Workers Winning, Dirty Come Clean, Is Google Apple’s Sugar Daddy

November 14, 2023
It’s an amazing Tuesday to be in the car business as we talk about some favorable effects from the UAW strike for workers at other OEMs. We also cover Exxon’s transition into lithium production, as well as a little slip from a Google employee during the trial.
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Show Notes with links:

We’re starting today with two labor related stories…

The first is Stellantis has announced voluntary buyout packages for 6,400 U.S. salaried employees, citing challenging market conditions. This move aligns with the company's transition to EVs and its Dare Forward 2030 strategy 

  • In a statement the company said: "As we prepare for the transition to electric vehicles, Stellantis announced today that it will offer a voluntary separation package to assist those non-represented employees who would like to separate or retire from the company to pursue other interests with a favorable package of benefits," 
  • The decision coincides with UAW members voting on a labor agreement that includes double-digit raises and $19 billion in manufacturing investments.

Hyundai Motor has announced a 25% wage increase for nonunion production workers at its Alabama factory by 2028, following similar moves by Toyota and Honda.

  • Honda also recently announced an 11% pay hike for U.S. production workers, influenced by UAW negotiations.

Exxon is aiming to be a leading producer of lithium production by the year 2030 as they announced their plan to start lithium production in the U.S. by 2027, and producing batteries for one million EVs annually

  • Exxon aims to produce lithium from briny waters in Arkansas, using conventional drilling and direct lithium extraction technology.
  • "In the long term, lithium really is a global opportunity," said Dan Ammann, president of Exxon's Low Carbon business unit. "We are starting here because there is an urgent need to ramp up domestic production of these critical materials."
  • Fun fact: Exxon actually invented the rechargeable lithium-ion battery in the 70s yet has no plans to invest in EV charging stations like its rivals BP and Shell.

Just when you thought Apple and Google were just good friends, it was revealed in Google’s antitrust trial that they pay 36% of all ad revenue from Safari to Apple. 

  • This figure was revealed in Google's antitrust trial, where it was disclosed that Google spent $26.3 billion in 2021 to be Safari's default search engine, with $18 billion going to Apple.
  • “Google’s conduct is illegal under traditional antitrust principles and must be stopped.... Google owns or controls search distribution channels accounting for about 80 percent of general search queries in the United States,” said Ryan Shores, the Justice Department’s senior advisor for tech industries. “We’re asking the court to break Google’s grip on search distribution so that competition and innovation can take hold.”
  • According to Bloomberg, Google lawyer John Schmidtlein “visibly cringed when Murphy said the number.”

Paul Daly: 0:34

It's Tuesday, November 14, I don't even know what day it is anymore. But we're at our last day at the modern retailing conference, having a lot of great conversations a lot to talk about the future. But today, we're talking about workers winning, dirty coming clean. And that is Google Apple sugar. Daddy, repeat. I never thought I'd under that was phrases.

Kyle Mountsier: 0:55

This is the fun part about recording podcasts on a beach. We have no clue whether or not nailed the audio on that, right, like with the show, but it's okay. Okay.

Paul Daly: 1:06

Yeah, it felt okay. And like, if you're just listening on the podcast, let's paint the picture for you hear it. So let's help you imagine what you're hearing. Yes. So we are standing behind us is the Atlantic Ocean and a nice little Villa between us in the ocean. So it's also probably about 30 mile an hour winds it's moving is when not many people out here. But the one person that decided to get up is the guy running the leaf blower

Kyle Mountsier: 1:28

background, because the wind isn't going to take care of that stuff. And that's

Paul Daly: 1:31

what he gets paid to do. Every morning. It's been an awesome time here. We spent a lot of time yesterday with dealers a ton of time with our industry partners.

Kyle Mountsier: 1:39

Yeah, we just went around and like I cannot wait to share the videos and the fun things that we did and just hearing what they're experiencing what they're looking forward to. So watch out for that video, because we'll put that out here soon.

Paul Daly: 1:51

We we have a few things to talk about today. Number one Thursday, we have our next asoto edge

Kyle Mountsier: 1:57

webinar with our friends and invoca yes, that Kendricks is going to be leading in he's ready. He gets real nerdy, real technical, but also just has a super fun personality. And he loves soccer. I like so

Paul Daly: 2:07

real nerdy was the glasses. Yes. You can register for that event. We hope you join us or you go to a so just scroll down a tiny little bit. We help you register calm and I will be there. We always have so much fun on these 20 to 30 minute webinars. Yes, different fields in the show. We learned a little something. We have some more people fun transitions. Hope you can join us there on Thursday. Yeah, registered register now so we can see that you're coming and be ready for you. All right, let's get into some news. That's got we have some fun things to talk about. So yeah, we do. We're going to start with two labor related stories that are really just kind of one overarching story. The first is that Stellaris has announced voluntary what are they call it voluntary buyout packages for 6400 of it. How many employees do you have that you can just voluntary buyout. 6400 Just picture that of their salaried employee. So they weren't involved in in the labor contracts, citing changing market conditions, the movers aligning when their commitment to go like everybody else gone fully be. So we need to pare down the staff trim expenses. So in the statement, the company said, and when they released, they said as we prepare for the transition to electric vehicles, so Lantis will offer voluntary separation package to assist non represented employees who would like to separate or retire from the company to pursue other interests with a favorable package of benefits. That doesn't sound terrible. I'm

Kyle Mountsier: 3:27

sure. Like, it sounds like it was well represented. It was well thought out. There's going to be plenty of benefits. There's probably a ton of severance. Just like I forgot to even add this, but we're here. Hold on. Sometimes we're like a live production mode. It's going to be okay, so my

Paul Daly: 3:50

volume button doesn't work today.

Kyle Mountsier: 3:51

No volume button. So the I'm sure this was handled a lot better than I don't know if you saw Solera dropped a bunch of their employees over zoom yesterday. Oh, I did and forgot to mute their mics and it got a little dicey. No. So it seems like still ANSYS is handling this a lot better. Obviously. There's been knowledge that this is probably coming in this in what they call what is it called their their advisor forward 2030 strategy, moving to EVs changing stuff. So yeah, we'll see what happened. Yeah,

Paul Daly: 4:23

so they are planning on releasing 25 EVs between now and 2030. Obviously, this decision coincides with the UAW voting, and all of the things there which kind of transitions into the second part of the story is that Hyundai announced a 25% wage increase while speak for its non union production workers in its Alabama factory by 2028. This has really fallen the lead from Toyota and Honda, also not unionized, right. saying like, Hey, we're gonna treat you well. We're gonna treat you fairly and meanwhile, like Sean feigns like, Hey, guys. Hey, we just did some things over there. We're gonna do Hear. So they're trying to, they're trying to jump ahead and be like, hey, a reason we can do this without all the drama. Yep. Is because we're paying attention. Exactly. So I mean, it's a good strategy for them super sweat. The other companies have all the friction, all the tension all the animosity, and then just coming afterwards, we're like, well match it. Look, there

Kyle Mountsier: 5:18

it is. Yeah. Because that's the market race. So smart.

Paul Daly: 5:21

So yeah, so I think workers winning

Kyle Mountsier: 5:24

workers are winning writers are winning, because there's not enough workers out there. And so you got to pay to keep them. Yep.

Paul Daly: 5:30

Can't can't use AI to manufacture final check on the glass. To do that. Yeah.

Kyle Mountsier: 5:37

Not at least Yeah. All right, our next story,

Paul Daly: 5:39

no segue, but no today. So this is an interesting one with a really fun fact, at the end, Exxon has this aiming to be a leading producer of lithium production. So the oil company is now going to be a lithium company by the year 2030, as they announced their plan to have plans to start lithium production in just a couple of years by 2027, and produce better enough batteries. Lithium for 1 million EVs annually. Wow. It's

Kyle Mountsier: 6:02

a lot of little like half of a manufacturer now.

Paul Daly: 6:06

It's a lot though, is that isn't a battery company? Literally. It's not like it's Panasonic?

Kyle Mountsier: 6:11

Well, yeah. So I mean, let's, I want to get to it, because they've got a little bit of long term strategy on that. So let's read that quote. But I got some I got some thoughts.

Paul Daly: 6:19

Yeah, the quote is, in the long term, lithium really is a global opportunity, said, Dan Amaan, president of Exxon's low carbon business unit, he said we're starting here. And that here means Alabama, is actually where they're starting, because there's an urgent need to ramp up domestic production of these materials.

Kyle Mountsier: 6:35

Yeah. And that's important. Without a doubt, we've seen the the move to say, hey, we need more of the materials produced here. We need final assembly here. That's important in the government right? Now. The bigger thing for me here is Exxon, saying, okay, look, if we've always been the energy company for transportation, this is just a move to stay the energy company instead of being an oil company, or an energy company. And that that's a that's like, I'm sure the valuation the energy behind the

Paul Daly: 7:03

what else you're gonna say, it's so funny to watch this contrast against Evie demand.

Kyle Mountsier: 7:08

And what we're actually talking about yesterday, and you know, exactly like

Paul Daly: 7:13

Evie demand falling off a cliff, it's worse than everybody thinks, based on some data that we are privy to. Yeah, here's a fun fact. Blew my mind.

Kyle Mountsier: 7:21

I give it to us, Exxon,

Paul Daly: 7:23

invented the rechargeable lithium ion battery in the 70s. Like, how do we, how do we not know that? How does the world not know that? That's unbelievable. Ironically, they are going to be producing charging equipment. Like there's some competitors like BP and Shell, right? I don't know how this works. What in it kind of reminds me of like Kodak. Yeah, digital photography, but like, oh, we sell film. Film Business. It's unbelievable. So add a little fun fact do with that what you will

Kyle Mountsier: 7:53

be speaking of a sales business, this one. So if you haven't been following Google's antitrust trial that has been going on for a few weeks at this point, one key factor came out kind of slipped out yesterday. So that Apple and Google were, you know, just good buddies hanging out doing search together in kind relationship, it was revealed that that Google pays 36% of all rap ad revenue that happens in Safari to Apple.

Paul Daly: 8:26

So on your iPhone, when you buy it, safaris default browser, if you're typing in the search, is Google. Yep. And every dollar that tracks after you log into that, and it goes 36% goes to Apple. So last year was 18 billion. Yeah,

Kyle Mountsier: 8:42

sure. Yeah. That in 2021 $26.3 billion in total cost to be safaris default search engine. It's unbelievable what the dollar exchanging hands couple quotes. From Ryan shores, the Justice Department's Senior Advisor for tech industries, he says Google's contact is illegal conduct is illegal under traditional anti trust principles, and must be stopped. Google owns or controls search distribution channels, accounting for about 80% of general search queries in the U. S. And here's the fun one, according to Bloomberg, when this little fact was revealed about the 36%, Google's lawyer, John Schmidt Lin, they said he was threw up in his mouth visibly cringe when Murphy said the number.

Unknown: 9:32

He's like, my day just got longer.

Kyle Mountsier: 9:36

Well, okay, so we've been talking about this. And I was having a conversation with a dealer yesterday, like we look at spending money on Google as spending money on ourselves, but actually, they are the largest third party vendor in automotive. We spend more money as an industry with them than any other third party vendor combined. Yeah. And so to look at this and go oh, and we're also spending money with Apple. Conversely, because seven percent of searches right now are being done on mobile. And of that 70%. The majority are iPhones. And so like,

Paul Daly: 10:09

right now about that we

Kyle Mountsier: 10:10

should be thinking as an industry like what are Google and Apple getting of our of our dollars that are headed towards driving sales?

Paul Daly: 10:18

Why goodness, Mike, I mean, he's he's having a tough morning, that lawyer, that legal team, but hey, it's like somebody said yesterday, I can't remember a presentation where they're like, What is Google's number one objective, right? Yes. It was like, make money. That's it. Google is losing money on this one. I guarantee you there's apple, a pretty smart company as well. Look, we're gonna be going back in the modern retailing conference with some pretty smart people. We're gonna bring you a bunch of interviews and content that we're picking up where with also a bunch of insights. Yeah, and things that are gonna kind of like spill into the future. So we have we have a great day. Love some people more than you love cars, and we will see you bright and early tomorrow.

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