By Mike Cioffi

With Donald Trump set to return for a second term, the tire industry will likely face significant shifts in labor laws, immigration enforcement, and workforce management. Stricter immigration policies to potential changes in wage and labor laws could be headed our way. In this article, I’ll break down what these shifts might mean for the tire industry and outline practical steps you can take to stay ahead of the game. Of course everything I am writing is based on empirical research on what I could find given the day I am writing this in early December 2024.

1: Immigration Enforcement—A Return to Strict Policies

Trump has signaled a return to more rigorous immigration enforcement, including heightened scrutiny of hiring practices and more frequent audits. This could increase pressure on tire industry employers who rely on immigrant labor in manufacturing and distribution roles.

What This Means for the Tire Industry:

• Potential fines and penalties for non-compliance with I-9 and E-Verify requirements.

• Increased audits and inspections could disrupt hiring practices, especially in regions where immigrant workers are essential.

Actionable Takeaway:

Ensure that all employees' work eligibility is verified through E-Verify and conduct an internal audit of your workforce to ensure compliance with I-9 documentation.

2: Labor Condition Applications (LCA) and Wage Requirements

Changes in labor visa programs, such as stricter prevailing wage requirements for H-1B visa holders, could pose a challenge for the tire industry. Roles requiring specialized skills—such as engineers and technical experts—may see higher wage thresholds that could complicate foreign talent recruitment.

What This Means for the Tire Industry:

• Higher wages for specialized roles could make it more difficult to attract skilled workers from abroad.

• The cost of employing foreign talent could increase, impacting budgets and hiring strategies.

Actionable Takeaway:

Prepare for potential wage increases in technical positions and revisit your recruitment strategies to ensure your compensation packages align with new wage requirements.

3: Wage and Hour Laws—Potential Changes Ahead

One of the key areas to watch is wage and hour laws. Trump has expressed support for increasing the federal minimum wage, but only in ways that do not hurt small businesses. His administration may push for adjustments in overtime rules, potentially altering the scope of who qualifies for overtime pay, and making tax changes regarding tips.

What This Means for the Tire Industry:

• Changes in overtime rules could impact operational costs, particularly in retail and distribution settings where hourly workers are common.

• Adjustments to minimum wage laws or tip tax regulations may affect how businesses structure compensation, especially for service workers in tire sales or maintenance.

Actionable Takeaway:

Stay informed about any proposed changes to wage and hour laws, and evaluate how these changes could affect your workforce's compensation structure, including overtime pay, minimum wage compliance, and tip tax implications.

4: Union and Worker Rights—A Push for Right-to-Work Laws

Trump has repeatedly expressed his support for right-to-work laws, which allow workers to opt out of union membership and dues. His administration is likely to continue to push for policies that weaken union influence, particularly through appointments to the National Labor Relations Board (NLRB). This could lead to a reversal of labor rulings from the Biden administration that favored unionization efforts.

What This Means for the Tire Industry:

• Changes in union policies could affect employee relations, especially if your workforce has unionized or is in the process of organizing.

• A shift in NLRB rulings could influence the ability of workers to unionize, affecting negotiations over wages, benefits, and working conditions.

Actionable Takeaway:

Be prepared for changes in union-related policies, including the potential for a shift in how union elections are conducted or how collective bargaining agreements are negotiated. Stay ahead by building strong communication channels with employees and fostering positive workplace culture.

5: Paid Leave and Benefits—Impact on Employee Retention

Trump's position on paid family leave and healthcare could have a significant impact on employee retention in the tire industry. During his first term, he extended 12-week paid family leave to federal employees, but it remains unclear whether he will continue to push for such measures in the private sector.

What This Means for the Tire Industry:

• The possibility of changes in paid leave policies could impact employee morale and retention, particularly in sectors like manufacturing, where high turnover is common.

• Companies may need to adjust their benefits packages to stay competitive if federal benefits policies shift or change.

Actionable Takeaway:

Consider revising your benefits strategy to align with potential changes in family leave policies and healthcare requirements. Offering robust benefits packages can help reduce turnover and attract top talent, especially in a competitive labor market.

6: Tariffs on EVs and Auto Components—Impact on U.S. Manufacturing and Employment

Trump's protectionist policies, including tariffs on Chinese-made EVs and auto parts, can significantly shape the U.S. tire and automotive industries. It is expected that the new administration will intensify efforts to prioritize domestic production, reduce reliance on foreign imports, and strengthen manufacturing through tax incentives.

What This Means for the Tire and Automotive Industry:

• Increased tariffs could encourage domestic sourcing of parts, but the higher costs could challenge automakers and tire dealers.

• Deregulation efforts could reduce administrative costs, including inspections and OSHA requirements, potentially lowering operational burdens for manufacturers.

• The Right to Repair and a focus on sourcing parts from low-cost regions, including Mexico, may drive changes in parts production.

• A renewed focus on infrastructure investment, including highways, could drive growth in transportation-related sectors.

Actionable Takeaway:

Prepare for shifts in sourcing strategies by increasing domestic production and exploring tax-saving opportunities. Stay ahead of deregulation efforts and policy changes like Right to Repair and EV incentives. Diversify suppliers to manage the impact of tariffs while balancing cost and compliance.

8: Non-Compete and Environmental Policies—Impact on U.S. Business Operations

Trump's stance on non-compete agreements, along with environmental regulations, will have far-reaching implications for businesses. His previous administration worked to roll back regulations, including environmental rules for greenhouse gases and safety standards, and was supportive of policies that reduced barriers for businesses.

What This Means for the Automotive and Tire Industries:

• An increased focus on business freedom could lead to relaxed restrictions on non-compete clauses, allowing for greater employee mobility.

• Further deregulation, particularly on emissions and safety standards, may reduce operational burdens but could also affect the long-term sustainability and public image of companies.

Actionable Takeaway:

Evaluate non-compete clauses in light of potential changes to business mobility laws. Ensure compliance with any updated environmental standards while also weighing the cost benefits of deregulation to balance sustainability with operational efficiency.

Conclusion

The tire industry is entering a period of potential regulatory changes that could have a significant impact on workforce strategies. By preparing for these changes now, businesses can ensure they remain compliant, competitive, and resilient in the face of new challenges. The key to success under a second Trump administration will be proactive planning and adaptability to shifting labor laws and workforce dynamics.

Mike Cioffi is the founder of Tire Talent, a boutique recruiting agency dedicated to our industry. You can reach him directly: [email protected] if you have any questions about this article.