Why are UAW workers striking?
The UAW strike, so far limited to three plants, is now in its fifth day.
DETROIT – About 13,000 auto workers walked off the job last week at three targeted plants after union leaders were unable to reach an agreement with automakers.
The autoworkers union increased pressure on Detroit’s Big Three on Tuesday by threatening to expand the strike unless it sees major progress in contract negotiations by Friday.
“We’re not going to keep waiting while they drag this out… and we’re not going to riot,” Fain said in announcing at noon ET Friday the deadline to escalate the strike unless when there is “serious progress” in work. negotiations.
Ford, General Motors and Stellantis said they wanted to resolve the strike and did not directly criticize the escalating threat.
The strikes are currently limited to three assembly plants: a GM plant in Wentzville, Missouri, a Ford plant in Wayne, Michigan, near Detroit, and a Jeep plant operated by Stellantis in Toledo, Ohio.
As the strike enters its fifth day, here’s a summary of the union’s demands and what consumers could face in a prolonged strike.
Why are UAW workers on strike?
The United Auto Workers Union is looking for big salaries and better benefits from General Motors, Ford and Stellantis. They want to take back concessions that workers made years ago, when companies were struggling financially.
A small percentage of the union’s 146,000 members walked off the job at the GM assembly plant in Wentzville, Missouri; a Ford plant in Wayne, Michigan, near Detroit; and a Stellantis Jeep plant in Toledo, Ohio last week.
Shawn Fain, the combative president of the UAWsaid targeted strikes give unions an advantage in contract negotiations and leave auto companies guessing about their next move.
It could also keep the union’s $825 million strike fund alive even longer.
Both sides began exchanging proposals on salaries and benefits earlier this month. While some incremental progress appeared to have been made — General Motors made a new, richer offer just hours before the strike deadline — it was not enough to avoid a walkout. The strike could cause significant disruption to auto production in the United States.
What do auto workers want?
The union is demanding a 36% overall pay increase over four years – a top-scale assembly plant worker currently receives about $32 an hour. Additionally, the UAW has demanded an end to differential wages for factory jobs; a 32-hour work week with 40 hours paid; the restoration of traditional defined benefit pensions for new hires who currently receive only 401(k) style retirement plans; and the return of cost-of-living raises, along with other benefits.
Perhaps most important for the union is that it is allowed to represent workers at 10 electric vehicle battery factories, most of which are being built by a joint venture between Korean automakers and battery makers. The union wants those plants to receive the highest UAW wages. In part, that’s because workers currently making components 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 a defined benefit pension. Their health benefits are also less generous. For years, unions have abandoned general wage increases and zero cost-of-living increases to help companies control costs. While the highest-scale assembly workers earn $32.32 an hour, temporary workers start at just under $17. However, full-time workers still received profit-sharing checks this year ranging from $9,716 at Ford to $14,760 at Stellantis.
Fain himself admitted that the union’s demands were “bold.” But he argues that highly profitable automakers can afford to raise worker wages significantly to make up for what unions have given up to help companies weather the financial crisis. 2007-2009 and the Great Recession.
Over the past decade, the Detroit Three have emerged as strong profit generators. They posted total net income of $164 billion, including $20 billion this year. The CEOs of all three major automakers earn millions in annual compensation.
What did the companies propose?
Automakers moved closer to UAW demands on wages, but There is still a large bay.
Last week, GM said it was increasing its proposed salary increase by 20%, including 10% in the first year, over four years. “We are working urgently and have proposed another increasingly strong offer with the goal of reaching an agreement this evening,” Chief Executive Mary Barra said in a letter to employees.
Ford is also offering a 20% pay increase. Stellantis on Saturday provided details on its most recent offer to the union, which puts its salary proposal roughly in line with its competitors. Chrysler’s owners said their offer would yield a cumulative increase of nearly 21% in hourly wages, and an immediate increase of 10% if the contract is ratified.
Fain rejected these proposals as insufficient to protect workers from inflation and reward them for building the vehicles that had generated large profits for the Detroit Three.
Companies rejected the union’s request because it was too expensive. It said it will spend huge amounts of capital in the coming years to continue building combustion-powered vehicles, while also designing electric vehicles and building battery and assembly plants for the future, and cannot afford to incur significantly higher costs. labor costs.
They also argue that a lavish UAW contract would push up vehicle retail prices, causing Detroit automakers to charge higher prices than rivals from Europe and Asia. Outside analysts say that when wages and benefits are included, Detroit Three assembly plant workers now receive about $60 an hour while workers at Asian auto plants in the US receive get 40 to 45 USD.
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What happens next?
The UAW president said the union could choose more factories to strike in the coming days and it all depends on progress – or lack of progress – at the bargaining table.
“If companies continue to bargain in bad faith or continue to stall or continue to make insulting offers to us, our strike will continue to grow,” Fain said. The union strategy, he said, “will keep companies guessing” about how unions can escalate the fight.
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How will the auto workers’ strike impact auto prices?
Final. GM, Ford and Stellantis have been running their factories around the clock to increase supply to dealers. But it also puts more money in the pockets of UAW members and strengthens their finances.
At the end of August, a total of three automakers had enough vehicles to operate for 70 days. Then they will run short. Buyers who need a car will likely go to non-union competitors, who can charge more.
Vehicles were already scarce compared to years before the pandemic, causing a global shortage of computer chips that hit auto factories.
Automakers had about 1.96 million vehicles on hand at the end of July. Before the pandemic, that number was as high as 4 million, said Sam Fiorani, an analyst at consulting firm AutoForecast Solutions.
“A shutdown of three weeks or more would quickly deplete excess supply, increase vehicle prices and drive more sales to non-union brands,” Fiorani said.
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Could an autoworkers strike hurt the economy?
Yes, if it lasts and especially in the Midwest, where most auto plants are concentrated. The auto industry accounts for about 3% of the U.S. economy’s gross domestic product — the total output of goods and services — and Detroit automakers account for about half of the total U.S. auto market.
If there is a strike, workers will receive about $500 in strike pay per week – much lower than what they earn while working. As a result, millions of dollars in wages will be eliminated from the economy.
Automakers will also be hurt. Anderson Economics Group calculated that if a strike against all three companies lasted just 10 days, they would lose nearly a billion dollars. During the 40-day UAW strike in 2019, GM alone lost $3.6 billion.
The strike could also test President Joe Biden’s claim that he the most pro-union president in American history.
Which side has the advantage?
It’s hard to say. Companies have plenty of cash on hand to withstand a strike. The union has a strike fund worth $825 million. But it would run out in just under three months if all 146,000 workers strike. That’s where targeted strikes come in – helping the union earn more money if the strike lasts into this winter.
The union’s inability to organize American factories run by foreign automakers disadvantages the union because those companies pay lower wages than Detroit companies.
But organized labor has shown its strength and won large contracts in other businesses. For example, in the deal with UPS, the Teamsters won the highest-paid drivers a wage of $49 an hour after five years.
So far this year, 247 strikes have occurred involving 341,000 workers — the most since Cornell University began tracking strikes in 2021, though still low far more than the numbers in the 1970s and 1980s.
