With just three days until their current contract expires, nearly a hundred and fifty thousand members of the United Auto Workers (U.A.W.) union are preparing to walk out from their jobs at the Big Three automakers: Ford, General Motors, and Stellantis (the parent company of Chrysler). Negotiations are ongoing, but in recent days Shawn Fain, the U.A.W. president, dismissed the companies’ initial contract offers as grossly inadequate. “If we don’t get our justice, I can guarantee you one thing—come this Thursday at midnight, there will be action,” Fain said.
Recent years have seen a resurgence of labor activism, with strike threats from railway workers, UPS drivers, and other groups seeking to raise their wages and improve their employment conditions. The auto workers have asked for a four-day workweek at full pay and a forty-six-per-cent wage increase over four years, as well as cost-of-living adjustments and better retirement benefits. But their contract dispute also involves some fundamental issues about the future of the auto industry. Under programs that were introduced in last year’s Inflation Reduction Act and the 2src21 bipartisan infrastructure bill, the Biden Administration is providing generous financial incentives to automakers that invest in electric-vehicle (E.V.) plants. The U.A.W., whose many members work in factories that make vehicles powered by internal-combustion engines, is demanding assurances that the Big Three won’t exploit the transition to E.V.s to eliminate union jobs and union contracts. It is also asking Joe Biden, who proudly calls himself “the most pro-union President in American history,” to support its cause. “I think our strike can reaffirm to him where the working-class people in this country stand,” Fain told CNBC last week. “It’s time for politicians in this country to pick a side.”
Since Biden took office, domestic and foreign automakers have committed tens of billions of dollars to constructing new E.V. factories in the United States. Lacking key battery technology of their own, Ford, G.M., and Stellantis have also set up joint ventures with South Korean firms to manufacture electric power packs. The White House has hailed these new investments as evidence that its effort to revive U.S. manufacturing is working, but the U.A.W. doesn’t see it this way. With the transition to E.V.s accelerating—in California, E.V.s now account for a fifth of auto sales—older factories and their workers are potentially in the firing line. Last year, Ford’s C.E.O., Jim Farley, said that E.V. production will require forty per cent less labor. Although a recent study from Carnegie Mellon University researchers disputed this claim, industry experts say that huge changes are coming. “The auto companies are getting out of the internal-combustion-engine business: it’s just a matter of when,” Marick Masters, a professor of business at Wayne State University, in Detroit, told me. “So, all those old plants are going to have to be transitioned out of operation or retooled to electrification.”
Under pressure from the U.A.W., Biden issued a statement last month on the contract negotiations, in which he said that the auto industry must provide “good jobs that can support a family,” and insure that existing workers are given “the first shot” to fill new jobs. At the end of August, the Administration announced $15.5 billion in funding and loans, most of which will be used to support the conversion of existing auto factories to E.V.s and retraining workers. “The package really supports the President’s values,” Gene Sperling, a senior adviser to Biden, told me. “It makes clear that, wherever it is legal and appropriate, we want to push for high-quality jobs and collective bargaining.”
The U.A.W. leader welcomed this funding package, but he and his members want more support from the White House. The union is concerned that many of the jobs being created in E.V. plants are nonunion jobs, some of which pay wages well below union levels. In Warren, Ohio, an electric battery factory operated by Ultium Cells, a joint venture owned by G.M. and LG Energy Solution, was until recently paying new workers well under twenty dollars an hour. (Last month, management agreed to increase wages at the plant.)
Fain’s argument is that, taken over all, the Biden Administration’s hefty tax credits for the purchase of E.V.s are encouraging the Big Three to invest in E.V. joint ventures that are nonunionized and pay lower wages. Referring to new electric-vehicle factories that Ford and SK, a South Korean battery-maker, are building in Kentucky and Tennessee, Fain said in a recent video address to his members, “Ford is currently investing billions of dollars in companies that are not Ford and in a workforce that is not U.A.W. And they are receiving billions of dollars in taxpayer funding to fund and support this race to the bottom.”
The White House says it wants as many as possible of the jobs created at new E.V. plants to be high-paying union jobs. Last year, Biden said he supported unionizing battery plants operated by joint ventures. In his August statement, he said that the auto companies should “honor the right to organize; take every possible step to avoid painful plant closings; and ensure that when transitions are needed, the transitions are fair.” As part of the Administration’s $15.5-billion funding package, plants with collective-bargaining agreements and a history of paying good wages will get additional points in the application process.
When Congress was drawing up the I.R.A. tax credits for E.V. plants, some Democrats tried to include a bonus credit of forty-five hundred dollars for vehicles produced at union plants, but they were unable to get fifty-one Democratic votes for it in the Senate. Toyota has a large nonunion plant in West Virginia, and Senator Joe Manchin opposed the provision. “This obviously would have been helpful in supporting union plants paying higher wages,” a senior White House official said.
Some progressive Democrats are calling on Biden to come out and explain the larger issues at stake in the dispute. I spoke with Felicia Wong, the president of the Roosevelt Institute, a liberal think tank, and she drew a parallel with the writers’ dispute in Hollywood, which isn’t just about wages, either. “Whether it’s about A.I. replacing writing jobs or jobs in new battery plants that don’t pay a living wage, these disputes are all about who gets to have power in the new economy,” Wong said. “These are the things that President Biden should be talking about when he talks about Bidenomics, even though I understand this particular dispute is pretty complicated.”
One of the complications facing the U.A.W. and the White House is that the Big Three have structured their E.V. partnerships as separate companies, which aren’t subject to the collective-bargaining agreements that cover existing plants. “The joint ventures are stand-alone legal entities,” Masters noted. “The auto companies take the approach that, if the U.A.W. wants to organize them and reach agreements on wages and staffing, then they have to go to their management and talk to them.” So far, the U.A.W. hasn’t had much success in unionizing workers at new E.V. plants, although late last year it did secure a lopsided vote in favor of organizing the Ultium Cells plant in Warren.