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UAW standoff poses risks to Biden’s electric vehicle commitment

President Biden has been highly attuned to the politics of electric vehicles, helping to create new manufacturing jobs and enacting billions in subsidies to get his way. to court United Automobile Workers Union.

But as unions and big U.S. automakers — General Motors, Ford Motor and Stellantis, owner of Chrysler, Jeep and RAM — approach a strike deadline set for Thursday night, the political implications posed by the industry’s transition to electric cars The challenge may be only the beginning.

The union, under its new president, Shawn Fenn, wants workers who make electric vehicle components like batteries to benefit from better wages and labor standards than the roughly 150,000 UAW members at the three automakers. Most battery plants are not unionized.

Detroit automakers counter that these workers are typically employed in joint ventures with foreign manufacturers that the American automakers do not fully control. The companies say that even if they could raise wages for battery workers to the rate set under their national UAW contract, doing so could make them uncompetitive with non-union rivals like Tesla.

And then former President Donald J. There’s Trump, who is running to oust Mr Biden from office and has said the president’s clean energy policies are causing American jobs to be lost and prices for consumers to rise.

White House officials say Mr. Biden will still be able to deliver on his promise of high-quality jobs and a strong domestic electric vehicle industry.

Gene Sperling, Mr. Biden’s liaison to the UAVs and auto industry, said, “The president’s policies have always been geared toward ensuring that our electric vehicle future is built in America with American jobs,” but also that it “makes sense for the good union.” Will promote. Jobs and a Just Transition” for current autoworkers whose jobs are at risk.

But at least publicly, the president has so far spoken only in the vaguest terms about pay. Last month, he Said That when union jobs were replaced with new electric vehicle jobs, those jobs should go to union members and pay them “comparing” wages.

A strike could force Mr. Biden to be more forthright and choose between his commitment to workers and the need to strike a compromise that prevents a costly long-term shutdown.

“Battery workers need to be paid the same as UAW workers in the existing Big Three,” said Representative Ro Khanna, a California Democrat who promotes government investment in new technologies.

“That’s how we compare with Trump: We’re in favor of creating good-paying manufacturing jobs throughout the Midwest,” Mr. Khanna said.

At the center of the debate is whether the shift to electric vehicles, which have fewer parts and typically require less labor to assemble than gas-powered cars, will hasten the decline of unionized work in the industry.

Foreign and domestic vehicle manufacturers are announced In response to the subsidies, Mr Biden helped create thousands of new US-based electric vehicle and battery jobs. But most of those jobs are not unionized, and many are in the South or West, where the UAW has struggled to win over autoworkers. The union has tried and failed to organize workers at Tesla’s factory in Fremont, California, and southern plants owned by Volkswagen and Nissan.

As a result, the union has focused its efforts on battery workers employed directly or indirectly by GM, Ford, and Stellantis. There is ongoing labor for this work. from a distance Experienced UAW members earn about $32 an hour under their current contracts with the three companies.

Legally, employees of the three manufacturers cannot strike over wages for battery workers employed in the joint ventures. But many UAW members worry that paying battery makers too low wages will allow GM, Ford and Stellantis to replace their current U.S. workforce with cheaper labor, so they’re demanding bigger wage increases for those workers. .

“We want EV jobs to be UAW jobs under our master agreements,” said Scott Halldison, president of Unite All Workers for Democracy, a group within the union that helped propel Mr. Fain to the presidency.

Union officials have pressured auto companies to address their concerns about battery workers before their members vote on new contracts. He says companies can afford to pay more because they have collectively made about $250 billion in North America over the past decade, according to the union’s estimates.

But auto companies, while acknowledging that they have been profitable in recent years, say the transition to electric vehicles is too expensive. Industry executives have suggested that it is hard to know how quickly consumers will adopt electric vehicles and that companies need the flexibility to adjust.

Even if labor costs were not an issue, it could take years for the Big Three to catch up to Tesla, which makes about 60 percent of its sales in fully electric vehicles, said Corey Cantor, an electric vehicle analyst at energy research firm BloombergNEF. Is. United States of america.

BloombergNEF data shows that GM, Ford and Stellantis combined sold less than 100,000 battery electric vehicles in the United States last year; In 2017, Tesla alone sold 50,000. It took another five years for Tesla to reach over half a million sales in the US. (The Big Three also sold about 80,000 plug-in hybrids last year.)

The three established automakers had hoped to use the transition to electric cars to bring their costs in line with their competitors, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a research firm. If they can’t, he said, They will have to look for savings elsewhere.

In a statement, Stellantis said its battery joint venture “intends to provide very competitive wages and benefits while keeping the health and safety of its workforce a top priority.”

Estimates shared by Ford put hourly labor costs including benefits in the mid-$60s for the three automakers, in the mid-$50s for foreign automakers in the United States and in the mid-$40s for Tesla.

Jim Farley, Ford’s chief executive, said in a statement It said last month that the company’s offer of a pay raise in the next contract was “significantly better” than what Tesla and foreign automakers pay American workers. He said Ford “will not pursue any deal that jeopardizes our investment, growth and our ability to share profits with our employees.”

Mr. Biden and Democratic lawmakers had sought to offset this labor-cost loss by providing additional $4,500 subsidy for every electric vehicle assembled in a unionized US plant, on top of other incentives available for electric cars. But the Senate removed that provision from the Inflation Reduction Act.

Such setbacks have demoralized the UAW early supporter About Mr. Biden’s clean energy plans. In May, the union, which typically supports Democratic presidential candidates, withheld its support Of Mr. Biden’s re-election.

“The EV transition runs a serious risk of creating a race to the bottom,” Mr. Fenn said in an internal memo. “We want to see that the national leadership supports us on this before we make any commitments.”

Next month, Mr. Fenn scolded for the Biden administration to give Ford was given a $9.2 billion loan to build three battery factories in Tennessee and Kentucky, with no inducements to unionize jobs.

Mr. Biden appointed Mr. Sperling, a Michigan native, around the same time to serve as his White House point of view on issues related to unions and the auto industry. By the end of August, the Department of Energy announced It is making $12 billion in grants and loans available for investment in electric vehicles, with priority given to automakers that create or retain good jobs in areas with a strong union presence.

Mr. Sperling speaks regularly with both sides in the labor dispute, trying to resolve misunderstandings before they escalate, and said recent Energy Department funding will jump-start the industry while creating good jobs. Mr. Biden’s commitment to do so is reflected.

Complicating the picture for Mr. Biden is the growing voice of Democratic politicians and liberal groups, who have supported autoworkers’ demands, even as they seek to improve wages and labor standards in other green industries like wind and solar. I appreciate the success of the President.

about 30 democratic senators signed a letter Auto executives were urged to bring battery workers into a union national contract this summer. Dozens of labor and environmental groups have signed a letter The demand is resonating.

The groups argue that the change will have only a modest impact on automakers’ profits because labor is a relatively small part of total costs, a claim some independent experts support.

Yen Chen, chief economist at the Center for Automotive Research, a nonprofit group in Ann Arbor, Michigan, said that based on an analysis conducted by the group over 10 years, labor contributes only 1.5% to the cost of final assembly for mid-size domestic sedans. Was 5 percent. First. Mr Chen said that figure was likely lower today, and lower still for battery assembly, which is highly automated.

Beyond the economic case, however, Mr. Biden’s aides say allowing electric vehicles to drive down auto wages would be a catastrophic political mistake. Employees at the three companies are concentrated in Midwestern states that could decide the next presidential election — and, as a result, the fate of the transition to clean energy, said Jason Walsh, executive director of the Bluegreen Alliance, a coalition of unions. environmental groups.

“The economic impacts of doing this are extremely damaging,” he said. “The political consequences would be devastating.”

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