October 31, 2023 at 1:57 pm PDTFile -A Ford Bronco is displayed at a Gus Machado Ford dealership on Jan. 23, 2023, in Hialeah, Fla. New union agreements with Detroit automakers reached during the past week will cost Ford, Stellantis and General Motors over $1 billion per year by the time they take effect in four years.
Customers might assume that nonunion automakers, like Toyota, Tesla or Hyundai-Kia, will now be able to price their vehicles well below what the Detroit automakers can. But history shows that the nonunion companies will eventually feel compelled to raise their factory wages, too, in their effort to ward off the UAW’s efforts to unionize their factories. As their own labor costs rise, they, too, would likely impose price increases.
If approved by 146,000 union members, the settlements that ended the strikes mean that automakers will raise top assembly plant worker pay by more than 30% to around $42 an hour by the time new contracts end in April of 2028. Less-senior workers and temporary hires will receive much bigger increases. headtopics.com
Natalie Knight, the chief financial officer of Stellantis, the parent company of Chrysler, Jeep and Ram, said her company has already pulled out of two auto shows in the United States to save on expenses.
This year, computer chips started flowing before the strike, and companies were making more vehicles. Supplies increased, and by September, prices dropped to just under $48,000, said Smoke, the Cox economist. headtopics.com
At present, he said, U.S. auto dealers have more than 2.4 million vehicles on their lots, the highest supply since the spring of 2021. That means that competition for buyers is intensifying as pent-up demand from the pandemic wanes, making it difficult for any automaker to raise prices.