Governors' Wind Energy Coalition

LAKE ORION, Mich. — On a gray morning last Sunday, a small squad of United Auto Workers members kept up the picket line against General Motors Co. as the company and union leaders bargained to end a nationwide strike that began Sept. 16.

But there’s a third party at the bargaining table that won’t easily come to terms — technology in the form of a new generation of electric and self-driving, autonomous vehicles that GM is committed to produce.

At the headquarters of UAW Local 5960, a short ways from GM’s vast Lake Orion plant, President Louis Rocha keeps coming back to technology’s two-sided source of the union members’ prospects and peril.

The Orion Assembly plant now builds the Chevrolet Bolt EV; the Sonic, a gasoline-fueled hatchback; and a Cruise test vehicle employing autonomous technology.

“We’re the only plant, I believe, in the U.S. and possibly the world that is building a conventional combustion vehicle and electric at the same time. It’s pretty remarkable,” Rocha said. “Here we have the transition of going from a combustion engine right to an electric vehicle and possibly into an autonomous vehicle.”

But the workings of a battery electric vehicle has far fewer pieces than an internal combustion engine, requiring less work to build and install into a motor vehicle. That — along with increasing automation to build vehicles — is also raising fears among workers.

Technology’s threatening presence comes up behind the nearly 900 hourly employees on the Orion assembly line with an insistent “beep-beep-beep” that could be tolling a death knell for more jobs lost to automation, efficiency and competition.

The sound is from a motorized vehicle that delivers new parts to the line to keep it moving. A computer program steers it to its destinations.

“Usually we would have somebody driving a truck hauling parts to the line. Now they’re programmed. There’s no driver. They guide them through a path, and when they complete their circle, it memorizes it and that’s what it follows. It knows where to go,” Rocha said. “It’s crazy to see them.

“Those are the sorts of things that affect our jobs,” added Rocha, who came to Local 5960 following the 2005 bankruptcy of the Delphi auto parts supplier where he had worked.

“It’s a big challenge to maintain jobs in the automotive industry,” he continued. “It is a challenge that these EVs will require less components, the way technology is changing so fast.”

‘It’s a bad news story’

Rocha said he doesn’t know where the negotiations are and doesn’t trust the media speculation about progress or the lack of it.

The issues are many, as always, headed by hard bargaining over wages and health benefits, and GM’s use of temporary workers to meet surges in factory activity and to cover for UAW workers on vacation or sick leave.

Average UAW wages, adjusted for inflation, have dropped 16% since 2010, according to an analysis by the Center for Automotive Research (CAR) in Ann Arbor, Mich.

GM’s goal is to tie increased compensation to its financial results through a profit-sharing agreement with the union, rewarding good years but lessening costs in poor ones. The 2017 profit-sharing check was a record $12,000 per worker. The union wants its share of GM’s banner profits last year, the CAR study noted. Looking ahead, the company sees the risks of recession and depressed sales and is trying to cushion the shock.

What union members want is a wage that supports a middle-class life, said local Vice President Gerald Lang.

Then there is job security, which has a sharpened point in the current negotiations because of GM’s latest announcements on plant closings. The CAR analysis noted, “As in past contracts, the UAW will work hard to maintain employment at all current Detroit Three facilities, and will not agree to close a plant permanently without getting some substantial gains in return.”

But the small number of parts in an electric vehicle compared with a traditional car could influence future employment. A Chrysler Pacifica minivan contains 107 separate forged metal parts. The Nissan Leaf has seven or eight, said Paul Eichenberg, a Detroit-area consultant. The eventual acceleration of EV sales, which Eichenberg and many other experts predict, will drastically shrink the auto parts supplier sector and reduce the need for workers in manufacturing plants (Energywire, Sept. 25).

A study by New York-based consultancy AlixPartners, reported by Bloomberg, found that in Europe, it took 40 less hours to assemble an electric vehicle’s drive components than a conventional vehicle.

“It’s a bad news story from a labor perspective,” Mark Wakefield, the head of AlixPartners’ automotive practice, told Bloomberg. “You would just fundamentally need less people.”

A ‘profit desert’?

However, immediate issues take precedence over technology worries that challenge production, said Kristin Dziczek, vice president of industry, labor and economics at CAR. “They’re very aware this transition is going on,” she said of the UAW leadership. “But it’s not happening tomorrow.”

The UAW has a precedent for signing labor agreements favorable to the companies to open doors in new technology areas, she said. If the pending new trade agreement with Mexico and Canada passed Congress, there would be opportunities to expand EV battery production in the United States, which the union could try to organize, she said.

The Lake Orion plant is in line for more work, according to GM Chairwoman and Chief Executive Mary Barra, who came to the plant last spring to announce plans for expanded electric vehicle production here. “We are excited to bring these jobs and this investment to the U.S.,” Barra said, linking the decision to GM’s “commitment to an all-electric future.”

Reinventing automobiles as electronic driving platforms, eventually able to drive themselves, will swallow an enormous amount of automakers’ cash, estimates AlixPartners. The capital drain will create a “profit desert” for auto manufacturers, with chronic losses that will be dangerous burdens if economies fall into recession, the June AlixPartners research note concluded. The companies’ response to hard times is layoffs and plant closures.

Embracing technology is a mandate, not an option, said Rep. Debbie Dingell (D-Mich.), a champion of the auto sector whose district west of Detroit is a hub of the industry. In her reckoning, electric vehicles must be sources of carbon emissions reduction and work opportunity.

“We need to go to a carbonless society,” she said in an interview. “I’m very concerned that between EV and AVs, we are actually getting very behind on where we should be on innovation and technology.

“We already see that China and India and Western Europe are mandating that vehicles be carbon-free. We’re competing in a global marketplace, so U.S. manufacturers have to be investing in developing this technology,” she added. “I think you will get new green jobs. They will be different jobs.”