The car companies already have an affordability problem, especially with EVs, and that problem is going to get worse with all the new labor contracts. From Eric Peters at ericpetersautos.com:
A tentative deal has apparently been reached between Ford and UAW workers – who have been not-working in order to leverage themselves more pay for less work. Ford has agreed, apparently, to pay these workers 25 percent more over the next four years, plus cost-of-living adjustments and a “three year path to top wages,” whatever that means.
Here’s what it will mean for you – if you’re looking to buy a new Ford in the future: It’s going to cost you more. Because someone’s going to have to pay for these raises – and benefits. People who think Ford will pay are like the people who think government benefits are “free” – or that public servants are answerable to the public.
How much more all of this is going to cost isn’t yet known. But that it will cost is as certain as the price we pay for government benefits.
Ford will pay by trying to recoup its losses. It will raise the prices of the vehicles it sells in order to make up for what it pays the workers who assemble them. This will make selling them more difficult, especially given rapidly rising interest rates (as on car loans) and the rapidly diminishing buying power of the currency people are obliged to use to buy things with. When two small plastic bags of groceries cost $100 it’s kind of a deterrent to sign up for a car loan that costs $700 per month – which is about what the average monthly car payment is right now.
