President Biden has tapped senior advisor Gene Sperling to lead negotiations between automakers and United Auto Workers (UAW) labor unions at Stellantis, Ford, and General Motors plants. Detroit Free Press Automotive Reporter Eric Lawrence joins Yahoo Finance Live's Seana Smith to break down union demands, including cost of living adjustments as automakers profit off of booming auto sales, as well as job security as more auto companies pivot towards EV adoption.

This post was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: I want to get to another big story that we're following.

President Biden tapping advisor, Gene Sperling, as the administration's point person during the current labor union negotiations for auto workers.

The UAW making it clear that, whether or not there is a strike, it's up to the automakers GM, Stellantis, and Ford.

Negotiations, well, they kicked off this week.

First with Stellantis, now, today, with Ford.

Here to map out the road ahead for the auto industry, we want to bring in Eric Lawrence, Detroit Free Press automotive reporter.

Eric, it's good to see you.

So before we get into what exactly the union workers are asking for, just give us a sense of how significant this is and what's at stake.

ERIC LAWRENCE: Well, this is a significant round of talks.

It comes with a backdrop of the transition to electric vehicles.

So it's a key moment for the industry.

A lot of changes within the industry.

So the union is looking for protections for its workers.

Many of them work in powertrain and a lot of the vehicles obviously tied to internal combustion engine.

So a lot of those jobs, there are questions about a lot of those jobs in the long-term.

Part of what the union has staked out has been the need for job security.

And they point to plants that have been idled or closed, places like Belvidere, Illinois, where Stellantis had made its Jeep Cherokee.

Those are some of the issues.

And of course, the union also wants to ensure that the jobs, that some of the new battery plants also have comparable wages to what folks at the other auto facilities have.

SEANA SMITH: Yeah, Eric.

You mentioned there the transition to EVs and how union workers are a little bit worried about what that could mean for their jobs going forward.

Are they worried that we could see more job cuts as a result?

And just break down exactly why that could be the case.

ERIC LAWRENCE: Well, one of the key things is the fact that EVs, they have fewer parts.

So there will be likely to be fewer people needed to produce these vehicles.

And a lot of the jobs that have been in the auto industry in the past, they won't necessarily transition over easily.

So they have to-- the workers that are there, if they're working in some areas, will need to learn new skills.

Battery plant work is going to be different than an assembly line work.

And you'll see the need for that kind of a transition.

SEANA SMITH: Eric, what are you hearing from automakers?

We're going to hear quarterly results later this month.

But in terms of how they are meeting or how they are, I guess, listening to the union workers' demands, how open are they to making some of these changes?

ERIC LAWRENCE: Well, automakers, what they've said is they have a need for flexibility.

There's a big focus on China right now.

China recently became the top auto exporter in the world.

And they're going to be-- that's an area where the focus has been on electric vehicles.

So these automakers, they're global.

They see the global picture, so they're concerned about that.

The automakers have been tremendously profitable.

That's part of what the UAW has been focused on.

One of the things they've been referencing is the, they say, quarter of a trillion dollars in profits in the last 10 years.

So the industry has been doing quite well.

Stellantis is the owner of Jeep, RAM, Dodge, Chrysler.

That company made, what?

$18 billion last year in profit.

So while they stress the need to be competitive, they're also talking to the union at a time when they've been very profitable for years.

We don't necessarily expect to see a big change in the upcoming quarterly results.

We expect they're still doing well.

Even during the pandemic when there were issues with supply chains, things like that, they were able to maintain pricing pressure.

Now, some of that's expected to ease a little bit.

But they've basically-- even though they've maybe not sold as many vehicles as they could have, those vehicles are at really high average transaction prices.

So they're doing OK on that front, too.

SEANA SMITH: Eric, the timeline of these talks, the fact that it started with Stellantis yesterday, I believe, four got underway today, GM next week.

Is it normally at the same time?

Or have the union workers taken a different approach in the past?

And why would that be the case?

ERIC LAWRENCE: Well, right now it's starting out pretty similar in terms of timing.

They get started in the summer.

There are some initial meetings.

This is just early days in this process.

And just so the specifics with which companies are going first right now, I don't know if that's so significant.

Normally, at some point, the union would announced a lead company.

And then when they-- and then that would be the company they would do the main kind of negotiations with.

And they'll set a pattern for the other automakers to follow.

We're not sure what the union's going to do this time.

The union president has said the Detroit 3 is the target.

So they've been careful with how they frame that.

So we're not sure.

The automakers themselves, they indicate that they're taking it seriously.

They think they expect they'll get to some kind of an agreement.

But this is a different time.

The union is talking in terms that they probably haven't talked in a long time.

They've kind of come out swinging.

They've kind of put the automakers on notice and they've told the workers that they expect to fight for a lot this contract.

So we'll have to see how it turns out.

The contracts are in effect until mid-September.

And so we won't see a lot of action probably for the next couple of weeks, but it'll start to heat up certainly next month.

SEANA SMITH: Well, Eric, we've heard from a number of analysts.

It sounds like, largely speaking, they expect a strike.

Do you?

ERIC LAWRENCE: Well, that's kind of the expectation.

The UAW has not done anything to dissuade us from that.

There have been some strikes at some suppliers.

There's been a lot of talk about the need to be-- the need to take action and to stand up.

I don't think anybody would be surprised to see a strike.

Precisely which automaker it might be, we've heard many number of scenarios.

I would not be surprised to see a strike.

I don't know that a strike is always inevitable.

Obviously, the automakers and a lot of folks connected to the industry are quick to point out the cost of a strike.

But I'd say that a lot of the rank and file are pretty motivated this time around.

And even four years ago, the UAW struck then and maybe it didn't seem so pressing to folks then.

So we'll have to see.

SEANA SMITH: All right.

Well, we will follow the negotiations.

And like you said, the contracts are set to expire in September.

Eric Lawrence, great to have you.

Thank you so much for joining.

ERIC LAWRENCE: Thank you very much.