Unions fear electrification will vaporize their jobs

Unions fear electrification will vaporize their jobs

October 2, 2019 0 By vishnu

As the legacy automakers finally begin to get serious about electrification, it’s becoming increasingly clear that the accelerating transition will result in a major restructuring of the industry, which seems likely to include substantial job losses. As a recent Bloomberg article reports, fear of the electric future is an underlying reason for the United Auto Workers strike against GM – the first in over a decade.

“There’s a potential for our jobs to be gone – they don’t
need us anymore,” Tim Walbolt, President of a UAW local representing Fiat
Chrysler workers in Ohio, told Bloomberg. “It scares us.”

Ford has estimated that producing EVs will require 30% fewer
hours of labor and 50% less factory floor space compared to building legacy
vehicles. Several consultants cited by Bloomberg also predicted far less demand
for labor in an electric auto industry. A study of EV production in Europe by AlixPartners
found that assembling an electric motor and battery took 40% fewer hours compared
to an ICE and transmission. IHS Markit predicts that automakers will stop
introducing new gas-powered engine families by 2022. Deloitte says the market
for legacy powertrain components such as mufflers, fuel tanks and transmissions
could shrink by as much as 20% by 2025.

“The value chain is shifting and companies and their unions
are going to have to figure out how to change themselves or risk becoming part
of a shrinking bubble,” Deloitte’s Neal Ganguli told Bloomberg.

These days, engines and transmissions are about the only
major components that all automakers build in-house, representing almost half
of automaker manufacturing capacity. Batteries – the most expensive components
of EVs – currently come almost exclusively from Asia, and other key parts are
also products of the global supply chain. To give one example, 64% of GM’s Bolt
is made in Korea, including the battery, which comes from LG Chem. The electronics
giant makes cells in South Korea and assembles packs for GM and Fiat Chrysler
at a non-union plant in Michigan, where technicians start at $16 an hour (senior
UAW employees earn $28 to $30 per hour).

The Wall Street Journal reports that GM has redirected capital to invest in electrification and autonomy by making deep cuts at legacy locations. The company’s decision to close four US factories was one of the main reasons for the recent strike.

European automakers are ahead of the US in terms of trying
to keep EV production local. Daimler is producing batteries at two
factories in Germany
. In February, Germany and France announced a
joint effort
to turbocharge battery cell production in Europe with an
investment of 1.75 billion euros. Volkswagen recently opened a new facility in Germany
that will produce battery cells at a former engine plant. VW has also committed
to a deal with its unions to produce three electrified models at factories in
Germany that were slated to be shut down. Porsche reached a deal with labor
leaders under which workers will take a cut in their annual bonuses in return
for a commitment to build the new Taycan
EV in Stuttgart.

The UAW hopes US automakers can be convinced to take similar
measures. “We want new investment in technology and products to help keep us on
the cutting edge, and training to make sure our workers are competitive,” UAW
President Gary Jones said at a recent union convention.

GM has offered to hire union members for a new battery plant
in Ohio, near the assembly plant in Lordstown that’s scheduled for closure –
however, both wages and the head count will be reduced. There’s also a plan in
the works to produce electric trucks at the Lordstown plant, in collaboration
with startup Workhorse. GM
negotiators have reportedly also floated the idea of building an electric
pickup truck at an assembly plant in Detroit that’s currently on the chopping
block.

“We’d love to have an electric pickup here,” GM electrician Scott
Harwick told the WSJ. “I don’t care what it is – we just want something that
sells.”

For those of us in the bubble of the EV/renewable-energy-oriented
media, reading about the new EVs, new technological breakthroughs and new
infrastructure projects being announced every day, it may be tempting to
conclude that the clean energy transition is inevitable and irreversible. However,
the wider world is just beginning to become aware of the major social upheavals
that will be triggered by the issue of climate change and the technological changes
that will be required to address it, and the backlash is coming.

No, there’s no conspiracy against EVs – but there is a wide
range of powerful groups that are opposed to electromobility for their own individual
reasons. These spoilers include, obviously, the oil industry and many (but by
no means all) auto industry execs, but also a variety of libertarians, Luddites
and opportunists in both politics and the media. It will be a tragedy if
organized labor joins this list. It’s up to decision-makers in the auto
industry and local and state governments to prevent that from happening.

Source: Bloomberg, Wall Street Journal