Former President Donald Trump will give a speech to autoworkers in Detroit next Wednesday, and he is expected to attack President Biden’s policies promoting a transition to electric cars.
“The United Autoworkers are being sold down the ‘drain’ with this all Electric Car SCAM,” Trump recently said on the Truth Social media site, referring to the union currently on strike.
Biden announced Friday afternoon that he will be joining the strikers on the picket line next Tuesday.
Although the UAW supports the move toward manufacturing electric vehicles, or EVs, its strike has been sparked in part by the new technology. Industry analysts say a prolonged strike could set back that transition, which is crucial to Biden’s plans for reducing the carbon dioxide emissions causing climate change.
Competition for dollars
The main issue that motivated 13,000 autoworkers to walk out last Friday is their demand for a 36% pay increase over four years. GM and Ford offered raises of 20%, and Stellantis offered 21%. Workers also want pensions and health care for retired workers who started after 2007 (a group currently not included in those benefits), cost-of-living adjustments and a 32-hour workweek.
The Big Three automakers have been investing heavily in developing and producing EVs. So far, they are losing money on that market segment, even though the auto manufacturers are very profitable overall.
Ford CEO Jim Farley told the New York Times that meeting the UAW’s wage demands would force them to reduce EV investment. UAW president Shawn Fain noted in a recent interview with CBS News that labor accounts for only 5% of the cost of an electric car.
Read more on Yahoo News: Why is the UAW on strike? These are their contract demands, from CBS News
Will fewer parts mean fewer jobs?
An internal combustion engine has more than 1,000 parts, compared with roughly 50 parts in an EV. With fewer parts, EVs require fewer employees to assemble them.
Last year, Farley told the Financial Times that manufacturing EVs requires about 40% less labor than traditional vehicles. Plants making auto parts that would be obsolete in a fully electric U.S. auto fleet, like mufflers and catalytic converters, would have to be repurposed or shuttered.
Many of the new EV factories are being built in the less union-friendly South, so the union is demanding that workers in new EV factories be covered by UAW contracts, but so far the automakers have refused.
Read more on Yahoo News: The UAW strike and the inexorable math of electric vehicles, from Business Insider
A work stoppage could delay EV rollout
The Big Three automakers are struggling to swiftly bring EVs to market and compete with Tesla, which has a lower-paid, nonunion workforce, according to TechCrunch.
In February, Ford temporarily suspended production of its electric F-150 Lightning pickup after a battery caught fire in one of the vehicles, and GM’s new battery factory in Ohio has been slow to ramp up production, delaying electric versions of several vehicles.
Some analysts say a work stoppage could actually buy time for GM to resolve bottlenecks in its EV production process, but most say it would interfere with corporate plans.
“In this crucial period of EV execution, model roll-outs, distribution, marketing, with EV competition rising across the board, the timing could not be worse,” wrote car industry analyst Dan Ives of Wedbush Securities in a research note.
Policies to promote EVs
Transportation is the largest contributor to the U.S.’s planet-warming emissions, so Biden has committed billions of dollars to promoting EVs, including the Inflation Reduction Act’s subsidies for buying them and the 2021 infrastructure law’s money for a national network of charging stations.
The Environmental Protection Agency has drafted pollution rules that would effectively require two-thirds of new cars sold to be fully electric by 2032.
To develop the domestic electric car manufacturing industry, the IRA’s subsidies are available only to cars built in North America.
Trump and allies such as Rep. Lisa McClain of Michigan argue that pro-EV policies harm American workers because EV plants are less likely to be unionized and some EV components come from China.
The UAW backed Biden in 2020, and it says it backs the switch to EVs — as long as the new jobs are unionized.
“The UAW supports and is ready for the transition to a clean-auto industry,” Fain said in August. “The EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.”