The GM Ultium Cells electric vehicle (EV) battery joint venture has announced a significant wage increase for its workers at the Ohio plant in response to growing concerns and criticism over low wages. This decision comes after some U.S. senators raised objections to the facility’s practice of paying workers as little as $16 an hour.
Ultium Cells is a partnership between General Motors and LG Energy Solution. The wage hike proposal is now awaiting ratification by the workers, with the new wages set to take effect on August 28th. According to the United Auto Workers (UAW) union, this wage increase will translate to an average boost of $3 to $4 per hour for the employees.
Importantly, this interim wage increase will be retroactive to December 2022, ensuring that workers receive compensation for their efforts during this period. Depending on the number of hours worked, some employees may receive substantial retroactive payments ranging from $3,000 to $7,000.
In explaining their decision, Ultium Cells stated that providing this wage increase is the right course of action for their team members, acknowledging the need for improved compensation. It’s important to note that these workers voted in favor of joining the UAW union in December but have not yet secured a formal labor contract. Ultium Cells expressed its commitment to ongoing negotiations with the UAW to establish a comprehensive contract, including final wage scales.
UAW President Shawn Fain welcomed this wage increase as a positive step toward economic justice for the workers contributing to GM’s electric vehicle future. This move comes after months of public pressure and worker organizing.
Notably, this development is part of a broader context where major U.S. automakers, including GM, Chrysler-parent Stellantis, and Ford Motor, are in negotiations for new labor agreements covering a combined 146,000 workers before the expiration of their current contracts on September 14th. The UAW has indicated that the results of a strike authorization vote will be disclosed shortly.
Criticism from Democratic senators and the UAW regarding low wages at the Ohio Ultium plant has been prominent. They have pointed out that some workers at this facility earn only half as much as their counterparts did at a nearby GM assembly plant that has since closed. Such disparities have raised questions about economic fairness, with comparisons being made to the considerable compensation of top executives, including GM CEO Mary Barra.
U.S. Senator Sherrod Brown and other senators from Ohio and beyond decried the $16 per hour starting wage in joint venture EV battery facilities as a “national disgrace.” They argued that this wage level represents poverty-level earnings while the companies, executives, and investors reap significant financial gains. In July, 28 senators, including Senate Majority Leader Chuck Schumer, called for battery workers to be included in national labor agreements, a proposal that Ultium Cells rejected.