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"Probably The Biggest Change in the 100-Plus Year History” Shift To Electric Vehicles Shaking Up Auto Industry

Alexis Christoforous and Kristin Myers discuss how the shift to electric vehicles could impact auto manufacturing jobs with University of California at Berkeley Professor Harley Shaiken.

Video transcript

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ALEXIS CHRISTOFOROUS: We talk a lot here about electric vehicles and what it will mean for the automakers and for drivers. But what will it mean for the auto workers? The auto unions are concerned as traditional automakers like GM and Ford make a bigger push and shift to EV. Here to talk about it is Harley Shaiken, professor at the University of California Berkeley.

Professor, we know that earlier this year, GM said that by the year 2035, it will make only electric vehicles. I mean, this is a seismic shift for a traditional automaker to be making. What will the impact be for workers from-- from the engineers on down to the factory workers?

HARLEY SHAIKEN: It certainly is the seismic shift. And it will affect everyone in the industry to be sure, but I think it will ultimately affect all Americans. This is probably the biggest change in the hundred-plus-year history of the industry. And it will impact every dimension of it.

KRISTIN MYERS: So Professor, every time moves like this are made, and concerns are raised about job losses, we inevitably always hear the other side, which is that jobs are also going to be created. Do you at all see a kind of commitment from some of these companies to really train and make sure that these workers are upskilled to essentially handle these new changes?

HARLEY SHAIKEN: I think that that commitment is there. But there's little question it is a very disruptive force when it comes to jobs. The companies themselves from Volkswagen to General Motors and others have estimated that perhaps as many as 30,000-- 30% less labor hours will be necessary to build a vehicle, 50% less capital investment to build that vehicle. That is not small. And that's an amount of slack that's not easily taken up.

With that said, though, the fact that you are going to have a major disruption in employment in the industry doesn't necessarily mean you're going to have a total shrinkage in jobs. That depends on a lot of other things as well. One of those things is certainly sales.

A second dimension of this beyond sales is just how the companies handle this and how we as a country handle it, for example, trade. If more work is reshored to the United States that is currently done today, say, in China or Mexico or elsewhere in the world, that could in turn boost employment even at a time when jobs are being reduced significantly because of the move to electrics.

ALEXIS CHRISTOFOROUS: We know that the auto unions are very concerned about this seismic shift we're talking about here. When we do move over to electric vehicles, what kind of leverage do you think the unions are going to have? Is their role going to be different for their members with the auto industry?

HARLEY SHAIKEN: Well, I think everyone at the bargaining table understands that this is a highly desirable and ultimately inevitable trend. Climate change is an existential threat to every American, to the whole planet. And the largest single source of planet-warming gases is tailpipe emissions. So there's little question we have to go this route. And I think both sides want to see this transition handled in a way that is fair to the workers and to the communities.

But it isn't just autoworkers that are impacted by this. It's all Americans because these historically have been very highly paid jobs. And that purchasing power has gone into the economy and served to set wages in areas where you have high-paying auto factories.

KRISTIN MYERS: Professor, what is the best way then moving forward, really, to-- to balance economically, you know, the current standing of some of these workers, mitigate some of those job losses, but also move forward towards electric vehicles, which many say is better for us on so many levels, one being the climate?

HARLEY SHAIKEN: I think you're absolutely right with that. We-- this is a change we want to see. It's not a change we should be frightened of. But it is a change that has some very possible negative consequences.

It is key to eliminate as much as possible of the negative consequences and concentrate on some of the benefits that are going to be brought in. That's going to take a strong government role. Companies are clearly involved and are moving very rapidly.

But the government is also playing a key role right now. In the American Jobs Act, President Biden has put in to that close to $175 billion for manufacturing research and development and providing incentives to sell electric cars. That large figure, it's really a down payment on the kind of involvement that the government is going to have to have to ensure that all Americans benefit from a change that is essential for the future of the planet and for our country.

ALEXIS CHRISTOFOROUS: And Professor, EVs, as we've been talking about, don't use engines at all. Which jobs within the auto industry do you think are, I guess I'll say, the safest or the best positioned for the switch over to EV?

HARLEY SHAIKEN: Well, there are going to be changes at every dimension of the industry. Auto assembly-- that's relatively safe. These vehicles will still be assembled. But there will be fewer assembly jobs.

You won't have engines. You'll have electric motors, which are far smaller and far easier to manufacture. In fact, you won't have engine plants, the complex, capital-intensive machinery that grinds crankshafts or camshafts to highly precision dimensions. All that is going.

Transmissions will be profoundly simplified. So in drive trains, the heart of an automobile today, they will be completely different, employing far fewer workers, far fewer moving parts. One recent study comparing a Chevy Bolt, all electric, with a Volkswagen Golf, gasoline engine, roughly the same size shows 80% fewer moving parts in the Volt compared to the Golf.

KRISTIN MYERS: Professor, I wanted to quickly ask you, of course, everyone thinks about the economic impact of the job losses. But I wanted to turn that on its head and really ask you what we could be looking at in terms of growth, the positives from this move.

HARLEY SHAIKEN: There will certainly be positive moves in the broader infrastructure. President Biden in the American Jobs Act is talking about 500,000 electric charging stations across the country to provide that infrastructure. It's going to take a fair number of workers to build, install, and ultimately to maintain that kind of a shift.

So there will be new jobs in many areas. And it's important to be providing the training. There will be an enormous amount of research and development that's taking place for these new electric vehicles and autonomous vehicles, which are coming roughly at the same time. So you've got a lot that's being generated.

But we've also got to look at the history of this industry to provide perspectives. We know that Henry Ford put the world on wheels with the Model T and the moving assembly line in Detroit in 1913. But what we also shouldn't forget is this industry generated enormous productivity. In post-World War II, the automakers and the United Auto Workers Union bargaining together really fueled the middle class to an unprecedented degree and gave us a very healthy growing economy and laid the basis for a democratic society.

ALEXIS CHRISTOFOROUS: All right. Professor Harley Shaiken, University of California at Berkeley, thanks for your insights today.