Subaru believes it cannot compete with McDonald's $20-per-hour starting salary; hence it has no intention of manufacturing its electric vehicles (EVs) in the United States.
Subaru vs. McDonald's: Employee's Compensation in Indiana
Based on a report by Electrek, since the new reform of federal tax credit indicates a protectionist clause, it requires manufacturers to build EVs in North America to qualify for the $7,500 incentive.
However, the high-priced incentive is insufficient to persuade Subaru to make an investment in the manufacturing of EVs in America. It is even very unexpected to learn the rationale behind the decision.
During the most recent release of the company's financial results on Wednesday, Nov. 2, Subaru CEO Tomomi Nakamura made some remarks about the matter. He confirmed that Subaru is not considering building an electric car plant in the US anytime now because it cannot compete with McDonald's wages.
In his statements published by Electrek, he said that part-time employees at McDonald's in Indiana earn $20 to $25 per hour. This puts the car company in direct competition with the pay their part-time employees are currently getting.
Nakamura explained that if they constructed a new factory in Indiana, it would be difficult to recruit new workers. Note that the costs of labor are going up, as well. "It is quite challenging for us to secure workers for our Indiana plant, including those of suppliers," the CEO stated.
Hourly wages at Subaru Indiana vary anywhere from $17 to more than $48, based on a report by Fox Business. The facility has over 5,900 employees.
Approximately 6,000 people are employed at Subaru's car assembly factory in Indiana. This plant manufactures the Ascent, Impreza, Legacy, and Outback models of automobiles.
A Subaru EV Facility May Open in Japan, But Not in the US
The manufacturer only offers one electric car for purchase: the Subaru Solterra. However, this vehicle was developed in collaboration with Toyota and is fundamentally the same as the bZ4X. Plus, it is not made in America, so it is no longer eligible for federal tax credits.
Regarding the shift toward electric cars, Subaru is seen as a slacker, similar to other Japanese competitors in the industry.
At this time, it only intends to begin its dedicated manufacture of electric vehicles in 2027, when it opens a new facility in Japan. But Nakamura reportedly would only contemplate opening one in the US once wage inflation starts to subside.
Subaru's Production
Fox Business reported that Subaru is not experiencing any challenges in the sale of its other automobiles. Because of the ongoing problems with the supply chain, it is now behind on 48,000 orders, and its dealers only have a 10-day supply of merchandise available.
Within the next six months, according to Nakamura, the output will be back to where it was before the epidemic.
Read Also : Subaru Plans Self-Driving Cars That Can Pilot a Car When Its Data Connection is Lost By 2025
This article is owned by Tech Times
Written by Trisha Kae Andrada
