Is the auto industry headed for a crash?



Plant closures in Europe. Layoffs in America. Plunging sales everywhere.

The auto industry is in trouble — and we could all end up suffering the consequences.

EV woes have hit Ford as well. Later this month, the carmaker will suspend operations at its F-150 Lightning EV plant for the rest of year.

Let's start with Volkswagen. The company stands proud as the biggest carmaker in Europe, and it has never closed a factory in its home country of Germany.

Until now.

Punch buggy blues

At the end of October, the company asked workers to take a 10% pay cut as part of an ongoing campaign to cut costs across the VW Group. Industry insiders fear that domestic plant closures — the first in the company's 87-year history — could be next, with up to three German factories shutting down, costing more than 100,000 jobs.

“Management is absolutely serious about all this. This is not saber-rattling in the collective bargaining round,” warned Volkswagen works council head Daniela Cavallo in a speech to employees.

These cuts would reduce the number of domestic plants to seven and cut the workforce by a third.

The plants that do stay open would also endure cost-cutting measures, according to a separate report, with downsizing and wage freezes on the table.

VW aims to save about €10 billion (roughly $10.8 billion USD) by 2026.

Thomas Schaefer, the head of the Volkswagen brand, has previously noted that German factories are operating at between 25% and 50% above targeted costs. This is largely due to Europe’s high energy costs, which German carmakers say are four times higher than in China and the United States.

Compounding this problem are increased competition from Chinese brands and a lack of demand for electric cars.

Volkswagen hasn’t commented on the report, and it hasn’t announced plant closures or layoffs yet.

Previously, Volkswagen had considered buying Audi's struggling EV plant in Brussels. Those plans changed, and with no other suitable buyers on the horizon, the plant may close its doors for good.

The outlook isn't much sunnier stateside, either.

GM feels the heat

General Motors is laying off some 1,000 software workers globally, 600 of whom are employed at its tech center in Warren, Michigan.

In a memo to workers obtained by Automotive News, GM said the cuts were to enable it to “move faster, pivot when needed, and prioritize investing in what will have the greatest impact.”

This is certainly a pivot from the last several years, in which GM has been expanding its software team to help with its electrification and autonomous efforts. The company had predicted that those services could generate $25 billion in revenue by 2030.

While General Motors has claimed that these cuts target "software and service" employees, that's not exactly true. The layoffs come from GM's Ultium division, which is the sub-EV company GM created to differentiate it from its gasoline engine department.

I can confirm that Ultium has let go a number of thermal engineers without warning. Thermal engineers, as you might guess, are crucial to thermal management: keeping EV batteries, power electronic systems, and motors from overheating.

Is this a sign that GM is no longer all-in on electric and is drastically reducing R&D on future EVs?

Sure looks like it.

Ford's loser Lightning

EV woes have hit Ford as well. Later this month, the carmaker will suspend operations at its F-150 Lightning EV plant for the rest of year.

The highly touted electric pickup loses the company $40,000 on each vehicle sold. Hardly sustainable, especially given that Ford's Q3 net income is down 26%, and cost issues have caused it to drop its full-year adjusted earnings projection to around $10 billion.

Mercedes: Bust in class

The luxury car market isn't what it used to be, either.

Mercedes Benz has cut production on its S-Class line in response to declining sales: down 13% in China, 19% in the U.S., and 27% in Europe. The high-end vehicles have been rolling off the company's cutting-edge Factory 56 assembly line in Germany since 2020 — always in at least two shifts.

Now, for the first time since Mercedes opened what it touts as the most modern car factory in the world, one shift will suffice.

The plant also builds the electric EQS as well as Maybach and AMG models. Mercedes will refresh the S-Class next year, so demand could pick back up with a new model.

Ram tough

Stellantis CEO Carlos Tavares has been heaping scorn on his previous U.S. management team and no wonder: Third-quarter sales in North America were a disaster, falling 20%, and down 17% for the year.

That's bad news for iconic American brands Jeep, RAM, Dodge, and Chrysler — and it has investors heading for the exits.

But times are tough all over for the car conglomerate. Sales in Europe fell 17%, with even Maserati relegated to the slow lane with a stunning 60% drop.

Business isn't much better in China, India, and Asia Pacific, where sales fell 30%.

Border run

And in a move that is sure to infuriate the UAW, Tavares plans to move production of Ram's full-size 1500 pickup truck from the U.S. to its Saltillo, Mexico, plant, which already produces Ram heavy-duty pickups and vans.

While Mexico offers lower labor costs, no doubt the move is also to prevent the UAW from choking off production during any future strike. We think that’s the same reason Ford moved part of its heavy-duty truck production to Canada. It’s a game of chess, and both Ford and Stellantis are working to escape checkmate.

For more on the ongoing car industry crisis, check out my video below:

General Motors to slow electric vehicle production to cut costs after losing nearly $1 billion from auto workers strike



Electric vehicle production is the first section of General Motors to take a hit after the automaker announced nearly $1 billion in losses stemming from a strike by the United Auto Workers union.

On a call with reporters, GM chief financial officer Paul Jacobson revealed that the company has been losing approximately $200 million per week during the strike, totaling around $800 million after the first month of striking, according to the Epoch Times.

A recent announcement that an additional 5,000 union workers would be stepping to the sidelines in Arlington, Texas — the site of GM's largest plant — brings the total number of picketers to 45,000.

This came after GM gave its earning announcement for the third quarter of the fiscal year, noting that net income fell 3.7%. GM still took in $3.06 billion net income, however, with overall revenues rising 5.4% to $44.1 billion despite the strike.

Profit was down 16.9% year-over-year to $3.56 billion.

Although profits have remained massive, the big hit to earnings still caused CFO Jacobson to announce that the auto giant will put the brakes on electric vehicle production.

GM is "moderating the acceleration of EV production to protect our pricing, adjust to slower near-term growth in demand and implement engineering changes that will bolster profits," Jacobson said. But he noted that electric vehicle production remains "as strong as ever."

On the same media call, GM CEO Mary Barra also said that the company planned on reducing electric vehicle product spending while simultaneously slowing the launch of several models in order to cut costs.

Demands from GM's union employees include a wage increase of more than 35%. The company has offered a 23% increase over a 4.5-year contract.

The autoworkers' strike has garnered visits from several high-profile politicians including the president. Biden allegedly offered his support for striking autoworkers at the picket line for just 12 minutes, and he reportedly spoke to UAW members for less than 90 seconds.

Senator Josh Hawley (R-Mo.) also made an appearance, as did President Trump. Trump decided to visit a non-union parts supplier in Michigan where current and former union workers had gathered.

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UAW strike threatens to tip America into recession — and Biden's response is a photo-op?!



The United Auto Workers' strike has entered its third week, and President Joe Biden is loving it.

“The other day, Joe Biden shuffled into a UAW strike line for publicity to show he stands with the unions,” Mark Levin says disapprovingly, adding that Biden “still hasn’t found time to go to Palestine, Ohio, and spends 40% of his time in Delaware.”

Not only does Levin see Biden’s actions as meaningless, but the strike itself, if successful, is harmful.

“Two things will happen if that happens. Number one, you’ll never be able to afford a new car again in your life. And that will also drag up the price of used cars because people will be moving into that market because they won’t be able to afford new cars,” Levin says.

“Number two, we as the taxpayers are gonna have to subsidize this crap, because when these companies are going to go broke, they’re going to come to us for short-term, low-interest loans,” he continues.

Levin is also not a fan of the union boss of the UAW, whom he calls a “Democrat thug.”

“He wants nothing to do with Trump, who he trashes, and he embraces Biden,” Levin says.

Meanwhile, Biden’s the one touting electric vehicles and has driven inflation through the roof.

“This is a thug, this union boss, which is using the power of his union monopoly, because the antitrust laws don’t apply to unions, to attack three big, major American corporations,” Levin says.

“I am not going to support this. Not now, not ever.”


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Obama 'car czar' slams Biden for 'outrageous' visit to UAW picket line — then striking workers bat cleanup



Not everyone is thrilled with President Joe Biden's visit to the United Auto Workers picket line on Tuesday.

Biden visited the picket line in Belleville, Michigan, where he allegedly offered his support for striking auto workers. Biden was on the ground at the picket line for just 12 minutes, and he spoke to UAW members for less than 90 seconds.

Steven Rattner, whom then-President Barack Obama tapped as "car czar" in February 2009, strongly denounced the visit, which the media celebrated as "historic."

"For him to be going on a picket line is outrageous," Rattner told NBC News.

"There's no precedent for it. The tradition of the president is to stay neutral in these things. I get the politics. The progressives all said, 'We don't want a mediator; we want an advocate.' And he bowed to the progressives, and now he's going out there to put his thumb on the scale. And it's wrong," he declared.

Meanwhile, well-paid UAW brass love Biden (because he is a Democrat). But some rank-and-file workers who spoke with Fox News shared concerns about the Biden administration's far-left climate agenda and electric vehicles push.

"We have been the backbone of these companies for so long. Trying to push us out to these electric vehicles — it won't last," one UAW member told Fox News. "We're hard-working. We have families. We need this."

— (@)

That pro-climate electric-vehicle initiative is problematic for union workers because auto executives are outsourcing parts of the manufacturing process, both overseas where labor is cheaper and to non-unionized regions of the country.

Other workers who spoke with local news stations in Michigan expressed concern that Biden's visit will over-politicize the negotiating process and distract from worker grievances.

"This is between the UAW and the corporations, and just securing a good contract. Everything [Biden's] had his hands in — it's all failed," one worker told WLNS-TV. "Election year is just around the corner. Maybe [his visit] is a way to gain some more votes."

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Sen. Josh Hawley shows up at UAW picket line, offers blunt solution to worker grievances: 'Invest in America'



Republican Sen. Josh Hawley visited the United Auto Worker picket line in Missouri on Monday, offering support for the workers and a solution to the problems the strike is highlighting.

One day after Reps. Cori Bush (D-Mo.) and Alexandria Ocasio-Cortez (D-N.Y.) visited the General Motors union workers in Wentzville, Hawley showed his support for the striking workers and suggested the solution to the problem is to stop offshoring the manufacturing process to China.

"Privilege to visit the picket line in Wentzville today — these workers deserve better pay, better benefits, and a GUARANTEE their jobs will stay in America," Hawley wrote on X.

— (@)

"These companies are making billions in profits — and spending billions on idiotic 'climate change' initiatives that make China rich and kill American jobs," he explained. "Spend that money on American workers."

Hawley met with workers who shared stories behind their motivation to go on strike. The common theme: too many hours for not enough pay. The solution, according to Hawley, is domestic investment.

"America made these huge corporations what they are. Now they owe some loyalty — and basic fairness — to American workers. Stop offshoring. Stop investing in China. Stop making American workers compete with slave labor. Invest in America," he said.

— (@)

Hawley later told reporters that car manufacturers have been "cheerleaders" for the Biden administration's "pro-China policies."

"If these [car companies] want to go along with all of this climate stuff and they want to send more jobs to China, I'm certainly not going to defend them," Hawley said. "My message to them is: Quit outsourcing, quit offshoring, stop all of their woke policies, all of their electric garbage, all of their climate garbage. Invest that money in American workers."

UAW workers are demanding, among other things, significant pay increases and a 32-hour work week with 40 hours of pay. Executives of the major car companies argue the demands would bankrupt them.

President Joe Biden visited the picket lines in Michigan on Tuesday.

The White House rushed to send Biden north after former President Donald Trump announced plans to visit the striking workers instead of attending the second Republican primary debate. Trump's plans sent Democrats into a tizzy, worrying them that his campaign is politically outmaneuvering Biden's campaign.

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AOC rolls out incredible excuse when confronted over her electric-vehicle hypocrisy: 'Before the vaccine had come out'



Rep. Alexandria Ocasio-Cortez (D-N.Y.) was confronted on Sunday over her electric-vehicle hypocrisy.

In an interview on CBS News' "Face the Nation," moderator Margaret Brennan asked Ocasio-Cortez how owning a Tesla squares with her promise to purchase an electric vehicle made by union workers.

"You were quoted back in July saying you look forward to buying a union-made electric vehicle. But you currently have a non-union-made Tesla. UAW already makes some electric vehicles," Brennan noted. "So, is it a problem with the quality? Is it a problem with the style? Is the market just not there?"

Incredibly, Ocasio-Cortez excused the contradiction by citing the COVID-19 pandemic and vaccine.

"Our car was purchased during the pandemic, when travel — before a vaccine had come out. So, travel between New York and Washington, the safest way that we had determined was an EV," she explained. "But that was prior to some of the new models coming out on the market that had the range available."

Rep. Alexandria Ocasio-Cortez on “Face the Nation” | full interview youtu.be

According to Ocasio-Cortez, she and her fiancé are "looking into" trading their Tesla, but did not say when exactly that would happen.

"Hopefully, we will soon," she said.

Tesla is the only major U.S. auto manufacturer whose workers are not unionized. Brennan's question came as Ocasio-Cortez reiterated her support for union workers and the United Auto Workers strike.

At the time of Ocasio-Cortez's vehicle purchase, the only union-made EV option was the Chevrolet Bolt. There are now a handful of additional options on the market. Still, it doesn't explain how Ocasio-Cortez provided on Sunday basically the same answer that she gave last year.

Ocasio-Cortez told Bloomberg News last May that she wanted to trade her Tesla.

"At the time [of the purchase] it was the only EV that could get me from New York to Washington on like one, or one-and-a-half charges," she told the news outlet. "I would love to switch."

And yet, more than 16 months later, she hasn't.

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Democrats panic over Trump campaign's 'kinda genius' strategy amid auto worker strike: 'Trump scooped us'



Some Democrats are panicking that Donald Trump is "outmaneuvering" President Joe Biden, according to a new report.

On Monday, the New York Times reported that Trump will skip the second Republican primary debate on Sept. 27 to visit Detroit, where he will meet with auto union workers. The decision was made just days after the United Auto Workers went on strike.

Trump's decision to skip the debate and engage with union workers, according to the Times, shows that his campaign is looking past the Republican primary and focusing its efforts on campaigning against Biden. And unfortunately for the president, that's also exactly how some Democrats understand it, Politico reported.

"Trump scooped us. Now if we announce we're going, it looks like we're just going because of Trump," a Democratic strategist told Politico. "We waited too long. That's the challenge."

The decision to head to Detroit before Biden, a union adviser told Politico, shows that Trump "actually has people who know what they're doing."

"He boxed Biden in. It was kinda genius," the union adviser said.

Rep. Ro Khanna (D-Calif.), who is helping Biden with the autoworker strike, agreed and suggested Biden lacks a successful campaign message that resonates with working-class Americans, like those on the picket line.

"We should not underestimate Donald Trump. He's a survivor and this is going to be a very hard-fought campaign," Khanna said.

"We need a message to working-class Americans," he added. "Right now, they're still hurting in terms of gas prices, food prices, housing costs, utilities costs, and they don't feel like their wages are going up fast enough, and they feel like the very wealthy are getting too much of the rewards. That's what I heard on the picket lines."

The Biden campaign and White House aides, of course, do not believe Trump is "outmaneuvering" Biden. After all, Democrats almost always win union endorsements.

But as Politico noted, Trump won "many rank-and-file union members in 2016," and the White House — by canceling plans to send two top aides to Detroit — is certainly at odds with the unions. That tension is something Trump's campaign will try to exploit beginning this week to build on previous momentum with rank-and-file union workers.

Ahead of his visit, Trump is airing radio ads supporting the workers.

"All they've ever wanted is to compete fairly worldwide and get their fair share of the American dream," the ad says, according to the Times. "Donald Trump calls them great Americans and has always had their backs."

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