Complete Story
10/22/2019
GM Offer To Save Lordstown Had A Catch
Source: Automotive News
For the UAW, who builds electric vehicles and how much they earn is an existential issue. Negotiators are already trying to get a better deal for temporary and less-tenured workers who don’t make the top assembly wage -- part of a tiered-pay system set up to rebuild union ranks in the wake of the recession. If it caves to GM again, the UAW fears it will be chasing wages for a generation.
There are also grave concerns with essentially incentivizing GM to plow money into plants making battery cells and packs -- which may require less labor and likely use more non-union sub-assembly components -- at the expense of unionized factories making engines and transmissions for gas-burning autos.
Big stakes
The largest producer of electric vehicles is Tesla Inc., whose CEO Elon Musk has vehemently and publicly opposed the UAW. A Tesla employee who called for forming a union at the company’s assembly plant in 2017 claimed assembly workers there made between $17 and $21 an hour, though they also are compensated with stock options.
The battery factory would not be located in GM’s idled Lordstown assembly plant. GM wants to go forward with a plan to sell the facility to a venture overseen by fledgling electric-vehicle maker Workhorse Group Inc.
The union’s worries
The UAW already has reservations about electrification. In a white paper published earlier this year, the union estimated 35,000 jobs at engine and transmission plants could be wiped out as EVs become the norm. It’s worried that assembly of EVs, which require fewer parts, will be a drag on jobs.
“The production of new EV components could shift business and employment to non-auto companies that lack a large U.S. manufacturing base,” UAW researchers wrote in the white paper. “This could undermine auto job quality by shifting work to employers with no history of manufacturing labor relations or to companies more likely to import components.”
There is a similar issue, though much less contentious, at GM’s so-called Poletown plant that straddles the line between the traditionally Polish town of Hamtramck and Detroit. GM also has offered to build new electric vehicles there, which would give the factory life after January, when the company ceases production of the sedans it’s been making. If the union agrees, Hamtramck would make a line of battery-powered pickups and SUVs.
Orion precedent
While assemblers in Hamtramck would be covered by GM’s main contract, the company would likely want to include provisions to pay some workers at a lower wage, the people said. The automaker already has a subsidiary called GM Subsystems Manufacturing that makes battery packs in Brownstown, Mich., and does non-assembly work in other plants, such as handling of parts and materials. Those workers top-out at $17 an hour.
The Chevy Bolt plant in Orion, Mich., has such a deal in place, along with GM’s plant in Lansing making Chevy Camaro muscle cars and Cadillac sedans.
For all its concerns, the UAW does see building electric vehicles as a possible lifeline for a union that’s seen membership fall precipitously from its peak in the 1970s.