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Biden Caused These Green Job Losses With His Climate Tax Act

by Editorial Board
December 14, 2022, 10:16 AM
in News and Opinion
Reading Time: 3 mins read
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car plantPresident Biden sold the Inflation Reduction Act (IRA) as a giant climate jobs program, but then how does he explain what happened Friday at the Stellantis Jeep Cherokee plant in Belvidere, Illinois?

Some 1,350 workers are losing their jobs so the automaker can finance its government-mandated and subsidized electric-vehicle expansion. [emphasis, links added]

Stellantis broke the news to workers on Friday that it will idle the Cherokee plant in February, citing “the increasing cost related to the electrification of the automotive market.” Merry Christmas!

The Jeep Cherokee has been a popular model, though the plant has cut shifts since 2019.

But Stellantis, which formed through the merger of France’s PSA Group and Italian-American Fiat Chrysler, needs to come up with the money to finance the more than $35 billion that it plans to invest in EVs over the next few years. Government industrial policy doesn’t give the company much of a choice.

Europe and several U.S. states have announced plans to ban the sale of new internal-combustion engine vehicles by 2035.

Stellantis spent $2.4 billion to buy regulatory credits from Tesla between 2019 and 2021 to comply with green mandates.

The Biden fuel economy mandates could force it to spend more unless it ramps up EV production.

The Inflation Reduction Act’s generous credits for battery production and EV buyers are modestly easing the costs of this government-forced transition.

Many automakers currently use profits from gas-powered SUVs and trucks to subsidize EVs that are losing money.

They hope that sweetened government subsidies will eventually make EVs profitable, but in the meantime, companies need to choose where to make investments and where to cut back.

Liberals pretend that the transition to EVs won’t come at a cost to workers or businesses. But taxpayers won’t foot the entire bill, which could cost hundreds of billions of dollars industrywide.

Workers at Stellantis’s Cherokee plant are the collateral damage of this government-forced reallocation of capital. We’re waiting for Sens. Sherrod Brown and Bernie Sanders to plead for the workers here.

The United Auto Workers is denouncing Stellantis for laying off workers. “Not allocating new products to plants like Belvidere is unacceptable,” UAW President Ray Curry said.

What did he expect? The union-backed stricter fuel economy mandates and the IRA subsidies, even though its own studies showed the shift to EVs could cost 35,000 jobs.

Technological change disrupts markets and leads to some job gains and losses. But the problem here is that the government is overriding market forces and picking the winners and losers.

Automakers’ enormous investments in EVs are largely driven by political choices, not consumer choices. Politicians in Washington and state capitals, not business owners or executives, are calling the shots.

Labor dislocations caused by government climate subsidies and mandates will play out across the economy in the coming years.

At least in the current tight labor market, most workers who lose their jobs can probably find new ones, though they may be lower-paying or require moving.

But when government picks winners and losers, there are almost always more of the latter. The politicians don’t tell you about those.

Read more at WSJ

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Comments 2

  1. Spurwing Plover says:
    2 years ago

    The Democrats are totally in the pockets of the Nations leading Eco Freak Groups(Sierra Club, EDF, NRDC, Friends of the Earth, Earth Justice Etc.)and the UN Globalists as well Biden is a Traitor and a Globalists as well

  2. David Lewis says:
    2 years ago

    This article clearly shows how the Democratic Party no longer represents the best interest of the middle class. These decisions favoring electric vehicles in future manufacturing are going to be disastrous for the auto makers. Most American families can not afford an electric car. In addition most families can not afford to buy a band new conventionally powered car. One survey showed that 74% of drivers said their most recent vehicle purchase was a used car. Many families that do buy brand new cars can only afford to do so by selling their current vehicle as a used car. Electric vehicles simply are not viable on the used car markets. Their batteries wear out and are horrendously expensive to replace. To sum all this up, when the mandates against convention cars hit, there is not going to be the market for electric cars that the manufactures and various governments are anticipating. Political back lash will cause these mandates to be removed. At that point, the auto makers will have excess capacity to manufacture electric vehicles, and be critically short in their ability to make convention cars.

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