The United Auto Workers Union is calling on General Motors to pay full union wages at electric vehicle battery factories, thrusting what had been a festering conflict into the spotlight.
The union, in a statement reacting to the announcement on Friday that it would build a second U.S. battery plant, said the company and its joint venture partner have a moral obligation to pay higher wages at battery factories.
The statement sets the tone for the next round of contract talks in 2023 between GM, Ford and Stellantis all of which have plans to make significant numbers of battery-powered vehicles by then as they invest billions to transition from internal combustion engines.
However, if the conflict is resolved, it's likely to chart the course of American manufacturing wages into the next decade as the nation moves from petroleum driven vehicles to those that run on electricity.
LG Energy said the wage at the batteries factories would be determined by Ultium Cells LLC, the joint venture with GM that is responsible for the manufactures.
ENGINEERING THE AUTOMAKERS EMBRACE ELECTRIC VEHICLES, BUT WHAT ARE BUYERS?
GM and LG Energy Solutions, its partner on the new plant in Lordstown, Ohio and another under construction in Spring Hill, Tennessee near Cleveland, should work with the UAW to ensure these are good-paying union jobs like those of their brothers and sisters who make internal combustion engines, the union statement said.
It could also bring President Joe Biden into the fray, because he is pushing the transition to EVs which he says will create good-paying, union jobs of the future.
Currently, higher-scale manufacturing workers at internal combustion engine and transmission plants run by GM, Ford and Stellantis make more than$ 31 an hour as union production workers. When the Lordstown plant was announced in 2019, Mary Barra said that its worker pay would follow GM's component manufacturing strategy where workers are paid less than the top wages. She said the plant would have to be PERSONAL; FORD AND TESLA CEOs trade TWITTER BARBS AND IT GETS PERSONAL.
In a GM plant assembling batteries in Brownstown Township, Michigan, the union agreed in 2009 to$ 15 to$ 17 per hour wages to assemble battery cells into packs for the now-canceled Chevrolet Volt hybrid gas-electric car.
That's a little more than what Amazon pays in distribution centers and just above a proposed$ 15 per hour new federal minimum wage. GM also pays around$ 22.50 per hour at the union-represented parts manufacturing plants. Kristin Dziczek, Senior Vice President at the Center for Automotive Research, an industry think tank, said that workers who make internal combustion engines and transmissions and associated parts are at the epicenter of this industrial transformation from internal combustion engines to batteries.
The UAW wants higher wages, but joint venture companies fear they will not be competitive globally if they pay too much.
GET FOX BUSINESS ON THE GO BY CLICKING HERE There are lots of jobs on the line; The president talks about this transition as positive for jobs, but it must be orchestrated very carefully to do that, she said.
Guidehouse Insights Principal Analyst Sam Abuelsamid said Ford and Stellantis likely will follow a model similar to GM with joint ventures running battery plants, placing union jobs at combustion engines and transmission plants at risk.
The union will lose a huge number of jobs from battery and transmission plants, which are replaced by motor factories, he said. There will also be the reduction of construction jobs in the assembly plants due to simplified production of EVs with probably around 25 -- 30% less people required to build the same number of vehicles.
Click HERE TO READ MORE ON FOX BUSINESS.
The transition, he said, could cost the Union half of its membership in the next 10 to 15 years unless it successfully organizes the battery plants. The union statement came just after GM announced plans to build the second U.S. electric car battery factory in Spring Hill, Tennessee with more than$ 2.3 billion in mind.