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    What to Know About the Potential Autoworkers Strike

    The union and the carmakers remain far apart on wages.The United Auto Workers union, which represents about 150,000 workers at U.S. car plants, could strike against three of the country’s largest automakers on Friday if the union and the companies are unable to reach new contracts.The three automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — could be forced to stop or slow production if an agreement isn’t reached by midnight on Thursday. The president of the U.A.W., Shawn Fain, said that Thursday was the “deadline, not a reference point.”The union is negotiating a separate four-year contract with each automaker. The U.A.W. has never struck against all three companies at once, preferring to target one at a time. But Mr. Fain has said he and his members are willing to strike against all three this time.What’s at issue in the labor dispute?Compensation is at the forefront of negotiations.The U.A.W. is demanding 40 percent wage increases over four years, which Mr. Fain says is in line with how much the salaries of the companies’ chief executives have increased in the past four years.As of last Friday, the two parties remained far apart, with the companies offering to raise pay by 14 to 16 percent over four years. Mr. Fain called that offer “insulting” and has said that the union is still seeking a 40 percent pay increase.What role is the switch to electric cars playing in the negotiations?The auto industry is in the middle of a sweeping transition to battery-powered vehicles, and G.M., Ford and Stellantis are spending billions of dollars to develop new models and build factories. The companies have said those investments make it harder for them to pay workers substantially higher wages. Automakers say they are already at a big competitive disadvantage compared with nonunion automakers like Tesla, which dominates the sale of electric vehicles.The U.A.W. is worried that the companies will use the switch to electric cars to cut jobs or hire more nonunion workers. The union wants the automakers to cover workers at the battery factories in their national contracts with the U.A.W. Right now those workers are either not represented by unions or are negotiating separate contracts. But the automakers say they cannot legally agree to that request because those plants are set up as joint ventures.What happened in the last U.A.W. strike?The U.A.W. most recently went on strike in 2019 against General Motors. Nearly 50,000 General Motors workers walked out for 40 days. The carmaker said that strike cost it $3.6 billion.The strike ended after the two sides reached a contract that ended a two-tier wage structure under which newer employees were paid a lot less than veteran workers. G.M. also agreed to pay workers more.How would a strike against the three automakers affect the economy?A long pause in car production could have ripple effects across many parts of the U.S. economy.A 10-day strike could cost the economy $5 billion, according to an estimate from Anderson Economic Group. A longer strike could start affecting inventories of cars at dealerships, pushing up the price of vehicles.The auto industry is in a more vulnerable place than it was in 2019, the last time the U.A.W. staged a strike. In the earlier part of the pandemic, car production came to a halt, sharply reducing the supply of vehicles. Domestic car inventories remain at about a quarter of where they were at the end of 2019.Will a strike have political ramifications?It definitely could.President Biden has called himself “the most pro-labor union president” and sought to solidify his ties with labor unions ahead of his re-election campaign. But the U.A.W., which usually endorses Democratic candidates including Mr. Biden in his 2020 run, has held off endorsing him for the 2024 race.The union fears that Mr. Biden’s decision to promote electric vehicles could further erode union membership in the auto industry. Mr. Fain has criticized the administration for awarding large federal incentives and loans for new factories without requiring those plants to employ union workers.Former President Donald J. Trump, who is most likely to secure the Republican nomination, has been seeking to win over U.A.W. members. He has criticized Mr. Biden’s auto and climate policies as bad for workers and consumers. More

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    UAW Standoff Poses Risk for Biden’s Electric Vehicle Commitment

    A looming auto industry strike could test the president’s commitment to making electric vehicles a source of well-paying union jobs.President Biden has been highly attuned to the politics of electric vehicles, helping to enact billions in subsidies to create new manufacturing jobs and going out of his way to court the United Automobile Workers union.But as the union and the big U.S. automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — hurtle toward a strike deadline set for Thursday night, the political challenge posed by the industry’s transition to electric cars may be only beginning.The union, under its new president, Shawn Fain, wants workers who make electric vehicle components like batteries to benefit from the better pay and labor standards that the roughly 150,000 U.A.W. members enjoy at the three automakers. Most battery plants are not unionized.The Detroit automakers counter that these workers are typically employed in joint ventures with foreign manufacturers that the U.S. automakers don’t wholly control. The companies say that even if they could raise wages for battery workers to the rate set under their national U.A.W. contract, doing so could make them uncompetitive with nonunion rivals, like Tesla.And then there is former President Donald J. Trump, who is running to unseat Mr. Biden and has said the president’s clean energy policies are costing American jobs and raising prices for consumers.White House officials say Mr. Biden will still be able to deliver on his promise of high-quality jobs and a strong domestic electric vehicle industry.The head of the United Automobile Workers, Shawn Fain, center, wants his union’s wages and labor standards to apply to nonunion workers who make electric vehicle components.Brittany Greeson for The New York Times“The president’s policies have always been geared toward ensuring not only that our electric vehicle future was made in America with American jobs,” said Gene Sperling, Mr. Biden’s liaison to the U.A.W. and the auto industry, “but that it would promote good union jobs and a just transition” for current autoworkers whose jobs are threatened.But in public at least, the president has so far spoken only in vague terms about wages. Last month, he said that the transition to electric vehicles should enable workers to “make good wages and benefits to support their families” and that when union jobs were replaced with new jobs, they should go to union members and pay a “commensurate” wage. He is encouraging the companies and the union to keep bargaining and reach an agreement, one of Mr. Biden’s economic advisers, Jared Bernstein, told reporters on Wednesday.A strike could force Mr. Biden to be more explicit and choose between his commitment to workers and the need to broker a compromise that averts a costly long-term shutdown.“Battery workers need to be paid the same amount as U.A.W. workers at the current Big Three,” said Representative Ro Khanna, a Democrat from California who has promoted government investments in new technologies.Mr. Khanna added, “It’s how we contrast with Trump: We’re for creating good-paying manufacturing jobs across the Midwest.”At the heart of the debate is whether the shift to electric vehicles, which have fewer parts and generally require less labor to assemble than gas-powered cars, will accelerate the decline of unionized work in the industry.Foreign and domestic automakers have announced tens of thousands of new U.S.-based electric vehicle and battery jobs in response to the subsidies that Mr. Biden helped enact. But most of those jobs are not unionized, and many are in the South or West, where the U.A.W. has struggled to win over autoworkers. The union has tried and failed to organize workers at Tesla’s factory in Fremont, Calif., and Southern plants owned by Volkswagen and Nissan.A Ford Lightning plant in Dearborn, Mich. The U.A.W. worries that letting battery makers pay lower wages will allow G.M., Ford and Stellantis to replace much of their current U.S. work force with cheaper labor.Brittany Greeson for The New York TimesAs a result, the union has focused its efforts on battery workers employed directly or indirectly by G.M., Ford and Stellantis. The going wage for this work tends to be far below the roughly $32 an hour that veteran U.A.W. members make under their existing contracts with three companies.Legally, employees of the three manufacturers can’t strike over the pay of battery workers employed by joint ventures. But many U.A.W. members worry that letting battery manufacturers pay far lower wages will allow G.M., Ford and Stellantis to replace much of their current U.S. work force with cheaper labor, so they are seeking a large wage increase for those workers.“What we want is for the E.V. jobs to be U.A.W. jobs under our master agreements,” said Scott Houldieson, chairperson of Unite All Workers for Democracy, a group within the union that helped propel Mr. Fain to the presidency.The union’s officials have pressed the auto companies to address their concerns about battery workers before its members vote on a new contract. They say the companies can afford to pay more because they collectively earned about $250 billion in North America over the past decade, according to union estimates.But the auto companies, while acknowledging that they have been profitable in recent years, point out that the transition to electric vehicles is very expensive. Industry executives have suggested that it is hard to know how quickly consumers will embrace electric vehicles and that companies needed flexibility to adjust.Even if labor costs were not an issue, said Corey Cantor, an electric vehicle analyst at the energy research firm BloombergNEF, it could take the Big Three several years to catch up to Tesla, which makes about 60 percent of fully electric vehicles sold in the United States.A strike could force Mr. Biden to choose between his commitment to workers and the need to avert a costly shutdown of the U.S. auto industry.Bill Pugliano/Getty ImagesData from BloombergNEF show that G.M., Ford and Stellantis together sold fewer than 100,000 battery electric vehicles in the United States last year; in 2017, Tesla alone sold 50,000. It took Tesla another five years to top half a million U.S. sales. (The Big Three also sold nearly 80,000 plug-in hybrids last year.)The three established automakers had hoped to use the transition to electric cars to bring their costs more in line with their competitors, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a research firm. If they can’t, he added, they will have to look for savings elsewhere.In a statement, Stellantis said its battery joint venture “intends to offer very competitive wages and benefits while making the health and safety of its work force a top priority.”Estimates shared by Ford put hourly labor costs, including benefits, for the three automakers in the mid-$60s, versus the mid-$50s for foreign automakers in the United States and the mid-$40s for Tesla.Ford’s chief executive, Jim Farley, said in a statement last month that the company’s offer to raise pay in the next contract was “significantly better” than what Tesla and foreign automakers paid U.S. workers. He added that Ford “will not make a deal that endangers our ability to invest, grow and share profits with our employees.”Mr. Biden and Democratic lawmakers had sought to offset this labor-cost disadvantage by providing an additional $4,500 subsidy for each electric vehicle assembled at a unionized U.S. plant, above other incentives available to electric cars. But the Senate removed that provision from the Inflation Reduction Act.Such setbacks have frustrated the U.A.W., an early backer of Mr. Biden’s clean energy plans. In May, the union, which normally supports Democratic presidential candidates, withheld its endorsement of Mr. Biden’s re-election.“The E.V. transition is at serious risk of becoming a race to the bottom,” Mr. Fain said in an internal memo. “We want to see national leadership have our back on this before we make any commitments.”The next month, Mr. Fain chided the Biden administration for awarding Ford a $9.2 billion loan to build three battery factories in Tennessee and Kentucky with no inducement for the jobs to be unionized.A BMW battery plant in South Carolina. The U.A.W. has struggled to unionize autoworkers in the South.Juan Diego Reyes for The New York TimesMr. Biden tapped Mr. Sperling, a Michigan native, to serve as the White House point person on issues related to the union and the auto industry around the same time. By late August, the Energy Department announced that it was making $12 billion in grants and loans available for investments in electric vehicles, with a priority on automakers that create or maintain good jobs in areas with a union presence.Mr. Sperling speaks regularly with both sides in the labor dispute, seeking to defuse misunderstandings before they escalate, and said the recent Energy Department funding reflected Mr. Biden’s commitment to jump-start the industry while creating good jobs.Complicating the picture for Mr. Biden is the growing chorus of Democratic politicians and liberal groups that have backed the autoworkers’ demands, even as they hail the president’s success in improving pay and labor standards in other green industries, like wind and solar.Nearly 30 Democratic senators signed a letter to auto executives this summer urging them to bring battery workers into the union’s national contract. Dozens of labor and environmental groups have signed a letter echoing the demand.The groups argue that the change would have only a modest impact on automakers’ profits because labor accounts for a relatively small portion of overall costs, a claim that some independent experts back.Yen Chen, principal economist of the Center for Automotive Research, a nonprofit group in Ann Arbor, Mich., said labor accounted for only about 5 percent of the cost of final assembly for a midsize domestic sedan based on an analysis the group ran 10 years ago. Mr. Chen said that figure was likely to be lower today, and lower still for battery assembly, which is highly automated.Beyond the economic case, however, Mr. Biden’s allies say allowing electric vehicles to drive down auto wages would be a catastrophic political mistake. Workers at the three companies are concentrated in Midwestern states that could decide the next presidential election — and, as a result, the fate of the transition to clean energy, said Jason Walsh, the executive director of the BlueGreen Alliance, a coalition of unions and environmental groups.“The economic effects of doing that are enormously harmful,” he said. “The political consequences would be disastrous.” More

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    Biden Expands Effort to Lower Gas Prices and Secure Energy Independence

    Depleting emergency oil reserves spurs criticism that the White House is trying to lower gas prices with midterm election politics in mind.The president rejected the notion that the move to release more oil was politically motivated by the upcoming midterm elections.Haiyun Jiang/The New York TimesWASHINGTON — President Biden expanded his efforts on Wednesday to blunt the pain of rising gas prices and reduce America’s exposure to global energy markets, which have become more volatile because of provocative actions by Russia and Saudi Arabia.The administration announced $2.8 billion in grants to expand domestic manufacturing of batteries for electric vehicles and the electrical grid, one day after officials said that the United States would release millions of barrels of oil from the Strategic Petroleum Reserve and that Mr. Biden would consider additional withdrawals this winter.The moves highlight how energy security is now at the center of the Biden administration’s economic agenda, which has been derailed by soaring inflation and Russia’s war in Ukraine. Those concerns come at a perilous political moment, with midterm elections that will determine dynamics in Washington less than three weeks away.Mr. Biden’s decision to order the release of 15 million additional barrels of oil from the Strategic Petroleum Reserve is designed to address the immediate worry of rising gas prices, which was exacerbated further by Saudi Arabia’s recent decision, in concert with Russia, to cut oil production. In total, 180 million barrels of oil have been released since Mr. Biden authorized the use of the reserve in March.The Biden administration is prepared to dip further into its emergency supplies this winter, despite concerns that depleting the reserve could put the nation’s energy security at risk.“We’re calling it a ready and release plan,” Mr. Biden said on Wednesday. “This allows us to move quickly to prevent oil price spikes and respond to international events.”Mr. Biden has described the releases as a way to blunt the impact of Russia’s war in Ukraine while domestic energy producers ramp up production. There are about 400 million barrels remaining in the stockpile, which has the capacity to hold about 700 million barrels.The Biden PresidencyWith midterm elections approaching, here’s where President Biden stands.Storyteller in Chief: President Biden has been unable to break himself of the habit of spinning embellished narratives to weave a political identity.Diplomatic Limits: OPEC’s decision to curb oil production has exposed the failure of President Biden’s fist-bump diplomacy with the crown prince of Saudi Arabia.Defending Democracy: Mr. Biden’s drive to buttress democracy at home and abroad has taken on more urgency by the persistent power of China, Russia and former President Donald J. Trump.Questions About 2024: Mr. Biden has said he plans to run for a second term, but at 79, his age has become an uncomfortable issue.In remarks at the White House, Mr. Biden rebutted the notion that his administration had placed curbs on domestic oil production. Instead, he called on companies to expand production and said even if demand for oil slows in future years, they would be able to sell it back to the federal government to refill the Strategic Petroleum Reserve when oil prices decline to around $70 a barrel.The president also accused oil companies of profiteering and warned them not to gouge prices as Americans are grappling with inflation.“When the cost of oil comes down, we should see the price of the gas station at the pump come down as well,” he said. “My message to the American energy companies is, you should not be using your profits to buy back stock or for dividends. Not now. Not while a war is raging.”Separately on Wednesday, the White House announced that the Energy Department is awarding $2.8 billion of grants that were created as part of the infrastructure legislation passed earlier this year..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.The money will go to 20 companies in 12 states and will be used for projects related to the production of lithium, graphite and nickel that is used in batteries that power electric vehicles. One grant recipient, Talon Nickel, said it would use the $114 million it had been awarded to help set up a processing facility for battery materials in Mercer County, North Dakota.The North Dakota facility will process ore that the company plans to mine in Minnesota, one link in the first fully domestic supply chain for battery-grade nickel that Talon is building out in partnership with Tesla.While the Biden administration has stressed the importance of building up some domestic manufacturing of electric vehicle batteries, which is now heavily reliant on China, administration officials have also acknowledged the pollution risks in permitting new mines and processing facilities in the United States.Talon’s plan to build an underground mine to extract nickel from a water-rich area of northern Minnesota drew concerns from some in the area, including Ojibwe tribes who gather wild rice nearby.Todd Malan, the company’s chief external affairs officer, said the decision to locate the processing facility at an industrial site in North Dakota, instead of near the company’s proposed mine in Minnesota, was a “direct response” to those concerns. He said the company would create a “cemented containment facility” that would neutralize and contain waste from ore processing.“We hope that this is seen as a step toward addressing their concerns while still producing the necessary materials for the U.S. electric vehicle battery supply chain,” he said.Gene Berdichevsky, the co-founder and chief executive of Sila, a maker of battery materials, said the $100 million grant the company received would allow it to expand the size of a factory in Moses Lake, Wash.Sila’s technology substitutes silicon for graphite in electric vehicle batteries, making them smaller and lighter and reducing the need for materials imported from China. Mercedes-Benz, Sila’s first announced customer, plans to deploy the technology in sport utility vehicles that will be available for sale around the middle of the decade.During a manufacturing event at the White House with recipients of the grants, Mr. Biden described the race to make batteries in the United States as part of a broader economic contest with China. He noted that 75 percent of battery manufacturing is done in China and that the country controls nearly half of the global production of the contents of batteries.“China’s battery technology is not more innovative than anyone else,” Mr. Biden said. “By undercutting U.S. manufacturers with their unfair subsidies and trade practices, China seized a significant portion of the market. Today we’re stepping up, really, to take it back.”The grant funds, which could take years to yield results, are part of the Biden administration’s longer-term strategy to transition away from cars with combustion engines and reach a goal of making half of all new vehicles sold electric by 2030.But the use of the strategic oil reserves has fueled criticism that Mr. Biden is putting the nation’s near-term energy security at risk for political purposes.“The Strategic Petroleum Reserve was built for a national energy crisis — not for a Democrat election crisis,” said Senator John Barrasso, Republican of Wyoming. “Joe Biden is draining our emergency oil supply to a 40-year low.”Mr. Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, said the president’s “dismal approval rating is not a justifiable reason to continue to raid our nation’s oil reserves.”On Wednesday, Mr. Biden denied that he was releasing more oil with the midterm elections in mind.“It’s not politically motivated at all,” Mr. Biden said, explaining that he has been working for months to lower gas prices. “It’s motivated to make sure that I continue to push on what I’ve been pushing.”Jack Ewing More

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    How Sustainable Is the Rally in Renewable Energy Stocks?

    AdvertisementContinue reading the main storySupported byContinue reading the main storyHow Sustainable Is the Rally in Renewable Energy Stocks?Solar and wind power companies have soared in value. Are they in a bubble or in a virtuous upward cycle?Installing solar panels on a rooftop in Fort Greene, Brooklyn. Solar power is the cheapest source of electricity in many countries, according to the International Energy Agency.Credit…Karsten Moran for The New York TimesJan. 14, 2021Updated 1:50 p.m. ETThe overall stock market was fabulous last year, but as investors focused on climate change, renewable energy stocks did even better.Consider that while the SPDR S&P 500 Exchange-Traded Fund Trust, which tracks the benchmark S&P 500, returned 18.37 percent in 2020, the Invesco Solar E.T.F., which tracks an index of solar energy stocks, soared 233.95 percent, according to Morningstar Direct. The Invesco WilderHill E.T.F., which invests more broadly in alternative energy of various types, rose 204.83 percent.Returns like those are so strong that they are unlikely to be replicated: It is possible that the stocks of companies engaged in carbon-free energy production are already in a bubble. Jason Bloom, head of fixed income and alternative E.T.F.s for Invesco, describes the sector this way: “I would call it rational optimism in view of improving fundamentals.”The International Energy Agency recently called solar-generated energy the “cheapest” electricity source in many countries. In the United States, it accounts for just 3 percent of energy output, but it is increasing rapidly. Wind power, which now supplies roughly 8 percent of domestic energy, has also been growing. There is plenty of room for expansion for many renewable energy companies.The results of the presidential election have already bolstered the returns of these companies, too. While President Trump has promoted the use of fossil fuels like coal, President-elect Joseph R. Biden Jr. has advocated a $2 trillion climate plan to “achieve a carbon pollution-free power sector by 2035.” His plan, not yet fully detailed, includes a variety of investment inducements and tax breaks.That would be more ambitious than the once-trendsetting 2045 goal of carbon-free energy production set by California. Already, solar power accounts for 18 percent of electricity generation at the utility Southern California Edison, said Erica Bowman, the company’s director of resource and environmental planning and strategy.Garvin Jabusch, chief investment officer for Green Alpha Advisors, an alternative energy investor, notes that the cost of generating electricity from solar energy is 90 percent lower than 10 years ago. Mr. Jabusch expects alternative energy prices to decline further with expanded demand. Mr. Jabusch favors companies that are “growing production capacity,” like First Solar, which has opened a new plant in Lake Township, Ohio, to expand production of its solar panels.For all its promise, investment in solar and wind power is limited by the laws of nature: Solar units can produce electricity only when the sun is shining, and wind turbines need wind.For the most part, Southern California Edison backs up its solar power with electricity generated by natural gas. But the utility recently contracted for nearly 600 megawatts of lithium ion battery storage so it can store excess electricity produced under ideal weather conditions.“Battery prices are down 90 percent over the last five to eight years,” Ms. Bowman said. “As we transition to a cleaner grid, solar generation coupled with battery storage is the cost-effective solution for California,” she added.Hydrogen fuel cells, which produce electricity by combining hydrogen and oxygen, have emerged as a possible near-term solution for use in trucking and shipping, says Mr. Bloom. But such applications will require a costly expansion of the hydrogen gas filling station network, said Steve Capanna, director of U.S. climate policy and analysis for the Environmental Defense Fund. Right now, he said, beyond “a handful in California,” there aren’t many such stations.Buying shares of renewable energy stocks now requires a degree of faith, because they are so expensive, partly because of the low interest rates engineered by the Federal Reserve, which have helped to drive the overall stock market higher. Fed support may be the biggest reason the market has withstood all the grim economic news of the coronavirus to continue its seemingly unending valuation advance.Paul Coster, a JPMorgan analyst, said that the high prices in the renewables sector are based on solid achievement. “It’s not like the dot-com era,” he said. “These are real actors with real technology.” He added, “We’re living in this wonderful moment in time when virtue and self-interest coincide.”Perhaps, Mr. Coster mused, there are still good reasons to own some of these stocks. He cited FuelCell Energy, which has negative cash flow and has consistently reported quarterly earnings losses. Mr. Coster said investors may want to project out several years.By 2025, he said, it’s “feasible” that FuelCell Energy would have $60 million in earnings before interest, taxes, depreciation and amortization, justifying a rich, growth stock valuation. Even so, the company’s shares more than doubled in the last month, and on Jan. 14, Mr. Coster warned that at current prices, the stock was already “richly valued.”AdvertisementContinue reading the main story More