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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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    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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    Winter Storm Disrupts Automakers, Retailers and Delivery Services

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    #masthead-section-label, #masthead-bar-one { display: none }Winter StormsliveLatest UpdatesMapping the Storm’s ImpactMillions Without PowerDisruptions to BusinessesPhotosAdvertisementContinue reading the main storySupported byContinue reading the main storyWinter Storm Disrupts Wide Swath of American BusinessPower outages, natural gas shortages and icy conditions made it hard for automakers, retailers and delivery carriers to operate across much of the South and Midwest.A UPS worker made deliveries in Chicago on Tuesday after an overnight storm dumped more than a foot of snow on the area.Credit…Charles Rex Arbogast/Associated PressPeter Eavis and Feb. 16, 2021, 6:05 p.m. ETThe winter storm that barreled across much of the United States over the holiday weekend severely disrupted businesses including large car factories, retail chains and the delivery services that people are deeply reliant on for basic necessities.General Motors, Ford Motor, Toyota, Nissan and other automakers suspended or shut down production at plants from Texas to Indiana as rolling blackouts, natural gas shortages and icy conditions made it difficult to keep assembly lines running.Walmart was forced to close as many as 500 stores across the South and Midwest, according to a map that was being updated in real time on its website. Pharmacy chains also shut stores, potentially making it harder for customers to collect prescriptions and also delaying vaccinations against the coronavirus, which had begun at many pharmacies at the end of last week.Publix, a grocery and pharmacy chain that operates across the South, said on Tuesday that it had to delay vaccinations in Florida because vaccine shipments were delayed by the storm. CVS said it had closed about 775 stores. Walgreens said around 200 stores in Texas were closed because of power disruptions.The storm dealt a blow to huge economic hubs that are accustomed to hurricanes and tornadoes but not extreme winter weather that strains power grids and sends temperatures well below averages for this time of year.“I was born in Fort Worth in 1956, and I’ve never seen weather this bad for this long,” said George Westhoff, president of Midland Manufacturing, a Fort Worth company with 40 employees that makes well cylinders and other metal products. “I’m not sure how much of my equipment would start up under these cold conditions,” he said, noting that he was the only person at his plant on Tuesday.Because millions of people have been working from home during the coronavirus pandemic, winter storms may not have quite the economic cost they once did. But the loss of power can sever the internet connections that people need to do their jobs. PowerOutage.us, a site that tracks electricity disruptions, said that, of the 12.5 million customers it tracks in Texas, 3.2 million were without power on Tuesday.Managers of the electricity grid in Texas and elsewhere have had to order rolling blackouts after many power plants were forced offline because of icy conditions and some could not get sufficient supplies of natural gas. Some wind turbines also shut down. At the same time, demand for electricity and natural gas has shot up because of the cold weather.“What’s complicating things is that huge swaths of Texas have lost power,” said Michael Trevino, a vice president at the Dallas Regional Chamber.Group 1 Automotive, a big chain of car dealerships based in Houston, has closed many of its franchises in Texas and Oklahoma.“Our office doesn’t have power. Dallas is snowed in. Oklahoma is snowed in. Houston is icy,” said Pete Delongchamps, a senior vice president at the company. He is hunkering down at home, where both power and water are out. “It’s blankets and water jugs.”Some companies kept operating. Raytheon Technologies, a large aerospace and military contractor, said Tuesday that its facility in McKinney, Texas, was open. And Home Depot and Costco stores in Southlake, a suburb of Dallas and Fort Worth, were open Tuesday.Christina Cornell, a Home Depot spokeswoman, said over 100 stores in Texas and elsewhere were closed or operated with reduced hours on Monday but the majority of them reopened Tuesday. She added that all Home Depot stores in the United States have backup generators that allow them to operate basic services during blackouts.The storm has caused extensive delays across the vast package delivery networks that many people now rely on as shopping has shifted online.FedEx said winter weather had caused “substantial disruptions” at its Memphis hub, which is the company’s largest center, occupying 800 acres, and is normally capable of sorting nearly half a million documents and packages an hour. FedEx added that delays were possible across the United States for Tuesday deliveries.UPS said weather could cause delays in areas not directly hit by the storms. Packages may take longer to get from one place to another, and many delivery services move goods through big sorting hubs in the middle of the country to serve both the East and West Coasts. UPS’s main air hub is in Louisville, Ky., and it also has a hub in Dallas, for example.The winter storm prompted the United States Postal Service to close post offices, processing hubs and other facilities in Texas, Alabama and Mississippi, according to its website.The storm has also affected Amazon, which operates its own large logistics network that includes planes, hubs and delivery vans operated by contractors.“The health and safety of our employees, customers and the drivers who deliver packages is our top priority,” Maria Boschetti, a spokeswoman, said in a statement. “Out of an abundance of caution and to ensure everyone’s safety, we have closed some of our sites in Arkansas, Illinois, Oklahoma, Missouri, Tennessee, Texas, Indiana and Kentucky.”Some automakers said they shut down operations in an effort to limit their energy use. Ford closed a plant in Claycomo, Mo., near Kansas City, Mo., this week “to ensure we minimize our use of natural gas that is critical to people’s homes,” a company spokeswoman said.The plant produces the F-150 pickup truck, one of the industry’s best-selling vehicles. Ford doesn’t plan to resume normal operations at its shuttered plant until Monday. The factory employs about 7,300 people. Union workers will be paid 75 percent of their gross pay for the week.Nissan closed its four U.S. plants on Monday and canceled the morning and afternoon shifts on Tuesday, a spokeswoman said. Two of the plants, in Canton, Miss., and Smyrna, Tenn., make cars and the other two, both in Decherd, Tenn., make engines. The company is monitoring the situation to see if it can resume production Tuesday night.General Motors said Tuesday that it was not affected by the natural gas shortage but that it was still suspending the first shift at four plants in Tennessee, Indiana, Kentucky and Texas because of “the significant winter weather conditions.”Trucks stuck in traffic on Monday because of the storm in Austin, Texas.Credit…Montinique Monroe/Getty ImagesToyota Motor canceled the first and second shifts at five factories, including its largest U.S. plant in Georgetown, Ky., and a pickup truck plant in San Antonio, because of the winter storm and energy disruptions it caused. The other three plants are in Kentucky, Indiana and Mississippi.Honda canceled or suspended late shifts on Monday and early shifts on Tuesday at plants in Alabama, Georgia, Ohio and Indiana. The company is planning to resume production Tuesday night at all but its Alabama car plant, where Tuesday evening’s shift has also been canceled.The shutdowns add to troubles for Ford, G.M. and other automakers that have separately had to idle plants because of a global semiconductor shortage. The chip shortage is expected to reduce the profit of automakers by billions of dollars this year.Some companies are looking forward to a surge of business after the bad weather passes.Mr. Delongchamps, the Group 1 Automotive executive, said, “We will probably see a pickup in body shop business and repairs, from people whose cars got banged up or frozen.”AdvertisementContinue reading the main story More