Kokomo, Indiana
CNN
—
Normally a new $2.5 billion plant, complete with 1,400 expected jobs, would be considered good for a local economy.
But not the battery factory in Kokomo, Indiana.
“It's a slap in the face,” said Gary Quirk, president of United Auto Workers Local 685.
This is because the plant will make large batteries for electric vehicles. The plant is built by a joint venture between Stellantis, the automaker that makes vehicles under the Jeep, Ram, Dodge and Chrysler brands, and Samsung. UAW Local 685 represents four plants Stellantis already operates in the city: three that make transmissions, one that makes engines.
The concerns of Quirk and his fellow union members epitomize a larger battle in the U.S. auto industry: Electric vehicles simply take less work to build. As automakers move to electric lines, then, many of the union's well-paying jobs making engines and other parts could disappear.
That fight is playing out in the Midwest now, as the current UAW contract with the big three unionized automakers — General Motors, Ford and Stellantis — expires at 11:59 p.m. Thursday.
Adam Nelson/Stelantis
The first piece of steel for Stellantis and Samsung's joint venture EV battery plant goes up early this year.
The union is demanding job protections among its ambitious bargaining goals. It says it is ready to have its 145,000 members across the three companies go on strike as early as Friday if he cannot reach an agreement with the companies.
Another local UAW hall in town, the one representing workers at a Stellantis casting plant also in Kokomo, is located directly across the street from the new battery plant. This native was once his home Shawn Fainnow the president of the UAW and the one leading negotiations with automakers that could lead to a strike later this week.
“It's our backyard,” said Denny Butler, vice president of Local 685. “It's ironic.”
The planned conversion to electric vehicles will mean upheaval and job losses for some employees who have worked in car factories, often for generations. EVs need neither gas engines nor gearboxes.
Jobs in Kokomo are among the most at risk.
Chris Isidore/CNN
The EV battery plant made by Stellantis and Samsung in Kokomo, in the background, is directly across the street from one of the United Auto Workers unions in the city where current unionized plants could be threatened by the shift to EVs.
Kokomo is an industrial island in a seat of verdant farms in north-central Indiana, between Indianapolis and South Bend. These four Stellantis factories employ 4,500 hourly workers and another 600 salaried employees, or better than one in seven nonfarm jobs in the city and surrounding area.
But now Stellantis, Ford and GM are planning future all-electric contracts that will likely require fewer workers to build the same number of vehicles.
“We know we're on borrowed time,” said Todd Dunsmore, who has worked at Stellantis for seven years. How does he feel about the transition to EVs? “I know it will hurt Kokomo.”
But some other members of Dunsmore's local UAW aren't so convinced that EVs pose an existential threat to gas-powered vehicles and their jobs. Many believe the company will decide to do other work at the Kokomo plants, even if it no longer needs transmissions or engines. And many in the association's Kokomo offices simply doubt that EVs will account for most, let alone all, of the market.
Philip Kline has worked at one of the transportation plants in town for 27 years. His father worked there for 30 years. He doesn't believe there is real public demand for electric vehicles.
Daniel Acker/Bloomberg/Getty Images
Workers pull carts carrying transmission parts at a transmission plant in Kokomo.
“What worries me is that (President Joe) Biden is in a hurry,” he said.
This is a common fear, even among those who do not believe in EVs – that the car industry will be forced to switch to EVs, regardless of whether there is demand for them from car buyers.
“I don't think the world is ready for EVs, to be honest with you,” Quirk said. “The politicians may be ready, but I don't think the people are.”
“It sounds really good on paper. But the infrastructure isn't built to handle it,” Butler said. “You can spend more time charging the car or trying to find a charger than on the road.”
While EV sales are still only a fraction of vehicle sales, automakers are seeing growing public demand for electric vehicles — and the need to comply with increasingly stringent environmental regulations around the world.
Even with their doubts, Kline, Quirk and Butler are nervous.
“If push comes to shove, if there are layoffs because of EVs, the bottom line is we have nowhere to go,” Quirk said.
The Kokomo battery plant is still more than a year away from starting production. While he has started to hire some employees, he does not yet have the workers who will be on the floor to build the batteries.
The workers will not be employees of Stellantis but employees of a separate company, the union says. Senior UAW members at Stellantis, General Motors and Ford earn $32.32 an hour. Workers at the battery plant are likely to start at half that, Quirk said.
“It's a fraction of what we make. Let's face it, it's not a sustainable wage,” he said.
The three consolidated US automakers build EV battery factories. There is a plant open, one Joint venture factory in Ohio between GM and LG, and nine more plants planned or under construction.
In all cases the factories are joint ventures with foreign battery manufacturers. This means that these workers they will not be employed by the auto companies themselves — and therefore, will not be unions, unless they are organized.
The UAW said it does not oppose plans to shift to EVs, even though, by some estimates, it could mean a 30 percent job cut because EVs have fewer moving parts and require less labor to build.
But the union says it must be a “just transition” to EVs with good-paying, unionized jobs for those losing their jobs due to the conversion. He says EV plans are having those conversations “The defining moment of our generation.”
It will be difficult for the union to win UAW-level wages at the battery plants. Workers at the first plant to open in Ohio voted to join the UAW in December, and the union just won more than a 20 percent pay raise there. Even with the increase in wages, this is still a fraction of what unionized factory workers get. Ohio workers will now receive a starting wage of $20.50 an hour, up from the previous starting wage of $16.50 an hour. Even the top wage will be nearly 30% below the maximum wage in a UAW plant today, let alone what it could be in the upcoming contract.
But getting significantly higher wages for battery factory workers in the Big Three may not be enough: The three unionized U.S. automakers aren't the only ones rushing to build battery factories. Another dozen are planned or under construction to serve the non-union foreign automakers that now make most of the cars and trucks made in North America. Many are lower wage, mostly non-union southern states.
In Kokomo, UAW members are preparing for a strike many are confident will begin this week. Dunsmore was in the union hall on a recent Wednesday afternoon to sign up for ladder service at one of the city's factories.
“I've been planning this for a year,” he said.
