EVs seen as good news, bad news in some areas
For Michigan's economy, the vehicles are both scary and promising for livelihood
WAYNE, MICH. >> Last fall, Tiffanie Simmons, a second-generation autoworker, endured a six-week strike at the Ford Motor factory just west of Detroit where she builds Bronco SUVs. That yielded a pay raise of 25% over the next four years, easing the pain of reductions that she and other union workers swallowed more than a decade ago.
But as Simmons, 38, contemplates prospects for the American auto industry in the state that invented it, she worries about a new force: the shift toward electric vehicles. She is dismayed that the transition has been championed by President Joe Biden, whose pro-labor credentials are at the heart of his bid for reelection, and who recently gained the endorsement of her union, the United Auto Workers.
The Biden administration has embraced electric vehicles as a means of generating high-paying jobs while cutting emissions. It has dispensed tax credits to encourage consumers to buy electric cars, while limiting the benefits to models that use U.S.-made parts.
But autoworkers fixate on the assumption that electric cars — simpler machines than their gaspowered forebears — will require fewer hands to build. They accuse Biden of jeopardizing their livelihoods.
“I was disappointed,” Simmons said of the president. “We trust you to make sure that Americans are employed.”
Michigan is one of six battleground states that could determine the winner of the presidential election, and the auto industry has long been at the center of the state's economic prospects.
Today, the fortunes of Michigan's auto industry revolve around a key variable: Is the shift to electric vehicles a fresh source of dynamism and paychecks, or the latest reason to fret about the fate of U.S. factory workers?
“It's still early days,” said Gabriel Ehrlich, an economic forecaster at the University of Michigan. “There's a widespread but not universal feeling that electric vehicles will require less labor to produce. In the long run, we do expect labor demand to decline in auto manufacturing.”
Indignation over the prospect of job losses among autoworkers — a crucial voting bloc — has reportedly prompted the Biden administration to consider relaxing its stringent auto emissions standards, slowing the transition toward electric vehicles. Tighter limits on emissions had been a central plank of the administration's efforts to force carmakers to manufacture more electric models.
In Michigan, Gov. Gretchen Whitmer, a Democrat, has bolstered training programs to help workers get jobs in emerging areas of manufacturing, and especially electric vehicles.
“This is where the world is going to go,” said Jonathan Smith, senior chief deputy director of Michigan's Department of Labor and Economic Opportunity, who is overseeing the creation of a state office to aid workers in forging careers in the electric vehicle industry. “The question is, do we prepare Michigan?”
Former President Donald Trump, Biden's presumptive opponent, has made inroads with autoworkers by accusing the White House of pursuing a “jobkilling EV mandate.” Many of them dismiss electric vehicles as unwanted, unaffordable and impractical given the need to charge them. They nurse a sense of grievance that their jobs are being risked for the goal of limiting carbon emissions, while many question the scientific consensus behind climate change.
Seminal industry
Detroit has been a hub of industry since the late 19th century, owing to its proximity to the Great Lakes, a natural transportation system that allowed raw materials to be brought in from everywhere. Local factories made rail cars, ovens and stoves. Much like Silicon Valley decades later, the city was full of tinkerers and entrepreneurs wielding creative powers in the hunt for wealth.
Henry Ford turned his Model T into the world's first mass-produced car, and mastered the intricacies of the assembly line at his enormous Highland Park factory.
Michigan was transformed from an agrarian state into one where virtually anyone willing to hoist a wrench could earn enough in a factory to buy a home and take the family on vacation — often, behind the wheel of a Ford. By 1950, Michigan was the 10thrichest state in per capita personal income, according to data from the Federal Reserve Bank of St. Louis.
But over the following decades, Michigan devolved into an emblem of the forces assailing middle-class security. International trade and container shipping allowed companies to shift factory production to Asia and Latin America. Union power was decimated, especially as U.S. manufacturers moved work to nonunion plants in the South. With more automation, factories produced more with fewer hands.
By 2009, a financial crisis and flagging sales had pushed major automakers to the brink of bankruptcy. Michigan's manufacturing jobs had dropped roughly in half from a decade earlier.
And by 2021, Michigan had slipped to 37th among all states in per capita personal income. Detroit became synonymous with the consequences of deindustrialization, its urban core pockmarked by abandonment.
Ford's Highland Park factory today sits vacant, its broken windows looking out on cracked pavement. A nearby shopping mall, the Model T Plaza, includes a payday lender and an outlet where people sell their plasma.
But across the street from the lifeless factory, a job center refers those seeking work to community colleges offering training for positions in electric vehicle and battery plants.
“There's a lot of opportunities out there,” said Malik Broadnax, 27, who was beginning a fourmonth technical program at Macomb Community College on how to program robots.
Uncertain future
But how quickly will the promised electric future materialize? And how long will the gas-powered automobile industry remain?
Over the next few years, Michigan is likely to see an increase in jobs, because automakers will continue to make gas-powered vehicles even as they add plants to produce electric models and batteries, said Ehrlich, the University of Michigan economist. Then, the picture gets murky. In one possible outcome, where electric vehicles advance gradually and make up 100% of new car sales by 2050, Ehrlich forecasts, Michigan's total auto manufacturing jobs will increase slightly, to 180,000, and then dip to 150,000.
But if the transition proceeds faster, and if Michigan loses investments to states where unions hold less sway, the job losses could be steeper, leaving perhaps 90,000 positions by 2050. That could eliminate another 330,000 jobs in supporting services like insurance and trucking.
Ehrlich hastens to add that, for now, the trend lines look good.
Union leaders echo that stance while vowing to organize workers at more factories. They note that their new contracts with Detroit's automakers bar the shifting of production of emerging technologies to subsidiaries where employees are not unionized.
Under the new contracts, the top rate of pay will exceed $40 an hour, up from about $32. Starting pay will exceed $30 an hour as compared to $18 under previous contracts.
“Everyone is going to be in this transition,” said Laura Dickerson, a regional director of United Auto Workers representing a section of southeastern Michigan. “We have to embrace it because it's coming.”
But recent months have illustrated the volatility at play.
A Ford electric battery plant under construction in Marshall was initially expected to create 2,500 jobs. The company recently lowered the projection to 1,700.
A Michigan startup, Our Next Energy, is completing a battery plant in Van Buren Township, a bedroom community between Detroit and Ann Arbor. Technicians oversee a series of machines that unspool rolls of metal foil and press it into battery cells.
Dan Pilarz, 46, had worked for General Motors for nearly two decades when he started at the ONE plant last June as a senior manager for maintenance.
“My kids came to me, and they said, `You're destroying this environment,'” Pilarz said. “`When are you going to do something about that?'”
He is excited to participate in the next phase of Michigan's history of innovation. He is also aware of the risks.
Our Next Energy recently laid off 137 people, including a handful at the Van Buren plant, citing pressure to cut costs.
“It's definitely a roller coaster right now,” Pilarz said. “But somebody's going to survive, and somebody's going to make these vehicles. Why not me?”