UAW Taking Aim at Tax Credits for Mexican-made EVs

The United Auto Workers has rekindled a long-running war about trade with Mexico but is now aiming at a new target — tax credits for battery-electric vehicles that car makers desire from the Biden administration.

The union wants to stop companies such as General Motors, Ford Motor Co. and Stellantis from using well-established production bases in Mexico as a platform to build and export electric vehicles to buyers in the United States.

It sounded the alarm recently when Ford indicated it was prepared to boost production of EVs in Mexico. It already builds the Ford Mach-E, which looks as if it is on the brink of becoming a major hit, at its Cuautitlán Assembly Plant in Mexico. Union negotiators didn’t initially fight the automaker’s desire to build it there because they underestimated or did not consider the appeal of EVs for customers.

Others following suit

Meanwhile, General Motors, which has been the most aggressive automaker in moving blue-collar jobs from the U.S. to Mexico, recently announced a $1 billion plan to update its manufacturing complex in Ramos Arizpe, Mexico to build new electric vehicles equipped with its Ultium battery platform.

The Ramos Arizpe plant is likely to EVs not only for GM, which has ambitious plans to expand its portfolio of battery-electric vehicles, but also for Honda. GM chairman Mary Barra said this week the GM-Honda collaboration continues to develop.

President Joe Biden also has indicated that one of his goals is to increase the number of electric vehicles on American roads, adding he wants them built by U.S. labor unions.

Union struggles to adapt to EVs

The union is still struggling to come to terms with the shift to EVs, which will ultimately mean phasing out thousands of jobs in plants building internal combustion engines and transmissions.

As the shift towards EVs continues to pick up momentum, the union says it plans to use organized labor’s influence to try and thwart plans to build EVs in Mexico or anywhere else except the U.S. 

“President Biden has been deeply committed to ensuring that legislation and subsidies create good paying jobs and benefits for U.S. workers in the transition to electric vehicles,” Terry Dittes, the vice president in charge of the UAW GM Department.

Dittes noted that current subsidies built into the tax code allows for foreign-assembled vehicles sold in the U.S. to receive the federally funded subsidy, which can be as high as $7,500.

UAW pressuring Biden for shift on credits

“The UAW is working with the Biden administration and Congress to make sure that the final legislation extending electric-vehicle subsidies are clear that those investments subsidize the jobs of U.S. workers. U.S. taxpayer money should never subsidize products assembled in Mexico or any other country. American made means American jobs,” Dittes said.Ironically, GM and Tesla, which also has tangled with the UAW, have exhausted the credits available to them under the current tax code; however, the union’s proposal could kill tax credits for the Ford Mach-E.

Source: https://www.thedetroitbureau.com/2021/05/uaw-taking-aim-at-tax-credits-for-mexican-made-evs/