Leaders in Washington are trying to bring domestic
manufacturing jobs back after a 40 year long cycle
of decline.
American auto companies, along with American labor,
are committing their treasure and their talent to
make electric vehicles all across america.
A lot of great stuff happening here in michigan
and we are competing.
Rivian unveiling a new $5 billion battery and assembly
plant base just outside of Atlanta.
There's a battle right now and whether the companies
want to admit it or the states want to admit it,
like Michigan, they are battling for investments in
automotive like they've never had to do before.
These changes could disrupt huge swaths of the
Midwestern economy.
Tens of thousands of people build parts for gasoline
powered engines in states like Michigan, Indiana and
Ohio.
What a thousand workers took to construct in 1970.
We can now construct with about 235, 240 workers.
At its height, nearly 20 million people worked in the
manufacturing industry.
Today, it's about 13 million workers could end up
competing for a smaller pool of jobs that require a
different set of skills.
The lines that run to drive oil or gas or any of a
number of other fluids around an internal
combustion engine aren't going to be there.
Don't have to be there.
Researchers believe that surging demand for EVs could
force businesses to pivot quickly.
We find that this transition is already affecting
workforce morale deeply.
In some places, it's positive there's hope for
the future. But in many other places, or at the same
time with some individuals, there is a lot of concern.
We've been working on products that we will
manufacture in the future that will support not only
electric vehicles but other electric applications.
Can the US auto industry weather the electric vehicle
transition without leaving workers behind?
And will this pivot be a boon or bust for people in
the Midwest? The first thing to know is that
electric vehicles and traditional cars are built
in slightly different ways.
These jobs just are very different.
So internal combustion engines, they have crank
shafts, spark plugs, radiators, and the electric
vehicle has the battery.
So electric vehicles have fewer moving parts and
require less equipment.
So typically they require less manufacturing to build.
The estimates put it at about 30% less.
In general, the body and the chassis, the wheels, the
axles and that kind of thing are probably still
going to be very much similar in an EV in an
electric vehicle as they are in a car today.
But the lines that run to drive oil or gas or any of
another, a number of other fluids around an internal
combustion engine aren't going to be there.
Don't have to be there.
While the processes differ, both types of car are built
by workers with lots of specialized knowledge.
The typical person who I think is on a factory floor
today probably has a at least a two or three year
degree on manufacturing technology.
That's a big turnaround from my grandfather's day,
where the average worker had been to eighth grade.
Tesla is far and away the leading manufacturer of
electric vehicles in the United States.
But when it comes to motor vehicles, just three
companies dominate the US industry.
Historically, the big three were General Motors, Ford
and Chrysler.
Now this group is playing catch up to Tesla's
burgeoning empire battery factories and chargers.
Workers in the Rust Belt are now caught in the middle
of this corporate showdown.
Oftentimes when you work for an internal combustion
engine, you're working on spark plugs and you're
working on certain mechanics of the car.
But when you transition to an electric vehicle, you're
looking at batteries and it's a very different kind
of job. So there's a lack of understanding as to
whether these jobs will dry up or be transferrable, if
there's workforce training and what kinds of needs the
company will have in the future. And so there's this
kind of fear, uncertainty about those that are
currently in school and how can they even train
themselves to be ready for the next jobs that these
these factories offer?
Most of the specialized work occurs at secondary
factories called OEMs.
And OEM is an original equipment manufacturer.
When people talk about OEM, they think about the
automaker. They are fed parts from hundreds, if not
thousands of different suppliers, and they produce
a vehicle for the consumer with the diversification of
the auto industry.
The suppliers have really become an integral part of a
lot of this.
We are a supplier, an automotive part supplier to
the OEM customer.
NGK Spark Plugs is one of the biggest parts suppliers
in the US.
Got a large manufacturing operation in Brazil of
course throughout Japan, but also manufacturing in
Southeast Asia, in France and also right here in the
United States, in West Virginia.
This company and many, many others are changing with the
times as governments and car companies commit to EVs.
When you go beyond where we are today and we think about
the future and the components that are in an
electric vehicle, you've got different types of
bearings and other types of rolling elements for
electric vehicle motors, and that will apply to all
forms of mobility, whether it's an e-bike or whether
it's a autonomous delivery vehicle in the future.
So we're diversified and we expect to become even more
diversified as this transition occurs.
The big players are changing plans, too.
With electric vehicles.
Some companies, like General Motors, are trying
to pretty much get as much in-house as possible because
they believe that they can have a capital advantage as
well as diversify their revenue streams by having a
product that maybe they can sell to another OEM or even
another industry like locomotive or planes or
anything like that.
Car manufacturing is one of the most important trades in
the United States.
Roughly 2.7% of gross domestic product was linked
to the production and sale of cars in the States in
March of 2021.
At its height in 1950, just one city, Detroit, built one
of every two cars produced in the world.
I mean, Detroit became the Motor City because Henry
Ford decided that he would do the mile to mass produce
that and pay a living wage to blue collar workers to
pretty much come up south wherever and work.
Also, unions were huge in the Midwest and that helped
the average worker.
Up until the fifties and sixties.
Benefits and protections for workers was hard to come
by. It was because of the UAW and its work with the
auto owners that vacations were put into place
insurance, health insurance, dental insurance,
the opportunity to retire with a reasonably good
retirement package.
All of that came about because of the union working
with management.
But these clusters of good jobs went away almost as
quickly as they appeared.
Us manufacturing reached an all time high of 19.6
million workers in the 1970s.
And if you're in the Midwest, that year was
probably 1973.
Even more dramatic changes began to unfold in 1994 with
the North American Free Trade Agreement, or NAFTA.
And after will tear down trade barriers between our
three nations.
In this agreement, Canada, Mexico and the United States
eliminated the taxes that are charged on items that
cross borders.
With NAFTA in place, North America remained the world
leading producer of passenger and commercial
vehicles. Halfway across the planet, Asian countries
were developing manufacturing empires of
their own, with the admission of China to the
World Trade Organization in 2001, competition to make
all kinds of durable goods, including cars, heated up.
Critics of these policies say they hurt American
workers.
The fact is NAFTA has been a disaster for the United
States.
While in office, President Trump renegotiated NAFTA and
launched a trade war with China.
These moves so far haven't drawn much activity back to
the Midwest.
Reversing offshoring or trying to chase more
manufacturing jobs through trade policy was likely to
be a disappointing public policy because everybody
agrees that a large share of factory job losses over
the past 3040 years have been due not to China
stealing our jobs or Mexico stealing our jobs, but
rather the loss of jobs due to manufacturing workers
being more productive.
Mostly, we think about it as technology.
If you went back to 100 years ago, we were using
hand tightening wrenches.
By the 1970s and 1980s, we started seeing computers.
So doing this is what makes the economy grow.
But even as the economy grew, the good jobs kept
disappearing. Union membership in key industries
like auto manufacturing have declined dramatically
through 2020.
The competition for good jobs is more intense than it
was in the past.
The contract workers have been around for a long time,
but there haven't been as many of them until kind of
the last 20 or 30 years.
If they need a worker on the line, they can find
someone to do that work through an agency rather
than having to bring that person onto the workforce,
which saves them money.
And at the same time, though, that worker doesn't
get the protections that most union workers would
get.
As of June 2022, just over 1 million people had jobs in
the auto manufacturing sector. More than half
worked in the parts trade, which may be impacted by the
green transition.
Washington lawmakers hope that they can make the
pivot.
The bill I'm about to sign, it's not just about today.
It's about tomorrow. It's about delivering progress
and prosperity to American families.
In August of 2022, President Biden signed the Inflation
Reduction Act, which included a $10 Billion tax
credit to build new manufacturing centers for
EVs, wind turbines and solar panels.
An additional $2 billion would go toward retooling
old factories.
We might actually see entire plants shut down or close or
have to transition, whereas the assembly plants, for
example, might be able to just transfer from one four
workforce kind of set of skills to another.
The auto industry is laser focused on the new deadlines
put forth by leaders in government around the world.
The new factories will be highly automated and workers
may need more in-depth training. The changes could
disrupt local economies throughout the American
Midwest.
The fate of these companies is very intimately tied to
the fate of the communities and whether the jobs will be
there. But there are other ways that US companies can
kind of compensate for this this loss of employment.
So one is through their supply chains and the other
is through domestic production, increasing
domestic production.
President Biden is hoping that some of these workers
can pivot gracefully.
His $52.7 billion investment in semiconductors
could draw more companies to the states.
Today is a day for builders.
Today, America is delivering.
This new law will attempt to wrest critical industries
from the grips of eastern countries.
For example, semiconductors were invented in the US.
But today Asian companies dominate the global market.
Over half of the batteries used in the US come from
companies that are based in South Korea, Japan and
China. So there's this big opportunity for the US to
invest more in the batteries so as to bring
them into domestic companies and therefore kind
of offset the loss of employment.
These plans to bring manufacturing back, while
important, are for now largely speculative.
Yes, EVs are growing and are coming, but it's not the
profit driver at this point.
But companies far from the Midwest are determined to
make an impact. Tesla got its start in California, and
that state is planning to ban the sale of gasoline
cars by 2035.
At the end of the day, it's about actually making green.
And these companies saw the rise of Tesla that I think
led the way for a lot of companies rather than that
traditional ESG.
The most important question that remains is how soon
demand for EVs will materialize.
Sales have stretched to 9% of the global car market,
according to the International Energy Agency.
Unless we can make that change and make it pretty
quickly, there are going to be bigger problems to deal
with. And so I think we all know we have to do it.
There was an overwhelming sentiment among autoworkers
that they had earned the right to build the next
American car because they had devoted their entire
careers, their entire professions, including their
needs and their bodies, to building these cars.
And this coincides with these feelings of
uncertainty that they don't know if they will actually
be able to be a part of this new revolution.
I don't think that Midwest customer is ready for an
exclusively electric vehicle household.
We just simply don't have the charging infrastructure,
not only in the Midwest, but really across the entire
United States.
So it's going to take a little bit more time.
The Midwest is becoming more open minded.
I do think we'll see a gradual transition as long
as the infrastructure is in place and the cars are
affordable.