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DETROIT Auto companies must consider their workers and communities through higher environmental protections and higher wages in the transition to electric cars, a panel made up of labor officials, investors, and human rights activists, said Wednesday.
In response to the growing demand from countries and regions around the world, such as China and Europe, which want to reduce carbon emission, the global auto industry is moving to EVs.
Investors are putting increasing pressure on companies regarding environmental, social and corporate governance issues. Automakers are not only moving ahead with the EV rollout but also working to ensure a steady supply of battery minerals.
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The transition to a net zero economy will have a significant impact on every business, said Illinois State Treasurer Michael Frerichs at a conference hosted by the Council of Institutional Investors. This group includes public, corporate, and union employee benefits funds.
He said that companies have a responsibility towards their investors, their communities, and their workers to prepare them for this transition. We cannot let them pretend that they don’t have to make any changes.
At the Washington event, speakers stated that part of that push included good-paying jobs as well as access to union representation in the plants.
Cindy Estrada, vice-president of the United Auto Workers union which represents most U.S. hourly employees at General Motors Co., Ford Motor Co. and Stellantis, stated that the key to ensuring worker jobs and wages during the EV transition is to protect them.
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She said that we could end up doing this shift and lower workplace standards. This was citing the many EV battery plant openings in the United States. She stated that the average hourly wage for a battery plant worker is $17, compared to the $30-plus earned by current engine plant workers.
Elon Musk, CEO of Tesla Inc, invited the UAW to hold a vote for workers at the EV leaders California facility. Although UAW officials have not commented on Musk’s invitation, Musk has been hostile towards the union in the past.
Ten advocacy groups, including Sierra Club, Greenpeace and Greenpeace, urged Rivian Automotive Inc to join labor unions in November. Rivians Illinois’ workers are not unionized.
Richard Kent, Amnesty Internationals researcher for human rights and energy transition, said that investors must use their leverage to push for greater transparency and ask tough questions of companies.
SOC Investment Group hosted Wednesday’s panel. This group is an advisor for union pension funds that have assets of more than $250 billion. SOC had Rivian quizzed last fall about its battery supply chain. (Reporting from Ben Klayman in Detroit Editing: Matthew Lewis)