Behind the Scenes of Automobile Negotiations and Concessions with John Vincent, U.S. News
In Wheel Time Podcast: Your Go-To Automotive Talk Show
Behind the Scenes of Automobile Negotiations and Concessions with John Vincent, U.S. News
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Welcome to another In Wheel Time podcast, a 30 minute mini version of the In Wheel Time Car Show that airs live every Saturday morning 8 to 11am central.
It's the In Wheel Time Car Talk Show coming up.
We talk to John Vincent from US News and World Report about the UAW strike.
Later look at the automotive news headlines this week Howdy, along with Mike out of this world, mars King Conrad, along.
We always need more Jeff Jacobs, go Astros.
I'm Don Armstrong and I'm nothing.
I don't have any.
You're my hero, don.
Well, thank you, conrad.
Mr Helicopter, mr Channel 13 Helicopters.
You know where, don Hi?
This is Don Armstrong giving you the traffic report.
You see where his standards are.
Well, that was Robin Williams.
Yeah, really high.
High being keyword.
Yeah, and not the kind that we're talking about a helicopter.
Anyway, thank, you so much for joining us on this this Saturday morning.
This is our live broadcast and you're going to hear, that's the problem with it.
Yeah, and what you'll hear on the podcast not the broadcast, but the podcast you're going to hear that it's live.
Well, on the podcast, it's not live.
It was when we recorded it.
That's right.
We're recording it now, yeah, and Mike's going to give us all English accents.
And so this, so this program.
Was it going to air Friday the One?
more fix.
They do no, no, what we're doing right this instant.
Yes, yes, this will be.
Friday.
It'll be a Friday thing, so by the time this airs there will probably be another announcement from Sean Fain from the UAW, about some shenanigans that they've come up.
They're trying to screw the big three, and this big three is trying to screw them, and they're all doing a good job of it.
Well, okay.
Just look both ways before you get screwed, that's right.
So joining us now is John Vincent.
He's with US News and World Report.
John, good morning to you and thanks so much for joining us.
Well, thank you for having me on.
Are you out on the West Coast?
I am.
I'm in Portland Oregon, Portland Oregon.
Let's see.
Leaves are changing 832.
Look, you got up, you put a shirt on, you brushed your hair.
I'll never mind that, but you did brush your teeth and everything's looking good out there in the West Coast.
It is.
It's a beautiful day out here in Portland.
Have you driven the Columbia River Highway?
We did a piece on it.
It was one of the most scenic highways in the country.
That is basically my backyard.
I spend a lot of time out there.
How lucky you are.
It was one of the first designated national parks too.
National highways.
National highways.
Well, john, thanks so much for joining.
We're going to talk to you this morning about the UAW Strike and there was news yesterday about the.
They've met some sort of a agreement or understanding with General Motors about this new battery plant that apparently is now at least from what I read is supposed to kind of put some sort of a grid work on this new proposal that the UAW has to the big three.
Fill us in on all of that.
So the news yesterday is that GM will now allow the union into their new battery factories.
Before GM stance was that the factories were joint ventures, they weren't really GM so they didn't have to let the UAW in.
They have now changed their stance on that, which is a huge concession by GM and might be, you know, the straw that brings this, this strike close to an end, that is, if Stalantis and Ford agree in principle to the general overview of what they've agreed to yesterday, which they will, they will, you think they will.
Oh yeah, they will all go knock-stepping.
I got you.
Do you think that the big three actually talk to each other?
I don't think they're supposed to, but I think there are signals that go on between the three of them that let each other know what they're doing and what their stance is and how far they're willing to go.
Yeah, a lot of note passing back and forth, yeah, that kind of thing.
So, with this in mind and the fact that to me it's very complicated because, as you mentioned, these battery factories, they're so expensive, they're so massive in nature and there's many, many, many of them, and each manufacturer has partners in these battery factories, it's so complicated.
How are they going to do that?
Because right now, there is no UAW representatives in these battery factories, because they really don't even exist yet.
Correct, I'm sorry, go ahead.
Basically, as these factories come up, so will the union locals that supply the labor to them.
So do you think this is a good deal, all the concessions the manufacturers are making to the union?
Is it a good deal for the consumer or is it going to raise the price of everything?
I really worry about what this means for the future of the Big 3, because they're building a lot of cost into everything they do and in the next downturn the Big 3 will be facing headwinds that aren't faced by every other manufacturer because their fixed costs will be so high.
It'll be the Big 0.
Yeah, I mean.
The numbers that they're talking about on the battery factories are the UAW workers, who will make twice as much as non-union battery factory workers.
It's going to be tough to be competitive when you're paying twice as much in labor costs.
Yeah, or that cost gets passed on to the consumer regardless.
Or they don't spend as much on their CEOs and they cut back in other areas to be able to afford this.
They keep the price of vehicles close to what they should be.
That is definitely true.
I mean, this negotiation was never heading anywhere other than a strike for a lot of reasons.
It was the CEO compensation that was very public and seemed outrageous to a lot of people.
It was a union that had been going through some corruption issues and is trying to rebuild itself as the super strong union with a very aggressive, dynamic leader who's out to prove himself.
It was a time when they had somebody in the White House who wasn't going to do anything to try and stop the strike.
The conditions were perfect for a strike and that's what we have.
But John, my experience in the corporate world, which isn't a whole lot, but generally aren't the CEOs that they're talking about say he gets $20 million.
Oh, he made $20 million last year.
But that's not all a salary.
He has a contract but a lot of that incentives that are built in that stock goes as well.
You get this much money.
That stock does bad.
You don't get this much money, those kind of things.
As far as the salary, generally they don't make that kind of number.
I mean million, okay, two million, something like that.
But isn't it true that most of it is some sort of incentive Stock options, stock options, cash bonuses.
Absolutely, but that doesn't make it to the headlines, I understand.
That's why I think that's part of the problem, because next year, like you say, they hit a downturn.
Well, that CEO, all of a sudden now he's only making $5 million a year, but that guy that just got his raise up to $75 an hour, he's still making $75 an hour.
He or she.
By the way, on the CEO yes, Okay, my bad.
Them.
Well, the other thing that happens is they're looking, they're asking for this 32 hour work week.
Well, my view of that is okay.
So we give them a 32 hour work week.
And we did a thing earlier about auto history.
This was the week in auto history where Ford went to an eight hour, five day a week work week back in the 30s.
So now they're going to a 32 hour work week with the plan of working the same amount of hours.
So now they get an additional eight hours of overtime at time and a half at their $75 and $50 an hour time and a half at $75 an hour.
So that's really what the unions are, how they're trying to compensate.
Yeah, I don't think that's the contract is going to happen.
That seems like a negotiating point that's out on the margins that they're going to have to be willing to give on.
So this labor leader that's in the news, sean Fain.
He negotiated the contract that they currently had, correct.
He was on the team that negotiated the contract.
Well, and now he's trying to be the hero.
If he was negotiated, all that loss is what they're talking about.
Now he's going to be the hero and try to get it all back from him.
So isn't he sort of kind of on the hot seat too?
He absolutely is, and he's the new leader and he's this is his chance to prove himself, and you know he's doing his best to try and make himself, you know.
But but not held accountable for his failure at the last contract negotiations.
Well, like he said he was on the team, he's got a vote in that.
Yeah, you know that union's been a mess and this is a kind of a way to rally everybody around a common goal.
Yeah, but don't they understand both the car makers and the union that there are car manufacturers that don't employ union employees and their cost per car to build is a lot less than UAW built cars and trucks?
I mean, let's look at all of the manufacturers, and even the big three that are now building cars in Mexico, where there is no UAW Absolutely.
I think the UAW's thought is that once they, you know, forced the Detroit three into making all these concessions, they're gonna wall, send the plants in the south and say look at what we did for these guys.
Join the union now.
Yeah, that's already happening, that I've heard that that's already happening.
We need a lot of it's much harder to do in the south because of the right to work right.
Well, yeah, well this is a lot of work.
I'm the president of Mexico.
I am salivating right now because I can go to all these new startup companies and Car companies that want to build a new factory and say, see, what's happening in Michigan, that's not gonna happen here.
Yeah and and and they're not.
The UAW is not looking at it, that they're.
They're my view of the world.
Their destruction of the big three is to their demise.
I mean, ultimately, long term Big three giving in endlessly to their demands is gonna lead to their destruction.
You mentioned that earlier about.
You know, when things turn, turn the other direction, the big three won't survive.
Well, I don't think they're gonna survive anyhow.
Some of it because of the, the negotiation Givens right now.
Some of it because some of the leadership of the big three Don't deserve to be there.
But they're making twenty nine million dollars a year.
My personal it is a mess, you know, and it's happening at a time where we have basically the biggest revolution in the car industry Since the Model T, so Everybody's worried about the future.
The union thinks that they know the path that they want to have to guarantee their future.
The car companies have a path that they want to follow to guarantee their future and the two don't really mesh right.
Interesting which long term is going to lead to the demise of one of the other, or both?
Yeah, the interesting about the batter battery factories is battery factories don't employ very many people.
No, they're mostly automated.
Yeah, I mean the people that they're their employing are fixing the machines that actually built the batteries.
That's interesting.
Yeah there you go.
Well, I mean, if you stop and think about it, that's kind of the way that the cars are manufactured today.
You don't have thousands and thousands of people on a shift at the Rouge factory.
There's a lot of robotics are going on there and that's the.
That's the way that it has been for decades.
You know, years ago in the body shop there was a painter that would spray paint on the car.
That's all robotic now as well.
So when I was in the factory, it was three of us that did the same job Every shift three on the shift, three on that shift and you efficiently, I mean obviously you did your job, and then you count one, two, three, that one's mine, and then you would do that job.
You sit down one, two, three, that one's mine, it was there's two more people that were doing that.
Somebody had two and somebody had three.
Yeah, hopefully you guys could all count correctly.
Well, that's the problem.
And on a.
Friday and a.
Monday.
There's an old myth that when it was Ford, lincoln and Mercury, that they had three different staffs in the plants, and when the Mercury car would roll down the line, the Mercury person would step up and install the part Exactly when the Lincoln car came down, the Lincoln person would step up, step up and install the part.
Totally untrue, I mean, they were all built by the same people.
Yeah, yeah, there was a thought story.
You know, those Lincoln workers were slightly better than the other workers.
Well, yeah, I think it's all cattle.
They were all paid the same because it was a U A W contract Sure.
Yeah, so when do you have an idea in your mind, based on your knowledge of the strike and what all is going on, when this is going to end?
I think we're going to have a lot of news this week.
I can't say it's going to end this week, but I think we're going to have a lot of news this week.
And what's pushed the whole thing forward was the U A W has been expanding the strike every Friday, right that they didn't expand it, they did not yesterday, Right?
And General Motors knows that the next strike target is the Arlington plant down in your area.
Yeah, and that is where GM prints money.
Oh, trucks, SUVs, you know trucks very, very high margin escalates and GM cannot afford to have that factory.
Well, and not only that, but GM has also announced just a couple of months ago that they're going to spend a couple of billion dollars and expanding that plant to make it even bigger.
Yeah.
So it's good that plant in Arlington is going to become huge, huge, and they're going to build lots of vehicles there and they're going to crank them out as fast as they can and they, they have to really settle this quickly.
Well, I always laugh because when I work for General Motors and I'd go to any of these assembly plants and you would walk or drive in and look at the employee parking lot, half of it wasn't General Motors at a GM assembly plant, Half of it was Asian imports.
You know it's kind of self defeating when you don't even buy the product that you build back in the day.
You, you were not.
You were encouraged to buy the brand that you were working on.
It's funny to that end.
Yeah, I worked for Richardson Chevrolet.
They would be ticked if you going out and bought a new car if it wasn't from them and a Chevrolet.
Well, and there are the plants around Michigan.
You'll see the domestic employee parking lots and the foreign automaker parking lots.
Yeah, you give, it wasn't that?
great the four automaker parking lots.
are, you know, out on the back 40.
Which is a big thing in Michigan in the winter?
Yeah, you have to park a half mile from the plant.
Well, it makes sense.
You want everybody to have faith in your product.
It's an advertisement.
All all our people drive the Chevrolet or Buick or whatever it is, and you don't want to.
Behind us, sitting back there with a six foot spoiler on the back of it and a coffee can exhaust.
Yeah, you do.
And tub it out.
Yeah, so what do you think the short term future is of this?
I think we're going to have a settlement Within the next two weeks, a lot of progress this week, and then everybody will forget it happened.
Wow, like like most UAW strikes, it'll just go back to normal.
Everybody will, you know, shake hands and move on.
Go along their merry way.
And how do you think it's going to impact the cost of vehicles?
The cost of vehicles is already sky high.
Oh gosh.
Yes, fortunately, labor costs are only a fairly minor component of the cost of a vehicle, so they might, you might see some incremental increases, but it's not going to be a massive increase.
So this contract?
Okay, so say it's settled today, right now.
How long is that contract good for?
How do they write that in?
In the next two years we're going to renegotiate, or the next five years?
How does that take place?
That's one of the contract terms is to how long it will last.
Generally they've been a couple of years long.
Well, this one here well, this one here, I think, is they keep talking about a three-year contract.
Three-year deal, yeah, three-year contract and I'm sure they're all going to get their back pay and remember that every plant has a slightly different contract.
They have the UAW national contract, but every plant has differences local differences for that plant, right, specific for that plant.
Well, john, it's great to talk to you.
We thank you so much for joining us today and let's chat here after the strike is over and we'll analyze how things went.
Great, looking forward to it.
Enjoy the Northwest, my friend, and we'll talk to you soon.
Thank you, john.
Thank you, john Venson.
Us News and World Report on the UAW strike.
So good predictions, good predictions.
Yeah, it's going to be an interesting time here and, as he said, the next two weeks, but I think, as he mentioned that, I believe that this Friday will be a turning point.
Actually, the real turning point happened yesterday, yesterday.
Yeah, because they didn't announce more strikes and you know when they were talking about the strike, about having a strike several months ago, I said then I said, you know, it's not necessarily the people that are the UAW workers at the actual assembly plants, it's more along the suppliers and, to that end, About 30% of suppliers have had to lay off some workers because of the UAW strike, but that figure will rise significantly by mid-October.
According to a recent survey Now, remember, it takes a while, as we saw during the pandemic, for everything to reach us as consumers, and the microchip thing was massive and nobody saw that coming the Auto Trade Association, MEMA, found that nearly 30% of suppliers have had to lay off some direct labor employees and more than 60% expect to start layoffs by mid-October, according
to a news release.
I think that they're going to come real close to that if they don't actually go through with that, because, remember, there was a supply chain and they were been eaten into the supply chain from these suppliers.
And those are non UAW suppliers most likely, Correct?
They'll go back to work.
Tier two tier three Right, they'll go back to work immediately, but it's going to take time for them to make the product and to get it to the factory.
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Yeah, sorry, I got that.
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Shut up.
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Because all of that will just get passed on to the consumer.
Yep.
But remember I don't know what, I haven't seen the average price of a vehicle here in the past few months, but not that long ago.
The average price, all the cars that are sold, forty seven, thirty, no, thirty five thousand dollars.
That's base base, and then it went up to almost forty thousand dollars Quickly, and most of the cars that Mars and I get these days are forty thousand or above.
Now, granted, they're the top of the line trim levels, but we're not talking about Cadillac, suv, suv, you know, v rods and all that stuff.
We're talking about everyday cars that regular people drive.
It's a lot of money.
So you think about that.
And let's just take a suburban.
I don't think you can get in a suburban anymore for under fifty thousand dollars no, no, no no no, so let's just say that the suburban that you buy brand new stripper fifty thousand dollars.
How much did it actually cost General Motors to make that car?
Overall twenty.
Now, now that that within the industry.
They say GM makes ten to twelve thousand dollars per unit on utilities and pickup trucks, net profit ten to twelve thousand dollars per.
After all the expensive building.
But what was the, what was the sticker price of that?
Because I'm saying a fifty thousand dollars.
You're probably talking about a thirty or thirty five thousand dollar SUV.
Now we're talking about a fifty and I guarantee you that it is at least doubled the amount of that difference between thirty five and fifty.
So double that fifteen thousand dollars on top of what you're saying, right?
So I mean I think that what's their most profitable trucks and utilities are the most profitable, profitable vehicles for Ford, gm and Chrysler.
And then you see the trim level add ons.
Trim level, add ons don't cost seven thousand dollars to General Motors.
No, no no, no.
No, you got your tires and wheels.
I know that I was there.
They don't pay full retail on that.
We're going to take a quick break now, and we're going to wrap up today's show.
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Well, I've been making fun of Mars and his Kona review.
That didn't happen today.
And what did I do?
Save it for later.
Let's see I played all of the wrong commercials at the wrong time, most.
Of them, most of them, and then, on top of that, I've lost the close.
So I don't know, I don't know.
Don lost his clothes.
I lost the clothes.
So you're going to be naked, the naked, the naked ending.
That's it.
It's going to make you naked.
So, I don't know what I did with it, but it's not.
It's not Put your clothes on.
Yeah, I don't know what I did with it, it's in here somewhere.
You got 49 seconds.
Here's the whole show, see it Right there and nothing but the show it's in here somewhere 40 seconds.
How many 45 now you have?
it memorized.
That's it, my Jeff Don.
That's it for today's in wheel time car show.
Bye y'all.
And we will be back with our live edition of the show next Saturday right here, 8am to 11am central Time, Because we got a time change coming up pretty quick.
First week in November, I believe.
Is that what it is?
It's later and later every year, but at any rate, we thank you for joining us today.
On behalf of Mike Mars, king, conrad DeLong.
We need more, jeff Seekin.
I'm Don Armstrong.
Have yourself a great weekend and enjoy the fall weather.
Go Astros buddy.
That's it for this podcast episode of the in wheel time car show.
I'm Don Armstrong, inviting you to join us for our live show every Saturday morning 8am to 11am.
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Podcasts are available on Apple podcast, spotify Stitcher, I heart podcast podcast addict tune in Pandora and Amazon music.
Keep listening and we'll see you soon.
About this episode
John Vincent from U.S. News joins the In Wheel Time Podcast to discuss the ongoing UAW strike and its implications for the automotive industry. The conversation delves into General Motors' recent concession to allow UAW representation in new battery factories, the complexities of labor negotiations, and the potential impact on vehicle prices. The hosts and Vincent explore the challenges faced by the Big Three automakers, the significance of CEO compensation, and the future of union negotiations amidst rising costs and competition from non-union manufacturers.
Original notes
Get ready to immerse yourself in the riveting world of auto industry strikes, the ongoing negotiations, and concessions as we engage in a stimulating conversation with the insightful John Vincent from US News and World Report. We tackle a range of topics including the UAW strike, GM's pivotal concession that could shift the dynamics for the Big 3 car makers, and the astonishing fact that UAW workers in battery factories are set to earn twice as much as their non-union peers. Curious about the potential ripple effects on vehicle prices and CEO rewards? We've got you covered.
As we continue our intriguing dialogue with John Vincent, we try to forecast the likely resolution of the UAW strike, the specifics of the agreement, and the potential impact on your wallet when you next visit a car dealership. Furthermore, we explore the intriguing subject of contract lengths and regional variations between plants. But that's not all. We also analyze the broader influence of the strike on auto industry suppliers and reveal the latest developments in the engine failure investigation of the Ford Bronco SUVs – a scenario that US auto safety regulators are taking very seriously. Don't miss this opportunity to gain a deeper understanding of the auto industry's inner workings!
Be sure to subscribe for more In Wheel Time Car Talk!
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