A just transition for auto workers? Electric vehicles and industry restructuring in a Transatlantic comparison

Abstract:

In Europe and North America, a shift is taking place away from internal combustion engines and towards electric vehicles. This change has far-reaching implications for workers in the automotive industry. Many jobs, particularly in factories that produce internal combustion engines and engine components, will become redundant. The manufacture of new products for electric vehicles, on the other hand, creates expanding areas of employment with different occupational profiles and different employment practices than the auto industry as we know it. The likely result is disruption in the lives of hundreds of thousands of auto workers worldwide, as the kind of work they do is eliminated.

This paper considers whether this transition take place in a way that does not shift the costs and risks onto workers. How can layoffs and plant closures be avoided? When plants are closed and job losses do take place, how can workers avoid long periods of unemployment and pressure to accept less attractive jobs? Are the new jobs better, or worse, than the old jobs? What role do corporate and trade union strategies have in shaping whether the transition is just? How do differing institutions and public policies in Europe and North America shape worker outcomes?

In this presentation we will discuss initial findings from interviews with worker representatives in Germany. The transition is happening more quickly in Germany than in North America, driven by regulations from the European Commission and the strategies of OEMs to retain their dominance in the higher-price market segments. On the other hand, workers are relatively well-equipped to negotiate over this transition, due to their participation rights and employment protections at work, stronger union organization, and their better-resourced training and unemployment benefits systems. Although the German auto industry has a major anti-union player now, Tesla, there are also highly unionized firms that could profit and that may pursue insourcing strategies for batteries, engines, and IT systems. Moreover, the union, IG Metall, is actively shaping the debate over industry policy and establishing additional resources for local trade unionists to avoid plant closures.

We will conclude with implications for North America, where the transition is more gradual. The challenges include a much weaker framework of worker rights in the workplace, including a much larger non-union sector, few disincentives for employers to lay workers off, and weak support for worker participation even where unions are present. At a time when the white-collar workforce is expanding relative to the blue-collar workforce, the scarcity of unions for salaried workers is also a handicap. It is also uncertain how successful the unionized OEMs will be in the EV market, whether they will pursue insourcing strategies at the expense of nonunion suppliers, and whether new work will be covered by the same collective agreements as the old work. Where layoffs and plant closures do take place, it remains to be seen how effective the workforce development and unemployment insurance systems will be in protecting them. It is also unclear what the strategies of unions will be to shape the debate over industry policy, and whether they have the resources to be effective.

We conclude that North America has time to learn from Europe, about how to cope with what is a common challenge. On the other hand, the institutional frameworks governing work, skills, and welfare will make it difficult to put those lessons into practice.