Union wage gains could threaten transition to electric vehicles

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New contracts will raise production costs as automakers transition to EVs amid stiff competition from non-unionized rivals, particularly Tesla

General Motors' Spring Hill union employee Mary Beth Gervais walks the picket line near the plant in Spring Hill, Tenn., on Oct. 30.U.S. President Joe Biden did not hesitate to show whose side he was on in September, when he joined union members on the picket line at the beginning of a series of escalating strikes by the United Auto Workers.

No one can begrudge UAW members in the United States and their Unifor counterparts in Canada, who also achieved rich pay increases at Fordfactories here, what is by all accounts owed to them. Unionized auto employees took big wage and benefit cuts to keep the Detroit Three alive after their near-death experiences during the Great Recession.

The Detroit Three all insist they remain fully committed to an all-EV future. Yet, none has figured out how to replicate the hefty profits they currently make on gasoline-powered SUVs and pickups, despite the massive government subsidies being poured into EV assembly and battery plants. As a result, the manufacturers are lobbying the Biden administration to water down rules requiring two-thirds of all passenger cars and one-quarter of pickups sold in the U.S. in 2032 to be electric models.

 

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