By Peter M. DeLorenzo
Detroit. While the Sturm und Drang continues over the UAW strike and the “Grand Transition” to Battery Electric Vehicles, I am sorry to report that nothing has changed in the last week. The intransigence of the UAW has been exposed through a series of leaked text messages that were not supposed to see the light of day, which prompted GM CEO Mary Barra to offer a sternly worded message to Shawn Fain & Co.
She suggested, as reported by the Detroit Free Press, that the UAW’s plan has been “to drag their membership into a long, unnecessary strike to further their own personal and political agendas. Their leaked text messages from last week stated their plan to keep us ‘wounded for months’ and cause ‘recurring reputations damage and operational chaos.’”
Further, “it is clear Shawn Fain wants to make history for himself, but it can’t be to the detriment of our represented team members and the industry,” Barra wrote. “Serious bargaining happens at the table, not in public, with two parties who are willing to roll up their sleeves to get a deal done.”
That Fain’s head is expanding by the minute is clear to everyone. He craves the spotlight, and he’s drinking in the power he currently wields, whether it’s helpful to the long-term health of the domestic automobile industry and the UAW workers, or not. And the bluster he spews at the drop of a hat is maliciously non-productive.
As I said a couple of weeks ago, that the UAW will get a new deal eventually is a given, but the negotiations are taking place in a vacuum – a vacuum that exists in this region only – one that blissfully ignores the bigger picture. And that “bigger picture” for the collective “Detroit” is shaping up to be a giant bowl of Not Good. Gaining back past concessions is the driving force for the UAW in these negotiations – putting Fain’s burgeoning megalomania aside – but ultimately this new contract will be devastating to the domestic automakers, crippling their ability to compete in a new BEV-dominated world.
How bad could it be? This week’s Automotive News reported some interesting tidbits about where this situation could end up after these labor negotiations are completed, to wit: “Gene Munster, managing partner at Deepwater Asset Management, estimated that once the Detroit 3 and the UAW reach an agreement, Tesla’s labor costs will be 48 percent lower compared with the Detroit automakers. Munster said last week on the social media platform X, formerly Twitter, that when pension plans, inflation protection and profit-sharing are included, UAW worker labor costs could rise 64 percent to $105 per hour. In contrast, Munster puts Tesla’s average labor cost at $55 per hour, which includes a 15 percent increase ‘likely in the next six months.’ Notably, Munster’s estimate does not include Tesla’s cost of stock options that workers receive because, he said, ‘it’s difficult to predict where TSLA [stock] will be in a year.’”
That this could ultimately be the death knell for the industry as practiced here is a distinct possibility. As I’ve said previously, I see the Detroit-based automakers having to crank-out myriad ICE machines indefinitely just to keep afloat. And then they will have to pick and choose the BEV segments that they think they will be able to compete in profitably. Too harsh of an assessment? That’s too bad, because it is the High-Octane – albeit ugly – Truth.
Where does that leave the general auto-buying consumer public? Interest in BEVs is growing, but the reality is that the gap between hand-raisers expressing interest in the latest BEV du jour and the people who are actually buying one from the manufacturers is vast. There are too many factors working against the whole BEV adoption thing right now and the reasons are many.
The infrastructure isn’t there and won’t be there for years to come. Range may still be a perceived problem, but it doesn’t seem to be the factor that it once was. Charging remains the overwhelming issue, both for the time it takes and because it in fact excludes apartment dwellers en masse. And the costs are still crushing. The list goes on from there. Some people are just disinclined to entertain BEVs under any circumstance, when it comes right down to it.
And I get it, I really do. As someone who grew up immersed in some of the finest high-performance ICE machines ever built, envisioning a world that doesn’t echo with the sound of hungry V8s rumbling across the landscape is simply hard to imagine.
But then again, as I’ve said repeatedly, those ICE machines will be around for decades to come, and that will prove to be life-saving to the domestic automakers who are unable to compete on cost with other BEV manufacturers. ICE vehicles will continue to be collected, nurtured and preserved indefinitely. And that is a very good thing from my perspective.
This “Grand Transition” isn’t going to be a finger-snap either, much to the disappointment of those who want us to be living in an instant BEV Nirvana. It’s not as if your local Donuts, Lotto ‘n Gas station is going to disappear overnight, taken over by charging islands. It is going to take time. A long time. But it’s also clear that for a large portion of the driving population, BEVs will become a staple in every geographical region here in the United States. And I am fine with that too.
But even with BEVs, I see the car “thing” continuing. The onset of BEVs doesn’t mean that the car “thing” will go away. In fact, it might be a good time to take a step back and understand what this car “thing” has meant to this nation.
How did the car “thing” evolve from desiring faster horses, to the building of transportation that transformed the world? What propelled the automobile from being an extravagant convenience to a cultural touchstone that’s such an inexorable part of the American fabric that even the most hostile of the anti-car hordes can’t seem to dampen our collective enthusiasm for it?
Is it the fashion statement? The fundamental sense of motion and speed? The image-enhancing power that automobiles possess? Or all of the above?
If anything, I keep going back to the one thing that’s undeniable about our collective love for the automobile, the one thing that no computer simulation – no matter how powerful or creatively enhanced – can compete with. And that is the freedom of mobility. And that will not change in the upcoming BEV era.
The ability to go and do, coupled with the freedom to explore and experience is not only a powerful concept, it is fundamental to the human experience, which is why the automobile in all of its forms remains so compelling and undeniably intoxicating.
That the automobile has progressed from a device built around convenience and comfort to something more, much more is easy to understand. The rush of freedom that we’ve all experienced in our first solo drives in an automobile is something that cannot be duplicated or brushed aside. It is ingrained in our spirit and etched in our souls.
I have talked to the most strident anti-car people over the years. But even for those who merely like to inform me that “I’m not into cars” inevitably, after acknowledging that it’s fine that they don’t share my passion for the automobile, something very interesting happens.
If the conversation is allowed to percolate long enough, every single anti-car person I have encountered in going on 25 years of doing Autoextremist.com comes around to saying something like, “Well, there was this one car that my uncle (or aunt, or friend, or brother, or father, or grandfather, etc.) had that I’ll never forget…” And they then proceed to tell me about a car that is so indelibly carved in their memories that they start talking about it in detail, including where they were, how old they were, who was with them, where they were going, what happened, etc., etc., etc.
For even those most dispassionate about the automobile – at least on the surface anyway – I find there are always stories if you dig a little deeper. Stories of coming of age, of adventure, of harrowing close calls, of love, and life and lives lived. And memories. Countless, colorful memories that live on forever.
The automobile business itself can be mind-numbingly tedious at times, as I’ve well-documented over the years. And it is without question one of the most complicated endeavors on earth, made up of so many nuanced ingredients that it almost defies description. But the creation of machines that are safe, reliable, beautiful to look at, fun to drive, versatile or hard working – depending on the task they’re designed for – is more than just a cold, calculated business. It is and has been an industrial art form that has come to define who we are collectively.
The automobile obviously means more to me than it does for most. I grew up immersed in this business, and the passionate endeavor surrounding the creation of automotive art has never stopped being interesting for me. And it is very much art, by the way. Emotionally involving and undeniably compelling mechanical art that not only takes us where we want to go but moves us in ways that still touches our souls deeply.
As I’ve reminded everyone many times over the years, I for one will never forget the essence of the machine, and what makes it a living, breathing mechanical conduit of our hopes and dreams.
And that’s more than a little comforting to me, especially in the midst of the stomach-churning rhetoric and calculated intransigence that passes for good faith negotiating at this juncture.
The bullshit has to stop. Right Now. And then we can all get on with dealing with the new reality of a significantly altered “Detroit.”
And that’s the High-Octane Truth for this week.
Editor’s Note: You can access previous issues of AE by clicking on “Next 1 Entries” below. – WG
AS THE STOMACH CHURNS. — from Rants
By Peter M. DeLorenzo