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Rising labor costs propel automakers toward robotics and automation

Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry. 

I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us.

At the risk of sounding repetitive, I’m a huge fan of automating processes. At Automotive Ventures, we’re on the hunt for startups like WarrCloud that can create win-win situations by automating manual tasks: getting work done quicker, more accurately, while at the same time helping dealerships save costs.

Robotics and automation are also transforming the way vehicles are built. Automakers are looking to robotics to help offset rising labor costs.

For decades, car companies have increased the use of automation inside their factories.

But now, with competition from sophisticated players like Tesla, which has been more aggressive in deploying robotics, the legacy OEMs are forcing through more change. 

As the UAW approved a historic labor contract in late 2023, Ford, GM and Stellantis realized a record 25% wage increase over four years, which marked the sharpest labor-cost increase for the companies in recent memory. 

Very quickly, the effect of this negotiated labor contract rippled through non-unionized shops, with Toyota, Hyundai and others increasing wages to stay competitive. Shawn Fain has said that targeting Tesla is next.

Detroit CEOs reported that the new UAW contracts were richer than they had planned for, and have made it no secret that they’re exploring ways to offset resulting increased costs.

Ford said the UAW contract is expected to add about $900 in cost per vehicle. GM executives estimate that the new labor contract will add roughly $500 a vehicle.

If we look back, automakers have used robotics since at least the 1960s to make manufacturing more efficient.

Fast forward to today, and the auto industry is a top consumer of robots, according to the International Federation of Robotics. The global automotive industry installed 136,000 new industrial robotic units in 2022, second only to the electronics industry.  

Many of the robots on the production line are called cobots, which work alongside workers to access hard-to-reach spots or perform tasks that are particularly physically demanding. For example, Ford has at least 100 of these cobots across two dozen of their plants around the world. 

Tesla has been a leader in factory automation and robots, which has put pressure on competitors, who are envious of their bigger operating margins. Elon Musk has said that introducing more automated equipment at Tesla is a part of achieving their goal to cut the cost of making future models by 50%. 

Automakers are likely to introduce more robots and other forms of automation over time, replacing workers as they retire, rather than displacing their current workforce.

In an interesting example of the law of unintended consequences, the rich UAW contracts of last year are likely to speed the automakers towards a future of greater automation, which will ultimately mean far fewer UAW jobs. 

Companies to Watch

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and take the opportunity here to share that company with you.


DeepHawk offers next-generation AI for visual quality control on manufacturing production lines.

DeepHawk is deployed as an edge software agent, running on compact and cost-effective off-the-shelf hardware. It is compatible with any camera (whether visual, X-Ray, infrared, or microscopic), and detects anomalies for any product (including discrete, continuous, bulk and packaged goods).

DeepHawk goes into production 1000x faster than traditional AI solutions, learns incrementally, adjusts to a new design immediately and detects anomalies in 15ms with exceptional accuracy.

If you’d like to learn more about DeepHawk, you can check them out at

So that’s it for this week’s Future of Automotive segment.

If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new DealerFund.

If you’re interested in joining our Investment Club to make direct investments into AutoTech and Mobility startups, please join. There is no obligation to start seeing our deal flow, and we continue to have attractive investment deals available to our members.

Don’t forget to check out my book, The Future of Automotive Retail, which is available on And keep an eye out for my new book, “The Future of Mobility”, which is almost done, and will be out early this year.

Thanks (as always) for your ongoing support, and we look forward to working closely together with you to create the future of this industry.

Thank you for tuning into CBT News for this week’s Future of Automotive segment, and we’ll see you next week!

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Steve Greenfield
Steve Greenfield
Steve is the Founder and CEO of Automotive Ventures, an automotive technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies. They also assist PE firms to conduct due diligence on automotive technology acquisitions, advise technology CEOs on strategy, and help represent sellers at the time of sale.

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