Effective and Personal Management Solutions
Managing Director Insights
It’s been a minute, but now the Automotive Industry can put itself back together.
Piece by piece.
The UAW contracts need to be finalized, but this is perfunctory.
Their sweet deal will be done soon enough.
Because of the shifts in wage and leverage to the workers, the industry will not be put back together exactly as it was before though.
And this strike has kicked-off what I believe to be the second phase of the Great Post-Covid Industrial Reset in America.
More on that later.
But for now, some Automotive Highlights now that the strike has been resolved:
1. The UAW Won the Negotiation – Maybe 80/20? Maybe 90/10?
2. The Detroit 3 CEOs approached this strike just as any other, and it backfired on them, they were outdueled and outmaneuvered from the jump.
3. It’ll take some time to get everyone back in the facilities, make sure that all of the products are in place to build the vehicles, and make sure that all safety protocols are in place. It may take up to 2 weeks or more to get things back rolling again production-wise. A 44 day strike has disruption of 60 days or more … not good for efficiency.
4. The added price per vehicle will be in the $700 – $1,000 per car … don’t expect the carmakers to eat this cost … it’ll be passed on to the market … at least they’ll try to … the key issue will be whether or not they maintain market share.
5. Electric Vehicle Sales have not taken off as the carmakers hoped … Ford recently released a statement saying that there is up to a $36K loss on each electric vehicle sold … that was before these new labor cost increases.
6. Regardless of the type of vehicle made, the UAW will participate in the production of vehicles in America … they avoided being boxed out of battery and electric vehicle production.
7. There are huge improvements in income for all levels of the UAW workforce … life changing for most, and seemingly all that was lost during the 2007 negotiations has been brought back for the workers in this recent contract.
8. The UAW has absolutely picked a fight with the CEOs and the Executive Leadership of the Detroit 3. They didn’t just poke them in the chest. They put on a full-court press assault, threw and landed just about every haymaker, and then in the post-fight press conference, they rubbed it in.
9. Carmaker moves Part 1: Furloughs for white collared employees, and cuts to electric vehicle production.
10. Carmaker moves Part 2: They will find efficiencies in their white collar workforce including more lay-offs, they’ll squeeze suppliers, they’ll continue to search for supply chain efficiencies, and they’ll begin an intensely focused campaign to automate anything possible in their US facilities, and they’ll explore manufacturing in MX.
The divisiveness that has come out of this strike has made it feel a Star Wars Saga …
Ball in the OEMs court …
Make it a great day!