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Originally Posted by Street Pharmacist
Interesting times for North American car makers, at least the big 3 anyways. Absolutely massive win by the UAW means Detroit's competitiveness just took a big hit. Ford estimates that this deal will add about $800 per vehicle. Average wages are now going to be over $100,000 USD with top tier health care and retirement benefits.
Add in a slowing vehicle market and you're seeing a reluctance to invest in new technology. I get it, your manufacturing costs just went up so you decrease expenses. The trouble with this strategy is that old technology vehicle sales (ice) are most at risk. They need the investment now so they can compete in the future. Vehicle sales are more global now than ever and they need the investment to scale up so their costs can come down.
Globally, vehicle sales peaked in 2017. Since then, all of the growth is in electric vehicles. It doesn't take a economics guru to see what a vehicle company needs to do to be competitive in the future. Almost a third of all vehicles (including ones made by Ford, GM, and Stellantis) are made in China and I don't see this increase in costs helping that trend.
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The big thing is that Chinese EV companies haven't even matured and broken into the North American market. Their huge install base means a huge test bed to develop and mature technologies. The huge installed market base also means they have economy of scale to mass produce as well as trial innovations. Once that happens, it will be like the 60s/70s when cheaper but more innovative Japanese imports disrupted the North American market and dominated.