What to expect from the General Motors strike’s tentative resolution, what Elon Musk is up to now, and how to encourage people to buy your eco-friendly cars: All this and more in The Morning Shift for Thursday, October 17, 2019.
GM and the United Auto Workers have reached a tentative agreement on a new contract, but that doesn’t mean the strike is over. Nothing’s set in stone yet.
First, we don’t know all the details about the contract yet. But it has what’s considered some solid wins for workers. Here’s The Detroit Free Press with a roundup:
Some details of the agreement were leaking out, and the creation and retention of 9,000 jobs is a boost from GM’s initial proposal to the union that offered a $7 billion investment in U.S. facilities over four years, resulting in 5,400 new or retained jobs.
Here are some other details of the proposed four-year contract:
Increases of 3-4% in wages and lump sum payments. Precise details of the raises were not known. In the 2015 contract, workers got a 3% wage increase on years one and three and 4% lump sum payments on the alternate years.
A ratification bonus of at least $9,000.
Detroit-Hamtramck Assembly Plant will remain open. The plant will build an electric pickup, but it is unclear how many jobs the pickup would create or retain. Some reports said the deal does not include production at Lordstown, Ohio, an assembly plant that, like Detroit-Hamtramck, was targeted to be idled.
Newer union workers who currently get only two weeks’ vacation a year will be able to take one of those weeks at a time of their choosing. In the previous contract, these employees were required to take both paid vacation weeks during scheduled plant shutdowns. Under the proposal, the second week of a plant shutdown would be considered a layoff and the workers could qualify for unemployment.
As the Free Press previously reported, a deal was struck on a path to permanent employment for temporary workers, a key UAW demand.
But it could still be a two long weeks before anything is completed, and the 48,000 striking workers could remain on the picket line until a satisfactory deal is ratified. Local union presidents and chairs will vote today to decide whether or not workers will return to their jobs prior to ratification, Bloomberg reports.
The UAW will gather local leaders to explain the tentative agreement that has been reached—a meeting that will be taking place today at 10:30 a.m. Those leaders will then vote to determine if the full membership of the UAW should vote to ratify the new contract. At that time, leaders will also determine if workers will remain on strike and, if not, when they will return to work.
If leaders decide to move forward with the ratification vote, they will take the potential new contract back to their individual chapters. From Bloomberg:
The process can be cumbersome; Local leaders — along with representatives from the union’s international headquarters — will conduct meetings in GM plants to brief members and answer questions.
Since some plants have two or three shifts of workers, they will schedule multiple meetings at different hours.
Voting will take place in the plants and during working hours to ensure the highest turnout, a key to ratification.
This is a process that could take several more weeks to accomplish, given the sheer amount of wild cards workers have had to contend with. Scandal involving UAW leaders, contentious issues regarding perma-temp workers, and general issues of confidence between the UAW and GM will likely keep this vote from being anything but simple.
As an auto manufacturer joining the all-electric party a little late, how do you get people interested in driving your car as opposed to, say, a brand that they’re already familiar with? You give ‘em money, of course!
With Volvo’s official announcement regarding its all-electric XC40 came a whole host of other promises too get people interested in the new SUV. Namely, that Volvo would compensate buyers for their charge. From Bloomberg:
Volvo is tying the launch of its first all-electric vehicle — the XC40 Recharge crossover — to a broader plan for shrinking the carbon footprint of its models by 40% through 2025. And it’s backing that pledge with a promise to pay the first year’s worth of charging costs for owners of its plug-in hybrids, starting with the 2021 model year.
That’s not a bad deal considering the fact that the costs of EV charging vary pretty drastically, depending on where and when you charge your car. Edmunds has a really great breakdown of how to calculate the cost of your charge. Some charging stations allow you to charge for free, but it’s not a guarantee—and charging during peak hours (like the afternoon) will cost more than if you were to charge at night. And the charging rules can get pretty complicated. Having a year of free charging would be a great way to decode the nuance of the charge.
Tesla has been added to the list of manufacturers allowed to operate in China, the country’s industry ministry reported on Thursday. The company has also received the certificate that will enable it to begin production at any time.
The $2 billion factory [Tesla] is building in the eastern Chinese city of Shanghai is its first car manufacturing site overseas.
Reuters reported earlier this month that Tesla plans to start production at its China factory this month. It is unclear when it will meet year-end production targets because of uncertainties around orders, labor and suppliers.
Tesla intends to produce at least 1,000 Model 3s a week from the Shanghai factory by the end of this year, as it tries to boost sales in the world’s biggest auto market and avoid higher import tariffs imposed on U.S. cars.
This was a pretty obvious progression, considering the fact that China excluded Tesla from the 10 percent car purchase tax earlier this year. Beijing is looking to start defining its own place within the greater automotive industry while also maintaining a focus on environmental standards.
The current defamation case against Elon Musk is about to get a little more complicated now that insurance company American International Group Inc. could get involved.
It’s a sticky situation, so we’ll let Bloomberg give you the details:
Elon Musk [...] has told lawyers representing the British cave diver suing him that he’s financially illiquid, according to a legal filing.
An attorney for Vernon Unsworth, who sued for defamation last year after Musk attacked him on Twitter, pressed the Tesla Inc. CEO’s lawyer last month for information on all insurance policies applicable to claims made in the suit. An exhibit filed Monday shows the two attorneys sparring over information regarding Musk’s ties with AIG.
“Given Musk’s sworn testimony that he is financially illiquid, Mr. Unsworth is entitled to know whether AIG has accepted coverage of the claims, denied coverage of the claims, or has reserved its rights to contest coverage of the claims,” Unsworth’s attorney wrote on Sept. 20. Musk’s lawyer wrote back the same day that AIG had reserved rights, without elaborating.
In short, financially illiquid basically means that Musk has plenty of assets that are worth a lot of money but very little actual cash in the bank.
AIG has opted not to comment on these claims, Bloomberg reports. Musk’s lawyer, Alex Spiro, said that the whole claim is a “non-event,” but there’s still a chance we’ll see AIG playing a role in the defamation case scheduled to begin on December 3.
A fine of $79 million, in fact. The company failed to meet 2017 fuel emissions regulations standards set by the government and now faces a civil penalty, Automotive News reports.
Of 18 major carmakers in the United States, 13 including Fiat Chrysler, failed to comply with fuel economy and greenhouse gas emissions standards for the 2017 model year without using credits, according to the National Highway Traffic Safety Administration.
The 2017 model fleet fell 1-1/2 mpg short of the 33.8 mpg standard based on yearly performance without including credits, NHTSA reported. The shortfall was 1/2 mile per gallon for the 2016 model year.
In the grand scheme of things, a $79 million fine for an automotive manufacturer that makes hundreds of millions in revenue each quarter is more like a slap on the wrist than a “you’re grounded for a week.”
This isn’t the first time FCA has had to pay a fine for its failure to meet standards, either:
After paying $77.3 million last year for a 2016 model year fuel-economy shortfall, a Fiat Chrysler spokesman confirmed Wednesday the company had received a letter on the 2017 penalty and has 60 days to pay the fine.
This gap in emissions regulations standards and the actual output by US automakers is being used by the Trump administration as reasoning to roll back or freezing vehicle emissions and mileage standards through until 2026.
Based on what we know so far, is this a good deal for UAW workers?