Electric cars to have huge impact on industry
DETROIT. — An acrid smell hangs in the air at Trenton Forging Co on the outskirts of Detroit as a two-tonne hammer slams a bar of red hot steel with enough force to shake the building.
A worker uses tongs to position the piece, heated to 2 200 degrees, under the hammer, then onto a conveyor belt. The process is repeated 7 000 times a day at the 90-employee plant, resulting in fuel rails that feed gasoline to injectors.
But the days of forging fuel rails is numbered. They're among hundreds of parts in internal combustion engines that won't be needed when the world transitions to electric vehicles, a fact that isn't lost on Dane Moxlow, the vice president of Trenton Forging, whose grandfather started the business in 1967.
“This might go away completely,” Moxlow (33) said as a pair of workers behind him inspected a freshly made rail.
“Is it something we worry about? Yeah. But it's also something we plan for.”
Across the US, thousands of companies such as Trenton Forging are warily eyeing a future of electric vehicles that contain a fraction of the parts of their petrol-powered counterparts and require less servicing and no fossil fuels or corn-based ethanol. It's a transition that will be felt well beyond Detroit, as millions of workers at repair shops, fuel stations, oil fields and farms find their jobs affected by an economic dislocation of historic proportions.
“Anybody who thinks this transition is going to go smoothly is fooling themselves,” said Michael Robinet, executive director of automotive advisory services for consulting firm IHS Markit.
Making, selling and servicing vehicles employ an estimated 4,7 million people in the US, according to the Bureau of Labour Statistics. Some of the jobs won't go away, of course — there will still be a need for dealerships and tyre shops.
Making the massive batteries that line the bottom of electric cars promises to employ thousands. But where a conventional car's engine and transmission have hundreds of parts, some electric-vehicle powertrains have as few as 17, according to the Congressional Research Service.
That doesn't take into account the radiators, fuel tanks or exhaust systems that electric vehicles don't need. Once operating, an electric car has no spark plugs or oil that need changing or mufflers that wear out. And with so few moving parts, service stations could be relegated to changing tires and windshield wipers.
Conventional cars will probably remain on the road for years, softening the blow for repair shops and other affiliated industries. But with an average lifespan of 12 years, the trend lines for gasoline-powered vehicles will be heading down. The shift will reduce demand for oil nearly by 4,7 million barrels a day by 2040 in the US alone, according to projections by BloombergNEF.
That's about 26 percent of US consumption, roughly equivalent to the amount that Germany and Brazil combined consumed daily in 2020.
Less petrol and diesel being sold means the need for ethanol, which is blended into motor fuels and consumes a third of the US corn crop, will also fall.
If the story of US economic history is one of constant creative destruction — as petrol engines displaced steam, plane travel trumped trains, plastic ate into steel demand, imported goods idled US factories — the coming shift is still remarkable in its scope.
“It's a disruption that people cannot appreciate,” said Paul Eichenberg, managing director of Paul Eichenberg Strategic Consulting.
“Truly the engine and transmission becomes the buggy whip of the 21st century.
But if you look at the other industries, it will have a huge impact.”
That future is fast approaching. General Motors has vowed to sell only zero-emissions models by 2035. Ford said it expects 40 percent of its global vehicle sales volume to be electric by 2030 and Stellantis has said it is targeting over 70 percent of sales in Europe and over 40 percent in the US to be “low emission vehicles”, meaning either electric or hybrid, by 2030.
The United Auto Workers union, seeing the handwriting on the wall, is gearing up for a fight over who gets to make the batteries that power the vehicles, said Bernie Ricke, the silver-haired president of Local 600, which represents workers at the Ford plant where the F-150 pickup truck is made.
The UAW, which has estimated the shift to electric could result in the loss of 35 000 union jobs, says it is taking a realistic approach and is pushing for protections for workers. That includes commitments that jobs be located in the US at comparable wages and benefits.
From his City Hall office across the street from GM's Global Technical Centre, Mayor Jim Fouts of Warren, Michigan, ticked off a list of benefits and investments that electric vehicles had brought. Chrysler is planning to re-open a plant in town to produce an electric version of the Jeep Wagoneer and with it 6 000 jobs, Fouts said.
“Most of the development going on in Warren is related to electric vehicles and batteries,” said Fouts, a bespectacled 78 yearold, whose age is belied by a twice-a-day running habit.
“There is a greater realisation by more and more people that the time is now to go into something that will not harm the environment which is what fossil fuels are doing.”
Still, Fouts said, some of Warren's 134 000 residents were worried about the future.
“There is a lot of reticence about whether automation and electric vehicles will replace their jobs,” Fouts said.
“I think with training they will be OK.” Dan Turke, a 50-year-old millwright for Stellantis, takes a philosopical view.
“Electric vehicles are great,” said Turke, wearing safety goggles and carrying a thermos as he prepared to start his shift at the company's 3,31 million square-foot Warren Truck Assembly Plant.
“Somebody's still got to build them.”
But the jobs created won't necessarily resemble the ones lost, said Eichenberg, the consultant, who is a former executive for auto part supplier Magna International. Parts such as transistors and capacitors and high-voltage battery packs are manufactured in much different ways — meaning a worker on an engine manufacturing line can't simply switch to making batteries.
“It's like comparing apples and oranges," Eichenberg said.
“They are chemical companies, they are materials companies and, as you have this change, there is just a fundamental difference.”
The Motor & Equipment Manufacturers Association estimates that the US auto parts industry could lose as much as 30 percent of its workforce or nearly 300 000 jobs when the transition is complete.
“Suppliers, the UAW, lots of folks are right to be concerned,” said Ann Wilson, a senior vice president at the association.
“The reality is the transition is going to occur whether they are concerned or not.”
The coming change could be likened to the electrification of America in the early part of the 20th century, when the nation began switching from the steam power to electricity, said Theodore DeWitt, University of Massachusetts Boston professor of management. — Bloomberg.