New EV battery plant fuels labor tensions as UAW strike looms

By Chris Isidore, CNN

New York (CNN) — Stellantis and Samsung SDI announced plans Monday for another EV battery plant joint venture to open in 2027. But the announcement could make it more difficult to avoid a strike at Stellantis’ existing US plants this fall.

The United Auto Workers union, is in the process of negotiations with Stellantis, which makes vehicles under the Jeep, Ram, Dodge and Chrysler brands, as well as with General Motors and Ford. The union has been vocal in its criticism of the slew of battery plants that have opened recently or are in the works, which the union says will pay about half of what senior UAW members at assembly plants are paid. Four major EV battery plants have opened in recent years and 19 more are planned with Monday’s announcement, according to the UAW. The plants mostly are joint ventures, as this latest plant would be, and the union will need to organize workers at the battery plants if they are to be members of the union.

The Big Three’s contacts with the union all expire on Sept. 14. Negotiating history in recent decades would suggest the union won’t go on strike against all three at the same time. Instead the union traditionally picks one of the three automakers as a “target” of its initial focus of negotiations, and that company could face a strike by itself. That could be followed by strikes at other automakers if they don’t agree to whatever deal is reached at the target. UAW President Shawn Fain is on record as saying the union is ready to go on strike if the automakers don’t meet union demands for improved wages and benefits.

Stellantis has 43,000 UAW members on payroll currently. It trails GM and Ford in the switch to electrification, although it has set a target of 100% of its European passenger cars being battery electric vehicles and a 50% BEV sales mix in the United States by 2030. Stellantis was created in 2021 through the merger of Fiat Chrysler and PSA Group, maker of Peugeot, Citroën, DS, Opel and Vauxhall cars in Europe.

Stellantis and Samsung already have a plant under construction in Kokomo, Indiana due to start producing batteries in early 2025. It has yet to announce a location for the plant announced Monday, nor a cost or the number of jobs it expects when it opens.

The wages and union status of both plants will not be a subject of the current negotiations between the UAW and Stellantis, which started earlier this month. Those talks will have to be focused on the wages and benefits for the current UAW members. But the union is concerned that the plans to switch from gasoline powered vehicles to EVs will mean far fewer jobs for its members.

Estimates are that it takes one third less labor to assemble an EV than a car with an an internal combustion engine. That’s because many of the parts in traditional engines and transmissions (which are built for Big Three vehicles at UAW-represented factories) are missing in an EV. And many of the jobs involved in building EVs involve building the batteries, mostly at at non-union plants owned jointly with battery makers. If the automakers shift all those jobs to non-union plants it will mean a big drop in UAW membership and wages for the workers.

Most of the battery plants are either under construction or still in the planning stages and have yet to hire workers. But workers at one of the battery plants that has opened, a joint venture between GM and Korean battery maker LG, in Warren Ohio, voted 710-16 in December to join the UAW.

The union has yet to negotiate the first union contract there though. It says the workers are being hired at a starting pay of $16.50 and hour and only progressing to $20 an hour after seven years. By comparison, UAW members with top seniority at a Big Three factory get $32.32 an hour, plus an annual bonus and profit sharing.

“We have been absolutely clear that the switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom,” said UAW President Shawn Fain in a recent statement denouncing a $9.2 billion government loan to three other EV battery plants being planned by Ford and Korean battery maker SK.

The Stellantis statement did not mention the possibility of any federal assistance for this plant. The union said that it’s likely the Stellantis-Samsung plant will qualify for $1 billion a year in tax credits in addition to any government loans it may receive, under terms of the Inflation Reduction Act that passed Congress last year and contains assistance for efforts to produce electric cars.

“The federal government is funneling billions of taxpayer dollars into this industry and that money should come with a commitment to maintaining current union wage and health and safety standards in this and every EV project,” said Fain in response to a request for comment from CNN.

Talks between the UAW and the Big Three are off to a contentious start. Fain refused to pose for a photo opportunity shaking hands with the CEOs of the three companies across the bargaining table, as has been the tradition at the start of negotiations going back decades. He’s vowed to take a hard line in talks, demanding an end to a lower pay and benefit tier for some of the workers hired since Chrysler and GM went through bankruptcy and federal bailouts in 2009, a restoration of cost-of-living adjustments to protect workers from inflation and improved pay and benefits overall. And job protections for workers at ICE vehicle plants is another major issue.

“We’ve seen this company choose to form a joint venture with Samsung to build batteries right in the backyard of all the Kokomo powertrain plants, with no commitment to our members or our master agreement terms,” said Fain at the start of talks with Stellantis. “The hard work of our members has generated record profits for this company and the payoff is to continue to tell the workers their job security means nothing to this corporation.”

Stellantis did not immediately have a comment about how it thought the latest battery plant announcement could affect negotiations.

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