Biden calls for unionisation for all EV workers
Or how to take aim at Elon Musk without taking aim at Elon Musk
President Biden has vowed to take action to prevent Chinese domination of the global EV market achieved through “unfair trade practices”, ahead of an upcoming summit with Chinese Premier Xi Jinping. But he also has a level domestic playing field on his mind.
“China is determined to dominate the electric vehicle market by using unfair trade practices but I will not let them,” Biden told a group of Stellantis UAW workers at the conglomerate’s Belvidere, Illinois factory, which is set to be reopened as part of the union’s agreement with the automaker, with the addition of a unionised battery facility.
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This comes the day after the House Select Committee on the CCP called for a tariff rise on Chinese automotive imports and an investigation into so-called ‘back door’ routes into the US market.
Biden seized on the chance to argue that Stellantis’ commitment to a new battery facility at the Belvidere plant, as well as GM saying it will unionise its battery production, shows enthusiasm amongst auto workers for the EV transition.
“I strongly believe that, when a company transitions to a new technology, they should retool, reboot, and rehire in the same factory, with the same workers, in the same communities that existed there before,” he says. And Biden adds that he wants “the same protections for all auto workers” as the UAW recently secured for its members at the Detroit Three OEMs Ford, GM and Stellantis.
The president’s position suggests an interest in the uneven playing field for US EV makers, as non-unionised market leader Tesla has a potential advantage over much more heavily unionised legacy automakers like Ford and GM, who have both recently delayed billions in investment and slackened targets for their already loss-making EVs.
Indeed, while GM’s struggles to profitably produce EVs is attributable to much more than the UAW strike, the company’s CFO Paul Jacobson explained the withdrawal of EV margin guidance as stemming from a desire to ensure its revised strategy is “not something that was dominated by the UAW”.
While the agreements are a win for the UAW, these legacy OEMs are now committed to an as-yet unknown but likely significant hike in operational expenditure under the new wage deal.
Biden suggests that “80pc of electric vehicles on the road today were made in America”. But the US production of market leader Tesla, which is growing as Giga Texas ramps up, has the advantage of being non-unionised. And this may have helped fund some of its string of price cuts this year, admittedly they have also come at the expense of margin.