Image:Birmingham Museums Trust on Unsplash The plague, at home learning for children, and a shift in how workers view work has made for a complicated situation in Michigan and Indiana which are important homes to car parts manufacturers. The auxiliary industry supporting the big boys generated 12 billion USD in 2019 online alone.
One of the evergreen themes on the podcast is how employers are going to adjust. Like regulations, huge swings in the economy hurt small companies harder and faster than behemoths because they don't have the working capital to absorb the blows. We suspect poaching of top talent has also occurred because that's what we would do.
That pain is now felt in the increased demand for labor as absenteeism is a problem. "Many suppliers are dealing with absenteeism rates of 10-15%, said Brian Collie, head of Boston Consulting Group’s global auto practice." The response is to increase signing bonuses and wages, some up to $5 an hour, and even overtime. Perhaps they'll roll out a we-actually-work-and-get-dirty version of Silicon Valley's infamous sleep pods for a mid shift nap. Underground?
Unlike the airline parts industry which is experiencing an oversupply issue as fewer planes are flying and fewer hours are logged, people are still driving and buying new cars. Look for the replacement cost of possibly the worst innovation of this century to go way up and profit margins decrease: Nissan's criminal continuously variable transmission that is guaranteed to slip at 100k miles. Yeah, it's personal.