Rising Tensions between UAW and Major Automakers Point to a More Aggressive Union as Strike Deadline Nears

by Joshua Brown
UAW-Automaker Negotiations

A demand for a 46% salary increase, a 32-hour workweek with payment equivalent to 40 hours, and the reinstatement of traditional pension systems.

These audacious terms, put forth by an increasingly assertive United Auto Workers (UAW) union in negotiations with General Motors, Stellantis, and Ford, are bringing the union perilously close to a strike as its contract approaches its expiration on September 14.

Despite their considerable profits, these leading automakers have been quick to dismiss the union’s demands. They argue that such proposals are unfeasible in the context of heightened competition from Tesla and lower-wage international car manufacturers, particularly as the industry transitions from internal combustion engines to electric vehicles. This significant disagreement between the parties raises the possibility of strikes that could further inflate already high vehicle prices.

The potential work stoppage, which would involve 146,000 UAW members, coincides with a broader resurgence of union activity across the United States. A rising number of strikes and strike threats across various sectors, including from Hollywood actors and writers, reflect this trend.

Shawn Fain, the newly-elected and confrontational UAW president, has described the ongoing negotiations as a struggle between billionaires and middle-class labor. Just last month, he publicly disparaged a contract proposal from Stellantis as worthless, symbolically discarding it into a trash bin during a Facebook Live event.

Over the past ten years, the three Detroit-based automakers have collectively reported $164 billion in net income, including $20 billion this year alone. Their CEOs each earn multi-million-dollar annual salaries. Contrastingly, Fain argues, most union members lack pensions and receive inferior healthcare.

UAW members, along with their Canadian counterparts whose contracts expire four days later, have overwhelmingly voted to authorize strike action if necessary. The union has yet to decide whether to target one or all three automakers for a strike, although doing so could deplete the union’s strike fund in less than three months.

According to calculations by the Anderson Economic Group, a strike lasting merely 10 days could cost the three automakers close to a billion dollars. For perspective, a 40-day strike in 2019 cost General Motors $3.6 billion.

Accusations of unfair labor practices have been leveled against Stellantis and General Motors by the UAW, citing a lack of counterproposals. Ford, too, has come under criticism from Fain for rejecting most of the union’s proposals, which he says devalues the workers’ contributions.

Business professor Marick Masters at Wayne State University suggests that the strong job market and these companies’ high profits provide Fain with significant negotiating leverage. Moreover, the forthcoming launch of a variety of electric vehicles, which would be delayed by a strike, makes these companies particularly vulnerable, according to Masters.

While Fain, who became the UAW’s president through the union’s first direct election, has set high expectations, even he admits the audacity of the demands. These include a restoration of traditional defined-benefit pensions for new hires, an end to tiered wages, increased pensions for retirees, and a 32-hour workweek with 40 hours’ worth of pay.

As it stands, the issue of union representation at 10 proposed electric vehicle battery plants remains a major obstacle to reaching an agreement. These plants are primarily joint ventures with South Korean battery producers that are aiming for lower wages. In the broader context, the union’s negotiating power has been weakened by their inability to unionize other major automakers like Hyundai-Kia, Nissan, Volkswagen, Honda, and Toyota.

If labor costs for Detroit automakers rise, these costs will likely be transferred to consumers, exacerbating the current high prices of vehicles, according to Sam Fiorani, an analyst with AutoForecast Solutions.

With the clock ticking toward a possible strike, experts like Masters and labor professor Harry Katz suggest that there is still an opportunity for both parties to reach an agreement. However, for Fain, this will require turning his strong rhetoric into tangible results for union members.

Contributions to this report were made by AP Writers Bruce Schreiner in Louisville, Kentucky, and Christopher Rugaber in Washington.

Frequently Asked Questions (FAQs) about UAW-Automaker Negotiations

What are the key demands that the UAW is making from General Motors, Stellantis, and Ford?

The United Auto Workers union has put forth a set of aggressive demands, including a 46% pay raise, a 32-hour workweek with pay equivalent to 40 hours, and the restoration of traditional pension schemes. These demands are described as “audacious” even by the UAW’s own president.

How are the automakers responding to the UAW’s demands?

The automakers, which include General Motors, Stellantis, and Ford, have rejected the UAW’s list of demands. They assert that such requests are unrealistic, especially considering the competitive pressure from Tesla and lower-wage foreign automakers as the industry transitions to electric vehicles.

What is the financial backdrop against which these negotiations are occurring?

Over the last decade, the Detroit Three automakers have posted collective net incomes of $164 billion, with $20 billion generated this year alone. Meanwhile, the CEOs of these companies receive multi-million-dollar annual compensations.

What potential impact could a strike have on the automakers?

If a strike lasts even just 10 days, it is estimated that it could cost the three major automakers nearly a billion dollars. During a 40-day UAW strike in 2019, General Motors alone lost $3.6 billion.

Who is Shawn Fain, and how is he approaching these negotiations?

Shawn Fain is the new leader of the UAW and has adopted a combative stance in the contract talks with Detroit’s automakers. He has characterized the negotiations as a war between billionaires and the ordinary middle class. Fain won the UAW presidency in the first direct election by members and has set high expectations for significant gains.

What other labor movements are happening in the United States?

The potential strike by the UAW comes amidst a backdrop of increasingly assertive labor unions across various industries in the U.S., including Hollywood actors, writers, and railroad employees. The number of strikes and threatened strikes is growing.

Are there any other sticking points in the negotiations?

One significant issue is the union representation at 10 EV battery plants proposed by the companies. These plants are joint ventures with South Korean battery makers who want to pay less. The union fears that due to the simplicity of building electric vehicles, fewer workers will be needed, leading to job losses.

What might the consequences be for consumers if a strike occurs?

A prolonged strike would likely lead to a further reduction in the already limited supply of vehicles, resulting in higher prices for consumers.

How vulnerable are the automakers?

According to Marick Masters, a business professor, the strong U.S. job market and the companies’ large profits have given the UAW some leverage. The automakers are also about to release a range of new electric vehicles that would be delayed by a strike.

More about UAW-Automaker Negotiations

  • UAW Official Site
  • General Motors Financial Reports
  • Stellantis Corporate Information
  • Ford Financial Overview
  • Anderson Economic Group Studies on Automotive Industry
  • Cornell University Labor Strike Database
  • United States Labor Statistics
  • Wayne State University Business Faculty Profiles
  • AutoForecast Solutions Industry Analysis
  • UPS Labor Contract Details
  • Electric Vehicle Market Analysis
  • Labor Relations in the Automotive Industry
  • Tesla’s Impact on the Automotive Industry

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AutoFan22 September 4, 2023 - 11:07 am

Shawn Fain’s a tough cookie, huh. Calling the Stellantis proposal “trash” and tossing it? Thats a statement!

FairWagesNow September 4, 2023 - 12:10 pm

Do they really need traditional pensions anymore? The world’s changed, maybe the benefits should too.

SkepticalSam September 4, 2023 - 4:47 pm

Strikes sound good on paper until you realize it might jack up vehicle prices even more. Who really wins?

MoneyMatters September 4, 2023 - 4:57 pm

if these companies are making billions, shouldn’t some of that go to the workers. Just sayin’

PolicyGeek September 5, 2023 - 12:53 am

This isn’t just about auto industry, it’s a reflection of labor movements across the board in the US right now.

UnionStrong September 5, 2023 - 1:02 am

Good on the UAW for taking a stand. Its about time workers got their fair share.

FutureView September 5, 2023 - 1:20 am

If they strike, it might just accelerate the shift to foreign car makers. And what then?

JohnDoe September 5, 2023 - 3:42 am

Wow, 46% pay raise? thats insane. UAW’s really pushing the envelope here.

EcoWarrior September 5, 2023 - 4:17 am

Transitioning to electric vehicles is the future, but man the labor issues are complicating things for the big 3.

JaneInvest September 5, 2023 - 9:28 am

Strikes could also affect the stock prices of these companies. Investors, be warned!


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