Tesla is kicking its German Model Y production into high gear, the UAW has ended a strike at a Stellantis engine parts plant in Indiana, and GM’s robotaxi service — called Cruise — is expanding to Phoenix, Arizona and Austin, Texas. All that and more in The Morning Shift for Tuesday, September 13, 2022.
1st Gear: Tesla Turns Model Y Production Up a Notch
Tesla says that its move to push production numbers at its plant in Germany is “going well.” The company is boosting output of the Model Y at its Gruenheide plant near Berlin.
Tesla being Tesla, it didn’t give current production figures at the plant, but it did say the company built 1,000 cars per week during the summer at the plant that opened in March. The EV maker claims that’s about one-tenth of the factory’s full capacity.
The company plans to quintuple that summer output to 5,000 vehicles per week by the first quarter of next year. From Automotive News:
As its new factories in Gruenheide and Texas ramp up output, Tesla has forecast annual production of 2 million cars next year, ahead of its long-term goal of building 20 million vehicles a year.
The automaker said on Sunday that it also wants to reduce water consumption at the Gruenheide factory. Reducing the use of fresh water continues to be a key goal for the automaker following fears about water supply expressed by local residents.
According to Tesla, about 2.2 cubic meters (78 cubic feet) of fresh water are consumed in the production of a single car. The industry average is usage of almost 4 cubic meters (141 cubic feet) of fresh water per vehicle, Tesla added.
Tesla added that it plans to open a new battery plant at the Gruenheide site, but right now there’s no word on when that would become operational.
2nd Gear: UAW Gets a New Contract at a Stellantis Plant
They have a contract! Striking union workers at Stellantis’s Kokomo Casting Plant in Indiana ratified a new agreement with the automaker. It ended a work stoppage after negotiations broke down last week.
“Stellantis is pleased that members of UAW Local 1166 at the Kokomo, Indiana, Casting Plant have ratified a new local agreement,” Stellantis said in a statement. “Operations at the plant resumed with third shift on Monday, Sept. 12.”
It’s believed that a longer strike would have had a domino effect and severely threatened the company’s production throughout North America. From Automotive News:
More than 1,000 union members at the Kokomo operations went on strike Saturday, but the union and management reached a tentative agreement on a new local pact early Monday and workers ratified it on Monday.
Union members remained off the job while voting took place, a UAW spokeswoman said. The union posted an update to its website announcing the successful vote, but did not disclosed the vote count or share details about the agreement.
The UAW said Monday its bargaining committee stood strong with the support of the striking UAW Local 1166 members to win an agreement that will correct “unacceptable” working conditions.
UAW President Ray Curry said the agreement was a “testament to UAW solidarity.” and that “their working conditions will greatly improve.”
“The environment in the plant has deteriorated over the years due the company’s decision to save money by not properly maintaining or providing the proper HVAC in the plant,” Cindy Estrada, head of the UAW’s Stellantis department, said in a statment Monday.
Estrada added that the bargaining committee fought to win dozens of demands that members submitted to them.
3rd Gear: GM’s Cruise is Expanding
Self-driving car startup, Cruise, is planning to expand its robo-taxi business to two new cities: Phoenix and Austin within the next three months. The company, which is majority owned by General Motors, also thinks it will have $1 billion in revenue by 2025.
Cruise started charging fares for its ride-hailing business in June with a pilot program in San Francisco. The company’s CEO, Kyle Vogt, said the technology is performing well enough for Cruise to expand its reach. From Bloomberg:
“For the first time in eight years the technology for AV is no longer the bottleneck,” Vogt said Monday at a Goldman Sachs conference. “We’re in a position to grow and to do it very quickly.”
Cruise has a goal of growing its business to $50 billion in revenue by the end of the decade, making it a key piece of GM’s strategy to double its total sales to $280 billion by 2030. Cruise reported $51 million in sales in the first half of this year and an $868 million operating loss.
Bloomberg reports that this push comes after General Motors had to fix its software. A June accident in San Francisco made about a dozen Cruise cars stop at an intersection in the city. It jammed up traffic for nearly two hours.
4th Gear: Biden Pushing to Avoid Railroad Shutdown
The Biden administration is really trying to get railroads and unions to reach a deal to avoid a work stoppage. The President said a shutdown would pose “an unacceptable outcome” to the U.S. economy, and could cost $2 billion per day. From Reuters:
Railroads, including Union Pacific, Berkshire Hathaway’s BNSF, CSX, and Norfolk Southern, have until a minute after midnight on Friday to reach tentative deals with hold out unions representing about 60,000 workers. Failing to do so opens the door to union strikes, employer lockouts and congressional intervention.
U.S. Labor Secretary Marty Walsh is postponing travel to Ireland to remain in talks, the department said Monday.
“The parties continue to negotiate, and last night Secretary Walsh again engaged to push the parties to reach a resolution that averts any shutdown of our rail system,” a Labor Department spokesperson said. “All parties need to stay at the table, bargain in good faith to resolve outstanding issues, and come to an agreement.”
President Biden has actually appointed an emergency board to help break the impasse between the two parties.
A White House official told Reuters Biden has been in touch today with unions and companies to try to avert a strike, as have cabinet officials.
U.S. railroads account for almost 30% of cargo transport by weight and maintain about 97% of the tracks Amtrak uses for commuter rail. Widespread railroad disruptions could choke supplies of food and fuel, spawn transportation chaos and stoke inflation
Unions, which won significant pay increases, are pushing back on work rules that would require employees to be on-call and available to work most days. Railroads are struggling to rebuild employee ranks after slashing their workforce by almost 30% over the past six years.
5th Gear: The Carvana and Illinois Saga Continues
Another scheduled hearing between representatives from Carvana and the Illinois secretary of state took place this week. It’s another chapter in the legal saga that’s taken place over the used car retailer’s ability to sell cars in the Prairie State.
The whole story started back in May of this year, when the secretary of state suspended Carvana’s dealer license. The agency said its police unit had investigated numerous customer complaints. The police discovered that Carvana was in a pattern of failing to correctly transfer vehicle titles. The company also misused out-of-state temporary tags for the cars it sold.
Later that month, the agency stayed the suspension order, meaning Carvana could once again sell cars in the state as long as it followed “strict guidelines.” From Automotive News:
When additional consumer complaints emerged, the secretary of state again attempted to suspend the online retailer’s license in July, at which point Carvana filed for injunctive relief. That request was granted July 29 by Judge Bonnie Wheaton of the 18th Judicial Circuit Court in DuPage County, west of Chicago, temporarily nixing the agency’s ability to suspend or revoke Carvana’s license. A hearing, originally scheduled for the end of August, was moved to Wednesday.
The agency remains “in discussions” with Carvana over the status of its license and vehicle titling and registration problems following the hearing, Dave Druker, spokesman for the secretary of state, told Automotive News. The next public hearing is scheduled for Dec. 12, he added.
“The continuance of this week’s proceedings reflects Carvana’s consistent willingness to negotiate a resolution to the state’s concerns, and gives Carvana’s customers confidence that Carvana’s platform is available in Illinois,” Carvana said in a statement to Automotive News.
Carvana now cannot handle license plate or temporary tag permits. The retailer has to go through a licensed Illinois remitter, a third-party that is licensed to process title transactions, to get those two things to the agency. The company must also have the vehicle’s title on hand when it goes to a remitter.
“The restrictions they have to work under now [are] what we originally asked for,” Druker said to Automotive News. “That hasn’t changed.”
Reverse: YOU GET A CAR
Neutral: Does Oprah Know What She Did to Society?
I don’t know what it is about the “You Get a Car” episode of Oprah, but on that day in 2004 it entered the cultural zeitgeist and never really left. It’s still referenced to this day. It’s in movies, on TV, in tweets, etc. I just want to know why this dumb bit captured the imagination of the world. I suppose I’ll never really know, but it will always bother me.