On Thursday, the United Auto Workers went on strike at a trio of factories owned by Ford, General Motors, and Stellantis. Negotiations to replace an expired contract have reached a stalemate, leading to thousands of UAW members walking off the job in Michigan, Missouri, and Ohio. The strike is aimed at disrupting profitable production lines like Ford’s Bronco, but there may be a silver lining to the strike for General Motors.
The strange idea appeared over the weekend in Reuters. You see, GM has a bit of a production problem. The automaker has publicly committed to electrification, creating a new battery platform that will be shared by Brightdrop, Buick, Cadillac, Chevrolet, and GMC.
An Ultium-shaped headache
Known as Ultium, the new batteries are intended to be cheaper to produce than the batteries that power the Chevy Bolt; when Ultium was first announced, CEO Mary Barra said costs would drop below $100/kWh “early in the life of the platform.”
At least, that’s the idea, but at the rate GM is currently producing Ultium cells it seems like breaking the $100/kWh barrier may take some time.
In July, GM had to stop making BrightDrop electric delivery vans in Canada to prioritize using what batteries it could in other new EVs. In 2022, GM launched the Ultium-based GMC Hummer EV and Cadillac Lyriq, but a year later, both models were unique sights on the road—Hummers were delivered in double-digit numbers, and in last time we checked, it was even smaller. than 2,500 Lyriq in the forest.
The problem appears to be because GM’s “automation equipment supplier is struggling with delivery issues,” Barra said in July.
And that’s where the potential increase in the strike comes in, at least according to Sam Fiorani, VP of global auto forecasting at AutoForecast Solutions. He told Reuters that “a halt in production could allow GM to resolve bottlenecks.”
However, that may be wishful thinking at this point; neither the Hamtramck plant in Michigan (where the Hummer is made), nor the Spring Hill plant in Tennessee (which builds the Lyriqs) is under industrial action right now, so any production delays for those EVs are irrelevant on the UAW strike.
Germany issued a warning
Although the UAW is fighting for fairer pay raises and an end to tiered labor contracts, it’s also worried about the impact of the shift to EVs on auto employment—often noted as being in the minority , fewer workers are needed to build it.
But weak demand is another threat to workers’ jobs. Although the EV market share has increased to nearly 7 percent of the new car market this year, EVs are more expensive than ever, and that is starting to affect demand.
That doesn’t just happen here in the US. In Germany, Volkswagen has cut contracts for hundreds of workers at its factory in Zwickau, Germany, which builds its current ID range. EVs.
It looks like GM is solving this battery problem to make cheaper EVs in everyone’s interest.