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.
We’ve discussed before on this segment that last year’s UAW victory may be short-lived and have unintended consequences.
While our argument has had more to do with automakers focusing on robotics and automation to eliminate increasingly expensive union workers, we got somewhat different, but related news out this week from automaker Stellantis.
The UAW hailed its new contract with Stellantis in November as a triumphant moment, winning $19 billion in new U.S. investment, 25% wage increases and full-time status for more than 3,000 temporary workers within just the first year.
But not all employees have been lucky enough to reap the benefits of that historic UAW deal. Hundreds of Stellantis workers have since found themselves out of a job, and the automaker has raised the possibility of additional layoffs as it absorbs the higher labor costs, shifts to building more electric vehicles and confronts global economic uncertainty.
The recent job cuts have outraged the union leaders who had celebrated the contract windfall last fall.
After Stellantis dismissed 199 full-time workers at a plant in suburban Detroit, the company also said it would implement indefinite layoffs across its U.S. footprint in the months ahead to “help improve productivity and ensure the company’s long-term sustainability in a rapidly changing global market.”
The cost-cutting quest has affected more than just hourly workers and those in the U.S.
One highlight of the UAW’s new contract with Stellantis was that the company agreed to give 3,200 temporary workers full-time status within a year. Temporary workers, which Stellantis internally calls supplemental employees, are generally used to fill in for absences or when a plant needs more workers for a short time.
The newly negotiated contract raised starting pay for those jobs from $15.78 to $21 an hour and bars the company from keeping workers in temporary status for more than nine months.
But the approach Stellantis has been using to comply with that commitment isn’t quite what the union had in mind.
The company terminated 539 of these temporary supplemental employees across the U.S. in January and 341 at its Jeep Wrangler plant in Toledo, Ohio, in March. An additional 239 temp workers were cut at a parts sequencing facility.
With competition globally from cheaper vehicles coming out of China, and vehicle cost of ownership higher here in the U.S. due to the combination of MSRP inflation and higher interest rates, automakers need to ruthlessly focus on removing operating and production costs. I believe that new UAW contracts containing inflated wage expense is only going to redouble the automakers’ focus on using robotics and process automation to eliminate as many human positions as possible.
Stellantis may only be the first of many automakers we see struggling to reconcile higher labor costs, courtesy of renegotiated UAW contracts, under the stark realities of a more globally competitive auto market.
Companies to watch
So, with that, let’s transition to Our 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.
Today, our new company to watch is EMMA Systems.
EMMA is a SaaS-based, AI-driven platform for airports and airlines that creates a unique, real-time and forecasted view on operations and performance.
EMMA adds visibility and predictability, helping to realize immediate efficiency and sustainability gains.
EMMA is a real-time information platform bringing together data from numerous aviation partners. EMMA translates this data into a web dashboard integrating multiple legacy systems providing one snapshot analysis of the entire aviation operations, from flights to ground movements to weather to passengers to baggage to an aerial view of the aviation runway and much more depending upon the aviation users’ wishes.
EMMA Systems allows for full flexibility on all levels, with airports themselves in control of what they want to see, measure, and configure.
EMMA intends to make aviation operations more efficient and predictable and generate accurate forecasting using the most accurate, real-time data.
If you’d like to learn more about EMMA Systems, you can check them out at www.EMMA.aero.
So that’s it for this week’s Future of Automotive segment.
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Don’t forget to check out my book, “The Future of Automotive Retail,” which is available on Amazon.com. And keep an eye out for my new book, “The Future of Mobility”, which is almost done, and will be out soon.
Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!
