Back and Forth

The auto industry is all about push and pull. Ebb and flow. Action and reaction. It’s a balancing act that requires constant compromise and re-evaluating norms, and it’s a fresh day of give and take. Let’s get into it.

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UAW Sets its Sights on Volkswagen

Volkswagen's plant in Chattanooga, Tennessee is at the center of a pivotal union vote this week, with significant implications for both the auto industry and the South.

• Third Time's a Charm — The United Auto Workers (UAW) are making their third attempt to unionize the 4,300 workers at VW's Chattanooga plant. This vote, running from Wednesday to Friday, reflects the UAW's broader strategy to expand its influence beyond traditional Detroit automakers into the less union-friendly South.
• High Stakes and High Hopes — Workers at the plant are pushing for better pay, benefits, and improved safety conditions. Boosted by public support and recent union victories in Detroit, UAW’s President, Shawn Fain, says they are very optimistic they can help achieve those goals.
• Governor Resistance — Governors from six southern states including Georgia and Texas issued a joint statement opposing unionization, arguing it could deter business investments in the region.

Recall Round-Up

🛠️ Toyota:

• Prius Recall — Toyota has recalled over 135K Prius hybrid cars due to faulty rear door handles and has paused new orders for the model. The recall affects vehicles produced from November 2022 to April 2024, though no related accidents have yet been reported.

🛠️ Ford:

• Battery Bug — Ford is recalling over 450K vehicles, including certain 2021-2024 Bronco Sport and 2022-2023 Maverick models over a glitch in the body and power train control modules that could lead to loss of crucial electrical elements or even drive power. Ford says dealers will recalibrate the affected modules at no cost to owners beginning May 13, 2024.
• Federal Focus — Ford is also under the government’s microscope for an issue with nearly 42,652 Bronco Sport and 2022 Escape vehicles that could potentially lead to gas leaks and even engine fires.

🛠️ Honda:

• NHTSA Investigation — The U.S. National Highway Traffic Safety Administration has escalated its audit of approximately 3M Honda vehicles due to reports of automatic emergency braking systems activating unexpectedly.
• Safety Impact — The probe initially focused on 2017-2019 models of the CR-V and Accord, but now include 2020-2022 models due to 2,876 consumer complaints and reports linking the braking issue to 93 injuries and 47 crashes.

Elon Musk’s Battle for Billions

Tesla is seeking shareholder support to reauthorize CEO Elon Musk’s $56B compensation package after a Delaware court ruling questioned its initial approval.

• Hold Your Horses — After Delaware Chancery Court Chancellor Kathaleen McCormick called foul on Musk’s massive $56B compensation package, Tesla executives began urging shareholders to reapprove the package at their upcoming June 13 meeting.
• Behind the Scenes — Despite the courtroom drama, Tesla is standing firm that everything about Musk’s package was kosher. Tesla chair Robyn Denholm pointed out that Musk hasn’t taken a paycheck for his work at Tesla in the last six years. Market watchers are saying shareholders are likely to re-approve the package.
• Meanwhile — The EV-maker has begun sending severance information to the approximately 14,000 workers that were laid-off earlier this week. Five former workers said their severance offer included two months of pay and health insurance.