Fed panelists grapple with automotive labor issues

Federal policy must prioritize job quality and fair compensation for auto workers to make the transition to electrification successful, panelists said Thursday at the Federal Reserve Bank of Chicago’s 29th Annual Auto He spoke at the Insight Symposium.

“The green transition is not possible without strong and sustained political support,” said Adam Hirsch, senior economist at the Economic Policy Institute, at an event in Detroit. Focusing on the quality and quantity of jobs available is very important.”

Employers know the cost of a pay increase but often fail to measure the benefits of a pay increase, said Susan Helper, senior adviser for industrial strategy in the White House’s Office of Management and Budget.

“There are real reasons why we need a skilled workforce,” she said. “With labor, you get what you pay for, just like any other commodity.”

Electric vehicle sales will account for 5.9% of new light vehicle sales in 2022, up 57% from 2021, according to the Automotive News Research & Data Center. As automakers shift to selling primarily EVs in the US, their share will continue to grow and the automotive workforce will need to evolve.

more working hours

Unrelated to McKinsey and Co., Turner Cotterman, an associate at Carnegie Mellon University, said that battery electric vehicles work more hours than internal combustion engines. said to have the potential to create But most of that time, he said, was spent manufacturing his cells in batteries, rather than assembling modules and packs that most of his line workers handle.

“If we want to maximize the working hours available to manufacturing workers, it’s important that these gigafactories not only assemble module packs, but also cell manufacturing,” he said.

Otherwise, that labor would be done in countries that already have expertise in cell production, such as South Korea, Japan, or China, he said.

Anna Stefanopoulou, a professor of mechanical engineering and manufacturing at the University of Michigan, says the move to EVs will also require more software work.

Automakers and suppliers need real-time data to understand battery health, resale value, and potential for reuse and recycling, she said. Each of these metrics relies on software, data and controls in battery management, she said.

Ensuring quality of work

On factory floors, panelists said some of the keys to job quality are fair wages and workforce representation.

Carla Walter, senior director of employment policy at the Center for American Progress, says higher wages lead to a more experienced and lower turnover workforce.

“We get workers who are committed to their work, innovate and have a high level of ability to enhance work processes, which also leads to delivering projects on time and at better value to the end user,” she says. Told.

The Biden administration has focused on regulation and guidance to manage tax incentives and subsidies to help fund the transition to EVs. But governments also need to work with workers and environmental advocates to ensure companies produce quality jobs, Walker said.

The quality of jobs for EV workers will be determined by many factors, including the ability to unionize and the level of demand for EVs, said Betony Jones, director of the U.S. Department of Energy’s Office of Energy Employment.

As automakers begin to scale EVs, developing worker skills will give the U.S. the edge it needs to become a top competitor in EV manufacturing, she said.

Workers, job creation, economic development, national security and the development of domestic supply chains are a big part of recent climate policy, she said.

“We will beat the climate because this works for working people,” Jones said. “This will create business opportunities. This will benefit the American economy.”

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