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    U.A.W. Starts Strike Small, but Repercussions Could Prove Far-Reaching

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    Autoworkers walked off the job on Friday at three factories that produce some of the Detroit carmakers’ most popular vehicles, the opening salvos in what could become a protracted strike that hurts the U.S. economy and has an impact on the 2024 presidential election.Nearly 13,000 members of the United Auto Workers at plants in Ohio, Michigan and Missouri joined early Friday in what the union described as a targeted strike that could expand to more plants if its demands for pay raises of up to 40 percent and other gains were not met.The union’s four-year contracts with three automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — expired Thursday, and the companies and the union remained far from striking new deals.The U.A.W.’s president, Shawn Fain, used sweeping language on Thursday to describe why his members were going on strike against all three automakers at the same time — something the union had never done in its nearly 90-year history.“This is our generation’s defining moment,” Mr. Fain, the union’s first leader elected directly by members, said in an online video. “The money is there, the cause is righteous, the world is watching, and the U.A.W. is ready to stand up.”The union and the companies did not negotiate on Friday, but the U.A.W. said it planned to resume bargaining on Saturday. President Biden dispatched two senior administration officials to Detroit on Friday to encourage the companies and union to reach agreements.At a Ford plant in Wayne, Mich., west of Detroit, strikers waved placards — one read, “Record Profits; Record Contracts” — and gave thumbs-up to honking vehicles. A metal sign on a chain-link fence read, “Absolutely NO foreign cars allowed.” The protesters were assigned to a six-hour shift on the picket line. If the strike continues, they will be called to one shift per week.While first and foremost a battle between autoworkers and automakers, the conflict could have far-reaching consequences. A lengthy strike would reduce the number of new cars available for sale, which could fuel inflation and force the Federal Reserve to keep interest rates high.The U.A.W.’s president, Shawn Fain, center, at the walkout early Friday at Ford Motor’s assembly plant in Wayne, Mich.Cydni Elledge for The New York TimesA strike also presents a quandary for Mr. Biden, who has called for rising incomes but must also be mindful of the strike’s economic impact and his goal to promote electric vehicles as a solution to climate change.Speaking at the White House on Friday, the president strongly supported the union. “Over the past decade, auto companies have seen record profits, including in the last few years, because of the extraordinary skill and sacrifices of U.A.W. workers,” he said. “But those record profits have not been shared fairly.”The U.A.W. says its pay demands roughly correspond to the increases in the compensation of the top executives at Ford, G.M. and Stellantis. The raises are also meant to help compensate workers for the ground they have lost to inflation and big concessions the union made to the automakers after the 2007-8 financial crisis, when G.M. and Chrysler were forced to restructure themselves in bankruptcy court.But auto executives say they already pay production workers substantially more than rivals, like Tesla and Toyota, whose U.S. workers are not unionized. The companies also contend that such big raises would undermine their efforts to develop electric vehicles and remain relevant as the industry makes a difficult and costly shift from gasoline cars and trucks to electric vehicles.If unions got all that they were asking for, “we would have to cancel our E.V. investments,” Jim Farley, the chief executive of Ford, said in an interview on Friday. Instead, Ford would need to concentrate on large sport utility vehicles and pickups that generate the most profit, he said.Ford, which employs the most union members, reported a profit of $1.9 billion in the second quarter, equal to 4 percent of its sales. Tesla made $2.7 billion in the same period, about 11 percent of its sales.Mr. Farley sounded pessimistic about the chances of agreeing on a contract soon. “They are not negotiating in good faith if they are proposing deals that they know are going to crater our investments,” he said.Mr. Fain’s decision to shut down just three factories is a departure for the union, which in previous strikes typically walked out of all the factories of a single automaker. By interrupting production of some of the most profitable vehicles, while allowing most plants to keep operating, the union hopes to inflict pain on the carmakers while allowing most of its members to continue collecting paychecks.But it may be difficult for the union to limit the damage to its members’ incomes. Ford told workers at a facility in Michigan, who were not on strike, to stay home Friday because of parts shortages caused by the strike. G.M. said it would probably lay off 2,000 workers at a factory in Kansas next week because of a lack of parts produced at the factory near St. Louis that is on strike.Fewer than 10 percent of the nearly 150,000 U.A.W. members at the three companies are on strike. Limited strikes could allow the union to maintain the pressure longer by preserving its strike fund of $825 million. The union will pay striking workers $500 a week and cover their health insurance premiums.Automakers have been earning record profits “because of the extraordinary skill and sacrifices of U.A.W. workers,” President Biden said at the White House on Friday.Anna Rose Layden for The New York TimesIn addition to the Ford plant in Michigan, which makes the Bronco and the Ranger pickup truck, and the G.M. plant in Wentzville, Mo., which makes the GMC Canyon and the Chevrolet Colorado, workers shut down a Stellantis complex in Toledo, Ohio, that makes the Jeep Gladiator and Jeep Wrangler. If no agreement is reached, the union is expected to target additional factories in weeks to come.The union is also seeking cost-of-living adjustments that would protect workers if inflation flares up again. And it wants to reinstate pensions that the union agreed to do away with for newer workers after the financial crisis, improved retiree benefits and shorter work hours. The union also wants to eliminate a wage system that starts new hires at much lower wages than the top U.A.W. pay of $32 an hour.As of Friday last week, the companies had offered to raise pay by around 14.5 percent to 20 percent over four years. Their offers include lump-sum payments to help offset the effects 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.In a last-minute attempt to keep assembly lines running, G.M. offered its employees a 20 percent raise late Thursday and said it was willing to pay cost-of-living adjustments to veteran workers. The 20 percent increase would be far more than employees had received in decades. But the union rejected the offer, which it says would barely compensate for inflation.Autoworkers striking at the G.M. factory in Wentzville, Mo.Neeta Satam for The New York TimesLeaders of the automakers have criticized the U.A.W.’s tactics, focusing on Mr. Fain, who became president in March and declared an end to what he said were overly friendly relations between union leaders and auto executives. He took office after a federal corruption investigation resulted in prison terms for two former U.A.W. presidents.Carlos Tavares, the chief executive of Stellantis, has called Mr. Fain’s strategy “posturing.” Mr. Farley of Ford said the two sides should be negotiating instead of “planning strikes and P.R. events.” And Mary T. Barra, the G.M. chief executive, said that “every negotiation takes on the personality of its leader.”If the autoworkers are successful, they could inspire workers in other industries. Union activism is on the rise: Hollywood screenwriters and actors have been on strike for months, and in August, United Parcel Service employees won their biggest raises ever in a contract negotiated by the International Brotherhood of Teamsters.“Workers have been squeezed for too long and now are realizing they can do something about it,” said Mijin Cha, an assistant professor at the University of California, Santa Cruz, who studies the relationship between labor’s interests and the fight against climate change. “People see there is a pathway to more economic security and workers do have power together.”Late on Friday, at an outdoor rally in downtown Detroit attended by several hundred U.A.W. members, Mr. Fain introduced Senator Bernie Sanders, a Vermont independent, who told the crowd: “The fight you are waging here is not just about decent wages and working conditions and pensions in the auto industry. It’s a fight to take on corporate greed.”The strikes come as auto production is still recovering from the effects of the pandemic, which caused shortages of semiconductors and other components. Car prices and wait times have come down, but dealer inventories remain low and a lengthy strike could eventually make it hard to find popular U.S.-made models.“We’re not back to speed inventory-wise,” said Wes Lutz, the owner of Extreme Dodge, a car dealership in Jackson, Mich.Wes Lutz, the owner of Extreme Dodge in Michigan said, “We’re not back to speed inventory wise.”Brittany Greeson for The New York TimesScarcity is not always bad for carmakers. It allowed them to earn higher profit margins during the pandemic. And it would benefit any carmakers that were having trouble moving some models. Pat Ryan, chief executive of the car-shopping app Co-Pilot, said that Stellantis had at least 100 days of inventory for brands like Dodge and Chrysler, and that a strike could help it clear many dealers’ lots.Still, if prices for popular models rise, that will be yet another speed bump in the Federal Reserve’s road to lowering inflation, and a political liability for Mr. Biden. The president, who has no formal role in the negotiations, said Friday that he had been in touch with union leaders and auto executives, in addition to dispatching the two administration officials to Detroit.Reporting was contributed by More

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    UAW Standoff Poses Risk for Biden’s Electric Vehicle Commitment

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    A looming auto industry strike could test the president’s commitment to making electric vehicles a source of well-paying union jobs.President Biden has been highly attuned to the politics of electric vehicles, helping to enact billions in subsidies to create new manufacturing jobs and going out of his way to court the United Automobile Workers union.But as the union and the big U.S. automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — hurtle toward a strike deadline set for Thursday night, the political challenge posed by the industry’s transition to electric cars may be only beginning.The union, under its new president, Shawn Fain, wants workers who make electric vehicle components like batteries to benefit from the better pay and labor standards that the roughly 150,000 U.A.W. members enjoy at the three automakers. Most battery plants are not unionized.The Detroit automakers counter that these workers are typically employed in joint ventures with foreign manufacturers that the U.S. automakers don’t wholly control. The companies say that even if they could raise wages for battery workers to the rate set under their national U.A.W. contract, doing so could make them uncompetitive with nonunion rivals, like Tesla.And then there is former President Donald J. Trump, who is running to unseat Mr. Biden and has said the president’s clean energy policies are costing American jobs and raising prices for consumers.White House officials say Mr. Biden will still be able to deliver on his promise of high-quality jobs and a strong domestic electric vehicle industry.The head of the United Automobile Workers, Shawn Fain, center, wants his union’s wages and labor standards to apply to nonunion workers who make electric vehicle components.Brittany Greeson for The New York Times“The president’s policies have always been geared toward ensuring not only that our electric vehicle future was made in America with American jobs,” said Gene Sperling, Mr. Biden’s liaison to the U.A.W. and the auto industry, “but that it would promote good union jobs and a just transition” for current autoworkers whose jobs are threatened.But in public at least, the president has so far spoken only in vague terms about wages. Last month, he said that the transition to electric vehicles should enable workers to “make good wages and benefits to support their families” and that when union jobs were replaced with new jobs, they should go to union members and pay a “commensurate” wage. He is encouraging the companies and the union to keep bargaining and reach an agreement, one of Mr. Biden’s economic advisers, Jared Bernstein, told reporters on Wednesday.A strike could force Mr. Biden to be more explicit and choose between his commitment to workers and the need to broker a compromise that averts a costly long-term shutdown.“Battery workers need to be paid the same amount as U.A.W. workers at the current Big Three,” said Representative Ro Khanna, a Democrat from California who has promoted government investments in new technologies.Mr. Khanna added, “It’s how we contrast with Trump: We’re for creating good-paying manufacturing jobs across the Midwest.”At the heart of the debate is whether the shift to electric vehicles, which have fewer parts and generally require less labor to assemble than gas-powered cars, will accelerate the decline of unionized work in the industry.Foreign and domestic automakers have announced tens of thousands of new U.S.-based electric vehicle and battery jobs in response to the subsidies that Mr. Biden helped enact. But most of those jobs are not unionized, and many are in the South or West, where the U.A.W. has struggled to win over autoworkers. The union has tried and failed to organize workers at Tesla’s factory in Fremont, Calif., and Southern plants owned by Volkswagen and Nissan.A Ford Lightning plant in Dearborn, Mich. The U.A.W. worries that letting battery makers pay lower wages will allow G.M., Ford and Stellantis to replace much of their current U.S. work force with cheaper labor.Brittany Greeson for The New York TimesAs a result, the union has focused its efforts on battery workers employed directly or indirectly by G.M., Ford and Stellantis. The going wage for this work tends to be far below the roughly $32 an hour that veteran U.A.W. members make under their existing contracts with three companies.Legally, employees of the three manufacturers can’t strike over the pay of battery workers employed by joint ventures. But many U.A.W. members worry that letting battery manufacturers pay far lower wages will allow G.M., Ford and Stellantis to replace much of their current U.S. work force with cheaper labor, so they are seeking a large wage increase for those workers.“What we want is for the E.V. jobs to be U.A.W. jobs under our master agreements,” said Scott Houldieson, chairperson of Unite All Workers for Democracy, a group within the union that helped propel Mr. Fain to the presidency.The union’s officials have pressed the auto companies to address their concerns about battery workers before its members vote on a new contract. They say the companies can afford to pay more because they collectively earned about $250 billion in North America over the past decade, according to union estimates.But the auto companies, while acknowledging that they have been profitable in recent years, point out that the transition to electric vehicles is very expensive. Industry executives have suggested that it is hard to know how quickly consumers will embrace electric vehicles and that companies needed flexibility to adjust.Even if labor costs were not an issue, said Corey Cantor, an electric vehicle analyst at the energy research firm BloombergNEF, it could take the Big Three several years to catch up to Tesla, which makes about 60 percent of fully electric vehicles sold in the United States.A strike could force Mr. Biden to choose between his commitment to workers and the need to avert a costly shutdown of the U.S. auto industry.Bill Pugliano/Getty ImagesData from BloombergNEF show that G.M., Ford and Stellantis together sold fewer than 100,000 battery electric vehicles in the United States last year; in 2017, Tesla alone sold 50,000. It took Tesla another five years to top half a million U.S. sales. (The Big Three also sold nearly 80,000 plug-in hybrids last year.)The three established automakers had hoped to use the transition to electric cars to bring their costs more in line with their competitors, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a research firm. If they can’t, he added, they will have to look for savings elsewhere.In a statement, Stellantis said its battery joint venture “intends to offer very competitive wages and benefits while making the health and safety of its work force a top priority.”Estimates shared by Ford put hourly labor costs, including benefits, for the three automakers in the mid-$60s, versus the mid-$50s for foreign automakers in the United States and the mid-$40s for Tesla.Ford’s chief executive, Jim Farley, said in a statement last month that the company’s offer to raise pay in the next contract was “significantly better” than what Tesla and foreign automakers paid U.S. workers. He added that Ford “will not make a deal that endangers our ability to invest, grow and share profits with our employees.”Mr. Biden and Democratic lawmakers had sought to offset this labor-cost disadvantage by providing an additional $4,500 subsidy for each electric vehicle assembled at a unionized U.S. plant, above other incentives available to electric cars. But the Senate removed that provision from the Inflation Reduction Act.Such setbacks have frustrated the U.A.W., an early backer of Mr. Biden’s clean energy plans. In May, the union, which normally supports Democratic presidential candidates, withheld its endorsement of Mr. Biden’s re-election.“The E.V. transition is at serious risk of becoming a race to the bottom,” Mr. Fain said in an internal memo. “We want to see national leadership have our back on this before we make any commitments.”The next month, Mr. Fain chided the Biden administration for awarding Ford a $9.2 billion loan to build three battery factories in Tennessee and Kentucky with no inducement for the jobs to be unionized.A BMW battery plant in South Carolina. The U.A.W. has struggled to unionize autoworkers in the South.Juan Diego Reyes for The New York TimesMr. Biden tapped Mr. Sperling, a Michigan native, to serve as the White House point person on issues related to the union and the auto industry around the same time. By late August, the Energy Department announced that it was making $12 billion in grants and loans available for investments in electric vehicles, with a priority on automakers that create or maintain good jobs in areas with a union presence.Mr. Sperling speaks regularly with both sides in the labor dispute, seeking to defuse misunderstandings before they escalate, and said the recent Energy Department funding reflected Mr. Biden’s commitment to jump-start the industry while creating good jobs.Complicating the picture for Mr. Biden is the growing chorus of Democratic politicians and liberal groups that have backed the autoworkers’ demands, even as they hail the president’s success in improving pay and labor standards in other green industries, like wind and solar.Nearly 30 Democratic senators signed a letter to auto executives this summer urging them to bring battery workers into the union’s national contract. Dozens of labor and environmental groups have signed a letter echoing the demand.The groups argue that the change would have only a modest impact on automakers’ profits because labor accounts for a relatively small portion of overall costs, a claim that some independent experts back.Yen Chen, principal economist of the Center for Automotive Research, a nonprofit group in Ann Arbor, Mich., said labor accounted for only about 5 percent of the cost of final assembly for a midsize domestic sedan based on an analysis the group ran 10 years ago. Mr. Chen said that figure was likely to be lower today, and lower still for battery assembly, which is highly automated.Beyond the economic case, however, Mr. Biden’s allies say allowing electric vehicles to drive down auto wages would be a catastrophic political mistake. Workers at the three companies are concentrated in Midwestern states that could decide the next presidential election — and, as a result, the fate of the transition to clean energy, said Jason Walsh, the executive director of the BlueGreen Alliance, a coalition of unions and environmental groups.“The economic effects of doing that are enormously harmful,” he said. “The political consequences would be disastrous.” 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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    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 Plans 6,000 New Union Jobs in Three Midwestern States

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    Ford Motor said on Thursday that it was planning to invest $3.7 billion in facilities across the Midwest, much of it for the production of electric vehicles, which the company said would create more than 6,000 union jobs in the region.“We’re investing in American jobs and our employees to build a new generation of incredible Ford vehicles,” Jim Farley, the company’s president and chief executive, said in a statement. “Transforming our company for the next era of American manufacturing requires new ways of working.”The announcement, made jointly with the United Automobile Workers union, detailed investments in three states. Ford said it would invest $2 billion and create about 3,200 union jobs in Michigan, including many tied to production of the new F-150 Lightning pickup truck, the company’s highest-profile and most important bet on electric vehicles.In Ohio, Ford will spend over $1.5 billion and create nearly 2,000 union jobs, primarily to build commercial electric vehicles in the middle of this decade. The company also said it would add over 1,000 union jobs at an assembly plant in Kansas City, Mo., that will produce commercial vans, some gas-powered and some electric.The company had indicated that some of the investments would be coming, like the expansion of production capacity for the F-150 in Michigan, but had not detailed the magnitude.The moves follow Ford’s announcement last year that it would build four factories in Kentucky and Tennessee — three battery factories for electric vehicles and a truck assembly plant — irking union officials and elected leaders in Midwestern states, who worry about losing manufacturing jobs to the South.In addition to the new Midwestern jobs, Ford said it would convert nearly 3,000 temporary jobs into permanent full-time positions before the date that its contract with the U.A.W. calls for — which is after two years of employment.“We are always advocating to employers and legislators that union jobs are worth the investment,” the U.A.W. president, Ray Curry, said in a statement. “Ford stepped up to the plate by adding these jobs and converting 3,000 U.A.W. members to permanent, full-time status with benefits.”Assembling the F-150 Lightning at the Dearborn Truck Plant. Ford will add about 3,200 jobs in Michigan, many tied to the electric truck’s production.Brittany Greeson for The New York TimesSam Abuelsamid, an auto industry analyst at Guidehouse Insights, said the changes were important as a way to help Ford attract and retain labor in a tight job market, while potentially helping the company avoid costly labor unrest during negotiations over a contract that expires next year as it spends billions on the transition to electric vehicles. A six-week strike by workers at General Motors in 2019 cost that company billions of dollars.“I’m sure one thing Ford would absolutely love to avoid is the potential for a strike,” Mr. Abuelsamid said. “Keeping a positive relationship with the U.A.W. now is to their benefit.”But the investments appear unlikely to substantially diminish the broader threat that the shift toward electric vehicles poses to the autoworkers union and to employment in the U.S. vehicle manufacturing industry, which stands at around one million.“It’s about changing the perception of what’s happening,” Mr. Abuelsamid said. “It’s a balancing act between your work force and your investors,” who would prefer to see labor costs rise more slowly or decline at unionized automakers like Ford and General Motors.Because electric vehicles incorporate far fewer moving parts than gasoline-powered vehicles, they require significantly less labor — about 30 percent less, according to figures that Ford has generated.As a result, estimates suggest that the toll of electrification on auto industry jobs could be significant absent large new government subsidies. A report released in September by the liberal Economic Policy Institute, which has ties to organized labor, found that the auto industry could lose about 75,000 jobs by 2030 without substantial government investment.By contrast, the report found, if additional government subsidies encourage the domestic manufacturing of components and greater market share for vehicles assembled in the United States, the industry could add about 150,000 jobs over the same period.President Biden has backed substantial subsidies for electric vehicles, including vehicles made by unionized employees, but those measures have languished in the Senate and their prospects are uncertain.In the meantime, much of the job growth tied to electric vehicles has occurred at nonunion facilities owned by newer automakers like Tesla, Rivian and Lucid, or U.S.-based battery facilities owned wholly or in part by foreign companies like the South Korean manufacturers SK Innovation and LG Chem.In Thursday’s announcement, Ford noted that its new battery and vehicle production facilities in the South would create about 11,000 jobs. But those employees will not automatically become union members, and workers in those states tend to face an uphill battle in unionizing.For investors, however, Ford’s additional investments in electric vehicles appears to be welcome news as the company seeks to reinvent itself amid competition from the likes of Tesla and Rivian. Ford’s stock price, which had dropped substantially this year, rose more than 2 percent on Thursday.Ford also said Thursday that it sold 6,254 electric vehicles in May, a jump of more than 200 percent from a year earlier. That number included 201 F-150 Lightnings, which the company started producing in April.The company has about 200,000 reservations for the Lightning, which is central to its efforts to catch up to Tesla, and stopped accepting new ones because production will take months to meet demand.Ford indicated that sales of the truck would be much higher in the coming months as production increased and trucks in transit reached dealerships. Ford is aiming to produce 150,000 Lightning trucks a year by the end of 2023.Sales of electric vehicles — and conventional cars — have been limited by a shortage of computer chips. Ford’s overall sales of new vehicles in May fell 4.5 percent from a year earlier. Auto executives are also increasingly worried that the supply of lithium, nickel and other raw materials needed to make the batteries that power electric cars is not keeping up with the growing demand for those vehicles.Vikas Bajaj More

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    How The Trucker Protests Are Snarling the Auto Industry

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    Blockades of U.S.-Canada border crossings could hurt the auto industry, factory workers and the economy, which are still recovering from pandemic disruptions.After two years of the pandemic, semiconductor shortages and supply chain chaos, it seemed as if nothing else could go wrong for the auto industry and the millions of people it employs. But then came thousands of truckers who, angry about vaccine mandates, have been blocking major border crossings between Canada and the United States.With Canadian officials baffled about what to do, the main routes that handle the steel, aluminum and other parts that keep car factories running on both sides of the border were essentially shut down Wednesday and Thursday.Ford Motor, General Motors, Honda and Toyota have curtailed production at several factories in Michigan and Ontario, threatening paychecks and offering a fresh reminder of the fragility of global supply chains and of the deep interdependence of the U.S. and Canadian economies, which exchange $140 million in vehicles and parts every day.No one knows how this is going to end. The protests are expected to swell in the coming days and could spread, including to the United States. Canada’s transport minister has called the bridge blockades illegal. Marco Mendicino, Canada’s minister of public safety, said on Thursday that the Royal Canadian Mounted Police, the national force, was sending additional officers to the Canadian capital, Ottawa, and to Windsor, Ontario. The mayor of Windsor has threatened to remove the protesters. But those statements have seemed to have little impact. Gov. Gretchen Whitmer of Michigan pleaded with Canadian officials to quickly reopen traffic.“They must take all necessary and appropriate steps to immediately and safely reopen traffic so we can continue growing our economy,” Ms. Whitmer said in a statement on Thursday.The chaos is already starting to take an economic toll. The pain is likely to be most acute for smaller auto parts suppliers, for independent truckers and for workers who get paid based on their production. Many of these groups, unlike large automakers like G.M., Ford and Toyota, lack the clout to raise prices of their goods and services. Companies and workers in Canada are more likely to suffer because they are more dependent on the United States.The longer crossings between the countries remain blocked, the more severe the damage, not only to the auto industry but also to the communities that depend on manufacturing salaries. Workers at smaller firms typically receive no compensation for lost hours, said Dino Chiodo, the director of auto at the giant Canadian union Unifor. Workers who have been sent home early because of parts shortages will spend less at stores and restaurants.“People say, ‘I have $200 less this week, what do I do?’” Mr. Chiodo said. “It affects the Canadian and U.S. economy as a whole.”Auto factories and suppliers in the United States generally keep at least two weeks of raw materials on hand, said Carla Bailo, the president of the Center for Automotive Research in Ann Arbor, Mich. If the bridges remain blocked for longer than that, she said, “then you’re looking at layoffs.”The blockades came after a demonstration in Ottawa that started nearly two weeks ago. The protests began over a mandate that truck drivers coming from the United States be vaccinated against the coronavirus and have grown to include various pandemic restrictions. Some have demanded that Prime Minister Justin Trudeau resign. The truckers have been joined by various groups, including some displaying Nazi symbols and damaging public monuments. Police in Ottawa said on Thursday that the protesters and their supporters, including some in the United States, had almost overwhelmed the city’s 911 system with calls.The crossing that has the auto industry and government officials most concerned is the Ambassador Bridge, which connects Windsor and Detroit. It carries roughly a quarter of the trade between the two countries, which has been relatively unrestricted for decades. While food and other products are also affected, about a third of the cargo that uses the bridge is related to the auto industry, Ms. Bailo said.The blockade has been felt as far south as Kentucky, where production has been disrupted at a Toyota factory, the company said on Thursday. The shutdown at the border also will prevent manufacturing at Toyota’s three Canadian plants for the rest of the week, a spokesman for the automaker, Scott Vazin, said.Demonstrators blocking access to the Ambassador Bridge in Windsor. The bridge accounts for roughly a quarter of the trade between the United States and Canada.Nathan Denette/The Canadian Press, via Associated PressG.M. said it had canceled two shifts on Wednesday and Thursday at a factory in Lansing, Mich., that makes Buick Enclave and Chevrolet Traverse sport utility vehicles. The company also sent workers from the first shift at a plant in Flint, Mich., home early. Ford said Thursday that plants in Windsor and Oakville, also in Ontario, were running at reduced capacity.Shortages of semiconductors and other components have not been all bad for giant automakers, creating scarcity that has driven up prices of cars in the last year. Ford and G.M. both reported healthy profits for 2021. And the economic damage will not be severe if the bridge and other crossings reopen soon, industry experts said.But the last two years have shown that, because supply chains are so complex, problems at obscure parts makers can have far-reaching and unpredictable impact. Last year, Ford had to shut down plants for weeks at a time in part because of a fire at a chip factory in Japan.“If it stretches on for weeks it could be catastrophic,” said Peter Nagle, an analyst who covers the car industry at IHS Markit, a research firm.Mr. Nagle said the bridge blockade was worse than the semiconductor shortage for carmakers. They “were already running pretty tight because of other supply chain shortages,” he said. “This is just bad news on top of bad news.”The auto industry operates relatively seamlessly across Canada, the United States and Mexico. Some parts can travel back and forth across borders multiple times as raw materials are processed and are turned into components and, eventually, vehicles.An engine block, for example, might be cast in Canada, sent to Michigan to be machined for pistons, then sent back to Canada for assembly into a finished motor. The blockades have stranded some truckers on the wrong side of the border, creating a chain reaction of missed deliveries.The slowdown in Canadian trade will disproportionately affect New York, Michigan and Ohio, said Arthur Wheaton, the director of labor studies at Cornell’s School of Industrial and Labor Relations. At the same time, he added, the protests were “certainly raising concerns for all U.S. manufacturers.”“There is already a shortage of truck drivers in North America, so protests keeping truckers off their routes exacerbates problems for an already fragile supply chain,” Mr. Wheaton said.Carmakers had hoped that shortages of computer chips and other components would ease this year, allowing them to concentrate on the long-term: the transition to electric vehicles.A larger fear for many elected officials and business executives is that the scene at the Ambassador Bridge could inspire other protests. The Department of Homeland Security warned in an internal memo that a convoy of protesting truckers was planning to travel from California to Washington, D.C., potentially disrupting the Super Bowl and President Biden’s State of the Union address on March 1.“While there are currently no indications of planned violence,” the memo, which was dated Tuesday, said, “if hundreds of trucks converge in a major metropolitan city, the potential exists to severely disrupt transportation, federal government operations, commercial facilities and emergency services through gridlock and potential counter protests.”Mr. Chiodo, the Canadian union leader, said that “the people who are demonstrating are doing it for the wrong reasons. They want to get back to the way things were before the pandemic, and in reality they are shutting things down.”The scene in Ottawa remained a raucous party Thursday, with hundreds of people on the street, many wearing Canadian flags like capes. The song “Life Is a Highway,” by the Canadian musician Tom Cochrane, pumped from loudspeakers set up on the back of an empty trailer that had been converted into a stage.But there was a thinning out of protesters — with some empty spaces where trucks had been the day before.Johnny Neufeld, 39, a long-haul trucker from Windsor, Ontario, said the vaccine mandate would spell the end of his job transporting molds into the United States since he had chosen not to be inoculated out of fear the shots had been developed too quickly. He got his first ticket from the police Thursday morning, a fine of 130 Canadian dollars (about $100) for being in a no-stopping zone.“This is a souvenir,” he said.Dan Bilefsky More

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    A Year of Hardship, Helped and Hindered by Washington

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutA Year of Hardship, Helped and Hindered by WashingtonFor Kathryn Stewart, a struggling single mother in Michigan, the past year showed how much safety net programs can help — and how the nation’s fickleness about them can add confusion and uncertainty to fear and worry.Credit…Supported byContinue reading the main storyFeb. 14, 2021Updated 2:57 p.m. ETWhen the coronavirus pandemic struck last March, Kathryn Stewart was working at a gas station in rural Michigan and living in her mother’s trailer with eight relatives, three dogs and a budget with no room for error. Her mother, who is disabled, soon urged her to quit to avoid bringing home the disease. Ms. Stewart reluctantly agreed, wondering how she would support herself and her 10-year-old son.An expanded safety net caught her, after being rushed into place by Congress last spring with rare bipartisan support.To her surprise, Ms. Stewart not only received unemployment insurance but a weekly bonus of $600 more than tripled her income. A stimulus check offered additional help, as did a modest food stamp increase. Despite opaque rules and confounding delays, the outpouring of government aid lifted her above the poverty line.Six months later, after temporary aid expired and deadlock in Washington returned, Ms. Stewart’s benefits fell to a trickle, and she was all but homeless after a family fight forced her from the trailer to a friend’s spare room. She skipped meals to feed her son, sold possessions to conjure cash and suffered anxiety attacks so severe they sometimes kept her in bed.Just as Ms. Stewart finally found a job, celebration turned to shock: The state demanded that she repay the jobless aid she had received, claiming she had been ineligible. That left her with an eye-popping debt of more than $12,000.“I spent the whole day just trying to breathe,” Ms. Stewart said the day the notice arrived. “I’m really confused about the whole thing. I’m trying not to panic.”At times during 2020, Kathryn Stewart was bringing in more money than ever because of government aid programs. At other times, when the aid dried up, she and her son went hungry.Credit…Brittany Greeson for The New York TimesIn the robust aid she received and its painful disappearance, Ms. Stewart’s experience captures both sides of the gyrating federal efforts to fortify the safety net in a crisis of historic proportions.As the virus ravaged jobs last spring, rapid federal action protected millions of people from hardship and showed that government can be a powerful force in reducing poverty.Yet the expiration of aid a few months later also underscored how vulnerable the needy are to partisan standoffs in an age of polarized government. Gaps in aid left families short on food and rent, uncertainty made it impossible to plan and confusion joined fear and worry.In his first weeks in office, President Biden appears to have both lessons in mind. A benefit extension passed in December expires next month, and he is urging Congress to spend big and move fast to keep 11 million workers from losing unemployment aid. Democrats are advancing his $1.9 trillion plan for stimulus and relief with a fast-track procedure that limits their policy options but increases the odds of avoiding more whipsaw delays.Critics of the spending warn it swells the national debt and erodes incentives to work. Supporters say the government’s impact has rarely seemed so direct: When help flowed at extraordinary levels, poverty fell. When it ended, poverty rose.“This could be a watershed moment,” said H. Luke Shaefer, who runs a poverty research center at the University of Michigan. “We showed how much government can do to mitigate hardship, even if the effort didn’t last.”Ms. Stewart and her son, Jack, had to rely at one point on a friend for housing.Credit…Brittany Greeson for The New York TimesWith millions still depending on government aid in a weak recovery, Ms. Stewart’s experience over the past 10 months highlights the stakes. As her complex life shows, the causes of poverty often run deep, and some lie beyond the reach of a government check. But the aid, while it lasted, broke her fall, and she is now back on her feet.In recent weeks, Ms. Stewart, 36, has been working at an Amazon warehouse and fighting Michigan’s efforts to recoup her unemployment benefits. She said she was “super happy” to no longer be at risk from another Washington impasse.An introspective woman, insightful about her hardships but distant from politics, she wonders how federal help has at once been so generous and so unsteady — a question that weighs on millions of Americans now waiting to see whether Congress moves quickly enough to sustain their benefits.“It made a huge difference in our lives,” Ms. Stewart said. “But it starts and stops and it’s really confusing. You feel helpless when you’re being helped by the government.”Should another crisis arise, she said, “I hope the government has a better plan.”Anxiety, Solitude and Then the PandemicMs. Stewart grew up accustomed to hardship and inventive in her responses. In a family too poor for vacations, she created her own by tagging along on her stepfather’s tractor-trailer runs. When he fought with her mother, she sheltered in closets. When he left, her mother tried to quell the family’s hunger with diet pills. Ms. Stewart was in grade school when panic attacks started, which she blamed on the conflict.An unsupervised adolescence followed in Grand Rapids, where Ms. Stewart slept in parks with runaways. She liked the literature of bohemians and rebels — Hunter S. Thompson and Oscar Wilde — but left school at 16 and lived in her car. Short on formal education, Ms. Stewart was long on curiosity and peripatetic instinct, which carried her from Ireland to California in between seasonal work at Michigan resorts. She dyed her hair unusual colors. She gave herself tattoos. She covered her walls with the surrealist works of Salvador Dalí, in shared faith that “you create your own reality.” Fearful of forgetting, Ms. Stewart kept a memory box, which included a middle-school note, a ukulele pick and clippings from her first mohawk.CreditMs. Stewart’s shift at an Amazon warehouse starts at 1:20 a.m. “I’m a number but a number with a paycheck,” she said.Credit…Brittany Greeson for The New York TimesIn her mid-20s, Ms. Stewart married and had a son, Jack, but her husband left and her anxiety grew. “Over the years I’ve gotten real anxious — almost afraid of people,” she said. “I’m an empath — if someone else feels bad, I feel bad.”Still, Ms. Stewart worked, most happily in solitude.By 2019, Ms. Stewart was a night janitor and living with her sister in Grand Rapids. Her sister fell behind on the rent and insisted they move in with their mother, five hours away in rural Ossineke. Ms. Stewart grudgingly succumbed. “We all rely on each other, which is good except for us not getting along,” she said.With four children and conflicting parenting styles, the trailer proved crowded and tense. When Ms. Stewart found work as a gas station cashier — $10 an hour, 20 hours a week — she welcomed the escape as much as the pay.A few weeks later, the coronavirus hit.Against All Odds, Help Was on the Way As the virus spread in early March, President Donald J. Trump insisted it posed no threat. “Jobs are booming, incomes are soaring,” he tweeted. By the next week, Disneyland and Broadway were padlocked and the stock market notched its worst daily loss in decades.While the need for Washington action was clear, the risks of an impasse were great. Liberal Democrats controlled the House, conservative Republicans held the Senate, and Mr. Trump derided the House speaker as “Crazy Nancy” Pelosi. Yet within a few weeks, they agreed on a $2.2 trillion plan.One surprise was how much it did for the poor, a class not known for political clout. Even the poorest families fully qualified for stimulus payments — $1,200 for adults, $500 for children (some Republicans had proposed giving them less) — and at the Democrats’ insistence, Congress greatly expanded jobless benefits.The existing program was filled with gaps: It covered only about a quarterof the jobless and replaced less than half their lost wages. Congress widened coverage, temporarily adding part-time workers, independent contractors and others typically excluded. And for four months it gave everyone on jobless aid a large bonus: $600 a week.The payments were more than many workers had earned on the job. Critics said the aid would discourage the jobless from seeking work, but urgency prevailed. “Gag and vote for it anyway,” the Senate leader, Mitch McConnell, advised fellow Republicans. The Senate vote was 96 to 0.Approving aid was one thing, delivering it another. Most stimulus checks arrived automatically and fast, though people who did not file tax returns had to contact the Internal Revenue Service — a procedural hurdle that kept payments from about eight million potentially eligible people, mostly low-income. Households with undocumented immigrants were barred from stimulus checks, which excluded about five million spouses and children who were citizens or legal residents.Unemployment insurance proved harder to get. With nearly 40 million claims in nine weeks, the state-run programs were overwhelmed. Computers crashed. Phone lines jammed. Governors called in the National Guard to process requests.Food shortages soared, especially among families with children as school closures deprived millions of meals. Lines outside food banks stretched for miles.The Coronavirus Outbreak More

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    Is Rivian the Next Tesla? Investors Bet Big on Electric Truck Maker

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    The Rivian factory in Normal, Ill. The company is hoping to cash in on the same opportunity that Tesla identified and has advanced: the electrification of transportation.Credit…Lyndon French for The New York TimesSkip to contentSkip to site indexThe Next Tesla? Investors Bet Big on Electric Truck Maker RivianRivian, which has raised another $2.65 billion, plans to sell a pickup truck and S.U.V. it has worked on for more than a decade.The Rivian factory in Normal, Ill. The company is hoping to cash in on the same opportunity that Tesla identified and has advanced: the electrification of transportation.Credit…Lyndon French for The New York TimesSupported byContinue reading the main storyJan. 19, 2021Updated 6:24 p.m. ETPLYMOUTH, Mich. — It’s hard to imagine any company matching Tesla’s rocketlike rise. But if any electric car start-up could aspire to be the “next Tesla,” it would be Rivian.Founded in 2009, Rivian is preparing to produce an electric pickup truck and a sport utility vehicle. Both models are supposed to be on the road by the summer and will be made in a former Mitsubishi plant in Illinois. Rivian is also developing electric delivery trucks for Amazon.What distinguishes Rivian, however, is its extraordinary roster of investors. Amazon is not just a customer; it has put a lot of money into Rivian. Others backers include BlackRock, Fidelity, T. Rowe Price and Ford Motor, which plans to introduce a vehicle based on Rivian’s technology.The latest injection of capital was revealed Tuesday, when Rivian said it had raised $2.65 billion from a group led by funds and accounts advised by T. Rowe Price. Other investors included Fidelity and Amazon’s Climate Pledge Fund. The investment round values the company at more than $27 billion, and brings the total investment in the company to $8 billion since the beginning of 2019.“We have been eagerly anticipating the arrival of 2021 and, with it, the exhilaration of Rivian starting to deliver its revolutionary products to customers,” Joseph Fath, a T. Rowe Price portfolio manager, said in a statement.A hefty war chest is no guarantee of success, and producing a new car from scratch is a monumental task for established automakers, let alone a start-up.“The process of creating something like this is anything but simple,” RJ Scaringe, Rivian’s founder and chief executive, said in an interview. “It’s a complex orchestra, several thousand parts coming from several hundred suppliers. It’s definitely far more complex than people think and far more complex than I thought it would be.”Rivian is hoping to cash in on the same opportunity that Tesla identified and has advanced — the electrification of transportation. To most auto executives, there is now little doubt this is the way the world is going. In the last five years, Tesla has gone from making 50,000 cars annually to making 10 times that many last year. General Motors, Ford, Volkswagen and others are investing billions to develop electric cars and trucks that eventually will begin supplanting fossil fuel models.“In my lifetime, we are going to go from a world where electric vehicles are a tiny subset of the market to where electric vehicles represent 100 percent of the market,” Mr. Scaringe said. “Some existing players will be able to make that transition, but it also creates opportunities for new companies to enter that space.”Another big trend reshaping the auto industry is autonomous cars. On Tuesday, Cruise, a unit of G.M. that is working in that area, announced it had raised $2 billion from Microsoft, G.M., Honda and other investors. Rivian and Tesla are also working on automated-driving technology.Rivian is different from Tesla in several respects. Tesla so far has grown by selling sporty sedans, a type of vehicle that is falling out of favor with consumers. Tesla intends to begin making an oddly angular, futuristic pickup, the Cybertruck, this year. But it hasn’t yet put heavy focus on the trucks and S.U.V.s that make up 75 percent of the passenger vehicle market in the United States.Rivian, on the other hand, is focused on producing “adventure” vehicles that owners can take off road, an approach that means Rivian won’t often compete head to head with Tesla.“There’s a perception that this is winner take all, and that’s just wrong,” Mr. Scaringe said. “Consumers need to have different brands, different flavors. Our success is not at all mutually exclusive to others’ success.”Business & EconomyLatest UpdatesUpdated Jan. 19, 2021, 6:30 p.m. ETSmall-business relief loans start flowing again, with $5 billion worth approved in the first week.Representative introduces a resolution to recognize the journalists who covered the Capitol attack.Retailers drop MyPillow amid fallout from comments by its pro-Trump founder.Rebecca Puck Stair is the kind of car buyer Rivian hopes to attract. A movie location scout in Albuquerque, she has been interested in buying an electric vehicle for a few years, but needs high ground clearance and four-wheel drive for assignments that take her into the desert.“That didn’t exist in the market,” she said. “A Tesla doesn’t fit my needs.”About a year ago, she heard about Rivian for the first time and put a deposit down on an S.U.V. the next day — like Tesla, the company does not plan to sell through dealers. Ms. Stair has seen the Cybertruck, but the design is not for her. “It just screams ‘obnoxious guy truck,’” she said, laughing.Rivian’s truck and S.U.V., which start at $67,500, look more conventional, as if they could have been designed by Land Rover.Unlike Tesla, which is trying to grow quickly, Rivian is taking measured steps. Last year, before the pandemic struck, it said it planned to make around 20,000 pickup trucks and S.U.V.s in 2021 and some 40,000 in 2022. It has not yet offered an updated outlook. It is aiming to have production capacity of 250,000 vehicles a year at its plant in Normal, Ill., by the middle of the decade. The company has not disclosed how many orders it has taken, but a spokeswoman said it had customers lined up for all the vehicles it expected to make this year.And even as other auto start-ups go public by merging with shell companies that have bundles of cash and stock market listings, Rivian is not eager to do so. “We want to launch, demonstrate our capability and let our performance speak for itself before we can look into being public,” Mr. Scaringe, 38, said.That difference in the approaches favored by Rivian and Tesla probably has a lot to do with the men that lead the companies.RJ Scaringe, Rivian’s chief executive, is an engineer who tried to slash his carbon footprint at M.I.T. by getting around by foot and bike, taking cold showers and doing his laundry by hand.Credit…Lyndon French for The New York TimesTesla’s chief executive, Elon Musk, is a disruptive force unlike anything the auto industry had seen in decades, perhaps not since Henry Ford. He has powered his company to stock market heights while attracting an army of fans. But Mr. Musk has also courted controversy — he has called government efforts to limit the spread of the coronavirus “fascist.” His Twitter posts have gotten him and Tesla into legal jams, including with the Securities and Exchange Commission. Not long ago, he claimed Tesla would have a million self-driving cars on the road in 2020, but the company has yet to demonstrate a fully autonomous vehicle.Mr. Scaringe, by contrast, is a bookish engineer, with a Ph.D. from the Massachusetts Institute of Technology. He once tried to slash his personal carbon footprint at M.I.T. by getting around by foot and bike, taking cold showers and doing his laundry by hand. His Twitter feed is so tame that one recent post was about the car color preferences of his children (blue).In the second half of this year, Rivian hopes to start producing its Amazon delivery van in large numbers. Amazon is already testing prototypes on the road. The retail giant has made the trucks a central part of its strategy to reduce emissions, placing an order for 10,000 to be delivered by the end of 2022.Rivian still has a lot of work to do. On a recent afternoon, engineers at its labs in Plymouth were tinkering with a half-dozen R1T pickups in various stages of development. A few were hand-built models with screws visible in door wells — telltale signs of early prototypes. One was a more refined version that seemed a step or two away from the production version.“People are working all hours,” said Ryan Kalb, a special projects engineer. “We are trying to move quickly, and we want to be doing it. We all want to see this happen.”It was a similar story about 300 miles down the road at Rivian’s plant in Normal, a 3.4 million-square-foot factory that the company bought for $16 million in 2017. Since then, the plant has undergone an overhaul that cost more than $1 billion. Freshly painted and brightly lit, it has a long, winding assembly line where the R1T and R1S S.U.V. will be made. At the moment, only a few are built each day.Michael Ramsey, a Gartner analyst, said he was eager to see if Rivian could avoid the mistakes that hamstrung Tesla a few years ago, when Mr. Musk rushed to ramp up production of the Model 3 sedan only to end up in what he called “manufacturing hell.”“Is Rivian going to be a giant future competitor to Ford and G.M.? I don’t know,” Mr. Ramsey said. “But they have all these mega-investments. They have a strategic partner in Ford. They have contracts with Amazon. Of all the E.V. start-ups, they seem to have the best chance of making it.”AdvertisementContinue reading the main story More