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    Auto Strike by U.A.W. Could Have Wide Economic Effects

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    An extended walkout by the United Auto Workers in a contract dispute could raise car prices and affect jobs at the companies’ suppliers.Two years after the auto industry survived the supply-chain upheaval of the pandemic, another disruption — the prospective strike by the United Auto Workers — threatens to upend the production and distribution of new cars, and the impact could be wide-ranging.A U.A.W. strike against one or more of Detroit’s Big Three — Ford Motor, General Motors and Stellantis, which owns Chrysler, Jeep and Ram — is likely to quickly affect the U.S. economy, particularly in the Midwest. And a prolonged strike, by crimping the availability of new vehicles, could lead to soaring car prices. The combination of slower growth and higher prices could complicate matters for the Federal Reserve, which has sought to bring down inflation while maintaining job growth.“We’ve been counting on vehicle prices coming down, adding to the disinflation and taking pressure off the Fed so the Fed doesn’t have to keep on raising interest rates,” said Mark Zandi, chief economist at Moody’s Analytics. “This makes that much more difficult.”According to an August report from the Anderson Economic Group, a 10-day strike against all three automakers would result in total economic losses of $5.6 billion. Around $3.5 billion of that would result from lost wages and production, with the remaining $2.1 billion borne by consumers, who wouldn’t be able to get necessary repairs and replacement parts, and by dealers and their employees.Mr. Zandi said a six-week strike would have a “measurable but ultimately modest” effect on overall gross domestic product, perhaps a decline of two- or three-tenths of a percentage point. But he said damage would start to mount, given economic headwinds like rising interest rates, the return of student-loan repayments and a potential government shutdown in October.If the strike lasted through the end of the year, Mr. Zandi said, “that would be enough to push this economy close to the edge of a recession, given everything else that’s going on.”A 40-day strike against General Motors in 2019 had limited economic effects. One key difference this time is inventories. Total domestic car inventories, which includes new and used cars, have increased from a record low in February 2022 but are less than a quarter of what they were in September 2019.“In 2019, General Motors could look at their inventory and say, ‘We can take a 10-day strike, and hardly anybody who wants one of our cars is going to be unable to get it,” said Patrick Anderson, the principal and chief executive of the Anderson Economic Group. “That’s not the case in 2023.”A strike could also have a spillover effect on the automotive supply chain. Gabriel Ehrlich, an economic forecaster at the University of Michigan, said the automakers’ suppliers — the businesses that make brakes, headlights and catalytic converters — would begin to be felt after about two weeks, with employers cutting back on employment and, as a result, those laid-off workers reducing their own spending.In Michigan, the auto industry has slipped in prominence but still contributes meaningfully to the economy. Mr. Ehrlich’s analysis, which assumes a six-week strike against just one automaker, forecasts a slowdown in payroll growth in the fourth quarter.How the individual automakers weather the storm could vary. Stellantis will be able to satisfy consumer demand longer than Ford or General Motors because it has greater inventories, according to Pat Ryan, the chief executive of Co-Pilot, a car-shopping app that tracks the inventories of car dealers. The result will still be higher prices for consumers, Mr. Ryan said, for both used and new vehicles.Ultimately, the automakers will be able to make up for lost production, and selling their vehicles at higher prices — in addition to not paying wages during the strike — will help for a time. But things will become more challenging if automakers are forced to stop making their most profitable and popular cars, which are already in short supply.“If you’re a G.M. dealer or G.M., you’re going to feel a lot of pain if the Tahoe line shuts down,” Mr. Ryan said. More

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    Automakers and U.A.W. Remain Far Apart as Contract Deadline Nears

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    The United Auto Workers has said it is prepared to strike at General Motors, Ford and Stellantis if a deal is not reached before current contracts end on Thursday.The United Auto Workers union and the three established U.S. automakers remain far apart on wages and other issues with less than a week to go before contracts covering 150,000 union workers expire.So far, the companies — General Motors, Ford Motor and Stellantis, the parent of Chrysler — have offered to raise pay by 14 percent to 16 percent over four years. Their offers include lump sum payments to help ease the impact of inflation, and policy changes that would lift the pay of recent hires and temporary workers, who typically earn about a third less than veteran union members.But the union’s combative new president, Shawn Fain, has dismissed the offers as “insulting,” noting that the three manufacturers have been making near-record profits for almost a decade, and that pay packages of top executives have increased substantially. He has been seeking pay increases of about 40 percent and repeatedly warned that workers were ready to leave assembly lines when the current collective bargaining agreements with the automakers expire on Thursday.Mr. Fain has said the union is willing to strike at all three automakers simultaneously, a step it has never taken before. An across-the-board stoppage would deal a big blow to the economies of Michigan and other states.“We aren’t going to stand by and allow them to drag out the negotiations like they’ve done in the past,” Mr. Fain said Friday in a video on Facebook. “If we hit 11:59 on Thursday without a deal at any of the Big Three automakers, there will be a strike — at all three if need be.”A Summer of StrikesSee how a wave of labor activity in the United States this summer compares with decades past.The talks are taking place during a sweeping shift from combustion engine cars and trucks to electric vehicles, which require fewer parts and less labor to produce. U.A.W. leaders and members are increasingly worried that the transition will eliminate jobs and, over time, reduce wages and benefits.The automakers are also worried about the transition. G.M., Ford and Stellantis are spending tens of billions of dollars to build new factories and scour the world for battery raw materials like lithium. Company executives have argued that offering the U.A.W. members big raises could leave them at a significant cost disadvantage to Tesla, which dominates the U.S. electric car market and employs nonunion workers.The auto industry is the largest U.S. manufacturing sector, and accounts for about 3 percent of the nation’s economic output. The three Detroit automakers operate dozens of plants that make about 500,000 cars a month.The Anderson Economic Group, a research firm in East Lansing, Mich., estimated that a 10-day strike against the three companies would reduce the companies’ profits by $1 billion and wages by $900 million for U.A.W. members and workers employed by other companies that depend on the automakers.Aside from wages, the union and the companies remain far apart on several other matters, including measures to preserve jobs and discourage the closing of U.S. plants, increases in retirement benefits and cost-of-living adjustments, which were once standard in U.A.W. contracts.The union has made some progress in its discussions with Ford. In response to Mr. Fain’s demands, the automaker offered to increase wages by about 15 percent, through a 9 percent increase in base wages and one-time lump sum payments of $11,000 per worker. While Mr. Fain rejected that, the two sides have continued bargaining. He was scheduled to update U.A.W. members later on Friday about Ford’s latest offer.Talks with G.M. and Stellantis have proceeded more slowly. The U.A.W. filed a complaint last week with the National Labor Relations Board, saying the two manufacturers had refused to offer proposals in response to the union’s demands and were not negotiating in good faith.G.M. responded by offering a combination of base wage increases and lump sum payments that would lift worker pay by about 16 percent. “We have already said we want to reward and recognize our employees with wage increases,” Gerald Johnson, G.M.’s executive vice president for global manufacturing, said this week.Agreeing to all of the union’s demands would threaten G.M.’s ability to compete, he added.Mr. Fain said the wage offer didn’t go far enough to make up for the impact of inflation on workers’ take-home pay over the last decade, and was too little in light of the profits G.M. was making. The automaker reported profits of $7 billion in the first half of the year. Mr. Fain also complained that G.M. had rejected the union’s proposals on job security, retiree pay, cost-of-living adjustments and other issues.Stellantis submitted its proposal to the union Friday morning, offering a 14.5 percent rise in base wages with no lump-sum payments.“This is a responsible and strong offer that positions us to continue providing good jobs to our employees,” Mark Stewart, the chief operating officer of Stellantis’s North American operations, said in a statement. “With this offer, we are seeking a timely resolution to our discussions.”Stellantis, which is based in Amsterdam and was created by the merger of Fiat Chrysler and Peugeot in 2021, earned 11 billion euros ($12 billion) in the first half of the year, a record. More

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    Auto Strike Looms, Threatening to Shut Detroit’s Big 3

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    With their contract expiring Sept. 14, the United Auto Workers and the companies are far apart in talks. A walkout could take a big economic toll.The United Auto Workers union and the three Detroit automakers have less than two weeks to negotiate a new labor contract, and a strike of some sort seems increasingly likely.The union’s president, Shawn Fain, has primed rank-and-file members to be prepared to walk off the job if the union’s long list of demands for improved wages and benefits are not met.A strike against one of the companies, especially a prolonged stoppage, could send an economic jolt through several Midwestern states and crimp the profits of General Motors, Ford Motor or Stellantis. G.M. workers walked out for 40 days in 2019 before reaching an agreement.A strike against all three — a step the union has never taken but one Mr. Fain has said he is willing to call for this year — could have a noticeable impact on the broader U.S. economy.“If that happens, even a short strike would impact economies throughout Michigan and across the nation,” said Patrick Anderson, the chief executive of the Anderson Economic Group in East Lansing, Mich.The talks are playing out as automakers are spending tens of billions of dollars to transition to electric vehicles, which require fewer workers to assemble than traditional gasoline-powered cars and trucks. The terms of the new contract will determine how both autoworkers and the companies fare in an E.V.-centric industry.At the same time, significant wage and benefit gains could provide a tailwind for a union movement that has been gaining strength across several industries.There are political stakes as well. President Biden has declared that “the U.A.W. deserves a contract that sustains the middle class” and has named a White House liaison to the union and the automakers. But the U.A.W. has withheld an endorsement of his re-election bid so far, partly because of concern over the union’s share of E.V.-related jobs created with federal subsidies.An agreement before the contracts expire on Sept. 14 is still possible, and talks could continue beyond that date without a walkout. But Mr. Fain has repeatedly said he views Sept. 14 as a deadline — the day a strike could begin. He was elected to the U.A.W. presidency last year as an insurgent, ousting the incumbent on a vow to take a more combative and confrontational approach in the talks than his recent predecessors.“President Fain has declared war, and that usually means there’s going to be a battle, and that battle would be a strike,” said Sam Fiorani, the vice president of global vehicle forecasting at Auto Forecast Solutions, a market researcher. “The U.A.W. leadership is in a position now where they have to prove to the members that they are fighting for them, so it’s pretty unlikely there won’t be a strike.”The auto industry as a whole, including foreign-owned companies with operations in the United States, makes up about 3 percent of the country’s gross domestic product. A 10-day strike against the three Detroit automakers would result in total wage losses of $859 million and manufacturers’ losses of $989 million, according to estimates by Mr. Anderson’s firm.In August, Mr. Fain sent each company a list of demands, including higher wages, improved benefits, a resumption of regular cost-of-living wage bumps to ward off the impact of inflation and an end to a wage structure that leaves newer hires making a third less than veteran workers. Mr. Fain suggested as much as a 40 percent wage increase, noting that the chief executives of each of the companies had their compensation packages rise substantially in the last four years.He also called for contract provisions that would require the automakers to pay workers to do community service if their plant closes, describing it as a way to deter the companies from shuttering factories and to protect towns and local economies from being ravaged by the loss of a major employer.“The manufacturers can absolutely afford some of those demands, but the more they get, the less competitive the companies are going to be,” Mr. Fiorani said.In a video message streamed on Facebook on Thursday, however, Mr. Fain said the union and the automakers remained far apart. Ford, he said, offered wage increases and other provisions that were “insulting” to the U.A.W.In a statement, Ford said it had offered a 9 percent wage increase and one-time lump-sum payments that, combined, would increase a worker’s income by 15 percent over the four-year contract. Mr. Fain said lump-sum payments helped but did not improve a worker’s income over a long period.The U.A.W. and Ford are also at odds over profit-sharing bonuses, the use of temporary workers, cost-of-living wage increases, retiree health care and several other matters.Mr. Fain said that G.M. and Stellantis had not provided counteroffers to the union’s proposals, and that the U.A.W. had filed a complaint with the National Labor Relations Board contending that the two companies were not negotiating in good faith.An assembly line for the Ford F-150 Lightning electric truck. Automakers are spending billions in the transition to electric vehicles, which require fewer workers to make than gasoline-powered cars and trucks.Brittany Greeson for The New York Times“I know this update is infuriating, and believe me when I say I’m fed up,” he said. “Our goal is not to strike. Our goal is to bargain a fair contract, but if we have to strike to win economic and social justice, we will.”G.M. said it was “surprised by and strongly refutes” the charges in the N.L.R.B. complaint. “We have been hyper-focused on negotiating directly and in good faith with the U.A.W. and are making progress,” Gerald Johnson, G.M.’s vice president of global manufacturing, said in a statement.Stellantis was “disappointed to learn that Mr. Fain is more focused on filing frivolous legal charges than on actual bargaining,” the company said in a statement. “We will vigorously defend this charge when the time comes, but right now, we are more focused on continuing to bargain in good faith for a new agreement.”In recent weeks, workers have organized several dozen rallies and other gatherings to prepare for picketing. “I think the membership is energized,” said Christine Bostic, a battery tester at a G.M. electric vehicle plant in Detroit. “The facts are on our side. If it comes to a strike, I’m ready for that.”To soften the impact of a stoppage, the union has amassed a strike fund of $825 million. It plans to pay striking workers $500 a week and cover their health insurance premiums while they are out of work.In recent days, Mr. Fain has joined the union’s negotiating teams in their talks with each of the automakers, an unusual step. Normally, the U.A.W. president does not take a direct role until the final days or hours of negotiations.On Wednesday, he took part in discussions with Stellantis, where tensions between the two sides have been high. When Stellantis responded to Mr. Fain’s demands with a list of cost concessions it wanted from the union, Mr. Fain took to Facebook to denounce them, dropping the document into a wastebasket.Decades ago, when the U.A.W. had more than a million members and the Big Three — G.M., Ford and Chrysler, now part of Stellantis — had almost no foreign competition, a strike by the union could shut down a significant portion of the United States economy.Today, the union is much smaller. G.M., Ford and Stellantis employ about 150,000 U.A.W. workers, and those companies make only a little more than 40 percent of the cars and trucks sold in the U.S. market.But the union entered this year’s talks in a much stronger negotiating position than it had in years. In the past, the Detroit companies were struggling badly against foreign rivals that operate nonunion plants in the South, like Toyota and Honda, and had a significant cost advantage. In most of the last several contracts, G.M., Ford and Stellantis had to get concessions on wages and benefits to survive.Over the last 10 years, however, all three companies have rung up record profits, thanks in part to the concessions they won from the union as well as the shift in consumer preferences to high-margin trucks and large sport utility vehicles.In the first half of this year, Ford made $3.7 billion and G.M. made $5 billion. Stellantis reported profits of 11 billion euros (about $11.9 billion).In the past, the U.A.W. has chosen one company — it was G.M. four years ago — as the “target” to focus on in the talks. Mr. Fain has said the union could target all three companies this time around, but many analysts think the union will eventually choose Stellantis. In addition to the strains between the company and the union, their talks involve a plant in Belvidere, Ill., that Stellantis has idled and that the union wants the company to reopen.Getting Stellantis to reopen the plant is a critical task for Mr. Fain. Four years ago, G.M. closed a plant in Ohio and the U.A.W. failed in its efforts to push the company to reopen it. In his campaign for the presidency, Mr. Fain promised members that his tougher approach would prove successful this time.The union could get a hand in this battle from the federal government. On Thursday, the Energy Department said it had made $2 billion in grants and $10 billion in loans available to auto companies to convert existing factories that build gasoline-powered cars and trucks into plants that produce hybrid and electric vehicles.Stellantis, like G.M. and Ford, aims to introduce several more electric models over the next few years and will probably have to retool some plants to make them. It is already building a battery plant in Indiana for its E.V. push.Mr. Fiorani suggested that Stellantis could decide to overhaul the Belvidere plant to make electric models. “Stellantis could find a product to go in there,” he said. “For the U.A.W. to truly win something, though, it has to be electric vehicles that Stellantis would plan on making for several years.” More

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    UAW Votes to Authorize Strikes if Negotiations Fail

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    The United Auto Workers union is seeking big raises and other gains in contract talks with General Motors, Ford and Stellantis.The United Auto Workers union said on Friday that 97 percent of its members had voted to authorize strikes against General Motors, Ford Motor and Stellantis if the union and companies were unable to negotiate new labor contracts.The result gives the union’s president, Shawn Fain, the power to tell workers to walk off the job once the current contracts expire on Sept. 14.Strike authorization votes are normally formalities that pass by significant margins and do not ensure strikes. But this vote comes as the newly energized U.A.W. takes a more assertive stance with automakers, part of a larger shift in organized labor.G.M., Ford and Stellantis have posted strong profits for about a decade. That has emboldened Mr. Fain and his members to call for substantial wage increases, cost-of-living adjustments, and improved pensions and health care benefits.“This is our time to take back what we are owed,” he said on Facebook Live on Friday. “We are united, and we are not afraid,” he added.Mr. Fain, who was narrowly elected president this year in the union’s first direct election of its top leaders, appears to have united the union’s members. He appeared at rallies with workers in Detroit on Wednesday and in Louisville, Ky., on Thursday and Friday. About a dozen similar events are planned over the next two weeks. Such events were rare in contract talks over the last 20 years.“There’s nervousness, but there’s excitement,” Luigi Gjokaj, a vice president at U.A.W. Local 51, said at the Detroit rally. “If the company comes to the table and they’re fair, we’ll have an agreement. If it has to go to a strike, we are prepared.”Mr. Fain spoke to about 100 workers at that rally from the bed of a pickup truck just outside a Stellantis plant that makes the Jeep Wagoneer, a highly profitable sport utility vehicle.“We’re not asking to be millionaires,” he said to loud cheers. “We just want our fair share.”In a statement after the result of the strike vote was announced, Ford said it hoped to work with the U.A.W. toward “creative solutions during this time when our dramatically changing industry needs a skilled and competitive work force more than ever.”This month, Mr. Fain sent the companies a list of demands, including the possibility of working only four days a week and wage increases of 40 percent, noting that the chief executives of G.M., Ford and Stellantis have been awarded bigger compensation packages over the last four years. New hires at auto plants start at about $16 an hour and over several years can work their way up to the $32 an hour earned by veteran workers.G.M., Ford and Stellantis have suggested they will probably agree to some form of higher wages. In a fresh indication of how the talks may go, an Ohio battery plant owned jointly by G.M. and LG Energy Solution, a South Korean battery maker, agreed on Thursday to increase the wages of 1,900 U.A.W. workers by 25 percent on average.Mr. Fain had repeatedly criticized wages at the plant, which had started at about $16 an hour, as being too low. The plant is covered by a separate bargaining agreement from the one the union is negotiating for workers in G.M.’s wholly owned plants. Wages there will now start at about $20 an hour.The three manufacturers aim to minimize increases in labor costs in any new contract because they are spending tens of billions of dollars on a momentous transition to electric vehicles. The companies have suggested that agreeing to all or most of Mr. Fain’s demands would leave them at a competitive disadvantage against Tesla, the dominant maker of electric cars, and European and Asian automakers that operate nonunion plants in the United States.President Biden told reporters on Friday that he was “concerned” about a potential strike by autoworkers. “I’m talking with the U.A.W.,” he said.Mr. Biden said the transition to electric vehicles should not shortchange workers. “I think that there should be a circumstance where jobs that are being displaced are replaced with new jobs,” he said, adding that the pay for those new jobs “should be commensurate.”Former President Donald J. Trump, who is the leading candidate for the Republican nomination, has seized on autoworkers’ unease about the switch to electric vehicles to court the U.A.W., which typically backs Democrats but has declined to endorse Mr. Biden so far.Despite the costs of investing in electrification, the three automakers are enjoying healthy profits.G.M. said in July that it expected to earn more than $9.3 billion this year, about $1 billion more than a previous forecast. Stellantis, which is based in Amsterdam and owns Chrysler, Jeep, Ram and other auto brands, made 11 billion euros (about $11.9 billion) in the first half of this year, a record. Ford expects earnings before taxes of $11 billion to $12 billion this year. All three companies make most of their profits in North America.“Regardless of what other opinions might be, business profits enable future investments, which support long-term job security and opportunities for all,” said Gerald Johnson, G.M.’s executive vice president for global manufacturing and sustainability, in a video message to employees last week.The U.A.W. typically names one company that it will focus on in negotiations and make the target of a strike if it cannot reach an agreement. The union has not done so thus far, although Mr. Fain has publicly sparred the most with Stellantis.After Mr. Fain presented his demands, Stellantis responded with proposals that would increase how much workers contributed to the cost of health care, reduce the company’s contributions to retirement accounts and allow the company to close plants temporarily with little advance notice.In a Facebook video, Mr. Fain angrily denounced the Stellantis proposals and tossed a copy in a wastebasket. “That’s where it belongs, the trash, because that’s what it is,” he said.Stellantis’s chief operating officer for North America, Mark Stewart, said in a letter to employees that he was “incredibly disappointed” by Mr. Fain’s remarks. “The theatrics and personal insults will not help us reach an agreement,” Mr. Stewart said.Tensions between the U.A.W. and Stellantis, which was formed in the 2021 merger of Fiat Chrysler and Peugeot S.A., have been simmering since the automaker idled a Jeep plant in Illinois. One of Mr. Fain’s key objectives is getting the company to reopen the factory. More

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    Lawmakers Challenge Ford and Chinese Battery Partner Over Forced Labor

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    Republicans are raising fresh concerns about CATL, the battery maker Ford is working with to bring new technology to the U.S., and its connections to Xinjiang.A partnership between Ford Motor and a major Chinese battery maker is facing scrutiny by Republican lawmakers, who say it could make an American automaker reliant on a company with links to forced labor in China’s Xinjiang region.In a letter sent to Ford on Thursday, the chairs of the House Select Committee on the Chinese Communist Party and the House Ways and Means Committee demanded more information about the partnership, including what they said was a plan by Ford to employ several hundred workers from China at a new battery factory in Michigan.Ford announced in February that it planned to set up the $3.5 billion factory using technology from Contemporary Amperex Technology Ltd., known as CATL, the world’s largest maker of batteries for electric vehicles. CATL produces about a third of electric vehicle batteries globally and supplies General Motors, Volkswagen, BMW, Tesla and other major automakers.Ford has defended the partnership, saying it will help diversify Ford’s supply chain and allow a battery that is less expensive and more durable than current alternatives to be made in the United States for the first time, rather than imported.But lawmakers, who previously criticized the partnership, cited evidence that CATL had not relinquished its ownership of a company it helped set up in Xinjiang, where the United Nations has identified systemic human rights violations.CATL publicly divested its share of the company, Xinjiang Zhicun Lithium Industry Company, in March, after its deal with Ford was announced. But the shares were bought by an investment partnership in which CATL owned a partial stake and a former CATL manager who holds leadership roles in other companies owned by the battery maker, corporate records show.The circumstances of the sale raise “serious questions about whether CATL is attempting to obscure links to forced labor,” wrote Representatives Mike Gallagher of Wisconsin, the chairman of the select committee, and Jason Smith of Missouri, the chairman of the Ways and Means Committee. The lawmakers, citing details of Ford’s licensing agreement that are on file with the select committee, also criticized the automaker’s commitment to employ several hundred Chinese workers. Employees from China would set up and maintain CATL’s equipment at the Michigan factory until about 2038, the lawmakers said. The factory is expected to employ 2,500 U.S. workers, Ford has said.“Ford has argued that the deal will create thousands of American jobs, further Ford’s ‘commitments to sustainability and human rights’ and lead to American battery technology advancements,” they wrote. “But newly discovered information raises serious questions about each claim.”T.R. Reid, a spokesman for Ford, said the company was going through the letter and would respond in good faith. He said that human rights were fundamental to how Ford did business, and that the automaker was thorough in assessing such issues.“There has been an awful lot said and implied about this project that is incorrect,” Mr. Reid said. “At the end of the day, we think creating 2,500 good-paying jobs with a new multibillion investment in the U.S. for great technology that we’ll bring to bear in great electric vehicles is good all the way around.”CATL’s collaboration with Ford could be a bellwether for the electric vehicle industry in the United States. Critics have labeled the agreement a “Trojan horse” for Chinese interests and called for scuttling the partnership. If it succeeds, they say, reliance on Chinese technology could become the norm for the U.S. electric vehicle industry.Ultimately, China’s control over key technologies like batteries could leave the United States “in a far weaker position,” said Erik Gordon, a clinical assistant professor at the University of Michigan’s Ross School of Business.“The profit margins go to the innovators who provide the advanced technology, not the people with screwdrivers that assemble the advanced technology,” he said.But CATL and other Chinese companies have battery technology not readily available from suppliers in the United States or Europe. The Michigan plant would be the first in the United States to produce so-called LFP batteries that use lithium, iron and phosphate as their main active materials.They are heavier than the lithium, nickel and manganese batteries currently used by Ford and other automakers but less expensive to make and more durable, able to withstand numerous charges without degrading. They also do not use nickel or cobalt, another battery material, which are often mined in environmentally damaging ways, and sometimes with child labor.Without the most advanced or least expensive batteries, U.S. carmakers could fall behind Chinese rivals like BYD that are pushing into Europe and other markets outside China. Americans may also have to pay more for electric cars and trucks, which would slow sales of vehicles that do not emit greenhouse gases.A battery unveiled by CATL last year delivers hundreds of miles of driving range after a charge of just 10 minutes.“The hard truth is that the Chinese took a huge gamble on electric vehicles and plopped down over a trillion Chinese dollars and subsidies on this industry, and it just so happens that gamble came up all aces,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies.“If you decide not to partner with a very large battery maker, then you’re essentially committing to delaying the U.S. energy transition,” he added.Ford plans to use batteries made with CATL technology in lower-priced versions of vehicles like the Mustang Mach-E and F-150 Lightning pickup. The least expensive version of Tesla’s Model 3 sedan comes with an LFP battery that CATL is widely reported to have supplied.For decades, Western companies have had a monopoly on the world’s most advanced technologies, and have sought access to the Chinese market while also safeguarding their intellectual property.But China’s dominance in electric vehicle batteries, as well as in the production of solar panels and wind turbines, has flipped that dynamic. It has created a particularly tricky dilemma for the Biden administration and other Democrats, who want to reduce the country’s reliance on China but also argue that the United States must quickly make a transition to cleaner energy sources to try to mitigate climate change.The solar and electric vehicle battery industry’s exposure to Xinjiang further complicates the situation. The Biden administration has condemned the Chinese government for carrying out genocide and crimes against humanity in the region.The United States last year barred imports of products made in whole or in part in Xinjiang, saying companies operating in the region are not able to ensure that their facilities are free of forced labor.In 2022, CATL and a partner registered a lithium processing company in the region called Xinjiang Zhicun Lithium Industry Company, which promoted plans to become the world’s largest producer of lithium carbonate, a key battery component.Through a series of subsidiaries and shareholder relationships, that Xinjiang lithium company has financial ties to a Chinese electricity company, Tebian Electric Apparatus Stock Company, or TBEA, according to records that The New York Times reviewed through Sayari Graph, a mapping tool for corporate ownership. TBEA has participated extensively in so-called poverty alleviation and labor transfer programs in Xinjiang that the United States considers a form of forced labor.A CATL battery plant under construction in Ningde, China, in 2021. The company has said it prohibits any form of forced labor in its supply chain.Qilai Shen for The New York TimesWhile the Chinese government argues that labor transfer and poverty alleviation programs are aimed at improving living standards in the region, human rights experts say that they are also directed at pacifying and indoctrinating the population, and that Uyghurs and other minority groups there cannot say no to these programs without fear of detention or punishment.CATL did not respond to a request for comment. In December, it told The Times that it was a minority shareholder in the Xinjiang company and strictly prohibited any form of forced labor in its supply chain.The Republican lawmakers also raised concerns about whether batteries made at Ford’s Michigan plant would qualify for tax credits that the Biden administration was offering consumers who bought electric vehicles as part of the Inflation Reduction Act.The law prohibits “foreign entities of concern” — like companies in China, Russia, Iran or North Korea — from benefiting from government tax credits. But because Ford is licensing CATL technology for the plant — rather than forming a joint venture, as has often been the case with automakers and battery suppliers — the batteries made in Michigan may still qualify for those incentives.The Biden administration has not yet clarified exactly how the restriction on foreign entities will be applied. But Ford officials said they had been in conversation with the administration about the Michigan plant, and were confident that the partnership would qualify for all of the law’s benefits.“We think batteries built by American workers in an American plant run by the wholly owned subsidiary of an American company will and should qualify,” Mr. Reid, the Ford spokesman, said. More

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    Ford Follows Tesla in Cutting Electric Vehicle Prices

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    The automaker reduced the price of the Mustang Mach-E by up to $5,900 after Tesla slashed prices of its cars by as much as 20 percent.Ford Motor said on Monday that it was cutting prices on its top-selling battery-powered model, the Mustang Mach-E, and increasing production of the sport utility vehicle. It was the latest sign of intensifying competition in the electric car market.Two weeks ago, Tesla slashed prices of its electric cars by as much as 20 percent in response to softening demand around the world.The price cuts for the two most affordable versions of the Mach-E amounted to less than $1,000 each. Other models, with longer-range batteries and premium options, were reduced $3,680 to $5,900, reductions of 6 percent to 9 percent.“We want to make E.V.s more accessible, so we’re increasing production and reducing prices across the Mach-E lineup,” Ford’s chief executive, Jim Farley, said on Twitter. He added that “with higher production, we’re reducing costs, which allows us to share these savings with customers.”The lowest-priced Mustang Mach-E — a rear-wheel-drive model with a standard battery — now has a list price of $45,995, a reduction of $900. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, a cut of $5,900.Tesla’s least expensive car is the Model 3, which is smaller than the Mustang Mach-E and starts at $43,990. The all-wheel-drive Model Y, a more direct competitor of the electric Mustang, starts at $53,490. An all-wheel-drive Mustang Mach-E with comparable battery range now lists for $53,995.Electric vehicles priced below $55,000 can qualify for federal tax credits of $7,500 that were made available starting Jan. 1 under the Inflation Reduction Act. Ford’s price cuts will make more versions of the Mach-E eligible for the credit.Ford said the new prices would automatically apply to customers who had placed orders and were waiting for their cars. Ford’s credit division is also offering subsidized interest rates as low as 5.34 percent on Mach E orders placed between Jan. 30 and April 3.Tesla has long dominated the electric car market, which it largely had to itself until the last couple of years, but is increasingly encountering stiff competition. Its rate of growth has slowed in China, where its is now outsold by a local manufacturer, BYD. In addition to Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models in the United States that are selling well and are generally cheaper than Tesla’s luxury models.In 2022, Ford sold just under 40,000 Mach-Es, about 45 percent more than in 2021. That made the Mach-E the third-best-selling electric model after Tesla’s Model Y and Model 3.For much of the last two years, Tesla, Ford and other automakers raised prices of electric vehicles because demand for battery-powered cars far outstripped supply. But demand for cars and other big-ticket goods has weakened in recent months as the Federal Reserve has raised interest rates significantly. Fed policymakers are expected to slow their rate increases at their first meeting of the year on Wednesday. More

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    in Economy

    Which Electric Vehicles Qualify for Federal Tax Credits?

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    Here is a partial list of electric and plug-in hybrid vehicles that will qualify for federal tax credits in 2023.The Treasury Department on Thursday published a partial list of new electric and plug-in hybrid cars that will qualify for tax credits of up to $7,500. The list is expected to be updated over the coming days and weeks.The credits will apply to sedans that cost no more than $55,000 and sport utility vehicles and pickup trucks that cost up to $80,000. In addition, only buyers who earn less than $150,000 a year as an individual or $300,000 a year as a couple can claim the credits.The list could change in March, when new rules take effect that require automakers to use battery raw materials and components from North America or a trade ally. Those rules are still being formulated, and it’s not clear exactly when they will start to apply.Here are the cars on the list, by automaker:AudiQ5 TFSI e Quattro plug-in hybridFord MotorFord Escape Plug-in HybridFord E-TransitFord F-150 LightningFord Mustang Mach-ELincoln Aviator Grand Touring plug-in hybridLincoln Corsair Grand Touring plug-in hybridNissanLeafRivianR1TR1SStellantisChrysler Pacifica plug-in hybridJeep Wrangler 4xe plug-in hybridJeep Grand Cherokee 4xe plug-in hybridTeslaModel 3Model YVolkswagenID.4VolvoVolvo S60 plug-in hybrid More

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    in Economy

    Yellen Embarks on Economic Victory Tour as Midterm Elections Approach

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    DEARBORN, Mich. — Emerging from months of inflation and recession fears, the Biden administration is pivoting to recast its stewardship of the U.S. economy as a singular achievement. In their pitch to voters, two months before midterm elections determine whether Democrats will maintain full control of Washington, Biden officials are pointing to a postpandemic resurgence of factories and “forgotten” cities.The case was reinforced on Thursday by Treasury Secretary Janet L. Yellen, who laid out the trajectory of President Biden’s economic agenda on the floor of Ford Motor’s electric vehicle factory in Dearborn. Mich. Surrounded by F-150 Lightning trucks, Ms. Yellen described an economy where new infrastructure investments would soon make it easier to produce and move goods around the country, bringing prosperity to places that have been left behind.“We know that a disproportionate share of economic opportunity has been concentrated in major coastal cities,” Ms. Yellen said in a speech. “Investments from the Biden economic plan have already begun shifting this dynamic.”Her comments addressed a U.S. economy that is at a crossroads. Some metrics suggest that a run of the highest inflation in four decades has peaked, but recession fears still loom as the Federal Reserve continues to raise interest rates to contain rising prices. The price of gasoline has been easing in recent weeks, but a European Union embargo on Russian oil that is expected to take effect in December could send prices soaring again, rattling the global economy. Lockdowns in China in response to virus outbreaks continue to weigh on the world’s second-largest economy.In her speech on Thursday, Ms. Yellen said the legislation that Mr. Biden signed this year to promote infrastructure investment, expand the domestic semiconductor industry and support the transition to electric vehicles represented what she called “modern supply-side economics.” Rather than relying on tax cuts and deregulation to spur economic growth, as Republicans espouse, Ms. Yellen contends that investments that make it easier to produce products in the United States will lead to a more broad-based and stable economic expansion. She argued that an expansion of clean energy initiatives was also a matter of national security.“It will put us well on our way toward a future where we depend on the wind, sun and other clean sources for our energy,” Ms. Yellen said as Ford’s electric pickup trucks were assembled around her. “We will rid ourselves from our current dependence on fossil fuels and the whims of autocrats like Putin,” she said, referring to President Vladimir V. Putin of Russia.The remarks were the first of several that top Biden administration officials and the president himself are planning to make this month as midterm election campaigns around the country enter their final stretch. After months of being on the defensive in the face of criticism from Republicans who say Democrats fueled inflation by overstimulating the economy, the Biden administration is fully embracing the fruits of initiatives such as the $1.9 trillion American Rescue Plan of 2021, which disbursed $350 billion to states and cities.At the factory, Ms. Yellen met with some of Ford’s top engineers and executives. During her trip to Michigan, she also made stops in Detroit at an East African restaurant, an apparel manufacturer and a coffee shop that received federal stimulus funds. She dined with Detroit’s mayor, Mike Duggan, and Michigan’s lieutenant governor, Garlin Gilchrist.Detroit was awarded $827 million through the relief package and has been spending the money on projects to clean up blighted neighborhoods, expand broadband access and upgrade parks and recreation venues.Although Ms. Yellen is helping to lead what Treasury officials described as a victory lap, some of her top priorities have yet to be addressed..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-ok2gjs{font-size:17px;font-weight:300;line-height:25px;}.css-ok2gjs a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.The so-called Inflation Reduction Act, which Congress passed last month, did not contain provisions to put the United States in compliance with the global tax agreement that Ms. Yellen brokered last year, which aimed to eliminate corporate tax havens, leaving the deal in limbo. On Thursday, she said she would continue to “advocate for additional reforms of our tax code and the global tax system.”Despite Ms. Yellen’s belief that some of the tariffs that the Trump administration imposed on Chinese imports were not strategic and should be removed, Mr. Biden has yet to roll them back. In her speech, Ms. Yellen accused China of unfairly using its market advantages as leverage against other countries but said maintaining “mutually beneficial trade” was important.Ms. Yellen also made no mention in her speech of Mr. Biden’s recent decision to cancel student loan debt for millions of Americans. She believed the policy, which budget analysts estimate could cost the federal government $300 billion, could fuel inflation.Treasury Department officials said Detroit, the center of the American automobile industry, exemplified how many elements of the Biden administration’s economic agenda are coming together to benefit a place that epitomized the economic carnage of the 2008 financial crisis. Legislation that Democrats passed this year is meant to create new incentives for the purchase of electric vehicles, improve access to microchips that are critical for car manufacturing and smooth out supply chains that have been disrupted during the pandemic.“There will be greater certainty in our increasingly technology-dependent economy,” Ms. Yellen said.But the transition to a postpandemic economy has had its share of turbulence.Ford said last month that it was cutting 3,000 jobs as part of an effort to reduce costs and become more competitive amid the industry’s evolution to electric vehicles. The company also cut nearly 300 workers in April.“People in Michigan can be pretty nervous about the transition to electric vehicles because they actually require by some estimation a lot less labor to assemble because there are fewer parts,” said Gabriel Ehrlich, an economist at the University of Michigan. “There are questions about what does that mean for these jobs.”Republicans in Congress continue to assail the Biden administration’s management of the economy.“Inflation continues to sit at a 40-year high, eating away at paychecks and sending costs through the roof,” Representative Tim Walberg, a Michigan Republican, said on Twitter on Thursday. “While in Michigan today, Secretary Yellen should apologize for being so wrong about the inflation-fueling impact of the Biden administration’s runaway spending.”Ms. Yellen will be followed to Michigan next week by Mr. Biden, who will attend Detroit’s annual auto show.The business community in Detroit, noting the magnetism of Michigan’s swing-state status, welcomed the attention.“We’re about as purple as it gets right now,” Sandy K. Baruah, the chief executive of the Detroit Regional Chamber, a business group.Noting the importance of the automobile industry to America’s economy, Mr. Baruah added: “When you think about blue-collar jobs and the transitioning nature of blue-collar jobs, especially in the manufacturing space, Michigan has the perfect optics.” More