The False ‘Green Jobs’ Promise – WSJ
July 21 | Posted by mrossol | Biden, Big Govt, Economics, EnvironmentSource: The False ‘Green Jobs’ Promise – WSJ
‘Folks, when I think about climate change—and I’ve been saying this for three years—I think jobs,” President Biden said Wednesday. Then why is Ford Motor Co. planning to lay off thousands of workers to fund its government-mandated electric vehicles?
Bloomberg broke the news Wednesday that the Detroit auto maker is preparing to slash as many as 8,000 jobs to boost the company’s profits to finance its EVs that are struggling to make money. Ford plans to spend $50 billion to make two million EVs annually by 2026, which is a steep ramp-up from the 27,140 it sold last year.
That $50 billion has to come from somewhere. And that somewhere is its internal-combustion engine vehicles, which CEO Jim Farley said in March need “to be more profitable to fund this.” That means job cuts, and perhaps price increases too.
It’s not unusual for businesses to use profits from one division to finance investments that aren’t expected to pay off for many years. New technologies can generate labor efficiencies. The United Auto Workers union estimates that increasing EV manufacturing could result in the loss of 35,000 union jobs because it requires fewer parts.
The problem is that government climate mandates are driving and distorting investment decisions. Asked about the job cuts on Thursday, a Ford EV executive said “to move fast in this space, smaller is better,” adding that “we need to scale EVs quickly in the US, and that is one of the aspirations in the Administration.”
The Biden Administration recently finalized new greenhouse-gas emission standards that are a de facto EV mandate. Traditional auto makers will have no choice but to churn out more EVs or buy credits from EV makers such as Tesla and Rivian. California has banned the sale of new gas-powered cars by 2035, and other states are following.
Auto makers are spending heavily on advertising to convince Americans to buy EVs that governments are forcing them to produce and are pricing them to move. Ford’s base model Lightning F-150 pickup costs $39,974, a mere $10,000 more than its gas-powered version.
But battery material costs are surging, driving up EV manufacturing costs. Ford said Thursday it will begin using cheaper but much less powerful lithium-iron phosphate battery packs for its Mustang Mach-E and Lightning. It plans to import the batteries from—you guessed it—China, at least until battery factories in North America can produce at scale.
We wish Ford luck. But when government steers investment, consumers and workers invariably bear the cost. Let’s hope taxpayers won’t have to bail out auto makers if their government-driven EV investments crash and burn.
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