The push of GM electric cars could mean fewer jobs and lower paying jobs

DETROIT (AP) – If US consumers abandon electric vehicle fuel burners someday, the United Auto Workers union is in trouble.

Thousands of jobs in industrial Midwestern engine and transmission plants would be gone, replaced by smaller numbers in automated, mostly automated plants that mix chemicals to make batteries.

The union is fully aware of this possibility as it negotiates for both the future and the present in contract negotiations with General Motors. At the same time, more than 49,000 unionized workers are on strike against the company and have closed their factories for six days.

Mary Barra, CEO of GM, promised a "100% electric future". The company is undergoing a difficult restructuring to raise funds, particularly to develop 20 electric models that it expects to sell globally by 2023.

In contract negotiations, GM proposed to build an electric vehicle battery plant in Lordstown, Ohio, where the company is currently shutting down an assembly plant. The automaker, according to a person informed of the offer, wants the factory to be run by a joint venture or battery company. There would be a lot less union workers who would be paid less than the $ 30 an hour that UAW members earn on the assembly line, said the person, who did not want to be identified because the details of the contract were confidential.

For the union, it is crucial to get the best pay at Lordstown, as battery jobs could someday supplant many of GM's 10 powerplant plants, which now employ more than 10,500 workers per hour. The future of the union, which has lost high-paying jobs in the auto industry over the past 30 years, is also at stake, said Sam Abuelsamid, an analyst at Navigant Research, which tracks the auto industry.

"I can see why the UAW would reject such an agreement," Abuelsamid said. "Accepting a lower salary level for employees in Lordstown or any other factory where GM wants to do something similar, I think that would be silly for them."

For the company, however, the lowest wages are needed to keep costs competitive with other manufacturers who will outsource cell and battery manufacturing to non-union mills that pay less than UAW wages. said Abuelsamid. GM must also control its spending because it is trying to sell more electric vehicles, which are now more expensive than those running on gas, he said.

The company will not specify how many workers would be employed at the Lordstown Battery Plant or how much they would be paid. But the number will not be close to $ 30 an hour at the assembly plant, which used to employ 4,500 people two years ago making the Chevrolet Cruze compact car.

The only GM plant comparable to the one at Lordstown is now in Brownstown Township, Michigan. About 100 UAW workers took battery cells made by LG Chem in western Michigan and combined them into packs for the Chevrolet Volt rechargeable electric fuel car. The Volt was canceled last spring and there are now 22 workers left behind to manufacture hybrid batteries and assemble autonomous vehicles.

In 2009, the UAW is committed to reducing the salary of 15 to 17 dollars an hour in Brownstown to help start the Volt.

If there is potential for growth if sales of electric cars take off and more batteries are needed, no one knows when or if it will happen in the United States. Few predict that the "all – electric future" of Barra will be available soon and that the Trump administration has proposed rolling back the fuel economy requirements.

Fully electric vehicles currently account for about 1.5% of new vehicle sales in the United States and LMC Automotive expects only 7.5% growth by 2030. The forecasting company does not expect sales of electric vehicles will reach 50% of the market at least until 2049.

Overall, it's another story. Navigant expects growth from a little over one million sales last year to 6.5 million in 2025. This increase is expected due to government incentives and regulations in the US. fuel economy in China.

Right now, GM loses thousands of dollars on every Chevrolet Bolt electric car it sells, and has not been able to produce enough to cut costs. Without large-scale production, it is difficult to reduce prices. Full payment of union wages in Lordstown would increase costs.

"You can not have a cost disadvantage in a market that is in its infancy," said Jeff Schuster, executive vice president of LMC.

Even if the union manages to raise wages in battery factories, jobs in engines and transmissions will someday disappear, said Abuelsamid. He estimates that it will only take between 25% and 50% of the current workforce in engines and transmission to build battery cells, batteries and electric motors. GM and others could also continue to outsource battery cells and packs to factories other than union factories, as GM now does for Bolt.

It remains to be seen whether the union will take a position on electric vehicles during this round of contract negotiations. He may decide not to create a precedent for low wages that could extend to Fiat Chrysler or Ford. However, if he can preserve health insurance and obtain wage increases, job guarantees, greater profit-sharing and a means for temporary workers to move full-time, the problem may be in question, said Schuster.

"The ultimate path (towards electric vehicles), in our opinion, is so long on the road that I'm not sure it needs to be fixed now," he said. "I do not know if it must be the thing that blocks an agreement at this point."

Powertrain workers know their future is at stake, said Tim O'Hara, president of the UAW Local in Lordstown. He expects the union to try to protect as many high-paying jobs as possible.

"The electrical future has been of great concern to people," O'Hara said. "The goal is always to have the same kind of work with benefits and pay that the one with which one starts.