Be careful what you wish for, especially if you are a member of the currently striking United Auto Workers. Never let a good strike go to waste, is the mantra of socialist progressive Senator Bernie Sanders, who is the Jessie Jackson of the current movement, standing in solidarity with his fellow travers in Detroit. There’s a lot to process here and one can’t summarily dismiss the union demands. I saw a woman UAW member on television yesterday who said it’s a struggle to live on the $16 an hour she makes at Ford. Can you blame her? How do you explain the exorbitant pay difference from an unskilled laborer as mentioned, to executive pay? Sanders called out General Motors CEO Mary Barra, Stellantis CEO Carlos Tavares and Ford CEO Jim Farley, all of whom made over $20 million last year, about their pay. Righteous bucks.
Like Sanders, President Biden has flexed his progressive muscle this week aligning himself with the plight of the union. While closely measuring his words, as it is an election season, he still managed to call out the automakers to share their record corporate profits with record contracts for its workers. On an anecdotal note, it is ironic that those who make the cars at the assembly line level can’t afford to drive them. Speaking of irony, the EV mandates laid down by this administration may likely be the source of the ultimate demise of the union auto worker.
In regard to the UAW strike, the two sides are coming closer to arranging a deal. The union wants a 36% pay increase over four years, a 32-hour workweek with overtime for additional hours, the restoration of retiree health benefits, and defined-benefit pensions (rather than 401(k)s) for all workers, as well as cost-of-living adjustments. The three auto makers have raised their initial wage offers to increases between 17.5% and 20%, plus large one-time payments and improved fringe benefits including time off. However, the shorter work week and restoration of retirement benefits aren’t likely to happen. It reminds one of why they have been on the verge of bankruptcy multiple times.
The goose who laid the golden-green egg for America may actually be the ones responsible for the union’s problems, with the Biden Administration’s policy mandating a prolific movement to electric vehicles. Money, cost and debt aren’t real in the current administration, doling out billions to foster a money losing venture in EV’s. Call him what you will, but Elon Musk and Tesla are the only electric vehicles so far that can turn a profit. The 20 some year startup is not burdened by the legacy expenses of the large auto makers, which they say is one reason the transition has been costly going from gas powered vehicles to electric. According to data from Wells Fargo, it is estimated that including wages and benefits, the cost to the Detroit companies is approximately $66 an hour, compared to $45 an hour at Tesla. If all the union demands were met, it would drive the hourly labor costs to more than double at $136 an hour.
Manipulating the market through incentives to make EV’s over gas-powered cars won’t work unless the consumer is on board, and he/she currently isn’t. EV’s made up less than 3% of Detroit’s auto sales last year, denoting that the consumer currently wants their trucks and SUV’s to be gas-powered. The left’s strong arm tactics have led GM and Stellantis to commit to spending some $35 billion on electric vehicles through 2025, with Ford investing roughly $50 billion. All of this while Ford losses an average of nearly $60,000 on each EV it sells. More fuel on the green fire came in the way of the so-called Inflation Reduction Act and its generous subsidies for battery production, et al. Even with all the gold in Fort Knox being thrown at them, the writing is on the wall for those that make the gas-powered vehicles. The Biden Administration in cahoots with California plan to ban all gas-powered cars by 2035. Wonder what the 28 year old line worker in Anaheim thinks about job security. By the way, did we mention that Tesla was a non-union company?
It doesn’t get the same bump in the liberal press as progressive strikes, but companies have already begun laying off thousands of auto workers, mostly white collar at this point, as a result of the transition to electric vehicles. You don’t have to be Einstein or Oppenheimer to realize that it only makes sense that the next wave of supply-induced electric vehicles will be made in places other than blue states like California, far from the union’s reach in right to work states or even in Mexico. The financial gains received in this drama by the union will ultimately be the cost that is its downfall. Workers in gas-powered plants will enjoy the monetary gains in the short term, only to be sold down the river when their employers can no longer be competitive. This is why America needs a sane, balanced industrial policy that takes more into account than just the environment.
