GM electric car push can mean fewer and lower paying jobs
DETROIT (AP) – If American consumers ever dig fuel burners for electric vehicles, the United Auto Workers Union is in trouble.
Gone would be thousands of jobs on engine and transmission systems across the industrial Midwest, replaced by less laborious on creaky, mostly automated factories mixing chemicals to make batteries.
The Trade Union is very aware of this opportunity as it negotiates for the future as much as the present in contract talks with General Motors. Meanwhile, more than 49,000 unions are on strike against the company and have closed the factories in the last six days.
GM CEO Mary Barra has promised an "all-electric future," with the company undergoing a painstaking shift to raise money in part to develop 20 electric models it plans to sell worldwide by 2023.
In the contract talks, GM has offered to build an electric vehicle battery plant in Lordstown, Ohio, where the company is closing a assembly plant. According to a person informed of the offer, the car manufacturer wants the plant to be operated by a joint venture or a battery company. It would be staffed by far fewer union workers who would be paid less than $ 30 per hour that UAW members make on the assembly lines, said the person, who did not want to be identified because contract details are confidential.
"I can see why the UAW would reject such an agreement," Abuelsamid said. "To accept a lower salary level for employees in Lordstown or other factories where GM will do something similar, I think it would be foolish for them."
However, for the company, lower wages are needed to keep costs competitive with other automakers who want to deliver battery cell and package production to nonunion factories that pay less than UAW wages, Abuelsamid said. GM also has to rule on spending when it tries to sell more electric vehicles, which are now more expensive than gas-powered ones, he said.
The company will not provide details on how many workers will be employed at the Lordstown battery plant or how much they will be paid. But the number will be nowhere near the $ 30 an hour payroll at the assembly plant, which two years ago employed 4,500 people making the Chevrolet Cruze compact car.
The only GM plant comparable to that proposed in Lordstown is now located in Brownstown Township, Michigan. Around 100 UAW workers there took battery cells made by LG Chem in Western Michigan and combined them into packages for the Chevrolet Volt rechargeable gas electric car. Volt was canceled last spring and now 22 remaining workers are making hybrid battery packs and mounting autonomous vehicle equipment.
In 2009, UAW agreed on a lower salary from $ 15 to $ 17 per hour in Brownstown to help get the Volt started.
While there is potential for growth if electric car sales take off and more batteries are needed, no one is sure when or if it will happen in the United States Few predict that Barra's "all electric future" is coming soon and the Trump administration has proposed rolling back fuel economy requirements.
Fully electric vehicles today account for about 1.5% of US new car sales, and LMC Automotive predicts that it will rise to only 7.5% by 2030. The forecast firm does not see EV sales hit 50% of the market by at least 2049
Globally, there is another story. Navigant sees growth from just over 1 million sales last year to 6.5 million by 2025. The surge is expected due to government incentives and regulations for fuel economy in China.
Currently, GM is losing thousands on every Chevy Bolt electric car it sells, and it has not been able to produce enough of them to cut costs. Without production to a great extent it is difficult to cut the price. Paying full union pay in Lordstown would push costs up.
"You cannot be at a cost disadvantage in a market that is in its infancy," said Jeff Schuster, senior vice president of LMC.
Even if the union succeeds in getting higher wages on battery plants, engine and transmission jobs will one day begin to disappear, Abuelsamid said. He estimates that it will only take 25% to 50% of today's engine and transmission workforce to build battery cells, packages and electric motors. GM and others can also outsource battery cells and packages to non-union plants as GM does now for Bolt.
Whether the Union will take a stand on electric vehicles in this round of contract talks remains to be seen. It may decide it does not want to set a lower pay precedent that could spread to Fiat Chrysler or Ford. But if it can maintain health insurance and get salary increases, job guarantees, more profit sharing and a way for full-time employees to go full-time, it could be future contract talks, says Schuster.
in our opinion, the path (to electric vehicles) is so far down the road that I'm not sure it needs to be handled right now, ”he said. "I don't know if it has to be the thing about a deal at this stage."
Power plant workers know their future is in balance, said Tim O & # 39; Hara, president of the UAW local in Lordstown. He expects the union to try to protect as many higher paid jobs as it can.
"There have been many people's thoughts on the electric future," said O & # 39; Hara. "The goal is always to have the same kind of jobs with benefits and salaries that you start with."
