On October 5, faced with a strike at its most profitable assembly plant, General Motors came to the negotiating table with a remarkable offer. It agreed to include electric battery manufacturing in the GM–United Auto Workers (UAW) master agreement.
With this move, having been the most sluggish of the Big Three automakers in trying to meet UAW demands, GM leapt ahead of Ford and Stellantis. After constructing joint ventures in the crucial sector of the industry just coming online, GM blinked and apparently gave up on its dream of a nonunionized, low-wage workforce.
GM is investing $35 billion to produce a million electric vehicles (EV) by the end of 2025. Approximately $20 million is dedicated to research, the remainder being plowed into building or renovating plants that will manufacture and assemble the next generation of EVs. This not only includes expensive changeovers at its assembly plants, but joint-venture battery production. GM CEO Mary Barra explained:
The heart of the strategy is a battery pack design that GM has engineered over the last five years. Its packs, marketed under the name Ultium, are made up of Lego-like battery modules that can be combined in different sizes and used in any GM vehicle, from a compact car to a full-size pickup. Since the modules all use the same parts, GM believes it will reap great economies of scale that will drive down its costs and give it an advantage over other automakers.
Although behind in rolling out the plans, Barra maintains GM will meet its goal. She predicts that by the middle of 2024 GM will produce four hundred thousand EVs. Given that they have made only fifty-six thousand in the first three quarters of 2023, that’s a tall order.
GM is putting all of its vehicles in the EV bucket. So far it is the only one of the Big Three to be so definitive in moving to all-electric production by 2035, and it has been aggressive in developing a research team and partnering with other corporations to gain even further technical expertise. But to meet those goals GM needs flawless execution.
GM has developed a portfolio of electric vehicles across a broader range than its competitors. Starting with a small SUV selling for around $30,000, the line includes a luxury SUV, pickup trucks, and Hummer SUVs that cost $90,000. Autonomous vehicle production is also part of the plan. By building a US-based supply chain, the company will minimize bottlenecks and maximize the tax credits consumers will be able to receive.
In various interviews, Barra has outlined the GM strategy of a no-holds-barred transition. She believes that the combination of superior technology and control over battery production, with a flexible modular platform that allows for a number of different EVs at different price ranges, will result in GM becoming number one.
She envisions that this will win consumer loyalty — but rarely mentions the actual workforce.
GM’s Joint Ventures
GM was the first of the Big Three to build a US-based factory to produce modules for batteries. The facility in Brownstown, Michigan, was set up in 2010 as a GM subsidiary, which meant workers were not part of the GM-UAW contract. Although eventually workers won union representation, to this day — like other subsidiary workers — they are paid less than assembly workers.
Initially, the lithium iron cells were flown in from South Korea, but within two years the Korean supplier, LG Chem, opened a battery plant in Holland, Michigan. When at least thirteen Chevrolet Bolts caught fire because of defective cells — resulting in a class-action lawsuit — GM agreed to replace over 110,000 vehicles for a total of $2 million, with LG putting up $1.9 million.
Despite this setback, GM and LG deepened their collaboration, and in 2020 created Ultium, a fifty-fifty joint venture. Their research has produced third-generation batteries, which are made of nickel-cobalt-manganese-aluminum (NCMA). This has doubled the density and power of the cells, extended the number of miles a vehicle can drive without a charge, lengthened battery life, and significantly reduced costs.
The vehicle’s architecture has also been reconfigured, creating an Ultium platform flexible enough for different models. With these breakthroughs, and digital programming and close monitoring that has some analysts comparing the plants to smartphones, Ultium announced the construction of three battery plants in Michigan, Ohio, and Tennessee. The three are close to GM assembly plants being converted to EV production.
The Lordstown, Ohio, Ultium plant is the only one up and running. It may be a “smart” plant, but the low-paid, nonunion workers there have run into severe safety issues. They organized themselves and now have an interim UAW contract, which raised their wages immediately and provided back pay.
Why Did GM Concede?
It is not surprising that GM blinked when faced with the almost certain shutdown of the Arlington, Texas, plant, its most profitable. The company needs to sweep aside all obstacles to meet its ambitious targets.
It may have been unpleasant for GM to reverse their plan to staff its battery plants with low-wage workers, but no obstacle can stand in the way of the company’s EV production goals. CEOs at Stellantis and Ford may not feel the same way — but now that GM has agreed to include joint ventures in the master agreement, it will be difficult for Ford and Stellantis to hold the line.
On the other hand, earlier in the negotiations Ford proposed a two-year job security provision for workers who get laid off during the transition to EVs. While that offer also dealt with future benefits, bringing new work under the master agreement is a far better solution. Some experts believe the transition to EVs may decrease the workforce by anywhere from 25 to 40 percent; other analysts point out that with the increase in research and production of batteries, the workforce might actually grow.
Clearly, the Big Three’s agreeing to bring new sectors of workers into the auto master agreement — whether in the joint-venture battery plants or in the subsidiaries where workers are in the union but stuck at a lower tier — is a crucial step forward. In fact, unionizing joint ventures goes beyond what many of us saw as possible in the current negotiations. It is particularly significant that GM broke the barrier, as it is the corporation that’s been most innovative and aggressive in pursuing EV production.
While the Big Three–UAW negotiations continue, several tentative provisions have in fact gone beyond what many thought could happen. Some said autoworkers could never win back cost-of-living adjustments, but it seems we have. As union president Shawn Fain emphasized, quoting Walter Reuther, power consists of making the corporations say yes when they want to say no.