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Msg  2370 of 2456  at  9/16/2023 12:08:47 PM  by


A UAW Strike Made in Washington; The underlying cause of the auto walkout is the Bide

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A UAW Strike Made in Washington; The underlying cause of the auto walkout is the Biden Administration's forced electric-vehicle transition.

; New York, N.Y..
By The Editorial Board

Shawn Fain narrowly won election as United Auto Workers president in March on a platform of new militancy against U.S. auto companies. He now has the strike he appears to have wanted, as the union simultaneously struck GM, Ford and Stellantis on Friday for the first time in history.

"This boils down to one thing: It's corporate greed," Mr. Fain declared. The UAW is calling walkouts at select plants to minimize how much it has to pay workers from its $825 million strike fund while still causing pain for auto makers. On Friday the union targeted three truck and SUV plants that produce some of the auto makers' most profitable vehicles.

Mr. Fain wants a larger share of auto-maker profits, but Detroit's Big Three say his demands would make them less competitive against non-union car makers like Tesla and lead to losses. He wants a 36% pay increase over four years, a 32-hour workweek with overtime for additional hours, the restoration of retiree health benefits, and defined-benefit pensions (rather than 401(k)s) for all workers, as well as cost-of-living adjustments.

The three auto makers have raised their initial wage offers to increases between 17.5% and 20%, plus large one-time payments and improved fringe benefits including time off. But a 32-hour workweek and restoration of retirement benefits for newer workers, which ended when the auto makers careened toward insolvency in 2007, are nonstarters.

In many ways, this strike is made in Washington because of the Biden Administration's policy mandating a rapid transition to electric vehicles. The UAW knows that EVs require fewer workers to make and will jeopardize union jobs making gas-powered cars. But the companies already lose money on EVs and worry about making too many concessions to the UAW that will cause them to lose even more as they are forced to build more EVs.

It's hard to overstate the costs of this coerced EV transition. The Biden Administration, with California as its co-enforcer, is mandating that EVs make up an increasing share of auto-maker sales—two-thirds by 2032. California and other progressive states plan to ban all new gas-powered cars by 2035.

But last year EVs made up less than 3% of Detroit auto maker sales. Auto makers are increasingly steering profits from their popular gas-powered pickups and SUVs into cranking up EV production and subsidizing their sales to meet the government mandates.

GM and Stellantis in 2021 each committed to spending about $35 billion through 2025 on electric and "alternative" vehicles. Ford last year said it would invest $50 billion in EVs through 2026. Even with the Inflation Reduction Act's generous subsidies for battery production and for EV buyers, the companies can't accept the UAW's demands without putting profitability at risk. Ford lost nearly $60,000 on each EV it sold in 2023's first quarter.

The companies have already laid off thousands of salaried workers, including engineers, to finance the EV transition. Assembly-line workers so far have been largely spared. But Mr. Fain knows that auto makers will ultimately have to shut down union plants that produce gas-powered vehicles, as Stellantis did a Jeep Cherokee plant last December.

All of this raises the stakes for both sides at the bargaining table. The companies may decide to make greater concessions to buy short-term labor peace, especially if the White House applies political pressure. Yet the strike is reinforcing the message that auto makers should build their EVs as far away from the UAW's reach as possible, whether in right-to-work U.S. states or Mexico.

Mr. Fain may look like a hero to his members now as he fights the bosses in the C suite. But if the result is less competitive companies, the ultimate losers will be those same members when their jobs disappear. And they should direct some of the blame at the misguided industrial policy of the man in the Oval Office.


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