Electric vehicle jobs are booming in the anti-union South. The UAW is concerned

New York
CNN
—

Distinguished above the United Auto Workers strike: Continued migration of automakers to the anti-union South.

Beginning in the 1970s and 1980s, the auto industry began to shift to the South, a region long characterized by hostility to labor unions and low wages.

Since then, the assembly lines of the UAW's highest-paid workers in Detroit's Big Three – Ford, General Motors and Stellantis – have shrunk. And automakers like Volvo, Mercedes-Benz, BMW, Toyota and Hyundai have been steadily hiring non-union auto workers, who make less money for essentially the same work, in the South.

“The auto industry's move south hangs on these talks because now only a minority of workers are in unionized assembly plants,” said Stephen Silvia, a professor at American University and author of “The UAW's Southern Gamble: Organizing Workers at Foreign- Owned Vehicle Plants. .” While all Big Three plants are unionized, not a single plant in the South is unionized.

Automakers' transition to electric vehicles is accelerating these regional trends. Ford and GM build battery plants below the Mason-Dixon line, where states have laws that make unionization much more difficult than in the traditional working-class bastions of the Midwest.

UAW leaders and union advocates are concerned that the change will reduce compensation and cut unions out of the future of the auto industry, and are seeking to address those concerns in talks with the Big Three.

Of almost equal concern to the UAW is that EVs require fewer parts and thus less labor to assemble than gas-powered cars. Jobs at non-unionized EV battery facilities pay less than the roughly $32 an hour veteran UAW workers make.

“The balance is shifting in favor of Southeast Europe over the Midwest,” S&P Global Market Intelligence said in a recent report in jobs in the automotive industry. “The South is poised to take a larger share of U.S. vehicle production in the coming years.”

Detroit was the heart of the US auto industry for most of the 20th century, but the South seems to be bigger than the 1970s.

Lured by tax incentives, lower wages and land costs, and an anti-union political climate, foreign automakers built factories in the South, which previously had little automobile presence.

Nissan opened a plant in Smyrna, Tennessee in 1983. BMW opened in Spartanburg, South Carolina in 1994. Mercedes-Benz came to Vance, Alabama in 1997. Honda moved to Lincoln, Alabama in 2001. Volkswagen, Toyota, and the Kia built factories in the South in the 2000s.

“Nearly every foreign auto plant that has opened since the 1990s has sprung up below the Mason-Dixon line,” CNN mentionted in 2007. The trend has continued ever since.

As the Big Three shrank into much smaller versions of themselves, losing large amounts of market share to foreign graft, the UAW shrank with it.

UAW membership peaked in 1979 at 1.5 million, according to the union. Last year, it had 383,000 auto workers.

The UAW, with its stronghold in the union-friendly Midwest and northern states, struggled to unionize autoworkers in the South decades after foreign auto plants had grown in the region.

“It's been a huge limitation for the UAW, and they're trying to get out of it,” said Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara and author of “Fabulous Failure: The Clinton Presidency and the Transformation.” of American Capitalism,” published this year.

The UAW initially encouraged Japanese and Korean auto manufacturers to enter the United States, believing it could unionize factories in the South. But he has met with anti-union labor laws, such as so-called right-to-work laws that allow workers to opt out of paying union dues even if they benefit from a union bargaining agreement, and Southern Republican leaders are determined to block unions, Lichtenstein said.

The union has tried and failed repeatedly to gain ground at Nissan and Volkswagen in Tennessee, Toyota in Kentucky, Mercedes-Benz in Alabama and other foreign-owned plants in the South. Tennessee Governor Bill Lee in 2019 even visited the Volkswagen plant in Chattanooga to encourage workers to reject the union. Former South Carolina Gov. Nikki Haley, now a candidate for president, he said in 2015 he was a “unionist” when he recruited auto manufacturers in the state.

Since 1990, the South's share of auto jobs has doubled from about 15 percent to 30 percent today, according to S&P Global Market Intelligence.

Meanwhile, the Midwest's share fell from 60% to 45%.

The transition to electric vehicles is poised to accelerate this trend. Mostly non-union EV jobs and manufacturing investment grow in Republican-led southern states.

Automakers have announced about $83 billion in EV investments and 95,000 jobs in five southern states – Georgia, Tennessee, South Carolina, Kentucky and North Carolina – since 2015, according to a recent report from the Environmental Defense Fund, far exceeding planned investments for electric vehicles and job creation in the Midwest.

Georgia attracted three of the top six projects by planned investment and the top two by planned jobs. The South has garnered 66% of planned electric vehicle jobs, while projects in Midwestern states such as Michigan, Indiana, Kansas and Ohio have combined for 26% of planned jobs, according to S&P Global .

The Big Three and other auto companies are also accelerating EV investment in the South with joint venture agreements with foreign battery makers. These joint venture agreements are not covered by UAW contracts.

This has been a sticking point in negotiations between the UAW and the big three automakers. Ford, for example, has already poured billions into battery plants in Kentucky and Tennessee that will produce EV and truck batteries.

And as automakers receive government loans and subsidies to build these plants in the South, the UAW wants the Biden administration and federal agencies to impose conditions on those loans that would make it easier to unionize the plants. The UAW has so far refused to support Biden's 2024 re-election bid, in part to pressure his administration for what the union calls a “just transition” to EVs.

“The transition to EVs must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won,” UAW President Shawn Fain said recently.