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In the Shift to EVs, Some Worry Workers Could Suffer

The gradual shift toward electric vehicles could send ripples through the car manufacturing process, affecting workers on the front end and the parts and maintenance industry on the back end.

a robotic vehicle production line
Shutterstock/Jenson
(TNS) — The auto industry's accelerating transition from traditional gasoline-powered engines to electric vehicles promises new opportunities — and the potential for large job losses.

Electric vehicles are simpler to design and engineer, experts say. By some estimates, they typically have fewer than half as many parts as vehicles powered by internal combustion engines and require 30% fewer hours to build. Assembly of the components they do feature is more highly automated. And they require less maintenance.

The employment and economic implications of these technological differences loom, especially for major auto-producing states in the industrial Midwest. Over time, the transition to electrification is expected to mean fewer jobs assembling powertrain components, for example, less work for dealership service departments and auto repair shops, and bigger shifts in the global automotive supply chain.

"Fundamentally, this is just a better way to design and engineer a car, and it's a better way to run the business because you can do more (vehicle) derivatives" on one platform, said Lawrence Burns, who served as vice president of research and development and planning at General Motors Co. until 2009 and now advises companies on the future of mobility.

But the consequences for workers cannot be ignored, he added. Simpler design and more flexible platforms mean less engineering. Fewer parts means less assembly work. Electric vehicles don't need oil changes, meaning less revenue for dealerships and fewer opportunities to interact with customers.

"The number of jobs to produce batteries and electric motors and the power electronics will not be nearly as many as the number of jobs that are used to produce a combustion engine, an exhaust system, an emission control system, a fuel management system, transmissions and drivetrain components," Burns said.

"If you play this out in a five- to 10-year time frame, employment ramifications for states like Michigan and regions like southeast Michigan and northwest Ohio are really going to be a big deal."

But the EV shift also brings the potential for new jobs: in electric battery assembly and software engineering, for example, and yet-to-be-imagined opportunities that will come with the development of self-driving electric vehicles that are still years away from mainstream use.

Globally, automakers plan to spend at least $300 billion on EV development by the end of the decade. Detroit's three automakers are investing heavily in the transformation, with announced spending plans totaling tens of billions of dollars between them.

ALL-ELECTRIC FUTURE

Detroit's automakers are betting the future is electric.

GM has committed to investing $20 billion on electric and autonomous vehicles by 2025, and to an all-electric future lineup, with plans to have 20 new EVs globally by 2023. The automaker recently announced new investments in EV production, including $2 billion to build electric Cadillacs in Spring Hill, Tennessee. A GMC Hummer EV will be built starting next year at GM's Factory Zero Detroit-Hamtramck Assembly Center.

Ford Motor Co. plans to spend more than $11 billion on electric vehicle development by 2022. The Dearborn automaker recently announced it will add 300 jobs at its Rouge complex to support battery assembly and production of the new F-150 hybrid and fully battery-electric F-150 that is slated for release in 2022. The all-electric Mach-E is coming later this year, and an electric version of the Transit commercial van is scheduled to come out in 2022.

Fiat Chrysler Automobiles NV has said it will invest more than $10.5 billion in electric vehicles, with plans to offer more than 30 nameplates with electrified powertrains in the coming years, including new Jeep models that will be built at FCA's new Detroit Assembly Complex and retooled Warren Truck assembly plant. A plug-in hybrid electric version of the Jeep Wrangler launches later this year.

Currently, EVs make up just a tiny share of the vehicle market, but sales have grown rapidly in recent years and experts say EVs are reaching a tipping point that is likely to accelerate the transition. By 2030, electric vehicle sales will account for more than 21% of global light-duty vehicle sales, according to a baseline forecast by Guidehouse Insights.

But as this transformation occurs, there is concern that American workers who build the vehicles, make the automotive parts and provide the vehicle maintenance will be left behind, imperiling incomes and the financial foundation of auto communities.

Already in Germany, there are estimates that the transition to EVs could cost hundreds of thousands of jobs by 2030. Germany's Audi, a luxury brand of parent Volkswagen AG, announced last year that it would cut 7,500 jobs globally as part of its shift to electrification.

The Congressional Research Service warned of this possibility for U.S. workers in a report last year to Congress. Conventional vehicles have as many as 2,000 powertrain components, compared to just a few in electric powertrains, the report says, citing an Ernst & Young estimate.

The report warns of the impact on the roughly 150,000 U.S. workers who make components for internal combustion powertrains: "Should electric powertrains displace those used by gasoline over the next decade and beyond, it is likely that both production and engineering jobs will be affected."

While there will be opportunities to create new jobs in chemical, battery, and software engineering, the report says, "Few U.S. universities offer degrees in battery engineering, a skill set that is in short supply even today."

The author suggests Congress invest additional resources in supporting domestic EV production, and use existing legislation to address workforce needs: "Workers who today manufacture parts for gasoline or diesel engines could be retrained to make parts for electric vehicle motors and the lithium-ion batteries that power them, although there may be significantly fewer such jobs than exist in automotive supply chains today."

The United Auto Workers, too, has called for retraining workers and building an EV ecosystem in the United States that can employ American workers making union wages and benefits.

"Progress is coming. The question is will we make sure the new jobs making batteries and replacing the combustion engine are made here by retrained American workers?" UAW spokesman Brian Rothenberg said in a statement. "Will these jobs have the same pay and benefits as those making and assembling gas-powered engines?"

The UAW has advocated for the development of a national industrial policy that promotes the production of EVs and their components in the U.S. and by workers earning fair wages and benefits.

"The future can be bright if we are retraining workers for the jobs of tomorrow — but only if they are made right here with the same pay and benefits of our current workforce," Rothenberg said. "That's the commitment American workers and our middle-class economy needs as we tackle the future of electric vehicles."

FEWER PARTS

Concern over jobs is rooted in part in the fact that electric vehicles are made differently compared with conventional vehicles.

The manufacturing process begins in a similar way: robots weld vehicle bodies together and paint them, with workers providing quality checks and fixes along the way. The processes diverge in the assembly of the vehicle's various components, from the systems that power it to the interior features that are more visible to passengers.

The most fundamental difference is that gas-powered vehicles feature mechanically complex internal combustion engines and gas tanks; in electric vehicles, those are replaced with motors and batteries.

"You don't have an exhaust system, so you don't have all those parts and the catalytic converter that goes with it. You don't have the transmission. The transmission has an enormous number of parts — torque converters and clutches and gears," Burns said. "The automatic transmission is one of the most sophisticated mechanisms ever created. None of those are needed on an electric car."

Sam Abuelsamid, principal research analyst at Guidehouse, also noted "where you're likely to see some of the biggest impact is not in final assembly, but the powertrain component assembly."

"Today, assembling engines, assembling transmissions is a process done on moving assembly lines," Abuelsamid said. "It's a process that, to a large degree, is done by hand."

Electric vehicles, by contrast, feature comparatively simple motors, the assembly of which are more conducive to automation.

"You've basically got a stack of plates, the magnets that go together, the copper wirings that go through that. It's a process you're not really going to do by hand," Abuelsamid said. "You're going to see job losses in motor assembly when you go from engine and transmission assembly to an electric drive unit."

Similarly, he added, the assembly of battery packs lends itself to automation. At GM's Orion Assembly Plant, the Chevrolet Bolt EV starts off going through the same process as the conventional and autonomous vehicles alongside which it is built, until it's time to install the battery.

Then, an employee removes the battery from a case and places it on a carrier that is pulled by an automated cart. The battery moves from a robotics cell to another carrier, which takes it to the assembly line. Employees bolt the battery to the vehicle and send it on its way to be connected to a chassis, the electric version of which is built in a different part of the plant.

Additionally, most vehicles have "extremely complex" wiring harnesses to enable various electronic controls, said Abuelsamid. But that is changing.

The electric vehicles that are being developed today often feature a single computer: "That will simplify the wiring and that installation, so there will be fewer steps required for some of that."

The adoption of autonomous vehicles will mean even fewer parts and labor, noted Burns, because fully self-driving cars might not require parts that are there for human use, such as seats and air conditioning.

"Because there's so many jobs tied to every part, because every part has to be designed and engineered and validated and sourced and tooled and produced and shipped and then assembled — yikes," he said. "That's a lot of work that you're not going to have to do. Then on top of that, if it lasts longer, you need fewer of these to meet the demand for transportation."

Experts say the job losses will not only be among hourly plant workers but also among those who work in roles such as engineering, product development and purchasing. The transition will have a significant effect on suppliers, as well.

In response, there has been a trend of major automotive suppliers spinning off their powertrain businesses, said Abuelsamid: "They recognize that while internal combustion engines are going to be around for years to come, it's not going to be a growth business."

At the same time, suppliers of products such as electronics, motors and batteries are becoming more important players in the industry, prompting concerns from the UAW about the greater influence of sectors that historically don't provide strong labor protections and benefits offered to unionized autoworkers.

"The production of new EV components could shift business and employment to non-auto companies that lack a large U.S. manufacturing base," the UAW warned in a report on EVs released last year. "This could undermine auto job quality by shifting work to employers with a poor history of labor relations or companies that are more likely to import components."

Noting the aggressive approach China has taken to promote domestic production of electric vehicles and components, the UAW is calling for a comprehensive set of policies to ensure American workers don't miss out on the benefits of EVs. Specifically, the union would like to see investments in charging infrastructure, training for displaced workers, government incentives that promote U.S. production of EVs and EV components, and consumer incentives to purchase EVs, among other measures.

While the transition to EVs will be disruptive, the UAW report says, "these disruptions could be an opportunity to re-invest in U.S. manufacturing to produce the vehicles of the future under high-road working conditions."

©2020 The Detroit News, Distributed by Tribune Content Agency, LLC.

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