The battle for electric vehicles is at the heart of the auto strike

A battle between Detroit automakers and the United Auto Workers union, which intensified Friday with targeted strikes at three sites, is taking place amid a once-in-a-century technological upheaval that poses enormous risks to both companies as well as for the union.

The strike comes as traditional automakers invest billions to develop electric vehicles while making most of their money from gasoline-powered cars. The negotiations will determine the balance of power between labor and management, perhaps for years to come. This makes the strike a fight as much for the future of the industry as it is for wages, benefits and working conditions.

Established automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — are trying to defend their profits and market place in the face of fierce competition from Tesla and foreign automakers. Some executives and analysts have called what’s happening in the industry the biggest technological transformation since Henry Ford’s moving assembly line began in the early 20th century.

Nearly 13,000 UAW workers walked off the job Friday at three plants in Ohio, Michigan and Missouri after negotiations between unions and companies in three separate negotiations failed to reach an agreement before Thursday’s deadline. Wages are one of the main sticking points: The union is demanding a 40 percent wage increase over four years, but automakers have offered about half that amount.

But the discussions are not limited to remuneration. Workers are trying to defend their jobs as the manufacturing industry shifts from internal combustion engines to batteries. Because they have fewer parts, electric cars can be made with fewer workers than gasoline vehicles. A favorable outcome for the UAW would also give the union a strong calling card if, as some expect, it next attempts to unionize employees at Tesla and other non-union automakers like Hyundai, which plans to make electric vehicles at a massive new factory in Georgia. .

“The transition to electric vehicles dominates every moment of this discussion,” said John Casesa, senior managing director at investment firm Guggenheim Partners, who previously led strategy at Ford Motor.

“It is not said,” added Mr. Casesa. “But really, it’s about positioning the union to play a central role in the new electricity industry.”

Under pressure from government officials and changing consumer demand, Ford, GM and Stellantis are investing billions to revamp their sprawling operations to build electric vehicles, critical to the fight against climate change. But they make little or no profit on these vehicles, while Tesla, which dominates electric car sales, is profitable and growing rapidly.

Ford said in July that its electric vehicle business would lose $4.5 billion this year. If the union got all the pay, pension and other benefit increases it is demanding, the company said, its workers’ total compensation would be twice that of Tesla employees.

The unions’ demands would force Ford to abandon its investments in electric vehicles, Jim Farley, the company’s chief executive, said in an interview Friday. “We really want to have a conversation about a sustainable future,” he said, “not a conversation that forces us to choose between going out of business and rewarding our workers.”

For workers, the biggest concern is that electric vehicles have far fewer parts than gasoline models and will make many jobs obsolete. Factories that make mufflers, catalytic converters, fuel injectors and other components that electric cars don’t need will have to be overhauled or closed.

Many new battery and electric vehicle factories are emerging that could employ workers from closed factories. But automakers are building more aggressively in the South, where labor laws are unfavorable to union organizers, rather than in the Midwest, where the UAW has more influence. One of the union’s demands is that workers at the new plants be covered by the automakers’ national labor contracts — a demand the automakers have said they cannot meet because those plants are owned by joint ventures. The union also wants to regain the right to strike to block factory closures.

“We are at the dawn of another industrial revolution and the path we are following is the same as the last industrial revolution: lots of profits for the few and misery and bad jobs for the many ” said Madeline Janis. executive director of Jobs to Move America, an advocacy group that works closely with the UAW and other unions.

“The UAW is truly taking a stand for communities across the country to ensure that this transition benefits everyone,” Janis added.

Automakers have racked up record profits over the past decade, but they can’t afford to lose time to work stoppages in their race to compete with Tesla and foreign automakers.

All three companies are already struggling to get their electric vehicle businesses off the ground. A new GM battery plant in Ohio has been slow to produce batteries, delaying electric versions of the Chevrolet Silverado pickup and other vehicles. Ford had to suspend production of its electric F-150 Lightning this year in February after a battery caught fire in one of the pickups parked near the factory for a quality check. And Stellantis won’t even start selling fully electric vehicles in the United States until next year.

These issues and Tesla’s growing sales could put the union in a strong position to strike a good deal.

On Thursday, in a sign that automakers are willing to go much further than previously, GM proposed a 20 percent wage increase over four years. That’s half of what the union is demanding, but far more than workers received under their recent contracts. President Biden strongly supported the union in his remarks at the White House on Friday. The administration has invested billions in programs to promote electric vehicles and doesn’t want a strike to delay a central part of its climate policy.

For all the money automakers have made in recent years, their executives express deep unease over the growth of electric vehicles, which account for 7% of the U.S. new car market so far this year and are on track to exceed one million sales. This year. Executives are keenly aware that traditional companies like theirs have a poor track record of maintaining dominance after major technological change. Witness how Apple sidelined Nokia and Motorola as cell phones became smartphones.

Automaker executives and most industry analysts have underestimated how quickly electric vehicles will gain momentum and cannot predict with certainty how sales, which have been volatile of late, will increase over time. ‘future. “I don’t think anyone can perfectly predict what the adoption will be,” Mary T. Barra, chief executive of General Motors, said in an interview with The New York Times last month.

Speaking to “CBS Mornings” on Friday, Ms. Barra said an excessive pay increase would hurt GM’s ability to continue producing vehicles with internal combustion engines while also developing electric vehicles. “We are at a critical moment where investment is very important,” she said.

But unions and their supporters are unlikely to express much sympathy for auto executives. Ms. Barra and the executives of Ford (Jim Farley) and Stellantis (Carlos Tavares) have obtained tens of millions of dollars in compensation in recent years. Company shareholders were rewarded with dividends and stock buybacks.

Unions “won’t be very patient with sob stories,” said Karl Brauer, executive analyst at, an online marketplace.

Adjusted for inflation, wages for U.S. auto workers have fallen 19 percent since 2008, according to the Economic Policy Institute, a left-leaning research group.

At the same time, union officials are aware of the changes in the industry and have said they do not want to handicap GM, Ford and Stellantis as the companies try to regain ground lost to Tesla, which has resisted aggressively to attempts to unionize its employees. factories. Detroit automakers also face challengers like Rivian, a startup that makes electric pickup trucks and sport utility vehicles in Illinois, as well as foreign competitors like Mercedes-Benz and Toyota, whose factories American, mainly in the South, are not established. unionized.

“That’s the biggest challenge here,” Mr. Brauer added, “trying to commit to a long-term contract in an industry that is very uncertain and unpredictable over the next five years.”

Union supporters say it would be wrong to blame workers if traditional automakers can’t compete with Tesla and its other rivals.

“If you look at the breakdown of what it costs to build an electric vehicle, labor is a very small part of the equation. Batteries are the most used,” said Ms. Janis of Jobs to Move America. “This idea that the UAW is going to drive Ford, GM and Stellantis out of the market is not true.”

But other analysts say a lengthy work stoppage could help Tesla and foreign automakers gain ground on GM, Ford and Stellantis.

“If something were to disrupt their business, would that give emerging electric vehicle manufacturers an advantage? said Steve Patton, who oversees consulting firm EY’s work with automakers. “Who benefits from a prolonged strike?”


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