The Biden administration’s goal of achieving 50% of EV sales over the next six years may simply eliminate jobs for those the federal government relies on to fulfill its purpose: meeting with workers.
The United Auto Workers strike won wage and benefit increases last year and projected a strong 2024 for staff at the “Big Three” automakers. However, since late 2023, workers at General Motors and Ford factories have been laid off as companies begin to reduce EV production due to a steady decline in demand.
In December, General Motors told nearly 1,000 workers at the Orion plant in Michigan that they would be laid off until 2025 to make engineering improvements during a period of declining interest in electric vehicles. Thousands of GM workers were slated to begin work on the electric Chevy Silverado pickup truck, and now they are waiting to find out if they are going to have a new job.
“It was a very dark time here last month,” a laid-off GM Orion plant worker told NBC News in an interview. “We thought that, despite everything, we had a little respite. Steps were supposed to be taken for at most a year to restructure, and now GM is reviewing the EV market. I don’t think the economy is suffering, I think the auto industry is suffering. In my opinion, they put the carriage before the horses.
As EV sales continue to rise, demand has slowed from its strong speed in 2021 and 2022, prompting several automakers, including Ford and Tesla, to take a step back and forecast a slowdown in sales. It plans to manufacture electric cars or build new electric vehicle production plants.
Ford’s earnings projections recently predicted that taking a step away from EV production could cause their profits to soar by 50%. Electric vehicles lost $4.7 billion last year, with the company anticipating the losses to deepen to between $5 billion and $5.5 billion in 2024. In January, the company said it would cut back on production of its F-150 Lightning, eliminating 1,400 workers from the production line in Dearborn, Michigan. Many of the workers would be offered early retirement, reassigned to a different role at the same complex, or transferred to a different gas-powered plant.
The moves came after Ford also scaled back its investments in the fall of last year. The automaker halted a $3. 5 billion investment in an electric vehicle battery plant in Michigan in November, saying it plans to open in 2026, but after “reprogramming and resizing. “some investments. ” It also announced in October that it would reduce electric vehicle prices by about $12 billion and postpone the allocation of a battery plant in Kentucky.
“At the end of the day, it’s all about demanding, and fair demand rarely lives up to what all those CEOs were thinking. So, a lot of the initial approvals that GM or Ford put in place a few years ago would possibly have turned out to be too positive and probably too aggressive,” Gabe Daoud, senior sustainability analyst at TD Cowen, told NBC News. “I think everyone expected the whole fleet to be replaced overnight and go electric, but that’s obviously fair. and impractical. “
Hundreds of employees have also been laid off at electric vehicle battery factories in spaces such as Michigan, Georgia and California. Albemarle, a North Carolina-based company that supplies lithium to battery makers, said in January that it was cutting an unspecified number of jobs because the converting market demands electric vehicles.
Biden, who has proclaimed himself “the most unionist president in American history,” has long been caught between a rock and a hard place when it comes to electric cars, not least because he was waiting for the government’s much-needed approval. UAW. Array what the organization maintained in the strike negotiations. The UAW supported the president’s re-election crusade in January.
UAW President Shawn Fain dismissed any concerns the union had about Biden’s EV mandate, saying he was “not afraid” of the direction the industry was taking and has always been “at the forefront of environmental and operational elegance issues. “”However, given the mass layoffs and workers’ growing uncertainty about the fate of their jobs, it is conceivable that the union president’s assessment does not reflect the mindset of rank-and-file union workers.
Workers at the Orion plant were expected to be laid off for a significant portion of 2024 as the plant shifted production of the new electric Silverado, but many were left off guard by the fact that layoffs would ramp up through 2025. This happened after the governor. Gretchen Whitmer (D-MI) and GM officials announced in 2022 the company’s plan to spend $4 billion to expand and renovate the Orion plant to put it into production at the Silverado.
“It’s very devastating, not only for our workers, but also for the entire local network,” the factory employee said. “Things were going well, the others were happy. We only get help from the municipality and all that money came from the state, and then they do it.
Although GM said the staff would be relocated, the plant employee said the transition to a new assignment at a new plant could simply put even more strain on staff who were already driving long hours to get to Orion and may not have to make a longer commute due to circle of family or children. Duty of care.
Companies have invested billions of dollars in the electric vehicle industry, led by the Biden administration. Demand for electric cars has continued to grow, with a record 1. 2 million cars sold last year, and 317,000 electric cars sold in the fourth quarter of 2023 alone. According to Cox Automotive Inc. However, the speed of expansion is slowing. has slowed in recent years, while the US auto industry grew 70% year-over-year in 2021 and 80% year-over-year in 2022.
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Many industry analysts say the slowdown in demand is due to the high value of electric cars and the lack of sustainable charging stations. In early January, the Biden administration announced $623 million in grants for new EV chargers across the country. Consumer concerns about the viability of buying and maintaining an electric vehicle continue to reduce demand for cars and employee employment.
“I think what we’re seeing is a trend of substitution of the temporary way that other people are willing to buy electric cars right now because they’re expensive and there are considerations about charging infrastructure,” said Alan Amici, executive director of the Center for Automotive Research. to NBC News. Si you’re an effective automaker, you’re looking to match your production to demand. There’s no point in filling a garage with electric cars being sold.