Ford Motor Company is separating electric vehicles from traditional businesses, threatening massive job cuts and poverty wages

Ford Motor Company will separate the manufacture of electric vehicles (EVs) from its traditional gasoline vehicle sales business, the auto giant announced earlier this month. The official announcement was accompanied by a promise to invest huge sums in the global race for electric vehicle sales. Ford will invest $30 billion in electric vehicles, a massive injection that likely won’t translate to profits for years. To pay for this, the company plans to wind down its internal combustion business to squeeze the most profit.

The automaker expects electric vehicles to account for 30% of global sales within 5.5 years by 2030. The new electric vehicle unit will be called Ford Model e, while the combustion side will now be known as Ford Blue. The two units, as well as the recently created Ford Pro which focuses on commercial and government fleet buyers, will collaborate in some areas but operate substantially independently of each other, measuring profit and loss as separate entities.

Ford Motor Company World Headquarters (WSWS Media)

Ford has set the bar for cutting structural spending by $3 billion before 2026, by “streamlining” its old factories. Ford plans to produce 2 million electric vehicles in 2026, well above the 600,000 electric vehicles expected next year.

“We’re literally splitting the company in half,” CEO Jim Farley said. Its strategy is to “strengthen our efficiency…by making the most of existing capabilities, adding new skills where they are needed, simplifying processes and reducing costs”.

Hedge fund managers and corporate investors, who had held Ford shares at advantageous levels for more than a decade as they demanded profit margins comparable to those of Tesla and Amazon, applauded Farley’s announcement. , boosting Ford shares more than 8% on the same day.

When Farley became CEO at the end of 2020, he called himself an “agent of change” within the company. Since becoming CEO 16 months ago, Farley, 59, has accelerated Ford’s EV plans, tripling production of the Mustang Mach-E and doubling production of the F-150 Lightning due out this spring.

Last September, Farley poached Doug Field, head of Apple’s electric car project and a former senior Tesla executive. As president of the Model e division, Field’s task will be to make the former automaker “more nimble.” “Cost cutting, streamlining, disruption” are all buzzwords for massive attacks on production workers’ jobs and whatever remains of their wages and working conditions.

To drive the point home, the new president of the internal combustion sector, Kumar Galhotra, added: “We will be hyper competitive on costs and make quality a reason to choose Ford. And by doing all of this, Ford Blue will be a cash and profitability engine for the entire company.

Compared to the traditional internal combustion vehicle, an electric vehicle requires far fewer moving parts and reduced labor to manufacture. Widespread job destruction is the order of the day, as the company plans to add an even lower fourth tier of very low-wage production workers, starting with its new battery factories.

Cutting jobs and cutting wages to the bone is the reality behind President Biden’s remarks in the State of the Union address focused on promoting American competitiveness in the emerging electric vehicle market, in which Chinese manufacturers have taken the lead. Biden cited Ford’s $11 billion investment in a joint venture with South Korean company SK Innovation to build 3 battery factories in Tennessee and Kentucky and General Motors’ $7 billion investment in batteries. electric vehicle facilities in Michigan as examples of companies that “choose to build new factories here when just a few years ago they would have built them overseas.

He falsely claimed in his speech that this would lead to “well-paying union jobs at Ford and GM,” but in fact Biden is looking to use the corrupt United Auto Workers union to cut wages like he did during the bailout of the auto industry in 2009 as Obama’s vice president.

To get an idea of ​​what to expect, autoworkers should take a close look at what happened at GM’s assembly plant in Lake Orion, Michigan, which produces the Chevy Bolt EV and the Chevy Cruise, an experimental autonomous vehicle (AV).

In 2018, UAW Vice President GM Cindy Estrada signed a secret memorandum of understanding allowing the company to get rid of full-time workers and run the plant using contractors from GM Subsystems, a fictional company founded in 2009 just before GM went bankrupt. These workers earned much less than regular employees, but still had to pay union dues. GM has since announced a $4 billion investment in the Lake Orion plant, as part of its own plans to increase production of electric vehicles.

In response to Ford’s reorganization, the union offered absurd lies to conceal its role both in the past and in the future. “As has always been the case,” said UAW Vice President for Ford Chuck Browning, “the best interests of our members remain at the forefront of discussions with Ford to ensure the safety of the jobs and shared prosperity as Ford emerges as a leader in electric vehicle manufacturing.”

It is an insult to the intelligence of autoworkers. They all know full well that the UAW has colluded with the automakers for decades, carrying out endless rounds of job and wage cuts, cynically justified in the name of “job security.” As for “shared prosperity,” that is only true for the UAW bureaucracy itself. Thanks to illegal kickbacks of the type that led to the indictment of more than a dozen top UAW officials in a recent investigation, as well as legal kickbacks still more lucrative, including corporate stocks, control of investment funds and billions funneled to “joint training centers”. and other labor-management systems, the UAW has been fully integrated into management.

The company’s announcement is part of a fierce international fight between major automakers over market share and profit margins in the booming electric vehicle market. In the same week as Ford’s announcement, Stellantis CEO Carlos Tavares pledged to spend $36 billion on electrification and software within 8 years and deliver the world’s first electric vehicle. company by 2025. Stellantis expects to sell 5 million electric vehicles by 2030, with 100% of its sales in Europe and half of its sales in North America.

In 2019, during the nationwide strike at General Motors, WSWS explained the vast transformations of the global auto industry that were already underway:

For the financial aristocracy, the defeat of the strike is a strategic question and not a short-term one. Amid growing signs of a global economic slowdown and sweeping technological shifts, Wall Street is seeking a broader restructuring of the global auto industry and a shift of capital toward electric and self-driving vehicles. Although not yet profitable, these technologies promise immense returns to investors regardless of which global automaker dominates the market.

This will, however, require the destruction of what remains of the social rights of autoworkers. The auto industry must impose the conditions prevailing among tech giants like Tesla, Amazon and Google. Rather than hoping for long-term employment, annual raises, medical coverage and a post-retirement pension, autoworkers will face the same hyper-exploitation as workers in the so-called Gig Economy.

The “Amazonization” of the global auto industry means that future workers will be low-paid contract workers or “permanents” who can be hired and fired at will, depending on which direction the economic winds are blowing.

Wall Street is bracing for a fight that will have broad implications for the future of workers at Ford and Fiat Chrysler, at every auto and auto parts plant in the United States and across the planet, and for workers in every economic sectors.

The attack on autoworkers also follows international lines. In Europe, unions and union-dominated works councils have pitted Ford workers in Saarlouis, Germany, and Valencia, Spain, in a bidding war to secure production of a new electric vehicle. . Investment location will be based on which plant can offer the most concessions, with losers losing their jobs.

There is also a tug of war not only for market share but also for government support. The tax credits proposed by Biden for the purchase of electric vehicles would only apply to vehicles produced with union labor, that is to say in companies where the exploitation of labor -work takes place with the collaboration of the pro-corporate union bureaucracy.

That would favor heavily unionized Detroit automakers over their non-union rivals, including the two foreign automakers that produce vehicles in non-union factories in the southern United States, as well as the Tesla-owned electric vehicle startup. libertarian billionaire Elon Musk. Musk recently reacted with a series of sarcastic tweets, “hereby inviting” the UAW to hold an election at his factory in Fremont, Calif., while making his opposition to the UAW clear.

However, the UAW would function no less like a corporate union at Tesla than it already does at Detroit Three. Indeed, one of the goals of Biden’s tax credit is to encourage corporations to use unions as a bulwark against grassroots opposition from below.

Biden’s worst fear is that this opposition, which will grow enormously in response to attacks on workers’ living standards pushed alongside the transition to electric vehicles, will find an independent outlet.

About Robert Pierson

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