United Auto Workers Simultaneously Strike All Three Detroit Automakers Over Labor Impact of Electric Vehicles
The strike is a proxy war between those of us who want to keep our gas-powered vehicles and those who want to force us exclusively into EVs. And ending private ownership of cars altogether.
Say it with me:
Ahh, the glory of the EV movement. It’s the future of vehicular transportation (*cough*). Safe for the environment, saves money on fuel, and creates good paying union jobs…
Uhhh…that last part is a problem.
We are now experiencing historical simultaneous United Auto Worker (UAW) strikes against Ford Motor Company, General Motors, and Stellantis, over failure to reach agreement on contract negotiations containing demands that UAW has characterized as “audacious.”
As of this writing, the union is demanding a 36 percent raise in pay over the next five years, the restoration of defined benefit pensions for all workers, a 32-hour work week, job security guarantees and an end to the use of temporary workers. Considering the runaway inflation workers are currently experiencing and given what the auto industry is delivering to its workforce through its “transition” to EVs, maybe these demands are not so “audacious” after all.
What EV magic is the industry delivering to auto workers?
Simply put, EV production requires fewer parts and less labor than gas-powered vehicle production. Accordingly, the massive push to “transition” to EVs by companies such as Ford and GM have led to layoffs of unionized workers and lower hourly wages for new hires at battery manufacturing plants. All of this is happening while automakers are enjoying a windfall of profits thanks not only to their lucrative gas engine vehicle divisions, but also to EV tax credits and infusions of taxpayer dollars to stimulate the “transition” away from gas-powered vehicles and into EVs.
The UAW, representing around 150,000 workers, is simultaneously striking the Big Three Detroit automakers in a move that is as much a protest against government collusion with automakers over the “transition” to EVs as it is the general policies of GM, Ford and Stellantis.
This is what’s really at stake: The auto industry "transition” to EVs is a dead-end street for U.S. automakers not named Tesla, and the UAW knows it. The EV movement is a suicide pact between the auto industry and the U.S. government, one that is shedding thousands of jobs, burning billions of profit dollars, and producing tens of thousands of vehicles that have no market demand. The UAW clearly sees the future – fewer workers, lower wages, reduced benefits, and less political influence – as auto executives basically tell the unions to pound sand while relishing their bought-and-paid-for collusion with the government.
“When I’m bought off, I stay bought” – Ford CEO Jim Farley
The union pointed out the issue of executive pay, which I originally thought was just another envy jab intended to demonize management. But looking at the example of Ford CEO Jim Farley, who is aggressively destroying the company that others before him built and grabbing as much for himself while he still can, you learn that he received nearly $21 million in total compensation in 2022. That figure is a 93 percent increase from 2020 when he became CEO. With that amount of increase in only two years, you’d think Farley was performing at an exceptional level.
Yet, Ford’s EV sector is losing billions of dollars and laying off thousands of workers under his watch, so what is being rewarded here? I’ll answer that question at the end of this essay.
Tesla wins without even showing up
Regardless of the outcome of the strike, Tesla looks to be the winner of the battle due to the fact that the company has a twenty-year head start on the Big Three legacy automakers in building EVs and has much lower labor costs due to being non-unionized as well has having developed efficiencies and scale the Big Three have yet to achieve. After two decades in business, Tesla has posted profitably on its EV sector while Ford is losing nearly $60,000 per EV it produces and has forecasted a $4.5 billion yearly loss for its EV sector in the 2023 fiscal year. The UAW strike and the union’s bold financial demands, wherever they land, will only exacerbate the labor cost gap, making the Big Three even less price competitive with industry leading Tesla and will result in significantly more revenue losses.
The “transition” to EVs has created an historic upheaval in the auto industry, one that impacts the design, production, and selling of vehicles that cannot be built profitably, cannot be supported by charging infrastructure, and cannot be affordably purchased by a majority of customers including the UAW workers building them. This is a critical period for the auto industry and the U.S. economy at large, with trillions of dollars and an incalculable amount of jobs at stake.
The future will be electric…and unemployed
Boiling it all down, it is clear that the auto workers’ future depends on the survival of gasoline fueled vehicles powered by internal combustion engines. There is no future for these workers in the world of EVs that the Big Three auto executives are taking them.
So, is this a battle between the UAW and the Big Three auto executives a proxy war between those of us who want to keep our gas-powered vehicles and those who want a future with EVs only? It sure looks that way.
And nothing the UAW (or anyone else) can do will stop this movement. There is simply too much money to be made in the “transition” to EVs, as an entire global industry of EV suppliers, factories, charging networks, and maintenance groups are purchased into existence by trillions of dollars spent by governments around the world. It’s not that the world will be made better by such generosity – far from it. This massive spending will enrich a very small percentage of the already wealthy and will transfer the burden of this spending onto future generations of workers whether they have a job or not.
And that is the reward Ford CEO Jim Farley is receiving: His share of mammoth spending on the dead-end EV technology that will likely be banned anyway within this decade due to the hideous environmental damage caused by battery mineral mining.
All for the ultimate goal of taking away your car.