September 19, 2023 - 9:00 pm
President Joe Biden likes to sell himself as a pro-union president, but his policies are contributing to a major strike.
Last Friday, members of the United Auto Workers went on strike against GM, Ford and Stellanis, previously known as Fiat Chrysler. The strike initially began at three plants, one owned by each company. Combined, that’s around 10 percent of unionized auto workers.
The union wants a 36 percent pay increase over the next four years, 32-hour workweeks and a return of defined-benefit pensions and retiree health benefits. Apparently, union leaders didn’t learn much from GM’s and Chrysler’s first bankruptcies.
Mr. Biden was quick to lend his support, saying last week, “I understand the workers’ frustration.” He added that the companies “should go further to ensure record corporate profits mean record contracts for the UAW.”
The sides appear far apart, although disputes like this often resolve quickly. If that doesn’t happen, it’s likely to get worse. The striking workers produce parts needed by other employees. Without those parts, Ford has already laid off 600 nonstriking UAW employees in Michigan. For its part, the union has said it could expand the strike. A complete strike could drop new vehicle production by 30 percent or more. That would only worsen Bidenomics’ inflation problem.
Strikes are usually presented as a binary: employers versus employees. But in this case, there’s a third player. Mr. Biden’s green energy mandates are squeezing both sides. In 2022, less than 6 percent of new vehicles sold were electric. Even that low number didn’t happen as the result of consumer demand. State and federal governments have pushed EV sales with billions in subsidizes and major mandates. For one, California has banned the sale of new gas-powered vehicles by 2035. Other states are following suit.
If you follow the money, you’ll see the problems these government interventions have created for both sides.
Automakers have invested tens of billions in plants making gas-powered cars. But in the past few years, the Big Three automakers have said they plan to investment more than $100 billion combined to produce electric vehicles. In the United States, Ford sold the second-most EVs last year. Ford, however, lost almost $60,000 on every EV it sold in the first quarter this year. Not a typo. Last year, Ford CEO Jim Farley said it takes “40 percent less labor to make an electric car.”
So automakers are preparing to spend $100-plus billion to build cars that currently lose money and require fewer union employees.
Perhaps, UAW and the Big Three should declare a strike on Mr. Biden’s green agenda.