Detroit’s auto show began this week in a flurry of glitz and glamour, with Ford Motors sponsoring a Darius Rucker performance and Jeep building an indoor test track with a slope of 40 degrees.
Detroit’s auto show is awash with dread and foreboding, but the bright lights and excitement are not all that it is. The anchors of this show, the three established U.S. automobile manufacturers, are in contract negotiations with a labor union representing nearly 150,000 employees.
While automakers were trying to get journalists, analysts, and dealers excited about the new versions of popular cars like the Ford F-150 pickup truck and the GMC Acadia S.U.V., labor negotiators raced to avoid a United Auto Workers strike that could prevent these new models from reaching showrooms. Called for a strike in three factories on Friday despite these efforts.
Three automakers in Detroit — General Motors (G.M.), Ford, and Stellantis — which owns Jeep Chrysler Ram — are in the midst of their worst labor crisis in over a decade, even as they strive to show off their newest and best models.
Matt DeLorenzo is an independent auto analyst, author, and consultant. You can tell that the executives I have spoken to are concerned. I don’t think there’s much optimism about a quick resolution.
Organizing Labor and Union Drives
- Microsoft: Celebrating a year that saw major gains for organized labor, the tech giant has announced that it would remain neutral if any U.S.-based workers wanted to unionize.
- Starbucks: Federal labor regulators accused Starbucks of closing illegally 23 stores in order to suppress organizing activities and tried to force the company to reopen the stores.
- Tesla: Weeks after mechanics who worked for Tesla in Sweden in late October walked out of their jobs, other unions in the country, as well as in Scandinavia, have joined in the strike.
- Amazon More than a year after Staten Island workers voted to create the company’s very first union in America, Amazon seems to be taking an even harder line toward labor organizing.
The U.A.W. Shawn Fain and the U.A.W. want to see a 40 percent wage increase over the next four years. The union also wants pension improvements, shorter workweeks, health insurance for retirees paid by the company, and to end a system where new hires are starting at half of the union’s top wage, $32 per hour.
The U.A.W. has been able to reject most of its other demands despite the fact that the automakers have made near-record profits in the past few years.
Few direct references were made to U.A.W. The show will be open to the public on Saturday. A prolonged strike could jeopardize automakers’ plans to launch new cars and trucks in order to capitalize on the strong demand.
Pandemic shutdowns, supply chain chaos, and pandemic shutdowns have caused the auto industry to struggle for much of the past three years in order to produce enough cars. Inventory of new vehicles is very low compared to historical norms, and prices remain high, which helps increase profits.
Suppose the strikers slow down or stop production for several weeks or even months. In that case, customers who are looking to buy a new car will be more inclined to turn towards foreign automakers or Tesla, a fast-growing electric vehicle producer based in Texas. These other automakers have U.S. factories that employ non-union workers, and their production will not be directly affected by the strike.
Detroit, or the North American International Auto Show as it is officially called, used to be one of the most prestigious auto shows in the world. Top executives from all the major automakers attended, even those that were not located in Michigan. Celebrities and musicians are often hired as a way to spice up the event.
The Detroit organizers redesigned their auto show to move it from the winter to the summer. The Covid-19 pandemic, however, forced the show to close down. Last year’s show was well attended, but few foreign automakers participated.
The show is bringing in new attractions this year, including Honda, BMW and Mercedes-Benz. The test track for electric cars has a 300-foot straightaway, where visitors can experience the thrilling acceleration of seven models. These include the electric Ford F-150 Lightning truck and the Cadillac Lyriq electric S.U.V.
Alef Aeronautics is a start-up that has displayed a concept of what they hope will one day become a flying vehicle capable of “hopping” over hills or traffic jams.
Stellantis Jeep created a display to highlight its off-road capabilities. It used 50 pine trees and 30 tons of rocks, along with 40 cubic yards of dirt. Jeep unveiled a new Gladiator pickup in the faux wilderness.
Jim Morrison said, “Even 100 years later, this city remains a haven for visionaries, builders, and adventure-seekers.” He was speaking at a Stellantis presentation and is the head of Jeep North America.
Hours later, Stellantis released a statement saying that it still waited for the U.A.W. to respond to its latest wage offer.
