AD #3960 – Rivian Cuts Secret Deal with UAW; Stellantis Revives the HEMI; Canoo At Death’s Door

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

VW & UNIONS CLOSER TO A DEAL, OR MAYBE NOT
We’re getting conflicting stories out of Germany over negotiations between Volkswagen and its labor representatives. Some reports say the two sides are as far apart as ever. Others say they’re inching towards a deal. And that shows the back-and-forth nature of these negotiations. VW said it may need to close 3 assembly plants in Germany, and analysts say it needs to lay off 30,000 employees to hit its modest profit goal, which is a 6.5% profit margin by 2026. And of course, the labor side doesn’t want any of that to happen. But Volkswagen is in a really tough position. If it gives in to labor demands it will be uncompetitive and could die a slow death. If it rejects labor’s demands, it faces crippling strikes. We think they will probably hammer out some sort of compromise that will leave both sides dissatisfied. 

AVERAGE CAR IN GERMANY IS $60,000
And it’s not just problems at Volkswagen. The entire European auto industry is struggling. It’s only on pace to sell 13 million vehicles this year, which is at least 3 million units below where it needs to be to have a healthy industry. To deal with the low volume, automakers have been raising prices, and the numbers are enough to set your hair on fire. According to Jato Dynamics, the average new car in Germany costs nearly $60,000. That’s more than the average worker makes in a year, which is $54,000. In France, the average new car costs $51,000, in Spain it’s $56,500, in Italy it’s more than $58,000 and in the UK, it’s $62,000. Carmakers are also raising prices on ICE vehicles to make them less appealing so they can meet stricter CO2 standards. And with low-cost Chinese EVs starting to enter the market, Jato says this is threatening the viability of the European auto industry.

EU Average New Car Price, Nov. 2024
Germany	$59,395
France	$51,298
Spain	$56,532
Italy	$58,626
UK	$62,143
Source: Jato Dynamcis

RIVIAN CUTS SECRET DEAL WITH UAW
OK, back to the labor issue again, only this time in the United States, and with Rivian specifically. Bloomberg reports that Rivian cut a secret deal with the UAW that could make it easier to organize its workers at its assembly plant in Illinois. Rivian promised to remain neutral if and when the UAW tries to get the workers to join the union. It looks like the neutrality agreement only goes into effect after some specific metrics are met, but those specifics remain secret. One trigger point might be when Rivian posts a quarterly profit, but we really don’t know. We also find it odd that Rivian would agree to remain neutral. That’s pretty much what Volkswagen did and ended up with the union representing the workers at its plant in Chattanooga. Meanwhile, Mercedes actively opposed the UAW and its workers rejected the union. VW is currently negotiating with the UAW and has proposed a 14% raise over four years. We think that VW is a lot more likely to end up with the same UAW contract that the Detroit Three got.

 

CANOO AT DEATH’S DOOR
EV startup Canoo looks like it’s on its last legs. The company announced that it furloughed another 82 employees earlier this week, which puts its total to 132 workers in the last 90 days. And it idled its factory in Oklahoma because it needs more money to keep its operations going. Canoo says it’s in talks with “various capital sources” and it hopes to bring its employees back soon. But that’s the same thing Fisker said before it folded. Canoo also announced that it’s doing a reverse stock split, in order to regain compliance on the NASDAQ. The stock exchange requires companies to have a minimum stock price of $1 per share but Canoo’s stock closed at less than a cent yesterday. Hopefully for the company these moves work but it sure looks like it’s dead.

STELLANTIS REVIVES THE HEMI
The HEMI isn’t dead, not yet it isn’t. Dodge announced that V8-powered Durangos will continue to be sold in the 2025 calendar year. Specifically, the 5.7L HEMI, which is standard in Durango RT, and the 6.2L supercharged Hellcat engine will still be available. Dodge says it made the move “due in part to market demand and customer feedback.” But we think the decision to keep the HEMI came with the departure of CEO Carlos Tavares. A little over a week ago Stellantis insiders told Mike Wayland at CNBC that it was Tavares’ stubbornness to have a greener lineup and unwillingness to listen to U.S. executives that the engine was even dropped from some models in the first place. So, it’s soldiering on in the Durango. But we say, if you’re going to keep it there, why not get more volume and add it back to other models?

JAGUAR TURNS TO PODCAST MARKETING 
Jaguar announced a bold new brand direction recently. And while people had mixed feelings, the company’s managing director thinks there’s space for a disruptive brand and says the people that will buy these cars want to be treated more like insiders. So, Jag came up with an interesting way to connect with them. Podcasts. There will be podcasts with the head of design and engineers. So, customers will get access to information that they wouldn’t be able to get anywhere else. The director says “They’re joining a community.” All these ultra-luxury brands do things to make the buying experience as unique as possible, but podcasts are a new one for us.

CORVETTE ZR1 POSTS SMOKING HOT TIMES
The Corvette ZR1 is an impressive machine and now it has the numbers to back it up. The standard version will do 0-60 MPH in 2.5 seconds and run the quarter mile in 9.7 seconds. While the optional ZTK Performance Package shaves two-tenths of a second off that 0-60 time and another tenth off the quarter mile. Earlier this year it earned the title of ‘fastest car ever built by an American auto manufacturer’ by running 233 MPH at a test track in Germany. The ZR1 is powered by a twin-turbo 5.5L flat plane crank V8 that makes over 1,060 horsepower. 

DONGFENG LAUNCHES 10 MODELS IN MEXICO
Chinese automakers are taking the Mexican market by storm, and their momentum is only building. Dongfeng announced that it’s going to introduce 10 models into the Mexican market, including both battery electrics and plug-in hybrids. While Dongfeng makes cars in China for Nissan, Renault, Honda and Stellantis, the vehicles it’s launching in Mexico are made on its own platforms. And it’s notable to see that Dongfeng isn’t just sticking its toe in to test the waters. It’s launching with a full line-up. 

WAYMO AV’S FAR SAFER THAN HUMANS
Waymo says autonomous cars are a lot safer than cars with human drivers. It partnered with Swiss Re, one of the world’s largest reinsurers, to analyze the liability claims of its self-driving cars. And they found that Waymo’s system is safer than humans and even vehicles equipped with advanced driver assistance systems. Compared to human-driven vehicles, Waymo had 88% fewer property damage claims and 92% fewer bodily injury claims. While vehicles with ADAS tech were only slightly better than human drivers. Of the 25.3 million fully autonomous miles driven by Waymo vehicles, it was involved in just 9 property damage and 2 bodily injury claims. Compared to human drivers travelling the same number of miles, they would be expected to have 78 property damage and 26 bodily in injury claims. However, it’s still important to note that Waymo vehicles don’t operate in all areas and conditions that human drivers do.

Hey, this is the last show of the year. We’ll be off for a well-deserved break and to enjoy the holidays. We wish you a Merry Christmas or however you celebrate, and we’re going to hit the ground running on January 2, 2025. Thanks for watching and we’ll see you back then.