President Joe Biden made history by supporting the United Auto Workers (UAW) in their strike against major automakers in Michigan. However, his support for higher wages and benefits for the UAW may conflict with his administration’s push for the transition to electric vehicles (E.V.s).
The UAW strike, which began on September 15, demands a 36-percent raise over four years, a shorter work week, and reinstatement of pension and cost-of-living benefits lost during the 2008 recession. Additionally, the union seeks job protections as the industry shifts toward E.V.s, a key priority for Biden’s presidency. The Environmental Protection Administration has already set a goal for 67 percent of new vehicles sold in the U.S. by 2032 to be electric.
However, the transition to E.V.s could lead to significant job losses in the auto industry. Traditional vehicles have thousands of components in their powertrains, while E.V.s have far fewer. This means E.V.s require fewer hours and fewer employees to manufacture. The Congressional Research Service estimates that the Biden administration’s E.V. mandate could cost 117,000 auto industry jobs.
Furthermore, established automakers are already facing financial challenges with the transition to E.V.s. Ford expects to lose as much as $4.5 billion this year in its E.V. division, and General Motors doesn’t anticipate making a profit on E.V.s until 2025. The companies have received billions of dollars in government subsidies, but even that hasn’t helped them overcome the financial obstacles.
The UAW’s demands for higher wages and fewer hours could exacerbate the financial difficulties faced by automakers. Ford CEO Jim Farley warns that the proposals could push the automaker into bankruptcy, and General Motors CEO Mary Barra deems them unrealistic. Analysts predict that if the demands are met, E.V. prices could increase by up to $5,000.
As Biden shows support for the UAW, he finds himself in a dilemma. He wants to support the workers but needs to balance that with the industry’s shift to E.V.s. It remains to be seen if a compromise can be reached that satisfies both the UAW’s demands and the automakers’ financial realities.
– “Biden’s Support for Electric Vehicles Collides With UAW Strike,” by Jack Beyrer, The Washington Free Beacon