The UAW strike is getting bigger. The United Auto Workers union walked out of dozens of plants in 20 states on Friday, a week after the union launched a historic work stoppage at major automakers.
The UAW began targeted strikes against General Motors, Stellantis and Ford after the union’s contracts with General Motors, Stellantis and Ford expired at midnight on September 14. At the time, 13,000 workers were on strike from three assembly plants and union leaders warned that more sites could be affected without significant progress in contract talks.
Negotiations continued Thursday, but neither side reported any breakthroughs. On Friday, the UAW announced it would withdraw from 38 more General Motors and Stellantis parts distribution centers. A further 5,600 workers are on strike, meaning about 13% of the union’s 146,000 members are currently on picket lines.
UAW President Shawn Fain said Ford was spared from more strikes Friday because the company met some of the union’s demands during negotiations over the past week.
The UAW is seeking big pay raises and better benefits — a reference to CEO pay increases and profits the three companies have received in recent years. They also want to roll back concessions workers made years ago.
Meanwhile, the Detroit Three say they can’t afford to meet union demands because they need to invest profits in a costly transition from gasoline-powered cars to electric vehicles. Tensions increased last week as the companies laid off thousands of workers, saying strikes at some factories resulted in parts shortages.
On the consumer side, the strike could also cause significant disruption to U.S. auto production as there is no immediate sign of an end to the strike. Here’s an overview of what you need to know.
1) What do workers want?
The union is demanding a 36% overall wage increase over four years – a top assembly plant worker now earns about $32 an hour. In addition, the UAW is calling for an end to different wage levels for factory jobs; a 32-hour work week with 40 hours pay; and a return to traditional defined benefit pensions for new employees, who now only receive a 401(k)-style retirement plan. ; and the return of benefits such as cost-of-living pay increases.
Perhaps most importantly for the union, it can represent workers at 10 electric vehicle battery plants, most of which are built by joint ventures between the automakers and South Korean battery makers. The union wants these plants to receive maximum UAW wages. That’s partly because workers who now make parts for internal combustion engines will need a place to work as the industry transitions to electric vehicles.
Currently, UAW workers hired after 2007 do not receive defined benefit pensions. Their health benefits are also less generous. For years, the union has given up on general wage increases and cost-of-living increases to help companies control costs. While top assembly workers earn $32.32 an hour, temporary workers start at just under $17. Still, full-time employees received profit-sharing checks this year, ranging from $9,716 at Ford to $14,760 at Stellantis.
Fearn himself admitted the union’s demands were “bold”. But he believes the highly profitable automakers can afford to significantly raise wages for workers to make up for the wages unions gave up to help the companies weather the 2007-2009 financial crisis and Great Recession.
Over the past decade, the Detroit Three have become powerful profit generators. Collectively, they reported net profits of $164 billion, including $20 billion this year. The CEOs of the three major automakers make millions of dollars a year.
2) What suggestions did the company make?
Automakers have gotten closer to UAW wage demands, but there’s still a huge gap.
Before the strike began last week, General Motors said it would raise wages to 20 percent over four years, with a 10 percent increase in the first year. Ford also received a 20% pay increase. On Saturday, shortly after the strike began, Stellantis detailed its latest offer for a cumulative nearly 21% increase in hourly wages.
While they still appear to be far apart on the pay raise, Fein said Friday that Ford has made “some real progress.”
“We still have serious issues that need to be addressed, but we do want to recognize that Ford is showing they are serious about doing a deal… At GM and Stellantis, it’s a different story,” Fein said. He added that the companies had rejected union proposals for cost-of-living increases, profit sharing and job security.
The companies rejected the union’s demands as too costly. They say they will spend a lot of money in the coming years to continue making internal combustion engine cars while designing electric vehicles and building batteries and assembly plants for the future, and cannot afford significantly higher costs. labor cost.
They also believe the generous United Auto Workers contract will drive up retail vehicle prices, allowing Detroit automakers to charge higher prices than rivals in Europe and Asia. Outside analysts say that if wages and benefits are included, workers at Detroit Assembly Plant 3 now earn about $60 an hour, while workers at Asian automaker plants in the United States earn $40 to $45.
In addition to financial factors, the Detroit News reported this week that a spokesperson for Fain wrote in a private group chat on damage and operational disruption,” before tensions grew. If we leave them injured for a few months, they won’t know what to do. “
Ford and GM viewed the messages as a sign of UAW dishonesty, with GM saying, for example, that “it is now clear that UAW leadership has been intent on causing months-long chaos, regardless of the harm it caused to people.” its members and their communities. “
UAW spokesman Jonah Furman did not identify the author of the messages, which linked to the same photo as his X account. He called them “private information” that “you’re not supposed to see,” the newspaper reported.
3) Will the strike cause car prices to rise?
finally. Before the strike, General Motors, Ford and Stellantis were all running plants around the clock to increase supply to dealers. But it also puts more money in the pockets of UAW members and strengthens their financial cushion.
As of the end of August, the three major automakers had enough vehicles in total to last 70 days. After that, they’ll be in short supply. Buyers who need a vehicle may go to non-union competitors, who can charge them more.
Cars are already scarce compared with years before the pandemic, which triggered a global shortage of computer chips and left car factories in trouble.
As of the end of July, automakers had about 1.96 million vehicles in inventory, said Sam Fiorani, an analyst at consulting firm AutoForecast Solutions. Before the pandemic, that number was as high as 4 million.
Today, car markets across the country are yet to feel the impact of the strike — and analysts say it could be weeks before we see a serious shortage of new cars. However, prices could rise faster if the prospect of a prolonged strike triggers panic buying.
4) Will strikes harm the economy?
Yes, if it’s a long time, especially in the Midwest where most of the auto plants are concentrated. The auto industry accounts for about 3% of the U.S. economy’s gross domestic product (total output of goods and services), and Detroit automakers account for about half of the total U.S. auto market.
During the strike, workers will receive strike pay of about $500 per week – far less than what they would have earned on the job. As a result, millions of dollars in wages will be wiped out of the economy.
Automakers will also be hurt. Anderson Economic Group calculated that if the strike against the three companies lasted 10 days, they alone would lose nearly $1 billion. During the 40-day UAW strike in 2019, General Motors lost $3.6 billion.
5) What was the political impact of the strike?
The UAW strike is also testing President Joe Biden’s claims that he is the most pro-union president in U.S. history.
President Joe Biden tweeted that he will travel to Michigan on Tuesday Join the picket line. “Now is the time for a win-win deal that keeps American auto manufacturing thriving with good-paying UAW jobs,” the tweet said.
Two of Biden’s top goals are to expand the middle class by supporting unions and fighting climate change, including reducing greenhouse gas emissions by boosting the electric vehicle market. But some in the UAW worry the shift will cost jobs.
Last week, Biden acknowledged the tension in White House rhetoric, saying the transition to clean energy “should be fair and a win-win for auto workers and auto companies.” The president also developed a plan (which was ultimately reversed) to send top aides to Detroit to help push for negotiations and to urge management to make more generous offers to the unions, saying “they should go further to ensure that record corporate profits mean record profits.” Contracts.”
Meanwhile, former President Donald Trump sees an opportunity to drive a wedge between Biden and workers. He plans to visit Detroit next week, bypassing the second Republican presidential debate, but he will also face criticism from union leadership, who say his second term would be a “disaster” for workers.
While the UAW has declined to support a 2024 presidential bid, its leadership has repeatedly rebuffed Trump. The Trump campaign has vigorously defended his record of supporting workers, but others say his first term was far from worker-friendly — citing adverse rulings by the U.S. Supreme Labor Council and the U.S. Supreme Court , and the promise of auto industry jobs that went unfulfilled.
6) Which side has the advantage?
Hard to say. These companies have plenty of cash on hand to withstand strikes. The union has an $825 million strike fund. But if all 146,000 workers strike, the funds will be exhausted in less than three months. That’s where targeted strikes come in – helping unions save money if strikes continue into this winter.
The union’s inability to organize U.S. plants run by foreign automakers is a disadvantage for the union because wages at those companies are lower than those at Detroit companies.
But organized labor has been flexing its muscles and winning big contract settlements at other businesses. For example, in a settlement with UPS, the Teamsters won a $49-an-hour wage for its highest-paid drivers after five years.
So far this year, there have been 247 strikes involving 341,000 workers, the most since Cornell began tracking strikes in 2021 but still well below numbers in the 1970s and 1980s.