It is becoming evident that Joe Biden’s green energy plan for the auto industry, a linchpin of the Inflation Reduction Act, will massively shift wealth away from American workers. The deal funnels billions to multinational corporations, according to a report published by United Auto Workers (UAW) this week. Instead of supporting the labor force, taxpayers will effectively underwrite an industry-wide bailout.
Under the new legislation, automakers producing Electric Vehicles (EVs) and their required batteries are set to receive a windfall. Estimates suggest these corporations could net up to $220 billion by 2031, all thanks to taxpayer-funded subsidies.
This financial boon hinges on a provision in the law allowing automakers to leverage tax credits, provided their EVs and batteries are chiefly sourced and manufactured in North America. One such benefactor of this policy is General Motors (GM) and LG’s EV battery plant in Lordstown, Ohio, known as Ultium Cells.
This plant, replacing GM’s previous vehicle assembly plant, highlights the stark contrast between the old and new eras of the auto industry. Workers at the former GM plant were earning up to $30 an hour, while their counterparts at the Ultium Cells plant are earning around $16.50 an hour, with a marginal raise to $20 an hour anticipated after seven years. This represents a devastating 45% wage cut for auto workers in Lordstown.
Ironically, GM and LG, through their Ultium Cells plant, stand to amass over $1 billion annually in subsidies via Biden’s EV tax credits. The UAW fears these subsidies will be utilized to bolster corporate profits at the expense of hard-working Americans. The report asserts a “real danger” that taxpayer dollars will finance an EV industry that undervalues and jeopardizes workers.
Biden's green agenda could be at risk as labor groups enter electric vehicle contract negotiations https://t.co/QoNt4ecKzK
— Washington Examiner (@dcexaminer) July 11, 2023
As the UAW and major automakers like Ford, General Motors, and Stellantis prepare to negotiate renewed labor contracts, Biden’s green energy agenda faces significant hurdles. Workers’ rights and compensation are at the heart of the debate as the industry transitions to EV. If these negotiations falter, some plants may strike as early as September, stalling Biden’s green vision.
In response to these concerns, UAW President Shawn Fain has tactically withheld the union’s endorsement for Biden’s reelection campaign. He aims to ensure the White House’s commitment to strong wages and job security as the industry switches to electric. Biden’s previous proclamations as the “most pro-union president in history” will be tested.
The ongoing negotiations highlight a fundamental issue. As the auto industry navigates the path to a green future, it must not do so at the expense of the American workers powering its engines. Policymakers need to ensure that green initiatives align with the economic well-being of laborers, not just corporate bottom lines. Otherwise, Biden’s green deal could deeply leave the American auto industry and its workers in the red.
