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‘A Necessary Step’ Suppliers Want Higher Immigration Levels To Fix Labor Shortage



Good morning! It’s Friday, November 17, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: Automotive Suppliers Want More Immigration

Lowering levels of immigration are apparently contributing to a labor shortage at automotive suppliers, and it’s putting a squeeze on the industry’s supply base. From Automotive News:

Sandy Stojkovski, North American CEO of German supplier Vitesco Technologies, said the company has had trouble finding enough hourly workers for its factories in the region, an issue she said is common throughout the supply chain. She pinned the problem in part on “very limited legal immigration” into the U.S., which has put a cap on the number of workers available in a tight labor market, especially as the population ages and more workers retire.

Her suggestion: Make it possible for more potential industrial workers to enter the country.

“I really see this as a necessary next step to ensure that we’re able to get the talent in all the different areas we need, legally, in this country,” she said during a panel last week at the Motor and Equipment Manufacturers’ Vehicle Supplier Conference in Novi, Mich.

A tight labor market, rising labor costs, higher raw materials costs and key component shortages have already contributed to a reduction in supplier profit in the post-pandemic era.

The seasonally adjusted civilian labor force participation rate in the U.S. has slipped over the past 16 years, from 66.4 percent in January 2007 to 62.7 percent in October 2023, according to the U.S. Bureau of Labor Statistics. That figure began to decline around the 2007-08 financial crisis, reaching 62.4 percent in September 2015.

The labor force participation rate climbed to 63.3 percent in February 2020 before the COVID pandemic sent the participation rate plummeting as workers were laid off and many older workers chose to retire.

The figure has yet to recover.

The number of new U.S. immigrants has actually risen following the brunt of the pandemic, but the figure is still far below levels seen in the previous decade, Auto News says. About 1.02 million people obtained lawful permanent resident status in the U.S. in 2022, down 16 percent from the 1.19 million people who did it in 2016, according to the U.S. Department of Homeland Security.

Now, if you combine that with the facts that older workers are retiring and the Gen Z population being smaller than the millennial generation, you get fewer potential workers left to fill jobs at supplier factories.

Because of these factors it’s now more important than ever for suppliers to offer competitive wages and make sure employees are treated well.

2nd Gear: Swedish Unions Turn Up The Heat On Tesla

Dockworkers in Sweden have expanded their protest against Tesla, and they are now preventing the Austin, Texas-based automaker’s cars from being unloaded at all ports in the country. It’s being done in support of Tesla workers who are demanding a collective bargaining agreement.

There isn’t a Tesla manufacturing plant in Sweden, but the four electric models are serviced by about 130 mechanics affiliated with the Swedish union IF Metall. They began their strike on October 27. From Reuters:

Dockworkers joined the strike by mechanics on Nov. 7, blocking Sweden’s four largest ports to Tesla cars. That was expanded to all ports on Friday at 12 a.m. (1100 GMT)

Tesla, which has revolutionized the electric car market, has managed to avoid collective bargaining agreements, which cover wages and conditions, with its roughly 127,000 workers and Musk has been vocal about his opposition to unions.

But if Sweden can break Tesla’s resistance, that could provide a precedent for other countries.

So far, unions in the United States and Germany have failed to force the company to accept collective bargaining agreements.

“If they have come to Sweden, they must follow the rules, We have certain norms here and he (Musk) must accept them,” Torbjorn Johansson, Negotiation Secretary at Sweden’s LO labour confederation, said.

“Swedish workers cannot afford to lose this fight.”

Along with dockworkers, unionized cleaners are refusing to clean Tesla buildings, and postal workers have stopped delivering the automaker’s mail. Additionally, electricians stopped service and repair work for Tesla, including at its charging stations across the country.

Action against Tesla is will expand ever further if no agreement is reached. On November 24, about 50 unionized workers at Hydro Extrusions, a subsideary of Norwegian aluminum and energy company Hydro, will stop work on Tesla products.

3rd Gear: UAW Deal Leads To Subaru Wage Raise

Subaru said it will raise wages for its U.S. plant workers following the labor deals between the Big Three automakers and the United Auto Workers union. Think of it as a “please don’t unionize” raise. From Reuters:

The amount of the raises for workers at Subaru’s assembly plant in Lafayette, Indiana, has yet to be determined but will be in line with industry levels after the UAW deals with General Motors, Ford and Chrysler parent Stellantis, Osaki said through an interpreter at the Los Angeles auto show.

The Detroit Three’s union contracts will mean wage increases of 25% through 2028, which will amount to 33% when expected cost-of-living adjustments are factored in.

Subaru is considering increasing benefits along with the pay raises but has not decided whether to do so, a company spokesperson said. The company clarified the CEO’s remarks after initially saying the increased compensation would include benefits.

Recently, Subaru and other non-union automakers in the U.S. have been under a good deal of pressure to up pay and benefits following the UAW’s deal with the Big Three. Wages have been raised by Toyota, Honda and Hyundai/Kia.

U.S. President Joe Biden, who has backed UAW efforts to negotiate higher pay for its members, has said all U.S. auto workers deserve the same deal as those the UAW negotiated with the Detroit automakers.

UAW President Shawn Fain has reportedly vowed that the UAW will “aggressively organize” at non-union U.S. auto plats like Tesla and other foreign automakers, something the union has had trouble with in the past.

4th Gear: Geely Sells Part Of Its Stake In Volvo

Chinese automaker Geely has sold a $350 million stake in Swedish automaker Volvo because of investor concerns about the company’s publicly available shares. From Bloomberg:

Geely, which owns a web of automotive interests in Europe, offered approximately 100 million shares in the company at 37 kronor ($3.49) apiece, according to a statement.

The sale follows complaints over the company’s small free float, which has put pressure on the stock and fueled high trading volatility. The offer price is 9.4% below Thursday’s close and a 30% discount to Volvo Car’s trading debut in Stockholm two years ago.

The timing of the placement “might surprise a bit with Volvo Car share price close to the historical lows,” Oddo BHF analysts said in a note.

Volvo Car declined as much as 14%, to 35.25 kronor. The stock is down around a quarter this year.

Geely owns stakes in a handful of European automakers, including Lotus, Aston Martin and Mercedes-Benz. It has owned Volvo since 2010 when it bought the automaker from Ford. It also has a number of premium EV brands like Zeekr, Polestar and Lynk and Co.

Volvo Car is among EV makers in Europe fighting over market share amid intensifying competition from Tesla Inc. and Chinese brands pushing into the region. The manufacturer has vowed to cut costs

The placement is equivalent to 3.4% of Volvo Car’s issued share capital and 4.1% of Geely’s holding, and further broadens the shareholder base, the Chinese investor said. The shares sold represent just over a fifth of float.

Volvo’s CEO said the move by Geely will benefit both “new and existing” investors, and Geely will continue to support the automaker.

Reverse: Narrator: “He Was A Crook”

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Ford, Stellantis Workers Join GM in Ratifying New UAW Contract



United Auto Workers union members at Stellantis and Ford have now joined General Motors workers in ratifying the labor agreement between the union and the Big Three automakers this week. The vote marks the end of the labor dispute between the two parties that resulted in a six-week-long strike earlier this year.

If we’re being pedantic about it, not every single Stellantis and Ford plant worker has voted yet. However, the split of yes versus no votes so far – 68 to 32 at both companies – is enough to guarantee it’ll succeed since a simple majority is needed for ratification.

At some plants, the contact margin of victory was even higher. Ford Dearborn Truck Plant and the Rouge Electric Vehicle Center – both in Michigan – are seeing 78 percent of workers vote in favor of the deal. Those results put the contract up by over 12,000 votes, according to Automotive News.

At the same time, Stellantis’ deal was ahead by over 9,600 votes on Friday as results showed over 70 percent of workers at the automaker’s two Detroit assembly plants are supporting it. Only a couple of shops have rejected the contract: the two Mopar parts depots at the Toledo Assembly Complex in Ohio that are slated to close. It’s an understandable move, I suppose.

If you are aware of what numbers are, then you probably realized that Stellantis and Ford’s deals have gotten much broader support from UAW workers than General Motors, which passed 55 percent to 45 percent. We reported yesterday that the GM agreement was opposed by the majority of workers at seven of its 11 U.S. assembly plants.

The three deals are rather similar, AutoNews says:

All three deals include 25 percent pay raises through April 2028. Most workers get an 11 percent raise and $5,000 bonus upon ratification. The contracts also restore cost-of-living adjustments that, combined with the raises, are expected to ultimately boost worker pay more than 30 percent.

The deals also cut the time it takes to make top wages to three years from eight, eliminate lower tiers of pay for some workers, increase vacation time and boost retirement contributions.

UAW leaders have said there is more value in each year of the agreement than in the entirety of the last four-year contract signed in 2019. As part of the deals, the union also negotiated some back pay for striking members.

Ford was the first of the three automakers to reach a tentative agreement with the UAW on October 25. It was followed by Stellantis on October 28 and GM on October 30.

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Brad Pitt’s F1 Movie Scraps Millions Worth Of Footage Over Dodgy Sponsorship Deals



Brad Pitt’s new Formula 1 movie is on rocky ground after it emerged that dodgy sponsorship deals could render hundreds of hours of footage useless. The project, which does not yet have a title, may now have to scrap hours of on-track footage from F1 events in the UK and Hungary.

Before the actors’ strike kicked off, the “Fight Club” actor had been hard at work shooting and producing the new Formula 1 movie, which has Lewis Hamilton on board as a producer to try and make it as realistic as possible. After being offered a garage space at Silverstone in the UK and the Hungaroring in Hungary for filming, the project’s footage is now under threat, according to a report from the Independent.

After resuming work on the movie following the SAG-AFTRA strike, it emerged that some of the “hours of footage, worth millions” could now be scrapped. The Independent reports:

But, despite the conclusion of the actors’ strike, which saw the SAG-AFTRA union protest contractual clauses related to royalties and the use of AI, it’s believed the film’s sponsorship deals have been forced to change, meaning its release has reportedly stalled.

This would mean that all pre-recorded footage is no longer permitted to be used, which would essentially render Pitt, Idris and director Kosinski’s time at Silverstone a waste of time.

Apple, which is financing the project, and a representative for Pitt were contacted by the newspaper, but neither commented on the issues that could be facing the film. However, a source close to the project told the British press that the footage was now “defunct.”

A photo of the two Formula 1 cars being used in Brad Pitt's F1 movie.

The stars of the movie were shot on track at Silverstone.
Photo: Gongora/NurPhoto (Getty Images)

However, the change in sponsorship for the film might not be as terminal as some reports are making out. Product-placement deals and other forms of sponsorship are common across movie-making as it helps alleviate the cost of mega-budget films.

In the past, changing deals have hit blockbusters like James Bond, which had a change in Bond’s phone provider once the movie was wrapped. As such, scenes that showed the super spy’s phone were edited to include a newer Nokia phone instead of the old model that had been used when the film was first shot.

So while some shots with outdated sponsors may end up on the cutting room floor, I’m sure those clever people at Apple can whip up some movie magic to keep the on-track action on-brand.

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Hyundai To Give Non-Union Workers A Big Raise



Illuminated Hyundai sign

Photo: Mark Renders / Stringer (Getty Images)

Hyundai plans to give non-union workers in its Alabama factory a 25-percent raise by 2028, Reuters reports. This news comes two weeks after the United Auto Workers union won a new contract with the Big Three, ending a strike that lasted more than a month.

Workers will initially be given a 14-percent raise in January, and future raises are planned in the following years to get to that initial 25-percent figure. Additionally, Hyundai said it plans to increase wages for workers at its Georgia electric vehicle factory that will open in 2025.

According to Hyundai, the reason behind the wage increases is that the Korean automaker wants to “remain competitive and … recruit and retain top talent.”

Hyundai’s not alone here, either. On Friday, Honda announced plans to give non-union autoworkers in the U.S. an 11-percent raise and halve the number of years needed for new employees to be promoted to the top pay level. And only days after the UAW reached a deal with the Big Three, Toyota said it plans to pay its non-union workers more, as well.

As more automakers announce pay increases for their workers, it’s clear that even non-union workers benefit from a strong union in their industry. Shawn Fain and other union leaders didn’t just get better pay for their union members. They’re also forcing others to treat their workers better, as well.

Hopefully, workers will see that the raises they get are a direct result of the UAW’s bargaining and make it more likely that they’ll unionize, as well. Don’t think the UAW is going to sit idly by and cross its fingers that factories will unionize on their own, though. No, Fain has made it clear that he has both Toyota and Tesla in his sights. It’ll still be an uphill battle, but the deal he got with the Big Three should definitely make that easier.

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