US auto workers' strike: What are the implications?

NEW YORK — Unionized auto workers in the United States have launched a strike at three factories in a historic walkout after failing to reach a deal with Detroit's "Big Three" automakers.

With the automotive sector being a major part of the world's biggest economy, here is a summary of the implications.

Millions of jobs

The automotive ecosystem drives some $1 trillion into the US economy each year, nearly five percent of gross domestic product, according to the Alliance for Automotive Innovation.

The group, which represents the auto industry, said in a 2022 report that the sector supports 9.6 million jobs.

In its industry report, the alliance noted that "more than $220 billion in federal and state revenue is generated annually by the manufacture, sale and maintenance of autos."

And the sector is benefiting from the rapid growth of electric carmaker Tesla, which delivered 1.3 million EVs in 2022.

'The Big Three'

General Motors, Ford and Stellantis are dubbed the "Big Three" in US carmakers and have production facilities in the Detroit, Michigan, area.

They operate 60% of the country's assembly plants, according to the American Automotive Policy Council, which represents the three companies.

The United Auto Workers strike involves only 12,700 of 150,000 members represented by the union, but the action could broaden in the coming days.

A major risk in the event of a prolonged strike is "degradation of the supply chain and the financial health of the parts and equipment suppliers," said CFRA analyst Garrett Nelson.

Michael Pearce of Oxford Economics added in a note that "a total walkout would reduce motor vehicle output by over 30%."

Scale of operations

GM employs over 92,000 people in the United States according to its website, and delivered 2.3 million vehicles in the country last year under the Chevrolet, Buick, GMC and Cadillac brands.

In 2022, its revenue rose by 23% to $157 billion, while its net income came in at $9.9 billion.

Ford — founded 120 years ago — hires some 177,000 people including about 86,000 in the United States.

It manufactures the Ford brand including the F-150 pickup truck, which the company calls "America's truck" because it is assembled entirely in the United States and has been the country's most popular vehicle for more than four decades.

Meanwhile US-European auto giant Stellantis, whose brands include Jeep, Chrysler and Peugeot, has 264,000 staff globally.

In 2022, it posted profits of 16.8 billion euros.

Foreign automakers

Apart from US carmakers, international automakers produced 4.4 million vehicles in the United States last year, according to Autos Drive America.

Their production volume has ballooned by over 85% in more than two decades.

And this has brought their share of US production from one percent in 1979 to 45% in 2022.

Among global brands that have plants in America are BMW, Kia, Honda, Lexus, Volkswagen and Hyundai.

In 2022, international automakers directly employed 156,000 US employees.

Agence France-Presse

Jaguar Land Rover to cut 2,000 jobs globally: company

LONDRES, UNITED KINGDOM - Jaguar Land Rover on Wednesday said that it planned to lay off around 2,000 staff in the next financial year.

The largest car manufacturer in Britain, owned by India's Tata Motors, said in a statement: "We anticipate a net reduction of around 2,000 people from our global salaried workforce in the next financial year."

Jaguar Land Rover has almost 40,000 employees worldwide, according to its 2019-20 annual report. 

It had announced Monday that the Jaguar brand would produce only electric vehicles by 2025 and that Land Rover would have its first fully-electric vehicle in 2024.

The car maker said it would invest £2.5 billion ($3.5 billion, 2.9 billion euros) annually under its 'Reimagine' plan, which aims for its supply chain and operations to become carbon neutral by 2039. 

It had said this plan would also involve substantially reducing its non-manufacturing operations.

The radical overhaul comes under new chief executive Thierry Bollore, who joined in September.

The statement released Wednesday said that a "full review of the Jaguar Land Rover organization is already underway".

It said the organization had already started to brief salaried staff on the job cuts, which do not affect manufacturing staff paid by the hour.

Jaguar Land Rover has plants in the West Midlands area of England as well as facilities in Slovakia, India, China and Brazil.

Its owner Tata Motors is part of the Indian conglomerate Tata Group.

Agence France-Presse

Nissan grants Renault execs boardroom seats, ending dispute

TOKYO/PARIS - Japan's Nissan said on Friday it would grant alliance member Renault's representatives seats on key committees of its board, ending a dispute between the 2 automakers.

Nissan said it would give Renault Chief Executive Thierry Bollore a seat on its board's audit committee and Renault Chairman Jean-Dominique Senard a seat on its nomination committee. Senard will also become vice-chairman of the board.

The move comes after demands by Senard for representation on the committees in return for approving Nissan's overhauled governance structure plunged the 2-decade-old partnership into crisis.

"Groupe Renault welcomes Nissan's decision to grant Renault's representatives a seat on the committees of the Nissan board, which will be presented to the general shareholders' meeting on June 25," Renault said in a statement.

"The agreement reached on Renault's presence in Nissan's new governance confirms the spirit of dialogue and mutual respect that exists within the alliance," added Renault, whose merger talks with Fiat-Chrysler broke down this month.

Nissan also said it would nominate Yasushi Kimura, adviser at JXTG Holdings Inc, to chair its board.

The French state has a 15 percent stake in Renault, while Renault itself owns 43.4 percent of Nissan.

French ministers have consistently highlighted the importance of ensuring the Renault-Nissan alliance remains strong, before planning any further consolidation with the likes of Fiat-Chrysler.

The 20-year-old partnership between Renault and Nissan has been strained since former leader Carlos Ghosn was arrested for suspected financial misconduct last year. Ghosn denies wrongdoing.

source: news.abs-cbn.com

Google to start selling auto insurance in the US?

SAN FRANCISCO - Google Inc may be moving into the U.S. auto insurance market with a shopping site for people to compare and buy policies, an analyst said on Thursday, as it continues to shift its attention to the automotive industry.

The search giant is planning soon to pilot its new Google Compare auto insurance comparison shopping site, wrote Forrester analyst Ellen Carney in a note. According to Carney, the company has been pitching the service to insurance providers for more than two years.

Google, which currently offers a service in the UK for users to compare over 125 auto insurance options, takes a cut when a user buys insurance online or by phone.

Industry experts say the Mountain View-based company has increasingly been exploring online searches tailored toward specific industries or markets. Google already offers its users a site to compare travel destinations and find the cheapest flight fares, for instance.

Google in past years has begun to expand beyond its home turf of Internet search and advertising, seeking to extend its technological dominance to fields as diverse as self-driving cars and robotics.

Carney expects the California pilot for the new service to begin in the first quarter of 2015. Google is already licensed to sell auto insurance in 26 states and is working with a handful of insurers including Dairyland, MetLife and others, she said.

In addition, a Google employee is licensed to sell insurance on behalf of CoverHound, a San Francisco-based company that pulls insurance options from the largest carriers.

Google said it does not comment on speculation.

source: www.abs-cbnnews.com

Auto industry roadmap includes electric vehicle assembly

MANILA - The proposed roadmap for the automotive industry has included electric vehicles, according to the Electric Vehicle Association of the Philippines.

The roadmap aims to “strengthen the position of the Philippines as a significant automotive player in the medium term and by 2020, become a regional hub for CBUs and parts in Asia supported by a strong domestic supplier base.”

Prepared by Rafaelita Aldaba of the University of Asia & the Pacific, the roadmap proposes the following fiscal incentives:

- Income tax holiday of 3 to 8 years;

- Extended ITH for high technology activities such as electric vehicles;

- Tax and duty exemption on capital equipment, spare parts and materials;

- Tax and duty exemption on imported raw materials;

- Additional tax deductions for labor expenses, export market development, innovation and R&D;

- Tax incentives for periodic increases in exports;

- Exemption from internal taxes levied on domestic products outside economic zones; and

- After the ITH and the exemption from local and national taxes, in lieu of these, special rate of only 5 percent on gross income will be applied.

To help expand the domestic market, the following incentives and policy reforms were recommended:

- Tax credit on locally purchased supplies and materials;

- Excise tax reduction from 35 to 30 percent on vehicles engine capacities of two liters or less;

- Elimination of smuggling and complete banning of imported second hand vehicles; and

- Government procurement of locally manufactured vehicles.

“We are very happy that finally, we have a long-term vision for the local auto parts industry. We share the wisdom of the proposed strategies such as the measures to enhance competitiveness, the policy reforms and incentives to build up the domestic market and attract investments and the creation of a more predictable business environment,” Rommel Juan, president of EVAP said.

“We at EVAP are very optimistic about this proposed roadmap as it is expected to double local CKD assembly by 2019, increase local value-added labor and parts by 50 percent by the same year, increase domestic OEM and aftermarket sales, increase export sales to $6 billion by 2015 and provide employment of about 150,000 in the mainstream auto and parts industries and another 50,000 in allied industries," he added.

If the roadmap is approved, prices of electric jeepneys, quadricycles, tricycles, buses, scooters and bicycles will be reduced by as much as 30 percent, the executive said.

source: interaksyon.com

Car sales in June up 25.3% year-on-year

MANILA - The Chamber of Automotive Manufacturers of the Philippines Inc. said vehicle sales in June went up by a quarter year-on-year amid the improvement in member-firms supply chain.

In a statement, the group said its members sold a total of 13,697 units last month from 10,935 units the same month in 2011. This brought first-half sales to 72,874 units from last year's 69,782.

"The local automotive industry continues to exceed monthly forecasts and perform better than expected because of these favourable situations," Campi said, referring to the return to normal of member-firms' supply chain and an improving economy.

Toyota Motor Philippines kept its lead, capturing 40 percent of the market, followed by Mitsubishi with 23 percent and Honda with 8 percent.

"We are very pleased to end the first semester of the year on a high note. This is indeed a positive sign that the local automotive landscape as a whole is on track to recover lost sales opportunities from earlier in the year. In addition to this, we would like to showcase our strong performance and kick start the 2nd half of the year by holding the 4th Philippine International Motor Show," said Rommel Gutierrez, president of Campi.

The increase in the industry's sales came on the back of Ford Motors' decision to shut down its manufacturing plant in Sta. Rosa, Laguna by the end of the year. The US carmaker sells less than 1,000 units in the Philippine market.

"Use all levers"

Trade Secretary Gregory Domingo on Tuesday said he cannot say whether the US carmaker's export strategy was wrong, adding that the decision was made from a global standpoint.

"But their pullout is a signal that the Philippines is still lacking," Domingo said.

He said a roadmap that the government and the industry are drawing up would include measures on how to increase the domestic car market so there would be economies of scale for manufacturers. The roadmap also should identify gaps in the supply chain and "figure out how to fill in those gaps," he said.

But sales cannot surge unless per capital income in the Philippines hits $2,000, Domingo said.

The government however is "willing to use all levers" to achieve the desired market size, such as giving incentives "allowable by law," he said, without providing details on the perks.

source: interaksyon.com