Ford’s Plans to Be More Efficient, Tesla’s Buffalo Union Fight, Superchargers For All

February 16, 2023
Welcome to a beautiful Thursday as we talk about Ford’s plan to close a major EV financial deficit between competitors. We also talk about a unionizing fight brewing at Tesla’s Gigafactory in Buffalo as well as the impact of new legislation on that very same factory.
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  • After Ford reported drab earnings last week, they’ve keyed in on closing an $8B cost deficit between them and their EV creating competitors, according to company executives
  • On the earnings call the company blamed chip shortages, supply chain disruptions, and ‘instabilities’
  • CFO, John Lawler said the company can save 2.5B through better management of production schedules and and anticipated drops in commodity prices
  • Facing an additional $5B in cost differentials, CEO Jim Farley says plans to close the gap by mid-decade include
  • Reducing Dealer inventories, driving more transactions online, increasing aerodynamics (thanks F1), increasing battery efficiency, and moving to large underbody castings, an approach pioneered by Tesla
  • "We have a bracket group," Farley said. "We have hundreds of engineers who make brackets. If you want to make 8% margins in EVs ... There's no bracket group."

  • Tesla has fired dozens of workers at its Gigafactory in Buffalo, NY after an apparent unionization push at the factory that was originally a old steel mill.
  • According to the company’s website, the 1.2M sq/ft factory “... manufactures infinitely scalable clean energy generation and storage products – solar panels, Solar Roof, the Powerwall home battery, and the Powerpack battery system for commercial and utility-scale sites.”
  • In recent years the company has added almost a thousand workers who perform data annotation for Tesla’s Autopilot and self-driving efforts,
  • Many of whom announced their intent to unionize stating they want better pay, job security, and less tracking at work
  • They are supported by Workers United, whom are known for unionizing workers at hundreds of Starbucks stores
  • In a filing with the US National Labor Relations Board, the union Workers United accused Tesla of illegally terminating the employees “in retaliation for union activity and to discourage union activity.” The union asked the labor board to seek a federal court injunction “to prevent irreparable destruction of employee rights resulting from Tesla’s unlawful conduct.”

  • Yesterday, the White House announced measures to incentivize US made EV charging infrastructure spurring Tesla to double its amount of superchargers, made in … Buffalo, NY to around 7,500
  • At least half will be along highway corridors
  • They will be providing a way for non-Tesla’s to charge providing a CCS “Combined Charging System” way to connect and charge
  • Congress has approved $5 billion for highway

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Kyle Mountsier, Paul Daly

Paul Daly  00:26

Hey, it is Thursday, February 16. Back in the saddle, we got things to talk about Ford's planning to be more efficient. Tesla's fighting the union thing. Chargers are going to be everywhere. And we got a lot of input from out there in the world coming in today. Because that's what happens when you travel, isn't it? They stopped. Gotta remember. Remember what everybody deals with? Outside of your little bubble. You know what I mean? When you get out get it? Feels good to be back though. It really,

Kyle Mountsier  00:52

man. I'm glad you're back. I you know, just so everyone's clear. Like, since I'm on central Paul's on Eastern he kind of like he owns a little bit Morning Show style. I own you know that what the team's output is on the on the email. This morning.

Paul Daly  01:09

I was just like, Ah, so good. He logs in and see the shows be available? Oh, yeah, here we go. Hey, there's nothing better than knowing you have you work with such a great team that are just so focused in on mission that you can take a few days off and focus on your family and I really was able to detach, because you all in the team, just holding it down in this sort of community, the people that contribute, and the people that are part of it. It's really an awesome feeling of gratitude to be able to check out and I do it. I like checked out. You know, I did because like, yeah, like I checked it out. And then like, I haven't been on social media. And when the Eagles last I checked out doubly. I was like, I'm not.

Kyle Mountsier  01:50

Yeah, you were like, No, I'm definitely out no Instagram. And for me, yeah,

Paul Daly  01:54

I literally I didn't, I didn't look at a dang thing. But it was good. It was good. Like you're saying it's a good reminder for everybody. That's what makes that sort of, that's what makes healthy lives. You know what I mean? Yeah, being able to detach for a minute, come back, come back fresh, a lots going on. But at the same time, not a lot is going on. And you know, the automotive world, you realize like, oh, this just keeps going,

Kyle Mountsier  02:14

it keeps going like it continues to move. And I think that that's the that's any any business that kind of like thinks about it daily, and not at minimum, like quarterly or yearly, as far as there's just growth, there's growth to be had like, think about how your employees, we talked about the guy that I met at nada, that was like, maybe I do need to let a service advisor take a couple couple of weeks off to go travel Europe, because I'd rather have this person for 10 years then have to go train someone else. And so, so good. They look at the 10 year plan. Exactly. Any business can look at employees time off and care for their livelihood, their families as a valuable part of their work life.

Paul Daly  02:55

I will say, I will say like, so we went, we went to Orlando, and we went to disable Disney parks. And you know, always you can't go to Disney not to be impressed with the efficiency of an organization. Staggering. Staggering, just like oh, they do that. Oh, that's what you that, oh, they saw this problem that way. Oh, it's sad. But one thing stuck out to me quite a bit. Number one, there are only four Evie chargers in the whole parking garage space. What 14 That's

Kyle Mountsier  03:25

quite impressive. Just because like you think that that might be the place the crowd, the company is going to prioritize that

Paul Daly  03:33

Disney believes it doesn't matter. Guess what, it doesn't matter. Because they're paying attention more than any of us. Another thing is that there is a huge void of the auto industry presence at Disney

Kyle Mountsier  03:46

whatsoever. Just from an advertising or anything. Anything no activations, no

Paul Daly  03:51

advertisement, you think it is that that is right, especially with all the AV stuff like that is ripe, and there's nothing there. So a couple of

Kyle Mountsier  03:58

observations, because like you probably have 50% of the crowd. I mean, it's a massive crowd, so it shouldn't matter, but of international travel coming there. So maybe there's less of a you know, target audience, but it's definitely a it's definitely an income earning audience typically, right. Even the people that are saving to go right so it seems like a great day. Get around,

Paul Daly  04:21

get around either way. Yeah, just an interesting couple of things that popped up in relation to what we do around here. A couple other things that we're doing around here getting through the answers, get to some news, but we're doing a Reuters event, dude. Yeah,

Kyle Mountsier  04:31

we have writers collab. Really excited about that. Yeah.

Paul Daly  04:35

So it's in Las Vegas. It's their automotive retail event. They actually reached out and they're like, Hey, can you emcee some panels? Kyle, I'll be moderating some of the mainstage panels. Our friend Steve Greenfield is going to be emceeing the event. Some other familiar faces Brian Kramer is going to be there. We're gonna cause some trouble at this event. Yeah, I'll tell them we said that but we're gonna cost them their act we're actually gonna do a collab podcast with them a lot of cool stuff may 16 and 17th It's, if you can get out there and be with us. Let's show up and represent the Soto crew at the writers event because they're great people doing great work in automotive, and we're happy to be there. Do we talk about the regional tour that we've

Kyle Mountsier  05:12

talked about a little bit. We're coming to Arlington, Tampa and Atlanta, but you want to circle April 5 in Arlington, which is right outside of Dallas. We'll be there for our first solo tour event. We're bringing the Tonight Show live to multiple cities, and it's already gearing up like the production crew has been having meetings. We're ready to go.

Paul Daly  05:30

Yeah. And then a soda concept September 25. Through 27th. Yes, that's a little bit out there. But circle the thing more announcements to come. Or let's talk about some news today. All right, check this out. After Ford reported some drab earnings earlier in the week they've keyed in on closing what is an $8 billion cost deficit? That means between them and their Evie creating competitors. I'm a company company executives are like, yeah, we're at an $8 billion disadvantage, I mean, and then you factor in the price cut there, or whatever, you're gonna call that thing. So on the earnings call, the company blamed chip shortage, get this, you're gonna be surprised, prepared to be surprised chip shortages, supply chain disruptions and, quote, instabilities.

Kyle Mountsier  06:12

But all the air quotes around all the terms around anything that we've talked about in the last year and a half.

Paul Daly  06:18

This is like, yeah, we're still blaming that okay, so But that's why they blame, you know, the problems with the earnings, but see f Oh, John Waters, Lawler said, the company can save back to saving and closing this deficit of 8 billion, they can save two and a half billion through better management of their production set schedules. And they're also anticipating some drops in commodity prices. So that kind of leaves like, you know what I mean, like another 5 billion CEO Jim Farley says they're going to close the gap by mid decade. So that's I guess, anywhere between 2024 and 2027. They can probably range that. He says we're going to reduce dealer inventories. Okay, we're already pretty low. Okay, you're gonna drive more trend here. I'm gonna let you comment on this. The second drive more transactions online. I guess that's going to save Ford corporate money, increasing aerodynamics, they do have a partnership with f1. They do f1. So that makes sense. Increasing battery efficiency. Yep. And moving to large underbody casings pioneered by Tesla, right. There you go. And so

Kyle Mountsier  07:23

here's, here's what I gotta say. I gotta say about this one, reducing dealer inventories, things that you said a year ago, yet dealer inventories are yet high again. So tell me how you're going to do that with real facts for the next few years, driving more transactions online? What sit like, has anybody asked the consumer at the OEM level what they actually want without a leading question? Absolutely. Not. Every dealer that I talked to is saying, Look, we're getting less leads online, but we're selling more cars, meaning these people want to come into the store boss, and you know, the other manufacturing stuff. That's probably where they should pick it up, you know, original equipment manufacturer, lean in on that. Let the dealers take care of the rest to work out for you.

Paul Daly  08:14

So good going to come in.

Kyle Mountsier  08:16

Man I've been I haven't looked even waited three days. I had to read the news. And I let Michael Cirilo and Ben color commentator back in the colors all

Paul Daly  08:25

right, he's becoming a just bump send it over, then that guy's waiting to spike a few these days. Also, also, CEO Jim Farley says like in talking about how they're going to cut expensive says, we have a bracket group. Get this we have hundreds of engineers. Think of what hundreds of engineers look like for a minute. Yeah, but what hundreds of engineers look like they have hundreds of engineers making brackets you go so if we want to make 8% margins in EVs, there's no bracket group. It's like we're cutting out all the brackets. We're gonna the bracket guys are like they're all the I'll tell you what, man when the bracket guys read that. I was like the bracket guys are like, bro. Yeah, make something else. They were

Kyle Mountsier  09:10

probably something like these next guys. Speaking of the next guy segway a couple days ago, it came out that some Tesla workers and a gig in its in their giga factory in Buffalo, New York, close to our board pod daily up there. shirted a union unionization push at the factory that was originally an old steel mill. Now Tesla has come around and quickly said bye to these dozens of workers. According to the company's website, this this giga factory engineers some of the storage products solar panels, solar roof power wall home battery power back battery system, and this was just kind of the first push that Tesla had ever ever seen to unionization. And you You can see how they feel about that.

Paul Daly  10:01

Yeah, yeah, they can't I mean, this story, this one and the next one. And the last one all really kind of grouped together. You know, Ford saying we're trying to be competitive on EVs. One of the reasons that traditional OEMs have a hard time being competitive, they have massive, massive, you know, like, pension plans meant massive healthcare, you know, figures that they have to cover, a lot of that's because of unionization and the way things used to be and kind of like, it doesn't translate as well into a 2021 working environment from when the unions first were formed. Tesla is obviously going to be pushing back against the same things. And one of the reasons Tesla is able to be so competitive is because they're non union company. And so, you know, kind of the heats turning up the same company that has been organizing the Starbucks workers, what do they call their in here, workers united, they're known for unionized workers at Starbucks. They're actually the ones kind of behind the unionization effort here at the Tesla Gigafactory. Plant isn't buffalo I forgot it was even there. I was like, what did they do again? And it's only two hours away? I knew it was him. But yeah, it's much more on the storage generation, you know, the storage side, then they don't make vehicles, which is probably why, you know, they're talking about solar shingles and all that too, back in the day. And, yeah, so they're trying to, you know, Elon Musk in the middle of more controversy, can you believe that?

Kyle Mountsier  11:21

I know, right. Well, and and just anecdotally, a little over a week ago, I posted on LinkedIn, a little post about service technicians, and how, as an industry, we need to care for them and how they're, you know, that they keep people's cars running. And like they are, they've been an underserved portion of our industry. And like, if you want to do a little scouring, go look at the engagements and the comments on that post. And look at the number of Tesla employees that kind of got involved in that interaction behind this

Paul Daly  11:51

that I was gone. I didn't see that I have to go look at that. It's very,

Kyle Mountsier  11:55

it was just like, I was interested to see like, how many of those the Tesla technicians were paying attention to, like that type of encouragement. And you wonder if there's, you know, because the union isn't setting some of those guidelines, I wonder if there's a gap between leadership and execution there at the technician level in the Tesla environment. So, man,

Paul Daly  12:18

it's so it's such a tough debate. I grew up in a union family, my dad worked for Verizon, Verizon was then Bell Atlantic, you know, so I kind of like grew up on the one side of the Union, where it's just always a contentious relationship. One of my first companies imageData, we served a lot of dealerships in the Buffalo area and the fixed upside. And I remember the first time we came across a union store in the service department, I was like, What do you mean a union store? And I have to say this, it was really, really hard to get any work done there. And it just from from a first person standpoint, like everything, seemed like it was designed to stop things from going smoothly. Right. And I mean, that's, hey, for your company, treat your employees really, really, really well treated. My team members treat I

Kyle Mountsier  13:01

mean, I mean, just watch the NFL players union, you know, every single year fight with the NFL over their contract negotiation. So

Paul Daly  13:10

everything, everything existed for a reason, right. Like the way something came up is because there was some level of dissatisfaction or sometimes bad situation. So last point in this and a fine with the US National Labor Relations Board, the union workers united accused Tesla of illegal terminating those employees in retaliation for union activity, or just discourage union activity. They asked the Labor Board to seek a federal court injunction to prepare to prevent irreparable destruction of employee rights resulting from Tesla's unlawful conduct. Speaking of Tesla still, here we go. Well, it's okay.

Kyle Mountsier  13:46

We will do days without without Elon, so we're, you know, we're going forward and stuff.

Paul Daly  13:52

So what's on the show today? Because they all go together. So yesterday and this factory in particular yesterday, the White House announced measures to incentivize us made Evie charging infrastructure spring Tesla to say they're going to double their amount of superchargers across the US. And a lot of these charges are Guess what? Made in Buffalo, New York, same factory. So you got the union issues at same time big government money coming in, to say like, Hey, can so interesting, can I know it right? So and they're gonna say they're going to double this network, at least half of them are going to be along Highway quarters, others that like supermarkets and things like that. And they will be in this is what they need to get the federal money providing a way for non Tesla users to use their superchargers. There's a standard called the CCS combined charging system, which is how other gets going to be the standard. So Tesla's have their proprietary connector, but they're also going to have a connector for non Tesla's Congress approved 5 billion for the Chargers plus another two and a half billion in grants. So that very buffalo factory is going to be the one pumping out a lot of extra beats.

Kyle Mountsier  14:55

They're going to be rotten and this is a huge amount of just charging infrastructure, Tesla, being willing to play ball with other auto manufacturers is a big deal. I was curious. And just because we've talked about, you know how the White House has been working on trying to get these 500,000 chargers across the US, you know, just looking at the number of gas stations in the US, I just, I just did a quick search. And so I don't know exactly whether this is valid or not. But it looks like there's around 145,000 fueling stations across the US, let's just take an average and say that there's 10 stations, 10 gas pumps at every single station, that's 1.4 million gas stations, that's probably a little bit low, because like he got buches out there with about 833 gas gas pumps. But you know, it's like, just over the time, you we know that this is only going to cover a portion of everything that needs to be done. But I think it's a good move in the right direction. And hopefully, others like Tesla in the public sector or in the private sector can continue to you know, push the boundaries of what they're doing from a production scale.

Paul Daly  16:04

So that I will say anecdotally, as well as in my travels and going around, like, you know, the middle of Florida and Orlando, every time I saw an Eevee charger, it was pretty much full. Oh no, really? No. They were full and I was like I saw all kinds of stuff plugged in I was like Chrysler minivan I was like, what's that that's actually plugged in? Oh, they haven't even like there were all kinds of stuff plugged in and so I would say like 80% of the time I saw charger it had something plugged into it now I don't know if that was just because if you're trying to park right right it's a very convenient place to park like I don't know how they put them in Central

Kyle Mountsier  16:36

Florida is Florida good adoption state for EVs. You know and just because the weather and the you know, the type of people that are there and that the income bracket that you see a lot in Florida so

Paul Daly  16:46

interestingly Cindy, we got a thank you to all the people commenting on the live stream this morning, Cindy Yeah, well says all the charging stations here in the three years. I've never seen anyone using them. I'm not sure Cindy, if you get this before we wrap up, just let us know where you're calling from. Ellie lane. Thank you so much for just dropping in some comments Brian Ortega. As usual, Nathaniel Greg Lake. Thank you so much for everybody hanging out with the show. Just hanging out. We're having a good old time on a Thursday because it's Thursday. It's a good day to have a good time. Right? Because we're in the automotive industry. We get to serve people and whatever they do in the government, Evie chargers Guess what? We're still gonna be right here doing what we do in love and people more than we love cars.

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