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Deep discounts — $12K, $13K, $16K — are fueling a pickup price war

Heavy discounts of up to $16,000 per vehicle are fueling a "truck war" among full-size pickups sold in the United States by the Detroit Three, a Reuters analysis shows. Strong U.S. sales this year of the highly profitable big trucks have helped offset lagging passenger car sales. But it is not clear how much of the truck demand is linked directly to ample factory incentives and dealer discounts, or how far sales might decline without those subsidies. A Reuters survey of Ford, General Motors Co's Chevrolet and Fiat Chrysler Automobiles's Ram truck dealers across the United States indicates stores are offering deep discounts the country's bestselling full-size pickup trucks. "The walls are not crashing down on full-size trucks," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions in Chester Springs, Pennsylvania. Detroit-based automakers want to keep cranking out their high-margin trucks, he added, and "giving up a little of the profit is the cheapest way to do it." Stores are offering discounts of up to $12,000 on the 2018 Ford F-150, which remains the best-selling vehicle in the country, recording more than 80,000 sales in May. Discounts run up to $13,000 on the 2018 Chevrolet Silverado and as high as $16,000 on the Ram 1500. Average transaction prices for full-size pick-ups range from around $42,000 to $45,000, industry analysts and automakers say. All three companies are spending furiously - GM and Fiat Chrysler to help sell off carryover 2018 trucks to prepare for redesigned 2019 models, and Ford to sustain its long-held sales crown. A supplier fire that temporarily shut down production of the F-150 last month "changed the game," said Jeff Schuster, senior vice president of forecasting at LMC Automotive in Troy, Michigan said. The supply halt nudged Ford's crosstown rivals "to ratchet up incentives on the current models to go after weakness at Ford," he said. Deals advertised on the companies' official websites range from rebates and low-interest loans to ultra-cheap lease rates, but they are not telling the whole story. Ford, for instance, advertises a $2,000 rebate and a $500 financing credit on sales of certain F-150 models. But James Collins Ford in Louisville, Kentucky, is offering discounts of up to $12,215 on the 2018 F-150 XLT SuperCrew 4x4. The price cuts are even steeper at a number of GM and Fiat Chrysler dealers. Quirk Chevrolet is selling the 2018 Silverado 1500 Double Cab at $13,000 off sticker.

The 2021 F-150 elevates Ford's bed game

The new 2021 Ford F-150 is ushering in a new era of pickup capability, but there's more to it than the introduction of the PowerBoost hybrid. While that new powertrain is certainly the truck's headlining element, the supporting electrical architecture enables a level of utility that hasn't been offered in past consumer half-tons. The true party trick is Ford's new "Pro Power Onboard" feature, which is essentially a built-in generator that provides juice for the 2021 F-150's rather robust in-bed power station. This system is available even on gasoline-engine models, but its utility is maximized with the electrified powertrain. ICE models equipped with the option max out at 2.0 kilowatts, while the PowerBoost hybrid can be had with either a 2.4- or a whopping 7.2-kilowatt inverter.  The idea here is that the F-150 can essentially stand in for a high-output portable generator. In a worksite example provided by Ford, a PowerBoost model with the 7.2-kW upgrade and a single tank of fuel could provide 32 hours of power for an 1,800-watt compound miter saw, a 1,000W circular saw, a 1,200W battery charger, a 1,200W hammer drill, and a 1,000W air compressor with hundreds of watts to spare for lighting and other accessories. But even without the Pro Power Onboard option, Ford's new bed setup enables more versatility than in previous models. The new Tailgate Work Surface option adds a flat work area with integrated rulers, recesses for pencils or small tools, and even a stand for a personal device.  Ford is neither the first to offer an auxiliary power outlet in a half-ton pickup bed, nor was Ford the first to introduce a more feature-rich tailgate. GMC's MultiPro tailgate was a major innovation on that front, and while it is geared mostly toward improving the cargo utility of the bed, it can also be customized with 12-volt power and even an accessory speaker system. The Ram 1500 is also offered with both a multi-function tailgate and AC power in the bed, though the latter option is limited to models with the RamBox cargo package.  As half-ton pickups approach levels of towing and hauling capability that begin to blur lines with heavy-duty offerings, it's clear that automakers are looking for ways to differentiate themselves without stepping on their own bigger trucks' toes. These new bed and tailgate innovations may yet be the tip of the iceberg when it comes to full-size pickup versatility. Related Video:    

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs