At the stroke of midnight, employees at three plants owned by General Motors, Ford, and Jeep walked off the job. None of those plants make electric vehicles, unless you count the plug-in hybrid Jeep Wrangler. But make no mistake — the strike by the United Auto Workers union, its most aggressive labor actions since the 1930s, plays directly into a larger fight over the battery-driven future of the car industry. And that fight has already gone global; you may have just not noticed it yet.
There are a lot of complicated, interwoven issues driving the UAW’s strike, which will start with those three plants but may include more if negotiations deteriorate. First and foremost is pay and benefits at America’s existing UAW plants. Like everyone who’s not fortunate enough to be in the top tax bracket, the UAW’s workers have been stung by inflation and higher costs of living. What was once a well-defined path to middle-class life has been hammered in the last decade as carmaking jobs got sent to Mexico and China. This, after those auto workers made tremendous concessions to keep their employers afloat during the Great Recession and subsequent auto industry bailouts, only to see some of their top leaders go to prison for taking bribes while also failing to increase their ranks at companies like Nissan and Tesla. They’re pissed, and they have every right to be pissed.
But that’s only part of the challenge here. The other issue that looms over this showdown has to do with electric vehicles. Take the battery plants springing up all over America, spurred in large part by incentives from the Biden Administration’s Inflation Reduction Act. Nowhere does this pro-EV legislation say that the green jobs coming soon have to be union jobs, even if they’re building batteries for tomorrow’s EVs. Meanwhile, EVs generally require far less labor and parts to build than their gasoline-powered counterparts; they’re essentially batteries, bodies, software and an assortment of other components. Engines and transmissions are complicated things, but they’re simply not necessary for what’s coming. It’s often believed that the transition to EVs will mean fewer auto industry jobs, period; that’s actually very hard to gauge, but it’s no stretch to think this transition won’t be easy, seamless, or provide a comparable job for every single worker — including those at the many related companies that supply various parts and components.
But you can probably see where this is going. If you have a good-paying union job making trucks or transmissions for General Motors, what happens to you when they need fewer workers someday to assemble an electric truck — or when complex nine-speed automatic transmissions designed to work with gas engines aren’t needed at all? And if you’re a worker at the GM’s Ultium battery plant in Ohio, why are you making almost half what your counterparts are to build the future of the American auto industry? In other words: Will the electric future of the car business include good jobs for those who build them, or not?
Those who follow the auto industry, or work in it, have been seeing this play out elsewhere for some time now, especially in countries with far stronger labor unions than America generally has. In Europe, Volkswagen has been cutting thousands of jobs for years now as it attempts to shore up money to pay for a costly electric transition (something it’s clearly struggling with.) BMW’s CEO made waves last year for promising not to do the same, but whether he can actually make good on it or not remains to be seen. In Japan, former Toyota president (and current chairman) Akio Toyoda has warned of millions of job losses in that country alone if the industry goes all-electric. The same job-loss fears have led to labor actions in South Korea, too, home of Hyundai Motor Group, one of the most EV-ambitious car companies in the world. Who knows; if these unions team up, who’s to say we won’t see coordinated strikes as part of a global action?
Essentially, versions of this fight are playing out everywhere cars are made, and it’s hard to see an endgame to that no matter where you go. The story is the same everywhere: whatever the future of the auto industry is, it may just not need as many jobs as it has now, and even if it does, a ton of people will get lost in the shuffle.
Adding to all of this is a rising China, which is turning out some seriously impressive EVs that have Europe’s automakers rightfully spooked. (Those cars are kept out of our market by steep tariffs, for now anyway.) On top of being actually good, those cars are much cheaper than the competition. Why? Besides China getting great at building them at scale, there are deeply questionable labor practices, to put it politely, across all of that country’s battery and EV supply chain.
And then there’s the staggering cost involved with these companies’ transition to becoming EV companies, something not all of them will survive. Here in America, if you ask the Big Three automakers, they simply cannot afford to grant the UAW’s pay raise demands. Not as they invest trillions of dollars over the next few decades to transition to an industry driven by batteries and software instead of engines and hardware features. The automakers are dealing with a workforce that feels like it’s been left behind,, the costs involved with pivoting their businesses, and the ever-insatiable demands of shareholders.
It’s a tough spot to be in, but then again, each of the Big Three is led by an executive making at least $20 million per year, so maybe they can figure something out, particularly when they’re raking in record profits.
It’s possible that the battery plants will be key to saving auto industry jobs. Engineering researchers at Carnegie Mellon have found that while fewer auto parts are needed in EVs, battery manufacturing is so complex that the overall labor needs might potentially even out. And it’s true that battery factories are certainly popping up everywhere EVs are sold, not just in America.
But here, there’s an added complication: Most battery factories being built are ventures with companies like LG and SK On, which do not have agreements with the UAW. In other words, there’s no guarantee those will automatically be good-paying union jobs. Granted, the UAW has already scored a small victory on that front. Workers at GM’s LG joint venture battery plant in Ohio plant voted overwhelmingly to join the UAW last December, and as union negotiations went on this year, GM acquiesced and granted them a 25% raise and back pay — though they’d still be paid less than other UAW members. Maybe that will change as negotiations are finalized, but it may also not get fully resolved in this contract process.
Finally, there’s the question of what this strike means for the rest of the industry. It’s entirely possible that if the UAW gets an extremely favorable contract, it will aim its guns at Tesla next, or the Asian and European U.S.-based plants that have eluded unionization for so long. Surely, Honda and Volkswagen’s American workers have concerns about their future too, and Tesla’s workers make $20 an hour less in wages and benefits than their UAW counterparts.
If the UAW can score some major wins here, there’s nothing to say this can’t be the start of something bigger.
IEA