The UAW must adapt to electric vehicles
The United Auto Workers just launched contract negotiations with the Big Three North American automakers, and few will be surprised if the result is a strike.
It almost doesn’t matter if Stellantis, Ford and General Motors make a generous offer, as they did during the 2019 negotiations that ended with a six-week walkout against GM.
For starters, union members are still reeling from a bribery and kickback scandal that resulted in convictions of UAW bosses caught selling out their rank and file for personal gain. The current UAW leadership remains untested, and forcing a strike may be the only way to prove to its membership that it is getting the best possible bargain.
On top of that, the union has made a string of inflexible demands, such as bringing back regular cost-of-living adjustments and ending wage tiers that favor members with the most seniority. Those are very expensive asks.
And even if the automakers agree to shell out considerably more pay, that still leaves the biggest threat to the union unresolved. In fact, the most far-reaching item on the UAW wish list probably will be impossible for the automakers to grant in full, at least without ruining their business prospects.
Union autoworkers are concerned, with good reason, about the global transition to electric vehicles. As of now, EVS are a relatively small part of the North American marketplace. But they’re clearly the future, and everything from the way they’re made to the politics behind them stands to weaken the UAW in the years ahead.
By rough estimates, about 30% less labor is needed to make an electric vehicle than its gas-guzzling counterpart. Advanced robotics and artificial intelligence could cut even more into labor requirements, as new EV factories multiply.
Already, low-cost manufacturers in China and elsewhere are putting out high-quality EVS that, in effect, limit how much the Big Three can pay to workers without making their products unaffordable. At the same time, joint ventures among carmakers and South Korean battery companies give the union less leverage over those making an increasingly vital auto part.
The current Big Three collective bargaining agreement covers more than 150,000 employees. And while the companies have said they’re committed to creating thousands of new, good-paying union jobs, the reality is that not every current worker will survive the transition into EVS. Fewer workers will be needed for each vehicle produced, and the companies must control their fixed costs to secure their futures.
A strike would be rough for all concerned, and we doubt it would end any better than the last strike. Workers at GM plants and suppliers lost an estimated $1 billion in wages during the protracted 2019 walkout, while achieving no big structural changes in pay or benefits and having to accept factory closures. GM said the strike cost it $3.6 billion in 2019, plus lingering damage to its brands.
No one should wish for a repeat of that harmful affair.
There’s no way to turn back the clock to the days of large industrial assembly lines where workers spend their careers doing the same job, the same way. Hard though it is, the UAW needs to fight for a good deal for its members, but also embrace changes that will mean a smaller role for itself in an electrified automotive industry.