At the Detroit Three automakers, a historic strike is now in progress.
After failing to reach an agreement on a new contract by Thursday at 11:59 p.m., the United Auto Workers union is striking against the Big Three automakers at once for the first time.
However, the walkout won’t result in a mass resignation of the almost 150,000 union employees who work for the three automakers.
Instead, following UAW president Shawn Fain’s “stand up strike” approach, employees at three Midwest auto factories — a General Motors assembly facility in Wentzville, Missouri, a Stellantis assembly factory in Toledo, Ohio, and part of a Ford plant in Wayne, Michigan — were the first to leave their jobs.
As of right now, less than 13,000 employees — or less than 9% of the UAW membership at the three firms — are participating in the strike.
However, new places may be added at any time, depending on how negotiations with the corporations go. This tactic is meant to increase pressure on businesses by keeping them in the dark about how their operations can be affected.
Fain said, “This is our generation’s defining moment,” at a Facebook Live event on Thursday. “The world is watching, the money is there, and the cause is just.”
The UAW’s conventional strategy, which has often required having all union members at a particular employer leave their jobs simultaneously, has been altered by the targeted strikes.
In another change from its usual practices, the UAW has chosen to engage in simultaneous negotiations with all three automakers.
The UAW has previously chosen one carmaker to negotiate with, concentrating its efforts on that firm until it reached an agreement, and then exerted pressure on the other two Big Three members to roughly match that agreement.
Still, Fain did not rule eventually having all union workers at the Big Three automakers walk off the job at once.
A confrontational approach
As the UAW’s first democratically elected chairman, Fain, a longtime union member, has adopted a more aggressive negotiating style than his predecessors, even going so far as to record himself tossing offers from the Big Three automakers into the garbage.
He has frequently reiterated his commitment to the union’s main economic objectives, which include cost-of-living adjustments, 40% pay increments that would be in pace with CEO income increases, and the restoration of pension and retiree healthcare.
On Wednesday, Fain said to UAW members, “The Big Three can afford to immediately give us our fair share.”
Fain has criticized past UAW leaders for reaching agreements with the automakers that, in his opinion, did not benefit the 150,000 union members who work for these businesses.
The UAW made significant concessions to assist the car industry in recovering from the 2008 financial crisis.
A significant factor guiding this year’s discussions is the fact that workers are still suffering as a result of earlier concessions.
The UAW’s demands under Fain have also been based on the automakers’ recent financial success as well as the wage gaps between top executives and rank-and-file union members.
The Big Three automakers have seen their combined revenues jump during the epidemic as variables like component shortages have caused car costs to soar, boosting profit margins for businesses.
Fain contrasted the corporations’ earnings, which have climbed by 65% over the past four years, with autoworkers’ salary, which has increased by just 6% over the same period.
Additionally, the shift of the car sector to electric vehicles hangs over the discussions. As businesses spend more in their EV manufacturing, the UAW is battling for worker safeguards amid worries about what it would mean for regular car jobs.
The economy of the United States might be threatened by a protracted strike. The impact on the economy if all 150,000 or so UAW auto union members went on a six-week strike would be equivalent to a 0.2% reduction in fourth-quarter GDP.
That’s not much in and of itself, and the economy has so far shown to be much stronger than anticipated.
However, the strikes might make the U.S. even more vulnerable to negative factors like rising petrol costs and the lifting of the student loan moratorium.
The automakers are frustrated
The initial pay promises from all three manufacturers have changed, going from 9 or 10% hikes to as much as 20% in the most current offerings. The union claims that the proposals fail to adequately take into account years of stagnating earnings.
However, the businesses assert that they have made sincere efforts to come to settlements. On Thursday afternoon, General Motors made a last-minute offer to prevent a strike. CEO Mary Barra referred to the offer as a “compelling and unprecedented economic package.”
Despite the strong rhetoric from UAW leadership, Barra noted in a statement regarding GM’s most recent offer, which would increase salaries by 20% throughout the contract, that “it addresses what you’ve told us is most important to you.”
The three firms have also offered cost-of-living adjustments, but the union claims that these proposals do not guarantee enough pay protection to keep up with inflation over the following four and a half years.
According to Ford insiders, fully complying with the UAW’s demands would entirely cease new manufacturing owing to much higher labor costs.
Ford CEO Jim Farley said on Thursday on CNBC that the company would have lost $15 billion and been bankrupt by now if it had agreed to the UAW’s demands. “Our company cannot possibly be sustained.”
Any agreement reached between union representatives and one of the automakers would still need to be approved by UAW members, and workers might decide to send their officials back to the negotiating table to demand more.
The summer of labor
The UAW walkout, according to information from the Cornell University School of Industrial and Labour Relations, is the 17th strike in the United States this year that has included more than 2,000 workers.
Many other unions have used strike threats, which have in some cases led to significant gains for employees.
After protracted talks that put 340,000 UPS employees in danger of going on strike, the Teamsters union in July won a 48% average total salary rise for current part-time workers over the life of the five-year contract.
The 15,000 American Airlines pilots who are represented by the Allied Pilots Association successfully persuaded the airlines to raise pilot compensation by more than 46% over four years in August.
The autoworkers might not have the same negotiating power to secure such a significant salary increase as UPS employees and pilots, according to some labor analysts.
Many Americans used to choose the Big Three automakers as their primary option. But today’s market is inhabited by international automakers like Toyota and Volkswagen, who are unaffected by threats of strikes and can keep producing automobiles at a regular rate.
Harry Katz, a professor of collective bargaining at Cornell University, said of automakers’ capacity to move manufacturing to the non-union South or abroad: “They don’t have exceptional leverage because there’s a lot of competition.”
