'Strike Pay' Kicks in at $250 a Week for GM Union Members as Work Stoppage Hits Home
The financial burden of the United Auto Workers’ strike against General Motors is expected to begin weighing more heavily on union members this week, reports CNBC. While the work stoppage is estimated to be costing the Detroit automaker up to $100 million a day in lost production, Monday marks the first day union members will receive “strike pay.” The payments, up to $250 a week, are in lieu of company paychecks for the roughly 48,000 UAW members who have been on picket lines since Sept. 16. Friday marked the first payday without a check from GM since its union members went on strike two weeks ago. The strike pay is far less than the weekly compensation members usually receive. The starting wage for hourly assembly workers ranges between roughly $16 to $30 an hour, or $640 to $1,200 a week, before taxes and any overtime pay. Strike payments under $600 aren’t taxed, according to the union. They are paid out of the UAW’s “strike fund,” which totaled more than $721 million in 2018. Read more here.
Bentley Celebrates Its Centennial with Special Gear, New Lineup
Bentley, the British ultraluxury brand that turned 100 this year, has a slew of products to commemorate the milestone, reports Automotive News. They include pens that start at more than $500, sunglasses for $895 and even a set of golf clubs that costs as much as a Nissan Versa. And for a customer base that can afford to spend $500 on a pen instead of a car payment, Bentley has a number of new vehicles in its $158,000-and-up lineup as well after a dry spell for the brand in the U.S. Except for the flagship Mulsanne large sedan, every nameplate will have a redesign or at least one significant addition arriving in the U.S. in the next several months. For a brand whose low volume and exclusivity normally keep it out of the spotlight, Bentley is relishing the extra attention created by its centennial and product overhaul. "What we have just done is the total replacement of our traditional lineup, plus with an SUV on top," Christophe Georges, CEO of Bentley Motors Inc., the brand's Americas unit, told Automotive News. Read more here.
Jaguar Land Rover to Close Plants for a Week as Brexit Safeguard
Jaguar Land Rover plans to close its U.K. factories for a week in November to guard against disruption to supply chains from a possible no-deal Brexit, CEO Ralf Speth said. According to The Detroit News, the shutdown will go ahead whether or not Britain seeks an extension to the Oct. 31 deadline for leaving the European Union, he said at a briefing at JLR’s expanded technical center in Gaydon, England. The temporary halt will mean lost production for the unit of Tata Motors Ltd., already impacted by a global slowdown in the car industry. JLR brought forward its usual August maintenance closure as part of preparations for the original March 29 Brexit date, a measure that proved to be in vain after the deadline was shifted to October. “We have to close,” Speth said. “You cannot switch it on and off. I need to make commitments to my suppliers, I need to have every part available and I need it just in time. If I don’t have a part, I don’t produce a car.” Read more here.
Automakers Resort to $4,100 Discounts to Clear Old Inventory
Automakers probably avoided a quarterly decline in U.S. retail sales for the first time in almost two years, but only by spending big on incentives to clear old cars and trucks from dealers’ lots, reports Bloomberg. Retail sales were likely flat during the three-month period, according to researchers J.D. Power and LMC Automotive, but average incentive spending rose an estimated 6% to more than $4,100 per vehicle, a third quarter record. Old model-year vehicles accounted for 90% of quarterly sales, the slowest sell-down on record. J.D. Power’s findings are a potential knock against what analysts anticipate was a strong quarter for General Motors Co., and may be reason to be more bearish about what’s expected to have been a weaker period for Ford Motor Co. A GM spokesman said Monday the company will put out quarterly results on Wednesday, when Ford has scheduled its release and conference call. Read more here.
Why a Tech War Could Endanger Autonomous and Connected Cars
If you think the U.S.-China trade war is a problem for smartphones and 5G, spare a thought for autonomous and connected cars. According to CNBC, U.S. bipartisan lawmakers are considering a money pot for small and rural wireless network operators to rip out Huawei and ZTE equipment where there is a security risk. This has promoted Huawei CEO Ren Zhengfei to consider licensing the company’s 5G technology — from hardware to software and chip designs — to a U.S. firm to alleviate security concerns. The Chinese overture seems logical at least for autos, if roadblocks are to be avoided in the next generation of autos where connectivity will be more important than horsepower. In-car connectivity requires collaboration but that industry-wide, borderless cooperation is under threat. Even if Beijing and Washington achieve a trade resolution, and that’s questionable with rising heat around impeachment leading up to the presidential race in 2020, then a tech deal is thought to be more elusive. Read more here.
Webinar: 2020's Buy/Sell Market – Predictions for Next Year
This year's buy/sell market is extremely active and valuations remain high. Join Erin Kerrigan of Kerrigan Advisors on Tuesday, October 8 at 2:00pm EDT as she discusses:
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2019's buy/sell activity
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Expectations and predictions for next year
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Franchise valuation expectations in 2020, particularly for import franchises
If you are looking to expand your group or expecting to sell next year, this is a webinar you will not want to miss! To register, click here.
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