The auto industry is experiencing a strike led by the United Auto Workers (UAW), who are determined to maintain the strong presence of unions in the sector despite the rise of electric vehicles (EVs) which could potentially reduce the size of the workforce. Thousands of workers at three plants that produce petrol-powered trucks and sport utility vehicles walked out at midnight on Thursday to demand higher wages. The UAW is fighting to protect its members through the transition to cleaner energy, which it estimates could result in the loss of 35,000 jobs.
This strike is motivated by the fact that successful players in the EV market like Tesla and Rivian Automotive do not have a unionized workforce. On the other hand, plants such as the Lordstown factory in Ohio, which is operated by a joint venture involving General Motors and LG Energy Solutions, are not covered by the same contracts as the striking plants. The UAW has voiced concerns about the pay and working conditions at this joint venture, urging that jobs in battery plants must be equal or better than those in traditional vehicle manufacturing.
The UAW is pushing for the expansion of its coverage to include plants like Lordstown, but the carmakers are resistant to this idea. They have offered wage increases ranging from 17.5% to 20%, while the UAW has asked for a 36% increase over four years. Moreover, the carmakers want to maintain a two-tier wage system that pays newer workers less than longtime employees, a practice that the union opposes.
The auto industry, which employs nearly 1 million workers, is considered a desirable industry in terms of job stability. However, this was not always the case. According to the Library of Congress, in 1935, the average auto worker made about $900 a month, which was only slightly more than half the necessary income to support a family of four. The historic Sit Down Strike in 1936-1937, where workers took control of several GM plants, played a significant role in improving wages and working conditions in the industry.
The UAW’s membership has declined over the years, and the shift towards EVs may further reduce its numbers. Building EVs requires fewer workers due to their simplified design compared to internal combustion engine vehicles. Ford’s CEO, Jim Farley, has projected that the industry will need 40% fewer workers to build EVs. However, the UAW argues that workers should not be left behind during this transition and that the good jobs provided by the auto industry should be preserved.
This issue of technology impacting unionized workforces is not unique to the auto industry. Other sectors, such as film-making, shipping, and aviation, are also grappling with the effects of new technology on their labor forces. Despite facing various technological transitions in the past, the UAW recognizes that the shift to EVs is particularly disruptive and has the potential to eliminate or change many jobs.
Electrification has different implications for unions outside the US. In Germany, for example, where unions have representation on company boards, electric vehicle workers are part of the same union as their counterparts in the traditional automobile sector. Even Tesla, known for its resistance to labor unions, has a union in Germany and has faced conflicts with workers over conditions and demands.
In the US, however, carmakers like Volkswagen have chosen to open plants in states that are less favorable towards labor unions. Workers at these facilities have rejected unionization efforts. The carmakers are currently investing massive amounts of money in new factories and infrastructure to support EV production. If the UAW succeeds in achieving its wage goals, it could impact the profitability of existing projects linked to the industry’s transformation.
Senator Bernie Sanders, speaking at a UAW rally in Detroit, highlighted the fact that average wages for American auto workers have actually decreased over the past two decades after adjusting for inflation. He expressed determination to restore the days when an auto industry job was considered a gold standard for the working class in the US.
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