Nov 2, 2023 - Economy & Business

UAW's hidden victory: Job security in the electric car era

Illustration of a hand holding a lightning bolt-shaped cardboard

Illustration: Annelise Capossela/Axios

One of the United Auto Workers' biggest victories in its six-week strike against Detroit carmakers was protection for autoworkers affected by the historic shift to electric vehicles (EVs).

Why it matters: The tentative agreements struck with Ford, Stellantis and General Motors would ensure that people who build engines and transmissions today will still earn top union wages making EV batteries and components in the future.

  • The deals also include billion-dollar commitments from all three carmakers to build future EVs in existing U.S. factories, further enhancing job security for tens of thousands of autoworkers.
  • For President Biden, it's also an opportunity to argue that his climate agenda can indeed produce "good union jobs" and that huge government subsidies for EVs will help rebuild U.S. manufacturing.

The big picture: The UAW has long been concerned that the EV transition will be a "race to the bottom" for unionized autoworkers, with jobs at engine and transmission plants phased out in favor of low-wage battery jobs.

  • Several years ago, the union published a 44-page report outlining what it viewed as the risks from such disruption: lower wages, displaced workers and more off-shoring, especially to China.
  • A 2021 update urged policymakers to ensure that government subsidies and tax breaks for EV manufacturing include a commitment to create jobs in the U.S. with wages and benefits comparable to the jobs they replace.

Yes, but: U.S. automakers have used partnerships with foreign battery manufacturers as an excuse to reclassify jobs at many of these new facilities, the union says.

The other side: The companies argued that their joint ventures were separate legal entities, and therefore those jobs wouldn't be covered under national UAW contracts.

Zoom in: When GM's Ultium Cells battery plant opened in 2022 in Lordstown, Ohio, workers were paid $16.50 an hour — barely half of what UAW members had been earning at a shuttered GM assembly plant nearby.

  • While GM didn't fight a union organizing drive at the plant, it insisted that because Ultium Cells was a joint venture with South Korea's LG Energy Solution, workers would need to negotiate a separate contract.
  • Under political pressure from a group of U.S. senators, Ultium Cells in August agreed to an interim wage hike to about $20 an hour while contract negotiations continued.

The latest: Under the UAW's latest wins, workers at Ultium — as well at similar battery joint ventures coming soon from Ford and Stellantis, if they unionize — will be covered by the so-called "master agreement" with the Big Three.

  • That means Ultium Cells workers will see significant pay increases, with details to come.
  • Workers will also benefit from the agreement's strong health and safety standards — vital in a workplace with chemicals and other hazardous materials.

What they're saying: "The significance of this cannot be overstated," UAW president Shawn Fain said in an online video announcing the GM deal.

  • "I don't care if you build combustion engines or electric batteries, these workers make these vehicles — and this company — run, and they will be recognized and compensated justly for it."

Between the lines: Labor advocates say employers receiving huge government incentives for domestic battery production should use that taxpayer money to create good-paying, middle-class jobs.

  • "Paying workers their fair share will not damage the competitiveness of automakers who are benefiting from high demand for their products, along with historic federal support for grants, loans and tax breaks," said Jason Walsh, executive director of the BlueGreen Alliance, a coalition of labor unions and environmental organizations.

The bottom line: The UAW's historic labor agreements with the Detroit automakers aren't just about wages and benefits. They also help provide job security in a changing industry.

Editor's note: This story has been corrected to reflect that the size of the raises for Ultium Cells workers remains unclear, pending further details. This story has also been updated to reflect that workers at upcoming Ford and Stellantis battery joint ventures must join the UAW to be covered by its "master agreement."

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