The ongoing socio-ecological conflict in the American auto industry foreshadows countless other conflicts surrounding the transition

“The ongoing socio-ecological conflict in the American auto industry foreshadows countless other conflicts surrounding the transition”

Lucas Chancel

Op-Ed published in Le Monde on October 14, 2023 (initial text in French, translation provided below)

While the French President’s love declaration for the “bagnole” (colloquial term for “car”) is making headlines in France, a historic social movement is taking place in the United States within the automobile industry. At stake is the future of this industry, and consequently, the fate of the energy transition across the Atlantic.

Because the question posed by the strikers of the United Auto Workers (UAW) union can be summarized as follows: how should wealth be shared in the sectors undergoing an ecological transition?

The American transportation sector alone emits 1.6 gigatonnes of carbon dioxide per year, more than the total emissions from France and Germany combined, across all sectors. Although emissions per kilometer traveled have decreased since the 1970s, the distances traveled have grown more, resulting in a 50% increase in the sector’s emissions over fifty years. The weight of cars has also increased, by nearly a quarter since 1980, with SUVs [sport utility vehicle] that can weigh up to 2.5 tonnes today.

Increases of 40% over four years

Clearly, the electrification of the American car fleet will not be enough to resolve the ecological crisis, and the lack of comprehensive reform to reduce American dependency on cars is regrettable. In the United States, even more so than in Europe, a rationalization of uses and a shock expansion of public transport are necessary.

But it must be acknowledged that electrification is a necessary condition for the American, and therefore global, energy transition. It is in this context that UAW unionists are entering their fifth week of targeted and simultaneous strikes against the three major auto manufacturers: Ford, General Motors, and Stellantis – a first in the history of American unionism. The unionists’ stance is clear: electrification cannot benefit shareholders at the expense of workers. The t-shirt worn by union leader Shawn Fain at a conference is a testament to clarity: “Eat the rich.”

The union, with its 390,000 members and nearly 600,000 former members, is calling for an end to a two-tier system of pay and social benefits, where workers who joined after the 2008 financial crisis are paid almost half compared to those who arrived earlier. The unions are also demanding wage increases for workers, of around 40% over four years.

In early September, the three firms offered wage increases of 10% to 15% over four years and stated they could not go further. Their argument is as follows: the transition to electric is costing them billions in investments, which will continue in the coming years. Under these conditions, a social turnaround is impossible. These proposals were deemed “insulting” by the unions.

Discrepancy between capital and labor

Let’s recall the context: the average hourly wage, adjusted for inflation, has stagnated over ten years in the American auto industry, and workers’ purchasing power along with it. During the same period, the three major automotive groups each recorded net profits of more than 50 billion dollars cumulatively (about 47.25 billion euros). Consequently, their shareholders have enjoyed considerable dividends, fueling the rise in American wealth inequalities.

This discrepancy between capital and labor seems unacceptable to workers, who also point to the situation of executives. Indeed, the latter continue to receive exceptional remunerations, amounting in 2022 to between 20 and 30 million dollars each (in salary and shares), or 350 to 500 times the average salary in the sector.

In this tense social and political context, Joe Biden is taking a big gamble. Can his economic policy, the “Bidenomics,” combine decarbonization and social justice? The “climate” plan carried by Biden and adopted in 2022, the Inflation Reduction Act (IRA), aims to accelerate the development of electric cars and transition technologies through a supply-side policy.

On September 26, Biden became the first U.S. president to visit a picket line (against the advice of some of his advisors). Through this visit, he also seeks to embody the narrative of the transition and clarify his vision: the transition must primarily benefit workers and the middle classes, rather than shareholders and the wealthiest.

A better sharing of wealth

In Paris and Brussels, the slogans of “just transition” and “support” for the losers are constantly repeated in political speeches because no one wants to replay the “yellow vests” episode. But, at this level of generality, the “just transition” remains an empty shell. It must materialize through concrete questions and answers, like those posed by the UAW: how should profits be distributed in the transition sectors? What wage increases? What types of employment contracts? What guarantees against the risks of relocation?

Faced with these questions and the rearrangements they call for, some are tempted to respond with a minimum of social justice: Elon Musk, the very right-wing boss of electric car manufacturer Tesla, has done everything to prevent his employees from unionizing. On this side of the Atlantic, others persist in refusing to tap into the wealthiest to finance the public investments necessary for the development of electric transport, even though the electorate overwhelmingly demands it.

Let’s be clear: without a better sharing of wealth (through wages, social rights, public services, and taxation), the ecological transition can only fail within a democratic state. This is what Joe Biden has well understood.

Setting the right level of this redistribution is anything but obvious in a context of historical resurgence of inequalities, and it’s all the more reason to debate it openly. The ongoing socio-ecological conflict across the Atlantic thus foreshadows countless other conflicts, which our societies will have to address over the three decades that separate us from 2050, far beyond slogans about the love of the bagnole.