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Arthur Wheaton on the future of cars, travel and work - Research Matters S2E4

• Cornell University • Season 2 • Episode 4

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In this insightful episode of Research Matters, Arthur Wheaton, director of labor studies in the Cornell University School of Industrial and Labor Relations, dives into the future of cars, travel and work – from tariffs and EV transitions to autonomous vehicles and union impacts.

Packed with practical advice, eye-opening analysis and a glimpse into emerging trends in transportation and labor, this episode is a must-listen for anyone navigating car buying decisions, industry shifts, or the role of technology in our jobs and journeys. Watch here.

Arthur Wheaton:

Unions have been fighting against technology taking over their jobs since the early 1800s. You'll take my hands off the steering wheel when I'm dead. That's about it because we want to drive. That's it.

Laura Reiley:

Welcome to Research Matters, the show where we sit down with Cornell researchers who are tackling real world problems and helping us all make sense of change. I'm your host, Laura Reiley. Today we're talking about the future of work, the future of travel, and maybe even whether you should buy a new car right now. My guest is Arthur Wheaton, director of labor studies in the Industrial and Labor Relations School at Cornell University. He teaches about labor in the auto and aerospace industries, the transition to electric vehicles, supply chain disruption, tariffs, and transportation labor. Arthur, thanks for joining us.

Arthur Wheaton:

My pleasure, thanks for inviting me.

Laura Reiley:

Al right, well, so I know we're going to try to avoid things that are happening right this minute, because when you all are listening to this, we may be somewhere else entirely. But I want to start with tariffs and kind of fundamentally, based on what we know right now, is this a good time to buy a car? What should people do to kind of, you know, bubble wrap themselves at this moment?

Arthur Wheaton:

I would not say that the tariffs would be the determining factor for whether you should buy a car right now, because there's lots of things. The tariffs, come and they go. They've been around for a while. But it is a good time to buy a car because inventories are starting to stack up. So as you have more cars on the lot...

Laura Reiley:

Is this a holiday seasonal thing or is this just a consequence of uncertainty thing?

Arthur Wheaton:

The auto industry has always been cyclical, boom and bust up and down. And right now they had a really big pull ahead for electric vehicles and a lot of people came up to hurry up and buy the vehicles. And now that the incentives are gone, now the cars are starting to pile up on dealership's lots.

Laura Reiley:

Are these the EVs that are piling up or everything?

Arthur Wheaton:

Everything. So you think about the pickup trucks, the SUVs, everybody was in a hurry to get started and now... inventory start piling up and layoffs start happening and things start slowing down in our economy, then you have more inventory. So you're looking for days of inventory and it can be a good time to buy.

Laura Reiley:

OK, but there's still the 25% tariffs, right, with China. And then the offsets. Can you explain, can you unpack that, all of that means, the offsets?

Arthur Wheaton:

It's, it's a mess. So really what happens is there's a 25% tariff on many countries and all of these continually get um revised or updated. So for electric vehicles from China, there's a 100% tariff. That's why you're not — And they're not even sending any here. They say, forget it. Uh, for trucks, there has been a tariff since the early 1970 on pickup trucks, called the chicken tax. So there's a 25% tariff on all imported pickup trucks.

Laura Reiley:

Are there a lot of imported pickup trucks? Because I think of that as something more domestically produced.

Arthur Wheaton:

Because of the 25% tariff. It slowed them down. So that's why when you say do tariffs work, the answer is they have worked for that particular vehicle. And now there's a 25% tariff on pretty much all vehicles everywhere with individual deals by country that the current administration has negotiated sweetheart deals. And if something gets said he doesn't like, they just added an additional 10% from Canada, because you ran a commercial I didn't like. So everything goes back and forth. But what you're talking about, the offsets, if the vehicles are coming from Mexico and Canada, last time Trump was in office, he negotiated the U.S., Mexico, Canada trade agreement, the replacement for NAFTA, NAFTA 2.0 that was there. And one of the conditions for the USMCA was you had to have a certain percentage of the vehicle domestic content. So you have to have some U.S. parts. So if you have parts that are made in the U.S., then there's a discount and we'll rebate you back from that 25% tariff. So it goes back and forth. And most of the vehicles that are from like GM, Ford, or what's now called Stellantis, which used to be Chrysler, will have a significant amount of U.S. domestic content. So it will send an engine or transmission there or some parts there so they can get rebates and those rebate amounts have continued to change. So nobody really knows what they are and they change all the time. But basically what you're talking about is the offset or a discount is that if you're not getting the 25% tariff on the parts that were sent from the US to Mexico or Canada to be assembled.

Laura Reiley:

Um, so I know U.S. carmakers have projected like a $1 billion loss for this year as a result of tariffs. Are we likely to see any significant changes either in policy or in pricing going into 2026?

Arthur Wheaton:

The biggest answer would be it depends on what the Supreme Court decides as they're taking the tariffs to see whether they're even constitutional or not constitutional, whether they're going to have them or not. But I think for autos, the tariffs are pretty much going to stay until they negotiate something different because they're under yet a different style or legal type of tariff. So under a specific sector, then they can be exempt. But the answer is: Everything keeps changing and for the most part you're gonna plan on having at least some tariffs in place. But the loss to the automakers is not that big of a deal. It sounds like a billion dollars is a lot.

Laura Reiley:

For me that's a lot.

Arthur Wheaton:

That's a lot of money for me and what Cornell pays me. That's a lot but for the

Laura Reiley:

That's under the sofa cushion kind of money.

Arthur Wheaton:

And the reason I say that is in in exchange for some of this to offset that there's now no longer any of the EPA requirements that they've eliminated for your fuel economy and there's no longer some of the other things where they were trying to give incentives to have the auto industry produce fuel efficient small cars. They take all that away and they say great we can make big trucks and big SUVs and make more profit. So while we may lose some for the tariffs we feel that we can be more profitable and not having to switch to electric vehicles, which was killing them in terms of losing money.

Laura Reiley:

Okay, well that brings us to kind of there was a huge buy-in, you know, kind of an arms race over batteries and it seems like maybe the pendulum is swinging back towards internal combustion. From a consumer standpoint, what's safe to buy right now? I mean, are you better off with a hybrid? Is there going to be the infrastructure for EV that we kind of anticipated would be ramping up? Like where are you right now in terms of which side to go for?

Arthur Wheaton:

And the answer is it always depends. So if you have a garage and you have the ability to install a high speed charging for your electric vehicle, electric vehicles can be really fine. If you have a longer commute, so I'll only drive three or 400 miles today. So the electric vehicle is not good for me because it takes longer to charge and you got to find the infrastructure. But if you're in a place where you have a garage, you have high speed charging, then it can be a great deal to have an electric vehicle if you're not driving hundreds of miles between charges. So it can be great. If you're in a place where you don't have a garage, you're parking outside, and you don't have access to a high-speed charger somewhere, it can take you eight or 10 hours to plug it in on a regular electric plug to charge them to get your power up. And if you're going someplace, has been a lot of the infrastructure has been out of order.

Laura Reiley:

Yeah.

Arthur Wheaton:

So they used to steal catalytic converters. Now they just cut off the charging connectors because they have copper in them. So they just go and say, instead of having to crawl into your car and get dirty, I just take a big lopper and I cut off the charging cables and just throw that in the car and sell it for scrap.

Laura Reiley:

Interesting, okay. All right, well so, you we've heard for years that EV was kind of from a, if you want to be a kind of pro-social person, that that's the direction to go. But what's your perspective on the labor element of it? I mean, what are, obviously there's a huge pivot in terms of labor required for EV versus internal combustion. How is that gonna change uh the US auto workers if we do continue towards EV?

Arthur Wheaton:

It, EVs are generally thought of as being easier to build with less parts and less maintenance requirements. So it's about 25% from what I'm told, less required people or hours to build them. Cause it doesn't have all the fluids. You're not trying to tweak the engine. You're not trying to have all the other parts that go along with it. It has basically the motor and the battery. and there's not a lot of the mufflers and catalytic converters and all of that fuel inject, none of that stuff happens. So it's easier to build, less complex, but the batteries are heavy and they're expensive. So it goes back and forth. You want to have wherever your batteries are coming from, be close to where you're building the vehicles because the battery for one of the F-150 Lightnings, just the battery weighs more than, like, a Honda Civic.

Laura Reiley:

Wow. Okay.

Arthur Wheaton:

So it's not just a little tiny thing you put in your hood.

Laura Reiley:

So something I know so little about, but it's in the news all the time, is the rare earths and, kind of, China holding the purse strings on the rare earths. And I know that has implications for batteries and for auto batteries specifically. Is there a risk associated with the US going all in or to a greater degree all in on EV given China's role in the rare earth uh market?

Arthur Wheaton:

Yeah, there are some severe risks and that's why you're seeing a lot of the companies cutting back and they're saying, you know what, maybe we're not going to do that. Cadillac had announced that they were going to be all EV by, I think it was 2030. They didn't plan on having any internal combustion engines. That's gone. Some of the states are saying, maybe we don't need to go there. Some countries in Europe have said, you know what, maybe we're not going to have to do that. And there's a lot of the rare earth metals, especially used for magnets for high power or high strength magnets, there's a lot of those. The lithium is not, it's not easy to refine to get usable, and the nickel, a lot of the nickel for the high quality nickel was coming from Ukraine. So there's a lot of instability in trying to get those types of resources. And China has about 80 or 90% control over the rare earth metals in the United States or in the world for refining. It's not just the rare earth metals they can't find, it's the ability to process.

Laura Reiley:

All right, so I know that Honda, Hyundai, Nissan, Mercedes, BMW, and I think there were a couple others are, are at least making noise that they're shifting some production to the US just to evade tariffs or to just kind of solidify, you know, kind of a domestic presence. Is that all internal combustion? Like what are they doing, do you know?

Arthur Wheaton:

It's across the board. Hyundai has a big plant that they build and they actually sent ICE in there to arrest a whole bunch of people there that were working.

Laura Reiley:

I think I saw that.

Arthur Wheaton:

That kind of slowed down their ambition for what was going on and they were building electric vehicles. Mercedes-Benz was trying to bring more electric and I think they were trying to bring some electrics to Chattanooga, Tennessee, for Volkswagen. They were building more of the electric. So it depends on where you're at. But Henry Ford, back early 1920s, said you have to build them where you sell them. So, we've had international production, at least of Ford, since about 1919 or 1918. So you build them where you can sell them. So it's not that unusual that as the foreign automakers can increase market share and sell more vehicles, it makes sense. And if you can avoid a big tariff at the same time, well, that makes sense. And if you can get political brownie points by saying, hey, we're coming here with new jobs, well, that can be good, too.

Laura Reiley:

Yeah. All right. Total tangent, but I want you to tell me if this is just an apocryphal tale. I heard that the first, speaking of Henry Ford, that the first auto recall was for the Model T or something like that because they had stuffed the front seat with Spanish moss and that they were like chiggers in the Spanish moss that were biting people on the butt. Is that...you ever heard that?

Arthur Wheaton:

I have not heard that story, but I do know that one of the things Henry Ford was working on was working on making things out of soybeans for the car interiors. So they were using, you know, natural materials for trying to do that. The Model T did have a problem that it couldn't go up a hill. You had to back up a hill because it had gravity flow for there. It didn't have like a powered fuel pump. So there was issues if you wanted to go up a hill in a Model T.

Laura Reiley:

All right, I want to pivot from the road, the open road, to the air a little bit. So I know you've done a lot of work on unions and on, you know, air transportation, where the moment that we're recording this, uh it's a hot mess out there. So I think maybe we should, it'll probably be resolved by the time this airs. Let's all hope. But what do you see? I mean, I've... I've listened to podcasts about how air traffic controllers, we aren't training them fast enough to replace retirement. Like what's the future of air traffic control look like? And from a labor perspective and from the big airline perspective.

Arthur Wheaton:

It's not as much of a news story as you would think that when Ronald Reagan was president, so it's been a while, there was an air traffic controller strike because they were complaining that it was an extremely stressful job. They didn't have enough and their equipment was antiquated and they went out on strike. And then famously for labor relations, Ronald Reagan, former president of the Screen Actors Guild said, nope, you're all fired and you can never get a job in the federal government again. So that kind of set back labor relations for that philosophy. If you go to today, as we're taping, they're having some air traffic controllers calling in sick because they're being forced to work, you know, 16, 12 to 16 hours a day, six days a week, with no pay for deferred pay for what's going on. And their complaints are, it's a very stressful job. We're using antiquated equipment. There's not enough of us. And they have found that at the time we're taping, they've seen retirements increase 400%. So four to one. So what used to be able to retire, they're all saying, you know what, I don't need this. There was even a Hollywood movie called Pushing Tin that was quite good with Billy Bob Thornton and John Cusack. And it was all about. And this is in the early 90s, probably, and it was all about the stress of air traffic controllers and how much it's going. So it's not new for us to have these problems. And if you can't have enough people directing the traffic or putting people safely where they want, things get backed up. It only takes one small ripple at one airport and it's where did the plane come from? Where is it going? Where is it going to next? And it just backs up everything.

Laura Reiley:

It's like when we go to the dentist and that person before us is late and it snowballs and put that across all the different airports. All right. So you have done a lot of work on on labor unions and kind of their effect on different industries. And one thing I'm curious about is uh truckers seem to be really pushing back against uh autonomous vehicles. What kind of role do auto uh unions have in kind of new technology like that.

Arthur Wheaton:

Well, for the truckers, they're probably going to be represented by the Teamsters that are there. And one of the issues is the trucks are heavy. And if a truck hits a car, it's not a good experience.

Laura Reiley:

You're talking about autonomous trucks.

Arthur Wheaton:

I'm talking about any truck.

Laura Reiley:

Not Waymo but like...

Arthur Wheaton:

Any truck. So you're talking about trucks. So for the unions, it would be over the trucks. If a truck hits a car, it's not pleasant because there's a huge mass hitting a small vehicle. It's not good. A lot of people have more faith in the people driving than they do for the autonomous vehicles. There's a lot of issues with autonomous vehicles in that it takes an incredible amount of data to be able to have them run smoothly. And there's always issues for the weather and the cameras and the and what's happening. So a lot of the unions are not in favor of having autonomous vehicles from a safety perspective and from a labor perspective. If you can have someone who's a professional and paid to do that, it would be better. Technology has been taking over a lot of jobs and unions have been fighting against technology taking over their jobs since the early 1800s.

Laura Reiley:

How about things like Waymo or kind of driverless taxi services or whatever? Is there pushback from labor unions for that, as well?

Arthur Wheaton:

There's huge pushback for that in some of the major cities where you would have the taxi drivers that are unionized or the delivery drivers that are unionized and um having the autonomous vehicles has some disadvantages for what you're trying to do. You can't really get the package out of the car and put it in the mailbox or put it on the porch as easily with an autonomous vehicle. But if you're just doing ride sharing back and forth, they've had people in California where they took the orange construction cones and they stuck it on top of the Waymo vehicle and it blocked their lidar. So it would just sit there and spin so that it wouldn't be able to do anything. In other places, if you don't have at a four way stop sign, a lot of people will do what they refer to as a California stop. You roll, you get up close to the stop sign, slow down, and then you go through it. That's the terminology that I've heard it referred to as, and then the autonomous vehicles will stop. So everybody else keeps running the stop signs and they just sit there. So you can be there for a long time.

Laura Reiley:

Interesting.

Arthur Wheaton:

We're not quite there yet. We're getting closer to that, but I don't think we're quite there to turn over our keys for doing that. And the US is kind of built on, you'll take my steering, you know, my hands off the steering wheel when I'm dead. That's about it because we want to drive.

Laura Reiley:

It's the American way, sure. All right, so we've talked a lot about headaches, you know, kind of automotive uh air traffic. What are the kinds of things that kind of are exciting for you as you look to the future?

Arthur Wheaton:

I think you're seeing cars in general in the auto industry get better. I think you're seeing some nice looking styles, some good options and choices. It's not the Ford Model T. You can have it any color as long as it's black because the black paint dried faster. Now you can get it in whatever color you want and whatever style you want in a SUV. And as you get to electric vehicles, they're having the ability to say well today I want a convertible so I'm gonna go drive in and switch it to a convertible. When it gets close to winter I'm gonna switch switch it and they just keep the same chassis and you can just change the change what it is.

Laura Reiley:

Is like AI assisted or are there kind uh of bespoke options? Is that something that uh is enabled by new technology, robotics and AI integration?

Arthur Wheaton:

Yeah, it can be that. And one of the keys for the autonomous vehicles or the electric vehicles or any of new technologies, you want it to be able to be adaptable so that you can just, there's a new electric vehicle called the Slate that's coming out. But it's designed where you pick it. And you can just pick the modules and just put it on there anytime you want. There are other countries.

Laura Reiley:

From the website of the car company?

Arthur Wheaton:

Yeah. Let's build it and mix and match and put this part in that part. Do you want a trunk or no trunk? Do you want a pickup back? What do you want? You're getting a lot more choices and styles. If you look on the road today, there's a lot of variation. It's not just small cars. There's a lot to choose from. And I think that's kind of nice. And I think the overall, we may not like all of the recalls and things that are happening, but most of those are like a software update or I'm not happy about the radio or Apple Car Play working well. It's not really the engine or transmission. I'm stuck on the side of the road. We tend to complain about other things. The more new technology you put in the more gliches you can have and the more reasons for recalls.

Laura Reiley:

I want to shift gears a teeny bit. I know that you've done a lot of work on uh preparing groups for collective bargaining and at the core of that in a lot of ways is conflict resolution and I think that's something all of the listeners probably struggle with in their own lives. So what are the kind of first, you know, big bullet point tips that you give groups or people when they're talking about uh conflict negotiation?

Arthur Wheaton:

Well, in terms of negotiations, the big thing I try to tell everyone is you never, ever get everything you want at the bargaining table. Ever. So you will get some stuff they want. They will get some stuff they want. And if I'm teaching primarily a union audience, I tell them your job is to find a way to solve management's problems in a way that works for you, so that if you can help make those decisions and help make the changes you need, then the management will see you add value, and then they might be more willing to pay attention. But the biggest key for bargaining is you have to have some sort of leverage. You have to be able to say we have more power or more leverage in this situation where we're worth the extra money. So the leverage can be we can withhold our work if it's a strike or something else, or the leverage could be you really can't figure out this new technology without us. You really need us to be able to put this in, and you need us to be showing up to work and doing this every day. So for bargaining, it's trying to focus on what is it you really need, not the stuff you want. You never get everything you want at the bargaining table, but focus on what you really need, and trying to find ways to make, you know, decisions or make changes that will help both the union and management to have a better workplace, and that's really the goal. So you want to be able to get more money for your workers and better benefits. Why? Because it lowers your turnover rate, it can increase your productivity and it can give you better things.

Laura Reiley:

So should you have a good poker face or should you uh kind of be transparent in the things that you need versus the things that you want?

Arthur Wheaton:

Like everything in life, it depends. But I would say there's a lot to be said for having a good poker face, and if you give me a good offer I don't want to say, "Wow, that's wonderful! Thanks! That's great!" If you think you can get more, they can give this much, how much more could you get? For example, in the most recent UAW negotiations, Ford and General Motors kept saying, "You got every penny from us. You got every penny from us. We can't give you any more." "That's it, that's it. The next." The next day, "Oh, we got more!" Or they'd say, "You're going to run us out of business. This is never going to happen." And so within that same week, General Motors goes to their board of directors and they said how did negotiations go and they say, "Oh, they went great. Yeah, no big problems. No issues. We'll still be profitable and we'll do it. "

Laura Reiley:

It's an acting job, so.

Arthur Wheaton:

Acting job or just trying to do the best — by law the corporations have to do what is best for their stockholders, and you got to be tough to try to do that And for the unions, you're there to represent all the members, so you have to be tough, as well, so you can get the best. And, usually, in negotiations, it's either collective bargaining or individual begging. So if you have a union negotiating for you, you have a better chance of getting something in return. But in the US labor law, there's nothing in the US labor law that says management ever has to say yes. So you got over 500 Starbucks that have a union, and they have exactly zero collective bargaining agreements. And the first ones were Buffalo, where I'm from, were the first three Starbucks that were unionized. It's been over three years and they still don't have a contract. So you have a union, you have the ability to negotiate. But if you don't have leverage and you can't force them, it's harder to get the company to say yes.

Laura Reiley:

Sure, yeah, makes sense. All right, well, so I want to ask you a book recommendation, but I also thought for listeners, if you have any tips on resources for deciding on a car, either a new or used car, like what's the best resource to use right now or set of resources to make a decision like that?

Arthur Wheaton:

There's a lot of websites for going on for what you want. So there's Cars.com and you can go to the individual. And the first thing is, is find out what car, gets your attention. The average cost of a car new car today is over $50,000. If you're going to drop 50 grand, I hope you like it. So just because I'm an expert and I told you to buy this one. If you're dropping $50,000 on it, get the one that you like, the color you like, the style you like, what's there just because that Lexus may be higher quality, if you like the look of a Cadillac or a Lincoln or, you know, Mercedes Benz, go with the one you like and then find out, okay...

Laura Reiley:

Sex appeal matters, but you know.

Arthur Wheaton:

It does. Why would you want to spend, you know, $500 on an ugly dress or an ugly suit or an ugly thing if you're not going to enjoy being in it, you want something that reflects you and your attitude and your perspective. And it's a lot of money these days. So I would say there's JD, there's quite a few different, JD Powers has the quality studies you can do to see what's under their eye. I like just looking at the mainstream magazines, whether it's Motor Trend and Car and Driver, and just start saying, okay, what's the — if I know I want a small SUV, what are the best and find the rankings. And then you look at them and then you go put your butt in the seat and test drive one. And your best, your best option for negotiating a price is to have a what they refer to as a best alternative to a negotiated agreement. Have a backup plan. So you go, they're trying to say, I'm going to buy the Ford, but if you can't get the Ford, well, I've looked at the Chevy and I've looked at the BMW and they're not too bad. So if you can't get me a good price on this one, I have options. If you go in there saying, I love that car, that's the one I want, then it's harder to get it.

Laura Reiley:

Should you do it good cop, bad cop? The way, you always bring a buddy and decide who's going to be the hard nose?

Arthur Wheaton:

I don't think you need a necessarily a buddy or a hard nose, but you have to be, you have to be willing to walk away. And if you go there saying, that's the only car for me, then they say, great, they can sell it to you. And the worst strategy is to say, I only have this much per month because they just add more months. So yeah, instead of getting a four year loan, you'll say, okay, well, if we give you a 84 month loan, so seven years, then you can afford the payment. See, we can do that. So now you can afford more. So you want to have — you want to have choices and you want to have a backup plan. So you don't want to necessarily just take the the first offer you get from the dealerships, Almost every single car dealership in the United States, if it was operating as a union and management would be committing unfair labor practices, that it's really set against you. Because under the National Labor Relations Act, you have to have someone who's able to make a decision at the bargaining table. So if you're going to bargain something, you want to bargain with somebody who actually has permission to say yes. And when you go to a car dealership, they sit you there for 2 or 3 hours

Laura Reiley:

Let me talk to my manager I'll be right back.

Arthur Wheaton:

And they say, I can't do it. I got to talk to my manager that you're not talking with someone. They're not bargaining in good faith.

Laura Reiley:

Can they really not make the decision or is that just the dance?

Arthur Wheaton:

It's the dance. But a lot of times they can't that they can't really make that decision because they want it's a 50 $50,000 average price for that vehicle. And the management doesn't want the salesperson making sweetheart deals because they get felt sorry for you, or they thought they could do a favor. It's a business. So they send the business manager. But the business manager isn't at the table when you negotiate. You're negotiating with a salesperson. So then it's like, let me ask mom or dad, and then maybe I can give this to you. And if you're in a union management environment that's illegal, you can't do it.

Laura Reiley:

Okay. I'll remember that next time I'm in that situation. Well, I think that is all the time we have. This has been super fun and personally helpful. It's great. Arthur Wheaton, thank you. And you helped us see how big structural shifts in auto trade and transport are not just industry stories. They affect the price tags we see, the jobs we hold, the trips we take, and our everyday lives. I'm Laura Reiley. Thanks for listening to Research Matters, where we talk with Cornell researchers working to make real world problems better. If you like this episode, subscribe wherever you get your podcasts and share it with a friend who loves facts as much as you do. Thank you.