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Autoworker strike could give GM breathing room to fix battery production

A naked GM Ultium rolling chassis
Enlarge / The Ultium platform is the foundation of GM’s EV strategy, including the battery cells, modules and pack, plus drive units containing electric motors and integrated power electronics. It underpins GM’s EV architecture and was developed with a common set of components, providing energy for nearly every segment on the road. At least that’s if it can ramp up production.

General Motors

Last Thursday, the United Auto Workers went on strike at a trio of factories owned by Ford, General Motors, and Stellantis. Negotiations to replace an expiring contract reached a stalemate, leading to thousands of UAW members stopping work in Michigan, Missouri, and Ohio. The strike has been targeted to disrupt profitable production lines like Ford’s Bronco, but there might be a silver lining to the strike for General Motors.

That curious idea appeared over the weekend in Reuters. You see, GM has been having somewhat of a production problem. The automaker has publicly committed to going all-in on electrification, developing a new battery platform to be shared across Brightdrop, Buick, Cadillac, Chevrolet, and GMC.

An Ultium-shaped headache

Known as Ultium, the new batteries are meant to be far cheaper to produce than the batteries that power the Chevy Bolt; when Ultium was first announced, CEO Mary Barra said that costs would drop below $100/kWh “early in the platform’s life.”

At least, that’s the idea, but at the rate GM is currently producing Ultium cells it seems that breaking the $100/kWh barrier might be some time off.

In July, GM had to stop building BrightDrop electric delivery vans in Canada to prioritize using what batteries it could make in other new EVs. In 2022, GM launched the Ultium-based GMC Hummer EV and Cadillac Lyriq, but a year on, both models are rare sights on the road—Hummers have been delivered in double-digit quantities, and last time we checked, there were still fewer than 2,500 Lyriqs in the wild.

The problem appears to be because GM’s “automation equipment supplier is struggling with delivery issues,” Barra said in July.

Breathing room

And that’s where the potential upside to the strike comes in, at least according to Sam Fiorani, VP of global vehicle forecasting at AutoForecast Solutions. He told Reuters that “a production stoppage could allow GM to solve bottlenecks.”

However, that might 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 Lyriqs) is subject to industrial action right now, so any delays in production of those EVs are unrelated to the UAW strike.

Germany provides a warning

Although the UAW is fighting for more equitable pay raises and an end to tiered working contracts, it’s also concerned about the effect the transition to EVs will have on autoworker employment—it’s often noted that with fewer parts, fewer workers are required to build them.

But weak demand is another threat to workers’ jobs. Although EV market share has risen to around 7 percent of the new car market this year, EVs are getting more expensive than ever, and that’s starting to affect demand.

That’s not just happening here in the US. In Germany, Volkswagen has cut contracts for hundreds of staff at its factory in Zwickau, Germany, that builds its current range of ID. EVs.

It seems GM solving this battery problem to make more affordable EVs is in everyone’s interest.

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