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Commentary: The UAW’s Strike Win on Plant Closures Is Too Rigid
December 2, 2023 // The transition to battery-electric vehicles is difficult enough without the addition of the UAW’s capacity alignment restrictions. Pricing and profit uncertainty within the sector is daunting, dealers seem reluctant to go all-in on the vision and the required infrastructure to ease consumer’s range anxiety will take multiple years to develop. Additionally, proposed CO2 and emission standards could add additional costs if manufacturers do not sell enough zero-emission vehicles. Manufacturers will need flexibility when transitioning from ICE-dedicated plants to dedicated BEV capacity. Rationalization is mandatory given the potential price pressure that will come from excess capacity in North America. The production volume for total light vehicles is a fixed amount. Supply does not create demand. Thus, the more manufacturers implement product and marketing strategies to fill BEV capacity, the more they will be forced to reduce ICE capacity.