According to Ford CEO Jim Farley, “It takes 40 percent less labor to make an electric car.” The company is finding ways to utilize its large unionized workforce to make more parts in-house. That could mean, of course, that parts suppliers to Ford will be given less business in the future. With fewer laborers needed overall in the heavily unionized auto industry, will electric cars be responsible for the further decline of auto unions? Claire Bushey reports in the Financial Times:
The transition to electric vehicles is widely expected to reduce the number of jobs in the auto industry because they are assembled from fewer parts compared with cars powered by internal combustion engines.
The sector has been heavily unionised for decades, paying wages that placed blue-collar workers in the middle class. The United Auto Workers union estimated in 2018 that the transition to EVs could cost 35,000 jobs out of the 400,000 workers it represents.
Potential job losses have been predicted elsewhere, too. A report from a German working group found that the country’s car sector could lose 400,000 jobs over the next decade amid a shift to electric power.
Farley has said since July that Ford has “too many people”. In August, it cut 3,000 employees and contract workers, with executives calling the company’s cost structure “uncompetitive” compared to other carmakers. Ford had 183,000 employees at the end of 2021.
Carmakers’ traditional supply chains are gradually being replaced with the production of batteries, the most valuable components of electric cars or trucks. Tesla and Panasonic have worked together since 2014 to build batteries at the electric carmaker’s first Gigafactory in Nevada.
Ford and General Motors have partnered with battery makers SK Innovation and LG Chem, respectively, to build factories in the US to supply batteries for their expanding EV offerings.
A shift in corporate strategy towards more vertical integration at Ford would hark back to the company’s early days when founder Henry Ford owned forest, iron mines, limestone quarries and even a rubber plantation in Brazil to wholly control the company’s supply chain.
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