VW Cuts Workers As Brand Deemed "No Longer Competitive"
Happy Monday! It’s November 27, 2023, and this is The Morning Shift — your daily roundup of the top automotive headlines from around the world, all in one place. Here are the important stories you need to know.
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1st Gear: Things Aren’t Looking Too Hot At Volkswagen
Volkswagen’s higher-ups have decided the people’s brand isn’t extracting enough money from the people, so they’ve decided to cut costs to compensate. By firing more people. From Reuters:
Volkswagen’s (VOWG_p.DE) 10 billion euro ($10.9 billion) savings programme will include staff reductions, managers told staff on Monday as brand chief Thomas Schaefer warned that high costs and low productivity were making its cars uncompetitive.
The German carmaker is in the midst of negotiations with its works council over a cost-cutting scheme at its VW brand, the first step in a group-wide drive to boost efficiency in the transition to electric cars.
“With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” Schaefer told a staff meeting at the carmaker’s headquarters in Wolfsburg, according to a post on the company’s intranet site and seen by Reuters.
The company had previously said it planned to take advantage of the “demographic curve” to reduce its workforce, having pledged that it would not carry out dismissals until 2029.
It seems the downsizing is being handled humanely, at least, with “partial or early retirement” covering the sum total of the layoffs. Can you imagine having that kind of safety net?
2nd Gear: Your Next EV’s Battery Might Be Cheaper
The world is going electric, but so far — in the U.S., at least — it hasn’t gone there cheaply. Now, it seems, we may finally be on the path towards accessibility in EVs. From Bloomberg:
As the auto industry grapples with how to make affordable EVs, the task may get easier by one key metric. Battery prices are resuming a long-term trend of decline, following an unprecedented increase last year.
According to BloombergNEF’s annual lithium-ion battery price survey, average pack prices fell to $139 per kilowatt hour this year, a 14% drop from $161/kWh in 2022.
…
The main contributor to falling battery prices historically has been technological innovation. This hasn’t been the case in 2023. This year, the drop in battery prices is primarily attributed to lower raw material costs.
Cheap EVs haven’t succeeded in the U.S. the way they have abroad, but maybe that’s just because they haven’t been cheap enough. Knock ten grand off the Leaf and people will be lining up. I’m sure of it.
3rd Gear: Subaru Raises Wages After UAW Strike
What’s that they say about rising tides? The United Auto Workers took to the picket line, and now it seems every auto worker is winning — union or not. From the Detroit News:
Another foreign automaker is upping wages after the United Auto Workers won record contracts from the Detroit Three automakers.
Subaru Corp. on Wednesday told employees it will increase wages in January. The increases will happen “at each step of our wage scales — including the largest production increase in company history,” Subaru spokesperson Craig Koven said in a statement. “With this change, our top production wage will have increased seven times and more than 24% since 2019.”
The increase was part of Subaru’s “semi-annual wage review conducted this time each year,” Koven said. Current industry conditions were taken into consideration for the wage increases. On the benefits front, Subaru is the only known non-U.S. auto manufacturer to offer premium-free healthcare, according to Koven’s statement.
The UAW has brought wage increases to GM, Ford, Stellantis, Honda, Toyota, and now Subaru. Who’s next, Tesla? [Eyes emoji]
4th Gear: We’re Never Getting Out Of The Oil Business, Are We?
While the rest of the world has been pushing toward electrification, cleaner energy that could help mitigate the tides of global climate change, Saudi Arabia has been making a point of not doing that. Now, Italy is joining in. From Reuters:
ROME, Nov 27 (Reuters) – Italy is discussing joint investments with Saudi Arabia in the automotive, mining, oil & gas, defence, hydrogen and space sectors, Industry Minister Adolfo Urso said on Monday.
Since taking office in October 2022, Italian Prime Minister Giorgia Meloni has sought to forge closer ties with the Gulf, shrugging off the concerns of previous coalitions over human rights in the region.
Urso is visiting the Arabian peninsula until Tuesday, with meetings in Qatar, Saudi Arabia and the United Arab Emirates.
“Italy and Saudi Arabia are committed to developing a regulatory and industrial framework that favours and accelerates strategic autonomy in the critical raw materials sector,” Urso said in a statement after a meeting in Riyadh with Khalid Al Saalem, president of the Royal Commission for Jubail & Yanbu, which helps oversee development of Saudi Arabia’s energy industry.
Things are so fine. You don’t even know how fine they are. Sure, maybe humanity will never escape the death grip of fossil fuels, and maybe that grip will slowly suffocate us all, but think about it this way: There are like seven dudes who are making beaucoup bucks off it.
Reverse: The Bruce Is Loose
On The Radio: Covet – ‘Firebird’
covet – firebird (official video)
