A Cranky UAW
By 
The United Auto Workers is a cranky, grumbling union right now. The UAW has been subjected to the horrors of two-tier contracts for years. That union’s old close ties to the Democratic Party have been frayed for a couple of reasons. One was the Obama administration not going to bat for them in the deals to save the car companies from failure and that’s a very good reason. Obama was not a good president for workers, especially in that first term. But also, the rise of green energy has threatened their jobs, in part because the automakers themselves have not done a good job getting ahead of the game on this, in part because the Biden administration hasn’t done enough to push for these green jobs to be union jobs, and in part because the UAW doesn’t do enough organizing of new facilities. Also, UAW members have been caught up in the cultural game around JOBS, which for decades now has allowed companies to avoid taking responsibility for all the jobs they have outsourced, eliminated, automated, etc., and claim that environmentalists are the problem. So you take all of this and then you add a sea change within the UAW, with a corruption scandal taking out the old leadership and changes to the union structure that led to an actual direct election of the new leadership for their first time in its nearly 90 year history.
All of this then has made for a union where membership is increasingly engaged and if they are going to support Biden again in 2024, they want something real for it. The UAW is far from the power it used to be, but it still is critical in Michigan, which is of course a must win state for Democrats. A lot of the members are pissed at Democrats, pissed at GM, pissed at the old union leadership.
Charles Taylor wanted to tell me about his aunt.
She was a single mother who raised several children and had her own home while working at a Ford factory represented by the United Auto Workers. “Every time I went to her house, it was always fine,” Taylor said, reflecting on his childhood. “I always wondered, ‘Where does she work?’ and when I found out she worked for Ford Motor Company, I was like, ‘That’s beautiful.’”
When a similar opportunity came for him a few years ago, joining UAW Local 898 at the Ford Rawsonville Components Plant in Ypsilanti to produce battery packs for hybrid vehicles, he couldn’t turn it down. But he was hired into a much different system than his aunt.
“You have to work eight to ten years to reach $22.50 an hour,” Taylor told me. Job concessions after the Great Recession had created a two-tiered system, with new hires not afforded the same wages and benefits as the veterans. Starting wages at UAW-repped plants are below the level they were in 2007, adjusted for inflation. Taylor loves having a job covered by the UAW; he described new hires at the Rawsonville plant coming from all walks of life. But it wasn’t the same automatic path into the middle class as his predecessors had.
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“We gave up a lot of concessions to help the corporation out,” Nick, a 17-year UAW member at the Detroit plant, told me. “They promised us all these things back when brighter days came. It’s been a decade later and they still haven’t given us them back.”
While profits at the Big Three have totally reversed—GM saw record earnings in 2021 and 2022, and overall the companies have made $250 billion in the last ten years—the companies let Tesla and other automakers dominate electric vehicles for more than a decade, in the process losing the ability to develop in-house knowledge for future EV production. Tesla also set a precedent that EV jobs don’t have to be union jobs. But now, with the Big Three building out their EV manufacturing capacities, the UAW’s presence can’t simply be cast aside.
The industry’s electrification is in such early stages, Bloomberg New Energy Finance analyst Corey Cantor told me, that there still is no standardized way to manufacture an EV battery. It’s a toss-up between whether the average American consumer in the future will drive a lithium iron phosphate (LFP) or a lithium nickel manganese cobalt (NMC) powered vehicle. (Automakers are hedging their bets, making deals for nickel and copper as well as for lithium.)
However it shakes out, one thing is certain: Electric vehicles have fewer moving parts. This means a simpler production process, translating to less human labor on the manufacturing side. Ford recognizes that this shift will reorder its workforce. The company’s CEO, Jim Farley, has suggested that the company can vertically integrate other operations, like battery production, and retrain its workforce on those new jobs.
But what’s left out of Farley’s vision for the future of the automotive industry is the UAW’s most existential concern. Are Big Three jobs in the EV era protected under the same UAW master agreement?
The Big Three know that their battery technology capacity is behind its competitors. (So was Tesla, initially; that’s why it brought in Panasonic for a U.S. battery plant.) To meet this challenge, Cantor explained, the companies are teaming up with overseas firms with more experience, creating joint ventures. Several of them are with South Korean partners. GM and LG Energy Solution have created what’s called Ultium Cells in Lordstown, Ohio, and another GM joint venture is with Samsung SDI for a plant in Indiana; Ford and SK are teamed up for BlueOval SK; and Stellantis is working with Samsung through StarPlus Energy. (Even Ford’s in-house battery factory in Marshall, about 100 miles from Detroit, is using technology licensed from a Chinese company named CATL.)
“It’s a joint venture because both companies are putting in money in order to create the battery manufacturing plant,” Cantor told me. The South Korean companies could have just provided battery components to the automakers. However, Cantor noted, “there’s an advantage to learning from both sides.” As much as the Big Three will learn about battery manufacturing, the South Korean companies will develop a similar knowledge base for manufacturing vehicles.
The downside to the joint-venture strategy is how the Big Three are using the partnerships as a pretext for reclassifying jobs at these new facilities. In other words, jobs at joint ventures can be unionized, but they are not covered under UAW contracts with the Big Three. The argument is that the joint ventures are separate legal entities. Following that logic, the conclusion is that there is no legal path to fold workers at joint-venture facilities into the UAW’s master agreement.
In short, if the Biden administration is as pro-union as it claims, this is key area where it needs to prove itself. Green energy production HAS to be union production if Democratic claims about rebuilding manufacturing and the middle class together have any heft behind them. My suspicion is that the green energy folks in the administration and the union folks are not the same folks. But the UAW has so far refused to endorse Biden and they have ever right to do that. They need some concessions here and these aren’t something abstract. The Big Three would do anything to get rid of the UAW entirely if they could. Instead, they chip away year after year after year. That has to stop if they want the public subsidies. Obama really dropped the ball on this. Biden should already know he can’t make that mistake too. Heck, the entire future of the country may count on it given Michigan’s critical nature in the election next year. Let’s see some action here.