The autoworkers' strike continues to pick up momentum, with the UAW threatening to expand its strike if talks don't start to progress. Part of the issue for autoworkers is the shift to EVs. EVs have fewer moving parts and, as a result, could take fewer workers to build them. Yahoo Finance's Senior Columnist Rick Newman explains why EVs are central to negotiations, what this means for the Big Three - Ford (F) , General Motors (GM), and Stellantis (STLA) - and how President Biden fits into it all.
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BRAD SMITH: The United Auto Workers Union says that they will expand their strike to additional auto plants if progress isn't made by Friday. This strike has made headlines over the past few days, and at first glance, the fight is simply over better pay and benefits for auto workers. But Yahoo Finance's Rick Newman thinks it's worth keeping eyes on EVs and that on your radar, a shift that could completely change the auto landscape as workers know it. Rick joins us now with more here. Rick, take it away.
RICK NEWMAN: Yeah. Electric vehicles are a major factor in the dispute between the labor union UAW and the three Detroit automakers for a couple of reasons. Obviously, much of the automotive industry is shifting away from gas-powered cars to electric vehicles, and EVs actually require fewer workers to build because there are fewer moving parts about 30% fewer workers, and the UAW is clearly paying attention to that.
Another factor is that since batteries are such a big component of EVs, that is a big chunk of the manufacturing for electric vehicles and many of the battery plants that automakers are building in that battery belt that stretches from the Upper Midwest all the way down to the South, many of those are joint ventures with other companies, including some foreign companies that are not unionized.
So the UAW sees two things happening-- the need for workers declining and a bigger chunk of auto manufacturing going over to non-union unionized workers. And I think that is where this demand for a 32-hour workweek is coming from on the UAW side. So they're saying, OK, we realize that EVs will require fewer workers, but instead of actually employing fewer workers, why don't you employ the same number of workers and just cut back on hours so we can all equal-- earn a full week's paycheck with just four days of work per week?
No idea how that's going to shake out. But it is really shaping these negotiations. And I don't think it's a question of whether EVs will remain available for consumers, I think it's a question of whether the three Detroit automakers will be competitive in the market for EVs, because they are going to face higher costs than Tesla and other companies that are not building these with unionized workers.
- And Rick, how problematic could this potentially be for President Biden, right? We talk about the fact that he obviously has been very pro-union. Now you have the UAW pushing back on some of his policies. What does that then mean for President Biden heading into the election year?
RICK NEWMAN: He's facing conflicting priorities here. So Biden clearly a huge fan and a champion of electric vehicles, he signed the big green energy bill last year that has literally billions-- hundreds of billions of dollars in subsidies for green energy, including electric vehicles. So he wants that transition to happen as fast as possible. To some extent, the unionized workers are standing in the way of that agenda.
Now, Biden, of course, also calls himself the most pro-union president in American history, and he has come out with a sort of a tepid amount of support for the striking workers there. Some Democrats are saying Biden needs to go to a picket line. He needs to show up in UAW land and express solidarity with the striking workers by hanging out with them for a little bit doing some photo ops, and stuff like that.
I'm not sure that would be the best move because he also is relying on the three companies-- Stellantis, Ford, and General Motors-- to be the ones who push his green energy agenda forward, including the union jobs that he says are essential to the green energy transition. So I think Biden is probably hoping that both sides can negotiate-- can solve this problem without him having to get more deeply involved. I'm just not sure that's realistic.