Greetings from London!

A winter of discontent for the car industry is beginning to look ever more likely, especially in Europe, thanks to weak EV demand and rising Chinese competition.

Just in the last week, Stellantis said it will close its Vauxhall van plant in Britain, German supplier Schaeffler said it will close plants in Austria and Britain, and sources told Reuters that French auto supplier Valeo will cut around 1,000 jobs in Europe. Coming on top of recent job cut announcements from Ford and Nissan, the outlook right now isn’t pretty.  

Auto industry executives are now nervously watching to see if America is next once Donald Trump takes office in January. Mexico’s government has warned that the 25% tariff Trump promises on Mexican goods could kill 400,000 U.S. jobs.

That and his threat to axe a $7,500 U.S. EV subsidy could mean pain in particular for No. 1 U.S. automaker General Motors as it is reliant on Mexico and Canada for parts and has bet heavily on EVs.

 Which brings us to today’s Auto File…

This year has not turned out the way Carlos Tavares expected. After a major profit warning at the end of September, the once untouchable CEO of Stellantis had declared he would retire at the end of his contract in early 2026 after fixing the company’s inventory disaster in the United States.

That proved too long for the world’s No. 4 automaker, which abruptly announced Tavares’ resignation on Sunday. Tavares has waxed lyrical often about the Darwinian age the auto industry is in, though perhaps he did not think at the time that it would cost him his own job.

The news of his ouster sparked a fresh sell-off of the company’s shares, as it heralds a period of prolonged uncertainty while the company is led by an executive committee until a new CEO is chosen in the first half of 2025.

In an unusually frank message to employees, Stellantis chairman John Elkann said Tavares and the company’s board had fallen out over what was in the automaker’s best long-term interest.

The new CEO will have to reset Stellantis’ U.S. business, which was its profit driver but where dealers complain that Tavares priced the company’s cars out of the market.

Tavares had insisted that Stellantis’ problems were a purely regional matter, but as my Reuters colleagues Giulio Piovaccari, Alessandro Parodi and Inti Landauro have reported, Stellantis has also lost market share in Europe by raising its prices beyond what customers are willing to pay. You can read about that here.

VW workers: are you ready to rumble? REUTERS/Victoria Waldersee.

As soon as Volkswagen announced back in September that it may have to close plants in Germany to cut costs, the powerful IG Metall union promised that meant a fight.

The union followed through on that promise on Monday, with workers at nine VW car and component plants across Germany holding two-hour strikes, bringing assembly lines to a halt.

Almost 100,000 workers joined those strikes, the union said.

The union has threatened that the strikes could escalate into 24-hour or unlimited stoppages unless a deal is struck in the next round of wage negotiations. This would reduce Volkswagen's output, adding to the impact of declining deliveries and plunging profit.

Volkswagen said it respected the workers' right to strike and had taken steps to ensure a basic level of supplies to minimize the strike's impact.

The union last week proposed measures it said would save 1.5 billion euros ($1.6 billion), including forgoing bonuses for 2025 and 2026, but management has dismissed those as unrealistic.

With both sides digging in, this fight could last quite a while yet.

But perhaps not quite so fast — REUTERS/Phil Noble. 

For much of this year, much of Britain’s car industry has been jumping up and down about the zero emission vehicle (ZEV) mandate put in place by the previous Conservative government, arguing that its targets were impossible to meet and would cost automakers billions.

After a drumbeat of bad news including the closure of Stellantis’ Vauxhall plant and Ford cutting Ford jobs, the current Labour government relented and said it would reconsider the rules.

Unlike the European Union’s CO2 emissions targets, which automakers can hit by selling a mixture of hybrids and EVs, Britain mandated that automakers sell a minimum percentage of fully electric cars or face fines of 15,000 pounds per non-compliant vehicle sold.

EVs have to make up 22% of an automaker's new car sales in 2024, rising to 80% in 2030.

But the industry forecasts EVs will make up only 18.7% of overall sales this year.

Automakers had warned they would have to pay out nearly 6 billion pounds in discounts and compliance costs to meet the 2024 mandate and kept up a steady stream of complaints that eventually the government could not longer ignore.

Elon Musk’s $56 billion compensation package drama was rekindled this week as Delaware judge Chancellor Kathaleen McCormick of the Court of Chancery ruled that Tesla CEO’s is not entitled to receive the payout despite shareholders voting in June to reinstate it.

The ruling follows the judge’s January decision that called the pay package excessive and