Exploring the Impact of the UAW Strike on the Auto Industry and Consumer Behavior

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 11 am Central.

We'll see you then.

Welcome to the in wheel time car talk show coming up.

We're gonna talk to shame an award with the Anderson Economic group about the ongoing UAW strike.

Jeff has a segment on the seven most unreliable cars.

Yeah to that.

Conrad has the racing calendar and the car clinic, and later we have the stories making automotive news headlines this week.

Just ahead, this segment of the in wheel time car talk show.

Howdy, along with Mike out of this world, mars Matching green shirts from King Conrad the lawn.

We have the pumpkin spice kit.

We need more Jeff Seekin pumpkin spice kid.

I'm Don Armstrong, glad you could join us on this Thanksgiving show for 20 Thanksgiving no, no see, thanksgiving we have a turkey.

Birds.

We were bird on the stretcher you're reaching.

Well, what about the ghost over there?

I well yeah, maybe, boo, we would be around when I was jumping ahead.

Yeah, I think, pumpkin spice and I think, thanksgiving.

Yeah, I got you it makes you have that We'll let you that where my sick brain goes, kona was the Christmas tree show that's coming up Kona.

Alright squirrel joining us now.

Shame out of war.

Anderson Economic Group.

Shea, good to talk to you.

It's good to have you with us this this morning.

Thanks so much.

Thank you for having me back.

It's gonna be gonna be great and then so good to see you guys about to celebrate Thanksgiving.

I must say this turkeys might be thinking this is Halloween.

Yeah, yes.

They know the end is near and they're scared.

Yeah, they are scared.

So, shay, talking to you today about the the UAW strike that appears that it may be Coming to a close all the details aren't in yet 25% pay hike for all of those involved with the United Auto Workers, and of course I'll all got to be ironed out, spelled out and then approved by the auto worker down yeah.

I think that that's going to happen Is my gut feeling on that.

But all the damage that's been done over the past five weeks six weeks it's it's pretty extensive.

Yeah, I think I usually was the right word extensive.

It has been an extended strike.

I mean six weeks this past Friday, so that is probably a day extra compared to the GM strike.

In 2019, gm strike lasted nearly six weeks, and then, when we're looking at the economic losses, as of the end of the fifth week, we were looking at nearly 9.3

billion in total economic losses.

That also includes wage loss, suppliers loss, losses to OEMs, as well as industry losses, such as impact on the dealerships and and consumers like you and I.

I was gonna say how does that affect the general guide walking down the street?

So you can look at from different perspectives.

A If you look at the footprint of this strike, it's not just concentrated in one state, one region.

It has spread Across the country in the past six weeks.

What that means is if you have workers losing Jobs, if they're layoffs and if they are any individuals on, even on pay strike, the, the, the ability to spend on consumer goods it tends to affect.

So hence, if there are any retailers that's my mom and pop shops relying on those industry clusters around those plans, I mean they they might have, they might have seen some decline in foot traffic and and you're looking at households Trying to figure out if their budget constraints might look different doing the strike and even after Well, you know, we have a huge assembly plant in Arlington.

Matter of fact, General Motors just mentioned here in the past year that they're going to spend over a billion dollars in expansion of that plant and there are a lot of people that work at that plant.

I have 5,000 people.

I've got 5,000 people and I've chances are that there is somebody that watches this show in the state of Texas.

That probably knows somebody or somebody related to those folks and you know, going from whatever wage they made to $500 a week, it's, you know, that's significant and how's it going to affect their Christmas.

So now that that plant went, on strike a couple of weeks ago.

Even though the strike's over, there's a long term effect of that loss of income as we go into the Christmas season.

See, you've jumped from Thanksgiving to Christmas.

I'm moving quick.

I am moving quick, like this show does, but it's a lot and we don't really think of it.

Oh, that doesn't affect me.

Yes, it does, somewhere down the line.

It does affect you because it affects those people.

The auto industry is massive, it is absolutely massive.

Think do you know somebody that doesn't own a car?

I, personally, I don't think that I do.

That relies on mass transportation here in the Houston area.

No, I don't.

Maybe in New York.

Okay, I get that because they have an infrastructure there that really depends more, I think, on the mass transit.

And one of the areas I see the impact because I do, you know, I'm a claims adjuster now for an aftermarket warranty company is the unavailability of parts to fix people's cars because of the strike and the plants that were selected by the UAW.

Well, to that end, there's even parts that have not recovered from the pandemic, Right right.

And you know, and some of those tier two, tier three suppliers that just for six weeks of this auto strike, are going to go out of business and will never come back and some of those parts may never be available again because of the proprietary nature of what they were building.

You know it's going to have a lasting effect.

Yeah, so I mean it's.

I guess the point of this is the fact that this is going to go on, even though the strike may be coming to an end and it finally will be ratified and everything everybody goes back to work, that we're going to feel the effects of this for months to come.

Absolutely, and I'm glad that you guys mentioned a few things.

You mentioned pandemic because let's not forget, it was just a few years ago.

Even after a pandemic, the entire auto industry went into a supply chain hurdles or you can call it disruption.

I remember walking around the Lansing area where I live.

There were thousands of GM cars parked because in the parking lot, empty parking lot cars were parked on campus because they were not enough semiconductor chips to complete the product.

That impacted the dealership's ability to sell vehicles to their customers.

And then that did not happen.

We saw an impact on the sticker price.

The average transaction price just went up from nearly what?

$30,000, $38,000 per new car to nearly $50,000.

I think it's touching $48,000, $49,000 nowadays.

So at some point, when you mentioned, yes, there's a small term effect on wages, small term effect on households that are going through this event, which is the strike, but then the long-term impact would eventually be felt by many of a typical American who may not even live closer to these affected plants, solely because how, as you mentioned the auto industry, which is a massive industry and it's also pretty competitive

.

Let's not forget that we are not looking at the entire industry.

We are looking at three legacy US OEMs that are supposed to be competing with brands such as Toyota, honda, honda, kia.

And then, in the midst of this entire strike, we are supposedly in an EV transition.

We are supposed to be.

The US companies are supposed to be making more EVs.

They're supposed to be making EVs that are willing buyers are looking at and then they want to buy those compared to Hondas or Teslas.

But then, when we are not focusing on the EV transition the way we're supposed to, we are looking at losing competitive edge.

But we saw that.

Well, yeah, and if you think they lost money for the strike here, hold my beer.

Watch how much money we're about to lose doing EVs.

And that's.

I think that's going to be a greater financial loss.

And I wrote down a couple of things.

I think there's going to be a strike hangover or sort of like a buyer's remorse going on with these workers that voted for this or will vote for it.

I'm thinking that they've all got to go back to work now and they're all contemplating and thinking I've got this great contract.

Is it really worth it?

Is it really going to benefit me?

I think there's going to be some backlash, maybe a year, 14, two years down the road that it really wasn't a good idea.

Well, the other thing and let me just mention this to the tier two and tier three suppliers they are going to have to now compete amongst themselves for workers, because if you make a widget and I make a widget and I pay Conrad, an extra dollar an hour may not sound like a lot, but think about it.

Yeah, over the time, lots of people are going to go for that dollar.

There's going to be a lot of jumping, yeah, so a lot of jumping.

So, taking that a little bit further and I was looking through some of that we got a ton of information from y'all about the workers and the fact they've been out on six weeks now.

You know I'm from East Texas.

We've had some nasty strikes over there last over a year, shootings on the picket lines.

We've had all kinds of stuff over the years and I've got an opinion that I'm asking you from your perspective, are these workers really going to get value?

Are they going to be ahead of the game Because of what they've lost, the loss for?

six weeks and what they're doing.

The buyer's remorse, yeah.

That is actually a very good question.

Are they going to gain?

Some workers might, yes, but many may not have any clear directions as to as to what is stored ahead.

I mean, as of right now, we know that there is some.

There is some contractual bargaining going on.

Yes, we know that they're pushing for higher wages and then, yes, they might get it.

But then we also have to factor in the inflation and the rising cost of living.

Is that going to impact a typical workers ability to buy and spend more?

That is a big question.

At the end of the day, are you able to save enough for your next generation for a college fund?

Are you able to spend enough money on allocationing?

Are you able to buy big ticket items such as vehicles and able to afford mortgages?

But let's look at the interest rates.

So I think, when we look at the economics side of it, just because your ability to earn a little more goes up, that doesn't mean your ability to spend and consume improves.

You're looking at a lot deeper than I was.

I was just looking at it and saying, OK, these guys just lost six weeks of wages.

How long is it going to take their new contract to make up for that and then for actually see improvement?

Well, here's the other caveat on all of this.

And to bring it really home, let's look at the suppliers.

Conrad mentioned the fact that you know They've got the manufacturers really don't manufacture anything for the most part, they're assemblers, right, and so they depend on their suppliers to supply them with the parts that they put together to make a car.

How does that affect me locally?

Well, are you?

First of all, they haven't been making cars for six weeks for the most part, and we'll just use that as an example.

Okay, they've got that dealership that is depending on that particular model to get them through the next month or two, and they don't have that ability to do that because they can't get the car, the car's not being built?

Yeah, but day's supply has been pretty strong.

But I think there's going to be an air bubble in the pipe from this six weeks.

That's going to have an impact on that day's supply.

But right now I think that you know, I think still GM Stalantis are 60 days supply.

But that's the overall, because they make more than one model of car and you know there's going to be that one plant that was shut down during this time.

Silverado, ram 1500, ford F-150, because those were the ones you know.

Uaw chose those for a reason because those are the high profit margin.

Right, and those are the factories, for the most part, that are running two and three shifts.

And, if we can add, let's not forget brand loyalty.

I mean we have some issues with the EV transition, but let's not forget that brand loyalty and consumer perception.

It matters so much when you're trying to launch something which you haven't launched, you're trying to sell something you haven't sold enough and you're looking at few extremely well oil competitors such as Tesla or other brands who do not have to worry about unions or ensuring that products are built inland.

I mean, we're looking at some import brand as competition in the next few years and then we are.

The question is, are we ready for that and are you ready to influence the brand loyalty again the way we did many decades ago?

Because it has been.

We look at the data, I look at data.

I mentioned that last time you look at the data, I do not see the US automakers at the top five consistently.

There's always a threat when it comes to market shares and then we see that shifting every time there's a major event.

It shifted again.

It shifted in the favor of Honda and Kia.

The moment they improve their brand in the past few years and they are capturing market shares from Honda, from Ford, from Chevy, but the moments any of these import brands are able to launch EVs that people are willing to buy, and they find it a little cheaper than Ford's or Chevy's.

Guess what you would have to figure out any?

You have to figure out some ways to fulfill those aggressive promises that they made in the past couple of years, and I see that as a concern, because we have made some aggressive deadline as well as goals, and I realize that going into the election year, people do remember those promises and then they might hold out some of these public officials, including CEOs, accountable in case if they're not able to see that

planned being able to produce batteries or electric vehicles and then offer new jobs in the next four or five years.

But one of the things that I mentioned here in the last hour of our show, now that the price of the cars for the UAW built vehicles are going to go up, as they would anything else, that you're going to raise their prices, their rate costs, for 25%, 25% increase in pay.

Now you're going to raise the price of those UAW built cars and in some cases they're going to be in competition with $100,000, say, mercedes-benz, as opposed to the $100,000 Chevrolet Suburban.

Which one am I going to buy?

I got the $100,000.

I get that, but is it time for me to switch over to Mercedes-Benz?

I think that there's going to be some of that.

That's going to occur, don't you?

All still by Chevy.

So well, based on the data, that you guys the repair cost too Well there's, yes, there is that.

Well, based on the data that you're looking at, what do you guys perceive the increase in the cost of vehicles is going to be over this new UAW contract that's being proposed right?

now.

To be honest, it's hard to tell.

I mean, it will take.

We are looking.

The good thing is, in the past six weeks we looked at more data and then we will start seeing more data in the next few weeks and maybe months, and then we will be able to have a better understanding of how much of a cost shift would occur in the next couple of quarters.

And at this time it's pretty raw.

I mean we're still looking at an ongoing strike, I mean it hasn't ended yet officially.

So maybe in the next couple of months the next quarter, you would know and especially if we notice any decline in consumer appetite to buy new vehicles come the Christmas time.

So next few months, and especially Interest rates and all that, yeah.

So the Fane is the president of the UAW.

When is his contract up?

When does he get voted out?

Or to extend his presidency, because there's going to be some people that are saying, man, we wouldn't even really get what we wanted, it's all his fault.

Whatever the case, when is his up?

So I noted that you can be on public opinions good side for a bit, but once the fatigue factor kicks in, and then you will notice an average consumer's ability to spend the way he or she wanted to if it started getting impacted I mean, that's human nature.

We do tend to find scapegoats, and most of the times those in prominence, for instance Sean Fane here he might be in a hot seat right now, but come a few months down the road you might see people Fingerpointing.

So that's my anticipation.

I've not seen his contract.

I don't want to see his contract At the end of the day.

If it impacts whatever has happened in the past six weeks, if it impacts the auto industry, that's what we quantify, that's what we look at and I have said that numerous times since 2020, every year there has been a disruption.

So and you mentioned I know we're running out of time, but you mentioned that, like Hyundai and Kia had an event and they've taken some shares.

Is that why Can you do that real quick, or do I need to wait till the next time we talk?

I mean, you mentioned that they're.

That's too long, we're running out of time.

My bad, I'm going to invite you back so I can ask you that question.

Well, you already asked it, so let him finish.

Go ahead.

Yeah, no, I'm just in a nutshell.

If people like you, they will buy what you're selling.

If they like what Kia and Hyundai are putting in a car, if they look nice their logos have changed people would buy it.

Yeah, so the brand loyalty goes out the window.

Yeah, emotions create emotions and we have to create positive emotions amongst the US automakers.

That is the end of the last issue.

Shay, it's always great to talk to you.

Thanks so much for joining us today.

Let's talk at the end of the first quarter of 2024, shall we?

Sounds like a plan.

All right, thanks again.

Thank you.

Anderson Economic Group.

Great information yeah that's always good stuff.

Time now for the In-Wheel Time Race Card sponsored by Texas Nostalgia Modified Production.

Well, nhra is coming to an end, or the NHRA season is coming to an end, so they are in Las Vegas this weekend and then Pomona Finals is November 9th through the 12th and that'll be the end of the season, so it'll be interesting to see.

Can Erica continue her winning ways?

Absolutely.

And pull off her sixth.

World.

Championship.

That'd be great Crow stock, yeah, I think it'll happen.

My question is what are they going to switch to?

Because, think about it Camaro goes out of production.

What is?

I don't think that they're going to switch.

I think they're going to stay with the Camaro for next year.

Yeah.

Oh see, and I've been kind of looking at all the effort they're putting in Quadra's Mustangs, thinking that may be a transition car for them is switching over, though when she switched over to Chrysler that didn't work real well.

No, so anyhow.

Also, nascar is at Martinsville this weekend.

They're in Phoenix for the finale November 5th Circuit of the Americas.

Had, I thought, a decent race at Cota.

You know some controversy in it as well.

I did watch all of it, I just got bored about it.

Hamilton was disqualified.

Of course he was.

Yeah, a couple of drivers were because of the skid plate on the bottom of the car, Because the car the ride height was a mess and then.

So they are in Mexico City this weekend, they're in Brazil on the 5th of November, they're in Las Vegas on the 19th of November, which should be pretty cool, that's, we're going to run it down the strip.

Yeah Well, I've talked to a couple of people in Las Vegas and they have been under construction, resurfacing all of those roads, since the announcement of the run.

Wow, so it's been a bit of a mess there, but I think that's going to be a pretty cool race the way that they're going to run it Right down the front of the Bellagio and then Abu Dhabi is the 26th of November and that's it for the race car.

All right, thank you very much.

Jeff's got a segment that we've been kind of all looking forward to and it's called the top seven most unreliable cars.

I wonder how many of them were built by the?

UAW.

What this is is.

This is a consumer report survey, and they've got other cars listed in there as well, beyond the top seven, but I took seven and this is what we have, and these are all based on reliability.

The score that consumer reports does is zero to 100.

So these cars are all rated zero to 100.

And our first one is a GMC product.

Gmc is a brand that suffered a terrible two out of 10 score through consumer reports for the Yukon and scored 11 out of 100,.

I say 10, two out of 100, and then 11 out of 100 for the Sierra 1500.

Oh my God.

So this is all based on 11 out of 100.

That kind of borders on the use suck level, yeah, but was there a word for that?

I don't know.

But wait, there's more.

Home by beer, yeah, home by beer.

Number six on this list is everyone's favorite Mercedes-Benz.

Mercedes scores two positions worse this year than last year, with the GLE being its least reliable model in the Consumer Reports Survey.

So that and Don always has the Mercedes-Benz recalls, and there go pages upon pages.

So yeah, it doesn't give the actual number but it does say it dropped from last year's numbers, Right, yeah?

And here's another favorite Volkswagen number five.

None of the four VW models the Jetta, the Atlas, the ID4, and the Tiguan scored above 50 points out of 100.

But the Tiguan was the worst at just 17 points.

What Leslie just buy.

Oh no.

I was going to skip that one.

I'm sorry, leslie, it's a pretty car, it is.

It's just pretty in the shop too.

That's the way they record it out of the 100.

The next one is Genesis.

I believe this one Hyundai's luxury brand had just two models represented in the Consumer Reports study.

While the G70 scored 55 points out of 100, not bad the GV80 scored just five points out of 100.

Well, first of all, the grille overpowers the front end.

Yeah, it is that needs to go, and they're one of the most God-awful things to repair Screen door and a submarine.

That's what that looks like.

And number three in our list today would be the Jeep.

Though the Jeep, cherokee, wrangler and Gladiator are able to get you off the beaten path, that no problem, they can also land you in the shop with reliability scores of 30 for the Cherokee, 25 for the Wrangler and 23 for the Gladiator.

That's why they all come equipped with tow hooks.

Oh it winches, got to have winches.

Here's one that I didn't expect to be on the list.

It is number two, and it is the Tesla.

I've heard this.

Yes, the Tesla Model 3 EV scored the best of the brand with 59 points, but the Model S, the Y and the X scored 20 for the S, 18 for the Y and five points for the X.

But what can go wrong with it other than the motor?

There's no oil leaks, that's for sure, yeah, but it's all of the.

From what I hear, it's that the trim fit.

The onboard electronics and stuff are not just confusing but fault-based, and it could be the battery issues too.

A lot of battery issues but it retains its position.

Like a high-tech Ugo.

Yeah, as the list of the second least reliable brand.

Ladies and gentlemen, drum roll please.

Number one on this list is Lincoln.

George's luxury brand, Lincoln retains the dubious honor Mike, you know that word of being the least reliable, with the aviator being the most egregious offender, Like being shot in the back of the head.

It's a shame, as Lincoln does make some really good quality products and other lines of it.

They are enjoyable vehicles, but in this case, through Consumer Reports, they're number one on the list favorable.

So yeah, there you go.

It's good to be known for something, but this isn't something to be known for.

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Exploring the Impact of the UAW Strike on the Auto Industry and Consumer Behavior

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