The Auto Unions Are Like A Weird Version Of Downton Abbey

Illustration for article titled The Auto Unions Are Like A Weird Version Of Downton Abbey
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1st Gear: And Dennis Williams Is Like Carson

We’ll see if I stretch this analogy so far that I alienate both automotive industry analysts and fans of English period dramas...


The UAW has fared well over the last few years with big bonuses and nice payouts. However, many of the workers have been trapped in a two-tier system that sees older workers at a generous $28-per-hour wage and new workers stuck at $19-per-hour.

It’s rare for people to move from the lower tier to the higher tier and, in most cases, workers at the higher wage haven’t gotten a raise in more than ten years.

Think of the older workers as the Mr. Carsons and Mrs. Hughes of the world, at a higher and respected level but with nowhere to go. The second tier of workers are the footman and kitchen staff, either waiting for someone to die (or get arrested) to move up, or having to choose a life elsewhere. On top of that, you have the corporations (the rich upstairs folks) who, while they care about their workforce, aren’t exactly tripping over themselves to help out. I mean, they gave them three whole days off last year!

Here’s a more conventional look from the WSJ that outlines new UAW President Dennis Williams’s challenge:

The UAW convention has long been a pep rally heading into negotiations, but Mr. Williams in a tough spot at this year’s meeting. If he doesn’t take a hard line, his base will be demoralized. If he commits to abolishing the tiers, he paints himself into a corner before negotiating with Big Three executives uninterested in cost increases.

After decades of facing their own gap—a labor cost gulf of as much as $35 an hour vs. nonunionized competitors, such as Toyota Motor Corp.—GM, Ford and Chrysler’s all-in U.S. compensation is close to parity with foreign rivals.


And Mr. Bates totally killed all those people, right? Am I right? Dude is a murderer.

2nd Gear: Toyota Is Going To Mexico, Because Currency

Illustration for article titled The Auto Unions Are Like A Weird Version Of Downton Abbey

One of Toyota CEO Akio Toyoda’s best moves was deciding, in the wake of the company’s rapid expansion and subsequent quality problems, to pause building new plants until the company got its shit in order. So far, it seems to have worked.

According to Reuters, the pause on building new plants will end when Toyota presses play on a new plant in Mexico to build the Toyota Corolla. We’ve already documented why Mexico is attracting so much foreign auto investment, but Toyota is particularly in a good position to take advantage of Mexico.


In particular, Toyota has benefited the most from a weak yen in terms of exporting cheap cars and important dollar dollar bills (or euro euro notes or whatever). Eventually, the yen is expected to appreciate and at that point Toyota is going to want to be building cars somewhere else. Not to mention, with issues ongoing on West Coast ports, a little diversification doesn’t hurt.


3rd Gear: NHTSA Finally NHTSAing

Illustration for article titled The Auto Unions Are Like A Weird Version Of Downton Abbey

Having to adjust to the idea of the National Highway Traffic Safety Administration actively doing its job which, in this case, seems to be redoing some of the work it already did. Per David Shepardson:

The auto safety agency said it is reviewing Nissan’s recall in March 2014 of 989,701 2013-2014 Altima, Leaf, Pathfinder, and Sentra, 2013 NV200, 2013 Infiniti JX35 and 2014 Infiniti Q50 and QX60 vehicles because the occupant classification system software may incorrectly classify the passenger seat as empty, when it is occupied by an adult.

Since the recall was launched, NHTSA has received 124 complaints alleging problems with the system after the recall repairs and in some cases other OCS related repairs were made by Nissan dealers. “The majority of the complaints allege the passenger air bag status light stays on (i.e., indicating passenger air bag is turned off) for adult front passengers. Some of the complaints state the dealers have made multiple repairs but the problem still persists,” NHTSA said. NHTSA’s investigation is to determine if Nissan needs a new recall fix.


If last year was the year of the recall, this might be the year of the re-recall.

4th Gear: Chrysler To Build A Plug-In Minivan

Illustration for article titled The Auto Unions Are Like A Weird Version Of Downton Abbey

FCA is the automaker with the least investment in alternative energy, a victim of Fiat’s disinterest and Chrysler’s perpetual orphan status. That has to change if FCA is ever going to meet fuel economy standards, and it sounds like that’s going to include a plug-in hybrid version of their popular line of minivans.

Hybrid SUVs have largely been failures, so why would a hybrid minivan work? From the Freep:

Analysts say an electric minivan makes a lot of sense because of the driving habits of minivan owners and the size of the vehicle offers a lot of space to store the batteries. The trick will be ensuring it remains affordable.


Have you ever seen a minivan go faster than 35 mph?

5th Gear: Pirelli Is Going Chinese

Illustration for article titled The Auto Unions Are Like A Weird Version Of Downton Abbey

Massive Chinese chemical and tire manufacturer ChemChina is wrapping up its plans to buy Pirelli and take it private by partnering with the Italian company’s biggest investor Cam Finanziaria SpA.

This makes sense for both companies, per Bloomberg:

The purchase would be the biggest deal in Italy by a Chinese company and allow Beijing-based ChemChina to leap onto the international stage with Pirelli’s high-end car tires.

In the transaction, the Italian company will double the volume of its truck-tire business through a combination with ChemChina’s operations, adding size as Europe’s top-two tiremakers, Michelin & Cie. and Continental AG, seek to expand with acquisitions, particularly in Asia.


Of course, by trying to buy the tire company they’re causing the value to go up, which makes it harder (or at least more expensive) to get the number of shares they need to take it private.

Reverse: Ironically, It Was A Slow Birth

On this day in 1937, Craig Breedlove, the first person to reach land speeds of 400mph, 500 mph and 600 mph in a jet-powered vehicle, is born.



Neutral: Who Is In The Best Position Going Into UAW-Big 2.5 Negotiations?

The UAW or the automakers? Why?

Photo Credit: Getty Images

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stuck at 38k a year? that not even enough to buy the booze I drink at lunch before heading back to the plant.