Automotive Industry Hot Topics with CAR President and CEO, Alan Amici – (11/03/2023)
On a bi-weekly basis, the Center for Automotive Research (CAR) welcomes our audience to decompress with our President and CEO, Alan Amici, as he covers and shares his thoughts on the latest Hot Topics happening in the automotive industry. If you would like to receive this bi-weekly insight into critical industry issues you and your organization are facing, sign up for our mailing list to get Hot Topics sent directly to your inbox.
Results from the UAW Strike:
Tentative agreements are in place for Ford, Stellantis, and GM. Now on to the rank and file for ratification. There are significant gains for the labor union – 25% wage increases, a return of COLA, increased retirement contributions, wage tier phase-out, and the right to strike over plant closings. Not a bad haul for the UAW. Also, part of the tentative agreement is commitments for future products. Ford has signaled there will be an $8.1 billion investment in products and plants. Stellantis will assign a mid-size truck to the idled Belvidere assembly plant in Illinois.
What’s next? The UAW plans to use this momentum to organize Toyota, Tesla, VW, and others. This won’t be easy as automakers will likely offer anticipatory wage increases as the UAW readies their plans. Stay tuned.
The Pause in EV Production:
EV demand appears to be softening. Economists point to high vehicle prices stunting demand. High loan interest rates and extended terms are exacerbating the situation. What steps should be taken? Slowing the EV production ramp is a logical move. Looking at global markets, EVs aren’t a matter of “if” but rather “when”. Slowing the EV production ramp will allow automakers to manage their capital investment spending while providing additional time for product and process changes. Design optimization and productivity improvements offer the best opportunities to reduce EV costs. A rapid build-out of the charging infrastructure is sure to help improve consumer confidence and spur demand.
There are two lessons here. First, transparency is of utmost importance. It is crucial to share all applicable data and videos with regulatory authorities if the industry is to build consumer trust in autonomous vehicles. Second, we still lack a robust method for demonstrating deployment readiness. The development of industry standards would be instrumental in addressing this challenge. These standards may not require legislative mandates if the industry is willing to collaborate and propose substantial guidelines for AV readiness. The domestic industry needs to address this quickly and in a meaningful manner or else expect to cede AV leadership to other countries.