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EV battery terminals make it a wildcard issue

EV battery terminals make it a wildcard issue
  • These multi-billion dollar electric vehicle battery plants are critical to the future of the automotive industry and are uniquely positioned to make wide-ranging impacts.
  • UAW leadership has indicated that it plans to consider the plants in national negotiations with General Motors, Ford Motor and Stellantis.
  • But the automakers stress that joint venture factories are not a legal part of the discussions.

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

Photo by Steve Ficht for General Motors

DETROIT — In the already contentious labor talks between the UAW and major automakers, a wild energy issue hangs over the discussions.

Electric vehicle battery plants with billions of dollars — and thousands of expected workers — are critical to the future of the auto industry and are uniquely positioned to have wide-reaching effects on the UAW, automakers, and President Joe Biden’s push toward homegrown manufacturing.

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

Nearly all of the announced plants are separate joint ventures with their own operations, negotiations and contracts — contracts that do not fall under the umbrella of labor agreements being negotiated with General Motors, Ford Motor and Stellantis ahead of the Sept. 14 deadline. The automakers stress that joint venture factories are not a legal part of the discussion.

But the UAW’s leadership has made it a priority to ensure a “fair transition” to electric vehicles for auto workers, including battery plants. Current and former union leaders told CNBC that battery plants must be a priority for the labor organization, regardless of whether they are directly discussed in the national agreement, for the union’s long-term viability.

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“It’s a shell game,” UAW President Sean Fine said last week regarding the battery facilities. “Ultimately, they can form joint ventures and still be obligated to their members, and to their workers, and they chose not to do that for one reason, because they want to drive the race to the bottom.”

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

Michael Weiland/CNBC

Either side could use the battery plants as indirect leverage in negotiations, according to current and former negotiators from both sides of the table.

These experts say the idea would be to put future protections (or restrictions) for electric vehicle workers into labor agreements covering traditional auto workers that could serve as a model for future electric vehicle worker negotiations.

General Motors is the only Detroit automaker with a joint venture battery plant in operation and unionized — making it the first in the nation to experience this particular negotiating dynamic and a preeminent standard-setting plant for the industry.

General Motors CEO Mary Barra and other executives said it is up to members to decide whether or not to consolidate battery plants as these types of jobs increasingly replace traditional assembly jobs.

However, they argue that workers in factories should be paid less than traditional assembly jobs because it is different work – creating parts for the vehicle as a whole rather than assembling finished products – that is traditionally done by third-party suppliers, who typically earn less than workers employed directly by automakers.

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At General Motors’ Ultium battery plant in Ohio, workers earn between $16 and $22 an hour with full benefits, incentives, and tuition assistance.

This is in keeping with the suppliers and “subsystem” work currently performed by UAW members at major automakers but is lower than the wages of traditional auto workers who assemble vehicles and engines and earn anywhere from $18 an hour to upwards of $32 an hour.

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

Nick Antaya | Getty Images

Fain notably criticized automakers as well as the Biden administration for using billions in federal tax dollars to prop up facilities without committing to improving wages and benefits for workers.

“The message to the Biden administration was simply that if we are going to do things for these companies to help with this transition, labor cannot be left out of the equation,” Fine said outside the Stellants plant last week.

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

The Detroit automakers announced about $22 billion in investments in eight US 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 factories are scheduled to start operations within the next four years.

Last week, the UAW released a white paper detailing some of the safety issues and concerns that were reported at the Ultium plant. This report was released two days before the official start of national contract negotiations between the union and the Detroit automakers.

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

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

Photo by Steve Ficht for Chevrolet

The union can argue for a multi-company agreement or reach a new national agreement with the companies and then negotiate with Ultium to craft a deal out of the final agreement.

While the union wants the highest paying battery jobs, it can also model a decade of subsystem work as well. GM Subsystem employees currently start at $18.50 an hour and can go up to either $22 or $24 an hour, depending on the business.

However, Ultium and the UAW remain “apart” on a wage and benefits deal, according to two people familiar with the talks.

GM declined to comment on the white paper, referring the questions to Ultium Cells’ joint venture with LG Energy Solution.

An Ultium spokeswoman condemned the report and UAW’s portrayal of the plant, calling UAW’s characterization of safety concerns “knowingly false and misleading.”