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Thousands of factory employees from the car companies Ford, GM and Stellantis went on strike in the USA for six weeks. The unions have now agreed on new contracts with all three companies.
It is an expensive agreement for the corporations – and for the unions the success could be short-lived. Because the large corporations are increasingly losing touch with the new car world.
The large, heavy cars with an internal combustion engine bring the car companies considerable profits. The factory employees should now also benefit from this, in the form of massively higher wages.
Traditional companies falling behind
However, the age of the internal combustion engine is also coming to an end in the USA. This means that the billions in profits are uncertain. Because the car of the future will be electric and autonomous. But in both areas the traditional car companies are lagging behind.
Caption: Striking members of the United Auto Workers (UAW) union in Delta Township. (September 29, 2023) REUTERS/Rebecca Cook
GM, Ford and Jeep – the latter brand belongs to the Stellantis Group – now also produce electric cars. However, their vehicles sell poorly and cause huge losses. At the same time, companies are still converting their factories to electric cars and building battery factories. All of this takes time and costs a lot of money.
During this time, the electric competition continues to outpace them, especially Tesla. The electric pioneer from California is setting standards in several ways: in terms of the way electric cars are produced and sold, but also in terms of the performance of the vehicles.
And – this is particularly painful for established companies – Tesla is waging an aggressive price war and is still profitable. The same also applies to the second newcomer to the car market: the Chinese car company BYD.
Big differences in autonomous cars
At the same time, the established car companies are also losing touch when it comes to autonomous cars. Nothing illustrates this development as exemplary as the temporary end of Cruise, a subsidiary of GM.
Cruise recently launched a taxi service with autonomous cars in California. However, the offer had to be stopped again after just a few weeks – by order of the authorities. According to the verdict, the vehicles are too immature.
The competition Waymo, a subsidiary of the Google Group Alphabet, is different. Their autonomous cars received approval at the same time as Cruise, but can continue to offer their services.
So it’s quite possible that the unions have reached an agreement with dying giants. In this case, the employees would have gained in the short term – but lost in the long term.