Matthew is a correspondent at Heatmap. Previously he was an economics reporter at Grid, where he covered macroeconomics and energy, and a business reporter at BuzzFeed News, where he covered finance. He has written for The New York Times, the Guardian, Barron's, and New York Magazine. Read MoreRead More
The Electric Vehicle Revolution Is Still Non-Union
And that’s a problem for the United Auto Workers.
The United Auto Workers’ six-week strike has won large concessions from the Big Three American automakers, including substantial wage hikes.
But in order to win the war over the future of unionized labor in the auto industry, the UAW will need to do something even harder than extracting raises from Ford, Stellantis, and GM: It will have to grow the union by bringing foreign automaker and non-union workforces into the UAW, something it has largely failed to accomplish. Today, it only represents around 15% of the roughly one million autoworkers in the United States.
The UAW leadership had tread a narrow path on electrification. Its president Shawn Fain has said he and the union support it, but the UAW has harshly criticized the Biden administration when subsidies go to non-union battery plants. Conservatives have tried to drive a wedge between the UAW and the Democratic Party by arguing that electrification will lead to American autoworkers being displaced by cars and batteries from overseas.
The UAW is well aware of the risk that electrification poses to its workforce and it made demands during its strike accordingly. The union won an important concession around EVs, easing the way for battery plant workers to be represented by the union, even though the plants are often joint ventures. This means that the UAW’s presence within the Big Three will not be fissured by the electrification of the American auto fleet. And at Stellantis, the UAW even won a commitment to add “over a thousand jobs” at a planned battery plant in Belvidere, Illinois.
But despite decades of trying, the union has failed to organize foreign automakers’ factories in the South or Tesla, let alone startup electric vehicle companies like Rivian. And it’s these automakers and these regions that are seeing big increases in investment thanks to government-encouraged electrification, with subsidies for the purchase of vehicles made in the United States.
The union has dismissed fretting from the Big Three — especially at Ford — that a generous deal could make them uncompetitive compared to foreign and non-union automakers.
“The days of the UAW and Ford being a team to fight other companies are over. We won’t be used in this phony competition. We will always and forever be on the side of working people everywhere. Non-union autoworkers are not the enemy, those are our future union family,” UAW president Shawn Fain in live stream. “We’re going to organize non-union auto companies like we’ve never organized before.”
Any future organizing efforts will be an uphill battle for the UAW, but one that offers large potential gains in membership and influence, especially as the American auto sector electrifies.
The bulk of American EV purchases are from non-union automakers. These automakers are electrifying the fastest, and they’re also perfectly happy to build these vehicles in the United States, taking advantage of the nexus of subsidies and incentives to do so.
About half of the EV market is controlled by Tesla, according to Cox Automotive, while traditional automakers with at least 10% of their sales coming from EVs are all foreign. (Even though Ford sells the second most electric vehicles, it only delivers about one tenth of what Tesla does).
In short, when someone in the U.S. buys an electric crossover or sedan, they are likely buying from a non-union automaker. But when they buy a pickup truck, there’s a good chance it rolled off a line worked by UAW members.
In the U.S., according to Kelly Blue Book, Tesla has sold 494,000 cars in the first nine months of this year. Ford, by contrast, has sold 47,000 electric vehicles so far this year and GM has sold around 56,000 battery electric vehicles. Stellantis doesn’t even sell an all-electric car yet. (It has sold around 98,000 plug-in hybrids this year though.)
During the first seven months of the year, only two of the top 10 battery-electric vehicles in the United States were made by the Big Three, according to a Morgan Stanley report. These were Ford’s Mustang Mach-E and the Chevrolet Bolt.
Another two cars on the list — the Jeep Grand Cherokee 4xe and Wrangler 4xe — are plug-in hybrids made by Stellantis.
But the list was otherwise dominated by models — such as the Tesla Model Y, Rivian R1T, and Hyundai Ioniq 5 — that are made either abroad or in a non-union American factory. Most of those vehicles are nonetheless eligible for some or all of a $7,500 federal subsidy for lease or purchase.
That deviates from what the Biden administration had once hoped. While early drafts of what would become the Inflation Reduction Act restricted tax credits to union-made vehicles, the provisions were stripped out at the insistence of Joe Manchin, the Democratic senator from West Virginia. (Toyota, which is not unionized, operates an engine and transmission plant in his state.)
In other words, the majority of fully electric vehicles sold in America today are not made by UAW members, and nothing about the country’s EV policy per se will force that to change.
And precisely because the U.S. auto industry is already heavily non-union, any burst of new manufacturing will tend to flow to non-union shops, which is largely what’s occurred as the American auto fleet becomes electrified.
Electric Volkswagens roll off the line in Chattanooga, while Tesla churns out cars for the U.S. market in Fremont, California, and Austin, Texas. BMW and Honda are planning battery factories in South Carolina and Ohio, respectively, and Mercedes already has one in Alabama.
In the 10 largest UAW union elections since 2000, the UAW has won six and lost four. Of those losses, three were at foreign automaker factories in the South, including at the Chattanooga Volkswagen plant in 2019, where the union had previously lost a vote in 2014. The UAW’s big recent organizing victories, which grow the size of the union’s membership, have largely been on university campuses, organizing graduate student workers at Harvard, Columbia, and the University of Southern California.