In case anybody else was wondering who the Big 3 are: the article talks about the Detroit 3, which are Ford, General Motors, and Stellantis (the merger of Fiat-Chrysler and Peugeot with Dutch headquarter).
Oh, I used to work in the automotive instry but somehow missed that Stellantis regrouping and rebranding. Hope they can find some synergies between Dodge and Citroen.
There has been no rebrand, Stellantis is just the group name for the former FCA and PSA groups. All previously existing brands will continue to exist as before, just now based on common platforms and targeting different markets, same as before, just on a bigger scale. E.g. PSA bought Opel from GM (and did a massive turnaround making it profitable in 2 years while it was loss making for decades before) to have a German brand known for quality to target markets where French brands were known as unreliable. An Alfa Romeo SUV, a Jeep SUV and a Peugeot SUV are targeting entirely different markets, even if the underlying vehicle is pretty much the same.
> Hope they can find some synergies between Dodge and Citroen
They probably will, the CEO is very good, and as mentioned earlier, PSA (he was CEO there before FCA lost their own hero CEO and decided to merge with PSA) managed to turn around Opel quite quickly.
I have strong doubt about that. I grew up in an automotive family and went to a heavily automotive school.
You basically have three major hold backs:
* Parts requiring manual assembly. My first summer job was at an auto supplier. It involved running 3 wires though a piece of conduit and wrapping it with electrical tape. It was a connector for some sedan brake light. Family friend. They still run the business the same way. Parts change too frequently and are too hard to automate.
* automation still requires maintenance. This isn’t just replacing parts on machines. This is also the entire supply of parts that go into fixing machines. Lines going down is incredibly expensive. Parts aren’t always readily available. There’s a whole industry of small “tool and die” shops that have the capability to build a part from specs next day.
* plants are huge and expensive., you don’t retool unless you have good justification. Typically, this happens with a model refresh.
Onshore production already mostly happens, and it’s for superior non Big 3 vehicles like Toyota and Tesla. To me, it looks like the Big 3 autos are floundering severely, are the only ones unionized, and this strike / 40% pay increase demand is only going to further cripple the big 3’s ability to compete in the market. Ford and GM have already completely ceded sedans while Chrysler is a hollow shell
I'm not sure I'd call Tesla "superior" to the "Big 3"
Pointing out the endless flaws in Tesla cars that have rolled off the line (joints that don't quite align, slight blemishes etc) are a running joke for many of its detractors
Not to mention the absolute clown fiesta of Elmo's "Cybertruck"
Tesla is moving to a McDonald style system; create a few big giga-castings of the main car body parts; create modules that fit exactly into those castings, assemble the few modules and castings in a few simple steps.
these steps minimise human or eliminate human use, and encourage either robotization, or task simplification to such an extent that labour can easily be replaced with another with minimal training.
example from autoline channel, showing how simplified the assembly system can become with the casting base:
this means that ICE vehicle skills are becoming exceedingly irrelevant. Obviously not everything is gone, but imagine how simple it is to train or replace fast food workers; or how easy it is to assemble furniture ikea-style. A lot of ICE- skills are now not required in EVs, and these workers will have to find alternatives.
I wonder if they'd settle for a (retroactive relatively) reduction in CEO Pay, coupled by an increase of at least the CEO's pay increase or better relative to the last contract period.
## HYPOTHETICAL EXAMPLE ##
+ Prior to contract CEO made 10,000,000 per year. Since then they (currently) make 14,000,000 per year.
+ Union is asking for 40% increase to match CEO's increase.
? Would the union accept CEO's total compensation package, including retroactive to cover the same period, decrease to E.G. 20% (CEO now makes 12,000,000 per year in this hypothetical) with a union member INCREASE of 20% or greater (possibly including a one time contract signing bonus to cover the back period)?
The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. It would therefore be inappropriate to use "relative to the last contract period" as the baseline.
If it were about simple disparity, that disparity has grown for far longer than the most recent contract period. Back in the 1960s the average ratio between CEO pay and average worker pay was 20x, and now it's close to 400x.
Extending your argument to the longer baseline, if the CEO's pay were reduced by 20x and the worker pay increased to 20x, retroactive to 1970, then I'm pretty sure they would agree.
But the point isn't simply that the CEO made X% more since the last contract so union workers should get X% more too. If it were, then consider GM CEO Mary Barra, who made nearly $29 million in 2022. She could cut her income by 30% and still make good money - Ford CEO Jim Farley "only" makes $21 million.
Cutting her compensation wouldn't justify cutting the salary for everyone at GM by 30% for the next contract period.
> "The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%," UAW President Shawn Fain said at a news conference last week.
> As of Tuesday, the UAW is proposing an approximately 40% compounded wage increase over the course of a four-year contract, a tad lower than its opening bid of 46%.
Also, as an indication of how looking only relative to the recent contract period isn't enough:
> The average hourly wage for workers manufacturing motor vehicles and parts, adjusted for inflation, has dropped by more than 20% in the past two decades, according to data from the U.S. Bureau of Labor Statistics.
0.8 * (1 + 0.4) = 1.12 so what the union wants would be about a 10% gain since 2000.
Is the CEO cut in pay to cover the costs of pay raises? The article mentions that 13,000 workers will be striking but if we round that down to 10,000 a 2 million dollar CEO pay cut would cover a 10 cent per hour pay raise for those workers. This strike is against all three major US automakers so matched between all three CEOs would be a 30 cent per hour raise. And there are 150,000 UAW members.
I imagine the workers are asking for more than a few hundred dollar in annual salary raise. A 20% pay raise of 10,000 people making $50,000 a year would cost 100 million dollars.
The point is, if company has enough to give thr CEO a raise, they have enough to give the average employees raises.
Further than that, they should prioritize the average employee. Meaning, if they have extra money, give it to the average employees first, then if there is leftover, give it to the management.
Unions: organizations whose sole purpose is to acquire a monopoly on the means of production. They’re parasites, but corporations are worse. Don’t let either ever gain the upper hand.
Is this just a final battle for the remaining scraps of money in a dying industry? Or is this a real, substantive negotiation that will push the industry to a better place?
The big 3 made over $21 billion in profits in the first half of this year. This isn't about fighting over scraps, it's about fighting for a fair share of the wealth produced by workers.
Readit News
> Hope they can find some synergies between Dodge and Citroen
They probably will, the CEO is very good, and as mentioned earlier, PSA (he was CEO there before FCA lost their own hero CEO and decided to merge with PSA) managed to turn around Opel quite quickly.
US wants to onshore/friend shore production, so there is a demand for US workers at any cost. Barring automation replacements.
The auto industry in the US is just about as automated as possible, given current tech, economics, etc.
You basically have three major hold backs:
* Parts requiring manual assembly. My first summer job was at an auto supplier. It involved running 3 wires though a piece of conduit and wrapping it with electrical tape. It was a connector for some sedan brake light. Family friend. They still run the business the same way. Parts change too frequently and are too hard to automate.
* automation still requires maintenance. This isn’t just replacing parts on machines. This is also the entire supply of parts that go into fixing machines. Lines going down is incredibly expensive. Parts aren’t always readily available. There’s a whole industry of small “tool and die” shops that have the capability to build a part from specs next day.
* plants are huge and expensive., you don’t retool unless you have good justification. Typically, this happens with a model refresh.
Pointing out the endless flaws in Tesla cars that have rolled off the line (joints that don't quite align, slight blemishes etc) are a running joke for many of its detractors
Not to mention the absolute clown fiesta of Elmo's "Cybertruck"
these steps minimise human or eliminate human use, and encourage either robotization, or task simplification to such an extent that labour can easily be replaced with another with minimal training.
example from autoline channel, showing how simplified the assembly system can become with the casting base:
https://www.youtube.com/watch?v=lawGMl8sHzc
And Tesla is just going further with the casting
https://www.reuters.com/technology/gigacasting-20-tesla-rein...
https://youtu.be/0Ukp4tm0JkM?t=196
this means that ICE vehicle skills are becoming exceedingly irrelevant. Obviously not everything is gone, but imagine how simple it is to train or replace fast food workers; or how easy it is to assemble furniture ikea-style. A lot of ICE- skills are now not required in EVs, and these workers will have to find alternatives.
Striking just delays the inevitable.
## HYPOTHETICAL EXAMPLE ##
+ Prior to contract CEO made 10,000,000 per year. Since then they (currently) make 14,000,000 per year.
+ Union is asking for 40% increase to match CEO's increase.
? Would the union accept CEO's total compensation package, including retroactive to cover the same period, decrease to E.G. 20% (CEO now makes 12,000,000 per year in this hypothetical) with a union member INCREASE of 20% or greater (possibly including a one time contract signing bonus to cover the back period)?
The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. It would therefore be inappropriate to use "relative to the last contract period" as the baseline.
If it were about simple disparity, that disparity has grown for far longer than the most recent contract period. Back in the 1960s the average ratio between CEO pay and average worker pay was 20x, and now it's close to 400x.
Extending your argument to the longer baseline, if the CEO's pay were reduced by 20x and the worker pay increased to 20x, retroactive to 1970, then I'm pretty sure they would agree.
But the point isn't simply that the CEO made X% more since the last contract so union workers should get X% more too. If it were, then consider GM CEO Mary Barra, who made nearly $29 million in 2022. She could cut her income by 30% and still make good money - Ford CEO Jim Farley "only" makes $21 million.
Cutting her compensation wouldn't justify cutting the salary for everyone at GM by 30% for the next contract period.
BTW, this sort of question works better with actual numbers. From https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequ... :
> "The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%," UAW President Shawn Fain said at a news conference last week.
> As of Tuesday, the UAW is proposing an approximately 40% compounded wage increase over the course of a four-year contract, a tad lower than its opening bid of 46%.
Also, as an indication of how looking only relative to the recent contract period isn't enough:
> The average hourly wage for workers manufacturing motor vehicles and parts, adjusted for inflation, has dropped by more than 20% in the past two decades, according to data from the U.S. Bureau of Labor Statistics.
0.8 * (1 + 0.4) = 1.12 so what the union wants would be about a 10% gain since 2000.
UAW were a huge reason Detroit was in such bad shape in 2008. I wouldn’t call those concessions.
I imagine the workers are asking for more than a few hundred dollar in annual salary raise. A 20% pay raise of 10,000 people making $50,000 a year would cost 100 million dollars.
The point is, if company has enough to give thr CEO a raise, they have enough to give the average employees raises.
Further than that, they should prioritize the average employee. Meaning, if they have extra money, give it to the average employees first, then if there is leftover, give it to the management.
A rising tide raises all ships.
Deleted Comment
1: https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wha...
Why are we keeping them on life support?
The profit was about 4b which, okay let's give everyone in UAW a share of that and... Oh it's so small that it doesn't fix anything?