“Spit in the face.” Electric car plans worry Midwest motor city

Kokomo, Indiana
CNN
—

Normally, a new $2.5 billion factory, with 1,400 expected jobs, would be considered good for the local economy.

But not the battery plant in Kokomo, Indiana.

“It’s a spit in the face,” said Gary Quirk, president of United Auto Workers Local 685.

This is because the factory will produce large batteries for electric cars. The plant is being built through a joint venture between Stellantis, the automaker that makes cars under the Jeep, Ram, Dodge, Chrysler, and Samsung brands. UAW Local 685 represents four Stellantis-operated plants already in the city: three that make transmissions, and one that makes engines.

The concerns of Quirk and his fellow union members sum up a larger struggle in the American auto industry: electric cars simply require less labor to manufacture. As automakers move to electric vehicle lineups, many of the well-paying union jobs that make engines and other parts could disappear.

That conflict is on display in the Midwest now, as the UAW’s current contract with the Big Three unionized automakers — General Motors, Ford and Stellantis — expires at 11:59 p.m. Thursday.

The union calls for job protection among its ambitious negotiating goals. It says it is prepared to strike its 145,000 members at the three companies as early as Friday if it cannot reach an agreement with the companies.

There is another local UAW hall in town, this one that represents workers at the Stellantis casting plant also in Kokomo, and is located directly across the street from the new battery plant. This local was once the home of Shawn Fine, now president of the UAW and leading negotiations with automakers that could lead to a strike later this week.

“It’s our backyard,” said Denny Butler, vice president of Local 685. “It’s ridiculous.”

The planned shift to electric vehicles will mean disruptions and job losses for some employees who have been working at auto plants, often for generations. Electric vehicles do not require gasoline engines or transmissions.

Jobs in Kokomo are among the most at risk.

Kokomo is an artificial island located in the middle of green agricultural fields in north-central Indiana, between Indianapolis and South Bend. Those four Stellantis plants employ 4,500 hourly workers and another 600 salaried employees, or more than one in every seven nonfarm jobs in the city and surrounding area.

But now Stellantis, Ford and General Motors are planning all-electric futures, futures that will likely require fewer workers to build the same number of vehicles.

“We know we’re on borrowed time,” said Todd Dunsmore, who has worked at Stellantis for seven years. How does he feel about the EV transition? “I know he’ll hurt Kokomo.”

But some other members of the local UAW in Dunsmore aren’t convinced that electric vehicles pose an existential threat to gas-powered vehicles and their jobs. Many believe the company will decide to do other work at the Kokomo plants, even if it no longer needs transmissions or engines. Many in the union’s Kokomo offices doubt that electric vehicles will reach most, let alone all, of the market.

Philip Klein has worked at one of the city’s transit stations for 27 years. His father worked there for 30 years. He doesn’t think there’s real demand among the public for electric vehicles.

“The thing that worries me is that (President Joe) Biden is rushing this,” he said.

It’s a common fear, even among those who don’t believe in EVs, that the auto industry will be forced to convert to EVs whether there is demand for them by car buyers or not.

“I don’t think people are ready for electric vehicles, to be honest with you,” Quirk said. “Maybe the politicians are ready, but I don’t think the people are ready for this.”

“It sounds good on paper. But the infrastructure isn’t set up to handle it,” Butler said. “You could spend more time charging the car, or trying to find a charger, than you do on the road.”

While electric vehicle sales are still just a small fraction of automobile sales, automakers are seeing growing public demand for electric vehicles — and the need to comply with increasingly stricter environmental regulations around the world.

Even with their doubts, Klein, Quirk, and Butler are nervous.

“If the time comes, if there are layoffs due to electric vehicles, the bottom line is we have nowhere to go,” Quirk said.

The Kokomo battery plant still has more than a year to go before production begins. While it has begun hiring some employees, it does not yet have the workers who will be on the ground building the batteries.

The union says the workers will not be employees of Stellantis but rather employees of a separate company. Top UAW members at Stellantis, General Motors and Ford make $32.32 an hour. Battery plant workers will likely start with half that amount, Quirk said.

“It’s a small part of what we make. Let’s face it, it’s not a livable wage,” he said.

The three unionized U.S. automakers are building electric vehicle battery factories. There is one plant open, a joint venture in Ohio between GM and LG, and nine others planned or under construction.

In all cases, the factories are a joint venture with foreign battery makers. This means these workers They wouldn’t be employed by the automakers themselves — and therefore, wouldn’t be unionized, unless they organized.

The UAW said it does not oppose plans to switch to electric vehicles, although by some estimates that could mean a 30% reduction in jobs because electric vehicles have fewer moving parts and require less labor to manufacture them.

But the union says it should be a “fair transition” to EVs with good wages and union jobs for those who lost their positions because of the conversion. She says electric car plans make these talks “the defining moment of our generation.”

It will be difficult for the union to win UAW-level wages at battery plants. Workers at the first plant to open in Ohio voted to join the UAW in December, and the union just won more than a 20% pay increase there. Even with the wage increase, this is still a small fraction of what workers in unionized factories receive. Workers in Ohio will now receive a starting wage of $20.50 per hour, up from the previous starting wage of $16.50 per hour. Even the highest wage would be approximately 30% less than the highest wage in a UAW factory today, let alone what it could be in the next decade.

However, winning much higher wages for the Big Three’s battery plant workers may not be enough: The three unionized US automakers are not the only ones rushing to build battery plants. Dozens more are planned or under construction to serve the non-union foreign automakers that now make most cars and trucks manufactured in North America. Many of them are low-wage, especially in non-union Southern states.

In Kokomo, UAW members are preparing for a strike that many believe will begin this week. Dunsmore was at the union hall on a recent Wednesday afternoon to sign up for a picket service at a factory in the city.

“I’ve been planning this for a year,” he said.