Good morning! It’s Wednesday, October 4, 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: GM’s $6 Billion Cushion
General Motors is reportedly setting up a $6 billion line of credit to stabilize its liquidity amid the UAW strike against the Big Three. It’s a sign that the automaker is getting ready for the long haul.
The move by GM was announced in a securities filing on October 3. According to a spokesperson for the company, GM wants the 364-day revolving credit line to maintain operational flexibility. From Bloomberg:
As of June 30, GM’s total automotive liquidity stood at $38.9 billion, so it’s not at risk of running out of money anytime soon. But the new credit line is a sign GM may be buckling in for a prolonged work stoppage by the United Auto Workers.
The company has been exchanging offers with the UAW, but its facilities have been targeted for escalating union member walk-outs.
The strike shutdown a GM plant in Lansing, Michigan, last week that makes the Chevrolet Traverse and Buick Enclave crossover SUV models and also silenced a Missouri plant on Sept. 15 that builds the company’s Chevy Colorado and GMC Canyon mid-size picks.
Bloomberg reports that sales of those two models fell more than 10 percent in the third quarter. A spokesperson told the outlet that as of September 31, the strike has cost the automaker $200 million.
2nd Gear: Ford’s ‘Costly’ Counteroffer to Auto Workers
Ford has reportedly increased the size of raises it is offering United Auto Workers union members to an “unprecedented” level. It has also shortened the amount of time it takes for new hires to reach top wages at the company.
It’s the seventh counteroffer from The Blue Oval, coming just three days after UAW members walked out of Ford’s Chicago Assembly Plant as part of a strike escalation. From Automotive News:
The automaker said it would increase temporary workers’ pay 26 percent to $21 an hour, versus $20 in the last publicly known offer, and raise most full-time workers’ pay by “more than” the 20 percent over four years it previously offered, without divulging a specific number. Ford also said it would reduce the time it takes new hires to reach top pay by “more than half,” whereas the last offer cut that time from eight years to four.
Ford said the proposal includes product commitments for every factory with UAW-represented workers and promises no jobs would be eliminated in connection with the four electric-vehicle battery plants it plans to open. The deal would last until May 1, 2028, which the union has requested.
“There’s no doubt our UAW workforce put us on their shoulders during the pandemic, and these same workers and their families were hit hard by inflation. We want to make sure our workers come out of these negotiations with two things — a record contract and a strong future,” Ford CEO Jim Farley said in a statement. “We’ve put an offer on the table that will be costly for the company, especially given our large American footprint and UAW workforce, but one that we believe still allows Ford to invest in the future.”
There’s still no word on if the UAW will accept the contract, but my guess is probably not. Ford’s going to have to come up quite a bit more if they want to meet what the UAW is asking.
3rd Gear: GM Sees Double Digit Q3 Sales Gains
General Motors, despite the strike, is having a grand ol’ time right now. The automaker reported a 21.4 percent sales gain for the third quarter in the U.S. It has sold nearly 2 million vehicles so far this year. Overall, that’s reportedly a 19.3 percent gain for 2023.
As you may have expected, pickup trucks and SUVs led the charge, along with fleet vehicles. From The Detroit Free Press:
In the quarter, GM sold 674,336 vehicles compared with 555,580 in the year-ago quarter. GM also made headway in electric vehicle sales and had its highest total inventory since the third quarter of 2020.
According to Cox Automotive, for the year, it estimated GM would gain a half-percentage point in U.S. market share to 16.7%.
So far, the strike hasn’t really had enough time to put too much of a sales hurt on GM.
The United Auto Workers strike against the Detroit Three automakers has had little impact on GM’s sales in the quarter, but it’s early as the strike started only a few weeks ago. But a prolonged strike could affect GM’s overall inventory, experts said, and that would be detrimental given GM and other automakers had been rebuilding inventory after parts shortages last year crippled production.
“The UAW strike is clearly a major factor that, should it persist, could reverse gains the industry has made on inventory,” said Cox Automotive Chief Economist Jonathan Smoke. “The ‘Stand Up’ tactic by the UAW has so far minimized the initial disruption, but the approach could enable a much longer disruption than has been possible historically. So far, the impact has been negligible.”
EV sales are also up for The General, even as it phases out its most popular electric vehicle, the Chevy Bolt.
In the quarter, GM reported selling 20,092 EVs, and that includes 35 of the Zevo 600 BrightDrop delivery vans. In the year-ago quarter, GM sold 15,156 EVs, mostly Chevrolet Bolts. Through September, GM has sold a total of 56,574 EVs, including having delivered 19 of the new 2023 Chevrolet Blazer EVs, built in Mexico, and 18 of the 2023 Silverado EVs, made at Factory Zero in Detroit and Hamtramck, in the third quarter.
It is still slowing rolling out the Cadillac Lyriq. In the quarter, GM delivered 3,018, up from the 36 it delivered in the year-ago quarter, but since January, GM has delivered only 5,334 Lyriqs.
GM has big plans to launch more EVs in the second half, which the strike could disrupt if it expands to the factories where GM builds EVs such as Orion Township, home of the Chevrolet Bolt and Bolt EUV, Spring Hill Assembly in Tennessee, where the Lyriq is made, and Factory Zero.
In Q3, Buick sales rose 54 percent on the backs of the Enclave and Encore GX, good for best in the company. The new Chevy Trax also sold nearly 38,000 units, which is a 498 percent increase from just one year ago when they were selling a turd.
Same as it ever was, full-size pickups are still killing it. Chevy Silverado sales are up 22 percent to 143,467 units in Q3, and GMC Sierra sales are up 46 percent to 73,219 units. Colorado sales are also up five percent to 25,520 vehicles sold. However, the GMC Canyon saw sales dip two percent to 7,627 units.
Of all of GM’s brands, Cadillac saw the smallest gains, just six percent. Can’t win em’ all.
4th Gear: Stellantis Had A Rough Go Of It
Stellantis has reported a very slight sales decline in the U.S. The automaker saw a one percent sales dip in the third quarter compared with the same time last year. The automaker reports it sold 380,563 vehicles in the quarter, and you cannot blame the strike for the downturn considering it just started a few weeks ago.
Despite the less-than-meh sales, Jeff Kommor, head of U.S. sales at the company, is still touting recent momentum to close out the quarter. Whatever you gotta do, I guess. From The Detroit Free Press:
“We’ve gained traction over the summer and we’re starting to see some momentum at the end of this third quarter,” Kommor said in a news release. “Our Jeep 4xe and Pacifica Plug-in Hybrid models continue to perform extremely well, taking the 1-2-3 sales spots among plug-in electric vehicles in the U.S. market, and our progress toward our Dare Forward 2030 plan also remains on track with the introduction of many all-new, all battery-electric vehicles next year, including the all-new Fiat 500e, Dodge Charger, Wagoneer S, Ram 1500 REV and Jeep Recon.”
Of the company’s brands, only Chrysler saw an increase over the third quarter of 2022, up 96%. Those numbers were boosted significantly by the Chrysler Pacifica. The minivan’s plug-in variant managed a 329% bump over the year-ago period, the company said.
Jeep and Ram sales were both down 4%, Dodge fell 23%, Alfa Romeo dropped 16% and Fiat sold only 145 vehicles in the quarter, a drop of 30%. The company did not report numbers for Maserati.
Numbers were helped a bit for Dodge and Alfa Romeo by the arrival of the 2024 Dodge Hornet, which sold 1,753 vehicles, and the 2024 Alfa Romeo Tonale, which sold 746 vehicles. The company also touted its Jeep Wrangler 4xe and Jeep Grand Cherokee 4xe as the best-selling plug-in hybrids in the U.S. market.
Overall, and slightly worryingly for Stellantis, this decline is actually a shift from the second quarter when the company reported a six percent sales increase from the same period in 2022.
Reverse: Russia Pisses Off The U.S.
Neutral: ONCE AGAIN, HAVE A NEW TWITTER ACCOUNT
It seems Elon couldn’t take the heat anymore, and my old Twitter (or X, idk) account got suspended. So, I’ve risen from the ashes and created a new account. PLS follow @AndyKalmowitz for car content and Jets misery.