Manchin Commitment to Unions Called Out in Electric Vehicle Spat

The union windfall that came from a 2019 pension bailout for coal miners is being cited as an example of why Sen. Joe Manchin (D-W.Va.), who supported organized labor then, should now accept an union-friendly electric vehicle tax credit as part of Democrats’ massive tax and social spending bill.

Sen. Debbie Stabenow (D-Mich.) said Manchin’s objection to the credit—that he says would pick “winners and losers” through taxpayer dollars—echoes opponents of a coal miner pension bailout two years ago.

“We rejected that argument and stood together to protect union pensions,” she said. “This issue is no different. Standing up for hardworking Americans is always the right thing to do.”

Photographer: Stefani Reynolds/Bloomberg

Sen. Debbie Stabenow (D-Mich.) supports the electric vehicle tax credit.

The two senators’ comments came ahead of President Joe Biden’s Wednesday visit to a unionized General Motors electric vehicle assembly plant in Detroit. Stabenow’s statement turns Manchin’s “winners and losers” argument on its head—if you support collective bargaining, it’s unfair to favor one type of union over another.

Manchin said last week that the proposed extra credit for union-made electric vehicles is “wrong,” but stopped short of saying he would upend the entire $1.2 trillion tax and spending package (H.R. 5376) because of the provision.

The tax credit as proposed has two parts: It would remove the cap on existing $7,500 tax credits for electric vehicles, effectively giving it to everyone who buys an electric vehicle. It would also provide people who buy U.S.-made electric cars from union shops a new incentive of an additional $4,500.

Stabenow is pushing for the credit because it would encourage manufacturers to build electric cars in union shops, helping auto workers in her state.

Environmental advocates say the tax credit would bolster cars made in the U.S. by union work forces. “We’re at this inflection point with respect to the future of the auto industry in this country and which path we go down depends quite a bit on what decisions lawmakers make right now,” said Jason Walsh, executive director of the BlueGreen Alliance, which focuses on collaboration between labor unions and environmental organizations. “It is entirely appropriate that our policies in this space, particularly when we are investing large amounts of taxpayer dollars, should create the fullest benefits for the American people.”

Likewise, the 2019 miner pension provision was a life boat for retired union coal workers—key constituents of Manchin’s West Virginia. Stabenow said last week that she and other senators took action on behalf of thousands of retired unionized miners, though the senators could’ve looked the other way on their plight because coal isn’t an important industry in their own states. But lawmakers instead supported the legislation, which put $750 million into the United Mine Workers of America pension fund, which was on the verge of insolvency.

The current back-and-forth on the electric vehicle tax credit is taking place as Democrats try to reach a consensus on the tax and spending plan, which will be advanced by a budget reconciliation process that provides no margin for opposition among Democrats in the evenly split Senate.

Manchin’s office didn’t respond to requests for elaboration on his remarks.

Union Benefit

The additional $4,500 electric vehicle tax credit would benefit unionized auto workers and the unions themselves, but wouldn’t aid well-known electric vehicle producers such as Tesla, where the United Auto Workers hasn’t seen organizing success. The auto workers union previously said the provision would “create and preserve tens of thousands of UAW members’ jobs.”

Foreign automakers, whose work forces in the U.S. mostly aren’t unionized, oppose the credit, which is one reason Republicans including Sen. Shelley Moore Capito (R-W.Va.) oppose the incentive. Manchin and Capito also tend to oppose provisions that de-emphasize coal, a major industry in their home state.

Capito says she’ll offer an amendment to the spending bill that would eliminate the additional credit, specifically saying workers at the West Virginia Toyota Motor Corp. plant where Manchin made his comment “would be at significant competitive disadvantage because cars made by unionized competitors would be $4,500 cheaper, courtesy of federal taxpayers.” The plant is non-union.

“Congress should not put its thumb on the scale and prioritize one American worker over another by tampering with competitive markets,” Capito said Nov. 9.

Stabenow countered that her proposal aims to get more American-made electric vehicles on the road, while ensuring that the workers making the cars have “good wages, benefits and safety standards.”

“While other countries are heavily subsidizing their automakers—who also happen to be unionized in their home countries—their companies are underpaying U.S. workers and spending millions on anti-worker attack ads,” Stabenow said Tuesday. “If unions are good enough for them in their home countries, then they are good enough for American workers.”

Walsh noted that foreign electric vehicle makers would still benefit from the base credit of $7,500.

Precedent Setting

Two years ago, Manchin viewed federal government investment in union pension plans as vitally necessary—standing up for what some view as a precedent-setting decision, according to James Naughton, an associate professor at the University of Virginia’s Darden School.

“What was really, I think, most surprising to people in the industry was the fact that the government was now stepping in and covering pensions that were agreed to through private contracts,” said Naughton. “It’s not that they spent the dollar amount, it’s that they set the precedent that the federal government is willing to step in and help union workers who have unfunded pension plans.”

Pro-union lawmakers now are saying the same concept should apply to American-made electric vehicles.

“This legislation would accelerate America’s transition to electric vehicles, create good-paying American and union jobs, all while helping to combat climate change,” Rep. Daniel Kildee (D-Mich.) said in an emailed statement. “When we spend American tax dollars, we should invest in American jobs that pay industry-leading wages and benefits and ensure the strongest worker protections. Unions built the American middle class.” Kildee, along with Stabenow, is pushing for the amendment.

Sen. Sherrod Brown (D-Ohio) said supply chain investments are necessary to keep pace with demand and the future of the global market.

“I want to see those technologies developed in America, and to put people to work in America with good-paying, union jobs in growing industries, where you can build a career and raise a family,” Brown said in an emailed statement. “We have a tremendous opportunity to create a new wave of 21st century auto jobs, and to ensure that American autoworkers lead this industry for decades to come.”

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Robin Meszoly at rmeszoly@bgov.com