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Sat Sep 21, 2019, 09:53 AM

What's really at stake in the GM strike? The future of cars.

Detroit is stuck. Its carmakers still sell plenty of vehicles. But while their chief challenge for the past century has been figuring out which cars consumers will buy, they now face a future of having to sell Americans on the very idea that they need to buy a car at all.

That’s what makes the United Auto Workers strike against General Motors so different from past conflicts. The union and carmakers have always played tug-of-war: In good years, the UAW demands a share of the prosperity. In bad years, the companies seek concessions so they can stanch their losses. But the current strife pits the auto industry’s past way of doing business against its uncertain future. The carmakers would have you think that every American wants a big ol’ SUV or pickup truck. And the union, with its walkout, is saying it wants to keep things the way they are, without shutting plants or laying off workers or paying more for health care.

But the stakes have changed in a way that neither the carmakers nor the union fully acknowledges. Consumers have signaled that maybe they don’t need Detroit quite as much as they used to. Auto analysts suggest that the country has reached “peak car” — meaning the number of autos sold each year isn’t likely to increase. Some predict a drop in worldwide demand. The long-term trend has been shifting toward fewer cars per household. Because the United States is so big, it takes a lot to bump the ownership statistic, but it has been below two cars per household since 2009. Not only do these trends cause havoc with automakers’ planning, they blunt the UAW’s ability to argue for more money and guaranteed jobs, and to get them through strikes.

Drive any highway in America, and you’ll see fleets of new sport utility vehicles and pickups. The carmakers push them in their advertising just as the behemoths push smaller vehicles out of the way while zooming past. They offer lease deals and rebates, or knock $5,000 or more off the price, which they can afford to do because the big models yield big profits. The companies argue that they’re meeting consumer demand, but like department-store clerks who bring out only the most expensive dresses, they rarely put any effort into marketing less-profitable cars. Detroit automakers have all but erased smaller cars from their lineups: Ford has dropped the iconic Taurus, which helped it compete with Japanese carmakers in the 1980s. Chrysler is going to discontinue, in North America, the little Fiat 500, which it got from its Italian overseer. And GM has ended production of the small Chevrolet Cruze at its factory in Lordstown, Ohio, one of four vehicle plants it announced last year that it wanted to close, a move that enraged the union and struck fear in the hearts of local communities.


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Reply What's really at stake in the GM strike? The future of cars. (Original post)
Zorro Sep 21 OP
still_one Sep 21 #1
CrispyQ Sep 21 #2

Response to Zorro (Original post)

Sat Sep 21, 2019, 10:30 AM

1. What is missing from this conversation is how trump's trade war has hurt the auto industry

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Response to Zorro (Original post)

Sat Sep 21, 2019, 12:55 PM

2. I know a lot of young people who aren't interested in owning a car at all.

Some don't even know how to drive. ~gasp! But I live in an area that has okay public transportation & probably a ton of Uber/Lyft options. Also, a lot of young people have a ton of student debt. Why take on car debt, too?


...the age of the average car owner keeps going up. It’s 55 now, and buyers that age and older account for the majority of new auto sales. Millennials, who seemed slow to get into the market a decade ago, are picking up their buying pace, but car companies are starting to worry about Gen Z, those born after 1995. These buyers are the ones with a range of transit choices that their parents and older siblings didn’t have.

Wow! I had no idea it was that high.

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