Slam the brakes
Chaos strikes in the Motor City
Good morning, road warriors. This is your Stock Market Rundown for September 22nd, 2023. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: ASSEMBLY LINE TO PICKET LINE 🚗
No contract, no peace! The United Auto Workers (UAW) are on strike, and that’s bad news for anybody who just hit 250,000 miles on their Ford Fusion.
It’s the first time in history that the UAW has been on a strike at all three major US automakers at once: General Motors, Ford, and Chrysler—the famous Detroit Three.
After the near-death experience of the 2009 recession, the automakers fixed their businesses by trimming barely-profitable vehicles from their lineups, and doubling down on big-ass trucks and SUVs with big-ass profit margins.
The union played nice with the bosses when things were tough. Now, they figure, it’s payback o’clock. The UAW is asking for 36% raises over four years. The automakers are digging in their heels and counteroffering 20%.
Funnily enough, the CEOs weren’t so stingy when it came to paying themselves. The Detroit Three CEOs saw their total compensation increase by 40% over the past four years, while worker pay only went up 6%. The CEO of Ford made $23 million last year; the CEO of GM, $29 million.
Compare that to the pocket-change paydays of the CEOs of Toyota ($5.0 million) and Honda ($1.5 million). Geez, these Japanese car-company CEOs have gotta ask their boards for raises… the Americans are making them look like chumps.
Whatever the outcome of this showdown, consumers will pay up. Car prices are already higher than Snoop Dogg. The average price for a new car jumped from $39,919 in 2020 to $48,798 in 2023. If the strike drags on, dealer lots may empty out, spurring panic buying.
Better count on a few more oil changes for that aging Ford, and don’t worry about the dented bumper, that’ll buff right out. Solidarity forever!
SO WHAT ELSE IS GOING ON?
Colombian marching powder is about to surpass oil as Colombia’s top export. Revenue from the illicit cocaine business just hit $20 billion a year, and represented 5% of the country’s GDP. Not sure how they calculate this when drug dealers don’t submit income tax returns.
3M, industrial manufacturers of everything from stethoscopes to Scotch tape, warned of a “slow growth environment” in 2024. But no recession will stop their sales of Post-It Notes to boomers who need to remember their internet passwords.
While spiking gasoline prices are crushing consumers, relief is nigh. Analysts say the price will decline soon because winter-grade gasoline is simpler and cheaper for refineries to produce. Yes, gasoline has seasons, much like your wardrobe when you switch from cozy winter cable knits to sassy summer crop tops.
US airlines recently reported demand for domestic flights was down five months in a row. Next time you fly domestic, finding space for your Tumi in the overhead compartment may not be such a pain in the ass.
That’s it for this week, friends. Crush a few cans for me this weekend, and let’s circle back first thing Monday. Yours in capitalism, The Axe