UAW is coming after Rivian

[Tampa R1T]

from investing.com -

VW boosts pay following UAW gains


German automaker, Volkswagen AG VZO O.N. (ETR:VOWG_p) announced Wednesday that the car company is implementing a pay bump for their production workers at the Chattanooga plant in Tennessee by 11%.


Volkswagen and other car companies in the U.S. that aren’t part of a union are feeling pressured to improve pay and benefits after the United Autoworkers (UAW) secured some major concessions in their newest labor contract following a six-week strike against the Detroit Three.


Honda Motor Co Ltd ADR (NYSE:HMC) and Toyota Motor (NYSE:TM), both non-union companies, have also increased wages for their factory workers in the U.S. The moves coincide with signs that the union might be eyeing foreign-owned auto plants, like Tesla’s, for potential unionizing efforts.


Hyundai Motor Co DRC (OTC:HYMTF) has also declared plans to raise wages by 25% over the next four years for their non-union workers in Alabama and Georgia.


Volkswagen’s pay hike kicks in from December, and they’re rolling out a quicker wage progression starting in February.

Sponsored

 

[Donald Stanfield]

cool story

Great rebuttal.

Someone correct me but the accountants and engineers are at corporate, earning fixed salaries, and thus aren't UAW members. They are part of fixed overhead, which is a considerable cost, but again, not affected by rises in plant wages.

Not making a comment for or against unions by the way, just pointing out the reality that when it comes to car building, hourly plant wages do not materially move the needle. The cost of materials to build the vehicle however, does.

Also keep in mind that even if a car is $2000 more than its competitor, that won't discourage a potential sale. Another fact is 80% of all new car purchases are financed, with the rest being leased (cash purchases are rare). At the end of the day it's the monthly payment that matters most to car purchasers, and $2000 over the course of the loan or lease is inconsequential.

Hourly plant wages, especially pensions, absolutely do move the needle when you're competing with places like China. Raise those prices even that 2k you mentioned, which seems like a BS figure but we will go with it, and you're going to lose market share. In case you're unaware, exporting profit to a country that sees themselves as our enemy isn't a great idea.

 

[emoore]

Great rebuttal.


Hourly plant wages, especially pensions, absolutely do move the needle when you're competing with places like China. Raise those prices even that 2k you mentioned, which seems like a BS figure but we will go with it, and you're going to lose market share. In case you're unaware, exporting profit to a country that sees themselves as our enemy isn't a great idea.

Comparing to china is a non starter. Can’t live in the US with slave labor wages.

 

[RivRyan]

Unions lie and give kickbacks to politicians to secure their place in the market and as such they are anything but free market forces

LOL

I know some other interests commonly considered free market forces that you must not consider to be so…

Or maybe you’re just not consistent.

 

[Donald Stanfield]

LOL

I know some other interests commonly considered free market forces that you must not consider to be so…

Or maybe you’re just not consistent.

How about you ask clarifying questions instead of assuming my position for me. I know that your strawman is much easier to defeat but its not a very good tactic if you want an honest discussion.

Not to mention why are you changing the topic? Does forced membership make unions free market? Why are unions always defeated in right to work States, when all right to work does is give employees choice in whether or not they want to be union? Seems like choice is a foundational aspect of free market economics.

 

[Dark-Fx]

Fact: it's easy to have an opinion without zero facts to back it up.

Glad you can identify exactly what you did

 

[Donald Stanfield]

Comparing to china is a non starter. Can’t live in the US with slave labor wages.

There isn't a single non union domestic factory paying "slave wages" which makes this irrelevant. Comparing to China is absolutely relevant when talking about market share. I'm not sure if you noticed but China makes lots of things that are sold here.

 

[emoore]

There isn't a single non union domestic factory paying "slave wages" which makes this irrelevant. Comparing to China is absolutely relevant when talking about market share. I'm not sure if you noticed but China makes lots of things that are sold here.

Exactly. Can’t pay US workers the same as Chinese workers. So comparing them isn’t relevant.

 

[Donald Stanfield]

Exactly. Can’t pay US workers the same as Chinese workers. So comparing them isn’t relevant.

I wasn't, I was talking about market share which is a totally different concept.

 

[mkhuffman]

Also keep in mind that even if a car is $2000 more than its competitor, that won't discourage a potential sale.

You just made that up.

If you have data to proves a $2k increase in price has no impact on sales, you should provide it. Otherwise, basic economics apply. As prices increase, sales decrease for goods that are not staples. That is a fact.

And what China sells here is definitely relevant. I won't buy a CCP infected car, but many will. And if you are paying attention, they are upping their car game. Look at the latest Volvos.

 

[SANZC02]

You just made that up.

If you have data to proves a $2k increase in price has no impact on sales, you should provide it. Otherwise, basic economics apply. As prices increase, sales decrease for goods that are not staples. That is a fact.

And what China sells here is definitely relevant. I won't buy a CCP infected car, but many will. And if you are paying attention, they are upping their car game. Look at the latest Volvos.

I thought his statement was pretty out there as well. Many people drive 2 miles or more to save a dime on a gallon of gas, shop on Black Friday, clip coupons…etc

If $2k did not make a difference you would never see dealer rebates, sales or interest rate kickbacks that often come in at under 2k total savings but do increase sales.

Even if on some prices 2k did not make a difference, at some point it would cross the magic walk away price limit either by choice or ability to pay it.

 

[PBRAZ]

That monthly payment thing is a joke and bad dealers use it to oversell vehicles and get people into more vehicle than they want or need.

Back when I was getting loans for cars I would never shop at a dealer that would only talk monthly payment. The better trustworthy dealers would talk vehicle price.

I find real estate agents will do the same thing, it was always hard to find agents that would show me what I want and not what they could get me into.

100%. But do you know why they do it? Because it works. A lot.

 

[PBRAZ]

You just made that up.

If you have data to proves a $2k increase in price has no impact on sales, you should provide it. Otherwise, basic economics apply. As prices increase, sales decrease for goods that are not staples. That is a fact.

And what China sells here is definitely relevant. I won't buy a CCP infected car, but many will. And if you are paying attention, they are upping their car game. Look at the latest Volvos.

Certainly, look in the mirror. Ask yourself if another $2k would have discouraged your purchase (tax credit aside, if you qualified). You would be lying if you said yes. That's only $30 a month extra over the course of your loan.

Cars aren't $20k any more. Or even $40k. The average new car price is almost $50k. Everyone on this board paid $80k to $100k. $2k more isn't even making a dent.

Other vehicles have manufacturer & dealer incentives which means you might not even see it. Or negotiate it out.

There is absolutely a threshold. But it's definitely above a few percentage points given today's high car prices.

 

[mkhuffman]

Certainly, look in the mirror. Ask yourself if another $2k would have discouraged your purchase (tax credit aside, if you qualified). You would be lying if you said yes. That's only $30 a month extra over the course of your loan.

Cars aren't $20k any more. Or even $40k. The average new car price is almost $50k. Everyone on this board paid $80k to $100k. $2k more isn't even making a dent.

Other vehicles have manufacturer & dealer incentives which means you might not even see it. Or negotiate it out.

There is absolutely a threshold. But it's definitely above a few percentage points given today's high car prices.

The primary assumption that needs to be true to support your position is that there is no competition. If a buyer has decided to buy a R1T, and has determined there is no viable competition, I agree a $2k increase will be irrelevant, especially if the purchase price is $100k.

But that is not an assumption that is true for most people. For example, I love the R1 vehicles. They are awesome. I purchased a Mach-e because I was tired of waiting for Rivian to produce the Max Pack version. Now they have produced it, and I am very much underwhelmed.

I have not decided what I will buy to replace my MME, and certainly the R1 Max Pack is at the top of my list. But I have a list, and the final price is definitely going to be a factor.

If I am trying to decide between an R1 and a competitor, and I feel they both are equivalent feature wise, price will be even more important. And I will pick the cheaper option. As would most people.

It is basic free market economics. As long as consumers are free to choose, and there is market with various choices, a $2k price increase will reduce demand. Guaranteed. It is ECON 101.

 

[HaveBlue]

Uaw works great just look how manufacturers flock to Detroit eager to employ their workers. I'm shocked rivian was able to find a plant so cheap. Uaw is doing a great job attracting jobs.

Non union increases have nothing to do with inflation or cost of living increases. Nope it's all uaw! Give them boys a raise in dues!

Sponsored