Clash coming for Detroit's Big 3 as UAW gears up for contentious negotiations
Then there is the issue of powertrain production. At GM, an Ultium battery plant has taken the place ofAssembly, which closed after the 40-day strike in 2019. The labor force there is not UAW-represented. Ford is building a new EV campus in Tennessee, which is also not yet unionized.
As the industry moves away from historically unionized engine production and toward new battery plants that have not yet been unionized, the topic of job security will be at the forefront of EV talks.The cost of labor only accounts for roughly 5% of the cost of building a vehicle, but it's the only part of vehicle production costs that companies can exert control over.
While it's unlikely that the companies will be able to bring these costs down, they will be looking for ways to keep them from going up too much. However, some estimates based on what the UAW has won outside the automotive industry in the last four years put potential increases in labor costs between 25% and 30% over the next four years.
Negotiations formally began at all three companies last week. The current contracts are set to expire September 14.
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