In an unprecedented move, approximately one tenth of the United Automobile Workers (UAW) have launched a strike against America’s ‘Big Three’ automakers – General Motors, Ford, and Chrysler owner Stellantis. Their aim is to convince these giants to increase wages, amidst a period of substantial profits and as the industry starts transitioning from fuel-driven to electric vehicles.
For the first time in the union’s history, simultaneous strikes are taking place to exert a new pressure on these companies. The intent is to reclaim some of the compensation and benefits surrendered by workers in past years. At present, the strikes are restricted to three assembly plants: a General Motors factory in Missouri, a Ford plant in Michigan, and a Jeep plant run by Stellantis in Ohio.
President Joe Biden has shown his solidarity with the workers, dispatching aides to Detroit to help end the deadlock. He has urged the Big Three to share their “record profits” with the workforce. The union leader, Shawn Fain, has warned that more strikes may occur if the companies don’t put forward improved offers. The employees want a 36% wage rise over a four-year span. The companies have countered with proposals of increases varying between 17.5% and 20%.
Many striking workers are hoping that the strikes will be short-lived, but are resolved in their cause, voicing their support for their leader’s firm approach. One such individual noted the sacrifices they made, such as working through the COVID-19 pandemic and thereby contributing towards the companies’ substantial profits.
Previously over its 88-year history, the UAW had always negotiated contracts with individual automakers. Each agreement was used more as a template than a guarantee for subsequent contract discussions. Presently, about 13,000 of the companies’ 146,000 workers are striking, resulting in operational complications for the automakers and simultaneously putting a strain on the union’s strike fund.
If negotiations continue to be drawn out, the consequences of the strikes will escalate for both workers and companies. Not only will it pause their operations, but the car dealers could face car shortages leading to increased prices. This could push customers to purchase from competing foreign automakers employing non-unionized labor force threatening the economy profiting from controlled inflation.
The shift in negotiating techniques is credited to Fain, the first leader to be elected by the workers directly. Fain came to power with a robust campaign against the prevalent bribery and embezzlement culture that was in place and resulted in the conviction of two former UAW leaders. Fain proposed eliminating this “company-unionism,” a practice he believes disadvantages workers by sanctioning plant closures and failing in obtaining more funds from the automakers.
The stakes are high as the strikes will not only direct the future of the union, but also define the pathway for the American auto industry during these transformative times. The situation may also become crucial in the upcoming presidential elections, challenging Biden’s image as the most labor-friendly president in American history.
In addition to wage hikes, the union’s key demands include restoring the cost-of-living pay increases; ending the multi-tiered wage structure for factory jobs; introducing a 32-hour work week with pay for 40 hours; reinstating the traditional defined-benefit pension plans for new joiners who are currently only being offered 401(k)-type retirement plans; and pension hikes for retirees, among others.
Given the prevailing industry trend of moving towards electric vehicles, the union is keen to ensure its members are employed in automaker joint-ventures such as electric battery factories, thus safeguarding jobs for the future.
While the news of strikes has sent ripples through the industry, the companies maintain they are grappling with never-before-seen demands. As they navigate developing and constructing the new generation of electric vehicles, while concurrently manufacturing the existing petrol-driven models, there are concerns over the possible rise in labor costs. The consequent vehicle prices could be set higher than those offered by foreign automakers with US factories. The strike’s complete impact is yet to be seen, but one thing is certain – the times for the Big Three – GM, Ford and Stellantis, are anything but easy.
