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

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

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