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Welcome to Wednesday as we are talking about the return of the Fain to the headlines in response to the Trump-Musk live conversation on X. We also talk about the tightening of the auto credit belt, as well as a shifting consumer sentiment to the use of ‘AI’ in products. 

• ​​The UAW has filed federal labor charges against former President Donald Trump and Tesla CEO Elon Musk, accusing them of implied threatening actions against striking workers.
  • Trump suggested that employers could handle striking workers by simply firing them all. He described a scenario where, in response to a strike, the employer would tell the workers, "That’s OK, you’re all gone," implying that all striking workers would be dismissed.
  • Musk, while not directly quoted in the charges, has a history of anti-union sentiments, further fueling the union's concerns.
  • Under federal law, employees conducting lawful strikes for economic reasons, such as higher wages, can’t be discharged by their employers.
  • The charges aim to highlight the UAW’s stance that Trump and Musk oppose workers' rights, and are unlikely to have any practical impact.
  • UAW President Shawn Fain stated, "When we say Trump stands against everything our union stands for, this is what we mean."

• We love our daily email and today it highlighted some recent Cox Auto Data: Auto credit availability has been tightening for four consecutive months, creating challenges for dealers as customers find it increasingly difficult to secure loans, especially for used vehicles.
  • The Dealertrack Credit Availability Index dropped to 92.9 in July, down 1.0% from June and 1.5% year-over-year, and used car loans through franchised dealers are seeing the most significant tightening.
  • Banks are leading the way in tightening credit, marking the fifth consecutive month of stricter lending.
  • The spread between these auto loan interest rates and other investments has widened, making loans less appealing to customers. Additionally, more buyers are dealing with negative equity, adding further risk for lenders.

• A recent study reveals that the term "artificial intelligence" in marketing is increasingly a red flag for consumers, suggesting a growing skepticism towards AI-powered products.
  • The study surveyed 1,000 U.S. adults, finding that AI mentions lowered product appeal.
  • Emotional trust drops significantly when AI is referenced, reducing purchase intentions.
  • AI in high-risk purchases like electronics or medical devices exacerbates safety concerns.
  • Forrester’s December 2023 survey shows a split in consumer sentiment, with only 29% trusting GenAI and 73% demanding transparency when companies use AI.
  • “When AI is mentioned, it t

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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