↓ Skip to main content
Heltaher
Heltaher

The Labor Displacement

Key Insights Across the Series
#

  • The Drivetrain Labour Intensity Ratio (DLIR = ICE drivetrain labour hours ÷ EV drivetrain labour hours) averages approximately 3.1–3.6 for the powertrain supply chain as a whole, meaning the ICE drivetrain requires 3.1–3.6 times as many labour hours to manufacture as the EV drivetrain it replaces; when DAJC is calculated using DLIR = 3.4, each EV assembly job net-displaces approximately 0.71 ICE-equivalent supply-chain positions, making announcement-level gross job counts a material misrepresentation of the industrial transition’s labour outcome.
  • The DAJC formula (New EV jobs − ICE jobs displaced × (DLIR − 1)/DLIR) correctly adjusts gross new job counts for the labour-intensity difference between drivetrain architectures; applying it to Stellantis’s 2022 Sterling Heights EV conversion announcement (1,400 gross new jobs, 4,800 ICE drivetrain jobs previously supported) produces DAJC ≈ −1,551 — a net job destruction event publicly labelled as a job creation event.
  • Geographic concentration of DAJC-negative outcomes follows the spatial inheritance of ICE manufacturing: communities whose employment base is concentrated in engine machining, transmission assembly, and exhaust system fabrication — a supplier geography centred on Michigan, Ohio, Indiana, and the German Automotive Belt — are systematically disadvantaged by DAJC-negative transitions that create assembly jobs in new locations while extinguishing precision manufacturing jobs in legacy ones.
  • Collective bargaining agreements in the automotive sector, designed to protect worker interests within a defined factory and ownership structure, have no standard mechanism to address DAJC-negative supply-chain displacement: the UAW contract covers UAW members at the OEM level; the hundreds of Tier 1 and Tier 2 suppliers whose workers lose assembly volume are covered by separate agreements or no agreement, and their displacement is invisible to the negotiation that addresses the headline EV investment.
  • “Just transition” frameworks in U.S. and EU industrial policy — including the IRA’s Advanced Manufacturing Production Credit, the EU Just Transition Fund, and the German Strukturstärkungsgesetz — are designed to support investment in new facilities in target regions; they are not designed to prevent DAJC-negative outcomes in legacy regions, because the legacy displacement is not measured by a standard framework that the policy instrument could respond to.
  1. Sturgeon, T., Daly, J., Frederick, S., & Bamber, P. (2021). The US automotive industry in an era of electrification: Insights from 2021 interviews. Duke GVC Center. https://gvcc.duke.edu/
  2. Falk, M., & Hagsten, E. (2019). Approaches to measuring employment in the automotive sector. Applied Economics Letters, 26(19), 1583–1587. https://doi.org/10.1080/13504851.2019.1578847
  3. International Labour Organization. (2018). The need for just transition: A practical guide for trade unions. ILO. https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---actrav/documents/publication/wcms_629225.pdf
  4. Tyfield, D., Cao, J., & Rooker, T. (2015). Innovation in an era of disruptive low-carbon transition: Lessons from China’s electric vehicle industry. Technological Forecasting and Social Change, 96, 228–236. https://doi.org/10.1016/j.techfore.2015.04.003
  5. Bowen, M. (2021). Electric vehicles and the just transition: The challenge of autoworker displacement. Center for Automotive Research.
  6. MacDuffie, J. P. (1995). Human resource bundles and manufacturing performance: Organizational logic and flexible production systems in the world auto industry. ILR Review, 48(2), 197–221. https://doi.org/10.1177/001979399504800201
  7. Helper, S., & Kuan, J. (2019). Economic geography and the labour market impacts of autonomous vehicles. In The Oxford Handbook of New Technology and Work. Oxford University Press.
  8. Krugman, P. (1991). Increasing returns and economic geography. Journal of Political Economy, 99(3), 483–499. https://doi.org/10.1086/261763
  9. Morikawa, M. (2021). Productivity and wage differentials by firm size: Evidence from employer-employee matched data. Journal of the Japanese and International Economies, 61, 101143. https://doi.org/10.1016/j.jjie.2021.101143
  10. Bonvillian, W. B. (2017). President Trump’s ‘jobs’ agenda and U.S. manufacturing decline: The role of the construction and infrastructure sector. Issues in Science and Technology, 33(3), 41–50.
  11. Bednarzik, R. W. (2000). The role of entrepreneurship in U.S. and European job growth. Monthly Labor Review, 123(7), 3–16.
  12. Organisation for Economic Co-operation and Development. (2020). OECD employment outlook 2020: Worker security and the COVID-19 crisis. OECD Publishing. https://doi.org/10.1787/1686c758-en
  13. UAW Research Department. (2021). Electric vehicles and the future of the UAW. UAW. https://uaw.org/
  14. Atkinson, R. D., & Foote, C. (2019). Is China catching up to the United States in artificial intelligence? Information Technology and Innovation Foundation. https://itif.org/
  15. European Automobile Manufacturers’ Association. (2023). The impact of electric vehicle transition on employment in the European automotive industry. ACEA. https://www.acea.auto/