rover’s Range Rover put the most elegant spin on SUVs, creating the rugged, sporting, elegant stiff upper lip that’s the automotive equivalent of a Barbour overcoat. There’s a timelessness to it, as Land Rover always lacked the resources to follow Detroit’s annual model change mantra. That only enhanced the Range Rover’s gravitational pull on designers, who always fall back on classic design and proportion, which the Range Rover has. There’s little need to radically rethink it.”
Some of these SUVs get a pass. The Mercedes G-Class has always been boxy. And the Land Cruiser, various Jeeps and the reborn Bronco can lay claim to plenty of historic examples for their current styling. That is less true of a company like, say, Hyundai.
But you have to admit beyond that beyond the boxiness, tons of SUVs are following this playbook now: large, full of pretenses of luxury and rugged adventure at the same time, and expensive. Has the Range Rover unintentionally become the platonic ideal for the modern car without any of us noticing?
Besides my Land Rover question just now: Do you think Biden’s Inflation Reduction Act investments (and the related legislation that includes charging infrastructure) are making a difference in the automotive world? Is anyone going to care when they go to the polls next year?
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