Dem Demands On Automakers Could Backfire On Their Own Climate Agenda And Americans’ Wallets, Experts Say

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Will Kessler Contributor
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Democrats are looking to bolster union membership in the auto industry, but doing that may tamper with President Joe Biden’s dreams of expanding electric vehicle (EV) adoption while also raising consumer prices and hurting worker wages, experts told the Daily Caller News Foundation.

A group of 33 Senate Democrats sent a letter in early January to top non-unionized automakers operating in the U.S. claiming that many of the companies had acted illegally to prevent unionization and hinting that EV subsidies could be taken away if the automakers do not commit to a neutrality agreement, according to a press release from Democratic Michigan Sen. Gary Peters. The Democrats’ letter threatens to upend the president’s green agenda by taking away incentives from automakers to transition production to electric vehicles at the benefit of creating more unionized workforces, which would raise the costs of labor for the companies and consumers, according to experts who spoke to the DCNF. (RELATED: Biden Admin’s Latest Labor Rule Poised To Upend Key Sector Of The Economy)

“The American people and the auto workers are being pushed into electric vehicles, which are more expensive, inconvenient, they don’t work in cold weather — as we’ve seen these past few days — and they make us dependent on China,” Diana Furchtgott-Roth, director of the Center for Energy, Climate and Environment at the Heritage Foundation, told the DCNF. “So these Democratic senators and Congress are working against the interests of the American worker in two ways. First, they want to have more expensive transportation, and second, they want to take away a chunk of their paycheck.”

The United Auto Workers (UAW) approved a new union contract deal with Ford, General Motors and Stellantis, known as the Big Three automakers, in November after a nearly six-week strike that cost automakers billions. Under accordance with the deal, union workers at the Big Three will receive a 25% increase in wages over the course of the nearly five-year contract, as well as other benefits like cost-of-living adjustment, the elimination of wage tiers and job protections as the companies shift their production to electric vehicles.

“The leadership of the UAW is publicly backing the EV push despite the likely impact on its membership,” Sean Higgins, a labor policy expert at the Competitive Enterprise Institute, told the DCNF. “UAW President Shawn Fain has said the ‘green economy is coming’ and therefore must be accepted. He has tried to use this to leverage concessions from automakers, such as having EV batteries made in union factories. In the long run, this may not be good for union members (making EV vehicles requires fewer workers than conventional ones), but unions often aren’t great long-term thinkers.”

Following the new deal, labor costs at the Big Three were estimated to jump to around $90 an hour per worker, which is double that of other automakers like Tesla, which operate in the U.S. with non-unionized labor forces, at the time expending around $45 to $55 per hour per worker. In response to UAW gains, some of the non-unionized automakers have decided to give their workers pay raises to quell unionization desires following the union deal, including Tesla, according to The Associated Press.

“If a union isn’t raising labor costs at a company, then it isn’t doing its job,” Higgins told the DCNF. “More wages, more benefits, better safety standards, etc. all raise labor costs, and those are ultimately passed on to consumers because consumers are the ones that ultimately pay for a business’s products.”

The UAW has increasingly moved to target non-unionized automakers since its contract win against the Big Three, looking at American companies like Lucid, Rivian and Tesla as well as a slew of foreign automakers that operate in the country, according to CBS News. Shawn Fain, president of the UAW, has called on all U.S. unions to negotiate their contracts to end on April 30, 2028, enabling a possible mass strike for the next day, according to CNN.

“EV cars require fewer workers to build,” Higgins told the DCNF, noting that greater union membership in the auto industry is probably not possible with a corresponding transition to EVs. “That’s just a fact. But that may not matter as much as you might think to the UAW. Believe it or not, only about 150,000 of the UAW’s 400,000 or so members actually work for Detroit automakers. The union has branched out into other areas, such as education, and those areas are growing… So fewer auto workers will hurt the union but not kill it.”

Biden has also made the transition from traditional internal combustion engines to electric vehicles a key part of his broader green agenda, setting the goal of having half of new vehicle sales be electric by 2030, something that could be stalled if subsidies are taken away or EVs are deprioritized in response to a lack of union friendliness by the companies. One of the Biden administration’s policies to facilitate this change is the creation of a $7,500 tax credit for electric vehicles as a part of the Inflation Reduction Act, passed in 2022, to help lower prices and broaden affordability for average Americans.

“These [senators] are not serious, and they couldn’t be serious here,” Furchtgott-Roth told the DCNF. “The reason they’re saying it is because unions give them campaign contributions. They’re working against the American worker and on behalf of these greedy union bosses, who want more money for themselves, for their golf outings, for their conferences, for their T-shirts for their high salaries for their well, well, well-funded pensions.”

The White House and the UAW did not immediately respond to a request to comment from the DCNF.

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