This is The Morning Shift, our one-stop daily roundup of all the auto news that’s actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn’t your time more important?
1st Gear: It’s The Economy, Stupid
There was this idea called “peak car” that cropped up in the post-Carpocalypse era when there was a sudden drop in car buying and, more importantly, car driving. Pundits reasonably wondered if we hadn’t reached a point where there would be a permanent stagnation in miles driven as consumers adjusted to commuting less and taking more transit.
A glut of cheap oil, an expanding economy, and a lot of good cheap cars mean that people are driving in droves.
Travel will rise this year to potentially top the 2007 peak of 3.03 trillion miles, Alan Pisarski, a transportation analyst who has advised states from Virginia to Arizona, said by phone from Lake Barcroft, Virginia, March 17. “I would’ve said that even without gasoline prices dropping, but that makes it all the more certain.”
This, of course, is sort of a bad thing if you don’t build cars or sell tires.
I know we’re an automotive site, but we’re also an enthusiast site and we’re also human beings, and more miles driven isn’t a good thing for most people.
First, the reason why we have so much cheap oil is largely a decision by OPEC (read: Saudi Arabia) to drive the prices down long enough to discourage U.S. domestic production of oil. Why do they want to do that? Because they want us dependent on them for a long, long time and have so much money they can take a three-year hit.
Second, even if that wasn’t the case, it’s not like the roads are filling up with vintage BRE Datsuns, it’s just commuters in beigemobiles and SUVs. Commuter Culture is antithetical to car culture.
People who would rather not drive to work shouldn’t have to drive to work. We should aim to build a society where there’s a reasonable alternative to driving for people who don’t want to drive. I love driving, I love cars, I love that by living in a city I don’t have to drive to work, I love that I can go drinking and not worry about having to get in a car.
This isn’t good news. Peak Car isn’t happening today, but it should happen.
2nd Gear: GM Recall Deaths Hit 74, Exact Number GM Said It Wouldn’t Hit
Gotta give Reuters credit for restraint in not sending a case of crow and a barrel of forks to the fine folks at GM.
Why? Reuters published a report in June of 2014 that said, from their review of the national database that tracks fatal crashes, there were at least 74 deaths similar to the ones described by GM related to their faulty ignition systems.
How did GM react to this news? It said there were only 13 deaths they could find and that it used “more detailed” information than Reuters and Reuters was basically wrong.
GM today announced that the ignition switch death toll has reached 74 according to the lawyer running their compensation fund.
While this number may go up, you gotta give credit to Reuters for fucking nailing it, but you can also understand why they didn’t make a big deal out of it yesterday. I think everyone hoped they were wrong, that so many people didn’t die for a part that cost a few dollars. It’s tawdry to gloat about being right about something so awful.
So, since they can’t, I will. Ryan McNeil, Paul Lienert, Marilyn Thompson, and Peter Henderson did great work. They stood up to GM’s estimate and they appear to be right. Even if they had been wrong, they did the research that needed to be done.
3rd Gear: Act One: Not Everyone Is Making Out In The Car Boom
This is a three-act story on U.S. labor and the automotive market that will begin this this strong piece from the WSJ about the realities of the modern U.S. automobile and how “American” it really is.
The U.S. imported a record $138 billion in car parts last year, equivalent to $12,135 of content in every American light vehicle built. That is up from $89 billion, or $10,536 per vehicle, in 2008—the first of two disastrous years for the car business. In 1990, only $31.7 billion in parts were imported.
The trend casts a cloud over the celebrated comeback of one of the nation’s bedrock industries. As the inflow of low-cost foreign parts accelerates, wages at the entry level are drifting away from the generous compensation packages that made car-factory jobs the prize of American manufacturing.
At an American Axle & Manufacturing Holdings Inc. car-parts factory in Three Rivers, some new hires are paid as little as about $10 an hour, roughly equivalent to what the local Wal-Mart will pay. John Childers, a 38-year-old assembly-line stocker, said he is grateful for the job but finds it tough to get by on the money he and his fiancée make at the plant.
“Lower class is what we are,” he says. “Let’s be honest.”
The idea that everyone working a machine is somehow making sweet, sweet union dollars and going home to a mansion is wrong. There are a lot of Americans who work hard every day and aren’t sharing in the economic growth many of us are enjoying.
4th Gear: Act Two: Not All Wages Are Created Equal
It’s also not an issue of union versus non-union labor, even though there are some Koch Bro-funded organizations who’d want you to think so.
A new study by Reuters shows that, while Mercedes is the biggest payer at $65-an-hour for labor costs in the United States (that’s not wage, that’s the total cost for labor), Volkswagen and BMW were the lowest payers at $38-an-hour and $39-an-hour, respectively.
It makes sense that the UAW focused on Volkswagen, isn’t it?
GM, Ford, and FCA are somewhere near the middle, at $58, $57, and $48-per-hour, respectively. Curious that the unions are right in the middle. Toyota is at $49-per-hour and Hyundai is at $42-per-hour.
Obviously, these plants are in different parts of the country with differing costs of living, but it’s still an interesting look at the wide range of labor spending.
5th Gear: Act Three: Time For A New Lower Tier?
We’ve spent a long time talking about the two-tier wages in the U.S. for unionized car workers ($28-per-hour for higher tier and $19.28-per-hour for the lower tier) and how much the unions despise it. Specifically, many in the UAW hate the idea of paying different people different wages for the exact same work.
It is logical.
So what do the automakers want to do in order to close the gap between them and the Japanese/Korean automakers? Offer a third tier.
Asking for a lower-wage third tier could be a tough sell with union negotiators at a time of growing disparity in U.S. incomes. UAW leaders are already under pressure from their 80,000 auto-making members to eliminate the second tier or at least get them a raise. Paying less to union members — even newly hired workers — isn’t on the UAW’s agenda.
The automakers “are putting forth what they would want if they could just write a new labor agreement on their own,” said Art Schwartz, a former GM negotiator who is now president of the consulting firm Labor and Economics Associates in Ann Arbor, Michigan.
A third tier of workers may not be all bad news for the union, because some of those employees could do work that has been outsourced to parts suppliers and it would bring that work back inside GM plants. But since the UAW argues that the second-tier wage isn’t really enough to support a family, members don’t want to encourage even-lower pay or more divisions among workers on the factory floor.
It sort of ties everything together, doesn’t it? The supplier issue. The low wages. The different wages. It’s a lot for the UAW to sort out.
Reverse: More Miles Driven Isn’t A Good Thing
The worst oil spill in U.S. territory begins when the supertanker Exxon Valdez, owned and operated by the Exxon Corporation, runs aground on a reef in Prince William Sound in southern Alaska. An estimated 11 million gallons of oil eventually spilled into the water. Attempts to contain the massive spill were unsuccessful, and wind and currents spread the oil more than 100 miles from its source, eventually polluting more than 700 miles of coastline. Hundreds of thousands of birds and animals were adversely affected by the environmental disaster.
Neutral: Are You Driving More?
Why or why not?
Photo Credit: Getty Images