The United Auto Workers, in some key aspects, have the wind at their back in their negotiations with the Big Three, thanks to a historically tight labor market and record corporate profits.
But a long-term challenge hangs over the unionized workforce that has historically shaped the American auto industry: The union-averse South is open for business.
For decades, foreign automakers including Volvo, Mercedes-Benz, BMW, Toyota and Hyundai have been ramping up production in the American South, where wages are lower and labor support is scant, my colleague Nathaniel Meyersohn writes.
That migration has made the UAW ranks a minority. And even though all of the Detroit Big Three's plants are unionized, not a single plant in the South is.
See here: Over the past three decades, the South's share of auto jobs has doubled, from 15% to 30%, according to S&P Global Market Intelligence.
The Midwest's share fell from 60% to 45%, over the same period.
Foreign automakers have been particularly keen on the South, where tax incentives, cheaper land and anti-union politics are a draw.
As foreign companies moved in, the UAW initially encouraged it, thinking it could get a foothold at southern-based plants run by Nissan, Volkswagen and others. But the UAW repeatedly ran into opposition from Republicans bent on disrupting labor organizers, as well as so-called right-to-work laws, which undermine collective bargaining efforts.
The shift to electric vehicles is only accelerating the migration.
Since 2015, automakers have announced plans for $83 billion in EV investments and 95,000 jobs in five southern states: Georgia, Tennessee, South Carolina, Kentucky and North Carolina, according to a recent report by the Environmental Defense Fund.
Even the Big Three are funneling investments to the South with joint-venture agreements with foreign EV battery makers. Those jobs, of course, are not covered by UAW contracts and pay far less.
That has been a major sticking point in the latest negotiations.
The companies are benefiting from huge government loans and subsidies to build these plants in the South, and the UAW wants the Biden administration and federal agencies to impose stipulations on those loans that would make it easier to unionize the plants.
The union, which represents 400,000 members, has a fair bit of political leverage on that front. So far, the UAW has declined to endorse Biden's re-election as it pushes for a "just transition" to EVs.
"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," UAW President Shawn Fain said.
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