The United Auto Workers’ strike shows no signs of ending anytime soon — putting more than 48,000 workers in the US off the job since Sept. 16 and costing General Motors more than $1 billion as of Monday; and supplier partners are loosing hundreds of thousands per day. Virtually all of its North American assembly lines are off-line as labor and management attempt to negotiate a settlement contract over wages, healthcare, and job security on the labor side and management’s vision of where it needs to go in the future. Last month, the UAW signed indefinite contract extensions with Fiat Chrysler Automobiles and Ford Motor Co. The GM contract has historically set the tone and some of the details for the next wave with the other two major domestic automakers.
Contract settlement details from a Monday night offer from GM began to emerge yesterday. Wage increases or a lump-sum payment offered over four years of the proposed contract have been added. The union had rejected the initial offer and submitted a counterproposal Tuesday over disagreements on health care, wages, temporary workers, skilled trades, job security and “concessionary” measures. Talks are expected to resume today.
Along with the strike, two more former UAW leaders have agreed to cooperate with federal prosecutors as the government builds a criminal case against some of the union’s leaders for embezzling more than $1 million funds for personal luxuries. Since it started, the corruption investigation has been marked by federal raids and criminal charges against 11 people linked to the UAW and Fiat Chrysler Automobiles. So far, nine convictions have been secured over breaking labor laws, taking kickbacks, bribes, and embezzlement. The crisis continues to raise flags over the future of the UAW — and how it will affect the GM strike.
Gaining loyal union membership has been a tougher sell in the US than in Europe and other parts of the world. Membership has been declining since the 1970s, with corruption scandals and strikes adding to worker frustration and declining public support. None of the “transplant” foreign automakers operating in the US have unionized workers. Volkswagen workers at the Chattanooga, Tenn., plant rejected UAW membership in June. Tesla chief Elon Musk continues to fight off moves by the UAW and complaints filed under state labor laws. A California judge ruled Friday that Musk and other company executives have been illegally sabotaging employee efforts to form a union. While these are considered unfair labor practices, Tesla doesn’t face any real penalties.
The economic trends started in the 1970s are continuing — closing plants in the US and opening them up again in other countries with cheaper labor and other costs; bringing in robotics to take over more of the assembly plant jobs; adopting the latest technologies to meet consumer demands, government regulations, and to gain competitive brand images to increase sales and profits. As economists have said in recent years, globalization, technology innovation, and corporate profits, are the defining elements in the future of corporations. Workers have less voice and are being pushed into looking for alternative futures for themselves and their kids. It’s a tough change to make for those coming from multi-generational families and communities that had done very well with auto industry jobs.
Management careers have also been hard hit over the past 30 years as well — with layoffs and forced geographic moves overseas disrupting the lives of thousands of low-to-mid-level management employees. High-level executives have also seen their share of turmoil since the Great Recession, with several surprising cuts being made as major automakers merge with former competitors and startup new business units to meet the fast-changing world of mobility. Shareholders expect to see better profit margins and stock prices, no matter what.
What to expect by 2030 part 2: What generation is most likely to lead the mobility transformation? General Motors CEO Mary Barra is confident her company will be taking a leading role in mobility services of the future. For those less interested in owning a car, or having to drive and park it everywhere, what about sharing an autonomous Chevy Bolt through your local Maven outlet? Just tap into your mobile app and have it show up in front of your workplace.
The big question becomes: Who will be the customer?
Millennials (about 23 to 38 years old in 2019) broke open barriers by waiting longer to buy their first car — and becoming rabid fans and riders with Uber, Lyft, Zipcar. There have been other on-demand mobility services in meal delivery, groceries, and other needed services for extremely busy people ready and willing to pay.
Some things are changing — with Millennials in the US buying property less than the two generations ahead — Generation X and Baby Boomers. They’re moving to cities and seeing rent, lease payments, and property values shoot up. They’d also lived through the Great Recession, and are carrying concerns over another bout of economic turbulence coming up.
But when it comes to buying cars, Millennials are becoming a lot like previous generations, though they are interested in trying out electrified models — battery electric, plug-in hybrid, and hybrid. And Millennials still make up the lion’s share of Uber and Lyft riders; though the next generation is taking its share of rides, too.
Generation Z — teenagers through age 23 — are still a bit young to determine what sort of economic impact they’ll be having on car sales and other markets. One thing they do have in common with Millennials is being challenging in the workplace. It’s very typical to talk to managers in their 40s through 60s and hear complaints about getting them to do their jobs as they’ve been asked to do — very different from their experience. Supervisors advise that you think a bit differently about where the “youngsters” are coming from. They do tend to be talented, hard-working employees, but it might take a bit longer — and employers are advised to help them find their own sense of purpose and meaning in their work.
A recent survey study by Allison+Partners suggests that changing definitions of transportation and an influx of new mobility solutions are paving the way for the birth of the “mobility culture.”
Gen Z has even less interest in getting their driver’s licenses than previous generations. They see cars as yet another appliance they’ll need to have access to someday that ranks up their with smartphones and gaming machines like Xbox. In the study, they said autonomous vehicles make a lot of sense, and 60 percent of them believe they’ll be using self-driving cars by 2030.
Owning their own prestigious car — whether that be a Tesla or a Lexus — doesn’t matter as much, or make as much sense. Coming of age as the recession finished up, and smartphones became the new norm, pragmatism is the benchmark. The Allison+Partners study concluded that Gen Z will be the first generation in large numbers to get rides from Waymo, Maven, Uber, Lyft, and the next iteration of offerings from Tesla, Volvo, Audi, BMW, Toyota, Honda, and other makers rolling out new options in connectivity, automation, electrification, and safety — along with mobility services of their own.
Mobility won’t be taking over by 2030, with new vehicle sales continuing to see growth in global markets — and concerns over safety and reliability will take several years to be alleviated, especially for autonomous vehicles. But the transformation appears to be occurring, with Gen Z taking the lead.
A few interesting news briefs:
Ford and Mahindra: Ford is lessening its presence in India, taking a 49 percent share to Mahindra’s 51 percent through a new joint venture managed by Mahindra in the troubled auto market. The two companies will continue working on developing battery-powered cars, but Ford is needing to scale back in a key global auto market that’s been plunging in sales for nearly a year (and one that rival General Motors left in late 2017). The Indian government has been issuing incentives to grow electric vehicle sales, which have been down to only about 2,000 a year — nowhere near what New Dehli wants to see for emissions targets and reliance on oil imports.
Tesla in China: Tesla’s Shanghai factory plant aims to start production this month but it is unclear when it will meet year-end production targets due to uncertainties around orders, labor, and suppliers. Tesla plans to produce at least 1,000 Model 3s a week from the new factory by the end of this year. The $2 billion factory gained government approval last month and is on schedule to start production in October, the sources said.
Amazon making biggest EV purchase ever: Michigan-based startup Rivian Automotive will be building and delivering 100,000 electric vans to Amazon over the next decade. The first 10,000 will start hitting roads in 2021 and completing the delivery the next year, with all 100,000 EVs fully operational in Amazon’s fleet by 2030. It makes for the largest EV purchase ever. Amazon chief Jeff Bezos said 100,000-unit fleet will eliminate 4 million metric tons of carbon emissions when fully operational.
Electrify America chargers: Volkswagen’s Electrify America announced yesterday that it will be offering Level 2 electric vehicle home chargers. Customers can now purchase the Electrify America Electric Vehicle Home Charger on Amazon for $499. The product is also accessible through electrifyamerica.com/charging-at-home. The company said its compatible with all electric vehicles available in the North American market today. It features a charging power of up to 7.6kW – about 6 times faster than the typical Level 1 charger provided to some new EV owners, depending on vehicle make and model.