The United Auto Workers union is calling on General Motors to pay full union wages at electric vehicle battery factories.
The union, in a statement reacting to GM's announcement Friday that it would build a second U.S. battery plant, said the company and its joint venture partner have a “moral obligation” to pay the higher wages at battery factories.
The statement sets the tone for the next round of contract talks in 2023 between the union and GM, Ford and Stellantis (formerly Fiat Chrysler), all of which have plans to make significant numbers of battery-powered vehicles by then as they invest billions to transition from internal combustion engines.
However the conflict is resolved, it's likely to chart the course of U.S. manufacturing wages into the next decade as the country moves from petroleum-powered vehicles to those that run on electricity.
GM said wages at the battery plants would be determined by Ultium Cells LLC, the joint venture with LG Energy that's running the factories.
GM and LG Energy Solutions, its partner on the new plant in Spring Hill, Tennessee, and another under construction in Lordstown, Ohio, should work with the UAW “to make sure these are good-paying union jobs like those of their brothers and sisters who make internal combustion engines,” the union statement said.
President Joe Biden is pushing the transition to electric vehicles, which he says will create “good-paying, union jobs of the future.”
Currently top-scale union production workers at internal combustion engine and transmission plants run by GM, Ford and Stellantis make more than $31 per hour. But when the Lordstown plant was announced in 2019, GM CEO Mary Barra said its worker pay would follow GM's component manufacturing strategy, where workers are paid less than top union wages.
She said the plant would have to be cost-competitive.
The UAW will want the higher wages, but joint venture companies fear they won't be competitive globally if they pay too much, said Kristin Dziczek, senior vice president at the Center for Automotive Research, an industry think tank.
“The union is going to lose a huge number of jobs from engine and transmission plants that are replaced by battery plants,” said Sam Abuelsamid, principal analyst at Guidehouse Insights. “There are also going to be job reductions in the assembly plants.”
The union statement came just after GM announced plans to more than $2.3 billion to build the second U.S. electric vehicle battery factory in Spring Hill. The 2.8-million-square-foot plant is expected to create 1,300 manufacturing jobs when it opens in 2023. The joint venture already is building the Lordstown plant, which will employ about 1,100.