GM strike illustrates how switching to electric cars puts future auto jobs at risk

One of the largest unknowns with ongoing labor negotiations between the United Auto Workers Union and General Motors is not about pay or benefits.

Electric vehicles increase the industry and save some jobs when factories are rebuilt to build zero-emission vehicles, but cost many times more in the long run. It is a major concern for union leaders when they negotiate a new employment agreement for 158,000 union workers at the three Detroit automakers: Ford, General Motors and Fiat Chrysler.

Chief Executive Mary Barra announced plans in November last year to cut up to 14,000 jobs, shut down five factories in North America by the end of this year and relocate the company's workforce and selection to build more electric and autonomous vehicles.

"We transform our workforce through payroll and executive reductions as we move toward an all-electric future," she told investors as they outlined the company's new strategy in January. "These actions also help us fund the race to lead in EV and AV technology development as both automakers and technology companies compete to unlock new and potentially lucrative revenue streams through mobility services."

Some 48,000 GM workers are currently on strike while UAW is negotiating a new employment contract that could save some of these factories from closing.

Not only is the industry struggling with falling consumer demand for cars, the shift to EVs will also cost even more jobs. EVs are simply easier to build and require fewer parts without a motor. UAW expects the move from gasoline engines could cut 35,000 jobs over the next few years, according to a research study conducted by the union last year. This means that the union mainly negotiates new products that could ultimately mean less jobs for members.

"EV drives are simple compared to internal combustion engines," said UAW Research Director Jennifer Kelly during a conference in March to discuss upcoming contract talks with GM, Ford Motor and Fiat Chrysler. "Simplicity can reduce the amount of labor, and thus jobs, associated with vehicle production."

Combustion engines can require thousands of parts while electric "motors" and powertrains only require a few hundred, according to the study. Smaller parts mean smaller assembly jobs for workers.

The situation represents a modern paradox in the industry. In order to create "jobs of the future," as UAW executives have referred to them, GM and other automakers are expected to cut or change many of those that exist today.

The new jobs are likely to pay more than the ones they replace, but require more union workers and more training than traditional assembly jobs, something the union has said its members are willing and ready to do.

"I want to tell you that UAW is excited to be part of the evolving workforce: EV propulsion and energy storage; autonomous vehicles and related components, new mobility companies and joint ventures," said UAW President Gary Jones as they opened negotiations with GM in July.

Whether car manufacturers and UAW are ready for such a change in industry could be determined by the union's ongoing negotiations with GM. Last year, the carmaker announced plans to end production and potentially close up to four U.S. assembly plants, including large assembly plants in Ohio and Michigan, affecting about 1[ads1]4,000 union members.

As part of a potential deal with the union, the company told union dealers it could produce an all-electric pickup for Detroit-Hamtramck Assembly in Michigan and battery cell production for all-electric vehicles at or near Lordstown Assembly in Ohio, according to a person who is familiar with the conversations. The Lordstown plant was shut down in March, and Detroit-Hamtramck is scheduled to stop production in January.

The new job, according to details of a potential union deal released by GM on September 15, would help add 5,400 new jobs to the union over the next four years – far from the amount of jobs that was influenced by the car manufacturer's plans.

"I've been in electric vehicle systems, they don't take as many workers to put together," said Michelle Krebs, senior analyst at Autotrader, who toured the Audi E-Tron plant in Belgium last year. "It's very quiet. There are not many people in the plant because you basically build the vehicle and then you push the battery under the floor in their case, and there are much smaller parts."

The all-electric pickup and battery production is part of GM's plan to introduce 20 new electric models by 2023, eventually phasing out gasoline and diesel-powered cars.

It is not just GM who makes these moves either.

Job losses would bleed to other countries as well. Even a moderate transition to electric mobility could bring up to 75,000 Germans out of work by 2030, even after creating 25,000 new jobs, Germany's Fraunhofer Institute for Industrial Engineering IAO said in a study last year.

Ford CEO Jim Hackett, discussing electric motors with investors in 2017, told investors that the switch to electric could cut the time needed to build an electric car by 30%, compared to conventional vehicles, according to Reuters.

Hyundai's auto union boss, Ha Bu-young didn't either. There was no word when he told Reuters last year that the company's switch to electric could cut jobs at the Korean car manufacturer by as much as 70%.

"Electric cars are disasters. They are evil. We are very nervous," he said at the time.

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