CHICAGOBUSINESS.COM I OCTOBER 9, 2023
Illinois’ EV future rides on the UAW’s next deal The contracts that Ford, GM and Stellantis eventually sign with the union will go a long way toward setting their electric strategy By Kurt Nagl and John Pletz
Joseph Lopez, executive director of the Spanish Coalition for Housing.
I MORTGAGE DESERTS
HOMEOWNERSHIP GETS HARDER Higher interest rates, ‘banking deserts’ compound racial disparities in mortgage lending I PAGE 13
As the United Auto Workers strike continues, Detroit’s three major automakers have more to fear than the immediate financial pain of idle factories, such as Ford’s Torrence Avenue assembly plant. The worry also runs deep for states reliant on the Detroit Three and the drive toward electric vehicles. The deals that Ford, General Motors and Stellantis eventually make with the union will go a long way toward determining their electric futures, according to industry experts. The UAW wants a raise and boost to benefits reflecting record profits they have helped the automakers earn in recent years. The companies want a deal that doesn’t chain them to labor costs that cripple their competitiveness with electric vehicle maker Tesla, transplant automakers and fast-rising EV startups such as Rivian. “This is a defining period for Detroit and the future of the auto industry as we firmly believe that
if GM, Ford, Stellantis accept anything close to the deal on the table the future will be very bleak for the U.S. auto industry,” Dan Ives, managing director at Wedbush Securities, said Sept. 27 in a research note to clients. Obtaining pay raises, ending two-tier wages and restoring
Impact of Chicago Ford plant strike is already spreading PAGE 7 cost-of-living increases are sticking points that spurred the strike. But the overall stakes are much higher than that. The wrong deal could sink the automakers — and as the automotive industry goes, so goes the Rust Belt. That’s why states like Michigan and Illinois within it, many of which have massive down payments on new EV battery plants, are watching the strike play out with their economic futures at the forefront. See EV on Page 23
Loop office woes could hit homeowners’ pocketbooks Plummeting commercial building values threaten to drive up residential property tax bills, a new study shows Chicago homeowners may well end up paying a big price for the deep decline that’s hit the vacancy-filled downtown office market. According to a new analysis prepared exclusively for Crain’s by the Mansueto Institute for Urban Innovation and the Center for Municipal Finance at the University of Chicago, the property
tax bill paid by the average Chicago homeowner could rise hundreds of dollars a year as office tower owners pay less because of the depressed value of their property. Homeowners effectively would pick up a bigger share of the tax load. For instance, if the tax value of downtown office buildings drops 20% — a figure that’s substantially lower than actual reality, according to some industry experts
— the bill for the typical Chicago home would rise from $5,244 to $5,424. If there’s a 40% decline, the average residential bill would go up almost 10%, from $5,244 to $5,723, assuming taxing bodies don’t change their gross levy, the study found. The findings underline the challenge facing Mayor Brandon Johnson, who has vowed to freeze
JOHN R. BOEHM
By Greg Hinz
See OFFICES on Page 20
VOL. 46, NO. 40 l COPYRIGHT 2023 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
GREG HINZ What Brandon Johnson really wants for Chicago in the proposed budget. PAGE 2
TEA TIME Argo Tea has a new owner, and it wants to re-establish cafes in Chicago. PAGE 4