Workers at the Big Three auto companies began an unprecedented strike on Friday. Photo: Paul Sancia/AP
Joe Biden called himself «the most pro-union president in American history.» He also staked his political legacy on the clean energy revolution driven by the shift from internal combustion engines to electric vehicles.
These two goals are now in sharp conflict amid a historic blow to America. major automakers.
On Friday, workers at the Big Three automakers—Ford, General Motors and Chrysler owner Stellantis—began an unprecedented strike.
About 12,700 employees at Ohio's Rust Belt plants in Michigan and Missouri had their tools knocked down. The strikes, coordinated by the United Auto Workers, are expected to intensify in the coming days, but plans are being kept secret for now to minimize disruption.
Workers have many grievances. They are seeking a 36% pay rise over four years (a figure linked to what Big Three executives currently earn), a 32-hour work week and more annual holidays.
But in the background There's another problem: the generational shift to electric vehicles that Biden is advocating poses a threat to their livelihoods.
The strike now threatens to become a political embarrassment for Biden, with little more than a year left before an election that could be seen as a referendum on his economic management.
The cornerstone of Biden's inflation reduction law was huge subsidies for the purchase of electric vehicles. Photo: KENT NISHIMURA/AFP
The Biden administration has introduced huge subsidies both for the purchase of electric vehicles and for automakers themselves as a cornerstone of the Inflation Reduction Act, which will spend hundreds of billions of dollars on green incentives. Biden said the program would benefit unions by encouraging projects with generous labor standards.
But workers were not convinced. According to an analysis by AlixPartners, electric vehicles require 40% less time to assemble the powertrain, including batteries, motors and transmission, compared to building a combustion engine-powered vehicle.
Car manufacturing in general is becoming increasingly automated, says Peter Wells, director of Cardiff University's Center for Automotive Industry Research. Each new product line brings more efficient processes, more robots and fewer jobs to the automotive industry.
“There is a lot of concern about what will happen with electrification – will there be enough jobs left in the workforce? Will the market be big enough? And I think that, generally speaking, the short answer is no,” says Wells.
Many of the parts in gasoline and diesel cars are simply not replicated in electric vehicles, and the jobs that make or assemble those parts are machine , will go.
“If you make an exhaust system, your future in the production of new cars starts to look very limited,” adds Wells.
New types of jobs will be created. There will likely be a boom in demand for software and other white-collar jobs. A huge potential lithium deposit has been discovered in Nevada, which, if proven accessible, could be the largest deposit in the world and sufficient to meet industry demand for many decades.
However, neither is particularly rewarding. benefit Motor City employees. While Detroit and its Big Three automakers are unionized, many other plants are not.
Global sales of electric vehicles are growing exponentially
New entrants into U.S. auto manufacturing from Europe and Japan tend to locate their factories away from Detroit, and traditional auto manufacturing is the center of the U.S., Wells says, adding that this is partly to move away from “traditional trade union views.”
The Big Three are hardly in trouble. The three companies had combined profits of $21bn (£17bn) in the first six months of 2023, more than double the same period a year ago. That follows record earnings for auto companies following the pandemic crisis.
GM CEO Mary Barra, the highest-paid of the American trio, now earns $29 million a year. over the past four years the growth has been 34%.
This brighter picture in U.S. manufacturing may have emboldened the United Auto Workers to act now.
“Workers feel empowered and able to advocate for higher wages,” Wells says.
This undermines automakers' arguments that they will have to choose between joining unions and delaying the transition to an electric system.
Ford CEO Jim Farley said accepting workers' demands would force the company to «choose between «we are going out of business and rewarding our employees by switching to electricity.»
Ford Chief Executive Jim Farley says accepting workers' demands would force the company to «choose between going out of business and rewarding our workers.» Photo: Bill Pugliano/Getty Images North America
The political stakes are high for Biden. The American auto industry is concentrated in a few states that are likely to be critical in determining who wins next year's election, particularly Michigan, which was won by Biden in 2020 and Donald Trump in 2016. Auto manufacturing is so important to the state that a 40-day strike in 2019 sent the state's economy into a quarter of negative growth.
“The Rust Belt is a near certainty for Biden to win in 2024,” analysts at the political consulting firm Beacon Research wrote in a note. They wrote: “The President cannot have his cake and eat it; his agenda involves necessary compromises. Biden must control the ambition of his climate goals to avoid undermining political goals.”
Despite his rhetoric, Biden's support among labor unions is not guaranteed. Last year, the US President signed a law banning a railroad strike, which sparked a backlash. The UAW, which strongly supported Biden in 2020, has yet to do the same for his 2024 campaign, saying he has yet to earn support.
Trump appears determined to siphon off some of that support. The Republican leader is scheduled to address union workers next Wednesday, skipping debates against his rivals for the nomination. The 77-year-old said Biden was «waging war» on automakers with «harmful mandates» on electric vehicles and sought union approval.
The scandal is a potential preview of how environmental issues could increasingly become political issue in the US, just as policies such as London Mayor Sadiq Khan's expansion of Ulez have sparked attempts to create a dividing line between Labor and the Conservatives in the UK.
Biden sees this. the transition to green energy as his main political achievement. But if voters see the push threatening jobs — in the auto industry and beyond — it will mark a political backlash that could cost him the next election.
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