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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

“If it keeps on raining, levee’s going to break.” The opening line from a classic blues song turned Baby Boomer rock favorite is now a metaphor for the anxious state of the Detroit auto industry.

The United Auto Workers (UAW) keeps bringing the rain – strikes that shut down factories and have cost the Detroit Three, suppliers and dealers as much as $7.7 billion by one estimate. By the time you read this, UAW President Shawn Fain may have ordered another walkout.

The U.S. economy is not in recession, but Detroit is starting to act like it is. More on that as we race through the mid-week news from the World of Cars.

Today –

• • GM and Stellantis swing the cost-cutting ax

  • Tesla and Detroit brawl over fuel economy

  • Nvidia and Foxconn challenge Tesla’s AI Dojo

GM CEO Mary Barra, President Joe Biden and an electric Silverado REUTERS/Kevin Lamarque

General Motors (GM), Ford and Stellantis North America are hitting the brakes on spending as the costs of the UAW strikes go up, and demand for high-priced electric trucks slows down.

GM said it will delay by one year until 2025 the re-tooling of its Orion assembly plant north of Detroit to build electric Chevy Silverado pickup trucks. GM said in January 2022 it would spend $4 billion on the Orion plant overhaul.

Now that money stays in the bank – at least until the automaker knows the full cost of a UAW settlement as well as the real levels of demand for a pricey electric pickup.

GM’s decision to delay adding capacity for electric Silverados came just days after Ford said it was shutting down one of three production shifts at the factory that builds electric F-150 Lightning pickups.

Stellantis signalled its concern about cash flows by cancelling its planned exhibit at January’s CES technology show in Las Vegas. Pulling out of CES gets attention, but this is unlikely to be the only cost cutting action ordered by CEO Carlos Tavares – especially if the UAW decides to add a Jeep or Ram truck assembly plant to its list of “Stand Up Strikes.”

Cost angst is not just a Detroit thing. Volkswagen is trying to slash operating costs by 10 billion euros. But Reuters colleague Victoria Waldersee reports the effort is running behind schedule.

At least one auto executive is happy. REUTERS/Aly Song

Tesla and legacy automakers are battling over future fuel economy and vehicle emissions rules, intensifying a political headache for the Biden administration.

The Biden Transportation Department and Environmental Protection Agency have proposed parallel sets of rules aimed at ratcheting down petroleum consumption and CO2 emissions from cars and pushing electric vehicles (EVs) to a two-thirds share of the U.S. new vehicle market by 2032.

The trade group that represents GM, Ford, Toyota, and other combustion automakers said the proposed rules are unrealistic.

Automakers could face up to $14 billion in fines if they miss the proposed emissions targets – money that could be spent developing more efficient vehicles or paying better wages to UAW employees.

The UAW – a vital source of votes for the Biden re-election effort – has taken the automakers’ side.

But Tesla said in comments posted Tuesday the Biden emissions standards aren’t tough enough to do what’s required for the climate. Tesla benefits from tighter constraints on combustion vehicles because that raises the value of emissions credits it sells to non-compliant rivals.

Simmering in the background of this fist fight is a highly technical debate over how much climate credit automakers should get for selling electric vehicles. The Biden administration is considering reducing the emissions credit value of EV sales – another blow to Detroit and other legacy automakers.

Nvidia CEO Jensen Huang (left) and Foxconn Chair Liu Young-way.  REUTERS/Ann Wang

Apple gadget assembler Foxconn is widening its collaboration with artificial intelligence chips-and-software power Nvidia to build what the company’s leaders called “AI factories” that will create huge datasets to feed the Nvidia-powered brains of future Foxconn-built EVs.

If this idea rings a bell, that’s because Elon Musk has touted Tesla’s investments in a large-scale AI machine to train its self-driving cars. Tesla calls its system “Dojo.”  (Tesla’s description of Dojo is here.)

Foxconn’s CEO said his company eventually wants to build half the world’s EVs. An ambitious goal that could depend on how effective its AI machine and AI-powered products are in competition with Tesla in the market.

Rivian CEO RJ Scaringe told Reuters the electric van and luxury truck maker raised another $1.5 billion via a bond deal to add more cushion against macroeconomic and political risks, not because the company was in distress.

Some Rivian shareholders were spooked by the cash-raising move and dumped shares.

Rivian got a boost from shareholder and No. 1 commercial client Amazon, which said it now has 10,000 Rivian electric vans running in its delivery fleet.

U.S. auto safety regulators are investigating incidents in which Cruise robo-taxis had close calls with or injured pedestrians.

The latest inquiry casts doubt on when regulators could grant the GM robo-taxi unit permission to start offering rides in multi-passenger Origin vehicles that have no controls for humans.

GM has said launching Origin is a key to stanching Cruise’s $2 billion in annual losses.

Ford shook up top management, naming the head of its combustion vehicle operation, Kumar Galhotra, to the new post of chief operating officer. The move comes just days after Galhotra took center stage in Ford’s conflict with the UAW, declaring the automaker was “at the limit” of what it could spend on a new contract.

BYD expects to double its Q3 profits. And rival Tesla? Find out later on Wednesday when Tesla reports its numbers.

Lucid deliveries dropped 30% in the third quarter, a result one analyst called “very disappointing.” Lucid’s Air sedans continue to struggle as Tesla drops prices on its rival Model S.

Electric truck maker Volta said it will file for bankruptcy.

UK EV buyers could face tariffs on EU-made EVs that add 3,400 pounds ($4,134) to the cost of a vehicle, a UK industry group said. Post-Brexit tariffs could add 3,600 pounds to the price of a UK-built EV sold in Europe. A UK minister said she was “very optimistic” a solution would turn up.

NHTSA fined Zipcar $150,000 for renting vehicles that needed repairs to comply with safety recalls.

Nio is considering using dealers to build sales in Europe, veering from an online-only approach.

Truck maker Volvo reported strong Q3 results but warned that heavy truck demand could fall in 2024. That message lands as Volvo’s Mack truck subsidiary heads into the second week of a UAW strike that has shut down some of Mack’s largest U.S. operations.

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