Driving Transactions
Sunday, April 21, 2024
News Shorts

UAW Strike Pending:
Nearly 150,000 autoworkers may strike by the end of this week if negotiations between the union and three of Detroit’s biggest OEMs—Stellantis, Ford, and General Motors, or the “Detroit Three”—continue at its current impasse. The work stoppage might be felt in as little as a month, according to Fortune, as the companies collectively have enough inventory for up to 70 days. The parties have through 11:59 p.m. on Thursday to come to an agreement on a new four-year contract. On the table are salary bumps, increased security and worker protections, the return of defined benefit pensions over 401(k)s for new hires, fast-tracking of so-called temporary workers to permanent, and a 32-hour workweek with overtime pay after 40 hours. According to union officials, members are already working more than 60 hours per week to make ends meet, although OEM spokespeople have said that permanent workers’ salaries regularly top six figures with overtime and profit sharing. If they strike, the US Chamber of Commerce estimates that the Detroit Three could lose nearly $1 billion collectively over 10 days. Either way, expect reduced supply to lead to increased prices, especially if the strike drags on and production can’t return quickly enough.
Sources: Reuters, Fortune, Wall Street Journal, US Chamber of Commerce

EV Sales Cross Critical Threshold:
Sales of electric vehicles represented 7.2 percent of all new vehicles purchases in Q2 2023, a new record and one that might portend a critical benchmark for future sales. According to Bloomberg, the 5 percent sales threshold is a significant one, as it “signals the start of mass adoption when technological preferences rapidly flip.” Vehicle sales aside, the EV industry is still in its tempestuous adolescence, as dealers and manufacturers try to find the balance between demand and production (some dealers are stuck with units they can’t sell while others can’t get them in quickly enough), pricing matches consumer tolerance and tax credits (prices have been falling), and—the elephant in the room—the infrastructure needed to handle the influx of these vehicles. Even Secretary of Energy Jennifer Grandholm had her own bad experience with EV charging during a recent road trip. However, with faster adoption comes more innovation, which could help drive the production of more facilities. It’s still not great if you’re a renter or don’t have a garage, but faster charging is coming.
Sources: Kelley Blue Book, Bloomberg, NPR

Economy Might Be Leveling Off:
According to the National Federation of Independent Business (NFIB), an organization that focuses on small businesses, optimism among small business owners declined slightly (0.6 of a percent) last month, driven primarily by the continued inflation and longstanding job openings, according to the NFIB’s Small Business Optimism Index. Eight percent of owners cited labor costs as their top business problem, down two points from July, and 24 percent said that labor quality was their top business problem. While this news is disappointing, major economists are more hopeful that the overall economy will avoid a significant recession, which has been predicted for the past few years. Consumer spending has dipped a bit over the summer, but it remains strong post-COVID. Prices driven up by inflation in recent years remain high, although inflation is not causing them to rise as quickly as they did in 2021. Of course, the economy is a mixed bag of indicators and factors, and it will vary based on region and industry, but it’s a bearing for planning and saving for the future.
Source: NFIB

Mercedes to Debut New Charging Facilities This Fall:
Mercedes-Benz says it’s opening its first high-power charging stations this fall as part of its long-term plan to expand global charging infrastructure. Charging hubs will go into operation in Atlanta, Chengdu (China), and Mannheim (Germany) by the end of next month, with the goal of increasing that to more than 2,000 high-power charging points by the end of 2024, and more than 10,000 by the end of the decade. While the stations will be open to drivers of all brands, the company says that Mercedes drivers will be able to reserve a spot and will be given priority. Facilities will primarily be at Mercedes dealerships, and waiting drivers will have access to refreshments and restroom facilities.
Source: Mercedes-Benz Media