FROM AN EDITORIAL IN THE LAS VEGAS REVIEW-JOURNAL
President Joe Biden likes to sell himself as a pro-union president, but his policies are contributing to a major strike.
This month, members of the United Auto Workers went on strike against GM, Ford and Stellantis, previously known as Fiat Chrysler. The strike initially began at three plants, one owned by each company. Combined, that's around 10% of unionized auto workers.
The union wants a 36% 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.
Biden was quick to lend his support. "I understand the workers' frustration," he said, adding 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 non-striking UAW employees in Michigan. A broader strike could drop new vehicle production by 30% or more. That would only worsen Bidenomics' inflation problem.
Strikes are usually presented as a binary: employers vs. employees. But in this case, there's a third player. Biden's green energy mandates are squeezing both sides. In 2022, less than 6% 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 invest more than $100 billion combined to produce electric vehicles. In the U.S., 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% 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 Biden's green agenda.
