United Auto Workers President Shawn Fain on Friday blasted the Department of Energy’s historic $9.2 billion loan to Ford Motor Co. and South Korean battery maker SK On Co. as example of the federal government “actively funding the race to the bottom with billions of dollars in public money.”
“These companies are hugely profitable and will continue to make money whether they sell combustion engines or electric vehicles. Yet workers are getting a smaller and smaller slice of the pie,” Fain said in a statement. . “Why is the Joe Biden administration facilitating this corporate greed with taxpayer dollars?”
The strongly worded statement was the latest example of the new, more militant UAW leadership’s willingness to publicly criticize the Democratic leadership that has historically had friendly ties with the Detroit union — an unanticipated rebuke to the president’s re-election campaign. .
In May, Fain said in a letter first reported by The Detroit News that the union would refrain from endorsing Biden in the 2024 election until the administration supports a “just transition” to vehicles. electricity with “higher wages” for the workers.
More: UAW asks Biden to back ‘highest wages’ for EV workers before endorsing
Fain’s latest statement came in response to news on Thursday that the Department of Energy was planning to provide the largest single loan in its history to the Ford-SK On joint venture to help fund three battery factory projects. of electric vehicles that companies are building in Kentucky and Tennessee. . The loan would cover the majority of the $11.4 billion the companies are investing in the projects which also include an electric vehicle assembly plant.
The News has reached out to the DOE and the White House to comment on Fain’s statement.
The loan also marks the largest direct government support for an auto company since the General Motors Corp bailouts. and Chrysler Corp. during the Great Recession. This is just the latest example of the Biden administration’s drive to increase domestic production of electric vehicles, batteries and other critical components and materials in a bid to compete with China.
Ford and SK On have estimated that the projects will create 11,000 jobs. The DOE said Thursday that the factories will generate more than 120 gigawatt hours of battery production in the United States per year.
“The goal is twofold: one is to get people to choose the United States over other countries where they may have originally put this infrastructure, and the second is to get them to move faster because conditions alone allow for bolder action,” Jigar Shah, director of the loan programs office at the Ministry of Energy, told The News on Thursday. “I think both of those things were true in this case.”
The LPO received an additional $40 billion in Inflation Reduction Act loan approval; Shah estimated that his office has $50 billion in loan authorization.
Last year, the LPO gave Ultium Cells LLC – a joint venture between General Motors and LG Energy Solutions – a $2.5 billion loan for their battery production efforts. In 2009, Ford obtained a $5.9 billion loan under the same program, which it has since repaid.
The DOE would not disclose details of loan terms, but the agency can offer loans with a repayment term of up to 25 years. The interest rate on the loan is equal to the US Treasury yield curve with zero credit spread – a more affordable rate than the joint venture could have received from private investors.
In a statement Thursday, Ford Treasurer Dave Webb said, “Major technology transitions have always been accelerated by collaboration between the public and private sectors. The DOE’s foresight here will help do the same for the transition to zero-emission transportation.
Manufacturing campuses in Kentucky and Tennessee are key parts of Ford’s $50 billion electrification strategy, under which it plans to achieve a production rate of 2 million electric vehicles a year by ‘ by the end of 2026. The company is also targeting profit margins of 10% companywide by then, and 8% profit margins in an electric vehicle company that is expected to lose billions of dollars this year.
The DOE loan announcement comes just before the start of crucial contract negotiations between the Detroit automaker and the UAW. Organizing joint ventures and battery factories, especially in the South where unions have historically struggled to organize workers, is a top priority for the union.
“The Department of Energy’s loan to BlueOval SK will help create thousands of well-paying jobs and strengthen the future of American manufacturing,” Ford spokeswoman Melissa Miller said in a statement. that battery factories are expected to create 7,500 jobs. “Ford expects BlueOval SK to pay competitive wages and benefits to attract and retain the workforce needed to manufacture high-tech batteries. Employees at BlueOval SK’s battery plants will be able to choose to organize, a right that Ford fully respects and supports.”
Even though the UAW successfully organized the first Ultium Cells plant in Warren, Ohio, one of the union’s main concerns is to ensure wages and benefits comparable to those of automakers in the old plants of manufacturing. The UAW is currently negotiating a contract with the joint venture for Ultium Cells workers in northeast Ohio.
“Over the past five years, workers who make GM products in Lordstown, Ohio have had their lives turned upside down as they have been forced to retire, leave or uproot their families and move all over the world. United States when GM closed its factories despite making profits,” Fain said on Friday. “Their jobs have been replaced at GM’s new joint venture battery plant with jobs that pay half of what workers earned at the old Lordstown plant. Not only is the White House refusing to right this wrong, but it gives Ford $9.2 billion to create the same low-level jobs in Kentucky and Tennessee.
He added, “It’s an absolute disgrace to see another Democratic administration double down on a taxpayer-funded corporate giveaway.”