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Summers: Deal on Battery Plants Between UAW, Big 3 Will Be Harder to Reach than an Agreement on Wage Increase

September 23, 2023
in General
Summers: Deal on Battery Plants Between UAW, Big 3 Will Be Harder to Reach than an Agreement on Wage Increase
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During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers argued that it will be more difficult for the UAW and automakers to reach an agreement on things like battery plants for electric vehicles than it will be to reach an agreement on the size of wage increases or pensions.

Summers stated, “Look, it’s always easier to compromise on numbers…like how big is the wage increase going to be, than it is on principles, like what’s going to happen to the battery factories. It’s easier to compromise on numbers, like the size of pension packages, than it is on questions like changing the separate wage structure for recently hired workers. So, they’ve still got questions of principle as well as questions of numbers separating them. So, this may go on for a while.”

He continued, “And I think there are two big questions: One is, what will the spillover be to the larger economy and to the Midwestern economy, including through price increases, if cars get scarce, what that means for automobile and used car prices? I also think there are some real questions here about when you have these highly publicized labor conflicts and you see what’s likely to be a big number for the wage increase. I suspect that’s going to give a lot of workers, in a lot of places, some pretty big ideas, and that may be a source of wage pressure as well, which complicates the issues around inflation. So, this is a very difficult thing to manage, and I suspect it’s going to be one of those things that will be with us for quite a while.”

Follow Ian Hanchett on Twitter @IanHanchett

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