Dockworkers Reach Deal To End Massive East Coast Strike

Good morning! It’s Friday, October 4, 2024, 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: Dockworkers Get Big Raise, Automation Guarantees In New Contract

Dock workers and port operators on the U.S. East and Gulf Coasts have reached a tentative deal that will immediately end the huge three-day strike that shut down shipping on the eastern portion of the country. The tentative agreement is for a 62 percent wage hike over six years. It’ll raise average wages to about $63 per hour from $39 per hour over the life of the contract.

The deal falls right in the middle of what the two sides were looking for. The International Longshoremen’s Association union was seeking a 77 percent raise, while its employer group, the United States Maritime Alliance, had previously offered a nearly 50 percent wage hike. From Reuters:

The deal ends the biggest work stoppage of its kind in nearly half a century, which blocked unloading of container ships from Maine to Texas and threatened shortages of everything from bananas to auto parts, triggering a backlog of anchored ships outside major ports.

The union and the port operators said in a statement that they would extend their master contract until Jan. 15, 2025 to return to the bargaining table to negotiate all outstanding issues.

“Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume,” the statement said.

Among key issues that remain unresolved is automation that workers say will lead to job losses.

Union boss Harold Daggett said previously that employers such as container ship operator Maersk and its APM Terminals North America had not agreed to demands to stop port automation projects that threaten jobs.

The Biden Administration has been instrumental in getting this deal done for workers, as Reuters explains.

U.S. President Joe Biden’s administration had sided with the union, putting pressure on the port employers to raise their offer to secure a deal and citing the shipping industry’s bumper profits since the COVID-19 pandemic.

The tentative deal “represents critical progress towards a strong contract,” Biden said on Thursday. “Collective bargaining works,” he added.

His administration has repeatedly resisted calls from business trade groups and Republican lawmakers to use federal powers to halt the strike – a move that would undermine Democratic support among unions ahead of the Nov. 5 presidential election.

The White House had been heavily involved in talks to get a deal, sources said.

After days of talks, White House Chief of Staff Jeff Zients convened a 5:30 a.m. virtual meeting on Thursday with the CEOs of ocean carriers and impressed upon them the need to reopen the ports to speed hurricane recovery efforts, according to a source briefed on the events.

[…]

Top White House economic adviser Lael Brainard told the carriers at the meeting they needed a new offer to end the strike, and asked them to put a new offer on the table. By midday the shippers had agreed to make a new higher offer.

Acting Secretary of Labor Julie Su told the carriers they could get the union to the table and leaders would agree to extend the contract, if the new offer was higher. She was in New Jersey to meet with union leaders to secure their agreement, the sources said.

Now, the ILA’s 45,000ish port workers can get back to their jobs following its first major work stoppage since 1977.

Around 45 container ships that have been unable to unload their cargo have been anchored outside East Coast and Gulf Coast ports by October 2. To put that number in perspective, just three were anchored and waiting before the strike began on Sunday.

Here’s how this has all impacted the U.S. economy:

JP Morgan analysts have said the strike would cost the U.S. economy around $5 billion per day.

The strike affected 36 ports – including New York, Baltimore and Houston – that handle a range of containerized goods.

“The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy, National Retail Federation said in a statement. “The sooner they reach a (final) deal, the better for all American families.”

[…]

Economists have said the port closures would not initially raise consumer prices because companies had accelerated shipments in recent months of key goods. However, a prolonged stoppage would have eventually filtered through, with food prices likely to react first, according to Morgan Stanley economists.

Good for the dock workers, man. Sure, they get paid a good chunk of money, but their jobs are crucial and they make a lot of people a lot more money than they’ll ever see. Solidarity forever, baby.

2nd Gear: Autonomous Ioniq 5s Are Coming Thanks To Waymo

Hyundai and Waymo have inked a multi-year deal that pairs the self-driving tech company’s sixth-generation autonomous driving technology with the Ioniq 5 electric crossover. The plan is to expand Waymo’s fleet with the little EVs that’ll be assembled at Hyundai’s new Metaplant America factory in Georgia. They’ll then be upfitted with all of Waymo’s autonomous gubbins at a different facility.

In an October 4 statement, the two companies said these robotaxis would be produced at “significant volume,” though there was no mention of how significant that volume would really be. We can apparently expect initial testing of these autonomous Ioniq 5s to begin late next year, and their addition to Waymo’s commercial fleet is expected in the years beyond that. From Automotive News:

Waymo’s operation has been growing. The Alphabet subsidiary currently has about 650 cars in driverless, commercial service in greater Phoenix and the Bay Area.

Waymo is further ramping up its efforts in Los Angeles, Atlanta and Austin, Texas.

“Hyundai’s focus on sustainability and strong electric vehicle roadmap makes them a great partner for us as we bring our fully autonomous service to more riders in more places,” Waymo co-CEO Tekedra Mawakana said in a statement.

The deal had been expected since September.

That’s when the Biden administration finalized a 100-percent tariff on Chinese EV imports, a development that throws a curveball into Waymo’s plans to import robotaxis co-designed and developed with Chinese manufacturer Geely and its Zeekr brand.

The Geely partnership continues, a Waymo spokesperson said. And the company’s existing Jaguar Land Rover I-PACE EVs remain part of the company’s ongoing plans, the spokesperson said.

The partnership is being looked at as big a deal for Hyundai as it is for Waymo.

Motional, the automaker’s self-driving subsidiary, delayed plans to commercialize its own autonomous service earlier this year. In September, long-time Motional CEO Karl Iagnemma stepped aside and into a strategic advisor role.

That move came at the same time Hyundai prioritized plans to commercialize an “autonomous driving vehicle foundry business” in which the company will supply vehicle platforms to software firms.

Waymo is not the only autonomous-driving company that’ll employ the Ioniq 5. Avride uses the EV for testing in Austin, Texas and is expanding to Seoul and other global markets.

These won’t be standard Ioniq 5s either. Aside from the addition of autonomous driving tech, there are some other modifications, like power-opening doors, these cars will get for Waymo’s fleet.

3rd Gear: Stellantis-Reault Merger Called ‘Pure Speculation’

A rumored merger between Renault and Stellantis is “pure speculation” according to the latter’s CEO Carlos Tavares. At the same time, Renault’s CEO Luca de Meo declined to comment on the speculation, which he described as “rumors.”

This news comes as Stellantis goes through some serious struggles. Earlier this week, Stellantis cut its 2024 profit forecast and warned it will burn through more cash than it expected as it tries to right the ship in the U.S. Shares of the automaker have dropped more than 55 percent since March, wiping away 47 billion euros ($52 billion) of the comapny’s valuation. From Reuters:

Italian newspaper Il Sole 24 Ore reported this week that talk of a tie-up has become more persistent, with economies of scale seen as a possible solution to managing the intense competition faced by traditional automakers.

[…]

Speculation about a Stellantis and Renault tie-up also arose early this year, with an Italian media report that the French government – which is Renault’s largest shareholder and also has a stake in Stellantis – was studying plans for a merger between the two groups.

Tavares and De Meo are both attending the Paris Motor Show opening on Oct. 14. Asked what he would discuss with Tavares at the event, De Meo replied: “I will greet him, as always”.

I cannot even imagine how big an unwieldy a Stellantis-Renault merger would be. At least the cars would be… strange.

4th Gear: GM Pauses Some Production Due To Helene

General Motors has been forced to pause production at some of its factories because of Hurricane Helene. The automaker canceled all shifts on Thursday and Friday and Flint Assembly and Arlington Assembly due to impacts on suppliers as a result of the hurricane. The plants build heavy-duty pickup trucks and large SUVs. From the Detroit Free Press:

“We are working with these suppliers to resume operations as quickly and safely as possible for their employees and communities as we seek to minimize impacts on our plants,”[GM spokesperson Tara] Kuhnen said.

GM builds its full-size heavy duty Chevrolet Silverado and GMC Sierra pickups at Flint Assembly. At Arlington, GM makes the Chevrolet Suburban and Tahoe, GMC Yukon and Yukon XL and Cadillac Escalade and Escalade-V full size SUVs.

Obviously, while this is a bummer for GM, it’s really not that big a deal in the grand scheme of things when it comes to Helene. As of October 3, the death toll from the hurricane surpassed 200 people and nearly 1 million homes and businesses don’t have power in Florida, Georgia, North Carolina, South Carolina and Virginia. Tens of thousands of folks, mostly in western North Carolina, still don’t have running water.

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