A historic strike at the Detroit
Three automakers is now underway.
For the first time ever, the United Auto Workers union is
striking against all Big Three automakers at once, after it failed to clinch a
deal on a new contract by the 11:59 p.m. deadline on Thursday.
But the strike won't involve all of the nearly 150,000 union
members who work at the three automakers walking off their jobs en masse.
Instead, workers at three Midwest auto plants — a General
Motors assembly plant in Wentzville, Missouri, a Stellantis assembly plant in
Toledo, Ohio, and part of a Ford plant in Wayne, Mich. -- were
the first to walk off the job under UAW president Shawn Fain's "stand up
strike" strategy.
For now, that means the
strike involves just under 13,000 workers — less than 9% of UAW membership at
the three companies.
But additional locations
could follow at a moment's notice, depending on how bargaining with the
companies progresses — a strategy intended to ramp up the pressure on companies
by keeping them guessing about how their operations would be disrupted.
"This is our
generation's defining moment," Fain told UAW members at a Facebook Live
event on Thursday night. "The money is there, the cause is righteous, the
world is watching."
The targeted strikes are a
departure from the UAW's traditional playbook, which has usually involved having
all union members at a single company walk off the job at once.
The UAW has also opted to
negotiate with all three automakers at once, in another departure from its
previous methods.
Previously, the UAW had
picked one automaker to hash out a deal with, focusing its actions on that
company until it got a deal — and then pushed the other two of the Big Three
members to more or less match that deal.
Still, Fain did not rule eventuallly having all union workers at the Big Three automakers walk off the job at once
A
confrontational approach
Under Fain, the UAW has also
hinged its demands on the automakers' profits in recent years, as well as pay
disparities between top executives and rank-and-file union members.
Collectively, the Big Three
automakers have seen their profits soar during the pandemic when factors
including parts shortages led to surging car prices, padding the profit margins
of companies.
In a Facebook Live event on
Wednesday night, Fain compared the companies' profits – up 65% over four years
– to autoworkers' pay, which increased just 6% in that same timeframe.
And looming over the
negotiations is the auto industry's transition to
electric vehicles. The UAW is fighting for protections for workers as
companies increasingly invest in their EV production, raising concerns about
what that could mean for traditional auto jobs
A prolonged strike poses a
potential threat to the U.S. economy. In a scenario in which all of the about
150,000 UAW auto union members were to strike for six weeks, the impact on the
economy would amount to shaving an estimated 0.2% off fourth-quarter GDP.
That's not a lot in itself,
and the economy has proven so far to be far sturdier than expected.
But the strikes could add yet
another adverse factor for the U.S., including rising gas prices and the end of
the student loan moratorium.
The
automakers are frustrated
All three automakers have
budged on their initial wage proposals, from opening bids of 9 or 10% increases to as high as 20% in the most recent offers. The
union argues those offers don't sufficiently account for years of stagnant
wages.
But the companies say they've
made genuine attempts to reach agreements. General Motors attempted to head off
a strike with a down-to-the-wire offer on Thursday afternoon, a proposal CEO
Mary Barra called a "compelling and unprecedented economic package."
"It addresses what
you've told us is most important to you, in spite of the heated rhetoric from
UAW leadership," Barra said in a statement about GM's latest offer, which
would raise wages by 20% over the length of the contract.
The three companies have also
put cost of living protections on the table — though the union says these
offers wouldn't provide enough wage protection to keep up with inflation over
the next four-and-a-half years.
Ford sources told reporters
on Thursday that meeting the UAW's demands in full would completely halt new
production due to much higher labor costs.
"If we signed up for the
UAW's requests...we would've lost $15 billion and gone bankrupt by now,"
Ford CEO Jim Farley told CNBC on Thursday. "There's no way we can be
sustainable as a company."
UAW members would still have
to ratify any deal struck between union negotiators and one of the automakers,
and workers could choose to send their leaders back to the table to push for
more.
The
summer of labor
The UAW walkout is the 17th strike in the U.S. involving more
than 2,000 workers so far this year, according to data from the Cornell
University School of Industrial and Labor Relations
Many other unions have threatened
to strike – in some cases resulting in substantial gains for workers.
After months of contentious negotiations that led 340,000 UPS
workers to the brink of a strike, the Teamsters union in July secured
a 48% average total wage increase, over the course of the five-year contract,
for existing part-time workers.
In August, the Allied Pilots Association, which represents
15,000 American Airlines pilots, successfully pressured the airlines to increase
pilots' pay by more than 46% over four years.
However some labor experts say the
autoworkers might not have the same leverage as UPS workers and pilots to get
that big of a pay raise.
The Big Three automakers were once the main choice for many
Americans. But today, the market is populated with foreign automakers such as
Toyota and Volkswagen, which are not being impacted by strike threats and can
continue to produce cars at a steady clip.
"They don't have exceptional leverage because there's a lot of competition," said Harry Katz, a professor of collective bargaining at Cornell University, referring to automakers' ability to shift production to the non-union South or abroad.
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