LARRY KUDLOW: This sets up a huge doom loop for the car business

I may not agree with everything the UAW is asking for in their current strike, but I do think they have a lot of important points on their side. Two key points are Bidenflation and Biden’s completely unbalanced, insane climate policies.  

On Bidenflation, remember when former President Obama negotiated the auto bailout back in 2009, the UAW agreed to forego cost-of-living adjustments in their contract. Hat-tip to Breitbart’s John Carney for reminding me of that one. So, they haven’t had a COLA increase in over 20 years.   

That was OK until recently when Joe Biden came into the White House and launched a left-wing spending frenzy, which the Federal Reserve playing along, at least until recently.   

The Consumer Price Index has increased almost 17% since Joe Biden took office. Necessities like food and gasoline have spiked 20% and over 60% respectively. So, their real wages have plunged and they’re not happy about it. Can’t blame them. Not surprisingly, one of the key union demands is the return of cost-of-living adjustments. 

FORD, GM AND STELLANTIS RESPOND TO UAW STRIKE 

The Big Three carmakers are so far holding out on this point, along with demands for outsized union wage and benefit demands, and the UAW has gone on strike in factories in Missouri, Toledo and Wayne, Mich. Then, there’s the issue of Biden’s lavish subsidies for electric vehicles, as embodied in the misnamed Inflation Reduction Act.  

Nobody knows how much those subsidies are going to be worth over time, but it’s going to be at least $500 billion. Probably a lot more, since there are no money or time caps. So, autoworkers are asking the guy who says he’s the most pro-union president in history: “Where are our subsidies?”   

Don’t take it from me. Take it from Pro-Union Joe himself:  

JOE BIDEN: I intend to be the most pro-union president leading the most pro-union administration in American history. I meant what I said when I said I’m going to be the most pro-union president in American history and I make no apologies for it… I’m proud to be the most pro-union president.

You couldn’t convince the union of all of that. The key point here is that Joe Biden’s EVs could spell the end of the UAW and union leaders know it. Studies have shown that EVs require only 40% of the hours worked, compared to gas-powered cars.   

The entire auto industry — including the knock-on effects for dealers, repair shops, gas stations, diners and who knows what else — could see a half-a-million jobs obliterated. Maybe even more. Plus, of course, the UAW faces stiff competition from right-to-work states in the South and elsewhere, where a lot of the EV car and battery subsidies are being invested.  

So, between the combination of Joe Bidenflation and his crazy climate policies, all this sets up a huge doom loop for the car business as it exists today and, remember, Bidenomics is jamming these climate policies down our throats, taking away consumer choice. People do not want to be told they can’t drive gas-powered cars.  

Does any of this save the UAW? I don’t know, but I don’t think they bargained on Biden’s price hikes and EVs and Chinese batteries. So maybe folks should think twice before they bash the UAW’s positions.   

Now, here’s a final thought. Take a read of Donald Trump’s Agenda47 whitepaper called “Rescuing America’s Auto Industry from Joe Biden’s Disastrous Job-Killing Policies.”  

The former president pledges to end the assault on the internal combustion engine and to cancel harmful emission regulations for trucks and cars. The former president would also end Biden’s insane CAFE fuel-economy standards. Trump would also revisit some USMCA cheating on regional auto parts content. Of course, the former president would reopen the spigots for liquid gold and “drill, baby, drill.” He intends to seek new reciprocal fair trade legislation.  

As far as I know, no other candidate in either party has a policy prescription to deal with any of these auto-related problems. So far, the UAW leadership has held back a Biden presidential endorsement, but I suspect in the end the leaders will throw in with the Democrat Party. On the other hand, I’m taking the over for rank-and-file autoworkers voting for Trump. You can bet on it. That’s my riff. 

This article is adapted from Larry Kudlow’s opening commentary on the September 15, 2023, edition of “Kudlow.”