Onshore production already mostly happens, and it’s for superior non Big 3 vehicles like Toyota and Tesla. To me, it looks like the Big 3 autos are floundering severely, are the only ones unionized, and this strike / 40% pay increase demand is only going to further cripple the big 3’s ability to compete in the market. Ford and GM have already completely ceded sedans while Chrysler is a hollow shell
I'm not sure I'd call Tesla "superior" to the "Big 3"
Pointing out the endless flaws in Tesla cars that have rolled off the line (joints that don't quite align, slight blemishes etc) are a running joke for many of its detractors
Not to mention the absolute clown fiesta of Elmo's "Cybertruck"
It is far superior in number of cars sold to the Big 3, which is what matters. (The Big 3 barely sell more "vehicles," but that's mostly trucks, not cars — Tesla beats them in every category in which it competes.)
Well, regulators in many countries and states have signaled that ICE is on the way out. If you look at market share among BEVs domestically, Tesla is very dominant, over half the market.
Let's be a bit more specific. GM made $8.9 billion last year on $157 billion of revenue, a 5.7% sliver. A large portion of the costs to earn that revenue is labor, and they are asking a 40% increase of those costs, while GM had said 20%. This is a company with $118 billion in debt, which is increasingly going to roll over to much larger interest payments from now on, due to the Fed Funds rate of 5.25%. And they're trying to reinvest those profits into the transition to EV. If they don't do that, they're dead. This is also a company that made profits before going bankrupt just 15 years ago, which our taxes had to pay for. I don't want to see employees out of jobs ("every auto job is a good job" -UAW), nor do I think UAW is entirely well meaning when they've been shown trying to weaken EPA regulations[0] so they can pump out more polluting Camaros and Cadillacs for the past decade while Tesla created EV's.
If they cannot pay their employees a fair wage someone else will. There is no need to cry for the rich overlords and lament their lack of more profit.
This is just nonsense, the point of capitalism is to extract value efficiently, if Big 3 cannot, then other companies will. There is no in between or buts.
No one will pay them a fair wage because there will no plants for them to work in. The US manufacturers will simply ramp up offshoring of entire vehicles to China. The new Lincoln SUV is an entirely in house design from Changan motors soup to nuts. You can fully expect this to become common for US brands.
Past performance is not a guarantee of future results.
There's a huge wave of increased support for labor in the US right now. It's definitely not a good idea to bet on any particular area remaining un-unionized.
There is zero chance non-us car factories unionize. There is nothing stopping them from closing the factory and moving internationally. The same isn’t true for the big 3.
Sure there is: whatever reasons led them to build factories in the US in the first place.
And for, say, German automakers, they already have unionized workforces outside the US.
This whole narrative of "we cannot possibly try to improve anything for our people, because any time we do the wealthy overlords will move their business/money/etc overseas" is demonstrably bullshit, and always has been. It doesn't hold up for raising taxes on the wealthy, it doesn't hold up for unionization, and it won't hold up for whatever the next thing people like you try to use it to argue against will be.
Because the C-suite are the people making the big decisions which resulted in the huge profits.
The worker who attaches doors to the car on the shop floor had almost zero impact on the surge in profits because they are very restricted in scope of tasks.
And yet those decisions would remain inert thought experiments without the workers, so maybe you, magic c suite geniuses aren't as unilaterally crucial as you think you are? Those workers did all the material enacting of those illustrious "big decisions". Record profits? Record wages.
Inert thought experiment is one way to cope with this reality.
How are the Detroit automakers, which are the only unionized ones meant to compete with the companies that completely ignore fair wages and don't even have unions begging for them?
I'm not against paying people fair wages but automakers aren't exactly train companies that run at a loss and for the public good (being propped up by the government)
I guess we could prop up automakers with tax funds and pay fair wages and somehow ignore all the other market forces but... Why? We already prop them up with subsidized roads and infrastructure...
Why should we subsidize auto makers with exploitative labor if they are already subsidized by roads, infrastructure, bailouts and still claim struggle?
let the market dictate their death. it's just those free market forces. and if it's a matter of national security that we make autos then it answers itself; some kind of military subsidy.
Exploitative labor seems like a silly thing to _justify_ as a free market force.
I agree we should stop subsidizing our automakers because it's clearly not working out and they are still exploiting labor and the goodwill of the government building roads etc
Because the C-suite are the people making the big decisions which resulted in the huge profits.
They aren’t the ones making the cars, though. Your whole point is nonsense. It’s maybe an argument for paying CEOs 10 or 20 times the average worker’s salary, certainly not for the stupid 20+ millions we see.
Comments
Onshore production already mostly happens, and it’s for superior non Big 3 vehicles like Toyota and Tesla. To me, it looks like the Big 3 autos are floundering severely, are the only ones unionized, and this strike / 40% pay increase demand is only going to further cripple the big 3’s ability to compete in the market. Ford and GM have already completely ceded sedans while Chrysler is a hollow shell
As stated in the article the labor cost is less than 5%. It won't matter except for shareholder revenue.
Where in the article does it say that?
I'm not sure I'd call Tesla "superior" to the "Big 3"
Pointing out the endless flaws in Tesla cars that have rolled off the line (joints that don't quite align, slight blemishes etc) are a running joke for many of its detractors
Not to mention the absolute clown fiesta of Elmo's "Cybertruck"
It is far superior in number of cars sold to the Big 3, which is what matters. (The Big 3 barely sell more "vehicles," but that's mostly trucks, not cars — Tesla beats them in every category in which it competes.)
Where are the new Ford, GM, and Chrysler sedans to be found anywhere? Outcompeted. What was the best selling SUV in the US? Model Y.
Or how about the obvious future of just EV's in general? Tesla at ~350k sales, Ford MachE and GM Bolt aren't even scraping 10k.
Well, regulators in many countries and states have signaled that ICE is on the way out. If you look at market share among BEVs domestically, Tesla is very dominant, over half the market.
The big 3's profits were $250 Billion over the last 10 years. The idea that paying their workers fairly is going to cripple them is nonsense.
Let's be a bit more specific. GM made $8.9 billion last year on $157 billion of revenue, a 5.7% sliver. A large portion of the costs to earn that revenue is labor, and they are asking a 40% increase of those costs, while GM had said 20%. This is a company with $118 billion in debt, which is increasingly going to roll over to much larger interest payments from now on, due to the Fed Funds rate of 5.25%. And they're trying to reinvest those profits into the transition to EV. If they don't do that, they're dead. This is also a company that made profits before going bankrupt just 15 years ago, which our taxes had to pay for. I don't want to see employees out of jobs ("every auto job is a good job" -UAW), nor do I think UAW is entirely well meaning when they've been shown trying to weaken EPA regulations[0] so they can pump out more polluting Camaros and Cadillacs for the past decade while Tesla created EV's.
[0]https://www.reuters.com/business/autos-transportation/uaw-wa...
If they cannot pay their employees a fair wage someone else will. There is no need to cry for the rich overlords and lament their lack of more profit.
This is just nonsense, the point of capitalism is to extract value efficiently, if Big 3 cannot, then other companies will. There is no in between or buts.
No one will pay them a fair wage because there will no plants for them to work in. The US manufacturers will simply ramp up offshoring of entire vehicles to China. The new Lincoln SUV is an entirely in house design from Changan motors soup to nuts. You can fully expect this to become common for US brands.
Actually. No one else will.
UAW was unable to unionize non-big 3 factories in the US.
Past performance is not a guarantee of future results.
There's a huge wave of increased support for labor in the US right now. It's definitely not a good idea to bet on any particular area remaining un-unionized.
You’re not getting it.
There is zero chance non-us car factories unionize. There is nothing stopping them from closing the factory and moving internationally. The same isn’t true for the big 3.
Sure there is: whatever reasons led them to build factories in the US in the first place.
And for, say, German automakers, they already have unionized workforces outside the US.
This whole narrative of "we cannot possibly try to improve anything for our people, because any time we do the wealthy overlords will move their business/money/etc overseas" is demonstrably bullshit, and always has been. It doesn't hold up for raising taxes on the wealthy, it doesn't hold up for unionization, and it won't hold up for whatever the next thing people like you try to use it to argue against will be.
Thank you!
GM gave all the hourly employees a $12,750 bonus check this year because of company profits.
They big 3 currently have $354 Billion in debt.
I mean, the C-suite have had a 40% pay increase, why shouldn't the worker have the same?
Supply and demand
Hence the strike, which changes worker supply.
Because the C-suite are the people making the big decisions which resulted in the huge profits.
The worker who attaches doors to the car on the shop floor had almost zero impact on the surge in profits because they are very restricted in scope of tasks.
And yet those decisions would remain inert thought experiments without the workers, so maybe you, magic c suite geniuses aren't as unilaterally crucial as you think you are? Those workers did all the material enacting of those illustrious "big decisions". Record profits? Record wages.
Inert thought experiment is one way to cope with this reality.
How are the Detroit automakers, which are the only unionized ones meant to compete with the companies that completely ignore fair wages and don't even have unions begging for them?
I'm not against paying people fair wages but automakers aren't exactly train companies that run at a loss and for the public good (being propped up by the government)
I guess we could prop up automakers with tax funds and pay fair wages and somehow ignore all the other market forces but... Why? We already prop them up with subsidized roads and infrastructure...
Why should we subsidize auto makers with exploitative labor if they are already subsidized by roads, infrastructure, bailouts and still claim struggle?
let the market dictate their death. it's just those free market forces. and if it's a matter of national security that we make autos then it answers itself; some kind of military subsidy.
Exploitative labor seems like a silly thing to _justify_ as a free market force.
I agree we should stop subsidizing our automakers because it's clearly not working out and they are still exploiting labor and the goodwill of the government building roads etc
They aren’t the ones making the cars, though. Your whole point is nonsense. It’s maybe an argument for paying CEOs 10 or 20 times the average worker’s salary, certainly not for the stupid 20+ millions we see.
But then who's gonna make oversized pickups?