Green or Union Lean

    Electric Vehicle  

 Gasoline Vehicle

“The president is in a really tough position… What he needs to be the most pro-labor president ever and the greenest president ever is a magic wand.” 

Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

There’s a big difference between the massive job creation represented by the unstoppable shift to alternative energy and the significant job loss among those in traditional fossil fuel-directed industries. Oil and gas workers, autoworkers and users of plants and offices vs remote workers, less labor-intensive manufacturing of electric vehicles and a huge shift to online shopping. And if you are a Democrat, supporting one of these green vectors just might be at odds with the new Democratic shift towards recapturing the working-class populists ceded to Republicans… by supporting unionization and union agenda.

As Biden sides with striking autoworkers, the Democratic green agenda – necessary to stem the existential threat of climate change – seems to propose policy choices that clearly post a challenge to unionized autoworkers. Given that the 2024 election may well hinge on voters in unionized swing states, this is big problem for Dems. Writing for the September 18th Associated Press, Chris Megerian, describes the conundrum: “Biden is trying to turbocharge the market for electric vehicles to reduce greenhouse gas emissions and prevent China from solidifying its grip on a growing industry. His signature legislation, known as the Inflation Reduction Act, includes billions of dollars in incentives to get more clean cars on the road.

“Some in the UAW fear the transition will cost jobs because electric vehicles require fewer people to assemble. Although there will be new opportunities in the production of high-capacity batteries, there’s no guarantee that those factories will be unionized, and they’re often being planned in states more hostile to organized labor….

“The union is demanding steep raises and better benefits, and it’s escalating the pressure with its targeted strike. Brittany Eason, who has worked for 11 years at the Ford Assembly Plant in Wayne, Mich., said workers are worried that they’ll ‘be pushed out by computers and electric vehicles.’… ‘How do you expect people to work with ease if they’re in fear of losing their jobs?’ said Eason. Electric vehicles may be inevitable, she said, but changes need to be made ‘so everybody can feel secure about their jobs, their homes and everything else.’

“Biden on Friday [9/15] acknowledged the tension in remarks from the White House, saying the transition to clean energy ‘should be fair and a win-win for autoworkers and auto companies.’… He dispatched top aides to Detroit to help push negotiations along, and he prodded management to make more generous offers to the union, saying ‘they should go further to ensure record corporate profits mean record contracts.’

“As part of its demands, the UAW wants to represent employees at battery plants, which would send ripple effects through an industry that has seen supply chains upended by technological changes… ‘Batteries are the power trains of the future,’ said Dave Green, a regional director for the union in Ohio and Indiana. ‘Our workers in engine and transmission areas need to be able to move into the new generation.’… Executives, however, are keen to keep a lid on labor costs as their companies prepare to compete in a global market. China is the dominant manufacturer of electric vehicles and batteries…

“Former President Trump, the front-runner for the Republican nomination, sees an opportunity to drive a wedge between Biden and workers. He issued a statement saying Biden ‘will murder the U.S. auto industry and kill countless union autoworker jobs forever, especially in Michigan and the Midwest. There is no such thing as a ‘fair transition’ to the destruction of these workers’ livelihoods and the obliteration of this cherished American industry.’”

There are no easy answers. Federal loans for US battery manufacturers have focused on plants in Tennessee and Kentucky. Workers in Michigan don’t see that as a benefit to them. The need to manufacture charging stations to match the sale of electric cars offers new job opportunities, but will those jobs be created where the mass of autoworkers are located? 70% of automotive components in American cars are outsourced to vendors beyond the Big Three carmakers, another complexity that must be addressed.

Just looking at gasoline vs electrically powered cars in the above illustrations points out radical manufacturing differences. While electric vehicles are heavier because of batteries, they are simpler because electric motors do not need transmissions (expensive and complex) to deliver torque to drive the wheels. There’s about 30% less labor required for an electric car.

Clearly, there are technology challenges needed to address the viability of electric vehicles: charging time and range being primary. Batteries in use today need to be replaced by vastly more efficient upgrades, a potential competitive leveler against Chinese manufacturers. But these paradigm shifting transitions can get ugly, and straddling these two policy vectors is a truly challenge facing Biden’s reelection bid… especially given that the swing states are likely the determinants of the upcoming presidential race.

I’m Peter Dekom, and whatever the challenge within the competing election factions, the one true reality: no one is really going to stop progress… perhaps delay it for a very short while.