Honda And GM Scrap Plans For Small, Affordable EVs
Good morning! It’s Wednesday, October 25, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
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1st Gear: Don’t Hold Out For A Cheap GM Or Honda EV
Honda and General Motors announced plans to collaborate on electric vehicles last year, saying that the shared platform would allow them to create some pretty fun little cars. But anyone that was holding out for the fruits of their labor might be waiting a long time, as the project has now been canceled.
Rising costs and an “uncertain” landscape have been blamed for the cancellation of Honda and GM’s plans for an affordable small electric crossover, reports Bloomberg. The companies had been hoping to create an EV that could be sold in the U.S. for less than $30,000, with GM and Honda relying on their collaboration to cut costs. According to Bloomberg:
“After studying this for a year, we decided that this would be difficult as a business, so at the moment we are ending development of an affordable EV,” Mibe said in an interview with Bloomberg Television. “GM and Honda will search for a solution separately. This project itself has been canceled.”
Mibe didn’t specifically mention the UAW strike, but cited cost and cruising distance challenges as reasons for halting the plan.
The development of a new EV platform was set to be GM and Honda’s latest adventure together. In the past, the two companies have worked on hydrogen fuel cell technology and they are also collaborating on everything from vehicle batteries and gas-powered cars to self-driving technology.
Now, where should you look for the fabled affordable EV? Probably still to GM to be honest. Although the company might have killed its budget friendly Bolt once, it confirmed that a new one is in the works for release one day.
2nd Gear: Porsche Says Think Of The Rich People
We’re at the end of the third quarter of 2023, which means automakers around the world are sharing their financial results and complaining that they made a few less million dollars than they expected. Porsche is no different, and has warned that the current wave of economic uncertainty has hit shoppers’ appetite for luxury.
According to its third quarter results, Porsche is running “in line” with expectation and remains on track to hit its targets for the year, according to a report from Reuters. However, the automaker’s financial bosses have warned that this doesn’t mean the luxury industry is getting off scot-free.
Instead, Porsche warned that rising inflation and uncertainty surrounding the global economy all mean that rich buyers are less likely to spend big on luxury items like German supercars. As Reuters reports:
“We are suffering in the entire economy,” said [Chief Financial Officer Lutz] Meschke. “It is also hitting the luxury industry – you can follow it when it comes to share price development of all luxury retailers worldwide.”
However, he added that the third quarter was often slightly weaker for German carmakers given the long summer break.
Despite the slowdown in the third quarter of 2023, Porsche is predicting a bounceback in the coming months. The German automaker has a few tricks up its sleeves to try and pry the cash out of its rich buyers hands, including a new Panamera, updated Taycan and the all-electric Macan over the coming year.
3rd Gear: UAW Cuts Its Demands
The United Auto Workers union is into its second month of strike action against America’s big three automakers. After fighting for weeks over working conditions, pensions and even how many days employees should be working, the union appears to have softened on one key demand.
After going into negotiations demanding raises of 40 percent across the board, the union is now calling for 25 percent raises for all its members, according to Automotive News. The move follows updates last week that progress was being made between the UAW and GM, Ford and Stellantis. Automotive News reports:
The new figure, relayed to some bargaining teams in recent days, would result in top hourly wages of about $41.20 in 2027. Ford Motor Co., General Motors and Stellantis each have proposed 23 percent raises, which would put top earners at about $40.39.
The difference between the union’s demand and what the companies have offered is roughly $3,100 per worker over the entirety of the contract, although one source cautioned that the target could shift at any or all of the companies as talks continue.
Despite rumors that the union is softening its demands, it is still holding strong on the picket line. In fact, 5,000 more UAW workers walked off the job at the assembly line that builds the Chevy Tahoe and Suburban, GMC Yukon and Cadillac Escalade. This latest round of walkouts brings the total number of striking UAW members to more than 45,000.
4th Gear: GM Workers In Brazil Strike
It isn’t just GM workers in North America that are walking off the job this week, as GM’s Brazilian plants are also facing strike action. In South America, workers at a GM metalwork plant have walked off the job in protest against a round of layoffs at three factories in Sao Paulo state.
Workers at GM’s Sao Jose dos Campos, Sao Caetano do Sul and Mogi das Cruzes plants have all agreed to walk off the job after the American automaker announced that 1,200 workers would have their “contracts temporarily suspended,” CNN reports. The sites affected build engines and gearboxes for GM vehicles such as the Trailblazer SUV and S-10 truck. As CNN explains:
The Sindmetal union representing metalworkers at the Sao Jose dos Campos plant said workers had voted to enter a strike on Monday, adding that employees of the Sao Caetano do Sul and Mogi das Cruzes plants had also agreed to similar measures.
“The plant will only resume production after the job cuts are canceled and job stability is guaranteed for everyone,” the union said in a statement, arguing that the company had agreed to provide stability for employees until May 2024.
GM announced it would be cutting its workforce in Brazil after declining sales and exports. The company, which confirmed the layoffs to CNN, said the move was “necessary” to give it the “agility of its operations” that it needs.
