Auto Industry News: UAW Strike Ends, EV Investments Cool, & Cruise Takes A Time-Out

After 41 days of striking, it appears Detroit autoworkers will be heading back to work. Company negotiators and union leaders scribbled out exhausted signatures on tentative contracts this past week, after the UAW cranked up the pressure in a blistering final salvo. The Engine Block has the details on how the stand-up strike’s endgame played out, as well as some of the record concessions awarded to union workers.

Plus, the auto industry executed a whiplash-inducing braking maneuver on EV investments this past week, autonomous leader Cruise lost its license to self-drive in San Francisco, and maybe Dodge isn’t calling it quits on ICE muscle cars?

Up is down, and we’re all kinds of turned around. Let’s dig in and try to find some sense.

UAW Strike Coming to an End

It was another wild week in Detroit, as the UAW executed its endgame strategy with an impressive final flourish. After applying pressure to automakers’ already stinging wounds, UAW president Shawn Fain will wrap up the month with three tentative – yet, historic – contracts in hand.

The last few chapters of this ongoing saga moved rapidly; here’s a quick play-by-play.

Monday

The week opened with a surprise stand-up strike at Stellantis’ largest plant, Sterling Heights Assembly, which produces the money-making RAM pickup. Nearly 7,000 union members walked out of the factory, just mere days after Fain announced bargaining progress with the automaker.

Stellantis said it was “outraged” by the action, citing the “new, improved offer” it made with 23% wage increases and nearly a 50% increase in retirement savings plan contributions. “Following multiple conversations that appeared to be productive, we left the bargaining table expecting a counter-proposal, but have been waiting for one ever since.”

The union shared a different view, calling the automaker’s offer “the worst proposal on the table” despite being the player with “the highest revenue… the highest profit margins, and the most cash in reserve.”

Analysts estimated the plant shutdown would cost Stellantis about $110 million a week in earnings.

Tuesday

Tensions ramped up even more the following day when union president Fain set his sights on GM. Over 5,000 UAW workers walked out of the automaker’s Arlington assembly plant, home to the highly profitable Chevy Tahoe, Chevy Suburban, GMC Yukon, and Cadillac Escalade.

The move was timely, as it came on the same day GM reported its third-quarter financial results to investors. The automaker had already estimated a $600 million hit to its earnings before interest and taxes, with a roughly $200 million/week future loss. Analysts projected the new walkout to double that strike cost to $400 million/week.

Wednesday

As the UAW prepared to add a Ford walkout to the week’s list of escalations, a surprise twist occurred instead. On Wednesday, Fain announced a tentative contract with the automaker – one which boosts UAW worker pay by 25% over the span of nearly five years. (When adjusted for compounding and cost-of-living mechanisms, Reuters reports the increases actually crest 33%.)

In addition to the wage hike, the union succeeded in eliminating lower-pay tiers for workers, secured certain agreements for new battery plant employees, and received the right to strike over future plant closures. Fain said temp workers with the lowest wages would see some of the biggest raises – more than 150% over the contract term.

Once union leadership approves the deal, it will need to be ratified by majority vote by the 57,000 members at Ford.

Friday, Saturday & Sunday

Feeling the pressure from Ford’s deal, GM and Stellantis headed back to the bargaining table on Friday. While both automakers agreed to match the 25% wage hikes, they were still hammering out details regarding other demands. By Saturday, it became clear who had the more productive talks. While the UAW inked a tentative contract with Stellantis, it escalated its strike with GM by issuing a stand-up order to workers at the Spring Hill assembly and propulsion plants.

The Stellantis deal includes the aforementioned 25% wage hike, along with pension enhancements, the right to strike over plant closures, historic wins for temporary workers (which make up about 12% of Stellantis’ workforce), and a commitment to bring the idled Belvidere Assembly plant back online. In a first for the union, it also won the right to strike over product and investment commitments.

“We truly believe that we got every penny possible out of this company,” Fain said. “We left nothing on the table.”

While the weekend ended with GM the odd man out, sources close to the matter say a deal was reached with the final automaker this Monday morning, October 30. No details are available yet, but sources confirmed GM agreed to the 25% wage increase and a reinstatement of the 2009 cost-of-living adjustment formula.

OEMs Pulling Back on EVs

Perhaps unsurprisingly, both Ford and GM revealed in this week’s earnings calls that they were pulling back on their EV investments.

Ford revealed worse-than-expected EV losses, despite rising sales volume. In fact, the company lost an estimated $36,000 on every EV it delivered in the third quarter – a notable uptick from its $32,350 loss-per-EV in Q2. As a result, the automaker is trimming EV production and delaying battery plant investments, scaling back to the tune of about $12 billion.

A similar story unfolded at GM. CEO Mary Barra announced the company was “rebooting” its EV strategy. In addition to delaying some future programs so engineers can find ways to lower vehicle costs, the automaker also decided to change from a full-speed-ahead approach to one that matches production to demand. Barra also scrapped an EV-alliance with Honda in favor of bringing back the Chevy Bolt – using low-cost, Chinese batteries. The news, which comes on the heels of an announcement to delay retooling the Orion assembly plant for electric Silverados, helped push GM’s share price to its lowest level in three years.

The ongoing strike and new labor costs certainly factored into these decisions, but even non-union players are showing trepidation. Battery maker LG Energy Solution cautioned its own investors last week that EV demand was cooling in the face of economic uncertainty. The company said it expects slower revenue growth in 2024; its shares tumbled 9%.

Even Telsa, which has instigated matters with its aggressive price-chopping, expressed worry over rising interest rates and global economic conditions. CEO Elon Musk recently told investors he was slowing down on Mexico giga-factory plans and told them to temper their expectations for the Cybertruck.

In Case You Missed It…

On Tuesday, The Drive published a special report claiming Dodge isn’t quite ready to throw in the towel on internal combustion muscle cars. In fact, according to a source “connected to a supplier with firsthand information of Dodge’s production plans,” the next-gen Charger will see a two-pronged rollout: one model powered by electric batteries and the other by the new GME-T6 3.0-liter Hurricane inline-six. Stellantis did not confirm the rumors – but it also did not outright deny them.

Cruise Forced to Press Pause

The self-driving tech company under the GM umbrella took a hit last week when California regulators suspended its license to operate driverless cabs in San Francisco. The state’s DMV said the vehicles presented an “unreasonable risk” to the public and accused the company of misrepresenting the technology’s safety.

It’s worth noting that city officials have been shouting this exact refrain since Cruise was first given license to zip around the Bay Area. They have continually argued the technology isn’t yet ready for such freedom, pointing to dozens of incidents where robotaxis clogged up traffic, performed unsafe or illegal maneuvers, impeded emergency vehicles, and even caused collisions.

The state agency’s decision came after a very publicized incident in which a Cruise vehicle struck a pedestrian who had already been injured in a hit-and-run. While the robotaxi braked hard to minimize impact, it also tried to pull over as part of an automated safety maneuver. Unfortunately, the woman was trapped under the vehicle at the time and dragged nearly 20 feet at a speed of up to 7 mph. California DMV officials say Cruise withheld this information during meetings and only learned of it later from NHTSA.

While Cruise disputes the accusation, insisting it handed over all video of the incident, the technology company decided to pause driverless operations across all of its fleets – not just San Francisco – in response to the event. “The most important thing for us right now is to take steps to rebuild public trust,” Cruise said in a post on X/Twitter, noting it will use the time to examine processes, systems, and tools.

California’s decision came mere hours after the investor meeting in which GM CEO Mary Barra said Cruise vehicles were safer than human drivers and stood to generate $50B in revenue by 2030.

What Else You Need To Know This Week

• On Wednesday, the NHRA announced it found a new title sponsor in Mission Foods. The world’s leading brand for tortillas and wraps entered a multi-year contract with the drag racing series, after the two companies enjoyed a successful partnership for this year’s Mission #2Fast2Tasty NHRA Challenge. The NHRA amicably split from its previous title sponsor, Camping World, in May. The new title partnership, which will be known as the NHRA Mission Foods Drag Racing Series, jumps into full swing in 2024, as the NHRA celebrates its 73rd year.

• On Thursday, J.D. Power and GlobalData released their joint forecast for October 2023 new-vehicle sales. They predict the total will reach 1,201,800 units, a 6.6% increase from October 2022. Despite the UAW work stoppage, retail inventory is at an estimated 5.5% increase over last month. The volume helped push MSRPs down 1%, however, consumers are still on track to spend a record $43.7 billion on new vehicles for October.

• Tomorrow, October 31, the 2023 SEMA Show kicks off in Las Vegas. As always, show organizers have plenty of exciting attractions planned, including the first-ever SEMA Fest. The two-day festival aims to create the ultimate automotive playground filled with cars, trucks, demonstrations, food, art, vendors, and multiple concerts from some of the music industry’s biggest names. This is all on top of the more than 2,200 exhibitors showcasing thousands of innovative new products and sick builds.

The Engine Block is your one-stop source for any and all auto industry news. Keep an eye on our weekly round-up of enthusiast coverage, product reviews, vehicle spotlights, auto show/expo features, and more. Be sure to check back Wednesday for a spotlight on Westin Automotive’s new Pro-e Running Boards, and then come back around on Friday for a resourceful list of MacGyver-style hacks to get you home.