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The United Auto Workers’ strike is getting bigger. One week into the union’s historic work stoppages against major car makers, the UAW on Friday walked out of dozens of more factories across 20 states.
The UAW’s targeted strikes against General Motors, Stellantis and Ford began after the union’s contract with the companies expired at midnight on Sept. 14. At the time, 13,000 workers walked out of three assembly plants — and union leadership warned that more locations could be impacted there wasn’t significant progress in contract negotiations.
Bargaining continued Thursday, although neither side reported any breakthroughs, and on Friday the UAW announced it would be walking out of 38 more General Motors and Stellantis parts distribution centers. Another 5,600 workers joined the strike — meaning that about 13% of the union’s 146,000 members are now on the picket lines.
Ford was spared additional strikes Friday because the company has met some of the union’s demands during negotiations over the past week, UAW President Shawn Fain said.
The UAW is seeking big raises and better benefits — pointing to CEO pay raises and profits that the three companies have raked in recent years. They also want to get back concessions that the workers made years ago.
Meanwhile, the Detroit Three say they can’t afford to meet the union’s demands because they need to invest profits in a costly transition from gas-powered cars to electric vehicles. In the last week, tensions rose as the companies laid off a thousands of workers, saying some factories are running short on parts because of the strike.
On the consumer side, with no immediate end in sight, the strike could also cause significant disruptions to auto production in the United States down the line. Here’s a rundown of what you need to know.
1) WHAT DO WORKERS WANT?
The union is asking for 36% raises in general pay over four years — a top-scale assembly plant worker gets about $32 an hour now. In addition, the UAW has demanded an end to varying tiers of wages for factory jobs; a 32-hour week with 40 hours of pay; the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans; and a return of cost-of-living pay raises, among other benefits.
Perhaps most important to the union is that it be allowed to represent workers at 10 electric vehicle battery factories, most of which are being built by joint ventures between automakers and South Korean battery makers. The union wants those plants to receive top UAW wages. In part that’s because workers who now make components for internal combustion engines will need a place to work as the industry transitions to EVs.
Currently, UAW workers hired after 2007 don’t receive defined-benefit pensions. Their health benefits are also less generous. For years, the union gave up general pay raises and lost cost-of-living wage increases to help the companies control costs. Though top-scale assembly workers earn $32.32 an hour, temporary workers start at just under $17. Still, full-time workers have received profit-sharing checks ranging this year from $9,716 at Ford to $14,760 at Stellantis.
Fain himself has acknowledged that the union’s demands are “audacious.” But he contends that the richly profitable automakers can afford to raise workers’ pay significantly to make up for what the union gave up to help the companies withstand the 2007-2009 financial crisis and the Great Recession.
Over the past decade, the Detroit Three have emerged as robust profit-makers. They’ve collectively posted net income of $164 billion, $20 billion of it this year. The CEOs of all three major automakers earn multiple millions in annual compensation.
2) WHAT HAVE THE COMPANIES PROPOSED?
The automakers have moved closer to the UAW’s demands on wages, but a big gulf remains.
Ahead of the strike beginning last week, GM said it boosted its offer to a 20% wage increase, including 10% in the first year, over four years. Ford is also offered a 20% boost in pay. On Saturday, shortly after the strike began, Stellantis detailed its latest offer for cumulative raises of nearly 21% in hourly wages.
While they they appear to remain far apart on wage increases, Fain on Friday said that there had been “some real progress” made at Ford.
“We still have serious issues to work through, but we do want to recognize that Ford is showing that they are serious about reaching a deal… At GM and Stellantis, it’s a different story,” Fain said. Those companies, he added, have rejected the union’s proposals for cost-of-living increases, profit sharing and job security.
The companies have rebuffed the union’s demands as too expensive. They say they will spend vast amounts of capital in the coming years to continue to build combustion-engine vehicles while at the same time designing electric vehicles and building battery and assembly plants for the future, and can’t afford to be saddled with significantly higher labor costs.
They also contend that a lavish UAW contract would force up the retail prices of vehicles, pricing Detroit automakers above competitors from Europe and Asia. Outside analysts say that when wages and benefits are included, Detroit Three assembly plant workers now receive around $60 an hour while workers at Asian automaker plants in the U.S. get $40 to $45.
Beyond financial factors, tensions rose this week after The Detroit News reported that a spokesperson for Fain wrote on a private group chat on X, formerly Twitter, that union negotiators aimed to inflict “recurring reputations damage and operational chaos” on the carmakers, and “if we can keep them wounded for months they don’t know what to do.”
Ford and GM seized on the messages as a sign of bad faith by the UAW — with GM, for example, stating that “it’s now clear that the UAW leadership has always intended to cause months-long disruption, regardless of the harm it causes to its members and their communities.”
The UAW spokesperson, Jonah Furman, did not confirm writing the messages, which were linked to the same picture as his X account. He called them “private messages” that “you shouldn’t have,” the newspaper reported.
3) WILL A STRIKE CAUSE CAR PRICES TO RISE?
Eventually. Ahead of the strike, GM, Ford and Stellantis were running their factories around the clock to build up supplies on dealer lots. But that also put more money into the pockets of UAW members and strengthening their financial cushions.
At the end of August, the three automakers collectively had enough vehicles to last for 70 days. After that, they would run short. Buyers who need vehicles would likely go to nonunion competitors, who would be able to charge them more.
Vehicles are already scarce when compared with the years before the pandemic, which touched off a global shortage of computer chips that hobbled auto factories.
Sam Fiorani, an analyst with AutoForecast Solutions, a consulting firm, said the automakers had roughly 1.96 million vehicles on hand at the end of July. Before the pandemic, that figure was as high as 4 million.
Today, the strike’s impact is not yet being felt on car lots around the country — it will probably take a few weeks before we see any significant shortage of new vehicles, according to analysts. Prices could rise even sooner, however, if the prospect of a prolonged strike triggers panic buying.
4) COULD A STRIKE HURT THE ECONOMY?
Yes, if it’s long 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 — its total output of goods and services — and the Detroit automakers represent about half of the total U.S. car market.
During walkouts, workers are set to receive about $500 a week in strike pay — far short of what they earn while they’re working. As a result, millions of dollars in wages would be removed from the economy.
The automakers would be hurt, too. If the strike against all three companies reaches 10 days, it would cost them nearly a billion dollars alone, the Anderson Economic Group has calculated. During a 40-day UAW strike in 2019, GM lost $3.6 billion.
5) WHAT ARE THE POLITICAL RAMINFICATIONS OF THE STRIKE?
The UAW strike is also testing President Joe Biden’s claim that he’s the most pro-union president in U.S. history.
President Joe Biden tweeted that he will go to Michigan on Tuesday to join the picket line. “It’s time for a win-win agreement that keeps American auto manufacturing thriving with well-paid UAW jobs,” the tweet said.
Two of Biden’s top goals are expanding the middle class by supporting unions and fighting climate change, including through turbocharging the market for electric vehicles to reduce greenhouse gas emissions. But some in the UAW fear the transition will cost jobs.
Last week, Biden acknowledged the tension in remarks from the White House, saying the transition to clean energy “should be fair and a win-win for autoworkers and auto companies.” The president also made a plan — ultimately reversed — to dispatch top aides to Detroit to help push negotiations along — and prodded management to make more generous offers to the union, saying “they should go further to ensure record corporate profits mean record contracts.”
Meanwhile, former President Donald Trump sees an opportunity to drive a wedge between Biden and workers. He plans to bypass the second Republican presidential debate to visit Detroit next week — but he’ll also be greeted by criticism from union leadership that has said a second term for him would be a “disaster” for workers.
While the UAW has withheld an endorsement in the 2024 presidential race, its leadership has repeatedly rebuffed Trump. The Trump campaign has vigorously defended his record as pro-worker, but others say his first term was far from worker-friendly — citing unfavorable rulings from the nation’s top labor board and the U.S. Supreme Court, as well as unfulfilled promises of automotive jobs.
6) WHICH SIDE HAS THE ADVANTAGE?
It’s hard to say. The companies have plenty of cash on hand to withstand a strike. The union has its $825 million strike fund. But it would be depleted in just under three months if all 146,000 workers were to walk out. That’s where the targeted strikes come in — helping the union stretch its money if the walkout persists into this winter.
The union’s inability to organize U.S. factories run by foreign automakers represents a disadvantage for the union because those companies pay less than Detroit companies do.
But organized labor has been flexing its muscles and winning big contract settlements in other businesses. In its settlement with UPS, for example, the Teamsters won wages for its top-paid drivers 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 well below the numbers during the 1970s and 1980s.
