The United Auto Workers on Thursday cheered the U.S. Energy Department’s announcement that it will offer $15.5 billion in grants and loans to support a “just transition” to electric vehicles by rewarding investment projects with unionized or highly paid workforces, according to a news release.
The funding package derived from the legislation known as the Inflation Reduction Act focuses on supporting the retooling of existing factories for EVs. It includes $2 billion in grants and up to $10 billion in loans for the conversion projects. The department also issued a notice of intent under the Bipartisan Infrastructure Law to make $3.5 billion available for the expansion of domestic battery manufacturing for EVs and energy storage.
In the Domestic Conversion Grant Program, “higher scores will be given to projects that are likely to retain collective bargaining agreements and/or those that have an existing high-quality, high-wage hourly production workforce, such as applicants that currently pay top quartile wages in their industry,” according to an Energy Department news release.
Although President Joe Biden has championed himself as the “most pro-union president,” UAW President Shawn Fain has criticized his administration for funding incentives to boost the EV industry without tying it to wages and benefits of workers. The union that represents roughly 1 million active and retiree members hasn’t endorsed the Democrat for reelection, despite his broad support from organized labor going into the 2024 campaign.
“The UAW supports and is ready for the transition to a clean auto industry,” Fain said in a statement Thursday. “But the EV transition must be a just transition that ensures auto workers have a place in the new economy. Today’s announcement from the Department of Energy echoes the UAW’s call for strong labor standards tied to all taxpayer funding that goes to auto and manufacturing companies.
“We are glad to see the Biden Administration doing its part to reject the false choice between a good job and a green job. This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.”
A focal point in Fain’s previous criticism was Ultium Cells LLC, the joint venture between General Motors Co. and Korean battery manufacturer LG Energy Solution. The UAW organized Ultium’s EV battery plant in Warren, Ohio, where workers were starting at $16.50 per hour and could make up to $20 per hour after seven years. The top rate at the Detroit automakers is $32.32.
The plant’s workers on Sunday ratified an agreement to increase wages so that production operators would start at $20 and go up to $21 after six months or 1,000 hours worked.
“Today’s announcements,” Energy Secretary Jennifer Granholm said in a statement, “show that President Biden understands that building the cars of the future also necessitates helping the communities challenged by the transition away from the internal combustion engine.”
The legislation behind the grants and loans seeks to encourage domestic manufacturing in the transition to EV production, where China controls much of the supply chain.
“To keep America a global leader in EVs and manufacturing, we must ensure electric vehicles, their batteries, all their components, and their infrastructure are built here at home,” Rep. Debbie Dingell, D-Ann Arbor, who authored the grant program, said in a statement. “This funding will support our auto workers and strengthen our domestic auto industry in the transition to electric vehicles, and make sure we’re maintaining strong labor standards and investing in the communities that have long been supported by auto jobs.”
Added Rep. Dan Kildee, D-Flint Township, in a statement: “Today’s announcement shows that the Biden administration is committed to creating good-paying union jobs here, not China. … With these new efforts, Michigan will continue to lead the way and put the world on wheels.”
bnoble@detroitnews.com
Twitter: @BreanaCNoble