UAW & Ford Now Friends, VinFast Recruits Dealers, Amazon Loves Pets

October 26, 2023
The strike is over! … sort of. On this Thursday, we'll talk about Ford’s tentative deal with the UAW as well as VinFast’s ambitious plans to recruit dealers nationwide. Plus, is Amazon about to give telehealth to your pets?
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Show Notes with links:

Could the UAW strike with Ford be over? Just two weeks after the UAW sent 8700 workers home at a Ford plant in Kentucky, the two sides have reached an historic tentative agreement, sending almost 20k workers back to their jobs.

  • The tentative deal includes immediate 11% raises for workers and a total of 25% raises over the next four years. It also reinstates cost-of-living adjustments and offers a three-year path to top wages.
  • UAW Vice President Chuck Browning stated that the new agreement holds more value in each year than the entire 2019 deal. Workers on a lower-tier pay scale could see 85% raises upon ratification, and temporary workers could get 150% raises over the contract's duration.
  • The strike had significant financial implications for Ford, costing the company an estimated $888 million.

Vietnamese EV maker, VinFast Auto, is significantly changing up its U.S. sales approach by adding actual dealerships with its direct-sales model. This strategic shift is in line with the company's ambitious expansion plans and launch of new models

  • The company has recruited 27 dealers across 12 states, adopting a hybrid sales model to augment its direct sales, primarily active in California, with a planned total of 100 open points nationwide
  • "You can't just wave a magic wand and put in a hundred dealers. The paperwork, the state filings, all that stuff, it's going to take some time,” said industry veteran Duke Hale who is an adviser to VinFast. 
  • Hale said there would likely be three of four phases
  • Despite the EV market challenges, heightened by Tesla's price cuts, VinFast remains optimistic, leveraging third-party dealerships for a more efficient capital expansion across global markets.
  • VinFast aims for a presence in 50 global markets by the end of 2024, with North America, particularly Canada, witnessing a sales uptick.

If leggings and robotic vacuums aren’t enough, become a vet. Amazon is looking to take a chunk out of the $137 billion pet market and compete with Walmart+ vet service offerings. 

  • The U.S. pet market is expected to grow to $200 billion by the end of the decade, driven largely by pet healthcare. Companies like Chewy and Petco are already expanding into pet health to maintain their market share.
  • Regulatory hurdles exist in the pet telehealth sector, with a maze of state and federal laws governing what veterinarians can do remotely. Amazon has already spent around $430,000 this year on lobbying efforts targeting "digital health oversight" and "telemedicine," although it's unclear if this is aimed at pet or human health.
  • Part of the push is due to Amazon’s ability to deliver the supplies necessary for the care of pets, adding things like medicine to its rich list of pet products.

Kyle Mountsier: 0:28Oh, you got the music coming in hot. It's a Thursday, I got Ben Hadley on this side of me. I'm hanging out in a crazy different city.

Unknown: 0:38

And there's much rejoicing in Ottawa. The people really want to pull out, isn't it? They stopped when they needed that five minutes. Repeat. Ben, how you doing?

Ben Hadley: 0:51

Pretty gangster right now. Dude. I got I got one of these. I got two of these. And I'm waiting for my third. Come in and may Let's go.

Kyle Mountsier: 1:02

Let's go. So if you couldn't see it, Ben's got both soda calm scarves on right now. So apparently it's cold and freezing.

Ben Hadley: 1:13

degrees. I'm freezing.

Kyle Mountsier: 1:15

That's that's bad. That's freezing for you. You got problems coming in about two months? I don't know if you remember that. Oh, yeah, I live in Vermont. That's brutal. Yeah, no. So Ben is talking about the fact that a soda con is coming in May this year, we've gone from September to May. And we are going to be still back at the same venue just south of the Baltimore airport a little bit north of DC. And the venue is fire this year. The conversations are gonna be so good next year, we've got crazy plans. There's plans coming together with like, different entities gonna be doing different content sections that we've never, we've never done before. And I'm excited about so may 14 through 17th. You gotta get your calendar set up for that right now.

Ben Hadley: 2:01

Also fire the rooms. Absolutely. Fire like best. Some of the best rooms I think I've ever stayed at on conference. Isn't that like one? You're like, why isn't even a case? That's a thing, dude. Like, you know what I mean? You're gonna fly away from your family you want a good hotel room to is the food that y'all supplied? That let me underscore y'all supplied, because normally they're like, oh, go, we're gonna have as the food because we know you're gonna go, go do something else now, right? You're not gonna skip this food. You're gonna go eat it?

Kyle Mountsier: 2:37

Yes, absolutely. Like lunch every day everybody was eating because it was that good. So yeah, they had. It's insane. It's so good. And they already like we we've talked to them. And we're like, we can't do the same food next year, you realize? And they're like, oh, no, we got ideas. All right, here we go. Let's go. It's good. All right, let's get into it. Oh, no, let me I gotta talk about this. You've been on auto clubs. And for everybody that comes on labs, and all of the episodes of the auto collapse podcast, which you can get on any podcast platform, always have a ton of fun. And we had a conversation with Lindsey semitone, their director of dealer relations at CarGurus. And you have to listen to it. Your literal mind will be blown. At the end of it the stuff that she she's trying to title. Yeah, I love the title. Well, the title is amazing. And when you hear what she's doing with the title, because it's a brand new title that they've never had before. That's what gets a little that's where it gets crazy. So auto collabs find it on anywhere you get your podcast, but this morning, we got to talk about some celebration news. So do we have an audio bug for this? Tell me we have an audio bug for this? No, we don't. Oh, no. I was hoping today would be the day where Jordan Cox would come in strong with a brand new audio bug for the UAW update because the UAW update today is one that we've been waiting for for a hot minute. The UAW strike with Ford could possibly be over just two weeks after the UAW bam, bam. There it is. Just two weeks after the UAW sent 8700 workers home from a Ford plant in Kentucky, the two sides have reached a historic, tentative agreement sending almost 20,000 workers back to their jobs. Here's a couple of details on the deal. The deal, mainly across across everyone has 11% razors for all workers as soon as it goes into action, and a total of 25% and raises over the next four years. It also reinstates Cola or cost of living adjustments and offers a three year path to top wages, which used to be almost doubled as long. UAW vice UAW Ford vice president Chuck Browning started the state The new agreement holds more value in each year than the entire 2019 Deal. Workers on a lower two tier pay scale, could even see up to 85% raises and temporary workers could get 150% raises. So absolutely historic. the only the only caveat here is in order for it to go into effect. The union workers have to ratify the deal, which expects to get done here in the next week. But back to work, Ben.

Ben Hadley: 5:32

That's huge. I would say it's also massive as a recapitalization or re valuation of human capital. Think about it from that lens. Right? It's like yep, robots are here. Yep. AI is here. But what is super valuable still and only trending up? Freakin humans.

Kyle Mountsier: 5:54

Humans. Yeah. And particularly in in working jobs like, like manufacturing jobs. So it's, it is a big win. And I think, especially with all the AI in the world right now, and kind of figuring out like, what, what is the value of human capital? And it's clear that it's of high value to Ford, I keeping that around? Because otherwise, they would have just totally, they would have just like punted on the whole agreement. Here's here's what the real cost is. For the stated that over the the course of the 43 days, the strike has cost the company almost a billion dollars at 888 million.

Ben Hadley: 6:36

Another. That's another way of saying that's another valuation of human capital, essentially, right? What happens when humans don't do anything? I mean, it's like, yep, quite a lot. So quiet all day. So about the people

Kyle Mountsier: 6:51

was speaking of evaluation capital, segway. Vietnamese Evie automaker who we've talked about a lot, probably like six to nine months ago. vinfast Auto is significantly changing up its US and Canadian sales approach by adding actual dealerships with its direct sales model. So this strategic shift is in line with the company's ambitious plans and their launch of new models coming to the US. The company currently has recruited 27 dealers across 12 states are adopting a hybrid sales model, so direct and indirect, to augment its sales, primarily active in California. And they've got a plan total of 100 Open points nationwide. I remember when they opened this up, and there were a few dealers that were like, I'll raise my hand, I'll raise my hand, I want to deliver these vehicles. An industry veteran Duke Hale, who's an adviser to vinfast said, even though they're moving this way, he said, quote, you can't just wave a magic wand and put it in 100, dealers, the paperwork, the state filings, all that stuff, it's going to take some time. But this is a big move, coming from a new OEM and in the AV space.

Ben Hadley: 8:04

It's also it's notable to me because it's like, everybody sort of works themselves is wanting to be the next Tesla. Right? vinfast is saying, no, no, we just want to be the next vinfast. Right. Like, we don't we're gonna play our own playbook here. And I am obsessed with people. I wrote about this a little while ago, like who the 17 Dudes invented agile, right? Right versus waterfall for for Product Management. Like that is more innovative in has sparked more innovation than anything that this is like a veering from the typical Oh, that playbook seems to work. Let's just copy and paste it. And this these guys are saying no, no, like, we're gonna do it our own way. And I love that. I hope it wins.

Kyle Mountsier: 8:52

Yeah, I'll go into and the interesting part for me is this is also one of the lowest price TV, automakers and so Oh, yeah, like the combination I think of a sales network of not having to create capital expenditures that are on their books, but are on dealer books. And, and the ability to be at a price point that allows like more people in the US and Canada to purchase. I have a feeling that this is going to speed up their adoption rates in the US. They they're, they're vinfast is still aiming to have a presence and 50 global markets by the end of 2024 with North America and Canada witnessing a massive sales uptick because of their growth through their dealer network. So how long has it been dealer networks?

Ben Hadley: 9:43

Dope on the dealer network. My only like Asterix on this is like, kind of wish it was a different name. That's it. Particularly, name is just not being passed. Like

Kyle Mountsier: 9:55

it's like you had to put Vin in there, you know, vehicle identification Ember Fest

Ben Hadley: 10:03

will be the first AB API's for their dealers. Oh, sorry.

Kyle Mountsier: 10:07

Whoa, wow, I gotta I gotta I have no segue now my segway guy disappeared with the hot take. But this is kind of a fun story. So if leggings and robot vacuums aren't enough, let's just become a vet. Right? Amazon is looking to take a large chunk of the 130 $7 billion pet market and compete with Walmart plus that service offerings. So the US market on on Pet Services is expected to grow by 200 billion by the end of the decade, largely driven by the fact that healthcare is becoming more popular. Companies like chewy and Petco who are primarily pet companies are already expanding into their pet health verticals to maintain their market share. There does, there is a lot of like regulatory regulatory hurdles, obviously, that companies like Walmart and Amazon and others that are not healthcare providers have to overcome and Amazon has actually in the reason why people are talking about this is they've already spent over $400,000 Just on lobbying efforts to make sure that the digital health oversight can come. This is this is where I think that this is really key. And the reason why we included this story today for dealers and the dealer network is Amazon recognizes that they can ship and deliver subscription services, medicine, pet products, pet supplies, all of the things that are required to take care of, like having a virtual office for pets. And so now they get the opportunity.

Ben Hadley: 11:48

And they had to freeze you on like that, too, dude. You know what I mean?

Unknown: 11:53

Can you you can still hear me?

Ben Hadley: 11:56

I can hear you. You're great. But like, they never freeze you.

Kyle Mountsier: 12:00

Give it to me like this, give it to me like this. Come on. Nathan helped me out. Boom, look at that we've

Ben Hadley: 12:06

come in, they never freeze you in like a great moment in an MMO. They're always like,

Kyle Mountsier: 12:12

yeah, it's the worst. It's the worst. But this is what I think is key is they are looking at this vertical, where they're like, we already do all of the things necessary to deliver in this vertical. So why wouldn't we just adopt that as a vertical as well, because we can leverage our network. And we can leverage all of that. And if it actually talks to it, it's a direct relationship with the story just a second ago with vinfast is like, hey, wait a second. We've got space, we've got land, we've got it together. And you and I have talked a lot about like, where are dealers going to find profit centers as margins get squeezed? Because of the sales model?

Ben Hadley: 12:53

Yep. Yeah, it's a classic Amazon play, find underserved niche, fill it, map out, full customer journey. segment, the customer journey, and then just own Oh, what do you buy a pet? Well, we can't like ship pets yet. Alright, but can't do that. Right then. Then then then. And it's like, we're gonna, we're gonna just own each part of that customer journey. Until the whole thing is Amazon, ified and 100%. After you buy a car, who gains a customer, not just the dealer, but the OEM. The banks, the insurance companies, boom, boom, boom, boom, boom. Yeah. So which, which of those

Kyle Mountsier: 13:37

verticals? Can you take the dealer sales process, the dealer service process and start to map to another vertical and find revenue streams? Because that's what the big companies are doing. So that's the encouragement for you. I know that the dealers are going to have some ideas on that. And I can't wait to see what some of our friends come up with. But for now, you know what, just get your cell ambition on for the Ford UAW update because that's a big deal. We don't have to worry about that anymore. It's a big win for auto. We'll see what GM instances do. But other than that, yeah,

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