The Detroit Three automakers say you can expect the pending labor contracts to add about $900 to the cost of a car.
And, says a University of Illinois Springfield professor, the supply chain problems are not over – because of the transition to electric.
“I think, particularly, the quest for rarer minerals is going to be an ongoing situation for the U.S. government to solve,” said Rick Funderburg, an associate professor of public management and policy. “That’s probably something that has factored into the settlement. Our domestic auto manufacturers really need the political support of whatever administration is in power.”
And about that extra $900? “Labor costs aren’t always a bad thing. Higher labor costs often reflect the productivity of the workforce. The natural response is to say, that’s going to naturally affect the production cost or the cost of the vehicle,” said Funderburg. “But it can also be a signal that the labor going into the process is a higher-tech, higher-skilled workforce.”
General Motors Monday became the last of the Detroit Three, following Ford and Stellantis, to announce a tentative deal with the UAW.