General Motors unveiled its all-new modular platform and battery system, Ultium, on March 4, 2020 at the Tech Center campus in Warren, Michigan.
Photo by Steve Fecht for General Motors
DETROIT – In already contentious labor talks between the United Auto Workers union and major automakers, a wildcard issue hangs over the discussions.
Multi-billion dollar EV battery plants – and their thousands of expected employees – are critical to the future of the auto industry and uniquely positioned to have far-reaching implications for the UAW, automakers and President Joe Biden’s push for domestic production.
But there is a problem. They are not part of the negotiations.
Nearly all of the announced factories are separate joint ventures with their own operations, negotiations and contracts — contracts that do not fall under the umbrella of negotiated employment contracts General engines, Ford engine And Stellantis before a September 14 deadline. The car manufacturers claim that the joint venture plants are therefore not legally part of the discussion.
But UAW leadership has made it a priority to ensure a “just transition” to electric cars for autoworkers, including the battery factories. Current and former union leaders told CNBC that the battery factories must be a priority for labor organization, whether or not directly discussed in the national agreement, for the union’s long-term viability.
“It’s a shell game,” UAW president Shawn Fain said of the battery facilities last week. “Ultimately, they can form joint ventures and still have an obligation to their members, their employees, and they chose not to for one reason, because they want to race to the bottom.”
UAW President Shawn Fain (right) speaks with union member Jerome Buckley outside General Motors’ Factory Zero plant on July 12, 2023 in Detroit.
Michael Wayland/CNBC
According to current and former negotiators from both sides of the table, both sides could use the battery factories as indirect leverage in the negotiations.
The idea would be to bake future protections (or restrictions) for EV workers into the employment contracts that cover traditional car workers, which could then serve as a model for future negotiations with EV workers, those experts say.
GM Ultium Employees
GM is the only Detroit automaker with a battery joint venture operating and unionized. It is the first in the country to deal with this specific negotiation dynamic and a pioneering factory that sets standards for the industry.
However, they believe workers in the factories should be paid less than traditional assembly jobs because it’s different work – making parts for the overall vehicle rather than assembling the final products – traditionally done by third-party suppliers, who typically earn less than workers employed directly by the automakers.
At GM’s Ultium battery plant in Ohio, employees earn between $16 and $22 an hour with all benefits, incentives and tuition.
That’s equivalent to suppliers and “subsystem” work currently done by UAW members at the major automakers, but below the wages of traditional auto workers who assemble vehicles and engines, earning anywhere from $18 an hour to more than $32 an hour.
General Motors CEO Mary Barra speaks at the General Motors Factory ZERO electric vehicle assembly plant in Detroit, Michigan on November 17, 2021.
Nic Antaya | Getty Images
In particular, Fain has criticized the automakers and the Biden administration for using billions in federal tax dollars to subsidize the facilities without committing to better wages and benefits for employees.
“The message to the Biden administration was simply that if we are going to do things for these companies to help this transition, labor cannot be left out,” Fain said outside a Stellantis factory last week.
Fain withholds re-election from President Joe Biden until union concerns about the auto industry’s transition to all-electric vehicles are addressed.
The Detroit automakers have announced investments of about $22 billion in eight U.S. battery plants, including a $3.5 billion plant in Michigan that will become a wholly owned subsidiary of Ford rather than a joint venture.
All plants are planned to become operational within the next four years.
Setting a standard
The UAW released a white paper last week detailing some reported safety issues and concerns at the Ultium plant. That report was released two days before the official start of national contract negotiations between the union and automakers in Detroit.
In its white paper, the union suggested that the national GM agreement could provide a solution to solving the site’s problems, calling an upcoming UAW-GM national labor agreement a “highly successful model for safeguarding safety that could be applied at Ultium Cells Lordstown and other battery cell manufacturers.”
UAW Local 5960 member Kinethia Black fills the brakes of a 2022 Chevrolet Bolt EUV during vehicle production on Thursday, May 6, 2021 at the General Motors Orion Assembly Plant in Orion Township, Michigan.
Photo by Steve Fecht for Chevrolet
The union could argue for an agreement with multiple companies or make a new national pact with the companies and then negotiate with Ultium to make a deal for the final agreement.
While the union wants the top pay battery jobs, it could also model a subsystem work contract. GM’s subsystem workers currently start at $18.50 per hour and can reach $22 or $24 per hour, depending on the job.
However, Ultium and the UAW are still “far apart” over a pay and benefits deal, according to two people familiar with the talks.
GM declined to comment on the white paper, referring questions to its Ultium Cells joint venture with LG Energy Solution.
A spokeswoman for Ultium condemned the UAW’s report and portrayal of the plant, calling the UAW’s characterization of the safety issues “knowingly false and misleading.”