As contract negotiations between big automakers and the United Auto Workers get underway this week, President Biden faces an awkward balancing act between high-profile priorities: Championing labor rights and advancing green-energy policy.
The UAW’s new leadership has sounded a string of alarms in recent weeks about the Biden-backed push toward electric vehicles, criticizing the relatively low pay workers are earning at one new battery factory and blasting the closure of older gasoline-vehicle factories. In contract negotiations with Ford, General Motors and Stellantis, the UAW’s priorities include ensuring that workers at older factories can transition to new EV jobs, and securing pay and benefits for EV workers that match those in the gasoline era.
The union has also directed unusual ire at Biden, a longtime ally of the labor movement, asking why the government is using billions of taxpayer dollars to subsidize battery and EV factories without requiring strong pay.
If progress isn’t made on the multiyear contracts covering roughly 150,000 UAW workers, some plants could go on strike as early as September.
For their part, the companies have said they are committed to creating thousands of new union jobs with attractive wages, while also controlling costs in an increasingly competitive global industry.
“Americans – none more so than union members – are counting on us to keep an industry that employs more than 9.5 million people and drives $1 trillion dollars into the economy alive and well,” Ford CEO Jim Farley wrote in a recent editorial in the Detroit Free Press, saying the company will “work hard” to reach a deal with the union.
Gerald Johnson, GM’s top manufacturing executive, told Automotive News last month that the company is prepared for “all the scenarios” when it sits down to negotiate. “But again, the point of negotiations is to understand the problems and solve the problems. And that’s where we want to put all of our energy,” he said.
Stellantis declined to comment.
The stakes are high for Biden’s political future. UAW President Shawn Fain, elected in late March with a remit to reinvigorate the union, has gone so far as to withhold the UAW’s endorsement for Biden’s reelection campaign, telling his members in a memo that the union first expects the White House to help it ensure that workers win strong pay and job security in the EV era.
“We’ll stand with whoever stands with our members in that fight,” Fain wrote in May. “The federal government is pouring billions into the electric vehicle transition, with no strings attached and no commitment to workers … We want to see national leadership have our back on this before we make any commitments.”
That marked a break with other big unions, including the AFL-CIO and the International Brotherhood of Electrical Workers, which quickly endorsed Biden.
The conflict underscores the competing priorities Biden must balance as he pushes ahead with large federal investments in high-tech industries, an industrial policy aimed at lowering carbon emissions, creating lucrative jobs and boosting U.S. competitiveness against China. Achieving all of those goals without compromise could be an uphill battle.
The tension suggests the “difficulties of killing many birds in one stone,” said Dani Rodrik, an economics professor at Harvard’s John F. Kennedy School of Government. “An industrial policy focusing on the green transition and one focusing on good jobs may overlap, but they are not one and the same.”
In a sign of the White House’s intense interest, the administration last week appointed longtime Democratic adviser Gene Sperling to be its “point person” for the UAW and Big Three automakers. Sperling is expected to stay in touch with the various parties, but it isn’t clear what authority the White House has to force a deal, as it did with the railroad worker contract talks last year.
“The President believes that new jobs building electric vehicles should be at least as good as current jobs building traditional cars – including by ensuring employers respect workers’ choice to organize a union and engage in collective bargaining. He has directed his team to take all appropriate steps to achieve that goal,” White House spokeswoman Robyn Patterson said by email.
The tensions are high enough that some expect a UAW strike could break out in September, when workers’ current contracts expire.
“It’s going to happen,” Nelson Lichtenstein, a labor historian at the University of California at Santa Barbara, said in an interview. Fain’s election came after a reform movement that has “re-energized” the union after years of it being “not very aggressive either in politics or negotiating,” he said.
The automotive dispute comes as U.S. workers in a variety of industries fight for better compensation. Last month, the union representing 340,000 UPS employees authorized a nationwide strike that could have sweeping implications for the U.S. labor movement and the economy beginning as soon as Aug. 1. Last week, union leaders said strike preparations had moved into “high gear” after contract talks with UPS broke down following the July Fourth holiday.
Meanwhile, tens of thousands of nurses in New York, Minnesota, Texas, Kansas and Oregon have walked off the job over staffing levels and pay during the past year. And in recent weeks, the Biden administration dispatched acting Labor Secretary Julie Su to help broker a tentative agreement to resolve a labor dispute that had temporarily shuttered some of North America’s biggest West Coast ports.
The UAW contract talks come after several years of dizzying changes in the automotive industry. Global shortages of computer chips, caused by pandemic-related gyrations in supply and demand, forced many automakers to idle factories for weeks on end, a problem that is only now easing.
At the same time, the global push toward electrification is sparking a sweeping retooling of the industry that has left workers uneasy about their job security. Decades-old auto plants in some parts of the country are closing, while automakers convert others to EV production and invest billions in new facilities.
Midwestern communities that manufacture the gas-powered engines and transmissions not needed in an EV – jobs that are mostly unionized – are particularly anxious about the shake-up.
Some of those states are receiving large EV investments in projects that will have UAW workers. Ford last year pledged to add more than 6,200 new union jobs in Michigan, Ohio and Missouri in a mix of EV and gasoline-powered vehicle plants. Ford also agreed to recognize the UAW at a planned battery plant in Michigan if enough workers sign union cards.
But some of the biggest new EV and battery factories are destined for southern states, including Kentucky and Tennessee, where local laws, politics and culture make it harder for unions to organize. Many of the battery plants are being set up by joint ventures between automakers and South Korean battery companies, muddling the union’s traditional strategy of negotiating directly with automakers.
New laws are directing tens of billions of federal dollars to support EVs by giving manufacturers and consumers tax credits and other incentives. Biden tried to include stronger support for unions in the legislation, pushing for a requirement that full consumer tax credits for EV purchases would apply only to vehicles built by unionized workers. But the measure never made it into law.
In an email, General Motors said the company’s plants making EVs, including factories in Michigan and Tennessee, all have the same pay structure as GM’s internal-combustion assembly plants.
The UAW says it isn’t opposed to EVs – it just wants the jobs to pay well. So far, the UAW’s criticism about EV pay has focused on the Ultium Cells battery plant near Lordstown, Ohio, established by a joint venture between General Motors and South Korea’s LG Energy Solutions. The factory voted overwhelmingly to join the UAW late last year but does not yet have a UAW-negotiated contract.
In a video posted to the UAW YouTube Channel last week, Fain said Ultium workers start at $16.50 an hour, or roughly half of what GM workers used to get at a former gasoline-car plant in Lordstown that was shuttered in 2019. That kind of pay is “not enough to live,” David Green, a regional director for the UAW, said in an interview, adding that some Ultium employees are working two jobs to get by.
“Ultium Cells is committed to the collective bargaining process, and will work in good faith with the UAW to reach a competitive agreement,” the company said in an emailed statement.
Industry experts say it’s too early to judge wages in the EV sector, because many factories have yet to be built.
But the UAW is nonetheless swinging early. Last month, it blasted the Department of Energy’s decision to grant a loan of up to $9.2 billion to a joint venture between Ford and South Korea’s SK for the construction of three battery plants in Tennessee and Kentucky. The “giveaway loan” was granted with “no consideration for wages, working conditions, union rights or retirement security,” the UAW said.
In an emailed statement, Ford said the loan would help create “thousands of good-paying jobs and strengthen the future of American manufacturing.” Employees at the plants “will be able to choose whether they organize, a right that Ford fully respects and supports,” the company added.
The Energy Department said that it works with all borrowers “to create good-paying jobs with strong labor standards during construction, operations, and throughout the life of the loan.”
The Washington Post’s Lauren Kaori Gurley contributed to this report.
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