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The United Auto Workers’ contract with the Big Three automakers is almost up. Its replacement is going to be hotly contested.
One of the dirty little secrets of the electric vehicle boom is that many of its workers are paid less and enjoy fewer benefits than those who manufacture the nation’s gas guzzlers. But if unions have their way, that won’t be the case for long.
On September 14, the United Auto Workers' contract with the Big Three automakers — GM, Ford, and Stellantis — will expire. Negotiations for a new agreement are set to begin in July, and electric vehicle jobs will be a defining issue with potential to put the 380,000-member union on strike this fall. The union’s leadership team held a town hall late last month where they laid out the stakes.
“To be clear, I and the UAW leadership support this transition, but it must be a just transition,” said vice president of the union Mike Booth. “These must not only be union jobs, but they must be jobs that maintain the wages, benefits, and safety standards that generations of UAW members have fought for.”
So far, the industry has been trending in the opposite direction. Booth pointed to the Ultium battery cell manufacturing plant in Lordstown, Ohio, which is a joint venture between GM and LG. Workers there currently start at $16.50 per hour, and can work their way up to $20 per hour after seven years. That’s well below the $32 per hour that union workers made at a nearby GM assembly plant that closed in 2019. “Meanwhile the company is receiving billions in government subsidies. This is not a just transition, and this is not an acceptable standard to set,” said Booth.
The Big Three are facing pressure to keep EV costs down amid inflation, materials scarcity, and increasing competition from international automakers — particularly from China. They also must contend with the fact that workers for other preeminent players in the nascent industry — Tesla and Rivian — aren’t unionized, although movements are cropping up to change that. While Elon Musk argues Tesla pays its workers more than their unionized counterparts, his company has been accused of serious labor violations and the National Labor Relations Board has ruled it illegally fired a worker involved in labor organizing.
The upcoming negotiations are a bellwether for many on the left's belief that the transition to clean energy can and should “create millions of good, high-wage jobs.” But as Booth’s remark suggests, union members aren’t just frustrated with the automakers, but with Biden. His signature climate policy, the Inflation Reduction Act, has begun fueling the growth of a domestic electric vehicle manufacturing industry with billions of dollars in incentives and little support for organized labor.
According to a database of clean manufacturing announcements maintained by Jack Conness, a policy analyst at the nonprofit Energy Innovation, companies have announced upwards of $70 billion in investments in U.S. battery and electric vehicle manufacturing since the law was passed.
The IRA has been hailed by labor advocates for including wage and apprenticeship requirements for many of its subsidies. But those provisions are geared at construction jobs, not manufacturing jobs. For example, while automakers must pay prevailing wages and hire apprentices to build their battery factories in order to qualify for the full “Advanced Energy Project Credit,” they do not have to make similar commitments to the workers who will actually make the batteries.
The only relevant labor requirements for those workers came in federal guidance on the tax credit for the manufacturing of clean energy parts that was published last month. It noted that the Internal Revenue Service would only consider projects recommended by the Department of Energy. That agency must base its endorsements on a set of criteria that includes having a “clear and appropriately robust plan” to engage with labor unions.
These kinds of provisions, like requiring developers to put their plans for workforce and community engagement in their applications, may help give unions a leg up. David Madland, a senior fellow at the Center for American Progress, a liberal D.C. policy think tank, pointed to the recent unionization of the Blue Bird electric school bus factory in rural Georgia. The company received funding from the EPA that required it to be “committed to remain neutral in any organizing campaign.”
“The Biden administration is doing a lot to ensure the jobs created by industrial policy are good jobs,” Madland told me in an email. “But more work needs to be done.”
Recently-elected insurgent president of the UAW Shawn Fain sent a memo to the union’s 380,000 members in early May warning that the shift to EVs was “at serious risk of becoming a race to the bottom.” He stated that the union would not endorse Biden for re-election until he does more to support labor standards in the transition.
It’s not yet clear whether the transition to EVs will result in a net loss or gain of manufacturing jobs. Industry studies have noted that electric vehicles have fewer parts, and will therefore require fewer workers, than internal combustion engine vehicles. Ford CEO Jim Farley made waves in November when he said the job required 40% less labor, a statistic that echoes a similar warning by the UAW back in 2020
But some researchers and analysts have contested the idea. Carnegie Mellon engineers analyzed production data from leading automotive manufacturers and found that although EVs have fewer parts, their components collectively require more labor-hours than conventional vehicle parts. But the researchers note that despite this, the shift to electric vehicles could still lead to job losses in certain regions depending on where companies choose to locate new battery factories.
While the IRA has seemingly given automakers enough incentives not to move these facilities abroad, many of them are building their plants in southern states where organized labor has always struggled to gain a foothold.
Outside analysts predict the negotiations will break down and lead to a strike. Four years ago, when the union went on strike against GM for 40 days during the last round of negotiations, it cost the company $3.6 billion. Workers lost nearly $1 billion in wages.
UAW leadership began to prepare its members for that possibility during its town hall last month.
“I want to be clear on this, and I know this might sound crazy, but the choice of whether or not we go on strike is up to the Big Three,” said UAW Secretary-Treasurer Margaret Mock. “We are clear about what we want.”
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A conversation with Mary King, a vice president handling venture strategy at Aligned Capital
Today’s conversation is with Mary King, a vice president handling venture strategy at Aligned Capital, which has invested in developers like Summit Ridge and Brightnight. I reached out to Mary as a part of the broader range of conversations I’ve had with industry professionals since it has become clear Republicans in Congress will be taking a chainsaw to the Inflation Reduction Act. I wanted to ask her about investment philosophies in this trying time and how the landscape for putting capital into renewable energy has shifted. But Mary’s quite open with her view: these technologies aren’t going anywhere.
The following conversation has been lightly edited and abridged for clarity.
How do you approach working in this field given all the macro uncertainties?
It’s a really fair question. One, macro uncertainties aside, when you look at the levelized cost of energy report Lazard releases it is clear that there are forms of clean energy that are by far the cheapest to deploy. There are all kinds of reasons to do decarbonizing projects that aren’t clean energy generation: storage, resiliency, energy efficiency – this is massively cost saving. Like, a lot of the methane industry [exists] because there’s value in not leaking methane. There’s all sorts of stuff you can do that you don’t need policy incentives for.
That said, the policy questions are unavoidable. You can’t really ignore them and I don’t want to say they don’t matter to the industry – they do. It’s just, my belief in this being an investable asset class and incredibly important from a humanity perspective is unwavering. That’s the perspective I’ve been taking. This maybe isn’t going to be the most fun market, investing in decarbonizing things, but the sense of purpose and the belief in the underlying drivers of the industry outweigh that.
With respect to clean energy development, and the investment class working in development, how have things changed since January and the introduction of these bills that would pare back the IRA?
Both investors and companies are worried. There’s a lot more political and policy engagement. We’re seeing a lot of firms and organizations getting involved. I think companies are really trying to find ways to structure around the incentives. Companies and developers, I think everybody is trying to – for lack of a better term – future-proof themselves against the worst eventuality.
One of the things I’ve been personally thinking about is that the way developers generally make money is, you have a financier that’s going to buy a project from them, and the financier is going to have a certain investment rate of return, or IRR. So ITC [investment tax credit] or no ITC, that IRR is going to be the same. And the developer captures the difference.
My guess – and I’m not incredibly confident yet – but I think the industry just focuses on being less ITC dependent. Finding the projects that are juicier regardless of the ITC.
The other thing is that as drafts come out for what we’re expecting to see, it’s gone from bad to terrible to a little bit better. We’ll see what else happens as we see other iterations.
How are you evaluating companies and projects differently today, compared to how you were maybe before it was clear the IRA would be targeted?
Let’s say that we’re looking at a project developer and they have a series of projects. Right now we’re thinking about a few things. First, what assets are these? It’s not all ITC and PTC. A lot of it is other credits. Going through and asking, how at risk are these credits? And then, once we know how at risk those credits are we apply it at a project level.
This also raises a question of whether you’re going to be able to find as many projects. Is there going to be as much demand if you’re not able to get to an IRR? Is the industry going to pay that?
What gives you optimism in this moment?
I’ll just look at the levelized cost of energy and looking at the unsubsidized tables say these are the projects that make sense and will still get built. Utility-scale solar? Really attractive. Some of these next-gen geothermal projects, I think those are going to be cost effective.
The other thing is that the cost of battery storage is just declining so rapidly and it’s continuing to decline. We are as a country expected to compare the current price of these technologies in perpetuity to the current price of oil and gas, which is challenging and where the technologies have not changed materially. So we’re not going to see the cost decline we’re going to see in renewables.
And more news around renewable energy conflicts.
1. Nantucket County, Massachusetts – The SouthCoast offshore wind project will be forced to abandon its existing power purchase agreements with Massachusetts and Rhode Island if the Trump administration’s wind permitting freeze continues, according to court filings submitted last week.
2. Tippacanoe County, Indiana – This county has now passed a full solar moratorium but is looking at grandfathering one large utility-scale project: RWE and Geenex’s Rainbow Trout solar farm.
3. Columbia County, Wisconsin – An Alliant wind farm named after this county is facing its own pushback as the developer begins the state permitting process and is seeking community buy-in through public info hearings.
4. Washington County, Arkansas – It turns out even mere exploration for a wind project out in this stretch of northwest Arkansas can get you in trouble with locals.
5. Wagoner County, Oklahoma – A large NextEra solar project has been blocked by county officials despite support from some Republican politicians in the Sooner state.
6. Skagit County, Washington – If you’re looking for a ray of developer sunshine on a cloudy day, look no further than this Washington State county that’s bucking opposition to a BESS facility.
7. Orange County, California – A progressive Democratic congressman is now opposing a large battery storage project in his district and talking about battery fire risks, the latest sign of a populist revolt in California against BESS facilities.
Permitting delays and missed deadlines are bedeviling solar developers and activist groups alike. What’s going on?
It’s no longer possible to say the Trump administration is moving solar projects along as one of the nation’s largest solar farms is being quietly delayed and even observers fighting the project aren’t sure why.
Months ago, it looked like Trump was going to start greenlighting large-scale solar with an emphasis out West. Agency spokespeople told me Trump’s 60-day pause on permitting solar projects had been lifted and then the Bureau of Land Management formally approved its first utility-scale project under this administration, Leeward Renewable Energy’s Elisabeth solar project in Arizona, and BLM also unveiled other solar projects it “reasonably” expected would be developed in the area surrounding Elisabeth.
But the biggest indicator of Trump’s thinking on solar out west was Esmeralda 7, a compilation of solar project proposals in western Nevada from NextEra, Invenergy, Arevia, ConnectGen, and other developers that would, if constructed, produce at least 6 gigawatts of power. My colleague Matthew Zeitlin was first to report that BLM officials updated the timetable for fully permitting the expansive project to say it would complete its environmental review by late April and be completely finished with the federal bureaucratic process by mid-July. BLM told Matthew that the final environmental impact statement – the official study completing the environmental review – would be published “in the coming days or week or so.”
More than two months later, it’s crickets from BLM on Esmeralda 7. BLM never released the study that its website as of today still says should’ve come out in late April. I asked BLM for comment on this and a spokesperson simply told me the agency “does not have any updates to share on this project at this time.”
This state of quiet stasis is not unique to Esmeralda; for example, Leeward has yet to receive a final environmental impact statement for its 700 mega-watt Copper Rays solar project in Nevada’s Pahrump Valley that BLM records state was to be published in early May. Earlier this month, BLM updated the project timeline for another Nevada solar project – EDF’s Bonanza – to say it would come out imminently, too, but nothing’s been released.
Delays happen in the federal government and timelines aren’t always met. But on its face, it is hard for stakeholders I speak with out in Nevada to take these months-long stutters as simply good faith bureaucratic hold-ups. And it’s even making work fighting solar for activists out in the desert much more confusing.
For Shaaron Netherton, executive director of the conservation group Friends of the Nevada Wilderness, these solar project permitting delays mean an uncertain future. Friends of the Nevada Wilderness is a volunteer group of ecology protection activists that is opposing Esmeralda 7 and filed its first lawsuit against Greenlink West, a transmission project that will connect the massive solar constellation to the energy grid. Netherton told me her group may sue against the approval of Esmeralda 7… but that the next phase of their battle against the project is a hazy unknown.
“It’s just kind of a black hole,” she told me of the Esmeralda 7 permitting process. “We will litigate Esmeralda 7 if we have to, and we were hoping that with this administration there would be a little bit of a pause. There may be. That’s still up in the air.”
I’d like to note that Netherton’s organization has different reasons for opposition than I normally write about in The Fight. Instead of concerns about property values or conspiracies about battery fires, her organization and a multitude of other desert ecosystem advocates are trying to avoid a future where large industries of any type harm or damage one of the nation’s most biodiverse and undeveloped areas.
This concern for nature has historically motivated environmental activism. But it’s also precisely the sort of advocacy that Trump officials have opposed tooth-and-nail, dating back to the president’s previous term, when advocates successfully opposed his rewrite of Endangered Species Act regulations. This reason – a motivation to hippie-punch, so to speak – is a reason why I hardly expect species protection to be enough of a concern to stop solar projects in their tracks under Trump, at least for now. There’s also the whole “energy dominance” thing, though Trump has been wishy-washy on adhering to that goal.
Patrick Donnelly, great basin director at the Center for Biological Diversity, agrees that this is a period of confusion but not necessarily an end to solar permitting on BLM land.
“[Solar] is moving a lot slower than it was six months ago, when it was coming at a breakneck pace,” said Patrick Donnelly of the Center for Biological Diversity. “How much of that is ideological versus 15-20% of the agencies taking early retirement and utter chaos inside the agencies? I’m not sure. But my feeling is it’s less ideological. I really don’t think Trump’s going to just start saying no to these energy projects.”