Leading Off: Is Sparkz A Just Transition Model?

In May 2022, the United Mine Workers of America reached an agreement with Sparkz, a battery manufacturer, to employ union members at the company’s planned factory in West Virginia. The site, a 482,000-square-foot (4.5-hectare) plant in Taylor County off U.S. Route 50 near Bridgeport, is slated to commercialize zero-cobalt batteries and, according to the company’s plans, will initially employ 350 workers, with that number growing, perhaps, to 3,000.

At the time of the announcement, UMWA International President Cecil E. Roberts said. “We have lost thousands of mining jobs over the last decade in West Virginia. This is a first step to putting some of those people back to work in good, well-paying, family-sustaining jobs. We look forward to working with SPARKZ to build on this initiative as traditional energy workers meet the challenges of the ongoing energy transition.”

For our purposes, we ask the fundamental question: does the Sparkz agreement with the mine workers meet the principles of the UMWA’s transition strategy? And is it a model for other Just Transition efforts?

We don’t know for certain yet—as of this writing, an actual collective bargaining contract is still in the works but we’ve been told the wages will be comparable to existing coal contracts.

To be sure, it’s a positive sign that a company is, out of the gate, bringing in the union on the ground floor of the project before ground is even broken on the plant’s site. That, in of itself, is a bigger development than all the hot air rhetoric of a COP27—because, at the end of the day, collective bargaining is the only path to ensure workers get a “high bar” Just Transition (with, where needed, an infusion of public money to top off, and even enhance, incomes and pensions).

We had a chance to pose some questions about this tie-up to the CEO of Sparkz, Sanjiv Malhotra. His background, as you will see, raises the possibility that he’s a unicorn CEO and, thus, it might be hard to extrapolate from the tie-up with the UMWA to other Just Transition efforts. The conversation below is edited for length and clarity—and we will keep up with the progress of this effort as it unfolds.

Just Transition For All: This is not an environment where companies want to work with unions. You did so from the beginning even before putting the first shovel in the ground. Why?

Sanjiv Malhotra: I actually grew up around unions. Before I knew my alphabet or my numbers I knew what a union was. My dad was a civil engineer, working in steel and in coal. unions were something that were not alien to me, their leaders would be at my house, talking to my dad. The fascination with the industry, labor union leader how they wanted to bring the best for their members and trying to make sure they were not exploited. And in 1975 an incident happened that changed my whole family. There was an accident in Chasnala. There was this mine and water leaking from the wall of the mine, and the wall broke and flooded the mine and 375 miners perished. My dad was the chief engineer and, by that time, the general manager of the mine. My father, at that point, decided to give up his position and train as a lawyer in England and started representing unions and workers for 40 years after that, working as an arbitrator and lawyer, always for the benefit of workers. [JTFA note:

JTFA: Why West Virginia?

SM: I had gone on a rafting trip with a friend of mine once in West Virginia. As a grad student back then, we looked for the cheapest fare, so we landed in Pittsburgh and drove to West Virginia and I made a mental note that I will do something in West Virginia. My first company I did a little R and D project in West Virginia and when I started Sparkz it was set in stone I was going to do something in West Virginia. Exactly a year ago, I was invited to the White House by Brian Deese, President Biden’s national economic advisor. Luck favors the folks who have the vision. And guess who was sitting next to me? Mr. [Phil] Smith of the mineworkers. Phil and I shook hands, we started talking, he asked me what I was doing. And when I told him I had just been in West Virginia, he told me represented the UMWA and I was totally flabbergasted and asked him, “Is that the truth or are you just making it up?”. That’s how our friendship started. That was my positive destiny.

JTFA: Henry Ford would say he had to pay workers enough so they could buy his cars and consumer spending accounts for 70 percent of the economy. So, that’s what Just Transition comes down to. If we don’t take care of all these people who are moving into different kinds of jobs because of de-carbonization we will have a very sick economy over the long haul. So, in your mind is this also about smart economics?

SM: For sure. One thing is the emotional connection to West Virginia but the other is economics. What do we get when we work with the UMWA? We get a very disciplined work force, a workforce that is a highly trained workforce in safety which is integral to battery manufacturing. We need safety of the process, we need safety with the product and that starts with workers. Twenty percent of the cost of battery manufacturing is labor, 80 percent is materials. When someone comes to me and tells me we sent it to China because it’s cheap labor, I say, “shut up, that’s nonsense, you don’t know what you are talking about.”

JTFA: The truth is that companies like Wal-Mart and others go to China because it is the greatest market for cheap labor, that’s why companies go there…

SM: I sold Oorja [Protonics], my company, to a Chinese private equity firm [MinXing Growth Fund]. I spent a lot of time in China so it’s not that I’m oblivious to what’s happening there. The fuel cells we were making here, in Fremont (California), were costing, and it’s a private company, so I’ll say X dollars and they take it to China and they said we can reduce it by about 30 percent in China. The cost was not reduced because of labor, the cost was reduced because they compromised on the quality of the fuel cells. If we were getting 1,000 hours of life from the fuel cells before, in China, they are making it and selling it with only 400 hours. An entrepreneur who really wants to create a world class quality product needs the best labor. Here, we have rules and regulations to ensure safety of the product and safety of the process.

JTFA: Generally speaking, re-training has been a failure. Part of the reason is that people got thrown into under-funded government-run programs, and that was true for the defense industry and for the Trade Adjustment Assistance programs. It sounds like you are doing your own re-training directly: you hire a mine worker and train that person.

SM: We are working with the UMWA, with its career center to provide the training. The training that is being done is making sure that they understand safety principles, basic reading and writing skills so they can understand instructions. We have a 16-week detailed training protocol which we will work with the career center to implement.

JTFA: Once they go through the career center training, they come to you?

SM: Yes, we will train the first group and then they can then train up the next group. Not all of the people will have to go through a 16-week training, for example, if you are a materials handler or a forklift operator. It just depends on the job.

JTFA: You are now in the process of working out a collective bargaining agreement and as we understand it those wages and benefits will be comparable to the wages earned in the mines.

SM: Actually, this morning I was meeting with our operations manager and business manager to go through that. It will be very competitive with what they were making in the mining industry. We are not going to be hard balling, hard negotiating, saying you were making X dollars and because you don’t have a job now I’ll come and give you less, no, that’s not what it [will be]. We have to make sure firstly that they will have the right hourly wage, the right medical benefits and other plans like a pension plan.

JTFA: And the union will be representing the workers?

SM: Yes. The UMWA is a very good partner for us.

JTFA: If you had a platform and you were speaking to CEOs around the world about Just Transition, what’s your message to them about engaging workers and unions?

SM: I don’t know what just Transition is, I’ve heard about it. In my humble opinion, if I’ve started a company, it’s basically to ensure that all the stakeholders are satisfied as the company evolves: the employees, customers, suppliers and my investors. So, employees are where I start.

---

SPONSOR MESSAGE

A message from the Australian Mining And Energy Union

We are fighting back, not just for ourselves but for the future generation of mineworkers. Workers deserve better. Our families and communities deserve better. Visit us

---

Spotlight: California Pilot Project

---

Ideas: Searching For Journalists Who Aren’t Parrots

Here is a novel idea, perhaps unmatched for its historical audacity: can we hope for, recruit or demand that journalists, who actually write about climate change transition, have even a small clue about workers and aren’t just enthralled by the “green” marketplace? And that the same journalists actually read and think, rather than just regurgitate what they are handed in press releases, so they can ask the most basic questions and inform debate in more than a superficial fashion.

To wit. We learn in this article various things:

Across the globe, governments and developers are pouring hundreds of billions of dollars into large offshore wind farms like Beatrice to meet climate-change goals.

And:

Jobs in building and maintaining offshore wind farms, and at their suppliers, increased about 16 percent last year to 31,000, with about a third of them in Scotland, according to the Offshore Wind Industry Council.

And:

Many people who honed their skills on the offshore oil platforms that dot the waters off Scotland find it relatively easily to switch to the wind industry.

And the companies will do just fine:

Beatrice also makes a load of money. In the year that ended on March 31, it recorded an operating profit of £218 million on total revenues of £393 million — or about £1 of operating profit for every £2 of revenue.

The presence of such an outsize business has been a boon to Wick, a town of about 7,000 people whose heyday was more than a century ago, when small fishing craft blanketed its port. Beatrice has paid to clean up the harbor area, including £20 million to renovate two stone buildings to use for the control center and building docks for the boats that go out to the farm. Beatrice’s owners have also provided £6 million for local improvements like new lights around the harbor and wheelchairs for a beach.

BP is promising jobs:

BP alone anticipates that its plans for offshore wind may support around 300 jobs at the company, helping it maintain a sizable presence in Scotland, where it now has about 900 employees. Richard Haydock, an oil industry veteran who now heads BP’s Scotwind program, said about half of new hires for wind would come from jobs in fossil fuel. Maintaining the large wind farm that the company plans to build will require staffing “fairly comparable” to an offshore oil field, he said.

But, there is not one word in this article—not a single word—about the wages that will be paid.

This isn’t an anomaly. The overwhelming majority of articles and broadcasts in media outlets across the globe talk expansively about the job promises being made in future “green” jobs—but few media reports, if any, drill down into the most important question: what will workers be paid? And so the reader is left without knowing: will those wages come close to what a worker was earning before? To paraphrase something the U.S. Rev. Jesse Jackson once said: “Even slaves have jobs”.

We can’t have a serious discussion about what Just Transition looks like if the actual wage rates are not part of the conversation.

It’s not that hard a task—journalists should ASK what the wage and benefit rates are and, then, discuss whether what is being promised will make workers whole. If companies won’t give specifics, that should be noted in the article.

---

Opinion: Just Transition Through Collective Bargaining—Lessons From Chile

By Bruno Dobrusin

For the first time, a union in Chile has negotiated just transition clauses into their collective bargaining process. The process started in 2021 when the confederation of subway workers’ unions (FESIMETRO) began a process of engagement with the ITF and the concept of just transition with regards to subway workers. Workers were well aware of the impacts of climate change and the introduction of new technologies in their workplaces, but they had not had the opportunity to debate it, connect with global just transition discussions, and eventually implement it at the local level.

The union, representing over 1,500 workers in Santiago’s subway system, started a process of consultation with its own members, as well as a coordination with other public transport unions that represented different modes of transport (buses, taxis, motorcycles). The goal was to think of a just transition strategy that integrated the needs of the different groups of workers who intervene in public transport, and coordinate a collective response.

As the consultations and discussions with the members expanded, it became clear that the issue of new technologies being introduced to make the subway system more efficient and environmentally sustainable was affecting workers negatively. While the technologies in themselves could improve workers’ health, and sometimes overall working conditions, the lack of consultations, the rush introduction and the lack of adequate planning meant that workers and the union were not actively involved, and often without the time to produce a comprehensive response.

At the new collective bargaining round that started in May 2022, one of the subway unions in the federation, the Union of Subway Workers (Sindicato Metro in Spanish, the largest of the four unions in the federation), decided to put climate change and a just transition at the centre of the negotiations. This meant a long process of internal consultation with members, understanding the issues and making sure that they would build enough pressure on the employer to take them up while in negotiations.

In July 2022, after two months of tense negotiations, the union and the employer announced that they had come to an agreement on the new CBA, and that it would incorporate the first just transition clauses in the subway’s history. The clauses are opened by a chapter that puts climate change front and centre, as a major concern for workers and the subway system as a whole. It recognizes that the climate crisis will have impacts on operations and working conditions, and that therefore employers need to work with unions to address these consequences.

The agreement creates a Bipartite Just Transition Consultative Committee, composed of workers and employers, that will be consulted with every major introduction of new technologies and production processes. The committee will operate as a consultative body where workers will be able to address concerns and challenges of the introduction of new technologies, and also introduce their own proposals to be considered by the company.

Although initially focused on the issue of technology, the agreement opens the door for addressing other climate related issues within the context of the subway’s operations, making it very the first of its kind in the country (and possibly the region). It also dictates gender parity among committee members.

These are the sorts of radical, practical changes that we need to see if we are to make just transition a reality across the transport sectors.

Dobrusin is a project coordinator for the International Transport Workers Federation.

---

Links

Sparkz: a company set to employ members of the United Mine Workers of America in a West Virginia factory commercializing high energy-density cobalt-free, lithium-ion batteries.