I had a great break from the routine spending real-world time with industry executives at the Reuters Automotive USA conference. Everyone says it, and it’s true: Talking on Zoom is convenient, but it’s no substitute for bumping into people. You never know what you’ll find out.
Some of what I learned will follow in today’s Auto File, along with lots of other news from the World of Cars. Have a great weekend! Let’s hit the start button!
There has been trouble almost every day this past month for Cruise, the robo-taxi company 80% owned by General Motors. And Cruise’s problems are now hurting GM.
The No. 1 U.S. automaker’s shares closed at the lowest price since August 2020 on Thursday after Cruise confirmed layoffs and a group of powerful unions urged the Biden administration to investigate other self-driving vehicle companies including Waymo and Zoox.
Instead, Cruise’s operations are halted pending regulatory and internal safety reviews. Cruise robo-taxis are being recalled. The actions follow an incident in which one of its cars struck a pedestrian on a San Francisco street, after the person had been hit by another vehicle.
Cruise has already cost GM more than $8 billion in operating losses since 2017, on top of $581 million GM has reported that it spent to acquire the company founded by CEO Kyle Vogt.
Meanwhile, unions and other critics of deploying nascent autonomous driving technology on public roads are now using the Cruise case to bolster their broader arguments against all AVs – echoing the public backlash after an Uber vehicle struck and killed a pedestrian in Phoenix in 2018.
UAW President Shawn Fain in Belvidere, Ill. REUTERS/ Leah Millis
The UAW has a lot on its plate
UAW President Shawn Fain is juggling a lot these days.
On Wednesday, Fain told the Reuters Automotive USA conference the union will pull out all the stops in campaigns to organize workers at Tesla, Toyota and other non-union automakers in the United States. That goal has eluded UAW leaders for nearly 40 years. (The non-union automakers will try to extend the streak. Honda on Friday boosted pay for its U.S. factory workers by 11%, following a similar move by Toyota.)
On Thursday, Fain joined U.S. President Joe Biden at the former Stellantis Jeep factory in Belvidere, Ill. to celebrate the union’s success in negotiating a new life for the plant, and a promised investment by Stellantis to build a new battery factory next door.
Biden endorsed Fain’s organizing ambitions. Fain and the UAW have not yet endorsed Biden’s re-election.
The rich new contracts Fain and his team won at General Motors, Ford and Stellantis should be powerful tools for UAW organizers. But that depends on UAW members at the Detroit Three ratifying the deals. On Thursday, UAW Local 598 members at GM’s Flint, Mich. truck factory narrowly voted against ratification.
Art Schwartz, a former top GM negotiator who was a trusted guide to labor bargaining in his post-GM career, used to say the best contracts were those that passed by narrow margins. That meant neither side won too much.
But the risks of losing ratification votes are high for both sides. Mack Truck this week told the UAW that the proposed contract rank-and-file workers voted down is its last, best and final offer. A new vote is scheduled for Nov. 15.
Rivian CEO RJ Scaringe. REUTERS Kamil Krzaczynski
Has Rivian exited production hell?
Luxury electric truck and delivery van maker Rivian surprised investors on Tuesday with better-than-expected revenue and an increased production forecast for the year.
Rivian executives are optimistic that the worst of the supply chain and manufacturing issues that suppressed production are over. They are working on cutting costs for future generations of the company’s vehicles with a simplified electrical architecture and other changes.
Rivian will start selling its electric delivery vans to customers other than Amazon.com – opening up a new revenue opportunity.
But by Thursday the buzz from Rivian’s Q3 numbers had worn off. Some analysts cut their price targets and the company’s shares fell. Rivian’s shares are down nearly 17% for the year, and remain far below the giddy peak of its November 2021 IPO when it was valued at $100 billion.
That was the signature line in advertisements for the Ram pickup during the early 2000s after the former Chrysler took the name used for a family of eight-cylinder 1960s muscle car engines and slapped it on the premium powertrain for its best-selling trucks.
But starting next year, Ram parent Stellantis will bow to pressure from U.S. environmental regulators and phase out the Hemi V-8 in the light-duty Ram lineup. Instead, the next generation of Ram 1500s will be powered by potent six-cylinder engines, batteries, or a plug-in hybrid system that will borrow the name of a discontinued (for now) Dodge SUV.
Still gotta have a Hemi? You can buy a heavy-duty Ram, or snag one of the last of the Hemi-equipped Ram and Ram Classics.
Volkswagen’s affordable EV for America
Volkswagen has a plan to launch a lower-cost EV it could sell in the United States for less than $35,000, the head of strategy for Volkswagen of America said during an interview at the Reuters Events Automotive USA conference.
VW’s more affordable EV for America is three to four years away, said Reinhard Fischer. Decisions about where in North America to assemble the vehicle and key components such as the battery pack will be made soon, he said.
“Affordable EVs” are the new black in the auto industry as mainstream customers balk at the relatively high prices for many electric models – prices legacy automakers set high hoping to limit punishing losses on low-volume first generation EVs.
Volvo Cars, controlled by China’s Geely, caused a stir this week with its new, Made-in-China EX 30 electric SUV that will start at $34,950 in the United States – though the real price is $36,245 when the $1,295 freight fee is added. The EX30 ranges up to $47,895.
Whatever VW decides about producing an attainable EV for America will be strongly influenced by the terms of the U.S. Inflation Reduction Act EV subsidies, Fischer said.
The importance of U.S. subsidies and trade policy to EV manufacturers cannot be overstated. Ganesh Iyer, head of U.S. operations for Nio, the Chinese EV startup, told conference attendees that his company is delaying plans to enter the U.S. market by 2025.
Overall vehicle inventories rose during October’s UAW walkouts, Cox estimates. As of the end of October, the supply of unsold new vehicles rose to 2.4 million cars and trucks, up 62% from a year earlier, Cox reported.
That sets the stage at certain brands for some old-fashioned, holiday season discount deals.
The Stellantis Ram brand has 129 days’ worth of its beefy trucks in stock – trucks with Hemis! – thanks to over-time production ahead of the UAW strike deadline.
However, if you wanted Santa Claus to bring you a new Ford Bronco or a Cadillac Escalade, you might be disappointed. Those companies did not build as many ahead before strikes cut production at the factories that make those popular SUVs.
Zeekr waved caution flags at investors weighing its proposed U.S. IPO. Among them: The influence of the Chinese government over its decision-making, and the price war in the Chinese EV market. Zeekr had hoped to raise $1 billion in fresh capital. That target is now in doubt, sources told Reuters’ Niket Nishant.