GM Battery Plant Offers EV Workers Higher Wages After Solvent Leak

By 

VIVIAN MEDITHI

 

Published August 25, 2023

Bloomberg / Contributor / Getty Images

Union workers at Ultium Cells, a battery plant joint venture between General Motors (GM) and LG Energy Solutions, have won a "breakthrough agreement" to hike wages, the United Auto Workers union announced Thursday.

KEY TAKEAWAYS

• The tentative agreement will raise Ultium Cells worker pay by 25% on average, though wages would remain lower than traditional UAW workers who assemble engines and cars.
• The proposed deal was announced by Ultium Cells just one day after a chemical solvent leak; UAW has repeatedly criticized the plant's health and safety practices.
• The battery plant, a joint venture between General Motors and LG Energy Solutions, has drawn national attention from Senators and market analysts.
  

The interim deal will raise hourly pay for workers at the Lordstown, Ohio plant by 25% on average, and includes back pay to December 2022 for tenured workers. The agreement will now be put to a ratification vote by Ultium workers.

The proposed agreement comes one day after a chemical solvent leak at Ultium Cells. The company announced a "cathode mixing slurry leak" on Wednesday which was resolved after a temporary production halt.1 While there were no injuries or employee exposure from the incident, UAW has repeatedly criticized the plant's health and safety practices.

GM stock slumped earlier this month after the company warned investors that EV production was slowing due to issues producing Ultium battery packs. That follows a late July tumble following second-quarter earnings over similar battery pack concerns.

The tentative deal comes after months of negotiations that drew national attention—and the ire of Democratic politicians. Ohio Democratic Senator Sherrod Brown called the plant's $16 an hour rate "poverty-level wages" and a "national disgrace" at the end of July.2 Analysts see the Ultium deal as a benchmark for battery workers' labor rights as electric vehicles become more common.3

Despite the wage hike, the proposed rate for battery workers is still lower than that of traditional UAW workers who assemble engines and cars.4 Those workers voted Friday to authorize a strike if an agreement isn't reached, which would cost the economy as much as $5.6 billion, according to one estimate.

UAW and GM's joint venture reach a tentative deal that gives battery workers a wage hike

Jamie L. LaReau, Detroit Free Press
Thu, August 24, 2023 

The United Auto Workers and Ultium Cells LLC have reached a tentative agreement on wages at the battery cell plant in northeast Ohio that would provide an immediate, across-the-board wage increase and back pay for those who qualify, if the hourly workforce ratifies it.

Ultium Cells is the joint venture owned by General Motors and battery maker LG Energy Solution. It makes battery cells for the EV batteries GM uses in its new EVs powered by the Ultium propulsion system. That includes the GMC Hummer EV, Cadillac Lyriq, Chevrolet Silverado EV and Chevrolet Blazer EV, which started shipping to dealers late last month.

In a statement released by Ultium on Thursday evening, it said the deal is still pending a membership ratification vote, which is expected to conclude on Sunday. But, if ratified, then effective Monday, all Ultium hourly employees’ wages will be increased. The average wage increase being about 25%.

There are about 1,150 union members at the plant, the UAW said, adding that the starting wage there is $16.50 an hour. This tentative agreement would push that up to a little more than $20 an hour.

The interim wage increase will be retroactive, so active current hourly employees will receive back pay for every hour worked since Dec. 23, 2022, Ultium Cells spokeswoman Katie Burdette said in a statement to the media. Any current employee who has worked since Dec. 23 can receive payment of $3,000 to $7,000, based on hours worked.

Only the first step

In December, the hourly workforce at Ultium Cells voted to unionize the plant near Lordstown, Ohio, after the union and the company spent months at odds over the organizing process.

“This agreement is a significant and meaningful step as we continue to negotiate collaboratively and in good faith with the UAW to reach a comprehensive contract," Ultium Ohio Plant Director Kareem Maine said in a statement.

Josh Ayers, UAW Local 1112 chairman, said in a statement that the interim wage increase is only the first step as the union and company continue to work on "a fair and comprehensive contract."

"The UAW Local 1112 members working at Ultium Cells deserve this increase for being essential in getting the plant up and running," Ayers said. “While an entire ‘first’ agreement is being negotiated, the committee is still hard at work in bargaining working conditions, health and safety, seniority rights, addressing other issues raised by the membership and future wage increases throughout the term of this agreement.”
Working conditions remain an issue

The fact that a tentative agreement has been reached is remarkable considering how critical UAW President Shawn Fain has been of joint ventures, which he sees as a strategy whereby a company can circumvent the union's negotiated wages and benefits in its national contract by starting a new business — the joint venture — with a new workforce.

Utlium Cell's wages and working conditions have been contentious during negotiations. The bargaining team traveled to Washington, D.C., earlier this summer to talk to policymakers "about issues such as exposure to chemicals that are not yet regulated by OSHA (Occupational Safety and Health Administration) and how employees are getting sick and passing out," Fain said during a Facebook Live presentation earlier this summer.

UAW President Shawn Fain greets dozens of union members during a rally and practice picket near the Detroit Assembly Complex - Mack in Detroit on Wednesday, Aug. 23, 2023.

He has advocated pulling that workforce into the national agreement the union has with GM, Ford Motor Co. and Stellantis so that hourly workers at Ultium Cells get similar pay and benefits. A spokesman for the UAW said Fain's position has not changed in that he continues to seek agreements with battery makers that are on par with the national agreement in terms of pay, safety and other benefits.

The UAW is renegotiating its national contract that covers some 150,000 UAW members across the Detroit Three. The current contract expires at 11:59 p.m. on Sept. 14.

Industry experts have said any lucrative agreement at this Ultium plant likely signals that Ultium's two other plants — one being built in Spring Hill, Tennessee, and the other in Lansing — will likely also vote yes for union representation. All three Ultium plants will be near GM assembly plants, which are already union-represented. GM will build a fourth battery plant in New Carlisle, which is about 15 miles west of South Bend, Indiana, with partner Samsung SDI, due to open in 2026.