Growth in Electric Vehicle Manufacturing: A Factor in the 2023 United Auto Workers (UAW) Negotiations

INSIGHTi

Growth in Electric Vehicle Manufacturing: A

Factor in the 2023 United Auto Workers

(UAW) Negotiations

November 16, 2023

The United Auto Workers (UAW) began a strike against the “Big Three” automakers—General Motors

(GM), Ford, and Stellantis—on September 15, 2023, following unsuccessful negotiations among the

parties. UAW’s existing national agreements with each automaker ended on September 14, 2023, at

midnight. The 2023 UAW strike is unprecedented in that the labor union acted against all three

automakers at once. UAW represents approximately 146,000 hourly workers at the Big Three’s U.S.

factories. According to the U.S. Department of Labor, the U.S. auto sector employs 1 million workers.

The current shift in auto industry production toward electric vehicles (EVs) was among several factors

that permeated the dialogue between the Big Three and UAW during the 2023 negotiations.

Future Growth of EV Manufacturing: Impact on UAW Negotiations

As EV production increases, conventional vehicle production may decrease, with potential future job

losses resulting from shutdowns of production lines that manufacture internal combustion engine and

transmission components. The number of workers in the auto manufacturing sector could fall as EV

production and sales grow, or higher wage assembly labor might be replaced with lower wage batteryrelated jobs. For example, upon commencement of production in 2022, employees at GM’s Ultium

battery joint venture started at $15.50 an hour, half the top wage at assembly plants.

Given recent growth in EV production, UAW sought to include both current and future EV workers in

each of the national agreements negotiated with the Big Three. On October 6, 2023, UAW did not expand

work stoppages beyond 25,200 workers already on strike, citing closed-door progress in the negotiations,

in particular with GM agreeing to include battery cell workers under the company’s national agreement.

UAW delegates approved an agreement with Ford on October 25, 2023, which included, among other

things, reported commitments from the automaker to expand UAW participation at Ford EV plants.

Stellantis reached a tentative contract agreement with UAW on October 28, 2023, with the automaker also

committing to reopen a long-idled battery plant. Finally, GM reached a tentative agreement with UAW on

October 30, 2023. UAW has not ratified these agreements.

Congressional Research Service

https://crsreports.congress.gov

IN12279

CRS INSIGHT

Prepared for Members and

Committees of Congress

Congressional Research Service

2

Federal Incentives for EV Manufacturing

According to 2023 estimates from Kelley Blue Book, total new vehicle sales decreased approximately 1.2

million units, while battery electric vehicles grew approximately 300,000 units over the same period.

In the legislation known as the Inflation Reduction Act of 2022 (IRA; P.L. 117-169), Section

13401 authorized “clean vehicle” credits, which provide tax incentives for consumers to buy

EVs. Section 13401 provisions require qualifying vehicles to have final assembly in North America,

and qualifying vehicles must not include battery components (after 2023) from foreign entities of

concern. GM and Ford have created joint ventures (JVs) with foreign battery suppliers to build

batteries in the United States and use American labor.

Direct federal assistance for manufacturing has been available to develop new EV battery facilities. The

Department of Energy’s (DOE’s) Advanced Technology Vehicles Manufacturing (ATVM) program,

which provides financial support to manufacturers and suppliers in retrofitting plants to make more fuel

efficient vehicles, has provided loans since 2007. The IRA established the DOE Domestic Manufacturing

Conversion Program with $2 billion of appropriated funds to provide federal cost-share grants for

domestic EV production.

GM’s Ultium JV facilities were constructed with the help of a $2.5 billion loan through the ATVM

program in 2022. On June 22, 2023, DOE conditionally offered a $9.2 billion ATVM loan to Ford’s

battery JV Blue Oval SK.

UAW Concerns About EV Manufacturing

UAW was critical of the lack of attached wage protections for factory workers in federal EV

manufacturing programs. ATVM loans require that borrowers implement prevailing wage protections for

construction workers building new factories only. The Biden Administration announced on August 31,

2023, that the Domestic Manufacturing Conversion Program would include grant criteria giving

preference to “projects that are likely to retain collective bargaining agreements.”

Whether growth of EVs will cause long-term reductions of workers in auto manufacturing or shift labor

composition from high wage to low wage jobs is uncertain. Ford CEO Jim Farley reportedly stated, “It

takes 40 per cent less labor to make an electric car, so . . . we have to insource, so that everyone has a role

in this growth.” However, some preliminary analyses show that labor contribution to auto production at a

subsystem level might remain the same or even increase with EVs. Lastly, other factors may influence

longer-term employment patterns in auto manufacturing. Lower than anticipated production volumes,

higher worker productivity, or some combination thereof, might have an effect in reducing overall

numbers of auto workers or changing the labor mix between higher and lower wage categories.

Author Information

Steven H. Bayless

Analyst in Transportation and Industry

Congressional Research Service

3

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff

to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of

Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of

information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.

CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United

States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,

as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the

permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN12279 · VERSION 1 · NEW