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EV battery plants solve the wild card problem.

General Motors unveiled its all-new modular platform and battery system, the Ultim, on March 4, 2020 at its Tech Center campus in Warren, Michigan.

Photo by Steve Feicht for General Motors

DETROIT – In already contentious labor negotiations between the United Auto Workers union and major automakers, the wild card issue is hanging over the negotiations.

The multibillion-dollar EV battery plants — and their expected thousands of workers — are critical to the future of the automotive industry and uniquely positioned for broader implications for the UAW, automakers and President Joe Biden’s move toward domestic manufacturing.

But there is a problem. They are not part of the negotiations.

Almost all of the announced plants are separate joint ventures with their own operations, negotiations and contracts — contracts that are not under the umbrella of the labor agreements being negotiated. General Motors, Ford Motor And Stellantes Before the September 14 deadline. The carmakers say the joint venture plants are not legally part of the discussion.

But UAW leadership has made it a priority to ensure a “just transition” to EVs for auto workers, including at battery plants. Current and former union leaders told CNBC that the battery plants should be a priority for labor organizing, regardless of whether they are directly addressed in the national contract for the union’s long-term viability.

“It’s a shell game,” UAW President Sean Fein said last week of the battery facilities. “At the end of the day, they can make joint ventures and still have a responsibility to their members, to their workers, and they chose not to do that for one reason, because they want to have a race to the bottom.”

UAW President Sean Fein (R) speaks with union member Jerome Buckley outside General Motors’ Factory Zero plant on July 12, 2023 in Detroit.

Michael Weiland/CNBC

According to current and past negotiators on both sides of the table, both sides could use the battery plants as indirect leverage in negotiations.

The idea, these experts say, would be to include future protections (or restrictions) for EV workers in labor agreements that cover traditional auto workers, which could serve as a model for future EV worker negotiations.

GM Ultimate Workers

GM is the only Detroit automaker with a combined battery plant operating and integrated – the first factory in the country to face this particular interactive dynamic and a historic plant to set standards for the industry.

GM CEO Mary Barra and other executives have said it’s up to members to decide whether battery plants should be unionized because those types of jobs are increasingly replacing traditional assembly jobs.

But they say workers at the plants should be paid less than traditional assembly jobs because it’s a different job — making vehicle parts as a whole rather than assembling the final product — traditionally done by third-party suppliers, who typically earn less than workers employed directly by automakers.

At GM’s Ultium Battery plant in Ohio, workers earn between $16 and $22 an hour, with full benefits, incentives and tuition assistance.

That’s in line with the suppliers and “subsystem” work that UAW members currently do at major automakers, but below the wages of traditional auto workers who assemble vehicles and engines and earn anywhere from $18 an hour to $32 an hour.

General Motors CEO Mary Barra speaks at the General Motors Factory Zero Electric Vehicle Assembly Plant on November 17, 2021 in Detroit, Michigan.

Nic Antaya | Getty Images

Fein has specifically criticized automakers, as well as the Biden administration, for using billions of federal tax dollars to subsidize facilities without committing to better wages and benefits for workers.

“The message to the Biden administration is that if we’re going to do anything to help these companies make that transition, labor can’t be left out of the equation,” Fein said outside the Stellantis plant last week.

Fan is withholding a re-election endorsement for President Joe Biden until union concerns about the auto industry’s transition to all-electric vehicles are addressed.

The Detroit automaker has announced an investment of about $22 billion in eight U.S. battery plants, including a $3.5 billion plant in Michigan that will be a wholly owned subsidiary of Ford rather than a joint venture.

All the plants are scheduled to start operation in the next four years.

Setting standards

The UAW released a white paper last week detailing safety issues and concerns at the Ultium plant. The report was released two days before the official start of national contract negotiations between the union and the Detroit automakers.

In its white paper, the union suggested that a GM national contract could offer a solution to the problems at the site, calling the upcoming UAW-GM national labor agreement “a highly successful model for safety protection that can be applied to Ultium Cells Lordstown and other battery cell manufacturers.”

UAW Local 5960 member Kennethia Black fills the brakes of a 2022 Chevrolet Bolt EUV during vehicle assembly at the General Motors Orion Assembly Plant on Thursday, May 6, 2021, in Orion Township, Michigan.

Photo by Steve Feicht for Chevrolet

The union could argue for a multi-company agreement or reach a new national agreement with the companies and then bargain with Ultium to finalize the agreement.

While the union wants the highest-paying battery jobs, it can also contract away from subsystem work. GM’s subsystem employees currently start at $18.50 an hour and can reach $22 or $24 an hour, depending on the job.

However, Ultim and the UAW are still “far apart” on an agreement on wages and benefits, according to two people familiar with the talks.

GM declined to comment on the white paper, citing questions about its Ultima Sales joint venture with LG Energy Solutions.

An Ultim spokesman condemned the report and the UAW’s portrayal of the plant, calling the UAW’s safety concerns “deliberately false and misleading.”


Source by [CNBC News]



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