Shift to electric vehicles weighs heavy on UAW-GM talks

There are many difficult and complicated issues underlying the impasse between striking United Auto Workers and General Motors, including GM’s widespread use of temporary workers, health care benefits and the fate of five plants without products to build that collectively employed more than 14,000 workers. But few may present such an existential threat for the UAW as the rise of electric vehicles.

GM last November said it would shift more of its focus and capital investment to EVs and self-driving vehicles by ending production of slow-selling cars like the Chevrolet Cruze and Impala, which rely on conventional combustion engines and all the associated components, mechanical systems and technologies that accompany them. GM plans to introduce 20 new battery-electric and fuel-cell vehicles globally by 2023.

The crux of the problem: Electric vehicles require fewer parts and less labor to assemble.

Case in point: As part of negotiations with the UAW, GM has reportedly offered to invest $7 billion in U.S. facilities, including the introduction of new electric trucks at the Detroit-Hamtramck Assembly and a new battery plant staffed by UAW members to ease the sting of the closure of its Lordstown, Ohio assembly plant, both of which were included in the November restructuring announcement. But the the new jobs at the new battery facility would reportedly pay less and need far fewer staff to operate. GM already has shut down a transmission plant in suburban Detroit as part of the same round of “unallocated” plants, affecting more than 260 workers.

“There’s a potential for our jobs to be gone,” Tim Walbolt, president of a UAW local at a Fiat Chrysler transmission components plant near Toledo, Ohio, told Bloomberg. “It scares us.”

A February report to lawmakers from the Congressional Research Service said that “A widespread shift to electric vehicles has the potential to eliminate large numbers of jobs in vehicle and parts production, even if the vehicles are assembled in the United States” because production of EVs “is likely to require far less labor than production of a similar vehicle with either a gasoline or diesel engine.” It included an estimate from Ernst & Young that combustion vehicle powertrains may have more than 2,000 components and hundreds of moving parts, compared to what Tesla has said is 17 moving parts in its drivetrain, including two in the motor.

“Much of the mechanical and materials engineering work undertaken by automobile and parts manufacturers could be replaced by jobs requiring different skillsets such as chemical, battery, and software engineering or by imports of lithium ion batteries,” the report said.

Last year, a study commissioned by German labor unions found that 75,000 powertrain and gearbox jobs would be at risk with rising EV adoption. It found that electric vehicles take 30% less time to assemble than combustion vehicles, while battery factories require just a fifth of the workforce needed at an engine plant.

That study assumed a market share of 25% for EVs and another 15% for hybrids by 2030, which is probably a more realistic projection in Europe, where emissions mandates are fueling growth in alternative propulsion vehicles, than in the U.S. Here, electric vehicles comprised 1.8% of the market as of March 2019, with nearly 1.2 million EVs on the road nationwide, according to Edison Electric Institute. Its data showed China as the world’s largest market for EVs, at 1.18 million units sold in 2018, compared to 409,000 in Europe and 358,000 in the U.S.

Korea’s LG Chem operates a non-union battery-assembly plant in west Michigan that supplies packs used by Fiat Chrysler and in the Chevrolet Bolt, which is built at a UAW plant near Detroit. But Bloomberg reports that LG Chem pays an hourly starting wage of $16, compared to as much as $30 an hour for legacy UAW workers, but without the ability to move up to that level. Aside from that, EV batteries are almost exclusively manufactured in Asia.

The Wall Street Journal notes that union leaders persuaded members to agree to cuts in their annual bonuses to get Porsche to build its new Taycan electric sedan in Stuttgart, with the UAW pressing for similar moves here in the U.S.

“We’d love to have an electric pickup here,” Scott Harwick, a picketing electrician at GM’s Detroit-Hamtramck Assembly plant, told WSJ. “I don’t care what it is. We just want something that sells.”