A few weeks ago, we wrote about the start of the UAW strikes and what they meant for the green transportation transition. As the strike neared its seventh week, United Auto Workers announced a tentative deal with Ford, while continuing to strike at GM and Stellantis, the other two of the so-called Big Three U.S. automakers. Here’s the latest on how the UAW strike will continue to impact the transition to electrified transportation and the fight against climate change.

UAW Reaches a Tentative Agreement with Ford

On Thursday night, the United Auto Workers (UAW) and Ford came to a tentative agreement to end the strike and send workers back to Ford plants in Kentucky, Michigan, and Chicago and get more than 20,000 Ford employees back to work.

Preliminary reports indicated that Ford has agreed to a 25% wage increase for UAW workers over four-and-a-half years, plus a cost of living wage increase, pushing hourly rates over $40 per hour. Before the tentative agreement, full-time UAW workers' pay started at $18 per hour and maxed out at $32 per hour.

The tentative agreement also includes a plan for full-time employees to reach the top wage in three years, improvement in retirement benefits, and, in a significant shift, the right to strike over plant closures. The agreement gives the UAW the right to strike at the entire company over any plant closure, which could significantly impact the EV transition.

Just this week, the UAW had expanded its strike to one of the most lucrative Ford locations, a truck plant in Kentucky, after changing up its strategy in September to put further financial pressure on automakers. Previously, the union had warned the Big Three about where it would strike prior to worker walkouts.

... But the UAW Will Continue to Strike at Stellantis and GM

According to the UAW, the strike will continue at Stellantis and GM as of Thursday evening. Once news of the Ford agreement came out, the remaining two companies moved to come to their own tentative agreements with the union as soon as possible.

This week, the UAW expanded the strike against Stellantis when more than 6,000 workers walked out of a truck and SUV plant outside of Detroit, and forcing the company to lay off 2,000 workers due to the strike.

The UAW also expanded its strike against GM, walking out of a plant in Michigan that makes popular models, including the Chevrolet Tahoe, Chevrolet Suburban, GMC Yukon, and Cadillac Escalade. This week, GM said that the strike was beginning to have a significant financial impact on its bottom line even though the company reported another increase in earnings when it reported them this week. GM said the strike cost $200 million in the first two weeks of the quarter but says that those costs have risen since.

During the first three weeks of October, GM said the strike cost them $600 million–equating to around $200 million per week. In addition to this, Honda, the Japanese automaker recently announced that it’s pulling out of a deal with GM to develop affordable EVs.

Ford reported earnings after the bell on Thursday evening and, unlike GM, missed earnings targets. However, like GM, the company pulled its guidance for the year because of the pending UAW strike.

One key point that emerged from the report was that Ford’s EV unit posted a $1.33 billion loss for the quarter. Ford said that the UAW strike has caused $1.3 billion in lost production and around $100 million in loss during the third quarter.

What Role do EVs and the Green Transportation Transition Play in the UAW Strikes?

As we mentioned in our previous post, one of the central points of the strike has been the green transportation transition. All Big Three automakers are working on building and creating brand-new electric vehicles. Because these vehicles rely on an entirely new propulsion system and require fewer parts to assemble, the UAW has been concerned about everything from plant closures to issues around the labor used in these new battery and EV plants.

Ford, for example, is spending billions to make the EV transition. The company is currently building four new EV battery plants in Tennessee, Kentucky, and Michigan. Of those, three of them are jointly owned by overseas partners from China, a country without unions. The new battery plants will be managed by Ford partner SK One, which will be exempt from the agreements in the tentative deal between Ford and the UAW.

GM and Stellantis also have agreements to build battery plants with overseas partners from Korea and China as well, which has largely hampered negotiations around the EV transition. However, this week, GM CEO Mary Barra reportedly offered the UAW to put any “future” battery plants under the union's master agreement. Thursday, the UAW countered with another offer that’s similar to the tentative agreement that they have with Ford. The sides are reportedly close to reaching an agreement.

It’s important to note that the UAW’s movement could still make EVs more expensive for consumers. In September, it was reported that prices for EVs could rise as much as $5,000 as a result of the strike. While the average price of an EV dropped by nearly $15,000 in the last year, according to car sales site KBB (thanks in large part to Tesla’s aggressive marketing tactics), the combination of high car prices and high interest rates could significantly stall consumers’ willingness to buy into the green transportation transformation. It’s also reportedly getting harder for dealers to sell electric vehicles because EVs are still too expensive for car buyers.

At its core, the UAW strike is about a just transition from fossil fuels to electric vehicles. Everything from retraining displaced workers to ensuring that future technological innovations sustainably support employees whose jobs are threatened by the green transition sits at the heart of the UAW movement. As The Atlantic’s Ronald Brownstein pointed out in September, the unions fear that the automotive industry is using the EV transition to continue its shift away from well-paying jobs.

As the Biden administration pushes forward with its climate change goals and initiatives, it's clear that the UAW strike underscores some of the central tensions that exist between the country’s climate goals and how it will affect the workforce both here in the U.S. and abroad.



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