Transcript 0:00 [upbeat music] Good morning. 0:01 It is Tuesday, October 10th, and I get the privilege of welcoming Ben Hadley over here to the pod Yo, yo We're talking about a heat map for the UAW, Lithia raising the ante, and Disney going cray. Here I go. 0:14 The people really wanna know who I is and who I be. They stop and stare when they see me. They consider what's new I don't know where I got Disney going cray, but that's all I could come up with there at the end, Ben. 0:23 Ah, Disney is going cray, dude. [laughs] It is. It's got... 0:26 I've, I've seen more Disney news across, like, multiple different things that they're doing, uh, in the last week than I probably care to see from a Disney perspective. So it's- Yeah... yeah. 0:39 That, that was doing something. Well, we can go into the politics, but maybe we shouldn't. Maybe we should. Maybe we... Hey, maybe we'll get more downloads, more clicks, you know? We'll go. Yeah, let's go. 0:47 [laughs] Get some controversy. There you go. Well, hey, we're glad to hear- Want to sign off to the other videos?... with us this morning. If you're listening, uh, we, uh, we're releasing content like crazy. 0:57 I c- I can't even keep up with it all, Ben. We've got ASOTU CON sessions going live on the YouTube in the app. We've got Auto Collabs episodes with Steve Russler and Jimmy Douglas. 1:10 Actually, the Jimmy Douglas episode is absolutely dope. If you don't know Jimmy, who was the ex-used car director for Tesla and has now created Plug, you got to get to meet him. It's 20 minutes of- He's the best... 1:22 uh, it's... He's, he's really... And he's just a cool dude, you know? Like- Exactly... super smart, but super cool dude. Yeah. 1:28 And he's got a history that you wouldn't believe, uh, from, you know, a guy that you just think, "Oh, that's a Tesla guy," you know? Um- Yeah... so you got to check that out. I'll check it out. Also, 1:39 I don't know if you know this, we're premiering episode two of More Than Cars on- Oh, I did miss... October 18- I just got the LinkedIn event invite last night. There you go. I'm ready. There you go. I'm ready for it. 1:52 Yeah, it's gonna... It's so good. Like, we learned so much from the first one, and then I got my hands dirty a little bit. May or may not have changed some oil. May or may not have- It's-... 2:03 beat Paul again in a little competition, you know, so. Yeah, dude. I, I've been waiting for it. That, that is like... I'm pumped. I'm pumped- Yeah... for this next one. It's gonna be good. 2:15 And then, and then, you don't know this, but, or maybe you do. Ma- you're just following all... You're like a fanboy sometimes. But Westhur- I do know... your boy Matt Lasher, uh- Yeah... 2:25 had us out, and that episode will be coming, like, early November. So they're coming in hot now. Oh, man. I know. It's real good. And Scott Buehler is just- I know that one's gonna be good... 2:35 he- Scott Buehler is just so good. He's d- Yeah. Oh, man, you, like, you describe... the owner of Westhur, he's just resolute, and he doesn't need to be anything for anyone. 2:47 He just knows who he is, cares for his people, and, you know, they throw a, they throw a party bigger than most state fairs just for their employees. So that's how it goes. So dope. All right. 2:59 Speaking of, you know, states- Parties. Stop. It's big boy time. 3:05 [laughs] [upbeat music] Hey, uh, if you don't know this, the Automotive News has done us a massive favor in creating just a wealth of information on a single page about what's going on in the UAW strike, so you don't have to guess anymore. 3:18 Uh, the link is in the show notes. But one of the things that they've done is, uh, given us a map of exactly where and what plants in the US are being affected by, uh, the strike. 3:29 What we looked at was, uh, actually only a few plants have over 1,000 workers striking. The majority of the plants have less than 100 workers striking, and the strikes are spread out um- across the US. 3:41 So when we've talked about on the podcast these, like, targeted strikes at specific plants, not wholesale changes, not wiping out everything, um, you know, the, the UAW has been extremely strategic, and they haven't advanced those strikes as of last month or of last week. 3:59 Uh, so we're seeing, we're seeing, like, we, we're, you're actually able to see that it's not this just massive wholesale thing. 4:06 Um, a few of the other things that you can see in there is this, uh, this gap between the UA- uh, W demands and the OEM proposals. 4:15 Uh, but it also includes some things that they haven't been talking about, like some updates to PTO and some holiday inclusions like Juneteenth. 4:23 Um, the, the one that, that, the, the graph that got me, and this will get you, Ben, is the difference between the hourly labor cost current 4:33 and, uh, of the big three and Tesla, which right now the current OE- the three OEMs range between $63 and $67 an hour, where Tesla is between $45 and $50 an hour. Wild discrepancy. 4:45 And some of these updates will bring the UAW workers into the average of over $100 an hour average for labor costs. I mean, if you didn't want to get into auto- [laughs]... yeah, that's, first one, part, part one. Damn. 5:03 [laughs] 100 bucks an hour, let's go. Like, let's go. Go work out. Part two is what a discrepancy, though, between... Like, you, you, we, uh, we get all these little vignettes, right? 5:11 Of, like, the new world of auto, which you put, like, Tesla and all the other guys in, and then the old world of auto, and you get to see these different slices between the supply chain, between this UAW strike. 5:25 But, like, that number is a wild difference- Yep... in pay. It is. That's crazy. 5:30 It's a massive difference, and then when you think about the volume of workers there, uh, one of the other graphs showed, like, back in, uh, the early 2000s, there were over 700,000 workers in the UAW. 5:41 Now there's 350,000, and we're gonna probably see that go down as the EV plants require less people. 5:47 Um, and then the, the last graph, this was the most interesting one to me, is as you see these pay rate increases over the last 10 years, um, you start to see market share also dwindling. 6:01 Now, I don't think it's a direct correlation, but I do think that this is where-Like Jim Farley and Mary Barra and Stellantis are really looking at, "Wait a second. 6:12 Our market share's been declining over the past 10 years due to, you know, new manufacturers coming in, or other manufacturers from outside the US having a bigger part to play in the US, um, you know, just buying the ecosystem and the market share. 6:26 And so I'm seeing market share decline, yet costs increase, and EV manufacturers coming with significantly less cost." 6:36 I can't imagine being the OEM right now and looking at these demands and going, "Yeah, this makes a ton of sense for business continuity over the next five years." 6:43 Yeah, I mean, but w- the other piece I would add to that is that, like, if you look at Tesla's resilience during the COVID supply chain freak-out because they own their own supply chain, it, you know, you, you start looking at the nimbleness and agileness. 6:58 So what w- what I, what you're watching is, okay, yeah, sure, maybe they get a higher pay rate, but if the employee numbers dwindle, that's only because they're outsourcing that supply chain further away. Right. 7:10 If they near-source it, maybe not less, like, maybe there's not as much shock to the system in the next crazy event that happens in our world. 7:18 But if they way outsource it, right, to recover those, the discrepancy of cost, that means, like, uh-oh, someone sneezed in China again. 7:28 [laughs] You know, pause the world, uh, and then that gives your competitor a wicked advantage, right, when you're, um, when you own- Right... your whole supply chain and, and all of it's really close, so- Yeah... 7:39 it's a really wild, uh, to watch this- Well, that's, that's-... continue to go at it... I think that's the dynamic that a lot of times we just don't see and just, you know, like, 7:47 oh, more pay, of course, which is, like, I think generally good for the workers and the families, right? Oh. But there's a whole other business, business economics that has to be at play and has to be considered here. 7:58 Um- Yeah... well, speaking of business economics. Stop. Segue. Time. [upbeat music] [laughs] Nice. These are some serious economics. 8:07 And just so you know, Ben, you're getting, like, the Ben love-fest in the comments on LinkedIn. Uh, but- Let's go... 8:13 Lithia Motors Incorporated has raised its offer to acquire Pendragon's dealership and fleet business Pendragon operated out of, uh, Europe, to $482 million amid a competitive b- building environment involving multiple auto retailers, notably Autonation. 8:30 Um, initially, the Lithia Motors, uh, offer was at a $350 million offer, while Autonation has already come in with a $544 million acquisition proposal. 8:42 Now, uh, here's, here's the interesting stuff here, and I think this is why this still isn't settled and Pendragon hasn't, you know, you know, signed on the dotted line somewhere b- because, I mean, that's a massive gap in dollar amounts. 8:54 But as a part of the deal, uh, Pendragon's DMS, uh, Pinewood would morph into Pinewood Technologies, and Lithia would still only own about a sixth of that, so they wouldn't actually take a majority ownership share in the technology side of stuff. 9:09 But Lithia already has 40 dealerships in the UK, and is gonna roll out the Pinewood DMS to the other m- major retailers that they have in the UK, and most likely start to bring that into the US. 9:21 So there's a big, you know, like, attraction there when you're talking about the largest in volume of rooftops across the US and Europe that could be utilizing the technology. Um- Yeah... 9:35 David Whitson, an- analyst with Morningstar, noted there could be a lot more value long-term for Pendragon shareholders by going with the Lithia deal versus the immediate cash payout to selling to Autonation. 9:45 Really interesting stats there. Yeah. I j- I wonder how much of this is about, 9:51 uh, the data infrastructure that is, is sort of part of that dealership because I f- as I understand it, it's actually harder in order to own, uh, to be a landowner in Europe. Mm. So, 10:03 you know, like, the, if your leverage on a normal dealership is, uh, both the real estate and the inventory and the revenue, um, I wonder, I d- I don't know the details, but I'd imagine that there's less of the leverage on the real estate side. 10:18 But- Right... the one where [clears throat] one place I think that would be interesting to explore it is, uh, is on the data side from, like, we were talking about this yesterday, Kyle. 10:29 It's like if, uh, if you have first-party data and you're enhancing it and adding columns to it, right- Yep... um, then your, your relationship with that data is better than anybody else's in the world. 10:41 So I wonder how much they've explored that angle. 10:45 Uh- Yeah, like what's the crossover of the data between the Pendragon stores and the 40 stores that they already have, and can both get additive first-party data to enhance their ability to gain market share or retain market share that they currently have- Yeah, yeah, yeah. 11:02 Well-... in Europe... well, I don't, I don't mean like, I don't think it's, you know, they're not gonna care about me going to buy a car in Europe. Right, right. That's, like, unlikely. What I think it's like, 11:11 you're not just gonna stop at Pendragon. You're gonna break into Europe. 11:15 So to understand the European consumer better than anybody else that's also gonna break into Europe and start m- making moves there, it's like, "Let me get the most enriched level of data first-" Oh, absolutely... 11:26 so I can understand what the next strategic chess moves that I'm gonna make once I'm over there. Yep. I would pay a premium just to be, to, to get that. Yep. Yeah, yeah. 11:35 I, I think, I think the interesting thing to me is that Pendragon hasn't just snapped up the $544 million proposal from Autonation. 11:42 That's, that's what I, I wanna understand, like, what about the Lithia makes it such a long-term play? Is it, is it solely based on the technology? 11:50 Um, the value, the value of the technology potentially expanding quicker? Is there a, a bigger data play? Is there a bigger brand play? Uh, you know, just lots of questions there. Lots of questions. Yeah. All right. 12:03 Well, speaking of some questions. Stop. Segue. 12:05 Time.All the users on X, formerly Twitter, uh, have lots of questions for Disney, uh, because AI may be ma- marking its way into larger creative compor- company operations in an unwanted fashion, as it looks like the jury may still be out on whether or not Disney crossed the line with generative AI to create a Loki poster. 12:30 Uh, characteristics like randomly placed squiggly lines and awkward human shapes have led people to believe that this poster, uh, has... 12:39 Uh, and you can see a little, if you're, if you're watching it, you can see just a part of it, and if you look in between the Roman numeral six and number seven, if you've ever done any, uh, like, generative AI, you can start to see this little characteristic of a, of a squiggly line. 12:54 Um, e- essentially what they're looking at there is that background image could be a part of a Shutterstock library that's not being noted as AI, and it may actually be someone in the Disney, uh, uh, ecosystem that's uploading these, these images to Shutterstock. 13:11 Um, they're not sure. 13:13 And then, uh, the, the other part of it that's really interesting is the little human images that are going around the main character's head, uh, kind of have some of those, like, uh, AI-generated notes, like, uh, little tiny arms or, like, misplaced, uh, uh, portions of the face or things like that where it, it... 13:32 Which is what you typically get in AI-generated images. If you look close enough, you start to see, eh, that's not exactly it. So I don't know if this is, like, a great... 13:40 That this is, like, huge brand play kudos t- from something like Loki, which is already just, like, a mess of a show, um, and, and understanding the time-space continuum that they have, or whether it's, or maybe it's a misstep in, in how they are deeming creative get to- It's also we- it's wild. 13:59 Like, what I also think we're seeing is, uh... [clicks tongue] Okay, like, fast- rewind a few years and people would've been like, um, what was that c- what was that movie? Avatar, right? Right. 14:11 Not AI, but insane amounts of CGI, right? Full CGI, right. And everybody's like, "Oh my God, look what computers can do today." 14:19 Now you're starting to see this, like, uh, just like you saw with COVID where everybody kind of thought e-commerce was gonna have a boom, right? Nobody's ever gonna buy a, a, a car in a store again. 14:31 And then it turned out, oh no, we all wanna see people, and we all wanna shake hands, and we all, I guess, wanna go to Taylor Swift concerts to see those people, right? Yep. 14:39 I think AI has this similar th- pattern happening where, you know, we go from, "Oh my God, it's so cool what computers can do," to, "That's not human." [laughs] "Wait a second." That doesn't feel good, right. 14:51 "I wanna see human stuff." Yes. Yeah, exactly. Yes. So we're almost getting the reversion of the mean back to really wanting humans again. You know, it's funny, I, I see that even in the written word. 15:01 Like, I'm starting to even just be able to sniff it out, like, "No way a human wrote that." You know what I mean? Totally. Like, it, I don't even- Yeah... need an AI question thing and- Oh, go chat, go chat with- Yeah... 15:10 remember yesterday, I was like, "Go chat with my AI bot," and you was, you were like, "Dude, that doesn't sound like you at all." [laughs] That's not even you at all. [laughs] You're right. Yeah. 15:17 [laughs] That doesn't sound like me. Right. So AI is clearly getting it wrong, but I do th- like, I wonder if there's a place for some parts of creative to go, "No, we intentionally used AI." Like- Right... 15:28 if I was Disney, I would come out with that marketing spin on this thing and be like, "No, because it's Loki, and because we're talking about time- Interesting... and space travel- Yep... 15:37 and it's already ambiguous, we intentionally used AI in a really unique way to prove that all- Makes sense... of the show is am- ambiguous." You know? That's the market- Yeah... spin on this. [laughs] That's a good spin. 15:50 Hey, if you're listening, Disney, that's it. Hit us up. That's it right there. That, that was us. That was us. Well, hey, that's all we got time for today. 15:58 Maybe you can throw a marketing spin on the fact that you use ChatGPT and you're super innovative. Uh, but if not, like, people wanna be human. People wanna see humans care for humans and learn from humans. 16:08 So be human today. [upbeat music] Go. [upbeat music]
