About 13,000 workers go on strike seeking better wages and benefits from Detroit’s three automakers

THE UNITED AUTO Workers want the Big Three automakers to share the wealth. The powerful union is poised to strike at midnight on Thursday, when its current contracts expire unless the companies meet aggressive demands including big raises and a restoration of old benefits.

The stakes are high — and not just for the auto industry and its workers. The standoff is a challenge for Joe Biden, who needs the backing of labor in the midwest in 2024 but could lose politically if a prolonged strike hobbles the economy or worsens inflation. 

Can new UAW president Shawn Fain pull off a big win for his workers, and how could a strike impact Donald Trump, non-union car maker Tesla, and even Elon Musk? Here’s what you need to know:

How is business at the Big Three car companies?

The public bailouts of the Great Recession are a distant memory. The Big Three giants — Ford and GM and the European conglomerate Sellantis (which subsumed FiatChrysler in 2021) — have been rolling in it. They’ve made $20 billion in profit over the first six months of 2023 and roughly a quarter of a trillion in North America over the last decade. The companies have been returning cash to shareholders with lucrative stock buybacks and dividends.

What are the union’s demands?

In line with these sky-high corporate earnings, the UAW workers are seeking “double-digit” pay increases, of as high as 40 percent, as well as a restoration of union rights and norms that were negotiated away during the industry’s existential crisis more than a decade ago. 

Representing nearly 150,000 workers, the UAW seeks the elimination of “tiers,” under which newer employees sign on for lesser pay and lower benefits than veteran workers. In these times of plenty for carmakers, the union also wants a return to a defined pension benefit instead of 401(k)s, and retiree medical benefits. Members are also seeking the reinstatement of a guaranteed cost of living adjustment, or COLA, to counter inflation, and broader strike rights, including over attempted plant closures. (Find a full list of the union’s substantive demands here.) “Record profits mean record contracts,” union president Shawn Fain told his members.

Is a strike inevitable?

The Big Three have been negotiating with the union, individually. The companies have been willing to bargain on wages, but top offers have maxed out the range of 20 percent over four-plus years, rather than the 40 percent the union has sought. The companies have been willing to look at ending tiers and improving wages for temporary employees. However, the companies have kept discussions of other key benefits off the table.

In a Facebook live event with union members Wednesday afternoon, Fain said UAW and the Big Three were “still very far apart on our key priorities.” He warned members that “we’re likely going to have to take action” while insisting, “I’m at peace with the decision to strike if we have to.”

Alternately quoting scripture and former UCLA basketball coach John Wooden for inspiration, Fain declared that any blame for the strike rests with the automakers who “chose to squander” weeks of negotiation time while choosing greed over amicable labor relations: “The Big Three can afford to immediately give us our fair share.”

What would the strike look like?

The UAW is planning a historic strike. It is the first time the union could strike all of the Big Three companies simultaneously. Fain insists the automakers will find themselves confronting “a well-organized and pissed-off workforce.”

However, the union president made clear that, initially, this will not be a across-the-board work stoppage. Instead, UAW is plotting something akin to rolling blackouts, beginning with strikes on a “limited number of targeted locations,” Fain said while vowing that the strikes “will continue to grow” if the companies “continue to bargain in bad faith or give us insulting offers.”

The strike is a big test for Fain, who became the union’s boss only five months ago. But he insists that UAW will win a favorable contract “by any means necessary.” If the Big Three “keep playing games,” he warned, “we have the power to keep taking plants out.” And if push comes to shove he added: “An all-out strike is still a possibility.” 

What are the stakes for Americans?

A short strike, particularly of limited factories, is unlikely to cause any nationwide economic distress. However, a prolonged strike, and a full work stoppage, could quickly produce economic pain. A 10-day all-out strike, according to one recent estimate, could cost the economy $5 billion. 

Perhaps more troubling, an extended strike could produce an inflationary jolt — by lowering vehicle supply and disrupting the car makers’ supply chains — at a time when both workers and Wall Street alike are eager for price increases to slow, and for the Fed to reduce interest rates.

This macroeconomic context is plainly shaping the standoff. In his address to workers, Fain sought to counter-narratives that UAW workers “are the problem,” insisting that the auto companies exacerbated inflation by “price gouging the hell out of the American consumer.” Corporate America, he said, is going to “pretend that the sky will fall” in response to the strike, but he insisted that they don’t actually care about the working class: “It’s the billionaire economy, that’s what they’re worried about.”

What are the political stakes?

Despite low unemployment and the fact that America has so far skirted a formal recession, polls show Americans remain in a sour mood over the economy and the still-painful bite of inflation.

Biden — a lifelong “car guy” — has enjoyed strong labor support. But he has also been willing to take drastic measures to keep the economy on track, as when he signed a bill last December that blocked a strike by rail workers that could have further fouled the nation’s supply chains.

Biden and Fain spoke on Labor Day, and the president recently expressed optimism about avoiding a strike. But the president has stopped short of fully backing autoworkers, pressing the Big Three to remain at the negotiating table. The UAW, in turn, has not yet endorsed Biden for 2024, and Fain has pointedly insisted: “Our endorsements are going to be earned and not freely given.”

GOP frontrunner Donald Trump has sought a political opening amid the labor strife, blasting Biden’s “Green New Deal crusade” to electrify the U.S. vehicle fleet and increase mileage standards, and warning of a coming “slaughter” of autoworker jobs. He appealed to the UAW, saying: “I think you better endorse Trump because I’m going to grow your business.” (Fain — in response — advised union voters to steer clear of Trump, whom he painted as anti-worker and “part of the billionaire class.”)

What does the unrest have to do with electric cars?

The threatened strike comes at a moment of transition for the auto industry as it moves aggressively into electric vehicles. Tesla — which the UAW has so far failed to unionize — pays workers substantially lower hourly wages even as it has built a huge lead on the Big Three in terms of electric vehicles, controlling roughly 60 percent of the U.S. market.

Biden’s signature Inflation Reduction Act has steered billions into electric car and battery development. But labor guarantees have not been linked to that cash infusion. Workers in factories that produce batteries for electric cars are generally not unionized and/or pay is well below prevailing union wages. 

Electric car manufacturing also requires less labor than assembling internal combustion vehicles, posing a long-term threat to the size of the carmakers’ workforce. The UAW is not opposing the transition. “We support a green economy. You know, we have to get behind this,” Fain said recently. But he has insisted that the electric automotive workforce needs union protection: “If we don’t secure this work … it’s not going to be a good future for anyone.”

The United Auto Workers union says it will go on strike at three vehicle assembly plants as it presses Detroit companies to come up with better wage and benefit offers.

The factories include a General Motors assembly plant in Wentzville, Missouri; a Ford factory in Wayne, Michigan, near Detroit; and a Stellantis Jeep plant in Toledo, Ohio. Only assembly and paint shop workers will walk out at the Ford plant.

Contracts between 146,000 auto workers and the companies are set to expire at 11:59 p.m. Thursday. Workers will stay on the job at all other plants.

“Time is of the essence,” union President Shawn Fain told workers late Thursday in an online address less than two hours before the deadline.

With a deadline looming, the United Auto Workers union and Detroit’s three automakers, General Motors, Ford, and Stellantis, remain far apart in contract talks and the union is preparing to strike.

With just over 24 hours left before a strike deadline, United Auto Workers President Shawn Fain says offers from Detroit automakers aren’t enough and the union is getting ready to strike.

Despite increased offers from Ford and GM, it appears that no deals will be reached before the contracts expire.

Fain said for the first time in the union’s 88-year history, the UAW will strike at all three companies at the same time. He said union bargainers have been working hard but have been firm in trying to reach fair deals.

About 13,000 workers at the three plants are preparing to walk off the job after contracts with the Detroit Three expire at 11:59 p.m.

Fain has said more walkouts could be scheduled if companies don’t move on bargaining. The companies, he said have made billions in profits during the past decade and can afford to pay workers more to make up for concessions made starting in 2007 to help the automakers in tough times. He says labor costs are only 4% to 5% of a vehicle’s cost.

“They could double our raises and not raise car prices and still make millions of dollars in profits,” Fain said. “We’re not the problem. Corporate greed is the problem.”

The union has a list of demands including 36% pay raises over four years, cost of living raises, and an end to different tiers of wages for workers. Ford and GM are offering 20% during the next contract while the last known offer from Stellantis, formerly Fiat Chrysler, was 17.5%.

The companies say the union hasn’t responded to their latest offers and have called union demands unreasonable. They fear taking on increased costs at a time when they have to spend billions to develop and build new electric vehicles, while also making automobiles with internal combustion engines.

The Ford plant that’s targeted employs about 3,300 workers who will strike, and it makes Bronco SUVs and Ranger midsize pickup trucks.

The Toledo Jeep complex has about 5,800 workers and manufactures the Jeep Wrangler SUV and Gladiator pickup.

GM’s Wentzville plant has about 3,600 workers and makes the GMC Canyon and Chevrolet Colorado midsize pickups, as well as the GMC Savana and Chevrolet Express full-size vans.

The union didn’t go after the companies’ big cash cows, which are full-size pickup trucks and big SUVs, and went more for plants that make vehicles with lower profit margins, said Marick Masters, a business professor at Wayne State University in Detroit.

“They want to give the companies some space without putting them up against the wall,” Masters said. “They’re not putting them right into the corner. You put an animal in the corner and it’s dangerous.”

Masters said the companies are going to have to raise their wage offers in order to reach an agreement and address the issue of wage tiers and how to convert temporary workers to full-time jobs.

In a statement late Thursday, Ford said the union responded to the company’s latest “historically generous” offer by showing little movement from its initial demands.

“If implemented, the proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota, and other foreign-owned automakers in the United States that utilize non-union-represented labor,” the statement said.

On CNBC Thursday, Ford CEO Jim Farley said if Ford had agreed to the union’s demands, it would have lost $15 billion during the last decade and gone bankrupt.

The announcement and looming strikes capped a day of both sides griping that the other had not budged enough from their initial positions. But talks continued on Thursday with GM increasing its wage offer and Ford looking for a counteroffer from the union.

The chasm between the two sides could be a shock to a U.S. economy already under strain from elevated inflation. It’s also a test of President Joe Biden’s treasured assertion that he’s the most pro-union president in U.S. history.

In a video released Thursday night, GM manufacturing chief Gerald Johnson said the union initially presented over 1,000 demands that he said would cost more than $100 billion. “That’s unreasonable,” Johnson said. “It’s more than twice the value of all of General Motors and absolutely impossible to absorb and still compete in today’s automotive market.”

If there’s no deal by the end of Thursday, Fain said union officials will not bargain on Friday and instead will join workers on picket lines.

The UAW started out demanding 40% raises over the life of a four-year contract, or 46% when compounded annually. Initial offers from the companies fell far short of those figures.

In addition to cost-of-living pay raises and an end to varying tiers of wages for factory jobs, it wants 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, pension increases for retirees and other items.

The companies have upped their initial wage offers, with Ford and GM now at 20%, and GM offering 10% in the first year. Stellantis has made another offer following its last known offer of 17.5%.

“We know a strong GM is important to all of us,” GM CEO Mary Barra wrote in a letter to workers Thursday. “We are working with urgency and have proposed yet another increasingly strong offer with the goal of reaching an agreement tonight.”

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