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UAW workers and their kids picket outside Ford's assembly plant in Wayne, Michigan in September of 2023.
Key demands by the UAW and their allies across civil society can promote both climate protection and a decent future for autoworkers.
Organized labor and the climate movement—often portrayed as opponents—have made an auspicious start toward cooperation in the autoworkers strike. The UAW, eschewing Trumpian blandishments to attack the transition to electrical vehicles (EVs), have instead endorsed the transition to climate-safe cars and trucks.
One hundred climate organizations, rejecting the blandishments of auto industry allies that low wages in the non-union South will make EVs cheaper and therefore help fight global warming, have instead signed a letter of solidarity with UAW workers and are organizing to support union picket lines. The purpose of this Commentary is to explain the context of this convergence and to indicate the elements of a “just transition” for the auto industry that can provide a joint program for the labor and climate movements.
An investigative report by E&E News in 2020 found that company scientists warned executives at General Motors and Ford in the 1960s that carbon emissions from their cars and trucks would cause the earth’s climate to warm. In response to this threat, the auto companies secretly gave hundreds of thousands of dollars to organizations denying the reality of global warming. Along with the oil industry and the US National Association of Manufacturers they formed the Global Climate Coalition to oppose any mandatory actions to address global warming; it spent tens of millions of dollars on advertising against international climate agreements and national climate legislation. The auto companies expanded their investments in high-emission trucks and SUVs. They opposed higher standards for fuel economy and carbon emissions. Until 1996 the Big Three did not produce a single commercial electric vehicle – allowing Tesla to corner the market with its EVs. Today emissions from the tailpipes of cars and trucks are the largest source of greenhouse gas pollution in the United States.
In 2008, rising gas prices and the Great Recession devasted the Big Three’s carefully cultivated market for gas guzzlers. GM and Chrysler went into bankruptcy and an $81 billion bailout left the US government as majority owner of GM and the UAW and Fiat as the principal owners of Chrysler.
The US auto industry was reconstructed under President Barak Obama’s economic recovery plan. Auto corporations and the UAW agreed to a large, long-term increase in energy efficiency to cut carbon emissions. The auto corporations agreed to cooperate with emission reduction requirements because their survival depended on the plan’s massive public investment in the auto industry. This involved cooperative planning for retooling the industry, large-scale federal support for developing new technology, and substantial public investment in modernizing the industry on a low-carbon basis. The result was a steady decrease in carbon pollution rates, an increase of jobs for auto workers, and an end to the crisis that threated to nearly eliminate auto production – and an estimated three million jobs — in the United States.
Faced with the collapse of the auto industry and the loss of millions of jobs, the UAW had little choice but to agree to major concessions. Its contracts incorporated a two-tiered wage structure under which those hired through 2007 are now making an average of $33 per hour while those hired after 2007 now make $17 per hour or less. Lower-tier employees receive lower health benefits and don’t get defined benefit pensions or retiree health care. Auto workers lost the cost-of-living adjustment (COLA) that gave them protection against inflation. Nonetheless they went for years without wage increases. They also lost the “job banks” jobs security program that provided laid-off workers pay and benefits if employment dipped below a pre-defined level.
While the concessions were presented as a temporary measure to address the crisis in the auto industry, they were not reversed in subsequent contracts, and the degradation of auto work has continued to the present day. Meanwhile, the auto companies have continued to oppose climate protection policies and to promote high-pollution, low-mileage trucks and SUVs. Indeed, as recently as July 2023 the auto industry’s largest lobbying organization came out against the Biden administration’s proposed rule to ensure that two-thirds of new passenger cars sold in the United States are all-electric by 2032.
Joe Biden’s presidential campaign created a committee stocked with Green New Deal advocates like Ocasio-Cortez and Bernie Sanders. He made their recommendations the centerpiece of his campaign policy. Biden’s Build Back Better plan combined ideas from the Green New Deal with proposals for “industrial policy” – government efforts to shape the economy by supporting specific industries, firms, or economic activities — long advocated by industrial unions and some progressive politicians. Many of these ideas were incorporated into Biden’s three major economic bills, the American Rescue Plan, Bipartisan Infrastructure, and Inflation Reduction Acts, which provide trillions of dollars over the next decade to incentivize domestic production in targeted industries, notably the auto industry. Unlike the government-led reconstruction of the auto industry under Obama, however, today’s federal program is largely limited to providing subsidies to auto companies to expand EV production, rather than actively reshaping the industry. When the House passed its version of the Inflation Reduction Act in 2021, it included another $4,500 tax credit to consumers for EVs built largely with union labor, but Democratic Senator Joe Manchin of West Virginia succeeded in removing the provision as a condition for allowing the IRA to pass the Senate.
The auto companies have been happy to accept these federal subsidies, but they are also happy to evade their stated purposes. Auto companies have given surface compliance to federal pressure to reduce carbon pollution, but in reality they continue to promote highly profitable but high-carbon SUVs and light trucks and drag their feet on shifting to EVs. And they are using the federal subsidies to move their operations to low-wage, non-union locations in the South and to use joint ventures with foreign auto companies to evade unionization.
Since the early 1990s the South’s share of auto industry employment has grown from 15 to 30 per cent while the Midwest’s proportion has fallen from 60% to 45%. The auto companies are now using the subsidies provided by Biden’s industrial policy to accelerate this migration. In the past two years the big auto companies have announced nearly $90 billion in investment for EV plants, according to the Center for Automotive Research. Their suppliers are investing billions more. Brookings Metro says total private-sector investment in EV manufacturing under Biden has reached nearly $140 billion.
Brookings Metro calculated that the South has attracted 55 percent of the total private investment in electric vehicles and batteries under Biden, twice as much as has gone to the Midwest. Such EV and battery plant investments include Hyundai and Rivian in Georgia, Toyota in North Carolina, Tesla in Texas, BMW in South Carolina, Mercedes-Benz in Alabama, General Motors in Tennessee, and Ford in Tennessee and Kentucky. EV investments in the South are expected to create at least 65,000 jobs.
To further bolster their resistance to worker demands, auto companies are creating their EV battery plants as joint ventures with foreign companies. As such they are not subject to the master agreements that cover the Big Three, so that the UAW must negotiate separate contracts for plants that are already offering wages far below the master agreements.
This “restructuring” seemed to be just fine with the Biden administration. In early June Energy Secretary Jennifer Grandholm told an industry group that the administration was “agnostic” about where companies choose to site their clean-energy investments. Later that same month the Department of Energy approved more than $9 billion in loans to Ford and a Korean company to build EV battery plants in Kentucky and Tennessee. This subsidy gave no consideration to wages, working conditions, union rights, or retirement security. The next day UAW president Shawn Fain issued a statement that read in part:
The switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom. Not only is the federal government not using its power to turn the tide – they’re actively funding the race to the bottom with billions in public money. Why is Joe Biden’s administration facilitating this corporate greed with taxpayer money?
In the past five years, workers who build GM products in Lordstown Ohio, have had their lives turned upside down as they were forced to retire, quit or uproot their families and move all over the United States when GM closed their plants despite massive profits. Their jobs were replaced in GM’s new joint-venture battery facility with jobs that pay half of what workers made at the previous Lordstown plant.
Not only is the White House refusing to right this wrong, they’re giving Ford $9.2 billion to create the same low-road jobs in Kentucky and Tennessee.
The last time the federal government gave the Big Three billions of dollars, the companies did the exact same thing: slash wages, cut jobs, and undermine the industry that for generations created the best jobs for working families in this country. Autoworkers and our families took the hit in 2009 in the name of saving the industry. We were never made whole, and it’s an absolute shame to see another Democratic administration doubling down on a taxpayer-funded corporate giveaway.
Faced with such a rebuff in the prelude to the impending auto strike, and perhaps counting the working class voters in a state critical for the 2024 presidential election, the Biden administration announced in late August that the Energy Department would provide $2 billion in grants and $10 billion in loan guarantees under the Inflation Reduction Act, plus $3.5 billion in grants under the infrastructure law, to help companies convert existing plants to making EVs and batteries. The once-“agnostic” Granholm proclaimed her new religion: “We are going to focus on financing projects that are in long-standing automaking communities, that keep folks already working on the payroll, projects that advance collective bargaining agreements, that create high-paying, long-lasting jobs.”
UAW president Fain praised the decision.
The UAW supports and is ready for the transition to a clean auto industry. But the EV transition must be a just transition that ensures auto workers have a place in the new economy. Today’s announcement from the Department of Energy echoes the UAW’s call for strong labor standards tied to all taxpayer funding that goes to auto and manufacturing companies. This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.
The Biden administration’s shift – at least momentarily – toward a just transition for auto workers facing the greening of their industry indicates both the political popularity of just transition and a balance of forces propitious for efforts to realize it. Given that context, what measures can labor and climate movements advocate to begin to realize a just transition for auto workers?
The UAW, more than a hundred climate and allied organizations, and President Joe Biden have all endorsed a “just transition” to electric vehicles for auto workers. But what would a just transition for auto workers actually mean? Here are some of the measures that workers, environmentalists, and governments could join together to promote.
In contrast to past negotiations with the Big Three, the current UAW leadership has presented its basic proposals both to auto workers and to the public. In addition to wage and other economic demands, there are three union proposals in particular that are necessary parts of a just transition.
When the UAW protested, the Biden administration changed course and issued a $15.5 billion package of grants and loans primarily focused on retooling existing factories for the transition to EVs. This package included conditions for grants and loans that, if applied across the board to all EV subsidies, would make a major contribution to a just transition for auto workers.
In the $2 billion Domestic Conversion Grant Program, higher scores will be given to “projects that are likely to retain collective bargaining agreements and/or those that have an existing high-quality, high-wage hourly production workforce, such as applicants that currently pay top quartile wages in their industry.” The program “aims to support a just transition for workers and communities in the transition to electrified transportation,” with particular attention to “communities supporting facilities with longer histories in automotive manufacturing.” Preference will be given to projects that “commit to pay high wages for production workers and maintain collective bargaining agreements.”
The Department of Energy’s recent $10 billion loan initiative under the Advanced Technology Vehicles Manufacturing Loan Program for automotive manufacturing conversion projects is targeted for automotive manufacturing conversion projects that “retain high-quality jobs in communities that currently host manufacturing facilities.” Examples of criteria include “retaining high wages and benefits, including workplace rights, or commitments such as keeping the existing facility open until a new facility is complete, in the case of facility replacement projects.”
These programs were welcomed by UAW president Shawn Fain. Their provisions will make it difficult for auto companies to take the money and use it to shut down existing union plants and open new nonunion plants in low-wage regions.
So far, these conditions apply only to a tiny sliver of the hundreds of billions of dollars that the federal government plans to give or induce others to invest in the transition to electric vehicles. They do not currently apply to other grants and loans. And they do not apply to the many times larger subsidies that will be given via tax credits. The Advance Manufacturing Tax Credit, for example, requires minimums for domestic content, payment of prevailing wages, and apprenticeship-based training. But it says nothing about location or workers’ right to union representation or collective bargaining.
A crucial strategy for a just transition for auto workers could be to include labor requirements in all EV subsidies similar to those in the recent package of grants and loans. Their inclusion in already established programs makes a strong case that they are legal and proper policies.
These state programs might be most effective if they were coordinated among the states of the Midwest auto region.
These just transition proposals are not “pie in the sky.” They grow out of existing programs and proposals of the UAW, the climate movement, federal agencies, and state legislators. As President Biden’s unprecedented decision to join the UAW picket line indicates, they come at a time when the government and the auto companies are most vulnerable to pressure to do the right thing. They will not in themselves turn the auto plants into a utopia. But they can play a significant role in halting and even reversing the race to the bottom that is already underway in the auto industry. They can promote both climate protection and a decent future for auto workers. And they can provide a program around which auto workers, climate protectors, and advocates for the public interest can join forces.
Read the original version of this post, along with footnotes, at the Labor Network for Sustainability website here.
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Organized labor and the climate movement—often portrayed as opponents—have made an auspicious start toward cooperation in the autoworkers strike. The UAW, eschewing Trumpian blandishments to attack the transition to electrical vehicles (EVs), have instead endorsed the transition to climate-safe cars and trucks.
One hundred climate organizations, rejecting the blandishments of auto industry allies that low wages in the non-union South will make EVs cheaper and therefore help fight global warming, have instead signed a letter of solidarity with UAW workers and are organizing to support union picket lines. The purpose of this Commentary is to explain the context of this convergence and to indicate the elements of a “just transition” for the auto industry that can provide a joint program for the labor and climate movements.
An investigative report by E&E News in 2020 found that company scientists warned executives at General Motors and Ford in the 1960s that carbon emissions from their cars and trucks would cause the earth’s climate to warm. In response to this threat, the auto companies secretly gave hundreds of thousands of dollars to organizations denying the reality of global warming. Along with the oil industry and the US National Association of Manufacturers they formed the Global Climate Coalition to oppose any mandatory actions to address global warming; it spent tens of millions of dollars on advertising against international climate agreements and national climate legislation. The auto companies expanded their investments in high-emission trucks and SUVs. They opposed higher standards for fuel economy and carbon emissions. Until 1996 the Big Three did not produce a single commercial electric vehicle – allowing Tesla to corner the market with its EVs. Today emissions from the tailpipes of cars and trucks are the largest source of greenhouse gas pollution in the United States.
In 2008, rising gas prices and the Great Recession devasted the Big Three’s carefully cultivated market for gas guzzlers. GM and Chrysler went into bankruptcy and an $81 billion bailout left the US government as majority owner of GM and the UAW and Fiat as the principal owners of Chrysler.
The US auto industry was reconstructed under President Barak Obama’s economic recovery plan. Auto corporations and the UAW agreed to a large, long-term increase in energy efficiency to cut carbon emissions. The auto corporations agreed to cooperate with emission reduction requirements because their survival depended on the plan’s massive public investment in the auto industry. This involved cooperative planning for retooling the industry, large-scale federal support for developing new technology, and substantial public investment in modernizing the industry on a low-carbon basis. The result was a steady decrease in carbon pollution rates, an increase of jobs for auto workers, and an end to the crisis that threated to nearly eliminate auto production – and an estimated three million jobs — in the United States.
Faced with the collapse of the auto industry and the loss of millions of jobs, the UAW had little choice but to agree to major concessions. Its contracts incorporated a two-tiered wage structure under which those hired through 2007 are now making an average of $33 per hour while those hired after 2007 now make $17 per hour or less. Lower-tier employees receive lower health benefits and don’t get defined benefit pensions or retiree health care. Auto workers lost the cost-of-living adjustment (COLA) that gave them protection against inflation. Nonetheless they went for years without wage increases. They also lost the “job banks” jobs security program that provided laid-off workers pay and benefits if employment dipped below a pre-defined level.
While the concessions were presented as a temporary measure to address the crisis in the auto industry, they were not reversed in subsequent contracts, and the degradation of auto work has continued to the present day. Meanwhile, the auto companies have continued to oppose climate protection policies and to promote high-pollution, low-mileage trucks and SUVs. Indeed, as recently as July 2023 the auto industry’s largest lobbying organization came out against the Biden administration’s proposed rule to ensure that two-thirds of new passenger cars sold in the United States are all-electric by 2032.
Joe Biden’s presidential campaign created a committee stocked with Green New Deal advocates like Ocasio-Cortez and Bernie Sanders. He made their recommendations the centerpiece of his campaign policy. Biden’s Build Back Better plan combined ideas from the Green New Deal with proposals for “industrial policy” – government efforts to shape the economy by supporting specific industries, firms, or economic activities — long advocated by industrial unions and some progressive politicians. Many of these ideas were incorporated into Biden’s three major economic bills, the American Rescue Plan, Bipartisan Infrastructure, and Inflation Reduction Acts, which provide trillions of dollars over the next decade to incentivize domestic production in targeted industries, notably the auto industry. Unlike the government-led reconstruction of the auto industry under Obama, however, today’s federal program is largely limited to providing subsidies to auto companies to expand EV production, rather than actively reshaping the industry. When the House passed its version of the Inflation Reduction Act in 2021, it included another $4,500 tax credit to consumers for EVs built largely with union labor, but Democratic Senator Joe Manchin of West Virginia succeeded in removing the provision as a condition for allowing the IRA to pass the Senate.
The auto companies have been happy to accept these federal subsidies, but they are also happy to evade their stated purposes. Auto companies have given surface compliance to federal pressure to reduce carbon pollution, but in reality they continue to promote highly profitable but high-carbon SUVs and light trucks and drag their feet on shifting to EVs. And they are using the federal subsidies to move their operations to low-wage, non-union locations in the South and to use joint ventures with foreign auto companies to evade unionization.
Since the early 1990s the South’s share of auto industry employment has grown from 15 to 30 per cent while the Midwest’s proportion has fallen from 60% to 45%. The auto companies are now using the subsidies provided by Biden’s industrial policy to accelerate this migration. In the past two years the big auto companies have announced nearly $90 billion in investment for EV plants, according to the Center for Automotive Research. Their suppliers are investing billions more. Brookings Metro says total private-sector investment in EV manufacturing under Biden has reached nearly $140 billion.
Brookings Metro calculated that the South has attracted 55 percent of the total private investment in electric vehicles and batteries under Biden, twice as much as has gone to the Midwest. Such EV and battery plant investments include Hyundai and Rivian in Georgia, Toyota in North Carolina, Tesla in Texas, BMW in South Carolina, Mercedes-Benz in Alabama, General Motors in Tennessee, and Ford in Tennessee and Kentucky. EV investments in the South are expected to create at least 65,000 jobs.
To further bolster their resistance to worker demands, auto companies are creating their EV battery plants as joint ventures with foreign companies. As such they are not subject to the master agreements that cover the Big Three, so that the UAW must negotiate separate contracts for plants that are already offering wages far below the master agreements.
This “restructuring” seemed to be just fine with the Biden administration. In early June Energy Secretary Jennifer Grandholm told an industry group that the administration was “agnostic” about where companies choose to site their clean-energy investments. Later that same month the Department of Energy approved more than $9 billion in loans to Ford and a Korean company to build EV battery plants in Kentucky and Tennessee. This subsidy gave no consideration to wages, working conditions, union rights, or retirement security. The next day UAW president Shawn Fain issued a statement that read in part:
The switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom. Not only is the federal government not using its power to turn the tide – they’re actively funding the race to the bottom with billions in public money. Why is Joe Biden’s administration facilitating this corporate greed with taxpayer money?
In the past five years, workers who build GM products in Lordstown Ohio, have had their lives turned upside down as they were forced to retire, quit or uproot their families and move all over the United States when GM closed their plants despite massive profits. Their jobs were replaced in GM’s new joint-venture battery facility with jobs that pay half of what workers made at the previous Lordstown plant.
Not only is the White House refusing to right this wrong, they’re giving Ford $9.2 billion to create the same low-road jobs in Kentucky and Tennessee.
The last time the federal government gave the Big Three billions of dollars, the companies did the exact same thing: slash wages, cut jobs, and undermine the industry that for generations created the best jobs for working families in this country. Autoworkers and our families took the hit in 2009 in the name of saving the industry. We were never made whole, and it’s an absolute shame to see another Democratic administration doubling down on a taxpayer-funded corporate giveaway.
Faced with such a rebuff in the prelude to the impending auto strike, and perhaps counting the working class voters in a state critical for the 2024 presidential election, the Biden administration announced in late August that the Energy Department would provide $2 billion in grants and $10 billion in loan guarantees under the Inflation Reduction Act, plus $3.5 billion in grants under the infrastructure law, to help companies convert existing plants to making EVs and batteries. The once-“agnostic” Granholm proclaimed her new religion: “We are going to focus on financing projects that are in long-standing automaking communities, that keep folks already working on the payroll, projects that advance collective bargaining agreements, that create high-paying, long-lasting jobs.”
UAW president Fain praised the decision.
The UAW supports and is ready for the transition to a clean auto industry. But the EV transition must be a just transition that ensures auto workers have a place in the new economy. Today’s announcement from the Department of Energy echoes the UAW’s call for strong labor standards tied to all taxpayer funding that goes to auto and manufacturing companies. This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.
The Biden administration’s shift – at least momentarily – toward a just transition for auto workers facing the greening of their industry indicates both the political popularity of just transition and a balance of forces propitious for efforts to realize it. Given that context, what measures can labor and climate movements advocate to begin to realize a just transition for auto workers?
The UAW, more than a hundred climate and allied organizations, and President Joe Biden have all endorsed a “just transition” to electric vehicles for auto workers. But what would a just transition for auto workers actually mean? Here are some of the measures that workers, environmentalists, and governments could join together to promote.
In contrast to past negotiations with the Big Three, the current UAW leadership has presented its basic proposals both to auto workers and to the public. In addition to wage and other economic demands, there are three union proposals in particular that are necessary parts of a just transition.
When the UAW protested, the Biden administration changed course and issued a $15.5 billion package of grants and loans primarily focused on retooling existing factories for the transition to EVs. This package included conditions for grants and loans that, if applied across the board to all EV subsidies, would make a major contribution to a just transition for auto workers.
In the $2 billion Domestic Conversion Grant Program, higher scores will be given to “projects that are likely to retain collective bargaining agreements and/or those that have an existing high-quality, high-wage hourly production workforce, such as applicants that currently pay top quartile wages in their industry.” The program “aims to support a just transition for workers and communities in the transition to electrified transportation,” with particular attention to “communities supporting facilities with longer histories in automotive manufacturing.” Preference will be given to projects that “commit to pay high wages for production workers and maintain collective bargaining agreements.”
The Department of Energy’s recent $10 billion loan initiative under the Advanced Technology Vehicles Manufacturing Loan Program for automotive manufacturing conversion projects is targeted for automotive manufacturing conversion projects that “retain high-quality jobs in communities that currently host manufacturing facilities.” Examples of criteria include “retaining high wages and benefits, including workplace rights, or commitments such as keeping the existing facility open until a new facility is complete, in the case of facility replacement projects.”
These programs were welcomed by UAW president Shawn Fain. Their provisions will make it difficult for auto companies to take the money and use it to shut down existing union plants and open new nonunion plants in low-wage regions.
So far, these conditions apply only to a tiny sliver of the hundreds of billions of dollars that the federal government plans to give or induce others to invest in the transition to electric vehicles. They do not currently apply to other grants and loans. And they do not apply to the many times larger subsidies that will be given via tax credits. The Advance Manufacturing Tax Credit, for example, requires minimums for domestic content, payment of prevailing wages, and apprenticeship-based training. But it says nothing about location or workers’ right to union representation or collective bargaining.
A crucial strategy for a just transition for auto workers could be to include labor requirements in all EV subsidies similar to those in the recent package of grants and loans. Their inclusion in already established programs makes a strong case that they are legal and proper policies.
These state programs might be most effective if they were coordinated among the states of the Midwest auto region.
These just transition proposals are not “pie in the sky.” They grow out of existing programs and proposals of the UAW, the climate movement, federal agencies, and state legislators. As President Biden’s unprecedented decision to join the UAW picket line indicates, they come at a time when the government and the auto companies are most vulnerable to pressure to do the right thing. They will not in themselves turn the auto plants into a utopia. But they can play a significant role in halting and even reversing the race to the bottom that is already underway in the auto industry. They can promote both climate protection and a decent future for auto workers. And they can provide a program around which auto workers, climate protectors, and advocates for the public interest can join forces.
Read the original version of this post, along with footnotes, at the Labor Network for Sustainability website here.
Organized labor and the climate movement—often portrayed as opponents—have made an auspicious start toward cooperation in the autoworkers strike. The UAW, eschewing Trumpian blandishments to attack the transition to electrical vehicles (EVs), have instead endorsed the transition to climate-safe cars and trucks.
One hundred climate organizations, rejecting the blandishments of auto industry allies that low wages in the non-union South will make EVs cheaper and therefore help fight global warming, have instead signed a letter of solidarity with UAW workers and are organizing to support union picket lines. The purpose of this Commentary is to explain the context of this convergence and to indicate the elements of a “just transition” for the auto industry that can provide a joint program for the labor and climate movements.
An investigative report by E&E News in 2020 found that company scientists warned executives at General Motors and Ford in the 1960s that carbon emissions from their cars and trucks would cause the earth’s climate to warm. In response to this threat, the auto companies secretly gave hundreds of thousands of dollars to organizations denying the reality of global warming. Along with the oil industry and the US National Association of Manufacturers they formed the Global Climate Coalition to oppose any mandatory actions to address global warming; it spent tens of millions of dollars on advertising against international climate agreements and national climate legislation. The auto companies expanded their investments in high-emission trucks and SUVs. They opposed higher standards for fuel economy and carbon emissions. Until 1996 the Big Three did not produce a single commercial electric vehicle – allowing Tesla to corner the market with its EVs. Today emissions from the tailpipes of cars and trucks are the largest source of greenhouse gas pollution in the United States.
In 2008, rising gas prices and the Great Recession devasted the Big Three’s carefully cultivated market for gas guzzlers. GM and Chrysler went into bankruptcy and an $81 billion bailout left the US government as majority owner of GM and the UAW and Fiat as the principal owners of Chrysler.
The US auto industry was reconstructed under President Barak Obama’s economic recovery plan. Auto corporations and the UAW agreed to a large, long-term increase in energy efficiency to cut carbon emissions. The auto corporations agreed to cooperate with emission reduction requirements because their survival depended on the plan’s massive public investment in the auto industry. This involved cooperative planning for retooling the industry, large-scale federal support for developing new technology, and substantial public investment in modernizing the industry on a low-carbon basis. The result was a steady decrease in carbon pollution rates, an increase of jobs for auto workers, and an end to the crisis that threated to nearly eliminate auto production – and an estimated three million jobs — in the United States.
Faced with the collapse of the auto industry and the loss of millions of jobs, the UAW had little choice but to agree to major concessions. Its contracts incorporated a two-tiered wage structure under which those hired through 2007 are now making an average of $33 per hour while those hired after 2007 now make $17 per hour or less. Lower-tier employees receive lower health benefits and don’t get defined benefit pensions or retiree health care. Auto workers lost the cost-of-living adjustment (COLA) that gave them protection against inflation. Nonetheless they went for years without wage increases. They also lost the “job banks” jobs security program that provided laid-off workers pay and benefits if employment dipped below a pre-defined level.
While the concessions were presented as a temporary measure to address the crisis in the auto industry, they were not reversed in subsequent contracts, and the degradation of auto work has continued to the present day. Meanwhile, the auto companies have continued to oppose climate protection policies and to promote high-pollution, low-mileage trucks and SUVs. Indeed, as recently as July 2023 the auto industry’s largest lobbying organization came out against the Biden administration’s proposed rule to ensure that two-thirds of new passenger cars sold in the United States are all-electric by 2032.
Joe Biden’s presidential campaign created a committee stocked with Green New Deal advocates like Ocasio-Cortez and Bernie Sanders. He made their recommendations the centerpiece of his campaign policy. Biden’s Build Back Better plan combined ideas from the Green New Deal with proposals for “industrial policy” – government efforts to shape the economy by supporting specific industries, firms, or economic activities — long advocated by industrial unions and some progressive politicians. Many of these ideas were incorporated into Biden’s three major economic bills, the American Rescue Plan, Bipartisan Infrastructure, and Inflation Reduction Acts, which provide trillions of dollars over the next decade to incentivize domestic production in targeted industries, notably the auto industry. Unlike the government-led reconstruction of the auto industry under Obama, however, today’s federal program is largely limited to providing subsidies to auto companies to expand EV production, rather than actively reshaping the industry. When the House passed its version of the Inflation Reduction Act in 2021, it included another $4,500 tax credit to consumers for EVs built largely with union labor, but Democratic Senator Joe Manchin of West Virginia succeeded in removing the provision as a condition for allowing the IRA to pass the Senate.
The auto companies have been happy to accept these federal subsidies, but they are also happy to evade their stated purposes. Auto companies have given surface compliance to federal pressure to reduce carbon pollution, but in reality they continue to promote highly profitable but high-carbon SUVs and light trucks and drag their feet on shifting to EVs. And they are using the federal subsidies to move their operations to low-wage, non-union locations in the South and to use joint ventures with foreign auto companies to evade unionization.
Since the early 1990s the South’s share of auto industry employment has grown from 15 to 30 per cent while the Midwest’s proportion has fallen from 60% to 45%. The auto companies are now using the subsidies provided by Biden’s industrial policy to accelerate this migration. In the past two years the big auto companies have announced nearly $90 billion in investment for EV plants, according to the Center for Automotive Research. Their suppliers are investing billions more. Brookings Metro says total private-sector investment in EV manufacturing under Biden has reached nearly $140 billion.
Brookings Metro calculated that the South has attracted 55 percent of the total private investment in electric vehicles and batteries under Biden, twice as much as has gone to the Midwest. Such EV and battery plant investments include Hyundai and Rivian in Georgia, Toyota in North Carolina, Tesla in Texas, BMW in South Carolina, Mercedes-Benz in Alabama, General Motors in Tennessee, and Ford in Tennessee and Kentucky. EV investments in the South are expected to create at least 65,000 jobs.
To further bolster their resistance to worker demands, auto companies are creating their EV battery plants as joint ventures with foreign companies. As such they are not subject to the master agreements that cover the Big Three, so that the UAW must negotiate separate contracts for plants that are already offering wages far below the master agreements.
This “restructuring” seemed to be just fine with the Biden administration. In early June Energy Secretary Jennifer Grandholm told an industry group that the administration was “agnostic” about where companies choose to site their clean-energy investments. Later that same month the Department of Energy approved more than $9 billion in loans to Ford and a Korean company to build EV battery plants in Kentucky and Tennessee. This subsidy gave no consideration to wages, working conditions, union rights, or retirement security. The next day UAW president Shawn Fain issued a statement that read in part:
The switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom. Not only is the federal government not using its power to turn the tide – they’re actively funding the race to the bottom with billions in public money. Why is Joe Biden’s administration facilitating this corporate greed with taxpayer money?
In the past five years, workers who build GM products in Lordstown Ohio, have had their lives turned upside down as they were forced to retire, quit or uproot their families and move all over the United States when GM closed their plants despite massive profits. Their jobs were replaced in GM’s new joint-venture battery facility with jobs that pay half of what workers made at the previous Lordstown plant.
Not only is the White House refusing to right this wrong, they’re giving Ford $9.2 billion to create the same low-road jobs in Kentucky and Tennessee.
The last time the federal government gave the Big Three billions of dollars, the companies did the exact same thing: slash wages, cut jobs, and undermine the industry that for generations created the best jobs for working families in this country. Autoworkers and our families took the hit in 2009 in the name of saving the industry. We were never made whole, and it’s an absolute shame to see another Democratic administration doubling down on a taxpayer-funded corporate giveaway.
Faced with such a rebuff in the prelude to the impending auto strike, and perhaps counting the working class voters in a state critical for the 2024 presidential election, the Biden administration announced in late August that the Energy Department would provide $2 billion in grants and $10 billion in loan guarantees under the Inflation Reduction Act, plus $3.5 billion in grants under the infrastructure law, to help companies convert existing plants to making EVs and batteries. The once-“agnostic” Granholm proclaimed her new religion: “We are going to focus on financing projects that are in long-standing automaking communities, that keep folks already working on the payroll, projects that advance collective bargaining agreements, that create high-paying, long-lasting jobs.”
UAW president Fain praised the decision.
The UAW supports and is ready for the transition to a clean auto industry. But the EV transition must be a just transition that ensures auto workers have a place in the new economy. Today’s announcement from the Department of Energy echoes the UAW’s call for strong labor standards tied to all taxpayer funding that goes to auto and manufacturing companies. This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.
The Biden administration’s shift – at least momentarily – toward a just transition for auto workers facing the greening of their industry indicates both the political popularity of just transition and a balance of forces propitious for efforts to realize it. Given that context, what measures can labor and climate movements advocate to begin to realize a just transition for auto workers?
The UAW, more than a hundred climate and allied organizations, and President Joe Biden have all endorsed a “just transition” to electric vehicles for auto workers. But what would a just transition for auto workers actually mean? Here are some of the measures that workers, environmentalists, and governments could join together to promote.
In contrast to past negotiations with the Big Three, the current UAW leadership has presented its basic proposals both to auto workers and to the public. In addition to wage and other economic demands, there are three union proposals in particular that are necessary parts of a just transition.
When the UAW protested, the Biden administration changed course and issued a $15.5 billion package of grants and loans primarily focused on retooling existing factories for the transition to EVs. This package included conditions for grants and loans that, if applied across the board to all EV subsidies, would make a major contribution to a just transition for auto workers.
In the $2 billion Domestic Conversion Grant Program, higher scores will be given to “projects that are likely to retain collective bargaining agreements and/or those that have an existing high-quality, high-wage hourly production workforce, such as applicants that currently pay top quartile wages in their industry.” The program “aims to support a just transition for workers and communities in the transition to electrified transportation,” with particular attention to “communities supporting facilities with longer histories in automotive manufacturing.” Preference will be given to projects that “commit to pay high wages for production workers and maintain collective bargaining agreements.”
The Department of Energy’s recent $10 billion loan initiative under the Advanced Technology Vehicles Manufacturing Loan Program for automotive manufacturing conversion projects is targeted for automotive manufacturing conversion projects that “retain high-quality jobs in communities that currently host manufacturing facilities.” Examples of criteria include “retaining high wages and benefits, including workplace rights, or commitments such as keeping the existing facility open until a new facility is complete, in the case of facility replacement projects.”
These programs were welcomed by UAW president Shawn Fain. Their provisions will make it difficult for auto companies to take the money and use it to shut down existing union plants and open new nonunion plants in low-wage regions.
So far, these conditions apply only to a tiny sliver of the hundreds of billions of dollars that the federal government plans to give or induce others to invest in the transition to electric vehicles. They do not currently apply to other grants and loans. And they do not apply to the many times larger subsidies that will be given via tax credits. The Advance Manufacturing Tax Credit, for example, requires minimums for domestic content, payment of prevailing wages, and apprenticeship-based training. But it says nothing about location or workers’ right to union representation or collective bargaining.
A crucial strategy for a just transition for auto workers could be to include labor requirements in all EV subsidies similar to those in the recent package of grants and loans. Their inclusion in already established programs makes a strong case that they are legal and proper policies.
These state programs might be most effective if they were coordinated among the states of the Midwest auto region.
These just transition proposals are not “pie in the sky.” They grow out of existing programs and proposals of the UAW, the climate movement, federal agencies, and state legislators. As President Biden’s unprecedented decision to join the UAW picket line indicates, they come at a time when the government and the auto companies are most vulnerable to pressure to do the right thing. They will not in themselves turn the auto plants into a utopia. But they can play a significant role in halting and even reversing the race to the bottom that is already underway in the auto industry. They can promote both climate protection and a decent future for auto workers. And they can provide a program around which auto workers, climate protectors, and advocates for the public interest can join forces.
Read the original version of this post, along with footnotes, at the Labor Network for Sustainability website here.
