Behind Detroit's battery fight: Profits, UAW's power and Tesla

investing.com:

By Joseph White

DETROIT (Reuters) — The United Auto Workers and the Detroit Three automakers are stuck in a standoff over wages and union representation at future electric vehicle battery plants, with Tesla (NASDAQ:TSLA) and Chinese rivals looming over the bargaining tables.

UAW President Shawn Fain is pushing negotiators for General Motors (NYSE:GM), Ford (NYSE:F) and Chrysler-parent Stellantis (NYSE:STLA) to open the doors for the union to organize future battery plant workers, and to raise wages at their respective joint-venture battery plants to match assembly workers' pay.

UAW and Detroit Three negotiators are exploring different options, including deploying workers displaced from UAW-represented factories to new battery operations, said people familiar with the discussions, who asked not to be identified.

But a breakthrough has eluded bargainers as costly strikes drag on. «The UAW is holding the deal hostage over battery plants,» said Ford Chief Executive Jim Farley on Sept. 29.

Without disclosing details, Fain told UAW members on Oct. 6 that GM had agreed to include workers at Ultium LLC joint venture battery factories under the umbrella of its national agreement with the UAW — even though Ultium is a separate company that GM could choose to exclude from the talks. Since then, the union has not announced an agreement on battery plant issues with GM or the other automakers.

In effect, Fain is demanding that workers get a greater share of the $35 per kilowatt-hour in U.S. government battery cell manufacturing subsidies the plants hope to reap from U.S. President Joe Biden's Inflation Reduction Act (IRA).

The flow of cash from the IRA could be substantial. For example, 1,300 workers at GM's Ultium LLC battery