On Thursday, Energy Secretary Jennifer Granholm informed reporters that the Biden administration is offering a total of $12 billion in grants and loans to car manufacturers and their suppliers. This financial support will help them update their factories to produce electric vehicles and other advanced automotive technologies.

“As we move towards EVs, our priority is to enable workers to shift roles without displacement, ensuring no worker or community is neglected,” conveyed Granholm, who previously governed the car manufacturing state of Michigan. She communicated this during a call with reporters.”

Rapidly providing grants and additional financial support to facilitate the transformation of current automobile factories for electric vehicle production might assist the White House in addressing concerns from both automakers and the United Auto Workers (UAW) union. These concerns pertain to proposed environmental regulations designed to facilitate the transition to the era of electric vehicles.

The UAW has warned that a rapid change could put thousands of jobs at risk in states such as Michigan, Ohio, Illinois and Indiana.

UAW members voted decisively last week to approve the authorization of a potential strike at the Detroit Three automakers. This authorization depends on whether an agreement on wages and pension plans is reached before the current four-year contract expires on September 14th.

“I don’t know that this will impact the collective bargaining,” Granholm said, adding that the administration has spoken with automakers, auto workers, and communities.

Shawn Fain, the President of UAW, has been actively working to rescue a Jeep factory in Belvidere, Illinois. Stellantis (NYSE: STLA) had plans to close down the factory, but they haven’t ruled out the chance of transforming it to produce a new product with the help of government assistance.

When asked if the funding could keep the Stellantis plant open, Granholm said plants built up around communities are “prime for taking advantage of these funding opportunities.”

Companies can receive funding without having to meet specific work-related demands. However, a person from the Energy Department mentioned during a call that projects with better working conditions are more likely to be chosen for funding.

Out of the total funding, $2 billion for the advanced vehicles will be sourced from the Inflation Reduction Act passed by Democrats last year. An additional $10 billion will be provided by the Energy Department’s Loans Program Office, as stated by Granholm.