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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Welcome to the working week – with the exception of U.S. readers fortunate enough to have a holiday today.

It’s been a tumultuous weekend in the World of Cars. But the concerns of Detroit’s automakers, the United Auto Workers and the rest of the global auto industry are on the back burner in today’s news cycle. With that in mind, let’s dive right in.

Today –

• • UAW President Fain wins in Detroit, loses at Mack

  • Buying an EV in America will get easier – next year

  • Tesla and Lucid cut prices as demand slows

     

UAW President Shawn Fain. Screenshot from UAW Facebook Live video.

United Auto Workers President Shawn Fain has been riding a roller coaster since last Friday. He scored a big victory Friday when GM agreed to put its joint venture EV battery factories under the UAW’s master contract – a move GM refused to consider until moments before Fain was about to call a strike at the automaker’s super-profitable Arlington, TX SUV factory.

(Possible new UAW strike slogan: No Justice, no Slades.)

But on Sunday, Fain was rebuked by UAW members at Mack Trucks, who voted by an overwhelming margin to reject the new five-year contract UAW leaders negotiated. UAW-Mack workers walked off their jobs on Monday morning.

Fain and Mack management now must go back to the bargaining table in the shadow of the ongoing Detroit Three bargaining. One challenge for both Fain and Mack President Stephen Roy is that UAW workers at Mack know – thanks to Fain’s unusually transparent video updates about the state of bargaining – that UAW-Detroit Three assembly workers are on track to get as much as 23% in wage increases, plus cost-of-living adjustments.

The tentative Mack contract offered a base wage increase of 19%.

The Mack ratification failure is a reminder that rank-and-file UAW members will have the last word on when and how the strikes at the Detroit Three will end – and they are under no obligation to buy the agreement Fain presents to them. Indeed, UAW members are building a track record of rejecting the first deals their leaders negotiate.

GM’s agreement to put its joint venture U.S. battery factories under its UAW master contract checks one of the most important boxes on Fain’s list of demands – reducing the risk that thousands of union powertrain jobs will be replaced by non-union battery factory jobs at lower wages.

But Fain himself cautioned on Friday “we’re not there yet,” as he addressed union members wearing a T-shirt bearing the slogan “Eat the Rich.” Fain spent several minutes urging his members to be patient with his step-by-step strike strategy – acknowledging many of them want him to bring the hammer down and strike the Detroit Three large pickup truck plants now to bring maximum pressure.

Here’s the framework of the Detroit Three deal that is taking shape, based on the best offers Fain has made public over the past three weeks:

>Wage increases of 23% or more. (Best offer: Ford)

>Inflation protection (COLA). (Ford, Stellantis.)

>Shortening wait for top pay to three years. (Ford, Stellantis.)

>Higher wages for temporary workers, and a faster path to full-time status.

>Battery plants under UAW master agreements (Best offer:GM.)

> Income protection for workers if plants close. (Ford offer)

>The UAW can strike over plant shutdowns. (Ford, Stellantis)

Retirement benefits are a major unresolved issue. No company has agreed to restore pre-2007 defined benefit pension plans as the UAW has demanded. Ford has floated a hybrid 401(k) that could assure workers retire after 30 years with $1 million.

What will happen next? Tune in on Friday to see who gets a rose to avoid a wider strike. Unless something happens sooner.

Put that $7,500 rebate right here.  REUTERS/Brendan McDermid

U.S. consumers who buy an EV have to navigate a thicket of rules to determine whether they qualify for a $7,500 tax credit that is, in effect, a discount on the price of a new electric car. Buyers of used EVs can get up to $4,000 in tax breaks – but only when they file their tax returns the following year.

Come January,  the IRS will allow buyers to transfer their tax credits to the dealer at the point of sale. This should reduce some of the friction in the financing process and help sales of EVs.

But customers still need to know whether their incomes fall under the cutoff levels in the Inflation Reduction Act. For new vehicles, the adjusted gross income limit is $300,000 for married couples and $150,000 for individuals.

The new IRS rules don’t resolve the complexity surrounding which EVs qualify for consumer tax credits based on domestic and foreign content. The EV subsidy rules could get muddied further when the Treasury issues rules defining whether EVs do not qualify for subsidies because too much of their battery content is produced by “foreign entities of concern,” (code for Chinese companies such as CATL.)

Teslas all in a row.

Tesla is reinforcing the suspicions of Wall Street bears who believe the automaker’s disappointing third quarter deliveries were a function of softer demand, not just factory shutdowns to retool for model facelifts. (Reality check for Da Bears: Tesla shares are still more than double their price on Jan. 1.)

Tesla cut U.S. prices for its top-selling Model 3 and Model Y vehicles as it shoots to deliver more than 476,000 vehicles worldwide during this quarter to hit its full year, 1.8 million vehicle delivery goal.

In China, Tesla sales dropped nearly 11% in September, while rival EV maker BYD increased deliveries by nearly 43%, according to new data from China’s Passenger Car Association. Tesla has leased land in Shanghai to develop a large new sales and service center – service is a Tesla customer pain point everywhere.

Meanwhile, Tesla rival Lucid launched a cheaper version of its Air sedan to narrow the price gap that has opened up with Tesla’s Model S as Elon Musk has pursued his volume over profit margins strategy.

How does Musk see the EV market right now? Find out Oct 18.

Tesla challenger Rivian on Friday recovered some of the market cap it lost the previous day after it disclosed plans to issue $1.5 billion in new convertible debt.

Rivian shares are still up 2.7% for the year to date, but that positive margin is far less than it was last Wednesday, before investors saw the new capital raising deal and sent the stock down 23% on Thursday.

Rivian’s fund-raising is prudent given the company’s cash burn and the continuing pressure on EV prices. The real question is whether Rivian should go out and raise even more.

Shares of German auto parts company Vitesco Technologies jumped on Monday after German parts maker Schaeffler said it would offer 3.64 billion euros ($3.8 billion) for the company. Schaeffler is a family-controlled business that owns stakes in both Vitesco and Continental, Vitesco’s former parent.

As a closely-held enterprise, Schaeffler would have more latitude to execute restructuring that could deliver 600 million euros in cost savings for the combined Vitesco/Schaeffler operations.

Here’s a new symptom of China’s EV overcapacity: Hyundai has chopped the price of a Beijing area car factory it wants to sell by 30%  – and there are no buyers in sight.

Huawei’s EV brand Aito said it has received orders for 50,000 vehicles since it launched less than a month ago.

Unifor and GM face an 11:59 PM Eastern Time deadline to agree on a new contract, or the union representing GM Canada workers could walk off the job. GM is resisting certain elements of the contract Ford agreed to last month, and which Unifor wants to use as a pattern for GM and Stellantis. A strike at GM’s Canadian operations could cut off production of certain six and eight cylinder engines, as well as assembly of Chevy and GMC pickup trucks.

Volkswagen and Umicore will build their first joint-venture EV battery plant in Poland, the companies said, a deal lubricated with 350 million euros in Polish government subsidies.

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