The Looming Labor Fight Over Electric Vehicles
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.”