UAW's Southern showdown, new vehicle inventory ticks up, EPA gets sued

April 19, 2024

Hey everyone. This is the fourth edition of the CDG daily roundup so far, and I want to know—how do you think we’re doing? Share your thoughts in the comments.

In today’s edition, we cover:

  • The EPA's big legal battle

  • Rising new vehicle inventory

  • High-stakes votes for the UAW

—CDG

Today's Biggest News

1. The UAW’s battle in the South

Top line: The UAW is doubling down its unionization efforts in the South on the heels of a major strike against the ‘Big 3’ Detroit automakers that resulted in considerable gains for about 150,000 workers.

What’s happening: Today is the last day more than 4,000 Volkswagen workers in Chattanooga, TN, can vote in their union election. At the same time, the UAW just announced that 5,000 Mercedes workers in Vance, AL, will have an opportunity to vote to form their union in less than a month.

“The Time is Now”: Mercedes workers in Alabama to vote for union May 13-17 via UAW.org

Why it matters: In many ways, the South has branded itself as a union-free region. Yet, the UAW is running a vigorous campaign to change this, and publicity for the movement has amplified the organization’s voice.

In February, the Detroit News reported that the UAW committed $40 million through 2026 to organize non-union autoworkers and battery makers. 

For the first time, The UAW has disclosed the financial details of its organizing efforts. This follows the launch of its campaign last November to double its 146,000-member base by unionizing employees at 14 automakers, with many operating in Southern states (not all).

What the experts are saying: "This is huge for the UAW because they’re carrying so much momentum," Art Wheaton, director of labor studies at the Worker Institute at Cornell University, told ABC News. "The timing is now."

The influence of Shawn Fain: UAW president Shawn Fain’s approach has drawn praise and criticism from auto workers and industry experts alike. From live Facebook broadcasts that would routinely draw over 40,000 viewers to wearing shirts that say “eat the rich,” he has emerged as a pivotal voice for U.S. labor.  

Governors fight back: Earlier this week, Republic governors from six Southern states, including Alabama, Georgia, Mississippi, South Carolina, Tennessee, and Texas, condemned the UAW’s actions in a letter.

The joint statement reads, in part:

“The reality is companies have choices when it comes to where to invest and bring jobs and opportunity. We have worked tirelessly on behalf of our constituents to bring good-paying jobs to our states.”

“These jobs have become part of the fabric of the automotive manufacturing industry. Unionization would certainly put our states’ jobs in jeopardy – in fact, in this year already, all of the UAW automakers have announced layoffs. In America, we respect our workforce and we do not need to pay a third party to tell us who can pick up a box or flip a switch. No one wants to hear this, but it’s the ugly reality.”

Bottomline: The successes or failures of the UAW will not only affect local workforces but also set important precedents for labor conditions across the country.

2. New-vehicle inventory improves at the start of April

At a glance: April opened with over 2.77 million new vehicles in dealer inventory, but March’s brisk selling pace pushed the overall market days supply (how long it would take to sell all the inventory at the current sales rate) down to 72 days.

By the numbers:

  • April has 870,000 more units of inventory than the same time last year. 

  • Month-over-month, inventory didn’t increase drastically—up by only 30,000 units.

  • Steady retail sales in March brought days supply down by 7 days.

  • This is down 9% from the beginning of March.

  • But still 30% higher than the same time last year.

Of note: While days supply can be a useful metric, it doesn't totally reflect regional variations. Inventory levels could be higher or lower based on where you are.

The same is true for variations among brands. According to Cox Automotive, many Asian brands have the tightest supply, including Toyota (33 days), Lexus (43), Honda (46), and Kia (57). On the other hand, Jaguar, Dodge, Ram, and Fiat have at least twice the industry average.

What this means: New vehicle inventory is definitely growing and should pass 3 million units by year’s end, likely pushing new car prices further down.

Big picture: According to the experts at Cox, based on the current sales rate, 2024 is on track to be the best year for new car sales since 2019 (based on the seasonally adjusted annual rate, SAAR).

And would-be buyers looking for a bargain should consider shopping brands with above-average market-day supply, as manufacturers of those brands are the most likely to pile on discounts.

3. State attorney generals file lawsuit against EPA

Quick bite: Republican attorney generals from 25 states, led by Kentucky and West Virginia, are taking the Environmental Protection Agency (EPA) to court. 

Their aim? To stop new EPA rules that hope to curb emissions from gas-powered cars and light trucks, Reuters reports.

The rules: Slash tailpipe emissions for cars and light trucks by nearly 50% over 2026 levels in 2032, and reduce greenhouse gas emissions by 7.2 billion tons through 2055.

Why it matters: The regulations are a major piece of President Biden's climate strategy, intended to drastically reduce the auto industry's environmental footprint and accelerate the transition to electric vehicles. But the attorney generals say it’s unlawful.

What the AGs are saying: Kentucky AG Russell Coleman has raised alarms that the rules could hurt the economy, threaten jobs, and burden the U.S. electricity grid. 

“The Biden administration is willing to sacrifice the American auto industry and its workers in service of its radical green agenda,” Coleman said. “We just aren’t buying it.”

West Virginia Attorney General Patrick Morrisey said the rules were “legally flawed and unrealistic, to say the least.”

Florida AG Ashley Moody said in a statement:

 “Biden’s EPA continues to push radical Green New Deal policies at a time when the infrastructure is not in place and Americans are struggling economically due to Biden-created inflation.”

“Despite these concerns, Biden is trying to force a more than 60% increase in EV car sales over the next decade. We continue to fight Biden’s short-sighted and out-of-touch policies—taking legal action today to protect Americans from these outrageous emissions standards.”

The outcome of this suit has the potential to drastically change government oversight of the automotive industry. We’ll be watching closely to see how this lawsuit progresses.

Highlights from the CDG Job Board

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Looking to hire? Add your roles today—it’s 100% free.

Thanks for reading our daily roundup. Check back here on Monday for more top industry stories—same time, same place.

—CarDealershipGuy

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